AN IMPORTANT CASE.

Manawatu Standard, Volume XLI, Issue 8543, 25 March 1908, Page 5

AN IMPORTANT CASE.

AGAINST LEVIN CO-OP. DAIRY CO.

At the Supreme Court this morning a case was commenced in which William Reed and others (Mr Moore) applied for a writ and mandamus against the Levin Co-op. Dairy Co., Ltd. (Mr Morison). The statement of claim was to the effect that plaintiffs are shareholders in the defendant company, and that the defendant company is a company incorporated under the Companies Act and carrying on business at Levin. The defendant and plaintiffs were at a meeting of the company held on September 7th, 1907, for the purpose of electing directors. The plaintiffs were refused the right to vote at the election on the ground that they were in arrcar with the calls upon the shares Jicld by them in the company. They were not in arrcar with any monies due upon the shares or interest thereon. The piaintil?, William Rood, holds 20 shares in the company jointly with his brother, upon which all money was paid Ui t to the tini9 of the meeting, and was tfct'refore qualified to vote according to the articles of associations William lieed I was x'ominated at the said meeting for > the offi.ee of director, but the nomination i was ret used by the chairman on the jground tL'ajt ho was not qualified as he | did not hold sufficient shares. At the ' meeting the plaintifFs held- proxies from .•absent shareholders, which the chairman refused 10 accept on the ground that they had not been handed in 48 hours before the meeting, notwithstanding, the fact that no such provision exists in the articles of association. Prior to the commencement of these proceedings application' was made by the plaintiffs to the company foi- permission to use the name of the company as plaintiffin these proceedings? but such permission was refused. The plaintiffs therefore ask that the Court declare the election, ,at the said meeting, of the defendants, John Davies and Basil R. Gardner, is void; that the Court issue a mandamus to the company ordering that a fresh election take place in accordance with the rules and regulations of the company; that an injunction bo issued against defendants restraining them from further acting as directors of the company; that the Court declare that William Reed is eligible to stand for election as director of the company; and ]tha> defendants be ordered to pay the costj of the proceedings. For th 3 defence it was held that plaintiffs were in arrears with their share money, and it was denied that they held anv valid proxies from absent shareholders which could be used at a meeting. It was stated that no poll was demanded at the meeting, or if demanded such poll was not in accordance wit lithe articles of association The rest of the state'iients were generally admitted, but for a further defence in the alternative the defendants held tha f before the issue of the writ a general meeting of the shareholders in the • company was held for the purpose of discussing the validity of the action, and.it was resolved at that meeting, without the dissent of one shareholder, "That this meeting of shareholders confirm the business of the" annual meeting of shareholders, and. expresses its desire that legal proceedings should be averted if possible." It was held that this resolution wa< an adoption and confirmation of the election of John Davies and Basil R. Gardner as directors of the company, and that, the plaintiffs were not in any way entitled to the relief claimed in this action

William Reed, dairy farmer, Ohau. stated he was present at the meeting of shareholders at Levin. Some of his co-plaintiffs hold proxies from absent shareholders, which were handed in but were not allowed to be used on the ground that they should have been handed in earlier. The proxies had been accepted at previous meetings up to the eve of- the meeting. Witness then proposed the adjournment of tho meeting for a month, to enable them to enquire as to whether the chairman was right in refusing the proxies, and upon the ballot the proposal was lost and tho proxies' refused. A few days after he got legal advice. About a month after they sent a deputation to the directors, when there was a proposal made to arbitrate on the matter, but subsequently they were asked to wait until after Christinas. In February they served a writ on the company. lie attended a subsequent meeting, but as the writ had been served he did not take any active part in the proceedings. About 40 or 50 shareholders felt aggrieved owing to the action of the chairman. Wit-, ness and his brother held 20 shares, and were also suppliers as specified in the articles of association.

To Mr Morrison: There wore some 40 or 50 shareholders who wore in sympathy with him. Mr Gardner had offered to resign, but. that did not satisfy them, though they did not object to him personally. They had taken no steps to call a meeting by requisition becauso the directors led them to believe that an equable ararngement would bo come to. If it had not been for tho negotiations with the directors they would probably have callcd a meeting of the shareholders. Ho had not told his solicitors to hold over tho writ till after the meeting had been held. (Left sitting.)