2008 BCSC 570 Gribov v. Manhattan Transfer Registrar

Before: The Honourable Madam Justice Bruce

Reasons for Judgment

Counsel for Petitioner	In Person
Counsel for Respondent	No One Appearing
Date and Place of Trial/Hearing:	April 30, 2008
	New Westminster, B.C.

INTRODUCTION

[1] The petitioner seeks a declaration that he is the sole owner of a share certificate no. GS4411 representing 300,000 shares of the common stock of Golden Spirit Minerals Ltd. and an order requiring the respondent to re-issue this share certificate in his name. Lastly, the petitioner seeks the costs of this petition.

[2] The petitioner first appeared before me on November 30, 2007 and, after being satisfied that the respondent had been duly and properly served with the petition and had failed to file an appearance, I heard the application without the presence of the respondent. Further, after reviewing the affidavit material filed by the petitioner, I was satisfied that the relief claimed should be granted and issued an order declaring the petitioner was the sole owner of the share certificate and granting him costs.

[3] When the petitioner served the respondent with the order, the respondent refused to comply for a number of reasons. First, the respondent maintained the court had not been provided with all of the facts relevant to the question of ownership of the share certificate, and in particular, the judgment of Boyd J. in Zazkis v. Golden Spirit Minerals Ltd. 2005 BCSC 638. Second, the respondent argued that Micheal Zazkis had no authority to sell the share certificate which was the property of Golden Spirit Minerals Ltd. Third, the order appeared to have spelling errors and therefore may not be genuine.

[4] As a result of the respondent’s refusal to comply with the order, the petitioner sought an additional order directing the respondent to re-issue the share certificate in his name and pay for the costs of these proceedings.

[5] After reviewing the judgment in Zazkis, and considering the affidavit material filed by the petitioner, as well as the written material forwarded by the respondent, I remain satisfied that the petitioner is entitled to the relief claimed.

BACKGROUND

[6] Some time before April 2005 Michael Zazkis and his company, 374787 B.C. Ltd. sued Golden Spirit Minerals Ltd. The plaintiff company alleged that the share certificate No. GS4411 belonged to it and that the share certificate had been unlawfully frozen in its trading account pursuant to the directions of Golden Spirit’s directors. Mr. Zazkis sued Golden Spirit in his personal capacity claiming damages arising from the wrongful freezing of the brokerage account.

[7] When this action came on for trial before Boyd J. she dismissed Mr. Zazkis’ claim against Golden Spirit, but awarded 374787 B.C. Ltd. damages in the amount of $15,000 representing the value of the 300,000 shares based on a conclusion that the shares would have been sold in the ordinary course of events in late July or early August 2004 at a price of $0.05 per share. Boyd J. also concluded Golden Spirit’s actions in freezing the trading account were unlawful, but did not conclude that either Mr. Zazkis or his company were entitled to the 300,000 shares in addition to the damages awarded.

[8] Golden Spirit refused to pay the judgment for $15,000 and its Board of Directors resolved not to satisfy the judgment until the share certificate was returned to it. Further, and notwithstanding Boyd J.’s conclusion that the stop order was unlawful, the Board of Directors resolved as follows:

… that the Board of Directors, while acknowledging the comment of The Honourable Madam Justice Boyd in item [21] of the Judgment, will advise its transfer agent, Manhattan Transfer of New York, to continue our instruction that the 300,000 shares registered to 374787 B.C. Ltd. under share certificate GS4411 or any attempted assigns of the share certificate GS4411 by 374787 B.C. Ltd. or Michael Zazkis, shall remain under the stop transfer order until further notice.

[9] Because Golden Spirit refused to pay the judgment, 374787 B.C. Ltd. took steps to execute the judgment against the assets of Golden Spirit, including share certificate no. GS4411. An order for seizure and sale of Golden Spirits’ assets was issued by this court on August 2, 2005 and Golden Spirit was given notice that all its stocks, shares, dividends, and other profits were to be seized for non-payment of the judgment. The judgment was still not paid and Accurate Court Bailiff Services Ltd. seized the assets of Golden Spirit and, pursuant to that lawful seizure, share certificate no. GS4411 was sold by sealed public tender after being advertised for sale in the Vancouver Sun newspaper on March 21, 2006.

[10] The petitioner purchased the share certificate for the sum of $2,000 as the highest bid in the closed public tender. A Certificate of Result of Sale, signed by a representative of Accurate Court Bailiff Services Ltd and dated November 23, 2006, confirmed the sale to the petitioner effective July 18, 2006. Pursuant to this sale, the petitioner took possession of the original share certificate in the name of 374787 B.C. Ltd. upon payment of the $2,000.

[11] At the respondent’s request the judgment rendered by Boyd J. reported at 2005 BCSC 638 was registered as a foreign judgment in the state of New York under action no. 06-5136. However, the respondent continued to refuse to abide by the order or acknowledge the sale of the share certificate to the petitioner.

[12] The share certificate and any transfer of this share certificate has been in the control of the respondent at all times to material this petition.

DECISION

[13] Based on the evidence before me, I am satisfied that the petitioner acquired ownership of the share certificate through a bona fide distress sale conducted by Accurate Bailiffs, and further, that the respondent has no basis in law for its continued refusal to acknowledge the petitioner’s right to ownership of the share certificate.

[14] Any resolution by the directors of Golden Spirit with respect to the freezing of the trading account holding the share certificate is void and of no effect in law in so far as the sale of the share certificate to the petitioner is concerned. The share certificate was purchased by the petitioner in a closed public tender at the highest bid price. The sale was conducted by a third party independent of Mr. Zazkis and his company. The seizure order underlying the sale is valid in law and there are no other circumstances that would lead me to conclude that the sale to the petitioner was either unlawful or otherwise flawed in any way.

CONCLUSION

[15] The petitioner is declared the sole owner of share certificate No. GS441. The respondent is ordered to forthwith re-issue the share certificate in the petitioner’s name and transfer it to him without further cost.

[16] The respondent shall be responsible for the petitioner’s costs in the amount of $619 which are payable forthwith.

_______________________________

“The Honourable Madam Justice Bruce”

Citation:	*Gribov v. Manhattan Transfer Registrar,*
	2008 BCSC 570