The Official Receiver v Norriss [2015] EWHC 2697 (Ch)

Section 236 is the most powerful investigative tool an office-holder has, and in HMRC-driven insolvencies the director or the records are very often abroad. Norriss holds that the document production power reaches them. Other authorities disagree, and any advice has to say so.

Why This Case Matters

Section 236 of the Insolvency Act 1986 is the most powerful investigative tool an office-holder has. It allows the court to summon officers of the company, and anyone thought capable of giving information about its dealings, to be examined on oath and to produce documents.

In an HMRC-driven insolvency it is used constantly, against directors, shadow directors, family members, accountants, bookkeepers and banks. And in a very large proportion of those cases the person or the records are outside the jurisdiction: a director who has relocated, a set of books held by an overseas service provider, a company administered from abroad.

That is where Norriss matters, and where the law is genuinely unsettled.

The Statutory Framework

Section 236 enables the court, on the application of an office-holder, to summon:

• any officer of the company;
• any person known or suspected to have in their possession any property of the company, or supposed to be indebted to it; and
• any person the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company.

The court may then require that person to submit an account, to attend for examination on oath, or under s236(3) to produce books, papers or other records.

Those are two materially different intrusions. Compelling a person abroad to travel to England and submit to oral examination is a far greater imposition on a foreign national and on the comity between jurisdictions than requiring them to send documents. That distinction runs through the case law.

The Facts

The Official Receiver acted as liquidator of Omni Trustees Ltd, which was wound up in July 2015. The Official Receiver applied under s236 in respect of Mr Norriss, who was resident in Hong Kong.

Issues arose as to whether the Official Receiver had properly served the application on Mr Norriss and given him adequate notice of the hearing, given his residence abroad, and, more fundamentally, whether the section reached him at all.

The Ratio Decidendi

The distinction that carries the reasoning

The logic is one of proportionality and comity. Requiring a person abroad to produce documents they already hold is an intrusion, but a limited and familiar one, and it does not require them to submit personally to the jurisdiction of a foreign court. Compelling attendance in England to be examined on oath is a different order of imposition.

That distinction gives an office-holder a practical route where the wider power is doubtful: ask for the documents, not the examination.

The Conflicting Authorities

The practical consequence is that an application involving a respondent abroad should be prepared on the footing that jurisdiction will be contested, with the authorities addressed squarely rather than assumed.

Obiter and Procedural Points

• Service and notice. The court’s remarks on whether the Official Receiver had properly served the application and given adequate notice to a respondent in Hong Kong are fact-specific but practically important. Applications against respondents abroad fail on service far more often than on jurisdiction.
• The discretion. Even where jurisdiction exists, s236 relief is discretionary. The court balances the office-holder’s reasonable requirements against oppression to the respondent, applying the established principles from the general s236 case law.
• Privilege and self-incrimination. The case does not address these, but they arise routinely. Legal professional privilege is preserved, and the privilege against self-incrimination has a limited and complex application in insolvency examinations.
• Use for disqualification purposes. The extent to which material obtained under s236 may be deployed in director disqualification proceedings is governed by a separate line of authority.

Practitioner Application

For office-holders and HMRC

• Ask for documents first. Where the respondent is abroad, a s236(3) production order is materially more likely to be granted than an order for oral examination, and it often produces most of what is needed.
• Address the conflict in the application. Do not assume jurisdiction. Set out the competing authorities and explain why the court should follow Norriss.
• Get service right. Permission to serve out, the correct method for the jurisdiction, and adequate notice of the hearing. This is where these applications most often come unstuck.
• Be specific. A targeted request for identified categories of document is far more likely to survive an oppression objection than a general trawl.

For respondents

• Test jurisdiction and service before anything else. Both are live, and the authorities are genuinely divided.
• Distinguish the two powers. If an oral examination is sought against someone abroad, the argument against it is considerably stronger than against document production.
• Run oppression. The discretion is real. Volume, cost, relevance, the availability of the material from other sources, and any parallel proceedings are all relevant.
• Protect privilege and consider self-incrimination, particularly where a director faces potential disqualification, misfeasance or criminal exposure alongside the insolvency: see our guides to s236 examinations and disqualification defence.
• Consider the wider exposure. Material produced under s236 routinely founds claims for misfeasance, wrongful trading and the antecedent transaction claims discussed in Re MC Bacon.

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