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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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Form 371. Upon the applicon of off liqr, &c.. Order that C. be restrained from

^~T^ further proceeding against the off liqr in the Commercial Ct of the

restraining Island of Malta with reference to a sum of 1,000?., deposited, &c.

prom-'ding in Q^^^^ ^f ^(\^ proceeding in Malta and of applicon to be reserved,
loroiini Court. x o j. a

General Works Co., Bacon, V.-C, 20th Nov. 1879. A. 2177.

Injunction to restrain Scotch action. Sec Hermann Loot/, 36 C. D. 502 ; Thurso
Gas Co., 42 C. D. 488.
For orders restraining hmdlord and others from distraining, see Forms 384 et seq.




Sect. 87 of 1862. — When an order has been made for winding-up a company No action
under this Act, no suit, action, or other proceeding shall be proceeded with or com- "without leave,
menced against the company except with the leave of the Coiu't, and subject to
such terms as the Court may impose.

Sect. 163 of 1862. — Where any company is being wound up by the Court, or Executions,
subject to the supervision of the Court, any attachment, sequestration, distress or *-°-> "^oid.
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.

Sect. 163 must be read with and is to a certain extent controlled by sect. 87.
Sigginshaw Mills and Spinning Co., (1896) 2 Ch. 544, 551.

Leave to commence or proceed must be obtained from "the Coiu't," i.e., the How leave
Court in which the winding-up is conducted. Mlo Grande Co., 5 C. Div. 282. obtained.
The leave may be given on an ex parte application. Williams v. Bristol, ^-c. Co., 39
L. J. Ch. 504. But, as a rule, leave should only be given on a summons or motion
served on the liquidator. Western and Brazilian Telegraph Co. v. Bibbij, 42 L. T.

In determining whether to give leave or not, the Court considers the question of Where leave
convenience and the special cii'cumstances of the case. St. Cuthhert Lead Co., 35 gi^en.
Beav. 384. Thus, where a shareholder has, before the commencement of the
winding-up, brought an action for rescission of contract on the ground of mis-
representation, leave to proceed is generally given, especially where there is a
serious question to be tried, or where the directors are also sued in the action for
damages, or where there are several such actions. Hall v. Old Talargoch, ^-c. Co., 3
C. D. 749.

So, also, whenever it is desired to commence or continue proceedings against some Debenture
person or persons outside the winding-iip jurisdiction, and the company is a actions,
necessary party thereto, leave will be given. Bio Grande Co., 5 C. Div. 282;
Marshall v. Glamorgan Co., 7 Eq. 129. So debenture holders and secured creditors
are generally given leave to proceed. See Eorm 377, and note thereto.

As to the title of the writ of summons and assigning it to the winding-up judge,
see Practice Master's Directions in Appendix C.

Leave has been given to a vendor to take proceedings to enforce his lien for
unpaid pui'chase-money. Blalcely v. Bent, 15 W. K. 663.

An action against the company to set aside a contract as ultra vires will generally
be allowed to proceed.

As to landlords, see Chap. XXXV.

As to rates and taxes, see Chap. XXXVII.

Sects. 85 and 87 of 1862 were intended to protect the assets of the company, and
not to interfere with outsiders. Lloyd v. David Lloyd and Co., 6 C. D. 345;
Wanzcr, Limited, (1891) 1 Ch. 305.





ance, &c.


A secured creditor is entitled to all his costs properly incurred in enforcing his
security. Rio Grande Co., 5 Ch. 282.

A creditor who proceeds without leave is in the wrong, and even if on an appli-
cation to stay the Court subsequently gives him leave to proceed, he will be ordered
to pay the costs. Wanzer, Limited, (1891) 1 Ch. 305.

Except in the case of proceedings to enforce the rights of seciired creditors, or for
the recovery of specific property, the Court, in giving leave to proceed, generally
requires an undertaking not to enforce against the company without the leave of the
Court any judgment obtained ; for the object in giving leave is to facilitate the
ascertainment of the rights of the claimant, and not to give him priority over the
other creditors. McEwen v. London, ^-c. Bank, 15 W. E. 245 ; and Form 376, infra.

