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Bankruptcy Act 1966

  • - C2005C00243
  • In force - Superseded Version
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Act No. 33 of 1966 as amended, taking into account amendments up to Act No. 20 of 2005
An Act relating to Bankruptcy
Administered by: Attorney-General's
Registered 06 Apr 2005
Start Date 18 Mar 2005
End Date 14 Apr 2005
Table of contents.
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Collapse Volume 1Volume 1
Part I—Preliminary
1 Short title [see Note 1]
2 Commencement [see Note 1]
4 Repeal
Part IA—Interpretation
5 Interpretation
5AA Place of origin of bankruptcy and insolvency matters
5A Acting in accordance with a person’s directions or instructions
5B Associated entities: companies
5C Associated entities: natural persons
5D Associated entities: partnerships
5E Associated entities: trusts
5F Controlling an entity in relation to a matter
5G Financial affairs of a company
5H Financial affairs of a natural person
5J Financial affairs of a partnership
5K Financial affairs of a trust
6 Meaning of intent to defraud creditors
6A Statement of affairs for purposes other than Part XI
6B Provision of statement of affairs under Part XI and statement of administration of estate of deceased person
6C Interpretive provisions relating to proceeds of crime orders
Part IB—Application of Act
7 Application of Act
7A Application of the Criminal Code
8 Act to bind the Crown
9 Laws of States and Territories not affected by Act
Part II—Administration
Division 1—General
10 Delegation by Minister or Secretary
11 Inspector‑General in Bankruptcy
12 Functions of Inspector‑General
13 Bankruptcy Districts
15 Official Receivers
16 Appointment of Inspector‑General and Official Receivers
17 Acting Inspector‑General and Acting Official Receivers
17B Arrangements for services of State and Northern Territory Magistrates
18 The Official Trustee in Bankruptcy
18AA Commonwealth Authorities and Companies Act 1997 does not apply to Official Trustee
18A Liability of the Official Trustee
19 Duties etc. of trustee
19AA Power of investigation of bankrupt’s affairs
19A Liability of Inspector‑General, Official Receivers etc.
Division 2—Common Investment Fund
20A Interpretation
20B The Common Investment Fund
20D Investment of money in Common Fund
20E Borrowing for the Common Fund
20F Moneys in Common Fund not held on account of particular estates etc.
20G Common Investment Fund Equalization Account
20H Credits to and debits from the Equalization Account
20J Interest on moneys in Common Fund payable only in certain circumstances
Part III—Courts
Division 2—Jurisdiction and powers of courts in bankruptcy
27 Bankruptcy courts
29 Courts to help each other
30 General powers of Courts in bankruptcy
31 Exercise of jurisdiction
32 Costs
33 Adjournment, amendment of process and extension and abridgment of times
33A Alteration of filing date for statement of affairs
34 Orders and commissions for examination of witnesses
34A Standard of proof
35A Transfer of proceedings to Family Court
36 Enforcement of orders etc.
37 Power of Court to rescind orders etc.
Part IV—Proceedings in connexion with bankruptcy
Division 1—Acts of bankruptcy
40 Acts of bankruptcy
41 Bankruptcy notices
42 Payment etc. of debt to Commonwealth or State after service of bankruptcy notice
Division 2—Creditors’ petitions
43 Jurisdiction to make sequestration orders
44 Conditions on which creditor may petition
45 Creditor’s petition against partnership
46 Petition against 2 or more joint debtors
47 Requirements as to creditor’s petition
49 Change of petitioners [see Table B]
50 Taking control of debtor’s property before sequestration [see Table B]
51 Costs of prosecuting creditor’s petition
52 Proceedings and order on creditor’s petition
53 Consolidation of proceedings
54 Bankrupt’s statement of affairs
Division 2A—Declaration of intention to present debtor’s petition
54A Presentation of declaration
54B When debtor disqualified from presenting declaration
54C Acceptance or rejection of declaration
54D Official Receiver to give information to debtor
54E Enforcement suspended during stay period
54F Duties of sheriff
54G Duty of court registrar
54H Duties of person entitled to deduct money owing to declared debtor
54J Extension of time where this Division prevents the doing of an act
54K Section 33 not to apply to this Division
54L Secured creditor’s rights under security not affected
Division 3—Debtors’ petitions
55 Debtor’s petition
56A Persons who may present a debtor’s petition against a partnership
56B Presentation of a debtor’s petition against a partnership
56C Referral to the Court of a debtor’s petition against a partnership
56D Acceptance of a debtor’s petition against a partnership by the Official Receiver
56E Effects of acceptance of a debtor’s petition against a partnership
56F Extra duties of non‑petitioning partners who become bankrupts
56G Inspection of statements of affairs of partners and partnerships
57 Debtor’s petition by joint debtors who are not partners
57A Time at which person becomes bankrupt on debtor’s petition
Division 4—Effect of bankruptcy on property and proceedings
58 Vesting of property upon bankruptcy—general rule
58A Vesting of property upon bankruptcy—effect of orders in force under the proceeds of crime law
59 Second or subsequent bankruptcy
60 Stay of legal proceedings
61 Actions by bankrupt partner’s trustee
62 Actions on joint contracts
63 Death of bankrupt
Division 5—Meetings of creditors
Subdivision A—Preliminary
63A Definitions [see Table B]
63B Trustee’s representative [see Table B]
Subdivision B—Convening of meetings
64 Trustee to convene meetings [see Table B]
64A Persons to whom notice of meeting to be given [see Table B]
64B Certain matters to be included in notice of meeting [see Table B]
64C If telephone conference facilities are available
64D Statement by creditor as to amount of debt [see Table B]
64E Notice about voting by proxy [see Table B]
64F Notice about appointment of attorney
64G Agenda to be set out in notice of meeting [see Table B]
Subdivision C—Procedure before opening of meeting
64H Creditors, or proxies or attorneys, participating by telephone
64J Preparation of attendance record [see Table B]
Subdivision D—Procedure at meetings
64K Opening of meeting [see Table B]
64L Appointment of minutes secretary [see Table B]
64M Announcement of proxies and attorneys
64N Quorum [see Table B]
64P Election of person to preside at meeting [see Table B]
64Q Whether holding of meeting is convenient to majority of creditors [see Table B]
64R Tabling of bankrupt’s statement of affairs [see Table B]
64S Statements and questions [see Table B]
64T Motions [see Table B]
64U Remuneration of registered trustee [see Table B]
64V Appointment of committee of inspection [see Table B]
64W Other business [see Table B]
64X Next meeting [see Table B]
Subdivision E—Miscellaneous
64Y Adjournment of meeting [see Table B]
64Z Duties of minutes secretary [see Table B]
64ZA Entitlement to vote [see Table B]
64ZB Manner of voting [see Table B]
64ZBA Creditors’ resolution without meeting
64ZC Appointment of proxies [see Table B]
64ZD Provisions relating to motions and amendments of motions
64ZE Joint bankruptcies [see Table B]
64ZF Substantial compliance to be sufficient
Division 5A—Committee of inspection
70 Committee of inspection
71 Vacation of office etc.
72 Member of committee not to purchase part of estate
Division 6—Composition or arrangement with creditors
73 Composition or arrangement [see Table B]
73A Trustee may require surety for cost of meeting
73B Declaration of relationships by proposed trustee of composition or scheme of arrangement
73C Statement of affairs and declarations of relationships to be tabled at meeting
74 Annulment of bankruptcy [see Table B]
74A Variation of composition or scheme of arrangement
75 Effect of composition or scheme of arrangement [see Table B]
76 Application of Part VIII to trustee of a composition or arrangement
76A Meetings of creditors
76B Setting aside and termination of a composition or scheme of arrangement
Part V—Control over person and property of debtors and bankrupts
Division 1—General
77 Duties of bankrupt as to discovery etc. of property
77AA Access by Official Receiver and others to premises
77A Access by trustee to books of associated entity
77C Power of Official Receiver to obtain information and evidence
77D Allowances and expenses in respect of attendance
77E Advance on account of allowances and expenses
77F Allowances and expenses to be paid out of bankrupt’s estate [see Table B]
78 Arrest of debtor or bankrupt
80 Notification of change in name, address or day‑time telephone number
81 Discovery of bankrupt’s property etc. [see Table B]
Division 2—Offshore information notices
81A Issue of notices
81B Extension of period of notice
81C Variation of notices
81D Withdrawal of notices
81E Notices may be included in same document
81F Relationship between this Division and section 77C
Division 3—Failure to comply with certain notices
81G Effect of non‑compliance with notice
Part VI—Administration of property
Division 1—Proof of debts
82 Debts provable in bankruptcy [see Table B]
83 Debt not to be considered proved until admitted
84 Manner of proving debts
85 Proof by employees
86 Mutual credit and set‑off
87 Deduction of discounts [see Table B]
88 Apportionment to principal and interest of payments made before bankruptcy [see Table B]
89 Apportionment where security realized before or after bankruptcy
90 Proof of debt by secured creditor
91 Redemption of security by trustee etc.
92 Amendment of valuation
93 Repayment of excess
94 Subsequent realization of security
95 Proof in respect of distinct contracts [see Table B]
96 Proof in respect of proportionate part of periodical payment
97 Production of bills of exchange and promissory notes
98 Amendment of proof of debt
100 Costs of proving debts etc.
101 Inspection of proofs by creditors etc.
102 Admission or rejection of proofs
103 Debts to be rounded down to nearest dollar
104 Appeal against decision of trustee in respect of proof [see Table B]
105 Costs of appeal
106 Trustee may administer oaths etc.
107 Creditor not to receive more than the amount of his or her debt and interest
Division 2—Order of payment of debts
Subdivision A—General
108 Debts proved to rank equally except as otherwise provided
109A Debts due to employees [see Table B]
110 Application of estates of joint debtors [see Table B]
113 Apprenticeship etc. claims [see Table B]
114 Payment of liabilities etc. incurred under terminated deed etc. [see Table B]
Subdivision B—The effect of proceeds of crime orders and applications for proceeds of crime orders
114A The effect of proceeds of crime orders
114B The effect of applications for proceeds of crime orders
114C Director of Public Prosecutions must notify the trustee of certain matters
Division 3—Property available for payment of debts
115 Commencement of bankruptcy
116 Property divisible among creditors [see Table B]
117 Policies of insurance against liabilities to third parties [see Table B]
118 Execution by creditor against property of debtor who becomes a bankrupt etc. [see Table B]
119 Duties of sheriff after receiving notice of presentation of petition etc. [see Table B]
119A Duties of sheriff after receiving notice of bankruptcy etc. [see Table B]
120 Undervalued transactions
121 Transfers to defeat creditors
122 Avoidance of preferences [see Table B]
123 Protection of certain transfers of property against relation back etc. [see Table B]
124 Protection of certain payments to bankrupt etc. [see Table B]
125 Certain accounts of undischarged bankrupt [see Table B]
126 Dealings with undischarged bankrupt in respect of after‑acquired property [see Table B]
127 Limitation of time for making claims by trustee etc. [see Table B]
128 Notice to trustee where identity of vendor etc. with bankrupt in doubt
Division 4—Realization of property
129 Trustee to take possession of property of bankrupt
129AA Time limit for realising property
129A Eligible judges
130 Warrant for seizure of property connected with the bankrupt
132 Vesting and transfer of property
133 Disclaimer of onerous property [see Table B]
134 Powers exercisable at discretion of trustee [see Table B]
136 Right to pay off mortgages [see Table B]
137 Right of trustee to inspect goods held as security [see Table B]
138 Limitation of trustee’s power in respect of copyright, patents etc. [see Table B]
139 Protection of trustee from personal liability in certain cases [see Table B]
Division 4A—Orders in relation to property of entity controlled by bankrupt
139A Trustee may apply to Court
139B Application to be served on respondent entity
139C Who may appear at hearing
139D Order relating to property of entity
139E Order relating to entity’s net worth
139F Court to take account of interests of other persons
139G Giving effect to orders under sections 139D and 139E
139H Entity entitled to claim in bankruptcy
Division 4B—Contribution by bankrupt and recovery of property
Subdivision A—Preliminary
139J Objects of Division
Subdivision B—Interpretation
139K Definitions
Subdivision C—Income
139L Meaning of income
139M Derivation of income
139N Income varied by income tax payments and refunds and child support payments
Subdivision D—Liability of bankrupt to pay contributions
139P Liability of bankrupt to pay contribution
139Q Change in liability of bankrupt
139R Liability not affected by subsequent discharge
139S Contribution payable by bankrupt
139T Determination of higher income threshold in cases of hardship
Subdivision E—Provision of information to trustee
139U Bankrupt to provide evidence of income
139V Power of trustee to require bankrupt to provide additional evidence
Subdivision F—Assessments of income and contribution
139W Assessment of bankrupt’s income and contribution
139WA No time limit on making assessment
139X Basis of assessments
139Y Trustee may regard bankrupt as receiving reasonable remuneration
139Z If bankrupt claims not to be in receipt of income
Subdivision G—Review of assessment
139ZA Internal review of assessment
139ZC Inspector‑General may request further information
139ZD Decision on review
139ZE Inspector‑General to notify bankrupt and trustee of decision
139ZF Review of assessment decisions
Subdivision H—When contribution payable
139ZG Payment of contribution
139ZH If excess contribution paid
Subdivision HA—Supervised account regime
139ZIA Objects
139ZIB Definitions
139ZIC Trustee may determine that the supervised account regime applies to the bankrupt
139ZID Revocation of determination
139ZIDA When determination ceases to be in force
139ZIE Bankrupt must open and maintain supervised account
139ZIEA New supervised account
139ZIF Bankrupt’s monetary income to be deposited to supervised account
139ZIG Trustee to supervise withdrawals from supervised account
139ZIH Constructive income receipt arrangements
139ZIHA Non‑monetary income receipt arrangements
139ZII Cash income
139ZIIA Keeping of books
139ZIJ Injunctions
139ZIK Interim injunctions
139ZIL Discharge etc. of injunctions
139ZIM Certain limits on granting injunctions not to apply
139ZIN Other powers of the Court unaffected
139ZIO Inspector‑General may review trustee’s decision
139ZIP Inspector‑General may request further information
139ZIR Inspector‑General’s decision on review
139ZIS Inspector‑General to notify bankrupt and trustee of decision
139ZIT AAT review of decisions
Subdivision I—Collection of money or property by Official Receiver from person other than the bankrupt
139ZJ Definition [see Table B]
139ZK Persons to whom Subdivision applies [see Table B]
139ZL Official Receiver may require persons to make payments [see Table B]
139ZM Power of Court to set aside notice
139ZN Charge over property
139ZO Failure to comply with notice
139ZP Employer not to dismiss or injure bankrupt because of giving of notice
Subdivision J—Collection of money or property by Official Receiver from party to transaction that is void against the trustee
139ZQ Official Receiver may require payment [see Table B]
139ZR Charge over property [see Table B]
139ZS Power of Court to set aside notice
139ZT Failure to comply with notice
Division 5—Distribution of property
140 Declaration and distribution of dividends
141 Joint and separate dividends
142 Apportionment of expenses of administration of joint and separate estates
143 Provision to be made for creditors residing at a distance etc. [see Table B]
144 Right of creditor who has not proved debt before declaration of dividend
145 Final dividend
146 Distribution of dividends where bankrupt fails to file statement of affairs [see Table B]
147 No action for dividend
Part VII—Discharge and annulment
Division 1—Preliminary
148 Misleading conduct by bankrupt
Division 2—Discharge by operation of law
Subdivision A—Discharge after certain period
149 Automatic discharge
149A Bankruptcy extended when objection made
Subdivision B—Objections
149B Objection to discharge
149C Form of notice of objection
149D Grounds of objection
149F Copy of notice of objection to be given to bankrupt
149G Date of effect of objection
149H Trustee ceasing to object on some grounds
149J Withdrawal of objection
Subdivision C—Review of objection
149K Internal review of objection
149M Inspector‑General may request further information
149N Decision on review
149P Inspector‑General to notify bankrupt and trustee of decision
149Q Review of decisions
Division 4—Provisions applicable to all discharges
152 Discharged bankrupt to give assistance
153 Effect of discharge
Division 5—Annulment of bankruptcy
153A Annulment on payment of debts
153B Annulment by Court
154 Effect of annulment
Expand Volume 2Volume 2

