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Cite as: [2005] 1 IR 21, [2004] IESC 103

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Judgment Title: Registrar of Companies -v- Judge David Anderson & anor

Neutral Citation: [2004] IESC 103

Supreme Court Record Number: 145/03

High Court Record Number: 2002 852 JR

Date of Delivery: 16/12/2004

Court: Supreme Court

Composition of Court: Murray C.J., Hardiman J., Geoghegan J.

Judgment by: Geoghegan J.

Status of Judgment: Approved

Judgments by	Result	Concurring	Dissenting
Murray C.J.	Appeal allowed - set aside High Court Order	Hardiman J.
Geoghegan J.	Appeal allowed - set aside High Court Order	Hardiman J.

Outcome: Allow And Set Aside

- 10 -

THE SUPREME COURT

Murray C.J.
Hardiman J.
Geoghegan J.

145/03

The Registrar of Companies

Applicant / Appellant

-v-

Judge David Anderson and System Partners Ltd

Respondents

Judgment of Murray C.J. delivered on the 16th day of December, 2004.

This is an appeal by the applicant / appellant, the Registrar of Companies, from a refusal of the High Court to grant his application for an order of certiorari by way of judicial review of a decision of the first named respondent made on 25th June, 2002 in the District Court when he struck out two summonses which had been issued by the appellant against the second named respondent company for breach of s. 125 of the Companies Act, 1963 by failing to file annual returns for the said company within the times specified in the Act for the calendar years 2000 and 2001.
It is not in dispute that the second respondents (hereafter the company) failed to file their annual returns as required by s. 125 of the Companies Act, 1963. As a consequence the company was prosecuted for its failure to make the returns pursuant to that section.

Subsequent to the issuing of the summonses for the said prosecution, and before the matter came for hearing before the District Court, the company filed its annual return in respect of each of the years in question.

Because it was late in filing its returns, the company had to pay to the Registrar a significantly higher fee with the return than would have been the case if it had filed the returns by the due date. The fee payable by a company, if it files its annual return on time, is €30.00. However, by virtue of the Companies (Fees) Order, 2001, (S.I. 477/2001) the company was required to pay a fee with the late filing of the annual returns higher than the normal €30.00. The company did not file its annual returns for the years 2000 and 2001 until June 2002 and therefore were subject to the late filing fees imposed by the aforesaid order. Those fees amounted to €1,200.00 in respect of the year 2000 and €379.00 in respect of the year 2001.

Subsequent to the late filing of the returns and the payment of the associated late filing fees, the prosecution by the appellant of the company for failing to make their returns came before the District Court on June 25th, 2002.

At that hearing it was drawn to the attention of the first named respondent that the company had already filed the returns in question, albeit late, and paid the associated late filing fees which were far in excess of what would have been payable if the returns had been lodged in good time.

It would appear that the first named respondent raised a question whether, in the circumstances where the company had already undergone a penalty of paying the increased fees, the subsequent prosecution of the company pursuant to s. 125 of the Act of 1963 “amounted to, or exposed the second named respondent to the risk of double jeopardy …” The quotation is taken from the unchallenged affidavit filed on behalf to the appellant in support of the judicial review application. As appears from that affidavit the District Judge then concluded that there was a risk that the prosecution before him involved a ‘double jeopardy’ for the company and therefore should be struck out. Accordingly, there was no determination on its merits of the prosecution brought against the company.

The issue in the case is whether the learned District Judge exceeded his jurisdiction in refusing to hear the case and in striking out the summonses on the grounds that to proceed with the prosecution would offend against the principle of double jeopardy.

Relevant Statutory Provisions
Section 125(1) of the Companies Act, 1963 as amended by s. 29 of the Company Law Enforcement Act, 2001 provides:-

“Every company shall, once at least in every year, subject to s. 127, make a return to the Registrar of Companies, being its annual return, in the prescribed form.”

Section 125(2) states:-

“If a company fails to comply with this section, … the company and every officer of the company who is in default shall be guilty of an offence …”

Section 125(3) states:-

“Proceedings in relation to an offence under this section may be brought and prosecuted by the registrar of companies.”

The High Court Order
The company was not represented in the High Court, nor has it chosen to be represented in this appeal, no doubt for its own good reasons. This court has available to it a brief approved note of the judge’s ruling in the High Court. The learned High Court judge questioned whether there was a difference between a criminal sanction and an administrative section, both arising out of a breach of statute. Counsel for the Appellant relied on the case of McLoughlin –v- Tuite, The Revenue Commissioners –v- The Attorney General in which, to put it in broad terms at this stage, the distinction between an administrative sanction and a penal sanction was recognised.

