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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obtain an order for delivery of the solicitor's bUl and for taxation. Such an order
can be obtained on stimmons, and the order will not contain any undertaking by
the official liquidator to pay what shall be found due. See Re Brabant, 23 S. J.
779 (1870), where Jessel, M. R., after consultation with his principal secretary,
said, " That it was not the practice, in the case of a company in liquidation, to
grant the common order to tax, making the liquidator ofPer to pay what should be
found due. In all cases where there was a liquidation, a special order was granted
with no offer. The solicitor usually had liberty to add the costs of taxation to his
bill, with liberty to prove in the winding-up for the amount." But see Licerpool
Household Stores, W. N. (1889) 48.

When a bill is subject to taxation at the date of the winding-up order, it may
be taxed at any time afterwards, though but for the order the time would be up.
Ex parte Evans, 11 Eq. 151 ; 40 L. J. Ch. 197.

Where an order (as above) is not thought expedient, production of the books, &c.,
can be obtained under sect. 115 : see infra.

As to enforcing an order for delivery by attachment, see Anglo-French Co-operative
Society, 14 C. D. 533. For order for delivery against a liquidator, see Horliuy
Brid(/e Co., 11 C. D. 109. Orders as in the next form used frequently to be made
in the chambers of Jessel, M. R., and elsewhere [hundreds have been made], but
having regard to the decision in Capital Fire, ubi supra, it would seem that the form
of order is too general, except by consent.



Form 263.



Upon the applieon of the [off] liqr of coy, and upon hearing the
"~ T'; solors for the applicant and for Messrs. C. & S., solors of, &c., appear-

Ordcr against -^ ^ ? ' 1 1

the coirii)any'H ing in person, and upon reading two orders, dated, &c., Order that

Bohcitors. ^j^^, g(j Messrs. C. & S., within fourteen days after service of this order,

{l(1iv( r into Iho limids of B., iho sd [oil'] liqr, at his office. No. •,



DELIVERY OF BOOKS AND OTHER PROPERTY. 285

all deeds, books, papers, letters and other documents now being in the
possession or power of the sd Messrs. C. & S., and to which the coy
is prima facie entitled. And order that such delivery shall bo without
prejudice to the lien of the sd Messrs. C. & S. on the sd deeds, books,
papers, letters, and other documents, which lien ought to be paid
out of the first moneys coming to the hands of the sd [off] liqr
after providing for the costs and expenses of the winding-up of the sd
coy ; but this order is not to prejudice any security or charge that may
be held by the sd Messrs. C. & S. as against the sd coy. Lamjham
Skating Rink Co., M. E., 13th Doc. 1877. B. 2063. See also Indian
Mammoth Gold Mines, M. E., 8th July, 1881. A. 2028 ^a four days'
order as ahove^.

Upon the applicon by summons of the oif recr and upon hearing the Form 264.

solors for the applicant, and for X., and upon reading the order to q -. Z

wind up, dated, &:c., and the afft of, &c.. This Ct doth declare that X. payment of

is liable to pay and account for tho sum of 200^., which was in reality ™'^^^y.

■•• '^ _ ' -^ belonging to

the moneys of the coy, but was received by X. from the N. Coy on the company.
29th July, 1890, together with interest thereon at the rate of 4 p. c. p. a.
from the sd 29th July, 1890, until payment. It is ordered that X. do
on or before the 30th July, 1892, or subsequently within four days
after service of this order, pay to the applicant S., as off recr of the
above-named coy, the sd sum of 200^. with interest as afsd. And it is
ordered that the sd X. do pay to the sd S., the off recr and liqr, his costs
of and occasioned by this applicon to be taxed by the taxing master,
Autoiyiatic Photograph, ^~c. {Foreign and ColoniaV) Co., 72 of 1891,
Yaughan Williams, J., 2nd June, 1892.

Upon applicon of P., the off liqr of, &c., and upon hearing, &c.. Form 265.

and upon reading, &c.. It is ordered that B., of , the manager of Order on '

the said association, do on or before the 31st March, 1886, or within manager to
four days after service upon him of this order, deliver to the sd P., ^ ^^''^ ,

■' _ -i- _ ' ' company s

as such [off] liqr, or his nominee at Bristol afsd, the property and property,
effects of the sd association in his hands, specified in the schedule
hereto, situate at afsd, and mentd and referred to in the agree-
ment, dated, &c., and made between the sd B., of the one part, and the
above-named association of the other part ; And it is ordered that the
costs of the [off] liqr, of and relating to this applicon, be pd out of the
assets of the coy. Medical Attendance, Sfc. Association, Pearson, J.,
22nd Mar. 1886.

