Charles Mac Naughten Sir Francis Beaufort Palmer.

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

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hereimto annexed, and a dividend to the amount of — ; — shillings has

been paid, together with a return of per share to the contributories

of the company] ; [add, if necessary, ** That the rights of the contribu-
tories between themselves have been adjusted"] ;

2. I therefore request the Board of Trade to cause a report on my
accounts to be prepared, and to grant me a certificate of release.

Dated this day of , 19 — .

[Off Eecr and] Liqr.

See sect. 22 (1) of 1890, supra, p. 687, as to this application, and as to the rsport
on accounts, consideration thereof, and objection of creditors and oontribiit<»ies.



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BELEA8E OF UQUIDATOB.

If s dividend has been paid by oheqnee on the companT'B liqnidation aooonnti the
liquidator, on the expiration of aix months from the date of issue, or on application
for his release, if that event occurs earlier, should return any cheques or postal
orders remaining in hand to the Assistant Secretary, Finance Department, Board of
Trade. B. of T, Beg., January, 1893, No. 10.



{Title.) Form 690.

Whereas E. L. was, on the 24th day of Dec. 1891, appointed liqr of Eeleaseof
the above-named coy, And whereas on the 13th day of July, 1892, the ^ '*
sd E. L. gave notice to the Board of Trade that he had resigned his
office and requested the Board of Trade to cause a report on his account
to be prepared and to grant him a certificate of release.

Now the Board of Trade, having taken into consideration the report
on his acounts, do hby order that the release of the sd E. L., as such
liqr, be, and the same is hby, granted. Dated, &c.
By the Board of Trade,

F. W.,
Duly authorised in that behalf by the
President of the Board of Trade.

As to a document so signed being evidence, see sect. 30 (1) of 1890.
The release does not take effect until the liquidator has delivered up his books
and papers. See B. 158 of 1003, tupra.



This form is supplied by the Board, when the o£E recr is also liqr. Form 691.
The notice is headed ** Notices for London Gazette, Companies Notice (for
(Winding-up) Act, 1890. (9) Notice of release of liqr." v^®^ ^??*j!^ 2^
follows Part 9 of Form 15, supra. Below are the signatures of the liquidatoi



[off recr and] liqr, and the notice is addressed '*To the Inspector- Form 103 (9)
Oeneral in Oos Liquidation, Board of Trade, 1, Horse Quards Avenue, ^ ^^^^'
Whitehall, London, S.W."

The notiee is gazetted by the Board of Trade, the stamp being provided by the
Uqoidator. See B. 180 of 1903, mpra.
As to filing a memorandum of gazetting, see Form 10, tvpnt.



TT :i



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662



WINDmO-UP BY THE CX)UBT. [ChAP, U,



OHAPTEELI.



dissolution, and destruction of books ; restoration of
company's name.



Order to

dissolye

oompany.

Report to
registrar of
joint stock
oompames.

Penalty for
not reporting.



Dissolution of Company.

Beot. Ill of 1868. — When the affairs of the company have been completely womid
up, the Court shall make an order that the company be dissolyed from the date of
such order, and the company shall be dissolyed accordingly.

Beet. 112 of 1868.— Any order so made shall be reported by the official liquidator
to the reg^trar [of joint stock comptmies], who shall make a minnte acoordingly in
his books of the dissolution of the company.



** Completely
wonndrup."



Beet. 113 of 1868. — If the official liqnidator makes default m re porting to the
registrar, in the case of a company being wound up by the Court, the oider that
the company be dissolved, he shall be liable to a penalty not exceeding ftye poondi
for every day during which he is so in default.

The words ** when the affairs of the company have been complete^ wonnd up"
are equivalent to the words of sect. 142. " As soon as €tke affairs of the oompany
BxefuUy wound up " — ^with reference to sect. 142, James, L. J., said : " We moit
put some practical and sensible meaning on the words, and in my opinion thflj
mean * as far as the liquidators can wind them up ' ; that is, where the liquidator
has done all that he can to wind up the company, when he has disposed of the
assets as far as he can realize them, got in the calls as far as he can enforce them,
and paid the debts as far as he is aware of them, and has done all ^at he oaa do in
winding up the affairs, so that he has completed his business so far as he can, and
\b functus officio^ London and Caledonian^ ^. Co., 11 C. Div. 140, 143.
New praotioe. Sects. 111—118 of 1862 still remain unrepealed, but no machinery, in the phwa
of the Rules of 1862 (Rr. 65—67), which are annulled by R. 203 of 1903, has been
provided by the Act of 1890, or the rules under it.

