The Secretary of State for Business Innovation and Skills v Warry

The Secretary of State for Business Innovation and Skills v Warry

Mr Warry was found unfit to be concerned in the management of a company due to gross negligence and total incompetence in discharging his duties, particularly failing to conduct proper due diligence in a sector known for MTIC VAT fraud, though he did not knowingly participate or wilfully shut his eyes to the fraud.

Parties
Claimant: Secretary of State for Business Innovation and Skills; Defendant: William Nicolas Warry
Jurisdiction
England and Wales
Judgment Date
24 February 2014
Procedural Posture
Director's Disqualification Application / Judgment After Contested Trial
Outcome
Director disqualified for 6 years; costs awarded to claimant.
Legal Topics
Director's Disqualification, MTIC VAT Fraud, Gross Negligence, Due Diligence, Unfitness to Manage Company
Company Law Insolvency Law Tax Law Director's Disqualification MTIC VAT Fraud Gross Negligence Due Diligence Unfitness to Manage Company

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Parties

Secretary of State for Business Innovation and Skills

Claimant

William Nicolas Warry

Defendant

Procedural Posture

Director's Disqualification Application / Judgment After Contested Trial

Legal Issues

  1. 1 Whether Mr Warry knew or should have known that Chapter 6 participated in transactions connected with fraudulent evasion of VAT
  2. 2 Whether Mr Warry allowed Chapter 6 to participate in such transactions
  3. 3 Whether Mr Warry caused or allowed Chapter 6 to make wrongful claims to recover input tax

Ratio Decidendi

Mr Warry was found unfit to be concerned in the management of a company due to gross negligence and total incompetence in discharging his duties, particularly failing to conduct proper due diligence in a sector known for MTIC VAT fraud, though he did not knowingly participate or wilfully shut his eyes to the fraud.

Court Disposition

Director disqualified for 6 years; costs awarded to claimant.

Orders

  • Mr Warry disqualified from acting as director for 6 years under section 6 of the Company Directors Disqualification Act 1986.
  • Mr Warry to pay Secretary of State's costs, subject to detailed assessment on the standard basis if not agreed.