Actions restrained when petition about to be heard. Provisional liquidator. Course to be pursued by Court on hearing petition. Adjournment of hearing. Who will be heard. In Re Hull Forge Co., Ex parte Mitchell (a) the creditor commenced his action in the interval between the passing and the confirmation of the resolution to wind up voluntarily. Notice was subsequently given him of the resolution, but he nevertheless afterwards signed judgment. A motion to restrain the sheriff from levying execution was refused, the Master of the Rolls considering himself bound by In re Great Ship Co. (v. supra, p. 144). If a winding-up petition is about to be heard, actions by creditors against the company will be restrained on motion ex parte until after the petition has been disposed of, on the applicant giving the usual undertaking as to damages (6). A provisional liquidator will not in general be appointed before the hearing of the petition, unless the company be shewn to be insolvent (c) or unless the petition be presented by the company itself, or be shewn to be unopposed (d). A provisional liquidator has been appointed after the presentation of a petition by a clerk to whom an arrear of salary was due, on his application; but the Court hesitated to make the appointment on the application of a person with so small an interest, and appointed with liberty for any person to apply to vary the appointment (e). A provisional liquidator is not entitled to appear on the hearing of the petition (ƒ). 86. Upon hearing the petition the Court may dismiss the same with or without costs, may adjourn the hearing condi tionally or unconditionally, and may make an interim order, or any other order that it deems just (a). (a) Gen. Order, Nov. 1862, Rules 6, 7, Forms 3-5. A petition will not, if it can be avoided, be adjourned or ordered to stand over, because a winding-up order, if ultimately made, will relate back to the presentation of the petition, and affect acts done in the interval (g). As to petitions for winding up, and the orders which will under different circumstances be made upon them, see sects. 79, 80, 82, 91. The only persons entitled to be heard upon the petition are the company, its creditors and contributories (h); and although the Court may, in its discretion, hear other persons who have an interest in the matter, in order to learn what public grounds there are in favour of, or in (e) Re Rockall Fishery Co., 11 W. R. (a) M. R. July 5, 1866; see 36 L. J. (Ch.) 337. (b) Re London and Suburban Bank, 19 W. R. 950. (c) Ke Railway Finance Co., 14 W. R. 754. (d) In re Cilfoden Benefit Building 84. (f) See note to next section. (g) Re Metropolitan Railway Warehousing Co., 15 W. R. 1121; Re Metropolitan Saloon Omnibus Co., Ex parte Hawkins, 28 L. J. (Ch.) 830; but see, as to cases of disputed debt, s. 79. (h) In re Bradjord Navigation Co., L. R. 5 Ch. 600. opposition to, the winding-up (a); yet such persons can be heard only as amici curiæ, and have no locus standi to appeal against the decision (b). With regard to the costs of the petition, a general rule was laid down Costs. by Romilly, M.R., in In re Humber Ironworks Co. (c) (not following In re Marlborough Club Co. (d), before Kindersley, V.C.), as follows: (1.) Where the Court refuses to make the order, shareholders or creditors supporting the petition will not have their costs; shareholders, directors, or others opposing the petition will not have their costs, unless personally assailed by a charge which is disproved (e); the company opposing the order will have their costs from the petitioner (ƒ). (2.) Where the Court makes the order, no costs will be given to persons who appear to oppose the petition; and shareholders or creditors who, together or separately, appear to support the petition, will get one set of costs between them, and only one; the costs of the petitioner and of the company will be given out of the estate. This rule was reviewed by Kindersley, V.C., in In re European Banking Co., Ex parte Baylis (), where his Honour said, that if the rule laid down by the Master of the Rolls was, as he understood, that where the Court makes the order the shareholders who support the petition should have one set of costs among them, and likewise the creditors who support the petition should have one set of costs among them, he to that extent concurred in the rule; but he held that, on the same principle, where the petition is dismissed with costs, the shareholders who appear to oppose the petition should have one set of costs among them, and likewise the creditors who appear to oppose shall have one set among them; and the order in that case, dismissing the petition with costs, provided for payment of costs accordingly. In In re Orientul Commercial Bank (h), before Wood, V.C., an order having been made on the petition, all parties served were allowed their costs, and one set was allowed for the creditors, and one for the contributories. But in In re Albion Bank (i), Stuart, V.C., refused to lay down