Forfeiture of shares is voidable, not void, and rectification may be denied for delay, prejudice and reallotment.

A short defect in the notice fixing time for payment before forfeiture of shares does not render the forfeiture a nullity; it is voidable at the shareholder's instance. A claim for rectification of the register is governed by the residuary limitation period and may be in time, but equitable relief can still be refused where the shareholder's delay, acquiescence and conduct have prejudiced the company after reallotment and capital reduction. Rectification is also inappropriate where the forfeited shares have been reallotted, the transferees are not before the court, and the specific shares are no longer available; the proper remedy, if any, lies in damages or value.

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Issues: (i) Whether the forfeiture of shares was void or merely voidable when the notice fixing the time for payment was short by one day; (ii) whether the claim for rectification of the register was barred by limitation or defeated by delay, waiver, acquiescence or prejudice; (iii) whether rectification could be ordered when the shares had been reallotted and the transferees were not parties.

Issue (i): Whether the forfeiture of shares was void or merely voidable when the notice fixing the time for payment was short by one day.

Analysis: The power to forfeit shares arises on a valid call and default in payment. The notice required by the articles is part of the procedure for exercising that power, not part of the source of the power itself. A defect in that notice does not make the forfeiture a nullity; it makes the forfeiture irregular and therefore voidable at the instance of the shareholder.

Conclusion: The forfeiture was not void; it was voidable.

Issue (ii): Whether the claim for rectification of the register was barred by limitation or defeated by delay, waiver, acquiescence or prejudice.

Analysis: An application for rectification of the register does not fall within the specific articles relied on for recovery of specific movable property and is governed by the residuary limitation period. On the facts, the application was within time. However, the conduct of the shareholders, who stood by, treated the forfeiture as valid, delayed revival of the company, and caused prejudice to the company after reallotment and reduction of capital, disentitled the applicant to equitable relief. The corporate form could not be used to avoid the effect of that conduct.

Conclusion: The claim was not barred by limitation, but relief was refused on the ground of delay and prejudice.

Issue (iii): Whether rectification could be ordered when the shares had been reallotted and the transferees were not parties.

Analysis: The shares were no longer available in specie, and the court could not substitute unissued shares for the very shares that had been forfeited and reallotted. Rectification affecting the rights of transferees could not properly be made in their absence. The remedy, if any, lay in damages or value, not in an order directing rectification in respect of specific shares.

Conclusion: Rectification was not possible in the circumstances.

Final Conclusion: The appeal against the order for rectification succeeded, while the connected appeal challenging the validity of the forfeiture failed.

Ratio Decidendi: A defect in the notice required for forfeiture of shares makes the forfeiture voidable, not void, and equitable rectification of the register will be refused where the applicant's delay and conduct have prejudiced the company or where the specific shares are no longer available and affected transferees are not before the court.

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