If you don’t ask, you don’t get

…. Permission to act as a disqualified director granted second time around.

Mr Rwamba had been disqualified in 2006 for a period of four years. He applied for and was granted permission to act as a director, subject to conditions. Unfortunately he breached the conditions and was disqualified again in 2015 for a period expiring in May 2021.

Ever optimistic, Mr Rwamba applied again for permission to act as a director of two new companies. He was prepared to agree to conditions, and the Court acknowledged that he had recognised his errors and that there had been no dishonesty in his conduct. Notwithstanding this, the Court was not prepared to grant permission. R appealed.

The appeal court decided that Mr Rwamba should have permission, subject to the agreed conditions. 

The appeal court recognised that public policy and deterrence and two issues which must be considered when a court is faced with a request for permission. However, in this case the judge at first instance had wrongly placed additional weight on the issue of deterrence in view of the fact that the second disqualification arose as a consequence of a breach of previous conditions for permission.

Once the Court had decided that there was no material risk of a breach of the new conditions, then no additional weight should be placed on the issue of deterrence. The breach of the earlier order was careless not dishonest, and a fair minded member of the public would understand that permission (subject to proper judicial scrutiny) was a proper part of the disqualification regime.

The case also provides a useful summary of the matters to be considered generally on an application for permission.

Rwamba v Secretary of State for Business Energy and Industrial Strategy [2020] EWHC 2778 (ChD)

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