SUPREME COURT

Dominion, Volume 8, Issue 2390, 20 February 1915, Page 11

SUPREME COURT

SIMMONS DISMISSED BRITISH EMPIRE PETROLEUM ( COMPANY , In tie Supreme Court yesterday morning, His Honour Mr. Justice Hosk.ing delivered reserved judgment in a summons by the liquidator of the British Empire Petroleum Company to enforce payment of application moneys due by certain shareholders, namely: Mrs. Hadley, of Auckland.; John HardIcy. of Auckland; J. W. Hardley, of Auckland; and Te Heu Hou Tukino, of Wellington. At the hearing Sir John Findlay, K.C., with him Mr. D. R. Hopgard, appeared for the liquidator, while opposition to the summons Was raised by Mr. 11. Myers, on behalf of Mrs. Hadloy, and by Mr. A. W. Blair, oh behalf of I'e Heu Heu Tukino.

The summons had been leaned under Section 226 of the Companies Act, 1908, the liquidator alleging that, the calls were made in the voluntary winding up of the company. It was contended on behalf of Mrs. Hadley and Te Heu Hou Tukino' that the resolution for winding up was invalid. The company was incorporated on April '20, 1912, as a limited company with a nominal capital of £125,000 divided into 500,000, •shares of ss. each. The total number of shares subscribed'for on' the mem-' orandum of association., was : 27,001. Amongst the signatories to the mem-, orandum were: Sir James Carroll for 5000 shares, John Andrew Millar for 5000, and Michael Francis Bourke for 10,000. By the articles these three gentlemen were appointed the first directors. A prospectus was issued by the directors, and the applications for shares;' those against whom the summons is directed, were expressed as enclosing the amount payable on application, and .'as either undertaking or authorising the interim secretary to whom they were addressed to undertake to pay the further 6d. per share'payable on allotment. On 1912, the report required under Section 87 of the Companies Act for' the' purpose of the statutory meeting was signed by two of the directors, Sir. James Carroll and Mr. M. P. Bourkei. The report made no reference to shares paid up .or partly, paid up', , otherwise than in cash,, but; stated, the total shares allotted to. be 111,001. contributing • shares, thus indicating that the shares subscribed for: on tne memorandum of association, (which were 'obviously included- in .thetotal of 111,001) were payable in cash and not in kind,. The amount of: the receipts ;was unly £575 Is. 0d.,. thus (Shewing that the greater portion of the amount then due and payable was outstanding.", On September 28, 1912, the directors' resolved upon a meeting of shareholders for ; October 30, 1912, for the purpose the company in voluntary liquidation. A -mi..', was held on that/late, when, a resolution for winding up was assumed to be. passed, and on September- 28. a meeting • was held which pur'ported'to confirm the resolution as. a special resolution. This resohition'was ignored as invalid.'Fresh steps to the same end were taken in the following year, and on September 17 and October 8. 1913, meetings were •held'which assumed to pass a _ resolution.for winding'up. It was this resolution which'was attacked on the ground/ - amongst others, that- there were not present at either meeting the quorum necessary under.the company's regulations 'to constitute a , meeting. That quorum was five persons personally present,. and holding "or representing by prply,.;not. less than one-fifth of the' shared of -the company actually ■ issued at the time of the meeting.

Referring to tliia fatter in his judgment .yesterday, His 'Honour said:— "There : were six persons ; person ally ' -pre-sent.'-at- the first meetings -arid five;at the second. OF'those present oneach occasion, .Mr. .Millar and .Mr. Bourke were two, so that without, them there would not be a' quorum. It might be noted that Sir James-Carroll. \was represented by proxy'at each meeting. If Mi;'.. Millar and Mr. Bourke, though preseritj should, not have been counted in the quorum, there were;not five'persons present at either meeting; and, if the shares held by dem and Sir-Jaines Carroll corddnot be regarded, one-fifth of the issued capital., was not represented. Now sup to October 30,1912, when the general meeting of was held to consider th 6 resolution to; wind up put forward on the first occasion, nothing had been ..paid to the company on Sir James Carroll's shares. Mr. Millar had paid to "the company only £125, which is entered up in -the register of ( members as' for "application" under the heading' of "tfo. of call." This is the equivalent of sixpence on 5000 shares. Mr. Bcu'rke had paid to the company only' £137 10s., which is entered in • the_ register under a Bimilar heading. _ This is lass than sixpence a share on his 10,000 shares. However, under the same heading, sums are credited to each member as, paid on October 30, 1912, 'as for "allotment." These* sums make up in each case a. sum of Is/ per share on the shares held 1 by each of, the three members named. It appears, however, that in respect of the sums so credited to them on October 30, 1912, cheques" wore handed to the secretary and that these cheques have never beeu presented. . . . In December last the liquidator swore an affidavit ■in which he pointed out that no shares were ever applied for or allotted'to any,of the three persons :named because they had subscribed , to the memorandum of association' for their shares. He also states that, no'call was made in respect of these shares, and con-no-money was owing to the company in respect thereof. Upon this basis it was contended . . . that if

