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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the order dated 25th March, 1878, made upon tho summons of tlie Order on an-
[off] liqr issued in tho above matters against tho appellants, and dated peal affirming
26th Oct. 1877, might bo rescinded, and that the same might bo pealecffrom
dismissed with costs, to be taxed and pd b}' the [off] liqr to the
appellants, and upon hearing counsel for the [off] liqrs, &c., the depo-
sition of the sd , taken upon his cross-examination, filed 9th May,

1878, Order that the sd order, dated 25th ISIarch, 1878, be affirmed,
and that the sd P. and B. pay to the [off J liqr his costs of this appeal,
such costs to be taxed, &c. British Farmers, ^'c. Co., C. A., 15th May,
1878. A. 935.



Upon motion by way of appeal on 15th Nov. 1883, &c., and this day Form 692.

made unto this Ct by counsel for tlie liqr of coy, and upon hearing r~j IT

counsel for E. H., and upon reading the sd order, this Ct doth affirm ing- order,

the sd order dated 16th Dec. 1882. And order that the sd T., the liqr f ^^^ Pf,^^- *"

.TIT be paid by the

of the company, do pay to the sd H. his costs occasioned by the sd liquidator.

applicon, such costs to be taxed by the taxing master.

The costs of shorthand notes of the judgment below are now included, without Shorthand

being specially mentioned, in the costs of appeal. The Court of Appeal does not ^^^es.
say how the costs payable by the liqiiidator are to be reimbixrsed, but lea\'es him to
apply in the winding-up. Silver Valletj Mines, 21 Ch. Div. 3S1.



Upon the applicon of the liqr of coy, and upon reading, &c., and an Form 693.
order made in the suit of, &c., whereby it was ordered that, &c. [bill Z~, ~
dismissed~\. And it was further ordered that such order should be ing liqui-
without prejudice to any applicon the liqr of the sd coy might make to 'i'ltor's costs
the judge at Chambers for the allowance of the costs of the sd coy in

the sd suit of , out of the assets of the sd coy. Order that the

costs of the above-named coy in the sd suit, &c., and of this applicon,
and consequent thereon, be allowed as costs in the winding-up of
the above-named coy. General South American Co., Malins, V.-C,
9th March, 1878. A. 421.



Appeals from the Palatine Courts.

Appeals from the Lancaster Palatine Court are to the Court of Appeal. See
Jud. Act, 1873, ss. 17, 18 ; and R. S. C. 1883, r. 15.



590



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



These appeals are brought within the Act of 1894 by the following provision : —
Lancaster. Chancery of Lancaster Act, 1890 (53 & 54 Vict. c. 23), s. 4.— (1.) Her Majesty's

Court of Appeal shall, as to all judgments and orders of the Lancaster Chancery
Court, have and exercise the like apx^ellate and original jurisdiction as the Court of
Appeal now exercises, or may, under or by virtue of any Act of Parliament here-
after passed, and not expressly enacting to the contrary hereof, have and exercise
with respect to judgments and orders of the High Court or of any judge thereof.
Durham. (2.) All judgments and orders of the Court of Appeal in caiises or matters now

pending or hereafter to be commenced in the Lancaster Chancery Court shall be
subject to appeal to the House of Lords in like manner as judgments or orders of
the Court of Appeal in causes or matters commenced or pending in the High Court.
As to appeals from the Durham Palatine Court, see 52 & 53 Vict. c. 47, s. 11,
wbich is mucli to the same effect, and expressly forbids direct appeals from the
Palatine Court to tbe House of Lords.



Eepeal of
sect. 43 of
1867.



Appeal to
Divisional
Court.



Appeals from County Courts.

Sect. 43 of the Companies Act, 1867, providing for appeals from County Courts
in winding-up matters to a judge of the Chancery Division, is repealed by sect. 33
of 1890.

Even before this repeal, appeals in matters of discretion were not to the Chancery
Division alone. Jones v. Swansea Builditig Society, 50 L. J. C. P. 428.

The only mode of appeal from a County Court pointed out hy the Act of 1890 is
by special case. See sect. 3 (3), infra.

But in other cases an appeal lies to a Divisional Court of the Queen's Bench
Division.

Supreme Court of Judicature (Procedure) Act, 1894, s. 1 (5). — In all cases where
there is a right of appeal to the High Court from any Court or person, the appeal
shall be heard and determined by a Divisional Court constituted as may be pre-
scribed by rules of Court ; and the determination thereof by the Divisional Court
shall be final, iinless leave to appeal is given by that Court or by the Court of Appeal.



Special Case.

