The High Court ordered former company secretary and director Anne Sommerville to deliver and make available specified documentation relating to the bank accounts of Mars 2112 Group Ltd and its subsidiary Mars 2112 Global Ltd. The order was made so the companies’ current secretary could provide it for inspection by the plaintiffs under section 202(6) of the Companies Act 1990.
The judgment, delivered by Mr Justice T.C. Smyth on 3 October 2006, arose from a motion brought by directors Tim Brosnan, Paul Magowan and Patrick Gleeson. They sought access to banking information and company records to support an accountant’s examination of the companies’ transactions, including a Chicago venture. The court said the dispute over that venture was the subject of separate litigation and made no specific findings on the concerns raised in affidavits about it.
Sommerville had resigned as company secretary and director on 31 August 2004. She had signed two bank authorisations in December 2004 but refused a further request, saying she was concerned that the request was overbearing and could lead to requests about matters outside the companies’ affairs. The plaintiffs argued that her refusal prevented them from exercising statutory rights to inspect company records. Sommerville argued, among other things, that the plaintiffs had not first made a particular request directly to the bank.
The judge concluded that, viewed strictly under section 371(1) of the Companies Act 1963, the plaintiffs were not entitled to an order against her because she was no longer an officer. He nevertheless found that the requests formed part of an ongoing inquiry begun in 2003. In the circumstances, he held that her resignation did not remove the continuing obligation to take steps needed to secure access to records covered by section 202(6).
The resulting order was limited: Sommerville had to deliver the documentation described in paragraph 2 of the motion to the companies’ secretary for inspection by the plaintiffs. The court made no determination under section 371(2) until the plaintiffs addressed Sommerville’s challenge concerning alteration of the bank’s authority and mandates. The judgment did not grant the broader requests for compelled bank authorisations or access to any other accounts.