You need to normalize the register to <xsl:sort/>
If your environment supports XPATH 2.0, you can use either uppercase () or lowercase (), as shown below:
<xsl:sort select="upper-case(Surname)" order="ascending" />
If your environment does not support XPATH 2.0, you will need to use translate (), as shown below:
<xsl:sort select="translate(Surname, 'abcdefghijklmnopqrstuvwxyz','ABCDEFGHIJKLMNOPQRSTUVWXYZ')" order="ascending" />