The Secretary of State for Trade & Industry v Ball and Others
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE HART |
| Judgment Date | 21 December 1998 |
| Judgment citation (vLex) | [1998] EWHC J1221-24 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | No. 005282 of 1994 D |
| Date | 21 December 1998 |
[1998] EWHC J1221-24
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Royal Courts of Justice
Mr. Justice Hart
In The Matter of Landhurst Leasing Plc a N D
In The Matter of The Company Directors Disqualification Act 1986
No. 005282 of 1994 D
MR. G. BOMPAS, Q.C. and MISS R. NICHOLSON (instructed by The Treasury Solicitor) appeared on behalf of the Applicant.
MISS C. WALTON (instructed by Messrs. P. A. Fleury & Co.) appeared on behalf of the Third Respondent.
MR. M. ROSEN, Q.C. (instructed by Messrs. Gordon Dadds) appeared on behalf of the Fourth Respondent.
(As approved by the Judge)
I have to consider what period of disqualification to impose in the case of Mr. Dyer and Mr. Illidge and also the question of who should bear the
costs of these proceedings.
I will take the period of disqualification in the case of Mr. Dyer first, and for that purpose will take as read the findings which I have made against him in the course of my judgment. But for the mitigating factors, to which I will come, and having regard to the periods of disqualification which have been imposed by the criminal court in the case of Mr. Ball and Mr. Ashworth—and I interpose that those were respectively eight and six years—I should have regarded the appropriate period to impose in relation to Mr. Dyer to be at the upper end of the lowest tier of periods mentioned in the Sevenoaks case, that is, the period from two to five years, and possibly in the lower end of the middle tier.
One of the matters found against Mr. Dyer involved—and I refer to the Bentley Tourer matter—what appears to have been a case of deception—there is no other word for it—which cannot be regarded as a venial matter in a company director. However, I have been impressed by the submissions that Miss Walton has made on his behalf as to the length of time during which he has been in jeopardy by virtue of these proceedings, and I bear in mind also that in Mr. Dyer's case his failure was, like that of Mrs. Ball, who has received under a Carecraft procedure a period of three years disqualification, a failure to appreciate that his position
as a company director imposed on him any obligations independently of those which he was under as an employee of the company.
A case can certainly be made for saying that the period in his case should exceed that of Mrs. Ball, given the specific transactions in which he was involved and in which
I have found his conduct to have fallen below the standard required. On the other hand, in this case the need to observe a requirement for deterrence in fixing the period is in my judgment relatively slight. The nature and course that these proceedings have taken over the last four years itself stands as a powerful warning to others of the risks involved in falling below the minimum acceptable standard. In my judgment, in all the circumstances, I consider a three-year period to be appropriate in Mr. Dyer's case.
Mr. Illidge's case is different. As will be apparent from my judgment, I had difficulty in deciding whether or not the conduct of which I found him guilty did require me to disqualify him. As I said at p.99 of my judgment, a director in the position of Mr. Illidge from 1991 onwards was necessarily in a difficult position, arriving in post, as he did, at a time when it must have already been known to the chairman and managing directors that the company was about to face possibly terminal difficulties, and that knowledge was not being fully shared with him. In setting a standard against which his conduct must be judged for the purposes of the 1986 Act, a balance must be struck between the need on the one hand not to deter honest and competent employees, as it is accepted he was, from accepting board appointment in such circumstances, and the desirability on the other of reinforcing the hands of those accepting such offers by emphasizing that their duties require them to act with independence and courage. I pointed out that I had not found striking the balance easy in Mr. Illidge's case.
In concluding, as I did, I was consciously setting a high standard. The considerations which led me to do that do not, as it seems to me, require me to mark his conduct with any special opprobrium when fixing the period of his disqualification. Moreover, in this case I have evidence before me from which I can draw the inference that the existence of these proceedings has had a practical and adverse effect on his ability to deploy his undoubted skills in the marketplace to the extent that he has already been subject to a lengthy and possibly disadvantageous period of de facto disqualification.
In those circumstances, I do not see any reason to impose on Mr. Illidge more than the minimum period of disqualification. For the same reasons as I have given in relation to Mr. Dyer, there is, I think, no reason to suppose that this course will drain the order which I make of any necessary deterrent element.
I turn to the question of costs, which I have found by no means easy. It is submitted on behalf of both Mr. Dyer and Mr. Illidge that there should be no order as to costs. On behalf of the Secretary of State, it has been submitted that the appropriate order for costs should be that both respondents should be ordered to pay the applicant's costs on a standard basis, to be taxed if not agreed, but that as between each of them the costs should be borne in the ratio of one-third to Mr. Dyer and two-thirds to Mr. Illidge, with a proviso that the applicant should not be entitled to enforce against Mr. Dyer or Mr. Illidge to a greater extent than one-third or two-thirds respectively until the applicant has exhausted all his remedies against the other. That was a form of order which commended itself to Chadwick J. in Re Godwin Warren Control Systems [1993] B.C.L.C. 80.
At the same time I am asked by the applicant to avoid if possible making any order for costs which will require the study by the taxing master of the responsibility as between the parties for costs incurred in relation to particular issues.
The reasons why the decision on costs is a difficult one is because the length of the trial has been occasioned by the number of transactions which have been put in issue by the applicant and the relative degrees of responsibility which it is alleged that each active respondent had in relation to each of them. Thus, of the five groups of transactions mentioned in my judgment, it is demonstrable that a certain proportion of the trial was taken up with the examination of the Swithland transaction, and similarly a certain proportion taken up in relation to the Edenote...
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