Federal Register of Legislation - Australian Government

Primary content

A Bill for an Act to amend the law relating to bankruptcy, and for related purposes
For authoritative information on the progress of bills and on amendments proposed to them, please see the House of Representatives Votes and Proceedings, and the Journals of the Senate as available on the Parliament House website.
Introduced HR 07 Jun 2001

Bankruptcy Legislation Amendment Bill 2001
First Reading

1998-1999-2000-2001

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Bankruptcy Legislation Amendment Bill 2001

No. , 2001

(Attorney-General)

A Bill for an Act to amend the law relating to bankruptcy, and for related purposes

ISBN: 0642 458944

Contents

Part 1--Amendments 3

Bankruptcy Act 1966 3

Part 2--Transitional provisions 53

A Bill for an Act to amend the law relating to bankruptcy, and for related purposes

The Parliament of Australia enacts:

1 Short title This Act may be cited as the Bankruptcy Legislation Amendment Act 2001.

2 Commencement (1) Subject to this section, this Act commences on a day to be fixed by Proclamation.

(2) Subject to subsection (3), if this Act does not commence under subsection (1) within the period of 6 months beginning on the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period.

(3) Items 41, 61, 125 and 153 (the deferred items) of Schedule 1 commence as follows:

(a) if Parts 4 and 10 of the Administrative Review Tribunal Act 2001 have not commenced before the day that applies under subsections (1) and (2) of this section--the deferred items commence immediately after the commencement of Parts 4 and 10 of the Administrative Review Tribunal Act 2001;

(b) otherwise--the deferred items commence immediately after the commencement of the remaining items of Schedule 1.

3 Schedule(s) Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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 Part 1--Amendments

Bankruptcy Act 1966

1 Subsection 5(1)

Insert:

administrator, in relation to a debt agreement, means the person authorised under paragraph 185C(2)(c) to deal with property under the agreement.

2 Subsection 5(1)

Insert:

cooling-off period, in relation to a debtor's petition, means the period of 30 days referred to in subsection 55(4B) or 57(5A), as the case requires.

3 Subsection 5(1) (definition of debtor's petition)

Omit "section 56", substitute "section 56A".

4 Subsection 5(1) (definition of declaration of intention)

Repeal the definition.

5 Subsection 5(1) (definition of declared debtor)

Repeal the definition.

6 Subsection 5(1) (definition of enforcement process)

Repeal the definition.

7 Subsection 5(1) (definition of frozen debt)

Repeal the definition.

8 Subsection 5(1)

Insert:

ITSA means the Insolvency and Trustee Service Australia, which is established as an Executive Agency under section 65 of the Public

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Service Act 1999
.

9 Subsection 5(1)

Insert:

offence against this Act includes an offence against section 137.1 or 137.2 of the Criminal Code, being an offence that relates to this Act.

10 Subsection 5(1)

Insert:

officer of ITSA means an APS employee in ITSA, and includes the Inspector-General.

11 Subsection 5(1) (definition of stay period)

Repeal the definition.

12 Subsection 5AA(1) (table item 3)

After "section 50", insert ", 55B or 57AB".

13 Subsection 11(4)

Omit "officer of the Department", substitute "officer of ITSA".

14 Paragraph 12(1)(b)

After "conduct of a trustee", insert "(including a controlling trustee)".

15 Subparagraph 12(1)(b)(v)

After "subsection 50(1)", insert "or section 55B or 57AB".

16 After paragraph 12(1)(ba)

Insert:

(bb) may make such inquiries and investigations as the Inspector-General thinks fit with respect to any conduct of an administrator that relates to a debt agreement; and

17 Subsection 15(4)

Omit "officer of the Department", substitute "officer of ITSA".

18 Section 16

Omit "Secretary to the Department", substitute "Minister".

19 Subsections 17(1) to (6)

Repeal the subsections, substitute:

(1) The Minister may appoint a person to act as Inspector-General:

(a) during a vacancy in the office of Inspector-General; or

(b) during any period, or during all periods, when the Inspector-General is absent from duty or from Australia or is, for any other reason, unable to perform the functions of his or her office.

(2) The Inspector-General may appoint a person to act as Official Receiver:

(a) during a vacancy in the office of Official Receiver; or

(b) during any period, or during all periods, when the Official Receiver is absent from duty or from Australia or is, for any other reason, unable to perform the functions of his or her office.

20 Subsection 17(7)

Omit "subsection (1)", substitute "this section".

21 Paragraph 18A(2)(b)

After "section 50", insert ", 55B or 57AB".

22 Paragraph 19(1)(i)

After "referring to", insert "the Inspector-General or to".

23 Subsection 19AA(1)

Omit "A registered trustee who is the trustee", substitute "The trustee".

24 Subsection 19AA(2)

Repeal the subsection.

25 Paragraph 20B(8)(a)

After "section 50", insert ", 55B or 57AB".

26 After section 33

Insert:

33A Alteration of filing date for statement of affairs (1) This section applies to a statement of affairs that was filed for the purposes of section 54, 55, 56B, 56F or 57 by a bankrupt, or by a person who later became a bankrupt.

(2) If the Court is satisfied that the person believed, on reasonable grounds, that the statement had already been filed at a time before it was actually filed, the Court may order that the statement is to be treated as having been filed at a time before it was actually filed.

(3) The Court cannot make an order that would result in the person being discharged from bankruptcy earlier than 30 days after the order is made.

(4) In this section:

filed includes presented, lodged or given.

27 Paragraph 40(1)(da)

Repeal the paragraph.

28 After paragraph 40(1)(d)

Insert:

(daa) if the debtor presents a debtor's petition under this Act;

29 Subsection 41(1)

Repeal the subsection, substitute:

(1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor:

(a) a final judgment or final order that:

(i) is of the kind described in paragraph 40(1)(g); and


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(ii) is for an amount of at least $2,000; or

(b) 2 or more final judgments or final orders that:

(i) are of the kind described in paragraph 40(1)(g); and

(ii) taken together are for an amount of at least $2,000.

30 Paragraph 41(3)(b)

Omit "its issue, execution of the judgment", substitute "the issue of the bankruptcy notice, execution of a judgment".

31 Paragraph 41(6A)(a)

Omit "the judgment", substitute "a judgment".

32 Paragraph 41(6C)(a)

Omit "the judgment", substitute "a judgment".

33 Paragraph 43(2)(a)

Omit "or in accordance with Division 3 of Part VII".

34 Subsection 50(1)

After "bankruptcy notice is issued", insert ", or a creditor's petition is presented,".

35 Paragraph 54(1)(a)

Omit "in the office of", substitute "with".

36 Subsection 54(4)

Omit "make copies of", substitute "obtain a copy of".

37 At the end of section 54

Add:

(5) A bankrupt against whom a sequestration order has been made may, without fee and either personally or by an agent:

(a) inspect the bankrupt's statement of affairs; or

(b) obtain a copy of, or take extracts from, the bankrupt's statement of affairs.

(6) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than the bankrupt or an agent of the bankrupt).

(7) The Official Receiver may refuse to allow a person access under this section to particular information in a bankrupt's statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.

38 Division 2A of Part IV

Repeal the Division.

39 After subsection 55(2)

Insert:

(2A) The Official Receiver must reject a debtor's petition unless, at the time when the petition is presented, the debtor:

(a) was personally present or ordinarily resident in Australia; or

(b) had a dwelling-house or place of business in Australia; or

(c) was carrying on business in Australia, either personally or by means of an agent or manager; or

(d) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.

40 After subsection 55(3)

Insert:

(3AA) The Official Receiver may reject a debtor's petition (the current petition) if:

(a) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that, if the debtor did not become a bankrupt, the debtor would be likely (either immediately or within a reasonable time) to be able to pay all the debts specified in the statement of affairs; and

(b) at least one of the following applies:

(i) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that the debtor is unwilling to pay one or more debts to a particular creditor or creditors, or is unwilling to pay creditors in general;

(ii) before the current petition was presented, the debtor previously became a bankrupt on a debtor's petition at least 3 times, or at least once in the period of 5 years before presentation of the current petition.

(3AB) The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA).

(3AC) The debtor may apply to the Administrative Appeals Tribunal for the review of a decision by the Official Receiver to reject a petition under subsection (3AA).

