Bankruptcy Act 1966
This Act may be cited as the Bankruptcy Act 1966.
View history note
Hide history noteThis Act shall come into operation on a date to be fixed by Proclamation.
[ CCH Note: Date of commencement: This Act was proclaimed to commence operation on 4 March 1968.]
(Repealed by No 216 of 1973, s 3.) SECTION 4 REPEAL 4(1) [Specified Acts]
The Acts specified in Schedule 1 are repealed.
4(2) [Saving provision]Notwithstanding the repeal of the Bankruptcy Act 1958 or the Bankruptcy Act 1959 effected by subsection (1) of this section:
(a) the provisions of section 7 of the Bankruptcy Act 1958, as amended by the Bankruptcy Act 1959, continue to apply to a purported extension of time or a purported fixing of a time to which those provisions applied immediately before the commencement of this Act; and
(b) the provisions of section 5 of the Bankruptcy Act 1959 continue to apply to a seal or stamp to which those provisions applied immediately before the commencement of this Act;
as if those Acts had not been repealed.
SECTION 4A 4A INSOLVENCY PRACTICE SCHEDULESchedule 2 has effect.
In this Act, unless the contrary intention appears:
ADI
(authorised deposit-taking institution) means:
(a) a body corporate that is an ADI for the purposes of the Banking Act 1959; or
(b) the Reserve Bank of Australia; or
(c) any other bank approved in writing for the purposes of this definition:
(i) by the Treasurer; or
(ii) by a person authorised in writing by the Treasurer to give approvals for the purposes of this definition.
administrator,
in relation to a debt agreement, means the person:
(a) authorised by the agreement to deal with property under the agreement; or
(b) who becomes the replacement administrator under section 185ZB; or
(c) appointed by an Official Receiver under section 185ZC.
affidavit
includes affirmation and statutory declaration.
approved bank
(Omitted by No 48 of 1998, Sch 1, item 11.)
approved form
: a document is in the
approved form
if it is in accordance with section 6D.
associated entity,
in relation to a person, means:
(a) an entity (other than a company) that is, or has been, associated with the person; or
(b) a company that is, or has been, associated with the person at a time when the company is, or was, as the case may be, a private company.
Australia
(Repealed by No 154 of 2020)
authorised employee
means an APS employee whose duties include either or both of the following:
(a) supporting the Inspector-General in the performance of his or her functions, or in the exercise of his or her powers, under this Act;
(b) supporting the Official Receivers in the performance of their functions, or in the exercise of their powers, under this Act.
authority
, in relation to a Territory, means an authority established by or under a law of the Territory, and includes the holder of an office established by or under a law of the Territory.
available act of bankruptcy,
in relation to a debtor, means an act of bankruptcy available for a petition against the debtor at the date of the presentation of the petition on which, or by virtue of the presentation of which, the debtor becomes a bankrupt.
bank
means an ADI or any other bank.
(a) against whose estate a sequestration order has been made; or
(b) who has become a bankrupt by virtue of the presentation of a debtor's petition.
bankruptcy,
in relation to jurisdiction or proceedings, means any jurisdiction or proceedings under or by virtue of this Act.
books
includes any account, deed, paper, writing or document and any record of information however compiled, recorded or stored, whether in writing, on microfilm, by electronic process or otherwise.
breach of duty
means malfeasance, misfeasance, negligence, wilful default or breach of trust.
business day
means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.
child:
without limiting who is a child of a person for the purposes of this Act, each of the following is the
child
of a person:
(a) an adopted child, stepchild or exnuptial child of the person;
(b) someone who is a child of the person within the meaning of the Family Law Act 1975.
close relative,
in relation to a person, means a spouse, de facto partner, parent, child, brother, sister, half-brother, or half-sister, of the person.
Commonwealth proceeds of crime authority
means a proceeds of crime authority within the meaning of the Proceeds of Crime Act 2002.
Note:
Under that Act, the proceeds of crime authority is either the Commissioner of the Australian Federal Police or the Director of Public Prosecutions (see the definition of proceeds of crime authority in section 338 of that Act). Responsibility can be transferred between these authorities (see section 315B of that Act).
company
means a corporation, other than a corporation that is incorporated within Australia or an external Territory and is:
(a) a public authority; or
(b) an instrumentality or agency of the Crown in right of the Commonwealth, in right of a State or in right of a Territory.
company officer,
in relation to a corporation, includes:
(a) a director or secretary of the corporation;
(b) a receiver and manager of property of the corporation appointed under a power contained in an instrument;
(ba) an administrator, within the meaning of the Corporations Act 2001, of the corporation;
(bb) an administrator of a deed of company arrangement executed by the corporation under Part 5.3A of that Act;
(c) (Repealed by No 8 of 2007)
(d) a liquidator of the corporation appointed in a voluntary winding up of the corporation; and
(e) a trustee or other person administering a compromise or arrangement made between the corporation and another person or other persons;
but does not include:
(f) a receiver who is not also a manager;
(g) a receiver and manager appointed by a court; or
(h) a liquidator appointed by a court.
confiscation order
has the same meaning as in the Proceeds of Crime Act 2002.
constable
means a member or special member of the Australian Federal Police or a member of the Police Force of a State or Territory.
corporation
includes any body corporate.
corresponding law
has the same meaning as in the Proceeds of Crime Act 2002.
court of summary jurisdiction
includes a court of a Territory sitting as a court for the making of summary orders or the summary punishment of offences under the law of the Territory.
creditor,
in relation to a liability under a maintenance order, includes the Child Support Registrar referred to in the Child Support (Registration and Collection) Act 1988.
creditor's petition
means a petition presented by a creditor or by 2 or more creditors jointly.
debt agreement
means an agreement under section 185H resulting from the acceptance of a debt agreement proposal.
debt agreement proposal
means a written proposal referred to in subsection 185C(1).
debtor's petition
means a petition presented by a debtor against himself or herself and includes a petition presented against a partnership in pursuance of section 56A and a petition presented by joint debtors against themselves in pursuance of section 57.
declaration of intention
means a declaration that has been presented under section 54A and accepted under section 54C.
declared debtor
means a debtor who has presented under section 54A a declaration of intention.
de facto partner
has the meaning given by the Acts Interpretation Act 1901.
de facto spouse
(Repealed by No 144 of 2008, s 3 and Sch 2, Pt 2, item 14.)
(a) if a period longer than 21 days is prescribed - the prescribed period; or
(b) otherwise - 21 days.
Deputy Registrar
(Omitted by No 44 of 1996, Sch 1, Pt 1(6).)
director,
in relation to a corporation, includes:
(a) any person occupying or acting in the position of director of the corporation, by whatever name called and whether or not validly appointed to occupy, or duly authorised to act in, the position;
(b) any person in accordance with whose directions or instructions the directors of the corporation are accustomed to act; and
(c) if the corporation has a committee of management, council or other governing body:
(i) a member of that committee of management, council or other governing body;
(ii) any person occupying or acting in the position of member of that committee of management, council or other governing body, by whatever name called and whether or not validly appointed to occupy, or duly authorised to act, in the position; and
(iii) any person in accordance with whose directions or instructions the members of that committee of management, council or other governing body are accustomed to act.
District
(Repealed by No 106 of 2010, Sch 3 item 1.)
eligible judge
means a judge of the Court declared by the Minister to be an eligible judge under subsection 129A(2).
(a) in relation to a bankruptcy - the discharge of the bankrupt from the bankruptcy or the annulment of the bankruptcy; or
(b) in relation to a composition or scheme of arrangement under Division 6 of Part IV - the time when the composition or scheme, as the case may be, ceases to be in effect; or
(ba) in relation to a personal insolvency agreement - the time when all the obligations that the agreement created have been discharged; or
(c) in relation to an administration under Part XI - the end of the administration.
enforcement process,
in relation to a frozen debt, means, in the case of a judgment debt:
(a) process of a court issued to enforce in any manner payment of the judgment debt; or
(b) without limiting the generality of paragraph (a), process of a court for attaching, in order to meet the judgment debt, a debt or other money payable or owing, or to become payable or owing, to the declared debtor.
entity
means a natural person, company, partnership or trust.
examinable affairs,
in relation to a person, means:
(a) the person's dealings, transactions, property and affairs; and
(b) the financial affairs of an associated entity of the person, in so far as they are, or appear to be, relevant to the person or to any of his or her conduct, dealings, transactions, property and affairs.
examinable matter
(Omitted by No 44 of 1996, Sch 1, Pt 1(7).)
examinable period
has the meaning given by section 139CA.
examinable person,
in relation to a person (in this definition called the
relevant person
), means:
(a) if the relevant person is a debtor and property of the debtor is known or suspected to be in the possession of a person - that person;
(b) if the relevant person has become a bankrupt and any of the property of the bankrupt is known or suspected to be in the possession of a person - that person;
(c) in any case - a person who is believed to be indebted to the relevant person;
(d) if a person, including:
(i) a person who is an associated entity of the relevant person; or
may be able to give information about the relevant person or any of the relevant person's examinable affairs - that person; or
(ii) a person with whom an associated entity of the relevant person is or has been associated;
(e) if books (including books of an associated entity of the relevant person):
(i) are in the possession of a person, including a person of a kind referred to in subparagraph (d)(i) or (ii); and
that person.
(ii) may relate to the relevant person or any of the relevant person's examinable affairs;
Family Court Judge
(Repealed by No 13 of 2021)
Federal Circuit Court
(Repealed by No 13 of 2021)
Finance Minister
means the Minister administering the Public Governance, Performance and Accountability Act 2013.
forfeiture order
means a forfeiture order made under a proceeds of crime law.
frozen debt
means a debt that:
(a) is owed by a declared debtor; and
(b) would, if the debtor had become a bankrupt when the declaration of intention was accepted under section 54C, be provable in the bankruptcy;
but does not include a debt in respect of the debtor's liability under a maintenance agreement or maintenance order (whenever entered into or made).
goods
includes all chattels personal.
guidance and appeals panel
has the same meaning as in the Administrative Review Tribunal Act 2024.
guidance and appeals panel application
has the same meaning as in the Administrative Review Tribunal Act 2024.
(a) a law of the Commonwealth, a State or a Territory regulating conditions of employment; or
(b) an award, determination or agreement made under such a law.
Insolvency Practice Rules
means the rules made by the Minister under section 105-1 of Schedule 2.
Inspector-General
means the Inspector-General in Bankruptcy, and includes a person acting as the Inspector-General.
interstate confiscation order
means an interstate forfeiture order or an interstate pecuniary penalty order.
interstate forfeiture order
has the same meaning as in the Proceeds of Crime Act 2002.
interstate pecuniary penalty order
has the same meaning as in the Proceeds of Crime Act 2002.
in the possession of
includes in the custody of or under the control of.
law
, in relation to a Territory, means a law in force in the Territory.
Example:
A law in force in a Territory that is an applied law of a State or another Territory.
(a) a person who holds office as a Magistrate of a State, being a person in respect of whom an arrangement under subsection 17B(1) applies;
(aa) a person who holds office as a Judge of the Local Court of New South Wales, being a person in respect of whom an arrangement under subsection 17B(1A) applies; or
(b) a person who holds office as a Judge of the Local Court of the Northern Territory, being a person in respect of whom an arrangement under subsection 17B(2) applies; or
(c) a person who holds office as a Magistrate of a Territory.
(a) a maintenance agreement (within the meaning of the Family Law Act 1975 ) that has been registered in, or approved by, a court in Australia or an external Territory; or
(b) any other agreement with respect to the maintenance of a person that has been registered in, or approved by, a court in Australia or an external Territory;
but does not include a financial agreement, or Part VIIIAB financial agreement, within the meaning of the Family Law Act 1975 or a financial agreement within the meaning of Part 5A of the Family Court Act 1997 (WA).
(a) an order relating to the maintenance of a person, including an order relating to the payment of arrears of maintenance, that is made or registered under a law of the Commonwealth or of a State or Territory; or
(b) an assessment made under the Child Support (Assessment) Act 1989 .
modifications
includes additions, omissions and substitutions.
National Personal Insolvency Index
means the Index of that name established under the regulations.
net value,
in relation to property, means:
(a) if the property is unencumbered - the value of the property;
(b) if the property is encumbered and the unencumbered value of the property exceeds the amount or value of the encumbrances - the amount of the excess; or
(c) in any other case - a nil amount.
net worth,
in relation to an entity, in relation to a time, means:
(a) if the entity is a trust and the total value of the trust property as at that time exceeds the total of the amounts of the trustee's liabilities as at that time (other than liabilities constituted by the rights of persons as beneficiaries under the trust) - the amount of the excess;
(b) if the entity is not a trust and the total value of the entity's assets as at that time exceeds the total of the amounts of the entity's liabilities as at that time - the amount of the excess; or
(c) in any other case - a nil amount.
oath
includes affirmation and statutory declaration.
offence against this Act
includes an offence against section 137.1 or 137.2 of the Criminal Code, being an offence that relates to this Act.
officer
means an officer of the Court or of the Commonwealth.
Official Receiver
includes a person acting as an Official Receiver.
Official Trustee
means the Official Trustee in Bankruptcy.
operations,
in relation to an entity, means all of the following:
(a) the business, trading, transactions and dealings of the entity:
(i) whether alone or jointly with another entity or other entities; and
(ii) whether or not as agent, bailee or trustee;
(b) the profits, income and receipts of the entity;
(c) the losses, outgoings and expenditure of the entity.
parent:
a person is the
parent
of anyone who is the person's child.
pecuniary penalty order
means:
(a) a pecuniary penalty order made under a proceeds of crime law; or
(b) a literary proceeds order within the meaning of the Proceeds of Crime Act 2002 ; or
(c) an unexplained wealth order within the meaning of the Proceeds of Crime Act 2002 .
personal insolvency agreement
means a personal insolvency agreement executed under Part X.
Note:
Section 188A sets out requirements for personal insolvency agreements.
personal services,
in relation to a bankrupt, means services of a physical, intellectual or other kind supplied by the bankrupt himself or herself:
(a) whether or not in a capacity as employee; and
(b) whether or not the supply of the services by the bankrupt discharged the obligations of an entity to supply services.
petition
means a petition under this Act.
policy for pure endowment
(Omitted by No 82 of 1993, s 6.)
PPSA grantor or debtor
(short for Personal Property Securities Act grantor or debtor), in relation to a PPSA security interest, means a grantor or debtor within the meaning of the Personal Property Securities Act 2009 .
PPSA secured party
(short for Personal Property Securities Act secured party), in relation to a PPSA security interest, means a secured party within the meaning of the Personal Property Securities Act 2009.
PPSA security agreement
(short for Personal Property Securities Act security agreement), in relation to a PPSA security interest, means a security agreement within the meaning of the Personal Property Securities Act 2009.
PPSA security interest
(short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 and to which that Act applies, other than a transitional security interest within the meaning of that Act.
Note 1:
The Personal Property Securities Act 2009 applies to certain security interests in personal property. See the following provisions of that Act:
Note 2:
For the meaning of transitional security interest , see section 308 of the Personal Property Securities Act 2009.
(a) any land;
(b) any structure, building, aircraft, vehicle, vessel or place (whether built on or not); and
(c) any part of such a structure, building, aircraft, vehicle, vessel or place.
prescribed
(Omitted by No 44 of 1996, Sch 1, Pt 1(10).)
private company,
in relation to a particular time, means a company other than a company that, as at that time:
(a) has been admitted to the official list of a declared financial market (as defined by section 9 of the Corporations Act 2001 ); and
(b) has not been removed from that official list.
proceeding
means proceeding under this Act.
proceeds,
in relation to enforcement process in respect of a debt, means:
(a) the proceeds of selling property under the enforcement process;
(b) money taken under the enforcement process;
(c) money received as a result of attachment under the enforcement process; or
(d) money paid to avoid the taking or sale of property under, or to avoid attachment under, the enforcement process.
(a) the Proceeds of Crime Act 2002; or
(b) the Proceeds of Crime Act 1987; or
(c) a corresponding law.
proceeds of crime order
means:
(a) a restraining order; or
(b) a forfeiture order; or
(c) a pecuniary penalty order.
proclaimed law
means a law specified for the time being in a Proclamation in force under section 253B.
professional advice
means financial, business or legal advice given by a person in the performance of the functions attaching to the person's professional capacity.
property
means real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property.
provable debt
means a debt or liability that is, under this Act, provable in bankruptcy.
provider,
in relation to an RSA, has the same meaning as in the Retirement Savings Accounts Act 1997.
public examination
(Omitted by No 115 of 1990, s 4(a).)
registered trustee
has the same meaning as in section 5-5 of Schedule 2.
Register of Trustees
has the same meaning as in section 15-1 of Schedule 2.
(a) the Chief Executive Officer and Principal Registrar, a Registrar, a District Registrar or a Deputy District Registrar of the Federal Court; or
(b) a Registrar of the Federal Circuit and Family Court of Australia (Division 2).
related entity,
in relation to a person, means any of the following:
(a) a relative of the person;
(b) a body corporate of which the person, or a relative of the person, is a director;
(c) a body corporate that is related to the body corporate referred to in paragraph (b);
(d) a director, or a relative of a director,of a body corporate referred to in paragraph (b) or (c);
(e) a beneficiary under a trust of which the person, or a relative of the person, is a trustee;
(f) a relative of such a beneficiary;
(g) a relative of the spouse, or de facto partner, of such a beneficiary;
(h) a trustee of a trust under which the person, or a relative of the person, is a beneficiary;
(i) a member of a partnership of which the person, or a relative of the person, is a member.
For the purposes of paragraph (c) of this definition, the question whether a body corporate is related to another body corporate is to be determined in the same manner as that question is determined for the purposes of the Corporations Act 2001.
relative,
in relation to a person, means:
(a) the spouse of the person; or
(b) a parent or remoter lineal ancestor of the person or of the person's spouse; or
(c) a child or remoter lineal descendant of the person or of the person's spouse; or
(d) a brother or sister of the person or of the person's spouse; or
(e) an uncle, aunt, nephew or niece of the person or of the person's spouse; or
(f) the spouse of a person specified in paragraph (b), (c), (d) or (e).
For the purposes of this definition, spouse includes de facto partner.
Note:
Parent and child are defined by this subsection.
resolution
: a
resolution
is passed by creditors of a regulated debtor's estate:
(a) in a meeting - in the circumstances prescribed under paragraph 75-50(2)(k) of Schedule 2; or
(b) without a meeting - in the circumstances prescribed under paragraph 75-40(5)(b) of Schedule 2.
restraining order
means a restraining order made under a proceeds of crime law.
RSA
has the same meaning as in the Retirement Savings Accounts Act 1997.
RSA holder
has the same meaning as in the Retirement Savings Accounts Act 1997.
rural support scheme
means a program or scheme that:
(a) is administered by or on behalf of the Commonwealth, a State or a Territory; and
(b) relates to:
(i) agriculture or the cultivation of land; or
(ii) the maintenance of animals for commercial purposes; or
(iii) horticulture; or
(iv) any other primary industry activity.
secured creditor,
in relation to a debtor, means:
(a) in the case of a debt secured by a PPSA security interest - thePPSA secured party in relation to the interest, if the interest:
(i) arose as security for the debt; and
(ii) is perfected (within the meaning of the Personal Property Securities Act 2009); or
(b) in the case of any other debt - a person holding a mortgage, charge or lien on property of the debtor as a security for a debt due to him or her from the debtor.
sheriff
includes any person charged with the execution of a writ or other process.
special resolution
: a
special resolution
is passed by creditors of a regulated debtor's estate:
(a) in a meeting - in the circumstances prescribed under paragraph 75-50(2)(k) of Schedule 2; or
(b) without a meeting - in the circumstances prescribed under paragraph 75-40(5)(b) of Schedule 2.
State Court
(Omitted by No 44 of 1996, Sch 1, Pt 1(14).)
state of affairs,
in relation to an entity, means all of the following:
(a) the property and assets of the entity:
(i) whether held alone or jointly with another person or other persons; and
(ii) whether or not held as agent, bailee or trustee;
(b) the liabilities of the entity:
(i) whether actual or contingent;
(ii) whether owed alone or jointly with another person or other persons; and
(iii) whether or not owed as trustee.
(a) if an amount greater than $5,000 is prescribed - the prescribed amount; or
(b) otherwise - $5,000.
(a) if a period longer than 21 days is prescribed - the prescribed period; or
(b) otherwise - 21 days.
stay period,
in relation to a declaration of intention presented by a debtor, means the period beginning on the day on which the declaration was accepted under section 54C and ending when:
(a) the default period, beginning on that day, ends; or
(b) a creditor's petition or a debtor's petition is presented against the debtor; or
(c) the debtor signs an authority under section 188; or
(d) a sequestration order is made against the debtor.
whichever happens first.
stay under a proclaimed law,
in relation to a person or the estate of a deceased person, means a stay, by or under a proclaimed law, of proceedings or of execution in relation to all or any of the debts of that person or of that estate, as the case may be.
stepchild:
without limiting who is a stepchild of a person for the purposes of this Act, someone is the
stepchild
of a person if he or she would be the person's stepchild except that the person is not legally married to the person's de facto partner.
Territory
(Repealed by No 154 of 2020)
Territory of the Commonwealth
(Repealed by No 154 of 2020)
the commencement of the bankruptcy,
in relation to a bankrupt, means the time at which his or her bankruptcy is, by virtue of section 115, to be deemed to have commenced.
the Court
means a Court having jurisdiction in bankruptcy under this Act.
the date of the bankruptcy,
in relation to a bankrupt, means the date on which a sequestration order was made against his or her estate or, if he or she became a bankrupt by virtue of the presentation of a debtor's petition, the date on which he or she became a bankrupt by force of section 55, 56E or 57, as the case requires.
the Family Court
(Repealed by No 13 of 2021)
the Federal Court
means the Federal Court of Australia.
the first meeting of creditors
(Omitted by No 119 of 1987, s 4(1)(f).)
the Official Receiver
means any Official Receiver.
the property of the bankrupt,
in relation to a bankrupt, means:
(a) except in subsections 58(3) and (4):
(i) the property divisible among the bankrupt's creditors; and
(ii) any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt; and
(b) in subsections 58(3) and (4):
(i) the property, rights and powers referred to in paragraph (a) of this definition; and
(ii) any other property of the bankrupt.
the repealed Act
(Omitted by No 44 of 1996, Sch 1, Pt 1(17).)
the rules
(Omitted by No 44 of 1996, Sch 1, Pt 1(18).)
(a) in relation to a bankruptcy - the trustee of the estate of the bankrupt; or
(b) in relation to a composition or scheme of arrangement under Division 6 of Part IV - the trustee of the composition or scheme of arrangement; or
(c) in relation to a personal insolvency agreement - the trustee of the agreement; or
(d) in relation to the estate of a deceased person in respect of which an order has been made under Part XI - the trustee of the estate; or
(e) in relation to a trust:
(i) if only one person is a trustee of the trust - that person; or
in his, her or its capacity as a trustee, or in their respective capacities as trustees, as the case may be, of the trust.
(ii) if 2 or more persons are trustees of the trust - any one or more of those persons;
this Act
includes the regulations and the Insolvency Practice Rules.
time fixed
, for compliance with a bankruptcy notice, means the period specified in the notice (as required by subsection 41(2A)).
5(1A)
A reference in this Act to books of an associated entity of a person does not limit the generality of any other reference in this Act to books.
5(1B)
A reference in this Act to an entity includes, in the case of a trust, a reference to the trustee of the trust.
5(1C)
Paragraph (b) of the definition of examinableaffairs in subsection (1) does not limit the generality of a reference in this Act to a person's conduct, dealings, transactions, property or affairs.
5(2)
A person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable.
5(3)
A person who is not solvent is insolvent .
5(4)
Unless the contrary intention appears, a reference in this Act to the trustee of the estate of a bankrupt, or to the trustee of a personal insolvency agreement, shall:
(a) in relation to an estate or a personal insolvency agreement in respect of which there are 2 or more joint trustees - be read as a reference to all the trustees; or
(b) in relation to an estate or a personal insolvency agreement in respect of which there are 2 or more joint and several trustees - be read as a reference to all of the trustees or any one or more of the trustees.
5(5)
(Repealed by No 13 of 2013, s 3 and Sch 1 item 56.)
5(6)
For the purposes of this Act, the members of a person's family are taken to include the following (without limitation):
(a) a de facto partner of the person;
(b) someone who is the child of the person, or of whom the person is the child, because of the definition of child in this section;
(c) anyone else who would be a member of the person's family if someone mentioned in paragraph (a) or (b) is taken to be a member of the person's family.
SECTION 5AA 5AA (REPEALED)
(Repealed by No 106 of 2010, Sch 3 item 3.)
For the purposes of this Act, a person shall not be regarded as a person in accordance with whose directions or instructions the directors of a body corporate are accustomed to act merely because the directors act on advice given by the person in the proper performance of the functions attaching to the person's professional capacity or to the person's business relationship with the directors or with the body corporate.
For the purposes of this Act, a company is associated with a person if the person:
(a) is a company officer of the company or otherwise is concerned, or takes part, in the company's management; or
(b) is able to control, or to influence materially, the company's activities or internal affairs; or
(c) is a member of the company; or
(d) is in a position to cast, or to control the casting of, a vote at a general meeting of the company; or
(e) has power to dispose of, or to exercise control over the disposal of, a share in the company; or
(f) is financially interested in the company's success or failure or apparent success or failure; or
(g) is owed a debt by the company; or
(h) is employed, or is engaged under a contract for services, by the company; or
(j) acts as agent for the company in any transaction or dealing; or
(k) gives professional advice to the company.
For the purposes of this Act, a company is also associated with a person if the company:
(a) holds property jointly with the person; or
(b) is dealing with the person's property as an agent for the person; or
(c) is a trustee of a trust under which the person is capable of benefiting; or
(d) acquires or disposes of property as a result of dealing with the person.
The circumstances set out in subsections (1) and (2) are the only circumstances in which a company is associated with a person for the purposes of this Act.
For the purposes of this Act, a natural person (in this section called the associate ) is associated with another person if the other person:
(a) holds property jointly with the associate; or
(b) is a trustee of a trust under which the associate is capable of benefiting; or
(ba) can benefit under a trust of which the associate is a trustee; or
(c) is employed, or is engaged under a contract for services, by the associate; or
(d) acts as agent for the associate in any transaction or dealing; or
(da) is a principal for whom the associate acts as an agent; or
(e) is an attorney of the associate under a power of attorney; or
(f) has appointed the associate as the other person's attorney under a power of attorney; or
(g) gives professional advice to the associate; or
(h) is given professional advice by the associate.
A natural person (the associate ) is also associated with another person if the associate has acquired or disposed of property as a result of dealing with the other person.
The circumstances set out in subsections (1) and (2) are the only circumstances in which a natural person is associated with another person for the purposes of this Act.
For the purposes of this Act, a partnership is associated with a person if, and only if, the person:
(a) is a partner in the partnership;
(b) is able to control, or to influence materially, the partnership's activities or internal affairs;
(c) is financially interested in the partnership's success or failure or apparent success or failure;
(d) is a creditor of the partnership;
(e) is employed, or is engaged under a contract for services, by the partnership;
(f) acts as agent for the partnership in any transaction or dealing; or
(g) gives professional advice to the partnership.
For the purposes of this Act, a trust is associated with a person if, and only if, the person:
(a) is the settlor, or one of the settlors, of the trust;
(b) has power under the terms of the trust to appoint or remove a trustee of the trust or to vary, or cause to be varied, any of the terms of the trusts;
(c) is a trustee of the trust;
(d) is able to control, or to influence materially, the activities of the trustee of the trust;
(e) if a trustee of the trust is a company - is a company officer of the company or otherwise is concerned, or takes part, in the company's management;
(f) is capable of benefiting under the trust;
(g) is a creditor of the trustee of the trust;
(h) is employed, or is engaged under a contract for services, by the trustee of the trust;
(j) acts as agent for the trustee of the trust in any transaction or dealing; or
(k) gives professional advice to the trustee of the trust.
Subject to this section, a person shall be taken, for the purposes of this Act, to control an entity at a particular time in relation to a matter if, and only if:
(a) no act, omission or decision inconsistent with the person's directions, instructions or wishes was; and
(b) having regard to all the circumstances, it may reasonably be expected that no such act, omission or decision would have been;
done or made at that time, in relation to the matter, by or on behalf of the entity.
5F(2) [Person not taken to control entity]A person shall not be taken to control an entity at a particular time in relation to a matter merely because:
(a) no act, omission or decision inconsistent with advice given by the person in the proper performance of the functions attaching to his or her professional capacity, or to his or her business relationship with the entity, was; and
(b) having regard to all the circumstances, it may reasonably be expected that no such act, omission or decision would have been;
done or made at that time, in relation to that matter, by or on behalf of the entity.
5F(3) [Act, omission or decision of substantial importance]A reference in subsection (1) or (2), in relation to a matter, to an act, omission or decision is a reference to an act, omission or decision that, having regard to the nature of that matter, is of substantial importance.
5F(4) [Company not a private company]A person shall not be taken to control a company at a particular time in relation to a matter if the company is not a private company at that time.
For the purposes of this Act, a company's financial affairs include:
(a) the company's promotion, formation, membership, control, operations and state of affairs;
(b) the management and proceedings of the company;
(c) any act or thing done (including any contract made and any transaction entered into) by or on behalf of the company, or to or in relation to the company or its business or property, at a time when:
(i) a receiver, or a receiver and manager, is in possession of, or has control over, property of the company;
(ia) the company is under administration within the meaning of the Corporations Act 2001;
(ib) a deed of company arrangement that the company executed under Part 5.3A of that Act has not yet terminated;
(ii) (Repealed by No 8 of 2007)
(iii) a compromise or arrangement made between the company and another person or other persons is being administered; or
and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of an administrator (within the meaning of that Act) of the company, of an administrator of such a deed, of any person administering such a compromise or arrangement or of any liquidator or provisional liquidator of the company;
(iv) the company is being wound up;
(d) the ownership of shares in, and debentures of, the company;
(e) the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the company or to dispose of, or to exercise control over the disposal of, such shares;
(f) the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, or debentures of, the company; and
(g) matters concerned with ascertaining the persons with whom the company is or has been associated.
For the purposes of this Act, the financial affairs of a natural person include:
(a) the person's operations and state of affairs;
(b) any act or thing done (including any contract made and any transaction entered into) by or on behalf of the person, or to or in relation to the person or his or her business or property, at a time when:
(i) the person was, under this Act or the law of an external Territory, a bankrupt in respect of a bankruptcy from which the person had not been discharged;
(ii) the person had, under the law of an external Territory or the law of a country other than Australia, the status of an undischarged bankrupt;
(iii) the property of the person was subject to control under Division 2 of Part X by reason of an authority given by the person under section 188; or
(iv) a personal insolvency agreement under Part X or under the corresponding provisions of a law of an external Territory or a country other than Australia was in effect in relation to the person or the person's property;
(c) without limiting the generality of paragraph (b), any conduct of the trustee of such a bankrupt estate or of such a personal insolvency agreement or a person acting under such an authority; and
(d) matters concerned with ascertaining the persons with whom the person is or has been associated.
For the purposes of this Act, the financial affairs of a partnership include:
(a) the partnership's promotion, formation, membership, control, operations and state of affairs;
(b) the management and proceedings of the partnership;
(c) any act or thing done (including any contract made and transaction entered into) on behalf of the partnership, or to or in relation to the partnership, at a time when the partnership is being wound up; and
(d) matters concerned with ascertaining the persons with whom the partnership is or has been associated.
For the purposes of this Act, the financial affairs of a trust include:
(a) the creation of the trust;
(b) matters arising under, or otherwise relating to, the terms of the trust;
(c) the appointment and removal of a trustee of the trust;
(d) the business, trading, transactions and dealings of the trustee of the trust;
(e) the profits, income and receipts of the trustee of the trust;
(f) the losses, outgoings and expenditure of the trustee of the trust;
(g) the trust property, including transactions and dealings in, and the income arising from, the trust property;
(h) the liabilities of the trustee of the trust;
(j) the management of the trust;
(k) any act or thing done (including any contract made and transaction entered into) by or on behalf of the trustee of the trust, or to or in relation to the trust, at a time when the trust is being wound up;
(m) matters concerned with ascertaining the persons with whom the trust is or has been associated; and
(n) matters concerned with ascertaining the rights of the beneficiaries under the trust and any payments, or distributions of property, that the beneficiaries have received, or are entitled to receive, under the terms of the trust.
A reference in this Act to an intent to defraud the creditors of a person or to defeat or delay the creditors of a person shall be read as including an intent to defraud, or to defeat or delay, any one or more of those creditors. SECTION 6A STATEMENT OF AFFAIRS FOR PURPOSES OTHER THAN PART XI 6A(1)
This section has effect for the purposes of the following provisions of this Act, namely, subsections 54(1) and (2) and subsection 54A(2), paragraphs 55(2)(b), 56B(3)(a) and (b), 56F(1)(a) and (b), 57(2)(a) and (b) and sections 57B, 77CA and 185D and Part X.
6A(2)
A reference in a provision of this Act referred to in subsection (1) to a statement of affairs is a reference to a statement that:
(a) is in an approved form; and
(b) includes a statement identifying any creditor who is a related entity of the debtor or bankrupt; and
(c) contains a declaration that, so far as the debtor or bankrupt is aware, the particulars set out in the statement are correct.
6A(3)
If the trustee has reasonable grounds to suspect that:
(a) any particulars set out in a statement of affairs that was filed by a person are false or misleading in a material respect; or
(b) any material particulars have been omitted from that statement;
the trustee may, by written notice given to the person, require the person, within a specified period of not less than 14 days, to provide such information or to produce such books as are specified in the notice for the purpose of enabling the trustee to decide whether the particulars set out in the statement are correct.
6A(4)
For the purposes of the application of subsection (3) to a statement of affairs that is required to be given under Part X, a reference in that subsection to the trustee is a reference to whichever of the following is applicable:
(a) the controlling trustee within the meaning of that Part;
(b) the trustee of the personal insolvency agreement concerned.
SECTION 6B PROVISION OF STATEMENT OF AFFAIRS UNDER PART XI AND STATEMENT OF ADMINISTRATION OF ESTATE OF DECEASED PERSON 6B(1)
(Repealed by No 34 of 2006)
6B(2)
A reference in paragraph 246(1)(a) or subsection 247(1) to a statement of a deceased person's affairs and of administration of the deceased person's estate is a reference to a statement, in an approved form, of those affairs and of that administration.
6B(3) [Trustee may require specified information]
If the trustee administering the estate of a deceased person under Part XI has reasonable grounds to suspect that:
(a) any particulars set out in a statement of affairs that was filed by a person under subsection 246(1) or 247(1) are false or misleading in a material respect; or
(b) any material particulars have been omitted from that statement;
the trustee may give the person a written notice requiring the person to provide specified information or books within a specified period of at least 14 days to enable the trustee to decide whether the particulars set out in the statement are correct.
For the purposes of this Act, property is covered by a restraining order or a forfeiture order during the period:
(a) starting when the order comes into force in relation to the property; and
(b) ending when the earliest of the following occurs:
(i) the order ceases to be in force;
(ii) a court excludes the property from the order;
6C(2) Satisfaction of pecuniary penalty orders.
(iii) if the order is a restraining order - a court excludes the property from forfeiture that would or may result from conviction for an offence.
Without limiting the circumstances in which a pecuniary penalty order ceases to be in force, a pecuniary penalty order ceases to be in force if it is satisfied.
6C(3) When applications for proceeds of crime orders are finally determined.For the purposes of this Act, an application for a proceeds of crime order is taken to be finally determined when:
(a) the application is withdrawn; or
(b) if the application is successful - the resulting proceeds of crime order comes into force; or
(c) if the application is unsuccessful - the time within which an appeal can be made has expired and any appeals have been finally determined or otherwise disposed of.
A document that this Act requires to be in an approved form must:
(a) be in the form approved by the Inspector-General for the document; and
(b) include the information, statements, explanations or other matters required by the form; and
(c) be accompanied by any other material required by the form.
6D(2)
A reference in this Act to a document in the approved form, includes a reference to any other material included with or accompanying the document as required by the relevant form.
6D(3)
If:
(a) this Act requires a document to be in an approved form; and
(b) a provision of this Act specifies, or provides for the Insolvency Practice Rules to specify, information, statements, explanations or other matters that must be included in the document, or other material that must accompany the document;
that other provision is not taken to exclude or limit the operation of subsection (1) in relation to the approved form (and so the approved form may also require information etc. to be included in the form or material to accompany the form).
6D(4)
The Insolvency Practice Rules may make provision for and in relation to:
(a) methods of verifying any information required by or in approved forms; and
(b) the manner in which, the persons by whom, and the directions or requirements in accordance with which, approved forms are required or permitted to be signed, prepared, or completed.
This Act extends to debtors being persons who are not Australian citizens and persons who have privilege of Parliament.
7(1A)
This Act applies to debtors whether or not they have attained the age of 18 years.
7(2)
A sequestration order shall not be made against, nor a debtor's petition presented by: (a) a corporation; or (b) a partnership or association registered under a law of the Commonwealth, of a State or of a Territory, that provides for the winding up of a partnership or association registered under that law.
7(3)
This Act applies, with any modifications prescribed by the regulations, in relation to limited partnerships as if they were ordinary partnerships and, upon all the general partners of a limited partnership becoming bankrupt, the assets of the limited partnership shall vest in the trustee.
7(4)
(Omitted by No 119 of 1987, s 7(c).)
SECTION 7A 7A APPLICATION OF THE CRIMINAL CODE
Chapter 2 of the Criminal Code applies to all offences against this Act.
Note:
Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
This Act binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory and of the Northern Territory.
This Act does not affect a law of a State or Territory relating to matters not dealt with expressly or by necessary implication in this Act.
9(2)-(4)(Omitted by No 12 of 1980, s 6.)
SECTION 9A 9A ACT DOES NOT EXTEND TO NORFOLK ISLAND
(Repealed by No 154 of 2020)
The Minister may, either generally or as otherwise provided in the instrument of delegation, by writing signed by him or her, delegate to an officer all or any of the Minister's powers under this Act, other than the powers under subsections 185C(4B), 186F(4) and 186G(2B), the power under subsection 105-1(1) of Schedule 2 and this power of delegation.
10(2)
A power delegated under subsection (1) shall, when exercised by a delegate, be deemed to have been exercised by the Minister.
10(3)
A delegation under subsection (1) does not prevent the exercise of a power by the Minister.
10(4)
The Secretary may, either generally or as otherwise provided in the instrument of delegation, by writing signed by him or her, delegate to an officer all or any of the Secretary's powers under this Act, other than this power of delegation.
10(5)
A power delegated under subsection (4) shall, when exercised by a delegate, be deemed to have been exercised by the Secretary.
10(6)
A delegation under subsection (4) does not prevent the exercise of a power by the Secretary.
10(7)
In this section:
officer
(Omitted by No 115 of 1990, s 5.)
Secretary
means the Secretary of the Department.
For the purposes of this Act, there shall be an Inspector-General in Bankruptcy.
11(2) [Powers and functions](a) the general administration of this Act; and
(b) the other powers and other functions conferred or imposed on him or her by this Act.
The Inspector-General may exercise any of the powers (including the power under section 18), and perform any of the functions, of an Official Receiver, in the same way as the Official Receiver.
The Inspector-General may by signed instrument delegate to an authorised employee all or any of the powers and functions of the Inspector-General under this Act.
The Inspector-General:
(a) shall make such inquiries and investigations as the Minister directs; and
(b) may make such inquiries and investigations as the Inspector-General thinks fit with respect to the administration of, or the conduct of a trustee (including a controlling trustee) in relation to:
(i) a bankruptcy; or
(ii) a composition or scheme of arrangement under Division 6 of Part IV; or
(iii) a personal insolvency agreement; or
(iv) an administration under Part XI; or
(v) property in relation to which a direction has been given under subsection 50(1); or
(vi) property in relation to which the trustee is the controlling trustee under an authority given under section 188; and
(ba) may make such inquiries and investigations as the Inspector-General thinks fit with respect to so much of the conduct and examinable affairs of:
(i) a bankrupt; or
(ii) a bankrupt or debtor under a composition or scheme of arrangement under Division 6 of Part IV; or
(iia) a debtor under a debt agreement proposal or debt agreement under Part IX; or
(iib) a debtor whose property is subject to control under Division 2 of Part X; or
as is relevant to the bankruptcy, composition, scheme or agreement, as the case may be; and
(iii) a debtor under a personal insolvency agreement;
(bb) may make such inquiries and investigations as the Inspector-General thinks fit with respect to any conduct of an administrator that relates to a debt agreement; and
(bc) may make such inquiries and investigations as the Inspector-General thinks fit with respect to whether a person has committed an offence against this Act; and
(bd) may make such inquiries and investigations as the Inspector-General thinks fit with respect to any conduct of a registered debt agreement administrator (including conduct engaged in before a debt agreement proposal, specifying the administrator under paragraph 185C(2)(c), is given to the Official Receiver), except conduct covered by paragraph (bb) or (bc); and
(c) shall from time to time obtain from Official Receivers and other officers and from registered trustees reports as to the operation of this Act; and
(d) must give the Minister, after the end of each financial year, a report on the operation of this Act during that financial year for presentation by the Minister to the Parliament.
12(1A)
Where the Inspector-General requests a registered trustee or the administrator of a debt agreement, for the purposes of subsection (1), to provide a report as to the operation of this Act, the registered trustee or administrator, as the case may be, shall forthwith provide the report requested.
12(1BA)
The Inspector-General may make an inquiry or investigation under paragraph (1)(b), (ba), (bb) or (bc) at any time, whether before or after the end of the bankruptcy, composition, scheme or agreement or administration concerned.
12(1B)
Where the Inspector-General makes an inquiry or investigation referred to in paragraph (1)(b), (ba), (bb) or (bc), the Inspector-General may give a copy of the report of the results of the inquiry or investigation to any person the Inspector-General thinks fit.
12(1C)
Without limiting the generality of paragraphs (1)(a) and (b), the Inspector-General may make inquiries and investigations under those paragraphs at the request of:
(a) if the Inspector-General is satisfied that the request relates to an application, or proposed application, for a confiscation order - the Commonwealth proceeds of crime authority that is the responsible authority, or that is proposed to be the responsible authority, for the application or proposed application under the Proceeds of Crime Act 2002; or
(b) if the Inspector-General is satisfied that the request relates to an application, or proposed application, for an interstate confiscation order - a person who is entitled, under a corresponding law, to apply for an order of that kind.
12(1D)
For the purposes of paragraph (1)(bb), any conduct engaged in by the administrator of a debt agreement:
(a) in fulfilment, or purported fulfilment, of a duty of the administrator under this Act; or
(b) in breach of a duty of the administrator under this Act;
is taken to be conduct of the administrator that relates to a debt agreement, even if the conduct does not relate to a particular debt agreement.
12(1E)
For the purposes of paragraph (1)(bb), if a person signs a certificate under subsection 185C(2D) in relation to a debt agreement proposal, the person's conduct in relation to the certificate is taken to be conduct of an administrator that relates to a debt agreement.
12(1F)
For the purposes of paragraph (1)(bb), if a person:
(a) gives a notification in compliance, or purported compliance with subsection 185N(5); or
(b) breaches subsection 185N(5);
the giving of the notification, or the breach, as the case may be, is taken to be the conduct of an administrator that relates to a debt agreement.
12(2)
For the purposes of discharging his or her functions under this Act, the Inspector-General may:
(a) require the production of any books kept by an Official Receiver or by a trustee; and
(b) require a trustee to answer an inquiry made to him or her in relation to any of the following matters in which the trustee is, or has been, engaged:
(i) a bankruptcy;
(ii) the control of property under an authority given under section 188;
(iii) an administration under Part XI;
(iv) a personal insolvency agreement, scheme of arrangement or composition; and
(c) at any time investigate the books of a trustee; and
(d) require the production of any books kept by the administrator, or former administrator, of a debt agreement; and
(e) require the administrator, or former administrator, of a debt agreement to answer an inquiry made of the administrator or former administrator, as the case may be, in relation to the administration of the debt agreement; and
(f) at any time investigate the books of the administrator, or former administrator, of a debt agreement.
12(2A)
If the Inspector-General believes on reasonable grounds that a person has information that is relevant to an inquiry or investigation under paragraph (1)(bc), the Inspector-General may, by written notice given to the person, require the person to give to the Inspector-General, within the period and in the manner specified in the notice, any such information.
12(2B)
The period specified in a notice given under subsection (2A) must be at least 14 days after the notice is given.
12(2C)
A person commits an offence if:
(a) the person has been given a notice under subsection (2A); and
(b) the person fails to comply with the notice.
Penalty: Imprisonment for 12 months.
12(2D)
A notice under subsection (2A) must set out the effect of the following provisions:
(a) subsection (2C);
(b) section 137.1 of the Criminal Code (about giving false or misleading information).
12(2E)
Subsection (2A) does not limit the application of subsection (2) in relation to an inquiry or investigation under paragraph (1)(bc).
12(3)
(Omitted by No 44 of 1996, Sch 1, Pt 1(55).)
12(4)
The Inspector-General may disclose information obtained by the Inspector-General in the course of exercising powers or performing functions under this Act to any of the following bodies, if the Inspector-General is satisfied that the information will enable or assist the body to exercise any of its powers or perform any of its functions:
(a) a Commonwealth entity (within the meaning of the Public Governance, Performance and Accountability Act 2013);
(b) a prescribed professional disciplinary body.
SECTION 13 13 THE AUSTRALIAN FINANCIAL SECURITY AUTHORITY
For the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):
(a) the following group of persons is a listed entity:
(i) the Inspector-General;
(ii) persons engaged under the Public Service Act 1999 to assist the Inspector-General; and
(b) the listed entity is to be known as the Australian Financial Security Authority; and
(c) the Inspector-General is the accountable authority of the Australian Financial Security Authority; and
(d) the persons referred to in paragraph (a) are officials of the Australian Financial Security Authority; and
(e) the purposes of the Australian Financial Security Authority include the functions of the Inspector-General referred to in subsection 11(2) and section 12.
(Omitted by No 44 of 1996, Sch 1, Pt 1(57).) SECTION 15 OFFICIAL RECEIVERS 15(1) [As Minister thinks necessary]
There is to be such number of Official Receivers as the Minister thinks necessary.
(Omitted by No 44 of 1996, Sch 1, Pt 1(58).)
15(3) [Powers and functions]
Each Official Receiver has such powers and functions as are conferred or imposed on an Official Receiver by this Act.
An Official Receiver may by signed instrument delegate to an authorised employee all or any of the powers and functions of the Official Receiver under this Act.
The Court may review an act done by an Official Receiver.
Note:
Section 303 explains who may apply to the Court for review of an Official Receiver's action.
The Inspector-General and each Official Receiver shall be appointed by the Minister.
The Minister may appoint a person to act as Inspector-General:
(a) during a vacancy in the office of Inspector-General; or
(b) during any period, or during all periods, when the Inspector-General is absent from duty or from Australia or is, for any other reason, unable to perform the functions of his or her office.
Note:
For rules that apply to acting appointments, see section 33A of the Acts Interpretation Act 1901.
