[2002] EWAC 2688 (Ch)
Case No: 3050 of 2001
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London WC2A 2LL
Date: 10 December 2002

Before:

THE HONOURABLE MR JUSTICE PARK
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In the matter of Promwalk Services Limited
And in the matter of the Company Directors Disqualification Act 1986

Between:

Charles Grey Justin Frewen
Appellant
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The Secretary of State for Trade and Industry
Respondent

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The appellant appeared in person
Andrew Westwood (instructed by Wragge & Co) for the respondent

Hearingdates: 11 & 12 November 2002

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Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this
judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Park

Mr Justice Park:

Overview

1.	In this judgment I refer to the Company Directors Disqualification Act 1986 as the 1986 Act. The case before me is an appeal by Mr Charles Frewen against an order of Registrar Baister dated 4 July 2002 which, pursuant to the Act, disqualified Mr Frewen from acting as a director of a company or from undertaking certain other comparable activities for a period of two years. Two years is the minimum period of disqualification which a court can impose under the Act once it has decided that some disqualification falls to be imposed: see section 6. The disqualification order was imposed in connection with a company called Promwalk Services Limited, which went into creditors’ voluntary liquidation on 2 September 1999. Promwalk was estimated to be insolvent to the extent of about £75,000.

2.	There are several grounds of Mr Frewen’s appeal, but they fall into two main strands. First, he argues that the decision should be set aside because the registrar refused to grant to him an adjournment of the trial. Secondly, he argues that in any event, on the facts before the registrar, he ought not to have been disqualified at all. In my judgment both arguments fail, and I shall uphold the registrar’s decision. His decision to refuse an adjournment was one which was plainly within his discretion, and in the circumstances which I will describe later in this judgment it cannot effectively be challenged. The decision that on the facts Mr Frewen should be disqualified was one which, in my judgment was open to the registrar on the evidence. I do not say that I would certainly have come to the same conclusion myself, but the present appeal is a review, not a rehearing (CPR rule 52.11). The registrar considered that Mr Frewen’s conduct as a director of Promwalk made him unfit to be concerned in the management of a company (see the 1986 Act section 6(l)(b)), and the question for me is not whether I would have taken the same view myself, but whether it was reasonably open to the registrar to take the view which he did. In my judgment it was.

3.	There are some respects in which Mr Frewen feels aggrieved about how he has been treated in connection with the disqualification application. The grievances are, I think, directed more at the Secretary of State than at the registrar. I have some sympathy with some of Mr Frewen’s complaints, but they do not seem to me to go to matters which were critical to the registrar’s decision to disqualify him.

4.	I should mention that Mr Frewen appeared in person both before the registrar and before me. He is a very able man, and, though there was inevitably some disadvantage to him from his lack of legal background, he was able to present his case efficiently and clearly.

The facts

5.	Promwalk was incorporated on 27 April 1998, and only had a short trading life. It commenced to trade in May 1998, and closed its trade down by the end of July 1999. As I have already said, it went into liquidation on 2 September 1999. It had 1,000 issued shares. 999 were held by Ms Isabell Kristensen, and one was held by Ms Kristensen’s mother. So Mr Frewen never owned any shares in the company. The company’s business was ladies’ couture clothing. Ms Kristensen is a designer of ladies’ wear, and Promwalk is by no means the only company in which she has been involved and which has failed. She personally holds the lease of a shop in an expensive area of London. Promwalk and other companies have traded from those premises. Promwalk carried on business using the trade name ‘Isabell Kristensen’.

6.	Mr Frewen became a director of Promwalk on its incorporation, and so far as the records at the Companies Registry are concerned he continued to be a director until 2 August 1999, after the company had ceased to trade. Indeed, for all of the company’s trading period the Companies Registry records showed that Mr Frewen was the sole director He says that the records were wrong, and they might have been, but that is what they showed. They also recorded that a Mr Kamradt (of whom more later) became a director on 2 September 1999, to coincide with the resolutions which placed the company into liquidation. On the face of it there was no director for nearly all of August 1999. Ms Kristensen was never formally a director,

7.	I will now try to give some account of the realities behind the formal matters which I have recorded in the previous two paragraphs. One of Mr Frewen’s grievances is that the written evidence on which the Secretary of State’s application for him to be disqualified was based was formal in nature, and it was only when he submitted his evidence in response that the real factual background (or what he sees as the real factual background) was introduced into the case.

