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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discount the bill for 710^. 125. 2d. in his hands, and out of the proceeds
to pay the wages of the workmen of the sd coy, which will become due
on the 19th Ma}', 1866, and for carriage of the goods, and for the
purchase of coal to carry on the works of the sd coy mentd in the sd
afft of P., not exceeding in the whole the sum of 550^, Northjidd Iron
Co., M, E., 18th May, 1866,

For liberty to repay premiums paid by mistake, see British Imperial Asattrance Co.,
Hall, V.-C, 16th July, 1877. A. 1445.

For order authorizing official liquidators to enter into contract for completion of
company's railway and pier, see Cape Breton Co., Malins, V.-C, 2nd May, 1877.
A. 818.

For order confirming contract on behalf of company in liquidation to lay the
permanent way of a railway over bridges, see Hamilton^ s Windsor Irontvorks, Fry, J.,
29th March, 1879. A. 654.



319



CHAPTER XXXII.

ACTIONS AND PROCEEDINGS BY LIQUIDATOU.

Sect. 95 of 1862 empowered the [official] liquidator, with the sanction of the Lefral pro-
Coiu't, to . . . bx'ing or defend any action, suit, or prosecution, or other legal ceedings.
proceeding, civil or criminal, in the name and on behalf of the company.

But under sect. 12 (1) of 1890, the liquidator of a company wliich is being wound Sanction
up by the Court may, with the sanction either of the Court or of the committee of ^^^quirea.
inspection, . . . bring or defend any legal proceedings in the name and on
behalf of the company, and may compromise the same.

If there is no committee of inspection, the sanction of the official receiver, acting
under the direction of the Board of Trade, must be obtained. Sect. 9 (9), and
E. 169 of 1890, supra, p. 219.

As to the control and direction of the Court, and of the creditors and contribu-
tories, see sects. 12 (3), 23, and 2-1 of 1890 ; and New Zealand Loan, ^-c. Co., "W. N.
(1894) 200. And as to the control of the Board of Trade, see sect. 25.

As to a liquidator allowing proceedings to be taken by another person in his Proceedin"-8
name, see W. N. (1894) 166 ; Anglo-Sardinian Antimony Co., "W. N. (1894) 156. iu liquidator's

As to liberty to raise funds for proceedings, see Form 276, Chap. XXVIII., and ^^™6.
Cambrian Mining Co., 48 L. T. 114.

As to compromise, see further Chap. XLVII.

Where the liquidator is only provisionally appointed, application must be made to Action, kc.,
the Court. Where a liquidator has been appointed, he will, in cases of urgency or v P^o^i^ional
importance, probably find it convenient to obtain the sanction of the Court rather "
than of the committee of inspection ; and this is obtained on an ex parte summons,
supported generally by an affidavit as to the cii'cumstances.

Where there is no committee of inspection, sanction can, in ordinary matters, be
readily obtained from the official receiver.

As to creditors and contributories obtaining leave to sue in the name of the Actions by
company, see Bank of Gibraltar and Malta, 1 Ch. 69 ; Imperial Bank of China, ^c, 1 creditors, &c.
Ch. 339; Cape Breton Go. v. Fenn, 17 0. Div. 198; Ee Cape Breton Co., 19 C.
Div. 77.

As to the liquidator's liability for costs, see p. 215,

That the liqr be at liberty to commence an action against A. B. for Form 335.



damages for breach of a contract, dated, &c., and made, &c., and to Resolution of
prosecute such action as to the liqr may seem expedient. committee of

* 1 if jr inspection

sanctioning
proceedings.
That the liqr be at liberty to defend an action which has been com- porm 336.

menced by N. in the Division of the High Ct of Justice against

A. and B. and the coy, and liberty to proceed with which action has

been given by order in the winding-up, dated .



Another.



320



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



Form 337.

Resolution of
committee
sanctioning
compromise.



That the liqr be at liberty to compromise the action in the

Division of the High Ct, the short title of which is , by accepting

the sum of 1, in full satisfaction of all the coy's claims against

the defendants in such action referred to in the jDleadings in such action,
and of all claims against them for costs.