The Inspector-General may appoint a person to act as Official Receiver:
(a) during a vacancy in the office of Official Receiver; or
(b) during any period, or during all periods, when the Official Receiver is absent from duty or from Australia or is, for any other reason, unable to perform the functions of his or her office.
Note:
For rules that apply to acting appointments, see section 33A of the Acts Interpretation Act 1901.
(Repealed by No 131 of 2002)
17(4)
(Repealed by No 131 of 2002)
17(5)
(Repealed by No 131 of 2002)
17(6)
(Repealed by No 131 of 2002)
17(7)
(Repealed by No 46 of 2011)
17A-17AA SECTIONS 17A-17AA (OMITTED)
(Omitted by No 44 of 1996, Sch 1, Pt 1(61).) SECTION 17B ARRANGEMENTS FOR SERVICES OF STATE MAGISTRATES AND CERTAIN LOCAL COURT JUDGES 17B(1)
The Governor-General may arrange with the Governor of a State for the performance of the functions of a magistrate under this Act by all or any of the persons who from time to time hold office as Magistrates of the State.
17B(1A)
The Governor-General may arrange with the Governor of New South Wales for the performance of the functions of a magistrate under this Act by all or any of the persons who from time to time hold office as Judges of the Local Court of New South Wales.
17B(2)
The Governor-General may arrange with the Administrator of the Northern Territory for the performance of the functions of a magistrate under this Act by all or any of the persons who from time to time hold office as Judges of the Local Court of the Northern Territory.
Corporate status of Official Trustee
18(1)
The corporation sole known as the Official Trustee in Bankruptcy, that existed immediately before this subsection commenced, continues in existence as a body corporate with the same name.
18(2)
The body corporate continued in existence by force of subsection (1):
(a) has perpetual succession;
(b) may acquire, hold and dispose of real and personal property; and
(c) may sue and be sued in its corporate name.
Extra function of Official Trustee
18(3)
The functions of the Official Trustee include acting in accordance with an order of a court relating to the payment of a debt due by a person to the Commonwealth or a Commonwealth authority.
Example:
Such an order may, for example, provide for the Official Trustee to:
(a) take custody of, control and own property as security for payment of such a debt; and (b) sell the property; and (c) apply the proceeds of the sale wholly or partly towards the payment of the debt.
Note:
Other provisions of this Act and other laws of the Commonwealth confer other functions on the Official Trustee.
Official Trustee's seals
18(4)
The Official Trustee shall have such seals as the Minister directs by writing under his or her hand.
18(5)
The designs of the seals of the Official Trustee shall be as determined by the Minister by writing under his or her hand.
18(6)
(Omitted by No 168 of 1986, s 3, Sch 1.)
18(7)
All courts (whether exercising federal jurisdiction or not), and all persons acting judicially, shall take judicial notice of the mark of such a seal affixed on a document and shall, in the absence of proof to the contrary, presume that it was duly affixed.
Official Receiver acting for Official Trustee
18(8)
The Official Receiver may exercise the powers, and perform the functions, of the Official Trustee.
18(8AA)
In exercising powers or performing functions under subsection (8), an Official Receiver must act in the name of, and on behalf of, the Official Trustee.
18(8A)
All acts and things done in the name of, or on behalf of, the Official Trustee by any Official Receiver, shall be deemed to have been done by the Official Trustee.
Inspector-General acting for Official Trustee
18(8B)
The Inspector-General may exercise any of the powers, and perform any of the functions, of the Official Trustee that are not related to any of the following matters:
(a) a bankruptcy;
(b) control of a debtor's property under section 50;
(c) a scheme of arrangement or composition under Division 6 of Part IV;
(d) a matter relating to a debt agreement proposal;
(e) Part X administration;
(f) administration under Part XI.
18(8C)
In exercising powers or performing functions under subsection (8B), the Inspector-General must act in the name of, and on behalf of, the Official Trustee.
18(8D)
Anything done by the Inspector-General in the name of, or on behalf of, the Official Trustee is taken to have been done by the Official Trustee.
18(8E)
In subsection (8B):
matter relating to a debt agreement proposal
includes:
(a) a debt agreement; and
(b) an activity required or permitted by a debt agreement.
(a) an activity that a controlling trustee may or must carry out after consenting to exercise powers given by an authority under section 188 (including control of a debtor's property under Division 2 of Part X); or
(b) a personal insolvency agreement.
State of mind of Official Trustee
18(9)
Where, under a provision of this Act, the exercise of a power or the performance of a function by the Official Trustee is dependent upon the opinion, belief or state of mind of the Official Trustee in relation to a matter:
(a) the power may be exercised or the function performed by a person who may exercise the power or perform the function under subsection (8) or (8B), in the name of, or on behalf of, the Official Trustee upon the opinion, belief or state of mind in relation to that matter of the person exercising the power or performing the function; and
(b) any act or thing done in accordance with this subsection shall be deemed to have been done by the Official Trustee.
18(10)
Where the Official Trustee is one of the trustees of a personal insolvency agreement, composition or scheme of arrangement, a power the exercise of which, or a function the performance of which, is dependent upon the opinion, belief or state of mind of those trustees in relation to a matter may be exercised or performed by those trustees as if the opinion, belief or state of mind in relation to that matter of:
(a) an Official Receiver who; or
(b) another person who with the authority of an Official Receiver;
acts in the name of, or on behalf of, the Official Trustee in the exercise of the power or the performance of the function were the opinion, belief or state of mind in relation to the matter of the Official Trustee.
General interpretation provisions
18(11)
A reference in a law of the Commonwealth to the Official Receiver of the estate of a bankrupt shall, in relation to the vesting, holding or disposal of property, be read as including a reference to the Official Trustee.
18(12)
A reference in a law of the Commonwealth to the Official Receiver in Bankruptcy shall be read as including a reference to the Official Trustee.
SECTION 18AA 18AA PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY ACT 2013 DOES NOT APPLY TO THE OFFICIAL TRUSTEE
Despite paragraph 10(1)(d) of the Public Governance, Performance and Accountability Act 2013, the Official Trustee is not a Commonwealth entity for the purposes of that Act.
The Official Trustee is subject to the same personal liability in respect of an act done, or omitted to be done, by it as:
(a) the trustee of the estate of a bankrupt; or
(b) the trustee of the estate of a deceased debtor; or
(c) the trustee of a composition or scheme of arrangement accepted under Division 6 of Part IV; or
(d) the controlling trustee in relation to a debtor whose property is subject to control under Division 2 of Part X; or
(e) the trustee of a personal insolvency agreement;
as an individual would be subject if the individual had done, or omitted to do, that act as such a trustee.
The Commonwealth is by force of this subsection liable to indemnify the Official Trustee against any personal liability, including any personal liability as to costs, incurred by it:
(a) by reason of subsection (1); or
(b) for any act done, or omitted to be done, by it in carrying out, or purporting to carry out, a direction given, or an order made, by the Court under section 50; or
(c) for any act done, or omitted to be done, by the Official Trustee:
(i) under Part IX; or
(ii) under the authority contained in a debt agreement to deal with the property of the person who is a party (as debtor) to the agreement.
Nothing in subsection (2) affects any right that the Official Trustee has, apart from that subsection, to be reimbursed in respect of any personal liability referred to in that subsection or any other indemnity given to the Official Trustee in respect of any such liability.
Where the Commonwealth makes a payment in accordance with the indemnity referred to in subsection (2), the Commonwealth has the same right to reimbursement in respect of the payment (including reimbursement under another indemnity given to the Official Trustee) as the Official Trustee would have if the Official Trustee had made the payment.
The duties of the trustee of the estate of a bankrupt include the following:
(a) notifying the bankrupt's creditors of the bankruptcy;
(b) determining whether the estate includes property that can be realised to pay a dividend to creditors;
(c) reporting to creditors within 3 months of the date of the bankruptcy on the likelihood of creditors receiving a dividend before the end of the bankruptcy;
(d) (Repealed)
(e) determining whether the bankrupt has made a transfer of property that is void against the trustee;
(f) taking appropriate steps to recover property for the benefit of the estate;
(g) taking whatever action is practicable to try to ensure that the bankrupt discharges all of the bankrupt's duties under this Act;
(h) considering whether the bankrupt has committed an offence against this Act;
(i) referring to the Inspector-General or to relevant law enforcement authorities any evidence of an offence by the bankrupt against this Act;
(j) administering the estate as efficiently as possibleby avoiding unnecessary expense;
(k) exercising powers and performing functions in a commercially sound way;
(l) the duties imposed on the trustee under Schedule 2.
19(1A)-(1D)
(Omitted by No 44 of 1996, Sch 1, Pt 1(74).)
19(2)
Where a person who became a bankrupt on a creditor's petition is unable to prepare a proper statement of affairs, the trustee may employ, at the expense of the estate, a qualified person to assist in the preparation of the statement.
SECTION 19AA POWER OF INVESTIGATION OF BANKRUPT'S AFFAIRS 19AA(1) [Registered trustee's powers of investigation]
The trustee of the estate of a bankrupt may investigate:
(a) the bankrupt's conduct and examinable affairs; and
(b) books, accounts and records kept by the bankrupt;
so far as they relate to the bankruptcy.
(Repealed by No 131 of 2002)
SECTION 19A LIABILITY OF INSPECTOR-GENERAL, OFFICIAL RECEIVERS ETC. 19A(1)
The Commonwealth shall indemnify a person to whom this section applies against any liability incurred by him or her:
(a) for any act done negligently, or negligently omitted to be done, by him or her in the course of the performance of his or her duties under this Act; and
(b) for any act done by him or her in good faith in the purported performance of his or her duties under this Act.
19A(2)
The Commonwealth has the same liability for acts of, or omissions by, a person to whom this section applies in the course of the performance or purported performance of his or her duties under this Act as a master has for acts of, or omissions by, his or her servants.
19A(3)
A reference in this section to a person to whom this section applies shall be read as a reference to the Inspector-General, a Registrar, an Official Receiver, an officer performing any of the functions or duties, or exercising any of the powers, of an Official Receiver or an officer or other person assisting a Registrar or an Official Receiver in the performance of his or her functions or duties or the exercise of his or her powers.
SECTION 19B TRUSTEE TO GIVE OFFICIAL RECEIVER INFORMATION ETC. 19B(1)
The trustee of the estate of a bankrupt must give the Official Receiver such information, access to and facilities for inspecting the bankrupt's books and generally such assistance as is necessary for enabling the Official Receiver to perform his or her duties.
19B(2)
This section does not apply to the Official Trustee.
(Omitted by No 44 of 1996, Sch 1, Pt 1(79).) Division 2 - Common Investment Fund SECTION 20A 20A INTERPRETATION
In this Division, unless the contrary intention appears:
Common Fund
means the Common Investment Fund established in pursuance of section 20B.
Equalization Account
means the Common Investment Fund Equalization Account continued in existence by section 20G.
Equalization Account
(Repealed by No 152 of 1997)
Equalization Reserve
(Repealed by No 8 of 2005)
The Official Trustee shall open and maintain an account to be known as the Common Investment Fund.
20B(2)
All moneys (other than moneys to which subsection (8) applies) received by the Official Trustee after the commencement of this section shall be paid into the Common Fund.
20B(3)
All moneys (other than moneys to which subsection (8) applies) held by the Official Trustee at the commencement of this section, including moneys that, at that time, are held on deposit with a bank under subsection 172(1), and all investments made under that subsection and held by the Official Trustee at that time, shall form part of the Common Fund.
20B(4)
The Official Trustee shall open and maintain, with an ADI or ADIs, such accounts for the purposes of the Common Fund as are necessary for the purposes of the Common Fund.
20B(5)
(Repealed by No 106 of 2010, Sch 3 item 9.)
20B(6)
The payment of moneys into an account referred to in subsection (4) shall be deemed to be the payment of those moneys into the Common Fund.
20B(7)
Any payment that the Official Trustee is authorized, required or permitted, by or under a provision of this Act, to make out of moneys standing to the credit of the estate of a bankrupt or a deceased debtor shall be made out of moneys in the Common Fund.
20B(7A)
Any payment that the Official Trustee is authorised, required or permitted to make under:
(a) a debt agreement; or
(b) a personal insolvency agreement;
is to be made out of money in the Common Fund.
20B(8)
This subsection applies to moneys held or received by the Official Trustee:
(aa) acting in accordance with an order of a court relating to the payment of a debt due by a person to the Commonwealth or a Commonwealth authority; or
(a) under a direction given, or order made, under section 50; or
(b) (Omitted by No 168 of 1986, s 3, Sch 1.)
(c) as the controlling trustee in relation to a debtor whose property is subject to control under Division 2 of Part X.
(d)-(e) (Omitted by No 168 of 1986, s 3, Sch 1.)
SECTION 20C 20C (REPEALED)
(Repealed by No 168 of 1986, s 3, Sch 1.) SECTION 20D INVESTMENT OF MONEY IN COMMON FUND 20D(1)
The moneys in the Common Fund not immediately required for the purposes of this Act may be invested by the Official Trustee: (a) in public securities; or (b) in a loan the repayment of which is guaranteed by the Commonwealth, a State or a Territory; or (c) in a loan to a municipal corporation or other local governing body in Australia; or (d) in a loan to, or on deposit with, an ADI; or (e) in bank bills accepted or endorsed by an ADI.
20D(2)-(3)
(Omitted by No 168 of 1986, s 3, Sch 1.)
20D(4)
The Official Trustee: (a) shall endeavour to ensure that the moneys in the Common Fund lodged in accounts at call with an ADI or ADIs are, as far as practicable, at all times sufficient to meet the payments that under this Act are to be made out of moneys in the Common Fund; and (b) will ensure that moneys in the Common Fund that, in the opinion of the Official Trustee, are not required to be kept in accounts at call with an ADI or ADIs in accordance with paragraph (a) are, as far as practicable, invested in accordance with subsection (1).
20D(5)
(Omitted by No 44 of 1996, Sch 1, Pt 1(81).)
20D(6)
Interest derived from the investment of moneys in the Common Fund is not subject to taxation under a law of the Commonwealth, a State or a Territory.
20D(7)
The Common Fund is not subject to taxation under a law of the Commonwealth, or to taxation under a law of a State or Territory to which the Commonwealth is not subject, and the Official Trustee is not otherwise subject to taxation under such a law in respect of anything done in the exercise of powers conferred on it by subsection (1).
20D(8)
In this section, public securities means: (a) bonds, debentures, stock and other securities issued under an Act; (b) bonds, debentures, stock and other securities issued by:
(i) a State;
(ii) a Territory;
(iii) a municipal corporation or other local governing body; or
(c) securities issued in respect of a loan to a body (whether incorporated or not) whose principal business is the supply and distribution, by a system of reticulation, in Australia or in a Territory, of water, gas or electricity; and (d) other securities specified in the regulations as public securities for the purposes of this section;
(iv) a public authority constituted by or under a law of a State or Territory;
but does not include:
(e) securities referred to in paragraph (a) or (b) that are issued in respect of a loan raised outside Australia and the Territories unless the securities are public securities for the purposes of the Income Tax Assessment Act 1936; or (f) securities issued after 12 April 1976 by an ADI.SECTION 20E BORROWING FOR THE COMMON FUND 20E(1)
Where the Official Trustee is of the opinion:
(a) that moneys in the Common Fund deposited in accounts at call with an ADI or ADIs are likely to be insufficient to meet payments that under this Act are to be made out of moneys in the Common Fund; and
(b) that it would be undesirable to convert into money investments made under section 20D for the purpose of enabling those payments to be so made;
the Official Trustee may apply to the Finance Minister to borrow from the Commonwealth under this section moneys not exceeding such amount as is specified in the instrument.
20E(2)
The Finance Minister may, on behalf of the Commonwealth, lend to the Official Trustee, on such terms and conditions as he or she determines, moneys that the Official Trustee has applied under subsection (1) to borrow.
20E(3)
Moneys borrowed by the Official Trustee from the Commonwealth under this section shall be paid into the Common Fund.
20E(4)
Interest is not payable on moneys lent to the Official Trustee by the Commonwealth under this section.
20E(5)
Moneys lent to the Official Trustee by the Commonwealth under this section shall be paid out of moneys available under an appropriation made by the Parliament.
SECTION 20F MONEYS IN COMMON FUND NOT HELD ON ACCOUNT OF PARTICULAR ESTATES ETC. 20F(1) [Moneys not held for particular estate]
No moneys in the Common Fund shall be held, or be deemed for any purpose to be held, on account of any particular estate or fund.
Investments made from moneys in the Common Fund shall not be made, and shall not be deemed for any purpose to be made, on account of any particular estate or fund.
Any capital appreciation or depreciation in the value of investments made from moneys in the Common Fund shall not increase or decrease the amount payable under this Act in respect of any estate or fund.
The making of a capital profit or capital loss on the realization of investments made from moneys in the Common Fund shall not increase or decrease the amount payable under this Act in respect of any estate or fund.
Interest derived from the investment of moneys in the Common Fund shall not increase the amount payable under this Act in respect of any estate or fund.
The Official Trustee shall cause accounts to be kept showing the amount in the Common Fund from time to time standing to the credit of each estate or fund in respect of which moneys have been paid into the Common Fund.
Moneys received or held by the Official Trustee as trustee of any estate or fund do not cease to be moneys in hand for the purposes of this Act by reason only that those moneys have been paid into or become part of the Common Fund.
In this section:
estate
means the estate of a bankrupt or of a deceased debtor.
fund
means a fund of moneys referred to in paragraph 20J(1)(b).
There is continued in existence the Common Investment Fund Equalization Account.
Note:
The Account was established by subsection 5(3) of the Financial Management Legislation Amendment Act 1999.
20G(2)
The Account is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013.
Interest derived from the investment of money in the Common Fund must be paid to the Commonwealth.
20H(2) [Capital profits]An amount equal to the amount of any capital profit made upon the realization of an investment made from money in the Common Fund must be paid out of the Common Fund to the Commonwealth.
20H(3) [Equalization Account]Whenever a payment is made to the Commonwealth under subsection (1) or (2), an equal amount must be credited to the Equalization Account.
20H(4) [Debits](a) the amount of any capital loss incurred upon the realization of an investment made from money in the Common Fund; or
(b) each amount of interest that:
(i) forms part of the estate of a bankrupt or of a deceased debtor by virtue of subsection 20J(2) or (3); or
(ii) forms part of a fund referred to in paragraph 20J(1)(b) by virtue of subsection 20J(2) or (3A); or
(iii) is payable to a person by virtue of subsection 20J(4);
is to be debited from the Equalization Account and paid into the Common Fund.
20H(5) [Amounts not required for payment]The Inspector-General must, at such times as the Inspector-General considers appropriate and, in any event, at least once every 6 months, determine whether any amounts standing to the credit of the Equalization Account are not required for the purposes of subsection (4). If the Inspector-General determines that any amounts are not so required, the Inspector-General may direct that the amounts not so required, or any part of those amounts, are to be debited from the Equalization Account.
Whenever an amount required by subsection (4) to be debited from the Equalization Account exceeds the amount standing to the credit of the Equalization Account, an amount equal to the excess must be credited to the Equalization Account.
Where the Official Trustee is:
(a) the trustee of the estate of a bankrupt or of a deceased debtor; or
(b) the trustee of a fund of moneys held or received by the Official Trustee in respect of a particular debtor or bankrupt by reason of being:
(i) the trustee of a composition, or of a scheme of arrangement, accepted under Division 6 of Part IV; or
(ii) the trustee of a personal insolvency agreement;
the estate or the fund is not entitled, except as provided by subsections (2), (3) and (3A), to interest on moneys held by the Official Trustee as trustee of the estate or fund, as the case may be.
Where moneys have been held, or are likely to be held, for a prescribed reason, or for one prescribed reason and then for another prescribed reason, by the Official Trustee as the trustee of the estate of a bankrupt or of a deceased debtor, or as trustee of a fund referred to in paragraph (1)(b), for not less than one year longer than those moneys would have been held, or would be likely to be held, by the Official Trustee but for that reason or those reasons, the Inspector-General may direct, by writing under his or her hand, that interest on those moneys, at the rate prescribed by the regulations for the purposes of this section and in respect of such period as he or she determines, shall form part of that estate or fund, as the case may be.
Where, on or after the date of commencement of this section (in the subsection referred to as the commencing date ), the Official Trustee receives an amount by way of interest on moneys (other than moneys of the kind referred to in paragraph (1)(b)), or on investments, that form part of the Common Fund by virtue of subsection 20B(3):
(a) if the interest accrued in respect of a period that ended before the commencing date - the amount of the interest forms part of the estate in respect of which those moneys or investments were held immediately before the commencing date; or
(b) if the interest accrued in respect of a period that commenced before, but ended on or after, the commencing date - an amount that bears to the amount of that interest the same proportion as the number of days in the part of the period in respect of which the interest accrued that occurred before the commencing date bears to the number of days in that period forms part of the estate in respect of which those moneys or investments were held immediately before the commencing date.
Where, on or after the date of commencement of this subsection (in this subsection referred to as the commencing day ), the Official Trustee receives an amount by way of interest on moneys held or received by the Official Trustee by reason of being trustee of a fund referred to in paragraph (1)(b) (in this subsection referred to as the appropriate fund ), being moneys that form part of the Common Fund:
(a) if the interest accrued in respect of a period that ended before the commencing date - the amount of the interest forms part of the appropriate fund; or
(b) if the interest accrued in respect of a period that commenced before, but ended on or after, the commencing day - an amount that bears to the amount of that interest the same proportion as the number of days in the part of the period in respect of which the interest accrued that occurred before the commencing day bears to the number of days in that period forms part of the appropriate fund.
(a) moneys held by the Official Trustee as the trustee of the estate of a bankrupt or of a deceased debtor do not form part of the estate; or
(b) moneys held by the Official Trustee as part of a fund referred to in paragraph (1)(b) do not form part of the fund;
interest on those moneys is payable to the person to whom those moneys are payable, out of the Common Fund, at the rate prescribed by the regulations for the purposes of this section and in respect of the period during which those moneys are held by the Official Trustee.
For the purposes of subsection (2), moneys shall be taken to have been held, or to be likely to be held, by the Official Trustee for a prescribed reason if the moneys have been held, or are likely to be held, as the case may be, by the Official Trustee:
(a) by reason of the institution or defending of legal proceedings in good faith;
(b) by reason that a person has, or has had, under consideration, in good faith, the institution or defending of legal proceedings; or
(c) for any other reason declared by the regulations to be a prescribed reason for the purposes of this section.
The Federal Court and the Federal Circuit and Family Court of Australia (Division 2) have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than: (a) the jurisdiction of the High Court under section 75 of the Constitution; or (b) the jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) under section 35 or 35A of this Act.
27(2)
To avoid doubt, subsection (1) does not: (a) confer jurisdiction in a criminal matter; or (b) exclude the jurisdiction of a court of a State or Territory under the Judiciary Act 1903 in a criminal matter relating to this Act.
(Omitted by No 44 of 1996, Sch 1, Pt 1(91).) SECTION 29 COURTS TO HELP EACH OTHER 29(1) [All Courts with jurisdiction]
All Courts having jurisdiction under this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.
29(2) [Aid to external Territories, other countries]In all matters of bankruptcy, the Court:
(a) shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed countries, that have jurisdiction in bankruptcy; and
(b) may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in bankruptcy.
Where a letter of request from a court of an external Territory, or of a country other than Australia, requesting aid in a matter of bankruptcy is filed in the Court, the Court may exercise such powers with respect to the matter as it could exercise if the matter had arisen within its own jurisdiction.
The Court may request a court of an external Territory, or of a country other than Australia, that has jurisdiction in bankruptcy to act in aid of and be auxiliary to it in any matter of bankruptcy.
In this section, prescribed country means:
(a) the United Kingdom, Canada and New Zealand;
(b) a country prescribed by the regulations for the purposes of this subsection; and
(c) a colony, overseas territory or protectorate of a country specified in paragraph (a) or of a country so prescribed.
(a) has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and
(b) may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.
The Court may direct such inquiries to be made and accounts to be taken for the purposes of any proceeding before the Court as the Court considers necessary and may, when directing an account to be taken, or subsequently, give special directions as to the manner in which the account is to be taken or vouched.
30(3) [Trial by jury of question of fact]If in a proceeding before the Federal Court under this Act a question of fact arises that a party desires to have tried before a jury, the Federal Court may, if it thinks fit, direct the trial of that question to be had before a jury, and the trial may be had accordingly in the same manner as if it were the trial of an issue of fact in an action.
(Omitted by No 44 of 1996, Sch 1, Pt 1(94).)
30(5) [Court may enforce certain orders etc by officers]
(a) a bankrupt, a debtor or any other person has failed to comply with an order or direction of a Registrar, or with a direction or requirement of an Official Receiver or trustee, under this Act; or
(b) a trustee has failed to comply with an order, direction or requirement of a Registrar, or with a requirement or request of the Inspector-General, under this Act;
the Court may, on the application of the Registrar, Official Receiver, trustee or Inspector-General, as the case requires:
(c) order the person who has failed to comply with the order, direction, requirement or request, as the case may be, to comply with it; or
(d) if it thinks fit, make an immediate order for the committal to prison of that person.
The power conferred on the Court by subsection (5) is in addition to, and not in substitution for, any other right or remedy in respect of the failure to comply with the order, direction, requirement or request, as the case may be.
In exercising jurisdiction under this Act, the Court shall hear and determine the following matters in open Court:
(a) creditors' petitions;
(b) examinations under this Act;
(ba) (Omitted by No 143 of 1992, Sch.)
(c) proceedings in connection with the consideration of an annulment of a bankruptcy under section 153B;
(d) applications under:
(i) section 222 (as applied by section 76B); or
for an order setting aside or terminating a composition or scheme of arrangement under Division 6 of Part IV;
(ii) section 222C (as applied by section 76B);
(da) (Repealed by No 80 of 2004.)
(e) applications to set aside or avoid a charge, charging order, settlement, disposition, conveyance, transfer security or payment;
(ea) applications under section 139A;
(f) applications to declare for or against the title of the trustee to any property;
(g) applications for the committal of a person to prison or for the release from prison of a person committed to prison;
(h) (Omitted by No 44 of 1996, Sch 1, Pt 1(95).)
(i) applications for the trial of questions of fact with a jury and the trial of those questions;
(j) applications under Part X:
(i) for an order setting aside or terminating a personal insolvency agreement; or
(ii) for a sequestration order against the estate of a debtor;
(ja) applications for an order of annulment of the administration of the estate of a deceased person under Part XI; and
(k) summary trials under Part XIV.
31(2)
All other matters under this Act may, in the discretion of the Court, be heard in open Court or in Chambers.
SECTION 31A 31A (OMITTED)
(Omitted by No 44 of 1996, Sch 1, Pt 1(96).) SECTION 32 32 COSTS
The Court may, in any proceeding before it, including a proceeding dismissed for want of jurisdiction, make such orders as to costs as it thinks fit. SECTION 33 ADJOURNMENT, AMENDMENT OF PROCESS AND EXTENSION AND ABRIDGMENT OF TIMES 33(1)
The Court may:
(a) upon such terms as it thinks fit, at any time adjourn any proceeding before it, either to a fixed date or generally;
(b) at any time allow the amendment of any written process, proceeding or notice under this Act; or
(c) extend before its expiration or, if this Act does not expressly provide to the contrary, after its expiration, any time limited by this Act, or any time fixed by the Court or the Registrar under this Act (other than the time fixed for compliance with a bankruptcy notice), for doing an act or thing or abridge any such time.
33(2)
(Omitted by No 44 of 1996, Sch 1, Pt 1(97).)
SECTION 33A ALTERATION OF DATES RELATING TO STATEMENTS OF AFFAIRS AND DEBTOR'S PETITIONS 33A(1)
If the Court is satisfied that a person believed on reasonable grounds that a statement of affairs that relates to the person's bankruptcy was filed for the purposes of section 54, 55, 56B, 56F or 57 at a time before it was actually filed, the Court may order that the statement of affairs is to be treated as having been filed at a time before it was actually filed.
33A(2)
If: (a) the Court is satisfied that a person believed on reasonable grounds that a debtor's petition that relates to the person's bankruptcy had been presented before it was actually presented; and (b) the debtor's petition has been accepted by the Official Receiver;
the Court may order that the debtor's petition is to be treated for the purposes of sections 149 and 149A as having been accepted by the Official Receiver at a time before it was actually accepted.
33A(3)
The Court cannot make an order under subsection (1) or (2) that would result in the person being discharged from bankruptcy earlier than 30 days after the order is made.
33A(4)
In this section:
filed
includes presented, lodged or given.
SECTION 34 34 ORDERS AND COMMISSIONS FOR EXAMINATION OF WITNESSES
The Court may, for the purposes of any proceeding before it:
(a) order the examination upon oath of a person before an officer of the Court or other person, at any place within Australia; or
(b) order that a commission issue to a person either within or beyond Australia authorizing him or her to take the testimony of a person upon oath;
and may:
(c) by the same or a subsequent order, give any necessary directions concerning the time, place and manner of the examination; and
(d) admit in evidence, saving all just exceptions, the testimony obtained at the examination or in pursuance of the commission. SECTION 34A STANDARD OF PROOF 34A(1) [Proof on balance of probabilities]
Where, in proceedings in the Court (other than proceedings for an offence), it is necessary, for a purpose relating to a matter arising under this Act, to establish, or for the Court to be satisfied as to, a particular fact (including a contravention of this Act), it is sufficient if that fact is established, or the Court is satisfied as to that fact, as the case may be, on the balance of probabilities.
34A(2) [Effect of section]Subsection (1) has effect except to the extent that this Act expressly provides otherwise.
If, at a particular time: (a) a party to a marriage is a bankrupt; and (b) the trustee of the bankrupt's estate is:
(i) a party to property settlement proceedings in relation to either or both of the parties to the marriage; or
(ii) an applicant under section 79A of the Family Law Act 1975 for the variation or setting aside of an order made under section 79 of that Act in property settlement proceedings in relation to either or both of the parties to the marriage; or
(iia) an applicant for an order under subsection 90K(1) or (3) of the Family Law Act 1975 in relation to the setting aside of a financial agreement of the parties to the marriage; or
(iii) a party to spousal maintenance proceedings in relation to the maintenance of a party to the marriage;
then, at and after that time, the Federal Circuit and Family Court of Australia (Division 1) has jurisdiction in bankruptcy in relation to any matter connected with, or arising out of, the bankruptcy of the bankrupt.
35(1A)
If, at a particular time: (a) a party to a de facto relationship is a bankrupt; and (b) the trustee of the bankrupt's estate is:
(i) a party to property settlement proceedings in relation to either or both of the parties to the de facto relationship; or
(ii) an applicant under section 90SN of the Family Law Act 1975 for the variation or setting aside of an order made under section 90SM of that Act in property settlement proceedings in relation to either or both of the parties to the de facto relationship; or
(iia) an applicant for an order under subsection 90UM(1) or (6) of the Family Law Act 1975 in relation to the setting aside of a Part VIIIAB financial agreement of the parties to the de facto relationship; or
(iii) a party to maintenance proceedings under Part VIIIAB of the Family Law Act 1975 in relation to the maintenance of one of the parties to the de facto relationship;
then, at and after that time, the Federal Circuit and Family Court of Australia (Division 1) has jurisdiction in bankruptcy in relation to any matter connected with, or arising out of, the bankruptcy of the bankrupt.
35(2)
Subsections (1) and (1A) do not limit the jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) under section 35A.
35(3)
In this section:
property settlement proceedings
has the same meaning as in the Family Law Act 1975.
spousal maintenance proceedings
means proceedings under the Family Law Act 1975 with respect to the maintenance of a party to a marriage.
35(4)
An expression used in subsection (1A) that is also used in the Family Law Act 1975 has the same meaning in that subsection as it has in that Act.
SECTION 35A TRANSFER OF PROCEEDINGS TO FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1) 35A(1)
If a proceeding is pending in the Federal Court, the Federal Court may, on the application of a party to the proceeding or of its own motion, transfer the proceeding to the Federal Circuit and Family Court of Australia (Division 1).
35A(2)
(Repealed by No 13 of 2021)
35A(2A)
If a proceeding is pending in the Federal Circuit and Family Court of Australia (Division 2), the Court may, on the application of a party to the proceeding or on its own initiative, transfer the proceeding to the Federal Circuit and Family Court of Australia (Division 1).
35A(3)
Subject to subsection (4), where a proceeding is transferred to the Federal Circuit and Family Court of Australia (Division 1): (a) the Court has jurisdiction to hear and determine the proceeding; (b) the Court also has jurisdiction to hear and determine matters not otherwise within its jurisdiction (whether by virtue of paragraph (a) or otherwise):
(i) that are associated with matters arising in the proceeding; or
(c) the Court may, in and in relation to the proceeding:
(ii) that, apart from subsection 32(1) of the Federal Court of Australia Act 1976, the Federal Court would have had jurisdiction to hear and determine in the proceeding;
(i) grant such remedies;
(ii) make orders of such kinds; and
as the Federal Court could have granted, made, issued or directed the issue of, as the case may be, in and in relation to the proceeding; (d) remedies, orders and writs granted, made or issued by the Court in and in relation to the proceeding have effect, and may be enforced by the Court, as if they had been granted, made or issued by the Federal Court; (e) appeals lie from judgments of the Court given in and in relation to the proceeding as if the judgments were judgments of the Federal Court constituted by a single Judge, and do not otherwise lie; and (f) subject to paragraphs (a) to (e) (inclusive), this Act, the Federal Court of Australia Act 1976, and other laws of the Commonwealth, apply in and in relation to the proceeding as if:
(iii) issue, and direct the issue of, writs of such kinds;
(i) a reference to the Federal Court (other than in the expression "the Court or a Judge") included a reference to the Federal Circuit and Family Court of Australia (Division 1);
(ii) a reference to a Judge of the Federal Court (other than in the expression "the Court or a Judge") included a reference to a Judge of the Federal Circuit and Family Court of Australia (Division 1);
(iii) a reference to the expression "the Court or a Judge" when used in relation to the Federal Court included a reference to a Judge of the Federal Circuit and Family Court of Australia (Division 1) sitting in Chambers;
(iv) a reference to a Registrar included a reference to a Registrar of the Federal Circuit and Family Court of Australia (Division 1); and
(v) any other necessary changes were made.
Note:
Rules of Court made under Chapter 3 of the Federal Circuit and Family Court of Australia Act 2021 (rather than Rules of Court made under the Federal Court of Australia Act 1976) apply in relation to proceedings transferred to the Federal Circuit and Family Court of Australia (Division 1) under this section.
35A(4)
Where any difficulty arises in the application of paragraphs (3)(c), (d) and (f) in or in relation to a particular proceeding, the Federal Circuit and Family Court of Australia (Division 1) may, on the application of a party to the proceeding or of its own motion, give such directions, and make such orders, as it considers appropriate to resolve the difficulty.
35A(5)
An appeal does not lie from a decision of the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) in relation to the transfer of a proceeding under this Act to the Federal Circuit and Family Court of Australia (Division 1).
SECTION 35B FAMILY COURT OF WESTERN AUSTRALIA
Bankruptcy courts
35B(1)
Section 27 applies to the Family Court of Western Australia in a corresponding way to the way in which it applies to the Federal Circuit and Family Court of Australia (Division 1).
Jurisdiction in bankruptcy - bankrupt is a party to a marriage
35B(2)
Subject to subsection (3) of this section, subsection 35(1) (and subsection 35(3) so far as it relates to subsection 35(1)) applies to the Family Court of Western Australia in a corresponding way to the way in which it applies to the Federal Circuit and Family Court of Australia (Division 1).
35B(3)
Appeals lie to the Federal Circuit and Family Court of Australia (Division 1) from a judgment of the Family Court of Western Australia exercising jurisdiction under subsection 35(1) as applied by subsection (2) of this section, and do not otherwise lie.
Jurisdiction in bankruptcy - bankrupt is a party to a de facto relationship
35B(4)
If, at a particular time: (a) a party to a de facto relationship is a bankrupt; and (b) the trustee of the bankrupt's estate is:
(i) a party to proceedings under Part 5A of the Family Court Act 1997 (WA), or Part VIIIC of the Family Law Act 1975, in relation to either or both of the parties to the de facto relationship; or
(ii) an applicant under section 205ZH of the Family Court Act 1997 (WA) for the variation or setting aside of an order made under section 205ZG of that Act in proceedings with respect to the property of either or both of the parties to the de facto relationship; or
(iii) an applicant under section 90YZE of the Family Law Act 1975 for the setting aside of an order made under section 90YX of that Act in proceedings between the parties to the de facto relationship with respect to a superannuation interest of either or both of the parties to the de facto relationship; or
(iv) an applicant for an order under subsection 205ZV(1) or (3) of the Family Court Act 1997 (WA) in relation to the setting aside of a financial agreement (within the meaning of Part 5A of that Act) of the parties to the de facto relationship;
then, at and after that time, the Family Court of Western Australia has jurisdiction in bankruptcy in relation to any matter connected with, or arising out of, the bankruptcy of the bankrupt.
35B(5)
An expression used in subsection (4) that is also used in the Family Law Act 1975 has the same meaning in that subsection as it has in that Act.
35B(6)
Appeals lie to the Court of Appeal established under the Supreme Court Act 1935 (WA) from a judgment of the Family Court of Western Australia exercising jurisdiction under subsection (4) of this section, and do not otherwise lie.
35B(7)
The Court of Appeal established under the Supreme Court Act 1935 (WA) is invested with federal jurisdiction with respect to matters in respect of which appeals are instituted under subsection (6) of this section.
Transfer of proceedings
35B(8)
If a proceeding is pending in the Federal Court, the Federal Court may, on the application of a party to the proceeding or of its own motion, transfer the proceeding to the Family Court of Western Australia.
35B(9)
If a proceeding is pending in the Federal Circuit and Family Court of Australia (Division 2), the Federal Circuit and Family Court of Australia (Division 2) may, on the application of a party to the proceeding or on its own initiative, transfer the proceeding to the Family Court of Western Australia.
35B(10)
Subject to subsection (11), where a proceeding is transferred to the Family Court of Western Australia: (a) the Family Court of Western Australia has jurisdiction to hear and determine the proceeding; and (b) the Family Court of Western Australia also has jurisdiction to hear and determine matters not otherwise within its jurisdiction (whether by virtue of paragraph (a) or otherwise):
(i) that are associated with matters arising in the proceeding; or
(c) the Family Court of Western Australia may, in and in relation to the proceeding:
(ii) that, apart from subsection 32(1) of the Federal Court of Australia Act 1976, the Federal Court would have had jurisdiction to hear and determine in the proceeding; and
(i) grant such remedies; and
(ii) make orders of such kinds; and
(iii) issue, and direct the issue of, writs of such kinds;
as the Federal Court could have granted, made, issued or directed the issue of, as the case may be, in and in relation to the proceeding; and
(d) remedies, orders and writs granted, made or issued by the Family Court of Western Australia in and in relation to the proceeding have effect, and may be enforced by the Family Court of Western Australia, as if they had been granted, made or issued by the Federal Court; and (e) appeals lie from judgments of the Family Court of Western Australia given in and in relation to the proceeding as if the judgments were judgments of the Federal Court constituted by a single Judge, and do not otherwise lie; and (f) subject to paragraphs (a) to (e) (inclusive), this Act, the Federal Court of Australia Act 1976, and other laws of the Commonwealth, apply in and in relation to the proceeding as if:
(i) a reference to the Federal Court (other than in the expression "the Court or a Judge") included a reference to the Family Court of Western Australia; and
(ii) a reference to a Judge of the Federal Court (other than in the expression "the Court or a Judge") included a reference to a judge of the Family Court of Western Australia; and
(iii) a reference to the expression "the Court or a Judge" when used in relation to the Federal Court included a reference to a judge of the Family Court of Western Australia sitting in Chambers; and
(iv) a reference to a Registrar included a reference to a registrar of the Family Court of Western Australia; and
(v) any other necessary changes were made.
35B(11)
Where any difficulty arises in the application of paragraphs (10)(c), (d) and (f) in or in relation to a particular proceeding, the Family Court of Western Australia may, on the application of a party to the proceeding or of its own motion, give such directions, and make such orders, as it considers appropriate to resolve the difficulty.
35B(12)
An appeal does not lie from a decision of the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) in relation to the transfer of a proceeding under this Act to the Family Court of Western Australia.
An order of the Court made, or a warrant issued, under this Act may be enforced throughout Australia by a constable.
36(2) [Warrant may be issued]A warrant for the arrest or detention of a person for the purpose of giving effect to an order of committal or a sentence of imprisonment made or imposed by the Court under this Act may be issued under the seal of the Court.
Where the Court commits a person to prison under this Act, the committal may be to such prison as the Court thinks fit.
SECTION 37 POWER OF COURT TO RESCIND ORDERS ETC. 37(1) [Power]Subject to subsection (2), the Court may rescind, vary or discharge an order made by it under this Act or may suspend the operation of such an order.
The Court does not have power to rescind or discharge, or to suspend the operation of:
(a) a sequestration order; or
(b) an order for the administration of the estate of a deceased person under Part XI.
(Omitted by No 9 of 1992, s 8.)
SECTION 38 38 (OMITTED)
(Omitted by No 44 of 1996, Sch 1, Pt 1(101).) SECTION 39 39 (REPEALED)
(Repealed by No 161 of 1976, s 6(1).) PART IV - PROCEEDINGS IN CONNEXION WITH BANKRUPTCY Division 1 - Acts of bankruptcy SECTION 40 ACTS OF BANKRUPTCY 40(1)
A debtor commits an act of bankruptcy in each of the following cases: (a) if in Australia or elsewhere he or she makes a conveyance or assignment of his or her property for the benefit of his or her creditors generally; (b) if in Australia or elsewhere:
(i) he or she makes a conveyance, transfer, settlement or other disposition of his or her property or of any part of his or her property;
(ii) he or she creates a charge on his or her property or on any part of his or her property;
(iii) he or she makes a payment; or
that would, if he or she became a bankrupt, be void as against the trustee; (c) if, with intent to defeat or delay his or her creditors:
(iv) he or she incurs an obligation;
(i) he or she departs or remains out of Australia;
(ii) he or she departs from his or her dwelling-house or usual place of business;
(iii) he or she otherwise absents himself or herself; or
(d) if:
(iv) he or she begins to keep house;
(i) execution has been issued against him or her under process of a court and any of his or her property has, in consequence, either been sold by the sheriff or held by the sheriff for 21 days; or
(daa) if the debtor presents a debtor's petition under this Act; (da) if the debtor presents to the Official Receiver a declaration under section 54A; (e) if, at a meeting of any of his or her creditors:
(ii) execution has been issued against him or her under process of a court and has been returned unsatisfied;
(i) he or she consents to present a debtor's petition under this Act and does not, within 7 days from the date on which he or she so consented, present the petition; or
(f) if, at a meeting of any of his or her creditors, he or she admits that he or she is in insolvent circumstances and, having been requested by a resolution of the creditors to bring his or her affairs under the provisions of this Act, he or she does not, within 7 days from the date of the meeting, either:
(ii) he or she consents to sign an authority under section 188 and does not, within 7 days from the date on which he or she so consented, sign such an authority and inform the chair of the meeting, in writing, of the name of the person in whose favour the authority has been signed;
(i) present a debtor's petition; or
(g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:
(ii) sign an authority under section 188 and inform the chair of the meeting, in writing, of the name of the person in whose favour the authority has been signed;
(i) where the notice was served in Australia - within the time fixed for compliance with the notice; or
comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained; (h) if he or she gives notice to any of his or her creditors that he or she has suspended, or that he or she is about to suspend, payment of his or her debts; (ha) if the debtor gives the Official Receiver a debt agreement proposal; (hb) if a debt agreement proposal given by the debtor to the Official Receiver is accepted by the debtor's creditors; (hc) if the debtor breaches a debt agreement; (hd) if a debt agreement to which the debtor was a party (as a debtor) is terminated under section 185P, 185Q or 185QA; (i) if he or she signs an authority under section 188; (j) if a meeting of his or her creditors is called in pursuance of such an authority; (k) if, without sufficient cause, he or she fails to attend a meeting of his or her creditors called in pursuance of such an authority; (l) if, having been required by a special resolution of a meeting of his or her creditors so called to execute a personal insolvency agreement or to present a debtor's petition, he or she fails, without sufficient cause:
(ii) where the notice was served elsewhere - within the time specified by the order giving leave to effect the service;
(i) to comply with the requirements of this Act as to the execution of the agreement by him or her; or
as the case may be; (m) if a personal insolvency agreement executed by him or her under Part X is:
(ii) to present a debtor's petition within the time specified in the resolution;
(i) set aside by the Court; or
(n) if a composition or scheme of arrangement accepted by the debtor's creditors under Division 6 of Part IV is:
(ii) terminated;
(i) set aside by the Court; or
(o) if the debtor becomes insolvent as a result of one or more transfers of property in accordance with:
(ii) terminated;
(i) a financial agreement (within the meaning of the Family Law Act 1975); or
(ii) a Part VIIIAB financial agreement (within the meaning of the Family Law Act 1975); or
(iii) a financial agreement within the meaning of Part 5A of the Family Court Act 1997 (WA) (including a superannuation agreement (within the meaning of Part VIIIC of the Family Law Act 1975) that is included in such a financial agreement);
to which the debtor is a party.
40(2)
In calculating for the purposes of subparagraph (1)(d)(i) the period for which property has been held by the sheriff, any time between the date on which an interpleader summons in respect of the property is taken out and the date on which the proceedings on the summons are finally disposed of, settled or discontinued shall not be taken into account.
40(3)
For the purposes of paragraph (1)(g): (a) where leave is given by a court to enforce an award made on a submission to arbitration, being an award under which money is payable by a debtor to another person:
(i) the award shall be deemed to be a final order obtained by that person against the debtor; and
(b) a judgment or order that is enforceable as, or in the same manner as, a final judgment obtained in an action shall be deemed to be a final judgment so obtained and the proceedings in which, or in consequence of which, the judgment or order was obtained shall be deemed to be the action in which it was obtained; and
(ii) the arbitration proceedings shall be deemed to be the proceeding in which that final order was obtained; and
(c) (Omitted by No 44 of 1996, Sch 1, Pt 1(107).) (d) a person who is for the time being entitled to enforce a final judgment or final order for the payment of money shall be deemed to be a creditor who has obtained a final judgment or final order; and (e) a judgment or order for the payment of money made by the Court in the exercise of jurisdiction conferred on it by this Act shall be deemed to be a judgment or order the execution of which has not been stayed notwithstanding that it may not be enforceable at law by execution; and (f) an order made after the commencement of this paragraph under the Family Law Act 1975 for the payment by a person of arrears of maintenance for another person shall be deemed to be a final order against the first-mentioned person obtained by the other person; and (g) an order made after the commencement of this paragraph under the Family Court Act 1997 (WA) for the payment by a person of arrears of maintenance for another person shall be deemed to be a final order against the first-mentioned person obtained by the other person.
40(4)
The act of bankruptcy specified in paragraph (1)(j) shall be deemed to be committed on the day on which the notices calling the meeting are delivered or sent to the creditors or, if they are not all delivered or sent on the one day, on the day on which the last of the notices is so delivered or sent.
