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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or who may be entitled to enforce, by attachment, or otherwise, any judgment,
decree, rule, or order, contrary to which all or any part of the proceedings in sixch
cause or matter may have been taken, shall be at liberty to apply to the said Courts
respectively by motion in a summary way for a stay of proceedings in such cause or
matter, either generally or so far as may be necessary for the purpose of justice;
and the Court shall thereupon make such order as shall bo just.

As to restraining actions against contributories in companies xmder Part VII. of
the Act of 1862, sec sect. 197 of that Act in Appx. That section in effect makes
{inter alia) sect. 85, above, applicable. Iludow v. Great Britain, ^-c. Society, 17 C. D.
611.



Before the Winding-up Order.

Before the Judicature Act it was the practice, where a winding-up petition had
been preseuted, to apply to the judge to whom it was assigned to restrain (under



RESTRAINING PROCEEDINGS.



;327



sect. 85 of 1862 above) any actions or proceedings against the company -wheresoever
pending.

The application was made by motion ex parte on behalf of the company, or of a
creditor or contributory, and it was well settled that upon such an application an
injunction would be granted until the hearing of the petition. London and Suhurhan
Bank, 19 W. R. 9o0.

But since the Judicature Act this practice has been modified in accordance with How applica
sect. 24, above. Artistic Colour Co., 14 C. D. 502; General Service Co., (1891) 1 tions now
Ch. 496. Where, therefore, it is desired to stop any action, execution, sale under ™^ ^'
an execution, or other proceeding pending in the High Court, the proper course is to
aj)ply by motion ex parte to the Division in which the action or proceeding is pending,
and the Court, following the practice settled in London and Suburhan Bank, ubi supra,
will, upon the usual undertaking as to damages being given, stay further proceedings
until the hearing of the petition or fiu'ther order. Masbach v. Anderson, 26 W. R.
100 ; W. N. (1877) 252 ; Rose ^- Co. v. Gardden Lodge Coal Co., 3 Q. B. D. 235 ;
Lindley, 673. The application in the Queen's Bench Division is usually made to
the judge at chambers. Where there are several actions pending in the Queen's
Bench Division, a single order to stay all can be obtained. Where execution has
been issued on a judgment signed in a district registry, the application to stay must
be made to a judge at chambers.

In aU other cases, e.g., in cases of actions in foreign Coui-ts, or in the inferior Foreign and
Courts, or of distress or sales, application should (under sect. 85, above) be made by inferior
motion ex parte to the judge to whom the petition is assigned, for an injunction to
restrain the proceeding imtil the hearing of the petition. See Forms 384 et seq.,
infra.

The application to stay or restrain (as the case may be) should be supported by an Affidavit,
affidavit as to the facts, and if the application is made in. the name of the company
some responsible person must give the usual imdertaMng as to damages. Westminster
Association v. Uptvard, 24 S. J. 690.

After the Winding -iq) Order.

Sect. 85 only applies prior to the winding-vip order, but after the order has been Injunction,
made actions and proceedings (other than actions and proceedings in the High stay, or
Court) commenced or taken in violation of sect. 87 of the Act of 1862 [see above],
will be restrained upon the application of the liquidator or some other person
interested. And as to actions and proceedings in the High Court, application can
be made therein to stay proceedings, or an order for transfer can be obtained under
R. 14 of April, 1892, or, as regards mortgagees' and debenture holders' actions, to
the Lord Chancellor (see Chap. XLII.), and application may then be made to stay
proceedings or otherwise as may be thought fit. As to when leave to proceed will
be given under sect. 87, see Chap. XXXIV.

After a winding-up order has been made, the liquidator or provisional liquidator
should take steps to stop all unnecessary proceedings, and to protect the property
of the company. In some cases it may be wise to obtain a transfer of the proceedings
to the Winding-up Court. See Chap. XLII. The liquidator should in each case
consider whether the subject-matter of the action is one which can be dealt with
in the winding-up, or whether the Coui-t would give leave to proceed (see
Chap. XXXIV.), or whether it would be better to let the action proceed, in which
case he will take steps to obtain leave to defend. See Chap. XXXII.

