The High Court has refused Patrick McCann’s application to dismiss disqualification proceedings against him on grounds of delay and prejudice. The ruling leaves the Director of Corporate Enforcement’s substantive application to disqualify him to be determined; it makes no findings on the allegations behind that application.
The Director seeks an order under section 160(2) of the Companies Act 1990 that would prevent McCann from acting in specified company roles for a period set by the court. The application concerns McCann’s work as auditor of Kentford Securities Limited in 1990 to 1993. The Director alleges, among other matters, that the company’s accounts did not give a true and fair view, that audit work was deficient and that McCann produced a forged letter said to be from Des Traynor. McCann denies fabricating the letter and says he relied on Traynor’s assurances that the company was a trust company.
McCann argued that the time taken to bring the disqualification case had impaired his ability to defend it. He said Traynor, who died in May 1994, could have supported his account of resigning as a director, explained the company’s status and authenticated the disputed letter. McCann also said Traynor had possessed the company’s books. The Director’s counsel argued that McCann was speculating about what Traynor would have said and that the alleged loss of that evidence would not, by itself, answer the wider complaints.
Justice Michael Peart said the delay relevant to the motion ran from November 2002, when the Director received the authorised officer’s report, to March 2005, when the disqualification application began. The Director had said that the report required consideration, legal advice and an audit expert’s report, dated 5 February 2005. The judge found that this period was not inordinate or excessive and that the explanation provided was reasonable. He also noted that the legislation set no time limit for bringing such an application, while recognising that excessive delay causing unfair prejudice could still justify relief in an appropriate case.
The judge was not satisfied that McCann had shown real prejudice making it unjust to require him to defend the case. He considered that Traynor’s death, rather than the period of delay relied on, was the source of the claimed loss of evidence, and said the same evidence would have been unavailable even if proceedings had begun earlier. The judge stressed that he was not making findings on the underlying factual allegations. He refused the application to dismiss the proceedings.