Company Number 1389920 v Registrar of Companies [2004] EWHC 60 (Ch)

Case No 7466 of 2003[2004] EWHC 60 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
IN THE MATTER OF COMPANY REGISTRATION NO. 1389920
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 19th January 2004
Before
MR PETER LEAVER QC
Between
COMPANY NUMBER 1389920ClaimantTHE REGISTRAR OF COMPANIESDefendant
Miss Rosalind Nicholson (instructed by Reed Smith) for ClaimantMr Jonathan Crow (instructed by The Treasury Solicitor) for DefendantHearing Hearing date: 17th December 2003
JudgmentMr Peter Leaver QC:INTRODUCTION
[1]There is before the Court an application in relation to the accounts of a company to which I shall refer in this judgment as “Company A”. The application has been listed, pursuant to the order of Mr Registrar Derrett made on the 25th November 2003, as “In the Matter of Company Number 1389920”.[2]The application before the Court is principally for an order permitting Company A to file revised accounts in substitution for the accounts and reports for the year to the 30th September 2002, which were filed with the Registrar of Companies (“the Registrar”) on the 30th July 2003.[3]The facts which give rise to this application can be briefly stated. Company A is one of two defendants in proceedings which are now being carried on in the Technology and Construction Court (“the TCC Proceedings”), having been transferred to that Court from the Commercial Court, by order of Colman J. made on the 18th July 2003.[4]In the TCC Proceedings the claimants are claiming, damages for breach of a contract to supply gas meters. The claimants contend that the gas meters supplied by the defendants were defective, and claim damages in the region of £25 million. The defendants deny that they are or were in breach of contract, and make a Part 20 claim against the claimants for breach of an implied term of the contract and/or for breach of duty.[5]The defence and Part 20 claim were served on the claimants on the 28th March 2003. On the 27th May 2003 the claimants made a Part 36 offer to settle the claim, and on the 21st July 2003, shortly after Colman J.’s order, the defendants made their own Part 36 offer, and made a payment into court.[6]Company A’s accounts were due to be filed by the 31st July 2003. They were duly filed on that day. One of the notes to the accounts which were filed contained two sentences (“the offending sentences”) which referred to Company A’s contingent liability in the proceedings, and to the Part 36 offer which had been made by the claimants to settle the claim. The evidence is that the note was included after discussion between Company A’s auditors and directors, but without taking any legal advice.[7]On the 18th November 2003 the claimants’ solicitors wrote to Company A’s solicitors saying that they had undertaken company searches of both Company A and the other defendant in the TCC Proceedings, and had seen the note in Company A’s accounts. In effect, the claimants’ solicitors demanded that revised accounts should be filed from which the offending sentences had been removed and in which no reference was made to the Part 36 offer.[8]Company A’s solicitors requested permission from the Registrar to file revised accounts omitting the offending sentences referring to the Part 36 offer. They were told that it would be necessary for them to make an application to the Court for permission. It is common ground that if the Registrar had refused permission, it would have been necessary for Company A to apply for permission to review judicially that refusal. However, no point was taken on behalf of the Registrar about the form of the present proceedings.[9]As I have stated above, the principal issue on this application is whether Company A should be given permission to file revised accounts omitting the offending sentences In fact, there are five different forms of relief sought on the Claim Form, but it is common ground that the whole application stands or falls on the decision as to whether permission should be granted to file revised accounts, from which the offending sentences have been deleted it is, therefore, to that issue that I now turn. REVISING ACCOUNTS[10]The right to prepare revised accounts (or a revised directors’ report) is provided by section 245 of the Companies Act 1985(”the Act”). The right, arises “if it appears to the directors of the company that any annual accounts of the company, or any directors’ report did not comply with the requirements” of the Act.[11]Section 245(2) stipulates that where copies of the previous accounts or report have been laid before the company in general meeting or delivered to the Registrar, the revisions shall be confined to the correction of those respects in which the previous accounts or report did not comply with the requirements of the Act, and the making of any necessary consequential alterations.[12]Section 245(3) gives the Secretary of State the power to make provision by regulations as to the application of the provisions of the Act in relation to revised annual accounts or a revised directors’ report, and section 245 (4) provides, inter alia, that the regulations may make different provision according to whether the previous accounts or report are replaced or are supplemented by a document indicating the corrections to be made, and may require the directors to take such steps as may be specified in the regulations where the previous accounts or report have been sent out to members and others, laid before the company in general meeting or delivered to the Registrar.