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Published online by Cambridge University Press: 17 January 2008
In Re A Company (No.007946 of 1993)1 it was held that a company incorporated in Northern Ireland was an “unregistered company” within section 220 of the Insolvency Act 1986 and, accordingly, was amenable to the winding-up jurisdiction of the English court. In so holding Morritt J specifically declined to follow the view expressed in Dicey and Morris,2 a view which had been adhered to by a number of writers on both English and Scottish law.3 Prior to his Lordship's determination it was considered as a general proposition that a company incorporated in one part of the United Kingdom could be wound up only in the place of incorporation (such judicial authority as there was in respect of Northern Irish companies4 was to this effect—although it was not brought to the attention of Morritt J). Whilst as a matter of precedent it was undoubtedly open to Morritt J to hold that there was jurisdiction to wind up a Northern Irish company, such a conclusion is completely at odds with the history and underlying intention of the relevant statutory provisions.
1. [1994] Ch. 198, sub nom. Re Normandy Marketing Ltd [1993] B.C.C. 879.
2. Dicey, and Morris, , The Conflict of Laws (12th edn, 1993), pp.1128–1129; since the case was argued prior to the publication of the 12th edn, the report of Re A Company (No.007946 of 1993) at [1994] 1 All E.R. 1007 refers to passages from the 11th edn (1987) of the work; however, there are no relevant differences between the two editions.Google Scholar
3. See e.g. Cheshire, and North, , Private International Law (12th edn, 1993), p.900Google Scholar and Anton, , Private International Law (2nd edn, 1990), p.722 (as well as Smart, Cross-Border Insolvency (1991), pp.69–70).Google Scholar
4. DSQ Properties Ltd v. Lotus Cars Ltd [1987] 1 W.L.R. 127, 132 (per Millett J), infra text accompanying n.12. The provisions of the Civil Jurisdiction and Judgments Act 1982 have no bearing upon winding-up jurisdiction in intra-UK cases: see s.!7(l) and Sched.5, passim.
5. See Re Matheson Brothers Ltd (1884) 27 Ch.D. 225 and the discussion in Re Campania Merabello San Nicholas SA [1973] Ch. 75. It is not necessary that a foreign company have a place of business in England; however, the court will usually require that there are some assets in England, although in exceptional cases even that may not be necessary (see, passim, Re A Company (No.00359 of 1987) [1988] Ch. 210).
6. Earlier but substantially the same provisions were found in Part IX of the Companies Act 1948, Part X of the 1929 Act, Part VIII of the 1908 Act and Part VIII of the 1862 Act.
7. This is the effect of s.229(2), which actually states: “an unregistered company is not, except in the event of it being wound up, deemed to be a company under the Companies Act, and then only to the extent provided in this Part of this Act”.
8. See Dicey and Morris, Rule 158(2) infra.
9. The history of s.225 is considered in detail infra.
10. Rule 158 was in the previous (11th) edition Rule 176, which is cited in the report at [1994] All E.R. 1007, 1011.
11. Indeed, no case law authority is cited in any of the works referred to in supra n.3.
12. [1987] 1 W.L.R. 127, 132 (emphasis added).
13. Acting pursuant to s.447(3) of the Companies Act 1985.
14. S.124A, introduced by s.60 of the Companies Act 1989, states: “(1) where it appears to the Secretary of State from—(a) any report made or information obtained under Part XIV of the Companies Act 1985 (company investigations, &c) … that it is expedient in the public interest that a company should be wound up, he may present a petition for it to be wound up if the court thinks it just and equitable for it to be so.”
15. Companies Act 1985, s.735(l) and (4). S.124A (introduced by the Companies Act 1989, s.60) makes no attempt to define the word “company”. This must presumably have been deliberate on the part of the draftsman who elsewhere in the 1989 Act gave an extended definition to “company” (e.g. Sched.22, para. 14(3): “‘company’ means a company within the meaning of s.735(l) of the Companies Act 1985 or a company which may be wound up under Pan V of the Insolvency Act 1986 (unregistered companies)” (emphasis added)).
16. [1994] Ch. 198, 201: “The Secretary of State accepted that it was necessary to find some provision expressly relating to companies incorporated elsewhere than in Great Britain which authorised him to present the petition and the court to entertain it. He contended that such provision is to be found in … s.220 containing the definition of ‘unregistered company’.”
17. Morritt J also considered the predecessor of s.124 A, namely s.440 of the Companies Act 1985. However, as discussed below, the fact that Morritt J did not deal in detail with s.453 of the Companies Act 1985 throws into question his Lordship's conclusions in relation to s.440.
18. [1994] Ch. 198, 203.
