Home Information Cases Secretary of State for Trade & Industry v (1) Goldberg (2) Mcavoy (2002)

Skip to content. | Skip to navigation

Navigation
 

Secretary of State for Trade & Industry v (1) Goldberg (2) Mcavoy (2002)

Summary

An application for an order striking out director disqualification proceedings unless the secretary of state answered requests for information under CPR Part 18 was rightly dismissed because the requests were premature and it was not reasonably necessary or proportionate to require the secretary of state to provide the information sought.

Facts

The second defendant director (M) appealed against the dismissal of his application for an order striking out the director disqualification proceedings against him unless the respondent secretary of state answered a request for information under CPR Part 18. M was a qualified chartered accountant who had joined the board of a football club when the first defendant (G), through his company, had obtained the controlling interest in it. The club went into administration and the secretary of state commenced director disqualification proceedings against G and M. The disqualification application, as required by the Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987, was supported by the affidavit of the official receiver which set out in detail the conduct of G and M which the secretary of state said made them unfit to be concerned in the management of a company. Before he put in his affidavit in answer M served a request for information under CPR Part 18. The secretary of state maintained that that was premature but he nevertheless gave some information in relation to some of the requests. M served his evidence in answer and then applied to strike out the disqualification proceedings unless the outstanding requests for information were duly answered. The registrar dismissed M's application on grounds that the request for information was premature unless and until the evidence of the secretary of state in reply had been served and that the individual requests for information were not such that the secretary of state either could or should give the information at that stage. M submitted that (1) matters which had not been raised in the secretary of state's initial affidavit could not be relied upon by him in his contention that the director in question was unfit; (2) if a matter could not be "in dispute", for the purposes of CPR Part 18, until the affidavit in answer had been served, then there was no practical and sensible way in which an unclear affidavit in support of the application could be clarified.

Held

(1) Matters not raised in the initial affidavit could be relied on provided that that was not unjust in the circumstances, In Re Sevenoaks Stationers (Retail) Ltd (1990) 3 All ER 578 applied. It was not appropriate to import the technicalities associated with criminal charges into the disqualification jurisdiction. (2) The phrase "in dispute" in CPR Part 18 was not a phrase of any technicality and a matter could be in dispute because of the nature of the proceedings, correspondence or as in the instant case because of what was plainly stated in the acknowledgment of service, in which M indicated that he intended to contest the application. Therefore the jurisdiction under Part 18 had been available at all times for resolving any problems of uncertainty, or for obtaining clarification of any matters which required it. Under the CPR the appropriate course of action was, if it was appropriate, to apply for information under Part 18 and only as a last resort should the director apply to have the application struck out, Sutton Glassworks Ltd, Re (1997) 1 BCLC 26 considered. The practice direction to Part 18 specified that the request for information must be concise and strictly confined to matters which were reasonably necessary and proportionate to enable the first party to prepare his own case, or to understand the case he had to meet. Since M had already served his evidence in answer there could be no question of striking out the application unless it came within CPR r.3.4, which it was not suggested that it did. Therefore the application failed on that ground alone. (3) The individual requests for information were premature. There was no suggestion that M was unable to answer the allegations against him. The allegations that were made against M were adequately and properly summarised in the initial affidavit. It was not reasonably necessary or proportionate to require the secretary of state to provide the information sought and certainly not at the stage which the proceedings had reached.

Appeal dismissed.

Chancery Division
Sir Andrew Morritt VC
Judgment date
12 March 2002
References

LTL 3/2/2005

Practice areas