9911796707
TMI Blog1970 (5) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... mall compass. The company carried on a construction business with its registered office at Potters Bar and was at the end of 1963 in financial difficulties and heavily indebted to its then bank, the National Provincial, which was unwilling to extend further credit. The company occupied and carried on its business from a factory called Caxton Works which was the sole property of a company called Arnold Drive Ltd. (which I will call "A.D.I.") the whole share capital in which was owned by the managing director of the company, Mr. C.L. Nye, and his wife. His son, Peter Nye, was a director of the company as was Mr. Tench, a solicitor's managing clerk who was also secretary. Mr. Nye senior was about to retire and desired that his son should assume responsibility and it was agreed between the two Nyes, representing the company and A.D.I., that in order to finance the company A.D.I, should sell to it the Caxton Works at a price of GBP36,700 of which however only GBP15,000 should be paid on completion, the rest remaining until the Caxton Works should be sold. The National Provincial Bank was not willing to give further credit and accordingly the company applied to the bank, the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the sum due to clear the indebtedness to the National Provincial Bank and the other for GBP15,000 being the agreed part of the purchase money immediately payable to A.D.I. for the factory. I think it inevitably follows from this that the date of the creation of the security, that is to say, the date when the charge became effective, was March 9, 1964, and if necessary I would so hold. It remained to complete the transaction, first by stamping the documents, next by registering the two transfer deeds from A.D.I. to the company with the Land Registry and third by registering the charge at the Companies Registry in accordance with section 95 of the Companies Act, 1948. The stamping was effected by March 19, but at this point there was a contretemps which has been the source of all the subsequent trouble. According to Mr. Brand he sent the documents to be stamped on March 10 still undated and they were returned duly stamped on March 19, but at this point they were in some way mislaid for a time, though for how long does not appear, for Mr. Brand, after procuring the Land Registry fees on April 9 from the bank, did nothing about it until in June the bank manager telephoned to ask ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for any statement about the date of creation of the charge and this is odd because the similar form 47 prescribed under the Act of 1900, where this legislation started, does have as its first heading "Date of the creation of the instrument." I cannot see for present purposes that there is any materiality in the change. The company is obliged under section 95 to supply to the registrar both the prescribed particulars of the charge and the instrument, if any, by which the charge is created so that in the case of a charge created by an instrument the registrar can check the particulars by the instrument itself. If however a charge is created by parole and not by an instrument he has no such recourse and must accept what the particulars disclose which, so far as date is concerned, will ordinarily be the date which the instrument bears, that being the prima facie rule although of course it need not be the fact. Still there remains the obligation under section 98 to enter in the register particulars of the date of the creation of the charge and this must of necessity be one of the prescribed particulars. Now the particulars in the present case stated June 18 as the date of the creation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in order to ascertain whether they or any of them precluded him from relying on his own opinion and considered that they did not, and this has been the main point of the appeal. The first case on the subject seems to be Yolland's case (In re Yolland, Husson and Birkett Ltd. [1908] 1 Ch. 152). This was a decision of a powerful Court of Appeal under the corresponding section of the Act of 1900 and the headnote reads as follows: "The certificate of the Registrar of Joint Stock Companies . . . is conclusive evidence that all the requirements of the section as to the registration of debentures have been complied with, and where such a certificate has been granted the court will refuse to go into the question whether such requirements have in fact been complied with." The argument for the liquidator there was that every one of a series of debentures required registration and not merely one of the series and this was implicitly rejected by the Court of Appeal. Farwell L.J. said, at p. 161 : "...I will only add that, so far as I can see, the registrar has apparently applied his mind, after hearing arguments, to the construction of subsection 4, and has - he may be right or he may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertifying the due registration of all the charges created by the instrument, including that of the chattels, and that it was conclusive evidence of the due registration of the chattels none the less because the register in omitting to mention them was not merely defective but misleading." I find Scrutton L.J. saying this, at pages 447-448 : "So that there is a