2604 SECRETARIAL PRACTICE

Liability of
Liquidator.

may, generally, if he thinks fit, take the proposed step without
any application to the Court, and his object in applying is
to protect himself. Just as trustees are empowered to apply
to the Court for directions in cases of doubt or difficulty, so
the liquidator may, in order to safeguard himself, apply under
s. 252. In case of any matter involving a large amount of
money, or any specially important or unusual act, he may
properly take steps to protect himself, and if he acts without
doing so, the omission may tell against him if the propriety
of the transaction is subsequently impeached. It would be
prudent, for example, to apply to the Court for its sanction
before taking proceedings in a matter of magnitude, or before
borrowing more than a small amount of money. Applications
by contributories are generally made when they are dissatisfied
with the decision of the liquidator on their rights or liabilities,
e.g. when they consider themselves improperly settled on a
list of contributories. Creditors’ applications are generally of
one of two kinds, that is to say, applications made in conse-
quence of decisions of the liquidator adverse to their interests
in individual cases, and applications made when they are
dissatisfied with any matter in the liquidation as being dis-
advantageous to them generally, as, for example, if they
consider the liquidator’s remuneration too high; or, if in their
opinion, a proposed compromise is not sufficiently in the
interests of the company.

With reference to the liability of the liquidator in volun-
tary winding up, it seems unnecessary to deal with his criminal
liability, or with his liability to penalties in case of certain
defaults. As regards his civil liability, his position is simple.
He is the agent of the company, and is not under the same
liability as a trustee for negligence in the performance of
his duties, but only for misfeasance or breach of trust. The
negligence, which consists in a mere error of judgment, is
not sufficient upon which to charge a liquidator, but, of course,
personal misconduct, e.g. by failure to perform his statutory
duties, or by negligence amounting to a failure to exercise
proper care [see e.g. Windsor Steam Coal Co. (1929), 1 Ch. 157,
Home & Colonial Insurance Co. (1930), I Ch. 102], will always
render him liable. When he employs a solicitor in the
course of the liquidation, he is not, in the absence of an
express bargain, personally liable for the solicitor’s costs.
When he contracts he should of course, be careful to make it
clear that he contracts on behalf of the company and not
personally; otherwise, it is possible that he might, as between
himself and the other party to the contract. inadvertently
assume a personal liability.