The Gazette 1992

JUNE 1992

GAZETTE

"In my judgement, the correct approach is that adopted in the South India case, namely to examine the actual activities which are revealed on the evidence in order to decide whether or not they qualify. Examining those described above, 1 have no hesitation whatsoever in concluding that all but the last are no more than loose ends which needed to be tied up after the cessation of business; and the last, which . . . involves no more than maintaining a point of contact with English solicitors, does not in my judgement constitute a business activity being carried out here by the defendants at the relevant date." To Register or Not to Register? A particular problem arises for the solicitor acting for a lending institution where a foreign company, without any property or established place of business in Ireland, borrows money for the express purpose of acquiring a business premises in Ireland, which may well become in the future its established place of business. Is one to insist upon registration of the charge, if indeed the operative date for determining whether a company has an established place of business is the date on which the charge is created? This point was considered in Re Oriel Ltd where Oliver LJ said " . . . It is difficult to see how, when premises are acquired for the first time and immediately charged, the established place of business which the company has can be the premises charged. There is, in fact, no evidence that the company had any connection with those premises prior to the charge beyond being designated, prior to its incorporation, as the intended owner." It is submitted that where there is any doubt, it is best to insist upon registration rather than leave oneself open to a court finding that an unregistered charge ought to have been registered, and is consequently void. Proposals for Reform It should be noted that at present, an "established place of business" is a basic prerequisite to the requirement that the particulars of a charge created by a foreign company must be delivered to the Companies Registration Office. So, only where a

"The defendant bank are an export- import bank, not a high street bank. They have both premises and staff within the jurisdiction. They conduct external relations with other banks and financial institutions. They carry out preliminary work in relation to granting or obtaining loans. They seek to give publicity to the foreign bank and encourage trade between Korea and the. United Kingdom, and they consult with other banks and financial institutions on the usual operating matters. They have therefore an established place of business within Great Britain and it matters not that they do not conclude within the jurisdiction any banking dealings with the general public as opposed to other banks or financial institutions". This has been recently restated in the case of Rome -v- Punjab National Bank (No 2) [1989] BCLC 328 where Hirst J noted that the Court of Appeal had held in the South India case " . . . that it was sufficient to show the establishment of an office in Great Britain where activities incidental to the main business of the company were carried on, and that it was unnecessary to show that a substantial part of its business was conducted within the jurisdiction." In the Punjab National Bank case a bank which was registered on the external register ceased to do business in the UK. A hiving down operation began and while the company did no new business in the UK, two employees remained to tie up "loose ends". These two persons were registered as persons upon whom proceedings could be served, satisfying the requirements of the English equivalent to our Part XI. However, notice was served on the registrar of companies that after a certain date the company would cease to have a place of business in the UK. He responded by closing the company file. Even though this had been done proceedings were served on one of the employees, and this was held to be a valid service. Incidental to this it was also held that at the time of service of the writ, the company did not have an established place of business. As to the determination of this question, Hirst J said:

determining whether or not a company has an established place of business in Ireland could be, does it make sense to serve documents on the company at that place? In summary, some of the factors which will go towards the finding by a court that a foreign company has an established place of business include: business although the company does not necessarily have to own or lease a premises, • having a visible sign or physical indication that the company is connected to a place, • that the company's physical connections are more than merely fleeting or transitory, • that there is a degree of permanence and ensconcement about that place of business, • a regularity of business being conducted there by the company. Clearly, any precise definition of what is meant by established place of business is fraught with difficulty, the problem being analagous to attempting the perennial definition of an elephant. However, occasions arise when the courts must decide this question, and the only way this can be done is by weighing all the evidence and circumstances of the individual case. • having a specified or identifiable place at which it carries on The mere fact that a foreign company has an agent who is present in Ireland does not mean that it will be deemed to have a "place of business" in the State: Donovan -v- North German Lloyd Steamship Co [1933] IR 33. 12 Where the Irish Business is Only Incidental to its Main Business It has also been decided that a company will be deemed to have an established place of business even if the business carried on there is only incidental to its main business. This was decided in the case of South India Shipping Corp Ltd -v- Export- Import Bank of Korea [1985] 2 All ER 219 where Ackner J said of the facts

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