Corporations Act 1989 (Cwlth) ss. 16, 17, 18

Australian Securities Commissions Act 1989 (Cwlth) ss. 1, 12, 14, 18, 138

Bowman v Secular Society Ltd v Secular Society Ltd (1917) AC 406

Cotman v Brougham (1918) AC 514

Hammond v Prentice Bros Ltd (1920) 1 Ch 201

Oakes v Turquand (1867) LR 2 HL 325

Princess of Reuss v Bos (1871) LR 2 HL 176

R v Registrar of Companies ex parte Central Bank of India (1986) 1 All ER 105

Re Australian Koyo Ltd (1984) 2 ACLC 429

Re German Date Coffee Co (1882) 20 ChD 169

Re Voxson Sales Pty Ltd (1989) 7 ACLC 479

Scott v Frank F. Scott (London) Ltd (1940) 1 Ch 794

The King v Wallis [1949] HCA 30; (1949) 78 CLR 529

Townsville Hospital Board v Townsville City Council (1982) 149 CLR 292

Solicitors for Applicant: Regional General Counsel for

Victoria - Australian Securities Commission

Counsel for Respondent: Mr P.K. Searle

Solicitors for Respondent: Cain and Cleaves Pty Ltd

Upon the respondents by their Counsel undertaking to lodge with the Applicant within the time specified by s.172 of the Corporations Law the amendment to its memorandum adopted on 25 June 1991;

The application herein be dismissed with no order as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

An application has been made by the Australian Securities Commission ("the Commission") for an order pursuant to s.1322(4) of the Corporations Law that the register kept by the Commission under s.120 of the Corporations Law be rectified by removing therefrom:

"(a) the application by Corporate and Personal Planners Pty.

Ltd. dated 15 April 1991 for the registration of

S.I.B. Resources N.L. under Division 1 of Part 2.2 of

the Corporations Law;

(b) the memorandum and articles of S.I.B. Resources N.L.

lodged with the said application."

2. On 15 April 1991 an application for the registration of S.I.B. Resources N.L. ("S.I.B.") as a company under Division 1 of Part 2.2 of the Corporations Law was lodged with the Commission. The memorandum of S.I.B. lodged with that application included the following provisions:

"MEMORANDUM OF ASSOCIATION

OF

S.I.B. RESOURCES N.L.

1. The name of the Company is S.I.B. RESOURCES N.L.

2. The objects for which the Company is established are

to exercise the rights, the powers and the privileges

as set out in Section 161 of the Corporations Law,

which for the time being includes the rights, the

powers and the privileges of a natural person, and

without limiting the generality of the foregoing, the

power:-

(a) To prospect explore drill test develop exercise

turn to account and open any petroleum mineral

oil and/or natural gas permits licences leases

rights authorities holdings tenements claims or

other rights or privileges on any lands wells

mining rights or other properties from time to

time in the possession of the Company or any

other company or person.

(b) To acquire lands mines mineral petroleum and

other properties of any tenure and grants

concessions claims rights leases licences and

options and any rights in to or over the same

and to mine prospect work develop dredge drill

test and explore for all metals minerals

petroleum gas or other rare or valuable

substances and precious stones and generally to

work the mines and the oil or gas fields of the

Company over or in respect of which the Company

has rights and to carry on the business of mine

owners in any part of the world.

(c) To apply for purchase take on lease or tribute

or otherwise acquire and deal in and to manage

supervise or control mines and mining

properties grants concessions leases claims

options licences of or other interests in

mining rights mineral petroleum or other mining

properties or interests or shares (undivided or

other) therein and such water and other rights

as are considered valuable or desirable by the

Company.

(d) To prospect explore open and work claims or

mines and raise dig and quarry for gemstones

precious stones heavy minerals tin gold silver

uranium coal ores and minerals generally.

(e) To cut refine treat or otherwise deal with or

turn to account gemstones precious stones

minerals and any other substances and to render

the same marketable and fit for use.

(f) To carry on the business of pumping drawing

transporting purifying marketing selling

disposing of and dealing in natural gas

petroleum mineral oils and other substances.

(g) To purchase acquire construct erect and

maintain all necessary refineries mills works

plant machinery laboratories workshops dwelling

houses for workmen and others and other

incidental building works and appliances.

