Insolvency Law Reform Act 2016

No. 11, 2016

An Act to amend the law in relation to personal and corporate insolvency, and for related purposes

[Assented to 29 February 2016]

The Parliament of Australia enacts:

This Act may be cited as the Insolvency Law Reform Act 2016.

(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1	Column 2	Column 3
Provisions	Commencement	Date/Details
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table	The day this Act receives the Royal Assent.	29 February 2016
2. Schedule 1	A single day to be fixed by Proclamation. However, if the provisions do not commence within the period of 12 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period.	1 March 2017
3. Schedule 2, items 1 to 93	At the same time as the provisions covered by table item 2.	1 March 2017
4. Schedule 2, item 94	The later of: (a) the commencement of the provisions covered by table item 2; and (b) immediately after the commencement of item 13 of Schedule 3 to the Treasury Legislation Amendment (Repeal Day 2015) Act 2016. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur.	Never commenced
5. Schedule 2, items 95 to 302	At the same time as the provisions covered by table item 2.	1 March 2017
6. Schedule 2, item 303	The later of: (a) the commencement of the provisions covered by table item 2; and (b) immediately after the commencement of item 48 of Schedule 2 to the Carbon Farming Initiative Amendment Act 2014.	1 March 2017 (paragraph (a) applies)
7. Schedule 2, items 304 to 322	At the same time as the provisions covered by table item 2.	1 March 2017
8. Schedule 3	Immediately after the commencement of the provisions covered by table item 2.	1 March 2017

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3 Schedules

Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendments relating to the Insolvency Practice Schedule (Bankruptcy)

Part 1—Insolvency Practice Schedule (Bankruptcy)

Bankruptcy Act 1966

1 After section 4

Insert:

4A Insolvency Practice Schedule

Schedule 2 has effect.

2 At the end of the Act

Add:

Schedule 2—Insolvency Practice Schedule (Bankruptcy)

Note: See section 4A.

Part 1—Introduction

Division 1—Introduction

1‑1 Object of this Schedule

(1) The object of this Schedule is to ensure that any person registered as a trustee:

(a) has an appropriate level of expertise; and

(b) behaves ethically; and

(2) The object of this Schedule is also:

(a) to regulate the administration of regulated debtors’ estates consistently, unless there is a clear reason to treat a matter that arises in relation to a particular kind of estate differently; and

(b) to regulate the administration of regulated debtors’ estates to give greater control to creditors.

1‑5 Simplified outline of this Schedule

Registering trustees

Under this Act, only the Official Trustee or a registered trustee can act as the trustee of a regulated debtor’s estate.

Part 2 of this Schedule sets out the process for registering trustees, and also deals with disciplining registered trustees.

Consistently regulating the administration of regulated debtors’ estates

Part 3 of this Schedule sets out provisions to regulate the administration of regulated debtors’ estates consistently.

A regulated debtor is a bankrupt, a person whose property is subject to control under Division 2 of Part X, a debtor under a personal insolvency agreement or a deceased person whose estate is being administered under Part XI.

Other provisions

There are other matters relevant to the administration of regulated debtors’ estates in this Act.

This Schedule also gives authority for a legislative instrument, the Insolvency Practice Rules, to deal with some matters.

Many of the terms in this Schedule are defined. The Dictionary in section 5‑5 contains a list of every term that is defined in this Schedule. Other terms are defined in section 5 of this Act.

Division 5—Definitions

Subdivision A—Introduction

5‑1 Simplified outline of this Division

Terms used in this Schedule are defined in the Dictionary. In some cases, the definition is a signpost to another provision of the Schedule in which the meaning of the term is explained.

Some of the key terms, the meaning of which is explained in this Division, are regulated debtor, regulated debtor’s estate and trustee of a regulated debtor’s estate.

Subdivision B—The Dictionary

5‑5 The Dictionary

In this Schedule:

adequate and appropriate fidelity insurance has a meaning affected by subsection 25‑1(2).

adequate and appropriate professional indemnity insurance has a meaning affected by subsection 25‑1(2).

administration account: see section 65‑5.

annual administration return means the return required to be lodged under subsection 70‑5(2).

annual trustee return means the return required to be lodged under subsection 30‑1(1).

committee of inspection for a regulated debtor’s estate means a committee appointed under sections 80‑10 to 80‑25 in relation to the administration of the estate.

creditor, when used in relation to a regulated debtor’s estate, means a creditor of the estate.

current conditions: see section 5‑10.

end of an administration of a regulated debtor’s estate means:

(a) in the case of a bankruptcy—the day on which the bankrupt is discharged or the bankruptcy is annulled, whichever happens first; and

(b) in the case of an administration under Part X—the day 3 years after the day on which a personal insolvency agreement made by the debtor for the administration of the debtor’s estate took effect; and

(c) in the case of an administration under Part XI—the day 3 years after the day on which the administration is taken to have commenced under section 247A.

financial interest: a person has a financial interest in the administration of a regulated debtor’s estate in the circumstances set out in section 5‑30.

GST has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.

Insolvency Practice Rules means the rules made by the Minister under section 105‑1.

Insolvency Practice Schedule (Corporations) means Schedule 2 to the Corporations Act 2001, and includes rules made under section 105‑1 of that Schedule.

March quarter means the period of 3 months beginning on 1 January.

maximum default amount for a trustee of a regulated debtor’s estate: see section 60‑15.

notified estate charge: see subsection 20‑75(7).

prescribed means prescribed by the Insolvency Practice Rules.

registered trustee means an individual who is registered as a trustee under Part 2 of this Schedule.

regulated debtor: see section 5‑15.

regulated debtor’s estate: see section 5‑16.

remuneration determination, for a trustee of a regulated debtor’s estate, means a determination made:

(a) under section 60‑10 or 60‑11 in relation to the trustee; and

(b) in accordance with section 60‑12.

this Schedule includes the Insolvency Practice Rules.

trustee of a regulated debtor’s estate: see section 5‑20 and 5‑25.

Subdivision C—Other definitions

5‑10 Meaning of current conditions

(1) Each of the following is a current condition imposed on a registered trustee:

(a) a condition that a committee decides that the registered trustee is to be subject to under subsection 20‑20(5) or (6), subject to any variation that a committee has decided should be made to the condition under section 20‑55;

(b) a condition imposed on all registered trustees, or on registered trustees of the trustee’s class, under section 20‑35;

(d) a condition that a committee decides that the registered trustee is to be subject to under paragraph 40‑55(1)(f) or (g) (conditions as a result of disciplinary action), subject to any variation that a committee has decided should be made to the condition under section 20‑55;

(e) a condition imposed on the registered trustee by the Court under section 45‑1.

(2) However, the current conditions imposed on a registered trustee do not include:

(a) a condition that a committee has decided to remove under section 20‑55; or

(b) a condition that is removed under subsection 40‑15(4) (condition removed because a direction not to accept further appointments has been withdrawn); or

5‑15 Meaning of regulated debtor

A person is a regulated debtor if the person is:

(a) a bankrupt; or

(b) a person whose property is subject to control under Division 2 of Part X; or

(d) a deceased person whose estate is being administered under Part XI.

5‑16 Meaning of regulated debtor’s estate

An estate is a regulated debtor’s estate if it is:

(a) in relation to a bankrupt—the estate of the bankrupt, other than any estate of the bankrupt administered under Part XI because the bankrupt is a deceased person; and

(b) in relation to a person whose property is subject to control under Division 2 of Part X—the estate of the person; and

(d) in relation to a deceased person whose estate is being administered under Part XI—the estate of the person being administered under that Part.

5‑20 Meaning of trustee of a regulated debtor’s estate

A person is the trustee of a regulated debtor’s estate if the person is:

(a) in relation to a bankrupt—the trustee of the bankrupt’s estate; and

(b) in relation to a person whose property is subject to control under Division 2 of Part X—the controlling trustee; and

(d) in relation to a deceased person whose estate is being administered under Part XI—the trustee administering the estate under that Part.

5‑25 References to the trustee of a regulated debtor’s estate

A reference in this Schedule to the trustee of a regulated debtor’s estate is to be read:

(a) in relation to a regulated debtor’s estate in respect of which there are 2 or more joint trustees—as a reference to all of the trustees; and

(b) in relation to a regulated debtor’s estate in respect of which there are 2 or more joint and several trustees—as a reference to all of the trustees or any one or more of the trustees.

5‑30 Persons with a financial interest in the administration of a regulated debtor’s estate

A person has a financial interest in the administration of a regulated debtor’s estate:

(a) if the person is one of the following:

(i) the regulated debtor;

(ii) a creditor;

(iii) the trustee; or

(b) in any other circumstances prescribed.

Division 6—Application of this Schedule to Official Trustee

6‑1 Schedule generally does not apply to the Official Trustee

A provision of this Schedule does not apply to the Official Trustee unless the provision is expressed to apply to the Official Trustee.

Part 2—Registering and disciplining practitioners

Division 10—Introduction

10‑1 Simplified outline of this Part

Registering trustees

An individual may apply to the Inspector‑General to be registered as a trustee. The Inspector‑General will refer the application to a committee who will consider the applicant’s qualifications, conduct and fitness and whether the applicant will take out appropriate insurance. Registration may be subject to conditions, is for 3 years and may be renewed.

A registered trustee must:

(a) lodge an annual return with the Inspector‑General that includes proof that the trustee has appropriate insurance; and

(b) give the Inspector‑General notice if the trustee’s circumstances change or if certain other events happen.

Disciplining registered trustees

If a registered trustee fails to comply with certain requirements, such as the requirement to lodge a document or give information, the Inspector‑General may give directions that may result in the trustee being unable to accept further appointments. The Inspector‑General may also seek a Court order.

The Inspector‑General may suspend or cancel a trustee’s registration in certain circumstances. The Inspector‑General may also give the trustee a show‑cause notice. If such a notice is given and no sufficient explanation is given, the Inspector‑General may take further disciplinary action on the decision of a committee.

Industry bodies may notify the Inspector‑General where they suspect there are grounds for disciplinary action.

Court powers

The Court has broad powers to make orders in relation to registered trustees (including imposing conditions on registration).

10‑5 Working cooperatively with ASIC

In performing his or her functions and exercising his or her powers under this Act in relation to persons who are, have been or may become both registered trustees under this Act and registered liquidators under the Corporations Act 2001, the Inspector‑General must work cooperatively with ASIC.

Division 15—Register of trustees

15‑1 Register of Trustees

(1) The Inspector‑General must establish and maintain a Register of Trustees.

(2) The Register of Trustees may be kept in any form that the Inspector‑General considers appropriate.

(3) The Insolvency Practice Rules may provide for and in relation to the Register of Trustees.

(4) Without limiting subsection (3), the Insolvency Practice Rules may provide for and in relation to:

(a) the details to be entered on the Register of Trustees; and

(b) the parts of the Register that are to be made available to the public.

(5) Without limiting paragraph (4)(a), those details may include:

(a) details of any disciplinary action decided by a committee under section 40‑55; and

(b) details of persons who have had their registration as a trustee under this Act suspended or cancelled.

Division 20—Registering trustees

Subdivision A—Introduction

20‑1 Simplified outline of this Division

An individual may apply to the Inspector‑General to be registered as a trustee. The application will be referred to a committee, which will assess the application against specified criteria (the applicant’s qualifications, conduct and fitness and whether the applicant will take out appropriate insurance). The committee will report its decision to the Inspector‑General and, if the committee decides that the applicant should be registered, the Inspector‑General will register the applicant as a trustee.

A registration may be subject to conditions. Conditions may be imposed on a particular registered trustee by the committee, or on all registered trustees or a class of registered trustees by the Insolvency Practice Rules. A registered trustee may apply to the Inspector‑General to have a condition imposed by a committee removed or varied. That application will be referred to a committee.

Registration is for 3 years, but may be renewed. An application for renewal may be made to the Inspector‑General within specified time periods.

A decision of a committee about an application for registration or about a condition of registration is reviewable by the Administrative Appeals Tribunal (see Division 96 of this Schedule).

Subdivision B—Registration

20‑5 Application for registration

(1) An individual may apply to the Inspector‑General to be registered as a trustee.

(2) The application must be lodged with the Inspector‑General in the approved form.

(3) The application must be accompanied by the application fee determined by the Minister by legislative instrument.

(4) The application is properly made if subsections (2) and (3) are complied with.

20‑10 Inspector‑General may convene a committee to consider

(1) The Inspector‑General may convene a committee for the purposes of considering an application, or applications, for registration as a trustee.

(2) The committee must consist of:

(a) the Inspector‑General; and

(b) a registered trustee chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

20‑15 Inspector‑General must refer applications to a committee

(1) The Inspector‑General must refer an application for registration as a trustee that is properly made to a committee convened under section 20‑10 for consideration.

(2) The Inspector‑General must do so within 2 months after receiving the application.

20‑20 Committee to consider applications

Committee must consider referred applications

(1) If an application for registration as a trustee is referred to a committee, the committee must consider the application.

(2) For the purposes of considering the application, the committee:

(a) must interview the applicant; and

(b) may require the applicant to sit for an exam.

Decision of committee

(3) Within 45 business days after interviewing the applicant, the committee must decide whether the applicant should be registered as a trustee or not.

(4) The committee must decide that the applicant should be registered as a trustee if it is satisfied that the applicant:

(a) has the qualifications, experience, knowledge and abilities prescribed; and

(b) will take out:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the applicant may incur working as a registered trustee; and

(c) has not been convicted, within 10 years before making the application, of an offence involving fraud or dishonesty; and

(d) is not, and has not been within 10 years before making the application, an insolvent under administration; and

(e) has not had his or her registration as a trustee under this Act cancelled within 10 years before making the application, other than in response to a written request by the applicant to have the registration cancelled; and

(f) has not had his or her registration as a liquidator under the Corporations Act 2001 cancelled within 10 years before making the application, other than in response to a written request by the applicant to have the registration cancelled; and

(g) is not disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001, or under a law of an external Territory or a law of a foreign country; and

(h) is otherwise a fit and proper person; and

(i) is resident in Australia or in another prescribed country.

(5) The committee may decide that the applicant should be registered even if the committee is not satisfied of a matter mentioned in paragraph (4)(a), (e), (f) or (i), provided the committee is satisfied that the applicant would be suitable to be registered as a trustee if the applicant complied with conditions specified by the committee.

Registration may be subject to conditions

(6) The committee may decide that the applicant’s registration is to be subject to any other conditions specified by the committee.

Spent convictions

(7) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

20‑25 Committee to report

The committee must give the applicant and the Inspector‑General a report setting out:

(a) the committee’s decision on the application; and

(b) the committee’s reasons for that decision; and

(c) if the committee decides under subsection 20‑20(5) or (6) that the applicant should be registered subject to a condition:

(i) the condition; and

(ii) the committee’s reasons for imposing the condition.

20‑30 Registration

Registration as trustee

(1) The Inspector‑General must register the applicant as a trustee if:

(a) the committee has decided that the applicant should be registered; and

(b) the applicant has produced evidence in writing to the Inspector‑General that the applicant has taken out:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the applicant may incur working as a registered trustee; and

(2) The Inspector‑General registers an applicant by entering on the Register of Trustees the details relating to the applicant prescribed for the purposes of subsection 15‑1(3).

Registration subject to current conditions

(3) The registration is subject to the current conditions imposed on the registered trustee.

Certificate of registration

(4) After registering a person as a trustee, the Inspector‑General must give the person a certificate of registration.

(5) The certificate may be given electronically.

Period of registration

(6) The registration has effect for 3 years.

20‑35 Conditions imposed on all registered trustees or a class of registered trustees

(1) The Insolvency Practice Rules may impose conditions on all registered trustees, or registered trustees of a specified class.

(2) Without limiting subsection (1), a condition may be imposed limiting the kinds of activity in which a trustee may engage, either for the duration of the registration or for a shorter period.

Subdivision C—Varying etc. conditions of registration

20‑40 Application to vary etc. conditions of registration

(1) If a committee has decided under this Schedule that a person’s registration as a trustee is to be subject to a condition, the person may apply to the Inspector‑General for the condition to be varied or removed.

(2) However, an application cannot be made:

(a) if the person’s registration as a trustee is suspended; or

(b) if the condition is of a prescribed kind; or

(3) The application must be lodged with the Inspector‑General in the approved form.

(4) The application is properly made if:

(a) an application can be made; and

(b) subsection (3) is complied with.

(5) A single application by a registered trustee may deal with more than one condition.

20‑45 Inspector‑General may convene a committee to consider applications

(1) The Inspector‑General may convene a committee for the purposes of considering an application, or applications, made under section 20‑40.

(2) The committee must consist of:

(a) the Inspector‑General; and

(b) a registered trustee chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

20‑50 Inspector‑General must refer applications to a committee

(1) The Inspector‑General must refer an application that is properly made under section 20‑40 to a committee convened under section 20‑45 for consideration.

(2) The Inspector‑General must do so within 2 months after receiving the application.

20‑55 Committee to consider applications

(1) If an application to vary or remove a condition of registration is referred to a committee, the committee must consider the application.

(2) Unless the applicant otherwise agrees, the committee must, for the purposes of considering the application, interview the applicant.

(3) The committee must, within 20 business days after interviewing the applicant or obtaining the agreement of the applicant as referred to in subsection (2):

(a) decide whether the condition to which the application relates should be varied or removed; and

(b) if a condition is to be varied, specify the way in which it is to be varied.

20‑60 Committee to report

The committee must give the applicant and the Inspector‑General a report setting out:

(a) the committee’s decision on the application; and

(b) the committee’s reasons for that decision; and

20‑65 Committee’s decision given effect

If the committee decides that a condition imposed on a registered trustee is to be varied or removed, the condition is varied or removed in accordance with that decision.

Subdivision D—Renewal

20‑70 Application for renewal

(1) An individual may apply to the Inspector‑General to have the individual’s registration as a trustee renewed.

(2) The application must be lodged with the Inspector‑General, in the approved form, before the applicant’s registration as a trustee ceases to have effect.

Note: The Court may extend the time within which an application must be lodged: see paragraph 33(1)(c).

(3) If an individual applies to have his or her registration as a trustee renewed, the individual must, at least 1 month before the registration ceases to have effect, pay the renewal fee determined by the Minister by legislative instrument. If the renewal fee is not paid at least 1 month before the registration ceases to have effect, an additional amount equal to 20% of the renewal fee is payable by the applicant by way of penalty.

(4) The application is properly made if subsection (2) is complied with.

20‑75 Renewal

Renewal of registration

(1) On application under section 20‑70, the Inspector‑General must renew the registration of the applicant as a trustee if:

(a) the application is properly made; and

(b) the applicant has produced evidence in writing to the Inspector‑General that the applicant maintains:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the applicant may incur working as a registered trustee; and

(c) the applicant has complied with any condition dealing with continuing professional education to which the applicant is subject during the applicant’s current registration; and

(d) the applicant has paid the renewal fee determined by the Minister under subsection 20‑70(3), and any late payment penalty under that subsection; and

(e) the applicant does not owe more than the prescribed amount of notified estate charges.

(2) The Inspector‑General renews the registration of the applicant by entering, or maintaining, on the Register of Trustees the details relating to the applicant prescribed for the purposes of subsection 15‑1(3).

Registration subject to current conditions

(3) The renewed registration is subject to the current conditions imposed on the registered trustee.

Certificate of registration

(4) After renewing the registration of a person as a trustee, the Inspector‑General must give the person a certificate of registration.

(5) The certificate may be given electronically.

Period of registration

(6) The renewed registration has effect for 3 years, beginning on the day after the person’s immediately preceding registration as a trustee ceased to have effect.

When a notified estate charge is owed

(7) A person owes a notified estate charge if:

(a) the person owes either of the following:

(i) a charge under the Bankruptcy (Estate Charges) Act 1997 (the estate charge);

(ii) a penalty under section 281 (late payment penalty) of this Act in respect of that charge; and

(b) the Inspector‑General notified the person of the unpaid estate charge at least one month and 10 business days before the person’s registration as a trustee ceases to have effect.

Subdivision E—Offences relating to registration

20‑80 False representation that a person is a registered trustee

A person commits an offence if:

(a) the person makes a representation; and

(b) the representation is that the person is a registered trustee; and

Penalty: 30 penalty units.

Division 25—Insurance

25‑1 Registered trustees to maintain insurance

Registered trustee must maintain insurance

(1) A registered trustee must maintain:

(a) adequate and appropriate professional indemnity insurance; and

(b) adequate and appropriate fidelity insurance;

against the liabilities that the trustee may incur working as a registered trustee.

(2) The Inspector‑General may, by legislative instrument, determine what constitutes adequate and appropriate professional indemnity insurance, and adequate and appropriate fidelity insurance, in relation to either or both of the following:

(a) specified circumstances;

(b) one or more specified classes of registered trustees.

Offence

(3) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 1,000 penalty units.

(4) A person commits an offence of strict liability if:

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

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

Penalty: 60 penalty units.

Division 30—Annual trustee returns

30‑1 Annual trustee returns

Registered trustee must lodge annual return

(1) A person who is a registered trustee during all or part of a trustee return year for the person must, within 1 month after the end of that year, lodge with the Inspector‑General a return that conforms with subsection (3).

(2) Each of the following is a trustee return year for a person who is or was registered as a trustee under section 20‑30:

(a) the period of 12 months beginning on the day on which that registration first began;

(b) each subsequent period of 12 months.

(3) A return under subsection (1) must:

(a) be in the approved form; and

(b) include evidence that the person has, during the whole of any period of the year during which the person was registered as a trustee, maintained:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered trustee.

(4) The Inspector‑General may, on the application of the registered trustee made before the end of the period for lodging a return under subsection (1), extend, or further extend, that period.

Offence

(5) A person commits an offence of strict liability if:

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

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

Penalty: 5 penalty units.

Note: See also section 277B (about infringement notices).

Division 35—Notice requirements

35‑1 Notice of significant events

Registered trustee must lodge notice

(1) A registered trustee must lodge with the Inspector‑General a notice, in the approved form, if any of the following events occur:

(a) the trustee becomes an insolvent under administration;

(b) a bankruptcy notice is issued under this Act in relation to the trustee as debtor, or a corresponding notice is issued in relation to the trustee as debtor under a law of an external Territory or a law of a foreign country;

(d) the trustee is disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001, or under a law of an external Territory or a law of a foreign country;

(e) the trustee ceases to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the trustee may incur working as a registered trustee;

(f) the trustee is issued with a notice under section 40‑40 of Schedule 2 to the Corporations Act 2001 (a show‑cause notice) in relation to the trustee’s registration as a liquidator under that Act;

(g) the trustee’s registration as a liquidator under the Corporations Act 2001 is suspended or cancelled;

(h) any other event prescribed.

The notice must be lodged within 5 business days after the registered trustee could reasonably be expected to be aware that the event has occurred.

Offence

(2) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 100 penalty units.

35‑5 Notice of other events

Registered trustee must lodge notice

(1) A registered trustee must lodge with the Inspector‑General a notice, in the approved form, if any of the following events occur:

(a) information included in an annual trustee return, or in an annual administration return, prepared by or on behalf of the trustee is or becomes inaccurate in a material particular;

(b) any other event prescribed.

The notice must be lodged within 10 business days after the registered trustee could reasonably be expected to be aware that the event has occurred.

Offence

(2) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 5 penalty units.

Note: See also section 277B (about infringement notices).

Division 40—Disciplinary and other action

Subdivision A—Introduction

40‑1 Simplified outline of this Division

Remedying failure to lodge documents or give information or documents

The Inspector‑General may direct a registered trustee to comply with a requirement to lodge a document, or give any information or document, to the Inspector‑General. If the trustee fails to comply with the direction, the Inspector‑General can direct that the trustee accept no further appointments or seek an order from the Court directing the trustee to comply.

Correcting and completing information given to the Inspector‑General

If the Inspector‑General reasonably suspects that information that a registered trustee is required to give the Inspector‑General under this Act is incomplete or inaccurate, the Inspector‑General can direct the trustee to confirm, complete or correct the information. The Inspector‑General can also direct the trustee to tell someone about the defect in the information. If the trustee fails to comply with a direction, the Inspector‑General can direct that the trustee accept no further appointments or seek an order from the Court directing the trustee to comply.

Other grounds for a direction not to accept further appointments

There are other grounds on which the Inspector‑General can issue a direction not to accept further appointments, for example, if the registered trustee fails to comply with a direction to convene a meeting.

Suspending or cancelling registration

An individual’s registration as a trustee can be suspended or cancelled.

The registration is automatically cancelled if the registered trustee becomes an insolvent under administration or dies.

In some circumstances, the Inspector‑General can suspend or cancel the registration of a person as a trustee. The Inspector‑General can also give a registered trustee notice to show‑cause why the trustee should continue to be registered. If the Inspector‑General is not satisfied with the answer, the Inspector‑General can refer the matter to a committee which will make a decision on what action should be taken.

An industry body can give the Inspector‑General notice of possible grounds for disciplinary action.

If a registration is suspended, the trustee can apply to the Inspector‑General to have the suspension lifted or shortened.

A decision about the suspension or cancellation of the registration of a trustee is reviewable by the Administrative Appeals Tribunal (see Division 96 of this Schedule).

Subdivision B—Direction to comply

40‑5 Registered trustee to remedy failure to lodge documents or give information or documents

Application of this section

(1) This section applies if a registered trustee fails to comply with a requirement to lodge any document, or give any information or document, that the trustee is required under this Act to lodge with or give to the Inspector‑General.

Inspector‑General may give direction to comply

(2) The Inspector‑General may, in writing, direct the trustee to comply with the requirement within 10 business days after the notice is given.

(3) The Inspector‑General may, on the application of a registered trustee made before the end of the period referred to in subsection (2), extend, or further extend, that period.

Consequences for failing to comply

(4) If the trustee does not comply within the period, the Inspector‑General may do either or both of the following:

(a) give a direction under subsection 40‑15(1) (direction not to accept further appointments);

(b) apply to the Court for an order, under section 30 (general powers of Courts in bankruptcy), section 45‑1 of this Schedule or any other provision that is relevant, directing the trustee to comply with the requirement within such time as is specified in the order.

Direction is not a legislative instrument

(5) A direction under subsection (2) is not a legislative instrument.

Relationship with other laws

(6) Nothing in this section limits the operation of any other provision of this Act, or any other law, in relation to a person who fails to comply with a requirement to lodge a document with, or give information or a document to, the Inspector‑General.

40‑10 Registered trustee to correct inaccuracies etc.

Application of this section

(1) This section applies if the Inspector‑General reasonably suspects that information that a registered trustee is required under this Act to give the Inspector‑General (whether in a document lodged or given to the Inspector‑General or otherwise) is incomplete or incorrect in any particular.

Inspector‑General may give direction to correct information etc.

(2) The Inspector‑General may, in writing, direct the trustee to do one or more of the following within a period of 10 business days after the direction is given:

(a) confirm to the Inspector‑General that the information is complete and correct;

(b) complete or correct the information (as the case requires);

(3) The Inspector‑General may, on the application of a registered trustee made before the end of the period referred to in subsection (2), extend, or further extend, that period.

Consequences for failing to comply

(4) If the trustee does not comply within the period, the Inspector‑General may do either or both of the following:

(a) give a direction under subsection 40‑15(1) (direction not to accept further appointments);

Direction is not a legislative instrument

(5) A direction under subsection (2) is not a legislative instrument.

Relationship with other laws

(6) Nothing in this section limits the operation of any other provision of this Act, or any other law, in relation to a person giving incomplete or incorrect information.

40‑15 Direction not to accept further appointments

Inspector‑General may give direction not to accept further appointments

(1) The Inspector‑General may, in writing, direct a registered trustee not to accept any further appointments as a trustee, or not to accept any further appointments as a trustee during a period specified in the direction, if:

(a) the trustee has failed to comply with a direction given to the trustee under section 40‑5 (direction to remedy failure to lodge documents, or give information or documents); or

(b) the trustee has failed to comply with a direction given to the trustee under section 40‑10 (direction to correct inaccuracies); or

(c) a committee has decided under paragraph 40‑55(1)(d) that the Inspector‑General should give the direction referred to in that paragraph; or

(d) the trustee has failed to comply with a direction given to the trustee under section 70‑70 (direction to give relevant material); or

(e) the trustee has failed to comply with a direction given to the trustee under subsection 75‑20(1) or (2) (direction to convene a meeting of creditors or comply with requirements in relation to such a meeting).

Condition of registration to comply with direction

(2) If the Inspector‑General gives a direction to a registered trustee under subsection (1), it is a condition of the trustee’s registration that the trustee must comply with the direction.

Withdrawal of direction

(3) The Inspector‑General may withdraw a direction given under subsection (1).

