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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in this matter, and at the trial thof, as the applicants shall require.
Ardleigh Bread Co., 1891, A. 187, Stirling, J., 10 March, 1891.
A. 293.



Ui^on the applicon of L. and W., two of the contributories of the Form 757a.
above-named coy, by summons dated, &c., and upon hearing the solors Order for
for the applicants and for E., the liqr in the voluntary winding-up of cross -exami-
the above-named coy, and upon reading the originating summons issued affidavits.
in this matter by sd E. on, &c. Order that the applicants be at liberty
to cross-examine E. [viz., the l{qr~\ of, &c. upon the two several affts
made by him in the matter of, &c., and resply filed, &c., B. of, &c.,
upon the afft made by him in the same matter and filed, &c., and H.
of, &c., upon the afft. See, the sd E. having given notice to the appli-
cants to read the sd affts upon the hearing of the sd originating, &c.,
And it is ordered that such cross-examination be taken before one of
the examiners of the Ct, And it is ordered that the sd E., B., and H.
resply attend for cross-examination before the sd examiner at such
time and place as the sd examiner may appoint, And that the sd E.
shall not be at liberty to use or read any such afft, the dejDonent to
"which shall not attend as afsd as evidence on the hearing of the sd
originating summons.

The above form is taken in substance from Mexican Tobacco Flantaiions (00224 of
1895), Vaughan Williams, J., at Chambers, 18th Dec. 1895.



Upon the applicon of K., of, &o., the liqr of the above-named coy, by summons Form 758.
dated, &c., and upon hearing, &c., and reading the originating summons issued in
this matter dated, &c., the London Gazette dated, &c., the two sevei'al affts, &c. It



Order for



cross-exami-
is ordered that C. and S. do resply attend before the Regr (Cos W mdmg-up) at the nation and for

Bankruptcy Buildings, Carey Street, London, on day, the day of , discovery of

1893, at, Sec, for the jjurpose of being resply cross-examined on their sd affts resply documents.

filed in these matters and hiubofore meutd. And it is further ordered (by consent) that

such cross-examination shall be taken by a shorthand writer, and that the costs thof

shall be included in the costs of this matter. And it is further ordered that the sd



662



VOLUNTARY WINDING-UP.



respt C. do produce tlie sd S. for cross-examination before the sd Regr accordingly.
And it is further ordered that unless the sd C. attend for cross-examination as afwd,
and unless the sd C. be produced for cross-examination as afsd the sd respt C. shall
not be at liberty to read or use the sd affts as evidence in these matters without the
special leave of the Court. And it is further ordered that the respt C. do, -within
seven days after the service of this order, make and file a full and sufficient aff t
stating whether he has or has had in his possession or power any and (if any) what
documents relating to the matters in question the subject of the sd originating
summons hinbfore mentd, and accounting for the same. [^Order for production of
documents, and liberty to inspect, peruse and copy.'] And it is further ordered that the sd
respt C. do produce the same upon any examination of witnesses in these matters,
and at the hearing of the sd originating summons, as the applicant shall require.
And the applicant is to be at liberty to make such fiu-ther applicon as to all or any
of the documents mentd in such afft as he shall be advised. And it is further
ordered that the time within which the applicant file his evidence in reply be
extended until fourteen days after the cross-examination hinbfore mentd shall have
taken place and the sd afft of documents shall have been filed. And it is further
ordered that the originating summons herein shall not be in the judge's court list
for hearing until seven days after completion of the applicant's evidence in reply.
Governor ^- Co. of Anticosti, 00147 of 1893. Reg. 8th Feb. 1893.



Form 759.

Representa-
tion order.



Upon the applicon by summons, dated &:c., of A. and B., the
applicants named in the originating notice of motion in these matters,
dated etc., and upon hearing the solors for the appHcants and for the
coy, and S. and K., the liqrs of the above-named coy, and upon
reading the sd notice of motion in the London Gazette, dated &c.,
and the afft of &c., and the parties appearing herein consenting to S.
being the person to be appointed as hnftr directed. It is ordered
that S., one of the liqrs of the above-named coy, and one of the respts
named in the sd notice of motion, and a debenture holder of the sd
coy, be appointed to represent on the hearing of the sd motion all the
debenture holders of the coy who have assented to the agreement for
sale and reconstruction, dated &c., referred to in the sd notice of
motion, and to defend the sd motion on their behalf. Metal Reduction
Spidicate, Lrmtd., 00173 of 1892. Eeg., 2nd Dec. 1892.



