Scottish Court of Session Decisions

The Companies (Consolidation) Act 1908 (8 Edw. VII, cap. 69), sec. 223 (1), enacts—“Where a company has been dissolved the Court may at any time within two years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company, or by any other person who appears to the Court to be interested, make an order, upon such terms as the Court thinks fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.”

Collins Brothers & Company, Limited, wholesale and export stationers, incorporated under the Companies Acts 1862 to 1900, and having its registered office at No. 4 Bridewell Place, London, and Hugh Allan, publisher, 144 Cathedral Street, Glasgow, petitioners, presented a petition to the First Division of the Court of Session craving the Court to declare the dissolution of a former company of Collins Brothers & Company, Limited, to have been void, and to authorise the said Hugh Allan as liquidator of the former company to grant a conveyance of the property 105 Clarence Street, Sydney, to the petitioners first mentioned.

On 31st December 1887 Collins Brothers & Company, Limited, was incorporated under the Companies Acts 1862 to 1886, with its registered office situated in Scotland. The company was formed to take over and carry on the business of publishers, bookbinders, and stationers previously carried on in Glasgow, Australia, and New Zealand and elsewhere by the firm of Collins Brothers & Company. In the year 1904 it was considered advisable, in the interests

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of the limited company, that it should be incorporated in England, with its registered office there, instead of in Scotland. In this view a provisional agreement, dated 3rd March 1904, was entered into between Hugh Allan, cashier, then of 139 Stirling Road, Glasgow, on behalf of the then existing limited company (hereinafter called “the vendor company), of the one part, and William Collins, publisher and stationer, of 139 Stirling Road, Glasgow, as trustee for a new company proposed to be formed and registered in England (hereinafter called “the new company”), of the other part, whereby the vendor company undertook to sell and the new company undertook to purchase the undertaking of the vendor company, including all lands, buildings, hereditaments, and other assets whatsoever and wheresoever of the vendor company, except its uncalled capital, if any. As part of the consideration for the sale the new company undertook to pay all the vendor company's debts and perform its contracts, engagements, and obligations, and to indemnify it against all actions, proceedings, claims, and demands in respect thereof. Moreover, if within eight weeks from the date of the agreement the vendor company should pass an effective resolution for its voluntary winding-up, the new company undertook to pay all costs, charges, and expenses of and incident to the winding-up and dissolution of the vendor company, and to indemnify it against all actions, proceedings, claims, and demands in respect thereof. Provision was also made for the allotment of shares in the new company. The agreement provided (clause 5) that the new company should, without investigation, objection, or requisition, accept such title as the vendor company had to the several premises agreed to be sold; (clause 6) that the sale and purchase should be completed within twelve months from the date of the agreement; (clause 7) that possession of the premises referred to should be given to the new company on the completion of the sale and purchase; and (clause 8) that the agreement should be conditional on its being ratified by the vendor company and adopted by the new company within six weeks from its date. In pursuance of the scheme set forth in the agreement, the vendor company on 25th April 1904 passed a resolution adopting the agreement, and a further resolution for the voluntary winding-up of the company, and it appointed Mr Hugh Allan, before mentioned, to be liquidator in the winding-up. These resolutions were duly confirmed at an extraordinary general meeting held on 24th May 1904. The new company was thereafter incorporated on 5th July 1904 under the name of Collins Brothers & Company, Limited, with its registered office in London. On 4th October 1904 the statutory meeting of the newly incorporated company was held, at which the agreement was approved and adopted. Thereafter (on 13th October 1905) a meeting of the shareholders of the vendor company, then in liquidation, was held, at which Mr Allan, as liquidator, reported upon the allotment of shares in the new company, and the transference of the property, assets, and liabilities of the vendor company. His report was approved, and was duly filed with the registrar, whose acknowledgment thereof is dated 20th October 1905. The dissolution of the vendor company took effect three months afterwards. Among the assets of the vendor company taken over by the new company was a property situated at No. 105 Clarence Street, Sydney, New South Wales, which the latter company had occupied as owners, and in which its business had been carried on ever since. The property had been mortgaged by the vendor company for a loan of £7500 and this debt was specially undertaken by the new company under its articles of association. In 1915 the loan was called up and a new loan was arranged for. It was then discovered, however, that although the property truly belonged to the new company, no formal title to it had been received from the vendor company. In these circumstances the new company desired to obtain a conveyance which would enable it to create a new mortgage in order to replace the loan which had been called up. The vendor company having been dissolved the liquidator had now no power or authority to grant a conveyance. He was, however, prepared to do so upon being authorised by the Court to that effect, and the present application was accordingly presented by the new company as principal petitioners, Mr Hugh Allan, designed as publisher, 144 Cathedral Street, Glasgow, being conjoined in the application.

The petition was served upon the Lord Advocate as representing the Crown as ultimus hæres. No answers were lodged, and thereafter a remit was made to Sir George M. Paul to inquire into the facts and circumstances and to report.

The reporter after narrating the facts and the procedure reported:—“As more than two years have elapsed since the date of the dissolution of the vendor company advantage cannot be taken of the provisions of the above section (Companies Consolidation Act 1908, sec. 223 (1)), and the application is accordingly made in virtue of your Lordships' nobile officium. … It appears to the reporter that the difficulty is a real one and the application reasonable; and in the whole circumstances he is respectfully of opinion that if your Lordships shall consider that you may exercise the nobile officium of the Court in the present case, you may be pleased to approve of this report and pronounce an interlocutor declaring the dissolution of Collins Brothers & Company, Limited, incorporated in Scotland under the Companies Acts 1862 to 1886 on the 31st day of December 1887, to have been void, for the purpose of allowing the petitioner Hugh Allan, as liquidator of the said company, to grant the conveyance or transfer after mentioned, and authorising him as such liquidator to grant a conveyance or transfer of the Property situated at 105 Clarence Street, sydney, in favour of the petitioners Collins Brothers & Company, Limited, and decerning.”

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The petitioners thereafter moved in the Single Bills for decree in terms of the prayer of the petition, and argued—The Companies (Consolidation) Act 1908 (8 Edw. VII, c. 69), section 223, did not apply, and this was a casus improvisus. The liquidator of a company was in an analogous position to the trustee in a sequestration—Companies Consolidation Act 1908 ( cit.), section 151 (2) ( g) and (6)—and in similar circumstances the Court had exercised its nobile officium to provide a remedy when none was to be found in the Bankruptcy Acts— Northern Heritable Securities Investment Company, Limited v. Whyte, 1888, 16 R. 100, 26 S.L.R. 91; 1891, 18 R. (H.L.) 37, 28 S.L.R. 950; MacDuff v. Baird, 1892, 20 R. 101, 30 S.L.R. 109.

The opinion of the Court was delivered by