S.M. COURT.

Otaki Mail, 14 September 1923, Page 3

S.M. COURT.

IJESEKVEB JUDGMENT. The following reserved judgmet was delivered bv Mr. stout. (5.M.. c •Wednesday at Otaki:— 'This is an action by the Compan against a shareholder for money at vanced against a prospective bom which did not materialise. There is als a counter claim by the defendant ft) payment of the bonus. When the ai vanco w a.- made it. was expected tha the Company would be able to pay bonus of 41:1 per lb of bulter-fut suj (Aii.3 and the Directors report to th Company when presenting the balanet ; sheet for the year 1920-21 actual!, mentioned this amount--'(is the pros pec tive bonus. The new Directors, how pv'er, found when going into the /'man cial position of the Company that tin profit out of which the burnt;, war to l:>< paid was ;i mere paper profit, whicl included a bad debt of £2,555, and tha the utmost that could be paid as : bonus was Id per lb. They therefor, declared this bonus and demandet from the shareholders tha'- hnd obtain ed advances beyond this amount, ;i refund of the balance. The shareholder relies upon the fact that the balance-shoot us ]rj?< bv the anuual meeting showed a profit which would have enabled 4<td pfr lb to be paid and that under the Articles '-'l' Association such profit must bo distributed bv the Company as a bonus. 1 am unable to follow' this reasoning. The Directors as trustees and agents of the Company can only distribute an actual profit and cannot be compelled to do something which they are not entitled to do. to wit. f«iv a bona- without having tin' necessary profit available —because ;i mistake has been made in the balance-sheet which on. investigation has been discovered since the balancesheet was [inssed at a general meeting. The defendant is a shareholder and has no right to demand that the Company pay a bonus just because such mistake ivas nut discovered prior to or at the general meeting, If tin' Directors paid out ou such a balance-sheet after discovering the mistake they would be guilty of a breach of trust and liable personally to reimburse the Company. A shareholder cannot put. his Directors in such a position. The Company therefore are in my opinion entitled to judgment for the amount claimed and costs. ()n the counter claim judgment must also be in favour of the Company with costs, the shareholders tire only entitled to a distribution of actual profits and as I have stated cannot take advantage of an erroneous balancesheet." Mr. Atmore appeared for the CornOther cases pending are as follows: Tc Horo Dairy Co. (Mr. Atmore-) v. D. Grant. (Mr. Cooper)—Clarjn £-19 12s rid. Te Horo Dairy Co. 'Mr. Atmore) v. George Eving (Mr. Cooper)—Claim BGO. Te Horo Dairy Co. (Mr. Atmore) v. Charlotte Dug'gan (Mr. Bergin) Claim £3l -"is 2d. T!ie hearing of these cases was adjourned to 2 r| th September, at Levin. fort and Odlins (Mr. Atmore) v. H. Tahana. £2-1 ISs lid—Adjourned to 4th October. 192.".. Inspector of Awards v. W. J. Barlow. Ili< Inspector of Award:, proceeded against AV. J. Barlow- (Mr. Atmore) en two informations. (1) for failing to Veen a wages booh between 29th May arid 16th .Inly; (-) for failing to keep wages book open tor inspection on 16th July. Mr. Atmore. on behalf of defendant pleaded not guilty (o both informations. Tie:- Inspector of Awards .aid thai he had made an inspection at B-irlor.'-garage on the 2Rth May last and tvn ■ shown a wages book which had not been written up for some time. He warned defendant to i-.pep t've book : ' accordance with The factories Ant He next visited the garage on 16th •7u!'-. lf'23, in response to a complaint that e.ii employee. Mills, had not brer: paid the award rate of 2/1J per hour. Barlow inf,.n 1 him that the boo]; hi.d been lost. Mr. Atmore: Did vou -ee the wage.' book on the 29th May? 'The Inspector: Y'e.-. I inspected it. It was not written up. Mr. Atmore: The defendant "ill -near that you did gar see it then. Did defendant not foil you that he had kept the book written'np until the 7th July and that the book had ecu missing sinct Mills left the garage on the BthJuly? Inspector: Yes he told me that. Mr. Atmore: When did you receive h complaint that Mills had been paid «I less than the award rate? Inspector: Just before the Kith -lobMr. Atmore: I suggest to you that Mills might have taken the book with him in order to prove that he had not .:.'.".-.:ive,| tlie award rate. On behalf of defendant Mr. Atmore

paid that the information charged defendant with not having kept the book between 29th May and IGrli July. The defendant would swear that he had kept, the book up to the 7th July and that he hud missed it at the time Miiis left his employ. For the remainder of the period of the charge (7 days) -d'fendr,-j had only an apprentice work''i<l fed --Aim. , A new booh had hern obtained aftjer the inspector's visit. The offence was too trivia] to support a conviction. It would have been otherwise had 'Jie garage been a large one with many . jiployces. \Y. J. Bar- j low gave evidence on the above lines and said that he had niissed*thc book when Mill- left. He had subsequently received a claim for a £lO penalty for under paying MiUs. At this stgc'' Mr. Atinore ashed that the magistrate?* decision lie held over until he had heard Ihe claim for the penalty. Defendant had a good defence which would defeat the sugestion of the Inspector that the book was deliberately withheld from him, to prevent his ascertaining what wages htiiil been paid to 'Mills. The adjournment was agreed to. and

subsequently the Magistrate dimissed the first information. On the second information he --aid that defendant had committed a technical breach of the Act, He would inflict a nominal pencil;.- of £1 and costs.