As to the cases in which the Coiu-t gives liberty to x^roceed, see Chap. XXXIV.
And as to transfer, see Chap. XLII.

There are, of course, nximbers of cases in which there is no necessity for an



328



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



Garnishee
order.



action, as the claim can be readily disposed of in the winding-up at a very small
expense.
Executions. As to executions and sequestrations, whether these can be restrained depends on

the position in which matters stood at the commencement of the winding-up.
If the sheriff was then in possession, the execution has been "put in force " before,
not after, the commencement of the winding-up, and accordingly the Court will
not interfere. Great Ship Co., 4 D. J. & S. 63 ; London and Devon Biscuit Co., 12
Eq. 190. Because, unless there is reason to doubt the bona fides of the execution
creditor [Perkins' Bread Co., 7 C D. 371), the execution creditor has become a
Sale. secured creditor {Printing, S;c. Co., 8 C. D. 535); but a sale is a "proceeding"

within sect. 87, and the Court has jurisdiction to restrain the sale. iS'. C, and In re
Taijlor, 8 C. D. 183 ; HiUe India Rubber Co. (2), W. N. (1897) 20.

Nevertheless it requires a very strong case to induce the Court to prevent a gale
in such cases. Be Hull Pottery Co., 1 Eq. 649; Plas-yn-Mhowys Coal Co., 4 Eq.
689. *

So, too, a garnishee order served before the presentation of the petition is
thereby "put in force," and the Court will not interfere. Stanhope Silkstone Co.,
11 C. D. 160 ; Printing, %e. Co., 8 C. D. 535.

Where, however, the sheriff is not in possession at the time when the petition is
presented, the Court will, as a general rule, interfere and stop the execution
{London and Devon Biscuit Co., 12 Eq. 190; Dawson'' s Estates Co., 19 Eq. 202; Be
Iron Co., 20 C. D. 442 ; Thurso Gas Co., 42 C. D. 488) ; and liquidator shotild not
proceed by interpleader. Wcsflury v. Tuigg ^' Co., (1892) 1 Q,. B. 17.

A creditor will not be allowed, after the commencement of a winding-up, to
attach property of the company abroad {Oriental Inland Co., 9 Ch. 557) ; nor will
shareholders be allowed to proceed abroad. Scottish Pacific, W. N". (1886) 63. But
as to judgment in rem, see Minna Craig Co., (1897) 1 Q. B. 55. On the other hand,
a secured creditor will not be restrained from enforcing his security {Lloyd v. David
Lloyd % Co., 6 C. Div. 339; Be Wanzer, (1891) 1 Ch. 305; West Cumberland Co.,
(1893) 1 Ch. 713) ; but he may have to jDay costs if he proceeds without leave.
S. C.

A person who is improperly restrained should apply to discharge the injunc-
tion, or he may lose his security. Thomas v. Patent Lionite, 17 C. Div. 257;
In re Wood, 23 C. Div. 644 ; but consider B-v parte Rocke, 6 Ch. 795.
Foreign liti- The Court may restrain a British subject who is within the juidsdiction from

gation. suing a company in a foreign Court. Korth Carolina Co., W. N. (1889) 52 ; Central

Sugar Factories of Brazil, (1894) 1 Ch. 369.

For inquiry as to damages pursuant to undertaking, see Form 387.



Property
abroad.



Secured
creditor.



Form 354.

Affidavit of
pf'titioiiing
cnditftr in
Hiipport of
application to
stay.



{Title of Action.)
1. Tlio above action was commenced by writ issued the



day of



— , and a copy of the sd writ is now exhibited to me marked —
2. I am a creditor of tlio defendant coy for /., and the



coy



having neglected, notwitlistanding repeated demands, to pay the sd

sum, I, on the of presented a peton to Her Majesty's

High Ct of Justice praying for a compulsory winding-up of the sd

coy, and the day of lias been duly fixed for the hearing of

the sd poton.

