Thursday 17 October 2019

UK: England and Wales: leave to act as a director whilst disqualified to act as such

Judgment was given today in Rwamba v The Secretary of State for Business Energy And Industrial Strategy [2019] EWHC 2669 (Ch). The unusual facts of the case make it noteworthy: an application for permission to act as a director, under section 17 of the Company Directors Disqualification Act 1986, by a director previously disqualified for breaches of an order under section 17. ICC Judge Prentis stated (para. [31]):
Permission given to one who has already been disqualified twice, and the second time for breach of an earlier permission, carries with it the unavoidable additional risk that the disqualification regime is perceived as lax and permissive, a perception which would lead to a lowering of corporate standards contrary to a purpose of the Act. So, the reasons in favour of permission are going to have to be that the more cogent if it is to be granted".

Permission to act as a director was not granted: while the reasons advanced for permission were regarded as legitimate, ICC Judge Prentis found the evidence "simply too fragile to ascribe them much cogency" (para. [72]). The required full explanation for why permission was sought, with relevant corroborative evidence, was not provided. To grant permission in such circumstances, the judge stated, would be "an undermining of the public protection policy within the Act" (para. [72]).

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