Charles Mac Naughten Sir Francis Beaufort Palmer.

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

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which one of them and the judge of the Court, may desire to have determined in
the first instance in the High Conrt, the judge shall state the facts in the form of a

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special oase for the opinion of the High Court, and thereupon the special case and

the proceedings, or such of them as may be required, shall be transmitted to the

High Court for the purposes of the determination.
The special case, &c., are to be sent to the High Court, but the jurisdiction is,

under sect. 2 of 1890, and the order of 26th March, 1892, Tested in Vaughan

WiUiams, J.
As no rules haye been made to carry out this provision, R. 201 of 1908 imports the

existing procedure in the High Court with reference to special oases ; as to which

see An. Pr. (1904) pp. 443-447.
Transfer. But as, under sect. 3 (1) of 1890, any proceedings in the winding-up may be

transferred, and at any stage, it will often be more conyenient to apply to the High

Court to transfer the particular proceedings to that Court.
Even before the Building Societiee Act, 1894, it was held that in the winding-up

in the County Court of a building sodety reg^istered under the Building Societies

Act, 1874, a special case for the opinion of the High Court might be stated under

sect. 3 of the Act of 1890. Portsea Island Building Society, (1893) 3 Ch. 206. And

see now sect. 8 of the Act of 1894 (67 & 68 Vict. c. 47).
Stannaries As to appeals from County Courts in matters formerly within the jurisdiotiQn of

jurisdiction. ^^ j^q^ abolished Stannaries Court, and as to appeals generally from County

Courts, see Chap. LII.

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Sect. 93 of 1862. — Any official liquidator may resign or be rem07ed by the Court Court's power

on due cause shown ; and any vacancy in the office of an ((fflcial liquidator appointed ^ remove.

by the Court shaU be filled by the Court. f!!!i^?i^

___ vacancies.

[This section Is not repealed by the Act of 1890. As to the omission of the word

"official," see sect. 4 (3) of 1890.]

Beet. 4 (4) of 1890. — If any vacancy ocoors in the office of liquidator of a com- Official
pany, the official receiver shall, by virtue of his office, be the liquidator during the receiver to
vacancy. [Compare sect. 70 (1) and sect. 87 (4) of the Bkcy. Act, 1883.] ^^^^^

Sect. 11 (4) of 1890.— If any . . . liquidator at any time retains for more than Board of
ten days a sum exceeding fifty pounds, or such other amount as the Board of Trade Trade's power
in any particular case authorize him to retain, then, unless he explains the reten- 'oiiu>ve.
tion to the satisfaction of the Board of Trade, he shall pay interest on the amount
so retained in excess at the rate of twenty pounds per centum per annum, and shall
be liable to disaUowanoe of all or such part of his remuneration as to the Board
shall seem just, and to be removed from his office by the Boards and shall be liable to
pay any expenses occasioned by reason of his default. [From Bkcy. Act, 1883,
s. 74 (6), under which it has been held that the Court may commit for dis-
obedience of an order to pay interest. Be Nicholson, 63 L. T. 322. Also, that if
the trustee has been removed interest nevertheless may be charged during the
whole time the money is retained. Be Taium, 6 Mor. 107.]

Seet. SS of 1880.— (1.) Where the liquidator of a company which is being wound Beport on
up by Older of the Court has resigned, or has been removed from his office, the accounts.
Board of Trade shall, on his ap pl icati o n, cause a report of his accounts to be pre-
pared, and, on his complying with all the requirements of the Board, shall take
into consideration the report, and any objection which may be urged by any
creditor, or contributory, or person interested, against the release of the liquidator,
and shall either grant or withhold the release accordingly, subject, nevertheless, to Belease.
an appeal to the High Court.

(4.) Where the liquidator has not previoualy^resigned or been removed, his release
shall operate as a removal of him from office. [From Bkcy. Act, 1883, s. 82 (1), (4)^
See, further, as to TlKT.HAffK, Chap. L.]

B. 68 (7) of 1903.— If a liquidator in a winding-up by the Court shall die, or resign. Proceedings
or be removed, another liquidator may be appointed in his place in the same manner o^^ fresh
as in the case of a first appointment, and the official receiver shall, on the request *PPOiiitni«^*«
of not lees than one-tenth in value of the creditors or contributories, summon
meetings for the purpose of determining whether or not the vacancy shall be filled ;
but none of the provisions of this rule shall apply where the liquidator is released
under sect. 22 of the Act of 1890, in which case the official receiver shall remain
liquidator, [B. 65 of 1890 considerably varied.]

