Secretary Of State For Trade & Industry v Goldberg & Anor

The threshold for a second appeal under Access to Justice Act 1999, section 55, is stringent. Case-management decisions concerning requests for further information should not ordinarily be elevated into general rules for all disqualification proceedings. The court must preserve a director’s fair opportunity to understand the case to be met, while recognising that the information reasonably necessary and proportionate may depend on the stage reached and the evidence still to be filed.

The Secretary of State brought proceedings under the Company Directors Disqualification Act 1986 concerning the affairs of Crystal Palace FC (1986) Ltd. Mr McAvoy sought further information under Part 18 of the Civil Procedure Rules about allegations in the Official Receiver’s affidavit.

The Registrar dismissed most of the requests as premature, unnecessary or inappropriate. The Vice-Chancellor dismissed Mr McAvoy’s appeal, holding that the Registrar had made no error in exercising his case-management discretion. Mr McAvoy renewed his application for permission to appeal, limited to three requests concerning allegations that management accounts were misleading and that directors had been misled.

1. Application refused. The renewed application was governed by the stringent second-appeal test in section 55 of the Access to Justice Act 1999. The proposed grounds concerned essentially case-management decisions and did not make this a proper case for a further appeal to the full Court of Appeal.
2. A director facing disqualification proceedings must know the case to be met, because disqualification is a serious matter. That principle is subject to the procedural context and does not require every request for further information to be answered immediately.
3. The question whether information is reasonably necessary and proportionate is assessed at the time when the request is made, or at the latest when the application is considered. In the ordinary case, a request may be premature before the Secretary of State’s reply evidence, because the matters in issue may not yet have emerged and further evidence may clarify the case.
4. The court declined to convert the particular case-management issues into a series of rules applicable across the wide variety of disqualification cases. The allegation concerning the management accounts lacked particularity, while the allegation based on the aide memoire was wholly refuted and might assist the applicant at trial. Those features did not overcome the statutory threshold for a second appeal.
5. The question of an extension of time therefore did not arise. The applications were refused.

• Court of Appeal (Civil Division): On 30 May 2002, the renewed application for permission to appeal was refused.
• High Court, Chancery Division (Companies Court): The Vice-Chancellor dismissed Mr McAvoy’s appeal from the Registrar’s case-management order dated 30 November 2001.
• Companies Court Registrar: The Registrar dismissed or deferred requests for further information made under Part 18 of the Civil Procedure Rules.