With over ten years’ experience having funded in excess of one hundred Public Examinations, we have found Examination process to be a very worthwhile initial avenue in the legal process.
As opposed to litigation, Public Examinations are inquisitorial in nature and allow a liquidator, administrator or other eligible applicant to investigate the examinable affairs of a company by examining certain people who can provide information on the ‘examinable affairs’ of the company.
Public Examinations provide an opportunity for your lawyers in the first instance to seek production of all documentation relevant to the potential claim, as well as providing an avenue to examine the potential target in any claim in order to hear firsthand what any potential defences may be.
In many instances matters are able to be settled commercially either before, during or shortly afterwar the Public Examination, once all relevant facts come to light.
Who can be examined?
The Corporations Act (Cth) 2001 (the Act) provides for two different types of examinations, mandatory examinations and discretionary examinations.
Mandatory examinations (under section 596A of the Act) are issued to ‘officers’ of the company, for example a director of the company. Provided the criteria of section 596A of the Act is met, the Court has no discretion and is required to issue the summons for examination.
In contrast, discretionary examinations (under section 596B of the Act) are broader, more far reaching and extend beyond ‘officers’ of the company. A discretionary examination can be issued to anyone who may be able to give information about the company’s examinable affairs.
Unlike mandatory examinations, the Court has discretion and will need to be satisfied that the person:
(i) has taken part or been concerned in examinable affairs of the corporation and has been, or may have been, guilty of misconduct in relation to the corporation; or
(ii) may be able to give information about examinable affairs of the corporation.
As a National firm we have funded Public Examinations in Melbourne, Canberra, Sydney, Brisbane, Adelaide and Perth.