(Orse In re Pantmaenog Timber Co Ltd)
The Receiver sought to use information obtained under section 236 (documents recovered from the directors’ solicitors) in disqualification proceedings.
Held: The appeal succeeded. The Act had explicitly given the requisite powers to the receiver whether or not he was the liquidator. Nor was the purpose of the use restricted. The task of the receiver was not just to collect and get in the assets of the company, but also to carry out the other acts expected of him. Section 236 extended the meaning of ‘office-holder’ in this context to the Official Receiver, who was duty bound to investigate and report. His functions in a winding up were not limited to the collection and redistribution of the assets, but included investigation of its officers for the purpose of the public good of testing their conduct. The two Acts were intended to work together. The need to protect the public justified a wider reading of the statutes if necessary.
The section was constructed on the basis that such applications would be better made by the Official Receiver than the Secretary of State, because of his close knowledge of the company’s affairs. The power was not restricted by the grant of similar but more limited powers under the Disqualification Act. A restriction of the kind sought would severely limit the powers in insolvency properly to investigate the company’s actions.
Judges:
Lord Steyn, Lord Hoffmann, Lord Hope of Craighead, Lord Millett, Lord Walker of Gestingthorpe
Citations:
[2003] UKHL 49, [2003] BCC 659, [2003] 2 BCLC 257, [2003] 4 All ER 18, [2004] 1 AC 158, [2004] BPIR 139, [2003] 3 WLR 767
Links:
Statutes:
Insolvency Act 1986 236, Company Directors Disqualification Act 1986
Jurisdiction:
England and Wales
Citing:
Appeal from – In re Pantmaenog Timber Co Ltd CA 25-Jul-2001
The Official Receiver could not use the powers given to him for the purposes of his insolvency duties to require production of documents form solicitors and accountants, to satisfy duties placed on him by the Secretary of State for the purpose of . .
Cited – In re Polly Peck International plc, Ex parte the joint administrators ChD 1994
The purposes of a liquidation, or administration or receivership of a company must include the gathering of information as to the conduct of the affairs of the company, and those who had conducted them so that the office-holder can report to the . .
Cited – Bishopsgate Investment Management Ltd (in Liquidation) v Maxwell CA 16-Feb-1993
The fundamental wrong in the directors’ acts lay in the signing of transfers of the company’s assets and not entirely in their failure properly to enquire as to the nature of other transaction. The breach of fiduciary duty lay in positive acts. . .
Cited – In re Paget CA 1927
The purpose of the public examination of a debtor is not merely to obtain a full and complete disclosure of his assets and the facts relating to the bankruptcy in the interests of the creditors, but also to protect the public: ‘To concentrate . .
Cited – In re London and Globe Finance Corporation Ltd ChD 1903
A company which had gone from voluntary winding up, first to winding up under supervision and then to compulsory winding up, with the official receiver as liquidator. The company’s former managing director was suspected of fraud, but the law . .
Cited – In re Jeffrey S Levitt Ltd ChD 1992
The provisions of the two Acts are intended to be part of the same statutory scheme and are to be read in combination. . .
Cited – In re John Tweddle and Company Ltd CA 1910
The court discussed the official receiver’s enquiries and report leading up to the public examination of former directors. Farwell LJ said: ‘Now those are functions of a judicial character which are cast upon him, not in the liquidation of the . .
Cited – Bishopsgate Investment Limited v Maxwell CA 1999
A person required to answer questions under the section may not refuse to answer on the ground of self-incrimination. (Dillon LJ) ‘It is plain to my mind – and not least from the Cork Report – that part of the mischief in the old law before the . .
Cited – Re North Australian Territory Co 1890
The powers given under the sections should not be used oppressively. . .
Cited – In re British and Commonwealth Holdings plc (Nos 1 and 2) HL 1993
Section 236 extended the power of a liquidator to require from the company’s officers all the documents he would reasonably need in order to fulfil his duties under the Act.
Lord Slynn said: ‘The protection for the person called upon to produce . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Company
Updated: 07 June 2022; Ref: scu.185421