Bankruptcy Act 1966

Act No. 33 of 1966 as amended

Volume 1 includes       Table of Contents

                                    Sections 1–154

This compilation was prepared on 31 March 2005
taking into account amendments up to Act No. 20 of 2005

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Volume 2 includes       Table of Contents

                                    Sections 154A–315

                                    Schedule 1
                                    Note 1
                                    Table of Acts
                                    Act Notes
                                    Table of Amendments
                                    Notes 2 and 3
                                    Table A
                                    Table B (modifications)

Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra

 

  

 

 


Contents

Part I—Preliminary                                                                                                                1

1............ Short title [see Note 1]....................................................................... 1

2............ Commencement [see Note 1].............................................................. 1

4............ Repeal................................................................................................. 1

Part IA—Interpretation                                                                                                       2

5............ Interpretation...................................................................................... 2

5AA...... Place of origin of bankruptcy and insolvency matters..................... 16

5A......... Acting in accordance with a person’s directions or instructions...... 18

5B......... Associated entities: companies......................................................... 18

5C......... Associated entities: natural persons................................................. 19

5D......... Associated entities: partnerships..................................................... 19

5E.......... Associated entities: trusts................................................................ 20

5F.......... Controlling an entity in relation to a matter..................................... 20

5G......... Financial affairs of a company.......................................................... 21

5H......... Financial affairs of a natural person.................................................. 22

5J.......... Financial affairs of a partnership...................................................... 23

5K......... Financial affairs of a trust................................................................. 23

6............ Meaning of intent to defraud creditors............................................. 24

6A......... Statement of affairs for purposes other than Part XI....................... 24

6B......... Provision of statement of affairs under Part XI and statement of administration of estate of deceased person     25

6C......... Interpretive provisions relating to proceeds of crime orders............ 26

Part IB—Application of Act                                                                                            28

7............ Application of Act........................................................................... 28

7A......... Application of the Criminal Code.................................................... 28

8............ Act to bind the Crown...................................................................... 28

9............ Laws of States and Territories not affected by Act......................... 29

Part II—Administration                                                                                                     30

Division 1—General                                                                                                    30

10.......... Delegation by Minister or Secretary................................................ 30

11.......... Inspector-General in Bankruptcy..................................................... 30

12.......... Functions of Inspector-General........................................................ 31

13.......... Bankruptcy Districts........................................................................ 33

15.......... Official Receivers.............................................................................. 33

16.......... Appointment of Inspector-General and Official Receivers.............. 34

17.......... Acting Inspector-General and Acting Official Receivers.................. 34

17B....... Arrangements for services of State and Northern Territory Magistrates                35

18.......... The Official Trustee in Bankruptcy................................................. 35

18AA.... Commonwealth Authorities and Companies Act 1997 does not apply to Official Trustee     37

18A....... Liability of the Official Trustee........................................................ 37

19.......... Duties etc. of trustee........................................................................ 38

19AA.... Power of investigation of bankrupt’s affairs.................................... 39

19A....... Liability of Inspector-General, Official Receivers etc...................... 39

Division 2—Common Investment Fund                                                           41

20A....... Interpretation.................................................................................... 41

20B....... The Common Investment Fund........................................................ 41

20D....... Investment of money in Common Fund........................................... 42

20E........ Borrowing for the Common Fund.................................................... 43

20F........ Moneys in Common Fund not held on account of particular estates etc.               44

20G....... Common Investment Fund Equalization Account........................... 45

20H....... Credits to and debits from the Equalization Account...................... 45

20J........ Interest on moneys in Common Fund payable only in certain circumstances        46

Part III—Courts                                                                                                                     49

Division 2—Jurisdiction and powers of courts in bankruptcy              49

27.......... Bankruptcy courts............................................................................ 49

29.......... Courts to help each other................................................................. 49

30.......... General powers of Courts in bankruptcy......................................... 50

31.......... Exercise of jurisdiction...................................................................... 51

32.......... Costs................................................................................................. 52

33.......... Adjournment, amendment of process and extension and abridgment of times        52

33A....... Alteration of filing date for statement of affairs............................... 52

34.......... Orders and commissions for examination of witnesses.................... 53

34A....... Standard of proof.............................................................................. 53

35A....... Transfer of proceedings to Family Court......................................... 53

36.......... Enforcement of orders etc................................................................. 55

37.......... Power of Court to rescind orders etc................................................ 56

Part IV—Proceedings in connexion with bankruptcy                                       57

Division 1—Acts of bankruptcy                                                                            57

40.......... Acts of bankruptcy.......................................................................... 57

41.......... Bankruptcy notices.......................................................................... 61

42.......... Payment etc. of debt to Commonwealth or State after service of bankruptcy notice             63

Division 2—Creditors’ petitions                                                                          64

43.......... Jurisdiction to make sequestration orders........................................ 64

44.......... Conditions on which creditor may petition...................................... 64

45.......... Creditor’s petition against partnership............................................ 65

46.......... Petition against 2 or more joint debtors............................................ 66

47.......... Requirements as to creditor’s petition............................................. 66

49.......... Change of petitioners [see Table B]................................................. 66

50.......... Taking control of debtor’s property before sequestration [see Table B]                66

51.......... Costs of prosecuting creditor’s petition........................................... 68

52.......... Proceedings and order on creditor’s petition.................................... 68

53.......... Consolidation of proceedings........................................................... 69

54.......... Bankrupt’s statement of affairs........................................................ 70

Division 2A—Declaration of intention to present debtor’s petition 72

54A....... Presentation of declaration............................................................... 72

54B....... When debtor disqualified from presenting declaration..................... 72

54C....... Acceptance or rejection of declaration.............................................. 72

54D....... Official Receiver to give information to debtor................................ 73

54E........ Enforcement suspended during stay period..................................... 73

54F........ Duties of sheriff................................................................................ 73

54G....... Duty of court registrar...................................................................... 74

54H....... Duties of person entitled to deduct money owing to declared debtor 74

54J........ Extension of time where this Division prevents the doing of an act 75

54K....... Section 33 not to apply to this Division.......................................... 75

54L........ Secured creditor’s rights under security not affected....................... 75

Division 3—Debtors’ petitions                                                                              76

55.......... Debtor’s petition.............................................................................. 76

56A....... Persons who may present a debtor’s petition against a partnership 79

56B....... Presentation of a debtor’s petition against a partnership................. 80

56C....... Referral to the Court of a debtor’s petition against a partnership... 80

56D....... Acceptance of a debtor’s petition against a partnership by the Official Receiver  82

56E........ Effects of acceptance of a debtor’s petition against a partnership... 82

56F........ Extra duties of non-petitioning partners who become bankrupts.... 83

56G....... Inspection of statements of affairs of partners and partnerships.... 83

57.......... Debtor’s petition by joint debtors who are not partners................. 84

57A....... Time at which person becomes bankrupt on debtor’s petition........ 88

Division 4—Effect of bankruptcy on property and proceedings          89

58.......... Vesting of property upon bankruptcy—general rule....................... 89

58A....... Vesting of property upon bankruptcy—effect of orders in force under the proceeds of crime law       90

59.......... Second or subsequent bankruptcy.................................................... 91

60.......... Stay of legal proceedings.................................................................. 93

61.......... Actions by bankrupt partner’s trustee............................................. 94

62.......... Actions on joint contracts................................................................ 95

63.......... Death of bankrupt............................................................................ 95

Division 5—Meetings of creditors                                                                      96

Subdivision A—Preliminary                                                                                   96

63A....... Definitions [see Table B].................................................................. 96

63B....... Trustee’s representative [see Table B]............................................. 97

Subdivision B—Convening of meetings                                                                97

64.......... Trustee to convene meetings [see Table B]...................................... 97

64A....... Persons to whom notice of meeting to be given [see Table B]......... 98

64B....... Certain matters to be included in notice of meeting [see Table B]... 98

64C....... If telephone conference facilities are available.................................. 99

64D....... Statement by creditor as to amount of debt [see Table B]............... 99

64E........ Notice about voting by proxy [see Table B].................................. 100

64F........ Notice about appointment of attorney........................................... 100

64G....... Agenda to be set out in notice of meeting [see Table B]................ 100

Subdivision C—Procedure before opening of meeting                                     101

64H....... Creditors, or proxies or attorneys, participating by telephone...... 101

64J........ Preparation of attendance record [see Table B].............................. 102

Subdivision D—Procedure at meetings                                                              103

64K....... Opening of meeting [see Table B].................................................. 103

64L........ Appointment of minutes secretary [see Table B].......................... 103

64M...... Announcement of proxies and attorneys........................................ 104

64N....... Quorum [see Table B].................................................................... 104

64P........ Election of person to preside at meeting [see Table B].................. 105

64Q....... Whether holding of meeting is convenient to majority of creditors [see Table B]   106

64R....... Tabling of bankrupt’s statement of affairs [see Table B]............... 107

64S........ Statements and questions [see Table B]......................................... 107

64T....... Motions [see Table B].................................................................... 107

64U....... Remuneration of registered trustee [see Table B]........................... 107

64V....... Appointment of committee of inspection [see Table B]................ 109

64W...... Other business [see Table B].......................................................... 109

64X....... Next meeting [see Table B]............................................................. 109

Subdivision E—Miscellaneous                                                                              109

64Y....... Adjournment of meeting [see Table B]........................................... 109

64Z....... Duties of minutes secretary [see Table B]..................................... 110

64ZA.... Entitlement to vote [see Table B]................................................... 112

64ZB..... Manner of voting [see Table B]...................................................... 112

64ZBA.. Creditors’ resolution without meeting............................................ 114

64ZC..... Appointment of proxies [see Table B]........................................... 115

64ZD.... Provisions relating to motions and amendments of motions.......... 116

64ZE..... Joint bankruptcies [see Table B].................................................... 117

64ZF..... Substantial compliance to be sufficient.......................................... 117

Division 5A—Committee of inspection                                                          118

70.......... Committee of inspection................................................................ 118

71.......... Vacation of office etc...................................................................... 119

72.......... Member of committee not to purchase part of estate.................... 119

Division 6—Composition or arrangement with creditors                     121

73.......... Composition or arrangement [see Table B].................................... 121

73A....... Trustee may require surety for cost of meeting............................. 122

73B....... Declaration of relationships by proposed trustee of composition or scheme of arrangement                122

73C....... Statement of affairs and declarations of relationships to be tabled at meeting        123

74.......... Annulment of bankruptcy [see Table B]........................................ 124

74A....... Variation of composition or scheme of arrangement...................... 125

75.......... Effect of composition or scheme of arrangement [see Table B]..... 126

76.......... Application of Part VIII to trustee of a composition or arrangement 126

76A....... Meetings of creditors...................................................................... 126

76B....... Setting aside and termination of a composition or scheme of arrangement              127

Part V—Control over person and property of debtors and bankrupts 128

Division 1—General                                                                                                  128

77.......... Duties of bankrupt as to discovery etc. of property..................... 128

77AA.... Access by Official Receiver and others to premises...................... 129

77A....... Access by trustee to books of associated entity............................ 130

77C....... Power of Official Receiver to obtain information and evidence..... 131

77D....... Allowances and expenses in respect of attendance........................ 132

77E........ Advance on account of allowances and expenses........................... 133

77F........ Allowances and expenses to be paid out of bankrupt’s estate [see Table B]          134

78.......... Arrest of debtor or bankrupt.......................................................... 134

80.......... Notification of change in name, address or day-time telephone number 135

81.......... Discovery of bankrupt’s property etc. [see Table B].................... 135

Division 2—Offshore information notices                                                     140

81A....... Issue of notices............................................................................... 140

81B....... Extension of period of notice.......................................................... 140

81C....... Variation of notices......................................................................... 141

81D....... Withdrawal of notices..................................................................... 142

81E........ Notices may be included in same document................................... 142

81F........ Relationship between this Division and section 77C..................... 142

Division 3—Failure to comply with certain notices                                  143

81G....... Effect of non-compliance with notice............................................. 143

Part VI—Administration of property                                                                       144

Division 1—Proof of debts                                                                                     144

82.......... Debts provable in bankruptcy [see Table B]................................. 144

83.......... Debt not to be considered proved until admitted........................... 145

84.......... Manner of proving debts................................................................ 146

85.......... Proof by employees....................................................................... 147

86.......... Mutual credit and set-off................................................................ 148

87.......... Deduction of discounts [see Table B]............................................ 148

88.......... Apportionment to principal and interest of payments made before bankruptcy [see Table B]             149

89.......... Apportionment where security realized before or after bankruptcy 149

90.......... Proof of debt by secured creditor................................................... 149

91.......... Redemption of security by trustee etc........................................... 150

92.......... Amendment of valuation................................................................ 151

93.......... Repayment of excess...................................................................... 151

94.......... Subsequent realization of security.................................................. 152

95.......... Proof in respect of distinct contracts [see Table B]....................... 152

96.......... Proof in respect of proportionate part of periodical payment....... 152

97.......... Production of bills of exchange and promissory notes................... 153

98.......... Amendment of proof of debt.......................................................... 153

100........ Costs of proving debts etc.............................................................. 153

101........ Inspection of proofs by creditors etc............................................. 153

102........ Admission or rejection of proofs.................................................... 153

103........ Debts to be rounded down to nearest dollar................................... 155

104........ Appeal against decision of trustee in respect of proof [see Table B] 155

105........ Costs of appeal............................................................................... 155

106........ Trustee may administer oaths etc................................................... 156

107........ Creditor not to receive more than the amount of his or her debt and interest         156

Division 2—Order of payment of debts                                                          157

Subdivision A—General                                                                                         157

108........ Debts proved to rank equally except as otherwise provided......... 157

109........ Priority payments [see Table B].................................................... 157

109A..... Debts due to employees [see Table B]........................................... 161

110........ Application of estates of joint debtors [see Table B].................... 162

113........ Apprenticeship etc. claims [see Table B]....................................... 162

114........ Payment of liabilities etc. incurred under terminated deed etc. [see Table B]         163

Subdivision B—The effect of proceeds of crime orders and applications for proceeds of crime orders         163

114A..... The effect of proceeds of crime orders........................................... 163

114B..... The effect of applications for proceeds of crime orders................. 164

114C..... Director of Public Prosecutions must notify the trustee of certain matters            164

Division 3—Property available for payment of debts                              165

115........ Commencement of bankruptcy...................................................... 165

116........ Property divisible among creditors [see Table B].......................... 166

117........ Policies of insurance against liabilities to third parties [see Table B] 173

118........ Execution by creditor against property of debtor who becomes a bankrupt etc. [see Table B]              174

119........ Duties of sheriff after receiving notice of presentation of petition etc. [see Table B]             177

119A..... Duties of sheriff after receiving notice of bankruptcy etc. [see Table B]                180

120........ Undervalued transactions............................................................... 182

121........ Transfers to defeat creditors........................................................... 184

122........ Avoidance of preferences [see Table B]......................................... 186

123........ Protection of certain transfers of property against relation back etc. [see Table B]               188

124........ Protection of certain payments to bankrupt etc. [see Table B]..... 189

125........ Certain accounts of undischarged bankrupt [see Table B]............. 190

126........ Dealings with undischarged bankrupt in respect of after-acquired property [see Table B]    191

127........ Limitation of time for making claims by trustee etc. [see Table B] 192

128........ Notice to trustee where identity of vendor etc. with bankrupt in doubt 193

Division 4—Realization of property                                                                  194

129........ Trustee to take possession of property of bankrupt..................... 194

129AA.. Time limit for realising property.................................................... 195

129A..... Eligible judges................................................................................. 196

130........ Warrant for seizure of property connected with the bankrupt...... 196

132........ Vesting and transfer of property.................................................... 198

133........ Disclaimer of onerous property [see Table B]............................... 199

134........ Powers exercisable at discretion of trustee [see Table B]............... 202

136........ Right to pay off mortgages [see Table B]....................................... 204

