Charles Mac Naughten Sir Francis Beaufort Palmer.

Company precedents for use in relation to companies: subject to ..., Volume 2 online

. (page 101 of 152)
Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 101 of 152)
Font size
QR-code for this ebook


See Section I., Chap. XXXTTT.

Sect. 164 of 1862, relating to fraudulent preference, is alao exptemify
applicable in the case of winding-up under supervision, itie pretentaiian
of the petition^ as in the case of a compulsory winding-up, corresponding
with the act of bankruptcy. See Section I., Chap. XLTV.

Sect. 166, as to the penalty for falsifying books, also applies in
supervision proceedings, as also do sect. 167, relating to the prosecu-
tion of directors, &c. [see Section I., Chap. XLY.], and sect. 169, as to
perjury.

The Act of 1890 is mainly comprised of provisions applying bank-
ruptcy practice to compulsory windings-up, but some of its sections are
expressly, or have been by judicial interpretation made, applicable to
winding-up under supervision.

Sect. 10, which relates to proceedings for misfeasance, is expressly



Digitized by



Google



SECTIONS AND RULES. 799

applicable to the case of winding-up under supervision. See Section I.,
Chap. XLIV.

Sect. 14. — ^Where a oompany is being wound up Toluntaiily or subject to the Power for
supervision of the Court, the official receiver attached to the Court having jurUdic- official
tion to wind up the company may present a petition that the company be wound up '®<'®|"^®'^ *p
by the Court, and thereupon, if the Court is satisfied that the voluntary wiDdiug- voluntary
up or windiog-up subject to supervision cannot be continued with due regard to winding-up.
the interests of the creditors or oontributories, it may make an order that the
company be wound up by the Court.

Sect. 15, as to information with reference to pending liquidations Information
and unclaimed and undistributed assets, has been held to apply in '"^derseot. 15.
supervision cases. Stock and Share, Sfc. Co,^ (1894) 1 Oh. 736. And
see Section I., Ohap. XXIV.

Sect. 81 (2). — For the purposes of this Act a company shall not be deemed to be Supervision
wound up by order of the Court if the order is to continue a winding-up under the ^®t a winding-
supervision of the Court. ^f ^^ ^^J,

Sect. 82 (2).— In Part IV. of the Companies Act, 1862, and in this Act the -« rVjrirt
expression ''the Court," when used in relation to a company, shall, unless the
contrary intention appears, mean the Court having jurisdiction under this Act to
wind up the company.

B. 1 of 1908.— Subject to the limitation hereafter mentioned these rules shall Application
apply to the proceedings in every winding-up of a company under the Acts which ®' r^©**
shall commence on and after the date on which these rules came into operation ; and
they shall also, so far as practicable, and subject to any general or special order of
the Court, apply to all proceedings which shall be taken or instituted after the
said date in the winding-up of a company which commoiced on and after the
1st January, 1891. Bules which from their nature and subject-matter are, or
which by the head lines above the group in which they are contained, or by their
terms, are made applicable only to the proceedings in a winding-up by the Court,
shall not apply to the prooeedingps in a voluntary winding-up or winding-up
under the supervision of the Court.

A large proportion of the Eules of 1903 only apply to winding-up Roles of 1903
by tibe Court Nevertheless there are a considerable number which »Pplioal»l«-
apply more or less to winding-up under supervision. In particidar,
those headed "Court and Chambers," 4 to 10 inclusive; those headed
'* Proceedings," 11 to 21 inclusive ; those headed " Service and Execu-
tion of Process and Enforcement of Orders," 22 to 24 inclusive ; those
headed "Petition," 25 to 30 inclusive; those headed "Hearing of
Petition and Orders made thereon," 32 to 36 inclusive; those headed
"Order to wind-up a Company," 37 to 41 (except 40 and 41 (1)); those
headed "Transfers of Actions and Proceedings," 42 to 47 (except 46) ;
those headed "Proceedings against delinquent Directors, Promoters,
and Officers," 71 and 72 ; those headed " Witnesses and Depositions,"
74 to 76 inclusive. And there are many other of the Eules of 1903



