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

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of this Act, and may dismiss any person so appointed. [See Board of Trade Orders
under this section, Appendix. Originally only one official receiver was attached to
the High Court of Justice, but in 1893 two others were appomted. There are now
only two.]

(2.) The Board of Trade, with the concurrence of the Treasury, shall direct
whether any and what remuneration is to bo allowed to any officer of, or person
attached to, tlio Board of Trade, performing any duties under this Act, and may
vary, increase, or diminish such remuneration as they may think fit.



OFFICIAL RECEIVERS. 141

(3.) The Lord Chancellor, with the concurrence of the Treasury, shall direct
whether any and what remuneration is to be allowed to any person (other than an
officer of the Board of Trade) performing any duties {e.g., as provisional liquidator
or as official receiver and liquidator'] under this Act, and may vary, increase or diminish
such remuneration as he may think fit.

R. 2 of 1890. — In these Rules, unless the context or subject-matter otherwise Meaning of
requires, . . . "official receiver" includes any officer appointed by the Board of "official
Trade to discharge the duties of official receiver under the Acts. . . "Liquidator" ^*^^^^^^-
includes an official receiver when acting as liqmdator.

Er. 161—170 of 1890 are as follows : —

161.— (1.) Wlien a liquidator is appointed by the Court, the official receiver shall Official re-
forthwith put the liquidator into possession of all property of the company of which receiver to
the official receiver may have custody; provided that such liquidator shall have, g^i^'o posses-
before the assets are handed over to him by the official receiver, discharged any licjui(Jator
balance due to the official receiver on account of fees, costs and charges properly
incurred by him, and on account of any advances properly made by him in respect
of the company, together with interest on such advances at the rate of four pounds
per centum per annum ; and the liquidator shall pay all fees, costs, and charges of Fees.
the official receiver which may not have been discharged by the liquidator before
being put into possession of the property of the company, and whether incurred
before or after he has been put into possession.

(2.) The official receiver shall be deemed to have a lien upon the company's Lien.
assets until such balance shall have been paid, and the other liabilities shall have
been discharged.

(3.) It shall be the duty of the official receiver, if so requested by the liquidator, Infonnation.
to communicate to the liquidator all such information respecting the estate and
affairs of the company as may be necessary or conducive to the duties of the liqui-
dator. [Compare s. 4 (3) of 1890.]

R. 163 of 1890. — (1.) Judicial notice shall be taken of the appointment of the Deputy offi-
official receivers appointed by the Board of Trade. cial receiver.

(2.) When the Board of Trade appoints any officer to act as deputy for or in the
place of an official receiver, notice thereof shall be given by letter to the Court to
which such official receiver is or was attached. The letter shall specify the dura-
tion of such acting appointment.

(3.) Any person so appointed shall, during his tenure of office, have all the status,
rights, and powers, and be subject to all the liabilities of an official receiver.

For order of the Board of Trade appointing official receiver in the High Court, List of official
the two Palatine Courts, the Stannaries Court, and the County Coiu'ts, see Order receivers,
of 1st Jan. 1891, in the Appendix, where also is the list of such official receivers,
with their addresses, &c. See also Stannaries Court (Abolition) Act, 1896.

See also the Order of the Board of Trade of 16th Sept. 1892 (in Appendix), ap-
pointing official receivers for the purposes of the Building Societies Act, 1874, and
the Industrial and Provident Societies Act, 1876.

163. — Where an official receiver is removed from his office by the Board of Trade, Notice of
notice of the order removing him shall be communicated by letter to the Court to removal,
which the official receiver was attached.

164. — The Board of Trade may, by general or special directions, determine what Board of
acts or duties of the official receiver in relation to the winding-up of companies are Trade may
to be performed by him in person, and in what cases he may discharge his functions |^PPortion
through the agency of his clerks or other persons in his regular employ, or imder
his official control.

165. — An assistant official receiver, appointed by the Board of Trade, shall be an Official
officer of the Court, lihe the official receiver to ichom he is assiitaut, and, subject I'eceiver la



142



WINDING-UP BY THE COUET. [ChAP. XV.



officer of
the Court.



Persons who
may act in
absence of
official
receiver.

Company

Avithout

assets.

Accoimts.



Acting as
committee.



Appeals.



Provisional
liquidator.



When
■winding-up
order made.



