.

The student will find enlightenment regarding Loch and Mr Rodger when they reached the a clause of dispensation and a form of the clause age of thirty years. Authority was given to his in

Wood's Lectures on Conveyancing,” pp. trustees to convert his business into a company, 254 and 255.

with powers to his trustees to act as directors, In conclusion, reference may be made to the and to Mr MʻLaren to have the supreme control case of Macfarlane v. Monklands Railway Co. and management of matters connected with the (2 M. 519), and particularly to the opinion of business. The trustees were James Murphy Lord President Inglis (then Lord Justice-Clerk), (who died in 1911 and never acted in the trusts); where the freehold qualification, vote making, Mr MʻLaren (the testator's sister's husband); and the splitting of superiority and property and Mr M’Laren's clerk, Henry Allan Yearwood. are adverted to in connection with the inter- A company was accordingly formed on pretation of certain clauses in the company's 2nd January 1905. In 1916 Mrs Loch and special Act. It is observed in the rubric of the John Blackwood Rodger had both attained the case that the clauses of the Act founded on age of thirty years. The latter died in Decemwere adopted from a style framed with a view ber 1919. The Board of directors now consisted to preventing freehold qualifications from being of Mr and Mrs M‘Laren and Mr Yearwood. disturbed by such undertakings.

Under that directorate the business of the company appeared to have been energetically managed and to have amassed considerable

profits. The arrangement of the capital was JUDICIAL COMMITTEE OF THE

this : the total amount was £40,000 in £1

shares ; 20,000 of these were allotted to Mrs PRIVY COUNCIL.

MʻLaren; of the remaining 20,000, 10,000 THE WINDING UP OF A COMPANY.

should have gone to Mrs Loch and 10,000 to

Mr Rodger. Mrs Loch, however, was allotted Loch and Another v. John Blackwood Limited.

9999; Mr Rodger, 9998; and the three shares

left over were allotted one to Mr M‘Laren and (Present. —LORD SHAW, LORD PHILLIMORE, M'Laren's nominees ;

one each to Mr Yearwood and Mr King. (Mrs and LORD CARSON.)

the first being Mr M'Laren's clerk and the second his solicitor).

That was quite a natural and proper arrange(From The Times of 5th June.)

ment; but, of course, in the event of a division Their Lordships allowed an appeal from a of opinion between what might be called the judgment of the West Indian Court of Appeal MʻLaren interest on the one hand, and the reversing an order made by the Barbados interest of the nephew and niece on the other, Common Pleas Court ordering the winding up the preponderance of voting power lay with the of a limited company.

former. Although taking the form of a public Mr Wilton, K.C. (of the Scottish Bar), and company the concern was practically a domestic Mr Blanco White appeared for the appellants ;

and family concern.

That consideration was Mr Clauson, K.C., and Mr W. Gordon Brown important, as also was the preponderance of for the respondents.

voting power just alluded to. Lord Shaw, in delivering their Lordships' In the petition for winding up, eight different judgment, said that the appellants were reasons were assigned therefor. The first was : petitioners for an order by the Court for the that the statutory conditions as to general winding up of John Blackwood Ltd., under meetings had not been observed; the second section 127 of the Barbados Companies Act, that balance-sheets, profit and loss accounts, which was identical with section 129 of the and reports had not been submitted in terms of British Companies Act of 1908. The sub- the articles of the company; and the third was section particularly founded upon declared that the conditions under the statute and that a company might be wound up by the articles as to audit had not been complied with. Court “if the Court was of opinion that it is All those allegations were true, and it seemed just and equitable that the company should naturally to follow from the preponderance be wound up.”