137........ Right of trustee to inspect goods held as security [see Table B]... 204

138........ Limitation of trustee’s power in respect of copyright, patents etc. [see Table B] 205

139........ Protection of trustee from personal liability in certain cases [see Table B]            206

Division 4A—Orders in relation to property of entity controlled by bankrupt  207

139A..... Trustee may apply to Court.......................................................... 207

139B..... Application to be served on respondent entity.............................. 207

139C..... Who may appear at hearing............................................................ 207

139D..... Order relating to property of entity............................................... 207

139E...... Order relating to entity’s net worth............................................... 208

139F...... Court to take account of interests of other persons....................... 209

139G..... Giving effect to orders under sections 139D and 139E.................. 210

139H..... Entity entitled to claim in bankruptcy........................................... 210

Division 4B—Contribution by bankrupt and recovery of property  211

Subdivision A—Preliminary                                                                                 211

139J...... Objects of Division......................................................................... 211

Subdivision B—Interpretation                                                                              211

139K..... Definitions...................................................................................... 211

Subdivision C—Income                                                                                          213

139L...... Meaning of income......................................................................... 213

139M.... Derivation of income...................................................................... 215

139N..... Income varied by income tax payments and refunds and child support payments 216

Subdivision D—Liability of bankrupt to pay contributions                             217

139P...... Liability of bankrupt to pay contribution...................................... 217

139Q..... Change in liability of bankrupt....................................................... 217

139R..... Liability not affected by subsequent discharge.............................. 218

139S...... Contribution payable by bankrupt................................................. 218

139T..... Determination of higher income threshold in cases of hardship..... 218

Subdivision E—Provision of information to trustee                                          221

139U..... Bankrupt to provide evidence of income........................................ 221

139V..... Power of trustee to require bankrupt to provide additional evidence 222

Subdivision F—Assessments of income and contribution                               222

139W.... Assessment of bankrupt’s income and contribution...................... 222

139WA. No time limit on making assessment.............................................. 224

139X..... Basis of assessments...................................................................... 224

139Y..... Trustee may regard bankrupt as receiving reasonable remuneration 224

139Z..... If bankrupt claims not to be in receipt of income........................... 225

Subdivision G—Review of assessment                                                                226

139ZA.. Internal review of assessment......................................................... 226

139ZC... Inspector-General may request further information....................... 227

139ZD.. Decision on review......................................................................... 227

139ZE... Inspector-General to notify bankrupt and trustee of decision....... 227

139ZF... Review of assessment decisions..................................................... 228

Subdivision H—When contribution payable                                                       229

139ZG.. Payment of contribution................................................................. 229

139ZH.. If excess contribution paid.............................................................. 230

139ZI.... Notice of determinations................................................................ 230

Subdivision HA—Supervised account regime                                                   230

139ZIA. Objects............................................................................................ 230

139ZIB. Definitions...................................................................................... 231

139ZIC. Trustee may determine that the supervised account regime applies to the bankrupt             232

139ZID. Revocation of determination........................................................... 233

139ZIDA............................................ When determination ceases to be in force  234

139ZIE.. Bankrupt must open and maintain supervised account.................. 235

139ZIEA...................................................................... New supervised account  236

139ZIF.. Bankrupt’s monetary income to be deposited to supervised account 237

139ZIG. Trustee to supervise withdrawals from supervised account.......... 238

139ZIH. Constructive income receipt arrangements..................................... 240

139ZIHA....................................... Non-monetary income receipt arrangements  242

139ZII... Cash income.................................................................................... 243

139ZIIA Keeping of books............................................................................ 244

139ZIJ.. Injunctions...................................................................................... 244

139ZIK. Interim injunctions.......................................................................... 245

139ZIL.. Discharge etc. of injunctions........................................................... 245

139ZIM Certain limits on granting injunctions not to apply........................ 245

139ZIN. Other powers of the Court unaffected........................................... 246

139ZIO. Inspector-General may review trustee’s decision.......................... 246

139ZIP.. Inspector-General may request further information....................... 247

139ZIR. Inspector-General’s decision on review......................................... 248

139ZIS.. Inspector-General to notify bankrupt and trustee of decision....... 248

139ZIT. AAT review of decisions................................................................ 249

Subdivision I—Collection of money or property by Official Receiver from person other than the bankrupt                250

139ZJ.... Definition [see Table B]................................................................. 250

139ZK.. Persons to whom Subdivision applies [see Table B]..................... 250

139ZL... Official Receiver may require persons to make payments [see Table B]                251

139ZM. Power of Court to set aside notice................................................. 253

139ZN.. Charge over property..................................................................... 253

139ZO.. Failure to comply with notice........................................................ 254

139ZP... Employer not to dismiss or injure bankrupt because of giving of notice 254

Subdivision J—Collection of money or property by Official Receiver from party to transaction that is void against the trustee                                                                                          255

139ZQ.. Official Receiver may require payment [see Table B].................... 255

139ZR... Charge over property [see Table B]............................................... 256

139ZS... Power of Court to set aside notice................................................. 257

139ZT... Failure to comply with notice........................................................ 257

Division 5—Distribution of property                                                                259

140........ Declaration and distribution of dividends....................................... 259

141........ Joint and separate dividends........................................................... 260

142........ Apportionment of expenses of administration of joint and separate estates          260

143........ Provision to be made for creditors residing at a distance etc. [see Table B]            261

144........ Right of creditor who has not proved debt before declaration of dividend              261

145........ Final dividend................................................................................. 261

146........ Distribution of dividends where bankrupt fails to file statement of affairs [see Table B]      262

147........ No action for dividend.................................................................... 262

Part VII—Discharge and annulment                                                                        264

Division 1—Preliminary                                                                                          264

148........ Misleading conduct by bankrupt.................................................... 264

Division 2—Discharge by operation of law                                                   266

Subdivision A—Discharge after certain period                                                266

149........ Automatic discharge....................................................................... 266

149A..... Bankruptcy extended when objection made................................... 267

Subdivision B—Objections                                                                                    268

149B..... Objection to discharge.................................................................... 268

149C..... Form of notice of objection............................................................ 268

149D..... Grounds of objection...................................................................... 269

149F...... Copy of notice of objection to be given to bankrupt..................... 270

149G..... Date of effect of objection.............................................................. 271

149H..... Trustee ceasing to object on some grounds.................................... 271

149J...... Withdrawal of objection................................................................. 271

Subdivision C—Review of objection                                                                     271

149K..... Internal review of objection............................................................ 271

149M.... Inspector-General may request further information....................... 272

149N..... Decision on review......................................................................... 273

149P...... Inspector-General to notify bankrupt and trustee of decision....... 274

149Q..... Review of decisions........................................................................ 275

Division 4—Provisions applicable to all discharges                                 276

152........ Discharged bankrupt to give assistance.......................................... 276

153........ Effect of discharge.......................................................................... 276

Division 5—Annulment of bankruptcy                                                            278

153A..... Annulment on payment of debts.................................................... 278

153B..... Annulment by Court...................................................................... 279

154........ Effect of annulment........................................................................ 279

 


An Act relating to Bankruptcy

Part IPreliminary

  

1  Short title [see Note 1]

                   This Act may be cited as the Bankruptcy Act 1966.

2  Commencement [see Note 1]

                   This Act shall come into operation on a date to be fixed by Proclamation.

4  Repeal

             (1)  The Acts specified in Schedule 1 are repealed.

             (2)  Notwithstanding the repeal of the Bankruptcy Act 1958 or the Bankruptcy Act 1959 effected by subsection (1) of this section:

                     (a)  the provisions of section 7 of the Bankruptcy Act 1958, as amended by the Bankruptcy Act 1959, continue to apply to a purported extension of time or a purported fixing of a time to which those provisions applied immediately before the commencement of this Act; and

                     (b)  the provisions of section 5 of the Bankruptcy Act 1959 continue to apply to a seal or stamp to which those provisions applied immediately before the commencement of this Act;

as if those Acts had not been repealed.


 

Part IAInterpretation

  

5  Interpretation

             (1)  In this Act, unless the contrary intention appears:

ADI (authorised deposit-taking institution) means:

                     (a)  a body corporate that is an ADI for the purposes of the Banking Act 1959; or

                     (b)  the Reserve Bank of Australia; or

                     (c)  any other bank approved in writing for the purposes of this definition:

                              (i)  by the Treasurer; or

                             (ii)  by a person authorised in writing by the Treasurer to give approvals for the purposes of this definition.

administrator, in relation to a debt agreement, means the person:

                     (a)  authorised by the agreement to deal with property under the agreement; or

                     (b)  appointed by the Inspector-General under section 185ZB; or

                     (c)  appointed by an Official Receiver under section 185ZC.

affidavit includes affirmation and statutory declaration.

approved form means a form approved by the Inspector-General.

associated entity, in relation to a person, means:

                     (a)  an entity (other than a company) that is, or has been, associated with the person; or

                     (b)  a company that is, or has been, associated with the person at a time when the company is, or was, as the case may be, a private company.

authorised employee means an APS employee whose duties include either or both of the following:

                     (a)  supporting the Inspector-General in the performance of his or her functions, or in the exercise of his or her powers, under this Act;

                     (b)  supporting the Official Receivers in the performance of their functions, or in the exercise of their powers, under this Act.

available act of bankruptcy, in relation to a debtor, means an act of bankruptcy available for a petition against the debtor at the date of the presentation of the petition on which, or by virtue of the presentation of which, the debtor becomes a bankrupt.

bankrupt means a person:

                     (a)  against whose estate a sequestration order has been made; or

                     (b)  who has become a bankrupt by virtue of the presentation of a debtor’s petition.

bankruptcy, in relation to jurisdiction or proceedings, means any jurisdiction or proceedings under or by virtue of this Act.

books includes any account, deed, paper, writing or document and any record of information however compiled, recorded or stored, whether in writing, on microfilm, by electronic process or otherwise.

breach of duty means malfeasance, misfeasance, negligence, wilful default or breach of trust.

child, in relation to a person, includes an adopted child, a step-child, or an ex-nuptial child, of the person.

close relative, in relation to a person, means a spouse, de facto spouse, parent, child, brother, sister, half-brother, or half-sister, of the person.

company means a corporation, other than a corporation that is incorporated within Australia or an external Territory and is:

                     (a)  a public authority; or

                     (b)  an instrumentality or agency of the Crown in right of the Commonwealth, in right of a State or in right of a Territory of the Commonwealth.

company officer, in relation to a corporation, includes:

                     (a)  a director or secretary of the corporation;

                     (b)  a receiver and manager of property of the corporation appointed under a power contained in an instrument;

                    (ba)  an administrator, within the meaning of the Corporations Act 2001, of the corporation;

                    (bb)  an administrator of a deed of company arrangement executed by the corporation under Part 5.3A of that Act;

                     (c)  an official manager or deputy official manager of the corporation;

                     (d)  a liquidator of the corporation appointed in a voluntary winding up of the corporation; and

                     (e)  a trustee or other person administering a compromise or arrangement made between the corporation and another person or other persons;

but does not include:

                      (f)  a receiver who is not also a manager;

                     (g)  a receiver and manager appointed by a court; or

                     (h)  a liquidator appointed by a court.

confiscation order has the same meaning as in the Proceeds of Crime Act 2002.

constable means a member or special member of the Australian Federal Police or a member of the Police Force of a State or Territory.

corporation includes any body corporate.

corresponding law has the same meaning as in the Proceeds of Crime Act 2002.

court of summary jurisdiction includes a court of a Territory sitting as a court for the making of summary orders or the summary punishment of offences under the law of the Territory.

creditor, in relation to a liability under a maintenance order, includes the Child Support Registrar referred to in the Child Support (Registration and Collection) Act 1988.

creditor’s petition means a petition presented by a creditor or by 2 or more creditors jointly.

debt includes liability.

debt agreement means an agreement under section 185H resulting from the acceptance of a debt agreement proposal.

debt agreement proposal means a written proposal referred to in subsection 185C(1).

debtor’s petition means a petition presented by a debtor against himself or herself and includes a petition presented against a partnership in pursuance of section 56A and a petition presented by joint debtors against themselves in pursuance of section 57.

declaration of intention means a declaration that has been presented under section 54A and accepted under section 54C.

declared debtor means a debtor who has presented under section 54A a declaration of intention.

de facto spouse, in relation to a person, means an individual of the opposite sex to that person who is living with that person as his or her spouse on a bona fide domestic basis although not legally married to that person.

director, in relation to a corporation, includes:

                     (a)  any person occupying or acting in the position of director of the corporation, by whatever name called and whether or not validly appointed to occupy, or duly authorised to act in, the position;

                     (b)  any person in accordance with whose directions or instructions the directors of the corporation are accustomed to act; and

                     (c)  if the corporation has a committee of management, council or other governing body:

                              (i)  a member of that committee of management, council or other governing body;

                             (ii)  any person occupying or acting in the position of member of that committee of management, council or other governing body, by whatever name called and whether or not validly appointed to occupy, or duly authorised to act, in the position; and

                            (iii)  any person in accordance with whose directions or instructions the members of that committee of management, council or other governing body are accustomed to act.

District means a part of Australia declared to be a Bankruptcy District for the purposes of this Act.

eligible judge means a judge of the Court declared by the Minister to be an eligible judge under subsection 129A(2).

end means:

                     (a)  in relation to a bankruptcy—the discharge of the bankrupt from the bankruptcy or the annulment of the bankruptcy; or

                     (b)  in relation to a composition or scheme of arrangement under Division 6 of Part IV—the time when the composition or scheme, as the case may be, ceases to be in effect; or

                    (ba)  in relation to a personal insolvency agreement—the time when all the obligations that the agreement created have been discharged; or

                     (c)  in relation to an administration under Part XI—the end of the administration.

enforcement process, in relation to a frozen debt, means, in the case of a judgment debt:

                     (a)  process of a court issued to enforce in any manner payment of the judgment debt; or

                     (b)  without limiting the generality of paragraph (a), process of a court for attaching, in order to meet the judgment debt, a debt or other money payable or owing, or to become payable or owing, to the declared debtor.

entity means a natural person, company, partnership or trust.

examinable affairs, in relation to a person, means:

                     (a)  the person’s dealings, transactions, property and affairs; and

                     (b)  the financial affairs of an associated entity of the person, in so far as they are, or appear to be, relevant to the person or to any of his or her conduct, dealings, transactions, property and affairs.

examinable period, in relation to an application under section 139A by the trustee of a bankrupt’s estate, means the period beginning:

                     (a)  if, at a time or times during the period beginning 4 years before, and ending 2 years before, the commencement of the bankruptcy, the bankrupt became unable to pay his or her debts, as they became due, from his or her own money—at that time, or at the first of those times, as the case may be; or

                     (b)  in any other case—2 years before the commencement of the bankruptcy;

and ending on the day on which the application is made.

examinable person, in relation to a person (in this definition called the relevant person), means:

                     (a)  if the relevant person is a debtor and property of the debtor is known or suspected to be in the possession of a person—that person;

                     (b)  if the relevant person has become a bankrupt and any of the property of the bankrupt is known or suspected to be in the possession of a person—that person;

                     (c)  in any case—a person who is believed to be indebted to the relevant person;

                     (d)  if a person, including:

                              (i)  a person who is an associated entity of the relevant person; or

                             (ii)  a person with whom an associated entity of the relevant person is or has been associated;

                            may be able to give information about the relevant person or any of the relevant person’s examinable affairs—that person; or

                     (e)  if books (including books of an associated entity of the relevant person):

                              (i)  are in the possession of a person, including a person of a kind referred to in subparagraph (d)(i) or (ii); and

                             (ii)  may relate to the relevant person or any of the relevant person’s examinable affairs;

                            that person.

Family Court Judge means a Judge of the Family Court (including the Chief Judge, the Deputy Chief Judge, a Judge Administrator or a Senior Judge).

forfeiture order means a forfeiture order made under a proceeds of crime law.

frozen debt means a debt that:

                     (a)  is owed by a declared debtor; and

                     (b)  would, if the debtor had become a bankrupt when the declaration of intention was accepted under section 54C, be provable in the bankruptcy;

but does not include a debt in respect of the debtor’s liability under a maintenance agreement or maintenance order (whenever entered into or made).

goods includes all chattels personal.

