Lying director disqualified for 10 years

Published on
2 min read

In an MTIC fraud case where the de jure director gave a nine year pre-issue disqualification undertaking, the High Court disqualified the de facto director (Duckett) for 10 years.

Determining whether a person is a de facto director is fact specific. Duckett accepted that the de jure director was a front-man. It was found that a third person (a Mr Deere), who was supposedly the controlling mind of the company, was fictitious. Cumulatively the individual pieces of evidence supported the fact that Duckett was acting in the capacity of director.

The OR’s complaint was that the Company had failed to keep adequate accounting records. Duckett tried suggesting that he was not holding himself out as giving expert accountancy evidence and that, as not all the documents referred to were exhibited, neither he nor the Court could be satisfied of their inadequacy. The Court confirmed that expert evidence is not required; it is a matter of analysis. Further, had Duckett wanted to examine additional documents, he could have asked for them. On the evidence before the Court, Duckett had failed to maintain adequate accounting records and was unfit to be a director.

Referring to Re Sevenoaks Stationers (Retail) Limited, the OR recommended a middle bracket tariff. Duckett tried to advance mitigating factors (including his age, previous good character and small financial benefit) to reduce the period of disqualification to the lower end of the bracket. Whilst “frank admission of failures” might have been a mitigating factor, the Court found that Duckett had lied on oath and considered this to be so egregious as to justify a disqualification of 10 years. It was not sufficient to move the case into the top bracket when considering the specific matters pleaded and proved.

The Official Receiver v Howard Duckett [2020] EWHC 3016 (Ch)

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