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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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managing director, Mr. X., who really worked the business.

No ftrther Inquiry. — The off recr is of opinion that no further
inquiry is desii'able into matters connected with the promotion and
formation of the coy, and conduct of its business.

\_This clause will be varied lolien it is probable that an inqxdry %oill
he necessary .'\

Dated this day of , 189—. S., Off Recr.

Sect. 8 (1) of 1890. — Where the Court has made an order for winding-up a
company, the official receiver shall, as soon as practicable after receipt of the state-
ment of the company's affairs, submit a preliminary report to the Court : —

(a) As to the amoimt of capital issued, subscribed, and paid up, and the estimated

amount of assets and liabilities ; and

(b) If the company has failed, as to the causes of the failure ; and

(c) Whether, in his opinion, further inquiiy is desirable as to any matter

relathig to the promotion, formation or failiu-e of the company, or the
conduct of the business thereof.

For the rest of the section, as to pvxblic examination, see Chap. XLIV.

An order for public examination cannot be made on the preliminary report ; it is
made on the further reiJort under sect. 8 (2). Great Kruger Co., (1892) 3 Ch. 307 ;
Bx parte Bar)ics, (1896) A. C. 146.

E. 69 of 1890.— A report made by the official receiver pursuant to sect. 8 of the
Companies (Winding-up) Act, 1890, shall state in a narrative form the facts and
matters which the official receiver desii'es to bring to the notice of the Coiu't, and
his opinion as required by sect. 8 of the Companies (Winding-up) Act, 1890.

It is not the practice to apply for a day for consideration of the preliminary
report, or to attend the consideration of any report under Er. 70 and 71 of 1890,
except a further report preliminary to a public examination, as to which see
Chap. XlilV.



172



WINDING-UP BY THE COUKT. [ChAP. XVII.



CHAPTEE XVII.



FIRST MEETINGS OF CREDITORS AND CONTRIBUTORIES.



First meet-
ings.



Orders
tliereou.



Effect of no
order.



New rule.



Timo for
lioldiiif^ firttt
meeting.



It is no longer necessary to delay tlie holding of the first meetings until the
statement of affairs has been submitted to the oflicial receiver, R. 45 of 1890
{infra, p. 176) having been anniUled by E.. 1 of AprU 2, 1895.

Sect. 6 of 1890. — (1.) When the Court has made an order for winding up a com-
pany, the official receiver shall summon separate meetings of the creditors and
contributories of the company for the purpose of —

(«) Determining whether or not an application is to be made to the Court for
appointing a hquidator in the place of the official receiver ; and

[h] Determining whether or not an api^lication is to be made to the Court for the
appointment of a committee of inspection to act with the liquidator, and
who are to be the members of such committee if appointed.

The Court may make any appointment and order required to give efPect to any
such determination, and if there is a difference between the determinations of the
meetings of the creditors and contributories in respect of any of the matters men-
tioned in the foregoing provisions, the Court shall decide the difference and make
such order thereon as the Court may think fit.

(2.) The provisions of the first schedule to this Act shall, subject to such modifi-
cations as may be made therein by general rules, apply to any meeting summoned
in pursuance of this section.

(3.) In case a liciuidator is not appointed by the Court, the official receiver shall
be the liquidator of the company.

"The determination of the two meetings." On these words Chitty, J., held in
Johannisbcrg Gold, ^-c. Co., (1892) 1 Ch. 583, that having regard to sub-sect. 2 of
Rule G3 of 1890, the Coiu't had a discretion to exercise, unless at any rate all the
creditors and all the contributories at each meeting were unanimous. But see now
the following rule : —

R. 2 of April, 1895.— Sub-sect. 2 of Rvde 63 of the Companies (Winding-up)
Rules, 1890, is hereby annulled, and instead thereof the following rule, which may
be cited as Rule 63 (2ff), shall have effect : —

Upon the result of the meetings of ci'cditors and contributories being reported to
the Court, the Court may, if the meeting of creditors and the meeting of contribu-
tories have each passed the same resolutions, or if the resolutions passed at the two
meetings are identical in effect, upon the application of the official receiver, forth-
with make the apiiointmcnts necessary for giving effect to such resolutions. In
any other case the Coiu't shall, on the application by the official receiver, fix a day
for considering the resolutions and detei'minations of the meetings, deciding differ-
ences (if any), and nialdng such appointments and orders as shall be necessary.

