Antoniou v KLS International Finance Limited
[2016] NZHC 191
•17 February 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2014-409-000905 [2016] NZHC 191
BETWEEN NEOKLIS ANTONIOU
First Plaintiff
KLITOS THE FIRST PYLA MONARCH LIMITED
Second Plaintiff
AND
KLS INTERNATIONAL FINANCE LIMITED
Defendant
Hearing: 15 February 2016 Appearances:
RBJ Hern for Plaintiffs
No Appearance for DefendantJudgment:
17 February 2016
JUDGMENT OF GENDALL J
Introduction
[1] This judgment follows a formal proof hearing pursuant to r 15.9 High Court
Rules which took place in this proceeding on 15 February 2016.
[2] Although originally on 18 February 2015 the defendant had filed a statement of defence in this matter, later amended by a further statement of defence filed
28 July 2015, this defence was struck out following the defendant’s failure to comply
with an unless order by minute of Associate Judge Matthews in this Court dated
5 February 2016.
[3] On 15 February 2016, Mr Hern appeared as counsel for the plaintiffs for this formal proof hearing. There was no appearance for the defendant.
ANTONIOU v KLS INTERNATIONAL FINANCE LIMITED [2016] NZHC 191 [17 February 2016]
Factual background
[4] The factual background to this matter is usefully set out in a judgment of Associate Judge Osborne in this Court dated 29 May 2015 in relation to a stay application at the time. I now set out that background outlined in paras[1] – [6] inclusive of that 29 May 2015 judgment:
Introduction
[1] This proceeding concerns a company, the defendant, KLS International Finance Ltd (KLS), which is registered on the New Zealand Companies Register and has its registered office at Christchurch.
[2] The first plaintiff, Mr Antoniou, appeared on the register as KLS’s director until 10 May 2013, when he was removed pursuant to a purported notice of resignation. The second plaintiff, Klitos The First Pyla Monarch Ltd (Klitos), held shares in the defendant, of which 750 were purportedly transferred by a transfer form executed on 10 May 2013 and a further 250 were purportedly transferred by an instrument of transfer dated 10 July 2013.
The plaintiffs’ case
[3] Mr Antoniou and Klitos (together “the plaintiffs”) say that the changes to the share register were made without either of their authority or consent. The evidence now filed goes further by providing the opinions of expert document examiners. Their affidavits lay a foundation for the proposition that documents used in effecting changes to KLS’s register contained forgeries.
[4] The plaintiffs assert that KLS has not maintained accurately the share register it is required to maintain under s 87 of the Companies Act
1993. They seek an order for rectification of the share register pursuant to s
91(1)(a) of the Act. They do not, in this proceeding, seek compensation for any loss sustained.
KLS’s position
[5] KLS has filed a statement of defence containing admissions of a number of allegations but (bare) denials of key allegations made by the plaintiffs. In particular, KLS denies the allegations that the register changes were made without the authority or consent of the plaintiffs and further denies that the share register is inaccurate.
[6] To date KLS has not engaged with the plaintiffs’ evidence, including that as to forgery.
Formal proof application
[5] As I have already noted, this matter proceeded by way of formal proof pursuant to r 15.9 High Court Rules which reads as follows:
15.9 Formal proof for other claims
(1) This rule applies if, or to the extent that, the defendant does not file a statement of defence within the number of working days required by the notice of proceeding, and the plaintiff seeks judgment by default for other than a liquidated demand.
(2) The proceeding must be listed for formal proof and no notice is required to be given to the defendant.
(3) After a proceeding is listed for a formal proof hearing, no statement of defence may be filed without the leave of a Judge granted on the ground that there will or may be a miscarriage of justice if judgment by default is entered, and on such terms as to time or otherwise as the Judge thinks just.
(4) The plaintiff must, before or at the formal proof hearing, file affidavit evidence establishing, to a Judge’s satisfaction, each cause of action relied on and, if damages are sought, providing sufficient information to enable the Judge to calculate and fix the damages.
(5) If the Judge before or at the formal proof hearing considers that any deponent of an affidavit filed under subclause (4) should attend to give additional evidence, the Judge may direct accordingly and adjourn the hearing for that purpose.
[6] In this case this proceeding has been properly listed for formal proof, given that by minute of this Court dated 5 February 2016 the defendant’s defence has been struck out. In addition, the plaintiffs have prior to this hearing filed affidavit evidence which they contend clearly establishes the causes of action relied on here.
The present proceeding
[7] This proceeding arises out of three changes which have been made and
registered at the Companies Office to the defendant’s share register during 2013:
(a) The purported removal of the first plaintiff as a director on 10 May
2013;
(b) The transfer of 250 shares from the second plaintiff to Burmese Bull
Holdings Limited, a company registered in the Republic of Cyprus;
(c) The removal of the second plaintiff as a shareholder in respect of 750 shares on 21 August 2013.