Upon the applicon of P., as the prov off liqr of the above-named Form 266.



coy by summons, dated the 14th of Dec. 1885, and now the off liqr of Order on
the sd coy, and upon hearing counsel for the applicant, and for 0. former



286



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



eeeretary to
delivery-
company's
property.



knftr mentd, and upon reading the orders dated resply, &c., It is
ordered that the sd 0., formerly the manager and secretary of the sd
coy, do, "within fotir days after service upon him of this order, dehver
up possession to the applicant as the off liqr of the sd coy of the coy's

premises at , and all hooks, papers, and other property of the sd

coy (upon oath if required) in the possession or power or under the
control of the sd 0., but this order is to be without prejudice to any
question of right claimed by the sd 0., under any agreement made
between him and the sd coy ; And it is also ordered that the sd 0. do
pay to the applicant his costs of and occasioned by this applicon to be
taxed by the proper taxing master. Hampton Court Steam, ^c. Co., 4
March, 1886.



Form 267. Upon the applicon of the [off] liqr. Order that P. of



Order that
late manager
sign -warrants.



-, the late

manager of the bank, do within four days after service of this order
upon him, sign and endorse ten warrants in the j)Ossession of the
applicant, each of which is for one butt of wine standing in the name
of the sd P., but belonging to the bank, and P. to pay costs of applicon.
Lombard Deposit Bank, Malins, V.-C, 26th May, 1879. B. 1039.



Form 268.

Order on
person ap-
pointed to
collect calls
abroad to file
Btatement
and accounts.



Upon the applicon of the [off] liqr of the above-named bank, and upon
hearing the solors for the applicant and N., hnftr mentd in person, and
upon reading the order, dated the 11th Dec. 1884, and an afft of &c., It

is by consent ordered that the sd N., of , in the city of London, and

No. — Puo , Paris, in the Republic of France, do on or before

the 25th May, 1885, comply with the order in these matters, dated the
11th day of Dec. 1884, by making and filing a verified statement
showing what proceedings have been taken herein by the sd N.,
pursuant to an order dated the 9th Aug. 1883, by which he was
appointed to collect, get in and receive in France a call of bl. per share
made on the contributories of the coy resident in France, and further
that he do within the like period leave at the Chambers of Mr. Justice
Kay, situate in the Poyal Cts of Justice, Strand, London, his accounts
as receiver, and pay all moneys collected by him (if any) into the account
of the off liqr of the sd coy at the Bank of England ; And it is ordered
that the sd N. do pay to T., the sd off liqr, his costs of the said
applicon, to bo taxed by the taxing master. English and French Bank
Limtd., Kay, J., 30th April, 1885.



287



CHAPTER XXVIII.



BORROWING.



Sect. 95 of 1862. — The [^ojlcial'] liquidator shall have power, with the sanction of Liquidator's

the Court .... to raise upon the security of the assets of the company, from time power to
, ,. ... J. borrow,

to time, any requisite sum or sums oi money.

The liquidator may now exercise this power " withoiU the sanction of the Court No sanction
or of the committee of inspection" (sect. 12 (2) of 1890), but the exercise by the required,
liquidator of these powers is subject to the control of the Court, and any creditor or
contributory may apply to the Court with respect to any exercise or proposed
exercise of it (sect. 12 (3) of 1890). lie is also subject to the control of the creditors,
contributories, and committee of inspection (see sect. 23 of 1890), but may apply to
the Court for du-ections in relation to any particular matter (sect. 23 (3) of 1890).
See Chap. XXI.

Application to the Court will still be necessary where a provisional liquidator Provisional
thinks it expedient to borrow, and the power to do so is not given by the order liquidator,
appointing him.

An application will also be expedient where the amount to be borrowed is large,
or where there is a conflict of opinions among the creditors or contributories.

Where the liquidator applies to the Court for du-ections, or a creditor or contri-
butory applies under sect. 12 (3), the following forms may be referred to. They
may also be of service in framing sanctions of the committee of inspection.

The Court will probably be guided by the old practice tinder sect. 95 of 1862,
under which the power to sanction borrowing was frequently exercised, especially
where a provisional official liquidator was appointed with liberty to carry on the
business.

Liberty to raise money was sometimes given by the order appointing the provi-
sional Hquidator, and was frequently given for the purpose of paying ofP a secured
creditor, in which case it had to be shown that the security was worth more than
the debt.

Sometimes the sanction of the Court was given to an agreement for a present
loan and further advances. Regenfs Canal Iron Works, 3 C. Div. 411.