Between 1862 and 31st Deoember, -1890, it was the ordinary practice in doe
course to obtain a dissolution order, and sect. Ill of 1862 is peremptory as to an
order of dissolution being made, but now such orders are less common.

It does not follow, because the time has arrived for a liquidator to apply for his
release, that a dissolution order can be obtained. But when the liquidator is in a
position to make out a statement (to accompany notice of application for release,
see Form 617) which will show at the foot that the '' assets not yet realized, includ-
ing calls," are nt7, it is the proper time to make the application.

This statement seems to contain all particulars stated in the report of the liqui«
dator required under the old practice, and might well be substitnted lor it. The
report was frequently verified by an affidavit of ^e liquidator, nnd the applioa-



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DISSOLUTION AND DESTBUCTION OF BOOKS. 693

tion WM Bupported hy s oerdfioate of the chief olerk that the liqtiidator had passed
Ills final aoooimt, that the balance, if any, due from him had been paid, and that
the afbuis of the company had been completely wound np. (See Form 65 of 1862.)

The Board of Trade seems to be now the proper authority to grant some such
certificate ; and after (a) it has caused a report to be made on the liquidator's
aocoimty and (b) he has complied with all the requirements of the Board, and (o) the
Board has considered such report and any objections of creditors and others (see
sect. 22 (1) of 1890), the Board is quite in a position to give such a certificate as
will satisfy the Court and probably render unnecessary an affidavit of yerification
by the liquidator.

If aa application is made, it should be in chambers by summons. Rr. 3, 6, of
April, 1892.

In some cases orders haye been made in the winding-up that no order for
dissolatian was to be made without notice to particular persons, e,ff., lessors.
Sartor Qramte Co., 1 Ch. 77.



Upon the applioon of A. B., of, &o., the [oE reor and] liqr of the Form 69S.
above-named coy, and upon reading [^probabfy the certificate of the Order for
Board of Trade, dated, &o., whereby it appears that the affairs of the dissolution of
sd coy have been completely wound up, and that there is not anything deSIJiStionof
due either to or from the applicant on the balance of his final account its books.
as sueh [off reor and] liqr as a&d]. It is ordered that the sd coy be

dissolved as from the Dec. 19—. And it is ordered that the

books and papers of the coy other than the file of proceedings in the
winding-up of the sd coy be retained by the applicant for the space of

year[8] from the date hereof, and then destroyed by him [^some-

times the order continues, by fire, or by cutting or tearing the same into
fragments so as to render them useless as means of information].

For other forms, see Forms 850, 851, 852.

Independently of sect. 22 of 1890 (as to which see Chap. L.), as regards
sect. 143, which proyides for a company in yoluntary liquidation being deemed to
be dissolyed on the expiration of three months from the reg^tration of tbo return
of the final meeting under sect. 142, Lord RomiUy, M. B., said : '' It is unnocessary
that I should go into the question whether the 143rd section of the statute deprives
the Qourt of its jurisdiction over a company which, under the proyitdons of that
section, is deemed to be dissolved. I am inclined to think that it was not the
intention of the Legislature, by any proyision of this statute — which was intended
to proyide a lees ezpensiye and more speedy and direct method of winding up
companies — ^to fetter the jurisdiction of the Court, and compel parties to resort to
more circuitous and expensive remedies.'' Crookhavcn Mining Co., 3 £q. 69, 73.
In that case an order in the winding-up was made after the three months had
expired, but it was made upon an application made before the expiration of the
time, and North, J., following the decision (not the dictum), has recently held that
the Court has jurisdiction against a company in a proceeding commenced after the
registration but before the expiration of the three months. Whiteley Exerciser y.
Oamage, (1898) 2 Ch. 406 ; and see Wetthoume Orove Drapery Co., 39 L. T. 30
Bacon, V.-C), to the same effect. But if the aboye dictum of Lord Bomilly meant
that after dissolution proceedings against the company for or in a winding-up could



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694 WINDING-UP BY THE COUBT. [ChAP, U.

be oommenoed, it is no longer to be relied on. There was a stomgiy' OXpW B od
opinion of tbe Conrt of Appeal in 1878 that there was no jtuisdiotion to wind up a
company whioh had been dissolyed — ^in that case nnder sect. HS—tmleas the diesc-
Intion could be impeached on the ground of fraud. Finto Siher Mmmg Cb., 8 C.
DiT. 273.

The opfaiion was not necessary to the decision in that case, which was, that ^
applicants were estopped by what had taken place ; but the point was aotoally
decided in accordance with tiiat opinion in London ^ CaUdonian, ^. 6b., 11 G. D.
140, where a winding-up petition was dismissed, and in We$tb<mme Orov0 Draptrf
Cfo., 39 L. T. 30, where a smnmons against the company and its liqnidAtors was
dismissed. And Ghitty, J., has pointed out that the dictnm in Orookhavm Muring
Co, is contrary to the later decisions. Ooxon v. Gorat, (1891) 2 Oh. 73, 75.

