IN THE MATTER OF WATERSIDE NURSERY LIMITED AND IN THE MATTER OF SCHEDULE 4 TO THE SMALL BUSINESS, ENTERPRISE AND EMPLOYMENT ACT 2015

The court has jurisdiction under Schedule 4 to the Small Business, Enterprise and Employment Act 2015 to entertain a late application for a cancellation order. The three-month period in paragraph 5 is not a jurisdictional bar; lateness is sanctioned by paragraph 5(4).

Where the required notices were not given and the bearer had no actual notice, paragraph 6 requires a suspended cancellation order. This construction advances the abolition of bearer shares while preserving the statutory grace period and avoiding shares being left in limbo.

Waterside Nursery Limited applied in 2021 for a suspended cancellation order under paragraph 6(2) of Schedule 4, long after the nine-month surrender period and the subsequent three-month period for applying under paragraph 5(2).

The required notices had not been given, and the bearer had no actual notice by other means. The central issue was whether the late application was nevertheless an application under paragraph 5, giving the court jurisdiction under paragraph 6.

1. Jurisdiction. The court had jurisdiction to entertain an application made after the period prescribed by paragraph 5(2). Paragraphs 5 and 6 did not expressly prohibit a late application. Paragraph 5(4) instead made failure to apply within time an offence by officers in default.
2. Statutory purpose. Schedule 4 was intended to abolish bearer shares while placing responsibility for notices and court applications on the issuing company. It would be inconsistent with that structure to penalise a bearer who had not been warned because the company had also failed to apply on time.
3. Mandatory order. If the court is satisfied that the prescribed notices were given, or that the bearer had actual notice, it must make a cancellation order. Otherwise it must make a suspended cancellation order. The court has no discretion to make a different order.
4. Alternative remedies. Reduction of capital, winding up and striking off were not universal substitutes. They could be unavailable where voting rights were suspended, leave no shares in issue, or unfairly deprive an uninformed bearer of the statutory opportunity to surrender.
5. Disposition. The application was within the court’s jurisdiction. As the notices had not been given and there was no actual notice, a suspended cancellation order was made. No finding was made concerning Schedule 4 offences, dividends or voting rights during the suspension period.