(4) The condition is removed from the trustee’s registration if the Inspector‑General withdraws the direction.

Direction is not a legislative instrument

(5) A direction under subsection (1) is not a legislative instrument.

Relationship with other laws

(6) Nothing in this section limits the operation of any other provision of this Act, or any other law, in relation to:

(a) a person who fails to comply with a requirement to lodge a document with, or give information or a document to, the Inspector‑General; or

(b) a person giving incomplete or incorrect information; or

(7) Nothing in this section limits the power of the Inspector‑General under this Act, or any other law, to apply to the Court for an order in relation to a failure to comply with a direction mentioned in subsection (1).

Subdivision C—Automatic cancellation

40‑20 Automatic cancellation

(1) The registration of a person as a trustee is cancelled if:

(a) the person becomes an insolvent under administration; or

(b) the person dies.

(2) The cancellation takes effect on the day the event mentioned in subsection (1) happens.

Subdivision D—Inspector‑General may suspend or cancel registration

40‑25 Inspector‑General may suspend registration

(1) The Inspector‑General may suspend the registration of a person as a trustee if:

(a) the person is disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001, or under a law of an external Territory or a law of a foreign country; or

(b) the person ceases to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered trustee; or

(c) the person’s registration as a liquidator under the Corporations Act 2001 has been cancelled or suspended, other than in compliance with a written request by the person to cancel or suspend the registration; or

(d) the person owes more than the prescribed amount of notified estate charges; or

(e) if the Court has made an order under section 90‑15 that the person repay remuneration—the person has failed to repay the remuneration; or

(f) the person has been convicted of an offence involving fraud or dishonesty; or

(g) the person lodges a request with the Inspector‑General in the approved form to have the registration suspended.

(2) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

40‑30 Inspector‑General may cancel registration

(1) The Inspector‑General may cancel the registration of a person as a trustee if:

(a) the person is disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001, or under a law of an external Territory or a law of a foreign country; or

(b) the person ceases to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered trustee; or

(c) the person’s registration as a liquidator under the Corporations Act 2001 has been cancelled, other than in compliance with a written request by the person to cancel the registration; or

(d) the person owes more than the prescribed amount of notified estate charges; or

(e) if the Court has made an order under section 90‑15 that the person repay remuneration—the person has failed to repay the remuneration; or

(f) the person has been convicted of an offence involving fraud or dishonesty; or

(g) the person lodges a request with the Inspector‑General in the approved form to have the registration cancelled.

(2) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

40‑35 Notice of suspension or cancellation

Application of this section

(1) This section applies if the Inspector‑General decides under section 40‑25 or 40‑30 to suspend or cancel the registration of a person as a trustee.

Inspector‑General must give notice of decision

(2) The Inspector‑General must, within 10 business days after making the decision, give the person a written notice setting out the decision, and the reasons for the decision.

When decision comes into effect

(3) The decision comes into effect on the day after the notice is given to the person.

Failure to give notice does not affect validity of decision

(4) A failure by the Inspector‑General to give the notice under subsection (2) within 10 business days does not affect the validity of the decision.

Subdivision E—Disciplinary action by committee

40‑40 Inspector‑General may give a show‑cause notice

(1) The Inspector‑General may give a registered trustee notice in writing asking the trustee to give the Inspector‑General a written explanation why the trustee should continue to be registered, if the Inspector‑General believes that:

(a) the trustee no longer has the qualifications, experience, knowledge and abilities prescribed under paragraph 20‑20(4)(a); or

(b) the trustee has committed an act of bankruptcy within the meaning of this Act or a corresponding law of an external Territory or a foreign country; or

(c) the trustee is disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001, or under a law of an external Territory or a law of a foreign country; or

(d) the trustee has ceased to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered trustee; or

(e) the trustee has breached a current condition imposed on the trustee; or

(f) the trustee has contravened a provision of this Act; or

(g) the trustee’s registration as a liquidator under the Corporations Act 2001 has been cancelled or suspended, other than in compliance with a written request by the trustee to cancel or suspend the registration; or

(h) the trustee owes more than the prescribed amount of notified estate charges; or

(i) if the Court has made an order under section 90‑15 that the trustee repay remuneration—the trustee has failed to repay the remuneration; or

(j) the trustee has been convicted of an offence involving fraud or dishonesty; or

(k) the trustee is permanently or temporarily unable to perform the functions and duties of a trustee because of physical or mental incapacity; or

(l) the trustee has failed to carry out adequately and properly (whether in Australia or in an external Territory or in a foreign country):

(i) the duties of a trustee; or

(ii) any other duties or functions that a registered trustee is required to carry out under a law of the Commonwealth or of a State or Territory, or under the general law; or

(m) if the trustee is or was the administrator of a debt agreement—the trustee has failed to carry out adequately and properly (whether in Australia or in an external Territory or in a foreign country) the duties of an administrator in relation to a debt agreement; or

(n) the trustee is not a fit and proper person; or

(o) the trustee is not resident in Australia or in another prescribed country; or

(p) the trustee has failed to comply with a standard prescribed for the purposes of subsection (4).

(2) A notice under subsection (1) is not a legislative instrument.

(3) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

(4) The Insolvency Practice Rules may prescribe standards applicable to the exercise of powers, or the carrying out of duties, of registered trustees.

40‑45 Inspector‑General may convene a committee

(1) The Inspector‑General may convene a committee to make a decision of a kind mentioned in section 40‑55 in relation to a registered trustee, or registered trustees.

(2) The committee must consist of:

(a) the Inspector‑General; and

(b) a registered trustee chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

40‑50 Inspector‑General may refer matters to the committee

The Inspector‑General may refer a registered trustee to a committee convened under section 40‑45 if the Inspector‑General:

(a) gives the trustee a notice under section 40‑40 (a show‑cause notice); and

(b) either:

(i) does not receive an explanation within 20 business days after the notice is given; or

(ii) is not satisfied by the explanation.

40‑55 Decision of the committee

(1) If a registered trustee is referred to a committee under section 40‑50, the committee must decide one or more of the following:

(a) that the trustee should continue to be registered;

(b) that the trustee’s registration should be suspended for a period, or until the occurrence of an event, specified in the decision;

(d) that the Inspector‑General should direct the trustee not to accept any further appointments as trustee, or not to accept any further appointments as trustee during the period specified in the decision;

(e) that the trustee should be publicly admonished or reprimanded;

(f) that a condition specified in the decision should be imposed on the trustee;

(g) that a condition should be imposed on all other registered trustees that they must not allow the trustee to carry out any of the functions or duties, or exercise any of the powers, of a trustee on their behalf (whether as employee, agent, consultant or otherwise) for a period specified in the decision of no more than 10 years;

(h) that the Inspector‑General should publish specified information in relation to the committee’s decision and the reasons for that decision.

(2) Without limiting paragraph (1)(f), conditions imposed under that paragraph may include one or more of the following:

(a) a condition that the trustee engage in, or refrain from engaging in, specified conduct;

(b) a condition that the trustee engage in, or refrain from engaging in, specified conduct except in specified circumstances;

(d) a condition that the trustee notify a specified person or class of persons of specified information;

(e) a condition that the trustee publish a specified statement;

(f) a condition that the trustee make a specified statement to a specified person or class of persons.

(3) In making its decision, the committee may have regard to:

(a) any information provided to the committee by the Inspector‑General; and

(b) any explanation given by the trustee; and

(d) if the trustee is or was also a registered liquidator under the Corporations Act 2001—any information in relation to the trustee given to the committee by ASIC or a committee convened under the Insolvency Practice Schedule (Corporations); and

(e) any other matter that the committee considers relevant.

40‑60 Committee to report

The committee must give the registered trustee and the Inspector‑General a report setting out:

(a) the committee’s decision in relation to the trustee; and

(b) the committee’s reasons for that decision; and

(i) the condition; and

(ii) the committee’s reasons for imposing the condition; and

(d) if the committee decides under paragraph 40‑55(1)(g) that a condition should be imposed on all other registered trustees in relation to the trustee:

(i) the condition; and

(ii) the committee’s reasons for imposing the condition.

40‑65 Inspector‑General must give effect to the committee’s decision

The Inspector‑General must give effect to the committee’s decision.

Subdivision F—Lifting or shortening suspension

40‑70 Application to lift or shorten suspension

Application of this section

(1) This section applies if a person’s registration as a trustee has been suspended.

Suspended trustee may apply to the Inspector‑General

(2) The person may apply to the Inspector‑General:

(a) for the suspension to be lifted; or

(b) for the period of the suspension to be shortened.

(3) The application must be lodged with the Inspector‑General in the approved form.

(4) The application is properly made if subsection (3) is complied with.

40‑75 Inspector‑General may convene a committee to consider applications

(1) The Inspector‑General may convene a committee for the purposes of considering an application, or applications, made under section 40‑70.

(2) The committee must consist of:

(a) the Inspector‑General; and

(b) a registered trustee chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

40‑80 Inspector‑General must refer applications to a committee

(1) The Inspector‑General must refer an application that is properly made under section 40‑70 to a committee convened under section 40‑75 for consideration.

(2) The Inspector‑General must do so within 2 months after receiving the application.

40‑85 Committee to consider applications

(1) If an application is referred to a committee, the committee must consider the application.

(2) Unless the applicant otherwise agrees, the committee must interview the applicant for the purposes of considering the application.

(3) Within 10 business days after interviewing the applicant or obtaining the agreement of the applicant as referred to in subsection (2), the committee must:

(a) decide whether the suspension should be lifted, or the period of the suspension shortened; and

(b) if the period of the suspension is to be shortened—specify when the suspension is to end.

40‑90 Committee to report

The committee must give the applicant and the Inspector‑General a report setting out:

(a) the committee’s decision on the application; and

(b) the committee’s reasons for that decision; and

40‑95 Committee’s decision given effect

If the committee decides that a suspension is to be lifted or shortened, the suspension is lifted or shortened in accordance with the decision.

Subdivision G—Action initiated by industry body

40‑100 Notice by industry bodies of possible grounds for disciplinary action

Industry body may lodge notice

(1) An industry body may lodge with the Inspector‑General a notice in the approved form (an industry notice):

(a) stating that the body reasonably suspects that there are grounds for the Inspector‑General:

(i) to suspend the registration of a registered trustee under section 40‑25; or

(ii) to cancel the registration of a registered trustee under section 40‑30; or

(iii) to give a registered trustee a notice under section 40‑40 (a show‑cause notice); or

(iv) to impose a condition on a registered trustee under another provision of this Schedule; and

(b) identifying the registered trustee; and

Inspector‑General must consider information and documents

(2) The Inspector‑General must consider the information and the copies of any documents included with the industry notice.

Inspector‑General must give notice if no action to be taken

(3) If, after such consideration, the Inspector‑General decides to take no action in relation to the matters raised by the industry notice, the Inspector‑General must give the industry body written notice of that fact.

45 business days to consider and decide

(4) The consideration of the information and the copies of any documents included with the industry notice must be completed and, if the Inspector‑General decides to take no action, a notice under subsection (3) given, within 45 business days after the industry notice is lodged.

Inspector‑General not precluded from taking action

(5) The Inspector‑General is not precluded from:

(a) suspending the registration of a registered trustee under section 40‑25; or

(b) cancelling the registration of a registered trustee under section 40‑30; or

(d) imposing a condition on a registered trustee under another provision of this Schedule;

wholly or partly on the basis of information or a copy of a document included with the industry notice, merely because the Inspector‑General has given a notice under subsection (3) in relation to the matters raised by the industry notice.

Notice to industry body if Inspector‑General takes action

(6) If the Inspector‑General does take action of the kind mentioned in subsection (5) wholly or partly on the basis of information or a copy of a document included with the industry notice, the Inspector‑General must give the industry body notice of that fact.

Notices are not legislative instruments

(7) A notice under subsection (3) or (6) is not a legislative instrument.

40‑105 No liability for notice given in good faith etc.

(1) An industry body is not liable civilly, criminally or under any administrative process for giving a notice under subsection 40‑100(1) if:

(a) the body acted in good faith in giving the notice; and

(b) the suspicion that is the subject of the notice is a reasonable suspicion.

(2) A person who, in good faith, makes a decision as a result of which the industry body gives a notice under subsection 40‑100(1) is not liable civilly, criminally or under any administrative process for making the decision.

(3) A person who, in good faith, gives information or a document to an industry body that is included, or a copy of which is included, in a notice under subsection 40‑100(1) is not liable civilly, criminally or under any administrative process for giving the information or document.

40‑110 Meaning of industry bodies

The Insolvency Practice Rules may prescribe industry bodies for the purposes of this Subdivision.

Division 45—Court oversight of registered trustees

45‑1 Court may make orders in relation to registered trustees

(1) The Court may make such orders as it thinks fit in relation to a registered trustee.

(2) The Court may exercise the power under subsection (1):

(a) on its own initiative, during proceedings before the Court; or

(b) on application under subsection (3).

(3) Each of the following persons may apply for an order under subsection (1):

(a) the registered trustee;

(b) the Inspector‑General.

(4) Without limiting the matters which the Court may take into account when making orders, the Court may take into account:

(a) whether the registered trustee has faithfully performed, or is faithfully performing, the registered trustee’s duties; and

(b) whether an action or failure to act by the registered trustee is in compliance with this Act and the Insolvency Practice Rules; and

(d) whether any person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the registered trustee; and

(e) the seriousness of the consequences of any action or failure to act by the registered trustee, including the effect of that action or failure to act on public confidence in registered trustees as a group.

(5) This section does not limit the Court’s powers under any other provision of this Act, or under any other law.

45‑5 Court may make orders about costs

(1) Without limiting section 45‑1, the Court may make orders in relation to a registered trustee that deal with the costs of a matter considered by the Court.

(2) Those orders may include an order that:

(a) the registered trustee is personally liable for some or all of those costs; and

(b) the registered trustee is not entitled to be reimbursed by a regulated debtor’s estate or creditors in relation to some or all of those costs.

(3) This section does not limit the Court’s powers under any other provision of this Act, or under any other law.

Division 50—Committees under this Part

50‑1 Simplified outline of this Division

This Division sets out common rules for committees established under this Part.

If a prescribed body appoints a person to a committee, that person must have the prescribed knowledge or experience or, if no knowledge or experience is prescribed, the knowledge and experience necessary to carry out the functions to be performed. If the Minister appoints a person to a committee, that person must have knowledge or experience in a field such as business, law (including the law of bankruptcy) or public policy relating to bankruptcy.

A single committee may consider more than one matter. The consideration of a matter is not affected by a change in the membership of the committee. A matter may be adjourned or transferred to another committee. The Insolvency Practice Rules may prescribe procedures and make other rules for committees.

The use and disclosure of information given to a committee is restricted to listed purposes.

50‑5 Prescribed body appointing a person to a committee

Application of this section

(1) This section applies if a prescribed body is to appoint a person to a committee under this Part.

Prescribed body must only appoint a person with appropriate knowledge and experience

(2) The prescribed body is to appoint a person as a member of the committee only if the prescribed body is satisfied that the person has:

(a) if any knowledge or experience is prescribed in relation to appointments of the kind to be made—that knowledge or experience; or

(b) if no knowledge or experience is prescribed in relation to appointments of the kind to be made—the knowledge and experience necessary to carry out the person’s functions as a member of the committee if appointed.

50‑10 Minister appointing a person to a committee

Application of this section

(1) This section applies if the Minister is to appoint a person to a committee under this Part.

Matters of which the Minister must be satisfied before appointing

(2) The Minister is to appoint a person as a member of the committee only if the Minister is satisfied that the person is qualified for appointment by virtue of his or her knowledge of, or experience in, one or more of the following fields:

(a) business;

(b) law, including the law relating to bankruptcy;

(d) accounting;

(e) public policy relating to bankruptcy.

50‑15 Single committee may consider more than one matter

A single committee may be convened under this Part to consider one or more of the following:

(a) a matter or matters relating to one applicant for registration as a trustee;

(b) a matter or matters relating to more than one applicant for registration as a trustee;

(d) a matter or matters relating to more than one registered trustee.

50‑20 Ongoing consideration of matters by committee

If a committee is convened under this Part to consider a matter:

(a) the committee’s powers, functions and duties in relation to the matter are not affected by a change in the membership of the committee; and

(b) the committee may adjourn its consideration of the matter, and may do so more than once; and

(c) the matter may be transferred to another committee with powers, functions and duties under this Part in relation to matters of that kind.

50‑25 Procedure and other rules relating to committees

The Insolvency Practice Rules may provide for and in relation to:

(a) the manner in which the committees convened under this Part are to perform their functions, including:

(i) meetings of committees; and

(ii) the number of committee members required to constitute a quorum; and

(iii) disclosure of interests in a matter before a committee; and

(iv) the manner in which questions are to be decided by the committee; and

(b) the reconstitution of a committee; and

50‑30 Remuneration of committee members

(1) A member of a committee convened under this Part is entitled to receive the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the member is entitled to receive such remuneration as the Minister determines in writing.

(2) A member is entitled to receive such allowances as the Minister determines in writing.

(3) This section has effect subject to the Remuneration Tribunal Act 1973.

50‑35 Committee must only use information etc. for purposes for which disclosed

Offence

(1) A person commits an offence if:

(a) the person is or was a member of a committee convened under this Part; and

(b) information or a document is or was disclosed to the person for the purposes of exercising powers or performing functions as a member of the committee; and

Penalty: 50 penalty units.

Exception—information or document disclosed to ASIC or another committee etc.

(2) Subsection (1) does not apply if the information or document:

(a) is used or disclosed by the person for the purposes of exercising powers or performing functions as a member of the committee mentioned in subsection (1); or

(b) is disclosed:

(i) to ASIC to assist ASIC to exercise its powers or perform its functions under Chapter 5 of the Corporations Act 2001 or the Insolvency Practice Schedule (Corporations); or

(ii) to a committee convened under Part 2 of the Insolvency Practice Schedule (Corporations) to assist the committee to exercise its powers or perform its functions under that Part; or

(iii) to another committee convened under this Part to assist the committee to exercise its powers or perform its functions under this Part; or

(iv) to enable or assist a body prescribed for the purposes of this paragraph to perform its disciplinary function in relation to its members; or

(v) in order to enable or assist an authority or person in a State or Territory, or a foreign country, to perform or exercise a function or power that corresponds, or is analogous, to any of the committee’s or the Inspector‑General’s functions and powers; or

(vi) to a court or tribunal in relation to proceedings before the court or tribunal.

Note 1: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Note 2: Chapter 5 of the Corporations Act 2001 deals with external administration of companies.

Part 3—General rules relating to estate administrations

Division 55—Introduction

55‑1 Simplified outline of this Part

This Part sets out requirements for conducting the administration of a regulated debtor’s estate.

The main provisions deal with:

(a) the remuneration of the trustee; and

(b) the duties of the trustee in handling the money and other property of the estate; and

(d) the duties of the trustee to keep appropriate records, to report to the Inspector‑General and to give information, documents and reports to creditors and others; and

(e) creditor meetings; and

(f) the creation and conduct of a committee to monitor the administration (called a committee of inspection); and

(g) the rights of creditors to review the administration; and

(h) the rights of creditors to remove the trustee and appoint another; and

(i) the review of the administration by the Court.

There are additional rules that apply to the administration of a regulated debtor’s estate (for example, about appointment of the trustee) in this Act.

Division 60—Remuneration and other benefits received by the trustee

Subdivision A—Introduction

60‑1 Simplified outline of this Division

Remuneration

The trustee of a regulated debtor’s estate is entitled to receive remuneration for necessary work properly performed by the trustee in relation to the administration.

The amount of remuneration will usually be set under a remuneration determination. Remuneration determinations are made in most cases by the creditors or the committee of inspection (if there is one).

However, if there is no remuneration determination, the trustee will be entitled to receive a reasonable amount for the work. The maximum amount that the trustee may receive in this way is $5,000 (exclusive of GST and indexed).

The Court may review the remuneration of the trustee of a regulated debtor’s estate and may also make orders under Division 90 about remuneration (including ordering repayment of remuneration).

Other benefits

The trustee of a regulated debtor’s estate must not:

(a) employ a related entity, unless certain requirements are met; or

(b) purchase any assets of the estate; or

Subdivision B—Remuneration of trustees

60‑5 Trustee’s remuneration

Remuneration in accordance with remuneration determinations

(1) The trustee of a regulated debtor’s estate is entitled to receive remuneration for necessary work properly performed by the trustee in relation to the administration of the regulated debtor’s estate, in accordance with the remuneration determinations (if any) for the trustee (see sections 60‑10 and 60‑11).

Remuneration for trustees if no remuneration determination made

(2) If no remuneration determination is made in relation to necessary work properly performed by a trustee in relation to the administration of the regulated debtor’s estate, the trustee is entitled to receive reasonable remuneration for the work. However, that remuneration must not exceed the maximum default amount.

Remuneration to be paid from the funds in the estate

(3) The remuneration is to be paid from the funds in the regulated debtor’s estate.

60‑10 Remuneration determinations—creditors or committee of inspection

A determination, specifying remuneration that a trustee of a regulated debtor’s estate is entitled to receive for necessary work properly performed by the trustee in relation to the administration of the estate, may be made:

(a) by resolution of the creditors; or

(b) if there is a committee of inspection and a determination is not made under paragraph (a)—by the committee of inspection.

60‑11 Remuneration determinations—Inspector‑General

(1) The Inspector‑General may, in prescribed circumstances, make a determination specifying remuneration that a trustee of a regulated debtor’s estate is entitled to receive for necessary work properly performed by the trustee in relation to the administration of the estate.

(2) The Inspector‑General must have regard to any matter prescribed in making a determination under subsection (1).

(3) Insolvency Practice Rules made for the purposes of subsection (2) may provide for and in relation to:

(a) a matter referred to in section 60‑12; or

(b) any other matter.

60‑12 Remuneration determinations—general rules

Manner in which remuneration may be specified

(1) A determination under section 60‑10 or 60‑11 may specify remuneration that the trustee is entitled to receive in either or both of the following ways:

(a) by specifying an amount of remuneration;

(b) by specifying a method for working out an amount of remuneration.

Remuneration on a time‑cost basis

(2) If a determination under section 60‑10 or 60‑11 specifies that the trustee is entitled to receive remuneration worked out wholly or partly on a time‑cost basis, the determination must include a cap on the amount of remuneration worked out on a time‑cost basis that the trustee is entitled to receive.

Remuneration on a percentage basis

(3) If a determination under section 60‑10 or 60‑11 specifies that the trustee is entitled to receive remuneration worked out wholly or partly on the basis of a specified percentage of money received by the trustee in respect of the regulated debtor’s estate:

(a) the determination must specify the money to which the specified percentage applies; and

(b) the specified percentage must not be greater than the percentage prescribed for the purposes of this paragraph.

More than one remuneration determination may be made

(4) To avoid doubt, more than one determination under section 60‑10 or 60‑11 may be made in relation to a particular trustee and a particular regulated debtor’s estate.

60‑15 Maximum default amount

Maximum default amount

(1) The maximum default amount for a trustee is an amount (exclusive of GST) worked out as follows:

(a) if the trustee is appointed as the trustee of the regulated debtor’s estate during the financial year beginning on 1 July 2016—$5,000;

(b) if the trustee is appointed as the trustee of the regulated debtor’s estate during a financial year beginning on or after 1 July 2017—the greater of:

(i) the amount worked out by multiplying the indexation factor for the financial year (worked out under subsections (3) and (4)) by the maximum default amount for a trustee appointed as the trustee of a regulated debtor’s estate during the previous financial year; and

(ii) the amount (if any) prescribed for the purposes of this subparagraph.

Rounding

(2) Amounts worked out under subsection (1) must be rounded to the nearest whole dollar (rounding 50 cents upwards).

Indexation factor

(3) Subject to subsection (4), the indexation factor for a financial year is the number worked out by dividing the index number for the March quarter immediately preceding that financial year by the index number for the March quarter immediately preceding that first‑mentioned March quarter.

(4) If an indexation factor worked out under subsection (3) would be less than 1, the indexation factor is to be increased to 1.

Changes to CPI index reference period and publication of substituted index numbers

(5) In working out the indexation factor:

(a) use only the index numbers published in terms of the most recently published index reference period for the Consumer Price Index; and

(b) disregard index numbers published in substitution for previously published index numbers (except where the substituted numbers are published to take account of changes in the index reference period).

Definition—index number

(6) In this section:

index number, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter.

Subdivision E—Duties of trustees relating to remuneration and benefits etc.

60‑20 Trustee must not derive profit or advantage from the administration of the estate

Deriving profit or advantage from the estate

(1) A trustee of a regulated debtor’s estate must not directly or indirectly derive any profit or advantage from the administration of the estate.

Circumstances in which profit or advantage is taken to be derived

(2) To avoid doubt, a trustee of a regulated debtor’s estate is taken to derive a profit or advantage from the administration of the estate if:

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

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

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

Exceptions

(3) Subsection (1) does not apply to the extent that:

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

(b) the Court gives leave to the trustee to derive the profit or advantage.

Note: Subsection (1) would not, for example, prevent the trustee from recovering remuneration for necessary work properly performed by the trustee in relation to the administration of the estate, as the trustee is permitted to do so under other provisions of this Act.

(4) Despite paragraph (2)(c), subsection (1) does not apply to the extent that:

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

(b) the person is a related entity of the trustee; and

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

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

(iii) it is not reasonably practicable in all the circumstances to obtain the agreement, by resolution, of the creditors to the related entity being employed or engaged and the cost of employing the related entity is reasonable in all the circumstances.

(5) Subsection (1) does not apply to the extent that the profit or advantage is a payment that:

(a) is made to the trustee by or on behalf of the Commonwealth or an agency or authority of the Commonwealth; and

(b) is of a kind prescribed.

Offence

(6) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (3), (4) and (5) (see subsection 13.3(3) of the Criminal Code).

Effect of contravention of this section

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

60‑21 Inducements to be appointed as trustee

(1) A person must not give, or agree or offer to give, to another person any valuable consideration with a view to:

(a) securing the first person’s appointment or nomination as a trustee of a regulated debtor’s estate; or

(b) securing or preventing the appointment or nomination of a third person as a trustee of a regulated debtor’s estate.

Strict liability offence

(2) A person commits an offence of strict liability if a person contravenes subsection (1).

Penalty: 50 penalty units or imprisonment for 3 months, or both.

60‑26 Payments in respect of performance by third parties

No payments for performance of trustee’s ordinary duties by another person

(1) If a trustee of a regulated debtor’s estate receives remuneration for his or her services, a payment in respect of the performance by another person of the ordinary duties that are required by this Act to be performed by the trustee is not allowed in the trustee’s accounts.

Exception

(2) Subsection (1) does not apply to a payment if the payment was authorised by resolution of:

(a) the creditors; or

(b) the committee of inspection (if any).

Offence

(3) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Division 65—Funds handling

65‑1 Simplified outline of this Division

The trustee of a regulated debtor’s estate has duties to:

(a) promptly pay all money of the estate into an account (called an administration account); and

(b) promptly deposit instruments such as securities with a bank; and

(c) not pay any money into the account unless it is money of a regulated debtor’s estate for which the account is held; and

(d) only pay money out of the account if it is for a legitimate purpose.

The trustee may keep a single account for more than one estate.

People with a financial interest in the administration of a regulated debtor’s estate (such as creditors) may ask the Court to give directions to the trustee about the way money and other property of the estate is to be handled.

If the trustee of a regulated debtor’s estate does not comply with this Division, the trustee may have to pay penalties, be paid less remuneration or be removed as trustee.

65‑5 Trustee must pay all money into the administration account

Trustee must pay money into the administration account

(1) The trustee of a regulated debtor’s estate must pay all money received by the trustee on behalf of, or in relation to, the estate into an administration account for the estate within 5 business days after receipt.

Exception

(2) If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

(3) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

65‑10 Administration accounts

A bank account is an administration account in relation to a regulated debtor’s estate if:

(a) the account is maintained in relation to the regulated debtor’s estate; and

(b) if any requirements are prescribed in relation to administration accounts of regulated debtors’ estates, it complies with those requirements.

65‑15 Trustee must not pay other money into the administration account

Trustee must not pay other money into the administration account

(1) The trustee of a regulated debtor’s estate must not pay any money into the administration account for the estate if it is not received by the trustee on behalf of, or in relation to:

(a) the estate; or

(b) where the trustee maintains the account in relation to more than one estate of a regulated debtor or regulated debtors—one of those estates.

