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[1905] HCA 5
High Court of Australia
1905-07-01
Barton J, O'Connor J
Original judgment source is linked above.
H.U.or 4. The applicants were charged with being found in a comme, 1905. gaming house without lawful excuse, and were convicted ay} txtmm fined. Afterwards they were charged with assisting the ae of the house in conducting the business of betting that wasea on there. All that was necessary to support the second ch
was to prove that the house was kept, by the person who it, for the purpose mentioned, and that the defendants him, Now, on the proof of those facts, could they have b convicted on the first charge? Clearly not. IE that had been all the evidence given on the first charge, the ease must have been dismissed. That is sufficient to dispose of the application. 'The decision of the Supreme Court, so far from being open to doubt, appears to be obviously right, and this application there fore should be refused.
H.C. oF A. q 7 1905, "if* - Subecriptions - Failure of purpore - Resulting trust for donors - Conteact (0 << repay subscriptions - Consideration - Option to have money applied. towanis
'Metpovrye, Payment for shares ina Company - Appeal to High Court - Reveraal of judd
March7,8,9, ment on question of fact - Inference to be drawn from undisputed facts.
BG; 18) Money was subscribed by certain persons in Wileannia in the form of
Grimith C.J., deposits on applications for shares, at the rate of Is. per share, in a proposed eee. company, whose object was the locking of the river Darling. 'The greatet
this money having been expended by the provisional directors of the H. 4 company on preliminary expenses in respect of surveys and other 'vith a view to the formation of the company, and a special Act of
ie subscriptions towards the objects of the company, and especially
sna forned "to assist the projects of the Wileannia merchants," and the vvomittee resolved that C., the honorary secretary of the proposed company, dul "canvass for subscriptions towards the amount required to obtain the 'Act." 'The chairman of the committee thereupon signed a document
ating that: at a meeting of the committee C. "was deputed to canvass the aay for subscriptions to further the objects of the company." C. then 'elleted subscriptions from certain Adelaide merchants who were financially "erated in the locking of the River Darling, and who signed their names tothe document above-mentioned, the amounts of their subscriptions being set opposite their signatures. 'The subscribers were offered the option of ving their subscriptions applied as deposit. money upon application for hires in the company, but most of them refused to accept the option. The 'money s0 collected was paid by C. into a bank to the eredit of the proposed company, and the committee in Adelaide was informed of this fact and offered '0 objection, 'The formation of the company afterwards fell through and 'yas abandoned, and the moneys subscribed in Adelaide remained in the bank -forabout seventeen years,
Hild, that the money subscribed in Adelaide was a voluntary subvention "towards a project in which the subscribers and the receivers had a common interest, but as to which the subscribers declined to incur any future responsi- ilty, and was therefore a gift to the original subscribers in Wilcannia from
Where money is subscribed to a projected company on the terms that the salseriber shall have the option to have his subscription applied as payment 'application for shares, that option constitutes a valuable consideration for the payment of the money so as to rebut the implication of a resulting trust
_Therule that an appellate Court ought not to disturb the conclusions of the Grart appealed from on a question of fact has no application where there is 'tmeonlict of testimony, and the only question of fact is the proper inference _ obedrawn from the undisputed facts,
from the Supreme Court of Victoria. mn was brought by Thomas Luke, Arthur Woodfall and Wakefield Chambers, against William Charles Palmer on
nt being considered necessary, the directors sought to obtain in LUKE AND
4s obtaining the special Act. At a mecting at Adelaide a committee - Warre,
behalf of the persons who had contributed money towards the payment for shares in a company proposed to be incorporated for the purpose of locking the river Darling, and Peter Waite, on behalf of the persons who had contributed moneys otherwise in aid of the objects of the proposed company, seeking a declaration as to who were entitled to a certain fund in the hands of the plaintiffs. The facts and the nature of the pleadings are fully set out in the judgment of Griffith C.J. hereunder.
Holroyd J., before whom the action was tried, gave judgment in favour of the persons represented by the defendant Waite, with costs against the plaintiffs. :
On appeal to the Full Court (Madden C.J., and Hodges and Hood JJ.), this judgment was affirmed. The plaintiffs now appealed to the High Court.
Higgins K.C. and Mann, for the appellants. Upon the only evidence properly admissible, it is apparent that the money was given by the Adelaide subscribers for the general purposes of the company as long as they pursued the object of the company, viz, the locking of the river Darling. The questions from the plaintifiy point of view are, first, were they justified under the circumstances in applying to the Court for directions as to the disposal of the fund, and secondly, with regard to the counter claim, have the Adelaide subseribers any right to complain of any irregularity in the expenditure of the money ? Is it their money ? The Adelaide subscribers intended to part absolutely with their money. Their intention was clearly expressed by the subseription list headed with a statement that Chambers was deputed to collect subserip- tions "to further the objects of the company," and signed by each of the subscribers. No other document prior or posterior to that document should be looked at, except for the purpose of explaining the meaning of any words in that document. 'The only expression that needs explanation is " the objects of the com pany," and reference to another document shows clearly that its only object was the locking of the river Darling.
