Eversholt Rail (365) Limited (in liquidation) – “Everything forever” information request hits the buffers

In Webb and another (as liquidators of Eversholt Rail (365) Limited (in liquidation)) v Eversholt Rail Limited and another [2026] EWHC 101 (Ch), the High Court dismissed the liquidators’ appeal against a decision not to allow their extensive application for the production of documents under s.235 and s.236 of the Insolvency Act 1986 (IA 1986). The application had sought to reconstitute a special purpose company’s full corporate knowledge in circumstances where it had held no documents of its own.

Groups of companies operating in sectors such as property development, projects or infrastructure habitually place individual projects within their own SPVs. A key reason for doing so is that, if a project encounters difficulties which cannot be resolved, that SPV might then be placed into a formal insolvency process without adversely impacting the rest of the group. The stakeholders in such groups are therefore particularly likely to be interested in this decision, although it is also of wider interest. 

Background

Eversholt Rail (365) Limited (365Co) and Eversholt Rail Limited (ERL) were sister companies within the “Eversholt UK Rail Group”. That group owned and maintained railway engines and carriages that were leased to train operators. 

365Co was a special purpose vehicle whose role was to hold some of the group’s train fleet. It had no employees and three directors, who were also directors of other companies in the group. It had entered liquidation in 2019 when it became apparent that the rental income from the train operators to which it had leased rolling stock would not be sufficient to meet its own obligations.  

ERL provided asset management and administrative services to the companies in the group, including to 365Co prior to its liquidation. Norton Rose Fulbright (NRF) provided legal services to members of the group.  

In practice, ERL discharged all of 365Co’s functions and held all documents relevant to 365Co and its business. However, it did not segregate documents relating to 365Co from those of the various other group companies to which it provided services. Indeed, 365Co did not have a separate domain name, so all e-mails relating to 365Co were sent to and from a generic Eversholt email address. 

As a consequence of this, when the liquidators were appointed 365Co had no documents of its own. Shortly after their appointment, ERL (acting through NRF) voluntarily provided the liquidators with various documents. The liquidators then made requests to ERL, and subsequently also to NRF, and were duly provided with additional documents and information. 

However, after four years the parties had reached an impasse. ERL and NRF indicated that they were willing to provide further documents but only in response to focussed requests explaining why they were reasonably required. Meanwhile the liquidators’ position was that ERL and NRL were required to provide everything which they held relating to 365Co. The liquidators duly issued an application pursuant to ss.235 and 236 of the Insolvency Act 1986 for ERL and NRF to provide copies of an extensive range of documents.         

The relevant law

The parties were not in dispute as to the legal principles involved – the question was how these should be applied in the circumstances of the present case.

Section 235(2) IA 1986 provides that specified persons, including those employed by the company under a contact for services, shall: “give to the [insolvency] office-holder such information concerning the company and its promotion, formation, business, dealings, affairs or property as the office-holder may … reasonably require."

Section 236 IA 1986 applies to a broader category of person, namely: “any person whom the Court thinks capable of giving information concerning the promotion, formation, business, dealing, affairs or property of the company”, and provides, at section 236(3), that the court may require such persons to attend Court or submit to the Court an account of their dealings with the company or to produce any books, papers or other records in their possession or under their control relating to the company or that relating to the promotion, formation, business, dealings or property of the company.

The case law makes it clear that it is in the Court’s discretion as to whether to grant an order under s.236 IA 1986. The exercise of that discretion involves balancing the importance to and reasonable requirements of the office-holder to obtain information against the possible oppression of the person being examined or being required to produce documents. In this respect:

• the views of office-holders should be given great weight, but are not decisive;
• the case for making an order against a person who has a statutory duty to co-operate with the office-holder under s.235 is usually stronger than the case for making an order against a third party;
• an order for the production of documents is less likely to be oppressive than one for an oral examination; and
• an application is not necessarily unreasonable just because it is inconvenient for the addressee, causes them a lot of work or may make them vulnerable to further claims. 

There is nothing in s.236 that necessitates the overriding of legal privilege. However, where the company in liquidation enjoys a joint or common interest in respect of a privileged communication, they will usually also enjoy a right of access to that communication.              

The initial decision

At first instance ICC Judge Burton dismissed the application. She held that the liquidators’ evidence had failed to explain or justify why the liquidators reasonably required the extensive range of documents sought, but had focussed instead on explaining why further documents evidently existed which had not yet been disclosed in relation to 365Co. 

The judge observed that the liquidators were proceeding on the basis they should have been placed in the same position as that in which they would have been if 365Co had held its own records. However, she considered this approach to be fundamentally misconceived, as that was not how the group had operated – the liquidators must work within the confines of the company to which they had been appointed. She noted that ERL’s evidence showed that it had already provided significant cooperation to date, and that it appeared to be willing to assist the liquidators in response to specific requests. 

She was also unconvinced by the liquidators’ argument that the services agreement between the parties required ERL to produce documents at 365Co’s request, as the liquidators’ application had not been framed as an application for specific performance of those obligations.

