DISTRICT COURT, REEFTON.

Inangahua Times, Volume IV, Issue 34, 27 June 1877, Page 2

DISTRICT COURT, REEFTON.

Monday, Juhb 25, 1877. (Before His Honor Judge Weston.) In the matter of the Sm Julius Vog^l Company (in liquidation), and James Clinton, a contributory. This case, which was an application by Clinton to be removed from the list of contributories of the above Company, was heard at the last sitting of the Court. Judgment was subsequently delivered at Hokitika by his Honor, on which occasion the question of costs was reserved for argument at Eeefton, and came on as above. Mr Button, on behalf of the liquidator, moved that costs be allowed upon the generally recognised principle that a verdict carried costs. There was, he said, nothing in the ease why it should be treated outside the recognised rule. The same remark would also apply in reference to the case of the Liquidator re L. Daties. The rule at law wa9 that the party losing should pay the costs of the suit, and he now asked that that rule be observed in this case, Mr Staifce appeared to oppose on behalf of Messrs Clinton and Davies. He s*id that in Clinton's case he would first call attention to tbe fact that defendant had been put to very great expense in attending tbe Court upon two occasions. He lived some seventy or eighty miles away, and had been under the necessity of bringing a witness down that distance* The case considered in any light was one of great hardship to defendant. The question of costs, however, admitted of little argument, as the matter after all retted entirely with his Honor. He

would therefore leave the matter entirely in the hands of the Court. Before sitting down, however, he desired to call the at* tention of his Honor to the heavy cost! incurred and being incurred by the liquidator in bringing counsel from a distance, when there was no actual necessity for doing so. His Honor said, in reference to the latter portion of Mr Staite's remarks that they appeared to be somewhat irregular, as, iftbere was any substantial objection to tbe course being taken by the liquidator, the proper course would be to bring the matter in upon affidavit. ■ Mr Staile merely desired to mention in passing that the liquidator appeared to be piling on legal costs upon the company when there was no actual necessity for him doing so. He (the liquidator) had thought proper to bring a solicitor all tbe way from Hokitika, while there were resi- 1 dent practitioners available, and hoped the Court would put a stop to such a proceeding. His Honor— But if the costs incurred by the liquidator are excessive, exception can be taken at the proper time, and should it be found thea that the imputation was well founded, tbe amount would be disallowed by the Court. Mr Staite — Months ago I wrote to the liquidator informing him that in my opinion unnecessary costs were being incurred, bat be appeared to lake no notice of the matter. His Honor— l think we are now de> parting from tbe proper procedure in these matters. If you have any complaint to make against the liquidator, 1 think it would be very much better to lay it before tbe Court in the form of an affidavit, and it could then if substantial, be dealt with. Mr Staite — Except in this respect, I am of opinion that tbs liquidator has incurred exceptional costs wben there was no real necessity for it, and the burden it is now sought to be imposed upon Clinton and Davies. His Honor — Clinton's case, if I recollect rightly, was before Ihe Court three or four months ago. It was commenced, , and in the interest of tbe contributory i was adjourned to enable Mr Newton, who acted for him, to make out a stronger - case. The case was then again gone i into, and subsequently a written judg« ' ment in tbe matter was given, with right ' to Clinton to renew bis application. He ' did so, and tbe case was substantially rebeard. Thus the convenience of both parties was severed by the adjournments. Mr Staite admitted the correctness of his Honor's remarks. His Honor— Then, as regards Mr ' Davies' case, were there not peculiarities !n reference to it P Mr Staite— When the application was first called on Mr Davies was absent, and the case was adjourned, but he was represented by counsel, bis affidavits were before the Court, and he did not desire the adjournment. His Honor— Was the adjournment for Mr Davies' benefit P Mr Staite— No, your Honor. I was quite prepared to proceed with the case, but the Court expressed a wish that Davies should be in attendance, and it was for that reason the case was adjourned. Mr Button agreed tbat the adjourn* ments in Clinton's case had been a mutual convenience. With regard to Dayies' case, Davies resisted tbe applica* tion of the liquidator and he was not sue* cessful, and was therefore entitled to pay the costs of the suit. His learned friend had referred to another matter, and it was only fair that be (Mr Button) should have the right of reply thereto. Mr Staite had raised an objection to the granting of exceptional costs on the ground that two solicitors were not necessary in Ihe case. The Court was not asked to grant exceptional costs, but had such an application been made it would be for the Court alone to say whether or not the case was one that required the assistance of two solicitors. His Honor thought it was hardly necessary to labor the latter portion of the arg ument. If there were two counsel on one side, then it was necessary that there should be an> equal number on the other side. There was no fixed rule, and each case would therefore stand upon its 1 own merits. Had these oases been in the Chancery Court at Home, there would have been at least three counsel on each > side. i Mr Button said bis only reason for re» : ferring to the matter as he had done was , thnfc a decisive answer tnt^ht by be given i by the Court to the first attempt made to i limit the number of counsel in patticular > esses. His Honor— Tbe Court is not going to i be limited in any way in matters of this i kind, i Mr Button— lt is necessary then that the Court should be made aware of the : faofs of the case. He only asked for I ordinary cosls. Second counsel had not i been engaged, as stated, by the liquidator, i but by a creditor in the company, and ' had been so paid. i Mr Staite was in a position to contra- , diet the latter portion of his learned ' friend's statement, as he was aware that a telegram had been forwarded to i Hokitika by the liquidator to retain counsel. ' His Honor— Keally we are now drift* ; ing very far away from the matter before the Court.

