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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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further reports, stating the manner in which the company was formed, and whether
in his opinion any fraud has been committed by any person in the promotion or
formation of the company, or by any director or other officer of the company in
relation to the company since the formation thereof, and any other matters which
in his opinion it is desirable to bring to the notice of the Court.

(3.) The Court may, after consideration of any such report, direct that any person
who has taken any part in the promotion or formation of the company, or has been
a director or officer of the company, shall attend before the Court on a day appointed
by the Court for that purpose, and be publicly examined as to the promotion or
formation of the company, or as to the conduct of the busiuess of the company, or
as to his conduct and dealings as director or officer of the company.

(4.) The official receiver shall take part in the examination, and for that purposo
may, if s^Dccially authorized by the Board of Trade in that behalf, employ a solicitor
with or without counsel.

(5.) The liquidator where the official receiver is not the liquidator, and any
creditor or contributory of the company, may also take part in the examination
either personally or by solicitor or counsel.

(6.) The Court may put such questions to the person examined as to the Court
may seem expedient.

(7.) The person examined shall be examined on oath, and it shall be his duty to
answer all such questions as the Court may put or allow to be put to him. The
person examined shall at his own cost, prior to such examination, be fiimished with
a copy of the official receiver's report, and shall also at his own cost bo entitled to
employ at such examination a solicitor with or without counsel, who shall be at
liberty to put such questions to the person examined as the Court may deem just
for the pui-posc of enabling that person to explain or qualify any answers given by
him. Provided always, that if such person is, in the opinion of the Court, excul-
pated from any charges made or suggested against him, the Court may allow him
such costs as the C<mrt in its discretion may thinlc fit. Notes of the examination
shall bo taken down in writing, and shall bo read over to or by, and signed by, the



PUBLIC EXAMINATION. 525

person examined, and may thereafter bo used in evidence against him. They shall
also be open to the inspection of any creditor or conti-ibutory of the company at all
reasonable times.

(<S.) The Court may, if it thinks fit, adjourn the examination from time to Adjournment,
time.

(9.) A public examination under this section may, if the Court so directs, and Before whom
subject to general rules, be held before any judge of County Coui'ts, or before any examination
officer of the Supreme Court, being an official referee, master, registrar in bank- "^
ruptcy, or chief clerk, or before any district registrar of the High Court named for
the purpose by the Lord Chancellor, or in the case of companies being wound up
by a Palatine Court, before a registrar of that Court, and the j)owers of the Court
under sub-sects. (C), (7), and (8) of this section may (except as to costs) be exer-
cised by the person before whom the examination is held.

The section only applies where the company is being " wound up by order of the
Court," as to which see sect. 31 (2) of 1890. But when the winding-up is volun-
tary or under supervision, a private examination may be ordered and adjourned
into Court. See Chap. XLIII.

The preliminary report (see Form 152) is required whether a public examination Cases.

is or is not contemplated. See Chap. XVI. But such preliminary report is not Contents of
sufficient to support an application for public examination. Ex parte Barnes, (1896) ^ ^ ™ ^T
A. C. Ue ; Great Kruger Co., (1892) 3 Ch. 307. ^^^°^ '

"An object, if not the only object, of the first sub-section of sect. 8 was to impose
on the official receiver at an early period the duty of bringing before the Court
information upon certain matters connected with the company which would be very
important in guiding the judgment of the Court as to the persons who ought to be
summoned under sect. 115" of 1862. Per Lord Herschell hi Ex 2)arte Barms, at
p. 154.

As to what persons are "officers of the company," see Chap. XLV. Officers.

The section was not ' ' intended to apply to a case where the charges [are] broiight Frauds on
against the company of having committed frauds in the course of its business with outsiders,
the outside world, and not connected in any way with the promotion or formation
of the company — that is to say, of its conduct towards j)ersons dealing with it other
than shareholders as regards their memberslup in the comj)any." Per Vaughan
Williams, J., Medical Battery Co., (1894) 1 Ch. 444, 447. But query whether this
view is quite correct, for the section contemplates two cases — (a) fraud in the pro-
motion or formation of the company; (b) fraiid committed "by any director or
other officer of the company in relation to the company since the formation thereof."
The latter is not confined to fraud in the promotion or formation.

