The Gazette 1982

CIA/E T N

JANUARY/FEBRUARY 1982

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.

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

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