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Alteration of Forms.
trade may alter forms
71. The forms set forth in the second schedule Board of hereto, or forms as near thereto as circumstances admit, shall be used in all matters to which such in schedule (d). forms refer; the board of trade may from time to time make such alterations in the tables and forms contained in the first schedule hereto, so that it does not increase the amount of fees payable to the registrar in the said schedule mentioned, and in the forms in the second schedule, or make such additions to the last-mentioned forms, as it deems requisite; any such table or form, when altered, shall be published in the London Gazette, and upon such publication being made such table or form shall have the same force as if it were included in the schedule to this act, but no alteration made by the board of trade in the table marked A. contained in the first schedule shall affect any company registered prior to the date of such alteration or repeal, as respects such company, any portion of such table. (d) See 19 & 20 Vict. c. 47, s. 58; 20 & 21 Vict. c. 14, s. 22.
72. Any company under this act may from time Power for to time, by writing under its common seal, agree to companies refer and may refer to arbitration, in accordance matters to with "The Railway Companies Arbitration Act, 1859" (a), any existing or future difference, question or other matter whatsoever in dispute between itself and any other company or person, and the companies parties to the arbitration may delegate to the person or persons to whom the reference is made power to settle any terms or to determine any matter capable of being lawfully settled or determined by the companies themselves, or by the directors or other managing body of such companies.
(a) See this act, post.
73. All the provisions of "The Railway Com- Provisions of panies Arbitration Act, 1859," shall be deemed to 22 & 23 Vict.
c. 59, to
apply to arbitrations between companies and persons in pursuance of this act; and in the construction of such provisions "the companies" shall be deemed to include companies authorized by this act to refer disputes to arbitration (b).
(b) By sect. 162, disputes as to the price of the interest of a dissentient member are to be settled by arbitration, in the mode prescribed by 8 & 9 Vict. c. 16, ss. 128-134; see post, note to sect. 162, where these sections are inserted.
Meaning of contribu. tory (b).
Origin and progress of winding-up acts.
WINDING UP OF COMPANIES AND ASSOCIATIONS
UNDER THIS ACT (a).
74. The term " contributory" shall mean every person liable to contribute to the assets of a company under this act, in the event of the same being wound up it shall also, in all proceedings for determining the persons who are to be deemed contributories, and in all proceedings prior to the final determination of such persons, include any person alleged to be a contributory (c).
(a) See the General Orders as to the mode of proceeding, post. As to companies registered under the Acts 1856, 1858, see post, ss. 176, 177; as to companies registered under this act, but not formed under it or under the acts 1856, 1858, post, ss. 196-198; and as to unregistered companies, post, ss. 199-204.
The first act which provided for the dissolution and winding up of companies was, the 7 & 8 Vict. c. 111 (now repealed), which declared what constituted acts of bankruptcy in the case of joint stock companies, and the mode in which the affairs of such bankrupt companies should be wound up for the benefit of their creditors. In 1848 and 1849, the statutes 11 & 12 Vict. c. 45, and 12 & 13 Vict. c. 108, were passed, for enabling joint stock companies generally to be dissolved and wound up, without the necessity of a suit in chancery, to which all the shareholders must have been parties.
In 1856, the act 19 & 20 Vict. c. 47, was passed, and by the
107th section of that act the acts 7 & 8 Vict. c. 110; 10 & 11 Vict. c. 78, and 18 & 19 Vict. c. 133, were repealed, but such repeal did not take effect with respect to any company completely registered under 7 & 8 Vict. c. 110, until such company had obtained registration under the 19 & 20 Vict. c. 47. By 20 & 21 Vict. c. 14, s. 23, the 107th section of the act 19 & 20 Vict. c. 47, was repealed, and in lieu thereof it was enacted, that the 7 & 8 Vict. c. 110, and the 10 & 11 Vict. c. 78, and the Limited Liability Act, 1855, should be deemed to have been and to remain unrepealed, as to any company which had not obtained registration under 19 & 20 Vict. c. 47, until such company obtained registration under the acts 1856, 1857, but after such time, and not before, should be repealed as to such last-mentioned company, and subject as aforesaid the 7 & 8 Vict. c. 110, 10 & 11 Vict. c. 78, and the Limited Liability Act, 1855, were repealed. By the 108th section of 19 & 20 Vict. c. 47, it was enacted, that the 11 & 12 Vict. c. 45; 12 & 13 Vict. c. 108; 7 & 8 Vict. c. 111, and 8 & 9 Vict. c. 98 (the last relating to winding up companies in Ireland), should not apply to companies registered under the 19 & 20 Vict. c. 47, nor to companies registered nnder 7 & 8 Vict. c. 110, after the date at which they should have obtained registration under the 19 & 20 Vict. c. 47.
By the 109th section of the 19 & 20 Vict. c. 47, it was declared, that no repeal thereby enacted should affect any acts thereby repealed before such repeal came into operation. 2. Any right acquired or liability incurred under any such acts before such repeal came into operation. 3. Any penalty, forfeiture or other punishment incurred or to be incurred in respect of any offence against any such acts committed before such repeal came into operation. 4. Any proceedings to be taken in the prosecution of any order for winding up a company made before such repeal came into operation.
It is to be observed, that the acts 1856, 1857, 19 & 20 Vict. c. 47, 20 & 21 Vict. c. 14, besides repealing most of the previous acts on this subject, consolidated many of the previous provisions, and introduced extensive alterations entirely new.
