A lawyer representing troubled property developer Luke Saraceni yesterday slammed the corporate watchdog for giving Bankwest- appointed receivers the go ahead to question people under "star chamber" rules.

Barrister Simon Lee said the Australian Securities and Investments Commission gave permission for Ferrier Hodson receivers to carry out public examinations when it was "plain as a pike staff" that Mr Saraceni was in dispute with the receivers and the bank.

Mr Lee told the Federal Court appeal hearing that a powerful weapon was given to someone being sued by Mr Saraceni, who would not have the usual legal protections.

The battle over the public examination is a sideshow to the major war being fought between Mr Saraceni and Bankwest-appointed receivers from KordaMentha, who seized control of his $500 million Raine Square office tower development in January 2011.

In a bid to collect on guarantees for Raine Square lending, Bankwest put Ferrier Hodgson in as receivers of properties owned by two of Mr Saraceni's companies and as receivers of the company behind his family's Duckstein brewery and Saracen Estates winery, near Margaret River.

Administrators and liquidators can to apply for a court to conduct public examinations. Receivers must apply to ASIC, which can give other parties the power to conduct court probes.