8.	Mr Frewen is English, but he has lived and worked in Brazil since 1989. He is a freelance consultant, and, as he said to me in the course of the hearing, he has times when his business is flourishing and other times when funds are short. The present is one of the latter times, but he was able to be in this country for the hearing of his appeal because a client, who is also a friend, had met his travelling expenses for a journey here which would partly be devoted to a project on which he was working for the client. In earlier years he appears to have been able to travel rather more often to this country. He met Ms Kristensen in 1997 at a wedding for which she had designed the bride’s gown. A relationship soon developed between them. According to Registrar Baister’s judgment Mr Frewen alluded in argument to his ‘infatuation’ with Ms Kristensen. The evidence records only that the relationship lasted for about two years from July 1997, so it must have come to an end around the time that Promwalk collapsed into insolvency.

9.	In the middle of 1998, when the relationship was still in existence, two companies owned by Ms Kristensen went into liquidation. Mr Frewen, who was in this country at the time, assisted Ms Kristensen in setting up a new company to start the business again. That company was Promwalk. It purchased assets from the liquidator of the previous companies and set up in business from the same premises (the shop of which the lease was held by Ms Kristensen personally). Mr Frewen said that he provided loan finance to assist Promwalk in getting started. The other thing which he agreed to do was to become a director. He says, and I do not think that this is disputed, that at no time did he have anything to do with the day to day running and management of the business. Those activities were undertaken by Ms Kristensen and Mr Kamradt.

10.	At this point the facts start to become a little more hazy. Mr Frewen says that the intention was that, when he returned to Brazil, he would cease to be a director and Ms Kristensen and Mr Kamradt would become directors. The case before the registrar seems to have depended to a considerable extent on how clear cut this intention was, and how far it was carried out. On 29 June 1998 and 1 July 1998 Mr Kamradt and Ms Kristensen respectively signed an agreement described as Employment contract between Promwalk Services Ltd t/a Isabell Kristensen and Mr Janus Valbak Kamradt’. Immediately above the signatures there appears the following: ‘We hereby sign to the above terms of contract and to the employment of Mr Janus Valbak Kamradt as PA to Isabell Kristensen and Managing Director of Promwalk Services Ltd trading as Isabell Kristensen.’ On the face of it this was a contract for Mr Kamradt to be the managing director of Promwalk. Given that Ms Kristensen never became formally a director of Promwalk there may have been a theoretical doubt about her capacity to sign the agreement on behalf of Promwalk, but she was the 99.9 per cent shareholder, and I do not doubt that everyone proceeded on the basis that she could and did make contracts on behalf of the company. There is no evidence about whether Mr Frewen, who was the sole director at the time, knew about this agreement.

11.	In August Mr Frewen was going to return to Brazil. His evidence is that before he left a document was prepared for his resignation as a director It was Form 288b, the form which is used to lodge notifications of resignations of directors or secretaries with the Companies Registry. There are, however, some omissions from or oddities about the document. First, there is a box on the form against the text: Date of resignation. The box is left blank. Secondly, later on the page the words appear: A serving director, secretary, etc must sign the form below. There is then a box for the signature, and against it a box headed ‘date’. The signature expected is plainly that of the director or company secretary who is resigning, and the date expected is the date on which the director or secretary signs. However, the signature which appears in the box is that of Ms Kristensen, not that of Mr Frewen, and no date appears at all. Thirdly, despite what I have just said both the written evidence given to the registrar by or on behalf of Mr Frewen (an affidavit by his then solicitor confirmed by an affidavit of himself) and the judgment of the registrar say that Mr Frewen signed the form. However, from the copy form in the bundle it seems indisputable that Mr Frewen did not sign the form. All the same, his evidence was that the form was prepared before he returned to Brazil, and that he knew about it. His evidence in that respect is not challenged. I shall proceed in this judgment on the basis that Mr Frewen did not sign the form of resignation, but that it was prepared before he returned to Brazil, and he knew that it existed.