[13]The right provided by section 245 of the Act is referred to as “voluntary revision”. That right is to be contrasted with the right of the Secretary of State, or of a person authorised by the Secretary of State, to make an application to the Court for a declaration that the annual accounts of the company do not comply with the requirements of the Act and for an order requiring the directors of the company to prepare revised accounts: see sections 245A-C.[14]In broad terms, the relevant requirements of the Act in relation to accounts are that the directors must prepare for each financial year of the company(a) a balance sheet as at the last day of the year, which gives a true and fair view of the state of affairs of the company as at the end of the financial year, and(b) a profit and loss account, which gives a true and fair view of the profit or loss of the company for the financial year: see section 226. In addition, the directors must prepare, for each financial year, a report containing a fair review of the development of the business of the company and subsidiary undertakings during the financial year: see section 234.[15]Thus, the right to make a voluntary revision, or for the Secretary of State to seek an order requiring revision, arises where it appears to the directors, or to the Secretary of State, as the case may be, that the filed accounts or directors’ report did not comply with the requirements of the Act, in that they did not give a true and fair view of the state of affairs of the company at the end of its financial year, or of its profit and loss for the financial year. THE APPLICATION TO REVISE THE ACCOUNTS[16]It was common ground at the hearing that the accounts that Company A had filed did give a true and fair view both of the state of affairs of Company A at the end of its financial year and of its profit and loss for that year. Miss Rosalind Nicholson, who appeared on behalf of Company A, made it clear, both in her Skeleton Argument and in her oral submissions, that, although the application was for permission to make a voluntary revision, it was not made pursuant to section 245, but was made “under the Court’s inherent jurisdiction”. That inherent jurisdiction was said to be a jurisdiction to maintain the integrity of the Court’s own proceedings, and to extend to safeguarding the confidentiality afforded to “without prejudice” offers and negotiations.[17]Mr Jonathan Crow, who appeared on behalf of the Registrar, submitted that there was no inherent jurisdiction. Limited liability companies are creatures of statute, and their existence and conduct is regulated by statute. Likewise, the Registrar is a creation of statute, whose functions and powers are laid down in and regulated by statute. Accordingly, there is no room for an inherent jurisdiction to regulate either a company’s or the Registrar’s conduct. The Court’s inherent jurisdiction is to control its own process, that is, to prevent its process being abused.[18]Before considering the submissions as to the existence or otherwise of an inherent jurisdiction to permit the revision of accounts, it is necessary to say a few words about Part 36 offers, and what is commonly referred to as the “without prejudice” rule. CPR PART 36 AND THE “WITHOUT PREJUDICE” RULE[19]CPR Part 36 is concerned with offers to settle, and payments into court made in accordance with the provisions of Part 36. It applies both to claims and counterclaims. CPR Part 36.19(1) provides that a Part 36 offer will be treated as “without prejudice except as to costs”, and CPR Part 36.19(2) provides that the fact that a Part 36 payment has been made shall not be communicated to the trial judge until all questions of liability and the amount of money to be awarded have been decided.[20]The mischief at which CPR Part 36 is directed is to prevent a Part 36 offer or payment becoming known to the trial judge before questions of liability and damages have been decided. But the prohibition is not absolute. For example, the fact that an offer or a payment has been made is commonly referred to in interlocutory proceedings: see Williams v Boag [1941] 1KB 1, per Goddard LJ.[21]Miss Nicholson’s submission was that a Part 36 offer was a step in settlement discussions, and, as such, it was to be treated as a “without prejudice” communication. It was, therefore, not to be disclosed or referred to, and should not have been referred to in Company A’s accounts. As to the last point, there was no dispute on the facts of this case: clearly, no reference should have been made to it. Mr Crow was not, however, prepared to go so far as to say that the fact that an offer to settle had been made, whether or not a Part 36 offer, should never be stated in the notes to a company’s accounts. There may be, he submitted, circumstances in which it would be necessary to refer to the offer in order that the accounts could give a true and fair view.