Home | Databases | WorldLII | Search | Feedback Vanuatu Law Reports

Public Prosecutor v Astrolabe Nominees Ltd [1993] VULawRp 8; [1980-1994] Van LR 666 (30 November 1993)

[1980-1994] Van LR 666

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU

CRIMINAL JURISDICTION

Criminal Case No. 35 of 1993

PUBLIC PROSECUTOR

v

ASTROLABE NOMINEES LTD

Coram: Chief Justice Vaudin d'Imecourt

Ms Bothmann Barlow for defendant
Mr Baxter Wright, Public Prosecutor

JUDGMENT

[CRIMINAL LAW - COMPANIES - role of company secretary - consideration of offences "consented to or connived at by (defendant)"]

In this case as in every criminal case in this jurisdiction, I am both the judge of law and the judge of facts. As the judge of law, I must direct myself as to the law in such a way that the defendant is able to know what law I apply to his case, so that if I have misdirected myself as to the law, he is then able to appeal the decision. As the judge of facts, I also have the duty to summarise the facts in such a way as to allow the defendant to know that I have applied my mind to the facts as given in his case.

The defendant has pleaded not guilty to 396 charges relating to failing to pay contributions under section 26(1) & 50(2) of the V.N.P.F. Act CAP 189 and to 5 offences relating to failing to pay surcharges contrary to sections 26(2) & 50(1)(e) of the same Act.

In this case admissions are made by the defendant, pursuant to Section 84 of the Criminal Procedure Code [CAP 136] that Pacific Veneers Limited, a company registered with the V.N.P.F. in accordance with the provisions of the Act, has failed to pay its employees' contributions under the Act and that the defendant was appointed Company secretary to Pacific Veneers Limited on the 27th October 1992 and holds office to date.

In order to prove its case against the defendant, the prosecution must establish the defendant's liability under Section 53 of the V.N.P.F. Act which reads as follows:

"Where an offence against this Act has been committed by a body corporate, ... any person who at the time of the commission of the offence was a director, manager, secretary or other similar officer or a partner of the body corporate, .... or was purporting to act in such capacity shall, as well as such body corporate, .... be deemed to be guilty of that offence unless he proves that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances."

In every criminal case the burden of proof lies on the prosecution and it is not for the defence to prove its innocence. The burden which lies on the prosecution is a heavy one. It must prove its case beyond a reasonable doubt. In other words it must usually prove each and every element of the charge alleged against the defendant so as to make me sure that the defendant is guilty as charged. This particular case differs from the usual criminal case in as much as here once the prosecution has proved beyond a reasonable doubt that a body corporate has committed an offence under the Act, the defendant who is that body corporate's company secretary is deemed to be guilty likewise of that offence unless it proves that the offence was committed without his consent or connivance and it exercised all such diligence to prevent the commission of the offence as it ought to have exercised, having regard to the nature of its functions in that capacity and to all the circumstances.

Whenever a criminal burden shifts onto the defence then that burden is discharged on a balance of probabilities. That in Vanuatu is a statutory obligation under Section 10 of the Penal Code CAP 135 which expressly says so.

In this case because of the admissions made by the defence under Section 84 of the Criminal Procedure Code, the prosecution has proved those elements that is required to be proved by them beyond a reasonable doubt. It is therefore incumbent on the defence to prove on a balance of probabilities, that the offences were committed by the corporate body without its consent or connivance and that it exercised all such diligence to prevent the commission of the offences as it ought to have exercised, with regard to the nature of its functions in the capacity of company secretary and to all the circumstances.

The case for the prosecution was brief and indeed the facts were all admitted.

The defence called only one witness, Mr Phillip Wayne Rundle. The gist of his evidence in chief was that he was a partner in a firm of accountants known as Moore Stephens. That he was also a director of the defendant company. He stated that the sole service provided by the defendant company to the corporate body the principle of this charge, namely Pacific Veneers Limited, was as a company secretary in the terms of a letter from Moore Stephens, dated 18th May 1992, to Mr David Cam, the managing director of Pacific Veneers Limited which limited its services solely to the duties expressed in that letter in the following terms:

"To supply registered office and company secretary; to prepare annual return, arrange signing and lodgement and including applications for extension etc."

He went on to say that the defendant was not in any way responsible for the day to day administration of the company, nor did it have the power to sign on behalf of the company or to enter into any agreements with third parties binding the company. It performed, for a relatively modest sum, the limited functions that I have already referred to. The letter of the 18th May, he said, referred to other services which Moore Stephens also provided in their capacity as chartered accountants, which were not the corporate services therein referred to, which were to be provided by the defendant company. I suppose that one of the criticism that can be levelled at Moore Stephens is the rather negligent and slap dash manner in which that letter was drafted. Firstly, the offer comes on a Moore Stephens letterhead and not on one in the defendant's name; secondly it is not made clear in that letter who is to supply which service. But then I note, in fairness to Mr Rundle, that the letter was written and signed not by him but by a Mr Robert Agius, another partner in the same firm. Mr Rundle also produced copies of Pacific Veneers Limited's Memorandum and Articles of Association. They are singularly silent about the role of the company secretary.

In cross-examination Mr Rundle did not depart in any material way from anything that he had said in chief.

That is the totality of the evidence in this case.

It is submitted on behalf of the prosecution that the role of the company secretary cannot be so limited by agreement as to defeat the purpose of Section 53 of the V.N.P.F. Act and thus to avoid punishment for the default in taking positive action. It is submitted that the purpose of the Section is to catch all those officers of the corporate body who fail to take positive action to see that payment is made.

I am not assisted by the Companies Act as to the role of a company secretary.

Mr Baxter-Wright on behalf of the prosecution, refers to the case of Panorama Developments v. Fidelis Fabrics [1971] 2 QBD 711, at 716 and 717 passages in the judgment of Lord Denning, M.R. and Salmon L.J. in which they describe the modern roles of companies secretaries as being much more important than in 1887. They both refer to that enhanced status as being "recognised by statutes". They both also refer to the ostensible authority which attaches to the post of company secretary in the context of civil liability. Whatever the ostensible authority of modern company secretaries in England may be, I am bound by Vanuatu legislation which is silent on the matter. The general principle at common law is that a company secretary is not a party to the carrying on of the day to day business of the company and that while merely performing the duties appropriate to the office of secretary, is not concerned in the management of the company.

In any event it is not the ostensible authority of a company secretary with which we are here concerned in order to render him liable under Section 53, but his actual authority. Within that section I must have regard not only to the nature of his function but to all the circumstances.

Mr Phillip Rundle was a palpably truthful witness. I have no difficulty in accepting his evidence that the offences were neither consented to nor connived by the defendant. Having regard to the nature of defendant company's functions in its capacity as company secretary to Pacific Veneers Limited and to all the circumstances of this case, within the terms of Section 53 I find as a matter of fact that the defendant company has discharged its burden under that section.

Therefore, with regards to each and every one of the 396 counts against the defendant I return a verdict of Not Guilty.

30.11.93

CHARLES VAUDIN D'IMECOURT
CHIEF JUSTICE