Charles Mac Naughten Sir Francis Beaufort Palmer.

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

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the sd notice of motion in the London Gazette, dated &c. and the afft
of &c., and the parties appearing herein consenting to S. being the
person to be appointed as hnftr directed, It is ordered that 8., one of
the liqrs of the above-named coy, and one of the respts named in the
sd notice of motion, and a debenture-holder of the sd coy, be appointed
to represent on the hearing of the sd motion all the debenture-holders
of the coy who have assented to the agreemt for sale and reconstructioD,
dated &c., referred to in the sd notice of motion, and to defend the sd
motion on their behalf. Metal Reduction Syndicate, Limtd,^ 00173 of
1892. Eeg., 2nd Dec. 1892.



Form 718.

Order for
oross-exami-
nation on
affidavits
before



Upon the applicon of L. and W., two of the contributories of the
above-named coy, by summons dated, &c., and upon hearing the solors
for the applicants and for E., the liqr in the voluntary winding-up of
the above-named coy, and upon reading the originating summons
issued in this matter by said E. on, &c.. Order that the applicants be
at liberty to cross-examine E. [viz,, the liqr^, of &c. upon the two
several affts made by him in the matter of, &c., and resply filed, &c.,
£., of &c., upon the a£Et made by him in the same matter and filed, &c,
and H. of, &c., upon the afft, &c., the sd E. having giyen notice
to the applicants to read the sd afiN;s upon the hearing of the sd
originating, &c. And it is ordered that such cross-examination he
taken before one of the examiners of the Ct. And it is ordered that
the sd E., B., and H. resply attend for cross-examination before the
sd examiner at such time and place as the sd examiner may appoint,
And that the sd E. shall not be at liberty to use or read any such afft,
the deponent to which shall not attend as afsd, as evidence on the
hearing of the sd originating summons.

. The above form is taken in sabstanoe from Mtx%C€m Tobacco Flantatiom (00224 of
1896), Vaughan Williams, J., at Chambers, 18th Deo. 1895.



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. EVIDENCfE AND ORDER. 749

Upon the applicon by stimmons, dated &c., of S., the liqr in the Form 719.
voluntary mnding-up of the above-named coy, and upon hearing &c., OrdOTfor
and upon reading the afPts of &o. Order that the applicant be at oross-exami-
liberty to cross-examine A. and W. upon their sd afEts resply filed in ^^^^t's
this matter on &c., and that the respt be at liberty to cross-examine TiritDesses and
the sd S. upon his afft filed in this matter on &c., and that such o« applicant in
' J.' -» 1 . r>, -» 1 .., Open Court on

cross-exammation be taken m open Ct on the hearing of the summons hearing of

issued herein dated &c., And it is ordered that unless the sd A. ^^Mnons.
and W. appear for the purpose of such cross-examination, the sd &c.
shall not be at liberty to read or use the afft deposed to by the de-
ponent not so appearing as evidence in this matter without the special
leave of the Ot. Anglo- Continental Corp, of Western Australia^ 00153
of 1898. Hood, Eeg., Nov. 4, 1898.



Upon the applioon of K., of, &o., the liqr of the ahove-named coy, bj smnmona Form 720.
dated, &c., and upon hearing, &o., and reading the originating sommons issued in ^r~^ I
this matter dated, &c., the London Gazette dated, &c., the two several affts, &o., It cross-exami-
is ordered that C. and S. do resplj attend before the Regr (Ck)s Winding-up) at the nation and for

Bankruptcy Buildings, Carey Street, London, on day, the day of , discovery of

1893, at &c., for the purpose of being resplj cross-examined on their sd afiPts resply ^^^^i^^^™*
filed in these matters and hnbefore mentd. And it is further ordered (bj consent)
that such cross-examination shall be taken by a shorthand writer, and that the
costs thof ^hall be included in the costs of this matter. And it is further ordered
that the sd respt C. do produce the sd S. for cross-examination before the sd Begr
accordingly. And it is further ordered that unless the sd C. attend for cross-
examination as afsd, and unless the sd C. be produced for cross-examination as
afsd, the sd respt 0. shall not be at liberty to read or use the sd affts as
eridence in these matters without the special leave of the Court. And it is further
ordered that the respt C. do, within seven days after the service of this order,
make and file a full and sufficient aSt stating whether he has or has had in his
possession or power any and (if any) what documents relating to the matters in
question the subject of the sd originating summons hnbfore mentd, and accounting
for the same. [Order for production of doeumentt, and liberty to inspect^ perus$ and
copy,"] And it is further ordered that the sd respt C. do produce the same upon
any examination of witnesses in these matters, and at the hearing of the sd
originating summons, as the applicant shall require. And the applicant is to be
at Uberty to make such further applicon as to all or any of the documents mentd
in such afft as he shall be advised. And it is further ordered that the time within
which the applicant file his evidence in reply be extended imtil fourteen days after
the cross-examination hinbfore mentd shall have taken place and the sd afft of
documents shall have been filed. And it is further ordered that the originating
summons herein shall not be in the judge's court list for hearing until seven days
after completion of the applicant's evidence in reply. Governor f Co. of Antieoeti^
00147 of 1893. Reg., 8th Feb., 1893.

