The High Court has found that Edward Gerard Kelly is a member of Charles Kelly Limited and jointly owns 7,936 shares with his brother William Kelly, following a hearing limited to membership and the extent of Edward Kelly’s shareholding.
The ruling by Miss Justice Laffoy, delivered on 12 February 2010, addressed the first stage of a petition seeking relief under section 205 of the Companies Acts 1963. The court did not determine the substantive oppression claim. It said no order would be made until outstanding stamp duty requirements were met.
The company, a builders’ merchant and retail hardware business in Letterkenny, was incorporated in 1932. When the case began in 2008, it had 50 employees and reported turnover of €10 million for the financial year ending 30 December 2007. The petitioner and first respondent are brothers.
The court said the petition had not disclosed whether Edward Kelly was a company member or how many shares he held. Because section 205 requires an applicant to be a member, the court first considered membership and shareholding. It heard evidence from both brothers over three days in December 2009 and received submissions in December and January.
The court found that the company’s current issued share capital was 7,938 shares, following a 1992 buyback and cancellation of 7,062 shares. It concluded that transfers made after that buyback were intended to give each brother a joint interest in 3,968 shares, with two shares belonging to their mother’s estate. The brothers’ transfers into joint names had taken effect, the judge found, despite evidence from William Kelly that he understood them to be temporary.
The register of members did not properly record the ownership found by the court. The judge said it should be rectified, and noted that the company and William Kelly had issued a separate application seeking rectification. The court proposed an order requiring the company to provide the Registrar of Companies with details of the rectification and a perfected copy of the order within 21 days after it was perfected.
The judgment’s final answers were that Edward Kelly had been a member since 30 April 1992 and owned 7,936 shares jointly with William Kelly. The court also directed that relevant unstamped transfers be assessed by the Revenue Commissioners for duty and penalty. The company was to effect compliance with the statutory stamping requirements; no order would be made until they were satisfied.