Annotated Bankruptcy Act 1966 [6th edition.] 9780409339505, 0409339504

Table of contents :
Quick Reference Directory
Full Title
Copyright
Publisher’s note
Features of this Book
Table of Cases
Table of Statutes
Table of Contents
Bankruptcy Act 1966
Table of Provisions
Table of Amendments
Application and Transitional Provisions
Introduction to the Bankruptcy Act 1966
Pt I — Preliminary
Pt IA — Interpretation
Pt IB — Application of Act
Pt II — Administration
Pt III — Courts
Pt IV — Proceedings in Connection with Bankruptcy
Pt V — Control over Person and Property of Debtors and Bankrupts
Pt VI — Administration of Property
Pt VII — Discharge and Annulment
Pt VIII — Trustees
Pt IX — Debt Agreements
Pt X — Personal Insolvency Agreements
Pt XI — Administration of Estates of Deceased Persons in Bankruptcy
Pt XIA — Farmers’ Debts Assistance
Pt XII — Unclaimed Dividends or Moneys
Pt XIII — Evidence
Pt XIV — Offences
Pt XV — Provisions Relating to the Bankruptcy (Estate Charges) Act 1997
Pt XVI — Miscellaneous
Schedules
Bankruptcy (Estate Charges) Act 1997
Table of Provisions
Table of Amendments
Transitional Provisions
Pt 1 — Preliminary
Pt 2 — Interest Charge
Pt 3 — Realisations Charge
Pt 4 — Miscellaneous
Bankruptcy (Registration Charges) Act 1997 [Repealed]
Table of Provisions
Table of Amendments
Bankruptcy (Registration Charges) Act 1997
Bankruptcy Regulations 1996
Table of Provisions
Table of Amendments
Pt 1 — Preliminary
Pt 2 — Administration
Pt 3 — Courts
Pt 4 — Proceedings in Connexion with Bankruptcy
Pt 5 — Control over Person and Property of Debtors and Bankrupts
Pt 6 — Administration of Property
Pt 7 — Discharge and Annulment
Pt 8 — Trustees
Pt 9 — Debt Agreements
Pt 10 — Personal Insolvency Agreements
Pt 11 — Administration of Estates of Deceased Persons in Bankruptcy
Pt 12 — Unclaimed Dividends or Moneys
Pt 13 — National Personal Insolvency Index
Pt 14 — Offences under the Act
Pt 15 — Registration of Registered Trustees [Repealed]
Pt 15A — Provisions Relating to the Bankruptcy Charges Acts
Pt 16 — Miscellaneous
Schedule 1 — Forms
Schedule 2 — Modifications under Section 76A of the Act — Meetings of Creditors under Division 6 of Part IV of the Act
Schedule 3 — Paragraph 109(1)(a) of the Act — Order of Payment of First Priority Debts
Schedule 4 — Modifications of the Fringe Benefits Tax Assessment Act 1986
Schedule 4A — Performance Standards for Trustees (including Controlling Trustees)
Schedule 5 — Modifications under Section 185A of the Act — Meetings to Consider Proposals Relating to Debt Agreements [Repealed]
Schedule 6 — Modifications in Relation to Part X of the Act
Schedule 7 — Modifications under Part XI of the Act — Administration of Estates of Deceased Persons
Schedule 8 — Information on the National Personal Insolvency Index
Schedule 9 — Official Receiver’s Fees [Repealed]
Schedule 10 — Official Trustees’ Fees [Repealed]
Federal Court (Bankruptcy) Rules 2005
Table of Provisions
Table of Amendments
Pt 1 — Preliminary
Pt 2 — General
Pt 3 — Bankruptcy Notices
Pt 4 — Creditor’s Petitions
Pt 5 — Debtor’s Petitions
Pt 6 — Examinations
Pt 7 — Annulment or Review of Bankruptcy
Pt 8 — Trustees
Pt 9 — Debt Agreements
Pt 10 — Personal Insolvency Agreements
Pt 11 — Administration of Estates of Deceased Persons
Pt 12 — Warrants
Pt 13 — Costs
Pt 14 — Proceedings under Cross-border Insolvency Act
Schedule 1 — Forms
Schedule 2 — Powers of the Court that may be Exercised by a Registrar
Schedule 3 — Notes to these Rules
Bankruptcy Forms
Contents
Bankruptcy Regulations 1996 Schedule 1 — Forms
Insolvency and Trustee Service Approved Forms
Federal Court Bankruptcy Forms
Costs and Fees
Contents
Bankruptcy Act — Table
Bankruptcy Rules
Federal Court Rules
Index

Citation preview

Bankruptcy Act

Quick Reference Directory This directory should be used to quickly locate legislation in this volume.

