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 whether it was sufficient to found a disqualification. The court should look at such matters properly but in the round; ‘unfitness may be demonstrated by conduct which does not involve a breach of any statutory or common-law duty, but which, for example, constitutes a failure to achieve an acceptable standard of commercial probity. ‘ On that basis the failure to warn policy holders that their premiums would not be recoverable was a sufficient fault. The director had also misrepresented the viability of the actions being funded; it was at about 50% rather than 90%. He had also misled investors on the flotation of the company. ‘Each instance of conduct has the hallmark that it was undertaken either (a) to acquire business or capital for the company or (b) to confer a personal advantage on a director; and in each case it did so to the prejudice of those who had entered or were about to enter commercial relationships with Claims Direct or who would be affected by the entry of such relationships. The prejudice consisted in inviting a section of the public to deal with the company on what was a false basis in a material particular (or suffer the consequences of some-one else having done so). In my judgement companies should not be conducted on that basis if their liability to those with whom they deal is limited. It falls below the standards of commercial probity which the law is entitled to expect’
Norris J
[2008] EWHC 3179 (Ch)
Bailii
Company Directors Disqualification Act 1986 8(1), The Solicitors’ Introduction and Referrals Code 1990 2(3)
England and Wales
Citing:
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 – Secretary of State for Trade and Industry v Griffiths; Conway and Wassell; In Re Westmid Packing Services Ltd CA 16-Dec-1997
Guidance given on what evidence should be admitted to affect the length of disqualification and conditions of Director’s disqualification.
A director’s duty to exercise his powers in the best interests of the company and to recognise the . .
Cited – British and Commonwealth Holdings Plc (In Administration) v Barclays De Zoete Wedd Ltd; Same v Atlantic Computers Plc, David Mccormick and Others; Etc ChD 13-Nov-1998
The fact that evidence had been obtained under compulsion was not sufficient reason to prevent its disclosure for other civil matters if the Rule’s requirements were met and it was necessary to achieve fairness or reduction in costs. . .
Cited – in Re Atlantic Computers PLC ChD 15-Jun-1998
Timothy Lloyd J summarised the authorities on the standard of misbehaviour to be shown to found disqualification of a company director and said: ‘ In order to disqualify a respondent the court has to be satisfied that he or she ‘has fallen below the . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 01 November 2021; Ref: scu.278996