The Gazette 1982

CIA/E T N

JANUARY/FEBRUARY 1982

nominated by the Creditors, the person, if any,

nominated by the Company shall be Liquidator". Sub

section (2) of the same section provides that if more

than one person is nominated Liquidator, either a

director, a member, or a Creditor of the Company may,

within fourteen days after the date of the nomination by

the Creditors, apply to the Court for an order directing

that the person nominated as liquidator by the

Company shall be Liquidator instead of or jointly with

the person nominated by the Creditors or to appoint

some other person as Liquidator. The clear intention of

the Section has unfortunatley been eroded by Rule 63 of

Statutory Instrument No. 28 of 1966, which provides

that any Resolution to be passed at a Creditors' Meeting

shall only be deemed to be passed by a majority in

number and value of the Creditors present, personally

or by proxy. In 1955 when commenting on the same

Rule in the English Winding Up Rules (Rule 134),

Roxburgh J., stated: "therefore, though I should have

thought that there was a crying need for some

amendment of this legislation which would make it clear

that, in the event of the majority in value being a

minority in number their nominee will nonetheless

prevail, unless and until some amendment of the law is

made I should not be prepared to hold a different

principle applied"

Caston Cushioning Limited [

1955] 1

A11ER. 508.

The facts of this case are worth considering. On the

16th August, 1954 a resolution for voluntary liquidation

was passed by Caston Cushioning Limited and the

members nominated a Mr. Barker, a Chartered

Accountant, as Liquidator. On the same date Mr.

Caston, a director of the Company, took the chair at a

Meeting of its Creditors. At that Meeting, one of the

Creditors proposed Mr. Lambeth, Chartered

Accountant, as Liquidator and the proposal was duly

seconded and put to the Meeting. The proposer and

another Creditor, together representing proved debts to

the value of £4,795.00. voted for the appointment of

Mr. Lambeth; and three other Creditors, together

representing proved debts to the value of £2,336.00,

voted against the Resolution. The Chairman declared

the Resolution to be lost and, there being no other

nomination for Liquidator, he confirmed the

appointment of Mr. Barker. One of the Creditors then

applied to the Court, where it was held that Mr. Barker

was validly nominated as Liquidator by the Company,

but Mr. Lambeth had

not

been validly nominated by the

Creditors, because the Creditors' resolution to

nominate him had not been supported by a majority in

number of the Creditors present and voting at the

Meeting, although it had been supported by a majority

in value of those Creditors. However, the case had a

corollary in that the Court made an order for

compulsory winding up of the Company on foot of a

petition presented by the Creditor who had proposed

Mr. Lambeth and appointed the Official Receiver as

Liquidator of the Company (this provision is unknown

in the Irish Companies Act but is made possible by

Section 239 (d) of the English Companies Act, 1948).

The Court further held that Mr. Barker, the Liquidator

nominated by the Company, would be entitled to his

costs of the hearing, together with all the costs and

expenses of the liquidation to the date of the hearing.

If such an application were made to the Irish High

Court under Section 267 (2) of the Companies Act,

1963, the Court would have the choice either of

nominating as Liquidator the person appointed by the

Company to act either on his own or jointly with the

person nominated by the Creditors or, in the

alternative, of appointing some other person to be

Liquidator. Clearly, therefore, the more liquidators that

are proposed by the Creditors, the less chance they have

of appointing their own Liquidator, as there is rarely an

opportunity for the Creditors to obtain a majority in

both number and value. If the Creditors propose and

second a Liquidator (it is important to take the name of

both the proposer and seconder) and if those supporting

him are not a majority in number and value of those

attending or entitled to vote in person or by proxy then

the Company's nominee will automatically be

appointed Liquidator.

Voting

(a) Who may vote? - a Creditor is not entitled to

vote in respect of any unliquidated or contingent debt,

or any debt the value of which is not ascertained, or in

respect of any debt on or secured by a current Bill of

Exchange or Promissory Note, but this does not

preclude from voting a Creditor who is due money for

services rendered

(Re. Canadian Pacific Corporation

(1891) W. N. 122) or untaxed costs

(Re. Dummelow,

Ex-parte Russell

(1873) 8 CH. APP. 997 (C.A.)) or the

like provided he can prove or swear to the minimum

amount due to him.

(b) Secured votes - It has always been believed that a

secured Creditor cannot, unless he surrendered his

security, vote at a Creditors' Meeting. Rule 70,

Statutory Instrument No. 28 provides that a secured

Creditor shall not, unless he surrenders his security, be

entitled to vote but, if he gives a statement of his

security and deducts this from the amount due to him,

then he shall be entitled to vote on any unsecured

balance. If "he votes in respect of his whole debt, he

Incorporated Law Society of Ireland

IMPORTANT NOTICE

The Attention of the profession is drawn to a

ruling passed at the Council Meeting of the 14th

January, 1982.

WHEREAS NO solicitor SHALL practice

AS A principal or assistant without a current

Practicing Certificate. THE COUNCIL HAS

resolved that it is the duty and obligation of the

Principal(s) of each office to ensure that each

solicitor in the office has a current Practicing

Certificate.

The Council has resolved that any breach of

this resolution shall be deemed

unprofessional

conduct

which may result in disciplinary pro-

ceedings. The Council recommends that the

cost of taking out a Practicing Certificate for

assistant solicitors should be borne by the prac-

tice in respect of all solicitors employed in the

practice.

The Society requires that each solicitor shall

have a Practicing Certificate for each year or

part of a year when the said solicitor is practic-

ing whether he or she shall be required to attend

to Court work or not.