(h) To erect establish construct or acquire by

purchase or otherwise all such roads ways

aerodromes and wharves as may be necessary for

the mining or prospecting purposes of the

Company.

...

(x) To carry on the business of financiers bankers

brokers and underwriters in all their

respective branches and departments including

the borrowing raising or taking up of money the

lending or advancing of money the discounting

buying selling and dealing in Bills of Exchange

Promissory Notes Coupons Drafts Bills of Lading

Warrants Debentures Certificates Scrip and

other instruments and securities granting and

issuing letters of credit the buying selling

and dealing in bullion and specie the acquiring

holding issuing on commission underwriting and

dealing with stock funds shares debentures

debenture stock bonds obligations securities

and investments of all kinds the negotiating of

loans and advances the collecting and

transmitting of money and securities the

managing of property and carrying on or

performance of secretarial services and

generally the transmission of all kinds of

agency business carried on by bankers.

...

(bb) To lend money to such persons companies and

corporations and upon such terms and upon such

security real or personal including stocks and

shares and other choses in action or on

mortgage bonds or other obligations or any kind

of real or personal security or without taking

security as the Company shall think fit.

...

(nn) To undertake and carry on the business of an

Investment and Trust Company in all or any of

its branches.

...

(mmm) To do all such other things as are incidental

or conducive to the attainment of the above

objects.

AND IT IS HEREBY DECLARED that the word `Company' in

this clause shall be deemed to include any partnership

or other body of persons whether incorporated or not

incorporated and whether domiciled in the Commonwealth

or elsewhere and the objects set forth in any sub-clause

of this Clause shall not, except when the

context expressly so requires, be in any way limited

or restricted by reference to or inference from the

terms of any other sub-clause or by the name of the

Company. None of such sub-clauses or the objects

therein specified or the powers thereby conferred

shall be deemed subsidiary or auxiliary merely to the

objects mentioned in the first sub-clause of this

Clause but the Company shall have full power to

exercise all or any of the powers conferred by any

part of this Clause in any part of the world and

notwithstanding that the business undertaking property

or acts proposed to be transacted acquired dealt with

or performed do not fall within the object of the

first sub-clause of this Clause."

3. It is contended by the Commission that by reason of s.115 of the Corporations Law only a "mining company" as defined may be a no liability company. Section 115 provides:

"(1) A company registered under this Division may be:

(a) a company limited by shares;

(b) a company limited by guarantee;

(c) a company limited both by shares and by

guarantee; or

(d) an unlimited company.

(2) A mining company registered under this Division may be

a no liability company."

4. As defined in s.9 of the Corporations Law "mining company" means:

"a company:

(a) whose memorandum contains a provision stating the

objects of the company; and

(b) whose sole objects are mining purposes;"

5. That leads in turn to the following definition in the same section:

"`mining purposes' means any or all of the following

purposes:

(a) prospecting for ores, metals or minerals;

(b) obtaining, by any mode or method, ores, metals or

minerals;

(c) the sale or other disposal of ores, metals, minerals

or other products of mining;

(d) the carrying on of any business or activity necessary

for, or incidental to, any of the foregoing purposes;

whether in Australia or elsewhere, but does not include

quarrying operations for the sole purpose of obtaining stone

for building, roadmaking or similar purposes."

6. The Commissioner further takes the view that some of the objects in S.I.B.'s memorandum, including some of those contained in the extracts quoted above, are not mining purposes and that accordingly S.I.B. is not a company whose sole objects are mining purposes. It follows, it is said, that S.I.B. is not a mining company and therefore not entitled to the registration, which it obtained on 18 April 1991, as a no liability company.

7. Also on 18 April 1991 the Commission issued a certificate of incorporation in relation to S.I.B. The operative part of that certificate read:

"CERTIFICATE OF REGISTRATION OF A COMPANY

Corporations Law Sub-section 121(1)

This is to certify that

S.I.B. RESOURCES N.L.

Australian Company Number 051 422 596

is a registered company under Division 1 of Part 2.2 of the

Corporations Law of New South Wales and because of its

registration it is an incorporated company.

The company is a no liability company.

The company is a public company.

The day of commencement of registration is the eighteenth

day of April 1991."