The learned High Court distinguished the McLoughlin case from the present case on the basis that double jeopardy was not an issue in the McLoughlin case as there was no power in the income tax legislation to prosecute as well as impose a penalty. His concern was that this particular offence gives rise to a criminal sanction when there is already a sanction in place. He concluded that the second named respondent was correct and refused the relief sought.

Submissions of the appellant
On behalf of the appellant it was submitted that the late filing fee is neither in form nor in substance a criminal penalty but is rather in the nature of the civil or administrative sanction imposed for failing to file the annual return of a company in a timely fashion as required by the act. The object of the late filing fee and the accumulative daily fee is designed to promote and encourage the timely filing of annual returns for the current year. Since its purpose is administrative it was submitted that the payment of the late filing fee does not preclude the appellant from proceeding with a prosecution pursuant to s. 125 for the offence of failing to file a return within the prescribed time. The late filing fees have no relationship with the prosecution and so far as they are relevant at all they are relevant only to issues of mitigation in respect of any fine to be imposed for the actual offence. It was further submitted that the principle of double jeopardy could not be invoked in favour of the company in a prosecution before the District Court unless the filing fee is determined to be in the nature of a criminal penalty. The principle of double jeopardy does not apply simply where there is an overlap between the criminal law on the one hand and the civil law on the other.
Counsel for the appellant also submitted that the courts have considered in a number of cases the characteristics which distinguish civil matters and rely, inter alia, of the decisions of this court in Melling –v- O’Mathghamhna [1962] I.R. 1 and McLoughlin –v- Tuite [1989] I.R. 82. It was submitted that this case law supported the appellants’ contention that the imposition and collection of fees imposed only because of the lateness of the filing of the return of the company was not capable of being considered a criminal penalty in which case the principle of double jeopardy had no application.

Decision
As regards the question as to whether the imposition of late filing fees were both in form and substance purely administrative, I consider first of all the formal nature of the obligation to pay late filing fees. The companies’ registration office has a regulatory responsibility for many tens of thousands of companies. Receiving and dealing with the annual return from each of them must be a formidable administrative task and no doubt there is in place management procedures and structures to deal with them. It is also self-evident that it is in the interest of good and efficient administration that annual returns from companies are filed in time within the due date laid down by law. In an ideal world all such returns should be made in time and it seems to me a legitimate administrative objective to seek, by administrative means, to encourage timely filing of returns and discourage late ones. It is by no means an unfamiliar administrative phenomenon for incentives to be provided so as to encourage such matters as the timely payment of bills or the making of reservations in relation to a particular event, or, to discourage late payers or late compliers with a deadline specified in relation to a particular matter, by charging higher or additional fees.

In this case the liability to pay higher fees is an automatic consequence to the objective fact of a certain statutory deadline having passed. The amount or amounts are fixed and there is no discretion. It is a foreseeable, objective and automatic consequence for lateness in filing an annual return by any company. It is clearly designed to encourage timely filing and discourage the dilatory. That is something which is clearly in the interest of good and efficient administration.

It is manifest that the statutory requirement to pay late filing fees is not in any sense something which involves a criminal process let alone a criminal prosecution.

Therefore, from a formal point of view I have no hesitation in concluding that the obligation to pay extra fees for a later return of a company’s annual report is in form an administrative sanction. That is to say a sanction that does not have as its purpose the punishment of an offence but the achievement of a legitimate administrative objective.

It may not necessarily follow that something which is in the form of an administrative sanction for failing to comply with a statutory obligation could never be considered to be in substance a criminal penalty. It might be argued for example that a sanction which was so excessive and disproportionate to the administrative objective to be achieved was in substance if not in form the imposition of a criminal penalty. I do not think it is necessary to decide whether the imposition of the late return fees in this case could, even arguably, (which I doubt), be considered as being in substance the imposition of a criminal penalty. The reason is that if the late return fees could be classed as the imposition of a criminal penalty, then it would be one which was imposed outside the criminal process automatically and without discretion. Then it is the relevant statutory provisions imposing such fees which would be open to challenge by reason of the fact that it did not involve a criminal process, with all the due process constitutional protections that the latter would entail.

In this case the company were not charged with any offence, no decision or judgment was made by any person or body concerning the individual company, there was no trial of any issue and of course there was no conviction or acquittal.

Double Jeopardy
It has for a long time been a principle of the common law that a person cannot be prosecuted and punished for an offence of which he has already been acquitted or convicted. This is commonly referred to as the rule against double jeopardy. It is a rule which applies to the prosecution for criminal offences. The rule, or what also might be called the notion, of double jeopardy is not normally relied upon in express terms in the sense that if a person is prosecuted for an offence arising out of the same breach of the law or the same essential ingredients for which he has previously been tried and either convicted or acquitted, his defence to the second prosecution will be based on the pleas of autrefois acquit or autrefois convict. If either plea is successful the prosecution may proceed no further. I suppose if a prosecution was initiated against a person for an offence for which he had previously been prosecuted and was awaiting trial, he or she might well invoke the rule of double jeopardy in a general sense but the fundamental basis for resisting the second prosecution would be grounded more on an abuse of process or that the court concerned with the second prosecution had no jurisdiction to deal with the matter when another Court was already seized with an existing prosecution for the same offence.