41 Subsection 55(3AC)

Omit "Administrative Appeals Tribunal", substitute "Administrative Review Tribunal".

42 Subsection 55(4)

Omit "subsection (3)", substitute "this section".

43 Subsection 55(4A)

Repeal the subsection, substitute:

(4A) Where the Official Receiver accepts a debtor's petition presented under this section, the Official Receiver must endorse the petition accordingly.

(4B) The petition is subject to a cooling-off period of 30 days

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starting on the day after the day on which the petition is endorsed, unless:

(a) any of the following things happened to the debtor (or persons including the debtor) in the 12 months before the petition was presented:

(i) a debtor's petition under this section or section 57 was withdrawn;

(ii) a composition or scheme was annulled under subsection 75(4);

(iii) a debt agreement proposal was rejected by creditors;

(iv) a debt agreement was terminated under section 185P or 185Q;

(v) creditors passed a resolution as mentioned in paragraph 204(1)(a) or (d);

(vi) a deed or composition was declared void under paragraph 222(2)(a);

(vii) a deed was terminated under section 234B, 235 or 236;

(viii) a composition was set aside under section 239;

(ix) a composition was terminated under section 240B, 241 or 242; or

(b) a creditor's petition is pending against the debtor (whether or not the creditor's petition also relates to other persons); or

(c) the following conditions are satisfied:

(i) the substantive hearing of a legal proceeding against the debtor is scheduled for a day that is less than 60 days after the day on which the debtor's petition is presented;

(ii) the legal proceeding is for recovery of an amount that would be a provable debt if the debtor becomes bankrupt as a result of presenting the petition;

(iii) the proceeding involves a claim against the debtor for a debt of at least $2,000 or a claim against the debtor for unliquidated damages; or

(d) the debtor's statement of affairs indicates that the debtor carried on a business (either alone or together with other persons) at any time during the period of 30 days before the petition was presented; or

(e) the Official Receiver, at the time of endorsing the petition, determined under subsection (4C) that the cooling-off period does not apply.

(4C) If the Official Receiver believes on reasonable grounds that having the cooling-off period would be likely to result in a reduction in the dividend to creditors, then the Official Receiver may, at the time of accepting the petition, determine that the cooling-off period does not apply.

(4D) If the cooling-off period does not apply, then the debtor becomes a bankrupt (by force of this section and by virtue of presenting the petition) at the beginning of the day on which the petition is endorsed.

(4E) If the cooling-off period applies, then the debtor may, by notice in the approved form given to the Official Receiver, withdraw the petition at any time during the cooling-off period. However, the debtor cannot withdraw the petition, without the leave of the Court, after a creditor has made an application under section 55B.

(4F) If the debtor withdraws the petition, then the debtor does not become a bankrupt by virtue of presenting the petition.

(4G) If the cooling-off period applies but the debtor does not withdraw the petition, then the debtor becomes a bankrupt (by force of this section and by virtue of presenting the petition) at the beginning of the day after the end of the cooling-off period.

44 After subsection 55(6A)

Insert:

(6B) A debtor is not entitled, except with the leave of the Court, to present a debtor's petition under this section:

(a) during a cooling-off period that applies to a previous petition that was presented by the debtor under this section; or

(b) during a cooling-off period that applies to a petition that was presented by the debtor under section 57.

45 Subsection 55(7)

Omit "or (6A)", substitute ", (6A) or (6B)".

46 Paragraph 55(8)(a)

Omit "or in accordance with Division 3 of Part VII".

47 Subsection 55(9)

Omit "make copies of", substitute "obtain a copy of".

48 At the end of section 55

Add:

(10) A bankrupt who has become a bankrupt by force of this section may, without fee and either personally or by an agent:

(a) inspect the bankrupt's statement of affairs; and

(b) obtain a copy of, or make extracts from, the bankrupt's statement of affairs.

(11) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person other than the bankrupt (or an agent of the bankrupt).

(12) The Official Receiver may refuse to allow a person access under this section to particular information in a bankrupt's statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.

49 After section 55

Insert:


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55A Protection of debtor during cooling-off period (1) If a cooling-off period applies to a debtor's petition that is accepted under section 55, then the following provisions have effect until the end of the cooling-off period or until the debtor withdraws the petition (whichever first happens):

(a) a creditor cannot apply for enforcement of, or enforce, a remedy against the debtor's person or property in respect of a frozen debt;

(b) a sheriff must not take action, or further action, to execute, or sell property under, any process issued by a court to enforce payment of a frozen debt owed by the debtor;

(c) a person who is entitled under a law of the Commonwealth, or of a State or Territory of the Commonwealth, to retain or deduct money from money that is or will be owing or payable to the debtor must not retain or deduct money.

(2) This section does not prevent a creditor from:

(a) starting a legal proceeding in respect of a frozen debt; or

(b) taking a fresh step in such a proceeding (except to enforce a judgment).

(3) This section does not affect the right of a secured creditor to realise or otherwise deal with his or her security.

(4) In this section:

frozen debt means a debt that will be a provable debt if the debtor becomes a bankrupt as a result of presenting the petition.

55B Taking control of debtor's property during cooling-off period (1) At any time after a debtor's petition is accepted under section 55, but before the debtor becomes a bankrupt or withdraws the petition, the Court may:

(a) direct the Official Trustee or a specified registered trustee to take control of the debtor's property; and

(b) make any other orders in relation to the property.

(2) The Court may give a direction or make an order only if:

(a) a creditor has applied for the Court to make a direction; and

(b) the Court is satisfied that it is in the interests of the creditors to do so.

(3) If the Court directs a trustee to take control of the debtor's property, the Court must specify when the control is to end.

(4) Without limiting the generality of subsection (1), the Court may, at any time after giving a direction under subsection (1), summon the debtor, or an examinable person in relation to the debtor, for examination under this section in relation to the debtor.

(5) A summons to a person under subsection (4) must require the person to attend:

(a) at a specified place and at a specified time on a specified day; and

(b) before the Court, the Registrar or a magistrate, as specified in the summons;

to be examined on oath under this section about the debtor and the debtor's examinable affairs.

(6) A summons to a person under subsection (4) may require the person to produce, at the examination, books (including books of an associated entity of the debtor) that:

(a) are in the possession of the first-mentioned person; and

(b) relate to the debtor or to any of the debtor's examinable affairs.

(7) For the purpose of the examination under this section of a person summoned under subsection (4), subsections 81(2) to (17) apply, with any modifications prescribed by the regulations, as if:

(a) a sequestration order had been made against the debtor when the Court gave the direction under subsection (1) of this section; and

(b) the examination were being held under section 81; and

(c) a reference in those subsections to a creditor were a reference to a person who has a debt that would be provable in the debtor's bankruptcy if a sequestration order had been made as mentioned in paragraph (a) of this subsection.

50 At the end of subsection 56E(1)

Add "at the beginning of the day on which the petition was accepted by the Official Receiver".

51 At the end of subsection 56E(2)

Add "at the beginning of the day on which the petition was accepted by the Official Receiver".

52 Paragraph 56E(3)(a)

Omit "or in accordance with Division 3 of Part VII".

53 Subsection 56F(3)

Omit "if the trustee is a registered trustee".

54 Subsection 56G(1)

Omit "copy", substitute "obtain a copy of".

55 Subsection 56G(2)

Omit "copying", substitute "obtaining a copy of".

56 After paragraph 56G(2)(a)

Insert:

(aa) the person is a member of the partnership who became a bankrupt as a

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result of the petition; or

57 Paragraph 56G(2)(b)

After "paragraph (a)", insert "or (aa)".

58 At the end of section 56G

Add:

(3) A person who has become a bankrupt by force of section 56E may, without fee and either personally or by an agent:

(a) inspect any statement of affairs that accompanied the petition; and

(b) obtain a copy of, or make extracts from, any statement of affairs that accompanied the petition.

(4) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than a member of the partnership who became a bankrupt as a result of the petition or an agent of such a member).

(5) The Official Receiver may refuse to allow a person access under this section to particular information in a statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.