With reference to the words in sub-sect. 2, "if he thinks fit, make a fui'ther report," Fm'ther
they mean that such report is only to be made if the official receiver " arrives at a report,
judicial conclusion in his own mind that such facts are before him, and in proof, that Official re-
it becomes his duty" to make the report. "It is not, even then, necessary for reiver s jucli-
him to do it in every case, but only in such cases as in his judgment demand such ^^ ^°°'

a course to be pursued." Per Lord Halsbury, L. C, Ex parte Barnes, (1896) A. C.
150.

The further report, in order to justify a public examination of A., must contain Fraud to be
an exjaression of opinion by the official receiver that a fraud has been committed by alleged
A. in the promotion or formation of the company, or that A. (being a director or '*o''uist per-
other officer of the company) has committed a fraud in relation to the company since pvamined
its incoi-poration (see paragraph 2 of the section), and a finding of fraud against B.
does not justify an application for the public examination of A. " It is not enough
that there is a general finding that fraud must have existed somewhere." Ex parte Demolition of
Barnes, ubi supra, over-ruling Trust and Investment Corporation of South Africa, (1892) earher cases.



526



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



Second
further report,



Control of
Court and
Board of
Trade.



Eepoi-t to be
written.



Application
for order.



Rules.
Appointinc
shorthand
writer.



Refusal to
answer.



Report
thereof.

Action
thereon.



3 Ch. 332; General Phosphate Corporation, (1895) 1 Ch. 3 ; Zaxon ^- Co., (1893) 1 Ch.
210; and BirMale Steam, c$r. Co., (1893) 2 Q. B. 386; and (to some extent) Great
Kriu/er Gold Mwbu/ Co., (1892) 3 Ch. 307.

But if on the public examination of A., who has been inculpated, or from in-
formation which the official receiver has obtained otherwise, it appears that B. and
C. are in a similar position, the official receiver may make a second report and apply
for their public examination without first privately examining them under sect. 115
of 1862. Per Lords Macnaghten and Herschell, E.c parte Barnes, (1896) A. C. at
p. 157.

The function of the official receivei'S as to reporting as to, and applying for
public examinations, is one which they perform as officers of the Court, and
they must act on their own responsibility and not under the control of the Board of
Trade. Per Vaughan "Williams, J., W. N. (1894) 44 ; but see instructions of Board
of Trade set out in Appendix C.

Every report must be in writing, and if subsequently additional information is
obtained, justifying a public examination, the fresh facts, to become operative,
must be embodied in a supplemental report. Great Krnger Co., ubi sup. As to
discharging, admitting evidence to rebut, or sending back the report, on the appli-
cation of the examinee, see New Travellers' Chambers, (1895) 1 Ch. 395.

The application for the order for examination may be made ex parte. Trust and
Investment Corporation, (1892) 3 Ch. 332. The person summoned can apply to dis-
charge the order on the ground of want of jurisdiction, but not otherwise. S. C.

There is such a want of jurisdiction when the proposed examinee is not within
the class of persons who may be examined under sub-sect. 2 of sect. 8.

A person who is examined and is exculpated is entitled to costs (see sect. 7), and
so is a person who is ordered to be examined when the order is made without juris-
diction {Sounslow Brewery Co., W. NT. (1896) 45) ; and the order will be payment of
costs simply, without limiting the payment so as to make it come only " out of the
assets of the company." Ibid.

R. 16 of 1890. — If the Court or the officer of the Court before whom any examina-
tion is under the Acts and these rules directed to be held shall in any case, and at
any stage in the proceedings, be of opinion that it would be desirable that a person
(other than the person before whom an examination is taken) shoidd be appointed
to take down the evidence of any person examined under the Acts and Rules in
shorthand or otherwise, it shall be competent for the Court or officer aforesaid to
make such appointment ; provided that where the application is made by the official
receiver he shall nominate a person for the purpose, and the person so nominated
shall be appointed, unless the Court or officer holding the examination shall other-
wise order. Every person so appointed shall be paid a sum not exceeding one
guinea a day, and where the Court appoints a shorthand writer a sum not exceeding
?)d. per folio of 90 words for any transcript of the evidence that may be required,
and such sums shall be paid by the party at whose instance the appointment was
made, or out of the assets of the company, as may be dii-ccted by the Court.

