Charles Mac Naughten Sir Francis Beaufort Palmer.

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

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the time, are not now allowed.

The Court, however, should not, except in very special circumstances,
order a petition to stand over for a lengthened period. It should
either make an order, or dismiss the petition ; for if, after adjourn-
ment, a winding-up order is made, the order would date back to the
presentation of the petition, and avoid, therefore, or imperil, anything
that was done by the company in the meantime. Per Cairns, L. J.,
Metropolitan Warehouse Co,, 17 L. T. 111.

'*It was urged that a postponement would do no harm; but it
appears to me that it woxJd do very great harm, for it would paralyse
the company." Per Cotton, L. J., Chapel House Coll. Co,, 24 C. Div. 267.

Cases occasionally occur in which it is expedient to order a petition
to stand over, e,g,, where the petitioner is a judgment creditor, but the
company desires to impeach the judgment. Bowes v. Hope Co,, 11
H. L. C. 389 ; and see Forms 59 and 61, infra.

Sometimes a petition is ordered to stand over for some months, in
order to g^ve the company an opportunity of raising further funds, or
making a further attempt to prosecute its objects. See Form 60.

Until quite recently the petitioner, until a winding-up order had Withdrawal
been made, was dominus litis, and therefore could submit to an order P®^^<^^*
dismissing, or obtain liberty to withdraw, his petition. Home Assurance
Assoc, 12 Eq. 59 ; Times Life Assurance Co,, 9 Eq. 382. Accordingly,
the company very commonly came to terms with the petitioner, e,g,^
that his debt should be paid or secured, and that he should withdraw
the petition. In such case the company usually agreed to pay the
costs, and where the petitioner was justified in presenting the petition
he was entitled to require payment thereof. Alliance Co,, W. N,
(1867) 218 ; Flagstaff Co., 20 Eq. 268.

But see, now, E. 86 of 1903, supra, as to substituting another peti-
tioner, and the notes, infra, on this provision.

Where a petition was withdrawn or dismissed by consent, creditors
and members appearing and opposing were, under the practice prior
to 1901, usually given costs from the petitioner : Nacupai Co., 28 C. D.
65; Patent Cocoa Fibre Co., 1 C. D. 617; London and Suburban Bank,
19 W. E. 88; unless such appearance was im justifiable. Walkham
United Mines, W. N. (1882) 134. But there was no fixed rule, the
Court looking at the circumstances of the particular case. Criterion
Gold Co,, 41 C. D. 146. And there was no right to separate sets of



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122



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



Substituting
petitioner.



Form 59.

standing
over pending



costs. S, C, ; and Peckham Tramway Co.^ explaining North Brazilian
Sugar Co,, 56 L. T. 229 ; W. N. (1887) 3. And the rule that a with-
drawing petitioner must pay costs was not inflexible. District Bank^
35 C. D. 576.

Buckley, J., has recently laid down the rule that where the petitioner
elects at the hearing to withdraw his petition or have it dismissed, he
must pay the costs of those persons who have given notice within the
time limited of their intention to appear — one set of costs to those
supporting, and another set to those opposing. British Electric Steam
Tramways, (1903) 1 Ch. 725.

Accordingly, where a petitioner agrees to withdrawal or dismissal,
he should insist on being indemnified by the company against these
costs.

In arranging terms of withdrawal, a petitioner should take care that
his costs are paid down or secured, and should not submit to an order
merely dismissing the petition and directing the company to pay the
costs, for in such case, if the company goes into liquidation before the
costs are paid, the petitioner will have to go in and prove for them,
ranking as an unsecured creditor. See, however, Adjustable Horseshoe
Co,, W. N. (1890) 157.

