Avoidance for fraud requires timely repudiation before winding up; delay can cause waiver and preserve contributory liability.

Application challenged inclusion on the contributories list under the Companies Act for unpaid calls on converted shares; applicant alleged non supply of promised newspapers and fraud in the prospectus. Court found the prospectus showed the newspaper was not free and company supplied journals in 1924-1928, so no contractual condition excused payment. On prospectus fraud, the court applied the principle that contracts induced by fraud are voidable but must be avoided within a reasonable time and before winding up; delay and commencement of winding up led to presumed waiver and intervention of third party rights. Application dismissed and liability for unpaid calls affirmed.

---

---

Issues: Whether the applicant's name should be removed from the list of contributories under Section 183(5) of the Companies Act in respect of unpaid calls on a deferred share (converted into ordinary shares) where the applicant alleges non supply of newspapers and fraud in the prospectus.

Analysis: The Court examined whether the alleged promise of free newspapers and the prospectus' false statements discharged or avoided the applicant's contractual liability for unpaid calls. On the first point, the prospectus provision entitling a subscriber to receive a weekly newspaper subject to deduction of the annual subscription from dividends shows the supply was not free and the Company did supply journals during 1924-1928; thus no contractual condition excused payment. On the second point, while contracts induced by fraud are voidable, the right to avoid must be exercised within a reasonable time and prior to commencement of winding up proceedings; failure to repudiate promptly gives rise to a presumption of waiver and third party rights may intervene. The applicant purchased the share in 1923 but did not seek avoidance until after winding up proceedings were initiated and after his name was placed on the contributories list; therefore the applicant did not validly exercise the right to avoid the contract in time.

Conclusion: The application to remove the applicant's name from the list of contributories is dismissed; the applicant remains liable for the unpaid calls and inclusion in the list of contributories is affirmed.

---