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Failure to
g^ive or keep
up Beourity.

Grounds for

How appli-
cation to
remove made.

Compare Bkoy. Act, 1888, s. 87. This role apparentlj does not applj where an
official reoeiver was originally appointed liquidator, and another official receiver is
appointed in his place.

B. 61 of 1908. — (1.) If a liquidator . . . fails to give the required security
within the time stated for that purpose in the order appointing him, or any
extension thereof, the official receiver shall report such failure to the Gourt, who
shall thereupon rescind the order appointing the liquidator. . . .

(2.) If a liquidator . . . fails to keep up his security, the official receiver
shall report such failure to the Court, who may thereupon remove the liquidator
. . . and make such order as to costs as the Court shall think fit. [Formerly
R. 68 of 1890.]

(3.) Where an order is made under this rule rescinding an order for the appoint-
ment of or removing a liquidator, the Court may direct that another liquidator is to
be appointed, and thereupon the same meetings shall be summoned and the same
proceedings may be taken as in the case of a first appointment of a liquidator.

Besides the grounds for removal specified in the Act and Rules of 1890, there are
other grounds, as shown by the cases decided before 1891 on sect. 93 of 1862.

The words *'on due cause shown'* are not equivalent to *'if the Court shall
think fit.*' Sir John Moore Gold Co,, 12 Ch. Div. 325. As a general rule, "they
point to some unfitness of the person — ^it may be from personal character, or from
his connection with other parties, or from circumstances in which he is mixed up —
some unfitness in the wide sense of the term.'* Per Jessel, M. R., in the case last
mentioned, where the application was under sect. 141, which contains similar words.
He may be removed whenever it is for the interests of the liquidation. Adam
JEyton Sf Co,^ 36 Ch. Div. 299. In Oxford Building 8oc. (49 L. T. 496), where a
liquidator had been appointed by the shareholders, and a supervision order was
subsequently made, Kay, J., expressed an opinion to the effect that if it were
shown that all the creditors desired his removal, and that the company was
insolvent, that would be due cause shown. In AMociaiion of Land Financiers (10
Ch. D. 269), the official liquidator was removed on motion made on behalf of a
Luge majority of the unsecured creditors, and two creditors who were willing to
act gratis were appointed in his place. But this has not been followed ; and in
Civil Service and General Stores^ W. N. (1884) 168, Chitty, J., refused to displace an
experienced official liquidator, against whom no personal objection was raised, in
favour of a large creditor who was wUling to act g^ratis.

llie words of sect. 98 of 1862 " upon due cause shown " also occur in sect. 83 (4)
of the B. A. 1869, which enabled the Court to remove a trustee in bankruptcy.
Under that clause it was held that the words did not mean only conduct amounting
to fraud or dishonesty, but that it was enough to prove conduct — such as vexaticras
obstruction of the realisation of the estate in the interest of the debtor — ^whioh
showed that it was no long^ fit that the trustee should remain a trustee. Ex parU
Netoittf 14 Q. B. Div. 177. And the whole oourse of proceedings must be looked at.
Ex parte Sheard, 16 C. Div. 109.

In bankruptcy the power to remove is now rested in the Board of Trade, subject
to appeal to the High Court, see Bkcy. Act, 1883, s. 86 ; B. A. 1890, s. 19. False
statements as to dates of receipt of money to cover irregrularlties as to furnishing
accounts has been upheld as a good cause for removal. Be Morgan^ 2 Mans. 626.

The application for removal is usually by summons, but occasionally it is made
by motion or petition.

Under the old practice, sometimes a new liquidator was appointed by the order
removing the old one, and sometimes by a subsequent order; but the former
oourse cannot now be followed. See R. 68 (7) of 1903, tupra.

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A oontributory who has not paid a call oaxmot apply for removal of liquidattM*.
Norwich Provident^ W. N. (1879) 216.

The liquidator may appeal from an order of the Court removing him. Adwn Appeal.
Eyton ^ Co.^ ubi supra.

As to when the Court of Appeal will interfere, see Sir John Moore Co.y ubi supra.

As to the liquidator, on being removed, delivering up his books, &c., see B. 168
of 1903, set out in Chap. L.

As to the *' manner directed in the case of a first appointment/' referred to in Calling
R. 68 (7) of 1903, supra, see Chaps. XVU. and XVin. meetings.

As to summoning the meetings, see Chap. XY.