However one approaches it, the fundamental point is that the rule of double jeopardy and associated protections against being prosecuted twice for the same offence is a rule which arises in relation to the prosecution of offences.

The only criminal process with which the company in this case is concerned with is that which arises out of the two summonses before the District Court. There is and there was not at any time any other criminal process or criminal prosecution.

Since there was no other criminal process, no charge, no trial of guilt or innocence, the question of double jeopardy in relation to the District Court prosecution could not arise.

In that sense the approach of the District Court Judge was misconceived.

That is the only prosecution which has been brought against the company at any stage.

If the company feel aggrieved that the administrative process by which they were required to pay late entry fees imposed a criminal penalty in denial of their constitutional rights, then it has been open to them to challenge that statutory consequence. But that is a different matter to be taken up in different proceedings.

A District Judge must proceed on the basis of the presumption of constitutionality of an act of the Oireachtas. Accordingly, there having been no prior criminal prosecution, no charge, no conviction or acquittal, the second named respondent was incorrect in holding that the prosecution pending before him was affected by the question of double jeopardy. Accordingly, I conclude that he was wrong in law in striking out the summonses and in failing to hear and determine the proceedings brought on foot of them.

For the reasons stated I would allow the appeal and set aside the order of the District Judge striking out the summonses and make the necessary order requiring him to hear and determine the matters before him.

- 7 -

THE SUPREME COURT

Murray C.J.
Hardiman J.
Geoghegan J.
145/03

BETWEEN/

THE REGISTRAR OF COMPANIES

Applicant/Appellant

and

DISTRICT JUDGE ANDERSON AND
SYSTEM PARTNERS LIMITED

Respondent/Respondents

JUDGMENT of Mr. Justice Geoghegan delivered the 16th December 2004

It is provided in the companies’ legislation that fees may be charged for the registration of documents in the Companies’ Office and that “different” (which in practice means increased) fees may be charged where the registration of documents is not done within a specified statutory time. The second-named respondent was late in filing returns and had to pay substantially increased fees as a result also under the companies legislation it is provided that a company which does not make its annual return within the prescribed time is guilty of an offence and may be prosecuted by the Registrar of Companies. In this case the second-named respondent, after paying the substantially increased fees, was also prosecuted for late returns in two respective years under two separate charges before the District Court. The first-named respondent made an order striking out the two charges on the grounds that the second-named respondent was being subjected to double jeopardy. The Registrar sought and obtained leave to bring judicial review proceedings seeking to quash the order of the District Court. The proceedings duly came before the High Court (Quirke J.) for hearing. He upheld the view of the District Court judge that it was a case of double jeopardy and refused the application for judicial review. Before this court now is an appeal from that decision.

It is important that I should refer to the relevant legislation and then go on to define as best I can the principle of double jeopardy.

S. 369 of the Companies Act, 1963 provided for a table of fees for the registration or delivery of documents to the registrar of different kinds and in different amounts depending on the category of return. These fees were set out in the Eighth Schedule to the Act. S. 395 of the Companies Act, 1963 as amended empowers the relevant Minister to alter the fees by order. Subsection 3 of the amended section reads as follows:

“(3) To avoid doubt, an alteration to the Eighth Schedule under subsection (2)(a) may provide for different fees to be charged for the registration of documents depending on whether they are delivered to the Registrar of Companies within a specified time or at various times after a specified time.”

As a consequence of other permitted Statutory Instruments made by the Minister the annual return had to be completed within 77 days of the Annual General Meeting and filed forthwith with the Companies Registration Office. Pursuant to such statutory instruments altering the fees made by the Minister increased fees were imposed for late filing. The increased fees were cumulative up to a fixed maximum. €379 and €1,200 were paid by the second-named respondent in late filing fees in respect of returns for years ending 31st December, 2001 and 31st December, 2000 respectively. Although Miss Mary Shortall, the Executive Officer in the enforcement unit of the Companies Registration Office who swore the principal affidavit on behalf of the appellant uses expressions such as “late filing penalty”, the word in the Act and in the relevant Statutory Instruments consistently appears to be “fee". There is nothing wrong in calling a substantially increased fee for a late return a “penalty” provided that that word is not given the narrow connotation of punishment. It would seem perfectly obvious that the motivation behind imposing substantially increased fees for late filing is one of deterrent rather than punishment. Of course, again difficulty is encountered with terminology because in the criminal jurisdiction a sentence may have a deterrent aspect. Throughout the ordinary commercial world there may often be extra payments imposed for late documents but by no stretch of the imagination could the increased fee be regarded as a punishment for a criminal offence. The charges by their very nature and character are administrative whether they be standard charges or increased charges to deter late applications. For this reason, I am satisfied that however legitimate in a moral sense the grievance of the second-named respondent may be, there can be no question of the principle of double jeopardy having any relevance.

