This judgment was handed down remotely by email and MS Teams. It will also be sent to The National Archives for publication. The date and time for hand-down is 9.30 a.m. on 24 March 2025.
.............................
ICC Judge Barber
- On 14 February 2025, I dismissed the Claimant's application for permission pursuant to Section 17 of the Company Directors Disqualification Act 1986 ('CDDA') to act as a director of Thorn Restaurant Ltd and 14 other companies ('the Companies'). I also dismissed the Claimant's application for permission pursuant to Section 216 of the Insolvency Act 1986 ('IA 1986') to act as a director of a subset of the Companies known as Thorn Restaurant Ltd, Fern Restaurant Limited, Field Elm Restaurant Limited, Olive Tree Cocktails Ltd and Trunk Restaurant Limited ('the Olive Tree Companies'). This judgment sets out my reasons for that order.
Background
- On 17 October 2024, the Claimant gave a disqualification undertaking of 10.5 years ('the Undertaking') in respect of his conduct as a director of four companies known as Olive Tree Brasserie Chester Limited (Chester'), Olive Tree Brasserie Stockton H Ltd ('Stockton'), Olive Tree Brasserie Lytham Ltd ('Lytham') and Olive Tree Brasserie Preston Ltd ('Preston'), ('the Former Companies'), which had entered liquidation in November 2020 and February, April and July 2021 respectively, each with a deficiency as regards creditors and each with debts owed to HMRC (in Chester's case an estimated £100,000 owed in VAT).
- The Undertaking was given in respect of admitted unfitness by virtue of the Claimant having
(1) caused each of the Former Companies to obtain second government backed bounce back loans ('BBLs') contrary to the BBL scheme when he ought to have known that the companies were not entitled to obtain such loans, having previously obtained BBLs from different banks; and
(2) failed to ensure that each of the Former Companies used the entirety of the BBL for the economic benefit of that company and transferred at least some of the funds to his own personal bank account.
- The Claimant's case was that he did not know that the BBL scheme did not permit a borrower to take out more than one BBL and thought it was permissible to apply for a loan from each bank with which it had an account. The Former Companies had each had pre-existing accounts with the two banks from which it obtained BBLs.
- It was only after issuing a claim for Section 17 permission to act as a director of the Companies that the Claimant also issued a Section 216 application in respect of the Olive Tree companies, which were known by prohibited names by which the Former Companies were known or names which were so similar as to suggest an association with the Former Companies. This was some considerable time after the Former Companies had entered into liquidation in 2020/21. The Claimant's explanation for the delay was that he had not been told about the prohibited names restriction before his current solicitors informed him of it.
Section 17 permission: principles
- The test for permission to act is set out in Rwamba v Secretary of State for Business, Energy and Industrial Strategy [2020] EWHC 2778 (Ch); [2021] BCC 184 per Miles J at para 34
'I draw the following general guidance from these cases and s.17 itself:
i) The court has a discretion under s.17 to allow a person who has been disqualified to be a director of a company or be concerned or take part in the promotion, formation, or management of a company.
ii) The onus is on an applicant under the section to persuade the court to grant permission. The starting point when approaching the jurisdiction is that the applicant has been held unfit to be a director for the period of the order (or has accepted the equivalent when giving an undertaking). Nonetheless leave may be given in a proper case.
iii) It is for the court (and not for the Secretary of State) to be satisfied that it is appropriate to give leave for the applicant to be a director etc.
iv) The discretion under s.17 to give leave is unfettered. It is wrong to seek to add glosses or preconditions. The question for the court is whether in all the circumstances it is appropriate to give leave; and in approaching this question the court balances all the relevant factors.
v) Though it is usual to establish that the company has a "need" for the applicant to be a director or involved in the management, this is not a precondition. For instance, the appointment may be made to allow the director to obtain a tax advantage.
vi) The court should, among other things, have regard to the nature and seriousness of the conduct that led to the disqualification order or undertaking and the length of the disqualification. Where that conduct was dishonest a court may be reluctant to give leave.
vii) The court should, when deciding whether to give leave for a director to act as a director have regard to the purposes of a disqualification order. These include (i) protecting the public directly by prohibiting the disqualified person from acting and (ii) deterring both the particular director and others from the kind of conduct that has led to the order.
viii) Leave should not be too freely given as this would tend to undermine the protective and deterrent purposes of a disqualification order. The court would not wish anyone dealing with a director to be misled as to the gravity of a disqualification order.
ix) On the other hand, the power of the court to grant leave under s.17 is inherent in the disqualification regime and in an appropriate case it may serve the public interest to allow a disqualified person to be a director of a specific company.
x) Moreover, the fact that the applicant for leave has agreed to the imposition of conditions designed to ensure high standards of corporate conduct may itself be seen as promoting the policy of deterring misconduct'.
- As for the need not to undermine the deterrent and protective purposes of the disqualification order, Mr Deacock also took me to the following passage of the judgment of Miles J in Rwamba:
'The judge appears to have considered that the public would perceive the system as unduly lax were the court to give permission in the present case. But any question of perception should be assessed by postulating a fair minded and informed member of the public, and not one who has been told the bare headlines. It may be tested this way: suppose leave were given and the fair minded observer were asked how this would affect his or her views about the seriousness and force of the disqualification regime and orders made under it. The observer would (being informed) understand some general things about the regime and some specific ones about this case. He or she would understand (generally) that leave is an inherent part of the disqualification regime, that it requires judicial scrutiny, and that it will only be granted where the court is satisfied on proper grounds; and (specifically) that the applicant had carelessly (but not dishonestly) breached the earlier permission order, had apologised, and had offered a series of conditions which imposed stringent controls on the business to minimise the risk of breach, that the Secretary of State did not oppose an order including those conditions, and that the court was satisfied that there was no material risk to the public of future breaches of the conditions or of further corporate misconduct were leave to be given. The observer would also understand that the process of agreeing and putting such conditions in place is time-consuming and costly and is not undertaken lightly. I do not think that the fair minded observer would think that the grant of leave would undercut or weaken the disqualification regime generally, or the disqualification of Mr Rwamba specifically.'
The prohibited names regime
- Section 216(3) provides that except with the leave of the court or in such circumstances as may be prescribed, a director of a company which has gone into liquidation may not within 5 years be a director of any other company which is known by a name by which the liquidated company was known or by a name which is so similar as to suggest an association with that company.
