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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The above order seems to be opposed to the rule, laid down by the Court of Appeal
in Gold Hill Mines, 23 C. Div. 21o, that a petition by a creditor whose debt is
bona fide disputed ought to be dismissed, and not ordered to stand over. See, further,
infra.

Dismissal.

Upon motion by way of appeal from an order dated 21st Dec. 1882, Form 62.



this day made unto this Ct by counsel for the coy, and upon hearing Order on
counsel for B., the petr named in a peton presented on 5th Dec. 1882, appeal dis-
f or the winding-up of the coy, and upon reading the sd order and the j^^^^ dfsputed.
certificate of the fund, Order that so much of the sd order as directed

P. G



82 WINDING-UP BY THE COURT. [ChAP. VIII.

all further proceedings under the sd peton to be stayed, and as
reserved the costs of the motion nntil after the trial of the sd action,
be discharged. And order that the sd peton do stand dismissed with
costs. And [110^. cash in Ct to be paid to coy]. And order B. to
pay to coy the costs of the sd peton, including the costs of the motion
upon which the sd order of 21st Dec. 1882, was made, and of this
appeal, such costs to be taxed by the taxing-master. Gold Hill
3Imes, Limtd, Ct of App., 24th Jan. 1883. A. 274.

It is well settled that a petition for winding-up is not to be made an instrument
of oppression for enforcing payment of a disputed debt. And when this rule is
violated, the company can, on motion, obtain the dismissal of the petition with
costs. Gold mil Mines, 23 C. Div. 211.

But the Court must be satisfied that there is a bond fide dispute. Imperial Hydro
Co., 49 L. T. 147.

The order in the Court below in the above case was as follows : — "Upon motion
by counsel for company that B., the petitioner named, &c., might be restrained
from advertising, or causing to be advertised, the said petition, or taking any pro-
ceedings under the said petition, and that the costs of the company of and occa-
sioned by the said petitions, and of the said motion, might be ordered to be paid by
the said B., and upon hearing, Order company to pay 110^. into Court, such sum to
abide the result of action, B. by his counsel undertaking to bring an action for the
amount alleged to be due to him from the said company. And upon such payment
stay all fui-ther proceedings under said petition until after the trial of said action.
Costs of motion reserved until after trial of action. Bacon, V.-C, 21st December,
1882. A. 4823."

"When a petition in respect of a disputed debt is threatened, an action for an
injunction can be brought. Niger Merchants v. Capper, 18 C. D. 557 ; Cerele
Bestaiirant v. Lavery, 18 C. D. 551. See Comp. Prec. 6th ed. Part I. Form 533.
But when the petition has already been presented it is necessary, regard being had
to sect. 24 (o) of the Jud. Act, 1873, to apply in the matter of the petition instead
of bringing an action.

Form 63. Upon the peton of B., of &c., a creditor \or a contributory] of the

^TT",. above-named coy, on the day of , pi-ef erred unto this Ct

missing with praying that the above-named coy might be wound up by the Ct under
the provisions of the above-mentd Acts, and upon hearing, &c., and
upon reading, &.c. \_as in ivindi^ig-up order~\, This Ct doth order that
the sd peton do stand dismissed out of this Ct, with costs to be
taxed and paid by the said petr B. to the sd X. coy, and to the sd
Y., the contributory opposing the peton, and to A. and B., creditors,
and C. and D., shareholders, appearing as afsd ; but only one set of
costs is to be allowed to the sd creditors and shareholders resply ; and

order that , the prov [off] li(p appointed by the sd order of the

of , bo discharged.

See Hoct. 86 of 18C2, mipra, as to dismissing, and K. 2 of March, 1893, supra,
p. 78, as to consenting to dismissal.

Where the petition was dismissed, the old practice was usually to order the petitioner
to pay tlio coHtH of thf of)ni])!niy, to pay one set of costs (nmong them) to the share-



costs.



