Disqualifying a director

Secretary of State for Trade and Industry v Goldberg and another ChD TLR 2 December

It was an uncomfortable notion that an honest director could be held to be unfit on account of conduct that, many years later, a judge might consider was a breach of some indefinable standard of commercial morality. Therefore, the Court had to be very careful before holding that a director was unfit because of conduct that did not amount to a breach of duty, contractual, tortious, statutory or equitable to anyone, and which was not dishonest. Nevertheless, unfitness by reason of incompetence could be established outside this framework, and time and time again, judges had emphasised that the court was required to take a broad-brush approach. Moreover, competence and discipline overlapped to a considerable extent. The second defendant’s three-fold framework, although attractively and persuasively advanced, did not represent the law. On the facts of the present case, unfitness had been made out against the second defendant.