Special case. Sect. 3 (3) of 1890. — If any question arises in any winding-up proceeding in a

County Court or in the Stannaries Court which all the parties to the proceeding, or
which one of them and the judge of the Court, may desire to have determined in
the first instance in the High Court, the judge shall state the facts in the form of a
special case for the opinion of the High Court, and thereupon the special case and
the proceedings, or such of them as may be required, shall be transmitted to the
High Court for the purposes of the determination.

The special case, &c., are to be sent to the High Court, but the jurisdiction is,
under sect. 2 of 1890, and the order of 26th March, 1892, vested in Vaughan
Williams, J.

As no rules have been made to carry out this provision, R. 178 of 1890 imports
the existing procedure in the High Court with reference to special cases ; as to
which, see An. Pr. (1897) pp. 682—688.

Transfer. But as, under sect. 3 (1) of 1890, any proceedings in the winding-up may be

transferred, and at any stage, it will often be more convenient to apply to the High
Court to transfer the particular proceedings to that Court.



APPEALS AND SPECIAL CASE. '^^1

Even before the Building Societies Act, 1894, it was held that in the winding-uii
in the County Court of a building society registered under the Building Societies
Act, 1874, a special case for the opinion of the High Court might be stated under
sect. 3 of the Act of 1890. Portsea Island Bmlding Society, (1893) 3 Ch. 205. And
gee now sect. 8 of the Act of 1894 (57 & 58 Vict. c. 47).

As to appeals from County Courts in matters formerly within the jurisdiction of ?*^°^^"^J^
the now abolished Stannaries Court, and as to appeals generally from County 3*^^^*^
Courts, see Chap. LIII.



)92



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



CHAPTER L.

REMOVAL, RESIGNATION, AND DEATH OF LIQUIDATOR ; AND FILLING

UP VACANCIES.



Court's power
to remove.

rilling-
vacancies.

Official re-
ceiver to act
diiring
vacancy.
Board of
Trade's po-wer
to remove.



Report on
accounts.



Release.



Proceedings
on fresh
appointment.



Failure to
give or keep
up security.



Sect. 93 of 1862. — Any [official] liquidator may resign or be removed by the
Court on due cause shown ; and any vacancy in the office of an [official] liquidator
appointed by the Court shall be filled by the Court.

[This section is not repealed by the Act of 1890.]

Sect. 4 (4) of 1890. — If any vacancy occurs in the office of liquidator of a com-
pany, the official receiver shall, by virtue of his office, be the liquidator during the
vacancy.

Sect. 11 (4) of 1890. — If any .... liquidator at any time retains for more than
ten days a sum exceeding fiity pounds, or such other amount as the Board of Trade
in any particular case authorize hhn to retain, then, unless he explains the reten-
tion to the satisfaction of the Board of Trade, he shall pay interest on the amount
so retained in excess at the rate of twenty pounds per centum per annum, and shall
be liable to disallowance of all or such part of his remuneration as to the Board
shall seem just, and to be removed from his office by the Board, and shall be liable to
pay any expenses occasioned by reason of his default.

Sect. 22 of 1890. — (1.) "Where the liquidator of a company which is being wound
\i\> by order of the Court has resigned, or has been removed from his office, the
Board of Trade shall, on his application, cause a report of his accounts to be pre-
pared, and, on his complying with all the requu-ements of the Board, shall take
into consideration the report, and any objection which may be urged by any
creditor, or contributory, or person interested, against the release of the liquidator,
and shall either grant or withhold the release accordingly, subject, nevertheless, to
an appeal to the High Coiu't.

(4.) Where the liquidator has not previously resigned or been removed, his release
shall operate as a removal of him from office.

[See further, as to Release, Chap. LI.]

E. 65 of 1890. — In case of the death, removal, or resignation of a liquidator,
anotlier may bo appointed in his place in the same manner as directed in the case
of a first appointment, and the official receiver shall, on the request of not less than
one-tenth in value of the creditors or contributories, summon meetings for the
purj)oso of determining whether or not the vacancy shall be filled.

[^Cluare, whether this applies where an official receiver was originally appointed
liquidator, and another official receiver is appointed in his place.]

E. 68 of 1890. — (1.) If a liquidator fails to give the required security within the
tim(; stated for that purpose in the order appointing liim, or any extension thereof,
the official receiver shall report such order to the Court, who shall thereupon rescind
the order appointing the liquidator.



REMOVAL, ETC. OF LIQUIDATOR FILLING UP VACANCIES. 593

(2.) If a liquidator fails to keep up his security, the official receiver shall report
such failure to the Court, who may thereupon remove the liquidator . . . and
make such order as to costs as the Court shall think fit.

