Part IV. Mining companies. Corporation Decisions Affecting British and Foreign Companies. British and Foreign Mining Companies. See chapter on Mining Companies infra. Decisions on Various Points. If a foreign corporation carries on business in the colony it resident where is deemed to be resident in the colony: McCaul v. The N.Z. Loan &c. Co., N.Z. 1 S.C. 297; following Newby v. Von Oppen, L.R. 7 Q.B. 293; Guy v. Ferguson Synd. Co., 10 N.Z. 405. carrying on business. Power to contract, &c. Evidence of incorporation. English certificate proof in N.Z. Transfers in blank void. A contract entered into in the colony by a foreign company is not void by reason of the company, at the time of the contract being entered into, not having an attorney in the colony appointed by instrument in writing; nor by reason of its attorney so appointed not having deposited his power of attorney in the Supreme Court; nor by reason of the company not having an office or place of business in the colony for service of legal proceedings as required by The Foreign Companies Act, 1884 (see now Part VIII. of the Act of 1903); nor by reason of its attorney not having notified the situation or locality of such office or place of business as required by that Act; or having failed to take out the annual licence required by Sec. 100 of The Stamp Act, 1882. A foreign company may, notwithstanding anything contained in The Foreign Companies Act, 1884 (see now Part VIII. of the Act of 1903), carry on business in the colony without appointing an attorney by any instrument in writing: Picturesque Atlas &c. Co. v. Harbottle, 10 N.Z. 348; and see Bateman v. Service, 6 A.C. 386. The fact that a company carries on business under a certain name is evidence of its incorporation under that name: R. v. Waldmann, N.Z. 1 C.A. 141; R. v. Langton, 2 Q.B.D. 296. A certificate of incorporation of an English company purporting to be under the hand of the Registrar of Joint Stock Companies in England is sufficient proof of the incorporation of the company without proof of the signature of the Registrar or of the official character of the person appearing to have signed it: Shaw Saville &c. Co. v. Timaru Harbour Board, 6 N.Z. 456. Section 132 of The Stamp Act, 1882, prohibiting transfers of shares in blank, applies to transfers of shares executed in England to be entered in the colonial register of an English company having a registered office in the colony, and a transfer in blank is, in such circumstances, void: Reid v. McCorquodale, 12 N.Z. 400. Decisions Affecting British and Foreign Companies. Jurisdiction to wind-up in It seems that under Sec. 310 of 1903 the Court in New Part IV. Zealand has jurisdiction to wind-up a foreign company carrying on business in New Zealand. The pendency of a foreign liquidation does not affect the jurisdiction of the Court to make a winding-up order, in respect of the company under such liquidation, although the Court will, as a matter of international comity, have regard to the order of the foreign Court: Matheson Bros., 27 C.D. 225. As to the necessity for a branch office to give the Court jurisdiction, see Lloyd Generale &c., 29 C.D. 219 ; see also Commercial Bank of South Australia, 33 C.D. 174; North Australian Territory Company v. Goldsborough, 61 L.T. 716. Under a winding-up order made by the English Court, the English order binds property real and personal assets of the Company are bound. Where, in N.Z. therefore, the leave of the English Court has not been obtained to bring or prosecute an action in the colony against a company in process of being wound-up, the Supreme Court of New Zealand will, on motion, stay the proceedings: Bank of Otago v. Commercial Bank of N.Z., Mac. 233. As to the status in New Zealand of a receiver appointed in a Status of debenture-holder's action in England, see N.Z. Midland Railway receiver. Co., 19 N.Z. 227. domicile. The interest of a shareholder depends on the law of the com- Company's pany's domicile, but a contract of pledge between shareholders of a foreign company is governed by the law of the country in which the shareholders are domiciled: Colonial Bank v. Cady, 15 A.C. 267. The fact that a foreign company is in liquidation is no defence to an action brought by an English subject in an English Court to recover a debt contracted by the company in England Tharsis Sulphur Co. v. Societe Industrielle des Metaux, 