[22]In support of her submission, Miss Nicholson referred to Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280, HL. In that case the plaintiffs had entered into a building contract with the Council, and had engaged another firm as subcontractors for certain parts of the work. The plaintiffs commenced proceedings against both defendants claiming a declaration that the Council was liable to reimburse them in respect of any sums which they might be found liable to pay to the subcontractors under the subcontracts, and an inquiry against both defendants in respect of the loss and expense which the subcontractors were entitled to recover from the plaintiffs. The plaintiffs and the Council reached a compromise after an exchange of “without prejudice” correspondence, and in consequence of the compromise the plaintiffs discontinued the action against the Council. The subcontractors sought disclosure from the plaintiffs of the “without prejudice” correspondence. The plaintiffs conceded that the correspondence might be relevant to the issues between them and the subcontractors, but refused to disclose it on the ground that it was privileged. The subcontractors applied for an order for specific discovery. His Honour Judge Esyr Lewis QC, sitting on official referee’s business, dismissed the application, but the subcontractors’ appeal was allowed by the Court of Appeal.[23]In the House of Lords Lord Griffiths delivered a speech with which Lord Bridge of Harwich, Lord Brandon of Oakbrook, Lord Oliver of Aylmerton and Lord Goff of Chieveley agreed. At page 1299C-G he said:
“The “without prejudice” rule is a rule governing the admissibility of evidence and is founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish. It is nowhere more clearly expressed than in the judgment of Oliver L.J. in Cutts v Head [1984] Ch 290, 306: “That the rule rests, at least in part, upon public policy is clear from many authorities, and the convenient starting point of the inquiry is the nature of the underlying policy. It is that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes, of course, as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should, as it was expressed by Clauson J. in Scott Paper Co. v. Drayton Paper Works Ltd. (1927) 44 R.P.C. 151, 156, be encouraged fully and frankly to put their cards on the table... The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability.”
The rule applies to exclude all negotiations genuinely aimed at settlement whether oral or in writing from being given in evidence. A competent solicitor will always head any negotiating correspondence “without prejudice” to make clear beyond doubt that in the event of the negotiations being unsuccessful they are not to be referred to at the subsequent trial. However, the application of the rule is not dependent upon the use of the phrase “without prejudice” and if it is clear from the surrounding circumstances that the parties were seeking to compromise the action, evidence of the content of those negotiations will, as a general rule, not be admissible at the trial and cannot be used to establish an admission or partial admission.” “That the rule rests, at least in part, upon public policy is clear from many authorities, and the convenient starting point of the inquiry is the nature of the underlying policy. It is that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes, of course, as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should, as it was expressed by Clauson J. in Scott Paper Co. v. Drayton Paper Works Ltd. (1927) 44 R.P.C. 151, 156, be encouraged fully and frankly to put their cards on the table... The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability.”[24]Later, at page 1301C, Lord Griffiths said:
“I would therefore hold that as a general rule the “without prejudice” rule renders inadmissible in any subsequent litigation connected with the same subject matter proof of any admissions made in a genuine attempt to reach a settlement. It of course goes without saying that admissions made to reach settlement with a different party within the same litigation are also inadmissible whether or not settlement was reached with that party.”
[25]Finally, at page 1305, he said:
“I have come to the conclusion that the wiser course is to protect “without prejudice” communications between parties to litigation from production to other parties in the same litigation. In multi-party litigation it is not an infrequent experience that one party takes up an unreasonably intransigent attitude that makes it extremely difficult to settle with him. In such circumstances it would, I think, place a serious fetter on negotiations between other parties if they knew that everything that passed between them would ultimately have to be revealed to the one obdurate litigant. What would in fact happen would be that nothing would be put on paper but this is in itself a recipe for disaster in difficult negotiations which are far better spelt out with precision in writing. If the party who obtains discovery of the “without prejudice” correspondence can make no use of it at trial it can be of only very limited value to him. It may give some insight into his opponent’s general approach to the issues in the case but in most cases this is likely to be of marginal significance and will probably be revealed to him in direct negotiations in any event. In my view this advantage does not outweigh the damage that would be done to the conduct of settlement negotiations if solicitors thought that what was said and written between them would become common currency available to all other parties to the litigation. In my view the general public policy that applies to protect genuine negotiations from being admissible in evidence should also be extended to protect those negotiations from being discoverable to third parties.”