12.	There are also two forms 288a, which is the form for the registration of the appointment of a director. One states that Mr Kamradt is appointed a director, the other that Ms Kristensen is appointed a director. Neither form is dated, either in the box for Date of appointment or in the box for dating the signature. They are, however, signed by Mr Kamradt and Ms Kristensen, the signatures being witnessed by Mr Frewen. The manuscript entries on these forms are obviously written in the same hand as those on form 288b (for Mr Frewen’s resignation), and it seems reasonable to assume that all three forms were prepared at the same time. That confirms Mr Frewen’s evidence that his form 288b was prepared before he returned to Brazil, because he signed the two forms 288a, and presumably was still in this country when he did that.

13.	Mr Frewen then went back to Brazil. He says that he had no further involvement in the affairs of Promwalk until the summer of the following year, when the financial crisis which eventually brought Promwalk down arose. His case is that he had left form 288b (the document to register his resignation) with Ms Kristensen. He expected that she would complete it by writing in a date in the two boxes for dates which had been left blank, and that she would then file it at the Companies Registry. He says that as far as he was concerned he had resigned. Ms Kristensen did not file form 288b, nor did she file the forms 288a which would have notified the Registry that Mr Kamradt and she herself were appointed directors. So as far as the Companies Registry was concerned Promwalk continued with Mr Frewen as its sole director.

14.	Mr Frewen says, and this is not, I think, disputed by the Secretary of State, that from the time of his departure to Brazil in August 1998 until the financial crisis of June and July 1999, the company was run entirely by Ms Kristensen and Mr Kamradt. In some way which is not, I think, described in the evidence Mr Frewen learned of the financial crisis, and he also learned that according to the Companies Registry he was the sole director. He took a number of actions then. I will not describe them now, but I will refer to some specific aspects of them later, since they bear on the critical questions of whether Mr Frewen had always continued to be a director, whether, if so, he had realised that he remained a director, and whether, if he did not realise that, he ought to have realised it. As I have said earlier, Promwalk ceased trading by the end of July 1999. Mr Frewen, if he had not resigned as a director a year earlier, certainly did resign on 2 August 1999. Another copy of form 288b, bearing that date and signed by Mr Frewen, was duly lodged at the Companies Registry. On 2 September 1999 Promwalk went into creditors’ voluntary liquidation, with a deficiency of over £75,000. Mr M S Langley was appointed the liquidator.

15.	There was a creditors’ meeting on 15 September 1999. Mr Kamradt, by then a director of the company, gave a report to the creditors. I quote one passage from it.

“The company had a very quiet period of trading for the first three months up to July 1999, which severely eroded the company’s working capital. The company being located in Knightsbridge had high overheads, and a recent review of the business concluded that a reduced level of sales coupled with the burden of historic debt had made ongoing trading untenable. In August 1999 the company’s sole director, Charles Frewen, left England for South America. The shop manager Janus Kamradt was recently appointed a director of the company because of Mr Frewen’s absence.”

This disqualification application

16.	By a letter dated 23 February 2001 Mr Frewen was notified that the Secretary of State intended to bring disqualification proceedings against him. The application was commenced by a claim form issued on 10 May 2001. The Secretary of State’s case was based mainly on an affidavit of the liquidator, Mr Langley and the exhibits thereto. In addition, there was a formal affirmation of a Chief Examiner at the Disqualification Unit of the Insolvency Service, Mr Baxendale. Mr Baxendale specified three matters by reference to which the Secretary of State contended that Mr Frewen was unfit to be a director or to be involved in the management of a company.

i)	Mr Frewen failed to ensure that Promwalk maintained and preserved proper accounting records, or (in the alternative) failed to deliver up such records to the liquidator when required to do so. (In the event the first formulation (based on Promwalk not having proper accounting records, rather than having them but Mr Frewen failing to deliver them to the liquidator) was the relevant allegation.)

ii)	Mr Frewen permitted Promwalk to trade in disregard of its statutory obligations in respect of PAYE and NICs.

iii)	Mr Frewen permitted Promwalk to trade in disregard of its statutory obligations in respect of VAT.