R. 68 (7), supra^ p. 683, probably means that meetings of the creditors and con-
tributories shall be called, held, and conducted exactly in the same manner as the
first meetings of creditors and contributoriee, and that application shall then be ,
made to the Court as in the case of a first appointment.

The new liquidator will have to give security, see Chap. XIX.

Upon the applicon by summons dated, &c. of S., the senior off reor Form 683.
attached to this Ct, and upon hearing the solor for the applicant, the Order for
order to wind up, &c., dated, &c., and the afft, &c., It is ordered that substituted
the publication by advertisement in the form set forth in the schedule J^^^s to
hto of the summons issued in this matter dated, &c. for the removal remove liqui-
of X. from the office of liqr of the above-named coy, and of this order ^*^'*
once in the London Daily Chronicle, and the sending a copy of the sd
summons and a copy of the sd order through the post office prepaid in

a registered envelope addressed to the sd X. at , be deemed good

service of the sd summons on the sd X.


To X., of, &c., the liqr of the above-named coy.

Take notice that on the dOth day of Oct. 1895, a summons was
issued in the matter, &c. [set out fuU title] for an order that you the
sd X. might be removed, &c.. And take notice that by an order dated
the 31st day of Oct. 1895, it was ordered that [recite order ahove^^
And take notice that the Ot. has fixed Monday the 11th day of Nov.

1895, at o'clock in the forenoon, as the time at which you are

to attend at upon such applicon, And that if you do not then

attend either in person or by your solor, such order will be made and
proceedings taken as the Ot may think just and expedient. Bristol
Empire Palace of Varieties (0060 of 1895), Hood, Eeg., 81st Oct.

TTpon the applicon by summons, dated, &c. of D., of , creditors Form 684.

of the above-named coy, and of 8., the senior off recr attached to this Order
Ct, and upon hearing the solor for the applicants for the coy, and the removing
respondent X., the liqr of the above-named coy appearing in person, ^ *^*
and upon reading the order to wind up the sd coy, dated, &c., the

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order dated, &c., appointing tlie sd X. liqr of tlie above-named coy,
the order dated, &c., and the af^ of, &c., [and the sd respt X., the
liqr of the above-named coy, desiring to retire from his office of liqr
as afsd]. It is ordered that the sd X. be and he is hby removed from
the office of liqr of the above-named coy ; And it is further ordered
that the costs of the sd applicon and of the sd order dated, &c. [see
Form 683] be taxed and pd out of the assets of the above-named coy.
Bristol Empire Palace of Varieties (0060 of 1895), Hood, Eeg.,
11th Nov. 1895.

For orders removing official liquidators, and in some cases appointing other
persons in their place, under the old practice, see Moorwood Moor, ^, Co., HalinP,
V.-C, 22nd Nov. 1876. B. 1940; Universal Fire, ^e. Co,, Kay, J., 16th Jnnc,
1883; John Marsland ^ Co., Chitty, J., 16th April, 1883. A. 662; Alexandra
Palace Co., Malins, V.-C, 4th Dec. 1878. A. 2161 ; Briekinalt CoUieriet Co.,
Jessel, M. B., 26 May, 1879. A. 1260.

For order, under B. 68 of 1890 (now B. 61 of 1903), rescinding order appointing
liquidator, see Form 182, p. 264, aupra.

For order appointing official liquidator in place of a bankrupt official liquidator,
and ordering the bankrupt and his trustee in bankruptcy to bring in and pass final
accounts, and to deliver over property to new liquidator, see Autonwtie Block Cb.,
Bacon, V.-C, 17th Deo. 1883. A. 1839.
Oosts. For order directing liquidator to pay out of the company's assets the costs of

a person on whose application a former liquidator was removed, but without
prejudice to company's right to recover the amount from the removed liquidator,
see Commercial Bank, Limtd, Hall, V.-C, 6th May, 1878. A. 2162.

Other orders
for removal.

Form 686. Upon the peton of A. 0., &c., and F. W., &c., and it appearing to
Vesting order! the satisfaction of the Ot that J. W., the late off liqr of the aboTO-
named society, has been removed from being such off liqr, and that
the sd J. W. is out of the jurisdiction of this Ot, and the petrs A. C.
and F. W. have been appointed joint off liqrs in his place, the judge
doth declare that the sd J. W. is a trustee within the meaning of the
Trustee Act of the 10,230/. Ss, Id, New 3/. per dent. Annuities stand-
ing in the books of the bank in the name of the sd J. W. by the
following description: — ** J. W., off liqr of the Mutual Society";
And this Gt doth order that the right to transfer the sd 10,230/. d#. Id,
New 8/. per Gent. Annuities, and to receive the dividends accrued
thereon, do vest in the petrs A. 0. and F. W. as such off liqrs as afsd ;
And it is ordered that the petrs do transfer the sd sum of 10,230/. 3«. Id.
New 3 per Cent. Annuities into their own names, to be held by them
as such off liqrs as afsd ; And costs of petrs of and relating to this
applicon be taxed and pd out of the funds of the society. Mutual
Society y Chitty, J., 7th Apr. 1884. B. 556.