[26]Miss Nicholson submitted that when Lord Griffiths said, at page 1301, that “as a general rule” the “without prejudice” rule renders inadmissible in any subsequent litigation connected with the same subject matter proof of any admissions made in a genuine attempt to reach a settlement, that general rule should be applied to the offending sentences. She also relied upon a passage in a Witness Statement by Mr Timothy Moss, on behalf of the Registrar, when, in describing the Registrar’s policy on retention of documents, he said:
“The Registrar will also periodically remove documents from the register that are not required to be filed: for example, tax computations are occasionally enclosed with accounts by mistake, and since they do not form part of the accounts (which is all that has to be filed) they can be removed without distorting the historical record.”
[27]It follows, submitted Ms Nicholson, that if a statement on a separate piece of paper can be removed, the revision of the accounts by the omission of the offending sentences should be permitted.[28]In Muller v. Linsley [1996] PNLR 74 Hoffmann LJ explained the “without prejudice” rule in the following terms: “The “without prejudice” rule has two justifications. First, the public policy of encouraging parties to negotiate and settle a dispute out of court and, secondly, an implied agreement arising out of what is commonly understood to be the consequences of offering or agreeing to negotiate without prejudice. In some cases both of those justifications is present, in others only one or the other.” (see page 77B-C)[29]A similar explanation for the rule was given by Robert Walker LJ in Unilever Plc v The Procter and Gamble Company [2000] FSR 344, at pages 352 and 357-8. In each of those cases the litigation was between the immediate parties, either to the negotiations or to the implied agreement. Thus, both the justifications for the “without prejudice” rule could have been present. In the present case, in which only one of the immediate parties either to the negotiations (and offer) or to the implied agreement is involved in the litigation, it is more difficult to see how the implied agreement justification could be relied upon, although Miss Nicholson did submit that the Court should exercise its “equitable jurisdiction to protect confidence, which extends to third parties”. It seems to me to be doubtful that a party which is itself in breach of an implied agreement can pray in aid its own breach to obtain equitable relief against a third party.[30]In my judgment, the analogy that Miss Nicholson attempts to draw in reliance upon Lord Griffiths’ speech in Rush & Tompkins is not well founded. Lord Griffiths was dealing with the question of whether “without prejudice” correspondence between two parties involved in litigation should be disclosed to another party in the same litigation. That issue would arise in the litigation in which Company A is involved if an application were made by the other defendant to the TCC Proceedings for disclosure of the “without prejudice” negotiations between Company A and the claimants in the TCC Proceedings. But the disclosure of the “without prejudice” correspondence which led to the making of the Part 36 offer is not the issue on this application.[31]Furthermore, the fact that pieces of paper can be removed from the register which do not form part of a company’s accounts does not, in my judgment, mean that an integral part of the accounts, namely, the notes to the accounts can be changed simply because they contain superfluous material.[32]In the event, therefore, I do not find that Rush & Tompkins provides any support for Miss Nicholson’s submissions.[33]In my judgment, there is a further, fundamental and insuperable difficulty in the path of this application. As I have said earlier in this judgment, limited liability companies are creatures of statute, and their existence and conduct is regulated by statute. The Court has had to consider submissions that there is an inherent jurisdiction to regulate companies’ affairs in relation to a number of specific provisions of the legislation affecting companies.[34]In Exeter Trust Limited v. Screenways Limited [1991 BCLC 888 the Court of Appeal was considering the question of the effect of section 401(2)(b) of the Act on a charge which was properly registered out of time, but where the register had been subsequently altered to delete the charge. It was held that the section made the certificate issued by the Registrar conclusive evidence that the charge had been validly registered, and that the subsequent removal of the charge from the register did not affect the validity of the original registration. It was accepted in that case that there was no power under section 404(2) of the Act to delete the registration, but it was submitted that the Court had an inherent power to the same effect. At page 895b-g, Nourse LJ, giving a judgment with which Stuart-Smith LJ and Sir Roger Ormrod agreed, said: “Although Mr McDonnell accepts that there is no power under s404(2) to delete the registration, he submits that the court has an inherent power to that effect. But an unlimited power of rectification is wholly inconsistent with the express provisions for a limited such power and the conclusiveness of the certificate. To allow for an unlimited power of rectification would be to destroy the very purpose of s 401(2)(b) as it has been held to be. I refer a fourth time to the judgment of Russell LJ in Re C L Nye Ltd who said ([1970] 3 All ER 1061 at 1073, [1971] Ch 442 at 474): ‘Indeed the lack of ability under s [404] to expunge a registration of a charge is strong support for the contrary view to that advanced by the liquidator.’ I think that it is conclusive support for the view that the court has no inherent power of rectification. In support of his submission Mr McDonnell referred to Re Calmex Ltd [1989] BCLC 299, [1989] 1 All ER 485, Heywood v BDC Properties Ltd (No 2) [1964] 2 All ER 702, [1964] 1 WLR 971, Calgary & Edmonton Land Co Ltd v Dobinson [1974] 1 All ER 484, [1974] Ch 102, Norman v Hardy [1974] 1 All ER 1170, [1974] 1 WLR 1048 and Northern Developments (Holdings) Ltd v UDT Securities Ltd [1977] 1 All ER 747, [1976] 1 WLR 1230. These authorities do not make the submission good. In Re Calmex Ltd it was held that the court has power to order the Registrar of Companies to remove from the register a winding-up order which ought not to have been made and was later rescinded. The other four cases were concerned with certain specific provisions of the Land Charges Acts 1925 and 1972 and their effect on the court’s inherent power to order the vacation of an entry on the land charges register. In none of the five cases was the court confronted with legislation which made provision both for a limited power of rectification and for the conclusiveness of a Registrar’s certificate.” ‘Indeed the lack of ability under s [404] to expunge a registration of a charge is strong support for the contrary view to that advanced by the liquidator.’[35]Miss Nicholson sought to distinguish Exeter Trust on the basis that, as she submitted, the decisive factor in that case was that section 401(2)(b) provided that the certificate was conclusive evidence of registration. I do not read Nourse LJ’s judgment in that way. In my judgment, Nourse LJ was making the general point that the fact that the Act contained a limited provision to permit rectification was inconsistent with the existence of an inherent jurisdiction. The fact that the certificate was expressly stated to be conclusive evidence was also inconsistent with the existence of such a jurisdiction.[36]In Heywood v. BDC Properties Ltd. [1964] 2 All ER 702 the registration of an action as a lis pendens by a non-counterclaiming defendant was held to be an abuse, and although there was no jurisdiction to vacate the registration under the Land Charges Act 1925, the Court had an inherent jurisdiction to prevent “an abuse of this sort” because the registration “ought never to have been made”: per Harman LJ at page 704 B-D I find nothing in that case which indicates that there exists a more general inherent jurisdiction.[37]In Northern Development (Holdings) Ltd v UDT Securities [1977] 1 All ER 747, Megarry J was also considering an application to vacate a registration of a pending action on both registered and unregistered land. There was no dispute as to the inherent jurisdiction to make orders vacating the cautions in respect of the registered land, but it was submitted that the only jurisdiction in respect of the unregistered land was that provided in section 5(10) of the Land Charges Act 1972. Megarry J. held that that section must the read subject to the general power of vacation conferred by section 1(6) of the Act, and that there was a statutory jurisdiction to vacate the entries. In addition, he held that the statute was not “inconsistent with the existence of an inherent jurisdiction” although he did not think that it was necessary to decide whether such a jurisdiction did in fact exist. I do not find any support in that case for the existence of a general inherent jurisdiction. Nor did I find any support in Re C L Nye Ltd. [1970] 3 All ER 1061.[38]I find more assistance in two other authorities Re Calmex Ltd [1989] 1 All ER 485 and iGroup Ltd. v. Ocwen [2003] 4 All ER 1063. In Re Calmex a company had been wound up by mistake. The petitioner had not intended to have it wound up, and the company knew nothing about the proceedings. The petitioner was owed money by another company which had a similar name but which was entirely unconnected with Calmex. An application was made for rescission of the winding up order, and the issues which Hoffmaim J. had to decide were, first, whether the Court had jurisdiction to rescind a winding up order; secondly, if the court did have such a jurisdiction, the grounds upon which the jurisdiction could be exercised; and, thirdly, if the Court decided to rescind the order, what could be done to rectify the register. Hoffmann J. held that there was an express power given by rule 7.47 of the Insolvency Rules 1986, and that (adopting a dictum of Lord Greene MR in Craig v. Kanseen [1943] 1 All ER 108 at page 113) the power could be exercised in respect of an order which could “properly be described as a nullity”. In such a case the person affected by the nullity was entitled ex debito justitiae to have the order set aside.