Scottish Court of Session Decisions

Now when petitions are presented to the Inner House in the vacation they are boxed and they automatically appear in the Single Bills on the first day of session; and upon that automatic enrolment of a petition such as this, it is quite competent and is the usual practice for the liquidator, or those acting for him, to appear and to crave a remit to one of the Lords Ordinary. But in this case the company and the liquidator present a note, and the note contains three craves. They crave a confirmation of the appointment of Mr Yule as liquidator; they crave a confirmation of a certain committee which was appointed by the shareholders, with certain added members appointed by the creditors, to advise the liquidator; and the third crave is for a remit to the Lord Ordinary.

So far as the remit to the Lord Ordinary is concerned, it is evident from what I have already said that the note is unnecessary, and is therefore really only a multiplying of expense which we have always tried to avoid. So far as the other two craves are concerned, I do not think that the Court ought to entertain either of them. It is true that there may be found interlocutors in past processes where such a thing has been done as the confirming of a liquidator in a voluntary liquidation, but there is no provision for it in the statute, and the instances given to us are not very recent, and I cannot help thinking that they occurred per incuriam. In the case quoted to us the real contest was upon quite a different matter, and I cannot help thinking that that confirmation was inserted in the interlocutor because nobody objected.

When a voluntary liquidation is continued under the supervision of the Court, the Court takes the voluntary liquidation as it finds it, but puts it under supervision. The effect of putting it under the supervision of the Court is that the liquidator, who before was not an officer of the Court, becomes an officer of the Court. If anyone objects to the person who has been appointed as liquidator under the voluntary winding-up he can come to the Court and say so, and your Lordships are exceedingly familiar with such discussions. But nobody comes and says so here, and anything in the nature of a confirmation seems to me quite unnecessary. The liquidator is there, and as such he is put under the supervision of the Court.

Now as regards the joint committee of creditors and shareholders, there is no provision in the statute for the appointment of any such committee. I am rather tempted to suppose, from the way in which the creditors' representatives were added, that there was a floating idea in the minds of those concerned that they were doing something under the provisions of section 188 of the statute (8 Edw. VII, cap. 69). But they certainly were not. Section 188 of the statute provides for the possibility of creditors resolving to approach the Court to appoint a body called the committee of inspection. But a committee of inspection is a very different thing from the class of committee you have got here, and a committee of inspection, as will be found from a perusal of other sections of the statute, has very particular statutory powers. The committee here is a committee composed partly upon appointment by the shareholders alone and partly of members added by the creditors, and is a committee meant to approach the liquidator for conference and advice.

I am not saying anything against the appointment of such a committee. If the creditors and shareholders choose to appoint a committee to confer with the liquidator I do not see why they should not do so, just as any private creditor might arrange that he should appoint his law agent to go and see the liquidator about his interests, but I do not think we as a Court can have anything to do with that. There is no provision in the statute for it, and that is probably enough. But, quite apart from that, we do not know anything about this committee, and I do not think we can be asked to in any way give our imprimatur to the appointment of such a committee. Such a committee will probably, inasmuch as they represent existing shareholders, have a locus standi to come to us and complain of anything that the liquidator, who is now under our supervision, may propose to do, but I do not think that we have anything to do with the appointment of such a committee.

Accordingly, upon the whole matter, I am of opinion that this note ought to be refused in all its branches as unnecessary.

Lord Kinnear—I agree.

Lord Johnston—I agree with your Lord-ship. But I should like to add that in my opinion an ex parte application, after a voluntary liquidation is placed under supervision, for the confirmation of the voluntary liquidator, is quite improper. It may be that where there is a contest as to whether the liquidation to be placed under supervision shall be continued under the voluntary liquidator selected, or whether he is to be superseded or to have another liquidator appointed to act along with him, and where the Court has causa cognita come to the conclusion that it is proper to continue the liquidation under the voluntary liquidator who has been selected, it may possibly be convenient that the Court should, in so deciding, formally confirm his appointment, although personally I think that this is unnecessary, for the result of our judgment rejecting the counter proposal would in itself be a confirmation of the voluntary liquidator's appointment. But to make an entirely ex parte application for confirmation seems to me to be entirely out of order, because

Page: 21↓