Re Emmadart Ltd
| Jurisdiction | England & Wales |
| Year | 1979 |
| Date | 1979 |
| Court | Chancery Division |
Company Winding up - Petition - Receiver presenting petition in company's name - Receiver's authority to present petition - Whether power in board or directors to present petition
The articles of association of a company incorporated Table A and, therefore, the powers of the board of directors were those set out in article 80 of that Table. A receiver and manager was appointed by a bank under the terms of a debenture creating a first floating charge over all the company's assets and undertakings. By the terms of the debenture, the receiver was the agent of the company, he had all the powers of a receiver under the
On the question whether the receiver had power to present the petition in the name of the company: —
Held, (1) that, even if the receiver had the same powers as the board of directors had under article 80 of Table A, the board could only cause a petition to be presented in the name of the company under that article if a resolution were passed in general meeting (post, p. 874D).
Per curiam. The practice which seems to have grown up, under which a board of directors of an insolvent company presents a petition in the name of the company but without reference to the shareholders, is wrong and ought no longer to be pursued, unless the articles confer the requisite authority, which article 80 of Table A does not (pose, p. 874G–H).
(2) That, since the debenture had been created in accordance with the company's powers to create charges and borrow money and the receiver had been duly appointed under the debenture, the receiver had the power in clause 6 to take possession of all the assets charged and do such acts as were incidental or conducive to that power; that the protection and preservation of those assets were incidental to their possession and, since a winding up order would protect those assets from depletion by a levy of rates, the receiver had the power by virtue of his appointment to present the petition on behalf of the company and, in the circumstances, the court would exercise its discretion and make a winding up order (post, p. 87B–E).
The following cases are referred to in the judgment:
Birmacley Products Pty. Ltd., In re [
Galway and Salthill Tramways Co., In re [
Lawson v. Hosemaster Co. Ltd. [
Newhart Developments Ltd. v. Co-operative Commercial Bank Ltd. [
Smith v. Duke of Manchester (
Standard Bank of Australia Ltd., In re (
The following additional cases were cited in argument:
Gough's Garages Ltd. v. Pugsley [
Johnson (B.) & Co. (Builders) Ltd., In re [
Sowman v. David Samuel Trust Ltd. [
PETITION
On June 28, 1973, the company, Emmadart Ltd., issued a debenture in favour of Barclays Bank Ltd. to secure its banking account. The debenture contained a first floating charge over all the undertaking and assets of the company. On April 26, 1976, the bank appointed Mr. Maurice Ernest Bulley to be receiver and manager of the company's property. The company was insolvent. A petition for winding up was presented on September 19, 1978, as the petition of the receiver himself, but it was later amended to be that of the company by the receiver.
The facts are stated in the judgment.
Michael Crystal for the company and the supporting creditor, the bank.
December 5. BRIGHTMAN J. read the following judgment. This is a petition to wind up Emmadart Ltd., presented by the company itself through the agency of its receiver and manager, Mr. Bulley. On June 28, 1973, the company executed a debenture in favour of Barclays Bank Ltd. in order to secure its banking account. The debenture contained a first floating charge over all the undertaking and assets of the company. It provided that, at any time after a demand for payment, the bank might appoint a receiver or manager of all or any of the property thereby charged. Clause 6 (c) provided that the receiver should be the agent of the company and should have all powers conferred by the
“(i) To take possession of collect and get in all or any part of the property hereby charged and for that purpose to take any proceedings in the name of the company or otherwise as he shall think fit; … (viii) To do all such other acts and things as may be considered to be incidental or conducive to any of the matters or powers aforesaid and which he lawfully may or can do.”
On April 26, 1976, the bank appointed Mr. Bulley to be receiver and manager of all the property of the company, to enter upon and take possession of the same; the receiver was to have all powers conferred on him by the debenture and by law.
The petition was presented on September 19, 1978, as the petition of the receiver himself but was later amended so as to be the petition of the company by the agency of the receiver.
The unamended petition was duly served at the registered office of the company, which was unoccupied. It was separately served on Mrs. Ellis, the secretary of the company, at 26, High Street, Stamford, who was made a respondent, although not so required by the
To continue reading
Request your trial
- Miharja Development Sdn Bhd and Others v Tan Sri Datuk Loy Hean Heong and Others and another application
-
Re China Milk Products
...of shares. Cases cited: (1) Banco Economico S.A. v. Allied Leasing & Fin. Corp., 1998 CILR 102, not followed. (2) Emmadart Ltd., In re, [1979] Ch. 540; [1979] 2 W.L.R. 868; [1979] 1 All E.R. 599, not followed. (3) Galway & Salthill Tramways Co., Re, [1918] 1 I.R. 62, referred to. (4) Global......
-
Banco Economico v Allied Leasing
...followed. (3) -Dartmouth Harbour Commrs. v. Mayor of Dartmouth HardnessUNK(1886), 55 L.J.Q.B. 483, applied. (4) -Emmadart Ltd., In re, [1979] Ch. 540; [1979] 1 All E.R. 599, followed. (5) -Mid East Trading Ltd., Re, Lehman Bros. v. Phillips, [1997] 3 All E.R. 481; [1997] 2 BCLC 230; on appe......
-
The Companies Act (2023 Revision) and HQP Corporation Ltd (in Official Liquidation)
...Ltd [2003] Bda LR 47 Kawaley J (as he then was) sitting in Bermuda declined to follow an aspect of a first instance English authority Re Emmadart Ltd [1979] 1 ALL ER 599 which had been repealed by statute and not followed by a line of Australian cases. In that case, counsel submitted that ......
-
The Cayman Islands Restructuring Regime: A New Dawn?
...company itself, unless they are expressly authorised to do so in the company's articles of association, following the rule in Re Emmadart [1979] Ch. 540 as applied in the Cayman Islands in China Shanshui [2015 (2) CILR 255]. If, as is usual, the company's articles of association do not best......
-
A Welcome Stay In The Islands: Moratoriums In The Cayman Islands
...shareholders. Such issue stems from what is known as the Emmadart principle, which originates from the English case of Re Emmadart Ltd [1979] Ch 540. The effect of Emmadart was that the directors may only present a petition in the name of the company if such action is authorised or ratified......
-
When Can A Company Apply For Its Own Winding Up In The Cayman Islands?
...traditional common law position - which was considered in detail by Brightman J (as he then was) in the English case of Re Emmadart Ltd [1979] 1 Ch. 540, and followed by Smellie J (as he then was) in the Cayman case of Banco Economico SA v Allied Leasing and Finance Corporation [1998] CILR ......
-
Overview Of The New Cayman Islands Restructuring Officer Regime
...financing more expensive to obtain and certain existing debt with variable interest rates more expensive to service. 2. Re Emmadart Ltd [1979] 1 Ch 540; In the matter of China Shanshui [2015 (2) CILR 3. Or seek the assistance of a friendly creditor to file a winding up petition for a nomina......