Bankruptcy Regulations

Federal Court (Bankruptcy) Rules

To use the directory, place the right thumb on the outer edge of this page against the required legislation. Then fold back the remaining pages to align the directory with the corresponding page tab. For content not included in the directory, consult the full subject index.

Forms

Costs and Fees

LEXISNEXIS ANNOTATED ACTS

BANKRUPTCY ACT 1966

Legislation current as at 17 October 2014 unless otherwise specified

PAUL W NICHOLS RFD, BA, LLM (WA) Barrister-at-Law (WA, NSW and SA)

6TH EDITION

LexisNexis Butterworths Australia 2015

AUSTRALIA

ARGENTINA AUSTRIA BRAZIL CANADA CHILE CHINA CZECH REPUBLIC FRANCE GERMANY HONG KONG HUNGARY INDIA ITALY JAPAN KOREA MALAYSIA NEW ZEALAND POLAND SINGAPORE SOUTH AFRICA SWITZERLAND TAIWAN

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UNITED KINGDOM USA

LexisNexis UK, LONDON, EDINBURGH LexisNexis Group, New York, NEW YORK LexisNexis, Miamisburg, OHIO

ISSN 1321-3962 ISBN 9780 409 339505 ISBN 9780 409 339512 ebook ©2015 Reed International Books Australia Pty Limited trading as LexisNexis This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers. Printed in China. Visit LexisNexis Butterworths at www.lexisnexis.com.au

Publisher’s note Legislation The publisher, authors, contributors and endorsers of this publication each excludes liability for loss suffered by any person resulting in any way from the use of, or reliance on, this publication. © LexisNexis. The legislation reproduced in this work does not purport to be an official or authorised version.

Cross references The text of this book has been extracted from volume 4 of the looseleaf service Practice & Procedure High Court and Federal Court of Australia and follows the internal arrangement of the looseleaf service. This book therefore contains cross-references to other areas of the looseleaf service that have not been extracted. Where this occurs, reference should be made to Practice & Procedure High Court and Federal Court of Australia.

Features of this Book Introduction This volume of LexisNexis Annotated Acts provides practitioners and students with a guide to Australian bankruptcy legislation. Reproduced are the Bankruptcy Act 1966, annotated and explained in a comprehensive and detailed commentary, the Bankruptcy (Estate Charges) Act 1997 and the Bankruptcy (Registration Charges) Act 1997 [repealed]; the Bankruptcy Regulations and Forms; ITSA Approved Forms; and the Federal Court (Bankruptcy) Rules 2005.

Legislation tabs This edition includes a Quick Reference Directory which groups legislation thematically and provides a grey-shaded tab on the side of the legislation. To use the Quick Reference Directory, simply go to the relevant subject area and under that tab you will find the relevant legislation.

Currency of legislation The legislation reflects the law as amended to 17 October 2014.

Legislative histories To find out the full name and date of assent and commencement of an amending Act, or the number and date of gazettal and commencement of an amending Rule, turn to the relevant Table of Amendments in front of the Act or Regulations. The Table of Amendments gives a complete list of all amendments to the legislation since the date of commencement or, where the Act is based on an official reprint, the date of the official reprint.

Paragraph numbers The text in this book has been extracted from the four-volume looseleaf service Practice & Procedure High Court and Federal Court of Australia. Hence the paragraph numbers appear as they do in the looseleaf publication.

Commentary The Act has been annotated by Paul Nichols, with contributions by Garry Bigmore QC and Peter Fary in earlier editions, to provide an overview of the

legislation and a clear analysis of the Act’s more complex provisions and important case law. General commentary on a section of the Act General commentary on a given section of the Act is located at the end of the section. This provides an overview of the section and links the topic under discussion to related areas. It also describes the background and purpose of the legislation, outlining the structure and general operation of the section. Detailed commentary on a subsection of the Act Where relevant, detailed commentary on a subsection follows the general commentary.