Sched. I. to Act of 1890 appears to apply only to the first meetings of creditors
and contributories (sec sect. 2 (6), supra), and is as foUows : —

(1 .) The meetings of creditors and contributories shall bo held within twenty-one
days after the date of the winding-up order, or within such further time as the



FIRST MEETINGS OF CREDITOES AND CONTRIBUTORIES. 173

Court may fippi'ovc, unless a (special manaf^er has hoen appointed, in which case
such meetings shall be held -within ono month from the date of such order, or within
such further time as aforesaid.

(2.) The official receiver of the company shall summon the meeting by giving not How sura-
less than seven days' notice of the time and place thereof in the London Gazette and inonea.
in a local paper. Notice of such meeting shall also be sent by post to every person
appearing by the company's books to be a creditor of the company and to every
member of the company.

A notice is also very commonly inserted in the advertisement of the winding-up
order, thus : —

Notice is also hereby given that the first meeting of creditors will be held at Notice in
33, Carey Street, Lincoln's Inn, London, W.C, on the 21st day of July, 1892, at ^^J,^.^"^""^
11 o'clock, and the first meeting of contributories will be held at the same place on
the same day, at 12 o'clock.

(3.) The official receiver shall also, as soon as practicable, send to each creditor Summary of
mentioned in the company's statement of affairs, and to each person appearing from statement of
the company's books, or otherwise, to be a contributory of the company, a summary
of the company's statement of affairs, including the causes of its failure, and any
observations thereon which the official receiver may think fit to make ; bat the pro-
ceedings at any such meeting shall not be invalidated by reason of any summary
or notice required by these rules not having been sent or received before the
meeting.

(4.) The meeting shall be held at such place as is, in the opinion of the official Where meet-
receiver, most convenient for the majority of the creditors and contributories. [In •■'
London the place selected is usually the office of the official receiver, 33, Carey
Street, Lincoln's Inn, W.C.]

(5.) The official receiver, or some person nominated by him, shall be the chairman Chairman,
at the meetings. See Form 162, infra.

(6.) A person shall not be entitled to vote as a creditor unless he has duly proved Proof of debt.
a debt to be due to him from the company, and the proof has been duly lodged
before the time appointed for the meeting.

As to the mode of proving, see Chap. XXXVII.

(7.) A creditor shall not vote in respect of any unliquidated or contingent debt,
or any debt the value of which is not ascertained.

In Ex parte Ruffle, 8 Ch. 1001, Mellish, L. J., was of opinion that similar words Contingent
in the Bankiaiptcy Act, 1869, were to be construed thus: "a contingent debt" debt,
refers to a case where there is a doubt if there will be any debt at all ; a debt " the
value of which is not ascertained," means a debt the amount of which cannot bo
estimated until the happening of some future event ; and an "unliquidated debt "
means not only aU cases of damages to be ascertained by a jury, but, beyond that,
extends to any debt which the creditor fairly admits that he cannot state the

amount. But if a creditor can swear that a sum of 1, at least is due to him, he

may be allowed to vote accordingly. It is not enough for the creditor to swear
that he "estimates" the amount due at a particular figure. He must swear that
at least some certain sum is due. Per Meilish, L. J., ubi supra, p. 1000.

In Re Parrott, 63 L. T. 777, it was held that a surety who had not paid, or been
called on to pay anything, could not vote, and no doubt a current policy-holder
cannot vote. See also Canadian Pacific, S;c. Co., 40 W. R. 40.

(8.) For the purpose of voting, a secured creditor shall, unless he surrenders his Secured
security, state in his proof the particulars of his security, the date when it was creditors,
given, and the value at which he assesses it, and shall be entitled to vote only isx
respect of the balance (if any) due to him, after deducting the value of his seciuity.
If he votes in respect of his whole debt he shall be deemed to have surrendered his



174



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



Admitting
proofs.



How votes
given.

Proxies.



Foi-m of
proxy.



gecurity, unless the Court on application is satisfied that the omission to value the
security has arisen from inadvertence.

Where, however, a creditor, believing his security to be a collateral one, did not
value it, and proved for the full amount of his debt, but before the liquidator was
appointed found out his mistake, it was held that this was an "inadvertence," and
that the Court could allow the amendment on terms as to costs. Henry Lister ^ Co.,
(1892) 2Ch. 417, Form 447.