19. Ibid.
20. Ibid.
21. Ibid.
22. Ibid. The history of s.221(2) indicates otherwise; infra.
23. Idem, p.204. Whilst this comment is strictly correct, care must be taken with reference to a “principal place of business”. That expression does not entail that a company must have its major commercial or business dealings in England. If a foreign company has some place of business in England that will be its principal place of business for the purposes of s.221 (2): “It is irrelevant that it had also a principal place of business abroad and that—if, indeed, it be the fact—that foreign place of business was, on comparison, the one to which major importance ought to be attached” (per Uthwatt J in Re Naamlooze Vennootschap Handelmaatschappij Wokar [1946] Ch. 98, 100).
24. See Re Campania Merabello San Nicholas SA [1973] Ch. 75, 86. passim.
25. Supra n.18, at p.204, discussed infra.
26. [1962] A.C. 515.
27. (1898) 67 L.J.Ch. 409.
28. Supra n. 26, at p.527.
29. As Morritt J observed (supra n.18. at p.203): “the fact that s.220 of the Insolvency Act 1986 does not refer expressly to companies incorporated elsewhere [than] in Great Britain is by no means conclusive”.
30. See text accompanying supra n.22.
31. Per Jessel MR in Re International Pulp and Paper Co. (1876) 3 Ch.D. 594, 598–599 (“though the company may carry on business in any part of the United Kingdom, yet the place of its registered office shews the court which is to wind it up”). See also Re Scottish Joint Stock Trust Bank [1990] W.N. 114. Thus in the Companies (Consolidation) Act 1908 jurisdiction to wind up English companies was given to the English court (s.131) and likewise in relation to Scotland (s.135) and Ireland (s.134). Indeed, even after independence, because the Companies (Consolidation) Act 1908 (UK) continued to apply, the Irish court held it could not wind up an English company as an unregistered company: Re Portarlington Electric Light and Power Co. Ltd [1922] I.R. 100.
32. See generally Boyd v. Lee Guinness Ltd [1963] N.I. 49. English judges have still sometimes maintained that the Companies Act applies to all of the UK (“It is well settled that the Companies Act 1948 applies to the whole of the United Kingdom” per Templeman J in Re Dynamics Corporation of America [1973] 1 W.L.R. 63,66) but this is obviously quite at odds with Insolvency Act 1986, s.441, and Companies Act 1985, s.745.
33. The Companies Act 1862 gave jurisdiction (by s.81) to the Irish court to wind up Irish companies: see also the cases cited supra n.31.
34. S.220(1) states: “for the purposes of this Pan, the expression ‘unregistered company’ includes …” (emphasis added). For the regulation of unregistered companies under the Companies Act 1985 see, passim, Gower's Principles of Modem Company Law (5th edn, 1992), pp.293–295.Google Scholar
35. S.221(2) could, in theory, also apply where a truly foreign company (e.g. incorporated in Panama) has offices in different parts of the UK: see, passim. Smart, op. cit. supra n.3, at pp.66–67.
36. Supra n.18, at p.204 (emphasis added).
37. Rule 158, text accompanying supra n.10, makes no reference to a company having been dissolved.
38. Per Lord Romer in Dairen Kisen Kabushiki Kaisha v. Shiang Kee [1941] A.C. 373, 376 with reference to an in effect identical provision in the Hong Kong Companies Ordinance (Cap.32).
39. Under s.221(5)(a), see Russian and English Bank v. Baring Bros [1936] A.C. 403,424–425 and, more recently. Inland Revenue v. Highland Engineering Ltd 1975 S.L.T. 203 (a dissolved New Zealand company).
40. For the relevant history see Campania Merabello, supra n.5, at p.86.
41. S.274.
42. S.343.
43. Thus e.g. a foreign company which has been dissolved abroad may be wound up under s.221 (5)(a) even though it could not be wound up under s.225 because e.g. it has never carried on business in Great Britain: Highland Engineering, supra n.39.
44. As Morritt J appeared to do in Re A Company, text accompanying supra n.25.
45. Supra n.18, at p.204.
46. S.570(1) of the Companies Act 1985 re-enacted s.276(1) of the Companies Act 1948. S.570 was repealed by s.438 of and Sched.12 to the Insolvency Act 1986 and replaced by the more broadly drafted s.426 of the 1986 Act, which makes provision for co-operation between courts exercising jurisdiction in relation to insolvency (both corporate and personal).
47. Supra n.32.
48. By s.276(1) of the Companies Act 1948, see supra n.46.
49. This is particularly the case as the winding up of a non-English company by the English court is often said to be ancillary or auxiliary to the principal liquidation abroad: for recent judicial comment see Re Bank of Credit and Commerce SA (No.9) [1994] 3 All E.R. 764, 798–799 and Re Wallace Smith & Co. Ltd [1992] B.C.L.C. 970, 985, passim.