Many years ago Mr John already alluded to that there was at least Blackwood established an engineering business considerable force in the fifth reason, that it in Barbados, and carried it on until his death was impossible for the petitioners to obtain any in 1904. Under his will his estate was divided, relief by calling a general meeting of the one-half to Mrs M‘Laren, the wife of Mr company. William M Laren, and one-quarter each to The principal ground of the petitioners was his niece Mrs Loch and to his nephew that it was just and equitable, in the circum, (Mrs Loch's brother), John Blackwood Rodger, stances, that the company should be ordered lately deceased ; the shares to be paid to Mrs to be wound up. That last ground was

affirmed by the Court of Common Pleas. wife and clerk had voted to himself out of the The judgment of the Court below proceeded on funds of the company. Their Lordships exthe view that the statutory prescription for pressed no surprise at the instant, repudiation winding up under the sixth section-namely, of Mr MʻLaren's proposals by Mrs Loch-a when the Court considered that it was just and repudiation which was creditable to herequitable—was restricted to cases ejusdem and at the application for a winding up of the generis with those enumerated in the other sub company being made. That application must sections of section 127 of the Barbados Com- succeed. The broad ground was that confidence panies Act. The Board, having fully considered in its management was, and is, and that most the authorities, the judgment, and the argu- justifiably, at an end. ments, were of opinion that that was not the It must, however, be said in justice to Mr law. In the opinion of the Board it. was in MʻLaren that after the parties were at arm's accordance with the laws of England, Scotland, length the £12,500 was refunded and the minute and Ireland that the ejusdem generis doctrine rescinded. Further, being advised that the (as supposed to have been laid down by Lord increase of salary from £1100 to £2000 was Cottenham) did not operate so as to confine the wrong, he abandoned it from February 1922, cases of winding up to those strictly analogous and at their Lordships' Bar, he being present, to the five instances of the first subsection of an assurance was given that the two years the British Act. It so happened that in several increase already drawn--namely, £1800—would instances there had occurred circumstances forthwith be paid to the company. analogous to those of the present in regard to Their Lordships would humbly advise his the domestic nature of the company and the Majesty that the appeal should be allowed permanent preponderance of voting power. with costs, and the order of the Court of Having cited several cases in the English and Common Pleas of Barbados restored with costs Scotch Courts, Lord Shaw said their Lordships in both Courts below. were of opinion that Chief-Justice Greaves (of Barbados), who tried the case, was correct

Solicitors, Mr E. Leslie Harris of Beveridge when he said :

& Co., London, for Thomson & Morgan,

Solicitors, Alloa ; Mr T. M. Weir, London. The directors in control since the death of Blackwood Rodger have, I think, laid themselves open to the suspicion that by omitting to hold general It is officially announced that an Order in meetings, submit accounts, and recommend a Council has been issued extending the Maintendividend, their object was to keep the petitioners in ance Orders (Facilities for Enforcement) Act, ignorance of the truth and acquire their shares at 1920, to Papua. The Act provides for the an under value.

enforcement in England and Ireland of maintenThe Board agreed with those views. In ance orders made by a Court in any part of the opinion which they had formed, Mr MʻLaren, His Majesty's dominions outside the United for reasons 'not unnatural, had come to think Kingdom or in any British Protectorate to that the business owed much of its value and which it extends, and the legislature of Papua prosperity to himself, and that he could has made reciprocal provision for the enforcemanage it as if it were his own. In 1920 the ment therein of maintenance orders made by assets very substantially exceeded the £40,000 Courts in England and Ireland. of the company's nominal capital. In May 1920 The operation of the above-mentioned Order Mr and Mrs MʻLaren and Mr Yearwood, at a in Council is confined to England and Northern directors' meeting, voted £12,500 to Mr MʻLaren, Ireland, and similar provision has not yet been and increased his salary as chairman from made as regards the Irish Free State by the £1100 to £2000. Mr MʻLaren then proposed to Government of that State. buy Mrs Loch and the Rodger family out for £10,000, of which she was to have £8000 and THE Secretary for Scotland has appointed the Rodger family £2000.

Mr James Conner, Sheriff-Clerk Depute of Their Lordships did not desire to characterise Aberdeenshire, to be Sheriff-Clerk of Aberdeenthose suggestions in the language which, shire in place of Mr David Littlejohn, deceased. perhaps, they fully deserved. The Rodger family, entitled to one-fourth of the holding in We are requested to announce that the firm the company, nominally £10,000, but in reality of Holmes, Mackillop & Co., writers, Clydesdale of a much higher value, were to be bought off Bank Chambers, Johnstone, and 208 St Vincent for £2000. No confidence in the directorate Street, Glasgow, was dissolved on 30th June could survive such a proposal. To crown all, last. From and after that date Mr W. H. as was afterwards discovered, the £10,000 could Mitchell, Mr E. L. Mackillop, and Mr Ralph be comfortably paid by Mr MʻLaren out of the Risk will carry on business under the same £12,500 which, four days before, he and his firm name and at the same addresses as hitherto.

