The liquidators of Wenztro Co-operation Limited (Wenztro) appealed against the High Court's decision not to order Wenztro's former director, Mr Ellis, to produce and be examined on personal financial information including tax return and bank statements. The liquidators sought to assess Mr Ellis' judgment worthiness for the legal proceedings they had commenced against him for breaches of directors' duties.
The Court of Appeal assessed whether the High Court had jurisdiction to order disclosure and examination under section 266 of the Companies Act 1993. Liquidators have previously used sections 261 and 266 of the Act to gather evidence as to the basis of a civil claim against a prospective defendant. The Court rejected the Australian approach which allows disclosure and examination to determine judgment worthiness, instead favouring the more restricted English authorities. It was held that the wording of sections 261 and 266 applied only to matters relating to "affairs of the company" which did not extend to a former director's personal financial position, and that privacy considerations outweighed the liquidators' interests in obtaining information. The Court left open whether disclosure and examination orders could be appropriate in the context of tracing funds unlawfully transferred to a prospective defendant.
See the full judgment here.