58 L.J. Q.B. 435; but see Bank of Otago v. Commercial Bank of N.Z., ut sup. A foreign corporation may, in accordance with the comity of nations, sue and be sued in English Courts in its corporate name: Henriques v. Dutch West India Co., 2 Raym. 1532 ; Newby v. Van Oppen &c., ut sup. Where a person takes shares in a foreign company he thereby becomes subject to all the conditions in the Articles of Association, including any stipulations as to the mode in which proceedings are to be taken against him; and where proceedings have been taken in accordance with such stipulations, it is no answer to an action on the foreign judgment that he was not Part IV. IN NEW ZEALAND. Decisions Affecting British and Foreign Companies. resident in the foreign country and had no knowledge or notice of the proceedings. But if the Articles contained no such stipulation, he would not subject himself to the provisions of foreign law on the subject: Copin v. Adamson, L.R. 9 Ex. 345 ; Bank of Australasia v. Harding, 9 C.B. 661; Bank of Australasia v. Nias, 16 Q.B. 717. If an English shareholder's shares in a foreign company have been held forfeited and the forfeiture upheld by a Court of such foreign country, he can get no relief in England: Sudlow v. Dutch Rhenish Rly., 21 Beav. 43. If a foreign company is sued in England, the lex fori as to procedure will prevail: Mackereth v. The Glasgow and SouthWestern Rly., L.R. 8 Ex. 149. PART V. Companies Limited by Guarantee. A COMPANY limited by guarantee is formed on the principle of Part Y. having the liability of its members limited to such amount as the members respectively undertake (as specified in the Memorandum of Association) to contribute to the assets of the company in the event of the same being wound-up. A company may, however, be limited by guarantee and by shares, i.e., a guarantee company may have a capital divided into shares, and, by Secs. 153 and 194 of the Act of 1882, holders of such shares were liable to pay at a winding-up the amounts unpaid in respect of their shares; see now Sec. 245 of the Act of 1903. In practice the number of guarantee companies is relatively small. This mode of incorporation is chiefly confined to clubs, traders' associations and (in England) mutual insurance societies and bodies which do not require a large working capital. Prior to the Act of 1903, where a guarantee company had a capital divided into shares, the share capital was stated in the Articles. Where a guarantee company has not a capital divided into shares the Articles must state the number of members with which the company proposes to be registered for the purpose of enabling the registrar to determine the fees payable on registration: Sec. 22 (4) of 1903. Prior to the passing of the English Act of 1900 a device was sometimes resorted to in England, where a guarantee company had not a capital divided in shares, of dividing the "undertaking" of the company into shares or interests-the Articles providing that such shares or interests might be dealt with in a manner analogous to shares in capital. This device was declared not illegal in Malleson v. The General Mineral Patents Syndicate, 1894, 3 Ch. 538. Sec. 27 of the E. Act of 1900, contains provisions rendering recourse to this device now impossible. Similar Part V. Companies Limited by Guarantee. provisions have been introduced into the New Zealand Act of 1903, Sec. 14. Compare the provisions of this Sec. with Sec. 9 of the Act of 1882. Where a guarantee company has a capital divided into shares the share capital must be stated in the Memorandum : Sec. 16 (2) of 1903. It need not be stated in the Articles; compare Sec. 22 (4) of 1903 with Sec. 18 (4) of 1882. As to the liability of the shareholders on the winding-up of a guarantee company having a capital divided into shares, see Sec. 66 (c) of 1903, and compare with Sec. 71 (5) of 1882. seems that, in view of Sec. 66 (c) of 1903, Baird's case, 1899, 2 Ch. 593, in which it was decided that a shareholder in a guarantee company is not a contributory in a winding-up, does not apply in New Zealand. There appears to be no substantial distinction as to the position of shareholders, between a guarantee company with a share capital, and a company limited by shares with a reserve capital under Sec. 37 of 1903. The Secs. of the Act of 1903 relating to guarantee companies are Secs. 16, 22, 43, 66 (c) and 245. |