Wakilii

Standish v Ross and Another (C.C. 88A 1930 (Msa.).)

East African Court of Appeal · [1930] EACA 81 · 1930 Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Objection proceedings arising from execution against judgment debtor's property claimed by a receiver
Decision
Objection dismissed; receiver held not properly appointed; judgment-creditors entitled to proceed with execution

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that a receiver cannot be validly appointed under a debenture deed provision requiring certification by 'the company's auditors' unless the certificate is given by auditors properly appointed under the Companies Ordinance. Where no auditors have been appointed under statute, and a certificate is given only by accountants, the receiver's appointment is premature and invalid. The objector bears the burden of proving the receiver was properly appointed.

Outcome

Objection dismissed; receiver held not properly appointed; judgment-creditors entitled to proceed with execution

Facts

Messrs. Ross and Christie obtained judgment against S. C. Green & Co., Ltd. in Civil Case No. 88 of 1930 and proceeded to levy execution against motor cars belonging to the defendant company. J. S. Standish, claiming to be receiver of S. C. Green & Co., Ltd., objected to the execution. The receiver's appointment was made by debenture holders Messrs. Carr Lawson and Co. under a debenture deed clause permitting appointment if 'the company's auditor' certified that liabilities exceeded assets. No auditors had been appointed under the Companies Ordinance, but an audit was conducted by a firm of accountants, and the receiver was appointed based on their report. The judgment-creditors challenged the validity of the receiver's appointment.

Issues

  1. Whether the receiver was properly appointed under the debenture deed.
  2. What is meant by 'the company's auditors' in a debenture deed.
  3. Whether a receiver can be appointed based on a certificate from accountants who are not auditors appointed under the Companies Ordinance.

Orders

  • Objection dismissed with costs.

Rules and key headnotes

Company Law — Debentures — Appointment of Receiver — Burden of Proof
The onus of proving that a defendant company has failed in its obligations under a debenture deed and that a receiver has been properly appointed rests on the party claiming to be receiver.
Company Law — Auditors — Meaning of 'Company's Auditors' in Debenture Deed
The expression 'the company's auditors' in a debenture deed refers to auditors appointed under the Companies Ordinance, not to any accountants or persons conducting an audit without statutory appointment.
Statutory Interpretation — Technical Terms — 'Company's Auditors'
The term 'company's auditors' is a well-known expression recognized by law which refers to auditors appointed under statute who possess special powers to require production of documents and obtain information to discover the real position of the company.
Company Law — Debentures — Appointment of Receiver — Certificate by Non-Statutory Auditors
A receiver cannot be validly appointed under a debenture deed provision requiring a certificate that the company's liabilities exceed its assets unless such certificate has been given by auditors who have been appointed under the Companies Ordinance. Where no auditors have been appointed under the Ordinance, the appointment of a receiver is premature.
Company Law — Debentures — Procedure for Appointing Receiver
Where a debenture deed provides for appointment of a receiver upon certification by the company's auditors, but no auditors have been appointed, the debenture holder must first take steps to have auditors appointed before a receiver can be validly appointed.

Legislation cited (1)

  • Companies Ordinance (Cap. 93) s.144

Full judgment

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Standish v Ross and Another (C.C. 88A 1930 (Msa.).) [1930] EACA 81 (1 January 1930)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.