Comodo Holdings Limited v Renaissance Ventures & Anor
03 May 2015
The Defendants had both purchased shares in the Claimant and had been issued with share certificates. Many years after the issue of the certificates and following the death of the individual Defendant (who also controlled the corporate Defendant) the Claimant asserted that the shares had not been properly issued and that payment had not been made for them, alternatively, such payment as had been made was with moneys received by the Defendants from individuals wishing to invest directly in the Claimant in their own names. There were wide ranging allegations of fraud and dishonesty on the part of the deceased shareholder.
On an application by the Defendants the judge granted summary judgment for the rectification of the share register. This was set side by the Court of Appeal mainly on the basis that the judge had (of his own volition) speculated about what may or may not have been agreed between the individual Defendant and the other co-venturers in the Claimant about sweat equity.
View High Court judgment here
View Court of Appeal judgment here
This is a good example of how an over enthusiastic judge can sink a case! There was no need for the judge to speculate on the sources of payment at all. The Defendants had established allotment of the shares followed by the issue of the share certificates. The speculation as to how the parties may have agreed that the shares should be paid for was a hostage to fortune that came home to roost in the Court of Appeal.