The Company Director is not the Company
The Company Director is not the Company
Ward & Rider Solicitors have dealt with a family law case recently that fell squarely within the established common law doctrine that a company is a separate legal entity. This doctrine is recognised within the ancillary relief law relating to divorce.
It involved a Managing Director of a large company whose wife, our opponent, sought disclosure of specific company accounts as part of her claim for financial provision against the husband. She was highly critical of the husband. She continually alleged he was being obstructive in disclosing his financial means. As Company Director she alleged that he could simply let her have the paperwork. The Co-Directors felt the information sought by the wife was of a highly commercially sensitive nature and although our client, as Managing Director, had sight of this information they refused to allow the husband to release it to the wife in her ancillary relief proceedings. In fact, the Company threatened the husband with disciplinary action if he went against the Co-Directors' wishes.
The wife argued that we were being obstructive in not releasing the company information. The husband argued that, if he did, he ran the risk of being fired. The only solution would be if the company was ordered to produce the information by a Judge on an application during the ancillary relief case.
The husband did not want to be criticised. He wanted to disclose everything so that he could settle the financial case. We offered to join forces with the wife in her application against the company for an order for production.
The wife's application, supported by us, was opposed by the company who instructed their own legal team. Two interim hearings took place and the company eventually reached a compromise with the wife. A fair amount of company information was ordered to be produced, by consent, and this enabled the parties to eventually settle the case by way of a consent order.
The husband was not in any way at fault for the company information not being released. He could not be criticised for taking the position he did by not releasing the information merely upon request. He would have suffered personal consequences if he had. The wife had to accept, therefore, that he was not being obstructive.
The whole episode was costly and time consuming, involving three sets of solicitors and barristers and two interim hearings. However, had the husband not been advised by us to take this position, he would have suffered dire personal consequences at the hands of the company as well as the cost to him, financially and emotionally, of his divorce.
