Wednesday 13 August 2008

UK: England and Wales: CPR r 71.2 and the director of a corporate director

Part 71 of the Civil Procedure Rules contains rules which, to quote from Rule 71.1, "provide for a judgment debtor to be required to attend court to provide information, for the purpose of enabling a judgment creditor to enforce a judgment or order against him". Rule 71.2 provides that a judgment creditor may apply to the court for an order requiring an officer of a company or other corporation to attend court to provide information. Where that officer is a corporate director, does Rule 71.2 apply to the directors of the corporate director? It does not according to a unanimous Court of Appeal in Masri v Consolidated Contractors International Co SAL and others (No 4) [2008] EWCA Civ 876.

In the course of his judgment, Sir Anthony Clarke MR observed (para. [20]):
[It is argued] that, unless 'officer' is construed as including a director of a corporate director of the judgment debtor, companies will ensure that, so far as possible, they have corporate entities and not natural persons as directors. I very much doubt whether such a construction would be likely to have that effect. In any event, although I can see that it might be desirable for the rule to be widened to include such a case, I am not persuaded that 'officer' of the judgment debtor in the rule in its present form can properly be construed so as to include an officer of a corporate director of the judgment debtor".

Note: One of the changes being introduced by the Companies Act (2006) is the requirement that all companies must have at least one director who is a natural person (see Section 155, which is brought into force on 1 October 2008 by the Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007).

No comments: