Elders Forestry Ltd v BOSI Security Services Ltd

Elders Forestry Ltd initiated proceedings against BOSI Security Services Ltd, as well as others, regarding their shares in a joint venture company. Elders Forestry and the fourth defendant each owned half of the shares of the fifth defendant. The dispute arose from the rights and obligations under a shareholders' deed that regulated the relationship between Elders Forestry and the fourth defendant in their joint venture. The central issue was whether Elders Forestry could enforce its equitable interest in the shares against BOSI Security Services, which held a charge and an equitable mortgage over the shares.

The court had to determine if BOSI Security Services, as the holder of a charge and an equitable mortgage, was bound by the terms of the shareholders' deed as amended, and the company's constitution. It was also necessary to ascertain whether BOSI Security Services had any greater interest in the shares than the fourth defendant, and if the grant of the charge and equitable mortgage by the fourth defendant constituted a default event under the shareholders' deed. The court examined whether Elders Forestry's equitable interest in the shares could be enforced against BOSI Security Services, and if Elders Forestry was entitled to the shares upon the transfer.

The court held that BOSI Security Services, as the mortgagee, was bound by the shareholders' deed as amended and the company's constitution. BOSI Security Services did not have a greater interest in the shares than the fourth defendant, and the grant of the charge and equitable mortgage constituted a default event under the shareholders' deed. Consequently, Elders Forestry's equitable interest in the shares was enforceable against BOSI Security Services, and Elders Forestry was entitled to the shares upon transfer. The court ordered the fourth defendant to transfer the shares to Elders Forestry and the fifth defendant to register that transfer, with BOSI Security Services having no further interest in or right over the shares upon the transfer.