Scottish Court of Session Decisions

The Companies (Consolidation) Act 1908 enacts, section 188, sub-section (1), that the liquidator in a voluntary winding-up shall, within seven days of his appointment, call a meeting of the creditors. Sub-section (2)—“At the meeting to be held in pursuance of the foregoing provisions of this section the creditors shall determine whether an application shall be made to the Court for the appointment of … a committee of inspection, and if the creditors so resolve, an application may be made accordingly to the Court at any time, not later than fourteen days after the date of the meeting, by any creditor appointed for the purpose at the meeting.” Section 193—“ Power to Apply to Court (1) Where a company is being wound up voluntarily the liquidator or any contributory or creditor may apply to the Court to determine any question arising in the winding-up, or to exercise, as respects the enforcing of calls or any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court.”

Eric Portlock, F.C.A., 186 Bishopsgate, London, petitioner, liquidator of the Clyde Marine Insurance Company, Limited, the registered office of which was in Scotland, presented a petition for the appointment of a committee of inspection in the voluntary liquidation of the company.

The petition set forth, inter alia—“That in terms of section 188 of the Companies Consolidation Act 1908 the petitioner duly convened a meeting of the creditors of the company to be held within the hall of the Institute of Chartered Accountants, Moorgate Place, London, E.C., on the 21st January 1921. The meeting was largely attended, and the following resolution was passed:—‘Proposed by Pickford, Watson, & Hampton, Limited, seconded by Dawson Brothers, that an application be made to the Court for the appointment of Mr Walter F. Wiseman, Mr S. A. Tokeley, and Mr Maurice Diaz as a committee of inspection to act with Mr Eric Portlock as liquidator, and that Messrs Pickford, Watson, & Hampton, Limited, be appointed to make the application. That after the meeting of creditors a copy of the resolution was handed to the representative of Pickford, Watson, & Hampton, Limited, who was asked whether he proposed to instruct the liquidator's solicitors. He replied that he presumed his company would make the application to the Court through their own solicitors. In terms of sub-section (2) of section 188 of the Companies Consolidation Act 1908 the application to the Court is to be made by the creditor appointed for the purpose at the meeting not later than fourteen days after the date of the meeting. By an oversight Pickford, Watson, & Hampton, Limited, omitted to instruct their solicitors, and the fourteen days have elapsed.… There is no special provision in the Companies Acts for proceedings being taken by any other creditor in circumstances such as have arisen in the present case. Nor is there a provision for convening another meeting to start proceedings de novo. The liquidator is anxious to take the creditors along with him in the winding-up of the company, and has indicated to the three creditors whose representatives were nominated in the resolution that he was prepared to act with them, but a question has arisen as to the desirability of the committee of inspection acting without being formally appointed. In these circumstances the petitioner respectfully moves the Court in the exercise of their powers under section 193 of the Companies Consolidation Act 1908, or alternatively, in the exercise of their nobile officium, to appoint the said Walter Frederick Wiseman, Sidney Allison Tokeley, and Maurice Diaz to be the committee of inspection in the voluntary liquidation of the Clyde Marine Insurance Company, Limited.”

On 5th March 1921, in the Single Bills of the First Division, counsel for the petitioner was heard. The following cases were referred to:— Robertson, 1909 S.C. 444, 46 S.L.R. 356; Marlow, 1912 S.C. 625, 49 S.L.R. 464.

The opinion of the Court (which consisted of the Lord President, Lord Mackenzie, and Lord Skerrington) was delivered by the Lord President.