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||Neutral Citation Number:  EWHC 299 (Ch)
||Case No: (1) 5397/2005; (2) 006581 OF 1992 D (3) 614/2006
IN THE HIGH COURT OF JUSTICE
||Royal Courts of Justice
Strand, London, WC2A 2LL
||2nd March 2006
B e f o r e :
MR JUSTICE LIGHTMAN
|| IN THE MATTER OF BLACKSPUR GROUP PLC & ORS
AND IN THE MATTER OF A DISQUALIFICATION UNDERTAKING DATED 31ST MAY 2001
AND IN THE MATTER OF THE COMPANY DIRECTORS DISQUALIFICATION ACT 1986
||NIGEL ANTONY EASTAWAY
||- and -
||THE SECRETARY OF STATE FOR TRADE AND INDUSTRY
|2) 006581 OF 1992 D
||IN THE MATTER OF BLACKSPUR GROUP & ORS
AND IN THE MATTER OF THE COMPANY DIRECTORS DISQUALIFICATION ACT 1986
||THE SECRETARY OF STATE FOR TRADE AND INDUSTRY
||- and -
||(1) VERNON JOHN EVELEIGH DAVIES
(2) NICHOLAS ANDREW THOMAS
(3) WILLIAM CUMMINGS THOMPSON
(4) ALEXANDER DOUGLAS ANDREW
(5) NIGEL ANTONY EASTAWAY
||IN THE MATTER OF A DISQUALIFICATION UNDERTAKING DATED 31ST MAY 2001
AND IN THE MATTER OF THE COMPANY DIRECTORS DISQUALIFICATION ACT 1986
||NIGEL ANTONY EASTAWAY
||- and -
||THE SECRETARY OF STATE FOR TRADE AND INDUSTRY
Mr Matthew Collings (instructed by BCL Burton Copeland, 51 Lincoln's Inn Fields, London WC2A 3LZ) for Mr Eastaway
Mr Malcolm Davis-White QC and Mr Jason Coppel (instructed by the Treasury Solicitor, One Kemble Street, London WC2B 4TS) for the
Secretary of State
Hearing dates: 1st – 6th February 2006
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Lightman:
- I have before me separate applications by Mr Eastaway in three sets of proceedings ("the Applications"). The applications spring out of proceedings ("the Disqualification Proceedings") commenced in 1992 by the Secretary of State for Trade and Industry ("the Secretary of State"). By the Disqualification Proceedings the Secretary of State sought orders under the Company Directors Disqualification Act 1986 ("the 1986 Act") against Mr Eastaway and four other persons ("the Defendants").
- The Disqualification Proceedings proved complicated and protracted and there was serious delay which was in part attributable to the Secretary of State. Mr Eastaway complained that the delay constituted a violation of his right to the determination of his civil rights within a reasonable time under Article 6(1) ("Article 6") of the European Convention on Human Rights ("the Convention") and on this ground made applications in judicial review proceedings seeking an order that the Secretary of State should discontinue the Disqualification Proceedings and in the Disqualification Proceedings seeking an order that the proceedings should be struck out or dismissed ("the Strike-Out Application").
- When these efforts had failed, on the 31st May 2001, on the basis of the matters set out in the attached schedule of unfit conduct which he did not dispute for the purposes of the 1986 Act and any purposes consequential to the Disqualification Undertaking, Mr Eastaway offered and the Secretary of State accepted (in place of continuance to trial of the Disqualification Proceedings) a disqualification undertaking ("the Disqualification Undertaking") under which (most particularly) Mr Eastaway undertook for 4˝ years not to be a director of a company or in any way to be concerned in or take part in the promotion, formation or management of a company without the permission of the court.
- In anticipation that Mr Eastaway would offer and the Secretary of State would accept the Disqualification Undertaking, on the 25th May 2001 the parties agreed that upon the terms there set out the Disqualification Proceedings should be stayed and that the parties should have general liberty to apply.
- Mr Eastaway thereafter commenced proceedings in the European Court of Human Rights ("the ECHR") for violation of Article 6 constituted by the delay ("the ECHR Proceedings"). By its judgment ("the ECHR Judgment") the ECHR upheld Mr Eastaway's complaint holding that by reason of delay Mr Eastaway's right under Article 6 to a determination of his rights within a reasonable time had been violated and awarded him: (a) compensation of €15,000 in respect of the costs of the Strike- Out Application (as an attempt to use domestic remedies to address the issue of delay under Article 6); (b) €4,500 in respect of the non-pecuniary loss which he had suffered; and (c) €10,000 in respect of the costs of the ECHR Proceedings.
- By reason of the Disqualification Proceedings and their culmination in the Disqualification Undertaking, Mr Eastaway (who is a chartered accountant) now faces disciplinary proceedings by two professional accountancy bodies to which he belongs. By the Applications Mr Eastaway contends that by reason of the ECHR Judgment and the finding of violation of Article 6 he is entitled to relief which removes the stigma to which the Disqualification Proceedings and Disqualification Undertaking have subjected him and relief which should persuade the professional bodies to discontinue the disciplinary proceedings. The question raised is whether he is entitled to such relief.
- The parties have agreed a statement of the relevant facts which is substantially taken from the ECHR Judgment. My recital of the facts is essentially taken from that statement.
- The Blackspur group of companies ("Blackspur"), was formed in September 1987 and at various times Mr Eastaway acted as director of companies in the group. Blackspur went into receivership in July 1990 with an estimated deficit of Ł10-20 million.