Where liberty to proceed is obtained, and afterwards, before the trial, the action
is dismissed for want of prosecution, the plaintiff is not precluded from bringing
forward a claim in the winding-up. Orrell Colliery Co., 12 Ch. D. 681. And the like
rule will prevail where the plaintiff discontinues. TheArdandJm, 12 App. Cas. 256.

Where the Court gives leave to bring or proceed with an action, the Court of
Appeal will not as a general rule interfere. Thames Plate Glass v. Land and Sea Co.,
6 Ch. 643. But where leave is refused the Court of Appeal sometimes gives leave.
McEwen v. London, <S,-c. Bank, 15 W. E. 245 ; Strand Hotel Co., W. N. (1868) 2 ;
Lloyd V. David Lloyd and Co., 6 C. D. 339.

As to allowing, after winding-up, amendments raising new grounds, see Cocksedge
V. Metropolitan Co., 65 L. T. 432.

As to the effect of arrestment in Scotland, ju7-isdictionis fundandcB causd, see
West Cumberland Lron and Steel Co., (1893) 1 Ch. 713.

The sections apply in the case of an unregistered company. Rudow v. Great
Britain, #c., Society, 17 C. D. 600, 611.

Form 372. Let, &c. \_see Form 10], on the hearing of an applicon of , of,

&c., for an order that, notwithstandiug the order of this Ct dated, &c.,
to wind up the sd coy, the applicant may be at liberty to commence an
action in the [Chancery] Division of this Honourable Ct against the sd
coy for \_state nature of actioti], and that the costs of this applicon may
be costs in the sd action.

Summons for
hberty to

Form 373.

Summons for
liberty to
continue pro-

Let, &c. \_see Form 10], on the hearing of an applicon of , of,

&c., for an order that, notwithstanding, &c. [as in last form], the
applicant may be at liberty to proceed with an action in the Queen's
Bench Division of this Honourable Court in which the applicant is
plaintiff and A. and B. and the above-named coy are defendants, and
that the costs of this applicon may be costs in the sd action.

Form 374.

1. On the

day of

I commenced an action against the

Affidavit in ~ above-named coy and A., B., and C, in the Queen's Bench Division of
support. this Honourable Ct for, &c., and I desire to obtain leave to proceed

with the sd action.


2. I am advised by counsel and believe that I have a good cause of
action against the sd coy in respect of the subject-matters of the sd

[3. The document now exhibited to me, marked J. Iv., is the state-
ment of claim delivered by mo in the sd action, and I say that such of
the statements in the sd statement of claim as relate to my own acts
are true, and such of the statements as relate to the acts of any other
person or persons I believe to be true.]

Sometimes a paragraph as above is required.

4, My belief afsd is grounded partly on my own knowledge and
partly on the advice of my counsel, and on information obtained
through and from my solor in the course of the sd action.

1. I am the registered holder of 10 debentures of the above-named Form 375.
coy, numbered to inclusive, each dated the of , for Another by-
securing the payment of the principal sum of 1., with interest in debenture

the meantime at the rate of p.c. p.a. The sd debentiu-es are now

exhibited to me marked, &c.

2. The principal moneys secured by such debentures became, in

accordance with the terms thof, payable on the day of ,

when an order was made for the winding-up of the sd coy, and there
is an arrear of interest due in respect of such debentures.

3. The sd debentures are part of an issue of like debentures of

the coy, and the holders of such debentures are numerous.

4. All the sd debentures charge the undertaking of the coy, and are
further secured by a trust deed dated, &c., and made between the coy
of the one part and A. and B. of the other part. The document now
exhibited to me marked is a copy of the sd trust deed.

5. I desire to bring an action in the Chancery Division of this
Honourable Ct to enforce the sd debentures, and to have the trusts of
the sd deed carried into execution by the Ct.

