Neutral Citation Number: [2006] EWHC 1184 (Ch)
Case No: HC05C01596
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 23/05/2006

Before :

Mr Justice Lindsay
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Between :

	(1) Cadbury  Schweppes plc
                    (2) Unilever plc	Claimants	
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	                          Halifax Share Dealing Ltd	Defendant and
Part 20 Claimant	
	-and-		
	Lloyds TSB Bank plc	Part 20 Defendant	
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Miss Rosalind Nicholson (instructed by LeBoeuf Lamb Greene & MacRae) for the Claimants and Part 20 Defendant
Mr Alain Choo Choy (instructed by DLA Piper Rudnick Gray Cary UK LLP) for the Defendant and part 20 Claimant

Hearing dates: 26th and 27th April 2006
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Judgment
Mr Justice Lindsay: 
Introduction
1.	As one of the two proceedings now before me here has been a trial on written agreed facts.    It is concerned, in the context of dealings with shares in the two Claimant companies (“the Companies”) listed at the London Stock Exchange, with the question of which one or more of the three innocent parties to the action – the Companies, their Registrars and the Stockbrokers used in the share dealings – are to bear the cost of making good to yet further innocent persons – shareholders in the Companies- the losses caused to those shareholders by the action of fraudsters.   The fraudsters had successfully contrived to sell shares in the Companies which truly belonged throughout to the shareholders.   The shareholders thus found themselves no longer recognised as such.   When the frauds were detected the Companies procured the purchase in the market of shares in themselves in order to distribute them to the defrauded shareholders.   Dividends that had been lost to the shareholders by way of the fraud were also made good to them.   So the shareholders have lost nothing but the exercise of recoupment has been expensive.   Who is to bear its cost?
2.	The Claimants are, respectively, Cadbury Schweppes plc and Unilever plc.   They appear by Miss Nicholson.    The only Defendant, Halifax Share Dealing Ltd.,  (“the Stockbrokers”) appears by Mr Choo Choy and is also a Part 20 Claimant against a single Part 20 Defendant, - “the Registrars” - Lloyds TSB Bank plc, which at all material times was contractually engaged by each of the Companies to provide share registration services.   The Registrars, at any rate for the main parts of the argument, make common cause with the Companies and also appear by Miss Nicholson.
3.	The trial has been unusual in that there has been no attempt amongst the Companies, the Registrars and the Stockbrokers to assess relative blameworthiness for the frauds.   No questions, for example, of negligence or of comparative rôles in causation have been raised.   The frauds are simply accepted as facts as, equally, is the innocence and honesty of each of the parties before me.   As the facts, as I have mentioned, have been agreed, the issues before me are exclusively of law but fall for decision in a somewhat artificial context (in litigation at least) in which matters such as ability or failure to inquire and relative culpability have played no part.
4.	The other of the two proceedings before me, directed to come on at the same time as the Claimants’ action, is an application by the Registrars to strike-out the Stockbroker’s Part 20 claim against them as disclosing no reasonable cause of action, alternatively asking for summary judgment against the Stockbroker.   Again, the issues are exclusively of law.
5.	Had I been given an assurance that adequate steps had already been taken such as would invariably thwart any repetition of similar frauds in these or in other companies I would have set out the steps taken by the fraudsters in some detail but that assurance is not given to me.   As I have no wish to publish a blueprint for further frauds I shall therefore mention the facts only to such extent as is necessary to make the judgment intelligible.
The facts
6.	Whilst the facts that have been agreed relate to several shareholders I was only taken in any detail to those relating to one of them, on the footing that those facts could be taken as typical.   The story that emerges is this.   A number of shareholders (whom I shall call “the Original Shareholders”) in one or other of the Companies became the objects of attention by fraudsters who, by communication with the Registrars, procured first that there should be a false change of address on the members’ register of the Company in respect of the holdings of the Original Shareholders concerned.   The new addresses were chosen by the fraudsters and it will be convenient to call them “the fraudsters’ addresses”.   Next the fraudsters, in further communication with Registrars and as if they were and in the respective names of the Original Shareholders, falsely (and unknown to the Original Shareholders) claimed that the Original Shareholders’ certificates had been lost and asked for duplicate certificates (still in the names of the Original Shareholders) to be issued and to be sent, as they then were, to the fraudsters’ addresses.
7.	At the next stage there were forged transfers of shares purporting to be by the Original Shareholders respectively by way of gift to new names (the fraudsters’ names or names used by the fraudsters and which I will call “the fraudsters’ names”).   The forged transfers were sent with the duplicate certificates to the Registrars together with express or implied requests for the transfer of the holdings into the fraudsters’ names and the issue of fresh share certificates in the names of the fraudsters.   Fresh certificates under the common or securities seals of the Company concerned and in the fraudsters’ names (which I shall call “the false certificates”) were thus procured from the Registrars and were sent to the fraudsters’ addresses.   The false certificates were false in the sense that they misrepresented who at the time should truly have been in the register of members as holders of those particular shares and where the legal title in the shares they described should then truly have lain.
8.	Finally (although the mechanisms used varied a little from one case to another and in some cases involved the Crest system and a move to a certificate-less holding and in other cases did not) a sale would be procured by the fraudsters by way of their lodging the false certificate and a transfer executed in the fraudster’s name with the Stockbrokers.   The transfer so lodged with the Stockbrokers was, of course, fraudulent as devised as part of a fraud but was regular on its face in that the identity of the transferor and of the registered holder of the shares as indicated on the share certificate accorded with each other.  The shares in question were then sold in the market and the Stockbrokers lodged the fraudulent transfers and the false certificates with the Registrars for the transfers to be registered and (generally) for fresh certificates to be issued to those who had purchased the shares in the market.
9.	The Original Shareholders’ shares thus came to be held by innocent incoming shareholders and the fraudsters, where undetected, were paid as upon any ordinary sale of listed shares through brokers.   After varying intervals the Original Shareholders then learned of the frauds and of their not being and having not for some time been on the register and they thus requested that the Companies should re-instate them.   As I have mentioned, that was done, without need for proceedings, by way of the Companies procuring purchases in the market of appropriate numbers of shares and their registration in the names of the Original Shareholders.   The Original Shareholders also were paid such dividends as the frauds had denied them.   It is for the costs of so re‑instating the Original Shareholders, both as to their shareholdings and as to dividends, that the Companies now claim against the stockbrokers.
10.	Throughout the main part of the argument there is, it is agreed, no need to distinguish between the position of the Companies and that of the Registrars, who may be regarded as no more or less than an identified agent of each Company, employed by the Company to discharge on its behalf the duties associated with share registration and held out to the public as such.
