Scottish Court of Session Decisions

Upon 27th October 1890 Messrs Drysdale & Gilmour, contractors, Leith Walk, Edinburgh, and the individual partners of the firm, presented a petition for the winding-up of the International Exhibition Association of Electrical Engineering Inventions and Industries 1890. The petitioners alleged that under a minute of agreement between them and George Edward Watson, secretary to and duly authorised by the Executive Council of the Association, they had done work in the erection of the Exhibition buildings at a cost of £26,000, of which a balance of £9000 was unpaid. They averred that the guarantee fund of £26,000 and the buildings were the only assets, while the debts as particularly specified amounted to £43,961, 15s. 6d. The Association had suspended payment except as to what were termed “current expenses.” With the view of securing a preference to the British Linen Company Bank, who were creditors to the amount of an overdraft of £19,907, the Association had delivered over to the bank the guarantee letters, and the bank upon 24th October 1890 issued a circular letter to the guarantors, stating, inter alia—“You will please take notice that your letter of guarantee is now in the hands of the bank, and that in the event of there being any call upon you under your guarantee the amount of such call will fall to be paid to the bank.” The petition prayed that the Electrical Association should be wound up by the Court, and that certain parties should be appointed official liquidators.

Upon 29th October the petition was ordered to be intimated, advertised, and served in the usual manner on eight days' inducice.

The Exhibition closed upon 31st October.

Upon 5th November 1890, at a general meeting of the Association, it was resolved—“That the purposes for which the Association was established having now been fulfilled, it is now required by the Association, in general meeting assembled, that the same be wound up voluntarily, and the meeting hereby resolve that the Association be wound up voluntarily.” This was a simple resolution, and neither special nor extraordinary.

Mr J. A. Robertson, C.A., was appointed liquidator, and it was also resolved that Mr Robertson, as liquidator, should apply to the Court of Session to have the liquidation placed under the supervision of the Court. A resolution was also passed unanimously that eight members of the Executive Council should be appointed to act as a committee of advice.

Upon 7th November 1889 the liquidator accordingly presented a note for a supervision order; for confirmation of his appointment and the committee of advice; and to have Drysdale & Gilmour found entitled to expenses of their petition.

The petitioners argued—Theirs was a creditor's petition, and therefore ought to be granted. The debtor had no right to interfere with the creditor's form of process—Buckley, p. 192. Upon the face of the petition it was evident that there was no prospect of any reversion to the guarantors, and large creditors were in favour of having the liquidation carried on under the orders of Court— Wilson v. Hadley, &c., November 8, 1879, 7 R. 178; Pen-y-Van Colliery Company, March 3, 1877, L.R., 6 C.D. 477; The General Rolling Stock Company, February 11, 1865, 34 Bevan, 314. The period for winding-up the company under a voluntary liquidation had not yet arrived, as all the purposes of the Association had not been fulfilled. Section 129 (1) of the Companies Act 1862 did not apply, and the voluntary liquidation was incompetent. They could only proceed under section 143.

Argued for the liquidator — A large number, if not a majority, of the creditors agreed to have a voluntary liquidation of this Association, and the Court would not interfere with such an arrangement— Aitken and Others, Petitioners, December 1, 1888, 26 S.L.R. 129. The note was competent, because the purposes of the Association had been fulfilled.

At advising—