(9.) A creditor shall not vote in respect of any debt on or secured by a current
bill of exchange or promissory note held by him, unless he is willing to treat the
liability to him thereon of every person who is liable thereon antecedently to the
company, and against whom a receiving order in bankrtiptcy has not been made, as
a security in his hands, and to estimate the value thereof, and for the purposes of
voting, but not for the purposes of dividend, to deduct it from his proof.

As to production of bUl or note, see R. 107 of 1890.

(10.) It shall be competent to the official receiver, or to the liquidator, within
twenty-one days after a proof estimating the value of a security as aforesaid had
been made use of in voting at any meeting, to require the creditor to give up the
security for the benefit of the creditors generally on payment of the value so
estimated, with an addition thereto of twenty per centum. Provided, that where a
creditor has put a value on such security, he may, at any time before he has been
required to give up such security as aforesaid, correct such valuation by a new
proof, and deduct such new value from his debt, but in that case such addition of
twenty per centum shall not be made if the Uquidator requires the security to be
given up.

[See Re Ketvton ; Ex parte National Provincial Bank of England, (1896) 2 Q. B. 403.]

(11.) The chairman of the meeting shall have power to admit or reject a proof
for the purpose of voting, but liis decision shall be subject to appeal to the Court.
If he is in doubt whether the proof of a creditor should be admitted or rejected, he
shall mark the proof as objected to, and shall allow the creditor to vote, subject to
the vote being declared invalid in the event of the objection being sustained.

(12.) A creditor or a contributory may vote either in person or by proxy.

This provision is quite general, but it would seem that the power to vote by
proxy is qualified by the following rules, e.g., that (16) impliedly prohibits a
creditor from giving a proxy to some other creditor to vote generally as to the
appointment of the liquidator. Apparently he can only authorize a vote for or
against the appointment or continuance of a specified person, i.e., a person specified
by name or description. This is a great hardship on a voter who may not be able
to attend by a person in his regular employment, and may be imable to vote in
favour of a specified person (other than the official liquidator) from not knowing
who will be proposed at the meeting for the office. No doubt imder rule (19) the
creditor or contributoiy can appoint the official receiver as his general or special
proxy, but there is no obligation on him to vote, and if the appointment is general
it can scarcely be expected that the official receiver will attend to instructions
requiring him to vote for the appointment of some person other than liimseK to be
liquidator. It certainly seems very unreasonable that a voter should not be at
liberty to authorize his proxy to attend and vote in favour of the best man proposed
at the meeting.

(13.) Every instrument of jiroxy shall bo in the prescribed form, and shall be
issued by an official receiver, or by the liquidator of the company, and every written
part thereof shall bo in the handwriting of the person giving the proxy or of any
manager or clerk or other person in his regular employment, or of a commissioner
to administer oaths in the Supreme Court of Judicature in England.



FIRST MEETINGS OF CREDITORS AND CONTRIBUTORIES. 175

(14.) General and Bpccial forms of proxy shall bo sent to the creditors and con- General and
tributories with the notice summoning the meeting, and neither the name nor special
description of the official receiver or of any other person shall bo printed or inserted P^^^^s.
in the body of any instrument of proxy before it is so sent.

(15.) A creditor or a contributory may give a general proxy to his manager or
clerk, or any other person in his regular employment. In such case the instrument
of proxy shall state the relation in which the person to act thereunder stands to the
creditor or contributory.

(16.) A creditor or a contributory may give a special proxy to any person to vote
at any specified meeting, or adjournment thereof —

(<r) for or against the appointment or continuance in office of any specified
person as liquidator or member of the committee of inspection, and

(b) on all questions relating to any matter other than those above referred to
and arising at any specified meeting or adjournment thereof.

(17.) A proxy shall not be used unless it is deposited with the official receiver
before the meeting at wliich it is to be used.

(18.) Where it appears to the satisfaction of the Com-t that any solicitation has Solicitation,
been used by or on behalf of a liquidator in obtaining proxies or in procuring the
appointment of liquidator, except by the direction of a meeting of creditors or con-
tributories, the Coui-t shall have power, if it think fit, to order that no remunera-
tion shall be allowed to the person by whom or on whose behalf such solicitation
may have been exercised, notwithstanding any resolution of the committee of
inspection or of the creditors or contributories to the contrary.