The three allegations all assumed that Mr Frewen had been a director of Promwalk until 2 August 1999, at which date it was common ground that, if he had been a director until then, he certainly resigned. It is convenient to mention here that, at the hearing before the registrar and on the appeal before me, there was no major issue about the three specific allegations. Mr Frewen did not seriously dispute that Promwalk had not kept satisfactory accounting records, or that it had not complied with its PAYE and NIC obligations, or that it had not complied with the requirements of VAT. The substantial question which was in dispute was whether he was a director of the company at the times when it was not keeping adequate records, and not complying with the requirements of PAYE, NICs, and VAT.

17.	It is also worth recording that the Secretary of State made no complaint about what Mr Frewen did when he became aware of the financial crisis of June or July 1999. Some things which he did then may be relevant as casting light on whether or not he had at all times remained a director of the company, but there is no suggestion that in themselves they demonstrated unfitness to be a director. The Secretary of State’s case is based on what Mr Frewen did, or as the Secretary of State sees it failed to do, over the period from the commencement of the company’s trading in 1998 until its financial problems became acute in the middle of 1999.

The registrar’s decisions

18.	The principal hearing before Registrar Baister took place on 3 and 4 July 2002. The registrar first had to consider an application by Mr Frewen for the hearing to be adjourned. Mr Frewen had apparently expected that the Secretary of State’s witnesses (Mr Langley, the liquidator, and Mr Baxendale from the Disqualification Unit at the Insolvency Service) would be giving their evidence orally and would be available for cross-examination. In fact their evidence was being adduced in affidavit form, and Mr Frewen applied for an adjournment in order that they could attend in person. The registrar refused the application.

19.	In the substantive judgment which the registrar gave after the hearing he first considered whether Mr Frewen had been a director of Promwalk at the material times. He concluded that he had. He accepted that the issue was not concluded by the bare fact that form 288b, which Mr Frewen said had been left with Ms Kristensen, had not been filed with the Companies Registry. However, he carefully reviewed the documentary evidence which was before him and on the basis of it decided that the case was not one where Mr Frewen had resigned but Ms Kristensen had failed to notify the Companies Registry. Rather it was a case where Mr Frewen had not resigned at all. I think (although the registrar does not spell this out) that it is implicit in the decision that Mr Frewen’s resignation from the office of director had been in contemplation, but it never happened; further, Mr Frewen knew that it had never happened, or alternatively did not know whether it had happened or not.

20.	The registrar proceeded to consider whether, on the basis that Mr Frewen had been a director throughout, the three specific allegations advanced on behalf of the Secretary of State (about the absence of proper accounting records, and the non-compliance with PAYE, NICs and VAT) had been made good. He concluded that they had. He then considered whether the circumstances showed that Mr Frewen was unfit to be a director or to be concerned in the management of a company. In his judgment they did. Therefore he was obliged under section 6 of the 1986 Act to impose a period of disqualification In the event he imposed a period of two years, the shortest period which the law permitted, thereby (as it seems to me) indicating that there were substantial mitigating circumstances present in Mr Frewen’ s case.

21.	From that decision of Registrar Baister Mr Frewen has appealed to the High Court, and the appeal has come before me.

Analysis and discussion

22.	I will first address Mr Frewen’s argument that Registrar Baister’s decision should be set aside because he ought to have acceded to Mr Frewen’s application for an adjournment in order that Mr Langley and Mr Baxendale could give their evidence orally and be cross-examined. I do not accept this argument. There had been a directions hearing on 14 January 2002. There was no attendance then on behalf of Mr Frewen, although he had solicitors who at that time were on the record as acting for him. The solicitors had notice of the directions hearing. One of the directions which the registrar gave was that ‘all deponents to the Affidavits sworn in these proceedings do attend for cross-examination on 21 days prior written notice before the trial of these proceedings.’ In other words, if Mr Frewen wanted to cross-examine Mr Langley and Mr Baxendale, he needed to give 21 days’ notice of his desire. He did not do so. Further, his solicitors were on the record as acting for him right down to the commencement of the hearing, and they did not give notice either. (I believe that the position as regards the solicitors was that they had applied for legal aid, but were not notified until just before the trial that it could not or would not be granted. So Mr Frewen appeared in person.)

