January 1993

Part 1 - Private Examination

Note: The notes references in this chapter have been updated to reflect the changes made to the Insolvency Rules as a result of the Insolvency (Amendment) Rules 2010 which came into force on 6 April 2010. 

23.1 Basis of examination (amended June 2007)

In the majority of cases the official receiver will obtain information and secure the production of documents from company officers, bankrupts, debtors and others in the normal course of his/her inquiries. However, where there is a lack of co-operation but either the circumstances of the case do not merit a public examination or the public examination route is inapplicable because the person concerned is not the bankrupt or is not concerned in the liquidating company’s management, either as an officer or otherwise, the official receiver may consider applying to the court for an order for what is commonly known as a private examination.

The Court of Appeal in the case of Pantmaenog Timber Company Limited (Pantmaenog) reported at Official Receiver (Appellant) v Wadge Rapps & Hunt (a firm) and another and two other actions [2003] UKHL 49 held that the official receiver could use the compulsive powers under section 236 (private examination) for the purpose of considering and conducting disqualification investigations and proceedings, but that those powers are subject to the discretion of the court as to whether to allow their use in such circumstances.

Consideration of the use of a private examination solely for the purpose of disqualification related investigations should be the exception rather than the rule. It will mostly be appropriate where a bank/solicitor etc is willing to provide the information but only subject to a court order. In the period prior to the issue of proceedings, and particularly in cases targeted for an investigation aimed at the preparation of a draft disqualification report, great care should be taken when considering whether to use section 236 against directors or their associates or advisors. In these circumstances if the official receiver has any concerns that the application could be construed as being solely for the purposes of a disqualification, the Investigations and Enforcement Technical Team (IETT) should be approached for advice before the application is issued.

In cases where disqualification proceedings have been issued the usual means of obtaining further information to assist in the conduct or further consideration of the proceedings will be by use of a witness summons in the disqualification proceedings rather than by use of a private examination in the liquidation. If the official receiver wishes to use a private examination for this purpose post issue of disqualification proceedings, the IETT should be approached for advice first. (See also paragraphs 11.62, 13.120 and 15.71)

Note: [s236(2), 251N or 366(1)]

23.2 Witness statements (amended October 2010)

The official receiver may also apply for an order against the person concerned requiring that he/she: 

• submit to the court an account of his/her dealings with the insolvent; or
• produce any books, papers or other records relating to the insolvent in his/her possession or under his/her control.

An account submitted to the court under these provisions in a bankruptcy or liquidation must be contained in a witness statement verified by a statement of truth.

The persons who may be so ordered by the court include;  

• any such person, as detailed in section 236(2) of the Insolvency Act 1986 in winding up proceedings including; 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.
• or as detailed in section 366(1)(b) and (c) of the Insolvency Act 1986 in bankruptcy proceedings including; any person known or believed to have any property comprised in the bankrupt's estate in his possession or to be indebted to the bankrupt; any person appearing to the court to be able to give information concerning the bankrupt or the bankrupt's dealings, affairs or property.
• or as detailed in section 251N(2)(c) of the Insolvency Act 1986 in respect of a debt relief order; 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.

A witness statement verified by a statement of truth may not be requested of a person falling under section 366(1)(a) of the Insolvency Act 1986 including the bankrupt or his/her spouse or civil partner, except where they also meet the requirements of sections 366(1)(b) or (c) of the Insolvency Act 1986.

Notes: [s236(2) and (3) or 251N(2) ,(3) and (3A)or 366(1); R9.3]

23.3 Terminology

The person in respect of whom an order is applied for is known as "the respondent".

Notes: [R9.1(2)]

23.4 Possible applicants (amended October 2010)

Where a winding-up or bankruptcy order has been made, the official receiver (whether or not he/she is liquidator or trustee) may apply for any of the orders mentioned in paragraphs 23.1 and 23.2 above. He/she may also apply where a debt relief order has been made or he/she is acting as provisional liquidator of a company or as interim receiver of the property of a debtor (see paragraphs 2.26 and 2.27 respectively). In a winding up or bankruptcy the right to apply is also given specifically to liquidators and trustees. In relation to a company an administrative receiver may also apply, and it is therefore possible that such an application may be made where a company in liquidation is also in administrative receivership.

Note: [s236 or 251N or 366]

23.5 Who can be examined (amended October 2010)

The court can summon to appear before it the following:

(a) in a winding up:

I. any officer of the company;

II. any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company;

III. any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company;

(b) in a bankruptcy:

I. the bankrupt or the bankrupt’s spouse/civil partner or former spouse/civil partner;

II. any person known or believed to have in his possession any property comprised in the bankrupt’s estate or to be indebted to the bankrupt;

III. any person appearing to the court to be able to give information concerning the bankrupt or the bankrupt’s dealings, affairs or property.

