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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Sutherland v. Advocate General For Scotland [2006] ScotCS CSOH_10 (27 January 2006)
URL: http://www.bailii.org/scot/cases/ScotCS/2006/CSOH_10.html
Cite as: [2006] CSOH 10, [2006] ScotCS CSOH_10

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OUTER HOUSE, COURT OF SESSION

 

[2006] CSOH 10

 

 

 

 

 

 

 

 

 

 

 

 

OPINION OF LORD MENZIES

 

in the Petition of

 

CHARLOTTE LISTON SUTHERLAND

 

Petitioner;

 

against

 

THE ADVOCATE GENERAL FOR SCOTLAND FOR AND ON BEHALF OF THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS

 

Respondent:

 

 

ннннннннннннннннн________________

 

 

 

Petitioner: Party

Respondent: Paterson; HM Milne, Solicitor (Scotland) HM Revenue & Customs

 

 

27 January 2006

 

[1] This is a petition for recall of sequestration in terms of sections 15, 16 and 17 of the Bankruptcy (Scotland) Act 1985. It is agreed between the parties that the petitioner was sequestrated by this Court following upon a petition at the instance of the respondent for and on behalf of the Commissioners for Her Majesty's Revenue and Customs, which was presented on 17 May 2005. The basis on which the respondent sought sequestration of the petitioner was a decree of this Court extracted on 22 March 2005 decerning against the petitioner for payment of taxed expenses amounting to г11,468.43 in a petition at the instance of the present petitioner. In that petition the petitioner sought suspension of a decree of sequestration awarded against her on 9 March 1989 in a petition at the instance of the Lord Advocate for and on behalf of the Commissioners for Inland Revenue. The petition at the instance of the present petitioner also sought interdict against the respondent from taking any further steps or proceedings in that sequestration until the conclusion of an action for reduction at the instance of the present petitioner, and further sought damages of г48,166,364.00. The action of reduction at the instance of the present petitioner was unsuccessful. The Lord Ordinary found against the present petitioner in that action by interlocutor dated 14 November 1997; the petitioner reclaimed against this interlocutor, and her reclaiming motion was refused on 14 October 1998. The petition for suspension and interdict was also unsuccessful; the Lord Ordinary found against the present petitioner by interlocutor dated 5 June 2003; the petitioner reclaimed against this interlocutor, and her reclaiming motion was refused on 17 December 2003. The petition for suspension and interdict appears to have been lodged in the summer of 1991, and so predated the Scotland Act 1998 by several years. It was served upon the Lord Advocate for and on behalf of the Commissioners for Inland Revenue. The Lord Advocate lodged answers. Following upon the Scotland Act 1998, adjustments to those answers were made on behalf of the Advocate General as representing the Commissioners of Inland Revenue, but the petitioner did not seek to amend her petition. Following on the refusal of her reclaiming motion the decree for expenses referred to above repeated the names and designations of the parties named in the petition.

[2] In the present petition as originally presented, all that the petitioner sought was recall of the sequestration dated 19 May 2005. The averments on which the petitioner relied at that time fall under two heads of argument. The first is that the Advocate General for Scotland for and on behalf of the Commissioners for Her Majesty's Revenue and Customs is not a "qualified creditor" for the purposes of section 5(1)(b) of the Bankruptcy (Scotland) Act 1985 because the charge was not at the instance of the Advocate General for Scotland for and on behalf of the Commissioners for Her Majesty's Revenue and Customs. Nothing in the oath, the extract decree or the execution of charge disclosed any debt owed by the present petitioner to the present respondent. Second, the petitioner argued that the only reason for her raising the petition for suspension and interdict was that the Accountant in Bankruptcy had failed to perform his statutory duty by bringing the pursuer's sequestration to an end and by continuing to act as interim trustee, and that any liability to pay expenses in the proceedings for suspension and interdict was truly a liability of the Accountant in Bankruptcy.

[3] Following on the lodging of answers to the present petition by the respondent, the petitioner availed herself of the opportunity to adjust the petition. By adjustments dated November 2005 the petitioner sought to increase radically the extent of the remedies claimed in the petition, and changed the basis of the petition. In addition to the averments referred to above (which were substantially expanded) the petitioner added lengthy averments in support of several further arguments. She averred that the Lord Ordinary erred in law on 30 June 2005 in awarding sequestration and sought recall of the interlocutors of the Lord Ordinary dated 19 May and 30 June 2005. She sought recall of the sequestration granted on 31 January 1989. She sought damages against the Advocate General for Scotland in the sum of г48,166,364.00; and she added allegations that all decrees in absence, extracts, warrants, certificates and charges against her were incompetent, null and void and that both sequestrations were wrongful, fraudulent and malicious. She relied on the Scotland Act 1998, the European Convention for the Protection of Fundamental Rights and Freedoms and the Human Rights Act 1998.

