Francis Beaufort Palmer.

Company precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) online

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11. The sd D. carefully inspected the ppty the subject of the sd
agreement, and ho ascertained and reported to the coy, and it is the
fact: — (1) That, &c., &c \_facts entirely inconsiste^it with the rej)re-
sentations, and ahoioing that the mine tvas worthless^. According^, the
sd D. was directed by the coy to return to England, and the coy has
not attempted to work the sd ppty.

12. Your petrs resply hold and shares in the capital of



WINDING-UP PETITIONS. 55

the coy, and they resply subscribed for those shai-es on the faith of tlie
statements contained in the sd prospectus, and large numbers of other
shareholders subscribed for shares in like manner. Your petrs are
the original allottees of the shares held by them as afsd. The sum of
15s. -per share has been pd up on the sd shares.

If not original allottee, show that petitioner has held the shares for six
inouths. See sect. 40 of Act of 1867, sup)-cf, p. 41.

13. The whole substratum of the coy is gone, and it is not possible
to carry out at a profit the essential purpose for which the coy was
formed, viz., the working of the sd concession or lease.

14. The coy ought to be wound up, and proceedings taken against
the vendor to set aside the sd agreement and the sale to the coy, and
to obtain the cancellation of the shares issued to the vendor, and a
return of the cash pd to him. If the coy be wound up on this peton
there will be a large surplus for the shareholders.

15. Several shareholders have already taken proceedings to obtain
the removal of their names from the register of members of the coy on
the ground of misrepresentations in the prospectus, and others are
likely to take proceedings at once, and, unless such proceedings can be
prevented or rendered ineffective, there is serious danger that, before a
winding-up commences, a large portion of the shareholders will, by
taking such proceedings, obtain priority of payment over the remaining
shareholders, who, nevertheless, have at least as much reason to com-
plain. A resolution to wind up the coy voluntarily has been passed,
but the meeting to confirm that resolution as a special resolution will
not be held until the 27th instant.

16. Questions of considerable difficulty will arise in the winding-up
of the coy, and the assistance of the Ct will be required.

17. In the circumstances it is just and equitable that the coy shoidd
be wound up.

As to cases of substratum gone, see supra, p. 36.



1. The above-named coy (hnftr called the coy) is a joint-stock Form 30.

coy. \_State how constituted, e.g., incorporated by the Barchester p . . T

Tramway Act, 1885, or by deed of settlement, dated, &c., or wind up

by registration under the Act of Parliament, 8 Vict. c. 110, or by unregistered

. . n K ' o company.

Eoyal Charter, &c., or by registration under the Cos Act, 18 — , of the

Colou}^ of .]

2. The principal place of business of the coy is situate in England

at [or, in the case of a foreign coy, the principal place of business

of the coy in England is situate at ].

3. Capital. 4. Objects. 5. The coy consists of more than seven
persons. 6. Coy has carried on business in England \_state how~\.



66



WINDING-UP BY THE COURT. [ChAP. III.



7. [Siaie locus standi ofpetr, e.g., as a credtto)-.']

8. [State ground for icinding-nj), e.g., tJtat the coy is unable to pai/ its
delts.~\

9. \_If a foreign coy state wJiether any winding-iq) abroad.^

10. It is just and equitable, &c.

Sect. 199 of 1862 provides for the -winding-up of " any partnership, association,
or company, except railway companies incoi-porated by Act of Parliament, consist-
ing of more than seven members, and not registered under this Act, and here-
inafter included under the term unregistered company."

Por grounds for winding-up of unregistered comj)anies, see the rest of sect. 199
and supra, p. 37.



Form 31.

Creditor's
petition for
supervision
order.



, showeth as follows :
Office. 3. Capital.



4. Objects.

■l. for money
dated ,



Title, &c.

The bumble peton of B., of -

I. Incorporation of coy.
5. Business commenced.

6. Tbe coy is indebted to your petr in tbe sum of

lent to tbe coy on tbe security of a promissory note
wbereby tbe coy promised, &c.

