and Customs ordered that the business of the A. Company in Australia should be wound up, and appointed a controller to conduct the winding up. Certain claims by the B. Company and the C. Company against the A. Company under certain contracts were made to the controller and, upon application to the High Court under s. 9H, the basis on which the B. Company and the C. Company were entitled to claim payment was declared, but no claim was then made or question raised as to their right to interest upon the respective amounts due to them. Subsequently, upon motion, the High Court was asked whether the B. Company or the C. Company was entitled to interest on the moneys due to it in respect of its claim. Held, on the evidence, that there was no contractual right in either the B. or the C. Company to such interest. Held, also, that neither the B. nor the C. Company was entitled to such interest under s. 75 of the Supreme Court Act 1916 (Vict.). In re AUSTRALIAN METAL COMPANY LIMITED, 33 C.L.R. 329. [High Court.]

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Reduction of capital-Sanction of Court Functions of Court. This was an application to the Court under that part of the Companies Act providing for "reduction of capital." The applicant had passed a special resolution that its capital be reduced, by 11,813 votes in favour of the resolution and 1,173 votes against, the confirming resolution being carried by 8,665 votes in favour thereof and 4,851 against. The terms of the resolutions were : (1) That the capital of the Company be reduced from £140,000 divided into 14,000 shares of £10 each to £70,000 divided into 14,000 shares of £5 each, and that such reductions be effected by transferring to the reserve fund constituted under article 103 (k) of the articles of association of the Company the sum of £5 in respect of each share and by reducing the nominal amount of each share from £10 to £5. (2) That Article III. of the Company's articles of association be amended by adding thereto after the words "business of the Company the words " or out of reserves." No objection was made to the second resolution, but the first was objected to by some shareholders upon the ground that if this reduction was permitted and a reserve fund established the company would have power to pay dividends out of the reserve fund, and thus what was now capital by being used as a reserve fund might thereby, if the Company so decreed, be utilised for dividends. There was no question of the rights of creditors being affected Held, that it was not for the Court to decide as to the wisdom or unwisdom of the proposed steps, and as the shareholders had agreed thereto and no creditor of the company was prejudiced thereby there was not objection to the Court affirming the proposal. Judgment accordingly; resolutions confirmed and the words "and reduced to be dispensed with. In re E. W. MILLS AND COMPANY LIMITED, 1924 G.L.R. 618. [New Zealand.]

Articles of association-Co-operative dairy

66

on

The

company-Article imposing obligation certain shareholders under penalty-Restraint of trade.-The respondent company was a co-operative dairy company incorporated under the Companies Act 1908. Clause 17 of the company's articles of association was in the following terms: Every shareholder shall supply to the company the whole of the milk or cream produced on his farm. . . until the share capital of such member shall be fully paid up; failing which he shall pay to the said company as liquidated damages the sum of one pound per cow for each and every season or part of a season he fails to supply milk to the said company." The memorandum of association provided that the company could establish a factory at Kutarere, or at any other place in New Zealand. only restriction on the transfer of shares was that imposed by clause 36 of Table A. of the Companies Act 1908. Held, that clause 17 was invalid as being in unreasonable restraint of trade. McEllistrim V. Ballymacellogitt Co-operative Agricultural and Dairy Society Ltd. ([1919] A.C. 548) applied. Per Salmond, J.: A company cannot by its articles, whether original or amended, impose upon its members any pecuniary obligation over and above their statutory obligation to pay up the amount of their shares; that any attempt by a company to attach any accessory or collateral pecuniary liability is ultra vires and void as being contrary to that fundamental principle of limited liability which lies at the root of company law, and no distinction can be made in this respect between an obligation to provide the company with money and an obligation to provide it with money's worth. SHALFOON v. CHEDDAR VALLEY CO-OPERATIVE DAIRY Co. LTD., 1924 N.Z.L.R. 561; G.L.R. 121. [New Zea and.]

