Commonwealth Numbered Regulations - Explanatory Statements Commonwealth Numbered Regulations - Explanatory Statements[Index] [Search] [Download] [Related Items] [Help]
BANKRUPTCY RULES (AMENDMENT) 1991 NO. 117
EXPLANATORY STATEMENTStatutory Rules 1991 No. 117
Bankruptcy Rules (Amendment)
The Law and Justice Legislation Amendment Act 1990 (the Amendment Act) made a number of amendments to the Bankruptcy Act 1966 (the Act) to implement proposals for change put forward by the Chief Justice of the Federal Court relating to the acceptance of a debtor's petition when a creditor's petition is pending against the particular debtor and to implement suggestions made by the Auditor-General relating to the imposition of fees for registration of trustees. The Amendment Act also made a number of 'tidying up' amendments to the Act, repealing spent provisions, and consolidating overlapping provisions in order to simplify the Act.
These Bankruptcy Rules (Amendment) made necessary consequential amendments to the Bankruptcy Rules arising as a result of the enactment of the Amendment Act, and made a number of other amendments to the Bankruptcy Rules.
The Bankruptcy Rules (Amendment) made provision failing into 7 categories, as follows:
- technical amendments to substitute references to provisions of the Act which were amended by the Amendment Act and to make consequential amendments to other rules previously omitted to be made (rules 7, 8, 9, 10, 22, 26, 27, 28, 30, 35 and 37);
- establishing new procedures for interviewing and assessing the suitability of applicants for registration as a trustee under the revised registration procedure in the Act (rules 4, 16, 17, 18, 19 and 34);
- amendments to clarify the obligations of trustees with respect to the minuting of meetings of creditors, dealing with proofs of debt and the filing of accounts of receipts and payments (rules 11, 12, 20, 21, 23 and 24);
- amendments to improve procedures in relation to applications to the court and to facilitate the filing and supply of documents by facsimile transmission (rules 4, 5, 6, 7, 8, 13, 14, 15, 25, 27, 28, 29, 30, 31 and 33);
- repeal of unnecessary provisions which duplicate sections of other Acts or of the Bankruptcy Rules, or have become redundant as a result of the repeal or amendment of provisions of the Act by the Amendment Act (rules 10, 13, 14, 30, 36 and 37);
- amendment of Schedule 5 to the Bankruptcy Rules to provide for mandatory assistance by Australian Courts in aid of the Royal Court of Jersey pursuant to an agreement with the Viscount of the Royal Court. similar provisions have been incorporated in the Corporations Regulations under the Corporations Law (Rule 38); and
- implementing the Eighth Report of the Federal Costs Advisory Committee relating to the scale of costs for solicitors in bankruptcy matters (clause 32).
The details of the Bankruptcy Rules Amendment are as follows.
Rule 1 - Commencement
Rule 1 provided f or the commencement of these new rules on 22 June 1991, to coincide with the commencement of certain provisions of Part 2 of the Law and Justice Legislation Amendment Act 1990 (the Amendment Act), which made amendments to the Bankruptcy Act 1966 (the Act), on 22 June 1991.
Rule 2 - Amendment
Rule 2 provided that the Bankruptcy Rules are amended as set out in these rules.
Rule 3 - Rule 4 (Interpretation)
Rule 3 amended subrule 4(1) of the Bankruptcy Rules to insert the following definition: "'the IPAA' means the Insolvency Practitioners Association of Australia, being a public company limited by guarantee incorporated under subsection 35(2) of the Companies (New South Wales) Code 1988;". This definition enables the use of the shorthand term 'IPAA' to refer to the Insolvency Practitioners Association of Australia throughout the Bankruptcy Rules.
Rule 4 - Rule 10 (Registrar to fix time and place for hearing of counter-claim &c)
Rule 4 repealed rule 10 of the Bankruptcy Rules and inserted a new rule 10.
Under the Act, a debtor who fails to comply with the requirements of a bankruptcy notice commits an act of bankruptcy. However, if the debtor can satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount claimed in the notice which could not have been set up by the debtor in the action or proceeding in which the judgment or order was obtained, the act of bankruptcy is not committed.
Former rule 10 of the Bankruptcy Rules detailed the procedure for the hearing of a counter-claim, set-off or cross demand. Rule 4 rearranged rule 10 of the Bankruptcy Rules and made two particular changes; the requirement on the Registrar to serve notices of the date, time and place for the hearing relating to the counter-claims, set-offs and cross demands to relevant parties was altered so that under subrule 10(6), the debtor has responsibility for the service of these notices.
Subrules 10(3) and (4) insert into the Bankruptcy Rules a requirement imposed by case law that the Registrar must satisfy himself or herself, whether on its face, the debtor's application does raise a counter-claim, set-off or cross demand and give sufficient particulars of why the debtor was unable to set up that counter-claim, set-of for cross demand in the original proceedings, before fixing a date for the hearing.
