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IN CHAMBERS.

Before A'Beckett, J.

AUSTRAL CYCLE AGENCY LIMITED V. MCCRAE.

June 9, 13. Supreme Court Act 1890 (No. 1142), ss. 182, 183— Rules of Supreme Court 1884, Order LXV.. r. 4— Security for Costs-Company having Assets in Western Australia, but not Registered there. Where a foreign company, carrying on business in Western Australia, but not registered there, is shown to have assets in that colony, the company will not be ordered to give security for the costs of an action instituted by it in Victoria.

Application on behalf of the defendant for an order that the plaintiff give security for the defendant's costs of the action.

It appeared that the plaintiff was an English company, having its registered office in London, that its assets in this colony were of an unsubstantial kind, but that it had substantial assets in Western Australia.

The remaining facts and the argument appear sufficiently from the judgment.

Mr. Coldham, in support, cited :-Jones v. The Scottish Accident Insurance Coy., 17 Q.B.D., 421; Seegner v. Marks, 17 A.L.T., 201; 21 V.L.R., 491; and Sirdar Gurdyal Singh v. Rajah of Faridhote (1894) A.C., 670.

Mr. Duffy, to oppose, cited :—Main v. Kirk, 1 A.J.R., 155; Picturesque Atlas Coy. v. Searle, 14

NOTES OF CASES July 1, 1899.

1

A.L.T., 155; 18 V.L.R., 633; Haggin v. Comptoir D'Escompte de Paris, 23 Q.B.D., 519; La Bourgoyne (1899) I.P., 1; Rudd v. John Griffiths Cycle Coy., 19 A.LT., 111; 23 V.L.R., 350; Judgments Act, Western Australia (19 Vict., No. 13); and the Australasian Judgments Act 1888, sections 4, 5.

HIS HONOR said.-I shall consider the matter. HIS HONOR on a subsequent day read the following judgment. --A summons has been obtained calling upon the plaintiff, a company incorporated in England, and having its registered office in London, to give security for costs. In answer the attorney under power of the company for Australia and New Zealand, deposes that the company, independently of its substantial assets in Victoria, has substantial assets in Western Australia. An Act is in force in Western Australia for the registration of foreign judgments containing similar provisions to those of our Supreme Court Act 1890, sections 182, 183, and counsel for the plaintiff therefore contends that, following the rule first acted upon here in Martin v. McDonagh, 2 V.L.R. (L.) 37, security should not be required. Against this, arguments have been addressed to me and authorities cited to show that, though the judgment obtained here should be registered in Western Australia, nothing could be done with it, because the company is not domiciled there, and consequently could not be served with the summons, which, there as here, is a preliminary to permitting execution on a foreign judgment. That as the Court in Western Australia would not have jurisdiction over original cause of action for which judgment might

the

be obtained here it could not order service, which and redemption on the footing of such rectification. would enable a judgment good here and regis- The statement of claim, after setting out the morttered there to be enforced against the property of gages, and describing the circumstances under which the company in Western Australia. To adopt this they were executed, and giving particulars of the argument, I must hold that, in a parallel case, our surprise and mistake connected with their execution, Court would be similarly helpless, unless the defend- went on to allege in paragraphs 10 and 11 that certain ant debtor under the foreign judgment were in Vic- portions of the land subject to one of the mortgages toria or domiciled in Victoria, and that, under the had been sold and realized certain sums set out, and words "personal or such other service as the judge or that the plaintiff, through her solicitor, tendered to Court shall direct" no kind of effective service could the defendants, in full satisfaction, the sum of £355, be directed. Such a construction would defeat the on or about the 3rd May, 1899, but the tender was object of the Act, and no authority has been cited refused by the defendants. which supports it. In a parallel case I should have no hesitation in directing service on the person managing the defendants' business in this colony or the attorney authorised to act or acting for the defendant in this colony. In enforcing a judgment regularly obtained abroad, and registered here, altogether different considerations prevail to those which might prevent the Court from assuming jurisdiction over a foreigner as against whom it was proposed to originate proceedings here. I therefore think that good reason is shown for not requiring security for costs, and I dismiss the summons with £3 3s. costs, and I certify for counsel.

The defendants counterclaimed payment of the principal and interest due under the covenants in the mortgages, after deducting certain sums of money paid by the plaintiff to the defendants, and applied by them in reduction of the amount due.