WITHDRAWAL OF PETITION. 06

holders opposing the petition, and one set of costs (among them) to the creditors
opposing. European Banh'uuj Co., 2 Eq. 521 ; Diamond Fuel, W. N. (1878) 11.
Sometimes, however, there was no restriction as to one set of costs. Anglo-Egyptian
Co., 8 Eq. 880 ; New Gas Co., 5 0. D. 705. But under the new practice even one
set of costs is not given as a matter of course. Neiv British Iron Co., 36 S. J. 310.
That case, however, is not now an authority for the proposition therein stated.

The circumstances of each case are carefully considered before costs are given to
persons supporting or opposing a petition. And see p. 79, as to the costs where the
same solicitor represents two or more parties.

Withdrawal.

Until quite recently the petitioner, until a winding-up order had been made, was
dom'mus litis, and therefore could submit to an order dismissing, or obtain liberty
to withdraw, his petition. Some Assurance Assoc, 12 Eq. 59 ; Times Life Assur-
ance Co., 9 Eq. 382. Accordingly, the company very commonly came to terms
with the petitioner, e.g., that his debt should be paid or secured, and that he
should withdraw the petition. In such case the company usually agreed to pay
the costs, and where the petitioner was justified in presenting the petition, he was
entitled to require payment thereof. Alliance Co., W. N. (1867) 218 ; Flagstaff Co.,
20 Eq. 268.

But see now, R. 2 of March, 1893, supra, p. 78, as to substituting another peti-
tioner, and the notes, supra, on this provision.

Wliere a petition was withdrawn or dismissed by consent, creditors and members
appearing and opposing were, under the old practice, usually given costs from the
petitioner: Xacupai Co., 28 C. D. 60; Patent Cocoa Fibre Co., 1 C. D. 617; London
and Suburban Bank, 19 W. R. 88 ; unless such appearance was unjustifiable.
WaWiam United Mines, W. N. (1882) 134. But even under the old practice there
was no fixed rule, the Court looking at the circumstances of the particular case.
Criterion Gold Co., 41 C. D. 146. And there was no right to separate sets of costs.
S. C. ; and Beckham Tramway Co., explaining North Brazilian Sugar Co., 56 L. T.
229 ; W. N. (1887) 3. And the rule that a withdrawing petitioner must pay costs
was not inflexible. District Bank, 35 C. D. 576.

There is no settled rule under the new practice. The circumstances are con-
sidered before giving costs in any case.

Accordingly, where a petitioner agrees to withdraw, he shoiild insist on being
indemnified by the company against these costs.

In arranging terms of withdrawal, a petitioner should take care that his costs are
paid down or secured, and should not submit to an order merely dismissing the
petition and directing the company to pay the costs, for in such case, if the com-
pany goes into liquidation before the costs are paid, the petitioner will have to go
in and prove for them, ranking as an unsecured creditor. See, however. Ad-
justable Horseshoe Co., W. N. (1890) 157.

{Title.) Form 63a.

upon the peton of the C. Bank, Limtd, of, &c., creditors of the Order to dis-
above-named coy, on, &c., and vipon hearing, &c., and the petrs by miss (by con-
their counsel admitting that their claim has been satisfied, and under- ofVcureV"'^
taking to hand over to the trustees for the debenture-holders all deeds creditors,
in their possession or control belonging to the sd M. Coy, and

Messrs. , the solors for the sd M. Coy, personally undertaking

g2



84



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



through the counsel for the sd coy to pay to the sd petrs their costs of
the sd peton, and also their proper costs, charges and expenses as
mortgagees of the sd coy, subject to all such costs, charges and ex-
penses being taxed, by consent, order that the sd peton do stand
dismissed out of this Ct. And order that the costs of the petrs of the
sd peton, and also their proper costs, charges, and expenses as mort-
gagees of the sd coy, be taxed. Madras Electric Tramioays Co. (00139
of 1895), Eomer, J., 17th June, 1895.