23.	The registrar took the foregoing circumstances into account. He also considered two other factors. First, the substantial question on the hearing was going to be whether Mr Frewen had resigned as a director or not. Mr Langley and Mr Baxendale could not give any evidence about that from their personal knowledge. They gave evidence almost entirely about how matters appeared to them from the documents which they had seen. So cross-examination of them could not contribute anything much to the issue. If Mr Frewen’s case was that, contrary to the views which had been formed by Mr Langley and Mr Baxendale, the documents did not show that he had remained a director throughout, he could say that in submission to the registrar, and did not need to put it to the witnesses in cross-examination. Secondly, the registrar made the point that, if an adjournment was granted to Mr Frewen it would be likely to be on the basis that Mr Frewen would be ordered to pay the Secretary of State’s costs attributable to the adjournment. The registrar had no means of knowing whether Mr Frewen would be able to pay those costs.

24.	Taking account of all the foregoing factors the registrar declined to grant an adjournment. That was entirely a trial management decision for him. He considered the issue carefully and came to a reasoned decision that the trial should proceed I cannot possibly reverse his decision. In all probability I would have come to the same decision myself, but even if I was not sure about that, the decision was plainly one for the registrar to reach, and it would be a highly exceptional case if an appellate court were to interfere with the decision. I therefore reject Mr Frewen’s submission on this point.

25.	I move on to the substantive issues in the appeal. An important point, which applies to all the substantive issues, is that the appeal is not a rehearing. It is a review: CPR r 52.11(1)(a). The question is not whether I would have decided the case in the same way as did the registrar. The question is whether in my judgment his decision was positively wrong. If I take the view that the case was one which could have gone either way I ought not to interfere with the registrar’s decision unless I consider that he has made some mistake of law, for example by misstating the legal test which needed to be applied. As it appears to me there has been no mistake of that nature. The legal principles were not really in dispute, and certainly the registrar understood them all correctly. The issue was how they fell to be applied to the facts of the case. In the determination of that issue there were questions of fact and degree as respects which it would be most unusual for an appellate court conducting a review of the decision below, not a rehearing, to depart from the conclusion of the judge of first instance (in this case the registrar).

26.	The major question in the present case is whether Mr Frewen continued to be a director during the time after August 1998 when he returned to Brazil. I would, however, like to clear some other non-controversial, or less controversial, issues out of the way before I come to that major question.

27.	First, it is common ground that, if Mr Frewen was not a director of Promwalk in the period when the company’s accounting records were not being properly kept and when it was not complying with the requirements of PAYE, NICs, and VAT, he cannot be disqualified. That follows from section 6(l)(b) of the Act. The court has to be satisfied that ‘his conduct as a director of that company ... makes him unfit ...’ etc. There is an extended definition of ‘director’ in section 22(4) of the 1986 Act: ‘Director’ includes any person occupying the position of director, by whatever name called, and in section 6.. includes a shadow director.’ (The final words ‘and in section 6 includes a shadow director’ were repealed by the Insolvency Act 2000 s 8 and Schedule 4 para 15(1) with effect from 2 April 2001.) However, if Mr Frewen was not a director under strict company law, it is not suggested that he fell to be regarded as one for disqualification purposes because of the extended definition.

28.	Secondly, as I have already mentioned, there is no dispute that the company’s records were not properly maintained, or that it did not comply with the systems for PAYE, NICs, or VAT.

