Keith Arjoon and 2 others v Maria Daniel (Trinidad and Tobago)
[2023] UKPC 42
Karen Allen and 2 others v Registrar of Companies and another (Montserrat)
5 August 2024
[2024] UKPC 26
Privy Council
Three company directors were banned from being directors. A lower court said one director should not be banned. The Privy Council disagreed, saying the lower court made mistakes about the law and evidence. The banned director will now stay banned. The case clarifies the rules around banning company directors in Montserrat.
Key Facts
- •Three companies (Montobacco, 888, Emerald) were incorporated in Montserrat.
- •All three respondents were directors of Montobacco; Ms Lidbetter was also a director of 888 and Emerald.
- •The companies' affairs were intertwined and lacked proper financial records.
- •Substantial funding came from investments exceeding US$2 million, largely from the Andrianakos brothers.
- •A court-appointed inspector found intent to defraud and recommended disqualification of the respondents.
- •The High Court disqualified the respondents for varying periods.
- •The Court of Appeal partially allowed the appeal, restricting disqualification to three named companies and setting aside Ms Allen's disqualification.
- •The appellants appealed to the Privy Council.
Legal Principles
Weight to be given to inspector's reports in disqualification proceedings.
Secretary of State for Business, Enterprise and Regulatory Reform v Aaron [2008] EWCA Civ 1146; Rogers v Hoyle [2014] EWCA Civ 257; In re Rex Williams Leisure plc [1994] Ch 1
Burden of proof in disqualification proceedings is the balance of probabilities.
None explicitly stated, but inferred from general civil procedure.
Definition of 'unfitness' in director disqualification cases.
In re Sevenoaks Stationers (Retail) Ltd [1991] Ch 164; In re Lo-Line Electric Motors Ltd [1988] Ch 477; In re Barings plc (No 5) [2000] 1 BCLC 523
Construction of sections 65(2) and 66(1) of the Montserrat Companies Act (2019 revision).
Montserrat Companies Act (Cap 11.12) (2019 revision), sections 65(2) and 66(1)
Privy Council's jurisdiction to grant special leave to appeal.
Judicial Committee Act 1833; Montserrat (Appeals to Privy Council) Order 1967 (SI 1967/233)
Outcomes
Appeal allowed.
The Court of Appeal erred in its interpretation of sections 65(2) and 66(1) and in its assessment of the weight to be given to the inspector's report and the seriousness of Ms Allen's incompetence. Ms Allen's disqualification should be reinstated.
Ms Allen's disqualification reinstated.
The judge's finding of unfitness was supported by evidence of Ms Allen's lack of probity, even without considering her incompetence. The Court of Appeal's criticisms of the judge's reasoning were unfounded.
Disqualification orders for Mr Fagen and Ms Lidbetter modified.
The Court of Appeal's restriction of the disqualification to three named companies was correct in terms of the construction of section 66(1), but should have included a declaration clarifying the wider effect under section 65(2).
Privy Council's grant of special leave upheld.
The Privy Council's jurisdiction to grant special leave is separate from the Court of Appeal's decision to refuse an extension of time. The appeal raised points of general public importance.
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