Contents
Part I—Preliminary 1
1............................ Short title............................................................................ 1
2............................ Commencement.................................................................. 1
4............................ Repeal................................................................................. 1
4A......................... Insolvency Practice Schedule.............................................. 1
Part IA—Interpretation 2
5............................ Interpretation....................................................................... 2
5A......................... Acting in accordance with a person’s directions or instructions 20
5B.......................... Associated entities: companies.......................................... 20
5C.......................... Associated entities: natural persons.................................. 21
5D......................... Associated entities: partnerships....................................... 22
5E.......................... Associated entities: trusts.................................................. 22
5F.......................... Controlling an entity in relation to a matter....................... 23
5G......................... Financial affairs of a company.......................................... 24
5H......................... Financial affairs of a natural person.................................. 25
5J........................... Financial affairs of a partnership....................................... 26
5K.......................... Financial affairs of a trust................................................. 26
6............................ Meaning of intent to defraud creditors.............................. 27
6A......................... Statement of affairs for purposes other than Part XI......... 27
6B.......................... Provision of statement of affairs under Part XI and statement of administration of estate of deceased person.......................................................................................... 28
6C.......................... Interpretive provisions relating to proceeds of crime orders 29
6D......................... Approved forms............................................................... 29
Part IB—Application of Act 31
7............................ Application of Act............................................................ 31
7A......................... Application of the Criminal Code..................................... 31
8............................ Act binds the Crown......................................................... 31
9............................ Laws of States and Territories not affected by Act........... 32
9A......................... Act does not extend to Norfolk Island.............................. 32
Part II—Administration 33
Division 1—General 33
10.......................... Delegation by Minister or Secretary................................. 33
11.......................... Inspector‑General in Bankruptcy...................................... 34
12.......................... Functions of Inspector‑General........................................ 34
13.......................... The Australian Financial Security Authority..................... 38
15.......................... Official Receivers............................................................. 39
16.......................... Appointment of Inspector‑General and Official Receivers 39
17.......................... Acting Inspector‑General and Acting Official Receivers.. 39
17B........................ Arrangements for services of State Magistrates and Northern Territory Local Court Judges 40
18.......................... The Official Trustee in Bankruptcy................................... 40
18AA.................... Public Governance, Performance and Accountability Act 2013 does not apply to the Official Trustee 44
18A....................... Liability of the Official Trustee......................................... 44
19.......................... Duties etc. of trustee......................................................... 45
19AA.................... Power of investigation of bankrupt’s affairs..................... 46
19A....................... Liability of Inspector‑General, Official Receivers etc....... 46
19B........................ Trustee to give Official Receiver information etc.............. 47
Division 2—Common Investment Fund 48
20A....................... Interpretation..................................................................... 48
20B........................ The Common Investment Fund........................................ 48
20D....................... Investment of money in Common Fund........................... 49
20E........................ Borrowing for the Common Fund.................................... 51
20F........................ Moneys in Common Fund not held on account of particular estates etc. 52
20G....................... Common Investment Fund Equalization Account............. 53
20H....................... Credits to and debits from the Equalization Account........ 53
20J......................... Interest on moneys in Common Fund payable only in certain circumstances 54
Part III—Courts 57
Division 2—Jurisdiction and powers of courts in bankruptcy 57
27.......................... Bankruptcy courts............................................................. 57
29.......................... Courts to help each other.................................................. 57
30.......................... General powers of Courts in bankruptcy.......................... 58
31.......................... Exercise of jurisdiction..................................................... 59
32.......................... Costs................................................................................. 60
33.......................... Adjournment, amendment of process and extension and abridgment of times 60
33A....................... Alteration of filing date for statement of affairs................ 61
34.......................... Orders and commissions for examination of witnesses.... 61
34A....................... Standard of proof.............................................................. 62
35.......................... Family Court’s jurisdiction in bankruptcy where trustee is a party to property settlement or spousal maintenance proceedings etc............................................. 62
35A....................... Transfer of proceedings to Family Court.......................... 63
35B........................ Family Court of Western Australia................................... 65
36.......................... Enforcement of orders etc................................................. 66
37.......................... Power of Court to rescind orders etc................................ 66
Part IV—Proceedings in connexion with bankruptcy 67
Division 1—Acts of bankruptcy 67
40.......................... Acts of bankruptcy........................................................... 67
41.......................... Bankruptcy notices........................................................... 72
42.......................... Payment etc. of debt to Commonwealth or State after service of bankruptcy notice 74
Division 2—Creditors’ petitions 75
43.......................... Jurisdiction to make sequestration orders......................... 75
44.......................... Conditions on which creditor may petition....................... 75
45.......................... Creditor’s petition against partnership.............................. 76
46.......................... Petition against 2 or more joint debtors............................. 77
47.......................... Requirements as to creditor’s petition............................... 77
49.......................... Change of petitioners........................................................ 77
50.......................... Taking control of debtor’s property before sequestration. 77
51.......................... Costs of prosecuting creditor’s petition............................ 79
52.......................... Proceedings and order on creditor’s petition..................... 79
53.......................... Consolidation of proceedings........................................... 80
54.......................... Bankrupt’s statement of affairs......................................... 81
Division 2A—Declaration of intention to present debtor’s petition 83
54A....................... Presentation of declaration................................................ 83
54B........................ When debtor disqualified from presenting declaration...... 83
54C........................ Acceptance or rejection of declaration............................... 83
54D....................... Official Receiver to give information to debtor................. 84
54E........................ Enforcement suspended during stay period...................... 84
54F........................ Duties of sheriff................................................................ 85
54G....................... Duty of court registrar...................................................... 85
54H....................... Duties of person entitled to deduct money owing to declared debtor 86
54J......................... Extension of time where this Division prevents the doing of an act 86
54K........................ Section 33 not to apply to this Division............................ 87
54L........................ Secured creditor’s rights under security not affected........ 87
Division 3—Debtors’ petitions 88
55.......................... Debtor’s petition............................................................... 88
56A....................... Persons who may present a debtor’s petition against a partnership 91
56B........................ Presentation of a debtor’s petition against a partnership... 92
56C........................ Referral to the Court of a debtor’s petition against a partnership 93
56D....................... Acceptance of a debtor’s petition against a partnership by the Official Receiver 94
56E........................ Effects of acceptance of a debtor’s petition against a partnership 95
56F........................ Extra duties of non‑petitioning partners who become bankrupts 95
56G....................... Inspection of statements of affairs of partners and partnerships 96
57.......................... Debtor’s petition by joint debtors who are not partners.... 97
57A....................... Time at which person becomes bankrupt on debtor’s petition 101
Division 4—Effect of bankruptcy on property and proceedings 102
58.......................... Vesting of property upon bankruptcy—general rule....... 102
58A....................... Vesting of property upon bankruptcy—effect of orders in force under the proceeds of crime law 103
59.......................... Second or subsequent bankruptcy.................................. 104
59A....................... Orders under Part VIII or VIIIAB of the Family Law Act 1975 107
60.......................... Stay of legal proceedings................................................ 107
61.......................... Actions by bankrupt partner’s trustee............................. 108
62.......................... Actions on joint contracts............................................... 109
63.......................... Death of bankrupt........................................................... 109
Division 6—Composition or arrangement with creditors 110
73.......................... Composition or arrangement........................................... 110
73B........................ Declaration of relationships by proposed trustee of composition or scheme of arrangement 110
74.......................... Annulment of bankruptcy............................................... 111
74A....................... Variation of composition or scheme of arrangement....... 112
75.......................... Effect of composition or scheme of arrangement............ 113
76.......................... Application of Part VIII and Schedule 2 to trustee of a composition or arrangement 113
76B........................ Setting aside and termination of a composition or scheme of arrangement 114
Part V—Control over person and property of debtors and bankrupts 115
Division 1—General 115
77.......................... Duties of bankrupt as to discovery etc. of property........ 115
77AA.................... Access by Official Receiver and others to premises....... 116
77A....................... Access by trustee to books of associated entity.............. 118
77C........................ Power of Official Receiver to obtain information and evidence 119
77CA..................... Power of Official Receiver to obtain statement of affairs 120
77D....................... Allowances and expenses in respect of attendance......... 120
77E........................ Advance on account of allowances and expenses........... 121
77F........................ Allowances and expenses to be paid out of bankrupt’s estate 122
78.......................... Arrest of debtor or bankrupt........................................... 122
80.......................... Notification of change in name, address or day‑time telephone number 123
81.......................... Discovery of bankrupt’s property etc............................. 124
Division 2—Offshore information notices 128
81A....................... Issue of notices............................................................... 128
81B........................ Extension of period of notice.......................................... 128
81C........................ Variation of notices......................................................... 129
81D....................... Withdrawal of notices..................................................... 130
81E........................ Notices may be included in same document.................... 130
81F........................ Relationship between this Division and section 77C...... 130
Division 3—Failure to comply with certain notices 131
81G....................... Effect of non‑compliance with notice.............................. 131
Part VI—Administration of property 132
Division 1—Proof of debts 132
82.......................... Debts provable in bankruptcy......................................... 132
83.......................... Debt not to be considered proved until admitted............. 134
84.......................... Manner of proving debts................................................ 134
85.......................... Proof by employees........................................................ 135
86.......................... Mutual credit and set‑off................................................. 136
87.......................... Deduction of discounts................................................... 137
88.......................... Apportionment to principal and interest of payments made before bankruptcy 137
89.......................... Apportionment where security realized before or after bankruptcy 137
90.......................... Proof of debt by secured creditor.................................... 138
91.......................... Redemption of security by trustee etc............................. 139
92.......................... Amendment of valuation................................................. 140
93.......................... Repayment of excess...................................................... 140
94.......................... Subsequent realization of security................................... 141
95.......................... Proof in respect of distinct contracts............................... 141
96.......................... Proof in respect of proportionate part of periodical payment 141
97.......................... Production of bills of exchange and promissory notes... 141
98.......................... Amendment of proof of debt.......................................... 142
100........................ Costs of proving debts etc.............................................. 142
101........................ Inspection of proofs by creditors etc............................... 142
102........................ Admission or rejection of proofs.................................... 142
103........................ Debts to be rounded down to nearest dollar.................... 144
104........................ Appeal against decision of trustee in respect of proof..... 144
105........................ Costs of appeal............................................................... 144
106........................ Trustee may administer oaths etc.................................... 145
107........................ Creditor not to receive more than the amount of his or her debt and interest 145
Division 2—Order of payment of debts 146
Subdivision A—General 146
108........................ Debts proved to rank equally except as otherwise provided 146
109........................ Priority payments............................................................ 146
109A..................... Debts due to employees.................................................. 150
110........................ Application of estates of joint debtors............................. 151
113........................ Apprenticeship etc. claims.............................................. 151
114........................ Payment of liabilities etc. incurred under terminated deed etc. 152
Subdivision B—The effect of proceeds of crime orders and applications for proceeds of crime orders 153
114A..................... The effect of proceeds of crime orders............................ 153
114B...................... The effect of applications for proceeds of crime orders.. 153
114C...................... Director of Public Prosecutions or Commissioner of the Australian Federal Police must notify the trustee of certain matters................................................................. 154
Division 3—Property available for payment of debts 155
Subdivision A—General 155
115........................ Commencement of bankruptcy....................................... 155
116........................ Property divisible among creditors................................. 156
117........................ Policies of insurance against liabilities to third parties.... 162
118........................ Execution by creditor against property of debtor who becomes a bankrupt etc. 163
119........................ Duties of sheriff after receiving notice of presentation of petition etc. 166
119A..................... Duties of sheriff after receiving notice of bankruptcy etc. 170
120........................ Undervalued transactions................................................ 172
121........................ Transfers to defeat creditors............................................ 175
121A..................... Transactions where consideration given to a third party. 178
122........................ Avoidance of preferences............................................... 178
123........................ Protection of certain transfers of property against relation back etc. 181
124........................ Protection of certain payments to bankrupt etc................ 182
125........................ Certain accounts of undischarged bankrupt.................... 183
126........................ Dealings with undischarged bankrupt in respect of after‑acquired property 184
127........................ Limitation of time for making claims by trustee etc......... 185
128........................ Notice to trustee where identity of vendor etc. with bankrupt in doubt 186
Subdivision B—Superannuation contributions 187
128A..................... Simplified outline............................................................ 187
128B...................... Superannuation contributions made to defeat creditors—contributor is a person who later becomes a bankrupt........................................................................................ 187
128C...................... Superannuation contributions made to defeat creditors—contributor is a third party 190
128D..................... Time for making claims by trustee.................................. 193
128E...................... Superannuation account‑freezing notice.......................... 193
128F...................... Revocation of superannuation account‑freezing notice... 195
128G..................... Copy of superannuation account‑freezing notice to be given to trustee etc. 198
128H..................... Consent of Official Receiver to the cashing etc. of a superannuation interest 199
128J....................... Power of Court to set aside superannuation account‑freezing notice 200
128K...................... Judicial enforcement of superannuation account‑freezing notices 200
128L...................... Protection of trustee of eligible superannuation plan....... 201
128M..................... References to a member of an eligible superannuation plan 203
128N..................... Definitions...................................................................... 203
Division 4—Realization of property 207
129........................ Trustee to take possession of property of bankrupt........ 207
129AA.................. Time limit for realising property..................................... 208
129A..................... Eligible judges................................................................ 209
130........................ Warrant for seizure of property connected with the bankrupt.. 210
132........................ Vesting and transfer of property..................................... 212
133........................ Disclaimer of onerous property...................................... 212
134........................ Powers exercisable at discretion of trustee...................... 216
136........................ Right to pay off mortgages............................................. 218
137........................ Right of trustee to inspect goods held as security........... 218
138........................ Limitation of trustee’s power in respect of copyright, patents etc. 219
139........................ Protection of trustee from personal liability in certain cases 219
Division 4A—Orders in relation to property of entity controlled by bankrupt or from which bankrupt derived a benefit 221
139A..................... Trustee may apply to Court............................................. 221
139B...................... Application to be served on respondent entity................ 221
139C...................... Who may appear at hearing............................................. 221
139CA................... Definition of examinable period..................................... 221
139D..................... Order relating to property of entity other than a natural person 222
139DA.................. Order relating to property of natural person.................... 224
139E...................... Order relating to net worth of entity other than a natural person 224
139EA................... Order relating to increase in value of property of natural person 225
139F...................... Court to take account of interests of other persons......... 225
139G..................... Giving effect to orders under this Division..................... 226
139H..................... Entity entitled to claim in bankruptcy.............................. 227
Division 4B—Contribution by bankrupt and recovery of property 228
Subdivision A—Preliminary 228
139J....................... Objects of Division......................................................... 228
Subdivision B—Interpretation 228
139K...................... Definitions...................................................................... 228
Subdivision C—Income 230
139L...................... Meaning of income......................................................... 230
139M..................... Derivation of income...................................................... 232
139N..................... Income varied by income tax payments and refunds and child support payments 233
Subdivision D—Liability of bankrupt to pay contributions 234
139P...................... Liability of bankrupt to pay contribution......................... 234
139Q..................... Change in liability of bankrupt........................................ 234
139R...................... Liability not affected by subsequent discharge................ 235
139S...................... Contribution payable by bankrupt................................... 235
139T...................... Determination of higher income threshold in cases of hardship 236
Subdivision E—Provision of information to trustee 238
139U..................... Bankrupt to provide evidence of income......................... 238
139V..................... Power of trustee to require bankrupt to provide additional evidence 239
Subdivision F—Assessments of income and contribution 240
139W..................... Assessment of bankrupt’s income and contribution....... 240
139WA.................. No time limit on making assessment............................... 241
139X..................... Basis of assessments...................................................... 241
139Y..................... Trustee may regard bankrupt as receiving reasonable remuneration 242
139Z...................... If bankrupt claims not to be in receipt of income............ 243
Subdivision G—Review of assessment 244
139ZA................... Internal review of assessment......................................... 244
139ZC................... Inspector‑General may request further information........ 244
139ZD................... Decision on review......................................................... 245
139ZE.................... Inspector‑General to notify bankrupt and trustee of decision 245
139ZF.................... Review of assessment decisions..................................... 246
Subdivision H—When contribution payable 247
139ZG................... Payment of contribution.................................................. 247
139ZH................... If excess contribution paid.............................................. 247
139ZI..................... Notice of determinations................................................. 248
Subdivision HA—Supervised account regime 248
139ZIA.................. Objects............................................................................ 248
139ZIB.................. Definitions...................................................................... 249
139ZIC.................. Trustee may determine that the supervised account regime applies to the bankrupt 251
139ZID.................. Revocation of determination........................................... 251
139ZIDA............... When determination ceases to be in force....................... 252
139ZIE.................. Bankrupt must open and maintain supervised account.... 253
139ZIEA............... New supervised account................................................. 255
139ZIF.................. Bankrupt’s monetary income to be deposited to supervised account 256
139ZIG.................. Trustee to supervise withdrawals from supervised account 257
139ZIH.................. Constructive income receipt arrangements...................... 259
139ZIHA............... Non‑monetary income receipt arrangements................... 261
139ZII................... Cash income................................................................... 262
139ZIIA................ Keeping of books............................................................ 263
139ZIJ................... Injunctions...................................................................... 264
139ZIK.................. Interim injunctions.......................................................... 264
139ZIL.................. Discharge etc. of injunctions........................................... 265
139ZIM................. Certain limits on granting injunctions not to apply.......... 265
139ZIN.................. Other powers of the Court unaffected............................. 266
139ZIO.................. Inspector‑General may review trustee’s decision............ 266
139ZIP.................. Inspector‑General may request further information........ 267
139ZIR.................. Inspector‑General’s decision on review.......................... 268
139ZIS.................. Inspector‑General to notify bankrupt and trustee of decision 268
139ZIT.................. AAT review of decisions................................................ 269
Subdivision I—Collection of money or property by Official Receiver from person other than the bankrupt 269
139ZJ.................... Definition........................................................................ 269
139ZK................... Persons to whom Subdivision applies............................ 270
139ZL.................... Official Receiver may require persons to make payments 271
139ZM.................. Power of Court to set aside notice.................................. 273
139ZN................... Charge over property...................................................... 273
139ZO................... Failure to comply with notice.......................................... 274
139ZP.................... Employer not to dismiss or injure bankrupt because of giving of notice 275
Subdivision J—Collection of money or property by Official Receiver from party to transaction that is void against the trustee 275
139ZQ................... Official Receiver may require payment........................... 275
139ZR................... Charge over property...................................................... 277
139ZS.................... Power of Court to set aside notice.................................. 279
139ZT.................... Failure to comply with notice.......................................... 279
Subdivision K—Rolled‑over superannuation interests etc. 279
139ZU................... Order relating to rolled‑over superannuation interests etc. 279
139ZV................... Enforcement of order...................................................... 281
139ZW.................. Definitions...................................................................... 281
Division 5—Distribution of property 283