.'?. I believe, from inquiries I have made, that the sd coy is largely
iijdobtcd, and is insolvent.



RESTRAINING PROCEEDINGS. 329

4. In the circumstances, I submit that, in accordance with the usual
practice in such cases, further proceedings in the said action ought
to be stayed until the hearing of the sd peton or the further order
of the Ct.

{Title of Action.) Form 355.



1 . The above action is an action for damages for breach of contract. Another by

2. On the of a peton was presented to this Honourable fi'''y7ditOT^

Ct by A. B., a creditor of the sd coy, prajdng for a compulsory wind-
ing-up order, on the ground that the coy is insolvent and unable to

pay its debts, and the of has been duly fixed for the hearing

of the sd peton.

3. By order of the Honourable Mr. Justice , made on the —

of , in the matter of the ed winding-up, I was appointed prov

liqr of the sd coy [and I have given security as required by the sd
order]. The sd order is now exhibited to me marked .

4. From the investigation of the aifairs of the sd coy which I have
made I believe that the sd coy is insolvent.

5. I submit, &c.



Take notice, &.c. \_see Form 9], on the part of A. B., the petr named Form 356.

in the peton for the winding-up of the above-named coy presented in ^jTTT";^ ~

this matter on the day of ■, that C. D., of , may be motion by

restrained until the hearina;' of the sd peton, or until f ui'ther order, from Petitioner to
^ ^ ' _ _ ' restrain pro-
further proceeding with the action brought by him in the County Ct ceedings.

of holden at against the sd coy.



Take notice, &c. [see Form 9], on the part of , the liqr of the Form 357.

above-named coy, that , of , and , of , may be ZTT- Z

restrained from further proceeding with an action brought by them motion by
against the above-named coy in [^state Ci^, and that they may be liquidator to
ordered to pay the costs of this applicon. ceedings.

There must be an affidavit of the plaintiffs.



Upon motion this day made unto this Ct by counsel for the above- Form 358.
named coy, the petrs, &c., and for S., prov off liqr, &c., and the sd S.



by his counsel undertaking to abide by any order this Ct may make as straining
to damages, in case the Ct shall hereafter be of opinion that the N. County Court
Coy has sustained any by reason of this order which the sd petrs
ought to pay, Order that the N. Coy be restrained until the hearing
of the sd peton, or the further order of this Ct, from taking any



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

further proceedings in the action by them against the sd petrs in the
County Ct of Lancashire, holden at Oldham, in the county of L.
Derhy shire Wago7i Co., M. E., 12 July, 1879.



Form 359.

Another.



Uj)on motion this day for L., the petr, &c. [iisual imdertakmy ly
jyetr'], this Ct doth order that A., B., and C. resply, and their respective
agents, be restrained, until after the hearing of the sd peton or further
order, from taking any further proceedings in the actions brought by
them against the above coy mentd in the schedule hereto. And order

that and resply, and their respective agents, be restrained

until after the hearing of the sd peton from selling under the execution
issued by them against the sd coy, and mentd in sd schedule. Banbury
Colour Co., Chitty, J., 9th May, 1884. A. 612. Schedule, with four
columns, headed resply: (1) Name and address of plff or person
sought to be restrained ; (2) Ct in which proceedings taken ;
(3) Nature of proceedings ; (4) Amount.

The proceedings in the above case were all in County Courts. For order restrain-
ing actions in Mayor's Court, see Re Kitighls ^- Co., Bacon, V.-C, 16th January,
1884.



Form 380.

Order re-
straining
police court
proceedings.



Upon motion for the association, (S:c. [tisual undertaliimj as to
damages']. Order that B. be restrained from taking any further
proceedings upon the summons issued by him in the Bow Street
Police Ct against the sd association. Briton Medical Association,
Kay, J., 18th Feb. 1886, A. 181 ; 32 Ch. Div. 503.

The summons above mentioned was for penalties. See also Briton Life Co.,
"W. N. (1888) 121.

