Hall v Courtenay Chiropractic Limited

[2023] NZHC 3514

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2023-485-451

[2023] NZHC 3514

UNDER

the Companies Act 1993

IN THE MATTER OF

an application for rectification of a company share register

BETWEEN

TOBIAS HALL

Plaintiff

AND

COURTENAY CHIROPRACTIC LIMITED

Defendant

On the Papers
Counsel:	J B Gilbert for the Applicant
Judgment:	5 December 2023

JUDGMENT OF GWYN J

[1]                  The applicant, Tobias Hall, has applied for an order to rectify the share register of his company, Courtenay Chiropractic Limited (the Company). By minute dated  22 August 2023, Cooke J granted leave for the proceeding to be commenced by originating application and for the proceedings to be served on Mr Hall’s former partner, Hayley McKenzie.

[2]                  Ms McKenzie was subsequently served and on 19 September 2023 filed a notice of opposition to the application. However, following settlement of parallel Family Court proceedings between Mr Hall and Ms McKenzie, the notice of opposition was withdrawn with no issue as to costs. The withdrawal of the notice of opposition is recorded in the minute of McQueen J, dated 10 November 2023.

HALL v COURTENAY CHIROPRACTIC LTD [2023] NZHC 3514 [5 December 2023]

[3]The applicant has invited the Court to consider the application on the papers.

[4]                  The application is made under s 91 of the Companies Act 1993 which sets out the power of the Court to rectify the share register of a company.

[5]                  Mr Hall has filed an affidavit in support of the application. Mr Hall deposes that the Company was incorporated on 20 July 2015. The documents submitted at incorporation reflected that Audrey Caffrey, Mr Hall’s friend and business associate, held 90 of the 100 shares in the Company and Mr Hall held the other 10.

[6]                  In early 2016, Ms Caffrey resigned from the Company. Mr Hall’s evidence is that he assumed that Ms Caffrey’s shares would automatically transfer to him and, for that reason, there was no formal “transaction” or the signing of any transfer documents. Since that time, he has regarded himself as the sole director and shareholder of the Company.

[7]                  Subsequently, Bernadette Takacs was engaged to do the bookkeeping for the Company. In preparing the Company’s annual return for 2017, she discovered that the Companies Register recorded not only that Ms Caffrey was still a shareholder in the Company but also that she was recorded as holding 90 shares while Mr Hall held 10.

[8]                  Mr Hall instructed Ms Takacs to submit the relevant paperwork to correct the Companies Register.

[9]                  In  the  meantime,  Mr  Hall  had  commenced   a   relationship   with   Hayley McKenzie. When that relationship ended, Ms McKenzie began proceedings in the Family Court alleging that the Company was relationship property. Mr Hall is defending those proceedings.

[10]              In the course of seeking legal advice, Mr Hall was made aware that the Company was obliged under s 87 of the Companies Act to maintain a share register which records, among other things, the names of shareholders and the details of share transfers.

[11]              Mr Hall says the Company has never maintained a share register because, until this point, he was unaware of the obligation to do so.

[12]              On Mr Hall’s instruction, his accountant has created a share register for the Company, which is currently blank. Mr Hall seeks an order for rectification of the Company’s share register to record, first, that 100 shares were issued on the Company’s incorporation in 2015, 90 to Ms Caffrey and 10 to Mr Hall and second, that Ms Caffrey’s 90 shares were transferred to Mr Hall on 28 March 2016.

[13]              Ms Caffrey has filed an affidavit in support of the application confirming that the evidence in Mr Hall’s affidavit is true and correct to the best of her knowledge and belief.

[14]              Ms Caffrey confirms that she does not claim any interest in the Company, whether as a shareholder or otherwise and consents to orders being made in terms of Mr Hall’s application for rectification.

[15]              Ms Takacs has also filed an  affidavit  and  confirms  that  the  evidence  in Mr Hall’s affidavit is true and correct to the best of her knowledge and belief.

Discussion

[16]Section 91 of the Companies Act provides:

91 Power of court to rectify share register

(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.

…

[17]              Having regard to the evidence filed by Mr Hall, Ms Caffrey and Ms Takacs, and in light of the withdrawal of Ms McKenzie’s notice of opposition, I am satisfied that it is appropriate to order rectification of the Company’s share register as sought, and to do so on the papers.

Orders

[18]I grant the following order pursuant to s 91 of the Companies Act 1993:

(a)That the share register of Courtenay Chiropractic Limited be rectified as follows:

(i)That on incorporation of Courtenay Chiropractic Limited on 20 July 2015, 90 shares were issued to Audrey Margaret Caffrey and 10 shares were issued to Tobias Hall.

(ii)On 28 March 2016,  90  shares  were  transferred  from  Audrey Margaret Caffrey to Tobias Hall.

Judge’s Chambers List

[19]              The call of this matter in the Judge’s Chambers List on 11 December 2023 is vacated and appearances excused.

Gwyn J

Solicitors:

Crowley Waugh, Whanganui Morrison Kent, Wellington