Digitized by



Google



800



WINDING-UP UNDER SUPERVISION.



whicli apply, e,g,^ those headed "Proofs," 92 to 103 inclusive; those
headed "Admission and Eejectionof Proofs and Appeal to the Court,"
106 to 110 indusive; those headed "Attendance and Appearance of
Parties," 135 and 136; those headed "Statements by Liqmdator
to Eegistrar of Joint Stock Companies," 171 to 173 inclusive; those
headed "Unclaimed Funds," &c., 174 to 179 inclusive; those headed
"Arrests and Commitments," 194 to 197 inclusive. Also divers of
the rules headed " Miscellaneous Matters," e,g,y 199, 200 and 201.



Advertise-
ment of order.



B. 41 of 1908 (2). — "An order for the -winding-up of a company subject to the
supervision of the Court, shall, before the expiration of twelve days from the date
thereof, be advertised by the petitioner once in the London Oauttef and shall be
served on such persons (if any) and in such manner as the Court shall direct."



The proper practice would seem to be for the petitioner, on a super-
vision order being made, to apply to the judge for directions as to
the advertisement and service of the order. The advertisement of
a supervision order prior to the Rules*of 1903 is given in Form 788.

Between 1892 and the coming into operation of the Companies Act,
1900, few supervision orders were made, the leaning of the Court in
cases where the company was in difficulties having been towards a
compulsory order, even where the parties interested wished for a super-
vision order. See New Oriental Bank Corporation, (1892) 3 Ch. 563.
But a more favourable view of this method of liquidation was taken
after the House of Lords' decision in Ex parte Barnes, (1896) A. C. 146.

As to the effect of sect. 25 of 1900, allowing a creditor to apply to
the Court in a voluntary winding-up, see p. 114, supra.



Form 780.

Old form of
order for
winding-up,
subject to
supervision.



Forms of Supervision Orders.

Upon the peton, &c., This Ct doth order that the voluntary winding-up of the
sd coy be continued, but subject to the supervision of this Ot ; and any of the pro-
ceedings under the sd voluntary winding-up may be adopted as the judge shall
think fit. And the, creditors, oontributories, and liqrs of the sd coy, and all other
persons interested are to be at liberty to apply to the judge at chambers as there
may be oocasion.

The above is the old form of supervision order as used prior to 1898.



Form 781.

Supervision
order (full
form) accord-
ing to present
practice.

Form 16 of
1908.



Upon the peton, &c. [« .^., of A. B., of, &c., a creditor and contributoiy of

the above-named coy, on the th , 1 9 — , preferred unto this Ct,

and upon hearing counsel for the petr, and for the above-mentd coy,
by J., the liqr in the voluntary winding-up thof, and for X. T., a
contributory of the above-mentd coy, appearing and suj^porting the sd



Digitized by



Google



FORMS OP SUPERYISION ORDERS. &01

peton, and upon reading the sd peton, an afft of Z., filed, &c. (verify-
ing the sd peton), the London Gazette, dated, &c., and the Times
newspaper, dated, &c., each containing an advertisement of the sd
peton, the London Gazette, dated, &c., containing a notice of the
passing of the resolutions for the voluntary winding-up of the sd coy,
and for the appointment of the sd J., as the voluntary liqr thof, the
afEt of, &c.], this Ct doth order that the voluntary winding-up of the

sd Ooy, Limtd, be continued, but subject to the supervision of this

Ct, and any of the proceedings under the sd voluntary winding-up may
be adopted as the Ct shall think fit. And it is ordered that [the sd J.],