Rule 5 - Rule 19A - Form of debtor's declaration
Rule 5 rearranged the language of rule 19A of the Bankruptcy Rules.
Subrule 19A(1) restates the requirement that a declaration of a debtor's intention to present a debtor's petition must be in accordance with Form 7B. Subrule 19A(2) enables these debtor's declarations to be presented to the Registrar by facsimile transmission.
Presentation of a debtor's declaration, and its acceptance by the Registrar entitles the debtor to a 7 day stay on recovery action by creditors, in order to give the debtor time to consider bankruptcy and its alternatives. The 7 day stay period is too short to permit debtors residing in remote areas to present the declarations for endorsement by mail. Accordingly, it is necessary to have a facility for presenting the declarations by facsimile, and to enable the Registrar to return endorsed declarations to the debtor by the same means.
Rule 6 - (Acceptance of debtor's declarations)
Rule 6 inserted new subrule 19B(3) into rule 19B of the Bankruptcy Rules.
Where a debtor presents a declaration of intention to present a debtor's petition, and the Registrar accepts the declaration, the Registrar is required to supply a signed and sealed copy of the declaration to the debtor. Subrule 19B(3) allows the Registrar to supply a signed and sealed copy of the declaration to the debtor by facsimile transmission.
Rule 7 - Rule 24 (Form of debtor's petition)
Rule 7 repealed rule 24 of the Bankruptcy Rules and the inserted a new rule 24.
As with the former rule 24, subrules 24(1), (2) and (3) prescribe the forms used for debtor's petitions against individuals, partnerships and joint debtors. Subrule 24(4) enables debtor's petitions to be presented by facsimile transmission. This assists debtors in remote areas.
Rule 8 - Rule 25 (Notice of hearing of reference of debtor's petition by Court)
The Amendment Act inserted into sections 55, 56 and 57 of the Act a requirement that the Registrar refer a debtor's petition to the court for a direction whether to accept or reject the petition where a creditor's petition is pending against the debtor who presented the debtor's petition. Former rule 25 of the Bankruptcy Rules required the Registrar to notify the solicitor for the debtor or where there is more than one debtor, each of their solicitors of the date, time and place fixed for the hearing of the reference.
Subrule 8(1) amended paragraph 25(1)(a) of the Bankruptcy Rules to require the Registrar to give notice of the time, date and place fixed for the hearing by the court of a reference from the Registrar for a direction as to whether the debtor's petition should be accepted or rejected in a case where a creditor's petition is pending against the debtor.
Subrule 8(2) amended paragraph 25(1)(b) of the Bankruptcy Rules to the same effect as the amendment made to paragraph 25(1)(a) by subrule 8(1).
Subrule 8(3) clarified subrule 25(1) of the Bankruptcy Rules by specifying that the Registrar must (give notice of the date of hearing of references of debtor's petitions by the court to the debtor, or the solicitor for the debtor, or each debtor, or the solicitor for each debtor.
Rule 9 - Rule 30B (Statement of affairs by joint debtors)
A number of the provisions of the Bankruptcy Rules specify information which should be included in a debtor's or bankrupt's statement of affairs. All of these provisions of the Bankruptcy Rules, other than subrule 30B(1), provide that the statement of affairs shall be in a form approved by the Inspector-General. Subrule 30B(1) of the Bankruptcy Rules provided that the form of statement of affairs for joint debtors and partners be in accordance with a form provided by the Registrar. Rule 9 replaced subrule 30B(1) to make it consistent with other provisions of the Bankruptcy Rules dealing with statements of affairs so that such statements for joint debtors and, partners are now required to be in a form approved by the Inspector-General.
Rule 10 - Division 9 of Part II (Public Examination of Bankrupt)
The Amendment Act repealed section 69 of the Act providing for the public examination of bankrupts. Division 9 of Part II of the Bankruptcy Rules detailed the procedure to be followed at public examinations. With the repeal of section 69, Division 9 of Part 11 of the Bankruptcy Rules became unnecessary and rule 10 repealed it.
Rule 11 - Rule 37 (Form of proof of debt)
Establishing a right to be paid or to receive a dividend in a bankruptcy is known as "proving in the bankruptcy". only a provable debt may rank for repayment by way of ordinary dividend. If one is successful in proving, one is said to have been admitted to proof.
Audits of trustee's files have shown that trustees sometimes admit or reject proofs of debt without recording their decision in respect of particular proofs. Rule 11 added subrule (5) to rule 37 of the Bankruptcy Rules to require a trustee to record on the proof of debt whether he or she has rejected it.
