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 cases at the bottom end, and the middle bracket of 6 to 10 years for serious cases. The period should be fixed by the allegations made in the charge, not in the evidence coming out later. Non-payment of crown debts was to be treated more seriously than for other debts, though non-payment of Crown debts is not per se evidence of unfitness: ‘it is necessary to look more closely in each case to see what the significance, if any, of the non-payment of the Crown debt is.’ ‘(i) the top bracket of disqualification for periods over ten years should be reserved for particularly serious cases. These may include cases where a director who has already had one period of disqualification imposed on him falls to be disqualified yet again. (ii) the minimum bracket of two to five years’ disqualification should be applied where, though disqualification is mandatory, the case is, relatively, not very serious. (iii) the middle bracket of disqualification for from six to 10 years should apply for serious cases which do not merit the top category.’
As to the words of section 6 of the 1986 Act, these were ‘ordinary words of the English language’, and, then referring to earlier judicial statements, Dillon LJ said: ‘Such statements may be helpful in identifying particular circumstances in which a person would clearly be unfit. But there seems to have been a tendency, which I deplore, on the part of the Bar, and possibly also on the part of the official receiver’s department, to treat the statements as judicial paraphrases of the words of the statute, which fall to be construed as a matter of law in lieu of the words of the statute. The result is to obscure that the true question to be tried is a question of fact – what used to be pejoratively described in the Chancery Division as ‘a jury question’.’
Dillon Butler-Sloss and Staughton LJJ
[1991] Ch 166, [1990] BCC 765
Company Directors Disqualification Act 1986 6, Companies (Disqualification of Unfit Directors) Proceedings Rules 1987
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 by:
Cited – Secretary of State for Trade and Industry v Christopher Paul Reynard CA 18-Apr-2002
A company director was examined in court, in the course of company director disqualification proceedings. The judge was so concerned by his behaviour as a witness, as to extend the period of disqualification. He had appealed, and the Secretary of . .
Cited – Simpson v Regina CACD 23-May-2003
The appellant challenged a confiscation order made on his conviction of VAT fraud. It was argued that one could not be made unless a proper notice had been given, and none of the offences occurred before 1995. On the assumption that section 1 of the . .
Cited – The Secretary of State for Trade and Industry v Swan and Othes ChD 22-Jul-2003
When commencing proceedings under the Act, the papers were defective. The secretary of state had failed to give appropriate notice, and thus prevented him from making representations as to the allegations. The allegations involved the manipulation . .
Cited – The Secretary of State for Trade and Industry v Michael Hamilton Amiss, Jonathan Andrew Chapman, Roger Rex Ingles ChD 20-Mar-2003
The Secretary sought disqualification orders, under section 8 which left the court with a discretion as to whether an order should be made.
Held: It was not necessary to establish dishonesty to a Twinsectra standard to justify an order. The . .
Cited – In re Samuel Sherman Plc 1991
Disqualifications under section 8 should be of similar length to those recommended in the Sevenoaks Stationers for disqualifications under section 6. . .
Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003
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
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 – Secretary of State for Business Enterprise and Regulatory Reform v Sullman and Another ChD 19-Dec-2008
An application was made to disqualify as a company director a former director of Claims Direct Limited. He had been accused of several actions which might justify a disqualification.
Held: The court found misconduct but delayed a decision on . .
Cited – Secretary of State for Business Innovation and Skills v Aaron and Others ChD 10-Dec-2009
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 – Jones v Director of Public Prosecutions Admn 27-Jan-2011
The driver appealed against his conviction for exceeding the relevant maximum speed on a Special Road, the A55 in North Wales. The speed limit signs were designed to be illuminated, but the lamps were not working. Instructions had been given not to . .
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 . .
Cited – Secretary of State for Trade and Industry v Langridge CA 1991
The lower court had dismissed a petition for a director disqualification because of the failure to comply with the ten day requirement in section 16.
Held: (Majority) The provisions of section 16 were directory only and not mandatory. . .
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 – 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. . .
Cited – Re Tech Textiles Ltd ChD 1998
A disqualified director sought leave under section 17 to act as a director or be concerned or take part in the management of 3 companies and was successful in respect of 1 company. Arden J looked at the statutory basis and observed that the purpose . .
Cited – Harris v Secretary of State for Business, Innovation and Skills ChD 9-Aug-2013
The claimant had offered an undertaking not to act as a company director for a period of time, to avoid applications for his disqualification. He now sought leave to act.
Held: The applicant had: ‘put forward ample evidence to justify a . .
Lists of cited by and citing cases may be incomplete.
Company
Leading Case
Updated: 09 November 2021; Ref: scu.182389