Francis Beaufort Palmer.

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

. (page 20 of 134)
Online LibraryFrancis Beaufort PalmerCompany precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) → online text (page 20 of 134)
Font size
QR-code for this ebook


or that the goodwill is valuable, and woidd be lost by stopping, afford ground for
authorizing the liquidator to carry on the business, at any rate to some extent.

If the provisional liquidator (not being the official receiver) is authorized to carry
on the business, it may be desirable to obtain liberty to open an account with a
local bank where the business is in the country. See Forms 90 and 91.

'WTiere application is made for liberty to carry on the business or to expend
money on the assets, it must be shown that the assets are not mortgaged, e.g., to
debenture holders, or, if they are, that they largely exceed in value the mortgage
debt ; for the Court will not allow the free assets to be spent in preserving or
improving the mortgagee's security.

As to application by official receiver for appointment of a special manager, see
Chap. XI.

As to remuneration of the official receiver as provisional liquidator, see the Order
as to Fees of December, 1891, and [1892] 2 Ch. 210.

AVhere a person other than the official receiver was appointed, his remuneration
was fixed by the judge. See Unionist Club Limited (U. 0126 of 1891).

As to security of provisional liquidator : when the official receiver is appointed he
will not be ordered to give security, but when some other person is appointed the
matter stands differently. Sect. 33 of 1890 repeals the words in sect. 92 of 1862
empowering the Court to ' ' determine whether any and what security is to be given
by the [official] liquidator on his appointment," nevertheless, it is not considered
that sect. 4 (3) of 1890, which provides that "such a person shall not be capable of
acting as liquidator until he has notified his appointment to the Registrar of Joint
Stock Companies, and has given security in the manner prescribed, to the satistaction
of the Board of Trade," applies to a provisional liquidator. "I do not think
'liquidator' there does apply to a provisional liquidator, although he would
probably have to give seciuity if he were appointed before the winding-up, unless
security was specially dispensed with." Per Lindley, L.J., North Wales Gunpowder
Co., (1892) 2 Q. B. 223.

There appears to be nothing to compel the Court to exact security ; nor, on the
other hand, would it seem reasonable to hold that the repeal of the words in sect. 92
prevents the Court from making an appointment upon the undertaking of the
appointee to f;ive security, or of the petitioner to be liable, or conditionally on the
np[)ointeo giving security.

Tlie Court has, in some cases, ordered the provisional liquidator to give security
in the manner prescribed to the satisfaction of the Board of Trade, and when such
an order is made, the Board of Trade can approve the security imdcr R. 67 of 1890,
p. I'JK, infra. Mercantile Bank of Australia, (1892) 2 Ch. 204. In that case,
Nortli, J., had made such un order, but ihc Board of Trade objected that the rule
only aiijiliod nfler ii winding-up order; the learned judge, however, thought
difforeutly.



PROVISIONAL LIQUIDATORS. 99

On the part of A., the petr in this naatter [or, of the above-named Form 80.
coy, or, in case the applicon is for the appointment of the off recr, " of g ^^
A. B. of &c., a creditor," or contributory of the above-named coy], notice of

that B., of , or some other fit and proper person may be appointed ^ro^J^s^gnal

prov lifjr of the above-named coy \Jiere mention any special j^oivers and liquidator.
directions, e.g., icith poiver to tahe possession of and protect the assets of
the coy, and carry on the business of the coy until further order ; and for

that purpose to open an account with the Bank situate at , and

to pay all moneys, bills, and notes received into such bank, and to draw on
such account^, and with such other powers and directions as to the Ct
may seem fit.



the day of , 189—. Form 81.



{Title.) Order

appointing
Upon the applicon, &c., and upon reading, &c., the Ct doth hereby official

appoint Mr. , the off recr attached to the Ct, to be prov liqr of the "q^^^j^Joj^I

above-named coy. And the Ct doth hereby limit and restrict the liquidator

powers of the sd off recr as prov liqr to the following acts, that is to ^ .^^' P^^'^^^"

say [^describe the acts ivhich the prov liqr is to be authorised to do and the petition, and

ppty of ivhich he is to take possession']. before order

See note to Form 85. ^°™ 21 of



Upon motion this day made to the Ct by counsel for A., of &c., and Form 82.
B., of &c., the petrs named in the peton on the 23rd July, 1892. And Appointment
upon hearing counsel for the sd A. and B., and for the above-named of official
coy. And upon reading, &c., both filed this day. This Ct doth hereby ^"^.yvj^^oj^ii
appoint Mr. C. J. S., the off recr attached to this Ct, to be prov liqr of liquidator
the above-named coy. Thomas Daniel Sf^ Co., 0085 of 1892 ; A. L. Smith, ^i,*°clions
L. J., for V. Williams, J., 28th July, 1892.