59 After subsection 57(2)

Insert:

(2A) The Official Receiver must reject a debtor's petition unless, at the time when the petition is presented, each petitioning debtor:

(a) was personally present or ordinarily resident in Australia; or

(b) had a dwelling-house or place of business in Australia; or

(c) was carrying on business in Australia, either personally or by means of an agent or manager; or

(d) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.

60 After subsection 57(3)

Insert:

(3AA) The Official Receiver may reject a debtor's petition (the current petition) if the following conditions are satisfied for at least one of the petitioning debtors:

(a) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that, if the debtor did not become a bankrupt, the debtor would be likely (either immediately or within a reasonable time) to be able to pay all the debts specified in the debtor's statement of affairs;

(b) at least one of the following applies:

(i) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that the debtor is unwilling to pay one or more debts to a particular creditor or creditors, or is unwilling to pay creditors in general;

(ii) before the current petition was presented, the debtor previously became a bankrupt on a debtor's petition at least 3 times, or at least once in the period of 5 years before presentation of the current petition.

(3AB) The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA).

(3AC) An application may be made to the Administrative Appeals Tribunal for the review of a decision by the Official Receiver to reject a petition under subsection (3AA).

61 Subsection 57(3AC)

Omit "Administrative Appeals Tribunal", substitute "Administrative Review Tribunal".

62 Subsection 57(5)

Repeal the subsection, substitute:

(5) Where the Official Receiver accepts a petition presented under this section, the Official Receiver must endorse the petition accordingly.

(5A) The petition is subject to a cooling-off period of 30 days starting on the day after the day on which the petition is endorsed, unless:

(a) any of the following things happened to any of the petitioning debtors (or persons including any of the petitioning debtors) in the 12 months before the petition was presented:

(i) a debtor's petition under section 55 or this section was withdrawn;

(ii) a composition or scheme was annulled under subsection 75(4);

(iii) a debt agreement proposal was rejected by creditors;

(iv) a debt agreement was terminated under section 185P or 185Q;

(v) creditors passed a resolution as mentioned in paragraph 204(1)(a) or (d);

(vi) a deed or composition was declared void under paragraph 222(2)(a);

(vii) a deed was terminated under section 234B, 235 or 236;

(viii) a composition was set aside under section 239;

(ix) a composition was terminated under section 240B, 241 or 242; or

(b) a creditor's petition is pending against any petitioning debtor (whether or not the creditor's petition also relates to other persons); or

(c) the following conditions are satisfied:

(i) the substantive hearing of a legal proceeding against any petitioning debtor is scheduled for a day that is less than 60 days after the day on which the debtor's petition is presented;


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(ii) the legal proceeding is for recovery of an amount that would be a provable debt if that debtor becomes bankrupt as a result of presenting the petition;

(iii) the proceeding involves a claim against that debtor for a debt of at least $2,000 or a claim against that debtor for unliquidated damages; or

(d) any of the statements of affairs indicates that any petitioning debtor carried on a business (either alone or together with other persons) at any time during the period of 30 days before the petition was presented; or

(e) the Official Receiver, at the time of endorsing the petition, determined under subsection (5B) that the cooling-off period does not apply.

(5B) If the Official Receiver believes on reasonable grounds that having the cooling-off period would be likely to result in a reduction in the dividend to creditors, then the Official Receiver may, at the time of accepting the petition, determine that the cooling-off period does not apply.

(5C) If the cooling-off period does not apply, then each of the petitioning debtors becomes a bankrupt (by force of this section and by virtue of presenting the petition) at the beginning of the day on which the petition is endorsed.

(5D) If the cooling-off period applies, then any petitioning debtor may, by notice in the approved form given to the Official Receiver, withdraw from the petition at any time during the cooling-off period. However, a debtor cannot withdraw from the petition, without the leave of the Court, after a creditor has made an application under section 57AB.

(5E) If a debtor withdraws from the petition, then that debtor does not become a bankrupt by virtue of presenting the petition.

(5F) If the cooling-off period applies, then any petitioning debtor who does not withdraw from the petition becomes a bankrupt (by force of this section and by virtue of presenting the petition) at the beginning of the day after the end of the cooling-off period.

63 After subsection 57(8)

Insert:

(8A) A debtor is not entitled, except with the leave of the Court, to join in presenting a petition under this section:

(a) during a cooling-off period that applies to a previous petition that was presented by the debtor under this section; or

(b) during a cooling-off period that applies to a petition that was presented by the debtor under section 55.

64 Subsection 57(9)

Omit "or (8)", substitute ", (8) or (8A)".

65 Paragraph 57(10)(a)

Omit "or in accordance with Division 3 of Part VII".

66 Subsection 57(11)

Omit "make copies of", substitute "obtain a copy of".

67 At the end of section 57

Add:

(12) A bankrupt who has become a bankrupt by force of this section may, without fee and either personally or by an agent:

(a) inspect any statement of affairs that accompanied the petition; and

(b) obtain a copy of, or make extracts from, any statement of affairs that accompanied the petition.

(13) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than a petitioning debtor or an agent of a petitioning debtor).

(14) The Official Receiver may refuse to allow a person access under this section to particular information in a statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.

68 After section 57

Insert:

57AA Protection of petitioning debtor during cooling-off period (1) If a cooling-off period applies to a debtor's petition that is accepted under section 57, then the following provisions have effect in relation to each petitioning debtor until the end of the cooling-off period or until the debtor withdraws the petition (whichever first happens):

(a) a creditor cannot apply for enforcement of, or enforce, a remedy against the debtor's person or property in respect of a frozen debt;

(b) a sheriff must not take action, or further action, to execute, or sell property under, any process issued by a court to enforce payment of a frozen debt owed by the debtor;

(c) a person who is entitled under a law of the Commonwealth, or of a State or Territory of the Commonwealth, to retain or deduct money from money that is or will be owing or payable to the debtor must not retain or deduct money.

(2) This section does not prevent a creditor from:

(a) starting a legal proceeding in respect of a frozen debt; or

(b) taking a fresh step in such a proceeding (except to enforce a judgment).

(3) This section does not affect the right of a secured creditor to realise or

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otherwise deal with his or her security.

(4) In this section:

frozen debt means a debt that will be a provable debt if the debtor becomes a bankrupt as a result of presenting the petition.

57AB Taking control of joint debtor's property during cooling-off period (1) At any time after a debtor's petition is accepted under section 57, but before a petitioning debtor becomes a bankrupt or withdraws from the petition, the Court may:

(a) direct the Official Trustee or a specified registered trustee to take control of the debtor's property; and

(b) make any other orders in relation to the property.

(2) The Court may give a direction or make an order only if:

(a) a creditor has applied for the Court to make a direction; and

(b) the Court is satisfied that it is in the interests of the creditors to do so.

(3) If the Court directs a trustee to take control of the debtor's property, the Court must specify when the control is to end.

(4) Without limiting the generality of subsection (1), the Court may, at any time after giving a direction under subsection (1), summon the debtor, or an examinable person in relation to the debtor, for examination under this section in relation to the debtor.

(5) A summons to a person under subsection (4) must require the person to attend:

(a) at a specified place and at a specified time on a specified day; and

(b) before the Court, the Registrar or a magistrate, as specified in the summons;

to be examined on oath under this section about the debtor and the debtor's examinable affairs.

(6) A summons to a person under subsection (4) may require the person to produce, at the examination, books (including books of an associated entity of the debtor) that:

(a) are in the possession of the first-mentioned person; and

(b) relate to the debtor or to any of the debtor's examinable affairs.

(7) For the purpose of the examination under this section of a person summoned under subsection (4), subsections 81(2) to (17), apply, with any modifications prescribed by the regulations, as if:

(a) a sequestration order had been made against the debtor when the Court gave the direction under subsection (1) of this section; and

(b) the examination were being held under section 81; and

(c) a reference in those subsections to a creditor were a reference to a person who has a debt that would be provable in the debtor's bankruptcy if a sequestration order had been made as mentioned in paragraph (a) of this subsection.

69 Section 57A

Repeal the section.

70 At the end of section 64

Add:

(3) When convening a meeting, the trustee must consider whether the proposed time and place is convenient for the creditors.

71 At the end of subsection 64M(1)

Add:

Note: Under subsection 64ZB(3), a proxy or attorney may be allowed to vote even though the appointing instrument is lodged after the announcement.

