Public Examinations

April 2007

Introduction

1. What is a public examination?

A public examination (more commonly known as a 'PE') is the oral examination of an individual on oath in open court. It may be held at any time before a bankrupt’s discharge or the dissolution of a company in a winding up. 

2. Why is a PE held?

There are two main reasons for holding a PE. They are:

  • to enforce an individual’s attendance/co-operation on or with the official receiver 
  • as an aid to the official receiver’s enquiries for example regarding the discovery of assets.

The latter is only normally held in cases where someone is not co-operating fully with the official receiver or where evidence is needed on oath. 

In bankruptcy, the official receiver may also ask the court to suspend the bankrupt's automatic discharge.

3. Who may be examined?

The official receiver may apply to court for the PE of:

  1. a bankrupt or officer of the partnership/company
  2. any liquidator, administrator, or receiver or manager of the company
  3. any person who has been concerned or has taken part in the promotion, formation of the partnership/company or in the management of the company

For further detailed guidance on the persons that may be examined see Technical Manual Chapter 14 part 2.

4. When can a PE be held?

A PE can be held at any time before:

  1. the discharge of the bankrupt
  2. the dissolution of the company
  3. where a winding-up order has been made against a partnership as an unregistered company, before the winding up is complete
  4. where orders have been made against the members of an insolvent partnership on a joint bankruptcy petition, without a winding up order being made against the partnership, before the discharge of any such member.

5. Warning Letter

Before fixing a PE at least three attempts must have been made to arrange and advise the officer or bankrupt of the need to attend for interview. If two appointments have been missed with no explanation or contact, then the official receiver should consider a PE.

When PE is being considered because of non co-operation the official receiver should write to the potential examinee advising him/her of the possibility of a PE and that notice of it may be given by public advertisement.

Where the PE is to be fixed to enforce attendance, if the examinee has previously received written warning of the possibility of a PE in letters fixing appointments, it is not necessary to send an additional warning letter. LOIS form NTB1 gives the option to choose "further appointment" or "final appointment" and both options warn of the possibility of a PE. 

6. PEs for enforcement purposes only

A PE should not be regarded as an automatic alternative to obtaining initial information by way of interview. The official receiver should also make proper use of his powers to requisition accounts and further information where this is likely to provide the details necessary for the purpose of his enquiries. The official receiver should remind potential examinees of their duty to co-operate where such non-compliance is the reason for the PE.

A PE may therefore be held where a bankrupt/partner/director fails to attend upon the official receiver. If the official receiver knows or is reasonably sure that the person is aware of the proceedings i.e. served personally with the petition or information has been received to suggest that the person is at the address to which notices have been sent, then the official receiver would normally apply for a PE. If a person fails to attend a PE the court is empowered to issue a warrant for that person’s arrest but will not be willing to do so if the bankrupt's current address is not known.

In bankruptcy cases application to suspend the bankrupt's discharge should be used as an alternative to fixing a PE, where the bankrupt's current whereabouts are unknown.

7. PEs of company officers

A PE should not be called simply because of the non-surrender of a director to the proceedings. PEs should only be held where there is a genuine intention to question the director over specific matters, such as the whereabouts of assets, etc. 

8. PEs as an aid to the Official Receiver’s enquiries

If a bankrupt/partner or company director is being unco-operative by not disclosing something or the official receiver wishes to establish who was responsible for certain actions and events then he/she may use a PE. When a PE is used to examine a person under oath a shorthand writer will generally be present to record the proceedings. A full transcript of the hearing will then be typed from the shorthand writer’s notes. Generally, the transcripts cannot be used in criminal proceedings although they can be used in civil proceedings.

9. Requisition of PEs

Creditors and company contributories have the right to request that a PE be held. Their request must be supported by at least half in value of all known creditors (including secured claims) or by three quarters in value of the contributories shareholding. The request must also provide valid reasons as to why a PE should be held. A response to the requisition should be issued according to the circumstances of each individual case using form PERTR (available on the OROS Intranet site).

The official receiver is not obliged to hold a PE simply because he/she receives a request to do so. If the official receiver is of the opinion that the examination is not merited, he/she can apply to the court for relief from holding a PE but an application must be made within 28 days of receipt of the requisition notice (form PEAR available on the OROS Intranet site).

For further details on the requisition of PEs please see Technical Manual Chapter 14 part 3.

10. Expenses of the PE
(Amended February 2011)

The cost of applying for a PE is covered by the administration fee.  As a result the cost of the process server’s expenses for a PE is also covered by the administration fee and should not be charged to the insolvency estate but paid from the Vote account.