7. At an extraordinary general meeting of tbe coy duly convened

and beld at on tbe day of , an extraordinary resolution

was passed as follows :

Tbat itbasbeen proved [ivi7iding-up resolution'\.

And at tbe sd meeting C, of , was duly appointed liqr for tbe

purposes of tbe sd winding-up.

8. Since tbe passing of tbe sd resolution your petr bas made several
applicons to tbe coy and tbe sd liqr for payment of tbe principal moneys
and interest secured by tbe sd promissory note. Tbe sd liqr bas
admitted tbat sucb principal moneys and interest are justly due from
tbe coy to your petr, but be bas not pd tbe same.

9. Tbe assets of tbe coy consist (1) of uncalled capital to tbe extent
of G,000^. or tbercabouts, (2) of a freebold colliery, and (3) of otber
items of inconsiderable value.

10. No call bas been made by tbe sd liqr upon tbe members of tbe
coy, and tbe coy's colliery bas not been sold.

II . A j)urcbaser of tbe sd colliery could readily be found, but your
petr is informed and believes that tbe sd liqr intends to retain tbe sd
colliery until a revival in trade sball render it more valuable tban at
present. lie recently refused an offer of 1, for tbe sd colliery.

12. Your petr has on several occasions urged the sd liqr to provide
the funds to pay off the coy's creditors, either by sale of the coy's ppty
or by calling up the uncalled capital, but without success.

13. The debts of the coy amount to 1, or thbts, and the coy is

unable to pay the same,



WINDING-UP PETITIONS. 67

1-^1. The majority of the coy's creditors desire that an order should
be made for continuing the voluntary winding-up under the supervision
of the Ct, and, unless such an order is made, the interests of the coy's
creditors will bo seriously prejudiced by the voluntary winding-up of
the coy.

Your pctr therefore humbly prays :

1 . That an order may be made directing that the voluntary winding-
up of the coy bo continued, but subject to the supervision of
the Ct.
[2. Or, in the alternative, that the coy may be wound up by the Cfc

under the provisions of the Cos Acts, 1862 to 1890.]
3. Or that such other order may be made in the premises as shall

be just.
And your petr will ever pray, &c.

Note. — It is intended to serve this peton on the above-named coy,
and on 0. the liqr thof.

WrNDING-TJP UNDEB THE SUPERVISION OF THE CoURT.

Sect. 147 of 1862. — When a resolution has been passed by a company to wind up
Toluntai'ily, the Court may make an order directing that the voltmtary winding-up
should continue, but subject to siich supervision of the Court, and -with such liberty
for creditors, contributories, or others, to apply to the Coiirt, and generally upon
such terms and subject to such conditions as the Court thinks just.

As to the meaning, now, of "the Coiu-t," see Chap. I.

The power to make a supervision order is given by sect. 147 of 1862, supra.
Sect. 82 of 1862 applies, and accordingly the order may be made on the petition of
the company, a creditor, or a contributory. Fen-y- Tan Co., 6 G. D. 477. The
liquidator can, under sects. 133 and 95, present a petition in the company's name.
Hooker's CreamMilk Co., M. E., 23 S. J. 231 ; and Walmsley Le Tavcrnier, Pearson, J.,
10th May, 1884. Where a supervision order is desired, it will often be found best
to apply alternatively for a supervision or compulsory order as in the above form,
or reversing the order of the first two prayers. One object of presenting a petition
in this form is that the expense and delay of inserting a second or amended adver-
tisement of the petition may be avoided. See 2}ost, Chap. IV. Sect. 149 provides
that the wishes of the creditors and contributories are to be regarded. An order
will readily be made where the liquidator desires it for the protection of the assets
{Zoedone Co., 53 L. J. Ch. 312) ; or where the sanction of the Court to a sale under
sect. 161 is required [Neiv Flagstaff Co., W. N. (1889) 123 ; and see Part I., p. 92);
or where it is considered just that the creditors should have access to the Court, and
thus obtain some control over the liquidators ; or where it appears that the voluntary
winding-up has been unduly delayed : or where the results of the winding-up are
unsatisfactory, and it is considered that creditors ought to have an opportunity
for investigation. Where the petitioner for a compulsory order only asks for a
supervision order, the Court cannot make a compulsory order. Fer North, J.,
Chepstoiv Bobbin Mills Co., 36 C. D. 563.