Exception

(2) If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

(3) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

65‑20 Consequences for failure to pay money into administration account

Application of this section

(1) This section applies if:

(a) the trustee of a regulated debtor’s estate:

(i) is subject to a requirement under subsection 65‑5(1) (paying money into administration account); and

(ii) fails to comply with the requirement in relation to an amount of money; and

(b) the amount exceeds:

(i) $50; or

(ii) if another amount is prescribed—that other amount.

Exception

(2) Subsection (1) does not apply if, on the application of the trustee of the regulated debtor’s estate, the Court is satisfied that the trustee had sufficient reason for failing to comply with the requirement in relation to the amount.

Trustee must pay penalty on excess

(3) The trustee must, as a penalty, pay interest to the Commonwealth on the excess, worked out:

(a) at the rate of 20% per year; or

(b) if another rate is prescribed—at that other rate;

for the period during which the trustee fails to comply with the requirement.

(4) The trustee is personally liable for, and is not entitled to be reimbursed by the estate in relation to, the payment of that interest.

65‑25 Paying money out of administration account

Money only to be paid out of administration account in accordance with this Act etc.

(1) The trustee of a regulated debtor’s estate must not pay any money out of the administration account for the estate otherwise than:

(a) for purposes related to the administration of the estate; or

(b) in accordance with this Act; or

Offence

(2) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

65‑31 Interest on administration account

(1) The trustee of a regulated debtor’s estate is entitled, in his or her personal capacity, to each payment of interest on the administration account for the estate, less an amount equal to the bank fees or charges (if any) paid or payable on the account during the period to which the interest relates.

(2) If, under subsection (1), the trustee is only entitled to part of a payment of interest, the rest of that payment:

(a) if the administration account contains money from only one estate of a regulated debtor—forms part of that estate; or

(b) if the administration account contains money from more than one estate of a regulated debtor or regulated debtors—forms part of those estates in proportion to the respective amounts of money held in the administration account on account of each of those estates.

(3) Interest on money in the administration account for a regulated debtor’s estate is not subject to taxation under a law of the Commonwealth, a State or a Territory except as provided in Part 2 of the Bankruptcy (Estate Charges) Act 1997.

65‑32 Reconciliation of administration account

Application of this section

(1) This section applies if the trustee maintains a single bank account for more than one estate of a regulated debtor or regulated debtors.

Trustee must maintain separate records

(2) The trustee must:

(a) maintain a separate record for each of those estates of:

(i) money received by the trustee from the regulated debtor in relation to the estate; and

(ii) payments made by the trustee in relation to the estate; and

(iii) the balance of money held by the trustee in relation to the estate; and

(b) at least once every 25 business days, reconcile the balance relating to each estate held in the account with the corresponding record maintained under paragraph (a).

65‑40 Handling securities

Securities must be deposited with administration account bank

(1) The trustee of a regulated debtor’s estate must deposit in a bank:

(a) the bills of exchange; and

(b) the promissory notes; and

payable to the regulated debtor or the trustee as soon as practicable after they are received by the trustee.

Exception

(2) If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

(3) A person commits an offence of strict liability if:

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

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

Penalty: 5 penalty units.

Note 1: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Note 2: See also section 277B (about infringement notices).

Delivery of securities

(4) The bills, notes or other instrument or security must be delivered out on the signed request of the trustee.

65‑45 Handling of money and securities—Court directions

(1) The Court may, on application, give directions regarding the payment, deposit or custody of:

(a) money; and

(b) bills of exchange, promissory notes and other negotiable instruments and securities;

that are payable to, or held by, the trustee of a regulated debtor’s estate.

(2) The Court may, on application, give directions authorising the trustee of a regulated debtor’s estate to make payments into and out of a special bank account.

(3) Without limiting subsection (2), the Court may:

(a) authorise the payments for the time and on the terms it thinks fit; and

(b) if the Court thinks the account is no longer required—at any time order it to be closed.

(4) A copy of an order under paragraph (3)(b) must be served by the trustee on the bank with which the special bank account was opened.

(5) An application under this section may be made by a person with a financial interest in the administration of the regulated debtor’s estate.

65‑46 Review of payments to third parties

(1) The Insolvency Practice Rules may provide for and in relation to the review by the Inspector‑General of a bill of costs for services provided by a person in relation to the administration of a regulated debtor’s estate.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) the application for the review (including who may apply); and

(b) the powers available to the Inspector‑General in relation to the review; and

(d) the decisions that may be made by the Inspector‑General in relation to the review; and

(e) the notification of decisions made by the Inspector‑General; and

(f) the consideration of the decisions made by the Inspector‑General in relation to the review by the Court.

65‑50 Rules in relation to consequences for failure to comply with this Division

The Insolvency Practice Rules may provide for and in relation to:

(a) the payment by the trustee of a regulated debtor’s estate of interest at such rate, on such amount and in respect of such period as is prescribed; and

(b) disallowance of all or of such part as is prescribed of the remuneration of the trustee of a regulated debtor’s estate; and

(d) the payment by the trustee of a regulated debtor’s estate of any expenses occasioned by reason of his or her default;

in cases where the trustee of a regulated debtor’s estate contravenes or fails to comply with this Division (including Insolvency Practice Rules made under this Division).

Division 70—Information

Subdivision A—Introduction

70‑1 Simplified outline of this Division

The trustee of a regulated debtor’s estate must:

(a) give annual reports of the administration of the estate (called annual administrative returns) to the Inspector‑General; and

(b) keep books of meetings and other affairs of the estate; and

(d) allow access to those books by creditors; and

(e) give creditors and others requested information, documents and reports relating to the administration.

The committee of inspection (if there is one) may also request information, documents and reports from the trustee under Division 80.

If the trustee does not comply with a request, the Inspector‑General may direct the trustee to do so. If the trustee does not comply with the direction, the Inspector‑General may ask the Court to order compliance. Alternatively, the person who requested the information may ask the Court to order compliance with the request.

Subdivision B—Annual administration return

70‑5 Annual administration return

Application of this section

(1) This section applies if a person is the trustee of a regulated debtor’s estate during all or part of a financial year.

Annual administration return to be lodged

(2) The person must lodge a return in relation to the person’s administration of that estate during that year or part of that year (as the case requires).

(3) The return must:

(a) be in the approved form; and

(b) be lodged with the Inspector‑General within 25 business days after the end of the financial year.

Late lodgement fee payable

(4) If the person does not lodge the return within the period mentioned in paragraph (3)(b), the person must pay a late lodgement fee, determined by the Minister by legislative instrument, by way of penalty.

Subdivision C—Record‑keeping

70‑6 Subdivision applies to the Official Trustee

This Subdivision applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

70‑10 Administration books

Trustee must keep proper books

(1) The trustee of a regulated debtor’s estate must keep proper books in which the trustee must cause to be made:

(a) entries or minutes of proceedings at meetings relating to the administration of the estate; and

(b) such other entries as are necessary to give a complete and correct record of the trustee’s administration of the estate.

(2) The trustee must:

(a) ensure that the books are available at the trustee’s office for inspection; and

(b) permit a creditor, or another person acting on the creditor’s behalf, to inspect the books at all reasonable times.

Exception

(3) Subsections (1) and (2) do not apply if the trustee has a reasonable excuse.

Offence

(4) A person commits an offence of strict liability if:

(a) the person is subject to a requirement under subsection (1) or (2); and

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

Penalty: 5 penalty units.

Note 1: A defendant bears an evidential burden in relation to the matter in subsection (3) (see subsection 13.3(3) of the Criminal Code).

Note 2: See also section 277B (about infringement notices).

70‑11 Trustee’s books when trading

Trustee must keep trading books etc.

(1) If the trustee of a regulated debtor’s estate carries on a business previously carried on by the regulated debtor, the trustee must:

(a) keep such books as are usually kept in relation to the carrying on of a business of that kind; and

(b) permit a creditor, or another person acting on the creditor’s behalf, to inspect the books at all reasonable times.

Offence

(2) A person commits an offence of strict liability if:

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

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

Penalty: 5 penalty units.

Note: See also section 277B (about infringement notices).

70‑15 Audit of administration books—Inspector‑General

Inspector‑General may audit books, or cause them to be audited

(1) The Inspector‑General may audit, or cause to be audited, the books referred to in section 70‑5 (annual administration return), 70‑10 (administration books) or 70‑11 (books when trading).

Audit on the Inspector‑General’s initiative or on request

(2) The audit may be conducted:

(a) on the Inspector‑General’s own initiative; or

(b) at the request of the regulated debtor; or

Auditor must prepare a report

(3) The person carrying out the audit must prepare a report on the audit.

Inspector‑General must give a copy of the report

(4) The Inspector‑General must give a copy of the report to:

(a) the trustee of the estate; and

(b) the person who requested the report (if any).

Costs of an audit

(5) The costs of an audit under this section must be determined by the Inspector‑General and is to be borne by the estate.

Qualified privilege in relation to audit reports

(6) A person who conducts an audit under this section has qualified privilege (within the meaning of the Corporations Act 2001) in respect of any report prepared under subsection (3) that is given to a person under subsection (4) or otherwise published.

70‑20 Audit of administration books—on order of the Court

(1) The Court may order that the Inspector‑General audit, or cause to be audited, the books referred to in section 70‑5 (annual administration return), 70‑10 (administration books) or 70‑11 (books when trading).

(2) The order may be made on application of any person with a financial interest in the administration of the regulated debtor’s estate.

(3) The Court may make such orders in relation to the audit as it thinks fit, including:

(a) the preparation and provision of a report on the audit; and

(b) orders as to the costs of the audit.

70‑25 Trustee to comply with auditor requirements

Application of this section

(1) This section applies if books are audited under section 70‑15 or 70‑20.

Trustee must give assistance etc.

(2) The trustee of the estate must give to the person carrying out the audit such books, information and assistance as the person reasonably requires.

Exception

(3) Subsection (2) does not apply if the trustee has a reasonable excuse.

Offence

(4) A person commits an offence of strict liability if:

(a) the person is subject to a requirement under subsection (2); and

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

Penalty: 5 penalty units.

Note 1: A defendant bears an evidential burden in relation to the matter in subsection (3) (see subsection 13.3(3) of the Criminal Code).

Note 2: See also section 277B (about infringement notices).

70‑30 Transfer of books to new trustee

Application of this section

(1) This section applies if:

(a) a person (the former trustee) ceases to be the trustee of a regulated debtor’s estate; and

(b) a registered trustee (the new trustee) is appointed as trustee of the estate instead.

Transfer of books to new trustee

(2) The former trustee must transfer to the new trustee, within the handover period, possession or control of any books relating to the administration of the estate that are in the former trustee’s possession or control.

(3) The handover period is:

(a) the period of 10 business days beginning on the day after the new trustee is appointed; or

(b) if another period is agreed between the former trustee and the new trustee—that other period.

(4) The former trustee may take a copy of any part of the books before transferring possession or control of them to the new trustee.

New trustee must accept the books

(5) The new trustee must take possession or accept control of any books relating to the administration of the regulated debtor’s estate.

New trustee must allow inspection etc.

(6) After possession or control of the books is transferred, the new trustee must allow the former trustee to inspect them at any reasonable time and take a copy of any part of the books.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2), (5) or (6); and

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 50 penalty units.

Lien against books not prejudiced

(8) If the new trustee is entitled to take possession or control of the books under this section:

(a) a person is not entitled, as against the new trustee, to claim a lien on the books; and

(b) such a lien is not otherwise prejudiced.

70‑35 Retention, return or destruction of books

Retention period for books

(1) The last trustee to administer a regulated debtor’s estate must retain all books that:

(a) relate to the administration of the estate; and

(b) are in the last trustee’s possession or control at the end of the administration;

for a period (the retention period) of 7 years from the end of the administration.

Exception—reasonable excuse

(2) Subsection (1) does not apply if the trustee has a reasonable excuse.

Exception—books given by regulated debtor

(3) Despite subsection (1), any books that the regulated debtor has given to the trustee of the estate may be returned to the regulated debtor within the retention period:

(a) if there is a committee of inspection—as the committee directs; or

(b) otherwise—as the creditors by resolution direct.

Return or destruction of books at end of retention period

(4) The trustee may return the books to the regulated debtor, or destroy the books, at the end of the retention period.

Offence

(5) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (2) and (3) (see subsection 13.3(3) of the Criminal Code).

Relationship with other laws

(6) Subsections (3) and (4) do not apply to the extent that the trustee is under an obligation to retain the books, or a part of the books, under another provision of this Act or under any other law.

70‑36 Return or destruction of irrelevant books

(1) The trustee of a regulated debtor’s estate may, at any time during the administration of the estate, return to the regulated debtor, or destroy, any books that:

(a) the regulated debtor has given to any trustee of the estate; and

(b) the trustee considers will not help the administration of the estate.

(2) Despite subsection (1), the trustee is not permitted to return the books to the regulated debtor, or to destroy them, if the trustee knows, or reasonably ought to know, that:

(a) another person had a lien over the books before the trustee took possession of them; or

(b) another person has a legal right to possession of the books; or

(c) the trustee is not permitted to return the books to the regulated debtor or destroy them (as the case requires), because of another provision of this Act, or a provision of any other law.

Subdivision D—Giving information etc. to creditors and others

70‑37 Subdivision applies to the Official Trustee

This Subdivision applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

70‑40 Right of creditors to request information etc. from trustee

(1) The creditors may by resolution request the trustee of a regulated debtor’s estate to:

(a) give information; or

(b) provide a report; or

to the creditors.

(2) The trustee must comply with the request unless:

(a) the information, report or document is not relevant to the administration of the regulated debtor’s estate; or

(b) the trustee would breach his or her duties in relation to the administration of the regulated debtor’s estate if the trustee complied with the request; or

(3) The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for a trustee to comply with a request of a kind mentioned in subsection (1).

70‑45 Right of individual creditor to request information etc. from trustee

(1) A creditor may request the trustee of a regulated debtor’s estate to:

(a) give information; or

(b) provide a report; or

to the creditor.

(2) The trustee must comply with the request unless:

(a) the information, report or document is not relevant to the administration of the regulated debtor’s estate; or

(b) the trustee would breach his or her duties in relation to the administration of the regulated debtor’s estate if the trustee complied with the request; or

(3) The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for the trustee of a regulated debtor’s estate to comply with a request of a kind mentioned in subsection (1).

70‑50 Reporting to creditors

(1) The Insolvency Practice Rules may provide for and in relation to the obligations of trustees of regulated debtors’ estates:

(a) to give information; and

(b) to provide reports; and

to creditors or the regulated debtor.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) other circumstances in which the trustee of a regulated debtor’s estate must give information, provide a report or produce a document to a creditor or the regulated debtor; and

(b) the manner and form in which information is to be given, a report provided or a document produced; and

(d) who is to bear the cost of giving information, providing a report or producing a document.

(3) The Insolvency Practice Rules may:

(a) make different provision in relation to different kinds of estate administration; and

(b) provide that specified requirements imposed under the Insolvency Practice Rules may be replaced or modified, by resolution, by:

(i) the creditors; or

(ii) if there is a committee of inspection—the committee.

Subdivision E—Other requests for information etc.

70‑51 Subdivision applies to the Official Trustee

This Subdivision applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

70‑55 Commonwealth may request information etc.

Application of this section

(1) This section applies if either:

(a) a former employee of a regulated debtor has made a claim for financial assistance from the Commonwealth in relation to unpaid employment entitlements; or

(b) the Commonwealth considers that such a claim is likely to be made.

Commonwealth may request information etc.

(2) The Commonwealth may request the trustee of the regulated debtor’s estate to provide specified information, reports or documents in relation to the administration of the regulated debtor’s estate.

(3) The trustee must comply with the request.

(4) The Insolvency Practice Rules may provide for and in relation to who is to bear the cost of providing the information, reports or documents.

70‑56 Right of regulated debtor to request information etc. from trustee

(1) A regulated debtor may request the trustee of the regulated debtor’s estate to:

(a) give information; or

(b) provide a report; or

to the regulated debtor.

(2) The trustee must comply with the request unless:

(a) the information, report or document is not relevant to the administration of the regulated debtor’s estate; or

(b) the trustee would breach his or her duties in relation to the administration of the regulated debtor’s estate if the trustee complied with the request; or

(3) The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for a trustee of a regulated debtor’s estate to comply with a request of a kind mentioned in subsection (1).

Subdivision F—Reporting to the Inspector‑General

70‑60 Insolvency Practice Rules may provide for reporting to Inspector‑General

(1) The Insolvency Practice Rules may provide for and in relation to the obligations of trustees of regulated debtor’s estates:

(a) to give information; and

(b) to provide reports; and

to the Inspector‑General.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) the manner and form in which information is to be given, a report provided or a document produced; and

(b) the timeframes in which information is to be given, a report provided or a document produced; and

(3) The Insolvency Practice Rules may make different provision in relation to different kinds of estate administration.

Note: A failure to give information, provide a report or produce a document to the Inspector‑General in accordance with the Insolvency Practice Rules may lead to disciplinary action under Subdivision B of Division 40 of Part 2 of this Schedule.

Subdivision G—Trustee may be compelled to comply with requests for information etc.

70‑65 Application of this Subdivision

(1) This Subdivision applies if the trustee of a regulated debtor’s estate refuses a request made by a person under:

(a) Subdivision D; or

(b) a rule made under section 70‑50; or

(d) section 80‑40;

to give information, provide a report or produce a document.

(2) In this Subdivision:

(a) the information, report or document is referred to as the relevant material; and

(b) the request is referred to as the request for relevant material; and

(c) giving the information, providing the report or producing the document is referred to as giving the relevant material.

70‑70 Inspector‑General may direct trustee to comply with the request for relevant material

(1) The Inspector‑General may, in writing, direct the trustee to give all or part of the relevant material to the person or persons who made the request for the relevant material within 5 business days after the direction is given.

(2) A direction under subsection (1) is not a legislative instrument.

70‑75 Inspector‑General must notify trustee before giving a direction under section 70‑70

(1) Before giving the trustee a direction under section 70‑70, the Inspector‑General must give the trustee notice in writing:

(a) stating that the Inspector‑General proposes to give the trustee a direction under that section; and

(b) identifying:

(i) the relevant material, or the part of the relevant material, that the Inspector‑General proposes to direct be given; and

(ii) the person or persons to whom the Inspector‑General proposes to direct that the relevant material, or that part of the relevant material, be given; and

(c) inviting the trustee to make a written submission to the Inspector‑General within 10 business days after the notice is given, stating:

(i) whether the trustee has any objection to giving the relevant material, or that part of the relevant material, to a person or persons as proposed; and

(ii) if the trustee has such an objection—the reasons for that objection.

(2) If the trustee objects to giving the relevant material, or part of the relevant material, to a person, the Inspector‑General must take into account the reasons for that objection when deciding whether to direct that the relevant material, or that part of the relevant material, be given to the person.

(3) A notice under subsection (1) is not a legislative instrument.

70‑80 Inspector‑General must not direct trustee to give the relevant material if trustee entitled not to comply with the request

The Inspector‑General must not give a direction under section 70‑70 to give the relevant material, or part of the relevant material, to a person if the Inspector‑General is satisfied that the trustee was entitled, under a provision of this Act or any other law, not to comply with the request for the relevant material, or that part of the relevant material, to the person.

70‑85 Inspector‑General may impose conditions on use of the relevant material

Inspector‑General may, by notice, impose conditions

(1) The Inspector‑General may, by notice in writing to the person or persons to whom the relevant material is to be given, impose conditions on the use and disclosure of the relevant material, or part of the relevant material, by the person or persons.

Offence

(2) A person commits an offence if:

(a) the Inspector‑General directs that the relevant material, or part of the relevant material, be given to the person; and

(b) the Inspector‑General has given the person notice under subsection (1) imposing a condition in relation to the use or disclosure of that material by the person; and

Penalty: 10 penalty units or imprisonment for 3 months, or both.

Notice is not a legislative instrument

(3) A notice under subsection (1) is not a legislative instrument.

70‑90 Court may order relevant material to be given

(1) The person or persons who made the request for the relevant material may apply to the Court for an order that the trustee give the person all or part of the relevant material.

(2) If:

(a) the Inspector‑General gives the trustee a direction under section 70‑70 in relation to all or part of the relevant material; and

(b) the trustee does not comply with the direction;

the Inspector‑General may apply to the Court for an order that the trustee comply with the direction.

(3) On application under subsection (1) or (2), the Court may:

(a) order the trustee to give the person, or any or all of the persons, who made the request for the relevant material all or part of that material; and

(b) make such other orders, including orders as to costs, as it thinks fit.

Division 75—Meetings of creditors

75‑1 Simplified outline of this Division

The trustee of a regulated debtor’s estate may convene creditor meetings at any time and must convene them in particular circumstances, for example when directed to do so by certain creditors or by the Inspector‑General.

Requirements for convening and holding meetings (including notice, agenda, quorum, voting on proposals and costs) are set out in the Insolvency Practice Rules.

There is a mechanism for resolving a matter without holding a meeting.

75‑2 Division applies to the Official Trustee

This Division applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

75‑5 Other obligations to convene meetings not affected

Nothing in this Division limits the operation of any other provision of this Act, or any other law, imposing an obligation to convene a meeting in relation to a regulated debtor, or the administration of a regulated debtor’s estate.

75‑10 Trustee may convene meetings

The trustee of a regulated debtor’s estate may convene a meeting of the creditors at any time.

75‑15 Trustee must convene meeting in certain circumstances

(1) The trustee of a regulated debtor’s estate must convene a meeting of the creditors if:

(a) where there is a committee of inspection—the committee of inspection directs the trustee to do so; or

(b) the creditors direct the trustee to do so by resolution; or

(d) both of the following are satisfied:

(i) less than 25%, but more than 10%, in value of the creditors direct the trustee to do so in writing;

(ii) security for the cost of holding the meeting is given to the trustee before the meeting is convened.

(2) However, the trustee of a regulated debtor’s estate need not comply with the direction if the direction is not reasonable.

(3) The Insolvency Practice Rules may prescribe circumstances in which a direction is, or is not, reasonable.

(4) For the purposes of paragraphs (1)(c) and (d), the value of the creditors is to be worked out by reference to the value of the creditors’ claims against the regulated debtor’s estate that are known at the time the direction is given.

75‑20 Trustee must convene meeting if required by the Inspector‑General

(1) The Inspector‑General may, in writing, direct the trustee of a regulated debtor’s estate to convene a meeting of the creditors.

(2) The Inspector‑General may include in the direction requirements to be complied with by the trustee in notifying the creditors of the meeting and in conducting the meeting.

(3) The trustee must comply with a direction given under subsection (1), and any requirements included in the direction under subsection (2).

(4) A direction given under subsection (1) is not a legislative instrument.

75‑25 Trustee’s representative at meetings

(1) The trustee of a regulated debtor’s estate may, in writing, appoint a person to represent the trustee at a meeting.

(2) Subsection (1) does not apply to a meeting of a kind prescribed.

(3) If the trustee is not personally present at a meeting, then a reference in a provision of this Act to a trustee, in respect of matters occurring at or in connection with the meeting, is a reference to a person appointed to represent the trustee at the meeting.

75‑30 Inspector‑General may attend meetings

(1) The Inspector‑General is entitled to attend any meeting of creditors held under this Act.

(2) Subject to any provision of this Act (including any provision in relation to voting), the Inspector‑General is entitled to participate in any meeting of creditors held under this Act.

75‑35 Commonwealth may attend certain meetings etc.

If:

(a) a former employee of a regulated debtor has made a claim for financial assistance from the Commonwealth in relation to unpaid employment entitlements; or

(b) the Commonwealth considers that such a claim is likely to be made;

the Commonwealth is entitled to nominate a representative to attend any meeting of creditors held in relation to the administration of the regulated debtor’s estate.

75‑40 Proposals to creditors without meeting

Proposal by notice to creditors

(1) The trustee of a regulated debtor’s estate may at any time put a proposal to the creditors by giving notice, in writing, under this section.

Content and service of notice

(2) The notice must:

(a) contain a single proposal; and

(b) include a statement of the reasons for the proposal and the likely impact it will have on creditors (if it is passed); and

(d) invite the creditor to either:

(i) vote Yes or No on the proposal; or

(ii) object to the proposal being resolved without a meeting of creditors; and

(e) specify a reasonable time by which replies must be received by the trustee (in order to be taken into account).

Evidentiary certificate relating to proposals

(3) A certificate signed by the trustee of the regulated debtor’s estate stating any matter relating to a proposal under this section is prima facie evidence of the matter.

Insolvency Practice Rules relating to proposals

(4) The Insolvency Practice Rules may provide for and in relation to proposals without meeting under this section.

(5) Without limiting subsection (4), the Insolvency Practice Rules may provide for and in relation to:

(a) the circumstances in which a proposal is taken to be passed; and

(b) whether a proposal, if passed, is to be taken to have been passed as a resolution or a special resolution; and

75‑50 Rules relating to meetings

(1) The Insolvency Practice Rules may provide for and in relation to meetings of creditors.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) the circumstances in which meetings must or may be convened; and

(b) notice for convening meetings; and

(d) information to be given to creditors; and

(e) who is to preside at meetings; and

(f) the number of creditors required to constitute a quorum; and

(g) proxies and attorneys; and

(h) motions; and

(i) voting (including casting votes); and

(j) the circumstances in which a resolution or a special resolution must or may be put to creditors in a meeting; and

(k) the circumstances in which a resolution or a special resolution put to creditors in a meeting is passed; and

(l) facilities, including electronic communication facilities, to be available at meetings; and

(m) minutes; and

(n) costs in relation to meetings and security for those costs.

Division 80—Committees of inspection

80‑1 Simplified outline of this Division

Creditors of a regulated debtor’s estate may decide that there is to be a committee of inspection to monitor the administration of the estate and to give assistance to the trustee.

Appointing the committee

Each of the following have rights to appoint members to the committee (and to remove those members and fill the vacancy):

(a) the creditors by resolution;

(b) a single creditor who is owed, or a group of creditors who together are owed, a large amount;

Once a person exercises a right in one capacity to appoint a member, the person cannot exercise a right in another capacity to do so. A person can exercise the right in a particular capacity to appoint only one person (unless the person is filling a vacancy in that appointment).

Procedures and powers

This Division also deals with the procedures and powers of committees of inspection (including directing that information, documents and reports be provided by the trustee and obtaining specialist advice).

The trustee of a regulated debtor’s estate must have regard to directions of the committee but is not obliged to comply.

Review

The Court may inquire into and make orders about the conduct of committees of inspection.

80‑2 Division applies to the Official Trustee

This Division applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

80‑5 Application of sections 80‑10 to 80‑25

The rules in sections 80‑10 to 80‑25 apply if the trustee of a regulated debtor’s estate convenes a meeting of creditors for the purpose of determining either or both of the following:

(a) whether there is to be a committee of inspection for the regulated debtor’s estate;

(b) if there is, or is to be, a committee of inspection—who are to be appointed members of the committee.

80‑10 Committee of inspection

The creditors of a regulated debtor’s estate may, by resolution, determine that there is to be a committee of inspection in relation to the administration of the estate.

80‑15 Appointment and removal of members of committee of inspection by creditors generally

(1) The creditors of a regulated debtor’s estate may, by resolution, appoint members of a committee of inspection in relation to the administration of the estate.

(2) The creditors of a regulated debtor’s estate may by resolution:

(a) remove a person appointed as a member of the committee under this section; and

(b) appoint another person to fill a vacancy in the office of a member of the committee appointed under this section.

(3) A person is not entitled to vote on a resolution to appoint or remove a member of a committee of inspection under this section if:

(a) the person, acting either alone or with others, appoints a person as a member of the committee under section 80‑20; or

(b) the person, acting either alone or with others, appoints a person as a member of the committee under section 80‑25.

80‑20 Appointment of committee member by large creditor

(1) A creditor representing at least 10% in value of the creditors, or a group of creditors who together represent at least 10% in value of the creditors, of a regulated debtor’s estate may appoint a person as a member of a committee of inspection in relation to the administration of the estate.

(2) If a creditor or a group of creditors appoints a person as a member of a committee of inspection under this section, the creditor or group of creditors may:

(a) remove the person as a member of the committee; and

(b) appoint another person to fill a vacancy in the office of that member of the committee.

(3) A creditor, acting either alone or with others, is not entitled to appoint a person as a member of a committee of inspection under subsection (1) if:

(a) the creditor votes on a resolution to appoint or remove a member of the committee under section 80‑15; or

(b) the creditor, acting either alone or with others, appoints a member of the committee under subsection 80‑25(1); or

(c) the creditor, acting either alone or with others, has already appointed a member of the committee under subsection (1) of this section.

