Rectification of register in winding-up fails where shareholder assented to transfer and cannot later deny contributory liability.

In winding-up, the register of members was not liable to rectification unless the applicant proved that his entry was fraudulent or made without sufficient cause. The applicant had signed the transfer form, insisted on completion of the transfer, and was entered as shareholder with his knowledge and consent, so a secret nominee arrangement could not displace the legal effect of the register. The Court also held that he could not deny liability as a contributory after assenting to and acting upon the transfer, and treated the register as reliable evidence of that liability. The request for rectification failed, and liability was affirmed for the shares standing in his name.

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Issues: (i) Whether the register of members could be rectified by deleting 200 shares from the applicant's name in winding-up proceedings; (ii) whether the applicant could avoid liability by disputing the validity of the transfer and by denying liability as a contributory.

Issue (i): Whether the register of members could be rectified by deleting 200 shares from the applicant's name in winding-up proceedings.

Analysis: Section 184 of the Companies Act, 1913 empowers the Court, in winding-up, to settle the list of contributories and to rectify the register where rectification is warranted under the Act. Section 38(1) permits rectification where a name has been fraudulently or without sufficient cause entered in the register. The applicant failed to establish that his name had been entered fraudulently or without sufficient cause. The record showed that he had signed the transfer form, insisted on completion of the transfer, and was entered as shareholder with his knowledge and consent. A secret arrangement or nominee relationship, even if assumed, could not displace the legal effect of the register in the absence of a legally effective challenge to the entry.

Conclusion: The request for rectification was not sustainable and was rejected.

Issue (ii): Whether the applicant could avoid liability by disputing the validity of the transfer and by denying liability as a contributory.

Analysis: The transfer was found to have been agreed upon in November 1933 and completed by registration on 14 April 1934. Any irregularity in the directors' circular resolution of 13 April 1934 was not shown to invalidate the transfer, and the applicant had acted throughout as the shareholder. In winding-up, the list of contributories turns on legal liability as reflected in the register, and the applicant was estopped from disowning that position after having insisted upon the transfer and having participated as holder of the shares. The Court treated the register as reliable evidence of liability, absent proof of a legally effective determination to the contrary.

Conclusion: The applicant remained liable as contributory in respect of all 250 shares.

Final Conclusion: The application for rectification failed, and the applicant was held liable as a contributory for the full shareholding standing in his name.

Ratio Decidendi: In winding-up, rectification of the register will not be ordered unless the applicant proves that his entry was fraudulent or without sufficient cause, and a shareholder who has assented to and insisted upon registration is estopped from later denying liability as a contributory.

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