Asking for a supervision order is not a " withdi-awal" of a petition within the
Rules of March, 1893, in Appendix.

A great many supervision orders are made every year, but the majority are made
on petitions for compulsory orders. Thus, where a company gets into difficulties,



58



WINDING-UP BY THE COURT. [ChAP. III.



the directors very commonly present a petition in the company's name, or get a
friendly creditor to present a petition, for a compulsory order, and at the same time
convene a meeting to pass an extraordinary or special resolution to wind up. Upon
the presentation of the petition, actions and proceedings can be restrained or stayed
Tinder sect. 85 of 1862, and a provisional liquidator appointed. If the winding-up
resolution is passed, before the hearing of the petition, evidence of the fact is adduced,
and the Court is asked to make a supervision order. If the resolution has not been
passed before the hearing, the Court is sometimes asked to allow the petition to
stand over for a week or so, in order that the resolution may be passed.

In United Bacon Co., "W. N. (1890) 74, North, J., in making a supervision order
on a petition for a compulsory order, reqiiired the jjetition to be amended by stating
the voluntary winding-up, and this dex^arture from the usual practice has since
been followed.

Again, where a petition for a compulsory order is presented by a creditor, it is
not uncommon forthwith to pass resolutions to wind up voluntarily ; and then at
the hearing, with the support if possible of some other creditors, to resist a com-
pulsory order, but to offer to submit to a supervision order. Although, as between
the company and an unpaid creditor, he is entitled to a compulsory order, yet, as
between such creditor and the company's other creditors, the wishes of the majority
will be consulted by the Court, and accordingly if they wish for a supervision order,
the Court will make one. West Hartlepool IroincorJcs Co., 10 Ch. 618.

So, too, where a voluntary winding-up has commenced, and a petition for a com-
pulsory order is presented by a creditor or contributory, who would seem likely to
get an order, it is sometimes arranged, by way of compromise, at or before the
hearing, that a supervision order shall be made.

Moreover, when there is a petition for a compulsory order, and a subsequent
resolution to wind up voluntarily, and the Court is prepared to make a supervision
order, the creditor is not entitled to claim a compulsory order merely because it will
carry back the winding-up ; he must show that he will be prejudiced. New York
Exchange, 39 C. D. 415 ; 60 L. T. 66 ; Electrical Engineering Co., 64 L. T. 658.

See further, as to winding-up under supervision, Section III.



Form 32.

Petition to
Lancaster
Palatine
Court.



In tlie Chancery of tlie County Palatine of Lancaster.
[Manchester] District.

In the matter of the Companies Acts, 1862 to 1890,

and

In the matter of the Chancery of Lancaster Acts, 1850 to 1890,

and

In the matter of the Company, Limited.

To the Eight Honorable the Chancellor of the Duchy and County
Palatine of Lancaster.

The humble peton of of .

\_IIerc set out the, facts as in a pcton to the High Courtr^
Your petr therefore humbly prays :
1.- That [asinPorm 18].

2. Or that such other order may be made in the premises as to your
honor shall seem moot.

And your petr will ever pray, &c.
Note. — [As in Form 18.]



