Andrew Bland & Anor v Jeanette Keegan (Re JDK Construction Limited)

The Court of Appeal held that, for the purpose of determining whether a written resolution to wind up a company and to appoint liquidators was valid, the members of the company are those shown on the company’s register of members at the relevant time unless and until the register is rectified by the court. The court applied provisions of the Companies Act 2006 governing written resolutions (Part 13, including ss.281–283, 289–290) together with the Insolvency Act 1986 requirements for a special resolution to wind up and an ordinary resolution to appoint liquidators (ss.84(1)(b) and 100(1)). The court rejected the submission that a forged or unauthorised stock transfer automatically meant that the true owner remained a member for voting purposes in the absence of rectification. The court explained that the remedy for wrongful removal or forgery lies in an application for rectification under section 125 of the Companies Act 2006 and that the court has discretion to make retrospective or consequential orders (see re Sussex Brick and Bahia) to allocate loss or avoid injustice.

Background and parties:

• The company, JDK Construction Limited, had 100 ordinary shares originally held by Jeanette Keegan. A stock transfer form dated 20 April 2019 purportedly transferred 50 shares to Julie. Electronic filings at Companies House recorded the transfer and changes to the register. In July 2021 Julie signed a written resolution to place the company into voluntary winding up and to appoint the respondents as joint liquidators. Jeanette denied authorising the transfer and contended the transfer form was forged.

Procedural posture and relief sought:

• The liquidators sought a declaration that their appointment was valid (IA Application). Jeanette issued a Part 7 claim seeking declarations that the transfer was forged and an order under section 125 of the Companies Act 2006 rectifying the register. The Part 7 claim was later compromised between the family parties by a Tomlin order; the liquidators were not parties to that settlement. The High Court (HHJ Hodge KC) had declared the liquidators’ appointment valid; that decision was appealed to the Court of Appeal.

Issues framed:

• Whether, for the purposes of the Companies Act provisions on written resolutions (and the Insolvency Act requirements for winding up and appointment of liquidators), Jeanette was an "eligible member" at the time Julie signed the written resolution, despite the allegation that the stock transfer form was forged.
• Whether the entries on the register of members are conclusive as to membership or only prima facie and thus capable of being rebutted by proof of forgery without rectification.

Court’s reasoning:

• The court started from section 112 of the Companies Act 2006 and the Supreme Court’s discussion in Enviroco v Farstad to emphasise the fundamental role of the register: the person on the register is treated as the member "unless and until the register is rectified."
• The court accepted that section 127 provides the register is prima facie evidence, and that there are limited statutory exceptions (for example subscribers). But where a name has been removed from the register, the appropriate remedy is an application for rectification under section 125; until the court makes such an order the entries are to be relied upon for voting and other statutory purposes.
• The court reviewed authorities dealing with forgery and rectification (Ruben; Bahia; Sussex Brick; Adham) and explained those cases show the availability of rectification and consequential relief (including retrospective effect and compensation) rather than a rule that forgery automatically preserves the removed person’s voting rights absent court action.
• Applying those principles, and given that no court had rectified the register and the Part 7 claim had been compromised without addressing rectification, the Court of Appeal held Julie was the sole member on the register at the relevant time, the written resolution validly passed, and the liquidators validly appointed.

Appeal dismissed. The Court of Appeal held that membership for voting and written-resolution purposes is determined by the entries on the company’s register of members at the relevant time unless and until the register is rectified by the court; therefore, absent a rectification order restoring Jeanette to the register with appropriate retrospective effect, the written resolution signed by Julie was valid and the liquidators’ appointment effective.

Appeal from the High Court of Justice, Business and Property Courts in Manchester (His Honour Judge Hodge KC) [2023] EWHC 2805 (Ch) to the Court of Appeal [2024] EWCA Civ 934.