Scottish Court of Session Decisions

The Companies Consolidation Act 1908 (8 Edw. VII, c. 79), sec. 149, (5), enacts—“In a winding-up in Scotland … the Court may determine whether any and what security is to be given by a liquidator on his appointment.”

On 3rd February 1910 Andrew R. Gray, 9 Lonsdale Terrace, Edinburgh, and Lewis Bilton, W.S., 16 Hope Street, Edinburgh, contributories of the Scottish Amicable Heritable Securities Association, Limited (in liquidation), and acting members of the Committee of Advice thereof, with consents, presented a note to the First Division under sections 199 to 204 of the Companies (Consolidation) Act 1908 (8 Edw. VII, cap. 69), for the appointment of a new liquidator of the Association in room of the deceased J. A. Robertson Durham, the former liquidator thereof. The petition stated that the Association having resolved on a voluntary winding-up the late Mr Robertson Durham was duly appointed liquidator; that thereafter the liquidation was placed under the supervision of the Court; that during his tenure of office the

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liquidator had called up all the capital of the company and realised nearly all its assets, but that at the date of his death, 2nd December 1909, there still remained certain properties unrealised; and that accordingly a new liquidator required to be appointed to realise and distribute the remaining assets. On 23rd February 1910 the Court appointed Mr J. Stuart Gowans, C.A., Edinburgh, liquidator in room of Mr Robertson Durham, “he always finding caution before extract.”

On 26th February the petitioners presented a note to the Lord President craving his Lordship to move the Court to vary the interlocutor of 23rd February by omitting the words “he always finding caution before extract,” and to allow the liquidator to extract his appointment without finding caution.

The note stated—“The liquidation to which this application relates is a voluntary winding-up subject to the supervision of the Court. The Companies (Consolidation) Act 1908 (8 Edw. VII, cap. 69) contains no enactment that a liquidator in a voluntary liquidation must find caution, and the question whether a liquidator shall be required to do so is expressly left, in terms of sec. 149, sub-sec. (5), to the determination of the Court. The late liquidator was not required to find caution.

“In these circumstances the petitioners humbly submit that it is not necessary under the statute for the liquidator to find caution before extracting his appointment.”

Argued for petitioners—It was for the Court to say whether any and what security was to be given by a liquidator—Companies (Consolidation) Act 1908 (8 Edw. VII, c. 69), sec. 149 (5). Esto that in Scotland the practice was to ordain the finding of caution, there was no absolute rule, and in England the practice was not uniform. Where in a voluntary winding-up caution had not been required, the Court would not require it from a substituted liquidator after a supervision order had been pronounced—Buckley on Companies (9th ed.) p. 450.