Re Razzaq Holdings Ltd.

Re Razzaq Holdings Ltd.

Section 206 of the Company Act authorizes the court to rectify the 1992 share transfer and share certificate issuances because the transactions contained errors that did not reflect the parties' common intention, no third party acquired rights for valuable consideration that would be prejudiced by rectification, and the orders are in the best interests of the company, its members and creditors; alternatively, equitable rectification also supports the same relief.

Citation
2000 BCSC 1829
Parties
Company/petitioner: Razzaq Holdings Ltd.; Petitioner/shareholder: Amirali Ahamed; Petitioner/shareholder: Azizdin Ahamed; Petitioner/holding Company: 420671 B.C. Ltd.; Petitioner/holding Company: 420670 B.C. Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
22 December 2000
Procedural Posture
Petition Under Company Act / Decision on Petition (reasons for Judgment, in Chambers)
Outcome
Petition granted.
Legal Topics
Rectification of Share Transfers, Validation Under S.206 Company Act, Allotment and Pre Emption Rights, Breach of Statutory Procedures, Equitable Rectification, Effect on Creditors and Third Parties, Tax Rollover (s.85 Income Tax Act)
Source Language
English
Corporate Law Equity Tax Law Civil Procedure Rectification of Share Transfers Validation Under S.206 Company Act Allotment and Pre Emption Rights Breach of Statutory Procedures +3 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 5 Authorities cited 12 Party arguments 1 Amounts and remedies 2
Sign in to unlock

Parties

Razzaq Holdings Ltd.

Company/petitioner

Amirali Ahamed

Petitioner/shareholder

Azizdin Ahamed

Petitioner/shareholder

420671 B.C. Ltd.

Petitioner/holding Company

420670 B.C. Ltd.

Petitioner/holding Company

Procedural Posture

Petition Under Company Act / Decision on Petition (reasons for Judgment, in Chambers)

Legal Issues

  1. 1 Whether s.206 of the Company Act authorizes retrospective rectification of erroneous share transfers and share certificate issuances
  2. 2 Whether the 1992 transfer/issuance breaches ss.41 and 43 of the Company Act and whether those breaches can be remedied
  3. 3 Whether any third party has acquired rights for valuable consideration such that rectification would be barred under s.206(2)

Ratio Decidendi

Section 206 of the Company Act authorizes the court to rectify the 1992 share transfer and share certificate issuances because the transactions contained errors that did not reflect the parties' common intention, no third party acquired rights for valuable consideration that would be prejudiced by rectification, and the orders are in the best interests of the company, its members and creditors; alternatively, equitable rectification also supports the same relief.

Court Disposition

Petition granted.

Orders

  • The February 24, 1992 Instruments of Transfer are rectified and amended with effect from and after February 24, 1992 to reflect that 420670 B.C. Ltd. and 420671 B.C. Ltd. each received 100 Class A shares and 1,625 Class C shares as originally intended.
  • The issuance by Razzaq of Share Certificate numbers 9A and 10A representing 100 Class A shares each and of Share Certificate numbers 11B and 12B representing 100 Class B shares is reversed with effect from and after February 24, 1992.