Charles Mac Naughten Sir Francis Beaufort Palmer.

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

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shall be so sent to the official receiver, or, if a liquidator has been appointed, to the
liquidator, and in any other winding-up the affidavit may be so sent to the
liquidator. [Formerly R. 97 of 1890, taken from Sched. II. r. 2.]

93. An affidavit proving a debt may be made by the creditor himself, or by some
person authorized by or on behalf of the creditor. If made by a person so autho-
rized, it shall state his authority snd means of knowledge. [R. 98 of 1890, and
Sched. II. r. 3, and see Ex parte Rare, 10 Ch. 219.]

Vouchers. 94. An affidavit proving a debt shall contain or refer to a statement of aooount



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CREDITORS, 441

allowing the paiticnlars of the debt, and shall specify the youohers, if anj, hj
which the same can be sabstantiated. The official receiver or liquidator to whom
the proof is sent may at any time call for the production of the Tonohers. [R. 99 of
1890, and Sohed. II. r. 4.]

96. An affidavit proving a debt shall state whether the creditor is or is not a Security.
seoored creditor. [R. 100 of 1890, and Sched. II. r. 5.]

96. An affidavit proving a debt may in a winding-up by the Court be sworn before
an official receiver or assistant official receiver, or any officer of the Board of Trade
or any derk of an official receiver duly authorized in writing by the Court or the
Board of Trade in that behalf. [Formerly R. of Deo. 3, 1892.]

97. A creditor shall bear the cost of proving his debt, unless the Court otherwise Cost*
orders. [R. 101 of 1890, and Sched. II. r. 6.]

98. A creditor proving his debt shall deduct therefrom all trade discounts, but Discoimt.
he shall not be compelled to deduct any discount, not exceeding five per centum on

the net amount of his claim, which he may have agreed to allow for payment in
cash. [R. 102 of 1890, and Sohed. II. r. 8. See Wms., p. 371.]

99. When any rent or other payment falls due at stated periods, and the order Periodical
to wind up is made at any time other than one of those periods, the person entitled payments,
to the rent or payment may prove for a proportionate part thereof up to the date

of the winding-up order or resolution as if the rent or payment grew due from
day to day. Provided that where the liquidator remains in occupation of premises
demised to a company which is being wound up, nothing herein contained shall
prejudice or affect the right of the landlord of such premises to daim payment by
the company or the liquidator of rent during the period of the company's or the
liquidator's occupation. [See p. 420, infra."]

100. On any debt or sum certain, payable at a certain time or otherwise, whereon Interest,
interest is not reserved or agreed for, and which is overdue at the date of the
winding-up order or resolution, the creditor may prove for interest at a rate

not exceeding four per centum per annum to that date from the time when the debt
or sum was payable, if the debt or sum is payable by virtue of a written instru-
ment at a certain time, and if payable otherwise, then from the time when a demand
in writing has been made giving notice that interest will be claimed from the date
of the demand until the time of payment. [R. 104 of 1890, and Sched. II. r. 20 ;
and see Bkoy. Act, 1890, s. 23.]

101. A creditor may prove for a debt not payable at the date of the winding-up order Proof subject
or resolution, as if it were payable presently, and may receive dividends equally with to rebate,
the other creditors, deducting only thereout a rebate of interest at the rate of five per

centum per «.-nTinTn computed from the declaration of a dividend to the time when the
debt would have become payable according to the terms on which it was contracted.
[R. 105 of 1890, modified so as to accord with R. 21 of Sched. II. of Bkcy. Act,
1883 ; and see J?J? parte Ador, (1891) 2 Q. B. 274.]

109. In any case in which it appears that there are numerous claims for wages by Workmen's
workmen and others employed by the company, it shall be sufficient if one proof wages,
for all such claims is made either by a foreman or by some other person on behalf of
all such creditors. Such proof shall have annexed thereto, as forming part thereof,
a schedule setting forth the names of the workmen and others, and the amounts
severally due to them. Any proof made in compliance with this rule shall have
the same effect as if separate proofs had been made by each of the said workmen
and others. [Formerly R. lOa of 1890, taken from Bkcy. R. 220.]

108. Where a creditor seeks to prove in respect of a bill of exchange, promissory Production of
note, or other negotiable instrument or security on which the company is liable, security,
such bill of exchange, note, instrument, or security must, subject to any special
Older of the Court made to the contrary, be produced to the official receiver, chair-



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442



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



Proofs for
first meetings.



