R v Registrar of Companies, ex parte Esal (Commodities) Ltd

JurisdictionEngland & Wales
Judgment Date29 July 1985
Neutral Citation[1985] EWCA Civ J0729-12
Judgment citation (vLex)[1985] EWCA Civ J0729-11
Docket Number85/0490,85/0491
CourtCourt of Appeal (Civil Division)
Date29 July 1985

[1985] EWCA Civ J0729-11






Royal Courts of Justice


Lord Justice Lawton

Lord Justice Slade

Lord Justice Dillon


The Queen
The Registrar of Companies
Ex Parte Esal (Commodities) Limited

MR. E. W. HAMILTON Q.C. and MR. E. A. BANNISTER (instructed by Messrs. Freshfields) appeared for Esal, Middle East Bank Ltd. and David Dein.

MR. P. J. MILLETT Q.C. and MISS M. H. ARDEN (instructed by Messrs. Linklaters & Paines] appeared for the Allied Arab Bank.

MR. J. F. MUMMERY and MR, N. A. L. DAVIS (instructed by The Treasury Solicitor) appeared for the Registrar of Companies.

MR. J. B. W. McDONNELL Q.C. and MR. A. K. SEN (instructed by Messrs. Stocken & Lambert,) appeared for the Central Bank of India.


This is an appeal by the Registrar of Companies against orders of Mervyn Davies J., sitting as an additional judge of the Queen's Bench Division, whereby, inter alia, he adjudged that the decision of the Registrar to register an alleged charge dated 8th February 1984 on the assets of Esal (Commodities) Limited ("the Company") and give a certificate of such registration be moved into the Queen's Bench Division and ordered that after removal the registration and certificate be quashed. In this court the only respondent to the appeal has been the Central Bank of India. Most of the circumstances in which that bank became involved in the Company's application for judicial review have been recounted in Dillon L.J.'s judgment in the dispute as to costs and locus standi between the Central Bank of India and the Allied Arab Bank Limited ("the Arab Bank"). It is unnecessary to repeat them in this judgment; but some detail is required for the purposes of the Registrar's appeal.




The letter of demand for further security by executing a debenture seems to have been typed on 8th February 1984 but not sent until the next day. Someone then altered the typed date from 8th February to 9th February. As Dillon L.J. has recounted, on 10th February 1984 the Arab Bank issued a writ in the Chancery Division against the Company claiming specific performance by the execution of a debenture in the form sent with the letter. On 29th February 1984 the Arab Bank's solicitors, with intent to register the charge created by the letter of demand, delivered to the Companies Registry a photocopy of what they claimed was the instrument creating the charge together with a completed Form 47. The trial judge referred to this form as Form 47, Mark I. I will do the same. This is a statutory form which has, with minor amendments made from time to time, been in use since 1900. Its use is not mandatory as both Mr. McDonnell and Mr. Mummery agreed. Those using it correctly set out on it the particulars prescribed to be delivered pursuant to section 95(l) of the Companies Act 1948. The Arab Bank's solicitors did not fill up the form correctly and overlooked that section 95(l) required them to send the original instrument, not a copy. This is clear from the context in which the word "instrument" is used in a number of sub-sections in section 95. A perusal of the copy instrument (and the staff in the Registry do read what purport to be instruments) would have revealed, as the trial judge found and I agree, that the instrument itself did contain the prescribed particulars. On 27th March 1984 the Registry returned Form 47, Mark I, and the accompanying documents without registering the charge.


On 29th March 1984 the Arab Bank's solicitors delivered to the Registry another Form 47, Mark 2, which was correctly made out save that the date of the demand letter was given as 8th February instead of 9th February. On 11th May 1984 the Registrar returned both Forms 47, Marks 1 and 2, and the accompanying documents as being unregisterable pursuant to section 95. The Registrar had been advised to that effect by a solicitor on his staff. In a letter dated 14th May 1984 the Arab Bank's solicitors submitted reasons for saying that the debenture should be registered. Thereupon the Registrar took counsel's opinion. He was advised that the debenture should be registered despite the defects in Form 47, Mark 1, because there had been substantial compliance with the statutory requirements. It was then registered and a certificate given that it had been registered on 29th February 1984.


