Key Facts
- •Nicholas Brown, managing director of Brown and Mason Group Limited (BMG), was subject to a disqualification undertaking under s.9B of the Company Directors Disqualification Act 1986 (CDDA) following a Competition and Markets Authority (CMA) investigation into anti-competitive conduct.
- •BMG admitted infringements relating to the Shell Building and Lots Road Power Station sites, resulting in a £2,400,000 penalty.
- •Brown sought permission under s.17 CDDA to continue acting as a director of BMG and its holding company, NRLB Limited.
- •The CMA opposed the application, arguing that granting permission would undermine the deterrent effect of the disqualification.
- •Brown argued that his expertise and relationships were crucial for BMG's continued viability.
- •BMG implemented significant competition compliance improvements following the CMA investigation.
Legal Principles
The court has unfettered discretion under s.17 CDDA to grant leave for a disqualified person to act as a director, balancing relevant factors.
Rwamba v Secretary of State for BEIS [2020] EWHC 2778 (Ch)
In competition disqualification cases, the seriousness of the conduct and the need for the applicant's services are key considerations, alongside public protection and deterrence.
Fourfront Group Limited; Stamatis v CMA [2019] EWHC 3318 (Ch) and Sherling v CMA [2021] EWHC 2463(Ch)
The court should consider the purposes of a disqualification order, including protecting the public and deterring misconduct.
Rwamba v Secretary of State for BEIS [2020] EWHC 2778 (Ch)
Leave should not be granted if it undermines the purpose of the disqualification order, considering the public perception of the decision.
Rwamba v Secretary of State for BEIS [2020] EWHC 2778 (Ch)
The seriousness of the misconduct is a material factor, and dishonesty may weigh heavily against granting leave.
Secretary of State for Trade and Industry v Barnett [1998] 2 BCLC 64
Outcomes
Brown's application for permission to act as a director of BMG was refused.
Balancing the public interest in maintaining the deterrent effect of the disqualification regime against BMG's potential harm from Brown's absence, the court found that the risk of undermining the competition regime outweighed the potential harm to BMG.
Brown's application for permission to act as a director of NRLB was refused.
Insufficient evidence was presented to justify granting permission for NRLB, a holding company, given the reasons for refusing the application concerning BMG.
A one-year extension of permission was granted for Brown to act as a director of both BMG and NRLB until 28 July 2024.
To allow BMG time to adjust to Brown's eventual disqualification and avoid undue harm to the business, considering the public interest in maintaining the disqualification's deterrent effect.