11.	At one point Miss Nicholson asserted that the Stockbrokers had been in a better position than the Companies to enquire into the propriety of the share transfer forms.   That, although perhaps obvious enough, is not something I feel entitled to rely upon.   The Agreed Facts, as I have mentioned, are at pains to avoid such assertions and in any event the assertion could be met with an equally obvious comment that the Companies and the Registrars were better placed than the Stockbrokers to enquire into the propriety of the changes of address and of the issue of duplicate certificates.
The issues;  a Summary
12.	The issues, as I have said, are exclusively of law and chief amongst them, in summary, is this:  what is the proper outcome when this head-on conflict occurs.   On the one hand, in the agreed circumstances there is admitted to be an implied indemnity in favour of a company when someone (here the Stockbrokers) lodges with the registrar for registration a fraudulent executed transfer of shares in the company, action upon which causes loss to the company.   On the other hand, an estoppel is sought to be raised by the Stockbrokers to defend themselves against that indemnity, the estoppel being that the Company is not to be heard to deny the truth of the apparently regular Share Certificate identifying the fraudster as shareholder which the Stockbrokers were given to lodge with the Company together with the transfer and upon which, say the Stockbrokers, they relied to their detriment.
The legislative background
13.	As that summary suggests, I shall need to examine the implied indemnity and the alleged estoppel in far more detail but Miss Nicholson rightly argues that the Companies’ claims fall to be considered against the backdrop of the statutory regulation of registration of members, of shareholdings, of share transfers, of the issue of certificates and of the keeping and maintenance of registers.   It is to that backdrop that I shall first turn.
14.	A Company is obliged to keep a register of its members, a register including, inter alia, their respective names and addresses and, where appropriate, a description of the shares held by them respectively – Companies Act 1985 section 352 (1) and (3).   The register can, in general, be inspected both by members of the Company and by others – section 356 (1) – and a copy of it may be required on payment of a fee – section 356 (3).   When a register is kept other than at the Company’s own office (for example, at the office of a registrar) then if there is default the registrar is as liable as if he were an officer of the Company in default – section 357.   There is power in the Court to rectify the register – section 359 – at the suit of a person aggrieved, any member of the Company or the Company itself.   The register, which is unconcerned with trusts and must not include notice of them – section 360,  is – section 361 – “prima facie evidence of any matters which are by this Act directed or authorised to be inserted in it”.   The register is thus prima facie evidence of, inter alia, the name of a member and of the number of shares held by him or her.
15.	Shares, of course, are personal estate – section 182 (1) (a) – transferable in manner provided by the Company’s Articles – section 182 (1) (b), each share being distinguishable by its appropriate number – section 182 (2).   Leaving aside transmission of shares by operation of law, shares are transferable only by way of delivery of a “proper instrument of transfer” – section 183 (1) – and the transfer has to be effected or to be the subject of an appropriate notice of refusal within two months – section 183 (5).   The Company has two months after lodgement of a proper transfer of its shares in which to complete and have ready for delivery the appropriate certificate of the stock transferred – section 185 (1) and (2).   A certificate under the common seal of the Company specifying any shares held by a member is prima facie evidence of his or her title to those shares – section 186 (1).
The implied indemnity
16.	It was against what was, for all material purposes, a similar statutory backdrop that there long since emerged the implied indemnity on which the Companies, by Miss Nicholson, here rely.   It emerged in its most authoritatively-stated form in relation to share dealings in Sheffield Corporation ‑v- Barclay [1905] AC 392.
17.	In Barclay authorised irredeemable stock in Sheffield Corporation was registered in the joint names of Timbrell and Honnywill.   Timbrell executed an appropriate form of transfer of the stock in his own name but forged the signature of Honnywill.   The forged transfer was in favour of a bank, Barclay’s, as a lender.    The bank sent the forged transfer to the Corporation for registration and the Corporation acted upon that request.   The bank was thus given a stock certificate and, before or after that, the bank’s stock was sold on to holders for value to whom, the Bank having returned its certificate to the Corporation, the Corporation gave fresh stock certificates.   Timbrell died and Honnywill then discovered the fraud and successfully insisted in proceedings that the stock of which he had been defrauded should be restored to him, as it was, at the Corporation’s expense.   The Corporation then sued the bank for an indemnity.   Had the Corporation any remedy against the bank which had asked it to act upon the forged transfer?
18.	Referring to what was an authority of, then, some 30 years earlier, Lord Halsbury said:
“In Dugdale –v- Lovering LR 10 CP 196 – Mr Cave, arguing for the Plaintiff, put the position thus:  “It is a general principle of law when an act is done by one person at the request of another which act is not in itself manifestly tortious to the knowledge of the person doing it, and such act turns out to be injurious to the rights of a third party, the person doing it is entitled to an indemnity from him who requested that it should be done”.   This though only the argument of Counsel was adopted and acted upon by the Court, and I believe it accurately expresses the law.”
– see Barclay at p.397.   Lord Halsbury continued on the same page to add:-
“The principle insisted upon by Mr Cave in his argument quoted above has been undoubtedly sanctioned as part of the law by several old decisions, and I think the principle as enunciated is well-established.”
On that basis Lord Halsbury held the Corporation to be entitled to recover from the bank.
19.	At p. 399 Lord Davey said:-
“I think that the appellants [Sheffield Corporation] have a statutory duty to register all valid transfers, and on the demand of the transferee to issue to him a fresh certificate of title to the stock comprised therein.   But, of course, it is a breach of their duty and a wrong to the existing holders of stock for the appellants to remove their names and register the stock in the name of the proposed transferee if the latter has, in fact, no title to require the appellants to do so.   I am further of opinion that where a person invested with a statutory or common law duty of a ministerial character is called upon to exercise that duty on the request, direction, or demand of another (it does not seem to me to matter which word you use), and without any default on his own part acts in a  manner which is apparently legal but is, in fact, illegal and a breach of the duty, and thereby incurs liability to third parties, there is implied by law a contract by the person making the request to keep indemnified the person having the duty against any liability which may result from such exercise of the supposed duty.   And it makes no difference that the person making the request is not aware of the invalidity in his title to make the request, or could not with reasonable diligence have discovered it.”
He, too, referred to Dugdale –v- Lovering supra and at pp. 403-4 added:-
“I am also of opinion that the authority keeping a stock register has no duty of keeping the register correct which they owe to those who come with transfers.   Their only duty (if that be the proper expression) is one which they owe to the stockholders who are on the register.   This point was decided by all the learned Judges who took part in the decision of the first case of Simm –v- Anglo‑American Telegraph [5 QBD 188].   I will content myself with quoting the language of Cotton L.J. [at 214] “The duty of the company is not to accept a forged transfer, and no duty to make inquiries exists towards the person bringing the transfer.   It is merely an obligation upon the company to take care that they do not get into difficulties in consequence of their accepting a forged transfer, and it may be said to be an obligation towards the stockholder not to take the stock out of his name unless he has executed a transfer;  but it is only a duty in this sense, that unless the company act upon a genuine transfer they may be liable to the real stockholder.”.”