Notice of
order.



to the directions of the Board of Trade, he may represent the official receiver in all
proceedings in Court, or in any administrative or other matter. Judicial notice
shall be taken of the appointment of an assistant official receiver, and he may be
removed in the same manner as is provided in the case of an official receiver.

[As to the official receivers themselves beingofficersof theCourt, seeW. N. (1894) 44.]

166. — In the absence of the official receiver, any officer of the Board of Trade duly
authorized for the purpose by the Board of Trade, and any clerk of the official
receiver duly authorized by him in writing, may by leave of the Court act on behalf
of the official receiver, and take part for him in any public or other examination and
in any unopposed application to the Court.

167. — Where a company against whom a winding-up order has been made has no
available assets, the official receiver shall not be required to incur any expense in
relation to the winding-up without the express directions of the Board of Trade.

168.— (1.) Where a liqmdator is appointed by the Court, the official receiver shall
account to the liquidator.

(2.) If the liquidator is dissatisfied with the account or any part thereof, he may
report the matter to the Board of Trade, who shall take such action (if any) thereon
as it may deem expedient.

(3.) The provisions of these rules as to liquidators and their accounts shall not
apply to the official receiver when he is liquidator, but he shall account in such
manner as the Board of Trade may from time to time direct.

169. — When there is no committee of inspection any functions of the committee of
inspection which devolve on the Board of Trade may, subject to the directions of the
Board, be exercised by the official receiver.

170. — An appeal in the High Court against a decision of the Board of Trade, or
any appeal to the Court from an act or decision of the official receiver, shall be
brought within twenty-one days from the time when the decision or act appealed
against is done, j)ronounced, or made.

First Intervention of Official Receiver.

Unless the official receiver has been appointed interim provisional liquidator (see
Chap. X.), he first becomes concerned in a winding-up " on an order being- made by
the Court for the winding-up of [the] company." Sect. 4 (1) of 1890, supra, p. 96.
Upon the making of that order he becomes, " by virtue of his office," provisional
liquidator of the company, and he is to continue to act as such until he or another
person becomes Ucxuidator, and is capable of acting as such. Sect. 4 (1) of 1890.

In cases in the High Court the Board of Trade nominates one of the official re-
ceivers to act, the two names being generally taken in rotation. See Form 76b.

It would seem that the order is "made" when it is pronounced (see R. S. C,
0. LII. r. 13), which provides that every order if and when drawn up shall be
dated the day when the same was made . . . and shall take effect accordingly.
Referring to the old rule in similar terms of the Court of Chancery, Lord Wostbury,
L. C, said in lihca Coal Co. (10 W. E. 701), that "this rule is in conformity with
the whole theory of judicial procedure, which is that the binding effect of the order
begins from the time the order is pronounced by the lips of the judge ....
that is, when it is made." United 'Telephone v. Dale, 25 C. D. 778; Holtby y,
UoihjHon, 24 Q. B. D. 103.

But no doubt the order should be drawn uji with all convenient speed, and if the
petitioner does not comply with E. 23 of April, 1892 {supra, p. 88), the registrar
may proceed to draw up the order at once under E. 24 of April, 1892 {supra, p. 88).

The same day that a winding-up is "pronounced in Court ^' the official receiver
receives notice of the fact from the registrar. E. 22 of April, 1892, j). 87.

Notification of the order having been iironounccd is quickly followed by the receipt



OFFICIAL RECEIVERS. 143

of two of the tlirco sealed copies of tlio winding-ui3 order, wliicli tliG registrar was Copies of
required to send to the official receiver by R. 39 of 1890. The original order is now ^^'^^^S-
kept by the registrar and placed on the file.

Of the two orders so received, one is for service by the official receiver on the
company (R. 41 of 1890), and for subsequent filing with' the Registrar of Joint
Stock Companies (sect. 88 of 1862) ; the other is for the official receiver's own use,
and as a voucher for his authority.

Another sealed copy is handed to the petitioner's solicitor.

The notices required to be sent by the official receiver to the Board of Trade and Advertise-
to the local newspaper have already been referred to in detail. See Chap. IX., nient, &c.
which also contains a statement of the official receiver's initial duties with reference
to service, advertisement, and notices of the order.

Powers and Duties as ex officio Provisiotial Liquidator.

