SUPREME COURT.—CIVIL SITTINGS.

Evening Star, Issue 7496, 14 April 1888, Page 2

SUPREME COURT.—CIVIL SITTINGS.

SATURDAY, APRIL 14. (Before His Honor Mr Justice Williams,) Robert Gray (of Nelson) v. The Equitable Insurance Associaton of New Zealand. AND E. 15. CAUGILL, J. HAZLKTT, W. Gregg, A. Scoullar, F. Meenan, J. Hooa, AND H. Guthrik (directors of the said Association). MrW. T. L. Travers (of Wellington), with him Mr F. It. Ghapman, appeared for plaintiff; Sir It. Stout for the Aswehtion ; and Mr A. Bathgate for the directors of the Association. The statement of claim set forth inter alia : That prior to the 21th November, 1882, a prospectus was issued for the formation of the Company. T'at in the said month of November a copy if the prospectus came into plaintiff's hands, and on the 6th of the said month he, without having seen the memorandum and articles of association mentioned therein, but believing that due provision lad been made therein in order to give effect to the allegations contained in the said prospectus, and especially to the allegation that the fire business of the company would be confined to tho colony of New Zealand, and therefore under the immediate control of the directors, and relying upon the said allf gation, made application for 300 Bharcs in the company. That acting in the belief aforesaid and in reliance upon the aforesaid allegation in thepnspectus he accepted the shares allotted to him and paid the allotment, and had since paid all calls made upon him in respect thereof. That plaintiff always believed and understood that the memorandum and articles of associnj tion were not intended to extend and did not in terms extend to authorise the company to carry on fire business in places beyond the colony of New Zealand. That in June, ISS7, he was verbally informed that the company were carrying on fiie business in places beyoud the colony, and in July, 1887, was shown an adveitisemGnt of the company in a Melbourne paper. Trafc until he hecame aware of this fret he verily believed that the fire busim:« of the company was in fact carried ou within the colony of New Zealand only, and was so c.iuied on iiiit.'er the immediate contiol of the directors. That he coinmui.icatcd with a large number of Nelson shareholders, and ail of them profot-sed als-o to have been unaware that the fire buMuess of the company had been extended to places beyond the cilony of New Zealand, and lie and they 1 forthwith to k 'cgal udvica touching tho powers of tho directors to so extend the business of the company. Tho plaintiff claimed (1) that it may be decreed by the Couit that the memolaudum of association of t* e company docs cot authorise tho company or the directors thereof to carry on the fire busincr-s of the said company in places beyond the colony of New Zealand, and that an injunction may be issued by this Court to restrain tho said company from carrying on its fire business in places beyond the colony, or that he may have such further relief as the Court may think fit. Or, in the alternative (2) that if it be found by the Court that the company is cmpowered to carry on the fire business in places bevond the colony, then that the nam-'; of the plaintiff may be taken off the register of shareholders, arid that tho company may bo decreed to repay to the plaintiff all moneys paid by him to the company in respect to his shares therein, or that he rniy have f uch further relief as tho Court shall think fit. The statement of defence set out, first, on behalf of the company, that tho clause in the prospectus stating that the fire business of the company would be confined to the colony of New Zealand was inserted at th". suggestion of one of the provisional directors of the company without its having been finally agreed to by all the promoters, and as there was a favorable opening for carrying on fire business in the Australian colonics, and, as there was nothing in the memorandum and articles of association prohibiting such a course, the directors of the company on or about the Bth day of February, ISS4, commenced the business of fire insurance in the Australian colonies, as they had a right to d>>. The director.) had nut their attention called to the prospectui when they determined to begin business out of New Zealand. That such fire business carried on in the Australian colonies had proved a source of profit to the company. That the plaintiff had acquiesced in the matters complained of, and was estopped by his conduct and delay from obtaining the relief prayed for. On behalf of the directors the statement of defence s-.t out that in all their acts the directors acted bona fide and in pursuance of the powers and provisions of the memorandum and articles of association of the company, and they extended tho fire business to Australia under the powers given them by the 3aid memorandum and articles of association. Our report of the evidence and legal argument will appear on Monday. In giving judgment, His Honor said: Ido not think the plaintiff is entitled to have his name struck off the list of shareholders on the ground that there has been a breach of contract between the company and liinuelf. 1 think the English cises, as, in fact, Mr Travers admitted they did, go completely to show that what has taken place since is a complotc answer to that aspect of the claim; that, according to the English ho should have made himself aware of what were tho tciuis of tho memorandum of association. He has had five years to do that i,i ; ho has drawn three dividends; and when he makes a complaint ou the 27th of May he does not seek to repudiate tho contract to take the shares and the obligation to pay calls on the ground that the company are doing something which they ought not to do; but he, in effect, simply asks the directors not to make the call, to rescind the resolution making the call which they had made, and to discontinue carrying on the business, which, no doubt, he then understood they were carrying on—viz , tho fire business outside the colony, Ido not think there is such distinction between the state of things in the cslony and the fetate of things in England that it can be said that the Knglish cases do not apply. The only point really open is as to whether trading ouside the colony is beyond the scope of the memorandum of association of the company, I am not entirely satisfied about that, and shall take time to look up the cases on that branch of the subject.