Inspector-General means the Inspector-General in Bankruptcy, and includes a person acting as the Inspector-General.

interstate confiscation order means an interstate forfeiture order or an interstate pecuniary penalty order.

interstate forfeiture order has the same meaning as in the Proceeds of Crime Act 2002.

interstate pecuniary penalty order has the same meaning as in the Proceeds of Crime Act 2002.

in the possession of includes in the custody of or under the control of.

magistrate means:

                     (a)  a person who holds office as a Magistrate of a State, being a person in respect of whom an arrangement under subsection 17B(1) applies;

                     (b)  a person who holds office as a Magistrate of the Northern Territory, being a person in respect of whom an arrangement under subsection 17B(2) applies; or

                     (c)  a person who holds office as a Magistrate of a Territory of the Commonwealth (other than the Northern Territory).

Note:          A Federal Magistrate is not covered by this definition.

maintenance agreement means:

                     (a)  a maintenance agreement (within the meaning of the Family Law Act 1975) that has been registered in, or approved by, a court in Australia or an external Territory; or

                     (b)  a financial agreement within the meaning of that Act; or

                     (c)  any other agreement with respect to the maintenance of a person that has been registered in, or approved by, a court in Australia or an external Territory.

maintenance order means:

                     (a)  an order relating to the maintenance of a person, including an order relating to the payment of arrears of maintenance, that is made or registered under a law of the Commonwealth or of a State or Territory of the Commonwealth; or

                     (b)  an assessment made under the Child Support (Assessment) Act 1989.

modifications includes additions, omissions and substitutions.

National Personal Insolvency Index means the Index of that name established under the regulations.

net value, in relation to property, means:

                     (a)  if the property is unencumbered—the value of the property;

                     (b)  if the property is encumbered and the unencumbered value of the property exceeds the amount or value of the encumbrances—the amount of the excess; or

                     (c)  in any other case—a nil amount.

net worth, in relation to an entity, in relation to a time, means:

                     (a)  if the entity is a trust and the total value of the trust property as at that time exceeds the total of the amounts of the trustee’s liabilities as at that time (other than liabilities constituted by the rights of persons as beneficiaries under the trust)—the amount of the excess;

                     (b)  if the entity is not a trust and the total value of the entity’s assets as at that time exceeds the total of the amounts of the entity’s liabilities as at that time—the amount of the excess; or

                     (c)  in any other case—a nil amount.

oath includes affirmation and statutory declaration.

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

officer means an officer of the Court or of the Commonwealth.

Official Receiver includes a person acting as an Official Receiver.

Official Trustee means the Official Trustee in Bankruptcy.

operations, in relation to an entity, means all of the following:

                     (a)  the business, trading, transactions and dealings of the entity:

                              (i)  whether alone or jointly with another entity or other entities; and

                             (ii)  whether or not as agent, bailee or trustee;

                     (b)  the profits, income and receipts of the entity;

                     (c)  the losses, outgoings and expenditure of the entity.

parent, in relation to a person, means a person of whom the first-mentioned person is a child.

pecuniary penalty order means:

                     (a)  a pecuniary penalty order made under a proceeds of crime law; or

                     (b)  a literary proceeds order within the meaning of the Proceeds of Crime Act 2002.

personal insolvency agreement means a personal insolvency agreement executed under Part X.

Note:          Section 188A sets out requirements for personal insolvency agreements.

personal services, in relation to a bankrupt, means services of a physical, intellectual or other kind supplied by the bankrupt himself or herself:

                     (a)  whether or not in a capacity as employee; and

                     (b)  whether or not the supply of the services by the bankrupt discharged the obligations of an entity to supply services.

petition means a petition under this Act.

premises includes:

                     (a)  any land;

                     (b)  any structure, building, aircraft, vehicle, vessel or place (whether built on or not); and

                     (c)  any part of such a structure, building, aircraft, vehicle, vessel or place.

private company, in relation to a particular time, means a company other than a company that, as at that time:

                     (a)  has been admitted to the official list of a prescribed financial market (as defined by section 9 of the Corporations Act 2001); and

                     (b)  has not been removed from that official list.

proceeding means proceeding under this Act.

proceeds, in relation to enforcement process in respect of a debt, means:

                     (a)  the proceeds of selling property under the enforcement process;

                     (b)  money taken under the enforcement process;

                     (c)  money received as a result of attachment under the enforcement process; or

                     (d)  money paid to avoid the taking or sale of property under, or to avoid attachment under, the enforcement process.

proceeds of crime law means:

                     (a)  the Proceeds of Crime Act 2002; or

                     (b)  the Proceeds of Crime Act 1987; or

                     (c)  a corresponding law.

proceeds of crime order means:

                     (a)  a restraining order; or

                     (b)  a forfeiture order; or

                     (c)  a pecuniary penalty order.

proclaimed law means a law specified for the time being in a Proclamation in force under section 253B.

professional advice means financial, business or legal advice given by a person in the performance of the functions attaching to the person’s professional capacity.

property means real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property.

provable debt means a debt or liability that is, under this Act, provable in bankruptcy.

provider, in relation to an RSA, has the same meaning as in the Retirement Savings Accounts Act 1997.

registered trustee means a person who is registered under this Act as qualified to act as a trustee.

Registrar means:

                     (a)  the Registrar, a Deputy Registrar, a District Registrar or a Deputy District Registrar of the Federal Court; or

                     (b)  a Registrar of the Federal Magistrates Court.

related entity, in relation to a person, means any of the following:

                     (a)  a relative of the person;

                     (b)  a body corporate of which the person, or a relative of the person, is a director;

                     (c)  a body corporate that is related to the body corporate referred to in paragraph (b);

                     (d)  a director, or a relative of a director, of a body corporate referred to in paragraph (b) or (c);

                     (e)  a beneficiary under a trust of which the person, or a relative of the person, is a trustee;

                      (f)  a relative of such a beneficiary;

                     (g)  a relative of the spouse of such a beneficiary;

                     (h)  a trustee of a trust under which the person, or a relative of the person, is a beneficiary;

                      (i)  a member of a partnership of which the person, or a relative of the person, is a member;

For the purposes of paragraph (c) of this definition, the question whether a body corporate is related to another body corporate is to be determined in the same manner as that question is determined for the purposes of the Corporations Act 2001.

relative, in relation to a person, means:

                     (a)  the spouse of the person; or

                     (b)  a parent or remoter lineal ancestor of the person or of the person’s spouse; or

                     (c)  a child or remoter lineal descendant of the person or of the person’s spouse; or

                     (d)  a brother or sister of the person or of the person’s spouse; or

                     (e)  an uncle, aunt, nephew or niece of the person or of the person’s spouse; or

                      (f)  the spouse of a person specified in paragraph (b), (c), (d) or (e).

For the purposes of this definition, spouse includes de facto spouse.

Note:          Parent and child are defined by this subsection.

resolution means a resolution passed by a majority in value of the creditors present personally, by telephone, by attorney or by proxy at a meeting of creditors and voting on the resolution.

restraining order means a restraining order made under a proceeds of crime law.

RSA has the same meaning as in the Retirement Savings Accounts Act 1997.

RSA holder has the same meaning as in the Retirement Savings Accounts Act 1997.

secured creditor, in relation to a debtor, means a person holding a mortgage, charge or lien on property of the debtor as a security for a debt due to him or her from the debtor.

sheriff includes any person charged with the execution of a writ or other process.

special resolution means a resolution passed by a majority in number and at least three-fourths in value of the creditors present personally, by telephone, by attorney or by proxy at a meeting of creditors and voting on the resolution.

state of affairs, in relation to an entity, means all of the following:

                     (a)  the property and assets of the entity:

                              (i)  whether held alone or jointly with another person or other persons; and

                             (ii)  whether or not held as agent, bailee or trustee;

                     (b)  the liabilities of the entity:

                              (i)  whether actual or contingent;

                             (ii)  whether owed alone or jointly with another person or other persons; and

                            (iii)  whether or not owed as trustee.

stay period, in relation to a declaration of intention presented by a debtor, means the period beginning on the day on which the declaration was accepted under section 54C and ending when:

                     (a)  the period of 7 days beginning on that day ends;

                     (b)  a creditor’s petition or a debtor’s petition is presented against the debtor;

                     (c)  the debtor signs an authority under section 188; or

                     (d)  a sequestration order is made against the debtor;

whichever happens first.

stay under a proclaimed law, in relation to a person or the estate of a deceased person, means a stay, by or under a proclaimed law, of proceedings or of execution in relation to all or any of the debts of that person or of that estate, as the case may be.

Territory, except in the expression “Territory of the Commonwealth”, means the Australian Capital Territory or the Northern Territory of Australia.

the commencement of the bankruptcy, in relation to a bankrupt, means the time at which his or her bankruptcy is, by virtue of section 115, to be deemed to have commenced.

the Court means a Court having jurisdiction in bankruptcy under this Act.

the date of the bankruptcy, in relation to a bankrupt, means the date on which a sequestration order was made against his or her estate or, if he or she became a bankrupt by virtue of the presentation of a debtor’s petition, the date on which he or she became a bankrupt by force of section 55, 56E or 57, as the case requires.

the Family Court means the Family Court of Australia.

the Federal Court means the Federal Court of Australia.

the Official Receiver:

                     (a)  in relation to a matter referred to in section 5AA, means the Official Receiver for the District in which the matter originated, as determined under section 5AA; and

                     (b)  in any other case, means any Official Receiver.

the property of the bankrupt, in relation to a bankrupt, means:

                     (a)  except in subsections 58(3) and (4):

                              (i)  the property divisible among the bankrupt’s creditors; and

                             (ii)  any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt; and

                     (b)  in subsections 58(3) and (4):

                              (i)  the property, rights and powers referred to in paragraph (a) of this definition; and

                             (ii)  any other property of the bankrupt.

the trustee means:

                     (a)  in relation to a bankruptcy—the trustee of the estate of the bankrupt; or

                     (b)  in relation to a composition or scheme of arrangement under Division 6 of Part IV—the trustee of the composition or scheme of arrangement; or

                     (c)  in relation to a personal insolvency agreement—the trustee of the agreement; or

                     (d)  in relation to the estate of a deceased person in respect of which an order has been made under Part XI—the trustee of the estate; or

                     (e)  in relation to a trust:

                              (i)  if only one person is a trustee of the trust—that person; or

                             (ii)  if 2 or more persons are trustees of the trust—any one or more of those persons;

                            in his, her or its capacity as a trustee, or in their respective capacities as trustees, as the case may be, of the trust.

this Act includes the regulations.

          (1A)  A reference in this Act to books of an associated entity of a person does not limit the generality of any other reference in this Act to books.

          (1B)  A reference in this Act to an entity includes, in the case of a trust, a reference to the trustee of the trust.

          (1C)  Paragraph (b) of the definition of examinable affairs in subsection (1) does not limit the generality of a reference in this Act to a person’s conduct, dealings, transactions, property or affairs.

             (2)  A person is solvent if, and only if, the person is able to pay all the person’s debts, as and when they become due and payable.

             (3)  A person who is not solvent is insolvent.

             (4)  Unless the contrary intention appears, a reference in this Act to the trustee of the estate of a bankrupt, or to the trustee of a personal insolvency agreement, shall:

                     (a)  in relation to an estate or a personal insolvency agreement in respect of which there are 2 or more joint trustees—be read as a reference to all the trustees; or

                     (b)  in relation to an estate or a personal insolvency agreement in respect of which there are 2 or more joint and several trustees—be read as a reference to all of the trustees or any one or more of the trustees.

             (5)  To avoid doubt, a Federal Magistrate is taken to be a Judge of a Court having jurisdiction under this Act.

5AA  Place of origin of bankruptcy and insolvency matters

             (1)  This section identifies the place of origin of each of the matters set out in column 2 of the table. The place of origin of each matter is worked out using column 3 of the table.

Place of origin of bankruptcy and insolvency matters

 

Matter

Place of origin

1

Bankruptcy that resulted from acceptance of a debtor’s petition

The District in which the debtor’s petition was accepted

2

Any other bankruptcy

The District in which the sequestration order was made

3

Control of a debtor’s property under section 50

The District in which the Court made an order directing a trustee to take control of the debtor’s property

4

Scheme of arrangement or composition under Division 6 of Part IV

The District in which there originated the bankruptcy that was annulled under section 74 on acceptance of the proposal for the scheme or composition

5

Matter relating to a debt agreement proposal

The District in which the debt agreement proposal was accepted for processing

6

Part X administration

The District in which the Official Receiver was given a copy of the authority under section 188 that relates to the administration

7

Administration under Part XI

The District in which the Court made the order for the administration

             (2)  For the purposes of item 6 of the table, an authority under section 188 relates to a personal insolvency agreement if a special resolution relating to the agreement was passed at a meeting of creditors called under the authority.

             (3)  In this section:

matter relating to a debt agreement proposal includes:

                     (a)  a debt agreement; and

                     (b)  an activity required or permitted by a debt agreement.

Part X administration means:

                     (a)  an activity that a controlling trustee may or must carry out after consenting to exercise powers given by an authority under section 188 (including control of a debtor’s property under Division 2 of Part X); or

                     (b)  a personal insolvency agreement.

5A  Acting in accordance with a person’s directions or instructions

                   For the purposes of this Act, a person shall not be regarded as a person in accordance with whose directions or instructions the directors of a body corporate are accustomed to act merely because the directors act on advice given by the person in the proper performance of the functions attaching to the person’s professional capacity or to the person’s business relationship with the directors or with the body corporate.

5B  Associated entities: companies

             (1)  For the purposes of this Act, a company is associated with a person if the person:

                     (a)  is a company officer of the company or otherwise is concerned, or takes part, in the company’s management; or

                     (b)  is able to control, or to influence materially, the company’s activities or internal affairs; or

                     (c)  is a member of the company; or

                     (d)  is in a position to cast, or to control the casting of, a vote at a general meeting of the company; or

                     (e)  has power to dispose of, or to exercise control over the disposal of, a share in the company; or

                      (f)  is financially interested in the company’s success or failure or apparent success or failure; or

                     (g)  is owed a debt by the company; or

                     (h)  is employed, or is engaged under a contract for services, by the company; or

                      (j)  acts as agent for the company in any transaction or dealing; or

                     (k)  gives professional advice to the company.

             (2)  For the purposes of this Act, a company is also associated with a person if the company:

                     (a)  holds property jointly with the person; or

                     (b)  is dealing with the person’s property as an agent for the person; or

                     (c)  is a trustee of a trust under which the person is capable of benefiting; or

                     (d)  acquires or disposes of property as a result of dealing with the person.

             (3)  The circumstances set out in subsections (1) and (2) are the only circumstances in which a company is associated with a person for the purposes of this Act.

5C  Associated entities: natural persons

             (1)  For the purposes of this Act, a natural person (in this section called the associate) is associated with another person if the other person:

                     (a)  holds property jointly with the associate; or

                     (b)  is a trustee of a trust under which the associate is capable of benefiting; or

                    (ba)  can benefit under a trust of which the associate is a trustee; or

                     (c)  is employed, or is engaged under a contract for services, by the associate; or

                     (d)  acts as agent for the associate in any transaction or dealing; or

                    (da)  is a principal for whom the associate acts as an agent; or

                     (e)  is an attorney of the associate under a power of attorney; or

                      (f)  has appointed the associate as the other person’s attorney under a power of attorney; or

                     (g)  gives professional advice to the associate; or

                     (h)  is given professional advice by the associate.

             (2)  A natural person (the associate) is also associated with another person if the associate has acquired or disposed of property as a result of dealing with the other person.

             (3)  The circumstances set out in subsections (1) and (2) are the only circumstances in which a natural person is associated with another person for the purposes of this Act.