Rule 12 - Rule 47 (Statement an to realisation and distribution of an estate)
Under subsection 140(8) of the Act, where a dividend is declared by the trustee, he or she must send to creditors together with the cheque for the amount of the dividend, a statement in relation to the realisation and distribution of the bankrupt estate. Rule 47 of the Bankruptcy Rules required the statement of realisation and distribution of the bankrupt estate to be in accordance with Form 21. Rule 12 replaced rule 47 of the Bankruptcy Rules.
New subrule 47(1) makes the same provision as former rule 47 of the Bankruptcy Rules. New subrule 47(2) requires a trustee to give to the Official Receiver a copy of each Form 21 sent by him or her to creditors.
A trustee is also required under section 175 of the Act to file periodic accounts of receipts and payments, in accordance with Form 33, relating to each insolvency administration of which he or she is the trustee. New subrule 47(2) will also require trustees to give copies of these Form 33 accounts to the Official Receiver.
New rule 47 assists the Inspector--General and the Official Receivers in Bankruptcy in their function of carrying out periodic audits of the accounts of registered trustees. The audit function was transferred from Registrars in Bankruptcy and the Auditor-General to the Inspector-General and the Official Receivers by the Amendment Act.
Rule 13 - Rule 52 (Application for discharge)
Rule 13 repealed rule 52 and inserted a new rule 52.
Section 150 of the Act provides for a bankrupt to apply to Court to be discharged from bankruptcy. Subrule 52(1) of the Bankruptcy Rules set down the procedure in relation to applications to Court and prescribed the use of an application in accordance with Form 26, together with a list, certified by the trustee, of names and addresses of the bankrupt's creditors and an affidavit setting out the facts on which the bankrupt. relies.
New subrule 52(1) simplifies the procedure relating to applications under section 150 of the Act by providing that the application by a bankrupt under section 150 of the Act must have attached to it a list, certified by the trustee, setting out the names and addresses of the creditors of the bankrupt. Thus applications for discharge will be made pursuant to subrule 102(1) of the Bankruptcy Rules, the general provision relating to applications. Rule 102 provides that applications to the court be made in accordance with Form 45. Rule 103 of the Bankruptcy Rules provides that the application shall be supported by an affidavit setting out the facts upon which the applicant relies. Rule 38 repealed Form 26.
New paragraph 52(2)(a) provides that if an application is filed under section 150 of the Act, the Registrar must fix a date, tine and place of hearing of the application before the court not less than 28 days before the hearing date of the application. New paragraph 52 (2) (b) requires the Registrar to sign and stamp the application, endorse it with the date, tine and place and return it to the bankrupt.
New subrule 52(3) makes the bankrupt responsible for serving notice of the day, time and place for hearing the application on the trustee, the creditors and the and in a case where a registered trustee is the trustee, on the Official Receiver. Previously, it was the responsibility of the Registrar to give notice of the time and date of the hearing.
Rule 14 - Rule 55 (Notice of opposition to discharge)
Rule 14 repealed rule 55 of the Bankruptcy Rules and inserted a new rule 55.
Section 150 of the Act allows for application by a bankrupt to Court for discharge. Rule 55 of the Bankruptcy Rules specified the procedure to be followed by provided a creditor who intended to oppose the bankrupt's application for discharge. The creditor had to file a notice in accordance with Form 28, setting out the grounds on which the application was opposed then and serve a copy of the notice on all relevant parties, not less than 3 days before the hearing date of the application.
New subparagraph 55(a)(i) provides for simpler procedural requirements by incorporating the provisions of rule 106 of the Bankruptcy Rules, relating to persons who intend to appear at the hearing of an application or petition. New subparagraph 55 (a) (i) prescribes that if a creditor who has a provable debt intends to oppose an application under section 150 of the Act, the creditor must file a notice in accordance with Form 46 and an affidavit in accordance with subrule 106(2). Subrule 106(2) is a general provision which requires a person who intends to oppose an application to file an affidavit, within a reasonable time before the hearing of the application commences. Such an affidavit must set out the facts, not being the facts set out in an affidavit filed in support of the application, on which the person intends to rely on the hearing of the application. New paragraph 55(b) prescribes the parties to whom the creditor has to give a copy of the notice and affidavit as soon as practicable after the notice and affidavit have been filed.
This change reduces the number of differing forms prescribed by the Bankruptcy Rules and enhances procedural simplicity.
Rule 15 - Rule 57 (Application for annulment under section 154 or 252A of the Act)
Rule 15 omitted from subrule 57(3) of the Bankruptcy Rules the words "on a ground specified in paragraph 154(1)(b) of the Act".
