Where any part of the property is held subject to onerous obligations, such as the payment of rent, &c., the trustee may disclaim the same, subject in certain cases to the leave of the court, and the disclaimer operates to determine all interest in or liability in respect of the property on the part of the estate. The trustee is required to keep a record book (which is commenced by the official receiver), containing minutes of the proceedings in the bankruptcy, and a cash book in the prescribed form, in which all receipts and payments by him must be entered. All monies received must forthwith be paid into an account at the Bank of England, entitled the "Bankruptcy Estates Account," which is under the control of the Board of Trade, unless where in special circumstances the sanction of that department is obtained to the opening of a local banking account, but in no circumstances must estate monies be paid to the trustee's private account. When monies are required for the purpose of the estate, special cheques or money orders are issued by the Board of Trade on the application of the trustee.
Control over Trustee.—In his administration of the estate the trustee is subject to control by the committee of inspection, the creditors, the court and the Board of Trade. The committee is appointed by the creditors, and must consist of not more than five nor less than three creditors or authorized representatives of creditors. It acts by a majority present at a meeting, and should be convened once a month unless it otherwise directs. If no committee is appointed, the Board of Trade may give any direction or permission which might have been given by a committee. Directions given by the committee, if not inconsistent with the provisions of the act, are binding on the trustee, unless contrary to or overruled by those of the creditors or of the court. The official receiver or trustee may summon a meeting of the creditors at any time to ascertain their wishes, and must do so when so required by one-sixth in value of the creditors or when directed by the court. The Board of Trade may also direct the official receiver to summon a meeting for the purpose of reviewing any act done by the trustee or any resolution of the committee of inspection. Further, the trustee may apply to the court for directions in any particular matter, and the court may also, on the application of any person aggrieved reverse or modify any act of the trustee, or make such order as it deems just. The directions of the court override those of the creditors. The Board of Trade is required to take general cognizance of the conduct of trustees, to inquire into any complaints by creditors, and in the event of any trustee not faithfully performing his duties, to take such action, including the power of removal, as may be expedient. It may also direct a local investigation of the trustee's books and accounts, and may require him to answer any inquiries, or may apply to the court to examine him on oath. If any loss has arisen to the estate from any misfeasance, neglect or omission of the trustee, it may require him to make it good. The orders of the Board of Trade under the powers conferred by the act may be enforced by the court by committal of the trustee or otherwise.
Audit of Accounts.—The trustee's accounts must be audited by the committee of inspection not less than once in every three months; and once in every six months, as well as at the close of the administration, the record and cash books must also be submitted with the vouchers, and the committee's certificate of audit to the Board of Trade for final audit. If it appears that the trustee has retained more than £50 in hand for more than ten days without a satisfactory explanation, he may be removed from office, surcharged with interest at the rate of 20% per annum and lose all claim to remuneration.
Remuneration.—The trustee's remuneration is fixed by the creditors or by the committee if so authorized by them. It must be in the nature of a percentage on the amount of the realization and on the dividends. If one-fourth of the creditors in number or value dissent from the resolution, or if the bankrupt satisfies the Board of Trade that the remuneration is excessive, the Board may review the same and fix the remuneration. A trustee may not receive any remuneration for services rendered in any other capacity, e.g. as solicitor, auctioneer, &c., beyond that voted to him as trustee; nor may he share his remuneration with the bankrupt, the solicitor or other person employed about the bankruptcy; or receive from any person any gift, or other pecuniary or personal benefit in connexion therewith.
Costs.—A trustee receiving remuneration is not allowed the costs of any other person in respect of duties which ought to be performed by himself. All bills of solicitors and other agents employed must be taxed before payment, as being in accordance with the prescribed scales of costs; and the taxing master must satisfy himself that the employment has been properly authorized before the work was done. All bills of costs must be delivered to the trustee within seven days of the request for the same, otherwise the estate may be distributed without regard to such costs.
Release.—When the property, so far as it is capable of realization, has been realized and distributed, the trustee must apply to the Board of Trade for his release, forwarding to each creditor a notice of his having done so, together with a copy of his final accounts, and the Board of Trade, after preparing and considering a report on the same, and the objections of any person interested, may, subject to appeal to the High Court, grant or withhold the release. If a release is withheld, the court may, on the application of any person interested, make such order against the trustee as it thinks just. The release when granted operates as a removal from office, and thereupon the official receiver again becomes trustee, and is thus in a position, even after the nominal close of the bankruptcy, to deal with any circumstances which may arise, or which have not been foreseen and provided for.
Small Bankruptcies.
When the official receiver reports, or the court is otherwise satisfied that the debtor's property is not likely to realize more than £300, the court may make an order for the summary administration of the estate, in which case, if the debtor is adjudged bankrupt, the official receiver in the ordinary course becomes and remains trustee, and certain other modifications are effected with the view of simplifying
and accelerating the procedure. The chief of these modifications are as follows, viz. the Board of Trade acts as committee of inspection; there is no advertisement of the proceedings in a local paper; in legal proceedings all questions of law and fact are determined by the court without a jury; adjudication may be made on a report by the official receiver before the first meeting of creditors where no composition or scheme is proposed; meetings of creditors may be held in the town where the court sits or the official receiver's office is situated; notice to creditors of meetings other than the first meeting, or of application by a debtor for his discharge, are dispensed with in the case of creditors for amounts not exceeding £2. Costs, other than a solicitor's charges, may be paid without taxation; and the time for declaring the first dividend is extended to six months, but the whole estate must be realized and distributed within this period if practicable. No modification, however, is permitted in the procedure relating to the public examination and discharge of the bankrupt. Notwithstanding that an order has been made for summary administration, the creditors may at any time by a resolution passed by a majority in number and three-fourths in value of those voting at the meeting, appoint a trustee in place of the official receiver, in which case the summary order ceases to be operative.
Scottish Bankruptcy Legislation.