Appendix 5
S.I. 2018/1082
Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018
1.In its letter to the Department of 31 October 2018, the Committee requested a memorandum on the following points:
1. Whether Rule 2.7(3)(d) is intended to cover the grant of any trust deed or is limited to a trust deed for the benefit of creditors (compare rule 3.79(b) and Rule 3.84(5)(g)); and
2.The reference in rule 2.7(3) is intended to be limited to the grant of a trust deed for the benefit of creditors. The purpose of rule 2.7(3) is to enable the nominee, in preparing his or her report to the court, to require the proposer to provide information as to whether any current or former officer or director of the company which is the subject of the proposed CVA has previously been involved with a company which has been the subject of insolvency proceedings, or whether that director or officer has been the subject of personal insolvency proceedings. Items (a), (b), (c) and (e) in the list at rule 2.7(3) each refer to either corporate insolvency or individual insolvency processes. In the context of this list, we consider the reference at (d) to “granted a trust deed” will be well understood in Scotland as meaning the grant of a trust deed for the benefit of creditors, and that the provision will accordingly operate as intended in practice. An appropriate amendment will however be made to the rule at the next available opportunity in order to remove any doubt.
2. Whether, under Rule 3.67(2)(d), a single executor if there is more than one, can lodge the notice, and if so, whether the first “the” should be replaced with “an”.
3.The policy intention is that if there is more than one executor, any one of them can lodge the notice. While it is acknowledged that it would have been preferable to use the indefinite rather than the definite article to deliver that policy intention, we do not consider the meaning of the provision to be significantly impeded by use of the word “the”. The singular reference to “the executor” includes the plural “the executors”, implying that more than one executor may lodge the notice. On this basis, the drafting of the provision is considered to be sufficiently clear. An appropriate amendment will however be made to the rule at the next available opportunity in order to remove any doubt.
Department of Business, Energy Industrial Strategy
5 November 2018
Published: 23 November 2018