Stay 6f Winding-np.

The Court has jurisdiction under ss. 89, 138, to stay the winding-up and thu0
allow the company to resume business, and many orders have been made accord-



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750 VOLUNTAJtY WINDING-UP.

inglj. See Sonth BarruU Co., 8 Eq. 688 ; J2# Titian Co., 86 W. B. 347 ; JBU CkifwtU,
i T. L. B. 308. For form of petition under Order of Not. 1862, see Part L, 8th ed.,
p. 1181 ; and for order to stay, ibid, p. 1183, and Form 721, it^fra; and for order to
stay made on an originating summons in Yoluntary winding-up, see Conmnay |f.
Co., 0215 of 1893. Reg., Ist Aug. 1893. The form of petition referred to win
form a useful basis for an affidavit in support of an application to stay, whidi
should now be made by originating summons. See lupro, p. 742.



Form 721. Upon motion on the , and on this day made nnto this Ct by

Order to stay counsel on behalf of T. and P., the liqrs and also contributories of the
I2!l^!l^« above-named coy, and upon reading the orders dated resply, &c, the
•,« "*"■"" joint a£Et of the sd T. and P. filed, &c., The Ct doth order that all
further proceedings in the voluntary winding-up of the above-named
coy be stayed. Oreat Southern of Spain Rail. Co. (00250 of 1894),
Eomer, J., for Yaughan Williams, J., 15th June, 1896. See also order
in Turner Pneumatic Tyre Co., Yaughan Williams, J., 18th July, 1896.
And see orders in Chamber Colliery Co., Cozens-Hardy, J., 26th April,
1900; and Aubrey Seaman Sf Co. (00410 of 1900), Hood, Begr.,
20th Dec. 1900.



winding-up^



Supenrision Order.

Occasionally it may be desirable for a liquidator to petition, or to obtain some
friendly creditor to petition, for a supervision order. In the fonner case tiie
petition will be in the name of the company, and the petition need not state that
the company is applying by its liquidator or join him as a co-petitioner or
respondent. Caledonian Mineral Oil Co., Yaughan Williams, J., 24th March, 1897.
The practice down to and including the making of the order is the same as that in
respect of proceeding^ for a oompnlsory order. See Section I., Ohape. I. to DL
As to the form of order and subsequent proceedings, see Section HE. Such an
order tends to prevent a subsequent compulsory order being made, but oreditocB
have now the right without it to apply in the liquidation for directions to the
liquidator. See sect. 26 of 1900.

As to liquidator petitioning for a supervision order in case of creditorB threatening
proceedings, see Zoodone Co., 68 L. J. Ch. 466.

It must be remembered that, if a supervision order is made on a oreditor's
petition, although the previously incurred oosts of the liquidator are payable in
priority to those of the petitioner in obtaining the supervision order, the last named
costs have priority over the subsequently incurred oosts of the liquidator. New
York Exchange Co., (1893) 1 Ch. 371.

A creditor cannot obtain a supervision order unless he possesses all the qaalifiea-
tions required of a creditor petitioning for a oompnlsory order. Bemk rf Smtk
Australia (1), (1894) 3 Ch. 722.



Inspection of Books.

As to the books being ^denoe, see sect. 164 of 1862, supra.
"■ In a voluntary winding-up a oontributory is entitled to lee that the list ol



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INSPECTION OP BOOKS. 761

QOntribatorieB has been righilj settled, and .f6r that purpose to inspeot by- bis
solicitor and an accountant the books and documents of the company at all reason^
able times ux>on giving reasonable notice, but before doing so he must pay the
amount of his calls into Court. London Bank of Scotland, W. N. (1867) 114.

The summons is under sects. 138 and 166 of 1862. Ibid, And the application
must be made with a view to the more beneficial winding-up of the company , and
not for a collateral object, e.g., obtaining discovery to enable individual share-
holders to bring actions against the directors or promoters. Iforth Brazilian Sugar
Factories, 37 C. D. 83.