WINDING-UP PETITIONS. 59

Prior to the Act of 1890, the jurisdiction of the Court was roguhitcd hy 13 & 14
Vict. c. 43, and 17 & 18 Vict. c. 82, and the Chancery of Lancaster Act, 1890, and
winding-up orders were frequently made in the case of companies having their
registered offices within the jurisdiction. As to enforcing orders of the Palatine
Court, see the above-mentioned Acts. Longdendalc Cotton Co., 8 C. D. 150; Dan.
Forms, p. 772 ; Snow & Winstanley's Chancery Practice, Lancaster. As to appeals,
see Manchester Economic, 24 C. Div. 488. Under sect. 1 of 1890, the Court obtains
special jurisdiction, which is enlarged by the Industrial and Provident Societies
Act, 1893, s. 68, and the Building Societies Act, 1894, s. 8. As to the title of the
petition in the case of these societies, see Forms 1 and 5.

In the Cliancery of tlie County Palatine of Durham. Form 33.



Durham
Palatine



In the matter of the Companies Acts, 1862 to 1890 Petition to

and
In the matter of the Company, Limited. Court

To the Eight Honorable the Chancellor of the County Palatine of

Durham and Sadberge.
[^For the rest, see lastfoi-m.~\

As to Durham Palatine Court, see 52 & 53 Vict. c. 47, and rules made pursuant
thereto, the Act of 1890, ss. 1, 8 (9), 26 (5), 32 (2) and (3), the Industrial and Pro-
vident Societies Act, 1893, s. 58, and the Building Societies Act, 1894, s. 8. As to
the title of the petition in the case of these societies, see Form 1 .

In the County Court of Cornwall, holden at Truro. Form 34.

(Stannaries Jurisdiction.) _, ,.,.

^ ' Petition to

In the matter of the Companies Acts, 1862 to 1890, County

, Court

'^^^ (Stannaries

In the matter of the Company, Limited, case).

and

To the County Court of Cornwall, holden at Truro.

The humhle peton [«s informs above~\.

As from Jan. 1, 1897, the Court of the Vice-Warden of the Stannaries has Abolition of
ceased to exist, except as regards pending proceedings, and its jurisdiction and Stannaries
powers are vested in such of the County Courts as the Lord Chancellor by order Court,
directs, to "be exercised subject to and in accordance with Rules of Court for
regulating the procedure in County Courts." Stannaries Court (Abolition) Act,
1896, 59 & 60 Vict. c. 44 ; Order of L. C, 16th Dec, 1896. As to the practice, see
County Court (Stannaries Jurisdiction) Rules, 1897, r. 10 of which prescribes the
form of title.

In the County Court of holden at . Form '?'>

\_Title as in Form 4.]

To the County Court of holden at . Count^ *°

The humble peton [«s informs ahove^. Court

(other cases).

Under the Act of 1862, the County Court had no jurisdiction to wind up. Under



60



WINDING-UP BY THE COURT. [ChAP. III.



Building and

industrial

societies.



sects. 41 — 46 of 1867 (repealed by the Act of 1890), power was given to transfer a
winding-up to a County Court.

As to the original winding-iip jurisdiction given to the County Court ty sect. 1
of 1890, in cases of companies in general with a capital not exceeding 10,000;., see
supra, Chap. I.

The County Court has no longer exclusive jurisdiction to wind up industrial and
provident societies and building societies. Whether the County Court or some
other Court has jurisdiction depends on the situation of the registered office and the
amount of paid-up capital. See Industrial and Provident Societies Act, 1893, s. 58,
and Building Societies Act, 1894, s. 8. As to the title of the petition in these cases,
see Form 4, p. 21.

As to the jurisdiction with reference to companies formerly within the jurisdiction
of the Stannaries Court, see the last Form and notes thereto.



61



CHAPTER IV.



ADVERTISEMENT AND SERVICE OF PETITION.



Advertisement.

In the High. Court of Justice. No. , of 189—. Companies Form 36.



