Re Galway and Salthill Tramways Company

• Jurisdiction: Ireland
• Judge: M. R.
• Judgment Date: 19 December 1917
• Court: High Court
• Date: 19 December 1917

In re Galway and Salthill Tramways Co.

M. R.

CASES

DETERMINED BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1918.

Company — Winding-up — Impossibility of carrying on business — Companies (Consolidation) Act, 1908 (8 Edw. 7, c. 69), sect. 129 (vi) — Companies Clauses Act, 1845 (8 & 9 Vict. c. 16), sect. 90.

The directors of a company are not entitled, without the authority of a general meeting of the shareholders, to present a winding-up petition in the name of the company. But where directors have presented a winding-up petition in the name of the company without authority, it is open to a general meeting of the shareholders to ratify their action.

Petition.

This was a petition to wind up the Galway and Salthill Tramways Company, and was brought in the name of the company, which is an unregistered company, incorporated under the provisions of the Galway and Salthill Tramways Act, 1877 (40 & 41 Vict. c. ccxxxvii), with an authorized capital of £35, 000, of which £15,990 has been paid up. The petition stated that the debts of the company, as of July, 1917, amounted to about £359, and that further debts had been incurred since then; that for some years past the assets of the company had been decreasing and its liabilities increasing; that the company by reason of want of capital was not able to carry on its business and that it would be useless to issue any further capital, and that it was just and equitable that the company should be wound up. The petition was opposed by certain of the shareholders.

Fetherstonhaugh K.C. (with him O'Byrne), in support of the petition:—

The company is in a hopeless condition; it is carrying on business at a loss, and a still greater loss will be incurred every year. The only assets are the trams, rails, horses, and £266 in bank, and a large sum requires to be expended on the repair of the track. This is an unregistered company which can only be wound up by the Court: Companies (Consolidation) Act, 1908, sects. 267, 268, sub-s. 1 (i), (ii), (iii).

[O'Connor M.R.—Have the directors of a company power to present a petition of their own motion without the authority of a general meeting?] They have power under sect. 90 of the Companies Clauses Act, 1845, which is incorporated in the Company's private Act. In any event the petitioners are shareholders, and a minority of shareholders can present a petition for winding up the company: In re German Date Coffee Co. (1). [O'Connor M.R.—But this is the petition of the company itself.] There is a complete deadlock. Section 40 of the private Act provides that there shall be three directors, but in fact there have been only two for some years, and it would not be possible to find another shareholder possessing the requisite number of shares to act as director. The words “just and equitable” in sect. 129 and 268 (i), (iii) of the Companies (Consolidation) Act, 1908, should be liberally construed...