The liquidators of two Cayman Island companies obtained orders under s 195(3) of the Bermudan Companies Act 1981 for PwC, as the companies' auditor, to provide information and documents to the liquidators. PwC decided to appeal but, in the meantime, did US$250,000 of preparatory work necessary to enable compliance, if required, with the orders.

As a result of the appeal, both orders were set aside. In PricewaterhouseCoopers v SAAD Investments Co Ltd & Anor (Bermuda) PwC applied to recover from the liquidators the costs of preparing to comply with the orders.

The Privy Council dismissed PwC's claim. The Privy Council considered that PwC should have applied for an extension of time to comply with the order or for a stay of execution pending appeal. An extension or stay would have been granted unless the liquidators had then undertaken to cover costs incurred if the orders were set aside on appeal. The Privy Council also considered that there was no practice or obligation on the liquidators, legally or morally, to pay the costs of compliance.

In New Zealand, under s 261 of the Companies Act 1993, there is an entitlement to recover some costs, but no right to refuse to comply with an order to produce documents on the basis that the costs of compliance have not been met.

See Board advice here.