An Important Decision.

Auckland Star, Volume XXI, Issue 237, 7 October 1890, Page 8

An Important Decision.

(FROM ODE SPECIAL CORRESPONDENT.)

London, August 15,

On Saturday last, the appeal of M r Dawes (of the New Zealand Shipping Company) and another shareholder, to have the Colonial Union Company wound up compulsorily under supervision of the Court, was dismissed, the petitioners having failed to show Mr Justice North good reason for interference. This is a serious matter for both the New Zealand Shipping Company and Shaw - Savill's, who will now be at once actively opposed • by the new Tyser Company. His Lordship (Mr Justice North) said the Company was formed to carry on a trade in frozen meat from New Zealand. It carried on that business for about a year with some difficulty, owing to competition. A good many persons soemod to have been desirous of carrying on a profitable trade in the same line, but competition was so keen that with a view to their mutual advantage an agreement was come to between the Colonial Co., Shaw, Savill, and Co., and the Albion Company, and the Now Zealand Shipping Company for limiting the trade of the Colonial Company, as to che number of vessels it was to employ, the voyages each veesel was to make, and the maximum amount of meat each vessel was to carry per voyage. It was provided by the agreement that Shaw, Savill and 00. and the New Zealand Company were to recoup the Colonial Company for the loss of profifc.ifc might have made but for its being fettered by the agreement. This loss of profit was estimated at £2,500 a year. , Unless either company should bo wound up or a resolution with that object passed, the agreement was to continue in force for fiv6 years. Messrs Tyser and Co. (a firm doing a large shipping trade with New Zealand), who were responsible to -a great extent for the foundation of the Colonial Company, about this time made a contract with, persons in Queensland. It was arranged between them and .the British , India" As'sd'cia'tect'Steaniefe that the latter's contribution to the joint adventure should take the form of the acquisition of 10,000 shares in the Colonial Company. From this time the business was carried on under circumstances which the petitioners said were favourable to large profits being made. The other side denied this. Considerable difficulties, it appeared, arose in carrying out the joint agreement, and the Company wrote to Shaw, Savill and Company alleging that the other companies had-not performed their part under the tripartite agreement, and threatening to put an end to it. A new company, called the Tyser Line Company, was formed to take over the Colonial Company on 7th September, 1889. ~ On the 13th September a circular was issued summoning a general meeting to consider, and, if though fit, confirmed an agreement of the 10th September. The directors in this circular stated that the agreement entered into with the two main lines had not been faithfully carried out, and while themselves determining to adhere stricbly to the terms they thought it expedient in the interest of the Company to avail themselves of the proposals of the Tyser Line under which the vessels of the Colonial Company would be chartered by the new company. Amajority of more than one-f,ourth of the shareholders confirmed this agreement at a meeting on 23rd. Thereupon the present petitioners commenced an action against the Tyser Company and the directors, for the purpose of getting rid of the agreement, alleging that the agreement could not be enforced against the shareholders who did not assert to it, that the sale was not bona fide, that the Tysers were directors of the Company, and that the price was inadequate. He (Mr JusticeNorth)held that thesecharges were not warranted, well founded, or warranted by the facts. There was strong evidence that it was as good a price as could be obtained, and a satisfactory explanation !.~u been given why tbe consideration was payable by debentures at a somewhat

distant date. In his opinion the agreement was perfectly bona fide, and ope which was reasonably-and properly obtained. In April notice was given of a meeting to be held in May for the purpose of winding-up the Colonial Company. Ib had been urged that the windingup was determined upon for the purpose of making good what was known to be bad, and getting rid of the proceedings in the action ; but there did not appear to be any evidence in support of such a statement. The meeting was held on the 2nd May, every shareholder being present in person or by proxy, and the resolutions were passed by a majority of 17 to 2. The dissentient shareholders demanded a confirmatory meeting, at which the poll showed 36 shareholders, holding 49,716 shares, voted in favour of the resolutions, as against 3 shareholders, holding 15,512 shares, so that there was more than the requisite majority in favour of the confirming resolutions. Ifc not being suggested that there was any reason why the liquidation should cease to be voluntary, except for the purpose of giving the Court jurisdiction over this agreemenb, he did not see any reason for intervening in the matter. Looking ab all the facts, he was of opinion that the petitioners had nob proved any special circumstances which entitled them to the order asked for, and he therefore dismissed the petition, with costs.