Ngurli v McCann [1953] HCA 39

High Court of Australia Williams A.C.J. Fullagar and Kitto JJ. Ngurli v McCann [1953] HCA 39

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment:—

July 8 Williams A.C.J., Fullagar and Kitto JJ.

This is an appeal by the defendants from an order of the Full Supreme Court of South Australia reversing on appeal the judgment of the learned trial judge, Mayo J. Mayo J. dismissed the suit. The Full Court allowed the appeal and declared that the issue and allotment of 4,199 shares in each of the defendant companies Ngurli Ltd., Carinya Ltd., Fitzroy Ltd. and Myall Ltd., on 20th December 1948, was invalid. It ordered that the allotments be set aside, that the share registers of these companies be rectified accordingly, and that each of these companies acknowledge indebtedness to the defendant Elder's Trustee and Executor Co. Ltd. as the executor of the will of Clifford Southcott deceased in the sum of £4,199.

The question at issue in the suit is whether allotments of 4,199 shares of £1 each made on 20th December 1948 in each of the defendant companies, other than the trustee company, which we shall call the holding companies, were valid allotments. The plaintiffs claim that these allotments were not made in good faith, nor in the best interests of the holding companies, but were made by Horace Southcott with the fraudulent intention of benefiting himself to the detriment of the plaintiffs as the remaining shareholders. In their particulars they state that Horace Southcott in making these allotments intended to reduce the value of each share in the holding companies from £26 14s. 5d. or some higher figure to £1 7s. 1d. or thereabouts and thereby reduce the total value of the plaintiffs' shares in all by £1,522 0s. 7d. or some higher figure and thereby increase the total value of the interests (both direct and through the estate of Clifford Southcott deceased) of Horace Southcott by the last named £1,522 0s. 7d. or some higher figure.