Eule 2 of March, 1893, for which E. 36 of 1903 has been substituted,
did not work very satisfactorily. Efforts to evade it were frequently,
and sometimes successfully, made. But the Court tcikes all reasonable
measures to enforce the provision, and when the parties consent that
the petition shall be withdrawn or dismissed, it is generally ordered to
stand over for a week, in order to give any other creditor or contribu-
tory an opportunity of applying to be substituted as petitioner. For
orders on petitions where other persons have been substituted, see
International Commercial Co., 9th March, 1896; Richmond Collotype
Printing Co.y 21st July, 1896. And see Invicta Works, W. N. (1894) 39.
Bomer, J., on ordering another creditor to be substituted as petitioner,
directed him to amend the petition, and this was done by making him
the petitioner, and stating his debt in the place where the original
petitioner's debt had been stated. International Commercial Co.
(00168 of 1895), March, 1896. Buckley, J., has held that subjecting
a petition to dismissal by not appearing to support it is not consenting
to its dismissal. October, 1903.

Leave to withdraw a creditor's petition in bankruptcy is not given
without the Court being flrst informed of the facts of the case and the
proposed terms of withdrawal, so that the Court may exercise its
judgment as to whether the withdrawal ought to be allowed. Be
Behro, (1900) 2 Q. B. 316.

Upon the peton, &o., Order that the hearing of the sd peton do
stand over until the completion of the cross-examination hnftr directed,



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ADJOURNMENTS AND WITHDRAWAL. 123

and order that tlie following persons be resply cross-examined before cross-exami-
one of the examiners of the Ct upon their respive affts hnftr mentd, "^ '^^'
that is to say, A. B. upon his afft, filed, &c. South Durham Brewery
Co., Kay, J., 26th June, 1886. B. 811. See Forms 51 and 119a.

For order appointing provisional liquidator, and petition to stand over, see
Form 86.

For order appointing provisional liquidator to call meetingfs to consider the
petition and to stand over, see Form 86.

For order to stand over to ascertain wishes of shareholders, see General Phosphate
Corporation, 0096 of 1893, Vaughan Williams, J., 18th May, 1893.

The Court has a discretion as to allowing petition to stand over for cross-
examination. For order to attend for cross-examination at hearing, see Form 52 ;
and see London Pith Market Co.y 27 S. J. 600.

The peton of, &c. preferred unto this Ct, coming on this day to be Form 60.
heard before this Ct, and upon hearing counsel for, &c. opposing the 7^ IT
sd peton, and the coy by their counsel undertaking not to consent to a stand over,
winding-up order on any other peton, and not to wind up voluntarily, ni^ik^d **'^
and to give notice to the petr of any other peton for winding-up the
coy which may be served upon them, and in the event of any such other
peton being served upon them to consent to the peton being restored to
the paper, and that the applicon for a winding-up order by it may be
renewed in the same manner as if the peton had not been ordered to
stand over, Order that the peton do stand over [for six months]. St.
Thomas' Dock Co., M. E., 11th Feb. 1876, 2 0. D. 116; North-
western of Monte Video, ^c. Co., Hall, V.-C, 28th April, 1876, B. 1377.
See also Western of Canada Co., 17 Eq. 1 ; Joseph Bull Sf Co., 36 S. J.
556; Colwyn Bay Pier Co., Vaughan Williams, J., 0085 of 1896.
13th May, 1896. See, however, Chapel House Coll. Co., 24 C. Div. 259.

An order as above is commonly called << a St. Thomas' Dock order." It has been
made in several cases where the petitioner was a debenture holder and a large
majority of the other debenture holders opposed a winding-up order, and it did not
appear that the petitioner would benefit by an immediate order.

As to imposing conditions on a petitioner who consents to this order, see Scott and
Jackson, W. N. (1893) 184.

Where, upon a debenture holder's petition, it was alleged by the company that
there were no assets except those comprised in the trust deed, Pearson, J., appointed
a provisional liquidator, and directed an inquiry on the subject. Olathe Silver
Mming Co., 27 0. D. 278.



