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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is strongly disposed to appoint the official receiver rather than an outsider,
although, as appears above, there is clearly jurisdiction to appoint an outsider.
Where there is an important business to cany on, which can only be effectually
carried on by an expert, it certainly seems a more rational course to appoint an
expert at once to be interim provisional liquidator, but in several cases the Court
has preferred to appoint the official receiver with liberty for him to apply for a
special manager. This involves additional expense and delay, for the special
manager has to give security to the satisfaction of the Board of Trade, and probably
cannot act imtil he has given security (see sect. 4 (3) of 1890) ; whereas if an expert
is at once appointed by the Court as interim provisional liquidator, the Court can
take proper seciu-ity and allow him to act at once. See Forms 86 — 88.

But the Court, on appointing the official receiver to be provisional liquidator for
the purpose of applying for a special manager, sometimes gives leave for the latter
to act at once.



107



CHAPTEE XI.

SPECIAL MANAGER.

Sect. 5 of 1890. — (1) "Where tlie official receiver becomes the liquidator of a Wlien official
company, whether provisionally or otherwise, he may, if satisfied that the nature receiver may
of the estate or business of the company, or the interests of the creditors or con- ^PPv •
tributories generally, require the appointment of a special manager of the estate or
business of the company other than hunself , apply to the Court to, and the Court
may on such application, appoint a special manager thereof during such time as the
Court may direct, with such powers, including any of the powers of a receiver or
manager, as may be entrusted to him by the Court :

(2) The special manager shall give such security and account in such manner as Security and
the Board of Trade direct [see Chap. XIX.] : remuneration.

(3) The special manager shall receive such remuneration as may be fixed by the
Court.

An application under this section can only be made by the official receiver. See
Form 83.

So, also, sect. 12 of the Bankruptcy Act, 1883, empowers the official receiver, on
the application of a creditor, if "satisfied," &c. (as above), to appoint a manager,
and if he refuses to make such an appointment, the Court cannot interfere. Re
Whittaker, 50 L. T. 510.

The official receiver is often appointed provisional liquidator for the sole purpose
of applying for the appointment of a special manager. Bound ^- Co., W. N. (1893)
21 ; and see Form 83.

R. 42 of 1890. — (1) An application by the official receiver for the appointment of Report on
a special manager shall be supported by a report of the official receivei-, which shall applying for.
be placed on the file of proceedings, and in which shall be stated the amount of
remuneration which, in the opinion of the official receiver, ought to be allowed to
the special manager. No affidavit by the official receiver in support of such an
application shall be required :

(2) The remuneration of the special manager shall, unless the judge otherwise in
any special case directs, be stated in the order appointing him :

(3) A copy of the order appointing a special manager shall be transmitted to the
Board of Trade by the official receiver.

See form of report. Form 96a.

The application may be made by summons, which, at any rate if the application Summons,
is before a winding-up order has been made, should be sei^ved on the company.
See Form 97.

{Title.) Form 96a.



The senior off recr reports to the Ct as follows : — By an order of the Report by

Ct made in the above matter on the 9th September, 189G, he was ^ ^■

■1- ' ' receiver

appointed prov liqr with power {inter alia) to apply for the appoint- supporting



108



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



application
for special
manager.



ment of a special manager, if necessary. Under a i^eton to wind up
presented against the coy in January, 1895, the off recr became the
prov liqr and subsequently the liqr. Under this peton Mr. X. Y. was
appointed special manager upon the applicon of the off recr, such
appointment being then considered necessary by reason of the special
nature of the coy's business, and the varied questions which were
arising from time to time as to the mode of dealing with goods in
course of shipment, bills of lading, claims for freight, claims of
stoppage in transit, and other matters. The nature of the coy's
business has in no way changed since 1895, and the off recr is there-
fore of opinion that it is necessary, in the interests of the creditors
generally, that a special manager of the estate and business of the coy
other than himself should be appointed, and that in his opinion
Mr. X. Y., of, &c., should be so appointed. The off recr understands
that Mr. X. Y. has consented to accept that appointment upon a

remuneration of 1, a week, which, in his oj)iniou, ought to be

allowed.

Dated this 2nd day of October, 1896.

(Signed) Q. T.,

Assistcmt Official Receiver.

The above is taken from a form recently used.



Form 97.

Order
appointing
special
manager.