(Winding-up). Mr. Justice Vaughan Williams. Advertise-

In the matter of the Cos. Acts, 1862 to 1890, and lu the matter of petition (for

the [^inseri name of coul. winding-up

or supervision

Notice is hereby given that a petn for the winding up of the above- ^ . ^' ~

named coy by [z/" the ivmding-up is to be subject to supervision, insert April, 1892.

instead of " by" the ivords " subject to the supervision of "J the High

Ct of Justice {or the County Ct of , holdeu at — ,) [or, as the case

may 5e], was, on the day of , 189 — , presented to the sd Ct

by the sd coy [or, as the case may be~\.

And that the sd petn is directed to be heard before the Ct sitting at

, on the day of , 189 — , and any creditor or contributory

of the sd coy desu-ous to support or oppose the making of an order on

the sd petn may appear at the time of hearing by himself or [m the

County Ct add, " his solicitor or"] his counsel for that purpose ; and

a copy of the petn will be furnished to any creditor or contributory of

the sd coy requiring the same by the undersigned, on payment of the

regulated charge for the same.

(Signed) [to be signed by the solicitor to the petr

or by the petr if he has no solicitor. ~\

[Name.']

[Address.']

Note. — Any person who intends to appear on the hearing of the sd
petn must serve on or send by post to the above-named, notice in
writing of his intention so to do. The notice must state the name and
address of the person, or, if a firm, the name and address of the firm,
and must be signed by the person or firm, or his or their solicitor
(if any), and must be served, or if posted, must be sent by post in



62



WINDING-UP BY THE COURT. [ChAP. IV.



Necessity foi-
footnote as to
appearing.



What
newspapers.



ErrofH in
advert iao-
ment.



sufficient time to reach the above-named not later than six o'clock in the
afternoon of the ■ of , 189 — .

It is -usual to preface the advertisement with the reference to the record and
names of the Court and Judge as ahove, although Form 3 of April, 1892, does not
requii-e it.

As to stating date of presentation, and names and addresses of petitioner and
solicitors, see E.. 34 of 1890, infra.

The solicitors' firm and description maybe given, e.g., thus: — "A. B. & Co.,
1, Mincing Lane, London, E.C., Solicitors for the Petitioner."

E. 19 of April, 1892. — Every advertisement of a petition shall contain a note at
the foot thereof stating that any person who intends to appear on the hearing of
the petition, either to oppose or support, must send notice of his intention to the
petitioner within the time and in the manner prescribed by the next succeeding
rule ; and an advertisement of a petition for the winding-up of a company by the
Court which does not contain such a note shall be deemed iiTegular.

This rule applies to all the Courts having winding-up jurisdiction under the Act
of 1890.

The foot-note is essential, and its omission will necessitate re-advertisement.
mUc India Rubber Co., W. N. (1897) 20.

R. 34 of 1890. — Every petition shall be advertised seven clear days before the
hearing, as follows :

(1.) In the case of a company whose registered office, or if there shall be no such
office, then whose principal or last-known principal place of business is or
was situate within ten miles of the principal entrance of the Royal Courts
of Justice, once in the London Gazette, and once at least in one London
daily morning newspaper, or in such other newspaper as the Court directs.

(2.) In the case of any other company, once in the London Gazette, and once at
least in one local newspaper circulating in the district where such regis-
tered office or principal or last-known place of business, as the case may be,
of such company is or was situate.

There must be seven clear days : if the petition is advertised on a Friday for
healing on the following Friday, it is irregular. City and County Bank, 10 Ch. 471.

The advertisement shall state the day on which the petition was presented, and the
name and address of the petitioner, and of his solicitor and London agent (if any).

The Court has power to abridge the time (R. 176 of 1890), and occasionally does
so. [Land and Sea Telegraph, 18 W. R. 1150 ; Maclean ij Co., W. N. (1881) 8.) And
it may dispense with the advertisement in the local paper. JS^eiv British Iron Co.,
3G S. J. GIO.

For insertion in the Gazette the advertisement must be signed by the solicitor for the
petitioner and witnessed, and the petition with the fiat of the Covu't must be produced.