Upon peton of A. B., presented, &o., and upon motion this day made form 61.

nnto this Ot by counsel for the respt coy that all proceedings under ; —

the sd peton might be stayed, and that the sd peton might be dis- petiSm. ^^^^
miseed with costs, and upon hearing counsel, &o. and the respts by
their counsel undertaking within^ seven days from the date of this order



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124 WINDING-UP BY THE CX)URT. [ChAP. VIII.

to make the paymt into Ot as in tlie lodgment schedule hereto, and
the petrs undertaking within seven days after such pajmt into Ct to
commence an action in the Q. B. Div. of this Ct against the sd coy on
the bill, the subject of the sd peton, this Ct doth order that the respt
coy be at liberty to make the paymt into Ct as in the lodgment sche-
dule hereto ; and it is ordered that the sd peton and motion do stand
over until the sd action is disposed of, with liberty to the petrs and the
respt coy to apply to restore the sd peton and motion if the sd sum of
600/. is not paid into Ct as af sd, and generally as they may be advised.
Lodgment schedule. JF. Barter ^ Co., 28th May, 1892, Vaughan
Williams, J. (0018 of 1892).

The above order seema to be opposed to the rule laid down by the CJourt of Appeal
in Oold Hill Mines, 23 C. Div. 215, that a petition by a creditor whose debt is bond
Jide disputed ought to be dismissed, and not ordered to stand over. See, further,
infra.



Form 61a. Upon the peton of , preferred unto this Ct, praying that coy

might be wound up under the provisions of the above-mentd Acts, and
the petrs not wishing to proceed with the sd peton, and the coy
waiving all costs, This Ct doth order that the petrs be at liberty to
withdraw the sd peton. Langham Skating Rink Co,, Bacon, V.-C,
4th Nov. 1876. B. 1817.



Order giving
liberty to
withcfraw.



Form 61b.

Another
(fuller).



Upon the peton of F. T. & C, Limtd, whose registered office is at

, on, &c. preferred unto this Ct praying that the above-named

coy, J. W. T., Limtd, might be wound-up by the Ct under the pro-
visions of the above-mentd Acts, and upon hearing counsel, &c., and
the petrs desiring not to proceed with the sd peton, and the petrs and
the coy by their counsel consenting order that the sd petrs be at
liberty to withdraw its sd peton. JameB IV. Tobeg, Limtdj Byrne, J.,
30th Jan. 1902.



Form 61c.

Another.



Upon the applicon of S., &c., of, &c., by summons dated, &c., and
upon hearing the solors for the applicants and for the above-named
coy, and upon reading the peton of the applicants on the, &c., preferred
unto this Ct praying that the above-named coy might be woimd up
under the provisions of the above-mentd Acts, and the a£Et of, &c.,
verifying the sd peton. It is, by consent, ordered that the applicants
be at liberty to withdraw their sd peton, and it is ordered that the

sd Coy do pay the sd S., &c., their costs of this applicon and of

the sd peton, such costs to be taxed. Scottish Contract Corp,, 0071 of
1899. Hood, Eog., March 9th, 1899.



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DISMISSAL. 125

Dismissal.

TTpon motion by way of appeal from an order dated 2 let Dec. 1882, Form 62.
tliis day made unto this Ct by counsel for. the coy, and upon hearing Qrder on
counsel for B., the petr named in a peton presented on 5th Dec. 1882, appeal dis-
for the winding-up of the coy, and upon reading the sd order and the a^btdwputed!
certificate of the fund, Order that so much of the sd order as directed
all further proceedings under the sd peton to be stayed, and as
reserved the costs of the motion until after the trial of the sd action,
be discharged. And order that the sd peton do stand dismissed with
costs. And [110/. cash in Ct to be paid to coy]. And order B. to
pay to coy the costs of the sd peton, including the costs of the motion
upon which the sd order of 21st Deo. 1882, was made, and of this
appeal, such costs to be taxed by the taxing-master. Gold Hill
Mines, Limtd, Ct. of Ap., 24th Jan. 1883. A. 274.

