Goldsmith v Colonial Finance, Mortgage, Investment & Guarantee Corporation Ltd [1909] HCA 18; (1909) 8 CLR 241 (23 April 1909)

Goldsmith Defendant, Appellant; and The Colonial Finance, Mortgage, Investment and Guarantee Corporation Limited Plaintiffs, Respondents.

The pleadings in this case, which is an action for calls, have pursued a somewhat erratic course. The declaration is in the usual form, alleging that the defendant was a member of the plaintiff company and as such member became indebted to the plaintiffs in respect of six calls. The plea sets up a deed executed before the accruing of the causes of action, by which the plaintiffs released the defendant from all claims "in respect of any debt transaction matter or thing up to the date of the deed." The plaintiff, instead of demurring to the plea, replied specifically that the calls were made after the date of the release, which fact already appeared on the plea itself. The defendant rejoined, alleging (with other matters not necessary to be mentioned), that the liability of the defendant to pay the balance uncalled upon his shares in the plaintiff company was mentioned in the schedule to the deed as a contingent liability, and that the calls sued for were in respect of such uncalled balance. I suppose the rejoinder was intended to be in confession and avoidance, but it appears to be a departure. The plaintiffs surrejoined, setting out provisions of their articles of association which in my view are quite irrelevant. They also demurred to the rejoinder, and raised the question that the plaintiffs' directors had no power to release future calls. The defendant demurred to the surrejoinder, and attacked the validity of the replication. The plaintiffs joined in demurrer, and for the first time attacked the validity of the plea. During the argument before the Supreme Court the pleadings were allowed to be amended by what were called additions to the rejoinder and surrejoinder. The addition to the rejoinder alleged that after the calls were payable the defendant's shares were forfeited by the company under a power in the articles of association. This was apparently set up either as a new defence, or as an additional fact enlarging the operation of the release. The plaintiffs' addition to the surrejoinder set up that under the articles a member whose shares were forfeited continued liable for calls already made.

The substantial point argued before the Supreme Court was whether a release of future calls, the member still continuing a member in respect of the shares on which they are made, is valid. The Court held, on the authority of Ooregum Gold Mining Co. of India v. Roper[1], that it was not. The appellant did not before this Court impeach the correctness of that decision, which was clearly right. The Ooregum Case[2] involves, as pointed out by Cozens-Hardy L.J. in Bellerby v. Rowland and Marwood's Steamship Co.[3], the principle that a joint stock company of limited liability cannot by any device relieve a shareholder from the liability to pay the full amount due on his shares.

Mr. Rich, however, in a very ingenious argument sought to set up another defence, which can perhaps be spelled out from the pleadings. First, he contended that an action for calls, quâ calls, will not lie against a member after forfeiture of the shares. In support of this proposition he relied upon a dictum of Lord Cairns L.J. in Stocken's Case[4]. The article under consideration in that case was as follows. "The forfeiture of any share shall involve the extinction at the time of the forfeiture of all interest in, and all claims and demands against, the company in respect of the share, and all other rights incident to the share." The learned Lord Justice is reported to have said[5]:—"Now, suppose the clause had stopped there, and there had been nothing more in the articles. I apprehend that clearly no action could, after forfeiture, have been maintained for the recovery of the calls previously due, and that for two reasons. First, I think so in consequence of the words used, namely, that all rights incident to the share are extinguished, which words cannot, in my opinion, be confined to rights against the company, but must extend to all rights incident to the share. In addition to that, I am strongly disposed to think that the mere fact of a duly authorized forfeiture of shares without anything in the articles defining the effect of forfeiture, would of itself, in the very nature of things, render any proceedings at law for past calls incompetent, because such proceedings must, I apprehend, be on the footing that the person sued was a shareholder in the company; and if his interest in the company had been destroyed, it is by no means clear that the action could be maintained." He went on to say that the provision in the article seemed to him to be "in substance and in words the creation of a new right."

This would not, however of itself be an answer to the present action, since the article pleaded by addition to the surrejoinder expressly continues the old liability. But Mr. Rich contends that, although the liability is, in one sense, the old one, the right sought to be enforced is a new one, created by this article and not by the statutory contract created by becoming a member of the company, and that the liability arising under the new right is not obnoxious to the rule established by the Ooregum Case[6].

