WINDING UP

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created by the company, and be paid accordingly
out of any property comprised in or subject to that
charge.

Subject to the retention of such sums as may be
necessary for the costs and expenses of the winding up,
the foregoing debts shall be discharged forthwith
so far as the assets are sufficient to meet them, and in
the case of debts to which priority is given by para-
graph (e) of sub-s. (1) of this section formal proof
thereof shall not be required, except in so far as is
otherwise provided by general rules.
In the event of a landlord or other person distraining
or having distrained on any goods or effects of the
company within three months next before the date
of a winding up order, the debts to which priority
is given by this section shall be a first charge on the
goods or effects so distrained on, or the proceeds of
the sale thereof:

Provided that in respect of any money paid under
any such charge the landlord or other person shall
have the same rights of priority as the person to whom
the payment is made.

In this section the expression ‘the relevant date

means—

(a) in the case of a company ordered to be wound
up compulsorily which had not previously com-
menced to be wound up voluntarily, the date
of the winding up order; and
in any other case, the date of the commencement
of the winding up.

If a debenture contains a fixed as well as a floating charge,
the priority conferred by the section as read with s. 78, applies
only in respect of the assets subject to the floating charge
[Lewis Merthyr Consolidated (1929), 1 Ch. 498].

With reference to the priority of salaries and wages of
clerks and servants, it has been held that a managing director
is not a clerk or servant within the meaning of the section
[Newspaper Proprietary Syndicate (1900), 2 Ch. 349]. And
it has been held that a company’s secretary who does not give
the whole of his time to the service of the company, but
pays a clerk to do the bulk of the work, is not a servant
so as to be entitled to priority, although in other cases he
may be [Cairney v. Back (1906), 2 K.B. 746]. And there
have been other decisions on particular facts. I+ would

b)