Key Takeaways
• A liquidator can compel any former director, officer, or business associate to attend a public examination under sections 596A and 596B of the Corporations Act 2001 (Cth) — attendance is mandatory, not optional
• The examination is conducted on oath in open court: the transcript is a public document and can be used in civil proceedings, ASIC enforcement actions, and criminal proceedings
• Failure to attend without a lawful excuse is contempt of court, which carries the risk of arrest, fines, or imprisonment
• Self-incrimination is not a complete protection — you can be compelled to answer questions even if answers tend to incriminate you in federal proceedings
• Legal representation at public examinations is not optional for any director who faces potential civil or criminal exposure
When a company goes into liquidation, one of the first questions a liquidator asks is: where did the assets go? To find out, liquidators have access to a suite of powerful investigative tools under the Corporations Act 2001 (Cth). The most confronting of these — and the one that catches many former directors completely off guard — is the public examination.
Unlike a voluntary interview or a request for documents, a public examination is a court-supervised proceeding conducted under oath in open court. If you receive an examination summons, you are legally required to attend, produce documents, and answer questions. It is not an invitation. It is not optional. And the answers you give on the day can — and regularly do — form the foundation of subsequent claims against you personally.
This guide explains how public examinations work, who can be summoned, what your rights and limitations are, and what you must do if you receive a summons. Boss Lawyers’ insolvency lawyers in Brisbane and director dispute lawyers regularly represent directors and officers at public examinations and in connected proceedings.
What Is a Public Examination?
A public examination is a court-ordered hearing at which a person is compelled to give sworn evidence about the examinable affairs of a company that is being wound up or has been wound up. It is governed by sections 596A, 596B, and 597 of the Corporations Act 2001 (Cth), along with Division 1 of Part 5.9 of the Act.
The term “public” is deliberate: the examination is held in open court (unless the court orders otherwise), the transcript is a public record, and creditors, ASIC, and members of the public are all entitled to attend. This distinguishes a public examination from a private examination (which is less common and conducted before an examiner in private).
Public examinations can be held in the Federal Court of Australia or the Supreme Court of a state or territory. In Queensland, the Supreme Court of Queensland regularly conducts public examinations, as does the Federal Court sitting in Brisbane.
Section 596A vs Section 596B: Two Legal Bases
The Corporations Act provides two distinct pathways for obtaining a public examination order:
Section 596A — Examination of Officers (As of Right)
Under section 596A, an eligible applicant — including the liquidator, a creditor authorised by the liquidator, or ASIC — is entitled to obtain a court order for the public examination of any person who was an officer or provisional liquidator of the corporation at a time relevant to the winding up. This is an as-of-right provision: the court must make the order if the applicant is eligible. No threshold of suspicion or good reason needs to be shown.
“Officer” is defined broadly under section 9 of the Corporations Act to include directors, company secretaries, and anyone who participates in making major decisions or influences the financial standing of the company — capturing shadow directors and de facto directors as well as formally appointed ones.
Section 596B — Examination of Other Persons (Court Discretion)
Under section 596B, the court can order the public examination of any person who was involved in the examinable affairs of the company — regardless of whether they were a formal officer. This includes former employees, accountants, bookkeepers, business advisers, financiers, family members who received property transfers, and even solicitors in limited circumstances.
Unlike section 596A, section 596B requires leave of the court. The court will grant leave if the applicant demonstrates a proper reason for the examination — typically that the person has information about the company’s affairs, assets, or suspicious transactions that the liquidator needs. The threshold for leave is not high.
Who Gets Summoned and Why
The reach of the public examination regime is broader than many former directors anticipate. In practice, liquidators regularly summon:
- Former directors and shadow directors — to establish what they knew about the company’s financial position, when they knew it, and what steps (if any) they took to address insolvency
- Spouses and family members — particularly where the director transferred assets (property, cash, vehicles) to family members in the period before the company failed
- Key management employees — CFOs, financial controllers, and general managers who were responsible for financial reporting and who may have been aware of the company’s position
- Accountants and bookkeepers — to explain discrepancies in financial records, explain the treatment of related-party transactions, or produce documents the liquidator cannot otherwise obtain
- Secured creditors who enforced security — where the liquidator is investigating whether the security was valid or whether the enforcement was proper
- Business associates — where assets were transferred to associated entities at less than market value
The purpose of examining these witnesses is to build the evidentiary foundation for subsequent recovery actions — including insolvent trading claims, unfair preference recoveries, uncommercial transaction claims, and creditor-defeating disposition proceedings.
