Winding-up proceedings and shareholder hearing rights: a fully paid-up shareholder may be heard, but the company lacks standing to appeal for that grievance.
A fully paid-up shareholder in a winding-up proceeding is entitled to be heard because a winding-up order may affect the company's assets, goodwill, and capital, and the long-standing practice in such matters recognises that right; the shareholder's position is distinct from a contributory still liable for calls, but that distinction does not justify denying audience. The company, however, has no locus standi to prosecute an appeal based on a grievance belonging only to that shareholder, especially where the company did not appear before the winding-up judge and the shareholder did not appeal. The appeal was therefore incompetent in the company's hands, and the winding-up order remained undisturbed.
Issues: (i) Whether a fully paid-up shareholder was entitled to be heard on a creditor's petition for winding up. (ii) Whether the company had locus standi to maintain the appeal on a grievance belonging to the shareholder.
Issue (i): Whether a fully paid-up shareholder was entitled to be heard on a creditor's petition for winding up.
Analysis: A fully paid-up shareholder has a substantial interest in the making of a winding-up order, since such an order may affect the company's assets, goodwill, and capital. The practice in winding-up matters has long recognised the right of such a shareholder to appear and be heard, and the statutory reference to the wishes of creditors or contributories does not exclude that position. The shareholder's status is distinct from that of a contributory still liable for calls, but that distinction does not justify refusing audience to a fully paid-up shareholder.
Conclusion: The fully paid-up shareholder was entitled to be heard on the winding-up petition.
Issue (ii): Whether the company had locus standi to maintain the appeal on a grievance belonging to the shareholder.
Analysis: The appeal was brought by the company, not by the shareholder whose complaint was the refusal of audience. The company had notice but did not appear before the winding-up judge, and it could not be permitted to prosecute the private grievance of an individual shareholder who had not appealed. The appeal was therefore incompetent in the company's hands.
Conclusion: The company had no locus standi to maintain the appeal on that ground.
Final Conclusion: The appeal could not succeed and the winding-up order was left undisturbed, with costs against the appellant company.
Ratio Decidendi: A fully paid-up shareholder in a winding-up proceeding has a right to be heard, but an appeal cannot be maintained by the company to vindicate only the separate grievance of that shareholder.
TaxTMI 
AI Drafter ✕
TaxTMI 
