[HOUSE OF LORDS.]

AND

Foreign Corporation - Garnishee Order - Judgment against foreign Company carrying on Business in this Country - Default of Appearance - Repudiation of Authority to accept Service of Process by English accredited Representative - Validity of Service - Nationalization of industrial Companies by Soviet Government - Liquidation of foreign Company in England - Admission of Validity of Judgment by English Liquidator - Duty of foreign Court to recognize Judgment - Comity of Nations - Companies (Consolidation) Act, 1908 (8 Edw. 7, c. 69), s. 274, sub-s. 1 (c).

A Russian insurance company, having its principal office in Petrograd and a branch office in London, in accordance with s. 274 of the Companies (Consolidation) Act, 1908, filed with the registrar the name of C. as its authorized representative to accept service of process on its behalf. By a series of decrees passed in 1918 the Soviet Government purported to put all insurance companies in Russia into liquidation and to appropriate their property. In the spring of 1923 C. sent a notice to the registrar that the company which he represented had ceased to exist, and at his request this notice was placed upon the file. In the summer of the same year the respondents brought an action against the company by specially indorsed writ for payment of a sum of money claimed to be due to them in respect of certain insurance transactions. The writ was served upon C., who protested that he had no power to act for the company, and judgment was signed in default of appearance. In 1924 the respondents obtained in this action a garnishee order nisi attaching all debts due from the appellants to the judgment debtors. The appellants took out a summons against the respondents to have the judgment set aside, and the respondents applied to have the garnishee order nisi made absolute or an issue directed. Fraser J., affirming the decision of the Master, dismissed both applications. Shortly after this decision an order was made for the winding up of the company in this country. The Court of Appeal, after ascertaining from the liquidator that he did not propose to question the judgment, refused to set aside the judgment, but as regards the garnishee proceedings directed an issue:-

Held, upon the respondents' application, (1.) following Russian Commercial and Industrial Bank v. Comptoir d'Escompte de Mulhouse [1925] A. C. 112, that at the date of the writ the company had not

ceased to exist by virtue of the decrees of the Soviet Government; (2.) (by Viscount Cave L.C., Lord Shaw of Dunfermline, Lord Sumner, and Lord Parmoor; Lord Blanesburgh dissenting) that the service of the writ on C. was valid; (3.) (by the same majority) that the company by putting on the file the name of a person authorized to accept service of process on its behalf agreed to submit to the jurisdiction of the Court, and that therefore it must be assumed that the Russian Government would, according to the comity of nations, recognize the judgment as effective: (4.) (by all their Lordships) that the liquidator is the English winding up had in effect admitted the validity of the judgment and of the garnishee proceedings, and that no foreign Court had the right to go behind that admission.

Held, therefore, that an issue should be directed.

Held, upon the appellants' application, that the appellants had no sufficient interest in the judgment, and that there was no ground for setting it aside.

Jacques v. Harrison (1884) 12 Q. B. D. 165 followed.

Order of the Court of Appeal affirmed.

APPEAL from two orders of the Court of Appeal (Bankes, Scrutton and Sargant L.JJ.).

By the first order the Court affirmed a decision of Fraser J. in chambers refusing to set aside a judgment obtained by the respondents against the Rossia Insurance Co. of Petrograd.

By the second order the Court (Scrutton L.J. dissenting) reversed a decision of Fraser J. discharging a garnishee order nisi attaching the debts due from the appellants to the judgment debtors and directed an issue.

The following statement is taken from the opinion of the Lord Chancellor:-

A company incorporated by Russian charter and called the Rossia Insurance Co. had its principal office in Petrograd and a branch office in London. Under s. 274 of the Companies Consolidation Act, 1908, the Rossia Co. filed with the registrar the name of Mr. Collins as that of a person who was authorized to accept on behalf of the company service of process and of any notices required to be served on the company. The company carried on insurance transactions with the respondents, and became indebted to them. The company also transacted reinsurance business with the appellants and is alleged to have become entitled to a large payment from them.

After the second Russian revolution (the Bolshevik revolution) the Legislature of Soviet Russia passed a series of decrees by which it purported (to put it shortly) to put all insurance companies in Russia into liquidation, to appropriate their property to the Soviet Government without compensation and without any obligation to pay their debts, and to annul their shares. On March 22, 1923, the solicitor for Mr. Collins wrote a letter to the registrar of joint stock companies in the following terms: "I have further considered the cases which have been decided, and it seems that, the British Government having recognized the Soviet Government in Russia, the above company has been nationalized with all similar institutions, and has therefore ceased to exist as a separate entity. Following your suggestion, I shall be glad if you will place this letter on the company's file." The letter was accordingly placed on the file.

On May 31, 1923, the respondents commenced an action in the High Court against the Rossia Co., describing them on the writ as "the Rossia Insurance Co. of Petrograd" and claiming payment in respect of the insurance transactions of 4505l. 12s. 6d. and interest; and the writ was served on Mr. Collins. Mr. Collins did not enter an appearance on behalf of the Rossia Co., and on June 12, 1923, the respondents signed judgment against the company for 4513l. 0s. 3d. and costs. On December 20, 1924, the respondents obtained in this action a garnishee order nisi attaching all debts owing or accruing due from the appellants to the Rossia Co. to answer the judgment obtained against that company by the respondents; but Master Ball, after hearing the evidence, refused to make the garnishee order absolute, on the ground that he had a discretion in the matter and that he was not satisfied that, if the order were made absolute and the amount of the judgment debt paid by the appellants to the respondents, the Soviet Government might not decline to recognize the judgment and compel the appellants to pay the amount over again. The decision of the Master was affirmed by Fraser J., but on appeal to the Court of Appeal that Court set aside the order of Fraser J., and, the appellants denying

that they owed anything to the Rossia Co., directed an issue to be tried on that point. At the same time the Court of Appeal affirmed an order of Fraser J. refusing to set aside the judgment. It is against these orders of the Court of Appeal that the present appeal is brought.

