Companies (Registration of Securities) Act 1918 (NSW)

COMPANIES (REGISTRATION OF

SECURITIES) ACT.

Act No. 37, 1918.

An Act to a m e n d t h e law re la t ing to companies ;

to provide for t h e reg is t ra t ion of cer ta in

secur i t ies ; to amend t h e Companies Act, 1899, t h e Bills of Sale Ac t of 1898, and cer ta in o the r A c t s ; and for purposes consequen t

the reon or inc identa l t h e r e t o . [Assented to .

12th December , 1918.]

lative Council and Legislative Assembly of New South BE it enacted by the King's Most Excellent Majesty, by and with the advice and consent of the Legis­

Wales in Parliament assembled, and by the authority of the same, as follows :—

1. This Act may be cited as the " Companies (Regis­ tration of Securities) Act, 1918." I t shall be read with the Companies Act, 1899, hereafter referred to as " T h e Principal Act."
2. In this Act, unless the context otherwise re­ quires,—

" Company " means company formed or registered or deemed to have been formed or registered under Part I of the Principal Act.

(a) a mortgage or charge for the purpose of securing any issue of debentures, not being a specific mortgage or charge over lands duly registered under the provisions of the Real Property Act, 1900, or the Registration of Deeds Acts; or (b)

" Debenture " includes debenture stock.
" Prescribed" means prescribed by regulations.

3 . (1) Every mortgage or charge created after the commencement of this Act by a company and being either—

(b)	a mortgage or charge on uncalled or unpaid share capital of the company ; or
(c)	a mortgage or charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale; or
(d)	a mortgage or charge on any book debts of the company; or
(e)	a floating charge on the undertaking or properly of the company,

shall, so far as any security on the company's property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company, unless the instrument (if any) by which the mortgage or charge is created or evidenced, or a copy thereof accompanied by an affidavit verifying the execution of the mortgage, and in the case of a copy also verifying it as a true copy of such mortgage are filed with the registrar for registration in manner required by this Act w i t h i n thirty days after the date of its creation, but without prejudice t o any contract or obligation for repayment of the money thereby secured; and when a mortgage or charge becomes void under this section the money secured thereby shall immediately become payable :

Provided that—

(i)  in the case of a mortgage or charge created out of New South Wales, thirty days after the date o n which the instrument or copy could, in due course of post, and if despatched with due diligence, have been received in New South Wales, shall be substituted for thirty days after

the date of the creation of the mortgage or

charge, as the time within which the instrument
or copy is to he filed wi th the registrar ; and

(ii)   where the mortgage or charge is created in

New South Wales, but comprises property outside that State, the instrument creating or purporting to create the mortgage or charge or a copy thereof, accompanied by a verifying affidavit as aforesaid, may be forwarded for registration notwithstanding that further pro­ ceedings may be necessary to make the

mortgage

mortgage or charge valid or effectual according to the law of the country, State, or colony in which the property is situate; and

(iii)   where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company shall not for the purposes of this section be treated as a mortgage or charge on those book debts.

(2) The registrar shall keep, with respect to each company, a register in the prescribed form of all the mortgages and charges created by the company after the commencement of this Act, and requiring registra­ tion under this section, and shall, on payment of the prescribed fee, enter in the register, with respect to every such mortgage or charge, the date of creation, the amount secured by it, short particulars of the property mortgaged or charged, and the names of the mortgagees or persons entitled to the charge.

(3) Where a series of debentures containing, or

giving by reference to any other instrument, any charge to the benefit of which the debenture-holders of that series arc entitled pari passu is created by a company, it shall be sufficient if there are delivered to or received by the registrar within thirty days after the execution of the deed containing the charge or, if there is no such deed, after the execution of any debentures of the series, or if it or they is or are executed out of New South Wales then within thirty days after the date on which

it or they would , in due course of post, if despatched	with clue diligence, have been received in New South
Wales, the following particulars :—

(a)	The total amount secured by the whole series ; and
(b)	the dates of the resolutions authorising the issue of the series and the date of the covering deed, if any, by which the security is created or defined ; and
(c)	a general description of the property charged ; and
(d)	the names of the trustees, if any, for the
debenture-holders, together

together with the deed containing the charge or a verified copy thereof or, if there is no such deed, one of the debentures of the series; and the registrar shall, on payment of the prescribed fee, enter those particulars in the register :

Provided that, where more than one issue is made of debentures in the series, there shall be filed with the registrar for entry in the register particulars of the date and amount of each issue, but an omission to do this shall not affect the validity of the debentures issued.

