The Secretary of State for Business, Innovation And Skills v Weston & Anor

The civil court has jurisdiction under Company Directors Disqualification Act 1986, section 2, even where the convicting criminal court considered and refused disqualification. Jurisdiction and abuse of process are distinct questions.

A subsequent section 2 application based on the same conviction, facts, jurisdiction and relief will ordinarily be an abuse of process where the criminal court made a positive decision refusing an order. The fact that the later application is brought by another state agency does not remove the unfairness of requiring the defendant to face the same claim twice.

The Secretary of State sought disqualification orders against two company directors under section 2 of the Company Directors Disqualification Act 1986, following their convictions for fraud and forgery connected with false confirmations concerning tenants’ deposits.

The Crown Court had subsequently considered disqualification and positively decided not to make orders. The defendants argued that the High Court proceedings were an abuse of process. The central issues were whether the High Court had jurisdiction under section 2 and, if so, whether exercising it would amount to an abusive collateral attack on the Crown Court’s decision.

1. Jurisdiction. Section 2 of the Company Directors Disqualification Act 1986 expressly gives jurisdiction to both the convicting court and an appropriate civil court. That jurisdiction arises after conviction and is not qualified by whether the criminal court exercised, overlooked or refused to exercise its own power.
2. Abuse of process. The question whether the civil application should proceed is separate. The court must consider whether continuing the proceedings would be manifestly unfair to a party or would bring the administration of justice into disrepute among right-thinking people. Abuse is a broad judgment based on all relevant circumstances, not a series of fixed categories.
3. The degree of factual and legal overlap is highly relevant, as is whether the later proceedings constitute a collateral attack on an earlier decision. Here the two applications invoked the same section, arose from the same convictions and sought the same relief. The Crown Court had considered the issue and positively refused disqualification. The High Court application therefore exposed the defendants to the same claim twice.
4. The different identity of the applicants did not cure the abuse. Disqualification is sought for the public good, rather than to vindicate a private right, and the potential remedy was essentially identical. Fairness required that the defendants should not face repeated section 2 applications by different litigants dissatisfied with the earlier outcome.
5. The earlier authorities concerning section 6 proceedings did not govern this case because section 6 involves a wider inquiry into unfitness. In future cases, the Secretary of State could preserve the possibility of later proceedings by commencing and staying section 6 proceedings, or by bringing proceedings under section 4 on a sufficiently different factual basis.
6. The claim was dismissed as an abuse of process. The judge stated, obiter, that if the claim had proceeded, disqualification periods of six years for Mr Weston and five years for Mr Williams would have been imposed.

First-instance decision. No prior appellate decision is stated in the judgment.