Upon the applicon of the off recr and liqr, and hearing the solors for
the applicant and for the coy, and upon reading the order dated the
26th Jan. 1891, and the afft of W. S. filed the 26th Feb. 1891, it is
ordered thatM., of, <S:c., in the City of London, chartered accountant, be
appointed special manager of the estate and business of the sd coy
until tlie peton in this matter shall be heard and disposed of, or a liqr
of the sd coy be duly appointed thereunder, or until further order, on
his giving security to the satisfaction of the Board of Trade, and that
the powers and duties of the sd special manager be limited to carrying
on under the supervision and control of the off recr or liqr, so far as
may be requisite to give effect to existing contracts and sales, of the
timber business and taking possession of the goods, moneys, and docu-
ments of the coy ; and it is ordered that the remuneration of the sd
special manager be fixed after the duties of the special manager shall
have ceased ; and it is ordered that the sd special manager do pay over
to the off recr all moneys belonging to the estate or business of the sd
coy wliich may come to his hands, of which money a statement is to be
brought in to the off recr by the sd special manager weekly; any moneys
required for current expenditure and disbursements are to be pd out
of moneys to be provided from time to time by the off recr, not exceed-
ing the amount so pd in by t]io special manager as afsd, and available
for such purjjoso, and an account of such expenditure, together with



SPECIAL MANAGER. 100

the voucliers, is to be delivered weekly to the off recr ; and it is ordered
that the accounts of the sd special manager be verified by afft as and
when required by the off recr. Simson and Mason, Limtd, Keko-
wich, J., 30 Jan. 1891.



Upon the applicon by summons dated, &c., of the off recr and prov lirxr Form 98.
of the above-named coy, and upon hearing the solors for the applicant, for ^^^^j^^j,
the coy, and for S., the petr named in the peton preferred unto this Ct
the 5th Dec. 1892, and upon reading the order dated the 10th Dec.
1892, and the report of the off recr dated, &c., the Ct doth hereby
appoint N. of, &c., special manager, with power to carry on the busi-
ness of the sd coy as from the 10th Dec. 1892, and to pay current
expenses out of any moneys in his hands, and out of any moneys to be
reed by him, the remuneration of the sd N. to be the same as he had
hitherto reed from the sd coy ; and it is ordered that the sd N. do
within twenty-one days give secy to the satisfaction of the Board of
Trade ; and it is ordered that the sd N. do account to the off recr as
and when directed by him. Queen Anne's, &,'c. Mansions, Limtd, 00179
of 1892, l4thDec. 1892.



Upon, &c., the Ct doth hereby appoint T. F. A. special manager Form 98a.
of the business of the sd coy until the hearing of the sd petition, or
until further order, the sd T. F. A. to be at liberty to sell the ppty
and assets of the sd coy ; and it is ordered that the sd T. F. A. do
within fourteen days give security to the Board of Trade, pursuant to
the Cos Winding-up Rules, 1890 ; and it is ordered that the sd
T. F. A. do account to the off recr as and when directed by him ; and
the question as to the remuneration of the sd T. F. A. is adjourned.
Liberty to apply. London Co-operative Supply Stores, 007 of 1893,
20 Jan. 1893.



Another.



Upon the applicon of the oft' recr and liqr, and upon reading his Form 98b.

report dated the day of , 189 — , that the nature of the estate Qp^g^-^i fQpj^

and business of the coy requires the appointment of a special manager of order
of the estate and business of the coy other than himself, it is hby

ordered that , of , be appointed special manager of the estate

and business of the sd coy until , on his giving security to the

satisfaction of the Board of Trade. And it is further ordered that the

remuneration of the sd special manager be . And it is further

ordered that the sd special manager shall, unless otherwise directed by
the Ct, act under the directions of the oft' recr, and shall pay over to
the off recr all moneys belonging to the estate or business of the sd



no AVINDING-UP BY THE COURT. [ChAP. XI.

coy "svliicli may come to his hands, of which moneys a statement shall
be brought in to the o££ recr by the sd special manager weekly, and
that any moneys which may be required for current expenditure and
disbursements shall be pd out of moneys to be provided from time to
time by the off recr, not exceeding the amount so pd in by the special
manager as afsd and available for such j:»urpose, and an account of such
exi^enditure, together with the vouchers, shall be delivered weekly to the
off recr. And it is further ordered that the accounts of the sd special
manager shall be verified by afft as and when required by the off recr.
Dated this day of , 189 — .