(4) Where any commission, allowance, or discount has been paid or made either directly or indirectly by the company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to be sent for registration under this section shall include particulars as to the amount or rate per centum of the commission, discount, or allow- ance so paid or made, but an omission to do this shall not affect the validity of the debentures issued :

Provided that the deposit of any debentures as security for any debt of the company shall not for the purposes of this provision be treated as the issue of the debentures at a discount.

(5) The registrar shall give a certificate under his hand of the registration of any mortgage or charge registered in pursuance of this section, stating the amount thereby secured, and the certificate shall be

as to registration have been complied with. conclusive evidence that the requirements of this section

(6) The company shall cause a copy of every certificate of registration given under this section to be endorsed on every debenture or certificate of debenture stock which is issued by the company, and the payment of which is secured by the mortgage or charge so registered:

Provided that nothing in this subsection shall be con­ strued as requiring a company to cause a certificate of registration of any mortgage or charge so given to be endorsed on any debenture or certificate of debenture stock which has been issued by the company before the

mortgage or charge was created.  (7) 

(7) I t shall bo the duty of the company to send to the registrar for registration the instrument (if any) by which the mortgage or charge is created or evidenced, or a copy thereof, accompanied by an affidavit verifying the execution of the mortgage, and in the case of a copy, also verifying it as a true copy of such mortgage, and the particulars of the issues of debentures of a series, requiring registration under this section ; but registration of any such mortgage or charge may be effected on the application of any person interested therein.

Where the registration is effected on the application of some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration.
(8) The instruments or copies of instruments creating any mortgage or charge tiled with the registrar and the register kept in pursuance of this section shall be open to inspection by any person on payment of the prescribed fee, not exceeding one shilling for each inspection.
( ) Every company shall cause a copy of every instrument creating any mortgage or charge requiring registration under this section to be kept at the registered office of the company : Provided that, in the case of a series of uniform debentures, a copy of one such deben­ ture shall be sufficient.

(10) No mortgage or charge requiring registration under this section or the Principal Act shall require to be filed or registered under the provisions of the Bills of Sale Act of 1898, anything contained in that Act or any Act

amending the same to the contrary notwithstanding. (11) Where a mortgage requiring registration

under this Act is created within or on the expiration of

thirty days after the creation of a prior unregistered mortgage, and comprises all or any part of the property comprised in the prior mortgage, and the subsequent mortgage is given as a security for the same debt as is secured by the prior mortgage, or for any part of such debt, then to the extent to which such subsequent mortgage is a security for the same debt or part thereof, and so far as respects the property comprised in the

prior

prior mor tgage , such subsequen t mor tgage shal l not be operat ive or have any validity a t law or in equi ty unless i t is proved to t he satisfaction of t h e cour t hav ing cognizance of t h e case t h a t t h e subsequen t mor tgage was given in good faith for the purpose of cor rec t ing some mate r ia l error in t h e pr ior mor tgage , and not for t he purpose of avoiding or evad ing th is A c t .

4. (1) Every c o m p a n y shall , wi th in th ree m o n t h s

after t h e commencemen t of th i s Ac t , file w i th t h e

reg is t ra r for regis t ra t ion a list of all mor tgages and charges created by i t before such commencemen t , wh ich have not been whol ly satisfied, a n d which under t h e provisions of this A c t Mould have required regis t ra t ion had they been created after such c ommenc eme n t , toge ther wi th par t icu lars of the da te of creat ion, t h e a m o u n t secured by the mor tgage or charge , and short par t icu la rs of the p roper ty mor tgaged or charged, and (except in t he case of securi t ies to bearer) t he names of t h e mor tgagees or persons ent i t led to the cha rge .

The reg i s t ra r shall , on p a y m e n t	of	t he prescribed	fee,
en te r	such par t i cu la rs in t h e regis ter of	mor tgages	and
charges k e p t	in p u r s u a n c e	of t he provisions of th is	A c t :

Provided t h a t t h e neglect of t h e company to comply wi th the provisions of th i s section shall no t prejudice t h e r igh t s unde r any such mor tgage or cha rge of any person in whose favour t h e m o r t g a g e or cha rge was made .

