HC Deb 26 October 1992 vol 212 cc825-6
Lord James Douglas-Hamilton

I beg to move amendment No. 15, in page 8, leave out lines 14 and 15 and insert—

'(4) In this Act 'the date of sequestration' means—

  1. (a) where the petition for sequestration is presented by the debtor, the date on which sequestration is awarded;
  2. (b) where the petition for sequestration is presented by a creditor or a trustee acting under a trust deed—
  3. (i) the date on which the court grants warrant under subsection (2) above to cite the debtor; or
  4. (ii) where more than one such warrant is granted, the date on which the first such warrant is granted.'.
The amendment to the definition of "date of sequestration" has been proposed as a result of comments during the summer received from the Law Society of Scotland. It fears that the definition currently contained in the Bill may give rise to difficulties in relation to conveyancing transactions. A debtor may sell a property after a petition for his sequestration is presented to the court. The purchaser would not necessarily be aware that the petition had been presented and would be purchasing in good faith. However, under the Bill as presently defined, title to the property would transfer to the debtor's estate and vest in the permanent trustee following the granting of the award of sequestration, leaving the third party at a loss.

The definition in the Bill was introduced originally at the suggestion of practitioners to bring the practice in sequestrations into line with that in insolvencies. It also clarified a problem where a court grants two warrants to cite a debtor on different days. At present there is confusion as to which warrant should trigger the date of sequestration.

As a consequence of our discussions with the Law Society, the definition will revert back to that contained in the 1988 Act, subject to a slight amendment to take account of the fact that more than one warrant to cite the debtor may be granted by the court.

I commend this sensible technical amendment to the House.

Amendment agreed to.

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