Leave to commence company action in winding up where claim belongs to the company, subject to indemnity and control.

Leave to sue in the company's name during winding up may be granted to a contributory where the claim properly belongs to the company, is not frivolous or vexatious, and the judge as custodian of all interests imposes appropriate indemnity and control measures; prior representative proceedings brought without the company as party do not automatically bar such leave. A pre trial categorical conclusion that the claim cannot succeed is inappropriate; appellate intervention is warranted where lower courts refuse leave on a wrong principle or by over absolute assessment of prospects.

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Issues: (i) Whether leave should be granted in winding up to a minority contributory to institute an action in the company's name against majority shareholders and others despite the company being in voluntary liquidation and a prior representative action having been dismissed; (ii) Whether the discretionary refusals by the courts below to grant such leave were correctly exercised.

Issue (i): Whether leave should be granted to the appellant contributory to institute the proposed action in the company's name in winding up.

Analysis: The proposed relief seeks vindication of rights properly belonging to the company. Statutory provisions permit the court on cause shown to direct the liquidator to proceed or to grant a contributory leave to use the company's name in necessary actions; additionally, the winding up jurisdiction enables contributories to obtain relief on the company's account against directors. Prior representative proceedings brought without the company as party do not preclude a subsequent properly constituted action in the company's name during liquidation. The judge in winding up must act as custodian of all classes affected, assess probable success, and guard against vexatious or oppressive proceedings; but a categorical pre-trial conclusion that the proposed action cannot possibly succeed is inappropriate absent full trial assessment. The court may, where justice requires, permit the use of evidence given in earlier proceedings, including evidence of a deceased witness, to be read quantum valeat subject to necessary consents and judicial direction.

Conclusion: Leave is to be granted to the appellant to institute the proposed action in the company's name against the respondents other than the liquidator, on terms as to indemnity to be settled by the Judge in winding up; the proposed action is not frivolous or vexatious and prior procedural defects in earlier representative proceedings do not bar the present application.

Issue (ii): Whether the discretionary refusals by the courts below to grant leave were correctly exercised.

Analysis: The discretion below was exercised on a basis treating the proposed action as inevitably bound to fail and on assumptions excluding certain allegations without full trial, and by conducting an unusually extensive preliminary examination of the prior record. The proper approach in winding up is to weigh probable success and the interests of all classes affected without making absolute pre-trial determinations of ultimate success; where discretion is exercised on a wrong principle or an over-absolute view of prospects, appellate correction is warranted.

Conclusion: The discretions exercised by the courts below were exercised on a wrong principle and must be discharged; the appeal is to be allowed and the orders below set aside, with substituted directions granting leave on the stated terms.

Final Conclusion: Overall, leave to bring the proposed action in the company's name in the winding up is justified under the court's statutory and supervisory powers, and the appeal is allowed with indemnity terms to be settled by the winding up Judge and with costs allocated as ordered.

Ratio Decidendi: A contributory may be granted leave in winding up to sue in the company's name for claims belonging to the company where the judge, as custodian of all interests in liquidation, is satisfied the claim is not vexatious and appropriate indemnity and control measures are imposed; prior representative proceedings lacking the company as party do not bar such leave.

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