Besides the grounds for removal specified in the Act and Rules of 1890, there are Grounds for
other grounds, as shown by the cases decided before 1891 on sect. 93 of 1862. removal.

The words "on due cause shown" are not equivalent to "if the Court shall
think fit." Sh- John Moore Gold Co., 12 Ch. Div. 325. As a general rule, "they
point to some unfitness of the person — it may be from personal cliaractcr, or from
his connection with other parties, or from circumstances in which he is mixed up —
some unfitness in the wide sense of the term." Per Jesscl, M. R., in the case last
mentioned, where the application was under sect. 141, which contains similar words.
He may be removed whenever it is for the interests of the liquidation. Adam Eyton
^' Co., 36 Ch. Div. 299. In Oxford Building Soc. (49 L. T. 495), where a liquidator
had been appointed by the shareholders, and a supervision order was subsequently
made, Kay, J., expressed an opinion to the effect that if it were shown that all
the creditors desired his removal, and that the company was insolvent, that would
be due cause shown. In Association of Land Financiers (10 Ch. D. 269), the official
liquidator was removed on motion made on behalf of a large majority of the unsecured
creditors, and two creditors who were willing to act gratis were appointed in his
place. But this has not been followed ; and in Civil Service and General Stores,
"W. N. (1884) 158, Chitty, J., refused to displace an experienced official liquidator,
against whom no personal objection was raised, in favour of a large creditor who
was willing to act gratis.

The application for removal is usually by summons, but occasionally it is made How appli-
by motion or petition. cation to

Under the old practice, sometimes a new liquidator was appointed by the order
removing the old one, and sometimes by a subsequent order ; but the former
course cannot now be followed. See R. 65 of 1890, supra.

A contributory who has not paid a call cannot ajDply for removal of liquidator.
Mrivich Provident, W. N. (1879) 216.

The liqviidator may appeal from an order of the Court removing him. Adam Appeal.
Eyton ^- Co., ubi supra.

As to when the Court of Appeal will interfere, see Sir John Moore Co., ubi supra.

As to the liquidator, on being removed, delivering up his books, &c., see R. 141
of 1890, set out in Chap. LI.

As to the "manner directed in the case of a first appointment," referred to in Calling
R. 65 of 1890, supra, see Chaps. XVII. and XVIII. meetings.

As to summoning the meetings, see Chap. XV.

R. 65, sujyra, p. 592, probably means that meetings of the creditors and con-
tributories shall be called, held, and conducted exactly in the same manner as
the first meetings of creditors and contiibutories, and that application shaU then
be made to the Court as in the case of a first appointment.

The new liquidator will have to give security, see Chap. XIX.

Upon the applicon by summons dated, &c. of S., the senior off recr poj-jji 694.

attached to this Ct, and upon hearing the solor for the applicant, the — — —

order to wind up, (S:c., dated, «S:c., and the afft, &c., It is ordered that substituted

the publication by advertisement in the form set forth in the schediJe service of
IP, . ,.,. TToi-x-L ^ s sununons to

hto of the summons issued m this matter dated, &c. for the removal oi remove liqui-

X. from the office of liqr of the above-named coy, and of this order dator.

once in the London Daily Chronicle, and the sending a copy of the sd

P. Q Q



594



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



summons and a copy of the sd order through the post office prepaid in

a registered enveloj)o addressed to the sd X. at , be deemed good

service of the sd summons on the sd X.

Schedule.

To X. of, &c., the liqr of the above-named coy.

Take notice that on the 30th day of Oct. 1895, a summons was issued
in the matter, &c. \^set out full title'], for an order that you the sd X.
might be removed, &g., And take notice that by an order dated the
31st day of Oct. 1895, it was ordered that [^recite order above], And
take notice that the Ct has fixed Monday the 11th day of Nov. 1895,

at o'clock in the forenoon, as the time at which you are to attend

at , upon such applicon, And that if you do not then attend either

in person or by your solor, such order will be made and proceedings
taken as the Ct may think just and expedient. Bristol Empire Palace
of Varieties (0060 of 1895), Hood, Eeg., 31st Oct. 1895.



Form 694a. Upon the applicon by summons, dated, &c. of D., of



Order

removing

liquidator.



Other orders
for removal.



Costs.