Such an order as this is now rarely, if ever, made.



Upon motion this day made unto this Ct bj^ counsel for E. of, &c., Form 83.
the petr named in the peton preferred this day unto this Ct, and upon Appointment
hearing counsel for the above-named coy, and upon reading the said of official
peton, an afft of, &c., filed this day. The Ct doth hereby appoint provisional
[i¥r. C. J. S., the off recr attached to this Ct, prov liqr of the above- liquidator to
named coy]. And the Ct doth hereby limit and restrict the powers of gpecM
the said off recr as prov liqr to the following acts, that is to say, to manager,
apply for the appointment of A., of, &c., chartered accountant, as special
manager, with power to the »sd A. to sell the i^pty and assets of the sd

h2



100



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



coy. Liberty to tlie prov liqr to apply before the hearing of the sd
peton if necessary.

London Co-operative Supply Stores, 007 of 1893, Bruce, J., at Cham-
bers, 5th Jan. 1893.

As to tlie words in italics, see next form and notes.

This kind of order is now very commonly made. Bound S; Co., W. N. (1893) 21.
And see note to Form 85.

As to special managers, see Chap. XI., and sect. 5 of 1890.



Form 83a.

Another.
Appointment
of official
receiver as
provisional
liquidator.



{Title.)

U2)on motion this day made unto this Ct by counsel on behalf of C,
the petr named in the peton in this matter on the 17th Dec, 1895,
preferred unto this Ct, and upon reading the sd peton and the affdt of,
&c. This Ct doth hereby appoint one of the off recrs attached to this
Ct to be prov liqr of the above-named coy until the hearing of the sd
peton or until further order. And the Ct doth hereby limit, &c. \_as
above~\, To take possession of, collect, and protect the assets of the above-
named coy, but not to distribute or part with the same until further
order. Queen's Hotel Co. (00293 of 1895), Vaughan Williams, J., 20th
Dec, 1895.

As stated above, the application is now usually by summons. No particular
official receiver is appointed by the Court ; the Board of Trade nominating the
persons to act in rotation. See Form 76b, and notes thereto.



Form 84.

Notification
to official
receiver of
order pro-
nounced for
appointment
of official
receiver as

f>roviHional
iquidator
prior to
■winding-up
order being
made.
Form C of
1892.



{Title.)
To the Off Eecr of the Ct.
{Address.)
Orders pronounced this day by the Honorable Mr. Justice



for,



as the case may be~\ for the appointment of the off recr as prov liqr
prior to any winding-up order being made.




R. 22 of April, 1892. — When an oi'der for ... . the appointment of the official
receiver aw ])iovisif)iijil liquidator, prior to the making of an order for the winding-
up of the company, lias 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 be in I'^orm .... 6, with such variations as circumstances may
recjuiro.



PROVISIONAL LIQUIDATORS. 101

Upon tlio pcton of G., of , &c., and upon tlie adjournod motion Form 85.

this day made unto tliis Ct by counsel for the sd peton for the appoint- Appointment
ment of a prov liqr of the sd coy, and upon hearing counsel, &c. This '^f official
Ct doth order that the sd peton do stand over until Easter sittings provisional
next. And it is ordered that tlie off veer bo appointed prov liqr of the liqui'lator,
sd Mercantile Bank of Australia Limtd. And this Ct doth hereby ^j^^g
limit and restrict the powers of the sd off rocr as such prov liqr to the
following acts, that is to say : —

(1.) To take possession of, collect, and protect the assets of the sd
coy, but not to distribute or part with the same until further order.

(2.) To discharge rent, salaries, and other current expenses.

(3.) To give notice to determine employment of clerks and other
employees of the sd coy.

And Q-Tiy of the parties are to be at liberty to apply as to the bill of
exchange for 40,000^. drawn by the Commercial Bank of AustraKa on
the London Branch of the same bank, and accepted by such branch,
payable on the 9th of May, 1892.

And it is ordered that the costs of the petr and of the sd coy of and
incidental to the sd motion be costs in the winding up of the sd coy.

Mercmitile Bank of Australia (1892, M. 089), North, J., 22nd March,
1892. B. 302; (1892) 2 Ch. 204.

