The directors appealed against disqualification orders made against them under the 1986 Act. Their company had become insolvent, owing substantial arrears of PAYE and NI contributions. The revenue had said that they had paid other creditors first.
Held: When considering appeals to avoid disqualification, a court would be better guided by the use of the phrase ‘extenuating circumstances’ than by the phrase ‘exceptional circumstances’. The court must look at the situation as a whole, to see whether the director had fallen below standards of probity and competence appropriate for persons fit to be company directors.
On a second appeal, the court should conduct a full rehearing, but give proper respect to factual findings made by the first court, and depart from such findings only for good cause.
Pill, Sullivan, Kitchin LJJ
[2012] EWCA Civ 739, [2012] WLR(D) 168
Bailii
Company Directors Disqualification Act 1986 6
England and Wales
Citing:
Cited – In re Lo-Line Electric Motors Ltd 1988
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required . .
Cited – In re Sevenoaks Stationers (Retail) Ltd CA 1990
The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to . .
Cited – In re Grayan Building Services Ltd CA 1995
The degree to which an appellate court will be willing to substitute its own judgment for that of the tribunal will vary with the nature of the question. Hoffmann LJ said: ‘The concept of limited liability and the sophistication of our corporate law . .
Cited – Secretary of State for Trade and Industry v McTighe CA 1997
Morritt LJ, giving the judgment of the court, distinguished between the conduct of two directors, disqualifying one for twelve years and the other for eight. He said: ‘The period for disqualification is a matter for the discretion of the judge . .
Cited – Re Verby Print For Advertising Ltd ChD 1998
An application for disqualification orders was made on the basis of the directors’ failure to pay tax.
Held: Neuberger J said: ‘I would accept the grave nature of an allegation of unfitness under section 6(1)(b) of the 1986 Act must be borne . .
Cited – In Re Structural Concrete Ltd, Barnes and Others ChD 29-Jun-2000
In order to try to trade out of difficulties, company directors decided to give priority to the payment of trade and banking debts over debts due to the revenue.
Held: An appeal against the refusal to disqualify the Directors succeeded. There . .
Cited – In Re Carecraft Construction Co Ltd ChD 13-Oct-1993
A court must hear evidence before disqualifying directors. Though the Director and the Secretary of State might reach an agreement as to what should happen, they could not displace the court in deciding what order should be made, and in making that . .
Cited – Re Moonlight Foods Ltd , Secretary of State for Trade and Industry v Hickling 1996
The Secretary of State, when presenting an application for the disqualification of a company director is obliged to present a balanced picture. ‘It is accepted that these are not ordinary adversarial proceedings but have an element of public . .
Cited – Secretary of State for Business, Innovation and Skills v Doffman and Another ChD 11-Oct-2010
The defendants applied for directors’ disqualification proceedings for the claim to be struck out or dismissed on the ground that the respondent had breached their rights to a fair trial under Article 6 of the European Convention on Human Rights . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 01 November 2021; Ref: scu.460368