Legal Principles and Key Points
- In the case of R v Registrar of companies ex parte central bank of India 1986 QB 1114 it was held that under s.98(2) of the Tribunals and Inquiries Act 1971 the registration of a charge was conclusive and not susceptible to judicial review.
Facts of the Case
- In 1984, an application to the registrar of Companies in accordance with section 95 of the Companies Act 1948, to register a charge created on 9th February 1984 was made.
- The application, on an incomplete statutory form was accompanied by copies of the documents by which the charge was alleged to have been created and was originally rejected by the registrar.
- In March 1984 a petition was presented for the compulsory winding up of the company whose assets where the subject of the charge, the applicant bank being one of the company’s unsecured creditors.
- In August 1984, on further consideration following representations by the charge, the Registrar of Companies registered the charge and issued a certificate of registration pursuant to section 98(2) of the Act of 1948.
- Being aware of the registration, the company moved for judicial review of the registrar’s decision to register the charge.
- In November 1984 whilst the application was being heard, an order for the compulsory winding up on the company was made on the petition.
- The applicant bank was initially a respondent to the company’s application but obtained leave to join in the company’s application which leave was varied to allow it to file a separate application for judicial review.
- The judge at first instance held that notwithstanding the conclusiveness of the register’s certificate as to compliance with the statutory requirements for registration in ordinary litigation provided for by section 98(2) of the Act of 1948, the issue of certificate was susceptible to judicial review and he found that the prescribed particulars of the charge had not been delivered within the 21 day period provided by section 95(1) and made orders on the applications of both the applicant bank and the company, quashing the registration of the charge and requiring the charge to pay the company’s and the bank’s costs.
- The charge appealed.
Issues in R v Registrar of companies ex parte central bank of India 1986 QB 1114
- The issues in this case relate to whether “instrument” could be held to be referred to in the original and not a copy.
- Is the registration of the charge susceptible to judicial review.
Held by Court of Appeal
- Appeal dismissed.
Slade LJ
- Slade held that in all the circumstances, at all times after the presentation of the winding up petition, when the winding up commenced and realistically, the statutory scheme for distribution of the company’s assets among its creditors came into operation , the applicant bank had a sufficient interest to give it a locus standi to apply for judicial review of the decision by the Registrar of Companies to register the charge and issue a certificate of registration.
- On appeal by the Registrar of Companies:
- Held, allowing the appeal, that “instrument” in section 95(1) of the Companies Act 1948 referred to the original and not a copy; that, accordingly, in deciding to register the charge in default of delivery of the original documents by which the charge was created or evidenced, the Registrar of Companies had made an error of law; but that section 98(2) of the Act of 1948 precluded the court, notwithstanding that the proceedings were proceedings for judicial review, from considering evidence adduced to show that the requirements as to registration had not been complied with; that the application of section 98(2) was not affected by the provision in section 14(1) of the Tribunals and Inquiries Act 1971 empowering the High Court to review an order or determination specifically excluded from the court’s supervisory jurisdiction by pre-1958 legislation; and that, since the evidence as to non-compliance with the statutory requirements was inadmissible, there was no case for quashing the certificate of registration.
- “The reasoning, however, in the line of authorities referred to, which has led the courts to conclude that an unsecured creditor has no interest to object to the late registration of a registrable charge which has not been registered in time, has been that, despite the non-registration of the charge, it was always possible for the company to pay off the amount intended to be secured by the charge, or to grant the holder of the charge a confirmatory charge. That is so while the company is a going concern, but it ceases to be so when a winding up petition is presented. If a winding up order is made, the commencement of the winding up dates back to the presentation of the petition, and any disposition of the company’s property made, otherwise than by a liquidator, after the A commencement of the winding up, is void unless sanctioned by the court in the winding up proceedings: see section 227 of the Act of 1948. Moreover, on a winding up order being made, the statutory scheme for distribution of a company’s assets among its creditors comes into operation. “ p.48