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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Change Red Ltd v Barclays Bank Plc [2016] EWHC 3489 (Ch) (15 December 2016) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2016/3489.html Cite as: [2016] EWHC 3489 (Ch) |
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CHANCERY DIVISION
B e f o r e :
____________________
B E T W E N : | ||
CHANGE RED LIMITED | Claimant | |
- and - | ||
BARCLAYS BANK PLC | Defendants |
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(a trading name of Opus 2 International Limited)
Official Court Reporters and Audio Transcribers
25 Southampton Buildings, London WC2A 1AL
Tel: 020 7831 5627 Fax: 020 7831 7737
[email protected]
____________________
MR. P. GOODALL QC (instructed by Dentons UKMEA LLP) appeared on behalf of the Defendant.
____________________
Crown Copyright ©
MASTER MATTHEWS:
"382 Companies qualifying as small: general
(1) A company qualifies as small in relation to its first financial year if the qualifying conditions are met in that year.
[(1A) Subject to subsection (2), a company qualifies as small in relation to a subsequent financial year if the qualifying conditions are met in that year.]
[(2) In relation to a subsequent financial year, where on its balance sheet date a company meets or ceases to meet the qualifying conditions, that affects its qualification as a small company only if it occurs in two consecutive financial years.]
(3) The qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements–
1. Turnover
[Not more than £10.2 million]
2. Balance sheet total
[Not more than 5.1 million]
3. Number of employees
Not more than 50
(4) For a period that is a company's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.
(5) The balance sheet total means the aggregate of the amounts shown as assets in the company's balance sheet.
(6) The number of employees means the average number of persons employed by the company in the year, determined as follows–
(a) find for each month in the financial year the number of persons employed under contracts of service by the company in that month (whether throughout the month or not),
(b) add together the monthly totals, and
(c) divide by the number of months in the financial year.
(7) This section is subject to section 383 (companies qualifying as small: parent companies).
393 Accounts to give true and fair view
(1) The directors of a company must not approve accounts for the purposes of this Chapter unless they are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss–
(a) in the case of the company's individual accounts, of the company;
(b) in the case of the company's group accounts, of the undertakings included in the consolidation as a whole, so far as concerns members of the company.
[(1A) The following provisions apply to the directors of a company which qualifies as a micro-entity in relation to a financial year (see sections 384A and 384B) in their consideration of whether the Companies Act individual accounts of the company for that year give a true and fair view as required by subsection (1)(a)—
(a) where the accounts comprise only micro-entity minimum accounting items, the directors must disregard any provision of an accounting standard which would require the accounts to contain information additional to those items,
(b) in relation to a micro-entity minimum accounting item contained in the accounts, the directors must disregard any provision of an accounting standard which would require the accounts to contain further information in relation to that item, and
(c) where the accounts contain an item of information additional to the micro-entity minimum accounting items, the directors must have regard to any provision of an accounting standard which relates to that item.]
(2) The auditor of a company in carrying out his functions under this Act in relation to the company's annual accounts must have regard to the directors' duty under subsection (1).
474 Minor definitions
(1) In this Part–
[ … ]
"IAS Regulation" means EC Regulation No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards;
[ … ]
"international accounting standards" means the international accounting standards, within the meaning of the IAS Regulation, adopted from time to time by the European Commission in accordance with that Regulation;
[ … ]
"profit and loss account", in relation to a company that prepares IAS accounts, includes an income statement or other equivalent financial statement required to be prepared by international accounting standards;
[ … ]
"turnover", in relation to a company, means the amounts derived from the provision of goods and services [...], after deduction of–
(a) trade discounts,
(b) value added tax, and
(c) any other taxes based on the amounts so derived;
[ … ]
(2) In the case of an undertaking not trading for profit, any reference in this Part to a profit and loss account is to an income and expenditure account.
References to profit and loss and, in relation to group accounts, to a consolidated profit and loss account shall be construed accordingly."