any rule as to paying only one set of costs, and held that the circumstances of each case should be considered; and in that case an affidavit having been filed on the part of the company, which shewed that the bank was in a most satisfactory condition, and which had not been answered by the petitioner, although there had been ample opportunity for answering it, the petitioner was ordered to pay the costs of all parties. The case last mentioned was approved in In re Anglo-Egyptian Navigation Company (k), by James, V.C., and it was held that although, where the petition is dismissed, the general rule is to give not more Creditor's petition withdrawn. Petition dismissed. Provisional liquidator. Petitioner's costs are a first charge, free from set-off. Rule applies only to petitioner's costs. Creditor's costs after offer to pay. than one set of costs to the same class of persons opposing (a), yet that this is but a general rule, and that the Court will be guided by the particular circumstances of each case; and one set of costs was there given to the opposing shareholders in addition to those of the company. Where a creditor presented a petition for a winding-up order, and his debt, which was disputed by the company, having been established at law, was paid by the company, he was, upon withdrawing his petition, held entitled to his costs (b). Where, at the wish of a majority of shareholders anxious to continue the business, a winding-up petition is dismissed, the dismissal, if at the time of the presentation of the petition there was a bonâ fide case for petitioning, may be without costs (c). A provisional official liquidator is not entitled to his costs of appearing on a winding-up petition. He is in the position of a receiver pendente lite (d). Where a winding-up order is made on a petition, it is an order for the benefit of every one concerned, and the petitioner's costs are, therefore, a first charge on the estate, and must be paid in full in priority to any costs of the official liquidator (e). And where the petitioner is a shareholder, and subsequently becomes liable as a contributory in respect of calls in the winding-up, he is entitled to his costs without any set-off by the company of moneys due from him in respect of such calls; for the costs are, in fact, paid to the solicitor, and if no costs of obtaining the winding-up order were paid until the liability of the contributory to calls had been ascertained, and then the one were set off against the other, it would be difficult for a contributory to come for a winding-up order at all (ƒ). But the rule as to priority applies only to the costs of the petitioner, and if in the course of the winding-up orders are made for the payment of costs out of the estate, the persons to whom costs are awarded have no priority over other persons who are also entitled to costs merely because one order bears earlier date than another (g). As to costs ordered to be paid by a company in liquidation, see also sect. 85. A creditor who proceeds to bring a winding-up petition to a hearing after an offer to pay (h), or to secure (i) his debt and costs, will not be allowed costs incurred after such offer, or will be ordered to pay all costs of the petition incurred since the offer was refused. (See also sect. 82). (a) See also In re European Life Assurance Society, L. R. 10 Eq. 403; Re London and Suburban Bank, 19 W. R. 88; In re Irrigation Co. of France, Ex parte Fox, L. R. 6 Ch. 176, 195; In re Albert Life Assurance Co., L. R. 6 Ch. 381. (b) Re Railway Finance Co., 14 W. R. 785. (c) Re Great Northern Copper Mining Co., 14 W. R. 705. (d) Re General International Agency Co., 13 W. R. 363; 34 L. J. (Ch.) 337. 5 N. R. 265. (e) In re Audley Hall Cotton Spinning Co., L. R. 6 Eq. 245. (f) In re General Exchange Bank, L. R. 4 Eq. 138. (g) In re Marlborough Club Co., Ez parte Percival, L. R. 6 Eq. 519. (h) In re Times Life, &c., Co., L. R. 9 Eq. 382. (i) In re Imperial Guardian Society, L. R. 9 Eq. 447; and see In re Home Assurance Association, L. R. 12 Eq. 59. Sect. 124, which limits the time within which notice of rehearing Rehearing or appeal is to be given, applies only to orders made in the windingup, and not to an order made on the original petition (a). Where, on a creditor's petition for a compulsory order, an order had been made to continue a voluntary winding-up under supervision, subsequently, on motion to discharge that order on the ground of irregularity in the voluntary winding-up, and for a rehearing of the petition, the order was discharged, and the petition reheard without fresh advertisement, on service and consent of all parties entitled to be served (b). An application to vary or discharge an order made on a petition Application must, if made on the merits, be the subject of a regular rehearing, to vary even though all parties consent to a different course (c). The application may be made by motion with notice (d). Two companies cannot, for convenience' sake, because their affairs are much