1926. June 10, 11, 14, 15. Sir John Simon K.C. and Jowitt K.C. (with them Thomas Carthew) for the appellants. The making of a garnishee order is discretionary, and an order which will subject the garnishee to the risk of having to pay his debt a second time is inequitable and will be refused: Martin v. Nadel (1); Sea Insurance Co. v. Rossia Insurance Co. of Petrograd. (2) Fraser J. was right in thinking that it would not be safe or proper in the circumstances to hand this money over. As the result of a series of decrees of the Soviet Government the Rossia Co. had ceased to exist when judgment was obtained against it by default. Those decrees passed through three stages. First, the activities of the Russian joint stock insurance companies were placed under Government supervision and control, that was followed by a state appropriation of dividends, and finally, insurance business was declared to be the monopoly of the state and all private companies were to be liquidated and nationalized by a certain date. In accordance with those decrees the Rossia Co. was placed in liquidation by the Soviet Government as from December 8, 1918. A judgment obtained against a company which has ceased to exist cannot be the foundation of garnishee proceedings. Further, the procedure by which this judgment was obtained was irregular. In accordance with the requirements of s. 274 of the Companies (Consolidation) Act, 1908, the Rossia Co. filed with the registrar the name of a Mr. Collins as a person authorized to accept service of process on behalf of the company, but before the issue of the writ Collins took all possible steps to secure the removal of his name from the register, on the assumption that the company was not in a position to make the application, as being either dead or moribund, and the only reason why his

(1) [1906] 2 K. B. 26.

(2) (1924) 20 Ll. L. Rep. 308, 309.

name remained on the register was that the Act contained no provision for its removal.

Assuming that the service was lawfully effected by English law, it does not follow that the foreign Government will recognize a judgment obtained in this country against a company which has long ceased to carry on business here upon service on an individual who has protested against being left on the register. An action may be brought upon a foreign judgment when the defendant has appeared, unless the judgment has been obtained by fraud; but when judgment is obtained in default of appearance it must be proved that, though the defendant did not appear, he was nevertheless affected with notice and had the duty of appearing. A foreign company served in the manner provided by the Companies Act must be treated as effectually served for the purposes of our law, but it does not follow that by the comity of nations it will be treated as bound. The Russian Courts are not concerned with the code of procedure as to service adopted in this country, and will not recognize a judgment of the English Court unless it is binding on the conscience of the defendant: Douglas v. Forrest (1); Schibsby v. Westenholz (2); Sirdar Gurdyal Singh v. Rajah of Faridkote. (3) The compliance by the foreign company with the requirements of s. 274 is no evidence of an agreement to submit to the jurisdiction. The winding up of the Rossia Co. in this country leaves the matter where it was. As to setting aside the judgment, that raises the question whether the service was valid under the statute, but the summons has been dismissed on a technical point. It is said that, if C. applies to upset a judgment obtained by A. against B., C. must serve both A. and B.: Jacques v. Harrison. (4) But the Lords Justices were not there dealing with the case where it was in dispute whether one of the parties did in fact exist. The judgment obtained against the Rossia Co. assumed the existence of the company and, as the judgment would embarrass the appellants on the question whether there was such a company

(1) (1828) 4 Bing. 686.

(2) (1870) L. R. 6 Q. B. 155.

(3) [1894] A. C. 670, 684.

(4) 12 Q. B. D. 165.

capable of being served, this summons was necessary. It is farcical to insist upon the applicant serving a party who he maintains does not exist.

Rayner Goddard K.C. and S. O. Henn Collins for the respondents. The question of the existence of the company at the date of the judgment is concluded by the decision of this House in Russian Commercial and Industrial Bank v. Comptoir d'Escompte de Mulhouse. (1) The respondents having served the company through its accredited representative in this country in accordance with the provisions of the statute, they are entitled as judgment creditors to garnishee all debts due to the judgment debtors. There is no evidence that this company has ceased to do business in this country, but, supposing it has, so long as the company allows Collins's name to remain on the file so long is it bound. Collins at all material times was held out by the company as the person authorized to accept service on its behalf, and during that time service on him was effectual against the company. The English creditor is not concerned with the domestic relations between the company and its representative: cf. Wright v. King. (2) As to the objection founded on the risk to the appellants if the garnishee order is granted, the Courts of this country ought to assume that the Courts of Russia, a power recognized de jure by His Majesty's Government, would recognize the discharge in accordance with English law of debts due in Great Britain. The doctrine had its origin in Martin v. Nadel (3), but there the debt was not payable in this country at all, and the ground of the decision was that, as the debt was not locally situate in this country, payment in this country would not effect a discharge in Berlin. Sea Insurance Co. v. Rossia Insurance Co. of Petrograd (4) is also distinguishable, because there was there no effective service. The Rossia Co., by establishing itself in this country and appointing an authorized representative to accept service, must be taken to have agreed to submit to the jurisdiction: Bank of

(1) [1925] A. C. 112.

(2) (1846) 9 Beav. 161.

(3) [1906] 2 K. B. 26.

(4) 20 Ll. L. Rep. 308.

Australasia v. Harding. (1) The English business of the Rossia Co. being in liquidation in this country, and the liquidator having declined to attack the judgment, there can be no objection to enforcing the judgment by attaching the debts due to the judgment debtors. As to setting aside the judgment, the garnishee has no interest in the matter; it matters not to him whether he pays A. or B.

Sir John Simon K.C. in reply. Assuming that there ever was an agreement by the company to be bound by a judgment obtained by service on Collins, that agreement is not binding after the company has ceased to be a trading corporation at all. The representative character of the company's agent is destroyed by the company going into liquidation: Stirling v. Maitland. (2) The whole of the machinery of s. 274 is limited to such time as the Rossia Co. is carrying on business. The Act contains provisions for the removal of dead and moribund companies in England, but there are no similar provisions as to foreign companies: see ss. 195 and 242.

[He also referred to VallŽe v. Dumergue. (3)]

The House took time for consideration.

1926. July 29. VISCOUNT CAVE L.C. My Lords, this case arises out of the confiscatory legislation of the Government of Soviet Russia. [His Lordship stated the facts.] The first point made on behalf of the appellants is that, when the respondents issued their writ and obtained judgment against the Rossia Co., that company had by virtue of the decrees of the Soviet Government ceased to exist, and accordingly that no judgment could be obtained against that company upon which to found garnishee proceedings. In my opinion this point is disposed of by the decision of this House in the case relating to the Russian banks (Russian Commercial and Industrial Bank v. Comptoir d'Escompte de Mulhouse (4)), in which it was held that the parallel decrees of the Russian Legislature affecting the banking companies

(1) (1850) 9 C. B. 661.

(2) (1864) 5 B. & S. 840.

(3) (1849) 4 Ex. 290.

