A director was prosecuted for the criminal offence of fraudulent trading, and in light of that the Disqualification Unit at the Insolvency Service decided not to pursue its own disqualification application under s6 but to ask the prosecution to seek an order under s2 if a conviction was obtained. That request was made to the police officer in charge of the investigation. However, when the director came to be sentenced the prosecutor failed to ask for an order under s2 and the Crown Court judge did not consider the matter himself. The Secretary of State was by then out of time to bring s6 proceedings but did so under s4 which requires proof of an offence of fraudulent trading, whether or not the director has been convicted thereof.
Held: The decision not to proceed under s6 had not been made because it was considered that disqualification was not appropriate but rather that it was a matter that could be left to the criminal court, and subject to an implied reservation that it might be reviewed after the criminal trial. There had been no abandonment of disqualification proceedings that it would be unfair to go back on, and nothing that could amount to an estoppel. He accepted that in contrast to Rayna, the facts on which the s4 application was based were exactly those that were relied on in the criminal prosecution. That would not of course necessarily be the case in a s4 application; even if there had been a prior prosecution the s4 application might be based on different and/or additional facts, to be proved to the civil standard in the civil court.
As to the application of the doctrine of autrevois convict, Ferris J said: ‘However, this is not precisely the situation which he referred to when he said that the doctrine of autrefois convict might apply if one disqualification under s 2 was sought to be followed by another s 2 disqualification based on the same facts. There has been no s 2 disqualification in this case, and for reasons which I have indicated I do not think it right to infer that there was a positive decision by the criminal court not to impose a disqualification although it is, of course, a fact that the criminal court did not do so.’
Judges:
Ferris J
Citations:
[2002] 1 BCLC 302
Statutes:
Company Director Disqualification Act 1986 2 4 6
Jurisdiction:
England and Wales
Citing:
Cited – Re Barings and Others (No 3) ChD 1999
The disqualified director sought leave under section 17 to act as a director in circumstances which did not involve him assuming any executive responsibilities, other than of a trivial nature, and left him free to contract as a consultant.
Cited by:
Cited – The Secretary of State for Business, Innovation and Skills v Weston and Another ChD 5-Sep-2014
The Secretary of State sought company director disqualification orders against the defendants saying they had been convicted of making false instruments. The Insolvency service had decided against such proceedings, and the Crown Court judge, when . .
Cited – Secretary of State v Nimley ChD 5-Feb-2002
Directors had been tried and convicted of offences which could have founded a s2 disqualification order. After they had been sentenced and left the dock, prosecuting counsel said to the judge: ‘Your Honour has made no reference to disqualification . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 04 June 2022; Ref: scu.536465