Charles Mac Naughten Sir Francis Beaufort Palmer.

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

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(6.) The liquidator where the official receiver is not the liquidator, and any
creditor or contributory of the company, may also take part in the examination
either personally or by solicitor or counsel.

(6.) The Court may put such questions to the person examined as to the Court Court may put
may seem expedient. questions.

(7.) The person examined shall be examined on oath, and it shall be his duty to Procedure at
answer aU such questions as the Court may put or allow to be put to him. The ©^animation,
person examined shall at his own cost, prior to such examination, be furnished with
a copy of the official receiver's report, and shall also at his own cost be entitled to
employ at such examination a solicitor with or without counsel, who shall be at
liberty to put such questions to the person examined as the Court may deem just
for the purpose of enabling that person to explain or qualify any answers given by

qq2



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596



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



Ooflts.
Depositions.



Adjonmment.

Before whom

examination

held.



him. Provided always, that if such person is, in the opinion of the Conrt, excul-
pated from any charges made or suggested against him, the Court may aUow him
such costs as the Court in its discretion may think fit. Notes of the examination
shall be taken down in writing, and shall be read over to or by, and signed by, the
person examined, and may thereafter be used in evidence against him. They shall
also be open to the inspection of any creditor or contributory of the company at all
reasonable times.

(8.) The Court may, if it thinks fit, adjourn the examination from time to time.

(9.) A public examination under this section may, if the Court so directs, and
subject to general rules, be held before any judge of County Courts, or before any
officer of the Supreme Court, being an official referee, master, registrar in bank-
ruptcy, or chief clerk, or before any district registrar of the High Court named for
the purpose by the Lord Chancellor, or in the case of companies being wound up
by a Palatine Court, before a reg^istrar of that Court, and the powers of the Court
under sub-sects. (6), (7), and (8) of this section may (except as to costs) be exer-
cised by the person before whom the examination is held.



Casbs.
Contents of
preliminaiy
report.



Officers.

Frauds on
outsiders.



The section only applies where the company is being " wound np
by order of the Court," as to which see sect. 81 (2) of 1890. But
when the winding-up is voluntary or under supervision, a private
examination may be ordered and adjourned into Court. See Chap.
XLH.

The preliminary report (see Form 152) is required whether a public
examination is or is not contemplated. See Chap. XVI. But such
preliminary report is not sufficient to support an application for
public examination. Ex parte Barnes, (1896) A. C. 146; Great
Kruger Co., (1892) 3 Ch. 307.

'' An object, if not the only object, of the first sub-section of sect. 8
was to impose on the official receiver at an early period the duty of
bringing before the Court information upon certain matters connected
with the company which would be very important in guiding the
judgment of the Court as to the persons who ought to be summoned
under sect. 115 " of 1862. Per Lord Herschell in Ex parte Barnes, at
p. 154.

As to what persons are " officers of the company," see Chap. XLIV.

The section was not " intended to apply to a case where the charges
[are] brought against the company of having committed frauds in the
course of its business with the outside world, and not connected in any
way with the promotion or formation of the company — that is to say,
of its conduct towards persons dealing with it other than shareholders
as regards their membership in the company." Per Yaughan Wil-
liams, J., Medical Battery Co., (1894) 1 Ch. 444, 447. But query
whether this view is quite correct, for the section contemplates two
cases — (a) fraud in the promotion or formation of the company;
(b) fraud committed " by any director or other officer of the company
in relation to the company since the formation thereof." The latter is
not confined to fraud in the promotion or formation.



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PUBLIC EXAinNATION. 61*7

With reference to the words in sub-sect. 2, " if he thinks fit, make Further
a further report," they mean that such report is only to be made if the 'fj^. *
official feoeiver '' arrives at a judicial conclusion in his own mind that receiver's
such facts are before him, and in proof, that it becomes his duty," to judicial
make the report. " It is not [even then] necessary for him to do it in
every case, but only in such cases as in his judgment demand such a
course to be pursued." Per Lord Halsbury, L. C, Ex parte Barnes^
(1896) A. C. 150.