[4] Before considering the merits of the arguments advanced in the petition as originally presented, it is appropriate to deal with the averments added by adjustment. I have reached the view that it is not open to the petitioner (at least within the confines of a petition for recall of sequestration under the Bankruptcy (Scotland) Act 1985) to seek the additional remedies which she now seeks. I have reached this view having regard to the following factors:-

(1) Having regard to the provisions of sections 16(4) and 17(1) of the 1985 Act, the petitioner's attempt to recall the sequestration awarded in January 1989 is well out of time, and her averments in support of this are irrelevant. Section 16(4) of the 1985 Act provides that

"... a petition under this section may be presented -

(a) within 10 weeks after the date of sequestration; but

(b) at any time if the petition is presented on any of the grounds mentioned in paragraphs (a) to (c) of section 17(1) of this Act".

Section 17(1) provides inter alia that:

"The Court of Session may recall an award of sequestration if it is satisfied that in all the circumstances of the case (including those arising after the date of the award of sequestration) it is appropriate to do so and, without prejudice to the foregoing generality, may recall the award if it is satisfied that -

(a) the debtor has paid his debts in full or has given sufficient security for their payment ...".

(Paragraphs (b) and (c) are not relevant to the present case). The Court therefore has a general discretion to recall an award of sequestration, and this may be done if the Court is satisfied in all the circumstances of the case that it is appropriate to do so if the petition is presented within 10 weeks after the date of sequestration. If the petition is presented more than 10 weeks after the date of sequestration, the petitioner must bring herself within one of the grounds mentioned in paragraphs (a) to (c) of section 17(1). The present petition was presented within 10 weeks after the date of the 2005 sequestration, but more than 161/2 years after the date of the January 1989 sequestration. The petitioner makes no attempt to aver herself within any of the grounds mentioned in paragraphs (a) to (c) of section 17(1) of the Act; in particular, there is no suggestion that she has paid her debts in full or that she has given sufficient security for their payment. In these circumstances the averments in relation to the 1989 sequestration are irrelevant, and the petition insofar as directed against that sequestration is incompetent - Martin v Martin's Trustee 1994 S.L.T.261. (The petitioner was clearly aware of this problem some years ago, because she averred in her petition for suspension and interdict that the reason for her making that application was because "the time in which the petitioner could competently recall the sequestration has expired").

(2) The petitioner's averments and arguments with regard to the 1989 sequestration, and her attempt to claim damages following upon this, are res judicata. The averments which the petitioner has added by way of adjustment in these proceedings are virtually identical to averments on her behalf in several previous proceedings. She has already challenged the 1989 sequestration on the basis that it was wrongful and fraudulently obtained, and her challenges have been rejected in the civil courts on at least four occasions, including two occasions by the Inner House. Her action of reduction was rejected by Lord Bonomy on 14 November 1997 and her subsequent reclaiming motion was refused on 14 October 1998. Her petition for suspension and interdict was rejected by Lord Mackay of Drumadoon on 5 June 2003 and her reclaiming motion was refused on 17 December 2003. All the material which the petitioner seeks to place before the Court now was before the Court on those occasions, and the sum of damages which she seeks to recover in these proceedings is identical. Indeed, her pleadings in the present petition incorporate the previous pleadings in the petition for suspension and interdict and the action of reduction brevitatis causa. The complaints which she makes regarding errors in procedure, false information given to the Court and the prejudice which she has sustained are identical to the complaints which she made in both previous procedures. There does not appear to be any new matter raised with regard to the 1989 sequestration in the present proceedings which was not raised and determined against the petitioner in previous proceedings. I am satisfied that the respondent's plea of res judicata is well founded with regard to the petitioner's challenge to the 1989 sequestration.

(3) I should add, by way of elaboration on the last point, that if I am wrong on the question of res judicata, I should not have been prepared to have regard to the petitioner's averments in relation to the 1989 sequestration, because in light of the previous history of court procedures in relation to the 1989 sequestration, the petitioner's attempt to reopen and reargue these matters appears to me to be the sort of abuse of process which it is within the power of this Court to prevent - see Clarke v Fennoscandia Ltd (No.3) 2005 S.L.T.511. Because of the other factors to which I refer, I do not consider that it is necessary to rely on the Court's power in this regard in the present case.