- On the mischief that s.216 is intended to address, reference made to the judgment of Chadwick J in Penrose v Official Receiver [1996] 1 W.L.R. 482 at 489 which states:
'That rule identifies, and meets, two elements of mischief: first, the danger that the business of the old insolvent company has been acquired at an undervalue or is otherwise to be expropriated to the detriment of its creditors; and, secondly, the danger that creditors of the old company may be misled into the belief that there has been no change in the corporate vehicle. The phoenix must be disclosed as such.'
The Companies
- The Section 17 application relates to 15 companies which are said to be involved in the running of 6 restaurant businesses. In each case the business is divided between:
(1) a company which holds the lease i.e.
i) OTB HOSPITALITY LTD (12935378) ('Hospitality');
ii) OTB HOSPITALITY STOCKTON HEATH LTD (13190305) ('Stockton Heath');
iii) OTB HOSPITALITY LYTHAM LTD (13190432) ('Lytham');
iv) OTB HOSPITALITY LEEDS LTD (14637677) ('Leeds');
v) GYROS STREET LTD (14066537) ('Gyros');
vi) OLIVE TREE COCKTAILS LTD (13122787) ('Cocktails'); and
(2) a company which operates the restaurant i.e.
i) THORN RESTAURANT LTD (14108234) ('Thorn')
ii) FERN RESTAURANT LTD (14108252) ('Fern'),
iii) TRUNK RESTAURANT LTD (14110457) ('Trunk')
iv) FIELD ELM RESTAURANT LTD (14595696) ('Field Elm')
v) KENTIA STREET FOOD LTD (14910878) ('Kentia')
vi) FLAVOURCOT RESTAURANT LTD (14725992) ('Flavourcot')
- These 12 companies are in turn held by the 13th company, a holding company known as DEVA VICTRIX LTD (14668600) ('Deva Victrix'). The Claimant is the beneficial owner of the shares in Deva Victrix.
- Employees are all currently employed by the 14th company, OFF THE WALL CONCEPTS LTD (14061850) ('Off the Wall'). Off the Wall was incorporated in April 2022. Its sole director and sole shareholder is the Claimant's mother, Mrs Karen Wilson. Off the Wall filed dormant company accounts for the year ending 30 April 2023. It has yet to file any statutory accounts in respect of its time trading.
- Before Off the Wall took on the function, the employees for the group were employed by a company known as Blue Generation Ltd ('Blue Generation'). Blue Generation was incorporated on 30 May 2022 and entered CVL in November 2023, before filing any statutory accounts, with an estimated deficiency as regards creditors of £502,000, including PAYE estimated at £410,208. According to the liquidator's most recent progress report dated 11 November 2024, claims totalling £532,627 have since been received in respect of PAYE contributions. The sole director and shareholder of Blue Generation was Mr Sean Hinde, an employee of each of the Former Companies for the lifetime of each.
- The 15th company, BUENA CASA LTD (12827882) ('Buena Casa'), is a property management company.
The Section 17 application overview
- The Section 17 application was made by Claim Form issued on 29 October 2024. It was initially supported by the first affidavit of the Claimant dated 28 October 2024.
- In broad summary, the Claimant contended that (i) it would not be viable for these businesses to be run other than via limited liability companies and (ii) it would not be viable for them to be run without the Claimant being a director. He proposed to address any risk to the public by means of detailed conditions to be set out in the order granting permission and on the basis that
i) John Dawson, a chartered accountant, (then) of MHA accountants, would be in charge of financial and accountancy related matters for the Companies;
ii) Mike Davies, whom the Claimant described as an experienced finance director, would become a director of each of the Companies and would ensure that there was regular analysis and review of the health of the Companies at board level. In addition, Mr Davies would oversee John Dawson's role in managing the accounts and finance.
First hearing: 6 November 2024
- The first hearing of the Section 17 application (together with the Section 216 application) was listed on an urgent basis on 6 November 2024.
- In the run-up to that hearing, the Secretary of State prepared a Schedule setting out, by reference to each of the Companies, a number of outstanding issues and documentation requests. In summary, the Defendant's initial concerns were as follows:
i. The fact that a number of Companies appeared to be balance sheet insolvent according to the filed accounts for the year ending 31.5.23. The Claimant relied upon profit and loss schedules for the Companies which appeared to a show a net profit for January to September 2024. The Defendant had requested clarification as to how such schedules were prepared;
ii. The Claimant sought to provide 'screenshots' showing the bank balances on the Companies' bank accounts, but such screenshots were unhelpful as they were undated, did not show any transactions and in some instances did not show the name of the company to which the account was said to relate;
iii. The Claimant had not provided adequate PAYE, VAT, NIC and corporation tax information in relation to the Companies. By the Schedule (and in correspondence prior to its preparation), the Defendant had specifically asked for evidence that the Companies were all up to date with their taxes. The Defendant was concerned as to whether such liabilities were up to date;
iv. It was unclear from the evidence, in relation to Off the Wall, which the Claimant had stated 'holds the employees', why the Claimant needed to be a director of this company when he was not previously a director;
v. No information as to corporation tax prior to 2023 had been given in relation to companies incorporated prior to 2023.
- The Claimant provided some further documents prior to the 6 November 2024 hearing, which whilst not exhibited to an affidavit or a witness statement were included in the hearing bundle. The additional documents provided included a selection of screenshots for some (but not all) of the Companies, confirming that those companies owed HMRC zero on given tax returns. No equivalent screenshots were provided for the remainder of the Companies at this stage.
- The Claimant also filed his second affidavit sworn on 5 November 2024 and the first affidavit of Mr Mike Davies sworn on 5 November 2024.
- Regrettably, the Claimant's first and second affidavits contained material inaccuracies.
- By way of example only:
(1) In correspondence running up to issue of the Claim and the first hearing, the Secretary of State had pressed repeatedly for full information and documentation on the issue of the Companies' HMRC liabilities (including VAT) and financial position, but such enquiries had met with a patchy and unsatisfactory response;
(2) By his first affidavit dated 28 October 2024, having implied that further evidence confirming the Companies' HMRC position was on the way, the Claimant (at paragraph 133 of his affidavit) stated unequivocally that the Companies were 'solvent' and 'up to date with all tax returns and payments';
(3) At paragraph 67 of his second affidavit dated 5 November 2024, the Claimant stated that 'the Companies subject to the Section 17 Application have never suffered serious arrears of tax and it has always been the model of these businesses to ensure such obligations are met as and when they fall due'. At paragraph 76, he stated that 'all' creditors of the Companies were 'fully paid up to date';
(4) These material untruths found their way into the skeleton argument prepared by counsel for the Claimant for the first hearing on 6 November 2024, which (at Paragraph 6.3) stated that 'The Companies are all solvent and are up to date with all tax returns payments and Companies House filings.'