40(5)
The act of bankruptcy specified in paragraph (1)(l) shall be deemed to be committed on the day after the day on which the period within which the agreement is required to be executed by the debtor or the period within which the petition is required to be presented, as the case may be, expires.
40(6)
The act of bankruptcy specified in paragraph (1)(m) shall be deemed to be committed on the day on which the agreement is set aside or terminated, as the case may be.
40(7)
The act of bankruptcy specified in paragraph (1)(n) shall be deemed to be committed on the day on which the composition or scheme of arrangement is set aside or terminated.
40(7A)
For the purposes of paragraph (1)(o): (a) Transfer of property includes a payment of money; and (b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person.
40(8)
This section applies, so far as it is capable of application, in relation to acts and things done or occurring, and omissions and failures to do acts or things occurring, before, or partly before and partly after, the commencement of this Act, as well as to acts and things done or occurring, and omissions and failures to do acts and things occurring, after the commencement of this Act.
SECTION 41 BANKRUPTCY NOTICES 41(1)
An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor:
(a) a final judgment or final order that:
(i) is of the kind described in paragraph 40(1)(g); and
(ii) is for an amount of at least the statutory minimum; or
(b) 2 or more final judgments or final orders that:
(i) are of the kind described in paragraph 40(1)(g); and
(ii) taken together are for an amount of at least the statutory minimum.
41(2)
The notice must be in accordance with the form prescribed by the regulations.
41(2A)
The notice must specify a period for compliance with the notice. That period must be:
(a) if the notice is to be served in Australia - the statutory period after the debtor is served with the notice; or
(b) if the notice is to be served elsewhere - the period specified by the order of the Court giving leave to effect the service.
41(2A)-(2C)
(Omitted by No 44 of 1996, Sch 1, Pt 1(111).)
41(3)
A bankruptcy notice shall not be issued in relation to a debtor:
(a) except on the application of a creditor who has obtained against the debtor a final judgment or final order within the meaning of paragraph 40(1)(g) or a person who, by virtue of paragraph 40(3)(d), is to be deemed to be such a creditor;
(b) if, at the time of the application for the issue of the bankruptcy notice, execution of a judgment or order to which it relates has been stayed; or
(c) in respect of a judgment or order for the payment of money if:
(i) a period of more than 6 years has elapsed since the judgment was given or the order was made; or
(ii) the operation of the judgment or order is suspended under section 37.
41(4)
(Omitted by No 44 of 1996, Sch 1, Pt 1(112).)
41(5)
A bankruptcy notice is not invalidated by reason only that the sum specified in the notice as the amount due to the creditor exceeds the amount in fact due, unless the debtor, within the time fixed for compliance with the notice, gives notice to the creditor that he or she disputes the validity of the notice on the ground of the misstatement.
41(6)
Where the amount specified in a bankruptcy notice exceeds the amount in fact due and the debtor does not give notice to the creditor in accordance with subsection (5), he or she shall be deemed to have complied with the notice if, within the time fixed for compliance with the notice, he or she takes such action as would have constituted compliance with the notice if the amount due had been correctly specified in it.
41(6A)
Where, before the expiration of the time fixed for compliance with a bankruptcy notice:
(a) proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or
(b) an application has been made to the Court to set aside the bankruptcy notice;
the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice.
41(6B)
(Omitted by No 44 of 1996, Sch 1, Pt 1(115).)
41(6C)
Where:
(a) a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and
(b) the Court is of the opinion that the proceedings to set aside the judgment or order:
(i) have not been instituted bona fide; or
(ii) are not being prosecuted with due diligence;
the Court shall not extend the time for compliance with the bankruptcy notice.
41(7)
Where, before the expiration of the time fixed for compliance with a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.
41(8)-(9)
(Omitted by No 44 of 1996, Sch 1, Pt 1(119).)
SECTION 42 PAYMENT ETC. OF DEBT TO COMMONWEALTH OR STATE AFTER SERVICE OF BANKRUPTCY NOTICE 42(1)
Where a bankruptcy notice under this Act is served on a debtor by the Commonwealth or a State, it is a sufficient compliance with the notice if, within the time fixed for compliance with the notice, the debtor pays the amount required to be paid by the notice to, or secures it or compounds it to the satisfaction of:
(a) the Secretary of the Attorney-General's Department, or the Crown Solicitor of the State, as the case may be; or
(b) if an agent of the Commonwealth, or of the State, as the case may be, is specified in the notice for the purpose, the agent so specified.
42(2)
A statement that the debtor may comply with the notice in the manner referred to in subsection (1) may be included in a bankruptcy notice issued on the application of the Commonwealth or a State.
Division 2 - Creditors' petitions SECTION 43 JURISDICTION TO MAKE SEQUESTRATION ORDERS 43(1)
Subject to this Act, where:
(a) a debtor has committed an act of bankruptcy; and
(b) at the time when the act of bankruptcy was committed, the debtor:
(i) was personally present or ordinarily resident in Australia;
(ii) had a dwelling-house or place of business in Australia;
(iii) was carrying on business in Australia, either personally or by means of an agent or manager; or
(iv) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager;
the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor.
43(2)
Upon the making of a sequestration order against the estate of a debtor, the debtor becomes a bankrupt, and continues to be a bankrupt until:
(a) he or she is discharged by force of subsection 149(1); or
(b) his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B.
(c) (Omitted by No 143 of 1992, Sch.)
SECTION 44 CONDITIONS ON WHICH CREDITOR MAY PETITION 44(1)
A creditor's petition shall not be presented against a debtor unless:
(a) there is owing by the debtor to the petitioning creditor a debt that amounts to the statutory minimum or 2 or more debts that amount in the aggregate to the statutory minimum, or, where 2 or more creditors join in the petition, there is owing by the debtor to the several petitioning creditors debts that amount in the aggregate to the statutory minimum;
(b) that debt, or each of those debts, as the case may be:
(i) is a liquidated sum due at law or in equity or partly at law and partly in equity; and
(ii) is payable either immediately or at a certain future time; and
(c) the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition.
44(2)
Subject to subsection (3), a secured creditor shall, for the purposes of paragraph (1)(a), be deemed to be a creditor only to the extent, if any, by which the amount of the debt owing to him or her exceeds the value of his or her security.
44(3)
A secured creditor may present, or join in presenting, a creditor's petition as if he or she were an unsecured creditor if he or she includes in the petition a statement that he or she is willing to surrender his or her security for the benefit of creditors generally in the event of a sequestration order being made against the debtor.
44(4)
Where a petitioning creditor is a secured creditor, he or she shall set out in the petition particulars of his or her security.
44(5)
Where a secured creditor has presented, or joined in presenting, a creditor's petition as if he or she were an unsecured creditor, he or she shall, upon request in writing by the trustee within 3 months after the making of a sequestration order, surrender his or her security to the trustee for the benefit of the creditors generally.
44(6)
A secured creditor to whom subsection (5) applies who fails to surrender his or her security when requested to do so by the trustee in accordance with that subsection is guilty of contempt of court.
SECTION 45 CREDITOR'S PETITION AGAINST PARTNERSHIP 45(1) [Partnership debt]
A creditor of a partnership may present a petition against the partnership if he or she is entitled to present a petition against any one of the members of the partnership in respect of a partnership debt.
45(2) [May be against any member]A creditor who is entitled to present a petition against a partnership may present a petition against any of the members of the partnership without including the others.
SECTION 46 PETITION AGAINST 2 OR MORE JOINT DEBTORS 46(1) [Whether partners or not]A creditor's petition may be presented against 2 or more joint debtors, whether partners or not.
46(2) [Sequestration order against some only]Where there are 2 or more respondents to a creditor's petition, the Court may make a sequestration order against one or more of them and dismiss the petition in so far as it relates to the other or others.
SECTION 47 REQUIREMENTS AS TO CREDITOR'S PETITION 47(1) [Creditor's petition must be verified]A creditor's petition must be verified by an affidavit of a person who knows the relevant facts.
If the rules of court prescribe a form for the purposes of this subsection, the petition must be in the form prescribed.
Except with the leave of the Court, a creditor's petition shall not be withdrawn after presentation.
SECTION 48 48 (REPEALED)(Repealed by No 12 of 1980, s 27.) SECTION 49 49 CHANGE OF PETITIONERS
Where a creditor's petition is not prosecuted with due diligence or where for any other reason the Court considers it proper to do so, the Court may permit to be substituted as petitioner or petitioners another creditor or other creditors to whom the debtor is indebted in the amount required by this Act in the case of a petitioning creditor, and the petition may be proceeded with as if the substituted creditor or creditors had been the petitioning creditor.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 49 of the Act is modified by substituting "deceased debtor's estate" for "debtor".]
At any time after a bankruptcy notice is issued, or a creditor's petition is presented, in relation to a debtor, but before the debtor becomes a bankrupt, the Court may: (a) direct the Official Trustee or a specified registered trustee to take control of the debtor's property; and (b) make any other orders in relation to the property.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 50(1) of the Act is modified by substituting "debtor who dies after presentation of a creditor's petition but before becoming" for "debtor, but before the debtor becomes", "deceased debtor's estate" for "debtor's property" in para (a) and "estate" for "property" in para (b).]
50(1A)
The Court may give a direction or make an order only if: (a) a creditor has applied for the Court to make a direction; and (b) the Court is satisfied that it is in the interests of the creditors to do so; and (c) the debtor has not complied with the bankruptcy notice.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 50(1A) of the Act is modified by substituting "deceased debtor's legal personal representative" for "debtor" in para (c).]
50(1B)
If the Court directs a trustee to take control of the debtor's property, the Court must specify when the control is to end.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 50(1B) of the Act is modified by substituting "deceased debtor's estate" for "debtor's property".]
50(2)
Without limiting the generality of subsection (1), the Court may, at any time after giving a direction under subsection (1), summon the debtor, or an examinable person in relation to the debtor, for examination under this section in relation to the debtor.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 50(2) of the Act is modified by substituting "legal personal representative of the deceased debtor" for "debtor" (first occurring) and inserting "deceased debtor" before "debtor" (second and third occurring).]
50(3)
A summons to a person under subsection (2) shall require the person to attend: (a) at a specified place and at a specified time on a specified day; and (b) before the Court, the Registrar or a magistrate, as specified in the summons;
to be examined on oath under this section about the debtor and the debtor's examinable affairs.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 50(3) of the Act is modified by substituting "deceased debtor and the deceased debtor's" for "debtor and the debtor's".]
50(4)
A summons to a person under subsection (2) may require the person to produce at the examination books (including books of an associated entity of the debtor) that: (a) are in the possession of the first-mentioned person; and (b) relate to the debtor or to any of the debtor's examinable affairs.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 50(4) of the Act is modified by inserting "deceased" before "debtor" (wherever occurring) and inserting "deceased" before "debtor's".]
50(5)
For the purpose of the examination under this section of a person summoned under subsection (2), subsections 81(2) to (17), inclusive, apply, with any modifications prescribed by the regulations, as if: (a) a sequestration order had been made against the debtor when the Court gave the direction under subsection (1) of this section; (b) the examination were being held under section 81; and (c) a reference in those subsections to a creditor were a reference to a person who has a debt that would be provable in the debtor's bankruptcy if a sequestration order had been made as mentioned in paragraph (a) of this subsection.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 50(5) of the Act is modified by substituting "an order had been made for the administration of the estate of the deceased debtor" for "a sequestration order had been made against the debtor" in para (a) and substituting "administration of the deceased debtor's estate if an" for "debtor's bankruptcy if a sequestration" in para (c).]
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 50 of the Act is modified by inserting subsection (6):
]
50(6)
In this section:legal personal representative
, in relation to a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
SECTION 51 51 COSTS OF PROSECUTING CREDITOR'S PETITION
Subject to section 109, the prosecution of a creditor's petition to and including the making of a sequestration order on the petition shall be at the expense of the creditor. SECTION 52 PROCEEDINGS AND ORDER ON CREDITOR'S PETITION 52(1) [Proof required]
At the hearing of a creditor's petition, the Court shall require proof of:
(a) the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);
(b) service of the petition; and
(c) the fact that the debt or debts on which the petitioning creditor relies is or are still owing;
and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.
If the Court makes a sequestration order, the creditor who obtained the order must give a copy of it to the Official Receiver before the end of the period of 2 days beginning on the day the order was made.
Penalty: 5 penalty units.
Note:
See also section 277B (about infringement notices).
Subsection (1A) is an offence of strict liability.
Note:
For strict liability, see section 6.1 of the Criminal Code.
If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:
(a) that he or she is able to pay his or her debts; or
(b) that for other sufficient cause a sequestration order ought not to be made;
it may dismiss the petition.
52(3) [Stay of proceedings]The Court may, if it thinks fit, upon such terms and conditions as it thinks proper, stay all proceedings under a sequestration order for a period not exceeding 21 days.
52(4) [Lapse]A creditor's petition lapses at the expiration of:
(a) subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or
(b) if the Court makes an order under subsection (5) in relation to the petition - the period fixed by the order;
unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn.
The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order.
Where 2 or more members of a partnership or 2 or more joint debtors have become bankrupts, the Court may consolidate the proceedings upon such terms as it thinks fit.
53(2)
Where the Court makes an order under subsection (1), section 110 applies in the administration under this Act of all of the estates to which the order relates.
53(3)
Where the Court makes an order under subsection (1) in relation to the estates of 2 or more bankrupts, the Court may, in the order:
(a) declare a specified date to be, for the purpose of the application of the provisions of Division 3 of Part VI in the administration of the joint estate, the date on which all the petitions relevant to the administration of those estates shall be deemed to have been presented;
(b) declare a specified date to be, for that purpose, the date of the bankruptcy in respect of each of those estates; and
(c) declare a specified time to be, for that purpose, the time that is the commencement of the bankruptcy in respect of all those estates;
and, if the Court does so, those estates shall be administered accordingly.
SECTION 54 BANKRUPT'S STATEMENT OF AFFAIRS 54(1)
Where a sequestration order is made, the person against whose estate it is made shall, within 14 days from the day on which he or she is notified of the bankruptcy: (a) make out and file with the Official Receiver a statement of his or her affairs; and (b) furnish a copy of the statement to the trustee.
Penalty: 50 penalty units.
54(2)
Where a sequestration order is made against 2 or more joint debtors (whether partners or not), each of those persons shall (in addition to complying with subsection (1) in relation to his or her affairs), within 14 days from the day on which he or she is notified of the bankruptcy, and either on his or her own account or jointly with another or others of those debtors: (a) make out and file in the office of the Official Receiver a statement of the joint affairs of those persons; and (b) furnish a copy of the statement to the trustee.
Penalty: 50 penalty units.
54(2A)
If the Official Receiver accepts under subsection 57B(1) an updated statement of affairs filed in accordance with a notice under subsection 57B(3) for the purposes of paragraph (1)(a) or (2)(a) of this section, the bankrupt must give a copy of the statement to the trustee within 14 days from the day the bankrupt receives notice of the acceptance.
Penalty: 50 penalty units.
54(3)
Subsections (1), (2) and (2A) are offences of strict liability.
Note:
For strict liability , see section 6.1 of the Criminal Code.
54(3A)
(Omitted by No 44 of 1996, Sch 1, Pt 1(130).)
54(4)
A person who states in writing that he or she is a creditor of a bankrupt against whom a sequestration order has been made, or a creditor of 2 or more bankrupts against whom the one sequestration order has been made, may without fee, and any other person may on payment of the fee determined by the Minister by legislative instrument, inspect, personally or by an agent, the statement of affairs filed by the bankrupt or the statement of affairs filed by the bankrupts, as the case may be, and may obtain a copy of, or take extracts from, the statement or statements.
54(5)
A bankrupt against whom a sequestration order has been made may, without fee and either personally or by an agent:
(a) inspect the bankrupt's statement of affairs; or
(b) obtain a copy of, or take extracts from, the bankrupt's statement of affairs.
54(6)
If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than the bankrupt or an agent of the bankrupt).
54(6A)
Subsection (6) does not prevent the making available of information as required by law.
54(7)
The Official Receiver may refuse to allow a person access under this section to particular information in a bankrupt's statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
Division 2A - Declaration of intention to present debtor's petition
Subject to section 54B, a debtor may present to the Official Receiver a declaration, in the approved form, of the debtor's intention to present a debtor's petition.
A declaration presented by a debtor under this section must be accompanied by a statement of the debtor's affairs and a copy of that statement.
A debtor is not entitled to present a declaration under section 54A:
(a) when the debtor is not entitled, except with the leave of the Court, to present a petition under section 55;
(b) after a creditor's petition presented against the debtor is served on the debtor and before:
(i) a sequestration order is made on the petition;
(ii) the petition is withdrawn or dismissed; or
(iii) the petition lapses under subsection 52(4);
(c) after a debtor's petition is presented against the debtor and before the petition is accepted or rejected;
(d) while the debtor's property is subject to control under Division 2 of Part X;
(e) within 6 months after the debtor signs an authority under section 188; or
(f) within 12 months after a declaration presented by the debtor under section 54A is accepted under section 54C.
Subject to section 54D, where a debtor presents a declaration under section 54A, the Official Receiver shall:
(a) if it appears to the Official Receiver that the debtor is entitled to present a declaration under section 54A and that the declaration presented is in accordance with the approved form:
(i) accept the declaration and endorse it accordingly; and
(ii) forthwith sign a copy of the declaration; or
(b) in any other case - reject the declaration.
If the Official Receiver accepts the declaration, the Official Receiver must give written notice of the acceptance of the declaration to each of the creditors disclosed in the debtor's statement of affairs.
Before accepting a declaration presented by a debtor under section 54A, the Official Receiver must give the debtor the information prescribed by the regulations.
A contravention of subsection (1) does not affect the validity of the Official Receiver's acceptance under section 54C of a declaration presented under section 54A.
Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to a creditor to whom the debtor owes a frozen debt, subsection (2) has effect throughout the remainder of that period.
It is not competent for the creditor:
(a) to apply for the issue of enforcement process in respect of the debt; or
(b) to enforce a remedy against the debtor's person or property in respect of the debt.
Nothing in this section prevents a creditor from commencing a legal proceeding in respect of a debt, or from taking a fresh step in such a proceeding otherwise than in connection with enforcing a judgment.
Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to a sheriff, subsections (2) and (3) have effect throughout the remainder of that period.
The sheriff shall refrain from taking action, or further action, to execute, or to sell property under, enforcement process issued in respect of a frozen debt owed by the debtor.
The sheriff shall refrain from paying to a person proceeds of enforcement process issued in respect of a frozen debt owed by the debtor.
A contravention of this section does not affect a person's title to property that was purchased in good faith under a sale under enforcement process issued in respect of a debt.
(a) under this section, a sheriff refrains from taking action, or further action, to sell real property under enforcement process issued in respect of a debt;
(b) the debtor becomes a bankrupt; and
(c) the property vests in the trustee of the bankrupt's estate;
the costs of executing the enforcement process are a first charge on the property.
Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to the registrar or other appropriate officer of a court, the registrar or other officer shall, throughout the remainder of that period, refrain from paying to a person proceeds of enforcement process issued in respect of a frozen debt owed by the debtor.
Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to a person who is entitled under a law of the Commonwealth, of a State or of a Territory: (a) to retain or deduct money from money payable or owing, or to become payable or owing, to the debtor; and (b) to apply the retained or deducted money toward discharging a frozen debt owed by the debtor to any person;
subsections (2) and (3) apply.
54H(2)
The person shall, throughout the remainder of that period: (a) refrain from so retaining or deducting money; and (b) refrain from paying to a person (other than the debtor), or otherwise applying, money that was so retained or deducted before the signed copy was produced to the person.
54H(3)
Nothing in this section affects a person's liability to pay money to the debtor.
54H(4)
(Omitted by No 44 of 1996, Sch 1, Pt 1(143).)
SECTION 54J 54J EXTENSION OF TIME WHERE THIS DIVISION PREVENTS THE DOING OF AN ACT
Where, throughout a particular period, this Division prevents the doing of a particular act, that period shall be disregarded in determining, for the purposes of any law, agreement or instrument, whether or not that act has been done within a particular period or before a particular time.
Nothing in section 33 permits the extension or abridgment of a period or time limited by this Division.
Nothing in this Division affects the right of a secured creditor to realise or otherwise deal with the creditor's security.
Subject to this section, a debtor may present to the Official Receiver a petition against himself or herself.
55(2)
A petition presented by a debtor under this section: (a) shall be in accordance with the approved form; and (b) shall be accompanied by a statement of the debtor's affairs and a copy of that statement.
55(2A)
The Official Receiver must reject a debtor's petition unless, at the time when the petition is presented, the debtor: (a) was personally present or ordinarily resident in Australia; or (b) had a dwelling-house or place of business in Australia; or (c) was carrying on business in Australia, either personally or by means of an agent or manager; or (d) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.
55(3)
The Official Receiver may reject a debtor's petition if: (a) the petition does not comply substantially with the approved form; or (b) the petition is not accompanied by a statement of affairs; or (c) both:
(i) the Official Receiver has given the debtor notice under subsection 57B(3) that the Official Receiver has refused to accept a statement of affairs filed for the purposes of paragraph (2)(b) of this section; and
(ii) an updated statement of affairs has not been filed for the purposes of that paragraph within the period specified in the notice.
55(3AA)
The Official Receiver may reject a debtor's petition (the current petition ) if: (aa) the Official Receiver has accepted under subsection 57B(1) a statement of affairs filed by the debtor for the purposes of paragraph (2)(b) of this section; and (a) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that, if the debtor did not become a bankrupt, the debtor would be likely (either immediately or within a reasonable time) to be able to pay all the debts specified in the statement of affairs; and (b) at least one of the following applies:
(i) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that the debtor is unwilling to pay one or more debts to a particular creditor or creditors, or is unwilling to pay creditors in general;
(ii) before the current petition was presented, the debtor previously became a bankrupt on a debtor's petition at least 3 times, or at least once in the period of 5 years before presentation of the current petition.
55(3AB)
The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA).
55(3AC)
The debtor may apply to the Administrative Review Tribunal for the review of a decision by the Official Receiver to reject a petition under subsection (3AA).
55(3A)
Before accepting a debtor's petition the Official Receiver must give the debtor the information prescribed by the regulations.
55(3B)
The Official Receiver must refer a debtor's petition to the Court for a direction to accept or reject it if there is a creditor's petition pending against a group of debtors (whether they are joint debtors or members of a partnership) that includes the debtor against whom the debtor's petition is presented.
Example 1: When Anna presents a debtor's petition against herself, there is a creditor's petition pending against Anna and Tim as joint debtors. The Official Receiver must refer the debtor's petition to the Court.
Example 2: When Peter presents a debtor's petition against himself, there are 2 creditor's petitions pending against him alone. The Official Receiver is not required to refer the debtor's petition to the Court, because Peter does not form a group by himself.
55(3C)
If the Court directs the Official Receiver to accept the debtor's petition, the Court must specify the time of the commencement of the bankruptcy that results from acceptance of the debtor's petition.
55(4)
The Official Receiver must accept a debtor's petition, unless the Official Receiver rejects it under this section or is directed by the Court to reject it.
55(4A)
Where the Official Receiver accepts a petition presented under this section: (a) he or she shall endorse the petition accordingly; and (b) upon the Official Receiver endorsing the petition, the debtor who presented the petition becomes a bankrupt by force of this section and by virtue of presentation of the petition.
55(5)
If a registered trustee is the trustee of the estate of a debtor who becomes a bankrupt under this section, the Official Receiver must: (a) notify the trustee of the bankruptcy; and (b) give the trustee a copy of the statement of affairs that accompanied the debtor's petition.
55(5A)
A debtor who is a party (as debtor) to a debt agreement must not present a debtor's petition unless the Court gives the debtor permission to do so.
55(6)
A debtor who has executed a personal insolvency agreement is not, except with the leave of the Court, entitled to present a petition against himself or herself unless: (a) the agreement has been set aside; or (b) the agreement has been terminated; or (c) all the obligations that the agreement created have been discharged.
55(6A)
A debtor in relation to whom a stay under a proclaimed law applies is not, except with the leave of the Court, entitled to present a petition against himself or herself.
55(7)
Where a petition is presented by a debtor against himself or herself in contravention of subsection (5A), (6) or (6A), the debtor does not become a bankrupt by virtue of its presentation.
55(8)
A person who becomes a bankrupt by force of this section continues to be a bankrupt until: (a) he or she is discharged by force of subsection 149(1); or (b) his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B. (c) (Omitted by No 143 of 1992, Sch.)
55(9)
A person who states in writing that he or she is a creditor of a bankrupt who has become a bankrupt by force of this section may without fee, and any other person may on payment of the fee determined by the Minister by legislative instrument, inspect, personally or by an agent, the statement of affairs that accompanied the petition presented by the bankrupt, and may obtain a copy of, or take extracts from, the statement.
55(10)
A bankrupt who has become a bankrupt by force of this section may, without fee and either personally or by an agent: (a) inspect the bankrupt's statement of affairs; and (b) obtain a copy of, or make extracts from, the bankrupt's statement of affairs.
55(11)
If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person other than the bankrupt (or an agent of the bankrupt).
55(11A)
Subsection (11) does not prevent the making available of information as required by law.
55(12)
The Official Receiver may refuse to allow a person access under this section to particular information in a bankrupt's statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
SECTION 56 56 (OMITTED)
(Omitted by No 44 of 1996, Sch 1, Pt 1(151).) SECTION 56A PERSONS WHO MAY PRESENT A DEBTOR'S PETITION AGAINST A PARTNERSHIP 56A(1) [Who may present petition]
A debtor's petition against a partnership may be presented by:
(a) all the partners; or
(b) a majority of the partners who are resident in Australia. 56A(2) [Member of a partnership who is debtor]
A member of a partnership who is a party (as debtor) to a debt agreement must not join in presenting a debtor's petition against the partnership unless the Court gives the member permission to do so.
56A(3) [Personal insolvency agreement]A member of a partnership who has executed a personal insolvency agreement must not join in presenting a petition against the partnership unless:
(a) the agreement has been set aside; or
(b) the agreement has been terminated; or
(c) all the obligations that the agreement created have been discharged; or
(d) the Court gives permission for the member to join in presenting a petition against the partnership.
(Repealed by No 80 of 2004)
56A(5)
(Repealed by No 80 of 2004)
56A(6) [Stay under a proclaimed law]
A member of a partnership in relation to whom a stay under a proclaimed law applies must not join in presenting a petition against the partnership unless the Court gives the member permission to do so.
56A(7) [Contravention]If a member of a partnership contravenes subsection (2), (3), (4), (5) or (6) by joining in the presentation of a petition, the petition does not have any effect.
Any debtor's petition against a partnership must be presented to the Official Receiver.
56B(2)
A petition must be in accordance with the approved form.
56B(3)
A petition must be accompanied by: (a) a statement of affairs of each member of the partnership by whom the petition is presented; and (b) a statement of the partnership affairs; and (c) a copy of each of those statements.
56B(4)
The Official Receiver may reject a petition if: (a) the petition does not comply substantially with the approved form; or (b) the petition is not accompanied by the statements of affairs of each petitioning partner and of the partnership; or (c) both:
(i) the Official Receiver has given notice under subsection 57B(3) that the Official Receiver has refused to accept a statement of affairs filed for the purposes of paragraph (3)(a) or (b) of this section; and
(ii) an updated statement of affairs has not been filed for the purposes of whichever of those paragraphs is applicable within the period specified in the notice.
56B(5)
Before accepting a debtor's petition against a partnership, the Official Receiver must give the information prescribed by the regulations to each member of the partnership who joined in presenting the petition.
The Official Receiver must refer a debtor's petition against a partnership to the Court for a direction to accept or reject the petition if either or both of the following conditions are met:
(a) the petition was presented against the partnership by some, but not all, members of the partnership;
(b) there is at least one creditor's petition pending against at least one of the members of the partnership (not counting a creditor'spetition against all the members of the partnership and no-one else).
Example 1: Edith, Lindsay and Bertha are the members of a partnership. When Edith and Lindsay present a debtor's petition against the partnership there is a creditor's petition pending against Bertha. The Official Receiver must refer the debtor's petition to the Court.
Example 2: Keith, Leigh and Judith are the members of a partnership. When they all present a debtor's petition against the partnership, there are 2 creditor's petitions pending: one against Keith, Leigh and Judith, the other against Judith alone. The Official Receiver must refer the debtor's petition to the Court.
56C(2) [Petition not presented by all members of partnership]Example 3: Meredith, Ramsay and Wilson are the members of a partnership. When they all present a debtor's petition against the partnership, there are 2 creditor's petitions pending. Both of the creditor's petitions are against Meredith, Ramsay and Wilson (and no-one else). There is no requirement for the Official Receiver to refer the debtor's petition to the Court.
If the Official Receiver refers a petition to the Court because the petition was presented by some, but not all, of the members of the partnership, the Official Receiver must give notice in accordance with the regulations to the members who did not present the petition.
56C(3) [Court must direct Official Receiver]After a petition has been referred to the Court, the Court must direct the Official Receiver:
(a) to accept the petition in the form in which it was referred to the Court; or
(b) to accept the petition after amending it as directed by the Court; or
(c) to reject the petition. 56C(4) [Stay under proclaimed law]
(a) a debtor's petition is presented against a partnership that includes a person to whom a stay applies under a proclaimed law; and
(b) the person is not one of the petitioning partners;
the Court must not give a direction in relation to the petition until the person administering the proclaimed law has had an opportunity to be heard.
56C(5) [Court must specify time of bankruptcy]If the Court directs the Official Receiver to accept (either with or without amendments) a petition referred to the Court, the Court must specify the time of the commencement of the bankruptcy of each of the persons who becomes a bankrupt as a result of the acceptance of the petition.
The Official Receiver must accept a debtor's petition against a partnership unless the Official Receiver rejects it under section 56B or is directed by the Court to reject the petition.
56D(2) [Note acceptance]When the Official Receiver accepts the petition, the Official Receiver must note on it the fact that it has been accepted.
When the Official Receiver notes the fact of acceptance on a petition that has not been amended under a direction of the Court, each member of the partnership becomes a bankrupt by force of this section.
56E(2)
When the Official Receiver notes the fact of acceptance on a petition that has been amended under a direction of the Court, each member of the partnership to whom the petition applies becomes a bankrupt by force of this section.
56E(3)
A person who becomes a bankrupt by force of this section continues to be a bankrupt until:
(a) he or she is discharged by force of subsection 149(1); or
(b) his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B.
56E(4)
If a registered trustee is the trustee of the estate of a person who becomes a bankrupt under this section, the Official Receiver must:
(a) notify the trustee of the bankruptcy; and
(b) give the trustee a copy of each statement of affairs that accompanied the debtor's petition.
A member of a partnership who did not join in presenting a debtor's petition against the partnership but became a bankrupt as a result of the acceptance of the petition must give the Official Receiver: (a) a statement of the member's affairs; and (b) a statement of the affairs of the partnership;
within 14 days after the day that the member was notified of his or her bankruptcy.
Penalty: 50 penalty units.
56F(1A)
Subsection (1) is an offence of strict liability.
Note:
For strict liability , see section 6.1 of the Criminal Code.
56F(1B)
It is an exception to an offence against subsection (1) if the member has a reasonable excuse.
Note:
A defendant bears an evidential burden in relation to the matter in subsection (1B) (see subsection 13.3(3) of the Criminal Code).
56F(2)
A member of a partnership complies with paragraph (1)(b) if the member and at least one other member of the partnership who did not join in presenting the petition against the partnership jointly give the Official Receiver a statement of the affairs of the partnership.
56F(3)
A member of a partnership who must give statements of affairs to the Official Receiver under subsection (1) must give copies of the statements to the trustee in the member's bankruptcy.
SECTION 56G INSPECTION OF STATEMENTS OF AFFAIRS OF PARTNERS AND PARTNERSHIPS 56G(1) [Inspection of statements given to Official Receiver]
A person may inspect, obtain a copy of, or take extracts from, any statement of affairs that was given to the Official Receiver in connection with a debtor's petition against a partnership.
Before inspecting, obtaining a copy of or taking extracts from a statement, the person must pay the fee determined by the Minister by legislative instrument, unless:
(a) the person states in writing that he or she is a creditor of the partnership or of a member of the partnership who became a bankrupt as a result of the petition; or
(aa) the person is a member of the partnership who became a bankrupt as a result of the petition; or
(b) the person is an agent of a person described in paragraph (a) or (aa).
A person who has become a bankrupt by force of section 56E may, without fee and either personally or by an agent:
(a) inspect any statement of affairs that accompanied the petition; and
(b) obtain a copy of, or make extracts from, any statement of affairs that accompanied the petition.
If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than a member of the partnership who became a bankrupt as a result of the petition or an agent of such a member).
The Official Receiver may refuse to allow a person access under this section to particular information in a statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
Where joint debtors are not in partnership with one another, the debtors, or any 2 or more of the debtors, may present to the Official Receiver a petition jointly against themselves.
57(2)
A petition under this section shall be in accordance with the approved form and shall be accompanied by: (a) a statement of affairs of each of the petitioning debtors; (b) a statement of their joint affairs; and (c) a copy of each of those statements.
57(2A)
The Official Receiver must reject a debtor's petition unless, at the time when the petition is presented, each petitioning debtor: (a) was personally present or ordinarily resident in Australia; or (b) had a dwelling-house or place of business in Australia; or (c) was carrying on business in Australia, either personally or by means of an agent or manager; or (d) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.
57(3)
The Official Receiver may reject a debtor's petition if: (a) the petition does not comply substantially with the approved form; or (b) the petition is not accompanied by all the statements of affairs required by subsection (2); or (c) both:
(i) the Official Receiver has given notice under subsection 57B(3) that the Official Receiver has refused to accept a statement of affairs filed for the purposes of paragraph (2)(a) or (b) of this section; and
(ii) an updated statement of affairs has not been filed for the purposes of whichever of those paragraphs is applicable within the period specified in the notice.
57(3AA)
The Official Receiver may reject a debtor's petition (the current petition ) if the following conditions are satisfied for at least one of the petitioning debtors: (a) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that, if the debtor did not become a bankrupt, the debtor would be likely (either immediately or within a reasonable time) to be able to pay all the debts specified in the debtor's statement of affairs; (b) at least one of the following applies:
(i) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that the debtor is unwilling to pay one or more debts to a particular creditor or creditors, or is unwilling to pay creditors in general;
(ii) before the current petition was presented, the debtor previously became a bankrupt on a debtor's petition at least 3 times, or at least once in the period of 5 years before presentation of the current petition.
57(3AB)
The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA).
57(3AC)
An application may be made to the Administrative Review Tribunal for the review of a decision by the Official Receiver to reject a petition under subsection (3AA).
57(3A)
Before accepting a debtor's petition against joint debtors, the Official Receiver must give each petitioning debtor the information prescribed by the regulations.
57(3B)
The Official Receiver must refer a debtor's petition to the Court for a direction to accept or reject it if there is at least one creditor's petition that: (a) is pending against at least one of the debtors (whether or not the creditor's petition also relates to other persons); and (b) does not relate only to all the joint debtors who presented the debtor's petition.
Example 1: Peta and Abdul are joint debtors. When they present a debtor's petition against themselves, there is a creditor's petition pending against Abdul. The Official Receiver must refer the debtor's petition to the Court, because the creditor's petition does not relate to both Peta and Abdul.
Example 2: Joan and Craig are joint debtors. When they present a debtor's petition against themselves, there is a creditor's petition pending against Joan, Craig and Paul. The Official Receiver must refer the debtor's petition to the Court.
Example 3: Kim, Robin and Jane are joint debtors. When they present a debtor's petition against themselves, there is a creditor's petition pending against Kim, Robin and Jane, and no-one else. The Official Receiver is not required to refer the debtor's petition to the Court.
57(3C)
If the Court directs the Official Receiver to accept the debtor's petition, the Court must specify the time of the commencement of each bankruptcy that results from acceptance of the debtor's petition.
57(4)
The Official Receiver must accept a debtor's petition, unless the Official Receiver rejects it under subsection (3) or is directed by the Court to reject it.
57(5)
Where the Official Receiver accepts a petition presented under this section: (a) he or she shall endorse the petition accordingly; and (b) upon the Official Receiver endorsing the petition, each of the petitioning debtors becomes a bankrupt by force of this section and by virtue of presentation of the petition.
57(5A)
(Omitted by No 21 of 1985, s 19.)
57(6)
If a registered trustee is the trustee of the estate of a person who becomes a bankrupt under this section, the Official Receiver must:
(a) notify the trustee of the bankruptcy; and
(b) give the trustee a copy of each statement of affairs that accompanied the debtor's petition.
57(6A)
A debtor who is a party (as debtor) to a debt agreement must not present a debtor's petition unless the Court gives the debtor permission to do so.
57(7)
A debtor who has executed a personal insolvency agreement is not entitled to join in presenting a petition under this section unless: (a) the agreement has been set aside; or (b) the agreement has been terminated; or (c) all the obligations that the agreement created have been discharged; or (d) the Court grants leave for the debtor to join in presenting a petition under this section.
57(8)
A debtor in relation to whom a stay under a proclaimed law applies is not, except with the leave of the Court, entitled to join in presenting a petition under this section.
57(9)
Where a petition is presented in contravention of subsection (6A), (7) or (8), the presentation of the petition does not have any effect.
57(10)
A person who becomes a bankrupt by force of this section continues to be a bankrupt until: (a) he or she is discharged by force of subsection 149(1); or (b) his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B.
(c) (Omitted by No 143 of 1992, Sch.)
S 57(10) amended by No 11 of 2016, s 3 and Sch 1 item 23, by substituting "74(1)" for "74(5)", applicable in relation to the administration of regulated debtors' estates on and after 1 September 2017.
S 57(10) amended by No 131 of 2002, s 3 and Sch 1 items 43 and 206, by omitting "or in accordance with Division 3 of Part VII" after "subsection 149(1)", applicable to bankruptcies for which the date of the bankruptcy is after 5 May 2003.
S 57(10) inserted by No 12 of 1980, s 33; amended by No 143 of 1992, Sch.
57(11)
A person who states in writing that he or she is a creditor of a bankrupt who has become a bankrupt by virtue of the presentation of a debtor's petition against joint debtors, or a creditor of joint debtors some or all of whom have become bankrupts by force of this section, may without fee, and any other person may on payment of the fee determined by the Minister by legislative instrument, inspect, personally or by an agent, any statement of affairs that accompanied the petition presented by the joint debtors, and may obtain a copy of, or take extracts from, any such statement of affairs.
57(12)
A bankrupt who has become a bankrupt by force of this section may, without fee and either personally or by an agent: (a) inspect any statement of affairs that accompanied the petition; and (b) obtain a copy of, or make extracts from, any statement of affairs that accompanied the petition.
57(13)
If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than a petitioning debtor or an agent of a petitioning debtor).
57(14)
The Official Receiver may refuse to allow a person access under this section to particular information in a statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
SECTION 57A 57A TIME AT WHICH PERSON BECOMES BANKRUPT ON DEBTOR'S PETITION
Where, after the commencement of this section, a person becomes a bankrupt by virtue of the presentation of a debtor's petition, the person shall, for the purposes of this Act, be deemed to become a bankrupt at the first instant of the day on which the petition is accepted by the Official Receiver.
The Official Receiver must either accept, or refuse to accept, a statement of affairs that is filed for the purposes of any of the following provisions (including an updated statement of affairs filed within the period specified for the purposes of paragraph (4)(c) in a notice under subsection (3)) within 14 days from the day the statement of affairs is filed: (a) subsection 54(1) or (2); (b) paragraph 55(2)(b); (c) paragraph 56B(3)(a) or (b); (d) paragraph 56F(1)(a) or (b); (e) paragraph 57(2)(a) or (b).
Note:
Subsections (6) and (7) provide certain exceptions to this rule.
57B(2)
The Official Receiver must accept the statement of affairs, unless the Official Receiver thinks that the statement of affairs is inadequate.
Note:
The Court may review an act done by the Official Receiver (see subsection 15(5) and section 303).
57B(3)
The Official Receiver must give written notice of the decision under subsection (1) to: (a) for a statement of affairs filed for the purposes of subsection 54(1) or paragraph 55(2)(b), 56B(3)(a), 56F(1)(a) or 57(2)(a) - the person whose affairs the statement relates to; or (b) for a statement of affairs filed for the purposes of subsection 54(2) - each of the joint debtors; or (c) for a statement of affairs filed for the purposes of paragraph 56B(3)(b) - each of the petitioning members of the partnership; or (d) for a statement of affairs filed for the purposes of paragraph 56F(1)(b) - the member, or each of the members, of the partnership who gave the statement of affairs; or (e) for a statement of affairs filed for the purposes of paragraph 57(2)(b) - each of the petitioning debtors.
57B(4)
If the Official Receiver refuses to accept the statement of affairs, the notice must: (a) specify the respects in which the Official Receiver thinks the statement of affairs is inadequate; and (b) invite the person or persons to file an updated statement of affairs with the Official Receiver; and (c) specify a period within which the updated statement may be filed, which must be at least 14 days from the day the notice is given.
Note:
For variation of the notice (for example, to extend the period specified in the notice within which the updated statement may be filed), see subsection 33(3) of the Acts Interpretation Act 1901.
57B(5)
An updated statement of affairs filed within the period specified for the purposes of paragraph (4)(c) in a notice under subsection (3) is taken for all purposes: (a) to have been filed for the purposes of the provision referred to in paragraph (1)(a), (b), (c), (d) or (e); and (b) to replace the statement of affairs that the Official Receiver refused to accept.
57B(6)
This section does not apply to a statement of affairs filed in connection with a debtor's petition if: (a) subsection 55(3B) or 57(3B) applies in relation to the debtor's petition; or (b) subsection 56C(1) applies in relation to the debtor's petition and the statement of affairs is not required to be filed under paragraph 56F(1)(a).
57B(7)
This section (other than subsection (8)) ceases to apply to a statement of affairs filed in connection with a debtor's petition if the Official Receiver rejects the debtor's petition.
57B(8)
Without limiting paragraph 12(1)(d), a report under that paragraph for a financial year must include the number of statements of affairs (including updated statements of affairs) filed with the Official Receiver during the financial year for which there is a failure to comply with subsection (1) of this section.
57B(9)
In this section:
filed
includes presented, lodged or given.
Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
Note 1:
This subsection has a limited application if there are orders in force under the proceeds of crime law: see section 58A.
Note 2:
Even if property has vested under this section, it may, under the Proceeds of Crime Act 2002:
58(2)
Where a law of the Commonwealth or of a State or Territory requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with.
58(3)
Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor: (a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.
58(4)
After a debtor has become a bankrupt, distress for rent shall not be levied or proceeded with against the property of the bankrupt, whether or not the bankrupt is a tenant of the landlord by whom the distress is sought to be levied.
58(5)
Nothing in this section affects the right of a secured creditor to realize or otherwise deal with his or her security.
58(5A)
Nothing in this section shall be taken to prevent a creditor from enforcing any remedy against a bankrupt, or against any property of a bankrupt that is not vested in the trustee of the bankrupt, in respect of any liability of the bankrupt under: (a) a maintenance agreement; or (b) a maintenance order;
whether entered into or made, as the case may be, before or after the commencement of this subsection.
58(6)
In this section, after-acquired property , in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt.
SECTION 58A VESTING OF PROPERTY UPON BANKRUPTCY - EFFECT OF ORDERS IN FORCE UNDER THE PROCEEDS OF CRIME LAW 58A(1) If a restraining order or forfeiture order is in force.
If property of a bankrupt is covered by a restraining order, or a forfeiture order, made before the date of the bankruptcy, subsection 58(1) does not apply to property that is covered by the order while that property is so covered.
58A(2) If a pecuniary penalty order is in force.If a pecuniary penalty order is made against a bankrupt before the date of the bankruptcy, subsection 58(1) does not apply to any of the property of the bankrupt while the order is in force.
Note:
For proceeds of crime orders made on or after the date of the bankruptcy, and applications for proceeds of crime orders, see sections 114A to 114C.
58A(3) Notifying the trustee of grounds for subsection 58(1) to apply to property.If circumstances arise as a result of which this section no longer prevents subsection 58(1) applying to property of the bankrupt, the Director of Public Prosecutions (or the Commissioner of the Australian Federal Police, if the Commissioner is the Commonwealth proceeds of crime authority that is the responsible authority for the order under the Proceeds of Crime Act 2002) must, as soon as practicable, give the trustee written notice of the existence of the circumstances.
Where a person who is a bankrupt again becomes a bankrupt: (a) the property of the bankrupt:
(i) that was acquired by, or devolved on, the bankrupt on or after the date of the earlier bankruptcy; and
shall (subject to any disposition of that property made by the trustee in the earlier bankruptcy without knowledge of the presentation of the petition on, or by virtue of the presentation of which, the person became bankrupt on the later occasion and subject also to section 126) vest forthwith in the trustee in the later bankruptcy; (b) property:
(ii) that had not been distributed amongst the creditors in the earlier bankruptcy before the date on which the person became a bankrupt on the later occasion;
(i) that is acquired by, or devolves on, the bankrupt on or after the date of the later bankruptcy; and
vests in the trustee in the later bankruptcy as soon as it is acquired by, or devolves on, the bankrupt; (c) the trustee in the earlier bankruptcy:
(ii) that is divisible amongst the creditors in the later bankruptcy;
(i) shall be deemed to be a creditor in the later bankruptcy in respect of any unsatisfied balance of his or her expenses or remuneration in the earlier bankruptcy, the liabilities incurred by him or her in administering the estate in the earlier bankruptcy and the debts proved in the earlier bankruptcy (whether or not those debts are entitled to priority, or are postponed, in the earlier bankruptcy);
(ii) shall rank equally with the ordinary unsecured creditors in the later bankruptcy; and
(d) a charge or charging order that, by virtue of subsection 118(9), is void as against the trustee in the earlier bankruptcy continues to be void as against that trustee; and (e) a transaction that, by virtue of section 120, 121, 122, 128B or 128C, is void as against the trustee in the earlier bankruptcy continues to be void as against that trustee.
(iii) may, where he or she has lodged a proof of debt in the later bankruptcy, amend that proof of debt, without the consent of the trustee in the later bankruptcy, for the purpose of adding:
(A) his or her expenses in the earlier bankruptcy that have, or his or her remuneration in the earlier bankruptcy that has, accrued after the proof of debt was lodged;
(B) liabilities incurred by him or her in administering the estate in the earlier bankruptcy after the proof of debt was lodged; oror, with the consent of the trustee in the later bankruptcy, for any other purpose;
(C) debts proved in the earlier bankruptcy after the proof of debt was lodged;
(f) (Omitted by No 143 of 1992, Sch.)
59(2)
Where the trustee of the estate of a bankrupt receives notice of the presentation of a creditor's petition against the bankrupt, the trustee shall hold the after-acquired property of the bankrupt that is then in the possession of the trustee, or the proceeds thereof, until the petition has been dealt with by the Court or has lapsed.
59(3)
Where the trustee of the estate of a bankrupt receives notice that a debtor's petition against the bankrupt has been referred to the Court, the trustee shall hold the after-acquired property of the bankrupt that is then in the possession of the trustee, or the proceeds thereof, until the Court has dealt with the petition.