E, 17 of 1890. — (1.) If a person examined before a registrar or other officer of the
Court who has no power to commit for contempt of Court, refuses to answer to the
satisfaction of the registrar or officer any question which he may allow to be put,
the registrar or officer shall report such refusal to the judge, and upon such report
being made the person in default shall be in the same position and be dealt with in
the same manner as if he had made default in answering before the judge.

(2.) The report shall be in writing, but without affidavit, and shall set forth the
question put, and the answer (if any) given by the person examined.

(3.) The registrar or officer shall, before the conclusion of the exanfiination at
which the default iu answering is made, name the time when and the place where



PUBLIC EXAMINATION. 527

the default mil be reported to the judge ; and upon receiving the report the judge
may take such action thereon as he shall think fit. If the judge is sitting at the
time when the default in answering is made, such default may be reported im-
mediately.

Rr. 69—77 of 1890 are as follows :—

69. — (I.) A rcjiort made by the official receiver pursuant to sect. 8 of the Com- Report under
panics (Winding-up) Act, 1890, shall state in a narrative form the facts and matters sect. 8.
which the official receiver desires to bring to the notice of the Court, and his opinion
as required by sect. 8 of the Companies (Winding-up) Act, 1890.

70. The official receiver may apply to the Court to fix a day for the consideration Consideration
of the report, and on such application the Court shall apjioint a day on which the thereof.
rejDort shall be considered.

71. The consideration of the report shall be before the judge of the Court per- Further
sonally in Chambers, and the official receiver shall jDcrsonally, or by counsel or ^^o^^^^tion.
sohcitor, attend the consideration of the report, and give the Court any further
information or explanation with reference to the matters stated in the report which

the Court may require.

72. If the Court makes an order pursuant to sub-section nine of section eight of Before whom
the Companies (Winding-up) Act, 1890, directing any person to attend for public exammation
examination, the examination shall be held in open Court : — "retained

{(/.) If the winding-up of the company is in the High Court, before such one of cases."
the officers of the Court mentioned in sect. 8 of the Companies (Winding-
up) Act, 1890, as the Court may direct, and in the absence of any such
direction, before a Registrar in Bankruptcy of the High Court.

{b.) If the winding-up of the company is in a County Court, before the judge of
the Coiu't, or before a registrar of the Court if such registrar is also a
district registrar of the Hig-h Coiu-t named by the Lord Chancellor for the
purpose of holding public examinations under the Acts or before any such
district registrar. See p. 608.

(c) If the winding-np of the company is in the Stannaries Court, before the vice-
ivarden. [Abolished by Stannaries Court (Abolition) Act, 1896.]

[R. 72 is annulled by R. 34 of April, 1892, but stiU applies to "retained cases."
In other cases R. 26 of April, 1892, infra, now applies.]

73. Upon an order directing a person to attend for public examination being Application
made, the official receiver shall apply for the ax^pointment of a day on which the for appohit-
public examination is to be held. ment.

74. A day and place shall be appointed for holding the public examination, and Appointment
notice of the day and place so api)ointed shall be given by the official receiver to the ^° examine,
person who is to be examined by seudiag such notice in a registered letter addi-essed f^ notice

to his usiial or last-known address. examinee

75. The official receiver shall give notice of the order appointing the time and Notice to
place for holding a pubhc examination to the creditors and contributories by adver- creditors and
tising the order in such newspapers as the Board of Trade from time to time direct, contribu-

or in default of any such direction as the official receiver thinks fit, and shall also °^^®®*
forward notice of the order to the Board of Trade to be gazetted.

76. If any person who has been directed by the Court to attend for pubUc Arrest of
examination fails to attend at the time and place appointed by the order forholdino- examinee,
or proceeding with the same, and no good cause is shown by hiin for such failure

or if before the day appointed for the examination the official receiver satisfies the
Coui-t that such person has absconded, or that there is reason for believing that he is
about to abscond with the view of avoiding examinatioQ, it shall be lawful for the
Court, upon its being proved to the satisfaction of the Court that the order for
attendance at the public examination was duly served, without any fui-ther notice,



528



WINDING-UP BY THE CORUT. [ChAP. XLIV.



Filing _
depositions.

Warrant to
arrest.



