The Representation of the Viscount

JurisdictionJersey
CourtRoyal Court
JudgeBailiff
Judgment Date20 September 2022
Neutral Citation[2022] JRC 194
In the Matter of the Representation of the Viscount
And in the Matter of SPARC Group Limited, En Désastre
And in the Matter of Article 24(7) of the Bankruptcy (Désastre) (Jersey) Law 1990

[2022] JRC 194

Before:

R. J. MacRae, Esq., Deputy Bailiff, and Jurats Averty and Hughes

ROYAL COURT

(Samedi)

Désastre — application for a disqualification order

Authorities

Bankruptcy (Désastre) (Jersey) Law 1990.

Companies (Jersey) Law 1991.

Company Directors Disqualification Act 1986.

Sevenoaks Stationers (Retail) Limited [1991] Ch 164.

Dimsey [2000] JLR 401.

Foundations (Jersey) Law 2009

Advocate J. P. Rondel for the Representor.

The Respondent was not present.

EX TEMPORE JUDGMENT
Bailiff

THE DEPUTY

1

Today we heard an application to make a disqualification order against Andrew Jeremy Mills, sole director of SPARC Group Limited (“the Company”). The Company was a property development business.

2

The relevant statutory provisions are as follows:

(i) Article 24(7) of the Bankruptcy (Désastre) (Jersey) Law 1990 (“the 1990 Law”) provides:

“Where the debtor is a company, the Court may, on the application of the Viscount, make any order in respect of a person who is or was a director of the company that it would be permitted to make under Article 78 of the Companies Law in respect of such a person” .

(ii) Article 78 of the Companies (Jersey) Law 1991 (“the 1991 Law”) says:

“(1) If it appears to the Minister, the Commission, or the Attorney General, that it is expedient in the public interest that a person should not without the leave of the court —

(a) be a director of or in any way whether directly or indirectly be concerned or take part in the management of a company;

(b) be a member of the council of a foundation incorporated under the Foundations (Jersey) Law 2009 or in any other way directly or indirectly be concerned or take part in the management of such a foundation; or

(c) in Jersey in any way whether directly or indirectly be concerned or take part in the management of a body incorporated outside Jersey ,

the Minister, the Commission, or the Attorney General may apply to the court for an order to that effect against the person .

(2) The court may, on such an application, make the order applied for if it is satisfied that the person's conduct in relation to a body corporate makes the person unfit to be concerned in the management of a body corporate .

(3) An order under paragraph (2) shall be for such period, not exceeding 15 years, as the court directs .

(4) A person who acts in contravention of an order made under this Article is guilty of an offence .

(5) On the making of an order against a person under this Article, the registrar may record the person's disqualification in a form approved by the Commission.”

3

This is the first case to be decided since the maximum period for disqualification under the 1991 Law was increased from 5 years to 15 years in September 2002.

4

The same maximum period of disqualification applies under the current equivalent UK legislation namely the Company Directors Disqualification Act 1986. We were referred to the provisions of that Act, in particular section 12C which deals with the Court's power to determine unfitness and 12C provides inter alia that “whether a person's conduct as a director of one or more companies … makes the person unfit to be concerned in the management of a company;” is to be determined in every case by the Court having regard to matters set out in paragraphs 1 to 4 of Schedule 1 to the Act. We considered that Schedule and note that the matters to be taken into account in all cases are listed at paragraphs 1 to 4:

“1 The extent to which the person was responsible for the causes of any material contravention by a company or overseas company of any applicable legislative or other requirement .

2 Where applicable, the extent to which the person was responsible for the causes of a company or overseas company becoming insolvent .

3 The frequency of conduct of the person which falls within paragraph 1 or 2 .

4 The nature and extent of any loss or harm caused, or any potential loss or harm which could have been caused, by the person's conduct in relation to a company or overseas company.”

And further there are additional matters to be taken into account where the person is or has been a director:

“5 Any misfeasance or breach of any fiduciary duty by the director in relation to a company or overseas company .

6 Any material breach of any legislative or other obligation of the director which applies as a result of being a director of a company or overseas company .

7 The frequency of conduct of the director which falls within paragraph 5 or 6.”

Plainly this Schedule and their paragraphs have no direct application in Jersey but nonetheless we agree with counsel for the Viscount that they are a useful reference point.

5

In particular it is important to refer to the contents of the Schedule as we were invited to have regard to the decision of the English Court of Appeal in Sevenoaks Stationers (Retail) Limited [1991] Ch 164. In that case Dillon LJ giving the judgment of the Court at page 173 noted that:

“where it falls to a court to determine whether a person's conduct as a director of any particular company or companies makes him unfit to be concerned in the management of a company, the court shall have regard in particular to the matters mentioned in Schedule 1 to the Act.”

The judge went on to say on page 174:

“I would for my part endorse the division of the potential 15-year disqualification period into three brackets, which was put forward by Mr Keenan for the official receiver to Harman J in the present case and has been put forward by Mr Charles for the official receiver in other cases, viz.: (i) the top bracket of disqualification for periods over 10 years should be reserved for particularly serious cases. These may include cases where a director who has already had one period of disqualification imposed on him falls to be disqualified yet again. (ii) The minimum bracket of two to five years' disqualification should be applied where, though disqualification is mandatory, the case is, relatively, not very serious. (iii) The middle bracket of disqualification for from six to 10 years should apply for serious cases which do not merit the top bracket.”

6

Plainly this case is not binding upon us but aspects of the Sevenoaks decision have already been referred to and indeed adopted by the Courts of Jersey. The case of Dimsey [2000] JLR 401 is one such case. Dimsey case was decided prior to the incorporation of the European Convention on Human Rights as a matter of domestic law but the Court of Appeal noted nonetheless that the objective of the relevant provisions of the 1991 Law is not punishment but protection of the public, and accordingly the...

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