140........................ Declaration and distribution of dividends....................... 283
141........................ Joint and separate dividends........................................... 284
142........................ Apportionment of expenses of administration of joint and separate estates 284
143........................ Provision to be made for creditors residing at a distance etc. 285
144........................ Right of creditor who has not proved debt before declaration of dividend 285
145........................ Final dividend................................................................. 285
146........................ Distribution of dividends where bankrupt fails to file statement of affairs 286
147........................ No action for dividend.................................................... 286
Part VII—Discharge and annulment 288
Division 1—Preliminary 288
148........................ Misleading conduct by bankrupt..................................... 288
Division 2—Discharge by operation of law 290
Subdivision A—Discharge after certain period 290
149........................ Automatic discharge....................................................... 290
149A..................... Bankruptcy extended when objection made.................... 291
Subdivision B—Objections 292
149B...................... Objection to discharge.................................................... 292
149C...................... Form of notice of objection............................................. 292
149D..................... Grounds of objection...................................................... 293
149F...................... Copy of notice of objection to be given to bankrupt....... 295
149G..................... Date of effect of objection............................................... 295
149H..................... Trustee ceasing to object on some grounds..................... 295
149J....................... Withdrawal of objection.................................................. 296
Subdivision C—Review of objection 296
149K...................... Internal review of objection............................................ 296
149M..................... Inspector‑General may request further information........ 297
149N..................... Decision on review......................................................... 297
149P...................... Inspector‑General to notify bankrupt and trustee of decision 298
149Q..................... Review of decisions........................................................ 299
Division 4—Provisions applicable to all discharges 300
152........................ Discharged bankrupt to give assistance.......................... 300
153........................ Effect of discharge.......................................................... 300
Division 5—Annulment of bankruptcy 303
153A..................... Annulment on payment of debts..................................... 303
153B...................... Annulment by Court....................................................... 304
154........................ Effect of annulment......................................................... 304
Part VIII—Trustees 307
Division 1—Appointment and official name 307
156A..................... Consent to act as trustee.................................................. 307
157........................ Appointment of trustees.................................................. 308
158........................ Appointment of more than one trustee etc....................... 308
159........................ Vacancy in office of trustee............................................ 309
160........................ Official Trustee to be trustee when no registered trustee is trustee 309
161........................ Trustee may act in official name...................................... 310
Division 2—Remuneration and costs of the Official Trustee and Official Receiver 311
163........................ Remuneration of the Official Trustee.............................. 311
163A..................... Costs and expenses of Official Receiver......................... 311
Division 5—Vacation of office 312
180........................ Resignation of trustee..................................................... 312
181A..................... Streamlined method for replacing trustee........................ 312
183........................ Release of registered trustee by the Court....................... 313
184........................ Release of registered trustee by operation of law after 7 years 314
184A..................... Release of the Official Trustee........................................ 314
Part IX—Debt agreements 315
Division 1—Introduction 315
185........................ Definitions...................................................................... 315
Division 2—Debt agreement proposals 317
185C...................... Giving a debt agreement proposal to the Official Receiver 317
185D..................... Statement of affairs to be given with a debt agreement proposal 321
185E...................... Accepting a debt agreement proposal for processing...... 322
185EA................... Processing of debt agreement proposal........................... 324
185EB................... Inspection of creditor’s statement................................... 325
185EC................... Acceptance of a debt agreement proposal....................... 325
185ED................... Cancellation of acceptance of debt agreement proposal for processing 326
185F...................... Effect of accepting a debt agreement proposal for processing 327
185G..................... Lapsing of a debt agreement proposal............................. 329
Division 3—Making a debt agreement 330
185H..................... Making a debt agreement................................................ 330
185I....................... Parties to a debt agreement.............................................. 331
185K...................... Prevention of proceedings relating to debts.................... 331
Division 3A—Duties of administrators 332
185LA................... Duties of an administrator—general............................... 332
185LB................... Administrator to notify creditors of a 3‑month arrears default by a debtor 332
185LC................... Administrator to notify Official Receiver of a designated 6‑month arrears default by a debtor 333
185LD................... Administrator to maintain separate bank account............ 334
185LE.................... Administrator to keep accounts etc................................. 334
185LEA................. Annual return.................................................................. 335
185LF.................... Succession of administrator............................................ 336
185LG................... Duties of an administrator in relation to debt agreements—extended meaning 336
Division 4—Varying a debt agreement 338
185M..................... Varying a debt agreement............................................... 338
185MA.................. Procedures for dealing with proposals to vary debt agreements 338
185MB.................. Inspection of creditor’s statement................................... 339
185MC.................. Acceptance of a proposal to vary a debt agreement......... 339
185MD.................. Withdrawal of proposal to vary a debt agreement........... 340
Division 5—Ending a debt agreement 342
185N..................... End of debt agreement on discharge of obligations under agreement 342
185NA.................. Release of debtor from debts.......................................... 343
185P...................... Terminating a debt agreement by accepting a proposal... 343
185PA................... Procedures for dealing with proposals to terminate debt agreements 344
185PB................... Inspection of creditor’s statement................................... 345
185PC................... Acceptance of a proposal to terminate a debt agreement. 345
185PD................... Withdrawal of proposal to terminate a debt agreement.... 346
185Q..................... Terminating a debt agreement by order of the Court....... 347
185QA.................. Terminating a debt agreement—designated 6‑month arrears default 348
185R...................... Terminating a debt agreement by the bankruptcy of the debtor 348
185S...................... Validity of things done under a debt agreement that was terminated 349
Division 6—Voiding a debt agreement 350
185T...................... Applying for an order declaring a debt agreement void.. 350
185U..................... Making an order declaring a debt agreement void........... 351
185V..................... Validity of things done under a debt agreement that was declared void 352
Division 7—General provisions relating to debt agreements 353
185W..................... Court directions to the Official Receiver......................... 353
185X..................... No stamp duty payable on a debt agreement................... 353
185XA.................. Secured creditors............................................................ 353
185Y..................... Money received by administrator to be held on trust...... 353
185Z...................... Remuneration of administrator........................................ 354
185ZA................... Notification of death of administrator............................. 354
185ZB................... Official Trustee to replace an administrator who dies etc. 354
185ZC................... Official Receiver may appoint a new administrator......... 355
185ZCA................ Court may order administrator to make good loss caused by breach of duty 356
185ZCB................. Control of administrators by the Court........................... 356
185ZD................... Remuneration of administrator........................................ 357
Division 8—Registration of debt agreement administrators etc. 358
Subdivision A—Introduction 358
186A..................... Basic eligibility test......................................................... 358
Subdivision B—Registration of debt agreement administrators 360
186B...................... Application for registration as a debt agreement administrator 360
186C...................... Inspector‑General must approve or refuse to approve registration application 360
186D..................... Registration as a debt agreement administrator............... 363
186E...................... Duration of registration as a debt agreement administrator 363
186F...................... Conditions of registration—general................................ 363
186G..................... Condition of registration—companies............................ 364
186H..................... Application to change or remove registration conditions 364
Subdivision C—Surrender and cancellation of registration as a debt agreement administrator 365
186J....................... Surrender of registration as a debt agreement administrator 365
186K...................... Cancellation of an individual’s registration as a debt agreement administrator 366
186L...................... Cancellation of a company’s registration as a debt agreement administrator 367
186LA................... Inspector‑General may obtain information about debt agreement administration trust accounts 369
186LB................... Account‑freezing notices—debt agreement administration trust accounts 370
186LC................... Power of court to set aside account‑freezing notices....... 372
186LD................... Judicial enforcement of account‑freezing notices............ 373
186LE.................... Protection of bank........................................................... 373
Subdivision D—Ineligibility of a person to act as a debt agreement administrator 373
186M..................... Inspector‑General may declare a person ineligible to act as an administrator 373
Subdivision E—Miscellaneous 375
186N..................... Return of certificate of registration.................................. 375
186P...................... Cessation of registration as a debt agreement administrator—no refund of fees 377
186Q..................... Guidelines relating to Inspector‑General’s powers......... 377
Part X—Personal insolvency agreements 378
Division 1—Interpretation 378
187........................ Interpretation................................................................... 378
187A..................... Application of Part to joint debtors................................. 378
Division 2—Meeting of creditors and control of debtor’s property 379
188........................ Debtor may authorise trustee or solicitor to be controlling trustee 379
188A..................... Personal insolvency agreement....................................... 381
188B...................... Inspection of statement of debtor’s affairs...................... 383
189........................ Control of property of a debtor who has given authority under section 188 384
189AAA............... Stay of proceedings relating to creditor’s petition until meeting of debtor’s creditors 385
189AA.................. Court orders with effect during period of control of debtor’s property 385
189AB................... Charge over debtor’s property that is subject to control.. 386
189AC................... Right of indemnity for controlling trustee....................... 388
189A..................... Report and declaration by controlling trustee.................. 389
189B...................... Controlling trustee to prepare statement about possible resolutions 389
190........................ Duties and powers of controlling trustee........................ 390
190A..................... Additional duties of controlling trustee........................... 391
191........................ Payments to protect property etc..................................... 391
192........................ Changing the controlling trustee..................................... 392
204........................ Resolution for personal insolvency agreement................ 393
205........................ Duties of sheriff after receiving notice of signing of authority under section 188 etc. 394
205A..................... Duties of sheriff after receiving notice of execution of personal insolvency agreement etc. 397
206........................ Court may adjourn hearing of petition where creditors have passed resolution for personal insolvency agreement........................................................................ 402
207........................ Surrender of security etc. where secured creditor has voted 402
208........................ Termination of control of debtor’s property by the Court 404
209........................ Acts of controlling trustee to bind trustee of subsequent personal insolvency agreement or bankruptcy 404
210........................ Other provisions about controlling trustee...................... 405
211........................ Other provisions about debtor........................................ 405
Division 3—General provisions 406
215........................ Eligibility to be trustee of personal insolvency agreement 406
215A..................... Nomination or appointment of trustee of personal insolvency agreement 406
216........................ Execution of personal insolvency agreements................. 407
217........................ Failure of trustee to execute personal insolvency agreement 408
218........................ Notice of execution of personal insolvency agreement... 408
219........................ Trustee may sue, be sued etc. by official name............... 409
220........................ Filling of vacancy in office of trustee after execution of personal insolvency agreement etc. 409
221........................ Sequestration order where debtor fails to attend meeting, execute personal insolvency agreement etc. 411
221A..................... Variation of personal insolvency agreement................... 412
222........................ Court may set aside personal insolvency agreement....... 413
222A..................... Termination of personal insolvency agreement by trustee 416
222B...................... Termination of personal insolvency agreement by creditors 417
222C...................... Court may terminate personal insolvency agreement...... 418
222D..................... Termination of personal insolvency agreement by occurrence of terminating event 419
224........................ Validity of acts if personal insolvency agreement set aside or terminated 420
224A..................... Notice that a personal insolvency agreement has been set aside, varied or terminated 420
225........................ Evidence of personal insolvency agreement, resolution etc. 422
226........................ Creditor may inspect personal insolvency agreement etc. 422
227........................ Stamp duty not payable on personal insolvency agreements etc. entered into under this Part 423
229........................ Personal insolvency agreement to bind all creditors........ 423
230........................ Release of provable debts............................................... 424
231........................ Application of general provisions of Act to personal insolvency agreements 425
231A..................... Right of debtor to remaining property............................. 427
232........................ Certificate relating to discharge of obligations................ 428
Part XI—Administration of estates of deceased persons in bankruptcy 429
244........................ Administration of estates under this Part upon petition by creditor 429
245........................ Debtor dying after presentation of creditor’s petition...... 432
246........................ Statement of deceased debtor’s affairs etc. by legal personal representative 432
247........................ Petition for administration under this Part by person administering deceased person’s estate 433
247A..................... Commencement of administration under Part................. 434
248........................ Application of Act in relation to administrations under this Part 435
248A..................... Consolidation of proceedings......................................... 436
249........................ Vesting of property on making of order......................... 438
249A..................... Charge over property owned in joint tenancy................. 445
250........................ Effect of order under Part where deceased person was bankrupt 446
251........................ Real property devised by will that vests directly in devisee to form part of estate in certain cases 449
252........................ Liability of legal personal representative......................... 450
252A..................... Annulment on payment of debts..................................... 450
252B...................... Annulment by Court....................................................... 451
252C...................... Effect of annulment......................................................... 452
Part XIA—Farmers’ debts assistance 454
253A..................... Interpretation................................................................... 454
253B...................... Law of State or Territory may be proclaimed.................. 454
253C...................... Notice about stay under proclaimed law......................... 455
253E...................... Relevant authority may apply for stay of proceedings under certain petitions 455
253F...................... Relevant authority may be heard on application relating to debtor’s petition 456
Part XII—Unclaimed dividends or moneys 457
254........................ Payment of unclaimed moneys to the Commonwealth.... 457
Part XIII—Evidence 459
255........................ Record of proceedings or evidence................................. 459
256........................ Evidence of matters stated in notices published in Gazette 459
257........................ Evidence of proceedings at meetings of creditors or committee of inspection 459
258........................ Presumption about due convening of meetings etc......... 459
262........................ Swearing of affidavits..................................................... 460
Part XIV—Offences 462
263........................ Concealment etc. of property etc..................................... 462
263A..................... False affidavits................................................................ 464
263C...................... False claims about a creditor’s entitlement to vote.......... 464
264A..................... Failure of person to attend before the Court etc.............. 465
264B...................... Arrest of person failing to attend before the Court etc.... 466
264C...................... Refusal to be sworn or give evidence etc........................ 467
264D..................... Prevarication or evasion in the course of examination.... 468
264E...................... Offences in relation to Registrar or magistrate conducting an examination 468
265........................ Failure of bankrupt or debtor to disclose property etc..... 469
265A..................... Offences relating to exercise of powers under section 77A or 130 472
266........................ Disposing or charging of property by person who becomes, or has become, a bankrupt 473
267........................ False declaration by debtor or bankrupt.......................... 473
267B...................... Failure of person to provide information........................ 474
267D..................... Failure of person to attend.............................................. 475
267E...................... Arrest of person failing to attend before Official Receiver or authorised officer 475
267F...................... Refusal to be sworn or give evidence etc........................ 476
267G..................... Prevarication or evasion in the course of giving evidence 477
268........................ Offences in relation to personal insolvency agreements.. 477
269........................ Bankrupt or debtor who is a party to a debt agreement obtaining credit etc. without disclosing bankruptcy or debt agreement................................................................ 480
270........................ Failure to keep proper books of account......................... 481
271........................ Gambling or hazardous speculations.............................. 482
272........................ Leaving Australia with intent to defeat creditors etc........ 482
273........................ Trial of offences constituted by refusal, failure or omission to act 483
275........................ Criminal liability not affected by discharge etc................ 484
276........................ Trustee acting under a personal insolvency agreement that has been set aside 484
277........................ Punishment of contempt of court.................................... 485
277A..................... Keeping of books in respect of period of bankruptcy..... 485
277B...................... Infringement notices for offences................................... 486
Part XV—Provisions relating to the Bankruptcy (Estate Charges) Act 1997 488
278........................ Interpretation................................................................... 488
279........................ Administration of, and powers and functions in relation to, the Charges Acts 488
280........................ Deferred payment of interest charge or realisations charge 488
281........................ Late payment penalty—interest charge and realisations charge 490
282........................ Extension of time for payment—interest charge and realisations charge 490
283........................ Remission of interest charge, realisations charge and late payment penalty 491
284........................ Recovery of interest charge, realisations charge and late payment penalty 491
285........................ Payments by cheque or payment order........................... 491
286........................ Regulations may deal with other matters......................... 492
Part XVI—Miscellaneous 494
301........................ Certain provisions in contracts etc. to be void................. 494
302........................ Certain provisions in bills of sale etc. to be void............. 495
302A..................... Certain provisions in governing rules of superannuation funds and approved deposit funds to be void 495
302AB................... Certain provisions in RSA’s terms and conditions to be void 496
302B...................... Certain provisions in trust deeds void............................. 497
303........................ Applications to Court...................................................... 498
304........................ Parts of dollar to be disregarded in determining majority in value of creditors etc. 498
304A..................... Indexation....................................................................... 498
305........................ Payment of expenses by Commonwealth....................... 500
306........................ Formal defect not to invalidate proceedings.................... 502
306A..................... Protection of Registrars, magistrates etc. in relation to examinations 502
306B...................... Protection in respect of reports....................................... 502
307........................ Proceedings in firm name............................................... 503
308........................ Representation of corporation etc.................................... 503
309........................ Service of notices etc...................................................... 503
311........................ Stamp duty not payable on trustee’s cheques or receipts 504
313........................ Audit of accounts and records of the Official Trustee and the Official Receivers 504
315........................ Regulations..................................................................... 505
316........................ Legislative instruments determining fees........................ 507
Schedule 1—Acts repealed 508
Schedule 2—Insolvency Practice Schedule (Bankruptcy) 509
Part 1—Introduction 509
Division 1—Introduction 509
1‑1......................... Object of this Schedule................................................... 509
1‑5......................... Simplified outline of this Schedule................................. 509
Division 5—Definitions 511
Subdivision A—Introduction 511
5‑1......................... Simplified outline of this Division.................................. 511
Subdivision B—The Dictionary 511
5‑5......................... The Dictionary................................................................ 511
Subdivision C—Other definitions 513
5‑10....................... Meaning of current conditions....................................... 513
5‑15....................... Meaning of regulated debtor.......................................... 514
5‑16....................... Meaning of regulated debtor’s estate............................. 514
5‑20....................... Meaning of trustee of a regulated debtor’s estate.......... 515
5‑25....................... References to the trustee of a regulated debtor’s estate... 515
5‑30....................... Persons with a financial interest in the administration of a regulated debtor’s estate 515
Division 6—Application of this Schedule to Official Trustee 516
6‑1......................... Schedule generally does not apply to the Official Trustee 516
Part 2—Registering and disciplining practitioners 517
Division 10—Introduction 517
10‑1....................... Simplified outline of this Part......................................... 517
10‑5....................... Working cooperatively with ASIC................................. 518
Division 15—Register of trustees 519
15‑1....................... Register of Trustees........................................................ 519
Division 20—Registering trustees 520
Subdivision A—Introduction 520
20‑1....................... Simplified outline of this Division.................................. 520
Subdivision B—Registration 521
20‑5....................... Application for registration............................................. 521
20‑10..................... Inspector‑General may convene a committee to consider 521
20‑15..................... Inspector‑General must refer applications to a committee 521
20‑20..................... Committee to consider applications................................. 522
20‑25..................... Committee to report........................................................ 523
20‑30..................... Registration..................................................................... 524
20‑35..................... Conditions imposed on all registered trustees or a class of registered trustees 525
Subdivision C—Varying etc. conditions of registration 525
20‑40..................... Application to vary etc. conditions of registration........... 525
20‑45..................... Inspector‑General may convene a committee to consider applications 526
20‑50..................... Inspector‑General must refer applications to a committee 526
20‑55..................... Committee to consider applications................................. 526
20‑60..................... Committee to report........................................................ 527
20‑65..................... Committee’s decision given effect.................................. 527
Subdivision D—Renewal 527
20‑70..................... Application for renewal.................................................. 527
20‑75..................... Renewal.......................................................................... 528
Subdivision E—Offences relating to registration 529
20‑80..................... False representation that a person is a registered trustee. 529
Division 25—Insurance 530
25‑1....................... Registered trustees to maintain insurance........................ 530
Division 30—Annual trustee returns 531
30‑1....................... Annual trustee returns..................................................... 531
Division 35—Notice requirements 533
35‑1....................... Notice of significant events............................................. 533