Upon the applicon of B., the plaintiif in an action against the coy. Form 376.
and J. W., 1882, B. No. 6011, and upon hearing the solors for the -^1^^^., ^^
applicant and for the oS. liqr of coy, and upon reading the winding-up proceed with
order, Order that the applicant bo at liberty to proceed with the sd ^^^^ B'vd-
action, the sd applicant undertaking not to take any steps to enforce sion action,
any judgment he may obtain against the sd coy therein without ob-
taining the previous leave of the judge to whose Ct the winding-up
of the sd coy is assigned, the costs of the off liqr of and incidental to
this applicon to be costs in winding-up. Western Provincial Land,
Pearson, J., 19th Nov. 1883. B. 1554.

For order giving liberty to proceed with an action in which the company was a co-
defendant, " costs reserved,'''' see Vogt y. Knights S; Co., Pearson, J., 2'lth Eeb. 1884.
P. Z



As to liberty to proceed in Admiralty Division to enforce maritime lien against
sliip, see Re Rio Grande, ^-c. Co., 5 C. Div. 282 ; Australian Direct, ^-c. Co., 20 Eq.

Orders are frequently made under sect. 87 of 1862. See Forms 377 et seq.,
infra. The application should not be ex parte. Western Brazilian Co., W. N. (1880)
145; 42 L. T. 821.

It has been held that under sect. 87 the Court has a discretionary power to permit
a creditor to proceed with executions, &c., declared void by sect. 163. But Re Vron
Collier)/ Co., 20 C. Div. 442, casts doubt on these decisions; but see Higginshaw
Mills and Spinning Co., (1896) 2 Ch. 544, 551 ; Exhall Coal Mining Co., 4 D. J. & S.

Form 377.

Liberty to
holder to
bring action.

Ul3on tlie applicon of H., a delDenture holder of tlie sd coy, by sum-
mons dated tlie 11th Dec. 1876, and upon hearing the solors for appli-
cant, for the off liqr of the sd coy, and for and , trustees for

the debenture holders of the sd coy, and upon reading, &c., Order that
the said H., as such alleged holder of eight debentures of 50/. each
in the sd coy, be at liberty to take all such proceedings in this Ct
against the sd coy and other parties as the applicant may be advised.
Neiv Town Manure Co., M. R, 12th Dec. 1876. B. 1878.

A mortgagee or mortgage debenture holder will be given liberty as of course to
enforce his seciirity. Lloyd \. David Lloyd S; Co., 6 C. Div. 339 ; Hamilton's Windsor
Ironworks, 12 C. Div. 707 ; Jones v. Swansea Society, 29 W. E. 382 ; 50 L. J. Q. B.
428 ; Wanzer, Limited, (1891) 1 Ch. 305. As to leave being required for proceedings
by a receiver appointed in a debenture holder's action, see Joshua Stubbs, (1891) 1
Ch. 475, 482.

Form 378. Order that the applicant be at liberty to commence and prosecute an
Another. action against the above-named coy in this Ct and Division for the

recovery of 2,000/., the amount of twenty debentures of 100/. each, of
the sd coy, numbered, &c., of which he is the holder ; such debentures
purporting to form a charge upon the undertaking, and all the land
[^c] of the coy. But such action is not to be prosecuted beyond
giving notice of trial therein, without further leave of the judge first
obtained. Yniscechvijn Co., M. E., 5th Dec. 1876. B. 1917.

For order giving vendor liberty to bring action against company for specific per-
formance of agreement to purchase land, and to enforce lien for unpaid purchase-
money, or in the alternative for a rescission of the contract and for other relief, see
Industrial Coal and Iron Co., M. E,., 14th June, 1877. A. 1553.

Liberty to tnistees for debenture holders to bring action to have trusts carried
into execution notwithstanding supervision order. Cadiz Watenvorks, Malins, V.-C,
8th May, 1877. A. 882.

Form 379.

