Hua Cheng Property Pty Ltd v Xu

In the case of Hua Cheng Property Pty Ltd v Xu, the plaintiff, a proprietary limited company, sought to correct its register of members. The defendant, Mr Xu, had transferred shares to himself, and the company had registered him as a member following the transfer. However, the board had not considered or approved the transfer. The matter was brought before the Supreme Court of New South Wales. The plaintiff argued that the registration of Mr Xu as a member was invalid due to the lack of board approval and sought to have the registration corrected. The defendant contended that he was entitled to have his registration considered by the board and that the registration was valid.

The court was required to determine whether the registration of the transferee as a member was valid despite the lack of board approval and whether the transferee had a right to have the registration considered by the board. The central issue was whether the board's failure to consider the transfer constituted a breach of the company's constitution and, if so, whether this breach rendered the registration invalid. The court also needed to consider whether the transferee had a right to have the board consider the registration and the consequences of any potential invalidity.

The court held that the registration of the transferee as a member was valid despite the lack of board approval. The court found that the company's constitution did not require board approval for the registration of a transferee as a member. Therefore, the board's failure to consider the transfer did not constitute a breach of the constitution. The court also found that the transferee did not have a right to have the board consider the registration. The court held that the transferee's right to have the registration considered by the board was subject to the company's constitution and the general law. In this case, the constitution did not provide for such a right, and the general law did not impose a duty on the board to consider the registration. The court concluded that the registration was valid, and the plaintiff's application to correct the register of members was dismissed.

The court made an order dismissing the plaintiff's application to correct the register of members. The court also made an order that the plaintiff pay the defendant's costs of the application.