the three persons named had even been liable to pay these' moneys, they were in' fact'paid by the giving of the cheques mentioned. His Honour, after expressing the opinion that the contention could'not prevail, reviewed the'law on the question at length, and went on to say :—"The giving of the cheques gets over any difficulty that otherwise might be suggested as standing in the way of treating tie equitable .liability to account as reduced to a liquidated sum. • The cheques, in my opinion, would be sufficient evidence of an account stated in respecj/ of that liability rendering the money due and payable to the company on/demand. The suggestion now made by the liquidator's affidavit, but not by the directors, that they were not liable to ' pay anything is plainly an afterthoufyit, for, when he was acting as secretary, ho does not-seem to have act-1 ad on that view. ' The suggestion is obviously a. plank thrown out in a shipwreck in the hope of saving the liquidation proceedings.. I therefore hold that, unless by reason of the cheque transactions what was due from the three directors can be treated as paid, they were not entitled to vote it or enter into the computation of tho quorum of the meetings which passed the special resolution to wind up." His Honour drew the;, 'inference from die circumstances that the cheques were not'intended for presentation and were not given in payment, conditional or' otherwise. From His Honour's own experience he knew it was not an infrequent business operation to give a cheque, not intended for presentation, but to stand as a voucher or acknowledgment of an obligation. As the managing executive of the company, the directors had control over the register, and were responsible for tue balance-sheet. In His opinioii, it was contrary to their duty to put themselves in a preferable position to the other shareholders by taking credit for payments, wh.ich were, only represented by- cheques,-and no efficacy oould be "given -to such action. As, therefore,' the amounts due ''and payable to, the company by the'three gentlemen named i were not paid by means of the checiueSj

although tho cheques effectually rendered' those Amounts liquid in form, His Honour hold that there was no quornm of shareholders (entijilod lindor tho company's articles to voto) present at the meoting held to pass tho special resolution for winding up, and that tho resolution was .void, . The summons to enforce payment of the application moneys was theroforo dismissed, the question of costs of the summons being reserved for argument until this morning

LICENSING CASE. An appeal against a decision of Mr. D. G. A. Cooper, S.M., was decided in the Supreme Court yesterday morning by his Honour Mr. Justice Chapman. The point involved is of some importance to hotel liconsees. In the original action, decided in October last, Christopher Jansen, licensee of tho Wellington Hotel, was charged by the _polico (Constable R. R. Miller being the informant) with having on September 28 permitted drunkenness on his premises. The evidence of the police was to the effect that a man named John Saul was found drunk in the bar shortly after 8 p.m. The.licensee was away at Otaki at the time, and the Magistrate was called upon to decide whether he could be held responsible for the. action of his barman (Woodsj in permitting a drunken man to remain in the bar. The Magistrate dismissed the charge on the following grounds :—(-l) That as lie defendant,- with his wife, was absent, and could have no knowledge that ■ the. drunken mail was on his premises, • he could not in law be convicted of per- . mitting drunkenness there. • , (2) That there being no evidence that the defendant, whilst absent, had delegated his authority , ' to the barman, he was not responsible r for the wrongful acts of the barman. Against this decision the Crown appealed- on the'grounds that' it was erroneous in point of. law. ' Mr. H. H. Ostler (of the Crown Law Office) appeared, in support of to a P" peal, and Mr. M. Myers, with Mr. V. B. Willis, appeared for the respondent. In giving judgment, His Honour said: "The' ground of dismissal relied on is the finding of the Magistrate that 'hero., was no evidence given on behalf of the informant that tho respondent (Jansen),. while- absent from' the premises/ had delegated his authority as licensee to the barman, that having no knowledge that a drunken man was on the premises, he could not in law be convioted of permitting drunkenness thereon, and ' that he was not responsible for -the wrongful act of "the' barman'. ; I am •unable to'accede to this as.'a proposition of 1aw.... Evidence of suoh delegation, never is given and seldom would' be. procurable: The . delegation is to be inferred ' from the outstanding ■ facte. ■ It is enough to show that the barman was there 'iind presumably was placed there ae barman by the" licensee. Tho appeal was allowed with £5 ss. costs, 'and- the case was remitted to"j the; Magistrate.

