Liabilities (War-Time Adjustment) (Scotland) Act 1945
| Jurisdiction | UK Non-devolved |
| Citation | 1945 c. 29 |
| Year | 1945 |
Liabilities (War-Time Adjustment) (Scotland) Act, 1945.
(8 & 9 Geo. 6.) CHAPTER 29.
An Act to provide for the arrangement or the adjustment and settlement of the affairs of persons in Scotland financially affected by war circumstances.
[15th June 1945]
Be it enacted by the King's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
1 Application for adjustment of debtor's affairs.
(1) An application may be made to the court for the adjustment and settlement under this Act of the affairs of any person on the ground that, owing to war circumstances—
(a ) he is unable to pay his debts or will be unable, after payment of his debts (if any), to meet as they fall due any future liabilities in respect of obligations already incurred; or
(b ) he is in such a position that if he were required to pay his debts and to meet, as they fall due, any such future liabilities as aforesaid, he would not have sufficient resources to enable him to preserve or recover his business or former means of livelihood or otherwise to make reasonable pro vision for the future maintenance of himself and his family.
(2) An application under this section may be made—
(a ) by the debtor; or
(b ) in a case where the debtor has been granted and is still enjoying relief under section one of the Courts (Emergency Powers) (Scotland) Act, 1939 , as amended by section one of the Courts (Emergency Powers) (Scotland) Act, 1944 , by the debtor or by any creditor who has a debt which would be a provable debt.
(3) An application under this section by the debtor shall include a statement of the grounds on which he claims to be entitled to the benefit of this Act, and shall be accompanied by a state of his affairs, specifying his whole property wherever situated, the property in expectancy or to which he may have an eventual right, the names and designations of his creditors and debtors and the debts due by or to him, and a rental of his heritable property.
2 Proceedings in applications for adjustment.
(1) On any application to the court under this Act, the court may remit to a person (hereinafter referred to as a trustee) selected by the court from the panel appointed for the purpose by the Secretary of State for a report—
(a ) whether the debtor is a person to whom, owing to war circumstances, paragraph (a ) or paragraph (b ) of subsection (1) of section one of this Act applies; and
(b ) whether and in what manner having regard to the circumstances of the debtor generally and in particular to the existence of any debts precluding him from continuing, commencing or re-commencing business, the case ought to be dealt with under this Act.
(2) On a remit under the last foregoing subsection—
(a ) the trustee, if he is of opinion that the debtor is not such a person as is mentioned in paragraph (a ) of the last foregoing subsection or that the case ought not to be dealt with under this Act, shall report to that effect to the court;
(b ) the trustee, if he is of opinion that the debtor is such a person as aforesaid land that the case ought to be dealt with under this Act,
(i) shall, in the first place, try to secure, by negotiation with the debtor and the creditors, the assent of all the parties to an arrangement for the settlement of the debtor's affairs, and if such assent is obtained, shall report the arrangement to the court;
(ii) shall, if no such assent is obtained, prepare a scheme (hereinafter referred to as an adjustment scheme) for the adjustment and settlement of the debtor's affairs under this Act and report the same to the court.
(3) Where the trustee reports an arrangement to the court under sub-paragraph (i) of paragraph (b ) of the last foregoing subsection, the court, if satisfied that the debtor is such a person as is mentioned in paragraph (a ) of subsection (1) of this section, that the case ought to be dealt with under this Act, and that the assent of all the parties has been obtained to the arrangement, may, after giving any person appearing to the court to be interested an opportunity of being heard, approve the arrangement, and thereupon it shall be binding on the debtor and on all the creditors whose assent has been so obtained.
(4) Where the trustee reports to the court to the effect mentioned in paragraph (a ) or sub-paragraph (ii) of paragraph (b ) of subsection (2) of this section, the court shall take such report into consideration, together with any adjustment scheme submitted with such report, and may, after giving any person appearing to it to be interested an opportunity of being heard, make such of the following orders as it shall think appropriate in the circumstances—
(a ) an order approving with or without modifications the adjustment scheme submitted by the trustee;
(b ) an order disapproving the adjustment scheme submitted by the trustee and remitting to the same or another trustee to prepare a new adjustment scheme;
(c ) an order dismissing the application;
(d ) an order remitting to the same or another trustee to prepare an adjustment scheme.
(5) Where the court approves an adjustment scheme, the scheme shall be binding on the debtor and on all the creditors to whom the proceedings were intimated and where the debtor has paid in full or to the extent specified in the scheme the debts of such creditors and the expenses of the proceedings (so far as payable by him) and has fulfilled any other obligation imposed on him by the scheme, the court may, on his application, make an order discharging him and such order shall operate as a complete discharge of all such debts.
3 Provisions of schemes.
(1) An adjustment scheme may, for the purpose of the payment in accordance with the scheme, of the debts proved in the proceedings, provide for the realisation in whole or in part of the debtor's property existing at the commencement of the proceedings, or becoming available at any time before his discharge, and for the distribution of the proceeds thereof and of any other sums available for distribution, including such sums as the debtor may be required to pay out of his future income, and may provide that such distribution shall be subject to the supervision of the court.
(2) Without prejudice to the generality of the last foregoing subsection, an adjustment scheme may contain provision for all or any of the following matters—
(a ) for securing the maintenance of the debtor and his family;
(b ) for excepting from the property to be realised any premises which are used, or would, but for war circumstances be used, as the home of the debtor, and any of the contents thereof;
(c ) for the composition of debts, the granting of security over any property of the debtor in favour of the creditors, and the management or disposal of the debtor's business:
(d ) in a case where the debtor carries on business or intends, when circumstances permit, to resume the carrying on of a business suspended owing to war circumstances—
(i) for excepting from the property to be realised, the business, any premises used for the business, and other property required for the purposes of the business;
(ii) for the carrying on of the business under the supervision of the trustee;
(e ) for postponing the payment of the debts or any of them for such period as the court thinks fit;
(f ) for postponing the realisation for such period as the court thinks fit of property which it would be unreasonable to realise immediately owing to its temporary depreciation in value or for any other sufficient cause;
(g ) for the modification to termination subject to such conditions, including the payment of damages, as the court thinks fit, of any contract to which the debtor is a party
(h ) for the reduction of any rent, due or to become due by the debtor, so, however, that such rent in respect of any period shall not be reduced below the lettable value for that period of the subjects for which such rent is payable.
(3) Where in pursuance of the last foregoing subsection an adjustment scheme modifies or terminates any contract, the liability of any other person under or in relation to that contract whether as a person jointly bound with the debtor or as a cautioner may be modified or terminated, and save as aforesaid the approval of an adjustment scheme shall not affect the liabilities of any person who is cautioner for, or is jointly bound with, the debtor nor shall a discharge under such scheme release any such person from those liabilities.
(4) Where the debtor is in possession of any goods let under a hire purchase agreement and any part of the price remains unpaid, provision may be made in an adjustment scheme for the vesting of the goods in the debtor either immediately or after the payment of such further instalments as may be specified in the scheme, and where such provision is made, the owner shall be entitled to prove for the balance of the price less any sums required to be paid as aforesaid, but shall not have any other remedy against the debtor or the goods:
Provided no such provision shall be so included unless the sums paid by the debtor in respect of the price amount at least to the value of the goods at the date of the adjustment scheme.
4 Provisions as to ranking and secured debts.
(1) For the purpose of the distribution in pursuance of an adjustment scheme of any sums available for the satisfaction of the proved debts of the debtor, all those debts shall rank equally among themselves.
(2) A creditor holding a security for his debt over any part of the debtor's property—
(a ) may, save as otherwise provided in the scheme,...
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