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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Belhaven Engineering and Motors, Ltd, Petitioners [1912] ScotLR 19 (16 October 1912) URL: http://www.bailii.org/scot/cases/ScotCS/1912/50SLR0019.html Cite as: [1912] ScotLR 19, [1912] SLR 19 |
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Page: 19↓
(Single Bills.)
A company which had gone into voluntary liquidation presented a petition in vacation craving that the liquidation should be placed under the supervision of the Court. The Lord Ordinary on the Bills having granted the petition, the petitioners on the first sederunt day thereafter presented a note to the First Division craving the Court to confirm the appointment of (1) the liquidator, and (2) a committee of advice nominated by the shareholders and creditors, and to remit the winding-up to one of the Lords Ordinary.
Held that the note was incompetent as being ( a) unnecessary, so far as regarded (1) the remit, since the petition in vacation automatically came up in Single Bills on the first day of session, when a remit to a Lord Ordinary might be obtained, and (2) the confirmation of the liquidator's appointment, as no one was objecting to him, and he had become under the supervision order an official of the Court; and ( b) unauthorised, so far as regarded confirmation of the committee of advice, there being no provision in the Companies Consolidation Act 1908 for the appointment of any such committee.
The Companies Consolidation Act 1908 (8 Edw. VII, cap. 69), section 199, enacts—“When a company has by special or extraordinary resolution resolved to wind up voluntarily, the Court may make an order that the voluntary winding-up shall continue, but subject to such supervision of the Court, and with such liberty for creditors, contributors, or others to apply to the Court, and generally on such terms and conditions as the Court thinks just.”
On 15th October 1912 Belhaven Engineering and Motors, Limited, Wishaw, then in liquidation, and A. R. Yule, C.A., Edinburgh, the liquidator thereof, presented a note to the Lord President, in which they craved his Lordship to move the Court (1) to confirm Mr Yule's appointment as liquidator, (2) to confirm the appointment of the Committee of Advice after mentioned, and (3) to remit the winding-up to one of the permanent Lords Ordinary.
The note stated—“At an extraordinary general meeting of the Belhaven Engineering and Motors, Limited, held on 16th July 1912, it was unanimously resolved that the company be wound up voluntarily, and that Allan R. Yule, C.A., should be appointed liquidator. At said meeting it was further resolved that James Barclay, merchant, Glasgow, and James Gill, solicitor, Edinburgh, should be appointed a committee of shareholders to advise with the liquidator. At a subsequent extraordinary general meeting of the company, held on 5th August 1912, said resolutions were duly confirmed and the appointment of Mr Barclay and Mr Gill approved of.
“On 21st August 1912 a meeting of the company's creditors, convened by the liquidator, was held in Glasgow, at which the creditors unanimously approved the appointment of Mr Yule as liquidator of the company, and nominated W. B. Galbraith, C. A., Glasgow, and Thomas C. Kerr, of Messrs William Kerr & Company, iron and machinery merchants, Glasgow, as representing creditors, to act along with the said James Barclay and James Gill as a committee to advise with the liquidator.
“On 13th August 1912 a petition was presented to the Court for a supervision order in the liquidation, and the petition having been duly intimated and advertised, the Lord Ordinary officiating on the bills, on 28th August 1912, ordered the voluntary winding-up of the company to be continued, but subject to the supervision of the Court.”
The prayer of the note was as follows—“May it therefore please your Lordship to move the Court to confirm the appointment of the said Allan R. Yule, C.A., as liquidator of the said company, in terms of and with the powers conferred by the Companies Consolidation Act 1908; to confirm the appointment of the said James Barclay, James Gill, W. B. Galbraith, and Thomas C. Kerr as a committee of shareholders and creditors to advise with the liquidator in any matter arising in the liquidation, with power to communicate with the creditors and shareholders generally; to direct that all subsequent proceedings in the winding-up be taken before one of the permanent Lords Ordinary, and to remit the winding-up to him accordingly.…”
On the note appearing in the Single Bills counsel for the petitioners stated that the application was presented in terms of sections 199 and 201 of the Companies Consolidation Act 1908 (8 Edw. VII, cap. 69), and that in so far as it craved the confirmation of Mr Yule's appointment and a remit to a Lord Ordinary, the application was in conformity with the practice of the Court. He cited the following authorities—Wilton on the Companies Acts, p. 344; M'Knight & Company, Limited v. Montgomerie, February 27, 1892, 19 R. 501, 29 S.L.R. 433; Pattisons Limited v. Kinnear, February 4, 1899, 1 F. 551, 36 S.L.R. 402; Liquidators of Bruce Peebles & Company, Limited v. Shiells, 1908 S.C. 692, 45 S.L.R. 537.
