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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Champdany Jute Co., Ltd Petitioners [1923] ScotLR 209 (09 January 1923) URL: http://www.bailii.org/scot/cases/ScotCS/1923/61SLR0209.html Cite as: [1923] SLR 209, [1923] ScotLR 209 |
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Page: 209↓
In a petition under the Companies (Consolidation) Act 1908, section 223, to have the dissolution of a company declared void for the purpose of enabling the company to receive repayment from the Inland Revenue of excess profits duty, and to authorise the former liquidator to receive the money and grant a receipt therefor, the Court, after the prayer of the petition had been amended by deletion of the words specifying the purpose for which the voidance of the dissolution was craved, declared the dissolution to have been void.
The Companies (Consolidation) Act 1908 (8 Edw. VII, cap 69), section 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.”
The Champdany Jute Company, Limited, incorporated under the Companies Acts 1862 to 1867, in liquidation, and James Finlay Muir, Glasgow, the sole liquidator, petitioners, presented a petition craving the Court to declare the dissolution of the company to have been void “ for the purpose of the authority hereinafter mentioned being exercised, and to authorise the petitioner James Finlay Muir, as surviving liquidator of the said company, to receive payment of the sum of £6026, 1s. and to grant receipt therefor.”
The company, after a voluntary liquidadation, was dissolved on 12th July 1922.
The petition was duly intimated on the walls and in the minute book and served upon the right Hon. William Watson, K.C., his Majesty's advocate, as representing the Crown. no answers were lodged. Thereafter a remit was made to Irvine R. Stirling, Esq., S.S.C., to inquire into the facts and circumstances and to report.
In his report Mr Stirling stated—“On 1st October 1923 there was received at the office formerly occupied by the company a letter from the Comptroller of Inland Revenue intimating that a sum of £8914 had been certified as repayable to the company by the Inland Revenue in respect of excess profits duty, but that from that sum there fell to be deducted a sum of £2887, 19s., being arrears of income tax and corporation
Page: 210↓
profits tax due by them to the Inland Revenue, leaving a nett sum due and payable by the Inland Revenue to the company of £6026, 1s. The reporter has called for an explanation why the liquidators closed the liquidation without taking into account the claim for repayment of excess profits duty, and it has been explained to him that while under the Finance Act 1921 (section 35) seven accounting periods, or 84 months, had to be taken for excess profits duty purposes, the liquidators had assumed that these periods terminated on the 31st day of March 1921—the date of the closing of the company's financial year—whereas they did not terminate until the 30th day of April 1921, thus leaving one month to be accounted for, (and it is in respect of this month that the present sum of £6026, 1s. falls to be repaid by the Inland Revenue to the liquidator. The company having been dissolved the petitioners are not in a position to give an effectual receipt to the Inland Revenue for the said sum. The present application is accordingly brought under section 223 of the Companies (Consolidation) Act 1908 to have the dissolution of the company declared void for the purpose of authorising the petitioner James Finlay Muir to receive repayment of the said sum of £6026, 1s.” At the hearing in the Single Bills counsel for the petitioners, on the suggestion of the Court, moved their Lordships to allow the petition to be amended by deleting from the prayer the words quoted above in italics and to grant the prayer of the petition.
The reporter explains that the possibility of a repayment had not been foreseen owing to a misapprehension on the part of the company as to the true closing date of the accounting periods under section 35 of the Finance Act 1921. The case thus falls within section 223 of the Companies (Consolidation) Act 1908. The liquidation was a voluntary one, and, as it happens, the liquidator appointed by the shareholders is still surviving. Besides asking that the dissolution shall be declared to have been void, the prayer goes on to crave authority to the liquidator (who, as I have said, happens to survive) to receive the money and grant a receipt therefor. There is no warrant for this crave in the Act. I understand a similar crave has sometimes been granted in petitions of this kind under similar circumstances. But section 223 itself defines the only statutory consequences of the dissolution being declared void, namely—“thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.” It will be for the petitioners to consider what are the rights and powers of the liquidator consequent on the voidance of the dissolution.
We shall grant the prayer, as amended, to declare the dissolution to have been void.
The Court allowed the petition to be amended as proposed and declared the dissolution of the company to have been void.
Counsel for the Petitioners— Russell. Agents— J. & J. Ross, W.S.