Form 760.

Order giving
general
liberty to
apply.



Upon the applicon of the above-named coy, by summons dated the
7th April, 1877, and upon hearing the solors for the applicants, and
upon reading the London Gazette of the 10th of April, 1877, publishing
notice of a general meeting of the members of the said coy, held on
the 16th of March, 1877, at which it was resolved that the said coy
should be wound up voluntarily, and also appointing Messrs. L. and D.
liqrs of tlie sd coy, and passing certain other special resolutions, and
notices of an extraordinary general meeting of the members of the sd
coy, hold on the 6th of April, 1877, confirming such resolutions.
Order that the sd liqrs or any contributories of the sd coy may, from
time to time, apply to this Ct to determine any question arising in the



EXAMINATION OF OFFK^JJIS.

•winding-up of the sd coy, and to exercise, as respects the enforcing of
calls, or in respect of any other matter, all or any of the powers which
this Ct could or might exercise if the said coy was being wound up by
the sd Ct. And order that such proceedings bo taken for the purpose
of ascertaining and adjudicating upon the debts of and claims upon
the sd coy as the judge shall direct. Argentine Tramivays Co.,
HaU, V.-C, 17th April, 1877. A. C87.

An order giA-ing liberty to apply, as above, is sometimes made on the application
of the liquidator. The object is to facilitate applications to the Court by avoiding
the necessity of taking out an originating summons, whenever application by
summons has to be made. Where such an order has been made, application can be
made by ordinary summons. Possibly there may be some doubt as to the jui'isdic-
tion to make the order, but such orders have been found to be very convenient in
actual practice, and they save a good deal of expense and. time.

See also London and Asiatic Co., Malins, V.-C, 12th Dec. 1876. B. 1960.



Supervision Order.

Occasionally it may be desirable for a liquidator to petition, or to obtain some
friendly creditor to petition, for a supervision order. In the former case the
petition will be in the name of the company, and the petition need not state that
the company is applying by its liquidator or join him as a co-petitioner or
respondent. Caledonian Mineral Oil Co., V. Williams, J., 24th March, 1897. The
practice down to and including the making of the order is the same as that in respect
of proceedings for a compulsory order. See Section I., Chaps. I. to. IX. As to
the form of order and subsequent proceedings, see Section III. Such an order
tends to prevent a subsequent compulsory order being made, and it gives to creditors
the full right to apply in the liquidation for directions to the liquidator, and thus
removes one cause of complaint which they have in a voluntary winding-up.

As to liquidator petitioning for a supervision order in case of creditors threaten-
ing proceedings, see Zoedone Co., 53 L. J. Ch. 465.

It must be remembered that, if a supervision order is made on a creditor's
petition, although the previously incurred costs of the liquidator are payable in
priority to those of the petitioner in obtaining the supervision order, the last named
costs have priority over the subsequently incurred costs of the liquidator. Neiv
York Exchange Co., (1893) 1 Ch. 371.

A creditor cannot obtain a supervision order unless he possesses all the qualifica-
tions required of a creditor petitioning for a compulsory order. Bank of South
Australia (1), (1894) 3 Ch. 722.



Examination of Officers and others.

The liquidator can, under sect, llo of 1862, have directors and contributories and
other persons examined as to the affairs of the company. The application is by
originating summons (on the lines of Form 586a), tuider sect. 138, for liberty to
examine, and then the directors or other persons to be examined will bo directed by
the Court to appear (see Form 588), and will have to answer on oath.

In the High Court, unless otherwise dii'ected by the Judge, the examination
takes place before the registrar in Chambers. R. 3 (2) of April, 1892.

See further. Section I., Chap. XLIII.



663



661



VOLUJSITARY WINDING-UP.



Form 761.

Order for

private

examination

under

sect. 115 of

1862.



Upon the applicon of P. and others, the liqrs iu the voluntary winding-up of the
above coy, by originating summons dated &c., and upon hearing the solors for the
applicants, and upon reading the ailt of the sd P. and E., two of the liqrs, filed, &c.,

and upon reading the advertisement in the London Gazette of the of , 18 — ,

of the special [or extraordinary] resolution passed for winding-up the said coy
voluntarily. Order that the said liqrs be at liberty, for the purpose of the proceedings

now pending in the winding-up of the coy, to examine N., of , late managing

director of the coy, under the provisions of sect. 115 of the Cos Act, 1862.

[The practice now is not to draw up an order even in a voluntary winding-up.
See note to Form 586a.]



Misfeasance.