8. It is appropriate first to consider whether S.I.B. not being a mining company should not have been registered, and is not entitled to remain, as a no liability company. In my view, s.115 is a code exhaustively defining the classes of company which may be registered under Division 1 of Part 2.2. Furthermore, the express stipulation in sub-s(2), that a mining company may be a no liability company, by implication denies that facility to companies which are not mining companies as defined. For a discussion of the principles of statutory construction which compel that result see The King v Wallis [1949] HCA 30; (1949) 78 CLR 529 per Dixon J. at 550.

9. I also consider it to be clear that some of the objects stated in S.I.B.'s memorandum are not mining purposes. A "main objects" principle of construction has been applied in older authorities, e.g. Re German Date Coffee Co (1882) 20 ChD 169 so as to treat later, and apparently widely drawn, paragraphs of a memorandum as merely ancillary or incidental to the main or dominant objects said to be discernible in the early paragraphs. However, that principle may be excluded by words which make it clear that each paragraph is intended to specify an object which is to be given full effect according to the ordinary meaning of the language in which it is expressed without any limitation or restriction imported from the words or position in the memorandum of any other paragraph; (Cotman v Brougham (1918) AC 514). The declaration with which paragraph 2 of the memorandum of S.I.B. concludes manifestly has that effect. Consequently, it is open to S.I.B. as one of its objects, to borrow or lend money or to carry on business as an investment and trust company even if that activity is not necessary for, or incidental to, any of the purposes enumerated in paragraphs (a), (b) and (c) of the definition of "mining purposes" in s.9 of the Corporations Law. It follows that S.I.B.'s sole objects are not mining purposes so that it is not a mining company as defined and accordingly may not be a no liability company.

10. It has been argued on behalf of S.I.B. that s.122 of the Corporations Law precludes the Commission from impugning the registration of a no liability company on the ground that its objects travel outside those permitted to a mining company. Section 122 provides:

"A certificate under the commission's common seal stating

that a specified company has been registered under this

Division is conclusive evidence that:

(a) all requirements of this Law in respect of:

(i) registration of the company as a company under

this Division; and

(ii) matters preceding or incidental to the

registration;

have been complied with;

(b) the company is duly registered under this Division;

and

(c) the day of commencement of the registration is the day

(if any) specified as such in the certificate."

11. Provisions to similar effect, gradually increasing in scope, have long been present in companies legislation, and have been held on high authority to preclude a court from going behind a certificate of registration where the incorporation of the company or some prerequisite thereto is the subject of collateral attack by a party to litigation involving the company; (see e.g. Oakes v Turquand (1867) LR 2 HL 325 at 354; Cotman v Brougham (supra) and Hammond v Prentice Bros Ltd (1920) 1 Ch 201).

12. However, that line of authority does not resolve the question of whether the certificate of registration is conclusive against the Crown, or the Commission, when seeking to attack directly, and not collaterally, the validity of the incorporation of a company. That question, in turn, raises the subsidiary question of whether the Commission is entitled to the privileges and immunities of the Crown. In deciding that question, as Gibbs C.J. pointed out in Townsville Hospital Board v Townsville City Council [1982] HCA 48; (1982) 149 CLR 282 at 288:

"it is necessary to consider all the circumstances of the

case and that `(t)he fact that function has been a

traditional function of government and that no intention of

"alienating" it appears is sufficient to answer the question

in many cases': Grain Elevators Board (Vict.) v Dunmunkle

Corporation [1946] HCA 13; (1946) 73 CLR 70, at p 75. There have been

cases in which the fact that the objects which the statutory

body was set up to achieve were peculiarly within the

province of the Government was regarded as decisive: see,

e.g. Repatriation Commission v Kirkland [1923] HCA 18; (1923) 32 CLR 1;

see also Superannuation Fund Investment Trust v

Commissioner of Stamps (S.A.) [1979] HCA 34; (1979) 145 CLR 330, at pp

349, 356. However, many functions formerly regarded as

matters of private concern are now carried out by

instrumentalities of government and the question whether the

functions in question are traditionally or peculiarly

governmental is likely to be increasingly unhelpful in

deciding whether the body formed to carry out those

functions enjoys the privileges and immunities of the Crown.

However, if it matters, the provision of hospital services

is not a traditional function of government, and is still

regarded as a matter in which private enterprise as well as

governments will play a part.