By 20 & 21 Vict. c. 86, it was declared, that the Joint Stock Companies Acts 1856, 1857, should not be deemed to have repealed the 7 & 8 Vict. c. 110, or any other act respecting companies then formed or thereafter to be formed for carrying on the business of insurance. Hence it followed, that insurance companies established under the last-mentioned act remained subject to the Winding-up Acts, 1848, 1849.
Every insurance company completely registered under the act 7 & 8 Vict. c. 110, was, by the Companies Act, 1862, required to register on or before the 2nd Nov. 1862. See post, s. 209.
After the 2nd Nov., 1862, the last-mentioned acts (inter alia) are repealed. 25 & 26 Vict. c. 89, s. 205. But no repeal
thereby enacted shall affect,-1. Anything done under any acts thereby repealed. 2. The incorporation of any company registered under any act thereby repealed. 3. Any right or privilege acquired or liability incurred under any act thereby repealed. 4. Any penalty, forfeiture or other punishment incurred in respect of any offence against any act thereby repealed. Ib. s. 206. Where, previously to 2nd November, 1862, an order has been made for winding up a company under any acts thereby repealed, or a resolution has been passed for winding up a company voluntarily, such company shall be wound up, in the same manner and with the same incidents as if the Companies Act, 1862, had not passed; and for the purposes of such winding up, such repealed acts shall be deemed to remain in force. 25 & 26 Vict. c. 89, s. 207.
It appears, therefore, that the Companies Act, 1862, has not altogether superseded the Joint Stock Companies Acts, 1856, 1857, and that the necessity of referring to those acts, and the decisions thereon, will still remain of frequent recurrence.
Any partnership, association or company (except railway companies incorporated by act of parliament) consisting of more than seven members, and not registered under the Companies Act, 1862, may be wound up under that act, with certain exceptions and additions. See Part 8 of this act, post, ss. 199-204.
Object of the Before the passing of the winding-up acts before-menwinding-up tioned, courts of equity had no effectual powers to deal with the complicated transactions arising out of the failure of joint stock companies on a large scale. Although the rights of creditors might be enforced at law against the capital of the company and the private property of individual shareholders, there existed no tribunal either at law or in equity which could enforce justice or equality between the members inter se, or which had power to superintend the application of the assets of the company in the discharge of its debts and liabilities.
The intention of the acts for winding up the affairs of joint stock companies was, to put an end to the difficulties which rendered the settlement of the affairs of an unsuccessful company by a suit in chancery nearly impracticable. This was done by abolishing the machinery of bill and answer, with the attendant difficulties with respect to parties, and by substituting a petition as the initiative process. By virtue of those acts every person interested in the company was to be primarily represented by the official manager, and all parties not represented by him, and such parties as were not represented by him, might be brought before the court, by serving a petition on the ideal representative of the company, in the manner prescribed by the acts. The acts, on the order for winding up being made, transferred on petition the whole stock and effects of the company to the official manager, and thus sent the estate into the office of a master in chancery until its abolition, and sub
sequently to the judges' chambers, to be there administered in a way analogous to the mode of administering the estates of deceased persons by their personal representatives. Although the contrivance was simple in principle, and apparently calculated to work well in practice, numerous new and serious evils arose out of the new jurisdiction, which is sufficiently apparent from the extent of litigation upon this subject, and which rendered the further interference of the legislature expedient.
The object of the winding-up acts was in no respect to alter the legal rights or liabilities of any one, but to facilitate the process of liquidation, and not to add to or detract from any existing rights. Re Great North of England Railway Company, Ex parte Carrech, 20 L. J., Ch. 670.
The object of the winding-up acts was to enable the managers of joint-stock companies to wind up the affairs of the company and to compel the shareholders to contribute, but they were not intended in any way to affect the rights of the creditors of such companies. Beardshaw v. Lord Londesborough, 21 L. J., C. P. 17.
The inherent jurisdiction of the Court of Chancery is not taken away by acts giving further remedies without express words for that purpose.
The legislature in providing a remedy under the windingup acts has not excluded the remedy by bill for an account of money received by individuals in respect of shares (after allowing all costs, charges and expenses), and for the distribution of the surplus funds of the company amongst all the shareholders rateably, according to the number of their shares. Clements v. Bowes, 21 L. J., Ch. 306, pp. 309, 310.
The purpose of the winding-up acts was not to make it a matter of course that contributories showing a case to be within the classes of cases enumerated in the 5th section of the act 11 & 12 Vict. c. 45 (see sect. 79 of this act, post), may ask as of right for a winding-up order, without showing that some benefit will accrue to the company from it. A judge's discretion is to be exercised on the question, whether under the peculiar circumstances of the case it is necessary or expedient to make a winding-up order. Where a company was insolvent but an arrangement was pending, by which the admitted debts could be cleared by a subscription among the shareholders, and there were no other questions except equities between the shareholders, the court refused a winding-up order on the petition of a few shareholders holding very few shares, but left the parties to seek justice in the ordinary course of the court. Ex parte Wise, 1 Drew. 465.
A bill was filed to wind up the affairs of a banking company, on the ground of the personal misconduct of the directors. The defendants then obtained a winding-up order, although such order was opposed by the plaintiffs in the suit.