59(4)
Where the trustee of the estate of a bankrupt is holding after-acquired property of the bankrupt, or the proceeds of any such property, in pursuance of subsection (2) or (3) and the bankrupt again becomes a bankrupt, the trustee shall: (a) in a case where the trustee is also the trustee in the later bankruptcy - hold all such property, and the proceeds of such property, as the trustee in the later bankruptcy; or (b) in any other case - deliver all such property, and pay the proceeds of such property, to the trustee in the later bankruptcy.
59(5)
Where a law of the Commonwealth or of a State or Territory requires the transmission of property to be registered, and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of subsection (1), does not vest in the trustee at law until the requirements of that law have been complied with.
59(6)
In subsections (2), (3) and (4), after-acquired property , in relation to a bankrupt, means such of the property that was acquired by, or devolved on, the bankrupt on or after the date of the bankruptcy, being property divisible amongst the creditors of the bankrupt, as has not been distributed amongst the creditors in the bankruptcy.
SECTION 59A 59A ORDERS TO WHICH SECTIONS 58 AND 59 ARE SUBJECT
Sections 58 and 59 have effect subject to an order under: (a) Part VIII, VIIIAB or VIIIC of the Family Law Act 1975; or (b) Part 5A of the Family Court Act 1997 (WA).
The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit:
(a) discharge an order made, whether before or after the commencement of this subsection, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or
(b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor:
(i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or
and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non-payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody.
(ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt;
An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.
60(3) [Time limit for election]If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
60(4) [Certain actions may be continued]Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of:
(a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or
(b) the death of his or her spouse or de facto partner or of a member of his or her family.
Note:
See also subsection 5(6).
Notwithstanding paragraph (1)(b), this section does not empower the Court to stay any proceedings under a proceeds of crime law.
In this section, action means any civil proceeding, whether at law or in equity.
SECTION 61 ACTIONS BY BANKRUPT PARTNER'S TRUSTEE 61(1) [Application for authorization]Where a member of a partnership becomes a bankrupt, the Court may, upon the application of the trustee, authorize the trustee to commence and prosecute any action in the names of the trustee and of the bankrupt's partner or partners.
61(2) [Partner may dispute authorization]Notice of the application for authority to commence the action shall be given to the bankrupt's partner or partners, who, or any of whom, may show cause against it.
61(3) [Court's powers]Upon application by such a partner, the Court may, if it thinks fit, direct that that partner shall receive the share of the proceeds of the action to which he or she is entitled as a partner.
61(4) [Indemnity against costs]If a partner does not claim any benefit from the action, the Court may order that he or she be indemnified against costs in respect of the action.
61(5) [Release of debt void against trustee]Unless the Court otherwise orders, a release by a partner of the debt or demand to which the action relates made after notice has been given to him or her under this section is void as against the trustee.
61(6) [Application of section]This section applies to and in relation to joint debtors who are not partners as if they were partners.
SECTION 62 62 ACTIONS ON JOINT CONTRACTSWhere a bankrupt is a contractor in respect of a contract jointly with another person or other persons, that person or those persons may sue or be sued in respect of the contract without the joinder of the bankrupt. SECTION 63 63 DEATH OF BANKRUPT
Where a bankrupt dies before he or she is discharged from the bankruptcy, the proceedings in bankruptcy shall, unless the Court otherwise directs, be continued, so far as they are capable of being continued, as if he or she were alive. Division 5 - Meetings of creditors
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
[ CCH Note: For application of this section to meetings of creditors under Div 6 of Part IV see Bankruptcy Rules Sch 1A.]
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 9 of 1992, s 12.) SECTION 69 69 (REPEALED)
(Repealed by No 115 of 1990, s 14(1).) Division 5A - Committee of inspection
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
[ CCH Note: Act No 80 of 2004, s 3 and Sch 2 item 12 contained the following transitional provision, effective 1 December 2004:
the application is a
pre-commencement annulment application
. as if those repeals had not happened and those amendments had not been made.
12 Transitional - annulments
]
(1)
For the purposes of this item, if a composition or scheme of arrangement under Division 6 of Part IV of the Bankruptcy Act 1966 was annulled before 1 December 2004, the annulment is a
pre-commencement annulment
.
(2)
For the purposes of this item, if:
(a)
an application is made before 1 December 2004 under subsection 75(4) of the Bankruptcy Act 1966 for the annulment of a composition or scheme of arrangement; and
(b)
as at 1 December 2004, proceedings in relation to that application have not been finally determined;
(3)
Despite the repeals and amendments made by items 1, 2, 3, 7, 8, 9 and 10 of this Schedule and item 41 of Schedule 1, the Bankruptcy Act 1966 and regulations under that Act continue to apply, in relation to:
(a)
a pre-commencement annulment; and
(b)
a pre-commencement annulment application; and
(c)
an annulment that results from a pre-commencement annulment application;
Where a bankrupt desires to make a proposal to his or her creditors for: (a) a composition in satisfaction of his or her debts; or (b) a scheme of arrangement of his or her affairs;
he or she may lodge with the trustee a proposal in writing signed by him or her setting out the terms of the proposed composition or scheme of arrangement and particulars of any sureties or securities forming part of the proposal.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 73(1) of the Act is modified by substituting "the legal personal representative of a deceased debtor" for "a bankrupt" and substituting "the deceased debtor's" for "his or her" (wherever occurring).]
73(1A)
The trustee must, within 2 business days after receiving the proposal, give a copy of the proposal to the Official Receiver.
Penalty: 5 penalty units.
Note:
See also section 277B (about infringement notices).
73(1B)
(Repealed by No 11 of 2016)
73(1C)
Subsection (1A) is an offence of strict liability.
Note:
For strict liability, see section 6.1 of the Criminal Code.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 73 of the Act is modified by inserting subsection (2):
]
73(2)
In this section:legal personal representative
, in relation to a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
73(2)
(Repealed by No 11 of 2016)
73(2A)
(Repealed by No 11 of 2016)
73(2AA)
(Repealed by No 11 of 2016)
73(2B)
(Repealed by No 11 of 2016)
73(3)
(Repealed by No 11 of 2016)
73(4)
(Repealed by No 11 of 2016)
73(5)
(Repealed by No 11 of 2016)
SECTION 73A 73A TRUSTEE MAY REQUIRE SURETY FOR COST OF MEETING
(Repealed by No 11 of 2016)
This section applies if the proposal provides that a person (the proposed trustee ) other than the trustee of the bankrupt's estate is to become the trustee of the composition or scheme of arrangement.
73B(2)
The proposed trustee must make a written declaration stating whether the bankrupt is a related entity of:
(a) the proposed trustee; or
(b) a related entity of the proposed trustee.
73B(3)
The proposed trustee must:
(a) give a copy of the declaration to the Official Receiver; and
(b) give a copy of the declaration to the trustee of the bankrupt's estate; and
(c) keep a copy of the declaration.
73B(4)
(Repealed by No 11 of 2016)
(Repealed by No 11 of 2016)
If the proposal is accepted by a special resolution of creditors at a meeting held in accordance with the Insolvency Practice Rules, the bankruptcy is annulled, by force of this subsection, on the day the special resolution was passed.
74(2)-(4)
(Omitted by No 9 of 1992, s 15.)
74(5)
(Repealed by No 11 of 2016)
74(5A)
The trustee must, before the end of the period of 2 days beginning on that date, give the Official Receiver a written notice setting out the name and the bankruptcy number of the former bankrupt and the date of the annulment.
Penalty: 5 penalty units.
Note:
See also section 277B (about infringement notices).
74(5B)
Subsection (5A) is an offence of strict liability.
Note:
For strict liability, see section 6.1 of the Criminal Code.
74(6)
Where a bankruptcy is annulled under this section, all sales and dispositions of property and payments duly made, and all acts done, by the trustee or any person acting under the authority of the trustee or the Court before the annulment shall be deemed to have been validly made or done but, subject to subsection (7), the property of the bankrupt still vested in the trustee vests in such person as the Court appoints or, in default of such an appointment, reverts to the bankrupt for all his or her estate or interest in it, on such terms and subject to such conditions (if any) as the Court orders.
74(7)
Where a law of the Commonwealth or of a State or Territory requires the transmission of property to be registered, any such property vested in the trustee at the time of the annulment of the bankruptcy, notwithstanding that it vests in equity in such person as the Court appoints or in the bankrupt, as the case may be, does not vest in that person or the bankrupt at law until the requirements of that law have been complied with.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 74 of the Act is modified by substituting the section:
Penalty: 5 penalty units. See also section 277B (about infringement notices).
SECTION 74 ANNULMENT OF ADMINISTRATION
74(1)
If a proposal to annul the administration of an estate is accepted by a special resolution of creditors at a meeting held in accordance with the Insolvency Practice Rules, the administration of the estate is annulled, by force of this subsection, on the day the special resolution is passed.
74(2)
Within 2 business days after that day, the trustee of the estate must give to the Official Receiver a certificate, signed by the trustee, of the following matters:
(a)
the name of the estate;
(b)
the number of the administration;
(c)
the terms and date of the special resolution.
Note:
74(3)
An offence against subsection (2) is an offence of strict liability.
74(4)
The Official Receiver must enter the day on which the administration of the estate is annulled in the National Personal Insolvency Index.
]
This section applies to a composition or scheme of arrangement that has been accepted in accordance with this Division.
Variation by special resolution of creditors
74A(2)
The creditors, with the written consent of the debtor, may vary the composition or scheme by special resolution at a meeting called for the purpose.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsections 74A(2) and (3) of the Act is modified by substituting "legal personal representative of the deceased debtor" for "debtor".]
Variation proposal by trustee
74A(3)
The trustee may, in writing, propose a variation of the composition or scheme. The trustee cannot propose a variation without the written consent of the debtor.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsections 74A(2) and (3) of the Act is modified by substituting "legal personal representative of the deceased debtor" for "debtor".]
74A(4)
The trustee must give notice of the proposed variation to all the creditors who are entitled to receive notice of a meeting of creditors.
74A(5)
The notice must: (a) include a statement of the reasons for the variation and the likely impact it will have on creditors (if it takes effect); and (b) specify a proposed date of effect for the variation (at least 14 days after the notice is given); and (c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the variation taking effect without there being a meeting of creditors.
74A(6)
If no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date, then the proposed variation takes effect on the date specified in the notice.
74A(7)
A certificate signed by the trustee stating any matter relating to a proposed variation under this section is prima facie evidence of the matter.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 74A of the Act is modified by inserting subsection (8):
]
74A(8)
In this section:legal personal representative
, of a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
Subject to this section, a composition or scheme of arrangement accepted in accordance with this Division is binding on all the creditors of the bankrupt so far as relates to provable debts due to them from the bankrupt.
75(2)
The acceptance of a composition or scheme of arrangement does not: (a) except with the consent of the creditor to whom the debt is due, release the bankrupt from a provable debt that would not be released by his or her discharge from bankruptcy; or (b) release any other person from any liability from which he or she would not be released by the discharge of the bankrupt.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 75(2) of the Act is modified by repealing the subsection.]
75(3)
The provisions of a composition or scheme of arrangement that has been accepted in accordance with this Division may be enforced by the Court on application by a person interested, and disobedience of an order of the Court made on the application is a contempt of the Court and is punishable accordingly.
75(4)
(Repealed by No 80 of 2004)
75(5)
(Repealed by No 80 of 2004)
75(6)
(Repealed by No 80 of 2004)
75(7)
(Repealed by No 80 of 2004)
75(8)
(Repealed by No 80 of 2004)
SECTION 76 APPLICATION OF PART VIII AND SCHEDULE 2 TO TRUSTEE OF A COMPOSITION OR ARRANGEMENT 76(1)
Part VIII and Schedule 2 apply, with any modifications prescribed by the regulations, in relation to the trustee of a composition or scheme of arrangement under this Division as if the debtor were a bankrupt and the trustee were the trustee in his or her bankruptcy.
76(2)
If, after taking into account the modifications prescribed by the regulations, a provision of Part VIII or Schedule 2 is incapable of application in relation to the trustee of a composition or scheme of arrangement, or is inconsistent with this Division, that provision does not so have application.
76(3)
(Omitted by No 119 of 1987, s 33(c).)
SECTION 76A 76A MEETINGS OF CREDITORS
(Repealed by No 11 of 2016)
Sections 222 to 222D, 224 and 224A apply, with such modifications (if any) as are prescribed by the regulations, in relation to a composition or scheme of arrangement under this Division as if:
(a) the composition or scheme were a personal insolvency agreement executed by the debtor; and
(b) the trustee of the composition or scheme were the trustee of the personal insolvency agreement.
A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause: (a) forthwith after becoming a bankrupt, give to the trustee:
(i) all books (including books of an associated entity of the bankrupt) that are in the possession of the bankrupt and relate to any of his or her examinable affairs; and
(b) attend the trustee whenever the trustee reasonably requires; and (ba) give such information about any of the bankrupt's conduct and examinable affairs as the trustee requires; and (bb) as soon as practicable after the later of the following times:
(ii) any passport or document issued for the purposes of travel held by the bankrupt; and
(i) the time the bankrupt's statement of affairs was accepted under subsection 57B(1);
(ii) the time the bankrupt became a bankrupt;
advise the trustee of any material change that occurred between the time the statement was filed and the later of the times mentioned in subparagraph (i) or (ii); and
(bc) if a material change occurs at or after the later of the times mentioned in subparagraph (bb)(i) or (ii), advise the trustee of that change as soon as practicable after the change occurs; and (c) attend a meeting of creditors whenever the trustee requires; and (d) at each meeting of creditors at which the bankrupt is present, give such information about any of the bankrupt's conduct and examinable affairs as the meeting requires; and (e) execute such instruments and generally do all such acts and things in relation to his or her property and its realization as are required by this Act or by the trustee or as are ordered by the Court upon the application of the trustee; and (f) disclose to the trustee, as soon as practicable, property that is acquired by him or her, or devolves on him or her, before his or her discharge, being property divisible amongst his or her creditors; and (g) aid to the utmost of his or her power in the administration of his or her estate.77(2)
In this section:
material change
means a change in the particulars contained in the bankrupt's statement of affairs, where the change could reasonably be expected to be relevant to the administration of the bankrupt's estate.
The Official Receiver, or an officer authorised in writing by the Official Receiver to exercise powers under this section, is entitled at all reasonable times to full and free access to all premises and books for any purpose of this Act, and for that purpose:
(a) may make copies of, or take extracts from, books; and
(b) may remove from premises any books that the Official Receiver or officer reasonably considers may be relevant to the examinable affairs of:
(i) a bankrupt whose affairs are being administered under Part IV; or
(ii) a person who is a party (as debtor) to a debt agreement; or
(iii) a debtor whose affairs are being administered under Part X; or
(iv) a deceased debtor whose affairs are being administered under Part XI or are subject to a debt agreement.
77AA(1A)
A registered trustee may accompany and assist the Official Receiver or an officer exercising powers under subsection (1) if:
(a) the Official Receiver has given written authority for the registered trustee to do so; and
(b) the exercise of the powers under subsection (1) relates to a bankrupt, debtor or deceased debtor whose affairs the registered trustee is administering.
77AA(1B)
The registered trustee may be accompanied by a person nominated by the registered trustee.
77AA(1C)
The Official Receiver or officer may remove books from premises only if the Official Receiver or officer reasonably considers that:
(a) it is not reasonably practicable to make copies of, or take extracts from, the books on the premises; or
(b) it would be an unreasonable intrusion on the affairs of the occupier of the premises to remain on the premises to make copies of, or take extracts from, the books.
77AA(1D)
If the Official Receiver or officer reasonably believes that any books are, or may be, relevant to the examinable affairs of a bankrupt, a person who is a party (as debtor) to a debt agreement, a debtor whose affairs are being administered under Part X or a deceased debtor whose affairs are being administered under Part XI, the Official Receiver or officer may keep the books until he or she decides that:
(a) he or she no longer needs the books; or
(b) the books are not relevant to the examinable affairs of any bankrupt, person who is a party (as debtor) to a debt agreement, debtor or deceased debtor.
77AA(1E)
While the Official Receiver or officer is keeping books, a person whose books they are, or from whose premises the books were taken, may inspect the books at any reasonable time.
77AA(2)
An officer is not entitled to enter or remain in or on any premises under this section if, on being requested by the occupier of the premises for proof of authority, the officer does not produce the officer's authority under subsection (1).
77AA(3)
The occupier of any premises entered or proposed to be entered by the Official Receiver, or by an officer, under subsection (1) must provide the Official Receiver or officer with all reasonable facilities and assistance for the effective exercise of powers under this section.
Penalty: 30 penalty units.
SECTION 77A ACCESS BY TRUSTEE TO BOOKS OF ASSOCIATED ENTITY 77A(1) [Investigation of bankrupt]
Where a trustee is conducting under section 19AA an investigation relating to a person (in this section called the bankrupt ), subsections (2) and (3) of this section apply.
For the purposes of the investigation, a trustee may by writing require a person to produce:
(a) to a specified person, being a trustee or another person; and
(b) at a specified place, and within a specified period or at a specified time on a specified day, being a place, and a period or a time and day, that are reasonable in the circumstances;
specified books, or specified classes of books, that:
(c) are books of an associated entity of the bankrupt;
(d) are in the possession of the person of whom the requirement is made; and
(e) in the trustee's opinion, are relevant to the investigation.
[ CCH Note: Please note that CCH also removed "the" which preceded "investigator" prior to the amendment referred to above in item 68.]
Where the trustee requires a person (in this subsection called the relevant person ) under this section to produce books to a specified person, the trustee or the specified person:
(a) if the books are so produced:
(i) may make copies of, or take extracts from, the books; and
(ii) may require the relevant person, or any other person who was a party to the compilation of the books, to explain to the best of his or her knowledge and belief any matter about the compilation of the books or to which the books relate; or
(b) in any other case - may require the relevant person to state, to the best of his or her knowledge or belief:
(i) where the books may be found; and
(ii) who last had possession, custody or control of the books and where that person may be found.
The production of books under this section does not prejudice a lien that a person has on the books.
(Repealed by No 131 of 2002)
The Official Receiver may, by written notice given to a person, require the person to do one or more of the following:
(a) give the Official Receiver information the Official Receiver requires for the purposes of the performance of the functions of the Official Receiver or a trustee under this Act;
(b) attend before the Official Receiver, or an officer authorised in writing by the Official Receiver to exercise powers under this paragraph, and do one or both of the following:
(i) give evidence relating to any matters connected with the performance of the functions of the Official Receiver or a trustee under this Act;
(ii) produce all books in the person's possession relating to any matters connected with the performance of the functions of the Official Receiver or a trustee under this Act;
(c) produce all books in the person's possession relating to any matters connected with the performance of the functions of the Official Receiver or a trustee under this Act.
It does not matter whether or not the person is a bankrupt or is employed in or in connection with a Department, or an authority, of the Commonwealth or of a State or Territory.
77C(2)
The Official Receiver or authorised officer may require the information or evidence to be given on oath, and either orally or in writing, and for that purpose may administer an oath.
77C(3)
Notes taken down and signed by a person who attends before the Official Receiver or an authorised officer under paragraph (1)(b), and the transcript of the evidence given by the person at the attendance:
(a) may be used in evidence in any proceeding under this Act whether or not the person is a party to the proceeding; and
(b) may be inspected:
(i) by the person, without fee; and
(ii) if the notes and evidence relate to matters concerning the bankruptcy of the person or of another person - by the trustee and a person who states in writing that he or she is a creditor, without fee; and
(iii) by any other person on payment of the fee determined by the Minister by legislative instrument.
The Official Receiver may, by written notice given to a bankrupt, require the bankrupt to give the Official Receiver a statement of the bankrupt's affairs within 14 days after receiving the notice.
Note 1:
Section 6A sets out requirements for statements of affairs.
Note 2:
A failure to comply with the notice is an offence: see section 267B.
Subject to this section, a person who attends before the Official Receiver, or before an authorised officer, under subsection 77C(1) is entitled:
(a) to be paid by the Official Receiver an allowance of $20 in respect of each day or part of a day on which the person so attends; and
(b) to be reimbursed by the Official Receiver any reasonable expenses incurred by the person for transport, meals and accommodation in connection with the person's attendance. 77D(2) [Person not entitled]
A person who is or has been a bankrupt is not entitled to be paid an allowance, or reimbursed any expenses, in respect of the attendance of that person to give evidence or produce books relating to his or her bankruptcy.
77D(3) [Sufficient documentary evidence of expenses required]A person is not entitled to be reimbursed any expenses unless the person produces to the Official Receiver sufficient documentary evidence to establish that the person incurred those expenses.
77D(4) [Subject to sec 304A]This section has effect subject to section 304A.
If a person who is required by a notice under subsection 77C(1) to attend before the Official Receiver or an authorised officer is entitled under subsection 77D(1) to be paid an allowance and to be reimbursed expenses in respect of the attendance, the Official Receiver must, before the person begins to travel for the purpose of so attending, offer to the person, on account of the allowance and reimbursement of expenses, an advance determined under this section.
If the Official Receiver is satisfied that it will be necessary for the person to travel by aircraft from the person's principal place of residence to the place at which the person is required to attend, the advance is to be an amount equal to the sum of $20 and the ordinary one-way economy class airfare from the airport nearest to that principal place of residence to the airport nearest to the place at which the person is required to attend.
If the person will be travelling by private motor vehicle, the advance is to be the sum of $20 and whichever is the lesser of the following amounts:
(a) an amount prescribed by the regulations;
(b) if there is an airport open to civilian passenger traffic that is within a radius of 100 kilometres from the person's principal place of residence - the ordinary one-way economy class airfare from that airport to the airport nearest to the place at which the person is required to attend.
If the person will be travelling otherwise than as mentioned in subsections (2) and (3), the advance is to be:
(a) if the distance between the person's principal place of residence and the place at which the person is required to attend exceeds 50 kilometres - $10 plus such additional amount (if any) as is prescribed by the regulations; or
(b) in any other case - $10.
The regulations may prescribe different amounts in respect of different distances and different means of travel.
This section has effect subject to section 304A.
If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the bankruptcy of a particular person, any amount payable to the first-mentioned person under section 77D or 77E is to be paid out of the estate of the bankrupt as an expense of the administration of the bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 77F of the Act is modified by substituting the section:
SECTION 77F ALLOWANCES AND EXPENSES TO BE PAID OUT OF DEBTOR'S PROPERTY SUBJECT TO CONTROL UNDER DIVISION 2 OF PART X
77F
If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the property of a debtor that is subject to control under Division 2 of Part X, any amount payable to the person under section 77D or 77E is to be paid out of that property.
and/or:
SECTION 77F ALLOWANCES AND EXPENSES TO BE PAID OUT OF DEBTOR'S PROPERTY SUBJECT TO PERSONAL INSOLVENCY AGREEMENT
]
77F
If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the property of a debtor that is subject to a personal insolvency agreement, any amount payable to the person under section 77D or 77E is to be paid out of that property.
Where it is made to appear to the Court:
(a) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has absconded, or is about to abscond, with a view to avoiding payment of his or her debts or to preventing or delaying proceedings against him or her under this Act;
(b) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has concealed or removed, or is about to conceal or remove, any of his or her property with a view to preventing or delaying possession of it being taken under this Act in the event of his or her becoming a bankrupt;
(c) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has destroyed, concealed or removed, or is about to destroy, conceal or remove, books (including books of an associated entity of the debtor) relating to any of the debtor's examinable affairs;
(d) that a bankrupt has concealed, or, without the permission of the trustee, has removed, any of the property of the bankrupt; or
(e) (Omitted by No 12 of 1980, s 40.)
(f) that a bankrupt has, without good cause shown, neglected or failed to comply with an order of the Court or with any other obligation under this Act;
the Court may issue a warrant for the arrest of the debtor or bankrupt, as the case may be, and his or her committal to such gaol as the Court appoints until the Court otherwise orders and may, by the same warrant, order that any property and books in the possession of the debtor or bankrupt be seized and delivered into the custody of such person as the Court appoints.
Any property and books delivered into the custody of a person in pursuance of an order under subsection (1) shall be retained by him or her until the Court makes an order as to their disposal.
Paragraphs (1)(a), (b) and (c) apply in relation to a debtor whether or not he or she has become a bankrupt and whether, in the case of a debtor against whom a petition has been presented, the petition was a creditor's petition or a debtor's petition.
SECTION 79 79 (OMITTED)(Omitted by No 44 of 1996, Sch 1, Pt 1(175).) SECTION 80 NOTIFICATION OF CHANGE IN NAME, ADDRESS OR DAY-TIME TELEPHONE NUMBER 80(1) [Bankrupt must immediately tell trustee in writing]
If during a bankruptcy a change occurs in the bankrupt's name or in the address of the bankrupt's principal place of residence, the bankrupt must immediately tell the trustee in writing of the change.
Penalty: Imprisonment for 6 months.
Subsection (1) is an offence of strict liability.
Note:
For strict liability , see section 6.1 of the Criminal Code.
For the purposes of subsection (1), a change in the name of a bankrupt shall be deemed to occur if the bankrupt in fact assumes the use of a different name or an additional name.
80(3)(Omitted by No 9 of 1992, s 21(b).)
80(4)
(Omitted by No 44 of 1996, Sch 1, Pt 1(177).)
SECTION 81 DISCOVERY OF BANKRUPT'S PROPERTY ETC. 81(1)
Where a person (in this section called the relevant person ) becomes a bankrupt, the Court or a Registrar may at any time (whether before or after the end of the bankruptcy), on the application of: (a) a person (in this section called a creditor ) who has or had a debt provable in the bankruptcy; (b) the trustee of the relevant person's estate; or (c) the Official Receiver;
summon the relevant person, or an examinable person in relation to the relevant person, for examination in relation to the bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 81(1) of the Act is modified by substituting the subsection:
81(1)
Where a person (the relevant person ) becomes a debtor whose property is subject to control under Division 2 of Part X, the Court or the Registrar may at any time (whether before or after control over that property has ended), on the application of:
(a) a person (a creditor ) who has or had a debt that would be provable if the debtor were a bankrupt; or
(b) the controlling trustee; or
(c) the Official Receiver;summon the relevant person for examination in relation to the property that is subject to control under Division 2 of Part X.
and/or:
]
81(1)
At any time during or after the administration under Part XI of the estate of a deceased debtor (the relevant person ), the Court may, on the application of:
(a) a person (a creditor ) who has or had a debt provable in the administration; or
(b) the trustee of the estate of the relevant person; or
(c) the Official Receiver;summon an examinable person in relation to the estate of the relevant person for examination in relation to the administration.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 81 of the Act is modified by inserting subsection (1AA):
]
81(1AA)
For the purposes of subsection (1):examinable person
, in relation to an estate of the relevant person, means:
(a) a person who is believed to be indebted to the estate; or
(b) a person who may be able to give information about the relevant person or the examinable affairs of the relevant person; or
(c) a person who has possession of books that may relate to:
(i) the relevant person; or
(ii) the examinable affairs of the relevant person; or
(iii) the estate; or
(d) the executor under the relevant person's will; or
(e) the administrator under letters of administration or court order;of the relevant person's estate, or a part of that estate.
81(1A)
A summons to a person by the Court or the Registrar under subsection (1) shall require the person to attend: (a) at a specified place and at a specified time on a specified day, being a place, time and day that are reasonable in the circumstances; and (b) before the Court or the Registrar or, if the Court or the Registrar thinks fit, a magistrate;
to be examined on oath under this section about the relevant person and the relevant person's examinable affairs.
81(1B)
A summons to a person under subsection (1) may require the person to produce at the examination books (including books of an associated entity of the relevant person) that: (a) are in the possession of the first-mentioned person; and (b) relate to the relevant person or to any of the relevant person's examinable affairs.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 81(1B) of the Act is modified by substituting para (b):
]
(b) relate to:
(i) the relevant person; or
(ii) the examinable affairs of the relevant person; or
(iii) the estate of the relevant person.
81(1C)
Before summoning a person on an application under subsection (1) by a creditor, the Court or the Registrar, as the case requires, may impose on the applicant such terms as to costs as it, or he or she, thinks fit.
81(2)
An examination under this section shall be held in public.
81(3)
The Court, the Registrar or a magistrate may at any time adjourn the examination of a person under this section either to a fixed date or generally, or conclude the examination.
81(4)
The Registrar or a magistrate may at any time adjourn the examination of a person under this section for further hearing before the Court.
81(5)
Where the examination is adjourned by the Registrar or a magistrate for further hearing before the Court, the Registrar or the magistrate, as the case may be, may submit to the Court such report with respect to the examination as he or she thinks fit.
81(6)
Where the examination is adjourned for further hearing before the Court, the Court may: (a) continue the examination; (b) at any time direct that the examination be continued before the Registrar or a magistrate; or (c) make such other order as it thinks proper in the circumstances.
81(7)
A person summoned to attend before the Court, the Registrar or a magistrate for examination under this section is entitled to be represented, on his or her examination, by counsel or a solicitor, who may re-examine him or her after his or her examination.
81(8)
Where a person is summoned for examination under this section, a creditor, the trustee or the Official Receiver may take part in the examination and, for that purpose, may be represented by counsel or a solicitor or by an agent authorized in writing for the purpose.
81(9)
Without limiting the generality of subsection (8), where the Official Trustee is the trustee, the Official Trustee may, for the purpose of taking part in the examination, be represented by the Official Receiver.
81(10)
The Court, the Registrar or the magistrate may put, or allow to be put, to a person being examined under this section such questions about the relevant person or any of the relevant person's examinable affairs as the Court, the Registrar or the magistrate, as the case may be, thinks appropriate.
81(10A)
Notwithstanding subsection (10), where a person is being examined under this section after the end of the bankruptcy, a question about a matter or thing arising or occurring after the end of the bankruptcy shall not be put, or allowed to be put, at the examination unless the question is about a matter or thing connected with the administration of the relevant person's estate.
81(11)
A person being examined under this section shall answer all questions that the Court, the Registrar or the magistrate puts or allows to be put to him or her.
81(11AA)
Subject to any contrary direction by the Court, the Registrar or the magistrate, the relevant person is not excused from answering a question merely because to do so might tend to incriminate the relevant person.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 81(11AA) of the Act is modified by repealing the subsection.]
81(11A)
The Court, the Registrar or the magistrate may direct a person who is being examined under this section to produce at the examination specified books, or specified classes of books, that are in the possession of the person and are relevant to matters about which the person is being, or is to be, examined.
81(11B)
Without limiting the generality of subsection (11A), a direction under that subsection may relate to books of an associated entity of the relevant person.
81(12)
Where a person admits on examination under this section that he or she is indebted to the relevant person, then, the Court, the Registrar or the magistrate, as the case may be, may, on the application of the trustee or a creditor, order the person to pay to the trustee, at or by such time and in such manner as the Court, the Registrar or the magistrate, as the case may be, thinks fit, the whole or a part of the amount in which the person admits he or she is indebted to the relevant person.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 81(12) of the Act is modified by inserting "estate of the" before "relevant person" (wherever occurring).]
81(13)
Where a person admits on examination under this section that there is in the possession of the person property of the relevant person that is divisible among creditors, the Court, the Registrar or the magistrate, as the case requires, may, on the application of the trustee or a creditor, order the first-mentioned person to deliver the property to the trustee within a specified period, in a specified manner and on specified terms.
81(14)
The Court, the Registrar or the magistrate, as the case may be, may direct that the costs of a person, other than the relevant person, examined under this section shall be paid out of the estate of the relevant person.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 81(14) of the Act is modified by substituting "person" for "person, other than the relevant person,".]
81(15)
The Court, the Registrar or the magistrate, as the case may be, may cause such notes of the examination of a person under this section to be taken down in writing as the Court, the Registrar or the magistrate, as the case may be, thinks proper, and the person examined shall sign the notes.
81(16)
(Omitted by No 44 of 1996, Sch 1, Pt 1(179).)
81(17)
Notes taken down and signed by a person in pursuance of subsection (15), and the transcript of the evidence given at the examination of a person under this section: (a) may be used in evidence in any proceedings under this Act whether or not the person is a party to the proceeding; and (b) shall be open to inspection by the person, the relevant person, the trustee or a person who states in writing that he or she is a creditor without fee and by any other person on payment of the fee prescribed by the regulations.
Division 2 - Offshore information notices
If the Official Receiver has reason to believe that:
(a) information relevant to the examinable affairs of a bankrupt is:
(i) known (whether exclusively or otherwise) by a person outside Australia; or
(ii) recorded (whether exclusively or otherwise) in a book outside Australia; or
(b) books relevant to the examinable affairs of a bankrupt are outside Australia (whether or not copies are in Australia or, if the books are copies of other books, whether or not those other books are in Australia);
the Official Receiver, by written notice (in this Division called the offshore information notice ) given to any person, may request the person:
(c) to give to the Official Receiver, within the period and in the manner set out in that notice, any such information; or
(d) to produce to the Official Receiver, within the period and in the manner set out in that notice, any such books; or
(e) to make copies of any such books and to produce to the Official Receiver, within the period and in the manner set out in that notice, those copies. 81A(2) [Period must end - 90 days]
The period set out in the offshore information notice must end 90 days after the date on which the notice is given.
Upon written application made by the person to whom the offshore information notice was given within the period set out in that notice, the Official Receiver, by written notice given to that person, may extend the period set out in the offshore information notice.
81B(2) [Where Official Receiver has not notified](a) an application under subsection (1) is made before the end of the period set out in the offshore information notice; and
(b) at the end of the period, the Official Receiver has not notified the person of the decision of the Official Receiver on the application;
the following provisions have effect:
(c) the Official Receiver is taken to have extended the period under subsection (1) to the end of the day on which the decision of the Official Receiver is notified to the person to whom the offshore information notice was given;
(d) if the Official Receiver decides to extend the period - the extended period must end after the day referred to in paragraph (c). 81B(3) [Reference to period as extended]
A reference in this Division (other than subsection (1) of this section) to the period set out in the offshore information notice is a reference to the period as extended under that subsection.
(a) an offshore information notice (in this subsection called the first notice ) was given to a person; and
(b) during the period set out in the first notice (including a period set out by virtue of one or more previous applications of this subsection), another offshore information notice (in this subsection called the subsequent notice ) is given to the person; and
(c) the subsequent notice is expressed to be by way of variation of the first notice;
the following provisions have effect:
(d) the request, or each of the requests, set out in the subsequent notice is taken, for the purposes of section 81G, to have been set out in the first notice;
(e) if the period set out in the first notice would, apart from this subsection, end before the end of the period set out in the subsequent notice - the period set out in the first notice is taken to have been extended under subsection 81B(1) to the end of the period set out in the subsequent notice. 81C(2) [Reducing scope, correcting clerical error etc]
The Official Receiver, by written notice given to the person to whom the offshore information notice was given, may vary the offshore information notice by:
(a) reducing its scope; or
(b) correcting a clerical error or obvious mistake;
and, if the Official Receiver does so, a reference in this Division to the offshore information notice is taken to be a reference to that notice as so varied.
The Official Receiver may withdraw an offshore information notice.
81D(2) [Withdrawal does not prevent giving another notice]If the Official Receiver withdraws an offshore information notice, the withdrawal does not prevent the Official Receiver from giving another offshore information notice in substitution, in whole or in part, for the withdrawn notice.
An offshore information notice may be contained in the same document as a notice under section 77C.
Nothing in this Division affects the operation of section 77C and nothing in section 77C affects the operation of this Division.
In this section:
relevant proceeding
means a proceeding:
(a) for the recovery of an amount payable by a bankrupt under section 139ZG; or
(b) for the recovery of an amount payable by a person under section 139ZL; or
(c) involving the question whether a transaction is void against the trustee under Division 3 of Part VI. 81G(2) [Information, books etc not admissible]
Subject to subsection (3), where a person refuses or fails to comply with a request or requirement set out in a notice given to the person under Division 1 or 2 to give any information or produce any books:
(a) if the request or requirement applies to information - the information is not admissible in a relevant proceeding; or
(b) if the request or requirement applies to books - neither the books, nor any secondary evidence of the books, is admissible in a relevant proceeding. 81G(3) [Subsec (2) does not apply]
Subsection (2) does not apply to information or a book if the person proves that:
(a) the information or book was not in the possession of the person when the notice was given; and
(b) there were no reasonable steps that the person could have taken to obtain the information or book. 81G(4) [Notice must set out effect of subsec (2) and (3)]
A notice given to a person under Division 1 or 2 must set out the effect of subsections (2) and (3).
81G(5) [Subsec (4) does not affect validity]A failure to comply with subsection (4) does not affect the validity of the notice.
Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 82(1) of the Act is modified by substituting "the estate of a deceased debtor was subject at the day of the order for the administration of the estate, or to which the estate may become subject because of an obligation incurred before that day, are provable in the administration of the estate" for all the words from and including "a bankrupt" to the end of the subsection.]
82(1A)
Without limiting subsection (1), debts referred to in that subsection include a debt consisting of all or part of a sum that became payable by the bankrupt under a maintenance agreement or maintenance order before the date of the bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 82(1A) of the Act is modified by substituting "deceased debtor under a maintenance agreement or maintenance order during the person's lifetime and before the date of the order for the administration of the deceased debtor's estate" for "bankrupt under a maintenance agreement or maintenance order before the date of the bankruptcy".]
82(2)
Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy.
82(3)
Penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy.
82(3AA)
An amount payable under an order made under section 1317G of the Corporations Act 2001 is not provable in bankruptcy.
82(3AB)
A debt incurred under any of the following is not provable in bankruptcy: (a) Part 4-1 of the Higher Education Support Act 2003 (HELP debts); (aaa) Part 3A of the VET Student Loans Act 2016 (VETSL debts); (aa) Part 2AA.3 of the Social Security Act 1991 (student start-up loan debts); (ab) Division 3 or 4 of Part 2 of the Student Assistance Act 1973 (ABSTUDY student start-up loan debts); (b) Part 3.1 of the Australian Apprenticeship Support Loans Act 2014 (Australian apprenticeship support loan debts).
82(3A)
An amount payable under an order made under a proceeds of crime law is not provable in bankruptcy.
82(3B)
A debt is not provable in a bankruptcy in so far as the debt consists of interest accruing, in respect of a period commencing on or after the date of the bankruptcy, on a debt that is provable in the bankruptcy.
82(4)
The trustee shall make an estimate of the value of a debt or liability provable in the bankruptcy which, by reason of its being subject to a contingency, or for any other reason, does not bear a certain value.
82(5)
A person aggrieved by an estimate so made may appeal to the Court not later than 28 days after the day on which the person is notified of the estimate.
82(6)
If the Court finds that the value of the debt or liability cannot be fairly estimated, the debt or liability shall be deemed not to be provable in the bankruptcy.
82(7)
If the Court finds that the value of the debt or liability can be fairly estimated, the Court shall assess the value in such manner as it thinks proper.
82(8)
In this section, liability includes: (a) compensation for work or labour done; (b) an obligation or possible obligation to pay money or money's worth on the breach of an express or implied covenant, contract, agreement or undertaking, whether or not the breach occurs, is likely to occur or is capable of occurring, before the discharge of the bankrupt; and (c) an express or implied engagement, agreement or undertaking, to pay, or capable of resulting in the payment of, money or money's worth, whether the payment is:
(i) in respect of amount - fixed or unliquidated;
(ii) in respect of time - present or future, or certain or dependent on a contingency; or
(iii) in respect of the manner of valuation - capable of being ascertained by fixed rules or only as matter of opinion.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 82(8) of the Act is modified by substituting "end of the administration of the deceased debtor's estate" for "discharge of the bankrupt" in para (b).]
SECTION 83 83 DEBT NOT TO BE CONSIDERED PROVED UNTIL ADMITTED
For the purposes of this Act, a creditor shall be taken not to have proved a debt until a proof of debt lodged by him or her in respect of that debt has been admitted. SECTION 84 MANNER OF PROVING DEBTS 84(1) [Proof of debt]
Subject to this Division, a creditor who desires to prove a debt in a bankruptcy shall lodge, or cause to be lodged, with the trustee a proof of debt in accordance with this section.
84(2) [Form of proof of debt](a) shall set out particulars of the debt;
(b) shall be in accordance with the approved form;
(c) shall specify the vouchers, if any, by which the debt can be substantiated; and
(d) shall state whether or not the creditor is a secured creditor.
Where the trustee is of the opinion that it is desirable that all the matters, or some of the matters, contained in a proof of debt lodged with him or her by a creditor should be verified by statutory declaration, the trustee may serve on the creditor a written notice informing the creditor that he or she is of that opinion and that, unless the creditor lodges with the trustee a statutory declaration verifying the matters contained in the proof of the debt or such of those matters as the trustee specifies in the notice, the trustee will administer the estate as if the proof of debt had not been lodged.
A statutory declaration verifying matters in a proof of debt lodged by a creditor may be made by:
(a) the creditor; or
(b) a person whose own knowledge includes the facts set out in the statutory declaration and the proof of debt, and who is authorised by the creditor to make the declaration.
Where the trustee serves a notice on a creditor under subsection (3) in respect of a proof of debt, the proof of debt shall, for the purposes of this Act (other than section 263), be deemed not to have been lodged with the trustee unless and until the creditor has lodged with the trustee a statutory declaration verifying the matters in the proof of debt or such of those matters as are specified in the notice, as the case requires.
A proof of debt under this section, or a statutory declaration referred to in subsection (3), sent to the trustee by post as certified mail (postage being prepaid) shall be deemed to have been lodged with the trustee and shall be deemed to have been so lodged at the time at which it would have been delivered in the ordinary course of post unless it is shown that the trustee did not receive it at that time.
Where it appears from the bankrupt's statement of affairs that he or she is indebted to numerous persons employed by him or her for wages or salary, the debts may be proved by one of those persons on behalf of all of those persons.
85(2) [Form of proof of several debts]The proof of debt in respect of the several debts shall be in accordance with the approved form.
Where the trustee is of the opinion that it is desirable that all the matters, or some of the matters, contained in a proof of debt lodged with him or her by a person in pursuance of this section should be verified by statutory declaration, the trustee may serve on the person a written notice informing the person that he or she is of that opinion and that, unless the person lodges with the trustee a statutory declaration verifying the matters contained in the proof of debt or such of those matters as the trustee specifies in the notice, the trustee will administer the estate as if the proof of the debt had not been lodged.
A statutory declaration verifying matters in a proof of debt lodged by a person (the creditor ) under this section may be made by:
(a) the creditor; or
(b) another person whose own knowledge includes the facts set out in the statutory declaration and the proof of debt, and who is authorised by the creditor to make the declaration.
Where the trustee serves a notice on a person under subsection (2A) in respect of a proof of debt, the proof of debt shall, for the purposes of this Act (other than section 263), be deemed not to have been lodged with the trustee unless and until the person has lodged with the trustee a statutory declaration verifying the matters in the proof of debt or such of those matters as are specified in the notice, as the case requires.
A proof of debt under this section, ora statutory declaration referred to in subsection (2A), sent to the trustee by post as certified mail (postage being prepaid) shall be deemed to have been lodged with the trustee and shall be deemed to have been so lodged at the time at which it would have been delivered in the ordinary course of post unless it is shown that the trustee did not receive it at that time.
A proof of debt lodged in pursuance of this section has the same effect as if separate proofs of debt had been lodged by each of the creditors to whom it relates.
SECTION 86 MUTUAL CREDIT AND SET-OFF 86(1) [Mutual dealings]Subject to this section, where there have been mutual credits, mutual debts or other mutual dealings between a person who has become a bankrupt and a person claiming to prove a debt in the bankruptcy:
(a) an account shall be taken of what is due from the one party to the other in respect of those mutual dealings;
(b) the sum due from the one party shall be set off against any sum due from the other party; and
(c) only the balance of the account may be claimed in the bankruptcy, or is payable to the trustee in the bankruptcy, as the case may be. 86(2) [Limitation on claim]
A person is not entitled under this section to claim the benefit of a set-off if, at the time of giving credit to the person who has become a bankrupt or at the time of receiving credit from that person, he or she had notice of an available act of bankruptcy committed by that person.
SECTION 87 87 DEDUCTION OF DISCOUNTSIn proving a debt, a creditor shall make an allowance for all discounts for which an allowance would have been made if the debtor had not become a bankrupt.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 87 of the Act is modified by substituting "estate of the deceased debtor had not become subject to administration under Part XI" for "debtor had not become a bankrupt".]
A payment made by a debtor to a creditor before the debtor became a bankrupt and representing in part principal and in part interest shall, notwithstanding any agreement to the contrary, be deemed, for the purposes of this Act but not otherwise, to have been apportioned in satisfaction of principal and interest in the proportion that the principal bears to the amount payable as interest at the agreed rate.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 88 of the Act is modified by substituting "A payment that: (a) is made to a creditor by; (i) the deceased debtor before the person's death; or (ii) the deceased debtor's estate before the date of the order for the administration of the estate; and (b) represents in part principal and in part interest;" for "A payment made by a debtor to a creditor before the debtor became a bankrupt and representing in part principal and in part interest".]
Where a debt that consisted partly of principal and partly of interest was secured and the security has been realized before the debtor became a bankrupt, the proceeds of the realization shall, for the purposes of this Act but not otherwise, notwithstanding any agreement to the contrary, be deemed to have been apportioned in satisfaction of principal and interest in the proportion that the principal bore, at the time of the realization, to the amount then payable as interest at the agreed rate.
89(2) [Apportionment where debt covers principal and interest]Where a debt that consists partly of principal and partly of interest is secured and the security is realized after the debtor became a bankrupt or the value of the security is estimated in the creditor's proof of debt, the amount realized or estimated shall, for the purposes of this Act but not otherwise and notwithstanding any agreement to the contrary, be deemed to have been apportioned in satisfaction of principal and interest in the proportion that the principal bears to the amount payable as interest at the agreed rate.
SECTION 90 PROOF OF DEBT BY SECURED CREDITOR 90(1) [Provisions to be complied with]A secured creditor is entitled to prove the whole or a part of his or her secured debt in the debtor's bankruptcy in accordance with the succeeding provisions of this Division, and not otherwise.
90(2) [Proof after surrender of security]A secured creditor who surrenders his or her security to the trustee for the benefit of creditors generally may prove for the whole of his or her debt.
90(3) [Proof for balance]A secured creditor who realizes his or her security may prove for any balance due to him or her after deducting the net amount realized, unless the trustee is not satisfied that the realization has been effected in good faith and in a proper manner.
90(4) [Proof where security not surrendered]A secured creditor who has not realized or surrendered his or her security may:
(a) estimate its value; and
(b) prove for the balance due to him or her after deducting the value so estimated. 90(5) [Form of proof where security not surrendered]
A secured creditor to whom subsection (4) applies shall state particulars of his or her security, and the value at which he or she estimates it, in his or her proof of debt.
SECTION 91 REDEMPTION OF SECURITY BY TRUSTEE ETC. 91(1)Where a secured creditor has lodged a proof of debt in respect of the balance due after deducting the estimated value of his or her security, the trustee may at any time redeem the security on payment to the creditor of the value at which it has been estimated by the creditor.