Accordingly Lord Davey also was of the view that the loss in the case should be borne by the bank “who caused the appellants to act upon an instrument which turned out to be invalid” – p. 405.
Lord Robertson adopted the reasoning of both Lord Halsbury and Lord Davey.
20.	I shall have to return to Barclay in order to see what, if any, effect it has on the Stockbrokers’ estoppel argument, advanced by Mr Choo Choy, but for the moment I shall confine myself to looking at the subsequent history of the Barclay implied indemnity.  
21.	Barclay supra was applied in Stanley Yeung Kai Yung and another –v- Hong Kong and Shanghai Banking Corporation [1981] AC 787 PC.   A shareholder in the defendant bank had had the certificates as to his shares in it stolen from him.   Transfer deeds identifying a transferee in which that shareholder’s signature was forged were lodged, along with the stolen share certificates, with a firm of stockbrokers.   The stockbrokers in good faith sent the share certificates and transfer deeds to the bank and asked it to register the transfers and to issue new certificates to the apparent transferee.   The transferee thus came to be registered holder of the shares;  the original holder (unknown to him at the time) had his name taken off the register as the holder of them and the transferee then sold the shares.   The claimant, the innocent original shareholder, asked in proceedings for his name to be restored to the register and for related relief.   The bank brought third party proceedings against the stockbrokers.   The original shareholder succeeded against the bank.   As between the bank and the stockbrokers, at first instance and in the Hong Kong Court of Appeal the learned Judges relied on the Barclay implied indemnity and found the stockbrokers liable to indemnify the bank.   The stockbrokers appealed to the Privy Council, which, again, applied  Barclay.   The judgment of their Lordships was delivered by Lord Scarman.   He dealt with an argument advanced by the stockbrokers that it was truly the transferee rather than the stockbrokers who had requested the bank to act upon the transfer deeds and to issue new certificates and hence, as it was sought to argue, that, rather than the stockbrokers, it was only the transferee who was responsible for indemnifying the bank.   As to that argument he said:-
“The true principle of the law is that a person is liable for his engagements (as for his torts) even though he is acting for another, unless he can show that by the law of agency he is to be held to have expressly or impliedly negatived his personal liability.   But, upon the view of the letters, which the Courts below accepted and this Board believes to be correct, the brokers cannot avoid personal responsibility for whatever consequences the law attaches to the making of the request and the bank’s compliance with it.   It was their request – even though made on Mr Wong’s [the transferee’s] behalf.” – see p. 795.
Turning to the question of indemnity, Lord Scarman set out the citation by the 
Earl of Halsbury LC in Barclay from the argument in Dugdale –v- Lovering which I have cited above and also the passage which I have cited from the speech of Lord Davey.   He continued at p. 797:-
“This “broad principle”, as Lord Davey called it, has been consistently followed, and Mr Leggatt for the brokers disclaimed any intention to invite their Lordships’ Board to review it.   Their Lordships are satisfied that it is now firmly embedded in the law:  see Bank of England –v- Cutler [1908] 2 KB 208;  Secretary of State for India –v- Bank of India Ltd [1938] 65 Ind. App. 286 and Welch –v- Bank of England [1955] Ch 508 (per Harman J at pp. 548-549). ”
Lord Scarman concluded his observations under the heading of “indemnity” at p.798 as follows:-
“For these reasons their Lordships find themselves in agreement with the Court of Appeal in holding that there was in the circumstances of this request a promise by the stockbroker to indemnify the bank if, by acting on the request, it caused actionable injury or damage to a third party.   The promise was accepted by the bank acting on the request and became a contractual indemnity.”
It is to be noted that there was in Stanley Yeung Kai Yung no reference by the stockbrokers to any estoppel such as might have denied to the bank an ability to say that its issued stock certificates were false.   That could not have been said in that case because the stock certificates delivered to the stockbrokers with the forged transfer were not themselves in any real respect false.   The appropriate holder of the shares was the original holder and it was he who was identified as holder in the share certificates which were lodged with the forged transfers.   Stanley Yeung Kai Yung does not, as it seems to me, either add to or subtract from the Barclay indemnity;  it merely applied it.
22.	The third and latest in time of the cases cited by Miss Nicholson to establish the nature and applicability of the Barclay indemnity was Royal Bank of Scotland plc –v- Sandstone Properties Ltd and others [1998] 2 BCLC 429 per Tuckey J..   I shall need to return to the case as to other aspects of it but so far as concerns the Barclay indemnity it represents a clear modern application of it.
An estoppel is alleged
23.	Against that background of authoritative law Mr Choo Choy does not challenge the nature or applicability of the Barclay implied indemnity.   The Stockbrokers, he is content to accept, are obliged to indemnify the Companies against such recoverable loss as the Companies are duly able to allege and prove against the Stockbrokers.   Recoverable loss, he accepts and avers, is the cost of restoring to the register of the Company those who, in these proceedings, are alleged and proved to be the true owners of the shares, coupled with the cost of restoring to such true owners the dividends which, by way of the fraud, they had been denied.   But who, he asks, are such true owners as can, in these proceedings, be alleged and can be proved to be so by the Companies against the Stockbrokers?   It was the fraudsters who were named as shareholders in the certificates delivered to the Stockbrokers.   The written Agreed Facts in every case, he points out, include that the false certificates under common seal included not only the fraudster’s name and the relevant number of shares but a conventional wording such as follows:-
“This is to certify that the under-mentioned is/are the registered holder(s) of ordinary shares of [the appropriate sum] ….           each, fully paid, in [the Company] as stated below, subject to the memorandum and articles of association of the company.”
On that basis the Stockbrokers assert an estoppel;  the Companies, they say, cannot be heard in these proceedings to deny the truth of the representations made under seal by their own share certificates as granted to the fraudsters and as were handed to and, they say, relied upon (to their detriment) by the Stockbrokers.
Is the alleged estoppel material?
24.	In most cases the utility of a defensive estoppel in any particular proceedings requires a study of the pleadings in that case.   The question usually required to be looked into is whether the allegation that is sought to be estopped is a step in the claimant’s claim which he has to take if he is to succeed.   However, in the matter before me, the pleadings have largely been superseded by a written statement of Agreed Facts and by skeleton arguments.   Even so, it is the case that at a number of points in the Stockbrokers’ defence they had asserted that they had received the (false) share certificates in the fraudsters’ names and had asserted also that the certificates amounted to a misrepresentation by the Company concerned to the Stockbrokers that it was the fraudsters who were the true registered owners of the shares to which the certificates related.   The Stockbrokers’ defence also asserted at material points that in reliance upon that representation the Stockbrokers had been induced to act as they did.   Estoppel was raised, taking the shape that the Claimants were estopped from asserting as against the Stockbrokers that the persons the cost of whose reinstatement as shareholders was claimed for were indeed the true owners properly so to be reinstated.   The Agreed Facts assert at each relevant stage that the Stockbrokers relied upon the (false) share certificates and the skeleton arguments show both that the Stockbrokers raised an estoppel as I have described it and that the Claimants recognised it to have been raised.
25.	But is the allegation sought to be met with an estoppel an unavoidable step in the Claimants’ argument?   The Barclay implied indemnity arises where the Company has incurred a liability to a third party.   It is, as it seems to me, inherent in the Claimants’ case that the third party to whom the liability is thus incurred is the true owner of the shares in question.   One only has to postulate the likely response had it been that the Companies were claiming for the cost of purchasing shares for complete strangers to see that it is an inevitable part of the Companies’ case that the shareholders the cost of whose reinstatement is claimed for were indeed the true owners of the shares in question.   It is thus, in my view, an inescapable part of the Claimants’ case that the persons the cost of whose reinstatement is claimed for are persons who, in these proceedings against the Stockbrokers, can duly be alleged at the material time to be and can be proven to be such true owners.   An estoppel denying the Claimants the ability so to allege and to prove would thus, in my judgment, be a highly material estoppel.   Indeed, I do not understand Miss Nicholson to have said it is not.   But is it, in point of law, available to the Stockbrokers?
Authorities as to such an estoppel
26.	In Re The Bahia and San Francisco Railway Co. Ltd. –v- Trittin and others (1868) LR 3 QB 584 Miss Trittin had left her share certificates with a broker for safekeeping.   A forged transfer purporting to be from her, together with the certificates, was then lodged with the company which accordingly took her name off the register and issued new certificates in the names of the (fraudulent) transferees.   Those certificates were in form not materially distinguishable from that in the cases before me and accordingly certified that the named person was registered holder of the given number of shares in the company.   The shares were then sold by the fraudsters to innocent purchasers who, in the ordinary course, lodged transfers to them from the fraudsters and lodged also with the Company the relevant certificates (naming the fraudsters as shareholders) which they had received from the fraudsters.    The innocent purchasers thus obtained certificates in their own respective names.   Later, the company had in proceedings become obliged to restore Miss Trittin’s name to the register but had refused as from a certain date to recognise the innocent purchasers as shareholders.   A special case was stated for the opinion of the Court between the innocent purchasers as claimants and the company for the purpose of determining the amount of damages (if any) which the company was liable to pay them respectively.   The claimants succeeded.   In the course of his judgment Lord Cockburn C.J. said at pp. 594-5:-
“This power of granting certificates is to give the shareholders the opportunity of more easily dealing with their shares in the market, and to afford facilities to them of selling their shares by at once showing a marketable title, and the effect of this facility is to make the shares of greater value.   The power of giving certificates is, therefore, for the benefit of the company in general;  and it is a declaration by the company to all the world that the person in whose name the certificate is made out, and to whom it is given, is a shareholder in the company, and it is given by the company with the intention that it shall be so used by the person to whom it is given, and acted upon in the sale and transfer of shares.   It is stated in this case that the claimants acted bona fide, and did all that is required of purchasers of shares;  they paid the value of the shares in money on having a transfer of the shares executed to them, and on the production of the certificates which were handed to them.   It turned out that the transferors had in fact no shares, and that the company ought not to have registered them as shareholders or given them certificates, the transfer to them being a forgery.   That brings the case within the principle of the decision in Pickard –v- Sears [6 AD & E 469] as explained by the case of Freeman –v- Cooke [2 Ex 654] that if you make a representation with the intention that it shall be acted upon by another, and he does so, you are estopped from denying the truth of what you represent to be the fact.”
27.	Blackburn J, having referred to a pre-cursor of the Companies Act 1985 section 186 (1) cited above,  at p. 596 said this:-
“The statute (s. 31) further provides that the company may give certificates specifying the shares held by the member;  and the object of this provision is expressly stated to be that this certificate should be prima facie evidence of the title of the person named to the shares specified;  and the company, therefore, by granting the certificate, do make a statement that they have transferred the shares specified to the person to whom it is given, and that he is the holder of the shares.   If they have been deceived and the statement is not perfectly true, they may not be guilty of negligence, but the company and no-one else have power to enquire into the matter;  and it was the intention of the legislature that these certificates should be documents on which buyers might safely act,”
A little later he added:-
“…. it is quite clear that a statement of a fact was made by the company, on which the company, at the very least, knew that persons wanting to purchase shares might act.”
He, too, therefore, saw there to be an estoppel of the kind which the Chief Justice had described.   Mellor J was of the same opinion and Lush J dealt in a little more detail with the nature of the estoppel that arose.   At pp. 598-9 he said, after referring to the certificate given by the company to the fraudsters:-
“And the claimants having acted on this statement by the company, there arises an estoppel as against the company, prohibiting them from denying that what it states is true.   And the question then is, what does the certificate mean?   Does it mean merely, that [the fraudsters’ names] are on the register, and the company have done their best to ascertain that they are entitled to the shares, but cannot say whether they are so entitled?   Or does it amount to a statement that the company take upon themselves the responsibility of asserting that they are the registered shareholders entitled to the specific shares?   I think the certificate must amount to the latter assertion.   It is the company who are to keep and look after the register, and they are the only persons who have control over it, and they can refuse to register a person until he shews that he is legally entitled.   Having, therefore, put the names of [the fraudsters] upon the register, and granted them a certificate, the company are estopped after that statement has been acted upon and cannot deny that those persons were the legal holders of the particular shares which have been transferred to the claimants.   The claimants, therefore, are entitled to recover from the company the value of the shares at the time when they were deprived of them.”
It is to be noted that the share certificate there being spoken of and there relied upon was, as is the case with the share certificates before me, a false certificate in the sense that it named as shareholder someone who truly had no good title to the shares.
28.	In The Balkis Consolidated Co. Ltd. –v- Tomkinson and Others [1893] AC 396 the House of Lords followed Bahia.   Tomkinson, a stockbroker, had bought shares in the company and was registered by it and received share certificates from it as to the shares he had purchased.   The share certificate was in a form not materially distinguishable from those in the cases before me.   Relying on the share certificate Tomkinson then sold the shares.   At about that stage the company found that the vendor to Tomkinson had, prior to the sale to Tomkinson, sold the shares to someone else who had been duly registered and that the transfer to Tomkinson was part of a fraud by that vendor.   The company thus refused to register those who had purchased from Tomkinson.   In accordance with the custom and rules of the London Stock Exchange Tomkinson then bought other shares in the market to make good his transactions with his purchasers and then sued the company for the cost of putting those purchasers in the position in which they should have been.   Pollock B. gave judgment in Tomkinson’s favour, as did the Court of Appeal.   In the House of Lords Lord Herschell L.C. recited the effect of Bahia at p. 403 as being as follows:-
“The Court held that the giving of the certificate amounted to a statement by the company, intended by them to be acted upon by the purchasers of shares in the market, that the persons certified as the holders were entitled to the shares;  and that the purchasers having acted on the statement by the company, they were estopped from denying its truth and liable to pay as damages the value of the shares.”
