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11.4.2.2 Court’s Order
Section 6 of the CDDA empowers the courts to impose a disqualification for a
minimum period of two years and a maximum period of 15 years. 314 The court has to
impose a mandatory minimum period of two years if the conditions laid down in the
section are fulfilled. 315 Section 6(1)(b) entitles the court to order disqualification
either by reference to a director‘s conduct as director of the insolvent company alone
or by reference to his conduct of other companies as well. The section does not give
the court discretion to refuse to make a disqualification order on the basis that the
conduct of a director in relation to companies other than the insolvent ones is
appropriate. 316
The maximum period of disqualification a court can impose on a person who had
been found liable to contribute to the company under section 213 or section 214 of
the Insolvency Act 1986, is 15 years. 317 The difference between section 6 and section
10 in this aspect is under section 10, where the court, on its own initiative, can
impose the disqualification order on the director and there is no mandatory minimum
period of two years.
In Australia, section 206C does not provide any limitation on the period of
disqualification. This is evident when the section merely states that "the court may
disqualify a person" and does not impose any specific period. Thus, it is possible to
impose a permanent disqualification on directors as seen in the case of Australian
Securities and Investments Commission v White. 318 In contrast, under section 206D,
the maximum period a court can disqualify a person is seven years as seen in the
314 Section 6 (4) of the UK Company Directors Disqualification Act 1986.
315 Re Bath Glass [1988] BCLC 329 at 333.
316 Re Bath Glass [1988] BCLC 329 at 333.
317 Section 10(2) of the UK Company Directors Disqualification Act 1986.
318 (2006) 58 ACSR 261; see also Australian Securities and Investments Commission v Maxwell
(2006) 59 ACSR 373 where one of the directors was imposed with permanent disqualification.
387