Peat v Gresham Trust Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Tomlin.,Lord Russell of Killowen,Lord Macmillan.,Lord Wright. |
| Judgment Date | 27 March 1934 |
| Judgment citation (vLex) | [1934] UKHL J0327-2 |
| Date | 27 March 1934 |
| Court | House of Lords |
[1934] UKHL J0327-2
House of Lords
Lord Tomlin.
Lord Warrington of Clyffe.
Lord Russell of Killowen.
Lord Macmillian.
Lord Wright.
After hearing Counsel for the Appellant, as well on Tuesday the 20th, as on Thursday the 22d of and Friday the 23d, days of February Last, upon the Petition and Appeal of Sir William Henry Peat, K.B.E., of 11 Ironmonger Lane, in the City of London, the Liquidator of M.I.G. Trust, Limited, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 28th of February 1933, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioner might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the Gresham Trust, Limited, lodged in answer to the said Appeal; and Counsel appearing for the Respondents, but not being called upon; and due consideration being had this day of what was offered for the said Appellant:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 28th day of February 1933, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellant do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The Appellant is the liquidator of a company called M.I.G. Trust, Ltd., which is being wound up compulsorily by the Court under an order dated the 31st March, 1931. I shall hereafter refer to M.I.G. Trust, Ltd., as the debtor company.
The Respondents are a limited company claiming to be secured creditors of the debtor company by virtue of a charge created by deposit of deeds on the 6th May, 1930, and registered with the Registrar of Companies on the 10th March, 1931, as the result of an order extending the time for registration made by Mr. Justice Maugham on that day.
This Appeal arises out of a summons issued by the Appellant under Section 265 of the Companies Act, 1929, for a declaration that the proceedings before Mr. Justice Maugham and the order made by him (being proceedings alleged to have been suffered by the debtor company with a view to prefer the Respondents) constituted an undue and fraudulent preference of the Respondents over the other creditors of the debtor company and for consequential relief.
For many years prior to the 3rd March, 1931, the business of an outside stockbroker under the style of Arthur Wheeler & Co. was carried on, up to 1920, by one Sir Arthur Wheeler alone, and thereafter by him in partnership with one George Victor Smith. The debtor company was formed in 1910 by Sir Arthur Wheeler for the purpose of carrying on the business of buying and selling stocks and shares in association with the business of Arthur Wheeler & Co. Sir Arthur Wheeler and his son (hereafter called Mr. Wheeler) were the only two directors of the debtor company from October, 1930, to the 3rd March, 1931, a third director, Mr. Leeson, having retired in October, 1930.
The Respondents are a public limited company. During the year 1930 and in the year 1931, up to the 3rd March, Sir Arthur Wheeler was chairman of the board of directors of the Respondents. At all material times Mr. Wheeler was managing director of the Respondents. A substantial number of shares in the capital of the Respondents were held by Sir Arthur Wheeler, his wife and Mr. Wheeler.
On the 6th May, 1930, the debtor company deposited the title deeds of certain freehold property with the Respondents as security for money owing from the debtor company to the Respondents. Such deposit was accompanied by a letter dated the 6th May, 1930, from the debtor company to the Respondents in which the debtor company agreed to execute any necessary deed in respect of the properties charged, when called upon to do so.
Particulars of the charge were not sent to the Registrar of Companies for registration, pursuant to Section 80, Companies Act, 1929, within 21 days after the date of the creation of the charge, and such charge, in consequence, became void against the Liquidator and any creditors of the Company by reason of the provisions of Section 79 of the Companies Act, 1929. On the 3rd March, 1931, the firm of Arthur Wheeler & Co. was adjudicated bankrupt.
Immediately after the adjudication Mr. Wheeler consulted the solicitors of the debtor company as to the position of that company, and the solicitors prepared draft resolutions for voluntary winding up.
On the 4th March, 1931, the Respondents instituted proceedings in the High Court of Justice Chancery Division by way of Originating Notice of Motion under the provisions of Section 85 of the Companies Act, 1929, for an order that the time for delivering particulars of the charge for registration should be extended, on the ground that the omission to deliver such particulars was accidental. The notice of motion was addressed to the debtor company.
On the 4th March, 1931, Mr. Wheeler instructed the solicitors of the debtor company to bring to the notice of the Court his connection with the Respondents and the debtor company, the transactions between the two companies and the position of the debtor company. The solicitors accordingly instructed Counsel, delivering to him a brief which, after referring to the bankruptcy of Arthur Wheeler & Co. and the position of Mr. Wheeler, contained, inter alia, the following statements:—
"(1) That Mr. Wheeler was confident that in the circumstances which had happened the debtor company must be put into liquidation, either on its own petition, or following resolutions for its voluntary winding up, and that it would probably present its own petition.
(2) That the Respondents had from time to time loaned very large sums of money to the debtor company, the debtor company depositing various securities with the Respondents.
(3) That Mr. Wheeler's instructions were that he was merely a nominal director of the debtor company and knew nothing of its operations, except as to the transactions involving the loans to the debtor company by the Respondents, and that Counsel would appreciate that Mr. Wheeler's position was a somewhat difficult one.
(4) That the creditors of the debtor company, of which there were a very large number, would undoubtedly be prejudiced if the Respondents were permitted to register the charge, and that Mr. Wheeler felt that these facts should be brought to the knowledge of the Court on the application by the Respondents."
On the 6th March, 1931, the Respondents' application came before Mr. Justice Maugham. The debtor company appeared by Counsel and the application was adjourned until the 10th March, 1931.
On the 7th March, 1931, Mr. Wheeler signed and...
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