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 order.
The court approved the submission by the parties to the Court an agreed statement of facts upon which the Court is invited to assess what order should be made.
Ferris J said: ‘the Secretary of State can and should cause an application for a disqualification order to be abandoned if it ceases to appear to him that the making of a disqualification order against the respondent to that application is ‘expedient in the public interest’. I was told that the Secretary of State does in fact act upon this principle and I have no doubt that this is so. But the Secretary of State has no general power to compromise a claim for a disqualification order which he continues to regard as being expedient in the public interest. In particular he cannot accept an undertaking in lieu of a disqualification order, because that would not protect the public in the way that the disqualification order does by virtue of the consequences presented by section 13 and section 15. He cannot decide that particular conduct does or does not amount to unfitness, for it is the court, not the Secretary of State which has to be satisfied on the relevant matters. He cannot agree that matters to which regard must be had by virtue of section 9(1) should be left out of account and he cannot bargain with the respondent concerning the length of any period of disqualification, for it is the court which has to decide this, subject to the statutory limits.
In disqualification proceedings, therefore, there is no scope for the parties to reach an agreement and then ask the court to embody their agreement in a consent order. The court itself has to be satisfied, after having regard to the prescribed matters and other facts which appear to be material, that the respondent is unfit to be concerned in the management of a company; and the court itself must decide the period of disqualification if it decides to make a disqualification order.’
Judges:
Ferris J
Citations:
Gazette 13-Oct-1993, [1994] 1 WLR 172, [1993] 4 All ER 499
Statutes:
Company Directors Disqualificatin Act 1985
Jurisdiction:
England and Wales
Cited by:
Cited – Davies v The United Kingdom ECHR 16-Jul-2002
The applicant had been subject to applications for his disqualification from acting as a company director. The Secretary of State waited until the last day before issuing proceedings, and the proceedings were then delayed another three years pending . .
Cited – Clingham (formerly C (a minor)) v Royal Borough of Kensington and Chelsea; Regina v Crown Court at Manchester Ex parte McCann and Others HL 17-Oct-2002
The applicants had been made subject of anti-social behaviour orders. They challenged the basis upon which the orders had been made.
Held: The orders had no identifiable consequences which would make the process a criminal one. Civil standards . .
developed – Secretary of State for Trade and Industry v Rogers 1996
If fraud is to be alleged against a company director in disqualification proceedings, the allegation must be distinctly alleged and as distinctly proved. . .
Cited – The Secretary of State for Trade and Industry v Jonkler and Another ChD 10-Feb-2006
The applicant had given an undertaking to the court to secure discontinuance of company director disqualification procedings. He now sought a variation of the undertaking.
Held: The claimant had given an undertaking, but in the light of new . .
Cited – Eastaway v Secretary of State for Trade and Industry CA 10-May-2007
The applicant had been subject to company director disqualification proceedings. Eventually he gave an undertaking not to act as a company director, but then succeeded at the ECHR in a complaint of delay. He now sought release from his undertaking . .
Cited – Kluk v Secretary Of State for Business, Enterprise and Regulatory Reform ChD 20-Dec-2007
. .
Cited – Cathie and Another v Secretary of State for Business, Innovation and Skills CA 1-Jun-2012
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. . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 08 April 2022; Ref: scu.81805