RE THE FRANKTON BEACH DREDGING COMPANY (LIMITED).

Otago Witness, Issue 2008, 18 August 1892, Page 15

RE THE FRANKTON BEACH DREDGING COMPANY (LIMITED).

Tina matter was before the Supreme Court on Tuesday. Summons to proceed with winding up and for the appointment of Mr J. A. Chapman as liquidator. Sir Robert Stout and Mr Joel appeared in support, and Mr James appeared on behalf of G. S. Brodrick, a candidate for the position of liquidator. After hearing counsel, His Honor said : As I understand the case, all the creditors of the company and shareholders to the extent of 11,000 shares support the appointment of Mr Chapman as liquidator. On the other hand, though no creditors support the appointment of Mr Brodrick, yet shareholders to the extent of 5000 shares support him. Apart from any other circumstances, that would be quite sufficient to justify the court in at once appointing Mr Chapman. It is said, however, there are two objections to Mr Chapman. First, that he has been secretary of the company ; and, second, that he is a shareholder. As to the first objection, if there was a suggestion on affidavit that there were matters which it was necessary in the interests of either the creditors or contributories should be investigated independently, then there would be a strong reason for not appointing Mr Chapman. No such suggestions, however, have been put forward, and the circumstance that all the creditors and a large majority of the contributories unite in suppoi ting Mr Chapman shows that there is no reason for supposing that they could be put forward. The other objection to Mr Chapman— that he is a shareholder— had, at first sight, to my mind, very considerable force. No doubc it is laid down that as a rule a shareholder should not be appointed liquidator. That rule is founded ou this principle : that it is not right that a man should be placed in a position where his inteiest conflicts with his duty. If, however, a liquidator is a shareholder the duty with which his interest would conilict would be the duty not to his fellow shareholders but to the creditors. If all the creditors are content to see a shareholder occupy a position as liquidator, then the principle on which a shareholder is ordinarily not appointed liquidator would have no application. Looking at the circumstance that all the creditors have signified their consent to Mr Chapman being appointed liquidator, and that the interests of the creditors are the first to lie considered in the matter, and looking also at the fact that of his fellow shareholders there is a majority of rather more than two to one in his favour, and that there is no suggestion that there are doubtful transactions which will have to be inquired into,

I see no reason why Mr Chapman should not be appointed. Mr Chapman will be appointed accordingly. It was further directed that the liquidator should give security within 14 days ; the amount of the security to be fixed, and the sureties approved of, by the registrar, who is to repoit.