'That being so, the money was either subscribed as an absolute gift to the company to aid it in achieving its object, or it was ® gift for a publie purpose. In the former case, if the object is not
'pelongs to the shareholders. In the latter case, if the pur- mifasthere is again no resulting trust for the subseribers, but mit will onder the money to be applied on the cy pres seas being in law a charitable gift: Wilson v. Barnes (1); ey. General v. Lorimer (2); Cunnack v. Edwards (3). As 'shtisa charitable gift, see Attorney-General v. Heelis (4); y. Macdermot (5). Where a trust is declared by a docu- wi, the same rule exists as to alteration of the trust as in regard siletion of a written contract: Lewis v. Lewis (6); Hill on wes, p. 20; Lewin on Trusts, 10th ed., p. 51; Free Church of dv, Overtoun (7). The only declaration of trust is that jesubseription list, and it stands until upset by the Court. isnot an action to upset the trust. If the claim of the hide subscribers to the money is based on a contract, it could
ily failed, but here the consideration has not wholly failed. alo referred to Jorden v. Money (8); Chadwick v. nning (9); Daniell's Chancery Practice, 7th ed., pp. 987, 989.]
sto Court acknowledge that the object of the trust has failed. evidence shows that the money was subscribed for a special
Hrlongs to the subscribers, 'The appellants are not trustees money unless they be trustees de son tort. If there
cited, the Court may take into consideration subsequent uiments of the donors. If this had been a gift, no matter the motive of the gift was, the shareholders might at
If the money was syart of a contract, it is a reasonable inference that part of should be that, if the object failed, any money that was
L.R. 5 Bq., 60; LAR. 3 Ch., 676. 2 Rep. Ch. (7) (1904) A. Lord Halabu (8) 5 LL 9) (1896)
ther is no resulting trust for the subscribers, but the H.C. or a,
H.C. or A, left should be repaid to the subseribers. 'This Court 1905. under all the circumstances reverse the findings of fact of 4 Judge of first instance.
mandate at any time, and recover the money remaining i pended. The only time when a trust arose was when plaintiffs wrongfully took control of these moneys. If there only a partial failure of the contract, and the contract is seve the Court will order the unexpended portion of the money repaid. If the subscription list amounts to a declarat trust, the trustees are the Adelaide committee, and the eestuis trustent are the subscribers, on whose behalf the committee en into contractual relations with the company through Chamb An appellate Court has the same reluctance to over-rule a Jud of first instance as to the inferences he draws from facts as ith in regard to his findings of fact. R. v. Mollison (1).
They also referred to Lewin on V'rusts, 11th ed. p. 57; Und hill on Trusts, 6th ed., p.115; In re Abbott Fund (2); Ins Printers and Transferrers Amalgamated. Trades Protdia Society (3); Kendall v. Granger (4); Attorney-General v. ham (5); Brown v. Andrew (6 ard ed. p. 44; Laylor v. Lendey (7); Parry v. Roberts 6 New v. Bonaker (9); Fisk y. Aittorney-General (10). qi
Higgins KC. in reply, referred to Crabb v. Crabb (11); Kil ' y. Kilpin (12); Lewin on Trusts, 10th ed., p. 172; In ve Curtelé Trusts (13); In re Slevin (14).
() 2V.LR. (1), 144, (2) (1900) 2 Ch.; 326, (3) (1899) 2Ch.) 18 (4) 5 Bea, (5) 4De GM. & (6) ISLIQ.B,, 158, (7) 9 Bast, 49,
This is not a matter of tr Orners is either one of contract or of something in the nature of without consideration. If it is a contract, the subseri entitled to recover the money as on a total failure of eo tion; if it isa mandate the sub:
'The question for decision on this appeal, whith Seeupied the Court for a time quite out of proportion to th
steidence is in a very sinall compass, although it has been vi an to some extent obseured, by a mass of irrelevant "Take the following statement of the preliminary facts the judgment of Holroyd J.: - *In April, 1882, at « publie frat Wileannia, it was resolved that a company should be nel to be called the River Darling Navigation Co. Ltd. with a al eapital of £200,000 in 200,000 shares of £1 each, and sith the object of insuring continuous navigation between Wil- and Wentworth by locking the River Darling." ('The exact wore "having for its object the locking of the River Darling the purpose of insuring continuous navigation between filamin and Wentworth"). "Thirteen gentlemen were there- snappointed provisional directors, with power to add to their nb, and they were directed to take immediate steps to er the company under the Limited Liability Act of New wth Wales. In order to provide funds for preliminary expenses ley were requested to dispose of 50,000 shares in respect of thich one shilling per share was to be paid upon allotment, with 'gurantee that no further call should be made upon such issue iilfunds were required for construction. 'The plaintiff Chambers ms asked and consented to perform the duties of honorary . The provisional directors, who appear from the first Juhave been permitted to regulate their own proceedings and to 'tamge the affairs of the company pretty much as they pleased, Ist May, 1892, when it was resolved that their ordinary gs should be held on the first and third Monda Sunth ab 8 pam., and a temporary place of meeting was selected Nvasfurther resolved that the honorary secretary should be 'apprered to receive all moneys and to pay the same to the talitof the company's account with the Commercial Banking Uupany of Sydney, to be operated upon by cheques signed by ™ provisional directors and countersigned by himself. The many 80 constituted was not registered under the Limited Act, but the provisional directors began at once to for the furtherance of their project, and after some tedious tions and delay, sueceeded in obtaining from Mr. Gordon
difficulty of the ease, is as to the proper inference H. ©. or A
pany, should at the same time confer upon it all requisite for the execution of the contemplated works.