Subsection 154(1) of the Act provides that the Court may annul a bankruptcy on grounds specified in paragraphs (a) or (b). Rule 57 of the Bankruptcy Rules provides the procedural requirements of applications for annulment under section 154 or 252A of the Act. Subrule 57(3) of the Bankruptcy Rules requires the trustee of the bankruptcy to prepare a report concerning the bankrupt, where an application is made pursuant to paragraph 154 (1) (b) of the Act. It has been proposed that in all applications for annulment pursuant to both paragraphs 154 (1) (a) and (b) of the Act, the trustee in bankruptcy shall provide a report concerning the bankrupt. This was achieved by the omission of the limitation found in the words "on a ground specified in paragraph 154 (1) (b) of the Act" in subrule 57(3).
Rule 16 - Rule 59 (Application for official Receiver's report)
Rule 16 repealed rule 59 of the Bankruptcy Rules and substituted a new rule 59.
Section 154A of the Act was inserted by section 24 of the Amendment Act. Section 154A provides for natural persons who wish to be registered as trustees to apply to the Official Receiver for the District in which the application is made, for a report under this section (called an "Official Receiver's report"). Subsection 154A(2) provides that the application made under subsection (1) must be made in writing as prescribed and accompanied by the prescribed fee. Pursuant to subsection 154A(3) the official Receiver will cause the applicant to be interviewed and make such inquiries as necessary. The Official Receiver will then give to the applicant a written report stating the Official Receiver's opinion of the applicant's ability to perform the duties of, and fitness to be registered as, a trustee under the Act.
New subrule 59(1) prescribes the particulars to be contained in an application for an Official Receiver's report pursuant to subsection 154A(1) of the Act. Under new subrule 59(1), the application must contain the following particulars:
(a) the name, business and residential address and the age of the applicant; and
(b) if the applicant is a member of a partnership, the name and address of the partnership; and
(c) if the applicant is an employee, the name and address of the applicant's employer; and
(d) the applicant's educational qualifications; and
(e) the applicant's experience, if any, in assisting a registered trustee or a registered liquidator within the meaning of the Companies Act 1981 or the Corporations Act 1989 in carrying out the functions of the trustee or liquidator; and
(f) the applicant's current and previous business activities, if any; and
(g) whether the applicant is:
(i) a bankrupt; or
(ii) a discharged bankrupt who has been discharged for less than 3 years; or
(iii) a person:
(A) who has within 5 years immediately before the date of applying for the report executed a deed of assignment or a deed of arrangement; or
(B) whose creditors have within that period accepted a composition in satisfaction of his or her debts or a scheme of arrangement of his or her affairs;
under the Act or under a similar law of another country; and
(h) whether the applicant has, during the period of 10 years ending on the day on which the applicant applied for the report, been convicted of any offence, other than a traffic offence, and if appropriate, the particulars of, and the penalties imposed in relation to that offence; and
(i) whether the applicant has, during the period of 5 years ending on the day on which the applicant applied for the report, committed a breach of trust or fiduciary duty, whether or not amounting to an offence under any law of Australia or of another country, that he or she was required to make good; and
(j) whether the applicant is a member or a former member of a professional association and, if the applicant is a member or a former member of a professional association:
(i) whether he or she has, during the period of 5 years ending on the day on which the applicant applied for the report, been subject to any disciplinary action by that association; and
(ii) if appropriate, the particulars of the action.
New subrule 59(2) provides that an application must be accompanied by 2 references. The references must contain the following particulars:
(a) the name, address and telephone number of the referee; and
(b) the occupation of the referee; and
(c) the period of time during and the circumstances under which the referee has known the applicant; and
(d) the referee's opinion in relation to the following matters:
(i) the applicant's abilities in oral and written communication; and
(ii) whether the applicant has experience in assisting a registered trustee or a registered liquidator within the meaning of the Companies Act 1981 or the Corporations Act 1989 in carrying out the functions of the trustee or liquidator and, if appropriate:
(A) the nature of the activities that the applicant was required to carry out; and
(B) the length of the period of time during which the applicant carried out those duties; and
(C) whether the applicant carried out those duties in a competent manner; and
(iii) the applicant's knowledge of the powers, duties and functions of a registered trustee or registered liquidator; and
(iv) if the applicant has insufficient or no knowledge of the powers, duties and functions of a registered trustee or registered liquidator, whether the applicant has the capacity to acquire that knowledge within a short period of time; and
(v) the applicant's knowledge of business management and his or her capacity in relation to the successful conduct of business activities.
Rule 17 - Rule 59A (Interviews of applicants)
Rule 17 inserted new rule 59A into the Bankruptcy Rules.
In order to prepare the Official Receiver's report as required by subsection 154A(3) of the Act, the Official Receiver causes the applicant to be interviewed and make such inquiries as necessary New subrule 59A(1) requires the Official Receiver, as soon as practicable after receiving an application for a report, to convene an interview advisory committee and arrange a time, date and place for the interview to take place.
