Scottish Court of Session Decisions

The Companies (Consolidation) Act 1908 (8 Edw. VII, cap. 69) enacts—Section 139—“ Commencement of Winding-up by Court—A winding-up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding-up.” Section 205—“ Avoidance of Transfers, &c., after Commencement of Winding-up—… (2) In the case of a winding-up by … the court, every disposition of the property (including things in action) of the company, and every transfer of shares, or alteration in the status of its members, made after the commencement of the winding-up, shall, unless the court otherwise orders, be void.”

The Surma Valley Saw Mills, Limited, petitioners, on 7th November 1916 presented

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a petition, based on a special resolution of the company duly confirmed, craving an order for the winding up of the company by the Court.

The petition stated—“… There has for some time been considerable friction in the company as to the conduct of its business. This friction has seriously impaired the proper conduct of the business and has threatened, and still threatens, to ruin the prospects of continuing successfully to carry on the business of the company. In consequence of this friction, on 2nd October 1916 a requisition was addressed to the secretary of the company by Mr James D. Mackintosh, a shareholder in the company, requesting the secretary to convene an extraordinary general meeting of the company in terms of section 66 of the Companies (Consolidation) Act 1908. The requisition stated that the object of the meeting to be convened was to receive and, if so advised, to pass and confirm the following special resolution, viz.—‘That the company be wound up by the Court.’ …”

On 18th November the petitioners and Mr James D. Mackintosh presented a note, which stated—“… That immediately after the resolution to have the company wound up by the Court had been passed and confirmed the friction caused by the two shareholders, as set forth in the petition, was brought to an end by the purchase from them by the said James Dunbar Mackintosh of their entire holding in the company for the sum of £2400 sterling. That transfers of these shares have now been delivered to the said James Dunbar Mackintosh, and the company and the said James Dunbar Mackintosh are desirous that the said transfers and other four transfers for one share each by shareholders lodged with the company for registration should be duly registered with the consent of the liquidator to be appointed by the Court.… The shares of the said company are fully paid up, and therefore the creditors of the company have no interest in the matter as to who is the holder of these shares, but it is important that the transfers in favour of the said James Dunbar Mackintosh and the other four transfers before mentioned should be. registered.…”—and asked for an order that the six transfers be registered in the register of shareholders with the consent of the liquidator.

On 21st November, in the Single Bills, the petition having been duly intimated and advertised without any answers being lodged, counsel moved that the prayer of the petition and of the note be granted, and in connection with the latter cited Benhar Coal Company, Limited, 1879, 6 R. 706.

The Court pronounced this interlocutor—

“Appoint Mr Malcolm Henderson, C.A., Kilmarnock, to be official liquidator of the said company, in terms of and with the powers conferred by the said Acts, and specially with power to exercise all or any of the powers specified in sections 95, 96, and 97 of the Companies (Consolidation) Act 1908, without the sanction or the intervention of the Court: Appoint the official liquidator to find caution for his actings, intromissions, and management before extract, and decern: Further, having considered the note lodged by the petitioning company and James Dunbar Mackintosh, solicitor, Kilmarnock, craving authority to register the transfer of shares mentioned therein, grant the prayer of the said note, and decern.”