Having referred to another case that had followed Bahia at p. 405 he said:-
“The learned counsel for the appellants impeached these decisions, as they were entitled to do in your Lordships’ House, and contended that they ought to be overruled.   After carefully considering the able arguments urged at the Bar, I have no hesitation in expressing my concurrence in the law laid down by the Court of Queen’s Bench in Re Bahia and The San Francisco Railway Co..  The reasoning of Blackburn J in pronouncing judgment in that case appears to me to be sound and in accordance with the law, and I think it would be very mischievous to cast any doubt on the authority of that case.”
He held that all the elements necessary to create an estoppel appeared to be present – p. 405.   At pp. 409-10 Lord Macnaghten said:-
“The general principle of law relating to estoppel by representation cannot be questioned.   It is, as Lord Cranworth observed in the case of Jorden v. Money, before this House, a principle of universal application, that if a person makes a false representation to another and that other acts upon that false representation the person who has made it shall not afterwards be allowed to set up that what he said was false and to assert the real truth in place of the falsehood which has so misled the other.   Then, after referring to some cases on the subject, his Lordship goes on to say:  “I think the principle may be carried much further, because I think it is not necessary that the party making the representation should know that it was false, no fraud need have been intended at the time.   But if the party has unwittingly misled another you must add that he has misled another under such circumstances that he had reasonable ground for supposing that the person whom he was misleading was to act upon what he was saying.”   Now there is no doubt, I think, that in this case the company must be taken to have known that the certificate was required by Tomkinson or his firm for the purpose of being acted upon.”
Lord Field at p. 414 held the estoppel to have arisen in Tomkinson’s favour.   Again it may be noted that the certificate on which reliance had there been placed was a false certificate in the sense that it had proceeded from a fraudulent transfer and was of shares of which another person had previously been and had remained registered owner.
29.	In Dixon –v- Kennaway & Co [1900] 1 Ch 833 Farwell J said at p. 837:-
“There is no doubt on the authorities that a certificate under the seal of the company estops the company from denying the title of a person who has accepted and acted on the certificate.   In Knights –v- Wiffen [LR 5 QB 660 at 665] Blackburn J defines estoppel as follows:  “Where one states a thing to another, with a view to the other altering his position, or knowing that, as a reasonable man, he will alter his position, then the person to whom the statement is made is entitled to hold the other bound, and the matter is regulated by the state of facts imported by the statement.”.   I accept that as a good definition of estoppel …”
Farwell J then added some qualifications to which I need not refer and at p.838 added:-
“It is plain that when Blackburn J uses the phrase “alter his position” he does not mean that an active alteration is necessary, but that it is sufficient if the person to whom the statement is made rests satisfied with the position taken up by him in reliance on the statement, so that he suffers loss.”
In the circumstances the Bahia-Balkis estoppel is, as it seems to me, no less authoritatively established than is the Barclay implied indemnity - see also In re Ottos Kopje Diamond Mines Ltd [1893] Ch 618 CA;  Alipour –v- UOC Corporation and Others [2002] 2 BCLC 770.   

Reliance and Detriment

30.	Mr Choo Choy, in order to have any hope of success with his estoppel argument, has to show the Stockbrokers’ reliance on the false certificates and consequential detriment suffered by them.   As for reliance, that, as I have mentioned, is accepted as part of the Agreed Facts.   As for detriment, the Stockbrokers, says Miss Nicholson, have suffered none.   It was the Companies not the Stockbrokers that reinstated the true shareholders and who so far have borne the expense of that reinstatement.   But, says Mr Choo Choy, relying upon Spencer Bower, The Law relating to Estoppel by way of Representation, 4th Edition, firstly, the Court should test the existence or not of detriment at the point at which the representors – here the Companies – propose to resile from their representation.   Such an approach, adopting Spencer Bower, was used in Gillett –v- Holt [2001] Ch 210 CA at p. 232-3.   Secondly, Mr Choo Choy says that the question of detriment falls to be considered in the light of the position which the representees – here the Stockbrokers – would be in if the representors were allowed to disavow the truth of their representations – see Spencer Bower p.124 (d) V 5.9.   I accept that is the correct approach and on that basis I hold that the Stockbrokers suffer the required detriment in that, upon the Companies proposing to resile from the truth of their share certificates, the position would arise, if they were allowed to do so, that the Stockbrokers would become liable to the Companies under the Barclay implied indemnity.
31.	On the argument thus far, the Stockbrokers in my judgment thus appear to have made good the three essential elements of any estoppel by representation, namely the representation, reliance upon it and detriment suffered by way of reliance.   Nor can the Companies say (nor do they say) that they did not know of the manner in which their share certificates might reasonably be relied on by, inter alios, stockbrokers or that they did not intend that there should be any such reliance.   But Miss Nicholson first looks at cases in which both the Barclay indemnity and the Bahia estoppel were mentioned. 
Past contests between the indemnity and estoppel
32.	Both Bahia and Balkis were referred to in argument in Barclay – see pages 393 and 395 of Barclay.   But neither the recorded shape of the Bank’s argument nor the speeches of Lord Halsbury LC or of Lord Davey, the only substantive judgments in Barclay in the House of Lords, suggest that the Bank had there argued that it had, to its detriment, relied on stock certificates issued to Mr Barclay and that accordingly the Corporation was estopped from asserting the falsity of such Certificates as it had issued to him.   I have not found it easy to unravel why it was that such a Bahia type of estoppel played so little part in the Bank’s argument in the House of Lords - see [1905] AC at p. 395.   However, to amplify the Barclay facts I have already described in paragraph  17 above, I take it to be the case that, carefully scrutinised, the available facts in Barclay served only to deny force to an estoppel argument, either altogether or in large part.   The Barclay facts as I have understood them are these.   Timbrell, the fraudster, sold the £8,200 (nominal) stock described in the forged transfer by way of stockbrokers to a firm of stock-jobbers.   The stock-jobbers did not pay the vendor’s stockbrokers but asked instead that the stockbrokers, who had an arrangement with the bank, should arrange to borrow the purchase price from the bank.   The stockbrokers agreed to do so.   The forged transfer was then lodged with the bank, the bank advanced money to the stockbroker and the stockbroker paid it to Timbrell, debiting the account which the stock-jobber had with the stockbroker.   So far as money was borrowed it was thus borrowed by the stockbroker from the bank and, in effect, also by the stock-jobbers from the stockbrokers.   But the bank lent only to the stockbroker.   The bank, in making its loan to the stockbrokers, had not acted in reliance on any stock certificate in its name and in its possession as none had existed at the point at which the loan was made.   The bank sent on the fraudulent transfer to the Corporation and asked that a stock certificate in its name should be issued but it did not receive the stock certificate until the 29th April 1893.   However, before that receipt by the bank, the stock-jobbers (presumably either instructed by the bank or at all events with the bank’s consent) on the 26th April 1893 had sold £8,000 of the stock. The bank’s certificate was returned to the Corporation to await transfers by the bank to purchasers from the bank.   The remaining £200 of stock was sold shortly thereafter.    The Corporation then issued fresh stock certificates to the individuals who had bought the stock from the stock-jobbers – see [1903] 1 KB 1 at pp 2 and 3.   If that sequence is correct the bank cannot have relied to its detriment on a representation to it deriving from the terms of and its possession of a stock certificate issued by the Corporation as it had sold or had consented to the sale of the vast preponderance of the stock even before it had received any such certificate.
