Secretary of State for Trade & Industry v Aviss & Ors

Secretary of State for Trade & Industry v Aviss & Ors

Mr Aviss and Mr Berry acted as shadow directors of all three companies and dictated company policy, particularly regarding the centralisation of treasury and diversion of funds to other companies to the detriment of creditors. Their conduct demonstrated unfitness to be concerned in the management of a company. Mr Berry's breach of an existing disqualification order was an aggravating factor.

Parties
Claimant: Secretary of State for Trade and Industry; Defendant: John Stewart Aviss; Defendant: William John Berry; Defendant: Philip David Tonkin; Defendant: David Henry Walker
Jurisdiction
England and Wales
Judgment Date
20 July 2006
Procedural Posture
Company Directors Disqualification / Judgment After Trial
Outcome
Disqualification orders granted
Legal Topics
Directors' Disqualification, Shadow Directors, De Facto Directors, Corporate Governance, Fiduciary Duties, Trading to the Detriment of Creditors
Company Law Insolvency Law Directors' Disqualification Shadow Directors De Facto Directors Corporate Governance Fiduciary Duties Trading to the Detriment of Creditors

Case Brief

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Parties

Secretary of State for Trade and Industry

Claimant

John Stewart Aviss

Defendant

William John Berry

Defendant

Philip David Tonkin

Defendant

David Henry Walker

Defendant

Procedural Posture

Company Directors Disqualification / Judgment After Trial

Legal Issues

  1. 1 Whether Mr Aviss and Mr Berry acted as de facto or shadow directors of Mea Corporation Ltd, Projects, and CJB.
  2. 2 Whether their conduct rendered them unfit to be concerned in the management of a company under the Company Directors Disqualification Act 1986.
  3. 3 Whether the proceedings were an abuse of process given Mr Berry's existing disqualification.

Ratio Decidendi

Mr Aviss and Mr Berry acted as shadow directors of all three companies and dictated company policy, particularly regarding the centralisation of treasury and diversion of funds to other companies to the detriment of creditors. Their conduct demonstrated unfitness to be concerned in the management of a company. Mr Berry's breach of an existing disqualification order was an aggravating factor.

Court Disposition

Disqualification orders granted

Orders

  • Mr Aviss disqualified from being a director for seven years.
  • Mr Berry disqualified from being a director for eleven years.