Forfeiture of shares and contributory liability in winding-up: call notice alone was insufficient, while limitation did not defeat the claim.

Under Table A, a call notice did not itself forfeit shares where a further directors' resolution was required, so the shareholders remained liable as contributories in the winding-up. The limitation defence also failed because contributory liability is a distinct statutory liability arising in winding-up and is not defeated by limitation applicable to the underlying call. However, section 184 of the Companies Act, 1913 limited the liability of legal representatives of deceased shareholders to the extent of the estate assets that had come into their hands, so the order had to be modified accordingly.

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Issues: (i) whether the appellants' shares were forfeited so as to exclude them from liability as contributories in the winding-up; (ii) whether the claim against them was barred by limitation; and (iii) whether the liability of the representatives of deceased shareholders was confined to the assets received from the estates of the deceased.

Issue (i): whether the appellants' shares were forfeited so as to exclude them from liability as contributories in the winding-up.

Analysis: In the absence of the articles, the regulations in Table A were applicable under section 18 of the Companies Act, 1913. Under Articles 24 to 26 of Table A, a call notice did not by itself effect forfeiture; a further resolution of the directors was required. The notice relied upon by the appellants merely warned that the shares would be forfeited if payment was not made. The minutes showed no later resolution actually forfeiting the shares, and the circumstances relied upon did not bring the case within the exceptional authorities where forfeiture was treated as complete in substance.

Conclusion: The shares were not forfeited, and the appellants remained liable as contributories.

Issue (ii): whether the claim against them was barred by limitation.

Analysis: Once the appellants were held to be contributories, their liability arose as a new liability to contribute in the winding-up and not as an ordinary debt due to the company. A bar to recovery of calls against the company before winding-up did not defeat the liquidator's right to call upon contributories. The limitation plea therefore could not succeed against the claim to contribute.

Conclusion: The claim was not barred by limitation.

Issue (iii): whether the liability of the representatives of deceased shareholders was confined to the assets received from the estates of the deceased.

Analysis: Section 184 of the Companies Act, 1913 limited the liability of legal representatives to the extent of the assets, if any, that had come into their hands from the deceased shareholders. That limitation applied on the facts to the two appellants who were representatives of deceased shareholders and required the order to be moulded accordingly.

Conclusion: Their liability was limited to the assets received from the estates of the deceased shareholders.

Final Conclusion: The appeals substantially failed because the shares had not been forfeited and limitation did not defeat contributory liability, but the order had to be modified to confine the liability of the representatives of deceased shareholders to the estate assets that came to their hands.

Ratio Decidendi: A call notice does not by itself work forfeiture where the governing regulations require a further directors' resolution, and the liability of a contributory in winding-up is a distinct statutory liability not defeated by limitation applicable to the underlying call.

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