1.	
33.	Moreover it is far from clear whether in Barclay the bank was constrained in its deployment of estoppel by a recognition that estoppel could only be a shield not a sword and, further, only a shield against, so to speak, a certain kind of blow by that sword.   The deployment of an estoppel argument by the defendant‑bank would have depended on how the Corporation-claimant framed its case against the bank.   The Corporation had begun its action against the bank (claiming an indemnity from the bank) only after it had already lost proceedings for rectification of its register and for associated relief brought against it by Mr Honnywill – see [1903] 1 KB pp 3 and 4.   It may be that the Corporation, relying on the earlier judgment in the rectification proceedings, had been able adequately to plead against the bank in the subsequent proceedings without any assertion, express or implied, that the certificate which it had briefly issued to the bank had been false.   If the Corporation had managed to avoid that assertion then the bank would have no ability to raise an estoppel;  estoppel would have been useless as a sword by reason of the nature of such estoppels being only defensive but would also have been useless as a shield as it would, so to speak, have been a shield only against a type of attack (one involving the Corporation asserting the falsity of its own certificate) which may not have been made.
34.	In the Court of Appeal (which reversed Lord Alverstone C.J.’s conclusion in the Corporation’s favour) the bank did refer to estoppel (see the muted form of argument immediately before Stirling L.J.’s interjection at [1903] 2 KB 580 at p. 583) but the Court did not consider estoppel as a defence to an admitted indemnity but rather as to whether it was something, a rule of evidence, such as might negative the inference of the indemnity.   The Court of Appeal was thus considering a rôle for estoppel to which Mr Choo Choy’s more confined argument does not aspire – compare Vaughan Williams L.J.’s interjection at [1903] 2 KB at p. 585.   Estoppel played a part in the judgment of Vaughan Williams L.J. in the bank’s favour – see p. 590–591 – but little or no part in the reasoning of Romer and Stirling LJJ.
35.	In the House of Lords Lord Halsbury did not expressly deal with Vaughan Williams L.J.’s reasoning as to estoppels and I do not take Lord Davey either to have said anything that precludes a defendant, who has been given a share certificate ostensibly complying with the statutory requirements to which I have referred, who has acted to his detriment in reliance upon it and whose good faith in doing so is not impugned, from asserting not that there is no implied indemnity in favour of the Company but rather that in attempting recovery under it the Company is estopped from asserting the falsity of its own certificates. 
36.	Both the implied indemnity and an estoppel were also deployed in Sandstone Properties supra.   In that case the fraudster had procured a duplicate share certificate (still in the name of the true shareholder) and then sold the shares affecting the name of the true shareholder and using that duplicate share certificate which was true in the sense that (although, unusually, it bore an address, the fraudster’s) it was in the name of the true holder.   The claimant‑registrars succeeded against the defendant-stockbrokers on the basis, I have mentioned, of the Barclay implied indemnity but the defendant had there sought to argue that the registrars “are estopped from denying the validity of the duplicate share certificate which was not issued to the true owner of the shares but to the fraudster” – p. 433.   Put like that, the argument, it would seem, was more concerned with to whom the share certificates had been sent and who possessed them than what they said.   As to the argument, Tuckey J at p. 434 said:-
“The certificate named the true owner of the shares, Mr A.F. Moore.   The fact that Mr Moore did not live at 4 Furness Road did not alter the truth of this statement.   The certificate did represent that Mr Moore lived at that address, but there is no evidence that the brokers relied on the address as such.   The certificate did not represent that the person in possession of it was Mr Moore.   The brokers relied on the fact that the fraudster said that he was Mr Moore.   For these reasons I do not think that [Counsel for the stockbroker] can point to any representation in the certificate upon which the brokers relied which might found an estoppel.   But even if he could, all the cases in which the company was held to be estopped involved a bona fide purchaser for value of the shares in question.   Here [Counsel’s] submission involves saying that the estoppel arises in favour of the fraudster who transferred the shares.   That is not the law.   If the estoppel cannot avail the fraudster, it cannot avail his agents, the brokers, either.”
37.	Thus so far as concerned the name on the share certificate, the registrars in Sandstone had no need to and could not assert the falsity of the share certificate as in that respect the certificate was true.   Sandstone is thus no guide as to the proper approach where, as in the cases before me, the share certificates relied upon were false and the claimants expressly or by implication need to assert that falsity.   Insofar as, in Sandstone, the certificate was false – namely as to the address – there was held to have been no reliance and hence these could not in any event have been an estoppel based upon that particular falsity.
38.	As for the estoppel in Sandstone being said to avail the fraudster or his agent, I shall return to that argument below but I notice two things.   Firstly, the learned Judge’s response on this issue was obiter;  he had already held there could be no estoppel and, secondly, whilst it is the case that the authorities in which Bahia estoppels have been successfully asserted are cases where it was raised by a bona fide purchaser for value without notice, none describes that as a necessary precondition of the estoppel.   As will have been seen from e.g. Dixon –v- Kennaway supra, the formulation of the Bahia type of estoppel does not involve that it shall have been only a purchaser (in the wide equitable sense) who shall have relied upon the share certificate.   Moreover, there is high authority that there is no need, and that it is wrong, to introduce into the common law notion – estoppel – the equitable doctrine of the bona fide purchaser for value without notice – see Bloomenthal –v- Ford [1897] AC 156 at 166-167 per Lord Herschell, not, it seems, cited in Sandstone.
39.	Leaving aside the possibility of an estoppel availing the fraudster’s agent, there is, in my judgment, nothing in Sandstone supra or indeed in the other authorities in which both the Barclay indemnity and the Bahia estoppel are dealt with, which precludes deployment by the Stockbrokers in the case before me of the limited form of estoppel which Mr Choo Choy seeks to raise.   It may very well be that, as in proprietary estoppel, it is proper to enquire whether it would be unconscionable on the part of he who seeks to raise the estoppel for him to do so – consider Gillett –v- Holt supra at p. 232 – but, even if that is right, I find it impossible to describe the attempt made here by the honest and innocent Stockbrokers to raise the estoppel as unconscionable on their part.   However, Miss Nicholson has further arguments against the estoppel, with which I shall need to deal.