New subrule 59A(2) provides that an advisory interview committee comprise the Official Receiver, an officer of the AttorneyGeneral's Department and a person nominated by the InspectorGeneral from a list of 4 persons given to him or her for this purpose by the IPAA. The persons proposed by the IPAA to participate in an advisory interview committee must be either a registered trustee or a registered liquidator within the meaning of the Corporations Act 1989.
New subrule 59A(3) requires the advisory interview committee to interview the applicant.
New subrule 59A(4) provides that the advisory committee may ask the applicant any question that the committee reasonably believes to be related to the applicant's application (paragraph (a)), a reference accompanying the applicant's application (paragraph (b)) or whether the applicant has sufficient knowledge, skills and ability to perform the functions of a registered trustee (paragraph (c)).
New subrule 59A(5) provides that a report required to be prepared by the Official Receiver under subsection 154A(3) must specify the names of the persons who were members of the advisory interview committee.
Rule 18 - Rule 60 (Register of trustees)
Subsection 155(1) of the Act provides for the Registrar to keep a register in which shall be entered the names and such other particulars as prescribed, of persons whom the Court directs to be registered as qualified to act as trustees.
Paragraphs 60(1)(a) and (b) of the Bankruptcy Rules prescribe the particulars to be entered in the register. Subrule 18.1 inserted paragraphs 60 (1) (c), (d), (e), (f), (g) and (h), all of which prescribes further particulars to be entered in the register.
The further particulars to be included in the register are:
• the date on which the person filed his or her application and the date on which the Registrar notified the InspectorGeneral and each official Receiver of the person's application as required under subsection 155A(3) of the Act (paragraph (c));
• whether the Inspector-General or an Official Receiver has objected under subsection 155A(4) of the Act to the person's application for an extension of the person's term of registration and, if appropriate, the date on which the notice of the objection is received by the Registrar (paragraph (d));
• if a time limited by section 155A of the Act is extended or abridged under section 33 of the Act by the Court or the Registrar, particulars of the extension or abridgement (paragraph (e));
• the date on which a certificate of registration was given to the person as required under subsection 155B(1) of the Act (paragraph (f));
• if the person stops being a registered trustee, the date on which he or she returned his or her certificate of registration to the Registrar as required under subsection 155B(2) of the Act (paragraph (g)); and
• in respect of each period specified in section 161A of the Act, whether the person has lodged a triennial statement as required under that section and, if the person has lodged a statement, the date of its lodgement (paragraph (h)).
Subrules 60(2) and (3) of the Bankruptcy Rules required the Registrar to record in the register the fact that a trustee's registration has been cancelled by order of the court and where the trustee has died, the fact and date of his or her death. The Amendment Act altered the provisions of the Act to provide for renewable terms of registration of trustees and for trustees to relinquish voluntarily their registration. To take account of these changes to the Act, subrule 18(2) repealed subrules 60(2) and (3) and replaced them with a new subrule 60(2) requiring that the Registrar record in the register in any case where a trustee ceases to be a trustee, the reason why and the date on which he or she ceased to be a trustee.
Rule 19 - New rules 61C (Application for extension of term of registration), 61D (Objections to extension of term of registration) and 61E (Conferences relating to objections)
The Amendment Act changed section 155 of the Act relating to the registration of trustees to provide for renewable three year terms of registration, and to enable the Inspector-General or an official Receiver to object to renewal of registration. Rule 19 inserted new rules 61C, 61D and 61E into the Bankruptcy Rules. These rules specify the procedure that must be followed in relation to applications for renewal of registration and the making of objections to extension of registration.
New rule 61C provides that an application for extension of the term of registration must contain the name of the applicant, the date on which he or she was first registered as a trustee and if appropriate, the date on which his or her registration was last extended. The application must be accompanied by a copy of the most recent triennial statement required under section 161A of the Act.
New subrule 61D(1) provides that if the Inspector-General or an Official Receiver objects, under subsection 155A(4) of the Act, to a registered trustee's application for an extension of the term of registration, the Inspector-General or the Official Receiver must give a copy of the notice to the applicant on the same day.
New subrule 61D(2) provides that a notice given under subsection 155A(4) of the Act by the Inspector-General or the Official Receiver must set out the reasons for objecting to the extension of the term of registration.
New subrule 61D(3) provides for the applicant who receives a notice of objection to an extension of a term of registration to elect to notify the Registrar under subsection 155 (SE) of the Act that he or she wishes to stop being a registered trustee; or file a notice indicating that he or she intends to dispute the objection and give a copy of the notice to the Inspector-General or the Official Receiver. Under new subrule 61D(4), a notice of intention to dispute the objection must set out the trustee's reasons for disputing the objection.