- On the 1st July 1992, on the last day of the applicable two year limitation period, the Secretary of State issued the Disqualification Proceedings against the Defendants. Included amongst the allegations against them were those of false accounting and trading whilst insolvent. The Secretary of State's evidence was not complete at the time he commenced the Disqualification Proceedings, and he applied for an extension of time for the serving of evidence. The Defendants refused to consent to an extension being granted and instead on the 13th October 1992 three of the Defendants (but not, at this stage, Mr Eastaway) applied to strike out the proceedings. The Secretary of State's evidence was completed and served on Mr Eastaway on the 14th December 1992. On the 13th May 1993 Mr Eastaway also applied to strike out the proceedings. The Secretary of State's application for an extension of time and the cross-applications by the Defendants to strike out the proceedings were heard by the Registrar on the 20th May 1993, when they were adjourned to the 29th July 1993. On 27 January 1994 the Registrar granted the Secretary of State's application for an extension of time and dismissed the application to strike out. Mr Eastaway and two others of the Defendants appealed to the High Court.
- Related criminal charges had been brought against Mr Eastaway and three other Defendants on the 1st July 1992. In May 1993 the Defendants applied to stay the Disqualification Proceedings pending the conclusion of the criminal proceedings. The criminal trial took place between March and June 1994, during which period the Disqualification Proceedings were adjourned generally, with liberty to restore. At the conclusion of the criminal trial, Mr Eastaway and one other of the Defendants were acquitted, and two of the Defendants were convicted. In February 1995 on appeal the two convictions were quashed.
- By a letter dated the 16th September 1994 Mr Eastaway invited the Secretary of State to reconsider whether, in the light of the acquittals in the criminal trial, it was in the public interest to carry on with the Disqualification Proceedings. On the 15th December 1994 the Treasury Solicitor replied that the Secretary of State had decided that it remained expedient in the public interest that the Disqualification Proceedings should continue.
- Once the criminal trial had been concluded, the appeal to the High Court against the Registrar's decision of the 27th January 1994 could and did proceed and the appeal was dismissed on the 2nd May 1995. In November 1995 the first of the Defendants, Mr Davies, was granted permission to appeal out of time to the Court of Appeal, and his substantive appeal was dismissed by that court on 24 May 1996. The Court of Appeal found that the reasons for the Secretary of State's failure to complete his evidence before the proceedings were commenced had been "far from satisfactory", but considered nonetheless that the case should proceed since it was in the public interest to determine the "particularly serious" allegations of false accounting and trading while insolvent. In addition, the court observed that the delay by the Secretary of State had not affected the timing of the hearing or prejudiced Mr Davies, and that, once the proceedings had commenced, "the respondents' main concern was to delay the proceedings until after the conclusion of the criminal trial, not to hurry them on" (Secretary of State for Trade and Industry v Davies (No 2)  2 BCLC 317). On the 1st July 1996 the Registrar directed that the Defendants should serve their evidence in response to that of the Secretary of State by 29 November 1996.
- In June 1996 Mr Davies invited the Secretary of State to accept undertakings from him instead of proceeding to trial. The Secretary of State refused. On the 2nd October 1996 Mr Davies applied for a stay of the proceedings and on the 5th November 1996 for a judicial review of the decision of the Secretary of State. On the 18th November 1996 Mr Eastaway wrote to the Treasury Solicitor in connection with the applications of Mr Davies stating:
"should it be decided that, as a matter of principle, undertakings are an appropriate and acceptable means of resolving disqualification proceedings, then our client would also wish to offer undertakings in similar terms in order to resolve the matters against him. We trust that you will inform us in the event that the concept of our client's offer is considered to be acceptable in principle."
Mr Davies' applications were dismissed by Rattee J on the 22nd November 1996 and by the Court of Appeal on the 19th November 1997: Re Blackspur Group plc  1 BCLC 676,  1 WLR 422.
- On the 9th December 1996 the Registrar ordered that, if the Defendants had not served their evidence by the 17th January 1997, they would be debarred from adducing any evidence. The Defendants served their evidence on the 17th January 1997. On the 20th January 1997 the Registrar directed that the Secretary of State should serve his evidence in reply by the 17th March 1997. On the 14th April 1997 the Registrar granted the Secretary of State an extension of time for the serving of evidence in reply until the 30th June 1997, and this evidence was in fact served on the 10th July 1997. At a further directions hearing on the 4th August 1997 the Defendants were given permission to adduce additional evidence in rejoinder by the 1st December 1997. The Defendants failed to comply with this order and on 8 December 1997 they were granted an extension of time until 9 February 1998.
- On the 30th January 1998 Mr Eastaway asked the Secretary of State to reconsider the continuance of the Disqualification Proceedings against him. On the 6th February 1998 the Secretary of State informed Mr Eastaway that he intended to continue them. On the 9th February 1998 there was a further directions hearing, when Mr Eastaway was ordered to serve further evidence by the 9th March 1998.
- On the 17th February 1998 Mr Eastaway informed the Secretary of State that Mr Eastaway was willing to negotiate an agreement of the facts for the purpose of enabling the Disqualification Proceedings to be summarily disposed of under the procedure approved in Re Carecraft Construction Co Ltd  1 WLR 1701, as refined and approved by the Court of Appeal in Secretary of State for Trade and Industry v. Rogers  1 WLR 1569 ("the Carecraft Procedure"). On the 5th March 1998 the Secretary of State replied that he would accept a statement of facts for the purposes of adopting the Carecraft Procedure ("the Carecraft Statement") on the basis that there should be a disqualification for the period of five years. In the light of these negotiations at a directions hearing on the 23rd March 1998 the timelimit for Mr Eastaway's further evidence was extended indefinitely. On the 17th June 1998 the Secretary of State sent to Mr Eastaway a draft Carecraft Statement. On the 30th July 1998 the parties met to discuss it and a revised Carecraft Statement was prepared. On the 4th October 1998 Mr Eastaway broke off the settlement negotiations and on the 8th December 1998 the Disqualification Proceedings were set down for trial on the 4th October 1999.
- On the 23rd April 1999 Mr Eastaway again wrote to the Secretary of State asking him to discontinue the proceedings on the ground that they had already exceeded the "reasonable time" provision in Article 6. On the 30th June 1999 the Secretary of State replied that he had decided not to discontinue them. Meanwhile, on the 10th June 1999 Mr Eastaway contacted the Secretary of State to resume negotiations on the Carecraft Statement. On the 29th July 1999 there was a pre-trial review at which the court gave detailed trial directions.