(5) In fact, the Companies had a history of late payment of taxes and, as at 6 November 2024, several of the Companies had significant tax liabilities outstanding. These included (i) Thorn, which owed VAT of £13,282 for the quarter ended 31 January 2023 and £31,157.64 for the quarter ended 31 October 2023 plus interest and penalties totalling £52,352.31 (ii) Trunk, which owed VAT of £17,242.78 for the quarter ended 30 April 2024, and (iii) Field Elm, which owed VAT of £53,630.90 for the quarter ended 31 May 2024. This was not brought to the attention of the judge at the November hearing.
- By way of additional example,
(1) A further concern raised by the Secretary of State with the Claimant was the issue of his delay in seeking s216 permission to act; the Former Companies had all gone into liquidation in 2020/21 and yet he had not issued a s216 application until November 2024;
(2) By paragraph 69 of his second affidavit dated 5 November 2024, the Claimant stated 'I confirm that at no time have I been made aware of the legal restrictions imposed by Section 216 of the Insolvency Act 1986. This was raised with me recently by my solicitor and I confirm that the appointed liquidators and my other professional advisors have never advised that I could not set up the Olive Tree companies and use these names
.'
(3) In fact, the liquidators of the Former Companies had written four separate letters to the Claimant, dated respectively 17 November 2020, 23 February 2021, 14 April 2021 and 29 July 2021, warning him of the Section 216 restrictions and enclosing copies of the Section 216 provisions. This was not drawn to the attention of the judge at the November hearing.
Interim Permission: 6 November 2024
- At the hearing on 6 November 2024, Deputy ICC Judge Parfitt granted interim permission to act under both applications subject to certain conditions and adjourned the applications to a further hearing on 12 December 2024.
- Paragraph 2 of the order of 6 November 2024 provided that:
'Subject to paragraph 3 of this Order, if, at any time, any condition set out in the Schedule to this Order is not complied with, the permission granted by this Order shall cease with immediate effect and without further order of the Court, and permission shall not without further order of the Court be capable of reinstatement by the subsequent fulfilment of the condition.'
- Paragraph 3 of the order of 6 November 2024 went on to provide:
'If the Claimant issues an application for permission to continue to act as a director of the Companies (or any of them) before or within 7 days of knowledge of the breach of any of the conditions set out in the Schedule to this Order, the permission granted by this Order shall continue until the end of the first hearing of the application, which shall be listed on an urgent basis no later than 14 days after issue, subject to further order of the Court.'
- Paragraph 10(d) of the conditions set out in the schedule to the order of 6 November 2024 was that the Claimant would procure the Companies to:
'Pay all sums due to HM Revenue and Customs on or before the due date for payment (whether that be the original due date for payment, or any later date for payment agreed in advance of the original due date for payment with HM Revenue and Customs pursuant to a Time to Pay arrangement).'
- As confirmed in the recitals to the order of 6 November 2024, it was agreed between the parties that the Defendant would raise a list of outstanding queries/requests for information by 15 November 2024 and that the Claimant would respond to such queries by 22 November 2024.
- Following the hearing of 6 November 2024, the Defendant sent the Claimant's solicitors a list of outstanding queries and requests for information on 15 November 2024. The Claimant responded by email on 22 November 2024 with some but by no means all of the information requested.
- The Defendant emailed the Claimant on 3 December 2024 confirming that the information provided in relation to the Companies' VAT, Corporation Tax and PAYE records did not satisfy the Defendant that the Claimant has been dealing with the Companies' tax affairs in a diligent and timely fashion and requested copies of official tax records in relation to the Companies' HMRC liabilities.
- The Claimant subsequently provided further (incomplete) tax records in respect of the Companies. These tax records were included in the bundle prepared for the next hearing.
The Hearing of 12 December 2024
- At the next hearing of the matter, listed before me on 12 December 2024, the Defendant raised concerns regarding the veracity of paragraph 69 of the Claimant's second affidavit (referred to at [23] above). Following the November hearing, the Defendant had written to the liquidator of the Former Companies to inquire whether Section 216 warnings had ever been given to the Claimant. The liquidator had replied confirming he had written to the Claimant on four occasions following the Former Companies' respective entries into liquidation and had specifically informed the Claimant of the restrictions imposed by Section 216. In this regard reference was made to the liquidator's letters to the Claimant dated 17 November 2020, 23 February 2021, 14 April 2021 and 29 July 2021 referred to at [23] above.
- The Claimant had been given notice of this issue prior to the hearing of 12 December 2024. He did not file an affidavit or witness statement to address, correct or apologise for the inaccuracy of paragraph 69 of his second affidavit, however. Instead, he left it to Counsel to address, in his updated skeleton argument produced for the hearing. By his skeleton argument Mr Deacock did not deny that the Claimant had received such letters but stated on instruction that the Claimant had 'no recollection' of receiving them. The same position was adopted in oral submissions on this issue. The Claimant did not address this issue in his later evidence, notwithstanding filing two witness statements after this point.
- Ms Feng also confirmed at the 12 December hearing that the Defendant remained concerned about the Companies' tax and financial position.
- She told the court that, following a review of HMRC records recently produced, it appeared that, in respect of a number of the companies, VAT and PAYE had not been paid as and when due and that Time to Pay agreements had been entered. The following examples were flagged in the Defendant's skeleton argument for the hearing:
(1) in relation to Off the Wall, annual PAYE statements showed that late payment penalties had been imposed for the years 2024-2025 and 2023-2024; and
(2) in relation to Thorn, Fern and Field, VAT records showed that these companies had all incurred numerous penalties and interest on penalties.
- The Defendant maintained that this indicated that the Companies were not, in fact, able to pay their liabilities as and when due and that the Claimant was failing to deal with tax matters in a timely fashion, causing the Companies to enter into Time to Pay arrangements over protracted periods of time and incurring late payment penalties and interest.
- A number of the underlying documents were considered at the hearing.
- The Annual Statement for PAYE for Off the Wall for the tax year April 2023-April 2024 showed a late payment penalty for In Year PAYE bill of £717.86.
- Off the Wall's Annual PAYE Statement for the tax year April 2024 to April 2025 showed a late payment penalty for In Year PAYE bill of £470.07.
- Off the Wall's Annual PAYE Statement for the tax year April 2024 to April 2025 (which bore a 'print' date of 20 November 2024) also showed an amount of £40,309.14 for month 7 (6 October to 5 November 2024) as falling due on 22 November 2024. Mr Deacock told the court, on instruction, that 'before' 22 November 2024, a Time to Pay arrangement had been put in place in respect of month 7.