But neither the liquidator nor the Court can create a charge in favour of the n^aro-e in
lender in priority to the company's mortgagees, except with their consent. Ibid. priority to

mortgages.

Let all parties concerned attend, &c. {see Form 10). Form 269

On the hearing of an applicon by A. B., of, &c., the [off recr and]

liqr of the above-named coy, for an order that the said [off recr and] leave to

liqr may be at liberty to raise a sum of [or not exceeding] £ upon borrow.

the security of the assets of the sd coy, and that such directions may



288



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



be given with, reference to such loan and the security to be given
therefor as the Ct shall think fit [_or that the conditional contract
dated, &c., and made between, &c., for the advance by the Cor-
poration of a sum of £ to complete the buildings of the above-
named Coy, limtd, upon the terms therein montd may be approved

and carried into effect].



Form 270.

Liberty for
interim,
pro^-isional
liquidator to
carry on
business and
advance
money.



Upon motion for the petrs, &c. Appoint W. prov [off] liqr

[iisual directio7is~\. And limit and restrict the powers of the sd W. as
such prov [off] liqr to the following acts : namely, to carry on and
continue the business of the coy so far as may be necessary for carry-
ing out and completing existing contracts, and keeping the coy's
fiu^naces in blast, and for that purpose to raise a sum not exceeding
4,000^. per week at a rate not exceeding 5 p.c. p. a. with the usual
banker's commission, by the sale of or upon the security of the coy's
assets, and to make such advances himself. And order that for any
advances so made the sd W. do have a first charge upon the under-
taking of the coy, subject to the incumbrances now existing thereon.
Hopkins, Gilkes Sf Co., M. E., 15th May, 1879. A. 953.

As to the position of a receiver and manager who advances without order, see
Ex parte Izard, 23 C. Div. 75 ; Strapp v. mdl, (1895) 2 Ch. 1.



Form 271.

Liberty to
provisional
liquidator to
borrovr.



Upon the applicon of the prov [off] liqr, &c. Order that the sd
prov [off] liqr, for the purpose of carrying on the business of the coy
as provided by the sd order, be at liberty to borrow immediately or
from time to time such sum or sums as he may require for the purpose
of carrying on the sd business and for payment of current expenses,
and for the completion of the works now in course of execution at

, not exceeding in the whole 4,500/., the rate of interest on the

amount so borrowed not to exceed 5 p.c. p. a. And order that the
amount so to be borrowed with the interest for the same do constitute
a first charge iipon all the assets of the coy, subject only to any existing
charge thereon. And order that prov [off] liqr be at liberty to
execute a proper instrument or proper instruments for perfecting such
charge ; and costs of this applicon and of carrying out sd loan be pd
out of assets of coy. London Steam Boat Co., Pearson, J., 13th Dec.
1883. B. 1607.



Form 272.

Another.



Upon tlio applicon of S. and B., the prov [off] liqrs of the above-
named coy, &c. Order that the sd prov [off] liqrs bo at liberty to
raise a sum of 300/., bearing interest at the rate of 5 p.c. p. a. upon
the security of the moneys to be obtained from the sale of the coal to



BORROWING. 289

bo raised from the collieries of sd coy after the date of tLe raising of
the sd monej^, and -which sum is to be repaid by the prov [off], liqrs
out of such moneys as soon as they are sufficient for that purpose.
And order that for the purpose of securing the payment of such sum
as afsd and interest the prov [off] liqrs shall have power to sign and
issue any document or deed which may bo necessary or proper for such
purpose. And [costs of applicon to be costs in winding-up]. Ivy
House and Northwood Colliery, M. E., 31st May, 1878. A. 1015.

Upon the appHcon of C, of , the prov [off] liqr, Order that Form 273.

the applicant be at liberty to borrow a sum not exceeding 300/., at a Another,
rate of interest not exceeding 6/. p. e. p. a., for the purpose of paying
the rent now due in respect of the premises of the sd coy in L., and a
sum of 173/. 17s. 2d., being the taxed costs of the defts in an action
brought by the sd coy against H., and that such sum be repayable out
of the first assets of the sd coy, and meanwhile shall be a first charge
on the property and assets of the same. American Boioling Co., 28th
May, 1877. A. 1552. And see the order in Lands Allotment Co.,
00145 of 1892, 24 March, 1893.

