The High Court has declared Terry Madigan beneficially entitled to 50% of the ordinary shares in Monard (Research and Development) Ltd and directed Harry Rea to register the share transfer. It also declared that Madigan remains a director of the company.
The ruling, delivered by Mr Justice Roderick Murphy on 30 July 2010, followed a multi-day hearing of consolidated plenary proceedings and a petition. The dispute centred on whether Madigan was entitled to the second ordinary share in Monard, which owns patents for central heating controls marketed as SystemZone.
Madigan said he paid Rea £6,100 in February 1998 in return for a shareholding, and later paid patent-related costs. He argued that the parties agreed he would hold half the shares and that Rea signed a transfer form. Rea maintained that he owned all of Monard’s ordinary shares. He said Madigan was to hold a share in trust for Rea or his son, and disputed signing the transfer form.
The court accepted Madigan’s evidence about the £6,100 payment and found that Rea had not controverted it. It considered Companies Registration Office returns that, at different times, listed Madigan, Rea’s wife, Carol Long or Rea’s son as holders of the second share. The court noted that the returns were late and contradictory, and that Monard’s share register and other statutory records were missing.
Murphy J found that returns made before the relationship between the parties broke down supported an agreement to transfer the share to Madigan. The court was satisfied that Rea had executed the transfer form and found no evidence that the transfer was in trust for Rea or his son. It also held that, even if the transfer had not been stamped or entered in the share register, Rea was estopped from denying the agreement to transfer.
The court found that a purported 1998 resolution requiring Madigan to retire as a director when Rea’s son turned 18 had not been shown to have taken place. It accepted Madigan’s evidence that he first learned of the claimed removal in March 2004 and concluded that he remained a director.
The court’s final orders declared Madigan beneficially entitled to half the ordinary shares, directed Rea to register the transfer, and declared Madigan continued as a director. The court said it would hear the parties on whether any consequential order was needed in the linked petition; the judgment does not state that further order.