Official Receiver v Stojevic & Anor

In disqualification proceedings under sections 6 and 7 of the Company Directors Disqualification Act 1986, the court has jurisdiction over a foreign-resident shadow director of an English company. The defendant’s centre of main interests is irrelevant because insolvency jurisdiction regulations do not govern disqualification proceedings.

In section 6 proceedings, material considered by the Secretary of State when authorising proceedings may be admissible as prima facie evidence. This includes hearsay, findings of primary or secondary fact and evaluative judgments contained in an earlier judgment. The defendant remains entitled to challenge the material on realistic grounds before the disqualification court.

The Official Receiver sought a disqualification order against Zvonko Stojevic under sections 6 and 7 of the Company Directors Disqualification Act 1986. Mr Stojevic admitted being a shadow director of an English registered company but lived and worked in Austria. He argued that the English court lacked jurisdiction because his centre of main interests was Austria.

The Official Receiver also sought to rely on a judgment in earlier commercial proceedings, which contained findings that Mr Stojevic had acted fraudulently. The issues were whether the court had jurisdiction and whether that judgment was admissible as prima facie evidence in the disqualification proceedings.

1. Jurisdiction. The court had jurisdiction. Following Re Seagull Manufacturing Co Ltd [1994] Ch 91, “company” in section 6(1) includes a company capable of being wound up under the Insolvency Act 1986. Section 6 contains no territorial restriction on the relevant conduct. The reasoning in Re Seagull Manufacturing Co Ltd was compelling and was adopted. The defendant’s status as a shadow director did not remove jurisdiction, given section 6(3)(c).
2. The centre-of-main-interests test was irrelevant. The EC regulation applied only to collective insolvency proceedings listed in Annex A, and did not apply to disqualification proceedings.
3. Hearsay. Section 1 of the Civil Evidence Act 1995 created a broad exception to the hearsay rule. The absence of formal notice did not prevent admission because the court could exercise its procedural discretion and no prejudice was caused.
4. Prior findings and opinions. The general rule in Secretary of State for Trade and Industry v Bairstow [2003] 1 BCLC 696 did not govern section 6 proceedings. Rule 3(2) of the Insolvent Companies Disqualification of Unfit Directors Proceeding Rules 1987 and the implied exception identified in Re Rex Williams Leisure plc [1994] Ch 350 permitted material considered by the Secretary of State when authorising proceedings to be used as prima facie evidence.
5. That material included hearsay, findings of primary and secondary fact and evaluative judgments, including a conclusion that the defendant had acted fraudulently. The earlier judgment was therefore admissible as prima facie evidence. The defendant could challenge any finding or evaluative judgment on realistic grounds, and the disqualification court would then decide what weight, if any, to give it.

First-instance judgment determining jurisdiction and admissibility issues in pending disqualification proceedings. Proceedings against the second defendant had been discontinued.