[39]Hoffmann J. then had to consider what could be done about the fact that the winding up order was required to be entered on the register which could be inspected by anyone who wished to do so. There were no express provisions for the removal of any documents from the register under the Insolvency Act 1986, or under the Insolvency Rules 1986 or under the Act. However, Hoffmann J. held that the winding up order was a nullity for the purposes of section 130 (1) of the Insolvency Act 1986, which imposed on the Registrar the duty to enter the making of the winding up order in the records relating to the company. Accordingly, Hoffmann J. held that the Registrar was under a duty not to retain entered in the records a winding up order which the Court had declared to be a nullity: see page 488g-h. Hoffmann J. concluded that “the Court does in principle have jurisdiction according to ordinary public law principles to control the way in which the Registrar carries out his statutory duties, subject to any specific exclusions of that jurisdiction or the evidence on which it could be found.. ...“:page 488h.[40]As I understand Hoffrnann J.’s judgment, he is not recognising the existence of some general and unlimited inherent jurisdiction to supervise the Registrar, but simply the jurisdiction, which is to be exercised “according to ordinary public law principles”, to require the Registrar to perform his (or her) statutory duties so as not, in that case, to permit the wrong that had been perpetrated on a company to continue. Hoffrnann J. decided either (and, in my judgment, it matters not which formulation is adopted) that the Registrar had no statutory duty to retain on the register an order which was a nullity, and that she should not do so, or that the Registrar was under a statutory duty to remove a nullity from the register, and should, if necessary, be ordered to do so by the Court in the exercise of its supervisory jurisdiction to ensure that there was compliance with statutory duties.[41]Re Calmex is not, in my judgment, authority for the proposition that there is an inherent, supervisory jurisdiction to require or permit the rectification of any document or record that contains an error or some extraneous material, but which is otherwise filed in compliance with a statutory duty. In other words, Re Calmex is not authority for the proposition that a document or record that contains an error or some extraneous or superfluous material becomes, by that inclusion, a nullity and ceases to be properly filed, so that the Registrar has no statutory duty to retain it on the record or that she is under a statutory duty to remove it.[42]In iGroup v. Ocwen particulars of certain debentures were provided to the Registrar on prescribed forms, but those particulars had attached to them a number of schedules containing personal information relating to the company’s customers. The Registrar made the appropriate entries on the register under section 401 (1) of the Act. The claimant was concerned that the disclosure of the personal information might constitute a breach of duty owed to the customers, and applied for rectification or amendment of the prescribed forms by the removal of the schedules containing the personal information. The application was made under section 404 of the Act.[43]Lightman J. held that the power of rectification granted to the Court by section 404 of the Act was limited to correcting mistakes of omission or commission in the entry of any particular with respect to a mortgage or a charge, or in a memorandum of satisfaction, made by the Registrar on the register of charges maintained by the Registrar under section 401. The power did not extend to mistakes otherwise than in particulars entered on the register, and did not extend to the information particulars entered on the prescribed forms by or on behalf of an applicant for registration. The power to rectify given to the Court by section 404 was concerned with the particulars that the Registrar was required to enter on the register of charges, and did not extend to documents which were not required to be registered. Nor was there an inherent power or jurisdiction to rectify the register.[44]The breaches of duty which it was submitted might have occurred by the filing of the schedules containing the personal information were said to be a possible breach of the duty of confidence or of the provisions of the Data Protection Act 1998 or of the provisions of section 6 of the Human Rights Act 1998. In respect of those submissions, Lightman J said, at page 1071j:
“25. Accordingly there appears to me to be no substance in the suggestion that the disclosure or consequent public availability of the Information constitutes any form of wrongdoing by the defendant companies, still less the Registrar. But in any event even if there were any such wrongdoing as is suggested, I cannot see how such wrongdoing could render the disclosure of the Information a “mis-statement” entitling the court to exercise its jurisdiction to rectify the Register under section 404. There is nothing stated which is erroneous or wrong and there is no allegation that there is. The complaint is about the telling of the truth.”