80‑25 Appointment of committee member by employees

(1) Either:

(a) an employee of the regulated debtor; or

(b) the employees of the regulated debtor;

representing at least 50% in value of amounts owed to or in respect of employees by the regulated debtor, in respect of services rendered to or for the regulated debtor, may appoint a person as a member of a committee of inspection to represent the employees.

(2) If an employee or a group of employees appoints a person under this section, the employee or group of employees may:

(a) remove the person as a member of the committee; and

(b) appoint another person to fill a vacancy in the office of that member of the committee.

(3) An employee, acting either alone or with others, is not entitled to appoint a person as a member of a committee of inspection under subsection (1) if:

(a) the employee votes on a resolution to appoint or remove a member of the committee under section 80‑15; or

(b) the employee, acting either alone or with others, appoints a member of the committee under subsection 80‑20(1); or

(c) the employee, acting either alone or with others, has already appointed a member of the committee under subsection (1) of this section.

80‑30 Committees of inspection—procedures etc.

(1) Subject to subsection (2), a committee of inspection is to determine its own procedures.

(2) The Insolvency Practice Rules may provide for and in relation to committees of inspection.

(3) Without limiting subsection (2), the Insolvency Practice Rules may provide for and in relation to:

(a) eligibility to be appointed as a member of a committee of inspection; and

(b) the convening of, conduct of, and procedure and voting at, meetings; and

(d) vacancies in membership.

80‑35 Functions of committee of inspection

(1) A committee of inspection has the following functions:

(a) to advise and assist the trustee of the regulated debtor’s estate;

(b) to give directions to the trustee of the regulated debtor’s estate;

(d) such other functions as are conferred on the committee by this Act;

(e) to do anything incidental or conducive to the performance of any of the above functions.

(2) The trustee of a regulated debtor’s estate must have regard to any directions given to the trustee by the committee of inspection, but the trustee is not required to comply with such directions.

(3) If the trustee of a regulated debtor’s estate does not comply with a direction, the trustee must make a written record of that fact, along with the trustee’s reasons for not complying with the direction.

80‑40 Committee of inspection may request information etc.

(1) A committee of inspection may request the trustee of a regulated debtor’s estate to:

(a) give information; or

(b) provide a report; or

to the committee.

(2) The trustee must comply with the request unless:

(a) the information, report or document is not relevant to the administration of the regulated debtor’s estate; or

(b) the trustee would breach his or her duties in relation to the administration of the regulated debtor’s estate if the trustee complied with the request; or

(3) The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for a trustee to comply with a request of a kind mentioned in subsection (1).

80‑45 Reporting to committee of inspection

(1) The Insolvency Practice Rules may provide for and in relation to the obligations of trustees of regulated debtors’ estates:

(a) to give information; and

(b) to provide reports; and

to committees of inspection.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) other circumstances in which the trustee must give information, provide a report or produce a document to a committee of inspection; and

(b) the manner and form in which information is to be given, a report provided or a document produced; and

(d) who is to bear the cost of giving information, providing a report or producing a document.

(3) The Insolvency Practice Rules may:

(a) make different provision in relation to different classes of regulated debtor, or regulated debtor’s estates; and

(b) provide that specified requirements imposed under the Insolvency Practice Rules may be replaced or modified, by resolution, by:

(i) the creditors; or

(ii) the committee of inspection.

80‑50 Committee of inspection may obtain specialist advice or assistance

(1) A committee of inspection may resolve that a member of the committee obtain, on behalf of the committee, such advice or assistance as the committee considers desirable in relation to the conduct of the administration of the regulated debtor’s estate.

(2) The committee of inspection must obtain the approval of the trustee of the regulated debtor’s estate or the Court before expenses are incurred in obtaining the advice or assistance.

(3) To avoid doubt, an expense incurred under subsection (2) is to be taken to be an expense of the administration of the estate, unless the Court orders otherwise.

80‑55 Obligations of members of committee of inspection

Deriving profit or advantage from the estate

(1) A member of a committee of inspection must not directly or indirectly derive any profit or advantage from the administration of the regulated debtor’s estate.

Circumstances in which profit or advantage is taken to be derived

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

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

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

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

Exceptions

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

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

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

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

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

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

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

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

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

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

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

Offence

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

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

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

Penalty: 50 penalty units.

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

Effect of contravention of this section

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

80‑60 Obligations of creditor appointing a member of committee of inspection

Application of this section

(1) This section applies if a creditor representing at least 10% in value of the creditors of a regulated debtor’s estate appoints a person under section 80‑20 as a member of a committee of inspection in relation to the administration of the estate.

(2) The creditor must not directly or indirectly become the purchaser of any part of the regulated debtor’s estate.

Exceptions

(3) Subsection (2) does not apply if the creditors resolve otherwise.

(4) The creditor is not entitled to vote on the resolution referred to in subsection (3).

(5) Subsection (2) does not apply to the extent that:

(a) another provision of this Act, or of another law, requires or permits the creditor to purchase the property; or

(b) the Court gives leave to the creditor to purchase the property.

Offence

(6) A person commits an offence of strict liability if:

(a) the person is subject to a requirement under subsection (2); and

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

Penalty: 50 penalty units.

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

Effect of contravention of this section

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

80‑65 The Inspector‑General may attend committee meetings

The Inspector‑General is entitled to attend any meeting of a committee of inspection.

80‑70 The Court may inquire into conduct of the committee

The Court may inquire into the conduct of a committee of inspection and make such orders as it thinks fit to ensure the proper conduct of the committee.

Division 85—Directions by creditors

85‑1 Simplified outline of this Division

The trustee of a regulated debtor’s estate must have regard to directions given to the trustee by the creditors of the estate but is not obliged to comply with those directions.

85‑2 Division applies to the Official Trustee

This Division applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

85‑5 Trustee to have regard to directions given by creditors

(1) The creditors may, by resolution, give directions to the trustee of a regulated debtor’s estate in relation to the administration of the estate.

(2) The trustee must have regard to any directions mentioned in subsection (1), but the trustee is not required to comply with such directions.

(3) If the trustee does not comply with a direction, the trustee must make a written record of that fact, along with the trustee’s reasons for not complying with the direction.

(4) If there is a conflict between directions given by the creditors under subsection (1) and by the committee of inspection under section 80‑35, directions given by the creditors override any directions given by the committee.

Division 90—Review of the administration of a regulated debtor’s estate

Subdivision A—Introduction

90‑1 Simplified outline of this Division

Review by the Court

The Court may inquire into the administration of a regulated debtor’s estate either on its own initiative or on the application of the Inspector‑General or a person with a financial interest in the administration of the regulated debtor’s estate.

The Court has wide powers to make orders, including orders replacing the trustee or dealing with losses resulting from a breach of duty by the trustee.

Review by the Inspector‑General

The Inspector‑General may review a decision of the trustee of a regulated debtor’s estate to withdraw funds from the estate for payment for the trustee’s remuneration.

The Insolvency Practice Rules may set the powers and duties of the Inspector‑General in conducting such a review and may deal with issues relating to the review process.

Removal of trustee by creditors

The creditors of a regulated debtor’s estate may remove the trustee of the estate and appoint another. However, the trustee may apply to the Court to be reappointed.

Subdivision B—Court powers to inquire and make orders

90‑2 Subdivision applies to the Official Trustee

This Subdivision applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

90‑5 Court may inquire on own initiative

(1) The Court may, on its own initiative during proceedings before the Court, inquire into the administration of a regulated debtor’s estate.

(2) The Court may, for the purposes of such an inquiry, require a person who is or has at any time been the trustee of the regulated debtor’s estate to:

(a) give information; or

(b) provide a report; or

to the Court in relation to the administration of the estate.

(3) This section does not limit the Court’s powers under any other provision of this Act, or under any other law.

90‑10 Court may inquire on application of creditors etc.

(1) The Court may, on the application of a person mentioned in subsection (2), inquire into the administration of a regulated debtor’s estate.

(2) Each of the following persons may make an application for an inquiry:

(a) a person with a financial interest in the administration of the regulated debtor’s estate;

(b) if the committee of inspection (if any) so resolves—a creditor, on behalf of the committee;

(3) The Court may, for the purposes of such an inquiry, require a person who is or has at any time been the trustee of the regulated debtor’s estate to:

(a) give information; or

(b) provide a report; or

to the Court in relation to the administration of the estate.

(4) If an application is made by a person referred to in paragraph (2)(b), the reasonable expenses associated with the application are to be taken to be expenses of the administration of the estate unless otherwise ordered by the Court.

(5) This section does not limit the Court’s powers under any other provision of this Act, or under any other law.

90‑15 Court may make orders in relation to estate administration

Court may make orders

(1) The Court may make such orders as it thinks fit in relation to the administration of a regulated debtor’s estate.

Orders on own initiative or on application

(2) The Court may exercise the power under subsection (1):

(a) on its own initiative, during proceedings before the Court; or

(b) on application under section 90‑20.

Examples of orders that may be made

(3) Without limiting subsection (1), those orders may include any one or more of the following:

(a) an order determining any question arising in the administration of the estate;

(b) an order that a person cease to be the trustee of the estate;

(d) an order in relation to the costs of an action (including court action) taken by the trustee of the estate or another person in relation to the administration of the estate;

(e) an order in relation to any loss that the estate has sustained because of a breach of duty by the trustee;

(f) an order in relation to remuneration, including an order requiring a person to repay to the estate of a regulated debtor, or the creditors of a regulated debtor, remuneration paid to the person as trustee.

Matters that may be taken into account

(4) Without limiting the matters which the Court may take into account when making orders, the Court may take into account:

(a) whether the trustee has faithfully performed, or is faithfully performing, the trustee’s duties; and

(b) whether an action or failure to act by the trustee is in compliance with this Act and the Insolvency Practice Rules; and

(d) whether the regulated debtor’s estate or any person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the trustee; and

(e) the seriousness of the consequences of any action or failure to act by the trustee, including the effect of that action or failure to act on public confidence in registered trustees as a group.

Costs orders

(5) Without limiting subsection (1), an order mentioned in paragraph (3)(d) in relation to the costs of an action may include an order that:

(a) the trustee or another person is personally liable for some or all of those costs; and

(b) the trustee or another person is not entitled to be reimbursed by the regulated debtor’s estate or creditors in relation to some or all of those costs.

Orders to make good loss sustained because of a breach of duty

(6) Without limiting subsection (1), an order mentioned in paragraph (3)(e) in relation to a loss may include an order that:

(a) the trustee is personally liable to make good some or all of the loss; and

(b) the trustee is not entitled to be reimbursed by the regulated debtor’s estate or creditors in relation to the amount made good.

Section does not limit Court’s powers

(7) This section does not limit the Court’s powers under any other provision of this Act, or under any other law.

90‑20 Application for Court order

(1) Each of the following persons may apply for an order under section 90‑15:

(a) a person with a financial interest in the administration of the regulated debtor’s estate;

(b) if the committee of inspection (if any) so resolves—a creditor, on behalf of the committee;

(2) If an application is made by a person referred to in paragraph (1)(b), the reasonable expenses associated with the application are to be taken to be expenses of the administration of the estate.

Subdivision C—Review by Inspector‑General

90‑21 Review by Inspector‑General

(1) The Inspector‑General may carry out a review of the remuneration received by the trustee of a regulated debtor’s estate for services performed by the trustee in relation to the administration of the estate.

(2) The Inspector‑General may carry out a review under this Subdivision:

(a) on his or her own initiative; or

(b) on application by the regulated debtor or a creditor.

(3) The trustee, the regulated debtor or a creditor of the regulated debtor may apply to the Court for an order in relation to a decision of the Inspector‑General in relation to the review.

(4) In making an order under subsection (3), the Court must have regard to whether the remuneration received by the trustee is reasonable, taking into account any or all of the following matters:

(a) the extent to which the work by the trustee was necessary and properly performed;

(b) the extent to which the work likely to be performed by the trustee is likely to be necessary and properly performed;

(d) the quality of the work performed, or likely to be performed, by the trustee;

(e) the complexity (or otherwise) of the work performed, or likely to be performed, by the trustee;

(f) the extent (if any) to which the trustee was, or is likely to be, required to deal with extraordinary issues;

(g) the extent (if any) to which the trustee was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;

(h) the value and nature of any property dealt with, or likely to be dealt with, by the trustee;

(i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors;

(j) if the remuneration is worked out wholly or partly on a time‑cost basis—the time properly taken, or likely to be properly taken, by the trustee in performing the work;

(k) any other relevant matters.

90‑22 Rules about reviews

(1) The Insolvency Practice Rules may provide for and in relation to reviews under this Subdivision.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to any or all of the following matters:

(a) the giving of notice to the trustee before beginning a review, or making an application for a review, under this Subdivision;

(b) the powers and duties of the Inspector‑General in carrying out a review;

(d) the repayment of remuneration by the trustee as a consequence of a review under this Subdivision.

Subdivision D—Removal by creditors

90‑30 Subdivision applies to the Official Trustee

This Subdivision applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

90‑35 Removal by creditors

Creditors may remove trustee and appoint another

(1) The creditors may:

(a) by resolution at a meeting, remove the trustee of a regulated debtor’s estate; and

(b) by resolution at the same or a subsequent meeting, appoint another person as trustee of the regulated debtor’s estate.

Note: For the general rules relating to meetings, see Division 75.

(2) However, the creditors may not do so unless at least 5 business days’ notice of the meeting is given to all persons who are entitled to receive notice of creditors’ meetings.

Former trustee may apply to Court to be reappointed

(3) A person (the former trustee) who has been removed as trustee of the regulated debtor’s estate by resolution of the creditors may apply to the Court to be reappointed as trustee of the regulated debtor’s estate.

(4) If the former trustee makes such an application, the former trustee must:

(a) record all costs incurred by the former trustee and the debtor’s estate in relation to the application; and

(b) do so in a way that separates those costs from the costs incurred by the former trustee and the regulated debtor’s estate in relation to other matters.

(5) The Court may order that the former trustee be reappointed as trustee of the regulated debtor’s estate if the Court is satisfied that the removal of the former trustee was an improper use of the powers of one or more creditors.

(6) The Court may make such other orders in relation to the application as it thinks fit, including orders in relation to:

(a) the costs of the application; and

(b) the remuneration of the former trustee.

Part 4—Other matters

Division 95—Introduction

95‑1 Simplified outline of this Part

This Part deals with a variety of matters:

(a) the trustee of a regulated debtor’s estate may assign a right to sue; and

(b) the Minister has power to make rules to be called the Insolvency Practice Rules.

Division 96—Administrative review

96‑1 Review by the Administrative Appeals Tribunal

Applications may be made to the Administrative Appeals Tribunal for review of any of the following decisions:

(a) a decision of a committee under section 20‑20 in relation to an application for registration as a trustee;

(b) a decision of a committee under section 20‑55 in relation to an application for the variation or removal of a condition of registration;

(c) a decision of the Inspector‑General to give a direction to a registered trustee under section 40‑15 not to accept further appointments;

(d) a decision of the Inspector‑General to suspend the registration of a person as a trustee under section 40‑25;

(e) a decision of the Inspector‑General to cancel the registration of a person as a trustee under section 40‑30;

(f) a decision of a committee under section 40‑55 (disciplinary action by committee);

(g) a decision of a committee under section 40‑85 in relation to an application to lift or shorten the suspension of a person’s registration as a trustee.

Division 100—Other matters

100‑1 Division applies to the Official Trustee

This Division applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate.

100‑5 Trustee may assign right to sue under this Act

(1) Subject to subsections (2) and (3), the trustee of a regulated debtor’s estate may assign any right to sue that is conferred on the trustee by this Act.

(2) If the trustee’s action has already begun, the trustee cannot assign the right to sue unless the trustee has the approval of the Court.

(3) Before assigning any right under subsection (1), the trustee must give written notice to the creditors of the proposed assignment.

(4) If a right is assigned under this section, a reference in this Act to the trustee in relation to the action is taken to be a reference to the person to whom the right has been assigned.

Division 105—The Insolvency Practice Rules

105‑1 The Insolvency Practice Rules

(1) The Minister may, by legislative instrument, make rules providing for matters:

(a) required or permitted by this Act to be provided by the rules; or

(b) necessary or convenient to be provided in order to carry out or give effect to this Act.

(2) Rules made under subsection (1) may include offences.

(3) The penalties for offences described in subsection (2) must not be more than 50 penalty units for an individual or 250 penalty units for a body corporate.

(4) To avoid doubt, the rules may not do the following:

(a) create a civil penalty;

(b) provide powers of:

(i) arrest or detention; or

(ii) entry, search or seizure;

(d) set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act;

(e) directly amend the text of this Act.

(5) Rules that are inconsistent with the regulations have no effect to the extent of the inconsistency, but rules are taken to be consistent with the regulations to the extent that the rules are capable of operating concurrently with the regulations.

(6) Despite subsection 10(1), the Minister’s power to make rules under this section may not be delegated to any other person.

(7) In this section:

this Act does not include the regulations or rules made under this section.

Part 2—Amendments consequential on the introduction of the Insolvency Practice Schedule (Bankruptcy)

Bankruptcy Act 1966

3 Subsection 5(1) (definition of approved form)

Repeal the definition, substitute:

approved form: a document is in the approved form if it is in accordance with section 6D.

4 Subsection 5(1)

Insert:

bank means an ADI or any other bank.

5 Subsection 5(1)

Insert:

business day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.

6 Subsection 5(1)

Insert:

Insolvency Practice Rules means the rules made by the Minister under section 105‑1 of Schedule 2.

7 Subsection 5(1) (definition of registered trustee)

Repeal the definition, substitute:

registered trustee has the same meaning as in section 5‑5 of Schedule 2.

8 Subsection 5(1)

Insert:

9 Subsection 5(1) (definition of resolution)

Repeal the definition, substitute:

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.

10 Subsection 5(1) (definition of special resolution)

Repeal the definition, substitute:

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.

11 Subsection 5(1) (at the end of the definition of this Act)

Add “and the Insolvency Practice Rules”.

12 At the end of Part IA

Add:

6D Approved forms

(1) 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

(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.

(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).

(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.

13 Subsection 12(4)

Repeal the subsection, substitute:

(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.

14 Paragraph 19(1)(d)

Repeal the paragraph.

15 At the end of subsection 19(1)

Add:

; (l) the duties imposed on the trustee under Schedule 2.

16 At the end of Division 1 of Part II

Add:

19B Trustee to give Official Receiver information etc.

(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.

(2) This section does not apply to the Official Trustee.

17 Paragraph 40(1)(f)

Omit “resolution of a majority of the creditors present at the meeting either in person or by attorney”, substitute “resolution of the creditors”.

18 Paragraph 43(2)(b)

Omit “74(5)”, substitute “74(1)”.

19 Subsection 54(1) (penalty)

Omit “25 penalty units”, substitute “50 penalty units”.

20 Subsection 54(2) (penalty)

Omit “5 penalty units”, substitute “50 penalty units”.

21 Paragraphs 55(8)(b) and 56E(3)(b)

Omit “74(5)”, substitute “74(1)”.

22 Subsection 56F(1) (penalty)

Omit “25 penalty units”, substitute “50 penalty units”.

23 Paragraph 57(10)(b)

Omit “74(5)”, substitute “74(1)”.

24 Divisions 5 and 5A of Part IV

Repeal the Divisions.

25 Subsection 73(1A)

Omit “working days”, substitute “business days”.

26 Subsection 73(1B)

Repeal the subsection.

27 Subsections 73(2) to (5)

Repeal the subsections.

28 Section 73A

Repeal the section.

29 Subsection 73B(4)

Repeal the subsection.

30 Section 73C

Repeal the section.

31 Subsection 74(5)

Repeal the subsection, substitute:

(1) 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.

32 Subsection 74A(4)

Omit “would be entitled under section 64A (as that section applies in accordance with section 76A)”, substitute “are entitled”.

33 Section 76 (heading)

Repeal the heading, substitute:

76 Application of Part VIII and Schedule 2 to trustee of a composition or arrangement

34 Subsection 76(1)

Omit “Part VIII applies”, substitute “Part VIII and Schedule 2 apply”.

35 Subsection 76(2)

After “Part VIII”, insert “or Schedule 2”.

36 Section 76A

Repeal the section.

37 Paragraph 109(1)(a)

Omit “section 175”, substitute “section 70‑15 or 70‑20 of Schedule 2”.

38 Subsections 109(7) to (7B)

Repeal the subsections.

39 Subsection 125(3) (definition of bank)

Repeal the definition.

40 Subsection 134(4)

Repeal the subsection (including the note).

41 Section 139ZIB (definition of working day)

Repeal the definition.

42 Subparagraph 139ZIE(1)(a)(i)

Omit “working days”, substitute “business days”.

43 Subsection 139ZIE(5)

Omit “working days”, substitute “business days”.

44 Paragraph 139ZIF(1)(a)

Omit “working days”, substitute “business days”.

45 Subsection 139ZIO(2)

Omit “The”, substitute “Subject to subsection (2A), the”.

46 After subsection 139ZIO(2)

Insert:

Interaction with Insolvency Practice Rules

(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.

(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:

(d) ending when the Court ceases to exercise those powers.

47 Sections 154A to 155K

Repeal the sections.

48 Subsections 156A(4) to (7)

Repeal the subsections.

49 Subsections 157(6) to (9)

Repeal the subsections.

50 Section 161A

Repeal the section.

51 Division 2 of Part VIII (heading)

Repeal the heading, substitute:

Division 2—Remuneration and costs of the Official Trustee and Official Receiver

52 Sections 161B and 162

Repeal the sections.

53 Sections 164 to 167

Repeal the sections.

54 Divisions 3 and 4 of Part VIII

Repeal the Divisions.

55 Section 181

Repeal the section.

56 Subsection 181A(2)

Omit “would be entitled under section 64A”, substitute “are entitled”.

57 Section 182

Repeal the section.

58 Section 185 (definition of bank)

Repeal the definition.

59 Section 185

Insert:

Chapter 5 body corporate has the same meaning as in the Corporations Act 2001.

60 Section 185 (definition of externally‑administered body corporate)

Repeal the definition.

61 Section 185 (definition of working day)

Repeal the definition.

62 Subsections 185LB(1), 185LC(1) and 185N(5)

Omit “working days”, substitute “business days”.

63 Paragraph 186A(1)(d)

Omit “subsection 1292(2) or (3) of the Corporations Act 2001”, substitute “the Corporations Act 2001 (other than in response to a written request by the individual to have the registration cancelled)”.

64 Paragraph 186A(1)(e)

Omit “ceased under section 155I for a reason specified in paragraph 155H(1)(a), (aa), (b), (e), (f), (fa) or (g)”, substitute “was cancelled (other than in response to a written request by the individual to have the registration cancelled)”.

65 Paragraph 186A(3)(a)

Omit “an externally‑administered body corporate”, substitute “a Chapter 5 body corporate”.

66 Subparagraph 186LA(1)(b)(ii)

Omit “155H(1)”, substitute “40‑40(1) of Schedule 2”.

67 Paragraph 186LA(1)(c)

Omit “155H(1)(fa)”, substitute “40‑40(1)(m) of Schedule 2”.

68 Subparagraph 186LB(1)(b)(ii)

Omit “155H(1)”, substitute “40‑40(1) of Schedule 2”.

69 Paragraph 186LB(1)(c)

Omit “155H(1)(fa)”, substitute “40‑40(1)(m) of Schedule 2”.

70 Subsection 188(5)

Omit “working days”, substitute “business days”.

71 Subsection 188(5A)

Repeal the subsection.

72 Subsections 190(4A) and (4B)

Repeal the subsections.

73 Subsection 190A(1)

Omit “(1)”.

74 Paragraph 190A(1)(b)

Repeal the paragraph.

75 At the end of subsection 190A(1)

Add:

; (j) the duties imposed on the controlling trustee under Schedule 2.

76 Sections 194 to 196

Repeal the sections.

77 Subsection 217(1)

Omit “, in accordance with the regulations,”.

78 At the end of subsection 220(1)

Add “The meeting may be called by any creditor or the debtor.”.

79 Subsection 221A(3)

Omit “would be entitled under section 64A (as that section applies in accordance with section 223A)”, substitute “are entitled”.

80 Paragraph 222(5)(f)

Omit “subsection 194A(3)”, substitute “Division 75 of Schedule 2 (including rules made under that Division)”.

81 Paragraph 222(5)(h)

Omit “subsection 194A(5)”, substitute “Division 75 of Schedule 2 (including rules made under that Division)”.

82 Subsection 222A(2)

Omit “would be entitled under section 64A (as that section applies in accordance with section 223A)”, substitute “are entitled”.

83 Sections 223 and 223A

Repeal the sections.

84 Subsection 224A(5)

Omit “working days”, substitute “business days”.

85 Subsection 224A(6)

Repeal the subsection.

86 Subsection 231(3)

Omit “70, 71, 72,”.

87 Subsection 248(1)

Omit “Division 5 of Part IV, sections 70 to 76”, substitute “sections 73 to 76”.

88 Subsection 263C(2) (definition of voting document)

Repeal the definition, substitute:

voting document means:

(a) a statement:

(i) relating to the amount in respect of which the creditor claims that the bankrupt is indebted to the creditor, the value of the consideration that the creditor gave for any assignment of a debt the bankrupt owes to the creditor, or whether the creditor holds a security interest in respect of the debt; and

(ii) that is given to the trustee at or before a meeting called for the purposes of Part IV, X or XI or Schedule 2; or

(b) a form:

(i) relating to the appointment of a person to represent the creditor at a meeting as the creditor’s proxy; and

(ii) that is given to the trustee at or before a meeting called for the purposes of Part IV, X or XI or Schedule 2.

89 Subsection 277B(2) (table items 6 to 11)

Repeal the items.

90 Subsection 277B(2) (at the end of the table)

Add:

29	subsection 30‑1(5) of Schedule 2	1 penalty unit
30	subsection 35‑5(2) of Schedule 2	1 penalty unit
31	subsection 65‑40(3) of Schedule 2	1 penalty unit
32	subsection 70‑10(4) of Schedule 2	1 penalty unit
33	subsection 70‑11(2) of Schedule 2	1 penalty unit
34	subsection 70‑25(4) of Schedule 2	1 penalty unit

91 Subsection 280(5) (definition of trustee account)

Repeal the definition, substitute:

trustee account means an account referred to in section 65‑5 of Schedule 2.

92 Subsection 306B(1)

Omit “155A(6), 155F(2) or 155I(4) or section 189A”, substitute “section 189A or section 20‑25, 20‑60, 40‑60 or 70‑40 of Schedule 2”.

93 Section 312

Repeal the section.

94 Paragraph 315(2)(i)

Repeal the paragraph.

95 Subparagraphs 315(2)(j)(ii) and (iii)

After “Index”, insert “or the Register of Trustees”.

96 Paragraph 315(2)(k)

Omit “10 penalty units”, substitute “50 penalty units”.

97 Paragraph 316(1)(a)

Omit “paragraphs 154A(3)(b), 155C(1)(b) and 155D(1)(b) and”.

98 Paragraph 316(1)(a)

Omit “(4) and 246(5)”, substitute “(4), 246(5), and subsection 20‑5(3), paragraph 20‑30(1)(c) and subsection 20‑70(3) of Schedule 2”.

Bankruptcy (Estate Charges) Act 1997

99 Subsection 5(1)

Omit “169(1B) or 185LD(3) of”, substitute “185LD(3) of, or subsection 65‑31(1) of Schedule 2 to,”.

100 Subsection 5(2)

Repeal the subsection.

Part 3—Transition to the Insolvency Practice Schedule (Bankruptcy)

Division 1—Introduction

101 Simplified outline of this Part

This Part deals with the way the Bankruptcy Act 1966 will apply when the provisions of this Act begin to operate.

Application of Part 2 of the Insolvency Practice Schedule (Bankruptcy)

A person registered as a trustee before the commencement of this Act will continue to be registered and must comply with the requirements and duties under Part 2 of the Insolvency Practice Schedule (Bankruptcy).

Application of Part 3 of the Insolvency Practice Schedule (Bankruptcy)

Part 3 of the Insolvency Practice Schedule (Bankruptcy) will apply to an administration of an estate that starts on or after the commencement of this Act and to most ongoing administrations (but generally only in relation to new events).

Proceedings before the Court or the Administrative Appeals Tribunal

Proceedings already begun in the Court or the Administrative Appeals Tribunal before the commencement of the amendments made by this Act will continue under the old Act. Orders of the Court under the old Act continue to have effect.

Regulations

Regulations may be made to deal with other transitional matters.

102 Definitions

In this Part:

commencement day means the day on which this Schedule commences.