Under sect. 12 (1) of 1890, the liquidator can compromise under sect. 160 of 1862
with the sanction of the Court or of the committee of inspection.



Forai 338.

Summons for
leave to sue.



Let all parties concerned, &c.

On the applicon of , of &c., the liqr of the above-named coy, for

an order that the api^licant may be at liberty to bring an action in the
Chancery Division of the High Ct of Justice [or as the case may be'], in

the name and on behalf of the coy against of , &c. \_state

nature of proceedi7igs~\, and that the costs of and incidental to the
applicon may be costs in the "winding-up.



Form 339.

Application
to official
receiver as
committee of
inspection for
leave to sue.



{Title.)
Ex parte the Liqr.

Before the Off Eeer.
I, A. B., of &c., the liqr in the above matter, hby apply to the off
recr, acting as the committee of inspection in this winding-up, for his
sanction and directions in the following matters, viz. : the bringing
and prosecuting an action in the Chancery Division of the High Ct of
Justice [or as the case may be\ in the name and on behalf of the sd
coy, against [or defending an action in, &c., brought against the sd

coy by] K. M., of &c., to recover a debt or sum of £ alleged to be

due from [or to] the sd K. M. to [or from] the sd coy, &c.

Dated this day of , 189 — . A. B., Liqr.

The above applicon will be heard by the off recr on the day of



189—, at



o'clock.



The above is the general form sanctioned by the Board of Trade. The ■words
between " vi^." and " dated" are taken from the Form (52 of 1862) of Memorandum
of Judge's Sanction under sect. 95 and R. 50 of 1862. The application requires a
10s. companies liquidation stamp.



Form 340.

General
liberty to suo
on bills of
exchange.



Order that the applicants, as such [off] liqrs, bo at liberty, in all
castss in which tliey are jointly of opinion that the estate of the bank
■will bo benefited by tlio prcjcoedings, to issue at their discretion from
time to time the necessary legal process against the parties to overdue
or returned bills of exchange held by the bank. And order that no
action be commenced pursuant to this order unless there is a reason-
able prospect of at least the costs thof being recovered against the
person bued. And no action is to bo brought to trial without the



ACTIONS AND PROCEEDINGS BY LIQUIDATOR. 321

eanction of the judge in chambers first obtained. JJ'est of England, Sfc.
Bank, Malins, V.-C, 7th Jan. 1879. A. 34.

Upon the applicon of the off liqr of coy, &o., Order that the sd off Form 341.
liqr be at liberty to institute an action in the High Ct of Justice Liberty to
against R. for six months' rent of the coy's premises and phxnt, and to bring action
prosecute such action up to giving notice of trial; but after such notice
shall have been given no further steps are to be taken in tlio action
Avithout further leave of the judge. Taurine Co., Limtd, M. 11., loth
Nov. 1876. B. 1760.



Upon, &c.. Order that the sd B., as such prov off lifir, be at liberty Form 342.
to take such proceedings against the persons, being debtors of the sd Liberty to
coy named in the schedule hereto, as he may be advised, to recover provisional
payment of the debts due from them to the sd coy. Tea Co., Hall, g^^ debtors.
V.-C, 1st March, 1878. B. 531.



Upon the applicon of S., the off recr and liqr of the above-named Form 343.

coy, by summons, dated the 24th day of June, 1892, and upon hearing Liberty to

counsel for the appKcant, and upon reading the order to wind up, proceed

dated 2nd of May, 1891, the afft of S., filed, &c., and the exhibits Jl;!^^"^^.^ f^,,

therein referred to. It is ordered that the applicant be at liberty to in- alleged

stitute and prosecute proceedings under sect. 10 of the Cos (Winding- misfeasance,
J- ■•■ o ^ . ° and support

up) Act, 1890, against X., of &c., the promoter and one of the directors claims iu ad-

of the above-named coy, and Y., of &c., and Z., of &c., directors of the ™\'jj,"^*';'f*'^^
above-named coy, or any of them, as he may be advised. But such dii-ector's
proceedings are not to be heard until after the trial of certain criminal estate,
proceedings now pending against the sd X. and Y. (with others) arising
out of the winding-up proceedings " In the matter of the H. C03',
Limtd." And it is ordered that the applicant be at liberty to support
the claim made by him in an action "■ In the matter of A., deed, B. r.

