Australia, June 27 -- New South Wales Land and Environment Court issued text of the following judgement on May 26:

1. By Originating Process filed on 1 November 2024 the Plaintiff, Mr E Kim, seeks relief under ss 232 - 233 and aspects of s 461 of the Corporations Act 2001 (Cth) ("Act") against the Defendants, Mr D Kim and Ginzaparramatta Pty Ltd ("Company").

2. I pause to note that that Originating Process has an essential assumption, at least in respect of the oppression claim, namely that Mr E Kim is registered as a shareholder of the Company so as to be a member of the company and have standing to bring that claim. Section 234 of the Act relevantly provides that an application for an order under s 233 of the Act may be made by a member of the company, and s 231 of the Act relevantly provides the circumstances in which a person becomes a member of a company.

3. The case law has indicated that a person who is not a registered holder of shares in a company, and not a member of a company, does not have standing to bring an oppression application nor, on the balance of authority, can he or she seek, in the oppression application, relief which will bring about his or her entry on the Company's share register so as to confer a standing that is otherwise absent: Treadtel International Pty ltd v Cocco (2016) 117 ACSR 176; [2016] NSWCA 360; Knox v Nile (2022) 160 ACSR 357; [2022] NSWSC 195 at [54].

4. Here, an issue now arises as to whether the Defendant should be permitted to maintain a Defence which puts in issue whether Mr E Kim, the Plaintiff, is a shareholder of the Company. That arises in circumstances where, in late December 2024, it appears that the Defendant sought to file a Defence, which was ultimately not filed, and served that Defence, which admitted that at least Mr E Kim was recorded as a shareholder of the Company on the records maintained by the Australian Securities and Investments Commission ("ASIC") and, at its highest, in paragraph 36 of the Defence, that the Plaintiff "as a shareholder" was never consulted about the hiring of any staff and had no basis to expect to be. I accept that at least that paragraph of that proposed Defence appeared, on its face, to admit that Mr E Kim was a shareholder in the Company. However, it must be recognised that that admission turns on a relatively complex question, often misunderstood in matters of this kind. The question whether a person is a shareholder of a company is partly a question of fact, depending on the content of the company's share register and the circumstances on which he or she was allotted or transferred a share, and partly a question of legal conclusions to be drawn from that fact. It is not apparent that either Mr E Kim, or the Defendant, had in fact made any inquiry to determine whether the company had a share register, at all, and if it did so, whether that share register recorded Mr E Kim as a shareholder, so as to make him a registered shareholder of the Company.

5. In the event, the Defendant subsequently filed a Defence, on 9 May 2025, which continued to admit the contents of the ASIC register, but now does not admit that Mr E Kim was a shareholder of the Company, so as to have standing to bring the oppression application and, in the corresponding paragraph to paragraph 36 of the earlier document to which I referred above, expressly pleads that Mr E Kim was not a shareholder of the Company.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197715b1afcc1ce36b8a5209)

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