The plaintiff, in her reply to the counterclaim alleged :

"5. The plaintiff repeats paragraphs 2 to 9, inclusive of the statement of claim, and says that the amount due by the plaintiff to the defendants does not exceed the sum of £355, the whole of which was tendered to the said defendants before action brought. 6. Portions of the land subject to the mortgage of

Solicitors: For plaintiff, Braham & Pirani; for the 22nd October, 1897, were sold on or about the defendant, Pavey, Wilson & Cohen.

Before A'Beckett, J.

NEVILLE V. HANSEN AND OTHERS.

June 12.

Rules of Supreme Court 1884, Order XIX r. 27, XXII, rr. 3, 17*-Action for Rectification and Redemption of Mortgage-Counter claim for payment of money due under the Mortgage-Reply of Tender before Action-Payment into Court-Pleading Embarrassing.

Applications should not be made under Order XIX, r. 27, unless there is something in the pleading really embarrassing.

The fact that a pleading may justly be subject to criticism is not sufficient to justify a summons under that Rule.

A Counter Claim for payment of moneys secured under the covenants in a mortgage, pleaded to an action for rectification of a mortgage and Redemption on the footing of such rectification, does not become an action at Common Law so as to compel the plaintiff to pay money into Court with a Plea of Tender before Action.

Application on behalf of the defendants to strike out or amend paragraphs 5 and 6 to the plaintiff's reply to the counterclaim on the ground that the said paragraphs are unnecessary, embarrassing, irregular, and tend to prejudice the fair trial of the

action.

The plaintiff claimed rectification of two mortgages,

dates, and realized the sums set forth in the 10th paragraph of the statement of claim. The whole of the proceeds of such sales was received by the defendants Hansen or one of them.

Mr. MacHugh, in support :-The counterclaim is a distinct action by the mortgagees against a mortgagor, and the mortgagor says that she has tendered the amount due before action brought. That is a plea of amount into Court under Order XXII., r. 3. A plea tender, and there should have been a payment of the of tender before action must be accompanied with a Bullen & Leake, 5th ed., p. payment into Court.

848.
A tender is simply evidence of readiness and
willingness to pay. The plea of tender is a bar to the
action, and the defence must be complete in every re-
spect. The most important respect is the payment
into Court. Dixon v. Clark, 5 C.B., 365. Paragraph
6 of the reply to the counterclaim is embarrassing, as
it is not stated who sold the land, or on whose behalf
it was sold.

Mr. Neighbour :-In a case of this kind, the plea of
tender is not a bar to the action, but has the effect of
Order XXII., r. 3,
stopping the running of interest.
does not apply to equitable defences, for the only rule
in that Order which does so apply is Rule 17*, which
provides that the old practice is to continue in respect
of equitable actions. In England the case is different,
for the old practice in Chancery has there given way
to the procedure under the Judicature Rules.
A plea
of tender, without payment into Court, could be raised
under the old Equity system, the effect being to stop
interest. Mortgagees who have refused a tender of,
sufficient to cover their demands, have often been
ordered to pay the costs of the suit. He cited Kin-
naird v. Trollope, 42 Ch.D., 610; Fisher on Mortgages,
5th ed., p. 875.

PRACTICE COURT.

Before Holroyd, J.

EX PARTE QUINLIVAN.

April 27. Companies Act 1890 (No. 1074), s. 36-County Court Act 1890 (No. 1078), s. 99-Register-Rectification of Register-Attempt to get rid of Shares for the purpose of avoiding liability-Sale of Shares by County Court Bailiff-Discretion of Judge.

A Judge has a discretion under section 36 of the Companies Act 1890 to refuse to order the rectification of the register of a company if he is not satisfied as to the justice of the case; and such an application was refused where it appeared that the applicant, the original holder of the shares, and a third party had concerted together to take advantage of the provisions of section 99 of the County Court Act 1890, for the purpose of enabling the original holder of the shares to get rid of an anticipated liability thereon.

Motion on behalf of Quinlivan calling upon the McCracken's City Brewery Company Limited, to show cause why the register of the company should not be rectified by substituting the name of one Quinlivan on the register in place of one Fowler.