mixed up together, be included in one winding-up order, though separate lists of contributories be made out for each company (e). order. Two companies cannot be included in one winding up order. But by the Life Assurance Companies Act, 1872 (35 & 36 Vict, c. 41), Life Assurance s. 4, v. infra, in the case of amalgamated life assurance companies, Companies where the "principal" company is being wound up, the Court shall Act, 1872. order the "subsidiary" company to be wound up in conjunction with the "principal" company, and make provision with a view to such companies being wound up as if they were one company, subject as therein mentioned. And where any subsidiary company and principal company are being wound up by different branches of the Court, the Court to which appeals from such branches lie shall make an order directing in which branch the winding-up shall be carried on. Where there were in different branches of the Court two concurrent petitions for winding-up, and the one which had been presented last came on for hearing first, an application that it might be transferred to the other branch of the Court to be heard with the petition first presented was refused (ƒ). Where a petition was pending in one branch of the Court, and a provisional liquidator had been appointed, but the petitioner had failed to prosecute the petition, a winding-up order was granted in the interim on another petition in another branch of the Court (g). was Two petitions in different branches of the Court. Where there were two petitions, the one by a paid-up shareholder, Several the other by shareholders who had paid only the deposit, one order petitions. made on both petitions, and the conduct of the winding-up given to the paid-up shareholder (h). (a) See s. 124. In re Patent Floor Cloth Co., L. R. 8 Eq. 664. (e) Re North Wales Slate Supply Co., 18 W. R. 403. (d) Clarke's Case, 1 K. & J. 22. (e) Shields Marine Association, Ex parte Lee and Moore, 16 W. R. 69. (f) Re British and Foreign Gas, &c., Co., 13 W. R. 649; 12 L. T. 368; 11 Jur. 559. (g) Re Consolidated Bank, 14 L. T. 656. (h) Re Constantinople and Alexandria Hotels Co., 13 W. R. 851. Actions and suits to be stayed after order for winding up. Effect of section. Property in a foreign country. SUIT:against company and third party; Where several petitions are presented, the Court will consider the circumstances of each petition as if it were the only one (a). See further note to sect. 82. 87. When an order has been made for winding up a company under this Act no suit, action, or other proceeding shall be proceeded with or commenced against the company except with the leave of the Court, and subject to such terms as the Court may impose (a). (a) ss. 163, 198, 202. This section has been already, in a great measure, discussed under sect. 85; and it will there be seen that, notwithstanding sect. 163, the Court may in its discretion allow a creditor to proceed to levy execution, notwithstanding that the company is being wound up. After a winding-up order has been made, however, any further proceedings are absolutely put a stop to, until leave has been obtained from the Court. And, therefore, where a winding-up order was made and an official liquidator appointed, and on the same day a writ of fi. fa. was issued by a judgment creditor, on which execution was levied two days afterwards, when the official liquidator was in possession, further proceedings were, on the application of the official liquidator, restrained by the Court as a matter of course, for the Act gives no option. It was impossible for the judgment creditor to proceed except by leave obtained from the Court, on an application of which notice had been given (b). For cases under this section, see sect. 85. Semble, a proceeding against the company in respect of property in a foreign country is within the Act. The fact that the property is out of the jurisdiction does not prevent the application of the Act (e). Leave will be given to proceed with a suit against third parties, to which the company is a necessary party, the plaintiff undertaking not to enforce against the company any decree he may obtain, without the leave of the Court:-e.g., where the bill was filed against a company and a third party for an account of promotion money alleged to have been received by him from the company (). So where the bill was filed by a shareholder in a company to restrain the company from amalgamating itself with another company, which had, since the resolution for amalgamation, been ordered to be wound up, and both companies were made defendants (e). But, except as above, leave to institute or proceed with a suit will (a) Re European Banking Co., Ex parte Baylis, L. R. 2 Eq. 521; but see also s. 82. (b) Re Waterloo Life, &c., Insurance Co., 31 Beav. 589; 11 W. R. 159. (c) Re South Eastern of Portugal Railway Co,, 17 W. R. 982. (d) McEwen v. London, Bombay, &c., Bank, 15 L. T. 495; W. N. 1866, 407; 15 W. R. 245. (e) Re Marine Investment Co., 14 L. T. 535. |