For oi'der restraining proceedings under summons for rates, see Flitit Coal Co.,
56 L. T. 16. And see Act of 1888, infra.



Form 361 Upon motion this day made unto this Ct by counsel for A., the

petr named in the peton preferred unto this Ct on the 5th March, 1891,

■i-'ainst'"" ^^^^ upon reading the afft of, &c., and the sd A., by his counsel,
County Court undertaking, &c. [as to damages']. This Ct doth order that the high

execution. i^aiWi'i of the County Ct of , holden at , and H., be restrained

from selling and taking any further proceedings on the execution levied
upon the goods of the B. Coy, Limtd, at the instance of the sd 11., until
the hearing of the sd peton. British and Foreign Refrigerating Co.
(1891, B. 0100), North, J., 12th March, 1891. A. 276.



Form 362. Upon motion, &c., for the liqr of coy, &c., Order that the high
bailiff of the County Ct of Yorkshire, holden at K., do forthwith with-



An other.



RESTEAINING PKOCEEDINGS. 331

draw from the premises of tlio coy entered upon by him pursuant to a
warrant of execution directed to him, and issuing out of tho Shoreditch
County Ct of Middlesex, hold en at, &c., under a judgment obtained by

B., of , in an action commenced by him against the sd coy, as in

the sd afft of C. mentd. And order that the sd high bailiff do deliver
up the possession of the sd promises to the sd liqr. And order that
the sd action be transferred from the sd Shoreditch County Ct, &c., to
the sd Vice-Chancellor. Hull Central Draj^ertj Co., Hall, V.-C, 5th
April, 1879. A. 866.



Upon motion this day made unto this Ct by counsel for the petrs, Form 363.

Warren's, &c., Coy, Lmtd, whose registered office is situate at , Order re-

andof M. and C, the liqrs thof, the petrs named in the peton preferred straining
by the sd petrs unto Her Majesty's High Ct of Justice, on the 11th ^c^fons
March, 1886, for an order continuing the winding-vip of the sd coy against
under the supervision of the Ct, and upon reading an afft of E., <^°™P^^J-
filed, &c. :

This Ct doth order that F. and Sons, and the several other persons
whose names are set forth in the first column of the schedule hereto as
plaintiffs in the actions against the sd Warren's, &c.. Coy, Limtd,
specified in the third column of the sd schedule, and the solors of such
persons resply, be restrained until after the hearing of the sd peton, or
further order, from further proceeding in the sd actions commenced
by them against the sd coy, as in the sd schedule mentd, and in cases
where judgment has been obtained, from issuing or levying execution
upon the goods and effects of the sd coy in respect of any such judg-
ments, and also from commencing any other actions against the sd coy
for the same matters. Wan-ell's, Sfc. Co., Bacon, V.-C, 13th March,
1886.



Upon hearing counsel for the D., &c. Coy, Limtd, and for S., the Form 364.
prov liqr, and upon reading the affts of G., and the sd liqr by his ordeTof
counsel undertaking to abide by any order this Ct may make as to Queen's
damages, in case the Ct or a judge should hereafter be of opinion that -^"^^l,, j^^^
the plaintiff in this action shall have sustained any by reason of this proceedings.
order which the sd S. ought to pay. Order that all further proceedings
in this action be stayed until the hearing of the sd peton. Osborn
V. Derhjshire, ^c. Co., Q. B. Div., Field, J., 4th July, 1879.



Upon the applicon of the sheriff of Yorkshire, and upon hearing the Form 365.
solors for the applicant and for A. (off liqr) and others, &c. : Order, on

It is ordered that the sd sheriff do forthwith withdraw from posses- interpleader



332



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



application,
for sheriff to
■vvithdra'w.



Form 366.

Order on

sheriff to

■withdraw, but

execution

creditor's

priority

preserved.



Form 366a.

Another.



sion of the goods seized by him under the writ of ji. fa. issued in the
above-named matter and claimed by W. and P.

