Company

Director - disqualification - performance of director in witness box - neither separate ground of unfitness nor justification for longer period of disqualificationReynard v Secretary of State for Trade and Industry: ChD(Blackburne J): 22 June 2001The secretary of state commenced disqualification proceedings against R following the winding up of H Ltd, a company of which R was the sole director.

In July 2000 the registrar made a disqualification order against R for a period of ten years.

In giving judgment, the registrar had also been highly critical of R's conduct in the witness box, saying that he had 'lacked frankness' and had been 'disingenuous, equivocal and on some occasions untruthful.' R appealed.Augustus Ullstein QC and Ian McCulloch (instructed by The Andrew Isaacs Practice, Bournemouth) for R Gregory Banner (instructed by Wragge & Co, Birmingham) for the secretary of state.Held, allowing the appeal in part and substituting a shorter period of disqualification of five-and-a-half years, that an appellate court should be reluctant to interfere with findings of primary fact by the court below, and was at a particular disadvantage where the court below's findings on unfitness had been influenced by the demeanour of the respondent in the witness box; but that R's performance as a witness could not be taken into account as a freestanding additional allegation of unfitness; that the manner in which a director acquitted himself in the witness box could be highly relevant as to whether an allegation of misconduct was made out, and might also serve as mitigation in the director's favour in fixing the period of disqualification, but it could not serve as a discrete head of misconduct, or justify a longer period of disqualification, since it did not relate to the director's conduct as a director; that the period of disqualification had to be fixed by reference only to the matters properly alleged against the respondent which had been found to be established, and to have made him unfit to be concerned with the management of a company; that while the appropriate period of disqualification was a matter for the discretion of the trial judge, the registrar's exercise of his discretion was open to review as he had taken into account matters which either should not have been considered at all or which did not amount to misconduct; and that it was appropriate to reduce the period of disqualification to five-and-a-half years.