WINDING UP

239
that the rights of the contributories will be prejudiced by ¢
voluntary winding up.
It is not easy to define accurately the status of the liquida- Position of

tor. It is to be gathered from the following statutory pro- & Liguidator.
visions, some of which have already been mentioned: —
That liquidators are appointed for the purpose of winding up
the affairs of the company and distributing its property
[ss. 232 (1), 239]; that they shall pay the debts of the company
and adjust the rights of the contributories amongst themselves
's. 247]; that upon their appointment all the powers of the
directors cease, except so far as the continuance thereof may
be sanctioned in accordance with s. 232 (2) or s. 241 (2); and
that until the winding up is complete the corporate state
and all the corporate powers of the company continue [s. 228].
The company then continues to exist, but the directors
subject to the exceptions mentioned) cannot act, whilst
the liquidator has the duty of winding up the company’s
affairs. The liquidator steps into the shoes of the directors,
not for carrying the company’s business on, but for winding
it up, although he may carry it on so far as is necessary for the
beneficial winding up [s. 227]; and his status resembles in
many ways the former position of the board. Now, directors,
as is well known, have a dual capacity—they are both agents
and trustees. The liquidator is in a certain sense a trustee.
He may be said to hold the assets of the company in trust for
the creditors and then for the shareholders. But his primary
duty being to realise and distribute, he is, perhaps, rather the
company’s agent for certain specified purposes [Knowles v.
Scott (1891), 1 Ch. 717]. A contract for example, made by
him for the purpose of realising some of the company’s assets
is made by the company through him, the common form of the
statement of parties being: ‘Between the——Company,
Limited, by J—— S——, of——, &c., the liquidator thereof,
of the one part, and A—— B——, of——, &c., of the other
part.’ It may, further, be observed that the voluntary
liquidator, being appointed by the shareholders, is not an
officer of the Court, although he has certain duties imposed
on him by statute, and if he neglects those duties the parties
injured, whether creditors or contributories, may be able, if the
winding up is still in progress to compel the liquidator to
make good to the assets of the company the damage he has
done, by a misfeasance summons under s. 276 [Windsor Steam
Coal Co. (1929), 1 Ch. 151; Home & Colonial Insurance Co.
(1930), 1 Ch. 102], or if the company has been dissolved
to make him personally liable in an action for damages [see
Pulsford v. Devenish (1903), 2 Ch. 6257