The effect of sect. Ill was considered in Coxon y. Gorat, (1891) 2 Oh. 79, where it
was held by Chitty, J., that the decisions in Finto Silver Mining Co, and London ^
Caledonian Co, ''apply in full force to a dissolution by order of the Oonrt in a
winding-up by the Court," and that the plaintiff who did not allege fraud could
not have proceeded by petition for a discharge of the order of dissolution, and iox
a continuance of the winding-up, and also that he was not at liberty to proceed by
an action against directors for improper payment of dividends, tlie order far disso-
lution not being impeached and no fraud being alleged.

North, J., in Whitelej/ Exereiter y. Oamage^ tupra^ after refetring to the yiew
taken (not the dictum expressed) by Lord Bomilly in Crookhaven Mining Co., whoe
the proceeding was commenced before the expiration of the three months mentioned
in sect. 143, said : <' It is said that that view has been impeached in some way by
some subsequent cases which have been cited to me '* — ^namely, Finto Sik»r Mmung
Co, and London i Caledonian Co,, supra — ** but it does not seen to me that il is
touched by either of the oases which were refected to. On the contrary, in one
of those oases it is clearly recognized that there may be rights existing against the
liquidator in respect of what he has done in the course of his employment in respect
of which proceedings could not be taken against the company itself by reason of its
haying been dissolyed.''

Apparently, North, J., was referring to a passage in the judgment of Jamee, L. J.,
in London ^ Caledonian Co,, which is as follows: — *' If there had been any miscar-
riage on the part of the liquidator— if he had knowingly and wilfully left unpaid a
debt of whidi he had notice— I am not prepared to say that the liquidator is not
personally answerable to the creditor who has been unpaid, because the liquidator
has yiolated a plain statutory duty to pay the debts pari paetu out of the assets of
the company as they came to his hands*' (Il C. D. 144) ; but as Bomer, J.,
pointed out in Knowlea y. Scott, (1891) 1 Oh. 717, 723, the Lord Justice " oonfined
his observations to a case where the liquidator had acted ' knowingly and wilfnlly,'
or to a case where he had been guilty of bad faith or gross or personal misoonduot."
As to this, see FuXrfwd y. Dwenith, (1903) 2 Oh. 625. In that case the com-
pany was wound up voluntarily and dissolved, the liquidator had divided the
assets among the shareholders and had left the creditors unpaid, and it was held
that he was liable to the plaintiff (an unpaid creditor) for this breach of his statu-
tory duty. See, as to the effect of sect. 143 on an action, SaUon v. New ^oetton
Cycle Co, (2), (1900) 1 Oh. 43. In that case a solicitor was authorised to defend an
action brought against a company. The trial was delayed, but on the day of tiie
trial the solicitor knew that the £nal meeting of the company, imder sect. 142 of
the Companies Act, 1862, had been held, and took no steps to see whether it had
been dissolved. At that time the three months had elapsed, and the company was
in fact dissolved, but neither the solicitor nor the plaintiff knew till after the
trial that the company had been dissolved. Stirling, J., held— (1) (distinguishing



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DISSOLUTION AND DESTRUCTION OP BOOKS. 695

Whiteley Exereisefy Zimtd, y. Gamage, (1898) 2 Oh. 406) that the judgment waa
inyalid against the oompany for want of jurisdiction ; (2) that the solicitor haying
originallj authority to represent the company was not liable for acting on that
authority after it had been reyoked by the dissolution of the company until he
knew or, by the exercise of due diligence, might haye known of the dissolution ;

(3) that on the day of the trial the solicitor did not use due diligence in ascertaining
whether or not the company had been dissolved, and that he ought to pay the
plaintifTs costs of the action after that date as between solicitor and client;

(4) that the principle of Smout y. Ilbery (1842), 10 M. & W. 1, applies to a solicitor
representing a party in an action, and it applies to a reyocation of authority by the
dissolution of a company as well as by the death of an indiyidual.

Where a company is about to be dissolyed, it is yery commonly found that certain
creditors or contributories, in whose favour dividends haye been declared, haye not
claimed the same. The right of such persons was not, eyen under the old practice,
affected by their non-claim, so as to enable the Court to diyide the fund among
the other persons interested, or otherwise to deal with the same in derogation of
the rights conferred by the order declaring the dividend. Ashley y. Ashley ^ 4 C. Diy.
767, a case of administration of a deceased debtor's estate.