Delivery by
official re-
oei?6r to
liquidator.
Swearing.



man of a meeting, or liquidator, as the case may be, and be marked by Him before
the proof can be admitted either for Toting or for any puxpoee. [Formerly B. 107
of 1890; Bkoy. R. 221.]

104. A proof intended to be used at the first meeting of creditors or at an
adjournment thereof shall be lodged with the official reoeiyer not later than the
time mentioned for that purpose in the notice convening the meeting, or adjourned
meeting. [Formerly R. 108 of 1890 ; comp. Bkoy. Rr. 222 and 222a.]

105. Where a liquidator is appointed in a winding-up by the Oourt all proofs of
debts that have been received by the official receiver shall be handed ovex to the
liquidator, but the official receiver shall first make a list of such proofs, and take a
receipt thereon from the liquidator for such proofs. [Formerly R. 109 of 1890 ;
Bkcy. R. 223. As to swearing proofs, see note to Form 157, and R. 96, supraj]



Notice to
creditors to
proye.



Examination
of proof.



Expunging.



Oaths.



Admissiox and Bejeotiox of Pboofb, Ain) Appeal to the Ooxtet.

B. 106 of 1008. — Subject to the provisions of the Acts, and imless otherwise
ordered by the Court, the liquidator in any winding-up may from time to time fix a
certain day, which shall be not less than fourteen days from the date of the notice
on or before which the creditors of the company are to prove their debts or
claims, or to be excluded from the benefit of any distribution made before such
debts are proved, and the liquidator shall give notice in writmg of the day so fixed
by advertisement in such newspaper as he shall consider convenient, and in a
winding- up by the Court to every person mentioned in the statement of affairs as a
creditor and who has not proved his debt, and in any other winding-up to the
last known address or place of abode of each person who, to the knowledge of the
liquidator, claims to be a creditor of the company and whose claim has not been
admitted. [New. See s. 13 of 1890.]

Br. 107 — 118 of 1903 are as follows, and the company rules for which they are
substituted were pai-tly taken from Sched. II. to the Bankruptcy Act, 1883 : —

107. The liquidator shall examine every proof of debt lodged with him and the
grounds of the debt, and in writing admit or reject it, in whole or in part, or
require further evidence in support of it. If he rejects a proof he shall state in
writing to the creditor the grounds of the rejection. [R. 110 of 1890, and
Sched. II. r. 22, and see Wms. on Bkcy., p. 382.]

108. If a creditor or contributory is dissatisfied with the decision of the liquidator
in respect of a proof, the Court may, on the application of the creditor or
oontributory, reverse or vary the decision [Sched. II. r. 24] ; but, subject to the
power of the Court to extend the time, no application to reverse or vary the dedsion
of the liquidator in a winding-up by the Court rejecting a proof sent to him by a
creditor or person claiming to be a creditor, shall be entertained, unless notice of
the application is given before the expiration of twenty-one days from the date of
the seryice of the notice of rejection. [Formerly R. Ill of 1890 ; and oomp.
Bkcy. R. 230.]

109. If the liquidator thinks that a proof has been improperly admitted, the
Court may, on the application of the liquidator, after notice to the creditor who
made the proof, expunge the proof or reduce its amount. [R. 112 of 1890, and
Sched. II. r. 23 ; and see Ex parte Earper, 21 C. D. 537.]

110. The Court may also expunge or reduce a proof upon the application of a
creditor or contributory if the liquidator declines to interfere in the matter. [R. 1 18
of 1890, and Sched. II. r. 26 ; and see Ee Stenson, 25 C. Div. 147 ; Ex parte Ewmey^
5Mor. 119.]

111. For the purpose of any of his duties in relation to proofs, the liquidator



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CREDITORS. 443

in a winding-up by the Gonrt may adminiBter oaths and take affidavits. [B. 114
of 1890, and Sohed. XL r. 26.]

118. In a winding-up by the Court the official receiver, before the appointment Powers of
of a liquidator, shall have all the powers of a liquidator with respect to the ^™^^
examination, admission, and rejection of proofs, and any act or decision of his in
relation thereto shall be subject to the like appeal. [R. 116 of 1890, and
Sohed. II. r. 27.]

118. In a winding-up by the Court the official receiver, where no other liquidator Official re-
is appointed, shall, before payment of a dividend, file all proofs tendered in the <^v^ ^ "1©
winding-up, with a list thereof, distioguishing in such list the proofs which were ^
wholly or partly admitted, and the proofs which were wholly or partly rejected.
[Formerly R. 116 of 1890 ; and comp. Bkcy. R. 224.]