- On the 18th August 1999 Mr Eastaway applied for judicial review of the legality of the Secretary of State's decision of 30 June 1999 not to discontinue the Disqualification Proceedings on grounds of delay. By this time all outstanding issues on the proposed Carecraft statement had been resolved but it remained unsigned. To the advantage of Mr Eastaway the statement only included five of the eight earlier substantive allegations against him. At a hearing before Hart J on 13th September 1999 Mr Eastaway gave an undertaking to the Court ("the Carecraft Undertaking") in the following terms: "that in the event that his application for judicial review …. is concluded and (a) is unsuccessful or (b) is successful and the Secretary of State thereafter decides in accordance with law that the disqualification proceedings remain expedient in the public interest and ought not to be discontinued (and there is no challenge to this further decision) he will sign the draft Carecraft statement agreed with the Secretary of State (or have it signed on his behalf by Burton Copeland) and will agree to the determination of the disqualification proceedings by way of the Carecraft procedure on the basis of that signed statement."
- On the 15th September 1999 the application for leave to apply for judicial review was refused on paper. On the 27th January 2000 on renewal of the application at an oral hearing, permission was again refused. On the 2nd February 2000, Mr Eastaway renewed his judicial review application before the Court of Appeal where on the 15th March 2000 (following an oral hearing) it was refused. In the course of a considered judgment, Lord Justice Buxton described the application as "misconceived", because the arguments on delay could, and should, have been made in the course of the Disqualification Proceedings and not in separate proceedings for judicial review. On the 23rd March 2000 Buxton LJ refused permission to appeal to the House of Lords. Mr Eastaway appealed to the House of Lords, which on the 11th July 2000 granted permission to appeal, on the 18th October 2000 heard Mr Eastaway's appeal and on the 2nd November 2000 delivered judgment dismissing it on the grounds that the House of Lords had no jurisdiction to hear an appeal from the decision of the Court of Appeal refusing permission to apply for judicial review (R v. Secretary of State for Trade and Industry, ex parte Eastaway  1 WLR 2222). On the 6th November 2000 the Secretary of State wrote to Mr Eastaway indicating that he wished to fix a hearing at which the Disqualification Proceedings could be determined (as agreed) by way of the Carecraft Procedure.
- The Human Rights Act 1998 came into force on the 2nd October 2000, and on the 10th November 2000 Mr Eastaway issued the Strike-Out Application seeking a declaration that by reason of delay the Disqualification Proceedings were in breach of Article 6 or were incompatible with his Convention rights, that the Secretary of State was acting unlawfully in pursuing the proceedings and that the Court would be acting unlawfully if it allowed the proceedings to continue. Among the other relief sought was an order that the Disqualification Proceedings be struck out or dismissed and that, insofar as necessary, Mr Eastaway should be released from the Carecraft Undertaking. Mr Eastaway relied exclusively on the breach of Article 6: he did not invoke the Civil Procedure Rules.
- The application was heard by Sir Andrew Morritt V-C on the 7th February 2001 who delivered judgment dismissing it on the 15th February 2001 (Re Blackspur Group plc and Others; Secretary of State for Trade and Industry v. Eastaway and Others  1 BCLC 653). In paragraph  of his judgment the Vice-Chancellor identified three issues for his determination as follows:
"(1) whether the conduct of the proceedings has been in breach of or incompatible with art 6, (2) whether, assuming such a breach or incompatibility, Mr Eastway is precluded by his undertaking from obtaining the relief he now seeks and if so (3) whether the Court can and should release him from it."
He found against Mr Eastaway on all three of these issues in the following terms.
" In summary, I conclude: (1) there has been no infringement of the Convention rights of Mr Eastaway, nor any threat to act incompatibly with them, (2) Mr Eastaway waived any right to complain of any breach of his Convention rights by giving the undertaking to the Court on 13 September 1999, and (3) there are no grounds for releasing him from that undertaking. It follows that I dismiss Mr Eastaway's application. Whether or not to enforce the undertaking and if so how will be a matter for the judge by whom the contempt application (if any) is heard."
- As regards the first issue of breach of Article 6, (in a passage cited in the ECHR Judgment) the Vice-Chancellor said:
"It is true that the events in question occurred over ten years ago. It is also true that eight and a half years have now elapsed since the proceedings were commenced. In those circumstances it is necessary to look critically at the events of the intervening period to determine whether more than a reasonable time has elapsed so as to constitute an infringement of Mr Eastaway's Convention rights. In my view most of the time elapsed is to be attributed either to the requirements of justice down to the conclusion of the criminal proceedings in June 1994 or to the conduct of Mr Eastaway. Such conduct includes the attempt to strike out the proceedings concluded in May 1996; Mr Davies' unsuccessful attempt, with which Mr Eastaway was associated, from October 1996 to November 1997 to have the proceedings stayed; the negotiations for a summary disposal under the Carecraft procedure from February to October 1998; the renewed attempts for that purpose between June and September 1999 and Mr Eastaway's unsuccessful attempts between August 1999 and November 2000 to obtain a judicial review of the decision of the Secretary of State to continue.
In the judgments of the Court of Appeal given in November 1997 in Re Blackspur Group  1 WLR 422, 427H and 433B it was recorded that Mr Davies did not suggest then that a fair trial was impossible. Mr Eastaway does not now suggest that the delay has been such that a fair trial is impossible. A very large proportion of the undoubtedly long time which has elapsed since these proceedings were commenced is due to the various actions taken by Mr Eastaway. Those actions were taken not to obtain but to avoid a fair and public hearing by an independent or impartial tribunal either within a reasonable time or at all. In my view there has been no breach of Mr Eastaway's Convention rights under Article 6 and for the Secretary of State now to proceed with these proceedings would not be incompatible with them."
