Lord Maugham:-

This is an appeal from an order dated 9th September 1932, of the Full Court of the Supreme Court of New South Wales allowing by a majority (Long Innes and Davidson, JJ. Halse Rogers, J., dissenting) an appeal by the present respondents from an order dated 9th October 1931, of the Chief Judge in Equity of the Supreme Court of New South Wales (Harvey, J.), for the compulsory winding up of the respondents, Brunswick (Australia), Limited, hereinafter called "the Company." The apparently simple question which arises is whether the Company ought or ought not to be wound up compulsorily on the ground that that course is just and equitable within the meaning of S. 84(e), New South Wales Companies Act, 1899 (No. 565 of 1931), or, more accurately, whether such an order was properly made on the petition to be next mentioned. As will be seen the date of the commencement of the winding up (if any) is of primary importance in this case. The proceedings were begun by a petition presented on 8th July 1931, by the appellants, D. Davis and Company, Limited, as holders of 30,000 £1 preference shares and 10,000 ordinary shares in the Company. The petition was opposed by two American trading companies, Brunswick Balke Collender Company (called below "the Brunswick Company"), and Brunswick Radio Corporation (called below "the Radio Corporation"). The former company is the registered holder of 20,000 ordinary shares of the Company and the latter is a creditor of the Company, and, as will be seen, is or may be entitled in equity to the 20,000 ordinary shares just mentioned. The Chief Judge in Equity, on the evidence before him, was satisfied that the Company had no liquid assets and no capital with which to carry on, and that its prospects appeared to be hopeless. He also inferred from certain cables dated in December 1930, that the main object of the American companies was to tide over the two years period of a certain guarantee, and not the bonafide object of carrying on the business of the Company with a view to profit. He accordingly made an order on 9th October 1931 for the compulsory winding up of the Company.

The respondents appealed from that order and the appeals came on for hearing on 12th November 1931. They were adjourned from time to time until 25th November when on the application of the respondents (the appellants before the Full Court) an order was made for a Commission to take further evidence in New York on a defined issue which may shortly be stated as the question whether the persons who controlled the action of the American Companies in opposing the petition were acting with the object of carrying on the business of the Company to advantage or merely for the purpose of rendering the guarantee above referred to inoperative. It should be explained that the petition itself did not contain any allegation of want of good faith in the respondent companies (a matter on which some reliance was placed by the Chief Judge), and it was, therefore, urged that material witnesses in the United States were not asked to make affidavits or called before the Chief Judge in Equity; and this contention was accepted by the Full Court. Sittings of the Commissioner in the United States were held in February and March 1932, the greater part of the time being taken up with the cross-examination of Mr. Herman Starr, President of the Radio Corporation, who was called on behalf of the present respondents. A considerable number of further documents were put in evidence; and it is clear that the materials before the Full Court placed that Court in a position to form a better opinion on the questions of fact involved in the petition than the imperfect materials on which the Chief Judge in Equity had to form his conclusion. After a long and careful hearing the Full Court delivered considered judgments on 9th September 1932, and in the result the petition to wind up was dismissed. In order to appreciate the issues which are involved it is necessary t