HL Deb 16 October 1985 vol 467 cc652-6

22 Clause 12, page 12, line 25, after 'it', insert 'on such date as shall be specified in the warrant, being a date'.

36 Clause 16, page 16, line 28, after 'continue', insert '(subject to section 17(6) of this Act)'.

37 Clause 17, page 18, line 3, leave out 'sist the sequestration' and insert 'order that the proceedings in the sequestration shall continue but shall be'.

38 Page 18, line 7, after 'send', insert '—(a)'.

39 Page 18, line 9, leave out '(a)'.

40 Page 18, line 12, after '(b)', insert 'a copy of any order'.

61 Clause 27, page 27, leave out lines 12 to 19 and insert— '(1A) Where the sheriff grants an application under paragraph (b) of subsection (1) above—

  1. (a) except where paragraph (b) below applies, the commissioners, or if there are no commissioners, the Accountant in Bankruptcy, shall call a meeting of the creditors, to be held not more than 28 days after the permanent trustee has resigned, for the election by them of a new permanent trustee;
  2. (b) if the application has been granted subject to the election of a new permanent trustee, the resigning permanent trustee shall himself call a meeting of the creditors, to be held not more than 28 days after the granting of the application, for the purpose referred to in paragraph (a) above.'.

62 Page 27, line 20, leave out from beginning to second 'of' in line 23 and insert— '(2) Where the commissioners become, or if there are no commissioners the Accountant in Bankruptcy becomes, aware that the permanent trustee has died, they or as the case may be the Accountant in Bankruptcy shall as soon as practicable after becoming so aware call a meeting of creditors for the election by the creditors'.

63 Page 27, line 29, after 'subsection (1)', insert ', (1A)'.

64 Page 27, line 31, after 'subsection', insert '(1A) or'.

66 Clause 28, page 28, line 24, leave out 'subsection (4) below or'.

67 Page 28, line 31, at end insert 'on the basis of circumstances other than those to which subsection (9) below applies'.

68 Page 29, line 5, after 'above', insert 'or under section 1(3) of this Act'.

69 Page 29, line 10, leave out 'or subsection (1) above'.

70 Page 29, line 12, leave out 'mentioned in' and insert 'to which'.

71 Page 29, line 12, after 'below', insert 'applies'.

72 Page 29, line 33, leave out 'referred to in subsection (6) above' and insert 'to which this subsection applies'.

73 Page 29. line 36, after 'whatsoever', insert 'other than death'.'.

116 Clause 48, page 50, line 38, after 'affect', insert '(a)'.

117 Page 50, line 40, at end insert—'or

  1. (b) any preference of the holder of a lien over a title deed or other document which has been delivered to the permanent trustee in accordance with a requirement under section 37(4) of this Act.'.

140 Clause 59, page 60, line 17, leave out 'The sederunt book shall be' and insert 'Subject to subsection (1A) below, whoever by virtue of this Act for the time being holds the sederunt book shall make it'.

141 Page 60, line 18, at end insert— .'(1A) As regards any case in which the person on whom a duty is imposed by subsection (1) above is the Accountant in Bankruptcy, the Court of Session may by act of sederunt—

  1. (a) limit the period for which the duty is so imposed; and
  2. (b)prescribe conditions in accordance with which the duty shall be carried out.'.

142 Clause 60, page 60, line 40. leave out from 'reason' to end of line 42 and insert 'anything required or authorised to be done in, or in connection with, the sequestration process cannot be done, make such order as may be necessary to enable that thing to be done.'.

