Kilmarnock Theatre Company v Buchanan
| Jurisdiction | Scotland |
| Judgment Date | 24 February 1911 |
| Docket Number | No. 81 |
| Date | 24 February 1911 |
| Court | Court of Session |
Ld. Johnston, Lord Ardwall, Lord Salvesen, Lord Justice-Clerk.
ExpensesCompanyLiquidationPersonal liability of liquidatorsForm of decree.
Under a simple decree for expenses pronounced against the liquidators of a company the liquidators are personally liable, but are entitled to relief out of the assets of the company if there are any. Under a decree against the liquidators personally they have no right to recover from the company, and such a decree will be pronounced only where the liquidators have been personally blameworthy.
The Kilmarnock Theatre Company, Limited, in liquidation, and Alexander Mitchell and James Robert Mackay, the liquidators of the Company, brought an action against Robert Colburn Buchanan and others, which was taken from the Outer House (Lord Johnston, Ordinary) to the Second Division on a reclaiming note, and in which, on 9th November 1910, the Court pronounced the following interlocutor:Assoilzie the defenders from the conclusions of the action, and decern: Find the defenders entitled to expenses, and remit the same to the Auditor to tax and report. The defenders' account of expenses was taxed at 503, 9s. 3d.
On the motion for approval of the Auditor's report, made on 14th January 1911, the defenders moved the Court to decern against the liquidators personally for the expenses to which the defenders had been found entitled.
The pursuers opposed the motion, and argued;The motion was made too late. It ought to have been made at the time when the expenses were found due.1 Apart from this, however, the motion should not be granted, as the introduction of the word personally would have the effect of precluding the liquidators from obtaining relief from the Company, and inferred, what had never been suggested, that they were personally blameworthy in connection with the action.
Argued for the defenders;The word personally should be put into the interlocutor. The effect of a decree for expenses against liquidators who had litigated unsuccessfully was to make them personally liable.2 The defenders desired the insertion of the word personally to prevent the pursuers from subsequently contending that the defenders could only have recourse against the assets of the Company. The insertion of the word personally could not prejudice the pursuers in their recourse against the assets of the Company, but if there was any fear of that, the defenders had no objection to the pursuers' rights against the Company being reserved.
At advising on 24th February 1911,
Lord Ardwall.I am of opinion that in this case decree for the taxed expenses should be pronounced against the liquidators, who are the pursuers in the action, and in that decree that they should be designed as they are in the summons, viz.:Alexander Mitchell, chartered accountant, Glasgow, and James Robert Mackay, chartered accountant there, the liquidators of the Kilmarnock Theatre Company, Limited.
In my opinion the defenders' motion to have the word personally inserted after the names of the liquidators in the decree ought to be refused. If that word were to be inserted it would mean that the liquidators had improperly raised and carried on this litigation, and must pay the expenses out of their own pockets without recourse against the assets of...
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