In the absence of special circumstances petitions rank in the order in which they
are presented. Building Societies Trust, 44 C. D. 140. As to the judge's discre-
tion, sec li. N. Cunningham ij- Co., 53 L. J. Ch. 246.

Where the petition is to be heard in vacation the advertisement will state " that
the said petition is directed to be heard before the vacation judge, the Honourable
," &c.

The utmost care should be taken that the advertisement is correctly expressed
and duly advertised.

Any error in the title, name, day, or place for licaring, may render the adver-
tisement useless. City and County Jlank, 10 Ch. 477 ; Marezzo Marble Co., W. N.
(1874) ; 43 L. J. Ch. 544 ; Manure Co., W. N. (1876) 234 ; Army and Navy Hotel
Co., 31 C. D. 644 ; Newcastle Co., W. N. (1888) 246 ; W. N. (1889) 1. But a formal



ADVERTISEMENT AND SERVICE OF PETITION. 63

defect, where no one is misled, will not invalidate the petition. BroacVs Patent Co.,
W. N. (1892) 15.

The seven daj's may be counted in vacation. London India Itithkr, 14 AV. R.
594. The insertion of the advertisement on the day the petition is presented is not
irregular. Cork and Your/hal Co., 14 L. T. 750 ; W. N. (186G) 279.

The Court will restrain the issuing of the advertisements when the petition is an
abuse of process. Ec A Company, (1891) 2 Ch. 349.

{Full title.) Form 37.

Notice is hereby given that the above peton for the winding-up of ^ T~T

the above-named coy by the High Ct of Justice directed to be heard vertisement

on 2nd of March, 1896, was adjourned by the Ct, and will be heard on ^l^^*' ^^P^'^"
' -^ d ^ Vision order

Monday, 16th of March, 1896, before the Ct sitting at the Eoyal Cts of asked for on
Justice, Strand, London, when, in consequence of the shareholders of ""^.^mg-up
the coy having at an extraordinary general meeting held on 29th Feb.
1896, resolved that the coy be wound up voluntarily, and that A.,

of , and B., of , be appointed liqrs of the coy, the Ct will be

asked by the petr to make an order for the compulsory winding-up of
the coy, or in the alternative for an order continuing the voluntary
winding-up of the coy under the supervision of the Ct instead of
making an order for the winding-up of the coy by the Ct ; and any
creditor or contributory of the coy desirous to support or oppose the
making of an order on the sd peton, either for continuing the
winding-up of the coy under the supervision of the Ct, or for the
winding-up by the Ct, may appear at the time of hearing by himself or
his counsel for that purpose.

& Co., London, E.C., solors for the petr.

Note. — Any person who intends to appear on the hearing of the sd
petons on the 16th March, 1896, must, &c., as in Form 36. See New
Oriental Bunk, (1892) 3 Ch. 563.

Where a petition for a compulsory order is presented, but at the hearing the Re-advertise-
petitioner asks for a supervision order (there being at that time a voluntary nient.
winding-up in progress), the Coiu-t has jurisdiction to make a supervision order
without amendment or further advertisement, and until the above case the Court
very rarely, if ever, requii-ed any further advertisement. As a rule in such cases
there must now be a further advertisement [New Morgan Co., "W. N. (1893) 79),
unless the petition prays for a compulsory order or in the alternative for a super-
vision order, and the original advertisement states this. And recently the Court
has sometimes dispensed with further advertisement, e.g., where the majority of
the creditors are represented at the hearing of the petition. So where a petition
for a supervision order is amended so as to ask for a compulsory order, there should
be a fresh advertisement. National Tfliolemcal Co., (1891) 2 Ch. 151. The fresh
advei-tisement should be in the same papers as the original advertisement. Dombctj
and Son, W. N. (1895) 146.

Service of Petition.

E. 35 of 1890. — Every petition shall, unless presented by the company, be served
at the registered office, if any, of the company, and if there is no registered office,



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