England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
COMPANIES COURT
(Mr Justice Blackburne)

		Royal Courts of Justice Strand London WC2 Tuesday 20th November, 2001

1. LORD JUSTICE SEDLEY: This application is made in person by Mr Christopher Reynard, who was originally disqualified for a period of 10 years by Mr Registrar Simmonds from running a limited company (I put it shortly) on the ground of misconduct manifesting unfitness. The Registrar's order was upheld on appeal by Blackburne J, but the period of disqualification was reduced by the judge from 10 to 5½ years. The judge also altered in Mr Reynard's favour the costs order made by the Registrar.
2. Both Mr Reynard and the Secretary of State, his antagonist in the proceedings, sought permission to appeal against the decision of Blackburne J.
3. Until this morning, because the full papers were not before me, I was under the impression that I was to hear both Mr Reynard's and the Secretary of State's applications, since I had with the papers only Aldous LJ's written refusal of permission to Mr Reynard to appeal. I did not have what the associate has now found for me, Aldous LJ's simultaneous grant of permission to appeal to the Secretary of State on grounds one and four of his grounds of appeal.
4. The reason for the refusal by Aldous LJ of Mr Reynard's application for permission to appeal was this:

"This is an application for a second appeal. CPR Part 52.13 states that the Court of Appeal will not give permission unless it considers that the appeal would raise an important point of principle or practice or there is some other compelling reason for the Court of Appeal to hear it.

Mr Reynard's Notice and his letters of 7th August 2000 and 26th June 2001 do not raise any point of principle let alone one of importance. Further there is no compelling reason for this Court to hear his appeal."

5. Like Aldous LJ, I have read the very full written submissions to which Aldous LJ's refusal refers, together with another full and carefully reasoned letter dated 16th November 2001 which reached me on the eve of this hearing. It is sufficient to say that while these documents reargue Mr Reynard's case on the facts with cogency, they raise no issue of law or of principle capable of founding a second appeal. The fact that Mr Reynard considers that in a number of respects Blackburne J has got the facts wrong amounts to no more than a disagreement about where the truth lies, and is not in itself a question of law.
6. There is, however, one point of real concern which runs like a thread through all that Mr Reynard has written and has submitted to me today, and to which I will come. Before I do so, I should turn to the Secretary of State's grounds of appeal because the issue of concern bears directly on them.
7. The two grounds upon which the Secretary of State now has permission to appeal are these:

"1. The learned judge erred in law in concluding that dishonest conduct by the defendant in the giving of his oral evidence at trial was not a matter that could be taken into account in determining:

1.1 the question of a director's fitness under section 6 of the Company Directors Disqualification Act 1986; or

1.2 the period of disqualification imposed under the Act (judgment paragraphs 116 to 122).

...

4. The learned judge erred in the exercise of his discretion in fixing the period of disqualification to be 5½ years."

8. The problem that arises is this. There is, without doubt, a question of law set out in the Secretary of State's first ground in respect of which permission has already been given to appeal. Stated as it is there stated, however, it is a naked question of law with no necessary consequences. It arises - and I need not go into this in any detail - because of the way in which the learned judge has expressed parts of his judgment. But it matters in concrete terms only if it is to be used as the springboard for a re-fixing of the period of disqualification by, I would assume, raising it if the Secretary of State is able to make good ground four, upon which he has also been given permission to appeal. It is one thing to establish that the degree of unfitness of a director who has mismanaged a company may in principle be aggravated or mitigated by his conduct in court. It is another thing to try to apply that to the facts of this case.
9. In the course of the proceedings the Registrar was confronted with a submission, effectively put into Mr Reynard's mouth for the first time by his counsel in re-examination, to the effect that a wholly-owned subsidiary of Howglen Ltd, the company in question, namely Devon & Dorset Adventure Holidays Ltd, a company which had never traded and was probably no more than an alias for Howglen Ltd, was in fact Mr Reynard's principal trading entity. The idea, a hopeless one in the circumstances, was to deflect all the allegations of misconduct on to a company whose affairs were not before the court. It not only failed; it backfired very badly on Mr Reynard, because every endeavour to extract from him further evidence in re-examination to this effect produced answers which looked more and more evasive since, as Mr Reynard says and I find perfectly credible, there was nothing that he could recollect or usefully say to support the idea that his counsel was putting to him. I say this with perhaps more certitude than is ordinary in applications of this kind, because, as I understand it, the counsel concerned has accepted that it was an error of judgment on his part that landed his client, Mr Reynard, in this mess.
10. I do not consider, however, that it furnishes a ground of appeal for one very simple reason. Blackburne J was fully alive to what had happened. It was principally, as I read his judgment, because of his awareness of the potential injustice of fixing Mr Reynard with his counsel's error of judgment that he reduced the period of disqualification from 10 to 5½ years. I will not read them out, but I have taken particular note of paragraphs 22, 23 and 118 of Blackburne J's judgment. In other words, the poison which Mr Reynard submits entered the Registrar's view of him was drawn, and drawn fully, by the judge on appeal. The case went to a conclusion cleared of the muddle and the adverse appearances that the misjudged questions in re-examination generated.
11. I know that Mr Reynard does not feel that that is so. He continues to smart under the humiliation, as he feels it was, of what happened in open court. But legally it does seem to me that the untoward consequences of what had appeared to the Registrar to be mendacious and evasive conduct in court were fully appreciated and fully eliminated by Blackburne J.
12. This being so Mr Reynard does not, in my judgment, have on this score either a ground of appeal. What he does have, it seems to me, is a very strong case to advance in opposition to ground four of the Secretary of State's grounds of appeal. It may be of no interest to Mr Reynard to seek to contest the proposition of law that a director who not only misconducts a company but lies to the court can expect to be disqualified for longer than if he had been candid with the court. I do not imagine for a moment Mr Reynard wants to say otherwise. What he does want to say is that he was not such a director, and it seems to me that on ground four he is able and entitled to say this without my permission to appeal. He has the locus of a respondent to the Secretary of State's appeal and can advance his case to this effect. It is possible indeed that the Secretary of State will accept, in the light of Blackburne J's findings, that it is so.
13. For those reasons, which I hope Mr Reynard appreciates, I will not give him permission to appeal because there are no grounds for appeal on his part. What he wants to advance as the nub of his grievance will be able to be advanced in opposition to the Secretary of State's appeal.
ORDER: Application for permission to appeal refused. (Order not part of approved judgment) ____________________