LAW REPORTS.

Dominion, Volume 3, Issue 869, 15 July 1910, Page 9

LAW REPORTS.

——*—^ COURT. OF APPEAL. INVESTOR AND MINING COMPANY. REPUDIATED SHAKES. Tc Appeal Court yesterday considered a motion by the Sliort'land Flat Gold Mining Company, Ltd., for an order setting aside a judgment delivered by Mr. Justice Sim in tlie Supreme Court at Auckland. The judgment directed that the name of John Dawson ho removed from the company's register in respect of 1000 shares, .and that it repay him the amount paid for shares. The case was heard by the Chief Justice, Sir Bobert Stout, and Justices Williams, Edwards, Cooper, and Chapman. Mr. C. P. Skerrett, K.C., with whom was associated jfr. C. B. Morison, appeared for the appellant company, and Mr. E. W. Burton and Mr. M. Myers for respondent. , In the Supreme Court Dawson had based his clnim on 'the ground that lie had been induced to take up shares by certain false representations. It had been represented to him, he alleged, that on July 2D, 1909, 80,000 contributing shares in tho Shortland Company were being offered to the public and wore nearly all disposed of; that on July 30, 1909, only 5000 shares remained of the 80,000, and that of this residue, John. Kneebone, a well-known mining investor, was taking 4000, leaving only 1000 shares undisposed of. The actual facts (Daw- ■ son added) were that application money of sixpence per share had only bwn paid in respect of 10,500 shares, that allottment money of sixpence per share was only paid in respect of not more than 200(1 shares. Only 55,000 of tho 80,000 shares had been allotted by the company. It was therefore claimed for Dawson that the allotment to him of 1000 shares was con- . trary to good faith and was in con-, travention Of Section 95 of the Companies Act, 1908. Mr. Justico Sim, delivering judgment in the 'Supreme Court, stated that there was a conflict of evidence as to what was said by tho contracting parties before the application was signed. The question of misrepresentation could not w dealt with satisfactorily until the deponents. had been cross-examined on their affidavits. The question of misrepresentation had not, Jj'owever, been considered, because, in his Honour's opinion, the applicant was entitled to succeed on other grounds. It was unnecessary to consider w.hcther an oral olFct would be sufficient for the purposes of Section 95, for the reason that iho documents issued by the company constituted, in his Honour's opinion, a prospectus within tho moaning of tho Act. The case came, therefore, within tho operation of Section 95 of the Act. The share capital offered to the public was 80,000 shares. Tho directors proceeded to allotment when at most only 56,000 shares had been applied for in any shape or form. They allotted 56,000 shares before the sum payable on application had been naid on anything like that number. There was thus a failure to comply with the requirements of Section 95, and, by virtue of Section S6 Dawson was entitled to avoid allotment if he did so within one month after the holding of the statutory meeting of tho company. This meeting was held on December 10, 1909. Dawson attended and demanded a return of the Bum of JJSO ho had paid in respect of shares allotted. On December 16 his solicitors, by letter, reiterated the demand. On December 18 a summons was taken out to have _the company's' register amended by. striking out Dawson's naW;. Tho only ground taken in the. letter and summons was that Dawson had been induced to apply for tho shares by misrepresentation on the part of Gray. On' March 23 last a second summons was issued, asking'for rectification of the register on the grounds of misrepresentation and contravention of Section 95. Tho decision of the Court of Appeal in the case of Pcarce v. Stevens, 21 M.Z.L.K. 351, established the fact that if a party to a contract had a right to rescind it, the rescission was not rendered.ineffective by tho fact that he put it on a ground which could not be maintained. Mr. Justice Edwards had laid it down in this case that tho repudiating party was not bound to give any reason at all. If, therefore, he did give a reason it was not part of tlie repudiation, but merely so much gratuitous information supplied to his adversary. In his Honour's opinion; Dawson had done all that was necessary to enable him to take advantage of the non-compliance with Section 95. ' . The principal points disputed in the appeal were: (1) Whether the documents issued to the publicly the promoters of the company before its incorporation constituted a prospectus within the ilieaning of the statute. (2) If there is a prospectus, then do the provisions of Section 95 of "The Companies Act, 1908," ajiply; if they do apply, it is admitted that tho appellant cannot succeed. The question under Section 95 is as to whether that section applies at all to si company which lias issued a prospectus prior to incorporation. (3) Apart from any question of the prospectus, it was alleged by the respondents that certain representations weru made to him by u gentleman who was actiiig in tho promotion of the company, and that these representations did not rellect tho facts of the case. Thn question thus arisen as to whether such a misrepresentation .is operative as against tho company for the purpose of enabling tho respondent to rescind his contract to take shares, as ho alleges upon false representations. Mr. Skerrett contended that, in order to bring the case within Section 95, and so --enable Mr. Dawson to rescind his shares, it. was necessary, in the first place, that the prospectus should be issued by the company, and that it should contain an oiler to tho public of shares. In the present case a statement was carried by the promoters, but was not adopted by the directors of the company. Moreover, the document contained no offer to tho public of shares. Counsel for the respondent maintained thai: the judgment delivered by Mr. Justice Sim was based on true grounds, and should not bo set aside. Argument by counsel occupied tho wliolo day, and was 'hot concluded when tho Court rose at 4.30 p.m. The case will be resumed at 10.30 a.m. to-day.