In the case of a requisitioned PE, the official receiver must obtain a deposit to cover the costs of an examination from the requisitionist, although in certain circumstances, the court may order that the expenses are met by the estate.

If application is received where the examinee is unfit to attend or to resume a PE which has previously been adjourned, the official receiver must write using form PECOE to advise of the deposit required in these circumstances. Any such application should be referred to the examiner.

11. Service and notice of the order

(Amended March 2012)

Once the order fixing the date for the PE is received from the court, a letter (form PEN) and a copy of the order (PEAO) must be served on the person to be examined as soon as is reasonably practical after the order for examination has been made, and should give at least 14 days notice of the examination. The letter should normally be sent by first class post and recorded delivery. Other means of service are permitted (e.g. personal service, D.X., fax, electronic delivery etc.), although local office practice should be adhered to. Notice must be sent to all known addresses and a certificate of service (court form N215) prepared in every case.

For further details on the different methods of service available please see Technical Manual Chapter 14 part 4.

The official receiver is also required to serve notice at least 14 days before the hearing on:  

  • any trustee/liquidator or special manager (form PENTL)
  • all known creditors, if appropriate (form PENCC)
  • in the case of a winding up, all known contributories (form PENCC)

The official receiver can apply to court for relief from sending notice to creditors and contributories and such direction should be sought where the PE has been called to enforce co-operation or where there are more than 50 creditors.

At least one week before the hearing the official receiver should consider sending a reminder letter to the examinee.

12. Advertisement

(Amended August 2010)

Changes to the Insolvency Rules regarding gazetting and other advertising of insolvency matters came into force on 6 April 2009. The changes have affected the advertisement of public examinations where the petition was presented before, on or after 6 April 2009. For advice and guidance regarding any pre 6 April 2009 cases please refer to the Case Help Manual part – Publication of Insolvency Information.

Cases where the petition was presented after 6 April 2009

The official receiver has discretion to gazette the PE at least 14 days before the hearing. It should be noted that although the official receiver can advertise the PE if he/she deems it appropriate, no other form of advertising, such as in a newspaper, can be done without also gazetting.

In a winding up, where the petition was presented before 6 April 2010, the notice may not appear until 7 days have elapsed since the examinee was served with the order. In cases where the petition was presented after 6 April 2010 if the examinee is a company director or secretary, the liquidator, the administrator, or the receiver or manager of the company, there should be no delay in processing the gazette and advertisement. If the examinee is anyone other than those listed, the advertisement may not appear until 5 business days have elapsed since the examinee was served with the order.

The Insolvency (Amendment) Rules 2010 has specified the content of these notices. Gazette and advertising notice templates have been created and these should be completed fully to comply with the content requirements of the rules. For all cases a Word template of the notice to newspaper (NFN1 or NFN 3) must be used. These forms and the gazette notices can be found as Word documents in the ‘Forms to be used’ section. For further information please see the CHM - Publication of Insolvency Information.

13. What happens when we need a transcript of the hearing?

Where a written record of a court hearing is considered necessary the official receiver will require the appointment of a shorthand writer. A shorthand writer can be appointed directly by a court to act generally in that court, in which case a global declaration covering all insolvency matters will have been given. If the official receiver wishes to employ his/her own shorthand writer he/she should apply to the court using document production form PESWA. For cases where the petition was presented on or after 6 April 2010 a Word template for form PESWA has been produced and can be found in the ‘forms to be used’ section. The costs of the shorthand writer must be met from the estate and the appointed shorthand writer must also make a declaration to the Court using document production form PESWD. For cases where the petition was presented on or after 6 April 2010 a Word template for form PESWD has been produced and can be found in the ‘forms to be used’ section. Once notification is received that the transcript of the examination has been prepared form PELRV (and PEVER if required) should be issued to the examinee.

14. What happens if the examinee co-operates before the hearing?

Where a public examination has been fixed because of non-surrender to the proceedings and the examinee subsequently surrenders and co-operates with the official receiver to an extent which makes a public examination unnecessary, the official receiver should apply to the court for a rescission of the order fixing the examination. The application should refer to the original order, briefly to the examinee’s subsequent conduct and state that in the circumstances a public examination would serve no useful purpose (form PEVOH).

If the examinee surrenders only a short time before the date of the hearing, consideration should be given to holding the examination as arranged, particularly where notice has been given to creditors or other parties or the examination has been advertised and there is no time to inform these parties that the examination will not now be held.

If a public examination has been held and adjourned but subsequent co-operation by the examinee makes the adjourned examination unnecessary, the court should be asked to declare the examination concluded.