How to find commentary on a particular topic Information within the commentary can be researched according to the topic, case law or provision of the legislation by using the: Table of Contents This table appears at page vii. Table of Cases This table appears at page xvii. Index The index appears at page 1215. Tables of Provisions Located before the Act and the Regulations, the tables show the division of the legislation into parts, divisions and subdivisions, and include the title of every section or regulation. This is a convenient starting point if you need an overview of the structure of the legislation to find commentary on a particular topic.

Historical notes Where a section or subsection of an Act, or a regulation or subregulation, schedule or form has been amended, an historical note (compiled by the

editor) has been inserted in square brackets in smaller type immediately beneath that provision. This historical note details the history of the provision as amended. It gives the number of the amending Act or subordinate legislation and the section or regulation which brings about the amendment. Following the abbreviation “opn” is the date on which the amendment came into operation. For example: [subs (1) am Act 79 of 1993 s 3 and Sch 1(17)(c), opn 2 Feb 1998]

This means that subsection (1) of the respective section was amended by s 3 and Sch 1(17)(c) of the amending Act 79 of 1993, and the amendment commenced on 2 February 1998. The Table of Amendments also indicates the currency of the legislation and should always be consulted for accuracy.

Cross-references The commentary contains internal cross-references to sections, subdivisions, divisions and parts of the Act and to other paragraphs in the book where the same or related issues are discussed in more detail and in another context. It also contains cross-references to cases, other Acts and Regulations and other publications dealing with aspects of the issues under discussion.

Running heads Running heads at the top of each page indicate the section, regulation, clause, form or schedule and commentary set out on each page as follows: Left page:

s 116

Right page:

[81,860]

Left page:

reg 16.01

Right page:

[89,835]

BANKRUPTCY LEGISLATION BANKRUPTCY ACT 1966 BANKRUPTCY LEGISLATION BANKRUPTCY REGULATIONS 1996

[81,860] s 116 [89,760.15] reg 16.07

Butterworths Case Numbers and Media Neutral Citations

Citations in the style BC200002707 are Butterworths Case Numbers. These numbers are unique to each case and are used for identification and cross-referencing purposes within LexisNexis products and publications. Citations in the form [2008] FCA 1765 are Media Neutral Citations. These citations comprise the year of the decision, the court which handed down the decision, and the case number. A bracketed number which follows a Media Neutral Citation (for example, “at [14]”) is a reference to a specific paragraph in the judgment. Acronyms used in Media Neutral Citations include the following: ACompT HCA FCA FCAFC FamCA FMCA ACTSC NTSC NSWSC NSWCA NSWCCA QSC QCA SASC TASSC VSC VSCA WASC WASCA

Australian Competition Tribunal High Court of Australia Federal Court of Australia Federal Court of Australia Full Court Family Court of Australia Federal Magistrates Court of Australia ACT Supreme Court Northern Territory Supreme Court New South Wales Supreme Court New South Wales Court of Appeal New South Wales Court of Criminal Appeal Queensland Supreme Court Supreme Court of Queensland, Court of Appeal Supreme Court of South Australia Supreme Court of Tasmania Supreme Court of Victoria Supreme Court of Victoria, Court of Appeal Supreme Court of Western Australia Supreme Court of Western Australia, Court of Appeal

Table of Cases 33 South Pty Ltd v Fitzgerald [2008] FCA 1960; BC200811684 …. [91,560.5] 3M Australia Pty Ltd v Watt (1984) 2 ACLR 203; 2 ACLC 621 …. [81,650.70] A v B [1969] NZLR 534 …. [83,390.5] A Bankruptcy Notice, Re; Ex parte The Official Receiver [1895] 1 QB 609 …. [80,915.13] A Debtor, Re [1939] 1 Ch 251] …. [80,970.10.5] A Judgment Debtor, 530 of 1908, In Re [1908] 3 KB 474 …. [80,915.18B] A-Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 17 ACSR 176; 120 FLR 277 …. [80,910.60] Aarons, Re; Ex parte The Bankrupt (1978) 19 ALR 633 …. [84,360.5] AB Pty Ltd v Australian Crime Commission (2009) 175 FCR 296; 107 ALD 591 …. [81,531.20] Abbas, Re; Ex parte Official Trustee in Bankruptcy (1995) 57 FCR 140 …. [82,310.15] Abbott, Re [1983] 1 Ch 145; [1982] 3 All ER 181; [1982] 3 WLR 86 …. [81,884.10], [81,885.20], [81,889.25], [81,890.40], [81,900.30] ABC2 Group Pty Ltd; Commonwealth, The v (2008) 69 ACSR 228 …. [80,120.37] Abela v Victoria [2010] FMCA 172; BC201001261 …. [80,910.17] Abeyratne v Trkulja (1998) 90 FCR 253 …. [80,770.30], [80,770.45] Abignano v Wenkart BC9806185 …. [80,915.220] Abigroup Ltd v Abignano (1992) 39 FCR 74; 112 ALR 497 …. [80,910.50], [80,910.60], [80,910.180] Acciarito v Enfield Bond Pty Ltd [2009] FMCA 1147; BC200910966 …. [80,910.137] Accounts Control Management Services Pty Ltd v Elmer [2007] FMCA 733; BC200703801 …. [82,865F.10]