But the right of a member of the outside public to inspeot, under sect. 32 of the
Act, disappears on a voluntary winding-up commencing {Kent Coalfields Syndicate,
(1898) 1 Q. B. 754), and he cannot obtain an order under sect. 166, which is
confined to creditors and contributories. Creditors can obtain inspection, as they
have now a loeits standi to apply under sect. 138. See sect. 26 of 1900. And see
Sect. I., Chap. XII.



Upon the applicon of L., of , a contributory of coy, and upon Form 722.

heeuing the solors for the applicant and for A., the liqr of ed coy, Order for
and upon reading' the London Gazette dated 13th Sept. 1878, con- inspection in
toining an advertisement of the resolution to wind up the sd coy ^^^^^jip.
voluntarily, the afft of P., filed, &c., Order that the sd A. do, within
seven days from the date of the service of this order, produce for the
inspection of the sd L., his accountants, solors and agents, at the

office of the sd A., situate at , or elsewhere, all books, papers,

and other documents of the sd coy in his possession or power as such
liqr as afsd, except business books, after the sale of the sd assets to S.
And order that the sd L. and his accountants, solors and agents, shall
be at liberty to take copies of any of the sd books, &c., and extracts
therefrom at the expense of the applicant. Silber Light Co,^ Malins,
V.-O., 13th Dec. 1878. B. 2247.



Upon the applicon of A., the person by whom the originating Form 723.
summons herein was issued, and upon hearing the solors for the Orderfor
applicant and for 8., the voluntary liqr of the above-named coy, and production
upon reading the sd originating summons and the aflFt of, &c., It is ^docra^te^
ordered that the sd S., the voluntary liqr of the coy, do at all reason- in possession
able times, upon reasonable notice, produce at his office, situate at, ^ '*
&c, the documents in the schedule at the foot hereof, admitted by the
sd 8. to be in his possession or power. And the applicant, his solor
and agents, are to be at liberty to inspect and peruse the documents
BO produced, and to take copies and extracts therefrom as the appli-
cants shall be advised at their expense. And it is ordered that the sd
8. do produce the same documents upon any examination of witnesses
in this matter, and at the trial thof, as the applicants shall require.



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762



VOLUNTARY WINDING-UP.



Ardleigh Bread Co., (1891) A. 187, Stirling, J., lOth March, 1891;
A. 293.



How posses*
Bioa taken.



Use of official

receiver's

form.

Books, &0.
subject to
lien.



Books exempt
from lien.



Testing lien.



Order against
o&oerd, &o.



Leaseholds.



Possession of Books and Assets.

. The liquidator shonld at once take possession of the books, deods, and docnmentB
of the company ; and ascertain bj inquiry the whereabouts of any which are
missing, and apply for the deliyery thereof. He should also with all conYenient
speed obtain possession of the assets of the company,— ^.y., of land, buildings,
stock-in-trade, rolling stock, plant, machinery, bonds, and securities, — so far as
practicable or expedient, bearing in mind that there are some assets of which
physical possession cannot be obtained : e,g,, book debts owing to the company
(notice, however, of the winding-up should be given to the debtors) ; property of
the company in possession of mortgagees or a receiver (but notice of the liquida-
tion should be given to the mortgagees or receiver).

Some of the forms of notice in use by the official receiver, when acting as provi-
sional liquidator, after a winding-up order, may be adopted, with the necessary
variations.

Where a solicitor or other person is in possession of books or documents, and
claims a lien or charge thereon for money due, the validity of the lien or charge
should at once be examined into, and if it appears that the lien or charge is valid
and effective, and the books or documents are wanted, an arrangement should be
Inade to obtain delivery on some reasonable terms — e,g,y that the amount of the hen
or charge shall be paid off out of the first available assets coming into the hands of
the liquidator. The liquidator may, however, consider it expedient to raise the
requisite funds and discharge the lien. If the lien is by a solicitor, for a bill of
costs, he should be required to send in such bill, and it may be expedient to have it
taxed, and in some cases it may be desirable to obtain delivery before taxation.
This can generally be obtained if the liquidator is prepared to pay the amount
claimed into Court. As to the solicitor not being allowed to refuse production so
as to prejudice the rights of third persons, see Re Hawkety (1898) 2 Gh. 1.

There are some books and documents upon which the company oannot give a lien
or charg^e — e^g.y the register of members, the register of mortgages, and any docu-
ments which the regulations expressly provide are to be kept at the office of the
company {Capital Fire, 24 C. Div. 408 ; Anglo- MaUe$ey 33 W. K. 652 ; see Section I.,
Chap. XXVII.) ; where a lien is claimed on such books tho liquidator should press
for delivery.