And see now, as to unclaimed dividends and undistributed assets. Chap. XXTV.

Where a corporation proved for its debt in the bankruptcy of a firm, and was
then dissolyed by an order of the Court under the Companies Acts, and subsequently
property of the bankrupt was recovered by the official reoeiyer in bankruptcy, and
the proceeds were held by him as trustee in the bankruptcy, Wright, J., held that
the proof of the corporation ought not to be ezpung^ed on the motion of the other
creditors, so as to benefit them, but that on the dissolution of the corporation its
proportion of the proceeds had passed to the Crown as h<md vaeantia. Se Eigginton
and Dean, (1899) 1 Q. B. 326. See Fart I., p. 90.

See also, as to hand vacantia^ Cunnaek y. Edwards, (1896) 2 Ch. 679 ; Printers and
Transferers, fo, Soe., (1899) 2 Ch. 184 ; Brown y. Dale, 9 Ch. D. 78 ; i20 B<md,
TisnesY. AtL-Oen,, (1901) 1 Ch. 16 ; Ftyee Jones y. WUliams, (1902) 2 Ch. 617.



Destmction of Books, ice.

ieet. 156 of 1868.— Where any company has been wound up under this Act and Court mav
is about to be dissolyed, the books, accounts, and documents of the company and of ?^^®5 ^v2
the liquidators may be disposed of in the following way ; that is to say, where the cQgUoged qS
company has been wound up by or subject to the supervision of the Court, in such
way as the Court directs, and where the company has been wound up yoluntarily,
in such way as the company by an extraordinary resolution directs ; but after the
lapse of flye years from the date of such dissolution, no responsibility shall rest on
the oompany, or the liquidators, or any one to whom the custody of such books,
aocoonts, and documents has been committed, by reason that the same, or any of
them, cannot be made forthcoming to any party or parties claiming to be interested
therein*

B. 168 (2) of 1903.— The Board of Trade may, at any time during the progress of
the liquidation of a company, on the application of the liquidator or the offldal
reoeiyer, direct that such of the books, papers, and documents of the company or of
the liquidator as are no longer required for the purpose of the liquidation, may be
sold, destroyed, or otherwise disposed of. [New.]

The documents (other than tiie file of proceedings) are now simply directed to
be destroyed. See Form 698.



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Bankers'
books.



WJNDING-UP BY THE COUET. [ChAP. LI.



It should be borne in mind that 45 & 46 Yiot. c. 72, s. 11, extends the Bankers'
Books Evidence Act, 1879, to any company carrying on the business of bankers to
which the Companies Acts, 1862 to 1880, are applicable, and which have furnished
to the Registrar of Joint Stock Companies the Ust and summarj required by the
Act of 1862, with a statement of the place where it carries on business. The Court
ought, in the interests of the public, to delay as long as possible the destruction of
the books of such a company.

As to the practice (in the case of yoluntary liquidations, under or not under the
supervision of the Court), eeepost, Sections II. and III.



Order to
destroy
books, &c,



Form 693. TJpoii tlie applicon of the o£E recr [and liqr] of the aboye-named
coy by summons dated, &c., and upon hearing the applicant in person,
and upon reading the order to wind up the sd coy dated, &c., and the
order of the Board of Trade dated, &o., whereby it appears that the
affairs of the sd coy have been completely wound up. It is ordered
that the books, papers, and documents of the above-named coy, other
than the file of proceedings in the winding-up of the sd coy, be
destroyed. Common Petroleum Engine Co., Hood, Reg., 2nd Dec.
1898; Brighton Alhamhra, Hood, Beg., 28th April, 1899, and many
others.



Bestoration of Company^s Name.

Where s company's name has been struck off the register of joint stock companies
by the registrar, under sect. 7 of the Companies Act, 1880, as amended by sect. 26
of the Companies Act, 1900 (respectively set out in full in Appendix A.)i after due
publication in the Gnzette, ** the company whose name is so struck off Will be
dissolved " although there is no winding-up, but an order may be made restoring
the company's name to the register.

Having regard to Ocean Queen Steamthip Co.^ (1893) 2 Ch. 666, and Mining Shnrtt
Investment Co,^ ib. 660, and to sect. 2 of the Companies (Winding-up) Act, 1890,
and the orders of the Lord Chancellor made under that section, it is dear that an
order for restoration of the company's name may be made by one of the winding-up
judges. When Yaughan Williams, J., occupied that position snob orders were
made by Bomer, J., when sitting for him and exercising the jurisdiction. See
Form 695. And an order was made by Byrne, J., sitting for Wright, J., in Forti^
Anglican Churchy ^. Atsoeiaiion (00190 of 1898), June 29th, 1898. See Form 696.

