Liquidators' wide-ranging application for documents dismissed by the English High Court

The English High Court has recently in Webb v Eversholt Rail Limited [2024] EWHC 2217 (Ch) dismissed an application by liquidators to obtain documents and information from a company, on the basis that the request was unreasonably broad and unsubstantiated by evidence as to why the documents were reasonably required (please see this post on our Litigation Notes blog).

The liquidators made a request against the company for "copies of all documents… in its possession custody or control relating to the business, dealings, affairs or property", including all documents created for the purposes of carrying out its services and all correspondence relating to its business.  The English High Court held that the requests were far too wide and unsupported by evidence explaining the liquidators' reasonable requirements for the documents sought.  In particular, the English High Court noted that the company had previously already cooperated significantly with focussed requests for documents, so it was unfortunate that the liquidators still insisted that absolutely everything held in relation to the company should be delivered up. 

In Hong Kong, the well-established principle regarding document and information production is set out in The Joint & Several Liquidators of Akai Holdings Ltd v. The Grande Holdings Ltd & Ors (2006) 9 HKCFAR 766, namely that the court must strike a balance between a liquidator's reasonable requirements and the need to avoid making an order that is "unreasonable, unnecessary or oppressive" to the party from whom documents or information are sought.  In Akai, the company argued that the liquidators' requests for documents were not specific enough, but the Court of Final Appeal allowed the requests even though they were on wide terms because they were limited both as to time and as to the transactions in respect of which production was sought.  The judges commented that it is important to remember the liquidator is "normally a stranger to the affairs of the company" so "to require him to specify in advance the documents whose production he seeks would impose a burden on him which it would often be impossible for him to discharge". 

These cases remind us that it is important, when responding to document and information requests from liquidators, to watch out for requests that may constitute fishing expeditions and to cooperate with the liquidator's reasonable efforts in undertaking a fact-finding exercise.

For further information, please contact Jojo Fan, Managing Partner, Gareth Thomas, Partner, Rachael Shek, Partner, Sara Trougton, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.