The court was faced with the question whether one of the three respondents, who was not a director of the company de jure, was nevertheless a director of the company de facto and as such liable to disqualification.
Held: A de facto director was as responsible as a formal director for disqualification purposes. However, in this case, a business consultant providing computer and other management services to a furniture-making company, was not a de facto director, despite his having undertaken extensive negotiations with creditors and performed some of the functions of a finance director. Where it is unclear that the acts of the person in question are referable to an assumed directorship or to some other capacity, the person in question is entitled to the benefit of the doubt
Timothy Lloyd QC said: ‘It seems to me that for someone to be made liable to disqualification under section 6 as a de facto director, the court would have to have clear evidence that he had been either the sole person directing the affairs of the company (or acting with others all equally lacking in a valid appointment, as in Morris v Kanssen [1946] AC 459) or, if there were others who were true directors, that he was acting on an equal footing with the others in directing the affairs of the company. It also seems to me that, if it is unclear whether the acts of the person in question are referable to an assumed directorship, or to some other capacity such as shareholder or, as here, consultant, the person in question must be entitled to the benefit of the doubt.’
Timothy Lloyd QC HHJ
Ind Summary 21-Aug-1995, [ 1996] BCC 155
Company Directors Disqualification Act 1986 6(1)
England and Wales
Citing:
Cited – Morris v Kanssen HL 1946
The House considered the effect of provisions relating to the acts of directors in the 1929 Act. Lord Simonds said: ‘There is, as it appears to me, a vital distinction between (a) an appointment in which there is a defect or, in other words, a . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.85860