Re Sevenoaks Stationers (Retail) Ltd
The Court of Appeal set out three brackets for the length of a disqualification order, according to the seriousness of the director's conduct.
Facts
Mr Cruddas was a director of several companies that went into insolvent liquidation, owing large sums to creditors, including the Crown. He had failed to keep proper accounting records, continued trading while the companies were insolvent, and failed to pay the Crown's debts. The Secretary of State applied for a disqualification order against him under the Company Directors Disqualification Act 1986, and the judge disqualified him for seven years.
Legal principle
The Court of Appeal reduced the disqualification to five years. Dillon LJ said that the period of disqualification should be divided into three brackets: the top bracket of over ten years should be reserved for particularly serious cases, such as where a director who has already been disqualified becomes disqualified again; the middle bracket of six to ten years should apply to serious cases that do not merit the top bracket; and the minimum bracket of two to five years should apply where, although disqualification is mandatory, the case is relatively not very serious. He said that Mr Cruddas's conduct was incompetent, but not dishonest, and he fell within the lowest bracket.
Related cases on company charges, insolvency and disqualification
- Agnew v Commissioner of Inland Revenue (Re Brumark Investments Ltd) [2001] UKPC 28, [2001] 2 AC 710
- Re Bank of Credit and Commerce International SA (No 8) [1998] AC 214
- BNY Corporate Trustee Services Ltd v Eurosail-UK 2007-3BL plc [2013] UKSC 28, [2013] 1 WLR 1408
- Re Continental Assurance Co of London plc [2007] 2 BCLC 287
- Re Lo-Line Electric Motors Ltd [1988] Ch 477
- Re MC Bacon Ltd [1990] BCLC 324
- Morris v Bank of India [2005] EWCA Civ 693
- Re Panama, New Zealand and Australian Royal Mail Co (1870) LR 5 Ch App 318
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