Home Information Cases Secretary of State for Trade and Industry v Rayna and anor (2001)

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Secretary of State for Trade and Industry v Rayna and anor (2001)

Summary

Secretary of state's application to restore directors' disqualification proceedings which had stood adjourned pending the resolution of related criminal proceedings.

Facts

The application was opposed by the first and second respondents, who were two of the directors of the companies concerned, on the ground that the proceedings had become an abuse of process by reason of disqualification orders made against them in the criminal proceedings. These proceedings were commenced in 1995, but were stayed in 1999 when the respondents were charged with a variety of criminal offences. In June 2000 the respondents pleaded guilty to various counts of conspiracy to defraud creditors and false accounting, for which they were each sentenced to immediate terms of imprisonment and were also each disqualified for two years under s.2 Company Directors Disqualification Act 1986. The respondents now contended that: (i) these proceedings were an abuse of process, since the respondents were at risk of double jeopardy; and in the alternative (ii) these proceedings were now barred by the doctrine of former recovery because relief for the same purpose had already been granted in the criminal proceedings in respect of the same, or substantially the same, facts and events.

Held

(1) The doctrine of former recovery was not applicable, bearing in mind the different parties to the two sets of proceedings, their different natures, the different interests of the two "prosecutors" and the different statutory jurisdictions. (2) Nor did the doctrine of double jeopardy apply between civil and criminal proceedings. Saeed v GLC (1986) IRLR 2 applied. (3) The correct principles to be applied were those of abuse of process. The relevant factors in this regard were that: (a) the secretary of state, who had been entrusted by Parliament with the conduct of civil disqualification proceedings, was not a party to the criminal proceedings; and (b) there was a difference in focus between civil and criminal disqualification proceedings: the former focused on disqualification only after the facts sufficient to secure a conviction had been given, whereas in the latter the focus was on the issue of unfitness throughout. (4) In order to establish an abuse of process it would have to be shown that the basis of the decision to disqualify in the criminal proceedings was the same as the basis on which the secretary of state was proceeding in the civil proceedings. (5) Applying those principles to the facts of the instant case, there was no basis for refusing the application to restore.

Application to restore granted.

Chancery Division
Anthony Mann QC
Judgment date
16 March 2001
References

​LTL 3/4/2001 : (2001) 2 BCLC 48 : Times, April 3, 2001

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