[8] In this proceeding the first and second plaintiffs seek:
(a) An order rectifying the share register pursuant to s 91 of the Companies Act 1993 on the basis that their names were wrongly omitted from the share register as documents in question were forgeries; and
(b) Costs on this proceeding on a category 2B scale basis.
[9] Given that the plaintiffs’ claim relies on s 91 of the Companies Act 1993 it is useful to set out this section in full:
(1) If the name of a person is wrongly entered in, or omitted from, the share register of a company, the person aggrieved, or a shareholder, may apply to the court –
(a) for rectification of the share register; or (b) for compensation for loss sustained; or (c) for both rectification and compensation.
(2) On an application under this section the court may order –
(a) rectification of the register; or
(b) payment of compensation by the company or a director of the company for any loss sustained; or
(c) rectification and payment of compensation.
(3) On an application under this section, the court may decide –
(a) a question relating to the entitlement of a person who is a party to the application to have his or her name entered in, or omitted from, the register; and
(b) a question necessary or expedient to be decided for rectification of the register.
[10] Thus, to satisfy the requirements of s 91 of the Companies Act 1993, the plaintiffs need to establish that their names were wrongly omitted from the share register and that the first plaintiff was wrongly removed as a director.
[11] The Companies Office register of the defendant company shows:
(a) The omission of the name of the first defendant as a director; and
(b) The omission of the name of the second plaintiff as a shareholder.
Decision
[12] In support of their application the plaintiffs rely on the evidence of the plaintiff, Neoklis Antoniou, in his affidavit dated 28 November 2014 and the evidence of Jessica Owen (Ms Owen), a document examiner with the New Zealand Police Head Office in Wellington, in her affidavit dated 8 December 2014 It is said this evidence establishes the wrongful nature of the omissions in question in the following ways:
(a) The plaintiffs’ evidence that the reduction in the second plaintiff ’s shareholding in the defendant company from 1000 shares to 750 shares was made without his authority or consent as the sole director and shareholder of the second plaintiff, and his signature on the documents was in fact forged.
(b)The plaintiff’s evidence that the removal of the second plaintiff’s shareholding on 21 August 2013 was made without his authority or consent as the sole director and shareholder of the second plaintiff, and that again his signature on the document in question was forged.
(c) The plaintiff’s evidence that he has not resigned as a director of the defendant and the purported notice of his resignation was in fact forged.
(d)Ms Owens’ evidence that she examined the documents in question used to support the changes to the share register and the notice of resignation of the plaintiff as a director and she has concluded definitively that the questioned signatures are simulations or copies of Mr Antoniou’s signature, they are not genuine and therefore are in fact forgeries.
[13] In considering the evidence in this matter, I am satisfied from the affidavit of the first plaintiff sworn 28 November 2014 (as he deposes at 3.2 of that affidavit), that each of the documents in question which purport to bear his signature were not signed by him.
[14] Further, and critically here, this conclusion, as I see it, is clearly supported by the evidence of Ms Owen, as a senior document examiner for the New Zealand Police, and as such an expert in handwriting and signatures. In Ms Owen’s affidavit sworn 8 December 2014 at para 3.1 she states:
3.1 On 28 November 2014, I issued a Document Examination Report on the results of my examinations and comparisons of these documents (the documents in question). The report concludes my conclusion that the questioned signatures on all six documents are simulations/copies of Neoklis Antoniou’s genuine signature style.
[15] On all of this, it is clear too that at no point in this proceeding has the defendant filed or served any sworn evidence in response to these affidavits filed on behalf of the plaintiffs. And there is effectively now no extant defence or opposition to the plaintiffs’ present claim.
[16] In terms of r 15.9(4) High Court Rules, I am satisfied on the basis of this affidavit evidence filed on behalf of the plaintiffs, that the plaintiffs’ cause of action seeking rectification of the register of the defendant relied on has been made out, and the orders for rectification should be made.
[17] As an aside, I simply mention by way of background, although it is not relevant to the present proceedings, that, as I understand it, there are concurrent proceedings in Cyprus at present concerning these parties, the defendant company and disputes between them. The case before me, however, clearly does involve a rather limited issue. It is simply a straightforward application by the plaintiffs for rectification of the defendant company’s register.
Result
[18] For all the reasons outlined above, the plaintiffs’ formal proof application
under r 15.9 High Court Rules succeeds. An order is now made rectifying the
Companies Office register of the defendant KLS International Finance Limited as follows:
(a) The first plaintiff, Neoklis Antoniou, whose name has been wrongly omitted as a director of the company, is to be shown as a director.
(b)The second plaintiff, Klitos the First Pyla Monarch Limited, whose shareholding in the company has been omitted, is to be shown as a shareholder holding 1000 shares in the capital of the company.
Costs
[19] As to costs, the plaintiffs having succeeded I see no reason why costs should not follow the event in the usual way. Costs are therefore awarded to the plaintiffs against the defendant on a category 2B scale basis together with disbursements as fixed by the Registrar.
...................................................
Gendall J
Solicitors:
Wynn Williams (Auckland Branch)
Copy to Defendant
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