the liqr in the voluntary winding-up of the sd coy, do, on the of

next, and thenceforth every three months, file with the Regr

a report in writing as to the position of and the progress made with
the winding-up of the sd coy, and with the realization of the assets
thof, and as to any other matters connected with the winding-up as
the Ct may from time to time direct. And it is ordered that no bills
of costs, charges, or expenses, or special remuneration of any solor
employed by the liqr of the sd coy, or any remuneration, charges, or
expenses of such liqr, or of any manager, accountant, auctioneer,
broker, or other person be pd out of the assets of the sd coy, unless
such costs, charges, expenses, or remuneration shall have been tcaed
or allowed by the Begr. And it is ordered that all such costs, charges,
expenses, and remuneration be taxed and ascertained accordingly.
And it is ordered that the costs of the petr and of {here insert any
directions as to allowance of costs o/ petitioner and of persons appearing)
[^.y., of the sd coy, and of the several creditors and contributories
supporting a supervision order and named inthe first and second schedules
hto of the sd peton, be taxed and pd out of the assets of the sd coy, and
that on such taxation one set of costs is to be allowed the sd creditors
supporting a supervision order, and one set of costs is to be allowed to
the sd contributories supporting such an order]. And the creditors,
contributories, and liqr of the sd coy, and all other persons interested
are to be at liberty to apply generally as there may be occasion.

As to insertmg direotioiiB as to service and advertisiiig of saperyisioii order, see
B. 41 (2) of 1903, and supra, p. 800.

A oondition as to taxation something like the above form was first imposed by
Vaughan Williams, J., in CivU Service Brewery Co., W. N. (1893) 6 ; 37 S. J. 194 ;
and the original form was somewhat extended in Waterproof Materials Co., W. N.
(1893) 18; 37 8. J. 231. And see Ifew Morgan Gold Mining Co,, 0093 of 1893,
Vanghan Williams, J., 17th May, 1893 ; Theatrical Trust, 00177 of 1893, Vaughan
Williams, J., 8th July, 1893. The clause as to filing a report was added later, and
originally a monthly report was required. See Fritchard, Offor ^ Co. , W. N. (1893)
163 ; North Eastern BuUfonUin Co., 00246 of 1893, Vaughan Williams, J., 26th
Oct. 1893. But in 1898, Wright, J., altered the practice by requiriug only quar-
terly reports. See Borner ^ Co., W. N. (1898) 169. As to the priority of the

P. 3p



Digitized by



Google



802



WINDING-UP UNDER SUPERVISION.



liquidator's oosts inoiirred prior to tbe superrision order, see New York Ezek^nge
Co., (1893) 1 Ch. 371. The separate costs of the company and the liquidator will
not generallj be allowed. The order often contained the following directions : —
'*And the time within which the order is to be advertised in the London Omutte is

extended until the day of ."

And see Bupra^ p. 800, as to advertising the order.



Form 782. [^After first clause of order insert] And it is ordered that the prov
liqr appointed by the sd order, dated, &c., be discharged from the
office of prov liqr of the sd coy. And it is ordered that X., the special
manager appointed by the sd order, dated, &c., be discharged from the
office of special manager of the sd coy.

\^And after providing for costs of petr and coy, ^c, insert] And it is
ordered that the costs, expenses, and remuneration of the sd W., as
such prov liqr, and the costs and remuneration of the sd X., as such
special manager, be resply taxed and ascertained, and paid out of the
assets of the sd coy. John Morris ^ Co,, 00246 of 1898, Wright, J.,
Aug. 10, 1898.



Discharge
and oosts of
provisional
liquidator
and special
manager.



Form 783. And it is ordered that the oosts, charges, and expenses of the off
Taxation '®^' ^^ P^^ ^^' ^ reserved to be dealt with in the winding-up.
when ofadal J. Daniel, Ist Sept. 1892.
reseiver is
provisional
uqoidator.

Form 784. Upon the peton [creditors* : supervision order]. And order that a
proper person or persons be appointed liqr or liqrs of the sd coy,
without prejudice to any applicon by those appointed by the general
meeting for their appointment as such liqrs. Balfycummisk Copper
Mining Co., M. R, 15th Dec. 1873. A. 3104.

