Kerry Underwood

PERSONS ABROAD ORDERED TO PRODUCE DOCUMENTS UNDER SECTION 236(3) INSOLVENCY ACT 1986

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Wallace v Wallace [2019] EWHC 2503 (Ch) (25 September 2019)

the High Court held that the liquidator of an English or Welsh company was entitled to an order against a former bookkeeper of the company, resident in Ireland, to produce company documents in his control or possession, while noting that there were conflicting decisions as to the jurisdiction of the court to order the production of documents or the supply of information under section 236(3) of the Insolvency Act 1986.

In

Re MF Global UK Ltd [2015] EWHC 2319 (Ch)

the High Court held that it did not have jurisdiction to make an order against persons not in the jurisdiction but in

Official Receiver v Norriss [2015] EWHC 2697

the High Court held that it could make an order for the production of documents and information against a person abroad under section 236(3).

The court followed Norriss, holding that the power to require the production of documents under section 236(3) should be regarded as a standalone power separate from the power to summon a person out of the jurisdiction under section 236(2): section 236(3) was less invasive than section 236(2).

The court should take account of the international dimension in its assessment and be wary of making orders seeking to regulate the conduct of third parties abroad in respect of matters having no real connection with the jurisdiction or which involved excessive or exorbitant exercise of jurisdiction.

Here, the bookkeeper held critical information and could not reasonably complain about having to supply information, and as the company’s centre of main interests was in the UK, the order of the court would be recognised and enforced in Ireland under the Insolvency Regulations 2000.

The court therefore had a legitimate interest in regulating the bookkeeper’s conduct abroad and in requiring him to make documents and information available to the liquidator.

Section 236 is headed

Enquiry into company’s dealings, etc“,

and provides relevantly as follows:

“(1)  This section applies as does section 234; and it also applies in the case of a company in respect of which a winding-up order has been made by the Court in England and Wales as if references to the office-holder included the official receiver, whether or not he is the liquidator.

(2) The court may, on the application of the office-holder, summon to appear before it –

(a)  any officer of the company,

(b) any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or

(c) any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company.

(3) The court may require any such person as is mentioned in sub-section 2(a) to (c) to submit to the court an account of his dealings with the company or to produce any books, papers or other records in his possession or under his control relating to the company or the matters mentioned in paragraph (c) of the sub-section.””

Written by kerryunderwood

October 7, 2019 at 8:19 am

Posted in Uncategorized

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