ل
156
winding up, the fifth by means of a sale before winding up to be paid in shares of the new company.
Mr. Sharp-Supposing there had been no allusion to shares here and that it was wound up and a liquidator appointed, who sold the undertaking to the new company simultaneous ly created for the purpose. It does not matter what the proceeding is called. It is a legiti- mate transaction which would result in the new company carrying on the business of the old. Whether it is called
K
re-construction,
' re-organisation" or "amalgamation" is quite immaterial.
His Lordship-The difficulty I felt was whether the re-construction as mentioned in the notice that the undertaking would be sold to the new company, and as you put it a compulsory sale of sh res for cash is possibly a re-construction.
Mr. Sharp-You can only set aside such a transaction on the ground that it is fraudulent. The company was wound up by the consent of the majority and the liquidator was appointed. He has statutory powers and he choses to sell to the new company.
His Lordship-The precedent of re-con- struction did not contemplate that.
Mr. Sharp-I don't think it matters what the transaction is called.
His Lordship-The point now is whether there was sufficient notice to the shareholders whether the notice which was first re-construction was sufficient as it afterwards turned out to be proceedings by way of sale to a new company for cash.
THE HONGKONG WEEKLY PRESS AND
you say the new company should have beeo | joined ?
Mr. Sharp-Yes. He added that to set aside agreement, and that could not be done without that resolution would be setting aside the the new company being before the Court. Dealing with the personal aspect of the case, he pointed out that plaintiff knew about the scheme before he attended the meeting, because he referred to newspaper articles on the subject and discussed it in detail. If there was any on that ground. Ho acquiesced in the validity insufficiency in the notice, the plaintiff failed of the resolution and never suggested it was invalid until he failed to get out of the liquida- tors the $325 per share which he wanted.
The Court rose at 4.20.
Wednesday, February 28th.
The action at the instance of D. E Brown and others against the Hongkong High Level Tramway Company and Messrs. J. D. Humphreys and Son was called to-day, but after consultation between the parties the case was adjourned till Monday, 12th March, owing to the illness of Mr. Ewens, the principal witness.
IN BANKRUPTCY JURISDICTION,
A QUESTION OF PROCEDURE. Judgment was given in the action re Han Fuk Cheung firm sz parle the Hung Yuen Bank.
His Lordship said-There
are two que9- tions of some importance raised in this case, and as they were new I took time to consider them. Dealing first with the point raised under the Legal Practitioners' Ordinance, 1871, section 33, I do not think even if it were applicable to the present case it would come under the order giving the solicitor a charge on the property secured after it has been appropriated to another object by process of law. Now I do not think that such an order would achieve the end which
Mr. Sharp-It is not re-construction under the Act. It is wholly independent of the Act. It was a perfectly proper transaction which may or may not technically be called re-construction, Continuing his argument, counsel indicated that the $10,000 paid out of the funds.of the old company to Benjamin, Kelly and Potts was for brokerage and legal and other expenses -not for promotion, as stated. He dealt with the grounds of objection urged by plain-the solicitor in this case has in view. It would tiff against the resolutions, and afterward replied to various ponts which arose in the course of debate. The first was the mode of arbitration. Although they bad offered arbitration they denied that plaintiff nas entitled to arbitration. They might consider
caso
the mode of arbitration to which he was entitled. Upon that point he would only observe that the articles overrode section 22. He also sub- mitted that in any event the resolution to wind up was valid and the other resolutions could be confirmed. Whatever happened, the old company was in liquidation. Another point was that his Lordship could not consider the of shareholders away from the Colony. The articles provided for a ten days' notice and those who were beyond the radius of that notice must leave attorneys. If they did not do so or the attorneys declined to act, the shareholders them selves must abide by the consequence. Passing on to another matter, he would suggest as a proposition of law that the Court was always disposed to support the majority against a dissentient minority in anything the majority was empowered to do and may have done irreg- ularly. Of course he did not admit that they had done anything irregular, what would happen if the plaintiff succeeded in this case?
His Lordship Obtaining the injunction ? Mr. Sharp-Yes, one of two things would bappen. The resolution would have to be passed over again. There is no doubt about that. A point must not be overlooked that we are not the new company after all, although we are in a position to exercise control. The new com- pany has been registered with our consent, and It could act independent of us. If it did we should be left in an awkward position. It has entered into a binding agreement to buy Smith's conces sion from the China Commercial Company and will have to carry out that agreement. It might carry out the new line after all. I don't say it would. But one of these two things mast occur. Either we pass this resolution over again or what would be infintely worse the new company, being in a position, might act against us and do what the majority of shareholders decided to prevent by agreeing to amalgamation. I submit also that the new company ought to be joined in this case,
C
His Lordship-Plaintiff asks for an injunction to prevent the resolution being carried out, and
only be applicable as batween him and his client, whereas what the solicitor wants is an order in favour of his client and as between that client and the creditor in the bankruptcy. He is, however, entitled to charge upon such property that is recovered out of the bankruptcy on behalf of his client and I make such order. Coming now to the application under section 1 (33). of the Bauk. ruptcy Ordinance the position presents to my mind grave difficulties, because the words of this section are sufficiently clear and the Official Receiver could not do otherwise than report as he has done. The property of the debtor has Leen preserved by the expeditions proceeding adopted by the solicitor in attaching the pro- porty and the bankrupt estate has benefited by
t.