The principle of double jeopardy is well known throughout the common law world. In the United States of America it has constitutional status stemming as it does from the Fifth Amendment to the U.S. Constitution. This derives from the words “nor shall any subject for the same offence to be twice put in jeopardy of life or limb”. It has been said that there are three essential protections included in the principle of double jeopardy. These are:

1. Protection from being retried for an acquittal.
2. Protection from retrial after a conviction.
3. Protection from being punished multiple times for the same offence.

The principle of double jeopardy has no application whatsoever as between one criminal proceeding and one civil proceeding. For the decision of the first-named respondent to be upheld therefore it must be demonstrated that a criminal punishment had already been imposed. The nature of a criminal proceeding has been considered in a number of Irish cases such as Melling v. O Mathghamhna and the Attorney General [1962] I.R. 1 and several other cases also. Lavery J. in the Melling case made the following observation at p. 9.

“Apart from authority, it seems to me clear that a proceeding, the course of which permits the detention of the person concerned, the bringing of him in custody to a garda station, the entry of a charge in all respects and the terms appropriate to the charge of a criminal offence, the searching of the person detained and the examination of papers and other things found upon him, the bringing of him before a district justice in custody, the admission to bail to stand his trial and the detention in custody if bail be not granted or is not forthcoming, the imposition of a pecuniary penalty with the liability to imprisonment if the penalty is not paid has all the indicia of a criminal charge. The penalty is clearly punitive in character, being £100 or treble the duty paid value of the goods.”

Apart from the penal element in the fee what happened in this case goes nowhere near what the courts have regarded as a criminal charge. In the same case Kingsmill Moore J. at p. 24 had this to say:

“There was some debate during the course of the argument as to the interpretation of the words ‘criminal charge’. I take it as meaning no more than an accusation in proper legal form of having committed a criminal offence.

What is a crime? The anomalies which still exist in the criminal law and the diversity of expression in statutes make a comprehensive definition almost impossible to frame. ‘The criminal quality of an act cannot be discerned by intuition; nor can it be discovered by reference to any standard but one: is the act prohibited with penal consequences?’ said Lord Atkin in

Propriety Articles Trade Association v. Attorney General for Canada

[1931] A.C. 301 at 324. A recent textbook, Cross and Jones, suggests as a definition ‘a crime is a legal wrong the remedy for which is the punishment of the offender at the instance of the State’.”

Of course, it is true that a statutory summary offence may not require mens rea and may be punishable merely by a fine. But the formalities whereby the defendant is tried are obviously criminal in nature and there is a prison sentence in default of payment of the fine. I cannot see that there is any analogy between that and a perfectly sensible provision that as a deterrent against late filing of returns in the Companies Registration Office, the company in default must pay increased fees. It is, of course, open to argument that the increased fees are excessive or work a hardship or unfairness but they are still not a criminal penalty and if a company such as the second-named respondent has any conceivable remedy for such alleged unfairness it lies elsewhere than pleading double jeopardy in the criminal prosecution.

The criminal prosecution comprised, as I have already mentioned, two charges and the offences alleged were contrary to s. 125 of the Companies Act, 1963 as amended by s. 15 of the Companies (Amendment) Act, 1982 and s. 244 of the Companies Act, 1990. This was quite clearly by the terms of the statute a criminal prosecution. Mary Shortall in her affidavit states that in April, 2002 a number of the companies in default with filing “were randomly selected for prosecution pursuant to section 125 of the Companies Act, 1963”. This policy of random selection may well aggravate the sense of grievance but it is not something which is relevant on this appeal. As far as this appeal is concerned, the only question is whether the appellant was subjected to double jeopardy when he was prosecuted. For the reasons which I have indicated, I am satisfied that he was not. Accordingly, I would allow the appeal, set aside the order of the High Court and substitute for it an order of certiorari quashing the order of the District Court and remitting the prosecutions to the District Court for trial. While it will obviously be a matter for the District Court, it would seem to be in accordance with established jurisprudence that the payment of the substantially increased fees would be a legitimate matter to take into consideration by way of mitigation of penalty if there is a conviction.

Regr. of Cos. v. DJ Anderson & Ors.