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Secretary of State for Trade and Industry v Deverell

[2001] Ch 340 (CA)

Case summary last updated at 21/01/2020 21:54 by the Oxbridge Notes in-house law team.

Judgement for the case Secretary of State for Trade and Industry v Deverell

Issue was definition of ‘shadow director’. Held:
1)     A shadow director must have real influence in the corporate affairs of the company.
Ø  But not necessary that that influence be exercised over all of company’s corporate activities.
2)     To show D is a shadow director, is not necessary to show that in face of directions from D the board either:
i)         surrendered its discretion; or
ii)       subservient role
-        thus no need for board to be the ‘puppet’ of D
3)     D can be shadow director even if he does not attempt to hide in shadows
Ø  i.e. someone can be shadow director even if they are prominently involved with company
·       Advice (other than professional advice) is capable of constituting ‘directions or instructions’, as per definition in Act.
·       How widely term ‘shadow director’ is construed may vary depending upon statutory context.
Ø  i.e. stricter construction may be appropriate in quasi-criminal provisions

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