•, creditors

of the above-named coy and of S., the senior off recr attached to this
Ct, and upon hearing the solor for the applicants, for the coy, and the
respondent X., the liqr of the above-named coy appearing in person,
and upon reading the order to wind up the sd coy dated, &c., the order
dated, &c. appointing the sd X. liqr of the above-named coy, the order
dated, &c., and the afltts of, &c. [and the sd respondent X., the liqr of
the above-named coy, desiring to retire from his office of liqr as afsd].
It is ordered that the sd X. be and he is hby removed from the office of
liqr of the above-named coy ; And it is further ordered that the costs
of the sd applicon and of the sd order dated, &e. [see Form 694], be
taxed and pd out of the assets of the above-named coy. Bristol Empii'e
Palace of Varieties (0060 of 1895), Hood, Eeg., 11th Nov. 1895.

For orders removing official liquidators, and in some cases appointing other
persons in their place, under the old practice, see Moorwood Moor, i^-c. Co., Malins,
V.-C, 22nd Nov. 1876. B. 1940; Universal Fire, §c. Co., Kay, J., 15th June,
1883; John Marsland ^- Co., Chitty, J., 16th April, 1883. A. 562; Alexandra
Palate Co., Malins, V.-C, 4th Dec. 1878. A. 2151 ; Brickinalt Collieries Co.,
Jessel, M. R., 26th May, 1879. A. 1250. And see Part 11., p. 578.

For order, under R. 68 of 1890, rescinding order appointing liquidator, see
Form 182, p. 195, supra.

For order appointing official liquidator in place of a bankrupt official liquidator,
and ordering the bankrupt and his trustee ia bankruptcy to bring in and pass final
accounts, and to deliver over property to new liquidator, see Anlomatic Block Co.,
Bacon, V.-C, I7th Dec. 1883. A. 1839.

For order directing licpiidator to pay out of the company's assets the costs of
a person on wlioso application a former lic^uidator was removed, but without
prejudice to company's right to recover the amount from the removed liquidator,
see Cotnmercial Bank, Limtd, Hall, V.-C, 6th May, 1878. A. 2152.



REMOVAL, ETC. OF LIQUIDATOR — FILLING UP VACANCIES. 595

Upon the peton of A. C, &c., and F. W., &c., and it appearing to Form 695.
the satisfaction of the Ct that J. W., the late off liqr of the above- Vesting
named society, has been removed from being such off liqr, and that order,
the sd J. AV. is out of the jurisdiction of this Ct, and the petrs A. C.
and F. W. have been appointed joint off liqrs in his j^lace, the judge
doth declare that the sd J. "W. is a trustee within the meaning of the
Trustee Act of the 10,2307. 3,s-. Id. New Zl. per Cent. Annuities stand-
ing in the books of the bank in the name of the sd J. "W. by the
following description: — "J. W., off liqr of the Mutual Society";
And this Ct doth order that the right to transfer the sd 10,2807. 3s. 7r/.
New 3Z. per Cent. Annuities, and to receive the dividends accrued
thereon, do vest in the petrs A. C. and F. W. as such off liqrs as afsd ;
And it is ordered that the petrs do transfer the sd sum of 10,2307. 35. Id.
New 37. per Cent. Annuities into their own names, to be held by them
as such off liqrs as afsd ; And costs of petrs of and relating to this
applicon be taxed and pd out of the funds of the society. Mutual
Society, Chitty, J., 7th Apr. 1884. B. 556.

See Capital Fire Co., 55 L. T. 633.



a Q 2



596



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



CHAPTER LI.



RELEASE OF LIQUIDATOR.



Board of

Trade's power
to grant
release.



Appeal to

Court.



Effect of
release.



Delivery up
of books.



Notice of
application
for release.



Gazette
notice.



Sect. 22 of 1890. — (1.) When the liquidator of a company -whici. is being wound
up by order of the Court has realized all the property of the company, or so much
thereof as can, in his opinion, be realized without needlessly protracting the
liquidation, and distributed a final dividend, if any, to the creditors, and adjusted
the rights of the contributories between themselves, and made a final return, if any,
to the contributories, or has resigned, or has been removed from his oflBce, the
Board of Trade shall, on his application, cause a report on his accounts to be pre-
pared, and, on his complying with all the requirements of the Board, shall take
into consideration the report, and any objection which may be urged by any
creditor, or contributory, or person interested against the release of the liquidator,
and shall either grant or withhold the release accordingly, subject nevertheless to an
appeal to the High Court.

(2.) Where the release of a liquidator is withheld the Court may, on the applica-
tion of any creditor, or contributory, or person interested, make such order as it
thinks just, charging the liquidator with the consequences of any act or default he
may have done or made contrary to his duty.

(3.) An order of the Board releasing the liquidator shall discharge him from all
liability in respect of any act done or default made by him in the administration of
the affairs of the company, or otherwise in relation to his conduct as liquidator, but
any such order may be revoked on proof that it was obtained by fraud or by sup-
pression or concealment of any material fact.