The answer to the question must in the end depend upon the

intention to be derived from the statute under which the

body in question is constituted."

13. Registering companies and supervising the conduct and affairs of companies remaining on the register have been traditional functions of government. The first object of the Australian Securities Commission Act 1989 ("the ASC Law") under which the Commission is constituted is expressed in s.1(1)(a) as being to establish the Commission "to administer such laws of the Capital Territory, the States and the other Territories as confer functions and powers under those laws on the Commission". Commission members are appointed by the Governor-General on the nomination of the Minister, and the Commission is subject to direction by the Minister under s.12 about policies it should pursue or priorities it should follow, and under s.14 that it should investigate a matter. Copies of reports of its investigations are required by s.18 to be given to the Minister. By s.138(1) the Commission is a public authority to which Division 3 of Part XI of the Audit Act 1901 applies.

14. The matters to which I have just referred by no means exhaust the indications contained in the ASC Law of the Commission's close relationship with government. However they suffice to imply an intention that the Commission should have, at least when exercising its central functions, the privileges and immunities of the Crown.

15. That subsidiary question having been resolved in favour of the Commission, it is next necessary to consider whether or not s.122 is binding upon the Crown.

16. In Bowman v Secular Society Ltd (1917) AC 406, Lord Parker of Waddington observed at 439:

"My Lords, some stress was laid on the public danger, or at

any rate the anomaly, of the Courts recognizing the

corporate existence of a company all of whose objects, as

specified in its memorandum of association, are

transparently illegal. Such a case is not likely to occur,

for the registrar fulfils a quasi-judicial function, and his

duty is to determine whether an association applying for

registration is authorized to be registered under the Acts.

Only by misconduct or great carelessness on the part of the

registrar could a company with objects wholly illegal obtain

registration. If such a case did occur it would be open to

the Court to stay its hand until an opportunity had been

given for taking the appropriate steps for the cancellation

of the certificate of registration. It should be observed

that neither s.1 of the Companies Act, 1900, nor the

corresponding section of the Companies (Consolidation) Act,

1908, is so expressed as to bind the Crown, and the

Attorney-General, on behalf of the Crown, could institute

proceedings by way of certiorari to cancel a registration

which the registrar in affected discharge of his quasi-judicial

duties had improperly or erroneously allowed."

17. Lord Buckmaster expressly agreed, at 478, with that observation. To similar effect Lawton L.J. pointed out in R v Registrar of Companies ex parte Central Bank of India (1986) 1 All ER 105 at 117:

"Counsel for the registrar invited our attention to the

words of exclusion used in s 98(2), viz that `the

certificate shall be conclusive evidence that the

requirements of this Part of this Act as to registration

have been complied with'. They are words excluding the

admission of evidence, not words excluding the jurisdiction

of the court to grant judicial review. If an unsecured

creditor seeks judicial review solely on the ground that the

chargee did not deliver the prescribed particulars he cannot

put the necessary evidence before the court. But, if he

seeks judicial review on some other ground, as, for example,

if he alleges a registration was obtained by some fraudulent

means, and he can prove his case, maybe the court would

grant judicial review: see National Provincial and Union

Bank of England v Charnley (1924) 1 KB 431 at 454 per Atkin

L.J. Probably the Attorney General could ask for judicial

review to quash a certificate, since the 1948 Act is not so

expressed as to bind the Crown: see Bowman v Secular Society

Ltd (1917) AC 406 at 439-440, 478, (1916-17) All ER Rep 1 at

17, 38 per Lord Parker and Lord Buckmaster. In R v Registrar

of Companies, ex p A-g (17 December 1980, unreported)

decided in the Divisional Court the Attorney General did

apply successfully for the registration of a company, Lini

St Claire (Personal Services) Ltd, to be quashed despite the

provisions of s15(1) of the 1948 Act that a certificate of

incorporation shall be conclusive evidence that all the

requirements of the Act as to registration had been complied

with. Counsel for the registrar accepted that, save in cases

of these special kinds, s 98(2) had the effect of excluding

jurisdiction but it does not in terms provide that any order

or determination of the registrar shall not be called into

question in any court."

