Wee Care Ltd v Companies Registration Office

• Jurisdiction: Ireland
• Judge: Mr. Justice Robert Haughton
• Judgment Date: 02 October 2020
• Neutral Citation: [2020] IECA 266
• Date: 02 October 2020
• Court: Court of Appeal (Ireland)
• Docket Number: High Court Record Number: 2019/191 COS

BETWEEN/

WEE CARE LIMITED

APPELLANT

-AND -

COMPANIES REGISTRATION OFFICE

RESPONDENT

[2020] IECA 266

Haughton J.

Ní Raifeartaigh J.

Collins J.

High Court Record Number: 2019/191 COS

Court of Appeal Record Number: 2019/367

THE COURT OF APPEAL

Financial statements – Jurisdiction – Companies Act 2014 s. 366 – Appellant seeking an order revising/or correcting and/or rectifying a statutory financial statement filed with the respondent – Whether the High Court had jurisdiction to direct the respondent to replace a set of full financial statements which were filed in error with a set of abridged financial statements instead

Facts: The appellant, Wee Care Ltd, appealed to the Court of Appeal from an order of Allen J dated 2 July 2019 refusing to grant to the appellant the following reliefs sought in the Originating Notice of Motion: “1. An order pursuant to section 366 of the Companies Act, 2014 as amended, and/or an order pursuant to the inherent jurisdiction of the [High Court] revising/or correcting and/or rectifying the Statutory Financial Statement made by the Applicant for the Financial Year 2018 ending 30th April, 2018 and filed with [the respondent, the Companies Registration Office] on 22nd October, 2018, by means of the removal from the Register of certain information currently appended to such original Statutory Financial Statement. 2. If required, an Order for the making effecting [sic] of such intended revision, correction and/or rectification by means of a Supplementary Notice to the said Statutory Financial Statement pursuant to Section 366(3) of the Companies Act, 2014, as amended. 3. If required, an Order giving Directions as to the making of any necessary consequential alterations to the Statutory Financial Statement made by the Applicant for the Financial Year 2018 ending on 20 April 2018 as this Honourable Court deems fit and meet in the circumstances, including the [sic]. 4. Such further or other Order as this Honourable Court deems fit and meet.” In the Notice of Appeal the appellant raised four grounds for asserting that the trial judge erred in law: (1) in adopting an overly restrictive or literal interpretation of s. 366; (2) alternatively, in failing to adopt a purposive approach to the interpretation of s. 366(1) such as to permit the appellant to revise and/or correct and/or rectify the filing in circumstances where the appellant has “through inadvertence and/or mistake failed to take advantage of the exemptions provided for him in s.352 of the Companies Act, companies”; (3) that in the absence of an express provision allowing revision the High Court judge failed to remedy a procedural injustice with which the court had inherent jurisdiction to do, “particularly where the Respondent consents to being bound by an Order”; and (4) that the trial judge erred in failing to invoke the inherent jurisdiction of the Court to correct the procedural injustice.

Held by Haughton J that the three cases in 2018 referred to by Dr McFadden where s. 366 was referenced in body of the court order, and other cases where s. 366 was referenced in the title, were not good precedents insofar as the orders made relied on that section. The appellant’s arguments based on s. 366 were in Haughton J’s view unstateable and must fail. Haughton J did not consider that any inherent jurisdiction that might exist could possibly extend to the granting of the relief sought by the appellant. Accordingly, Haughton J held that it was not necessary to decide definitively whether there is an inherent jurisdiction to rectify, or the parameters within which it might be exercised. In Haughton J’s view that was a decision best left over to a case with appropriate facts. Haughton J held that if there was an inherent jurisdiction in the court to rectify the register, the appellant’s case did not meet the threshold that might reasonably be said to apply, and this appeal must be dismissed.

Haughton J proposed making a costs order that the appellant pay 50% of the costs and expenses of the respondent, to be agreed or in default of agreement to be adjudicated by a Legal Costs Adjudicator.

Appeal dismissed.

