Directors had been tried and convicted of offences which could have founded a s2 disqualification order. After they had been sentenced and left the dock, prosecuting counsel said to the judge: ‘Your Honour has made no reference to disqualification under the Act, so I take it your Honour makes no order?’ to which the judge replied: ‘I think, Mr. Henderson, I was concentrating primarily on achieving proper balance on sentencing. I think it seems unlikely, given the time that has elapsed, that any of these defendants is going to be involved in running a company again. I think in all the circumstances I will not make an order, and certainly in the case of these defendants I think it will be no kindness to bring them back to the dock for imposing such an order.’
Held: (ex tempore) It was not an abuse of process for the Secretary of State to bring proceedings in the civil court under s2 in circumstances where a criminal court had previously refused to impose such an order.
HHJ Rich QC said of the passage quoted: ‘I construe those observations . . as indicating that at a point in time when he at least thought he had the power to add a disqualification order to the sentence he had just imposed, he considered doing so and determined not to do so.’
He continued: ‘the provisions of s2 of the 1986 Act, if they are to mean anything at all, must mean that this court does have jurisdiction to impose a disqualification order at least in circumstances where the convicting court has not. If it does not have power to impose it in such circumstances, it never has power to do so at all, and yet the section makes quite clear that ‘the court’ includes this court.
A possible circumstance where the jurisdiction might be exercised, without [reaching as wide a conclusion] as the one I have just suggested is if it were limited to the case where the convicting court had merely failed to exercise its jurisdiction by oversight or mistake and had not considered doing so. But I reject that as a possible construction of s2 because I cannot think that, without express words, a jurisdiction would be conferred on this court based on the assumption that other courts of competent jurisdiction failed to exercise their duty . .
The question of whether [an] application under s4 or s6 may amount to an abuse of process in circumstances where there had been a prior conviction giving rise to the opportunity in the convicting court to impose a disqualification order has been considered in two cases by this court. [In Rayna Mr. Anthony Mann QC] came to the conclusion that the matters relied upon under s6 were wider and went further than those that had been considered by . . the convicting court under s2 . . He said at p12 of his judgment that ‘It is likely to be only in clear cases which can be said to be on all fours with each other that it might be said that the criminal proceedings have covered all the bases in a way which makes the civil proceedings otiose and oppressive.’
It might be derived from that approach that a proceeding by the Secretary of State under s2 after an order has been made under s2 must necessarily be a proceeding so completely on all fours because both applications must proceed on the basis of the conviction and the facts founding the conviction that the civil proceedings would be, in Mr. Mann’s words ‘otiose and oppressive’. He indeed said . . that he could see how the doctrine of former recovery ‘in its autrefois [convict] form’ might apply if one disqualification under s2 was sought to be followed by another s2 disqualification based on the same facts . . [but] I would not follow his view as formulated for the reasons which I will seek to set out . . [I] note [he] was dealing obiter with a circumstance which differed not only from the case before Mr. Mann but also from the case before me, where of course no disqualification order was in fact made . .
The case which I have to consider differs from [Denis Hilton] in two important particulars. First, the application . . is made under s2, the same section as that under which [the criminal court had power to make a disqualification order] and secondly, as I have held, I am to treat this case as a case where the convicting court did consider the exercise of its discretion.
For the reasons that I have attempted to give, I do not think that there is a distinction to be made between oversight and refusal so far as the failure to impose a disqualification order by the convicting court is concerned . .
it seems to me that a difference between the two sections [sc between a subsequent application under s2 or s6] is a difference which should lead to no distinction as to the appropriate conclusion in regard to abuse of process.
Where the convicting court has not [made a disqualification order], the alternative court, this court, in my judgment clearly has power to do so, and for the reasons which satisfied the judges who considered the similar cases under s6 and s4, no abuse arises.
I take, however, from the words which Mr. Mann used the suggestion that it is, as it appears to me, although it is not [relevant?] for my present decision, at least highly arguable that the exercise of the power is to be by alternative courts, and if one court has exercised the power the other [is] no longer entitled to do so . .’
Judges:
HHJ Rich QC
Citations:
Unreported, 5 Feb 2002
Statutes:
Company Directors Disqualification Act 1986 2
Jurisdiction:
England and Wales
Citing:
Cited – Re Denis Hilton Ltd ChD 2002
A director was prosecuted for the criminal offence of fraudulent trading, and in light of that the Disqualification Unit at the Insolvency Service decided not to pursue its own disqualification application under s6 but to ask the prosecution to seek . .
Cited by:
Criticised – The Secretary of State for Business, Innovation and Skills v Weston and Another ChD 5-Sep-2014
The Secretary of State sought company director disqualification orders against the defendants saying they had been convicted of making false instruments. The Insolvency service had decided against such proceedings, and the Crown Court judge, when . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 24 July 2022; Ref: scu.536466
