Scottish Court of Session Decisions

At advising—

Lord President—This is a note presented under the 101st section of the Companies Act of 1862 by the liquidators of the Benhar Coal Company for payment of what may be termed directors' calls—that is to say, calls made prior to the commencement of the liquidation, and the suggestion made to us on the part of the liquidators is, that decree should be granted without any intimation or notice to the contributories, exactly in the same way as in cases under the 121st section. There is, however, a very material difference between such cases and the present. The decree under the 121st section is to be pronounced against the contributories “in the same way and to the same effect as if they had severally consented to registration for execution, on a charge of six days, of a legal obligation to pay such calls and interest, and such decree may be extracted immediately, and no suspension thereof shall be competent except on caution or consignation, unless with the special leave of the Court or the Lord Ordinary.” Now, under that section it was held by both Divisions of the Court in the case of Lumsden that it was not necessary to give any notice or intimation to the contributory, and a strong opinion was expressed that even if the contributory appeared he could not be listened to, because of the very peculiar terms of the 121st section. But the section under which we are here is very different. It provides—“The Court may at any time after making an order for winding up the company make an order on any contributory for the time being settled on the list of contributories, directing payment to be made, in manner in the said order mentioned, of any moneys due from him or from the estate of the person whom he represents to the company, exclusive of any moneys which he or the estate of the person whom he represents may be liable to contribute by virtue of any call made or to be made by the Court in pursuance of this part of this Act; and it may, in making such order, when the company is not limited, allow to such contributory by way of set-off any moneys due to him or the estate which he represents from the company on any independent dealing or contract with the company, but not any moneys due to him as a member of the company in respect of any dividend or profit: Provided that when all the creditors of any company, whether limited or unlimited, are paid in full, any moneys due on any account whatever to any contributory from the company may be allowed to him by way of set-off against any subsequent call or calls.” These two sections were brought under the notice of the Court and contrasted in the case of Mitchell in 1863. There the petition, which was in a voluntary liquidation, was presented under the 121st section for payment of directors' calls, but it was very clearly pointed out that the 121st section did not apply to calls of that class at all, and in consequence the petition, having been presented under the wrong section, was refused as incompetent. The case of Mitchell also shows that the decree to be pronounced by the Court under the 101st section is not the same in kind as a decree for calls under the 121st section. The 101st section provides a summary process for obtaining payment of an ordinary debt, but a decree under it is not declared to be equivalent to a decree of registration for execution. It appears to me that the parties against whom the liquidators desire to have decree are entitled to appear and to have an opportunity of stating any objections which they may have to the liquidators' claims. I do not see that they are in any way shut out from that privilege. Indeed the statute itself contemplates that the plea of compensation may be stated as an answer to the liquidators' demands. No doubt there is nothing here to suggest such an answer, but the provisions of the section with reference to compensation appear to me sufficiently

Page: 559↓