Adamopoulos v Olympic Airways SA (1990) 95 ALR 525 …. [80,770.10], [80,970.10], [81,015.95] Adams v Lambert (2006) 225 ALR 306; 80 ALJR 679 …. [80,915.16], [80,915.18A], [80,915.20], [80,915.30], [80,990.20] — v Northern Plumbing (NQ) Pty Ltd [2010] FMCA 224; BC201010368 …. [80,910.60] Adams; R v (1935) 53 CLR 563 …. [84,325.5] Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360; 152 ALR 418 …. [81,550.50] Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100 …. [80,450.5], [80,455.10], [80,765.50], [82,000.10], [82,470.5], [82,795.5] Agostino, Re; Ex parte Jackson (1983) 78 FLR 142 …. [81,175.10], [82,390.5] Agrillo, Re; Ex parte Bankrupt (1976) 29 FLR 484 …. [80,910.95], [80,975.50] Agushi, Re; Ex parte Farrow Mortgage Services Pty Ltd (in liq) (1994) 126 ALR 704 …. [80,770.70] — v Cole (1992) 8 ACSR 549 …. [83,145.30] Agusta Pty Ltd v Provident Capital Pty Ltd (2012) 16 BPR 30,397 …. [80,120.23] Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 …. [80,770.10], [80,915.85], [80,970.10], [81,015.55], [81,015.95], [81,015.170], [81,015.95] Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; 106 ALR 11 …. [80,750.20], [81,025.30] Air Canada v M & L Travel Ltd (1993) 108 DLR (4th) 592 …. [81,884.1] Airservices Australia v Ferrier (1996) 185 CLR 483 …. [81,895.70], [81,895.80] Aker (P) Flowerbulbs Pty Ltd v Coulter (2004) 140 FCR 410; 212 ALR 606 …. [80,970.12] Akeroyd’s Settlement, Re [1893] 3 Ch D 363 …. [84,713.5] AL Underwood Ltd v Bank of Liverpool [1924] 1 KB 775 …. [81,670.55] Alafaci, Re; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262 …. [80,450.5], [82,375.10], [82,585.5], [82,645.10]

Alam’s Deed of Arrangement, Re (1932) 4 ABC 98 …. [81,405.20] Alcatel Australia Ltd v PRB Holdings Pty Ltd (1998) 27 ACSR 708 …. [80,910.105] Alexander v Ajax Insurance [1956] VLR 436 …. [81,650.1] — v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 …. [81,015.95], [81,015.210] — v Pargiter (1998) 86 FCR 108 …. [80,915.215] — v Perpetual Trustees WA Ltd (2003) 216 CLR 109; 204 ALR 417 …. [81,250.17] Alexander Korda Film Productions Ltd v Columbia Pictures Corporation Ltd [1946] Ch 336; [1946] 2 All ER 424; (1946) 175 LT 430 …. [82,000.35] Aley, Re; Ex parte Sweeney (1996) 66 FCR 101 …. [81,900.30] — v Aley (1996) 63 FCR 294 …. [81,900.30] Aliferis v Kyriacou (2000) 1 VR 447; 179 ALR 477 …. [81,650.7] Allanson v Midland Credit Ltd (1977) 16 ALR 43; 30 FLR 108 …. [81,240.25], [81,240.35] Allen v Snyder [1977] 2 NSWLR 685 …. [81,860.11] Allesch v Maunz (2000) 203 CLR 172; 173 ALR 648 …. [83,390.10] Alliance Bank v Broom (Ltd) (1864) 2 Dr & Sm 289 …. [81,884.10] Almassy, Re (1999) 92 FCR 597 …. [82,310.15] Alsop Wilkinson (a firm) v Neary [1995] 1 All ER 431; [1996] 1 WLR 1220 …. [82,000.40] Alton v Harrison (1869) LR 4 Ch App 622 …. [81,889.10] Alty, Re; Ex parte Muir (1985) 9 FCR 190 …. [83,140.10], [83,190.5] Aluma-Lite Products Pty Ltd v Reynolds [2010] FMCA 122; BC201001137 …. [80,910.26] — v Simpson [1999] FCA 1105; BC9904983 …. [80,910.50], [80,975.100] Alwyn’s Trusts, Re (1873) LR 16 Eq 585 …. [84,713.5] Amadio, Re (1978) 24 ALR 455; 46 FLR 147 …. [80,750.5], [80,750.10], [83,135.10], [83,150.5] Amalgamated Wireless (A’asia) Ltd v McDonnell Douglas Corp (1987) 16 FCR 238; 77 ALR 537 …. [84,760.20] Ambrose (Trustee), in the matter Peter Athanasas (Bankrupt) (No 2) [2008]