Eefore whom

examination

held.



Evidence of
depositions.



to issue a warrant for the arrest of the person required to attend, or to make such
other order as the Court shall think just.

77. The notes of every public examination held pursuant to the Companies
(Winding-up) Act, 1890, shall, after being signed as required by the said Act, be
filed with the proceedings. [This rule is not affected by R, 1 of November, 1895.]
R. 13 of April-, 1892. — A warrant of arrest issued by the High Court under R. 7G
of the Companies Winding-up Rules, 1890, shall be issued in the Central Office of
the Supreme Court, pui'suant to an order of the judge directing such issue.

R. 28 of April, 1892. — Where the judge makes an order under sect. 8 of the
Comimnies (Winding-up) Act, 1890, directing any person or persons to attend for
piiblic examination : —

(ff.) The examination shall be held before the judge. Provided that in the High
Court the judge may direct that the whole or any part of the examination
of any such person or persons be held before the Registrar or before any of
the persons mentioned in sub-section 9 of the said section.
(b.) The judge may, if he think fit, either in the order for examination, or by
any subsequent orders, give directions as to the special matters on which
any such person is to be examined,
(c.) Where on an examination held before the registrar or one of the persons men-
tioned in sub -section 9 of the said section he is of opinion that such
examination is being unduly or unnecessarily protracted, or for any other
sufficient cause, he may adjourn the examination of any person or any
part of the examination to be held before the judge,
(d) If the winding-ujJ is in the Stannaries Court, the examination shall he held before

the vicc-icarden. [Abolished by Stannaries Coui't (Abolition) Act, 1896.]
R. 27 of April, 1892, purports to make the notes upon proceedings under sect. 10
of 1890 admissible in evidence, not only as against the person examined, but as
against every creditor and contributory. See the rule, infra, Chap. XLV.



Form 599.

Further report
of official
receiver under

sect. 8 of 1890.



(^Full Title cmcl reference to record.)

The off receiver, pursuant to sect. 8 of the Cos (Winding-up) Act,
1890, hby further reports to the Ct as follows: \_Here state the facts
ivith reference to the formation of the coy, and any other matters xohich in
the off receiver^ s opinion ouyht to he hroiiyht to the attention of the Ct.~\
The off receiver is of opinion that \_state or refer to the jiarticular
transaction^ constituted a fraud in the promotion of the coy committed
by the persons named in the [first part of the] schedule hereto. [The
off receiver is also of opinion that a fraud was, since the formation of
the coy, committed by the directors and other officers of the coy
named in the second part of the sd schedule, in making and carrying
out the sd arrangement under which they secretly, &c.]

, Oft' Eeceiver.



Schedule of persons to bo examined.



Ah to what report must state to justify a public examination of a person, sec
Hupra, p. 525.



PUBLIC EXAMINATION. 529

{Full Title.) Form 599a.

Let all parties concerned attend the Judge in Cliamters at the Royal Smnmons for

Cts of Justice, Strand, London, W.C, on day, the day of , for^onsTdcra-

189 — , at o'clock in the noon, on the hearing of an applicon tion of report

of the off recr of the above-named coy that the report of the applicant, forpuhlic"^
dated, &c., be considered, and such order made thereon as the Ct may examination
deem just. Dated, &c.

This summons was taken out by the off recr in cos liquidation,
33, Carey Street, Lincoln's Inn, W.C.

As to the application being ex parlc, see Trust and Investment Corj^oration, (1892) ^

3 Ch. 332.

As to the consideration of the report, see R. 71 of 1890, supra.

Any further information must be given in the form of a supplemental report in
■writing. Great Eruger Co., (1892) 3 Ch. 318. See Form 611.

{Full Title.) Form 600.



Upon the applicon of Gr. S. B., the off recr in the above matter, by Order direct-
summons dated the day of , 189 — , and upon hearing the mg" apubbc

^ . exaiuniation.

applicant, and upon reading the order to wind up the sd coy, dated, &c., Form 37 of

and the two reports of the applicant made to the Ct, and dated '^'^^py altered

•^ ^^ as in i^ractice.

respectively the, &c., and, &c., It is ordered that the several persons,

whose names and addresses are set forth in the schedule hereto, do

attend before a registrar in bankruptcy of the High Ct on a day to be

named for the purpose, and be publicly examined as to the iDromotion

or formation of the coy, and as to the conduct of the business of the

coy, and as to their conduct and dealings as directors or officers of

the coy.

