In re Padstow Total Loss and Collision Assurance Association: CA 1882

The High Court had made a winding up order against an insolvent association under a section of the Companies Act 1862 which applied to unregistered companies. The Act prohibited the formation of an unregistered company with more than twenty members. The association, which was not registered under the Act, consisted of more than twenty members.
Held: The statutory provision under which (if at all) the association could be wound up applied only to companies which could be lawfully formed and not to companies like the association the formation of which was forbidden. Accordingly the winding up order was made without jurisdiction.
Sir George Jessel MR considered the effect of the order: ‘The first point to be considered is whether, assuming that the association was an unlawful one, and that the Court had no jurisdiction to make the order, an appeal is the proper method of getting rid of it. I think it is. I think that an order made by a Court of competent jurisdiction which has authority to decide as to its own competency must be taken to be a decision by the Court that it has jurisdiction to make the order, and consequently you may appeal from it on the ground that such decision is erroneous.’
Brett LJ: ‘In this case an order has been made to wind up an association or company as such. That order was made by a superior Court, which superior Court has jurisdiction in a certain given state of facts to make a winding-up order, and if there has been a mistake made it is a mistake as to the facts of the particular case and not the assumption of a jurisdiction which the Court had not. I am inclined, therefore, to say that this order could never so long as it existed be treated either by the Court that made it or by any other Court as a nullity, and that the only way of getting rid of it was by appeal.’


Sir George Jessel MR Brett and Lindley LJJ


(1882) 20 Ch D 137

Cited by:

CitedStrachan v The Gleaner Company Limited and Stokes PC 25-Jul-2005
PC (Jamacia) The plaintiff challenged an order setting aside a default assessment of damages in his claim for defamation. After the action was lost, two witnesses had come forward who might have allowed a defence . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice

Updated: 01 May 2022; Ref: scu.237252