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which results in a breach of his or her duty to be kept properly informed or to trade at
the expense of the company or jeopardise money he ought not to use, he is unfit
within the meaning of the section. 290
Dillon LJ in Re Sevenoaks Stationers (Retail) Ltd 291 found that statements such as
‗lack of commercial probity; ‗extreme gross negligence‘ or ‗total incompetence‘ may
be helpful in identifying circumstances in clear cases of unfitness. 292 In other cases, it
would result in obscuring the true question to be tried, which is the question of facts.
Hence the phrase ‗makes him unfit to be concerned in the management of a
company‘ should be given the ordinary meaning of the English language. 293
The Court of Appeal in Secretary of State and Industry v Gray 294 held that whether
a person‘s conduct is "unfit" should be "viewed cumulatively, and taking into
account any extenuating circumstances, [it] has fallen below the standards of probity
and the competence appropriate for persons fit to be directors of companies." This
judgment denotes an objective, reasonable person standard. 295 In Re Living Images
Ltd, 296 the court had to decide whether giving preference constitutes unfitness and
held that in order to justify the order for disqualification, the extent of the director‘s
responsibility for the company giving it must be taken into account, namely it had to
be shown that the director had acted in a way which was blameworthy. The courts
are also required to have regard to matters mentioned in Part 1 of Schedule 1. 297
290 Re Stanford Services Ltd and others [1987] BCLC 607 at 617.
291 [1991] BCLC 325.
292 Re Sevenoaks Stationers (Retail) Ltd [1991] BCLC 325 at 230.
293 Re Sevenoaks Stationers (Retail) Ltd [1991] BCLC 325 at 239.
294 [1995] 1 BCLC 276 at 284.
295 See also Secretary of State and Industry v Goldberg [2004] 1 BCLC 597.
296 [1996] 1 BCLC 348 at 357.
297 See section 9 of the UK Company Directors Disqualification Act 1986.
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