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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Macpherson v. Brown (Liquidator of D. S. Ireland, Ltd) [1898] ScotLR 35_732 (4 June 1898) URL: http://www.bailii.org/scot/cases/ScotCS/1898/35SLR0732.html Cite as: [1898] SLR 35_732, [1898] ScotLR 35_732 |
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Page: 732↓
Company — Winding — up — Voluntary Winding-up — Liquidator — Remuneration of Liquidator — Companies Act 1862 (25 and 26 Vict. cap. 89), secs. 133 (3), 138.
Company — Winding-up — Voluntary Winding-up — Companies Act 1862 (25 and 26 Vict. cap. 89), sec. 141.
Summary application to the Court under section 138 of the Companies Act 1862 is not competent to the creditor of a company in voluntary liquidation, who, though once the liquidator of the company, has ceased to be so, and who, although a contributory, does not seek to make such application in that capacity.
The remuneration of the liquidator of a company in voluntary liquidation is left by sec. 133 (3) of the Companies Act 1862 in the hands of the company, and it is incompetent for the liquidator in such a liquidation to apply directly to the Court to fix the amount of his fee.
Observed ( per L. P. Robertson) that the fact that the Court has in a voluntary liquidation removed a defaulting liquidator and appointed another liquidator in his place does not convert that liquidation into one under supervision of the Court.
Page: 733↓
At an extraordinary general meeting of the company of D. S. Ireland, Limited, held on 28th January 1896, it was resolved that the company be wound up voluntarily, and that Robert Graham Abercrombie, C.A., Glasgow, be appointed liquidator of the company for the purposes of such winding-up, “and that his remuneration be fixed by the directors.” Mr Abercrombie having absconded, the Court on July 7, 1896, upon the petition of certain contributories of the company, removed him from the office of liquidator, and appointed Mr John Lumsden Macpherson, solicitor, St Andrews, to be liquidator in his stead. Mr Macpherson was a contributory of the company.
On 7th August 1897 Mr Macpherson resigned office as liquidator, and on 23rd August Mr C. H. T. Brown, stockbroker, Glasgow, was, upon the petition of a contributory of the company, appointed liquidator.
On 15th April 1898 Mr Macpherson presented a note to the Court craving their Lordships to fix and declare the amount of remuneration to be paid to him as liquidator of the company. He averred that the present liquidator had refused to pay him a just and proper fee for his services, or to refer the determination of the amount thereof to a neutral third party. The application bore to be made in terms of secs. 93 and 138 of the Companies Act 1862.
The liquidator lodged answers, in which he maintained that the note was incompetent and irrelevant.
The Companies Act 1862 (25 and 26 Vict. cap. 89), sec. 93, enacts—“There shall be paid to the official liquidator such salary or remuneration, by way of percentage or otherwise, as the Court may direct.”
Sec. 133—“The following consequences shall ensue upon the voluntary winding-up of a company … (3) The company in general meeting shall appoint such persons or person as it thinks fit to be liquidators or liquidator, and may fix the remuneration to be paid to them or him.”
Sec. 138—“Where a company is being wound up voluntarily the liquidators or any contributory may apply to the Court … to determine any question arising in the matter of such winding-up, or to exercise … all or any of the powers which the Court might exercise if the company were being wound up by the Court.”
Sec. 141 empowers the Court to remove and appoint liquidators in a voluntary winding-up.
Sec. 151 enacts that “in the construction of the provisions whereby the Court is empowered to direct any act or thing to be done to or in favour of the official liquidators, the expression ‘official liquidators’ shall be deemed to mean the liquidators conducting the winding-up subject to the supervision of the Court.”
Argued for the petitioner—The petitioner was entitled to nave the amount of his remuneration fixed by the Court. Section 138 applied to such a question as well as to any other matters of dispute which might arise in course of the liquidation, and it was erroneous to contend that the remuneration of voluntary liquidators was regulated exclusively by section 133 (3). In the Juridical Styles, vol. iii, p. 601, there was a form of petition under section 138 for fixing the fee of a liquidator in a voluntary liquidation. It was said that the terms of Mr Abercrombie's appointment were binding on Mr Macpherson; but there was no express undertaking on the part of the latter to abide by these terms, and he had been appointed liquidator by the Court de piano in Mr Abercrombie's room.— City of Glasgow Bank, Liquidator, July 20, 1880, 7 R. 1196, referred to.
