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selected at the discretion of the GOVERNOR, The proposal was in due course accepted and the Executive Council has ever since - included two unofficial me bers.
· THE HONGKONG WEEKLY PRESS AND but denied that they assigned or purported to assign the property of the defendant company to the Peak Tramway Company, Limited. The defendant agreed to assign the business of the the conditions of the agreement, but those con- defendant company at a fu:ure date subject to ditions were unfulfilled and the assignment was not made. Furthermore the defendants denied that the plaintiffs had any rights under sections 201 and 202 as alleged.
That then is the history of the change so far as Hongkong is concerned. Singapore is in a somewhat different position. It has what has repeatedly been denied to Hong- kong-a Municipal Council-and we do not kuow under the circumstances whether in the eyes of the Colonial Office Singapore possesses equal claims with Hongkong to
the concession which the Free Press advo- cates. We do not know what objection the Singapore Government may offer to the suggestion, but it is obvious that an un- official member or two on the Executive Council would add materially to its strength and inspire greater confidence on the part of the community whose interests equally with those of the Government are bound up in the wise direction of the affairs of the Colony,
SUPREME COURT.
Monday, February 26th.
IN ORIGINAL JurisdictION.
BEFORE SIR FRANCIS PIGGOTT (CHI F JUSTICE).
THE PEAK TEAMWAY LITIGATION,
The case of D. E. Brown and others against the Hongkong High Level Tramway Co., Ltd, and Messrs J. D. Humphreys and Son came on for hearing, Mr. H. E. Pollock, K.C., instructed by Mr. George Hastings (of Mr. J. Hastings' office), for plaintiff and Mr. C. D. Wilkinson for other dissentients, appeared for the plantiffs, and Mr. E. H. Sharp, K.C., and Mr. M. W. Slade, instructed by Mr. J. S. Harston (of Messrs. Ewens, Harston and Harding), for the defendants.
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[March 3, 1906.
sufficient information to enable shareholders decide whether it was advisable to attend the meeting or not. Referring to paragraph the circular stating that the object of the reconstruction was to enable the Company to acquire and construct a new tramway to the company necessarily working in Peak which would otherwise be an independent opposition. There was no statement con- tained in that notice 08 to the price Mr. Pollock, in opening, stated that he or the estimated price of constructing brought that master before the Court in Noren the new tramway, nor was there any statement ber last, and now it came on for argument. that it was proposed to merge that company in He then proceeded to read the pleadings which one with six times its capital. The capital of Brown, Allan Cameron and others, were share the capital of the new Company was 875 1,00), set out that the plaintiffe, Messrs. D. E. the Company was at present $125,00', whereas holders in the defendant Company, the second No mention was made of the period of time defeudant being the managers thereof. A required for the construction of the new circular was issued by the defendants last year tramway, nor was there any statement of the (May) giving notice that an extraordinary price to be paid for the acquisition of the sanction the dissolution and reconstruction of Obviously there was insufficient information meeting of shareholders would be held to concession to construct the new tramway. the company and to enable the company to to the shareholders and the statement adquire and construct a new tramway to the of the General Managers and Consulting Peak. On May 29nd a second circular was Committee was calculated to persuade share issued in which it was stated that resolutions holders that the prop sed scheme would be to the following effect would be proposed advantageous to them. The transaction was at the meeting : That the company be described as reconstruction," but what an dissolved; that the general managers be extraordinary reconstruction! If the new appointed liquidators: that the liquidators be scheme was to be carried out, it was extra- authorised to consent to the registration of aordinary that the notice did not stale that the new company to be called the Peak Tramway Company; that the liquidators be empowered to sell the undertaking of the company for $200 per share in cash or shares of the new Company and to enter into all necessary agreements to that effect. The meeting was held and the resolutions passed, the plaintiffs and others dissenting. A second meeting was held and confirmed the resolutions, the plain tiffe again dissenting. Plaintiffs then gave notice
to the company carrying into effect the special resolutions. to abstain from The defendant company did not obtain the consent of the Governor in Council for the sale or disposal of the property of the company, which approval was a rule precedent by O din. ance 2 of 1883. The defendant company without the authority of the shareholders agreed to purchase all right, benefit or advantage possess- ed by Mr. A. Findlay Smith in a project for the construction of a new tramway to the Peak and to pay therefor out of the funds of the defend- ant company a sum of $25,000 to Mr. A. Findlay Smith and $10,000 to the China Commercial Company, his rights and the money was paid over.