Page: 20↓
Now when petitions are presented to the Inner House in the vacation they are boxed and they automatically appear in the Single Bills on the first day of session; and upon that automatic enrolment of a petition such as this, it is quite competent and is the usual practice for the liquidator, or those acting for him, to appear and to crave a remit to one of the Lords Ordinary. But in this case the company and the liquidator present a note, and the note contains three craves. They crave a confirmation of the appointment of Mr Yule as liquidator; they crave a confirmation of a certain committee which was appointed by the shareholders, with certain added members appointed by the creditors, to advise the liquidator; and the third crave is for a remit to the Lord Ordinary.
So far as the remit to the Lord Ordinary is concerned, it is evident from what I have already said that the note is unnecessary, and is therefore really only a multiplying of expense which we have always tried to avoid. So far as the other two craves are concerned, I do not think that the Court ought to entertain either of them. It is true that there may be found interlocutors in past processes where such a thing has been done as the confirming of a liquidator in a voluntary liquidation, but there is no provision for it in the statute, and the instances given to us are not very recent, and I cannot help thinking that they occurred per incuriam. In the case quoted to us the real contest was upon quite a different matter, and I cannot help thinking that that confirmation was inserted in the interlocutor because nobody objected.
When a voluntary liquidation is continued under the supervision of the Court, the Court takes the voluntary liquidation as it finds it, but puts it under supervision. The effect of putting it under the supervision of the Court is that the liquidator, who before was not an officer of the Court, becomes an officer of the Court. If anyone objects to the person who has been appointed as liquidator under the voluntary winding-up he can come to the Court and say so, and your Lordships are exceedingly familiar with such discussions. But nobody comes and says so here, and anything in the nature of a confirmation seems to me quite unnecessary. The liquidator is there, and as such he is put under the supervision of the Court.
Now as regards the joint committee of creditors and shareholders, there is no provision in the statute for the appointment of any such committee. I am rather tempted to suppose, from the way in which the creditors' representatives were added, that there was a floating idea in the minds of those concerned that they were doing something under the provisions of section 188 of the statute (8 Edw. VII, cap. 69). But they certainly were not. Section 188 of the statute provides for the possibility of creditors resolving to approach the Court to appoint a body called the committee of inspection. But a committee of inspection is a very different thing from the class of committee you have got here, and a committee of inspection, as will be found from a perusal of other sections of the statute, has very particular statutory powers. The committee here is a committee composed partly upon appointment by the shareholders alone and partly of members added by the creditors, and is a committee meant to approach the liquidator for conference and advice.
I am not saying anything against the appointment of such a committee. If the creditors and shareholders choose to appoint a committee to confer with the liquidator I do not see why they should not do so, just as any private creditor might arrange that he should appoint his law agent to go and see the liquidator about his interests, but I do not think we as a Court can have anything to do with that. There is no provision in the statute for it, and that is probably enough. But, quite apart from that, we do not know anything about this committee, and I do not think we can be asked to in any way give our imprimatur to the appointment of such a committee. Such a committee will probably, inasmuch as they represent existing shareholders, have a locus standi to come to us and complain of anything that the liquidator, who is now under our supervision, may propose to do, but I do not think that we have anything to do with the appointment of such a committee.
Accordingly, upon the whole matter, I am of opinion that this note ought to be refused in all its branches as unnecessary.
Page: 21↓
I therefore think that an application ex parte for confirmation of a voluntary liquidator is quite improper and outside the purview of the statute.
The Court refused the prayer of the note.
Counsel for Petitioners— Paton. Agents— Maxwell, Gill, & Pringle, W.S.
