Nigel Antony Eastaway v The Secretary of State for Trade and Industry

JurisdictionEngland & Wales
CourtChancery Division
JudgeMR JUSTICE LIGHTMAN,Mr Justice Lightman
Judgment Date02 Mar 2006
Neutral Citation[2006] EWHC 299 (Ch)
Docket NumberCase No: (1) 5397/2005; (2) 006581 OF 1992 D (3) 614/2006 (2) 006581 Of 1992 D (3) 614/2006

[2006] EWHC 299 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

COMPANIES COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Lightman

Case No: (1) 5397/2005; (2) 006581 OF 1992 D (3) 614/2006

(1) 5397/2005

(2) 006581 Of 1992 D

(3) 614/2006

In The Matter Of Blackspur Group Plc & Ors

And In The Matter Of The Company Directors Disqualification Act 1986

Nigel Antony Eastaway
Claimant
and
The Secretary Of State For Trade And Industry
Defendant

In The Matter Of Blackspur Group & Ors

And In The Matter Of The Company Directors Disqualification Act 1986

The Secretary Of State For Trade And Industry
Claimant
and
(1) Vernon John Eveleigh Davies
(2)Nicholas Andrew Thomas
(3)William Cummings Thompson
(4)Alexander Douglas Andrew
(5)Nigel Antony Eastaway
Defendants

In The Matter Of A Disqualification Undertaking Dated 31 st May 2001

And In The Matter Of The Company Directors Disqualification Act 1986

Nigel Antony Eastaway
Claimant
and
The Secretary Of State For Trade And Industry
Defendants

Mr Matthew Collings (instructed by BCL Burton Copeland, 51 Lincoln's Inn Fields, London WC2A 3LZ) for Mr Eastaway

Mr Malcolm Davis-White QC and Mr Jason Coppel (instructed by the Treasury Solicitor, One Kemble Street, London WC2B 4TS) for the Secretary of State

Hearing dates: 1 st– 6 th February 2006

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

MR JUSTICE LIGHTMAN Mr Justice Lightman

INTRODUCTION

1

I have before me separate applications by Mr Eastaway in three sets of proceedings ("the Applications"). The applications spring out of proceedings ("the Disqualification Proceedings") commenced in 1992 by the Secretary of State for Trade and Industry ("the Secretary of State"). By the Disqualification Proceedings the Secretary of State sought orders under the Company Directors Disqualification Act 1986 ("the 1986 Act") against Mr Eastaway and four other persons ("the Defendants").

2

The Disqualification Proceedings proved complicated and protracted and there was serious delay which was in part attributable to the Secretary of State. Mr Eastaway complained that the delay constituted a violation of his right to the determination of his civil rights within a reasonable time under Article 6(1) ("Article 6") of the European Convention on Human Rights ("the Convention") and on this ground made applications in judicial review proceedings seeking an order that the Secretary of State should discontinue the Disqualification Proceedings and in the Disqualification Proceedings seeking an order that the proceedings should be struck out or dismissed ("the Strike-Out Application").

3

When these efforts had failed, on the 31 st May 2001, on the basis of the matters set out in the attached schedule of unfit conduct which he did not dispute for the purposes of the 1986 Act and any purposes consequential to the Disqualification Undertaking, Mr Eastaway offered and the Secretary of State accepted (in place of continuance to trial of the Disqualification Proceedings) a disqualification undertaking ("the Disqualification Undertaking") under which (most particularly) Mr Eastaway undertook for 4 1/2 years not to be a director of a company or in any way to be concerned in or take part in the promotion, formation or management of a company without the permission of the court.

4

In anticipation that Mr Eastaway would offer and the Secretary of State would accept the Disqualification Undertaking, on the 25 th May 2001 the parties agreed that upon the terms there set out the Disqualification Proceedings should be stayed and that the parties should have general liberty to apply.

5

Mr Eastaway thereafter commenced proceedings in the European Court of Human Rights ("the ECHR") for violation of Article 6 constituted by the delay ("the ECHR Proceedings"). By its judgment ("the ECHR Judgment") the ECHR upheld Mr Eastaway's complaint holding that by reason of delay Mr Eastaway's right under Article 6 to a determination of his rights within a reasonable time had been violated and awarded him: (a) compensation of €15,000 in respect of the costs of the Strike-Out Application (as an attempt to use domestic remedies to address the issue of delay under Article 6); (b) €4,500 in respect of the non-pecuniary loss which he had suffered; and (c) €10,000 in respect of the costs of the ECHR Proceedings.