- During the course of the hearing, Ms Feng observed that no PAYE bills or payment history for Off the Wall had been provided before the year 2023-2024 and asked who had employed the 190 employees before then. On instruction, Mr Deacock informed the court that previously, another PAYE company called Blue Generation Limited had employed the 190 or so employees. This was the first time that Blue Generation's prior involvement had been disclosed: see generally [13] above.
- Reference was also made to the VAT records produced for Thorn, Fern and Field, which showed that these companies had all incurred numerous penalties for late tax payments and interest on penalties.
- It was whilst going through these VAT records at the hearing that it was noted that certain payments made after 6 November 2024 (the date of the first hearing) related to VAT which had fallen due considerably prior to that date, together with ongoing interest and penalty charges imposed for late payment.
- This posed two significant problems for the Claimant. The first was that his first and second affidavits had been shown to contain material falsehoods; he had stated in both his first and second affidavits (among other things) that the Companies had 'never suffered serious arrears of tax', that it was 'the model of these businesses to ensure such obligations are met as and when they fall due', and that the Companies were 'up to date' with payments to HMRC: see [22] above. The second was that he was arguably already in breach of the conditions upon which interim permission had been granted by the order of 6 November 2024.
- Mr Deacock accepted at the hearing of 12 December that 'on the face of it, it is likely that there may have been VAT outstanding as at 6 November 2024 which was only settled afterwards, therefore that this may be in breach of the terms [of the interim permission]' adding, 'I am only slightly concerned it may have been historic payment'; ie suggesting that the timing of the payments shown in the records might be due to a delay on the part of HMRC in processing them.
- As the hearing time allocated that day was at an end and Mr Deacock plainly had much to look into with his client, the applications were adjourned. By paragraph 3 of the order made that day, the Claimant's time for making an application under paragraph 3 of the order of 6 November 2024 for permission to continue to act as a director of any of the Companies was extended to 4pm on 17 January 2025. The Claimant was also (by paragraph 6 of the order) granted permission to file further evidence in support of the applications by 4pm on 17 January 2025. By paragraph 7, the Defendant was granted permission to file evidence in reply by 24 January 2025. Directions were also given for the liquidator of the Former Companies to be served with the Section 216 application and given an opportunity to file evidence. The matter was then adjourned with a direction that it be relisted before me on an expedited basis before me on 14 February 2025.
Events between the hearing of 12 December 2024 and the hearing of 14 February 2025
- In accordance with the order of 12 December, the liquidator of the Former Companies was served with the s 216 application. He later confirmed that he did not wish to file any evidence or to participate in the proceedings.
- On 17 January 2025, the Claimant issued an application notice pursuant to paragraph 3 of the order of 6 November 2024. The application notice sought the following:
'That permission to continue acting as a director of the Companies subject to the Claim form filed in these proceedings seeking leave pursuant to section 17 of the Company Directors Disqualification Act 1986
be granted pursuant to paragraph 3 of the Order of Deputy Insolvency and Companies Court Judge Parfitt dated 6 November 2024, as amended under the terms of the Order of ICC Judge Barber dated 12 December 2024.'
- In box 10 of the application notice, which requires an applicant to identify the evidence relied upon in support of the application, was written simply:
'Such evidence as currently filed in the proceedings.
Such further evidence as to be filed pursuant to paragraphs 6 and 7 of the Order of ICC Judge Barber dated 12 December 2024.'
- The parties initially agreed a 7 day extension of the Claimant's evidence deadline (to 24 January 2025) and later agreed a further 14 day extension (to 7 February 2025).
- On 30 January 2025, Ms Marianne Phillips filed a witness statement on behalf of the Defendant, setting out additional matters which had come to light which the Defendant considered should be brought to the court's attention pursuant to Section 17(5) CDDA 1986. These included the fact that Off the Wall had filed statutory dormant accounts for the year ended 30 April 2023 on 19 February 2024. Ms Phillips also confirmed that the Defendant had not seen the PAYE records for Off the Wall and did not know what this company's tax position was. She said that it was not known whether PAYE was being paid over to HMRC once deductions were made from staff wages.
- Ms Phillips also provided further evidence about Off the Wall's predecessor, Blue Generation Limited, in her witness statement (see [13] above). As will be recalled, the existence/involvement of Blue Generation had first been disclosed by Mr Deacock on instruction during the hearing of 12 December 2024, in response to a query raised by the Defendant regarding the limited tax records provided in relation to Off the Wall. Following the hearing of 12 December 2024, the Defendant had made further inquiries about Blue Generation. Having ascertained that its sole director and shareholder was Mr Sean Hinde, Ms Phillips had made enquiries of the Claimant's solicitors to establish whether Mr Hinde had ever been employed by any of the Claimant's companies. When the Claimant's solicitors failed to respond to this enquiry, she had then written to the liquidator of the Former Companies, who on 16 January 2025 confirmed that Mr Hinde had been employed by all four of the Former Companies for their entire lifetime(s), starting in 2018.
- Ms Phillips' witness statement also addressed what had become of Blue Generation, confirming that it had entered liquidation on 8 November 2023 and that claims totalling £532,627 had been received in relation to unpaid PAYE contributions (see [13] above).
- At paragraph 13 of her witness statement, Ms Phillips stated that:
'The Secretary of State is concerned that, as Mr Hinde was employed by Mr Wilson's Olive Tree companies [ie the Former Companies], he was in a subordinate position and that in reality Mr Wilson may have overseen the payroll ostensibly dealt with by Blue Generation'.
- Ms Phillips also addressed the role of another company, Mediterranean Nutmeg Ltd ('Mediterranean') in her statement. Mediterranean had taken over some or all of the restaurant businesses which had been run by the Former Companies. The sole director and shareholder of Mediterranean was at all material times Yasmin Lester, the Claimant's partner. Mediterranean had gone into liquidation on 28 July 2022 with an estimated deficiency as regards creditors of £512,318, of which £425,506 was owed to HMRC, comprising £152,261 VAT and £273,245 PAYE. As with Blue Generation, Mediterranean had been incorporated little more than one year prior to its liquidation.
- At paragraph 16 of her statement, Ms Phillips went on to observe:
'I note that Blue Generation Ltd and Mediterranean Nutmeg Ltd are further instances of companies and directors with links to the Claimant which appear to have had difficulties with HMRC in that [they] did not pay the taxes as and when due, and
went into liquidation with the bulk of liabilities owed to HMRC.'