5D  Associated entities: partnerships

                   For the purposes of this Act, a partnership is associated with a person if, and only if, the person:

                     (a)  is a partner in the partnership;

                     (b)  is able to control, or to influence materially, the partnership’s activities or internal affairs;

                     (c)  is financially interested in the partnership’s success or failure or apparent success or failure;

                     (d)  is a creditor of the partnership;

                     (e)  is employed, or is engaged under a contract for services, by the partnership;

                      (f)  acts as agent for the partnership in any transaction or dealing; or

                     (g)  gives professional advice to the partnership.

5E  Associated entities: trusts

                   For the purposes of this Act, a trust is associated with a person if, and only if, the person:

                     (a)  is the settlor, or one of the settlors, of the trust;

                     (b)  has power under the terms of the trust to appoint or remove a trustee of the trust or to vary, or cause to be varied, any of the terms of the trust;

                     (c)  is a trustee of the trust;

                     (d)  is able to control, or to influence materially, the activities of the trustee of the trust;

                     (e)  if a trustee of the trust is a company—is a company officer of the company or otherwise is concerned, or takes part, in the company’s management;

                      (f)  is capable of benefiting under the trust;

                     (g)  is a creditor of the trustee of the trust;

                     (h)  is employed, or is engaged under a contract for services, by the trustee of the trust;

                      (j)  acts as agent for the trustee of the trust in any transaction or dealing; or

                     (k)  gives professional advice to the trustee of the trust.

5F  Controlling an entity in relation to a matter

             (1)  Subject to this section, a person shall be taken, for the purposes of this Act, to control an entity at a particular time in relation to a matter if, and only if:

                     (a)  no act, omission or decision inconsistent with the person’s directions, instructions or wishes was; and

                     (b)  having regard to all the circumstances, it may reasonably be expected that no such act, omission or decision would have been;

done or made at that time, in relation to the matter, by or on behalf of the entity.

             (2)  A person shall not be taken to control an entity at a particular time in relation to a matter merely because:

                     (a)  no act, omission or decision inconsistent with advice given by the person in the proper performance of the functions attaching to his or her professional capacity, or to his or her business relationship with the entity, was; and

                     (b)  having regard to all the circumstances, it may reasonably be expected that no such act, omission or decision would have been;

done or made at that time, in relation to that matter, by or on behalf of the entity.

             (3)  A reference in subsection (1) or (2), in relation to a matter, to an act, omission or decision is a reference to an act, omission or decision that, having regard to the nature of that matter, is of substantial importance.

             (4)  A person shall not be taken to control a company at a particular time in relation to a matter if the company is not a private company at that time.

5G  Financial affairs of a company

                   For the purposes of this Act, a company’s financial affairs include:

                     (a)  the company’s promotion, formation, membership, control, operations and state of affairs;

                     (b)  the management and proceedings of the company;

                     (c)  any act or thing done (including any contract made and any transaction entered into) by or on behalf of the company, or to or in relation to the company or its business or property, at a time when:

                              (i)  a receiver, or a receiver and manager, is in possession of, or has control over, property of the company;

                            (ia)  the company is under administration within the meaning of the Corporations Act 2001;

                            (ib)  a deed of company arrangement that the company executed under Part 5.3A of that Act has not yet terminated;

                             (ii)  the company is under official management;

                            (iii)  a compromise or arrangement made between the company and another person or other persons is being administered; or

                            (iv)  the company is being wound up;

                            and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of an administrator (within the meaning of that Act) of the company, of an administrator of such a deed, of any person appointed as the official manager or deputy official manager of the company, of any person administering such a compromise or arrangement or of any liquidator or provisional liquidator of the company;

                     (d)  the ownership of shares in, and debentures of, the company;

                     (e)  the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the company or to dispose of, or to exercise control over the disposal of, such shares;

                      (f)  the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, or debentures of, the company; and

                     (g)  matters concerned with ascertaining the persons with whom the company is or has been associated.

5H  Financial affairs of a natural person

                   For the purposes of this Act, the financial affairs of a natural person include:

                     (a)  the person’s operations and state of affairs;

                     (b)  any act or thing done (including any contract made and any transaction entered into) by or on behalf of the person, or to or in relation to the person or his or her business or property, at a time when:

                              (i)  the person was, under this Act or the law of an external Territory, a bankrupt in respect of a bankruptcy from which the person had not been discharged;

                             (ii)  the person had, under the law of an external Territory or the law of a country other than Australia, the status of an undischarged bankrupt;

                            (iii)  the property of the person was subject to control under Division 2 of Part X by reason of an authority given by the person under section 188; or

                            (iv)  a personal insolvency agreement under Part X or under the corresponding provisions of a law of an external Territory or a country other than Australia was in effect in relation to the person or the person’s property;

                     (c)  without limiting the generality of paragraph (b), any conduct of the trustee of such a bankrupt estate or of such a personal insolvency agreement or a person acting under such an authority; and

                     (d)  matters concerned with ascertaining the persons with whom the person is or has been associated.

5J  Financial affairs of a partnership

                   For the purposes of this Act, the financial affairs of a partnership include:

                     (a)  the partnership’s promotion, formation, membership, control, operations and state of affairs;

                     (b)  the management and proceedings of the partnership;

                     (c)  any act or thing done (including any contract made and transaction entered into) on behalf of the partnership, or to or in relation to the partnership, at a time when the partnership is being wound up; and

                     (d)  matters concerned with ascertaining the persons with whom the partnership is or has been associated.

5K  Financial affairs of a trust

                   For the purposes of this Act, the financial affairs of a trust include:

                     (a)  the creation of the trust;

                     (b)  matters arising under, or otherwise relating to, the terms of the trust;

                     (c)  the appointment and removal of a trustee of the trust;

                     (d)  the business, trading, transactions and dealings of the trustee of the trust;

                     (e)  the profits, income and receipts of the trustee of the trust;

                      (f)  the losses, outgoings and expenditure of the trustee of the trust;

                     (g)  the trust property, including transactions and dealings in, and the income arising from, the trust property;

                     (h)  the liabilities of the trustee of the trust;

                      (j)  the management of the trust;

                     (k)  any act or thing done (including any contract made and transaction entered into) by or on behalf of the trustee of the trust, or to or in relation to the trust, at a time when the trust is being wound up;

                    (m)  matters concerned with ascertaining the persons with whom the trust is or has been associated; and

                     (n)  matters concerned with ascertaining the rights of the beneficiaries under the trust and any payments, or distributions of property, that the beneficiaries have received, or are entitled to receive, under the terms of the trust.

6  Meaning of intent to defraud creditors

                   A reference in this Act to an intent to defraud the creditors of a person or to defeat or delay the creditors of a person shall be read as including an intent to defraud, or to defeat or delay, any one or more of those creditors.

6A  Statement of affairs for purposes other than Part XI

             (1)  This section has effect for the purposes of the following provisions of this Act, namely, subsections 54(1) and (2), paragraphs 55(2)(b), 56B(3)(a) and (b), 56F(1)(a) and (b), 57(2)(a) and (b) and sections 185D and Part X.

             (2)  A reference in a provision of this Act referred to in subsection (1) to a statement of affairs is a reference to a statement that:

                     (a)  is in a form approved by the Inspector-General and published in the Gazette; and

                     (b)  includes a statement identifying any creditor who is a related entity of the debtor or bankrupt; and

                     (c)  contains a declaration, signed by the debtor or bankrupt, that, so far as the debtor or bankrupt is aware, the particulars set out in the statement are correct.

             (3)  If the trustee has reasonable grounds to suspect that:

                     (a)  any particulars set out in a statement of affairs that was filed by a person are false or misleading in a material respect; or

                     (b)  any material particulars have been omitted from that statement;

the trustee may, by written notice given to the person, require the person, within a specified period of not less than 14 days, to provide such information or to produce such books as are specified in the notice for the purpose of enabling the trustee to decide whether the particulars set out in the statement are correct.

             (4)  For the purposes of the application of subsection (3) to a statement of affairs that is required to be given under Part X, a reference in that subsection to the trustee is a reference to whichever of the following is applicable:

                     (a)  the controlling trustee within the meaning of that Part;

                     (b)  the trustee of the personal insolvency agreement concerned.

6B  Provision of statement of affairs under Part XI and statement of administration of estate of deceased person

             (1)  This section has effect for the purposes of the following provisions of this Act, namely, paragraph 246(1)(a) and subsection 247(1).

             (2)  A reference in a provision of this Act referred to in subsection (1) to a statement of affairs or to a statement of a person’s administration of a deceased person’s estate is a reference to a statement of those affairs and of that administration that:

                     (a)  is in a form that has been:

                              (i)  approved by the Inspector-General for the purposes of the provision under which the statement is made; and

                             (ii)  published in the Gazette; and

                     (b)  is verified by affidavit.

             (3)  If the trustee administering the estate of a deceased person under Part XI has reasonable grounds to suspect that:

                     (a)  any particulars set out in a statement of affairs that was filed by a person under subsection 246(1) or 247(1) are false or misleading in a material respect; or

                     (b)  any material particulars have been omitted from that statement;

the trustee may give the person a written notice requiring the person to provide specified information or books within a specified period of at least 14 days to enable the trustee to decide whether the particulars set out in the statement are correct.

6C  Interpretive provisions relating to proceeds of crime orders

When property is covered by a restraining order or a forfeiture order

             (1)  For the purposes of this Act, property is covered by a restraining order or a forfeiture order during the period:

                     (a)  starting when the order comes into force in relation to the property; and

                     (b)  ending when the earliest of the following occurs:

                              (i)  the order ceases to be in force;

                             (ii)  a court excludes the property from the order;

                            (iii)  if the order is a restraining order—a court excludes the property from forfeiture that would or may result from conviction for an offence.

Satisfaction of pecuniary penalty orders

             (2)  Without limiting the circumstances in which a pecuniary penalty order ceases to be in force, a pecuniary penalty order ceases to be in force if it is satisfied.

When applications for proceeds of crime orders are finally determined

             (3)  For the purposes of this Act, an application for a proceeds of crime order is taken to be finally determined when:

                     (a)  the application is withdrawn; or

                     (b)  if the application is successful—the resulting proceeds of crime order comes into force; or

                     (c)  if the application is unsuccessful—the time within which an appeal can be made has expired and any appeals have been finally determined or otherwise disposed of.


 

Part IBApplication of Act

  

  

7  Application of Act

             (1)  This Act extends to debtors being persons who are not Australian citizens and persons who have privilege of Parliament.

          (1A)  This Act applies to debtors whether or not they have attained the age of 18 years.

             (2)  A sequestration order shall not be made against, nor a debtor’s petition presented by:

                     (a)  a corporation; or

                     (b)  a partnership or association registered under a law of the Commonwealth, of a State, or of a Territory of the Commonwealth, that provides for the winding up of a partnership or association registered under that law.

             (3)  This Act applies, with any modifications prescribed by the regulations, in relation to limited partnerships as if they were ordinary partnerships and, upon all the general partners of a limited partnership becoming bankrupt, the assets of the limited partnership shall vest in the trustee.

7A  Application of the Criminal Code

                   Chapter 2 of the Criminal Code applies to all offences against this Act.

Note:          Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

8  Act to bind the Crown

                   This Act binds the Crown in right of the Commonwealth, of each of the States and of the Northern Territory.

9  Laws of States and Territories not affected by Act

             (1)  This Act does not affect a law of a State or Territory relating to matters not dealt with expressly or by necessary implication in this Act.


 

Part IIAdministration

Division 1General

10  Delegation by Minister or Secretary

             (1)  The Minister may, either generally or as otherwise provided in the instrument of delegation, by writing signed by him or her, delegate to an officer all or any of the Minister’s powers under this Act, other than this power of delegation.

             (2)  A power delegated under subsection (1) shall, when exercised by a delegate, be deemed to have been exercised by the Minister.

             (3)  A delegation under subsection (1) does not prevent the exercise of a power by the Minister.

             (4)  The Secretary may, either generally or as otherwise provided in the instrument of delegation, by writing signed by him or her, delegate to an officer all or any of the Secretary’s powers under this Act, other than this power of delegation.

             (5)  A power delegated under subsection (4) shall, when exercised by a delegate, be deemed to have been exercised by the Secretary.

             (6)  A delegation under subsection (4) does not prevent the exercise of a power by the Secretary.

             (7)  In this section:

exercise includes perform.

power includes a function.

Secretary means the Secretary to the Department.

11  Inspector-General in Bankruptcy

             (1)  For the purposes of this Act, there shall be an Inspector-General in Bankruptcy.

             (2)  The Inspector-General has:

                     (a)  the general administration of this Act; and

                     (b)  the other powers and other functions conferred or imposed on him or her by this Act.

             (3)  The Inspector-General may exercise any of the powers (including the power under section 18), and perform any of the functions, of an Official Receiver, in the same way as the Official Receiver.

             (4)  The Inspector-General may by signed instrument delegate to an authorised employee all or any of the powers and functions of the Inspector-General under this Act.

12  Functions of Inspector-General

             (1)  The Inspector-General:

                     (a)  shall make such inquiries and investigations as the Minister directs; and

                     (b)  may make such inquiries and investigations as the Inspector-General thinks fit with respect to the administration of, or the conduct of a trustee (including a controlling trustee) in relation to:

                              (i)  a bankruptcy; or

                             (ii)  a composition or scheme of arrangement under Division 6 of Part IV; or

                            (iii)  a personal insolvency agreement; or

                            (iv)  an administration under Part XI; or

                             (v)  property in relation to which a direction has been given under subsection 50(1); or

                            (vi)  property in relation to which the trustee is the controlling trustee under an authority given under section 188; and

                    (ba)  may make such inquiries and investigations as the Inspector-General thinks fit with respect to so much of the conduct and examinable affairs of:

                              (i)  a bankrupt; or

                             (ii)  a bankrupt or debtor under a composition or scheme of arrangement under Division 6 of Part IV; or

                           (iia)  a debtor under a debt agreement proposal or debt agreement under Part IX; or

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

                            (iii)  a debtor under a personal insolvency agreement;

                            as is relevant to the bankruptcy, composition, scheme or agreement, as the case may be; and

                    (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

                     (c)  shall from time to time obtain from Official Receivers and other officers and from registered trustees reports as to the operation of this Act; and

                     (d)  must give the Minister, after the end of each financial year, a report on the operation of this Act during that financial year for presentation by the Minister to the Parliament.

          (1A)  Where the Inspector-General requests a registered trustee, for the purposes of subsection (1), to provide a report as to the operation of this Act, the registered trustee shall forthwith provide the report requested.

        (1BA)  The Inspector-General may make an inquiry or investigation under paragraph (1)(b) or (ba) at any time, whether before or after the end of the bankruptcy, composition, scheme or agreement or administration concerned.

          (1B)  Where the Inspector-General makes an inquiry or investigation referred to in paragraph (1)(b) or (ba), the Inspector-General may give a copy of the report of the results of the inquiry or investigation to any person the Inspector-General thinks fit.

          (1C)  Without limiting the generality of paragraphs (1)(a) and (b), the Inspector-General may make inquiries and investigations under those paragraphs at the request of:

                     (a)  if the Inspector-General is satisfied that the request relates to an application, or proposed application, for a confiscation order—the Director of Public Prosecutions; or

                     (b)  if the Inspector-General is satisfied that the request relates to an application, or proposed application, for an interstate confiscation order—a person who is entitled, under a corresponding law, to apply for an order of that kind.

             (2)  For the purposes of discharging his or her functions under this Act, the Inspector-General may:

                     (a)  require the production of any books kept by an Official Receiver or by a trustee; and

                     (b)  require a trustee to answer an inquiry made to him or her in relation to any of the following matters in which the trustee is, or has been, engaged:

                              (i)  a bankruptcy;

                             (ii)  the control of property under an authority given under section 188;

                            (iii)  an administration under Part XI;

                            (iv)  a personal insolvency agreement, scheme of arrangement or composition; and

                     (c)  at any time investigate the books of a trustee.

             (4)  The Inspector-General:

                     (a)  is entitled to attend any meeting of creditors held under this Act; and

                     (b)  subject to section 64ZA, is entitled to participate in any such meeting as the Inspector-General thinks fit.