(4) I do not consider that it is open to a petitioner seeking recall of sequestration in terms of sections 16 and 17 of the Bankruptcy (Scotland) Act 1985 to seek damages. There is nothing in the 1985 Act which gives the Court power to award damages in this procedure, nor is there anything in the Rules of the Court of Session which would justify this. The petitioner in her submissions sought to rely on sections 7 and 8 of the Human Rights Act 1998 for support for the proposition that a claim in terms of that Act (including a claim for damages) may be brought in any legal proceedings. However, it should be noted that section 7(1) of the 1998 Act provides that

"a person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1) may -

(a) bring proceedings against the authority under this Act in the appropriate Court or Tribunal ....".

and subsection (2) provides that:

"in subsection (1)(a) 'appropriate Court or Tribunal' means such Court or Tribunal as may be determined in accordance with Rules ....".

There is nothing in the Rules of the Court of Session, nor in the Bankruptcy (Scotland) Act 1985, which gives this Court power to award damages in a petition for recall of sequestration. Under our procedures, damages are normally obtained by means of ordinary action, and there is a clear distinction between the procedures applicable to a summons and those applicable to a petition (Tomkins v Cohen 1951 S.C.22). The Court is expressly empowered to award damages in petitions for judicial review. There is no such power conferred in the present procedure. Section 8(2) of the Human Rights Act 1998 provides that:

"Damages may be awarded only by a Court which has power to award damages, or to order the payment of compensation, in civil proceedings".

I do not consider that it is competent for this Court to make any award of damages in this process.

[5] In any event, even if it were competent to do so, the Court could only award damages on the basis of relevant averments. The petitioner's averments in support of her claim for damages are wholly irrelevant in law. They are no more relevant than they were when they came before Lord Mackay of Drumadoon in the proceedings for suspension and interdict; on 5 June 2003 he rejected these averments as irrelevant. They remain irrelevant.

[6] For the above reasons no remedy can be given to the petitioner in these proceedings in relation to her various claims relating to the 1989 sequestration. I now turn to consider her claim in relation to the 2005 sequestration.

[7] This claim was brought within 10 weeks after the date of sequestration, and it is therefore within the discretion of the Court to recall the 2005 award of sequestration if satisfied that in all the circumstances of the case (including those arising after the date of the award of sequestration) it is appropriate to do so. I do not consider that there is any substance to the petitioner's arguments against the 2005 sequestration. That sequestration proceeded on the basis of a decree for expenses pronounced against the petitioner in the proceedings for suspension and interdict. How those expenses were incurred is not relevant at this stage - any questions which may arise between the petitioner and the Accountant in Bankruptcy are neither here nor there for the purposes of the sequestration process.

[8] The petitioner's point is a short one - the decree is in favour of the Lord Advocate, not the Advocate General. Moreover, the Lord Advocate's interest was in representing the Commissioners for Inland Revenue, not the Commissioners for Her Majesty's Revenue and Customs. I do not consider that there is any substance to this argument. It is clear that the interest which was being represented originally by the Lord Advocate was the interest of the Commissioners for Inland Revenue. As the petitioner herself avers,

"On 20 May 1999, by virtue of section 6 of the Scotland Act 1998 (General Transitory, Transitional and Savings Provisions) Order 1999 the interest of the Lord Advocate in civil proceedings transferred to and became exercisable by the Advocate General. By virtue of section 48(1) of the Commissioners for Revenue and Customs Act 2005, which came into force on 7 April 2005, the Commissioners for Inland Revenue are now the Commissioners for Revenue and Customs and the property, rights and liabilities of any of the old Commissioners now vest in the new Commissioners".

[9] It is clear, and does not appear to be disputed by the petitioner, that the Court found her liable in the expenses of her unsuccessful petition for suspension and interdict. Although that liability was to make payment to the Commissioners for Inland Revenue, I see no force in the argument that the Commissioners for Revenue and Customs, in whom the property, rights and liabilities of the Commissioners for Inland Revenue have vested, cannot enforce that liability, nor is there any force in the argument that just because the interests of the Commissioners are now represented by the Advocate General instead of the Lord Advocate that those interests cannot be enforced against the petitioner. I am not satisfied that there is any defect in the procedures which have been followed.

[10] In all the circumstances, in the exercise of the wide discretion conferred on me, I do not consider that it is appropriate to recall the award of sequestration made in 2005. I shall sustain the pleas-in-law for the respondent and refuse the prayer of the petition.


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URL: http://www.bailii.org/scot/cases/ScotCS/2006/CSOH_10.html