40.	Before I do that, though, I should say something briefly as to Simm and Others –v- Anglo-American Telegraph Co. (1879) 5 QBD 188 C.A..   Although it is referred to in a number of other authorities to which I was referred, both Miss Nicholson and Mr Choo Choy studiously and expressly avoided oral citation of it to me (even after invitation from me) and I have heard no argument upon it.   It is a difficult case in which the Court of Appeal reversed Lindley J..   Bahia estoppel was discussed but no doubt was thrown upon the rightness of that case nor of other cases which had followed it.   The party there seeking to raise an estoppel, Burge & Co., had acted through nominees.   It seems to have been accepted that, at any rate for a time, the nominees had acquired what was called a “title by estoppel” against the company following the issue by the company of a share certificate to the nominees.   But that “title” had been lost by the time the action began and was held not to be available to Burge & Co..   The matter was discussed in terms of a “title” being or not being acquired by way of estoppel, not a question (as I shall return to) which arises in Mr Choo Choy’s argument.   No representation was made which Burge & Co. had acted upon – per Brett LJ at p. 210 – and, even if there had been a representation, that firm had not altered their position in any material way – p. 211.   There had been no transmission of “title” to Burge & Co. – per Cotton LJ at p. 215.   Farwell J distinguished Simm in Dixon –v- Kennaway supra at pp. 840-842.   In the circumstances I have not seen the case as one which regulates how I should react when a Barclay implied indemnity is sought to be met with a Bahia estoppel, not an estoppel such as is claimed to give rise to a “title” but simply one which seeks to preclude an ability in a company to deny the truth of its own shares certificates.
41.	For these reasons I do not regard anything said in the cases in which both the indemnity and the estoppel have been mentioned as providing me with any binding guidance as to how I should deal with the cases before me.   But Miss Nicholson has further shots in her locker.
An agent profiting from his principal’s wrong?
42.	She raises further arguments.   Perhaps tacitly doubting whether Tuckey J might have stated things too broadly in moving from his saying that, in all cases in which the estoppel has been successful, the person raising it had been a bona fide purchaser for value of the shares to his regarding that as a necessary precondition of the availability of the estoppel, Miss Nicholson firstly says this.   The Stockbrokers were the agents of the fraudulent vendors and hence, although unwittingly, became the agents of fraudsters.   To permit the Stockbrokers to resist recovery under the implied indemnity would be to permit persons to profit, if not from their own wrong, then at any rate from the wrongs of those for whom they were acting as agents.   That, Miss Nicholson urges, must be contrary to principle.   Plainly, she argues, the fraudsters themselves could not assert an estoppel nor, she adds, can their agents.
43.	Mr Choo Choy accepts, as to the fraudsters, that they could not assert the estoppel as they would not be in a position to have relied upon the share certificates as, unlike the Stockbrokers, they knew them to be false.   But the Stockbrokers, he urges, did not know of the falsity of the certificates and relied upon their truth when they presented to the Registrars share transfers apparently made by persons entitled to those shares.   For them to assert the estoppel, he urges, does not legitimise the frauds nor is it in order that the fraudsters should profit but is merely for the Stockbrokers to avoid the loss which they, as innocents, otherwise will incur.   There is no wrong by the Stockbrokers from which they seek to profit and the principle that a man must not be permitted to profit from his own wrong is not one that is intended, says Mr Choo Choy, to deny an estoppel to an innocent party who seeks not his own profit nor the profit of the wrong-doer but merely to avoid a loss.
44.	Tuckey J’s observation in Sandstone supra, says Mr Choo Choy, was obiter and in any event unfounded.   In Sandstone the brokers sold the shares for the fraudsters in early April.   The fraud was not discovered until the end of May but before then the stockbrokers in that case had already paid out the proceeds of sale of the shares – see p. 431.   There was no question in Sandstone of the brokers seeking payment to themselves;  all they sought was to strike out the action against them.   So also here, says Mr Choo Choy, there is no question of a payment being sought to the Stockbrokers and nothing improper, he says, in the assertion of the limited form of estoppel which the Stockbrokers here assert.   I am far from clear that the Stockbrokers do here assert the estoppel argument in the capacity of agents of the fraudster, a capacity which, I would expect, came to an end, well before these proceedings began, when the fraudsters were paid.   But in any event I agree that I am not bound by the obiter in Sandstone and, not finding there to be any attempt by a party before me to profit from its own wrong, I do not see this first argument as sufficient to deny to the Stockbrokers the ability to raise an estoppel, as they do, for the limited purpose of resisting the Barclay indemnity.
Assisting the fraudsters
45.	On the Agreed Facts I do not feel able to regard the Stockbrokers as persons assisting in the fraud by acting on the fraudsters’ requests (for share transfer and sale) to any degree greater than did the Companies so assist in acting on their requests (for changes of address and duplicate certificates).
A better title?
46.	Next Miss Nicholson derives an argument from the judgment of  Bowen L.J. in Ottos Kopje Diamond Mines Ltd supra where, at p. 628, having referred to Bahia, he continued:-
“The way in which the Court made the company liable was this:  they said that in as much as the certificate had been intended to be acted upon, it became a document the truth of which the company could not deny as against the transferee to whom it was intended to be shewn;  and, therefore, it precluded the company, as against the transferee, from denying the truth of what the certificate contained;  they could not be in any better position than if the statement were true; …..”
Fastening on that last phrase, Miss Nicholson says that here, were the estoppel to be permitted, the Stockbrokers would be put in a better position than had the false certificates been true.   They would have acquired, she argues, something better and stronger than the mere prima facie title which, as section 186 (1) indicates, is all that is intended to be conferred by a share certificate.
47.	Mr Choo Choy resists that.   He does not, he says, assert any title whatsoever, nor any right to warranty of title as to any shares.   He asserts no cause of action nor any right that can be asserted generally;  he asserts only, he says, an estoppel as a defence that arises against these particular claimants in the particular form of action which they have embarked upon against his particular clients, a particular form which is pregnant with a claim by the Companies that their own share certificates were false.   The Stockbrokers, he argues, as I accept, do not here seek to be in a better position than they would have been in if the false certificates had been true but merely to be in that very position.   Nor do I accept the argument that success here for the Stockbrokers on the estoppel is tantamount to conferring a prima facie title to shares in the fraudsters.   It was the certificates that did that, although, plainly, that title could easily have been displaced had the Companies by a timely use, for example, of s. 359, sought to unravel it.   The fraudsters, as I have indicated, could not have asserted the estoppel if only for their want of an ability to rely on the truth of the Companies’ certificates.   I thus do not see this argument as assisting the Companies.
