The High Court has refused an application by three people seeking to have their shareholdings restored to the register of Park Magic Mobile Solutions Limited, finding that the company had not registered E-Code Innovation Limited as shareholder without cause.
The applicants were Fergal Bradley, Fidelma Russo and Sara Jane Holmes Woodhead, who was substituted for her late husband, David Fitzgerald. They sought a declaration that they remained shareholders and orders to correct the company’s register under section 173 of the Companies Act 2014. They had agreed to sell their shares to E-Code in 2011 for a combined €1.35 million, but the sale consideration was never paid.
The register was amended to show E-Code as owner. The applicants argued that this was an error because the transaction had not completed. The company maintained that the transfers were effective. E-Code was not a party to the proceedings. It had said in a letter that it did not consider itself a shareholder, but the judge said that did not establish whether its registration had been made without sufficient cause.
Ms Justice Baker said the transfer forms had been signed by the applicants and delivered, and that the company’s board had approved the sale. She found the requirements concerning pre-emption rights had been met. The fact that E-Code had not paid the agreed consideration did not, by itself, make its registration wrongful: the applicants had acted in a way that waived payment as a condition to the transfer of legal title.
The judgment said the applicants’ beneficial interest in the shares might not have passed and might remain with them. But the court could not resolve the dispute between the applicants and E-Code in this application, particularly as E-Code was not before it. The judge also said the factual differences could not be resolved on affidavit evidence in a summary process.
The court was not satisfied that the company had registered E-Code without cause and refused the relief sought. It also said it had no power in this application to direct E-Code to transfer shares held on trust back to the applicants. The motion had also sought to invalidate decisions made at an extraordinary general meeting on 15 June 2012, but the judgment records that this order could not be made on the motion.