See CapUal Fire Co., 55 L. T. 638.

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Beet. 22 of 1890.^(1.) When the liquidator of a companj whibh is being wound Board of
up by order of the Court has realized all the property of the company, or so much Trade's power
thereof as can, in his opinion, be realized without needlessly protracting* the -giSTT
liquidation, and distributed a final dividend, if any, to the creditors, and adjusted
the rights of the contributories between themselyes, and made a final return, if any,
to the contributories, or has resigfued, or has been removed from his office, the
Board of Trade shall, on his application, cause a report on his accounts to be pre-
pared, and, on his complying with all the requirements of the Board, shall take
into oonsideration the report, and any objection which may be urged by any
creditor, or contributory, or person interested ag^ainst the release of the liquidator,
and shall either grant or withhold the release accordingly, subject nevertheless to
an appeal to the High Court.

(2.) Where the release of a liquidator is withheld the Court may, on ^e appHca- Appeal to
tion of any creditor, or contributory, or person interested, make such order as it Court,
thinks just, charging the liquidator with the consequences of any act or default he
may have done or made contrary to his duty.

(3.) An order of the Board releasing the liquidator shall discharge him from aU Effect of
liabiUtj in respect of any act done or default made by him in the administration of release,
the affairs of the company, or otherwise in relation to his conduct as liquidator, but
any such order may be revoked on proof that it was obtained by fraud or by sup-
pression or concealment of any material fact.

(4.) Where the liquidator has not previously resigned or been removed, his
release shall operate as a removal of him from his office. [And thereupon the
official receiver becomes liquidator. R. 58 (7) of 1903, tupra. Chap. XLTX. The
rule is the same in bankruptcy. £e Leads, (1900) 2 Q. B. 649.]

[The whole of this section is taken from sect. 82 of the Bankruptcy Act, 1883.]

Paragraph 3 of sect. 22 of 1890 is expressed in very wide and general terms. It Effect of
follows the terms of paragraph 3 of sect. 82 of the Bankruptcy Act of 1883, and of sect. 22 of
sect. 63 of the Bankruptcy Act, 1869, except that under the last-named section ^®^"'
fraud is the only g^und for- revocation. Under that section it was held that where
a trustee had obtained his discharge he could not be made liable by the Court of
Bankruptcy in respect of a liability which he had omitted to provide for. Ex parte
Carter, 8 C. Div. 731. It was contended that the trustee had committed a fraud in
making no provision for this liability, but it was held by the Court of Appeal that
his conduct was not fraudulent, and that the dischargee was effective. See also
£x parte Barnard^ 46 L. T. 824, and Soeiete Cockrill, 3 C. Div. 115 ; iZ^ Maiden, 66
L. T. N. S. 708, and Re Chudley, 14 Q. B. D. 402. In the Ust-oited case it was
held that a trustee who had obtained his release under ihe Buikruptcy Act, 1869,
waa not thereby relieved from rendering an account to the Board of Trade for his
receipts and payments as such trustee.

Under sect. 82 of the Bankruptcy Act, 1883, it has been held that '* suppression
or concealment of any material fact," in sub-aect. 3, means only such suppression
or oonoealment as has in it an element of frau4. Re Harrie, (1899) 2 Q. B. 97.

Digitized by




liability to
oreditors and

Deliyeiy up
of books.