Proximity of loss
48.	Next Miss Nicholson relies upon a passage in the judgment of Stirling L.J. in Longman –v- Bath Electric Tramways Ltd [1905] 1 Ch 646 CA at 667 where, citing from an earlier case of Blackburn J, he indicates that the reliance by he who seeks to raise an estoppel must be the proximate, direct or real loss (or detriment) which is asserted as part of the grounds for the estoppel.   Miss Nicholson says that there are no dealings whatsoever here between the Company and the Stockbrokers so that there was nothing on the Company’s part which could have been the cause (proximate, direct or real) of any loss to the Stockbrokers.   But that, as it seems to me, flies in the face of the authorities as to the effect which share certificates have and the wide classes, both of persons and transactions, in which reliance upon them can be placed – see Spencer Bower supra p. 257 paragraph X.2.15.   They are representations by the company concerned as to who are prima facie entitled to the shares identified in them – see Lush J in Bahia cited at paragraph 27 above.   They are thus representations which arise without need for any “dealing” between the company concerned and those who are intended to and do rely upon them.   
49.	Miss Nicholson says there has to be a causal nexus between the representation (here, what is said in the share certificates) and the detriment.   The Longman case supra on which she relies was a case of estoppel by negligence.   In such estoppel cases, as also in proprietary estoppel, it is reasonable to require a close nexus – Gillett-v- Holt [2001] Ch 210 CA at 232e-f and Spencer Bower supra p. 60 III.5.2.   It does not necessarily follow that in estoppel by representation a precisely similar view has to be taken of the required nexus but, in any event, I see there here to be one.   If only the share certificates relied upon by the Stockbrokers had named the persons truly entitled at the time to be registered holders, namely the Original Shareholders, the Stockbrokers could not and would not have acted as they did.   The Stockbrokers would have indicated to the fraudsters that they could not, when supplied with a share certificate in the name of A, act upon a purported transfer thereof executed only by B.   The profit to the fraudsters and the detriment of the Stockbrokers would have been avoided.   That, as it seems to me, is a nexus which is robust enough.
Estoppel v. Indemnity;  a result 
50.	The old maxim that “All estoppels are odious – see e.g. Baxendale –v- Bennett (1878) 3 QBD 525 at 529 CA – never uniformly respected, no longer represents modern practice, at any rate as to estoppels by representation.   Undeterred by the maxim and for the reasons I have given, I hold the Stockbrokers to have satisfied the conditions required if an estoppel by representation is here to be asserted and I find no reason why it should not be deployed.   The Claimants’ claim, for the expense involved in their reinstating the Original Shareholders, was on the basis that all along such Original Shareholders were the persons who alone were to be recognised as the true shareholders.   However, the onus is on the Companies to displace the prima facie title which their own share certificates conferred – see Dixon –v- Kennaway supra at p. 837 per Farwell J – and thus the Claimants, being, by reason of the estoppel, unable in these proceedings to deny the truth of their own share certificates naming others, the fraudsters, as the shareholders at the only time at which the Stockbrokers did anything of relevance, find themselves unable to assert or prove that the persons they reinstated were, indeed, the true shareholders.   Their claims thus end up as if the Claimants had reinstated strangers, persons who had no right to be shareholders, a claim against which they received no Barclay implied indemnity from the Stockbrokers.    The Companies have no right against the Stockbrokers other than by way of that indemnity and, that being denied them, their claims against the Stockbrokers thus fail.
A practical point
51.	If I may mention a practical point, it is this.   I touched on it during the hearing but it is fair to say, as relative culpability was never in issue, that no party was asked for considered observations upon it.   When a company or its registrar receives a notification of change of address coming, as it would seem, from a shareholder, it then sensibly writes a letter (called “the fraud check letter”) to the shareholder at the then-unchanged registered address.   The letter asks the shareholder to indicate if he or she has truly changed address.   An unfortunate recurring feature of the frauds I have had to look at, one seen also in some of the authorities I have cited from the 19th Century, is that the shareholder, who has not changed address, nonetheless fails to reply saying that that is the case.   The fact that there is no reply to the fraud check letter tends to confirm to the registrar or company that there has, indeed, been a change of address.   That may facilitate the subsequent frauds.   I have, since the hearing, been shown a copy of a typical fraud check letter.   Whilst its form is typical it is not said to be a standard form used by all or most registrars.   Its text does not of itself draw to the shareholder’s attention the real importance of an answer to the letter if there has been no change of address or of the difficulties which he or she may encounter if, not having changed address, he or she fails to tell the registrar or company that that is so.   I am told the envelope which encloses the fraud check letter is always marked “Important” but that description is, I fear, commonly enough applied even to relatively unimportant company and other notices.   It is not for me here to say and I do not say that the present practice is inadequate and I recognise that a different kind of difficulty may arise when there truly has been a change of address but where the fraud check letter is answered by a fraudster who says that there has been no change.   However, if such frauds as I have described are more readily to be avoided I would suggest as proper at least to be considered, firstly, far greater emphasis being put in the text of the fraud check letter upon the importance of an answer if there has been no change of address and, secondly, that the shareholder should be invited to answer not merely, as at present, by telephoning the registrar (a number is given for the registrar but the call is not in terms said to be free) but also, perhaps, by a pre-paid form of reply with a box to be ticked if there has been no change of address, so as to make it as easy as possible and visibly cost‑free for the shareholder to answer the letter. 
   Contribution by the Registrars to the Stockbrokers
52.	The Stockbrokers’ Part 20 claim against the Registrars arises only if, in the main action, there is an award against the Stockbrokers.   For the reasons I have given, there is no such award.   Both Miss Nicholson and Mr Choo Choy advanced arguments under the Civil Liability (Contribution) Act 1978 but because, firstly, the Part 20 claim never arises and, secondly, because, if I were to deal with it, I would be dealing with it on the rather artificial basis of the written Agreed Facts in which, as I have mentioned, no attempt is made to look into the relative negligence, blameworthiness or responsibility of the various actors for the frauds which have occurred, I shall leave those arguments for decision in cases where a decision upon them is required.
The Strike-out
53.	Consideration of the Registrars’ application for a striking-out of the Stockbrokers’ Part 20 claim against them, had there been an award against the Stockbrokers in the main action, might have required an examination in detail of the Registrars’ as opposed to the Companies’ rôle in the issuing of the false certificates, a rôle little dealt with in the Agreed Facts.   However, I would not, I think, have been likely to have regarded the Stockbrokers as having no real prospect of success against the Registrars but, even if I had thought that, I would probably have regarded the issues between them to have been such that, irrespective of the prospects of success, they were of such seriousness and of such wide concern as to make summary process inappropriate.   The Registrars’ application for a strike-out would in any event have failed.
Conclusions
54.	For the reasons I have given I dismiss both the Claimants’ action and the Registrars’ application.