(4) [1925] A. C. 112.

in Russia had not the effect of dissolving those companies but only put them into liquidation. The difference between an order for the liquidation of a company and an order for its dissolution is familiar to all lawyers, and is fully recognized in the affidavit made in this action by M. Krougliakoff (a Russian lawyer) on behalf of the appellants. A company which has been dissolved no longer exists as a corporate entity capable of holding property or of being sued in any Court; but a company in liquidation, although the administration of its affairs has passed to the liquidator, retains its corporate existence. If the liquidation should be annulled, the company will resume its powers; and in the meantime it retains its title to any property not taken away from it - including (in the present case) the property and rights of the company in countries foreign to Russia, which are not effectively taken from it by the Russian legislation. In my opinion the decrees for nationalizing insurance companies in Russia which have been put in evidence in this action are at least not stronger than the decrees for nationalizing the banking companies which were considered in the case of the banks; and accordingly the insurance companies, like the banking companies, have not been dissolved.

But it is said that, assuming this to be so, the judgment is still defective as having been obtained under a writ served upon Mr. Collins after the Rossia Co. had ceased to carry on business in this country and after his notice of March 22, 1923, had been sent to the registrar and entered on the file, and accordingly that a garnishee order obtained under that judgment is open to attack. My Lords, I do not doubt that, if it were proved that the writ was not duly served and accordingly that the judgment was liable to be set aside at any time, the Court might well, in the exercise of its discretion, refuse to treat the judgment as a sufficient foundation for a garnishee order; for it would be inequitable to put the garnishee to a real and substantial risk of having the proceedings set aside and being called upon to pay the judgment debt over again: see Martin v. Nadel. (1) But it appears

(1) [1906] 2 K. B. 26.

to me that there are two answers to the argument put forward on behalf of the appellants.

In the first place Mr. Collins' name remained upon the file as representing the Rossia Co. at the time when the writ was served upon him. Whether any proceeding was open to him by which he could without the concurrence of the Rossia Co. have removed his name from the file, it is unnecessary now to consider; for neither he nor the Rossia Co. took any proceeding for that purpose, and he contented himself with serving a notice which, though no doubt given in good faith, was incorrect - namely, that the company had ceased to exist. Further, there is evidence that, long after the Rossia Co. had ceased to carry on business in this country and had been put into liquidation; Mr. Collins was conducting a correspondence on behalf of that company. In these circumstances I do not think that the notice given by Mr. Collins was sufficient to relieve him from his position as the representative of the Rossia Co. for the purposes of the Act or to nullify the nomination of that gentleman as the person to receive service of process on behalf of the Rossia Co.

But there is a further answer to the appellants' argument. An order to wind up the Rossia Co. has now been made under the Companies Act, and the liquidator on inquiry being made of him by the direction of the Court of Appeal informed that Court that he had fully investigated the matter and did not propose to contest the validity of the judgment obtained by the respondents against the Rossia Co. In view of this statement it appears to me that the validity of the judgment in this country is established beyond controversy. It is said that this is not enough to free the appellants from risk; that it is conceivable that at some future time they may desire to set up business in Russia and may acquire property there; that in that event the Russian Government, refusing to recognize the judgment and garnishee order as valid, may require the amount paid under the garnishee order to be paid over again; or at least that, if the appellants should seek to recover from the Russian Government any moneys

owing to them from other insurance companies which have been nationalized, the Russian Government may seek to set off against those claims the amount of the judgment debt. My Lords, I do not think that this supposed risk, which rests upon a series of hypotheses, is a real and substantial danger. It must be assumed that the Russian Government will be prepared to act in accordance with the rules of international law; and it appears to me that those rules would require the Russian Courts to recognize the judgment as effective. No doubt it is the general rule that a judgment obtained against a foreign defendant not resident or present in this country in an action in which he has not appeared need not be recognized by the Courts of his own country; but this rule does not apply where the defendant has expressly or impliedly agreed to submit to the jurisdiction of the Court by which the judgment was pronounced. A good instance of such submission is to be found in the case of VallŽe v. Dumergue (1), in which it was held that a defendant who was a shareholder in a French company and had under compulsion of French law elected a domicil in France at which proceedings relative to the company might be served upon him, was bound by service at that address and by a judgment obtained in his absence after such service. In like manner it appears to me that the Rossia Co., having in accordance with the Companies Act put upon the file the name of a person authorized to accept on its behalf service of any process, thereby submitted to the jurisdiction of the English Courts and is bound by the judgment obtained in those Courts.

There is this further consideration. The order made in this country for the winding up of the Rossia Co. is undoubtedly effective so far as the English assets are concerned; and this being so, the liquidator, who might have given a receipt or discharge for the appellants' debts, was at liberty to admit the validity of the judgment and of the garnishee proceedings. In effect he has done so, and no foreign Court has the right to go behind that admission.

(1) 4 Ex. 290.

For these reasons I think that the appeal against the order of the Court of Appeal directing an issue in the garnishee proceedings fails. As regards the appeal against the refusal to set aside the judgment, this appears to me to fail also. Apart from the objection that the Rossia Co. had not been served with this application, the appellants have no such direct interest as to entitle them to apply to set aside the judgment. The liquidator does not attack it, and no reason is shown why it should be set aside. Of course it will be open to the appellants in the garnishee proceedings to argue that nothing is due from them to the Rossia Co. which can be attached; but if this argument should fail the not undesirable result of the proceedings will be that a sum due in England from an English company to a Russian corporation will be appropriated to the payment of a debt owing in England by that corporation to another English company.

On these grounds I am of opinion that the Court of Appeal came to the right conclusion in this case, and accordingly I move your Lordships that this appeal be dismissed with costs.

LORD SHAW OF DUNFERMLINE. My Lords, I agree.

LORD SUMNER. My Lords, two orders made in chambers form the subject of this appeal. The first dismissed the present appellants' summons to set aside a judgment recovered by the present respondents against a third party, the Rossia Insurance Co. This being a judgment to which the applicants were not parties, it has been held on the authority of Jacques v. Harrison (1) that they were not competent to ask that it should be set aside. Jacques v. Harrison (1) is a decision of the Court of Appeal on a point of practice, and it has been followed without question for over forty years. It would require strong grounds indeed to induce your Lordships to disapprove it now. For my part I think that it is correct, and, accordingly, that the summons to set aside this judgment was rightly dismissed.

(1) 12 Q. B. D. 165.