possibility, first, of the company making an error in delivering the particulars, and secondly of the registrar making an error either in omitting to enter something specified in the particulars or in misunderstanding the instrument of charge delivered to him with the particulars; and for that reason one can well understand a clause being nut in favour of the grantees of the charge, who are not the persons whose duty it is to deliver the particulars, that if the registrar gives a certificate that all is m order that certificate shall be conclusive evidence that the requirements as to registration have been complied with. The result of the legislation as it appears to me is that if the document sent in for registration does contain a charge on particular property, even if the company sending it in has misstated that charge, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition of the validity of the charges and the certificate of the registrar once delivered was conclusive that the necessary preliminaries for registration had been complied with and that the prescribed particulars had been delivered to him. There again the omission was an omission by the mortgagees as to the amount secured and they were entitled nevertheless to rely upon it for the full amount. In In re Eric Holmes ( Property) Ltd. [1965] Ch. 1052 ; 35 Comp. Cas. 811 Pennycuick J. held that even though the particulars delivered to the registrar with the application incorrectly stated the date of the charge, the certificate once granted was conclusive evidence that the Act had been complied with. That last case is exactly in point here but of course is not binding upon us. The judge merely said that the case bore a superficial resemblance to the present but I confess I do not follow him in that particular. In the Eric Holmes case (supra). Mr. Slade appeared for the liquidator and argued in the same sense as he argues here, namely, that while the certificate is conclusive as to the correctness of its contents it is not conclusive as to the date of its creation and that Charnley ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate is no less conclusive as to date than as to amount and to hold otherwise would frustrate the whole purpose of the legislature. As to the maxim on which the judge decided the case, namely, that no man may take advantage of his own wrong I refer to In re London Celluloid Co. [1888] 39 Ch. D. 190 in which I find the following passage from Bowen L.J.'s judgment at page 206 : "The maxim that no man can take advantage of his own wrong must be carefully considered, and expressed in more precise terms, before it can be safely applied. It means that a man cannot enforce against another a right arising from his own breach of contract or breach of duty. The observations of Baron Bramwell in Hooper v. Lane [1856] 6 H.L. Cas. 443, 460, 461 on this subject are very instructive." Then Bowen L.J. inquires "What is the wrong here?" and he goes on in the middle of p. 206 : "To return to the maxim that a man cannot take advantage of his own wrong, we can see the point where it ceases to be applicable. Construing the maxim as I have said, the first question is, has the right to demand payment in cash been acquired through the breach of contract in question? Was it through non-registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortgage or charge," and thereunder the solicitor put "June 18, 1964," which was indeed the date it bore. Under earlier legislation the form required the date of creation of the charge to be stated in the particulars presented. Section 98 (1), however, in prescribing the form of the register to be kept does specify that the date of creation of the charge is to be inserted by the registrar. This was given by the registrar as June 18, 1964, and on July 3, 1964, he certified that a charge dated June 18, 1964, was on July 3, 1964, registered pursuant to section 95. The question debated is the effect in the above circumstances of section 98 (2), which provides that the registrar's certificate "shall be conclusive evidence that the requirements of this part of this Act as to registration have been complied with." Part III of the Act is cross-headed "Registration of charges with registrar of companies. "Section 95 (1) provides that a charge shall be void as a security against the liquidator and any creditor of the company unless certain steps are taken. Those steps are the delivery of the prescribed particulars (form 47) of the charge, together with the instrument by which the charge is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eking to enforce his judgment against the movable plant. Bankes L.J. at p. 443 refers, I think quite accurately, to the section as "requiring performance of the conditions necessary to prevent its (i.e. the charge's) avoidance" ; and in stating: "Those conditions are that the prescribed particulars and the instrument by which the charge is created shall be delivered to the registrar within 21 days" Atkin L.J. stated in general terms at p. 452 : "It appears to me to be the true view that when once such a certificate has been given by the registrar in respect to a particular specified document which in fact creates a mortgage or charge, it is conclusive that the mortgage or charge so created is properly registered, even though the particulars put forward by the person applying for registration