English mortgage over unpaid share capital does not block liquidator's power to call and realise contributory money in winding up

An English mortgage over uncalled share money does not prevent the liquidator from treating the unpaid amount as a company asset and including the shareholder in the list of contributories. The liquidator remains competent to make the call in winding up and realise the amount for liquidation purposes, even if the mortgagee holds the security and even if the call was made before winding up. The company retains an equity of redemption and a beneficial interest in the surplus after the mortgage debt is satisfied, so the mortgagee cannot itself enforce the call in place of the liquidator. The issue was resolved in favour of the appellant.

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Issues: Whether the existence of an English mortgage over uncalled share money prevents the liquidator from including the shareholder in the list of contributories and from realising the call money in winding up.

Analysis: Under the Companies Act, a shareholder's unpaid share money remains an asset of the company, and the liquidator is charged with settling the list of contributories and realising calls for the purposes of winding up. Although an English mortgage over uncalled capital amounts to an assignment by way of security, the company retains an equity of redemption and at least a beneficial interest in the surplus after the mortgagee is satisfied. The mortgagee cannot himself make the call after winding up; the proper course is for the liquidator to make the call and apply the realised amount in satisfaction of the secured debt and then for the purposes of liquidation. The fact that the call had been made before winding up does not alter the liquidator's competence to proceed.

Conclusion: The existence of the mortgage did not bar the liquidator from including the shareholder in the list of contributories or from realising the unpaid share money; this issue was decided in favour of the appellant.

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