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Deposit and Investment Bank Ltd v Registrar of Companies [1986] VULawRp 16; [1980-1994] Van LR 256 (10 November 1986)

[1980-1994] Van LR 256

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU

CIVIL JURISDICTION

Civil Case No. 193 of 1986

BETWEEN:

DEPOSIT & INVESTMENT BANK LIMITED
Applicant

AND:

REGISTRAR OF COMPANIES
Respondent

Coram: Mr Justice M.J.R. Coakley, Acting Judge

Counsel: Mr P. Coombe, Counsel for Applicant
Mr A. Durkin, Counsel for Respondent

JUDGMENT

[COMPANIES - REGISTRATION OF CHARGES]

The background to this application can be gathered from an exchange of correspondence between the lawyers acting for the Applicants on the one hand and the Respondent, who is the Registrar of companies, on the other. The letters are annexed to an affidavit sworn by Mr Coombe, in support of the originating Summons, and he has also appeared as counsel for the Applicants, whilst Mr Durkin, for the Attorney-General, has appeared as Counsel for the Respondent.

There is first a letter by the Respondent addressed to the lawyers dated 24 September 1986, which reads :-

"I refer to the recent particulars of charge filed by you in the above matter and I write to point out that the certificate endorsed thereon by me should not have been so endorsed as particulars of the charge were not received by me within 21 days of the creation of the charge as is required by the company's Regulation. The charge was dated 27th August, 1986 and the 21 days thereafter expired on 17th September, 1986.

In our telephone discussion at the time you will recall that we calculated the 21 days together and you agreed with the calculation. Will you therefore please return to me by return of post the original documents so that I may cancel the certificate endorsed thereon."

The reply by the lawyers on 29 September 1986 might be regarded as a letter before action, as it gave the clearest indication what steps the Applicants would take. The letter reads:-

"We refer to your letter of 24 September 1986 which the writer saw today after his return from Tanna.

We disagree categorically with the penultimate paragraph of your letter. The writer telephoned you on 18 September 1986 and asked for a ruling from you as to whether a document dated 27 August 1986 was still within time for registration pursuant to section 104 of the Companies Regulation. You made a calculation and ruled that it was within time. Accordingly the documents were presented to you for registration. In our respectful opinion you have no legal right to request the return of the documents nor do you have any legal right to cancel any certificate endorsed by you thereon. Our client company relies upon section 107 (2) of the Companies Regulation.

As this matter is one of the utmost importance to our client involving very large sums of money you leave us with no alternative but to make an urgent application to the court.

The relevant documents will be served upon you as soon as possible."

To complete the introductory narrative, I shall refer to the statutory provisions which are relevant to the application. The application was lodged on 29 September 1986, so that the Companies Regulation Chapter 9 of the (Queen's Regulation) applied, even though this Regulation is now repealed by section 407 (1) of the Companies Act No. 12 of 1986, which came into operation on 27 October 1986. Nevertheless, it is common ground that the application is competent by virtue of the provisions of the Interpretation Act, No. 9 of 1981.

The subject matter of the application is a charge created by the Applicants with other parties, which comes within the ambit of section 104 of the Companies Regulation. section 104 requires that the prescribed particulars of the charge, together with the instrument, must be delivered to the Registrar for registration within 21 days of the creation of the charge. The Applicants were, in fact, one day late in complying with this requirement, but nevertheless the Respondent, through inadvertence, registered the charge and particulars, and affixed his certificate in pursuance of section 107 (2). The correspondence already quoted then followed.

The issue for determination is the validity or otherwise in the request made by the Respondent to the Applicant's lawyers for the return of the documents for cancellation of his certificate endorsed thereon. Section 107(2) states that the certificate shall be conclusive evidence that the requirements of this part as to registration have been complied with. The purpose of registration of a charge created by a company is to enable the Registrar to keep in respect of each company, a register of all charges so created, and he enters in this register the particulars specified in section 107 (1). The register is open to inspection by any person on payment of the prescribed fee. Finally, the only other statutory provision which has any bearing on the issue is section 110, which for the sake of convenience I shall append:

"s.110 The court, on being satisfied that the omission to register a charge within the time required by this Regulation or that the omission or mis-statement of any particular with respect to any such charge or if a memorandum of satisfaction was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended, or, as the case may be, that the omission or mis-statement shall be rectified."

It will be noted that the power to rectify any omission or mis-statement of the particulars entered in the register maintained by the Registrar, or the power to extend the time for registration in order to validate a charge which would otherwise be void is vested in the court, not in any other body or person.

The certificate given by the Registrar under Section 107(2) is conclusive evidence that the requirements as to registration have been complied with; consequently, it would seem to fly in the face of logic to say that the certificate can thereafter be cancelled in the event of some error coming to light when there is no power conferred on the Registrar so to act. There is a succession of English cases which support the view that once the Registrar has given his certificate he is functus officio; I will content myself with citing from two of them very brief extracts. The first is taken from re Yolland, Husson & Birkett Ltd, Leicester v. Yolland, Husson & Birkett Ltd (1908) 1 ch. 152, in which Farwell, L.J. said at p. 171: "But, however, that may be, the learned registrar has given his certificate in that form, and in my opinion the Act makes it final, and it would be quite shocking to my mind to say that a mistake, if it be a mistake, in the registration in such a matter should invalidate these charges which the debenture holders have obtained. If there be a mistake, it is the mistake of the officer of the court, and certainly the claim put forward now lacks any semblance of merit". The other case is National Provincial and Union Bank of England v. Charnley [1924] 1 KB 431, in which Scrutton, L.J. said at p. 448 "For these reasons I take the view which was taken in re Yolland, Husson and Birkett Ltd and Cunard steamship Co- Ltd v. Hopwood that the giving of the certificate by the registrar is conclusive that the document creating the charge was properly registered, even if in fact it was not properly registered."

What the English cases show, and although of only persuasive authority but of considerable weight even so, is that where there is a defect, whether in the prescribed particulars or an incorrect date of the creation of the charge, the certificate given by the Registrar cures that defect. That principle should, in my opinion, be applied likewise where a charge is delivered to the Registrar beyond the time limit of 21 days, yet he nevertheless gives his certificate.

Mr Durkin did not oppose the application. The only point he takes is in regard to costs, contending that although the Respondent did err in giving his certificate, so also did the Applicants, who instead of presenting the documents should have applied to the court for an extension of time under section 110. That proposition is fallacious because these proceedings stem entirely from the Respondent's letter of 24 September 1986, in which he implied he had powers which in fact he did not possess.

There will be a declaration accordingly in terms of paragraph 1 (a) and (b) of the relief sought in the originating Summons. The Applicants are awarded costs of the application, which, failing agreement, will be taxed by the Chief Registrar of the Court.

10 November 1986

M.J.R. COAKLEY
ACTING JUDGE