The Public Examination Process: Step by Step
Step 1: Court Application
The liquidator (or other eligible applicant) applies to the Federal Court or Supreme Court for an examination order. In urgent cases, the application can be made ex parte — without notifying the proposed examinee. The court will grant the order if the applicant is eligible and the formal requirements are met.
Step 2: Examination Summons Served
Once the court makes the order, an examination summons is prepared and must be personally served on the examinee. The summons will specify the date, time, and location of the examination, as well as any document production requirements.
Step 3: Document Production
Most examination orders include requirements to produce documents. These are significant obligations. The examinee must gather all responsive documents, review them for legal professional privilege (which must be claimed document-by-document), and deliver them to the liquidator’s lawyers by the specified date. Failure to produce documents without proper justification can itself be a breach of the court order.
Step 4: The Examination Itself
The examination is conducted in open court before a court registrar or judge. The examinee takes an oath or affirmation and is then questioned by the liquidator’s lawyers. The examination is recorded and a formal transcript is produced. Unlike a deposition in private, there is no right to have portions of the transcript suppressed simply because the answers are embarrassing or commercially sensitive.
There is no set time limit for a public examination. Simple examinations may take a few hours. Complex examinations involving extensive documentary evidence can continue across multiple days.
Your Rights at a Public Examination
Legal Representation
You are entitled to be represented by a lawyer at a public examination. This is not optional for any director facing potential civil or criminal exposure. Your lawyer can object to improper questions, advise you on privilege, and help ensure your answers are accurate and not inadvertently expansive.
Legal Professional Privilege
Communications between a lawyer and client that were made in confidence for the dominant purpose of legal advice or anticipated litigation are protected by legal professional privilege. Where this applies, the examinee is not required to disclose the content of those communications. However:
- Privilege must be claimed for specific questions or documents — it does not apply automatically
- Privilege can be waived inadvertently by disclosure to third parties or by inconsistent conduct
- Advice relating to tax structuring or asset protection, where the dominant purpose was not legal advice, may not attract privilege
Self-Incrimination: A Limited Protection
This is the area where directors are most frequently misled. Section 597(12) of the Corporations Act provides that a person is not excused from answering a question at a public examination on the ground that the answer might tend to incriminate the person or expose them to a penalty. This means you cannot simply refuse to answer a question by invoking a right against self-incrimination.
Section 597(12A) provides a derived-use immunity for state or territory criminal proceedings — meaning that a self-incriminating answer cannot be used against you in a state criminal prosecution. However, this protection does not extend to federal criminal proceedings (e.g., Corporations Act offences prosecuted by the Commonwealth Director of Public Prosecutions), and it does not prevent ASIC from using the transcript to build a civil penalty case.
The practical takeaway: the protection against self-incrimination in public examinations is much narrower than many directors assume. Specific legal advice is essential before the examination day.
How Examination Evidence Can Be Used Against You
This is the aspect of public examinations that directors most consistently underestimate. Answers given under oath at a public examination can be used in:
- Civil proceedings by the liquidator: Insolvent trading claims (s 588G), voidable transaction recoveries, uncommercial transaction claims. The liquidator uses examination transcripts to lock in evidence, identify inconsistencies, and prepare their case before commencing proceedings.
- ASIC enforcement actions: ASIC routinely attends public examinations and obtains transcripts. Admissions or inconsistencies in examination evidence regularly lead to director disqualification applications and civil penalty proceedings under s 1317E of the Corporations Act.
- Criminal proceedings: Subject to the derived-use immunity discussed above, examination evidence can be used in criminal proceedings for Corporations Act offences, fraud, and other relevant offences.
- Proceedings against third parties: Where a third party (e.g., a family member who received assets) is separately sued, examination evidence about the circumstances of the transfer may be used against them.
Directors who face potential insolvent trading claims or who were involved in transactions now under scrutiny by the liquidator should treat the public examination as the opening act of litigation — not an administrative formality.
