1970 (5) TMI 49 - DSC - Companies Law

Summary

Issues Involved:
1. Priority between creditors of a company in liquidation.
2. Validity of a charge not registered within the statutory period.
3. Conclusiveness of the Registrar's certificate under the Companies Act, 1948.
4. Application of the legal maxim that no man can take advantage of his own wrong.

Detailed Analysis:

1. Priority Between Creditors of a Company in Liquidation
The primary issue was the priority between creditors of a company, C.L. Nye Ltd., which went into liquidation on July 15, 1964. The liquidators of the company contested a charge held by Westminster Bank Ltd. (the bank), arguing that it was void against the liquidators and the general body of creditors because it was not registered within the 21-day period mandated by section 95 of the Companies Act, 1948.

2. Validity of a Charge Not Registered Within the Statutory Period
The charge in question was created on March 9, 1964, but was not registered until July 3, 1964. The liquidators argued that the charge was void as it was not registered within 21 days of its creation. The bank contended that the charge was created on June 29, 1964, when the company acquired the legal estate, and thus was registered within the statutory period.

3. Conclusiveness of the Registrar's Certificate
The court examined the Companies Act, 1948, particularly sections 95, 96, and 98, which deal with the registration of charges. The Registrar's certificate, issued under section 98(2), was argued to be conclusive evidence that all requirements of the Act had been complied with. The liquidators argued that the date of the creation of the charge was either February 28 or March 9, 1964, making the registration out of time. The bank argued that the certificate was conclusive and should not be questioned.

The court reviewed several precedents, including Yolland's case, National Provincial & Union Bank of England v. Charnley, In re Mechanisations (Eaglescliffe) Ltd., and In re Eric Holmes (Property) Ltd., which established that the Registrar's certificate is conclusive evidence of compliance with the registration requirements, even if there were errors in the particulars provided.

4. Application of the Legal Maxim that No Man Can Take Advantage of His Own Wrong
The judge initially ruled in favor of the liquidators, applying the maxim that no man can take advantage of his own wrong. The judge concluded that the bank, through its solicitor, misled the Registrar by dating the charge June 18, 1964, thereby making it appear that the particulars were delivered within the required 21 days.

However, the appellate court disagreed, stating that the certificate of the Registrar is conclusive and cannot be challenged on the basis of the bank's error. The court emphasized that the purpose of the certificate is to provide certainty and security to creditors relying on the registration of charges.

Conclusion:
The appeal was allowed, with the court holding that the Registrar's certificate is conclusive evidence that the requirements of the Companies Act, 1948, as to registration, have been complied with. The bank's charge was deemed valid against the liquidators and creditors, despite the registration being out of time. The court also rejected the application of the maxim that no man can take advantage of his own wrong in this context, as it would undermine the conclusiveness of the Registrar's certificate and the security it provides to creditors.