COMPANY FUNDS

Hokitika Guardian, 23 April 1926, Page 3

COMPANY FUNDS

ACTION BY SHAREHOLDERSHAMILTON. April 21. An interlocutory judgment was delivered by Air. Justice Ostler in Hamilton to-day, in a case- in which Robert Elliott Farrow, farmer, of Waltoa. sought an order giving him the right to inspect the auditors’ report in tho New Zealand Co-operative Dairy Coy.. Ltd., which was attached to the balance sheet of May 31st., 1925. Farrow ni.so sought to inspect various reports and minulc books now in t.he possession of the company, and hooks of the company's Glenaftott Collieries. Plaintiff also asked lot- an injunction prohibiting the company from transferring sums from one- group of tho company to the credit Of it not lid* group. His Honor said the plaintiff claimed that, when lie became a member of tho company it was represented to him by the directors that each group of shares into which the company was divided such as butter, cheese, dried milk, casein, coal and timber, was independent of the other groups, find the profits earned in each group were divided only amongst the shareholders of that group. He alleged that tho directors wrongwidly transferred profits belonging to the butter, coal and timber groups to make up loses suffered in the dried milk and casein groups. To show that what the company had done was illegal would ho a grave question of law, and would depend principally upon the construction of the articles of association. If this question of law were answered ill plaintiff's favour then, no doubt, he would he entitled to obtain particulars of tho amounts transferred. If it wore answered against him. then it would become unnecessary to make any order upon either of tho summonses. In his Honor’s opinion, it was in the best interests of both parties, especially the plaintiff, that this question of law should he first disposed of. A decision on this question would dispose of the action one ltay or the other in a cheaper and more expeditious manner than a formal trial. The Court had power any time to order, in such rase that questions of low tie argued before trial of tbe action. His Honor now exercised that power.