FCA 1016; BC200805216 …. [81,550.5], [81,550.35], [81,550.75] Ambrose (Trustee), Re; Poumako (Bankrupt) v Poumako (No 3) [2013] FCA 22; BC201300193 …. [81,884.1], [81,884.14] American Express Australia Ltd v Viscariello [2007] FMCA 1574; BC200708365 …. [80,910.17] American Express International Inc v Held (1999) 87 FCR 583; 168 ALR 185 …. [80,915.16], [80,915.140] Ames v Birkenhead Docks Trustees (1855) 20 Beav 332; 52 ER 630 …. [81,005.30] Anasis, Re; Ex parte Total Australia Ltd (1985) 11 FCR 127; 63 ALR 493 …. [80,800.20] Anbar (in bankruptcy) v Linfox Australia Pty Ltd [2010] FMCA 717; BC201007499 …. [82,310.30] Anderson v Peldan (2004) 212 ALR 291; 183 FLR 354 …. [80,735.4], [80,755.5], [81,889.26] Anderson Rice (a firm) v Bride (1995) 61 FCR 529; 132 ALR 550 …. [80,975.35] Anderson, Re; Ex parte Alexander (1927) 27 SR (NSW) 296 …. [80,910.130] Anderson, Re; Ex parte Official Receiver (1937) 10 ABC 284 …. [81,550.20], [81,550.60] Andrew v Zant Pty Ltd [2004] FCA 1716; BC200409334 …. [81,884.8], [81,889.10] Andrew, Re (1877) 2 Juris Rep (NZ) 257 …. [83,125.15] Andrews, Re (1958) 18 ABC 181 …. [81,550.5], [81,550.20], [82,640.25] Andrews, Re; Ex parte Manning (1966) 8 FLR 56 …. [80,910.20] Angus Property & Development Pty Ltd v Dwyer [2007] FMCA 528; BC200702669 …. [81,015.170] Anmi Pty Ltd v Williams (1981) 36 ALR 171; 52 FLR 309 …. [81,795.5] Anne v Ask Funding Ltd [2013] FCCA 1271 …. [80,915.12] — v — [2014] FCCA 1153; BC201400627 …. [80,910.60] Anscor Pty Ltd v Clout (Trustee) (2004) 135 FCR 469 …. [81,884.1], [81,885.23] Ansett Australia Ltd v Travel Software Solutions Pty Ltd (2007) 65 ACSR

