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 offers great privileges and great opportunities for those who wish to trade under that regime. But the corporate environment carries with it the discipline that those who avail themselves of those privileges must accept the standards laid down and abide by the regulatory rules and disciplines in place to protect creditors and shareholders. And, while some significant corporate failures will occur despite the directors exercising best managerial practice, in many, too many, cases there have been serious breaches of those rules and disciplines, in situations where the observance of them would or at least might have prevented or reduced the scale of the failure and consequent loss to creditors and investors.’
Hoffmann LJ said: ‘The court is concerned solely with the conduct specified by the Secretary of State . . under rule 3(3) of the Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987. It must decide whether that conduct, viewed cumulatively and taking into account any extenuating circumstances, has fallen below the standards of probity and competence appropriate for persons fit to be directors of companies.’ and ‘Some of the examples given by the judge are of extenuating circumstances which accompanied the conduct in question. These are matters which it seems to me would always be proper for the court to take into account. On the other hand, if the judge meant that the court was concerned with anything other than whether the conduct, taken in its setting, fell below the appropriate standard, I would respectfully disagree.’
References: [1995] Ch 241, [1995] 3 WLR 1
Judges: Henry LJ, Hoffmann LJ, Neill LJ
Statutes: Company Directors Disqualification Act 1986 6, Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987
Jurisdiction: England and Wales
This case is cited by:

  • Cited – Assicurazioni Generali Spa v Arab Insurance Group (BSC) CA 13-Nov-2002 (, Times 29-Nov-02, Gazette 23-Jan-03, [2002] EWCA Civ 1642, [2003] 1 WLR 577, [2003] Lloyds Rep IR 131, [2003] 1 All ER (Comm) 140)
    The appellant asked the Court to reverse a decision on the facts reached in the lower court.
    Held: The appeal failed (Majority decision). The court’s approach should be the same whether the case was dealt with as a rehearing or as a review. . .
  • Cited – Moyna v Secretary of State for Work and Pensions HL 31-Jul-2003 ([2003] 4 All ER 162, (2003) 73 BMLR 201, , [2003] UKHL 44, , Times 11-Aug-03, [2003] 1 WLR 1929)
    The appellant had applied for and been refused disability living allowance on the basis of being able to carry out certain cooking tasks.
    Held: The purpose of the ‘cooking test’ is not to ascertain whether the applicant can survive, or enjoy a . .
  • Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003 ([2003] EWHC 2843 (Ch), , Times 02-Dec-03)
    The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
    Held: The answer was a mixture of fact and law. A breach of . .
  • Cited – Secretary of State for Trade and Industry v Paulin ChD 13-May-2005 (, [2005] EWHC 888 (Ch), Times 26-May-05)
    The director sought to appeal an order disqualifying him form acting as a company director.
    Held: The disqualification proceedings were properly charactised as insolvency proceedings and therefore there was no requirement for permission to . .
  • Cited – Agulian and Another v Cyganik CA 24-Feb-2006 (, [2006] EWCA Civ 129)
    The question was whether the deceased had lost his domicile of birth and acquired one of choice when living and working in the UK for 43 years. He had retained land in Cyprus, but lived here.
    Held: He had retained his domicile of birth: . .
  • Cited – Brooker and Another v Fisher CA 4-Apr-2008 (, [2008] EWCA Civ 287, [2008] Bus LR 1123, [2008] FSR 26, [2008] EMLR 13)
    The claimant had asserted a joint authorship of the song ‘A Whiter Shade of Pale’ written in the sixties. The defendant appealed saying that the claim had been brought too late, and that the finding ignored practice in the music industry. The . .
  • Cited – Bracknell Forest Borough Council v Green and Another CA 20-Mar-2009 (, [2009] EWCA Civ 238, [2009] CP Rep 31, [2009] PTSR CS49, [2009] NPC 45, [2009] HLR 38)
    The council sought possession of the property saying that the three bedroomed property was underused by the tenant and his sister. The respondents said that it was not too extensive, and that no satisfactory alternative accommodation had been . .
  • Cited – Secretary of State for Business Innovation and Skills v Aaron and Others ChD 10-Dec-2009 (, [2009] EWHC 3263 (Ch))
    The claimant sought a disqualification after the defendants had been directors of a company mis-selling Structured Capital at Risk products. The FSA had reported that they had been negligent.
    Held: ‘I do not have to decide whether or not the . .
  • Cited – Cathie and Another v Secretary of State for Business, Innovation and Skills CA 1-Jun-2012 (, [2012] EWCA Civ 739, [2012] WLR(D) 168)
    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. . .
  • Cited – Jones v First Tier Tribunal and Another SC 17-Apr-2013 (UKSC 2011/0123, , [2013] UKSC 19, [2013] 2 WLR 1012, [2013] 2 All ER 625, [2013] WLR(D) 142, , , , , [2013] 2 AC 48)
    The claimant had been injured when a lorry driver swerved to avoid hitting a man who stood in his path. He said that the deceased’s act of suicide amounted to an offence of violence under the 1861 Act so as to bring his own claim within the 2001 . .

These lists may be incomplete.
Last Update: 22 September 2020; Ref: scu.182943