The Gazette 1992

GAZETTE

MAY 1992

be authenticated, a procedure usually involving the Irish Embassy in the company's country of origin. If necessary, documentation must be translated. Where a registered company creates a registrable charge, then the requisite particulars must be registered with the Registrar of Companies on a Form No. 8E. Such charges are then noted on the regular Companies Registration Office (CRO) register of charges, by reference to the number assigned to it on its registration as an external company. The "Slavenburg File": Unregistered Foreign Companies A foreign company which has an established place of business in the State, but does not register as it is required to do under S.352 (1) Companies Act, 1963 is obliged to forward particulars of the charge which it creates to the CRO in the same way (by using a Form No. 8E) as a company which has registered. This was first decided in England in NV Slavenburg's Bank -v- Intercontinental Natural Resources Ltd. et al [19801. 1 All ER 955. Here a company which was incorporated in Bermuda had an established place of business in England and created charges over its assets which were subsequently came to be reposited in England. The company was not registered in England nor were the particulars of the charges registered with the CRO. The property in England was later sold, and the proceeds of sale paid into a joint account in the names of the parties' solicitors. Sometime after, a Bermudian court wound up the company. Inter alia, it was argued that the charges over the property situated in England were void for non-registration. It was held by Lloyd J that although there was no formal method for registering such charges, because the foreign company did not have a company number which it would have were it registered on the external register, particulars of such charges were required to be delivered to the Companies Registration Office and

where such were not delivered, they would be void as against a liquidator or creditor. Because they could not be formally registered was not a sufficient reason for failing to deliver particulars to the Registrar. In the words of Lloyd J: "The fallacy in the argument lies in regarding registration of the charge under [Part IV] as a condition precedent to its validity. It is clear both from the language of [S.99] . . . that it is delivery of particulars of the charge, together with the instrument (if any) by which it is created or evidenced that saves that charge, and not its registration. In the National Provincial Bank [(1924) 1 KB 431 at 447] case Scrutton LJ said, after referring to the language of the section: "That makes the avoidance dependant on the neglect to send in the particulars. The neglect to register the charge will not make it void". . . So far as I am concerned, it seems to follow that the bank could have preserved the validity of its charges by delivering particulars within 21 days, despite the unwillingness of the registrar to register the charge without prior registration by the company under [Part IV]. In those circumstances. . . . [t]here is nothing certainly in [S.lll] to suggest that the operation of that section is dependent in any way on the company having registered under [Part XI i.e. as an external company], and I am unwilling to imply any such limitation." So, it was thus the law in England, and continues to be the accepted practice in Ireland, that where a foreign company which has an established place of business in the State, but which has not registered as an external company under Part XI of the Companies Act, 1963 creates a charge over property, real or personal, situate in Ireland, the company, or the holder of that charge, must deliver particulars of that charge of the Irish Registrar of Companies. Failure to do so will render that charge invalid. 6 Slavenburg Reversed in England Ironically, it should be noted that the decision in Slavenburg has now been reversed by the British parliament enacting Schedule 15 to the Companies Act, 1989, which inserted new Sections 703A to 703N into the Companies Act, 1985. The effect of these changes is that a foreign company which has not applied to be a "registered overseas

company" is not obliged to register charges on its property in Great Britain, notwithstanding that it may have established a place of business there. 7

. . . No tw i t h s t and i ng that the par l i ament of the coun t ry wh i ch gave birth to Slavenburg has s e en fit to reverse its imp l i ca t i ons, they wou ld appear to c on t i nue to be law . . . in Ireland.

Companies Registration Office Practice in Ireland

Notwithstanding that the parliament of the country which gave birth to Slavenburg has seen fit to reverse its implications, they would appear to continue to be the law, and certainly the practice, in Ireland. Thus, charges created in such circumstances must still be delivered to the Irish CRO. 8 However, what is the Registrar and his staff to do in such circumstances? After all, the Registrar does not have any way of registering such charges in that he does not have an Irish reference number for the company. The plight of the Registrar was addressed in Slavenburg where Lloyd J said: "Before leaving the point, I should say that counsel for the defendants expressly disclaimed any criticism of the registrar's current practice. Nor would I, myself, wish to criticise it in any way. His reasons for insisting on the company first registering under [Part XI] are clear enough. But they cannot affect the outcome of this case." So what is the Registrar to do? The answer is that following the lead set by the English Registrar, the Irish Registrar has opened, a so-called, "Slavenburg File", in which he notes that he has received delivery of the required particulars. 9 As was the case in England, a letter will issue to the effect that delivery of the particulars has been received, but because the company has not been registered as having an established place of business in the State and is thus not registered as an external company, registration of any charge created by

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