Facts

To raise working capital, United Gold Coast Mining Properties Ltd offered shares at par value to Mr Hilder and others with an option to take further shares at par for two years. After the share price rose, Mr Hilder wished to exercise his option.

Judgment

Earl of Halsbury LC held that Hilder was entitled to exercise the option, as it in no way directly or indirectly contravened the rule against issuing shares at a discount under CA 1900 section 8(2) (now CA 2006 section 580).