Insolvency Practice Schedule (Bankruptcy) means Schedule 2 to the Bankruptcy Act 1966 as added by this Act, and includes rules made under section 105‑1 of that Schedule.

make, in relation to an order that is a direction, includes give.

new administration of a regulated debtor’s estate means an administration of a regulated debtor’s estate that starts on or after the commencement day.

old Act means the Bankruptcy Act 1966, as in force immediately before the commencement day and includes the old regulations.

old Act registrant has the meaning given by subitem 105(3).

old Act registration day, in relation to a person, has the meaning given by subitem 107(2).

old regulations means the Bankruptcy Regulations 1996, as in force immediately before the commencement day.

ongoing administration of a regulated debtor’s estate means an administration of a regulated debtor’s estate that started before the commencement day and ends after that day.

order includes a direction.

registered: a person is registered as a trustee at a particular time in the circumstances set out in subitem 103(2).

Register of Trustees means the Register of Trustees established and maintained under section 15‑1 of the Insolvency Practice Schedule (Bankruptcy).

Division 2—Application of Part 2 of the Insolvency Practice Schedule (Bankruptcy) and related consequential amendments

Subdivision A—Registering trustees

103 Applications for registration under the old Act

(1) If, before the commencement day:

(a) a person has applied for registration as a trustee under section 154A of the old Act; and

(b) the person’s application has not been refused; and

the application is taken never to have been made and the Inspector‑General must, on behalf of the Commonwealth, refund to the person an amount equal to the fee paid in relation to the application.

(2) A person is registered as a trustee at a particular time if the person is registered as a trustee under the National Personal Insolvency Index at that time.

104 Applications for extension of registration under the old Act

(1) This item applies if, before the commencement day:

(a) a person has applied for his or her registration as a trustee to be extended under section 155D of the old Act; and

(b) the person’s application has not been refused; and

(2) Section 155D of the old Act continues to apply in relation to the application as if that section had not been repealed by this Schedule.

(3) However, instead of extending the person’s registration under the old Act, the Inspector‑General must renew the registration of the person as a trustee under the Insolvency Practice Schedule (Bankruptcy).

105 Persons registered under the old Act continue to be registered under the Insolvency Practice Schedule (Bankruptcy)

Person registered under the old Act immediately before the commencement day

(1) If a person is registered as a trustee immediately before the commencement day, on the commencement day the person is taken to be registered as a trustee under Subdivision B of Division 20 of the Insolvency Practice Schedule (Bankruptcy).

(2) Despite subitem (1), a person mentioned in that subitem is not taken to be registered as a trustee under Subdivision B of Division 20 of the Insolvency Practice Schedule (Bankruptcy) on the commencement day if, at the beginning of that day:

(a) the person is an insolvent under administration; or

(b) the person is dead.

Meaning of old Act registrant

(3) A person who is taken to be registered under Subdivision B of Division 20 of the Insolvency Practice Schedule (Bankruptcy) because of this item is referred to as an old Act registrant.

106 Old Act registrant’s details

(1) The Inspector‑General must enter on the Register of Trustees, in relation to each old Act registrant, the details prescribed under subsection 15‑1(3) of the Insolvency Practice Schedule (Bankruptcy) that relate to that old Act registrant.

(2) If the Inspector‑General holds information in relation to an old Act registrant before the commencement day, the Inspector‑General may use and disclose the information for the purposes of establishing and maintaining the Register of Trustees.

107 Period of old Act registrant’s registration under the Insolvency Practice Schedule (Bankruptcy)

(1) The registration of an old Act registrant under the Insolvency Practice Schedule (Bankruptcy) is for a period ending 3 years after the old Act registration day for that person.

(2) The old Act registration day in relation to a person who was registered as a trustee immediately before the commencement day is the day on which:

(a) that registration began; or

(b) the most recent extension of that registration began;

whichever is the later.

(3) To avoid doubt, the registration of an old Act registrant under the Insolvency Practice Schedule (Bankruptcy) may be renewed in accordance with that Schedule.

108 Conditions for old Act registrants—conditions under the Insolvency Practice Schedule (Bankruptcy)

To avoid doubt, a condition may be imposed on an old Act registrant (or on a class that includes an old Act registrant) under the Insolvency Practice Schedule (Bankruptcy) in accordance with that Schedule.

109 Current conditions for old Act registrants—conditions under the old Act

Conditions under the old Act

(1) If:

(a) a condition applies to an old Act registrant’s practice as a registered trustee under section 155E, 155F or 155I of the old Act; and

(b) that condition is still in force immediately before the commencement day;

that condition (including any modifications under section 155F or 155I of the old Act) is a current condition imposed on the old Act registrant.

Varying etc. conditions of registration

(2) Subdivision C of Division 20 of the Insolvency Practice Schedule (Bankruptcy) applies to a condition imposed under subitem (1) in the same way as it applies to a condition imposed by a committee under that Schedule.

110 Applications for change of conditions under the old Act

If:

(a) a condition applies to an old Act registrant’s practice as a registered trustee under section 155A, 155F or 155I of the old Act; and

(b) the old Act registrant has applied for the condition to be changed or removed under section 155E of the old Act before the commencement day; and

the application is taken never to have been made and the Inspector‑General must, on behalf of the Commonwealth, refund to the person an amount equal to the fee paid in relation to the application.

Note: The trustee could then apply under section 20‑40 of the Insolvency Practice Schedule (Bankruptcy) for the condition to be varied or removed.

111 Decisions about change of conditions under the old Act before the commencement day

(1) This item applies if:

(a) an old Act registrant has applied for a condition to be changed or removed under section 155E of the old Act before the commencement day; and

(b) before the commencement day, a committee has made a decision on the application under section 155F.

(2) The old Act continues to apply in relation to the decision.

(3) The same matter may not be dealt with under Division 20 of the Insolvency Practice Schedule (Bankruptcy).

112 Old Act registrant chooses not to renew

Application of this item

(1) This item applies if an old Act registrant does not apply for renewal of his or her registration under the Insolvency Practice Schedule (Bankruptcy) before his or her period of registration under subitem 107(1) ends (the expiry day).

Old Act registrant may not accept further appointments after registration expires

(2) The old Act registrant is taken to be registered as a trustee under Subdivision B of Division 20 of the Insolvency Practice Schedule (Bankruptcy) after the expiry day, subject to a condition that he or she must not accept any further appointments as trustee of an estate.

(3) That condition is a current condition imposed on the old Act registrant.

Registration cancelled once current administrations completed

(4) On the day immediately after the end of the administration of all estates for which the old Act registrant is appointed as trustee:

(a) the old Act registrant is taken to have lodged a request in the approved form in accordance with paragraph 40‑30(1)(g) of the Insolvency Practice Schedule (Bankruptcy) to have his or her registration as a trustee cancelled; and

(b) the Inspector‑General is taken to have cancelled the registration under subsection 40‑30(1) of the Insolvency Practice Schedule (Bankruptcy).

Subdivision B—Annual returns and statements

113 Application of obligation to lodge annual trustee returns

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Section 30‑1 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to trustee return years that begin on or after the commencement day.

Meaning of trustee return year

(2) In working out the trustee return year for an old Act registrant under subsection 30‑1(2) of the Insolvency Practice Schedule (Bankruptcy), “the day on which that registration first began”, means “the old Act registration day for that person (as defined for the purpose of Part 3 of Schedule 1 to the Insolvency Law Reform Act 2016)”.

Subdivision C—Notice requirements

114 Notice of significant events

(1) If:

(a) within 2 years before the commencement day, an event of a kind mentioned in subsection 35‑1(1) of the Insolvency Practice Schedule (Bankruptcy) occurs in relation to an old Act registrant; and

(b) the old Act registrant has not already informed the Inspector‑General of the event before the commencement day;

the old Act registrant must lodge with the Inspector‑General a notice, in the approved form, relating to the event.

(2) The notice must be lodged:

(a) if the old Act registrant is or could reasonably be expected to be aware of the event on or before the commencement day—within one month after the commencement day; or

(b) if paragraph (a) is not satisfied, but the old Act registrant is or could reasonably be expected to be aware of the event after the commencement day—within one month after the first day on which the old Act registrant is or could reasonably be expected to be aware of the event.

(3) A person commits an offence if:

(a) the person is subject to a requirement under subitem (1) within the period specified in subitem (2); and

(b) the person intentionally or recklessly fails to comply with the requirement within that period.

Penalty: 100 penalty units.

Subdivision D—Cancellation by the Inspector‑General under the old Act

115 Request for cancellation made before the commencement day

(1) This item applies if:

(a) before the commencement day, a person gives the Inspector‑General under section 155G of the old Act a written request that the person cease to be registered as a trustee; and

(b) no decision by the Inspector‑General to accept the request has come into effect before the commencement day.

(2) The Inspector‑General may not accept the request under section 155G of the old Act.

(3) However, for the purposes of paragraph 40‑30(1)(g) of the Insolvency Practice Schedule (Bankruptcy), the person is taken to have lodged a request with the Inspector‑General in the approved form to have the person’s registration as a trustee under that Schedule cancelled.

(4) The repeal of section 155G of the old Act by this Schedule applies in relation to requests made to the Inspector‑General under section 155G on or after the commencement day.

Subdivision E—Disciplinary proceedings before a committee

116 Request for explanation made before the commencement day

(1) If, before the commencement day:

(a) the Inspector‑General believes a matter mentioned in paragraphs 155H(1)(a) to (g) of the old Act in relation to an old Act registrant; and

(b) the Inspector‑General asks the old Act registrant under section 155H of the old Act to give a written explanation why the old Act registrant should continue to be registered; and

(c) the Inspector‑General has not received an explanation within a reasonable time or is not satisfied by the explanation; and

(d) the Inspector‑General has not convened a committee under subsection 155H(2) to consider if the old Act registrant should continue to be registered;

the request mentioned in paragraph (b) is taken never to have been made.

(2) The fact that the request is taken never to have been made does not preclude the Inspector‑General from giving a notice to the old Act registrant under section 40‑40 of the Insolvency Practice Schedule (Bankruptcy) (show‑cause notice) in relation to the same matter, or any aspect of the same matter.

Note: In relation to the application of section 40‑40 of the Insolvency Practice Schedule (Bankruptcy), see item 122.

(3) This item does not apply for the purposes of sections 186LA and 186LB.

117 Decision to cancel registration made before the commencement day

(1) This item applies if:

(a) before the commencement day, a decision is made by a committee under section 155I of the old Act that the trustee should cease to be registered; and

(b) the Inspector‑General has not given effect to the committee’s decision before the commencement day.

Note: In the case of a decision by the committee under paragraph 155I(2)(b) that the trustee should continue to be registered subject to specified conditions, see item 109.

(2) On the commencement day, the committee is taken to have made a decision under section 40‑55 of the Insolvency Practice Schedule (Bankruptcy) to cancel the registration of the person as a trustee.

(3) Section 40‑65 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to the decision as if the decision were made on the commencement day.

(4) To avoid doubt, nothing in this item affects any right or obligation that any person has before the commencement day, including any right to review, in relation to the consideration of the matter by the committee.

118 Matters not dealt with by a committee before the commencement day

(1) If:

(a) the Inspector‑General convened a committee under section 155H of the old Act to consider whether the trustee should continue to be registered before the commencement day; and

(b) the committee has not made a decision in relation to the trustee under section 155I of the old Act before the commencement day;

the committee must cease its consideration of the matter on the commencement day without making such a decision.

(2) The fact that the committee has ceased to consider the matter does not preclude the matter, or any aspect of the matter, from being dealt with under Division 40 of the Insolvency Practice Schedule (Bankruptcy).

(3) To avoid doubt, nothing in this item affects any right or obligation that any person has before the commencement day, including any right to review, in relation to the consideration of the matter by the committee.

Subdivision F—Suspension, cancellation and disciplinary action under the Insolvency Practice Schedule (Bankruptcy)

119 Direction to comply with requirement to lodge documents etc.

Subdivision B of Division 40 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not a requirement mentioned in that Subdivision to lodge a document or give information or a document arises before, on or after the commencement day.

120 Suspension by the Inspector‑General under the Insolvency Practice Schedule (Bankruptcy)

(1) Section 40‑25 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not an event mentioned in subsection 40‑25(1) occurs before, on or after the commencement day.

(2) However, paragraph 40‑25(1)(c) of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to the cancellation or suspension of the registration of a person as a liquidator under the Corporations Act 2001, as in force at any time before the commencement day.

121 Cancellation by the Inspector‑General under the Insolvency Practice Schedule (Bankruptcy)

(1) Section 40‑30 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not an event mentioned in subsection 40‑30(1) occurs before, on or after the commencement day.

(2) However, paragraph 40‑30(1)(c) of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to the cancellation of the registration of a person as a liquidator under the Corporations Act 2001, as in force at any time before the commencement day.

122 Show‑cause notice under the Insolvency Practice Schedule (Bankruptcy)

(1) Subdivision E of Division 40 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not an event mentioned in subsection 40‑40(1) of the Schedule occurs before, on or after the commencement day.

(2) However, in relation to an event that occurs before the commencement day, paragraph 40‑40(1)(p) of the Insolvency Practice Schedule (Bankruptcy) has effect as if the reference in that paragraph to “a standard prescribed for the purposes of subsection (4)” was a reference instead to “a standard prescribed by regulations made for the purpose of subsection 155H(5) of the old Act”.

123 Action initiated by industry bodies

Section 40‑100 of the Insolvency Practice Schedule (Bankruptcy) applies, whether or not the grounds to which a notice under that section relates arise because of an action, a failure to act or circumstance that occurs before, on or after the commencement day.

Subdivision G—Powers of the Court and other bodies

124 Application of Court powers under section 45‑1 of the Insolvency Practice Schedule (Bankruptcy)

The Court may exercise its powers to make an order under section 45‑1 of the Insolvency Practice Schedule (Bankruptcy), whether or not the action or failure to act in relation to which, or because of which, the order is made occurs before, on or after the commencement day.

125 Powers to deal with registration under the old Act on or after the commencement day

(1) This item applies if, as a result of the continued application of the old Act on or after the commencement day, a relevant body may decide to register a person or cancel the registration of a person, as a trustee under the old Act or to impose conditions on a person’s registration as a trustee under the old Act.

(2) A relevant body may instead:

(a) register the person or cancel the registration of the person, as a trustee under the Insolvency Practice Schedule (Bankruptcy) or impose conditions on a person’s registration as a trustee under that Schedule; and

(b) by order, modify the application of this Part or the Insolvency Practice Schedule (Bankruptcy) in relation to the registration, or the cancellation of the registration, of the person as a trustee under the Insolvency Practice Schedule (Bankruptcy) or in relation to the conditions imposed on a person’s registration as a trustee under that Schedule.

(3) In this item:

relevant body means the Inspector‑General, the Administrative Appeals Tribunal, the Court or any other body.

Division 3—Application of Part 3 of the Insolvency Practice Schedule (Bankruptcy) and related consequential amendments

Subdivision A—Introduction

126 Simplified outline of this Division

This Division deals with the way the Bankruptcy Act 1966 will apply to the administration of a regulated debtor’s estate when the provisions of the Insolvency Practice Schedule (Bankruptcy) begin to operate.

New administrations

The Insolvency Practice Schedule (Bankruptcy) applies to an administration of a regulated debtor’s estate that starts on or after the commencement of this Act (called new administrations).

Ongoing administrations

For an administration of a regulated debtor’s estate that starts before that day but is still ongoing (called ongoing administrations), the Insolvency Practice Schedule (Bankruptcy) applies in accordance with this Division but usually only in relation to new events. Generally, the old Act continues to apply to old events and processes that are incomplete. There are some exceptions.

Old administrations

For old administrations that have ended but that may have ongoing obligations or processes, in most cases the old Act continues to apply.

Subdivision B—General rules for Part 3

127 Application of Part 3 of the Insolvency Practice Schedule (Bankruptcy)—general rules

New administrations

(1) Part 3 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to a new administration of a regulated debtor’s estate.

Ongoing administrations

(2) Part 3 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to an ongoing administration of a regulated debtor’s estate in accordance with this Division.

Subdivision C—Remuneration and other benefits received by trustees

128 Application of Division 60 of the Insolvency Practice Schedule (Bankruptcy)—general rule

Subdivision B of Division 60 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to a trustee of a regulated debtor’s estate under ongoing administration who is appointed, or who consents to act, on or after the commencement day.

129 Old Act continues to apply in relation to remuneration for trustees already appointed

Despite the repeal of sections 161B and 162 of the old Act by this Schedule, those sections (other than subsections 162(5A), (6) and (6A)) continue to apply in relation to the remuneration of a trustee of an estate of a bankrupt who is appointed, or who consents to act, before the commencement day.

Note: Remuneration of these trustees may be varied from time to time under section 162.

130 Duties of trustees relating to remuneration and other benefits

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Sections 60‑20 and 60‑21 of the Insolvency Practice Schedule (Bankruptcy) apply in relation to a trustee of a regulated debtor’s estate under ongoing administration whether or not the trustee is appointed, or consents to act, before, on or after the commencement day.

(2) However, those sections do not apply in relation to arrangements made before the commencement day.

Old Act continues to apply to arrangements made before commencement day

(3) Despite the repeal of section 165 of the old Act by this Schedule, that section continues to apply in relation to arrangements made before the commencement day.

131 Payment for performance by third parties

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Section 60‑26 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to a trustee of a regulated debtor’s estate under ongoing administration whether or not the trustee is appointed, or consents to act, before, on or after the commencement day.

(2) However, that section does not apply in relation to payments received before the commencement day.

Old Act continues to apply to payments received before commencement day

(3) Despite the repeal of section 162 of the old Act by this Schedule, subsection 162(6) continues to apply in relation to payments received before the commencement day.

132 Remuneration of former trustees

Old Act continues to apply where both trustees appointed before commencement

(1) If:

(a) a person ceases to be the trustee of a regulated debtor’s estate and another person becomes the new trustee of the estate; and

(b) both those persons were appointed, or consented to act, as trustee of the estate before the commencement day;

then, despite the repeal of section 164 of the old Act by this Schedule, that section continues to apply in relation to the remuneration of those trustees to the extent that the section would have applied in relation to those trustees if it had not been repealed.

Operation of the Insolvency Practice Schedule (Bankruptcy) where one trustee is appointed before commencement and one after

(2) If:

(a) a person (the former trustee) ceases to be the trustee of a regulated debtor’s estate and another person (the new trustee) becomes the new trustee of the estate; and

(b) the former trustee was appointed, or consented to act, as trustee of the estate before the commencement day; and

then:

(d) the Insolvency Practice Schedule (Bankruptcy) applies; and

(e) if:

(i) the former trustee and the new trustee agree on the remuneration that the former trustee is entitled to receive for necessary work properly performed by the former trustee in relation to the administration of the regulated debtor’s estate; and

(ii) the creditors, by resolution, endorse that agreement;

the creditors are taken to have made a determination under section 60‑10 of the Insolvency Practice Schedule (Bankruptcy) specifying the agreed remuneration as the remuneration that the former trustee is entitled to receive for the work.

Subdivision D—Funds handling

133 Application of Division 65 of the Insolvency Practice Schedule (Bankruptcy)—general rule

Division 65 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to an ongoing administration of a regulated debtor’s estate.

134 Administration account

If, immediately before the commencement day, a person has an account that complies with the requirements (if any) specified in the old regulations in relation to the administration of:

(a) an estate of a bankrupt; or

(b) more than one estate of a bankrupt or bankrupts;

the account is taken on and after the commencement day to be an administration account for the relevant estate for the purposes of section 65‑5 of the Insolvency Practice Schedule (Bankruptcy) and subsection 280(5) of the Bankruptcy Act 1966.

135 Paying money into administration account

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Sections 65‑5 and 65‑15 of the Insolvency Practice Schedule (Bankruptcy) do not apply in relation to money received before the commencement day.

Old Act continues to apply to money received before commencement

(2) Despite its repeal by this Schedule, subsection 169(2) of the old Act continues to apply in relation to money received before the commencement day.

136 Paying money out of administration account

Section 65‑25 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to money paid out of an administration account before the commencement day.

137 Reconciliation of administration account

Section 65‑32 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to money received, or payments made, in relation to a regulated debtor’s estate before the commencement day.

138 Receipts

Despite its repeal by this Schedule, section 171 of the old Act continues to apply in relation to payments into, or made out of, an estate of a bankrupt before the commencement day.

139 Handling of securities

Section 65‑40 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to negotiable instruments and other securities received before the commencement day.

140 Review of payments to third parties

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) A review of a bill of costs for services in relation to the administration of a regulated debtor’s estate may be carried out in accordance with rules made for the purposes of section 65‑46 of the Insolvency Practice Schedule (Bankruptcy) whether or not the service was provided before, on or after the commencement day.

Old Act continues to apply in relation to ongoing reviews

(2) Subitems (3) and (4) apply if a review in accordance with regulations made for the purposes of subsection 167(2) of the old Act is started before the commencement day.

(3) Nothing in this Act affects:

(a) the review; or

(b) the powers of the Inspector‑General in relation to the review; or

(d) any appeal or review in relation to the review.

(4) The old Act continues to apply on and after the commencement day in relation to the review despite the amendments and repeals made by this Act.

Subdivision E—Information

141 Application of Division 70 of the Insolvency Practice Schedule (Bankruptcy)—general rule

Division 70 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to an ongoing administration of a regulated debtor’s estate.

142 Accounts and administration returns

Administration returns for 2017‑18 and later years

(1) Section 70‑5 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to the financial year starting on 1 July 2017 and later financial years.

Accounts under old Act

(2) The repeal of section 170A by this Schedule applies in relation to the financial year starting on 1 July 2017 and later financial years.

143 Administration books

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Section 70‑10 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to events:

(a) that occur before the commencement day; and

(b) in respect of which, or because of which, entries or minutes are to be made.

Old Act continues to apply to events etc. before commencement day

(2) Despite the repeal of section 173 of the old Act by this Schedule, that section continues to apply in relation to events:

(a) that occur before the commencement day; and

(b) in respect of which, or because of which, accounts and records must be kept.

144 Books when trading

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Section 70‑11 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to events:

(a) that occur before the commencement day; and

(b) in respect of which, or because of which, entries in books are to be made.

Old Act continues to apply to events etc. before commencement day

(2) Despite the repeal of section 174 of the old Act by this Schedule, that section continues to apply in relation to events:

(a) that occur before the commencement day; and

(b) in respect of which, or because of which, accounts and records must be kept.

145 Audit of administration books

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Sections 70‑15 to 70‑25 of the Insolvency Practice Schedule (Bankruptcy) apply to books relating to an ongoing administration of a regulated debtor’s estate whether or not the books are kept under a provision of the old Act or of the Insolvency Practice Schedule (Bankruptcy).

Continuation of audits under old Act

(2) Despite the repeal of section 175 of the old Act by this Schedule, audits may be continued under that section in relation to accounts under section 173 as if the old Act continued to apply.

Priority payments

(3) Despite the amendment of paragraph 109(1)(a) of the old Act made by this Schedule, that section continues to apply in relation to the payment of costs of audits under section 175 of the old Act as if that amendment had not been made.

146 Transfer of administration books

Section 70‑30 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to a person who ceases to be the trustee of a regulated debtor’s estate on or after the commencement day.

147 Retention and destruction of administration books

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) To avoid doubt, sections 70‑35 and 70‑36 of the Insolvency Practice Schedule (Bankruptcy) apply to books relating to an ongoing administration of a regulated debtor’s estate whether or not the books are kept under a provision of the old Act or of the Insolvency Practice Schedule (Bankruptcy).

Old Act continues to apply in relation to books for old administrations

(2) If:

(a) an administration of an estate of a bankrupt or debtor ends before the commencement day; and

(b) immediately before that day, a person was required under the old Act to retain books relating to the estate for a period; and

section 312 of the old Act (despite its repeal) continues to apply on and after the commencement day in relation to the person for the remainder of that period. However, subsection 312(4) of the old Act applies as if the reference to 15 years were instead a reference to 7 years.

Destruction etc. of books under old Act

(3) If a person is entitled under section 312 of the old Act to destroy or return books then (despite section 70‑35 of the Insolvency Practice Schedule (Bankruptcy)) those books may be destroyed or returned.

148 Giving information to creditors etc.

Subdivision D of Division 70 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the information, report or document referred to in subsection 70‑40(1), 70‑45(1), or 70‑50(1) of the Insolvency Practice Schedule (Bankruptcy):

(a) was obtained or generated; or

(b) was made or prepared; or

before, on or after the commencement day.

149 Commonwealth may request information

Section 70‑55 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the information, report or document referred to in subsection 70‑55(2):

(a) was obtained or generated; or

(b) was made or prepared; or

before, on or after the commencement day.

150 Giving information to regulated debtors

Section 70‑56 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the information, report or document referred to in subsection 70‑56(1):

(a) was obtained or generated; or

(b) was made or prepared; or

before, on or after the commencement day.

151 Reporting to Inspector‑General

Section 70‑60 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the information, report or document referred to in subsection 70‑60(1):

(a) was obtained or generated; or

(b) was made or prepared; or

before, on or after the commencement day.

Subdivision F—Meetings

152 Application of Division 75 of the Insolvency Practice Schedule (Bankruptcy)—general rules

(1) Division 75 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to an ongoing administration of a regulated debtor’s estate.

(2) However, Division 75 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to meetings convened or held before the commencement day.

153 Trustee must convene meetings in certain circumstances

Section 75‑15 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to:

(a) directions given before the commencement day; or

(b) resolutions passed before the commencement day.

154 Old Act continues to apply in relation to certain meetings

If:

(a) a trustee is required to convene, or has already called, a meeting of creditors under the old Act; and

(b) as at the commencement day, the meeting has not been held;

then the old Act continues to apply on and after the commencement day (despite the repeals and amendments made by this Schedule) in relation to the meeting.

Subdivision G—Committees of inspection

155 Application of Division 80 of the Insolvency Practice Schedule (Bankruptcy)—general rules

(1) Division 80 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to a committee of inspection for an ongoing administration of a regulated debtor’s estate:

(a) that is appointed under that Division on or after the commencement day; or

(b) that is appointed under a provision of the old Act but is taken to be a committee of inspection under subitem 156(1).

(2) However, Division 80 of the Insolvency Practice Schedule (Bankruptcy) does not apply in relation to meetings of, or related to, the committee of inspection convened or held before the commencement day.

156 Appointing committees of inspection

Committees appointed under old Act taken to be committee of inspection

(1) If there is, in relation to the administration of a regulated debtor’s estate, a committee of inspection validly appointed under section 70 of the old Act, then on and after the day specified in subitem (2), the committee (the continued committee) is taken for the purposes of the Insolvency Practice Schedule (Bankruptcy) to be a committee of inspection established under section 80‑10 of the Insolvency Practice Schedule (Bankruptcy) in relation to the administration of the estate.

(2) For the purposes of subitem (1), the day is:

(a) in the case of a committee appointed on or before the commencement day—the commencement day; or

(b) in the case of a committee appointed on a day that is after the commencement day in accordance with a provision of this Division—that later day.

Note: In relation to paragraph (2)(b), for example, a committee may be appointed at a meeting called under the old Act before the commencement day but held after that day in accordance with item 154.

157 Membership of continued committees

Members of continued committee

(1) The members of a continued committee are the members appointed to the committee under section 70 of the old Act.

Continued application of the old Act to members of continued committees

(2) If a person is a member of a continued committee, then despite the repeal of subsections 70(3) and (4) and section 71 of the old Act by this Schedule, those provisions continue to apply in relation to the person.

Application of the Insolvency Practice Schedule (Bankruptcy)

(3) The following provisions do not apply in relation to members of a continued committee:

(a) sections 80‑15 to 80‑25 of the Insolvency Practice Schedule (Bankruptcy);

(b) Insolvency Practice Rules made under section 80‑30 of the Insolvency Practice Schedule (Bankruptcy) that relate to membership of a committee of inspection.

Note: However, the committee could dissolve and the members could form a new committee to which these provisions would then apply.

158 Directions by creditors and committees of inspection

Sections 80‑35 and 85‑5 of the Insolvency Practice Schedule (Bankruptcy) apply whether or not the direction is given before, on or after the commencement day.

159 Committee of inspection may request information

Section 80‑40 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the information, report or document referred to in subsection 80‑40(1):

(a) was obtained or generated; or

(b) was made or prepared; or

before, on or after the commencement day.

160 Duties of members of committee of inspection and creditors relating to profits and advantages etc.

Sections 80‑55 and 80‑60 of the Insolvency Practice Schedule (Bankruptcy) apply to arrangements made on or after the commencement day.

Subdivision H—Review of the administration of a regulated debtor’s estate

161 Application of Division 90 of the Insolvency Practice Schedule (Bankruptcy)—general rule

Division 90 of the Insolvency Practice Schedule (Bankruptcy) applies in relation to an ongoing administration of a regulated debtor’s estate whether or not the matter to be reviewed occurred before, on or after the commencement day.