[45]Lightman J. also rejected the submission that the Court had an inherent jurisdiction to order rectification. He did so by reference to the Exeter Trust case. He referred to Re Calmex in the following terms:
“Calmex merely established (if ever authority were required for the proposition) that the court has a supervisory jurisdiction over the Registrar and can in judicial review proceedings make orders enforcing the performance by the Registrar of the Registrar’s public duties.”
[46]In the result, therefore, the position is that I have not been referred to, and have not found, any authority for the proposition that there is a general, inherent supervisory jurisdiction in the Court in relation to the performance by the Registrar of her duties, nor, in my judgment, is there such a jurisdiction. At most, there is a jurisdiction to require the Registrar to comply with her statutory duties (see Re Calmex), but that is not the jurisdiction which the Company seeks to enforce in the present case. The Company accepts that the Registrar has complied with her statutory duty in relation to the filed accounts, but seeks, in similar way as did the claimant in iGroup, the removal of extraneous or superfluous material. It does not seem to me to make a significant difference to the application that in the present case the extraneous or superfluous material is contained in the body of the filed document whereas in iGroup the material was contained in schedules annexed to the filed document. In each case there has been a proper filing and a proper performance by the Registrar of her statutory duties.[47]Furthermore, it does not seem to me that to refuse this application would involve the Court somehow in infringing, or harming, the integrity of its own process by allowing a document to remain on the register that contained the offending sentences. The parties to the proceedings in which the Part 36 offer was made know that the offer has been made. The fact that the offer has been made will not come to the attention of the trial judge. If a party to the proceedings seeks to refer to the accounts during the trial, I can see no reason why the offending sentences cannot be redacted, or other steps taken to ensure that the trial judge does not see them. The fact that a Part 36 offer was made in a particular piece of litigation is unlikely to be of any use to any third parties in other litigation.[48]Accordingly, I hold that there is no inherent jurisdiction to permit the filing of revised accounts. DISCRETION[49]It was common ground that, if I held that there was an inherent jurisdiction, such a jurisdiction would give me a discretion as to whether or not to permit the filing of revised accounts. At the conclusion of the hearing I informed the parties that although I had not then come to a view about the existence or otherwise of the inherent jurisdiction, nonetheless, if there were such a jurisdiction, I would refuse the application in the exercise of my discretion on the facts of the present case.[50]The factors that I then had in mind were that, first, the filed accounts had been the subject of discussion by the directors of Company A amongst themselves and with the auditors, albeit without the benefit of legal advice: the offending sentences had not been included unintentionally. Secondly, I had in mind the various considerations to which I have referred in Paragraphs 46 and 47 above. Thirdly, the filing of revised accounts would not prevent a member of Company A, a debenture holder or a person entitled to receive notice of a general meeting, from exercising the rights provided by sections 238-240 of the Act, at least prior to the filing of the revised accounts. Fourthly, the evidence before me was that the records on file are downloaded daily by four bulk purchasers, and the filing of revised accounts would not have the effect of eradicating the documents containing the offending sentences from the records of those bulk purchasers, or from persons who have obtained the original accounts from them.[51]Miss Nicholson submitted that the effect of the Companies (Revision of Defective Accounts and Report) Regulations 1990 (SI 1990/2570) (“the Regulations”) was that the accounts containing the offending sentences would be removed and replaced by the revised accounts. In particular, Miss Nicholson submitted that this was the true construction of Regulations 8 and 12. In my judgment, the Regulations do not assist Miss Nicholson’s submission. First, they are concerned only with the voluntary revision of accounts and reports under section 245: as has been explained, that is not the revision sought in the present case. Secondly, I do not construe the Regulations as indicating that the original accounts are removed from the register. Regulations 8 and 12 contemplate the revised accounts being the company’s accounts “in place of the original annual accounts” (Regulation 8(1)), and, in the case of a revision of the accounts by replacement, the delivery to the Registrar of a copy of the revised accounts, or in the case of a revision by supplementary note, a copy of that note together with a copy of the auditors’ report (Regulation 12(1) and (2)). There is no suggestion in the Regulations that the original accounts should be removed, or that there is any power to do so.[52]Although Regulation 8(2) might, at first sight, be thought to cut down the rights provided to a member of the company or a debenture holder by sections 238-240 of the Act, it is by no means clear to me that the Regulation would preclude the member, debenture holder or person entitled to receive notice of a general meeting from obtaining a copy of the original accounts.