- Given his decision on the first issue, the second and third issues did not need to be decided, but as an alternative basis of the decision the Vice-Chancellor decided both in favour of the Secretary of State. As regards the second issue he rejected Mr Eastaway's case that the Carecraft Undertaking did not, on its true construction, apply in the events which had happened. At the end of paragraph 23 of his judgment he concluded as follows:
"In my view it is plain that the undertaking applies in the events which have happened. It operated from 13 September 1999 and requires Mr Eastaway to observe its terms. Any existing breach of Mr Eastaway's convention rights was thereby waived by the undertaking and the obligations assumed by Mr Eastaway thereunder"
- The Vice-Chancellor went on to accept the Secretary of State's contention that the Court had no jurisdiction to set aside a consent order, which was not expressed to be made until further order, save on grounds which would warrant setting aside a contract. He said:
" Counsel for the Secretary of State contends that the court has no jurisdiction to set aside a consent order, not expressed to be made until further order, save on grounds which would warrant setting aside a contract. This submission is supported by the judgments of Winn and Buckley LJJ in Purcell v FC Trigell Ltd  3 All ER 671 at 676 and 677,  1 QB 358 at 365, 366 and 367 where they made clear that they did not agree with the statement of Lord Denning. It is also established by the decision of the Court of Appeal in Chanel Ltd v FW Woolworth & Co Inc  1 All ER 745,  1 WLR 485. I accept these submissions of the Secretary of State. The undertaking was not interlocutory in nature nor limited until further order. Accordingly it is necessary for Mr Eastaway to establish grounds sufficient to avoid a contract before the court can intervene. But, in any event, I doubt whether either of the orders sought would, of itself, have the effect which Mr Eastaway desires. The fact is that the undertaking was given. On its true construction it constituted a waiver of any breach of or incompatibility with Mr Eastaway's convention rights then existing. To nullify the effect of the waiver when given Mr Eastaway must demonstrate that his consent was induced by mistake, a misrepresentation for which the Secretary of State was responsible or some other vitiating factor. These are the grounds which could also justify setting aside a contract or a consent order not expressed to be until further order.
 Counsel for the Secretary of State readily accepted that the Secretary of State must act honestly, fairly and lawfully; he forcefully contended that he had. In addition he pointed out that the additional matters on which counsel for Mr Eastaway relied, to which I have referred in para 25 above, do not necessarily lead to the conclusion for which Mr Eastaway contends. If Mr Eastaway has unequivocally waived his right to complain of conduct incompatible with his convention rights then why should the Secretary of State be unable to hold him to it unless Mr Eastaway is able to establish grounds sufficient to justify the avoidance of a contract. I agree."
- He rejected Mr Eastaway's contention that he had been induced to give the Carecraft Undertaking both by a misrepresentation and in consequence of a mistake. The Vice- Chancellor found that there was no evidence of any misrepresentation. He dealt with the question of mistake in paragraphs  to  of his judgment as follows:
" The mistake relied on appears from paras 4 and 5 of the witness statement made by Mr Eastaway on 2 February 2001. He said:
'My understanding of the undertaking was that I reluctantly agreed to a Carecraft disposal of the proceedings, purely on the ground of an inability to fund a full hearing of the proceedings, once my judicial review had been heard on the merits and disposed of in a way adverse to me, i.e. I lost on the merits. To this was added the point about me being successful but the Claimant nevertheless proceeding and there being a further challenge to that. I only agreed to the Carecraft procedure subject to the judicial review. As we have never had the judicial review, I assume that the undertaking falls away. My understanding is that the judicial review never even got off the ground, and that there therefore has been no consideration of my contentions on the underlying merits.
If my assumption is wrong, then a mistake has been made, and I would respectfully ask to be released from the undertaking. I have never agreed to my rights being waived, particularly my Convention rights: I have been consistent in my desire and requirement that the underlying merits of my complaints be heard and adjudicated on by the Court.'
Mr Shepherd's witness statement is to the like effect. In paras 9 and 10 he said:
'In that regard, what Mr Eastaway and I had in mind was a hearing on the merits, that is, a hearing of the substantive application for judicial review, permission to apply for judicial review having been given. It was not in my contemplation that the application for permission to apply for judicial review would be subject to technical objections, and that the judicial review proceedings would fall at the first hurdle without Mr Eastaway's complaints about the disqualification proceedings being substantively considered.
What was envisaged was that if the merits of Mr Eastaway's contentions relating to the Carecraft procedure itself, including the issues of autrefois acquit and breach of the reasonable time provision in the Convention were heard on a substantive application, and disposed of in a way adverse to Mr Eastaway, and the appeal process exhausted (hence the use of the word "conclusion" in relation to the judicial review proceedings) then Mr Eastaway would agree to have the disqualification proceedings determined through the Carecraft procedure.'.
 Counsel for Mr Eastaway contends that these passages indicate a genuine mistake and are enough to justify the grant of the relief he seeks. I do not agree. On 8 September 1999 Mr Shepherd wrote to the Treasury Solicitor stating that once the Carecraft statement had been determined he would confirm in open correspondence that:
'if Mr Eastaway is unsuccessful in the judicial review proceedings he will sign or we will sign on his behalf the final draft Carecraft agreement and agree to a Carecraft hearing being listed as soon as possible.'
The undertaking was then redrafted by Mr Shepherd and sent to the Treasury Solicitor on 9 September as the basis for discussion. Later the same day Mr Shepherd confirmed that he had instructions from Mr Eastaway that he would give an undertaking in those terms. By a letter to the Treasury Solicitor dated 13 September Mr Shepherd confirmed that he had explained the effect of the undertaking to Mr Eastaway and enclosed a copy of the draft he had prepared signed by Mr Eastaway. In para 13 of his witness statement made on 2 February 2001 Mr Shepherd confirmed that he was aware of the two stages of an application for judicial review.
 In these circumstances it is clear that the mistake concerned the legal effect of the undertaking which had been drafted by Mr Eastaway's solicitor and explained by him to Mr Eastaway. The mistake had not been induced by the Secretary of State nor could it have been apparent to him. The circumstances are not such as would warrant setting aside a contract or refusing specific performance of it."