153 After Clause 66, insert the following new clause: Supplies by utilities. '.—(1) This section applies where on any day ("the relevant day")

  1. (a) sequestration is awarded in a case where the petition was presented by the debtor.
  2. (b) a warrant is granted under section 12(2) of this Act on a case where the petition was presented by a creditor or a trustee acting under a trust deed; or
  3. (c) the debtor grants a trust deed,
and in this section "the office holder" means the interim trustee, the permanent trustee or the trustee acting under a trust deed, as the case may be. (2) If a request falling within subsection (3) below is made for the giving after the relevant day of any of the supplies mentioned in subsection (4) below, the supplier—
  1. (a) may make it a condition of the giving of the supply that the office holder personally guarantees the payment of any charges in respect of the supply; and
  2. (b) shall not make it a condition of the giving of the supply, or do anything which has the effect of making it a condition of the giving of the supply, that any outstanding charges in respect of a supply given to the debtor before the relevant day are paid.
(3) A request falls within this subsection if it is made—
  1. (a) by or with the concurrence of the officer holder, and
  2. (b) for the purpose of any business which is or has been carried on by or on behalf of the debtor.
(4) The supplies referred to in subsection (2) above are—
  1. (a) a supply of gas by the British Gas Corporation;
  2. (b) a supply of electricity by an Electricity Board (within the meaning of the Energy Act 1983);
  3. (c) a supply of water by a water authority (within the meaning of the Water (Scotland) Act 1980);
  4. (d) a supply of telecommunication services (within the meaning of the Telecommunications Act 1984) by a public telecommunications operator (within the meaning of that Act).
(5) In subsection (4) above the reference to telecommunication service does not include a reference to services consisting in the conveyance of cable programmes, that is to say programmes included in cable programme services (within the meaning of the Cable and Broadcasting Act 1984).'.

154 After Clause 66, insert the following new clause: Right of Accountant in Bankruptcy and of petition department of the Court of Session to free copy of Edinburgh Gazette '. The keeper of the Edinburgh Gazette shall on each day of its publication, send a free copy of it to—

  1. (a) the Accountant in Bankruptcy; and
  2. (b) the petition department of the Court of Session.'.

155 Clause 68, page 65, line 26, leave out 'means such person as may be prescribed' and insert 'shall be construed in accordance with section [Meaning of "associate''] of this Act;'.

162 After Clause 68, insert the following new clause: Meaning of 'associate'. —(1) Subject to subsection (7) below, for the purposes of this Act any question whether a person is an associate of another person shall be determined in accordance with the following provisions of this section (any reference, whether in those provisions or in regulations under the said subsection (7), to a person being an associate of another person being taken to be a reference to their being associates of each other). (2) A person is an associate of an individual if that person is the individual's husband or wife, or is a felative, or the husband or wife of a relative, of the individual or of the individual's husband or wife. (3) A person is an associate of any person with whom he is in partnership, and of the husband or wife or a relative of any individual with whom he is in partnership; and a firm is an associate of any person who is a member of the firm. (4) For the purposes of this section a person is a relative of an individual if he is that individual's brother sister, uncle, aunt, nephew, niece, lineal ancestor or lineal descendant, treating—

  1. (a) any relationship of the half blood as a relationship of the whole blood and the stepchild or adopted child of any person as his child; and
  2. (b) an illegitimate child as the legitimate child of his mother and reputed father,
and references in this section to a husband or wile include a former husband or wife and a reputed husband or wife. (5) A person is an associate of any person whom he employs or by whom he is employed; and for the purposes of this subection any director or other officer of a company shall be treated as employed by that company. (6) In subsection (5) above, "company" includes any body corporate (whether incorporated in Great Britain or elsewhere). (7) The Secretary of State may by regulations—
  1. (a) amend the foregoing provisions of this section so as to provide further categories of persons who. for the purposes of this Act, are to be associates of other persons; and
  2. (b) provide that any or all of subsections (2) to (6) above (or any subsection added by virtue of paragraph (a) above) shall cease to apply, whether in whole or in part, or shall apply subject to such modifications as he may specify in the regulations;
and he may in the regulations make such incidental or transitional provision as he considers appropriate.'.

