Caldero Trading Ltd v Beppler & Jacobson Ltd & Ors

A court construing an order regulating provisional liquidators must determine the scope of the power from the words used in their factual and commercial context. A power to obtain documents which are reasonably necessary solely for protecting and preserving company assets is deliberately limited. It does not authorise a general investigation or a request for every company document merely because the liquidators consider that approach desirable. The liquidators may seek specific documents falling within the defined category, and may make further requests where disclosed material reveals further relevant enquiries.

The court heard cross applications concerning the proper construction of an order varying the powers of provisional liquidators appointed over Beppler & Jacobson Ltd. The order permitted them to obtain documents reasonably necessary solely for protecting and preserving the company’s assets.

The provisional liquidators sought delivery of all books and records held for a director. Other respondents sought declarations that they were not entitled to require all such documents and proposed that solicitors should review and filter them. The central issue was whether the amended paragraph 7.2 authorised delivery of all company books and records or only documents within its stated limitation.

1. Construction of the order. The order was a commercial bargain made within a statutory regime. Its meaning had to be gathered objectively from the words used in their factual matrix, rather than from submissions made when the order was negotiated. The word “documents” operated as shorthand for the books, papers and records described in the earlier order, including accounting and statutory records.
2. Deliberate limitation. The words “reasonably” and “necessary”, together with “solely” and the purpose of protecting and preserving assets, materially reduced the wider powers previously granted. The power could be exercised only for documents reasonably necessary for that sole purpose. It did not authorise investigation without more or a fishing expedition.
3. Scope and decision-making. The liquidators’ professional view that they needed all documents was not conclusive. The court first had to determine the extent of the power. The liquidators could request specific documents within the defined category and could make further requests if disclosure revealed further lines of enquiry.
4. Procedure and remedy. The application was not an ordinary disclosure exercise and no general balancing exercise arose once the scope of the power had been construed. It was inappropriate to require solicitors representing hostile parties to filter the documents. The respondents’ declaration that the liquidators were not entitled to call for all books and records was granted. The proposed filtering declaration was refused, and the liquidators’ application for delivery of all books and records was refused in its existing form, subject to a more limited order after further argument.