Orlington Company Company Ltd by Guarantee and an Application by Ossory Road Enterprise Park Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Stack
• Judgment Date: 24 January 2023
• Neutral Citation: [2023] IEHC 34
• Year: 2023
• Court: High Court
• Docket Number: Record No. 2022/59 COS

In the Matter of Orlington Company Company Limited by Guarantee

and

In the Matter of an Application by Ossory Road Enterprise Park Limited

Between

Ossory Road Enterprise Park Limited

Applicant

and

Orlington Company, Company Limited by Gaurantee and Declan Rogers and Brid Rogers

Respondents

[2023] IEHC 34

Record No. 2022/59 COS

THE HIGH COURT

JUDGMENT of Ms. Justice Stack delivered on the 24 ^th day of January, 2023

Introduction

1 . This is an application for relief pursuant to ss. 169 and/or 173 of the Companies Act, 2014, (“the 2014 Act”) rectifying the register of members of Orlington Company, Company Limited by Guarantee (“the Management Company”) so as to name the applicant as a member of the Management Company in its register of members and to rectify that register, so as to remove the second and third respondents as members.

2 . The Management Company is the owner of the common areas in Ossory Industrial Estate, Ossory Road, Dublin 3 (“the Estate”), comprising an internal roadway which it acquired by Conveyance made 20 September 1988, between P. C. Rentals Limited of the one part and the Management Company of the third part, subject to a right of way and various wayleaves which were to be enjoyed by the owners of the various Units in the Estate.

3 . The second respondent acquired that part of the Estate comprising Units 1, 5A, 5B, 6, 7, 8, 8A, 9 and 10 (“the Units”) in the mid-1990s. In 2005, he mortgaged those Units to Allied Irish Banks plc (“AIB”), who subsequently sold the second respondent's loan and securities to Everyday Finance Limited (“Everyday”). Everyday attempted to sell the Units at an online auction in April 2021, but the sale to the highest bidder fell through. The applicant, as one of the underbidders, was subsequently approached and entered into a contract to purchase the Units in September 2021. That sale closed in December 2021 on foot of seven deeds of conveyance dated 6 December 2021 (“the 2021 Conveyances”), to which I refer in more detail below.

4 . The fundamental application being made is that, because the applicant has acquired the Units from the mortgagee for the time being, the applicant should take the place of the second respondent in the register of members of the Management Company. The second and third respondents are a married couple and are directors of the Management Company. Neither the Management Company nor the second and third respondents, as directors, have agreed to the registration of the applicant as a member, and the applicant now applies to court to compel such registration and to remove the second and third respondent from the register of members.

5 . Subsequent to that completion of the sale, the applicant had to bring an interlocutory injunction to restrain the second respondent from holding himself out as being the owner of the Units, and from collecting rents from the sub-tenants in occupation of some of those Units. The interlocutory application is subject of a previous judgment given by me in proceedings bearing Record No. 2021/6816P and entitled “ Ossory Road Enterprise Park Ltd, plaintiff, and Declan Rogers, Tom Harty, and Rogers Recycling Ltd, defendants” (“the 2021 Proceedings”), delivered on 7 October, 2022, [2022] IEHC 556, to which it will be convenient to refer in due course.

6 . It is accepted that the Management Company is a company limited by guarantee (“CLG”) for the purposes of the 2014 Act. CLGs are regulated by Part 18 of the 2014 Act, and s. 1173(1) expressly provides that the provisions of Parts 1 to 14 of the 2014 Act apply to a CLG, except to the extent that they are modified by that section or by any other provision of Part 18.

7 . Subsection (3) of s. 1173 provides:

“Any of Parts 1 to 14 that makes provision by reference to—

(a) membership arising by virtue of a shareholding, or

(b) right or incidents of membership, including the right to vote or receive a distribution, arising by virtue of a shareholding,

shall be read, in the case of a CLG, as making such provision in the analogous context in which membership, or rights or incidents of membership, may arise in the case of a CLG.”

8 . Subsection (5) of s. 1173 provides that the provisions of the 2014 Act specified in the Table to that section shall not apply to a CLG and, as Chapter 5 of Part 3 of the 2015 Act, the provisions relating to the transfer of shares and the registration of ownership of shares are (with one exception relating to s. 94 which is not material here) disapplied in relation to CLGs.