50. Banque des Marchands de Moscou (Koupetschesky) v. Kindersley [1951] Ch. 112, 125–126 (emphasis added).
51. In Re A Company (No.00359 of 1987) [1988] Ch. 210, 226 Peter Gibson J suggested the very existence of jurisdiction to wind up an unregistered company might depend upon “whether any other jurisdiction is more appropriate for the winding up”. This commentator has suggested (op. cit. supra n.3, at p.64) that the appropriateness of a foreign forum is relevant to the exercise of discretion rather than to the actual existence of jurisdiction: see also Wallace Smith, supra n.49, at p.985.
52. See Insolvency (Northern Ireland) Order (S.I. 1989 No.2405, N.I.19).
53. Re Scottish Joint Stock Trial Bank, supra n.31.
54. A number of the provisions may be mentioned in passing. Parliament can be very specific at times as e.g. in s.60 of the Criminal Justice Act 1993, where for the purposes of Part V (Insider Dealing) “‘company’ means any body (whether or not incorporated and wherever incorporated or constituted”. In comparison a number of provisions are a little less precise: e.g. in the Company Directors Disqualification Act 1986, s.22, company includes “(a) in s.11 … an unregistered company and a company incorporated outside Great Britain which has established a place of business in Great Britain, and (b) elsewhere … any company which may be wound up under Part V of the Insolvency Act”.
55. It is to be noted that s.72(2) refers specifically to s.220 rather than to Part V of the Insolvency Act 1986 as a whole. A reference to Part V, obviously, would include not only s.220 but also s.225 (which may apply to a Northern Irish company which has carried on business in England).
56. S.73 gives power to the Secretary of State to present a winding-up petition in Northern Ireland in respect of any authorised person or authorised representative (s.73(2)) who is “(a) a company within the meaning of Article 3 of the Companies (Northern Ireland) Order 1986; or (b) an unregistered company within the meaning of [Art.184 of the Insolvency (Northern Ireland) Order 1989]; or (c) a Part XXIII company within the meaning of Article 2 of [the Companies (Northern Ireland) Order 1986]; or (d) a partnership.”
57. S.I. 1986 No.2404, N.I.18 and S.I. 1989 No.2405, N.I.19 respectively.
58. The meaning of the word “company” in the Insolvency Act 1986 is given (by s.251) the same meaning as in the Companies Act 1985, namely (s.735( 1) and (4)) “unless the contrary intention appears” a company formed under the Companies Acts past or present. It was not argued before Morritt J that “company” in S.124A had a special meaning, in that Parliament might have intended that if a company could be investigated it would also be subject to winding up upon a petition under S.124A.
59. Supra n. 18, at p.204.
60. Idem, pp.202–203.
61. S.440 provided: “If in the case of a body corporate liable to be wound up under this Act it appears to the Secretary of State from a report made by inspectors under s.437, or from information or documents obtained under s.447 or s.448 below, that it is expedient in the public interest that the body should be wound up, he may … present a petition.”
62. Companies Act 1985, s.740.
63. Merritt J, supra n.18, at p.203, stated: “In the end, the question depends upon the proper construction of the three words appearing in s.441(2) of the Insolvency Act 1986 ‘expressly relating to’.”
64. S.4S3 was itself amended by the Companies Act 1989; see infra. Morritt J did mention “s.453 of the Companies Act 1985” (supra n.18, at p.202), which in the context could only have meant the current s.453, a provision which no longer concerns itself with a winding-up petition by the Secretary of State: see infra n.67. It is unfortunate that his Lordship's attention was not drawn to the fact that s.453 was significantly amended by the Companies Act 1989. infra.
65. The draftsman of the Companies Act 1989, it will be recalled, provided an extended definition of “company” elsewhere in the Act: see e.g. Sched.22, para.14(3), set out supra n.15.
66. Text accompanying supra n.64.
67. Of course, s.453 does not seek to regulate S.124A of the Insolvency Act 1986, ass.124A is not one of the “provisions of this Part”.
68. The general application of S.124A to companies incorporated outside Great Britain (leaving to one side Northern Irish companies which are by virtue of s.441(2) in a special position) remains in some doubt.
69. Subject only to s.225 of the Insolvency Act 1986, supra.
70. See per Millett J in DSQ Properties Ltd, supra n.4, and per Jessel MR in International Pulp and Paper, supra n.31.
71. Obviously a very relevant costs question is involved.
72. As Evershed MR put it in Banque da Marchands, supra n.50, at p.126, prima facie if the local law of a corporation provides for “the due administration of all the property and assets of the corporation wherever situate among the persons properly entitled to participate therein, the case would not be one for interference by the machinery of the English courts”.