The powers and duties of the official receiver as provisional liquidator are not
limited or restricted by the Act or the Rules ; but under sect. 12 (3) of 1890, the
exercise of his powers may be controlled by the Court. See also sects. 23 and
24 of 1890. Accordinglj'-, unless the Court otherwise directs, the official receiver,
as ex officio provisional liquidator, may exercise all the powers of a liquidator.

Thus he is a liquidator within sect. 12 of 1890 ; but there being no committee of Sanction
inspection, those things which the liquidator may do with the sanction of the Court, ^^quired.
or of the committee of inspection, he may do with the sanction of the Court or of
the Board of Trade. Sect. 9 (9) of 1890 ; R. 1G9 of 1890. See also sect. 13 of 1890,
and Rr. 47—57 of 1890, as to calling meetings ; Rr. 83, 88—90 of 1890, as to
settling list of contributories ; Rr. 92, 95, as to calls. That the official receiver
acting as ex officio liquidator may settle the list of contributories was held by
Chitty, J., English Bank of liivcr Flate, (1892) 1 Ch. 391.

See, further, as to the powers and duties of the official receiver acting as liqui- Special
dator, Chap. XXI., and in particular as to the following matters : — Board of Trade, "-^^i^s, &c.
returns to ; Books to be kept ; Borrowing ; Calls ; Carrying on business ; Collec-
tion of assets ; Compromises; Contracts and conveyances; Contributories, settlino-
list ; Creditors. See also as to Debentures and securities. Chap. XXXVIII. ;
Examinations, Chap. XXI. ; Landlords, Chap. XXI. ; Meetings, Chap. XXXVI. ;
Misfeasance, Chap. XXI. ; Paying money into bank, Chap. XXV. ; Possession, as
to taking. Chap. XXI. ; Rates and taxes. Chap. XXXVII. ; Restraining actions
and proceedings. Chap. XXI. ; Sales of property, Chap. XXIX. ; Settling list of
contributories, Chap. XXI. ; Solicitor, Chap. XX. ; Special manager, Chap. XL ;
Transfer of actions, Chap. XLII.

As to the official receiver allowing proceedings to be taken in his name, see
practice note, W. N. (1894) 166 ; Anglo- Sardinian Antimony Co., W. N. (1894)
156. And as to when the sanction of the Court to proceedings is required, see
Neiv Zealand Loan, ^-c. Co., W. N. (1894) 92.

Duties as Official Eeceivee.

It must not be supposed that while attending to the above-mentioned matters Depaiimental
there are not other duties to be performed by the official receiver as such. He is instructions,
supplied by the Board of Trade with a number of printed forms, and with certaia
departmental instructions which are of a private nature. These instructions cannot,
however, override the provisions of the Acts and Rules, and it may therefore be
convenient to state or refer to such of these provisions as particularly relate to
the office of official receiver.



144



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



Company
■wdthout

assets.



Incurring Expense.
Where there is reason to suppose that a company ordered to be wound up has no
available assets, the official receiver should at once lay the facts before the Board of
Trade, and apply for its special instructions. See R. 167 of 1890, supra.



Books.

Entries and Sect. 21 of 1890 provides generally for liquidators keeping "in manner pre-

inspection. scribed" proper books, making proper entries therein, and affording inspection
thereof.

Record book. R- 143 of 1890. — The official receiver, until a liquidator is appointed by the
Court, and thereafter the liquidator, shall keep a book to be called the "record
book," in which he shall record all minutes, all proceedings had and resolutions
passed at any meeting of creditors or contributories, or of the committee of inspec-
tion, and all such matters as may be necessary to give a correct view of his
administration of the company's affairs, but he shall not be bound to insert in the
"record book" any document of a confidential nature (such as the opinion of
counsel on any matter affecting the interest of the creditors or contributories) , nor
need he exhibit such document to any person other than a member of the committee
of inspection.

Cash book. R. 144 of 1890. — (1) The official receiver, until a liquidator is appointed by the

Court, and thereafter the liquidator [which includes the official receiver if continued
as liquidator], shall keep a book to be called the "cash book" (which shall be in
such form as the Board of Trade may from time to time direct), in which he shall
(subject to the provisions of these rules as to trading accounts) enter from day to
day the receipts and payments made by him.

(2) The liquidator shall submit the record book and cash book, together with any
other requisite books and vouchers, to the committee of inspection (if any), when
required, and not less than once every three months.

The "trading account" is to be kept where the business of the company is
carried on. See R. 137 of 1890, and siipra.