9 . The applicant relies on ss. 169 and 173, which are contained in Part 4 of the 2014 Act, which is not excluded from application to CLGs, either by s. 1173 or any other specific provision of Part 18. Indeed, s. 1201, which is contained in Part 18, confirms that s. 169 applies to CLGs in a modified form, as follows:

• “(1) Subject to subsection (5), a company shall keep a register of its members and enter in it the following particulars:

  • (a) the names, addresses of the members …

  • (b) the date at which each person was entered in the register as a member; and

  • (c) the date at which any person ceased to be a member.

• (2) Sections 215 to 217 (rights of inspection, requests for copies, etc.) apply to the register of members.

• (3) The entries required under paragraphs (a) and (b) of subsection (1) shall be made within 28 days after the date of conclusion of the agreement with the company to become a member or, in the case of a subscriber of the constitution, within 28 days after the date of registration of the company.

• (4) The entry required under subsection (1)(c) shall be made—

  • (a) within 28 days after the date when the person concerned ceased to be a member; or

  • (b) if the person ceased to be a member otherwise than as a result of action by the company, within 28 days after the date of production to the company of evidence satisfactory to the company of the occurrence of the event whereby the person ceased to be a member.

• (5) …

• (6) Where a company makes default in complying with any of the requirements of subsection (1) or subsections (3) to (5), the company and any officer of it who is in default shall be guilty of a category 3 offence.”

10 . Section 173 provides:

• “(1) If—

  • (a) the name of any person is, without sufficient cause, entered in the register of members or omitted from it, in contravention of subsections (1) and (3) of section 169, or

  • (b) default is made in entering on the register, within the period fixed by subsection (4) of section 169, the fact of any person's having ceased to be a member,

  the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.

• (2) Where an application is made under this section, the court may either refuse the application or may order rectification of the register and payment by the company of compensation for any loss sustained by any party aggrieved.

• (3) On an application under this section the court may decide any question relating to the title of any person who is a party to the application to have his or her name entered in or omitted from the register (whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand) and generally may decide any question necessary or expedient to be decided for rectification of the register.

• (4) The court when making an order for rectification of the register shall by its order direct, if appropriate, notice of the rectification to be given to the Registrar.

• (5) A company may, without application to the court, at any time rectify any error or omission in the register but such a rectification shall not adversely affect any person unless he or she agrees to the rectification made.

• (6) The company shall, within 21 days after the date on which the rectification under subsection (5) has been made, give notice, in the prescribed form, of the rectification to the Registrar if the error or omission referred to in subsection (5) also occurs in any document forwarded by the company to the Registrar.

• (7) Without prejudice to the generality of subsection (5), a rectification may be effected by the company under that subsection of an error or omission that relates to the amount of the company's issued share capital (whether it consists of an overstatement or understatement of it) and subsection (6) shall apply, in the circumstances there set out, in the event of such a rectification.”

11 . Section 173 replaces s. 122 of the Companies Act, 1963 as amended, which has been held to constitute a discretionary remedy, albeit one which, being exercised on a summary basis, does not permit the resolution of issues of fact: see In Re Park Magic Mobile Solutions Ltd [2017] IEHC 287, per Baker J., and Banfi Ltd v. Moran [2006] IEHC 257, per Laffoy J. However, as is clear from s. 173 (3), the jurisdiction incorporates the determination of any question relating to the title of any person who is a party to the application, to have his or her name entered in or omitted from the register as well as any other question which is necessary or expedient to be decided for rectification of the register. Apart from the limitation that conflicts of fact cannot be resolved, this summary jurisdiction is therefore sufficiently wide to resolve disputes as to the interpretation of documents, such as the Articles of Association and documents of title.

12 . I propose to consider the application in its own terms, that is, by reference to the claimed right of the applicant to be registered as a member, before then dealing with the specific objections raised by the respondents.

Right of applicant to be registered as member

13 . The applicant claims that it is entitled, as of right pursuant to the Articles of Association of the Management Company to be admitted to...