The further report, in order to justify a public examination of A., Fraud to
must contain an expression of opinion by the official receiver that a ^r^^^^j^^
fraud has been committed by A. in the promotion or formation of the person to be
company, or that A. (being a director or other officer of the company) ®^*"^"^^
has committed a fraud in relation to the company since its incorpora-
tion (see paragraph 2 of the section), and a finding of fraud against B.
does not justify an application for the public examination of A. '* It
is not enough that there is a general finding that fraud must have
existed somewhere." Ex parte Barnes^ ubi supra, overruling Trust and Demolitioii of
Investment Corporation of South Africa, (1892) 3 Ch. 332; G^ewera/ ®*'^^ *^*^-
Phosphate Corporation, (1895) 1 Ch. 3 ; Laxon S^- Co,, (1893) 1 Ch. 210;
and Birkdale Steam Sfc, Co., (1893) 2 Q. B. 386 ; and (to some extent)
Great Kruger Gold Mining Co,, (1892) 3 Ch. 307.

The further report under sub-sect. 2 must not only state that the
person whom it is wished to examine had taken part in the promotion
or formation, and that, in the opinion of the official receiver, fraud
had been committed by him in the promotion or formation, but must
also state facts showing a basis for the official receiver's opinion, and
warranting the judge in calling upon the person implicated for an ^

explanation. See Civil, Naval and Military Outfitters, C. A. (1899)
1 Ch. 215, and the observations therein made as to the proper mode of
framing the report.

If on the public examination of A., who has been inculpated, or Second

from information which the official receiver has obtained otherwise, ^^^^
* • • • 1. /*> • 1 • report,

it appears that B. and C. are in a similar position, the official receiver

may make a second report and apply for their public examination

without first privately examining them imder sect. 115 of 1862. Per

Lords Macnaghten and Herschell, Ex parte Barnes, (1896) A. C. at

p. 157.

The function of the official receivers as to reporting as to and Control of
applying for public examinations, is one which they perform as officers BQ^rd of
of the Court, and they must act on their own responsibility and not Trade,
under the control of the Board of Trade. Per Vaughan Williams, J.,
W. N. (1894) 44; but see instructions of Board of Trade set out in
Appendix C.

Every report must be in writing, and if subsequently additional ^®^j^ ^ ^®
information is obtained, justifying a public examination, the fresh .[



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598



WINDING-UP fiY THE COURT. [ChAP. XLTIL



Application
for order.



Trenaf erring
examination.



facts, to become operatiye, must be embodied in a supplem^ital report.
Great Kruger Co., uhi sup.

The application for the order for examination may be made ex parte.
Trust and Investment Corporation, (1892) 3 Ch. 332 ; and it is usually
so made.

As to discharging, admitting eyidence to rebut, or sending back
the report, on the application of the examinee, see New Travellers*
Chambers, (1895) I Ch. 395 ; Civil, Naval and Military Outfitters, supra,
where Wright, J., said the application to discharge ought to be made
within a reasonably short time. And the Court of Appeal has since
taken the same view. National Stores, (1900) 1 Ch. 27, affirming
Wright, J., (1899) 2 Ch. 773. A delay of two months is unreasonable.
Ibid.

The person summoned can apply to discharge the order on the
ground of want of jurisdiction, but not otherwise. New Travellers^
Chambers, supra; National Stores, (1899) 2 Ch. 773.

There is such a want of jurisdiction when the proposed examinee is
not within the class of persons who may be examined under sub-sect. 2
of sect. 8.

A person who is examined and is exculpated is entitled to costs (see
sect. 7), and so is a person who is ordered to be examined when the
order is made without jurisdiction {Hounslow Brewery Co., W. N.
(1896) 45) ; and the order will be for payment of costs simply, without
limiting the payment so as to make it come only '^ out of the assets of
the company." Ibid.

The Court will not readily transfer the examination from a Oounty
Court in the district of which most of the creditors and contributories
reside. New Par Consols, Wright, J., March 16, 1899.

As to contempt of Court by offering money to suppress facts at a
public examination, see Ee Hooley, Rucker^s case, 79 L. T. 306.



HXTLBB.

Appointing

shorthand

writer.



Befusal to
answer.