And it is ordered that A., the o£P liqr of the above-named coy, do pay
to the sheriff of Yorkshire the sum of 1 9Z. 8s. 8rf. for his ascertained
costs of this applicon, including therein his possession money, and also
do pay to W. and P. the sum of 16/. 5s. 8(7. for their ascertained costs
of this applicon, and that the said off liqr be allowed the payments so
to be made and his costs of this applicon out of the assets of the sd
society.

And it is ordered that no action is to be brought against the sd
sheriff for the seizure of the sd goods. Belle- Vue Freehold Land
Society, Chitty, J., 15th April, 1885.

Upon the applicon of A., the prov off liqr of the above-named coy,
by summons, kc, Order that the sheriff of Durham do give up to the
prov off liqr of the sd coy all ppty in his possession, under or by virtue
of any execution on a judgment against the sd coy at the suit of J. N,
and 0. N., trading as, &c., and that the sd ppty be sold in the
winding-up of the sd coy, and that a separate account be kept and
taken of the proceeds of the ppty seized by the sd sheriff under the
sd writ ; and order that the sd execution creditors do have the same
priority, against the proceeds of the ppty seized by the sd sheriff and
sold, as they would have had if it had been sold by the sd sheriff with-
out prejudice to their right as creditors in the winding-up, and that they
be at liberty to apply in Chambers in the sd winding-up if the sale be
unreasonably delayed, and that the. costs of all parties of this applicon
and the charges of the sd sheriff properly payable, including his
poundage, and including in the costs of the sd J. N. and C. N. the
costs of and incidental to the staying of the sale under their writ of
execution, be taxed by the taxing-master and pd out of the assets of
the sd coy. And order that the sd prov off liqr do pay the amount of
the costs incurred by reason of such distress, and be allowed the same
on passing his account. South Durham Brewery Co., Kay, J., 9th
April, 1885. B. 448.

An order as above is sometimes made when an execution is valid and a sale by the
sheriff would damage the property. See Hill Fropcrtij Co., 1 Eq. C40 ; Flas-Yn-
Mhovys Co., 4 Eq. 089; Granville Hold, Reg., 1895.

This order was followed by Byrne, J., and the effect applied to other execution
creditors who had lodged their writs before the winding-up commenced. HiJle
India lluhher Co. {2), W. N. (1897) 20.

Upon the applicon by summons, dated, &c., of S., the off recr and
prov liqr of tho above-named coy, and upon hearing the solors for the
applicant, and for A., the execution creditor, and upon reading the
judgment dated the 15th Aug. 1895, in [^describe action'] tho peton of
C. jjref erred unto this Ct on the 17th Dec. 1895, for the winding-up



IlESTRAININr, PROCEEDINGS. '333

of the above-named coy, and tlie order dated the 20th Dec. 1895
\_appointing interim prov liqr~\. And both parties by their solors con-
senting to this order. It is ordered that the sheriff of G. do go out of
possession and do give up to the ofE recr and prov liqr of the sd coy
all ppty in his possession under or by virtue of any execution on a
judgment against the sd coy at the suit of the sd A., the sd A. to have
the same charge on the ppty of the sd coy in the hands of the sd
sheriff for the payment of his judgment debt and costs as if such ppty
had been sold by the sd sheriff under the writ of Ji. fa. before the
peton for the winding-up tlie sd coy was presented. And the sd A. is
to be at liberty to apply, in case his sd judgment debt and costs are
not pd within one month from the date of this order, for directions as
to the realization of the sd ppty now in possession of the sd sheriff.
And it is ordered that the costs of the applicant and of the sd A. of
and relating to this order and the charges of the sd sheriff properly
payable, including his poundage, be taxed and pd out of the assets of
the sd coy. Queoi's Hotel, Cardiff (00293 of 1895), Hood, Eeg.
24th Dec. 1895.

The above order was made after petition presented and interim provisional liqui-
dator appointed.