It is well settled that a petition for winding-up is not to be made an instmrnent
of oppression for enforcing pa3rment of a disputed debt. And when this rule is
violated, th^ company can, on motion, obtain the dismissal of the petition with
costs. Gold Eill Mines, 23 0. Div. 211.

But the Ck>iirt must be satisfied that there is a bondjide dispute. Imperial Hydro
Co., 49 L. T. 147.

The order in the Court below in the above case was as follows : — ** Upon motion
by counsel for company that B., the petitioner named, &c., might be restrained
from advertising, or causing to be advertised, the said petition, or taking any pro-
ceedings under the said })etition, and that the costs of the company of and occa-
sioned by the said petitions, and of the said motion, might be ordered to be paid by
the said B., and upon hearing, Order company to pay 110/. into Ck)urt, such sum to
abide the result of action, B. by his counsel undertaking to bring an action for the
amount alleged to be due to him from the said company. And upon such payment
stay all further proceedings under said petition until after the trial of said action^
Costs of motion reserved until after trial of action. Bacon, Y.-C, 21st December,
1892. A. 4823.'*

When a petition in respect of a disputed debt is threatened, an action for an
injunction can be brought. Niger Merchants v. Capper, 18 C. D. 557; Cereh
Bestaurant v. Lavery, 18 C. D. 551 ; Re A Company, (1894) 2 Ch. 349. See Part I.,
8th ed., Form 748. But when the petition has already been presented it is
necessary, regard being had to sect. 24 (5) of the Jud. Act, 1873, to apply in the
matter of the petition instead of bringing an action.



Upon motion by counsel on behalf of the above-named Coy and S., Form 62a.
a director thereof, and upon reading the peton referred to in this Ct Z~. ti ta
on the 11th Not. 1902, in the above matter by M. and the afft, &c., lesteaL
and the sd 8. by his counsel undertaking to abide by any Order this advertisement

-^ OX T^OvlvXOlX*

Court may make as to damages in case this Ct should hereafter be of
opinion the sd M. shall have sustained any by reason of this Order
which the above-named coy or the said S. ought to pay. This Ct doth



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126



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



order that the sd M. of and his solors and agents be and they are

hby restrained until after Tuesday, 18th Nov. 1902, from advertising
the sd peton, and the above-named coy and the sd S. are to be at
liberty to serve the sd M. with notice of motion for 18th Nov.
1902, for an order continuing the above injunction. Financial and
Commercial Banh^ Limtd., Byrne, 12th Nov. 1902.



Form 63.

Order
dismissing
with costs.



Upon the peton of B., of, &c., a creditor [or a contributory] of the

above-named coy, on the day of , preferred imto this Ct

praying that the above-named coy might be wound up by the Ot under
the provisions of the above-mentd Acts, and upon hearing, &c., and
upon reading, &c. [as in winding-up orderly This Ct doth order that
the sd peton do stand dismissed out of this Ct, with costs to be taxed
and paid by the sd petr B. to the sd X. coy, and to the sd Y., the
contributory opposing the peton, and to A. and B., creditors, and C.
and D., shareholders, appearing as afsd ; but only one set of costs is
to be allowed to the sd creditors and shareholders resply ; and order

that , the prov [off] liqr appointed by the sd order of the

of , be discharged.

See sect. 86 of 1862, aupra^ as to dismissing, and B. 36 of 1903, tupra^ p. 120, as
to consenting to dismissal.

Where the petition was dismissed, the praotioe prior to 1901 was usually to order
the petitioner to pay the costs of the company, to pay one set of costs (among
them) to the shareholders opposing the petition, and one set of costs (among them)
to the creditors opposing. European Banking Co., 2 Eq. 621 ; Diamond Fuely W. N.
(1878) 11. Sometimes, however, there was no restriction as to one set of costs.
Anglo- Egyptian Co., 8 Eq. 880 ; New Oas Co., 6 C. D. 706. And under the present
practice one set of costs is generally given to the creditors opposing and one to the
shareholders opposing, notwithstanding Ntw British Iron (7(9., 36 S. J. 310, which is
not now an authority for the proposition therein stated.