72 Subsection 64N(2)

Repeal the subsection, substitute:

(2) A quorum is constituted by:

(a) the presence in person of the trustee (or the trustee's representative); and

(b) a creditor, or a proxy or attorney of a creditor, participating in person or by telephone.

Note: A meeting requires at least 2 persons. Therefore the person covered by paragraph (2)(a) cannot also be the proxy or attorney of the creditor covered by paragraph (2)(b).

73 After subsection 64U(5)

Insert:

(5A) The statement under subsection (3) must also include:

(a) an estimate of the total amount of the trustee's remuneration; and

(b) an explanation of the likely impact of that remuneration on the dividends (if any) to creditors.

74 Paragraph 64Z(5)(d)

Omit "officer of the Department", substitute "officer of ITSA".

75 Subsection 64Z(9)

Omit "holds a security in respect of that debt", substitute "is a secured creditor".

76 Subsection 64ZA(5)

Omit "holds a security in respect of a debt", substitute "is a secured creditor".

77 Subsection 64ZB(3)


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Repeal the subsection, substitute:

(3) A person claiming to be the proxy of a creditor is not entitled to vote as proxy unless the instrument of appointment has been lodged with the President (or with the trustee, before the President was elected), either before or after the announcement is made under section 64M about the appointment of proxies and attorneys.

(3A) If an instrument of appointment of a proxy is lodged with the President in substitution for another instrument with an earlier date, then the later instrument commences to have effect (from the time it is lodged with the President) in substitution for the earlier instrument.

78 After section 64ZB

Insert:

64ZBA Creditors' resolution without meeting (1) The trustee may at any time put a proposal to the creditors by giving a notice under this section.

(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

(c) be given to each creditor who would be entitled under section 64A to receive notice of a meeting of creditors; 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 time by which replies must be received by the trustee (in order to be taken into account).

(3) If, within the time specified in the notice:

(a) at least 1 creditor votes in writing; and

(b) no other creditor objects in writing to the proposal being resolved without a meeting of creditors;

then the following provisions have effect:

(c) if the proposal requires a special resolution and there is a Yes vote by a majority in number, and at least 75% in value, of those who voted within the required time--the proposal is taken to have been passed by a special resolution of creditors at a meeting;

(d) if the proposal does not require a special resolution and there is a Yes vote by a majority in value of those who voted within the required time--the proposal is taken to have been passed by a resolution of creditors at a meeting;

(e) in any other case--the proposal is taken not to have been passed.

(4) A certificate signed by the trustee stating any matter relating to a proposal under this section is prima facie evidence of the matter.

79 After subsection 73(2A)

Insert:

(2B) The trustee may refuse to call the meeting if the proposal does not make adequate provision for payment to the trustee of accrued fees that:

(a) are owing to the trustee (at the time the proposal is lodged) in respect of the administration of the bankrupt's estate, but are not able to be taken out of the bankrupt's estate; and

(b) have been approved by the creditors before the proposal is considered.

80 At the end of subsection 73(3)

Add ", but not in a way that reduces any provision for payment to the trustee of fees referred to in subsection (2B)".

81 After section 73

Insert:

73A Trustee may require surety for cost of meeting (1) Before calling a meeting under section 73, the trustee may require the bankrupt to lodge with the trustee an amount that is sufficient to cover:

(a) the estimated costs that will be incurred by the trustee in arranging and holding the meeting; and

(b) the estimated fee that will (if approved by the creditors) be payable to the trustee in respect of the meeting.

(2) If the amount lodged by the bankrupt is more than the actual costs and fee, then the trustee must refund the excess to the bankrupt.

82 After section 74

Insert:

74A Variation of composition or scheme of arrangement (1) This section applies to a composition or scheme of arrangement that has been accepted in accordance with this Division.

Variation by special resolution of creditors

(2) The creditors, with the written consent of the debtor, may vary the composition or scheme by special resolution at a meeting called for the purpose.


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Variation proposal by trustee

(3) The trustee may, in writing, propose a variation of the composition or scheme. The trustee cannot propose a variation without the written consent of the debtor.

(4) The trustee must give notice of the proposed variation to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 76A) to receive notice of a meeting of creditors.

(5) The notice must:

(a) include a statement of the reasons for the variation and the likely impact it will have on creditors (if it takes effect); and

(b) specify a proposed date of effect for the variation (at least 14 days after the notice is given); and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the variation taking effect without there being a meeting of creditors.

(6) If no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date, then the proposed variation takes effect on the date specified in the notice.

(7) A certificate signed by the trustee stating any matter relating to a proposed variation under this section is prima facie evidence of the matter.

83 At the end of subparagraph 77(a)(ii)

Add "and".

84 At the end of paragraph 77(b)

Add "and".

85 At the end of paragraph 77(ba)

Add "and".

86 After paragraph 77(ba)

Insert:

(bb) as soon as practicable after becoming a bankrupt, advise the trustee of any material change that occurred between the time the bankrupt lodged his or her statement of affairs and the time the bankrupt became a bankrupt; and

(bc) if a material change occurred later, advise the trustee of that change as soon as practicable after the change occurs; and

87 At the end of section 77

Add:

(2) In this section:

material change means a change in the particulars contained in the bankrupt's statement of affairs, where the change could reasonably be expected to be relevant to the administration of the bankrupt's estate.

88 At the end of paragraph 77(c)

Add "and".

89 At the end of paragraph 77(d)

Add "and".

90 At the end of paragraph 77(e)

Add "and".

91 Subsection 77A(1)

Omit "person (in this section called the investigator)", substitute "trustee".

Note: The heading to section 77A is altered by omitting "or Official Receiver".

92 Subsection 77A(2)

Omit "investigator" (wherever occurring), substitute "a trustee".

93 Paragraph 77A(2)(e)

Omit "investigator's", substitute "trustee's".

94 Subsection 77A(3)

Omit "investigator" (wherever occurring), substitute "trustee".

95 Section 77B

Repeal the section.

96 Subsection 80(1)

Omit ", or in any other particulars that the bankrupt was required to set out in the bankrupt's statement of affairs under subparagraph 6A(2)(b)(i)," substitute "or in the address of the bankrupt's principal place of residence".

97 After subsection 82(2)

Insert:

(2A) In the case of a bankruptcy that results from the presentation of a debtor's petition, a debt or liability is not provable if it is incurred after the time when the petition was accepted by the Official Receiver.

98 At the end of subsection 82(5)

Add "not later than 28 days after the day on which the person is notified of the estimate".

99 Section 99

Repeal the section.

100 Section 103

Repeal the section, substitute:

103 Debts to be rounded down to nearest dollar If the amount of a debt includes cents, the cents must be disregarded in

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admitting proof of the debt.

101 Subsection 104(1)

Repeal the subsection, substitute:

(1) A creditor, or the bankrupt, may apply to the Court for review of a decision of the trustee under subsection 102(1), (3) or (4) in respect of a proof of debt.

102 After subsection 109(1A)

Insert:

(1B) The reference in paragraph (1)(e) to amounts due in respect of an employee of the bankrupt includes a reference to amounts due as contributions to a fund for the purposes of making provision for, or obtaining, superannuation benefits for the employee, or for dependants of the employee.

103 Subsection 109(7B)

Omit "officer of the Department", substitute "officer of ITSA".

104 Subsection 115(1)

Repeal the subsection, substitute:

(1) If a person becomes a bankrupt on a creditor's petition and subsection (1A) does not apply, then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the creditor's petition was presented.

(1A) If:

(a) a person becomes a bankrupt on a creditor's petition that was based on breach of a bankruptcy notice; and

(b) the time for compliance with the notice was extended under subsection 41(7); and

(c) the Court making the sequestration order considers that the application under subsection 41(7) was frivolous, vexatious or otherwise without substantial merit;

then the bankruptcy is taken to have relation back to, and to have commenced at, the time that would have applied under subsection (1) of this section if the time for compliance had not been extended.

(1B) If a person becomes a bankrupt because of a sequestration order made under Division 6 of Part IV or under Part X, then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the application for the sequestration order was made.