35‑5....................... Notice of other events..................................................... 534
Division 40—Disciplinary and other action 535
Subdivision A—Introduction 535
40‑1....................... Simplified outline of this Division.................................. 535
Subdivision B—Direction to comply 536
40‑5....................... Registered trustee to remedy failure to lodge documents or give information or documents 536
40‑10..................... Registered trustee to correct inaccuracies etc................... 537
40‑15..................... Direction not to accept further appointments................... 539
Subdivision C—Automatic cancellation 540
40‑20..................... Automatic cancellation.................................................... 540
Subdivision D—Inspector‑General may suspend or cancel registration 541
40‑25..................... Inspector‑General may suspend registration................... 541
40‑30..................... Inspector‑General may cancel registration...................... 542
40‑35..................... Notice of suspension or cancellation............................... 543
Subdivision E—Disciplinary action by committee 543
40‑40..................... Inspector‑General may give a show‑cause notice........... 543
40‑45..................... Inspector‑General may convene a committee.................. 545
40‑50..................... Inspector‑General may refer matters to the committee.... 546
40‑55..................... Decision of the committee............................................... 546
40‑60..................... Committee to report........................................................ 547
40‑65..................... Inspector‑General must give effect to the committee’s decision 548
Subdivision F—Lifting or shortening suspension 548
40‑70..................... Application to lift or shorten suspension........................ 548
40‑75..................... Inspector‑General may convene a committee to consider applications 549
40‑80..................... Inspector‑General must refer applications to a committee 549
40‑85..................... Committee to consider applications................................. 549
40‑90..................... Committee to report........................................................ 550
40‑95..................... Committee’s decision given effect.................................. 550
Subdivision G—Action initiated by industry body 550
40‑100................... Notice by industry bodies of possible grounds for disciplinary action 550
40‑105................... No liability for notice given in good faith etc.................. 552
40‑110................... Meaning of industry bodies............................................ 553
Division 45—Court oversight of registered trustees 554
45‑1....................... Court may make orders in relation to registered trustees. 554
45‑5....................... Court may make orders about costs................................ 555
Division 50—Committees under this Part 556
50‑1....................... Simplified outline of this Division.................................. 556
50‑5....................... Prescribed body appointing a person to a committee...... 556
50‑10..................... Minister appointing a person to a committee................... 557
50‑15..................... Single committee may consider more than one matter..... 557
50‑20..................... Ongoing consideration of matters by committee............. 558
50‑25..................... Procedure and other rules relating to committees............ 558
50‑30..................... Remuneration of committee members............................. 559
50‑35..................... Committee must only use information etc. for purposes for which disclosed 559
Part 3—General rules relating to estate administrations 561
Division 55—Introduction 561
55‑1....................... Simplified outline of this Part......................................... 561
Division 60—Remuneration and other benefits received by the trustee 562
Subdivision A—Introduction 562
60‑1....................... Simplified outline of this Division.................................. 562
Subdivision B—Remuneration of trustees 563
60‑5....................... Trustee’s remuneration................................................... 563
60‑10..................... Remuneration determinations—creditors or committee of inspection 563
60‑11..................... Remuneration determinations—Inspector‑General......... 564
60‑12..................... Remuneration determinations—general rules.................. 564
60‑15..................... Maximum default amount............................................... 565
Subdivision E—Duties of trustees relating to remuneration and benefits etc. 567
60‑20..................... Trustee must not derive profit or advantage from the administration of the estate 567
60‑21..................... Inducements to be appointed as trustee........................... 569
60‑26..................... Payments in respect of performance by third parties....... 569
Division 65—Funds handling 571
65‑1....................... Simplified outline of this Division.................................. 571
65‑5....................... Trustee must pay all money into the administration account 571
65‑10..................... Administration accounts................................................. 572
65‑15..................... Trustee must not pay other money into the administration account 572
65‑20..................... Consequences for failure to pay money into administration account 573
65‑25..................... Paying money out of administration account.................. 574
65‑31..................... Interest on administration account................................... 575
65‑32..................... Reconciliation of administration account......................... 575
65‑40..................... Handling securities......................................................... 576
65‑45..................... Handling of money and securities—Court directions..... 577
65‑46..................... Review of payments to third parties................................ 577
65‑50..................... Rules in relation to consequences for failure to comply with this Division 578
Division 70—Information 579
Subdivision A—Introduction 579
70‑1....................... Simplified outline of this Division.................................. 579
Subdivision B—Annual administration return 580
70‑5....................... Annual administration return.......................................... 580
Subdivision C—Record‑keeping 580
70‑6....................... Subdivision applies to the Official Trustee..................... 580
70‑10..................... Administration books..................................................... 581
70‑11..................... Trustee’s books when trading......................................... 582
70‑15..................... Audit of administration books—Inspector‑General........ 582
70‑20..................... Audit of administration books—on order of the Court... 583
70‑25..................... Trustee to comply with auditor requirements.................. 584
70‑30..................... Transfer of books to new trustee.................................... 584
70‑35..................... Retention, return or destruction of books........................ 586
70‑36..................... Return or destruction of irrelevant books........................ 587
Subdivision D—Giving information etc. to creditors and others 588
70‑37..................... Subdivision applies to the Official Trustee..................... 588
70‑40..................... Right of creditors to request information etc. from trustee 588
70‑45..................... Right of individual creditor to request information etc. from trustee 588
70‑50..................... Reporting to creditors..................................................... 589
Subdivision E—Other requests for information etc. 590
70‑51..................... Subdivision applies to the Official Trustee..................... 590
70‑55..................... Commonwealth may request information etc.................. 590
70‑56..................... Right of regulated debtor to request information etc. from trustee 591
Subdivision F—Reporting to the Inspector‑General 591
70‑60..................... Insolvency Practice Rules may provide for reporting to Inspector‑General 591
Subdivision G—Trustee may be compelled to comply with requests for information etc. 592
70‑65..................... Application of this Subdivision...................................... 592
70‑70..................... Inspector‑General may direct trustee to comply with the request for relevant material 593
70‑75..................... Inspector‑General must notify trustee before giving a direction under section 70‑70 593
70‑80..................... Inspector‑General must not direct trustee to give the relevant material if trustee entitled not to comply with the request............................................................................ 594
70‑85..................... Inspector‑General may impose conditions on use of the relevant material 594
70‑90..................... Court may order relevant material to be given................. 595
Division 75—Meetings of creditors 596
75‑1....................... Simplified outline of this Division.................................. 596
75‑2....................... Division applies to the Official Trustee........................... 596
75‑5....................... Other obligations to convene meetings not affected........ 596
75‑10..................... Trustee may convene meetings....................................... 596
75‑15..................... Trustee must convene meeting in certain circumstances.. 597
75‑20..................... Trustee must convene meeting if required by the Inspector‑General 597
75‑25..................... Trustee’s representative at meetings................................ 598
75‑30..................... Inspector‑General may attend meetings.......................... 598
75‑35..................... Commonwealth may attend certain meetings etc............. 598
75‑40..................... Proposals to creditors without meeting........................... 599
75‑50..................... Rules relating to meetings............................................... 600
Division 80—Committees of inspection 601
80‑1....................... Simplified outline of this Division.................................. 601
80‑2....................... Division applies to the Official Trustee........................... 602
80‑5....................... Application of sections 80‑10 to 80‑25........................... 602
80‑10..................... Committee of inspection................................................. 602
80‑15..................... Appointment and removal of members of committee of inspection by creditors generally 602
80‑20..................... Appointment of committee member by large creditor..... 603
80‑25..................... Appointment of committee member by employees......... 603
80‑30..................... Committees of inspection—procedures etc..................... 604
80‑35..................... Functions of committee of inspection............................. 605
80‑40..................... Committee of inspection may request information etc..... 605
80‑45..................... Reporting to committee of inspection.............................. 606
80‑50..................... Committee of inspection may obtain specialist advice or assistance 607
80‑55..................... Obligations of members of committee of inspection....... 607
80‑60..................... Obligations of creditor appointing a member of committee of inspection 609
80‑65..................... The Inspector‑General may attend committee meetings.. 610
80‑70..................... The Court may inquire into conduct of the committee..... 610
Division 85—Directions by creditors 611
85‑1....................... Simplified outline of this Division.................................. 611
85‑2....................... Division applies to the Official Trustee........................... 611
85‑5....................... Trustee to have regard to directions given by creditors... 611
Division 90—Review of the administration of a regulated debtor’s estate 612
Subdivision A—Introduction 612
90‑1....................... Simplified outline of this Division.................................. 612
Subdivision B—Court powers to inquire and make orders 613
90‑2....................... Subdivision applies to the Official Trustee..................... 613
90‑5....................... Court may inquire on own initiative................................ 613
90‑10..................... Court may inquire on application of creditors etc............ 613
90‑15..................... Court may make orders in relation to estate administration 614
90‑20..................... Application for Court order............................................ 616
Subdivision C—Review by Inspector‑General 617
90‑21..................... Review by Inspector‑General......................................... 617
90‑22..................... Rules about reviews........................................................ 618
Subdivision D—Removal by creditors 618
90‑30..................... Subdivision applies to the Official Trustee..................... 618
90‑35..................... Removal by creditors...................................................... 619
Part 4—Other matters 620
Division 95—Introduction 620
95‑1....................... Simplified outline of this Part......................................... 620
Division 96—Administrative review 621
96‑1....................... Review by the Administrative Appeals Tribunal............ 621
Division 100—Other matters 622
100‑1..................... Division applies to the Official Trustee........................... 622
100‑5..................... Trustee may assign right to sue under this Act............... 622
Division 105—The Insolvency Practice Rules 623
105‑1..................... The Insolvency Practice Rules........................................ 623
Endnotes 625
Endnote 1—About the endnotes 625
Endnote 2—Abbreviation key 627
Endnote 3—Legislation history 628
Endnote 4—Amendment history 647
An Act relating to Bankruptcy
Part I—Preliminary
1 Short title
This Act may be cited as the Bankruptcy Act 1966.
2 Commencement
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.
4A Insolvency Practice Schedule
Schedule 2 has effect.
Part IA—Interpretation
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) who becomes the replacement administrator under section 185ZB; or
(c) appointed by an Official Receiver under section 185ZC.
affidavit includes affirmation and statutory declaration.
approved form: a document is in the approved form if it is in accordance with section 6D.
associated entity, in relation to a person, means:
(a) an entity (other than a company) that is, or has been, associated with the person; or
(b) a company that is, or has been, associated with the person at a time when the company is, or was, as the case may be, a private company.
Australia, when used in a geographical sense, does not include Norfolk Island.
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.
bank means an ADI or any other bank.
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.
business day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.
child: without limiting who is a child of a person for the purposes of this Act, each of the following is the child of a person:
(a) an adopted child, stepchild or exnuptial child of the person;
(b) someone who is a child of the person within the meaning of the Family Law Act 1975.
close relative, in relation to a person, means a spouse, de facto partner, parent, child, brother, sister, half‑brother, or half‑sister, of the person.
Commonwealth proceeds of crime authority means a proceeds of crime authority within the meaning of the Proceeds of Crime Act 2002.
Note: Under that Act, the proceeds of crime authority is either the Commissioner of the Australian Federal Police or the Director of Public Prosecutions (see the definition of proceeds of crime authority in section 338 of that Act). Responsibility can be transferred between these authorities (see section 315B of that Act).
company means a corporation, other than a corporation that is incorporated within Australia or an external Territory and is:
(a) a public authority; or
(b) an instrumentality or agency of the Crown in right of the Commonwealth, in right of a State or in right of a Territory 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;
(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 partner has the meaning given by the Acts Interpretation Act 1901.
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.
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 has the meaning given by section 139CA.
examinable person, in relation to a person (in this definition called the relevant person), means:
(a) if the relevant person is a debtor and property of the debtor is known or suspected to be in the possession of a person—that person;
(b) if the relevant person has become a bankrupt and any of the property of the bankrupt is known or suspected to be in the possession of a person—that person;
(c) in any case—a person who is believed to be indebted to the relevant person;
(d) if a person, including:
(i) a person who is an associated entity of the relevant person; or
(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 Justice, the Deputy Chief Justice or a Senior Judge).
Federal Circuit Court means the Federal Circuit Court of Australia.
Finance Minister means the Minister administering the Public Governance, Performance and Accountability Act 2013.
forfeiture order means a forfeiture order made under a proceeds of crime law.
frozen debt means a debt that:
(a) is owed by a declared debtor; and
(b) would, if the debtor had become a bankrupt when the declaration of intention was accepted under section 54C, be provable in the bankruptcy;
but does not include a debt in respect of the debtor’s liability under a maintenance agreement or maintenance order (whenever entered into or made).
goods includes all chattels personal.
industrial instrument means:
(a) a law of the Commonwealth, a State or a Territory regulating conditions of employment; or
(b) an award, determination or agreement made under such a law.
Insolvency Practice Rules means the rules made by the Minister under section 105‑1 of Schedule 2.
Inspector‑General means the Inspector‑General in Bankruptcy, and includes a person acting as the Inspector‑General.
interstate confiscation order means an interstate forfeiture order or an interstate pecuniary penalty order.
interstate forfeiture order has the same meaning as in the Proceeds of Crime Act 2002.
interstate pecuniary penalty order has the same meaning as in the Proceeds of Crime Act 2002.
in the possession of includes in the custody of or under the control of.
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 Judge of the Local Court of the Northern Territory, being a person in respect of whom an arrangement under subsection 17B(2) applies; or
(c) a person who holds office as a Magistrate of a Territory of the Commonwealth.
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) any other agreement with respect to the maintenance of a person that has been registered in, or approved by, a court in Australia or an external Territory;
but does not include a financial agreement, or Part VIIIAB financial agreement, within the meaning of the Family Law Act 1975.
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: a person is the parent of anyone who is the person’s child.
pecuniary penalty order means:
(a) a pecuniary penalty order made under a proceeds of crime law; or
(b) a literary proceeds order within the meaning of the Proceeds of Crime Act 2002; or
(c) an unexplained wealth order within the meaning of the Proceeds of Crime Act 2002.
personal insolvency agreement means a personal insolvency agreement executed under Part X.
Note: Section 188A sets out requirements for personal insolvency agreements.
personal services, in relation to a bankrupt, means services of a physical, intellectual or other kind supplied by the bankrupt himself or herself:
(a) whether or not in a capacity as employee; and
(b) whether or not the supply of the services by the bankrupt discharged the obligations of an entity to supply services.
petition means a petition under this Act.
PPSA grantor or debtor (short for Personal Property Securities Act grantor or debtor), in relation to a PPSA security interest, means a grantor or debtor within the meaning of the Personal Property Securities Act 2009.
PPSA secured party (short for Personal Property Securities Act secured party), in relation to a PPSA security interest, means a secured party within the meaning of the Personal Property Securities Act 2009.
PPSA security agreement (short for Personal Property Securities Act security agreement), in relation to a PPSA security interest, means a security agreement within the meaning of the Personal Property Securities Act 2009.
PPSA security interest (short for Personal Property Securities Act security interest) means a security interest within the meaning of the Personal Property Securities Act 2009 and to which that Act applies, other than a transitional security interest within the meaning of that Act.
Note 1: The Personal Property Securities Act 2009 applies to certain security interests in personal property. See the following provisions of that Act:
(a) section 8 (interests to which the Act does not apply);
(b) section 12 (meaning of security interest);
(c) Chapter 9 (transitional provisions).
Note 2: For the meaning of transitional security interest, see section 308 of the Personal Property Securities Act 2009.
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 has the same meaning as in section 5‑5 of Schedule 2.
Register of Trustees has the same meaning as in section 15‑1 of Schedule 2.
Registrar means:
(a) the Chief Executive Officer and Principal Registrar, a Registrar, a District Registrar or a Deputy District Registrar of the Federal Court; or
(b) the Chief Executive Officer and Principal Registrar or a Registrar of the Federal Circuit 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, or de facto partner, of such a beneficiary;
(h) a trustee of a trust under which the person, or a relative of the person, is a beneficiary;
(i) a member of a partnership of which the person, or a relative of the person, is a member;
For the purposes of paragraph (c) of this definition, the question whether a body corporate is related to another body corporate is to be determined in the same manner as that question is determined for the purposes of the Corporations Act 2001.
relative, in relation to a person, means:
(a) the spouse of the person; or
(b) a parent or remoter lineal ancestor of the person or of the person’s spouse; or
(c) a child or remoter lineal descendant of the person or of the person’s spouse; or
(d) a brother or sister of the person or of the person’s spouse; or
(e) an uncle, aunt, nephew or niece of the person or of the person’s spouse; or
(f) the spouse of a person specified in paragraph (b), (c), (d) or (e).
For the purposes of this definition, spouse includes de facto partner.
Note: Parent and child are defined by this subsection.
resolution: a resolution is passed by creditors of a regulated debtor’s estate:
(a) in a meeting—in the circumstances prescribed under paragraph 75‑50(2)(k) of Schedule 2; or
(b) without a meeting—in the circumstances prescribed under paragraph 75‑40(5)(b) of Schedule 2.
restraining order means a restraining order made under a proceeds of crime law.
RSA has the same meaning as in the Retirement Savings Accounts Act 1997.
RSA holder has the same meaning as in the Retirement Savings Accounts Act 1997.
rural support scheme means a program or scheme that:
(a) is administered by or on behalf of the Commonwealth, a State or a Territory; and
(b) relates to:
(i) agriculture or the cultivation of land; or
(ii) the maintenance of animals for commercial purposes; or
(iii) horticulture; or
(iv) any other primary industry activity.
secured creditor, in relation to a debtor, means:
(a) in the case of a debt secured by a PPSA security interest—the PPSA secured party in relation to the interest, if the interest:
(i) arose as security for the debt; and
(ii) is perfected (within the meaning of the Personal Property Securities Act 2009); or
(b) in the case of any other debt—a person holding a mortgage, charge or lien on property of the debtor as a security for a debt due to him or her from the debtor.
sheriff includes any person charged with the execution of a writ or other process.
special resolution: a special resolution is passed by creditors of a regulated debtor’s estate:
(a) in a meeting—in the circumstances prescribed under paragraph 75‑50(2)(k) of Schedule 2; or
(b) without a meeting—in the circumstances prescribed under paragraph 75‑40(5)(b) of Schedule 2.
state 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 21 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.
stepchild: without limiting who is a stepchild of a person for the purposes of this Act, someone is the stepchild of a person if he or she would be the person’s stepchild except that the person is not legally married to the person’s de facto partner.
Territory, except in the expression “Territory of the Commonwealth”, means the Australian Capital Territory or the Northern Territory of Australia.
Territory of the Commonwealth means a Territory referred to in section 122 of the Constitution, other than Norfolk Island.
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 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 and the Insolvency Practice Rules.
(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.
(6) For the purposes of this Act, the members of a person’s family are taken to include the following (without limitation):
(a) a de facto partner of the person;
(b) someone who is the child of the person, or of whom the person is the child, because of the definition of child in this section;
(c) anyone else who would be a member of the person’s family if someone mentioned in paragraph (a) or (b) is taken to be a member of the person’s family.
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;
(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 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) and subsection 54A(2), paragraphs 55(2)(b), 56B(3)(a) and (b), 56F(1)(a) and (b), 57(2)(a) and (b) and sections 77CA and 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 an approved form; and
(b) includes a statement identifying any creditor who is a related entity of the debtor or bankrupt; and
(c) contains a declaration that, so far as the debtor or bankrupt is aware, the particulars set out in the statement are correct.
(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
(2) A reference in paragraph 246(1)(a) or subsection 247(1) to a statement of a deceased person’s affairs and of administration of the deceased person’s estate is a reference to a statement, in an approved form, of those affairs and of that administration.
(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.
6D Approved forms
(1) A document that this Act requires to be in an approved form must:
(a) be in the form approved by the Inspector‑General for the document; and
(b) include the information, statements, explanations or other matters required by the form; and
(c) be accompanied by any other material required by the form.
(2) A reference in this Act to a document in the approved form, includes a reference to any other material included with or accompanying the document as required by the relevant form.
(3) If:
(a) this Act requires a document to be in an approved form; and
(b) a provision of this Act specifies, or provides for the Insolvency Practice Rules to specify, information, statements, explanations or other matters that must be included in the document, or other material that must accompany the document;
that other provision is not taken to exclude or limit the operation of subsection (1) in relation to the approved form (and so the approved form may also require information etc. to be included in the form or material to accompany the form).
(4) The Insolvency Practice Rules may make provision for and in relation to:
(a) methods of verifying any information required by or in approved forms; and
(b) the manner in which, the persons by whom, and the directions or requirements in accordance with which, approved forms are required or permitted to be signed, prepared, or completed.
Part IB—Application 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 binds the Crown
This Act binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory and of the Northern Territory.
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.
9A Act does not extend to Norfolk Island
This Act does not extend to Norfolk Island.
Part II—Administration
Division 1—General
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 of 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
(bc) may make such inquiries and investigations as the Inspector‑General thinks fit with respect to whether a person has committed an offence against this Act; and
(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 or the administrator of a debt agreement, for the purposes of subsection (1), to provide a report as to the operation of this Act, the registered trustee or administrator, as the case may be, shall forthwith provide the report requested.
(1BA) The Inspector‑General may make an inquiry or investigation under paragraph (1)(b), (ba), (bb) or (bc) at any time, whether before or after the end of the bankruptcy, composition, scheme or agreement or administration concerned.
(1B) Where the Inspector‑General makes an inquiry or investigation referred to in paragraph (1)(b), (ba), (bb) or (bc), the Inspector‑General may give a copy of the report of the results of the inquiry or investigation to any person the Inspector‑General thinks fit.