162 Review of remuneration

Application of the Insolvency Practice Schedule (Bankruptcy)

(1) Reviews under Subdivision C of Division 90 of the Insolvency Practice Schedule (Bankruptcy) may be carried out whether or not:

(a) the remuneration is paid or payable; or

(b) the cost or expense is incurred or paid; or

before, on or after the commencement day.

Old Act continues to apply in relation to ongoing reviews

(2) Subitems (3) and (4) apply if a review in accordance with regulations made for the purposes of subsection 167(1) of the old Act is started before the commencement day.

(3) Nothing in this Act affects:

(a) the review; or

(b) the powers of the Inspector‑General in relation to the review; or

(d) any requirement for a trustee to repay an amount of remuneration; or

(e) any appeal or review in relation to the review.

(4) The old Act continues to apply on and after the commencement day in relation to the review despite the amendments and repeals made by this Act.

163 Application of the Insolvency Practice Schedule (Bankruptcy) provisions that conflict with old Act Court orders—general rules

(1) This item applies if a court makes an order in relation to a person or the administration of an estate of a bankrupt under the old Act (the old Act order).

(2) The old Act order does not cease to have effect because a provision of the old Act under which it was made has been amended or repealed by this Act.

(3) If the old Act order is inconsistent with:

(a) a provision of the Bankruptcy Act 1966 that is amended or inserted by this Act; or

(b) a provision dealing with matters of an application, saving or transitional nature relating to amendments made by this Act;

then, subject to this Part, the provision does not apply to the extent that it is inconsistent with the old Act order.

164 Old Act continues to apply in relation to ongoing proceedings before a court—general rules

(1) This item applies if proceedings are brought under the old Act in a court (on application or on the initiative of the court) in relation to the administration of a regulated debtor’s estate either:

(a) before the commencement day; or

(b) on or after the commencement day (in accordance with a provision of this Division).

(2) Subject to this Part, nothing in this Act affects:

(a) the proceedings; or

(b) the power of the court to make orders in relation to the proceedings; or

(d) any enforcement in relation to, or as a result of, the proceedings (including giving effect to any court orders); or

(e) any appeal or review in relation to the proceedings.

(3) Subject to this Part, the old Act continues to apply on and after the commencement day in relation to the proceedings despite the amendments and repeals made by this Act.

(4) In this item:

proceedings include civil and criminal proceedings, inquiries by the court, enforcement processes and any other processes.

165 Court powers to inquire into and make orders

(1) Subitems (2) to (4) are for the avoidance of doubt.

(2) Sections 90‑5 and 90‑10 of the Insolvency Practice Schedule (Bankruptcy) apply whether or not the information, report or document mentioned in subsections 90‑5(2) and 90‑10(3) was prepared before, on or after the commencement day.

(3) Paragraph 90‑15(3)(f) of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the remuneration is paid or payable before, on or after the commencement day.

(4) Subsection 90‑15(4) of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the action or failure to act occurred before, on or after the commencement day.

166 Removal by creditors

For the avoidance of doubt, section 90‑35 of the Insolvency Practice Schedule (Bankruptcy) applies whether or not the trustee was appointed before, on or after the commencement day.

Division 4—Administrative review

167 Administrative Appeals Tribunal proceedings

(1) This item applies if an application is made to the Administrative Appeals Tribunal under a reviewable provision for review of a decision (the reviewable decision) under that provision either:

(a) before the commencement day; or

(b) on or after the commencement day (in accordance with a provision of this Part).

(2) Subject to this Part, nothing in this Act affects:

(a) any proceedings before the Administrative Appeals Tribunal in relation to the reviewable decision; or

(b) the powers of the Administrative Appeals Tribunal in relation to the reviewable decision; or

(c) any enforcement in relation to, or as a result of, a decision of the Administrative Appeals Tribunal in relation to the reviewable decision; or

(d) any appeal or review in relation to a decision of the Administrative Appeals Tribunal in relation to the reviewable decision.

(3) Subject to this Part, the old Act continues to apply on and after the commencement day in relation to the proceedings despite the amendments and repeals made by this Act.

Applications for review made after the commencement day

(4) Despite the repeal of a reviewable provision by this Schedule, applications may be made to the Administrative Appeals Tribunal under the reviewable provision.

(5) In this item:

reviewable provision means section 155A, 155F or 155I of the old Act.

Division 5—Application of other consequential amendments

168 Resolutions and special resolutions

The repeal and substitution of the definitions of resolution and special resolution in subsection 5(1) of the Bankruptcy Act 1966 by this Schedule apply in relation to:

(a) in the case of proposals put to creditors in a meeting—proposals put at a meeting where the requirement to hold the meeting arises on or after the commencement day; and

(b) in the case of proposals without meetings—proposals put to creditors on or after the commencement day.

169 Requirements for approved forms

Section 6D of the Bankruptcy Act 1966 as inserted by this Schedule applies to documents made, given or lodged on or after the commencement day.

170 Disclosure of information

Subsection 12(4) of the Bankruptcy Act 1966 as inserted by this Schedule applies whether or not the information was obtained, or is in relation to events that occurred, before, on or after the commencement day.

171 Giving information to the Official Receiver

Section 19B of the Bankruptcy Act 1966 as inserted by this Schedule applies whether or not the books were made before, on or after the commencement day.

172 Penalty units for offences

The amendments of subsections 54(1), 54(2) and 56F(1) of the Bankruptcy Act 1966 made by this Schedule apply in relation to offences committed on or after the commencement day.

173 Purchases of property of the bankrupt by a member of the committee of inspection

The repeal of section 72 of the Bankruptcy Act 1966 by this Schedule applies in relation to property purchased before the commencement day.

174 Time for doing something—business days

(1) This item applies in relation to the amendments made by this Schedule to each of the following provisions (the relevant provision):

(a) subsection 73(1A);

(b) subparagraph 139ZIE(1)(a)(i);

(d) paragraph 139ZIF(1)(a).

(2) If a person is required to do something within a period of time after a particular event, the amendment to the relevant provision applies if the event occurs on or after the commencement day.

175 Information about accounts and account‑freezing

(1) This item applies if, before the commencement day, the Inspector‑General has asked a person under subsection 155H(1) of the Bankruptcy Act 1966 to give a written explanation why the person should continue to be registered as a trustee.

(2) Sections 186LA and 186LB of the old Act continue to apply on and after the commencement day in relation to the bank with which the person holds or held an account as if the amendments to those sections made by this Schedule had not been made.

176 Infringement notices

Despite the repeal of table items 6 to 11 in subsection 277B(2) of the Bankruptcy Act 1966 by this Schedule, those items continue to apply in relation to offences committed before the commencement day.

177 Protection in respect of reports

Despite the amendments and repeals made by this Schedule, subsection 306B(1) of the Bankruptcy Act 1966 continues to apply in relation to reports given under subsection 155A(6), 155F(2) or 155I(4) of that Act.

Division 6—Regulations

178 Regulations

(1) The Governor‑General may make regulations prescribing matters of a transitional nature (including prescribing any saving or application provisions) relating to the amendments and repeals made by this Schedule.

(2) The regulations may provide that certain provisions of this Schedule are taken to be modified as set out in the regulations. Those provisions then have effect as if they were so modified.

(3) The provisions of this Schedule that provide for regulations to deal with matters do not limit each other.

Schedule 2—Amendments relating to the Insolvency Practice Schedule (Corporations)

Part 1—Insolvency Practice Schedule (Corporations)

Corporations Act 2001

1 At the end of Part 5.9

Add:

Division 4—Insolvency Practice Schedule (Corporations)

600K Insolvency Practice Schedule (Corporations)

Schedule 2 has effect.

2 Before Schedule 3

Insert:

Schedule 2—Insolvency Practice Schedule (Corporations)

Note: See section 600K.

Part 1—Introduction

Division 1—Introduction

1‑1 Object of this Schedule

(1) The object of this Schedule is to ensure that any person registered as a liquidator:

(a) has an appropriate level of expertise; and

(b) behaves ethically; and

(2) The object of this Schedule is also:

(a) to regulate the external administration of companies consistently, unless there is a clear reason to treat a matter that arises in relation to a particular kind of external administration differently; and

(b) to regulate the external administration of companies to give greater control to creditors.

1‑5 Simplified outline of this Schedule

Registering liquidators

Under this Act, only a registered liquidator can perform certain roles, such as that of the receiver of the property of a corporation, the administrator of a company or of a deed of company arrangement, or the liquidator or provisional liquidator of a company.

Part 2 of this Schedule sets out the process for registering liquidators, and also deals with disciplining registered liquidators.

Consistently regulating the external administration of companies

Part 3 of this Schedule sets out provisions to regulate the external administration of companies consistently.

A company is under external administration if the company is under administration, is the subject of a deed of company arrangement or has had a liquidator or provisional liquidator appointed in relation to it. A company is not under external administration merely because a person has been appointed as a receiver, receiver and manager or other controller in relation to the property of the company.

Other provisions

There are other matters relevant to the external administration of a company regulated in Chapter 5.

This Schedule also gives authority for a legislative instrument, the Insolvency Practice Rules, to deal with some matters.

Many of the terms in this Schedule are defined. The Dictionary in section 5‑5 contains a list of every term that is defined in this Schedule. Other terms are defined in section 9 of this Act.

Division 5—Definitions

Subdivision A—Introduction

5‑1 Simplified outline of this Division

Terms used in this Schedule are defined in the Dictionary. In some cases, the definition is a signpost to another provision of the Schedule in which the meaning of the term is explained.

Some of the key terms, the meaning of which is explained in this Division, are external administration of a company and external administrator of a company.

Subdivision B—The Dictionary

5‑5 The Dictionary

In this Schedule:

adequate and appropriate fidelity insurance has a meaning affected by subsection 25‑1(2).

adequate and appropriate professional indemnity insurance has a meaning affected by subsection 25‑1(2).

administration account: see section 65‑5.

annual administration return means the return required to be lodged under subsection 70‑5(3).

annual liquidator return means the return required to be lodged under subsection 30‑1(1).

approved form: a document is lodged in the approved form if it is lodged in accordance with section 100‑6.

committee of inspection for a company means:

(a) a committee appointed under sections 80‑10 to 80‑25 in relation to the external administration of the company; or

(b) a committee that is taken to be a committee of inspection in relation to the external administration of the company under subsection 80‑26(3) (the company is a member of a pooled group).

creditor, when used in relation to a company under external administration, means a creditor of the company.

current conditions: see section 5‑10.

end of administration return means the return required to be lodged under subsection 70‑6(2).

end of an external administration of a company means:

(a) in relation to a company under administration—the day worked out under paragraph 435C(1)(b); and

(b) in relation to a company subject to a deed of company arrangement—the day the deed is terminated; and

external administration of a company: see section 5‑15.

external administrator of a company: see section 5‑20.

financial interest: a person has a financial interest in the external administration of a company in the circumstances set out in section 5‑30.

GST has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.

Insolvency Practice Rules means the rules made by the Minister under section 105‑1.

Insolvency Practice Schedule (Bankruptcy) means Schedule 2 to the Bankruptcy Act 1966, and includes rules made under section 105‑1 of that Schedule.

March quarter means the period of 3 months beginning on 1 January.

maximum default amount for an external administrator of a company: see section 60‑15.

member of a pooled group: see section 5‑27.

pooled group: see section 5‑27.

prescribed means prescribed by the Insolvency Practice Rules.

property has a meaning affected by section 5‑26.

registered liquidator means an individual who is registered as a liquidator under Part 2 of this Schedule.

related entity, in relation to an individual, has the same meaning as in the Bankruptcy Act 1966.

remuneration determination, for an external administrator of a company, means a determination made in accordance with section 60‑10 in relation to the external administrator.

resolution: a resolution is passed by creditors or contributories of a company:

(a) in a meeting—in the circumstances prescribed under paragraph 75‑50(2)(k); or

(b) without a meeting—in the circumstances prescribed under paragraph 75‑40(5)(b).

reviewing liquidator means a registered liquidator who has been appointed under section 90‑23 or 90‑24 to conduct a review.

special resolution: a special resolution is passed by creditors or contributories of a company:

(a) in a meeting—in the circumstances prescribed under paragraph 75‑50(2)(k); or

(b) without a meeting—in the circumstances prescribed under paragraph 75‑40(5)(b).

start of an external administration of a company means:

(a) in relation to a company under administration—the day an administrator of the company is appointed under section 436A, 436B or 436C; and

(b) in relation to a company that is subject to a deed of company arrangement—the day the deed is executed; and

(c) in the case of a winding up of a company—the day the winding up of the company is taken to have begun under section 513A or 513B; and

(d) in relation to a company for which a provisional liquidator has been appointed—the day the provisional liquidator is appointed.

this Schedule includes the Insolvency Practice Rules.

Subdivision C—Other definitions

5‑10 Meaning of current conditions

(1) Each of the following is a current condition imposed on a registered liquidator:

(a) a condition that a committee decides that the registered liquidator is to be subject to under subsection 20‑20(5) or (6), subject to any variation that a committee has decided should be made to the condition under section 20‑55;

(b) a condition imposed on all registered liquidators, or on registered liquidators of the liquidator’s class, under section 20‑35;

(d) a condition that a committee decides that the registered liquidator is to be subject to under paragraph 40‑55(1)(f) or (g) (conditions as a result of disciplinary action), subject to any variation that a committee has decided should be made to the condition under section 20‑55;

(e) a condition imposed on the registered liquidator by the Court under section 45‑1.

(2) However, the current conditions imposed on a registered liquidator do not include:

(a) a condition that a committee has decided to remove under section 20‑55; or

(b) a condition that is removed under subsection 40‑15(4) (condition removed because a direction not to accept further appointments has been withdrawn); or

5‑15 Meaning of external administration of a company

A company is taken to be under external administration if:

(a) the company is under administration; or

(b) a deed of company arrangement has been entered into in relation to the company; or

(d) a provisional liquidator has been appointed in relation to the company.

Note: A company is not under external administration for the purposes of this Schedule merely because a receiver, receiver and manager, or other controller has been appointed in relation to property of the company.

5‑20 Meaning of external administrator of a company

A person is an external administrator of a company if the person is:

(a) the administrator of the company; or

(b) the administrator under a deed of company arrangement that has been entered into in relation to the company; or

(d) the provisional liquidator of the company.

Note: A person is not an external administrator of a company for the purposes of this Schedule merely because the person has been appointed as a receiver, receiver and manager, or controller in relation to property of the company.

5‑25 References to the external administrator of a company

A reference in this Schedule to the external administrator of a company is to be read:

(a) in relation to a company in respect of which there are 2 or more joint external administrators—as a reference to all of the external administrators; and

(b) in relation to a company in respect of which there are 2 or more joint and several external administrators—as a reference to all of the external administrators or any one or more of the external administrators.

5‑26 Property of a company

The property of a company includes any PPSA retention of title property of the company.

Note: See sections 9 (definition of property) and 51F (PPSA retention of title property).

5‑27 Meaning of pooled group

If:

(a) a pooling determination is in force in relation to a group of 2 or more companies; or

(b) a pooling order is in force in relation to a group of 2 or more companies;

then:

(d) each of the companies is a member of the pooled group.

5‑30 Persons with a financial interest in the external administration of a company

A person has a financial interest in the external administration of a company:

(a) if the person is one of the following:

(i) the company;

(ii) a creditor of the company;

(iii) an external administrator of the company;

(iv) in a members’ voluntary winding up—a member of the company; or

(b) in any other circumstances prescribed.

Part 2—Registering and disciplining practitioners

Division 10—Introduction

10‑1 Simplified outline of this Part

Registering liquidators

An individual may apply to ASIC to be registered as a liquidator. ASIC will refer the application to a committee who will consider the applicant’s qualifications, conduct and fitness and whether the applicant will take out appropriate insurance. Registration may be subject to conditions, is for 3 years and may be renewed.

A registered liquidator must:

(a) lodge an annual return with ASIC that includes proof that the liquidator has appropriate insurance; and

(b) give ASIC notice if the liquidator’s circumstances change or if certain other events happen.

Disciplining registered liquidators

If a registered liquidator fails to comply with certain requirements, such as the requirement to lodge a document or give information, ASIC may give directions that may result in the liquidator being unable to accept further appointments. ASIC may also seek a Court order.

ASIC may suspend or cancel a liquidator’s registration in certain circumstances. ASIC may also give the liquidator a show‑cause notice. If such a notice is given and no sufficient explanation is given, ASIC may take further disciplinary action on the decision of a committee.

Industry bodies may notify ASIC where they suspect there are grounds for disciplinary action.

Court powers

The Court has broad powers to make orders in relation to registered liquidators (including imposing conditions on registration).

10‑5 Working cooperatively with the Inspector‑General in Bankruptcy

In performing its functions and exercising its powers under this Act in relation to persons who are, have been or may become both registered liquidators under this Act and registered trustees under the Bankruptcy Act 1966, ASIC must work cooperatively with the Inspector‑General in Bankruptcy.

Division 15—Register of liquidators

15‑1 Register of Liquidators

(1) ASIC must establish and maintain a Register of Liquidators.

(2) The Register of Liquidators may be kept in any form that ASIC considers appropriate.

(3) The Insolvency Practice Rules may provide for and in relation to the Register of Liquidators.

(4) Without limiting subsection (3), the Insolvency Practice Rules may provide for and in relation to:

(a) the details to be entered on the Register of Liquidators; and

(b) the parts of the Register that are to be made available to the public.

(5) Without limiting paragraph (4)(a), those details may include:

(a) details of any disciplinary action decided by a committee under section 40‑55; and

(b) details of persons who have had their registration as a liquidator under this Act suspended or cancelled.

Division 20—Registering liquidators

Subdivision A—Introduction

20‑1 Simplified outline of this Division

An individual may apply to ASIC to be registered as a liquidator. The application will be referred to a committee, which will assess the application against specified criteria (the applicant’s qualifications, conduct and fitness and whether the applicant will take out appropriate insurance). The committee will report its decision to ASIC and, if the committee decides that the applicant should be registered, ASIC will register the applicant as a liquidator.

A registration may be subject to conditions. Conditions may be imposed on a particular registered liquidator by the committee, or on all registered liquidators or a class of registered liquidators by the Insolvency Practice Rules. A registered liquidator may apply to ASIC to have a condition imposed by a committee removed or varied. That application will be referred to a committee.

Registration is for 3 years, but may be renewed. An application for renewal may be made to ASIC within specified time periods.

A decision of a committee about an application for registration or about a condition of registration is reviewable by the Administrative Appeals Tribunal (see Part 9.4A of this Act).

Subdivision B—Registration

20‑5 Application for registration

(1) An individual may apply to ASIC to be registered as a liquidator.

(2) The application must be lodged with ASIC in the approved form.

Note: Fees for lodging documents may be imposed under the Corporations (Fees) Act 2001.

(3) The application is properly made if subsection (2) is complied with.

20‑10 ASIC may convene a committee to consider

(1) ASIC may convene a committee for the purposes of considering an application, or applications, for registration as a liquidator.

(2) The committee must consist of:

(a) ASIC; and

(b) a registered liquidator chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

20‑15 ASIC must refer applications to a committee

(1) ASIC must refer an application for registration as a liquidator that is properly made to a committee convened under section 20‑10 for consideration.

(2) ASIC must do so within 2 months after receiving the application.

20‑20 Committee to consider applications

Committee must consider referred applications

(1) If an application for registration as a liquidator is referred to a committee, the committee must consider the application.

(2) For the purposes of considering the application, the committee:

(a) must interview the applicant; and

(b) may require the applicant to sit for an exam.

Decision of committee

(3) Within 45 business days after interviewing the applicant, the committee must decide whether the applicant should be registered as a liquidator or not.

(4) The committee must decide that the applicant should be registered as a liquidator if it is satisfied that the applicant:

(a) has the qualifications, experience, knowledge and abilities prescribed; and

(b) will take out:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the applicant may incur working as a registered liquidator; and

(c) has not been convicted, within 10 years before making the application, of an offence involving fraud or dishonesty; and

(d) is not, and has not been within 10 years before making the application, an insolvent under administration; and

(e) has not had his or her registration as a liquidator under this Act cancelled within 10 years before making the application, other than in response to a written request by the applicant to have the registration cancelled; and

(f) has not had his or her registration as a trustee under the Bankruptcy Act 1966 cancelled within 10 years before making the application, other than in response to a written request by the applicant to have the registration cancelled; and

(g) is not disqualified from managing corporations under Part 2D.6 of this Act, or under a law of an external Territory or a law of a foreign country; and

(h) is otherwise a fit and proper person; and

(i) is resident in Australia or in another prescribed country.

(5) The committee may decide that the applicant should be registered even if the committee is not satisfied of a matter mentioned in paragraph (4)(a),(e), (f) or (i), provided the committee is satisfied that the applicant would be suitable to be registered as a liquidator if the applicant complied with conditions specified by the committee.

Registration may be subject to conditions

(6) The committee may decide that the applicant’s registration is to be subject to any other conditions specified by the committee.

Spent convictions

(7) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

20‑25 Committee to report

The committee must give the applicant and ASIC a report setting out:

(a) the committee’s decision on the application; and

(b) the committee’s reasons for that decision; and

(c) if the committee decides under subsection 20‑20(5) or (6) that the applicant should be registered subject to a condition:

(i) the condition; and

(ii) the committee’s reasons for imposing the condition.

20‑30 Registration

Registration as liquidator

(1) ASIC must register the applicant as a liquidator if:

(a) the committee has decided that the applicant should be registered; and

(b) the applicant has produced evidence in writing to ASIC that the applicant has taken out:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the applicant may incur working as a registered liquidator.

Note: Fees may be imposed under the Corporations (Fees) Act 2001 for the doing of an act by ASIC.

(2) ASIC registers an applicant by entering on the Register of Liquidators the details relating to the applicant prescribed for the purposes of subsection 15‑1(3).

Registration subject to current conditions

(3) The registration is subject to the current conditions imposed on the registered liquidator.

Certificate of registration

(4) After registering a person as a liquidator, ASIC must give the person a certificate of registration.

(5) The certificate may be given electronically.

Period of registration

(6) The registration has effect for 3 years.

20‑35 Conditions imposed on all registered liquidators or a class of registered liquidators

(1) The Insolvency Practice Rules may impose conditions on all registered liquidators, or registered liquidators of a specified class.

(2) Without limiting subsection (1), a condition may be imposed limiting the kinds of activity in which a liquidator may engage, either for the duration of the registration or for a shorter period.

Subdivision C—Varying etc. conditions of registration

20‑40 Application to vary etc. conditions of registration

(1) If a committee has decided under this Schedule that a person’s registration as a liquidator is to be subject to a condition, the person may apply to ASIC for the condition to be varied or removed.

(2) However, an application cannot be made:

(a) if the person’s registration as a liquidator is suspended; or

(b) if the condition is of a prescribed kind; or

(3) The application must be lodged with ASIC in the approved form.

(4) The application is properly made if:

(a) an application can be made; and

(b) subsection (3) is complied with.

(5) A single application by a registered liquidator may deal with more than one condition.

20‑45 ASIC may convene a committee to consider applications

(1) ASIC may convene a committee for the purposes of considering an application, or applications, made under section 20‑40.

(2) The committee must consist of:

(a) ASIC; and

(b) a registered liquidator chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

20‑50 ASIC must refer applications to a committee

(1) ASIC must refer an application that is properly made under section 20‑40 to a committee convened under section 20‑45 for consideration.

(2) ASIC must do so within 2 months after receiving the application.

20‑55 Committee to consider applications

(1) If an application to vary or remove a condition of registration is referred to a committee, the committee must consider the application.

(2) Unless the applicant otherwise agrees, the committee must, for the purposes of considering the application, interview the applicant.

(3) The committee must, within 20 business days after interviewing the applicant or obtaining the agreement of the applicant as referred to in subsection (2):

(a) decide whether the condition to which the application relates should be varied or removed; and

(b) if a condition is to be varied—specify the way in which it is to be varied.

20‑60 Committee to report

The committee must give the applicant and ASIC a report setting out:

(a) the committee’s decision on the application; and

(b) the committee’s reasons for that decision; and

20‑65 Committee’s decision given effect

If the committee decides that a condition imposed on a registered liquidator is to be varied or removed, the condition is varied or removed in accordance with that decision.

Subdivision D—Renewal

20‑70 Application for renewal

(1) An individual may apply to ASIC to have the individual’s registration as a liquidator renewed.

(2) The application must be lodged with ASIC in the approved form:

(a) if the Court makes an order under subsection (3)—on or before the time specified in the order; or

(b) otherwise—before the applicant’s registration as a liquidator ceases to have effect.

Note: Fees for lodging documents and late lodgement fees may be imposed under the Corporations (Fees) Act 2001.

(3) The Court may, on application, extend the time within which the individual may apply to ASIC to have the individual’s registration as a liquidator renewed.

(4) The application for renewal is properly made if subsection (2) is complied with.

20‑75 Renewal

Renewal of registration

(1) On application under section 20‑70, ASIC must renew the registration of the applicant as a liquidator if:

(a) the application is properly made; and

(b) the applicant has produced evidence in writing to ASIC that the applicant maintains:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the applicant may incur working as a registered liquidator; and

(c) the applicant has complied with any condition dealing with continuing professional education to which the applicant is subject during the applicant’s current registration.

(2) ASIC renews the registration of the applicant by entering, or maintaining, on the Register of Liquidators the details relating to the applicant prescribed for the purposes of subsection 15‑1(3).

Registration subject to current conditions

(3) The renewed registration is subject to the current conditions imposed on the registered liquidator.

Certificate of registration

(4) After renewing the registration of a person as a liquidator, ASIC must give the person a certificate of registration.

(5) The certificate may be given electronically.

Period of registration

(6) The renewed registration has effect for 3 years, beginning on the day after the person’s immediately preceding registration as a liquidator ceased to have effect.

Subdivision E—Offences relating to registration

20‑80 False representation that a person is a registered liquidator

A person commits an offence if:

(a) the person makes a representation; and

(b) the representation is that the person is a registered liquidator; and

Penalty: 30 penalty units.

Division 25—Insurance

25‑1 Registered liquidators to maintain insurance

Registered liquidator must maintain insurance

(1) A registered liquidator must maintain:

(a) adequate and appropriate professional indemnity insurance; and

(b) adequate and appropriate fidelity insurance;

against the liabilities that the liquidator may incur working as a registered liquidator.

(2) ASIC may, by legislative instrument, determine what constitutes adequate and appropriate professional indemnity insurance, and adequate and appropriate fidelity insurance, in relation to either or both of the following:

(a) specified circumstances;

(b) one or more specified classes of registered liquidators.

Offence

(3) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 1,000 penalty units.

(4) A person commits an offence of strict liability if:

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

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

Penalty: 60 penalty units.

Division 30—Annual liquidator returns

30‑1 Annual liquidator returns

Registered liquidator must lodge annual return

(1) A person who is a registered liquidator during all or part of a liquidator return year for the person must, within 1 month after the end of that year, lodge with ASIC a return that conforms with subsection (3).

(2) Each of the following is a liquidator return year for a person who is or was registered as a liquidator under section 20‑30:

(a) the period of 12 months beginning on the day on which that registration first began;

(b) each subsequent period of 12 months.

(3) A return under subsection (1) must:

(a) be in the approved form; and

(b) include evidence that the person has, during the whole of any period of the year during which the person was registered as a liquidator, maintained:

(i) adequate and appropriate professional indemnity insurance; and

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered liquidator.

(4) ASIC may, on the application of the registered liquidator made before the end of the period for lodging a return under subsection (1), extend, or further extend, that period.

Offence

(5) A person commits an offence of strict liability if:

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

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

Penalty: 5 penalty units.

Division 35—Notice requirements

35‑1 Notice of significant events

Registered liquidator must lodge notice

(1) A registered liquidator must lodge with ASIC a notice, in the approved form, if any of the following events occur:

(a) the liquidator becomes an insolvent under administration;

(b) a bankruptcy notice is issued under the Bankruptcy Act 1966 in relation to the liquidator as debtor, or a corresponding notice is issued in relation to the liquidator as debtor under a law of an external Territory or a law of a foreign country;

(d) the liquidator is disqualified from managing corporations under Part 2D.6 of this Act, or under a law of an external Territory or a law of a foreign country;

(e) the liquidator ceases to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the liquidator may incur working as a registered liquidator;

(f) the liquidator is issued with a notice under section 40‑40 of Schedule 2 to the Bankruptcy Act 1966 (a show‑cause notice) in relation to the liquidator’s registration as a trustee under that Act;

(g) the liquidator’s registration as a trustee under the Bankruptcy Act 1966 is suspended or cancelled;

(h) any other event prescribed.