JUDGMENT of Mr. Justice Robert Haughton delivered on the 2nd day of October 2020

Introduction

1 This appeal concerns whether or not the High Court has jurisdiction to direct the Companies Registration Office (“CRO”) to replace a set of full financial statements which were filed by a small company in error with a set of abridged financial statements instead, whether pursuant to s.366 of the Companies Act 2014 or pursuant to its inherent jurisdiction. It is an appeal from an order of Mr. Justice Allen dated 2 July 2019 refusing to grant to the appellant the following reliefs sought in the Originating Notice of Motion -

“1. An order pursuant to section 366 of the Companies Act, 2014 as amended, and/or an order pursuant to the inherent jurisdiction of the [High Court] revising/or correcting and/or rectifying the Statutory Financial Statement made by the Applicant for the Financial Year 2018 ending 30th April, 2018 and filed with the Respondent on 22nd October, 2018, by means of the removal from the Register of certain information currently appended to such original Statutory Financial Statement.

2. If required, an Order for the making effecting [sic] of such intended revision, correction and/or rectification by means of a Supplementary Notice to the said Statutory Financial Statement pursuant to Section 366(3) of the Companies Act, 2014, as amended.

3. If required, an Order giving Directions as to the making of any necessary consequential alterations to the Statutory Financial Statement made by the Applicant for the Financial Year 2018 ending on 20 April 2018 as this Honourable Court deems fit and meet in the circumstances, including the [sic],

4. Such further or other Order as this Honourable Court deems fit and meet.”

2 The evidence before the High Court was set forth in a short affidavit of Mr. Mike Nangle sworn on 29 April 2019. Mr. Nangle avers that he is managing director of the firm of accountants with responsibility for submissions to the CRO on behalf of the applicant company, and he simply deposes as follows:

“4. I say that incorrect financial statements for the Applicant were filed in the Companies Registration Office on the 22nd October, 2018. I say that as a result of this error information was included within the financial statement which was not required as prescribed under Section 352 of the Companies Act, 2014, where certain information for small and medium sized companies are exempt from filing certain information.

5. I say that the Applicant desires removing this information from the Companies Registration Office on the grounds that it is not required or prescribed by the Companies Act, 2014 and is of a commercially sensitive nature.”

The financial statement in question and the relevant CRO filing and record were not exhibited, and there was no fuller explanation of the nature or extent of the information the filing of which would have been exempted, or of the error that led to its inclusion in the financial statement and its filing in the CRO.

3 In correspondence in June 2019 Mr. Matthew McDonagh Higher Executive Officer on behalf of the CRO to the applicant's solicitor indicated that the CRO had no objection to the application. However in Mr. McDonagh's letter of 13 June 2019 he stated:

“Please note that section 366 of the Companies Act 2014 is for voluntary revision of the financial statements and does not provide for the removal of the documents from the register”.

4 The appellant then issued the originating notice of motion seeking the reliefs described above. The trial judge (Allen J) heard the application over two days, hearing further submissions on the inherent jurisdiction of the court on the second day. In an ex tempore judgment delivered on 2 July 2019 he refused the orders sought firstly because he was not satisfied that s.366 of the Companies Act, 2014 conferred on the court the jurisdiction to make the orders sought, and secondly because he was not satisfied that the court had inherent jurisdiction to make those orders.

5 In the Notice of Appeal the appellant raises four grounds for asserting that the trial judge erred in law -

1. In adopting an overly restrictive or literal interpretation of s.366; (Ground 1)

2. Alternatively, in failing to adopt a purposive approach to the interpretation of s.366(1) such as to permit the appellant to revise and/or correct and/or rectify the filing in circumstances where the appellant has “through inadvertence and/or mistake failed to take advantage of the exemptions provided for him in s.352 of the Companies Act, companies” (Ground 2);

3. That in the absence of an express provision allowing revision the learned High Court judge failed to remedy a procedural injustice with which the court had inherent jurisdiction to do, “particularly where the Respondent consents to being bound by an Order” (Ground 3); and

4. that the trial judge erred in failing to invoke the inherent jurisdiction of the Court to correct the procedural injustice (Ground 4).

6 A further ‘Letter of No Objection’ dated 1 October 2019 was written by Mr. McDonagh on behalf of the CRO in respect of the appeal, “strictly conditional on the basis that no ORDER as to Costs is made against the Registrar of Companies and/or the CRO in this matter”.

7 The appellant filed written submissions dated the 5 December 2019 in support of the four grounds of appeal.

8 In response to these Dr. David McFadden, Legal Advisor in the CRO, wrote at some length to the appellant's solicitors. Although the CRO was not formally represented before this court at its first hearing on 27 January 2020 Dr. McFadden appeared as a courtesy to the court and this letter was produced (without objection) because it sets out the CRO attitude to this application and...