Unless otherwise provided by the supervision ocder, the voluntary Uqnidaton
remain in office, but sometimes the Court removes them and appoints others, or
appoints additional liquidators. This is done imder sect. 141 of 1862, and under
sects. 93 and 150. It seems, however, that a voluntary liquidator can only be
removed for '* due cause." Oxford Building Soeiety, 49 L. T. 495. Aooordingly,
where it is desired to remove him at the hearing of the petition, the petition should
state the facts which render his removal expedient, and should pray for snob
removal. And see tupra, p. 684.



Order for ap-
pointment of
uquidators.



Form 785.



Upon, &c. [supervision order]. And order that B., the liqr of the sd
£T . , . coy appointed under the sd voluntary winding-up, be continued as



give security, such liqr on his giving security to be approved by the judge.
Western, Sfc. Laundry Co,, M. R, 20th July, 1878. A. 1471.



Great



The Court seldom requires security from a liquidator where the company has not
required it. See European Bank, 19 W. B. 268 ; Aberavon Tmplate Co,, 67 L. J.



Digitized by



Google



BESTEICnONS. 803

Ch. 761. But under sect. 151 of 1862 the Ck>iirt can require seourity, and it is now
the usual practice to require it where a new liquidator is appointed. Mampshire
Zand Co., (1894) 2 Ch. 632.



Upon the peton, &c. [^supervision order, see the forms above^* And Form 786.
** A. and B., the voluntary liqrs of the sd coy, consenting to retire," It g^^^^j^.^^""

is ordered that 0., of , chartered accountant, be appointed liqr of ordOT, volun-

the above-named association ; And it is ordered that the sd liqr do on *^ ^^^"
or before the 25th day of March, 1892, give security to be approved retiring,
by the judge [and order for taxing and payment of costs] ; And it is
ordered that the time for advertising this order be extended to the
11th March, 1892. Private Investors^ Assoc, 4th March, 1892.

See Eampshire Land Co., iupra.



Bestrictions.

Sect. 151 of 1862 enables the Court to restrict the powers of the
liquidators, but, except as in Form 781, restrictions are rare. In
Watson Sf Co,, (1891) 2 Ch. 55, Chitty, J., appointed a committee to
act with the liqmdator, and restricted his powers accordingly, and
similar orders were more than once made by Wright, J., and other
judges. See Form 787. See also London Quays, 3 Ch. 394, in which
the powers of the liquidator were closely restricted.

Subject to any restrictions so imposed, and to the Bules of 1903, the
liquidators may exercise all their powers just as if the company were
being wound up altogether voluntarily. See sect. 151, supra, and
Wright's case, 5 Ch. 437.

If it becomes desirable to apply to the Court in regard to any
matter, the liquidator can make application accordingly, but it may
be that he can complete the winding-up without any application
except for taxation, as required by Form 783, or by sect. 155 of 1862.
See, however, the observations on the Bules of 1903, supra, p. 799,
and infra.



Upon the peton of, &c., and upon hearing counsel for, ^., and for C, Form 787.
v., S., &c. resply herein named, and upon reading, &c. {continue unndinp- supervision
up under supervisum], and the several persons hnftr named by their order with
counsel consenting to act as a committee in manner hnftr mentd and i**^"?^^ ^
without remuneration, This Ct doth order that the liqrs appointed to
conduct such winding-up may exercise all the powers conferred upon
them by the above statutes without the sanction or intervention of this
Ct in the same manner as if the coy were being wound up altogether
voluntarily, subject until further order to 'the restrictions hnftr imposed

3f2



Digitized by



Google



804



WINDING-UP UNDER SUPERVISION.

