When will a public examination be ordered?

A liquidator of a creditor (“H”) of the company in liquidation (“Company”) issued a claim against the ultimate beneficial owner of the Company (“D”), alleging that a bank (of which D was president, CEO and a director) and D had used the Company to participate in missing trader fraud and seeking a contribution to losses in excess of £415 million.

H also made a request to the official receiver of the Company for the public examination of D on six grounds, including: (1) access to the accounting papers created whilst the Company was trading, (2) the banking arrangements of the Company and the circumstances leading to dissolution and (3) the formation and promotion of the Company.

To order a public examination, the court must be satisfied that it would serve a “useful purpose” in the context of the functions of the official receiver to obtain information regarding the administration of the estate and not be unreasonable, unnecessary or oppressive.

The court held that H must prove the purpose for the public examination. If established, burden would shift to D to demonstrate that an order for public examination would be oppressive.

The court refused to order a public examination, finding it would be “plainly oppressive” to require D to attend court to answer questions, when H had not established that D was an officer of the Company. The court found no “useful purpose” for a public examination and that there was a real risk that an examination would improve H’s position in the litigation.

Official Receiver (Applicant) v (1) Johannes Christian Martinus Augustinus Maria Deuss (2) Timothy Ulrich (Respondents) and Stephen John Hunt (Requesting Creditor) [2020] EWHC 3441 (Ch)

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