by Parliament would amount to about £300. The pro directors recommended that 16,000 shares, in addition to th
the public on the same terms as those previously issued, that both those already issued and the additional shares should k considered as paid up to the amount of 10s. per share. Citeulan were distributed to this effect, and it was hoped that the promoters' shares would be mainly subscribed for by the residents in and about Wileannia. These expectations were disappointe Practically no response was made to the circulars, and the d shareholders had become so lukewarm or indifferent that a genet meeting convened in February, 1884, to receive the report of th provisional directors together with a statement of the receipts and expenditure up to 31st January in that year, and to elect a fresh directorate was first of all postponed and afterwards abant- oned in consequence of the insufficiency of the attendance. About six months afterwards Mr. Chambers was despatched on a mission to Adelaide to endeavour to obtain assistance from the merchants. there. In the interval members who constituted the Board at the date of the report, seventeen in number, had caused a bill to be drafted, and had appointed a sub-committee of four to eonsiet and correet it, and these gentlemen had made some progress with their labours. L
"Whether they found the task beyond their powers or whethet, the directors being obliged to employ solicitors to pilot the bill through Parliament, it was deemed prudent to leave the whole of the business in their hands is not clear, but, as Mr. Chambers
'tis out of the result of his mission that the present action
"sarin" ihe Inter relevant facts are as follows: On 19th August, 1882, 'ng of merchants and others was held in Adelaide at 'he Chamber of Commerce, at which Chambers explained the 'ure of the proposed company's undertaking, and gave his 'aiiyate of its probable expenditure and revenue, It seems, Jn it does not distinctly appear in one report of his speech, 'that he informed this meeting that the immediate necessity of 'the company was to raise money to defray the cost of obtaining 'm Act of incorporation. A motion was then moved by a Mr. Harrold, and carried, that a committee, consisting of four other en and himself, should be formed in Adelaide "to assist projects of the Wileannia merchants," or according to another port, "to assist the provisional directors at Wilcannia in their 'sheme" After this motion had been carried, a Mr. Colton, Chairman of the Chamber of Commerce, is reported to have said that Chambers wanted the committee to work up an issue of (000 shares at Is. each with a guarantee that no more shares (quere money) would be called up until the construction of the leks was commenced, and that those shares, in the event of the company being formed, were to be paid up to 10s. each out of the aaptal of the company (I assume that this means that they "ere to be treated as paid up to 10s.): that he would ask the Tepresentatives of some of the leading houses of business who "Were present whether this was not really a case in which they a ao a small amount even with the ultimate prob- ity of losing it. On 2st August the committee met, and a resolution was 'Aied "that Mr. Chambers canvass the city for subscriptions ed to get the £300 required to place the Act to incorpo- the company before the New South Wales Parliament." A re was then drawn up in the following form, and signed the chairman ; - « Ata meeting of the Adelaide committee of the River Darling Navigation Co., held at the office of Messrs. and W. Murray on Thursday, 21st August, 1882, Mr. J. W. 'Sluubers was depnted to canvass the
further the objects of the company." Armed with this document, Chambers made his canvas, and obtained sums amounting j all to £307 7s. from nineteen subseribers, each of whom signed his name at the foot of the memorandum above set ont, addin the amount of his subscription. Chambers deposed, and his state ment, which was corroborated by a contemporaneous memorandum, in writing, was accepted by Holroyd J., that the subseribers were given to understand by him that, if they chose to join the com pany as promoters, they could have promoters' shares allotted to them to the value of their respective subscriptions, but that most of the donations were given as subs i None of the sub- seribers ever sought to exercise this option. All the money, except £50 subscribed by Harrold's firm, was received by Chambers and paid by him to the eredit of the River Darling Navigation Co, in the company's bank at Wileannia. On 15th September he sent a copy of the deposit slip, together with a copy of the last balance sheet and report of the company and a rough draft of the proposed Act of incorporation to Harrold, who acted as honorary seeretary to the Adelaide committee. On Ist October, - Harrold acknowledged Chambers's letter of the 15th September without comment, and enclosed a cheque for £50, the amount of his firm's subscription, which also was paid to the company's credit in the bank.