North, J., however, held that, although he was not the judge to whom winding-
up had been assigned, he had jurisdiction under the section to revive {Citjf Land*
Investment Corporation^ W. N. (1897) 162), but other judges who had not winding-
up jurisdiction have since made orders under the Act of 1880. (Chaco (PMrggutg)
Zand Co,, W. N. (1901) 124.)

For cases in which orders were made under this section before the Act of 1890,
see Financial Corporation, 27 8. J. 199 ; Estates Investment Co., 27 S. J. 686.

Before the amendment of the Act of 1880, it was held that a creditor was not a
person *' aggrieved " within sub- sect. 6 of the Act of 1880, but that the liabilities
mentioned in the clause could only be enforced in a winding-up, and that a creditor
could obtain s winding*up order without getting the name restored. Angh^
American, %o, Co,, (1898) 1 Ch. 100. But this has been altered 1^ the Act of 1900,



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RESTORATION OF COMPANY^S NAME. 697

enabling a creditor to apply for restoration, as well as the company or any member
thereof, and apparently neither the company, nor a member, nor a creditor can
obtain a winding-up order without first restoring the company's name.

For form of petition to restore, see Part I. 8th ed. 1184 ; but the application may
be made by originating summons.

A petition before a winding-up judge is properly intituled ** In the Matter of
the Cos Acts, 1862 to 1900.*' Johannesburg Mining and General Syndicate^ W. N.
(1901) 46.

The liquidator of a company in winding-up cannot apply in his own name, but
must join the company as a petitioner.



Upon the peton of coy, &c., Order that coy's name be restored to the Form 694.
register of joint stock cos, and that this coy be deemed to have con- orderto
tinned in existence as if its name had never been struck off. And restore corn-
order that notice of this order be advertised once in the London ^reiristOT"^
Gazette. And order that off liqr pay the registrar of joint stock cos under Act of
his costs of the applicon, to be taxed. And order costs of petrs, ^^^^'
inclading costs paid to registrar, to be tcixed and paid out of coy's
assets. Estates Investment Co., Chitty, J., 23rd June, 1883.



llntitule " In the matter of the Cos Acts, 1862 to 1900," and in the Porm 696.
matter of the coyJ] Another.

Upon the applicon of W., a contributory of the above-named coy,
by originating summons dated, &c., and upon hearing the solors for
the applicants for the sd coy, and for the registrar of joint stock cos,
and upon reading [affts'], and the above-named coy by its solors
undertaking forthwith to file with the registrar of joint stock cos the
annual returns now in arrear, and also to give notice of the registered
office of the coy. And the above-named coy by their solors consenting
to this order. It is ordered that the name of the above-named B. Coy,
limtd, be restored to the register of joint stock cos. And pursuant to
the Cos Act, 1880, the sd B. Coy, Limtd, is deemed to have continued in
existence as if its name had never been struck off. And it is ordered
that the registrar of joint stock cos do advertise this order in his official
name in the London Gazette, And it is ordered that the above-named
coy do pay to the registrar of joint stock cos his costs of this applicon
agreed at 1/. 1*., and that the applicants' costs of this applicon be
taxed in case the parties differ, and pd by the above-named coy.
Balmoral Estate {Algoa Bay) Co. (00140 of 1896), Eomer, J., for
Vaughan Williams, J., 4th July, 1896. And see another order by
Eomer, J., for Vaughan Williams, J., in Anglican Church Magazine
Co., Dec. 1896.



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698 WINDING-UP BY THE COURT. [ChAP. U.

Form 696. Upon tlie peton of H., of &c. [and others'], contributoriee of the
Another. above-named coy and members of its council, on the &c., preferred imto
this Ct, and upon hearing counsel for the petrs for the above-named
coy, and for the registrar of joint stock cos, and upon reading the
sd peton and the afft of, &c., and the exhibits therein, and the above-
named coy by their counsel undertaking to comply with sect. 45 of the
Cos Act, 1862, by sending forthwith to the registrar of joint stock
cos a copy of the register of the sd coy containing the names and
addresses and the occupations of its directors or managers, and also
showing therein any change which has from time to time taken place
in such directors or managers since the incorporation of the sd coy
down to the present time, and also further undertaking to comply with
sect. 40 of the sd Act, It is ordered that the name of the sd F. &c
Asson, limtd, be restored to the register of joint stock cos ; and pur-
suant, &c. [as above]. And it is ordered [to advertise as above]. And
it is ordered that the petrs, the sd &c., do pay to the registrar of joint



Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 88 of 152)