Court of Appeal

Published November 10, 2008

Secretary of State for Business, Enterprise and Regulatory Reform v Aaron and Others

Before Lord Justice Buxton, Lord Justice Keene and Lord Justice Thomas

Judgment October 16, 2008

In company director disqualification proceedings, the Secretary of State for Business, Enterprise and Regulatory Reform could not rely on findings of fact by the Financial Ombudsman Service but he could rely on facts and opinions expressed by the Financial Services Authority.

The Court of Appeal so stated dismissing an appeal by the defendants, David Meyer Aaron, Andrew Cameron Jones and Michael Meyer Aaron, from the dismissal by Mr Thomas Ivory, QC, sitting as a deputy judge of the Chancery Division ([2008] EWHC 2467 (ChD)) of their application for an order that the secretary of state reswear his evidence to omit various matters in his action under the Company Directors Disqualification Act 1986.

Mr Edward Bannister QC for the defendants; Mr Guy Newey, QC and Mr Andrew Westwood for the secretary of state.

LORD JUSTICE THOMAS said that it was clearly established that in disqualification proceedings under the 1986 Act that there was an implied exception to the strict rules of evidence on hearsay evidence, opinion evidence and the rule in Hollington v Hewthorn ([1943] 1 KB 587) against admitting hearsay evidence.

On an examination of the schedules produced in relation to the Financial Services Authority report and the reliance placed on the decisions of the Financial Ombudsman Service, there was no sense in trying to excise parts of the documents before they were put before the court making the determination.

The Financial Ombudsman Service decisions contained much that was simply a recital of the evidence given by the complainants; that was admissible as hearsay under the Civil Evidence Act 1995.

But those decisions also contained findings which were inadmissible under the rule in Hollington v Hewthorn and fell outside the scope of the implied exception. The judge at the trial would simply ignore findings of fact in the documents not produced under the statutory scheme in the way judges were these days well used to doing.

To do otherwise would be to ignore the warning highlighted by Lord Woolf, Master of the Rolls in Re Westmid Packing Services Ltd ([1998] 2 All ER 124, 134-5) as to the dangers of an overelaborate overtechnical approach.

Lord Justice Keene and Lord Justice Buxton agreed.

Solicitors: Edwin Coe LLP; Howes Percival.

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