Office holders Powers part 5

If an application for public examination is made it is to be served forthwith on the proposed examinee. Once the order has been made (which it will be unless it seems clear that the jurisdiction does not arise) there are a number of ways on which it can be set aside. The court had a general power to review rescind or vary any order made in the winding up jurisdiction (Insolvency Rules rule 7.47). It is for the person applying to set aside the order to establish that the order should not have been made and there are various ways in which the examinee may seek to demonstrate that. An obvious one is to show that the person does not fall within the section as the type of person who can be examined. If it can be shown that the examination would be oppressive that could also be a ground for setting aside. (Since the examination is held in public this could have adverse consequences for the examinee especially in relation to proceedings which might take place in another jurisdiction). It is also possible to try and show that the examination would serve no real purpose, but in practice it is very difficult to demonstrate that and in all but exceptional cases the court would allow the examination to proceed so that it could be seen whether the questions were of use.

There is however a rather wider category of potential exemption based upon mental disorder or physical affliction or disability. This is dealt with in the insolvency rules 4.214. Whether the affliction is mental or physical, the question is whether this renders the person unfit to undergo or attend the public examination. The official receiver can make an application on this ground as can a court appointed person responsible for managing the affairs or representing the examinee. A relative or friend who the court considers to be a proper person to make the application can also make it. Unless the official receiver makes the application, and unless the examinee is a patient under the Mental Health Act 1983, there has to be an affidavit from a registered medical practitioner as to the examinee's mental and physical condition. This will obviously indicate what the problem is about attending. The official receiver and liquidator have to be given at least seven days notice of the application and before any order is made the applicant has to deposit with the official receiver such sum as the official receiver certifies to be necessary for the additional expenses of any examination which may be ordered on the application. The court can order payment of expenses of the examination out of the deposit instead of out of the assets of the company. Where the official receiver makes the application he or she can make it without notice and the evidential rules are relaxed since the evidence can be in the form of a report by the official receiver to the court.

Although the examination is by the official receiver a number of other persons may take part in order to question the examinee. They comprised the liquidator, anyone appointed special manager of the company's property or business, any creditor who was put in the proof in the liquidation and any shareholder. Those people can appear and put questions, or can appear by solicitor or counsel in order to put questions, or may in writing authorise another person to put questions to the examinee. The hearing takes place on oath and the examinee has to answer all questions as either the court puts or allows to be put to the examinee. The judge would normally be a registrar of the Companies Court (or outside London a District Judge) unless such person directs that it is appropriate for a judge to hear the application (in which case it would be the High Court Judge or someone authorised to sit as a High Court Judge. Whoever the judge is, the judge will decide whether questions are relevant and whether they should be allowed. Likewise the examinee can at his own expense employ a solicitor with or without counsel who can put such questions as the court allows for the purpose of enabling the examinee to explain or qualify any answers given. Such solicitor or counsel can also make representations on behalf of the examinee.

There will be a written record as the court thinks proper which is usually read over and signed by the examinee (obviously subject to any qualifications he or she thinks proper). That's backspace backspace written record may in any proceedings be used as evidence against the examinee of any statement made by him or her in the course of the public examination. Perhaps understandably, the court has the power to adjourn the hearing of the examination if criminal proceedings have been instituted against the examinee and the court thinks that having the examination would be calculated to prejudice the fairness of any criminal trial.