(19.) A creditor or a contributory may appoint the official receiver to act in
manner prescribed as his general or special jDroxy.

(20.) The chairman of the meeting may, with the consent of the meeting, adjourn Adjournment,
the meeting from time to time and from place to place.

[As to the formalities in respect of a resolution to adjourn, in bankruptcy, see £x
parte Ord, 6 Ch. 881.]

(21.) A meeting shall not be competent to act for any purpose except the election Quorum,
of a chaii'man, the proving of debts, and the adjournment of the meeting, imless
there are present or represented thereat at least three creditors or contributories, or
all the creditors or contributories if their number does not exceed thi'ce.

(22.) If within half an hour from the time appointed for the meeting a quomm
of creditors or contributories is not present or represented, the meeting shall be
adjourned to the same day in the following week at the same time and place, or to
such other day as the chauTnan may appoint, not being less than seven or more
than twenty-one days.

(23.) The chairman of the meeting shall cause minutes of the proceedings at the Minutes,
meeting to be drawn up, and fairly entered in a book kept for that piu-pose, and the
minutes shall be signed by him or by the chairman of the next ensuing meeting.

(24.) No person acting either iinder a general or a special proxy shall vote in Interested
favour of any resolution which would directly or indii-ectly place himself, his proxies,
partner or employer, in a position to receive any remuneration out of the estate of
the company otherwise than as a creditor rateably with the other creditors of the
company: Provided that where any person holds special proxies to vote for an
application to the Court in favour of the appointment of himself as liquidator he
may use the said proxies and vote accordingly.

Rr. 43—46 of 1890 are as follows :—

43. The official receiver shaU give to each of the directors and other officers Notice to
of the company who in his opinion ought to attend the first meetings of creditors officers,
and contributories seven days' notice of the time and place appointed for each meet-
ing. The notice may be either delivered personally or sent by prepaid post letter,



176



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



Gazetting.



Alteration
in practice.



Notice to con-
tributories.

Evidence as
to notice.



Copy resolu-
tions.



as may be convenient. It shall be the duty of every director or officer who receives
notice of such meeting to attend if so required by the official receiver.

44. The official receiver shall fix the days for the first meetings of creditors and
contributories, and shall forthvs^ith give notice thereof to the Board of Trade, who
shall gazette the same.

45. Where practicable, and unless the Court specially directs to the contrary, the first
meetings of ^-editors and contributories shall not be held until after the statement of
affairs prescribed by section 7 of the Companies (Winding-up) Act, 1890, has been sub-
mitted to the official receiver. If an extension of time for summoning the meetings or
either of them is required, an application for extension of time may be made by the
offcial receiver ex parte on a report without any affidavit. [Annulled by E. 1 of
April 2, 1895.]

46. Notice of the first meeting of contributories shall be sent to every person who
appears from the company's books or otherwise to be a contributory of the company.

R. 60 of 1890. — A certificate by the official receiver or other officer of the Court,
or by the clei'k of any such person, or an affidavit by the liquidator, or his solicitor,
or the clerk of either of such persons, that the notice of any meeting has been duly
posted, shall be sufficient evidence of such notice having been duly sent to the person
to whom the same was addressed.

K. 54 of 1890. — The official receiver, or, as the case may be, the liquidator, shall
send in the High Court to the chief clerk of the judge to whom the winding-up of
the company is assigned, and in any other Coiu't to the registrar, a copy, certified
by him, of every resolution of a meeting of creditors or contributories.

[The copy resolutions must now be sent to the registrar. (R. 35 of April, 1892.)
But in practice the resolutions are stated in the official receiver's report, and no
separate copy of them is filed.]



When resolu-
tions passed.



Absence
of notice.



Where ad-

jnunjmcnt
held.

Quorum.



Deputy offi-
cial receiver.



Resolutions of Creditors and Contributories.

