The judge in director disqualification proceedings was wrong to rule at a pre-trial review that the parties should not be able to challenge and should be bound by the findings of fact in previous civil proceedings to which the defendant director was a party.Appeal by the defendant to director disqualification proceedings ('B') from a decision of Pumfrey J at a pre-trial review that the parties in the disqualification proceedings were to be bound by the findings of Nelson J in previous civil proceedings. B was the chairman and joint managing director of QMH. He was dismissed in 1993 and he and others of his co-directors issued proceedings against QMH claiming damages for wrongful dismissal. QMH claimed that B was rightly dismissed for grave misconduct, neglect in performance of his duty and breach of his service agreement. Nelson J gave two judgments in favour of QMH (Bairstow v Queen's Moat Houses plc (1999) and Bairstow v Queen's Moat Houses plc (1999)) and the Court of Appeal dismissed B's appeal (Bairstow v Queen's Moat Houses plc (2001)). In the meantime in February 2001 the Secretary of State for Trade and Industry commenced proceedings against B and three of his fellow directors of QMH under s.8 Company Directors Disqualification Act 1986. In those proceedings the Secretary of State relied on the findings of Nelson J. At a pre-trial review Pumfrey J, applying Hunter v Chief Constable of West Midlands Police (1982) AC 529, ruled that both sides could not challenge and were to be bound by the findings of Nelson J in the proceedings between B and QMH, because a re-examination of those facts could not be justified in the interests of justice. B appealed arguing that the findings of Nelson J were not binding by way of estoppel and, relying on Hollington v F Hewthorn & Co Ltd (1943) KB 587, that the findings of Nelson J were not evidence of those facts.HELD: (1) Disqualification proceedings were conducted on affidavit and the only witnesses at the hearing of the application to disqualify were likely to be B and his fellow defendant directors. The suggestion that the order under appeal was required to prevent a trial of a length approximating that before Nelson J was fanciful. (2) The factual findings of Nelson J in the earlier proceedings were not admissible as evidence of the facts so found. Hollington v Hewthorn was not confined to cases in which the earlier decision was that of a criminal court (Three Rivers District Council & ors v Governor & Co of the Bank of England (No.3) (2001) 2 All ER 513 applied). (3) The Secretary of State accepted that the factual findings of Nelson J in the proceedings between B and QMH were not binding on the parties to the disqualification proceedings by way of estoppel because the Secretary of State was not a party or privy of a party to the proceedings before Nelson J. (4) The abuse of process principle in Hunter v Chief Constable of West Midlands could apply to B even though he had not initiated proceedings seeking to circumvent the earlier judgments of Nelson J (Reichel v Magrath (1889) 14 App Cas 665 applied). (5) A collateral attack on an earlier decision of a court of competent jurisdiction was not necessarily an abuse of the process but could be so if re-litigation of an issue previously decided would be manifestly unfair to a party or would bring the administration of justice into disrepute (Arthur J S Hall & Co (a firm) v Simons : Barratt v Ansell & Ors (T/A Woolf Seddon (a firm)) : Harris v Scholfield Roberts & Hill (a firm) (2002) AC 615). It was not manifestly unfair to the Secretary of State that he should be required to prove the serious allegations he made with regard to the conduct of B by legally admissible evidence. Nor would that course bring the administration of justice into disrepute. The order of Pumfrey J should be set aside and the matter remitted for a further pre-trial review.Appeal allowed.

[2003] EWCA Civ 321

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