105 After paragraph 116(2)(b)

Insert:

(ba) personal property of the bankrupt that:

(i) has sentimental value for the bankrupt; and

(ii) is of a kind prescribed by the regulations; and

(iii) is identified by a special resolution passed by the creditors before the trustee realises the property;

106 After section 129

Insert:

129AA Time limit for realising property (1) This section applies only to:

(a) property (other than cash) that was disclosed in the bankrupt's statement of affairs; and

(b) after-acquired property (other than cash) that the bankrupt discloses in writing to the trustee within 14 days after the bankrupt becomes aware that the property devolved on, or was acquired by, the bankrupt.

In this subsection, cash includes amounts standing to the credit of a bank account or similar account.

(2) If any such property is still vested in the trustee immediately before the revesting time, then it becomes vested in the bankrupt at the revesting time by force of this section.

(3) Initially, the revesting time for property is:

(a) for property disclosed in the statement of affairs--the beginning of the day that is the sixth anniversary of the day on which the bankrupt is discharged from the bankruptcy; and

(b) for after-acquired property that is disclosed before the bankrupt is discharged from the bankruptcy--the beginning of the day that is the sixth anniversary of the day on which the bankrupt is discharged; and

(c) for after-acquired property that is disclosed after the bankrupt is discharged from the bankruptcy--the beginning of the day that is the sixth anniversary of the day on which the bankrupt disclosed the property to the trustee.

(4) If the trustee, before the current revesting time, gives the bankrupt a written notice (an extension notice) stating that a later revesting time applies to particular property, then that later time becomes the revesting time for that property.

(5) There is no limit on the number of extension notices that the trustee may give (either generally or in relation to particular property).

(6) The time specified in an extension notice must be either:


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(a) a specified time that is not more than 3 years after the current revesting time; or

(b) a time that is reckoned by reference to a specified event (for example, the death of a life tenant), but is not more than 3 years after the happening of that event.

(7) Any property that becomes vested in the bankrupt under this section thereupon ceases to be subject to section 127.

107 After paragraph 134(1)(a)

Insert:

(aa) accept, without terms or conditions, or subject to terms and conditions, a sum of money payable at a future time as the consideration or part of the consideration for the sale of any property of the bankrupt;

(ab) lease any property of the bankrupt;

(ac) divide among the creditors, in its existing form and according to its estimated value, property that, by reason of its peculiar nature or other special circumstances, cannot readily or advantageously be sold;

108 After paragraph 134(1)(i)

Insert:

(ia) refer any dispute to arbitration;

109 After paragraph 134(1)(m)

Insert:

(ma) make such allowance out of the estate as he or she thinks just to the bankrupt, the spouse of the bankrupt or the family of the bankrupt;

110 Section 135

Repeal the section.

111 Section 139K (definition of dependant)

Repeal the definition, substitute:

dependant, in relation to a bankrupt in relation to a contribution assessment period, means a person who satisfies all the following conditions:

(a) the person resides with the bankrupt;

(b) the person is wholly or partly dependent on the bankrupt for economic support;

(c) the income derived (or likely to be derived) by the person during the contribution assessment period is not more than the amount prescribed by the regulations for the purposes of this paragraph.

For the purposes of this definition, income has its ordinary meaning.

112 Section 139K

Insert:

income tax includes Medicare levy.

113 Section 139L (subparagraph (b)(ii) of the definition of income)

Repeal the subparagraph.

114 Subparagraph 139N(a)(i)

After "income tax", insert "(but not including any amount that is in respect of a provable debt)".

115 At the end of section 139N

Add:

(2) A refund is not taken into account under paragraph (1)(b) if it relates to a year of income that ended before the date of the bankruptcy.

(3) If a refund relates to a year of income that commenced before, but ended after, the date of the bankruptcy, then it is taken into account under paragraph (1)(b) only to the extent that the refund is attributable to the part of the year of income after the date of bankruptcy. For this purpose, the refund is apportioned on a time basis.

116 Section 139T

Repeal the section, substitute:

139T Determination of higher income threshold in cases of hardship (1) If:

(a) the trustee has made an assessment of a contribution that a bankrupt is liable to pay to the trustee for a contribution assessment period; and

(b) the bankrupt considers that, if required to pay that contribution, he or she will suffer hardship for a reason or reasons set out in subsection (2);

the bankrupt may apply in writing to the trustee for the making of a determination under this section for that period.

(2) The reasons are as follows:

(a) the bankrupt or a dependant of the bankrupt suffers from an illness or disability that requires on-going medical attention and the supply of medicines, and the bankrupt is required to meet a substantial proportion of the costs of that medical attention or those medicines from his or her income;

(b) the bankrupt is required to make payments from his or her income to meet the cost of child day-care to enable the bankrupt to continue in employment or other work;

(c) the bankrupt is living in rented accommodation that is not provided by:

(i) the Commonwealth, a State or a Territory; or

(ii) an authority of the Commonwealth, a State or a Territory; or


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(iii) a local government authority;

and the bankrupt is required to pay the cost of that accommodation wholly or mainly from his or her income;

(d) the bankrupt incurs substantial expense in travelling to and from the bankrupt's place of employment or other work, whether by public transport or otherwise;

(e) the spouse of the bankrupt, or another person residing with the bankrupt, who ordinarily contributes to the costs of maintaining the bankrupt's household has become unable to contribute to those costs because of unemployment, illness or injury;

(f) any other reason prescribed by the regulations.

(3) The trustee must not make a determination under this section unless the bankrupt provides satisfactory evidence of the bankrupt's income and expenses, and any other matters on which the bankrupt relies to establish the reasons for the application.

(4) The trustee must decide the application as soon as practicable, and in any event not later than 30 days, after the day on which the application is received.

(5) If the trustee does not make a decision on the application within that period of 30 days, the trustee is taken to have made a decision at the end of that period refusing the application.

(6) If the trustee is satisfied that the bankrupt will suffer hardship if required to pay the contribution, the trustee may determine that, for the purposes of the application of section 139S in relation to the bankrupt in respect of the contribution assessment period, the actual income threshold amount that was applicable in relation to the bankrupt when the assessment was made is taken to have been increased to such amount as the trustee determines.

(7) If the trustee is not satisfied that the bankrupt will suffer hardship if required to pay the contribution, the trustee must refuse the application.

(8) If the trustee makes a determination under subsection (6), the trustee must make such assessment under section 139W as is necessary to give effect to the determination.

(9) The trustee must give written notice to the bankrupt:

(a) setting out the trustee's decision on the application; and

(b) referring to the evidence or other material on which the decision was based; and

(c) giving the reasons for the decision.

(10) The notice must include a statement to the effect that the bankrupt may request the Inspector-General to review the decision.

(11) A contravention of subsection (10) in relation to a decision does not affect the validity of the decision.

(12) The trustee's decision under this section is reviewable under Subdivision G in the same way as an assessment made by the trustee.

117 After subparagraph 139U(1)(a)(i)

Insert:

(ia) setting out particulars of all the income that was derived by each dependant of the bankrupt during that contribution assessment period; and

118 At the end of paragraph 139U(1)(a)

Add:

(iii) indicating what income (if any) the bankrupt expects each dependant of the bankrupt to derive during the next contribution assessment period; and

119 Subsection 139U(2)

Omit "subparagraph (1)(a)(i)", substitute "subparagraphs (1)(a)(i) and (ia)".

120 At the end of subsection 139W(4)

Add "and informing the bankrupt about the possibility of a variation under section 139T".

121 After section 139W

Insert:

139WA No time limit on making assessment (1) An assessment under section 139W (including a fresh assessment referred to in subsection 139W(2)) for a contribution assessment period may be made at any time, including:

(a) a time after the end of the contribution assessment period; or

(b) a time after the bankrupt is discharged.

(2) For the purpose of applying subsection (1), a reference in this Division to a bankrupt includes a reference to a former bankrupt.

122 At the end of paragraph 139ZA(3)(a)

Add "not later than 60 days after the day on which the bankrupt is notified of the trustee's assessment".

123 Subsection 139ZE(1)

Omit ", and, if the trustee is a registered trustee,", substitute "and".

124 Section 139ZF

Repeal the section, substitute:

139ZF Review of assessment decisions

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An application may be made to the Administrative Appeals Tribunal for the review of:

(a) a decision of the Inspector-General on the review of a decision by a trustee to make an assessment; or

(b) a decision by the Inspector-General refusing a request to review a decision by a trustee to make an assessment.