On 13th October a meeting of the Adelaide committee was held, at which Harrold " reported receipt of the paying-in slip for part of the money collected by Mr. Chambers," and laid before the meeting "proposed draft of Bill to be laid before the New South Wales Parliament." It was then resolved that the secretary write to Chambers returning the draft and asking him to keep the committee informed of the progress made by the company from time to time. Harrold apparently did so, for on 24th December Chambers, acknowledging a letter from him of 31st October, after explaining the delay in replying by his absence from Wileannia, informed Harrold that at a meeting of the provisional directors held on the previous evening his communication together with the remarks of Mr. Boothby (one of the Adelaide committee) upon the Act of incorporation were considered, "and as the draft of the Bill had so far met with the approval of your committee it was decided
"pea these facts the question for determination is: Upon what
wopied by, the provisional directors of the company? 'The dent Waite, who is one of, and represents, the subscribers, etands that it was paid and accepted upon a trust to expend it furthe purpose of defraying the cost of obtaining the proposed of incorporation and for no other purpose, or alternatively, trust to expend it for the general purposes of the company, stha resulting trust, in either case, for the donors as to any may not expended for the distinct purpose. The plaintiff', on iv other hand, contend that the money was paid and received as ;yoluntary donation from the givers to the company to aid them 'anying out their project, and that the circumstances negative 'yrsulting trust. They also contend that, if there was any it was to carry out the objects of the company, which were licking of the river Darling, a project. which, they say, may carried on until it results in suecess or until all the money is
'iiore considering these contentions it will be convenient to how the question now arises for decision. The funds 'auining at the disposal of the provisional directors when the mot £307 7s. was paid to their credit had amounted to less : £20, Of the total sum increased by the subscriptions they fapnded fifty guineas in respect of their solicitors' charges for 'initing the Bill. Soon afterwards, however, it was found that 'he pospects of getting the Bill through Parliament were hope- S Atthis time some further small payments had been made, 'aving a balance of £250 at the eredit of the company. This 'Was placed on fixed deposit bearing interest, and the deposit 'Tneved from time to time until it amounted to £438 3s. 5d. Bmore was done until 1901, when the plaintiffs, at whose themoney then stood, resolved to expend it on purposes tthe respondent Waite contends were in violation of the
tl trust. After some correspondence the Adelaide sub- OF AUSTRALIA. 261 shave it completed and printed in readiness for itsbeing brought H. ©. or A fye Parliament next session." No other communication ever Pes jetween the provisional directors and the Adelaide com- fyxy ayn ' Ornens 'a White
amsvyas the sum of £307 7s. paid by the subscribers to, and gammcs
sevibers, who from 1884 to 1902 had taken no steps, and made inquiries as to the disposition of the fund, claimed to be enti to the whole amount of £438. Some of the persons who subseribed for shares in the proposed company also laid claim the fund, The plaintiffs then brought their action against defendant Palmer, as representing the persons who had si scribed for shares in the company, and the defendant Waite » representing the Adelaide subscribers, praying a declaration as ty the ownership of the fund, which, after the expenditure noy alleged to be a breach of trust, amounted to £245 18s. 10d. The defendant Palmer by his defence merely submitted that the fun should be distributed amongst the persons who had agreed to take shares in the company, or alternatively between them and the Adelaide subscribers. The defendant Waite claimed the whole fund for the Adelaide subscribers, and counterclaimed for so much of it as had been already expended for the purposes whieh he impeached. Holroyd J., before whom the action was trie, was of opinion that the money was given in trust to be expended for a special purpose which had been exhausted, and that ther was a resulting trust for the donors of the fund as to all money not expended for that special purpose. He held that the expendi ture impeached by Waite was in breach of trust, and adjudged the plaintiffs to replace the amount so expended and to bring into Court the sum of £245, and to pay the costs of the action ani counterclaim. The Full Court, on appeal, affirmed his decision 'The question, as stated at the outset of this judgment, isas to the proper inference to be drawn from the facts. All the com temporaneous facts must be taken into consideration. 'To what rights then, if any, did the facts give rise in favour of the subscribers as against the company when they had paid their subscriptions, and what duties, if any, did the company ove them in respect of those subscriptions? Mr. Higgins relied mainly upon the terms of the memorandum to which the sub- seribers affixed their names, which described the donations i- vited as "subscriptions to further the objects of the company." The term "subscription" primd facie suggests an absolute gift, without any implied reservation of a right to an ultimate refunt ment of the whole or part of the sum given. Again, the gift is
futher the objects of the company," words which do not, H: ora.
that the givers were to retain any power of control over he fand, or over the persons to whom they gave it as to its ex- vita, which they must have had if the gift were impressed trust, If the idea suggested by Mr. Colton at the public ving of 18th August had been carried out, and the £300 had raised by subscriptions for 6,000 shares, there ean be no jubt that that sum would have formed part of the general funds ifthe eompany, and that the subseribers of it would have had no cdasive right to a distribution amongst them of such part as notexpended on the costs of promoting the Act of Parlia- went And, if any subscriptions were given on the terms that donors should have an option to have their subscriptions as payment of 1s. per share on promoters' shares, it is 'qqully clear that those subseribers would have been in no better
mn. Indeed, the payment of the money on the terms that vy should have such an option would be sufficient to constitute ubleconsideration for the payment: Rothschild v. Hennings
sw inplie trust in favour of the person who makes it is excluded. i the eases in which the subscribers refused even to accept the it of an option to take shares, the inference seems irresistible they intended to make a free gift. In either case the facts ive the suggestion that the subscribers contemplated that would in any event become entitled to a return of their 'sbscriptions in whole or in part. Nor is there anything in the knoe to suggest that the subscriptions were not all given on the terms, except as to the option to take shares. Again, the 'ney when received by the company was paid into their common The Adelaide committee, who were informed of the fact,
tion of the money for the purposes of the company. Manswer to these arguments reliance was placed on the words the resolution of the Adelaide committee "with a view to get
2300 required &." 'There is no doubt that the immediate y of the company. w:
ae s to raise a sum, estimated at £300, Mlle specific purpose of getting the Act of Parliament passed. i (1) 9B. & C., 470.