Anything said by Lord Cairns is worthy of respectful attention, but it is to be observed, in the first place, that his dictum was founded upon the particular words of the article then in question, so that it is no authority for the construction of an article differently worded, such as that set out in the pleadings in the present case. In the second place, the point was not necessary for the decision of the case (which related to interest on the calls), and it was not argued. It was suggested by the Lord Justice himself during counsel's reply. If the dictum is taken in its widest sense as meaning that an action will not lie for calls after forfeiture, it is inconsistent with the earlier cases of Belfast and County Down Railway Co. v. Strange[7], in which it was held that an action for calls will lie although the member has since ceased to be a member of the company, and Great Northern Railway Co. v. Kennedy[8], in which it was held that such an action will lie although the cessation of membership arises from forfeiture of the shares. Parke B. put the case on what I conceive to be the true principle in a few words:—"Until satisfaction there is no bar to an action for the amount of calls."

Apart from this point the present case is not distinguishable from the recent case of Ladies' Dress Association v. Pulbrook[9]. Vaughan Williams L.J. said:—"The articles of association provide that, notwithstanding the forfeiture of shares, there shall remain a liability for calls accrued due before the forfeiture. It is not material, as it appears to me, to consider whether, technically speaking, that provision imports a continuance of the old liability or the creation of a new one. The effect of it was that there was a right of action for these calls vested in the company at the time when it went into liquidation, and there can, in my opinion, be no doubt that that right of action continued to exist afterwards."

Can, then, the obligation to pay past calls notwithstanding forfeiture be regarded as a new and distinct obligation? The foundation of the argument is that the old liability is extinguished. Now it is a general rule both of law and common sense that an obligation once incurred continues until it is discharged by some means recognized by law. If the old liability is extinguished by the forfeiture, it must be by something in the nature of accord and satisfaction implied by law as the result of the forfeiture. But the law never implies a bargain contrary to the expressed intention of the parties. The article pleaded provides that upon forfeiture the shareholders "shall notwithstanding be liable to pay to the company all calls made and not paid at the time of forfeiture in the same manner in all respects as if the shares had not been forfeited."

It is, to my mind, impossible to construe this as an agreement that the old liability shall be deemed to be extinguished and a new one created.

There is, in truth, only one contract between the company and member, which is created by his agreeing to become a member, and the nature of which is declared by sec. 14 of the Companies Act (No. 40 of 1899), which corresponds substantially with sec. 16 of the English Companies Act. The obligation with respect to calls is a single obligation, and cannot be divided into two, one to pay calls quâ calls, and the other to pay a sum of money of the same amount and upon precisely the same conditions.

I think, therefore, that this argument fails. If, however, it succeeded, it would follow that the liability sued upon was one which came into existence by virtue of a new contract between the parties arising after the date of the release, and consequently not covered by it, which would be equally fatal to the defendant's case. Thus regarded, the whole of the pleadings before amendment would have had no application to the actual facts of the case, and the amendment to the rejoinder would have to be read as setting up a new cause of action to which the plea would afford no answer. In substance, therefore, as well as in form, the plaintiffs are entitled to succeed.

The declaration is the only pleading not impeached, and the question is whether the subsequent pleadings disclose a defence. The defendant relies on the release pleaded. In the Supreme Court judgment was given against him, and Pring J. in delivering the opinion of the Court, cited a passage from the judgment of Lord Halsbury L.C. in Ooregum Gold Mining Co. of India v. Roper[10], and a passage from the judgment of Lord Davey in Welton v. Saffrey[11], both stating in unequivocal terms the principle on which the House of Lords acted in the first mentioned case, and which it followed in the second. Later in Bellerby v. Rowland and Marwood Steamship Co. Ltd.[12], Collins M.R. (now Lord Collins) affirmed that the Ooregum Case "establishes that to release a shareholder from any part of his obligation to pay the uncalled-up balance on his shares is an ultra vires act on the part of the company," meaning an act in contravention of the statutory constitution of a company: and Cozens-Hardy L.J. (now Master of the Rolls) said in the same case[13]: "The decision of the House of Lords in the Ooregum Case5(1892) A.C., 125., that shares in a limited company cannot be issued at a discount, involves the principle, that the company cannot by any device relieve a shareholder from the liability to pay the full amount due on his shares.... Uncalled capital is part of the assets of the company." No one who reads the report of the Ooregum Case can doubt that these interpretations of it are unchallengeable. In that case itself Lord Macnaghten[15] summarized the matter in the words used by Mr. Justice (now L.J.) Buckley in speaking of the provisions of the Statutes as to the liability of shareholders in limited companies: "The dominant and cardinal principle of these Acts is that the investor shall purchase immunity from liability beyond a certain limit, on the terms that there shall be and remain a liability up to that limit."