[53]Miss Nicholson also submitted that the likelihood was that the bulk purchasers replaced the downloaded records on a daily basis so that the revised accounts, once filed, would replace the original accounts and so that any person obtaining Company A’s accounts from one of the bulk purchasers after the revised accounts had been filed would receive a copy of those accounts and not a copy of the original accounts. That may be so, but if as is likely or at least possible, the original accounts, which have been on the file now for some months have been obtained from one of the bulk purchasers, the mischief would have been done, and the filing of the revised accounts would not “put the genie back in the bottle”.[54]Accordingly I conclude that, if there were an inherent jurisdiction, in the exercise of my discretion I would not make the order sought by Company A. OTHER RELIEF[55]As I mentioned at the beginning of this judgment, the Claim Form sought other relief in addition to an order permitting the filing of revised accounts. The other relief sought was, first, a direction that the Registrar accept and file the revised accounts in substitution for the original accounts; secondly, a direction extending the time-limit for the filing of accounts so that the revised accounts could be filed in time and in accordance with the provisions of the Act; thirdly, that the right to inspect the file should be suspended or only exercised with the leave of the Court; and, fourthly, that the Registrar should publish in the London Gazette notice of the receipt of the revised accounts.[56]Miss Nicholson accepted that these claims only arose for consideration if the Court gave permission to file revised accounts. Her submission in relation to the claim that the revised accounts should be in substitution for the original accounts, which should be removed from the register was said to be “by analogy” with the provisions which apply to voluntary revision under section 245, and to flow from the proper construction of Regulations 8 and 12 of the Regulations. I have already indicated that I do not construe those Regulations as requiring, or authorising, the removal of the original accounts rather than their replacement by the revised accounts. Accordingly, I would have rejected that submission.[57]The claim for an extension of time was not pursued. However, in the event that permission to file revised accounts had been given, a direction as to the time for filing the revised accounts would have been sought. No order was sought in respect of the claim that the Registrar should publish a notice in the London Gazette of the receipt of the revised accounts. POSTSCRIPT[58]This judgment is confined to the facts giving rise to the claim, and is simply a judgment as to the rights of the parties to this litigation. I would not wish anything that I have said to be given any wider import. It would be easy to envisage factual situations, not far distant from the facts of this case, in which wider and different considerations might apply. Let me postulate a case in which a company (Company X) comes into possession of another company’s (Company Y) confidential information or trade secrets, and wrongfully publishes that information or trade secrets in its filed accounts, which otherwise comply with the Act and give a true and fair view. The inclusion of the confidential information or the trade secrets by Company X is unlawful. Company Y applies for an injunction to restrain the publication, and to recover all offending copies, and joins the Registrar to that application. I do not doubt that in such a case the Court would wish to give effective relief to Company Y, but to do so would necessarily involve either ordering the Registrar to permit the removal of the offending part of the accounts, or to permit the replacement of the accounts by new accounts which did not contain the offending passage. Other examples could be given, such as the inclusion of defamatory material in the accounts or report, but I do not think it necessary, or helpful, to multiply examples in this judgment.[59]I mention these points because it does seem to me that, while I am in no doubt that there is no inherent jurisdiction to permit the revision of the filed accounts in the present case, situations might arise in which the Registrar’s statutory duty might come into conflict with a third party’s common law or statutory rights.[60]It may be that the solution to such problems would be found in an application of public law principles, but, as Hoffmann J. said in Re Calmex, at page 487f-g:
“It is impossible to eliminate mistakes in searching official records or injustices by applying generalisations to exceptional cases. The question here is whether anything further can be done which is consistent with the Registrar’s statutory duties and whether the Court has power to order the Registrar to do it.”
[61]Or it may be that the solution in such a case would be for proceedings to be instituted against both the offending party and the Registrar for an injunction to restrain the continued publication of the offending material, and for the use of reasonable endeavours to recall such material. Clearly, proceedings of that nature would involve the assertion of a specific right against the Registrar, and would not involve the exercise by the Court of an inherent, supervisory jurisdiction. CONCLUSION[62]For the reasons set out above, I dismiss this application.