Upon the applicon by summons, &c., of S. W., the prov liqr of the Form 273a.
above-named coy, and upon hearing the solors for the applicant and Another,
for the sd coy, and upon reading the order dated, &c., appointing special mana-
S. "W. one of the off recrs attached to this Ct prov liqr of the sd coy, certain paj-
the order dated, &c., appointing W. special manager until the hearing ments.
of the peton, &c., on, &c., preferred unto this Ct by, &c., with power
to carry on the business of the sd coy as from the 4th March, 1896, and
the afft, &c., this Ct doth order that the applicant, as such prov liqr,

be at liberty to borrow from the Banking Coy the sum of /.,

at a rate of interest not exceeding bl. p. c. p. a. And order that such

sum of /. and interest be a first charge on the assets of the sd coy.

And the sd prov liqr is to be at liberty to execute a proper instrument
or proper instruments for perfecting such charge as may be necessary.

And it is ordered that out of the sd sum of /., or other the assets

of the sd co}^, the sd AV., as such special manager as afsd, be at liberty
to make the following payments .... and also to pay all dock dues,
insurance and other expenses necessary for carrying on the business of
the sd coy, including salaries, travellers' expenses, wages, and the
cost of maintaining the horses employed in the sd business. Watson
and Hiscox (0049 of 1896), Eomer, J., at Chambers, 12 March, 189G.

Order that the applicant, as such prov [off] liqr, be at liberty to Form 274.

borrow, for the purpose of enabling him to do all acts necessary for Liberty to

carrying on the business of the sd coy, the sum of 2,000/., the rate of ^o™^ f*^^
*' <-' '^ ' ' carrying on

P. XJ business.



290



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



Form 275.

Liberty to
liquidator to
leud.



interest for the same not to exceed 5 p. c. p. a. And order that such
sum of 2,000/. and interest be a first charge on the assets of the sd
coy. Darlaston, Sec, Co., M. E., let May, 1877. A. 828.

For order giving liberty to liquidator to raise 500^. at 6|/. per cent, interest, and
further sums up to 5,000if. for carrying on the company's business, and to charge
same by deed on company's assets, such deed to be settled by the judge in chambers,
Bee Original Sartlepool Collieries, 26th April, 1877. B. 704.

Upon the applicon of the [off] liqr, &c. Order that the sd [off]
liqr be at liberty to paj^ into the Bank of England, to the credit of the
account of the off liqr of the sd coy, 300/. of his own moneys to meet
urgent payments in connection with the attempted sale of the coy's
ppty under the sd order, dated, &c., and particularly to pay Messrs. H.
for advertising the coy's ppty ; and that the sd off liqr shall have
priority over the sd debenture-holders and R. and E., as the trustees
of the sd indenture, and over the moneys thby secured, as well as the
moneys advanced by the plffs in the sd action under the sd order,
&c., or otherwise to the extent of 300/., and for interest upon the sd
sum of 300/. at the rate of 5 p. c. p. a. from the date of such advance
until repayment, and for his costs of this applicon, such costs to be
taxed, &c. And order that the sd ppal sum and interest and the costs
of this applicon shall be a charge upon the co3''s assets. Waytie's
Merthyr Steam Coal Co., and in action, 1st June, 1877. B. 1106.

Order giving liquidators power to advance money for payment of rates on
company's property in Nova Scotia ; to be repaid with interest at five per cent,
per annum out of first sale moneys. Cape Breton Co., Malins, V.-C, 29th June,
1878. A. 1513.



Form 276.

Liberty to
raise loan to
institute
misfeasance
proceedings.



Upon the applicon of M. & S., the liqrs, &c., and upon reading, &c.,
It is ordered that the sd liqrs be at liberty to raise by way of loan
from shareholders from time to time a sum of money sufficient in their
judgment to answer the costs, charges, and expenses of and incident to
an intended applicon to this Court on their behalf under sect. 165 of
the Cos Act, 1862 [now sect. 10 of the Cos (Winding-up) Act, 1890]
in the matter of this winding-up, and to charge the sums (if any)
recovered by means of such apjilicon with the repayment of such loan
a7id interest at such rate as may be agreed upon in the exercise by
the sd applicants of tlieir discretion in that behalf. And that the
costs of and incident to this applicon be costs in the winding-up.
Balkis Co., Limtd., Bacon, V.-C, 10th July, 1886.

Of course, such a charge could not bo given priority over debentures or other
8ec\iritifcs charging all the assets without the consent of the security -holders.



291



CHAPTER XXIX.



SALE OF PROPERTY.



Sect. 95 of 1862. — The [official] liquidator shall have power, with the sanction of Liquidator's

the Court to sell the real and personal and heritable and moveable power of sale.

property, effects, and things in action of the company by public auction or piivate
contract, with power to transfer the whole thereof to any person or company, or to
sell the same in parcels : [also]

To do all acts, and to execute, in the name and on behalf of the companj', all
deeds, receipts, and other documents, and for that purpose to use, when necessary,
the company's seal.

