Parties involved in private examinations

Part 1

Parties involved in private examinations

March 2011 

23.2 Introduction

In addition to the provisions allowing for the public examination of bankrupts company officers, and others (see chapter 14), the Insolvency Act 1986 allows a person (see paragraphs 23.8 to 23.10) to be summoned to appear before the court (see paragraph 23.30), produce a witness statement (see paragraph 23.28) or to produce various documents (see paragraph 23.23), by an office-holder (see paragraph 23.4). Such an application to court is commonly referred to as a private examination. For the remainder of the chapter the term private examination will be used as a shorthand to describe any application for a person to be summoned before the court to provide information, to provide a witness statement or to produce various documents in their possession.  

 

23.3 Application for a private examination - the official receiver

The official receiver, in his capacity as official receiver, may apply to the court for a private examination in a compulsory liquidation [Note 1] or a bankruptcy [Note 2] whether or not he/she is liquidator or trustee. The official receiver, as statutory office-holder, can apply to the court for a private examination where a debt relief order has been made [Note 3], or a company is in provisional liquidation [Note 4] or the court appoints an interim receiver [Note 5].

 

23.4 Who may apply for a private examination?

As we have seen (paragraph 24.3) the official receiver, as a statutory office-holder, can apply to the court for a private examination. In addition the following office-holders may make an application to court:

 

23.5 The applicant

The office-holder, whether the official receiver or any of those persons mentioned in paragraph 23.4, is referred to as the “applicant”.

 

23.6 Interim receiver

Where the application is made by an interim receiver, any references in this chapter to the bankrupt and his/her estate should be taken as referring to the debtor and his/her property [Note 10].

 

23.7 Administrative receivers and private examinations

An administrative receiver of a company may apply to the court for a private examination [Note 11]. Where a company is in liquidation and in administrative receivership the administrative receiver may apply to the court for a private examination to assist asset recovery [Note 12].

 

23.­8 Who can be examined – companies

On the application of the official receiver, or relevant office-holder, the court can summon to appear before it

  • any officer of the company; 
  • any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company or, 
  • any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company [Note 13].

 

23.9 Who can be examined – bankruptcy

On the application of the official receiver, or relevant office-holder, the court can summon to appear before it;

  • the bankrupt,
  • the bankrupt’s spouse/civil partner,
  • the bankrupt’s former spouse/civil partner,
  • any person known or believed to have in his possession any property comprised in the bankrupt’s estate,
  • any person known or believed to be indebted to the bankrupt or 
  • any person whom the court thinks capable of providing information about the bankrupt or the bankrupt’s dealings, affairs or property [Note 14].

 

23.10 Who can be examined – debt relief orders

On the application of the official receiver, or relevant office-holder, the court can summon to appear before it;

  • the debtor, 
  • the debtor’s spouse/civil partner,
  • the debtor’s former spouse/civil partner, or
  • any person appearing to the court to be able to give information or assistance concerning the debtor or the debtor’s dealings, affairs or property [Note 15].

 

23.11 Private examination – partnership winding up

Where a partnership has been wound up as an unregistered company the official receiver or relevant office-holder can apply to the court for a private examination of a person mentioned in paragraph 23.8 [Note 16]. If individual bankruptcy orders are also made against at least one of the partners then the official receiver or relevant office-holder can apply to the court in the bankruptcy proceedings for the production of documents by, or a private examination of, a person mentioned in paragraph 23.9 [Note 17]. Please see chapter 53 for further information about partnerships.

 

23.12 Private examination – partnership members bankruptcy petition

If a joint bankruptcy petition by the members is presented without winding-up the partnership as an unregistered company, the official receiver or relevant office-holder can apply to the court for a private examination of, a person mentioned in paragraph 23.9 [Note 18]. Please see chapter 53 for further information about partnerships.

  

23.­13 Definition of property

The term "property" mentioned in paragraph 23.8 and paragraph 23.9 has a wide meaning and includes money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent, arising out of, or incidental to, property [Note 19].

 

23.14 Things in action

Mozley & Whitely’s Law dictionary states that things in action “are not immediately available to the owner without the consent of another person, whose refusal will give a right of action.”  Examples of things in action are a debt, a right arising under a trust, a right to overdraw a bank account etc. For further information on rights in action see Chapter 31.9.

 

23.15 The respondent

A person against whom an application for a private examination is made is known as "the respondent" [Note 20].

 

23.16  Respondents outside the court’s jurisdiction

Where the respondent resides outside the jurisdiction of the court in England and Wales but lives within another part of the United Kingdom an order that the respondent be examined in that other part may be made [Note 21].  The order may be enforced by the court in the relevant part of the United Kingdom as if it were made by that court [Note 22]. For further information see Chapter 42, Part 4.

 

23.17 Respondents outside the United Kingdom

Where the respondent is residing outside the United Kingdom the court may make an order that the respondent be examined in any part of the United Kingdom where he/she may be, or in a place outside the United Kingdom [Note 23]. It was held in Re Tucker (a bankrupt), ex parte Tucker [1988] 2 W.L.R. 748  and  Re Seagull Manufacturing Co Ltd [1991] BCC 550 that an order for a private examination of a respondent outside of the jurisdiction of the court may be made, but an order will only be made where there is likely to be co-operation from the foreign court. This is generally referred to as partial extra-territoriality.

 

23.18 Private examinations outside the United Kingdom

The number of countries where it may be possible to hold a private examination increased due to The EC Regulation on Insolvency Proceedings 2000 (for further information see Chapter 41), which covers the European Union (with the exception of Denmark), and The UNCITRAL Model Law on Cross-Border Insolvency (for further information see Chapter 42). A list of countries covered by The UNCITRAL Model Law on Cross-Border Insolvency is provided in paragraphs 42.8, 42.11 and 42.35. However, the holding of a private examination outside the United Kingdom is not  straightforward and will be influenced by the local legal system.

 

23.19 Technical Section’s agreement required

In order to hold a private examination outside of the United Kingdom the official receiver will need specialist legal advice and will have to take into account the practical consequences and costs of conducting an examination in a foreign country. The circumstances in which a private examination outside the United Kingdom will be held are limited and as a consequence contact should be made with Technical Section before making such an application.

  

23.20 Current legal position (2011)

The judge in Re Casterbridge Properties Ltd (in liq.) Jeeves v Official Receiver [2002] B.C.C. 453 stated in passing that an application for a private examination may have full extra-territoriality enabling courts to summon a respondent residing outside the United Kingdom to appear before it and the court cases referred to in paragraph 23.17 were not binding. An application for a private examination may be held by the court to have full extra-territoriality at sometime in the future. In the meantime the advice provided in paragraph 23.19 should be followed.  

 

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