Bankruptcy (Scotland) Act 1985 (repealed)

Administration of estate by permanent trusteeS

38 Taking possession of estate by permanent trustee. S

(1)The permanent trustee shall—

(a)as soon as may be after his confirmation in office, for the purpose of recovering the debtor’s estate under section 3(1)(a) of this Act, and subject to section 40 of this Act, take possession of the debtor’s whole estate so far as vesting in the permanent trustee under sections 31 and 32 of this Act and any document in the debtor’s possession or control relating to his assets or his business or financial affairs;

(b)make up and maintain an inventory and valuation of the estate which he shall record in the sederunt book; and

(c)forthwith thereafter send a copy of any such inventory and valuation to the Accountant in Bankruptcy.

(2)The permanent trustee shall be entitled to have access to all documents relating to the assets or the business or financial affairs of the debtor sent by or on behalf of the debtor to a third party and in that third party’s hands and to make copies of any such documents.

(3)If any person obstructs a permanent trustee who is exercising, or attempting to exercise, a power conferred by subsection (2) above, the sheriff, on the application of the permanent trustee, may order that person to cease so to obstruct the permanent trustee.

(4)The permanent trustee may require delivery to him of any title deed or other document of the debtor, notwithstanding that a right of lien is claimed over the title deed or document; but this subsection is without prejudice to any preference of the holder of the lien.

39 Management and realisation of estate.S

(1)As soon as may be after his confirmation in office, the permanent trustee shall consult with the commissioners or, if there are no commissioners, with the Accountant in Bankruptcy concerning the exercise of his functions under section 3(1)(a) of this Act; and, subject to subsection (6) below, the permanent trustee shall comply with any general or specific directions given to him, as the case may be—

(a)by the creditors;

(b)on the application under this subsection of the commissioners, by the court; or

(c)if there are no commissioners, by the Accountant in Bankruptcy,

as to the exercise by him of such functions.

(2)The permanent trustee may, but if there are commissioners only with the consent of the commissioners, the creditors or the court, do any of the following things if he considers that its doing would be beneficial for the administration of the estate—

(a)carry on any business of the debtor;

(b)bring, defend or continue any legal proceedings relating to the estate of the debtor;

(c)create a security over any part of the estate;

(d)where any right, option or other power forms part of the debtor’s estate, make payments or incur liabilities with a view to obtaining, for the benefit of the creditors, any property which is the subject of the right, option or power.

(3)Any sale of the debtor’s estate by the permanent trustee may be by either public sale or private bargain.

(4)The following rules shall apply to the sale of any part of the debtor’s heritable estate over which a heritable security is held by a creditor or creditors if the rights of the secured creditor or creditors are preferable to those of the permanent trustee—

(a)the permanent trustee may sell that part only with the concurrence of every such creditor unless he obtains a sufficiently high price to discharge every such security;

(b)subject to paragraph (c) below, the following acts shall be precluded—

(i)the taking of steps by a creditor to enforce his security over that part after the permanent trustee has intimated to the creditor that he intends to sell it;

(ii)the commencement by the permanent trustee of the procedure for the sale of that part after a creditor has intimated to the permanent trustee that he intends to commence the procedure for its sale;

(c)where the permanent trustee or a creditor has given intimation under paragraph (b) above, but has unduly delayed in proceeding with the sale, then, if authorised by the court in the case of intimation under—

(i)sub-paragraph (i) of that paragraph, any creditor to whom intimation has been given may enforce his security; or

(ii)sub-paragraph (ii) of that paragraph, the permanent trustee may sell that part.

(5)The function of the permanent trustee under section 3(1)(a) of this Act to realise the debtor’s estate shall include the function of selling, with or without recourse against the estate, debts owing to the estate.

(6)The permanent trustee may sell any perishable goods without complying with any directions given to him under subsection (1)(a) or (c) above if the permanent trustee considers that compliance with such directions would adversely affect the sale.

(7)The validity of the title of any purchaser shall not be challengeable on the ground that there has been a failure to comply with a requirement of this section.

(8)It shall be incompetent for the permanent trustee or an associate of his or for any commissioner, to purchase any of the debtor’s estate in pursuance of this section.

40 Power of permanent trustee in relation to the debtor’s family home.S

(1)Before the permanent trustee sells or disposes of any right or interest in the debtor’s family home he shall—

(a)obtain the relevant consent; or

(b)where he is unable to do so, obtain the authority of the court in accordance with subsection (2) below.

