TMI Blog1970 (1) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... rs' voluntary liquidation. The retail company, Fildes Bros. Ltd., is the one with which I am directly concerned. I shall call it "the company." This has at all material times been run by Ian, with a little intermittent assistance from Brian. Of the 1,000 shares, each brother owns 499, and their wives own one each. The two brothers were at all material times the only directors of the company, and Ian is chairman of the company, with a casting vote both on the board and at meetings. The petition is based upon a claim that it is just and equitable that the company should be compulsorily wound up. Brian's main complaints fall under three heads. First, Ian had opened a new bank account in his own name and was paying in and drawing out the company's money from it; and he had done this without consulting Brian. Under cross-examination, Brian agreed that some while before September 17, 1969, when the petition was presented, he had known of the reasoned explanation as to the nature of this account which Ian's solicitors had put forward in a letter dated August 4. Brian had been refusing to follow the previous practice of each brother signing blank cheques for use in the company run by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated in 1960. The figures for the first three years of the company's trading would, I should have thought, been more in point ; but Brian, on whom lay the onus of proving the agreement, did not put them before me. It seems far more probable that, instead of there having been any agreement, by 1966 the brothers had settled into a course of conduct which produced the rough equality that one would expect from two brothers with two businesses of this sort. The broad picture is that in each of the three years each brother drew a total of rather over 2,000 from the company that he was running, and something between 750 and 1,250 from the other company, so that each received in all an annual total of something between 3,000 and 3,500. The collapse of the wholesale company has understandably put Brian, who is about 49 years old, in a position of considerable difficulty. Apart from Brian's major complaints, there were some other matters. Ian at one time threatened to have Brian removed from the board of directors. He now accepts that it would be wrong for him to attempt this. Ian also proposed that his wife should be appointed a director of the company. At one stage, too, Ian object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive quasi-partner has been carrying on. The point is a curious one, and not easy. As Mr. Settle points out the day-to-day running of the company's business is not the same as the management of the company. True,. Ian is in complete control of the day-to-day running of the retail butcher's shop : but in the general management of the company at the board table, the brothers are equal, subject always to Ian's casting vote. Does the quasi-partnership concept apply to such cases ? No authority has been cited to me in which the partnership concept has been applied to a company with one director who devotes nearly all his time to the company's business and another who does little more than attend the directors' meetings requisite to enable the company to continue in business. As I have already mentioned, Mr. Settle accepted that Brian had been somewhat of a sleeping partner in the company, just as Ian was somewhat of a sleeping partner (though less dormant) in the wholesale company. At the same time, the words " just and equitable " are very wide in their scope, and I cannot say that they are incapable of embracing a case where one director is far more active in the company's affair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttle accepts that the present case is not in that category. The present is a case not of exclusion but of non-inclusion, if I may put it that way. The case is not one of the petitioning contributory complaining of the status quo being changed against his interests : it is one where he complains that the status quo has not been changed in his favour. Even if this is a proper case for the application of the quasi-partnership concept (a matter upon which I feel some hesitation) I do not think that it is open to Brian to complain of Ian continuing to do what was in accordance with the settled practice between them. The refusal of Ian to employ Brian is thus in my judgment not merely not enough per se (as Mr. Settle accepts) but it is also not a counter to be weighed in the scales with other matters. If in so holding it is said that I am extending still further the important extension made by Simonds J., I face that prospect with equanimity, deriving a small degree of comfort from, the word " largely " in his judgment. I do not think that: equity will listen only to what the articles say and ignore a settled course of conduct : equity is not like that. Secondly, there is the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f some oppression or some lack of probity." To that passage I may add the comment on it which I made in In re Raines Plant Ltd. 001893 of 1968, June 12, 1969 (unreported) "That was primarily said in relation to a petition under section 210, but I do not think it can be questioned that the same principle would apply to a petition for winding up." In cases in which there are no normal pleadings, it seems to me. important that those who oppose a winding up should know, in time to prepare their case, what are the allegations that they have to meet. If after a petition has been presented the petitioner wishes to broaden his attack, let him first amend his petition Accordingly, the question for me is whether, as matters stand today, what has been alleged in the petition and proved before me makes it just and equitable to wind up the company. Whatever grounds Ian may in the past have given Brian for the presentation of the petition, I have to decide the case in the light of the evidence now before me ; and this includes the oral evidence of Ian and Brian. Mr. Settle said that the court must decide this case largely on personalities. In that respect, I must say that I found Ian an im ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
