this has been proved to my satisfaction, I am inclined to think on the authorities I cannot go behind the order. Whether I would be now satisfied is another matter. There is another answer: this is purely a technical objection; it is technical in this sense, it is to the form of the affidavit. It is not that there is no affidavit, but that the form is not sufficient, that the person should have stated the grounds of his belief. As this is a technical objection I think it was waived when the adjournment was asked for and obtained, as no rights were preserved when I allowed the adjournment. I am not clear whether the order nisi is what can be regarded as a final order— that is, a judgment—and whether consequently "belief" may not be stated as in an interlocutory application. A final judgment is when the order absolute is being made, and when that is being made a party has a chance of dealing with it. This is made on what may be called a preliminary application to show cause why a final order should not be made, and the other side has a right to put the applicant to the proof of his allegations. Then would come the proof, and then would come the final order, and if he does not take his objection then I think that that objection goes because it is technical. Even if it was not gone I doubt whether that was a final application, and therefore whether the objection under any circunstances is a good one. Order absolute. Solicitors for petitioning creditor: P. D. Phillips & Son. 1898 In re FERGIE. Hodges, J. W. H. M. 1898 September 19. [IN CHAMBERS.] IN RE THE REGENT'S PARK COMPANY LIMITED. Company - Winding up—By the Court-Voluntary winding up-Creditor—Companies Act 1890 (No. 1074), ss. 86, 131. A compulsory winding-up order against a company will not be granted ex debito justitia on the application of a creditor of the company where a voluntary winding up is being proceeded with and it appears that the creditor's rights are not endangered by the voluntary winding up. A creditor of a company in voluntary liquidation applied for a compulsory winding-up order. The application was refused, but, under the circumstances, an order was made that the winding up should be continued under the supervision of the Court. PETITION under Part I. of the Companies Act 1890 by the Trustees Executors and Agency Company Limited (a creditor) to wind up compulsorily the Regent's Park Company Limited. The following facts were stated in the petition and verified by affidavit of the manager of the Trustees Company :- By instrument of mortgage dated 7th February 1891 the Regent's Park Company Limited mortgaged to Edward Green Snowden, John Pratt, and Orlando Fenwick, for the term of three years from the date of the mortgage, a piece of land at Collingwood, to secure an advance of 3000l. By another instrument of mortgage, dated 14th April 1893, the same company as mortgagor mortgaged, for three years from the date of the mortgage, another piece of land at Collingwood to the same persons as mortgagees to secure an advance of 900l. On the 9th December 1897 Orlando Fenwick died. On 21st July 1898 Pratt and Snowden transferred the instruments of mortgage to the Trustees Executors and Agency Company Limited, and notice in writing of the transfer was given to the Regent's Park Company on the 22nd August 1898. The principal moneys were wholly unpaid and an amount of 5591. was due for arrears of interest. On 19th July 1898 the manager of the Trustees Company wrote to the secretary of the Regent's Park Company as follows:-" Referring to your letter of 14th inst., and to our interview this day, in view of the fact that your company is unable to pay the arrears of interest, which at penal rate amount to over 400l., we think steps should be taken to call a meeting for the purpose of 1898 In re THE COMPANY winding up the company." To this letter the manager of the Regent's Park Company replied on the 21st July 1898 :-" My directors (who held a meeting to-day) wish me to inform you REGENT'S PARK that instructions have been given to the company's solicitor to convene an extraordinary meeting of the shareholders of the Regent's Park Company Limited to further consider your letters of 14th and 19th ult." The solicitor of the Regent's Park Company stated on affidavit that as solicitor of the company he attended a meeting of members of the company duly convened by notice dated 5th September 1898, and held in accordance with the company's articles at its registered office, on 14th September, when extraordinary resolutions were passed that the company be wound up, and that Frederick W. Danby be appointed liquidator for the purposes of the winding up, and be paid as remuneration in respect thereof 