Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> M'Leod (Liquidator of Alexander forrester, Ltd) [1907] ScotLR 393 (21 February 1907)
URL: http://www.bailii.org/scot/cases/ScotCS/1907/44SLR0393.html
Cite as: [1907] ScotLR 393, [1907] SLR 393

[New search] [Printable PDF version] [Help]

SCOTTISH_SLR_Court_of_Session

Page: 393↓

Court of Session Inner House First Division.

(Single Bills.)

Thursday, February 21. 1907.

44 SLR 393

M'Leod (Liquidator of Alexander forrester, Limited).

Subject_1Company
Subject_2Liquidator
Subject_3Caution
Subject_4Bond of “Approved Guarantee Company” Authorised — Premium on Bond Charged against Company's Estate, but to be Considered in Fixing Liquidator's Remuneration — Act of Sederunt 15th July 1904.

Company — Liquidator — Caution — Amount.
Facts:

In a note presented by the liquidator in a liquidation under supervision, the Court authorised the acceptance of a bond of caution by an “approval guarantee company,” i.e., a company approved for the purposes of judicial factories under the Act of Sederunt of 15th July 1904, the premium on such bond to be charged against the liquidation, but such charge to be considered in fixing the liquidator's remuneration.

Where the assets of a company in liquidation amounted to about £6000 the

Court fixed the amount of caution to be found by the liquidator at £3000.

Headnote:

The Act of Sederunt of 15th July 1904, as to the finding of caution in judicial factories and the procedure therein, and as to the remuneration of factors, provides—Sec. 2 ( d) “The Accountant shall, in January yearly, prepare and submit a list of approved guarantee companies for the consideration and approval of the Court.” Sec. 3—“The Accountant of Court shall allow as a charge against the factory estate (1) the premium paid by the factor where a company bond of caution has been accepted, or such part thereof as he deems proper, and (2) the expense of the necessary procedure in obtaining the approval of a bond of caution or the limitation of the amount; but the fact of such charge shall be taken into account by the Accountant of Court in fixing the factor's remuneration.” Sec. 5—“This Act shall not affect the procedure as to bonds of caution in bankruptcy and in the liquidation of public companies.”

On 21st February 1907 John M. M'Leod, C.A., Glasgow, the liquidator of Alexander Forrester, Limited, boot manufacturers, Glasgow, presented a note stating that on 5th February 1907 their Lordships of the First Division had placed the winding up of the company under supervision and appointed him liquidator; that the assets amounted to £5995, 1s. 10d.; and that he was willing to take out a bond of caution with the National Guarantee and Suretyship Association for such sum as the Court might fix. The prayer of the note was “to restrict the caution to be found by the said John M. M'Leod, as liquidator foresaid, to a sum to be fixed by the Court, and to authorise a bond of caution of the National Guarantee and Suretyship Association for that amount to be accepted; and further, to authorise the premium on the said bond of caution to be paid by the liquidator out of the estate of the said company; and further, to direct that the expenses of and in connection with this note shall be expenses in the liquidation …”

Counsel for the liquidator referred to secs. 2 ( d), 3, and 5 of the Act of Sederunt, 15th July 1904, as to the finding of caution in judicial factories, &c., and argued that while the case of a liquidator was not provided for therein, still the analogy between his office and that of a judicial factor rendered the provisions applicable. He further stated that the National Guarantee and Suretyship Association was one of the companies approved of in terms of sec. 2 ( d) of the Act of Sederunt.

Judgment:

Lord President—This note is at the instance of the liquidator recently appointed in the liquidation of Alexander Forrester, Limited, and asks the Court to restrict the caution, and to authorise a bond of caution by a company to be accepted, “and further to authorise the premium on the said bond of caution to be paid by the liquidator out of the estate of” the company, and to direct that the expenses of the note should be expenses in

Page: 394↓

the liquidation. It was admitted that there is no direct authority, but it was urged that there is a strong analogy in the provisions of the Act of Sederunt, 15th July 1904, as to the finding of caution in judicial factories. Section 3 of that Act of Sederunt provides—[ His Lordship read the section]. It seems to me that the analogy is a true one. But both branches of the section are equally analogous. Accordingly, while I move your Lordships to grant the prayer of the note, it is understood that this is done subject to the fact of the charge being taken into account by the Lord Ordinary when he fixes the remuneration of the liquidator.

Lord M'Laren, Lord Kinnear, and Lord Pearson concurred.

The Court pronounced this interlocutor:—

“The Lords having considered the note for John M. M'Leod, the liquidator, … fix £3000 as the amount for which caution shall be found by him, and authorise the clerk to accept a bond for that amount by the National Guarantee and Suretyship Association, Limited: Further authorise the liquidator to charge the premiums payable in respect of such bond against the liquidation, but declaring that such charge shall be taken into account at the fixing of his remuneration as liquidator: Also authorise the expense of said note to be charged against the liquidation…”

Counsel:

Counsel for the Liquidator— Macmillan. Agents— Dove, Lockhart, & Smart, S.S.C.
1907