Form 64. Upon the peton of , preferred unto this Ct, praying that coy

might be wound up under the provisions of the above-mentd Acts, and
the petrs not -wishing to proceed with the sd peton, and the coy
waiving all costs. This Ct doth order that the petrs be at liberty to
withdraw the sd peton. Langham Skating Rink Co., Bacon, V.-C,
4th Nov. 1876. B. 1817.



Order giving
liberty to
withdraw.



Form 65.

Order by
consent dis-
missing'.



Upon the peton of B., of, &c., [ivincling-up peto7i] : And it appearing
that the debt of the petr has been provided for. Order that by consent
the peton be dismissed. And order that the petr's costs of and
incident to the sd peton be taxed by, &c., as between solor and client,
and be pd by the coy to the petr ; and if such costs when taxed do not
amount to 100/., the petr by his counsel undertaking to apply the
excess of the 100/. already pd to the petr towards satisfaction of the
first of the three promissory notes given by the sd coy to the petr
which shall become payable after the taxing-master's certificate shall
have been filed. And if such costs when taxed shall exceed the sd
sum of 100/., the balance of such costs is to be pd hj the sd coy to the
petr on the loth of Dec. instant. Government Security Fire Insurance
Co., 22nd June, 1877. A. 1218.



Form 65a. Upon the peton, &c., and upon hearing, &c., and upon reading, &:c.,
Another. ^^^ the petr not wishing to proceed with the sd peton, and the sd coy

by their counsel undertaking to pay the costs of the sd petr, by consent
order that the sd petr be at liberty to withdraw the sd peton. And
order that costs of sd petr of the sd peton be taxed. Brunsivick Cotton
Spinning Co., Vaughan Williams, J., 19th Feb. 1896 (0021 of 1896).
And see Barcelona (Besos) Waterioorks Co., Vaughan Williams, J.,
Gist Oct. 1894 (0091 of 1894).



^orm 66. Upon tho peton of M. [/o/- compulsory order'], and upon hearing

Order tluit counsel for the petr, and for the sd coy, and the petr by his counsel

rolItTYbt'"^ fidmitting that the claim of the petr against the sd coy has since the

paid bfforc «tl peton WHS preferred been satisfied, This Ct doth not think fit to
li','



I'.-nnng'.



KEVIVOH. 85.

make any order on the scl peton, but doth order that the sd coy do pay
to the petr his costs of the sd peton, and such costs to be taxed, &c.
British Alliance Corporation, Malins, V.-C, 17th May, 1878. A. 2124.

Where the petitioner's debt is paid before the hearing-, but the company will not
pay his costs, he should apply for his costs at the hearing, and an order will be
made as above. Alliance Co., W. N. (18G7) 218 ; Flagstaff Co., 20 Eq. 268 ; Ifasonic
Co., 32 C. D. 373. But before making' the order the Court generally requires an
affidavit that the company has no other debts than that of the petitioner, or that it
has sufficient assets to pay all its debts.

Where the company pays the debt and costs before the hearing, and undertakes
to indemnify the petitioner against claims for costs by creditors and contributories
who may appear, it has been held that the petitioner is not entitled to the costs of
appearing. Adjustable Horse Shoe Co., AV. N. (1890) 157. But R. 2 of March, 1893,
seems to justify his appearance. See p. 78.

And sometimes, when no creditor or shareholder appears except the petitioner,
and he is willing to withdraw, an adjournment is ordered to see whether anyone
■wishes to be substituted as petitioner.

Upon the peton, &c., and the petrs by their counsel admitting that Form 67
the debts and costs of execution due from the sd coy to the petrs had _^^Qti^gi,
since been pd, This Ct doth not think fit to make any order on the sd where credi-

peton, but doth order that the sd coy do pay to the petrs and to ^^^ oppose.

and creditors, their costs of and occasioned by the sd peton :

such costs to be taxed by the taxing-master, who is to allow to the sd
creditors such costs only as would properly have been incurred by
such creditors resply if all such creditors had been represented by the
same counsel and solors. Association of Land Financiers, Malins, V.-C,
25th June, 1878. B. 1408.