C, 1891. A. No. ," being an action for the administration of the

estate of the sd A., formerly one of the directors of the sd coy. And
it is ordered that the applicant be indemnified against any costs to be
incurred by him in such proceedings out of the assets of the above-
named coy. Atiglo- Austrian, ^r. Co., 1891. A. 0120. Yaughan
WiUiams, J., 28th June, 1892.

As to security for costs being ordered on an application under the misfeasance
section, see Seventh East Central Bldg. Soc, 51 L. T. 109 ; but see note to Form 636.

Upon the appHcon of T. and 0., the off liqrs of the coy, Order that Form 344.
the applicants be at liberty to bring the action West of England Bank Liberty to



322



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



proceed to
trial.



V. Kelly ^ 1879, W. 249, to trial, being an action on certain dishonoured
promissory notes now pending in the Exchequer Division of the High
Ct of Justice ; and costs of applicants of and incident to applicon to be
costs in winding-up. West of England Bank, Malins, V.-C, 23rd Feb.
1880. B. 116.



Form 345.

Liberty to sue
for calls in
America.



UjDon the applicon, (Src, It is ordered that the o:ff liqrbe at liberty to

institute proceedings in America against D., of , New York, in

the U. S. of America, to recover the sum of 1., being the amount

of the arrears of calls and interest due on the shares held by him in
the above-named coy, as appears from the chief clerk's certificate,
dated, &:c. And it is ordered that the off liqr be indemnified in respect
of such proceedings out of the assets of the coy. Crookes Mining, &fc.
Co., Bacon, V.-C, 22nd June, 1886.



Form 346.

Liberty to
defend action.



Upon the applicon of E., the off liqr, and iipon hearing the solorfor
the applicant, and upon reading the two several orders dated resply,
&c., the affidavit of the off liqr, and the writ of summons issued 24th
Feb. 1883, in an action, &c., Order that the applicant be at liberty,
on behalf of the sd coy, to take all necessary and proper proceedings,
as he may be advised, by way of defence to the sd action, but so that
the applicant shall not, without the leave of the judge, proceed to trial
in such action ; the costs of applicant to be costs in winding-up. Devon
and Cormvall Co., Fry, J., 5th March, 1883. A. 302.

As to tlie liquidator not being personally liable for costs, see Fraser v. Brescia
Tramicays, 56 L. T. 771. As to liquidator of iinregistered company not being under
personal liability for rent of land vested in him, see Graham v. Edge, 20 Q. B. D.
683.

For liberty to compromise a claim, see Form 320, Chap. XXXI.



Form 347. Upon the applicon of C, the off liqr of the above-named coy, by

jLjI^gj.^ , " summons dated, &c., and upon hearing the solors for the applicant,

defend action and upon reading the order dated, &c., and the a£ft of the sd C, filed,

abroad. ^^^^ j^ ^^ ordered that the applicant as the sd off liqr be at liberty on

behalf of tlio sd coy to take all necessary and proper proceedings as he

may bo advised by way of defence to tlie action commenced in Sicily

by , against tlio sd coy or its directors and the late secretary

tliof, and referred to in the sd afft, and for that purpose to
grunt a power of attorney or such aiitliority as may be necessary to
advocates, agents, and other persons authorizing him or them to defend
the sd action on behalf of the sd coy. Giona Sulphur Co., 28th May,
1892.



