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TMI Blog1968 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... among the members of the family. There was a Mr. Henry Smart, who held 5,000 shares ; there was his brother, Major Smart, who held 4,000 shares ; and there were two smaller shareholders, one of them a Mrs. Smart, who held 500, and another the applicant, who himself held 500. The business has been going on for 20 years or more and no doubt it was a prosperous affair. Mr. Henry Smart, the holder of the 5,000 shares, died. His administrator has never been put on the register. Then more recently Mrs. Smart died. So, that 5,500 shares are in the hands of administrators not on the register. That left Major Smart as the only permanent director under the articles, and the applicant as an elected director, being elected year by year, and also in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled discretion to refuse registration. If they have, it has never been exercised because there has never been an effective board meeting to consider it. It is well settled, and appears from a decision of Astbury J. in In re Hackney Pavilion Ltd. [1924] 1 Ch. 276 that the refusal to register a transfer is a matter which needs a positive assertion by way of resolution There had been none here when the motion was launched, so that at that date, it seems to me, the natural right of the would-be transferors was standing and had become as absolute as Astbury J. held it to be in that case. But the difference here is that between the launching of the motion and the hearing Major Smart had appointed his wife an additional director, as he was em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation, Weston's case [1868] LR 6 Eq. 17 , and In re Joint Discount Co., Shifiman's case [1868] LR 5 Eq. 219 . It is quite true that in the report it appears that some such point was raised, but you do not find anything in the judgments about it; and anyhow the judgments are not binding on us and there was not at the date when those two cases were decided the provision which first appeared in the Companies Act, 1929, making it obligatory on directors refusing to register a transfer to inform the persons affected within two months. Consequently, even if there had been any authority in those two cases, I do not think that they would have been anything we need be troubled by here. The judge firmly took the view that, if you delay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable time. If it must be exercised within a reasonable time, then it seems to me that the corollary that follows is that, if it is not exercised within a reasonable time, that right has gone. It appears to me that it would be unjust and unreasonable that the directors should be entitled to hold up the matter of the approval of the transfer indefinitely, and if they may not hold it up indefinitely, at what point does it cease to be possible for them to hold it up ? The answer seems to me to be clear : it must be, that after a reasonable time has expired they no longer have that right. I think that the judge was correct in what he decided was a reasonable time in the present case. I should also like to add a remark about In re Cuthb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side, as sole surviving director, had in practice an uncontrollable option under article 8, after appointing a nominated director of his selection, such as his wife, to proceed, with the assent of that selected director, to destroy the prima facie right of the applicant by refusing, by proper resolution, to accept the registration. It seems to me that any exercise of such an arbitrary power can be valid only if those who exercise it conform strictly and punctually to the one and only procedure permitted to them. Contractually given options lapse, unless there be provision to the contrary in the contract, upon the expiry of some specific time, or alternatively upon the expiry of a reasonable time. In the same way here, the right given und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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