The Official Receiver v Nduka Obaigbena

Permission to appeal in director-disqualification proceedings should be confined to grounds that disclose a realistically arguable error of law, principle or sentence. An appellant will ordinarily be refused permission to raise a new evidential challenge that was not put to the witness or argued at trial, particularly where fair determination would require further evidence. A possibly erroneous factual finding will not justify an appeal unless it realistically affected the substantive findings or the period of disqualification. A sentence may be arguable where the judge may have adopted too high a starting bracket or failed to take relevant mitigation into account.

The Official Receiver obtained findings that Nduka Obaigbena, a director of Arise Networks Limited, was unfit to be a company director. On 8 April 2021, Deputy Insolvency and Companies Court Judge Agnello QC made a disqualification order under the Company Directors Disqualification Act 1986 for seven years.

Mr Obaigbena renewed his application for permission to appeal on five grounds, including alleged errors in the legal test, the treatment of creditor evidence, findings concerning an alleged EPG asset, and the length of the disqualification period. The central issues were whether the proposed grounds were properly arguable and whether new evidential criticisms could fairly be raised for the first time on appeal.

1. Permission to appeal was granted on ground 1, subject to formal redrafting. The existing ground was unclear, but oral argument made the alleged error sufficiently clear and identified an arguable complaint that the wrong legal test had been applied.

2. Permission was refused on ground 2A. The proposed challenge to the Official Receiver’s creditor evidence had not been raised at trial or put to Mr Hannan in cross-examination. It was a new challenge supported by extensive material that consisted substantially of argument, opinion and re-analysis. Fair determination would require Mr Hannan to answer the criticisms, and no application for further evidence had been made.

3. Permission was refused on grounds 2 and 4. The first-instance judge may have been wrong to conclude that the alleged EPG asset did not exist. However, the judgment showed that the findings of unfitness and the seriousness of the conduct did not depend on whether the asset had been invented or merely wrongly presented as available to creditors. The possible error therefore provided no realistic basis for arguing that the result or sentence was affected.

4. Permission was granted on ground 3. It was reasonably arguable that the judge had started from too high a sentencing bracket or, if the case belonged in the middle bracket, had failed to take all mitigating circumstances into account. The court expressed no concluded view on the merits of that ground.

• High Court (Chancery Division): Deputy Insolvency and Companies Court Judge Agnello QC, on 8 April 2021, found the allegations established, declared the defendant unfit to act as a company director, and imposed a seven-year disqualification under the Company Directors Disqualification Act 1986.
• High Court (Chancery Division): Renewed permission to appeal was granted on grounds 1 and 3, subject to redrafting of ground 1, and refused on grounds 2A, 2 and 4.