The entitlement of a liquidator to documents and information held by the liquidated company’s accountants
Alocasia Ltd sub nom Jackson & Anor v Baker Tilly & Anor 
The High Court considered the reasonableness of an application by the liquidators of an insolvent company requiring the company's accountants to disclose further information on the company’s accounting procedures.
The liquidators had little information available in relation to the accounting procedures of the company, and they also had concerns in respect of several tax issues. The respondent firm of accountants audited the company's accounts during the relevant period before the insolvency. The liquidators considered that the accountants might have information concerning the company and its promotion, formation, business dealings, affairs or property that would assist them.
The liquidators requested the information under s.235 & s.236 of the Insolvency Act 1986. The accountants refused the request, stating they had not advised on tax and contending that the relevant files held legally privileged information as well as confidential information in respect of other group companies.
The liquidators applied to the Court for production of the documents, serving of affidavits in respect of the company’s dealings, and attendance for examination under oath.
The issues the Court considered were whether: (1) the liquidators reasonably required the information sought in order to carry out their duties and (2) such disclosure was wholly unreasonable, unnecessary or oppressive to the accountants.
The application was granted. The Court found that the purpose of the liquidators’ application was to investigate the company’s affairs where they had limited information. The Court gave weight to the fact that the liquidators were experienced and had provided sworn testimony explaining the need for the information.
It was clear from the evidence that there was little information in relation to the company’s accounting procedures and the liquidators were therefore entitled to make further searches under their statutory duties.
The amount of work required in compiling the documents was not wholly unreasonable, unnecessary or oppressive. The accountants were a professional firm and the documents were organised and readily available to them.
The liquidators request was reasonable as they primarily sought accounting details and potential advice on tax matters. In order to ensure that the additional parties’ were adequately protected, a period of time was given for them to make submissions if they so wished.
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