Re London and Globe Finance Corporation Ltd
| Jurisdiction | England & Wales |
| Date | 1903 |
| Year | 1903 |
| Court | Chancery Division |
Company - Winding-up - Director - Prosecution - Payment of Costs out of Assets - Refusal of Public Prosecutor to prosecute - Discretion -
In order to determine whether leave ought to be given to institute criminal proceedings against the director of a company which is being wound up, and whether the costs of the prosecution ought to be paid out of the assets of the company, the Court will look at the question from the point of view of an individual, and will consider whether it would be the duty of a good citizen even at a loss to himself to institute and carry on proceedings to punish the criminal. It is not necessary to find that the facts are so plain that a conviction must ensue. The proportion of creditors who support and oppose the application, and the effect which will be produced upon the estate by payment of costs, will be taken into consideration, but not the personal advantage of the individual, nor motives of vengeance against the offender, nor pecuniary benefits to be obtained for the creditors or shareholders. The fact that the law officers of the Crown have refused to allow the public prosecutor to undertake the prosecution is not necessarily relevant.
THE London and Globe Finance Corporation, Limited, was registered on March 1, 1897, with a nominal capital of 2,000,000l. in shares of 1l. each, its object being to acquire the undertakings of the West Australian Exploring and Finance Corporation, Limited, and of the old London and Globe Finance Corporation, Limited, and to carry on financial operations of all kinds.
Mr. Whitaker Wright was managing director of the London and Globe Finance Corporation.
On January 14, 1901, resolutions were passed for the voluntary winding-up of the corporation. On the 19th of the same month the Court made an order continuing the voluntary winding-up under the supervision of the Court. On October 30, 1901, upon the petition of a creditor, the Court made an order for the compulsory winding-up of the corporation, and the official receiver became the provisional liquidator. On December 16, 1901, the statutory meetings of creditors and shareholders were held, when it was resolved that the official receiver should remain liquidator of the corporation with a committee of inspection consisting of eight persons, five of whom (including the official assignee of the Stock Exchange) were nominated by creditors and three by shareholders.
Mr. Whitaker Wright and other directors and officials of the company were publicly examined, and a state of affairs was disclosed which gave rise to a suggestion that proceedings ought to be taken against Mr. Whitaker Wright on account of his alleged conduct as managing director. The official receiver, at the instance of the committee of inspection, requested the public prosecutor to take the requisite steps; but he, acting upon the advice of the law officers of the Crown, refused to institute a prosecution.
Funds were subscribed to enable a prosecution to be undertaken; an offer was made to pay at least 1250l. into court; and it was desired that such further sums as might be necessary for that purpose should be paid by the official receiver out of the assets of the company. A dividend of 1s. in the pound had been paid, and it was hoped that another of the same amount might be distributed.
On January 20, 1903, Mr. John Flower, a creditor of the company and member of the committee of inspection, took out a summons for an order that the official receiver might be directed to institute and conduct a prosecution of Mr. Whitaker Wright for certain offences alleged to have been committed by him in relation to the company and the members and creditors thereof, and that all costs and expenses incurred in such proceedings should be paid out of the assets of the company. The summons was supported by creditors to the amount of about 650,000l.; creditors for about 100,000l. were neutral.
The Nickel Corporation, who opposed the application so far as it related to payment out of the assets, were creditors for about 175,000l.
Counsel for the summons asked that the application should be heard in camerâ, but Buckley J. declined to accede to this suggestion.
Avory, K.C., and Clavell Salter, for the summons. We ask the Court, under s. 167 of the Companies Act, 1862, to direct the official receiver to take proceedings against Mr. Whitaker Wright for such offences, under ss. 83 and 84 of the
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