COMPANY—Director—Disqualification proceedings—Director undertaking not to become director for specified period —Long delay—European Court of Human Rights’ decision that director’s civil rights and obligations not determined within reasonable time —Whether director entitled to have disqualification proceedings dismissed and undertaking set aside

Secretary of State for Trade and Industry v Eastaway (No 2)

CA: Tuckey, Rix and Arden LJJ: 10 May 2006

A company director against whom disqualification proceedings were pending was not entitled to have an undertaking made under the Carecraft procedure (see In re Carecraft Construction Co Ltd [1994] 1 WLR 172) set aside and the disqualification proceedings dismissed on the ground that the Strasbourg court had concluded that his civil rights and obligations had not been determined within a reasonable time pursuant to art 6 of the Convention.

The Court of Appeal so stated when dismissing the appeal of Nigel Antony Eastaway, the director, from the decision of Lightman J EWHC [2006] 299 (Ch); [2006] 2 BCLC 489 rejecting his application for the dismissal of disqualification proceedings brought against him by the Secretary of State for Trade and Industry and the setting aside of the undertaking given by him in May 2001 not to act as a director for 4 ½ years.

ARDEN LJ said that it was accepted by both parties that in a length of proceedings case the finding of a violation of art 6 did not necessarily mean that there could not be a fair trial of the proceedings or that the proceedings had to be struck out: see A-G’s Reference(No 2 of 2001) [2004] 2 AC 72. Counsel submitted that it followed from the decision of the Strasbourg court that there could not be a fair trial and that accordingly the court was bound to come to the conclusion that a fair trial had no longer been possible, and that the court was bound to take the Strasbourg decision into account because of s 2 of the Human Rights Act 1998 and the court’s obligation was thus to follow that decision: see [2005] 2 AC 296, 306. The Strasbourg court did not make any finding that there could be no fair trial of the disqualification proceedings despite the delay. Such a finding was not implicit in its decision that art 6 was violated because of the delay. In summary: (1) The director did not as part of his application in 2001 (Re Blackspur Group plc: Secretary of State for Trade and Industry v Eastaway [2001] 1 BCLC 653) for the dismissal of the proceedings contend that the disqualification proceedings against him should be dismissed on the grounds that a fair trial would be impossible; (2) An application to dismiss the disqualification proceedings on the grounds that a fair trial would have been impossible in 2001 could not now been made and in any event it would not be seriously arguable; (3) It followed that no declaration could be made by the court that the disqualification undertaking should not have been offered by the director or accepted by the Secretary of State; (4) In any event, the director had waived his right to bring an application for the dismissal of the disqualification proceedings on the grounds that a fair trial was impossible when he gave the undertaking that he would sign the agreed statement of facts and enter into the Carecraft procedure; (5) The director was and is not a “victim” for the purposes of s 7(7) of the 1998 Act in respect of any claim [that as a result of the delay there could not now be a fair trial]. The appeal would be dismissed.

RIX and TUCKEY LJJ agreed.

Appearances: Matthew Collings QC (BCL Burton Copeland) for the director: Malcolm Davis White QC and Jason Coppel (Treasury Solicitor) for the Secretary of State.

Reported by: Carolyn Toulmin, barrister