At no time before registration did the Arab Bank's solicitors disclose to the Registry that an unsecured creditor, the Punjab National Bank, had presented a petition to the Companies Court for the compulsory winding up of the Company or that there was an appeal pending in the Court of Appeal against the order of Harman J. for the specific performance by execution of the debenture which was sought to be registered. The Registrar had no knowledge of these facts. It was not suggested that this information had been withheld I by the solicitors with intent to deceive the Registrar.


On these facts Mervyn Davies J. adjudged that the Registrar had usurped jurisdiction by considering particulars delivered out of time. This, he said, was a function of the court pursuant to section 101 of the 1948 Act and that in consequence judicial review was available both to the Company and the Central Bank of India. He did not deal separately with the submission put forward that there had been a breach of the rules of natural justice because of nondisclosure to the Registrar of events which had happened after 29th February 1984.


In my judgment, the Registrar did act without jurisdiction when he decided to register the debenture without having had delivered to him within 21 days of 9th February 1984 the original of the instrument by which the debenture was created or evidenced. He may too have misdirected himself in deciding that the delivery of the photocopy instrument amounted to a delivery of the prescribed particulars; but I do not find it necessary to make a specific finding on this point.




The Registrar, so we have been told by his counsel, Mr. Mummery, is of the opinion that the decision under appeal has introduced into the law relating to charges on a company's assets a measure of uncertainty as to one feature of their effectiveness which Parliament decided to introduce as long ago as 1900 and which this court in a series of cases starting in 1908 has adjudged to have been achieved. If the judgment appealed against is right, it is possible that uncertainty will be introduced into other branches of the law in respect of which Parliament has seemingly intended to achieve certainty by the use of the same kind of legislative formula as is under consideration in this case, namely a certificate given pursuant to section 98(2) of the Companies Act 1948 which Parliament enacted should be conclusive evidence that specified requirements of the Companies Act 1948 had been complied with. We were told that there may be as many as 300 statutory provisions of this kind.




By the Companies Act 1900 Parliament enacted by section 14(3) that the Registrar of Companies should keep with respect to each company, a register in the prescribed form of the kinds of mortgages and charges referred to in sub-section (l) and should enter in the register, with respect to every such mortgage or charge, the date of creation, the amount secured by it, short particulars of the property mortgaged or charged, and the names of the mortgagees or persons entitled to the charge. By sub-section (6) the Registrar was to give a certificate of the registration of any mortgage or charge "which certificate (was to be) conclusive evidence that the requirements of this section (had) been complied with". Sub-section (7) required the company to register every mortgage or charge created by it but registration could be effected by any person interested in the mortgage or charge. The scheme for registration set up in the 1900 Act was repeated, with amendments and additions in both the Companies Act 1929 and the Companies Act 1948. Under the latter Act the scheme is set out in Part III.




In 1908 in Re Yolland, Husson and Birkett Ltd. (1908) 1 Ch. 152 this court had to consider the consequences in law of the scheme for the registration of mortgages and charges set up in the 1900 Act and in particular the effect of a certificate given by the Registrar pursuant to section 14(6). This court adjudged that the certificate was conclusive that all the requirements of the 1900 Act had been complied with and that the court should refuse to go into the question whether such requirements had been complied with. This court considered the mischief which registration was intended to remedy and why a certificate should be conclusive evidence that the requirements had been complied with. At page 156 Cozens-Hardy M.R., referring to the mischief sought to be remedied, said:

"I approach s.14 of the Companies Act of 1900 as one is bound to do, by considering what was the mischief which had to be remedied.

"It was that companies were allowed to issue debentures, charging very frequently all their present and future assets, and there might be means of ascertaining, at all events for a considerable time, whether any such debentures were issued; and therefore, for the protection of the general creditors of the company, or of persons desiring to trade with the company, it was thought fit to require that there should be a register of mortgages of that particular kind, not merely in the company's own books, but kept by the registrar. That is worked out in s.14 in various ways."



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