Office holders Powers part 7

The form of an order under section 236 can be either to summon the person for questioning and/or require them to submit an affidavit to the Court containing an account of their dealings with the company and/or to produce any books, papers, or other records under their possession or control relating to the company or its formation, promotion, business dealings, affairs or property. If having been summoned a person fails to appear without reasonable excuse powers of arrest and seizure are available. If they do appear but effectively refuse to answer questions, then the person hearing the examination if a Registrar or District Judge will usually adjourn the questioning to the High Court Judge so that effective punitive sanctions can be imposed on the defaulting person by effectively dealing with the refusal as a contempt of court. (This could be a fine or if persisted in even imprisonment).

The court has a discretion as to whether to make an order under section 236 and if so what. The court as part of this has a complete discretion as to how the examination is conducted and what questions are allowed. Thus the decision might be that written questions are sufficient, or it might be that oral questioning is allowed (whether or not following receipt of an affidavit or answers to written questions) but that certain questions will be disallowed. The applicant for questioning can attend in person or be represented by a solicitor with or without counsel. Any other person who could have applied for an order can (if the court give leave and the actual applicant does not object) attend and put questions. The person being questioned may at their own expense employ a solicitor with or without counsel for the purpose of putting questions to explain or qualify any answers given, and also to make representations on their behalf.

Although it is a wider topic than it is possible to do justice to in a few lines, readers may have heard of "the privilege against self-incrimination". This is broadly speaking a general principle that (save where it is expressly done away with) a person cannot usually be compelled to give answers which can expose them to prosecution for a criminal offence. (As can be imagined, many of the things which a liquidator is interested in exploring when a company has gone wrong can be matters which are relevant to the company and its creditors but can also amount to criminal offences, so that for example a scheme which gives rise to various potential causes of action to recover monies from those responsible could also have been a criminal conspiracy to defraud etc by those responsible). However in certain circumstances the privilege can be abrogated (done away with) by statute and section 236 has been held to be one of those sections. Therefore in one case even though the person being examined was under investigation by the Serious Fraud Office, the examination was able to proceed and there was no legitimate basis for refusing to answer questions on the grounds of privilege against self-incrimination. (of course as we will see questions of prejudice can be relevant to the court deciding what questions ought to be answered, but if the court decides that giving the answer is sufficiently important that the question should be asked and answered then notwithstanding the potential effect in respect of self-incrimination etc the person being examined must answer it).

Statements made during the examination which incriminate the person being questioned can be used in subsequent civil proceedings if the trial judge permits it but there is a restriction on use for criminal proceedings. Section 433 sets in which criminal proceedings one can use evidence which has been obtained under powers under the act such as section 236. Effectively it cannot be used in most criminal proceedings. The extended operation of this section arose as a result of a case case in the European Court of Human Rights brought on behalf of Mr Saunders in the late 90s about the unfairness of use of such material having regard to the right to a fair trial under article 6 (1) of the European Convention on Human Rights.