The second order was one refusing to make absolute a garnishee order, obtained by the present respondents as judgment creditors against the appellants, who are indebted to the Rossia Insurance Co. The Court of Appeal made the order absolute. The present appeal is mainly supported on grounds relating to the discretion which is exercisable in garnishee proceedings, but in one respect at least reliance is rightly placed on matters which would have also gone to the merits of the application to set the judgment aside. The appellants say that the Rossia Insurance Co. has been dissolved and that, accordingly, they owe it no debt. Whether or not the money formerly due to it is now due to the Crown as bona vacantia, the Crown is not a claimant or a party to these proceedings. Upon the question of discretion it is said that the judgment was obtained in such a manner that foreign Courts would not, and would not be bound to, respect it, and that accordingly it was a wrong exercise of discretion to make the garnishee order absolute and so expose the appellants to the risk of being compelled by a foreign tribunal to pay over again.

The main question is whether the judgment is one to which, according to the current of English decisions, foreign Courts of justice may be expected to give effect. The expectation is not one of fact depending on the probable conduct of the Courts of this or that country, but is one of law, based upon the consideration for the judicial proceedings of other countries, which legal administration, wherever situated, ought to adopt and observe in the interest of justice generally.

The respondents are judgment creditors of the Rossia Insurance Co. in virtue of proceedings in the High Court commenced by service of the writ on the person, whose name was placed and is still to be found on the companies' register pursuant to s. 274 of the Companies Consolidation Act, 1908. No appearance having been entered after this service judgment was in due course signed. It is regular under the practice of the High Court, but to a foreign Court it would in itself be a judgment in absentem against a defendant

company not incorporated in His Majesty's dominions. The question whether the company was resident in the United Kingdom down to and at the time of service has not been raised. The question argued was this: Was the registration of Mr. Collins's name, continuing as it is to the present time, a submission to the jurisdiction of the High Court on the part of the Rossia Insurance Co. at the time of the service of the writ?

Prior to December 13, 1917, the Rossia Insurance Co. had done reinsurance business in London under treaties with the appellants, and it may be with other underwriters, and more recently it had undertaken the business of underwriting original insurance risks on its own account. For both classes of business it employed Mr. Collins as its agent, under the title first of secretary and then of manager, and it had an office in the City, where the business thus established was carried on in its name. To satisfy the requirements of s. 274 Mr. Collins registered his name on December 13, 1917.

My Lords, I think that in itself this constituted a complete submission to the jurisdiction of the High Court, revocable only by the company's own act. With the doubts that have been raised as to the authority of Mr. Collins and to the continuance of this submission on other grounds I will deal presently. The section is legislation of a character which has long been recognized as valid in English law (Bank of Australasia v. Harding (1)), and it deals with the case of a company incorporated outside the United Kingdom as the Rossia Insurance Co. was, but establishing a place of business inside the United Kingdom, as it had recently done. It imposes on such a company sundry "requirements," as follows: "shall file with the registrar of companies the names and addresses of some one or more persons resident in the United Kingdom authorised to accept on behalf of the company service of process and any other notices required to be served on the company; and, in the event of any alteration being made .... in the names or addresses of any such persons as aforesaid, the company shall within the

(1) 9 C. B. 661.

prescribed time file with the registrar a notice of the alteration" (s. 274, sub-s. 1 (c)).

Compliance with these requirements is secured by fines, which in case of the continuance of the offence are heavy, and may be inflicted not only on the company but on its officers. One plain object of the provision is to protect the company's British creditors by obtaining for them ab initio the means of serving process in this country, free from the inconvenience of seeking out the foreign company in its country of incorporation. I think further that, having submitted to the jurisdiction before and at the commencement of the proceedings, the company must be deemed in the absence of any provision to the contrary to continue to submit to the jurisdiction throughout, and that this judgment, signed after due service in default of appearance, is one which is binding on the foreign company and ought to be so regarded in all foreign civil jurisdictions.

The appellants challenge this conclusion on three special grounds; first, that, before Mr. Collins registered his name, the Rossia Insurance Co. had been effectively dissolved; second, that, before he registered his name, his entire authority to do anything on behalf of the Rossia Insurance Co. had determined; and, thirdly, that before the respondents' writ was served on him, he had revoked his own consent to act on behalf of the Rossia Insurance Co., and, having done what he could to nullify the appearance of his name on the register, was no longer a person "authorised" to accept service on behalf of the company within the section. Accordingly it is said, the service of the writ on him by the respondents did not affect the company or found proceedings that could result in an effective judgment against it.

Your Lordships decided last year that the decrees of the Soviet Government of Russia, which then were textually before you, did not in the case of banking companies dissolve the companies themselves, but only stripped them of their assets and destroyed their goodwill by making banking a state monopoly, while at the same time they deprived the shareholders of their shares. In these decrees not only the

word "dissolution," but the thing itself was carefully avoided, no doubt for solid practical reasons. The corresponding decrees relating to insurance companies are now before your Lordships, and they prove to differ from the others in words only. The substance and effect are the same, and the Rossia Insurance Co. accordingly is still in being.

M. Krougliakoff, the only Russian lawyer who made an affidavit, says that the power of attorney given to Mr. Collins in 1912 expired, according to pre-revolutionary law, in 1915. He does not say that authority could not be legally conferred upon or continued to Mr. Collins otherwise than by the renewal of the power of attorney. Mr. Collins himself was clearly unaware down to 1923 that his authority to act for the Rossia Insurance Co. had come to an end. For three or four years he acted as agent for the company and was in regular communication with it, and he continued to do such business as there was to be done and maintained some relations with the superior officials of the company as opportunity offered after the revolutions of 1917. I do not think it is proved that by Russian law, whether pre-revolutionary or post-revolutionary, he had no authority all this time to do on the company's behalf all that he ostensibly did for it, nor do I see any reason why the question of his authority to carry on in London the business established here by the company should not be determined by English law. I think that down to the service of the writ he was in fact, as he purported on the companies' register to be, the Russian company's agent, authorized among other things to accept on its behalf service of process issued at the suit of English creditors.

Early in 1923 Mr. Collins was served with a writ on behalf of a creditor of the Rossia Insurance Co. other than the respondents, and then consulted his solicitor upon the question whether he had still any right in fact to represent the Rossia Insurance Co. The ground of doubt, as appears from a letter written by his solicitor to the registrar of companies on March 5, 1923, was the above mentioned Russian decrees, which were then supposed to have dissolved the Rossia Insurance Co. The practical question was whether Mr. Collins

could or could not enter an appearance for that company, or whether steps should be taken to remove his name from the register, where it still stood as their representative. Eventually, for what it might be worth, another letter, written by his solicitor on March 22, was placed on the companies' file, stating that the Rossia Insurance Co. had ceased to exist as a separate entity. This it is now clear was an error. No other reason was ever given for Mr. Collins's desire to have his name removed. It is evident that, if the Rossia Insurance Co. still existed, he had no objection to continue to represent it as before. In any case there his name was and the Rossia Insurance Co. had made no alteration in the register such as s. 274, sub-s. 1, provides for. Such was the condition of affairs as regards Mr. Collins, when the respondents' writ was served. I think the service was valid and that Mr. Collins had authority to enter an appearance, which, if he had been otherwise advised, he could and would have validly exercised.

