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English High Court orders Bookkeeper resident in the Republic of Ireland to assist in UK liquidation

The Applicant, Mr Stephen Wallace was a UK based Liquidator of Carna Meats (UK) Limited (the “Company”). He claimed that his investigations into the Company’s affairs has been impeded by a lack of books and records. The Respondent, Mr George Wallace, was the Company’s former bookkeeper based in Ireland and was identified as holding all of the records of the Company. Despite a number requests from the Liquidator, Mr Wallace did not produce the documents.

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The Applicant, Mr Stephen Wallace was a UK based Liquidator of Carna Meats (UK) Limited (the “Company”). He claimed that his investigations into the Company’s affairs has been impeded by a lack of books and records. The Respondent, Mr George Wallace, was the Company’s former bookkeeper based in Ireland and was identified as holding all of the records of the Company. Despite a number requests from the Liquidator, Mr Wallace did not produce the documents.

In order to progress with the winding up of the Company, the Liquidator made an application pursuant to section 236(3) of the [UK] Insolvency Act 1986 (which is substantially similar to section 671(4) of the Companies Act 2014) for Mr Wallace to deliver up all documents, books and records of the Company in his control or possession.

Question of Jurisdiction

The primary consideration for the UK High Court was whether the statutory provision has extraterritorial effect and if an Order could be made in circumstances where Mr Wallace was resident in the Republic of Ireland.

The Court noted it had international jurisdiction over the winding-up of the Company pursuant to the EC Insolvency Regulation 2000. Therefore, where the Company’s centre of main interests was in the UK, the judgment of the UK Court could be recognised in another jurisdiction and in this case the Republic of Ireland without any further formalities.

The Court found that the power to require the production of documents applies where the person is sufficiently connected with the jurisdiction, whether they are resident within or outside of the jurisdiction. The Court considered that Mr Wallace was an important part of the Company’s operations and he may be critical in the proper administration of the winding-up of the Company. Mr Wallace was given 42 days to comply with the Order sought.

Conclusion

The UK High Court declined to state the position in respect of section 232(2) of the Insolvency Act 1986 which allows the Court to summon specified persons before it. The Court restricted its decision to section 236(3) of the 1986 Act which it considered less invasive. Therefore an Irish resident may be ordered by the English Courts to provide documentation relating to a UK Company, but it is not clear whether the UK High Court would go as far as to formally summons before it a person who is not resident in the UK.

[1] Philp Stephen Wallace (as Liquidator of Carna Meats (UK) Limited) v George Wallace [2019] EWHC 2503 (Ch)