Winding-up litigation rights: a contributory may sue in the company's name if the liquidator refuses to act and the claim is bona fide.

In winding up, a contributory may be permitted to sue in the company's name when the liquidator refuses to act, if the claim properly belongs to the company and the proposed proceedings are bona fide rather than frivolous, vexatious or oppressive. The court supervising liquidation must protect the interests of all stakeholders and exercise its discretion on correct principles, including scrutiny of whether proper indemnity is offered. The prior failure of related litigation did not bar the company from pursuing its own rights. The appellate court therefore set aside the refusals below and allowed the proposed action in the company's name with costs.

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Issues: Whether a minority contributory of a company in voluntary liquidation could obtain leave to institute proceedings in the company's name against persons alleged to have wrongfully retained company property, and whether the courts below had exercised their discretion on the correct principles.

Analysis: In liquidation, the court exercising winding-up jurisdiction is the custodian of the interests of all classes affected by the liquidation and must ensure that the company's assets and rights are properly vindicated. Where the liquidator refuses to act, a contributory may seek an order directing action in the company's name or leave to use the company's name, subject to proper indemnity and judicial scrutiny of whether the proposed proceedings are bona fide and not vexatious or oppressive. The prior litigation did not preclude the company from pursuing its own rights, and the proposed action could not be treated as frivolous merely because the earlier proceedings had failed.

Conclusion: The refusal to grant leave was based on an principle, and the appellant was entitled to leave to institute the proposed action in the company's name on a proper indemnity.

Final Conclusion: The appellate order set aside the refusals below and substituted a direction permitting the proposed corporate action, with costs ordered accordingly.

Ratio Decidendi: In winding up, where the liquidator declines to sue, the court may permit a contributory to proceed in the company's name if the claim is one properly belonging to the company and the proposed proceeding is not frivolous, vexatious, or oppressive; discretion must be exercised on correct principles.

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