upon them, that is to aay — (a) The liqrs shall not, without the sanction
of a majority of the following persons, C, V., 8., &c., being the
persons nominated by the creditors of the coy to act as a committee, or
of the Ot, carry on the business of the coy, or bring or defend any
legal proceedings, or exercise any of the powers conferred by sect. 159
or sect. 160 of the Cos Act, 1862. (b) The liqrs shall not, without
the sanction, &c. [a« above'], sell or enter into any contract for the sale
of the coy's business or any part thof . (c) The liqrs, except in cases of
urgency, shall not, without the sanction, &c. [a« above"], employ a solor
or other agent to take any proceedings or do any business which the
liqrs are unable to take or do themselves. And the liqrs are to be at
liberty to pay out of the assets of the coy the actual out-of-pocket
expenses necessarily incurred by the afsd persons aoting as afsd,
subject to the approval of the Ct. ^A/ter provision for costs insert]
Liberty to apply in the event of any of the afsd members of the sd
committee dying or retiring. Marshall, Ashby Sf Co,, 00241 of 1898,
Wright, J., Oct. 26th, 1898.

This form of order was followed by Cozens-Hardy, J., in Shows, Bryant % Co.,
March 28, 1900, and has been followed by other jndges.



Fonn 788. Advertisement of Order.

Advertise- No. 0031 of 1892.

vision onSr^ ^ ^® High Ct of Justice. Cos (Winding-up). Mr. Justice
Vaughan Williams. In the matter of the Cos Acts, 1862 to 1890,
and In the matter of the N. Coy, limtd. By an order made by

Mr. Justice Vaughan Williams in the above matters, dated the '

day of , 1895, on the peton of S., of , a creditor of the above-
named coy, praying that an order might be made for the continuance
of the voluntary winding-up of the sd coy, but subject to the super-
vision of the Ct, it was ordered that the voluntary winding-up of the
sd N. Coy, limtd, be continued, but subject to the supervision of ^
Ct, and any of the proceedings under the sd voluntary winding-up
might be adopted as the Ct should think fit. And it was ordered that
A., the liqr in the voluntary winding-up of the sd coy, should on the

-^ — day of , and on each succeeding, &c. [<w in supervision order,

Form 781], and it was ordered that no bills, &c. l_as in supervision order,
Form 781]. And it was ordered that the costs of the petrs and of
the coy, and of the creditors supporting the peton, be taxed by the
proper taxing master and pd out of the assets of the coy, and that on
such taxation only one set of costs was to be allowed to the crediton
supporting the peton. And the creditors, contributories, and liqr of
the sd coy and all other persons interested were to be at liberty to
apply.to the Ct as there might be occasion. And the time, &c. [as in



Digitized by



Google



. APPLICATIONS TO THE CfOUET. .806

not^ to supervision order y Form 781]. Dated the day of -,

1895. F. & W. [oJc/rew], solors for the sd petrs.

As to the petitioner's duty to advertise, see R. 41 of 1903, attprOf p. 800.

If the advertisement is signed by a solicitor, it will be aooeptedwithoat attestation
of snoh sig^tnre, or the production of the order. In other oases the advertisement
must be signed by an official of the Court, and sealed. See Appendix D.



Upon motion, &c. for 0., the petr named in the order made on the Form 789.
6th May, 1676, for the winding-up of the above-named coy [under the qm^
Bupeirision of the Ct], and upon reading the sd order, This Ct doth extending
order that the time limited for the advertisement of the sd order, ^^J^^,- .
dated 6th May, 1876, in the London Gazeite, pursuant to the general supervision
order of this Ct, be extended to the 19th May, 1876. Percy, Sfc. Co., ®'^'-
Bacon, V.-C, 17th May, 1876. B. 889.



Sometimes by accident or otherwise the advertisement under the Order of 1862 is
not inserted in proper time. In such case an order as above was obtained on
ex parte motion or summons, the order not being drawn up. Ord. LII. r. 14. An
affidavit explaining the omission was occasionally required. But according to more
recent practice the registrar, without any application to the Court, by consent
inserted if requisite in the draft order a paragraph extending the time. See note to
Form 781.

And the Court has now power to extend the time under B. 199 of 1903.

Applications to the Court.

The supervision order gives liberty to the creditors, contributories, How made,
and liquidators of the company, and to all other persons interested, to
apply ; and application can be made by ordinary summons (Form 10)
as in the case of a compulsory winding-up. The fact that creditors •
could apply was formerly the chief distinction between a winding-up
purely voluntary and one under supervision. But sect. 25 of 1900
abolishes this distinction.