- On the third issue whether Mr Eastaway should be released from the Carecraft Undertaking the Vice-Chancellor said the following:
" I would add that even if the jurisdiction of the court to order the release of an undertaking had been entirely discretionary I would not have exercised such discretion so as to grant the release Mr Eastaway seeks. The undertaking was freely given. At all times Mr Eastaway had the advice of solicitors and counsel. At the time the undertaking was given the application for judicial review had been issued but permission to move had not been granted. Both the Secretary of State and the court acted in reliance on the undertaking by vacating the date for a hearing which had been fixed nine months before in a matter which had been started over ten years earlier. It is evident that Mr Eastaway accepts that if permission to move had been granted but judicial review had then been refused he would have been bound by his undertaking. I see no reason why he should be put into a better position because he was unsuccessful at an earlier stage."
- The Vice-Chancellor refused permission to appeal. Mr Eastaway applied for permission to the Court of Appeal, which refused permission on paper. Mr Eastaway renewed his application at an oral hearing on the 6th April 2001, at which the Court of Appeal again refused permission to appeal on the grounds that there had been no violation of Article 6. The Secretary of State thereupon sought to enforce the Carecraft Undertaking.
- On the 8th March 2001 Mr Eastaway commenced a further action for a declaration that the continuation of the Disqualification Proceedings would be contrary to Article 6. The Secretary of State applied to have these proceedings struck out, on the grounds that they raised identical issues to the application dismissed by the Vice-Chancellor the previous month. Mr Eastaway subsequently made three further applications. In the first application dated the 9th April 2001, he sought to be released from the Carecraft Undertaking; in the second application dated the 18th April 2001 he sought a stay or dismissal of the Disqualification Proceedings on the grounds that the Secretary of State should now accept from him a disqualification undertaking (which as from the 2nd April 2001 he was authorised to accept by amendments made to the 1986 Act) in place of the agreed "Carecraft" statement; in the third application dated the 24th April 2001, he applied for judicial review of the Secretary of State's refusal to accept his newly proffered undertaking. The issues raised by these applications centred upon whether grounds of unfitness should be set out in a schedule to the document containing the disqualification undertaking. Mr Eastaway had offered a disqualification undertaking without such a schedule, which offer the Secretary of State had refused to accept.
- On the 23rd May 2001 Patten J struck out Mr Eastaway's new action and dismissed his further three applications: Re Blackspur Group plc (No 3); Secretary of State for Trade and Industry v Davies (No 2)  BCLC 263. Patten J's decision in relation to the three applications was upheld by the Court of Appeal on the 13th September 2001:  EWCA Civ 1595;  2 BCLC 263. Meanwhile, on the 31st May 2001 Mr Eastaway signed the Disqualification Undertaking the offer of which was accepted by the Secretary of State on the 4th June 2001.
- After having entered into the Disqualification Undertaking, but before the question of the lawfulness of the Secretary of State's requirement of the schedule to that undertaking had been determined by the Court of Appeal, on 3rd August 2001 Mr Eastaway commenced the ECHR Proceedings in which he complained of a violation of the reasonable time provision in Article 6. On the 18th November 2003 the ECHR (Fourth Section) declared Mr Eastaway's application to be admissible and on the 20th July 2004 gave judgment in favour of Mr Eastaway. Its conclusion was as follows:
"….In all the circumstances, the Court does not consider that the proceedings against the applicant were pursued with the diligence required by article 6 § 1. There has accordingly been a violation of that provision, in that the applicant's "civil rights and obligations" were not determined within a reasonable time."
No pecuniary damage had been claimed but an award of €4,500 was made for nonpecuniary damage and €25,000 was awarded in respect of domestic and Strasbourg legal costs. The ECHR Judgment became final on the 20th October 2004 pursuant to Article 44(2) of the Convention and was satisfied by full payment to Mr Eastaway of €29,500.
- During the currency of the Disqualification Undertaking the court gave permission to Mr Eastaway to become a director (on the 9th June 2003) of the Chartered Institute of Directors and the Institute of Taxation and (on the 25th May 2004) of WJB Chiltern Group Plc. The Disqualification Undertaking expired in December 2005.
- The relief which Mr Eastaway claims on the Applications is as follows:
i) an order lifting the stay of the Disqualification Proceedings provided in the order of the 25th May 2001:
ii) an order dismissing the Disqualification Proceedings;
iii) an order that the Disqualification Undertaking be set aside;
iv) further or alternatively a declaration that the Disqualification Undertaking should not have been offered by Mr Eastaway or accepted by the Secretary of State.
- Before I consider whether there is jurisdiction to grant this relief and (if so) whether that jurisdiction should be exercised, I shall consider the grounds on which it is sought. The three grounds of complaint underlying the Applications are: (1) the breach of Article 6 established by the ECHR Judgment; (2) the error in this regard (and other alleged errors) in the judgment of the Vice-Chancellor on the Strike-Out Application; and (3) the alleged injustice to Mr Eastaway of allowing the Disqualification Proceedings and the (now expired) Disqualification Undertaking to cast a shadow over his life. I must consider each of these grounds in turn and their significance.
(a) Breach of Article 6
- Mr Eastaway contends that the breach of Article 6 established by the ECHR Judgment entitles him to the relief. Article 6 in its application to the determination of civil rights creates rights which, although related, are separate and distinct. There is the right to a fair and public hearing, a right to a hearing within a reasonable time, a right to a hearing by an independent and impartial tribunal established by law and a right to the public pronouncement of judgment. The consequence of a breach, or a threatened or prospective breach, of each of these rights is not necessarily the same. The core right is to a fair trial. In particular a breach of the right to a hearing within a reasonable time may ground a claim to a just and appropriate (and accordingly proportionate) remedy, but it will not entitle a defendant to a stay or dismissal of the proceedings against him unless there can no longer be a fair hearing or it would otherwise be unfair to continue with the proceedings against him: see Attorney General's Reference (No 2 of 2001)  2 AC 72 ("Attorney General's Reference") per Lord Bingham at paras 20-24). Where the breach of Article 6 lies merely in the failure to conduct the trial timeously, just recompense is needed in respect of the exposure of the defendant for longer than he should have been to the undesirable consequences of pending proceedings, but not in respect of the holding of the trial itself and its outcome can in nowise be impugned: Attorney General's Reference per Lord Nicholls paragraphs 40-41.