R. 25 of Ap. 1892. — At a meeting of creditors or contributories held in the
winding-up of a company luider the Companies (Winding-up) Act, 1890, a resolu-
tion shall be deemed to be passed when at a meeting of creditors a majority in
number and value of the creditors present, personally or by proxy, and voting on
the resolution, have voted in favour of the resolution, and at a meeting of the con-
tributories when a majority in number and value of the contributories present, per-
sonally or by proxy, and voting on the resolution, have voted in favour of the
resolution, the value of the contributories being determined according to the
number of votes conferred on each contributory by the regidations of the company.

R. 55 of 1890. — Where a meeting of creditors or contributories is summoned by
notice, the proceedings and resolutions at the meeting shall, unless the Court other-
wise orders, be valid, notwithstanding that some creditors or contributories may
not have received the notice sent to them.

R. 56 of 1890. — Whore a meeting of creditors is adjourned, the adjourned meeting
shall be held at tho same place as the original place of meeting, unless in the resolu-
tion for adjournment another place is specified, or unless the Court otherwise orders.

R. 57 of 1890. — In calculating a quorum at a creditors' meeting, those persons
only who are entitled to vote shall be reckoned.

R. 124 of 1890. — Where an official receiver who holds any proxies cannot attend
the meeting fur which they arc given, ho may, in writing, depute some person
under his official control to use the proxies on his behaK, and in such manner as he
may direct.

[And see Sched. I. (5) as to tho official receiver nominating a substitute to act as
chairman.]



FIRST MEETINGS OF CREDITORS AND CONTRIBUTORIES. 1~^

S. 9 (1) of 1890. — A committee of inspcctiou aiipoitited in pursuance of tliis Act (^uinmittee of
shall consist of persons being creditors or contributories of tlie company, or persons "
holding general powers of attorney from such persons, in such proportions as may
be agreed on by the meetings of creditors and contributories, or as, in case of
difference, may be determined by the Court.

In view of this, it may be expedient at the first meeting to specify the proportion,
e.g., appoint A. and B. to act jointly with three other persons to be appointed by
the meeting of creditors as a committee of inspection.

This must follow part 2 of the form which was substituted for Form 86 (annexed xOrm IOj.

to the Rules of 1890) by the Board of Trade Order of the 13th February, 1891, N^^tj^jeto

which will be found, supra, p. 28. The form must be signed by the "official Board of

receiver," and must be addressed to "The Inspector- General in Companies Liquida- Trade of

tion. Board of Trade, 4, Whitehall Yard, London, S.W." The foi-m maybe obtained time of first

meetmgs.
by official receivers from the Board of Trade. Form 86 of

1890.

{Title.) Form 154.

(Under the order for winding up the above-named coy, dated the j^o^j^g ^^

day of , 189 — .) creditors of

Notice is hereby given that the first meeting of creditors in the above -p^^^tt of ^'

matter will be held at , on the day of , 189 — , at 1890.

o'clock in the noon.

To entitle you to vote thereat your proof must be lodged with me

not later than o'clock on the day of , 189 — .

Forms of proof and of general and special proxies are enclosed here-
with. Proxies to be used at the meeting must be lodged with me not

later than o'clock on the day of , 189 — .

Official Receiver.
\_Address.~\
(The statement of the coy's affairs \Jiere insert "has not been
lodged," or "has been lodged, and summary is enclosed"].)

Note. — At the first meetings of the creditors and contributories they may,
amongst other things : —

1 . By resolution determine whether or not an application is to be made to the

Court to appoint a liquidator in place of the official receiver.

2. By resolution determine whether or not an application shall be made to the

Court for the appointment of a committee of inspection to act with the
liquidator, and who are to be the members of the committee if appointed.
NoTE.^If a liquidator is not appointed by the Court, the official receiver will be
the liquidator.

As to Proxies, see infra, Forms lo8, 159.

Notice of such meeting shall also be sent by post to every person appearing by the
company's books to be a creditor of the company, and to every member of the com-
pany. (Sched. I. to Act of 1890, r. 2.)



The Cos Acts, 1862 to 1890,
In the matter of the Cos Acts, 1862 to 1890, and in the matter of the



Form 154a.



Notice to cre-
ditors of fresh

S Co., Limtd. Take notice that, pursuant to an order of Mr. Justice first meeting.

p. X



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

, dated the , a new first meeting of the creditors in the above

matter will be held on the at o'clock, at , for the

election of members of the committee of inspection.



Online LibraryFrancis Beaufort PalmerCompany precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) → online text (page 28 of 134)