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TMI Blog1970 (11) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the court. The former liquidator also moves for an order pursuant to R.S.C. order 12, rule 8, to set aside the writ on the grounds that Mr. de Courcy does not now, and did not when the writ was issued, hold the capacity in which he purported to sue : but Mr. Nicholls, who appeared for the former liquidator, said that he relied primarily not on this claim, which might be met by amendment, but on the application to strike out. By agreement, both motions were called on together, but in the end I decided to deal with the former liquidator's motion first. As will appear, this course resulted in the former director's motion being disposed of as well. The facts are far from simple, and there is a long and complicated history. I do not propose to go into the voluminous facts further than is necessary to reach a conclusion on the motions. The main bone of contention arises from alleged unsecured loans of just under 45,000 made to the Weekly Review Ltd. and of rather under 10,000 made to Ringrone Newspapers Ltd., making a total of a little under 54,500. These debts, it is alleged, were owed by the companies to Mr. de Courcy as trustee for the Grantmesnil Trust (an entity re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor] pay from such assets when recovered the sum of 54,332 to [Mr. de Courcy] (together with interest thereon) on bare trust for the benefit of the fund which made the said advances as may be beneficially now held. (4) An order that thereafter the [former liquidator] proceed with such distribution as may remain to be made." In the course of the argument, it was accepted on all hands that if the claim under the first head failed, the other three heads fell with it. Accordingly, that narrowed down the argument to the true construction of section 283, and in particular section 283(2)( b ) of the Act of 1948 ; and Mr. Nicholls, who has had much experience in these matters, told me that the section was wholly devoid of reported authority. I should add that although Mr. de Courcy appeared in person, he conducted his case, if I may say so, with clarity and skill. It is common ground that if a declaration of solvency fails to satisfy either paragraph ( a ) or paragraph ( b ) of section 283(2), it is a complete nullity : the sub-section says "shall have no effect," and nobody has contended that this means other than what it says. What is in dispute is the meaning of the simple word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delivered, the winding up is to be conducted as a "members' voluntary winding up," whereas if no such declaration has been delivered, the winding up is to be a "creditors' voluntary winding up." If the strict construction were to be adopted, there would be a substantial risk of the liquidator finding that he had been conducting the wind up on the wrong basis, without any creditors' meeting having been held ; the liquidator might never feel any degree of assurance that he was acting in accordance with the law. I may add that I do not think that section 288 contemplates only this situation ; for that section, requiring a liquidator who forms the opinion that the company will not be able to pay its debts in full within the period specified in the declaration of solvency forthwith to summon a creditors' meeting, may also become applicable in cases where the statement of assets and liabilities is complete and accurate, but some assets fail to realize the estimated sums. The creditors are, as Mr. Nicholls pointed out, adequately protected by this provision, and by their power to petition for a compulsory winding up notwithstanding the voluntary liquidation. Second, where section 288 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embers' voluntary winding up into a creditors' voluntary winding up, expose the directors to penal liability for default under section 293. Fifth, it would be odd if the winding up of a wholly solvent company had to be conducted as a creditors' voluntary winding up merely because in the statement of assets there had been the omission of, say, a single asset of some magnitude which made the company even more highly solvent. These considerations seem to me to require that the words "a statement of the company's assets and liabilities" in section 283(2)( b ) should bear the less stringent meaning. In any case, I think that such a meaning is more reasonable. There must be something which can be reasonably and fairly described as "a statement of the company's assets and liabilities" : but if there is, then even if it subsequently appears that there are errors and omissions, these will not prevent the statement from being a statement within the sub-section. I do not think that I ought to impute to Parliament an intention to require perfection in a provision which contains no words to indicate this super-human standard. Nor can I see anything to require or suggest that the statement is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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