Declare that the Ct is of opinion that Mr. Taylor is entitled to the Form 367.
same charge on the assets of the coy in the hands of the sheriff as if Z, 7^
such assets had been sold by the sheriff under the writ oifi.fa. before creditor given
the peton for winding-up the coy was presented ; and order that the ^^'^^ charge,
sheriff go out of possession and deliver the assets in his possession to
the liqrs ; and order the liqrs to sell forthwith sufficient assets to raise
the amount due to Mr. Taylor in respect of the three bills for 5,000/.,
and interest at 4 p.c, and costs, and out of the proceeds of such sale
pay Mr. Taylor the amoimt of his judgment debt and interest at 4 p.c.
thereon from the signing of the judgment, and costs, and the costs of
both motions, and pay the costs of the sheriff. Liberty to Mr. Taylor
to apply in case the liqrs do not sell forthwith. Taylor v. liaihcaij
Steel and Plant Co., Hall, V.-C, 18th Feb. 1878, 8 0. D. 183.

The above order was made after the order for transfer [Form 584, i)>fra'\ had
been made. The creditor was thus dealt witli because he had been unfairly delayed
by the company. See similar orders, HUl lottery Co., 1 Eq. 649; Plas-Yii-Mhowys
Co., 4 Eq. 689; and see Re Richards, 11 CD. 676. But the authority of these
cases is doubtful. See Vron Colliertj Co., 20 C. Div. 442; 51 L. J. Ch. 389; 30
W. E. 388.

Upon the applicon of B., prov off liqr, and upon hearing the solors Form 368.
for the applicant, and for the plaintiff in the action, &c., Order that rr
the sd prov off liqr be at liberty to pay to the sd L., plaintiff in the sd pay ou't
action of , and to the sd &c. [other plaintiffs in other actions'], the execution

' I. J- u/ jj creditors.



334



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



Form 369.

Order re-
straining* pro-
ceedings
against ship.



amount of ppal, interest, and costs, including sherifi's fees, to the sd
plaintiffs resply in full, and the costs of this aj)plicon, such costs to
be taxed by the taxing master, in case the parties differ, out of the
assets of the coy. City of London Co-operative, Hall, V.-C, 9th March,
1881. A. 526.

In the above case the execution had been duly levied before the commencement of
the winding-up.

Ux3on motion, &c.. Award an injunction against E. & E., trading as
Ellis & Co., of Liverpool, &c., to restrain them and each and every of
them, their attorneys and agents, from proceeding further in certain
causes and suits instituted by them resply in the foreign Cts at Havre
against the steamship or vessel A., her tackle, apparel, and furniture,
the ppty of the sd coy, and against M. to restrain him from prosecuting
or commencing any proceedings against the sd steamship or vessel A.,
or doing any act to cause the arrest of the sd vessel, until the further
order of this Court ; and this order is to be without prejudice to such
rights (if any) as the sd M. has against the sd steamship or the
proceeds of sale thof. Liverpool, ^'c. Co., M. E., 29th July, 1875.
B. 1275.

The arrest of a vessel is a proceeding vidthin sects. 85, 87, and a sequestration
■within sect. 163 of the Companies Act, 1862. In re Australian Direct Co., 20 Eq.
325 ; 44 L. J. Ch. 676 ; In re Rio Grande, ^c. Co., 6 C. Div. 282 ; 46 L. J. Ch.
277 ; 36 L, T. 630 ; 25 W. R. 328.



Form 370. Upon the applicon of T., and it appearing that the sd T. is entitled

~, ~. to a lien upon the steamship Sestos of 322/. due to him as wages and

Order giving ^ <. i n i • <«

effect to ship- subsistence money as master of the sd steamship from to ,

master's lien, "being the date of the arrival of the sd ship at the port of London, in

priority to all other claims against the sd ship, Order that the [off]

liqr do pay such sum of 322?. to the sd T. out of the assets of the coy

coming to his hands, together with the sum of 5/. 5s. 6^?., being the

amount of the ascertained costs of the sd T. of this applicon. Globe

Steamship Co., Chitty, J., 29th July, 1884. A. 1216.



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