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. Directors owe responsibilities to the public (in the form of creditors, shareholders and employees). The public needs to be protected from persons whose conduct has shown that they have abused the privileges to trade through a company with the protection of limited liability, and with the use of capital subscribed by third parties.
Lord Justice Balcombe said ‘In my judgment the scope and purpose of the [Act] is clear. The ability to trade through a company with the protection of limited liability, and with the use of capital subscribed by third parties, is of great economic advantage and confers considerable privileges on persons so enabled. These privileges involve corresponding responsibilities and the public (in the form of creditors shareholders and employees . .) needs to be protected from persons whose conduct has shown that they have abused those privileges . . accordingly the purpose of the Act is to protect the public and its scope is the prevention of persons who have previously misconducted themselves in relation to companies, or who have otherwise shown themselves as unfit to be concerned in the management of a company, from being so concerned.’
and concluded: ‘In those circumstances, and applying the principles to which I have referred above, I would have no hesitation in holding that in this case, the failure to serve a proper ten day notice was a procedural irregularity which did not render the Secretary of State’s application for a disqualification order against Mr Langridge either void or voidable, and that the Secretary of State originating summons should not be struck out.’
Lord Justice Balcombe
[1991] Ch 402
Company Directors Disqualification Act 1986 6
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 by:
Cited – Jones v Director of Public Prosecutions Admn 27-Jan-2011
jones_dppAdmn11
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 . .
Lists of cited by and citing cases may be incomplete.
Updated: 07 August 2021; Ref: scu.428305