(2)Where the permanent trustee requires to obtain the authority of the court in terms of subsection (1)(b) above, the court, after having regard to all the circumstances of the case, including—

(a)the needs and financial resources of the debtor’s spouse or former spouse;

(b)the needs and financial resources of any child of the family;

(c)the interests of the creditors;

(d)the length of the period during which (whether before or after the relevant date) the family home was used as a residence by any of the persons referred to in paragraph (a) or (b) above,

may refuse to grant the application or may postpone the granting of the application for such period (not exceeding twelve months) as it may consider reasonable in the circumstances or may grant the application subject to such conditions as it may prescribe.

(3)Subsection (2) above shall apply—

(a)to an action for division and sale of the debtor’s family home; or

(b)to an action for the purpose of obtaining vacant possession of the debtor’s family home,

brought by the permanent trustee as it applies to an application under subsection (1)(b) above and, for the purposes of this subsection, any reference in the said subsection (2) to that granting of the application shall be construed as a reference to the granting of decree in the action.

(4)In this section—

(a)“family home” means any property in which, at the relevant date, the debtor had (whether alone or in common with any other person) a right or interest, being property which was occupied at that date as a residence by the debtor and his spouse or by the debtor’s spouse or former spouse (in any case with or without a child of the family) or by the debtor with a child of the family;

(b)“child of the family” includes any child or grandchild of either the debtor or his spouse or former spouse, and any person who has been brought up or accepted by either the debtor or his spouse or former spouse as if he or she were a child of the debtor, spouse or former spouse whatever the age of such a child, grandchild or person may be;

(c)“relevant consent” means in relation to the sale or disposal of any right or interest in a family home—

(i)in a case where the family home is occupied by the debtor’s spouse or former spouse, the consent of the spouse, or, as the case may be, the former spouse, whether or not the family home is also occupied by the debtor;

(ii)where sub-paragraph (i) above does not apply, in a case where the family home is occupied by the debtor with a child of the family, the consent of the debtor; and

(d)“relevant date” means the day immediately preceding the date of sequestration.

41 Protection of rights of spouse against arrangements intended to defeat them.S

(1)If a debtor’s sequestrated estate includes a matrimonial home of which the debtor, immediately before the date of issue of the act and warrant of the permanent trustee (or, if more than one such act and warrant is issued in the sequestration, of the first such issue) was an entitled spouse and the other spouse is a non-entitled spouse—

(a)the permanent trustee shall, where he—

(i)is aware that the entitled spouse is married to the non-entitled spouse; and

(ii)knows where the non-entitled spouse is residing,

inform the non-entitled spouse, within the period of 14 days beginning with that date, of the fact that sequestration of the entitled spouse’s estate has been awarded, of the right of petition which exists under section 16 of this Act and of the effect of paragraph (b) below; and

(b)the Court of Session, on the petition under section 16 of this Act of the non-entitled spouse presented either within the period of 40 days beginning with that date or within the period of 10 weeks beginning with the date of sequestration may—

(i)under section 17 of this Act recall the sequestration; or

(ii)make such order as it thinks appropriate to protect the occupancy rights of the non-entitled spouse;

if it is satisfied that the purpose of the petition for sequestration was wholly or mainly to defeat the occupancy rights of the non-entitled spouse.

(2)In subsection (1) above—

• “entitled spouse” and “non-entitled spouse” have the same meanings as in section 6 of the M1Matrimonial Homes (Family Protection) (Scotland) Act 1981;

• “matrimonial home” has the meaning assigned by section 22 of that Act as amended by the M2Law Reform (Miscellaneous Provisions) (Scotland) Act 1985; and

• “occupancy rights” has the meaning assigned by section 1(4) of the said Act of 1981.

42 Contractual powers of permanent trustee. S

(1)Subject to subsections (2) and (3) below, the permanent trustee may adopt any contract entered into by the debtor before the date of sequestration where he considers that its adoption would be beneficial to the administration of the debtor’s estate, except where the adoption is precluded by the express or implied terms of the contract, or may refuse to adopt any such contract.

(2)The permanent trustee shall, within 28 days from the receipt by him of a request in writing from any party to a contract entered into by the debtor or within such longer period of that receipt as the court on application by the permanent trustee may allow, adopt or refuse to adopt the contract.

(3)If the permanent trustee does not reply in writing to the request under subsection (2) above within the said period of 28 days or longer period, as the case may be, he shall be deemed to have refused to adopt the contract.

(4)The permanent trustee may enter into any contract where he considers that this would be beneficial for the administration of the debtor’s estate.

43 Money received by permanent trustee.S

(1)Subject to subsection (2) below, all money received by the permanent trustee in the exercise of his functions shall be deposited by him in the name of the debtor’s estate in an appropriate bank or institution.

(2)The permanent trustee may at any time retain in his hands a sum not exceeding £200 or such other sum as may be prescribed.