Receiver-Application for removal by person claiming to be creditor.-A. was appointed receiver of the Gosnells Estate Company in a partnership action between himself and another. Subsequently, & society was formed, of which he was secretary, for the purpose of acquiring on behalf of his members land from the company. W., a member of the society, became entitled to acquire a block of land, but before he had completed his purchase A., as secretary, refused to accept any further instalments, he, as receiver, having become involved in a dispute with the W.A. Bank. W., thereupon, claiming to be a creditor of the partnership, applied by sum. mons in the partnership action for the removal of A. as receiver on the ground of misconduct. Held, on the facts, that no misconduct had been proved. Held, per McMillan, C.J., that a member of the society had no right to ask for the removal of the receiver in the partnership action. WILLIAMS v. ANDREWS, 1924 [Western Australia.]

W.A.L.R. 7.

ment for sum of £8,000-Validity of agreements Companies Act, 1915 (No. 2631), ss. 87, 91, 97.-By agreement dated the 3rd July, 1922, the U. Co. agreed with one F., as on behalf of a then contemplated company, to underwrite the whole of the share capital of that company on the terms of a proposed prospectus as finally settled, and that the underwriters' commission should be 7 per cent. on the nominal value of all shares underwritten. On the 13th July, 1922, the contemplated company was incorporated, and called the A. Co. Article 4 of the A. Co. expressly authorized the directors to adopt and carry out the agreement of the 3rd July, with full power nevertheless at any time

66

66

to agree to any alteration or modification thereof." Article 12 authorized the directors to pay a commission to any person for subscribing or procuring, or agreeing to procure, subscriptions for shares. but so that, if the commission shall be paid or payable out of capital, the statutory conditions and requirements shall be observed and complied with, and the commission shall not exceed 25 per cent. on the shares in each case subscribed or to be subscribed." On the 17th July, 1922, the A. Co. adopted the agreement of the 3rd July, but subject to the modification (inter alia) that the company's commission should be at stated rates on certain successive number of shares, and that "notwithstanding anything herein contained the company hereby undertakes and agree to pay to the underwriting company in any event the sum of £8,000. . ." On the 22nd September, 1922, a prospectus was issued and filed under s. 87 of the Companies Act 1915, in which the agreement of the 3rd July (which was stated to be the only material contract`, and the rate of commission thereby provided for, were mentioned, but no reference was made to the agreement of the 17th July. No statutory meeting was held pursuant to s. 72 of the Act, and consequently effect was not given to the provision of s. 91 that the terms of a contract referred to in the prospectus shall not be varied except subject to the approval of such a meeting. The A. Co.. being in liquidation, and a very small proportion only of its share capital having been issued, the U. Co. sought to prove for the sum of £8,000, subject to certain adjustments in account with the A. Co. The liquidator rejected the proof. Held, that the proof was rightly rejected, inasmuch as (a) the asserted contract to pay in any event the sum of £8,000 was not disclosed in the prospectus in terms o s. 97 of the Act; (b) such asserted contract was not authorised by the A. Co.'s articles, the power of modification in Article 4 being controlled by Article 12, the terms of which had not been observed; and, moreover, the requirement of Article 12 that the commission should not exceed 25 per cent. was not complied with by an agreement to pay in any event a lump sum; (c) the approval of the modification of the agreement of the 3rd July by a statutory meeting had not been obtained. Booth v. New Afrikander Gold Mining Co. Ltd. ([1903] 1 Ch. 295) and Andrae v. Zinc Union of Great Britain Ltd. ([1918] 2 K.B. 454) applied.

In re AUSTRALIAN UNITED INSURANCE CO. LTD., 1924 V.L.R. 146; 30 A.L.R. 99. [Victoria.]

Liquidation-Application for "balance order" -Summons of contributories who have not paid Service of summons-Service on contributories residing out of the jurisdiction.— A petition for the winding up of a company under Part I. of the Companies Act 1915" initiates a suit within the meaning of the Service and Execution of Process Act 1901-1922," ss. 3 and 14, and a summons by the liquidator to enforce on contributories payment of calls in the winding up is a proceeding in that suit. Such a summons is not a "writ of summons " within the meaning of s. 4 of that Act, and may be served on contributories not resident within the jurisdiction in the manner provided by s. 14. In re THE AUSTRALIAN UNITED INSURANCE Co. LTD., 1924 V.L.R. 505; 30 A.L.R. 358; 46 A.L.T. 70. [Victoria.]