A considerable number of orders made in cases where the winding-
up was under supervision will be found among the forms relating to
compulsory winding-up given in Section I.

Applications are very commonly made (a) by liquidators to restrain By whom,
proceedings ; to enforce the payment of calls and other moneys due
&om contributories ; for liberty to seU or concur in sales ; as to oom«
promises; for examination of directors and others under sect. 115 of
1862 ; to recover money from directors and others under sect. 10 of
1890; (b) by contributories to rectify the list of contributories; for
inspection ; and for other purposes ; (c) by creditors, as regards
disputed debts and claims ; for declarations of rights ; and for liberty
to bring actions and take proceedings.

The Court cannot in the winding-up fix the remuneration of a



Digitized by



Google



806



WINDING-UP UNDER SUPERVISION.



BuleB of 1862
annulled.



G^eneral
procedure.



receiver appointed by debenture holders. Vimhos, Limtd, (1900)
1 Oh. 470.

As to the power of the Court on its own motion to direct a private
examination, see Land SecurUies Co,, W. N. (1894) 91, and Section I.,
Chap. XLII. And see E. 5 (2) of 1903.

The Rules of 1862 formerly applying to applications in proceedings
under the supervision of the High Court were annulled in 1903.

As to applying to the Court for leave to prosecute directors, see
sect. 167 of 1862 (which in terms applies to supervision cases), and
Section I., Chap. XLY.

As to the practice on ordinary summons, see notes to Form 10.



Form 790.

liberty to
oontribu-
tories to
attend pro-
ceedings.



Upon the applicon of D. C, of , and E. C, his wife, resply

contributories of the above-named coy, by summons dated 2nd Feb.
1892, and upon hearing the solor for the applicants, and for E., the
liqr, and upon reading the supervision order dated 13th Jime, 1892,
and afft of D. C, filed 16th Feb. 1892, It is ordered that the sd D. C.
and E. C. be at liberty at their own expense to attend the proceedings
before the judge in these matters under the sd order, dated 13th June,
1892, And it is ordered that the sd D. C. and E. C, upon payment of
the costs occasioned thby, have notice of all such proceedings as they
shall by writing desire to have notice of. C. Fox, Chief Clerk.
Eussell, Cordner Sf Co,, North, J., 19th Feb. 1892.

Ab to liberty to attend, see R. 136 of 1908.



Form 791.

Appearance
book (follow-
ing annulled,
Form 53 of
1862).



In the matter, &c.



Appearance Book.



Date when

Aiq>earaiice

entered.



Party's
Name.



Whether

Creditor or

Contributory.



If he appears

in person, his

Address for

Service.



If he appears'

by a Solioitor,

his SoUdtor'B

Name.



SoUdtor's
Address.



Amount of

Debt
[or. Number
of Shares].



SeeB. 136 (2) of 1908 as to this book.

Appointment and Bemoval of Liquidators and
filling up Vacancies.

See as to this, sect. 150 of 1862, supra, and Forms 784 et seq, (where
any change in the liquidators is made at the hearing).



Digitized by



Google



APPOINTMENT AND REMOVAL OP LIQUIDATORS, ETC. 807

As to what is due canse for removal, see Section I., Chap. XLIX.

Br. 145 and 146 of 1903, as to a liquidator's resignation, and liis
vacating office by a receiving order being made against him, do not
appear to apply in supervision proceedings. See E. 1, aud the heading
of the group of rules 137 to 146.

As to the power of Court to remove liquidators appointed by the
company, see sect. 141 of 1862; and Ex parte Turner, 9 W. R. 500;
Ex parte Pulbrook, 2 De G. J. & 8. 348 ; Oxford Building Co., 49 L. T.
495. The power to remove in supervision cases is either under sects.
141 and 150, or under sects. 93 and 151.

The Court may, on making a supervision order, appoint a liquidator,



Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 101 of 152)