The notice must be lodged within 5 business days after the registered liquidator could reasonably be expected to be aware that the event has occurred.

Offence

(2) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 100 penalty units.

35‑5 Notice of other events

Registered liquidator must lodge notice

(1) A registered liquidator must lodge with ASIC a notice, in the approved form, if any of the following events occur:

(a) information included in an annual liquidator return, an annual administration return or an end of administration return, prepared by or on behalf of the liquidator, is or becomes inaccurate in a material particular;

(b) any other event prescribed.

The notice must be lodged within 10 business days after the registered liquidator could reasonably be expected to be aware that the event has occurred.

Offence

(2) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 5 penalty units.

Division 40—Disciplinary and other action

Subdivision A—Introduction

40‑1 Simplified outline of this Division

Remedying failure to lodge documents or give information or documents

ASIC may direct a registered liquidator to comply with a requirement to lodge a document, or give any information or document, to ASIC. If the liquidator fails to comply with the direction, ASIC can direct that the liquidator accept no further appointments or seek an order from the Court directing the liquidator to comply.

Correcting and completing information given to ASIC

If ASIC reasonably suspects that information that a registered liquidator is required to give ASIC is incomplete or inaccurate, ASIC can direct the liquidator to confirm, complete or correct the information. ASIC can also direct the liquidator to tell someone about the defect in the information. If the liquidator fails to comply with a direction, ASIC can direct that the liquidator accept no further appointments or seek an order from the Court directing the liquidator to comply.

Other grounds for a direction not to accept further appointments

There are other grounds on which ASIC can issue a direction not to accept further appointments, for example, if the registered liquidator fails to comply with a direction to convene a meeting.

Suspending or cancelling registration

An individual’s registration as a liquidator can be suspended or cancelled.

The registration is automatically cancelled if the registered liquidator becomes an insolvent under administration or dies.

In some circumstances, ASIC can suspend or cancel the registration of a person as a liquidator. ASIC can also give a registered liquidator notice to show‑cause why the liquidator should continue to be registered. If ASIC is not satisfied with the answer, ASIC can refer the matter to a committee which will make a decision on what action should be taken.

An industry body can give ASIC notice of possible grounds for disciplinary action.

If a registration is suspended, the liquidator can apply to ASIC to have the suspension lifted or shortened.

A decision about the suspension or cancellation of the registration of a liquidator is reviewable by the Administrative Appeals Tribunal (see Part 9.4A of this Act).

Subdivision B—Direction to comply

40‑5 Registered liquidator to remedy failure to lodge documents or give information or documents

Application of this section

(1) This section applies if a registered liquidator fails to comply with a requirement to lodge any document, or give any information or document, that the liquidator is required under this Act to lodge with or give to ASIC.

ASIC may give direction to comply

(2) ASIC may, in writing, direct the liquidator to comply with the requirement within 10 business days after the direction is given.

(3) ASIC may, on the application of a registered liquidator made before the end of the period referred to in subsection (2), extend, or further extend, that period.

Consequences for failing to comply

(4) If the liquidator does not comply within the period, ASIC may do either or both of the following:

(a) give a direction under subsection 40‑15(1) (direction not to accept further appointments);

(b) apply to the Court for an order, under subsection 1274(11) (registers), section 45‑1 of this Schedule or any other provision that is relevant, directing the liquidator to comply with the requirement within such time as is specified in the order.

Direction is not a legislative instrument

(5) A direction under subsection (2) is not a legislative instrument.

Relationship with other laws

40‑10 Registered liquidator to correct inaccuracies etc.

Application of this section

(1) This section applies if ASIC reasonably suspects that any information that a registered liquidator is required under this Act to give to ASIC (whether in a document lodged or given to ASIC or otherwise) is incomplete or incorrect in any particular.

ASIC may give direction to correct information etc.

(2) ASIC may, in writing, direct the liquidator to do one or more of the following within a period of 10 business days after the direction is given:

(a) confirm to ASIC that the information is complete and correct;

(b) complete or correct the information (as the case requires);

(3) ASIC may, on the application of a registered liquidator made before the end of the period referred to in subsection (2), extend, or further extend, that period.

Consequences for failing to comply

(4) If the liquidator does not comply within the period, ASIC may do either or both of the following:

(a) give a direction under subsection 40‑15(1) (direction not to accept further appointments);

Direction is not a legislative instrument

(5) A direction under subsection (2) is not a legislative instrument.

Relationship with other laws

(6) Nothing in this section limits the operation of any other provision of this Act, or any other law, in relation to a person giving incomplete or incorrect information.

40‑15 Direction not to accept further appointments

ASIC may give direction not to accept further appointments

(1) ASIC may, in writing, direct a registered liquidator not to accept any further appointments under Chapter 5 (external administration), or not to accept any further appointments under Chapter 5 during a period specified in the direction, if:

(a) the liquidator has failed to comply with a direction given to the liquidator under section 40‑5 (direction to remedy failure to lodge documents, or give information or documents); or

(b) the liquidator has failed to comply with a direction given to the liquidator under section 40‑10 (direction to correct inaccuracies); or

(c) a committee has decided under paragraph 40‑55(1)(d) that ASIC should give the direction referred to in that paragraph; or

(d) the liquidator has failed to comply with a direction given to the liquidator under section 70‑70 (direction to give relevant material); or

(e) the liquidator has failed to comply with a direction given to the liquidator under subsection 75‑20(1) or (2), or subsection 80‑27(1) (direction to convene a meeting of creditors or comply with requirements in relation to such a meeting).

Condition of registration to comply with direction

(2) If ASIC gives a direction to a registered liquidator under subsection (1), it is a condition of the liquidator’s registration that the liquidator must comply with the direction.

Withdrawal of direction

(3) ASIC may withdraw a direction given under subsection (1).

(4) The condition is removed from the liquidator’s registration if ASIC withdraws the direction.

Direction is not a legislative instrument

(5) A direction under subsection (1) is not a legislative instrument.

Relationship with other laws

(6) Nothing in this section limits the operation of any other provision of this Act, or any other law, in relation to:

(a) a person who fails to comply with a requirement to lodge a document with, or give information or a document to, ASIC; or

(b) a person giving incomplete or incorrect information; or

(7) Nothing in this section limits ASIC’s power under this Act, or any other law, to apply to the Court for an order in relation to a failure to comply with a direction mentioned in subsection (1).

Subdivision C—Automatic cancellation

40‑20 Automatic cancellation

(1) The registration of a person as a liquidator is cancelled if:

(a) the person becomes an insolvent under administration; or

(b) the person dies.

(2) The cancellation takes effect on the day the event mentioned in subsection (1) happens.

Subdivision D—ASIC may suspend or cancel registration

40‑25 ASIC may suspend registration

(1) ASIC may suspend the registration of a person as a liquidator if:

(a) the person is disqualified from managing corporations under Part 2D.6 of this Act, or under a law of an external Territory or a law of a foreign country; or

(b) the person ceases to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered liquidator; or

(c) the person’s registration as a trustee under the Bankruptcy Act 1966 has been cancelled or suspended, other than in compliance with a written request by the person to cancel or suspend the registration; or

(d) if the Court has made an order under section 90‑15 that the person repay remuneration—the person has failed to repay the remuneration; or

(e) the person has been convicted of an offence involving fraud or dishonesty; or

(f) the person lodges a request with ASIC in the approved form to have the registration suspended.

(2) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

40‑30 ASIC may cancel registration

(1) ASIC may cancel the registration of a person as a liquidator if:

(a) the person is disqualified from managing corporations under Part 2D.6 of this Act, or under a law of an external Territory or a law of a foreign country; or

(b) the person ceases to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered liquidator; or

(c) the person’s registration as a trustee under the Bankruptcy Act 1966 has been cancelled, other than in compliance with a written request by the person to cancel the registration; or

(d) if the Court has made an order under section 90‑15 that the person repay remuneration—the person has failed to repay the remuneration; or

(e) the person has been convicted of an offence involving fraud or dishonesty; or

(f) the person lodges a request with ASIC in the approved form to have the registration cancelled.

(2) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

40‑35 Notice of suspension or cancellation

Application of this section

(1) This section applies if ASIC decides under section 40‑25 or 40‑30 to suspend or cancel the registration of a person as a liquidator.

ASIC must give notice of decision

(2) ASIC must, within 10 business days after making the decision, give the person a written notice setting out the decision, and the reasons for the decision.

When decision comes into effect

(3) The decision comes into effect on the day after the notice is given to the person.

Failure to give notice does not affect validity of decision

(4) A failure by ASIC to give the notice under subsection (2) within 10 business days does not affect the validity of the decision.

Subdivision E—Disciplinary action by committee

40‑40 ASIC may give a show‑cause notice

(1) ASIC may give a registered liquidator notice in writing asking the liquidator to give ASIC a written explanation why the liquidator should continue to be registered, if ASIC believes that:

(a) the liquidator no longer has the qualifications, experience, knowledge and abilities prescribed under paragraph 20‑20(4)(a); or

(b) the liquidator has committed an act of bankruptcy, within the meaning of the Bankruptcy Act 1966 or a corresponding law of an external Territory or a foreign country; or

(c) the liquidator is disqualified from managing corporations under Part 2D.6 of this Act, or under a law of an external Territory or a law of a foreign country; or

(d) the liquidator has ceased to have:

(i) adequate and appropriate professional indemnity insurance; or

(ii) adequate and appropriate fidelity insurance;

against the liabilities that the person may incur working as a registered liquidator; or

(e) the liquidator has breached a current condition imposed on the liquidator; or

(f) the liquidator has contravened a provision of this Act; or

(g) the liquidator has been appointed to act as a reviewing liquidator under Subdivision C of Division 90 of this Schedule, and has failed to properly exercise the powers or perform the duties of a reviewing liquidator; or

(h) the liquidator’s registration as a trustee under the Bankruptcy Act 1966 has been cancelled or suspended, other than in compliance with a written request by the liquidator to cancel or suspend the registration; or

(i) if the Court has made an order under section 90‑15 that the liquidator repay remuneration—the liquidator has failed to repay the remuneration; or

(j) the liquidator has been convicted of an offence involving fraud or dishonesty; or

(k) the liquidator is permanently or temporarily unable to perform the functions and duties of a liquidator because of physical or mental incapacity; or

(l) the liquidator has failed to carry out adequately and properly (whether in Australia or in an external Territory or in a foreign country):

(i) the duties of a liquidator; or

(ii) any other duties or functions that a registered liquidator is required to carry out under a law of the Commonwealth or of a State or Territory, or the general law; or

(m) the liquidator is not a fit and proper person; or

(n) the liquidator is not resident in Australia or in another prescribed country.

(2) A notice under subsection (1) is not a legislative instrument.

(3) Nothing in this section affects the operation of Part VIIC of the Crimes Act 1914.

40‑45 ASIC may convene a committee

(1) ASIC may convene a committee to make a decision of a kind mentioned in section 40‑55 in relation to a registered liquidator, or registered liquidators.

(2) The committee must consist of:

(a) ASIC; and

(b) a registered liquidator chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

40‑50 ASIC may refer matters to the committee

ASIC may refer a registered liquidator to a committee convened under section 40‑45 if ASIC:

(a) gives the liquidator a notice under section 40‑40 (a show‑cause notice); and

(b) either:

(i) does not receive an explanation within 20 business days after the notice is given; or

(ii) is not satisfied by the explanation.

40‑55 Decision of the committee

(1) If a registered liquidator is referred to a committee under section 40‑50, the committee must decide one or more of the following:

(a) that the liquidator should continue to be registered;

(b) that the liquidator’s registration should be suspended for a period, or until the occurrence of an event, specified in the decision;

(d) that ASIC should direct the liquidator not to accept any further appointments as liquidator, or not to accept any further appointments as liquidator during the period specified in the decision;

(e) that the liquidator should be publicly admonished or reprimanded;

(f) that a condition specified in the decision should be imposed on the liquidator;

(g) that a condition should be imposed on all other registered liquidators that they must not allow the liquidator to carry out any of the functions or duties, or exercise any of the powers, of a registered liquidator on their behalf (whether as employee, agent, consultant or otherwise) for a period specified in the decision of no more than 10 years;

(h) that ASIC should publish specified information in relation to the committee’s decision and the reasons for that decision.

(2) Without limiting paragraph (1)(f), conditions imposed under that paragraph may include one or more of the following:

(a) a condition that the liquidator engage in, or refrain from engaging in, specified conduct;

(b) a condition that the liquidator engage in, or refrain from engaging in, specified conduct except in specified circumstances;

(d) a condition that the liquidator notify a specified person or class of persons of specified information;

(e) a condition that the liquidator publish a specified statement;

(f) a condition that the liquidator make a specified statement to a specified person or class of persons.

(3) In making its decision, the committee may have regard to:

(a) any information provided to the committee by ASIC; and

(b) any explanation given by the liquidator; and

(d) if the liquidator is or was also a registered trustee under the Bankruptcy Act 1966—any information in relation to the liquidator given to the committee by the Inspector‑General in Bankruptcy or a committee convened under the Insolvency Practice Schedule (Bankruptcy); and

(e) any other matter that the committee considers relevant.

40‑60 Committee to report

The committee must give the registered liquidator and ASIC a report setting out:

(a) the committee’s decision in relation to the liquidator; and

(b) the committee’s reasons for that decision; and

(c) if the committee decides under paragraph 40‑55(1)(f) that the liquidator should be registered subject to a condition:

(i) the condition; and

(ii) the committee’s reasons for imposing the condition; and

(d) if the committee decides under paragraph 40‑55(1)(g) that a condition should be imposed on all other registered liquidators in relation to the liquidator:

(i) the condition; and

(ii) the committee’s reasons for imposing the condition.

40‑65 ASIC must give effect to the committee’s decision

ASIC must give effect to the committee’s decision.

Subdivision F—Lifting or shortening suspension

40‑70 Application to lift or shorten suspension

Application of this section

(1) This section applies if a person’s registration as a liquidator has been suspended.

Suspended liquidator may apply to ASIC

(2) The person may apply to ASIC:

(a) for the suspension to be lifted; or

(b) for the period of the suspension to be shortened.

(3) The application must be lodged with ASIC in the approved form.

(4) The application is properly made if subsection (3) is complied with.

40‑75 ASIC may convene a committee to consider applications

(1) ASIC may convene a committee for the purposes of considering an application, or applications, made under section 40‑70.

(2) The committee must consist of:

(a) ASIC; and

(b) a registered liquidator chosen by a prescribed body; and

Note 1: Section 50‑5 sets out the knowledge and experience that a prescribed body must be satisfied a person has before making an appointment under paragraph (2)(b).

Note 2: Section 50‑10 sets out the matters of which the Minister must be satisfied before making an appointment under paragraph (2)(c).

40‑80 ASIC must refer applications to a committee

(1) ASIC must refer an application that is properly made under section 40‑70 to a committee convened under section 40‑75 for consideration.

(2) ASIC must do so within 2 months after receiving the application.

40‑85 Committee to consider applications

(1) If an application is referred to a committee, the committee must consider the application.

(2) Unless the applicant otherwise agrees, the committee must interview the applicant for the purposes of considering the application.

(3) Within 10 business days after interviewing the applicant or obtaining the agreement of the applicant as referred to in subsection (2), the committee must:

(a) decide whether the suspension should be lifted, or the period of the suspension shortened; and

(b) if the period of the suspension is to be shortened—specify when the suspension is to end.

40‑90 Committee to report

The committee must give the applicant and ASIC a report setting out:

(a) the committee’s decision on the application; and

(b) the committee’s reasons for that decision; and

40‑95 Committee’s decision given effect

If the committee decides that a suspension is to be lifted or shortened, the suspension is lifted or shortened in accordance with the decision.

Subdivision G—Action initiated by industry body

40‑100 Notice by industry bodies of possible grounds for disciplinary action

Industry body may lodge notice

(1) An industry body may lodge with ASIC a notice in the approved form (an industry notice):

(a) stating that the body reasonably suspects that there are grounds for ASIC:

(i) to suspend the registration of a registered liquidator under section 40‑25; or

(ii) to cancel the registration of a registered liquidator under section 40‑30; or

(iii) to give a registered liquidator a notice under section 40‑40 (a show‑cause notice); or

(iv) to impose a condition on a registered liquidator under another provision of this Schedule; and

(b) identifying the registered liquidator; and

ASIC must consider information and documents

(2) ASIC must consider the information and the copies of any documents included with the industry notice.

ASIC must give notice if no action to be taken

(3) If, after such consideration, ASIC decides to take no action in relation to the matters raised by the industry notice, ASIC must give the industry body written notice of that fact.

45 business days to consider and decide

(4) The consideration of the information and the copies of any documents included with the industry notice must be completed and, if ASIC decides to take no action, a notice under subsection (3) given, within 45 business days after the industry notice is lodged.

ASIC not precluded from taking action

(5) ASIC is not precluded from:

(a) suspending the registration of a registered liquidator under section 40‑25; or

(b) cancelling the registration of a registered liquidator under section 40‑30; or

(d) imposing a condition on a registered liquidator under another provision of this Schedule;

wholly or partly on the basis of information or a copy of a document included with the industry notice, merely because ASIC has given a notice under subsection (3) in relation to the matters raised by the industry notice.

Notice to industry body if ASIC takes action

(6) If ASIC does take action of the kind mentioned in subsection (5) wholly or partly on the basis of information or a copy of a document included with the industry notice, ASIC must give the industry body notice of that fact.

Notices are not legislative instruments

(7) A notice under subsection (3) or (6) is not a legislative instrument.

40‑105 No liability for notice given in good faith etc.

(1) An industry body is not liable civilly, criminally or under any administrative process for giving a notice under subsection 40‑100(1) if:

(a) the body acted in good faith in giving the notice; and

(b) the suspicion that is the subject of the notice is a reasonable suspicion.

40‑110 Meaning of industry bodies

The Insolvency Practice Rules may prescribe industry bodies for the purposes of this section.

Subdivision H—Consequences of certain disciplinary and other action

40‑111 Appointment of another liquidator if liquidator’s registration is suspended or cancelled

(1) If:

(a) the registration of a liquidator is suspended or cancelled under this Division; and

(b) the liquidator is conducting the external administration of a company at the time the registration is suspended or cancelled;

ASIC may, in writing, appoint another registered liquidator to conduct the external administration of the company.

(2) If:

(a) a liquidator fails to renew his or her registration as a liquidator before that registration ceases to have effect; and

(b) no order has been made by the Court under subsection 20‑70(3) extending the period during which the liquidator may apply for renewal; and

(c) the liquidator is conducting the external administration of a company at the time his or her registration as a liquidator ceases to have effect;

ASIC may, in writing, appoint another registered liquidator to conduct the external administration of the company.

(3) Subsections (1) and (2) do not apply to:

(a) a liquidator appointed by the Court; or

(b) a winding up ordered by ASIC under section 489EA; or

Note: For court‑appointed liquidators, see section 473A. For a winding up ordered by ASIC, see section 489EA. For a members’ voluntary winding up, see section 495.

(4) An appointment of a registered liquidator by ASIC under subsection (1) must not be made without the written consent of the liquidator.

Division 45—Court oversight of registered liquidators

45‑1 Court may make orders in relation to registered liquidators

(1) The Court may make such orders as it thinks fit in relation to a registered liquidator.

(2) The Court may exercise the power under subsection (1):

(a) on its own initiative, during proceedings before the Court; or

(b) on application under subsection (3).

(3) Each of the following persons may apply for an order under subsection (1):

(a) the registered liquidator;

(b) ASIC.

(4) Without limiting the matters which the Court may take into account when making orders, the Court may take into account:

(a) whether the registered liquidator has faithfully performed, or is faithfully performing, the registered liquidator’s duties; and

(b) whether an action or failure to act by the registered liquidator is in compliance with this Act and the Insolvency Practice Rules; and

(d) whether any person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the registered liquidator; and

(e) the seriousness of the consequences of any action or failure to act by the registered liquidator, including the effect of that action or failure to act on public confidence in registered liquidators as a group.

(5) This section does not limit the Court’s powers under any other provision of this Act, or under any other law.

45‑5 Court may make orders about costs

(1) Without limiting section 45‑1, the Court may make orders in relation to a registered liquidator that deal with the costs of a matter considered by the Court.

(2) Those orders may include an order that:

(a) the registered liquidator is personally liable for some or all of those costs; and

(b) the registered liquidator is not entitled to be reimbursed by a company or its creditors in relation to some or all of those costs.

(3) This section does not limit the Court’s powers under any other provision of this Act, or under any other law.

Division 50—Committees under this Part

50‑1 Simplified outline of this Division

This Division sets out common rules for committees established under this Part.

If a prescribed body appoints a person to a committee, that person must have the prescribed knowledge or experience or, if no knowledge or experience is prescribed, the knowledge and experience necessary to carry out the functions to be performed. If the Minister appoints a person to a committee, that person must have knowledge or experience in a field such as business, law (including the law of corporate insolvency) or public policy relating to corporate insolvency.

The use and disclosure of information given to a committee is restricted to listed purposes.

50‑5 Prescribed body appointing a person to a committee

Application of this section

(1) This section applies if a prescribed body is to appoint a person to a committee under this Part.

Prescribed body must only appoint a person with appropriate knowledge and experience

(2) The prescribed body is to appoint a person as a member of the committee only if the prescribed body is satisfied that the person has:

(a) if any knowledge or experience is prescribed in relation to appointments of the kind to be made—that knowledge or experience; or

50‑10 Minister appointing a person to a committee

Application of this section

(1) This section applies if the Minister is to appoint a person to a committee under any of the following paragraphs:

(a) paragraph 20‑10(2)(c);

(b) paragraph 20‑45(2)(c);

(d) paragraph 40‑75(2)(c).

Matters of which the Minister must be satisfied before appointing

(a) business;

(b) law, including the law relating to corporate insolvency;

(d) accounting;

(e) public policy relating to corporate insolvency;

(f) administration of companies, including insolvent companies.

Minister must not appoint member or staff member of ASIC

(3) The Minister must not appoint:

(a) a member of ASIC (within the meaning of section 9 of the Australian Securities and Investments Commission Act 2001); or

(b) a staff member of ASIC;

to be a member of the committee.

Delegation of power to appoint

(4) The Minister may, in writing, delegate the Minister’s powers to appoint a person to a committee to:

(a) ASIC; or

(b) a member of ASIC (within the meaning of section 9 of the Australian Securities and Investments Commission Act 2001); or

(i) is an SES employee or acting SES employee; or

(ii) is an APS employee who holds, or is acting in, an Executive Level 2 position; or

(iii) holds, or is acting in, an office or position that is equivalent to an SES employee, or an Executive Level 2.

(5) In exercising powers under a delegation, the delegate must comply with any directions of the Minister.

50‑15 Single committee may consider more than one matter

A single committee may be convened under this Part to consider one or more of the following:

(a) a matter or matters relating to one applicant for registration as a liquidator;

(b) a matter or matters relating to more than one applicant for registration as a liquidator;

(d) a matter or matters relating to more than one registered liquidator.

50‑20 Ongoing consideration of matters by committee

If a committee is convened under this Part to consider a matter:

(a) the committee’s powers, functions and duties in relation to the matter are not affected by a change in the membership of the committee; and

(b) the committee may adjourn its consideration of the matter, and may do so more than once; and

(c) the matter may be transferred to another committee with powers, functions and duties under this Part in relation to matters of that kind.

50‑25 Procedure and other rules relating to committees

The Insolvency Practice Rules may provide for and in relation to:

(a) the manner in which the committees convened under this Part are to perform their functions, including:

(i) meetings of committees; and

(ii) the number of committee members required to constitute a quorum; and

(iii) disclosure of interests in a matter before a committee; and

(iv) the manner in which questions are to be decided by the committee; and

(b) the reconstitution of a committee; and

50‑30 Remuneration of committee members

(2) A member is entitled to receive such allowances as the Minister determines in writing.

(3) This section has effect subject to the Remuneration Tribunal Act 1973.

50‑35 Committee must only use information etc. for purposes for which disclosed

Offence

(1) A person commits an offence if:

(a) the person is or was a member of a committee convened under this Part; and

(b) information or a document is or was disclosed to the person for the purposes of exercising powers or performing functions as a member of the committee; and

Penalty: 50 penalty units.

Exception—information or document disclosed to the Inspector‑General in Bankruptcy or another committee etc.

(2) Subsection (1) does not apply if the information or document:

(a) is used or disclosed by the person for the purposes of exercising powers or performing functions as a member of the committee mentioned in subsection (1); or

(b) is disclosed:

(i) to the Inspector‑General in Bankruptcy to assist the Inspector‑General to exercise his or her powers or perform his or her functions under the Bankruptcy Act 1966; or

(ii) to a committee convened under Part 2 of the Insolvency Practice Schedule (Bankruptcy) to assist the committee to exercise its powers or perform its functions under that Part; or

(iii) to another committee convened under this Part to assist the committee to exercise its powers or perform its functions under this Part; or

(iv) to enable or assist a body prescribed for the purposes of this paragraph to perform its disciplinary function in relation to its members; or

(vi) to a court or tribunal in relation to proceedings before the court or tribunal.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Part 3—General rules relating to external administrations

Division 55—Introduction

55‑1 Simplified outline of this Part

This Part sets out requirements for conducting the external administration of a company.

The main provisions deal with:

(a) the remuneration of the external administrator; and

(b) the duties of the external administrator in handling the money and other property of the company; and

(d) the duties of the external administrator to keep appropriate records, to report to ASIC and to give information, documents and reports to creditors, members of the company and others; and

(e) creditor and company meetings; and

(f) the creation and conduct of a committee to monitor the external administration (called a committee of inspection); and

(g) the rights of creditors to review the external administration; and

(h) the rights of creditors to remove the external administrator and appoint another; and

(i) the review of the external administration by the Court.

There are additional rules that apply to companies under external administration in Chapter 5 (for example, about appointment of external administrators) of this Act.

Companies in receivership are not covered in this Part (see generally Part 5.2 of this Act).

Division 60—Remuneration and other benefits received by external administrators

Subdivision A—Introduction

60‑1 Simplified outline of this Division

Remuneration

The external administrator of a company is entitled to receive remuneration for necessary work properly performed by the external administrator in relation to the external administration.

The amount of remuneration will usually be set under a remuneration determination. Remuneration determinations are made by:

(a) in a members voluntary winding up—the members; and

(b) in most other cases—the creditors or the committee of inspection (if there is one).

However, if there is no remuneration determination, the external administrator will be entitled to receive a reasonable amount for the work. The maximum amount that the external administrator may receive in this way is $5,000 (exclusive of GST and indexed).

The remuneration of provisional liquidators is, in most cases, determined by the Court.

The Court may review the remuneration of the external administrator of a company and may also make orders under Division 90 about remuneration (including ordering repayment of remuneration).

Other benefits

The external administrator of a company must not:

(a) employ a related entity, unless certain requirements are met;

(b) purchase any assets of the company; or

Subdivision B—Remuneration of external administrators—general rules

60‑2 Application of this Subdivision

This Subdivision applies in relation to an external administrator of a company other than:

(a) a provisional liquidator; or

(b) a liquidator appointed by ASIC under section 489EC (winding up by ASIC).

Note: For the remuneration of provisional liquidators, see Subdivision C of this Division. For the remuneration of liquidators appointed by ASIC under section 489EC, see Subdivision D of this Division.

60‑5 External administrator’s remuneration

Remuneration in accordance with remuneration determinations

(1) An external administrator of a company is entitled to receive remuneration for necessary work properly performed by the external administrator in relation to the external administration, in accordance with the remuneration determinations (if any) for the external administrator (see section 60‑10).

Remuneration for external administrators if no remuneration determination made

(2) If no remuneration determination is made in relation to necessary work properly performed by the external administrator of a company in relation to the external administration, the administrator is entitled to receive reasonable remuneration for the work. However, that remuneration must not exceed the maximum default amount.

60‑10 Remuneration determinations

Remuneration determinations

(1) A determination, specifying remuneration that an external administrator of a company (other than an external administrator in a members’ voluntary winding up) is entitled to receive for necessary work properly performed by the external administrator in relation to the external administration, may be made:

(a) by resolution of the creditors; or

(b) if there is a committee of inspection and a determination is not made under paragraph (a)—by the committee of inspection; or

Note: For determinations made by the Court, see also section 60‑12 (matters to which the Court must have regard).