- On 7 February 2025, the Claimant filed further evidence in support of his Section 17 and Section 216 applications by way of a witness statement. It is unclear why he chose to file a witness statement rather than an affidavit, but no point was taken on that.
- The Claimant's witness statement of 7 February 2025 noted the concerns raised at the hearing of 12 December 2025 that he appeared to be in breach of a condition of interim leave at paragraph 10(d) of the schedule to the order dated 6 November 2024 (reproduced at [27] above) and confirmed that he had issued an application pursuant to paragraph 3 of that order on 17 January 2025 ('the Further Leave application'). At paragraphs 13 and 26 of his statement, the Claimant then asserted (somewhat defiantly, given the comments of his own barrister at the conclusion of the last hearing) that the Further Leave application was not necessary, as the arrears had pre-dated the order of 6 November 2024 and were not a breach of it. (I pause here to note that there was an issue between the parties as to the impact of ongoing interest charged on pre-existing arrears, but given the other breaches of the interim permission addressed later in this judgment, ultimately little turns on that). The Claimant's witness statement of 7 February 2025 then referred to various payments made in respect of pre-existing arrears after the date of the hearing of 6 November 2024. The Claimant did not address at all in his witness statement of 7 February (still less apologise for) the material untruths in his first and second affidavits, summarised at [22] above.
- The Claimant dedicated 6 paragraphs of his witness statement of 7 February (paragraphs 40-46) to Off the Wall's PAYE position. Nowhere in his statement, however, did the Claimant state unequivocally that the PAYE for month 7 was actually paid by the due date of 22 November 2024 or that a Time to Pay agreement was entered into with HMRC ahead of 22 November 2024, as required by condition 10(d). Indeed, paragraphs 40-46 of his witness statement appeared to have been carefully crafted to avoid having to address this issue head on. Paragraph 53 was drafted in similarly equivocal terms, when read in context. As Mr Deacock had already told the court, on instruction, at the hearing of 12 December 2024 that a Time to Pay agreement in respect of month 7 PAYE had been entered into by Off the Wall with HMRC ahead of the due date of 22 November 2024, the failure of the Claimant to confirm this in his subsequent evidence was of significant concern. It was strongly suggestive of an attempt to conceal a breach of condition 10(d) of the order of 6 November 2024.
- In relation to Blue Generation Ltd and the role of Mr Hinde, the Claimant did not by his witness statement of 7 February 2024 explain why no mention had been made of Blue Generation prior to the hearing of 12 December 2024, how Blue Generation's treatment of HMRC had been remotely consistent with the 'model' contended for at [67] of his second affidavit (see [22] above), how Off the Wall, another 'off the peg' recently incorporated company, came to take over the employees of Blue Generation, or how (or why) his mother had become sole director and shareholder of Off the Wall. The circumstances of the transfer of staff from one payroll company to another remained utterly opaque. Moreover, whilst the Claimant was at pains to assert (at paragraph 23 of his witness statement of 7 February) that Mr Hinde 'has not acted for nor been employed by any of the Companies', he did not specifically address the concerns raised in Ms Phillips' witness statement that he (rather than Mr Hinde) had been running the payroll for Blue Generation.
- In relation to Mediterranean, the company formerly run by his girlfriend which took on some or all of the restaurant businesses of the Former Companies, the Claimant stated simply at paragraph 57 of his statement of 7 February that 'the restaurant business is a small world' and that he 'did not have any involvement in this company'.
- On 13 February 2025, the day before the final hearing, the Claimant filed two additional witness statements. The first was a further witness statement dated 13 February 2025 of his own, stated expressly to be in support of his Section 17 application dated 29 October 2024 and his Section 216 application dated 1 November 2024 (rather than his application dated 17 January 2025). The second was the witness statement of Mr John Dawson dated 13 February 2025. These were served on the Defendant on the evening of 13 February.
- By paragraph 9 of his statement dated 13 February 2025, the Claimant admitted that there were VAT arrears outstanding as at the date of the order of 6 November 2024 which extended back to quarters ending in 2023.
- From the evidence before me, the VAT arrears outstanding as at 6 November 2024 included the following:
(1) Thorn: £52,352.31
This comprised £13,282.44 for the quarter ended 31 January 2023 and £31,157.64 for the quarter ended 31 October 2023, plus interest and penalties, in the gross amount of £52,352.31 as of 6 November 2024. This sum was not paid until 8 November 2024.
(2) Trunk: £23,713.66
This sum was owed for the quarter ended 30 April 2024. It was not paid until 15 and 19 November 2024. Interest of £6,470.88 charged thereafter on the formerly outstanding sums was paid from an unallocated payment made on 19 November 2024, which HMRC allocated on 21 November 2024.
(3) Field Elms: £58,168.03
This sum was owed for the quarter ended 31 May 2024. It was not paid until 8 November 2024. Late payment penalties and interest accruing for this quarter were paid between 11 and 20 November 2024.
- No satisfactory explanation was given by the Claimant in his witness statement of 13 February 2025 for his earlier false statements under oath, in both his first and second affidavits, that 'it has always been the model of these businesses [the Companies] to ensure such obligations are met as and when they fall due' (second affidavit, para 67) and that the Companies were up to date with payments to HMRC (paragraphs 133 and 76 of his first and second affidavits respectively). By paragraphs 5-7 of his witness statement dated 13 February 2025, the Claimant stated:
'5. I apologise for any misunderstanding as regards the Companies' current indebtedness to HMRC, and any concerns the Court or the Secretary of State has as regards the Companies failure to meet its past liabilities for VAT and PAYE.
6. Those arrears arose because of a former employee's involvement in the financial matters of the Companies, which led to these tax arrears arising. This employee has been removed and during this year steps were taken to bring these arrears up to date by way of time to pay agreements entered into for some of the companies subject to this application.
7. I refer to the statement of John Dawson in respect of these issues (John was brought in to assist with these problems).'
- The question of why the arrears arose, however, is quite distinct from the question of how the Claimant came to make the false statements in two affidavits summarised at [22] above.
- The Claimant had said in his first affidavit that he received monthly management accounts prepared by the Company's accountants, MHA (paragraph 111). In addition, MHA were instructed to prepare and submit statutory accounts to Companies House and all necessary returns to HMRC.
- Mr Dawson's witness statement confirmed (at paragraph 12) that 'VAT returns had been submitted on time but payments were late'. If VAT returns had been submitted on time, the Companies (and the Claimant as their director) must have known the sums owing long before the Claimant came to make his affidavits.