The Schedule referred to.

(It contains three columns, headed respectively, "name," "address,"
and "connection with the coy.")

In the High Court the practice is to order all public examinations to be taken
before '-a Registrar in Bankruptcy of the High Court."

The names are frequently placed in a schedule -^ith three columns, as in the last
form.

Such an order cannot be served out of the jurisdiction. Ee JTetidt, 22 Q. B. Div.

733.

The date is stated at the beginning of the order, as in other cases, not at the end

as in Form 37 of 1890.

{Address, Date, and Title of matter.) Form 601.

Sir, — I am desired by the off recr to inform you that on the Notice of

an order for a public examination was made in the above matter and o^'^'^r.
that you are one of the persons ordered to be examined. You will
receive notice of the time and place appointed for holding the exami-

p. MM



530



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



nation wlien the same has been fixed. — I am, sir, your obedient ser-
vant, X. Y., Assistant Off Eecr.

Since the E-ules of 1892, it has been the practice to obtain an appointment
without issuing an ex parte summons, notwithstanding R. 73 (supra) is still un-
repealed ; and notwithstanding the next form is contained in the Appendix to
the Rules of 1890, it is not the practice now to make such an order.



Form 602.

Order ap-
pointing a
time for
public

examination.
Form 38 of
1890.



(Title.)

Upon the applicon of the off recr in the above matter, it is ordered that the public

examination of , who by the order of was directed to attend before to

be pubhcly examined , be held at [insert the place for the examination'^, on the

day of , 189 — , at o'clock in the .

And it is ordered that the above-named do attend at the place and time

above mentd.

Dated this day of , 189—.

Note. — Notice is hereby given that if you, the above-named , fail, without

reasonable excuse, to attend at the time and place aforesaid, you will be liable to be
committed to prison without further notice.

As to appointing a day and place for holding the public examination, and giving
notice thereof to the person to be examined, see R. 7i of 1890, supra. And see
notes to last form.



Form 603.

Notice to
attend public
examination,
rorm 10 of
1892 ; 38a of
1890.



The following is the form of notice : —

(Title.)

"Wliereas by an order of this Ct, made on the
it "vras ordered that you the under- mentd ■



189



- day of ,

should attend

before the Hegistrar [or as the case may he'], on a day to be named for
the purpose, and to be publicly examined as to the promotion or
formation of the coy, and as to the conduct of the business of the
coy, and as to your conduct and dealings as [insert "director," or
" officer," or as the case may be].

And whereas the day of , 189 — , at o'clock in the

noon, before the Registrar sitting at -



•, has been appointed as
the time and place for holding the sd examination.

Notice is hby given that you are required to attend at the sd time
and place, and at any adjoiirnments of the examination which may be
ordered, and to bring with you and produce all books, papers, and
writings, and other documents in your custody or power in any wise
relating to the above-named coy.

And take notice that if you fail, without reasonable excuse, to attend
at such time and place and at the adjournments of the sd public
examination which may bo ordered, you wiU be liable to be committed
to prison Avitliout further notice.

Dated the day of , 189—.

To \Namc] Off Recr.

[^Address']



PUBLIC EXAMINATION. 531

{Title.) Form 604.

Take notice that tlio public examination of in the above Notice to

matter, held on the day of , 189 — , at , was adjourned adjourned

to the day of , 189 — , and will accordingly bo held at , public

,1 T 1 , ) 1 1 • it, examination,

on the sd day, at o clock m the — ^-noon.

Notice is hby given that you are required to attend at the sd time
and place, and at any adjournments of the examination which may be
ordered, and to bring with you and produce all books, papers, and
writings and other documents in your custody or power in anywise
relating to the above-named coy.

And take notice that if you fail, without reasonable excuse, to attend
at such time and place, and at the adjournments of the sd public
examination which may be ordered, you will be liable to be committed

to prison without further notice. Dated the day of , 189 — .

C. J. S., Off Recr in Cos Liquidation. \_Adclress.']

To .



Upon the adjourned public examination in the on day, Form 605.

the day of , at in the forenoon, before , at 34, Notice to



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