Ahmed v The Secretary of State for Business, Energy And Industrial Strategy

An application under Company Directors Disqualification Act 1986, s 8A, must be determined on its substance even where relief under s 17 is also available. The provisions have different purposes and effects: s 17 permits involvement in a specified company, whereas s 8A may reduce or end the undertaking generally. Section 8A is a corrective power available only where subsequent circumstances of a type or gravity not intended to be covered, or not reasonably foreseeable, make relief appropriate. Rehabilitation is an intended outcome of the disqualification regime and will not, by itself, constitute special circumstances. Only particularly compelling and unusual circumstances may justify relief based on rehabilitation.

Bilal Ahmed appealed from a decision of Deputy ICC Judge Barnett dated 10 July 2020. The judge refused his application under s 8A of the Company Directors Disqualification Act 1986 to bring his five-year disqualification undertaking to an end, but granted permission under s 17 to act as a director of NuBnk Limited subject to conditions.

Mr Ahmed accepted the original basis of his undertaking but relied on subsequent recovery from mental illness and addiction. The appeal alleged that the judge had wrongly treated s 17 as the appropriate route and had failed to determine the s 8A application. The central issues were the interaction between ss 8A and 17, the meaning of special circumstances, and whether rehabilitation justified shortening the undertaking.

1. Appeal allowed on the reasoning, but the result upheld. The Deputy ICC Judge erred in failing to determine the substance of the s 8A application. Section 17 and s 8A provide distinct forms of relief. Section 17 gives leave to act in a specified way for a specified company; s 8A reduces or ends the undertaking generally. Availability of the narrower alternative did not answer the primary s 8A application.
2. The approach in Re INS Realisations Limited [2006] 1 WLR 3433 was applicable. Section 8A may be engaged where the original factual basis of the undertaking is impugned, or where subsequent circumstances arise which were not intended to be covered or could not reasonably have been foreseen. The existence of such circumstances does not require relief; the court must exercise a fact-sensitive discretion.
3. The judge’s reasoning also confused the purposes of ss 8A and 17. Nothing in the Act suggests that an undertaking may only be varied or revoked through s 17. Section 17 does not vary or revoke the undertaking; it operates within its terms by granting specific leave.
4. Rehabilitation alone did not justify relief. Rehabilitation is an underlying policy objective of the disqualification regime and is therefore an anticipated, desired outcome of an undertaking. It is not, without more, a special circumstance under s 8A. The court did not exclude the possibility that particularly compelling and unusual facts might justify relief based on rehabilitation.
5. On the evidence, Mr Ahmed’s recovery was substantial and genuine, but the circumstances were insufficiently compelling to justify ending or shortening the undertaking. The order refusing s 8A relief was therefore upheld, although for different reasons. The s 17 permission remained in force.

• High Court (Chancery Division): appeal from the decision of Deputy ICC Judge Barnett dated 10 July 2020. The court upheld the refusal of relief under s 8A, while holding that the lower court had failed to determine that application correctly.