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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Crawford Petitioner [1902] ScotLR 39_653 (07 June 1902) URL: http://www.bailii.org/scot/cases/ScotCS/1902/39SLR0653.html Cite as: [1902] ScotLR 39_653, [1902] SLR 39_653 |
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Page: 653↓
Section 147 of the Companies Act 1862 provides that “when a resolution has been passed by a company to wind up voluntarily, the Court may make an order directing that the voluntary winding-up should continue but subject to such supervision of the Court, and with such liberty for creditors, … to apply to the Court, and generally upon such terms and subject to such conditions as the Court thinks just.”
A creditor of a company incorporated under the Companies Acts is not entitled as matter of right to demand that a voluntary liquidation should be placed under the supervision of the Court, and the Court will not grant such a petition if no special cause is shown for doing so.
The creditor of a company which was in the course of being voluntarily wound up petitioned for a supervision order, but made only a general averment to the effect that complicated questions were likely to arise as to the respective rights of security-holders and ordinary trade creditors, and that it was desirable in the interests of the creditors that the petition should be granted. The great majority of the creditors were opposed to the application being granted. The Court refused the petition.
A. R. Cowper, Limited, was incorporated under the Companies Acts in 1899, having its registered office in Glasgow. The objects of the company were to carry on the business of carting and removing contractors.
On 8th March 1902 a resolution was passed at an extraordinary general meeting of the shareholders for the voluntary liquidation of the company, and Mr James Cowan Paterson, C.A., Glasgow, was appointed liquidator.
A petition was presented by Mr John Crawford, printer, Glasgow, an unsecured creditor of the company, craving that the liquidation should be continued subject to the supervision of the Court.
The petitioner averred—“There is no prospect of the creditors of the company being paid in full. Your petitioner is a creditor of the company conform to oath herewith produced. He holds no security. In the circumstances your petitioner is desirous that the liquidation should be put under the supervision of the Court, and he accordingly presents this petition to your Lordships. Complicated questions as to the respective rights of security-holders and ordinary and trade creditors are likely to arise, and in the interests of the creditors it is desirable that the prayer of this petition should be granted. Further, preferences may be running which it is desirable to cut down.”
Answers were lodged by the company and the liquidator, in which it was averred that the liquidator was prepared to distribute the whole free assets almost immediately, and that “no question has arisen or will arise between secured and ordinary creditors, and it is the almost unanimous wish of the creditors that all unnecessary expense should be avoided, and that the company should be wound up by way of voluntary liquidation. The petitioner's debt only amounts to £24, 4s. 6d. The respondent James Cowan Paterson submits that the petitioner has no sufficient title to present the present application, and that no relevant or sufficient statement has been made in support thereof. The statement that complicated questions are likely to arise is unfounded in fact, and the prayer of the petition is contrary to the wish of the great majority of the creditors.”
Argued for the petitioner—He was entitled as a matter of right to ask for a supervision order. It could not prejudice in any way the general body of creditors, and might be beneficial to them. There was no case where such an application had been refused. This was analogous to the case of creditors under a trust-deed, any one of whom might refuse to agree to the terms.
Argued for the respondents—A creditor was not entitled to an order as a matter of right, but must show some cause. Section 149 of the 1862 Act gave the Court full discretion to grant or refuse such an application.
Page: 654↓
The question primarily depends upon the 147th section of the Companies Act 1862, which is in the following terms:—[ His Lordship read the section].
It is to be noted that the Act does not here give a right to the creditor to have his application granted; it only confers a power upon the Court to grant it if the Court thinks fit. Accordingly, in all the cases in which the Court has granted a supervision order some cause has been shown for it, such as the danger of preferences being created, or some impropriety, actual or threatened, in the conduct of the liquidation. But I find nothing of that kind here. The only statements made are that complicated questions as to the respective rights of secured creditors and the ordinary and trade creditors are likely to arise. The petitioner does not say that they have arisen, nor does he state what they are. It is also said that preferences might be secured, but that statement might be made in every liquidation. It is evident that this is a blind petition, not presented under any real apprehension of any known danger. Unless the statute had provided that without any cause being shown any creditor should be entitled as a matter of right to obtain a supervision order, such an application could not be granted, as no attempt has been made here to show any cause, and I think that the application should be refused.
The Court refused the petition.
Counsel for the Petitioner— Graham Stewart— Macaulay Smith. Agents— Clark & Macdonald, S.S.C.
Counsel for the Respondents— Constable. Agents— Mill, Bonar, & Hunter, W.S.