91(2)
If the trustee is dissatisfied with the value at which a security has been estimated by a creditor, he or she may require the property comprised in the security to be offered for sale at such times and on such terms and conditions as are agreed on by the creditor and the trustee.
91(3)
If any such property is offered for sale by public auction, the creditor, or the trustee on behalf of the estate is entitled to bid for, and purchase, the property.
91(4)
The creditor may at any time, by notice in writing, require the trustee to elect whether he or she will, or will not, exercise his or her power of redeeming the security or of requiring it to be realized and if the trustee does not, within 3 months after receiving the notice, notify the creditor, in writing that he or she elects to exercise the power: (a) he or she is not entitled to exercise it; (b) subject to subsection (5), any equity of redemption or other interest in the property comprised in the security that is vested in the trustee vests in the creditor; and (c) the amount of the creditor's debt shall, for the purposes of this Division, be deemed to be reduced by the amount at which the creditor has estimated the value of the security.
91(5)
The vesting of an equity of redemption or other interest in property by virtue of paragraph (4)(b) is subject to compliance with any law of the Commonwealth or of a State or Territory requiring the transmission of such interests in property to be registered.
SECTION 92 AMENDMENT OF VALUATION 92(1) [Permission to amend]
Where a secured creditor has lodged a proof of debt in respect of the balance due after deducting the estimated value of his or her security, he or she may, at any time, apply to the trustee or the Court for permission to amend the proof of debt by altering the estimated value.
92(2) [Amendment of proof of debt]If the trustee or the Court is satisfied:
(a) that the estimate of the value of the security was made in good faith on a mistaken basis; or
(b) that the value of the security has changed since the estimate was made;
the trustee or the Court may permit the creditor to amend his or her proof of debt accordingly.
92(3) [On the terms Court sees fit]Where the Court permits a creditor to amend his or her proof of debt, it may do so on such terms as it thinks just and equitable.
SECTION 93 REPAYMENT OF EXCESS 93(1) [Payment of excess]Where a creditor who has amended a proof of debt under section 92 has received, by way of dividend, any amount in excess of the amount to which he or she would have been entitled under the amended proof of debt, he or she shall forthwith repay the amount of the excess to the trustee.
93(2) [Payment of deficiency]Where a creditor who has so amended a proof of debt has received, by way of dividend, less than the amount to which he or she would have been entitled under the amended proof of debt, he or she is entitled to be paid, out of moneys for the time being available for distribution as dividend, the amount of the deficiency before those moneys are applied in the payment of future dividends, but is not entitled to affect the distribution of a dividend declared before the amendment of the proof of debt.
SECTION 94 94 SUBSEQUENT REALIZATION OF SECURITYWhere a secured creditor who has lodged a proof of debt in respect of the balance due after deducting the estimated value of his or her security subsequently realizes his or her security, or it is realized under section 91, the net amount realized shall be substituted for the estimated value of the security and section 93 applies as if the proof of debt had been amended accordingly by the creditor under section 92. SECTION 95 95 PROOF IN RESPECT OF DISTINCT CONTRACTS
Where a person was, at the time when he or she became a bankrupt, liable in respect of distinct contracts as a member of 2 or more distinct firms, or as a sole contractor and also as a member of a firm, the fact that the firms are in whole or in part composed of the same individuals, or that the sole contractor is also a member of the firm, does not prevent proof in respect of the contracts against the estates respectively liable on the contracts.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 95 of the Act is modified by substituting "deceased debtor whose estate is being administered under Part XI was, at the time of the debtor's death" for "person was, at the time when he or she became a bankrupt".]
Where a person who is liable to make any periodical payments (including rent) becomes a bankrupt on a day other than a day on which such a payment becomes due, the person entitled to the payments may prove in the bankruptcy for a proportionate part of a payment inrespect of the period from the date when the last payment became due to the date of the bankruptcy, as if the payment accrued due from day to day. SECTION 97 97 PRODUCTION OF BILLS OF EXCHANGE AND PROMISSORY NOTES
Where a creditor seeks to prove a debt in respect of a bill of exchange, promissory note or other negotiable instrument or security on which the bankrupt is liable, the proof of debt shall not, subject to any order of the Court to the contrary, be admitted, unless the bill, note, instrument or security is produced to the trustee. SECTION 98 AMENDMENT OF PROOF OF DEBT 98(1) [Consent]
A creditor may, with the consent of the trustee, amend a proof of debt lodged by him or her.
98(2) [No alteration to estimated value]This section does not authorize the amendment of the proof of debt of a secured creditor by altering the estimated value of his or her security.
SECTION 99 99 (REPEALED)(Repealed by No 131 of 2002)
A creditor shall, unless the Court in the particular case otherwise orders, bear his or her own costs of proving a debt.
100(2) [Amendment]The costs in relation to the amendment of a proof of debt under section 92 or 98 shall be borne by the creditor.
SECTION 101 INSPECTION OF PROOFS BY CREDITORS ETC. 101(1) [Examination at reasonable times]A creditor is entitled to examine at all reasonable times the proofs of debt of other creditors.
The trustee shall, upon request in writing by a creditor who has a provable debt, supply the creditor with a statement in writing containing the names of the creditors who have lodged proofs of debt, the amount claimed by each such creditor and the amount admitted by the trustee in respect of each such creditor.
The trustee shall examine each proof of debt and the grounds of the debt sought to be proved and, subject to the power of the Court to extend the time, shall, not later than 14 days after the expiration of the period specified in the notice of intention to declare a dividend as the period within which creditors may lodge their proofs of debt, either:
(a) admit the proof of debt in whole;
(b) admit it in part and reject it in part;
(c) reject it in whole; or
(d) require further evidence in support of it.
Where the trustee rejects a proof of debt in whole or in part, he or she shall inform the creditor by whom it was lodged, in writing, of the grounds of the rejection.
102(3) [Wrongful admission]Where the trustee considers that a proof of debt has been wrongly admitted, he or she may:
(a) revoke the decision to admit the proof of debt and reject it in whole; or
(b) amend the decision to admit the proof of debt by increasing or reducing the amount of the admitted debt.
Where the trustee considers that a proof of debt has been wrongly rejected in whole, he or she may:
(a) revoke the decision to reject the proof of debt; and
(b) admit the proof of debt in whole or admit the proof of debt in part and reject it in part.
Where the trustee revokes a decision to admit a proof of debt and rejects it in whole or amends such a decision by reducing the amount of the admitted debt:
(a) he or she shall inform the creditor by whom it was lodged, in writing, of his or her grounds for the revocation or amendment; and
(b) the creditor shall forthwith repay to the trustee any amount received by way of dividend in respect of the proof of debt or any amount received by way of dividend in excess of the amount that the creditor would have been entitled to receive if his or her debt had been originally admitted for the reduced amount, as the case requires.
Where the trustee revokes a decision to reject a proof of debt in whole, or amends a decision to admit a proof of debt in part by increasing the amount of the admitted debt, the creditor by whom it was lodged is entitled to be paid, out of available money for the time being in the hands of the trustee, the dividends or additional amounts of dividend, as the case may be, that the creditor would have been entitled to receive if the debt had been originally admitted in whole or for the increased amount, as the case may be, before the available money is applied in the payment of a further dividend, but the creditor is not entitled to disturb the distribution of any dividends declared before the trustee revoked or so amended the decision.
If the amount of a debt includes cents, the cents must be disregarded in admitting proof of the debt.
A creditor, or the bankrupt, may apply to the Court for review of a decision of the trustee under subsection 102(1), (3) or (4) in respect of a proof of debt.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 104(1) of the Act is modified by substituting "legal personal representative of the deceased debtor" for "bankrupt".]
104(2)
The Court may, upon the application, confirm, reverse or vary the decision of the trustee.
104(3)
Subject to the power of the Court to extend the time, an application under this section to review a decision shall not be heard by the Court unless it was made within 21 days from the date on which the decision was made.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 104of the Act is modified by inserting subsection (4):
]
104(4)
In this section:legal personal representative
, of a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
The Official Trustee is not personally liable for costs in relation to an application to review a decision made by the Official Trustee under subsection 102(1), (3) or (4) in respect of a proof of debt.
A registered trustee is not personally liable for such costs unless the Court is of opinion that there are special circumstances that justify an order that the trustee be personally liable.
A trustee may, for the purpose of carrying out his or her duties under this Division, administer oaths and take affirmations and affidavits, but is not entitled to charge a fee in respect of such an oath, affirmation or affidavit unless he or she is authorized to do so as a Commissioner for Affidavits.
106(2) [Application]This section does not apply in relation to the Official Trustee.
Subject to the operation of the provisions of section 91, a creditor is not entitled to receive, in respect of a provable debt, more than the amount of the debt and any interest payable to him or her under this Act. Division 2 - Order of payment of debts Subdivision A - General
Except as otherwise provided by this Act, all debts proved in a bankruptcy rank equally and, if the proceeds of the property of the bankrupt are insufficient to meet them in full, they shall be paid proportionately.
Note:
The rules under this Subdivision for payments of debts can be affected by proceeds of crime orders and applications for proceeds of crime orders: see Subdivision B.
Subject to this Act, the trustee must, before applying the proceeds of the property of the bankrupt in making any other payments, apply those proceeds in the following order: (a) first, in the order prescribed by the regulations, in payment of the taxed costs of the petitioning creditor and the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee and the costs of any audit carried out under section 70-15 or 70-20 of Schedule 2; (b) second, if the bankrupt had signed an authority under section 188 before the date of the bankruptcy, in payment of:
(i) the remuneration of the controlling trustee (as defined in section 187); and
(c) third, in the case of a bankruptcy that occurs within 2 months after a personal insolvency agreement executed by the bankrupt, or a composition or scheme of arrangement accepted by the bankrupt's creditors, has (including at a time before the commencement of this paragraph) been set aside or terminated, in payment of liabilities, commitments, expenses or remuneration referred to in section 114; (d) fourth, in the case of the estate of a deceased debtor whose estate is being administered under Part XI, in payment of proper funeral and testamentary expenses; (e) fifth, in payment of amounts (including amounts payable by way of allowance or reimbursement under a contract of employment or under an industrial instrument, but not including amounts in respect of long service leave, extended leave, annual leave, recreation leave or sick leave),not exceeding in the case of any one employee $1,500 or such greater amount as is prescribed by the regulations for the purposes of this paragraph, due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of services rendered to or for the bankrupt before the date of the bankruptcy; (f) sixth, in payment of all amounts due in respect of compensation payable under any law of the Commonwealth or of a State or Territory relating to workers compensation, being compensation the liability for which accrued before the date of the bankruptcy; (g) seventh, in payment of all amounts due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of long service leave, extended leave, annual leave, recreation leave or sick leave in respect of a period before the date of the bankruptcy; (h) eighth, in payment of any sum payable under section 113; (j) ninth, in payment of:
(ii) the costs, charges and expenses properly and reasonably incurred by the controlling trustee while the authority was in force (including any debts incurred by the controlling trustee that are provable in the bankruptcy);
(i) such preferences, priorities or advantages in favour of any creditor or group of creditors as regards any other creditor or group of creditors; and
as a meeting of the creditors, by special resolution, resolves.
(ii) such costs, charges and expenses incurred in the interests of creditors before the date of the bankruptcy;
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 109(1) of the Act is modified by inserting "or the trustee of the deceased debtor's estate" after "petitioning creditor" in para (a) and repealing para (b).]
109(1A)
Subsection (1) has effect subject to: (a) section 50 of the Child Support (Registration and Collection) Act 1988; and (b) former subsections 221YHJ(3), (4) and (5) and 221YHZD(3), (4) and (5) and former section 221YU of the Income Tax Assessment Act 1936.
Note:
The provisions of the Income Tax Assessment Act 1936 referred to do not apply to liabilities arising after 30 June 1993.
109(1B)
The reference in paragraph (1)(e) to amounts due in respect of an employee of the bankrupt includes a reference to amounts due as contributions to a fund for the purposes of making provision for, or obtaining, superannuation benefits for the employee, or for dependants of the employee.
109(1C)
The reference in paragraph (1)(e) to amounts due to or in respect of any employee of the bankrupt also includes a reference to amounts due as superannuation guarantee charge (within the meaning of the Superannuation Guarantee (Administration) Act 1992), or general interest charge in respect of non-payment of the superannuation guarantee charge.
109(2)
Subject to subsection (3), where a payment has been made by the bankrupt of an amount referred to in paragraph (1)(e) or (g) and the payment was made out of moneys advanced by a person for the purpose of enabling the payment, or such a payment, to be made, the person by whom the moneys were advanced has the same right of priority in respect of the moneys so advanced as the person who received the payment would have had if the payment had not been made.
109(3)
The right of priority conferred by subsection (2) in respect of moneys advanced for the purpose referred to in that subsection does not extend to so much of the money so advanced as exceeds the amount by which the amount in respect of which the person who received the payment would have been entitled to priority has been diminished by reason of the payment.
109(4)
(Omitted by No 119 of 1987, s 41(1).)
109(5)
Paragraph (1)(f) does not apply to the extent to which the bankrupt is indemnified under a contract of insurance against the liability referred to in that paragraph.
109(6)
Where, under a law of the Commonwealth or of a State or Territory that provides for workers compensation, a bankrupt is liable to make a payment to a body or fund by way of reimbursing the body or fund in respect of compensation paid or payable by the body or out of the fund under that law, paragraph (1)(f) does not apply to the amount so payable by the bankrupt.
109(6A)
Where compensation payable under a law relating to workers compensation is payable by way of periodical payments, the amount of that compensation shall, for the purposes of paragraph (1)(f), be taken to be the lump sum for which those periodical payments could, if redeemable, be redeemed under the law under which those periodical payments are made.
109(7)
(Repealed by No 11 of 2016)
109(7A)
(Repealed by No 11 of 2016)
109(7B)
(Repealed by No 11 of 2016)
109(8)
A payment must not be made under paragraph (1)(j) until 28 days after the day on which the special resolution referred to in that paragraph was passed.
109(9)
The bankrupt or a creditor may, before the expiration of the period referred to in subsection (8), apply to the Court to reverse or vary the decision of the creditors and the Court may, upon the application, make such order as it thinks proper.
109(10)
Where in any bankruptcy: (a) property has been recovered, realized or preserved under an indemnity for costs of litigation given by a creditor or creditors; or (b) expenses in relation to which a creditor has, or creditors have, indemnified a trustee have been recovered;
the Court may, upon the application of the trustee or a creditor, make such orders as it thinks just and equitable with respect to the distribution of that property and the amount of those expenses so recovered with a view to giving the indemnifying creditor or creditors, as the case may be, an advantage over others in consideration of the risk assumed by creditor or creditors.
109(11)
Except as provided in paragraph (1)(a), the debts in each of the classes specified in subsection (1) rank equally between themselves and shall be paid in full unless the proceeds of the property of the bankrupt are insufficient to meet them, in which case they shall be paid proportionately.
109(12)
In subsection (11), debts includes liabilities, remuneration, commitments and expenses specified in subsection (1).
SECTION 109A DEBTS DUE TO EMPLOYEES 109A(1)
Where a contract of employment with a bankrupt was subsisting immediately before the date of the bankruptcy, the employee under the contract is, whether or not the employee is a person referred to in subsection (2), entitled to payment under section 109 as if the employee's employment had been terminated by the bankrupt on that date.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 109A(1) of the Act is modified by substituting the subsection :
]
109A(1)
If:
(a) a contract of employment with a person who has since died and whose estate is being administered under Part XI was subsisting immediately before the day of the person's death; or
(b) a contract of employment with the trustee, in the trustee's capacity as trustee, of an estate that is being administered under Part XI was subsisting immediately before the day of the order for the administration;the employee under the contract is, whether or not the employee is a person referred to in subsection (2), entitled to payment under section 109 as if the employee's employment had been terminated:
(c) in the case that paragraph (a) applies:
(i) by the person; andmentioned in that paragraph; or
(ii) on the day;
(d) in the case that paragraph (b) applies:
(i) by the trustee; andmentioned in that paragraph.
(ii) on the day;
109A(2)
Where, for the purposes of a bankruptcy, a trustee employs a person whose employment by the bankrupt had been terminated by reason of the bankruptcy, that person shall, for the purpose of calculating any entitlement to payment for long service leave, extended leave, annual leave, recreation leave or sick leave, be deemed, while the trustee employs that person for those purposes, to be employed by the bankrupt.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 109A(2) of the Act is modified by inserting "or legal personal representative" after "trustee" (wherever occurring).]
109A(3)
Subject to subsection (4), where, after the date of a bankruptcy, an amount in respect of long service leave or extended leave becomes due to a person referred to in subsection (2) in respect of the employment so referred to, the amount is a cost of the bankruptcy.
109A(4)
Where, at the date of a bankruptcy, the length of qualifying service of a person employed by the bankrupt is insufficient to entitle that person to any amount in respect of long service leave or extended leave, but, by the operation of subsection (2), that person becomes entitled to such an amount after that date, that amount:
(a) is a cost of the bankruptcy to the extent of an amount that bears to that amount the same proportion as the length of that person's qualifying service after that date bears to the total length of that person's qualifying service; and
(b) shall, to the extent of the balance of that amount, be deemed to be an amount referred to in paragraph 109(1)(g).
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 109A of the Act is modified by inserting subsection (5):
]
109A(5)
In this section:legal personal representative
, of a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
In the case of joint debtors, whether partners or not, the joint estate shall be applied in the first instance in payment of their joint debts, and the separate estate of each joint debtor shall be applied in the first instance in payment of his or her separate debts.
110(2)
If there is a surplus in the case of any of the separate estates, it shall be dealt with as part of the joint estate and if there is a surplus in the case of the joint estate, it shall be dealt with as part of the respective separate estates in proportion to the right and interest of each joint debtor in the joint estate.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 110 of the Act is modified by repealing the section.]
(Repealed by No 119 of 1987, s 42(1).) SECTION 113 APPRENTICESHIP ETC. CLAIMS 113(1)
Where, at the time of the presentation of a petition on which, or by virtue of the presentation of which, a person became a bankrupt, a person was apprenticed, or was an articled clerk, to the bankrupt, the sequestration order or, in the case of a debtor's petition, the presentation of the petition is, if the apprentice or clerk or a person acting on his or her behalf gives notice in writing to the trustee that the apprentice or clerk elects that the indenture of apprenticeship or articles of agreement be discharged, a complete discharge of that indenture or those articles.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 113(1) of the Act is modified by substituting "making of a sequestration order" for "presentation of a petition on which, or by virtue of the presentation of which, a person became a bankrupt" and omitting "or, in the case of a debtor's petition, the presentation of the petition".]
113(2)
Where such an indenture or such articles are so discharged and any money has been paid by or on behalf of the apprentice or clerk to the bankrupt as a fee, the trustee may, on application by or on behalf of the apprentice or clerk, pay out of the property of the bankrupt, to or for the use of the apprentice or clerk, such sum as the trustee thinks reasonable, having regard to the amount paid by or on behalf of the apprentice or clerk and to the time during which he or she has served with the bankrupt under the indenture or articles and to the other circumstances of the case.
113(3)
The trustee shall, on the application of an apprentice or articled clerk to the bankrupt, or of a person acting on his or her behalf, execute a transfer of the indenture of apprenticeship or articles of agreement to some other person.
SECTION 114 PAYMENT OF LIABILITIES ETC. INCURRED UNDER TERMINATED DEED ETC. 114(1)
Where a debtor becomes a bankrupt after a personal insolvency agreement executed by him or her, or a composition or scheme of arrangement accepted by his or her creditors, has, whether before or after the commencement of this Act, been set aside or terminated: (a) any unpaid liabilities incurred in good faith, and any unpaid commitments entered into in good faith, under the terminated agreement, composition or scheme of arrangement by the trustee or the debtor; (b) any expenses reasonably incurred in good faith under the terminated agreement, composition or scheme of arrangement by the trustee, being expenses for which he or she has not been reimbursed; and (c) such proportionate part of the unpaid remuneration of the trustee as the creditors in relation to the terminated agreement, composition or scheme of arrangement determine by resolution;
are debts provable in the bankruptcy.
114(2)
In this section:
the terminated agreement, composition or scheme of arrangement
means the agreement, composition or scheme of arrangement that has been set aside or terminated.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 114 of the Act is modified by substituting "dies, and the debtor's estate becomes subject to administration under Part XI," for "becomes a bankrupt".]
If property of a bankrupt is covered by a restraining order, or a forfeiture order, made on or after the date of the bankruptcy, proceeds of property that is covered by the order must not be applied under Subdivision A while that property is so covered.
114A(2) [Pecuniary penalty order]If a pecuniary penalty order is made against a bankrupt on or after the date of the bankruptcy, proceeds of any of the property of the bankrupt must not be applied under Subdivision A while the order is in force.
Note:
For proceeds of crime orders made before the date of the bankruptcy, see section 58A.
(a) an application is made under a proceeds of crime law for a restraining order or a forfeiture order; and
(b) if the order were made, it would cover property of a bankrupt (whether the application is made before, on or after the date of the bankruptcy);
proceeds of any of the property of the bankrupt that would be covered by the order must not be applied under Subdivision A before the application is finally determined.
114B(2) [Application for pecuniary penalty order](a) an application is made under a proceeds of crime law for a pecuniary penalty order; and
(b) the person against whom the order would be made is, or later becomes, a bankrupt;
proceeds of any of the property of the bankrupt must not be applied under Subdivision A before the application is finally determined.
If circumstances arise as a result of which:
(a) this Subdivision prevents Subdivision A from being applied to the proceeds of property of a bankrupt; or
(b) this Subdivision no longer prevents Subdivision A from being applied to the proceeds of property of a bankrupt;
the Director of Public Prosecutions (or the Commissioner of the Australian Federal Police, if the Commissioner is the Commonwealth proceeds of crime authority that is the responsible authority for the order under the Proceeds of Crime Act 2002) must, as soon as practicable, give the trustee written notice of the existence of the circumstances.
If a person becomes a bankrupt on a creditor's petition and subsection (1A) does not apply, then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the creditor's petition was presented.
(a) a person becomes a bankrupt on a creditor's petition that was based on breach of a bankruptcy notice; and
(b) the time for compliance with the notice was extended under subsection 41(7); and
(c) the Court making the sequestration order considers that the application under subsection 41(7) was frivolous, vexatious or otherwise without substantial merit;
then the bankruptcy is taken to have relation back to, and to have commenced at, the time that would have applied under subsection (1) of this section if the time for compliance had not been extended.
If a person becomes a bankrupt because of a sequestration order made under Division 6 of Part IV or under Part X, then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the application for the sequestration order was made.
The bankruptcy of a person who becomes a bankrupt as a result of the acceptance of a debtor's petition is taken to have relation back to, and to have commenced at, the time indicated in the following table.
| Debtor's petition bankruptcy - time to which bankruptcy has relation back and time bankruptcy commences | ||
| Circumstances in which debtor's petition was presented or accepted | Time to which bankruptcy has relation back and time of commencement of bankruptcy | |
| 1 | Petition accepted by the Official Receiver under a direction of the Court | Time specified by the Court as the commencement of the bankruptcy |
| 2 | Petition presented when at least one creditor's petition was pending against the petitioning debtor (whether alone, as a member of a partnership or as a joint debtor), and accepted by the Official Receiver without a direction from the Court | Time of the commission of the earliest act of bankruptcy on which any of the creditor's petitions was based |
| 3 | Petition presented when no creditor's petitions were pending but the debtor had committed at least one act of bankruptcy in the past 6 months, and accepted by the Official Receiver without a direction from the Court | Time of commission of the earliest act of bankruptcy within the 6 months before the petition was presented |
| 4 | Petition presented when no creditor's petitions were pending and the debtor had not committed any act of bankruptcy in the past 6 months, and accepted by the Official Receiver without a direction from the Court | Time of presentation of the petition |
A creditor's petition or a sequestration order made on a creditor's petition is not invalid by reason of the commission of an act of bankruptcy before the time when the debt on which the petition was based was incurred.
SECTION 116 PROPERTY DIVISIBLE AMONG CREDITORS 116(1)Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and (b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; and (c) property that is vested in the trustee of the bankrupt's estate by or under an order under section 139D or 139DA; and (d) money that is paid to the trustee of the bankrupt's estate under an order under section 139E or 139EA; and (e) money that is paid to the trustee of the bankrupt's estate under an order under paragraph 128K(1)(b); and (f) money that is paid to the trustee of the bankrupt's estate under a section 139ZQ notice that relates to a transaction that is void against the trustee under section 128C; and (g) money that is paid to the trustee of the bankrupt's estate under an order under section 139ZU;
is property divisible amongst the creditors of the bankrupt.
116(2)
Subsection (1) does not extend to the following property: (a) property held by the bankrupt in trust for another person; (b) the bankrupt's household property that is:
(i) of a kind prescribed by the regulations; or
(ba) personal property of the bankrupt that:
(ii) identified by a resolution passed by the creditors before the trustee realises the property;
(i) has sentimental value for the bankrupt; and
(ii) is of a kind prescribed by the regulations; and
(c) the bankrupt's property that is for use by the bankrupt in earning income by personal exertion and:
(iii) is identified by a special resolution passed by the creditors before the trustee realises the property;
(i) does not have a total value greater than the limit prescribed by the regulations; or
(ii) is identified by a resolution passed by the creditors; or
(ca) property used by the bankrupt primarily as a means of transport, being property whose aggregate value does not exceed the amount prescribed by the regulations or, if before the trustee realises the last-mentioned property the creditors determine by resolution a greater amount in relation to that property, that greater amount; (d) subject to sections 128B, 128C and 139ZU:
(iii) is identified by an order made by the Court on an application by the bankrupt;
(i) policies of life assurance or endowment assurance in respect of the life of the bankrupt or the spouse or de facto partner of the bankrupt;
(ii) the proceeds of such policies received on or after the date of the bankruptcy;
(iii) the interest of the bankrupt in:
(A) a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or
(B) an approved deposit fund (within the meaning of that Act); or
(C) an exempt public sector superannuation scheme (within the meaning of that Act);
(iv) a payment to the bankrupt from such a fund received on or after the date of the bankruptcy, if the payment is not a pension within the meaning of the Superannuation Industry (Supervision) Act 1993;
(iva) a payment to the bankrupt under a payment split under Part VIIIB or VIIIC of the Family Law Act 1975 where:
(A) the eligible superannuation plan involved is a fund or scheme covered by subparagraph (iii); and
(B) the splittable payment involved is not a pension within the meaning of the Superannuation Industry (Supervision) Act 1993;
(v) the amount of money a bankrupt holds in an RSA;
(vi) a payment to a bankrupt from an RSA received on or after the date of the bankruptcy, if the payment is not a pension or annuity within the meaning of the Retirement Savings Accounts Act 1997;
(vii) a payment to the bankrupt under a payment split under Part VIIIB or VIIIC of the Family Law Act 1975 where:
(A) the eligible superannuation plan involved is an RSA; and
(B) the splittable payment involved is not a pension or annuity within the meaning of the Retirement Savings Accounts Act 1997;
(e)-(f) (Omitted) (g) any right of the bankrupt to recover damages or compensation:
(i) for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; or
and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person;
(ii) in respect of the death of the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt;
Note:
See also subsection 5(6).
(ga) a payment under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 to the bankrupt (whether before or after he or she became a bankrupt and whether or not he or she is the person who suffered the sexual abuse to which the payment relates); (gb) a payment under the scheme known as the Territories Stolen Generations Redress Scheme to the bankrupt (whether before or after he or she became a bankrupt);(h) (Omitted by No 143 of 1992, Sch.) (k) amounts paid to the bankrupt under a rural support scheme prescribed for the purposes of this paragraph; (l) amounts paid to the bankrupt under a rural support scheme prescribed for the purposes of this paragraph, where the amounts are paid in circumstances prescribed for the purposes of this paragraph; (m) prescribed amounts paid to the bankrupt under a rural support scheme prescribed for the purposes of this paragraph; (ma) prescribed amounts paid to the bankrupt under a rural support scheme prescribed for the purposes of this paragraph, where the amounts are paid in circumstances prescribed for the purposes of this paragraph; (mb) amounts paid to the bankrupt by the Commonwealth as compensation in relation to the loss of:
(i) an amount covered by paragraph (k), (l), (m) or (ma); or
(ii) property purchased or acquired wholly or partly with such an amount;
(mc) (Repealed by No 57 of 2007)
(md) (Repealed by No 57 of 2007) (n) property to which, by virtue of subsection (3), this paragraph applies;
(o) (Omitted by No 119 of 1987, s 43(3).) (p) amounts paid to the bankrupt under subsection (2C) or (4); (q) any property that, under an order under Part VIII of the Family Law Act 1975, the trustee is required to transfer to the spouse, or a former spouse, of the bankrupt; (r) any property that, under an order under Part VIIIAB or VIIIC of the Family Law Act 1975, the trustee is required to transfer to a former de facto partner of the bankrupt; (ra) any property that, under an order under Part 5A of the Family Court Act 1997 (WA), the trustee is required to transfer to a former de facto partner of the bankrupt; (s) the bankrupt's property that is:
(i) a support for the bankrupt that was funded under the National Disability Insurance Scheme (as defined in the National Disability Insurance Scheme Act 2013); or
(ii) an NDIS amount (as defined in that Act).
116(2A)
(Omitted by No 44 of 1996, Sch 1, Pt 1(201).)
116(2B)
Where, because of a resolution passed by the creditors, or an order made by the Court, under paragraph (2)(b), (c) or (ca), property that is vested in the trustee ceases at a particular time to be property divisible among the creditors, then, immediately after that time: (a) the property revests in the bankrupt; (b) the trustee is discharged from the trustee's liabilities in respect of the property; and (c) the bankrupt becomes subject to those liabilities.
116(2C)
Where: (a) property used by the bankrupt primarily as a means of transport is vested in the trustee; and (b) as at the time when the trustee realises that property:
(i) no other property has remained vested in the bankrupt by virtue of paragraph (2)(ca); and
(ii) no other property has, because of a determination by the creditors under paragraph (2)(ca), revested in the bankrupt by virtue of subsection (2B);
the trustee shall pay to the bankrupt so much of the proceeds of realising that property as, when added to the aggregate of the amounts (if any) that the trustee has previously paid to the bankruptunder this subsection, does not exceed the prescribed amount within the meaning of paragraph (2)(ca).
116(2D)
In subsections (3) and (4):
exempt loan money
, in relation to a particular time, means so much of the principal sum of a loan to the bankrupt, or to the bankrupt and another person or other persons, as was repaid, before that time, out of exempt money.
exempt money
means money of any of the following kinds:
(a) an amount to which subsection (1) does not extend because of subparagraph (2)(d)(ii) or (iv);
(b) damages or compensation of a kind referred to in paragraph (2)(g);
(c) amounts covered by paragraph (2)(k), (l), (m), (ma) or (mb).
outlay
, in relation to property, in relation to a particular time, means all of the following:
(a) the money paid for the purchase, or used in the acquisition, of the property;
(b) the money paid before that time in respect of the extensions, alterations and improvements, if any, of the property constructed or made since that purchase or acquisition.
protected money
, in relation to a particular time, means:
(a) exempt money; or
(b) exempt loan money in relation to that time.
116(2E)
Nothing in this Act or the Legislation Act 2003 prevents regulations made for the purposes of paragraph (2)(k), (l), (m) or (ma) from applying to amounts paid before the regulations commence.
116(2F)
Regulations made for the purposes of paragraph (2)(k), (l), (m) or (ma) may make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.
116(3)
Where, at any time, the whole, or substantially the whole, of the money paid for the purchase, or used in the acquisition, of particular property is protected money, paragraph (2)(n) applies to the property.
116(4)
Where, as at the time when the trustee realises particular property to which paragraph (2)(n) does not apply, the outlay in relation to the property is in part protected money and in part other money, the trustee shall pay to the bankrupt so much of the proceeds of realising the property as can fairly be attributed to that protected money.
116(5)
(Repealed by No 15 of 2007)
116(6)
(Repealed by No 15 of 2007)
116(7)
(Repealed by No 15 of 2007)
116(8)
(Repealed by No 15 of 2007)
116(8A)
(Repealed by No 15 of 2007)
116(9)
(Repealed by No 15 of 2007)
SECTION 117 POLICIES OF INSURANCE AGAINST LIABILITIES TO THIRD PARTIES 117(1)
Where: (a) a bankrupt is or was insured under a contract of insurance against liabilities to third parties; and (b) a liability against which he or she is or was so insured has been incurred (whether before or after he or she became a bankrupt);
the right of the bankrupt to indemnity under the policy vests in the trustee and any amount received by the trustee from the insurer under the policy in respect of the liability shall, if the liability has not already been satisfied, be paid in full forthwith to the third party to whom it has been incurred.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 117(1) of the Act is modified by substituting "a deceased debtor" for "a bankrupt" in para (a), substituting "which the deceased debtor" for "which he or she" and "at any time" for "(whether before or after he or she became a bankrupt)" in para (b), substituting "the deceased debtor" for "the bankrupt" and substituting "in the trustee of the deceased debtor's estate being administered under Part XI" for "in the trustee".]
117(2)
Subsection (1) does not limit the rights of the third party in respect of any balance due to him or her after the payment referred to in that subsection has been made.
117(3)
This section applies notwithstanding any agreement to the contrary, whether entered into before or after the commencement of this Act.
SECTION 118 EXECUTION BY CREDITOR AGAINST PROPERTY OF DEBTOR WHO BECOMES A BANKRUPT ETC. 118(1)
Subject to subsection (2), where: (a) a creditor has, within 6 months before the presentation of a petition, or after the presentation of a petition, against a debtor:
(i) received moneys as a result of execution having been issued by him or her, or on his or her behalf, against property of the debtor, being moneys that are the proceeds of the sale of property of the debtor that has been sold in pursuance of the process or that were seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of the process; or
(b) the debtor subsequently becomes a bankrupt on, or by virtue of the presentation of, the petition;
(ii) received moneys as a result of the attachment by him or her, or on his or her behalf, of a debt due to the debtor; and
the creditor shall pay to the trustee of the estate of the bankrupt the amount by which the amount of those moneys exceeds the taxed costs of the execution or attachment, as the case may be.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 118(1) of the Act is modified by substituting "the making of an order under Part XI, or after the making of such an order, for the administration of the estate of a deceased" for "the presentation of a petition, or after the presentation of a petition, against a" in para (a), omitting "and" in para (a)(ii), repealing para (b) and substituting "the deceased debtor" for "the bankrupt".]
118(2)
Subsection (1) does not apply in relation to a creditor who has received moneys as a result of execution having been issued by him or her, or on his or her behalf, against property of a debtor, or as a result of the attachment by him or her, or on his or her behalf, of a debt due to the debtor, in respect of any liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section).
118(3)
Where a creditor has, in pursuance of subsection (1), paid the proceeds of the sale of property or other moneys to the trustee of the estate of a bankrupt, the creditor may prove in the bankruptcy for his or her debt as an unsecured creditor as if the execution or attachment, as the case may be, had not taken place.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 118(3) of the Act is modified by substituting "a deceased debtor" for "a bankrupt" and "administration of the estate" for "bankruptcy".]
118(4)
Where: (a) a creditor has, in pursuance of subsection (1), paid to the trustee of the estate of a bankrupt the proceeds of the sale of property or other moneys that were received as a result of execution having been issued by him or her, or on his or her behalf, against property of the bankrupt or of the attachment by him or her, or on his or her behalf, of a debt due to the bankrupt; and (b) that property or debt would not have been property divisible amongst the creditors of the bankrupt if the bankrupt had become a bankrupt immediately before the execution was issued or the debt was attached, as the case may be;
the trustee shall pay those proceeds or other moneys to the bankrupt or to a person authorized by the bankrupt in writing for the purpose.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 118(4) of the Act is modified by substituting the subsection:
]
118(4)
Where:
(a) a creditor has, in pursuance of subsection (1), paid to the trustee of the estate of a deceased debtor the proceeds of the sale of property or other moneys that were received as a result of execution having been issued by the creditor, or on the creditor's behalf, against property of the deceased debtor or of the attachment by the creditor, or on the creditor's behalf, of a debt due to the deceased debtor; and
(b) that property or debt would not have been property divisible amongst the creditors of the deceased debtor if the estate of the deceased debtor had become subject to administration under Part XI immediately before the execution was issued or the debt was attached, as the case may be;the trustee must pay those proceeds or other moneys to the legal personal representative of the deceased debtor or to a person authorised by the legal personal representative in writing for the purpose.
118(5)
Subject to this section, where notice in writing of the presentation of a creditor's petition against a debtor is given to a creditor: (a) the creditor shall not take any action or further action, as the case may be, to attach a debt due to the debtor until the petition has been dealt with by the Court or has lapsed; and (b) if a debt due to the debtor has been attached by the creditor:
(i) the creditor shall forthwith give a written notice of the presentation of the petition to the person liable to pay that debt; and
(ii) the attachment of the debt is suspended until the petition has been dealt with by the Court or has lapsed.
118(6)
Subject to this section, where notice in writing of the reference to the Court of a debtor's petition against a debtor is given to a creditor: (a) the creditor shall not take any action or further action, as the case may be, to attach a debt due to the debtor until the Court has dealt with the petition; and (b) if a debt due to the debtor has been attached by the creditor:
(i) the creditor shall forthwith give a written notice of the presentation of the petition to the person liable to pay that debt; and
(ii) the attachment of the debt is suspended until the Court has dealt with the petition.
118(7)
Nothing in this section shall be taken to prevent a person liable to pay a debt to a debtor from paying the debt or a part of the debt to the debtor during the suspension, in accordance with subsection (5) or (6), of an attachment of that debt.
118(8)
A creditor who contravenes, or fails to comply with, subsection (5) or (6) is guilty of contempt of court.
118(9)
Subject to subsection (10), where: (a) a creditor has, within 6 months before the presentation of a petition, or after the presentation of a petition, against a debtor obtained a charge or charging order against property of the debtor; and (b) the debtor subsequently becomes a bankrupt on, or by virtue of the presentation of, the petition;
the charge or charging order, as the case may be, is void as against the trustee in the bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 118(9) of the Act is modified by substituting the subsection:
]
118(9)
Subject to subsection (10), if a creditor has, within 6 months before the making of an order under Part XI, or after the making of such an order, for the administration of the estate of a deceased debtor obtained a charge or charging order against property of the deceased debtor, the charge or charging order, as the case may be, is void as against the trustee of the estate of the deceased debtor.
118(10)
Subsections (5), (6) and (9) do not apply in relation to the attachment of a debt due to a debtor, or to a charge or charging order against property of a debtor, in respect of any liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section).
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 118(10) of the Act is modified by substituting "a deceased debtor's estate" for "a debtor" (wherever occurring) and "the deceased debtor" for "the debtor".]
118(11)
Notwithstanding anything contained in this Act, a person who purchases property in good faith: (a) under a sale by a sheriff in consequence of the issue of execution against property of a debtor who, after the sale, becomes a bankrupt; or (b) under a sale in consequence of the enforcement by a creditor of a charge or a charging order against property of a debtor who, after the sale, becomes a bankrupt;
acquires a good title to it as against the trustee of the estate of the bankrupt.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 118(11) of the Act is modified by substituting "who dies and whose estate becomes, or of a deceased debtor's estate that becomes, after the sale, subject to an administration order under Part XI" for "who, after the sale, becomes a bankrupt" in para (a) and (b) and omitting "of the bankrupt".]
118(12)
In this section:
charge
means a charge created by a law of the Commonwealth or of a State or Territory upon registration of a judgment in any registry.
charging order
means a charging order made by a court in respect of a judgment.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 118(12) of the Act is modified by inserting the definition:
]legal personal representative
, of a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
SECTION 119 DUTIES OF SHERIFF AFTER RECEIVING NOTICE OF PRESENTATION OF PETITION ETC. 119(1)
Subject to this section, where notice in writing of the presentation of a creditor's petition against a debtor is given to a sheriff, the sheriff: (a) shall refrain:
(i) from taking any action to sell property of the debtor in pursuance of any process of execution issued by or on behalf of a creditor; and
(b) shall not:
(ii) from taking any action on behalf of a creditor to attach a debt due to the debtor; and
(i) pay to the creditor by whom, or on whose behalf, the process of execution was issued, or to any person on his or her behalf, the proceeds of the sale of property of the debtor that has been sold in pursuance of any such process or any moneys seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of any such process; or
(ii) pay to the creditor, or to any person on his or her behalf, any moneys received as a result of the attachment of the debt due to the debtor;
until the petition has been dealt with by the Court or has lapsed.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119(1) of the Act is modified by substituting "for an order for the administration of a deceased debtor's estate" for "against a debtor" and "estate" for "debtor" (wherever occurring) in para (a) and (b).]
119(2)
Subject to this section, where notice in writing of the reference to the Court of a debtor's petition against a debtor is given to a sheriff, the sheriff: (a) shall refrain:
(i) from taking any action to sell property of the debtor in pursuance of any process of execution issued by or on behalf of a creditor; and
(b) shall not:
(ii) from taking any action on behalf of a creditor to attach a debt due to the debtor; and
(i) pay to the creditor by whom, or on whose behalf, the process of execution was issued, or to any person on his or her behalf, the proceeds of the sale of property of the debtor that has been sold in pursuance of any such process or any moneys seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of any such process; or
(ii) pay to the creditor, or to any person on his or her behalf, any moneys received as a result of the attachment of the debt due to the debtor;
until the Court has dealt with the petition.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119(2) of the Act is modified by substituting "the presentation to the Court of a petition by a person administering the estate of a deceased debtor for an order for the administration of the estate" for "the reference to the Court of a debtor's petition against a debtor" and "estate" for "debtor" (wherever occurring) in para (a) and (b).]
119(3)
Where notice of the presentation of a creditor's petition against a debtor has been given under subsection (1) to a sheriff or notice of the reference to the Court of a debtor's petition against a debtor has been given under subsection (2) to a sheriff, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the sheriff a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (1) or (2), as the case may be, ceases to apply in relation to the process of execution or attachment, as the case may be.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119(3) of the Act is modified by substituting "a petition has been given under subsection (1) or" for "a creditor's petition against a debtor has been given under subsection (1) to a sheriff or notice of the reference to the Court of a debtor's petition against a debtor has been given under subsection" and "the estate" for "the debtor" (wherever occurring).]
119(4)
Subject to this section, where notice in writing of the presentation of a creditor's petition against a debtor is given to the registrar or other appropriate officer of a court: (a) to which the proceeds of the sale of property of the debtor or other moneys have been paid by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or (b) to which moneys have been paid in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor;
any of those proceeds or moneys not paid out of court shall not be paid to the creditor or to any person on his or her behalf until the petition has been dealt with by the Court or has lapsed.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119(4) of the Act is modified by substituting "for an order for the administration of a deceased debtor's estate" for "against a debtor" and "estate" for "debtor" (wherever occurring) in para (a) and (b).]
119(5)
Subject to this section, where notice in writing of the reference to the Court of a debtor's petition against a debtor is given to the registrar or other appropriate officer of a Court: (a) to which the proceeds of the sale of property of the debtor or other moneys have been paid by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or (b) to which moneys have been paid in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor;
any of those proceeds or moneys not paid out of court shall not be paid to the creditor or to any person on his or her behalf until the Court has dealt with the petition.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119(5) of the Act is modified by substituting "the presentation to the Court of a petition by a person administering the estate of a deceased debtor for an order for the administration of the estate" for "the reference to the Court of a debtor's petition against a debtor" and "estate" for "debtor" (wherever occurring) in para (a) and (b).]
119(6)
Where notice of the presentation of a creditor's petition against a debtor has been given under subsection (4) to the registrar or other appropriate officer of any court or notice of the reference to the Court of a debtor's petition against a debtor has been given under subsection (5) to the registrar or other appropriate officer of any court, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the registrar or other officer a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (4) or (5), as the case may be, ceases to apply in relation to the process of execution or attachment, as the case may be.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119(6) of the Act is modified by substituting "for an order for the administration of a deceased debtor's estate" for "against a debtor" (first occurring), "the presentation to the Court of a petition by a person administering the estate of a deceased debtor for an order for the administration of the estate" for "the reference to the Court of a debtor's petition against a debtor" and "the estate" for "the debtor" (wherever occurring).]
119(7)
Where a sheriff, in pursuance of subsection (1) or (2), refrains from taking action to sell property of a debtor (being real property), the debtor becomes a bankrupt and the property vests in the trustee in the bankruptcy, the costs of the execution are a first charge on that property.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119(7) of the Act is modified by substituting "a deceased debtor's estate" for "a debtor" and "the estate is administered under Part XI" for "the debtor becomes a bankrupt".]
119(8)
A failure by a sheriff to comply with a provision of this section does not affect the title of a person who purchases property of a bankrupt in good faith under a sale by the sheriff in pursuance of a process of execution issued by or on behalf of a creditor.
SECTION 119A DUTIES OF SHERIFF AFTER RECEIVING NOTICE OF BANKRUPTCY ETC. 119A(1)
Where a debtor has become a bankrupt (whether on a creditor's petition or otherwise and whether before or after the commencement of this section), the trustee may give to the sheriff or to the registrar or other appropriate officer of a court, notice in writing of that fact and, upon the giving of the notice: (a) the sheriff shall deliver or pay to the trustee:
(i) any property of the bankrupt in his or her possession under a process of execution issued by or on behalf of a creditor;
(ii) any proceeds of the sale of property of the bankrupt or other moneys in his or her possession, being proceeds of the sale of property sold, whether before or after the bankrupt became a bankrupt, in pursuance of any such process or moneys seized, or paid to avoid seizure or sale of property of the bankrupt, whether before or after the bankrupt became a bankrupt, in pursuance of any such process; and
(b) the registrar or other officer of the court shall pay to the trustee:
(iii) any moneys in his or her possession as a result of the attachment, by or on behalf of a creditor, of a debt due to the bankrupt; or
(i) any proceeds of the sale of property of the bankrupt or other moneys in court, being proceeds of sale or other moneys paid into court, whether before or after the bankrupt became a bankrupt, by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the bankrupt; and
(ii) any moneys in court that have been paid into court, whether before or after the bankrupt became a bankrupt, in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the bankrupt;
as the case requires.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119A(1) of the Act is modified by substituting "has died, and the debtor's estate has become subject to administration under Part XI," for "has become a bankrupt" and substituting para (a) and (b):
]
(a) the sheriff must deliver or pay to the trustee:
(i) any property of the estate in the sheriff's possession under a process of execution issued by or on behalf of a creditor; and
(ii) any proceeds of the sale of property of the estate or other moneys in the sheriff's possession, being proceeds of the sale of property sold, whether before or after the debtor died, in pursuance of any such process or moneys seized, or paid to avoid seizure or sale of property of the debtor or estate, whether before or after the debtor died, in pursuance of any such process; and
(iii) any moneys in the sheriff's possession as a result of the attachment, by or on behalf of a creditor, of a debt due to the estate; or
(b) the registrar or other officer of the court must pay to the trustee:
(i) any proceeds of the sale of property of the estate or other moneys in court, being proceeds of sale or other moneys paid into court, whether before or after the debtor died, by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the estate; and
(ii) any moneys in court that have been paid into court, whether before or after the debtor died, in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the estate;
119A(2)
Where property is, or the proceeds of the sale of property or other moneys are, required by subsection (1) to be delivered or paid to the trustee, the costs of the execution or attachment, as the case may be, are a first charge on that property or those proceeds of sale or other moneys, as the case may be.