A vohintary liquidator has to look into the affairs of a company and ascertain
whether any misfeasance, fraudulent preference, or breach of trust has been com-
mitted by any of its officers, and if necessary he must take proceedings in respect
thereof. The matter is dealt with in sect. 10 of the Act of 1890, which is expressly
applied to voluntary liquidations. See Section I., Chap. XLV.

The application, when by a voluntary liquidator, is by originating summons
under sect. 138 of 1862.

Prosecution of Directors, &c.

The voluntary liquidators, with the previous sanction of the Court, may prosecute
the offender, and all expenses properly incun-ed in such prosecution are payable out
of the assets of the company in priority to all other liabilities. See sect. 168 of
1862, and Section I., Chap. XLVI.



Priority.



Payments on
account.



Taxation.



Costs.

Sect. 144 of 1862. — AH costs, charges, and expenses properly incurred in the
voluntary winding-up of a company, including the remuneration of the liquidators,
shall be payable out of the assets of the company in priority to all other claims.

But this section does not give priority over mortgagees and others having specific
security on the assets at the commencement of the winding-up, except so far as the
liquidator's costs are costs of preservation or realization, of which the mortgagees
have had the benefit. Reyenfs Canal Ironworl's Co., Ex parte Grisscll, 3 Ch. Div. 411.

As the costs of winding-up form a first charge, the liquidator can from time to
time make payments on account. In most cases the liquidator pays the solicitor's
bill without taxation, but he should remember that he may at any time be called on
to bring in his account, and if he has overpaid the solicitor, may be held responsible
for the difference. Accordingly, in some cases, the solicitor gives the liquidator an
undertaking that if he should at any time be disallowed any part of the bill, the
amount shall be refunded. Occasionally the parties think it more prudent to get
the bill taxed before payment. In order to obtain taxation, a summons should be
taken out under sect. 138, as above. The liquidator is not personally responsible to
his solicitor for the costs of the winding-up. Tricenian^s Estate, 14 Eq. 278 ; In re
Masset/, 9 Eq. 367. And see Section I., Chap. XLVIII.



Form 762. Lot, &c., On tlio hearing of an applicon on the part of M., of ,

Summons for '^ ^'^"^ County of , the liqr of the above-named coy, that it may be

taxation of referred to the projior taxing master to tax as between solor and client

liquidator ^^^ costs, charges, and expenses of the applicant as voluntary liqr of



FINAL MEETING.



665



the above-named coy since his appointment on the 9th Nov. 1891, up
to and including the order to be made on this summons. Dated 10th
July, 1892. Mexican English Syndicate, Limtd.



Upon the applicon by originating summons, dated 30th July, 1892, Form 763.

by M., of , the liqr of the above-named coy, and upon hearing Ordcr for

solors for the applicant, and upon reading the London Gazette of 11th taxation on
Dec, 1891, It is ordered that it be referred to the proper taxing master p,,Tnmona
to tax as between solor and client the costs, charges, and expenses of
the applicant, as voluntary liqr of the above-named coy, since his
appointment on the 8th Dec, 1891, uj) to and including this order, but
in taxing such costs, »S:c. Mexican English Syndicate, Limtd. Eeg.,
3rd Aug. 1892.

The order does not now refer to the taxing master, but simply directs the costs to
be taxed.

(Title referring to Acts of " 1862 to 1890.") Form 764.

In pursuance of an order in this matter dated the day of , Certificate of

I hereby certify that I have been attended by the solors for N., the taxation of
liqr of the above-named coy, and the costs [charges and expenses] of yoluntarr
the said N., including therein his costs by the said order directed to be liquidator.
taxed, I have taxed at the sum of 1., including the fees of taxa-
tion [and it appearing from the afft of , filed, &c., that the sum

of /. has been received on account of costs or otherwise, there

remains an ultimate balance of 1, due in respect of such costs].

Dated the day of , 189—.

H. J. H., Regr.

Final Meeting.

As soon as the company's affairs are fully -wound up, the liquidators make up an How
account showing how the winding-up has been conducted and the property disposed convened.
of, and call a general meeting, before which the account is laid and an explanation
is given by the liquidators. The meeting is called by advertisement, specifying its
time, place, and object, and the advertisement is published one month at least
previously to the meeting in the London Gazette. See sect. 142 of 1862.

The Coy, Limtd.

