BANKRUPTCY ACT 1966

SCHEDULE 2 - INSOLVENCY PRACTICE SCHEDULE (BANKRUPTCY)  

Note: See section 4A .

PART 3 - GENERAL RULES RELATING TO ESTATE ADMINISTRATIONS  

Division 80 - Committees of inspection  

SECTION 80-55   OBLIGATIONS OF MEMBERS OF COMMITTEE OF INSPECTION   Deriving profit or advantage from the estate

80-55(1)  
A member of a committee of inspection must not directly or indirectly derive any profit or advantage from the administration of the regulated debtor ' s estate. Circumstances in which profit or advantage is taken to be derived

80-55(2)  
To avoid doubt, a member of a committee of inspection is taken to derive a profit or advantage from the administration of the regulated debtor ' s estate if:


(a) the member directly or indirectly derives a profit or advantage from a transaction (including a sale or purchase) entered into for or on account of the estate; or


(b) the member directly or indirectly derives a profit or advantage from a creditor of the estate; or


(c) a related entity of the member directly or indirectly derives a profit or advantage from the administration of the estate. Exceptions

80-55(3)  
Subsection (1) does not apply if the creditors resolve otherwise.

80-55(4)  
The member of the committee is not entitled to vote on the resolution referred to in subsection (3).

80-55(5)  
Subsection (1) does not apply to the extent that:


(a) another provision of this Act, or of another law, requires or permits the member of the committee of inspection to derive the profit or advantage; or


(b) the Court gives leave to the member of the committee to derive the profit or advantage.

Note:

Subsection (1) would not, for example, prevent a creditor from recovering debts proved in the bankruptcy, as this is permitted under Division 2 of Part VI .

80-55(6)  
Despite paragraph (2)(c), subsection (1) does not apply to the extent that:


(a) the profit or advantage arises because the trustee employs or engages a person to provide services in connection with the administration of the regulated debtor ' s estate; and


(b) the person is a related entity of a member of the committee of inspection; and


(c) one of the following applies:


(i) the member does not know, and could not reasonably be expected to know, that the trustee has employed or engaged a related entity of the member;

(ii) the creditors, by resolution, agree to the related entity being employed or engaged.
Offence

80-55(7)  
A person commits an offence of strict liability if:


(a) the person is subject to a requirement under subsection (1); and


(b) the person fails to comply with the requirement.

Penalty: 50 penalty units.

Note:

A defendant bears an evidential burden in relation to the matters in subsections (3), (5) and (6) (see subsection 13.3(3) of the Criminal Code ).

Effect of contravention of this section

80-55(8)  
A transaction or any other arrangement entered into in contravention of this section may be set aside by the Court.




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