Scottish Court of Session Decisions

At a meeting of the shareholders of Pattisons Limited, a company having its registered office in Scotland, held on 19th January 1899, it was resolved that the company be wound up voluntarily, and John Scott Tait, C.A., Edinburgh, and Robert Alexander Murray, C.A., Glasgow, were appointed liquidators.

The following resolution was also passed:—“That a committee of shareholders and creditors be appointed to advise with the liquidators, the members of such committee being to be entitled to remuneration for their services out of the liquidation assets.”

The following gentlemen were appointed as members of the committee of advice:—James Ainslie, distiller, Leith, Robert Sclater Gray, wine merchant, Leith, Arthur Sanderson, wine merchant, Leith, Thomas Aitken, 5 Grosvenor Crescent, Edinburgh, James Wight, 70 Dundee Street, Edinburgh, and Robert Nicol Robertson, 15 Dudley Avenue, Leith. Of these Mr Gray and Mr Robertson subsequently resigned office.

On February 4th 1899, on the petition of the liquidators, the liquidation was placed under the supervision of the Court.

On July 7th 1902 the liquidators presented a note praying, inter alia, for authority to pay such sum as their Lordships should think fit as the remuneration of the committee of advice.

In this note, after stating the realisation of the company's assets and payment of dividends, they set forth that—“At a meeting of the liquidators, the committee of advice, and the law-agents in the liquidation, held on 8th May 1902, it was decided that the remuneration of the committee be £1500, to be divided amongst themselves as the members shall determine—the liquidators to bring this matter before the Court for its approval.”

By section 9 of the Companies (Winding-up) Act 1890 (53 and 54 Vict. c. 63), provisions are made for the regulation of a committee of inspection in the winding-up of a company.

By section 31, sub-section 3, of the Act it is provided—“This Act shall not apply to any company unless the registered office of the company is situate in England or Wales.

Section 26, sub-section 1, enacts—“The Lord Chancellor may. with the concurrence of the President of the Board of Trade, make general rules for carrying into effect the objects of the Act.” Rule 160 of the rules made under the authority of section 26 provides—“Where the sanction of the Court to a payment to a member of the committee of inspection for services rendered by him in connection with the administration of the company's assets is obtained, the order of the Court shall specify the nature of the services, and shall only be given when the service performed is of a special nature. No payment shall under any circumstances be allowed to a member of a committee for services rendered by him in the discharge of the duties attaching to his office as a member of such committee.”

The Lord Ordinary ( Stormonth Darling) verbally reported the case to the First Division. In doing so he referred to the sections of the Companies (Winding-up) Act 1890, and to rule 160 quoted above, and also to Brewis (Liquidator of Scottish Heritages Company, Limited), Petitioner, December 15, 1899, 37 S.L.R. 669.

Counsel for the committee of advice submitted that this was a case in which the committee had greatly assisted the liquidation, and had acted as experts in the valuation of stock, and were therefore entitled to remuneration. As the Companies Winding-up Act 1890 and the English rules passed under it did not apply to a company registered in Scotland, the matter was entirely in the hands of the Court.