Liberty to
proneed with
acf,i(in by

Upon tho applicon of S., on behalf of himself and other the holders
of mortgaged debentures having a charge upon the undertaking, ppty,
and effects of the aliove-namod coy, and who are to rank pari passu
with tho applicant in rosijcct of tho sd chai'ge, and upon hearing tho


solor for tlie applicant, &c., Order that tlio sd S. be at liberty to pro-
ceed with and prosecute an action now pending in the sd Chancery-
Division of the High Ct of Justice, before , wherein the sd S., on

behalf of himself and the sd holders of mortgage debentures, is plaintiff
and the above-named coy defendant, 1877. S. No. 279. Scilly Isla7ids
Telegraph Co., M. E., 9th Aug. 1878. B. 1594.

Upon the applicon of S. and H., the plaintiffs in the action " ^S. Form 380.
V. The Carlyle Press, Limtd, 1892, S. 3868," now pending in the ^^^^j^^^.
Chancery Division of this Honourable Ct, before the Hon. Mr. Justice
Chitty, and upon hearing the solors for the applicants and for the off
recr and prov licp of the sd coy, and upon reading the order to wind
up dated the 25th day of Oct. 1892, and the writ of summons in the
sd action dated the 11th of Oct. 1892, It is ordered that, notwithstand-
ing the sd order to wind up the above-named coy, the applicants, the
plaintiffs in the sd action, ^'■Strong v. The Carlyle Press, Limtd, 1892,
S. No. 3868," be at liberty to proceed with the sd action. And it is
ordered that the costs of the applicants of this applicon be costs in the
sd action. Carlyle Press, Limtd, 0Ul33of 1892. Eeg., Oct. 28, 1892 ;
Henderson ^- Spalding, Limtd, 00104 of 1892. Same date.

Upon motion this day made unto this Ct by counsel for the Lands Form 381 .
Allotment Coy, Limtd, that the applicants might be at liberty to pro- Liberty to
ceed with the action instituted by them in, &c., notwithstanding the proceed with
order, dated, &c., for the compulsory winding-up of the above-named limited
coy, and upon hearing counsel for S., the off recr attached to this Ct, extent,
and the prov licp of the above-named coy, and upon reading the writ
in the sd action, dated, &c.. It is ordered that the applicants be at
liberty to proceed with the sd action to the extent of applying this day
for the appointment of the sd S., the off recr, as interim recr in the sd
action. And it is ordered that the rest of the sd motion do stand over
generally, with liberty to either party to apply to have the motion
restored. Real Estates Co., 00142 of 1892, Yaughan Williams, J.,
11th Nov. 1892. And see G. Newman cj' Co., 00146 of 1892; Orders
dated 25th Nov. 1892, and 3rd Dec. 1892.

A secured creditor is prima facie entitled to proceed, and it would not be proper
for the Court to refuse liberty to proceed except as above, in order to compel the
secui'ed creditor to allow the assets to be realized in the winding-up, and thus to
forego his just rights.

Upon the applicon of W., and upon hearing the solors for the appli- Form 382.
cant and the off recr and liqr in person, and upon reading the order Liberty to
dated the 11th March, 1891, the order to wind up, dated the 18th ^°^^^^
April, 1891, the affidavit of, &c.. It is ordered that the sheriff of the execution.




county of London be at liberty to proceed to a sale of the goods of
tlie British, &c. Coy, Limtd, seized under an execution issued on a
judgment recovered in an action, " JF. v. The British, Sfc. Co., Limtd,
1891, W. No. 528," and that the sum of 8/. lOs. 4J., for the assessed
costs of the applicants, be added to the sd judgment. British and
Foreign Refrigerating Co., 1891, B. 0100, North, J., 22nd May, 1891.
A. 636.

Form 383.

Liberty to
in action by
the company.