B. 74 of 1908. — If the Conrt or the officer of the Court before whom any examina-
tion under the Acts and roles is directed to be held shall in any case, and at any
stage in the proceeding^, be of opinion that it would be desirable that a person
(other than the person before whom an examination is taken) should be appointed
to take down the evidence of any person examined in shorthand or otherwise, it
shall be competent for the Court or officer aforesaid to make such appointment.
The person at whose instance the examination is taken shall nominate a person for
the purpose, and the person so nominated shall be appointed, unless the Conrt or
officer holding the examination shall otherwise order. Every person so appointed
shall be paid a sum not exceeding one guinea a day, and a sum not exoeeding %d.
per folio of 90 words for any transcript of the evidence that may be required, and
such sums shall be x>aid by the party at whose instance the appointment was made,
or out of the assets of the company, as may be directed by the Court. [Formeriy
B. 16 of 1890. Taken from Bkcy. Br. 67 and 67a ; and see Wms. on Bkqy. p. 411.]

B. 75 of 1908. — (1.) If a person examined before a registrar or other officer of the
Court, who has no power to oommit for contempt of Court, refuses to answer to the



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PUBLIC EXAMINATION. 699

8ati8faotio& of the registrar or officer any question whicli he may allow to be pnt,
the registrar or officer shall report saoh refusal to the judge, and upon such report
being made the person in default shall be in the same position and be dealt with in
the same manner as if he had made default in answering before the judge.

(2.) Hie report shall be in writing, but without affidavit, and shall set forth the Keport
question put, and the answer (if any) given by the person examined. thereof,

(3.) The registrar or other officer shall, before the conclusion of the examination at Action
which the default in answering is made, name the time when and the place where thereon,
the default will be reported to the judge ; and upon receiving the report the judgre
may take such action thereon as he shall think fit. If the judge is sitting at the
time when the default in answering is made, such defouH may be reported imme-
diately. [Formerly B. 17 of 1890. Taken from Bkoy. B. 88.]

[See supra, p. 695.]

Br. 62—70 of 1908 are as follows :—

02. A report made by the official receiver pursuant to sect. 8 of the Act of 1890, Beport under
shall state in a narrative form the facts and matters which the official receiver Beet. 8.
deeires to bring to the notice of the Court, and his opinion as required by the said

section. [Formerly B. 62 of 1890.]

03. The official receiver may apply to the Court to fix a day for the consideration Consideration
of the report, and on such application the Court shall appoint a day on which the tihereof .
report shall be considered. [Formerly B. 70 of 1890.]

04. The consideration of the report shall be before the judge of the Court per- Further
sonally in Chambers, and the official receiver shall personally, or by counsel or information,
solicitor, attend the consideration of the report, and give the Court any further
information or explanation with reference to the matters stated in the report which

the Court may require. [Formerly B. 71 of 1890.]

65. Where the judge makes an order under sect. 8 of the Companies (Winding- Before whom
up) Act, 1890, directing any person or persons to attend for public examination : — exMnmation

(a.) The examination shall be held before the judge. Provided that in the High
Court the judge may direct that the whole or any part of the examination
of any such person or persons be held before the registrar or before any of
the persons mentioned in sub-sect. 9 of the said section.

(b.) The judge may, if he think fit, either in the order for examination, or by
any subsequent orders, give directions as to the special matters on which
any such person is to be examined.

(c.) Where on an examination held before the registrar or one of the persons
mentioned in sub -sect. 9 of the said section he is of opinion that such
examination is being unduly or unnecessarily protracted, or for any other
sufficient cause, he may adjourn the examination of any person or any
part of the examination to be held before the judge.
[Bule 26 of Ap. 1892 varied.]

66. Upon an order directing a person to attend for public examination being Application
made, the official receiver shall apply for the appointment of a day on which the for appoint-
public examination is to be held. [Formerly B. 73 of 1890. This and the next "^®^*"

rule and B. 68 (I) are taken from Bkcy. Br. 184, 186.]

67. A day and place shall be appointed for holding the public examination, and Appointment
notice of the day and place so appointed shall be given by the official receiver to the to examine,
person who is to be examined by sending such notice in a registered letter addressed J£^^^

to his usual or last-known address. [Formerly B. 74 of 1890.] examinee.

68. — (I.) The official receiver shall give notice of the time and place appointed Notice to

for holding a public examination to the creditors and contributories by advertise- creditors and

ment in such newspapers as the Board of Trade from time to time direct, or in oontribu-

tones.



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600



WINDING-UP BY THE COUBT. [ChAP. XLIII.



default of any such direction as the official reoeiyer thinks fit, and shall also tarwnid
notice of the order to the Board of Trade to be gazetted. [Formerly B. 76 of 1890.]