So far as the application against NRF was concerned, the judge ultimately held that, regardless of the potential merits of any argument that the liquidators could have raised regarding joint or common interest privilege, as the liquidators had failed to demonstrate a reasonable requirement to see all of the documents sought, that application must also fail.

The appeal decision

Sir Anthony Mann (sitting as a High Court judge) dismissed the liquidators’ appeal. He noted that at the heart of the appeal was the question of what the liquidators needed to show in a case such as the present one. Counsel for the liquidators had argued that: 

• the liquidators need show no more than that the request was made for the purpose of seeking to reconstitute the company’s knowledge, and that it was unnecessary to demonstrate any reasonable requirement (i.e. that the liquidators were entitled to “everything forever”); or
• if, alternatively, the liquidators did need to demonstrate a reasonable requirement, then the mere fact that they were seeking to reconstitute the company’s knowledge as against a person with the documents was in itself a reasonable requirement. 

However, the judge rejected these arguments. He emphasised that liquidators need to establish a reasonable requirement for documents or information under both s.235 and s.236. The fact that one of the purposes of s.236 is to enable the liquidator to get sufficient information to reconstitute the state of knowledge that the company should possess did not mean that this was a sufficient requirement.   

If all that the liquidators had needed to do for the purposes of the present application was to demonstrate that they were reconstituting the company’s knowledge, then the same would be true for every case. It may be that in some cases the circumstances would be such that the relevant liquidators could establish on the facts that their need to reconstitute the company’s knowledge justified a very extensive “everything forever” disclosure because on the facts this was a reasonable requirement – but the liquidators had not provided the necessary justification in this case. The “reasonable requirement” threshold meant that the liquidators should have done more than just point to the fact that someone has extensive knowledge that they want. 

What does this mean for the future?    

1. The office-holder will need to do more than merely argue that they are seeking to reconstitute the company’s knowledge 

The Eversholt case was relatively usual on its facts in that, by virtue of its relationship with 365Co, ERL held all of 365Co’s documents and arguably indeed all of its corporate knowledge. 

Nevertheless, we think Sir Anthony Mann was right to identify that, if the court had held that present liquidators had satisfied the “reasonably required” threshold merely by demonstrating that they were seeking to reconstitute the company’s knowledge, this would have created an awkward precedent for the future. 

Office-holders understandably find the process of recreating a company’s knowledge a slow and frustrating one. Many office-holders feel that recipients of requests for documents make a show of appearing to co-operate whilst in reality holding back documents which might create difficulties for those recipients if they were to be produced. 

Equally, however, there will be many who have received a request for documents from office-holders and their advisers who feel that the request has over-stated the requirements of s.235 and s.236 and has had no regard at all for the convenience of the recipient. Although it is important for office-holders to reconstitute the company’s knowledge, it is also important that they can properly demonstrate why any request is reasonable so that third parties are not required to spend disproportionate amounts of time and expense in providing a multitude of documents which could never be of any practical use to the office-holder.

Office-holders will need to give careful thought to the purpose and scoping of their document requests at an early stage, or they will face the dual risks of having an application declined or finding it to be insufficient even if ordered. 

It is notable that the judge did not suggest that an “everything forever” would necessarily be inappropriate in the circumstances and indeed the door for such requests remains firmly open – but office-holders must do more than point to a general intention of reconstituting knowledge.

2. If the office-holder makes an extensive request but wishes to argue in the alternative for a more limited order, they may need to take care how they present this     

It appears that in this case the liquidators hoped that, even if the Court was unwilling to grant their application in full, they would at least receive an order in respect of the documents in which they were most interested. However, they did not strongly pursue this line at first instance, perhaps because their primary focus was on a need to see everything. 

On the appeal, Sir Anthony Mann read the liquidators’ argument that they reasonably required “the documents sought in the application (or, at the very least, a large proportion of them)” as an admission that not all of the documents sought were required, but noted also that they had failed to specify the “large proportion” which they were justified in receiving. Whilst it would have been open to the Court to fashion a more limited category of its own choosing, it also had the discretion not to do so.     

Office-holders may well find that they can make an extensive, and indeed flexible, request in practice provided that each of the alternatives presented to the Court is properly set-out and properly reasoned – especially in cases where the respondent has been uncooperative or there is evidence of wrongdoing, each of which would weigh on the assessment of reasonableness.

3. Privilege arguments may need to be resolved in a future case

NRF made it clear that its client of record had been ERL but recognised that, had advice been given by NRF for the benefit of 365Co, then ERL could not have asserted privilege.    

The liquidators suggested that 365Co might have benefitted from a joint or common interest in this respect, and argued that the Court has been prepared to recognise a joint interest between a parent and its subsidiary. However, the respondents pointed out that ERL and 365Co were not in such a relationship because they were sister companies.

These questions, which could give rise to some fine distinctions, did not ultimately need to be examined fully here. Such matters have generally been resolved with a detailed examination of specific facts; further clarity on the practical application in more complex corporate and fund structures would doubtless be welcome.