"454 Voluntary revision of accounts etc
(1) If it appears to the directors of a company that–
(a) the company's annual accounts,
(b) the directors' remuneration report or the directors' report, or
[(c) a strategic report of the company,]
did not comply with the requirements of this Act (or, where applicable, of Article 4 of the IAS Regulation), they may prepare revised accounts or a revised report or statement.
(2) Where copies of the previous accounts or report have been sent out to members, delivered to the registrar or (in the case of a public company) laid before the company in general meeting, the revisions must be confined to–
(a) the correction of those respects in which the previous accounts or report did not comply with the requirements of this Act (or, where applicable, of Article 4 of the IAS Regulation), and
(b) the making of any necessary consequential alterations.
(3) The Secretary of State may make provision by regulations as to the application of the provisions of this Act in relation to–
(a) revised annual accounts,
(b) a revised directors' remuneration report or directors' report, or
[(c) a revised strategic report of the company.]
(4) The regulations may, in particular–
(a) make different provision according to whether the previous accounts [ or report] are replaced or are supplemented by a document indicating the corrections to be made;
(b) make provision with respect to the functions of the company's auditor in relation to the revised accounts [ or report];
(c) require the directors to take such steps as may be specified in the regulations where the previous accounts or report have been–
(i) sent out to members and others under section 423,
(ii) laid before the company in general meeting, or
(iii) delivered to the registrar,
or where a [strategic report and supplementary material] containing information derived from the previous accounts or report [have] been sent to members under section 426;
(d) apply the provisions of this Act (including those creating criminal offences) subject to such additions, exceptions and modifications as are specified in the regulations.
(5) Regulations under this section are subject to negative resolution procedure."
Those Regulations are the Companies (Revision of Defective Accounts and Reports) Regulations 2008 ("the Revision Regulations").
"The appellant wishes to prove that the words 'nominal rent' have, in the profession of land surveyors, a particular meaning, namely a rent not intended to represent the true rental value. If that is established it is for the court to say whether the words have that meaning in this Act."
"The duty of this court is to interpret and give full effect to the words used by the legislature. It seems to me really not relevant to consider what a particular branch of the public may or may not understand to be the meaning of those words. It is for the court to interpret the statute as best they can. In so doing, the court may no doubt assist themselves in the discharge of their duty by any literary help which they can find, including of course a consultation of standard authors and reference to well known and authoritative dictionaries which refer to the sources in which the interpretation which they give to the words of the English language is to be found. But to say we ought to allow evidence to be given as to whether there is any such technical meaning, to be followed up of course by evidence as to what that special meaning is, would, I think, be going entirely contrary to that which seems to be the settled rule of interpretation."
"I think it would be altogether contrary to principle and of the worst example if we were to allow this present application to succeed by allowing evidence to be given as to the meaning which a certain branch of the community attaches to these particular words, 'nominal rent'. In my opinion, this application must be refused."
Both Swinfen Eady LJ, who said, "I am of the same opinion", and Phillimore LJ, who said, "I agree", were of the same opinion as the Master of the Rolls, although each gave a short additional judgment.
"As to the various items which are in issue on this appeal, Mr. Myers submits at the outset that Rattee J was wrong to exclude expert evidence as to how accountants would understand the UK GAAP rubric in the context of a Dispute Notice. He submits that such evidence is relevant in assisting the court to assess the degree of particularity (or lack of it) imported by that rubric."
"So far as expert evidence is concerned, in my judgment the judge was right to exclude such evidence in this case, for the reasons he gave. No expert evidence is required to interpret the acronym 'UK GAAP': its meaning is common ground. Nor is the notice framed in technical language. It follows that there is in my judgment no scope for expert evidence as to its meaning. Further, I agree with the judge that the expert evidence on which LHS seeks to rely is relevant only to the question whether the notice sets out 'reasonable details of the grounds for dispute' for the purposes of clause 5(C), which is the very question which the court has to decide."