Notice is hby given in pursuance of sect. 142 of the Cos Act, 1862,

that a general meeting of the members of the above-named coy will be ^"o'l^-e con-
iiii 1,1 <• 11T.1,. veninsj fiual

held at , on day the oi , at o clock m the after- meeting.

noon, for the purpose of having an account laid before them, showing

the manner in which the wiuding-up has been conducted, and the ppty

of the coy disposed of, and of hearing any explanation that may be



Form 765.



6(36



VOLUNTARY WINDING-UP.



Destruction
of books.



Gazette
notices.



Proceedings
at meetinar.



given by the liqr, and also of determining by extraordinary resolution
the manner in which the books, accounts, and documents of the coy,
and of the liqr thof, shall be disposed of.

Dated the day of .

At-D., Liqr.

Besides the purposes mentioned in sect. 142 (supra), for which a general meeting
is called, there is another for which an extraordinary resolution generally passed at
the same meeting is called, viz., the destruction of the books, as to which see
sect, loo of 1862.

And where the meeting is to dispose of the books, &c., besides advertising the
meeting, as required by sect. 142, notice to the same efPect must also be given to the
members of the company, by post or otherwise, as provided by the articles thereof,
so as to comply with the requirements of sect. 129 as to an extraordinary
resolution.

The notice for insertion in the Gazette must be signed by the liquidator. If the
signature is attested by a solicitor whose name is in the Law List, that may be
sufficient, but sometimes the Gazette requires a duplicate to be verified by the

statutory declaration of some person who will state that he was present on the

^ay of , and saw [the liquidator'] sign the notice hereto annexed, and that

the signature set and subscribed to the said notice as the attesting witness to

the said signature is of the proper handwriting of the declarant.

At the meeting the liqvudator will present the account referred to in the notice,
and will give any requisite explanations ; and resolutions will be passed for the
adoption thereof, and as to the books, e.g.: — 1. That the account submitted to this
meeting, and showing the manner in which the winding-up has been conducted, and
the property of the company disposed of, be received and adopted. 2. That the
books, accounts, and documents of the company, and of the liquidator thereof, be
retained by the said liquidator, he undertaking to destroy the same upon the dis-
solution of the company, or, handed over to the purchaser of the company's

[leasehold property-].



Importance
of dissolving.



Effect of dis-
solution.



Notice to Registrar and Dissolution.

The voluntary liquidator must (under penalties) make a return to the Registrar
of Joint Stock Companies of the final meeting having been held, and of the date at
which it was held, and on the expiration of three months from the date of the regis-
tration of such return the company shall be deemed to be dissolved. See sect. 143
of 1862.

Where a company is wound up voluntarily, it is of great importance to all parties
that it shovdd be duly dissolved in manner before mentioned, for until dissolution it
continues to exist, and accordingly forgotten liabilities may be discovered and dis-
putes revived, and the conduct of the liquidator impeached. Many dissolutions
take place every year.

"UTicn the company has been dissolved as aforesaid, the Court will not make a
winding-up order, even upon the petition of a creditor who has been excluded.
rinto Silver Mining Co., 8 Ch. Div. 273 ; Wcstbourne Grove Draper ij Co., W. N. (1878)
195. But in a case of fraud it might be possible to set aside the dissolution.
London and Caledonian Co., 11 Ch. D. 140.

Until the expiration of the three months, application can be made to the Court,
and a winding-up order may be made. Crookhaven Mining Co., 3 Eq. 69.

It has not been settled whether the dissolution prevents proceedings by action



STAY OF \VINDINf;-UP. G67

against the liquidator for misfeasance committed in the winding-up. But qnrnre
■whether proceedings may not now be taken under sect. 10 of 1890. And under
Rr. 128, 129 of 1890, "whether the liquidation has been concluded or not," particu-
lars of unclaimed funds may bo obtained by the Board of Trade, and, semhie, pro-
ceedings may be taken, notwithstanding he has obtained his release. See Be
Chudley, 14 Q. B. D. 402.



The Coy, Limtd. Form 766.

To tlie Registrar of Joint Stock Coys. -j^ , . , '

I Leg to inform you that a meeting of the above-named coy was registrar of

duly hekl on the day of , for the purpose of having an ^"^1 ™eeting.

account laid before them, showing the manner in which the winding-up Jva* *■',
of the coy has been conducted, and the ppty of the coy disposed of, and
the same was done accordingly.
Dated, &c.

, Liqr.

Other notices are required on the dissolution of building societies, see Section I.,
Chap. LIII.

Stay of Winding-up.

