THE BANK OF NEW ZEALAND.

Rangitikei Advocate and Manawatu Argus, Volume XXXVII, Issue 10737, 30 August 1913, Page 5

THE BANK OF NEW ZEALAND.

JUDGMENT OF FULL COURT.

Per Press Association. Wellington, August 29. ■Judgment of the- full Bench in connection with the application made for an originating summons asking the Court to make a declaratory order in the case of . Sidney* Kirkcaldie and Charles Prenderga&t Knight v. the Bank of New Zealand, was.delivered in the Supreme Court this afternoon. The question involved was whether the shareholders of the Bank of New Zealand had power to increse the capital of the Bank by the issue of fresh shares, and the answer of the Court was in the negative. Questions to be decided, and the-answers, by the Chief Justice, were as follows: Question (1) Whether the right and powers of shaieholders of the Bank of New Zealand conferred upon them by (a) the Bank's deed of settlement, (b) section 8 of the New Zealand Banking Act, 186,1 and(o) by section 8 of the Banking Act, 1908, of increasing the capital of the Bank by the issue of new shares, is subject to any, and if so to what, restrictions or conditions. Answer—The shareholders have no power to authorise the issu9 of new shares under any or all of the provisions mentioned. Question (2) Are the shareholders restricted from creatipg new shares conferring on 'the holders thereof rights, privileges or priorities which will affect the rights, privileges or priorities attached to the preference shares mentioned in section one of the Bank of Zealand Act, 1903, or are they restricted in any other or respect? Answer —They are restricted for the reasons already given. Question (3) Will the creation and issue of* increased 3 cap tal in the form of new ordinary shares subjeot to the conditions hereinafter mentioned fall within such or other restriction, if any, on the power of the shareholders to increase the Bank's capital by the issue of ordinary shares.

Answer—This question is already answered in auswer to question 1.

Question (4) Whether ;the shareholders of tne Bank are entitled to direct the directors of the Bank to call tip, or alternatively, whether the directors of the Bank are entitled to call up, the uncalled liability of £3 6s 8d per share subsisting on the ordinary Bhares of the Ban£, and whether upon the payment of such liabilities or any part thereof the amount so paid shall be deemed to "be part of the. capital of ordinary shares and entitled to be treated for the purposes of section 10 of the Bank of Kew Zealand Act and for all other purposes as part of the capital of ordinary shares of the Bank?

Answer-—The direotors 'rnaj, call up the amount of liability, but they cannot be compelled to do so. Question (5) Whether upon the oreation of any new capital the I Bank may be authorised to issue 'shareholders may-direct and resolve that such new capital shall be issued at par or at a premium,' and in particular may determine direct and resolve that the new capital shall be offered in the first instance to the holders of shares numbered 1 to 150,000 both inclusive. and in pro-. portion to the amount of capital held by them, and, in suoh event, whether the holders of "the preference shares" wodld be entitled to require such new capital to be offered in the proportion which the holdings of ■'•'preference shares" bears to the whole share capital of- the company? Answer—Yes, if there was aright toi?sue new shares they might be issued as the shareholders resolved, but there,is no such right, 1 The Court ordered costs as under: —ltem 28 of the scale, £BO, costs qf( motion, and in addition £l6 16s, .for second counsel for, two days was allowed to the Bank. The cost of the Grown were allowed in the sum of £3O. ' Y .