(2.) Where an adjournment of the public examination has been directed, notice
of the adjournment shaU not, unless otherwise directed by the Court, be advertised
in any newspaper, but it shaU be sufficient to publish in the Gazette a notice of the
time and place fixed for the adjourned examination. [New.]
Arrest of 69. — (1.) If any person who has been directed by the Court to attend for

examinee. public examination fails to attend at the time and place appointed for holding
or proceeding .with the same, and no good cause is shown by him for such failure,
or if before the day appointed for the examination the official receiver satisfies the
Court that such person has absconded, or that there is reason for believing that he
is about to abscond with the view of avoiding examination, it shall be lawful for
the Court, upon its being proved to the satisfaction of the Court that notice of the
order and of the time and place appointed for attendance at the public examination
was duly served, without any further notice, to issue a warrant for the arrest of ^e
person required to attend, or to make such other order as the Court shall think
just. [Formerly R. 76 of 1890, taken from Bkoy. R. 186.]

(2.) A warrant of arrest issued by the High Court under this rule shall be issued
in the Central Office of the Supreme Court, pursuant to an order of the judge
directing such issue. [Formerly R. 13 of April, 1892.]

70. The notes of every public examination shall, after being signed as required
by the Act of 1890, be filed with the registrar. [Formerly R. 77 of 1890.]

Sect. 8 (7) of 1890, supra, gives creditors and contributories the right to inspect
the depositions, and the right to inspect includes the right to take copies. See
cases cited supra, p. 164. Qy., whether the creditor or contributory may himself
take the copies without paying for office copies. See Arauco Co., W. N. (1899; 134.

R. 73 of 1903 purports to make the notes upon proceedings under sect. 10
Evidence of of 1890 admissible in evidence, not only as agmnst the person examined, but as
depositions. against every creditor and contributory. See the rule, infra. Chap. XLIV.



Warrant to
arrest.



Pih'ng
depositions.



Form 575.

Further
report of
official re-
ceiver under
sect. 8 of 1890.



{Full title and reference to record,)

The off receiyer, pursuant to sect. 8 of the Cos (Winding-up) Act,
1890, hby further reports to the Ct as follows: \^Here state the facts
with reference to the formation of the coy^ and any other matters which in
the off receiver's opinion ought to be brought to the attention of the CV.]
The off receiver is of opinion that \_state or refer to the particular
transaction^ constituted a fraud in the promotion of the coy committed
by the persons named in the [first part of the] schedule hereto. [The
off receiver is also of opinion that a fraud was, since the formation of
the coy, committed by the directors and other officers of the coy
named in the second part of the sd schedule, in making and canying
out the sd arrangement under which they secretly, &c.]

, Off Eeceiver.



Schedule of persons to be examined.
As to what report must state to justify a public examination of a person, see
supra, p. 697.



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PUBUC EXAMINATION. 601

\{FuU Title.) Form 676.

Let aQ parties concerned attend the Judge in Ohambers at the Eoyal Summons for

Cts of Justice, Strand, London, W.C, on day, the day of , f^?^^^^.

19 — , at o'clock in the noon, on the hearing of an applicon tion of report

of the off recr of the aboye-named coy that the report of the applicant, ^niOTfOT
dated, &c., be considered, and such order made thereon as the Gt may public exami-
deem just. Dated, &c. ^^ ^

This summons was taken out by the off recr in cos liquidation,
83, Carey Street, Lincoln's Inn, W.O.

As to the applioation being ex parte, see Trutt and Investtnmt Corporationf (1892)

8 Ch. 332.
As to the consideration of the report, see R. 64 of 1903, supra.
Any further information must be given in the form of a supplemental report in

writing. Great Kruger Co,, (1892) 3 Ch. 318. See Form 689.



{Full Title.) Form 677.



Upon the applicon of G. S. B., the off recr in the above matter, by Order direct-
summons dated the day of , 19 — , and upon hearintr the ^^firapiihho

•^ . * ° exammation.

applicant, and upon reading the order to wind up the sd coy, dated, &c., p^y^ 3^ ^f

and the two reports of the applicant made to the Ct, and dated resply 1903, altered
the, &c., and, &c., It is ordered that the several persons, whose names ^ "^ ^^^ °®*
and addresses are set forth in the schedule hto, do attend before a
registrar in bankruptcy of the High Ct on a day to be named for the
purpose, and be publicly examined as to the promotion or formation
of the coy, and as to the conduct of the business of the coy, and as to
their conduct and dealiags as directors or officers of the coy.