119A(3)
For the purpose of giving effect to the charge referred to in subsection (2), the sheriff, registrar or other officer of a court may retain on behalf of the creditor entitled to the benefit of the charge, such amount from the proceeds of sale or other moneys referred to in that subsection as he or she thinks necessary for the purpose.
119A(4)
Where a sheriff, registrar or other officer of a court has, in pursuance of subsection (1), delivered property or paid moneys to the trustee, the creditor who issued the process of execution or instituted the attachment proceedings, or on whose behalf the process was issued or the proceedings instituted, as the case may be, may prove in the bankruptcy for his or her debt as an unsecured creditor as if the execution or attachment, as the case may be, had not taken place.
119A(5)
Where: (a) a sheriff, registrar or other officer of a court has, in pursuance of subsection (1), delivered to the trustee property that was seized, or paid to the trustee the proceeds of the sale of property or other moneys that were received, as a result of the issue of execution against property of a bankrupt or the attachment of a debt due to a bankrupt; and (b) that property or debt would not have been property divisible amongst the creditors of the bankrupt if the bankrupt had become a bankrupt immediately before the execution was issued or the debt attached, as the case may be;
the trustee shall deliver that property, or pay those proceeds or other moneys, as the case requires, to the bankrupt or to a person authorized by the bankrupt in writing for the purpose.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119A(5) of the Act is modified by repealing the subsection.]
119A(6)
Where: (a) property has been delivered by a sheriff, or the proceeds of the sale of property or other moneys have been paid by a sheriff, registrar or other officer of a court, to the trustee of the estate of a bankrupt in pursuance of subsection (1); and (b) the property was in the possession of the sheriff, or the proceeds of the sale of the property or the other moneys were in the possession of the sheriff or paid into court, as the case may be, under or in pursuance of a process of execution issued, or proceedings to attach a debt instituted, by or on behalf of a creditor in respect of a liability of the bankrupt under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section);
the trustee shall deliver that property, or pay those proceeds or other moneys, as the case requires, to that creditor.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119A(6) of the Act is modified by substituting "deceased debtor" for "bankrupt" in para (a) and "estate" for "bankrupt" in para (b).]
119A(7)
A failure by a sheriff to comply with a provision of this section does not affect the title of a person who purchases property of a bankrupt in good faith under a sale by the sheriff in pursuance of a process of execution issued by or on behalf of a creditor.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 119A(7) of the Act is modified by substituting "the estate of a deceased debtor" for "a bankrupt".]
SECTION 120 UNDERVALUED TRANSACTIONS
Transfers that are void against trustee
120(1)
A transfer of property by a person who later becomes a bankrupt (the transferor ) to another person (the transferee ) is void against the trustee in the transferor's bankruptcy if: (a) the transfer took place in the period beginning 5 years before the commencement of the bankruptcy and ending on the date of the bankruptcy; and (b) the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property.
Note:
For the application of this section where consideration is given to a third party rather than the transferor, see section 121A.
Exemptions
120(2)
Subsection (1) does not apply to: (a) a payment of tax payable under a law of the Commonwealth or of a State or Territory; or (b) a transfer to meet all or part of a liability under a maintenance agreement or a maintenance order; or (c) a transfer of property under a debt agreement; or (d) a transfer of property if the transfer is of a kind described in the regulations.
120(3)
Despite subsection (1), a transfer is not void against the trustee if: (a) in the case of a transfer to a related entity of the transferor:
(i) the transfer took place more than 4 years before the commencement of the bankruptcy; and
(b) in any other case:
(ii) the transferee proves that, at the time of the transfer, the transferor was solvent; or
(i) the transfer took place more than 2 years before the commencement of the bankruptcy; and
(ii) the transferee proves that, at the time of the transfer, the transferor was solvent.
Rebuttable presumption of insolvency
120(3A)
For the purposes of subsection (3), a rebuttable presumption arises that the transferor was insolvent at the time of the transfer if it is established that the transferor: (a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor's business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them.
Refund of consideration
120(4)
The trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee.
120(5) What is not consideration.
For the purposes of subsections (1) and (4), the following have no value as consideration:
(a) the fact that the transferee is related to the transferor; (b) if the transferee is the spouse or de facto partner of the transferor - the transferee making a deed in favour of the transferor; (c) the transferee's promise to marry, or to become the de facto partner of, the transferor; (d) the transferee's love or affection for the transferor; (e) if the transferee is the spouse, or a former spouse, of the transferor - the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975; (f) if the transferee is a former de facto partner of the transferor - the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975 or the Family Court Act 1997 (WA).Protection of successors in title
120(6)
This section does not affect the rights of a person who acquired property from the transferee in good faith and by giving consideration that was at least as valuable as the market value of the property.
Meaning of transfer of property and market value
120(7)
For the purposes of this section: (a) transfer of property includes a payment of money; and (b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and (c) the market value of property transferred is its market value at the time of the transfer.
Transfers that are void
121(1)
A transfer of property by a person who later becomes a bankrupt (the transferor ) to another person (the transferee ) is void against the trustee in the transferor's bankruptcy if: (a) the property would probably have become part of the transferor's estate or would probably have been available to creditors if the property had not been transferred; and (b) the transferor's main purpose in making the transfer was:
(i) to prevent the transferred property from becoming divisible among the transferor's creditors; or
(ii) to hinder or delay the process of making property available for division among the transferor's creditors.
Note:
For the application of this section where consideration is given to a third party rather than the transferor, see section 121A.
Showing the transferor's main purpose in making a transfer
121(2)
The transferor's main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent.
Other ways of showing the transferor's main purpose in making a transfer
121(3)
Subsection (2) does not limit the ways of establishing the transferor's main purpose in making a transfer.
121(4) Transfer not void if transferee acted in good faith.
Despite subsection (1), a transfer of property is not void against the trustee if:
(a) the consideration that the transferee gave for the transfer was at least as valuable as the market value of the property; and (b) the transferee did not know, and could not reasonably have inferred, that the transferor's main purpose in making the transfer was the purpose described in paragraph (1)(b); and (c) the transferee could not reasonably have inferred that, at the time of the transfer, the transferor was, or was about to become, insolvent.Rebuttable presumption of insolvency
121(4A)
For the purposes of this section, a rebuttable presumption arises that the transferor was, or was about to become, insolvent at the time of the transfer if it is established that the transferor: (a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor's business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them.
Refund of consideration
121(5)
The trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee.
What is not consideration
121(6)
For the purposes of subsections (4) and (5), the following have no value as consideration: (a) the fact that the transferee is related to the transferor; (b) if the transferee is the spouse or de facto partner of the transferor - the transferee making a deed in favour of the transferor; (c) the transferee's promise to marry, or to become the de facto partner of, the transferor; (d) the transferee's love or affection for the transferor; (e) if the transferee is the spouse, or a former spouse, of the transferor - the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975;
(f) if the transferee is a former de facto partner of the transferor - the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975 or the Family Court Act 1997 (WA).
Exemption of transfers of property under debt agreements
121(7)
This section does not apply to a transfer of property under a debt agreement.
Protection of successors in title
121(8)
This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property.
Meaning of transfer of property and market value
121(9)
For the purposes of this section:
(a) transfer of property includes a payment of money; and (b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and (c) the market value of property transferred is its market value at the time of the transfer.This section applies if:
(a) a person who later becomes a bankrupt (the transferor ) transfers property to another person (the transferee ); and
(b) the transferee gives some or all of the consideration for the transfer to a person (a third party ) other than the transferor.
121A(2)
Sections 120 and 121 apply as if the giving of the consideration to the third party were a transfer by the transferor of the property constituting the consideration.
121A(3)
If the giving of the consideration to the third party is void against the trustee in the transferor's bankruptcy under section 120 or 121, the trustee has the same rights to recover the property constituting the consideration as the trustee would have if the giving of the consideration had actually been a transfer by the transferor of the property constituting the consideration.
SECTION 122 AVOIDANCE OF PREFERENCES 122(1)
A transfer of property by a person who is insolvent (the debtor ) in favour of a creditor is void against the trustee in the debtor's bankruptcy if the transfer: (a) had the effect of giving the creditor a preference, priority or advantage over other creditors; and (b) was made in the period that relates to the debtor, as indicated in the following table.
| Periods during which transfers of property may be void | ||
| Description of petition leading to debtor's bankruptcy | Period during which the transfer was made | |
| 1 | Creditor's petition | Period beginning 6 months before the presentation of the petition and ending immediately before the date of the bankruptcy of the debtor |
| 2 | Debtor's petition presented when at least one creditor's petition was pending against a petitioning debtor or a member of a partnership against which the debtor's petition was presented | Period beginning on the commencement of the debtor's bankruptcy and ending immediately before the date of the bankruptcy of the debtor |
| 3 | Debtor's petition presented in any other circumstances | Period beginning 6 months before the presentation of the petition and ending immediately before the date of the bankruptcy of the debtor |
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 122(1) of the Act is modified by substituting "insolvent and who subsequently dies (the deceased debtor )" for "insolvent (the debtor )", substituting "of the deceased debtor's estate being administered under Part XI" for "in the debtor's bankruptcy" and substituting para (b):
]
(b) was made in the period beginning 6 months before the presentation of the petition for an order for the administration of the estate and ending immediately before the day of the order.
122(1A)
Subsection (1) applies in relation to a transfer of property by the debtor in favour of a creditor: (a) whether or not the liability of the debtor to the creditor is his or her separate liability or is a liability with another person or other persons jointly; and (b) whether or not the property transferred is the debtor's own property or is the property of the debtor and one or more other persons.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 122(1A) of the Act is modified by substituting "by the deceased debtor before the debtor's death" for "by the debtor", inserting "deceased" before "debtor" in para (a) and (b) and inserting "deceased" before "debtor's" in para (b).]
122(2)
Nothing in this section affects: (a) the rights of a purchaser, payee or encumbrancer in the ordinary course of business who acted in good faith and who gave consideration at least as valuable as the market value of the property; or (b) the rights of a person who is making title through or under a creditor of the debtor in good faith and who gave consideration at least as valuable as the market value of the property; or (c) a conveyance, transfer, charge, payment or obligation of the debtor executed, made or incurred under or in pursuance of a maintenance agreement or maintenance order; or (d) a transfer of property under a debt agreement.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 122(2) of the Act is modified by inserting "or the estate of the deceased debtor" after "debtor" in para (b).]
122(3)
The burden of proving the matters referred to in subsection (2) lies upon the person claiming to have the benefit of that subsection.
122(4)
For the purposes of this section: (a) a transfer of property is taken to have been made in favour of a creditor if it is made in favour of a person in trust for the creditor; and (b) a payment of tax, or of any other amount payable to the Commonwealth, or to the Commissioner of Taxation, under or because of an Act of which the Commissioner has the general administration, is taken to be made for consideration equal in value to the payment and in the ordinary course of business; and (c) a creditor shall be deemed not to be a purchaser, payee or encumbrancer in good faith if the transfer of property was made under such circumstances as to lead to the inference that the creditor knew, or had reason to suspect:
(i) that the debtor was unable to pay his or her debts as they became due from his or her own money; and
(ii) that the effect of the transfer would be to give him or her a preference, priority or advantage over other creditors.
122(4A)
A reference in this section (other than subsection (5)) to a creditor of the debtor shall be read as including a reference to a person who would be a creditor of the debtor in relation to a contract, agreement, transaction or other dealing if the contract, agreement, transaction or other dealing were not, in whole or in part, void or unenforceable, or had not been voided in whole or in part, by or under a law of the Commonwealth or of a State or Territory.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 122(4A) of the Act is modified by inserting "or the estate of the deceased debtor" after "debtor" (wherever occurring).]
122(5)
If a transfer of property is set aside by the trustee in a bankruptcy as a result of this section, the creditor to whom the property was transferred may prove in the bankruptcy as if the transfer had notbeen made.
122(6)
(Omitted by No 44 of 1996, Sch 1, Pt 1(220).)
122(7)
In this section:
tax
means tax (however described) payable under a law of the Commonwealth or of a State or Territory, and includes, for example, a levy, a charge, and municipal or other rates.
122(8)
For the purposes of this section: (a) transfer of property includes a payment of money; and (b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and (c) the market value of property transferred is its market value at the time of the transfer.
SECTION 123 PROTECTION OF CERTAIN TRANSFERS OF PROPERTY AGAINST RELATION BACK ETC. 123(1)
Subject to sections 118 to 122 (inclusive) and sections 128B and 128C, nothing in this Act invalidates, in any case where a debtor becomes a bankrupt: (a) a payment by the debtor to any of his or her creditors; (b) a conveyance, transfer or assignment by the debtor for market value; (c) a contract, dealing or other transaction by or with the debtor for market value; or (d) any transactionto the extent of a present advance made by an existing creditor;
if:
(e) the transaction took place before the day on which the debtor became a bankrupt; (f) the person, other than the debtor, with whom it took place, did not, at the time of the transaction, have notice of the presentation of a petition against the debtor; and (g) the transaction was in good faith and in the ordinary course of business.[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 123(1) of the Act is modified by substituting "has died, and the debtor's estate has become subject to administration under Part XI" for "becomes a bankrupt", inserting "before the debtor died" after "debtor" in para (a) to (c) and substituting "on or before the day on which the debtor died" for "before the day on which the debtor became a bankrupt" in para (e).]
123(2)
The burden of proving the matters referred to in paragraphs (1)(e), (f) and (g) in relation to a transaction lies upon the person who relies on the validity of the transaction.
123(3)
For the purposes of subsection (1), a transaction shall not be deemed not to have been in good faith and in the ordinary course of business by reason only that, at the time of the transaction, the person, other than the debtor, with whom it took place had notice of the commission of an act of bankruptcy by the debtor.
123(4)
Nothing in this Act invalidates a payment by a debtor, on or before the date on which he or she became a bankrupt, of, or in respect of, a penalty or fine imposed on him or her by a court in respect of an offence against a law, whether a law of the Commonwealth or not.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 123(4) of the Act is modified by inserting "deceased" before "debtor" and substituting "died" for "became a bankrupt".]
123(5)
(Omitted by No 32 of 1993, s 29, Sch 1.)
[ CCH Note: No 32 of 1993, s 30(2), provides:
]Despite the repeal of subsection 123(5) of the Bankruptcy Act 1966, that subsection continues to apply in relation to a deduction in relation to which section 221P or 221YU of the Income Tax Assessment Act 1936 applies.
123(6)
Subject to sections 121, 128B and 128C, nothing in this Act invalidates, in any case where a debtor becomes a bankrupt, a conveyance, transfer, charge, disposition, assignment, payment or obligation executed, made or incurred by the debtor, before the day on which the debtor became a bankrupt, under or in pursuance of a maintenance agreement or maintenance order.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 123(6) of the Act is modified by substituting "a deceased debtor before the debtor's death became" for "a debtor becomes" and inserting "deceased" before "debtor" (second and third occurring).]
123(7)
In this section:
payment
includes the drawing, making or indorsing of a bill of exchange, cheque or promissory note.
transaction
includes payment, delivery, conveyance, transfer, assignment, contract or dealing.
SECTION 124 PROTECTION OF CERTAIN PAYMENTS TO BANKRUPT ETC. 124(1)
Notwithstanding anything contained in this Act, a payment of money or delivery of property (including a security or a negotiable instrument) to, or in accordance with the order or direction of, a person who becomes, or has become, a bankrupt or a person claiming by assignment from him or her is a good discharge to the person paying the money or delivering the property: (a) if, in the case of a payment or delivery made before the day on which the first-mentioned person becomes a bankrupt - it is made in good faith and in the ordinary course of business; or (b) if, in the case of a payment or delivery made on or after the day on which the first-mentioned person became a bankrupt - it is made in good faith, in the ordinary course of business and without negligence.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 124(1) of the Act is modified by substituting "has died, and the person's estate has become subject to administration under Part XI" for "becomes, or has become, a bankrupt", inserting "on or" after "made" in para (a), substituting "dies" for "becomes a bankrupt" in para (a), omitting "on or" in para (b) and substituting "died" for "became a bankrupt" in para (b).]
124(2)
The burden of proving the matters referred to in subsection (1) lies upon the person who relies on the validity of the payment or delivery of property.
124(3)
For the purposes of this section, a payment or delivery of property shall not be deemed not to have been made in good faith and in the ordinary course of business by reason only that, at the time of the payment or delivery, the person by whom it was made: (a) knew or had reason to suspect that the person to whom, or in accordance with whose order or direction, it was made was unable to pay his or her debts as they became due from his or her own money; or (b) had notice of the commission of an act of bankruptcy by that person or of the presentation of a creditor's petition against that person.
SECTION 125 CERTAIN ACCOUNTS OF UNDISCHARGED BANKRUPT 125(1)
Where a prescribed organization has ascertained that a person having an account with it is an undischarged bankrupt, then, unless the prescribed organization is satisfied that the account is on behalf of some other person, it shall forthwith inform the trustee, in writing, of the existence of the account and, subject to subsection (2), shall not make any further payments out of the account, except under an order of the Court of which a copy has been served on it or in accordance with written instructions from the trustee.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 125(1) of the Act is modified by substituting "deceased and that the person's estate is being administered under Part XI" for "an undischarged bankrupt".]
125(2)
If, within 1 month from the date on which the prescribed organization informed the trustee of the existence of the account, a copy of an order of the Court in respect of the account has not been served on the prescribed organization and it has not received written instructions from the trustee within that period in respect of the account, the prescribed organization is entitled to act without regard to any claim or right the trustee may have in respect of the account.
125(2A)
This section does not apply in relation to an account held by a bankrupt if the account is a supervised account in relation to the bankrupt.
125(3)
In this section:
bank
(Repealed by No 11 of 2016)
building society
(Repealed by No 44 of 1999)
(a) a society registered or incorporated as a co-operative housing society under a law of a State or Territory; or
(b) any other society whose principal business consists of borrowing moneys from its members and lending those moneys to its members and that is registered or incorporated under a law of a State or Territory relating to co-operative societies.
credit union
(Repealed by No 44 of 1999)
prescribed organization
means a bank, a co-operative society or any other financial organization of a kind prescribed by the regulations for the purposes of this definition.
supervised account
has the meaning given by section 139ZIB.
SECTION 126 DEALINGS WITH UNDISCHARGED BANKRUPT IN RESPECT OF AFTER-ACQUIRED PROPERTY 126(1)
A transaction by a bankrupt with a person dealing with him or her in good faith and for valuable consideration in respect of property acquired by the bankrupt on or after the day on which he or she became a bankrupt is, if completed before any intervention by the trustee, valid against the trustee, and any estate or interest in that property which, by virtue of this Act, is vested in the trustee shall determine and pass in such manner and to such extent as is necessary for giving effect to the transaction.
126(2)
For the purposes of subsection (1), the receipt of any money, security or negotiable instrument from, or in accordance with the order or direction of, a bankrupt by his or her banker, and any payment of money or delivery of a security or negotiable instrument made to, or in accordance with the order or direction of, a bankrupt by his or her banker, shall be deemed to be a transaction by the bankrupt with that banker dealing with him or her for valuable consideration.
126(3)
The lodging by the trustee of a caveat having the effect of forbidding the registration of an instrument affecting any land, or an estate or interest in any land, shall be deemed to be a sufficient intervention for the purposes of this section in relation to a transaction in respect of that land or that estate or interest in land.
126(4)
In this section:
banker
means an ADI or any other banker.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 126 of the Act is modified by repealing the section.]
After the expiration of 20 years from the date on which a person became a bankrupt, a claim shall not be made by the trustee in the bankruptcy to any property of the bankrupt, and that property shall, subject to the rights, if any, of a person other than the trustee in respect of the property, be deemed to be vested in the bankrupt, or a person claiming through or under him or her, as the case may be.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 127 of the Act is modified by inserting subsection (1A):
]
127(1A)
In the application of Part XI to this section, the reference in subsection (1) to the date on which a person became bankrupt is taken to be a reference to the date on which administration of a deceased debtor's estate commenced.
127(2)
An action under subsection 118(9) with respect to a charge or charging order shall not be commenced by the trustee of the estate of a bankrupt after the expiration of 6 years from the date on which the bankrupt became a bankrupt.
127(3)
An action under section 120 with respect to a transfer shall not be commenced by the trustee of the estate of a bankrupt after the expiration of 6 years from the date on which the bankrupt became a bankrupt.
127(4)
An action under section 121 with respect to a transfer of property may be commenced by the trustee of the estate of a bankrupt at any time.
127(5)
An action under section 122 with respect to a transfer of property shall not be commenced by the trustee of the estate of a bankrupt after the expiration of 6 years from the date on which the bankrupt became a bankrupt.
SECTION 128 NOTICE TO TRUSTEE WHERE IDENTITY OF VENDOR ETC. WITH BANKRUPT IN DOUBT 128(1)
Where a doubt arises as to the identity with a bankrupt of a person appearing in the title to any property, an intending or actual vendor, mortgagor or lessor of the property or applicant to bring land under the provisions of any law of the Commonwealth or of a State or Territory relating to title to land, or a resuming or constructing authority under any law of the Commonwealth or of a State or Territory may give to the trustee in the bankruptcy a notice containing particulars of the property in question and of the person whose identity with the bankrupt is in question, and a statement of his or her intention to sell, mortgage or lease, or complete a sale, mortgage or lease of, the property or to bring the property under the provisions of any law of the Commonwealth or of a State or Territory relating to title to land, or to pay compensation in respect of the resumption of the property, as the case may be.
128(2)
The trustee may, within 3 months after the notice was given, file with the Registrar of Titles or Registrar-General or other appropriate officer or authority of the Commonwealth, or of the State or Territory concerned, a memorandum claiming the property in respect of which the notice was given.
128(3)
If the trustee does not file a memorandum claiming the property in accordance with subsection (2), he or she is not entitled at a future time to assert his or her title to that property or to make any claim in respect of that property as against the vendor, mortgagor, lessor, applicant or the resuming or constructing authority, as the case may be, or a person claiming under or through the vendor, mortgagor, lessor or applicant.
128(4)
The trustee may, at any time before the expiration of the period of 3 months referred to in subsection (2), withdraw a memorandum filed under that subsection.
Subdivision B - Superannuation contributions
The following is a simplified outline of this Subdivision:
A transfer of property by a person who later becomes a bankrupt (the transferor ) to another person (the transferee ) is void against the trustee in the transferor's bankruptcy if:
(a) the transfer is made by way of a contribution to an eligible superannuation plan; and
(b) the property would probably have become part of the transferor's estate or would probably have been available to creditors if the property had not been transferred; and
(c) the transferor's main purpose in making the transfer was:
(i) to prevent the transferred property from becoming divisible among the transferor's creditors; or
(ii) to hinder or delay the process of making property available for division among the transferor's creditors; and
(d) the transfer occurs on or after 28 July 2006. 128B(2) Showing the transferor's main purpose in making a transfer.
The transferor's main purpose in making the transfer is taken to be the purpose described in paragraph (1)(c) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent.
128B(3) [Factors considered when determining purpose of transfer]In determining whether the transferor's main purpose in making the transfer was the purpose described in paragraph (1)(c), regard must be had to:
(a) whether, during any period ending before the transfer, the transferor had established a pattern of making contributions to one or more eligible superannuation plans; and
(b) if so, whether the transfer, when considered in the light of that pattern, is out of character. 128B(4) Other ways of showing the transferor's main purpose in making a transfer.
Subsections (2) and (3) do not limit the ways of establishing the transferor's main purpose in making a transfer.
128B(5) Rebuttable presumption of insolvency.For the purposes of this section, a rebuttable presumption arises that the transferor was, or was about to become, insolvent at the time of the transfer if it is established that the transferor:
(a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor's business transactions and financial position; or
(b) having kept such books, accounts and records, has not preserved them. 128B(5A) Refund of contributions tax etc.
(a) as a result of subsection (1), a transfer made by way of a contribution to an eligible superannuation plan is void against the trustee in the transferor's bankruptcy; and
(b) any of the following amounts was debited from the contribution:
(i) an amount in respect of tax in respect of the contribution;
(ii) a fee, or a charge, in respect of the contribution; and
(c) in compliance with a section 139ZQ notice that relates to the transfer, the trustee of the eligible superannuation plan pays an amount to the trustee in the transferor's bankruptcy; and
(d) the amount paid in compliance with the section 139ZQ notice exceeds the amount so debited;
the trustee in the transferor's bankruptcy must pay to the trustee of the eligible superannuation plan an amount equal to the amount so debited.
This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property.
128B(7) Meaning of transfer of property and market value .For the purposes of this section:
(a) transfer of property includes a payment of money; and
(b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and
(c) the market value of property transferred is its market value at the time of the transfer.
(a) a person (the transferor ) transfers property to another person, (the transferee ); and
(b) the transfer is by way of a contribution to an eligible superannuation plan for the benefit of a person who later becomes a bankrupt (the beneficiary ); and
(c) the transferor did so under a scheme to which the beneficiary was a party; and
(d) the property would probably have become part of the beneficiary's estate or would probably have been available to creditors if the property had not been transferred; and
(e) the beneficiary's main purpose in entering into the scheme was:
(i) to prevent the transferred property from becoming divisible among the beneficiary's creditors; or
(ii) to hinder or delay the process of making property available for division among the beneficiary's creditors; and
(f) the transfer occurred on or after 28 July 2006;
the transfer is void against the trustee in the beneficiary's bankruptcy.
128C(2) [Death benefits not applicable]For the purposes of paragraph (1)(b), disregard a benefit that is payable in the event of the death of a person.
128C(3) Showing the beneficiary's main purpose in entering into the scheme.The beneficiary's main purpose in entering into the scheme is taken to be the purpose described in paragraph (1)(e) if it can reasonably be inferred from all the circumstances that, at the time when the beneficiary entered into the scheme, the beneficiary was, or was about to become, insolvent.
128C(4) [Factors when determining main purpose of scheme]In determining whether the beneficiary's main purpose in entering into the scheme was the purpose described in paragraph (1)(e), regard must be had to:
(a) whether, during any period ending before the scheme was entered into, the transferor had established a pattern of making contributions to one or more eligible superannuation plans for the benefit of the beneficiary; and
(b) if so, whether the transfer, when considered in the light of that pattern, is out of character. 128C(5) [Death benefit not applicable]
For the purposes of paragraph (4)(a), disregard a benefit that is payable in the event of the death of a person.
128C(6) Other ways of showing the beneficiary's main purpose in entering into a scheme.Subsections (3) and (4) do not limit the ways of establishing the beneficiary's main purpose in entering into a scheme.
128C(7) Rebuttable presumption of insolvency.For the purposes of this section, a rebuttable presumption arises that the beneficiary was, or was about to become, insolvent at the time the beneficiary entered into the scheme if it is established that the beneficiary:
(a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the beneficiary and as sufficiently disclose the beneficiary's business transactions and financial position; or
(b) having kept such books, accounts and records, has not preserved them. 128C(7A) Refund of contributions tax etc.
(a) as a result of subsection (1), a transfer made by way of a contribution to an eligible superannuation plan is void against the trustee in the beneficiary's bankruptcy; and
(b) any of the following amounts was debited from the contribution:
(i) an amount in respect of tax in respect of the contribution;
(ii) a fee, or a charge, in respect of the contribution; and
(c) in compliance with a section 139ZQ notice that relates to the transfer, the trustee of the eligible superannuation plan pays an amount to the trustee in the beneficiary's bankruptcy; and
(d) the amount paid in compliance with the section 139ZQ notice exceeds the amount so debited;
the trustee in the beneficiary's bankruptcy must pay to the trustee of the eligible superannuation plan an amount equal to the amount so debited.
This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property.
128C(9) Meaning of transfer of property and market value .For the purposes of this section:
(a) transfer of property includes a payment of money; and
(b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person; and
(c) the market value of property transferred is its market value at the time of the transfer.
An action under section 128B or 128C with respect to a transaction may be commenced by the trustee of a bankrupt's estate at any time.
128D(2) [Notice to follow Act's commencement]A section 139ZQ notice in relation to a transaction that, under section 128B or 128C, is void against the trustee of a bankrupt's estate must not be given before the commencement of Part 2 of Schedule 1 to the Bankruptcy Legislation Amendment (Superannuation Contributions) Act 2007.
128D(3) [Notice valid before Act's commencement]A section 139ZQ notice in relation to a transaction that, under section 128B or 128C, is void against the trustee of a bankrupt's estate may be given even if the transaction occurred before the commencement of Part 2 of Schedule 1 to the Bankruptcy Legislation Amendment (Superannuation Contributions) Act 2007.
This section applies in relation to a member of an eligible superannuation plan if the Official Receiver has reasonable grounds to believe that:
(a) a transaction is void against the trustee of a bankrupt's estate under section 128B or 128C; and
(b) either:
(i) the whole or a part of the member's superannuation interest is attributable to the transaction; or
128E(2) Giving of freezing notice.
(ii) the trustee of the bankrupt's estate has made an application for a section 139ZU order that relates to the transaction and the member's superannuation interest.
The Official Receiver may, by written notice (a superannuation account-freezing notice ) given to the trustee of the eligible superannuation plan, direct the trustee of the plan not to:
(a) cash or debit; or
(b) permit the cashing, debiting, roll-over, transfer or forfeiture of;
the whole or any part of the superannuation interest except:
(c) for the purposes of complying with a notice under section 139ZQ; or
(d) for the purposes of complying with an order under section 139ZU; or
(e) for the purposes of charging costs against, or debiting costs from, the superannuation interest; or
(f) for the purposes of giving effect to a family law payment split; or
(g) in accordance with the written consent of the Official Receiver given under section 128H; or
(h) for the purposes of complying with an order under paragraph 128K(1)(b); or
(i) for the purposes of complying with an order under subsection 139ZT(2); or
(j) in such circumstances (if any) as are specified in the regulations. 128E(3) [Contents of freezing notice]
The superannuation account-freezing notice must set out the facts and circumstances because of which the Official Receiver considers that the Official Receiver has reasonable grounds to believe that:
(a) the transaction is void against the trustee of the bankrupt's estate under section 128B or 128C; and
(b) either:
(i) the whole or a part of the member's superannuation interest is attributable to the transaction; or
128E(4) When Official Receiver may give freezing notice.
(ii) the trustee of the bankrupt's estate has made an application for a section 139ZU order that relates to the transaction and the member's superannuation interest.
The Official Receiver may give the superannuation account-freezing notice:
(a) if the Official Trustee is the trustee of the bankrupt's estate - on the initiative of the Official Receiver; or
(b) if a registered trustee is the trustee of the bankrupt's estate - on application by the registered trustee. 128E(5) When freezing notice comes into force.
The superannuation account-freezing notice comes into force when the notice is given to the trustee of the eligible superannuation plan.
If a superannuation account-freezing notice is in force in relation to a member of an eligible superannuation plan, the Official Receiver may, by written notice given to the trustee of the plan, revoke the superannuation account-freezing notice.
128F(2) [When the Official Receiver may revoke freezing notice]The Official Receiver may revoke a superannuation account-freezing notice that relates to a member of an eligible superannuation plan:
(a) if the Official Trustee is the trustee of the bankrupt's estate - on the initiative of the Official Receiver; or
(b) if a registered trustee is the trustee of the bankrupt's estate - on application by the registered trustee; or
(c) in any case - on application by the member. 128F(3) Revocation of freezing notice when section 139ZQ notice complied with etc.
(a) subparagraph 128E(1)(b)(i) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan; and
(b) during the 180-day period after the superannuation account-freezing notice comes into force, a section 139ZQ notice is given in relation to the transaction referred to in paragraph 128E(1)(a);
the superannuation account-freezing notice is revoked:
(c) when the trustee of the plan complies with the section 139ZQ notice; or
(d) when the section 139ZQ notice is revoked; or
(e) when the Court sets aside the section 139ZQ notice. 128F(4) Revocation of freezing notice if no section 139ZQ notice given after 180 days.
If subparagraph 128E(1)(b)(i) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan, the superannuation account-freezing notice is revoked if:
(a) 180 days pass after the notice comes into force; and
(b) no section 139ZQ notice has been given in relation to the transaction referred to in paragraph 128E(1)(a). 128F(5) Revocation of freezing notice when section 139ZU order complied with etc.
(a) subparagraph 128E(1)(b)(ii) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan; and
(b) during the 180-day period after the superannuation account-freezing notice comes into force, a section 139ZU order is made in relation to the transaction referred to in paragraph 128E(1)(a) and in relation to the member's superannuation interest;
the superannuation account-freezing notice is revoked:
(c) when the trustee of the plan complies with the section 139ZU order; or
(d) when the section 139ZU order is set aside on appeal. 128F(6) Revocation of freezing notice when application for section 139ZU order dismissed or withdrawn.
(a) subparagraph 128E(1)(b)(ii) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan; and
(b) during the 180-day period after the superannuation account-freezing notice comes into force:
(i) the Court dismisses an application for a section 139ZU order in relation to the transaction referred to in paragraph 128E(1)(a) and in relation to the member's superannuation interest; or
(ii) an application for a section 139ZU order in relation to the transaction referred to in paragraph 128E(1)(a) and in relation to the member's superannuation interest is withdrawn;
the superannuation account-freezing notice is revoked.
128F(7) Revocation of freezing notice if no section 139ZU order made after 180 days.If subparagraph 128E(1)(b)(ii) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan, the superannuation account-freezing notice is revoked if:
(a) 180 days pass after the notice comes into force; and
(b) no section 139ZU order has been made in relation to the transaction referred to in paragraph 128E(1)(a) and in relation to the member's superannuation interest. 128F(8) Extension of 180-day period.
The Court may, on application by the Official Receiver, extend, or further extend, the 180-day period referred to in subsection (5), (6) or (7).
128F(9) [When the Official Receiver may make an application]The Official Receiver may make an application under subsection (8):
(a) if the Official Trustee is the trustee of the bankrupt's estate - on the initiative of the Official Receiver; or
(b) if a registered trustee is the trustee of the bankrupt's estate - on application by the registered trustee.
If the Official Receiver gives or revokes a superannuation account-freezing notice that relates to a member of an eligible superannuation plan:
(a) the Official Receiver must give 2 copies of the superannuation account-freezing notice or the revocation notice, as the case may be, to the trustee of the bankrupt's estate; and
(b) the trustee must give one of those copies to the member. 128G(2) [Validity]
A failure to comply with subsection (1) does not affect the validity of the superannuation account-freezing notice or the revocation notice, as the case may be.
Scope
128H(1)
This section applies if a superannuation account-freezing notice is in force in relation to a member's superannuation interest.
Consent
128H(2)
The member may apply in writing to the Official Receiver for the Official Receiver to consent to the cashing, debiting, roll-over, transfer or forfeiture, in whole or in part, of the member's superannuation interest.
128H(3)
If an application is made under subsection (2), the Official Receiver may, by written notice given to the trustee of the eligible superannuation plan concerned, consent to the cashing, debiting, roll-over, transfer or forfeiture, in whole or in part, of the member's superannuation interest.
128H(4)
A consent under subsection (3) may be: (a) unconditional; or (b) subject to such conditions (if any) as are specified in the notice of consent.
128H(5)
If the Official Receiver gives a consent under subsection (3) in relation to a member's superannuation interest, the Official Receiver must give a copy of the consent to the member.
Consultation
128H(6)
Before giving a consent under subsection (3), the Official Receiver must consult the trustee of the bankrupt's estate.
Review of decisions
128H(7)
Applications may be made to the Administrative Review Tribunal for review of a decision of the Official Receiver refusing to give a consent under subsection (3).
128H(8)
The trustee of the bankrupt's estate may apply to the Administrative Review Tribunal for review of a decision of the Official Receiver giving a consent under subsection (3).
If the Court, on application by:
(a) a person to whom a superannuation account-freezing notice has been given; or
(b) the member whose superannuation interest is affected by a superannuation account-freezing notice; or
(c) any other interested person;
is satisfied that the Official Receiver did not have reasonable grounds to believe that:
(d) the relevant transaction is void against the trustee of a bankrupt's estate under section 128B or 128C; and
(e) either:
(i) the whole or a part of the relevant member's superannuation interest is attributable to the transaction; or
(ii) the trustee of the bankrupt's estate has made an application for a section 139ZU order that relates to the transaction and the relevant member's superannuation interest;
the Court may make an order setting aside the notice.
128J(2) [Notice taken not to have been given]A superannuation account-freezing notice that has been set aside is taken not to have been given.
If the Court is satisfied that the trustee of an eligible superannuation plan has breached, or is proposing to breach, a superannuation account-freezing notice, the Court may, on application of the trustee of the relevant bankrupt's estate, make any or all of the following orders:
(a) an order directing the trustee of the plan to comply with that notice;
(b) an order directing the trustee of the plan to pay to the trustee of the relevant bankrupt's estate an amount not exceeding the money, or the value of the property, received as a result of the transaction referred to in paragraph 128E(1)(a);
(c) any other order that the Court thinks appropriate. 128K(2) [Discharge or variation of order]
The Court may discharge or vary an order granted under this section.
128K(3) [Enforceability]An order by the Court under paragraph (1)(b) is enforceable as if it were an order for the payment of money made by the Court when exercising jurisdiction otherwise than under this Act.
No criminal or civil proceedings lie against the trustee of an eligible superannuation plan because of anything done (or not done) by the trustee in good faith:
(a) in compliance with a superannuation account-freezing notice; or
(b) in connection with, or incidental to, the trustee's compliance with a superannuation account-freezing notice; or
(c) in compliance with a section 139ZQ notice; or
(d) in connection with, or incidental to, the trustee's compliance with a section 139ZQ notice; or
(e) in compliance with a section 139ZU order; or
(f) in connection with, or incidental to, the trustee's compliance with a section 139ZU order; or
(g) in compliance with a subsection 139ZT(2) order; or
(h) in connection with, or incidental to, the trustee's compliance with a subsection 139ZT(2) order; or
(i) in compliance with a paragraph 128K(1)(b) order; or
(j) in connection with, or incidental to, the trustee's compliance with a paragraph 128K(1)(b) order. 128L(2) [Protection of trustee of regulated super fund or deposit fund]
Anything done (or not done) by the trustee of a regulated superannuation fund, or the trustee of an approved deposit fund, in good faith:
(a) in compliance with a superannuation account-freezing notice; or
(b) in connection with, or incidental to, the trustee's compliance with a superannuation account-freezing notice; or
(c) in compliance with a section 139ZQ notice; or
(d) in connection with, or incidental to, the trustee's compliance with a section 139ZQ notice; or
(e) in compliance with a section 139ZU order; or
(f) in connection with, or incidental to, the trustee's compliance with a section 139ZU order; or
(g) in compliance with a subsection 139ZT(2) order; or
(h) in connection with, or incidental to, the trustee's compliance with a subsection 139ZT(2) order; or
(i) in compliance with a paragraph 128K(1)(b) order; or
(j) in connection with, or incidental to, the trustee's compliance with a paragraph 128K(1)(b) order;
is taken not to be in breach of:
(k) the Superannuation Industry (Supervision) Act 1993; or
(l) any standards prescribed under that Act. 128L(3) [Protection of RSA provider]
Anything done (or not done) by an RSA provider in good faith:
(a) in compliance with a superannuation account-freezing notice; or
(b) in connection with, or incidental to, the RSA provider's compliance with a superannuation account-freezing notice; or
(c) in compliance with a section 139ZQ notice; or
(d) in connection with, or incidental to, the RSA provider's compliance with a section 139ZQ notice; or
(e) in compliance with a section 139ZU order; or
(f) in connection with, or incidental to, the trustee's compliance with a section 139ZU order; or
(g) in compliance with a subsection 139ZT(2) order; or
(h) in connection with, or incidental to, the trustee's compliance with a subsection 139ZT(2) order; or
(i) in compliance with a paragraph 128K(1)(b) order; or
(j) in connection with, or incidental to, the trustee's compliance with a paragraph 128K(1)(b) order;
is taken not to be in breach of:
(k) the Retirement Savings Accounts Act 1997; or
(l) any standards prescribed under that Act.
References in a provision of this Subdivision to:
(a) a member of an eligible superannuation plan; and
(b) a bankrupt;
do not imply that the bankrupt may not be the member.
In this Subdivision:
approved deposit fund
has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
cashed,
in relation to a superannuation interest, includes applied towards the provision of a pension.
contribution,
in relation to an RSA, has the same meaning as in the Retirement Savings Accounts Act 1997.
costs:
(a)
in relation to a regulated superannuation fund, an approved deposit fund or an RSA - includes:
(i) transaction costs; and
(ii) government charges; and
(iii) taxes and duties; and
(iv) charges relating to the management or investment of fund assets or RSA assets, as the case may be; or
(b) in any other case - includes anything that, under the regulations, is taken to be costs for the purposes of this paragraph.
eligible superannuation plan
means any of the following:
(a) a regulated superannuation fund;
(b) an approved deposit fund;
(c) an RSA;
(d) a public sector superannuation scheme.
family law payment split
means a payment split under Part VIIIB or VIIIC of the Family Law Act 1975.
member:
(a)
in relation to a regulated superannuation fund - means a member of the fund; or
(b) in relation to an approved deposit fund - means a depositor in the fund; or
(c) in relation to an RSA - means the RSA holder; or
(d) in relation to a public sector superannuation scheme - has the meaning given by the regulations.
(a) a benefit provided by a fund, if the benefit is taken, under regulations made for the purposes of the definition of pension in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993, to be a pension for the purposes of that Act; and
(b) a benefit provided by a public sector superannuation scheme, if the benefit is taken, under the regulations, to be a pension for the purposes of this definition.
public sector superannuation scheme
has the same meaning as in the Superannuation Industry (Supervision) Act 1993, but does not include a regulated superannuation fund.
regulated superannuation fund
has the same meaning as in the Superannuation Industry (Supervision) Act 1993.
RSA provider
has the same meaning as in the Retirement Savings Accounts Act 1997.
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.
superannuation account-freezing notice
means a notice under section 128E.
superannuation interest
means an interest in an eligible superannuation plan, but does not include a reversionary interest.
trustee,
in relation to an eligible superannuation plan, means:
(a) if the plan is a fund that has a trustee (within the ordinary meaning of that word) - the trustee of the plan; or
(b) if the plan is an RSA - the RSA provider; or
(c) if:
(i) none of the preceding paragraphs apply; and
the person identified in accordance with the regulations; or
(ii) a person is identified in accordance with the regulations as the trustee of the plan for the purposes of this definition;
(d) in any other case - the person who manages the plan.
If a person who is not the trustee of an eligible superannuation plan nevertheless has the power to make payments to members of the plan, then references in this Subdivision to the trustee of the plan include references to that person.
withdrawal benefit:
(a)
in relation to a regulated superannuation fund or an approved deposit fund - has the same meaning as in the Superannuation Industry (Supervision) Regulations 1994; or
(b) in relation to an RSA - has the same meaning as in the Retirement Savings Accounts Regulations 1997; or
(c) in relation to a public sector superannuation scheme - has the meaning given by the regulations.
The trustee shall forthwith take possession of all the property of the bankrupt capable of manual delivery, including all deeds, books and documents of the bankrupt.
129(2)
The Court may, on the application of the trustee, enforce possession accordingly.
129(3)
A person is not entitled, as against the trustee, to withhold possession of the books of account or any papers or documents of the bankrupt relating to the accounts or to any of the examinable affairs of the bankrupt or to claim any lien on any such papers or documents.
129(4)
If a person has in his or her possession or power any moneys or security that he or she is not by law entitled to retain as against the bankrupt or the trustee, he or she shall pay or deliver the moneys or security to the trustee.
129(4A)
Where: (a) moneys are payable to a person under a law of the Commonwealth or of a State or Territory; (b) that person is a bankrupt or the moneys are payable to the person as the legal personal representative of a person who was at the time of his or her death a bankrupt; and (c) the moneys constitute property divisible amongst the creditors of the bankrupt or the deceased bankrupt, as the case may be;
those moneys shall, upon demand by the trustee, be paid to the trustee notwithstanding any provision to the contrary in that law.
129(4B)
A demand under subsection (4A) shall be in accordance with the approved form.
129(4C)
A payment made in pursuance of a demand under subsection (4A) is, to the extent of the amount paid, a valid discharge to the person making the payment as against the bankrupt or the estate of the deceased bankrupt, as the case may be.
129(5)
A person who does not pay or deliver to the trustee any moneys or security that he or she is required by subsection (4) or (4A) so to pay or deliver is guilty of contempt of court.
129(6)
If the person so failing to pay or deliver any moneys or security is a corporation, both the corporation and each officer of the corporation who is responsible for the non-compliance are guilty of contempt of court.
SECTION 129AA TIME LIMIT FOR REALISING PROPERTY 129AA(1) [Application]
(a) property (other than cash) that was disclosed in the bankrupt's statement of affairs; and
(b) after-acquired property (other than cash) that the bankrupt discloses in writing to the trustee within 14 days after the bankrupt becomes aware that the property devolved on, or was acquired by, the bankrupt.
In this subsection, cash includes amounts standing to the credit of a bank account or similar account.
129AA(2) [Property vested in the trustee]If any such property is still vested in the trustee immediately before the revesting time, then it becomes vested in the bankrupt at the revesting time by force of this section.
129AA(3) [ "revesting time" ]Initially, the revesting time for property is:
(a) for property disclosed in the statement of affairs - the beginning of the day that is the sixth anniversary of the day on which the bankrupt is discharged from the bankruptcy; and
(b) for after-acquired property that is disclosed before the bankrupt is discharged from the bankruptcy - the beginning of the day that is the sixth anniversary of the day on which the bankrupt is discharged; and
(c) for after-acquired property that is disclosed after the bankrupt is discharged from the bankruptcy - the beginning of the day that is the sixth anniversary of the day on which the bankrupt disclosed the property to the trustee. 129AA(4) [Extension notice]
If the trustee, before the current revesting time, gives the bankrupt a written notice (an extension notice ) stating that a later revesting time applies to particular property, then that later time becomes the revesting time for that property.
129AA(5) [No limit on extension notices]There is no limit on the number of extension notices that the trustee may give (either generally or in relation to particular property).
129AA(6) [Time specified on extension notice]The time specified in an extension notice must be either:
(a) a specified time that is not more than 3 years after the current revesting time; or
(b) a time that is reckoned by reference to a specified event (for example, the death of a life tenant), but is not more than 3 years after the happening of that event. 129AA(7) [Time limit for making claims by trustee]
Any property that becomes vested in the bankrupt under this section thereupon ceases to be subject to section 127.
A judge of the Court may, by writing, consent to be declared by the Minister under subsection (2).
The Minister may, by writing, declare a judge of the Court whose consent is in force under subsection (1) to be an eligible judge for the purposes of this Act.
An eligible judge has, in relation to the power to issue a warrant under section 130, the same protection and immunity as a Justice of the High Court has in relation to proceedings in the High Court.