The cash book prescribed by the Board of Trade is a most elaborate volume. As
to which, see Chap. XXIV.

Other books. Besides the above-mentioned books the official receiver may find it advisable to

keep a diary or minute book, containing notes of his transactions and negotiations
in relation to the winding-up cases proceeding under his care.

He should also keep books showing the dates at which all notices to share-
holders and others are sent out and posted, and by whom they are posted, and such
last-mentioned persons should initial the entries or the summary thereof, so that if
it becomes necessary to make an affidavit as to the service of any notice or cu-cular,
the person who directed the notice and posted it may be able to swear to the facts
after refreshing his memory by referring to the book.



Submission to
committee.



Returns.
The official receivers being "officers of the Court" (see R. 1G5), must "make and
transmit to the Board of Trade such extracts from their books, and shall furnish
the Board of Trade with such information and returns as the Board of Trade may
from tiiae to time require." R. 151.



File of Proceedings.
Tlie official receiver, except in retained cases (as to which see R. 145 of 1890 and
ll. 1 of Ai)ril, 18D2), no longer keeps the file of proceedings, which is now kept by



OFFICIAL RECEIVERS. 145

the registrar ; but when, in the exercise of hi.M functions under the Acts or Rules,
the official receiver requires "to inspect or use the file of proceedings in any matter,
the registrar shall (unless the file is at the time required for use in Court or by
him), on request, transmit the file of proceedings" to him. R. 33 of April, 1892.



Memoranda of Advertisements .

The liquidator must file a memorandum of every advertisement appearing in the Filing.
Gazette, and the person inserting any advertisement in a local paper must leave one
copy of such local paper with the official receiver, who must keep such copy, and
place on the file a memorandum of such advertisement. R. 147 of 1890.



Statement of Affairs.

It is no longer absolutely necessary that the statement of affairs should be pre- Notices to
pared before the first meetings of creditors and contributories are held. (See next submit,
page.) Nevertheless, as soon as possible after the making of the winding-up order
the ofiicial receiver must give notice to the directors or other persons mentioned in
sect. 7 (2) of 1890, as in Form 146, or the form referred to in the notes thereto
(see Chap. XVI.), to submit or concur in a statement of affairs. R. 58 (1) of 1890.
He must also hold personal interviews with such persons for the purpose of investi-
gating the company's aff'airs (R. 58 (2)), and must see that such statement in
duplicate is submitted (one copy being duly verified) within fourteen days from the
date of the winding-up order, or such extended lime as he or the Court may appoint. Extension
Sect. 7 of 1890 ; R. 58 of 1890. Extensions of time by the certificate of the official of time,
receiver are very common. See Form 14 7. In case of refusal to submit a state-
ment of affairs, or otherwise comply with sect. 7 of 1890, the official receiver must
report such non-compliance to the Court, and should obtain an order (see Form 148)
on the persons in default to make or submit the statement.

He must place the verified statement on the file of proceedings (R. 58), and must F il i n g, &o.
sanction and pay the costs and expenses of preparing and making the statement of
affairs.

After the statement of affairs has been filed he must question the persons who
made it with a view to obtaining further information (R. 60) ; afford inspection of
the statement to creditors and contributories (sect. 7 (6)) ; and apply for punish-
ment of persons improperly obtaining such inspection. Sect. 7 (6).

A summary of the statement of affairs must also be prepared, and is generally Summaiy.
printed, as it has to be forwarded to each creditor, if possible, before the first
meeting. Sched. I. r. 3 to Act of 1890. The summary, if ready, is generally
forwarded with the notice of meeting and forms of proxy, as to which see infra.

For the forma and further information in relation to Statement of Affairs, see
Chap. XVI.



Preliminary Report to Court.

"As soon as practicable after receipt of the statement of affairs" the official
receiver must submit a preliminary report to the Court setting out the matters
mentioned in sect. 8 (1) of 1890, with his opinion thereon. (See R. 69 of
1890.) This report may conveniently be prepared when the svunmary of the state-
ment of affaii's is prepared for transmission to the creditors and contributories, or at
any rate after the interviews mentioned in R. 60. See Form 152.

r. L



146



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



The Further B.ej}ort.
This is to be made under sect. 8 (2) of 1890, and it is upon consideration of this
report that the Court may make an order for public examination imder sect. 8 (3)
of 1890. Ex parte Barnes, (1896) A. C. 146.