Furthermore I notice that Mr. Collins has not proved when the business of the Rossia Insurance Co. in London actually ended. Its reinsurance treaties were kept on foot till the end of 1920, and in 1921 Mr. Collins wrote as its manager from its address in London to the registrar of companies, saying that when its general manager came to London in February, as he was expected to do, steps would be taken to furnish the balance sheet required. His solicitor repeated this assurance in April, adding that it was now possible to renew business negotiations with Russia. Even when the respondents' writ was served on Mr. Collins and was returned by his solicitor, the ground taken was only the dissolution of the Rossia Insurance Co. by the Soviet Government's decrees, not the de facto winding up of its English branch and all its operations. All the solicitor could say as to this was, "I must think the problem out." As the evidence stands the English branch of the company's business was still living and established in London, though no doubt it chiefly lived in hope.

Master Ball stated in writing his reasons for refusing to

make absolute the garnishee order nisi. Fraser J. affirmed his order without any formal judgment. I agree with the Court of Appeal that the learned judge must be deemed to have adopted the learned Master's reasons, and, as those reasons were reasons of law and were erroneous, because he had misapprehended the effect of the decision in Sea Insurance Co. v. Rossia Insurance Co. of PetrogrAd (1), and thought wrongly that it was on all fours with the present case, the Court of Appeal were right in holding that no question arose of interfering with the discretion of the judge at chambers.

Thereupon the Court made the order now appealed from, and it is contended that in so doing they exercised their discretion wrongly, for, in the circumstances, such an order was inequitable, since it exposed the appellants to the risk of being compelled to pay a second time whatever they might pay to the judgment creditors here under the order of the Court of Appeal.

This question of risk is presented in two different ways. The affidavits for the appellants virtually say, "if we go to Russia, what will happen to us there, when this garnishee order has been made absolute?" Scrutton L.J., in a dissentient judgment, virtually says, "no such order should be made, for we cannot be sure that the Courts of Russia, or indeed foreign Courts generally, will take the same view as we do of the binding effect of this judgment, which has been signed here in default of appearance."

To these objections I think that two answers may be made. The first is that, so far as Russia is concerned, the risk would be self-sought; the second is that, for any practical purpose, it cannot be estimated and may well be non-existent. The business of the appellant company is confined, as far as I have gathered, to insurance. For the present, insurance business is in Russia a Government monopoly. The appellants cannot re-establish themselves in that business in Russia, so as to be exposed to proceedings there in respect of this debt, until the Russian Government has abandoned or at least has altered its law relating to the insurance monopoly.

(1) 20 Ll. L. Rep. 308.

When it does so, other changes may occur at the same time, which may remove all the risk which the appellants apprehend. It may be that debts are due to the appellants in Russia, which they would fain collect there, and that the risk of having the debt, due from them to the Rossia Insurance Co., enforced by the Russian Courts is a risk, which in that case they would have to run. I notice, however, that M. Krougliakoff, though he argues learnedly and with skill the case for dissolution of the company and determination of all its agencies, does not say that the rules of law, which he invokes, are rules which are or would be enforced or recognized in courts of civil jurisdiction in Russia at the present time, or even that there are any such courts at all. As for the view, that foreign Courts generally cannot be expected to recognize judgments obtained here under specific legislation and particular circumstances, that raise an arguable doubt as to their validity, I do not think that this is a ground for a discretionary refusal to make the garnishee order absolute, when once it has been decided here that such judgments have been regularly obtained after an effective submission to the jurisdiction on the part of the defendants. In that case foreign Courts ought to recognize the judgments, and we must presume that they will do so. It is not justice to the garnishor to deny him his regular remedy for fear that, somehow or other, the garnishee, having passed beyond the jurisdiction of the Courts of this country and the protection which the garnishee order will always here afford him, might find himself caught in some foreign Court or country less willing than should be the case to recognize those obligations which arise under the so-called comity of nations. The risk to the garnishee, which it is inequitable to expose him to under a garnishee order absolute, must be a real risk: Sea Insurance Co. v. Rossia Insurance Co. of Petrograd. (1) A mere speculative or theoretical hazard will not do.

My Lords, I will only add that the issue which the Court of Appeal directed to be tried in my opinion sufficiently

(1) 20 Ll. L. Rep. 308, 309.

protects the appellants, and that their appeal should be dismissed.

LORD PARMOOR (read by LORD SHAW OF DUNFERMLINE). My Lords, a Russian company, known as the Rossia Insurance Co., started an insurance business in Russia in the year 1881, and carried it on, under a series of Russian charters, of which the most recent is dated 1915. In the year 1912, the Rossia Co. opened a branch in England, and, consequently, came under the obligation, imposed by s. 274 of the Companies Act, 1908, to file with the registrar of companies the names and addresses of some one or more persons resident in the United Kingdom authorized to accept on behalf of the company service of process, and any notices required to be served on the company.

On December 17, 1917, the name of A. J. Collins was registered under s. 274 of the Companies Act, 1908, as a person authorized to accept, on behalf of the Rossia Co., service of process, and any notices required to be served on that company. A specially indorsed writ was regularly served on Collins, and the respondents, in default of appearance, obtained judgment for 4513l. 0s. 3d.

In the course of their business in this country, the Rossia Co. had entered into a number of reinsurance treaties with the appellants. Any sums due from the appellants, under these treaties, were payable in England. On December 20, 1924, the respondents obtained a garnishee order nisi attaching debts due from the appellants, in respect of business transactions under the reinsurance treaties. The respondents, as judgment creditors, applied to make the garnishee order absolute, and the appellants, as garnishees, applied to set aside the judgment. Their applications came on for hearing before Master Ball in chambers on February 25, 1925. He refused to set aside the judgment. This decision was confirmed by the judge in chambers, and the Court of Appeal. The accuracy of this decision was not seriously disputed before their Lordships. There is no ground for interfering, under this head, with the decision of the Courts below.