New subrule 61D(5) provides that when the Registrar receives an objection notice from the Inspector-General or an Official Receiver, the Registrar must refer that notice to the court f or a direction to grant or refuse the application for the extension of the term of registration. In addition the Registrar must fix a date, time and place at which the applicant or the Inspector-General or Official Receiver may appear before the court for hearing of the reference and serve notice of the date, time and place of hearing of such a reference to the court, on the applicant and Inspector-General or the Official Receiver, as the case may be.
New rule 61E provides that if Inspector-General or the official Receiver objects to the extension of a person's term of registration as a trustee, the Registrar may, in certain circumstances, direct the applicant and the Inspector-General or the official Receiver to attend a conference presided over by the Registrar. New subrule 61E(1) allows the Registrar to direct the applicant, the Inspector-General or the Official Receiver to attend a conference if the Registrar thinks it desirable (paragraph (a)) or the Inspector-General, the official Receiver or the applicant requests it (paragraph (b)).
New subrule 61E(2) allows the Registrar to adjourn the conference generally, or to another date, time and place (paragraph (a)) and requires that the Registrar hold the conference before the date fixed for the hearing of the objection by the court.
New subrule 61E(3) provides that the applicant and the InspectorGeneral or the Official Receiver may be accompanied by some other person who may make oral submissions on their behalf (paragraph (a)) and the parties may discuss any matter that they reasonably believe to be related to the applicant's ability to perform the duties of trustee under the Act (subparagraph (b)(i)) or his or her fitness to continue being registered as a trustee under the Act (subparagraph (b)(ii)).
New subrule 61E(4) provides that evidence about anything said at the conference will not be admissible in any proceedings before a court or tribunal.
Rule 20 - Rule 67 (Application for release from trusteeship)
Section 183 of the Act allows a trustee to apply to court for an order of release from the trusteeship of an estate. Rule 67 of the Bankruptcy Rules prescribes the form of application to the court and specifies that the application be accompanied by a statement of the realisation and distribution of the estate in accordance with Form 21. New subrule 20 is an amendment, similar to rule 12, to clarify a trustee's obligations to furnish accounts and statements in relation to the receipts and payments of bankrupt estates.
New subrule 67(2) retains the use of Form 21 and provides that a copy of the most recent account, in accordance with Form 33, as required by subsection 175(1) of the Act, must accompany the application.
Rule 21 - Rule 73 (Trustee's accounts)
Section 175 of the Act requires that trustees furnish to the Registrar accounts of the receipts and payments of each insolvency administration at prescribed times. Rule 73 of the Bankruptcy Rules prescribed the times by reference to 31 March and 30 September of each calendar year.
Rule 21 repealed rule 73 of the Bankruptcy Rules and substituted a new rule 73, which fixes the time for the filing of accounts by reference to the date of bankruptcy.
New paragraphs 73 (1) (a) and (b) provide the following times as prescribed times for the purposes of subsection 175(1) of the Act: in respect of a period starting from the date of bankruptcy and ending 6 months after the end of the month in which that date (of bankruptcy) occurs, the prescribed time is the last day of the next month and in each successive period of 12 months, the prescribed time is the last day of the next month.
An example is provided to clarify calculation of the prescribed times.
New subrule 73(2) provides that new subrule 73(1) will not apply to the period during which the final dividend in respect of the bankrupt's estate is distributed as subsection 175(1) has already imposed the requirement to furnish an account of the receipts and payments of the bankrupt estate on the trustee.
New subrule 73(3) retains Form 33 as the form of the account to be furnished by the trustee of a bankrupt estate pursuant to subsection 175(1).
Rule 22 - Rule 78 (Debtor's statement of affairs)
Rule 78 of the Bankruptcy Rules sets out the material that a debtor is required to include in his or her statement of affairs for the purposes of Part X of the Act. Paragraph (h) which provided that the debtor should include such other matters as the Registrar considers ought to be included, was repealed by Statutory Rules No. 376 of 1989. The statement of affairs 78(2)(g) which has a semi-colon and the word 'and' at its end after paragraph 78(2)(h) was repealed.
Rule 23 - Rule 98 (Minutes of meeting)
Rule 98 of the Bankruptcy Rules requires the chairman of a meeting of creditors to be responsible for the preparation of minutes of the proceedings, sign the minutes within 14 days after the meeting. and sign and file a certificate (in accordance with Form 36) of the resolutions passed. Rule 23 amended rule 98 to make clear that the minutes of a meeting of creditors must include a list of all persons attending the meeting, and in respect of each resolution passed at the meeting, the names of the mover and seconder; the number of votes for and against the resolution; the names of voters for and against; and whether the vote was taken on the voices, on a show of hands, using ballot papers or by some other means.