• Where the lien or charge daimed appears to be invalid or questionable, it will be
for the liquidator to take steps to test the right claimed. Sometimes it may be wise
to offer to pay money to a joint account pending the adjudication of the dispute,
and to ask the person who claims the lien or charge to hand over the documents or
property on that footing.

Under sect. 138 of 1862, where the books or assets are in the possession of a con-
ttibutory trustee, receiver, banker, or agent or officer of the company, the liqui-
dator may apply to the Court for an order, under sect. 100 of 1862, to deliver up
the same. See Forms 732, 733.
, As to sect 100, see Section L, Chap. XXVIL As to sect. 138, see mpro.

When the company holds leaseholds and is insolvent, and its interest in the lease-
holds is worthless, by reason of their being held at a very high rent, or being subject
to onerous covenants or heavy mortgages, there is danger in taking possessioa,
because the landlord may become entitled to daim payment in full for rent aocnied
during the liquidation, wlulst the liquidator may derive little or no benefit iroa



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KEMUNERATION OP LIQUIDATORS. 763

keeping <m ihe premisee. Whereas, if the liquidator does not take possession and
does not keep on the premises for the porposes of the Uquidation, the landlord can
odIj proye and take his dividend pari passu with other creditors. If the company's
assets are soffioient to pay the costs of winding-np and all the creditors, and to
leave something for the shareholders — ^then the shareholders can get nothing until
the landlords are properly provided for. See further, Section I., Qiap. XXXV.

A voluntary liquidation, even for the purposes of reconstruction, and although
the company is solvent, may give the lessor power to re-enter. JBorsey Estate, Zd.
V. Steiger, (1899) 2 Q. B. 79, which also see as to the notice of forfeiture required.
See also Ewart v. Fryer, (1901) 1 Oh. 499.



Kemimeration of liquidators.

Bj sect. 133 (3) of 1862, *< the company in general meeting may fix the remu*
neration to he paid to" the liquidator or liquidators. And hy sect. 144 the
remuneration is included among the oosts, &c., " payahle out of the assets of the
company in priority to all other daims." Sometimes the remuneration is fixed
at the meeting at which the liquidator is appointed ; and there are advantages in
fixing the remuneration upon the appointment of the liquidators, hecause their
rights are thereby clearly determined ; but it must be borne in mind that if a high
rate is fixed, as in the. case of an insolvent company, creditors will have cause to
oomplain. Examples of resolutions so passed are given below. More commonly
nothing is said about remuneration at the meeting at which the liquidator is
appointed. The matter is left open, and later on the remuneration is fixed by a
general meeting or by the Court, on the application of the liquidator or some other
party interested. Not uncommonly the liquidator takes such remuneration as he
considers proper, and then at the final meeting the accounts are passed including
the appropriation of this remuneration.

Where an application to the Court is made for the purpose of fixing the remunera-
tion, the Court considers the droumstanoes of a particular case and determines what,
in those circumstances, is a fair remuneration to pay. Amalgamated SyndicatSy (1901)
2 Ch. 181. The scale adopted by the chancery judges and sanctioned by the Lord
Chancellor in 1868, does not apply; and in the case last mentioned the Court
refused to sanction an alleg^ed practice of accountants to charge for all letters
written irrespective of their character, as having taken half-an-hour of the prin-
cipal's time. Where the company is insolvent there is an obvious advantage in
g^etting the Court to fix the remuneration, for thereby all questions as to the
I»ropriety of the amount are avoided. The jurisdiction of the Court to fix the
amount is given by the joint operations of sects. 93 and 138 of 1862. Where
the remuneration of a liquidator has been fixed by a general meeting the Court has
power to increase that remimeration in a proper case. This power was exercised by
Chitty, J., in Northern Counties Bank, 15th April, 1883, where a supervision order
had been made, and there seems no reason to doubt that the same jurisdiction exists
in a voluntary winding-up. Occasionally the Court has ordered the convention of a
meeting of creditors to consider the remuneration of the liquidator. See Form 806.
Looking to the concluding words of sect. 93 of 1862, there can be no question that
the Court can, under this section, in conjunction with sect. 138 of 1862, determine
the proportions in which the remuneration assigned shall be distributed between
two or more liquidators. No doubt, in Langham Hotel Co,, 17 W. B. 463 ; 20
Law Times, 163, the Court declined to interfere, but that was on the ground that to
interfere might lead to many similar applications.

p. 3 c



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754



VOLUKTARY WINDING-UP.



. If a sapervision order is made direotmg the petitioner's and liqaidator's ootfts to
be taxed and paid out of the assets, the liquidator's remuneration for the period
between the commencement of the winding-up and the date of the superriakm
order is postponed to those (taxed) costs, and also to any further oosts for work
properly done hy the solicitor by the authority of the liquidator subsequently to
the order. Sanitary Burial Association, (1900) 2 Ch. 289.