(1C) Without limiting the generality of paragraphs (1)(a) and (b), the Inspector‑General may make inquiries and investigations under those paragraphs at the request of:
(a) if the Inspector‑General is satisfied that the request relates to an application, or proposed application, for a confiscation order—the Commonwealth proceeds of crime authority that is the responsible authority, or that is proposed to be the responsible authority, for the application or proposed application under the Proceeds of Crime Act 2002; or
(b) if the Inspector‑General is satisfied that the request relates to an application, or proposed application, for an interstate confiscation order—a person who is entitled, under a corresponding law, to apply for an order of that kind.
(1D) For the purposes of paragraph (1)(bb), any conduct engaged in by the administrator of a debt agreement:
(a) in fulfilment, or purported fulfilment, of a duty of the administrator under this Act; or
(b) in breach of a duty of the administrator under this Act;
is taken to be conduct of the administrator that relates to a debt agreement, even if the conduct does not relate to a particular debt agreement.
(1E) For the purposes of paragraph (1)(bb), if a person signs a certificate under subsection 185C(2D) in relation to a debt agreement proposal, the person’s conduct in relation to the certificate is taken to be conduct of an administrator that relates to a debt agreement.
(1F) For the purposes of paragraph (1)(bb), if a person:
(a) gives a notification in compliance, or purported compliance with subsection 185N(5); or
(b) breaches subsection 185N(5);
the giving of the notification, or the breach, as the case may be, is taken to be the conduct of an administrator that relates to a debt agreement.
(2) For the purposes of discharging his or her functions under this Act, the Inspector‑General may:
(a) require the production of any books kept by an Official Receiver or by a trustee; and
(b) require a trustee to answer an inquiry made to him or her in relation to any of the following matters in which the trustee is, or has been, engaged:
(i) a bankruptcy;
(ii) the control of property under an authority given under section 188;
(iii) an administration under Part XI;
(iv) a personal insolvency agreement, scheme of arrangement or composition; and
(c) at any time investigate the books of a trustee; and
(d) require the production of any books kept by the administrator, or former administrator, of a debt agreement; and
(e) require the administrator, or former administrator, of a debt agreement to answer an inquiry made of the administrator or former administrator, as the case may be, in relation to the administration of the debt agreement; and
(f) at any time investigate the books of the administrator, or former administrator, of a debt agreement.
(2A) If the Inspector‑General believes on reasonable grounds that a person has information that is relevant to an inquiry or investigation under paragraph (1)(bc), the Inspector‑General may, by written notice given to the person, require the person to give to the Inspector‑General, within the period and in the manner specified in the notice, any such information.
(2B) The period specified in a notice given under subsection (2A) must be at least 14 days after the notice is given.
(2C) A person commits an offence if:
(a) the person has been given a notice under subsection (2A); and
(b) the person fails to comply with the notice.
Penalty: Imprisonment for 12 months.
(2D) A notice under subsection (2A) must set out the effect of the following provisions:
(a) subsection (2C);
(b) section 137.1 of the Criminal Code (about giving false or misleading information).
(2E) Subsection (2A) does not limit the application of subsection (2) in relation to an inquiry or investigation under paragraph (1)(bc).
(4) The Inspector‑General may disclose information obtained by the Inspector‑General in the course of exercising powers or performing functions under this Act to any of the following bodies, if the Inspector‑General is satisfied that the information will enable or assist the body to exercise any of its powers or perform any of its functions:
(a) a Commonwealth entity (within the meaning of the Public Governance, Performance and Accountability Act 2013);
(b) a prescribed professional disciplinary body.
13 The Australian Financial Security Authority
For the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):
(a) the following group of persons is a listed entity:
(i) the Inspector‑General;
(ii) persons engaged under the Public Service Act 1999 to assist the Inspector‑General; and
(b) the listed entity is to be known as the Australian Financial Security Authority; and
(c) the Inspector‑General is the accountable authority of the Australian Financial Security Authority; and
(d) the persons referred to in paragraph (a) are officials of the Australian Financial Security Authority; and
(e) the purposes of the Australian Financial Security Authority include the functions of the Inspector‑General referred to in subsection 11(2) and section 12.
15 Official Receivers
(1) There is to be such number of Official Receivers as the Minister thinks 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.
Note: For rules that apply to acting appointments, see section 33A of the Acts Interpretation Act 1901.
(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.
Note: For rules that apply to acting appointments, see section 33A of the Acts Interpretation Act 1901.
17B Arrangements for services of State Magistrates and Northern Territory Local Court Judges
(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 Judges of the Local Court of the Northern Territory.
18 The Official Trustee in Bankruptcy
Corporate status of Official Trustee
(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.
Extra function of Official Trustee
(3) The functions of the Official Trustee include acting in accordance with an order of a court relating to the payment of a debt due by a person to the Commonwealth or a Commonwealth authority.
Example: Such an order may, for example, provide for the Official Trustee to:
(a) take custody of, control and own property as security for payment of such a debt; and
(b) sell the property; and
(c) apply the proceeds of the sale wholly or partly towards the payment of the debt.
Note: Other provisions of this Act and other laws of the Commonwealth confer other functions on the Official Trustee.
Official Trustee’s seals
(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.
Official Receiver acting for Official Trustee
(8) The Official Receiver may exercise the powers, and perform the functions, of the Official Trustee.
(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.
Inspector‑General acting for 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 related to any of the following matters:
(a) a bankruptcy;
(b) control of a debtor’s property under section 50;
(c) a scheme of arrangement or composition under Division 6 of Part IV;
(d) a matter relating to a debt agreement proposal;
(e) Part X administration;
(f) administration under Part XI.
(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.
(8E) In subsection (8B):
matter relating to a debt agreement proposal includes:
(a) a debt agreement; and
(b) an activity required or permitted by a debt agreement.
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.
State of mind of 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.
General interpretation provisions
(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 Public Governance, Performance and Accountability Act 2013 does not apply to the Official Trustee
Despite paragraph 10(1)(d) of the Public Governance, Performance and Accountability Act 2013, the Official Trustee is not a Commonwealth entity for the purposes of that Act.
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;
(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;
(l) the duties imposed on the trustee under Schedule 2.
(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.
19B Trustee to give Official Receiver information etc.
(1) The trustee of the estate of a bankrupt must give the Official Receiver such information, access to and facilities for inspecting the bankrupt’s books and generally such assistance as is necessary for enabling the Official Receiver to perform his or her duties.
(2) This section does not apply to the Official Trustee.
Division 2—Common 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.
(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.
(7A) Any payment that the Official Trustee is authorised, required or permitted to make under:
(a) a debt agreement; or
(b) a personal insolvency agreement;
is to be made out of money in the Common Fund.
(8) This subsection applies to moneys held or received by the Official Trustee:
(aa) acting in accordance with an order of a court relating to the payment of a debt due by a person to the Commonwealth or a Commonwealth authority; or
(a) under a direction given, or order made, under section 50; or
(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 Finance Minister to borrow from the Commonwealth under this section moneys not exceeding such amount as is specified in the instrument.
(2) The Finance Minister may, on behalf of the Commonwealth, lend to the Official Trustee, on such terms and conditions as he or she determines, moneys that the Official Trustee has applied under subsection (1) to borrow.
(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 Public Governance, Performance and Accountability Act 2013.
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 Inspector‑General must, at such times as the Inspector‑General considers appropriate and, in any event, at least once every 6 months, determine whether any amounts standing to the credit of the Equalization Account are not required for the purposes of subsection (4). If the Inspector‑General determines that any amounts are not so required, the Inspector‑General may direct that the amounts not so required, or any part of those amounts, are to be debited from the Equalization Account.
(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 III—Courts
Division 2—Jurisdiction and powers of courts in bankruptcy
27 Bankruptcy courts
(1) The Federal Court and the Federal Circuit Court have concurrent jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than:
(a) the jurisdiction of the High Court under section 75 of the Constitution; or
(b) the jurisdiction of the Family Court under section 35 or 35A of this Act.
(2) To avoid doubt, subsection (1) does not:
(a) confer jurisdiction in a criminal matter; or
(b) exclude the jurisdiction of a court of a State or Territory under the Judiciary Act 1903 in a criminal matter relating to this Act.
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.
35 Family Court’s jurisdiction in bankruptcy where trustee is a party to property settlement or spousal maintenance proceedings etc.
(1) If, at a particular time:
(a) a party to a marriage is a bankrupt; and
(b) the trustee of the bankrupt’s estate is:
(i) a party to property settlement proceedings in relation to either or both of the parties to the marriage; or
(ii) an applicant under section 79A of the Family Law Act 1975 for the variation or setting aside of an order made under section 79 of that Act in property settlement proceedings in relation to either or both of the parties to the marriage; or
(iii) a party to spousal maintenance proceedings in relation to the maintenance of a party to the marriage;
then, at and after that time, the Family Court has jurisdiction in bankruptcy in relation to any matter connected with, or arising out of, the bankruptcy of the bankrupt.
(1A) If, at a particular time:
(a) a party to a de facto relationship is a bankrupt; and
(b) the trustee of the bankrupt’s estate is:
(i) a party to property settlement proceedings in relation to either or both of the parties to the de facto relationship; or
(ii) an applicant under section 90SN of the Family Law Act 1975 for the variation or setting aside of an order made under section 90SM of that Act in property settlement proceedings in relation to either or both of the parties to the de facto relationship; or
(iii) a party to maintenance proceedings under Part VIIIAB of the Family Law Act 1975 in relation to the maintenance of one of the parties to the de facto relationship;
then, at and after that time, the Family Court has jurisdiction in bankruptcy in relation to any matter connected with, or arising out of, the bankruptcy of the bankrupt.
(2) Subsections (1) and (1A) do not limit the Family Court’s jurisdiction under section 35A.
(3) In this section:
property settlement proceedings has the same meaning as in the Family Law Act 1975.
spousal maintenance proceedings means proceedings under the Family Law Act 1975 with respect to the maintenance of a party to a marriage.
(4) An expression used in subsection (1A) that is also used in the Family Law Act 1975 has the same meaning in that subsection as it has in that Act.
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 Circuit Court, the Federal Circuit 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, 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.
Note: Rules of Court made under the Family Law Act 1975 (rather than Rules of Court made under the Federal Court of Australia Act 1976) apply in relation to proceedings transferred to the Family Court under this section.
(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 Circuit Court in relation to the transfer of a proceeding under this Act to the Family Court.
35B Family Court of Western Australia
(1) Sections 27, 35 (other than subsection (1A)) and 35A apply to the Family Court of Western Australia in a corresponding way to the way in which they apply to the Family Court of Australia.
(1A) Despite subsection (1), section 35A does not apply to the Family Court of Western Australia in relation to a de facto financial cause (within the meaning of the Family Law Act 1975).
(2) Paragraph 35A(3)(f) has effect, in relation to a proceeding transferred to the Family Court of Western Australia, as if:
(a) each reference in subparagraph 35A(3)(f)(ii) or (iii) to a Family Court Judge were a reference to a judge of the Family Court of Western Australia; and
(b) the reference in subparagraph 35A(3)(f)(iv) to a Registrar of the Family Court were a reference to a registrar of the Family Court of Western Australia.
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 IV—Proceedings in connexion with bankruptcy
Division 1—Acts 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 chair 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 the creditors to bring his or her affairs under the provisions of this Act, he or she does not, within 7 days from the date of the meeting, either:
(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;
(o) if the debtor becomes insolvent as a result of one or more transfers of property in accordance with:
(i) a financial agreement (within the meaning of the Family Law Act 1975); or
(ii) a Part VIIIAB financial agreement (within the meaning of the Family Law Act 1975);
to which the debtor is a party.
(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.
(7A) For the purposes of paragraph (1)(o):
(a) transfer of property includes a payment of money; and
(b) a person who does something that results in another person becoming the owner of property that did not previously exist is taken to have transferred the property to the other person.
(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 $5,000; 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 $5,000.
(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 of the Attorney‑General’s Department, or the Crown Solicitor of the State, as the case may be; or
(b) if an agent of the Commonwealth, or of the State, as the case may be, is specified in the notice for the purpose, the agent so specified.
(2) A statement that the debtor may comply with the notice in the manner referred to in subsection (1) may be included in a bankruptcy notice issued on the application of the Commonwealth or a State.
Division 2—Creditors’ petitions
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(1) 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 $5,000 or 2 or more debts that amount in the aggregate to $5,000, 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 $5,000;
(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
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
(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 before the end of the period of 2 days beginning on the day the order was made.
Penalty: 5 penalty units.
Note: See also section 277B (about infringement notices).
(1B) Subsection (1A) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(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 a statement of his or her affairs; and
(b) furnish a copy of the statement to the trustee.
Penalty: 50 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 a statement of the joint affairs of those persons; and
(b) furnish a copy of the statement to the trustee.
Penalty: 50 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 determined by the Minister by legislative instrument, 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).
(6A) Subsection (6) does not prevent the making available of information as required by law.
(7) The Official Receiver may refuse to allow a person access under this section to particular information in a bankrupt’s statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
Division 2A—Declaration of intention to present debtor’s petition
54A Presentation of declaration
(1) 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.
(2) A declaration presented by a debtor under this section must be accompanied by a statement of the debtor’s affairs and a copy of that statement.
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
(1) Subject to section 54D, where a debtor presents a declaration under section 54A, the Official Receiver shall:
(a) if it appears to the Official Receiver that the debtor is entitled to present a declaration under section 54A and that the declaration presented is in accordance with the approved form:
(i) accept the declaration and endorse it accordingly; and
(ii) forthwith sign a copy of the declaration; or
(b) in any other case—reject the declaration.
(2) If the Official Receiver accepts the declaration, the Official Receiver must give written notice of the acceptance of the declaration to each of the creditors disclosed in the debtor’s statement of affairs.
54D Official Receiver to give information to debtor
(1) Before accepting a declaration presented by a debtor under section 54A, the Official Receiver must give the debtor the information prescribed by the regulations.
(2) A contravention of subsection (1) does not affect the validity of the Official Receiver’s acceptance under section 54C of a declaration presented under section 54A.
54E Enforcement suspended during stay period
(1) Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to a creditor to whom the debtor owes a frozen debt, subsection (2) has effect throughout the remainder of that period.
(2) It is not competent for the creditor:
(a) to apply for the issue of enforcement process in respect of the debt; or
(b) to enforce a remedy against the debtor’s person or property in respect of the debt.
(3) Nothing in this section prevents a creditor from commencing a legal proceeding in respect of a debt, or from taking a fresh step in such a proceeding otherwise than in connection with enforcing a judgment.
54F Duties of sheriff
(1) Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to a sheriff, subsections (2) and (3) have effect throughout the remainder of that period.
(2) The sheriff shall refrain from taking action, or further action, to execute, or to sell property under, enforcement process issued in respect of a frozen debt owed by the debtor.
(3) The sheriff shall refrain from paying to a person proceeds of enforcement process issued in respect of a frozen debt owed by the debtor.
(4) A contravention of this section does not affect a person’s title to property that was purchased in good faith under a sale under enforcement process issued in respect of a debt.
(5) Where:
(a) under this section, a sheriff refrains from taking action, or further action, to sell real property under enforcement process issued in respect of a debt;
(b) the debtor becomes a bankrupt; and
(c) the property vests in the trustee of the bankrupt’s estate;
the costs of executing the enforcement process are a first charge on the property.
54G Duty of court registrar
Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to the registrar or other appropriate officer of a court, the registrar or other officer shall, throughout the remainder of that period, refrain from paying to a person proceeds of enforcement process issued in respect of a frozen debt owed by the debtor.
54H Duties of person entitled to deduct money owing to declared debtor
(1) Where, during the stay period in relation to a declaration of intention presented by a debtor, a copy of the declaration signed by the Official Receiver who accepted it is produced to a person who is entitled under a law of the Commonwealth, of a State, or of a Territory of the Commonwealth:
(a) to retain or deduct money from money payable or owing, or to become payable or owing, to the debtor; and
(b) to apply the retained or deducted money toward discharging a frozen debt owed by the debtor to any person;
subsections (2) and (3) apply.
(2) The person shall, throughout the remainder of that period:
(a) refrain from so retaining or deducting money; and
(b) refrain from paying to a person (other than the debtor), or otherwise applying, money that was so retained or deducted before the signed copy was produced to the person.
(3) Nothing in this section affects a person’s liability to pay money to the debtor.
54J Extension of time where this Division prevents the doing of an act
Where, throughout a particular period, this Division prevents the doing of a particular act, that period shall be disregarded in determining, for the purposes of any law, agreement or instrument, whether or not that act has been done within a particular period or before a particular time.
54K Section 33 not to apply to this Division
Nothing in section 33 permits the extension or abridgment of a period or time limited by this Division.
54L Secured creditor’s rights under security not affected
Nothing in this Division affects the right of a secured creditor to realise or otherwise deal with the creditor’s security.
Division 3—Debtors’ petitions
55 Debtor’s petition
(1) Subject to this section, a debtor may present to the Official Receiver a petition against himself or herself.
(2) A petition presented by a debtor under this section:
(a) shall be in accordance with the approved form; and
(b) shall be accompanied by a statement of the debtor’s affairs and a copy of that statement.
(2A) The Official Receiver must reject a debtor’s petition unless, at the time when the petition is presented, the debtor:
(a) was personally present or ordinarily resident in Australia; or
(b) had a dwelling‑house or place of business in Australia; or
(c) was carrying on business in Australia, either personally or by means of an agent or manager; or
(d) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.
(3) The Official Receiver may reject a debtor’s petition if:
(a) the petition does not comply substantially with the approved form; or
(b) the petition is not accompanied by a statement of affairs; or
(c) the Official Receiver thinks that the statement of affairs accompanying the petition is inadequate.
(3AA) The Official Receiver may reject a debtor’s petition (the current petition) if:
(a) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that, if the debtor did not become a bankrupt, the debtor would be likely (either immediately or within a reasonable time) to be able to pay all the debts specified in the statement of affairs; and
(b) at least one of the following applies:
(i) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that the debtor is unwilling to pay one or more debts to a particular creditor or creditors, or is unwilling to pay creditors in general;
(ii) before the current petition was presented, the debtor previously became a bankrupt on a debtor’s petition at least 3 times, or at least once in the period of 5 years before presentation of the current petition.
(3AB) The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA).
(3AC) The debtor may apply to the Administrative Appeals Tribunal for the review of a decision by the Official Receiver to reject a petition under subsection (3AA).
(3A) Before accepting a debtor’s petition the Official Receiver must give the debtor the information prescribed by the regulations.
(3B) The Official Receiver must refer a debtor’s petition to the Court for a direction to accept or reject it if there is a creditor’s petition pending against a group of debtors (whether they are joint debtors or members of a partnership) that includes the debtor against whom the debtor’s petition is presented.
Example 1: When Anna presents a debtor’s petition against herself, there is a creditor’s petition pending against Anna and Tim as joint debtors. The Official Receiver must refer the debtor’s petition to the Court.
Example 2: When Peter presents a debtor’s petition against himself, there are 2 creditor’s petitions pending against him alone. The Official Receiver is not required to refer the debtor’s petition to the Court, because Peter does not form a group by himself.
(3C) If the Court directs the Official Receiver to accept the debtor’s petition, the Court must specify the time of the commencement of the bankruptcy that results from acceptance of the debtor’s petition.
(4) The Official Receiver must accept a debtor’s petition, unless the Official Receiver rejects it under this section or is directed by the Court to reject it.
(4A) Where the Official Receiver accepts a petition presented under this section:
(a) he or she shall endorse the petition accordingly; and
(b) upon the Official Receiver endorsing the petition, the debtor who presented the petition becomes a bankrupt by force of this section and by virtue of presentation of the petition.
(5) If a registered trustee is the trustee of the estate of a debtor who becomes a bankrupt under this section, the Official Receiver must:
(a) notify the trustee of the bankruptcy; and
(b) give the trustee a copy of the statement of affairs that accompanied the debtor’s petition.
(5A) A debtor who is a party (as debtor) to a debt agreement must not present a debtor’s petition unless the Court gives the debtor permission to do so.
(6) A debtor who has executed a personal insolvency agreement is not, except with the leave of the Court, entitled to present a petition against himself or herself unless:
(a) the agreement has been set aside; or
(b) the agreement has been terminated; or
(c) all the obligations that the agreement created have been discharged.