But this rule cannot apply in all cases. Suppose the company is insolvent, surely
in that case the petitioner is not bound to rely on the company's contract to indem-
nify him against the costs of creditors or contributories, which the Court, in dis-
missing the petition, may, in his absence, order him to pay. And see now K. 2 of
March, 1893, supra, p. 78.

Revivor.

Upon motion, «&c., by counsel for "W. and F., the exors of the will Form 68.
of C. F., deed, who alleged that on the 24th of Dec. 1874, the sd jjevivor on
C. F. presented his peton for the winding-up of the sd coy under, &c., application of
and that the sd petr died on the 11th of May, 1876, having by his ^^g^utors'^
last will and testament appointed the sd W. and F. exors thof, who
duly proved the same on the 3rd of June, 1876, Order that the sd peton
and the proceedings thereunder be carried on and prosecuted by the
sd W. and F. in like manner as the same might have been carried on
by the sd F. in case he had not died. Tecoma Silver Mining Co.,
HaU, V.-C, 26th July, 1877. B. 1473.

See also Dijnevor Collieries Co., W. N. (1878) 199, where a similar order was made,



86



WINDING-UP BY THE COURT. [OhAP. VIII.



tlie petitioner having died before the hearing of the petition. And see Commercial
Bank of London, W. N. (1888) 214.

See also Burn ^- Co., Kay, J., 15th Nov. 1886 (A. 1530), vrhere the petitioner had
died after the winding-up order.



Form 69. Upon x^eton of E. L. B., »S:c., ttis day preferred unto tliis Ct,
■^ho alleged that on the day of Feb. 1891, M. L. and the petr



E. L. B. preferred a peton to this Ct in the above-mentd matter,



Eevivor on

application

of petitioner's j^raying [winding-iip petoti] ; that the sd M. L. died on the 20th day of
ra or. ^ "x^ 1891, and that letters of admon of the estate of the sd M. L.
were on the 6th day of May, 1891, granted to the petr A. L., It was
therefore prayed, and is accordingly ordered, that the petr be at
liberty to continue and carry on the sd peton in the same manner as
the sd M. L. and E. L. B. might have done if the sd M. L. had not
died. National Whole Meal, S^'c. Co., Kekewich, J., 8th May, 1891.



Form 70.

Order

BtriJring out
petitioner's
name.



Striking out Petitioner's Name.

Upon motion, &c., Order that the name of E. be struck out as one of
the sd petrs, on the ground that his name was used without his
consent or authority. And order the respts to pay to the sd E,. his
costs of this motion, to be taxed by the taxing master as between
solor and client. Netherthorpe Freehold, Chitty, J., 7th Dec. 1883.
B. 1753.



CHAPTEE IX.

WINDING-UP ORDERS AND NOTICES, SERVICE AND ADVERTISEMENT

THEREOF.



Provisional Orders.

The old practice of pronouncing a winding-vip order, but directing that it should
not be drawn up before a certain day if the company complied with certain condi-
tions, e.g., paid the petitioner's debt and costs in the meantime, is not now followed.
^ee Baker, Tuckers ^- Co., W. N. (1894) 33. The reason for tliis alteration is that
notice (see infra) has at once to be given to the official receiver on the same day that
the order is made. He thereupon becomes provisional liquidator (sect. 4 of 1890)
and takes possession of the assets. Rules 89 — 91 of 1890.

When there are sanguine hopes of an early settlement, the practice is now to
adjourn the petition to a day named, with an intimation that if the debt and costs
are not paid in the meantime a winding-up order will then be made without hearing
further evidence or argument ; but the petitioner must appear and apply for the
order.

Notice to Official Receiver.

R. 22 of April, 1892. — When an order for the winding-up of a company or for
the axjpointment of the official receiver as provisional liquidator, prior to the
making of an order for the winding-up of the company, has been pronounced in
Court, the registrar shall, on the same day, send to the official receiver a notice
informing him that the order has been pronounced.