15. Procedure at the hearing

The person being examined is under oath and must answer all the questions put to him, which are allowed by the court. Refusal to answer is a contempt of court. The examinee may be questioned by the official receiver or his/her representative, and also by any of the following:

  1. the trustee or liquidator
  2. any special manager 
  3. any creditor who has tendered a proof of debt
  4. a contributory, in a winding up.

The official receiver may consider it sufficient to obtain an undertaking from the examinee as regards future co-operation or more specific compliance. Form PEGUTC (available on the OROS Intranet site) may be used for this purpose and the court may make such an order in relation to these matters (form PEADJ).  

16. Results of the hearing

Where the examinee has attended the PE the court may make a number of decisions, namely that the hearing be:

  1. adjourned to a date to be fixed (PEFD), where for example, either the service was incorrect, further enquiries are needed, an order is obtained for compliance or where the examinee is unable to attend due to illness.
  2. adjourned generally (PEAG), where for example the examinee does not give adequate answers to questions put or it is intended to hold interviews with the examinee to obtain further information.
  3. concluded (PECC), where the reason for holding the PE has been satisfied.  

Where a public examination in bankruptcy is adjourned for any reason the official receiver may make a verbal application to suspend the operation of any automatic discharge period applicable until such time as he/she attends upon the official receiver and complies with his/her obligations (in pre 6 April 2010 cases the suspension of discharge application can only be made if the PE has been adjourned generally).

Forms PERES and PEVOH are available for use where either the official receiver wishes to restore the PE or the examinee has complied with his/her obligations.

Where the examinee fails to attend the PE, without a reasonable excuse, the official receiver should consider requesting the issue of a warrant for the examinee's arrest (form PEWA).

For further information see Technical Manual Chapter 13 part 7.

17. Differences between PEs and Suspension of Discharge Applications

PEs are held only where the official receiver is of the firm belief that the bankrupt is aware of the proceedings - i.e. where the petition was served personally or where the official receiver has received information which confirms that the bankrupt is at the address to which notices have been sent.

An application to suspend discharge, instead of a PE, should only be made when it has become apparent that the bankrupt is unaware of the bankruptcy order i.e. where every effort has been made to contact the bankrupt using all sources available even where the petition could not be served personally, or where all correspondence has been returned by the Post Office.

For further information on the procedure for suspension of discharge see Case Help Manual part: Discharge from Bankruptcy paragraph 8 and Procedure - suspension of automatic discharge. 

Where can I find out more? 

Insolvency Act 1986: 

Section 290 PE of a bankrupt 

Section 133 PE of company officers

Section 134 Enforcement of Section 133

Section 279(3) Discharge period

Insolvency Rules as amended by the Insolvency (Amendment) Rules 2010:

Rules 6.172 to 6.177 PE of a bankrupt

Rules 4.211 to 4.217 PE of company officers and others

Rule 7.16(3) Shorthand Writer Application by Official Receiver

Rule 9.4(6) Record of examination

Rules 12A.3 and 12A.17 Service of documents

Technical Manual: 

Chapter 5 - Publication of insolvency information 

Chapter - 13 Co-operation, non co-operation and enforcement of duty to co-operate

Chapter - 14 Public Examinations

Case Help Manual:

Discharge from Bankruptcy

Publication of insolvency information

LOIS Workbook:

Non Co-operation, Non Contact Process 

Forms to be used:

Gazette Notice –  Word template (company case)

Gazette Notice – Word template (bankruptcy case)

NFN1 – notice for newspaper – Public Examination (bankruptcy case) Word template  

NFN3 – notice for newspaper – Public Examination (company case) Word template 

PEN and PEAO - these forms replace separate LOIS forms and cover bankruptcy, partnership and company cases. LOIS/DOC1 will require you to choose the appropriate implementation for the particular circumstances of the case.

COP - Certificate of postage

LCAD - Letter covering advertisement 

NTB1 -  Notice to bankrupt(1)

PENCC -  Public Examination Notice to Creditor or Contributory

PENTL - Public Examination Notice to Trustee or Liquidator

PEGUTC -  General form of undertaking

PEADJ -  PE adjourned

PERES -  PE Resurrection

PESWA - PE Shorthand writer application

PESWA  PE Shorthand writer application for bankruptcy cases where the petition is presented on or after 6 April 2010

PESWA - PE Shorthand writer application for company cases where the petition is presented on or after 6 April 2010

PESWD -  PE Shorthand Writer Declaration

PESWD PE Shorthand writer declaration for bankruptcy cases where the petition is presented on or after 6 April 2010

PESWD PE Shorthand writer declaration for company cases where the petition is presented on or after 6 April 2010

PELRV -  Letter re verification

PEVER -  PE Verification

PEVOH -  PE Verification of Hearing

PEWA -  PE Warrants

PECOE -  PE costs and expenses

PEAR -  PE application for relief

PERTR -  PE response to requisition 

 

Public Examinations Flowchart  



Procedure

1. Receive instructions to call a PE.

2. Telephone court to arrange a date and time for the PE which will be held in open court, at least 5-6 weeks ahead. This may need to be longer depending on the requirements of local courts.