But the words of this resolution are, at best, ambiguous, accurately express the immediate object in view which ind the soliciting of subscriptions, i.e., to provide a fund which, it expected, would be required for the specifi purpose. Butthey a insufficient to establish an obligation on the part of the cou even assuming them to have accepted the money with knowl of the terms of the resolution, to expend the money for 'that pu pose only and to repay the unexpended balance, Such an obligation, if it existed, must have been contractual, for a mere representation of an existing intention would be ineffectual in law. If the part had thought that such a contractual obligation existed, it is strange that it never occurred to anyone to suggest it until after thelapse of nearly 18 years, and that no inquiries were ever made asto the amount expended in promoting the proposed legislation. Mo over, this is not the ease set up by the defendant Waite by his counter-claim. If it had been, the plaintiffs might well have i thought fit to take advantage of the Statute of Limitation, The committee was appointed "to assist the project of the Wileannia merchants," and the memorandum to which the sub- seribers affixed their names, instead of following the resolution of the committee, described the subscriptions as given "to further the objects of the company," thus in effect reverting to the terms of the resolution of the meeting, and omitting any mention of the particular object for which, as it was thought, they would be required. The terms of the intervening resolution of the com mittee cannot, I think, be relied on as showing that the subserip- tions were impressed with a specific trust for the legal and parliamentary expenses. With regard to the alternative trust suggested "to further the objects of the company," it is equally diffieult to see any ground for drawing an inference that it was intended or contemplated by any of the parties that there was to be a resulting trust in favour of the donors. 'The substance of the transaction was this: The Wileannia people had subseribed @ sum of £660 towards a project for locking the Darling, whieh was regarded as of importance not only to themselves but to the
Adelaide mereantile community, and which they hoped to cary
out by means of a joint stock company of which they would be members, their subscriptions being applied as part payment for
ied to the Adelaide merchants for assistance, and the latter fo their aid with a sum of £307 7s, refusing, however,
«inthe company if successfully floated. I find it impossible ganda git made under such circumstances as anything buta ntary subvention to a project which was regarded as one in hall the parties had a common interest, but as to which the vers declined to incur any future responsibility. In the case hagift there is neither a contract nor a trust. 'The objects site company must be taken to have failed and come to an end WF years ago; but, if there was no ori jary obligation, no ground for setting up such an obligation 'afforded by the mere fact that the hopes and expectations of
urties were disappointed. It may well be that, if the pro- isimal committee had refunded to the subscribers the money
s, founded upon written sions of opinion contained in letters written by Chambers fund in question should ibers, But it is clear that such expres- sof opinion could not bind the subscribers to the company sited by the defendant Palmer.
s in this case, there is no conflict of testi- Wand the only question of fact is as to the effect of the Proved in raising further inferences of fact: Thurburn v.
nny judgment the respondent has failed to show any right Mable ina Court of law to any part of the fund. The Q) LR., 3 P.C., 478.
shares. Finding themselves in want of more money, they 1: ©. oF A.
H.C. oF A. counterclaim ought, therefore, to have been dismissed,
Lexx asp have been a declaration that it was held by the plaintiffs on
Grinin ¢a. Supreme Court, but he is a party to this appeal, though he vy
regard to the fund the subject matter of the action there
half of the subseribers for shares in the proposed company. defendant Palmer has not appealed from the judgment of th
not represented before this Court. This Court can, there! now make the proper order.
'The respondent having no interest in the fund, it is not petent for him to raise any question as to the propriety or i propriety of the plaintiffs' dealings with it. I must not, howeve, be supposed to express approval of the manner in which it in fact, in part dealt with by the plaintiffs. No case, however, on this point is made by Palmer, and the Court is not called upon consider it.
The result is that the judgments appealed from must be di charged, and there must be a declaration to the effect I have stated, and the respondent's counterclaim must be dismissel With respect to costs, having regard to the nature of the action and the conduct of the plaintiffs, I do not think that the Court is bound to give them the costs of the counterclaim as against the respondent. I think that justice will be satisfied by giving them their costs of the action and counterclaim out of the fund, whieh, Tunderstand, is now in Court. If there is any surplus, it should go in payment of the costs of the defendant Palmer, and any
further surplus should go in payment of the costs of the defeni- ant Waite up to counterclaim,
The respondent must pay the costs of the appeal to the Supreme Court, and of this appeal.
