A liquidator has the duty to take possession of, and to protect the company assets. In the process of discharging this duty, the liquidator may need to request information and documents from parties holding the relevant documents. The liquidator has two avenues under the Companies Act 1993 to request such information.
Section 261
The first is through section 261, where the liquidator can give written notice to the parties requiring their delivery of documents and provision of information. Section 261(1) provides that a liquidator may require a director or shareholder of the company or any other person to “deliver to the liquidator such books, records, or documents of the company in that person’s possession or under that person’s control”. Section 261(3)(b) empowers the liquidator to require parties to provide “information about the business, accounts, or affairs of the company.”
The scope of the phrase “of the company” has been subject to debate in case law. It was confirmed in Buddle Findlay v Isaac that this provision includes all the relevant documents that are held by the company, rather than only those “owned” by the company.[1] However, documents under section 261 was held not to encompass internal documents generated by third parties, even if they relate to the affairs of the company, because they do not belong to the company and the liquidator has no right to retain them.[2]
Section 266
The liquidator may also apply to the Court under section 266 to order a person whom section 261 applies to provide documents or information. In contrast, under section 266(2)(b), such person may be ordered to “produce any books, records, or documents relating to the business, accounts, or affairs of the company in that person’s possession or under that person’s control.” This provision therefore goes further than section 261 in the scope of documents a party must provide to a liquidator. It was confirmed in ANZ National Bank Ltd that section 266(2)(b) differs from section 261(1) in this regard.[3]
Therefore, while the liquidator has considerable scope to request documents and information held by the company in liquidation, a liquidator will need to apply for a Court order to inspect documents which do not belong to, or constitute company documents, such as relevant documents belonging to a third party.
[1] Buddle Findlay v Isaac (1996) 7 NZCLC 261,132 (CA).
[2] ANZ National Bank Ltd v Sheahan [2012] NZHC 3037, [2013] 1 NZLR 674 at [37]-[38].
[3] At [38].