Mr Button would admit that the liquidator bad telegraphed, but counsel had been retained fey « creditor, and so paid. The liquidator before telegraphing had used every possible means of obtaining legal assistance here. Mr Pitt was re* tamed in the Sir Julias Yogel cues, and could not therefore act for the liquidator. He (Mr Button) Iwould again asiert that he bad not been retained by Mr M'Lean, but by a creditor. He considered it highly improper that collateral insinua* tions should be cast in such a way at the liquidator, and not upon substantial grounds. His Honor— As to the collateral remarks referred to, there can be no doubt as the propriety of counsel confining himself as closely as possible to the matter before the Court. If there is any complaint as to the cooduot of the liquidator in the matter, it would be very much better that the matter should come before the Court in a substantial form, and it could be depended upon it wonld be thoroughly sifted, no matter who the liquidator might be. As to the question of costs, I am of opinion that in this case two counsel were necessary. In Clinton's case there had been adjournments to suit the conrenience of each side, and I am of opinion that a substantial fee should be awarded. £10 would be allowed in each case. In the Matter of the Rainy Cbbek Com* pant (in Liquidation). Mr Button, on behalf of the liquidator, Mr M'Lean, moved for an order settling the list of contributories. The list, he said was a rery long one, but for convenience it had been divided into three divisions. The first of these divisions included the names of those who were upon the register of the company ; secondly, those who made transfers subsequent to the date of the petition; and lastly, those who had made transfers prior to the presentation of the petition, and the bona fides of which were contested. His Honor—The debts in the Company are, I see, £1647. Mr Button— Ye9, your Honor, and the estimated cost of winding up the estate is £377, and the total amount required is therefore £2000, but a sum of £64 has . been received by the liquidator since the , preparation of the list. All the names , numbered on the list from 1 to 33 ap* : peared upon the register of the company i and Ino attempt had been made by those persons to rid themselves of their liability. l The second division included the names . of those who had made transfers subsequent to the date of the filing of the • petition. The petition was filed on the 23th of August, 1376. The names were . G. W. Nicbol, date of transfer September 29, date of registration, September 30; G, S. Eowley, transferred 13th September, registered 3rd Ootober ; George Glenn, transferred 14th September, registered 21st September ; — Blaekley, transferred 25th August, registered 26th August ; i — Burkley, transferred 19th August, re* giatered 21st September ; — • Eisseohardt* • transferred 25th August, registered 26th August; C. M'Donnell, transferred to , company 26th September, registered 30th September ; — Dorring, transferred 28th i August, registered, 81st August ; Hick* . son, transfer dated 13th August, registration 7th September. This included the , whole of, the names in the second i category. i His Honor— Then all the rest are i transfers, the bona Ade» of which jou > dispute P Mr Button— They are not upon the ; register, but we claim the right to put i them there. There are 59 names in all. ! Mr Staite, insti noted by Newton and 1 Warner, appeared to oppose on behalf of i Hickson md Dorriau, and for Bepjimin i Gough, George Mason, Patrick O'Neill, and Peter Parcell, contributories. His Honor— Then only five or six out of the 59 persons appear (o oppose. Mr Button said there wonld possibly be further objector*, but some of the contributories had been under the impression that the case would not be called on until the following day. Mr Staite said before the case proceeded further he had one objection which he thought would prove fatal to the case proceeding further at the present sitting. He referred to the question of jurisdiction, and would proceed to show that the Court had no power to settle the list at the present sitting. He thought it wise to offer the objection at the outset because it was a rather important one. He would at the outset have to ask the Clerk of the Court whether any notice fixing the present sitting of the Court , had been posted inside the Court-house-[The Clerk replied in the npgative.] He (Mr Staite) would then direct the atten- | fcion of tbe Court to the 155 th Section of the District Court Act, 1858, by which it was provided that the Governor should appoint tbe times snd places within which sittings of the Court sould be ' held. His Honor— Would that apply to the civil and criminal jurisdiction of the Court or to matters in bankruptcy. Mr Staite submitted that the Court was now sitting in its civil jurisdiction. If the hearing of the case had been fixed at a previous sitting and the matter adjourned, than tbe Court would be com* petent to deal with it at the present sitting. The case was an entirely new one, the papers in the Court having only been filed a few days ago. If a motion

