Commonwealth Numbered Acts

BANKRUPTCY AMENDMENT ACT 1980 No. 12 of 1980 - SECT 16

16. After section 20 of the Principal Act the following Division is inserted
in Part II:

                      "Division 2-Common Investment Fund




"20A. 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
established by section 20G;

'Investment Board' means the Investment Board established by section 20C. The
Common Investment Fund

"20B. (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 sub-section (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 sub-section (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 sub- section 172(1),
and all investments made under that sub-section 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 approved bank or
approved banks, such accounts for the purposes of the Common Fund as the
Inspector-General directs by writing under his hand.



"(5) In giving directions to the Official Trustee under sub-section (4), and
in varying or revoking any directions so given, the Inspector-General shall
ensure that the Official Trustee at all times maintains one account referred
to in that sub-section for each District.



"(6) The payment of moneys into an account referred to in sub- section (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 or of the Bankruptcy Act
1924-1965 in its continued application by virtue of this Act, to make out of
moneys standing to the credit of the estate of a bankrupt or a deceased debtor
shall be made out of moneys in the Common Fund.



"(8) This sub-section applies to moneys held or received by the Official
Trustee-

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

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

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

   (d)  as the trustee of a deed of assignment or deed of arrangement
        executed, or a composition accepted, under Part X; or

   (e)  as trustee of-

        (i)    a composition or scheme of arrangement accepted and approved
               under Division 5 of Part IV of the repealed Act

        (ii)   a composition or scheme of arrangement accepted, or a deed of
               assignment executed, under Part XI of the repealed Act; or

        (iii)  a deed of arrangement executed under Part XII of the repealed
               Act. Investment Board

"20C. (1) There shall be an Investment Board, consisting of-

   (a)  the Permanent Head of the Department of State that deals with matters
        arising under this Division; and

   (b)  the Inspector-General.



"(2) The person for the time being holding, or performing the duties of, an
office specified in sub-section (1) may, by writing under his hand, appoint a
person to be his deputy.



"(3) Where at any time the person for the time being holding, or performing
the duties of, an office specified in sub-section (1) is absent from duty or
from Australia or is, for any other reason, unable to act as a member of the
Investment Board, the deputy of that person may act as a member of the
Investment Board on his behalf and shall, while so acting, be deemed to be a
member of the Investment Board in place of that person. Investment of moneys
in Common Fund

"20D. (1) The moneys in the Common Fund not immediately required for the
purposes of this Act may be invested by the Official Trustee-

   (a)  in public securities;

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

   (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 approved bank.



"(2) The Investment Board may, from time to time, give directions to the
Official Trustee with respect to the investment of moneys in the Common Fund,
and the Official Trustee shall comply with those directions.



"(3) The Investment Board may vary or revoke directions given by it to the
Official Trustee under sub-section (2).



"(4) In giving directions to the Official Trustee under sub-section (2), and
in varying or revoking directions so given, the Investment Board-

   (a)  shall endeavour to ensure that the moneys in the Common Fund lodged in
        accounts at call with a bank or banks 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
        Investment Board, are not required to be kept in accounts at call with
        a bank or banks in accordance with paragraph (a) are, as far as
        practicable, invested by the Official Trustee in accordance with
        sub-section (1).



"(5) The Investment Board shall, from time to time, consult with the Official
Receivers concerning the amount of moneys in the Common Fund that should be
retained in accounts at call with a bank or banks.



"(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 sub-section (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 company the principal
        business of which 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 a bank as defined by sub-
        section 5 (1) of the Banking Act 1959. Borrowing for the Common Fund

"20E. (1) Where the Investment Board is of the opinion-

   (a)  that moneys in the Common Fund deposited in accounts at call with a
        bank or banks 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 Investment Board may, by instrument in writing, authorize
        the Official Trustee to borrow from the Commonwealth under
        this section moneys not exceeding such amount as is specified in the
        instrument.



"(2) The Minister for Finance may, on behalf of the Commonwealth, lend to the
Official Trustee, on such terms and conditions as he determines, moneys that
the Official Trustee is authorized under sub-section (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. Moneys in Common Fund not held on account of particular
estates, &c.

"20F. (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.



"(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.



"(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.



"(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.



"(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.



"(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 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
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. Common Investment Fund Equalization Account

"20G. (1) There shall be an account to be known as the Common Investment Fund
Equalization Account.



"(2) The Equalization Account is a Trust Account for the purposes of section
62A of the Audit Act 1901. Payment of moneys into and out of Equalization
Account

"20H. (1) Interest derived from the investment of moneys in the Common Fund
shall be paid into the Equalization Account.



"(2) An amount equal to the amount of any capital profit made upon the
realization of an investment made from moneys in the Common Fund shall be paid
out of the Common Fund into the Equalization Account.



"(3) An amount equal to-

   (a)  the amount of any capital loss incurred upon the realization of an
        investment made from moneys in the Common Fund; or

   (b)  each amount of interest that forms part of the estate of a bankrupt by
        virtue of sub-section 20J (2) or (3) or that is payable to a person by
        virtue of sub-section 20J (4), is payable out of the Equalization
        Account into the Common Fund.



"(4) The Investment Board shall, at such intervals as the Minister directs by
writing under his hand, determine the amount (if any) by which the amount
standing to the credit of the Equalization Account exceeds the amount that
should, in the opinion of the Investment Board, be retained in that Account
for the purpose of making payments into the Common Fund in accordance with
sub-section (3), and an amount equal to the excess is thereupon payable out of
that Account into the Consolidated Revenue Fund.



"(5) Where, at any time, an amount required by sub-section (3) to be paid out
of the Equalization Account exceeds the amount standing to the credit of that
Account, an amount equal to the excess is payable into that Account out of
moneys available under an appropriation made by the Parliament. Interest on
moneys in Common Fund payable only in certain circumstances

"20J. (1) Where the Official Trustee is the trustee of the estate of a
bankrupt or of a deceased debtor, the estate is not entitled, except as
provided by sub-sections (2) and (3), to interest on moneys held by the
Official Trustee as the trustee of the estate.



"(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 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 Registrar may direct, by writing under his hand,
that interest on those moneys, at the rate prescribed for the purposes of this
section and in respect of such period as he determines, shall form part of
that estate.



"(3) Where, on or after the date of commencement of this section (in the
sub-section referred to as the 'commencing date'), the Official Trustee
receives an amount by way of interest on moneys, or on investments, that form
part of the Common Fund by virtue of sub-section 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.



"(4) Where it is established that 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, interest on those moneys is payable to the person to whom those
moneys are payable, out of the Common Fund, at the rate prescribed 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 sub-section (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.".