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BANKRUPTCY AMENDMENT ACT 1987 No. 119 of 1987 - SECT 51
51. (1) After Division 4 of Part VI of the Principal Act the following
Division is inserted:
"Division 4A-Orders in relation to Property of Entity controlled by Bankrupt
Trustee may apply to Court
"139A. The trustee of a bankrupt's estate may, at any time within 6 years
after the date of the bankruptcy, apply to the Court for an order under this
Division in relation to an entity (in this Division called the 'respondent
entity'). Application to be served on respondent entity
"139B. An applicant under section 139A:
(a) shall serve the application on the respondent entity; and
(b) may serve the application on any other person or entity. Who may
appear at hearing
"139C. At the hearing of an application under section 139A:
(a) the respondent entity may; and
(b) any other person or entity may, with the leave of the Court; appear,
adduce evidence and make submissions. Order relating to property of
entity
"139D. (1) Where, on an application under section 139A, the Court is satisfied
that:
(a) the bankrupt supplied personal services to, or for or on behalf of,
the respondent entity at a time or times, during the examinable period
and before the date of the bankruptcy, when the bankrupt controlled
the entity in relation to the supply of those services;
(b) either:
(i) the bankrupt received for those services no remuneration in
money or other property; or
(ii) the remuneration in money or other property that the bankrupt
received for those services was substantially less in amount or
value than a person supplying those services in similar
circumstances might reasonably be expected to have received if
the person had dealt with the entity at arm's length in
relation to the supply of those services;
(c) during the examinable period, the entity acquired an estate in
particular property as a direct or indirect result of, or of matters
including, the supply by the bankrupt of those services;
(d) the bankrupt used, or derived a benefit from, the property at a time
or times during the examinable period when the bankrupt controlled the
entity in relation to the property; and
(e) the entity still has an estate in the property; subsections (2) and
(3) have effect, whether or not the bankrupt has ever had an estate in
the property.
"(2) The Court may, by order, vest in the applicant:
(a) the entity's estate in the whole, or in a specified part, of the
property; or
(b) a specified estate in the whole, or in a specified part, of the
property, being an estate that could, by virtue of the entity's estate
in the property, be so vested by or on behalf of the entity.
"(3) The Court may make an order directing:
(a) the execution of an instrument;
(b) the production of documents of title; or
(c) the doing of any other act or thing; in order to give effect to an
order under this section made on the application. Order relating to
entity's net worth
"139E. (1) Where, on an application under section 139A, the Court is satisfied
that:
(a) the bankrupt supplied personal services to, or for or on behalf of,
the respondent entity at a time or times, during the examinable period
and before the date of the bankruptcy, when the bankrupt controlled
the entity in relation to the supply of those services;
(b) either:
(i) the bankrupt received for those services no remuneration in
money or other property; or
(ii) the remuneration in money or other property that the bankrupt
received for those services was substantially less in amount or
value than a person supplying those services in similar
circumstances might reasonably be expected to have received if
the person had dealt with the entity at arm's length in
relation to the supply of those services; and
(c) the entity's net worth at a particular time during the examinable
period exceeded by a substantial amount what might reasonably be
expected to have been the entity's net worth at the last-mentioned
time if those services had not been supplied; subsection (2) has
effect.
"(2) The Court may by order direct:
(a) if the entity is a partnership-a partner or partners in the
partnership; or
(b) in any other case-the entity; to pay to the applicant a specified
amount not exceeding the amount referred to in paragraph (1) (c).
Court to take account of interests of other persons
"139F. (1) In considering whether or not to make under section 139D a
particular order relating to property in which the respondent entity has an
estate, the Court shall take account of:
(a) the nature and extent of any estate that any other person or entity
has in the property and any hardship that the order might cause that
other person or entity; and
(b) the respondent entity's current net worth and any hardship the order
might cause the respondent entity's creditors.
"(2) In considering whether or not to make a particular order under section
139E, the Court shall take account of the respondent entity's current net
worth and any hardship the order might cause the entity's creditors. Giving
effect to orders under sections 139D and 139E
"139G. (1) Where:
(a) the Court makes an order under section 139D vesting in a person an
estate in property; and
(b) a law of the Commonwealth, of a State, or of a Territory of the
Commonwealth, requires the creation, transfer or transmission of
estates in that property to be registered; that estate vests in equity
in the person by virtue of the order but does not so vest at law until
the requirements of that law have been complied with.
"(2) Where the Court makes under section 139D an order directing the execution
of an instrument and:
(a) a person has refused or failed to comply with the direction; or
(b) for any other reason, the Court thinks it necessary to exercise its
powers under this subsection; the Court may, by order, appoint the
Registrar:
(c) to execute the instrument in the name of a person; and
(d) to do all acts and things necessary to give effect to the instrument.
"(3) An order by the Court under section 139E is enforceable as if it were an
order for the payment of money made by the Court when exercising jurisdiction
otherwise than under this Act. Entity entitled to claim in bankruptcy
"139H. (1) Where, on an application under section 139A, the Court makes an
order under section 139D vesting in the applicant an estate in property, or an
order under section 139E directing the payment of a specified amount to the
applicant, the respondent entity may claim for dividend in the bankruptcy in
respect of the value of that property as at the making of the order, or in
respect of the specified amount, as the case may be.
"(2) A claim under subsection (1) shall be postponed until all claims of the
other creditors (including claims for interest on interest-bearing debts in
respect of a period after the date of the bankruptcy but not including claims
under subsection 120 (4)) have been satisfied.".
(2) Division 4A of Part VI of the Bankruptcy Act 1966 applies in relation to a
bankrupt in respect of a bankruptcy whenever the date of the bankruptcy
occurred and, if the first dividend was paid before the commencement of
subsection 44 (1) of this Act, applies in relation to the bankrupt in respect
of the bankruptcy as if the reference in subsection 139H (2) of that Act to
claims of other creditors included:
(a) a reference to claims under section 111 of the Principal Act; and
(b) a reference to claims in respect of excess interest under section 112
of the Principal Act.
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