Luke v Waite [1905] HCA 5

Luke v Waite [1905] HCA 5 - HCA 1905 case summary — Zoe

[38]

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

[45]

"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

[53]

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

[61]

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

[96]

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

[98]

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

« condition of the retention of the money. There is no -tienatin of any subscriber at or before the time of his payment, _toshowanything more than is conveyed in the "list ofsubseribers," "aul the words there used, "to further the objects of the company," "pear to be more consistent with the passing of the subscriptions "tothe shareholders or to the recipients like any other donation inaid of a general purpose, than with the impression on them of _ ttrust for the complete achievement of that purpose, or in the -altemative for a reverter to the donors. Nor do I find any sub- =quent admission on the part of the shareholders or provisional s which ought to be taken into account so-as to alter the inferences arising from the antecedent and the contemporaneous fics, True, a letter from Mr. Chambers was put in, written to 'nef the shareholders eight or nine years after the subscription, mlexpressing, to use his own words, his "opinion that if any 'istibution of this money is made it must be among the Adelaide 'ihseribers only." But this is an expression of legal opinion mely, and the determination of this case cannot be affected ty the legal opinion of any of the litigants. 'The passage, quoted as an admission, is not an admission of fact, and {Ut eridence at all on the question of the terms on which

At a glance

Court

Decision date

Before

Source

Judgment (133 paragraphs)

Cited By (1)