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ÐÁÃÊÕÐÑÉÏÓ ÄÉÊÇÃÏÑÉÊÏÓ ÓÕËËÏÃÏÓ
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(1987) 3 CLR 121
[SAVVIDES, J.]
IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION
1. KYRIACOS AMERICANOS,
2. ANTHI K. AMERICANOU,
Applicants,
v.
THE REPUBLIC OF CYPRUS, THROUGH
1. THE MINISTER OF COMMERCE AND INDUSTRY,
2. THE OFFICIAL RECEIVER AND REGISTRAR OF COMPANIES,
Respondents.
(Case No. 31/86).
Companies-Name of-Application for registration of a company under the name «Amencanos College Ltd» having among its objects the operation of a Private School-Demand by respondent Registrar that the words Private Institute be added to the name of the company-Registrar based his said demand on the Private Schools Law 5/71 as amended by Law 56/83-Approval of names of private schools a matter within the exclusive competence of the Minister of Education-The establishment of a company is a matter different from the operation of a private school-Respondent Registrar acted under a misconception of Law.
Private Schools-Approval of names of-A matter within the exclusive competence of the Minister of Education-The Private Schools Law 5/71 as amended by Law 56/83, sections 3,4,5(2), 6(1)(a), 6(1)(b), 6(4), 6(5) and 8.
The applicants submitted an application to respondent 2 for the registration of a company under the name of «Americanos College Ltd». Respondent 2 informed counsel for the applicants that for the application to be accepted certain conditions will have to be satisfied. One of the said conditions was that the name of the company should be changed into «Private Institute Americanos College Ltd.»
As a result the applicants filed the present recourse. Counsel for the respondents submitted, inter alia, that the Registrar is bound to abide by the provisions of the Private Schools Law and demand the insertion of the words «Private institute» as part of the name of the company in question.
Held, annulling the sub judice decision: (1) The approval of names for private schools is by virtue of various provisions of the Private School Laws (Law 5/71 as amended by Law 56/83) a matter within the exclusive competence of the Minister of Education.
(2) When a private company is registered a legal entity comes into existence and such legal entity can transact business in accordance with its memorandum and articles of association. The establishment of a company does not by itself entitle such company to operate a private school even if the operation of such a school is included among the objects set out in the memorandum and articles of association of such company. As in the case of individuals a company to be entitled to operate a private school has to obtain a permit from the Minister of Education.
(3) It follows that the Registrar of Companies in relying on the provisions of the Private Schools Laws has acted under a misconception of law as the objects of setting up a company and the operation of a private school are different matters for which powers are vested in different organs.
Sub judice decision annulled.
No order as to costs.
Recourse.
Recourse against the refusal of the respondents to accept registration of the business name «Americanos College Ltd.»
A. Haviaras, for the applicants.
St. Loannidou (Mrs.), for the respondents.
Cur. adv. vult.
SAVVIDES J. read the following judgment. Applicant 1 is the owner of a private school operating under the business name «Americanos College» registered as such with the Registrar of Companies in accordance with a certificate No. 5536 dated the 4th January, 1984. On the 7th December, 1985, the applicants submitted to the Registrar an application for the registration of a company under the name «Americanos College Ltd.» together with the Memorandum and Articles of Association of the proposed company. They also submitted the written consent of other companies registered with similar names and in particular (1) Americanos Developers Ltd., (2) Americanos Office and Employment Services, and (3) Americanos Accountancy Tutors Ltd., for the registration of the said company.
Respondent 2 informed counsel for the applicants orally and in writing that for the application to be accepted:-
(a) the name of the company should be changed into «Private Institute Americanos College Ltd.»;
(b) the business name «Americanos College» registered in the name of applicant (1) had to be struck out; and
(c) certain printing errors in the Articles of Association should be corrected.
Counsel for the applicants by letter dated the 18th December, 1985 informed the Registrar that he had no difficulty in accepting conditions (b) and (c) but that he considered condition (a) as unacceptable, advancing his reasons in support of his view.
Respondent No. 2 by letter dated 30.12.1984 informed the applicants' counsel that he could not accept registration of the proposed name «on the ground that there is a similar name Registered» and that he was prepared to consider other names. In the course of the hearing of this recourse, however, it became apparent that the refusal of the Registrar was not for the reason stated In his letter which was written by inadvertence on a standard form of reply but for the reason that the Registrar in order to approve the name, required the words «Private Institute» to be added before such name and that In fact all communications between the parties were to that effect, Counsel for the applicants conceded that the reason for the refusal was as stated by counsel for the respondent the contents of such letter should be read as embodying such reason In the refusal of the Registrar to register the company.
The grounds of law on which counsel for the applicants based his recourse were that the sub judice decision was taken in abuse and/or excess of power, is not duly reasoned, there is lack of due inquiry, it is contrary to the Companies Law, Cap. 113 and was taken under a misconception of law.