114. Every liquidator in a winding-up by the Court other than the official receiver Liquidator to
shall, on the first day of every month, file with the registrar a certified list of all ^® ^ »^
proofs, if any, received by him during the month next preceding, distinguishing in ^

such lists the proofs admitted, those rejected, and such as stand over for further
consideration ; and, in the case of proo& admitted or rejected, he shall place the
proofs to be filed with the registrar. [Formerly R. 117 of 1890, taken &om Bkcy.
R. 226.]

115. The liquidator in a winding-up by the Court, including the official receiver Procediure
when he is liquidator, shall, within three days after receiving notice from a creditor ^^ appeal,
of his intention to appeal ag^ainst a decision rejectiug a proof, file such proof with

the registrar with a memorandum thereon of his disallowanoe thereof. [Formerly
R. 118 of 1890, taken from Bkcy. R. 226.]

[R. 119 of 1890 was annulled by R. 34 of Ap. 1892, and the following provision
was substituted for it.]

116. — Subject to the power of the Court to extend the time in a winding-up by Time for offi-
the Court, the official receiver as liquidator, not later than fourteen days from the <^ receiver
latest date specified in the notice of his intention to declare a dividend as the time ^.^^t or
within which such proofs must be lodged, shall in writing either admit or reject
wholly or in i»art every proof lodged with him, or require further evidence in support
of it. [Formerly R. 29 of April, 1892, taken from Bkcy. R. 227. The ftUiwuMit,
may be cross-examined on his affidavit, or an order to examine him under sect. 116
of the Act of 1862 may be obtained. See Chap. XUL]

117. — Subject to the power of the Court to extend the time, the liquidator in a Time for
winding-up by the Court, other than the official receiver, within twenty- eight days liquidator
after receiving a proof which has not previously been dealt with, shall in writing ^ ^^ ^*
either admit or reject it wholly or in part, or require further evidence in support of
it. Provided that where the liquidator has given notice of his intention to declare
a dividend, he shall within fourteen days after the date mentioned in the notice as
the latest date up to .which proofs must be lodged examine and in writing admit or
reject or require further evidence in support of, every proof which has not been already
dealt with, and shall give notice of his decision rejecting a proof wholly or in part to
the creditors affected thereby. [R. 120 of 1890 (varied), taken from Bkcy. R. 228.]

118. — ^The official receiver shall in no case be personally liable for costs in relation Costs of
to an appeal from his decision rejecting any proof wholly or in part. [Formerly ^PP^*
R. 121 of 1890, taken from Bkcy. R. 231.]

Dividends.

E. 119 of 1908.— (1.) Not more than two months before declaring a dividend, the ^^^^^n,,
liquidator in a winding-up by the Court shall give notice of his iatention to do so to ^Ir? /S~7^'
the Board of Trade in order that the same may be gazetted, and at the same time to 435 ; final

dividend
Form 439).



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444



WINDING-UP BY THE COURT, [ChAP. XXXVII.



Appeal.



Declaration of
diyidend.

Gazetting.
Form 439.



Postpone-
ment.



such of the creditors mentioned in the statement of affairs as have not proyed their
debts. Such notice shall specify the latest date up to which proofs must be lodged,
which shall not be less than fourteen days from the date of such notice.

(2.) Where anj creditor, after the date mentioned in the notice of intention to
declare a dividend as the latest date up to which proofs may be lodged, appeals
against the decision of the liquidator rejecting a proof, notice of appeal shaU, sub-
ject to the power of the Court to extend the time in special oases, be given within
seven days from the date of the notice of the decision against which the appeal is
made, and the liquidator may in such case make provision for the dividend upon
such proof, and the probable costs of such appeal in the event of the proof being*
admitted. Where no notice of appeal has been given within the time specified in
this rule, the liquidator shall exclude all proofs which have been rejected from
participation in the dividend.

(3.) Immediately after the expiration of the time fixed by this rule for appealing
against the decision of the liquidator he shall proceed to declare a dividend, and
shall give notice to the Board of Trade (in order that the same may be gazetted),
and shall also send a notice of dividend to each creditor whose proof has been
admitted.

(4.) If it becomes necessary, in the opinion of the liquidator and the committee of
inspection, to postpone the declaration of the dividend beyond the limit of two
months, the liquidator shall g^ve a fresh notice of his intention to declare a dividend
to the Board of Trade in order that the same may be gazetted ; but it shall not be
necessary for the liquidator to gfive a fresh notice to such of the creditors men*
tioned in the statement of afPairs as have not proved their debts. In all other
respects the same procedure shall follow the fresh notice as would have followed the
original notice. [Formerly R. 122 of 1890, which was taken from Bkoy. R. 232.]