a

case

66

A NOTE ON “HABITUAL

or not he was still a habitual criminal, and the CRIMINALITY.”

prisoner was entitled to call evidence to shew

that he was not at that time a habitual criminal. By the Prevention of Crime Act, 1908 The jury might find that the prisoner was not (8 Edw. VII. cap. 59), section 10 (1), “Where a a habitual criminal even though the prosecution person is convicted on indictment of a crime, proved the proposition in (a) or (6) of subsection committed after the passing of this Act, and 2; but before the jury could find the prisoner subsequently the offender admits that he is or to be a habitual criminal one or other of is found by the jury to be a habitual criminal, the two conditions precedent must have been and the Court passes a sentence of penal satisfied. The words“ shall not be found .. ser vitude, the Court, if of opinion that by unless" ought not to be construed as meaning reason of his criminal habits and mode of life shall be found .... if,” as the prosecution it is expedient for the protection of the public contended. In the present case the direction that the offender should be kept in detention given to the jury was too unfavourable to the for a lengthened period of years, may pass a appellant, and he was prevented from giving further sentence ordering that on the deter- evidence on his own behalf. mination of the sentence of penal servitude he In allowing the appeal, the Court overbe detained for such period not exceeding ten ruled Rex v. Stanley ([1920] 2 K.B. 235). Their nor less than five years, as the Court may Lordships declined to follow the of determine, and such detention is hereinafter M ́Donald v. H.M. Advocate (1917 J.C. 17). referred to as preventive detention."

There the Court of Criminal Appeal (for this Subsection 2 of the same section enacts : purpose and this purpose alone Scotland does А

person shall not be found to be a habitual enjoy the jurisdiction of a Court of Criminal criminal unless the jury finds on evidence Appeal) held that where the jury find on (a) that since attaining the age of sixteen evidence that the accused, charged with being years he has at least three times previously a habitual criminal, has on a previous occasion to the conviction of the crime charged in the been found to be a habitual criminal and said indictment been convicted of a crime, sentenced to preventive detention, they must whether any such previous conviction was convict him; and they cannot take into before or after the passing of this Act, and consideration whether, since that sentence, he that he is leading persistently a dishonest or has been leading persistently a dishonest or criminal life; or (b) that he has on such a criminal life. Carried to its logical conclusion, previous conviction been found to be a habitual this interpretation of the statute is equivalent, criminal and sentenced to preventive detention.” as the Lord Chief Justice pointed out in Norman,

The interpretation of this section has given to calling a man a habitual drunkard even rise to difficulties in both Scotland and England. though he may have been a teetotaller for The matter has now been settled in England thirty years. In refusing 'the appeal in by a bench of thirteen judges in the case of M‘Donald, Lord Dundas, who delivered the Rex v. Norman, in which judgment was delivered leading opinion, came into direct conflict on 26th May. The appellant had been sentenced with the view which has now prevailed in to three years' penal servitude for burglary England, in saying: “I cannot see that the and forgery. In September 1917 he had been meaning and effect of the subsection are found by a jury to be a habitual criminal and materially different from what they would have had been sentenced to preventive detention. been if the words had

that a person The appellant at the trial was told by the Court shall be found to be a habitual criminal if that it would be of no avail for him to call (and only if) the jury finds on evidence, etc.” evidence on his part, and the jury were directed Once that is conceded, then the whole case that they had no option but to find the prisoner goes the other way. The only question, as a habitual criminal. He was sentenced, as it was put by the Crown in the English case, a habitual criminal, to undergo five years' is one of the identity of the prisoner with the preventive detention. Against that sentence person previously found to be a habitual he appealed.