(2) I f any company fail to comply wi th t h e pro- visions of th is section, t he company and every director, manage r , or secretary thereof, or o ther person who is knowingly a pa r ty to t he defaul t , shall be l iable to a pena l ty no t exceeding fifty pounds for every day d u r i n g

which the defaul t con t inues .

5. (1) I f any person obta ins a n order for t he appo in t ­

m e n t	of a receiver or m a n a g e r	of t he p rope r ty of	a
company ,	or appoin ts such a receiver	or m a n a g e r	u n d e r

any powers contained in a n y i n s t r u m e n t , he shall wi th in seven days from t h e da te of t h e order or of t he appoin t ­ m e n t unde r t h e powers conta ined in t he i n s t r u m e n t give

not ice of t he fact to t h e regis t rar , a n d the reg is t ra r shall ,

on p a y m e n t of the prescribed fee, en te r t he fact in t he

regis ter of mor tgages and charges .

(2)

(2) If any person makes default in complying with the requirements of this section lie shall be liable to a penalty not exceeding five pounds for every day during which the default continues.

( 1 ) Every receiver or manager of the property of a company who after the commencement of this Act has been appointed under the powers contained in any instrument, and who lias taken possession, shall, once in every half year while he remains in possession, and also on ceasing to act as receiver or manager, file with the registrar an abstract in the prescribed form of his receipts and payments during the period to which the abstract relates, and shall also on ceasing to act as receiver or manager file with the registrar notice to that effect, and the registrar shall enter the notice in the register of mortgages and charges.

6 .

(2) Every receiver or manager who makes default in complying with the provisions of tills section shall be liable to a penalty not exceeding fifty pounds.

7 . A judge, on being satisfied that the omission to register a mortgage or charge within the time herein­ before required, or that the omission or misstatement of any particular with respect to any such mortgage or charge, was accidental, or due to inadvertence or to

some other sufficient cause, or is not of a nature to

prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief may, on the application of the company or any person interested, and on such terms and con­ ditions as seem to the judge just and expedient, order

case may be, that the omission or misstatement be	that the time for registration be extended, or, as the
rectified.
8 . The registrar may, on evidence being given to his satisfaction that the debt for which any registered mortgage or charge was given has been paid or satisfied, enter a memorandum of satisfaction on the register, and shall, on payment of the prescribed fee, furnish the company with a copy thereof.
9 . The registrar shall keep an index, in the prescribed form and with the prescribed particulars, of the mortgages or charges registered with him under
this Act, 1 0 .

(1) If any company makes default in filing with the registrar for registration the instrument (if any) by which any mortgage or charge is created, or the verified copy thereof, or in delivering to the registrar the particulars of the issues of debentures of a series, requiring registration under the foregoing provisions of this Act, then, unless the registration has been effected on the application of some other person, the company, and every director, manager, secretary, or other person who is knowingly a party to the default, shall on conviction be liable to a penalty not exceeding fifty pounds for every day during which the default continues.

1 0 .

(2) Subject as aforesaid, if any company makes default in complying with any of the requirements of this Act as to the registration with the registrar of any mortgage or charge created by the company, the com­ pany and every director, manager, and other officer of the company, who knowingly and wilfully authorised or permitted the default shall, w i t h o u t prejudice to any other liability, be liable on summary conviction to a penalty not exceeding one hundred pounds.

(3) If any person knowingly and wilful ly author­ ises or permits t h e delivery of any debenture or certificate of debenture stock requiring registration with the registrar under the foregoing provisions of this Act without a copy of the certificate of registration being endorsed upon i t , be shall, w i t h o u t prejudice to any other liability, b e liable on summary conviction to a penalty not exceeding one hundred pounds.

1 1 . (1) E v e r y company shall keep a register

of mortgages and enter therein all mortgages and charges specifically affecting property of the company, giving in each case a short description of the property mortgaged or charged, the amount of the mortgage or charge, and (except in the case of securities to bearer)

the; names of the mortgagees or persons entitled thereto.

(2) If any director, manager, or other officer of

the company knowingly and wilfully authorises o r per­ mits the omission of any entry required to be made in pursuance of this section, he shall be liable to a penalty not exceeding fifty pounds.