What to Do If You Receive a Summons
- Engage a lawyer immediately — ideally an insolvency or commercial litigation lawyer with experience in public examinations. The time between receiving the summons and the examination date can be short. Early legal advice is critical to identify documents, prepare for likely questions, and assess any privilege claims.
- Do not destroy documents — once you receive a summons or become aware that a liquidator is investigating the company, you must preserve all relevant documents. Destruction of documents after receiving a summons can constitute contempt of court or an offence under section 1307 of the Corporations Act.
- Respond to document production requirements on time — gather all requested documents, review each for privilege, and deliver a privilege schedule if claiming protection over any documents. Compliance with document production is a prerequisite to having your examination conducted efficiently and without adverse inference.
- Attend the examination — failure to appear without a lawful excuse is contempt of court. If you have a genuine reason you cannot attend (e.g., serious medical incapacity), your lawyer must apply to the court to adjourn the examination before the hearing date.
- Prepare thoroughly with your lawyer — review the documents produced, identify the transactions the liquidator is likely to ask about, and understand the company’s financial history. You cannot predict every question, but preparation dramatically reduces the risk of inadvertent, damaging admissions.
- Be truthful — giving false evidence at a public examination is perjury under section 314(1) of the Criminal Code Act 1995 (Cth). The criminal consequences of lying under oath are far more serious than any civil liability you face. If you are uncertain about a fact, say so.
The Relationship Between Public Examinations and Other Insolvency Claims
Public examinations do not exist in isolation. They are typically part of a broader strategy by the liquidator to identify and pursue recovery actions. In our experience, a public examination of a director is frequently a precursor to:
- Insolvent trading proceedings against the director personally
- Voidable transaction claims (unfair preferences, uncommercial transactions, creditor-defeating dispositions)
- ASIC disqualification action under section 206C or 206F
- Director penalty notice recovery by the ATO
If you are facing a public examination in connection with a company that has gone into voluntary administration or liquidation, it is critical to understand the full litigation landscape — not just the examination itself. Early legal advice can identify the likely claims, preserve defences (including the safe harbour provisions), and position you strategically for what comes next.
Frequently Asked Questions
Can I refuse to attend a public examination summons?
No. A public examination summons is a court order. Failure to attend without a lawful excuse is contempt of court, which can result in arrest, a fine, or imprisonment. If you have a legitimate reason you cannot attend — such as serious illness documented by a medical certificate, or an international travel obligation with evidence — your lawyer must apply urgently to the court to adjourn the examination before the scheduled date.
Is a public examination really held in public?
Yes, by default. The examination is held in open court and the transcript is a public document. Creditors, ASIC, journalists, and members of the public are all entitled to attend. The court has a discretion to close the examination to the public in limited circumstances — for example, where commercially sensitive information of third parties is involved or where an ongoing police investigation might be prejudiced — but suppression orders are not granted routinely.
What if I cannot remember the answers to questions?
“I don’t recall” or “I don’t have a clear memory of that” are legitimate answers if genuine. However, the liquidator’s lawyers will test memory carefully: you will be shown documents and asked whether they refresh your recollection. Consistent memory failure on key events — particularly where your own signature appears on the document being shown to you — can affect your credibility and is itself a risk in subsequent litigation.
Can the liquidator examine me if I was never a formal director?
Yes. Under section 596B, the court can order the examination of any person who was involved in the company’s examinable affairs — including shadow directors, de facto directors, key employees, and business associates. If you gave advice to the company, received assets from it, or were involved in transactions under scrutiny, you are potentially within the reach of section 596B even if you never held a formal director appointment.
How long does a public examination last?
It depends entirely on the complexity of the matter and the number of transactions under investigation. A straightforward examination of a director of a small company may last two to four hours. Complex examinations involving years of financial records, multiple voidable transactions, or significant insolvent trading allegations can extend across multiple days. The summons will typically estimate the time required; your lawyer can negotiate the scope and duration where appropriate.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances. If you have received a public examination summons or are facing an insolvency investigation, contact Boss Lawyers on 1300 267 711 for immediate advice from our director dispute lawyers and insolvency lawyers in Brisbane.