(c)   in a debt relief order:

I. the debtor;

II. the debtor’s spouse/civil partner or former spouse/civil partner

III. 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.

The term "property" mentioned above 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. (A "thing in action", sometimes referred to as a "chose in action", is that "when any man hath cause or may bring an action for some duty due to him", e.g. copyright, debts etc.)

Where the respondent is outside the jurisdiction of the court, see paragraph 23.29.

Notes: [s236(2)] [251N(2)] [366(1)][s436(1)]

23.6 Interim receiver

Where an application is made by an interim receiver, references in the preceding paragraph to the bankrupt and his/her estate should be taken as referring to the debtor and his/her property.

Note: [s368(b)]

23.7 Respondent’s expenses

Where an examination is ordered, the respondent must be offered from the estate a reasonable sum in respect of his/her travelling expenses incurred in connection with his/her attendance, even if this means incurring a debit balance on the estate. He/she should be asked well before the proposed hearing whether he/she requires an advance for this purpose.

Notes: [R9.6(4)]

23.8 Court order

Whether the respondent is allowed any other expenses (such as a witness fee, compensation for loss of earnings, etc) is a matter for the court. In this context, if a solicitor is examined, the Council of the Law Society has advised its members that they should claim their conduct money and professional witness allowance under the Rules of the Supreme Court, regardless of whether the examination is in the High Court or a county court.

23.9 Grounds for application- relation to costs

The official receiver should bear in mind that if he/she applies for a private examination in his/her capacity as a liquidator or trustee he/she may be made personally liable for costs. To avoid this possibility the official receiver should ensure that the reasons stated in the application for the holding of the examination can be related to the official receiver’s statutory office or that of him/her as provisional liquidator or interim receiver, if he/she is acting in that capacity (see also paragraph 23.27).

Notes: [R9.6(5)] [R9.2(1)]

23.10 Form and contents of application (amended October 2010)

The official receiver’s application should be in writing and specify the grounds on which it is being made. It must also clearly specify the name of the respondent.

Any document showing the grounds for the application will not be open to inspection on the court file, other than by order of the court, to anyone except the applicant or anyone who could have applied for such an order in respect of the affairs of the same insolvent. Following a decision of the Court of Appeal, (Re British & Commonwealth Holdings plc [1992] BCC 165), the court will allow inspection of a document specifying the grounds of an application by the respondent where the respondent applies to set aside an order for a private examination, unless the official receiver can satisfy the court that the grounds should remain confidential. Conversely, where there is no need for the application to remain confidential, the official receiver should consider voluntarily disclosing it to the respondent.

The official receiver’s application may, and normally should, be made without notice to any other party. The official receiver is not bound to do more than show the court that there is a probability, based on the known facts, that the person whose examination is sought is capable of giving important information. The application must also indicate whether the order sought is for the proposed respondent to do all or any of the following: 

1. appear before the court;
2. clarify any matter which is in dispute in the proceedings or give additional information in relation to any such matter (the court may direct that the information provided must not be used for any purpose except for that of the proceedings in which it is given)
3. submit witness statements; particulars should be given of the matters to be included; or,
4. produce books, papers and other records; the relevant records should be specified.

Notes: [R9.5(3)] [R9.2(3)][R9.2(1) and (4)] [Civil Procedure Rules 1998, part 18]

23.11 Shorthand writer

The official receiver should also apply for the appointment of a shorthand writer to take down the evidence (see also Chapters 14 Part 9 and 32.3 Part 2).

Notes: [R7.16 to7.18]

23.12 Court’s discretion

An order for a private examination is a matter for the court’s discretion and it should be borne in mind that the court is unlikely to make the order where it appears to be vexatious or oppressive (i.e. excessively harsh or burdensome) to the respondent. Guidelines on the exercise of the court’s discretion have been provided by the Court of Appeal (Re British & Commonwealth Holdings plc (No 2) [1992] BCC 172) and approved by the House of Lords. These are that courts must balance the importance to the insolvency office-holder of obtaining the information against the degree of oppression placed on the respondent. Relevant matters which courts should consider include: 

1. that the case for ordering a private examination against an officer or former officer of a company is usually stronger than it would be against a third party, because officers owe a fiduciary duty to the company and are under a statutory duty to assist the insolvency officer-holder (bankrupts, and debtors who have applied for a debt relief order, have a similar statutory duty to the official receiver);
2. that if, by giving the information sought, a third party risks exposing himself/herself to liability, that involves an element of oppression;
3. that an order for an oral examination is more likely to be oppressive than an order for the production of documents; and
4. that if someone is suspected of wrongdoing, especially fraud, it is oppressive to require him/her to prove the case against himself/herself on oath before any proceedings are brought. (Nevertheless the fact that proceedings have started or are about to start against an individual does not necessarily prevent a private examination of that person and it may assist the official receiver in obtaining a private examination of such a person if the official receiver provides the court with a list of topics upon which he/she wishes to question that person (Re Arrows Ltd (No 2) [1992] BCC 446)).