In the High Court it was formerly sometimes stated which of the three official
receivers was appointed, e. g., '' the senior official receiver attached to this Court."
Foel Chjnnog Co., 00248 of 1893, Wright, J., 6th Sept. 1893 ; H. Meijcr ^- Co., 00243
of 1893, Wright, J., 30th Aug. 1893. But this practice is not now followed, the
order in this respect following Forms 72a and S3a.



Appoint C. J. S., the off recr attached to the Ct, to be prov liqr of the Form 85a.
above-named coy. [Limit powers " of the sd off recr as prov liqr."] Another

1. To taking possession of and protecting the assets of the coy.

2. To carrying on the business of the coy till further order.

3. To receiving and collecting the debts due to the coy, and generally
to the doing of such things as may be necessary for carrying on the
business of the coy without the sanction of the judge. Carlyle Press
Ltd., 00133 of 1892, Barnes, J., 10th Oct. 1892.

As to the words in italics, see Forms 83a and 85, and notes.



Upon motion, &c., of A. and B., of, «&c., the petrs named in the peton Form 86.
on the 19th Feb. 1891, preferred, &c., and upon hearing, &c., and 7 T" T
upon reading (peton and affts) : of provit-ional

And the coy by their counsel consenting, and the petrs by their !^*^|r'\^'!f^"
counsel undertaking, to be liable for the receipts of the prov liqr, official
hereby appointed until he shall have given security, This Ct doth receiver) with



102



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



powei" to
gummon ;
meeting.



hereby appoint C, of «S:c., prov liqr of the above-named coy ; and it is

ordered that the sd C. do, on or before the , &c., give security to

be approved by the judge :

And this Ct doth hereby limit and restrict the powers of the sd prov
Uqr to the following acts, and to the following matters, that is to say
[carry on business, and draiv 100^., SfcJ] :

And to call a meeting to be held on the earliest convenient day to
consider the following questions : —

1. "Whether the coy shall continue its business.

2. Whether the coy should be wound up, whether voluntarily, and with

or without the supervision of the Ct, or whether compulsorily.
And it is ordered that the said C. act as chairman of the sd meeting.
National Wholemeal Co., Kekewich, J., 24 Mar. 1891.

In Portsmouth and Southsea Army and Navy Stores (00244 of 1893), Wright, J., as
vacation judge, appointed a person other than the oflBcial receiver as interim pro-
visional liquidator, on the undertaking of the petitioner's solicitor " to be responsible

for the acts and defaults and receipts of the said , as provisional liquidator,

until he shall have given security as hereinafter mentioned." The provisional
liquidator was ordered to give security for 1000?. " to the satisfaction of the Board
of Trade." But, as stated above, the official receiver is now invariably appointed.



Form 87. Upon the applicon, &c., the Ct doth hereby appoint H. of



Order for
provisional
liquidator,
and as to
security and
accounts.



prov liqr of the above-named coy, he undertaking [see supra, p. 98]
forthwith to give security to the satisfaction of the Court, and having
signed the registrar's book accordingly, and the petr undertaking by
his counsel to be liable for the receipts of the sd prov liqr until he
shall have given security, it is ordered that the said H. do account in
such manner as the Ct shall direct, and that he do forthwith pay
all moneys secured by him as such prov liqr into Ct ; and this Ct doth
limit, &c.

Where a person other than the official receiver is appointed provisional liquidator,
it would seem proper to insert in the order a direction that all moneys received by
him be paid into Court, or into a special banking account, unless he will require
Buch moneys for the purposes of the order (e.y., to carry on the business); for
sect. 11 (2) of 1890, which requires liquidators to pay into the companies' liquidation
account, only applies to "a company which is being wound up by order of the
Court," and, therefore, does not operate until after a winding-up order. Accord-
ingly some of the provisions as to payment in, contained in orders under the old
practice, may be adapted. See Forms 88 and 90.



Form 88.

OrdfT on

motion

aiipoiiitiii^

provinional

liqmdtttor.



Upon motion this day made unto this Ct by counsel for M. and C, the
potrs named in the poton, on, &c., preferred unto this Ct, and the petrs
})y tlieir (;ouiisol [appointment nf prov off liqr'\ undertaking to be answer-
abl(3 for the receipts of W., hnftr named, until he shall have given
security as hnftr directed, this Ct doth by consent appoint W. provi-



PROVISIONAL LIQUIDATORS. 103

sionally off recr of the aLove-named corporation. And it is ordered

that the sd TV. do on or before the day of , give security to

be approved by the judge. And it is ordered that the said W. do,

on the day of , and day of , and on the same

days in each succeeding year, leave his accounts at the Chambers of
the judge. And it is ordered that all moneys to be received by the
sd W. as such prov off liqr bo pd by him into the Bank of England to
the credit of the account of the prov off liqr of the said corporation.
And this Ct doth hereby limit and restrict the powers of the sd AV.
as such prov liqr to the following acts, that is to say, to take posses-
sion of and protect the assets of the said corporation, but not to dis-
tribute the same until further order. Oriental Ba7ik Corporation,
Chitty, J., 3rd May, 1884. B. 510.



