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GAZETTE
JUNE 1992
determining whether or not a
company has an established place of
business in Ireland could be, does it
make sense to serve documents on
the company at that place?
In summary, some of the factors
which will go towards the finding by
a court that a foreign company has
an established place of business
include:
• having a specified or identifiable
place at which it carries on
business although the company
does not necessarily have to own
or lease a premises,
• having a visible sign or physical
indication that the company is
connected to a place,
• that the company's physical
connections are more than merely
fleeting or transitory,
• that there is a degree of
permanence and ensconcement
about that place of business,
• a regularity of business being
conducted there by the company.
Clearly, any precise definition of
what is meant by established place
of business is fraught with difficulty,
the problem being analagous to
attempting the perennial definition
of an elephant. However, occasions
arise when the courts must decide
this question, and the only way this
can be done is by weighing all the
evidence and circumstances of the
individual case.
The mere fact that a foreign
company has an agent who is
present in Ireland does not mean
that it will be deemed to have a
"place of business" in the State:
Donovan -v- North German Lloyd
Steamship Co
[1933] IR 33.
12
Where the Irish Business is Only
Incidental to its Main Business
It has also been decided that a
company will be deemed to have an
established place of business even if
the business carried on there is only
incidental to its main business. This
was decided in the case of
South
India Shipping Corp Ltd
-v-
Export-
Import Bank of Korea
[1985] 2 All
ER 219 where Ackner J said of the
facts
"The defendant bank are an export-
import bank, not a high street bank.
They have both premises and staff within
the jurisdiction. They conduct external
relations with other banks and financial
institutions. They carry out preliminary
work in relation to granting or obtaining
loans. They seek to give publicity to the
foreign bank and encourage trade
between Korea and the. United Kingdom,
and they consult with other banks and
financial institutions on the usual
operating matters. They have therefore
an established place of business within
Great Britain and it matters not that
they do not conclude within the
jurisdiction any banking dealings with
the general public as opposed to other
banks or financial institutions".
This has been recently restated in the
case of
Rome
-v-
Punjab National
Bank (No 2)
[1989] BCLC 328 where
Hirst J noted that the Court of
Appeal had held in the
South India
case
" . . . that it was sufficient to show the
establishment of an office in Great
Britain where activities incidental to the
main business of the company were
carried on, and that it was unnecessary
to show that a substantial part of its
business was conducted within the
jurisdiction."
In the
Punjab National Bank
case a
bank which was registered on the
external register ceased to do
business in the UK. A hiving down
operation began and while the
company did no new business in
the UK, two employees remained
to tie up "loose ends". These two
persons were registered as persons
upon whom proceedings could be
served, satisfying the requirements
of the English equivalent to our
Part XI. However, notice was
served on the registrar of companies
that after a certain date the
company would cease to have a
place of business in the UK. He
responded by closing the company
file. Even though this had been
done proceedings were served on one
of the employees, and this was held
to be a valid service. Incidental to
this it was also held that at the
time of service of the writ, the
company did not have an established
place of business. As to the
determination of this question, Hirst
J said:
"In my judgement, the correct
approach is that adopted in the
South
India
case, namely to examine the actual
activities which are revealed on the
evidence in order to decide whether or
not they qualify.
Examining those described above, 1 have
no hesitation whatsoever in concluding
that all but the last are no more than
loose ends which needed to be tied up
after the cessation of business; and the
last, which . . . involves no more than
maintaining a point of contact with
English solicitors, does not in my
judgement constitute a business activity
being carried out here by the defendants
at the relevant date."
To Register or Not to Register?
A particular problem arises for the
solicitor acting for a lending
institution where a foreign company,
without any property or established
place of business in Ireland, borrows
money for the express purpose of
acquiring a business premises in
Ireland, which may well become in
the future its established place of
business. Is one to insist upon
registration of the charge, if indeed
the operative date for determining
whether a company has an
established place of business is the
date on which the charge is created?
This point was considered in
Re
Oriel Ltd
where Oliver LJ said
" . . . It is difficult to see how, when
premises are acquired for the first time
and immediately charged, the established
place of business which the company has
can be the premises charged. There is, in
fact, no evidence that the company had
any connection with those premises prior
to the charge beyond being designated,
prior to its incorporation, as the
intended owner."
It is submitted that where there is
any doubt, it is best to insist upon
registration rather than leave oneself
open to a court finding that an
unregistered charge ought to have
been registered, and is consequently
void.
Proposals for Reform
It should be noted that at present,
an "established place of business" is
a basic prerequisite to the
requirement that the particulars of a
charge created by a foreign company
must be delivered to the Companies
Registration Office. So, only where a
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