13  Bankruptcy Districts

                   The Inspector-General, by notice in the Gazette, may declare any part, or any parts, of Australia to be a Bankruptcy District for the purposes of this Act.

15  Official Receivers

             (1)  There shall be for each District an Official Receiver and such officers to assist the Official Receiver in the performance of his or her functions under this Act as are necessary.

             (3)  Each Official Receiver has such powers and functions as are conferred or imposed on an Official Receiver by this Act.

             (4)  An Official Receiver may by signed instrument delegate to an authorised employee all or any of the powers and functions of the Official Receiver under this Act.

             (5)  The Court may review an act done by an Official Receiver.

Note:          Section 303 explains who may apply to the Court for review of an Official Receiver’s action.

16  Appointment of Inspector-General and Official Receivers

                   The Inspector-General and each Official Receiver shall be appointed by the Minister.

17  Acting Inspector-General and Acting Official Receivers

             (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.

             (7)  The validity of anything done by a person purporting to act under this section shall not be called in question on the ground that the occasion for his or her appointment had not arisen, that there is a defect or irregularity in or in connection with his or her appointment, that the appointment had ceased to have effect or that the occasion for him or her to act had not arisen or had ceased.

17B  Arrangements for services of State and Northern Territory Magistrates

             (1)  The Governor-General may arrange with the Governor of a State for the performance of the functions of a magistrate under this Act by all or any of the persons who from time to time hold office as Magistrates of the State.

             (2)  The Governor-General may arrange with the Administrator of the Northern Territory for the performance of the functions of a magistrate under this Act by all or any of the persons who from time to time hold office as Magistrates of the Territory.

18  The Official Trustee in Bankruptcy

             (1)  The corporation sole known as the Official Trustee in Bankruptcy, that existed immediately before this subsection commenced, continues in existence as a body corporate with the same name.

             (2)  The body corporate continued in existence by force of subsection (1):

                     (a)  has perpetual succession;

                     (b)  may acquire, hold and dispose of real and personal property; and

                     (c)  may sue and be sued in its corporate name.

             (4)  The Official Trustee shall have such seals as the Minister directs by writing under his or her hand.

             (5)  The designs of the seals of the Official Trustee shall be as determined by the Minister by writing under his or her hand.

             (7)  All courts (whether exercising federal jurisdiction or not), and all persons acting judicially, shall take judicial notice of the mark of such a seal affixed on a document and shall, in the absence of proof to the contrary, presume that it was duly affixed.

             (8)  The Official Receiver for a District may exercise the powers, and perform the functions, of the Official Trustee that relate to a matter that is determined under section 5AA to have originated in that District.

       (8AA)  In exercising powers or performing functions under subsection (8), an Official Receiver must act in the name of, and on behalf of, the Official Trustee.

          (8A)  All acts and things done in the name of, or on behalf of, the Official Trustee by any Official Receiver, shall be deemed to have been done by the Official Trustee.

          (8B)  The Inspector-General may exercise any of the powers, and perform any of the functions, of the Official Trustee that are not mentioned in subsection (8).

          (8C)  In exercising powers or performing functions under subsection (8B), the Inspector-General must act in the name of, and on behalf of, the Official Trustee.

          (8D)  Anything done by the Inspector-General in the name of, or on behalf of, the Official Trustee is taken to have been done by the Official Trustee.

             (9)  Where, under a provision of this Act, the exercise of a power or the performance of a function by the Official Trustee is dependent upon the opinion, belief or state of mind of the Official Trustee in relation to a matter:

                     (a)  the power may be exercised or the function performed by a person who may exercise the power or perform the function under subsection (8) or (8B), in the name of, or on behalf of, the Official Trustee upon the opinion, belief or state of mind in relation to that matter of the person exercising the power or performing the function; and

                     (b)  any act or thing done in accordance with this subsection shall be deemed to have been done by the Official Trustee.

           (10)  Where the Official Trustee is one of the trustees of a personal insolvency agreement, composition or scheme of arrangement, a power the exercise of which, or a function the performance of which, is dependent upon the opinion, belief or state of mind of those trustees in relation to a matter may be exercised or performed by those trustees as if the opinion, belief or state of mind in relation to that matter of:

                     (a)  an Official Receiver who; or

                     (b)  another person who with the authority of an Official Receiver;

acts in the name of, or on behalf of, the Official Trustee in the exercise of the power or the performance of the function were the opinion, belief or state of mind in relation to the matter of the Official Trustee.

           (11)  A reference in a law of the Commonwealth to the Official Receiver of the estate of a bankrupt shall, in relation to the vesting, holding or disposal of property, be read as including a reference to the Official Trustee.

           (12)  A reference in a law of the Commonwealth to the Official Receiver in Bankruptcy shall be read as including a reference to the Official Trustee.

18AA  Commonwealth Authorities and Companies Act 1997 does not apply to Official Trustee

                   The Official Trustee is not a Commonwealth authority for the purposes of the Commonwealth Authorities and Companies Act 1997.

18A  Liability of the Official Trustee

             (1)  The Official Trustee is subject to the same personal liability in respect of an act done, or omitted to be done, by it as:

                     (a)  the trustee of the estate of a bankrupt; or

                     (b)  the trustee of the estate of a deceased debtor; or

                     (c)  the trustee of a composition or scheme of arrangement accepted under Division 6 of Part IV; or

                     (d)  the controlling trustee in relation to a debtor whose property is subject to control under Division 2 of Part X; or

                     (e)  the trustee of a personal insolvency agreement;

as an individual would be subject if the individual had done, or omitted to do, that act as such a trustee.

             (2)  The Commonwealth is by force of this subsection liable to indemnify the Official Trustee against any personal liability, including any personal liability as to costs, incurred by it:

                     (a)  by reason of subsection (1); or

                     (b)  for any act done, or omitted to be done, by it in carrying out, or purporting to carry out, a direction given, or an order made, by the Court under section 50; or

                     (c)  for any act done, or omitted to be done, by the Official Trustee:

                              (i)  under Part IX; or

                             (ii)  under the authority contained in a debt agreement to deal with the property of the person who is a party (as debtor) to the agreement.

             (3)  Nothing in subsection (2) affects any right that the Official Trustee has, apart from that subsection, to be reimbursed in respect of any personal liability referred to in that subsection or any other indemnity given to the Official Trustee in respect of any such liability.

             (4)  Where the Commonwealth makes a payment in accordance with the indemnity referred to in subsection (2), the Commonwealth has the same right to reimbursement in respect of the payment (including reimbursement under another indemnity given to the Official Trustee) as the Official Trustee would have if the Official Trustee had made the payment.

19  Duties etc. of trustee

             (1)  The duties of the trustee of the estate of a bankrupt include the following:

                     (a)  notifying the bankrupt’s creditors of the bankruptcy;

                     (b)  determining whether the estate includes property that can be realised to pay a dividend to creditors;

                     (c)  reporting to creditors within 3 months of the date of the bankruptcy on the likelihood of creditors receiving a dividend before the end of the bankruptcy;

                     (d)  giving information about the administration of the estate to a creditor who reasonably requests it;

                     (e)  determining whether the bankrupt has made a transfer of property that is void against the trustee;

                      (f)  taking appropriate steps to recover property for the benefit of the estate;

                     (g)  taking whatever action is practicable to try to ensure that the bankrupt discharges all of the bankrupt’s duties under this Act;

                     (h)  considering whether the bankrupt has committed an offence against this Act;

                      (i)  referring to the Inspector-General or to relevant law enforcement authorities any evidence of an offence by the bankrupt against this Act;

                      (j)  administering the estate as efficiently as possible by avoiding unnecessary expense;

                     (k)  exercising powers and performing functions in a commercially sound way.

             (2)  Where a person who became a bankrupt on a creditor’s petition is unable to prepare a proper statement of affairs, the trustee may employ, at the expense of the estate, a qualified person to assist in the preparation of the statement.

19AA  Power of investigation of bankrupt’s affairs

             (1)  The trustee of the estate of a bankrupt may investigate:

                     (a)  the bankrupt’s conduct and examinable affairs; and

                     (b)  books, accounts and records kept by the bankrupt;

so far as they relate to the bankruptcy.

19A  Liability of Inspector-General, Official Receivers etc.

             (1)  The Commonwealth shall indemnify a person to whom this section applies against any liability incurred by him or her:

                     (a)  for any act done negligently, or negligently omitted to be done, by him or her in the course of the performance of his or her duties under this Act; and

                     (b)  for any act done by him or her in good faith in the purported performance of his or her duties under this Act.

             (2)  The Commonwealth has the same liability for acts of, or omissions by, a person to whom this section applies in the course of the performance or purported performance of his or her duties under this Act as a master has for acts of, or omissions by, his or her servants.

             (3)  A reference in this section to a person to whom this section applies shall be read as a reference to the Inspector-General, a Registrar, an Official Receiver, an officer performing any of the functions or duties, or exercising any of the powers, of an Official Receiver or an officer or other person assisting a Registrar or an Official Receiver in the performance of his or her functions or duties or the exercise of his or her powers.


 

Division 2Common Investment Fund

20A  Interpretation

                   In this Division, unless the contrary intention appears:

Common Fund means the Common Investment Fund established in pursuance of section 20B.

Equalization Account means the Common Investment Fund Equalization Account continued in existence by section 20G.

20B  The Common Investment Fund

             (1)  The Official Trustee shall open and maintain an account to be known as the Common Investment Fund.

             (2)  All moneys (other than moneys to which subsection (8) applies) received by the Official Trustee after the commencement of this section shall be paid into the Common Fund.

             (3)  All moneys (other than moneys to which subsection (8) applies) held by the Official Trustee at the commencement of this section, including moneys that, at that time, are held on deposit with a bank under subsection 172(1), and all investments made under that subsection and held by the Official Trustee at that time, shall form part of the Common Fund.

             (4)  The Official Trustee shall open and maintain, with an ADI or ADIs, such accounts for the purposes of the Common Fund as are necessary for the purposes of the Common Fund.

             (5)  The Official Trustee shall ensure that at all times at least one account referred to in subsection (4) is maintained for each District, or, if the Official Trustee thinks fit, for any 2 or more Districts having the same Official Receiver.

             (6)  The payment of moneys into an account referred to in subsection (4) shall be deemed to be the payment of those moneys into the Common Fund.

             (7)  Any payment that the Official Trustee is authorized, required or permitted, by or under a provision of this Act, to make out of moneys standing to the credit of the estate of a bankrupt or a deceased debtor shall be made out of moneys in the Common Fund.

             (8)  This subsection applies to moneys held or received by the Official Trustee:

                     (a)  under a direction given, or order made, under section 50; or

                     (c)  as the controlling trustee in relation to a debtor whose property is subject to control under Division 2 of Part X.

20D  Investment of money in Common Fund

             (1)  The moneys in the Common Fund not immediately required for the purposes of this Act may be invested by the Official Trustee:

                     (a)  in public securities; or

                     (b)  in a loan the repayment of which is guaranteed by the Commonwealth, a State or a Territory; or

                     (c)  in a loan to a municipal corporation or other local governing body in Australia; or

                     (d)  in a loan to, or on deposit with, an ADI; or

                     (e)  in bank bills accepted or endorsed by an ADI.

             (4)  The Official Trustee:

                     (a)  shall endeavour to ensure that the moneys in the Common Fund lodged in accounts at call with an ADI or ADIs are, as far as practicable, at all times sufficient to meet the payments that under this Act are to be made out of moneys in the Common Fund; and

                     (b)  will ensure that moneys in the Common Fund that, in the opinion of the Official Trustee, are not required to be kept in accounts at call with an ADI or ADIs in accordance with paragraph (a) are, as far as practicable, invested in accordance with subsection (1).

             (6)  Interest derived from the investment of moneys in the Common Fund is not subject to taxation under a law of the Commonwealth, a State or a Territory of the Commonwealth.

             (7)  The Common Fund is not subject to taxation under a law of the Commonwealth, or to taxation under a law of a State or Territory of the Commonwealth to which the Commonwealth is not subject, and the Official Trustee is not otherwise subject to taxation under such a law in respect of anything done in the exercise of powers conferred on it by subsection (1).

             (8)  In this section, public securities means:

                     (a)  bonds, debentures, stock and other securities issued under an Act;

                     (b)  bonds, debentures, stock and other securities issued by:

                              (i)  a State;

                             (ii)  a Territory;

                            (iii)  a municipal corporation or other local governing body; or

                            (iv)  a public authority constituted by or under a law of a State or Territory of the Commonwealth;

                     (c)  securities issued in respect of a loan to a body (whether incorporated or not) whose principal business is the supply and distribution, by a system of reticulation, in Australia or in a Territory of the Commonwealth, of water, gas or electricity; and

                     (d)  other securities specified in the regulations as public securities for the purposes of this section;

but does not include:

                     (e)  securities referred to in paragraph (a) or (b) that are issued in respect of a loan raised outside Australia and the Territories of the Commonwealth unless the securities are public securities for the purposes of the Income Tax Assessment Act 1936; or

                      (f)  securities issued after 12 April 1976 by an ADI.

20E  Borrowing for the Common Fund

             (1)  Where the Official Trustee is of the opinion:

                     (a)  that moneys in the Common Fund deposited in accounts at call with an ADI or ADIs are likely to be insufficient to meet payments that under this Act are to be made out of moneys in the Common Fund; and

                     (b)  that it would be undesirable to convert into money investments made under section 20D for the purpose of enabling those payments to be so made;

the Official Trustee may apply to the Minister for Finance to borrow from the Commonwealth under this section moneys not exceeding such amount as is specified in the instrument.

             (2)  The Minister for Finance may, on behalf of the Commonwealth, lend to the Official Trustee, on such terms and conditions as he or she determines, moneys that the Official Trustee has applied under subsection (1) to borrow.

             (3)  Moneys borrowed by the Official Trustee from the Commonwealth under this section shall be paid into the Common Fund.

             (4)  Interest is not payable on moneys lent to the Official Trustee by the Commonwealth under this section.

             (5)  Moneys lent to the Official Trustee by the Commonwealth under this section shall be paid out of moneys available under an appropriation made by the Parliament.

20F  Moneys in Common Fund not held on account of particular estates etc.

             (1)  No moneys in the Common Fund shall be held, or be deemed for any purpose to be held, on account of any particular estate or fund.

             (2)  Investments made from moneys in the Common Fund shall not be made, and shall not be deemed for any purpose to be made, on account of any particular estate or fund.

             (3)  Any capital appreciation or depreciation in the value of investments made from moneys in the Common Fund shall not increase or decrease the amount payable under this Act in respect of any estate or fund.

             (4)  The making of a capital profit or capital loss on the realization of investments made from moneys in the Common Fund shall not increase or decrease the amount payable under this Act in respect of any estate or fund.

             (5)  Interest derived from the investment of moneys in the Common Fund shall not increase the amount payable under this Act in respect of any estate or fund.

             (6)  The Official Trustee shall cause accounts to be kept showing the amount in the Common Fund from time to time standing to the credit of each estate or fund in respect of which moneys have been paid into the Common Fund.

             (7)  Moneys received or held by the Official Trustee as trustee of any estate or fund do not cease to be moneys in hand for the purposes of this Act by reason only that those moneys have been paid into or become part of the Common Fund.

             (8)  In this section:

estate means the estate of a bankrupt or of a deceased debtor.

fund means a fund of moneys referred to in paragraph 20J(1)(b).

20G  Common Investment Fund Equalization Account

             (1)  There is continued in existence the Common Investment Fund Equalization Account.

Note:          The Account was established by subsection 5(3) of the Financial Management Legislation Amendment Act 1999.

             (2)  The Account is a Special Account for the purposes of the Financial Management and Accountability Act 1997.

20H  Credits to and debits from the Equalization Account

             (1)  Interest derived from the investment of money in the Common Fund must be paid to the Commonwealth.

             (2)  An amount equal to the amount of any capital profit made upon the realization of an investment made from money in the Common Fund must be paid out of the Common Fund to the Commonwealth.

             (3)  Whenever a payment is made to the Commonwealth under subsection (1) or (2), an equal amount must be credited to the Equalization Account.