I am clearly of opinion that even if the release of 1895 purports to discharge the then shareholder from liability to pay calls which might be made in the future, the expedient, however just it might be in the abstract or under the circumstances, will not avail to relieve him, and his liability remains. Mr. Rich argues that, after a person has ceased by forfeiture to be a member, an action for calls, as such, does not lie against him; and, where there is no article dealing with that case, the liability is extinguished; and that at any rate, where there exists, as there does here, an article sufficiently declaring liability after forfeiture, though an action lies against him, it is as "a mere debtor" to the company under a new contract, and hence that his liability, even in its prospective or contingent form, may be validly released, notwithstanding the Ooregum Case[16] and the other authorities cited by the Supreme Court. In my view it is a liability undertaken at the inception of the statutory contract, for good and all, up to the prescribed limit, at the call of the company, so long as the company observes on its part the original conditions. It is a fruit of the relation of company and shareholder, and once it matures it does not cease to be such if the relation ceases. It is a liability which endures as to things done under and during the contract, for instance, the making of calls, albeit the contract may have been determined (as by forfeiture) after such things have been done. In the case of forfeiture, indeed, the liability is in the present case preserved by the articles as a liability "to pay to the company all calls made and not paid on such shares at the time of forfeiture and interest to the date of payment in the same manner in all respects as if the shares had not been forfeited." It is thus in terms made a liability in respect of the shares. True, the company by the forfeiture "severed the relation between themselves and the ... shareholders," and he "became a mere debtor to the company"—See per Lord Davey in Aaron's Reefs, Ltd. v. Twiss[17], a case in which there was a similar article. And for that reason, where a shareholder whose shares had been forfeited had paid all calls and interest accrued up to the date of forfeiture (there being a similar article), it was held in In re Exchange Trust Ltd.; Larkworthy's Case[18] by Buckley J. that under another article, wide enough perhaps to be construed to give the company the power claimed, it could not afterwards, unless the ex-shareholder were minded to make a new contract to that effect, revoke the forfeiture, and restore him to the position of holder of the forfeited shares. In In re Randt Gold Mining Co.[19] a purchaser of shares from a company after forfeiture was held to be liable only for the whole amount uncalled on each share he had bought. Buckley J. held that under an article like that now in question the previous holder, who had forfeited, was under a liability to pay the call upon or in respect of the shares at the time of forfeiture. The liability had reference to the shares, which, when it accrued, were those of the prior owner, and it was referable purely to that ownership and to its statutory contractual incidents. In addition to the three last mentioned cases, that of the Ladies' Dress Association v. Pulbrook[20] was cited for the appellant. None of these cases seems to me to better his position. It is nothing to the purpose to say that the appellant became "merely a debtor" to the company. That is only another way of saying that he ceased to be a shareholder upon forfeiture. The question is, what was the contract he made as a shareholder, did he break it as and being a shareholder, and is he being sued for that breach of that contract? In my opinion the liability to pay the calls is exactly the same liability that existed while the appellant was still a shareholder. Although after forfeiture the relation between him and the company was that of debtor and creditor, so it was previously, albeit there was also the relation of company and shareholder. The contract and the breach, and therefore the debt, originated out of that previous relationship. In respect of the cause of action neither of these altered upon the cessation of the relationship, though the contract had been broken meanwhile, and though the forfeiture had terminated its operation upon future transactions. If necessary, I should probably be prepared to hold that the liability for calls, accrued before forfeiture, survived the forfeiture even in the absence of any express article such as we find here; and I agree with all that the Chief Justice has said as to the dictum—for it is but a dictum—of Lord Cairns, then L.J., in Stocken's Case[21]. No such opinion as that eminent Judge there expressed has been judicially hinted since, so far as I can discover. In the earlier case of Belfast and County Down Railway Co. v. Strange[22], it appears to have been held sufficient to allege, in a declaration in a company's action for calls, that the defendant was the holder at the time the calls were made; and it would not be a defence to set up that the power of forfeiture had been exercised after the calls had become payable. The case of the Great Northern Railway Co. v. Kennedy[23] was decided under sec. 29 of the Companies Clauses Consolidation Act (8 & 9 Vict. c. 16). That section gave the company power to forfeit for non-payment of calls whether it had sued for them or not. It was held that the power to forfeit was not a mere alternative to the right of action, and that the forfeiture could not, therefore, be pleaded to such an action. Parke B. said that looking at the section it was clear that the power was only a further security for the calls; and he concluded with these words:—"Until satisfaction there is no bar to an action for the amount of calls." This case is not, perhaps, so strong for the respondents as Mr. Ferguson seemed to think it. But there is a plain difference between a provision such as is found in the section there in question and the article on which the appellant here relies as a new contract. The view that the power to forfeit is only given to strengthen the company's security for calls has been suggested in later cases.

