If you or someone you know has been served with a summons to appear at an examination by a liquidator, it is important you are aware of your obligations and the implications.

  1. What is a liquidator’s examination?

It is a proceeding where liquidators can examine people under oath and require them to produce documents to assist the liquidator with their investigation into the affairs of the company in liquidation.

  1. Who can be examined?

  • If it is a mandatory examination (under section 596A of the Corporations Act 2001) - an officer or provisional liquidator of the company (for example, a director or secretary of the company) can be examined.
  • If it is a discretionary examination (under section 596B of the Corporations Act 2001), the following people can be examined:
    • (i) A person who has taken part or been concerned in examinable affairs of the corporation; or
    • (ii) A person who may be able to give information about examinable affairs of the corporation (this is very wide and can extend to almost anyone with knowledge of the company).
  1. Who gets to watch?

Anyone (including the media / ASIC). The only exception is if there is a good reason otherwise and it is supported by affidavit material.

  1. What can evidence be used for?

Anyone who is examined will be provided with a transcript of their evidence that they will need to sign to confirm its accuracy.

The evidence can be used against them (or others) in any civil proceedings brought by the liquidator.

If the person providing evidence invokes the privilege against self-incrimination (explained below), this will prevent the evidence from being used against them in criminal proceedings.

  1. What is "privileged"?

Those providing evidence are entitled to invoke the privilege against self-incrimination in response to any question asked in an examination.  It is important to note that: 

  • they are not entitled to refuse to answer a question on that ground.
  • In practice, the person providing evidence should say the word “privilege” before every answer in order to ensure that the privilege applies.
  1. Failure to attend the examination

If someone who is called to provide evidence fails to attend the examination, they may:

  • be charged with a criminal offence carrying a maximum penalty of two years imprisonment; and / or
  • have a warrant issued for arrest.

If the person called to provide evidence cannot appear on medical grounds, they should contact the Court and the solicitor who served the summons as soon as possible and provide medical evidence explaining why they cannot appear.

Lessons

Due to the fact that appearing at a liquidator’s examination requires giving evidence under oath and that evidence may be used against the person in a civil proceeding it is important that those attending know their rights and obligations before attending Court.

About the Author

Catherine Ballantyne

Special Counsel
A business disputes specialist, Catherine is a trusted advisor to businesses and individuals in obtaining successful outcomes. Businesses rely on Catherine as a trusted advisor as well as lawyer in guiding them through complex litigation and disputes.

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