(6A) A debtor in relation to whom a stay under a proclaimed law applies is not, except with the leave of the Court, entitled to present a petition against himself or herself.
(7) Where a petition is presented by a debtor against himself or herself in contravention of subsection (5A), (6) or (6A), the debtor does not become a bankrupt by virtue of its presentation.
(8) A person who becomes a bankrupt by force of this section continues to be a bankrupt until:
(a) he or she is discharged by force of subsection 149(1); or
(b) his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B.
(9) A person who states in writing that he or she is a creditor of a bankrupt who has become a bankrupt by force of this section may without fee, and any other person may on payment of the fee determined by the Minister by legislative instrument, inspect, personally or by an agent, the statement of affairs that accompanied the petition presented by the bankrupt, and may obtain a copy of, or take extracts from, the statement.
(10) A bankrupt who has become a bankrupt by force of this section may, without fee and either personally or by an agent:
(a) inspect the bankrupt’s statement of affairs; and
(b) obtain a copy of, or make extracts from, the bankrupt’s statement of affairs.
(11) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person other than the bankrupt (or an agent of the bankrupt).
(11A) Subsection (11) does not prevent the making available of information as required by law.
(12) The Official Receiver may refuse to allow a person access under this section to particular information in a bankrupt’s statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
56A Persons who may present a debtor’s petition against a partnership
(1) A debtor’s petition against a partnership may be presented by:
(a) all the partners; or
(b) a majority of the partners who are resident in Australia.
(2) A member of a partnership who is a party (as debtor) to a debt agreement must not join in presenting a debtor’s petition against the partnership unless the Court gives the member permission to do so.
(3) A member of a partnership who has executed a personal insolvency agreement must not join in presenting a petition against the partnership unless:
(a) the agreement has been set aside; or
(b) the agreement has been terminated; or
(c) all the obligations that the agreement created have been discharged; or
(d) the Court gives permission for the member to join in presenting a petition against the partnership.
(6) A member of a partnership in relation to whom a stay under a proclaimed law applies must not join in presenting a petition against the partnership unless the Court gives the member permission to do so.
(7) If a member of a partnership contravenes subsection (2), (3), (4), (5) or (6) by joining in the presentation of a petition, the petition does not have any effect.
56B Presentation of a debtor’s petition against a partnership
(1) Any debtor’s petition against a partnership must be presented to the Official Receiver.
(2) A petition must be in accordance with the approved form.
(3) A petition must be accompanied by:
(a) a statement of affairs of each member of the partnership by whom the petition is presented; and
(b) a statement of the partnership affairs; and
(c) a copy of each of those statements.
(4) The Official Receiver may reject a petition if:
(a) the petition does not comply substantially with the approved form; or
(b) the petition is not accompanied by the statements of affairs of each petitioning partner and of the partnership; or
(c) the Official Receiver thinks that any of the statements of affairs accompanying the petition is inadequate.
(5) Before accepting a debtor’s petition against a partnership, the Official Receiver must give the information prescribed by the regulations to each member of the partnership who joined in presenting the petition.
56C Referral to the Court of a debtor’s petition against a partnership
(1) The Official Receiver must refer a debtor’s petition against a partnership to the Court for a direction to accept or reject the petition if either or both of the following conditions are met:
(a) the petition was presented against the partnership by some, but not all, members of the partnership;
(b) there is at least one creditor’s petition pending against at least one of the members of the partnership (not counting a creditor’s petition against all the members of the partnership and no‑one else).
Example 1: Edith, Lindsay and Bertha are the members of a partnership. When Edith and Lindsay present a debtor’s petition against the partnership there is a creditor’s petition pending against Bertha. The Official Receiver must refer the debtor’s petition to the Court.
Example 2: Keith, Leigh and Judith are the members of a partnership. When they all present a debtor’s petition against the partnership, there are 2 creditor’s petitions pending: one against Keith, Leigh and Judith, the other against Judith alone. The Official Receiver must refer the debtor’s petition to the Court.
Example 3: Meredith, Ramsay and Wilson are the members of a partnership. When they all present a debtor’s petition against the partnership, there are 2 creditor’s petitions pending. Both of the creditor’s petitions are against Meredith, Ramsay and Wilson (and no‑one else). There is no requirement for the Official Receiver to refer the debtor’s petition to the Court.
(2) If the Official Receiver refers a petition to the Court because the petition was presented by some, but not all, of the members of the partnership, the Official Receiver must give notice in accordance with the regulations to the members who did not present the petition.
(3) After a petition has been referred to the Court, the Court must direct the Official Receiver:
(a) to accept the petition in the form in which it was referred to the Court; or
(b) to accept the petition after amending it as directed by the Court; or
(c) to reject the petition.
(4) If:
(a) a debtor’s petition is presented against a partnership that includes a person to whom a stay applies under a proclaimed law; and
(b) the person is not one of the petitioning partners;
the Court must not give a direction in relation to the petition until the person administering the proclaimed law has had an opportunity to be heard.
(5) If the Court directs the Official Receiver to accept (either with or without amendments) a petition referred to the Court, the Court must specify the time of the commencement of the bankruptcy of each of the persons who becomes a bankrupt as a result of the acceptance of the petition.
56D Acceptance of a debtor’s petition against a partnership by the Official Receiver
(1) The Official Receiver must accept a debtor’s petition against a partnership unless the Official Receiver rejects it under section 56B or is directed by the Court to reject the petition.
(2) When the Official Receiver accepts the petition, the Official Receiver must note on it the fact that it has been accepted.
56E Effects of acceptance of a debtor’s petition against a partnership
(1) When the Official Receiver notes the fact of acceptance on a petition that has not been amended under a direction of the Court, each member of the partnership becomes a bankrupt by force of this section.
(2) When the Official Receiver notes the fact of acceptance on a petition that has been amended under a direction of the Court, each member of the partnership to whom the petition applies becomes a bankrupt by force of this section.
(3) A person who becomes a bankrupt by force of this section continues to be a bankrupt until:
(a) he or she is discharged by force of subsection 149(1); or
(b) his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B.
(4) If a registered trustee is the trustee of the estate of a person who becomes a bankrupt under this section, the Official Receiver must:
(a) notify the trustee of the bankruptcy; and
(b) give the trustee a copy of each statement of affairs that accompanied the debtor’s petition.
56F Extra duties of non‑petitioning partners who become bankrupts
(1) A member of a partnership who did not join in presenting a debtor’s petition against the partnership but became a bankrupt as a result of the acceptance of the petition must give the Official Receiver:
(a) a statement of the member’s affairs; and
(b) a statement of the affairs of the partnership;
within 14 days after the day that the member was notified of his or her bankruptcy.
Penalty: 50 penalty units.
(1A) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(1B) Subsection (1) does not apply if the member has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in subsection (1B) (see subsection 13.3(3) of the Criminal Code).
(2) A member of a partnership complies with paragraph (1)(b) if the member and at least one other member of the partnership who did not join in presenting the petition against the partnership jointly give the Official Receiver a statement of the affairs of the partnership.
(3) A member of a partnership who must give statements of affairs to the Official Receiver under subsection (1) must give copies of the statements to the trustee in the member’s bankruptcy.
56G Inspection of statements of affairs of partners and partnerships
(1) A person may inspect, obtain a copy of, or take extracts from, any statement of affairs that was given to the Official Receiver in connection with a debtor’s petition against a partnership.
(2) Before inspecting, obtaining a copy of or taking extracts from a statement, the person must pay the fee determined by the Minister by legislative instrument, unless:
(a) the person states in writing that he or she is a creditor of the partnership or of a member of the partnership who became a bankrupt as a result of the petition; or
(aa) the person is a member of the partnership who became a bankrupt as a result of the petition; or
(b) the person is an agent of a person described in paragraph (a) or (aa).
(3) A person who has become a bankrupt by force of section 56E may, without fee and either personally or by an agent:
(a) inspect any statement of affairs that accompanied the petition; and
(b) obtain a copy of, or make extracts from, any statement of affairs that accompanied the petition.
(4) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than a member of the partnership who became a bankrupt as a result of the petition or an agent of such a member).
(5) The Official Receiver may refuse to allow a person access under this section to particular information in a statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
57 Debtor’s petition by joint debtors who are not partners
(1) Where joint debtors are not in partnership with one another, the debtors, or any 2 or more of the debtors, may present to the Official Receiver a petition jointly against themselves.
(2) A petition under this section shall be in accordance with the approved form and shall be accompanied by:
(a) a statement of affairs of each of the petitioning debtors;
(b) a statement of their joint affairs; and
(c) a copy of each of those statements.
(2A) The Official Receiver must reject a debtor’s petition unless, at the time when the petition is presented, each petitioning debtor:
(a) was personally present or ordinarily resident in Australia; or
(b) had a dwelling‑house or place of business in Australia; or
(c) was carrying on business in Australia, either personally or by means of an agent or manager; or
(d) was a member of a firm or partnership carrying on business in Australia by means of a partner or partners or of an agent or manager.
(3) The Official Receiver may reject a debtor’s petition if:
(a) the petition does not comply substantially with the approved form; or
(b) the petition is not accompanied by all the statements of affairs required by subsection (2); or
(c) the Official Receiver thinks that any of the statements of affairs accompanying the petition is inadequate.
(3AA) The Official Receiver may reject a debtor’s petition (the current petition) if the following conditions are satisfied for at least one of the petitioning debtors:
(a) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that, if the debtor did not become a bankrupt, the debtor would be likely (either immediately or within a reasonable time) to be able to pay all the debts specified in the debtor’s statement of affairs;
(b) at least one of the following applies:
(i) it appears from the information in the statement of affairs (and any additional information supplied by the debtor) that the debtor is unwilling to pay one or more debts to a particular creditor or creditors, or is unwilling to pay creditors in general;
(ii) before the current petition was presented, the debtor previously became a bankrupt on a debtor’s petition at least 3 times, or at least once in the period of 5 years before presentation of the current petition.
(3AB) The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA).
(3AC) An application may be made to the Administrative Appeals Tribunal for the review of a decision by the Official Receiver to reject a petition under subsection (3AA).
(3A) Before accepting a debtor’s petition against joint debtors, the Official Receiver must give each petitioning debtor the information prescribed by the regulations.
(3B) The Official Receiver must refer a debtor’s petition to the Court for a direction to accept or reject it if there is at least one creditor’s petition that:
(a) is pending against at least one of the debtors (whether or not the creditor’s petition also relates to other persons); and
(b) does not relate only to all the joint debtors who presented the debtor’s petition.
Example 1: Peta and Abdul are joint debtors. When they present a debtor’s petition against themselves, there is a creditor’s petition pending against Abdul. The Official Receiver must refer the debtor’s petition to the Court, because the creditor’s petition does not relate to both Peta and Abdul.
Example 2: Joan and Craig are joint debtors. When they present a debtor’s petition against themselves, there is a creditor’s petition pending against Joan, Craig and Paul. The Official Receiver must refer the debtor’s petition to the Court.
Example 3: Kim, Robin and Jane are joint debtors. When they present a debtor’s petition against themselves, there is a creditor’s petition pending against Kim, Robin and Jane, and no‑one else. The Official Receiver is not required to refer the debtor’s petition to the Court.
(3C) If the Court directs the Official Receiver to accept the debtor’s petition, the Court must specify the time of the commencement of each bankruptcy that results from acceptance of the debtor’s petition.
(4) The Official Receiver must accept a debtor’s petition, unless the Official Receiver rejects it under subsection (3) or is directed by the Court to reject it.
(5) Where the Official Receiver accepts a petition presented under this section:
(a) he or she shall endorse the petition accordingly; and
(b) upon the Official Receiver endorsing the petition, each of the petitioning debtors becomes a bankrupt by force of this section and by virtue of presentation of the petition.
(6) If a registered trustee is the trustee of the estate of a person who becomes a bankrupt under this section, the Official Receiver must:
(a) notify the trustee of the bankruptcy; and
(b) give the trustee a copy of each statement of affairs that accompanied the debtor’s petition.
(6A) A debtor who is a party (as debtor) to a debt agreement must not present a debtor’s petition unless the Court gives the debtor permission to do so.
(7) A debtor who has executed a personal insolvency agreement is not entitled to join in presenting a petition under this section unless:
(a) the agreement has been set aside; or
(b) the agreement has been terminated; or
(c) all the obligations that the agreement created have been discharged; or
(d) the Court grants leave for the debtor to join in presenting a petition under this section.
(8) A debtor in relation to whom a stay under a proclaimed law applies is not, except with the leave of the Court, entitled to join in presenting a petition under this section.
(9) Where a petition is presented in contravention of subsection (6A), (7) or (8), the presentation of the petition does not have any effect.
(10) A person who becomes a bankrupt by force of this section continues to be a bankrupt until:
(a) he or she is discharged by force of subsection 149(1); or
(b) his or her bankruptcy is annulled by force of subsection 74(1) or 153A(1) or under section 153B.
(11) A person who states in writing that he or she is a creditor of a bankrupt who has become a bankrupt by virtue of the presentation of a debtor’s petition against joint debtors, or a creditor of joint debtors some or all of whom have become bankrupts by force of this section, may without fee, and any other person may on payment of the fee determined by the Minister by legislative instrument, inspect, personally or by an agent, any statement of affairs that accompanied the petition presented by the joint debtors, and may obtain a copy of, or take extracts from, any such statement of affairs.
(12) A bankrupt who has become a bankrupt by force of this section may, without fee and either personally or by an agent:
(a) inspect any statement of affairs that accompanied the petition; and
(b) obtain a copy of, or make extracts from, any statement of affairs that accompanied the petition.
(13) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, then the Official Receiver must ensure that the information is not made available under this section to any person (other than a petitioning debtor or an agent of a petitioning debtor).
(14) The Official Receiver may refuse to allow a person access under this section to particular information in a statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person.
57A Time at which person becomes bankrupt on debtor’s petition
Where, after the commencement of this section, a person becomes a bankrupt by virtue of the presentation of a debtor’s petition, the person shall, for the purposes of this Act, be deemed to become a bankrupt at the first instant of the day on which the petition is accepted by the Official Receiver.
Division 4—Effect of bankruptcy on property and proceedings
58 Vesting of property upon bankruptcy—general rule
(1) Subject to this Act, where a debtor becomes a bankrupt:
(a) the property of the bankrupt, not being after‑acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and
(b) after‑acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
Note 1: This subsection has a limited application if there are orders in force under the proceeds of crime law: see section 58A.
Note 2: Even if property has vested under this section, it may, under the Proceeds of Crime Act 2002:
(a) become subject to a restraining order; and
(b) be taken into account in making a pecuniary penalty order; and
(c) become subject to a charge to secure the payment of an amount under a pecuniary penalty order, if it is subject to a restraining order; and
(d) be dealt with by the Official Trustee, if it is subject to a restraining order and a court has directed the Official Trustee to pay the Commonwealth an amount under a pecuniary penalty order out of property subject to the restraining order.
(2) Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with.
(3) Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:
(a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or
(b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.
(4) After a debtor has become a bankrupt, distress for rent shall not be levied or proceeded with against the property of the bankrupt, whether or not the bankrupt is a tenant of the landlord by whom the distress is sought to be levied.
(5) Nothing in this section affects the right of a secured creditor to realize or otherwise deal with his or her security.
(5A) Nothing in this section shall be taken to prevent a creditor from enforcing any remedy against a bankrupt, or against any property of a bankrupt that is not vested in the trustee of the bankrupt, in respect of any liability of the bankrupt under:
(a) a maintenance agreement; or
(b) a maintenance order;
whether entered into or made, as the case may be, before or after the commencement of this subsection.
(6) In this section, after‑acquired property, in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt.
58A Vesting of property upon bankruptcy—effect of orders in force under the proceeds of crime law
If a restraining order or forfeiture order is in force
(1) If property of a bankrupt is covered by a restraining order, or a forfeiture order, made before the date of the bankruptcy, subsection 58(1) does not apply to property that is covered by the order while that property is so covered.
If a pecuniary penalty order is in force
(2) If a pecuniary penalty order is made against a bankrupt before the date of the bankruptcy, subsection 58(1) does not apply to any of the property of the bankrupt while the order is in force.
Note: For proceeds of crime orders made on or after the date of the bankruptcy, and applications for proceeds of crime orders, see sections 114A to 114C.
Notifying the trustee of grounds for subsection 58(1) to apply to property
(3) If circumstances arise as a result of which this section no longer prevents subsection 58(1) applying to property of the bankrupt, the Director of Public Prosecutions (or the Commissioner of the Australian Federal Police, if the Commissioner is the Commonwealth proceeds of crime authority that is the responsible authority for the order under the Proceeds of Crime Act 2002) must, as soon as practicable, give the trustee written notice of the existence of the circumstances.
59 Second or subsequent bankruptcy
(1) Where a person who is a bankrupt again becomes a bankrupt:
(a) the property of the bankrupt:
(i) that was acquired by, or devolved on, the bankrupt on or after the date of the earlier bankruptcy; and
(ii) that had not been distributed amongst the creditors in the earlier bankruptcy before the date on which the person became a bankrupt on the later occasion;
shall (subject to any disposition of that property made by the trustee in the earlier bankruptcy without knowledge of the presentation of the petition on, or by virtue of the presentation of which, the person became bankrupt on the later occasion and subject also to section 126) vest forthwith in the trustee in the later bankruptcy;
(b) property:
(i) that is acquired by, or devolves on, the bankrupt on or after the date of the later bankruptcy; and
(ii) that is divisible amongst the creditors in the later bankruptcy;
vests in the trustee in the later bankruptcy as soon as it is acquired by, or devolves on, the bankrupt;
(c) the trustee in the earlier bankruptcy:
(i) shall be deemed to be a creditor in the later bankruptcy in respect of any unsatisfied balance of his or her expenses or remuneration in the earlier bankruptcy, the liabilities incurred by him or her in administering the estate in the earlier bankruptcy and the debts proved in the earlier bankruptcy (whether or not those debts are entitled to priority, or are postponed, in the earlier bankruptcy);
(ii) shall rank equally with the ordinary unsecured creditors in the later bankruptcy; and
(iii) may, where he or she has lodged a proof of debt in the later bankruptcy, amend that proof of debt, without the consent of the trustee in the later bankruptcy, for the purpose of adding:
(A) his or her expenses in the earlier bankruptcy that have, or his or her remuneration in the earlier bankruptcy that has, accrued after the proof of debt was lodged;
(B) liabilities incurred by him or her in administering the estate in the earlier bankruptcy after the proof of debt was lodged; or
(C) debts proved in the earlier bankruptcy after the proof of debt was lodged;
or, with the consent of the trustee in the later bankruptcy, for any other purpose;
(d) a charge or charging order that, by virtue of subsection 118(9), is void as against the trustee in the earlier bankruptcy continues to be void as against that trustee; and
(e) a transaction that, by virtue of section 120, 121, 122, 128B or 128C, is void as against the trustee in the earlier bankruptcy continues to be void as against that trustee.
(2) Where the trustee of the estate of a bankrupt receives notice of the presentation of a creditor’s petition against the bankrupt, the trustee shall hold the after‑acquired property of the bankrupt that is then in the possession of the trustee, or the proceeds thereof, until the petition has been dealt with by the Court or has lapsed.
(3) Where the trustee of the estate of a bankrupt receives notice that a debtor’s petition against the bankrupt has been referred to the Court, the trustee shall hold the after‑acquired property of the bankrupt that is then in the possession of the trustee, or the proceeds thereof, until the Court has dealt with the petition.
(4) Where the trustee of the estate of a bankrupt is holding after‑acquired property of the bankrupt, or the proceeds of any such property, in pursuance of subsection (2) or (3) and the bankrupt again becomes a bankrupt, the trustee shall:
(a) in a case where the trustee is also the trustee in the later bankruptcy—hold all such property, and the proceeds of such property, as the trustee in the later bankruptcy; or
(b) in any other case—deliver all such property, and pay the proceeds of such property, to the trustee in the later bankruptcy.