18. The conclusion reached in those cases that a provision like s.122 of the Corporations Law which forms part of Chapter 2 is not binding on the Crown remains unaffected by the specific stipulations in the Corporations Act 1989 of those parts of the Corporations Law which do, and do not, bind the Crown. Those stipulations are expressed as follows in ss 16, 17 and 18 of the Corporations Act:

"16 To avoid doubt, a reference in this Part to the Crown

in a particular right includes a reference to an

instrumentality or agency (whether a body corporate or not)

of the Crown in that right.

17(1) Chapter 5 (except Part 5.8) of the Corporations Law of

the Capital Territory binds the Crown in right of the

Commonwealth, of each of the States, of the Capital

Territory, of the Northern Territory and of Norfolk Island.

17(2) To avoid doubt, Chapter 7 of the Corporations Law of

the Capital Territory does not bind the Crown in right of

the Commonwealth, of any State, of the Capital Territory, of

the Northern Territory or of Norfolk Island.

18 Chapter 5 (except Part 5.8) of the Corporations Law of

each jurisdiction other than the Capital Territory binds the

Crown in right of the Commonwealth, of the Capital Territory

and of Norfolk Island."

19. Accordingly, I am led to conclude that s.122 of the Corporations Law is not binding on the Crown as represented by the Commission, so as to preclude it from mounting a direct attack on the validity of the incorporation of S.I.B.

20. It has been contended on behalf of S.I.B. that an order for rectification of the register pursuant to s.1322(4) cannot go to the lengths of depriving a company of its corporate existence. Sub-sections 1322(4) and (6) provide:

"(4) Subject to the following provisions of this section

but without limiting the generality of any other provision

of this Law, the Court may, on application by any interested

person, make all or any of the following orders, either

unconditionally or subject to such conditions as the Court

imposes:

(a) an order declaring that any act, matter or thing

purporting to have been done, or any proceeding

purporting to have been instituted or taken, under

this Law or in relation to a corporation is not

invalid by reason of any contravention of a provision

of this Law or a provision of the constitution of a

corporation;

(b) an order directing the rectification of any register

kept by the Commission under this Law;

(c) an order relieving a person in whole or in part from

any civil liability in respect of a contravention or

failure of a kind referred to in paragraph (a);

(d) an order extending the period for doing any act,

matter or thing or instituting or taking any

proceeding under this Law or in relation to a

corporation (including an order extending a period

where the period concerned ended before the

application for the order was made) or abridging the

period for doing such an act, matter or thing or

instituting or taking such a proceeding;

and may make such consequential or ancillary orders as the

Court thinks fit.

(6) The Court shall not make an order under this section

unless it is satisfied:

(a) in the case of an order referred to in paragraph

(4)(a):

(i) that the act, matter or thing, or the

proceeding, referred to in that paragraph is

essentially of a procedural nature;

(ii) that the person or persons concerned in or

party to the contravention or failure acted

honestly; or

(iii) that it is in the public interest that the

order be made;

(b) in the case of an order referred to in paragraph

(4)(c) - that the person subject to the civil

liability concerned acted honestly; and

(c) in every case - that no substantial injustice has

been or is likely to be caused to any person."

"Register" is defined in s.9 of the Law as meaning:

"(a) in relation to a name - register under Part 4.2;

(b) otherwise - register under this Law."

21. Some guidance as to what is embraced by the concept of "register" used as a substantive is provided by s.120(1) of the Law which stipulates:

"Subject to this Law, where the Commission is satisfied that

an application has been made in accordance with section 118,

it shall:

(a) register the company by registering:

(i) in any case - the application; and

(ii) unless the company is registered as a

company limited by shares and as a

proprietary company - the company's

memorandum and articles (if any); and

(b) allot to the company a registration number distinct

from the registration number of each body corporate

(other than the company) already registered under

this Part, Part 4.1 or a law corresponding to this

Part or Part 4.1."

22. The Commission is also required to keep a number of other registers including one of disqualified directors (s.243), an Australian register of company charges (s.265), a register of registered Australian bodies (s.341), a register of foreign companies (s.344), a register of licensed dealers and investment advisers (s.789), a register of prospectuses (s.1020A), a register of futures licensees (s.1155), a register of auditors (s.1280) and a register of liquidators (s.1282). As well there is a general provision in s.1274(1) that the Commission shall, subject to the Law, keep such registers as it considers necessary in such form as it thinks fit.

