Douglas Cochran successful in High Court application appearing for liquidators whose appointment was challenged

On 13 October 2023, HHJ Hodge KC handed down judgment in Bland & Anor v JDK Construction Ltd & Anor [2023] EWHC 2805 (Ch)

The case saw the Respondent challenge the appointment of the Applicant liquidators, alleging that that her shares in the subject company had been the subject of an allegedly-fraudulent transfer.  According to the Respondent, the resolution putting the Company into liquidation had taken place at a time when the Respondent ought to have been listed as a shareholder on the Company’s register of members.  As such, she was deprived of her opportunity to vote on the resolution to place the Company in liquidation.

The Applicant liquidators contended that, even if the Respondent was correct to allege a fraudulent transfer of her shareholding, she was not a member of the Company at the time at which the resolution was passed.

Giving judgment, HHJ Hodge KC held that a Company’s register is determinative as to the Company’s membership, and that the Liquidators’ appointment was therefore valid in any event:

49. Notwithstanding the provisions of section 127 of the Companies Act 2006, it does seem to me that the register is conclusive as to those who were members of the company at the time of the special resolution. Section 112(2) is, in my judgment, clear that every person whose name is entered in the company’s register of members is a member of the company. That is reinforced by the power under section 125 that is conferred upon the court to rectify the register.
50. When one looks at the scheme of the Companies Act 2006 as a whole, it seems to me that the register is conclusive as to those who are members of the company at any particular point in time. On that basis, even if the register of members were liable to be rectified, following a decision that the share transfer form was a forgery and of no effect, since Jeanette’s name was not on the register at the time of the passing of the special resolution to wind-up the company, it seems to me that the company was validly placed into voluntary winding-up.

Douglas Cochran acted for the Applicant liquidators.

Link to judgment:

https://www.bailii.org/ew/cases/EWHC/Ch/2023/2805.html