Bantoy J. There is to my mind only one question in this case, and that is whether the moneys contributed by the Ade Subscribers in August, 1884, were absolute donations to the funds of the then proposed River Darling Navigation Co. If ting were not such gifts there was a resulting trust in favour of the Adelaide subscribers, if the facts establish that there is a failure of the purpose for which these subscriptions were raised. Iam
sully t the provisional directors in August, 1884, as an addition vinegenera funds of the body called the shareholders of the wept company. 'hese shareholders had in 1882 raised in Wleannia some £660 by subseribing for shares in the venture,
sueof the appellants, visited Adelaide for the purpose of pro- ing monetary assistance for the company's project, which
Darling, for the purpose of ensuring continuous navigation ween Wilcannia and Wentworth." This object was of much to business men in Adelaide, for continuous navigability een the towns named would result in a large accession of nfl to and from that city. Mr. Chambers was therefore able w draw together a number of gentlemen at the Chamber of Com- "newe on the 19th of the same month. He made a speech giving them "particulars with regard to the scheme for locking the luring" He dilated on "the prospect of the undertaking pay- liga fair rate of interest upon the outlay," and gave estimates the probable cost of the works, fleet, and plant, and the prob: tie annual expenditure and income from traffic. He spoke hypefully of the probable attitude of the Government of New Snth Wales, and asked the meeting "to appoint a committee to treugthen the hands of the directors in Wileannia," meaning the wvisional directors of whom he was one. The chair was wipied first by Sir Thomas Elder and then by Mr. David Muray. Imention Sir Thomas Elder's name because he was te head of the "Momba and Mount Murchison Proprietary," ™ represented by the respondent defendant Mr. Waite: and tame of Mr. Murray because he was not only in the chair the public meeting, but was chairman of the comaittee "wanted at that meeting. Mr. Harrold moved for the appoint- ment of an Adelaide committee "to assist the project of the amit merchants." After he had done so, Mr. Chambers ned that the work of the company was merely preliminary,
that the moneys subscribed were given absolutely and H.C. ov A.
and "they could not do anything until they obtained an Ag of Parliament," and he stated the facts concerning the fo mation of the company, which had not then and has not sj been registered, and also showed on what terms shares mily be obtained. If the New South Wales Government entered into
the promoters would be recouped any preliminary outlay. (1 statement, by the way, could scarcely have encouraged anyoneat the meeting who afterwards became a promoter to look to any quarter than the Government for a recoup or return of his sub. scription.) After saying that "money was required to place the Ad of Incorporation before the Sydney Assembly," Mr. Chambers: expressed his confidence that, if the South Australian Government brought the matter before the New South Wales Government, their advocacy would have considerable weight, and added th would be one of the duties of the proposed committee to agitate for the taking of that step. Then the motion for the appoint: ment of the committee was carried. 'There is no evidence as to which of the subsequent subseribers attended this meeting, except that Sir Thomas Elder, Mr. Murray, Mr. Harrold, and Mr. Colton were there, and these four gentlemen afterwards became sub- scribers. But throughout the meeting there was no mention of subscriptions otherwise than for shares. Before the meeting separated, however, the then chairman, Mr. Murray, said he did not think they could do much to forward the movement, beyond signifying by that meeting that the project would benefit not only _ South Australia but the settlers in the vast country watered by the | Darling. "It was altogether a matter for the New South Wales. Government to carry out," he said, "and he had very little hope ofa company being formed." . . . . 'There was no harm in
their saying that the scheme would be beneficial." 'The meeting would have wound up in this pessimistic tone had not Mr. Colton,
the chairman of the Chamber of Commerce, pointed out that Mr. Chambers seemed to desire the committee to work up an issue of
6,000 shares at 1s, each, and he (Mr. Colton) " would ask the repre sentatives of some of the leading houses of business who were
present whether this was not really a case in which they might
ee have dealt at some length with the report of this forthe following reason, It was earnestly urged at the gurthat what took place tended strongly to show for what pur- vceand with what ultimate objects the Adelaide subscription injerad upon, It seems to me obvious that, if taken by itself, towsthat, what was in the minds equally of Mr. Chambers and Adelaide friends of the project, at that stage, was the idea ting the project, if at all, by subscribing for shares in a ony. 'The idea of raising a subscription apart from the ingof shares, such a subscription as was afterwards collected, not seem from the report to have entered the head of anyone meeting, nor does it appear to have been entertained until
body, therein described as "the Adelaide committee of the Darling Navigation Co," which was held on the 21st of st. There were present Mr. Murray, in the chair, Mr. Harrold, hoat once became honorary secretary, and three other gentlemen, ¢ names do not appear on the subscription list afterwards el. But it was resolved "that Mr. 'T. W. Chambers canvass tity for subseriptions with the view to get the £300 required place the Act to incorporate the company before the New South WilesParliament:" The gentlemen present may have considered lemere placing of such a Bill before Parliament as tantamount
the meeting of two days namely, the "assisting the project of the Wileannia mer- Or they may have thought that the bringing on of a was but a step in pursuance of the wider object. I do not Which, for there is no evidence that the subscriptions were on the footing of the committee's resolution. It does "even appear that it came to the knowledge of any subscribers 'Merthan the two who were at the committee meeting, Mr. Murray 'wilt Harrold. But there was put in evidence for the plaintiffs Site sueeeeding exhibit a document which is clearly the most | Pleee of evidence in the case for determining the ques- im of the terms on which the subscribers parted with their ims}: 'That is the subscription list itself, with the following lant heading: "At a meeting of the Adelaide committee
sawasmall amount, even with the ultimate probability of H.C. or A.
