Presently due debt and provisional liquidator protection upheld where liability was admitted and asset preservation was needed.

A company's admitted liability was treated as a presently due debt for winding-up purposes, because the dispute concerned only the character of the payment as licence fee or rent and no material showed tenancy or any basis to deny present liability. The court upheld admission of the winding-up petition, finding a prima facie case had been made out. It also upheld appointment of the official liquidator as provisional liquidator under section 450, since the company was collecting and appropriating licence fees and there was a risk of prejudice to creditors if assets and receipts were not protected pending proceedings.

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Issues: (i) Whether the order admitting the winding-up petition to hearing was liable to be set aside on the ground that the amount claimed by the respondent was not a debt but only licence fee not yet established as payable as rent. (ii) Whether the appointment of the official liquidator as provisional liquidator under section 450 of the Companies Act was justified.

Issue (i): Whether the order admitting the winding-up petition to hearing was liable to be set aside on the ground that the amount claimed by the respondent was not a debt but only licence fee not yet established as payable as rent.

Analysis: The amounts had been paid regularly for years, no payment had been made from 1 May 1971, and no document showed that the appellants were tenants or that the payments were rent. The liability was admitted, the only dispute being the character of the payment. On the facts, the amount was treated as a presently due and payable debt, and the company had not shown solvency or any basis to defeat the winding-up petition at the admission stage.

Conclusion: The finding that a prima facie case for admission of the winding-up petition had been made out was upheld, against the appellants.

Issue (ii): Whether the appointment of the official liquidator as provisional liquidator under section 450 of the Companies Act was justified.

Analysis: The company was collecting licence fees from occupants and appropriating them, while the court found a risk of further complications if possession of vacant portions was parted with. In those circumstances, interim protection of the assets and receipts was considered necessary pending the winding-up proceedings.

Conclusion: The appointment of the provisional liquidator was upheld, against the appellants.

Final Conclusion: Both appeals failed, and the interlocutory protection and admission orders passed in the winding-up proceedings were maintained.

Ratio Decidendi: Where the company admits liability but disputes only the nomenclature of the payment, and no material shows a tenancy or any basis to deny present liability, the amount is a presently due debt for winding-up purposes; a provisional liquidator may also be appointed to safeguard the assets and receipts of the company where the circumstances show a risk of prejudice to creditors.

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