The application on behalf of the judgment creditors, to have the garnishee order nisi made absolute, was dismissed by the Master, and his order was confirmed by the learned judge in chambers. The making of a garnishee order is discretionary (Martin v. Nadel (1)), and in an ordinary case the Court of Appeal does not interfere with this discretionary power; but, as stated in the judgment of Bankes L.J., there appears to be an all-important distinction between the present case and that of Sea Insurance Co. v. Rossia Insurance Co. (2), which the Master thought he ought to follow, as applicable to the present case. In the former case the service was effected out of the jurisdiction, whereas in the present case it was effected within the jurisdiction under the provisions of s. 274 of the Companies Act, 1908. To use the words of Bankes L.J., this is a difference of overriding importance.

My Lords, in the case of actions in personam, in which a writ has been regularly served on foreigners or foreign corporations, when present in this country, and a judgment has been obtained, it seems to be clear, as a general rule, that, under the obligations of that branch of international law, which governs the application of foreign judgments, other countries, whose Governments have been recognized de jure and de facto by the Government of this country, will accept the jurisdiction of the Courts of this country, and regard their judgments as valid. In the case of such actions, it may also be stated negatively that, where a writ cannot be served on a defendant foreigner, or foreign corporation, when in this country, and no submission to jurisdiction is proved, any consequent judgment has no validity in any other country, on the ground that the Courts of this country have no jurisdiction under international law over the person of an absent foreign defendant. In other words, the right to serve a writ, in an action in personam, on a foreign defendant, only becomes effective, as a source of jurisdiction, to be recognized in other countries when, at the date of service, such defendant is within the territorial jurisdiction

(1) [1906] 2 K. B. 26.

(2) 20 Ll. L. Rep. 308, 309.

of the English Courts. The Privy Council decided in the case of Sirdar Gurdyal Singh v. Rajah of Faridkote (1) that no territorial legislation can give jurisdiction in a personal action which any foreign Court should recognize against absent foreigners owing no allegiance or obedience to the Power which so legislates. Lord Selborne in delivering judgment says: "In a personal action, to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign Court, to the jurisdiction of which the defendant has not in any way submitted himself, is by international law an absolute nullity. He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the Courts of every nation except (when authorized by special local legislation) in the country of the forum by which it was pronounced": cf. Emanuel v. Symon (2); Rousillon v. Rousillon. (3) The Rossia Co. was, for the purpose of the service of a writ, within the jurisdiction of the English Courts, when the writ in question was served, seeing that it was regularly served on Collins, a person registered under s. 274 of the Companies Act, 1908, as a person authorized to accept on behalf of the Rossia Co. service of process, and any notices required to be served on that company. The main object of s. 274 is to take away any difficulty in the service of a writ on foreign corporations carrying on business in this country, and in effect to place a foreign corporation for this purpose on the same footing as an English company, and liable to the service of a writ under a similar form of procedure. There is an additional reason which brought the Rossia Co. within the territorial jurisdiction of the English Courts at the time when the writ was served. The Rossia Co., by filing with the registrar of companies the name and address of Collins, submitted voluntarily to the jurisdiction of the English Courts and, on this account, cannot subsequently be heard to object to such jurisdiction.

The appellants raised two points as either displacing the

(1) [1894] A. C. 670, 684.

(2) [1908] 1 K. B. 302.

(3) (1880) 14 Ch. D. 351.

principles stated above, or at least throwing a doubt on the regularity of the service in this case. It was said that although Collins was registered under s. 274 of the Companies Act, 1908, his name was only retained on the register against his will, and in default of any effective method of removal. Collins did attempt, without success, to disclaim his position as representing the Rossia Co. in this country, but so long as his name remained on the register, a service on him was equivalent to a service on the Rossia Co., and the Rossia Co. remained liable to the territorial jurisdiction of the English Court.

It was suggested that there might be some risk that a foreign Court would not feel itself bound by the English decision, and that it was inequitable that the appellants should run the risk of being liable to a double payment. It cannot be assumed that the Russian, or any other recognized Government, will not accept the validity of the service of the writ served on Collins, or that it will not, as a matter of international comity and in accordance with international principle, observe the obligation, that, where a national has taken advantage of the municipal law in order to secure a business footing in this country, the Government of the state, of which such national is a member, will recognize the conditions upon which alone the national obtains that advantage.

An order has been made by Romer J. to wind up the Rossia Co. The service in this case was on Collins, and the Court of Appeal postponed judgment until after the official receiver had had an opportunity to determine what he would do. The Court of Appeal were informed that the official receiver and the solicitor went carefully into the effect of the judgment, and came to the conclusion that they could not attack it. There appears, therefore, to be no reason to doubt that the judgment was properly obtained. In English law it cannot be disputed that a creditor, who has obtained a garnishee order in respect of a debt owing from a company prior to the date of its liquidation, has a security in priority to the general creditors. The effect, therefore, of dismissing the appeal of the garnishees would not prevent the respondents

claiming in the liquidation proceedings, but would only operate to deprive them of the opportunity of becoming secured creditors. Since the Government of this country has recognized the present Government of Russia, both de facto and de jure, there appears to be no difference in principle between the present case and the case of Swiss Bank Corporation v. Boehmische Industrial Bank. (1) In my opinion the appeal should be dismissed with costs.

LORD BLANESBURGH. My Lords, the enactment contained in s. 274 of the Companies (Consolidation) Act, 1908 - extended, if not already applicable, to foreign assurance companies by s. 19 of the Assurance Companies Act, 1909 - is of comparatively recent origin. It appeared first as s. 35 of the Companies Act, 1907. For many generations before that, of course, foreign companies in great number had been established in this country. And such companies were liable to be sued here like any other resident, whether the cause of action did or did not accrue within the Jurisdiction: Logan v. Bank of Scotland (2); Haggin v. Comptoir d'Escompte de Paris. (3) Service of the writ on the principal officer of the English branch was sufficient service on the company; service of process at the head office abroad was unnecessary: Newby v. von Oppen. (4) It was essential that business for a substantial time should have been carried on here at a fixed place, and through some person who conducted it as the company's representative. These conditions fulfilled, the company was for that period treated as resident within the jurisdiction for the purpose of service of a writ. Dunlop Pneumatic Tyre Co. v. Actiengesellschaft fŸr Motor und Motorfahrzeugbau vorm. Cudell & Co. (5) And Order IX., r. 8, which designates in such a case the proper officer to be served, applies "in the absence of any statutory provision regulating service of process" as much since the Act of 1907 as before it.

(1) [1923] 1 K. B. 673.

(2) [1904] 2 K. B. 495, 499.

(3) (1889) 23 Q. B. D. 519.

(4) (1872) L. R. 7 Q. B. 293.