- Mr Dawson also confirmed (at paragraph 13 of his statement) that he was brought in to assist the 'former employee' (referred to at paragraph 6 of the Claimant's witness statement of 13 February) and the former employee's team in key accounting processes in August 2024. His evidence was that the former employee in question was relieved of his position in September 2024 and that, from September 2024 onwards, Mr Dawson had worked with the Companies' accountants MHA (Mr Dawson's former employer) to rectify the accounts.
- Considered in that context, the Claimant's purported explanations (at paragraph 5 and 12 of his witness statement dated 13 February) that the material untruths at paragraph 133 of his first affidavit and at paragraphs 67 and 76 of his second affidavit were a result of a 'misunderstanding' on his part and/or a result of a vague belief (not supported by any contemporaneous documentation or corroborated by Mr Dawson's statement) that 'arrangements' were in place to pay all outstanding sums ahead of the November hearing (notably not ahead of the swearing of his first affidavit) are in my judgment entirely unsatisfactory.
- It is a straightforward process, with or without the assistance of a chartered accountant, to obtain 'what you owe' print-outs from HMRC on given VAT returns and filings, as the carefully selected print-outs in evidence demonstrate: see by way of example paragraph [19] above. That these print-outs were obtained and disclosed ahead of the November hearing only for those Companies owing zero in respect of given VAT returns in my judgment speaks for itself. In my judgment, on the evidence before me, the Claimant must have known that the statements made in paragraph [133] of his first affidavit and paragraphs [67] and [76] of his second affidavit, as quoted at [22] above, were false when he made those affidavits.
Kentia and Flavorcot
- Also of concern to this court is the manner in which the Claimant approached VAT liabilities falling due for Kentia and Flavorcot on 7 November 2024, the day after the first hearing of the applications at which interim permission had been granted.
Kentia
- The HMRC printouts for Kentia included in the bundle at page 121 showed VAT, interest and penalties owing in respect of Kentia in the sum of £8,056.16. The bulk of this sum comprises VAT for the quarter ending 30 September 2024 (due 7 November 2024) in the sum of £8,033.52. That sum was not paid when due on 7 November 2024. The HMRC print-out in evidence is undated but shows interest accruing on the sum of £8,033.52, at the time of the print-out, in the sum of £21.42. The remaining £1.22 of the total sum of £8,056.16 said to be due relates to a second late payment penalty for the quarter ended 30 June 2024.
- By his witness statement of 13 February, the Claimant contended that the sum of £8,056.16 should not all be treated as due, as a Notification Error document in respect of three VAT periods December 2023 June 2024 had been filed on Kentia's behalf on 7 November 2024 (but not yet, at the date of the Claimant's witness statement, accepted by HMRC) seeking a refund of £7588.91. The Claimant maintained that the mere filing of this (as yet, unaccepted) notification error document meant that Kentia should be treated as owing merely £467.25 (£8056.16 less the outstanding refund claim for £7,588.91). In my judgment this is plainly not the correct approach to adopt to the conditions of interim permission set out in the order dated 6 November 2024. In my judgment, the failure to pay the VAT of £8,033.52 for the quarter ending 30 September 2024 on or by 7 November 2024 (or to agree a Time to Pay agreement with HMRC in respect of that sum ahead of 7 November 2024) was a breach of condition 10(d) of the terms of the interim permission granted by order of 6 November 2024.
- Mr Deacock's attempt to suggest that, if the Notification Error document was later accepted in respect of Kentia, it would 'relate backwards' and extinguish sums previously thought to be due, does not assist. In my judgment that is plainly the wrong approach to take to the conditions upon which interim permission to act was granted. The correct approach is to pay all sums to HMRC 'on or before the due date for payment' (or to agree a Time to Pay arrangement with HMRC prior to the due date for payment), not to pick and choose which sums to pay based on predictions of which Notification Error claims may or may not be, at some time in the future, accepted by HMRC. Claimants seeking permission to act as a director of a company notwithstanding a disqualification order or undertaking do not have the luxury of proceeding in this way, simply paying 'netted off' sums and hoping for the best. They must pay the full sum demanded by the due date or, prior to that date, agree a Time to Pay agreement with HMRC.
- From the evidence (as clarified to an extent by Mr Deacock on instruction) it appears that Kentia later entered a Time to Pay agreement with HMRC in respect of this and other sums owed by way of VAT. There was no evidence before the court confirming the exact date on which the Time to Pay agreement was entered but from correspondence in evidence it would appear to have been entered in late January/early February 2025. A letter from HMRC to Kentia dated 7 February 2025 at page 652 of the bundle, for example, refers to a payment plan having 'recently' been agreed and makes reference to a first payment date set for 13 February 2025. This was more than two months after the due date for payment of the VAT due for the quarter ending 30 September 2024. The entry into a Time to Pay agreement after the due date for payment of the quarter ending 30 September 2024 does not, of itself, negate the breach in the interim: see the order dated 6 November 2024 at paragraph 2.
Flavorcot
- The undated HMRC printout for Flavorcot included at page 133 of the bundle showed VAT, interest and penalties owing in respect of Flavorcot in the sum of £25,957.59. The bulk of this sum comprised VAT for the quarter ending 30 September 2024 (due 7 November 2024) in the sum of £25,886.67. That sum was not paid when due on 7 November 2024. Whilst undated, the HMRC print-out in evidence shows interest accruing on the sum of £25,886.67 (ie for the quarter ended 30 September 2024), at the time of the print-out in the sum of £69.05. The remaining £1.87 of the total sum of £25,957.59 said to be due relates to a second late payment penalty for the quarter ended 30 June 2024.
- By his witness statement dated 13 February, the Claimant contended that the sum of £25,957.59 should not be treated as due, as a Notification Error document had been filed on 7 November 2024 (but not yet, at the date of the Claimant's witness statement, accepted by HMRC) seeking a refund of £51,658.66 in respect of four VAT periods September 2023- June 2024. This (as yet unaccepted) refund claim, the Claimant maintained, meant that Favourcot should be treated as owing nil in respect of the quarter ended 30 September 2024. Again, for reasons already addressed, I do not consider this to be the correct approach to adopt to compliance with the conditions of interim permission set out in the order dated 6 November 2024.
- In my judgment, the failure to pay the VAT of £25,886.67 on or by 7 November 2024 (or to agree a Time to Pay agreement with HMRC in respect of that sum ahead of 7 November 2024) was a further breach of condition 10(d) of the terms of the interim permission granted by order of 6 November 2024.
- My observations and conclusions regarding Mr Deacock's 'relation back' argument summarised at [75] above apply equally to Flavorcot.