23. The Commissioner is specifically empowered to strike entities off, for example, the register of foreign companies, or to remove particulars of licensees from, for example, the register of licensed dealers and investment advisers. It is also significant that the Australian register of company charges is specifically rectifiable by order of the Court under s.274. The Commission on the other hand is empowered to strike entities off, remove particulars from other registers or cancel registration, see for example ss.342, 350, 789(4) and 1155(4), 1280(7) and 1282(8).

24. The legislative ancestor of s.1322(4) was s.539 of the Companies Code, sub-ss(4) and (6) of which were substantially identical to the corresponding sub-sections of s.1322 which have been set out above. In Re Australian Koyo Ltd (1984) 2 ACLC 429, McLelland J. was asked to make an order under s.539(4) of the Code to validate certain appointments of directors and acts done by them after an amendment to the articles of a company had created a lacuna where a power to appoint directors had previously existed. His Honour observed, at 431:

"In my opinion the company's problem is not able to be

solved by an order under sec. 539. Any invalidity in the

conduct of the company's affairs has occurred not by reason

of any contravention of, or failure to comply with, any

provision of the Code or any provision of the memorandum or

articles of association, but rather by reason of a defect in

the articles of association introduced by the amendment of 1

March 1972, and in my view sec. 539(4)(a) has no relevant

application to the unusual circumstances of the present

case, notwithstanding that, being a remedial provision, it

should be given a liberal construction.

I would however add that I can see no reason why the problem

cannot be remedied by appropriate action by the members of

the company. During the hearing of the application it was

made clear that there is no practical difficulty in

convening and holding a general meeting of the company at

which the articles of association could be appropriately

altered, and in accordance therewith new directors could be

validly appointed. Such a meeting might also itself ratify

all the relevant acts of those who have purported to act as

directors since 1 March 1972, and for good measure the new

directors might themselves do so also. I cannot see how

ratification by both the members in general meeting and by

validly appointed directors, particularly if it were

unanimous in each case, could be otherwise than effective to

validate those acts."

26. In Re Voxson Sales Pty Ltd (1989) 7 ACLC 479 various documents were lodged with the National Companies and Securities Commission ("the NCSC") in connection with an appointment, or purported appointment of receivers and managers pursuant to the terms of debentures. The NCSC accepted the documents for registration as required by the Companies Code. The company later applied for the removal from the register of those documents, contending that the appointment of the receivers was made without power. However, Ambrose J. considered that an order could not be made under s.539(4) of the Companies Code for removal of the relevant documents. His Honour observed at 483-485:

"I was informed that there appears to be little authority

dealing with the principles upon which a rectification of

registers kept by the Commission ought be directed. I have

been unable to discover any cases which give any assistance.

...

I have no doubt that in an appropriate case a court may

under sec. 539(4)(b) direct a rectification of a register

which will be achieved in some cases perhaps by altering or

correcting information stored on a microfilm in a microfiche

jacket kept with respect to a particular company.

I am unpersuaded however that a register may be `rectified'

by removing and destroying microfilm of documents which have

been lodged with and accepted by the Commission pursuant to

the various sections of the Code to which I have referred.

The Commission is given significant powers under sec. 31(8)

to refuse to receive a document which is lodged with it.

Steps may well have been taken by the applicants prior to

those documents being lodged to prevent their lodgment. From

time to time proceedings are taken to prevent the filing of

an application to wind up a company. Once an application to

wind up however has been made that fact cannot be `hidden'

from public gaze merely because upon the hearing of the

application it is shown that the application ought never to

have been made.

On the facts of the present application as they appear to me

at any rate the documents lodged with the Commission to

which the applicants object were lodged under a statutory

obligation imposed by the Companies Code. The Commission

registered those documents pursuant to the obligations

imposed upon it by sec. 31 of the Code.

In my view it is not open to the applicants now - nearly two

years after those documents were lodged - to seek to have

them removed in effect from the register kept by the

Commission by arguing that the receivers and managers were

in effect improperly appointed. It was open to the

applicants when they were advised of the intention of

Alliance to appoint receivers and managers on 21 October

1986 before that appointment was made to take steps to

prevent that course of action. Had the appointment been

without power I have little doubt that it would have been

open to the applicants to seek an injunction restraining the

appointment and/or restraining both Alliance and the

receivers and managers involved from lodging the documents

which were in fact lodged.

