PricewaterhouseCoopers sought to recover their costs in complying with disclosure orders obtained by the Liquidators of Saad Investments Co Ltd and Singularis Holdings Ltd. The disclosure orders were ultimately set aside but the costs appeal was rejected by the Court of Appeal of Bermuda.

Further to our previous article, there has been another update in relation to Singularis Holdings Ltd v PwC. The Liquidators of Saad Investments Co Ltd ("SICL") and Singularis Holdings Ltd ("SHL") applied for a winding up order in Bermuda in respect of SICL however no attempt was made to wind up SHL in Bermuda. The Liquidators applied for and obtained ex parte orders under section 195(3) of the Bermudan Companies Act 1981 requiring PricewaterhouseCoopers ("PwC") to produce further books or papers in their custody or power.

PwC applied inter partes to discharge the ex parte orders, but this application was refused in April 2013. PwC appealed and ultimately the Court of Appeal quashed the order obtained by the Liquidators of SHL, however PwC's appeal in relation to the SICL disclosure order was simply stayed.

In the meantime, PwC undertook the preparatory work necessary to enable compliance, and wished to recover their internal costs of compliance in the sum of $250,000, derived from 1,500 hours of staff work. PwC's Counsel argued that the order for disclosure, in the absence of any offer to pay anything towards their costs, was "totally unreasonable" and should not be permitted.

PwC had previously requested an undertaking for their costs, however PwC had not sought a further extension of time or stay during the appeal process, and had they done do, the court in this judgment indicated they would be likely to have ordered a stay or a cross undertaking from the Liquidators to cover costs incurred in preparing to comply with the orders, if they were later set aside on appeal.

PwC also argued that the disclosure order was defective because it did not contain a provision for their costs of compliance, drawing an analogy with Norwich Pharmacal orders where it is established practice to provide for costs of complying with the order. This argument was rejected since there was no suggestion that PwC was mixed up in any tort.

The Liquidators never held any official position in Bermuda in relation to SHL and it was later held that the Supreme Court of Bermuda had no jurisdiction to wind up or appoint the Liquidators of SICL in Bermuda. Ultimately both orders were set aside on a further appeal.

In his judgment, Lord Mance stated "PwC are seeking precisely what they never asked for at the time, that is, not the costs of compliance, but protection in respect of preparatory costs thrown away as a result of a successful appeal which meant that they did not have to comply. Such protection is achieved, if at all, by appealing, seeking an extension of time for compliance or a stay of execution pending the determination of the appeal, and, if this is resisted, insisting as a condition of the refusal of an extension or stay, on an undertaking in damages to cover costs wasted".

Ultimately the court was not convinced that PwC was entitled to relief and therefore their application for an order for costs was dismissed.