Shareholder liability for unpaid calls in liquidation survives limitation and fails only if valid forfeiture is completed.

In winding-up proceedings, a shareholder's liability for unpaid calls was treated as a fresh and independent liability arising on liquidation, so the fact that the company's pre-liquidation suit for recovery had become time-barred did not defeat the claim. The objection based on limitation therefore failed. The court also held that mere notices threatening forfeiture did not amount to an actual forfeiture where no resolution was passed in the manner required by the articles of association; without a valid forfeiture, the shares continued to subsist for liability purposes. The objection based on forfeiture therefore failed, and the shareholders remained liable for the unpaid calls.

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Issues: (i) Whether a shareholder remained liable for unpaid calls after the company went into liquidation, notwithstanding that a suit for recovery of the calls had become time-barred; (ii) Whether the shareholders were discharged from liability on account of forfeiture of shares.

Issue (i): Whether a shareholder remained liable for unpaid calls after the company went into liquidation, notwithstanding that a suit for recovery of the calls had become time-barred.

Analysis: The liability of a contributory in liquidation was treated as distinct from the company's pre-liquidation right to sue for the call. The ruling accepted the settled position that liquidation creates a fresh liability on shareholders for unpaid calls, independent of whether the company's own claim had become barred by limitation before winding up.

Conclusion: The objection based on limitation failed and the liability for the unpaid calls was upheld against the appellant.

Issue (ii): Whether the shareholders were discharged from liability on account of forfeiture of shares.

Analysis: The notices threatening forfeiture did not amount to an actual forfeiture, because no resolution was passed as required by the company's articles of association. In the absence of a valid forfeiture, the shares continued to subsist for purposes of liability.

Conclusion: The objection based on forfeiture failed and the appellant remained liable.

Final Conclusion: The appeal was unsuccessful because neither the plea of limitation nor the plea of forfeiture displaced the shareholders' liability for the calls in liquidation.

Ratio Decidendi: In winding-up proceedings, a shareholder's liability for unpaid calls is a fresh and independent liability arising on liquidation, and it is not defeated by the fact that the company's pre-liquidation remedy was time-barred; forfeiture is effective only if completed in the manner required by the articles.

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