Upon the applicon of J. Brothers, the defendants in the action hnftr
mentd, and upon hearing the solors for the applicants and for the
above-named coy, and upon reading the two several orders dated, &c.,
made in the sd matters, the writ of summons issued in the action
hnftr mentd on the 16th May, 1885, the statement of claim delivered
on the 12th Aug. 1885, the statement of defence delivered on the 9th
Nov. 1885, the reply delivered on the 14th Nov. 1885, and the notice
of trial delivered on the 10th Dec. 1885, all in the sd action, the alft
of A., made in the sd matters, and filed the 5th May, 1886, and the
two several exhibits, &c., It is ordered that the applicants be at liberty,
jpursuant to the Cos Act, 1862, s. 87, to proceed by way of counter-
claim in the action of "i?. Coy, Limtd, against /. Brothers, High Ct of
Justice, Q. B. Div. 1885, E. 576," to recover against the sd E. Co.,

Limtd, the sum of 1., for the price of four cases of cigars (less

certain credits) sold by the sd applicants to the sd coy on the 5th day
of March, 1884. And it is ordered that this order be without prejudice
to any question in the sd action. Eberle^s Hotels, ^c. Co., Pearson, J.,
6th May, 1886.

See, however, Mersey Steel Co. v. NaijJor, 9 App. Cas. 434, that where a company
is suing it is not necessary to obtain leave to counter-claim for unliquidated



landlords; distress; re-entry; rates.

See sects. 85, 87, and 163 of 1862, set out in Chaps. XXXIII., XXXIV.

As to sects. 87 and 163 being read together, see Higginshaw Mills and Spinning Co.,
(1896) 2 Ch. 544, 551.

Where after the commencement of a winding-up a landlord or other party Distress after
threatens to levy, or proceeds to levy a distress for rent, tolls, rates, or the like, on winding-up
the company's property, in respect of rent, &c. accrued before the commencement
of the windiag-up, the Court will restraia him. Oak Pits Colliery Co., 21 C. Div.
322, and cases there cited.

But in such case the landlord may, if he has a power of re-entry, apply for liberty Re-entry,
to exercise the same, and the Court will give liberty accordingly. General Share
Trust, 20 C. Div. 266. Where the property is of greater value than the rent due,
such an application in effect may comj)el the payment of the rent in arrear.

And where there is no privity between the company and the landlord {e.g., where
the company is sub-lessee), he will not be restrained. Lunchj Granite Co., 6 Ch.
462; Regent United Service Stores, 8 C. D. 616; Re Carriage Co-operative, 23
C. D. 154.

As regards rent, &c., accrued after the commencement of the winding-up, the Rent accrued
landlord or other person claiming a right to distrain therefor, should apply for ? J_^^^^
liberty to distraiu, and the Court will give him such liberty, or direct the payment
of the rent where it is shown that possession has been retained for the benefit of the
■winding-up. Lundy Granite Co., supra; North Yorkshire Iron Co., 7 C. D. 661;
Oak nts Colliery Co., 21 C. Div. 322.

Where the liquidator abandons possession and gives notice to the landlord, or
unconditionally offers him possession, possession cannot be deemed to be kept for
the benefit of the liquidation. Blackburn District Society, 42 C. D. 343. A sui-ety
paying a landlord cannot distrain. Re Russell, 29 C. D. 267.

But liberty will not be given where possession has been retained, with the
acquiescence of the landlord, for the benefit of all parties. Progress Co., 9 Eq. 370 ;
Bridgewater Co., 22 C. D. 181 ; Lancashire Cotton Co., 35 C. D. 656. Higginshaw
Mills and Spinning Co., supra, the case of a mortgagee asking leave to distrain for
interest, a position which is not so favourable as that of a landlord. However, if
the landlord applies for liberty to re-enter, it may be necessary to pay him in full.
See General Share 'Trust, 20 C. Div. 266. Under the Apportionment Act, 1870,
rent is deemed to accrue de die in diem. South Kensington Stores, 17 C D. 161.
Moreover, the landlord will not be restrained where, by reason of incumbrances,
the liquidator has no interest in the chattels. New City Constitutional Club, 34
C. D. 646 ; on App. 56 L. T. 792 ; and see Romtdu-ood Colliery Co., AV. N. (1897) 10 ;
13 T. L. R. 175.

