Limitation and waiver in managing director remuneration claims determine whether a winding-up petition can rest on an enforceable debt.

A claim for managing director remuneration was not shown to have been validly waived, because correspondence and prior conduct did not prove a clear and voluntary relinquishment of the later claim. The remuneration was treated as salary payable month by month, so the claim was subject to the limitation rules for salary and wages; the alleged acknowledgments did not save limitation, and the claim was time-barred when the winding-up petition was filed. A company is not proved unable to pay its debts merely because liabilities exceed assets; absent evidence that it could not meet liabilities as they fell due, compulsory winding up on insolvency was not justified.

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Issues: (i) whether the petitioner had waived his claim for remuneration as managing director, (ii) whether the petitioner's claim was barred by limitation, and (iii) whether the company was unable to pay its debts so as to justify compulsory winding up.

Issue (i): whether the petitioner had waived his claim for remuneration as managing director

Analysis: The company's plea of waiver was tested against the surrounding correspondence and conduct. A request by the directors that the petitioner waive his claim did not amount to proof that he accepted such waiver, and earlier waiver of remuneration for prior periods did not by itself establish waiver for the later period in question. The material relied on by the company was insufficient to show a clear and voluntary relinquishment of the right to remuneration.

Conclusion: The plea of waiver failed and was not established.

Issue (ii): whether the petitioner's claim was barred by limitation

Analysis: The Court treated the managing director's remuneration as salary payable month by month. The board proceedings and the company letter were not accepted as effective acknowledgments of liability for limitation purposes, particularly because the petitioner continued to be a director and an acknowledgment by the board in such circumstances could not save limitation. On the nature of the claim, the Court held that the remuneration fell within the limitation provisions applicable to salary and wages, and not within the residuary article suggested by the petitioner.

Conclusion: The claim was barred by limitation on the date of the winding-up petition.

Issue (iii): whether the company was unable to pay its debts so as to justify compulsory winding up

Analysis: The mere fact that liabilities exceeded assets did not by itself establish inability to pay debts. Beyond the Registrar's affidavit, there was no sufficient evidence showing that the company lacked the capacity to meet its liabilities or pay its creditors in fact.

Conclusion: The ground of inability to pay debts was not made out.

Final Conclusion: The winding-up petition could not be sustained on either the debt claim or the alleged insolvency, and the application was dismissed with costs.

Ratio Decidendi: For a winding-up petition founded on non-payment of a debt, the debt must be legally enforceable and not time-barred, and insolvency cannot be inferred merely from excess liabilities over assets without proof of inability to meet debts as they fall due.

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