Feld v The Secretary of State for Business, Innovation And Skills

A court order is construed by reference to the natural and ordinary meaning of its words, read in their syntax, context and background. Its interpretation cannot be assimilated entirely to contractual or statutory interpretation. Where the person subject to the order helped draft it, the court may consider what that person could reasonably have intended, objectively assessed. An order need not resolve every possible application in order to be sufficiently clear. Breach of a clear restriction imposed under the Company Directors Disqualification Act 1986 may establish unfitness under section 6, requiring disqualification whether or not the breach caused the company’s insolvency.

The appellant challenged a disqualification order made by Registrar Derrett under section 6 of the Company Directors Disqualification Act 1986. He had obtained permission under section 17 to act as a director of Aerospace & Technical Engineering Ltd, subject to conditions restricting his involvement in the company’s finances.

The Registrar found that he had repeatedly breached those conditions and was unfit to manage a company. She imposed a 12-year disqualification, reduced by credit for a period during which he had undertaken not to act as a director. The appeal concerned the interpretation and clarity of the order, an alleged procedural irregularity, and the length of the disqualification.

1. Appeal dismissed. The order made by Registrar Derrett under section 6 of the Company Directors Disqualification Act 1986 was upheld, including the 12-year period of disqualification.
2. A court order is construed from the natural and ordinary meaning of its language in light of syntax, context and background. The approach is related to statutory interpretation, although the applicable factors depend on the nature of the document. The principles used by the Registrar, drawn from Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, were therefore substantially appropriate.
3. The court’s intention is ordinarily central when construing a court order. Where the person subject to the order participated in drafting it, the court may also consider what that person could reasonably have intended, objectively assessed. This is distinct from relying on the person’s subjective understanding.
4. The financial restriction in the order was neither obtuse nor incoherent. It was sufficiently clear when read as a whole. An order need not be clear in every conceivable circumstance to be capable of being understood without significant difficulty.
5. The undisputed evidence established repeated breaches of the restriction. Those breaches were sufficient to establish unfitness under section 6. Once unfitness was established, the statutory duty to make a disqualification order applied, irrespective of whether the breaches contributed to the company’s failure.
6. The alleged procedural irregularity concerning the appeal bundle caused no injustice and was not serious. The Registrar’s factual findings and the parties’ common understanding of the order remained unaffected.
7. The length of disqualification was discretionary. The Registrar’s assessment fell within the generous ambit of reasonable disagreement. The previous fraud-related disqualification and the deliberate, repeated and knowing breaches justified placing the case in the top bracket.

• High Court (Chancery Division): Appeal from the disqualification order made by Registrar Derrett on 30 July 2013 dismissed.