The liquidator of any company which is being wound up by order of the Court Xo sanction
may now without the sanction of the Court or of the committee of inspection, exercise required,
the above powers. Sect. 12 (2) of 1890.

But the exercise of the power is subject to the control of the Court, and any Directions,
creditor or contributory may apply with reference to its exercise or proposed
exercise (see sect. 12 (3) and sect. 24) ; and the liquidator must have regard to the
wishes of the creditors and contributories, and may himself apply to the Coiu't for
directions. See sect. 23.

Where application is made either by the liquidator or a creditor or contributory,
the forms under the old practice, given below, may be found useful. Such an
application will be necessary in case of a purchase under the rule next stated.

R. 156 of 1890. — Neither the liquidator nor any member of the committee of Liquidator,

inspection of a company shall, while acting as liquidator or member of such com- ^^■■: ^ot to

mittee, except by leave of the Court, either directly or indirectly, by himself or any ^^\? ^, ^

. , ' ,,. i ■, , without leave,

partner, clerk, agent, or servant, become purchaser oi any part ot the comfiany s

assets. Any such purchase made contrary to the provisions of this rule may be

set aside by the Court on the application of the Board of Trade or any creditor

or contributory, and the Court may make such order as to costs as the Court shall

think fit. [See Rv parte Gallard, (1896) 1 Q. B. G8 ; and Ex parte Gallard (2), 13

T. L. R. 316.]

For order giving liberty to liquidator to tender for purchase of company's pro-
perty, see Form 303, infra.

And cases will no doubt arise in which the liquidator will consider it desirable to "WTiere sanc-
obtain the sanction of the Court to a sale, especially where he has made a provisional tion to sell
contract for sale and the price is much less than the company gave for the property, '^^^^^ ^'
or where there is a serious difference of opinion as to the propriety of an immediate
sale.

Where property is sold by order of the Court, Er. 1 — 13 of E,. S. C. 1883,
Ord. LL, apply.

Application for an order for sale, or for liberty to sell, may be made hy summons How applica-
on the part of the liquidator, supported by evidence showing the expediency of the tion made.

u2



292



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



sale, or the liquidator may enter into a provisional agreement for sale, and then
apply by summons for the confirmation thereof.
Inquiries. Occasionally, before a sale can be made, inquiries, as in Fonns 329 and 330, are

requisite. Sometimes, before taking an order for sale, the liquidator applies to
have inquiries made as to incumbrances, priorities, &c. See IIamilton''s Windsor
Iron Works Co., 12 C. D. 707. See Form 272.

As to payment in and out of Court, see the Supreme Court Funds Rules, 1894,
and Form 297 et seq.



Summons for
leave to sell.



Form 277. '^^^ ^ parties concerned attend, &c. [see Form 10], on the hearing
of an applicon by A. B., of, &c., [the off recr and] liqr of the above-
named coy, for an order that the sd [off recr and] liqr may be at liberty
to sell the ppty of the sd coy hnfter mentd, that is to say [here describe
the ppty\ and that all such directions may be given with reference to
such sale as the Court shall think fit ; or that the conditional contract,
dated, &c., and made between, &c., for the sale to the sd E.. for the
sum of £ , of the copyright and goodwill of the newspaper



and certain other ppty of the sd
carried into effect.



Coy may be sanctioned and



Form 278.

Liberty to
sell chattels.



Uj)on the applicon of D., the off liqr of the coy, &c., Order that the

sd off liqr be at liberty to sell to H., of , the plant and stock of the

sd coy set out and described in the inventory signed by the sd H. (being
the exhibit to the afft of the sd D. above referred to), at and for the
sum of 315/. Heliotype Co., Bacon, Y.-C, 2nd May, 1877. A. 789.



employ firm
to sell.



Form 279. Upon the applicon of the off liqr. Order that the off liqr be at liberty
Libe t to sell ^'^ dispose of, either by public auction or private contract, and either
goods and to with or without reserve, all the goods and chattels now remaining upon
the premises of the above-named coy. And order that the off liqr be
at liberty to employ , of the firm of , for the purpose of dis-
posing of the sd goods and chattels. And order that the sd off liqr be
at liberty to close the business of the coy, and that all payments proper
to be made by the off liqr pursuant to this order be allowed in his
account. Art Furnishers' Co., North, J., 7th Ausr. 1883. A. 1320.



Form 280. Upon the applicon of the off liqrs, &c., Order that the off liqrs be



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