Sect. 10 of the Judicature Act, 1875, introducing the bankruptcy rules, does not
give a landlord priority in winding-up. Thomas v. Lionite Co., 17 C. Div. 250.



ment of

Future rent.

Form 384.

hoUing under

He is not a secured creditor in England {S. €.), though he is in Scotland. Wanzer,
Limited, (1891) 1 Ch. 305.

Subject as above, the Court restrains distress, whether the winding-up be com-
pulsory, under supervision, or voluntary.

A landlord restrained can, of course, go in and prove in the winding-up. Thomas
V. Lionite Co., ubi supra.

It will be borne in mind that the commencement of the winding-up is (1) in com-
pulsory winding-up, the presentation of the petition, even where there has been a
previous resolution for voluntary winding-up (see Taurine Co., 25 C. D. 118) ; (2) in
voluntary winding-up, the passing of the resolution ; (3) in supervision, the same.

A solvent company will not be permitted in winding-up to distribute its assets
without regard to its landlord's right to future rent. Gooch v. London Banking
Association, 32 C. Div. 41 ; Lord Elphinstone v. Monkland Co., 11 App. Cas. 332;
and see Opjjenheimer v. British and Foreign Bank, 6 C. D. 744 ; and Westhoiirne
Grove Drapery Co., 5 C. D. 248, where a fund was required to be set apart.

But in the case of an insolvent company it was held (before sect. 10 of the Judi-
cature Act, 1875), that a landlord could not prove for future rent, and could only
enter a claim for the amount [Ha'/tor Granite Co., 1 Ch. 77), and that the existence
of such claim did not prevent the distribution of the assets among the creditors
regardless of such claim. Horsey'' s Claim, 5 Eq. 561. And it has recently been
held {Kew Oriental Bank Corporation (No. 2), (1895) 1 Ch. 753), that this strange
conclusion is still good law, on the ground that, notwithstanding the wide door
opened by the statute to proofs, and the views expressed in Hardy v. Father gill, 13
Ap. Cas. 351, there can be no proof for future rent unless the lease has been dis-
claimed, which in winding-up is not allowable. Quccre, however, whether this is a
sound reason, seeing that where Company A. holds shares in Company B., the latter
can (without disclaimer) prove in the winding-up of the former for future calls.
See, also, Craig's Claim, (1895) 1 Ch. 267.

And in a later case [Panther Lead Co.) it was pointed out that in New Oriental
Bank Corporation (No. 2), supra, the lessors had refused to let the lease be given up
and prove for the loss ; and it was held by Romer, J., that the Court should assist
a landlord desiriag to prove at once for his loss on the footing of his lease to an
insolvent company being treated as determined ; and that the old cases required
reconsideration. Panther Lead Co., (1896) 1 Ch. 978. Eorm 392b, infra, as to
measure of damages, see Llynvi Coal Co., 7 Ch. 28.

As to the proof to be made when the rent is payable in advance, see Shackcll ^•
Co. v. Chorlton ^ Sons, (1895) 1 Ch. 378 ; and, where a leasehold term is determin-
able at an earlier date. Oriental Bank Corporation (No. 2), nbi sup.; but this case
was afterwards compromised.

Preferential Payments, &c. Act, 1888, s. 1 (4). — In the event of a landlord or other
person distraining or having distrained on any goods or effects of a ... . company
being wound up within thi-ee months next before the date of the . . . .winding-up
order .... the debt to which priority is given by this section shall be a first
charge on the goods or effects so distrained on, or the proceeds of the sale thereof.
Provided, that in respect of any money paid under any such charge the landlord or
other person shall have the same rights of priority as the person to whom such pay-
ment is made. See Chap. XXXVII.

Restraining Distress.

Upon motion this day for liqrs of coy, and upon reading afPt, &c.,
and tlio sd liqrs by their counsel undertaking to abide by any order this
Ct may make as to damages in case this Ct should hereafter be of

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