(2) A determination, specifying remuneration that an external administrator of a company in a members’ voluntary winding up is entitled to receive for necessary work properly performed by the external administrator in relation to the external administration, may be made:

(a) by resolution of the company at a general meeting; or

(b) if a determination is not made under paragraph (a)—by the Court.

Note: For determinations made by the Court, see also section 60‑12 (matters to which the Court must have regard).

(3) A determination under this section may specify remuneration that the external administrator is entitled to receive in either or both of the following ways:

(a) by specifying an amount of remuneration;

(b) by specifying a method for working out an amount of remuneration.

Remuneration on a time‑cost basis

(4) If a determination under this section specifies that the external administrator is entitled to receive remuneration worked out wholly or partly on a time‑cost basis, the determination must include a cap on the amount of remuneration worked out on a time‑cost basis that the external administrator is entitled to receive.

More than one remuneration determination may be made

(5) To avoid doubt, more than one determination under this section may be made in relation to a particular external administrator of a company and a particular external administration of a company.

60‑11 Review of remuneration determinations

Review on application

(1) Any of the following may apply to the Court for a review of a remuneration determination for an external administrator of a company:

(a) ASIC;

(b) a person with a financial interest in the external administration of the company;

(2) Paragraph (1)(c) has effect despite section 198G.

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

(3) On application under subsection (1), the Court may, if it considers it appropriate to do so, review the remuneration determination.

Note: See also section 60‑12 (matters to which the Court must have regard).

Court must affirm, vary or set aside remuneration determination

(4) After reviewing the remuneration determination, the Court must:

(a) affirm the remuneration determination; or

(b) vary the remuneration determination; or

Exception

(5) Subsection (1) does not apply to a remuneration determination made by the Court.

60‑12 Matters to which the Court must have regard

In making a remuneration determination under paragraph 60‑10(1)(c) or (2)(b), or reviewing a remuneration determination under section 60‑11, the Court must have regard to whether the remuneration is reasonable, taking into account any or all of the following matters:

(a) the extent to which the work by the external administrator was necessary and properly performed;

(b) the extent to which the work likely to be performed by the external administrator is likely to be necessary and properly performed;

(d) the quality of the work performed, or likely to be performed, by the external administrator;

(e) the complexity (or otherwise) of the work performed, or likely to be performed, by the external administrator;

(f) the extent (if any) to which the external administrator was, or is likely to be, required to deal with extraordinary issues;

(g) the extent (if any) to which the external administrator was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;

(h) the value and nature of any property dealt with, or likely to be dealt with, by the external administrator;

(i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors;

(j) if the remuneration is worked out wholly or partly on a time‑cost basis—the time properly taken, or likely to be properly taken, by the external administrator in performing the work;

(k) whether the external administrator was, or is likely to be, required to deal with one or more controllers, or one or more managing controllers;

(l) if:

(i) a review has been carried out under Subdivision C of Division 90 (review by another registered liquidator) into a matter that relates to the external administration; and

(ii) the matter is, or includes, remuneration of the external administrator;

the contents of the report on the review that relate to that matter;

(m) any other relevant matters.

60‑15 Maximum default amount

Maximum default amount

(1) The maximum default amount for an external administrator of a company is an amount (exclusive of GST) worked out as follows:

(a) if the external administrator is appointed in relation to the external administration of the company during the financial year beginning on 1 July 2016—$5,000;

(b) if the external administrator is appointed in relation to the external administration of the company during a financial year beginning on or after 1 July 2017—the greater of:

(i) the amount worked out by multiplying the indexation factor for the financial year (worked out under subsections (3) and (4)) by the maximum default amount for an external administrator appointed during the previous financial year; and

(ii) the amount (if any) prescribed for the purposes of this subparagraph.

Rounding

(2) Amounts worked out under subsection (1) must be rounded to the nearest whole dollar (rounding 50 cents upwards).

Indexation factor

(4) If an indexation factor worked out under subsection (3) would be less than 1, the indexation factor is to be increased to 1.

Changes to CPI index reference period and publication of substituted index numbers

(5) In working out the indexation factor:

(a) use only the index numbers published in terms of the most recently published index reference period for the Consumer Price Index; and

Definition—index number

(6) In this section:

Subdivision C—Remuneration of provisional liquidators

60‑16 Remuneration of provisional liquidators

(1) A provisional liquidator is entitled to receive such remuneration, by way of percentage or otherwise, as is:

(a) determined by the Court; or

(b) if:

(i) no determination by the Court is in force; and

(ii) there is a committee of inspection;

determined by agreement between the liquidator and the committee of inspection; or

(i) no determination by the Court is in force; and

(ii) there is no committee of inspection or the liquidator and the committee of inspection fail to agree;

determined by resolution of the creditors.

(2) Sections 60‑11 and 60‑12 (Court review) apply in relation to a determination mentioned in this section in the same way as they apply to a remuneration determination made under section 60‑10.

Subdivision D—Remuneration of liquidators in winding up by ASIC

60‑17 Remuneration of liquidators in winding up by ASIC

If ASIC orders under section 489EA that a company be wound up, ASIC may determine the remuneration that the liquidator is entitled to receive.

Subdivision E—Duties of external administrators relating to remuneration and benefits etc.

60‑20 External administrator must not derive profit or advantage from the administration of the company

Deriving profit or advantage from the company

(1) An external administrator of a company must not directly or indirectly derive any profit or advantage from the external administration of the company.

Circumstances in which profit or advantage is taken to be derived

(2) To avoid doubt, an external administrator of a company is taken to derive a profit or advantage from the external administration of the company if:

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

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

(c) a related entity of the external administrator directly or indirectly derives a profit or advantage from the external administration of the company.

Exceptions

(3) Subsection (1) does not apply to the extent that:

(a) another provision of this Act, or of another law, requires or permits the external administrator to derive the profit or advantage; or

(b) the Court gives leave to the external administrator to derive the profit or advantage.

Note: Subsection (1) would not, for example, prevent the external administrator from recovering remuneration for necessary work properly performed by the external administrator in relation to the external administration of the company, as the external administrator is permitted to do so under other provisions of this Act.

(4) Despite paragraph (2)(c), subsection (1) does not apply to the extent that:

(a) the profit or advantage arises because the external administrator employs or engages a person to provide services in connection with the external administration of the company; and

(b) the person is a related entity of the external administrator; and

(i) the external administrator does not know, and could not reasonably be expected to know, that the person employed or engaged is a related entity of the external administrator;

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

(5) Subsection (1) does not apply to the extent that the profit or advantage is a payment that:

(a) is made to the external administrator by or on behalf of the Commonwealth or an agency or authority of the Commonwealth; and

(b) is of a kind prescribed.

Offence

(6) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (3), (4) and (5) (see subsection 13.3(3) of the Criminal Code).

Effect of contravention of this section

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

Division 65—Funds handling

65‑1 Simplified outline of this Division

The external administrator of a company has duties to:

(a) promptly pay all company money into an account (called an administration account); and

(b) promptly deposit instruments such as securities with a bank; and

(d) only pay money out of the account if it is for a legitimate purpose.

The external administrator of a company may keep a single account for a group of related companies (called a pooled group).

People with a financial interest in the external administration of a company (such as creditors) may ask the Court to give directions to the external administrator about the way money and other property of the company is to be handled.

If the external administrator of a company does not comply with this Division, the external administrator may have to pay penalties, be paid less remuneration or be removed as external administrator.

65‑5 External administrator must pay all money into an administration account

External administrator must pay money into the administration account

(1) The external administrator of a company must pay all money received by the external administrator on behalf of, or in relation to, the company into an administration account for the company within 5 business days after receipt.

Exception

(2) If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

(3) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

65‑10 Administration accounts

(1) A bank account is an administration account for a company if:

(a) the account is maintained in relation to the external administration of the company; and

(b) if any requirements are prescribed in relation to the administration accounts of companies under external administration, the account complies with those requirements.

(2) A bank account is an administration account for a member of a pooled group of companies if:

(a) the account is maintained in relation to the external administration of the pooled group of companies; and

(b) if any requirements are prescribed in relation to the administration accounts of companies under external administration, the account complies with those requirements.

65‑15 External administrator must not pay other money into the administration account

External administrator must not pay other money into the administration account

(1) The external administrator of a company must not pay any money into an administration account for the company if it is not received by the external administrator on behalf of, or in relation to:

(a) the company; or

(b) if the company is a member of a pooled group—another member of the pooled group.

Exception

(2) If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

(3) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

65‑20 Consequences for failure to pay money into administration account

Application of this section

(1) This section applies if:

(a) an external administrator of a company:

(i) is subject to a requirement under subsection 65‑5(1) (paying money into administration account); and

(ii) fails to comply with the requirement in relation to an amount of money; and

(b) the amount exceeds:

(i) $50; or

(ii) if another amount is prescribed—that other amount.

Exception

(2) Subsection (1) does not apply if, on the application of the external administrator of the company, the Court is satisfied that the external administrator had sufficient reason for failing to comply with the requirement in relation to the amount.

External administrator must pay penalty on excess

(3) The external administrator must, as a penalty, pay interest to the Commonwealth on the excess, worked out:

(a) at the rate of 20% per year; or

(b) if another rate is prescribed—at that other rate;

for the period during which the external administrator fails to comply with the requirement.

(4) The external administrator is personally liable for, and is not entitled to be reimbursed out of the property of the company in relation to, the payment of that interest.

65‑25 Paying money out of administration account

Money only to be paid out of administration account in accordance with this Act etc.

(1) An external administrator of a company must not pay any money out of the administration account for the company otherwise than:

(a) for purposes related to the external administration of the company; or

(b) in accordance with this Act; or

Offence

(2) A person commits an offence of strict liability if:

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

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

Penalty: 50 penalty units.

65‑40 Handling securities

Securities must be deposited with administration account bank

(1) An external administrator of a company must deposit in a bank:

(a) the negotiable instruments; and

(b) any other securities;

payable to the company or the external administrator as soon as practicable after they are received by the external administrator.

Exception

(2) If the Court gives a direction that is inconsistent with subsection (1), that subsection does not apply to the extent of the inconsistency.

Offence

(3) A person commits an offence of strict liability if:

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

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

Penalty: 5 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Delivery of securities

(4) The negotiable instruments or other security must be delivered out on the signed request of the external administrator.

65‑45 Handling of money and securities—Court directions

(1) The Court may, on application, give directions regarding the payment, deposit or custody of:

(a) money; and

(b) negotiable instruments and other securities;

that are payable to, or held by, an external administrator of a company.

(2) The Court may, on application, give directions authorising the external administrator of a company to make payments into and out of a special bank account.

(3) Without limiting subsection (2), the Court may:

(a) authorise the payments for the time and on the terms it thinks fit; and

(b) if the Court thinks the account is no longer required—at any time order it to be closed.

(4) A copy of an order under paragraph (3)(b) must be served by the external administrator on the bank with which the special bank account was opened.

(5) An application under this section may be made by:

(a) any person with a financial interest in the external administration of the company; or

(b) an officer of the company.

(6) Paragraph (5)(b) has effect despite section 198G.

Note: Section 198G deals with powers of officers etc. while a company is under external administration.

65‑50 Rules in relation to consequences for failure to comply with this Division

The Insolvency Practice Rules may provide for and in relation to:

(a) the payment by an external administrator of a company of interest at such rate, on such amount and in respect of such period as is prescribed; and

(b) disallowance of all or of such part as is prescribed of the remuneration of an external administrator of a company; and

(d) the payment by an external administrator of a company of any expenses occasioned by reason of his or her default;

in cases where an external administrator contravenes or fails to comply with this Division (including Insolvency Practice Rules made under this Division).

Division 70—Information

Subdivision A—Introduction

70‑1 Simplified outline of this Division

The external administrator of a company must:

(a) give annual reports of the administration (called annual administrative returns) to ASIC; and

(b) give a report of the administration to ASIC when the administration ends; and

(d) allow those books to be audited if required to do so; and

(e) allow access to those books by creditors; and

(f) give creditors, members and others requested information, documents and reports relating to the administration.

The committee of inspection (if there is one) may also request information, documents and reports from the external administrator under Division 80.

If the external administrator does not comply with a request, ASIC may direct the external administrator to do so. If the external administrator does not comply with the direction, ASIC may ask the Court to order compliance. Alternatively, the person who requested the information may ask the Court to order compliance with the request.

Subdivision B—Administration returns

70‑5 Annual administration return

Application of this section

(1) This section applies if a person is the external administrator of a company during all or part of an administration return year for the external administrator for the company.

(2) However, this section does not apply if:

(a) the external administration of the company ends during the administration return year; and

(b) the person is the external administrator of the company when the external administration of the company ends.

Note: If a person is the external administrator of a company when the external administration of the company ends, the person must instead lodge a return under section 70‑6.

Annual administration return to be lodged

(3) The person must lodge a return in relation to the external administration of the company by the person during the year or part of the year (as the case requires).

(4) The return must:

(a) be in the approved form; and

(b) be lodged with ASIC within 3 months after the end of the year.

Note: Fees for lodging documents and late lodgement fees may be imposed under the Corporations (Fees) Act 2001.

Meaning of administration return year

(5) Each of the following is an administration return year for an external administrator for a company:

(a) the period of 12 months beginning on the day on which the person first began to be an external administrator of the company;

(b) each subsequent period of 12 months.

Notice of lodgement to be given

(6) The person must give notice that the return has been lodged:

(a) in a members’ voluntary winding up—to the members of the company; and

(b) in a creditors’ voluntary winding up—to the creditors; and

(d) if the external administrator is appointed as a provisional liquidator—to the Court; and

(e) if the company is under administration or has executed a deed of company arrangement—to the company;

when next forwarding any report, notice of meeting, notice of call or dividend.

Note: For notification, see section 600G.

Returns for pooled groups

(7) If 2 or more companies are members of a pooled group, then the returns under subsection (3) for those companies may be set out in the same document.

70‑6 End of administration return

Application of this section

(1) This section applies if the external administration of a company ends.

End of administration return to be lodged

(2) The person who is the external administrator of the company when the external administration of the company ends (the last external administrator) must lodge a return in relation to the external administration of the company.

(3) The return must:

(a) be in the approved form; and

(b) be lodged with ASIC within 1 month after the end of the external administration of the company.

Note 1: Fees for lodging documents and late lodgement fees may be imposed under the Corporations (Fees) Act 2001.

Note 2: ASIC must deregister the company 3 months after the end of administration return is lodged (see section 509).

Notice of lodgement to be given

(4) The last external administrator must give notice that the return has been lodged to a person mentioned in subsection (6), if that person requests in writing that the last external administrator give the person such a notice.

Note: For notification, see section 600G.

(5) The persons who may request such a notice are:

(a) in a members’ voluntary winding up—the members of the company; and

(b) in a creditors’ voluntary winding up—the creditors; and

(d) if the external administrator is appointed as a provisional liquidator—the Court; and

(e) if the company is under administration or has executed a deed of company arrangement—the company.

Note: For notification, see section 600G.

Returns for pooled groups

(6) If 2 or more companies are members of a pooled group, then the returns under subsection (2) for those companies may be set out in the same document.

Subdivision C—Record‑keeping

70‑10 Administration books

External administrator must keep proper books

(1) An external administrator of a company must keep proper books in which the external administrator must cause to be made:

(a) entries or minutes of proceedings at meetings relating to the external administration of the company; and

(b) such other entries as are necessary to give a complete and correct record of the external administrator’s administration of the company’s affairs.

(2) The external administrator must:

(a) ensure that the books are available at the external administrator’s office for inspection; and

(b) permit a creditor or contributory, or another person acting on the creditor’s or contributory’s behalf, to inspect the books at all reasonable times.

Exception

(3) Subsections (1) and (2) do not apply if the external administrator has a reasonable excuse.

Offence

(4) A person commits an offence of strict liability if:

(a) the person is subject to a requirement under subsection (1) or (2); and

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

Penalty: 5 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (3) (see subsection 13.3(3) of the Criminal Code).

70‑15 Audit of administration books—ASIC

ASIC may cause books to be audited

(1) ASIC may cause the books referred to in section 70‑5 (annual administration return), 70‑6 (end of administration return) or 70‑10 (administration books) to be audited by a registered company auditor.

Audit on the ASIC’s initiative or on request

(2) The audit may be conducted:

(a) on ASIC’s own initiative; or

(b) at the request of the company; or

(d) at the request of any other person prescribed.

Auditor must prepare a report

(3) The auditor must prepare a report on the audit.

ASIC must give a copy of the report

(4) If ASIC causes books to be audited under subsection (1):

(a) ASIC must give a copy of the report prepared by the auditor to:

(i) the external administrator of the company; and

(ii) the person who requested the report (if any); and

(b) subsection 1289(5) applies in relation to the report prepared by the auditor as if it were a document required to be lodged.

Costs of an audit

(5) The costs of an audit under this section must be determined by ASIC and form part of the expenses of the external administration of the company.

70‑20 Audit of administration books—on order of the Court

(1) The Court may order that an audit of the books referred to in section 70‑5 (annual administration return), 70‑6 (end of administration return) or 70‑10 (administration books) be conducted by a registered company auditor.

(2) The order may be made on application of:

(a) any person with a financial interest in the external administration of the company; or

(b) an officer of the company.

(3) Paragraph (2)(b) has effect despite section 198G.

Note: Section 198G deals with powers of officers etc. while a company under external administration.

(4) The Court may make such orders in relation to the audit as it thinks fit, including:

(a) the preparation and provision of a report on the audit; and

(b) orders as to the costs of the audit.

70‑25 External administrator to comply with auditor requirements

Application of this section

(1) This section applies if books are audited under section 70‑15 or 70‑20.

External administrator must give assistance etc.

(2) The external administrator must give the auditor such books, information and assistance as the auditor reasonably requires.

Exception

(3) Subsection (2) does not apply if the external administrator has a reasonable excuse.

Offence

(4) A person commits an offence of strict liability if:

(a) the person is subject to a requirement under subsection (2); and

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

Penalty: 5 penalty units.

Note: A defendant bears an evidential burden in relation to the matter in subsection (3) (see subsection 13.3(3) of the Criminal Code).

70‑30 Transfer of books to new administrator

Application of this section

(1) This section applies if:

(a) a person (the former administrator) ceases to be the external administrator of a company; and

(b) ASIC has not issued a notice to the former administrator under section 70‑31; and

Transfer of books to new administrator

(2) The former administrator must transfer to the new administrator, within the handover period, possession or control of any books relating to the external administration of the company that are in the former administrator’s possession or control.

(3) The handover period is:

(a) the period of 10 business days beginning on the day after the new administrator is appointed; or

(b) if another period is agreed between the former administrator and the new administrator—that other period.

(4) The former administrator may take a copy of any part of the books before transferring possession or control of them to the new administrator.

New administrator must accept the books

(5) The new administrator must take possession or accept control of any books relating to the external administration of the company.

New administrator must allow inspection etc.

(6) After possession or control of the books is transferred, the new administrator must allow the former administrator to inspect them at any reasonable time and take a copy of any part of the books.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2), (5) or (6); and

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 50 penalty units.

Lien against books not prejudiced

(8) If the new administrator is entitled to take possession or control of the books under this section:

(a) a person is not entitled, as against the new administrator, to claim a lien on the books; and

(b) such a lien is not otherwise prejudiced.

70‑31 Transfer of books to ASIC etc.

Transfer of books to ASIC

(1) If a person ceases to be the external administrator of a company, ASIC may, by written notice given to the person, require the person to:

(a) if the person has books relating to the external administration of the company in his or her possession or control—transfer possession or control of those books to ASIC within the period specified in the notice; or

(b) otherwise—notify ASIC, within the period and in the manner specified in the notice, that the person does not have books relating to the external administration of the company in the person’s possession or control.

Offence

(2) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 50 penalty units.

ASIC must transfer books to new external administrator

(3) If:

(a) possession or control of books relating to an external administration of a company is transferred to ASIC under this section; and

(b) the books are in ASIC’s possession or control; and

ASIC must, as soon as practicable, transfer possession or control of those books to the new administrator.

ASIC must transfer books to company

(4) If:

(a) possession or control of books relating to a company is transferred to ASIC under this section; and

(b) the books are in ASIC’s possession or control; and

ASIC must, as soon as practicable, transfer possession or control of those books to the company.

Lien against books not prejudiced

(5) If asic is entitled to take possession or control of the books under this section:

(a) a person is not entitled, as against ASIC, to claim a lien on the books; and

(b) such a lien is not otherwise prejudiced.

(6) If ASIC is required to give possession or control of the books to the new administrator under this section:

(a) a person is not entitled, as against the new administrator, to claim a lien on the books; and

(b) such a lien is not otherwise prejudiced.

Notice is not a legislative instrument

(7) A notice under subsection (1) is not a legislative instrument.

Retention period for books

(8) ASIC must retain all books of the company, and of the external administration of the company:

(a) that are relevant to affairs of the company; and

(b) possession or control of which is transferred to ASIC under this section; and

for a period (the retention period) of 2 years after the end of the external administration of the company.

Destruction of books at end of retention period

(9) ASIC may destroy the books at the end of the retention period.

Relationship with other laws

(10) Subsections (8) and (9) do not apply to the extent that ASIC is under an obligation to retain the books, or a part of the books, under another provision of this Act or under any other law.

70‑35 Retention and destruction of books

Retention period for books

(1) The last external administrator of a company must retain all books of the company, and of the external administration of the company, that:

(a) are relevant to affairs of the company; and

(b) are in the external administrator’s possession or control at the end of the external administration;

for a period (the retention period) of 5 years from the end of the external administration.

Exception—reasonable excuse

(2) Subsection (1) does not apply if the external administrator has a reasonable excuse.

Exception—consent of ASIC etc.

(3) Despite subsection (1), the books may be destroyed within the retention period:

(a) in the case of a members’ voluntary winding up—as the company by resolution directs; and

(b) in the case of a creditor’s voluntary winding up or a court‑ordered winding up:

(i) if there is a committee of inspection—as the committee directs; and

(ii) otherwise—as the creditors by resolution direct; and

if ASIC consents to the destruction.

Destruction of books at end of retention period

(4) The external administrator may destroy the books at the end of the retention period.

Offence

(5) A person commits an offence if:

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

(b) the person intentionally or recklessly fails to comply with the requirement.

Penalty: 50 penalty units.

Note: A defendant bears an evidential burden in relation to the matters in subsections (2) and (3) (see subsection 13.3(3) of the Criminal Code).

Relationship with other laws

(6) Subsections (3) and (4) do not apply to the extent that the external administrator is under an obligation to retain the books, or a part of the books, under another provision of this Act or under any other law.

70‑36 Books of company in external administration—evidence

If a company is in external administration, all books of the company, and of the external administrator of the company, that are relevant to affairs of the company at or after the start of the external administration are, as between the contributories of the company, prima facie evidence of the truth of all matters purporting to be recorded in those books.

Subdivision D—Giving information etc. to creditors and others

70‑40 Right of creditors to request information etc. from external administrator

(1) The creditors may by resolution request the external administrator of a company to:

(a) give information; or

(b) provide a report; or

to the creditors.

(2) The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(3) The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (1).

70‑45 Right of individual creditor to request information etc. from external administrator

(1) A creditor may request the external administrator of a company to:

(a) give information; or

(b) provide a report; or

to the creditor.

(2) The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

70‑46 Right of members to request information etc. from external administrator in a members’ voluntary winding up

(1) This section applies in relation to a members’ voluntary winding up.

(2) The members of the company may by resolution request the external administrator of the company to:

(a) give information; or

(b) provide a report; or

to the members.

(3) The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

(4) The Insolvency Practice Rules may prescribe circumstances in which it is, or is not, reasonable for an external administrator of a company to comply with a request of a kind mentioned in subsection (2).

70‑47 Right of individual member to request information etc. from external administrator in a members’ voluntary winding up

(1) This section applies in relation to a members’ voluntary winding up.

(2) A member of the company may request the external administrator of a company to:

(a) give information; or

(b) provide a report; or

to the member.

(3) The external administrator must comply with the request unless:

(a) the information, report or document is not relevant to the external administration of the company; or

(b) the external administrator would breach his or her duties in relation to the external administration of the company if the external administrator complied with the request; or

70‑50 Reporting to creditors and members

(1) The Insolvency Practice Rules may provide for and in relation to the obligations of external administrators of companies:

(a) to give information; and

(b) to provide reports; and

to creditors or members.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) other circumstances in which the external administrator of a company must give information, provide a report or produce a document to a creditor or member; and

(b) the manner and form in which information is to be given, a report provided or a document produced; and

(d) who is to bear the cost of giving information, providing a report or producing a document.

(3) The Insolvency Practice Rules may:

(a) make different provision in relation to different kinds of external administration; and

(b) provide that specified requirements imposed under the Insolvency Practice Rules may be replaced or modified, by resolution, by:

(i) the creditors; or

(ii) the members; or

(iii) if there is a committee of inspection—the committee.

Subdivision E—Other requests for information etc.

70‑55 Commonwealth may request information etc.

Application of this section

(1) This section applies if either:

(a) a former employee of a company under external administration has made a claim for financial assistance from the Commonwealth in relation to unpaid employment entitlements; or

(b) the Commonwealth considers that such a claim is likely to be made.

Commonwealth may request information etc.

(2) The Commonwealth may request the external administrator of the company to provide specified information, reports or documents in relation to the external administration.

(3) The external administrator must comply with the request.

(4) The Insolvency Practice Rules may provide for and in relation to who is to bear the cost of providing the information, reports or documents.

Subdivision F—Reporting to ASIC

70‑60 Insolvency Practice Rules may provide for reporting to ASIC

(1) The Insolvency Practice Rules may provide for and in relation to the obligations of an external administrator of a company:

(a) to give information; and

(b) to provide reports; and

to ASIC.

(2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to:

(a) the manner and form in which information is to be given, a report provided or a document produced; and

(b) the timeframes in which information is to be given, a report provided or a document produced; and

(3) The Insolvency Practice Rules may make different provision in relation to different kinds of external administration.

Note: A failure to give information, provide a report or produce a document to ASIC in accordance with the Insolvency Practice Rules may lead to disciplinary action under Subdivision B of Division 40 of Part 2 of this Schedule.

Subdivision G—External administrator may be compelled to comply with requests for information etc.

70‑65 Application of this Subdivision

(1) This Subdivision applies if the external administrator of a company refuses a request made by a person under:

(a) Subdivision D; or

(b) a rule made under section 70‑50;

(d) section 80‑40;

to give information, provide a report or produce a document.

(2) In this Subdivision:

(a) the information, report or document is referred to as the relevant material; and

(b) the request is referred to as the request for relevant material; and

(c) giving the information, providing the report or producing the document is referred to as giving the relevant material.

70‑70 ASIC may direct external administrator to comply with the request for relevant material

(1) ASIC may, in writing, direct the external administrator to give all or part of the relevant material to the person or persons who made the request for the relevant material within 5 business days after the direction is given.

(2) A direction under subsection (1) is not a legislative instrument.

70‑75 ASIC must notify external administrator before giving a direction under section 70‑70

(1) Before giving the external administrator a direction under section 70‑70, ASIC must give the external administrator notice in writing:

(a) stating that ASIC proposes to give the external administrator a direction under that section; and

(b) identifying:

(i) the relevant material, or the part of the relevant material, that ASIC proposes to direct be given; and

(ii) the person or persons to whom ASIC proposes to direct that the relevant material, or that part of the relevant material, be given; and

(c) inviting the external administrator to make a written submission to ASIC within 10 business days after the notice is given, stating:

(i) whether the external administrator has any objection to giving the relevant material, or that part of the relevant material, to a person or persons as proposed; and

(ii) if the external administrator has such an objection—the reasons for that objection.

(2) If the external administrator objects to giving the relevant material, or part of the relevant material, to a person, ASIC must take into account the reasons for that objection when deciding whether to direct that the relevant material, or that part of the relevant material, be given to the person.

(3) A notice under subsection (1) is not a legislative instrument.

70‑80 ASIC must not direct external administrator to give the relevant material if external administrator entitled not to comply with the request

ASIC must not give a direction under section 70‑70 to give the relevant material, or part of the relevant material, to a person if ASIC is satisfied that the external administrator was entitled, under a provision of this Act or any other law, not to comply with the request for the relevant material, or that part of the relevant material, to the person.

70‑85 ASIC may impose conditions on use of the relevant material

ASIC may, by notice, impose conditions

(1) ASIC may, by notice in writing to the person or persons to whom the relevant material is to be given, impose conditions on the use and disclosure of the relevant material, or part of the relevant material, by the person or persons.

Offence

(2) A person commits an offence if:

(a) ASIC directs that the relevant material, or part of the relevant material, be given to the person; and

(b) ASIC has given the person notice under subsection