Page
April 2, 1906.
SUPREME COURT.
Tuesday, March 27th.
IN SUMMABy JurisdictiON.
BEFORE Mr. A. G. Wise (Poisne Judge).
A MONEY-LENDING WATCHMAN. The case in which Manna Singh sued Attar Singh for $10 for money lent came on for hear. ing. Mr. F. P. Hett (of Messrs Brutton, Hett and Goldring) appeared for defendant, while plaintiff appeared in person.
When plaintiff had been sworn, his Lordship said to the interpreter-Caution him before you start. We have had two cases on this $10. He had better be careful that he tells the some story now as then.
.
Plaintiff-They are true words. I will tell the truth.
His Lordship -You had better try to do so. By his Lordship-What are you -A watch.
man.
-Where P-At Watson's.
Night or day ?—Night.
His Lordship-Then you ought to be dis- missed. All you watchmen at Watson's lend money all round. You are always in court.
Plaintiff-I am a new man, I have only been
here two months.
His Lordship-And yet you have been before me three times already. I see that the defen- dant is a policeman. There are too many
of these cases against the police. Remember what I said. You leat him the money P-What for? Plaintiff-He asked me for $10. He wanted to buy rations.
Mr. Hett-This is the third case between the same parties. The first was for 8310, for money lent.
His Lordship-Yes, it turned out all wrong. I dismissed it but gave him leave to bring another action.
Mr. Hett-That was 80, Then there was another action ?
His Lordship-Yes. I gave judgment for $200 and knocked off $110, I have no sympathy for this man. Let us have your point, Mr. Hett argued that the $10 now claimed was included in the first case and therefore plaintiff had now no claim.
After further discussion,
Mr. Hett said the matter had been taken up by the police, and he proposed to ask his Lordship for a re-hearing of the other case.
CHINA OVERLAND TRADE REPORT. On December 13 of that year the existing company sent in a petition asking the Council to impose certain conditions on the promoters of the new company in the event of the Bill being finally passed. The Bill was not passed that year, but it seems that negotiations went on between the parties in which the Govern- | ment took part, which were continued into 1905: and in May of that year the old company abandoned opposition, and started the new idea of combination. The term "Smith's Concession" was used in arga- ment as a convenient term to describe this
state of affairs: that concession was made the the sale of it to the China Commercial Com- subject of certain contracta, one of which was
brokers a certain sum. pany with a collateral contract to pay the There was afterwards
:
the dissentient shareholders' shares be assesse by arbitration in accordance with the principle laid down in sections 201 and 202 of the "Com- panies Ordinance 1867. At the date of the issue of the writ, October 24, the number of dissentients was reduced to five. admitted that there were some shar-holders who were absent, some apparently being in Macao. On November 4 the plaintiff obtained an interim injunction restraining the liquidators from carrying the resolutions into effect, and the matter was most exhaustively argued before invalidity of the resolutions is based on two me during five days. The contention as to the
grounds:
First, that the consent of the Governor in Executive Council to the transfer of the old undertaking to the new company has not been obtained as required by Ordinance. No. 2 of 1883, 8. 45.
Secondly, that the notice of the meeting was insufficient.
2
The contention as to the alternative claim is that the plaintiff has been deprived by the terms of resolution four of the right to have the value of his shares assessed by arbitration as provided by sections 201 and 202 of the Cóm-* panies Ordinance of the Colonyý (sections 161 and 162 of the English Companies Act 1862). As to the first ground of invalidity the defend- ant company by its Counsel undertakes not to Executive Council has been obtained: as to the proceed until the consent of the Governor in
second, the defendant argues that the notice was sufficient. As to the alternative claim the rights under sections 201 and 202. The argu defendant contends that the plaintiff has no ment.had many branches, and the following is a concise statement of it as I understand it.
(1) The company has passed a resolution for voluntary winding up and has appointed liquidators: therefore the two resolutions (1. and 2) which deal with,these matters must stand even though resolution 4 be held invalid: in other words they must be treated as independent resolutions, all the rights of voluntary liquidaters thereupon accruing to the liquidators appointed under them.