He had at the same time notics of an available act of bankruptcy committed by the debtor and, therefore, in the words of the ection he was not entitled to priority of payment of his costs of these proceedings. I could, of course, not take into consideration the hardship if it results. from the law, but I thought it advisable to pause before deciding this case, because it was apparent that a very unsatisfactory state of affairs would result from an adverse order in this case. Proceedings by way of attachment where there is an absconding debtor would be abandoned and in every dase proceedings in bankruptcy would be started in lien thereof. We should then have half-a-dozen bankruptcy petitions in Conrt. The Official Receiver him- self admitted that to support bis report he must contend that bankruptcy proceedings should have been iminediately started in view of pro- ceedings by writ and subsequent attachment. This cannot have been contemplated by the Bankruptcy Ordinance, because the plaintiff in this action took proceedings which the law allowed him to take. The law, in fact, gives a creditor at least two remedies in the case of an absconding debtor: one to proceed under the Common Code of Procedure to attach property, the other by proceedings in bankruptcy. If there are two remedies, there cannot be only one; and if I were so to construe the Bank ruptcy Ordinance should be destroying the remedy of attacument, which is, since the Common Code of Procedure has taken its present form, the latest in point of time. It is perfectly true that if bankruptcy proceedings are started
[March 5, 1906,
by another creditor the property recovered may have to go into the common fund, but that is no reason why the creditor should lose priority his diligence. It is a sound rule that, where for his costs, which is the statutory reward of
the Court should never put the legislature in the two enactments are apparently in contradiction, position of having enacted an absurdity even through an oversight. I, therefore, hold that the words "any available act of bankruptcy" in the Bankruptcy Ordinance can only mean an act remedy. I am glad to say that the learned of bankruptcy for which the law provides noother Puisne Judge concurs in this interpretation: and the Official Receiver also, though he was bound to raise the point. There is this unsatis- factory side to the decision that, there are two sets of costs with priority: those of the plaintiff in the action and those of the petitioning creditor in the bankruptcy, If such a case
|
should
occur again the Official Receiver's attention must be directed to the matter, and the bankruptcy petition as the case seems to the Court will make such order on the hearing of
I, therefore, make the order asked
require.
for.
Thursday, March 1st.
BEFORE SIR FRANCIS PIGGOT (CHIEF JUSTICE.)
IN ORIGINAL JURISDICTION.
A COMPLICA.ED CLAIM.
equivalent in Hongkong currency of Tis. Ng Hang-liat sued the Yuen Sing firm for the
instructed by Mr. F. B. Deacon (of Messrs. 5,166.792. The Hoo, Mr. H. E. Pollock, K.C., Deacon, Louker and Deacon), appeared for by Mr. R. Harding (of Messrs Ewens, Harston the plaintiff, and Mr. M. W. Slade, instructed and Harding), represented the defendants.
The statement of claim set forth that plaintiff was a merchant carrying on business at Swatow under the style of the Tung Chung firm and claimed from the defendant firm the sum of Tl 5,166,792, as per account between them,
In reply the defendaut firm denied that plaintiff carried on business under the style of the Tung Chung firm. The plaintiff, whose surname in the Cantonese dialect was pro- Him-un, deceased, otherwise known as Pink nounced Wong, was the younger son of Wong Kee, who up to the time of his death in 1899 carried on business uuder the style of the Tung Chung firm. Wong Him-un was a partner in
Tls. 10,000, of which sum various amounts had the defendant firm and in 1898 lent them been repaid, but the balance still due amounted to Tls. 5,166,792. This amount the defendants were ready and willing to pay to the legal representative of Wong Him-un.
Mr. Pollock said that, as far as the amount defendants denied owing the money to plaintiff. was concerned both parties were ia accord, but The point at issue practically was whether the defendant firm dealt with the plaintiff or his father. The statement made in the statement of defence that Wong Him-un was otherwise known as Ping Kea was not correct, as the plaintiff used the name, not his father.
The case was adjourned.
IN PROBATE JURISDICTION,
fat arising out of the probate action re Cheung The action Cheung Kau-sin v. Cheung Choi- Wong-shi (deceased) was concluded. Mr. H. G. Calthrop, instructed by Mr. (of Mr. John Hastings' office), appeared for G. Hastings the plaintiff, and Mr. M. W. Slade, instructed by Mr. G. K. Hail Bruttou (of Messrs Bratton,
ett and G. Idring), represented the defence. made for the payment of costs, which had not Mr. Slade pointed out that order had been been complied with by the plaintiff.
Mr. Calthrop said that the costs taxed included costs prior to the date of the non-appearance of plaintiff and amounted in all to $603 for one day's non-appearance. If the costs prior to that date were omitted it would make a difference of $20). The order was for costs incurred by the non-appearance. On the pleadings the defend- ant admitted that plaintiff was the daughter of the deceased and was therefore entitled to half the estate, the only question between