criminal and sentenced to preventive detention. The appeal was successful. There was The whole point is a narrow one, and savours very marked division of judicial opinion. of the metaphysical. It need create no alarm The Lord Chief Justice carried seven judges that our law upon it is diametrically opposed with him, and Avory J. gave the leading opinion to the English one, for, from the point of view of four dissentients. Sankey J. declared himself of the sentence which the prisoner actually unable, at the end of the day, to adhere to gets, the matter is really academic. As Lord either party. The Court held that, unless Dundas said in M‘Donald, “ the Act appears to the prisoner makes an admission, it was always have provided against cases of undue hardship. a question of fact for the jury to say whether In the first place, I apprehend that the charge

y

a

run

a

to prove

of being a habitual criminal does not come into principal sum awarded the arbiter allowed operation .. unless the judge is prepared interest thereon at the rate of 5 per cent. to impose a sentence of penal servitude in per annum from the 4th day of November respect of the substant ne libelled and 1918 until payment.” This interest was the (ex hypothesi) proved against the accused. subject of the assessment. If the judge is not so prepared, the ‘habitual The objections to the assessment as argued criminal' charge is not proceeded with. In before the Commissioners were (a) that interest the second place, even if that charge is brought on a sum due under a decree of Court or of an before the jury, and they find it to be estab- arbiter was not taxable as income; (b) that lished, it is left . . . . to the discretion of the the sum awarded was damages and the interest judge to decide whether or not, as matter of awarded was part of the damages and not expediency, he should pass any sentence of taxable as income; (c) that the assessment, if preventive detention.” Cases occur in practice competent, should have been made on the in this country where accused, admitted or assignees under an assignation in security, proved to be “habitual criminals,” are sent to who, in respect that the amount awarded was imprisonment only. It is noteworthy too that less than their debt, collected the whole amount, in England, in the case of Stanley, now over- principal and interest, under the arbiter's

, ruled as taking too draconian a view of the decision. statute, the prisoner, although unsuccessful

The Special Commissioners gave no decision on the technical point, had his sentence of on (a) and (6), and decided (c) in favour of the three years' penal servitude reduced to one, of judicial factor. twelve months' imprisonment. The sentence When the case came originally before the of five years' preventive detention was thus First Division it was remitted back to the automaticallyquashed. It is inconceivable that Commissioners to give a finding in fact on in a case such as that figured by the Lord whether the sum contained in the award was Chief Justice, where

man has been a damages or not. The Special Commissioners teetotaller in crime for many years, the later reported that “the amount awarded by Court would not take the most lenient view of the arbiter was awarded mainly for damages his case; and it would not be at all hurtful which we fix at three-quarters of the total to him that he is unable in

person

his

sum awarded. We consider that the balance own virtues to the jury. But as an exercise was for extra costs under the contract.” in the logical interpretation of double negatives, The questions of law submitted for decision the leading English case is probably a more in the ultimate report of Special Commissioners striking effort than its Scots equivalent.

were (a) whether the interest awarded by the arbiter is taxable as interest; and (b) whether,

if so, it is taxable in the hands of the respondent. INCOME TAX ON CASUAL INTEREST. regard to the second question of law.

No decision was given by the Division in A case which seems to have escaped the

The cases referred to by the parties in connecnotice of the reporters was decided by the tion with the first question of law will be found First Division on 26th January last, and in quoted in the article in the “Scots Law Times” view of the article on the above subject which previously referred to. In addition, the case appeared in our issue of 28th April 1923 it will of Michelham, [1921] 1 Ch. 705 was quoted in be of interest to the profession to take note support of the contention by the Revenue of it in these columns.

that the interest under a decree was taxable The case came before the Court on an appeal as interest under Case III., Schedule D of the by the Inland Revenue against a decision of the 1918 Act. Special Commissioners cancelling an assessment The Lord President in his opinion stated : under Schedule D which had been made on “We learn from the Commissioners' Report Robert Henry Ballantine, C.A., Glasgow, as that the award consisted mainly of damages. judicial factor on the estate of the late It is plain from that Report that any exact Robert Forrest.

discrimination between damages and what The assessment was on a sum of £678 of migh have been treated as contract extras interest awarded by an arbiter along with a is impossible ; but the Commissioners say that principal sum found due as additional costs, if a discrimination were to be attempted loss and damage” incurred by the original three-fourths of the whole might be definitely claimants in the arbitration who, at the date fixed as damages. I think it may be safely of the award, were represented by the judicial taken that the award was not an adjustment factor.

