Re Northern Telecom Limited

The case of *Re Northern Telecom Limited* concerned an application by Northern Telecom Limited (the applicant) for an order under section 261 of the *Companies (New South Wales) Act 1961* (NSW) (the Act) to rectify the register of members of the company. The applicant sought to have its name removed from the register as a shareholder, alleging that it had never agreed to become a member of the company. The application was heard by Forno J in the Supreme Court of New South Wales.

The central legal issue before the Court was whether Northern Telecom Limited had become a member of the company by conduct, notwithstanding the absence of a formal share transfer agreement or registration in the company's register of members. Specifically, the Court had to determine if the actions of the applicant constituted an acceptance of membership, thereby binding it to the company's obligations.

Forno J reasoned that for a person to become a member of a company, there must be an agreement, express or implied, to become a member. In this instance, the Court found no evidence of such an agreement on the part of Northern Telecom Limited. The applicant's conduct, such as receiving notices and attending meetings, was not sufficient to establish an implied agreement to become a member, particularly when there was no formal transfer of shares or any indication that the applicant had agreed to take shares. The Court applied the principle that mere receipt of benefits or passive acquiescence does not automatically equate to membership.

The Court ordered that the register of members of the company be rectified by removing the name of Northern Telecom Limited.