But whatever might be the effect of failure to provide in the articles for liability after forfeiture for previously accrued calls, I am of opinion that in the present case the matter is put beyond question by the terms of the article itself, which I have quoted. It would be hard to frame words clearer in their express intention to keep alive the very liability once accrued just as if the contracting party had continued to be a shareholder. I cannot, therefore, accept the contention that the liability to pay this debt is a different liability from, or relieved of the same consequences as attended, the liability which existed a moment before the forfeiture. It was by the defendant's own contract that his shares were held subject to forfeiture, if he failed to pay. I do not see how that contract can carry with it any implication that his debt to the company shall after forfeiture be for anything but unpaid calls, or be in respect of anything but the shares. It may be as well to refer to the case, cited for the company, of In re Hoylake Railway Co.; Ex parte Littledale[24]. There A., a shareholder owing calls, transferred to B. The company registered the transferee in A's place, so that he was no longer a shareholder, though he still owed the calls. James L.J., discussing A.'s position, said[25]: "He was the shareholder at the time when the calls were made, and he would still be liable in respect of the calls then due. ... If the calls have not been paid, the liability still continues." And further: "He was, to all intents and purposes, in exactly the same position as if his shares had been forfeited; that is, he would be a debtor for the call due at the time, if anything were due."

As to Bath's Case[26], cited for the appellant, I am of opinion that if it were given the effect attributed to it by Mr. Rich, it would conflict with the principle underlying the decisions of the House of Lords in this connection, of which the chief is the Ooregum Case[27].

My conclusions, then, are these: (1) That the release set up would not, even if it purported to do so, avail to relieve a continuing shareholder of his liability to pay calls made after the release: (2) That the article pleaded in the amendment to the second surrejoinder does not upon forfeiture so alter that liability as to bring it outside the principle of the Ooregum Case[28]; and therefore that the release does not for any such reason operate to extinguish the liability.

It follows that the decision of the Supreme Court to enter judgment for the plaintiffs was right, and must be affirmed.

The ultimate contention of Mr. Rich, who put his case well, was this—he admitted that the company could not lawfully release the appellant's liability to pay calls as far as it was imposed by Statute, but he contended that the articles, as set out in the addition to the second surrejoinder imposed a new obligation by way of contract, and therefore the company's contract could release it, and the company did release it by the deed of 26th September 1895.

The appellant was, until forfeiture on 17th July 1899, the holder of 1,000 shares, on which the calls now sued for had been made, at various times in 1896, 1897, 1898 and 1899, all between the date of the deed and the date of forfeiture.

A part from the articles imposing the new obligation, I am of opinion that, after the forfeiture, appellant would not have been liable. This is I think established by the observations of Lord Cairns L.J. in Stocken's Case[29]; Romer L.J. in Ladies' Dress Association v. Pulbrook[30]; and Kekewich J. in Randt Gold Mining Co. v. Wainwright[31]. It was urged that Lord Cairns' view was only a dictum, and is wrong. It is true he does not speak finally, but it is the opinion of a very great Judge, and I think it is right. As he observes, the shareholder's interest in the company is destroyed by forfeiture, and we have to consider what that interest is. In Borland's Trustee v. Steel Bros. & Co. Ltd.[32], Farwell J. says:—"A share is the interest of a shareholder in the company measured by sum of money, for the purpose of liability in the first place, and of the interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with sec. 16 of the Companies Act 1862."