1 2 . (1) The copies of instruments creating any mortgage or charge requiring registration under this Act with the registrar, and the register of mortgages kept in pursuance of the last foregoing section, shall he open at all reasonable times to the inspection of any creditor or member of the company without fee, and the register of mortgages shall also be open to the inspection of any other person on payment of such fee, not exceeding one shilling for each inspection, as the company may prescribe.

(2) If inspection of the said copies or register is refused, any officer of the company refusing inspection, and every director and manager of the company authorising or knowingly and wilfully permitting the refusal shall be liable to a penalty not exceeding five pounds, and a further penalty not exceeding two pounds for every day during which the refusal continues; and, in addition to the above penalty, any judge, sitting in chambers, may by order compel an immediate inspection of the copies or register.

1 3 .      (1) Every register of holders of debentures of a

company shall, except when closed in accordance with the articles during such period or periods (not exceeding in the whole thirty days in any year) as may be specified in the articles, be open to the inspection of the registered holder of any such debentures, and of any holder of shares in the company, but subject to such reasonable restrictions as the company may in general meeting impose, so that at least two hours in each day are appointed for inspection, and every such holder may require a copy of the register or any part thereof on

required to be copied.	payment of sixpence for every one hundred words
(2) A copy of any trust deed for securing any issue of debentures shall be forwarded to every holder of any such debentures at his request on payment in the case of a printed trust deed of the sum of one shilling or such less sum as may be prescribed by the company, or, where the trust deed has not been printed, on payment of sixpence for every one hundred words required to be copied.
(3) If inspection is refused, or a copy is refused or not forwarded, the company shall be liable to a

penalty

penalty not exceeding five pounds, and to a further penalty not exceeding two pounds for every day during which the refusal continues, and every director, manager, secretary, or other officer of the company who knowingly authorises or permits the refusal shall incur the like penalty.

1 4 .      (1) Where either before or after the passing of

this Act, a company has redeemed any debentures previously issued, the company, unless the articles or the conditions of issue expressly otherwise provide, or unless the debentures have been redeemed in pursuance of any obligation on the company so to do (not being an obliga­ tion enforceable only by the person to whom the redeemed debentures were issued or his assigns), shall have power, and shall be deemed always to have had power, to keep the debentures alive for the purposes of re-issue, and where a company has purported to exercise such a power, the company shall have power, and shall be deemed always to have had power, to re-issue the debentures, either by re-issuing the same debentures, or by issuing other debentures in their place. And upon such a re-issue the person entitled to the debentures shall have, and shall be deemed always to have had, the same rights and priorities as if the debentures had not previously been issued.

(2) Where, with the object of keeping deben­

tures alive, for the purpose of re-issue, they have, either before or after the passing of this Act, been transferred to a nominee of the company, a transfer from that nominee shall be deemed to be a re-issue for the purposes of this section.

(3) Where a company has, either before or after

the passing of this Act, deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not he deemed to have been redeemed by reason only of the account of the company having ceased to be in debit whilst the debentures remained so deposited.

(4) The re-issue of a debenture or the issue of another debenture in its place under the power by this section given to or deemed to have been possessed by a company, whether the re-issue or issue was made before or after the passing of this Act, shall be treated as the

issue

issue of a new debenture for the purposes of stamp duty, but it shall not be so treated for the purposes of any provision limiting the amount or number of debentures to be issued:

Provided that any person lending money on the security of a debenture re-issued under this section which appears to be duly stamped, may give the de­ benture in evidence in any proceedings for enforcing his security without payment of the stamp duty or any penalty in respect thereof, unless be had notice, or, but for his negligence, might have discovered, that the debenture was not duly stamped, but in any such case the company shall be liable to pay the proper stamp duty and penalty.

Nothing in this section shall prejudice any power to issue debentures in the place of any debentures paid off or otherwise satisfied or extinguished, reserved to a company by its debentures, or the securities for the same.
1 5 . The Governor may make regulations for carry­ ing out the provisions of this Act.

Such regulations shall—

(i) be published in the Gazette ;

(ii)  take effect from the date of publication, or from a later date to be specified in such regulations ; and

(iii)  be laid before both Houses of Parliament within fourteen days after publication, if Par­ liament is in session, and, if not, then within fourteen days after the commencement of the next session. If either House of Parliament passes a resolution of which notice has been given at any time within fifteen sitting days

such House disallowing any regulation, such after such regulations have been laid before

regulation shall thereupon cease to have effect.

I R R I G A T I O N