Venture Platinum Pty Ltd v Rogue Constructions Pty Ltd

REASONS FOR JUDGMENT 1 The applicants have commenced a proceeding seeking relief under s 1071F of the Corporations Act 2001 (Cth) ('the Act'). Section 1071F(1) provides that if a relevant authority in relation to a company refuses or fails to register or refuses or fails to give its consent or approval of the registration of a transfer of securities of the company, the transferee may apply to the Court for an order under s 1071F. Section 1071F(2) provides that, if the Court is satisfied on such an application that the refusal or failure is without just cause, the Court may order that the transfer be registered or make such other order as it thinks just and reasonable. The term relevant authority is defined in s 1071F(3) as meaning a person who has authority to register a transfer of securities of the company. 2 The material before the Court indicates that an agreement was entered into between the applicants and certain individuals whereby the applicants were to make a loan to the individuals. As security for that loan the individuals were to transfer shares in the respondent to the applicants. The precise nature of the loan is unclear because there is no stamped loan agreement. A copy has been tendered but has not been admitted by reason of the operation of s 304 of the Duties Act 1997 (NSW) ('the Stamp Duties Act'). Section 304(1) of the Duties Act provides that an instrument that effects a dutiable transaction or is chargeable with duty under the Stamp Duties Act is not available for use in law or equity for any purpose and may not be presented in evidence in a court exercising civil jurisdiction unless it is duly stamped or it is stamped by the Chief Commissioner in a manner approved by the Chief Commissioner. 3 However, under s 304(2) of the Stamp Duties Act a court may admit in evidence an instrument that effects a dutiable transaction or is chargeable with duty in accordance with the provisions of the Stamp Duties Act and does not comply with s 304(1): (a) if the instrument after its admission is transmitted to the Chief Commissioner in accordance with arrangements approved by the Court; or (b) if the name and address of the person liable to pay the duty is forwarded together with the instrument to the Chief Commissioner in accordance with arrangements approved by the Court.

Assuming, without deciding, that s 304 of the Duties Act would bind this Court as to the admissibility of the agreements, I have dealt with the matter without admitting the copy of the loan agreement that was tendered since it is apparent that the proceeding cannot succeed. 4 The evidence indicates that on 27 January 2006 the applicants' solicitors wrote to the respondent referring to the loan agreement and saying that the loan was in default and that the applicants wished to enforce their rights to transfer shares in the respondent. The letter enclosed a copy of the loan agreement and a copy of transfers purportedly signed by shareholders together with an Australian Securities and Investments Commission Form 484. Form 484 is particulars of change to company details. The form 484 had been completed to record the transfer of the shares to the applicants. However, the transfers were not signed by the transferee, namely, the applicants; nor were the transfers accompanied by a share certificate in relation to the shares. 5 It is common ground, as I understand it, that the constitution of the respondent requires that a transfer be signed by the transferee, so that the transferee accepts the terms of the constitution as binding upon it, and that a transfer be accompanied by the share certificate in respect of the shares transferred. 6 On 6 February 2006, the applicants' solicitors, by facsimile, wrote again to the respondent saying that they had received no approach 'to settle this matter'. The facsimile went on to say: 'We immediately require the executed share transfers referred to in our letter and would be pleased if you could arrange for them to be forwarded to our office today.' 7 That facsimile seems to have been sent under a misapprehension because the executed transfers do not appear to have been sent to the respondent. The applicants' solicitors wrote again to the respondent on 7 February 2006 referring to the earlier letters and saying that they had not received an executed Form 484. A draft of the originating process now before the Court was enclosed with the letter of 7 February 2006. 8 On 14 February 2006 this proceeding was commenced. 10 March 2006 was the first return of the originating process, when the matter was referred to me by a Deputy Registrar. Counsel for the applicants accepted that he could not succeed on the proceeding, having regard to the operation of s 304 of the Stamp Duties Act and the fact that the transfers have not been stamped. He therefore sought an adjournment of the proceeding to enable compliance by the applicants with the necessary prerequisites that would enable them to have their transfers registered. 9 However, there is also before the Court a letter from the respondent's solicitors to the applicants' solicitors referring to a telephone conversation between members of the two firms. The letter relevantly says: 'We note we indicated firstly to Mr Hindes during the course of the conversation that our client had no objection to registering a valid transfer of shares to your client. However, we note that the letter of 27 January 2006 and accompanying documents submitted by you to our client are defective and do not comply not only with the requirements of the company's constitution but also with the law of New South Wales generally.' 10 The letter then referred to the fact that the loan agreement had not been stamped, the share transfers had not been stamped, the share transfers had not been executed by the transferee and the share transfers were not accompanied by the share certificate. The letter also pointed out that the Form 484 was incomplete. The letter went on to say that the respondent would have no difficulty in completing and registering the documents so long as those matters were attended to. 11 It is perhaps a pity that there was no response from the respondent to the applicants indicating why the transfers were not registered. On the other hand, I consider the commencement of the proceeding to have been precipitate, particularly in circumstances where it ought to have been obvious that the transfers could not be registered in the form in which they had been sent on 27 January 2006. 12 In the light of the circumstances outlined above, I could not be satisfied that the refusal or failure on the part of the respondent to register the transfers was without just cause. There were several just causes for its refusing or failing to register the transfers as indicated above. Therefore, the proceeding cannot succeed and it must be dismissed with costs. 13 The only question concerns the measure of the costs. As I have said it is a pity that the respondent did not respond earlier. However, I consider that the proceedings should not have been commenced. I consider that it is appropriate that the applicants be ordered to pay all costs reasonably incurred by the respondent in relation to the proceeding. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

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