Re Sevenoaks Stationers Ltd [1991] Ch 164 is a UK company law case concerning the test of being unfit to run a company under the Company Directors Disqualification Act 1986

Company Directors Disqualification Act 1986

Company Directors Disqualification Act 1986 is a piece of UK company law, which sets out the procedures for company directors to be disqualified in certain cases of misconduct.-History:...

 section 6.

Facts

Mr Cruddas was a chartered accountant and director of five insolvent companies, debt amounting to £600,000. He did not keep proper accounting records, failed to ensure annual returns were filed, and that annual accounts were prepared and audited, caused more debt when he knew of severe financial difficulty, traded while insolvent, did not pay the Crown debts for PAYE

PAYE

Pay as you earn or PAYE refers to a system of withholding of income tax from payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns. PAYE may also refer to withholding of the...

, NIC

NIC

- Banking and insurance companies:* National Insurance Company Limited, India.* National Insurance Company, Pakistan.* National Insurance Corporation, Kenya.* National Insurance Corporation, Tanzania.* National Insurance Corporation, Uganda....

 and VAT

Vat

Vat or VAT may refer to:* A type of container such as a barrel, storage tank, or tub, often constructed of welded sheet stainless steel, and used for holding, storing, and processing liquids such as milk, wine, and beer...

. Mr Cruddas, had, though remortgaged his house to raise money to pay creditors, losing over £200K. But he only paid creditors who pressed for it.

Judgment

Dillon LJ held that he was unfit to be concerned with management under the CDDA 1986 section 6. He noted that this was the first case of disqualification up to the Court of Appeal. In deciding how much of 15 years to disqualify, only serious cases, which may include someone who was already disqualified should be for ten years and above; for six to ten years are those who do not merit the top bracket and for two to five years, not very serious cases. Here a five year disqualification was appropriate.