japer bad beea filed, possibly the matter night bare been rightly brought on, bat J bat Iras not done. 1 Mr Button submitted th»t tbe Section ' ■cad baring been framed prior to amend- | nents subsequently made in tbe Act, the ; :ase came properly within tbe new joriiliction granted to tbe Court. That teotion, he contended, referred only to the criminal and civil business of the Court Bince 1858 a new jurisdiction had been conferred upon the Court to which the old jurisdiction was qaite foreign. Now to arrive at a correct conclusion as to the proper procedure under the new jurisdiction to consider, first, the nature of the business, and secondly, tbe procedure adopted in other Courts in like matters. Now the present matter was in the nature of an application to the Corrt for business opoa partienlar matters. In matters of this kind the Court sits at its own convenience. Now with regard to bankruptcy matters, the Act contemplated that a reasonable interpretation was to be given to its provisions, and the bankruptcy jurisdiction was quite anaiaRons to the winding up of a Company. The power of the District Court in this matter was similar to the jurisdiction of the Supreme Court in banco. To gire the Act any other interpretation would, in his opinion, be to set everything upside down — that right being recognised all over the Colony. After further argument bis Honor said be had no desire, however strongly be might feel upon tbe subject, to express a hurried opinion upon the point, and he would, therefore, reserve it, and in the meantime the case could proceed. Mr Staite then urged another formal objection to the wording of the notice to contributories issued by the liquidator, but did not press it. He said that tbe facts of Dorrain's case were that he was never at any time a shareholder in the Company, merely held a lien upon com? shares. Tbe facts were not disputed by the liquidator as far 89 he (Mr Staite) was aware. He bad a farther objection to make. Tbe first petition filed was found to be informal, and the Court ordered another petition to be filed which was accordingly done. Now he I eld that the contributories were not in any way bound by the filiog of the first petition, as the petition having been informal the Court would not give effect to sn informal document. Mr Button said that liis learned friends last objection was only another exemplification of the adage that " drown' ing men catch at straws." The petition was filed, and the Court granted permis" sion to tbe liquidator to amend it. Tbe petition had not been removed from the file. After some further argument Itii Honor said he would consider the point when going into tbe question of jurisdiction. Mr Staite— The next case is that of Mr Hickson. It was almost identical with the former. His transfer was dated 13th iugust, but it was not completed until the 7th September— which was be* fore the date of the filing of the petition. His Honor— 'These transactions certainly curry suspicion. I doa't say they carry downwright mala *fe*. H*r» we see that Mr Hickson received notice, and in the face of that gets rid of his interest. Mr Staite— Mr Hiekson's affidavit lets forth that be sold his shares to one James Andrews, a miner, before be received notice of the winding up pro* ceedin&s. Mr Hickson is a gentleman ! of good position and he bad sworn to tbe facts detailed. His Honor— Tes Mr Staite, but here we find he disposes of 250 shares for the sum of £1. Now what inference must tbe Court draw from this. Mr Button— The matter of bona does not appear very clear from the fact that the transaction purports to have been dated in Greymoutb on one day and been completed in Beefton on the same day. It would appear at tbe least that there bad been some hurry over it. His Honor— ls that admitted t Mr Button— lt must have been so, or the registration must have been dated back. • His Honor— Well pursue toe mattei bectuse it is important. Mr Button— We dispute the transfer but we are not absolutely in a position to set up malaftdes. His Honor— Tbe liquidator jkj»ld we ready to sift these cases thoroughly. Here is a case which as far as it as gone would appear to show mala tide* upon tbe very face of it* Mr Button— The liquidator contends that the transfer was effected too late. His Honor— Then you simply rely upon a point of law t Tbe case appears to be one for the investigation of the liquidator. Here is a man presumedly occupying a good position transfers 250 shares to a man unknown for the sum of Mr Button— There are singular circumstances connected with this _ Compaoy. Tbe Company was some time in operation, and the crash was anticipated sometime before it actually came, or be* fore there was actually good ground for the assumption, and the consequence was that numbers of persons transferred no doubt, with tbo sole object of getting rid of tbe liability, but there is some difficulty in fixing actual mala fide*. His Honor— lt is for the liquidator to check fraudulent transfers, and if it is done in one case it should be done in all. Do not let a man escape his just liability merely because he happens to be a bank manager. Mr Staite proceeded. The next case was that of George Mason, 100 shares, and in support of his application, ho (Mr Staite) read the affidavit of K. Keeves, which set forth that deponent was a witness to the sale of Mason's sham on the 7th iugust, to one James