The Schedule referred to.

(It contains three columns, headed resply, " name,'* *' address," and
" connection with the coy.")

In the High Court the practice is to order all public examinations to be taken
before ** a Registrar in Bankruptcy of the High Court."

The names are f requentiy placed in a schedule with three columns, as in the last
form.

Such an order cannot be seryed out of the jurisdiction. Jie JFtmdt, 22 Q. B. Div.
733.

The date is stated at the beginning of the order, as in otiier cases, not at the end
as in Form 31 of 1903.



{Address, Date, and Title 0/ matter.) Form 678.



Sir, — I am desired by the off recr to inform you that on the Notice of

an order for a public examination was made in the above matter and ^^^*



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602



WINDING-UP BY THE OOUBT. [ChAP. XLIII.



that you are one of the persons ordered to be examined. You wfll
receiye notice of the time and place appointed for holding the exami-
nation, when the same has been fixed. — I am, sir, your obedient
servant, X. Y., Assistant Off Eecr.

For some time after the Rules of 1892 it was the practice to obtain an appoint-
ment without issuing an ex parte summons, notwithstanding B. 73 of 1890, now
B. 66 of 1903 {ftupr<C), was still unrepealed, and not to make such an order as is
contained in the next form ; but the ofBoial reoeiyers now strictly adhere to B. 66
of 1903.



Form 579.

Order ap-
IK>inting a
time for
public

examination.
Form 32 of
1903.



Upon the applicon of the off reor in the above matter, it is ordered that the pubUo

examination of , who by the order of was directed to attend before to

be publicly examined , be held at \\niert the place for the examxnai%im\y on the

day of , 19 — , at o'clock in the .

And it is ordered that the above-named do attend at the place and time

above mentd.

Dated this day of , 19—.

Note. — Notice is hereby given that if you, the above-named , fail, without

reasonable excuse, to attend at the time and place aforesaid, you will be liable to be
committed to prison without further notice.

As to appointing a day and place for holding the public examination, and giving
notice thereof to the person to be examined, see B. 67 of 1903, tupra. And see
notes to last form.



Form 580.

Koticeto
attend public
examination.
Form 33 of
1903.



The following is the form of notice : —

{TitU,)

Whereas by an order of this Ct, made on the day of — — ,

189 — , it was ordered that you the under-mentd should attend

before the Begistrar [or aa the case may 60], on a day to be named for
the purpose, and to be publidy examined as to the promotion or
formation of the coy, and as to the conduct of the business of the coy,
and as to your conduct and dealings as [insert " director " or " oflficer,"
or as the case may be"].

And whereas the day of , 189 — , at o'clock in the

noon, before the Eegistrar sitting at , has been apx>ointed as

the time and place for holding the said examination.

Notice is hby given that you are required to attend at the sd time
and place, and at any adjournments of the examination which may be
ordered, and to bring with you and produce all books, papers, and
writings, and other documents in your custody or power in any wise
relating to the aboye-named coy.

And take notice that if you fail, without reasonable excuse, to att^id



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PUBLIC EXAMINATION. 603

at Buch time and place and at the adjournments of the sd public
examination which may be ordered, you will be liable to be committed
to prison without further notice.

Dated the day of , 19—.

To [Name] Off Eecr.



\^Addre9i]



{Title.) Form 681.



Take notice that the public examination of in the above Notice to

matter, held on the day of , 19—, at , was adjourned 2|J^^°'

to the day of , 19 — , and wiU accordingly be held at , public exami-

on the sd day, at o'clock in the noon. nation.

Notice is hby given that you are required to attend at the sd time
and place, and at any adjournments of the examination which may be
ordered, and to bring with you and produce all books, papers, and
writings and other documents in your custody or power in anywise
relating to the above-named coy.

And take notice that if you fail, without reasonable excuse, to attend
at such time and place, and at the adjournments of the sd public
examination which may be ordered, you will be liable to be committed

to prison without further notice. Dated the day of , 19 — .

Off Beer in Cos Liquidaiton. [^Address. 1

To .

See B. 68 (2) of 1903, mpra.



TTpon the adjourned public examination in the on —day, Form 582.

the day of , at in the forenoon, before , at 34,



Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 77 of 152)