Scottish Court of Session Decisions

The 142nd section of the Companies Act 1862 (25 and 26 Vict. c. 89) enacts that—“As soon as the affairs of the company are fully wound up the liquidators shall make up an account showing the manner in which such winding-up has been conducted and the property of the company disposed of, and thereupon they shall call a general meeting of the company for the purpose of having the account laid before them, and hearing any explanation that may be given by the liquidators.”… By section 143 of the Act it is provided—“the liquidators shall make a return to the registrar of such meeting having been held, and of the date at which the same was held, and on the expiration of three months from the date of the registration of such return the company shall be deemed to be dissolved.”… Section 165 provides that—“Where in the course of the winding-up of any company under this Act, it appears that any past or present director, manager, official, or other liquidator, or any officer of such company, has misapplied or retained in his own hands, or become liable or accountable for any moneys of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the Court may, on the application of any liquidator,… examine into the conduct of such director, manager, or other officer, and compel him to repay any moneys so misapplied or retained.”…

The Scottish Fluid Beef Company sold its business in 1896, and thereafter went into voluntary liquidation. The final meeting of shareholders of the company, in terms of the 142nd section of the Companies Act 1862, was held on 9th April 1898, and notice thereof was lodged with the Registrar of Joint Stock Companies on 12th April 1898.

On 1st June 1898 a petition was presented by the liquidator under the 165th section for recovery of a sum of £45,000 alleged to have been misapplied by William Wallace Auld, a director of the company. Answers were lodged for Mr Auld in this and another petition presented by the liquidator at the same time, in which the Court was asked “to find that the affairs of the Scottish Fluid Beef Company, Limited, are not fully wound up, and accordingly to suspend the operation of the 143rd section of the Companies Act 1862 in relation to the said company.”

The Court of consent remitted the former petition to Lord Stormonth Darling.

In the latter the respondent argued—The dissolution of a company under section 143 of the Companies Act did not deprive the Court of jurisdiction over such a company under the Act— Crookhaven Mining Co., November 3, 1866, L.R., 3 Eq. 69. The petition was incompetent, and should be dismissed. If the petitioner was entitled to the declarator for which he asked, any number of people might apply for the same thing and table fresh claims, but the Court had no jurisdiction to wind up a company which had been dissolved under section 143, unless the dissolution was fraudulent— Pinto Silver Mining Co., March 12, 1877, L.R., 8 Ch. Div. 273.

Argued for the petitioner—If, as was admitted, the petition which had been remitted to Lord Stormonth Darling was competent, this petition should be dismissed

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as unnecessary. The statute did not provide for the case of a company bona fide wound up, whose affairs were afterwards discovered not to have been fully wound up.