- On the Strike-Out Application the only right under Article 6 which Mr Eastaway claimed to have been violated was the right to a hearing within a reasonable time. There was no complaint that the delay had been such that there could be no fair trial of the Disqualification Proceedings or that it had occasioned collateral prejudice. This is quite plain on a reading of Rider B to the Application Notice (setting out as its only grounds the breach of the reasonable time provision in Article 6), the skeleton arguments before the Vice-Chancellor and the judgment of the Vice-Chancellor. The Vice-Chancellor states this specifically in paragraph 19 of his judgment and no complaint was (or could be) made in regard to this statement of the Vice-Chancellor on Mr Eastaway's unsuccessful application to the Court of Appeal for permission to appeal.
- Nonetheless Mr Collings, counsel for Mr Eastaway, has contended that in this regard the Vice-Chancellor got this fact wrong in his judgment. In support of this contention he asserts that in his oral submissions to the Vice-Chancellor he referred to the case of In re Manlon  Ch 136 ("Manlon"). In that case the Court of Appeal held that disqualification proceedings under the 1986 Act should be dismissed for want of prosecution even though a fair trial was still possible because there was serious collateral prejudice arising from inordinate and inexcusable delay in prosecuting the proceedings and that such prejudice was inherent in the delay. The fact that reference may have been made to Manlon does not go anywhere to establishing that it was argued before the Vice-Chancellor that there could not be a fair trial: indeed it points to the contrary for Manlon was not decided on the basis that there could be no fair trial. There is no basis for Mr Collings' submission that the Vice-Chancellor got it wrong: it is a submission which involves rewriting history. Likewise in the ECHR Proceedings Mr Eastaway's only complaint was of breach of the reasonable time provision and the only remedy which he sought and obtained from the ECHR was compensation for this breach. The breach of this right to a hearing within a reasonable time can in nowise impugn the continuation of the Disqualification Proceedings or their conclusion in the acceptance by the Secretary of State of Mr Eastaway's offer of the Disqualification Undertaking. It in no way supports Mr Collings' extravagant proposition that the Secretary of State in pursuing the Disqualification Proceedings or that the Vice-Chancellor or the Court of Appeal in allowing the proceedings to continue acted in a way that would inevitably lead to a breach of Article 6 and in a way that was accordingly incompatible with Mr Eastaway's Article 6 rights.
- There can have been no objectionable constraint placed on Mr Eastaway to make the offer. He had at all times the benefit of legal advice. Mr Eastaway says that he had no practicable alternative to making the offer because he could not afford the costs of a trial. That is a predicament to a greater or lesser extent faced by many litigants. It does not make the acceptance of his offer by the Secretary of State a violation of Article 6 or otherwise provide grounds for setting aside the Disqualification Undertaking.
- On receipt of the sums awarded by the ECHR Mr Eastaway received full and just satisfaction and Mr Eastaway ceased to be a victim of the breach. He could accordingly no longer bring proceedings or rely on the breach of Article 6 in any legal proceedings: see section 7 of the Human Rights Act 1998. In the circumstances I cannot see how the ECHR Judgment can of itself found any claim to the relief sought or any relief or how it can constitute a significant change of circumstances or special circumstance for this purpose.
(b) Error by Vice-Chancellor
- Mr Eastaway contends that, if the Vice-Chancellor had not erred in his view that there had been no breach of Article 6, he would (or at least should) have acceded to the Strike-Out Application. It is clear, even as it is common ground, that prior to the decision in Re Attorney General's Reference (and in particular at the time of the Strike Out Application) there was a common misunderstanding that, if there was a breach of Article 6 in respect of the right to a hearing within a reasonable time, the continuation of the proceedings thereafter would likewise constitute a breach of Article 6: see e.g. Dyer v. Watson  1 AC 379. The argument and hearing before the Vice-Chancellor proceeded on this basis and the Vice-Chancellor gave judgment accordingly. The Vice-Chancellor held that the delay did not constitute a breach of Article 6. The ECHR reached a different assessment and held that it did. Mr Eastaway submits that he is entitled to be placed in the same position as if the Vice-Chancellor had not erred in this regard and as if the Disqualification Proceedings had been dismissed and accordingly as if no Disqualification Undertaking had been offered or accepted.
- I think that there are insuperable obstacles to this approach (which involve a reversal of the decision of the Vice-Chancellor) posed by the doctrine of res judicata. But leaving that aside, it seems to me that there are two other insuperable obstacles in its way. The first obstacle is that, if the decision of the Vice-Chancellor is to be "corrected" by subsequent authoritative legal pronouncements, it has to be corrected not merely by the judgment of the ECHR, but also by the decision of the House of Lords in Re Attorney General's Reference. Accordingly whilst the Vice-Chancellor should have decided that there was a breach of Article 6 in respect of the delay of the trial, he should also have decided that the breach (in the absence of any case alleged or established that the delay prejudiced a fair trial) should not lead to the order for striking out that Mr Eastaway sought. He would accordingly have reached the same (correct) conclusion not to accede to the Strike-Out Application. The second obstacle is the Carecraft Undertaking.
- Mr Eastaway in paragraph 44 of his affidavit dated the 8th August 2005 in support of the Applications includes a passage in which he says that he seriously doubts whether after the lapse of time witnesses (including himself) could have properly remembered at a trial what had happened and therefore whether there could have been a fair trial. But that is no way to decide how that issue would have been decided if he had raised the issue on the Strike-Out Application. His silence on this issue at the time of the Strike-Out Application speaks louder than this hesitant expression of these doubts today. If Mr Eastaway had thought that the delay was such that there could be no fair trial, he should surely be expected to have said so. His silence in this regard (as I have said) was remarked upon by the Vice-Chancellor. But in any event Mr Eastaway had his day in court when he could have raised the issue and he deliberately decided not to do so. It is not for this court now to conjecture a successful outcome if he had raised it or to grant relief on that basis.
