Shoolbred v. Union Fire Ins. Co.

1RESPONDiENTS. C. J.-I cannot see my way clear to ignore what appears to me to be the plain meaning of section 24 of this statute which declares that: I agree with Mr. Justice Osler that we should attribute to these words their natural and ordinary meaning, and that which can be given to them without doing violence to any other section of the act.

In agreeing generally with what Vr. Justice Osler says on this point, I must except his observations as to the purely technical and unmeritorious character the objection. It appears to me that the want of notice contemplated by see 24 is a very substantial matter. I think the winding up -order must. be set aside and the petition referred back to the learned judge to be dealt with as he may think right.

STRoNe J.-I agree with the judgments delivered by.Burton and Osler JJ. in the Court of Appeal, Ed.

(4) P.

though I am unable to agree that the objection is of a mere technical character; on the contrary I think it a very substantial one.

J.-I concur in the judgment of the stro J. learned Chief Justice.

HENRY J.-I have arrived at the same conclusion. I entirely agree with the learned Chief Justice and my brother Strong that the judgment of Burton and Osler JJ. ought to be the judgment of this court with the exception of that part which refers to the objection as being one of an unsubstantial and technical character. I consider that the statute has some meaning and was intended to have some effect and, without going into the reasons why the parties were to be benefitted by it, I think it is enough for us to find that the statute was to confer a benefit and, I think, we are bound to presume that it was so intended.

Under the circumstances I think the judgment of Mr. Justice Osler, with the exception I have mentioned, should be adopted by this court.

J.-I would allow this appeal. The objections assigned by the appellant against the order of the 27th of January, 1885, are far from being technical and unmeritorious.

If the respondent's contentions were maintained proceedings of the most important nature might be taken without notice to the shareholders or creditors of a company, who would thus be deprived of the most important safeguards that the legislature has enacted for their protection.

The order complained of cannot be supported either under the act of 1882 or that of 1884. It could not be made without appointing a liquidator, and as no liquidator could be appointed without notice to the creditors, contributories, shareholders, and members the company, the order itself could not be made without such notice.

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I am of opinion that the prayer of the petition of Shoolbred should be granted and that the order in question should be vacated and discharged. The appeal should be allowed with costs in all the courts against the respondents, including those in the.court 6f appeal.

J.-The main ground of appeal taken by the appellant is one relating to procedure only, and is so purely technical that I doubt the propriety of an appeal in respect of it being entertained at all. The point is one which raises merely the question-What is the proper time for serving notice upon the creditors, contributories and shareholders of an insolvent trading company of an application for the appointment of a liquidator of the company in liquidation under the Dom. Stat. Vic. ch. as amended by 47 Vic. ch. 39 ? And what is the proper manner of making the appointment ? Must the notice for the appointment of a liquidator be giveni before the company is put into liquidation and must the appointment be made in the order for winding up the company ? or may the notice be given upon the order which puts the company into liquidation being made, and may the liquidator be appointed by a separate order according to the ordinary procedure of the Chancery Division of the Pigh Court of Justice in Ontario in a similar case as in the appointment of a receiver, ? The appeal if it should be allowed will decide nothing but a point of practice and the costs of the appeal, for immediately upon the appeal being allowed notice may be given and the appointment may be made in the manner this court should direct, and the same end will be attained as that which has already been attained, in the manner adopted by the Chancery Division of the

High Court of Justice, in Ontario. The entertaining an appeal in question of this nature seems to me to tend rather to the obstruction, than to the advancement, of justice; and there is, in my opinion, no foun- Gwynne J. dation for the contention that the point appealed comes within the provisions of the 78th section of the act of

1882, which prescribes the only cases in which an appeal is by the statute allowed. However if the point were appealable and had to be entertained I concur in the construction put upon the 24th section of 45 Vic. ch. 23, as amended by 47 Vic. ch. 39, by

Mr. Justice Proudfoot in the Divisional Court, and by Mr. Justice Patterson in the Court of Appeal.