[
CCH Note:
No 13 of 2013, s 3 and Sch 1 item 57 contains the following saving provisions (effective 12 April 2013):
57 Saving provisions
(1)
A consent that is in force immediately before the commencement of this item under subsection 129A(1) of the Bankruptcy Act 1966 in respect of a Federal Magistrate continues in force, after that commencement, as a consent in respect of a Judge of the Federal Circuit Court of Australia.
(2)
A declaration that is in force immediately before the commencement of this item under subsection 129A(2) of the Bankruptcy Act 1966 in respect of a Federal Magistrate continues in force, after that commencement, as a declaration in respect of a Judge of the Federal Circuit Court of Australia.
(3)
A thing done by, or in relation to, a Federal Magistrate, as an eligible judge, under section 130 of the Bankruptcy Act 1966 before the commencement of this item has effect, after that commencement, as if it had been done by, or in relation to, a Judge of the Federal Circuit Court of Australia, as an eligible judge, under that section.
No 13 of 2013, s 3 and Sch 4 item 3 contains the following transitional provision (effective 12 April 2013):
3 No limit on operation of section 7 or subsection 25B(1) of theActs Interpretation Act 1901
]
3
The following do not limit the operation of section 7 or subsection 25B(1) of the Acts Interpretation Act 1901:
(a)
items 30, 45, 53, 57, 108, 110M, 233, 320, 327, 417, 459, 495, 514, 550 and 555 of Schedule 1 [of No 13 of 2013];
(b)
items 95, 98 and 101 of Schedule 3 [of No 13 of 2013];
(c)
item 1 of this Schedule [of No 13 of 2013].
The trustee of a bankrupt's estate may apply to an eligible judge for the issue of a warrant under subsection (2) if the trustee has reasonable grounds for suspecting that there is on or in any premises property (in this section called relevant property ), being:
(a) any of the property of the bankrupt;
(b) property that may be connected with, or related to, the bankrupt's examinable affairs; or
(c) books (including books of an associated entity of the bankrupt) relevant to any of the bankrupt's examinable affairs.
On an application under subsection (1), the judge may issue a warrant authorising a constable, together with any other person named in the warrant:
(a) to enter on or into the premises, using such force as is necessary for the purpose and is reasonable in the circumstances;
(b) to search the premises for relevant property;
(c) to break open, and search for relevant property, any cupboard, drawer, chest, trunk, box, package or other receptacle, whether a fixture or not, on or in the premises;
(d) to take possession of, or secure against interference, any relevant property found on or in the premises; and
(e) to deliver to the trustee, or to a person authorised in writing by the trustee for the purpose, any property of which possession is taken under the warrant.
An eligible judge shall not issue a warrant under subsection (2) unless:
(a) an affidavit has been furnished to the judge setting out the grounds on which the issue of the warrant is sought;
(b) the applicant for the warrant (or some other person) has given to the judge, either orally or by affidavit, such further information (if any) as the judge requires concerning the grounds on which the issue of the warrant is sought; and
(c) the judge is satisfied that there are reasonable grounds for issuing the warrant.
Where an eligible judge issues a warrant under subsection (2), he or she shall set out on the affidavit furnished in accordance with subsection (3):
(a) on which of the grounds specified in the affidavit; and
(b) on which other grounds (if any);
he or she has relied to justify the issue of the warrant.
A warrant under this section shall:
(a) state whether entry is authorised to be made at any time of the day or night or during specified hours of the day or night; and
(b) specify a day, not later than 7 days after the day of issue of the warrant, on which the warrant ceases to have effect.
Where, under this section, a person takes possession of property, or secures property against interference, a person is not entitled, as against the trustee, to claim a lien on the property, but such a lien is not otherwise prejudiced.
Where, under this section, a person takes possession of books, or secures books against interference, that person or any other person to whom the books are delivered under paragraph (2)(e):
(a) may make copies of, or take extracts from, the books;
(b) may require a person who was a party to the compilation of the books to explain to the best of the person's knowledge and belief any matter about the compilation of the books or to which the books relate;
(c) may retain possession of the books for such period as is necessary to enable the books to be inspected, and copies of, or extracts from, the books to be made or taken, by or on behalf of the trustee; and
(d) during that period shall permit a person who would be entitled to inspect any one or more of those books if they were not in the possession of the first-mentioned person or the other person to inspect at all reasonable times such of those books as that person would be so entitled to inspect.
The powers conferred by this section are in addition to, and not in derogation of, any other powers conferred by law.
[
CCH Note:
No 13 of 2013, s 3 and Sch 1 item 57 contains the following saving provisions (effective 12 April 2013):
57 Saving provisions
(1)
A consent that is in force immediately before the commencement of this item under subsection 129A(1) of the Bankruptcy Act 1966 in respect of a Federal Magistrate continues in force, after that commencement, as a consent in respect of a Judge of the Federal Circuit Court of Australia.
(2)
A declaration that is in force immediately before the commencement of this item under subsection 129A(2) of the Bankruptcy Act 1966 in respect of a Federal Magistrate continues in force, after that commencement, as a declaration in respect of a Judge of the Federal Circuit Court of Australia.
(3)
A thing done by, or in relation to, a Federal Magistrate, as an eligible judge, under section 130 of the Bankruptcy Act 1966 before the commencement of this item has effect, after that commencement, as if it had been done by, or in relation to, a Judge of the Federal Circuit Court of Australia, as an eligible judge, under that section.
No 13 of 2013, s 3 and Sch 4 item 3 contains the following transitional provision (effective 12 April 2013):
3 No limit on operation of section 7 or subsection 25B(1) of theActs Interpretation Act 1901
]
3
The following do not limit the operation of section 7 or subsection 25B(1) of the Acts Interpretation Act 1901:
(a)
items 30, 45, 53, 57, 108, 110M, 233, 320, 327, 417, 459, 495, 514, 550 and 555 of Schedule 1 [of No 13 of 2013];
(b)
items 95, 98 and 101 of Schedule 3 [of No 13 of 2013];
(c)
item 1 of this Schedule [of No 13 of 2013].
(Repealed by No 9 of 1992, s 24.) SECTION 132 VESTING AND TRANSFER OF PROPERTY 132(1)
Subject to this section, and to section 158, where a trustee is appointed by the creditors, the property of the bankrupt passes to and vests in the trustee so appointed on the day on which the appointment takes effect.
132(2)
Subject to this section, the property of the bankrupt passes from trustee to trustee and vests in the trustee for the time being during his or her continuance in office or, if the Official Trustee becomes the trustee, in the Official Trustee, without any conveyance, assignment or transfer.
132(3)
Where a law of the Commonwealth or of a State or Territory requires the transmission of property to be registered, and enables the trustee to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not vest in the trustee at law until the requirements of that law have been complied with.
132(4)
(Omitted by No 12 of 1980, s 64.)
SECTION 133 DISCLAIMER OF ONEROUS PROPERTY 133(1AA)
Where any part of the property of the bankrupt consists of: (a) land of any tenure burdened with onerous covenants; or (b) property (including land) that is unsaleable or is not readily saleable;
subsection (1) applies.
133(1AB)
Where: (a) any part of the property of the bankrupt consists of property, being neither land nor an interest in land; and (b) it may reasonably be expected that the costs, charges and expenses that the trustee would incur in realising the property would exceed the proceeds of realising the property;
subsection (1) applies.
133(1)
Subject to this section, the trustee may, notwithstanding that he or she has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation to it and notwithstanding, in the case of property the transfer of which is required by a law of the Commonwealth or of a State or Territory to be registered, that he or she has not become the registered owner of that property, by writing signed by him or her, at any time disclaim the property.
133(1A)
Subject to this section, the trustee may at any time, by writing signed by him or her, disclaim any contract that forms part of the property of the bankrupt whether or not the trustee has endeavoured to assign the property or exercised any rights in relation to it.
133(2)
A disclaimer under subsection (1) or (1A) operates to determine forthwith the rights, interests and liabilities of the bankrupt and his or her property in or in respect of the property disclaimed, and discharges the trustee from all personal liability in respect of the property disclaimed as from the date when the property vested in him or her, but does not, except so far as is necessary for the purpose of releasing the bankrupt and his or her property and the trustee from liability, affect the rights or liabilities of any other person.
133(3)
If a trustee disclaims property whose transfer must be registered under a law of the Commonwealth or of a State or Territory, the trustee must give notice of the disclaimer as soon as practicable to the officer who has the function of registering the transfer.
133(4)
A trustee is not entitled to disclaim a lease without the leave of the Court unless: (a) the trustee has given to the lessor and, if the bankrupt has sub-let the whole or any part of the leased property or has mortgaged the lease, to each sub-lessee or mortgagee, 28 days' written notice of his or her intention to disclaim the lease; and (b) no person to whom the trustee has given such a notice has, within 28 days after it was given to the person, by written notice given to the trustee, required the trustee to apply to the Court for leave to disclaim the lease.
133(4A)-(4B)
(Omitted by No 44 of 1996, Sch 1, Pt 1(232).)
133(5)
The Court may, in relation to an application for leave to disclaim a lease under this section: (a) impose such terms as a condition of granting the leave; and (b) make such orders with respect to fixtures, improvements and other matters arising out of the lease;
as the Court considers just and equitable.
133(5A)
A trustee is not entitled to disclaim a contract (other than an unprofitable contract) without the leave of the Court.
133(5B)
The Court may, in relation to an application for leave to disclaim a contract under this section: (a) impose such terms as a condition of granting the leave; and (b) make such orders with respect to matters arising out of the contract;
as the Court considers just and equitable.
133(6)
Where: (a) an application in writing has been made to the trustee by a person interested in property requiring him or her to decide whether he or she will disclaim the property or not; and (b) the trustee has, for a period of 28 days after the receipt of the application, or such extended period as is allowed by the Court, declined or neglected to disclaim the property;
the trustee is not entitled to disclaim the property under this section and, in the case of a contract, he or she shall be deemed to have adopted it.
133(6A)-(6B)
(Omitted by No 44 of 1996, Sch 1, Pt 1(232).)
133(7)
The Court may, on the application of a person who is, as against the trustee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as the Court considers just and equitable.
133(8)
Damages so payable may be proved as a debt in the bankruptcy.
133(9)
The Court may, on application by a person either claiming an interest in, or being under a liability not discharged by this Act in respect of, disclaimed property, and after hearing such persons as it thinks fit, make an order, on such terms as the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person entitled to it or a person in whom, or to whom,it seems to the Court to be just and equitable that it should be vested or delivered, or a trustee for that person.
133(10)
Subject to subsection (11), where an order vesting property in a person is made under subsection (9), the property to which it relates vests forthwith in the person named in the order for that purpose without any conveyance, transfer or assignment.
133(11)
Where: (a) the property to which such an order relates is property the transfer of which is required by a law of the Commonwealth or of a State or Territory to be registered; and (b) that law enables the registration of such an order;
the property, notwithstanding that it vests in equity in the person named in the order, does not vest in that person at law until the requirements of that law have been complied with.
133(12)
A person aggrieved by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the extent of any loss he or she has suffered by reason of the disclaimer and may prove the loss as a debt in the bankruptcy.
133(13)
In this section:
mortgagee
includes the person entitled to the benefit of a charge.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 133 of the Act is modified by inserting subsection (14):
]
133(14)
This section does not apply in relation to a personal insolvency agreement.
Subject to this Act, the trustee may do all or any of the following things: (a) sell all or any part of the property of the bankrupt; (aa) accept, without terms or conditions, or subject to terms and conditions, a sum of money payable at a future time as the consideration or part of the consideration for the sale of any property of the bankrupt; (ab) lease any property of the bankrupt; (ac) divide among the creditors, in its existing form and according to its estimated value, property that, by reason of its peculiar nature or other special circumstances, cannot readily or advantageously be sold; (b) carry on a business of the bankrupt so far as may be necessary to dispose of it or wind it up for the benefit of creditors; (c) postpone the winding-up of the estate; (d) prove in respect of any debt due to the bankrupt; (da) mortgage or charge any of the property of the bankrupt for the purpose of raising money for the payment of the debts provable in the bankruptcy; (e) compromise any debt claimed to be due to the bankrupt or any claim by the bankrupt; (f) make a compromise with a creditor or a person claiming to be a creditor in respect of a debt provable, or claimed to be provable, in the bankruptcy; (g) make a compromise in respect of any claim arising out of the administration of the estate of the bankrupt, whether the claim is made by or against the trustee; (h) deal with property to which the bankrupt is beneficially entitled as tenant in tail in the same manner as the bankrupt could deal with it if he or she were not a bankrupt; (i) obtain such advice or assistance as he or she considers desirable relating to the administration of the estate or to the conduct or affairs of the bankrupt; (ia) refer any dispute to arbitration; (j) bring, institute or defend any action or other legal proceeding relating to the administration of the estate; (k) execute powers of attorney, deeds or other instruments for the purpose of carrying the provisions of this Act into effect; and (m) employ the bankrupt:
(i) to superintend the management of the whole, or a part, of the property of the bankrupt;
(ii) to carry on the bankrupt's trade or business for the benefit of the bankrupt's creditors; or
and, in consideration of the bankrupt's services, make such allowance to the bankrupt out of the estate as the trustee considers reasonable;
(iii) to assist in any other way in administering the property of the bankrupt;
(ma) make such allowance out of the estate as he or she thinks just to the bankrupt, the spouse or de facto partner of the bankrupt or the family of the bankrupt;
Note:
See also subsection 5(6).
(n) superintend the management of the whole, or a part, of the property of the bankrupt; (o) administer the property of the bankrupt in any other way.[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 134(1) of the Act is modified by inserting para (ba), substituting "estate of the deceased debtor" for "bankrupt" in para (a), (aa), (ab) and (da), substituting "in the administration of the deceased debtor's estate" for "in the bankruptcy" in para (da), substituting "deceased debtor's estate" for "bankrupt" (wherever occurring) in para (e), substituting "in the administration of the deceased debtor's estate" for "in the bankruptcy" in para (f), substituting "deceased debtor" for "bankrupt" in para (g), substituting para (h), substituting "deceased debtor" for "bankrupt" in para (i), substituting "the legal personal representative of the deceased debtor" for "the bankrupt" (first occurring) in para (m), substituting "the estate of the deceased debtor" for "the bankrupt" in para (m)(i), substituting "estate's" for "bankrupt's" (wherever occurring) in para (m)(ii), substituting "estate" for "bankrupt" in para (m)(iii), substituting "services of the legal personal representative of the deceased debtor, pay such remuneration to the legal personal representative for "bankrupt's services, make such allowance to the bankrupt" in para (m), substituting para (ma) and substituting "the estate of the deceased debtor" for "the bankrupt" in para (n) and (o):
]
(ba) carry on a business of the debtor in accordance with an authorisation given under subsection (4);
(h) deal with property to which the estate of the deceased debtor is beneficially entitled as tenant in tail in the same manner as the legal personal representative of the deceased debtor could deal with it if the estate were not being administered under Part XI;
(ma) pay such remuneration out of the estate of the deceased debtor as the trustee thinks fit to the legal personal representative of the deceased debtor.
134(1A)
An allowance made to the bankrupt in pursuance of paragraph (1)(m) may be reduced by the Court upon the application of an interested person.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 134(1A) of the Act is modified by substituting "Remuneration paid to the legal personal representative of the deceased debtor" for "An allowance made to the bankrupt".]
134(2)-(2A)
(Omitted by No 44 of 1996, Sch 1, Pt 1(240).)
134(3)
Subject to this Act, the trustee may use his or her own discretion in the administration of the estate.
134(4)
(Repealed by No 11 of 2016)
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 134 of the Act is modified by inserting the subsections:
134(4)
If a personal insolvency agreement provides for the business of the debtor to be assigned to the trustee, the agreement may:
(a) authorise the trustee to carry on a business of a debtor; and
(b) specify the period during which, and the conditions (if any) subject to which, the trustee may carry on the business.
134(5)
The creditors may vary or terminate an authority under subsection (4) by passing a special resolution to that effect at a meeting.
134(6)
and/or:
]
134(4)
In this section:legal personal representative
, of a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
(Repealed by No 131 of 2002)
Where any property of the bankrupt is subject to a mortgage, the trustee may, upon giving 6 months' notice in writing to the mortgagee of his or her intention to do so or upon paying 6 months' interest in lieu of notice, require the mortgagee to discharge the mortgage notwithstanding that the due time for payment of the moneys owing under the mortgage has not arrived and, upon tender of the moneys secured by the mortgage and, if appropriate, interest in lieu of notice, the mortgagee is bound to execute such documents as are necessary in consequence of the payment.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 136(1) of the Act is modified by substituting "Where any property of the debtor that is subject to the personal insolvency agreement is also subject to a mortgage" for "Where any property of the bankrupt is subject to a mortgage".]
136(2)
The rights conferred on the trustee by subsection (1) are in addition to any rights to pay off the whole or part of the moneys secured by the mortgage before the due time conferred on the mortgagor by the mortgage instrument or by a law of a State or Territory.
SECTION 137 RIGHT OF TRUSTEE TO INSPECT GOODS HELD AS SECURITY 137(1)
Where goods of a bankrupt are held by a person by way of security, the trustee may, after giving notice in writing of his or her intention to do so, inspect the goods.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 137(1) of the Act is modified by substituting "Where goods of a debtor that are subject to a personal insolvency agreement" for "Where goods of a bankrupt".]
137(2)
Where notice has been given under subsection (1), the person holding the goods is not entitled to realize his or her security until he or she has given the trustee a reasonable opportunity of inspecting the goods and of exercising his or her right of redemption if he or she thinks fit to do so.
137(3)
Nothing in this section affects the rights or title of a bona fide purchaser for value who purchased, or entered into an agreement to purchase, goods held by way of security without notice of the fact that the person from whom the goods were purchased or with whom the agreement to purchase the goods was made had received a notice under this section.
SECTION 138 LIMITATION OF TRUSTEE'S POWER IN RESPECT OF COPYRIGHT, PATENTS ETC. 138(1)
Where: (a) the property of a bankrupt includes rights in respect of industrial property; and (b) the bankrupt is liable to pay royalties or a share of profits to a person in respect of those rights;
the trustee is not entitled:
(c) to exercise those rights except upon condition that he or she pays to that person such sums by way of royalty or share of profits as would have been payable by the bankrupt; or (d) without the consent of that person or of the Court, to assign or transfer, or grant any licence or permission in respect of, those rights, except upon terms that will secure to that person payments by way of royalty or share of profits at a rate not less than that at which the bankrupt was liable to pay.[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 138(1) of the Act is modified by substituting para (a) and (b), substituting "the debtor" for "the bankrupt" in para (c) and (d), substituting "an estate of a deceased debtor" for "a bankrupt" in para (a) and substituting "estate" for "bankrupt" in para (b), (c) and (d):
]
(a) the property of a debtor that is subject to a personal insolvency agreement includes rights in respect of industrial property; and
(b) the debtor is liable to pay royalties or a share of profits to a person in respect of those rights;
138(2)
In this section:
(a) the copyright in any work;
(b) a patent in respect of an invention;
(c) a registered trade mark; or
(d) the copyright in a registered design.
registered design
means a design registered under a law of the Commonwealth relating to industrial designs.
registered trade mark
means a trade mark registered under a law of the Commonwealth relating to trade marks.
SECTION 139 PROTECTION OF TRUSTEE FROM PERSONAL LIABILITY IN CERTAIN CASES 139(1)
Where: (a) the trustee has seized or disposed of any goods in the possession or on the premises of a bankrupt without notice of any claim by any person in respect of those goods; and (b) the goods were not, at the date of the bankruptcy, the property of the bankrupt;
the trustee is not personally liable for any loss or damage arising from the seizure or disposal, or for the costs of proceedings taken in respect of the seizure or disposal, unless the court in which the claim is made is of the opinion that the trustee has been guilty of negligence in respect of the seizure or disposal.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139(1) of the Act is modified by substituting para (a) and (b):
]
(a) the trustee has seized or disposed of any goods in the possession or on the premises of a debtor that are subject to a personal insolvency agreement without notice of any claim by any person in respect of those goods; and
(b) the goods were not, at the date of execution of the personal insolvency agreement, the property of the debtor;
139(2)
The trustee is not personally liable for any rates, land tax or municipal or other statutory charges imposed by or under a law of the Commonwealth or of a State or Territory upon or in respect of property forming part of the estate of the bankrupt, being rates, land tax or municipal or other statutory charges that fall due on or after the date of the bankruptcy, except to the extent, if any, of the rents and profits received by the trustee in respect of that property on or after the date of the bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139(2) of the Act is modified by substituting "that is subject to the personal insolvency agreement, being rates, land tax or municipal or other statutory charges that fall due on or after the date of execution of the personal insolvency agreement, except to the extent, if any, of the rents and profits received by the trustee in respect of that property on or after the date of execution of the personal insolvency agreement" for all the words after "in respect of property".]
139(3)
Where a trustee of the estate of a bankrupt carries on a business previously carried on by the bankrupt, he or she is not personally liable for any payment in respect of long service leave or extended leave for which the bankrupt was liable or for any payment in respect of long service leave or extended leave to which a person employed by him or her in his or her capacity as trustee of the estate of the bankrupt, or the legal personal representative of such a person, becomes entitled after the date of the bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139(3) of the Act is modified by substituting the subsection:
]
139(3)
Where the trustee of a personal insolvency agreement carries on a business previously carried on by the debtor, the trustee is not personally liable for any payment in respect of long service leave or extended leave:
(a) for which the debtor was liable; or
(b) to which a person employed by the trustee in the person's capacity as trustee of the personal insolvency agreement, or the legal personal representative of such a person, becomes entitled after the date of execution of the personal insolvency agreement.
139(4)
This section does not affect any liability of the trustee of the estate of a bankrupt other than personal liability.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139(4) of the Act is modified by substituting "a personal insolvency agreement" for "the estate of a bankrupt".]
Division 4A - Orders in relation to property of entity controlled by bankrupt or from which bankrupt derived a benefit
The trustee of a bankrupt's estate may, at any time within 6 years after the date of the bankruptcy, apply to the Court for an order under this Division in relation to an entity (in this Division called the respondent entity ).
An applicant under section 139A:
(a) shall serve the application on the respondent entity; and
(b) may serve the application on any other person or entity.
At the hearing of an application under section 139A:
(a) the respondent entity may; and
(b) any other person or entity may, with the leave of the Court;
appear, adduce evidence and make submissions.
For the purposes of this Division, the examinable period is:
(a) in the case of an application for an order in relation to a related entity of the bankrupt - the period beginning:
(i) if, at a time or times during the period of 1 year beginning 5 years before the commencement of the bankruptcy, the bankrupt became insolvent - at that time, or at the first of those times, as the case may be; or
and ending on the day on which the application is made; or
(ii) in any other case - 4 years before the commencement of the bankruptcy;
(b) in any other case - the period beginning:
(i) if, at a time or times during the period of 3 years beginning 5 years before the commencement of the bankruptcy, the bankrupt became insolvent - at that time, or at the first of those times, as the case may be; or
and ending on the day on which the application is made.
(ii) in any other case - 2 years before the commencement of the bankruptcy;
139CA(2)
For the purposes of subparagraphs (1)(a)(i) and (b)(i), a rebuttable presumption arises that a bankrupt became insolvent at a time during the period referred to in the relevant subparagraph if it is established that the bankrupt:
(a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor's business transactions and financial position; or
(b) having kept such books, accounts and records, has not preserved them.
SECTION 139D ORDER RELATING TO PROPERTY OF ENTITY OTHER THAN A NATURAL PERSON
Where, on an application under section 139A for an order in relation to a respondent entity other than a natural person, the Court is satisfied that:
(a) the bankrupt supplied personal services to, or for or on behalf of, the respondent entity at a time or times, during the examinable period and before the end of the bankruptcy, when the bankrupt controlled the entity in relation to the supply of those services;
(b) either:
(i) the bankrupt received for those services no remuneration in money or other property; or
(ii) the remuneration in money or other property that the bankrupt received for those services was substantially less in amount or value than a person supplying those services in similar circumstances might reasonably be expected to have received if the person had dealt with the entity at arm's length in relation to the supply of those services;
(c) during the examinable period, the entity acquired an estate in particular property as a direct or indirect result of, or of matters including, the supply by the bankrupt of those services;
(d) the bankrupt used, or derived (whether directly or indirectly) a benefit from, the property at a time or times during the examinable period when the bankrupt controlled the entity in relation to the property; and
(e) the entity still has an estate in the property;
subsections (2) and (3) have effect, whether or not the bankrupt has ever had an estate in the property.
The Court may, by order, vest in the applicant:
(a) the entity's estate in the whole, or in a specified part, of the property; or
(b) a specified estate in the whole, or in a specified part, of the property, being an estate that could, by virtue of the entity's estate in the property, be so vested by or on behalf of the entity.
The Court may make an order directing:
(a) the execution of an instrument;
(b) the production of documents of title; or
(c) the doing of any other act or thing;
in order to give effect to an order under this section made on the application.
If, on an application under section 139A for an order in relation to a respondent entity that is a natural person, the Court is satisfied that:
(a) during the examinable period, the entity acquired an estate in particular property as a direct or indirect result of financial contributions made by the bankrupt during that period; and
(b) the bankrupt used, or derived (whether directly or indirectly) a benefit from, the property at a time or times during the examinable period; and
(c) the entity still has the estate in the property;
the Court may make an order of a kind referred to in subsections 139D(2) and (3), whether or not the bankrupt has ever had an estate in the property.
Where, on an application under section 139A for an order in relation to a respondent entity other than a natural person, the Court is satisfied that:
(a) the bankrupt supplied personal services to, or for or on behalf of, the respondent entity at a time or times, during the examinable period and before the end of the bankruptcy, when the bankrupt controlled the entity in relation to the supply of those services;
(b) either:
(i) the bankrupt received for those services no remuneration in money or other property; or
(ii) the remuneration in money or other property that the bankrupt received for those services was substantially less in amount or value than a person supplying those services in similar circumstances might reasonably be expected to have received if the person had dealt with the entity at arm's length in relation to the supply of those services; and
(c) the entity's net worth at a particular time during the examinable period exceeded by a substantial amount what might reasonably be expected to have been the entity's net worth at the last-mentioned time if those services had not been supplied;
subsection (2) has effect.
The Court may by order direct:
(a) if the entity is a partnership - a partner or partners in the partnership; or
(b) in any other case - the entity;
to pay to the applicant a specified amount not exceeding the amount referred to in paragraph (1)(c).
If, on an application under section 139A for an order in relation to a respondent entity that is a natural person, the Court is satisfied that:
(a) during the examinable period, the value of the entity's interest in particular property increased as a direct or indirect result of financial contributions made by the bankrupt during that period; and
(b) the bankrupt used, or derived (whether directly or indirectly) a benefit from, the property at a time or times during the examinable period;
the Court may, by order, direct the entity to pay to the applicant a specified amount not exceeding the amount by which the value of the entity's interest in the property increased as a result of the financial contributions made by the bankrupt.
In considering whether or not to make under section 139D or 139DA a particular order relating to property in which the respondent entity has an estate, the Court shall take account of:
(a) the nature and extent of any estate that any other person or entity has in the property and any hardship that the order might cause that other person or entity; and
(b) the respondent entity's current net worth and any hardship the order might cause the respondent entity's creditors.
In considering whether or not to make a particular order under section 139E or 139EA, the Court shall take account of the respondent entity's current net worth and any hardship the order might cause the entity's creditors.
Where: (a) the Court makes an order under section 139D or 139DA vesting in a person an estate in property; and (b) a law of the Commonwealth, of a State or of a Territory requires the creation, transfer or transmission of estates in that property to be registered;
that estate vests in equity in the person by virtue of the order but does not so vest at law until the requirements of that law have been complied with.
139G(2)
Where the Court makes under section 139D or 139DA an order directing the execution of an instrument and: (a) a person has refused or failed to comply with the direction; or (b) for any other reason, the Court thinks it necessary to exercise its powers under this subsection;
the Court may, by order, appoint the Registrar:
(c) to execute the instrument in the name of a person; and (d) to do all acts and things necessary to give effect to the instrument.139G(3)
An order by the Court under section 139E or 139EA is enforceable as if it were an order for the payment of money made by the Court when exercising jurisdiction otherwise than under this Act.
Where, on an application under section 139A, the Court makes an order under section 139D or 139DA vesting in the applicant an estate in property, or an order under section 139E or 139EA directing the payment of a specified amount to the applicant, the respondent entity may claim for dividend in the bankruptcy in respect of the value of that property as at the making of the order, or in respect of the specified amount, as the case may be.
139H(2)
A claim under subsection (1) shall be postponed until all claims of the other creditors (including claims for interest on interest-bearing debts in respect of a period after the date of the bankruptcy but not including claims under subsection 120(4)) have been satisfied.
Division 4B - Contribution by bankrupt and recovery of property
The objects of this Division are:
(a) to require a bankrupt who derives income during the bankruptcy to pay contributions towards the bankrupt's estate; and
(b) to enable the recovery of certain money and property for the benefit of the bankrupt's estate.
In this Division, unless the contrary intention appears:
actual income threshold amount,
at the time an assessment is made in relation to a contribution assessment period, means:
(a) if the bankrupt does not have any dependants at that time - the base income threshold amount; or
(b) if the bankrupt has one dependant at that time - the base income threshold amount increased by 18%; or
(c) if the bankrupt has 2 dependants at that time - the base income threshold amount increased by 27%; or
(d) if the bankrupt has 3 dependants at that time - the base income threshold amount increased by 32%; or
(e) if the bankrupt has 4 dependants at that time - the base income threshold amount increased by 34%; or
(f) if the bankrupt has more than 4 dependants at that time - the base income threshold amount increased by 36%.
assessment,
in relation to a contribution assessment period, means the original assessment or a subsequent assessment in respect of that period.
base income threshold amount,
at the time when an assessment is made in relation to a contribution assessment period, means:
(a) for a contribution assessment period of one year - 3.5 times the amount that, at that time, is specified in column 3, item 2, Table B, point 1064-B1, Pension Rate Calculator A, in the Social Security Act 1991; or
(b) for a contribution assessment period less than one year - a proportionally smaller amount based on the number of whole days in the period.
contribution assessment period,
in relation to a bankrupt, means a period that:
(a) begins on the day the bankrupt becomes a bankrupt or an anniversary of that day during the bankruptcy; and
(b) ends one year after that day or anniversary, as the case requires, or if the bankrupt is discharged or the bankruptcy is annulled within that year, ends upon the discharge or annulment.
dependant,
in relation to a bankrupt in relation to a contribution assessment period, means a person who satisfies all the following conditions:
(a) the person resides with the bankrupt;
(b) the person is wholly or partly dependent on the bankrupt for economic support;
(c) the income derived (or likely to be derived) by the person during the contribution assessment period is not more than the amount prescribed by the regulations for the purposes of this paragraph.
For the purposes of this definition, income has its ordinary meaning.
derived
means earned, derived or received from any source, whether within or outside Australia.
income,
in relation to a bankrupt, has the meaning given by section 139L.
income tax
includes Medicare levy.
original assessment,
in relation to a contribution assessment period, means the assessment made by the trustee under subsection 139W(1) in respect of that period.
spouse,
in relation to a bankrupt, includes a de facto partner of the bankrupt.
subsequent assessment,
in relation to a contribution assessment period, means an assessment made by the trustee under subsection 139W(2) in respect of that period.
value,
in relation to property referred to in a notice, means the market value of the property when the notice is given.
In this Division:
income,
in relation to a bankrupt, has its ordinary meaning, subject to the following qualifications:
(a) the following are income in relation to a bankrupt (whether or not they come within the ordinary meaning of "income"):
(i) an annuity or pension paid to the bankrupt from a provident, benefit, superannuation, retirement or approved deposit fund;
(ia) an annuity or pension paid to the bankrupt from an RSA;
(ii) a payment to the bankrupt in consequence of a termination of any office or employment;
(iii) an amount of annuity or pension received by the bankrupt under a policy of life insurance or endowment insurance;
(iv) an amount received by the bankrupt as a beneficiary under a trust to the extent that the amount was paid out of income of the trust;
(v) the value of a benefit that:
(A) is provided in any circumstances by any person (the provider ) to the bankrupt; andbeing that value as worked out in accordance with the provisions of that Act but subject to any modifications of any provisions of that Act made by the regulations under this Act;
(B) is a benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 as in force at the beginning of 1 July 1992 (other than a benefit that would be an exempt benefit for the purposes of that Act if the provider were the employer of the bankrupt as an employee and the provider had provided the benefit in respect of the employment of the bankrupt);
(vi) the value of a loan made to the bankrupt by an associated entity of the bankrupt, including:
(A) a loan under which the loan money is not paid to the bankrupt, but is paid or applied at the bankrupt's direction; and
(B) a loan that is not enforceable at law or in equity;
(vii) the amount of any money, or the value of any other consideration, received by a person other than the bankrupt from another person as a result of work done or services performed by the bankrupt, less any expenses (other than expenses of a capital nature) necessarily incurred by the first-mentioned person in connection with the work or services;
(b) the following are not income in relation to a bankrupt (even if they come within the ordinary meaning of "income"):
(i) an amount paid to the bankrupt:
(A) from the Child Support Account established under the Child Support (Registration and Collection) Act 1988; or
(B) from another source for the maintenance of children of whom the bankrupt has custody; or
(ii) (Repealed by No 131 of 2002)
(iii) (Omitted by No 45 of 1998, Sch 13, item 4.)
(iv) a payment to the bankrupt under:
(A) a legal aid scheme or service established under a law of the Commonwealth or of a State or Territory; or
(B) a legal aid scheme or service approved by the Attorney-General for the purposes of paragraph 2(4)(a) of the Federal Court of Australia Regulations; or
(C) any other legal aid scheme or service established to provide assistance to people on low incomes;
(v) a payment or amount that the regulations provide is not income of the bankrupt.
pension
includes a pension within the meaning of the Superannuation Industry (Supervision) Act 1993.
139L(2)
For the purposes of the application of the definition of income in subsection (1) to Subdivision HA, a reference in that definition to a bankrupt includes a reference to a person who has been discharged from bankruptcy.
Note:
Subdivision HA deals with the supervised account regime.
SECTION 139M DERIVATION OF INCOME 139M(1) [Income taken to be derived]
Income is taken to be derived by a bankrupt for the purposes of this Division even though it is not actually received by the bankrupt because:
(a) an amount is deducted from it, or it is wholly or partly otherwise applied, under a law of the Commonwealth, of a State or of a Territory; or
(b) it is reinvested, accumulated or capitalised; or
(c) it is dealt with on behalf of the bankrupt or as the bankrupt directs. 139M(2) [Income bankrupt likely to derive]
A reference in this Division to the income that a bankrupt is likely to derive during a contribution assessment period includes a reference to income that the bankrupt has derived during that period.
139M(3) [Reference to income derived includes]A reference in this Division to income derived by a bankrupt during a contribution assessment period includes a reference to income so derived in respect of work done or services performed by the bankrupt before that period or work to be done or services to be performed by the bankrupt after that period.
The income that is likely to be derived, or was derived, by a bankrupt during a contribution assessment period:
(a) is taken to be reduced by:
(i) any amount that the bankrupt pays or is likely to be liable to pay, or paid or was liable to pay, as the case may be, during that period in respect of income tax (but not including any amount that is in respect of a provable debt); and
(ii) (Omitted by No 44 of 1996)
(iii) if the bankrupt pays or is likely to be liable to pay, or paid or was liable to pay, as the case may be, during that period an amount for the support of a child pursuant to a maintenance agreement entered into under the Family Law Act 1975 or under a maintenance order - so much of that amount as does not exceed the maximum amount that, but for that agreement or order, the bankrupt could be, or could have been, liable to pay during that period in respect of child support under the Child Support (Assessment) Act 1989; and
(b) is taken to be increased by any amount that thebankrupt receives or is likely to receive, or received or was entitled to receive, as the case may be, during that period as a refund of income tax.
A refund is not taken into account under paragraph (1)(b) if it relates to a year of income that ended before the date of the bankruptcy.
If a refund relates to a year of income that commenced before, but ended after, the date of the bankruptcy, then it is taken into account under paragraph (1)(b) only to the extent that the refund is attributable to the part of the year of income after the date of bankruptcy. For this purpose, the refund is apportioned on a time basis.
Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment exceeds the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is liable to pay to the trustee a contribution in respect of that period.
139P(2) [Not liable to pay - subject to sec 139Q]Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment does not exceed the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is not liable to, but may if he or she so wishes, pay to the trustee a contribution in respect of that period.
If the income that a bankrupt is likely to derive, or derived, during a contribution assessment period as assessed by the trustee under a subsequent assessment exceeds the actual income threshold amount applicable in relation to the bankrupt when the subsequent assessment is made, the bankrupt is liable to pay to the trustee a contribution in respect of that period.
139Q(2) [Liability under subsec (1) etc]The liability of the bankrupt under subsection (1) in respect of a contribution assessment period is in substitution for any liability of the bankrupt in respect of that period under subsection 139P(1) or under any previous application of subsection (1) of this section and has effect despite subsection 139P(2).
139Q(3) [Income as assessed under subsequent assessment does not exceed etc]If the income that a bankrupt is likely to derive, or derived, during a contribution assessment period as assessed by the trustee under a subsequent assessment does not exceed the actual income threshold amount applicable in relation to the bankrupt when the subsequent assessment is made:
(a) the bankrupt is not liable to, but may if he or she so wishes, pay to the trustee a contribution in respect of that income; and
(b) any liability that the bankrupt had under subsection 139P(1) or under subsection (1) of this section to pay a contribution in respect of that period is extinguished.
Any liability of a bankrupt under section 139P or 139Q is not affected by his or her discharge from bankruptcy after the making of the assessment that gave rise to the liability.
The contribution that a bankrupt is liable to pay in respect of a contribution assessment period is the amount worked out in accordance with the formula:
|
Assessed income − Actual income threshold amount
2 |
where:
Assessed income
means the amount assessed by the trustee to be the income that the bankrupt is likely to derive, or derived, during the contribution assessment period.
Actual income threshold amount
means the actual income threshold amount assessed by the trustee to be applicable in relation to the bankrupt when the assessment is made.
(a) the trustee has made an assessment of a contribution that a bankrupt is liable to pay to the trustee for a contribution assessment period; and
(b) the bankrupt considers that, if required to pay that contribution, he or she will suffer hardship for a reason or reasons set out in subsection (2);
the bankrupt may apply in writing to the trustee for the making of a determination under this section for that period.
139T(2) [Reasons justifying hardship](a) the bankrupt or a dependant of the bankrupt suffers from an illness or disability that requires on-going medical attention and the supply of medicines, and the bankrupt is required to meet a substantial proportion of the costs of that medical attention or those medicines from his or her income;
(b) the bankrupt is required to make payments from his or her income to meet the cost of child day-care to enable the bankrupt to continue in employment or other work;
(c) the bankrupt is living in rented accommodation that is not provided by:
(i) the Commonwealth, a State or a Territory; or
(ii) an authority of the Commonwealth, a State or a Territory; or
and the bankrupt is required to pay the cost of that accommodation wholly or mainly from his or her income;
(iii) a local government authority;
(d) the bankrupt incurs substantial expense in travelling to and from the bankrupt's place of employment or other work, whether by public transport or otherwise;
(e) the spouse of the bankrupt, or another person residing with the bankrupt, who ordinarily contributes to the costs of maintaining the bankrupt's household has become unable to contribute to those costs because of unemployment, illness or injury;
(f) any other reason prescribed by the regulations. 139T(3) [Evidence required]
The trustee must not make a determination under this section unless the bankrupt provides satisfactory evidence of the bankrupt's income and expenses, and any other matters on which the bankrupt relies to establish the reasons for the application.
139T(4) [Trustee to decide no later than 30 days]The trustee must decide the application as soon as practicable, and in any event not later than 30 days, after the day on which the application is received.
139T(5) [After 30 days refusal assumed]If the trustee does not make a decision on the application within that period of 30 days, the trustee is taken to have made a decision at the end of that period refusing the application.
139T(6) [Making the determination]If the trustee is satisfied that the bankrupt will suffer hardship if required to pay the contribution, the trustee may determine that, for the purposes of the application of section 139S in relation to the bankrupt in respect of the contribution assessment period, the actual income threshold amount that was applicable in relation to the bankrupt when the assessment was made is taken to have been increased to such amount as the trustee determines.
139T(7) [Refusing the application]If the trustee is not satisfied that the bankrupt will suffer hardship if required to pay the contribution, the trustee must refuse the application.
139T(8) [Assessment of bankrupt's income and contribution]If the trustee makes a determination under subsection (6), the trustee must make such assessment under section 139W as is necessary to give effect to the determination.
139T(9) [Trustee must give bankrupt written notice]The trustee must give written notice to the bankrupt:
(a) setting out the trustee's decision on the application; and
(b) referring to the evidence or other material on which the decision was based; and
(c) giving the reasons for the decision. 139T(10) [Notice must include review option]
The notice must include a statement to the effect that the bankrupt may request the Inspector-General to review the decision.
139T(11) [Absence of review information]A contravention of subsection (10) in relation to a decision does not affect the validity of the decision.
139T(12) [Review]The trustee's decision under this section is reviewable under Subdivision G in the same way as an assessment made by the trustee.
A bankrupt must, as soon as practicable, and in any event not later than 21 days, after the end of a contribution assessment period, give to the trustee:
(a) a statement:
(i) setting out particulars of all the income that was derived by the bankrupt during that contribution assessment period; and
(ia) setting out particulars of all the income that was derived by each dependant of the bankrupt during that contribution assessment period; and
(ii) indicating what income (if any) the bankrupt expects to derive during the next contribution assessment period; and
(iii) indicating what income (if any) the bankrupt expects each dependant of the bankrupt to derive during the next contribution assessment period; and
(b) such books evidencing the derivation of the income referred to in subparagraph (a)(i) as are in the possession of the bankrupt or the bankrupt can readily obtain.
Penalty: Imprisonment for 6 months.
The particulars that a bankrupt is required to include in a statement given to the trustee under subparagraphs (1)(a)(i) and (ia) are all the particulars that are known to the bankrupt and any particulars that the bankrupt can readily obtain.
Without limiting the generality of paragraph (1)(b), the books that a bankrupt is required to give to the trustee under that paragraph in respect of a contribution assessment period include:
(a) if the bankrupt received from his or her employer one or more pay slips or other documents evidencing salary or wages paid to him or her by that employer during that period - that document or each of those documents; and
(b) any copy of a group certificate or payment summary (within the meaning of section 16-170 in Schedule 1 to the Taxation Administration Act 1953) in the possession of the bankrupt that relates in whole or in part to that period; and
(c) any statement provided to the bankrupt by an ADI or other financial institution that shows periodic payments made during that period to an account kept by the bankrupt (either alone or jointly with any other person) with that institution; and
(d) any notice of assessment issued to the bankrupt under the Income Tax Assessment Act 1936 in respect of a year of income in which that period is included; and
(e) if the bankrupt is in receipt of a pension, allowance or other benefit under a law of the Commonwealth, of a State or of a Territory - any letter or other document sent or given to the bankrupt by the Department or authority that administers the legislation or scheme under which the benefit is provided.
If the trustee has reasonable grounds to suspect that:
(a) any particulars set out in the statement given by the bankrupt under subsection 139U(1) are false or misleading in a material respect; or
(b) any material particulars have been omitted from that statement;
then, for the purpose of enabling the trustee to decide whether the particulars set out in the statement are correct, the trustee, by written notice given to the bankrupt, may require the bankrupt to give to the trustee within a specified period of not less than 14 days such information or books as are specified in the notice.
As soon as practicable after the start of each contribution assessment period in relation to a bankrupt, the trustee is to make an assessment of the income that is likely to be derived, or was derived, by the bankrupt during that period, of the actual income threshold amount that is applicable in relation to the bankrupt when the assessment is made and of the contribution (if any) that the bankrupt is liable to pay in respect of that period under section 139S.
If at any time, whether during or after a contribution assessment period, any one or more of the following paragraphs applies or apply:
(a) the trustee is satisfied that the income that is likely to be derived, or was derived, by the bankrupt during that period is or was greater or less than the amount of that income as assessed by the last preceding assessment in respect of that period;
(b) the base income threshold amount increased or decreased after the making of the last preceding assessment in respect of that period and before the end of that period;
(c) the trustee is satisfied that the number of the bankrupt's dependants increased or decreased after the making of the last preceding assessment and before the end of that period;
the trustee is to make a fresh assessment of the income that is likely to be derived, or was derived, by the bankrupt during that period, of the actual income threshold amount that is applicable in relation to the bankrupt when the assessment is made and of the contribution (if any) that the bankrupt is liable to pay in respect of that period.
The powers of the trustee under subsection (2) may be exercised on the trustee's own initiative or at the bankrupt's request, but the trustee is not required to consider whether to exercise those powers at the bankrupt's request unless the bankrupt satisfies the trustee that there are reasonable grounds for the trustee to do so.
As soon as practicable after the making of an assessment the trustee must give to the bankrupt written notice setting out particulars of the assessment and informing the bankrupt about the possibility of a variation under section 139T.
An assessment under section 139W (including a fresh assessment referred to in subsection 139W(2)) for a contribution assessment period may be made at any time, including:
(a) a time after the end of the contribution assessment period; or
(b) a time after the bankrupt is discharged. 139WA(2) [Former bankrupt]
For the purpose of applying subsection (1), a reference in this Division to a bankrupt includes a reference to a former bankrupt.
In making an assessment of the income that is likely to be derived, or was derived, by a bankrupt during a contribution assessment period the trustee may have regard to any information provided by the bankrupt or any other information in the trustee's possession.
139X(2) [Incorrect information - may disregard]If the trustee considers that any information provided by the bankrupt is or may be incorrect, the trustee may disregard that information and may make an assessment on the basis of what the trustee considers to be the correct information.
(a) the bankrupt is engaging or has engaged during a contribution assessment period in employment or other work or in activities that resemble employment or other work; and
(b) the bankrupt does not receive or did not receive any remuneration in respect of the employment, work or activities or receives or received remuneration that is less than the remuneration (in this subsection called the reasonable remuneration ) that:
(i) in the case of employment where an industrial instrument prescribes rates or minimum rates of salary or wages for the employment - might reasonably be expected to be or to have been received by the bankrupt in respect of the employment by virtue of the industrial instrument; or
(ii) in any other case - might reasonably be expected to be or to have been received by a person who engaged in similar employment, work or activities where there was no relationship or other connection between that person and the person for whom the employment, work or activities were carried out;
then, for the purpose of making an assessment, the trustee may determine that the bankrupt receives or received the reasonable remuneration in respect of the employment, work or activities.
(a) the bankrupt enters or entered during a contribution assessment period into any transaction that might reasonably be expected to produce or to have produced income; and
(b) the bankrupt does not derive or did not derive any income from the transaction or derives or derived income that is less than the income (in this subsection called the reasonable income ) that might reasonably be expected to be or to have been derived if the transaction were or had been entered into at arm's length;
then, for the purpose of making an assessment, the trustee may determine that the bankrupt derives or derived the reasonable income from the transaction.
