WINDING UP

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leaving every share 8s. paid. If, after all the paid-up capital
has been returned, there is still a surplus, it is, in the absence
of special provision to the contrary, returnable to all the
shareholders alike in proportion to the number of shares held by
each [re Bridgewater Navigation Company (1889), 14 A.C. 525].

But the memorandum or articles of a company commonly
make some provision as to the distribution of what are called
‘surplus assets’ in a winding up, e.g. preference shareholders
with priority as to capital are entitled to be repaid in full
before ordinary shareholders receive anything. The term
‘surplus assets’ in articles of association often gives rise to
difficulty. It may have one of two distinct meanings,
according to the context, and according to the interpretation
of the memorandum and articles as a whole. Sometimes
it means the assets remaining after paying the expenses of the
liquidation and the creditors, and sometimes the assets remain-
ing after returning paid-up capital also. And, according
to its meaning, which it is often hard to determine, must
the assets remaining be distributed. It is to be observed that
the holders of preference shares have no priority in the matter
of the return of capital unless it is so provided. Their
preference is a preference as regards dividends alone. It is
impossible here to go into the widely varying clauses in articles
of association as to the distribution of surplus assets.

It seems advisable here to deal more systematically with Application
a subject which has already several times been mentioned. to the Court.
This is the matter of applications to the Court. S. 252 of
the Act enables the liquidator, or any contributory, or any
creditor, to make application to the Court in practically any
matter of difficulty or dispute. It will be observed, on a
perusal of the section, that its words are very wide; application
may be made to the Court to determine any question arising in
the winding up, or to exercise any of the powers exercisable in
compulsory winding up; and, further, the Court may, upon
application, make any order—even an order totally different
from what is asked for.

A number of cases in which application to the Court is
sometimes made have already been noticed. Applications
by the liquidator may be of almost any kind, but they may
be roughly divided into three classes, namely, applications
made with the object of obtaining a decision on a disputed
point, applications to the Court to exercise its statutory
powers to permit acts which may not be done except with
the leave of the Court, and applications made with the
object of obtaining the sanction of the Court to a proposed
step or arrangement. In the third class of case, the liquidator