of the River Darling Navigation Co. held at the office of Mi D. and W. Murray on Thursday the 2ist August, 1884, i, W. Chambers was deputed to canvass the city for subseripti to further the objects of the company. David Murray, Chairman, List of Subseribers." ; The heading, all except the chairman's signature, which is Mh, Murray's own, is in the handwriting of Mr. Chambers. Aud below the words "list of subscribers" are the signatures of all the firms and persons - nineteen in number - who furnished what have been called throughout the case the Adelaide subseriptions This document expresses in my opinion the intention common to Mr. Chambers, who wrote the heading, to the chairman of the Adelaide committee, who signed the heading, and to all the sub seribers signing beneath, headed by the firm of Mr, Harrold, the seeretary to the committee. 'The intention expressed is that thy subscriptions collected by Mr. Chambers are asked for and given "to further the objects of the company." Evidence as to the objects of the company is fortheoming. They are the locking the River Darling, and the insuring by this means of continuous - navigability between Wileannia and Wentworth. Without extran eous evidence, the title, "The River Darling Navigation Co" pretty clearly indicates to anyone who knows or has heard any- thing of that river the object of making it at least reasonably navigable. True, to make it navigable will require locks To enable locks to be constructed there must be the authority of an Act of Parliament giving the necessary powers to an incorporated company. And therefore the immediate object of the provisional company and its provisional directors is to obtain such an Act, if they are to do the locking. But that is all comprised in the term " objects of the company." The intention then with which this money, amounting to £307 7s., was paid and received, is established by the "list of subscribers for I find no admissible evidence in the ease to qualify or vary it It remains to ascertain whether, from the purposes shown by the document or from the failure to achieve them, a trust results in favour of the subscribers. I will take it for the purpose of solving this question that the object of the proposed company las
ed. More frshares declared themselves 2 company in their meeting at
Tiana, and, if their own project has not been expressly aban- awd it ay well be said to be dead, But does a trust therefore 'tin favour of the Adelaide subscribers? Not if the receipt of 'domoney by Chambers and the provisional direetors, who banked i¢with the ordinary funds of the company, was a receipt abso- jrin trust for the shareholders, as they have been called for venience all through the case. 'The circumstances of the pay- vext and receipt of the money in Adelaide seem to me to carry "theimpliation rather that the subscribers in that city parted "vith their money without reservation, and for ever, than that it tocome back to them if the project failed. 'There is no reason "tpsippose that they gave the money otherwise than in assistance ifthe company's project, or that the completion of that scheme
than 20 years have elapsed sinee the applicants H.C. oF A.
Certainly not. 'They received them for the shareholders, and the shareholders they are accountable. To say there is no try for the Adelaide subs: is not to say there is no trust at all 'The clear alternative to responsibility to the one body iste bility to the other. If the plaintitis w money for the purposes of the company, and if they have spat any of it away from these purposes, it is to the shareholders a
and will deal equitably with the costs and the fund.
O'Connor J. A great deal of the evidence at the hearing wa directed to proving a breach of trust on the part of the plaintii dealing as they did with the moneys in their hands after, asitwas
was occupied in proving that the project of the proposed company had years ago come to an end. For the purposes of my judgment T assume that the project of the proposed company was abandoned years ago, and that the plaintiffs were liable to account to one or : other of the two groups of persons represented amongst the
defendants for unauthorized expenditure of the moneys in the company's hands, and that they became liable to hand over to that group of persons the moneys now remaining. But the real question for deeision I take to be this: Is the defendant, Peter Waite, and the group of persons he represents, the Adelaide su scribers, entitled to call the plaintiffs to account for the moneys expended, and to demand from them payment of the money now - in hand? That is entirely a question of fact, and the answet depends upon the proper inference to be drawn from certain circumstances and documents well established in evidence. Mr Justice Holroyd in the Court of first instance drew the inferente that the moneys were received from the Adelaide subseribers by
Chambers, representing the Company, on trust to be expended for
the purpose, in the first place of obtaining the passing of an Att
ineorporating the company and giving them necessary power, Of
if that became impracticable, then for the purpose of inducing
vvithe Darling. 'The Supreme Court of Vietoria on appeal
the inference that the moneys were received from the a subseribers by Chambers as representing the company trast for one purpose, and one purpose only - that of obtaining be sage of an Act of the New South Wales Parliament woyorating the company and giving it the necessary powers. ther the money was paid over by the Adelaide subseribers
we purposes mentioned, or of the wider purpose for which sluintitfs contend, I find a difficulty in seeing any evidence would justify the inference that the money was received d with the trust to carry out these purposes, or any of u, or with the resulting trust to hand over the money or bulance of it to the Adelaide subscribers if the purposes ould be abandoned. Before the plaintiffs can be made liable to Adelaide subscribers, it must be established that they hold the moneys on trust for the carrying out of some purpose, and int the purpose has failed, or that they entered into a contract jo etum the money if the purpose should be abandoned. It is arthat there was no declaration of trust or express contract wothis effect; but it is said that, from all the circumstances under lth the money was received, such a trust or such a contract may lerasonably implied. I think it will be admitted that the only 'iets material to be considered are those which existed on or before le 2st of August, 1884, when the money was handed over to ambers. It was on that date, if at all; that the money became hed with the trust or subject to the contract to which I have 'Mered. The rights of the parties were then settled, and there Amevidence of anything having taken place afterwards to alter
'Statements written or verbal made after that date may, wiissions, be evidence against the parties who made them of
in some respects of their cases as put before the Those admissions could only be used to establish facts in August, 1884, and it would, in my opinion, be unwise any importance to statements made or written many
South Wales Government to undertake the scheme for H.C. or a.