52l. 108. and all fees actually paid out of pocket. Notice of the extraordinary resolutions was advertised in the Government Gazette of 16th September 1898. Danby accepted the liquidatorship. On the 7th September he informed one of the petitioning creditors' solicitors that the meeting of 14th September was to be held. The petition now before the Court was dated 8th September 1898. The petitioning creditor objected to the nomination of a liquidator by the shareholders of the debtor company, and it was suggested that an employé of the Trustees Company should be appointed. It was stated by the creditor's solicitors in a letter to the debtor's solicitors, dated 15th September, that when informed of the meeting of 14th September they did not understand that a meeting at which the company would be placed in voluntary liquidation forthwith had been called, but one only to consider its position in view of the fact that a writ to recover the amount due had been served upon it. The petition now became returnable before Hood, J. Neighbour for the petitioner-The order should be made ex debito justitiæ. It lies upon the debtor company to show that the petitioner can get nothing if the compulsory order be made: Palmer's Company Precedents (6th ed.), vol. ii., pp. 34, 752. The Hood, J. 1898 In re THE principle is stated in Bowes v. Hope Society (a); In re Chapel House Colliery Co. (b); The General Rolling Stock Co. Ltd. (c). REGENT'S PARK Here there is no proof that the compulsory winding-up order is worthless. COMPANY LIMITED. Hood, J. Cussen for the liquidator-The Court will not make the order unless the creditor shows that he will be prejudiced by the voluntary winding up: Companies Act 1890, sec. 131; In re New York Exchange Ltd. (d); In re Russell, Cordner & Co. (e). The suggestion of the company's solicitor that the matter should be adjourned is reasonable. Neighbour in reply referred to In re Krasnopolsky Restaurant, etc., Co. (f); In re West Hartlepool Co. (g); Companies Act 1890, secs. 76, 86. HOOD, J. A creditor of a limited company is entitled either to get his debt paid or to have the company wound up by the Court as a general principle; but there are several important exceptions to this, one of which arises when there would be no possible advantage to the creditor in directing that an order compulsorily winding up the company should be made. In the present case, beyond the question of costs and the appointment of a particular liquidator I can see no advantage to the creditor in making such an order. The company is at the present time being wound up, and the uncalled capital is about to be called up in the ordinary way and distributed among the creditors of the company. No attempt has been made to impugn the honesty of the winding-up proceedings or to say that the liquidator already appointed is unfit, or that he will not act properly in the liquidation and as well as any other person appointed by the Court. The creditor has got his winding up-the company has already given him what he now asks the Court to give him. The company has commenced to wind up its business, and that (a) [1865] 11 H.L.C. 389, per Lord (d) [1888] 39 Ch. D. 415. 1898 In re THE COMPANY Hood, J. is all it can do. I ought, therefore, to refuse the application. That position is amply supported by the authorities cited by Mr. Cussen, and is not opposed by any of those referred to by REGENT'S PARK Mr. Neighbour. In addition there is the Companies Act 1890, sec. 131:-"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." This clearly implies that if the Court is of opinion that the rights of the petitioning creditor are not prejudiced the prior voluntary winding up should stand. To make the order now asked would be to incur extra costs for no purpose. I feel, however, that there is something behind all this contest, and I therefore propose to make an order which will meet the case. I will make no order as to the compulsory winding up asked for, but order the voluntary winding up to be continued under the supervision of the Court, with liberty to the creditor to make any application he may be advised. I think the petitioning creditor is entitled to his costs, and they ought to be paid out of the assets of the company. The petition will be dismissed so far as it relates to a compulsory order, but a supervision order will be made upon the voluntary winding up. The respondent is to pay the petitioning creditor's costs out of the assets of the company. The liquidator in the voluntary winding up will get his costs out of the assets of the company. Solicitors for the petitioning creditor: Price & Price. Solicitors for the Regent's Park Company: Snowden, Neave & Demaine. R. H. C. |