Beck v Tuckey [2007] NSWSC 1065

Beck v Tuckey [2007] NSWSC 1065

Because the transfer was to the daughter of an existing shareholder, the Article 28 pre-emption provisions did not apply. The board did not affirmatively exercise its Article 31 discretion to decline registration, since the directors were evenly divided and no resolution was passed. Although the transfer had formal defects when proceedings commenced, those defects did not prevent the transfer from vesting an equitable interest in Alexi Beck and were capable of being, and were, remedied before judgment. The first plaintiff therefore had an entitlement to registration, initially conditional on curing formal defects, and the register should be corrected under s 175 to record her as holder of...

Jurisdiction
Australia
Judgment Date
03 August 2007
Procedural Posture
Application Under (cth) Corporations Act 2001 S 175, Alternatively S 1071 F, for Correction of the Register of Members and Registration of a Share Transfer / Ex Tempore Judgment After Hearing
Outcome
Application allowed; register ordered to be corrected and second defendant ordered to pay the plaintiffs' costs on the indemnity basis, with operation stayed until 14 August 2007.
Legal Topics
['register Correction' 'transfer of Shares' "directors' Discretion to Decline Registration" 'proprietary Company Pre Emption Provisions' 'formal Defects in Share Transfer Instruments' 'indemnity Costs']
['corporations' 'equity' 'costs'] ['register Correction' 'transfer of Shares' "directors' Discretion to Decline Registration" 'proprietary Company Pre Emption Provisions' 'formal Defects in Share Transfer Instruments' 'indemnity Costs']

Case Brief

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Procedural Posture

Application Under (cth) Corporations Act 2001 S 175, Alternatively S 1071 F, for Correction of the Register of Members and Registration of a Share Transfer / Ex Tempore Judgment After Hearing

Legal Issues

  1. 1 ['Whether the first plaintiff was entitled to be registered as holder of one share in the first defendant where the directors were equally divided and did not affirmatively decline registration' 'Whether non-compliance with Article 30 concerning lodgment at the registered office and production of the share certificate precluded relief' 'Whether absence of the prescribed jurisdiction detail meant there was no proper instrument of transfer under Corporations Act 2001 s 1071B and precluded relief' 'Whether the matter should be returned to the board after formal defects were remedied' 'Whether indemnity costs should be ordered because formal defects were raised only at the hearing']

Ratio Decidendi

Because the transfer was to the daughter of an existing shareholder, the Article 28 pre-emption provisions did not apply. The board did not affirmatively exercise its Article 31 discretion to decline registration, since the directors were evenly divided and no resolution was passed. Although the transfer had formal defects when proceedings commenced, those defects did not prevent the transfer from vesting an equitable interest in Alexi Beck and were capable of being, and were, remedied before judgment. The first plaintiff therefore had an entitlement to registration, initially conditional on curing formal defects, and the register should be corrected under s 175 to record her as holder of...

Court Disposition

Application allowed; register ordered to be corrected and second defendant ordered to pay the plaintiffs' costs on the indemnity basis, with operation stayed until 14 August 2007.

Orders

  • ['The register of members of the first defendant be corrected to record the first plaintiff as the holder of one ordinary share in the first defendant.' "The second defendant pay the plaintiffs' costs of these proceedings." "The plaintiffs' costs be assessed on the indemnity basis." 'The operation of the foregoing...