What is this document?
An examination order is a document issued by a court compelling a person to attend court to answer questions and provide documents about the affairs of a bankrupt or an insolvent company.
The examinable affairs are any information related to financial transactions, business affairs, management and property dealings associated with the bankrupt or the insolvent company.
An examination is an inquisitorial process where the examinee is asked questions to help the trustee (in bankruptcies) or the liquidator (in corporate insolvency) discover information about the examinable affairs. This information may be used in future civil proceedings.
In a bankruptcy, an examination may be sought through the application of a creditor, the Official Receiver or the trustee. In corporate insolvency, the eligible applicants are the liquidator, ASIC, a provisional liquidator, a voluntary administrator or administrator of a deed of company arrangement, or a person authorised by ASIC.
Examinations are authorised under ss 596A or 596B of the Corporations Act 2001 (Cth) or s 81 of the Bankruptcy Act 1966 (Cth).
What are the options for a response?
If you receive an examination order you must produce the documents required and attend the court at the specified date and time.
Before attending the examination, you must provide all the documents determined in the court examination order. If there are documents which you can’t provide, you need to explain the reasons (e.g. you can’t afford the costs to obtain the document). If you don’t have the document in your custody, possession or control, you can’t provide it.
During the examination, because of its inquisitorial nature, there is no scope for negotiations, and you must answer every question asked, regardless of whether your answer is self-incriminating. However, you may, before answering a question, claim protection against self-incrimination, so your words or any information derived from your answer may not be admissible as evidence against you in a criminal proceeding or a proceeding for the imposition of a penalty.
What is the legal effect of ignoring it?
Failing to attend an examination or produce documents without a reasonable excuse is considered a contempt of court. This may lead to the court issuing a warrant for your arrest.
Contempt of court is an act of disobedience that opposes or defies the authority, justice, and dignity of the court.
Reasonable excuses for not attending an examination usually comprise only of the following:
- Illness: if you are sick, you must provide a doctor’s certificate and contact the court as soon as possible – preferably before the examination date; or
- Trip abroad: it may be considered a valid excuse if it was booked before you received the order and if you prove it won’t be possible to attend by teleconference.
In these cases, the examination may be scheduled to a new date.
What documents and information do you need to give your lawyer?
If you have been served with a court examination order, you should seek legal advice as soon as possible and provide your lawyer with:
- the examination order;
- any document requested in the order;
- information regarding any document which was requested in the order that you are not able to provide;
- information regarding your own or your company’s financial situation.