Secretary of State for Business and Trade v Sekhon (Re Combat Construction Ltd - Company Directors Disqualification Act 1986) [2024] EWHC 674 (Ch) (28 March 2024)

Secretary of State for Business and Trade v Sekhon (Re Combat Construction Ltd - Company Directors Disqualification Act 1986) [2024] EWHC 674 (Ch) (28 March 2024)

The court found, on the balance of probabilities, that Mr Sekhon as sole director caused the company to trade at HMRC's expense by maintaining payments to other creditors while failing to account for and pay CIS tax liabilities, and that his defence regarding gross payment status and lack of access code was not credible. This conduct fell below the standards of probity and competence required of company directors and constituted unfit conduct under the Company Directors Disqualification Act 1986. The VAT claim was not sufficiently pleaded or evidenced to establish unfit conduct.

Citation
[2024] EWHC 674 (Ch)
Parties
Claimant: The Secretary of State for Business and Trade; Defendant: Daniel Singh Sekhon
Jurisdiction
England and Wales
Judgment Date
28 March 2024
Procedural Posture
Company Directors Disqualification / Final Judgment
Outcome
disqualification order granted against Daniel Singh Sekhon under section 6 of the Company Directors Disqualification Act 1986.
Legal Topics
Director Disqualification, Unfit Conduct, Discriminatory Creditor Payment, Construction Industry Scheme Tax, VAT Liability
Company Law Insolvency Law Director Disqualification Unfit Conduct Discriminatory Creditor Payment Construction Industry Scheme Tax VAT Liability

Case Brief

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Parties

The Secretary of State for Business and Trade

Claimant

Daniel Singh Sekhon

Defendant

Procedural Posture

Company Directors Disqualification / Final Judgment

Legal Issues

  1. 1 Whether Mr Sekhon's conduct as director of Combat Construction Limited constituted unfit conduct under the Company Directors Disqualification Act 1986 by trading to the detriment of HMRC via discriminatory payment practices.
  2. 2 Whether the evidence established a deliberate policy of discrimination against HMRC in favour of other creditors.
  3. 3 Whether the VAT claim was sufficiently pleaded and evidenced to constitute unfit conduct.

Ratio Decidendi

The court found, on the balance of probabilities, that Mr Sekhon as sole director caused the company to trade at HMRC's expense by maintaining payments to other creditors while failing to account for and pay CIS tax liabilities, and that his defence regarding gross payment status and lack of access code was not credible. This conduct fell below the standards of probity and competence required of company directors and constituted unfit conduct under the Company Directors Disqualification Act 1986. The VAT claim was not sufficiently pleaded or evidenced to establish unfit conduct.

Court Disposition

disqualification order granted against Daniel Singh Sekhon under section 6 of the Company Directors Disqualification Act 1986.

Orders

  • Daniel Singh Sekhon is disqualified from acting as a director or being concerned in the management of a company for a period to be determined.
  • Costs awarded to the Secretary of State.