ACTIONS AND PROCEEDINGS BY LIQUIDATOR. '^2.3

Upon the applicon of the [off] liqrs, &c., Order that the applicants Form 348.
be at liberty to make the usual proof in bankruptcy against any j^^^ j. , '
person or persons indebted to the sd bank who is already or is or are prove in
or shall be adjudicated bankrupt ; and either of the applicants is to be ^^ "P °^'
at liberty to swear the necessary afft or affts in proof of any debt or
debts duo to the bank from any bankrupt estate. West of England
Bank, Malins, V.-C, 10th Jan. 1879. B. 57.

See sect. 95 of 1862, and sect. 12 of 1890.

The Court will only give liberty to go in and prove. Emma Co. v. Grant, 17
0. D. 122 ; Barter v. Duheux, 7 Q. B. Div. 413 ; Bale v. Bousiead, 8 Q. B. D. 455.

As to bankruptcy proceedings by liquidator of unregistered company, see Ex parte
Ball, 10 Ch. 48. As to the company being secured creditors in respect of a lien on
shares, see Ex ijarte Mexican, S;c. 3fuung Co., 24 Q. B. Div. 613.



Upon the applicon of T. and C, the off liqrs, &c., Order that the Form 349.
applicants be at liberty to proceed in bankruptcy against AV. B., ~
of , a debtor to the sd bank, for the purpose of recovering from proceed in



him the amount now duo from him to the bank ; costs of applicants of bankruptcy,
and incident to applicon to be costs in winding-up. West of Enyland
Bank, Malins, V.-C, 29th May, 1880. B. 1071.

A liquidator may, in the name and on behalf of the company, serve a bankruptcy
notice on a judgment debtor of the company {Re Winterboiham, 18 Q. B. D. 446) ;
but no notice can be served in respect of a balance order {Ex jyarte Mackay, 58 L. T.
237 ; Ex parte Whinney, 13 Q. B. D. 476) ; for a balance order is not a final judg-
ment. On the other hand, a balance order does not preclude an action. Westmore-
land Co. V. Fielden, (1891) 3 Ch. 15. And after judgment in the action notice can
be served.



Upon the applicon of H., the liqr of the above-named coy, and upon Form 350.
hearing the solors for the applicant, and upon reading the afft of the



... , Liberty to

sd liqr and an origmatmg summons taken out by the sd liqr on the refer to

18th July, 1877, in the Chancery Division of this Ct, Order that the arbitration.

sd liqr be at liberty to refer all matters in diff'erence between the sd

coy and W. in reference to the erection of certain buildings at ,

according to certain specifications and terms mentd in the aff't of the sd

liqr and in relation thereto, and all matters and questions arising

thereout, in such manner and upon such terms and conditions as the

sd liqr may think fit, and for the purposes afsd to enter into and

to execute any agreement or agreements as he may be advised, but so

that any proceedings, rules, or orders, to be had, taken, or made in

regard to such reference shall be had, taken, or made in and by this

Ct. And order that the costs of the sd liqr, of and incident to this

applicon, shall be pd out of the assets of the sd coy. Drake's Patent

Concrete Co., Malins, V.-C, 28th July, 1877. A. 1474.

y2



324



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



Form 351.

Liberty to sue
for moneys
paid after
commence-
ment of
■winding-up.

Acts done
after com-
mencement of
winding-up.



As to dis-
positions of
property.



As to altera-
tion of status.



Upon the applicon of the off liqr, &c., Order that the off liqr be at
liberty to commence proceedings against V. and B. to recover the
several sums of lOOZ., pd to them by the coy since the commencement
of the winding-up proceedings, but the applicant is not to proceed to
the trial of the sd action without leave first obtained in this matter of
the judge. Pandora Theatre, Pearson, J., 7th December, 1883. B. 1606.

Sect. 153 of 1862. — Where any company is being wound up by the Court or sub-
ject to the supervision of the Court, all dispositions of the property, effects and
things in action of the company, and every transfer of shares, or alteration in the
status of the members of the company made between the commencement of the
winding-up and the order for winding-up, shall, unless the Court otherwise orders,
be void.