- A WILL INTERPRETED. . His Honour the Chief Justice (Sir Robert Stout) gave reserved judgment yesterday: in an originating summons winch.Had befiQ brougnt to.interpret tne will of - the late Mrs. Emily .Jiebbell. 'lie executor of the will, Ernest Alfred Liddle, 'was 'the plaintiff, and,;. George Mayo iiobbell, of Wellington', and Alice Wheeler,-of Uevonport, .England, were the defendants. .'ihe. will was . bnet: "Now, i'having money deposited in the Equitable Company, do hereby leave to iny brother, Edward Wheeler, the sum of £30, and the balance to my'sister, Alice Wheeler.". .At the time of her death the testatrix had. the sum of £4oi in the fost Office Savings' Bank, in addition to the money deposited with the Equitable Building Company, and the question was w nether this further Bum was • included -uv tho "biilaDoo of . tho nioney, giyen ,to , Alice Wheeler, or wh'eth'er there was intestacy in regard to that 6um, and, if. so, the further question arose as to . whether George Mayo Kebbell .had. a prior'claim under, the Administration Act, 1908, as the liusband of a deceased who died intestate in regard to property'worth less than £500, or whether.-again, the husr band was entitled only •to . two-thirds 'of the 'sum,, and the «ster, Alice Wheeler, to the' remaining one-third. . At the hearing, Mr. W. F. Ward appeared for the plaintiff and Mr. 1. Weave for Alice Wheeler. Mr. G. M. Kebbell appeared in' person to submit to the judgment •of the Court. His Honour held thst the whole of the moneys in the estate_ were included in the balance to be to Alice Wheeler. The position; therefore, is that on account of :the' deaWi of- Edward Wheeler, the whole, of the estate goes to Alice Wheeler. .' ' - The costs.of all parties were orderea to be paid out of tne estate.' . '

IN DIVORCE. His Honour Mr., Justice Hoßking dealt with a number of divorce matters in the Supreme Court yesterday after- . The adjourned case of Olof Johnson v Lillian Johnson, and the adjourned case of Arthur Edward Ridding v. Mabel .Blanche Ridding were ordered to stand over until dates to be fixed. 1 In regard to the reserved .question of costs in the case of' Ruruanga Mahuki v. Hera Ruruanga Mahuki and Tamihane to Tauru, His Honour said he had considered the question, and thought 'the ends of justice would be met if no order were made as to costs. The order nisi was granted, to be .moved absolute in throe months, the interim custody of the ohlldren to remain as at present; Mr. H. F. Ayson appeared for, 'the petitioner,. Mr. D. 'S. Smith'.for-the respondent, and Mr. G. Samuel the co-respondent.. ' ■ ~ Reserved decision was given m-the case of Wilholiina Pedersen v. Ole Nikolai Pedersen,. a decree nisi ■ being granted, to be made absolute in .three months. The petitioner was allowed £20 costs and disbursements. .Mr. H. ~E. Evans appeared for. the petitioner. Corroborative evidence was tendered in v the adjourned case of Joseph Zachariah v. Ada Zaohariah, and His Honour granted a decree nisi, .which may. be made absolute in'four months. Mr. T. M. Wilford appeared for the'. petitioner. ■ • . , Misconduct was the ground on which Iva Caroline ,Fletcher'petitioned for divorce from Harry Fletcher; The' marriage took place at Wel'mgton in 1911. Corroborative evidence having been heard, His Honour granted .a decree .'nisi, to be made' absolute in three months, the petitioner being ' allowed costs, Mr. M. F. Luckie' appeared for the petitioner.