Nisbet v Shepherd
| Jurisdiction | England & Wales |
| Judgment Date | 28 June 1993 |
| Date | 28 June 1993 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Balcombe, Lord Justice Leggatt and Lord Justice Hoffmann
Company - shares - defective stock transfer
The omission from an instrument, purporting to transfer legal title to shares in a company, of the amount of consideration given for the tranfer was a mere irregularity and did not prevent it being a proper instrument of transfer for the purposes of section 75 of the Companies Act 1948, now section 183 of the Companies Act 1985. The registration of the transfer by the company on receipt of such an instrument was therefore lawful and effective to transfer legal title to the shares.
The Court of Appeal so held, dismissing an appeal by the sole member of Keith Moulton & Co Ltd, Mr Kenneth Eric Shepherd, from an order of Judge Maddocks who, sitting as an High Court judge in Leeds on March 9, 1992, had granted the company's liquidator, Mr David Nisbet, inter alia, a declaration that Mr Shepherd was personally liable jointly and severally with the company for payment of each and all unsatisfied debts of the company contracted after October 22, 1983, pursuant to section 24 of the 1985 Act, and an order that all accounts and enquiries necessary to ascertain each and all unsatisfied debts be taken and carried out forthwith.
Mr Aubrey Craig for Mr Shepherd; Mr James H Allen for Mr Nisbet.
LORD JUSTICE LEGGATT said that the case afforded a useful reminder to small traders that, by virtue of section 24 of the 1985 Act, they would not succeed in limiting their liability by establishing a company if they failed to ensure that no more than six months went by without the company having at least one other member.
Until April 22, 1983 the company had had two members with equal shareholdings. On that date the other member had sold his shares to Mr Shepherd for £20,000 and purported to execute a stock transfer. However, the instrument was defective in that it was undated, did not state the consideration given, as required by section 5 of the Stamp Act 1891, omitted the addresses of the transferor and the transferee, was not signed by the transferee and was not stamped. The company had subsequently registered the transfer.
It was conceded that if the failure to state the consideration did not render the transfer a nullity none of the other defects would. However, it had been contended that, since section 75 of the 1948 Act provided that it was not lawful for a company to register a...
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Edward Gerard Kelly v William Kelly
...the failure to stamp does not invalidate the document, as stamping is simply a Revenue requirement. This authority is Nisbet v Shepherd [1994] 1 BCLC 300 where (at page 305) Leggett L.J. indicated that the corresponding phrase in the United Kingdom analogue of s. 81 does not mean that the i......
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Re Brown Root McDermott Fabricators Ltd and Another's Application
... ... Maynard v Consolidated Kent Collieries Corp Ltd ELR [1903] 2 KB 121 ... Nisbet v Shepherd ELR [1892] 2 QB 507 ... R v Fulham, Hammersmith & Kensington Rent Tribunal, ex parte Zerek ELR [1951] 2 KB 1 ... Saunders v Edwards ... ...
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Sueda Yusuf v Tanju Yusuf
...if he was a director) must be taken to have approved the document, and that Palmer's Company Law at 6.431 and Nisbet v Shepherd [1994] 1 BCLC 300 (CA) supported the argument that, taking account of the lapse of time, Sueda as the transferor cannot now complain about irregularities in the do......
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Park Magic Mobile Solutions Ltd v Companies Act
...& Anor [2010] IEHC 38, Laffoy J. quoted with approval the decision of the Court of Appeal of England and Wales in Nisbet v. Shepherd [1994] 1 BCLC 300, to the effect that a stock transfer form which omitted to state the consideration for the transaction was capable of being validly register......