This section invalidates sales, mortgages, payments, and other dispositions of a
company's property made in the interval above specified. The Court has power to
confirm such transactions, but it rarely does, except as regards transactions in the
ordinary coui'se of the company's business, e.g., a purchase and sale of goods of the
company. Wiltshire Iron Co., 3 Ch. 443. And see Gihbs and Wesfs case, 10 Eq.
312, where mortgage confirmed. But payment, in the interval, of a debt existing
at the commencement of the winding-up, will not be confirmed, at any rate, when
the company is insolvent. Zii-erpool Civil Service, 9 Ch. 511 ; United Forts Co., 46
L. T. 458 ; Civil Service Co., 58 L. T. 220. The section does not invalidate payments
to the company. Mersey Steel Co. v. Kaylor, 9 App. Cas. 434. And where bills had
been accepted for cash paid to a company's agents in a distant island without
notice of the petition, it was held that the payment was valid and that the bill
holder must prove. Oriental Bank, Chitty, J., 29th Oct. 1884.

Except in such a case as the above, the advertisement in the Gazette is notice to
all the world. Emmerson'' s case, 1 Ch. 433.

The Court will not confirm a transfer made during the interval, but not completed
by registration before the order. Emmerson' s case, ubi supra. And see Barge's case,
5 Eq. 420, as to payment of calls in the interval.

The Court does not encourage trafficking in shares after a winding-up order has
been made {Cordova Co., (1891) 2 Ch. 580), and is not disposed to order registration of
a transfer after a winding-up order. Me Onward Building Soc, (1891) 2 Q. B. 463.
See also Eudge v. Bou-man, L. R. 3 Q. B. 689; Taylor, Fhillips and Richards' case,
(1896) 2 Ch. 851, reversed on appeal, (1897) 1 Ch. 298.



Liberty to
promote bill
in Parliament



Form 351a. Upon, &c. (summons). It is ordered that the ajDplicant (the liqr) be
at liberty to promote a bill in Parliament for the purpose of obtaining
an Act authorizing him to carry into effect the scheme for winding-up
the affairs of the sd society set forth in the schedule to the sd order
dated, &c. And it is hereby referred to the Registrar Cos Winding-up
to settle and approve the amount to be expended by the applicant in
promoting tlie sd bill. North London Commercial, &,-c. BuUdiny Soc.
(0028 of 1895), Vaughan Williams, J., 28th Oct., 1896.



Form 352. Upon the applicon of the liqrs of the above-named coy, upon hearing
Liberty \» the solor for the applicants, and upon reading the order, &c., Order
oppo.sf \)\\u m ^YiQ,i the applicants bo at liberty to continue thoir opposition to the



ACTIONS AND PROCEEDINGS BY LIQUIDATOR. 325

following' bill in Parliament, namely, (1) a bill, &c., &c., and that the
sd liqrs be at liberty to advance and lend to the Eiver Dee Coy further
moneys to enable them to continue their opposition to the sd bill.
Credit Co., Kay, X, 20th May, 1884. A. 727.

Upon the applicon of AV., the off liqr, &c., and upon reading, &c., Form 353.
and an order made in the action of the Lisbon, ^'c. Co. v. (irant, 1877, Leave to give
L. 145, upon the applicon of C, one of the defts in such action, Order security for
that the applicant be at liberty, out of the assdts of the sd coy, to pay

the sum of 100?. into Ct to the credit of the sd action, v. , to

an account intituled " Security for costs of the deft C," pursuant to
the sd order in the sd action, and dated 1st Feb., 1878. Lisbon Steam
Tramtvays Co., Malins, V.-C, 28th February, 1878. B. 448. See
Form 56a.

Sect. 69 of 1862. — Where a limited comxjany is plaintiff or pursuer in any action, Security for
suit, or other legal proceeding, any judge having jurisdiction in the matter may, if ^^^ ^ ^ com-
it appeal's by any credible testimony that there is reason to believe that if the
defendant be successful in his defence the assets of the company -n-ill be insufficient
to pay liis costs, reqiiii'e sufficient security to be given for such costs, and may stay
all proceedings until such security is given.

