Arrangement, when binding on creditors. Power of creditor or contributory to appeal. Power for liquidators or in voluntary winding-up to apply to Court. such delegated power shall have the same effect as if it had been done by the company (8). 136. Any arrangement entered into between a company about to be wound up voluntarily, or in the course of being wound up voluntarily, and its creditors, shall be binding on the company if sanctioned by an extraordinary resolution (a), and on the creditors if acceded to by three-fourths in number and value of the creditors, subject to such right of appeal as is hereinafter mentioned (3). 137. Any creditor or contributory of a company that has in manner aforesaid (a) entered into any arrangement with its creditors may, within three weeks from the date of the completion of such arrangement, appeal to the Court against such arrangement, and the Court may thereupon, as it thinks just, amend, vary, or confirm the same. (a) s. 136. The application will be made by petition or motion, or if the judge shall so direct by summons at Chambers (a). 138. Where a company is being wound up voluntarily the contributories liquidators or any contributory of the company may apply (a) to the Court in England, Ireland, or Scotland, or to the Lord Ordinary on the Bills in Scotland in time of vacation, to determine any question arising in the matter of such windingup, or to exercise, as respects the enforcing of calls, or in respect of any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court; and the Court or Lord Ordinary, in the case aforesaid, if satisfied that the determination of such question, or the required exercise of power, will be just and beneficial, may accede, wholly or partially, to such application, on such terms and subject to such conditions as the Court thinks fit, or it may make such other order, interlocutor, or decree on such application as the Court thinks just. (a) Gen. Order, Nov. 1862, Rule 51. (a) Gen. Order, Nov. 1862, Rule 51. The object and effect of this section is to give the company and its Effect of creditors the means of access to the Court, whenever any question section; arises in the voluntary winding-up, exactly in the same way as when any question arises in the case of a winding-up under a compulsory order or under supervision. The object of the Act is to leave them, if possible, to settle their affairs without coming to the Court at all, but to provide them with the means of access to the Court if necessary. And, therefore, in several cases the Court has discouraged any attempt to draw a distinction between the jurisdiction given to the Court in a voluntary winding-up, and in a winding-up under a compulsory order or under supervision. Thus the Court has declined to make a supervision order expressly on the ground, that whatever is the jurisdiction of the Court under the supervision order would be its jurisdiction under a voluntary windingup; that the contributories can have exactly the same protection in any particular instance by applying under this section as they would have under a supervision order (a); and as regards creditors, if the as to creditors. liquidator do not do his duty by the creditors in taking the opinion of the Court under this section in a proper case it would, no doubt, be in the power of a creditor to apply for a proper order to give him an opportunity of obtaining such opinion (b). Where the liquidator has allowed a claim against the company, and Who should some of the shareholders dissent, it is not the liquidator's duty to bring apply. the matter before the Court, he should leave the dissentient shareholders to do so (c). Where one proceeding under a voluntary winding-up has been taken in one branch of the Court, any other proceeding under the same winding-up ought to be instituted in the same branch (d). In what branch of the Court application to be made. Power of liqui general meet 139. Where a company is being wound up voluntarily the liquidators may, from time to time, during the continuance of dators to call such winding-up, summon general meetings of the company ing. for the purpose of obtaining the sanction of the company by special resolution (a) or extraordinary resolution (B), or for any other purposes they think fit; and in the event of the winding-up continuing for more than one year, the liquidators shall summon a general meeting of the company at the end of the first year, and of each succeeding year from the commencement of the winding-up, or as soon thereafter as may be convenient, and shall lay before such meeting an account shewing their acts and dealings, and the manner in (a) In re Bank of Gibraltar and Malta, L. R. 1 Ch. 69; In re Beaujolais Wine Co., L. R. 3 Ch. 15, 25. (b) Rance's Case, L. R. 6 Ch. 104, 115, 120. (c) Re Licensed Victuallers, &c., Co., 15 W. R. 917. (d) Re Alexandra Printing Ink Co., 16 W. R. 456; and see Gen. Order, Nov. 1862, Rule 74. Power to fill up vacancy in liquidators. Power of Court to appoint liquidators. Removal of liquidators; after supervision order made. "Due cause." which the winding-up has been conducted during the preceding year. 140. If any vacancy occurs in the office of liquidators appointed by the company, by death, resignation, or otherwise, the company in general meeting may, subject to any arrangement they may have entered into with their creditors (a), fill up such vacancy, and a general meeting for the purpose of filling up such vacancy may be convened by the continuing liquidators, if any, or by any contributory of the company, and shall be deemed to have been duly held if held in manner prescribed by the regulations of the company, or in such other manner as may, on application by the continuing liqui dator, if any, or by any contributory of the company, be determined by the Court. (a) s. 135. 141. If from any cause whatever there is no liquidator acting in the case of a voluntary winding-up, the Court may, on the application (a) of a contributory, appoint a liquidator or liquidators; the Court may also, on due cause shewn, remove any liquidator, and appoint another liquidator to act in the matter of a voluntary winding-up (8). (a) Gen. Order, Nov. 1862, Rule 51. (B) Conf. ss. 150, 152. The Court has under this section power to remove any liquidator appointed by the company or the Court in a voluntary winding-up, and, under the 150th section, to remove any liquidator appointed by the Court in a voluntary winding-up continued under supervision. The Court has also, after making an order to continue a voluntary winding-up under supervision, power under this section and sect. 150, or, at any rate, under sects. 