The

Company being wound up voluntarily Petition by creditors to have company wound up compulsorily Allegations of mismanagement and blunders on directors' part.The company was being wound up voluntarily when a petition was presented to the Court by several creditors asking that the Company be wound up compulsorily under s. 233 of the Companies Act 1908. No creditor opposed the petition and motion, and no shareholder, save the directors, opposed the motion. company was insolvent, and there was no chance of any money coming to the creditors or the shareholders. There was no objection to the liquidator, but he was quite willing to resign. There were specific allegations of mismanagement against the Company and directors and a proper investigation of the dealings of the Company was sought. Held (making an order for the compulsory windingup), that sufficient prima facie evidence had been placed before the Court to show further investigation was required. In re WELLINGTON FARMERS' MEAT & MANUFACTURING CO. LTD., 1924 N.Z.L.R. 623; G.L.R. 85. [New Zealand.]

that

Voluntary winding up Application for leave to prosecute managing director for theft and falsely accounting No refusal by Crown to prosecute Leave re

fused. On an application, under S. 257 of the Companies Act, 1908, for leave to prosecute the late managing director for theft and falsely accounting as an official, it appeared that the matter had not been officially brought to the notice of the Crown Law Officers and therefore there had been no refusal by the Crown to prosecute and that the prosecution was opposed by a majority in number though a minority in value, of the shareholders of the Company. Held, that the Court should not grant leave unless (1) it was proved that the Crown had refused to prosecute, and (2) that the circumstances were such that in spite of such refusal the Court considered a prosecution at the expense of the shareholders should be allowed.

In re WILSON'S MOTOR SUPPLIES LTD., 1924 G.L.R. 360. [New Zealand.]

Winding up-Extraordinary resolutionNecessity for strict compliance with ActRecovery of calls.-On a claim for calls by the liquidator of a company there was evidence that an extraordinary resolution had been passed by some members of the company present at a certain meeting to the effect that it was advisable to wind up the same by voluntary liquidation, but there was no evidence that notice of the meeting at which the extraordinary resolution was passed had been given in the manner required by s. 92 of the Companies Act 1908. Held, that proof of such notice was essential and that the provisions of s. 92 must be strictly complied with before the liquidator had any status to sue, and that therefore plaintiff must be nonsuited. In re Clayton and Buscke Ltd. (16 G.L.R. 305) followed. In re MOTEUKA FARMERS' CO-OPERATIVE CO. LTD., 19 M.C.R. 81. [New Zealand.]

Summons for examination of witnessesEx parte application by liquidator-Written statement in lieu of affidavit-Practice.An application to the Court by the liquidator of a company to exercise its powers under s. 123 of the Companies Act 1899, is made ex rarte, and may be made upon a written statement of the facts instead of upon affidavit. In such event the statement of facts should be placed in an envelope which should be sealed and addressed to the Judge and should be opened by the Judge alone. On the termination of the hearing of such application, similar precautionary measures should be taken. In re NORMAN TURNBULL AND COY. LTD., 41 W.N. 109. [New South Wales.]

Examination of witness-Pending suit by witness against company-Questions on matters in issue or relevant to issue. Questions not permissible. Upon an examination before the Master of certain persons by the liquidator of a company pursuant to s. 123 (1) (c) of the Companies Act 1899, objection was taken to any questions being put to the witnesses relating to matters in issue or relevant to the issue in a suit then pending which was brought by these witnesses against the Company. On reference by the Master to the Court, held, that the Master in his discretion should allow all questions on matters which were in issue or relevant to the issue in the pending suit if they were directed to ascertaining whether the liquidator ought to defend the suit or whether he had defence or whether he ought to recognise the plaintiff's claim, but that he should disallow all other questions which were merely a rehearsal of the cross-examination which might take place on the hearing of the suit.

In re Northern Australian Territory Co. (45 Ch. D. 87); Ex parte Carver (47 L.J. Ch. 702n); In re Franks ; Ex parte Gittins ([1892] 1 Q.B. 646) discussed. Re AUTO IMPORT COMPANY (AUSTRALIA) LTD., 41 W.N. 168. [New South Wales.]

