Scottish Court of Session Decisions

The Companies (Consolidation) Act 1908 (8 Edw. VII, cap. 69) enacts:—Section 129—“A company may be wound up by the Court, … (v) if the company is unable to pay its debts.…” Section 130—“A company shall be deemed to be unable to pay its debts—(iii) if, in Scotland, the induciæ of a charge for payment on an extract decree or an extract registered bond or an extract registered protest have expired without payment being made; or (iv) if it is proved to the satisfaction of the Court that the company is unable to pay its debts; and in determining whether a company is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the company.”

On 3rd October 1912 James Gandy, assistant-registrar, Neath, presented a

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petition under the Companies (Consolidation) Act 1908 for the winding-up by the Court of W. M. Mollison & Company, Limited, carrying on business as lithograpic printers at Anniesland, Glasgow.

The petition (as amended at the bar) stated—“That the said company is a private company with a nominal capital of £15,000, divided into 5000 6 per cent. cumulative preference shares of £1 each, and 10,000 ordinary shares of £1 each. Of these shares there have been issued 3880 preference shares, of which 3660 have been fully paid in cash, and 220 have been issued as fully paid up otherwise than in cash, and 4080 ordinary shares, of which 3750 have been fully paid in cash, and 330 upon which 10s. per share has been paid. That the petitioner is a creditor of the said company to the extent of £50, 12s. 3d., with interest thereon from 7th July 1912 to date. The said sum is due by the company to the petitioner as holder of a bill, dated 4th June 1912, for £50,12s. 3d., payable one month after date, and drawn by R. S. Griffiths on, and accepted by, the said company.… That the said company is unable to pay its debts. That the said bill for £50, 12s. 3d. was duly presented for payment and was dishonoured. On 10th July 1912 the petitioner's solicitors wrote to the said company demanding payment of the said bill, and on 12th July the company's solicitor replied admitting that the company was unable to meet the bill, and asking for delay to enable the company to take steps to secure the payment. A correspondence then ensued, and continued until 23rd September 1912, in which the petitioner repeatedly asked for payment, and the company repeatedly promised payment in a few days when certain arrangements had been completed. No arrangements have been made to enable the company to meet its liabilities, and the said bill still remains unpaid. The said bill and correspondence are produced herewith. That in these circumstances the petitioner humbly submits that the said company ought now to be wound up by the Court, and that an official liquidator should be appointed for that purpose.”

Argued for petitioner— Esto that the bill of which the petitioner was the holder had not been protested, there was sufficient evidence in the correspondence that this company was unable to pay its debts. To require protestation in these circumstances would be to put the petitioner to unnecessary expense, expense which he was not likely to recover from the company.