Re Company (No.00996 of 1979), Re ; Racal Communications Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE SHAW,LORD JUSTICE TEMPLEMAN |
| Judgment Date | 31 July 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J0731-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | No. 00996 of 1979 |
| Date | 31 July 1979 |
[1979] EWCA Civ J0731-2
In The Supreme Court of Judicature
Court of Appeal
On Appeal from The High Court of Justice
Chancery Division
Group A
(Mr. Justice Vinelott)
The Master of the Rolls (Lord Denning)
Lord Justice Shaw and
Lord Justice Templeman
MR. R. AULD, Q.C. and MR. C. NICHOLLS appeared on behalf of the Director of Public Prosecutions (Appellant).
MR. D. RATTEE, Q.C. appeared on behalf of the Official Solicitor as amicus curiae.
Suspicion has fallen upon a company. So much so that there is reasonable cause to believe that an offence has been committed. It would appear that fraudulent statements were sent out to customers in which the company demanded more money than they were entitled to: and the customers paid on those demands. In order to prove the fraud, it will be necessary to have access to the invoices and accounts which the company themselves received from their suppliers. The matter was referred to the Director of Public Prosecutions. He wanted to see the company's papers. He made an application under section 441 of the Companies Act 1948. That enables the Director of Public Prosecutions or the Board of Trade or a Chief Officer of Police to go to a judge of the High Court and tell him that he has reasonable cause for believing that an offence is being committed in connection with the management of a company's affairs. If the High Court judge is satisfied that the provisions of the section have been complied with, then he is able to make an order authorising somebody to inspect the books or papers of the company and require the secretary or other officers of the company to produce the books and papers for inspection. It is certainly an important power. It is analogous to a search warrant. It is justifiable on public policy grounds: because companies are so impersonal that all sorts of frauds can be concealed beneath their cloaks. It has substantial safeguards in that the application has to be made by a very responsible officer and is only to be granted by a High Court judge.
When the Director of Public Prosecutions applied under section 441, the judge refused to make an order. He limited the range of offences to which it applied. The section says: "If… there is shown to be reasonable cause to believe thatany person has, while an officer of a company, committed an offence in connection with the management of the company's affairs and that evidence of the commission of the offence is to be found in any books or papers of or under the control of the company, an order may be made…" The judge said that the only offences "in connection with the management of the company's affairs" were offences (and I will read his words) "which are breaches, whether active or involving a failure to comply with some positive requirement, against the laws regulating the management of a company's affairs. It may be that such offences extend beyond offences against the express provisions of the Companies Act, 1948 and extend, for instance, to a fraud perpetrated by directors against their company". Having come to that limited construction of the words "an offence in connection with the management of the company's affairs", he refused any jurisdiction in the matter and declined to make the order which the Director of Public Prosecutions sought.
The first question which arises is, can the Director of Public Prosecutions appeal to this court? Subsection (3) of section 441 provides: "The decision of a judge of the High Court… on an application under this section shall not be appealable". In my opinion, that subsection is not a bar to the appeal to this court. There are many cases now which show that if a judge misconstrues a statute by giving himself jurisdiction when he has none or by refusing jurisdiction when he has it, then he makes an error which goes to the jurisdiction: and there is an appeal to this court, no matter how wide the words which seem to exclude it. For authority in this regard I need only refer to the case of Anisminic Limited. v. Foreign Compensation Commission (1969) 2 Appeal Cases 147, and especially to what was said by Lord Reid at page 171, by Lord Pearce at page 195 and by Lord Wilberforce at page 210. To which I would add a few words of my own in the later case of Pearlman v. Keepers and Governors of Harrow School (1979) 1 Queen's Bench 56 at page 70: "… no court… has any jurisdiction to make an error of law on which the decision of the case depends". It seems to me that in this case, if the judge made an error of law in construing the words of the section - if he construed the words "an offence", etc. too narrowly - then he made an error of law which made him refuse jurisdiction when he ought; to have entertained it. So the appeal can be entertained here in this court.
Then the question arises as to the meaning of the words of section 441. We need not pause on the words "reasonable cause to believe". They do not give rise to any controversy here. But it is necessary to consider the meaning of the words "an officer of a company". The word "officer" in relation to a body corporate is defined in section 455 of the...
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