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Clause 14—(Limitation Of Liability Of Trustees, Etc For Expenses Of Local Authorities In Certain Cases)

Volume 530: debated on Wednesday 21 July 1954

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Lords Amendment: In page 12, line 39, after "creditors" insert "or members."

10.15 p.m.

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment is to provide additional scope for reimbursement to local authorities. As the Clause stands, it limits the liability of the liquidator of a company to funds, rents and other assets in his hands on behalf of the creditors of the company. The liquidator, however, could be holding funds not only on behalf of creditors but also on behalf of the members of the company. There seems to be no reason why the local authority should not be in a position to recover its expenses from such funds and the Amendment seeks to enable that to be achieved.

I think that the general purpose of this Amendment will be generally acceptable, but there is one point I should like the Government to clear up, if they will. I wonder whether it is possible that the liquidator might have moneys on behalf of one member of a company far in excess of that one member's share of the cost of the works, by reference, of course, to his share in the company, and if the liquidator may take excess payment from that member accordingly.

I do not think that the Lord Advocate and the Secretary of State quite understood me. As I understand, the purpose of this Amendment, as the Lord Advocate has explained it, is to ensure that the liquidator may use not only funds which he holds on behalf of creditors to pay to the local authority the necessary moneys to recoup it for work which it has carried out upon buildings. The Amendment provides for the position when the liquidator holds moneys on behalf of members—which must surely mean any one member. I wonder whether, if the liquidator held moneys on behalf of any one member, he could call for payment in excess of the share that that one member should pay.

If I may reply, by leave of the House, the answer is that any money which the liquidator is holding in excess of what is required to meet the creditors' claims in full is held, not on behalf of an individual member, but on behalf of the members as a whole. It is to meet that situation that the Amendment is put down. When the liquidator is holding moneys, not for creditors, he would be holding them on behalf of the members as a group; be would not hold moneys on behalf of individual members of a company.

Question put, and agreed to.