The fact that the company is in liquidation is sufficient. Korthampion Coal Co.
V. Midland Waggon Co., 7 C. Div. 500 ; Accidental, ^c. Co. v. Mcrcati, 3 Eq. 200 ;
Washoe Mining Co. v. Fermiogs, 2 Eq. 371 ; Western of Canada Co. v. Walker, 10
Ch. 628.

In such a case security must be given even when the company's pi'oceedings are
in substance a pure cross action. Citg of Moscow Co. v. International Co., 7 Ch. 225;
Fare Spirit Co. v. Fowler, 25 Q. B. D. 235. And security by a company in liquida-
tion, counterclaiming in a debenture action, has been ordered, although the official
receiver was liquidator. Strong v. Carlgle Press, W. N. (1893) 51.

In any cause or matter in which security for costs is required, the security shall
be of such amount, and be given at such times, and in such manner and foi-m, as the
Court or a judge shall direct. R. S. C, 0. LXY. r. 6.

As to directing security for proceedings up to a certain stage only, see Western of
Canada Co. v. Jf'alker, 10 Ch. 628. As to time for applying, see Imperial Fank of
China V. Fank of Hindustan, 1 Ch. 437 ; Igdncg Co. v. Fird, 23 C. D. 358.

An imlimited company, though insolvent and being wound up, is not within this I^nlimited
section. See United Forts Co. v. Sill, L. R. 5 Q. B. 395 ; FJiodes v. Faicson, 16 company.
Q. B. D. 548 ; Coivell\. Taylor, 31 C. D. 34; and conf Seventh East Central Fuilding
Society, 51 L. T. 109.

A successful litigant whose costs had been ordered to be paid out of the assets of
the company, or by the liquidator, was, under the old practice, entitled to immediate
payment of those costs in priority to the general costs of liquidation (including
realization). Home Investment Society, 14 C. D. 167; Fominion of Canada Flmnhago
Co., Tl C. Div. 33 ; and see R. 31 of 1890, and supra, p. 215 ; london Metallurgical
Co., (1895) 1 Ch. 758 ; and Hounsloiv Frewery (7o., TV. N. (1896) 45 (as to costs against
official receiver personally).

As to security for costs where the liquidator is suing, see Form 636, and W. Fouell Security by
and Sons, (1896) 1 Ch. 681, and Form 636a. liquidator.



326



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



CHAPTER XXXIII.



RESTRAINING PROCEEDINGS.



Before •wind-
ing-up order.



After such
order.



Executions,
&c., void.



Stay in lieu of
injunction.



Sect. 85 of 1862. — The Court may at any time after the presentation of a petition
for winding-up a company under this Act, and before making an order for winding-
up the company upon the application of the company, or of any creditor or con-
tributory of the company, restrain further proceedings in any action, suit, or
proceeding against the company upon such terms as the Court thinks fit.

Sect. 87 of 1862. — When an order has been made for winding-up a company
under this Act, no suit, action, or other proceeding shall be proceeded with or com-
menced against the company, except with the leave of the Court, and subject to
such terms as the Covu-t may impose.

Sect. 163 of 1862. — When any company is being woimd up by the Court, or
subject to the supervision of the Court, any attachment, sequestration, distress, or
execution put in force against the estate or effects of the company after the com-
mencement of the winding-up, shall be void to all intents. [See also Judicature
Act, 1873, s. 25 (8), emxDOwering the Court to grant an injunction where just or
convenient.]

Judicature Act, 1875, s. 24 (5). — No cause or proceeding at any time pending in
the High Court of Justice, or before the Court of Appeal, shall be restrained by
prohibition or injunction, but every matter of equity on which an injunction against
the prosecution of any such cause or proceeding might have been obtained if this
Act had not passed, either unconditionally or on any terms or conditions, may be
relied on by way of defence thereto : Provided always, that nothing in this Act
contained shall disable either of the said Courts from directing a stay of proceedings
in any caiise or matter pending before it if it shall tliink fit ; and any person,
whether a party or not to any such cause or matter, who would have been entitled,
if this Act had not passed, to apply to any Court to restrain the prosecution thereof,



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