(2) That voluntary liquidators have, and therefore that these liquidators have, the right to sell that property and undertaking of the company and to divide the proceeds: hence also to determine the price per share at which" the shareholders must part with their shares.
a contract of sale of the undertaking to what will hereafter be called the new company. It was in fact assumed all the way through the negotiations that the Government had so far pledged itself to sanction the creation of the new tramway that the Bill might be considered as through, and the "concession' an actual fact. This brings us to the period of combina- tion, A circular was issued by the General Managers on May 22, 1905, to the shareholders, in which they were asked to sauction the recon- struction of the old company, the object of which was explained to be to enable the com- construct a New Tramway to the Peak which pany (ie., the existing company) to acquire and otherwise would be construoted by an independent company necessarily working in direct opposi that as the General Managers considered that tion to this company." It was further stated this opposition would be fatal, arrangements had been made with a view to the amalgama- of the two cono ras, and that the proposed reconstruction would be advantageous to the company (ie, the existing company), and had the cordial approval of the principal share holders. A notice was issued on the same day setting out the resolutions which it was intended to propose in order to carry out the scheme as it had been detailed in the circular. It was agre d that the circular and the notice were to be read 8.8 one document, and indeed it would not be possible to do otherwise. The combined effect of them must be as I have a'a'ed it, although it must be noticed that there is no such express statement, but there is one in accordance with article 101 of the Articles to the effect that the meeting was to be held
(3) That in this case the liquidators have in of Association. The proposed resolutions were fact exercised this right or have been directed (1) that the company should be wound up by the company to exercise it-because what is voluntarily and (2) that the General Managers implied in resolution 4 is that there is a sale of be appointed liquidators. (3) That they should the old concern to the new company for a be authorised to consent to the registration of price out of which $200 per share will be paíð a new company with a Memorandum and to the old shareholders, this being the price Finally the case was allowed to stand over till
Articles of Association which had been pre-which the liquidator or the company have deter- Friday to give Mr. Hett time in which to pated with the approval of the Consulting mined to be the value of the shares. decide whether he would apply for a re-hearing Committee of the old company. (4) That or not:
Mr. Hett--If it is held this money is borrowed they should further be empowered to sell to this new company the nudertaking of the money the defendant will lose his pension. existing company
"at the price of $200 per His Lordship He ought to lose his pension.share either in cash or shares of the Peak They are not allowed to borrow or lend.
Tramways Company, Ltd., at the option of shareholders of the existing company," and enter into all necessary agreements to the effect. These two documents contained all the information that was given to the shareholders before the meeting. At the meeting 35 share holders were present, and the chairman presented the case in a fuller form and certain facts were either stated or elicited from which a clearer notion was obtained as to the particulars of the new undertaking. One was a point of great importance-that the price per share mentioned in resolution four had been fired by the Con sulting Committee according to the last price at which shares changed hands. Six voles were recorded against the first resolution: three against the second: four against the third, and four against the fourth. The resolutions were duly confirmed at a subsequent meeting held on June 20. On June 26 the plaintiff and six shareholders lodged notices of dissent in due form, and the plaintiff then brought this action on behalf of himself and all others the shareholders in the company" in which he disputes the validity of the resolu- tions, claiming an iojunction to prevent them being carried out: or in the alternative, a declaration following the form given in section No 1 of the Ordinance, which amounts in substance to a claim that the value of his and
His Lordship Well, I won't decide this to day. I will give him a chance for his $10.
Mr. Hett-He may get judgment on the re-hearing for the whole of his $310.
Wednesday, March 28th.
In Original JurISDICTION.
BEFORE SIE FRANCIS PIGGOTT (CHIEF
JUSTICE).
L
THE PEAK TRAMWAY LITIGATION. Judgment was delivered in 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. Mr. H. E. Pollock, K.C., appeared for the plaintiffs and Mr. E. H. Sharp, K.C., and Mr. M. W. Slade appeared for the defendants.
His Lordship said;
There are many interesting facts connected with this case, but the only material ones are the following: The Hongkong High Level Tramways Co. was registered in 1885, and after for years' struggle for existence developed into a very flourishing concern, paying gradually increasing dividends till 20 per cent, was reached in 1903. In 1904 Mr. Findlay Smith conceived the idea of an opposition line to the Peak, and promoted a Bill for that purpose in the Legislative Council of the Colony, which want as far as the second reading.
(4) That this sale is the first stage of the pro- posed reconstruction: that it is a sale for cash, and that the condition contemplated by section' 201 of a sale for shares in the new company has not been adopted, and further that it was not obligatory on the liquidators to adopt it; and therefore that section 201 does not apply.
(5) That as there is no other protection to dissentient shareholders to such schemes pro- vided by statute, the plaintiff has no right under any other section to call in question or upset the decision of the liquidators or the company, That they have, however, in the interest of peace offered him arbitration, though not under this section.
1 believe this covers the whole ground raised by the defendant company; there may be some minor points which I have omitted, but I think they will be found to be dealt with as I go through the major argument of the company. The first point to be considered is the absence of the consent of the Governor in Executive Council to the transfer of the old vndertaking to the new company. Although it seemed stone time to be suggested that the necessity of this consent would be contested, it was not and could not be. for the words are too clear to admit of argument. What the defendant did contend was that the negotiations between the Govern- ment and the company had gone s so far that neither the Government could” withhold its consent, nor the company draw back from effecting the transfer: that the consent wa indeed actually promised and virtually given - to which the reply is inevitable that may be
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