Notes for Guidance - Bankruptcy (Scotland) Act 2016 (as amended)

A sheriff may make an order under section to 211 of the Act to waive a failure to comply with a requirement of the Act or Regulations only when the failure relates to:

• a document to be lodged with the sheriff
• a document issued by the sheriff
• a time limit specified in relation to proceedings before the sheriff or a document related to those proceedings

The Accountant may make an order under section 212 of the Act to waive a failure to:

• correct a clerical or incidental error in a document required by or under the Act
• waive a failure to comply with a time limit
• which is specified by or under the Act
• for which no provision is made by or under the Act

18.3.1 Application to court

An application to court must be made on a Form 7.1A of the Act of Sederunt (Sheriff Court Bankruptcy Rules) 2016.

Any further information regarding the process should be requested from the relevant sheriff court.

A copy of the application and any interlocutor issued by the court should be uploaded to BASYS to be included in the electronic Sederunt Book. 

18.3.2 Application to the Accountant

This role is undertaken by the Bankruptcy Applications and Decisions (BAD) team on behalf of the Accountant.

An application can be made by any person having an interest in the bankruptcy.

Applications to cure a defect in procedure can be made to correct a:

• failure to submit a request for an extension to an accounting period under section 130(3) of the Act prior to the end of the accounting period
• failure to submit accounts under section 63(3) of the Act, within three months by the original trustee upon election of a replacement trustee
• failure to submit a proposal under section 90(2) of the Acts, within 12 weeks from date of award for AiB to fix a Debtor Contribution Order
• failure to submit accounts under section 132(1) of the Acts within two weeks of the end of the accounting period
• failure to submit a deferral of discharge under section 141(3) of the Acts later than 10 months after the date of award
• failure to submit the required Statement of a Debtor’s Affairs following a recall application to the Accountant within the prescribed 21 days, under Section 32(3)(b) of the Act
• failure to apply to AiB to be appointed trustee within 14 days of a creditors meeting, under section 69(6)(a);
• a typographical error in a statutory document submitted to the Accountant or the debtor

This list is not exhaustive.

18.3.3 Application process to the Accountant

An application can be created on BASYS or made by using a Form 1 of the Applications and Decisions Regulations. 

When a trustee wishes to claim the application costs as an expense of the bankruptcy they must request this in the application and provide:

• an explanation why they believe it is appropriate for the costs to be paid as an expense

• if the application is required due to non-cooperation by the debtor information about the actions taken to try and obtain the debtor’s cooperation

When the application is submitted it should be intimated to the debtor and all known creditors advising of their right to make representations to the BAD team within 14 days of the notification on a Form 1 of the Applications and Decisions Regulations.

18.3.4 Actions of the BAD team

The BAD team will consider:

• the application
• were the interested parties notified at the required time
• when further information was required was it received within the set timescales and sufficient to proceed
• has the applicant requested the cost of the application be an expense of the estate
• when the above request has been made is it appropriate to allow the costs
• has the applicant provided a reasonable explanation for not meeting the requirement of the Act
• any representations received within the correct timescale 

18.3.5 Actions of the Accountant

The Accountant will make a decision to:

• grant the order
• grant the order with any necessary amendments
• refuse the order
• grant expenses, if requested and appropriate
• refuse expenses , if requested and not appropriate

The BAD team will issue the notice to:

• the applicant
• the trustee (if not the applicant)
• the debtor (if not the applicant)
• all known creditors (if not the applicant)
• if appropriate, The Keeper of the Register of Inhibitions and Adjudications

They will:

• issue an invoice to the applicant. The fee to be applied can be found in The Fees Order
• place a copy in the electronic Sederunt Book

When expenses are not requested, the notice will state they cannot be claimed as an expense of the estate. The decision to refuse expenses cannot be reviewed or appealed.

18.3.6 Power to cure defect under section 212 – review and appeal

A review application can be made by any interested person to the Accountant’s independent review team following a decision made by the Accountant to grant, or refuse to grant, a recall of bankruptcy.

An application must be received before the expiry of 14 days from the date the decision was made by the Accountant.

A copy of the review application will be sent to any person having an interest. They will be advised they may make submissions before the expiry of 21 days from the date the review application was received.

The team must take into consideration any submissions made by the applicant, or interested parties, before the expiry of 21 days from the date the application.

The outcome of the review to confirm, revoke or amend the decision must be made before the expiry of 28 days from the date the application for review was made.

Any person entitled to request a review may appeal the review decision to the sheriff before the expiry of 14 days from the date the review decision, was made. The sheriff’s decision is final.