The High Court has temporarily restrained eight defendants from bringing applications to disqualify directors of Permanent TSB Group Holdings plc and other plaintiffs, pending the trial of an action brought by the company and individual plaintiffs.
Mr Justice Cooke’s judgment, delivered on 4 February 2013, concerned an interlocutory injunction. The court did not decide the underlying disputes or make a final finding on whether any proposed disqualification application would be an abuse of process.
The defendants, described in the judgment as shareholders in the holding company, had served notices on 10 January 2013 stating that they intended to seek relief under section 160(2) of the Companies Act 1990 against former directors. The plaintiffs argued that the notices were invalid because they gave no grounds for the proposed applications. They also alleged the applications would be an abuse of process, intended to pressure the plaintiffs in disputes over the group’s restructuring.
The judge said the notices did not identify which statutory grounds would be relied on or set out the alleged misconduct. He also considered it strongly arguable that the defendants had not formed a settled intention to apply: evidence from the first defendant said the proposed action had not been fully formulated and that some defendants had not decided whether to proceed.
The court concluded that the plaintiffs had shown a prima facie case that the mandatory notice requirement had not been met. Applying the principles for interlocutory relief in Campus Oil, it found that delaying any application until trial would have limited consequences for defendants, while proceeding could cause commercial harm to the company and reputational harm to the individual plaintiffs. The defendants could continue their other proceedings, including a petition under section 205 of the Companies Act 1963.
The court declined to apply a different approach discussed in a case about a creditor’s winding-up petition. It said the defendants had no equivalent personal interest in obtaining director disqualification and that other proceedings were available to pursue their shareholder claims.
The order restrains the defendants, until trial of the action, from issuing proceedings or presenting any application under section 160 against any or all of the plaintiffs. The judgment leaves the validity of the notices and the abuse-of-process claim for determination in the action.