In my view whatever may be the circumstances in which it is

appropriate to make an order under sec. 539(4)(b) for

rectification of a register kept by the Commission it is not

appropriate in the circumstances disclosed upon this

application for me to do so."

27. Of more direct relevance to the present issue is the view taken of earlier companies legislation that it did not provide a peremptory means of removing from the register companies whose incorporation was vitiated from the outset by non-compliance with a statutory requirement or whose right to remain on the register was lost as a result of supervening circumstances. Thus, in Princess of Reuss v Bos (1871) LR 5 HL 176, Lord Hatherley L.C. pointed out, at 193:

"All we have to ask ourselves is this, my Lords: Has this

company come into existence - has it been born? If it has

been born, I think with regard to another question there can

be no doubt, namely, that it ought to be, as speedily as

possible, extinguished.

The question is, therefore, simply whether it has been

created. If created, there is no power given in this Act of

Parliament, nor in any other Act of Parliament that I am

aware of, by which through any result of a formal

application, like an application by scire facias to repeal a

charter, the company can be got rid of, unless it can be got

rid of by being extinguished through the effect of the Act

of Parliament which provides for the winding up of companies

when they ought, from any circumstances whatsoever, to be

wound up. But your Lordships will remember that, in addition

to various other specified causes for which a company may be

wound up, it may be wound up when the Court shall, for any

reason, think it `just and equitable' that it should be so

wound up (25 and 26 Vict. c.89, s.79, sub-s.5). That

question as to its being just and equitable has reference,

of course, to what is just and equitable in a judicial point

of view, regard being had to all the circumstances of the

case."

"My Lords, it might have been a very wise provision of the

Legislature to say that in a case of that kind - a case

where there was an abuse of the Act of Parliament going on,

a case where, if it had been the matter of a royal grant,

there would have been what is termed a forfeiture of the

franchise, by reason of nonuser or misuser - it might have

been a very wise thing for the Legislature to say that in a

case of that kind there should be some summary, peremptory

mode of reducing or getting rid of the incorporation, and

putting an end to a state of things which was an abuse of,

or a fraud upon, the Act of Parliament, and which ought not

to be allowed to continue. However, the Legislature has not

thought fit to provide any means in the nature of a process

of reduction, in the ordinary sense of the term, for getting

rid of an incorporation in any such circumstances. But, it

appears to me, the Legislature has given powers under this

very Act of Parliament quite large enough to deal with such

a case, whether it was absolutely in the mind of those who

framed these powers or not. I refer to the section which has

been mentioned, which defines the circumstances under which

a company ought to be wound up, or may be wound up."

29. In Scott v Frank F. Scott (London) Ltd (1940) 1 Ch 794 the Court of Appeal held that there was no implied power in the Court to order rectification of the memorandum or articles of a company, noting, at 804, that:

It was argued that in such a case the hardship on the

ordinary shareholders must be capable of remedy by

rectification. We think the short answer to such a case is

that the proper remedy would be to petition the Court for an

order for the compulsory winding up of the company on the

ground that it was in the circumstances just and equitable

so to do. We respectfully agree with the refusal of Bennett

J. to make any order for rectification."

30. In my opinion having regard to its context and legislative history, s.1322(4) does not evince an intention that the Court should have a power, on the application of the Commission, retrospectively to deprive a company of the corporate existence conferred by s.123 of the Law, in addition to and distinct from the express power to make a winding up order having prospective operation conferred by ss.460 and 461. I consider that a grant of such a power would have been at the forefront of a substantive legislative provision and not merely conferred as part of a general facility to relieve from the consequences of procedural and other irregularities.

31. I therefore decline to make an order under s.1322(4)(b) on the present application. However, because I have concluded that S.I.B.'s objects are wider than those permitted to a no liability company, it cannot remain on the register as a company of that class if those objects are not amended. I propose, accordingly, to adjourn this application to a date to be fixed to enable S.I.B., of its own accord, or pursuant to a request of the Commission of the kind contemplated by s.1274(11) to amend its memorandum or to convert to a company limited by shares as allowed by s.167(1)(b). If the opportunity thus afforded be not availed of, S.I.B. would be liable to be wound up on the application either of the Commission or the Attorney-General.

32. The costs of all parties of the proceedings so far are reserved.