CASE SUMMARIES 21 August 1995

The following notes of cases were prepared by reporters of the All England Law Reports.

Company Director

Re Richborough Furniture Ltd; ChD (Timothy Lloyd QC, dep J) 31 July 1995.

Section 6(1) of the Company Directors' Disqualification Act 1986, which referred to a person being or having been "a director" and to his conduct "as a director", covered a case where a person had acted as a director even though not so appointed, validly or at all. For him to be disqualified under s 6 as a de facto director, there had to be clear evidence that he had been either the sole person directing the affairs of the company (or acting with others equally lacking valid appointment) or that he was acting on an equal footing with other, true directors. If it was unclear whether his acts were referable to an assumed directorship, or to some other capacity such as shareholder, he was entitled to the benefit of the doubt.

Philip Jones (Treasury Solicitor) for the Secretary of State for Trade and Industry; Edward Bannister QC (Mills & Reeve) for the third respondent; first and second respondents in person.

'Expedition'

R v Cardiff Crown Court, ex p Reeves; ex p Hassan & ors; QB Div Ct (Kennedy LJ, McCullough J) 23 June 1995.

The use by a Crown Court judge, when extending custody time limits at the request of the prosecution, of the words "due diligence", instead of the words "due expedition" used in s 22(3) of the Prosecution of Offences Act 1985, was unobjectionable since it was clear from his judgment as a whole that he addressed himself to the correct test.

Andrew R Taylor (Lloyd Rowe & Trudy McBride, Cardiff) and Nigel Ley (Jonathan Brierley, Penarth) for the various applicants; Stephen Hopkins (CPS, Cardiff) for the respondent.

Insolvency

Re a Debtor (87 of 1993) No 2; ChD (Rimer J) 27 July 1995.

An application to the court might be made under s 262 (1)(b) of the Insolvency Act 1986, on the ground that "there has been some material irregularity at or in relation to [a creditor's] meeting", where there had been a material irregularity in a debtor's proposal or statement of affairs.

Simon Barker (Rowe & Maw, for Stockdale & Reid, North Shields) for the applicants; Philip Bartle (Philip Jackson & Co, Newcastle upon Tyne) for the debtor; Andrew Rigney (Manches & Co) for the supervisor.

Slip rule

Re Brian Sheridan Cars Ltd; ChD (David Neuberger QC, dep J) 24 July 1995.

The slip rule could be relied on to correct an order where the form of the order reflected the form of the Official Receiver's summons and was sought to be corrected on the ground that an error of law was made when its terms were agreed between counsel and passed and entered by the court. The court had jurisdiction to order that a disqualification order drawn up on 1 July 1994 be amended to comply with the provisions of s 1(1)(a) to (d) of the Company Directors' Disqualification Act 1986.

Malcolm Davis-White (Treasury Solicitor) for the Official Receiver; J McLinden (Mackrell Turner Garrett) for the respondent.

Tenancy

Proudred Ltd v Microgen Holdings plc; CA (Butler-Sloss, Aldous, Schiemann LJJ) 7 July 1995.

In the absence of any other act evidencing an intention to resume possession, a landlord's request for the return of the keys of the demised premises and his retention of the keys for six days, in the context of leisurely correspondence between him and the tenant's receiver over the future of the lease, was not of itself sufficient to constitute acceptance by the landlord of the surrender of the lease by the tenant.

Everything which was done was perfectly explicable in the context of a situation in which there was no intention to accept a surrender until after the grant of a new lease, which was thought to be imminent.Since the existing lease had not been surrendered, a surety bound by a covenant thereunder remained liable for rent owed by the tenant.

Kirk Reynolds QC (Cumberland Ellis Peirs) for the surety, Microgen; Jonathan Brock (Simpkins Partnership) for the landlord, Proudred; the tenant did not appear.

VAT

Customs & Excise Commrs v Dennis Rye Ltd; QBD (McCullough J) 25 July 1995.

The apportionment of residual VAT paid by a developer in 1990 and 1991 of supplies used or to be used for both taxable and non-taxable supplies pursuant to r 30(1)(d) of the VAT (Gen) Regs 1985 was not to include tax paid on the acquisition of two potential building sites. To include the two sites would distort the apportionment that had to be made. Simply because tax had been paid on the acquisition of the two sites in the accounting periods in question, it did not follow that the supplies in respect of which input tax was claimed in those periods were used to any extent in making taxable supplies. (The relevant regulations were substituted from April 1992, altering the basis on which apportionment was to be made).

Paul Lasok QC (Customs & Excise) for the Crown; P Whipple (Shelleys, Maidstone) for the taxpayer.