A sheriff has refused to grant warrants to cite three debtors in petitions for sequestration by a local authority based on alleged arrears of council tax, where the amounts outstanding in the summary warrants immediately founded on fell below the sequestration threshold and other arrears said to be comprised in earlier warrants were not properly vouched.

Sheriff Gregor Murray gave his decision at Forfar Sheriff Court in the petitions of Angus Council against JO, SP and JS, against each of whom charges had expired following the service of summary warrants for unpaid council tax. In two of the charges the total sum due was said to be £2,331.22; in the third it was £1,235.93. As a qualified creditor seeking sequestration must be owed at least £3,000, the council also produced oaths that that each respondent was due significantly more by way of similar debts following the earlier grant of other summary warrants. In two cases, the figure was said to be £4,602.85; in the other, it was £7,262.41.

The council claimed to be a qualified creditor as evidenced in the oath and supporting vouchers. However the earlier summary warrants were composite ones covering a large number of council tax payers, and as only the front page of each warrant was copied and produced, it did not include the debtors' names or the amount said to be outstanding.

Sheriff Murray said there was no doubt that each proposed respondent was apparently insolvent, as charges had expired wiothout payment. But the council had also to show that it was a qualified creditor. No evidence had been produced that the respondents' names were included in the earlier warrants, and the statement of debt produced could not be reconciled with those warrants. "For these reasons, in my opinion, no prima facie evidence of the remaining debt is produced for the purposes of s 19(7) of the [Bankruptcy (Scotland) Act 2016]."

He also rejected a contention that so long as a petitioner was owed a debt higher than £3,000 at the date of petitioning, they could petition for the sequestration of the debtor, even where the charge for payment served was for less than £3,000.

This was for three reasons: the purpose of the summary warrant provisions in the Local Government (Finance) Act 1992 was to promote settlement of the debt and to prevent further diligence being done unnecessarily, and the petitions did not provide evidence that the council had attempted this or complied wuith the underlying purpose of sched 8, para 2(3) to that Act; the purpose of allowing debts to be combined was to allow more than one creditor to combine their debts as a basis for sequestration of a common respondent, and the council's submission "was based on a false premise"; and further, the council's submission was "entirely novel" and contrary to experience.

Sheriff Murray continued: "Looked at another way – why, if each respondent is due the petitioners a sum which exceeds £3,000, a sum which is evidenced in a number of summary warrants, was a composite charge or a number of charges not served for the whole debt? Had that occurred, the matter would have been put beyond doubt. Each respondent would have been aware that sequestration was at least possible, arguably likely.

"However, any of these proposed respondents could be forgiven for thinking that sequestration was impossible – the total debt stated in the charge did not exceed £3,000; moreover, as the wording contained in the charges (at least) strongly suggested sequestration was impossible, they were not encouraged to consider taking any of a number of steps provided by the common law and the Scottish Parliament which are designed to prevent sequestration" – such as a time to pay order, or applying to the Debt Arrangement Scheme. "In these respects, the procedures undertaken in these cases were, in my opinion, wholly insufficient."

Click here to view the sheriff's note.