- Again, from the evidence (as clarified to an extent by Mr Deacock on instruction) it appears that Flavorcot later entered a Time to Pay agreement with HMRC in respect of this and other later sums owed by way of VAT. There was no evidence before the court confirming the exact date on which the Time to Pay agreement was entered but from correspondence in evidence it would appear to have been entered in late January/early February 2025; a letter dated 10 February 2025 from HMRC to Flavorcot (at page 649 of the bundle) referred to a payment plan having 'recently' been set up and the first payment of the 6 month payment plan was set for 14 February 2025. This was more than two months after the due date for payment of the sum due for VAT for the quarter ended 30 September 2024. The entry into a Time to Pay agreement after the due date for payment does not, of itself, negate the breach in the interim: see order dated 6 November 2024, para 2.
- Also of concern is the Claimant's evidence (at paragraphs 18-20 of his witness statement of 13 February 2025) as to the manner in which the VAT from Thorn (£41,198.45 for q/e 31 October 2024, payable 7 December 2024), Fern (£28,980.85 for q/e 31 October 2024, payable 7 December 2024), Trunk (£21,827.83 for q/e 31 October 2024, payable 7 December 2024), Kentia (£12,421.61 for q/e 30 December 2024, payable 7 February 2025) and Flavourcot (£20,655.66 for q/e 30 December 2024, payable by 7 February 2025) have since been dealt with. Of the Companies registered for VAT, five out of the six (i.e. all but Field Elm) have entered Time to Pay arrangements with HMRC in respect of these quarters, for periods ranging from 6 to 12 months. When an explanation for this was sought at the hearing on 14 February 2025, Mr Deacock explained on instruction that the Companies had had some exceptional outlays recently, getting past arrears up to date. This rather begged the question of what had become of earlier sums paid to the Companies by way of VAT which had not been paid to HMRC at the appropriate time. It also suggested that the Companies were using current VAT receipts to pay off earlier tax arrears; as I put it at the hearing, robbing Peter to pay Peter.
- A further troubling aspect of the Claimant's evidence regarding the Time to Pay agreements addressed at paragraphs 18-20 of his witness statement dated 13 February 2025 is that no documentary evidence has been provided to confirm that the Time to Pay arrangements were in each case entered into ahead of the due date for payment (a requirement of Condition 10(d)) of the order of 6 November 2025). In the absence of such evidence, given the selective and opaque nature of the Claimant's evidence overall, I consider it legitimate to conclude that at least some of these Time to Pay arrangements were entered into after the due date for payment. These would constitute further breaches of the conditions on which interim permission to act as a director was granted.
- I turn next to the PAYE payable by Off the Wall for year 7. I have already referred to the opaque nature of the evidence provided in the Claimant's witness statement of 7 February 2025 on this issue: see [59] above. The Claimant's witness statement of 13th February 2025 is also cautiously worded on this issue; paragraphs 23 to 24 of the statement taking care to limit themselves to the position as at the date of the printout of the year to date (ie as at 20 November 2024), stating at paragraph 24 (in context as at 20 November 2024, with emphasis added) 'there were therefore no overdue payments' (year 7 PAYE falling due for payment on 22 November 2024). Paragraphs 25-26 of the statement then introduce an undated copy of a month 7 PAYE statement for Off the Wall referring to payment plans entered into for month 7 and month 8. Neither the statement itself nor any other documents in evidence confirm that the Time to Pay agreement relating to month 7 was entered into ahead of the due date of 22 November 2024, as required by condition 10(d) of the conditions of interim permission set out in the order of 6 November 2024. In fact the documentation in evidence on this issue supports the conclusion that the Time to Pay agreement relating to month 7 was entered into after the due date of 22 November 2024; the month 7 PAYE statement itself contains a notice stating 'you have overdue payments that you are being charged interest on and you could get a penalty' and includes an entry of £373.16 as interest, whilst the Time to Pay Agreement for month 7 charges interest at £147.40. I would add whilst Mr Dawson also addresses the PAYE position of Off the Wall in his statement, his evidence does not confirm the date of entry into the Time to Pay agreement for month 7 either. On the evidence as a whole, I consider it legitimate to conclude that the Time to Pay agreement entered into by Off the Wall in respect of month 7 PAYE was entered into after the due date for payment of 22 November 2024. This was a further breach of condition 10(d) of the order of 6 November 2024.
Discussion and conclusions
- Drawing on the guidance given in Rwamba, I remind myself that the onus is on the Claimant to persuade the court to grant Section 17 permission. On the evidence before me, the Claimant has failed to discharge that onus.
- Dealing first with the nature and seriousness of the conduct which led to the disqualification undertaking, I accept that there was no finding or admission of dishonesty in that context. I also accept that the grounds of unfitness which led to the undertaking did not involve trading to the detriment of HMRC but rather breaches of the BBL scheme, and that the conduct relied upon in the disqualification proceedings is unlikely to be repeated.
- Nonetheless, it is in my judgment relevant that this was a serious top bracket case; the disqualification undertaking was for a period of ten and a half years. In addition, as made clear by Miles J in Rwamba, on a Section 17 application, the court is not limited to consideration of the facts and matters giving rise to the disqualification; the question for the court is whether 'in all the circumstances' it is appropriate to give leave.
- In this case, the relevant 'circumstances', in my judgment, when combined with others addressed below, include the structure of the Companies as a group and the fact that the structure in question potentially leaves HMRC extremely exposed. The trading companies are VAT registered but do not have any assets of significant value; the leases of the restaurant premises are held separately, in the lease companies. The staff are all employed by Off the Wall, a recently incorporated company with no assets, which has yet to file any trading accounts and whose predecessor, Blue Generation, went into liquidation in 2023, after little more than a year of trading, with no assets and owing PAYE of over £500,000. Whilst I accept that I was taken to no evidence of allegations of wrongdoing on the part of Blue Generation's director, Mr Hinde, (and so for present purposes I do not proceed on the assumption that there was any wrongdoing on his part) the fate of Blue Generation does serve to demonstrate the potential exposure of HMRC to non-recoveries of PAYE in a group structure such as this. Similarly, the fact that the VAT-registered trading companies have no assets to speak of exposes HMRC to the risk of non-recoveries of VAT.
- It is against that backdrop that I turn to consider the next 'circumstance' of relevance in this case; the Companies' history of non-payment and late payment of taxes: a history which, on the evidence as a whole, I am satisfied that the Claimant deliberately sought to conceal in his first and second affidavits: see [22] above.
- Also of note in my judgment is that, whilst there have been some recent efforts to address the Companies' historic arrears, these efforts have been at the expense of timeous payment of current tax liabilities, most of which are now the subject of Time to Pay agreements.
