Production of documents

Green v BDO Stoy Hayward LLP ChD TLR 8 November

BDO prepared an audit report for the flotation of a company in 1996. In 1997 the company shares were suspended and BDO resigned as auditors, although confirming that there were no suspicions of impropriety. In April 1998 the company entered into compulsory liquidation. In 2004 a new liquidator issued an application under s236 of the Insolvency Act 1986 that BDO produce all filed papers concerning the company. It declined to do so on the ground that it had been over six years since liquidation, which had occurred after it had resigned as auditors, and no explanation had been given as to why access to the records was now sought. The district judge dismissed the application on the ground that the liquidator had failed to establish a reasonable requirement for the documents. The liquidator’s appeal was dismissed. Although the court had an unfettered discretion, it should exercise it in the interests of the winding-up without being oppressive to the party who was the subject of the application. Regard should be had to the fact that, as in the present case, the application was for documents and information which was likely to be less oppressive than an order for an overall examination. However, bearing in mind the long period of the liquidation, the wide-ranging nature of the request made, and the limited involvement of BDO in the company’s affairs, the district judge had come to the correct conclusion.