Elliot Philip Lawless v The Secretary of State for Business and Trade & Ors

Specific or non-party disclosure in directors’ disqualification proceedings requires the applicant to show that the documents sought are relevant to the case to be met and are likely to support the applicant’s case or adversely affect another party’s case. Communications expressing an office-holder’s view about the adequacy of company records are not, without more, evidence of whether those records were in fact adequate or delivered up. Disclosure is therefore not justified merely to reveal the basis for, or development of, the Secretary of State’s case. The court may determine an application before the applicant has formally set out a defence, but the applicant must still establish relevance. A non-party order is exceptional, particularly where the same documents could be sought from a party. Legal professional privilege defeats a request for production of privileged redacted material.

The Secretary of State brought directors’ disqualification proceedings under section 6 of the Company Directors Disqualification Act 1986 against the former sole director of three property-development companies. The allegations concerned failure to maintain or preserve adequate accounting records, or to deliver them to the office-holders.

Before filing his evidence and defence, the applicant sought specific disclosure from the Secretary of State under CPR 31.12 and non-party disclosure from the joint liquidators under CPR 31.17. He sought correspondence concerning investigations into the companies, including communications about the adequacy of their books and records. The central issue was whether that correspondence was relevant or necessary for a fair disposal of the disqualification proceedings.

1. Application dismissed. The applicant was not entitled to specific disclosure from the Secretary of State or non-party disclosure from the joint liquidators.
2. The relevant question was whether the documents sought were likely to support the applicant’s case or adversely affect the Secretary of State’s case, and whether disclosure was necessary for the fair disposal of the proceedings or to save costs. The applicant’s apparent defence was that adequate books and records had been maintained and delivered up.
3. Communications between the Secretary of State and the joint liquidators were irrelevant to that issue. The Secretary of State bore the burden of establishing that the records were inadequate. That burden was not discharged merely by showing that the joint liquidators considered them inadequate. The court would determine the objective adequacy and delivery of the records, not why the joint liquidators had formed their view or what had been communicated between them and the Secretary of State.
4. The quasi-criminal character of directors’ disqualification proceedings and reliance on article 6 of the ECHR did not establish a right to disclosure of irrelevant material. The applicant could apply for specific disclosure before filing his evidence, but remained required to establish relevance.
5. The non-party application failed independently. The same documents were sought from the Secretary of State, and no sufficient reason was shown for an order against the joint liquidators.
6. No order was made for an unredacted email because the joint liquidators asserted legal professional privilege in the redacted material.