29.	Thirdly, if Mr Frewen was a director of Promwalk throughout the relevant period, in my judgment there is no realistic argument that he did not have to accept some of the responsibility for the failings in the systems of accounting records and for the failures to comply with PAYE, NICs and VAT. Mr Frewen did submit that, even if he was a director, the matters alleged against him were the fault of the company’s accountants (whom he had engaged on behalf of the company before he returned to Brazil) and of Ms Kristensen and Mr Kamradt. I would accept that the accountants, Ms Kristensen and Mr Kamradt may have been at fault as well as Mr Frewen (though it appears to be said by the accountants that they did not act for the company for long, because it did not pay their fees). However, as Lord Woolf emphasised in re Westmid Packing Services Ltd [1998] 2 All ER 124 at 130 and 131, although a degree of delegation and division of responsibility is permissible, nevertheless the board of directors of a company have a collegiate or collective responsibility, and: ‘It is of the greatest importance that any individual who undertakes the statutory and fiduciary obligations of being a company director should realise that these [sic, but I wonder whether this is a misprint for ‘there’] are inescapable personal responsibilities.’ The fact, if it is one, that Mr Frewen was let down by the accountants or by Ms Kristensen and Mr Kamradt no doubt reduces his personal responsibility for the failures within Promwalk (and in all probability influenced the registrar to impose the shortest possible period of disqualification), but it does not absolve him from responsibility. I entirely agree with what the registrar said on this aspect of the case, and I will not elaborate on it any further.

30.	I can now turn to the question of whether Mr Frewen did or did not remain a director throughout. I have already described some of the relevant facts bearing on this question. To recapitulate briefly, when the company was formed he was the sole director. According to the Companies Registry he continued to be the sole director from the incorporation of the company until 2 August 1999 (after the cessation of trading). His case is that he resigned, or at least believed that he had resigned, at some time in August 1998, after he had returned to Brazil. He relies on the form 288b which he says was to have been filed with the Companies Registry by Ms Kristensen but which was never filed.

31.	The registrar found that the form 288b did not conclude the matter. He had heard Mr Frewen’s oral evidence. He considered a number of other documents which he considered to have a bearing on the question, and came to the conclusion that Mr Frewen had not resigned, but remained a director throughout. Further, it seems to me implicit in the registrar’s decision that Mr Frewen knew that he was still a director, or at least that he did not know whether he had resigned or not. In my judgment, on an appeal by way of review it is not open to me to reverse the registrar’s decision on this aspect of the case. To put the matter at its lowest the decision was one which was open to him to reach, and I cannot say that it was positively wrong I would not necessarily evaluate all the individual factors in the same way as the registrar did, but taking the case as a whole I am satisfied that I cannot overturn the decision. In the following sub-paragraphs I set out the principal factors which appear to me to be capable of supporting the decision. Most of them are factors which are also mentioned by the registrar.

i)	Although I am prepared to accept that the partially completed form 288b existed before Mr Frewen departed for Brazil at an unknown date in August 1998 and that Mr Frewen knew about it, the registrar was plainly right to consider that the form did not conclude the matter. He makes the point that the form was not dated, and I have added the further point that, contrary to what the registrar said, it was not signed by Mr Frewen either. Instead it was signed (inappropriately) by Ms Kristensen. In the circumstances it is possible that the Companies Registry might not have been willing to accept it even if it had been forwarded for registration.

ii)	There is no evidence that Mr Frewen (or anyone else for that matter) notified the fact that he had resigned to anyone whom one might have been expected to be notified, such as the accountants and the bank. I think that I can go further and say that the only inference which can sensibly be drawn from the materials before the registrar and before me is that the accountants and the bank were not notified.

iii)	Although Mr Frewen’s evidence that he left the running of the company to Ms Kristensen and Mr Kamradt after he returned to Brazil seems correct, he does appear to have had occasional contacts with the accountants relating to the company. The registrar commented that it seemed unlikely that a firm of accountants would have discussed the affairs of a client company with an ex-director. Mr Frewen said to me that he had known the accountants for many years, and his relationship with them was such that they would not adopt a formal attitude on such a matter. He might be right that his continuing contacts with the accountants were explicable on grounds other than that he was a director, but they might alternatively have been explicable on the ground that he still was a director. I repeat that this is an appeal by way of review. Thus I cannot say that, in taking account of this factor, the registrar was positively wrong.