151 and 93, to remove the liquidators appointed by the company before the order, and appoint others (a). "Upon due cause shewn," to satisfy these words it is not necessary to prove against the liquidator anything amounting to misconduct or personal unfitness, the Court may take all the circumstances into consideration, and if it finds that it is, on the whole, desirable that a liquidator should be removed, it may remove him (b). (a) Ex parte Pulbrook, Ex parte Rawlings, 2 D. J. & S. 348; In re United Merthyr Collieries Co., W. N. 1867, 99; 16 L. T. (N.S.) 170; and see s. 150. (b) In re Marseilles Extension, &c., Co., L. R. 4 Eq. 692; In re British Nation Assurance Society, Ex parte Henderson, W. N. 1872, 103; and see s. 93. winding-up to make up an account. 142. As soon as the affairs of the company are fully wound Liquidators on up, the liquidators shall make up an account shewing the conclusion of manner in which such winding-up has been conducted, and the property of the company disposed of; and thereupon they shall call a general meeting of the company for the purpose of having the account laid before them. and hearing any explanation that may be given by the liquidators: the meeting shall be called by advertisement, specifying the time, place, and object of such meeting; and such advertisement shall be published one month at least previously to the meeting, as respects companies registered in England in the London Gazette, and as respects companies registered in Scotland in the Edinburgh Gazette, and as respects companies registered in Ireland in the Dublin Gazette. 143. The liquidators shall make a return to the registrar Liquidators to of such meeting having been held, and of the date at which report meeting to registrar. the same was held, and on the expiration of three months from the date of the registration of such return the company shall be deemed to be dissolved (a): if the liquidators make default in making such return to the registrar they shall incur a penalty not exceeding five pounds for every day during which such default continues. (a) s. 111, as to winding-up by the Court. If an application be made to the Court after the registration of the Effect of return, but before the expiration of the three months limited by this dissolution. section, the Court has jurisdiction to make an order in the matter of the winding-up, notwithstanding that the three months have elapsed before the order is made; and, quære, whether, in any case, the dissolution of a company by virtue of this section deprives the Court of jurisdiction over the company under the Act (a). The Industrial and Provident Societies Act, 1862 (v. infra) provides by sect. 18, that the dissolution of those societies shall not prevent the winding-up of their affairs, so far as they remain unsettled. voluntary 144. All costs, charges, and expenses properly incurred in Costs of the voluntary winding-up of a company, including the re- liquidation. muneration of the liquidators, shall be payable out of the assets of the company in priority to all other claims (a). (a) Conf. s. 110. (a) In re Crookhaven Mining Co., L. R. 3 Eq. 69. Liquidators not responsible for costs. Saving of rights of creditors. Contributory's petition. Where the assets of the company are insufficient to pay the costs of the winding-up, the liquidators cannot be made personally responsible to the solicitors for the deficiency (a). See further, notes to sect. 110. 145. The voluntary winding-up of a company shall not be a bar to the right of any creditor of such company to have the same wound up by the Court, if the Court is of opinion that the rights of such creditor will be prejudiced by a voluntary winding-up. As to the circumstances under which a company may be wound up by the Court, and the orders which will in different cases be made on a petition for having a company so wound up; see sects. 79, 80, and 91; and see also sects. 147, 149. A question has been raised whether, by specifying creditors, this section does not exclude contributories, and whether, therefore, after the commencement of a voluntary winding-up, a compulsory order can be made on a contributory's petition. The corresponding section of the Act of 1856 (19 & 20 Vict. c. 47, s. 105) is, "The voluntary winding-up of a company shall not prejudice the right of any creditor of such company to institute proceedings for the purpose of having the same wound up by the Court." Upon which section it was held in Re Fire Annihilator Co. (b) that a compulsory order could be so made upon a contributory's petition; and the proceedings in the voluntary winding-up having been dilatory and unsatisfactory, and not having come to a conclusion at the end of five years, a compulsory order was there made. An opinion was expressed by Turner, L.J., in In re Bank of Gibraltar and Malta (c) that this section (the 145th) did, by specifying creditors, exclude contributories; but it appears to be now settled, that on a contributory's petition a compulsory order may be made, although it is not without very sufficient reason that such an order will be made. Thus, in Re London Flour Co. (d) Stuart, V.C., held that the Court had jurisdiction to make such an order, and he there made a compulsory order; which was, however, in the absence of fraud, discharged on appeal, as a majority of the shareholders and creditors were in favour of a voluntary winding-up. In Re Lonsdale Vale Ironstone Co. (e) the petition being supported by creditors, a compulsory order was made. The shares were in this case fully paid up, and the assets insufficient to pay the creditors in full, so that the contributories had really no interest in the estate. In Re Oriental Commercial Bank (f) on a petition presented by the (b) 32 Beav. 561. (c) L. R. 1 Ch. 69, 74; and see In re Imperial Bank of China, India, and Japan, L. R. Ch. 339; In re London 277. (d) 16 W. R. 474, 552. (e) 16 W. R. 601. (f) 15 W. R. 7; 14 L. T. 755; 15 L. T. 8. |