CORPORATIONS — shares — transfer — application by Plaintiff for orders compelling First Defendant to register transfer of shares — where shares formed part of a parcel of shares in First Defendant owned by a third party — where third party granted Second Defendant a fixed charge over all of the shares — where third party subsequently pledged around 30% of the shares as security for borrower’s obligations under a loan agreement with Plaintiff — where Plaintiff, following default under loan agreement, completed transfer form in respect of shares and lodged transfer with First Defendant for registration — where First Defendant refused to register transfer due to Second Defendant’s competing claim in respect of shares — whether First Defendant’s refusal was without just cause
Quick Take
1A company has 'just cause' under s 1071F(2) of the Corporations Act to refuse to register a share transfer where the registered owner of the shares has instructed the company not to register the transfer due to a genuine and ongoing dispute about competing security interests, even without the company itself resolving the priority question.
2An applicant for rectification of a share register under s 175 of the Corporations Act must establish a personal equity the court will protect; where the applicant's entitlement depends on the resolution of a priority dispute between competing security interests, that dispute must be determined — and all necessary parties joined — before rectification can be ordered.
3The onus under s 1071F rests on the applicant to demonstrate an absence of 'just cause' for the refusal to register; a company need not resolve competing claims to the shares correctly, but only have a reasonable and legitimate basis for declining to register while the dispute remains unresolved.