(a) does not provide information about whether he or she is likely to derive, or derived, income or a particular class of income during a contribution assessment period; or
(b) claims not to be likely to derive, or not to have derived, any income or a particular class of income during a contribution assessment period;
but the trustee has reasonable grounds for believing that the bankrupt is likely to derive, or derived, income, or income of that class, during that period, then, for the purpose of making an assessment, the trustee may determine that the bankrupt is likely to derive, or derived, income, or income of that class, during that period and may also determine the amount of that income.
139Z(2) [Trustee may take into account]Without limiting the matters that a trustee may take into account for the purpose of making an assessment as mentioned in subsection (1) in respect of a contribution assessment period, the trustee may have regard to any employment or other work or other income-producing activities that were engaged in by the bankrupt before that period and may determine whether the bankrupt is likely to engage, or to have engaged, in similar employment, work or other income-producing activities during that period.
The Inspector-General may review a decision of a trustee to make an assessment:
(a) on the Inspector-General's own initiative; or
(b) if requested to do so by the bankrupt for reasons that appear to the Inspector-General to be sufficient to justify such a review.
139ZA(2)
The Inspector-General must review such a decision if requested to do so by the Ombudsman.
139ZA(3)
A request by the bankrupt to the Inspector-General for the review of such a decision must:
(a) be in writing and given to the Inspector-General not later than 60 days after the day on which the bankrupt is notified of the trustee's assessment; and
(b) be accompanied by:
(i) a copy of the notice of assessment; and
(ii) any documents on which the bankrupt relies in support of the request.
139ZA(4)
(Repealed by No 132 of 2015)
139ZA(5)
Within 60 days after the request is received, the Inspector-General must:
(a) decide whether to review the decision; and
(b) if the Inspector-General decides to review the decision - make his or her decision on the review.
(Omitted by No 44 of 1996, Sch 1, Pt 1(260).) SECTION 139ZC INSPECTOR-GENERAL MAY REQUEST FURTHER INFORMATION 139ZC(1) [May ask bankrupt etc - trustee etc]
For the purposes of the exercise of powers under this Subdivision, the Inspector-General may:
(a) ask the bankrupt to provide such further information, either orally or in writing, in support of the request as the Inspector-General specifies; and
(b) ask the trustee toprovide such information, either orally or in writing, about the decision to make the assessment and the reasons for the decision as the Inspector-General specifies. 139ZC(2) [Record in writing]
If any information is provided orally, the Inspector-General must record it in writing.
On a review of a decision, the Inspector-General has all the powers of the trustee and may either:
(a) confirm the decision; or
(b) set aside the decision and make a fresh assessment under subsection 139W(2).
If the Inspector-General: (a) reviews a decision; or (b) refuses a request by a bankrupt for a review of a decision;
the Inspector-General must give written notice, to the bankrupt and the trustee, of the Inspector-General's decision on the review or on the request, as the case may be.
139ZE(2)
The notice must: (a) set out the decision; and (b) refer to the evidence or other material on which the decision was based; and (c) give the reasons for the decision.
139ZE(3)
In the case of a decision reviewing the trustee's decision to make an assessment, the notice must also include a statement to the effect that, if the bankrupt or the trustee, is dissatisfied with the Inspector-General's decision, application may, subject to the Administrative Review Tribunal Act 2024, be made to the Administrative Review Tribunal for review of the decision.
139ZE(4)
In the case of a decision refusing a request to review the trustee's decision to make an assessment, the notice to the bankrupt must also include a statement to the effect that, if the bankrupt is dissatisfied with the Inspector-General's decision, application may, subject to the Administrative Review Tribunal Act 2024, be made to the Administrative Review Tribunal for a review of the decision.
139ZE(5)
A contravention of subsection (3) or (4) in relation to a decision does not affect the validity of the decision.
139ZE(6)
If, within 60 days after lodgment of a request by a bankrupt for the review of the trustee's decision to make an assessment, the Inspector-General has not given written notice to the bankrupt of his or her decision in accordance with subsection (1), the Inspector-General is taken to have reviewed the trustee's decision and confirmed it under paragraph 139ZD(a).
139ZE(7)
If the Inspector-General makes a fresh assessment, the Inspector-General must, as soon as practicable, give to the bankrupt written notice setting out particulars of the fresh assessment.
139ZE(8)
This Division, apart from this Subdivision, applies to an assessment made by the Inspector-General as if it had been made by the trustee under subsection 139W(2).
An application may be made to the Administrative Review Tribunal for the review of: (a) a decision of the Inspector-General on the review of a decision by a trustee to make an assessment; or (b) a decision by the Inspector-General refusing a request to review a decision by a trustee to make an assessment.
Subject to subsection 139ZI(3), a contribution that a person is liable to pay under subsection 139P(1) or 139Q(1) is payable at such time as the trustee determines or, if the trustee permits the contribution to be paid by instalments, at such times and in such amounts as the trustee determines.
139ZG(2)
The liability of a person to pay a contribution under subsection 139P(1) or 139Q(1) is not affected by: (a) the making of an application by the person to the trustee under subsection 139T(1); or (b) the making by the person of a request to the Inspector-General for a review of the decision of the trustee to make the assessment that gave rise to the liability; or (c) the making of an application to the Administrative Review Tribunal for review of the decision of the Inspector-General.
139ZG(3)
The total of any contributions or instalments that are not paid by the bankrupt is recoverable by the trustee as a debt due to the estate of the bankrupt.
139ZG(4)
The trustee may, in connection with proceedings to recover the debt: (a) sign a certificate setting out the nature and the amount of the debt; and (b) file the certificate in the court in which the proceedings have been instituted.
139ZG(5)
In such proceedings, the certificate is prima facie evidence of the existence of the debt and the amount of the debt.
SECTION 139ZH IF EXCESS CONTRIBUTION PAID 139ZH(1) [Not entitled to refund]
(a) a person has paid an amount in respect of the contribution that the person was assessed to be liable to pay in respect of a contribution assessment period; and
(b) as a result of a subsequent assessment:
(i) the person is not liable to pay a contribution in respect of that period; or
(ii) the amount referred to in paragraph (a) exceeds the amount of the contribution that the person is liable to pay in respect of that period;
the person is not entitled to a refund of the amount paid or of the excess, as the case may be.
139ZH(2) [Trustee to apply contribution]If a person has paid in respect of a contribution assessment period an amount that, because of a subsequent assessment made in respect of that period, the person was not liable to pay, the trustee is to apply that amount in or towards any contribution that the person is liable to pay in respect of a later contribution assessment period.
If the trustee makes a determination under section 139ZG in respect of a person, the trustee must give to the person written notice setting out particulars of the determination.
139ZI(2) [May be contained in notice of assessment]A notice given to a person under subsection (1) may be contained in a notice of assessment.
139ZI(3) [Payment time - must not be earlier than 14 days]The time at which a payment is to be made by a person as a result of a determination made under section 139ZG must not be earlier than 14 days after notice in relation to the determination is given to the person under subsection (1) of this section.
The objects of this Subdivision are:
(a) to improve thelikelihood that a bankrupt will have sufficient money to pay contributions or instalments of contributions; and
(b) to ensure that all monetary income received by the bankrupt is deposited to a single account (the supervised account ); and
(c) to enable the trustee to supervise withdrawals from the account.
In this Subdivision:
bankrupt
includes a person who has been discharged from bankruptcy.
bankrupt to whom the supervised account regime applies
means a bankrupt in respect of whom a determination under subsection 139ZIC(1) is in force.
constructive income receipt arrangement
means an arrangement the effect of which is that income derived by a bankrupt is not actually received by the bankrupt because it is:
(a) reinvested, accumulated or capitalised; or
(b) dealt with on behalf of the bankrupt or as the bankrupt directs.
contribution
means a contribution that a bankrupt is liable to pay under subsection 139P(1) or 139Q(1).
(a) do an act; or
(b) omit to perform an act.
non-monetary income receipt arrangement
means an arrangement the effect of which is that income derived by a bankrupt is not actually received by the bankrupt in monetary form because it is derived in a non-monetary form.
reviewable decision
means a decision of the trustee of a bankrupt's estate:
(a) to make a subsection 139ZIC(1) determination; or
(b) to refuse to revoke a subsection 139ZIC(1) determination; or
(c) to specify a period in a supervised account notice for the purposes of subparagraph 139ZIE(1)(a)(ii); or
(d) to refuse to specify a period in a supervised account notice for the purposes of subparagraph 139ZIE(1)(a)(ii); or
(e) to specify requirements in a supervised account notice for the purposes of subparagraph 139ZIE(1)(a)(ix); or
(f) to refuse to exercise the powers conferred by subsection 139ZIEA(1); or
(g) to refuse to give a consent under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3); or
(h) to vary a consent given under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3); or
(i) to refuse to vary a consent given under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3); or
(j) to revoke a consent given under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3).
supervised account
, in relation to a bankrupt to whom the supervised account regime applies, means an account maintained by the bankrupt in accordance with a supervised account notice that is in force in relation to the bankrupt.
supervised account notice
has the meaning given by subsection 139ZIE(1).
withdraw
, in relation to an account, includes:
(a) transfer out of; and
(b) draw a cheque on; and
(c) do any other thing that results in a debit from.
working day
(Repealed by No 11 of 2016)
The trustee of a bankrupt's estate may, by written notice given to the bankrupt, determine that the supervised account regime applies to the bankrupt.
139ZIC(2) [Liability to pay contributions]The trustee must not make a determination under subsection (1) in relation to the bankrupt unless, at the time the determination is made:
(a) the bankrupt is liable to pay a contribution; and
(b) either:
(i) if the trustee has made a determination under section 139ZG permitting the contribution to be paid by instalments - the bankrupt has not paid the whole of an instalment at or before the time when it became payable; or
(ii) if the trustee has made a determination under section 139ZG requiring the bankrupt to pay the contribution at a specified time - the bankrupt has not paid the whole of the contribution at or before the time when it became payable.
[ CCH Note: S 139ZIC(2)(a), as inserted by No 20 of 2005, s 3 and Sch 2 item 4, applies in relation to a bankrupt who is liable to pay a contribution, whetherthe liability arose before, at or after 18 March 2005.]
A notice under subsection (1) must be in the approved form.
139ZIC(4) [Additional documentation]A notice under subsection (1) must be accompanied by:
(a) a supervised account notice relating to the bankrupt concerned; and
(b) a statement setting out:
(i) the effect of sections 139ZIE to 139ZIT; and
(ii) such other information (if any) as is specified in the regulations.
If a determination is in force under subsection 139ZIC(1) in relation to a bankrupt, the trustee may, by written notice given to the bankrupt, revoke the determination.
139ZID(2) [Current and future payments]The trustee must not revoke the determination unless the trustee is satisfied, having regard to:
(a) the past payment record of the bankrupt; and
(b) any other relevant matters;
that the bankrupt will pay the whole of any current or future contributions or instalments of contributions at or before the time when they become payable.
139ZID(3) [Initiation of power]The power conferred on the trustee by subsection (1) may be exercised:
(a) on his or her own initiative; or
(b) on the application of the bankrupt. 139ZID(4) [Notice of refusal to revoke]
If, following the bankrupt's application, the trustee refuses to revoke the determination, the trustee must give the bankrupt written notice of the refusal.
139ZID(5) [Notice]A notice under subsection (1) must be in the approved form.
(a) a determination is in force under subsection 139ZIC(1) in relation to a bankrupt; and
(b) the bankruptcy is annulled;
the determination ceases to be in force on the date of the annulment.
139ZIDA(2) Discharge - no liability to pay contributions.(a) a determination is in force under subsection 139ZIC(1) in relation to a bankrupt; and
(b) the bankrupt is discharged from the bankruptcy; and
(c) at the time of the discharge, the bankrupt is not liable to pay a contribution;
the determination ceases to be in force at the time of the discharge.
139ZIDA(3) Discharge - continuing liability to pay contributions.(a) a determination is in force under subsection 139ZIC(1) in relation to a bankrupt; and
(b) the bankrupt is discharged from the bankruptcy; and
(c) at the time of the discharge, the bankrupt is liable to pay a contribution;
the determination ceases to be in force when the bankrupt is no longer liable to pay a contribution.
For the purposes of this Subdivision, a supervised account notice is a written notice that is issued by the trustee of a bankrupt's estate and that:
(a) requires the bankrupt, within:
(i) 10 business days after the notice is given to the bankrupt; or
to open an account (a supervised account ) that complies with the following requirements:
(ii) such longer period (if any) as is specified in the notice;
(iii) the account is kept with an ADI;
(iv) the account is kept in Australia;
(v) the account is denominated in Australian currency;
(vi) the account is held solely in the name of the bankrupt;
(vii) deposits may be made to, and withdrawals may be made from, the account;
(viii) the account is designed not to have a debit balance;
(ix) such other requirements (if any) as are specified in the notice; and
(b) requires the bankrupt to inform the ADI, when opening the account, that the account is a supervised account; and
(c) requires the bankrupt, after the account is opened, to maintain the account for so long as the notice is in force.
A supervised account notice must be in the approved form.
139ZIE(3) Compliance with supervised account notice.
A bankrupt to whom the supervised account regime applies must comply with a supervised account notice in force in relation to the bankrupt.
139ZIE(4) When supervised account notice ceases to be in force.A supervised account notice relating to a bankrupt ceases to be in force if the bankrupt ceases to be a bankrupt to whom the supervised account regime applies.
Note:
A supervised account notice may be revoked under subsection 139ZIEA(1).
139ZIE(5) Trustee to be notified of account details.A bankrupt to whom the supervised account regime applies must, within 2 business days after opening a supervised account, give a written notice to the trustee setting out the following information about the supervised account:
(a) the name of the ADI concerned;
(b) the name in which the account is held;
(c) the account number;
(d) the BSB number concerned.
A person commits an offence if:
(a) the person is subject to a requirement under subsection (3) or (5); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty for contravention of this subsection: Imprisonment for 6 months.
If a bankrupt is a bankrupt to whom the supervised account regime applies, the trustee may:
(a) by written notice given to the bankrupt, revoke a supervised account notice relating to the bankrupt; and
(b) issue a fresh supervised account notice relating to the bankrupt, and give the fresh notice to the bankrupt; and
(c) by written notice given to the bankrupt, require the bankrupt, immediately after the account is opened in accordance with the fresh notice, to transfer:
to:
(i) the balance (if any) of the account maintained in accordance with the revoked notice;
(ii) the account opened in accordance with the fresh notice.
139ZIEA(2)
The revocation under paragraph (1)(a) of the supervised account notice takes effect when the bankrupt opens the account in accordance with the fresh supervised account notice.
139ZIEA(3)
Notices under paragraphs (1)(a) and (c) may be set out in the same document.
139ZIEA(4)
The powers conferred on the trustee by subsection (1) may be exercised:
(a) on his or her own initiative; or
(b) on the application of the bankrupt.
139ZIEA(5)
If, following the bankrupt's application, the trustee refuses to exercise the powers conferred by subsection (1), the trustee must give the bankrupt written notice of the refusal.
139ZIEA(6) Offence.
A person commits an offence if:
(a) the person is subject to a requirement under paragraph (1)(c); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty for contravention of this subsection: Imprisonment for 6 months.
A bankrupt to whom the supervised account regime applies must ensure that all monetary income actually received by the bankrupt after the opening of the supervised account is deposited to the account:
(a) if the income is received in the form of cash or cheque - within 5 business days of its receipt; or
(b) in any other case - upon its receipt.
139ZIF(2) Cash refunds.
For the purposes of subsection (1), if:
(a) the bankrupt receives an amount of income in the form of cash; and
(b) before the paragraph (a) amount is deposited to the supervised account, the bankrupt uses a part of that amount to make a refund;
the amount that the bankrupt must deposit to the supervised account is the paragraph (a) amount reduced by the part used as mentioned in paragraph (b).
139ZIF(3)For the purposes of subsection (1), if:
(a) the bankrupt receives an amount of income in the form of cash; and
(b) before the paragraph (a) amount is deposited to the supervised account, the bankrupt uses the whole of that amount to make a refund;
the bankrupt is taken not to have received the paragraph (a) amount.
139ZIF(4) Offence.
A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty for contravention of this subsection: Imprisonment for 12 months.
A bankrupt to whom the supervised account regime applies must not:
(a) make a withdrawal from the supervised account; or
(b) authorise the making of a withdrawal from the supervised account. 139ZIG(2) Exceptions.
Subsection (1) does not apply if the withdrawal is made:
(a) in accordance with the consent of the trustee under subsection (3); or
(b) to pay a contribution or an instalment of a contribution; or
(c) to transfer an amount as required by a notice under paragraph 139ZIEA(1)(c); or
(d) to make a refund; or
(e) to reverse a credit previously made to the account where the credit arose from an error or the dishonour of a cheque; or
(f) to discharge any of the bankrupt's tax liabilities (within the meaning of the Taxation Administration Act 1953); or
(g) to discharge the bankrupt's liability to pay a tax (however described) imposed by or under a law of the Commonwealth, a State or a Territory; or
(h) to recover from the bankrupt an amount equal to an amount of tax (however described) that the ADI concerned has paid or is liable to pay in connection with the operation of the account; or
(i) to discharge a liability of the bankrupt to pay a fee or charge in connection with the operation of the account. 139ZIG(3) Trustee may consent to withdrawals.
The trustee may, by written notice given to the bankrupt, consent to any of the following withdrawals from the supervised account:
(a) a specified withdrawal;
(b) withdrawals included in a specified class of withdrawals;
(c) withdrawals up to a daily, weekly, fortnightly or monthly limit ascertained in accordance with the notice. 139ZIG(4)
The trustee may, by written notice given to the bankrupt, vary or revoke a consent.
139ZIG(5)
The powers conferred on the trustee by subsections (3) and (4) may be exercised:
(a) on his or her own initiative; or
(b) on the application of the bankrupt.
139ZIG(6)
If, following the bankrupt's application, the trustee refuses to exercise a power conferred by subsection (3) or (4), the trustee must give the bankrupt written notice of the refusal.
139ZIG(7) Offence.
A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty: Imprisonment for 12 months.
This section does not affect the exercise of powers conferred by:
(a) section 139ZL of this Act; or
(b) section 260-5 in Schedule 1 to the Taxation Administration Act 1953; or
(c) a similar provision in:
(i) any other law of the Commonwealth; or
(ii) a law of a State or a Territory.
A bankrupt to whom the supervised account regime applies must not enter into a constructive income receipt arrangement.
139ZIH(2)Subsection (1) does not apply if the bankrupt enters into the constructive income receipt arrangement in accordance with the consent of the trustee under subsection (5).
139ZIH(3) Bankrupt not to participate in existing arrangements.
If a bankrupt was participating in a constructive income receipt arrangement immediately before becoming a bankrupt to whom the supervised account regime applies, the bankrupt must, as soon as practicable after becoming such a bankrupt, cease to participate in the arrangement.
139ZIH(4)Subsection (3) does not apply if the bankrupt continues to participate in the constructive income receipt arrangement in accordance with the consent of the trustee under subsection (5).
139ZIH(5) Consent.
The trustee may, by written notice given to the bankrupt:
(a) consent to the bankrupt entering into:
(i) a specified constructive income receipt arrangement; or
(ii) constructive income receipt arrangements included in a specified class of constructive income receipt arrangements; or
(b) consent to the bankrupt continuing to participate in:
(i) a specified constructive income receipt arrangement; or
139ZIH(6)
(ii) constructive income receipt arrangements included in a specified class of constructive income receipt arrangements.
The trustee may, by written notice given to the bankrupt, vary or revoke a consent.
139ZIH(7)
The powers conferred on the trustee by subsections (5) and (6) may be exercised:
(a) on his or her own initiative; or
(b) on the application of the bankrupt.
139ZIH(8)
If, following the bankrupt's application, the trustee refuses to exercise a power conferred by subsection (5) or (6), the trustee must give the bankrupt written notice of the refusal.
139ZIH(9) Offence.
A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (3); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty for contravention of this subsection: Imprisonment for 12 months.
A bankrupt to whom the supervised account regime applies must not enter into a non-monetary income receipt arrangement.
139ZIHA(2)Subsection (1) does not apply if the bankrupt enters into the non-monetary income receipt arrangement in accordance with the consent of the trustee under subsection (5).
139ZIHA(3) Bankrupt not to participate in existing arrangements.
If a bankrupt was participating in a non-monetary income receipt arrangement immediately before becoming a bankrupt to whom the supervised account regime applies, the bankrupt must, as soon as practicable after becoming such a bankrupt, cease to participate in the arrangement.
139ZIHA(4)Subsection (3) does not apply if the bankrupt continues to participate in the non-monetary income receipt arrangement in accordance with the consent of the trustee under subsection (5).
139ZIHA(5) Consent.
The trustee may, by written notice given to the bankrupt:
(a) consent to the bankrupt entering into:
(i) a specified non-monetary income receipt arrangement; or
(ii) non-monetary income receipt arrangements included in a specified class of non-monetary income receipt arrangements; or
(b) consent to the bankrupt continuing to participate in:
(i) a specified non-monetary income receipt arrangement; or
139ZIHA(6)
(ii) non-monetary income receipt arrangements included in a specified class of non-monetary income receipt arrangements.
The trustee may, by written notice given to the bankrupt, vary or revoke a consent.
139ZIHA(7)
The powers conferred on the trustee by subsections (5) and (6) may be exercised:
(a) on his or her own initiative; or
(b) on the application of the bankrupt.
139ZIHA(8)
If, following the bankrupt's application, the trustee refuses to exercise a power conferred by subsection (5) or (6), the trustee must give the bankrupt written notice of the refusal.
139ZIHA(9) Offence.
A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (3); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty for contravention of this subsection: Imprisonment for 12 months.
A bankrupt to whom the supervised account regime applies must not receive income in the form of cash.
139ZII(2)
Subsection (1) does not apply if the income was received in accordance with the consent of the trustee under subsection (3).
139ZII(3) Consent.
The trustee may, by written notice given to the bankrupt, consent to the bankrupt receiving in the form of cash:
(a) a specified item of income; or
(b) items of income included in a specified class of items of income. 139ZII(4)
The trustee may, by written notice given to the bankrupt, vary or revoke a consent.
139ZII(5)
The powers conferred on the trustee by subsections (3) and (4) may be exercised:
(a) on his or her own initiative; or
(b) on the application of the bankrupt.
139ZII(6)
If, following the bankrupt's application, the trustee refuses to exercise a power conferred by subsection (3) or (4), the trustee must give the bankrupt written notice of the refusal.
139ZII(7) Offence.
A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty for contravention of this subsection: Imprisonment for 12 months.
If:
(a) a person is a bankrupt to whom the supervised account regime applies; and
(b) the person has been discharged from the bankruptcy;
section 277A applies in relation to the person as if:
(c) the person were a bankrupt within the meaning of that section; and
(d) the person had been discharged from the bankruptcy when the person ceases to be a bankrupt to whom the supervised account regime applies.
If a bankrupt has engaged, is engaging or is proposing to engage, in any conduct in contravention of this Subdivision, the Court may, on the application of the trustee, grant an injunction:
(a) restraining the bankrupt from engaging in the conduct; and
(b) if, in the Court's opinion, it is desirable to do so - requiring the bankrupt to do something. 139ZIJ(2) Performance injunctions.
(a) a bankrupt has refused or failed, or is refusing or failing, or is proposing to refuse or fail, to do an act or thing; and
(b) the refusal or failure was, is or would be a contravention of this Subdivision;
the Court may, on the application of the trustee, grant an injunction requiring the bankrupt to do that act or thing.
If an application is made to the Court for an injunction under section 139ZIJ, the Court may, before considering the application, grant an interim injunction restraining a bankrupt from engaging in conduct of a kind referred to in that section.
139ZIK(2) No undertakings as to damages.The Court is not to require an applicant for an injunction under section 139ZIJ, as a condition of granting an interim injunction, to give any undertakings as to damages.
The Court may discharge or vary an injunction granted under this Subdivision.
The power of the Court under this Subdivision to grant an injunction restraining a bankrupt from engaging in conduct of a particular kind may be exercised:
(a) if the Court is satisfied that the bankrupt has engaged in conduct of that kind - whether or not it appears to the Court that the bankrupt intends to engage again, or to continue to engage, in conduct of that kind; or
(b) if it appears to the Court that, if an injunction is not granted, it is likely that the bankrupt will engage in conduct of that kind - whether or not the bankrupt has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage to any person if the bankrupt engages in conduct of that kind. 139ZIM(2) Performance injunctions.
The power of the Court to grant an injunction requiring a bankrupt to do an act or thing may be exercised:
(a) if the Court is satisfied that the bankrupt has refused or failed to do that act or thing - whether or not it appears to the Court that the bankrupt intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; or
(b) if it appears to the Court that, if an injunction is not granted, it is likely that the bankrupt will refuse or fail to do that act or thing - whether or not the bankrupt has previously refused or failed to do that act or thing and whether or not there is an imminent danger of substantial damage to any person if the bankrupt refuses or fails to do that act or thing.
The powers conferred on the Court under this Subdivision are in addition to, and not instead of, any other powers of the Court, whether conferred by this Act or otherwise.
The Inspector-General may review a reviewable decision:
(a) on the Inspector-General's own initiative; or
(b) if requested to do so by the bankrupt for reasons that appear to the Inspector-General to be sufficient to justify doing so. 139ZIO(2)
Subject to subsection (2A), the Inspector-General must review a reviewable decision if requested to do so by the Ombudsman.
Interaction with Insolvency Practice Rules
139ZIO(2A)
The Inspector-General may refuse to review a reviewable decision if the Court is exercising powers, under section 45-1, 90-5, 90-10 or 90-15 of Schedule 2, in relation to the decision.
139ZIO(2B)
If:
(a) the Inspector-General is reviewing a reviewable decision; and
(b) the Court begins to exercise powers, under section 45-1, 90-5, 90-10 or 90-15 of Schedule 2, in relation to the decision;
the period referred to in subsection (5) of this section is extended by one day for each day during the period:
(c) beginning when the Court begins to exercise powers as referred to in paragraph (b); and
(d) ending when the Court ceases to exercise those powers.
139ZIO(3) Request by bankrupt.
A request by the bankrupt to the Inspector-General for the review of a reviewable decision must:
(a) be in writing and given to the Inspector-General not later than 60 days after the day on which the decision first came to the notice of the bankrupt; and
(b) be accompanied by:
(i) a copy of any relevant documents issued or given by the trustee under this Subdivision; and
(ii) any other documents on which the bankrupt relies in support of the request.
(Repealed by No 132 of 2015)
139ZIO(5) Time limit for review.
Within 60 days after the request is received, the Inspector-General must:
(a) decide whether to review the decision; and
(b) if the Inspector-General decides to review the decision - make his or her decision on the review.
For the purposes of the exercise of powers in relation to a review, or a request for a review, of a reviewable decision, the Inspector-General may:
(a) ask the bankrupt to provide such further relevant information, either orally or in writing, as the Inspector-General specifies; and
(b) ask the trustee to provide such information, either orally or in writing, about the decision and the reasons for the decision as the Inspector-General specifies. 139ZIP(2) [Oral information]
If any information is provided orally, the Inspector-General must record it in writing.
On a review of a reviewable decision, the Inspector-General has all the powers of the trustee and may:
(a) confirm the decision; or
(b) vary the decision; or
(c) set aside the decision; or
(d) set aside the decision and make a decision in substitution for the decision so set aside. 139ZIR(2) Application of this Subdivision to Inspector-General's decision.
This Subdivision (apart from sections 139ZIO to 139ZIT), applies to a decision made by the Inspector-General as if it had been made by the trustee under this Subdivision.
If the Inspector-General: (a) reviews a reviewable decision; or (b) refuses a request by a bankrupt for a review of a reviewable decision;
the Inspector-General must give written notice to:
(c) the bankrupt; and (d) the trustee;(e) (Repealed by No 132 of 2015)
of the Inspector-General's decision on the review or on the request, as the case may be.
139ZIS(2)
The notice must: (a) set out the decision; and (b) give the reasons for the decision.
Notification of right of review by ART
139ZIS(3)
In the case of a decision on the review of a reviewable decision, the notice must also include a statement to the effect that, if the bankrupt or the trustee is dissatisfied with the Inspector-General's decision, application may, subject to the Administrative Review Tribunal Act 2024, be made to the Administrative Review Tribunal for review of the decision.
139ZIS(4)
In the case of a decision refusing a request to review a reviewable decision, the notice to the bankrupt must also include a statement to the effect that, if the bankrupt is dissatisfied with the Inspector-General's decision, application may, subject to the Administrative Review Tribunal Act 2024, be made to the Administrative Review Tribunal for a review of the decision.
139ZIS(5)
A breach of subsection (3) or (4) in relation to a decision does not affect the validity of the decision.
Inspector-General taken to have reviewed and confirmed decision
139ZIS(6)
If, within 60 days after lodgment of a request by a bankrupt for the review of a reviewable decision, the Inspector-General has not given written notice to the bankrupt of his or her decision in accordance with subsection (1), the Inspector-General is taken to have reviewed the trustee's decision and confirmed it under paragraph 139ZIR(1)(a).
An application may be made to the Administrative Review Tribunal for the review of: (a) a decision of the Inspector-General on the review of a reviewable decision; or (b) a decision by the Inspector-General refusing a request to review a reviewable decision.
In this Subdivision:
bankrupt
includes a person who has been discharged from bankruptcy.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 139ZJ of the Act is modified by inserting "(1)" before "In" and inserting the subsections:
]
139ZJ(2)
In sections 139ZK, 139ZL and 139ZP, a reference to a bankrupt is to be read as a reference to a debtor.
139ZJ(3)
In subsection (2):debtor
means a person who has executed a personal insolvency agreement.
This Subdivision applies to a person: (a) from whom any money is due or accruing, or may become due, to a bankrupt; or (b) who holds, or may subsequently hold, money for or on account of a bankrupt; or (c) who holds, or may subsequently hold, money on account of some other person for payment to or on behalf of a bankrupt; or (d) who has authority from some other person to pay money to or on behalf of a bankrupt; or (e) who is liable to pay money or transfer property wholly or principally in consideration of personal services supplied by a bankrupt after the commencement of the bankruptcy, whether the services were supplied to the first-mentioned person or to some other person; or (f) who has received money or property wholly or principally in consideration of personal services supplied by a bankrupt after the commencement of the bankruptcy, whether the services were supplied to the first-mentioned person or to some other person.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZK(1) of the Act is modified by substituting "personal insolvency agreement" for "bankruptcy" in para (e) and (f).]
139ZK(2)
In subsection (1):
personal services
, in relation to a bankrupt, means personal services as defined by subsection 5(1), whether or not supplied for the payment of money, or the provision of other consideration, to the bankrupt.
139ZK(3)
If, apart from this subsection, money would not be due, or would not be repayable on demand, to a person, or the obligation to transfer property to a person would not arise, unless a condition were fulfilled, then, for the purposes of this section, the money is taken to be due or to be repayable on demand, or the obligation to transfer the property to the person is taken to arise, as the case may be, even though the condition has not been fulfilled.
If a bankrupt is liable to pay to the trustee a contribution under section 139P or 139Q, the Official Receiver: (a) if the Official Trustee is the trustee - on the initiative of the Official Receiver; or (b) if a registered trustee is the trustee - on application by the trustee;
may require a person to whom this Subdivision applies, by written notice given to the person, to make a payment or payments to the trustee in accordance with this section in or towards the discharge of the liability of the bankrupt to make the contribution.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZL(1) of the Act is modified by substituting "If a debtor is liable to pay a specified amount of the debtor's income to the trustee in accordance with a personal insolvency agreement, the Official Receiver" for "If a bankrupt is liable to pay to the trustee a contribution under section 139P or 139Q, the Official Receiver" and "pay that amount" for "make the contribution".]
139ZL(2)
The notice must set out the facts and circumstances, and in particular must specify the money or property, because of which the Official Receiver considers that this Subdivision applies to the person to whom the notice is given.
139ZL(3)
The notice may either: (a) require payment of so much of the money, or of the value of the property, as does not exceed the amount, or the total of the amounts, of the contribution that the bankrupt is liable to pay; or (b) in the case of a person who is liable to pay money to or on behalf of the bankrupt, require the person, out of each payment that the person becomes liable from time to time to make, to pay such amount as is set out in the notice until the liability of the bankrupt to pay the contribution has been discharged.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZL(3) of the Act is modified by substituting "the amount of income" for "the contribution" in para (a) and (b).]
139ZL(4)
The notice may either: (a) require a payment to be made immediately the money becomes due or is held, the authority becomes exercisable, the liability arises or the money or property is received, as the case requires; or (b) require a payment to be made at a time or within a period set out in the notice, not being a time that occurs, or a period that commences, before the money becomes due or is held, the authority becomes exercisable, the liability arises or the money or property is received, as the case requires.
139ZL(5)
After the Official Receiver has given a notice to a person under subsection (1), the Official Receiver may at any time, by a further notice given to the person, revoke or amend the first-mentioned notice.
139ZL(6)
If the Official Receiver gives a notice under this section, the Official Receiver must send a copy of the notice to the bankrupt and, if a registered trustee is the trustee, to the trustee.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZL(6) of the Act is modified by substituting "legal personal representative of the deceased debtor" for "bankrupt".]
139ZL(7)
A notice to be given under this section to the Commonwealth, a State or a Territory, or to an authority of the Commonwealth, of a State or of a Territory, is taken to be duly given if it is given to a person who, by any law, regulation, appointment or authority, has the function of paying, or in fact pays, money on behalf of a Department of the Commonwealth, of that State or of that Territory, or on behalf of that authority, as the case may be.
139ZL(8)
If a person is required by a notice under this section to pay to the trustee the value of any property, the requirement is taken to be complied with if the property is transferred to the trustee.
139ZL(9)
A person making a payment or transferring property in accordance with this section is taken to have been acting under the authority of the bankrupt and of all other persons concerned and is entitled to be indemnified out of the estate of the bankrupt in respect of the payment or transfer.
139ZL(10)
An amount payable by a person to the trustee under this section is recoverable by the trustee as a debt by action against the person in a court of competent jurisdiction.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Section 139ZL of the Act is modified by inserting subsection (11):
]
139ZL(11)
In this section:legal personal representative
, of a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
If the Court, on application by a person to whom a notice has been given under section 139ZL or by any other interested person, is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court may make an order setting aside the notice.
139ZM(1A)
The application must be made:
(a) not later than 60 days after the day the notice under section 139ZL was given to the applicant; or
(b) if the applicant is another interested person - not later than 60 days after the day the applicant became aware that the notice has been given.
139ZM(2)
A notice that has been set aside is taken not to have been given.
If a notice under section 139ZL is given to a person to whom this Subdivision applies because the person is liable to transfer, or has received, any property as mentioned in paragraph 139ZK(1)(e) or (f): (a) the property is charged with the liability of the person to make payments as required by the notice; and (b) if the person makes the payments or transfers the property to the trustee, the property ceases to be subject to the charge.
139ZN(2)
Subject to subsection (3), a charge under subsection (1) has priority over any existing or subsequent mortgage, lien, charge or other encumbrance over the property in favour of an associated entity of the bankrupt, and has that priority despite any other law of the Commonwealth or any law of a State or Territory.
139ZN(3)
A charge under subsection (1) does not have priority over a mortgage, lien, charge or other encumbrance in favour of an associated entity of the bankrupt if that entity satisfies the Court that that mortgage, lien, charge or other encumbrance arose from a transaction that was entered into at arm's length and for valuable and adequate consideration provided by that entity.
139ZN(4)
If any property being land is subject to a charge under subsection (1), the Official Receiver may certify by signed writing that the land is subject to a charge under that subsection and may lodge the certificate with the Registrar-General, Registrar of Titles or other proper officer or authority of the State or Territory in which the land is situated.
139ZN(5)
The officer or authority with whom the certificate is lodged may register the charge as nearly as practicable in the way in which mortgages over land are registered under the law in force in the State or Territory in which the land is situated.
139ZN(6)
The trustee has power to sell any property over which a charge exists under subsection (1) and, if the property is so sold, then, subject to any charges that have priority over the first-mentioned charge, the proceeds of the sale are, to the extent of the charge, to be applied in or towards the discharge of the liability to make a payment or payments to the trustee of the person to whom the notice was given.
A person who refuses or fails to comply with a notice under section 139ZL commits an offence punishable upon conviction by imprisonment for a period not exceeding 6 months.
139ZO(2)
If a person is convicted of an offence against subsection (1) in relation to the refusal or failure of the convicted person or another person to comply with a notice under section 139ZL, the court that convicted the person may, in addition to imposing a penalty on the convicted person, order that person to pay to the trustee an amount not exceeding the amount, or the total of the amounts, that the convicted person or the other person, as the case may be, refused or failed to pay to the trustee in accordance with the notice.
If a notice under section 139ZL is given to the employer of the bankrupt, the employer must not dismiss the bankrupt, injure the bankrupt in his or her employment, or alter the position of the bankrupt to the bankrupt's prejudice, because of the giving of the notice.
Penalty: Imprisonment for 6 months.
139ZP(2) [Not necessary for prosecutor to prove etc - defence etc]In a prosecution for an offence against subsection (1), it is not necessary for the prosecutor to prove that the defendant's reason for the action charged was the giving of the notice but it is a defence to the prosecution if the defendant proves that the action was not taken because of the giving of the notice.
139ZP(3) [Employer convicted - court may order]If an employer is convicted of an offence against subsection (1) constituted by dismissing a bankrupt, the court that convicted the employer may order the employer:
(a) to reinstate the bankrupt to the position that the bankrupt occupied immediately before the dismissal or a position no less favourable than the first-mentioned position; and
(b) to pay to the bankrupt the whole or part of the wages lost by the bankrupt because of the dismissal.
If a person has received any money or property as a result of a transaction that is void against the trustee of a bankrupt under Division 3, the Official Receiver: (a) if the Official Trustee is the trustee - on the initiative of the Official Receiver; or (b) if a registered trustee is the trustee - on application by the trustee;
may require the person, by written notice given to the person, to pay to the trustee an amount equal to whichever of the following is applicable:
(c) if:
(i) the transaction is void against the trustee under section 128B or 128C; and
(ii) the transaction is by way of a contribution to an eligible superannuation plan for the benefit of a person (the beneficiary ) who may or may not be the bankrupt; and
whichever is the lesser of the following:
(iii) the beneficiary is a member of the eligible superannuation plan;
(iv) the money or the value of the property received;
(d) in any other case - the money or the value of the property received.
(v) the beneficiary's withdrawal benefit in relation to the eligible superannuation plan;
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZQ(1) of the Act is modified by substituting "personal insolvency agreement because of the application of any of sections 120 to 125" for "bankrupt under Division 3".]
139ZQ(2)
The notice must set out the facts and circumstances because of which the Official Receiver considers that the transaction is void against the trustee.
139ZQ(3)
The notice may: (a) require the amount to be paid at a time or within a period set out in the notice; or (b) require the amount to be paid at such times, and in such instalments, as are set out in the notice.
139ZQ(4)
After the Official Receiver has given a notice to a person under subsection (1), the Official Receiver may at any time, by a further notice given to the person, revoke or amend the first-mentioned notice.
139ZQ(5)
If the Official Receiver gives a notice under this section, the Official Receiver must send a copy of the notice to the bankrupt and, if a registered trustee is the trustee, to the trustee.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZQ(5) of the Act is modified by substituting "legal personal representative of the deceased debtor" for "bankrupt".]
139ZQ(6)
A notice to be given under this section to the Commonwealth, a State or a Territory, or to an authority of the Commonwealth, of a State or of a Territory, is taken to be duly given if it is given to a person who, by any law, regulation, appointment or authority, has the function of paying, or in fact pays, money on behalf of a Department of the Commonwealth, of that State or of that Territory, or on behalf of the authority, as the case may be.
139ZQ(7)
If a person is required by a notice under this section to pay to the trustee the value of any property, the requirement is taken to be complied with if the property is transferred to the trustee.
139ZQ(8)
An amount payable by a person to the trustee under this section is recoverable by the trustee as a debt by action against the person in a court of competent jurisdiction.
139ZQ(9)
For the purposes of subparagraph (1)(c)(ii), disregard a benefit that is payable in the event of the death of a person.
139ZQ(10)
In this section:
contribution
has the same meaning as in Subdivision B of Division 3.
eligible superannuation plan
has the same meaning as in Subdivision B of Division 3.
member
of an eligible superannuation plan has the same meaning as in Subdivision B of Division 3.
withdrawal benefit
has the same meaning as in Subdivision B of Division 3.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZQ(10) of the Act is modified by inserting the definition:
]legal personal representative
, of a deceased debtor, means:
(a) the executor under the deceased debtor's will; or
(b) the administrator under letters of administration or court order;of the deceased debtor's estate, or a part of that estate.
SECTION 139ZR CHARGE OVER PROPERTY 139ZR(1)
If a notice under section 139ZQ is given to a person in respect of any property: (a) the property is charged with the liability of the person to make payments to the trustee as required by the notice; and (b) if the person makes the payments or transfers the property to the trustee, the property ceases to be subject to the charge.
139ZR(2)
Subject to subsection (3), a charge under subsection (1) has priority over any existing or subsequent mortgage, lien, charge or other encumbrance over the property in favour of an associated entity of the bankrupt, and has that priority despite any other law of the Commonwealth or any law of a State or Territory.
139ZR(3)
A charge under subsection (1) does not have priority over a mortgage, lien, charge or other encumbrance in favour of an associated entity of the bankrupt if that entity satisfies the Court that that mortgage, lien, charge or other encumbrance arose from a transaction that was entered into at arm's length and for valuable and adequate consideration provided by that entity and is not void against the trustee under Division 3.
[ CCH Note: Modification Declaration FRLI No F2021L00261 (Bankruptcy Regulations 2021: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 139ZR(3) of the Act is modified by substituting "any of sections 120 to 125" for "Division 3".]
139ZR(4)
If any property being land is subject to a charge under subsection (1), the Official Receiver may certify by signed writing that the land is subject to a charge under that subsection and may lodge the certificate with the Registrar-General, Registrar of Titles or other proper officer or authority of the State or Territory in which the land is situated.
139ZR(5)
The officer or authority with whom the certificate is lodged may register the charge as nearly as practicable in the way in which mortgages over land are registered under the law in force in the State or Territory in which the land is situated.
139ZR(6)
The trustee has power to sell any property over which a charge exists under subsection (1) and, if the property is so sold, then, subject to any charges that have priority over the first-mentioned charge, the proceeds of the sale are, to the extent of the charge, to be applied in or towards the discharge of the liability to make a payment or payments to the trustee of the person to whom the notice was given.
If the Court, on application by a person to whom a notice has been given under section 139ZQ or by any other interested person, is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court may make an order setting aside the notice.
139ZS(1A)
The application must be made:
(a) not later than 60 days after the day the notice under section 139ZQ was given to the applicant; or
(b) if the applicant is another interested person - not later than 60 days after the day the applicant became aware that the notice has been given.
139ZS(2)
A notice that has been set aside is taken not to have been given.
A person who refuses or fails to comply with a notice under section 139ZQ commits an offence punishable upon conviction by imprisonment for a period not exceeding 6 months.
139ZT(2)
If a person is convicted of an offence against subsection (1) in relation to the refusal or failure of the convicted person or another person to comply with a notice under section 139ZQ, the court that convicted the person may, in addition to imposing a penalty on the convicted person, order that person to pay to the trustee an amount not exceeding the amount, or the total of the amounts, that the convicted person or the other person, as the case may be, refused or failed to pay to the trustee in accordance with the notice.
If, on application by the trustee of a bankrupt's estate, the Court is satisfied that:
(a) a transaction is void against the trustee of the bankrupt's estate under section 128B or 128C; and
(b) the transaction was by way of a contribution to an eligible superannuation plan (the first plan ) for the benefit of a person (the beneficiary ) who may or may not be the bankrupt; and
(c) the beneficiary's withdrawal benefit in relation to the first plan falls short of the amount of the money, or the value of the property, received as a result of the transaction; and
(d) the beneficiary has a superannuation interest in another eligible superannuation plan; and
(e) the superannuation interest referred to in paragraph (d) is attributable, in whole or in part, to the roll-over or transfer, after the transaction referred to in paragraph (a) happened, of the whole or a part of the beneficiary's superannuation interest in the first plan;
the Court may, by order, direct the trustee of the other eligible superannuation plan to pay to the trustee of the bankrupt's estate a specified amount not exceeding whichever is the lesser of the following:
(f) the amount of the shortfall referred to in paragraph (c);
(g) the beneficiary's withdrawal benefit in relation to the other eligible superannuation plan. 139ZU(2) [Conditions]
The Court must not make an order under subsection (1) unless it is satisfied that it is in the interests of the creditors of the bankrupt to do so.
139ZU(3) [Time of transaction]For the purposes of paragraph (1)(a), it is immaterial whether the transaction occurred before, at or after the commencement of this section.
139ZU(4) [Where benefits payable on death]For the purposes of paragraph (1)(b), disregard a benefit that is payable in the event of the death of a person.
139ZU(5) [Where beneficiary has no superannuation interest]For the purposes of paragraph (1)(c), if the beneficiary does not have a superannuation interest in an eligible superannuation plan, the beneficiary is taken to have a nil withdrawal benefit in relation to the plan.
139ZU(6) [Conditions of roll-over or transfer]For the purposes of paragraph (1)(e), it is immaterial whether the roll-over or transfer occurred directly or indirectly through one or more interposed eligible superannuation plans.
139ZU(7) [Copy of application]An applicant under subsection (1) must give a copy of the application to:
(a) the trustee of the other eligible superannuation plan; and
(b) the beneficiary. 139ZU(8) [Appearances at hearing]
At the hearing of an application under subsection (1):
(a) the trustee of the other eligible superannuation plan; and
(b) the beneficiary.
may appear, adduce evidence and make submissions.
139ZU(9) [Account freezing]For the purposes of sections 128E, 128F and 128J, an order under this section is taken to relate to:
(a) the transaction referred to in paragraph (1)(a) of this section; and
(b) the beneficiary's superannuation interest referred to in paragraph (1)(d) of this section.
An order by the Court under section 139ZU is enforceable as if it were an order for the payment of money made by the Court when exercising jurisdiction otherwise than under this Act.
In this Subdivision:
contribution
has the same meaning as in Subdivision B of Division 3.
eligible superannuation plan
has the same meaning as in Subdivision B of Division 3.
superannuation interest
has the same meaning as in Subdivision B of Division 3.
trustee
of an eligible superannuation plan has the same meaning as in Subdivision B of Division 3.
withdrawal benefit
has the same meaning as in Subdivision B of Division 3.
The trustee of the estate of a bankrupt shall, subject to this section, with all convenient speed, declare and distribute dividends amongst the creditors who have proved their debts.
140(2)
Subject to the retention of such sums as are necessary to meet the costs of administration or to give effect to the provisions of this Act, the trustee shall distribute as dividend all moneys in hand.
140(3)
Before declaring the first dividend, the trustee must give written notice of the trustee's intention to declare the dividend to anyone the trustee knows of who claims, or might claim, to be a creditor but has not lodged a proof of debt.
140(4)
The trustee shall, in a notice published or sent in pursuance of subsection (3), specify a reasonable period within which creditors may lodge their proofs of debts.
S 140(4) substituted by No 12 of 1980, s 69.