The Court has jurisdiction under ss. 89, 138, to stay the winding-up and thus
allow the company to resume business, and many orders have been made accord-
ingly. See South Bar'mle Co., 8 Eq. 688 ; Re Titian Co., 36 W. E. 347 ; Re ChUjwell,
4 T. L. R. 308. For form of petition, see Part I. p. 825 ; and for order to stay,
Ibid. p. 828, and Form 766a, infra ; and for order to stay made on an originating
summons in voluntary winding-up, see Corunna, ^-c. Co., 0215 of 1893. Reg., 1st
Aug. 1893.



Upon motion on the , and on this day made unto this Ct by Form 766a.

counsel on behalf of T. and P., the hqrs and also contributories of the ~~~
above-named coy, and upon reading the orders dated resply, &c., the voluntarv
joint afft of the sd T. and P. filed, &c., The Ct doth order that all fur- winding-up.
ther proceedings in the voluntary winding-up of the above-named coy
be stayed. Great Southern of Spain Rail. Co. (00250 of 1894), Eomer,
J., for Vaughan AVilliams, J., 15th June, 1896. See also order in
Turner Pneumatic Tyre Co., Vaughan Williams, J., 18th July, 1896.



668



WINDING-UP UNDER SUPERVISION.



Section III.
WINDING-IT UNDER SUPERVLSION.



Power to
make super-
vision order.



Petition.



How far a
windino - up
by the Court.



Additional
liquidators.



Effect of

Bupervinion

order.



Sect. 147 of 1862. — When a resolution has been passed by a company to wind up
voluntarily, the Court may make an order directing that the voluntary winding-up
should continue, but subject to such supervision of the Court, and with such liberty
for creditors, contributories, or others, to apply to the Court, and generally upon
such terms and subject to such conditions as the Court thinks just.

Notwithstanding certain official prophecies, supervision orders continue to be
made, and not seldom.

But unless there is a valid voluntary winding-up, there can be no eflfective supervi-
sion. Caloric Co., 52 L. T. 846 ; Sheffield Mortgage Co., W. N. (1887) 218 ; New British
Iron Co., 32 S. J. 91. And there is no jurisdiction to make a supervision order on
the petition of a creditor whose debt was incurred after the commencement of the
voluntary winding-up, although the agreement under which it arose and the volun-
tary liquidation formed parts of one scheme. Banlc of South Austrc(Ua{\), (1894) 3 Ch.
722. But a compulsory winding-up order may be made. Banh of South Australia (2),
(1895) 1 Ch. 578 ; and in the latter case, doubts were thrown on the former. As
to a jjctition by the voluntary liquidator, see observations below Fonn 760.

Sect. 148 of 1862. — A petition, praying wholly or in part that a voluntary
winding-up should continue, but subject to the supervision of the Court, and
which winding-up is hereinafter referred to as a winding-up subject to the super-
vision of the Court, shall, for the purpose of giving jurisdiction to the Court over
suits and actions, be deemed to be a petition for Avinding-up the company by the
Court.

[And see sect. 151 of 1862. But for the purposes of the Act of 1890 a company
is not to be deemed to be "wound up by order of the Coiu't," if a supervision order
is made. See sect. 31 (2) of 1890.]

As to the regard which the Court is to have to the wishes of creditors and con-
tributories, SCO Section I., Chap. VIII. ; and see infra.

Sect. 150 of 1862. — Where any order is made by the Court for a winding-up
subject to the supervision of the Court, the Coiirt may, in such order or in any
subsequent order, appoint any additional liquidator or liquidators ; and any liqui-
dators so appointed by the Court shall have the same powers, be subject to the
same obligations, and in all respects stand in the same position as if they had been
api)ointed by the company : the Court may from time to time remove any liquidators
so appointed by the Court, and fill iij) any vacancy occasioned by such removal,
or by death or resignation.

Where a supervision order is made the licpiidators may, "siibject to any restric-
tions imposed by the Court, exercise aU their powers, without the sanction or



WINDING-UP UNDER SUPEllVLSION. 669

intervention of the Court, in the same manner as if the company were being
wound up altogether voluntarily ; but, save as aforesaid," any supervision "shall
for all purposes, including- the staying of actions, suits and other proceedings,
be deemed to be an order of the Court for winding-up the company by the Court,
and shall confer full authority on the Court to make calls, or to enforce calls made
by the liquidators, and to exercise all other powers which it might have exercised
if an order had been made for winding-up the company altogether by the Court,
and in the construction of the provisions whereby the Court is empowered to direct



Online LibraryFrancis Beaufort PalmerCompany precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) → online text (page 87 of 134)