- The Vice-Chancellor refused to strike out the Disqualification Proceedings on the alternative ground that by entering into the Carecraft Undertaking Mr Eastaway had lost his right to seek an order to strike out on the ground of the Article 6 breach. For notwithstanding the delay and his contention that this delay constituted a breach of Article 6, Mr Eastaway had thereby agreed with the Secretary of State that the Disqualification Proceedings should proceed to trial on the summary Carecraft Procedure if his application for judicial review was unsuccessful. It was self-evident at the time (in particular to Mr Eastaway's lawyers) that his application for judicial review might result in an unsuccessful conclusion by reason of the refusal of permission to apply for judicial review or on its merits. When permission to apply was refused, the condition precedent to which the Carecraft Undertaking was subject was satisfied, as held by the Vice-Chancellor. Mr Collings submits that the Vice- Chancellor in reaching this conclusion made two errors. The first error attributed to him was that he wrongly held that Mr Eastaway had waived his rights under Article 6; that plainly there never was such a waiver, for the necessary knowledge on the part of Mr Eastaway was not present (citing Millar v. Dickson  1 WLR 1615); and this is implicit in the ECHR Judgment which could not have been given in favour of Mr Eastaway if there had been a waiver. The answer to this argument is that the word "waiver" in the Vice-Chancellor's judgment is used in a loose non-technical sense meaning only that Mr Eastaway had entered into a binding agreement with the Secretary of State for the trial to proceed as provided in the Carecraft Undertaking and that this agreement was totally inconsistent with the relief claimed by the Strike-Out Application for delay in breach of Article 6. That this is what the Vice-Chancellor meant is made plain in his statement in paragraph 4 of his judgment of the issues before him (recited in paragraph 21 above) and in particular (as the second issue) whether Mr Eastaway was precluded by the Carecraft Undertaking from obtaining the relief that he was seeking. The Vice-Chancellor's decision in this respect is plainly correct.
- The second error attributed to the Vice-Chancellor was in holding that Mr Eastaway was bound by the consent order containing the Carecraft Undertaking and he prays in aid the subsequent judgment of Neuberger J in Ropac The Times 21 June 2000 (referred to without deciding its correctness in Di Placito v. Slater  1 WLR 1605 at 1615). The principle is clear that the parties by a consent order may inform, but they cannot circumscribe or preclude, the exercise by the court of its case management powers (and in particular its powers regarding the imposition and release of time limits conferred by the Civil Procedure Rules). I do not think that the principle could or should invalidate the informed and sensible decision of the parties by the consent order to adopt the Carecraft Procedure. There are no such special circumstances as could justify reopening the matters concluded by the consent order. That is so whether the Carecraft Undertaking was final (as held by the Vice- Chancellor) or interlocutory. In any event at its highest on this issue Mr Eastaway's case could go no further than to establish that the Vice-Chancellor had a discretion to release Mr Eastaway from the Carecraft Undertaking and, as the Vice-Chancellor held on the third issue, he did not think it right to exercise his discretion to release Mr Eastaway from the undertaking and he was fully entitled to reach that conclusion.
- Accordingly in my judgment there is no basis to challenge the decision of the Vice- Chancellor and Mr Eastaway's challenge to it affords no basis for the grant of the relief claimed.
(c) Removal of Stigma
- The third ground advanced is that the Disqualification Undertaking (though expired) places a continuing shadow over the life, reputation and professional future of Mr Eastaway, that there is no public interest in allowing that state of affairs to continue and that the shadow ought now to be removed. I do not think that it accords with the public interest (even if there were jurisdiction to do so) to accede to this invitation to write out of history unattractive episodes in Mr Eastaway's past. These episodes do cast a shadow and are inevitably of concern to the professional bodies of which Mr Eastaway is a member, for those bodies must have a responsibility to maintain public confidence in their members and to protect the public. Whether and, if so, what action is required for these purposes in the light of the Disqualification Undertaking and attached schedule of admitted facts is a matter for them to decide. The facts that Mr Eastaway has "served his term" under the Disqualification Undertaking and has now a high reputation do not wipe the slate clean or obviate the interest of the professional bodies and the public in knowing what happened and (in the light of any mitigating circumstances) drawing their own conclusions and acting accordingly.
BASES OF JURISDICTION
- I turn to the bases of jurisdiction on which the heads of relief are sought.
(a) Liberty to Apply
- The first basis relied on by Mr Collings is the fact that the order dated the 25th May 2001 concluding the Disqualification Proceedings provides for a stay and grants general liberty to apply. He argued that this provision enables the court to revisit and reconsider the terms of the order. The usual order when proceedings under the 1986 Act are concluded by the offer and acceptance of a disqualification undertaking is, not a stay, but a discontinuance but without the usual consequences as to costs of a discontinuance: see para 28.1 of the Practice Direction: Directors Disqualification Proceedings. The first question is whether the fact that there was a stay and general liberty to apply is significant and the second is whether the stay and liberty to apply has the legal effect attributed to it.