125 Section 139ZF

Omit "Administrative Appeals Tribunal", substitute "Administrative Review Tribunal".

126 Paragraph 139ZG(2)(c)

Omit "or of the decision of the trustee".

127 Division 4C of Part VI

Repeal the Division.

128 Subsection 145(3)

Omit "in the prescribed manner", substitute "in the manner prescribed by the regulations".

129 Subsection 149(1)

Omit "unless sooner discharged in accordance with Division 3,".

130 Subparagraph 149A(2)(a)(i)

Omit "paragraph 149D(1)(a), (b), (c), (d), (e), (f), (g) or (h)", substitute "paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma)".

131 Subparagraph 149A(2)(b)(ii)

Omit "date from which", substitute "date on which".

132 Subparagraphs 149A(3)(b)(ii) and (iii)

Repeal the subparagraphs, substitute:

(ii) no other objection against the discharge of the bankrupt is in effect;

133 Subsection 149B(1)

Omit ", or the Official Receiver may file such a notice on the Official Receiver's own initiative".

134 Subsection 149C(1)

Omit "or Official Receiver" (wherever occurring).

135 After subsection 149C(1)

Insert:

(1A) Paragraph (1)(c) does not apply to a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma).

136 After paragraph 149D(1)(a)

Insert:

(aa) any transfer is void against the trustee in the bankruptcy because of section 120 or 122;

(ab) any transfer is void against the trustee in the bankruptcy because of section 121;

137 After paragraph 149D(1)(d)

Insert:

(da) after the date of the bankruptcy, the bankrupt intentionally provided false or misleading information to the trustee;

138 After paragraph 149D(1)(h)

Insert:

(ha) the bankrupt intentionally failed to disclose to the trustee a liability of the bankrupt that existed at the date of the bankruptcy;

139 Paragraph 149D(1)(j)

Before "subsection 80(1)", insert "paragraph 77(1)(bb) or (bc) or".

140 After paragraph 149D(1)(m)

Insert:

(ma) the bankrupt intentionally failed to disclose to the trustee the bankrupt's beneficial interest in any property;

141 Subsection 149F(1)

Repeal the subsection, substitute:

(1) As soon as practicable after a notice of objection is filed by the trustee, the trustee must give a copy of the notice to the bankrupt together with a notice to the effect that the bankrupt may request the Inspector-General to review the decision of the trustee to file the notice of objection.

142 Subsection 149H(2)

Repeal the subsection.

Note: The heading to section 149H is altered by omitting "or Official Receiver".

143 Subsection 149H(3)

Omit "or (2)".

144 Subsection 149J(2)

Repeal the subsection.

145 Subsection 149J(3)

Omit "or (2)".

146 Subsection 149K(1)

Omit "or Official Receiver".

147 At the end of paragraph 149K(3)(a)

Add "not later than 60 days after the day on which the bankrupt is notified of the trustee's objection".

148 Paragraph 149M(1)(b)

Omit "or Official Receiver".

149 After subsection 149N(1)

Insert:


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(1A) An objection must not be cancelled under subsection (1) if:

(a) the objection specifies at least one special ground; and

(b) there is sufficient evidence to support the existence of at least one special ground specified in the objection; and

(c) except in the case of the ground specified in paragraph 149D(1)(h), the bankrupt fails to establish that the bankrupt had a reasonable excuse for the conduct or failure that constituted the special ground.

For this purpose, special ground means a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma).

(1B) In applying subsection (1A), no notice is to be taken of any conduct of the bankrupt after the time when the ground concerned first commenced to exist.

150 Subsection 149P(1)

Omit ", and, if the trustee is a registered trustee,", substitute "and".

151 Subsection 149P(3)

Omit "or Official Receiver".

152 Section 149Q

Repeal the section, substitute:

149Q Review of decisions An application may be made to the Administrative Appeals Tribunal for the review of:

(a) a decision of the Inspector-General on the review of a decision of the trustee to file a notice of objection; or

(b) a decision of the Inspector-General refusing a request to review a decision of the trustee to file a notice of objection.

153 Section 149Q

Omit "Administrative Appeals Tribunal", substitute "Administrative Review Tribunal".

154 Division 3 of Part VII

Repeal the Division.

155 After subsection 153A(1)

Insert:

(1A) In determining whether there has been full payment of a debt that bears interest, the interest must be reckoned up to and including the date on which the debt (including interest) is paid.

156 At the end of section 153B

Add:

(2) In the case of a debtor's petition, the order may be made whether or not the bankrupt was insolvent when the petition was presented.

157 Paragraph 155(2)(b)

Omit "officer of the Department", substitute "APS employee".

158 After subsection 155A(1)

Insert:

Exam to assess suitability

(1A) For the purpose of deciding whether the applicant should be registered, the Committee may require the applicant to sit for an exam.

159 After subsection 155A(4)

Insert:

(4A) The Committee must decide that the applicant should not be registered if the Committee is not satisfied that the applicant has the ability (including knowledge) to perform satisfactorily the duties of a registered trustee.

160 At the end of paragraph 155D(b)

Add "(and any late payment penalty under subsection (3) of this section)".

161 At the end of section 155D

Add:

(2) The Inspector-General must not extend the registration of a person if:

(a) the person owes a total of more than $50 for the following:

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

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

(b) the Inspector-General notified the person of the unpaid estate charge at least 14 days before the due date for payment of the charge under subsection (3) on the extension of the registration.

(3) The charge on an extension of registration is due for payment one month before the expiry of the registration. If the charge is not paid by then, an additional amount equal to 20% of the charge is payable by the trustee by way of penalty.

162 Paragraph 155E(5)(b)

Omit "officer of the Department", substitute "APS employee".

163 After paragraph 155H(1)(a)

Insert:

(aa) the trustee no longer has the ability (including knowledge) to perform satisfactorily the duties of a registered trustee; or

164 Paragraph 155H(3)(b)

Omit "officer of the Department", substitute "APS employee".

165 Subsection 161B(1)


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After "$1,109", insert "(the statutory minimum)".

166 After subsection 161B(1)

Insert:

(1A) The statutory minimum (as affected by section 304A) is increased by 8.4% if the trustee's remuneration is consideration for a taxable supply (within the meaning of the A New Tax System (Goods and Services Tax) Act 1999).

167 After subsection 162(6)

Insert:

(6A) The trustee must, in relation to the trustee's remuneration, give such notices to the bankrupt and creditors as are required by the regulations.

168 Subsection 164(3)

Omit "officer of the Department", substitute "officer of ITSA".

169 At the end of section 178

Add:

(2) The application must be made not later than 60 days after the day on which the person became aware of the trustee's act, omission or decision.

170 After section 181

Insert:

181A Streamlined method for replacing trustee (1) The current trustee of a bankrupt's estate may, with the written consent of another trustee (either a registered trustee or the Official Trustee), nominate the other trustee as the new trustee of the estate.

(2) The current trustee must give notice of the nomination to all the creditors who would be entitled under section 64A to receive notice of a meeting of creditors.

(3) The notice must:

(a) specify a date (at least 10 days after the notice is given) from which it is proposed that the new trustee will become the trustee of the estate; and

(b) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the nomination taking effect without there being a meeting of creditors.

(4) If no creditor lodges a written notice of objection with the current trustee at least 2 days before the specified date, then the new trustee replaces the current trustee as trustee of the estate, on the date specified in the notice.

(5) For the purposes of this Act, the new trustee is treated as having been appointed by the creditors.

(6) A certificate signed by the new trustee stating any matter relating to the replacement of the former trustee under this section is prima facie evidence of the matter.

171 Subsection 185(1) (definition of frozen debt)

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

172 Subsection 185(2)

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

173 Section 185A

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

Note: The heading to subsection 185(1) is altered by omitting "Official Trustee" and substituting "Official Receiver".

174 Paragraph 185B(3)(a)

Omit "Official Trustee", substitute "Official Receiver".

175 Subsection 185C(1)

Omit "Official Trustee", substitute "Official Receiver".

Note: The heading to section 185C is altered by omitting "Official Trustee" and substituting "Official Receiver".