In expounding on his grounds of law counsel submitted that Law 5/71 as amended by Law 56/83 does not require that the words «Private Institute» or «School» should appear in the name of the school but only on advertisements and documents which are being issued by the school and concluded that the respondents accepted, after the enactment of the above laws, the registration of the business name «Americanos College» without any reservation.
Counsel for the respondents by her written address submitted that the Registrar acted in the exercise of his powers under section 18 of the Companies Law, Cap. 113, by which he is empowered to refuse registration of a name which, in his opinion, is undesirable. Counsel further added that if the words «Private Institute» are not inserted, this might mislead the public at large to think that such college is sponsored by the Government.
In clarification counsel for the respondents contended that the Registrar had accepted registration of the business name «Americanos College» on the 4th January, 1984, by inadvertence and mistake as the enactment of Law 56/83 did not come to his knowledge and this does not entitle the applicants to have the name of the proposed company registered without the words «Private Institute» inserted thereto. In any event, counsel submitted that in the present case the court is concerned with the registration of a private company under the Companies Law and since the old name will be struck off and a new company will be formed, the Registrar is bound to abide by the provisions of the Private Schools Laws and demand the insertion of the words «Private Institute» as part of the name of the company in question.
Before embarking on the issues before me, I find it necessary to refer to the laws relevant to the present case and their objects. The Companies Law, Cap.113, is a law enacted for the purpose of regulating the registration and operation of companies and the person empowered to carry out the objects of the law is the Registrar of Companies and in respect of registration of companies, the term «Registrar» means «the Official Receiver and Registrar and includes any other person appointed by the Council of Ministers to exercise all or any of the powers and perform all or any of the duties of a Registrar. Under section 18 no company shall be registered by a name which in the opinion of the Registrar is undesirable.
The operation of private schools is regulated by the Private Schools Law, 1971 (Law 5/71) as amended by Law 56/83. Under V the provisions of section 3, no private school shall be established and operate without a certificate issued for that purpose by the Minister of Education. All the powers for the establishment and operation of a private school are vested by virtue of such law to the Minister of Education who is the only competent organ to allow the operation of such school. Under section 8, for the operation of a private school an application should be submitted to the Minister containing certain particulars and if the Minister is satisfied that such application complies with the provisions of the law, he may proceed with the registration of such school and the issue of a certificate to that end. The provisions as to the name of the school are contained in section 6. It is provided therein that the name of the school should not be deceptive as to the type and standard of the school (section 6(1) (a)); it should be distinctive from the names of other private or public schools (section 6(1)(b)); that every private school or private tutorial centre should bear before its name the words «private school» or «private institute» in all notices, advertisements, certificates and any other documents issued by the school (section 6(4). Further, under sub-section (5) of section 6, it is expressly prohibited to use the name of a private school before the submission of a declaration in accordance with section 4 or the grant of a permit under sub-section (2) of section 5.
The approval of names for private schools is therefore a matter within the exclusive jurisdiction of the Minister.
Bearing in mind the above provisions in the law, the question poses for consideration whether the name under which a private school is proposed to operate under the Private Schools Laws 1971-1983 is a matter within the powers and discretion of the Registrar of Companies. When a private company is set up and its registration is approved by the Registrar, a legal entity comes into existence, which can transact business in accordance with its memorandum and articles of association which may be amended from time to time. The establishment of a company does not by itself entitle such company to operate a private school irrespective of the fact that the operation of a school is included in the objects set out in its memorandum and articles of association. For a private company, as in the case of private individuals, to be entitled to establish and operate a school, it has to obtain a permit from the Minister of Education whom it has to satisfy both as to the desirability of the name to be used and in respect of all other matters provided in the law.
In the present case, the Registrar of Companies by requiring the insertion in the name of the company, which in fact consisted of the surname of the applicants, of the words «Private Institute» relying, in this respect, on the provisions of the Private Schools Law, has acted under a misconception of law as the object of setting up a company and the operation of a private school are different matters for which powers are vested in different organs. Irrespective of the description of a registered company, the operation of a school is not a matter which has anything to do with the registration of a company or its registered name but Is a matter within the exclusive jurisdiction of the Minister of Education if and when an application for the operation of a school by such company is submitted.
Before concluding I wish to observe that the explanation given on behalf of the Registrar that when he accepted for registration the business name «Americanos College», on the 4th January, 1984, that is, six months after the enactment of Law 56/83, he did not require the inclusion in such business name of the words «Private Institute» due to ignorance of the law, is a very poor one. A responsible organ of the Republic, such as the Registrar of Companies, is not expected to act in ignorance of the law on matters which he considers important in the discharge of his functions.
In the result the sub judice decision is annulled. There will be no order for costs.
Sub judice decision annulled.
No order as to costs.