HIS HONOR said.-This is an application to strike out certain paragraphs in the reply, on the ground ground that they are unnecessary, embarrassing, irregular, and tend to prejudice the fair trial of the action. I think a summons of this sort ought not to IN RE MCCRACKEN'S CITY BREWERY COY. LIMITED; be taken out unless there is something in the pleading which will really embarrass the other side-some real difficulty. I do not think the fact that the pleading may justly be subject to criticism is sufficient to justify a summons to strike it out ; and, if a summons be taken out on that ground and fails, I do not think the applicant should escape payment of costs. I think myself, and it is almost admitted, that but for the objection as to the plea of tender not being accompanied by payment into Court, the other objection would not have been taken. I think the objection to the statement as to the sums realized would have been a good one if taken as an objection to the statement of claim but I think that is cured by the defendants saying themselves that they have received those sums Then comes the statement by the plaintiff in reply claiming that these sums should be appropriated in a certain way. That is sufficiently intelligible, and no embarrassment can arise, and therefore that objection fails. Then coming to the other objection that the plea of tender is not accompanied by payment into Court. That objection is based upon applying a rule which ordinarily applies to simple common law actions where a sum is sued for, and the defendants wish to obtain all the advantages which can be obtained by a plea of tender before action, and payment into court. There is no doubt a rule as to that, and Mr. McHugh wishes to apply that rule under altogether different circumstances. Counsel admits that, if this statement of tender had been made as between mortgagor and mortgagee in an action by the mortgagor for redemption, payment into Court would not have been necessary; but he argues that, as the mortgagees are, by their counterclain, bringing a common law action, the plaintiff has no right to plead the common law plea of tender unless she pays the money into Court. I do not think that the action can be converted into a common law action in that way. The question raised by the plaintiff is as to how much she ought to pay, and the defendants counterclaim a very much larger sum than the plaintiff says she tendered. The plaintiff does not say that she made a tender in the common law action, but she says 'I owe you a less sum, and I have offered it to you, and you have no right to bring a cross action for the larger sum." The effect of that tender, if made, may have to be determined hereafter, but I do not think I should strike out the paragraph as embarrassing, &c., as I do not think the rule referred to is applicable to a complicated state of facts like the present. I do not think the defendant's complaint is a substantial one. Of course it is substantial enough on the view of the defendants as to the plea of tender, but I do not agree with that view. The summons will be dismissed with £3 3s. costs. I certify for counsel.

Solicitors, for plaintiff, Strongman and Crouch; for defendants, Madden. Drake, and Candy.

It appeared that Fowler was the registered proprietor of 1,500 shares in the company. He anticipated that a call would be made on these shares, and, in order to get rid of his liability, he arranged with one Hayes to sue him in the County Court. Hayes accordingly sued Fowler in the County Court, and obtained judgment against Fowler, who did not defend. Execution was then issued on the judgment, and Fowler pointed these shares out to the bailiff, who sold them in the usual way to Quinlivan for the sum of £3 15s. Quinlivan was a brother-in-law of Fowler, and a man without means. Quinlivan lodged the sale note received by him from the bailiff, and asked that the shares should be transferred into his name. This the company refused to do.

The article of association on which the company acted was as follows:

"Article 33. The directors may decline to register any transfer of shares made by any person who is indebted to the company or to enter the name of the transferree in the register of members in respect thereof, and may at their absolute discretion decline to register or allow any transfer of shares by any member without assigning any reason for such refusal and without incurring any liability in respect of such refusal."

Section 99 of the County Court Act 1890, under which Quinlivan claimed to be registered in respect of these shares is as follows:

"Whenever any sum of money shall have been recovered by the judgment of any County Court, and the same shall not be paid into Court . . registrar of the said Court. . . . . . shall issue out of such Court a warrant.

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bailiff of the said Court shall execute the said warrant; and every bailiff.. ... may. .. seize and take or levy and sell or dispose of any scrip or share or shares in any company standing in the name of the person against whom such warrant shall have issued, and the person or persons to whom the same shall or may be sold or disposed of, shall thenceforth become and be the legal possessor or possessors of such share or shares and all benefit accruing therefrom, and such bailiff or officer shall immediately or as soon after such sale as may be, by a sale note transfer every such share to such purchaser, and such sale note shall be a good, valid and legal transfer of every share mentioned therein to all intents and purposes as if such transfer had been made by the holder of any such share to such purchaser and such purchaser shall become and be a shareholder of such company, and entitled to all the rights and privileges, and subject to all the liabilities thereof, and the rules and regulations of the said company."

