Scottish Court of Session Decisions

At a meeting of the shareholders of the Scottish West Australian Land and Exploration Syndicate, Limited, held in March 1896, it was resolved to wind up the company voluntarily, and Mr Andrew Gladstone was appointed liquidator.

A petition was presented by the liquidator against Mr William M'Callum, secretary of the company, craving the Court to ordain the respondent “to deliver forthwith to the petitioner as liquidator foresaid the minute-book” of the company, “with-out prejudice to any lien competent to him.” The application was presented under secs. 100 and 138 of the Companies Act 1862. Sec. 100 provides, inter alia—“The Court may at any time after making an order for winding up a company require any … agent or officer of the company to deliver forthwith, or within any such time as the Court directs, into the hands of the official

Page: 619↓

liquidator, any sum or balance, books, papers, estate, or effects which happen to be in his hands for the time being, and to which the company is prima facie entitled.” Sec. 138 empowers the liquidator or contributories of a company which is being voluntarily wound up to apply to the Court “to determine any question arising in the matter of such winding up, or to exercise as respects the enforcing of calls, or in respect of any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court; and the Court, if satisfied that the determination of such question or the required exercise of power will be just and beneficial, may accede wholly or partially to such application on such terms and subject to such conditions as the Court thinks fit.”

The respondent lodged answers in which he averred that he had acted as secretary to the company till the date of the petitioner's appointment; and that for the services rendered by him to the company there remained due to him the sum of £17, 11s. He offered to give up the minute-book on receiving payment of this debt from the liquidator, and maintained that he was entitled to retain the book till he received payment.

Argued for petitioner—(1) He was entitled to make this application in terms of the two sections of the Companies Act quoted above. These sections, as interpreted by the cases, showed that the Court might interfere for such a purpose as this in voluntary as well as in other windings-up— Rance's case, 1870, 6 Ch. App. 104. (2) The minute-book of a company could not be the subject of a lien. A solicitor had been required to give up the minute-book of a company which had employed him— In re Capital Fire Assurance Company, 1883, 24 Ch. Div. 408. There were similar decisions in the cases of in re South Essex Reclamation Company, 1869, L.R. 4 Chanc. App. 215, and Engel v. South Metropolitan Brewing Company, 1892, L.R. Chanc. i., 442.

Argued for respondent—(1) The petition was not warranted by the sections of the Companies Act founded upon by the petitioner. Sec. 138 did not give the Court jurisdiction, in a merely voluntary liquidation in which creditors were unrepresented, to interpose between the company and the common law right of creditors to enforce payment of their debts— Sherrard v. Gardner, March 10, 1876, 3 R. 577; British Canadian Lumber Company, December 3, 1886, 14 R. 160. Sec. 100 only related to books or papers to which the company was prima facie entitled, and did not extend to a case like the present, where the respondent was prima facie entitled to retain the minute-book. In any view, the Court must be satisfied that it would be equitable to grant the application, and should only grant it subject to the rights of the respondent. (2) The minute-book had come into his hands lawfully in the course of his employment and he was entitled to retain it until his counter obligation under the contract of employment was fulfilled— Meikle & Wilson v. Pollard, November 6, 1880, 8 R. 69; Robertson v. Ross, November 17, 1887, 15 R. 67.