iv)	Mr Frewen continued to be an authorised signatory of the company’s bank account throughout. Mr Frewen said that that was only because Ms Kristensen took no steps to remove him as a signatory. That could be right, but on an appeal by way of review I do not think that I can fault the registrar for noting this point and taking account of it in his evaluation of all of the matters which appeared to him to bear on his ultimate conclusion.

v)	When the crisis arose in June or July 1999 Mr Frewen effectively took control. He travelled to this country to see what he could do, and he appears to have met with the accountants and the bank. He says that he only did those things because he was informed that the company was in difficulties and that, contrary to what he had previously believed, the entries at the Companies Registry showed him to be the sole director. However, another possibility is that he took charge in mid-1999 because he knew, or at least suspected, that he had never ceased to be a director; in the belief that things would progress well with the company he had not expected to have to concern himself with the company’s affairs; but things were going wrong, so he recognised that he would have to get involved. The registrar evidently formed the view that that latter possibility was correct, and I cannot say that he was wrong.

vi)	A problem for Mr Frewen in this connection is that there is no evidence of how and by whom he was told about the financial crisis, and of what was said or written to him at the time about his continuing status as a director of Promwalk. Further, although some e-mails from him in Brazil have been produced (see below) there is no document in which he says that he did not believe that he was still a director. One would have expected something of that nature if he had received a message that he was still a director, and that message was contrary to his previous understanding, particularly if the message also informed him that the company was in major financial trouble and it was his responsibility to do something about it. However, there is no evidence of that nature, and such evidence as there is suggests that it was not a surprise to him to be told that he was a director.

vii)	One of the e-mails to which I referred in the previous sub-paragraph is dated 7 July 1999. It is sent to Mr Le Roux at the accountants, and was clearly written at a time when Mr Frewen hoped that Promwalk could be saved from liquidation. He set out the text of a message which he suggested Ms Kristensen should send to staff, clients and suppliers. There was something of a dispute in the course of the hearing about whether the message was deliberately misleading. I regard that as a side issue in this case, and I will not go into it. However, after the draft text for the proposed message Mr Frewen added this: ‘Isabell can if she wishes add something along the lines that the principal director is withdrawing for geographical or personal reasons.’ ‘The principal director’ obviously meant Mr Frewen. What he has suggested Ms Kristensen might say seems very curious if his belief until very recently had been that he had ceased to be a director and that Ms Kristensen and Mr Kamradt had taken over as directors.

viii)	In the same e-mail Mr Frewen continues as follows: ‘I have taken my course of action so that I can clarify my position precisely and withdraw in an orderly fashion from a business for which I have legal responsibilities but over which, for geographical reasons, I can have no control on a day to day or even a week to week basis.’ That seems a curious thing for Mr Frewen to say to Mr Le Roux if until very recently he thought that he had withdrawn from the business almost a year ago and had no legal responsibilities for it. Would he not have been expected to say that he had thought that he had no legal responsibilities for the business but had recently been told that he was wrong?

ix)	In another e-mail, also to Mr Le Roux, of the next day, 8 July 1999, Mr Frewen wrote: I have been trying to get Isabell to assume directorship and responsibility for the company since the latter part of last year and each time she has refused or skirted the issue.’ It is very hard to reconcile that with a belief on Mr Frewen’s part that, until he received some totally unexpected information recently, he had ceased to be a director of Promwalk some 11 months ago and Ms Kristensen and Mr Kamradt had become directors. It is, however, easy to reconcile it with a knowledge on the part of Mr Frewen that he had been trying to get Ms Kristensen to agree that he could resign as a director and that she would become one in his place, but that she had never agreed. Of course he could have resigned as a director whether she agreed or not, but, given the nature of the relationship between the two of them, it is wholly believable that he would not wish to resign without her agreement.

