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Persons resident abroad can be ordered to produce documents under the Insolvency Act 1986

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13/11/2019

The High Court was asked to consider whether it could order a person in Ireland to produce documents under section 236(3) of the Insolvency Act 1986 in relation to the liquidation of an English company.

In Wallace v Wallace [2019] EWHC 2503 (Ch), the High Court has held that the liquidator of an English company was entitled to an order against a former book-keeper of the company, resident in Ireland, to produce documents of the company in his control or possession.

Previously there have been conflicting decisions on 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 (Section 236).

In Re MF Global UK Ltd [2015] the High Court held that it did not have jurisdiction to make an order under Section 236 against persons not in the jurisdiction. However in Official Receiver v Norriss [2015] the High Court held that it could make an order for the production of documents and information against a person abroad under Section 236.

In the current case, the court followed Norriss, and held that the liquidator was entitled to an order delivering up documents. On the facts, the book-keeper held critical information and could not reasonably complain about having to supply information. The company’s centre of main interest was in the UK and the order of the court would be recognised and enforced in Ireland. The court therefore had a legitimate interest in regulating the book-keeper’s conduct abroad and in requiring him to make documents and information available to the liquidator.

The judgment highlighted the following two issues:

  • the power to require the production of documents under Section 236 should be regarded as a standalone power separate from the power to summon a person out of the jurisdiction (section 235)
  • 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.

WM comment

The decision is a useful addition to case law on the extra-territorial application of Section 236. It is now clearer than before that jurisdictional reach under Section 236 must be considered separately from the power to summon a person to appear before the court under section 235(2).

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