6

By reason of the Disqualification Proceedings and their culmination in the Disqualification Undertaking, Mr Eastaway (who is a chartered accountant) now faces disciplinary proceedings by two professional accountancy bodies to which he belongs. By the Applications Mr Eastaway contends that by reason of the ECHR Judgment and the finding of violation of Article 6 he is entitled to relief which removes the stigma to which the Disqualification Proceedings and Disqualification Undertaking have subjected him and relief which should persuade the professional bodies to discontinue the disciplinary proceedings. The question raised is whether he is entitled to such relief.

FACTS

7

The parties have agreed a statement of the relevant facts which is substantially taken from the ECHR Judgment. My recital of the facts is essentially taken from that statement.

8

The Blackspur group of companies ("Blackspur"), was formed in September 1987 and at various times Mr Eastaway acted as director of companies in the group. Blackspur went into receivership in July 1990 with an estimated deficit of £10–20 million.

9

On the 1 st July 1992, on the last day of the applicable two year limitation period, the Secretary of State issued the Disqualification Proceedings against the Defendants. Included amongst the allegations against them were those of false accounting and trading whilst insolvent. The Secretary of State's evidence was not complete at the time he commenced the Disqualification Proceedings, and he applied for an extension of time for the serving of evidence. The Defendants refused to consent to an extension being granted and instead on the 13 th October 1992 three of the Defendants (but not, at this stage, Mr Eastaway) applied to strike out the proceedings. The Secretary of State's evidence was completed and served on Mr Eastaway on the 14 th December 1992. On the 13 th May 1993 Mr Eastaway also applied to strike out the proceedings. The Secretary of State's application for an extension of time and the cross-applications by the Defendants to strike out the proceedings were heard by the Registrar on the 20 th May 1993, when they were adjourned to the 29 th July 1993. On 27 January 1994 the Registrar granted the Secretary of State's application for an extension of time and dismissed the application to strike out. Mr Eastaway and two others of the Defendants appealed to the High Court.

10

Related criminal charges had been brought against Mr Eastaway and three other Defendants on the 1 st July 1992. In May 1993 the Defendants applied to stay the Disqualification Proceedings pending the conclusion of the criminal proceedings. The criminal trial took place between March and June 1994, during which period the Disqualification Proceedings were adjourned generally, with liberty to restore. At the conclusion of the criminal trial, Mr Eastaway and one other of the Defendants were acquitted, and two of the Defendants were convicted. In February 1995 on appeal the two convictions were quashed.

11

By a letter dated the 16 th September 1994 Mr Eastaway invited the Secretary of State to reconsider whether, in the light of the acquittals in the criminal trial, it was in the public interest to carry on with the Disqualification Proceedings. On the 15 th December 1994 the Treasury Solicitor replied that the Secretary of State had decided that it remained expedient in the public interest that the Disqualification Proceedings should continue.

12

Once the criminal trial had been concluded, the appeal to the High Court against the Registrar's decision of the 27 th January 1994 could and did proceed and the appeal was dismissed on the 2 nd May 1995. In November 1995 the first of the Defendants, Mr Davies, was granted permission to appeal out of time to the Court of Appeal, and his substantive appeal was dismissed by that court on 24 May 1996. The Court of Appeal found that the reasons for the Secretary of State's failure to complete his evidence before the proceedings were commenced had been "far from satisfactory", but considered nonetheless that the case should proceed since it was in the public interest to determine the "particularly serious" allegations of false accounting and trading while insolvent. In addition, the court observed that the delay by the Secretary of State had not affected the timing of the hearing or prejudiced Mr Davies, and that, once the proceedings had commenced, "the respondents' main concern was to delay the proceedings until after the conclusion of the criminal trial, not to hurry them on" ( Secretary of State for Trade and Industry v Davies (No 2) [1997] 2 BCLC 317). On the 1 st July 1996 the Registrar directed that the Defendants should serve their evidence in response to that of the Secretary of State by 29 November 1996.

13

In June 1996 Mr Davies invited the Secretary of State to accept undertakings from him instead of proceeding to trial. The Secretary of State refused. On the 2 nd October 1996 Mr Davies applied for a stay of the proceedings and on the 5 th November 1996 for a judicial review of the decision of the Secretary of State. On the 18 th November 1996 Mr Eastaway wrote to the Treasury Solicitor in connection with the applications of Mr Davies stating:

"should it be decided that, as a matter of principle, undertakings are an appropriate and acceptable means of resolving disqualification...

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