Company-Contract between syndicate and

appointed to recommend as to deportationNon-judicial tribunal-Action to restrain proceedings before board-Injunction-Interlocutory injunction-Challenging validity of Commonwealth statute-Criminal prosecution pending-Cause of action-Apprehension of irreparable injury-Judiciary Act 1903-1920, ss. 31-33, 80-Crimes Act 1914-1915, s. 24a (War Precautions Act Repeal Act 1920, s. 12). -Held, by Knox, C.J., Isaacs, Rich and Starke, JJ. (Higgins, J. doubting), that s. 8A of the Immigration Act 1901-1920 is a law with respect to immigration, and is therefore within the legislative power of the Commonwealth Parliament conferred by s. 51 (xxvii.) of the Constitution. Held, also, by Knox, C.J., Isaacs, Higgins, Rich and Starke, JJ., that a Board appointed pursuant to s. 8A was not a judicial tribunal, that is, a tribunal empowered to give a decision creating or declaring an obligation; and, therefore, that prohibition would not lie to prevent the Board

The

from proceeding with the matter of a summons issued under the section to show cause against deportation; and that neither quo warranto nor certiorari was an appropriate remedy to prevent the Board from so proceeding. two plaintiffs, who were British subjects born in Ireland and had recently arrived in the Commonwealth, had been arrested on a charge under s. 24A of the Crimes Act 1914-1915 (enacted by s. 12 of the War Precautions Act Repeal Act 1920), of being engaged in a seditious enterprise. While that charge was pending the plaintiffs were summoned to appear before a Board appointed under s. 8A of the Immigration Act to show cause why they should not be deported. The plaintiffs thereupon instituted an action in the High Court against the members of the Board claiming an injunction restraining the defendants from proceeding further with the matter of the summons. On an application by the plaintiffs for an interlocutory injunction, held, that the application should be refused. By Knox, C.J., Isaacs, Rich and Siarke, JJ., on the ground that s. 8A of the Immigration Act is a valid enactment and applied to the plaintiffs. By Higgins, J., on the ground that there was no such irreparable injury or urgency as warranted an interlocutory injunction. Held, by Knox, C.J., Isaacs and Rich, JJ. (Higgins, J. dissenting, Starke, J. doubting), that the fact that the plaintiffs would be prejudiced in their defence on the criminal charge by the continuation of proceedings before the Board would, if s. 8A were invalid, be a ground for granting an interlocutory injunction. R. v. MACFARLANE, 32 C.L.R. 518. [High Court.]

Same case : 29 A.L.R. 353; 1923 Digest,

col. 54.

Constitutional Law-High Court Jurisdiction-Original and appellate jurisdictions. -The statement in In re Judiciary and Navigation Acts ([1921] 29 C.L.R. 257 at p. 264), that ss. 73 and 74 of the Constitution deal with the appellate power of the High Court is not an authority for the proposition submitted to the Privy Council in Minister for Trading Concerns for the State of Western Australia v. Amalgamated Society of Engineers ([1923] A.C., 170 at p. 173) that the High Court has held that s. 74 does not apply to а decision of the High Court in its original jurisdiction. Dictum in In re Judiciary and Navigation Acts (29 C.L.R. 257, at p. 264) explained. In re THE JUDICIARY ACT 1903-1920 AND In re THE NAVIGATION ACT 1912-1920 32 C.L.R. 455. (High Court.]

High Court Jurisdiction-Appeal from Central Court of New Guinea-Federal CourtTerritory acquired by Commonwealth-The Constitution (63 & 64 Vict. c. 12), ss. 73, 122 -Treaty of Peace Act 1919 s. 1-New Guinea Act 1920, ss. 4, 5, 14-Treaty of Peace, arts. 22, 119 Mandate by Council of the League of Nations of 17th December 1920, art. 2Judiciary Ordinance 1921-1922 (N.G.) (Ordinances under New Guinea Act 1920, No. 3 of 1921 -No. 22 of 1922), ss. 7, 24.-Company established under German law in New Guinea

