Two shareholders sought to take a loan from the bank on behalf of the company, but the bank did not approve the loan because one of the shareholders had a "problematic" banking history. Thus, all the shares were transferred to the other shareholder.
The court dismissed the claim of the shareholder who is not registered with the Companies Registrar to order that half of the shares belong to him. A company is required to report to the Companies Registrar in the event of a transfer of shares. When shares are transferred in trust, the shareholder who is the trustee must report this, as a condition for the validity of the trust, and it is recorded that the holding is in trust. Here, there was no recording in the trust but recording of full ownership in the company shares when in any case the transferring shareholder did not later demand the return of the shares to him. Thus, the receiving shareholder has the right to hold all shares of the company.