Cornish. The contributory lived at Haupiri in the Graf Valley. The sale was thoroughly boaujtde. The transfer was registered oo the 83rd August. Hia Tlonor— Wat the Company maui« festly insolvent before the winding up' proceedings were initiated P Mr Suite pointed oat that the trans, action took place some time prior to the presentation of tbe petition, and when it could not be presumed that the Company was in difficult!*. Mr Button aaid Ihia wai to be re* garded as a te*t case for the whole. Beeves swears distinctly that be was pre* tent at the sale and saw the purchase money paid, and the liquidator could not dispute Mr Reeves' oath. There was positively nothing for the liquidator to go upon. His Honor— ln a'l these cases we can* not adhere too closely to the transaction itself, but regard must also be had to all the surrounding circumstances. Mr Button—We know that the share* holders were doing this bat what could be done P His Honor— Then what is the use of going farther P Mr Button— Under the Mining Com* panics' Act we know that every facility is I given to shareholders to get rid of their shares. Under the Joint Stock Act it was different. It was a great pity thai the provisions of the Joint Stock Act in relation to transfers were not embodied in the Mining Companies' Act, .and there* by prevent this dummyism. While upon this subject he would take occasion to mention a matter which had recently been brought under his notice. A person well known in the loangahua had lately Ken on a visit to Tasmania, and while there he had purchased some shares in • tin mine, but upon presenting the trans* fer to the manager of the Company, the latter refused to register it without th# authority of tbe directors. The trans* feree thereupon waited upon the directors and they also declined to authorise the registration unless the transferee could statisfy them by reference to some bank manager that tbe applicant was a substantial person, and one fully able to bear his proportion of the liability to be incur* red in the venfu-e. Tbe person in question produced letters of credit, &c., but this was not sufficient for the directors, and they consequently refused to accept him as a shareholder. As might be imagined, the individual was greatly surprised at this way of doing business, and he (Mr Button) thought it would be a good thing for tbe Jnangahua if some such course was adopted here, and thus save tho credit of tbe field. His Honor said he was very glad to hear the remarks wlrch bad fallen from Mr Button. He himself had taken fre* quent occasion to refer to the necessity of treater caution being exercised by the i rectors of companies in relation to transfers. For the safety of ail parties it was highly desirable that some such rule should be adopted, and thereby prevent transfers to paupers and persons unaWe to bear their proper share of the liabilities) of tbe yentore. Allusion bad been made to the Joint Stock Act, and no doubt there was much to be said on both sides as to the desirability of enabling persons easily to free themselves from liabilities incurred as shareholders. As the law now stood great latitude was afforded share* holders, and it was for the directors of companies to place a limit upon it.