             (4)  An amount equal to:

                     (a)  the amount of any capital loss incurred upon the realization of an investment made from money in the Common Fund; or

                     (b)  each amount of interest that:

                              (i)  forms part of the estate of a bankrupt or of a deceased debtor by virtue of subsection 20J(2) or (3); or

                             (ii)  forms part of a fund referred to in paragraph 20J(1)(b) by virtue of subsection 20J(2) or (3A); or

                            (iii)  is payable to a person by virtue of subsection 20J(4);

is to be debited from the Equalization Account and paid into the Common Fund.

             (5)  The Official Trustee must, at such times as it considers appropriate and, in any event, at least once every 6 months, determine whether any amounts standing to the credit of the Equalization Account are not required for the purposes of subsection (4). If the Official Trustee determines that any amounts are not so required, it may direct that the amounts not so required, or any part of those amounts, are to be debited from the Equalization Account.

             (6)  Whenever an amount required by subsection (4) to be debited from the Equalization Account exceeds the amount standing to the credit of the Equalization Account, an amount equal to the excess must be credited to the Equalization Account.

20J  Interest on moneys in Common Fund payable only in certain circumstances

             (1)  Where the Official Trustee is:

                     (a)  the trustee of the estate of a bankrupt or of a deceased debtor; or

                     (b)  the trustee of a fund of moneys held or received by the Official Trustee in respect of a particular debtor or bankrupt by reason of being:

                              (i)  the trustee of a composition, or of a scheme of arrangement, accepted under Division 6 of Part IV; or

                             (ii)  the trustee of a personal insolvency agreement;

the estate or the fund is not entitled, except as provided by subsections (2), (3) and (3A), to interest on moneys held by the Official Trustee as trustee of the estate or fund, as the case may be.

             (2)  Where moneys have been held, or are likely to be held, for a prescribed reason, or for one prescribed reason and then for another prescribed reason, by the Official Trustee as the trustee of the estate of a bankrupt or of a deceased debtor, or as trustee of a fund referred to in paragraph (1)(b), for not less than one year longer than those moneys would have been held, or would be likely to be held, by the Official Trustee but for that reason or those reasons, the Inspector-General may direct, by writing under his or her hand, that interest on those moneys, at the rate prescribed by the regulations for the purposes of this section and in respect of such period as he or she determines, shall form part of that estate or fund, as the case may be.

             (3)  Where, on or after the date of commencement of this section (in the subsection referred to as the commencing date), the Official Trustee receives an amount by way of interest on moneys (other than moneys of the kind referred to in paragraph (1)(b)), or on investments, that form part of the Common Fund by virtue of subsection 20B(3):

                     (a)  if the interest accrued in respect of a period that ended before the commencing date—the amount of the interest forms part of the estate in respect of which those moneys or investments were held immediately before the commencing date; or

                     (b)  if the interest accrued in respect of a period that commenced before, but ended on or after, the commencing date—an amount that bears to the amount of that interest the same proportion as the number of days in the part of the period in respect of which the interest accrued that occurred before the commencing date bears to the number of days in that period forms part of the estate in respect of which those moneys or investments were held immediately before the commencing date.

          (3A)  Where, on or after the date of commencement of this subsection (in this subsection referred to as the commencing day), the Official Trustee receives an amount by way of interest on moneys held or received by the Official Trustee by reason of being trustee of a fund referred to in paragraph (1)(b) (in this subsection referred to as the appropriate fund), being moneys that form part of the Common Fund:

                     (a)  if the interest accrued in respect of a period that ended before the commencing date—the amount of the interest forms part of the appropriate fund; or

                     (b)  if the interest accrued in respect of a period that commenced before, but ended on or after, the commencing day—an amount that bears to the amount of that interest the same proportion as the number of days in the part of the period in respect of which the interest accrued that occurred before the commencing day bears to the number of days in that period forms part of the appropriate fund.

             (4)  Where it is established that:

                     (a)  moneys held by the Official Trustee as the trustee of the estate of a bankrupt or of a deceased debtor do not form part of the estate; or

                     (b)  moneys held by the Official Trustee as part of a fund referred to in paragraph (1)(b) do not form part of the fund;

interest on those moneys is payable to the person to whom those moneys are payable, out of the Common Fund, at the rate prescribed by the regulations for the purposes of this section and in respect of the period during which those moneys are held by the Official Trustee.

             (5)  For the purposes of subsection (2), moneys shall be taken to have been held, or to be likely to be held, by the Official Trustee for a prescribed reason if the moneys have been held, or are likely to be held, as the case may be, by the Official Trustee:

                     (a)  by reason of the institution or defending of legal proceedings in good faith;

                     (b)  by reason that a person has, or has had, under consideration, in good faith, the institution or defending of legal proceedings; or

                     (c)  for any other reason declared by the regulations to be a prescribed reason for the purposes of this section.


 

Part IIICourts

Division 2Jurisdiction and powers of courts in bankruptcy

27  Bankruptcy courts

             (1)  The Federal Court and the Federal Magistrates Court have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than the jurisdiction of the High Court under section 75 of the Constitution.

29  Courts to help each other

             (1)  All Courts having jurisdiction under this Act, the Judges of those Courts and the officers of or under the control of those Courts shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.

             (2)  In all matters of bankruptcy, the Court:

                     (a)  shall act in aid of and be auxiliary to the courts of the external Territories, and of prescribed countries, that have jurisdiction in bankruptcy; and

                     (b)  may act in aid of and be auxiliary to the courts of other countries that have jurisdiction in bankruptcy.

             (3)  Where a letter of request from a court of an external Territory, or of a country other than Australia, requesting aid in a matter of bankruptcy is filed in the Court, the Court may exercise such powers with respect to the matter as it could exercise if the matter had arisen within its own jurisdiction.

             (4)  The Court may request a court of an external Territory, or of a country other than Australia, that has jurisdiction in bankruptcy to act in aid of and be auxiliary to it in any matter of bankruptcy.

             (5)  In this section, prescribed country means:

                     (a)  the United Kingdom, Canada and New Zealand;

                     (b)  a country prescribed by the regulations for the purposes of this subsection; and

                     (c)  a colony, overseas territory or protectorate of a country specified in paragraph (a) or of a country so prescribed.

30  General powers of Courts in bankruptcy

             (1)  The Court:

                     (a)  has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and

                     (b)  may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.

             (2)  The Court may direct such inquiries to be made and accounts to be taken for the purposes of any proceeding before the Court as the Court considers necessary and may, when directing an account to be taken, or subsequently, give special directions as to the manner in which the account is to be taken or vouched.

             (3)  If in a proceeding before the Federal Court under this Act a question of fact arises that a party desires to have tried before a jury, the Federal Court may, if it thinks fit, direct the trial of that question to be had before a jury, and the trial may be had accordingly in the same manner as if it were the trial of an issue of fact in an action.

             (5)  Where:

                     (a)  a bankrupt, a debtor or any other person has failed to comply with an order or direction of a Registrar, or with a direction or requirement of an Official Receiver or trustee, under this Act; or

                     (b)  a trustee has failed to comply with an order, direction or requirement of a Registrar, or with a requirement or request of the Inspector-General, under this Act;

the Court may, on the application of the Registrar, Official Receiver, trustee or Inspector-General, as the case requires:

                     (c)  order the person who has failed to comply with the order, direction, requirement or request, as the case may be, to comply with it; or

                     (d)  if it thinks fit, make an immediate order for the committal to prison of that person.

             (6)  The power conferred on the Court by subsection (5) is in addition to, and not in substitution for, any other right or remedy in respect of the failure to comply with the order, direction, requirement or request, as the case may be.

31  Exercise of jurisdiction

             (1)  In exercising jurisdiction under this Act, the Court shall hear and determine the following matters in open Court:

                     (a)  creditors’ petitions;

                     (b)  examinations under this Act;

                     (c)  proceedings in connection with the consideration of an annulment of a bankruptcy under section 153B;

                     (d)  applications under:

                              (i)  section 222 (as applied by section 76B); or

                             (ii)  section 222C (as applied by section 76B);

                            for an order setting aside or terminating a composition or scheme of arrangement under Division 6 of Part IV;

                     (e)  applications to set aside or avoid a charge, charging order, settlement, disposition, conveyance, transfer security or payment;

                    (ea)  applications under section 139A;

                      (f)  applications to declare for or against the title of the trustee to any property;

                     (g)  applications for the committal of a person to prison or for the release from prison of a person committed to prison;

                      (i)  applications for the trial of questions of fact with a jury and the trial of those questions;

                      (j)  applications under Part X:

                              (i)  for an order setting aside or terminating a personal insolvency agreement; or

                             (ii)  for a sequestration order against the estate of a debtor;

                     (ja)  applications for an order of annulment of the administration of the estate of a deceased person under Part XI; and

                     (k)  summary trials under Part XIV.

             (2)  All other matters under this Act may, in the discretion of the Court, be heard in open Court or in Chambers.

32  Costs

                   The Court may, in any proceeding before it, including a proceeding dismissed for want of jurisdiction, make such orders as to costs as it thinks fit.

33  Adjournment, amendment of process and extension and abridgment of times

             (1)  The Court may:

                     (a)  upon such terms as it thinks fit, at any time adjourn any proceeding before it, either to a fixed date or generally;

                     (b)  at any time allow the amendment of any written process, proceeding or notice under this Act; or

                     (c)  extend before its expiration or, if this Act does not expressly provide to the contrary, after its expiration, any time limited by this Act, or any time fixed by the Court or the Registrar under this Act (other than the time fixed for compliance with the requirements of a bankruptcy notice), for doing an act or thing or abridge any such time.

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.

34  Orders and commissions for examination of witnesses

                   The Court may, for the purposes of any proceeding before it:

                     (a)  order the examination upon oath of a person before an officer of the Court or other person, at any place within Australia; or

                     (b)  order that a commission issue to a person either within or beyond Australia authorizing him or her to take the testimony of a person upon oath;

and may:

                     (c)  by the same or a subsequent order, give any necessary directions concerning the time, place and manner of the examination; and

                     (d)  admit in evidence, saving all just exceptions, the testimony obtained at the examination or in pursuance of the commission.

34A  Standard of proof

             (1)  Where, in proceedings in the Court (other than proceedings for an offence), it is necessary, for a purpose relating to a matter arising under this Act, to establish, or for the Court to be satisfied as to, a particular fact (including a contravention of this Act), it is sufficient if that fact is established, or the Court is satisfied as to that fact, as the case may be, on the balance of probabilities.

             (2)  Subsection (1) has effect except to the extent that this Act expressly provides otherwise.

35A  Transfer of proceedings to Family Court

             (1)  Subject to subsection (2), where a proceeding is pending in the Federal Court, the Federal Court may, on the application of a party to the proceeding or of its own motion, transfer the proceeding to the Family Court.

             (2)  A proceeding that is pending in the Federal Court at the commencement of this section shall not be transferred to the Family Court unless the parties to the proceeding consent to the transfer.

          (2A)  If a proceeding is pending in the Federal Magistrates Court, the Federal Magistrates Court may, on the application of a party to the proceeding or on its own initiative, transfer the proceeding to the Family Court.

             (3)  Subject to subsection (4), where a proceeding is transferred to the Family Court:

                     (a)  the Family Court has jurisdiction to hear and determine the proceeding;

                     (b)  the Family Court also has jurisdiction to hear and determine matters not otherwise within its jurisdiction (whether by virtue of paragraph (a) or otherwise):

                              (i)  that are associated with matters arising in the proceeding; or

                             (ii)  that, apart from subsection 32(1) of the Federal Court of Australia Act 1976, the Federal Court would have had jurisdiction to hear and determine in the proceeding;

                     (c)  the Family Court may, in and in relation to the proceeding:

                              (i)  grant such remedies;

                             (ii)  make orders of such kinds; and

                            (iii)  issue, and direct the issue of, writs of such kinds;

                            as the Federal Court could have granted, made, issued or directed the issue of, as the case may be, in and in relation to the proceeding;

                     (d)  remedies, orders and writs granted, made or issued by the Family Court in and in relation to the proceeding have effect, and may be enforced by the Family Court, as if they had been granted, made or issued by the Federal Court;

                     (e)  appeals lie from judgments of the Family Court given in and in relation to the proceeding as if the judgments were judgments of the Federal Court constituted by a single Judge, and do not otherwise lie; and

                      (f)  subject to paragraphs (a) to (e) (inclusive), this Act, the Federal Court of Australia Act 1976, the Rules of Court made under that Act, and other laws of the Commonwealth, apply in and in relation to the proceeding as if:

                              (i)  a reference to the Federal Court (other than in the expression “the Court or a Judge”) included a reference to the Family Court;

                             (ii)  a reference to a Judge of the Federal Court (other than in the expression “the Court or a Judge”) included a reference to a Family Court Judge;

                            (iii)  a reference to the expression “the Court or a Judge” when used in relation to the Federal Court included a reference to a Family Court Judge sitting in Chambers;

                            (iv)  a reference to a Registrar included a reference to a Registrar of the Family Court; and

                             (v)  any other necessary changes were made.

             (4)  Where any difficulty arises in the application of paragraphs (3)(c), (d) and (f) in or in relation to a particular proceeding, the Family Court may, on the application of a party to the proceeding or of its own motion, give such directions, and make such orders, as it considers appropriate to resolve the difficulty.

             (5)  An appeal does not lie from a decision of the Federal Court or the Federal Magistrates Court in relation to the transfer of a proceeding under this Act to the Family Court.

36  Enforcement of orders etc.

             (1)  An order of the Court made, or a warrant issued, under this Act may be enforced throughout Australia by a constable.

             (2)  A warrant for the arrest or detention of a person for the purpose of giving effect to an order of committal or a sentence of imprisonment made or imposed by the Court under this Act may be issued under the seal of the Court.

             (3)  Where the Court commits a person to prison under this Act, the committal may be to such prison as the Court thinks fit.

37  Power of Court to rescind orders etc.

             (1)  Subject to subsection (2), the Court may rescind, vary or discharge an order made by it under this Act or may suspend the operation of such an order.

             (2)  The Court does not have power to rescind or discharge, or to suspend the operation of:

                     (a)  a sequestration order; or

                     (b)  an order for the administration of the estate of a deceased person under Part XI.