(5.) As to transnucsion of list to registrar, see Appendix and Forms 452a and
4o2b, infra.

(6.) Dividends may, at the request and risk of the person to whom they are pay-
able, be transmitted to him by post.

(7.) If a person to whom dividends are payable desires that they shall be paid to
some other person, he may lodge with the liquidator a document in the Form 72
[p. 486, infra] which shall be a sufficient authority for the payment of the dividends
to the person therein named.

As to dividend payable on amount of claim when sent in without deduction of
payments afterwards made by third parties, see Ligomel Spitminp Co, ; Ex part*
Bank of Ireland (1900) I. R. 824.



Realization.



Surrender.

Assessed
value.



Proof by Secured Creditors.

2nd Sohed. to Bankmptey Act, 188S, contains also the following rules (aa to
which see Williams on Bankruptcy, pp. 374 — 378).

0. If a secured creditor realizes his security, he may prove for the balance due to
him after deducting the net amount realized*

10. If a secured creditor surrenders his security to tho official receiver or trustee,
for the general benefit of the creditors, he may prove for his whole debt.

11. If a secured creditor does not either realize or surrender his security, he shall,
before ranking for dividend, state in his proof the particulars of his security, the
date when it was gfiven, and the value at which he assesses it, and shall be entitled
to receive a dividend only in respect of the balance due to him after deducting the
value so assessed.



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CREDITOBS. 445

13. — (a) Where a seoority is so yalaed, tiie trustee may at any time redeem it on Redemption
payment to the creditor of the assessed value. ^^ security.

(b) If the trustee is dissatisfied with the yalue at which a security is assessed, he
may require that the property comprised in any security so valued be offered for
sale, at such times and on such terms and conditions as may be agreed on between
the creditor and the trustee, or as, in default of such agreement, the Court may
direct. If the sale be by public auction, the creditor, or the trustee on behalf of Sale,
the estate, may bid or purchase.

(c) Provided that the creditor may at any time by notice in writing require the Election,
trustee to elect whether he will or will not exercise his power of redeeming the
security or requiring it to be realized ;*and if the trustee does not, within six months

after receiving the notice, signify la writing to the creditor his election to exercise
the power, he shall not be entitled to exercise it, and the equity of redemption, or
any other interest in the property comprised in the security which is vested in the
trustee, shall vest in the creditor, and the amount of his debt shall be reduced by the
amount at which the security has been valued.

18. Where a creditor has so valued his security he may at any time amend the Amending
valuation and proof on showing to the satisfaction of the trustee or the Court that valnation.
the valuation and proof were made 6(md Jide on a mistaken estimate, or that the
security has diminished or increased in value since its previous valuation ; but every
such amendment shall be made at the cost of the creditor, and upon such terms as
the Court shall order, unless the trustee shall allow the amendment without appli-
cation to the Court. (See lie Clark, (1901) 1 K. B. 655.)

14. Where a valuation has been amended in accordance with the foregoing rule. Surplus divi-
the creditor shall forthwith repay any surplus dividend which he may have received dend.
in excess of that to which he would have been entitled on the amended valuation,
or, as the case may be, shall be entitled to be paid, out of any money for the time
being available for dividend, any dividend, or share of dividend, which he may have
failed to receive by reason of the inaccuracy of the original valuation, before that
money is made applicable to the payment of any future dividend, but he shall not
be entitled to disturb the distribution of any dividend declared before the date of
the amendment.

16. If a oreditor, after having valued his security, subsequently realizes it, or if Subsequent
it is realized under the provisions of Rule 12, the net amount realized shall be sub- realization,
stituted for the amount of any valuation preriously made by the creditor, and shall
be treated in all respects as an amended valuation made by the creditor.

16. If a secured creditor does not comply with the foregoing rules he shall be Exclusion,
exdaded from all share in any dividend.



Proofs by Shareholders.

8eot. 88 (7) of 1868. — ^No sum due to any member of a company, in his character
of a member, by way of dividends, profits, or otherwise, shall be deemed to be a
debt of the company, payable to such member in a case of competition between
himself and any other creditor not being a member of the company ; but any such
sum may be taken into account, for the purposes of the final adjustment of the
rights of the contributories amongst themselves.

Bat a member may prove, in competition with non-members, for a debt due to
him as a Strang^. OruteWa ease, 1 Ch. 528; Humber Ironworkt Co., 8 Eq. 122;
JUilway l%me Table$ FithUtking Co,, Ex parU WeUon, (1899) 1 Ch. 103 ; and see
infra, p. 466, <* SiLiBzn and Waoss."