(5) [1902] 1 K. B. 342, 349.

The outstanding characteristic of these requirements is that any authorized service has to be made upon an officer - a head officer - whose knowledge will presumably be that of the company he represents - a very necessary qualification if a default judgment following upon a service, which necessarily can never be personal, is to have any extraterritorial recognition. The requirement, however, is based on a principle of much higher sanction. All provisions with reference to service of process upon artificial persons are adequate only to the extent to which in their effect they approximate to that produced upon an individual by service personally made upon himself. If they are without such effect, they have failed of their purpose and might as well never have been fulfilled.

I do not find that these very reasonable requirements of the ordinary law with reference to the service of process on foreign companies carrying on business in this country were an occasion of stumbling or embarrassment to intending plaintiffs. Sect. 35 of the Act of 1907 did not, so far as I can find, emanate from the mercantile community. Much more probable is it that the section as a whole was the work of the income tax authorities, and that when the position in this country of these foreign companies was being surveyed for other purposes the occasion was taken by sub-s. 1 (c) to select as a proper person for service of process on such a company, one whom the company was itself required to designate for that purpose. The selection was well made. In the general case such service would or should be effective to achieve the purpose of all such service. In few cases would it be legitimate for any company to complain if it had in the result been ineffective. But enough has been said to justify the doubt whether Parliament ever intended to authorize as sufficient in every case a service which in a particular set of circumstances would be no more than an idle ceremony. And if, in any case, such appears to be the proper description of a literal compliance with the section and a fortiori to the knowledge of plaintiffs who effected the so-called service, it may become very necessary to inquire

whether to such a case the section on its true construction has any application, and whether, if it has, its provisions are entitled, as applied to the case, to any extra-territorial recognition.

At the outset one thing with reference to s. 274 requires, I think, to be said. The purpose of the section, or, more properly, of s. 35 of the Act of 1907, was not, as for the first time, to lay down the conditions on which a foreign company might establish itself for business purposes here. I notice that Sargant L.J. in his Judgment describes the Rossia Insurance Co. as one which, being desirous of carrying on business in this country, was "precluded from doing so by the Companies Consolidation Act, 1908, except upon the terms of complying with s. 274 of that Act." Bankes L.J. expresses the same idea in another way. "As a matter of international comity," he says, "I imagine that any civilized nation whose national takes advantage of our municipal law in order to secure a business footing in this country will observe and recognize the conditions upon which alone the national obtains that advantage." With unfeigned respect, I cannot agree that these are true views of the clause, and I feel very strongly that if they be not excluded from influence, the proper construction of the provisions of the section is likely to be endangered. Sect. 274 is in truth one of many scattered all over the Act, which impose a prescribed duty or obligation and secure the observance or performance of it by the imposition of penalties in case of default. Since the case of Wright v. Horton (1) the effect of these provisions of the Act has been free from doubt. Liability to the prescribed penalty is the only consequence of breach. If a limited company omits to keep a register of mortgages as required by s. 100 of the Act, the effect is not, as was before Wright v. Horton (1) wrongly supposed, to make the unregistered debenture even of a director invalid as a debenture. To take another instance, a limited company may acquire a right to protection of a trade name used separately from its

(1) (1887) 12 App. Cas. 371.

corporate name although such user is in contravention of s. 63, which requires every such company to paint or affix its name on the outside of every office or place in which the business of the company is carried on: Randall v. British and American Shoe Co. (1) If a company again - a case even nearer the present - fails to have a registered office to which all communications and notices may be addressed or fails to give to the registrar notice of its situation, and of any change therein, all as required by s. 62, then another form of service than that prescribed by s. 116, which presupposes a registered office, will be permissible and resorted to - a useful fact to remember in connection with the present case. But the company will never, as a consequence, be restricted in the exercise of any lawful activity or hindered in the vindication of any of its rights. In all these cases - and there are many others - the company itself or its cognizant directors or managers or other officers or all of them are exposed to penalties, and usually for every day during which the particular default continues. But that is all. If noncompliance with any such requirement is to have further consequences, the section is careful to say so - as, for instance, where mortgages or charges created by a company registered in England or Ireland are not registered with the registrar within the time prescribed by s. 93. In that case not only are the company and every director, manager, secretary or other person knowingly a party to the default made liable for penalties under s. 99, but the mortgages or charges are by s. 93 itself made void, as charges, against the liquidator and any creditor of the company.

It will be seen that there is no such provision to be found in s. 274, which is well within the principle of Wright v. Horton. (2)

And, indeed, its limited effect upon the status in this country of the foreign companies to which it applies is well illustrated by the English history as disclosed in these proceedings of the Rossia Co. itself. That company has never failed to be in default under the section. It

(1) [1902] 2 Ch. 354.

(2) 12 App. Cas. 371.

commenced business in this country in 1912; but no registration of any kind was made until December, 1917. Even then the registration was not complete. Never has there been filed a certified copy of the company's charter as required by sub-s. 1 (a), nor, I gather, a list of its directors under 1 (b), nor, at least since 1917, any statement in the form of a balance sheet as required by sub-s. 3 of s. 274. It appears, moreover, that certainly some, and it may be most or all, of the transactions which resulted in the present claims by the respondents against the company, and by the company against the appellants, were entered into when there was no registration at all. Certainly all of them were entered into when there was no sufficient registration. Yet no one suggests that these claims are for that reason unenforceable in this country, either against or by the company. Some one is liable for penalties in respect of these statutory defaults. That is all.

For myself, my Lords, in the determination of this difficult case - for so I regard it - all aid from the view, erroneous as I think, which strongly influenced at least Bankes L.J. must be disclaimed - namely, that s. 274 is entitled to special respect extra-territorially by reason of the idea that upon its terms alone does a foreign corporation "secure a business footing in this country."

My Lords, there is not now, I think, any doubt as to the real issue between the parties to this appeal. Garnishee proceedings are a form of execution, and an order absolute will not be made if the proceedings are based upon a judgment so open to question that any payment made by the garnishee to the judgment creditor would leave him exposed to a real and substantial risk of seeing, in this country, the judgment set aside, or in another country, of finding it not recognized, with the result in either eventuality that payment under the garnishee proceedings might be no discharge of his own debt.