(5) Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered, and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of subsection (1), does not vest in the trustee at law until the requirements of that law have been complied with.
(6) In subsections (2), (3) and (4), after‑acquired property, in relation to a bankrupt, means such of the property that was acquired by, or devolved on, the bankrupt on or after the date of the bankruptcy, being property divisible amongst the creditors of the bankrupt, as has not been distributed amongst the creditors in the bankruptcy.
59A Orders under Part VIII or VIIIAB of the Family Law Act 1975
Sections 58 and 59 have effect subject to an order under Part VIII or VIIIAB of the Family Law Act 1975.
60 Stay of legal proceedings
(1) The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit:
(a) discharge an order made, whether before or after the commencement of this subsection, against the person or property of the debtor under any law relating to the imprisonment of fraudulent debtors and, in a case where the debtor is imprisoned or otherwise held in custody under such a law, discharge the debtor out of custody; or
(b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor:
(i) in respect of the non‑payment of a provable debt or of a pecuniary penalty payable in consequence of the non‑payment of a provable debt; or
(ii) in consequence of his or her refusal or failure to comply with an order of a court, whether made in civil or criminal proceedings, for the payment of a provable debt;
and, in a case where the debtor is imprisoned or otherwise held in custody in consequence of the non‑payment of a provable debt or of a pecuniary penalty referred to in subparagraph (i) or in consequence of his or her refusal or failure to comply with an order referred to in subparagraph (ii), discharge the debtor out of custody.
(2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.
(3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
(4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of:
(a) any personal injury or wrong done to the bankrupt, his or her spouse or de facto partner or a member of his or her family; or
(b) the death of his or her spouse or de facto partner or of a member of his or her family.
Note: See also subsection 5(6).
(4A) Notwithstanding paragraph (1)(b), this section does not empower the Court to stay any proceedings under a proceeds of crime law.
(5) In this section, action means any civil proceeding, whether at law or in equity.
61 Actions by bankrupt partner’s trustee
(1) Where a member of a partnership becomes a bankrupt, the Court may, upon the application of the trustee, authorize the trustee to commence and prosecute any action in the names of the trustee and of the bankrupt’s partner or partners.
(2) Notice of the application for authority to commence the action shall be given to the bankrupt’s partner or partners, who, or any of whom, may show cause against it.
(3) Upon application by such a partner, the Court may, if it thinks fit, direct that that partner shall receive the share of the proceeds of the action to which he or she is entitled as a partner.
(4) If a partner does not claim any benefit from the action, the Court may order that he or she be indemnified against costs in respect of the action.
(5) Unless the Court otherwise orders, a release by a partner of the debt or demand to which the action relates made after notice has been given to him or her under this section is void as against the trustee.
(6) This section applies to and in relation to joint debtors who are not partners as if they were partners.
62 Actions on joint contracts
Where a bankrupt is a contractor in respect of a contract jointly with another person or other persons, that person or those persons may sue or be sued in respect of the contract without the joinder of the bankrupt.
63 Death of bankrupt
Where a bankrupt dies before he or she is discharged from the bankruptcy, the proceedings in bankruptcy shall, unless the Court otherwise directs, be continued, so far as they are capable of being continued, as if he or she were alive.
Division 6—Composition or arrangement with creditors
73 Composition or arrangement
(1) Where a bankrupt desires to make a proposal to his or her creditors for:
(a) a composition in satisfaction of his or her debts; or
(b) a scheme of arrangement of his or her affairs;
he or she may lodge with the trustee a proposal in writing signed by him or her setting out the terms of the proposed composition or scheme of arrangement and particulars of any sureties or securities forming part of the proposal.
(1A) The trustee must, within 2 business days after receiving the proposal, give a copy of the proposal to the Official Receiver.
Penalty: 5 penalty units.
Note: See also section 277B (about infringement notices).
(1C) Subsection (1A) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
73B Declaration of relationships by proposed trustee of composition or scheme of arrangement
(1) This section applies if the proposal provides that a person (the proposed trustee) other than the trustee of the bankrupt’s estate is to become the trustee of the composition or scheme of arrangement.
(2) The proposed trustee must make a written declaration stating whether the bankrupt is a related entity of:
(a) the proposed trustee; or
(b) a related entity of the proposed trustee.
(3) The proposed trustee must:
(a) give a copy of the declaration to the Official Receiver; and
(b) give a copy of the declaration to the trustee of the bankrupt’s estate; and
(c) keep a copy of the declaration.
74 Annulment of bankruptcy
(1) If the proposal is accepted by a special resolution of creditors at a meeting held in accordance with the Insolvency Practice Rules, the bankruptcy is annulled, by force of this subsection, on the day the special resolution was passed.
(5A) The trustee must, before the end of the period of 2 days beginning on that date, give the Official Receiver a written notice setting out the name and the bankruptcy number of the former bankrupt and the date of the annulment.
Penalty: 5 penalty units.
Note: See also section 277B (about infringement notices).
(5B) Subsection (5A) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(6) Where a bankruptcy is annulled under this section, all sales and dispositions of property and payments duly made, and all acts done, by the trustee or any person acting under the authority of the trustee or the Court before the annulment shall be deemed to have been validly made or done but, subject to subsection (7), the property of the bankrupt still vested in the trustee vests in such person as the Court appoints or, in default of such an appointment, reverts to the bankrupt for all his or her estate or interest in it, on such terms and subject to such conditions (if any) as the Court orders.
(7) Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered, any such property vested in the trustee at the time of the annulment of the bankruptcy, notwithstanding that it vests in equity in such person as the Court appoints or in the bankrupt, as the case may be, does not vest in that person or the bankrupt at law until the requirements of that law have been complied with.
74A Variation of composition or scheme of arrangement
(1) This section applies to a composition or scheme of arrangement that has been accepted in accordance with this Division.
Variation by special resolution of creditors
(2) The creditors, with the written consent of the debtor, may vary the composition or scheme by special resolution at a meeting called for the purpose.
Variation proposal by trustee
(3) The trustee may, in writing, propose a variation of the composition or scheme. The trustee cannot propose a variation without the written consent of the debtor.
(4) The trustee must give notice of the proposed variation to all the creditors who are entitled to receive notice of a meeting of creditors.
(5) The notice must:
(a) include a statement of the reasons for the variation and the likely impact it will have on creditors (if it takes effect); and
(b) specify a proposed date of effect for the variation (at least 14 days after the notice is given); and
(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the variation taking effect without there being a meeting of creditors.
(6) If no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date, then the proposed variation takes effect on the date specified in the notice.
(7) A certificate signed by the trustee stating any matter relating to a proposed variation under this section is prima facie evidence of the matter.
75 Effect of composition or scheme of arrangement
(1) Subject to this section, a composition or scheme of arrangement accepted in accordance with this Division is binding on all the creditors of the bankrupt so far as relates to provable debts due to them from the bankrupt.
(2) The acceptance of a composition or scheme of arrangement does not:
(a) except with the consent of the creditor to whom the debt is due, release the bankrupt from a provable debt that would not be released by his or her discharge from bankruptcy; or
(b) release any other person from any liability from which he or she would not be released by the discharge of the bankrupt.
(3) The provisions of a composition or scheme of arrangement that has been accepted in accordance with this Division may be enforced by the Court on application by a person interested, and disobedience of an order of the Court made on the application is a contempt of the Court and is punishable accordingly.
76 Application of Part VIII and Schedule 2 to trustee of a composition or arrangement
(1) Part VIII and Schedule 2 apply, with any modifications prescribed by the regulations, in relation to the trustee of a composition or scheme of arrangement under this Division as if the debtor were a bankrupt and the trustee were the trustee in his or her bankruptcy.
(2) If, after taking into account the modifications prescribed by the regulations, a provision of Part VIII or Schedule 2 is incapable of application in relation to the trustee of a composition or scheme of arrangement, or is inconsistent with this Division, that provision does not so have application.
76B Setting aside and termination of a composition or scheme of arrangement
Sections 222 to 222D, 224 and 224A apply, with such modifications (if any) as are prescribed by the regulations, in relation to a composition or scheme of arrangement under this Division as if:
(a) the composition or scheme were a personal insolvency agreement executed by the debtor; and
(b) the trustee of the composition or scheme were the trustee of the personal insolvency agreement.
Part V—Control over person and property of debtors and bankrupts
Division 1—General
77 Duties of bankrupt as to discovery etc. of property
(1) A bankrupt shall, unless excused by the trustee or prevented by illness or other sufficient cause:
(a) forthwith after becoming a bankrupt, give to the trustee:
(i) all books (including books of an associated entity of the bankrupt) that are in the possession of the bankrupt and relate to any of his or her examinable affairs; and
(ii) any passport or document issued for the purposes of travel held by the bankrupt; and
(b) attend the trustee whenever the trustee reasonably requires; and
(ba) give such information about any of the bankrupt’s conduct and examinable affairs as the trustee requires; and
(bb) as soon as practicable after becoming a bankrupt, advise the trustee of any material change that occurred between the time the bankrupt lodged his or her statement of affairs and the time the bankrupt became a bankrupt; and
(bc) if a material change occurred later, advise the trustee of that change as soon as practicable after the change occurs; and
(c) attend a meeting of creditors whenever the trustee requires; and
(d) at each meeting of creditors at which the bankrupt is present, give such information about any of the bankrupt’s conduct and examinable affairs as the meeting requires; and
(e) execute such instruments and generally do all such acts and things in relation to his or her property and its realization as are required by this Act or by the trustee or as are ordered by the Court upon the application of the trustee; and
(f) disclose to the trustee, as soon as practicable, property that is acquired by him or her, or devolves on him or her, before his or her discharge, being property divisible amongst his or her creditors; and
(g) aid to the utmost of his or her power in the administration of his or her estate.
(2) In this section:
material change means a change in the particulars contained in the bankrupt’s statement of affairs, where the change could reasonably be expected to be relevant to the administration of the bankrupt’s estate.
77AA Access by Official Receiver and others to premises
(1) The Official Receiver, or an officer authorised in writing by the Official Receiver to exercise powers under this section, is entitled at all reasonable times to full and free access to all premises and books for any purpose of this Act, and for that purpose:
(a) may make copies of, or take extracts from, books; and
(b) may remove from premises any books that the Official Receiver or officer reasonably considers may be relevant to the examinable affairs of:
(i) a bankrupt whose affairs are being administered under Part IV; or
(ii) a person who is a party (as debtor) to a debt agreement; or
(iii) a debtor whose affairs are being administered under Part X; or
(iv) a deceased debtor whose affairs are being administered under Part XI or are subject to a debt agreement.
(1A) A registered trustee may accompany and assist the Official Receiver or an officer exercising powers under subsection (1) if:
(a) the Official Receiver has given written authority for the registered trustee to do so; and
(b) the exercise of the powers under subsection (1) relates to a bankrupt, debtor or deceased debtor whose affairs the registered trustee is administering.
(1B) The registered trustee may be accompanied by a person nominated by the registered trustee.
(1C) The Official Receiver or officer may remove books from premises only if the Official Receiver or officer reasonably considers that:
(a) it is not reasonably practicable to make copies of, or take extracts from, the books on the premises; or
(b) it would be an unreasonable intrusion on the affairs of the occupier of the premises to remain on the premises to make copies of, or take extracts from, the books.
(1D) If the Official Receiver or officer reasonably believes that any books are, or may be, relevant to the examinable affairs of a bankrupt, a person who is a party (as debtor) to a debt agreement, a debtor whose affairs are being administered under Part X or a deceased debtor whose affairs are being administered under Part XI, the Official Receiver or officer may keep the books until he or she decides that:
(a) he or she no longer needs the books; or
(b) the books are not relevant to the examinable affairs of any bankrupt, person who is a party (as debtor) to a debt agreement, debtor or deceased debtor.
(1E) While the Official Receiver or officer is keeping books, a person whose books they are, or from whose premises the books were taken, may inspect the books at any reasonable time.
(2) An officer is not entitled to enter or remain in or on any premises under this section if, on being requested by the occupier of the premises for proof of authority, the officer does not produce the officer’s authority under subsection (1).
(3) The occupier of any premises entered or proposed to be entered by the Official Receiver, or by an officer, under subsection (1) must provide the Official Receiver or officer with all reasonable facilities and assistance for the effective exercise of powers under this section.
Penalty: 30 penalty units.
77A Access by trustee to books of associated entity
(1) Where a trustee is conducting under section 19AA an investigation relating to a person (in this section called the bankrupt), subsections (2) and (3) of this section apply.
(2) For the purposes of the investigation, the a trustee may by writing require a person to produce:
(a) to a specified person, being the a trustee or another person; and
(b) at a specified place, and within a specified period or at a specified time on a specified day, being a place, and a period or a time and day, that are reasonable in the circumstances;
specified books, or specified classes of books, that:
(c) are books of an associated entity of the bankrupt;
(d) are in the possession of the person of whom the requirement is made; and
(e) in the trustee’s opinion, are relevant to the investigation.
(3) Where the trustee requires a person (in this subsection called the relevant person) under this section to produce books to a specified person, the trustee or the specified person:
(a) if the books are so produced:
(i) may make copies of, or take extracts from, the books; and
(ii) may require the relevant person, or any other person who was a party to the compilation of the books, to explain to the best of his or her knowledge and belief any matter about the compilation of the books or to which the books relate; or
(b) in any other case—may require the relevant person to state, to the best of his or her knowledge or belief:
(i) where the books may be found; and
(ii) who last had possession, custody or control of the books and where that person may be found.
(4) The production of books under this section does not prejudice a lien that a person has on the books.
77C Power of Official Receiver to obtain information and evidence
(1) The Official Receiver may, by written notice given to a person, require the person to do one or more of the following:
(a) give the Official Receiver information the Official Receiver requires for the purposes of the performance of the functions of the Official Receiver or a trustee under this Act;
(b) attend before the Official Receiver, or an officer authorised in writing by the Official Receiver to exercise powers under this paragraph, and do one or both of the following:
(i) give evidence relating to any matters connected with the performance of the functions of the Official Receiver or a trustee under this Act;
(ii) produce all books in the person’s possession relating to any matters connected with the performance of the functions of the Official Receiver or a trustee under this Act;
(c) produce all books in the person’s possession relating to any matters connected with the performance of the functions of the Official Receiver or a trustee under this Act.
It does not matter whether or not the person is a bankrupt or is employed in or in connection with a Department, or an authority, of the Commonwealth or of a State or Territory.
(2) The Official Receiver or authorised officer may require the information or evidence to be given on oath, and either orally or in writing, and for that purpose may administer an oath.
(3) Notes taken down and signed by a person who attends before the Official Receiver or an authorised officer under paragraph (1)(b), and the transcript of the evidence given by the person at the attendance:
(a) may be used in evidence in any proceeding under this Act whether or not the person is a party to the proceeding; and
(b) may be inspected:
(i) by the person, without fee; and
(ii) if the notes and evidence relate to matters concerning the bankruptcy of the person or of another person—by the trustee and a person who states in writing that he or she is a creditor, without fee; and
(iii) by any other person on payment of the fee determined by the Minister by legislative instrument.
77CA Power of Official Receiver to obtain statement of affairs
The Official Receiver may, by written notice given to a bankrupt, require the bankrupt to give the Official Receiver a statement of the bankrupt’s affairs within 14 days after receiving the notice.
Note 1: Section 6A sets out requirements for statements of affairs.
Note 2: A failure to comply with the notice is an offence: see section 267B.
77D Allowances and expenses in respect of attendance
(1) Subject to this section, a person who attends before the Official Receiver, or before an authorised officer, under subsection 77C(1) is entitled:
(a) to be paid by the Official Receiver an allowance of $20 in respect of each day or part of a day on which the person so attends; and
(b) to be reimbursed by the Official Receiver any reasonable expenses incurred by the person for transport, meals and accommodation in connection with the person’s attendance.
(2) A person who is or has been a bankrupt is not entitled to be paid an allowance, or reimbursed any expenses, in respect of the attendance of that person to give evidence or produce books relating to his or her bankruptcy.
(3) A person is not entitled to be reimbursed any expenses unless the person produces to the Official Receiver sufficient documentary evidence to establish that the person incurred those expenses.
(4) This section has effect subject to section 304A.
77E Advance on account of allowances and expenses
(1) If a person who is required by a notice under subsection 77C(1) to attend before the Official Receiver or an authorised officer is entitled under subsection 77D(1) to be paid an allowance and to be reimbursed expenses in respect of the attendance, the Official Receiver must, before the person begins to travel for the purpose of so attending, offer to the person, on account of the allowance and reimbursement of expenses, an advance determined under this section.
(2) If the Official Receiver is satisfied that it will be necessary for the person to travel by aircraft from the person’s principal place of residence to the place at which the person is required to attend, the advance is to be an amount equal to the sum of $20 and the ordinary one‑way economy class airfare from the airport nearest to that principal place of residence to the airport nearest to the place at which the person is required to attend.
(3) If the person will be travelling by private motor vehicle, the advance is to be the sum of $20 and whichever is the lesser of the following amounts:
(a) an amount prescribed by the regulations;
(b) if there is an airport open to civilian passenger traffic that is within a radius of 100 kilometres from the person’s principal place of residence—the ordinary one‑way economy class airfare from that airport to the airport nearest to the place at which the person is required to attend.
(4) If the person will be travelling otherwise than as mentioned in subsections (2) and (3), the advance is to be:
(a) if the distance between the person’s principal place of residence and the place at which the person is required to attend exceeds 50 kilometres—$10 plus such additional amount (if any) as is prescribed by the regulations; or
(b) in any other case—$10.
(5) The regulations may prescribe different amounts in respect of different distances and different means of travel.
(6) This section has effect subject to section 304A.
77F Allowances and expenses to be paid out of bankrupt’s estate
If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the bankruptcy of a particular person, any amount payable to the first‑mentioned person under section 77D or 77E is to be paid out of the estate of the bankrupt as an expense of the administration of the bankruptcy.
78 Arrest of debtor or bankrupt
(1) Where it is made to appear to the Court:
(a) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has absconded, or is about to abscond, with a view to avoiding payment of his or her debts or to preventing or delaying proceedings against him or her under this Act;
(b) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has concealed or removed, or is about to conceal or remove, any of his or her property with a view to preventing or delaying possession of it being taken under this Act in the event of his or her becoming a bankrupt;
(c) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has destroyed, concealed or removed, or is about to destroy, conceal or remove, books (including books of an associated entity of the debtor) relating to any of the debtor’s examinable affairs;
(d) that a bankrupt has concealed, or, without the permission of the trustee, has removed, any of the property of the bankrupt; or
(f) that a bankrupt has, without good cause shown, neglected or failed to comply with an order of the Court or with any other obligation under this Act;
the Court may issue a warrant for the arrest of the debtor or bankrupt, as the case may be, and his or her committal to such gaol as the Court appoints until the Court otherwise orders and may, by the same warrant, order that any property and books in the possession of the debtor or bankrupt be seized and delivered into the custody of such person as the Court appoints.
(2) Any property and books delivered into the custody of a person in pursuance of an order under subsection (1) shall be retained by him or her until the Court makes an order as to their disposal.
(3) Paragraphs (1)(a), (b) and (c) apply in relation to a debtor whether or not he or she has become a bankrupt and whether, in the case of a debtor against whom a petition has been presented, the petition was a creditor’s petition or a debtor’s petition.
80 Notification of change in name, address or day‑time telephone number
(1) If during a bankruptcy a change occurs in the bankrupt’s name or in the address of the bankrupt’s principal place of residence, the bankrupt must immediately tell the trustee in writing of the change.
Penalty: Imprisonment for 6 months.
(1A) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(2) For the purposes of subsection (1), a change in the name of a bankrupt shall be deemed to occur if the bankrupt in fact assumes the use of a different name or an additional name.
81 Discovery of bankrupt’s property etc.
(1) Where a person (in this section called the relevant person) becomes a bankrupt, the Court or a Registrar may at any time (whether before or after the end of the bankruptcy), on the application of:
(a) a person (in this section called a creditor) who has or had a debt provable in the bankruptcy;
(b) the trustee of the relevant person’s estate; or
(c) the Official Receiver;
summon the relevant person, or an examinable person in relation to the relevant person, for examination in relation to the bankruptcy.
