Scottish Court of Session Decisions

On the 7th January 1886 James Halden and others, creditors of the Scottish Heritable Security Company (Limited), in liquidation, presented a petition under the 156th section of the Companies Act 1862, praying the Court to appoint James Romanes, chartered accountant, Edinburgh, liquidator of the said company, to furnish to the petitioners or their agents a list of the creditors of the company, in order that they might convene a meeting of creditors to consider a proposal for reconstruction of the company, and to ordain the liquidator to give to the petitioners, or to such committee as might be appointed by a meeting of creditors, access to the books and papers of the company, and to find the expenses of the petition, procedure thereon of said meetings, and relative procedure, to be expenses in the liquidation; and to authorise the liquidator to pay said expenses out of the funds in his hands, as said expenses might be taxed by the Auditor of Court.

The petition was intimated and served, and answers were lodged for the liquidator, who expressed his readiness to meet the petitioners' views, subject to the approval of the court. on 20th january 1886 the court pronounced this interlocutor:—“the lords having resumed consideration of the petition, with the answers for the liquidator, reserve the question of expenses craved; quoad ultra grant the prayer of the petition, and decern.”

The 156th section of the Companies Act 1856 provides that “Where an order has been made for winding-up a company by the Court or subject to the supervision of the Court, the Court may make such order for the inspection by the creditors and contributories of the company of its books and papers as the Court thinks just, and any books and papers in the possession of the company may be inspected by creditors or contributories in conformity with this order of the Court, but not further or otherwise.”

The liquidator furnished a list of the creditors of the company, and at a meeting of the creditors held on February 26, 1886, a committee was appointed to meet the committee engaged in the proposed reconstruction of the company, and the liquidator, and to report as to the proposal. The committee so appointed issued a report containing certain recommendations as to the future management and realisation of the company's estate, but recommended that the proposed reconstruction be not approved. This report was approved at the adjourned meeting of the depositors held on 26th March 1886, at which the liquidator was present. At that meeting a motion was made to allow £100 to cover expenses incurred by the reconstruction committee, and £10 as outlays for the committee appointed on 26th February, and there being no counter motion it was agreed to remit these motions to the committee of advice now appointed to settle the matter with the liquidator. The liquidator, although not opposed to the payment of these expenses, was of opinion that he was unable to pay them without the authority of the Court, and accordingly James Halden and certain other creditors of the company presented a note to the Court, in which they craved the Court to find the expenses of the petition and procedure thereon, and of said meetings and relative procedure, to be expenses in the said liquidation; and to authorise the liquidator to pay these expenses out of the funds in his hands as liquidator fore-said, as such expenses might be taxed by the Auditor of Court.

At advising—