Rule 24 - Rule 100 (Proxies)
Rule 100 of the Bankruptcy Rules enables a person to appoint another person as his or her proxy at a meeting of creditors. Subrule 100(2) imposes a disqualification on persons appointing debtors to be proxies where the debtor has entered into an insolvency administration under Part X of the Act, but imposes no specific disqualification in the case of meetings under Division 2 of Part X, which are always preliminary to the entering into by a debtor of an insolvency administration under that Part of the Act. Rule 24 amended subrule 100(2) to make it clear that a person shall not appoint as a proxy a debtor for the purpose of any meeting of creditors under Division 2 of Part X of the Act.
Rule 25 - Rule 102 (Procedure on application to the Court)
Rule 102 of the Bankruptcy Rules provides a procedure for a person to make an application to the Court that is not required to be made by petition, by filing an application in accordance with Form 45. This rule corresponds with procedural requirements for rules 10 and 52, which were amended by rules 4 and 13 of these rules, so that responsibility for notifying the day, time and place fixed for service of notices under rule 10 and for the hearing of an application for discharge under rule 52 is cast on the bankrupt making the application, rather than on the Registrar. Rule 25 amended rule 102(2)(d) to provide for the application in accordance with Form 45 to be signed by the applicant or the solicitor representing the applicant whichever is appropriate in the circumstances of the application.
Rule 26 - Rule 127 (conduct money and witnesses' expenses)
The Act contains a number of provisions enabling persons to be examined compulsorily before a Registrar in Bankruptcy about the affairs of debtors, bankrupts and their associates. Persons who are summoned to attend an examination are entitled to receive a reasonable amount to cover their out of pocket expenses for travelling to and attending the examination. A person who was tendered a reasonable sum but failed to appear for examination committed an offence. A bankrupt who was summoned to attend an examination under section 69 of the Act was not entitled to conduct money or expenses, and committed an offence if he or she failed to attend as required by the summons.
Section 69 of the Act was repealed by the Amendment Act, in order to simplify the examination provisions. In future, bankrupts, along with others will be examined pursuant to section 81 of the Act. Section 264A of the Act, as amended by subsection 35(1) of the Amendment Act, provides that a bankrupt or a person who has been discharged from bankruptcy will commit an offence for failing to appear for examination under section 81 of the Act. The offence is committed when the person fails to appear, and the person is not entitled to conduct money and expenses. A bankrupt or discharged bankrupt is referred to in section 81 as the 'relevant person'. Rule 26 amended subrule 127(2) to exclude a 'relevant person' from receiving conduct money or expenses when summoned under section al.
Rule 27 - Rule - 129 (Application for summons under subsection 81(1) of the Act)
Section 81 of the Act, which provides for the examination on oath of bankrupts, debtors and persons who have knowledge about the financial affairs of bankrupts, debtors and their associated entities, was amended by section 10 of the Amendment Act. Rule 129 of the Bankruptcy Rules provides for the issue of a summons under subsection 81(1) of the Act. Procedures in relation to proposals to examine the bankrupt the 'relevant person' within the meaning of section 81 are to be streamlined. Rule 27 amended rule 129 so that it does not apply where the person sought to be summoned is the relevant person, within the meaning of section 81 of the Act.
Rule 28 - Rule 129A (Summons under subsection 81(1) of the Act)
Rule 129A of the Bankruptcy Rules sets out the procedure for obtaining a summons under subsection 81(1) of the Act. Rule 28 amended rule 129A so that it does not apply where the person sought to be summoned is the bankrupt - the 'relevant person' within the meaning of section 81 of the Act.
Rule 29 - blew rule 129AA
Rule 29 inserted a new rule 129AA to provide the procedural requirements for summoning the bankrupt - the 'relevant person' - under section 81(1) of the Act.
New subrule 129AA(1) provides that an application may be made to the Registrar in writing for the relevant person to be examined. The application for examination of the relevant person may also include an application that the relevant person bring to the examination any books or classes of books specified in the application. The Registrar on receipt of the application may issue a summons in accordance with Form 49 (new subrule 129AA(2)). Pursuant to new subrule 129A(3), the summons is signed and stamped by the Registrar. The applicant then causes the summons to be served on the relevant person and gives notice of the date, time and place fixed for the examination to each creditor of the relevant person of whose debt the applicant has notice. There is no requirement for the relevant person to be served personally with the summons. Service by post is sufficient. Service of documents where no method of service is prescribed by the Bankruptcy Rules is dealt with in subsection 309(1) of the Act. New subrule 129A(5) requires that where the relevant person fails to appear as required by the summons, the Court, the Registrar or the magistrate may adjourn the examination, discharge the summons or issue a warrant for the arrest of the relevant person.