The notice may bo in Forms 5 and 6 resxiectively, with such variations as
circumstances may require.

{Title.) Form 71.

To the Official Eeceiver of the Court. ZTT: :

Notincation

{Address.) to official

Orders pronounced this day by the Honorable Mr. Justice orders^ro-

\or, as the case may he'] on petons for winding-up of cos under the nounced on

Cos Acts, 1862 to 1890. [_The schedule annexed contains three columns, ^^in(Ji^^.°^p

headed respectively: — "Name of Company;" "Eeg'istered Office of Form l 9a of

Company ; " "Petitioner's Solicitor."] Ap.^isg?'. ^ ""^
In the High Court a separate notification is given of each compulsory order.



88



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



Notification to
Central Office
of orders
pronounced on
petitions for
Tvinding-up.



Notice to Central Office.

Notice of the fact that a winding-up order has been pronounced is also sent by
the registrar to the Central Office of the Supreme Court of Judicature, and is in the
following form : —

Form 71a. In the High Ct of Justice.
Cos (Winding-up).

To the Central Office, Royal Cts of Justice, Strand, W.C.
Orders have been to-day made for the compulsory winding-up of the
under-mentd cos under the Cos Acts, 1862 to 1890 \_here follow two
cohnnns, headed respectively : — "Name of Company" and "Registered
Office of Company"].
Dated the of .

Completion of Order.

B. 23 of April, 1892. — It shall be the duty of the petitioner, and of all other
persons who have appeared on the hearing of the petition, at latest on the day
following the day on which an order for the winding-up of a company is pro-
nounced in Court, to leave at the registrar's office all the documents required for
the purpose of enabling the registrar to complete the order forthwith.

Wliere the petitioner neglected to draw up the order, and a debenture holder's
action was pending in wliich steps were being taken to realize the assets, leave was
given to a creditor, who had not appeared on the petition, to draw up the order.
South MetropoVitan, %c. Co., W. N. (1891) 51. Eut see E. 24 of April, 1892, infra.

K. 24 of April, 1892. — It shall not be necessary for the registrar to make an
appointment to settle the order, or to give notice to any of the parties thereto,
unless in any particular case the special circumstances make an appointment or
notice necessary.



Form 72.

Order for
winding-up.
Form 18 of
1890.



{Title)

Ux^on the peton of the above-named coy \or A. B., of &c., a creditor

[or contributory] of the above-named coy], on the day of ,

189 — , preferred unto the Ct, and upon hearing for the petr,

and for , and upon reading the sd peton, an afft of (the sd

petr), filed, &c., verifying the sd peton, an alft of L. M., filed the

day of , 189 — , the London Gazette oi the day of , 189 — ,

the newspaper of the day of \_enter any other papers],

each containing an advertisement of the sd peton \_enter any other

evidence], this Ct doth order that the sd Coy be wound up by this

Ct under tlio provisions of the Cos Acts, 1862 to 1890, and that [_name
"f "if fecr], tlie off recr attached to this Ct, be constituted prov
liq of the ail'airs of the coy.

Note. — A. B., being a of the coy, is hereby required to attend

at tho office of the off recr at \insert the place at tvhich attendance is
required].

Tlio off rccr's offices are open every weekday from 10 a.m. to
4 p.m., except days, wlion they close at — p.m.

llic name of tlio official receiver is not now inserted. See Form 72a,



WINDING-UP ORDERS. 89

{Title.) Form 72a.