The circumstances of each case are, however, considered before costs are given to
persons supporting or opposing a petition. And see p. 118 as to the costs where the
same solicitor represents two or more parties.



Form 63a. Upon, &c. [_pelon dismissal] : And it is ordered that the petr, the
sd G., do pay to the sd N. Coy their costs of the sd peton, such



Another,
where peti-
tioner mar-
ried woman
and adminis-
tratrix.



costs to be taxed, and to be pd by her out of the assets of X., deed,
in her hands as the legal personal representative of the sd X., deed,
to be administered in a due course of admon if the sd G. has in her
hands so much to be administered, and in the event of there being no
assets of the sd X., deed, in the hands of the sd G. for the payment of
the sd costs, such costs are to be pd out of the separate ppty of the
sd G. as hnftr mentd, and not otherwise. And it is ordered that
execution hereon against the sd G. be limtd to her separate ppty not



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DISMISSAL. 127

subject to any restriction against anticipation, unless by reason of
sect. 19 of the Married Women's Ppty Act, 1882, the ppty shall be
liable to execution notwithstanding such restraint.

The jndgment as regards separate property is in aooordanoe with Scott y. Morley,
20 Q. B. D. 120.

As to judgment against a widow on contracts doring coverture after the Married
Women's Property Act, 1882, and before the Act of 1893, see Softlaw v. JFelchf
(1899) 2 Q. B. 419.

{Title.)

Upon the peton of the C. Bank, Limtd, of, &c., creditors of the Form 64.
above-named coy, on, &c., and upon heariog, &c., and the petrs by Order to dis-
their counsel admitting that their claim has been satisfied, and under- miss (by con-
taking to hand over to the trees for the debenture-holders all deeds Xj^Sred^^"^
in their possession or control belonging to the sd M. Coy, and creditors.

Messrs. , the solors for the sd M. Coy, personally undertaking

through the counsel for the sd coy to pay to the sd petrs their costs of
the sd peton, and also their proper costs, charges and expenses as
mortgagees of the sd coy, subject to all such costs, charges, and
expenses being taxed, by consent, Order that the sd peton do stand
dismissed out of this Ct. And order that the costs of the petrs of the
sd peton, and also their proper costs, charges, and expenses as mort-
gagees of the sd coy, be taxed. Madras Electric Tramways Co, (00139
of 1895), Eomer, J., 17th June, 1895.



Upon the peton of B., of, &c. [winding-up peton'] : And it appearing Form 66.
that the debt of the petr has been provided for, Order that by consent "Z^ ~
the peton be dismissed. And order that the petr*s costs of and inci- consent dis-
dent to the sd peton be taxed by, &c., as between solor and client, "^^^sing.
and be pd by the coy to the petr ; and if such costs when taxed do not
amount to 100/., the petr by his counsel undertaking to apply the
excess of the 100/. already pd to the petr towards satisf suction of the
first of the three promissory notes given by the sd coy to the petr
which shall become payable after the taxing-master's certificate shall
have been filed. And if such costs when taxed shall exceed the sd
sum of 100/., the balance of such costs is to be pd by the sd coy to the
petr on the 15th of Dec. instant. Government Security Fire Insurance
Co., 22nd June, 1877. A. 1218.



Upon the peton, &c., and upon hearing, &c., and upon reading, &c.| Form 65a.
and the petr not wishing to proceed with the sd peton, and the sd coy 7~~T
by their counsel undertaking to pay the costs of the sd petr, by consent



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128 WINDING-UP BY THE COURT. [ChAP. VIII.

order that tlie sd petr be at liberty to withdraw the sd peton. And
order that costs of sd petr of the sd peton be taxed. Brunswick Cotton
Spinning Co., Vaughan Williams, J., 19th Feb. 1896 (0021 of 1896).
And see Barcelona (Besos) Waterworks Co,, Yaughan Williams, J.,
31st Oct. 1894 (0091 of 1894).



