Scottish Court of Session Decisions

The Companies Act 1862 (25 and 26 Vict. cap. 89), sec. 12, provides—“Where an order, interlocutor, or decree has been made in Scotland for winding up a company by the Court, it shall be competent to the Court in Scotland during session, and to the Lord Ordinary on the Bills during vacation, on production by the liquidators of a list certified by them of the names of the contributories liable in payment of any calls which they may wish to enforce, and of the amount due by each contributory respectively and of the date the same became due, to pronounce forthwith a decree against such contributories for payment of the sums so certified to be due by each of them respectively, with interest from the said date till payment at the rate of £5 per centum per annum 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 special leave of the Court or Lord Ordinary.” “124. Re-hearings of and appeals from any order or decision made or given in the matter of the winding-up of a company by any Court having jurisdiction under this Act, may be had in the same manner and subject to the same conditions in and subject to which appeals may be had from any order or decision of the same Court in cases within its ordinary jurisdiction, subject to this restriction, that no such re-hearing or appeal shall be heard unless notice of the same is given within three weeks after any order complained of has been made in manner in which notices of appeal are ordinarily given according to the practice of the Court appealed from.”

The Companies Act 1886 (49 Vict. cap. 23), sec. 6, provides—“Where the Court makes a winding-up or a supervision order, or at any time thereafter, it shall be lawful for the Court in either Division thereof, if it thinks fit, to direct all subsequent proceedings in the winding-up to be taken before one of the permanent Lords Ordinary and to remit the winding-up to him accordingly, and thereupon such Lord Ordinary shall, for the purposes of winding-up, be deemed to be ‘the Court’ within the meaning of the recited Act and this Act, and shall have for the purposes of such winding-up all the jurisdiction and powers of the Court of Session, provided always that all orders or judgments pronounced by such Lord Ordinary shall be subject to review only by reclaiming-note in common form, presented (notwithstanding the terms of section 124 of the Companies Act 1862) within fourteen days from the date of such order or judgment.”

By interlocutor dated 11th June 1889 the Second Division of the Court of Session ordered the Coustonholm Paper Mills Company to be wound up by the Court under the provisions of the Companies Acts 1862–1886. They appointed John Maclay Murray and Frank Young Henderson to be official liquidators of the company, and appointed all subsequent proceedings in the winding-up to be taken before Lord Kinnear, Ordinary. The liquidators entered upon the duties of their office on 3rd July 1889.

Upon 14th May 1890 the liquidators presented a note to Lord Kinnear for settlement of a list of contributories, and upon 2nd March 1891 the liquidators presented a similar note to Lord Stormonth Darling (who succeeded Lord Kinnear). On 3rd March 1891 his Lordship pronounced an interlocutor granting the prayer of the note.

Alexander D. Stocker, May Place, Wolstanton, Stoke-on-Trent, was entered on these lists as the holder of eight shares with an amount unpaid on them of £80, being

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the whole value of the shares. Although aware of this he made no objection. Upon 1st April 1891 Lord Wellwood, as Lord Ordinary officiating on the Bills, pronounced an interlocutor making a call upon each of the contributories mentioned in the list, and ordered payment of the call to the official liquidators.

Upon 11th May 1891 Stocker presented a petition to the Lord Ordinary. He denied that he ever was a shareholder in the company or that he ever applied, for shares or agreed to become a shareholder therein, and he prayed the Court to ordain the liquidators to rectify the register of the members and list of contributories of the company by removing therefrom his name as holder of the said shares.

The liquidators lodged answers, in which they averred that Stocker was a creditor of Law, the original proprietor of the paper mills, and the vendor to the company; that he had agreed to take payment of Law's debt to him in shares of the company, for which he gave no consideration; that the ten shares of which he stood as owner in the list of contributories were allotted to him; and that after that he was treated as a member of the company. Intimation of the call was sent to him but he took no notice of it.

Upon 17th July 1891 the Lord Ordinary pronounced this interlocutor:—“The Lord Ordinary having heard counsel and considered the petition for Alexander D. Stocker, No. 499 of process, and answers for the liquidators, No. 503 of process, Repels the defence of the liquidators that the petitioner is too late; allows the parties a proof of their averments,” &c.

The liquidators reclaimed, and argued—This petition to the Lord Ordinary was presented too late. The list of contributories had been settled and an order to pay the calls made upon the shareholders. It was admitted that settling aright the list of contributories did not also settle the register of members, but the petitioner ought to have brought a suspension of the charge for payment of the call when it was made. It was admitted that diligence had not yet been done upon the decree ordering payment. The petitioner stood upon the provisions of the Companies Act 1862, but these provisions had been altered by the Act of 1886, and Stocker could not now proceed by petition to have the register rectified. He ought to have appeared at the time the list of contributories was to be settled—and proper intimation of that time was made to him—and objected to his name being put upon the list, but he had not adopted that course.

The respondent argued—The petitioner had taken the only course that was open to him. Suspension of the decree for payment of the call could not act as rectification of the register, and he would still be a partner in the company. The Act of 1862 provided a means of getting the register altered, and the Act of 1886 had not altered that mode of procedure, it merely made the Lord Ordinary the Court to which the petition was to be presented instead of the Division. Mere delay in bringing his petition could not prejudice the case— In re Alexandra Park Company ( Hart's case), July 16, 1868, L.R., 6 Eq. 512.

At advising—