- I leave out of account the ultimate fate of Mediterranean. I was taken to no evidence to suggest that the Claimant was responsible for the manner in which that company was run or the substantial tax debts that it left behind and the Claimant's own evidence was that he had no involvement with the company. For present purposes therefore, I shall put the fate of Mediterranean to one side.
- I also leave out of account the Defendant's concerns that the Claimant may have been running the payroll for Blue Generation. I was taken to no evidence establishing that the Claimant was doing so and absent such evidence it would not be appropriate in my judgment to take such matters into account when considering whether to grant Section 17 permission.
- I do take into account the fact that the group's operations involve the employment of approximately 180 staff, albeit all employed by Off the Wall.
- Whilst I accept that 'need' is not an essential factor, the Claimant has failed by his evidence to make out a persuasive case on need in relation to Off the Wall. He has never been a director of Off the Wall and was not a director of Blue Generation before it. His evidence fails to put forward any persuasive explanation as to why he now needs to be a director of Off the Wall, having not been a director prior to his disqualification. I also note that the sole director and shareholder of Off the Wall has not filed any evidence suggesting that the Claimant is needed as a director of that company. I would add that the Claimant's case on need in relation to the lease companies is extremely weak. These companies have fairly passive functions and it is difficult to see why no one else could manage them. The main factor put forward on need in that regard is that it is cheaper for the Claimant to act as a director than to appoint another director on a salary. I was taken to no corroborative evidence, however, to support Mr Deacock's submission that there are no viable alternatives to the Claimant continuing as a director of the lease companies. The Claimant could keep costs down by transferring some of his shares in Deva to a new director and remunerating the new director through dividends, for example. His case on need in relation to the trading companies is, I accept, stronger, but in this regard I remind myself that need is but one of a number of factors for the court to consider.
- The purposes of a disqualification order (or undertaking) must also be taken into account. These include protection of the public and deterrence.
- When considering protection of the public, it is in my judgment legitimate to take into account the Claimant's conduct in these proceedings.
- The Claimant's first and second affidavits contained material self-serving inaccuracies. Examples of these may be found at [22] above. The Claimant's later attempts by his witness statement of 13 February 2025 to excuse such untruths in his affidavits simply made matters worse: see generally [65]-[71] above. On the evidence before me, the Claimant must have known that the statements made in paragraph [133] of his first affidavit and paragraphs [67] and [76] of his second affidavit, as quoted at [22] above, were false when he made those affidavits. These false statements in my judgment demonstrate a lack of probity on the part of the Claimant.
- I would add that, even if I am wrong in concluding that the Claimant knew the statements made in paragraph [133] of his first affidavit and paragraphs [67] and [76] of his second affidavit, as quoted at [22] above, were false when he made those affidavits, he plainly ought to have known of their falsity and in making the same displayed, at best, both incompetence to a marked degree and a reckless disregard for the truth.
- The Claimant also made highly selective, self-serving reference to underlying documentation in these proceedings. One example of this was the Claimant's selection of HMRC screenshots, provided ahead of the November hearing for some but not all of the Companies, showing that the companies in question owed HMRC zero on given tax returns: see [19] above. From the evidence as a whole, it is in my judgment legitimate to conclude that these screenshots were deliberately selected to give the impression (also given in the first and second affidavits) that the Companies were up to date with all payments to HMRC. It was only after the first hearing, when interim permission was granted, that further tax documentation was provided at the insistence of the Defendant which painted a different picture, but even then, the documentation provided was incomplete.
- The Claimant's written evidence lacked the transparency required of evidence filed in support of a Section 17 application. The failure to address in his witness statements of 7 and 13 February 2025 and to corroborate by underlying documentation the timing of Off the Wall's entry into a Time to Pay agreement in respect of month 7 PAYE, despite having instructed counsel to state in court that it was entered into prior to 22 November 2024, is a particularly concerning example: see [59] and [84] above. The Claimant also demonstrated a similar lack of transparency with regard to the timing of other Time to Pay agreements in relation to VAT: see by way of example [83] above.
- I also take into account the fact that the Claimant by his solicitors failed fully to cooperate with the Defendant's reasonable and proportionate requests for information and documentation throughout the course of these proceedings.
- A further factor to be taken into account, in my judgment, are the Claimant's breaches of the conditions upon which interim permission was granted by order of 6 November 2024 and his attempts to conceal or excuse the same. In this regard, even if one were assume (for the purposes of the Section 17 application only) in favour of the Claimant on the 'arguable' breaches addressed in paragraphs [43]-[45], there were numerous other unequivocal breaches (and attempts to conceal or excuse them) after that point: see paragraphs [59], [73]-[76], [77]-[81] and [84] of this judgment.
- The Claimant's breaches of the conditions of interim permission and his attempts to conceal or excuse them in turn impact on the weight to be attached to the fact that John Dawson (who has now left MHA) has been appointed to oversee financial and accountancy matters for the Companies and that Mike Davies has been appointed as finance director. Their appointment and the systems which according to Mr Dawson have now been put in place to ensure full compliance have not prevented breaches of the terms on which interim permission was granted. Mr Dawson's witness statement of 13 February 2025 does not even acknowledge that there have been any breaches, still less attempt to explain or apologise for the same. Mr Davies has not filed any evidence since being appointed a director, whether addressing the breaches or otherwise, notwithstanding having assured the court in his six-paragraph witness statement dated 5 November 2024 that he would be overseeing matters on a monthly basis.
- Even now, the full extent of the Companies' tax liabilities remains unclear. It was open to the Claimant to exhibit to his witness statements of 6 or 13 February 2025 a full set of HMRC print-outs for each of the Companies showing what tax was owed and next due and notable that he did not do so.
- On the evidence before me, I am satisfied that there would be a material risk to the public of further breaches of the conditions and of further corporate misconduct were permission to be granted.
- For the sake of completeness, I confirm that in reaching this conclusion I have also considered Mr Deacock's alternative positions, which include time-limited permission for a given period, to allow ongoing monitoring, and permission limited to some but not all of the Companies. In light of my conclusions on the matters addressed at [85] to [105] above, in my judgment it would not be appropriate to grant the Claimant leave in respect of any of the Companies, whether time limited or otherwise.
Conclusions
- For the reasons given, in the exercise of my discretion I have dismissed the Section 17 application.
- In light of my conclusions on the Section 17 application, I have also dismissed the Section 216 application.
- I made no order on the Further Leave application.
- I shall hear submissions on costs on the handing down of this judgment.
ICC Judge Barber