MAGISTRATE'S COURT.

(Before Mr. W. R, Haselden, S.M.) MARINERS' PAY AND SEA CUSTOM. A RATHI3IJ KNOTTY POINT. Reserved judgment was given in tho ease 'brought by the Wellington branch of the Australasian Federated Seamen's Union v. the Wairuu Steamship Company, a claim foi JilO penally for an a!lege<l breach of Hie seamen's award. The particulars of the alleged breach were that on liny 2 last the steamship Blenheim renewed articles at the port of Wellington, and the crew commenced work on the new articles on that date! At the end of the month of May, the defendant company refused to pay Hie crew 30 days wugta ill 30 day* to llio month on i.ho turront articles, this refusal being (it was claimed). contrary to Clauses 2 and 3 of the award. There is nothing in the award or in the articles which indicates how the amount of waves due for a broken month is to bo calculated, hut it was admitted by defendants that\the custom is to calculate the amount due as on a month of .10 days, i.e., if a seaman is discharged after working live days in any one month, his wages being «£7 per month, he would be paid five-thirtieths of .£7, and • this custom is said to be observed whether the particular month contains. 31, 30, or 28 days. In the present ease the crew were paid up to May 2 under the old articles, and at_ the end of the month of May they claimed that, hnving signed the new articles on the afternoon of May 2. they were entitled' to 30 days' pay, as 30. days hod always been considered "a sailor's month." The defendant company, hojvovcr, tendered each seaman .EG i 15s. fid., fcoing payment for 29 days at award rates. Tho men refused to accept that sum. "Ono object of the award," said his "Worship, in the course of givinj judg-