In Randt Gold Mining Co. v. New Balkis Eersteling Ltd.[33], Lord Halsbury L.C. said:—"The share makes the holder of it a member of a trading partnership, and, as such, subject to all those liabilities of the partnership which the legislature has imposed upon it by what I may call the statutory deed of partnership." He then says what is very important to this branch of the case:—"It (the legislature) has provided means by which the capital shall be subscribed, and the partners compelled to pay what they by taking the shares have agreed to pay. It has also provided that the governing body shall be at liberty either to call up the whole of the agreed sum, or portions of the agreed sum, at such times and in such ways as they think proper by their rules to determine. It gives specimen rules, but does not bind the company to adopt those rules. Among the things which the company can do is this—they can say If you do not pay at such and such a time the money which you have agreed by taking the shares to subscribe, your rights in the company shall go, you shall cease to be a member of it, and your shares shall be forfeited, but you shall nevertheless remain liable to pay what you have been called on to pay, and shall be charged with interest upon that sum while it is unpaid."

In Taylor, Phillips and Rickards' Cases[34], Lindley L.J. says:—"The word share does not denote rights only—it denotes obligations also."

If then we regard a share as a unity, an interest consisting partly of rights and partly of liabilities, it becomes apparent that forfeiture of the share, involving extinction of the whole interest, carries with it the liabilities as well as the rights. It would hardly be contended that after forfeiture the former shareholder could claim dividends previously declared, but not actually distributed—they are accessory to the interest lost; and it would be extraordinary if nevertheless he could be made liable for calls, which are nothing more than his promised contribution as a partner to the enterprise from which he has been evicted.

Forfeiture is a penalty for non-payment of calls (per Holroyd J. in Gray v. L. Stevenson and Sons Ltd.[35]). Forfeiture "is a punishment" says Blackstone, Book 2, p. 267, "whereby he (the owner) loses all his interest therein, and they go to the party injured, as a recompense for the wrong ... he hath sustained."

The result of the forfeiture of a partnership interest said Lord Cranworth in Clarke & Chapman v. Hart[36] is, as the word imports, that the "whole property which the partner, whose interest is forfeited, holds in the concern, goes to the other people engaged in the partnership."

I therefore think that, from the nature of the case as well as from the weighty opinions quoted, a valid forfeiture of shares in a company primâ facie involves extinction of all liability. The other parties have done with the ejected one, and all his benefits and burdens cease together.

Forfeiture is quite different from transfer. Transfer is a parting by the shareholder with portion of his interest, that is as from the date of transfer, and a retention of his interest up to that date; but forfeiture is an annihilation of all interest, a cesser of recognition of the former partner henceforth as a partner for any purpose.

Belfast and County Down Railway Co. v. Strange[37] was not a case of forfeiture, and that case, Great Northern Railway Co. v. Kennedy[38], and In re Hoylake Railway Co.; Ex parte Littledale[39], were all decisions on the special words of one particular Statute different from the Companies Act here, and do not govern this case.

But the articles here do exactly what Lord Halsbury pointed out the Statute enables the company to do, viz., provide that, notwithstanding the forfeiture of shares, past calls shall be recoverable. That statutory permission is meaningless unless Lord Cairns' view is correct. I think the argument is sound that such a stipulation is matter which may be released by a company, Still the question arises has the company released it? That depends in this case upon two separate considerations. The first is whether the terms of the deed extend to these calls. The only words which it can be suggested touch them at all are "which the (plaintiffs) then had or thereafter might have against the (defendant) for or in respect of any debt, transaction, matter or thing up to the date of (the said) deed." It is true that, as appears from the second rejoinder, the liability to pay the uncalled capital was specifically entered as a contingent liability in the schedule to the deed. But I pass that by with the observation that it was illegal on the ground stated by Collins M.R. in Bellerby v. Rowland and Marwood's Steamship Co. Ltd.[40], that "the reasoning in Ooregum Gold Mining Co. of India v. Roper5(1892) A.C., 125. establishes that to release a shareholder from any part of his obligation to pay the uncalled-up balance on his shares is an ultra vires act on the part of the company."