Notes: [s235] [s251J][s291]

23.13 The court’s order

If it orders an examination the court will specify its time and date, which will be at least 14 days from the date of the order, and the place where it will be held. If the respondent is ordered to submit witness statements, the order will specify what must be covered in those witness statements and when they must be submitted to the court. If the order is to produce books, papers or other records, it will specify the time and manner in which they are to be produced.

Notes: [R9.3][Form 9.1 - order under section 236, 251N or 366 of the IA86]

23.14 Service of order

Any order which the court makes on the official receiver’s application must be served on the respondent as soon as practicable, and service must be personal unless the court orders otherwise.

Notes: [R9.3(5)]

23.15 Court’s enforcement powers

The court’s power to hold private examinations is supplemented by sections 237 and 367, which give it additional powers to make orders covering matters which come to light as a result of such an examination. In particular they provide for the court, on application by the person who seeks the examination, to order delivery of property or the repayment of a debt. If a respondent gives undertakings to a county court, e.g. that he/she will provide specified information to the official receiver within a given period, these undertakings should be recorded on a general form of undertaking (Form N117) and the court asked to order that the respondent authenticate the form before leaving the court.

23.16 Examinee’s failure to attend

If there are reasonable grounds for believing that a person has absconded or is about to abscond in order to avoid being examined, the court may issue a warrant for his/her arrest and for the seizure of records, property, etc in his/her possession. Where the official receiver becomes aware that attendance is unlikely, he/she should apply to the court without notice to any other party for an order that the person concerned should surrender his/her passport or, exceptionally, for a warrant of arrest and/or seizure. If records or property are to be seized the official receiver should ask for them to be delivered to him/her or otherwise dealt with according to his/her instructions. The official receiver should show in his/her application that service of the order on the respondent was properly effected and that a reasonable sum was offered for expenses. Alternatively, where a private examination has been fixed, the court has power under section 37(1) of the Supreme Court Act 1981 to restrain the respondent from leaving the jurisdiction. Where the official receiver has grounds to believe that the respondent will not attend the examination, or where the examinee has been abroad and has returned to the jurisdiction, the official receiver should consider making an application to the court without notice to any other party for such a restraining order.

For further information regarding powers of arrest and enforcement of warrants, see Chapter 13, Part 7 and for information on absconding or leaving the jurisdiction, see Chapter 13, Part 8.

Notes: [s236(4) and (5) or 366(2) and (3) or s251N(4) and (5)]

23.17 Withdrawal of application

In certain instances a person capable of giving information to the official receiver may feel that he/she can only do so if he/she becomes subject to an examination, so that when the order for the private examination is served on him/her, he/she may then supply the requested information. Where a bank is involved, for instance, inspection of accounts is normally allowed on production of the court order. In cases where prior to the examination the information sought is given, or required documents are surrendered, or there is an admission of indebtedness due to the insolvent, the official receiver should inform the court and seek permission to withdraw his/her application. If an order has already been made, the court can be asked to rescind it. The shorthand writer should also be informed that the examination will not proceed.

Notes: [R7.47(1) or s375(1)]

23.18 Procedure at hearing

At the examination the official receiver or assistant official receiver as applicant should attend in person, although he/she may be represented by a solicitor with or without counsel, and may put such questions to the respondent as the court will allow. The official receiver should normally only employ counsel where the assets in the estate are sufficient to cover the cost of doing so or adequate funds are provided by a third party. Where the official receiver considers that the exceptional circumstances of the case require the employment of counsel and there are no or insufficient funds, these circumstances should be reported to Technical Section before a debit balance is incurred.

Notes: [R9.4(1)]

23.19 Respondent’s legal representation

The respondent may, at his/her own expense, employ a solicitor with or without counsel, to put such questions as the court allows to enable him/her to explain or qualify his/her answers. The respondent’s counsel may also make representations on his/her behalf.

Notes: [R9.4(5)]

23.20 Legal professional privilege

The inclusion in sections 291(1)(b) and 311(1) of the words "(including any which would be privileged from disclosure in any proceedings)" effectively avoids claims by solicitors who have acted for bankrupts that the legal professional privilege arising from the solicitor/client relationship precludes their producing, including in the context of a private examination in relation to the bankrupt, documents which might otherwise be subject to such privilege. In a winding up no such considerations arise in any event, since the company was the client and the liquidator will be in control of the company instead of its directors and can therefore authorise production.