Rule 30 - Rule 130A (Approval for purposes of section 255 to be stamped)
Section 34 of the Amendment Act repealed subsections 255(1) to (4) which set out the approval process for the recording of transcripts of evidence. Rule 30 repealed rule 130A of the Bankruptcy Rules which required that the approval for the purposes of section 255 be signed and stamped by the Registrar.
Rule 31 - Rule 131 (Transcript of evidence)
Rule 131 of the Bankruptcy Rules provided that, for the purposes of section 255 of the Act, the prescribed certification on transcripts of proceedings is an endorsement signed by an officer or employee of the Commonwealth Reporting Service in the prescribed words.
Rule 31 amended rule 131 so that the required form of certification for the purposes of subsections 255(6), (9) and (10) of the Act is where the transcript of evidence bears the signature and stamp of the Registrar. Where it is a purported transcript of an examination under section 50, 81, 179A or 212D of the Act, rule 131 now provides that the document will bear an endorsement signed by the applicant in the following words -'This document is a transcript of an examination of (name of person examined) on the application of (name of applicant) conducted before (name of Judge, Registrar or magistrate) on (date or dates of examination)'. Alternatively, the form of the endorsement may be in substantially similar words.
Rule 32 - Rule 162 (Scale of costs)
Rule 162 of the Bankruptcy Rules sets out the scale of solicitors' costs in bankruptcy matters. The scale of costs is reviewed regularly by the Federal Costs Advisory Committee, and the Eighth Report of that Committee recommended increases in the scale amounting in the aggregate to 13.56%. Rule 32 implemented the recommendations of the Committee's report by applying a 13.56% increase to the scale costs. Bills of costs continue to be calculated in accordance with the scale, but solicitors are allowed to charge an additional amount equal to 13.56% of the total according to the scale.
Rule 33 - Rule 163 (Appointment to tax bill)
Rule 163 of the Bankruptcy Rules provides the procedure by which a bill of costs is to be filed with the Court to facilitate taxing. Under the Federal Court Rules, objections in writing to items on a bill of costs can be made by parties to the taxation prior to taxation of the bill. Rule 33 introduced into the Bankruptcy Rules a procedure for objections to items on a bill of costs corresponding to that found in the Federal Court Rules.
Rule 34 - Rule 179 (Yeas and percentages)
Rule 34 repealed subrule 179(12) and inserted new subrules 179(12) and (13).
Subrule 179(12) of the Bankruptcy Rules formerly provided for a fee of $2,000 to be payable to the Official Receiver in respect of the preparation of a report about an applicant for registration as a trustee. The report was required to be prepared under former rule 59. The report is now required to be prepared by section 154A of the Act, and this is now stated in subrule 179(12).
Subrule 34(2) prescribed a new fee of $1,000 which must accompany an application to the Registrar for an extension of a term of registration under section 155A of the Act. The Amendment Act introduced renewable terms of registration for trustees, and this fee will meet the cost of processing applications for renewal of registration.
Rule 35 - Rule 183 (Postponement, waiver or remission of fees by Registrars)
Rule 183 of the Bankruptcy Rules empowers the Registrar in Bankruptcy to postpone payment of a fee wholly or partially for a finite time in particular cases for special reasons, and to waive or remit a fee payable where payment would impose hardship on the payee. Rule 36 amended rule 183 to make it clear that the Registrar may waive, postpone or remit fees which are payable to the office of the Registrar only.
Rule 36 - Rule 202 (Computation of time)
Rule 202 of the Bankruptcy Rules which computed periods of time for the purposes of the Act overlapped with section 36 of the Acts Interpretation Act 1901. Rule 37 repealed rule 202 to ensure consistency with that Act.
Rule 37 - Schedule 1 (Forms)
Schedule 1 to the Bankruptcy Rules prescribes a number of forms, and rule 38 repealed Forms 26, 27 and 28. Forms 26, 27 and 28 were the forms of application for order of discharge, notice of application for discharge and notice of intention to oppose application for order or discharge provided for under rules 51, 52 and 55 of the Bankruptcy Rules. Those rules were amended by rules 13 and 14 to improve procedures in relation to applications to the court.
Rule 38 - Schedule 5 (Prescribed countries: paragraph 29(5)(b) of the Act)
Section 29 of the Act provides that the courts of prescribed foreign countries may act in aid of Australian courts having jurisdiction in bankruptcy, and requires the Australian courts to act in aid of the courts of prescribed countries in bankruptcy matters. Paragraph 29(5)(b) of the Act enables countries to be prescribed for this purpose. Rule 38 amended Schedule 5 to provide for mandatory assistance by Australian courts in aid of the Royal Court of Jersey.