years after the actual transactions, and at a period when memories of the makers or writers must of necessity become vague as to details. The only safe guide under circumstances is to look at contemporaneous documents and records of the transactions made at the time or very shortly after. wards, and to see with what portions of the evidence of the wit. nesses they are most consistent, and to what inference on the facts they fairly and reasonably lead. The only documentary evidence of the terms on which the Adelaide subscribers paid their money is the subscription list signed by each of the subscribers. The material part of the document is the heading signed by the chair man of the Adelaide committee, which it will be noted is deseribal as "the Adelaide committee of the Darling River Navigation Ca? That contains the words "Mr. T. W. Chambers was deputed to canvass the city for subscriptions to further the objects of the come pany." That is the only evidence of any express terms upon whieh the moneys were subscribed. 'There is evidence of reasons forthe necessity of subscriptions urged hy Chambers at the meeting of the 21st August, 1884, of the resolution passed at that meeting, and of the resolution of the committee appointed by that meeting. But there is no evidence to connect these matters with the payment by subseribers exeept the subscription list to which their sig natures are attached. There is only one other fact proved as to
the terms upon which the money was subscribed. 'That ocears
in Chambers' evidence. He states that the subscribers had the
option of being allotted shares in the proposed company to a
amount covered by their subscriptions, but that none of them hall
expressed a wish to avail themselves of the option. That evi
denee of Chambers is corroborated by an entry of his in the
minute book of the company dated the 23rd December, 1884 four
months after the money had been collected, in the following words:
"The most of the above were given as subscriptions, but it was
understood that, if any subscribers chose to come in as promoters,
they could have promoters' shares allotted to them to the value of their respective subscriptions." Mr. Justice Holroyd finds expressly that the facts so mentioned in Mr, Chambers' state ment have been 'proved. It would appear therefore from the
is h Eas, that the whole transaction may be thus described «subscription of moneys by mereantile people in Adelaide ip further the objects" of a company whose business, when ished, would be in effect the securing of continuous naviga- 'jmof the River Darling - a project in which we may assume 'iat the ubseribers were as business men deeply interested - ry subseriber in addition to the indirect advantage which a cutimonsly navigable River Darling would bring him, being slo entitled to the direct benefit urcholder in the proposed company to the extent of the interes 'ygsented by his subseription. That is a fair statement, I think, "fiat the facts amount to. Under these cireumstances what is 'tepmsition of these Adelaide subscribers ? Are they in a position "dpsons who have merely made an unconditional gift of their "piey, or, can it be reasonably implied from the circumstances 'uler which the subscriptions were given that they handed over 'thir money to the provisional directors of the company clothed vith the trust to return it if the project was abandoned? Or, again, "jisita condition of the receipt of the money that the directors 'uulerook to return it if the object for which the money was 'fin was abandoned? I agree with my learned brother the bef Justice that the allowing of the option was a consideration firthe payment of the subscription which would prevent the igjlation of trust, even if there were any cireumstances from 'hich trust could otherwise be reasonably implied. But look- 'hyat the list of subscribers and its heading, and at the evidence Be a Bee ok pee before and at the time of the pay- |S es e implied
tnt or the implied contract upon which his case rests, ia ae reason to doubt that the transaction was other than uld appear to be on the face of the subscription list - a gilt to the proposed company of a sum sufficient to help a their then immediate difficulty, the raising of sufficient li gant their incorporation by Act of Parliament, without ; Beerotion the work in which the subscribers were d, the locking of the River Darling, could not
hed by the subscription list itself, and by the facts H. C. or A.
be begun, and without any intention or expectation on their pa that, if the project was abandoned, the money would be ret There is no need to express any opinion as to whether plaintiffs could be called to account for unauthorized expendi by the shareholders to whom the money now belongs. Iti sufficient to say that the respondent Waite, as representing # Adelaide subscribers, has failed to establish that these mong were held by the provisional direetors of the proposed company upon any trust for the subseribers, or upon any obligation of ap kind to return it to them on the abandonment of the énterprise Tt follows in my opinion that Palmer and the shareholders inthe proposed company are entitled to a declaration in their favour As to the form of that declaration, and the order for costs, 1 entirely concur in the judgment of my learned brother the Chief Justice.
Appeal allowed with costs. Judgment appeild From discharged with costs. Respondents counterclaim dismissed. Declaration that the fund the subject-matter of the action is held by appellants on behalf of the sub- seribers for shares in the proposed. company. With certain other orders as to costs. Liberty to apply.
Solicitor for appellants, J. Woolf, Melbourne. Solicitors for respondent, Mills & Oulley, Melbourne. BL.