- I turn to the first of those questions. When Mr Eastaway made his offer of the Disqualification Undertaking the Secretary of State was only willing to accept it on terms that there should be attached to the order containing the undertaking a schedule of unfit conduct which Mr Eastaway did not dispute. Mr Eastaway challenged the right of the Secretary of State to insist on this requirement. On the 23rd May 2001 Patten J upheld the right of the Secretary of State to insist on the requirement but he gave permission to Mr Eastaway to appeal. When it came to drawing up the order made by Patten J dated the 25th May 2001 it could not be said with certainty whether the Disqualification Proceedings would continue to trial. The Disqualification Proceedings would be discontinued if the Court of Appeal dismissed the appeal, for Mr Eastaway was willing to conclude the proceedings by giving the Disqualification Undertaking containing the required schedule if the decision of Patten J that the Secretary of State was entitled to insist on the schedule was undisturbed. But if the appeal succeeded and the Court of Appeal held that the Secretary of State was not entitled to insist on the schedule, the Secretary of State was not prepared to accept the Disqualification Undertaking without the schedule and the Disqualification Proceedings would proceed to trial. It was for this reason that the order, instead of directing a discontinuance, directed a stay with liberty to apply, so that, if the decision of Patten J was reversed, instead of a continuing stay (which would have very much the legal effect of a discontinuance) the parties could apply to lift the stay and obtain directions for trial. The Court of Appeal in fact affirmed the decision of Patten J and accordingly no application was made to lift the stay. The answer to the first question is accordingly that (in the events which happened) there is no relevance in the fact that the order directed a stay instead of a discontinuance.
- I turn now to the second question whether the provision for the stay and liberty to apply is a vehicle available to Mr Eastaway to revisit the orders made and in particular the Disqualification Undertaking. In my judgment an order for a stay and the grant of general liberty to apply may enable a party to apply to the court to enforce the order made and to make the necessary adjustments to the order to meet foreseen or unforeseen circumstances (e.g. as in this case a successful appeal by Mr Eastaway against Patten J's judgment), but not to review the judgment itself and the relief granted. The liberty to apply is the vehicle (if application were made) for the substitution (in place of the stay) of a direction for a discontinuance of the Disqualification Proceedings. The Secretary of State has expressed his willingness to agree to this (purely cosmetic) exercise if requested by Mr Eastaway: it would have no legal consequences. The ECHR Judgment is not a relevant event: it does not impugn the proceedings and has been fully satisfied. There is no other relevant change of circumstances. The liberty to apply does not afford jurisdiction (in substance) to reverse the decision of the Vice-Chancellor.
(b) Section 8A of the 1986 Act
- Section 8A of the Company Directors Disqualification Act 1986 ("the 1986 Act") provides as follows:
"(1) The court may, on the application of a person who is subject to a disqualification undertaking„ź
(a) reduce the period for which the undertaking is to be in force, or
(b) provide for it to cease to be in force.
(2) On the hearing of an application under subsection (1), the Secretary of State shall appear and call the attention of the court to any matters which seem to him to be relevant, and may himself give evidence or call witnesses…."
- In my judgment no order can be made under either subsection unless at the date of the order the disqualification undertaking continues to be in force. The application has to be made by a person "who is subject to a disqualification undertaking" and the jurisdiction does not extend to invalidating the undertaking from the start but is limited to reducing the period for which it "is to be in force" or providing for it to "cease to be in force". If the disqualification undertaking has already expired at the date of the proposed order, there is no longer any scope for the making of any order under the section. The rationale for the section is expressed in the heading of the section: "Variation etc of the disqualification undertaking" and it is not "rescission".
- Mr Collings contends that the contrary is to be inferred from terms of subsection (1)(b): that if the jurisdiction is limited to reducing the period of an outstanding disqualification undertaking, there can be no purpose in supplementing the provisions of subsection (1)(a) with the provisions of subsection (1)(b). The explanation however for supplementing subsection (1)(a) with the provisions of subsection (1)(b) is quite different. Under section 1A(2) of the 1986 Act the minimum period which may be specified in a disqualification undertaking accepted under section 7(2A) of the 1986 Act is two years. Accordingly in exercise of its jurisdiction under section 8A(1)(a) to reduce the period for which such an undertaking is in force, the court is precluded from reducing the period below two years and accordingly, if an application is made to reduce the period of the disqualification less than two years after the undertaking was given, exercise of the power to reduce the period for which the undertaking is to be in force must leave the undertaking in force until the two years have expired. Section 8A(1)(b) however in such a situation enables the court instead to direct that the undertaking (whether or not two years have expired) shall cease to be in force: see Directors' Disqualification and Bankruptcy Restrictions (2005) by Walters and Davis-White.
- Section 8A of the 1986 Act accordingly does not authorise the grant of the relief sought, even if (which is not the case) there was any sufficient reason or exceptional circumstance justifying its exercise.
- The issue before me was not argued before Hart J in INS Realisations Limited  EWHC 135 (Ch) ("INS") but he clearly inclined to the view which I have reached after full argument that section 8A of the 1986 Act does not empower the court to annul an undertaking from the start.
(c) Rule 7.47(1) of the Insolvency Rules
- Rule 7.47(1) of the Insolvency Rules confers upon the court an unfettered jurisdiction to review, vary or rescind disqualification orders and undertakings. Special circumstances have to be shown to reopen such undertakings and orders: see INS. As I have already made plain there are in my judgment no such special circumstances and there is no basis for reopening the Disqualification Undertaking.
(d) Declaratory Relief
- The basis for Mr Eastaway's claim to the declaration is to give effect to the ECHR Judgment. As I have already held, his entitlement under the ECHR judgment is already fully satisfied and the right which he established there could in no wise justify the declaration sought. Further the jurisdiction of the court to grant declarations can only be exercised in respect of legal rights and duties. The declaration sought that Mr Eastaway "should" not have offered the undertaking cannot sensibly mean that he was under a legal duty not to offer it. What it does mean is unclear. All that is clear is that it does not form the proper subject matter of a declaration. In any event the declaration sought is wrong, for it is quite clear that Mr Eastaway was legally entitled to offer the Disqualification Undertaking and the Secretary of State was under the 1986 Act legally entitled to accept it. The Secretary of State fairly and properly considered that the public interest was being given effect to by the prosecution of the Disqualification Proceedings and that it was expedient in the public interest to accept the Disqualification Undertaking.
- Mr Eastaway is not entitled to the relief claimed. I accordingly dismiss the Application. It is to be hoped that this marathon litigation is now at last at an end.
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