Key Issue: Determining Unfitness and Disqualification of De Facto Directors under the Company Directors Disqualification Act 1986

Citation: [2006] EWHC 1804 (Ch)
Judgment on


In the case of Secretary of State for Trade & Industry v Hollier & Ors [2006] EWHC 1804 (Ch), the High Court of Justice, Chancery Division, addresses a number of pivotal legal principles pertinent to company law and directorship in the context of disqualification proceedings under the Company Directors Disqualification Act 1986 (the 1986 Act). This case delves into the definition of a de facto director, the distinction between de facto and shadow directors, the concept of ‘unfitness’ for the purposes of director disqualification, and the evidentiary burdens and standards required to establish such unfitness.

Key Facts

The case involves several members of the Hollier family and other individuals in relation to their conduct concerning the management of Amba Rescue Limited, Amba Claims Services Limited, Amba Group International plc (collectively referred to as ‘Amba’), and plc (‘Nextime’). Following significant financial troubles, insolvency, and a subsequent investigation by the Department of Trade and Industry (DTI), the Secretary of State sought disqualification orders against the defendants under Section 8 of the 1986 Act on the grounds that they acted as de facto directors and their conduct rendered them unfit to be concerned in the management of a company.

The court outlined several legal principles central to this case:

  1. De facto Director: The judgment discusses at length what constitutes a de facto director, noting the importance of being part of the corporate governing structure and distinguishing between those who participate in decision-making at this level (de facto directors) as opposed to mere employees, agents, or advisors.

  2. Unfitness and Disqualification: The judgment considers the statutory requirements for deeming a director unfit under the 1986 Act, focusing on high levels of incompetence or lack of probity, and the mandatory need for disqualification to protect the public interest.

  3. Evidence and Burden of Proof: The court emphasizes the need for cogent evidence reflecting the serious nature of the allegations and consequences of director disqualification, applying the ordinary civil standard of the balance of probabilities.

  4. Conduct of Business: The court scrutinizes the defendants’ involvement in continued trading despite insolvency, deceptiveness to customers, and the improper use of company assets, as it relates to their unfitness to manage a company.

  5. Cooperation with Investigations: The court regards lack of cooperation with the DTI’s inquiries and failure to preserve and provide critical company information as indicative of unfitness for directorship.


The outcomes of the case with regard to the individual defendants are as follows:

  • Jayson Hollier: Dismissed from proceedings as the SoS failed to establish on the balance of probabilities that he acted as a de facto director of Amba or benefitted from it financially.

  • Adrian Hollier: Found to have acted as a de facto director of Amba and a disqualification order to be made against him on the grounds of achieved unfitness.

  • Barbara Ann Hollier: Held to have acted as a de facto director of Nextime and a disqualification order to be made against her based on established unfitness.


In ‘Secretary of State for Trade & Industry v Hollier & Ors’, the court provides a comprehensive examination of the elements constituting a de facto director and the criteria for adjudging the unfitness of a company director. The decision underscores the necessity for individuals involved in corporate governance to uphold standards of probity and competence, with incompetence needing to be established to a high degree. This case serves as a poignant reminder of the onerous responsibilities borne by directors and the serious implications of their disqualification. The case also highlights how personal relationships and a lack of formal appointments do not shield individuals from the responsibilities and consequences associated with the function of directorship within a company.