The recent decision in The Official Assignee v Grant Thornton (2012) NZHC 2145 addressed the obligation on a company's auditor to produce all relevant documents and information upon request by a liquidator pursuant to section 261 of the Companies Act 1993.  Associate Judge Abbott held that the public interest in investigating the circumstances leading to a company's collapse trumped an auditor's claim to privacy and confidentiality. 

Grant Thornton (GT) audited the company's (Rockforte) accounts for two and half years in the period prior to its liquidation.  GT resisted production of documents that were not Rockforte's property, contending that section 261 did not require it to produce documents generally.  GT argued that the section 261 discretion is to be exercised cautiously to ensure that the very wide powers exercisable under the section "are not used oppressively, vexatiously or unfairly".

The Judge held that when considering a section 266 order or a section 261 request, the Court will balance the need to enable the liquidator to obtain information to investigate the affairs of the company against the need to maintain fairness in proceedings by taking into account the effect of an order on the party being compelled.

Despite the fact the documents the liquidator was seeking belonged to GT, and not Rockforte, the Court in exercising its discretionary powers, granted an order of compliance under section 266(2) of the Act, compelling production of the requested documents.  Whilst the liquidator had not identified a specific purpose for which the information was sought, the Judge accepted that the liquidator was seeking the documents in good faith, as part of an investigation for the benefit of the Rockforte creditors.

Although the breadth of the orders would cause GT some inconvenience, that in itself did not make the order unreasonable.  His Honour commented that mutual cooperation would make the task more manageable and less disruptive.

See court decision here.