Commonwealth Numbered Regulations - Explanatory Statements

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BANKRUPTCY RULES (AMENDMENT) 1994 NO. 307

Statutory Rules 1994 No. 307

Issued by the authority of the Minister for Justice

Bankruptcy Act 1966

Bankruptcy Rules (Amendment)

The Bankruptcy Rules (Amendment) made amendments to the Bankruptcy Rules consequential upon the making of Bankruptcy Rules No. 214 of 1994.

Authority

Subsection 315(1) of the Act provides that the Governor-General may make rules prescribing matters that are required or permitted to be prescribed or that are necessary or convenient to be prescribed for the carrying out or giving effect to the Act.

Details of rules

Commencement

These Rules commenced on gazettal.

Rule 1 - Amendment

Rule 1 provided that the Bankruptcy Rules were amended as set out in these rules.

Rule 2 - Rule 182 (Fees and percentages payable to the Official Trustee)

Statutory Rules No. 214 of 1994, which came into operation on 1 July 1994, amended rule 182 of the Bankruptcy Rules by increasing fees payable to the Official Trustee and so giving effect to those recommendations of the Report of the joint Attorney -General's Department and Department of Finance Phase 1 Review of the Insolvency and Trustee Service, Australia (the Report) which were accepted by the Government,

Rule 182 fixes the fees and percentages payable to the Official Trustee as remuneration for the administration of a bankrupt estate. Subrule 182(2) provides that, where the Official Trustee acts as trustee of the estate of a bankrupt, or of a deceased person, in accordance with Part XI of the Act, or takes control of the property of a debtor by virtue of a Court direction, it is entitled to a fee calculated in accordance with the subrule. The subrule prescribes the fees payable to the Official Trustee on a scale based on the "prescribed amount" in respect of an estate or a debtor. Fees payable to the Official Trustee are fixed where the "prescribed amount" of the estate or debtor does not exceed $2000, exceeds $2,000 but not $50,000, or is in excess of $50,000, as is prescribed respectively in paragraphs 182(2)(d), (c) and (f). Subrule 182(4) defines "prescribed amount" for the purposes of subrule 182(2).

The Report had noted that the minimum fee of $1,000, prescribed in subrule 182(2), was set in 1981. If the amount had been indexed in line with the CPI, the minimum fee would currently be approximately $2,210. Accordingly, rule 9 of Statutory Rules No. 214 of 1994 introduced a minimum fee of $2,000 by amending paragraphs 182(2)(d) and (e) to omit the sum of $1,000, wherever occurring, and to substituting the sum of $2,000.

No consequential amendment of paragraph 182(2)(f), however, was made. Paragraph 182(2)(f) provides that where the "prescribed amount" in respect of the estate or debtor exceeds $50 000, the Official Trustee is entitled to receive a fee equal to the sum of $8,350 and an amount equal to 10% of the amount by which the prescribed amount exceeds $50,000.

The sum of $8,350 in paragraph 182(2)(f) was derived from levying the former minimum fee of $1,000 on the first $1,000 and 15% on $49,000. Without the sum of $9,200 (ie $2,000 + 15% of $48,000) being substituted for $8,350, anomalies occurred. For example, the fee on a prescribed amount of $49,000 was greater than the fee on a prescribed amount of $51,000. This anomaly was cured by amending paragraph 182(2)f) to substitute the sum of $8,350 for $9,200. The change was effected by rule 2 of the Statutory Rules.