The court discussed the official receiver’s enquiries and report leading up to the public examination of former directors. Farwell LJ said: ‘Now those are functions of a judicial character which are cast upon him, not in the liquidation of the company for the benefit of the assets, but primarily at any rate for the protection of the public. One has to bear in mind that in 1890 there had been various company failures, and it was thought that more drastic legislation was required against directors and promoters and people standing in that position, and I have no doubt that this section was passed for that purpose. It is said, and with some truth, perhaps, that it is a little hard on the company if the view that we take is correct that the costs of all this should come out of the company’s assets; but a company only exists by favour of and on the conditions imposed by the legislature, and it is not immaterial to observe that as long ago as 1862, under the 167th section of the Act of 1862, if directors were prosecuted (as mentioned in that section) the expense of the prosecution came out of the assets of the company’.
Judges:
Farwell LJ
Citations:
[1910] 2 KB 697
Jurisdiction:
England and Wales
Cited by:
Cited – Official Receiver v Wadge Rapps and Hunt (a firm) and another and two other actions HL 31-Jul-2003
(Orse In re Pantmaenog Timber Co Ltd)
The Receiver sought to use information obtained under section 236 (documents recovered from the directors’ solicitors) in disqualification proceedings.
Held: The appeal succeeded. The Act had . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Company
Updated: 12 May 2022; Ref: scu.186359