Upon the petou of ["tlie above-mcntd coy," or A. B., of &c.], a Order for

["creditor" or "contributory"] of tho above-mentd coy on the windmg-up.

day of , 189 — , preferred unto this Ct, and upon hearing counsel

for the petr, for the above-mentd coy [ Where the coy does not appear,
the following tvords must be substituted for those in italics, viz., " and no
one appearing- for the above-named coy, although duly served with
the sd peton, as appears by the afEt of C. D., filed," (fcc], and for the
several persons named in the first schedule hereto, creditors support-
ing the sd peton, for the several persons named in the second schedule
hereto, creditors opposing the sd peton, and for the several persons
named in the third schedule hereto, contributories supporting the sd
peton, &c., and upon reading the sd peton, an afft of ["the sd petr "]

filed the day of -, 189 — (verifying the sd peton), the London

Gazette, dated the day of , 189 — , and the Times and Standard

and Daily News newspapers, all dated the day of , 189 — ,

and each containing an advertisement of the sd peton, an afft of ,

filed the day of , a joint afft of and , filed the

day of , &c., and the several exhibits in the sd affts referred to

l^enter any other document or other evidence, e.g., " and the order, dated
&c." (appointing prov liq), or "and upon hearing the evidence of T.,
taken upon his oral examination before this Ct"J.

This Ct doth order that the sd \jiame of coy infull'\ be wound up by
this Ct under the provisions of the Cos Acts, 1862 to 1890.

And it is ordered that one of the off recrs attached to this Ct be
constituted prov Kqr of the affairs of the sd coy.

And it is ordered that the costs of the petr and of the sd coy [and of
the creditors and contributories supporting the peton] be taxed and
paid out of the assets of the sd coy [but that on such taxation only
one set of costs is to be allowed to the creditors supporting the peton,
and one set of costs to the contributories supporting the peton].

Note. — It will be the duty of the person who is the secretary or
chief officer of the coy, and such of the persons who are liable to make
out or concur in making out the coy's statement of affairs as the off
recr may require him or them, to attend on the off recr forthwith on
the service of this order.

The off recr's offices, 33, Carey Street, London, W.C, are open
every week-day from ten a.m. to four p.m., except on Saturdays, when
they close at two p.m.

The above form is the one now actually used, and is based on Form 18 of 1890.
Form 72, supra.

As TO Costs.

Under the old practice, the usual order as to costs where a winding-up order was
made was to give the petitioner and the company, and the contributories and creditors



90



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



Interim

(jrovisioiial
iiiuulator.



supporting the petition, their costs, but only one set among the contributories, and
one among the creditors. Hiimbcr Ironworks Co., 2 Eq. 15 ; 35 Beav. 34G ; European
Banking Co., 2 Eq. 521 ; 35 L. J. Ch. 690 ; Feckham Trams, 57 L. J. Ch. 4G2. And this
order has often been made under the new practice, but there is no hard-and-fast
rule.

As to <nving one set of costs only where the same solicitor appears for two or
more parties, see supra, Chap. VIII. p. 79.

If the petition makes personal charges against any du'ector or member, e.g., of
fraud or misconduct, such director or member may appear separately, and if the
petition is dismissed, or the charge is disposed of, the Court may order the peti-
tioner to pay the costs of such separate appearances. Anglo-Greek Co., 2 Eq. 11.

As to the costs of a voluntary liquidator appearing at the hearing, see A. IF. Hall
Si Co., W. N. (1885) 190 ; Mont de Fiete of England, W. N. (1892) 166.

As to costs of concurrent petitions, see infra, note to Form 76.

Under the old practice, the order, where a provisional liquidator had been
appointed, usually provided for ' ' the costs of and relating to the said petition

including the costs of and consequent upon the appointment of the said as

provisional liquidator," and it may be proper to follow this practice. And where
a person other than the official receiver has been already appointed provisional
liquidator, it may be necessary to insert, before the foot-note, the foUovring words : —
"And H., who was by the said order, dated, &:c., appointed provisional liquidator
of the said company, is to be at liberty to apply in chambers as to passing his
accounts, and for his costs and remuneration." Unionist Chth, Ziintd., U. 0126 of
1891. But the official receiver is the only person now usually appointed as interim
provisional hquidator.

As TO Note.

E. 38 of 1890. — An order to wind up a company shall contain at the foot



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