The Secretary of State For Business and Trade v Mohammad Ahmedivand

An adjournment application must be determined by applying the overriding objective to all the circumstances. A late application supported only by a fitness-to-work certificate will not ordinarily establish inability to participate in a trial, particularly where remote participation is available.

For disqualification under section 6 of the Company Directors Disqualification Act 1986, the court considers whether the proved conduct amounts to misconduct, whether it demonstrates unfitness, and the appropriate period of disqualification. Knowingly overstating turnover to obtain more government-backed loan funding than a company was entitled to may amount to misconduct and unfitness, even where dishonesty and personal benefit are not alleged.

The Secretary of State sought the disqualification of the defendant under section 6 of the Company Directors Disqualification Act 1986. The claim alleged that, as sole director of UK Dream House Ltd, he knowingly overstated the company’s 2019 turnover in an application under the Bounce Back Loan Scheme, causing it to obtain £20,000 rather than approximately £3,600–£4,800.

The defendant had previously contested the claim but, shortly before trial, sought an adjournment to obtain legal representation and because of lower back pain. The application was refused and the trial proceeded in his absence. The central issues were whether the application was properly refused, whether the defendant’s conduct amounted to misconduct and unfitness, and what period of disqualification was appropriate.

1. Adjournment. The court had discretion under CPR rule 3.1(2)(b), to be exercised consistently with the overriding objective in CPR rule 1.1. The defendant had known the trial date for months, had sufficient time to obtain replacement solicitors, and had not shown that self-representation was impracticable. The fitness-to-work certificate did not establish inability to attend or participate in a trial. It did not explain the doctor’s familiarity with the condition, the features preventing participation, or provide a reasoned prognosis. Remote participation and remote cross-examination were available. The lateness of the application, wasted costs and court resources, and the availability of the defendant’s written evidence all supported proceeding with the trial.
2. Findings on the loan application. The defendant understood that the company, incorporated and trading before 1 January 2019, could borrow no more than 25% of its actual 2019 turnover. The declared turnover of £80,000 was materially overstated. The defendant knew that the company’s true turnover was approximately £14,566–£19,352 and knowingly provided false information, causing the company to obtain approximately £15,000–£16,000 more than it was entitled to.
3. Misconduct and unfitness. Applying the three-stage approach in Re Structural Concrete Ltd, the conduct amounted to misconduct. It abused the privileges of limited liability and breached the trust placed in directors to self-certify accurately during a national crisis. The substantial and knowing overstatement demonstrated an attitude to directors’ responsibilities inconsistent with commercial morality and rendered the defendant unfit, notwithstanding that only one instance was proved and the particular misconduct could not recur after closure of the scheme.
4. Disqualification period. The case fell within the middle bracket identified in Re Sevenoaks Stationers (Retail) Ltd. The court distinguished more serious cases involving larger loans, negligible legitimate turnover or personal benefit. It treated the absence of dishonesty as material, but the knowing fourfold overstatement remained serious. The appropriate period was nine years.
5. The claim succeeded. A nine-year disqualification order was made. Costs and consequential relief were left for further submissions.

This was a first-instance claim. The defendant’s adjournment request was refused, and the trial proceeded in his absence.