Christie et al. v. Edwards

Christie et al. v. Edwards

The company was ipso facto dissolved three months after filing the liquidator's return under s.229(2) in the absence of fraud, but former shareholders who were beneficially entitled could compel an accounting by the former liquidator in respect of the reserved $25,000 (and proceeds) because the minutes did not constitute an agreement authorizing the liquidator to appropriate the fund; therefore the Court ordered a reference to the Master to ascertain amounts properly expended and the balance with interest, excluding any claim by the defendant for remuneration as liquidator.

Citation
[1940] SCR 410
Parties
Plaintiffs/appellants (former Shareholders): William L. Christie; I. Huntly Christie; Katharine Christie; Emma L. Christie; Defendant/respondent (former Liquidator): George Edwards
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 May 1940
Procedural Posture
Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario in a Shareholders' Action Against Former Liquidator / Final Appeal Judgment
Outcome
Appeal allowed.
Legal Topics
Voluntary Winding Up, Liquidator Duties and Liabilities, Accounting by Fiduciary, Effect of Statutory Dissolution, Shareholders' Remedies
Source Language
English
Commercial Law Company Law Equity/injunctions and Accounting Voluntary Winding Up Liquidator Duties and Liabilities Accounting by Fiduciary Effect of Statutory Dissolution Shareholders' Remedies

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Parties

William L. Christie; I. Huntly Christie; Katharine Christie; Emma L. Christie

Plaintiffs/appellants (former Shareholders)

George Edwards

Defendant/respondent (former Liquidator)

Procedural Posture

Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario in a Shareholders' Action Against Former Liquidator / Final Appeal Judgment

Legal Issues

  1. 1 Whether a company is ipso facto dissolved three months after filing the liquidator's return under s.229(2) in the absence of fraud
  2. 2 Whether the minutes reserving $25,000 constituted an agreement allowing the liquidator to retain the fund as his own or to settle prospective liabilities
  3. 3 Whether former shareholders may obtain an accounting from a former liquidator after statutory dissolution

Ratio Decidendi

The company was ipso facto dissolved three months after filing the liquidator's return under s.229(2) in the absence of fraud, but former shareholders who were beneficially entitled could compel an accounting by the former liquidator in respect of the reserved $25,000 (and proceeds) because the minutes did not constitute an agreement authorizing the liquidator to appropriate the fund; therefore the Court ordered a reference to the Master to ascertain amounts properly expended and the balance with interest, excluding any claim by the defendant for remuneration as liquidator.

Court Disposition

Appeal allowed.

Orders

  • Reference to the Master of the Supreme Court of Ontario to take an account of the $25,000 in bonds received by the defendant (or the proceeds thereof) and to determine what sums have been properly expended by the defendant out of said bonds or proceeds
  • Determine the balance unexpended and interest on amounts that remained or should have remained in the defendant's hands from time to time