Security and Account.

Rr. 67 and 68 of 1890, apply botli to special managers and liquidators (other than
the official receiver). They point out to whom, how, and at whose cost, the
security is to be given, and what is to be done in case of failure to give or keep up
the required security, and are printed in extenso in Chap. XIX.

The form of certificate of the Board of Trade that security has been given will be
found in the same Chapter.

R. 172 of 1890. — Every special manager shall account to the official receiver, and
such special manager's accounts shall be verified by affidavit, and, when approved
by the official receiver, the totals of the receipts and payments shall be added to the
official receiver's accounts.

Form 99. {Title.)

r^., TT-, I> of , make oath and say as follows : —

Affidavit by

special 1 • The account hereunto annexed marked with the letter A, produced

manager ^j^d shown to me at the time of swearing this my afft, and purporting

account." to be my account as sj)ecial manager of the estate or business of the

Form 85 of above-named coy, contains a true account of all and every sums and

sum of money reed by me or by any other person or persons by my

order or to my knowledge or belief for my use on account or in respect

of the sd estate or business.

2. The several sums of money mentd in the sd account hereby verified
to have been pd or allowed have been actually and truly so pd and
allowed for the several pui'poses in the sd account mentd.

3, The sd account is just and true in all and every the items and
particulars therein contained, according to the best of my knowledge
and belief.

Sworn, &c.



Ill



CHAPTER XII.



EVIDENCE.



The Books, and Inspection thereof.

S. 154 of 1862. — Where auy company is being wound up, all books, accounts, and
documents of the company and of the liquidators shall, as between the contribu-
tories and the company, he prima facie evidence of the truth of all matters purport-
ing to be therein recorded.

Accordingly, it was under the old practice generally deemed expedient, in the
case of a compulsory winding-up, to put the books in evidence at an early period,
and at any rate before proceedings were taken to settle the list of contributories.
And it would seem convenient to follow this practice. The following shows the
form of affidavit commonly used : —

Formal parts : see Form 1 1 . Form 100.

1 . I was appointed liqr of the coy on tlie day of . .„, . .

2. I "believe that the books now shown to me at the time of swear- liquidator as
ing this my afft, and severally marked 1, 2, 3, &c., are resply the to books,
ledger, journal, cash-book, allotment-book, register of transfers, guard

book of transfer deeds, share-ledger, directors' minute-book, com-
mittee minute-book, certificate-book, guard book of share applicons,
book of receipts for deposits, and guard book of all letters belonging
to the sd coy.

3. The books hinbefore referred to, and marked as hinbefore mentd,
were handed to me by S. the off recr when I was appointed liqr thof.
And my belief afsd is grounded on information furnished me by the
sd off recr and the secretary and managing director of the sd coy and
on the contents of the sd books.



1. I was the secretary of the above-named coy from until the Form 101.

sd coy was ordered to be wound up on . Affid~^~b

2. The books which are produced to me, and marked resply A to secretary as
N, are the books of the sd coy, and used by the sd coy during the time *° "ooks.

it carried on business wp to the date of its being wound up as afsd,
and are resply distinguished with their marks and numbers in the
schedule to this my afft.

One column of the Schedule will be headed " Marks," and the other " Descrip-
tion of Book," a book being described, c.ff. thus — " Ledger from 1st July, 1895, to
December 31st, 1895."



112



WINDING-UP BY THE COURT. [ClIAP. XII.



Inspectio7i tinder Sect. 156 of 1862.

S. 156 of 1862.— TtTiere an order has been made for -winding up a company by
the Court, or subject to the supervision of the Court, the Court may make such
order for the inspection by the creditors and contributories of the company of its
books and papers as the Court thinks just, and any books and papers in the posses-
sion of the company may be inspected by creditors or contributories, in conformity
•n-ith the order of the Court, but not further or otherwise. See E.r parte Buchanan,
15 W. R. 99, as to calling in accountant.

This clause given in effect determines the right to inspect the registers of members

and mortgages conferred by sects. 32 and 13 of 1862. Somerset v. Land Securities

Co., W. N. (1897) 17.
Orders are frequently made under sect. 15G for the inspection of books and papers

of the company by contributories and creditors. See Credit Co., 11 CD. 256 ;

Goocli's case, ubi supra; Yorkshire Fibre Co., 9 Eq. 950 ; Imperial Land Co., "W. N.

(1882) 173; 49 L. T. 147.