(4.) Where the liquidator has not previously resigned or been removed, his
release shall operate as a removal of him from his ofiice.

E. 141 of 1890. — Upon a liquidator resigning, or being released or removed from
his office, he shall deliver over to the official receiver, or as the case may be, to the
new liquidator, all books kept by him, and all other books, documents, papers and
accounts in his possession relating to the office of liquidator. The release of a
liquidator shall not take effect unless and until he has delivered over to the official
receiver all the books, papers, documents, and accounts which he is by this rule
required to deliver on his release.

R. 148 of 1890. — A liquidator, before makiug application to the Board of Trade
for hi.s release, shall give notice of his intention so to do to all the creditors who
liave jirovcd their debts and to aU the contributories, and shall send with the notice
a suiuiiiary of his receipts and payments as liquidator.

E. 149 of 1890.— Where the Board of Trade have granted to a liquidator his
release, a notice of the order granting the release shall be gazetted. The liquidator



RELEASE OF LIQUIDATOR. ■ ^^^7

stall provide the requisite stamii fee for the Gazette, which he may charge against
the company's assets.

Paragraph 3 of sect. 22 of the Act of 1890 is expressed in very wide and general Effect of
terms. It follows the terms of paragraph 3 of sect. 82 of the Bankruptcy Act of f^ect. 22 of
1883, and of sect. 53 of the Banki'uptcy Act, 1869. Under that section it was held
that where a trustee had obtained his discharge ho could not be made liable by the
Court of Bankruptcy in respect of a liability which he had omitted to provide for.
Hx parte Carter, In re Ware, 8 C. Div. 731. It was contended that the trustee had
committed a fraud in making no provision for this liability, but it was held by the
Court of Appeal that his conduct was not fraudulent, and that the discharge was
effective. See also Hx parte Barnard, 4G L. T. 824, and Socivle Coekrill, 3 C. Div.
115 ; He Maiden, 55 L. T. N". S. 708, and In re Chudleij, 14 Q. B. D. 402.
In this case it was held that a trustee who had obtained his release under the
Bankruptcy Act, 18G9, is not thereby relieved from rendering an account to the
Board of Trade for his receipts and payments as such trustee. It may be convenient
here also to refer to Coxon v. Gorst, (1891) 2 Ch. 72. In this case it was held that
where a company had been wound up under a compulsory order and dissolved under
sect. Ill of the Companies Act, 1862, it was not competent to a creditor to proceed Liquidator's
against the late directors and official liquidator in resjDect of breach of trust com- lia-^ility to
mitted whilst the company was a going concern — fraud not being alleged. See also Qtiier')
Knowles v. Scott, (1891) 1 Ch. 717, in which it was held by Romer, J., that a liqui-
dator is not to be considered as trustee for every creditor or contributory of the
company, and accordingly that he cannot be sued by a creditor or contributory for
negligence apart from misfeasance or personal misconduct. "All that I hold," said
the learned judge, " is that the liquidator is not liable to an action for damages for
delay in performing his duty when that delay was not wilful or fraudulent, and in
no way arose from mala fides on his part."



{Title.) Form 696.



Take notice that I, the undersigned [off recr and] liqr of the above- Notice to

named coy, intend to apply to the Board of Trade for my release, and creditors and
•^ ' , i- r J ^ ^ J 1 ^ contnbutones

further take notice that any objection you may have to the granting of intention

of my release must be notified to the Board of Trade within twenty- to J^-pply for

■^ '' release,

one days of the date hereof. Form 78 of

A summary of my receipts and payments as [off recr and] liqr is ^^^'^•

hereto annexed.

Dated this day of , 189 — .

G-. H. [Off Eecr and] Liqr.
To K. L.

Note. — The off reer's form contains the following words: "It is
provided by sect. 4 (4) and sect. 22 (4) of the Cos (Winding-Up) Act,
1890, that upon the release of a liqr the off recr shall become liqr for
the purpose of dealing with any matters which may subsequently
arise." Sect. 22 (3) of the Cos (Winding-up) Act, 1890, enacts that
\the form sets oxit the suh-sectioiiy which is stated above^.



598



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



Form 697.



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RELEASE OF LIQUIDATOR. 599

( Title.) Porm 698.

I, A. B., of 33, Carey Street, Lincoln's Inn, London, W.C, Cleric in Certificate of
the office of tlie Off Eecr in Cos Liquidation, hereby certify : — postajfo of

1. That I did on the day of , 189 — , send to all the official



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