Summary

Applying Carecraft procedure in company directors disqualification order applications.

Facts

Application by the Secretary of State for Trade and Industry against Dayan and Banarse and Pratep Singh Banarse for orders under the Company Directors Disqualification Act 1986.

Held

The procedure in Re Carecraft Construction Co Ltd (1994) 1 WLR 172 lost its point if the court was entitled to draw inferences of secondary fact and led to arid discussions between counsel. There should have been no room for infilling of secondary facts as had been made clear in Secretary of State for Trade and Industry v Rogers (1996). It should be stated clearly whether the directors knew, or whether they merely ought to have known that the accounts in the present case were false. The respondents had admitted that they allowed the company to circulate accounts to third parties with a view to obtaining additional credit facilities "which they knew or ought to have known were materially inaccurate". However the case should proceed on the basis that the directors were not admitting actual knowledge. After taking account of other admitted facts and mitigating factors a disqualifcation order for six years from the date of the order was made.