The Official Receiver v Norriss

Section 236(3) of the Insolvency Act 1986 confers a freestanding power to require a person outside the jurisdiction to provide an account of dealings with a company in liquidation or to produce relevant documents. That power is distinct from the power to summon a person for examination before the court. It has extra-territorial effect, provided the liquidator reasonably requires the information or documents to perform statutory functions and production would not impose an unnecessary or unreasonable burden. The court may limit the order so that it reaches only documents relating to the company in liquidation and the relevant assets or transactions.

The Official Receiver, as liquidator of Omni Trustees Ltd, applied under section 236 of the Insolvency Act 1986 for an order requiring Tristram Michael Norriss, resident in Hong Kong, to provide a witness statement, supporting documents and an account of dealings concerning approximately £3.7 million transferred from the company to a Hong Kong pension scheme. The application had previously been adjourned for service and evidence. Mr Norriss did not appear and filed no evidence.

The central issues were whether section 236(3) authorised an order against a person resident outside the jurisdiction and, if so, whether the requested production was justified and proportionate.

1. Statutory power. Mr Norriss was capable of giving information concerning the company’s business, dealings, affairs and property and therefore fell within section 236(2) of the Insolvency Act 1986. The Official Receiver reasonably required the information and documents to perform his statutory functions. Production would not impose an unnecessary or unreasonable burden.
2. Extra-territorial effect. The court distinguished the former section 25 of the Bankruptcy Act 1914, considered in Re Tucker [1990] Ch 148. Under that provision, document production was ancillary to and dependent upon the principal power to summon a person for examination. Section 236(3) is structured differently and creates a freestanding power to require an account of dealings or production of records.
3. Authorities. The court applied the test in British and Commonwealth Holdings plc v Spicer & Oppenheim [1993] AC 426, requiring the liquidator reasonably to require the material for his statutory functions and the order not to impose an unnecessary or unreasonable burden. It declined to follow MF Global (UK) Ltd [2015] EWHC 2319 (Ch), which had concluded that section 236 lacked extra-territorial effect, because the distinction between examination and document production, the different statutory structure and Re Mid East Trading Ltd [1998] 1 BCLC 240 had not been considered.
4. Order. Section 236(3) had extra-territorial effect. The application was granted, but the order was confined to documents relating to monies paid into the Timoran SSAS bank account from Omni Trustees Ltd on or about 25 July 2014.