(1A) A summons to a person by the Court or the Registrar under subsection (1) shall require the person to attend:
(a) at a specified place and at a specified time on a specified day, being a place, time and day that are reasonable in the circumstances; and
(b) before the Court or the Registrar or, if the Court or the Registrar thinks fit, a magistrate;
to be examined on oath under this section about the relevant person and the relevant person’s examinable affairs.
(1B) A summons to a person under subsection (1) may require the person to produce at the examination books (including books of an associated entity of the relevant person) that:
(a) are in the possession of the first‑mentioned person; and
(b) relate to the relevant person or to any of the relevant person’s examinable affairs.
(1C) Before summoning a person on an application under subsection (1) by a creditor, the Court or the Registrar, as the case requires, may impose on the applicant such terms as to costs as it, or he or she, thinks fit.
(2) An examination under this section shall be held in public.
(3) The Court, the Registrar or a magistrate may at any time adjourn the examination of a person under this section either to a fixed date or generally, or conclude the examination.
(4) The Registrar or a magistrate may at any time adjourn the examination of a person under this section for further hearing before the Court.
(5) Where the examination is adjourned by the Registrar or a magistrate for further hearing before the Court, the Registrar or the magistrate, as the case may be, may submit to the Court such report with respect to the examination as he or she thinks fit.
(6) Where the examination is adjourned for further hearing before the Court, the Court may:
(a) continue the examination;
(b) at any time direct that the examination be continued before the Registrar or a magistrate; or
(c) make such other order as it thinks proper in the circumstances.
(7) A person summoned to attend before the Court, the Registrar or a magistrate for examination under this section is entitled to be represented, on his or her examination, by counsel or a solicitor, who may re‑examine him or her after his or her examination.
(8) Where a person is summoned for examination under this section, a creditor, the trustee or the Official Receiver may take part in the examination and, for that purpose, may be represented by counsel or a solicitor or by an agent authorized in writing for the purpose.
(9) Without limiting the generality of subsection (8), where the Official Trustee is the trustee, the Official Trustee may, for the purpose of taking part in the examination, be represented by the Official Receiver.
(10) The Court, the Registrar or the magistrate may put, or allow to be put, to a person being examined under this section such questions about the relevant person or any of the relevant person’s examinable affairs as the Court, the Registrar or the magistrate, as the case may be, thinks appropriate.
(10A) Notwithstanding subsection (10), where a person is being examined under this section after the end of the bankruptcy, a question about a matter or thing arising or occurring after the end of the bankruptcy shall not be put, or allowed to be put, at the examination unless the question is about a matter or thing connected with the administration of the relevant person’s estate.
(11) A person being examined under this section shall answer all questions that the Court, the Registrar or the magistrate puts or allows to be put to him or her.
(11AA) Subject to any contrary direction by the Court, the Registrar or the magistrate, the relevant person is not excused from answering a question merely because to do so might tend to incriminate the relevant person.
(11A) The Court, the Registrar or the magistrate may direct a person who is being examined under this section to produce at the examination specified books, or specified classes of books, that are in the possession of the person and are relevant to matters about which the person is being, or is to be, examined.
(11B) Without limiting the generality of subsection (11A), a direction under that subsection may relate to books of an associated entity of the relevant person.
(12) Where a person admits on examination under this section that he or she is indebted to the relevant person, then, the Court, the Registrar or the magistrate, as the case may be, may, on the application of the trustee or a creditor, order the person to pay to the trustee, at or by such time and in such manner as the Court, the Registrar or the magistrate, as the case may be, thinks fit, the whole or a part of the amount in which the person admits he or she is indebted to the relevant person.
(13) Where a person admits on examination under this section that there is in the possession of the person property of the relevant person that is divisible among creditors, the Court, the Registrar or the magistrate, as the case requires, may, on the application of the trustee or a creditor, order the first‑mentioned person to deliver the property to the trustee within a specified period, in a specified manner and on specified terms.
(14) The Court, the Registrar or the magistrate, as the case may be, may direct that the costs of a person, other than the relevant person, examined under this section shall be paid out of the estate of the relevant person.
(15) The Court, the Registrar or the magistrate, as the case may be, may cause such notes of the examination of a person under this section to be taken down in writing as the Court, the Registrar or the magistrate, as the case may be, thinks proper, and the person examined shall sign the notes.
(17) Notes taken down and signed by a person in pursuance of subsection (15), and the transcript of the evidence given at the examination of a person under this section:
(a) may be used in evidence in any proceedings under this Act whether or not the person is a party to the proceeding; and
(b) shall be open to inspection by the person, the relevant person, the trustee or a person who states in writing that he or she is a creditor without fee and by any other person on payment of the fee prescribed by the regulations.
Division 2—Offshore information notices
81A Issue of notices
(1) If the Official Receiver has reason to believe that:
(a) information relevant to the examinable affairs of a bankrupt is:
(i) known (whether exclusively or otherwise) by a person outside Australia; or
(ii) recorded (whether exclusively or otherwise) in a book outside Australia; or
(b) books relevant to the examinable affairs of a bankrupt are outside Australia (whether or not copies are in Australia or, if the books are copies of other books, whether or not those other books are in Australia);
the Official Receiver, by written notice (in this Division called the offshore information notice) given to any person, may request the person:
(c) to give to the Official Receiver, within the period and in the manner set out in that notice, any such information; or
(d) to produce to the Official Receiver, within the period and in the manner set out in that notice, any such books; or
(e) to make copies of any such books and to produce to the Official Receiver, within the period and in the manner set out in that notice, those copies.
(2) The period set out in the offshore information notice must end 90 days after the date on which the notice is given.
81B Extension of period of notice
(1) Upon written application made by the person to whom the offshore information notice was given within the period set out in that notice, the Official Receiver, by written notice given to that person, may extend the period set out in the offshore information notice.
(2) If:
(a) an application under subsection (1) is made before the end of the period set out in the offshore information notice; and
(b) at the end of the period, the Official Receiver has not notified the person of the decision of the Official Receiver on the application;
the following provisions have effect:
(c) the Official Receiver is taken to have extended the period under subsection (1) to the end of the day on which the decision of the Official Receiver is notified to the person to whom the offshore information notice was given;
(d) if the Official Receiver decides to extend the period—the extended period must end after the day referred to in paragraph (c).
(3) A reference in this Division (other than subsection (1) of this section) to the period set out in the offshore information notice is a reference to the period as extended under that subsection.
81C Variation of notices
(1) If:
(a) an offshore information notice (in this subsection called the first notice) was given to a person; and
(b) during the period set out in the first notice (including a period set out by virtue of one or more previous applications of this subsection), another offshore information notice (in this subsection called the subsequent notice) is given to the person; and
(c) the subsequent notice is expressed to be by way of variation of the first notice;
the following provisions have effect:
(d) the request, or each of the requests, set out in the subsequent notice is taken, for the purposes of section 81G, to have been set out in the first notice;
(e) if the period set out in the first notice would, apart from this subsection, end before the end of the period set out in the subsequent notice—the period set out in the first notice is taken to have been extended under subsection 81B(1) to the end of the period set out in the subsequent notice.
(2) The Official Receiver, by written notice given to the person to whom the offshore information notice was given, may vary the offshore information notice by:
(a) reducing its scope; or
(b) correcting a clerical error or obvious mistake;
and, if the Official Receiver does so, a reference in this Division to the offshore information notice is taken to be a reference to that notice as so varied.
81D Withdrawal of notices
(1) The Official Receiver may withdraw an offshore information notice.
(2) If the Official Receiver withdraws an offshore information notice, the withdrawal does not prevent the Official Receiver from giving another offshore information notice in substitution, in whole or in part, for the withdrawn notice.
81E Notices may be included in same document
An offshore information notice may be contained in the same document as a notice under section 77C.
81F Relationship between this Division and section 77C
Nothing in this Division affects the operation of section 77C and nothing in section 77C affects the operation of this Division.
Division 3—Failure to comply with certain notices
81G Effect of non‑compliance with notice
(1) In this section:
relevant proceeding means a proceeding:
(a) for the recovery of an amount payable by a bankrupt under section 139ZG; or
(b) for the recovery of an amount payable by a person under section 139ZL; or
(c) involving the question whether a transaction is void against the trustee under Division 3 of Part VI.
(2) Subject to subsection (3), where a person refuses or fails to comply with a request or requirement set out in a notice given to the person under Division 1 or 2 to give any information or produce any books:
(a) if the request or requirement applies to information—the information is not admissible in a relevant proceeding; or
(b) if the request or requirement applies to books—neither the books, nor any secondary evidence of the books, is admissible in a relevant proceeding.
(3) Subsection (2) does not apply to information or a book if the person proves that:
(a) the information or book was not in the possession of the person when the notice was given; and
(b) there were no reasonable steps that the person could have taken to obtain the information or book.
(4) A notice given to a person under Division 1 or 2 must set out the effect of subsections (2) and (3).
(5) A failure to comply with subsection (4) does not affect the validity of the notice.
Part VI—Administration of property
Division 1—Proof of debts
82 Debts provable in bankruptcy
(1) Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy.
(1A) Without limiting subsection (1), debts referred to in that subsection include a debt consisting of all or part of a sum that became payable by the bankrupt under a maintenance agreement or maintenance order before the date of the bankruptcy.
(2) Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy.
(3) Penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy.
(3AA) An amount payable under an order made under section 1317G of the Corporations Act 2001 is not provable in bankruptcy.
(3AB) A debt incurred under any of the following is not provable in bankruptcy:
(a) Part 4‑1 of the Higher Education Support Act 2003 (HELP debts);
(aa) Part 2AA.3 of the Social Security Act 1991 (student start‑up loan debts);
(ab) Division 3 or 4 of Part 2 of the Student Assistance Act 1973 (ABSTUDY student start‑up loan debts);
(b) Part 3.1 of the Trade Support Loans Act 2014 (trade support loan debts).
(3A) An amount payable under an order made under a proceeds of crime law is not provable in bankruptcy.
(3B) A debt is not provable in a bankruptcy in so far as the debt consists of interest accruing, in respect of a period commencing on or after the date of the bankruptcy, on a debt that is provable in the bankruptcy.
(4) The trustee shall make an estimate of the value of a debt or liability provable in the bankruptcy which, by reason of its being subject to a contingency, or for any other reason, does not bear a certain value.
(5) A person aggrieved by an estimate so made may appeal to the Court not later than 28 days after the day on which the person is notified of the estimate.
(6) If the Court finds that the value of the debt or liability cannot be fairly estimated, the debt or liability shall be deemed not to be provable in the bankruptcy.
(7) If the Court finds that the value of the debt or liability can be fairly estimated, the Court shall assess the value in such manner as it thinks proper.
(8) In this section, liability includes:
(a) compensation for work or labour done;
(b) an obligation or possible obligation to pay money or money’s worth on the breach of an express or implied covenant, contract, agreement or undertaking, whether or not the breach occurs, is likely to occur or is capable of occurring, before the discharge of the bankrupt; and
(c) an express or implied engagement, agreement or undertaking, to pay, or capable of resulting in the payment of, money or money’s worth, whether the payment is:
(i) in respect of amount—fixed or unliquidated;
(ii) in respect of time—present or future, or certain or dependent on a contingency; or
(iii) in respect of the manner of valuation—capable of being ascertained by fixed rules or only as matter of opinion.
83 Debt not to be considered proved until admitted
For the purposes of this Act, a creditor shall be taken not to have proved a debt until a proof of debt lodged by him or her in respect of that debt has been admitted.
84 Manner of proving debts
(1) Subject to this Division, a creditor who desires to prove a debt in a bankruptcy shall lodge, or cause to be lodged, with the trustee a proof of debt in accordance with this section.
(2) A proof of debt:
(a) shall set out particulars of the debt;
(b) shall be in accordance with the approved form;
(c) shall specify the vouchers, if any, by which the debt can be substantiated; and
(d) shall state whether or not the creditor is a secured creditor.
(3) Where the trustee is of the opinion that it is desirable that all the matters, or some of the matters, contained in a proof of debt lodged with him or her by a creditor should be verified by statutory declaration, the trustee may serve on the creditor a written notice informing the creditor that he or she is of that opinion and that, unless the creditor lodges with the trustee a statutory declaration verifying the matters contained in the proof of the debt or such of those matters as the trustee specifies in the notice, the trustee will administer the estate as if the proof of debt had not been lodged.
(4) A statutory declaration verifying matters in a proof of debt lodged by a creditor may be made by:
(a) the creditor; or
(b) a person whose own knowledge includes the facts set out in the statutory declaration and the proof of debt, and who is authorised by the creditor to make the declaration.
(5) Where the trustee serves a notice on a creditor under subsection (3) in respect of a proof of debt, the proof of debt shall, for the purposes of this Act (other than section 263), be deemed not to have been lodged with the trustee unless and until the creditor has lodged with the trustee a statutory declaration verifying the matters in the proof of debt or such of those matters as are specified in the notice, as the case requires.
(6) A proof of debt under this section, or a statutory declaration referred to in subsection (3), sent to the trustee by post as certified mail (postage being prepaid) shall be deemed to have been lodged with the trustee and shall be deemed to have been so lodged at the time at which it would have been delivered in the ordinary course of post unless it is shown that the trustee did not receive it at that time.
85 Proof by employees
(1) Where it appears from the bankrupt’s statement of affairs that he or she is indebted to numerous persons employed by him or her for wages or salary, the debts may be proved by one of those persons on behalf of all of those persons.
(2) The proof of debt in respect of the several debts shall be in accordance with the approved form.
(2A) Where the trustee is of the opinion that it is desirable that all the matters, or some of the matters, contained in a proof of debt lodged with him or her by a person in pursuance of this section should be verified by statutory declaration, the trustee may serve on the person a written notice informing the person that he or she is of that opinion and that, unless the person lodges with the trustee a statutory declaration verifying the matters contained in the proof of debt or such of those matters as the trustee specifies in the notice, the trustee will administer the estate as if the proof of the debt had not been lodged.
(2B) A statutory declaration verifying matters in a proof of debt lodged by a person (the creditor) under this section may be made by:
(a) the creditor; or
(b) another person whose own knowledge includes the facts set out in the statutory declaration and the proof of debt, and who is authorised by the creditor to make the declaration.
(2C) Where the trustee serves a notice on a person under subsection (2A) in respect of a proof of debt, the proof of debt shall, for the purposes of this Act (other than section 263), be deemed not to have been lodged with the trustee unless and until the person has lodged with the trustee a statutory declaration verifying the matters in the proof of debt or such of those matters as are specified in the notice, as the case requires.
(2D) A proof of debt under this section, or a statutory declaration referred to in subsection (2A), sent to the trustee by post as certified mail (postage being prepaid) shall be deemed to have been lodged with the trustee and shall be deemed to have been so lodged at the time at which it would have been delivered in the ordinary course of post unless it is shown that the trustee did not receive it at that time.
(3) A proof of debt lodged in pursuance of this section has the same effect as if separate proofs of debt had been lodged by each of the creditors to whom it relates.
86 Mutual credit and set‑off
(1) Subject to this section, where there have been mutual credits, mutual debts or other mutual dealings between a person who has become a bankrupt and a person claiming to prove a debt in the bankruptcy:
(a) an account shall be taken of what is due from the one party to the other in respect of those mutual dealings;
(b) the sum due from the one party shall be set off against any sum due from the other party; and
(c) only the balance of the account may be claimed in the bankruptcy, or is payable to the trustee in the bankruptcy, as the case may be.
(2) A person is not entitled under this section to claim the benefit of a set‑off if, at the time of giving credit to the person who has become a bankrupt or at the time of receiving credit from that person, he or she had notice of an available act of bankruptcy committed by that person.
87 Deduction of discounts
In proving a debt, a creditor shall make an allowance for all discounts for which an allowance would have been made if the debtor had not become a bankrupt.
88 Apportionment to principal and interest of payments made before bankruptcy
A payment made by a debtor to a creditor before the debtor became a bankrupt and representing in part principal and in part interest shall, notwithstanding any agreement to the contrary, be deemed, for the purposes of this Act but not otherwise, to have been apportioned in satisfaction of principal and interest in the proportion that the principal bears to the amount payable as interest at the agreed rate.
89 Apportionment where security realized before or after bankruptcy
(1) Where a debt that consisted partly of principal and partly of interest was secured and the security has been realized before the debtor became a bankrupt, the proceeds of the realization shall, for the purposes of this Act but not otherwise, notwithstanding any agreement to the contrary, be deemed to have been apportioned in satisfaction of principal and interest in the proportion that the principal bore, at the time of the realization, to the amount then payable as interest at the agreed rate.
(2) Where a debt that consists partly of principal and partly of interest is secured and the security is realized after the debtor became a bankrupt or the value of the security is estimated in the creditor’s proof of debt, the amount realized or estimated shall, for the purposes of this Act but not otherwise and notwithstanding any agreement to the contrary, be deemed to have been apportioned in satisfaction of principal and interest in the proportion that the principal bears to the amount payable as interest at the agreed rate.
90 Proof of debt by secured creditor
(1) A secured creditor is entitled to prove the whole or a part of his or her secured debt in the debtor’s bankruptcy in accordance with the succeeding provisions of this Division, and not otherwise.
(2) A secured creditor who surrenders his or her security to the trustee for the benefit of creditors generally may prove for the whole of his or her debt.
(3) A secured creditor who realizes his or her security may prove for any balance due to him or her after deducting the net amount realized, unless the trustee is not satisfied that the realization has been effected in good faith and in a proper manner.
(4) A secured creditor who has not realized or surrendered his or her security may:
(a) estimate its value; and
(b) prove for the balance due to him or her after deducting the value so estimated.
(5) A secured creditor to whom subsection (4) applies shall state particulars of his or her security, and the value at which he or she estimates it, in his or her proof of debt.
91 Redemption of security by trustee etc.
(1) Where a secured creditor has lodged a proof of debt in respect of the balance due after deducting the estimated value of his or her security, the trustee may at any time redeem the security on payment to the creditor of the value at which it has been estimated by the creditor.
(2) If the trustee is dissatisfied with the value at which a security has been estimated by a creditor, he or she may require the property comprised in the security to be offered for sale at such times and on such terms and conditions as are agreed on by the creditor and the trustee.
(3) If any such property is offered for sale by public auction, the creditor, or the trustee on behalf of the estate is entitled to bid for, and purchase, the property.
(4) The creditor may at any time, by notice in writing, require the trustee to elect whether he or she will, or will not, exercise his or her power of redeeming the security or of requiring it to be realized and if the trustee does not, within 3 months after receiving the notice, notify the creditor, in writing that he or she elects to exercise the power:
(a) he or she is not entitled to exercise it;
(b) subject to subsection (5), any equity of redemption or other interest in the property comprised in the security that is vested in the trustee vests in the creditor; and
(c) the amount of the creditor’s debt shall, for the purposes of this Division, be deemed to be reduced by the amount at which the creditor has estimated the value of the security.
(5) The vesting of an equity of redemption or other interest in property by virtue of paragraph (4)(b) is subject to compliance with any law of the Commonwealth or of a State or Territory of the Commonwealth requiring the transmission of such interests in property to be registered.
92 Amendment of valuation
(1) Where a secured creditor has lodged a proof of debt in respect of the balance due after deducting the estimated value of his or her security, he or she may, at any time, apply to the trustee or the Court for permission to amend the proof of debt by altering the estimated value.
(2) If the trustee or the Court is satisfied:
(a) that the estimate of the value of the security was made in good faith on a mistaken basis; or
(b) that the value of the security has changed since the estimate was made;
the trustee or the Court may permit the creditor to amend his or her proof of debt accordingly.
(3) Where the Court permits a creditor to amend his or her proof of debt, it may do so on such terms as it thinks just and equitable.
93 Repayment of excess
(1) Where a creditor who has amended a proof of debt under section 92 has received, by way of dividend, any amount in excess of the amount to which he or she would have been entitled under the amended proof of debt, he or she shall forthwith repay the amount of the excess to the trustee.
