Interest from surplus assets in solvent liquidation depends on the creditor's underlying entitlement, not mere existence of a surplus.

In the winding up of a solvent company, entitlement to interest out of surplus assets depends on the creditor's underlying legal right to interest. A creditor whose debt was non-interest-bearing, and who had no contractual, decretal, or statutory entitlement, could not claim interest merely because a surplus remained after liquidation. By contrast, creditors whose debts carried interest remained entitled to interest until payment. The remaining surplus could then be distributed to contributories, with the return of capital to be made at the stated rate or at the rate finally possible on completion of the accounts.

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Issues: (i) whether, in the winding up of a solvent company, a creditor whose debt does not carry interest is entitled to interest out of surplus assets; (ii) the rate at which contributories were to receive a return of capital.

Issue (i): whether, in the winding up of a solvent company, a creditor whose debt does not carry interest is entitled to interest out of surplus assets.

Analysis: Section 228 governed proof of claims against the company, while Section 229 applied only to insolvent companies and the insolvency rules governing such cases. Once the company was found solvent, the creditor's rights fell to be determined by the terms of the debt itself. Creditors whose debts carried interest remained entitled to such interest until payment, but a creditor who had not contracted for interest, and who was not otherwise entitled to it under a decree or a statutory demand, could not claim interest merely because a surplus existed in the liquidation.

Conclusion: No interest was payable to creditors whose debts did not carry interest, though creditors whose debts carried interest were entitled to interest up to the date of payment.

Issue (ii): the rate at which contributories were to receive a return of capital.

Analysis: The Official Receiver's further report showed that, on the basis of the ruling on interest, a return to contributories could be made at a stated rate, subject to the final figures being drawn up. The Court therefore directed distribution on that basis.

Conclusion: The Official Receiver was directed to make a return to the contributories at the stated rate, or at such rate as might finally be possible.

Final Conclusion: The application was accepted in substance, with directions limiting interest to creditors whose debts carried interest and permitting distribution of the remaining surplus among contributories.

Ratio Decidendi: In the winding up of a solvent company, interest out of surplus assets is recoverable only in accordance with the creditor's contractual or independent legal entitlement, and not by creditors whose debts were originally non-interest-bearing.

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