Form 66.

Order that
oompany paj
costs, debt
paid before
bearing.



Upon the peton of M. [/or compulsory order"], and upon hearing
counsel for the petr, and for the sd coy, and the petr by his counsel
admitting that the claim of the petr against the sd coy has since the
sd peton was preferred been satisfied, This Ct doth not think fit to
make any order on the sd peton, but doth order that the sd coy do pay
to the petr his costs of the sd peton, and such costs to be taxed, &c.
British Alliance Corporation, Malins, V.-C, 17th May, 1878. A. 2124.

Where the petitioner's debt is paid before the hearing, but the company will not
pay his costs, he should apply for his costs at the hearing, and an order will be
made as above. Alliance Co., W. N. (1867) 218 ; Flagstaff Co., 20 Eq. 268 ; Masonic
Co., 32 C. D. 373. But before making the order the CJourt generally requires an
affidavit that the company has no other debts than that of the petitioner, or that it
has sufficient assets to pay aU its debts.

Where the company pays the debt and costs before the hearing, and undertakes
to indemnify the petitioner against claims for costs by creditors and contributories
who may appear, it has been held that the petitioner is not entitled to the costs of
appearing. AijwtabU Horseshoe Co., W. N. (1890) 167. But B. 36 of 1903
seems to justify his appearance. See p. 120.

And sometimes, when no creditor or shareholder appears except the petitioner,
and he is willing to withdraw, an adjournment is ordered to see whether anyone
wishes to be substituted as petitioner under R. 36 of 1903.



Form 67.

Another,
where ci^ddi-
tors oppose.



Upon the peton, &c., and the petrs by their counsel admitting that
the debts and costs of execution due from the sd coy to the petrs had
since been pd, This Ct doth not think fit to make any order on the sd

peton, but doth order that the sd coy do pay to the petrs and to

and creditors, their costs of and occasioned by the sd peton:

such costs to be taxed by the taxing-master, who is to allow to the sd
creditors such costs only as would properly have been incurred by
such creditors resply if all such creditors had been represented by the
same counsel and solors. Association of Land Financiers, Malins, Y.-C,
25th June, 1878. B. 1408.

But this rule cannot apply in all cases. Suppose the company is insolvent; surely
in that case tbe petitioner is not bound to rely on the company*8 contract to indem-
nify him against the costs of creditors or contributories, which the Court, in dis-
missing the petition, may, in his absence, order him to pay. And see now S. 36
of 1903, supra, p. 120.



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REVIVOB. 129

Upon, &c., and it appearing that minutes have been delivered out Form 67a.
for the winding-up of the above-named coy, pursuant to the order of Dismissal
this Ct, on the Ist of May, 1890, and counsel for Charles Blineo and after order
Henry John Patrick, two of the shareholders, opposing the sd peton i^efore it is
on the days hnbefore mentd by their counsel, alleging that they, out entered.
of their own moneys, satisfied the sd petr and contributories support-
ing the sd peton, and the sd Charles Blineo and Henry John Patrick
by their counsel agreeing to take transfers of the shares of the sd petr
and shareholders supporting as afsd, and the petr by his counsel
asking to withdraw his peton, and all the respts by their counsel Per North, J.,
consenting, This Ct doth order that the sd peton do stand dismissed, ^ank, 44 CD.
And it is ordered that the funds in Ct be dealt with as directed in 648.
the schedule hereto.



Revivor.

Upon motion, &c. by counsel for W. and F., the exors of the will Porm 68.
of C. F., deed, who alleged that on the 24th of Dec. 1874, the sd Revivor on
C. F. presented his peton for the winding-up of the sd coy under, &c., application of
and that the sd petr died on the 11th of May, 1876, having by his executors.
last will and testament appointed the sd W. and F. exors thof, who
duly proved the same on the 3rd of Jime, 1876, Order that the sd peton
and the proceedings thereunder be carried on and prosecuted by the



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