174 Schedule 2, page 72, line 8, leave out 'sub-paragraph (2)' and insert 'sub-paragraphs (2) and (3)'.

175 Page 72, line 12, at end insert— '(3) The permanent trustee, on appointment, shall make such insertions in the sederunt book as are appropriate to provide a record of the sequestration process before his appointment, but he shall make no insertion therein relating to the written comments made by the interim trustee under section 20(2)(c) of this Act. 1A.—(1) In place of subsections (1) to (4) of section 27 sub-paragraphs (2) and (3) below shall have effect. (2) The permanent trustee may resign office with the consent of the Accountant in Bankruptcy or the sheriff. (3) Where the permanent trustee resigns under subparagraph (2) above, or dies, a person nominated by the Accountant in Bankruptcy from the list of interim trustees, not being a person ineligible for election as permanent trustee under section 24(2) of this Act, shall forthwith apply to the sheriff for appointment as permanent trustee, and the sheriff shall thereupon so appoint him. 1B. In section 28—

  1. (a) subsection (5) shall not have effect but subparagraph (3) of paragaph 1A above shall apply where the permanent trustee has been removed from office under subsection (1)(b) of section 28 of this Act or following an appeal under subsection (4) of that section as that sub-paragraph applies where he resigns or dies;
  2. (b) subsection (6) shall have effect as if for the words from "(b)" to the end there were substituted the words—
    1. "(b) appoint as permanent trustee a person nominated by the Accountant in Bankruptcy from the list of interim trustees, not being a person ineligible for election as permanent trustee under section 24(2) of this Act.";
  3. (c) subsection (7) shall not have effect; and
  4. (d) subsection (8) shall have effect as if for the word "(4)" there were substituted the word "(5)".
1C. Where an appointment is made under paragraph 1A(3), or by virtue of paragraph 1B(a) or (b), above the provisions of this Act shall continue to have effect as regards the sequestration subject to such modifications and with such further provisions as are set out in this Schedule.'.

Lord Cameron of Lochbroom

My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 22, and, for the convenience of your Lordships' House, I should like to speak also to Amendments Nos. 36 to 40, 61 to 64, 66 to 73, 116, 117, 140 to 142, 153 to 155, 162, 174, and 175.

Most of the amendments in this group make certain relatively minor changes and improvements in the sequestration procedure.

The only other amendments in this group to which I would like to draw your Lordships' attention are Amendments Nos. 153 and 162. Both of these insert new clauses into the Bill. Amendment No. 153 prevents the suppliers of certain utilities, such as electricity and gas, from abusing their monoply position to obtain a preference in the sequestration by threatening to discontinue post-sequestration supplies of those utilities until any pre-sequestration debts incurred by the bankrupt have been paid.

Amendment No. 162 provides a definition of what is meant by "associate" for the purposes of the Bill. The expression "associate" is used in connection with the provisions about gratuitous alienations: that is, a gift made by a debtor to an associate is challengeable if it is made within five years before the debtor's sequestration, whereas, if it is made to any other person, it is only challengeable within two years before that date. The term "associate" is in fact the proposed replacement of the existing concept of "a conjunct and confident person".

In the Bill as it was introduced and left your Lordships' House, it was proposed that the term "associate" should only be defined in regulations because, as I explained to your Lordships, it was intended at that time to replace that definition in another place with a provision which referred to the definition in the Insolvency Bill. However, it has since become clear that, while the definition of "associate" in the Insolvency Bill might provide a useful basis for the definition for the purposes of this Bill, it was not as extensive as the existing interpretation of what was meant by "a conjunct and confident person" and, being an exhaustive definition, it could not be readily adapted to meet changing circumstances.

Accordingly, it was considered in another place, and I hope that your Lordships will agree, that it would be preferable to have a self-standing definition in this Bill which, although it was based largely upon the definition in the Insolvency Bill, also made provision for its amendment and extension by regulations. It is hoped that this will enable the definition of "associate" to take account of changing circumstances in a way which is not only as effective as the judicial interpretation of "conjunct and confident" but is also more appropriate to the way in which statutory provisions are now drafted. My Lords, I beg to move.

Moved, That this House do agree with the Commons in the said amendment.—(Lord Cameron of Lochbroom.)

On Question, Motion agreed to.

7.15 p.m.