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446



WINDING-UP 6Y the COURT. [ChAP. XXXVII.



Court may
fix time.



Liquidator's
Power. •



Exclusion of Creditors not proving in time.

Seet. 107 of 1862. — The Court may fix a certain day or certain days on or within
which creditors of the company are to prove their debts or claimSi or to be excluded
from the benefit of any distribution made before such debts are proved.

Sect. 18 of 1890. — General Rules may be made for requiring or enabling all or
any of the powers and duties conferred and imposed on the Court by [the above
section] to be exercised or performed by the liquidator as an officer of the Court
and subject to the control of the Court. [And see B. 106 of 1903, supra,"]



Alphabetical Table as to Proof of Debts.

Admission.

As to liquidator's power to admit or reject, see B. 107 of 1903. As to official
receiver's power, see R. 112 of 1903. As to the times limited for so doing, see
Rr. 116 and 117 of 1903. But if the proof is rejected after time, the liquidator'B
opposition to creditor's application may be treated as a motion to expunge.
Ex parte Fenton^ 63 L. T. 967.

Ajfftdavit.

Proof of debt to be made by affidavit. R. 92 of 1903. As to contents, see R. 94
of 1903, Bupra^ and Form 157. Affidavit includes affirmations and declarations.
See Interpretation Act, 1889, s. 3.

Liquidator's power to administer oaths, see R. Ill of 1903 ; and official reoeiver's
power, see Rr. 96 and 112 of 1903.

Ameitdment.

A creditor may, it would seem, obtain leave to amend his proof, but without
prejudice to dividends already declared. Re Bamed*8 Banking Co., 18 W. R. 944;
£x parte Cama^ 9 Ch. 686. And as to amendment by a secured creditor, see Re
Arden, 14 Q. B. D. 121 ; Ex parte Boffshaw, 13 C. D. 306 ; Ifennf Zieter ^ Co,, (1892)
2 Ch. 419. In the case last mentioned, a secured creditor had inadvertently proved
without valuing his security, and had voted at the first meeting of creditors, but he
was allowed to amend his proof. See also Ex parte Schqfield, 12 C. D. 837 ; Ex parte
Whitton, 43 L. T. 480.

As to amending valuation and proof, see Ex parte National^ %e. Bank, Re KewtOHf
(1896) 2 Q. B. 403 ; i2<» Clark, (1901) 1 K. B. 666.

Annuity.
As to proving in respect of an annuity, see Re Gieve, Ex parte Shaw, 80 L. T. 737.

Appeax.
' As to appeal by creditor or contributory from decision of liquidator in respect of
a proof, see R. 108 of 1903 ; and from decision of official receiver, see R. 112
of 1903. And see Chap. XLVIII.

Assignment.

When A. is a creditor of or has a provable claim against the ocMnpaay, and has
assigned it to B., and B. seeks to prove in respect thereof, he most prore the



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CREDITORS. 447

assignment. An equitable assignee can prove {Ex parte Colbome and Strawhidge,
11 Eq. 478); and an assign under sect. 26 (6) of the Jud. Act, 1873. Milan
TramicayB, 26 C. D. 687 ; Walker v. Bradford Old Bank, 12 Q. B. D. 611. But as
to a subsequent assignment of the debt not entitling the assignee to diyidends, at
any rate in bankruptcy, see Re Frost, (1899) 2 Q. B. 60, and see Form 440, and
note thereto.

Bank Notes.

Can be proved for. Fast of England Banking Co,, 4 Ch. 14 ; Herefordshire Banking
Co., 4 Eq. 250. Where sect. 6 of the Companies Act, 1879, applies, the liability
of a limited company in respect of notes is unlimited; but the better opinion
is that this section only applies to banks registered under Part VII. of the Act
of 1862.

Bills of Exchangs.

See B. 103 of 1903 as to production.

The holder of a bill of exchange upon which the company is liable, whether as
acceptor, indorser, or drawer, can prove in the winding-up, whether the company
is solvent or insolvent, and whether his bill is current or overdue. See sect. 168
of 1862, and sect. 37 of the Bankruptcy Act, 1883 ; Alsager v. Currie, 12 M. & W.
761. And the fact that other parties are liable on the bill does not make the
holder a secured creditor, or compel him to value, though he is bound to state the
biUs in his proof. Ex parte SchoJUld, 12 C. D. 337. He may g^t what he can out
of the other parties and the company concurrently, provided that he does not obtain



Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 58 of 152)