32.	Having regard to all of the factors which I have identified in the foregoing sub-paragraphs it was in my judgment certainly open to the registrar to reach his conclusion that Mr Frewen had not ceased to be a director of Promwalk at any time before 2 August 1999. I cannot, and I do not, interfere with that conclusion on this appeal. My view in that respect is fatal to the appeal.

33.	I should mention for completeness that there was some discussion of how the case would stand if I considered (or if the registrar had considered) that Mr Frewen had not resigned as a director of Promwalk in August 1998, but genuinely (though mistakenly) believed that he had. I do not think that that is the basis on which the registrar viewed the case. He thought that Mr Frewen knew that he had not resigned, or at least was aware that he might not have done. In my opinion it was certainly open to the registrar to view the case as he did. The e-mails in particular create in me an impression that Mr Frewen knew that he had remained a director, that it was unsatisfactory for him to have remained, that he wanted to resign, but that he was not prepared to resign without Ms Kristensen first saying that she was content for him to do so. And of course she never said it.

34.	However, if the position had been that Mr Frewen genuinely but mistakenly thought that he had resigned it appears possible that, on the basis of the decision of the Court of Appeal in relation to the third respondent (Mr Solley) in re Kaytech International plc [1999] 2 BCLC 351, a disqualification order would still have been both possible and appropriate. I do not need to consider this point further, and I will not do so.

Concluding remarks

35.	The formal conclusion is that Mr Frewen’s appeal must be dismissed for the reasons which I have explained in this judgment. I would, however, like to add a few further remarks.

36.	Mr Frewen feels that he has been harshly and unreasonably treated in this case. I am not sure whether he feels that Registrar Baister was unfair to him. Perhaps he does, and I fear that he will probably feel the same about me. I believe, however, that his principal sense of grievance is directed against the Secretary of State, or more accurately against the Disqualification Unit within the Insolvency Service which has had the conduct of these proceedings. I have some sympathy with some, though not all, of Mr Frewen’s grievances, but I am afraid that they are not matters which are relevant when it comes to deciding the case. I will not itemise all of the grievances, but there is one which, I believe, he feels more deeply about than any others.

37.	It is that action has been taken against him without any action being taken against Ms Kristensen and Mr Kamradt, who he says were more responsible than he was for the matters which founded the three allegations against him. Mr Westwood (counsel for the Secretary of State) did not wish to make any comment on this beyond saying that, if there were other persons against whom the Secretary of State had at least as good a case as she had against Mr Frewen but she had not proceeded against them, that provided no defence for Mr Frewen. As a matter of law that is correct, and Mr Frewen’s point does not lead me to allow his appeal.

38.	I will, however, add my own comment that I understand exactly how Mr Frewen feels about this, and if I had been in his position I have little doubt that I would have felt very much the same way. I do not know enough of the detailed facts to have any opinion on whether the Secretary of State could realistically have proceeded against Mr Kamradt, but on everything which I have learned about the case I am surprised that no application was made against Ms Kristensen. Although she was not in form a member of the board of directors of Promwalk, it seems almost indisputable that she was a ‘director’ within the extended definition in section 22(4) of the 1986 Act (see paragraph 27 above). Her earlier history of other failed companies, followed by starting again with a new company (Promwalk) carrying on the same business from the same premises and then failing again, only increases my puzzlement and Mr Frewen’s sense of victimisation over proceedings having been brought against him while she was left free to launch another ‘phoenix company’. Mr Frewen told me that, from publicly available records, he had discovered that Ms Kristensen did launch another company after the collapse of Promwalk, and that other company had itself gone into liquidation in the meantime.

39.	There may have been a good reason for no disqualification application having been brought against Ms Kristensen. However, I do not know what it is, and no attempt has been made to explain to Mr Frewen why he alone has been made the subject matter of proceedings brought by reason of Promwalk’s failure. Although I believe that I must affirm the registrar’s order, I do understand the dissatisfaction which Mr Frewen feels about this aspect of the case which has been successfully brought against him.