of a contract debt at contract rates, but was The award was pronounced by the arbiter on substantially an assessment of compensation 14th January 1921, and in addition to the I to the contractors for their outlays and losses

under the particular circumstances in which that there is at least one recorded opinion these outlays and losses were incurred. It is im- adverse to the chargeability of such interest. possible, of course, to know precisely the reasons In Lee's Trustee v. Inland Revenue (1916 S.C. which influenced the arbiter in taking the plan 188) Lord Johnston, speaking I think of ordinary of fixing three capital sums in the first instance judicial decrees, thought that the assessa bility as at the date of the lodging of the amended of such interest to income tax under Case III. claim, and then adding interest on those sums of Schedule D depended on the character of from that date until payment. It is enough the debt or obligation in respect of which the that that was the mode he thought fair for the decree was pronounced, and that, if the decree purpose of assessing compensation to the was substantially one of damages, the interest contractors in the circumstances of the case ordered to run on it was just part of the before him.

damages, and not, therefore, chargeable to Now it is familiar that an assessment of income tax. the kind may contain as one of its constituent The questions put in the case are superseded elements an allowance in respect that the by those appended to the Commissioners' claimant has lain for a long time out of his Report : and the result is that question (a) falls remedy. The propriety of such an allowance —if the above opinion is sound=to be answered may depend on the character of the claim, and in the negative. That answer makes it units amount may depend on many considerations necessary to say anything with regard to of which time is only one. But an interest question (6).” calculation is a natural and legitimate guide The importance of the case lies on the fact to be used by an arbiter in arriving at what he that a sum of money though in nomine thinks would be a fair amount. In most cases

'interest is not necessarily taxable under in which such an allowance is a constituent of the Act, and interest awarded along with a an award it does not separately appear, but is sum of damages may be regarded generally as slumped along with other elements in the one of the exceptions. gross sum decerned for: but there is nothing to prevent an arbiter, if he thinks it just and FACULTY OF ADVOCATES.-Mr Robert Macreasonable in a particular case, to make the innes, M.A. (Edinburgh); Mr James Wellwood allowance in the form of an actual interest Johnston, B.A. (Oxford); Mr Andrew Lockhart calculation from a past date until the sum Innes, B.A. (Oxford), LL.B. (Edinburgh); fixed as at that date is paid. In all such Mr Archibald Moir Macrae Williamson, M.A., cases, however, whether the allowance is LL.B. (Aberdeen); and Mr John Harold wrapped up in a slump award or is separately Dickson, M.A., LL.B. (Glasgow), have been stated in the decree—the interest calculation admitted to the Faculty of Advocates. is used in modum æstimationis only. The interest is such merely in name, for it truly The death is announced of Mr Thomas Reid, constitutes that part of the compensation writer, 160 Hope Street, Glasgow, who was for decerned for which is attributable to the fact a number of years one of the Shawland that the claimant has been kept out of his representatives on the Parish Council of Eastdue for a long period of time. It is not, there wood. A keen Liberal in politics, Mr Reid

fore, interest of money' chargeable under was an active worker for his party in the old Case III. of Schedule D.

Parliamentary Division of East Renfrewshire “ It is possible that a different question and in the new division of Pollok. Mr Reid might have been presented if the arbiter had served for many years on the former Langside made a slump award assessing compensation Ward Committee, and on the redivision of to the claimants for their additional costs, wards he became a member of Pollokshaws loss and damage' as at its own date, and Ward Committee. providing that the claimants should be entitled to interest on the amount so awarded from WE regret to record the death of Mr F. B. that date until payment.

The form of the Richardson, who for many years carried on award in the present case seems to me to make business as a writer at 65 Bath Street, Glasgow. it impossible to distinguish the character of He was educated at Ayr Academy and Glasgow the so-called interest (a) between the 4th of University, where he took the degrees of M.A. November 1918 and the date of the award, and LL.B. In his younger days he was one of from its character (6) between the date of the the leading criminal lawyers in Glasgow. Unaward and the date of payment. We heard fortunately he suffered a breakdown in health no argument specially directed to the case of which continued to be indifferent for the rest of interest ordered to run on a slump award of his life and prevented his attaining that eminence compensation or damages, and I express no in his profession which his early achievements opinion upon it. It may be observed, however, I promised. Mr Richardson was unmarried.