There was no call then made and no forfeiture had accrued; no call might ever be made; and if it were, forfeiture might not ensue. How, then, can it be said that the parties contemplated these general words to extend to a possible non-statutory obligation, and so intended to release in advance this non-statutory obligation? If the release had the effect which its words plainly indicate it was intended to have, the appellant was not to be liable to pay future calls, and was therefore not to have his shares forfeited for non-payment, and was consequently not to be under any obligation at all under the articles, and as a matter of inevitable result was not to be released from any such liability. Lord Westbury said in Directors &c. of London and South Western Railway Co. v. Blackmore[42]:—"The general words in a release are limited always to that thing or those things which are specially in the contemplation of the parties at the time the release was given."

That is sufficient to end the matter, but there was an argument raised on the demurrer to the second rejoinder which is of general importance. It was on the question whether, even if the general words of release did extend to the case, the deed was ultrâ vires of the directors.

I think it was, because, if the directors did execute a release as wide as is suggested, they exceeded the authority given by the articles. They were empowered to exercise all such powers as might be exercised by the company itself, and not necessarily in general meeting, but with this important qualification to the authority, that it was "subject to any regulations." That was the general authority. The specific authority afterwards stated does not include such a case as this. It is confined to four classes of cases: (1) Actions between the company and other persons, whether shareholders or not; (2) arbitrations; (3) compositions or assignments for the benefit of creditors; and (4) giving time for or abandoning "debts" which seem bad. The possible and contingent obligations after forfeiture were not a "debt" in 1895. See Whittaker v. Kershaw[43]. Now the regulations provided that the shareholder whose shares are forfeited shall, notwithstanding, be liable to pay to the corporation all calls made and not paid at the time of forfeiture, and interest thereon to the date of payment in the same manner as if the shares had not been forfeited; and to satisfy all (if any) the claims and demands which the corporation might have enforced in respect of the shares at the time of forfeiture, &c.

Although the directors had very large general powers, those powers were, as I have said, only granted subject to the company's existing regulations, of which that just quoted was one. That regulation, like all others, was "prescribed for the company" (sec. 13 of the Act of 1874) and was declared by sec. 15 to "bind the company." Lord Selborne L.C. observed in Oakbank Oil Co. v. Crum[44] that "directors and general meetings of companies of this sort can have no powers by implication except such as are incident to, or properly to be inferred from the powers expressed in the memorandum and articles of association. Their powers are entirely created by the law and by the contract founded upon the law which enables such companies to be constituted." In other words, the directors could not, and I am strongly inclined to think the company could not, by releasing the appellant act in violation of the explicit regulation which declared as part of the "agreement inter socios" (per Lord Cairns L.C. in Eley v. Positive Government Security Life Assurance Co.[45]), and as a contract between each member of the company (per Lord Herschell, Welton v. Saffery[46]), that past calls should be fully paid up in the event of forfeiture. It is enough for present purposes, however, to say the directors could not do so, and their delegated power was made expressly subject to the regulations, and therefore, whatever the construction of the deed, may be the defence fails; the demurrer to the second plea and to the second rejoinder should succeed, and the appeal be dismissed.

We have been invited to overlook the irregularities of the pleadings, and to consider this appeal on its merits. The material facts on which the demurrer rests are few. A shareholder in a limited company makes a composition deed with his creditors in 1895, and the company executes the deed. By this deed the company "acquitted released and for ever discharged the defendant from all debts actions claims and demands whatsoever which the company then had or thereafter might have against the defendant for or in respect of any debt transaction matter or thing up to the date of the said deed." These are the words of the deed as averred in the plea. But the shareholder retained his shares. Calls were made in 1896, 1897, 1898 and 1899; and subsequently on 17th July 1899 the company's directors forfeited the shares for non-payment of the calls. On 12th August 1904 the company went into liquidation; and this action is brought by the liquidators for the unpaid calls.