23.21 Participants in the examination (amended October 2010)

In addition to the questioning by the official receiver, anyone else who could have applied for an examination (see paragraph 23.4) and any creditor who has provided information on which the application was made may, with the permission of the court (and provided that the official receiver as applicant does not object), attend the examination and put questions to the respondent through the official receiver. The official receiver should not discourage such participation, which may elicit further information from the respondent, but he/she should, before the examination, seek to obtain details of the substance of the questions to ensure that they are relevant and not over-lengthy.

Notes: [R9.4(2)]

23.22 Clarification and additional information (amended October 2010)

If the respondent is required to clarify any matter or give additional information, the court will direct which of the questions he/she is required to answer and which of his/her answers, if any, should be made in a witness statement. He/she may be examined on oath and may not refuse to answer a question on the ground of self-incrimination if the court decides that it should be answered.

Notes: [s237(4) or 367(4)][R9.4(3)]

23.23 Record of examination

A written record of the examination will be taken by the shorthand writer and will be read over either to or by the respondent and authenticated by him/her at a venue fixed by the court. Unlike the record of a public examination, there is no need for verification by a statement of truth.

Note: [R9.4(6)]

23.24 Written record as evidence

The written record may in any proceedings, whether under the Insolvency Act or otherwise, be used as evidence against the respondent of any statement made by him/her in the course of the examination. This includes proceedings under the Company Directors Disqualification Act.

Notes: [R9.4(7)]

23.25 Restricted access to written record, etc

Unless the court gives an alternative direction, the written record of questions put to the respondent and the answers given, and any witness statements submitted in connection with the examination will not be put on the court file, nor will they be open to inspection, other than by order of the court, to anyone except the applicant for the examination or anyone who could have applied for the examination. The court can also give directions as to the custody and inspection of any documents or the provision of copies or extracts from them. Further guidance on disclosure of information generally is given in Chapter 47.

Notes: [R9.5]

23.26 Warrants and arrest of respondent (amended October 2010)

Where a respondent fails to attend an examination, or there are grounds to believe that he/she is about to abscond to avoid examination, the court may issue a warrant for his/her arrest.

If the respondent is arrested, the person arresting him/her (who will be a court official or a police officer) is obliged to bring him/her before the court which issued the warrant immediately for examination rather than be committed to prison. In practice this may not always be possible, in which case the arrested person will be taken into prison custody and the official receiver should apply to the court for an early hearing of the examination and for the respondent to be brought from prison at the relevant time or earlier if the court is willing to consider releasing the respondent against suitable undertakings.

For further information regarding powers of arrest and enforcement of warrants, see Chapter 13, Part 7 and for information on absconding or leaving the jurisdiction, see Chapter 13, Part 8

Notes: [Form PEWA and WARPD – pre 6 April 2010 petition cases] [County Court Civil Forms N288 (Order to produce prisoner) and N40A (Warrant of Arrest) – for post 6 April 2010 petition cases)] [R7.23][s236(4) and (5) or 366(2) and (3)] [251N(4) and (5)]

23.27 Costs of examination

The court may make the respondent responsible for the costs of the examination where his/her refusal to provide the required information was unjustifiable. The court may also make the respondent responsible for such costs where it orders the delivery of property or payment of a debt. In other cases, unless the court otherwise orders, the costs will be paid from the insolvent’s estate and the availability of funds in the estate to pay these costs should be carefully considered before proceeding with a private examination. See also paragraph 23.9 as to the possibility of the official receiver being made responsible for the payment of costs.

Notes: [R9.6(1)] [R9.6(2)]

23.28 Documents from HM Revenue and Customs (HMRC)

As with a public examination, a private examination may be used in a bankruptcy to obtain a court order for the production of documents from HMRC which would otherwise be confidential, but only where a bankruptcy order has been made. See Chapter 13 Part 10 for full details.

Note: [s369] [form IRDPN]

23.29 Persons outside the court’s jurisdiction

Where a respondent is outside the jurisdiction of the court in England and Wales but within another part of the United Kingdom the court may order that the respondent be examined in that other part, and section 426 (see Chapter 42, Part 4) may be used to enforce that order. Where the respondent is outside the United Kingdom the court may make a similar order but will normally not exercise its discretion to do so where there is no means of enforcing the order (Re Tucker (a bankrupt), ex parte Tucker [1988] 1 All ER 603 and Re Seagull Manufacturing Co Ltd [1991] BCC 550).

Notes: [s237(3) or 367(3)]