WINDING-UP SOUGHT

Evening Star, Issue 21541, 13 October 1933, Page 12

WINDING-UP SOUGHT

AFFAIRS OF SNOWDRIFT LIME COMPANY MEETING OF CREDITORS TO BE HELD Judgment was given by His Honour Air Justice Kennedy in the Supreme Court this morning in the case in which petition was made for the winding-up by the court of the Snowdrift Lime Company Ltd. At the hearing a week ago Air A. G. .Neill and Air G. M. Lloyd appeared for the petitioning creditor (Afessrs John Chambers and Son Ltd.), and Air F. C. Dawson appeared for Alessrs Charles Alexander Shiel and William John Shiel, creditors, to object. . His Honour said the only evidence in support of the petition was the formal verifying affidavit sworn ■ by the secretary "of thq petitioning company. Rule 7 of the winding up rules provided that the verifying affidavit should be sworn after and filed within four days aiter the petition was presented. The affidavit in question was sworn eight days before the petition was presented, and it was filed contemporaneously with the petition. If that were the only objection to the petition, the court might in some manner get over the difficulty which the petitioner had created for himself by neglecting the rules. There was, however, another objection. Alter the petition had been presented, the company went into voluntary liquidation, and that fact was known to the petitioner, because an affidavit exhibiting the minute book and referring to the resolution voluntarily to wind up was filed and served. Section 233 of the Companies Act, 1908, provided that a voluntary winding-up of the company should not be a bar to the right of any creditor or contributory to have the same wound up by the court if the court was of the opinion that the right of such creditor or contributory would be prejudiced by a voluntary windingup. This provision was not confined to the case where the voluntary windingup commenced before the petition was presented. Where the voluntary wind-ing-np preceded the presentation of the petition, it was the duty of a petitioning creditor, unless he was content to rely upon the fact that the general body of creditors desired compulsory liquidation, both to allege and prove that the voluntary winding-up would be prejudicial to his rights, and he must at least prove prejudice even where the voluntary winding-up resolution had been passed after the presentation but before the bearing of the petition. The English practice in such a case was stated to be “ to amend the petition so that it might speak to the winding-up and any matters which were likely to prejudice the petitioner if he were a creditor, or the contributories if the petitioner were a contributory. The amended petition was verified by a fresh statutory affidavit and served on the liquidator, but no ieadvertisement was necessary where a supervision order was not asked tor alternatively or otherwise.” His Honour went on to say that in the circumstances it was incumbent upon the petitioner to entitle it to an order not only to prove the company’s inability to pay but also prejudice. Instead, however, of following the English or New Zealand practice, the petitioner chose to rely upon what was called a pnma fade case established by the irregular formal affidavit referred to above, and, after the objecting creditors had been heard, claimed to call further evidence not to rebut the objectors’ evidence but

to prove prejudice. The petitioner thus claimed to split his case and, after the objections had been heard, claimed to introduce evidence which should have been adduced in the first place by the petitioner so that, on the contrary, it might have been replied to, if desired, by objecting creditors. His Honour proceeded ; It was stated by counsel for the petitioner, although he did not formally announce an appearance for them, that he had the instructions of other creditors to support the petition, and, while it does not appear that the general body of creditors desires a compulsory order, enough appears to justify a meeting to ascertain the wishes of the creditors if the expenses of summoning that meeting are provided. I shall order the petition to stand over until November 1, 1933, at 10 a.m.. and I direct that conditionally upon there being deposited within three days from this date with the registrar the sum of £lO to cover the disbursements of the liquidator of and incidental to summoning such meeting and remuneration for his services to be paid as the court shall direct, the liquidator summon a meeting of the creditors of the company for October 20. 1933, at 10 a.m., to ascertain their wishes, such meeting to be held at the registrar’s office at the Supreme Court, Dunedin, and 1 appoint the registrar chairman of that meeting and direct him to report the result of the meeting, to the court.