Public Examinations in Liquidation and Bankruptcy

How Public Examinations Work

A corporate public examination obtains information about the company’s affairs, including transactions that could support recovery proceedings. The Australian Securities and Investments Commission (ASIC) explains that liquidators and administrators are eligible applicants. ASIC itself and people it authorises can also apply. A creditor seeking authorisation must use ASIC’s eligible-applicant process.

Under section 596A, a summons is mandatory when an eligible applicant applies and the person meets the officer or provisional-liquidator test. That includes qualifying former officeholders within the statutory two-year period. Section 596B gives the court discretion to examine others who may supply information, or whose involvement and possible misconduct meet its test. These are the two routes in Division 1 of Part 5.9 of the Corporations Act 2001.

For a public examination of directors, prepare for questions about decisions behind payments, who authorised them and what the company received. An examiner can use bank records to ask about the recipient of a transfer. The witness’s answer can identify an invoice or agreement that explains it. The broader liquidator investigation supplies the records and unresolved issues that lead to those questions.

Identify the Document You Have Received

An examination notice can mean several different documents. Read the issuer and the cited power before treating it as a court summons.

Document	Issuer and power	What it requires
Corporate examination summons	Court, section 596A or 596B	Attendance for questioning on oath or affirmation, with any specified books
Bankruptcy examination summons	Court or registrar, section 81	Attendance for a public examination, with any specified books
ASIC examination notice	ASIC, section 19 of the ASIC Act	Reasonable assistance and appearance before a specified member or staff member for examination on oath or affirmation
Official Receiver’s notice	Official Receiver, section 77C of the Bankruptcy Act	Information, production of books or attendance to give evidence, as the notice specifies

Section 19 of the ASIC Act concerns ASIC’s investigation process. It requires reasonable grounds to suspect or believe the recipient has relevant information. That examination is a separate process from the public court hearing discussed here.

The Official Receiver’s section 77C notice can require evidence before the Official Receiver or an authorised officer. The evidence can be required on oath. It is distinct from a section 81 court examination. A notice under section 596E of the Corporations Act informs creditors and eligible applicants about an examination already ordered.

Service and Listing in the Federal Court

The Federal Court (Corporations) Rules 2000 govern the corporate summons procedure. Rule 11.3 requires Form 17. Rule 11.4 requires service at least eight days before the examination, personally or in another manner the court directs. Rule 11.5 provides three days after service to apply for discharge, using an interlocutory process and supporting affidavit.

The court’s corporations practice note and Schedule 1 address allocation and listing. Examinations under sections 596A and 596B are among the matters registrars hear within delegated jurisdiction. Use the actual summons and orders for the hearing arrangements. Federal Court deadlines must not be assumed to govern a state Supreme Court summons.

The Bankruptcy Examination

A bankruptcy public examination under section 81 of the Bankruptcy Act 1966 concerns the bankrupt and their examinable affairs. The court or a registrar can issue a summons on the application of the trustee, the Official Receiver or a creditor with a provable debt.

The person examined can be the bankrupt or an examinable person. That includes someone believed to owe the bankrupt money, hold their property or have relevant information or books. Questioning can therefore reach a recipient of a disputed transfer. Section 81 permits examination after the bankruptcy ends, with limits on questions about subsequent events.

For preparation, connect each disputed movement to the account and the explanation sought. A trustee might need to establish whether a payment bought an asset or repaid a genuine debt. The trustee’s other information-gathering powers help obtain records before the hearing.

Documents Produced With the Summons

A corporate summons can require specified books in the examinee’s possession that relate to the company or its examinable affairs. Section 597 also permits production directions. Bankruptcy summonses can require relevant books, including books of an associated entity.

Build a document inventory against the summons schedule. Preserve the statements as received and record missing periods separately. Keep correspondence or invoices that explain disputed payments beside the relevant transaction. If a category is unclear or documents are unavailable, raise that issue through the lawyer handling compliance before the hearing.

Turn Statements Into Questions

A page-cited transaction schedule lets the examiner locate a payment and put a specific question to the witness. The schedule needs the account, amount and statement description, plus the PDF filename and page. Give each row a stable reference so the answer can be connected to the same transaction in the hearing notes.

In this hypothetical Australian-dollar example, a company’s statement shows two transfers to the same recipient over a fortnight.

Row	Statement entry	Source reference	Question to put
T014	$18,000 debit, description “Advance”	Company-account.pdf, PDF page 7	Who authorised this payment and what agreement supported it?
T021	$12,000 debit, same recipient	Company-account.pdf, PDF page 9	Why was a second payment made, and where is the corresponding invoice?

The entries establish payments. The questions seek the reason for them. Record the witness’s explanation beside each row and identify any further document they mention. A brief of evidence keeps the transaction schedule and supporting documents together for the legal team.

FinTrace saves hours of statement review when lawyers, trustees and forensic accountants prepare this financial material. The service turns large PDF bundles into a searchable Excel ledger and a readable findings report. It flags suspicious transactions and gives every finding its source PDF filename and page. That puts the statement evidence beside the question you want to ask.

Rights and Limits for the Examinee

For corporate examinations, section 597(12) removes self-incrimination as a ground for refusing an answer. Section 597(12A) protects a qualifying individual’s answer from use against them in criminal or penalty proceedings if they claim before answering. The answer must in fact be one that might tend to incriminate them or make them liable to a penalty. Exceptions cover proceedings under section 597 and proceedings about the answer’s falsity. This is not general immunity from civil claims or investigation.

The bankrupt’s position differs. Under section 81(11AA), subject to a contrary direction, the bankrupt cannot refuse an answer merely because it might incriminate them. Section 81 does not contain the same use-immunity mechanism as section 597(12A). Identify the statutory process before advising on an objection.

Corporate examinees can have a lawyer ask questions the court permits to explain or qualify answers. Section 81 expressly permits legal representation and re-examination in bankruptcy. Discuss how any claim must be raised before questioning begins. A witness must distinguish what they recall from what a document shows, and must not invent an explanation for an unfamiliar payment.

Challenging an Examination Summons

A challenge needs grounds tied to the statutory power or an abuse of the court’s process. Evidence that the applicant’s predominant purpose is foreign to the statutory process can support an abuse argument. The fact that an applicant wants material for private litigation does not establish abuse by itself.

In Walton v Arrium, the High Court’s judgment summary, shareholders sought an examination to investigate potential claims against directors and auditors. The High Court allowed the appeal. It held that section 596A’s purpose extends beyond benefiting the company and its creditors. A claim enforcing the law can be a legitimate purpose.

Give the lawyer the summons, its complete document schedule and the service details immediately. Assess the grounds for challenge alongside the preparation work. If the examination proceeds, organise the disputed transactions and supporting records so the witness can answer the actual questions put to them.