176 Subsection 185C(4)

Omit "Official Trustee", substitute "Official Receiver".

177 Paragraph 185C(4)(d)

Omit "half".

178 Section 185D

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

179 At the end of section 185D

Add:

(2) The debtor may, without fee and either personally or by an agent:

(a) inspect the statement of affairs; and

(b) obtain a copy of, or make extracts from, the statement of affairs.

180 Section 185E

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

181 After subsection 185E(2)

Insert:

(2A) The Official Receiver must refuse to accept a debt agreement proposal for processing if the person nominated as administrator is ineligible, in accordance with the regulations, to act as an administrator.

182 Subsection 185E(4)

Omit "Official Trustee's", substitute "Official Receiver's".

183 Section 185G

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

184 Section 185M


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Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

185 Subsection 185N(3)

Omit "Official Trustee", substitute "Official Receiver".

186 Section 185P

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

187 Paragraph 185Q(1)(c)

Omit "Official Trustee", substitute "Official Receiver".

188 Subsection 185T(1)

Omit "Official Trustee", substitute "Official Receiver".

189 Section 185W

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

Note: The heading to section 185W is altered by omitting "Official Trustee" and substituting "Official Receiver".

190 Section 185W

Omit "Official Trustee's" (wherever occurring), substitute "Official Receiver's".

191 Section 185W (note)

Repeal the note, substitute:

Note: Under section 185Y, the Official Receiver may delegate powers and functions to a registered trustee.

192 Section 185Y

Omit "Official Trustee" (wherever occurring), substitute "Official Receiver".

193 Section 185Y

Omit "Official Trustee's" (wherever occurring), substitute "Official Receiver's".

194 Section 185Y (note)

Repeal the note.

195 After subsection 188(2)

Insert:

(2A) The regulations may prescribe the circumstances in which a person (other than the Official Trustee or a registered trustee) is ineligible to act as a controlling trustee under this Part.

(2B) An authority signed by a debtor under this section is not effective for the purposes of this Part if, at the time the authority is signed, the person authorised:

(a) is not the Official Trustee or a registered trustee; and

(b) is ineligible, under the regulations, to act as a controlling trustee under this Part.

196 After subsection 189(1A)

Insert:

(1B) The trustee must notify the Official Receiver in writing within 7 days after the trustee becomes aware that the control has ended because of an event specified in subsection (1A).

197 Subsection 207(1)

Omit "under section 198".

198 Subsection 207(3)

Omit "as required by section 198".

199 Paragraph 222(4)(b)

Omit "subsection 188(2)", substitute "section 188A".

200 Paragraph 224(c)

Omit "is terminated by the Court under section 236 or 242", substitute "is terminated under section 234B, 236 or 242".

201 Paragraph 224(d)

Omit "is terminated by the creditors under section 241", substitute "is terminated under section 240B or 241".

202 Subsections 226(1) and (2)

Omit "subsection 188(2)", substitute "section 188A".

203 After section 234

Insert:

234A Variation of deed of arrangement Variation by special resolution of creditors

(1) The creditors, with the written consent of the debtor, may vary a deed of arrangement by special resolution at a meeting called for the purpose.

Variation by trustee

(2) The trustee, with the written consent of the debtor, may, in writing, propose a variation of a deed of arrangement.

(3) The trustee must give notice of the proposed variation to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors.

(4) The notice must:

(a) include a statement of the reasons for the variation and the likely impact it will have on creditors (if it takes effect); and

(b) specify a date (at least 14 days after the notice is given) from which it is proposed that the variation will take effect; and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the variation taking effect without

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there being a meeting of creditors.

(5) If no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date, then the proposed variation takes effect on the date specified in the notice.

(6) A certificate signed by the trustee stating any matter relating to a proposed variation under subsection (3) is prima facie evidence of the matter.

234B Termination of deed of arrangement by trustee (1) The trustee may, in writing, propose the termination of a deed of arrangement if the trustee is satisfied that the debtor is in default.

(2) The trustee must give notice of the proposed termination to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors.

(3) The notice must:

(a) include a statement of the reasons for the termination and the likely impact it will have on creditors (if it takes effect); and

(b) specify a date (at least 14 days after the notice is given) from which it is proposed that the termination will take effect; and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the termination taking effect without there being a meeting of creditors.

(4) If:

(a) the debtor is in default; and

(b) no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date;

then the proposed termination takes effect on the date specified in the notice.

(5) For the purposes of this section, the debtor is in default if, and only if:

(a) the debtor has failed to carry out or comply with a provision of the deed; or

(b) if the debtor has died, the debtor or the person administering the estate of the debtor has failed to carry out or comply with a provision of the deed.

(6) A certificate signed by the trustee stating any matter relating to a proposed termination under this section is prima facie evidence of the matter.

204 After section 240

Insert:

240A Variation of composition Variation by special resolution of creditors

(1) The creditors, with the written consent of the debtor, may vary a composition by special resolution at a meeting called for the purpose.

Variation by trustee

(2) The trustee, with the written consent of the debtor, may, in writing, propose a variation of a composition.

(3) The trustee must give notice of the proposed variation to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors.

(4) The notice must:

(a) include a statement of the reasons for the variation and the likely impact it will have on creditors (if it takes effect); and

(b) specify a date (at least 14 days after the notice is given) from which it is proposed that the variation will take effect; and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the variation taking effect without there being a meeting of creditors.

(5) If no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date, then the proposed variation takes effect on the date specified in the notice.

(6) A certificate signed by the trustee stating any matter relating to a proposed variation under subsection(3) is prima facie evidence of the matter.

240B Termination of composition by trustee (1) The trustee may, in writing, propose the termination of a composition if the trustee is satisfied that the debtor is in default.

(2) The trustee must give notice of the proposed termination to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors.

(3) The notice must:

(a) include a statement of the reasons for the termination and the likely impact it will have on creditors (if it takes effect); and


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(b) specify a date (at least 14 days after the notice is given) from which it is proposed that the termination will take effect; and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the termination taking effect without there being a meeting of creditors.

(4) If:

(a) the debtor is in default; and

(b) no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date;

then the proposed termination takes effect on the date specified in the notice.

(5) For the purposes of this section, the debtor is in default if, and only if:

(a) the debtor has failed to carry out or comply with a term of the composition; or

(b) if the debtor has died, the debtor or the person administering the estate of the debtor has failed to carry out or comply with a term of the composition.

(6) A certificate signed by the trustee stating any matter relating to a proposed termination under this section is prima facie evidence of the matter.

205 Subsection 265(8)

Omit "of an amount of $500 or upwards".

206 Subsection 265A(1)

Omit ", 77B".

Note: The heading to section 265A is altered by omitting ", 77B".

207 Subsection 265A(2)

Omit ", 77B".

208 Paragraph 265A(3)(a)

Omit "or 77B".

209 After paragraph 272(b)

Insert:

(baa) being a debtor to whom a cooling-off period applies under section 55 or 57, leaves Australia, or does an act preparatory to leaving Australia, without the permission of the Court; or

210 Paragraph 272(ba)

Repeal the paragraph.

211 Paragraph 272(c)

Omit "not being a person to whom paragraph (ba) applies,".

212 At the end of section 272

Add:

(2) The trustee may impose written conditions on a consent given for the purposes of paragraph (1)(c). If the bankrupt is liable to make a contribution to the trustee under section 139P or 139Q, the conditions may include conditions regarding the payment of that contribution.

(3) If the bankrupt contravenes any condition imposed by the trustee, the bankrupt is guilty of an offence and is punishable, on conviction, by imprisonment for a period not exceeding 1 year.

213 At the end of paragraph 282(2)(b)

Add "before the original time for payment".

214 Paragraph 283(1)(a)

Omit "hardship", substitute "undue hardship".

215 Paragraph 304A(1)(h)

Repeal the paragraph.

216 Subsection 304A(3)

Omit "or 149ZC".

217 Subsection 305(1)

Omit "the Official Receiver, the trustee of the estate of a bankrupt", substitute "the trustee of the estate of a bankrupt, the trustee under Part X in relation to a debtor".

218 Subparagraph 305(1)(a)(i)

After "the bankrupt", insert ", the debtor".

219 Subparagraph 305(1)(a)(ii)

After "the bankrupt", insert ", the debtor".