Limit powers to take possession of all the ppty of the coy in England, Form 89.
and to take all steps necessary for the protection of the coy's assets in 7 ~ '

France, including proceedings for prosecuting the coy's claim in Limitation of
the bankruptcy of S. Phillipart, contributory of the sd coy. Faiire powers.
Electric Co., Pearson, J., 4th June, 1884. A. 782.



^^Appointment o/prov [q^] liqr, limit, ^'c. — ] Form 90.

1. To taking possession of and protecting the assets of the coy. — —

2. To carrying on the business of the coy until further order. liberty'^to °

3. And to drawing and indorsing bills, and to advancing money to cany on
customers, and to do such other things as may be necessary for carry-
ing on the business, without the sanction of the judge.

Order that the sd N., as such prov [off] liqr, be at liberty to open
an account at the Bank for the purposes of the coy.

And order that all moneys which may be received by him as such
prov [off] liqr be paid into such account, and that he be at liberty to
draw on such account for all moneys required for carrying on the sd
business.

And order that if and whenever the balance at the sd bank exceeds
500/., the excess shall forthwith be pd by the sd N. into the Bank of
England to the credit of the prov [off] liqr of the coy. Sotith Eastern
Warehouse Co., Chitty, J., 7 Aug. 1882.



Upon the applieon of the prov [off] liqr of the above-named cor- Form 91.
poration, and hearing the solors for the applicant and for the corjDora- X^T ~. '
tion, &c., Order that the applicant be at liberty to open at the Bank of libertyto
England a drawing account for current expenses and petty disburse- °P'|° P^^^y
ments as such prov [off] liqr to the amount of 1,500/., and that, for account,



104



WINDING-UP BY THE COURT. [CliAP. X.



that puipose, he bo at liberty to pay into such account the sum of
1,000/., together with the sd sum of 500/. retained as afsd. And order
that the applicant be at liberty to draw upon such account for all
moneys required for necessary and proper payments to be made by
him as such prov [off] liqr, and to account for the same on passing
his accounts. The Oriental Bank Corporation, Chitty, J., 12th May,
1884. B. 562.

In the case of BarnecVs Banking Co. a similar order was made in favour of the
official liquidator. The account was to be at the Liverpool Branch of the Bank of
England. Similar orders have been made in other cases.



Form 92.

Direction as
to accounts,
costs, and
remuneration
of provisional
liquidator (in
winding-up
order) .



And H., who was by the sd order, dated, &c., appointed prov liqr
of the sd coy, is to be at liberty to apply in chambers as to passing his
accounts, and for his costs and remuneration. Unionist Club, Limtd,
Chitty, J. (U. 0126 of 1891).

For subsequent order in the same case fixing the remuneration, ordering taxation
and payment of the costs, and declaring the priority in which these and other pay-
ments were to be made, see Form 659, Chap. XL VIII.



Form 93.

Order for
taxation of
provisional
hquidator's
costs.



Upon the applicon of the prov [off] liqr, &c., Order that H. be
discharged from the office of prov [off] Hqr of the sd coy, and that

his sd bond, dated, &c., entered into by him, together with the

Coy, Limtd, as his sureties, be vacated ; And order that it be referred
to the [taxing-master] to tax the costs of the sd prov [off] liqr, and
let him be at liberty to apply for payment thereof when any funds are
available for that purpose. General Machinery Purchase Co., 4th June,
1877. A. 1034.

If no winding-up order is made, the provisional liquidator (other than the official
receiver) must, it seems, account as the Court directs ; for by sect. 20 of 1890, a
liquidator is only to account to the Board of Trade when he is " liquidator of a
company which is being wound up by order of the Court ; " but see note to Form 86,
p. lOI.

On the making of the winding-up order, the powers of the provit>ional liquidator
come to an end. Unless he is the official receiver, he ceases to be provisional
liquidator, and must apply to the Court for his discharge, and that he may be
released from his security. If one of the official receivers has been appointed
interim provisional receiver, on the winding-up order being made the Board of
Trade usually again nominates him as provisional liquidator.



