“difficult to take seriously”

The case of Brake & Ors v Lowes & Ors [2020] EWCA Civ 1491 (“Brake“) had a fascinating reference to that fruitful Liquidator case of Walker Morris v Khalastchi [2001] 1 BCLC 1 (“Walker“) in which the following was said about a company’s solicitor’s files called for by a Liquidator:

“…The starting point is that the files are the property of the Company, and the liquidator is entitled to possession of them. The applicants have no right whatsoever to withhold them.”

However, what was interesting in Brake was how the Court of Appeal made reference to the argument put forward by the applicant in Walker :

The position is similar to that in the Walker Morris case described by Nicholas Strauss QC at 9B. That case was concerned with an application by the former solicitors of a company in liquidation (who were still acting for its holding company and two of its former directors). The applicants sought directions from the court as to whether they needed to provide purportedly privileged documents regarding the company’s tax affairs to the liquidator, and (if they did) sought a direction that the liquidator could not disclose those documents to the Inland Revenue which considered it had a claim for unpaid tax against the company without a court order.
The deputy judge noted that the applicants were creditors of the company, but that it was “difficult to take seriously” the contention that the applicants were motivated by the possible dilution of their claim for £237. Instead, he found the applicants’ only real concern was to frustrate the Inland Revenue’s claim for the benefit of their existing clients, rather than to advance any legitimate interest as creditors. See 7F-G. In fact, creditors of the company stood to gain from the Inland Revenue’s claim, which could result in a dividend being returned to the company and distributed to its creditors. The deputy judge concluded at 9A that:
It is true that the applicants are creditors, and would have locus standi if acting as such; but this is irrelevant, since they are in fact seeking to advance the interests of possible debtors, which are adverse to those to those of the creditors.