ment, "is to fix definitely tho amount which each seaman is entitled to per month, and if it were intended that tho 'month' referred to in Clause 2 should bo considered as containing thirty days, one would havo expected to find such a fact clearly stated. The clause, however, is silent on the point, and no doubt that is due, as Mr. Young maintained, to tho faot that the matter was never considered or even mentioned to tho Arbitration Court at tho time that the award was framed. The argument that each seaman is entitled to a month 9 wages as fixed by the award because ho has worked thirty days can," continued his Worship, "only be sustained if it is proved that the words 'per mouth, mentioned in Clause 2, mean 'per month of thirty days,' and not 'per calendar month.' The onus of proving this lies oil plaintiff." In conclusion, _ his Worship said that lie was not satisfied that ii Ijrei.eli of tap alfcjed "custom," mentioned during tho hearing, amounted to a breach of tho award. Judgment would, therefore, be given in favour of defendant company, with £1 Is. costs. Leave to appeal was granted. Mr. AV. T. Young appeared for the union, and Mr. A. L. IlcvdmiuL for the defendant company. Two other actions were brought by the union against the Motueka Steamship Co. and Captain Thomas Eckford, ruastoi of the steamer Opawa, respectively, and they arose out of a similar set of circumstances. These cases were held over, pending the decision in Hie case of tho Blenheim. ■ MAINTENANCE CLAIM. Reserved judgment was given in the civil action brought by Annie Maria Baker against her husband, H. J. Balcer, a claim for <£f)5. This amount was for alleged arrears of maintenance, and sundry other expenses arising out of the custody and maintenance of the children. His Worship gave judgment for plaintiff for ,£22 10s., and costs .£4 2s. Mr. Gray appeared for plaintiff, and Mr. Blair for defendant. •COMPLICATED MORTGAGE. C. AV. Tanner, solicitor, . AYellington, claimed -£100 from Francos Jane Hare and Ernest Gilbert Kimberie.v Hare, alleged to l>e due under a sub-mortgage of a sccond mortgage of a property at Island Bay. 'i'lie defence was in the nature of a counter-claim for a recession of tiie mortgage, oil tho ground that defendants had not understood the true intent of it. Mr. Tanner gave evidence to the effect that ho had dealt entirely with Mr. AV. G. Sommerville, a relative of defendants' whom he understood to be a solicitor acting for defendants) Evidence of a complicated nature was given as to various mortgage transactions connected with the mortgage in question, and also as to the sale by plaintiff to the defendants of certain property in ICelburne, _ the defendants alleging misrepresentation in 'connection with this sale. The case was adjourned until Tuesday next. Mr. AV. H. D. Bell appeared for plaintiff, and Mr. Findlay for defendants. CLAIM'FOR RENT. Robert Kollison (Mr. Fair) sued AVilliain Walker (Mr. Dunn) for £2 25., being two weeks' house rent: aliased to bo due. After hearing evidence, judgment was given, for plaintiff for J',l Is., with 6a. costs. THE UNDEFENDED LIST. Judgment was entered for plaintiffs by default of, defendants in tho following cases:—E. W. Mills and Co., Ltd. v. Edward Benge, £2 125., costs, 175.; Louisa I'hilp and John Philp v. Jane Ormsbee, i!sl Hs. 7d., costs .£2 15s. 6(1.; William Hurcombo v. Michael Faul, JSJ 75., costs 95.; Preston and Co., Ltd. v. Jim Lee, M 12s. lid., costs 125.; E. J. Forbes v, T. Cook, -C 4 10s., costs 10s.; same v. James Quinn, JM 10s., costs 10s.; Allcoclt and Co., Ltd. v. R. Renata, ,£8 10s., costs £2 Bs. Gd.; New Zealand Express Company,' Ltd. v. Edmund Montgomery, il, costs 55.; Public Trustee v. Francis John Howard Andrews, £i 195., costs . 10s.; Silverstream Brick and Tilo Company v. H. 11. Knight, J25 155,, costs Bs.; A. J. Hurn and AValter Leslie, .£G 2s. -Id., costs £1 3s. Gd.; Adaliue Teresa. . Ludwig v. Dorees Williams and A\ 7 alter AVilliams, JBI3 Is. 6d„ costs JEI 13s. fid.; P. R. Russell and Co. v. G. M'Mahon, i£lß, costs £2 2s. Gd.; L. D. Nathan and Co., Ltd. v. Thomas C. Christensen, JGI3 55., costs £1 lis. Gd. JUDGMENT SUMMONS. In the case of Thomson, Lewis and Co. v. J. AVoods, a claim for .£3B 145., defendant was ordered to pay tho amount on or before July 28, in default one month's imprisonment. POLICE CASES. (Before Mr. W. G. Riddell, S.M.) Cecelia M'lntosh was sentenced to fourteen days' imprisonment on a chargo of insobriety. Two first offending inebriates were dealt with. One, who did not appear, forfeited 10s. bail, and another was fined 55., in default 24 hours' imprisonment.