Mr. Leon in support :-This application is made under section 36 of the Companies Act 1890. Fowler was entitled to get rid of his shares for the purpose of avoiding responsibility as to calls, and the purchaser, by virtue of section 99 of the County Court Act 1890, became the owner of the share, and a shareholder in the company, and, as such, was entitled to demand that the shares should be transferred into his name. This is a statutory power, and the company cannot make articles inconsistent with the Act of Parliament. Article 33 gives the directors power to exercise an absolute discretion to decline to register a transfer of shares by a member; but this is not a transfer of shares by a member, but by operation of law, and therefore the article does not apply. In re Bentham Mills Spinning Company, 11 Ch. D., 900.

Mr. Isaacs, A.-G. (with him Mr. Mitchell), to oppose. Section 36 of the Companies Act 1890 gives a judge a discretion, and provides that he may "if satisfied of the justice of the case" make an order for the rectification of the register. In Gunter's Case, 16 A.L.T., 116; 20 V.L.R., 492, the Full Court refused, under similar circumstances, to order a rectification of the register of a company. This is merely a voluntary transfer by Fowler, and he ought not to be permitted to make use of statutory machinery for the purpose of working out a fraud on the company. If Quinlivan is entitled to be registered, he can bring an action against the company, and compel it to register him as a shareholder. Section 168 of the Companies Act 1896 provides that a transfer for the purpose of avoiding liability is ineffectual-[He was stopped.]

99 of the County Court Act 1890 for the purpose of enabling Fowler to get rid of an anticipated liability under the articles of association of the company, which articles he had by law subscribed to, and which liability he could not have avoided had it not been for the concerted scheme. Under the articles of association the directors would have been perfectly justified in refusing to register the name of the purchaser for Fowler, if such purchaser had been a man of straw, although Fowler might have supposed him to be a man of means, and although there might have been no fraud at all on the part of the vendor or purchaser, or although there might have been no concerting together or with a third party to enable Fowler to defeat, what would, but for that concert, have been impossible for him to defeat-a sensible provision in the articles of association giving the directors power to retain a shareholder who could pay, and to reject a person who could not. I have no affidavit before me from either Fowler or Hayes, two persons who would appear to have been concerned in what-without using the word in a criminal sense-I may call a conspiracy. There is not the slightest doubt that a shareholder, anticipating calls, might, before the recent legislation, have sold his shares to a pauper, if there was nothing in the articles of association to prevent him doing so. I am told that that is now prohibited, and I mention it merely to pass it by. I am assuming for the purpose of my judgment that a shareholder still has that right, and that the old equitable rule still remaims in force. Even if he could still do so, I feel the gravest doubt whether, under such circumstances, if the articles prohibited him from directly selling his shares to a pauper, or enabled the directors to disapprove of the person to whom they were sold, he would be allowed to escape the consequences by getting some other person equally guilty with himself to aid him in what is really a fraud on the company. I therefore say that, if the applicant Quinlivan has any rights against the company, he must be left to his action at law, and then there will be the possibility of examining and cross-examining both Fowler and Hayes. There is no possibility of doing so now, and, in a case of this kind, I think their evidence might be very material. I refuse this application, but, in doing so, I decide nothing as to the merits, but merely say that the applicant must be left to his action at law. I am inclined to think that the application should be dismissed with costs, unless the applicant bring an action to determine his rights, and succeeds in that action. I order that this motion be dismissed with costs unless the applicant bring his action within one month, and that, if the action is brought within that time, the costs of this motion will be costs in the action.

Solicitors: For applicant, Connelly, Crocker & Paling; for company, Crisp, Lewis & Hedderwick.

HIS HONOR Said.-Section 36 of the Companies Act 1890, under which this application is made, provides that a judge may either refuse the application, or order the rectification of the register if satisfied of the justice of the case. On the affidavits filed in the application, and on the documents produced to me, I am not satisfied of the justice of this case. I am inclined to the opinion that Fowler, and the applicant. Quinlivan, and the plaintiff Hayes had concerted together to take advantage of the provisions of section Factories and Shops Act 1890 (No. 1091), s. 61—

Before Holroyd, J. ELLIS V. WING LEE.

April 26.

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