Summary

Grant of leave to the Secretary of State for Trade and Industry to apply for disqualification orders under s.6 Company Directors Disqualification Act 1986 notwithstanding that the two-year time limit for bringing such an application had expired.

Facts

Secretary of State for Trade and Industry's application for leave to apply for disqualification orders under s.6 Company Directors Disqualification Act 1986 against the respondents notwithstanding that the two- year time limit for bringing such an application had expired. The proposed proceedings related to the respondents' conduct of the affairs of Helene plc, a company incorporated in Scotland, and its wholly-owned subsidiary Barry Artist Ltd, which was incorporated in England. In March 1999 the secretary of state had commenced proceedings under s.8 of the Act against both respondents in relation to both companies. In November 1999 those proceedings were struck out insofar as they related to Helene plc on the ground that the high court had no jurisdiction to entertain an application for an order under s.8 of the Act in respect of a company incorporated in Scotland. That decision was under appeal. Pending the determination of that appeal, the secretary of state now sought, some nine months after the latest date for the commencement of proceedings under s.6 of the Act, to bring such proceedings in order that the respondents' conduct in respect of Helene plc might be brought before the high court. Only the first respondent ('F') appeared to contest the application.

Held

1) There was abundant evidence that F had been guilty of allowing excessive and unwarranted expenditure which, as finance director, he ought to have prevented. The allegations were of real substance, and went to his conduct in respect of both companies. (2) Although the secretary of state might have issued protective proceedings within the time limit, the only real criticism that could be made was that in not doing so he had acted under a misapprehension as to the width of the jurisdiction under s.8 of the Act. That misapprehension was perfectly understandable. (3) There was no prejudice to F arising out of the delay. Litigation was inevitably stressful, and although the grant of leave would lead to additional costs being incurred, that was inherent in an application under s.7(2) of the Act.