Argued for the liquidator—I. This application was incompetent. (1) Sec. 93 was clearly out of the case, for it applied only to official liquidators, the scope of that term being defined by section 151. Nor was the petitioner entitled to the benefit of section 138, which was reserved for liquidators and contributories. He had ceased to be the liquidator of the company, and though he was actually a contributory, he appeared here solely in the capacity of a creditor. It was not the object of section 138 to enable a creditor in a voluntary liquidation to submit his claim to the jurisdiction of the Court— See Buckley on Companies, on section 138. (2) The question of the remuneration of the liquidator in a voluntary liquidation had been expressly dealt with by section 133 (3), which left the determination thereof in the hands of the company itself. If the company fixed a ridiculously inadequate amount, or declined to fix any amount at all, the liquidator would have his remedy not under section 138 but by an ordinary action. II. The application was irrelevant. Even assuming the petitioner's view on the statute to be correct, the terms of his appointment precluded his appealing to it. The company had duly resolved under section 133 (3) that the liquidator's remuneration should be fixed by the directors. That resolution stated the conditions on which the first liquidator accepted office, and it was equally binding on his successor, though the latter was appointed by the Court.
The first is, that this application is made to the Court by a person who is neither the liquidator nor one of the contributories of the company. He is only an ex-liquidator, that is to say, he resigned office nine months ago, and his successor has been in the saddle ever since. So far, therefore, as remuneration for his services as liquidator is concerned, he has stepped down into the position of a creditor of the company. It is true that he is in fact a shareholder, therefore a contributory; but he is not approaching the Court in the quality or with the interest of a contributory, for the claim he is here to advance is adverse to the interest of the contributories, and accordingly I do not think that his petition
Page: 734↓
Now, when one reads section 138, I think it is pretty plain that this summary mode of getting a dispute settled is in the interest of furthering the liquidation, and the case which we should have to consider is that of a liquidator who, finding the liquidation impeded by a question which admits of settlement, comes to the Court to have the answer given. But that has no application to the case of one who, so far as this question is concerned, is a creditor of the company, and accordingly, while it is quite possible that this question might have been submitted by the liquidator for the decision of the Court, it by no means follows that his opponent in that question has the same summary remedy. Therefore I think that the argument presented by Mr Salvesen on this head is sound, and that the petition is vulnerable and defective because the person presenting it is not a legitimate applicant within the section.
But there is another objection which is perhaps still more cogent, and it is this—this is a voluntary liquidation. It is not a judicial winding-up, nor yet a voluntary winding-up under the supervision of the Court. The circumstance or incident that the Court was approached to remove a defaulting liquidator and put another in his place does not remove the winding-up from the category of a voluntary winding-up, or bring the Court into a more intimate relation with the winding-up in other respects. Now, the Act of Parliament is distinct as to the normal way in which the remuneration of such a liquidator is to be fixed. It is a matter for the company. In the present instance there is a question whether the company has not already fixed a scale of remuneration which is binding on this liquidator. But it seems to me that, irrespective of the question whether this gentleman was or was not bound by the terms of his predecessor's appointment, he cannot step past the company and come straight to the Court to determine a question which in the ordinary case is placed in the hands of the company itself, and which the company says it has already settled, or if this be not so is ready to settle. The company itself is extant for such purposes, and I think the applicant has no answer to the objection that it is to the company he must go.
Now, it is said in the third place, as I have already indicated, that this gentleman is subject to the same terms as his predecessor. That is a point upon which I do not think it is necessary to express an opinion. It is a point on which opinion may very well differ, and it seems to me on the two solid grounds — as I venture to think them — which I have already expressed, that our judgment should be to refuse the petition.
On these grounds I agree with your Lordship that this application is incompetent.
The Court refused the note.
Counsel for the Petitioner— J. Wilson— Kemp. Agents— Dove, Lockhart, & Smart, S.S.C.
Counsel for the Respondent— Salvesen— Clyde. Agent— John Martin, L.A.