By the articles it is provided that shareholders whose shares shall have been forfeited shall notwithstanding be liable to pay to the company all calls made and not paid on such shares at the time of forfeiture (with interest). Therefore the forfeiture does not prevent an action for the amount of these calls: Aaron's Reefs Ltd. v. Twiss[47]; Ladies' Dress Association v. Pulbrook[48]; and it is unnecessary to consider what would have been the the position if there had not been such a provision in the articles.

But what about the release? How far does it operate? Wide though its words are, I should be strongly inclined to think that they ought not by themselves to be construed as extending to debts and liabilities created after the date of the deed: Lindo v. Lindo[49]. It appears, however, that in the schedule to the deed the liability of the defendant to pay the balance uncalled upon his shares was entered as a contingent liability; and I am prepared to assume that the directors meant to release the shareholder from his liability for future calls. But they had no power to do so. The law as to companies in New South Wales is the same, in all essential points, as the law of England; and it is to my mind clear that any agreement relieving a shareholder of his liability to pay calls thereafter to be made would be an agreement for reduction of capital, and therefore void: Trevor v. Whitworth[50]; Ooregum Gold Mining Co. of India v. Roper[51]; Randt Gold Mining Co. Ltd. v. New Balkis Eersteling Ltd.[52]; Bellerby v. Rowland and Marwood's Steamship Co. Ltd.[53].

[1] (1892) A.C., 125.

[2] (1892) A.C., 125.

[3] (1902) 2 Ch., 14, at pp. 31, 32.

[4] L.R. 3 Ch., 412.

[5] L.R. 3 Ch., 412, at p. 415.

[6] (1892) A.C., 125.

[7] [1848] EngR 95; 1 Ex., 739.

[8] [1849] EngR 1017; 4 Ex., 417.

[9] (1900) 2 Q.B., 376, at p. 381.

[10] (1892) A.C., 125, at p. 134.

[11] (1897) A.C., 299, at p. 328.

[12] (1902) 2 Ch., 14, at p. 25.

[13] (1902) 2 Ch., 14, at pp. 31, 32.

[14] (1892) A.C., 125.

[15] (1892) A.C., 125, at p. 145.

[16] (1892) A.C., 125.

[17] (1896) A.C., 273, at p. 295.

[18] (1903) 1 Ch., 711.

[19] (1904) 2 Ch., 468.

[20] (1900) 2 Q.B., 376.

[21] L.R. 3 Ch., 412, at p. 416.

[22] [1848] EngR 95; 1 Ex., 739.

[23] [1849] EngR 1017; 4 Ex., 417.

[24] L.R. 9 Ch., 257

[25] L.R. 9 Ch., 257, at pp. 259, 260.

[26] 8 Ch. D., 334.

[27] (1892) A.C., 125.

[28] (1892) A.C., 125.

[29] L.R. 3 Ch., 412, at p. 414.

[30] (1900) 2 K.B., 376, at p. 381.

[31] (1901) 1 Ch., 184, at p. 187.

[32] (1901) 1 Ch., 279, at p. 288.

[33] (1903) 1 K.B., 461, at p. 465.

[34] (1897) 1 Ch., 298, at p. 305.

[35] 25 V.L.R., 476, at p. 485.

[36] [1858] EngR 475; 6 H.L.C., 633, at p. 664.

[37] 1 Ex., 379.

[38] [1849] EngR 1017; 4 Ex., 417.

[39] L.R. 9 Ch., 257.

[40] (1902) 2 Ch., 14, at p. 25.

[41] (1892) A.C., 125.

[42] L.R. 4 H.L., 610, at p. 633.

[43] 45 Ch. D., 320.

[44] 8 App. Cas., 65, at p. 71.

[45] 1 Ex. D., 88 at p. 89.

[46] (1897) A.C., 299, at p. 315.

[47] (1896) A.C., 273.

[48] (1900) 2 Q.B., 376.

[49] 1 Beav., 496.

[50] 12 App. Cas., 409.

[51] (1892) A.C., 125.

[52] (1903) 1 K.B., 461; (1904) A.C., 165.

[53] (1902) 2 Ch., 14, at p. 33.

High Court of Australia

Goldsmith v Colonial Finance, Mortgage, Investment & Guarantee Corporation Ltd [1909] HCA 18; (1909) 8 CLR 241 (23 April 1909)

HIGH COURT OF AUSTRALIA