As to the liquidator's claim against a parUamentaiy deposit in the case of an
abortiye tramway company in yolnntary liquidation, see Titrpin ▼. Somenet, |f.
Tramway Co., W. N. (1900) 94.

R. 137) as to the remuneration of a liqmdator, has no application to voluntary
liquidators. R. 1 of 1903.



Resolutions
as to re-
muneration of
liquidator.



Form 724. That the remimeratioii of the sd liqr for his services in the winding-
up be fixed at the sum of [100/.].

Or at the sum of 1. p.a., or at the sum of [two] g^uineas per

day of eight hours for his own time and one guinea per day of eight
hours for his clerk's time, or at a sum equal to two p.c. of the amount
of the assets divided among the tmsecured creditors and members of
the coy.

That the remuneration of the sd liqrs be fixed aj; two guineas each
for every day occupied by them in the winding-up, together with all
costs, charges, and expenses incurred by them in and about such
winding-up.

That the liqr shall be remimerated for the service of himself and his
clerks in accordance with the scale usually adopted by the High Ct of
Justice in fixing the remuneration of o£E liqrs.



Form 726. Upon the peton of H., of, &c., and J., of, &o., preferred unto this
Order as to ^ *^^ upon hearing coimsel for the petrs and for the respts, and
remuneration upon reading the sd peton, By consent, order that, without prejudice
of liquidator. ^ ^^^ question, it be referred to chambers to fix the amount of remu-
neration proper to be allowed and pd to S., C, and H., the present
liqrs of the sd coy ; And order that it be referred to the taxing master
to tax the bill of costs of Messrs. L. & L., the solors of the respts,
delivered to the sd liqrs, of and relating to the winding-up of the sd
coy. And order that the rest of the sd peton do stand over. London
Paper, Sfc. Co., Malins, V.-O., 1st Feb., 1878. B. 311.



Form 726. Upon the applicon of W. and 0., two of the voluntary Uqrs of the

Order fixing" ^^7f *^^ upon the applicon of N., the other liqr, Order that the sum

remuneration of 950/. be allowed as the total amotmt of the remuneration to be pd

^^^ '• out of the assets of the coy to the sd N. as one of the voluntaiy liqrs



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BEBIUNERATION OP UQUIDATORS. 756

of the coy, in respect of his services up to the dose of the Hquidation,
and tax as between solor and client the costs of the sd W. and C, and
also the costs of the sd N., of the sd applicon-and consent thereon, and
order payment out of assets. Northfleet Chalky Kay, J., 24th April,
1884. B. 503.



Upon the applicon of T. and N., the voluntary liqrs of the above- Form 727



named coy, &c., by originating summons, It is ordered that the sum of Ordor as to
500/. be allowed as the total amount of remuneration to be pd out of liquidator's
the assets of the coy to the sd T., and the sum of 300/. allowed as the ^p to dose of
totW amount of the remuneration to be pd out of the assets of the coy liquidatioo.
to the sd N. as the voluntary liqrs of the sd coy in respect of their
services up to the dose of the liquidation. And it is ordered that the
sd sums of 500/. and 300/. resply be pd to the sd T. and N. resply out
of the assets of the sd coy. And it is ordered that 10/. 19^. 6i/., the
ascertained costs of the applicants, and 2/. 2«., the ascertained costs of
the sd New Explosives Coy, Limtd, of this applicon, be pd out of the
assets of the sd coy. Explosives Co, (1891, E. 916), Kekewich, J.,
28th Aug. 1891. A. 1264.



Upon the applicon by originating summons dated, &c., of T. and B., Ponn 727a >
the joint liqrs acting in the voluntary winding-up of the above-named Another
coy, and upon hearing, &c., Order that the applicants T. and B. be order for re-
allowed for their remuneration as such liqrs asr afsd down to the [date

or dose of the liquidation], the sum of /. liberty to apply.

A\ Biscuit Co., 00393 of 1898, Hood, Beg., March 24, 1899.



Upon the applicon by summons, &c. of E., late voluntary liqr of the Form 728.
above-named coy, and upon hearing the solors for the sd R. and the order on
off recr and liqr. And upon reading, &c. And the sd R. having official re-
vouched and paiBsed his account as voluntary liqr of the sd coy, which ^i^tary^^



Online LibraryCharles Mac Naughten Sir Francis Beaufort PalmerCompany precedents for use in relation to companies: subject to ..., Volume 2 → online text (page 95 of 152)