In The Petition Of David William Menzies+keith Veitch Anderson
| Jurisdiction | Scotland |
| Judge | Sheriff W. Holligan |
| Court | Sheriff Court |
| Date | 14 January 2011 |
| Docket Number | B2470/10 |
| Published date | 21 January 2011 |
Case Ref: B2470/10
SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH
JUDGEMENT
of
SHERIFF WILLIAM HOLLIGAN
In the Petition
of
(FIRST) DAVID MALCOLM MENZIES, Chartered Accountant formerly having a place of business at 1st Floor Quay 2 139 Fountainbridge, Edinburgh, EH3 9QG and now having a place of business at Atholl Exchange, 6 Canning Street, Edinburgh, EH3 8EG; and (SECOND) KEITH VEITCH ANDERSON, Chartered Accountant, 1st Floor Quay 2 139 Fountainbridge, Edinburgh, EH3 9QG
PETITIONERS
_____________
Act: Tods Murray
EDINBURGH, 14th January 2011
[1] The petitioners are chartered accountants and licensed insolvency practitioners. They were appointed as joint insolvency office holders in a number of insolvencies including court appointments as joint liquidators of the ten companies which are the subject of the present petition. Of those ten liquidations, five were raised in Edinburgh sheriff court, one in Duns sheriff court, one in Haddington sheriff court, one in Jedburgh sheriff court and the remaining two in Selkirk sheriff court ("the schedule companies").
[2] The petitioners are designed as being employees of the firm of Baker Tilley Restructuring and Recovery LLP ("BT"). The first petitioner, Mr Menzies, left the employment of BT in or about 28 February 2010 and has taken up employment with another firm of chartered accountants. It is averred that the first petitioner will have no access to the files and papers relative to the schedule companies following his departure from BT. The petition sought the removal of the first petitioner as joint liquidator of the schedule companies and the appointment of Mark Nicholas Ranson as joint liquidator in his place.
[3] As there was some need for expedition, after advertisement, I granted the petition, albeit in slightly different terms from that craved, and stated I would give my reasons in writing therefor at a later date. There are two issues in this petition: (1) the procedure for the removal and appointment of a liquidator in circumstances such as this; (2) the application of the procedure to the sheriff court.
[4] In relation to the first issue, Mr Dobie relied upon the case of Geddes Petitioner 2006 SLT 664. As I respectfully adopt the reasoning and conclusions in that case I can be brief. In short, in terms of section 172(6) of the Insolvency Act 1986 ("the 1986 Act") a liquidator may resign in certain prescribed circumstances, the circumstances being set out in Rule 4.28 of the Insolvency (Scotland) Rules 1986 ("the 1986 Rules"). Rules 4.28 and 4.29 of the 1986 Rules set out the procedure for a liquidator to resign. They require the liquidator to convene a meeting of creditors for each liquidation for that purpose. If no creditor attends the meeting, a meeting is deemed to have been held and it is further deemed that the liquidator is entitled to resign and to have his release. The procedure is expensive. Experience has shown that where a liquidation has been under way for some time and there is little prospect of a dividend to creditors, creditors often take little or no interest in the administration of the liquidation. A practice has developed in England to allow for a "shortcut" procedure in which a single application is made to the High Court to allow a liquidator to resign from office in relation to a number of appointments which he holds and for the appointment of another person to act as liquidator in his place. The procedure is set out in the case of Re Equity Nominees Limited [2000] BCC 84. In the case of Geddes, Lord Drummond Young held that such a procedure was competent in Scotland. His Lordship held that, in Scotland, the court has a statutory power to remove a liquidator under section 172(2) of the 1986 Act and the power at common law to appoint a replacement liquidator.
[5] I was informed that the first petitioner had submitted a petition to the Court of Session in relation to various appointments he held as liquidator. The schedule companies either were, or were to be, included in that petition. Given that the schedule companies involved sheriff court processes, ultimately no order in relation thereto was pronounced by the Court of Session. Hence the current petition.
[6] That leads me to the second issue which this petition raises. As I have said, I respectfully adopt the reasoning and conclusion of Lord Drummond Young which I considered allowed me to deal with that part of the petition which related to liquidations in dependence in Edinburgh sheriff court. It is in relation to the liquidations in dependence in other courts within the sheriffdom that I had greater concern.
[7] In support of this part of a very helpful submission, Mr Dobie referred to the following authorities Tait v Johnston (1891) 18R 606; McCormick v Campbell 1926 42 Sh Ct Rep 124; Southside Sawmills Limited v Buchanan 1963 SLT (Sh Ct) 19; Simpson v Bruce 1984 SLT (Sh Ct) 38; Spence v Davie 1993 SLT 217; McPhail, Sheriff Court Practice (3rd edition) paragraphs 2.03 and 6.02; section 7 Sheriff Courts (Scotland) Act 1971 ("...
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