But the section does not enable the Court to make orders against a person not
in possession of the documents. North Brazilian Co., 37 C. Div. 87.

A right to inspect includes the right to take copies. Nelson v. Anglo-American,
S;c. Agencij Co., (1897) 1 Ch. 130. And see forms, iiifra.

A summons is the proper form of application.



Form 102.

Order for
inspection
under
^oct. 156 of
1SG2.



Upon the applicon of B., a director and contributory, order tliat the
applicant, his solors or agents, be at liberty at all reasonable times
to inspect the books, papers, and documents of the coy, and to take
copies and abstracts thof, and extracts therefrom, as the applicant may
be advised, at his expense. And it is ordered that the sd [off] liqr do
produce such books and do act accordingly. And order that the costs of
the sd [off] liqr of this applicon be costs in the winding-up, and that the
applicant do pay to the sd [off] liqr, or his solors, the costs of such in-
spection or production. Devon and Cornivall Co., Fry, J., 16th March,
1883. A. 368.



Form 103.
Another.



Upon the applicon of H., a contributory of the above-named coy,
and upon hearing the solors for A., the liqr of sd coy, and for the
applicant, and upon reading an order dated 21st March, 1877, Order
that the sd H., his solor or agent, be at liberty at all reasonable times,
upon giving reasonable notice, to inspect and peruse at the office of

the sd A., situate at , the several books, deeds and writings of the

8d coy, and the depositions of witnesses taken in these matters, in the
possession, custody, or power of the sd W. as liqr of the sd coy,
or his Bolors or agents. And order that the sd H., his solors or
agents, be at liberty to take notes therefrom, or abstracts thof,
or extracts tlierefrom, as he may be advised, at his own expense.
And order tliat the sd W., upon reasonable notice, produce the sd
})()oks, deeds, writings, and depositions on the examination at the
ni)[ilicant'8 iustanco of any Avitnessos in these matters, and at any
hf-ariiig before tlio Ct in llu'so matters at the instance of the applicant



EVIDENCE. 113

as the sd applicant shall require. Aud order that the costs of the pro-
duction by the sd liqr of the sd books, &c., in pursuance of this order
be reserved. Planet, 8^-c. Co., Malins, V.-C, 27th June, 1878. B.
1286.

Upon the applicon by summons dated, &c. of C. H., A. L., &c. share- Form 104.
holders in the above-named coy, and upon hearing the solors for the Another order
aj)plicants, and G. S. B., the off recr and liqr of the above-named coy to inspect,
appearing in person, and upon reading the order to wind up the sd
coy dated, &c., It is ordered that the sd Q-. S. B. do at all reasonable
times, upon reasonable notice, produce to the appKcants or to their
solors, at the office of the Off Eecr in Companies Liquidation, situate at
33, Carey Street, Lincoln's Inn, all books and documents in his posses-
sion or power relating to the above-named coy prior to the date of the
winding-up order herein. And it is ordered that the applicants and
their solors be at liberty to inspect and peruse the documents so pro-
duced and to take copies and abstracts thof, and extracts therefrom,
as the applicants may be advised, at their own expense. Stamp
Distribution {Parent) Co. (0044 of 1895). Hope, Eeg., 4th May, 1896.
See Mutual Society, 22 C. D. 714.

Upon the applicon of A. E., liqr appointed, &c., Order that the Form 105.
Birmingham Banking Coy do produce to the said A. E., at the Oi-der on bank
j^remises of the bank, all books, papers, writings, or other documents to permit
in their custody or possession, relating to the Birmingham Brewery conananv^s°^
Coy, and particularly the several books containing entries of moneys books, &c.
paid into the sd bank by the above coy, or by the late liqrs thof, or
either of them, to any credit on account of the above coy, or of the
liqrs thof, or of moneys paid out by the sd bank to the order of the
directors of the sd coy, or of the sd late liqrs, or either of them, on
such account, out of such credit. And order that A. E., on pajTnent of
costs of inspection, be at liberty to inspect, at the premises of the
bank, all such books, &c., and to take copies of, and extracts from, all
such entries as he may be advised. Birmingham Brewery Co., Kay, J.,
12th Nov. 1883. A. 1903.

Inspection of File of Proceedings.