Leaving for separate consideration the effect upon the whole case of the English winding-up order which had not been made when this matter was before the learned Master and the learned judge, that issue in the present case must,

I think, depend upon the question whether the default judgment signed by the respondents in their action is one which on accepted principles of private international law would be recognized as valid by the Courts of any other country applying these principles. The relevant facts are simple. At the date of the writ in the action Mr. Collins' name placed there by himself acting on behalf and with the authority at the time of the Rossia Co. appeared on the file of the company at Somerset House as that of the person authorized to accept on behalf of the company service of process, as prescribed by sub-s. 1 (c) of s. 274. But the evidence, whatever else it may prove, does, to my mind, show that at the date of the writ Mr. Collins had neither de facto nor de jure any authority to represent for any purpose whatever the Rossia Co. as then constituted. And although he gave what according to the English view of the situation was a wrong reason for it, there was on the file a statement by his solicitor equivalent of effect. But the consideration which is more important still, is that the respondents before they proceeded to judgment were informed of what, as I think, has been shown to be the true position as between Mr. Collins and the Rossia Co. Notified by letter of June 6, 1923, from Mr. Collins' solicitor that, for the reasons there given, Mr. Collins had no authority to represent the Rossia Co., and that accordingly he returned the copy writ which had been sent to him by post, the respondents' solicitors on June 7 sent back the copy writ with the statement that they noted all that had been said and that in due course the Rossia Co. would no doubt look after their own interests. To this, on June 8, Mr. Collins' solicitor replied: "Mr. Collins is advised that he has no power or right at the present juncture to act for the Rossia Insurance Co. of Petrograd under the circumstances detailed in my letter to you of the 6th inst. I therefore return your copy writ and must, of course, leave you to take whatever steps you deem advisable." To which on June 11 there was this final reply: Mr. Collins "was the person nominated under the Companies Act to be served with process against the Rossia

Insurance Co. and was therefore served by us with the copy writ. We therefore do not wish to have the copy writ and return it to you and we must leave you to do what you like with it provided you do not return it to us." On the very next day the respondents signed judgment in default of appearance.

Such being the judgment on which these garnishee proceedings are based, the present question is whether any Court outside this kingdom is required by the comity of nations and on proof of these facts to recognize it. I cannot myself think so. Indeed, I am not entirely satisfied that the judgment would even here be held to have any validity if effective steps were taken to set it aside. It is clear that all the terms of s. 274 must not be taken literally. Suppose, for example, that the person named by a foreign company under sub-s. 1 (c) had died before issue of a writ against the company but that that writ had been served by being "addressed to" him "and sent by post to the address which has been so filed." Such service would be within the letter of the section. Would any Court in this country regard it as being within its intendment? I cannot think so. And what if the plaintiffs further knew that the person to whom they had addressed the writ was in fact dead? Is then the present case materially different, where the respondents in full knowledge of the position above stated signed judgment at a date when no kind of notice of the proceedings was or could to their knowledge have been given to any one really representing the company?

Ignoring any case of fraud or trickery - the Courts are strong enough to deal with any such case when it arises - I can myself see nothing in the statute which leaves the provision for service on the named person operative where that person himself, by notification to the registrar, makes it sufficiently plain that all his authority derived from the company is gone. Nor can I find anything in the statute to import that a name once placed on the file can only be superseded by the substitution of another name. This, as I have already suggested, cannot be the case where the

named person dies. Again, I can find nothing in the statute to prevent Mr. Collins, who, duly authorized for that purpose, placed his own name on the file, from notifying with effect when his authority came to an end that his name must be withdrawn. If, as I believe, the form of service authorized by the section was intended to be effective service, it is easier to imply these things than to exclude them. The service upon the named person permitted by s. 274, sub-s. 3, is facultative; it is not obligatory or exclusive, and if the true result of a breach of s. 274 is merely that which I have already suggested, then, just as the mode of service prescribed for foreign companies before the Act of 1907 remains applicable to those companies which do not comply with the section at all, so it is, as it seems to me, more in accord with principle, so soon as it is made apparent that the "name" is no longer an effective name for the purpose for which it was filed, to hold that service on the company must be effected as if the obligation now broken had never been performed at all, rather than to hold that a form of service known to the plaintiffs before judgment to be entirely ineffective as a service on the company, must be supported as being authorized by the section.

But if contrary to this view the terms of the statute are such as to justify such a service, and if in this country it must be recognized as valid, then just as I think no such service on an English company in a foreign country would in like circumstances be recognized here if that service were based upon a foreign statute to the like effect, so it cannot in my view be expected that any such service here if challenged by the company would be recognized in a foreign country, whether Russia or another. I cannot myself believe that it would by a foreign Court be held, that the placing of Mr. Collins' name on the file, as circumstances then were amounted to an agreement or submission by the company to be bound by service upon him in the circumstances with regard to the company and himself and the respondents as these existed and were known when the writ here was served and this default judgment was signed.

Accordingly if the case stood there I should be in agreement as to the proper result of this appeal with Scrutton L.J., Fraser J., and Master Ball.

The balance is, however, to my mind turned in favour of the respondents by the order of Romer J. winding up the Rossia Co., followed as it has been by the inquiry into the respondents' judgment debt made by the official receiver as liquidator and by his decision to take no steps to set it aside or question its propriety. The entire position is thereby, in my judgment, fundamentally changed. It is said that the petition to wind up was served on Mr. Collins just as was the writ in the respondents' action, and that the winding-up order can have no greater validity than the judgment, either in this country or abroad. My Lords, I do not agree. As might be expected from their nature, the permissible powers of the Court with reference to the service of winding-up proceedings, leading to an administration under the Court of a company's property, are wider than those in relation to the service of process leading to a judgment at the instance of an individual. Rule 28 of the Companies (Winding-up) Rules, 1909, will show the extent of the Court's powers in this matter. I cannot myself doubt that Romer J. was completely satisfied as to his power to make the winding-up order, and that the consequential proceedings at least as to all assets locally situate, and amongst these is included the garnishees' debt, are not only completely regular in this country but that they would, at any rate to the extent just stated, be recognized as regular everywhere. It is in the interests of the general body of British creditors regrettable, that the respondents did not themselves proceed by winding-up petition rather than adopt the course which they did.

In the result, however, and in view of the attitude of the official receiver, I think that any payment made by the appellants in the garnishee proceedings would be the equivalent of a payment made to the liquidator himself, and in my judgment the risk of such a payment being successfully questioned by any Court anywhere is too remote to be entitled to judicial consideration.

On this ground, therefore, I am, as to the order absolute, in accord with the motion which has been made from the Woolsack. As to the other order appealed from, I am in entire agreement with the opinions expressed by all your Lordships.

Solicitors for the appellants: Watson, Sons & Room.

Solicitors for the respondents: Thomas Cooper & Co.