Scottish Court of Session Decisions

The Companies Act 1862, sec. 100, provides—“The Court may at any time, after making an order for winding-up a company require any contributory for the time being settled on the list of contributories, trustee, receiver, banker, or agent or officer of the company, to pay, deliver, convey, surrender, or transfer forthwith, or within such time as the Court directs, to or into the hands of the official liquidator, any sum or balance, books, papers, estate, or effects which happen to be in his hands for the time being, and to which the Company is prima facie entitled.”

On 21 st April 1884 the British Canadian Lumbering and Timber Company (Limited) adopted a resolution for the voluntary winding-up of the company in terms of the Companies Act. Geo. Todd Chiene, C. A., Edinburgh, was appointed liquidator. On 3d July 1884 the Court of Session pronounced a supervision order in common form.

The liquidator now presented a note to the Court, in which he stated that since his appointment he had found that the greater part of the lands of the company, consisting of timber lots situated in Canada, and to a small extent in the United States of America, were in the hands of creditors in those countries. These creditors claimed to be secured in the various properties by deeds granted by the company before the liquidation; that he was unable to discover the true position of the company for want of various books and papers which were in the hands of Mr Allan Grant, now or lately lumber merchant, Ottawa, Canada, and formerly an agent of the company there, who had got these books, &c., in that capacity, but who declined to give them up or exhibit them to the representative of the liquidator in Canada, on the ground that he had a lien over them for a debt due by the company to him personally in respect of a transaction connected with the purchase of right to cut timber on certain lands. The liquidator further stated that he had been advised by Canadian counsel that proceedings should be taken in the Canadian Courts to compel Mr Grant to deliver up the said books and papers, but that antecedently an order should be given by the Court under the supervision of which the liquidation was proceeding under section 100 of the Companies Act of 1862 calling upon Mr Grant to deliver up the said documents. He therefore prayed the Court, as he was by the want of the said books prevented from proceeding with the settlement of the company's affairs, to order Mr Grant to deliver up to the liquidator in Canada all books and papers belonging to the company that were in his possession, and in the event of his failing to comply with that order to authorise the liquidator to proceed against him in the High Court of Justice in Canada. The liquidator further stated that the property of the company in America consisted principally of “timber limits”—i.e., the right acquired from proprietors to cut down the timber on a piece of ground; that he had endeavoured to sell these lots by public auction, but had been unsuccessful; and that he was informed by his Canadian advisers the better way was to sell by private bargain, after advertising and giving the option of foreclosing at a particular figure, within a specified period intended to give an opportunity of examination; and he therefore prayed the Court to approve of his giving concurrence to the sale of these “timber lots” by private bargain instead of by public auction.