220 Subparagraph 305(1)(b)(i)

After "the bankrupt", insert ", the debtor".

221 Subparagraph 305(1)(b)(ii)

After "the bankrupt", insert ", the debtor".

222 Subsection 305(1)

Omit "in the estate of the bankrupt", substitute "in the estate of the bankrupt, the debtor".

223 Subsection 305(2)

After "the bankrupt", insert ", the debtor".

224 At the end of section 305

Add:

(4) In this section:

estate:

(a) in relation to a deed of assignment under Part X--means the property that is vested in the trustee under the deed; and

(b) in relation to a deed of arrangement under Part X--means the property

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that is vested in the trustee under the deed or is available, or may become available, to the trustee under the deed; and

(c) in relation to a composition under Part X--means the property that is available, or may become available, to the trustee under the composition.

Part 2--Transitional provisions

225 Definitions

In this Part:

Bankruptcy Act means the Bankruptcy Act 1966.

commencing date means the date on which section 1 commenced.

commencing time means the time when section 1 commenced.

226 Items 4, 5, 6,7, 11, 27 and 38

The amendments made by items 4, 5, 6, 7, 11, 27 and 38 do not apply to declarations of intention that were lodged before the commencing time.

227 Items 9 and 22

The amendments made by items 9 and 22 apply to offences committed at any time, whether before or after the commencing time.

228 Item 16

The amendment made by item 16 applies to conduct occurring after the commencing time.

229 Item 18

An appointment in force under section 16 of the Bankruptcy Act immediately before the commencing time continues in effect after the commencing time as if it had been made under that section as amended by this Act.

230 Items 19 and 20

An appointment in force under section 17 of the Bankruptcy Act immediately before the commencing time continues in effect after the commencing time as if it had been made under that section as amended by this Act. However, nothing in this item is taken to alter the time when the appointment was made.

231 Items 23, 24, 91, 92, 93, 94, 95, 206, 207 and 208

The amendments made by items 23, 24, 91, 92, 93, 94, 95, 206, 207 and 208 apply to bankruptcies for which the date of the bankruptcy is after the commencing date.

232 Item 26

The amendment made by item 26 applies to statements of affairs that are filed at any time, whether before or after the commencing time.

233 Items 29, 30, 31 and 32

The amendments made by items 29, 30, 31 and 32 apply to the issue of bankruptcy notices on applications that are made after the commencing time.

234 Items 33, 46, 52, 65, 129, 132, 154, 215 and 216

The amendments made by items 33, 46, 52, 65, 129, 132, 154, 215 and 216 apply to bankruptcies for which the date of the bankruptcy is after the commencing date.

235 Item 34

The amendment made by item 34 applies to any creditor's petition that is presented after the commencing time.

236 Items 39, 40, 44, 45, 59, 60, 63 and 64

The amendments made by items 39, 40, 44, 45, 59, 60, 63 and 64 apply to petitions presented after the commencing time.

237 Items 12, 15, 21, 139, 28, 43, 49, 50, 51, 62, 68, 69 and 97

The amendments made by items 12, 15, 21, 139, 28, 43, 49, 50, 51, 62, 68, 69 and 97 apply to petitions presented after the commencing time.

238 Items 70, 71, 72, 75, 76 and 77

The amendments made by items 70, 71, 72, 75, 76 and 77 apply to meetings of which notice is given after the commencing time.

239 Item 73

The amendment made by item 73 applies to meetings held after the commencing time.

240 Items 79, 80 and 81

The amendments made by items 79, 80 and 81 apply to proposals lodged after the commencing time under subsection 73(1) of the Bankruptcy Act.

241 Items 82, 200, 201, 203 and 204

(1) The amendments made by items 82, 200, 201, 203 and 204 apply to compositions, schemes of arrangement and deeds of arrangement that are made after the commencing time.

(2) For the purposes of this item:

(a) a composition or scheme of arrangement is made when it is accepted by the creditors; and

(b) a deed of arrangement is made when it is executed.

242 Items 83, 84, 85, 86, 87, 88, 89, 90, 96 and 139

The amendments made by items 83, 84, 85, 86, 87, 88, 89, 90, 96 and 139 apply to changes that occur after the commencing time.

243 Items 98, 122, 147 and 169

The amendments made by items 98, 122, 147 and 169 apply in relation to the review of decisions that are made after the commencing time.

244 Items 99 and 101

The amendments made by items 99 and 101 apply to trustee decisions that are made after the commencing time.

245 Item 100


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The amendment made by item 100 applies to proofs admitted after the commencing time.

246 Items 102 and 105

The amendments made by items 102 and 105 apply to bankruptcies for which the date of the bankruptcy is after the commencing date.

247 Item 104

The amendment made by item 104 applies to bankruptcy notices issued after the commencing time.

248 Item 106

The amendment made by item 106 applies to all bankruptcies, including those that ended before the commencing time. However, for a bankruptcy that ended before the commencing time, the initial revesting time is the beginning of the day that is the sixth anniversary of the commencing day (instead of the sixth anniversary of the day on which the bankrupt was discharged).

249 Items 111, 112, 113, 114, 115, 116, 117, 118, 119, 120 and 121

The amendments made by items 111, 112, 113, 114, 115, 116, 117, 118, 119, 120 and 121 apply to contribution assessment periods that begin after the commencing date.

250 Items 124, 126 and 152

The amendments made by items 124, 126 and 152 apply in relation to the review of decisions that are made after the commencing time.

251 Items 127, 210, 211 and 212

Despite the amendments made by items 127, 210, 211 and 212:

(a) Division 4C of Part VI of the Bankruptcy Act continues to have effect:

(i) in relation to permissions granted under that Division before the commencing time; and

(ii) in relation to applications that were made to the Court under that Division before the commencing time; and

(iii) in relation to permissions granted after the commencing time on applications referred to in subparagraph (ii); and

(b) paragraph 272(c) of the Bankruptcy Act does not apply to anything done by a bankrupt in accordance with a permission referred to in paragraph (a) of this item.

252 Items 133, 134, 135, 136, 137, 138, 140, 141, 142, 143, 144, 145, 146, 148, 149 and 151

The amendments made by items 133, 134, 135, 136, 137, 138, 140, 141, 142, 143, 144, 145, 146, 148, 149 and 151 apply to objections filed after the commencing time.

253 Item 155

The amendment made by item 155 applies to annulments after the commencing time, including annulments of bankruptcies for which the date of bankruptcy is before the commencing time.

254 Item 156

The amendment made by item 156 applies to petitions presented after the commencing time.

255 Items 158, 159 and 163

The amendments made by items 158, 159 and 163 apply to registration applications made after the commencing time.

256 Items 160 and 161

The amendments made by items 160 and 161 apply to extensions of registration with an expiry date that is at least 3 months after the commencing date.

257 Items 165 and 166

The amendments made by items 165 and 166 apply where the trustee is appointed after the commencing time.

258 Item 170

The amendment made by item 170 applies to all bankruptcies (including those for which the date of the bankruptcy is before the commencing date).

259 Items 171, 172, 173, 174, 175, 176, 178, 180, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193 and 194

(1) The amendments made by items 171, 172, 173, 174, 175, 176, 178, 180, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193 and 194 apply to debt agreements that are in force at the commencing time and to debt agreements made after the commencing time.

(2) Things that were done before the commencing time by, or in relation to, the Official Trustee under Part IX of the Bankruptcy Act are to be treated as if they had been done by, or in relation to, the Official Receiver.

260 Item 177

The amendment made by item 177 applies to debt agreement proposals that are given after the commencing time under subsection 185C(1) of the Bankruptcy Act.

261 Item 181

The amendment made by item 181 applies to debt agreement proposals that are given after the commencing time under subsection 185C(1) of the Bankruptcy Act.

262 Item 195

The amendment made by item 195 applies to authorities that are signed after the commencing time.


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263 Item 196

The amendment made by item 196 applies in cases where the control ends after the commencing time.

264 Item 205

The amendment made by item 205 applies to debts contracted after the commencing time.

265 Item 213

The amendment made by item 213 applies to applications made after the commencing time.

266 Item 214

The amendment made by item 214 applies in cases where the application for remission is made to the Inspector-General after the commencing time.