But apart wholly from that section the winding up order is, in my opinion, a perfectly good order within the

2nd and 3rd seetions of 47 Vic. ch. 39, which sections and not the 13th, 14th and 24th sections of the act of

1882, as amended by the act of 1884 are the only sections applicable to the present case. The 13th, 14th and 24th sections apply to the case of an insolvent company about to be put into liquidation originally, under the act of 1882, while the 2nd and 3rd sections of the act of 1884 apply to the case of a company already in liquidation or in process of being wound up at the time of the passing of the act of 1882, which the company here was, being brought within and under the provisions of that act.

Now upon this point the act of 1884 enacts that when, at the date of the passing of the said act of 1882, a company was in liquidation or in process of being wound up any shareholder, creditor, assignee, receiver or liquidator of such company might apply by petition to the court, asking that the company be brought within and under the provisions of the said act, and the court may make such order, and that in making

188T such order the court may direct that the assignee, receiver or liquidator of such company, if one has been UmioN Fu appointed, shall become the liquidator of the company INs. Co. under the said act, or may appoint some other person GwynneJ. to be liquidator of the company. This was the proceeding taken in the present case.

Two creditors of the company presented a petition to the court, setting forth an action brought, and pending in the Chancery Division of the High Court of Justice at the suit of one Clarke a creditor on behalf of himself and all other creditors of the Union Fire Insurance Company plaintiffs, against the Union Fire Insurance Company defendants, and that a judgment was rendered in the said suit on the 7th January, 1882, ordering the winding up of the affairs of the said company, and that one William Badenach had been appointed receiver of the estate and affairs of the said company under the said judgment. Upon that petition the order now under consideration was made whereby among other things the court did:- Order and adjudge that William Badenach of the city of Toronto, Esquire, accountant, the receiver heretofore appointed in the said case of Clarke v. The Union Fire Insurance Company be and he is hereby appointed interim liquidator of the estate and effects of the said company.

And the court did further:

Order that it be referred to the Master in Ordinary of the Supreme Court of Judicature to appoint a liquidator of the estate and effects of the said company, and to fix and allow the security to be given by the said liquidator and the remuneration payable to him and to the said interim liquidator.

And the court did further:

Order that the accounts and enquiries heretofore made under the judgments and references to the said Master in the said suit of Clarke v. The Union Fire Insurance Company including the proceedings to ascertain who are the shareholders in the said company, and the evidence taken in connection with the said proceedings do stand and be incorporated with and used in the said winding up proceedings under this order in so far as the same can properly be made appliible by the said Master in the proceedings before him in the mat- Now this order not having been made under the 13th and 14th sections of the act of 1882 but under the 2nd and 3rd sections of the act of 1884 all question, in so far as the order is concerned, as to the proper time for giving the notice referred to in the 24th section of the act of 1882, as amended by the act of 1884, is removed from the case and the objection to the order assumes a new shape. It is admitted that the order as made would be good under the 2nd and 3rd sections of the act of 1884 if the word " interim " had not been inserted in it, and it is contended that the insertion of this word in the order avoids it, that is to say, that if the order had made Badenach " liquidator " instead of "interim liquidator " it would have been free from objection.

This objection appears to me to be even more purely technical than the other, and to be utterly insufficient to warrant us to pronounce the order void. An interim liquidator is a liquidator and he must continue as such until removed or another should be appointed in his place in due course of law. The clause of the order, therefore, which appoints the person already filling the office of receiver in Clarke v* Union Fire Insurance Company to be " interim" liquidator under the order is equivalent to making him liquidator until he should be removed or until another should be appointed in his place in due course of law. The appellant's contention, moreover, is that the reference to the master to appoint a liquidator is a proceeding not authorized by the statute and is therefore void; well if it be, nothing effectual can be done under it and therefore Badenach cannot be removed VOL. IIV.]