Kotioe of
for release*


It may be convenient here also to refer to Coxon y. Gorst, (1891) 2 Ch. 72, in
which it was held that where a company had been wound np under a oompulsoiy
order and dissolyed under sect. Ill of the Companies Act, 1862, it was not com-
petent to a creditor to proceed against the late directors and ofBcial liquidator in
respect of breach of trust committed whilst the company was a gpoing ooncem— -
fraud not being alleged. See also Knowlet y. Seott^ (1891) 1 Ch. 717, in which it
was held by Bomer, J., that a liquidator is not to be considered as trustee for
every creditor or contributory of the company, and accordingly that he cannot be
sued by a creditor or contributory for negligence apart from misfeasance or personal
misconduct. ** All that I hold," said the learned judge, '* is that the liquidator is
not liable to an action for damages for delay in performing his duty when that
delay was not wilful or fraudulent, and in no way arose from nuUa Jidet on hii

In that case, however, the company was still in existence. But in Pulsford v.
Deveniih, (1903) 2 Ch. 625, it was held that a liquidator has a statutory duty under
the Act, and if he commits a breach of this to the prejudice of a creditor he is liable
in an action to compensate such creditor. See supra, pp. 267, 274.

B. 158 of 1903. — ^Upon a liquidator resigning, or being released or removed from
his ofKce, he shall deliver over to the official receiver, or as the case may be, to the
new liquidator, all books kept by him, and all other books, documents, papers and
accounts in his possession relating to the office of liquidator. The release of a
liquidator shall not take effect unless and until he has delivered over to the official
receiver all the books, papers, documents, and accounts which he is by this rule
required to deliver on his release. [Formerly R. 141 of 1890, taken from Bkoy.
Rr. 292 and 310a. As to the lien of the trustee's solicitor, see Ex parte Yaidm,
14 C. Div. 129.]

B. 180 of 1903.— (1.) A liquidator in a winding-up by the Court, before making
application to the Board of Trade for his release, shall give notice of his intention
so to do to all the oreditors who have proved their debts and to all the oontributories,
and shall send with the notice a summary of his receipts and payments as liquidator.
[Formerly R. 148 of 1890, taken from Bkcy. R. 309.]

(2.) When the Board of Trade have granted to a liquidator his release, a notice
of the order granting the release shall be gazetted. The liquidator shall provide
the requisite stamp fee for the Oautte, which he may charge against the company's
assets. [Fonnerly R. 149 of 1890, taken from Bkcy. R. 310.]

Form 686.

Notice to
creditors and
of intention
to apply for
Form 98 of


Take notioe that I, the tmdersigned [off recr and] liqr of the above-
named coy, intend to apply to the Board of Trade for my release, and
further take notice that any objection you may have to the granting
of my release must be notified to the Board of Trade within twenty-
one days of the date hereof.

A summary of my receipts and payments as [off recr and] liqr is
hto annexed.

Dated this day of , 19 — .

G. H. [Off Recr and] Liqr.

To K. L.

Note.— Sect. 22 (3) of the Cos (Winding-Up) Act, 1890, enacts that
[the form sets out the sub'Sectionj which is stated above']'

Digitized by




Form 687.

statement to
notice of
for release.
Form 100 of

Digitized by




Form 688.

postage of
notice of
intention to
apply for

Form 689.

by liquidator
to Board of
Trade for
Form 99 of


I, A. B., of 33, Oarey Street, Lincoln's Inn, London, W.C, Clerk in
the office of the Off Eecr in Cos Liquidation, hereby certify : —

1. That I did on the day of , 19 — , send to all Ihe creditors,

who have proved their debts, and to all the contributories mentd in the
coy's statement of afPaira, a notice of the intention of the off recr to
apply to the Board of Trade for his release as liqr of the aboye-named
coy, together with a statement of his receipts and payments in the'
forms hereunto annexed marked " A " and ** B " resply.

2. That such notices were addressed to the sd creditors resply,
according to the addresses appearing in their respiye proofs.

3. That such notices were addressed to the sd contributories reeply
according to their respive names and addresses appearing in the coy's
statement of affairs.

4. That I sent the sd notices by putting the same into the official
letter bag provided by the Postmaster-General for the office of the off
recr before the hour of half -past five o'clock in the afternoon of the ed

Dated this day of , 19—.

(Signed) A. B.

The above is the form used by the official reoeirer. An affidavit seems to be
necessary in the case of an outside liquidator, which may be easily framed from
Form 399 and the aboye certificate.


I, , the [off recr and] liqr of the above-named ooy, do hereby

report to the Board of Trade as follows : —

1 . That the whole of the ppty of the coy has been realised for the
benefit of the creditors and contributories [and a dividend to the

amount of shillings in the pound has been pd as shown by the

statement hereunto annexed, and a return of in the pound has

been made to the contributories of the coy] ;

[or That so much of the ppty of the coy as can, according to the
joint opinion of myself and the committee of inspection, hereunto
annexed in writing under our hands, be realised without needlessly
protracting the liquidation, has been realised, as shown by the statement

Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 87 of 152)