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Court to adjust rights
ADJUSTING RIGHTS OF CONTRIBUTORIES INTER SE.
When all the creditors of the Company have been paid, and also all the costs of winding up the Company, the rights of the contributories inter se have to be arranged and settled. Accordingly we find that it is provided as follows by sect. 109:
109. The Court shall adjust the rights of the contributories amongst themselves, and distribute any surplus that may remain amongst the parties entitled thereto.
For this purpose the Court has power, by sect. 102, set out in Chapter XII., to make calls.
As before remarked in Chapter XI. various questions may arise between the contributories inter se that cannot as between the contributories and the creditors. The whole body of contributories having, through the officers of the Company, contracted debts in carrying on the Company, it has been held that, except in some few cases, no matter under what circumstances the contributory had been induced to take his shares, he is equally liable with the other contributories to pay the debts, and accordingly he has to pay those debts in common with the others. In the case of an unlimited Company, however, and also in the case of a limited Company where all the unpaid up capital has not been absorbed by the debts, further
ADJUSTING RIGHTS OF CONTRIBUTORIES, ETC. 181
calls may be made for the purpose of adjusting the rights of the contributories inter se, and in such circumstances questions of contract or misrepresentation may be entertained. No case is reported in which such questions have arisen on adjusting the rights of the contributories inter se, but cases have occurred where the Court, under the particular circumstances therein existing, has sanctioned a call on a particular class of shareholders in exclusion of another. (See Chap. XII.)
By the Act of 1862 a greater necessity has arisen for finally adjusting the rights of the contributories inter se, inasmuch as in a limited Company a contributory who happens to be a creditor on an independent contract cannot set off his debt against a call until all the creditors are paid, and consequently after that event a further call must in justice be made to pay such debt or such portion thereof as does not fall to the share of the particular contributory.
It may also happen that calls may be made under the authority of the Act which with the other assets collected are more than sufficient to pay the debts, in which case, and also in the case of the assets alone being more than sufficient to satisfy the creditors, a return has to be made to the contributories. In that event all the contributories who have not paid their calls must either pay the same or be debited therewith in account before taking any part of the return ordered.
Court to stay
STAYING PROCEEDINGS AND TERMINATION OF
The Court has power at any time to stay the proceedings under an order to wind up.
Sect. 89. The Court may at any time after an order has been proceedings. made for winding up a Company, upon the application by motion of any creditor or contributory of the Company, and upon proof to the satisfaction of the Court that all proceedings in relation to such winding up ought to be stayed, make an order staying the same, either altogether or for a limited time, on such terms and subject to such conditions as it deems fit.
The power vested in the Court under this section is entirely discretionary, and every application will depend upon the circumstances of each particular case. (See Table of Cases for some instances where the Court has refused to interfere.) Where an order had been made to stay the proceedings without proper notice, it was held, notwithstanding, that a solicitor or claimant had a right to proceed with the taxation of costs in the matter. (Re Dover, Deal and Cinque Ports Railway Company, Ex parte Hook, 5 De Gex, M. & G. 743.)
A Company which is ordered to be wound up under the Act of 1862 is not thereby dissolved,
but retains its existence as a Company for the purpose of the proceedings; accordingly, when the winding up is completed, an order dissolving the Company has to be made by the Court.
The proceedings for obtaining this order are Proceedings set out in the following rules and sections.
Termination of Winding Up.
Rule 65. Upon the termination of the proceedings in chambers for the winding up of any Company, a balance sheet shall be brought in by the official liquidator of his receipts and payments, and verified by his affidavit; and the official liquidator shall pass his final account, and the balance (if any) due thereon shall be certified. And upon payment of such balance, in such manner as the Court or Judge shall direct, the recognizance entered into by the official liquidator and his sureties may be vacated.
66. When the official liquidator has passed his final account, and the balance (if any) certified to be due thereon has been paid in such manner as the Judge shall direct, a certificate shall be made by the chief clerk, that the affairs of the Company have been completely wound up; and in case the Company has not been already dissolved, the official liquidator shall, immediately after such certificate has become binding, apply to the Judge for an order that the Company be dissolved from the date of such order.
67. When the proceedings for winding up any Company have been completed, the file of proceedings, and the book containing the official liquidator's account, shall be deposited in the Record and Writ Clerks' Office.
Sect. 111. When the affairs of a Company have been completely wound up, the Court shall make an order that the Company be dissolved from the date of such order, and the Company shall be dissolved accordingly.
112. Any order so made shall be reported by the official liquidator to the registrar, who shall make a minute accordingly in his books of the dissolution of the Company.
to obtain order.
113. If the official liquidator makes default in reporting to the registrar, in the case of a Company being wound up not reporting by the Court, the order that the Company be dissolved, he
dissolution of Company.
As to disposal of
books of accounts and documents of the Company.
shall be liable to a penalty not exceeding five pounds for every day during which he is so in default.
155. Where any Company has been wound up under this Act and is about to be dissolved, the books, accounts, and documents of the Company and of the liquidators may be disposed of in the following way; that is to say, where the Company has been wound up by or subject to the supervision of the Court, in such way as the Court directs, and where the Company has been wound up voluntarily, in such way as the Company by an extraordinary resolution directs; but after the lapse of five years from the date of such dissolution, no responsibility shall rest on the Company, or the liquidators, or any one to whom the custody of such books, accounts, and documents has been committed, by reason that the same, or any of them, cannot be made forthcoming to any party or parties claiming to be interested
The practice on passing the official liquidator's account will be found in Chapter X., and the certificate of the chief clerk that all the affairs of the Company have been wound up will be prepared and completed in the same way as the certificate on the list of contributories. (See Chap. XI.)
The order dissolving the Company may be made in chambers. It has to be reported by the official liquidator to the Registrar of Joint Stock Companies under a penalty of 5l. per diem. (See Form of Certificate of Chief Clerk and Order.)
Before the Company is dissolved the books, accounts and documents belonging thereto have to be disposed of in manner set out in sect. 155.