Haas Timber & Trading Co Pty Ltd v Wade [1954] HCA 39

High Court of Australia Dixon C.J. Fullagar and Kitto JJ. Haas Timber & Trading Co Pty Ltd v Wade [1954] HCA 39

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment:—

Aug. 27 Dixon C.J., Fullagar and Kitto JJ.

The action out of which this appeal arises was brought by a shareholder against a company and the relief sought was rescission of the allotment of shares to the plaintiff and the return of the money paid up in respect of the shares. The plaintiff's case was that he had been induced to take up the shares by certain misrepresentations alleged to be fraudulent made by a director who had in fact been the promoter of the company and was in actual control of its affairs. Hanger J., who heard the action, made findings of all the material issues in favour of the plaintiff on 8th October 1953 and pronounced judgment granting the relief prayed. Subsequently his Honour gave his reasons in writing. The appeal from the judgment is based upon the ground that notwithstanding the falsity of the representations, the plaintiff was not entitled to relief because after learning of their falsity he delayed in taking action, acted as a member of the company and acquiesced. The company in question was incorporated on 22nd October 1951 under the name of the Haas Timber & Trading Co. Pty. Ltd. and it is the defendant-appellant. Under the articles of association three persons were appointed as its first directors; they were more fully described in the return of directors. They were Francis Morgan, manager, John Haas, taxi-owner and driver, and Frank Edgar Morgan, mechanic, son of Francis. On the day following the incorporation of the defendant company it entered into a contract for the purchase of certain land at Kingston having thereon a mill building, an office and two cottages and certain plant. The purchase price was £2,300 and it was to be paid by a deposit of £250 down and a single payment of the balance of purchase money, namely £2,050, on possession when the contract should be completed. The deposit of £250 was paid.