(2) Where a creditor who has so amended a proof of debt has received, by way of dividend, less than the amount to which he or she would have been entitled under the amended proof of debt, he or she is entitled to be paid, out of moneys for the time being available for distribution as dividend, the amount of the deficiency before those moneys are applied in the payment of future dividends, but is not entitled to affect the distribution of a dividend declared before the amendment of the proof of debt.
94 Subsequent realization of security
Where a secured creditor who has lodged a proof of debt in respect of the balance due after deducting the estimated value of his or her security subsequently realizes his or her security, or it is realized under section 91, the net amount realized shall be substituted for the estimated value of the security and section 93 applies as if the proof of debt had been amended accordingly by the creditor under section 92.
95 Proof in respect of distinct contracts
Where a person was, at the time when he or she became a bankrupt, liable in respect of distinct contracts as a member of 2 or more distinct firms, or as a sole contractor and also as a member of a firm, the fact that the firms are in whole or in part composed of the same individuals, or that the sole contractor is also a member of the firm, does not prevent proof in respect of the contracts against the estates respectively liable on the contracts.
96 Proof in respect of proportionate part of periodical payment
Where a person who is liable to make any periodical payments (including rent) becomes a bankrupt on a day other than a day on which such a payment becomes due, the person entitled to the payments may prove in the bankruptcy for a proportionate part of a payment in respect of the period from the date when the last payment became due to the date of the bankruptcy, as if the payment accrued due from day to day.
97 Production of bills of exchange and promissory notes
Where a creditor seeks to prove a debt in respect of a bill of exchange, promissory note or other negotiable instrument or security on which the bankrupt is liable, the proof of debt shall not, subject to any order of the Court to the contrary, be admitted, unless the bill, note, instrument or security is produced to the trustee.
98 Amendment of proof of debt
(1) A creditor may, with the consent of the trustee, amend a proof of debt lodged by him or her.
(2) This section does not authorize the amendment of the proof of debt of a secured creditor by altering the estimated value of his or her security.
100 Costs of proving debts etc.
(1) A creditor shall, unless the Court in the particular case otherwise orders, bear his or her own costs of proving a debt.
(2) The costs in relation to the amendment of a proof of debt under section 92 or 98 shall be borne by the creditor.
101 Inspection of proofs by creditors etc.
(1) A creditor is entitled to examine at all reasonable times the proofs of debt of other creditors.
(2) The trustee shall, upon request in writing by a creditor who has a provable debt, supply the creditor with a statement in writing containing the names of the creditors who have lodged proofs of debt, the amount claimed by each such creditor and the amount admitted by the trustee in respect of each such creditor.
102 Admission or rejection of proofs
(1) The trustee shall examine each proof of debt and the grounds of the debt sought to be proved and, subject to the power of the Court to extend the time, shall, not later than 14 days after the expiration of the period specified in the notice of intention to declare a dividend as the period within which creditors may lodge their proofs of debt, either:
(a) admit the proof of debt in whole;
(b) admit it in part and reject it in part;
(c) reject it in whole; or
(d) require further evidence in support of it.
(2) Where the trustee rejects a proof of debt in whole or in part, he or she shall inform the creditor by whom it was lodged, in writing, of the grounds of the rejection.
(3) Where the trustee considers that a proof of debt has been wrongly admitted, he or she may:
(a) revoke the decision to admit the proof of debt and reject it in whole; or
(b) amend the decision to admit the proof of debt by increasing or reducing the amount of the admitted debt.
(4) Where the trustee considers that a proof of debt has been wrongly rejected in whole, he or she may:
(a) revoke the decision to reject the proof of debt; and
(b) admit the proof of debt in whole or admit the proof of debt in part and reject it in part.
(5) Where the trustee revokes a decision to admit a proof of debt and rejects it in whole or amends such a decision by reducing the amount of the admitted debt:
(a) he or she shall inform the creditor by whom it was lodged, in writing, of his or her grounds for the revocation or amendment; and
(b) the creditor shall forthwith repay to the trustee any amount received by way of dividend in respect of the proof of debt or any amount received by way of dividend in excess of the amount that the creditor would have been entitled to receive if his or her debt had been originally admitted for the reduced amount, as the case requires.
(6) Where the trustee revokes a decision to reject a proof of debt in whole, or amends a decision to admit a proof of debt in part by increasing the amount of the admitted debt, the creditor by whom it was lodged is entitled to be paid, out of available money for the time being in the hands of the trustee, the dividends or additional amounts of dividend, as the case may be, that the creditor would have been entitled to receive if the debt had been originally admitted in whole or for the increased amount, as the case may be, before the available money is applied in the payment of a further dividend, but the creditor is not entitled to disturb the distribution of any dividends declared before the trustee revoked or so amended the decision.
103 Debts to be rounded down to nearest dollar
If the amount of a debt includes cents, the cents must be disregarded in admitting proof of the debt.
104 Appeal against decision of trustee in respect of proof
(1) A creditor, or the bankrupt, may apply to the Court for review of a decision of the trustee under subsection 102(1), (3) or (4) in respect of a proof of debt.
(2) The Court may, upon the application, confirm, reverse or vary the decision of the trustee.
(3) Subject to the power of the Court to extend the time, an application under this section to review a decision shall not be heard by the Court unless it was made within 21 days from the date on which the decision was made.
105 Costs of appeal
(1) The Official Trustee is not personally liable for costs in relation to an application to review a decision made by the Official Trustee under subsection 102(1), (3) or (4) in respect of a proof of debt.
(2) A registered trustee is not personally liable for such costs unless the Court is of opinion that there are special circumstances that justify an order that the trustee be personally liable.
106 Trustee may administer oaths etc.
(1) A trustee may, for the purpose of carrying out his or her duties under this Division, administer oaths and take affirmations and affidavits, but is not entitled to charge a fee in respect of such an oath, affirmation or affidavit unless he or she is authorized to do so as a Commissioner for Affidavits.
(2) This section does not apply in relation to the Official Trustee.
107 Creditor not to receive more than the amount of his or her debt and interest
Subject to the operation of the provisions of section 91, a creditor is not entitled to receive, in respect of a provable debt, more than the amount of the debt and any interest payable to him or her under this Act.
Division 2—Order of payment of debts
Subdivision A—General
108 Debts proved to rank equally except as otherwise provided
Except as otherwise provided by this Act, all debts proved in a bankruptcy rank equally and, if the proceeds of the property of the bankrupt are insufficient to meet them in full, they shall be paid proportionately.
Note: The rules under this Subdivision for payments of debts can be affected by proceeds of crime orders and applications for proceeds of crime orders: see Subdivision B.
109 Priority payments
(1) Subject to this Act, the trustee must, before applying the proceeds of the property of the bankrupt in making any other payments, apply those proceeds in the following order:
(a) first, in the order prescribed by the regulations, in payment of the taxed costs of the petitioning creditor and the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee and the costs of any audit carried out under section 70‑15 or 70‑20 of Schedule 2;
(b) second, if the bankrupt had signed an authority under section 188 before the date of the bankruptcy, in payment of:
(i) the remuneration of the controlling trustee (as defined in section 187); and
(ii) the costs, charges and expenses properly and reasonably incurred by the controlling trustee while the authority was in force (including any debts incurred by the controlling trustee that are provable in the bankruptcy);
(c) third, in the case of a bankruptcy that occurs within 2 months after a personal insolvency agreement executed by the bankrupt, or a composition or scheme of arrangement accepted by the bankrupt’s creditors, has (including at a time before the commencement of this paragraph) been set aside or terminated, in payment of liabilities, commitments, expenses or remuneration referred to in section 114;
(d) fourth, in the case of the estate of a deceased debtor whose estate is being administered under Part XI, in payment of proper funeral and testamentary expenses;
(e) fifth, in payment of amounts (including amounts payable by way of allowance or reimbursement under a contract of employment or under an industrial instrument, but not including amounts in respect of long service leave, extended leave, annual leave, recreation leave or sick leave), not exceeding in the case of any one employee $1,500 or such greater amount as is prescribed by the regulations for the purposes of this paragraph, due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of services rendered to or for the bankrupt before the date of the bankruptcy;
(f) sixth, in payment of all amounts due in respect of compensation payable under any law of the Commonwealth or of a State or Territory relating to workers compensation, being compensation the liability for which accrued before the date of the bankruptcy;
(g) seventh, in payment of all amounts due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of long service leave, extended leave, annual leave, recreation leave or sick leave in respect of a period before the date of the bankruptcy;
(h) eighth, in payment of any sum payable under section 113;
(j) ninth, in payment of:
(i) such preferences, priorities or advantages in favour of any creditor or group of creditors as regards any other creditor or group of creditors; and
(ii) such costs, charges and expenses incurred in the interests of creditors before the date of the bankruptcy;
as a meeting of the creditors, by special resolution, resolves.
(1A) Subsection (1) has effect subject to:
(a) section 50 of the Child Support (Registration and Collection) Act 1988; and
(b) former subsections 221YHJ(3), (4) and (5) and 221YHZD(3), (4) and (5) and former section 221YU of the Income Tax Assessment Act 1936.
Note: The provisions of the Income Tax Assessment Act 1936 referred to do not apply to liabilities arising after 30 June 1993.
(1B) The reference in paragraph (1)(e) to amounts due in respect of an employee of the bankrupt includes a reference to amounts due as contributions to a fund for the purposes of making provision for, or obtaining, superannuation benefits for the employee, or for dependants of the employee.
(1C) The reference in paragraph (1)(e) to amounts due to or in respect of any employee of the bankrupt also includes a reference to amounts due as superannuation guarantee charge (within the meaning of the Superannuation Guarantee (Administration) Act 1992), or general interest charge in respect of non‑payment of the superannuation guarantee charge.
(2) Subject to subsection (3), where a payment has been made by the bankrupt of an amount referred to in paragraph (1)(e) or (g) and the payment was made out of moneys advanced by a person for the purpose of enabling the payment, or such a payment, to be made, the person by whom the moneys were advanced has the same right of priority in respect of the moneys so advanced as the person who received the payment would have had if the payment had not been made.
(3) The right of priority conferred by subsection (2) in respect of moneys advanced for the purpose referred to in that subsection does not extend to so much of the money so advanced as exceeds the amount by which the amount in respect of which the person who received the payment would have been entitled to priority has been diminished by reason of the payment.
(5) Paragraph (1)(f) does not apply to the extent to which the bankrupt is indemnified under a contract of insurance against the liability referred to in that paragraph.
(6) Where, under a law of the Commonwealth or of a State or Territory that provides for workers compensation, a bankrupt is liable to make a payment to a body or fund by way of reimbursing the body or fund in respect of compensation paid or payable by the body or out of the fund under that law, paragraph (1)(f) does not apply to the amount so payable by the bankrupt.
(6A) Where compensation payable under a law relating to workers compensation is payable by way of periodical payments, the amount of that compensation shall, for the purposes of paragraph (1)(f), be taken to be the lump sum for which those periodical payments could, if redeemable, be redeemed under the law under which those periodical payments are made.
(8) A payment must not be made under paragraph (1)(j) until 28 days after the day on which the special resolution referred to in that paragraph was passed.
(9) The bankrupt or a creditor may, before the expiration of the period referred to in subsection (8), apply to the Court to reverse or vary the decision of the creditors and the Court may, upon the application, make such order as it thinks proper.
(10) Where in any bankruptcy:
(a) property has been recovered, realized or preserved under an indemnity for costs of litigation given by a creditor or creditors; or
(b) expenses in relation to which a creditor has, or creditors have, indemnified a trustee have been recovered;
the Court may, upon the application of the trustee or a creditor, make such orders as it thinks just and equitable with respect to the distribution of that property and the amount of those expenses so recovered with a view to giving the indemnifying creditor or creditors, as the case may be, an advantage over others in consideration of the risk assumed by creditor or creditors.
(11) Except as provided in paragraph (1)(a), the debts in each of the classes specified in subsection (1) rank equally between themselves and shall be paid in full unless the proceeds of the property of the bankrupt are insufficient to meet them, in which case they shall be paid proportionately.
(12) In subsection (11), debts includes liabilities, remuneration, commitments and expenses specified in subsection (1).
109A Debts due to employees
(1) Where a contract of employment with a bankrupt was subsisting immediately before the date of the bankruptcy, the employee under the contract is, whether or not the employee is a person referred to in subsection (2), entitled to payment under section 109 as if the employee’s employment had been terminated by the bankrupt on that date.
(2) Where, for the purposes of a bankruptcy, a trustee employs a person whose employment by the bankrupt had been terminated by reason of the bankruptcy, that person shall, for the purpose of calculating any entitlement to payment for long service leave, extended leave, annual leave, recreation leave or sick leave, be deemed, while the trustee employs that person for those purposes, to be employed by the bankrupt.
(3) Subject to subsection (4), where, after the date of a bankruptcy, an amount in respect of long service leave or extended leave becomes due to a person referred to in subsection (2) in respect of the employment so referred to, the amount is a cost of the bankruptcy.
(4) Where, at the date of a bankruptcy, the length of qualifying service of a person employed by the bankrupt is insufficient to entitle that person to any amount in respect of long service leave or extended leave, but, by the operation of subsection (2), that person becomes entitled to such an amount after that date, that amount:
(a) is a cost of the bankruptcy to the extent of an amount that bears to that amount the same proportion as the length of that person’s qualifying service after that date bears to the total length of that person’s qualifying service; and
(b) shall, to the extent of the balance of that amount, be deemed to be an amount referred to in paragraph 109(1)(g).
110 Application of estates of joint debtors
(1) In the case of joint debtors, whether partners or not, the joint estate shall be applied in the first instance in payment of their joint debts, and the separate estate of each joint debtor shall be applied in the first instance in payment of his or her separate debts.
(2) If there is a surplus in the case of any of the separate estates, it shall be dealt with as part of the joint estate and if there is a surplus in the case of the joint estate, it shall be dealt with as part of the respective separate estates in proportion to the right and interest of each joint debtor in the joint estate.
113 Apprenticeship etc. claims
(1) Where, at the time of the presentation of a petition on which, or by virtue of the presentation of which, a person became a bankrupt, a person was apprenticed, or was an articled clerk, to the bankrupt, the sequestration order or, in the case of a debtor’s petition, the presentation of the petition is, if the apprentice or clerk or a person acting on his or her behalf gives notice in writing to the trustee that the apprentice or clerk elects that the indenture of apprenticeship or articles of agreement be discharged, a complete discharge of that indenture or those articles.
(2) Where such an indenture or such articles are so discharged and any money has been paid by or on behalf of the apprentice or clerk to the bankrupt as a fee, the trustee may, on application by or on behalf of the apprentice or clerk, pay out of the property of the bankrupt, to or for the use of the apprentice or clerk, such sum as the trustee thinks reasonable, having regard to the amount paid by or on behalf of the apprentice or clerk and to the time during which he or she has served with the bankrupt under the indenture or articles and to the other circumstances of the case.
(3) The trustee shall, on the application of an apprentice or articled clerk to the bankrupt, or of a person acting on his or her behalf, execute a transfer of the indenture of apprenticeship or articles of agreement to some other person.
114 Payment of liabilities etc. incurred under terminated deed etc.
(1) Where a debtor becomes a bankrupt after a personal insolvency agreement executed by him or her, or a composition or scheme of arrangement accepted by his or her creditors, has, whether before or after the commencement of this Act, been set aside or terminated:
(a) any unpaid liabilities incurred in good faith, and any unpaid commitments entered into in good faith, under the terminated agreement, composition or scheme of arrangement by the trustee or the debtor;
(b) any expenses reasonably incurred in good faith under the terminated agreement, composition or scheme of arrangement by the trustee, being expenses for which he or she has not been reimbursed; and
(c) such proportionate part of the unpaid remuneration of the trustee as the creditors in relation to the terminated agreement, composition or scheme of arrangement determine by resolution;
are debts provable in the bankruptcy.
(2) In this section:
the terminated agreement, composition or scheme of arrangement means the agreement, composition or scheme of arrangement that has been set aside or terminated.
Subdivision B—The effect of proceeds of crime orders and applications for proceeds of crime orders
114A The effect of proceeds of crime orders
(1) If property of a bankrupt is covered by a restraining order, or a forfeiture order, made on or after the date of the bankruptcy, proceeds of property that is covered by the order must not be applied under Subdivision A while that property is so covered.
(2) If a pecuniary penalty order is made against a bankrupt on or after the date of the bankruptcy, proceeds of any of the property of the bankrupt must not be applied under Subdivision A while the order is in force.
Note: For proceeds of crime orders made before the date of the bankruptcy, see section 58A.
114B The effect of applications for proceeds of crime orders
(1) If:
(a) an application is made under a proceeds of crime law for a restraining order or a forfeiture order; and
(b) if the order were made, it would cover property of a bankrupt (whether the application is made before, on or after the date of the bankruptcy);
proceeds of any of the property of the bankrupt that would be covered by the order must not be applied under Subdivision A before the application is finally determined.
(2) If:
(a) an application is made under a proceeds of crime law for a pecuniary penalty order; and
(b) the person against whom the order would be made is, or later becomes, a bankrupt;
proceeds of any of the property of the bankrupt must not be applied under Subdivision A before the application is finally determined.
114C Director of Public Prosecutions or Commissioner of the Australian Federal Police must notify the trustee of certain matters
If circumstances arise as a result of which:
(a) this Subdivision prevents Subdivision A from being applied to the proceeds of property of a bankrupt; or
(b) this Subdivision no longer prevents Subdivision A from being applied to the proceeds of property of a bankrupt;
the Director of Public Prosecutions (or the Commissioner of the Australian Federal Police, if the Commissioner is the Commonwealth proceeds of crime authority that is the responsible authority for the order under the Proceeds of Crime Act 2002) must, as soon as practicable, give the trustee written notice of the existence of the circumstances.
Division 3—Property available for payment of debts
Subdivision A—General
115 Commencement of bankruptcy
(1) If a person becomes a bankrupt on a creditor’s petition and subsection (1A) does not apply, then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the creditor’s petition was presented.
(1A) If:
(a) a person becomes a bankrupt on a creditor’s petition that was based on breach of a bankruptcy notice; and
(b) the time for compliance with the notice was extended under subsection 41(7); and
(c) the Court making the sequestration order considers that the application under subsection 41(7) was frivolous, vexatious or otherwise without substantial merit;
then the bankruptcy is taken to have relation back to, and to have commenced at, the time that would have applied under subsection (1) of this section if the time for compliance had not been extended.
(1B) If a person becomes a bankrupt because of a sequestration order made under Division 6 of Part IV or under Part X, then the bankruptcy is taken to have relation back to, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the person within the period of 6 months immediately before the date on which the application for the sequestration order was made.
(2) The bankruptcy of a person who becomes a bankrupt as a result of the acceptance of a debtor’s petition is taken to have relation back to, and to have commenced at, the time indicated in the following table.
| Debtor’s petition bankruptcy—time to which bankruptcy has relation back and time bankruptcy commences |
| |
Circumstances in which debtor’s petition was presented or accepted
| Time to which bankruptcy has relation back and time of commencement of bankruptcy |
| 1 | Petition accepted by the Official Receiver under a direction of the Court | Time specified by the Court as the commencement of the bankruptcy |
| 2 | Petition presented when at least one creditor’s petition was pending against the petitioning debtor (whether alone, as a member of a partnership or as a joint debtor), and accepted by the Official Receiver without a direction from the Court | Time of the commission of the earliest act of bankruptcy on which any of the creditor’s petitions was based |
| 3 | Petition presented when no creditor’s petitions were pending but the debtor had committed at least one act of bankruptcy in the past 6 months, and accepted by the Official Receiver without a direction from the Court | Time of commission of the earliest act of bankruptcy within the 6 months before the petition was presented |
| 4 | Petition presented when no creditor’s petitions were pending and the debtor had not committed any act of bankruptcy in the past 6 months, and accepted by the Official Receiver without a direction from the Court | Time of presentation of the petition |
(3) A creditor’s petition or a sequestration order made on a creditor’s petition is not invalid by reason of the commission of an act of bankruptcy before the time when the debt on which the petition was based was incurred.</