New capital-Payment to company-Payment to banker of company-Acquiescence of Company Rights of shareholder. -The High Court has jurisdiction to entertain an appeal from the Central Court of the Territory of New Guinea. Prior to the War a commercial company with limited liability was formed in German New Guinea under German law, of which the appellant and N. were the only shareholders, and each of them had contributed the same proportion of the capital. In 1913 N. went to Germany and never returned to German New Guinea. In 1916 the capital of the company was increased by a certain sum of which each shareholder was to pay in one half, but, it being impossible for N. to be communicated with during the War, the Company announced that the appellant took over the whole amount of the new capital and that the right of taking over one half of the new capital was reserved to N. until 6 months after the termination of the war provided that he had paid in his share with interest to the company. Held, that a payment made within the time limited on behalf of N, to a firm in German New Guinea which was the banker of the company, sush payment having been authorised by the only representative of the Company then in German New Guinea and not having been disavowed by the Company, was a payment in of N.'s share to the company so as to entitle him to an interest in the new capital equal to that of the appellant. Decision of the Central Court of the Territory of New Guinea (Drake Brockman, J.) affirmed. MAINKA v. CUSTODIAN OF EXPROPRIATION PROPERTY 34 C.L.R. 297. [High Court.]

Royal commission-Appointment by Letters Patent Act of Parliament extending commissioner's powers -Inquiry as to criminal charges-Validity of commission-Prohibition. -A Royal Commission was appointed to inquire whether there was a conspiracy corruptly to obtain money from a lessee of the City Council in connection with the surrender of his lease. An Act of Parliament 1924 No. 18, was passed, which, after reciting the Letters Patent and that was it desirable to extend the Commissioner's powers, and to provide for the procedure on the inquiry, enacted that the Commissioner should have the same powers rights and privileges as if he were a judge of the Supreme Court to whom a Royal Commission had issued. Held, on application for a prohibition to the Commissioner, 1. That the Commission was valid apart from Statute. 2. And further, that the Act was a validation of the Commission. 3. That the Commissioner was not acting as a judicial tribunal and therefore prohibition would not lie. The rule was therefore discharged. Clough v. Leahy (2 C.L.R. 139), and R. v. Macfarlane, 32( C.L.R. 518) followed. Cock v. The Attorney General, (28 N.Z.L.R. 405) considered. Ex parte WALKER, 24 S.R. 604; 41 W.N. 162. [New South Wales.]

ment out of consolidated fund-Absence of statutory authority-Right of Crown to recover. It is a principle of the British Constitution, inherited in the Constitution of New Zealand, that no money can be taken out of the consolidated fund into which the revenues of the State have been paid, except under a distinct authorization by Parliament itself; a payment made without that authority is illegal and ultra vires, and the money, if it can be traced, can be recovered by the Government. An agreement made in 1913 provided (inter alia) that the Minister of Railways of New Zealand (representing the Crown) should pay to the appellants £7,500 when the appellants granted a lease to B. & Co. The making of the agreement had been authorized by an Act of 1912, which empowered the Minister, without further appropriation, to pay to the appellants out of the public works fund, such sum as might be payable in accordance with the agreement. Owing to an alteration in the scheme to which the agreement related, the Minister did not require the appellants to grant the lease, and it was not granted. Nevertheless, the £7,500 was paid by the Minister of Railways to the appellante in 1914 out of a vote included in the public works schedule to the Appropriation Act for the year, and the Controller and Auditor-General passed the sum as being so payable. Held, that as the lease had not been granted the payment of the £7,500 was not authorized by the Act of 1912, and that it was recoverable by the Government and could be deducted from a larger sum admittedly due to the appellants. Judgment of the Supreme Court affirmed. AUCKLAND HARBOUR BOARD v. THE KING, [1924] A.C. 318. [Privy Council.]

Appeal to Privy Council-State Court action between Commonwealth and private personsJurisdiction of State Full Court.-See APPEAL.

Land acquired by Commonwealth for publie purposes-What passes to CommonwealthPowers of Commonwealth Parliament.-See RESUMPTION. OF LAND.

Agreement in settlement of dispute Validity of Commonwealth Statute-Retrospective operation of Statute. See INDUSTRIAL ARBITRATION ACT, col. 191.

Contract as to taking over ammunition factory-Executive Act of Commonwealth -Order in Council-Validiaton of agreement. -See CONTRACT, col. 78.

Industrial award-Jurisdiction of High Court upon a summons to determine existence ot industrial dispute. See INDUSTRIAL ARBITRATION, col, 206.

Commonwealth Court of Conciliation and Arbitration Interpretation of award-Award conflicting with State Law.-See INDUSTRIAL ARBITRATION, col. 196.