Section 236 of the Insolvency Act 1986 considered - Cowlishaw & Anor v O&D Building Contractors Ltd [2009] EWHC 2445 (Ch) (08 October 2009)
His Honour Judge David Cooke, sitting at the Birmingham Civil Justice Centre (pictured) as a judge of the Birmingham District Registry of the Chancery Division, has handed down his judgment in Cowlishaw & Anor v O&D Building Contractors Ltd [2009] EWHC 2445 (Ch) (08 October 2009). The case concerns, inter alia, s.236 of the Insolvency Act 1986. This provision notes that:
"(2) The court may, on the application of the office-holder, summon to appear before it—
(a) any officer of the company,(b) any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or(c) any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company.(3) The court may require any such person as is mentioned in subsection (2)(a) to (c) to submit an affidavit to the court containing an account of his dealings with the company or to produce any books, papers or other records in his possession or under his control relating to the company or the matters mentioned in paragraph (c) of the subsection."
The Cowlishaw case concerned two companies, Junared Three Limited and Warnock Estates Limited, that were both in administration. The companies were engaged in a multi-million pound redevelopment of a property on the Harrow Road in London. As the learned judge notes:
"The administrators wish to consider whether they should attempt to complete the development themselves, or sell the property in its partly completed state and contend that in order to obtain advice on valuation and reach this decision they need to see the various classes of documents held by the respondent in relation to the property." But as the judge goes on to note, "The respondents expressed the concern that the administrators' true purpose is to obtain the documents so that they can be sold to a buyer as part of a package to sell the development. It is submitted on their behalf that it is an abuse of the procedure under section 236 to seek from them the "fruits of their labours"; that is to say documents produced in the course of the contract for which they have not been paid, in order to obtain, without payment, the advantage of the work they have done..."
Picture Credit: http://www.earthinpictures.com/world/great_britain/birmingham/th_birmingham_civil_justice_centre_(country_courts).jpg
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