3. Note date and time on LOIS (CA22) PE information. Diarise details according to local office practice.

4. If appropriate, telephone shorthand writer to arrange attendance at PE. Note the name and address of the shorthand writer who will be attending.

5. Prepare copies of the form PEAO as follows:

  • Page 1 - the application - 2 copies
  • Page 2 - notice of date of hearing - 2 copies 
  • Page 3 - Order - at least 4 copies plus any extra copies for additional addresses supplied by the examinee or if an Insolvency Practitioner is in office

Once the application has been signed by the assistant official receiver/official receiver, retain one copy on the office file and send the remaining papers to court for sealing.

Request the court to retain one copy of all papers for their file and to seal and return the remaining papers. Diarise for a prompt reply from court.

6. Once the sealed orders are returned from court send notice (form PEN) to the person to be examined at each known address enclosing a sealed copy order of PE by first class post and recorded delivery (or by any other means as instructed). At least 14 days notice must be given.

7. Arrange for the person responsible for the outgoing post to complete form COP (certificate of postage) in duplicate, attaching exhibits "A"  "B" and "C".

8. File one form COP at court. The other remains on the office file.

9. In bankruptcy cases, if a decision is made to advertise, prepare forms LACD (letter covering advertisement) on LOIS (DO73), and notice of PE (NFN1). Word templates have been created and can be found in the ‘forms to be used section.

In company cases, if the PE is to be advertised, allow at least 5 business days (where appropriate) after service of the notice on the examinee before preparing forms LACD (letter covering advertisement) on LOIS (DO73), and notice of PE (NFN 3). In all company cases where the petition was presented before 6 April 2010 the advertisement may not appear until 7 days have elapsed since service of the notice on the examinee. Word templates have been created and can be found in the ‘forms to be used section.

The advertisement must appear at least 14 days before the day fixed for the hearing.

If the petition was presented on or after 6 April 2009 the OR may gazette the PE. No other form of advertising can be done without gazetting.

10. If a shorthand writer is to be present ensure that 2 copies of the forms PESWA and PESWD have been sealed and returned from Court or are prepared, ready to be taken to Court on the day of the hearing, according to local office practice.

At Least 18 Days Before Hearing

11. If trustee, special manager or liquidator in office send notice of PE form PENTL.

12. If creditors or contributories are to be informed of PE send form PENCC. Check LOIS (CA03) has been updated with the date advert published.

One Week Before The Hearing

13. Prepare the evidence for the PE in a small file to include :

  • copy of the bankruptcy/winding-up order and any draft orders as   deemed necessary
  • all PE papers, i.e. copies of all forms sent regarding the PE
  • any correspondence sent to the examinee returned by the Post Office 
  • forms appointing shorthand writer (PESWA, PESWD) if applicable.

14. Give file to official receiver/assistant official receiver at least 5 working days before the hearing. 

Day Of The PE 

15. Official receiver/assistant official receiver will return from court with result of hearing and PE papers.

16. Record result on LOIS PE information (CA22).

17. Allow 1 week for receipt of copy of order from court. Chase up if necessary. 

Order received from Court – PE adjourned to a future date (PEFD)

18. When order of result of PE received from court serve a copy of the order, sending by 1st class post (or by any other means as instructed) to the examinee at all known addresses.

19. Send a copy to the trustee / liquidator if appropriate.

20. Update LOIS (CA22) and return to step 3 of procedure.

Order received from Court  - PE adjourned generally or closed (PEAG and PECL)

21. When order of result of PE received from court serve a copy of the order, sending by 1st class post (or by any other means as instructed) to the examinee at all known addresses.

22. Send a copy to the trustee / liquidator if appropriate.

23. Update LOIS (CA22).

If bankrupt’s discharge has been suspended 

24. Mark front cover of office file "DISCHARGE SUSPENDED" and note LOIS (CA25)

If Shorthand Writer retained  

25. The shorthand writer will send a copy of the transcript in due course. It will be the examiner’s responsibility to check the shorthand writer’s notes and approve their remuneration. Issue forms PELRV and PEVER to the examinee, if appropriate

26. File all PE papers on the office file in chronological order.