Secretary of State for Trade and Industry v Swan and Others
| Jurisdiction | England & Wales |
| Judgment Date | 22 July 2003 |
| Neutral Citation | [2003] EWHC 1780 (Ch) |
| Date | 22 July 2003 |
| Court | Chancery Division |
CHANCERY DIVISION
Before Mr Justice Laddie
Directors - defects in disqualification procedure - inappropriate for court to strike out entirety of evidence
It was inappropriate for the court to strike out the entirety of evidence, in the form of an affirmation, against a former company director in support of disqualification proceedings brought against him even if there were defects in that affirmation and in the procedure followed.
Mr Justice Laddie so held in the Chancery Division when dismissing the application by the first defendant, Christopher Swan, director and former chief executive of Finelist Group Ltd, for an order to strike out the evidence in support of disqualification proceedings brought against him under section 6 of the Company Directors Disqualification Act 1986, by the claimant, the Secretary of State for Trade and Industry.
Nearly two years after the company and its subsidiaries went into administrative receivership, the secretary of state caused a claim form to be issued under Part 8 of the Civil Procedure Rules, seeking the disqualification of Mr Swan, along with the other directors of the company, under section 6.
The evidence in support of the claim, in the form of the affirmation of the chief examiner of the disqualification unit of the Insolvency Service, contained allegations that the director had caused two of the company's subsidiaries to engage in "cheque kiting", the passing of cheques between subsidiaries so as to take financial advantage of the two to three day delay for the cheques to clear, on a daily basis and on an extensive scale.
Contrary to section 16(1) of the 1986 Act, which provided that the applicant for a disqualification order should give not less than 10 days notice of the application to the intended recipient, the director received one clear days notice of the proceedings.
The director applied for the affirmation to be struck out and asked that the secretary of state reconsider the evidence on which she wished to rely.
The director did not seek summary judgment or to strike out the proceedings as a whole since he understood the allegations made against him and accepted that the proceedings should continue.
However, he sought to strike out the affirmation in its entirety, including parts at which no criticisms were levelled.
Mr Michael Green for the secretary of state; Mr Stephen Davies, QC and Mr Jeremy Bamford for...
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