Mr. A. Findlay Smith assigned October last year the defendants consented to In registration of the Peak Tramway Company, Limited and an agreement assiguing the under. taking of the defendant Company to the Peak Tramway Company was entered into. The China Commercial Company also assigned their interest to the Peak Tramway Company for $35,000. Having read the statements of claim and defence, counsel said his Lordship would notice from the prayer in the statement of claim that it was framed in the alternative, viz. that plaintiffs either claimed for a declaration that the to be passed at the meetings in June were resolutions purported of no effect at al', and that the second defendants as general managers be restrained from carrying them into effect; or in the The statement for the defence showed that alternative they claimed that they had a right the defendants admitted the first eight to objrot to the resolution which had been paragraphs of the statement of claim, and passed to the effect that they were to take $200 asserted that the special resolutions therein
per share for their shares in the Hongkong referred to were valid and effectual. They High Level Tramway Company. They said admitted paragraph 9. but denied that the that the price ought to be determined by tramway and undertaking of the defendant arbitration." Before telling his Lordship on company had been sold, and that the obtaining what grounds they took objection, he had to of the approval of the Governor in Council was invite his Lordship's attention to the circulars not a precedent to entering into an agre ment and notice dated 22nd May, 1905. They admitted for the sale of the maid undertaking. Resp eting that both circular and notice were to be taken paragraph 10 of the statement of claim, together. Counsel then read the circular cou- the defendants denied that the second de vening an extraordinary general meeting of fendant at any time agreed on behalf of the the shareholders for the purpose of sanctioning defendant company to purchase any right, the re-construction of the Company. The first benefit or advantage possessed by Alexander point plaintiffs desired to bring to the notice of Findlay Smith or to pay therefor out of the the Court was the submission that that notice fands of the defendant company the sum of of the intended holding of the meeting was 325,CO) or any sum to Alexander Findlay Smith, insufficient in point of law and that in conse or the sum of $10,0.0, or any sum to the Chins | quenoe any resolations purported to be passed consider brieffy the position of what he would
The claim was for (1) a declaration that the resolutions which were or which purported to be passed and confirmed at the meetings of the shareholders of the defendant Company, held on the 3rd day of June, 1905, and the 20th June, 1905, respectively were and are ultra vires and void.
(2) An injunction to restrain the defendants from carrying the said resolution into effect, or, in the alternative,
(3) A declaration that the plaintiff and all the other shareholders in the defendant com- pany who have expressed their dissent in writ ing from the said resolutions were not and are not b and to accept the sum of $200 per share which is mentioned in the said resolution, for their interests in the defendant Company, but ware and are entitled to require the defendants, Messrs. J. D. Humphreys and Son, as the liquidators, either to abstain from carrying the seid resolutions into effect or to purchase their interests at a price to be determined in the manner prescribed by sections 201 and 202 of the Companies' Ordinance, 1865.
(4) Costs.
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capital would be increas d from $125,000 to $750 000-to six times the or gival capital, or make mention of how the dividends cara d on the former amount would be kept up. Having quoted judgments showing that decisions had b-en given in like circumstances restraining defendants on the ground of insufficient notice, counsel argued that it could not possibly be said that fair notice of the new sheme had been given to the shareholders to enable them to meeting. Proceeding, he pointed out that if judge whether or not they should at ́end the shareholders took out 25,000 shares at §1a esch in the new Company out of a total of $750,000 they would be in a minority in the new Company, and, having read the report of the meeting of the Company, stated that the Chairman had affirmed two or three times that the Company was pledged to buy the concession, but if that were so and it was admitted that $23,000 was paid for the purchase of the concession-it should have been stated in the notice that $10,000 Company. Plaintiffs submitted that there to be paid for promoting the new was nothing to compel combined diss/utients to accept the prios of $20) per share. There was nothing in the regulations of the Company to take away the rights of the shareholders, but Pollock quoted authority to support his con- that had since been disproved Mr. tention that nothing in the articles coul·l displace the proviso of the Ordinance. The mere fact that there was a provision for arbitration in. the articles of association did not oust the right of the shareholders under the Companies' Ordinance. taking could not be sold to a company Mr. Pollock argued that an under-
then not in existence, and that the obtaining of the consent of the Governor in Connoil undertaking.
a rule precedent to the sale of the He referred to the Ordinános which said "Subject to the approval of Gover and contended that the company were bound by nor being first obtained the company may sell," that Ordinance. The resolutions for the wind. ing up of the company, etc., were passed without such condition; they did not get the permission to wind up-
necessary The Chief Justice-But it is not wound up yet; your injunctiou prevents that. ⠀
Was
de-reed that our injunction be dissolved the Mr. Pollock-Assuming that your Lordship company would be dissolved. And supposing the consent of the Governor was withheld all the resolutions would be void. The new com- pany could not run the tram; the old company would be wound up. The shareholders, by passing the resolutions, did what they had no power to do under the Ordinances.
Mr. Sharp said he proposed to open his case as fully as Mr. Pollock in fact and in law. It was necessary to appreciate the whole case
A Commercial Company, Limited. Theagreement | following on that notice would be void. The call the old Company. An ordinance
referred to assigned the rights to the China notice contained no information of the intended Commercial Company. They assented to the,soheme. It only stated that schemes were to be registration of the Peak Tramway Company submitted. The question was whether that was
obtained in 1888 and Mr. Findlay Smith, was the promoter of the new scheme, principal promoter of the old tramway,
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