are incomplete, and the entry in the register by the registrar is defective." In In re Mechanisations ( Eaglescliffe) Ltd. [1966] Ch. 20 ; [1965] 35 Comp. Cas. 478 the particulars delivered by the chargee did not correctly state the payments secured by the charge; nor did the consequent entries on the register; nor did the certificate. The liquidator did not seek to avoid the whole security, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act," and no charge can after 21 days be so registered unless time is extended under section 101. It was accepted, however, that a charge of which erroneous particulars were given would be one registered in pursuance of the Act; and further, I observe, that section 101 is not confined to extension of time but permits also correction by the court of omissions or mis-statements. It was pointed out for the liquidator that error in the particulars or the registration could be observed by the registrar or by a creditor on reading the instrument, but a "false" date for the charge, which prima facie would be the date of the creation of the charge, would not be detectable by him or by a person considering whether to give credit or further credit to the company. This is of course true, but it is also true that the registrar in a case (envisaged by the Act) of a charge without an instrument would be in the same position. Moreover, it was said, the registrar in the present case had available to him as a ground for inquiry the date on the revenue stamps, an expense not commonly accepted before an instrument is effective. For my part I am not able to accept the arguments for the liqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence. It was also suggested that this is a case for rectification under section 101 of the Act by deleting the whole registration. In my judgment this is not available under section 101. Under that section the court may rectify an omission by adding, or rectify a mis-statement by correcting. It cannot delete a whole registration. The authority which says that a note of payment off of a charge may be deleted is nothing to the contrary. Indeed the lack of ability under section 101 to expunge a registration of a charge is strong support for the contrary view to that advanced by the liquidator. I turn last to the ground upon which Plowman J. in fact decided the case against the bank. This was that the bank (through the solicitor) put the wrong date on the charge, and that if the correct date had been put on the charge, and that if the correct date had been put on it of March 9 the registrar would not have registered the charge nor of course issued a certificate. His view was that the law, according to Broom's maxim, forbade a man to make a profit from his own wrong, and that the application of this maxim prevented the bank from relying on the statutory provision that made the ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mr. Slade, for the liquidator, while relying also upon that ground, submitted as his first contention that section 98 has no application whatever where the particulars required by section 95(1) have been delivered out of time; for in such a case, he contends, the purported registration and the purported certificate are complete nullities. The essence of his argument is that on the wording of section 98 (1) and (2) the registrar has no jurisdiction to register a charge if the particulars have been delivered more than 21 days after the date of the creation of the charge. For this submission to succeed, with its startling implications as to the limitations on the reliance which can be placed on entries in the register, it would be necessary to distinguish the decision of this court in Charnley's case (supra). Mr. Slade seeks to make such a distinction. In Charnley's case (supra) he says, the defect was that the particulars supplied were inaccurate ; they did not accurately reflect the contents of the charge. In the present case the defect is in respect of the time limit. It is, he says, a condition precedent to the validity of the charge - to the registrar's jurisdiction to regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy requirement of section 98(1) is a condition precedent, in the sense put forward on behalf of the liquidator, to the jurisdiction of the registrar to register the charge or to grant a certificate. The ground on which, the judge decided in favour of the liquidator is that, if the bank were to be allowed to rely upon the conclusiveness of the certificate, it would mean that the bank would be taking advantage of its own wrong. The "wrong," it is said, is the dating by Mr. Brand, as agent for the bank, of the deed of charge with the date June 18, whereby the registrar was misled into thinking, that the date of the operation of the charge was June 18, and that the particulars had been delivered within the 21 days stipulated in section 95(1). In my view, the decision in Charnley's case (supra) is once again fatal to the argument. If what happened in the present case were properly to be regarded as "taking advantage of one's own wrong," it would equally have been so in Charnley's case (supra) the chargee, whose erroneous particulars had resulted in an error in the entry in the register, would have been precluded from relying on the certificate; and the decision would necessarily have ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