 

Part IVProceedings in connexion with bankruptcy

Division 1Acts of bankruptcy

40  Acts of bankruptcy

             (1)  A debtor commits an act of bankruptcy in each of the following cases:

                     (a)  if in Australia or elsewhere he or she makes a conveyance or assignment of his or her property for the benefit of his or her creditors generally;

                     (b)  if in Australia or elsewhere:

                              (i)  he or she makes a conveyance, transfer, settlement or other disposition of his or her property or of any part of his or her property;

                             (ii)  he or she creates a charge on his or her property or on any part of his or her property;

                            (iii)  he or she makes a payment; or

                            (iv)  he or she incurs an obligation;

                            that would, if he or she became a bankrupt, be void as against the trustee;

                     (c)  if, with intent to defeat or delay his or her creditors:

                              (i)  he or she departs or remains out of Australia;

                             (ii)  he or she departs from his or her dwelling-house or usual place of business;

                            (iii)  he or she otherwise absents himself or herself; or

                            (iv)  he or she begins to keep house;

                     (d)  if:

                              (i)  execution has been issued against him or her under process of a court and any of his or her property has, in consequence, either been sold by the sheriff or held by the sheriff for 21 days; or

                             (ii)  execution has been issued against him or her under process of a court and has been returned unsatisfied;

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

                    (da)  if the debtor presents to the Official Receiver a declaration under section 54A;

                     (e)  if, at a meeting of any of his or her creditors:

                              (i)  he or she consents to present a debtor’s petition under this Act and does not, within 7 days from the date on which he or she so consented, present the petition; or

                             (ii)  he or she consents to sign an authority under section 188 and does not, within 7 days from the date on which he or she so consented, sign such an authority and inform the chairman of the meeting, in writing, of the name of the person in whose favour the authority has been signed;

                      (f)  if, at a meeting of any of his or her creditors, he or she admits that he or she is in insolvent circumstances and, having been requested by a resolution of a majority of the creditors present at the meeting either in person or by attorney to bring his or her affairs under the provisions of this Act, he or she does not, within 7 days from the date of the meeting, either:

                              (i)  present a debtor’s petition; or

                             (ii)  sign an authority under section 188 and inform the chair of the meeting, in writing, of the name of the person in whose favour the authority has been signed;

                     (g)  if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not:

                              (i)  where the notice was served in Australia—within the time specified in the notice; or

                             (ii)  where the notice was served elsewhere—within the time fixed for the purpose by the order giving leave to effect the service;

                            comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained;

                     (h)  if he or she gives notice to any of his or her creditors that he or she has suspended, or that he or she is about to suspend, payment of his or her debts;

                    (ha)  if the debtor gives the Official Receiver a debt agreement proposal;

                    (hb)  if a debt agreement proposal given by the debtor to the Official Receiver is accepted by the debtor’s creditors;

                    (hc)  if the debtor breaches a debt agreement;

                    (hd)  if a debt agreement to which the debtor was a party (as a debtor) is terminated under section 185P, 185Q or 185QA;

                      (i)  if he or she signs an authority under section 188;

                      (j)  if a meeting of his or her creditors is called in pursuance of such an authority;

                     (k)  if, without sufficient cause, he or she fails to attend a meeting of his or her creditors called in pursuance of such an authority;

                      (l)  if, having been required by a special resolution of a meeting of his or her creditors so called to execute a personal insolvency agreement or to present a debtor’s petition, he or she fails, without sufficient cause:

                              (i)  to comply with the requirements of this Act as to the execution of the agreement by him or her; or

                             (ii)  to present a debtor’s petition within the time specified in the resolution;

                            as the case may be;

                    (m)  if a personal insolvency agreement executed by him or her under Part X is:

                              (i)  set aside by the Court; or

                             (ii)  terminated;

                     (n)  if a composition or scheme of arrangement accepted by the debtor’s creditors under Division 6 of Part IV is:

                              (i)  set aside by the Court; or

                             (ii)  terminated.

             (2)  In calculating for the purposes of subparagraph (1)(d)(i) the period for which property has been held by the sheriff, any time between the date on which an interpleader summons in respect of the property is taken out and the date on which the proceedings on the summons are finally disposed of, settled or discontinued shall not be taken into account.

             (3)  For the purposes of paragraph (1)(g):

                     (a)  where leave is given by a court to enforce an award made on a submission to arbitration, being an award under which money is payable by a debtor to another person:

                              (i)  the award shall be deemed to be a final order obtained by that person against the debtor; and

                             (ii)  the arbitration proceedings shall be deemed to be the proceeding in which that final order was obtained;

                     (b)  a judgment or order that is enforceable as, or in the same manner as, a final judgment obtained in an action shall be deemed to be a final judgment so obtained and the proceedings in which, or in consequence of which, the judgment or order was obtained shall be deemed to be the action in which it was obtained;

                     (d)  a person who is for the time being entitled to enforce a final judgment or final order for the payment of money shall be deemed to be a creditor who has obtained a final judgment or final order;

                     (e)  a judgment or order for the payment of money made by the Court in the exercise of jurisdiction conferred on it by this Act shall be deemed to be a judgment or order the execution of which has not been stayed notwithstanding that it may not be enforceable at law by execution; and

                      (f)  an order made after the commencement of this paragraph under the Family Law Act 1975 for the payment by a person of arrears of maintenance for another person shall be deemed to be a final order against the first-mentioned person obtained by the other person.

             (4)  The act of bankruptcy specified in paragraph (1)(j) shall be deemed to be committed on the day on which the notices calling the meeting are delivered or sent to the creditors or, if they are not all delivered or sent on the one day, on the day on which the last of the notices is so delivered or sent.

             (5)  The act of bankruptcy specified in paragraph (1)(l) shall be deemed to be committed on the day after the day on which the period within which the agreement is required to be executed by the debtor or the period within which the petition is required to be presented, as the case may be, expires.

             (6)  The act of bankruptcy specified in paragraph (1)(m) shall be deemed to be committed on the day on which the agreement is set aside or terminated, as the case may be.

             (7)  The act of bankruptcy specified in paragraph (1)(n) shall be deemed to be committed on the day on which the composition or scheme of arrangement is set aside or terminated.

             (8)  This section applies, so far as it is capable of application, in relation to acts and things done or occurring, and omissions and failures to do acts or things occurring, before, or partly before and partly after, the commencement of this Act, as well as to acts and things done or occurring, and omissions and failures to do acts and things occurring, after the commencement of this Act.

41  Bankruptcy notices

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

                     (a)  a final judgment or final order that:

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

                             (ii)  is for an amount of at least $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.

             (2)  The notice must be in accordance with the form prescribed by the regulations.

             (3)  A bankruptcy notice shall not be issued in relation to a debtor:

                     (a)  except on the application of a creditor who has obtained against the debtor a final judgment or final order within the meaning of paragraph 40(1)(g) or a person who, by virtue of paragraph 40(3)(d), is to be deemed to be such a creditor;

                     (b)  if, at the time of the application for the issue of the bankruptcy notice, execution of a judgment or order to which it relates has been stayed; or

                     (c)  in respect of a judgment or order for the payment of money if:

                              (i)  a period of more than 6 years has elapsed since the judgment was given or the order was made; or

                             (ii)  the operation of the judgment or order is suspended under section 37.

             (5)  A bankruptcy notice is not invalidated by reason only that the sum specified in the notice as the amount due to the creditor exceeds the amount in fact due, unless the debtor, within the time allowed for payment, gives notice to the creditor that he or she disputes the validity of the notice on the ground of the misstatement.

             (6)  Where the amount specified in a bankruptcy notice exceeds the amount in fact due and the debtor does not give notice to the creditor in accordance with subsection (5), he or she shall be deemed to have complied with the notice if, within the time allowed for payment, he or she takes such action as would have constituted compliance with the notice if the amount due had been correctly specified in it.

          (6A)  Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice:

                     (a)  proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or

                     (b)  an application has been made to the Court to set aside the bankruptcy notice;

the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice.

          (6C)  Where:

                     (a)  a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and

                     (b)  the Court is of the opinion that the proceedings to set aside the judgment or order:

                              (i)  have not been instituted bona fide; or

                             (ii)  are not being prosecuted with due diligence;

the Court shall not extend the time for compliance with the bankruptcy notice.

             (7)  Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied.

42  Payment etc. of debt to Commonwealth or State after service of bankruptcy notice

             (1)  Where a bankruptcy notice under this Act is served on a debtor by the Commonwealth or a State, it is a sufficient compliance with the notice if, within the time allowed by the notice, the debtor pays the amount required to be paid by the notice to, or secures it or compounds it to the satisfaction of:

                     (a)  the Secretary to the Attorney-General’s Department, or the Crown Solicitor of the State, as the case may be; or

                     (b)  if an agent of the Commonwealth, or of the State, as the case may be, is specified in the notice for the purpose, the agent so specified.

             (2)  A statement that the debtor may comply with the notice in the manner referred to in subsection (1) may be included in a bankruptcy notice issued on the application of the Commonwealth or a State.


 

Division 2Creditors’ petitions

43  Jurisdiction to make sequestration orders

             (1)  Subject to this Act, where:

                     (a)  a debtor has committed an act of bankruptcy; and

                     (b)  at the time when the act of bankruptcy was committed, the debtor:

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

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

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

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

the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor.

             (2)  Upon the making of a sequestration order against the estate of a debtor, the debtor becomes a bankrupt, and continues to be a bankrupt until:

                     (a)  he or she is discharged by force of subsection 149(1); or

                     (b)  his or her bankruptcy is annulled by force of subsection 74(5) or 153A(1) or under section 153B.

44  Conditions on which creditor may petition

             (1)  A creditor’s petition shall not be presented against a debtor unless:

                     (a)  there is owing by the debtor to the petitioning creditor a debt that amounts to $2,000 or 2 or more debts that amount in the aggregate to $2,000, or, where 2 or more creditors join in the petition, there is owing by the debtor to the several petitioning creditors debts that amount in the aggregate to $2,000;

                     (b)  that debt, or each of those debts, as the case may be:

                              (i)  is a liquidated sum due at law or in equity or partly at law and partly in equity; and

                             (ii)  is payable either immediately or at a certain future time; and

                     (c)  the act of bankruptcy on which the petition is founded was committed within 6 months before the presentation of the petition.

             (2)  Subject to subsection (3), a secured creditor shall, for the purposes of paragraph (1)(a), be deemed to be a creditor only to the extent, if any, by which the amount of the debt owing to him or her exceeds the value of his or her security.

             (3)  A secured creditor may present, or join in presenting, a creditor’s petition as if he or she were an unsecured creditor if he or she includes in the petition a statement that he or she is willing to surrender his or her security for the benefit of creditors generally in the event of a sequestration order being made against the debtor.

             (4)  Where a petitioning creditor is a secured creditor, he or she shall set out in the petition particulars of his or her security.

             (5)  Where a secured creditor has presented, or joined in presenting, a creditor’s petition as if he or she were an unsecured creditor, he or she shall, upon request in writing by the trustee within 3 months after the making of a sequestration order, surrender his or her security to the trustee for the benefit of the creditors generally.

             (6)  A secured creditor to whom subsection (5) applies who fails to surrender his or her security when requested to do so by the trustee in accordance with that subsection is guilty of contempt of court.

45  Creditor’s petition against partnership

             (1)  A creditor of a partnership may present a petition against the partnership if he or she is entitled to present a petition against any one of the members of the partnership in respect of a partnership debt.

             (2)  A creditor who is entitled to present a petition against a partnership may present a petition against any of the members of the partnership without including the others.

46  Petition against 2 or more joint debtors

             (1)  A creditor’s petition may be presented against 2 or more joint debtors, whether partners or not.

             (2)  Where there are 2 or more respondents to a creditor’s petition, the Court may make a sequestration order against one or more of them and dismiss the petition in so far as it relates to the other or others.

47  Requirements as to creditor’s petition

             (1)  A creditor’s petition must be verified by an affidavit of a person who knows the relevant facts.

          (1A)  If the rules of court prescribe a form for the purposes of this subsection, the petition must be in the form prescribed.

             (2)  Except with the leave of the Court, a creditor’s petition shall not be withdrawn after presentation.

49  Change of petitioners [see Table B]

                   Where a creditor’s petition is not prosecuted with due diligence or where for any other reason the Court considers it proper to do so, the Court may permit to be substituted as petitioner or petitioners another creditor or other creditors to whom the debtor is indebted in the amount required by this Act in the case of a petitioning creditor, and the petition may be proceeded with as if the substituted creditor or creditors had been the petitioning creditor.

50  Taking control of debtor’s property before sequestration
[see Table B]

             (1)  At any time after a bankruptcy notice is issued, or a creditor’s petition is presented, in relation to a debtor, but before the debtor becomes a bankrupt, the Court may:

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

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

          (1A)  The Court may give a direction or make an order only if:

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

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

                     (c)  the debtor has not complied with the bankruptcy notice.

          (1B)  If the Court directs a trustee to take control of the debtor’s property, the Court must specify when the control is to end.

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

             (3)  A summons to a person under subsection (2) shall require the person to attend:

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

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

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

             (4)  A summons to a person under subsection (2) may require the person to produce at the examination books (including books of an associated entity of the debtor) that:

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

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

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

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

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

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

51  Costs of prosecuting creditor’s petition

                   Subject to section 109, the prosecution of a creditor’s petition to and including the making of a sequestration order on the petition shall be at the expense of the creditor.

52  Proceedings and order on creditor’s petition

             (1)  At the hearing of a creditor’s petition, the Court shall require proof of:

                     (a)  the matters stated in the petition (for which purpose the Court may accept the affidavit verifying the petition as sufficient);

                     (b)  service of the petition; and

                     (c)  the fact that the debt or debts on which the petitioning creditor relies is or are still owing;

and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor.

          (1A)  If the Court makes a sequestration order, the creditor who obtained the order must give a copy of it to the Official Receiver for the District in which the order was made.

             (2)  If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor:

                     (a)  that he or she is able to pay his or her debts; or

                     (b)  that for other sufficient cause a sequestration order ought not to be made;

it may dismiss the petition.

             (3)  The Court may, if it thinks fit, upon such terms and conditions as it thinks proper, stay all proceedings under a sequestration order for a period not exceeding 21 days.

             (4)  A creditor’s petition lapses at the expiration of:

                     (a)  subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or

                     (b)  if the Court makes an order under subsection (5) in relation to the petition—the period fixed by the order;

unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn.

             (5)  The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor’s petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order.

53  Consolidation of proceedings

             (1)  Where 2 or more members of a partnership or 2 or more joint debtors have become bankrupts, the Court may consolidate the proceedings upon such terms as it thinks fit.

             (2)  Where the Court makes an order under subsection (1), section 110 applies in the administration under this Act of all of the estates to which the order relates.

             (3)  Where the Court makes an order under subsection (1) in relation to the estates of 2 or more bankrupts, the Court may, in the order:

                     (a)  declare a specified date to be, for the purpose of the application of the provisions of Division 3 of Part VI in the administration of the joint estate, the date on which all the petitions relevant to the administration of those estates shall be deemed to have been presented;

                     (b)  declare a specified date to be, for that purpose, the date of the bankruptcy in respect of each of those estates; and

                     (c)  declare a specified time to be, for that purpose, the time that is the commencement of the bankruptcy in respect of all those estates;

and, if the Court does so, those estates shall be administered accordingly.

54  Bankrupt’s statement of affairs

             (1)  Where a sequestration order is made, the person against whose estate it is made shall, within 14 days from the day on which he or she is notified of the bankruptcy:

                     (a)  make out and file with the Official Receiver for the District in which the sequestration order was made a statement of his or her affairs; and

                     (b)  furnish a copy of the statement to the trustee.

Penalty:  5 penalty units.

             (2)  Where a sequestration order is made against 2 or more joint debtors (whether partners or not), each of those persons shall (in addition to complying with subsection (1) in relation to his or her affairs), within 14 days from the day on which he or she is notified of the bankruptcy, and either on his or her own account or jointly with another or others of those debtors:

                     (a)  make out and file in the office of the Official Receiver for the District in which the sequestration order was made a statement of the joint affairs of those persons; and

                     (b)  furnish a copy of the statement to the trustee.

Penalty:  5 penalty units.

             (3)  Subsections (1) and (2) are offences of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

             (4)  A person who states in writing that he or she is a creditor of a bankrupt against whom a sequestration order has been made, or a creditor of 2 or more bankrupts against whom the one sequestration order has been made, may without fee, and any other person may on payment of the fee prescribed by the regulations, inspect, personally or by an agent, the statement of affairs filed by the bankrupt or the statements of affairs filed by the bankrupts, as the case may be, and may obtain a copy of, or take extracts from, the statement or statements.

             (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.


 

Division 2ADeclaration of intention to present debtor’s petition

54A  Presentation of declaration

                   Subject to section 54B, a debtor may present to the Official Receiver a declaration, in the approved form, of the debtor’s intention to present a debtor’s petition.

54B  When debtor disqualified from presenting declaration

                   A debtor is not entitled to present a declaration under section 54A:

                     (a)  when the debtor is not entitled, except with the leave of the Court, to present a petition under section 55;

                     (b)  after a creditor’s petition presented against the debtor is served on the debtor and before:

                              (i)  a sequestration order is made on the petition;

                             (ii)  the petition is withdrawn or dismissed; or

                            (iii)  the petition lapses under subsection 52(4);

                     (c)  after a debtor’s petition is presented against the debtor and before the petition is accepted or rejected;

                     (d)  while the debtor’s property is subject to control under Division 2 of Part X;

                     (e)  within 6 months after the debtor signs an authority under section 188; or

                      (f)  within 12 months after a declaration presented by the debtor under section 54A is accepted under section 54C.

54C  Acceptance or rejection of declaration

                   Subject to section 54D, where a debtor presents a declaration under section 54A, the Official Receiver shall:

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