Purposes of
meetings.



When held.



Notices.



Proxies.



Special ar-
rangements.



Summo7iing First Meetings of Creditors and Contribntories.

It is now one of the official receiver's earliest duties to sixmmon the first meetings
of creditors and contributories to determine whether the appointment of a liquidator
in place of the official receiver and a committee of inspection shall be applied for,
and who shall be members of such committee. Sect. 6 (1) of 1890.

The time and a convenient place of meeting are fixed by the official receiver.
Sched. I. to Act of 1890, r. 4 ; E. 44 of 1890.

If possible, the meetings are to be held within twenty- one days from the winding-
up order, or, if a special manager has been appointed, within a month (Sched. I.,
r. 1) ; but it is not now necessary to delay the holding of the meetings until the
statement of affairs has been submitted to the official receiver. See E. 1 of April 2,
1895, annulling R. 45 of 1890.

The meetings are summoned by the official receiver sending notices to the creditors
and contributories, and advertising (through the Board of Trade) the time and
place for holding the meetings. Sched. I., r. 2 ; Er. 44, 46 of 1890.

The official receiver also gives notice to the directors and other officers of the
company, who may also be reqiiired by him to attend. R. 43 of 1890. And see
Form 156.

With the notices to creditors and contributories the official receiver must send
forms of general and special proxy (taking care that no name is printed or inserted
in the body thereof) (Sched. I., r. 14), and, if it is ready, a print of the summary of
the company's statement of affairs. See supra.

For the notices, see Forms 154, 155 ; for the proxies, Forms 158 and 159 ; and
for the summary, Form 151.

And see generally, as to First Meetings, Chap. XVII.

In ordinary cases the first meetings are held, at any rate in London, at the official
receiver's office, but when a large company, having many creditors or contributories,
has been ordered to be wound up, it is necessary to hire some large room capable
of accommodating a large number of people. For instance, in the recent case of the
Liberator Benefit Building Society, there were probably over 2,000 persons present
at the first meeting of creditors, and the room specially selected for their accommo-
dation not being larg'e enough, an overflow meeting was held. With the notices of
meeting, &c., a ticket of admission was sent, on which the creditor was required to
state the amount of his debt. Before entering the room, this ticket was exchanged
for voting papers (see Forms 167 and 168), which were distributed by clerks at
a number of tables, each clerk undertaking the distribution of papers to creditors
wlioso names camo under certain letters of the alphabet, as A to C, D to G, &c.

Special tickets were also issued for the admission of directors, members of the
press, &c., and the doors were kept by a large staff of attendants.

As there was an overwhelming majority in favour of the resolutions put to the
meeting, the sufficiency of the arrangements for taking a poll was not put to the
test, but the Avi-itor was struck with the excellence of the arrangements so far as
they camo under his notice.

Receiving Proofs and Proxies before the First Meetings.
Before the first meetings are held the official receiver must receive such proof of
debts as are required to be lodged with him in order to qualify a creditor for voting



OFFICIAL RECEIVERS. 1-47

at tho first meeting (Sched. I., r. G ; R. 108 of 1890), and must admiuiHter the
oath to creditors who bring him affidavits of proof for that purpose (Ord. of Dec. 3,
1892). He must also receive such proxies as are required to be so lodged by creditors
or contributorics to entitle them to vote by proxy. Sched. I., rr. 12, 17 ; R. 123 (1)
of 1890 ; R. 30 of April, 1892.

He should also consider whether the proofs sent in are in proper form, having
regard to Sched. I., rr. 7 — 9, and rr. 96 — 108 of 1890, in order that he may fulfil
his duties as to admitting or rejecting proofs at the meeting under Sched. I., r. 11.

He should also consider whether the proxies are valid, having regard to Sched. I.,
rr. 12, 13, 15—17; R. 123 (1) of 1890; R. 30 of 1892; Ord. of Board of Trade,
Jan. 1892 ; R. 123 (2) and R. 125 of 1890. See, further. Chap. XXXVII.

Nominating Persons to act as Chairmen and use Official Receiver's

Proxies.

He must also consider what course he intends to pursue in acting on proxies given
to himself (Sched. I., r. 19) ; and when there is no probability of his being able to
attend the meeting he must in writing depute some person under his official control



Online LibraryFrancis Beaufort PalmerCompany precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) → online text (page 25 of 134)