Form 94. TJjion the applicon, &c., Order that the costs of the sd prov [off]
Another ^'^1^ '"'^ uh-eady taxed and allowed, be taxed as between solor and

Further taxa- client from the tJTuo of his sd appointment up to and including

the of , 1881, bo taxed on the higher scale by the [taxing-

mabtor], and that such costs when taxed bo pd out of the assets of



tion.



PROVISIONAL LK^UIDATOKS. 105

the corporation. Oriental Bank Corporation, Chittj", J., 10th July,
1884. B. 1024. British Farmers' Co., 8th May, 1876. A. 803.



Ulion the applicon of C, the prov [off] liqr of the ahove-named Form 95.
coy, and upon hearing the solors for the applicant and for the Another
[off] liqr of sd coy, and upon reading, &c., an afft of the applicant, Onler for
filed, &c., whereby it appears that the applicant has not received or
pd any sum or sums of money as such prov [off] liqr, [Order dis-
charge, and recognizance, ^c, to he vacated~\ ; and order that the [taxing-
master] do tax the costs, charges, and expenses of the applicant as
prov [off] liqr properly incurred from the date of his appointment up
to and including this order, and also the costs of the potr of the
applicon to appoint the sd prov [off] liqr and consequent thereon;
and order that such costs, charges and expenses be paid out of the
assets of the said coy as and when the judge shall direct. National
Funds Assurance Co., Bacon, V.-C, 21st Ajn-il, 1877. B. 928.



Upon the applicon of W., late prov [off] liqr of coy, and upon Form 96.

hearing the solors for the applicant and for C, the liqr of the sd coy, ^ , - ,

and upon reading the order dated 5th June, 1877, the office copy of ment to late

the recognizance hnftr mentd, the chief clerk's certificate, dated 8th P^'oyisioual

^ liquidator of

Aug. 1877, Order that the sd C, the liqr of the sd coy, out of the certified

assets of the sd coy, pay to the sd W. the sum of 53/. 19s. \d., the t)alance.

balance by the sd certificate certified to be due to him as prov [off]

liqr of the sd coy. \_Avd order recognizances to be vacated.^ Lgttle's

Iron Agency, Limited, 9th Aug, 1877. B. 1488.

In the above case a supervision order had been made after the appointment of a
provisional liquidator.



The Duties of Interim Provisional Liquidator.

The duties of an interhn provisional liquidator, that is to say, of a provisional
liquidator appointed after the presentation of the petition, but before a winding-up
order, depend on the order appointing him. Very commonly his powers are
restricted to taking possession of and protecting the assets of the company, and this
was the usual course under the old practice (and see Form 83a). Sometimes,
however, his powers are limited to taking possession and to carrying on the
business of the company and for that purpose to borrowing a specified sum of
money on the assets. See Chap. XXVIII. Sometimes, too, where the official
receiver is appointed interim provisional liquidator, his powers are restricted to
applying for the appointment of a special manager. See Bonnd df- Co., W. N.
(1893) 21, and Form 83. Occasionally the powers of the interim provisional
liquidator are limited to calling meetings of the members or creditors of the
company and reporting the result thereof to the Coui-t. Whatever powers are
by the order given to the interim provisional liquidator, he is no doubt



106 WINDING-UP BY THE COURT. [OhAP. X.

intended to exercise those po-wers, and should exercise them accordingly. Thus, if
his powers are restricted to carrying on the business, he should carry on the
business, and must not consider that he has a discretion to stop the business ; but
he can, of course, apply to the Court for directions if he finds that it is expedient
to stop. So where his power is restricted to taking possession of and protecting
the assets, it becomes his duty to take possession of and protect the assets
accordingly, and he should therefore at once take possession by himself or his
agents and do all that is necessary to protect ; e.g., he should give notice of his
appointment and should take steps to stop executions and the removal of any goods
and trespasses, and he should see to the insiu-ance of the property of the company,
and should of course take special care to secure the books of the company, and
should communicate mth the bankers of the company. If the interim provisional
liquidator finds that his powers are not sufficiently wide, e.g., if he is appointed
merely to take possession of and protect the assets, and he finds that there is a
going business which could be sold if continued, or which would suffer irreparable
damage if discontinued at once, he can apply to the Court for liberty to carry it on
with consequential directions, and so in regard to other matters. He can,
moreover, no doubt appoint a solicitor, and within the scope of the order take all
necessary and legal proceedings to protect the assets, and his legal expenses will no
doubt be allowed.

The above observations apply whether the official receiver or some other person
is appointed to be interim provisional liquidator. In London cases, where appli-
cation is made for the appointment of an interim provisional liquidator, the Court



Online LibraryFrancis Beaufort PalmerCompany precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) → online text (page 20 of 134)