R. 11 of Ap. 1892. — All petitions, affidavits, summonses, orders, proofs, notices, High Court,
depositions, bills of costs, and other proceedings in the High Coui-t in a winding-up
matter to which these rules apply shall be kept and remain of record in. the office of
the registrar in one continuous file, and no proceeding in any winding-up matter to
which these rules apply shall, from and after the commencement of these ndcs, be
filed in the Central Office.

As to the file of proceedings retained in the Chancery Division under R. 1 of April, (Retained
1892, and inspecting and taking copies thereof, see E. 146 of 1890. cases.)

P, I



114



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



Other Coiirts.



Who may

inspect.



Restriction on
inspection.



B. 31 of Ap. 1892. — In Courts other than the High Court a file of proceedings in
every winding-up matter shall be kept on which all petitions, affidavits, summonses,
orders, proofs, notices, depositions, and other proceedings in the matter shall be
placed and remain of record as far as possible in continuous order.

E. 32 of Ap. 1892. — Eveiy person who has been a director or officer of a company
which is being wound up, and every duly authorized officer of the Board of Trade,
shall be entitled, free of charge, and every contributory and every creditor. whose
claim or proof has been admitted, shall be entitled on payment of a fee of one
shilling, at all reasonable times, to inspect the file of proceedings (whether in the
High Court or any other Court), and to take copies or extracts from any documents
therein, or to be furnished with such copies or extracts at a rate not exceeding
fourpence per folio of seventy-two words.

E. 1 of 26 Nov. 1895. — Notwithstanding anything contained in the Companies
(Winding-Up) Rules, 1890 — 1892, the notes of the depositions of a person examined
under sect. 115 of the Companies Act, 1862, or under any order of the Court before
the Court, or before any officer of the Court, or person appointed to take such an
examination (other than the notes of the depositions of a person examined at a
public examination Tinder sect. 8 of the Companies (Winding-Up) Act, 1890), shall
not be placed on the file of proceedings, or be open to the inspection of any creditor,
contributory, or other person, except the official receiver or liquidator, unless and
until the Coui't shall so dii'ect, and the Coiu-t may from time to time give such
general or special directions as it shall think expedient as to the custody and inspec-
tion of such notes, and the furnishing of copies of or of extracts therefrom.

The above rule was adopted in consequence of the decision in Standard Gold
Mining Co., (1895) 2 Ch, 545.



Form 106.

Summons for
affidavit of
documents
and inspec-
tion.



Discovery arid Inspection generally.

On tlie part of the [off] liqr of the above-named coy that A. B., who
claims to be a creditor [or C. D., a contributory] of the sd coy, may
be ordered within (seven) days after service to make and file a full and
sufficient afft stating whether he has or has had in his possession or
power any, and if any what, documents relating to the matters in
question in the summons in these matters dated, &c., and accounting
for the same. And that the sd A. B. [or as the case may le'] may be
ordered at all reasonable times, upon reasonable notice, to produce at

the office of Mr. , his solor, situate at, &c., the documents which

by such afft shall appear to be in his possession or power, except such
of the same (if any) as he may by such afft object to produce. And
that the applicant, his solors and agents, may be at liberty to inspect
and peruse the documents so produced, and to take copies and abstracts
thof, and extracts therefrom, as the applicant shall be advised, at his
expense ; and that the sd documents may be produced upon any
examination of witnesses in these matters and at the hearing of the
ed summons, as the applicant shall require. And that the applicant
may bo at liberty to make sucli further applicon as to aU or any of the
documents montd in such afTt as ho may be advised.

Ah to tho application of the general practice " whoro no other provision is mado
by tho Acts or those rules," see R. 178 of 1890.



EVIDENCE. 1 15

Where proceedings are pending in the •winding-up between tlie liquidator therein,
and any alleged contributory or debtor or any claimant, dipcoveiy and inspection
of documcntH is usually ordered on the application of either party. To obtain
discovery and inspection a summons should be taken out as above. See further as
to the practice, Scton, 45 — 87; Daniel's Forms, pp. 799 et scq.; Ann. Pr. 1897,
p. G16, Ord. XXXI. An atfidavit in suppoi-t of the summons is not generally
requisite. The order foUows the terms of the summons. See infra.

As to deposit before application for discovery, see Ord. XXXI. r. 26.



Upon the applicon of A., B., and C, resply contributories of the Form 107.
above-named coy, and upon hearing the solors for the apphcants and ~r~ ~
for the [off] liqr of coy, Order that S., the off Hqr of sd coy, do within affidavit and



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