47; 214 FLR 203 …. [81,650.1] Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 …. [81,980.10] Ansett, Re; Ex parte Ansett v Pattison (1995) 56 FCR 526 …. [82,113Z.10], [82,170.15], [82,187.10] Ansett, Re; Pattison v Crosswell BC9800905 …. [81,885.25] Anthony Edward Millar, Re; Ex parte Commonwealth Development Bank of Australia (1993 unreported) …. [80,970.10.5] Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 …. [81,865.3] Antoun v R (2006) 224 ALR 51; 80 ALJR 497 …. [81,550.75] Aravanis v Kelly; Estate of Thomson [2012] NSWSC 733; BC201204800 …. [82,800.5] Aravanis (trustee) Re Gillespie (bankrupt) v Gillespie [2014] FCA 630; BC201404670 …. [81,884.5] Arbalis v Roth (No 2) [2009] FMCA 184; BC200901443 …. [80,990.20] Arcuri v Jones [2003] FCA 68; BC200300251 …. [81,405.20] Armstrong v Worrells Solvency And Forensic Accountants [2013] FCCA 1359 …. [82,390.12] Arnautovic & Sutherland t/as Jirsch Sutherland & Co v Cvitanovic (as Trustee of Bankrupt Estate of Rosee) [2011] FCA 809; BC201105460 …. [81,240.7], [81,895.50] Arnold v Queensland (1987) 13 ALD 195; 73 ALR 607 …. [80,970.25] Arnoya Holdings Pty Ltd v Metway Leasing Ltd [1999] NSWCA 120 …. [81,860.15] Arthur v Public Trustee (1988) 90 FLR 203 …. [81,240.10] Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; 33 ALR 631 …. [81,860.11], [81,900.30], [82,310.7] Ashby, Re; Ex parte Wreford [1892] 1 QB 872 …. [84,713.5] Ashdown v Kirk [1999] FCA 1263; BC9905779 …. [81,015.140] Ashmere Cove Pty Ltd v Beekink (No 2) (2007) 244 ALR 534; 14 ANZ Ins Cas 61-741 …. [81,865.5] Ashton, Re; Ballard v Ashton [1920] 2 Ch 481 …. [81,860.20]

Asset Risk Management and Others, Re (1995) 130 ALR 605 …. [82,640.25] AssetInsure Pty Ltd v New Cap Reinsurance Corporation Ltd (In liq) (2006) 225 CLR 331 …. [81,865.3] Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588; 171 ALR 568 …. [81,884.1] Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250 …. [82,640.25] Associated Midland Corp Ltd v Bank of New South Wales [1983] 1 NSWLR 533 …. [81,670.55] Associated Northern Collieries; R v (1910) 11 CLR 738; 17 ALR 359 …. [81,005.45] Athanassopoulos, Re (1982) 41 ALR 603 …. [82,475.5] Atkinson v Oakleigh Holdings Pty Ltd [2000] FCA 1547; BC200006609 …. [80,915.5] Attorney-General (Hong Kong) v Reid [1994] 1 AC 324; [1994] 1 NZLR 1 …. [81,860.8] Augustyn v Putnin (1988) 83 ALR 514 …. [83,390.1] Austin v Keele (1987) 72 ALR 579 …. [81,860.11] Austral Brick Co Pty Ltd v Daskalovski BC9803074 …. [80,800.20], [81,015.80], [82,310.5] Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; 66 ALR 577 …. [83,750.35] Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270; 172 ALR 28 …. [82,115.1] Australia and New Zealand Banking Group v Coutts (2003) 201 ALR 728 …. [80,915.20] Australia and New Zealand Banking Group Ltd v Elferkh (1999) 92 FCR 195 …. [80,990.40] — v Hubner [1999] FCA 1346; BC9906277 …. [80,975.90], [80,990.40] — v Menso (2006) 205 FLR 169 …. [80,915.16] — v Prestia [2001] FCA 792; BC200103597 …. [81,795.25] Australian and New Zealand Banking Group Pty Ltd v Foyster [2000] FCA 400; BC200001377 …. [81,015.80]

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 …. [81,015.95] Australian Central Credit Union Ltd v Laing (2001) 113 FCR 363 …. [80,915.46] Australian Competition & Consumer Commission (ACCC) v Australian Securities and Investments Commission (ASIC) (2000) 174 ALR 688; 34 ACSR 232 …. [81,760.10] Australian Competition and Consumer Commission v Black on White Pty Ltd (2004) 138 FCR 314; (2004) ATPR 41-997 …. [81,650.1] Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483; [1966] ALR 387 …. [83,750.35] Australian Litigation Fund Pty Ltd v Mearns (2005) 227 ALR 721 …. [81,000.10] Australian Mutual Provident Society v Gregory (1908) 5 CLR 615 …. [80,745.5] — v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326; (1991) ASC 56-109; (1991) ATPR 41-137 …. [80,910.125] Australian Postal Corp v Lutak (1991) 21 NSWLR 584 …. [81,860.8] Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd (1994) 49 FCR 334; 121 ALR 626; 12 ACLC 364 …. [81,860.8] Australian Steel Company (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68 …. [80,915.16], [80,915.18A], [80,915.18B], [80,915.30], [80,915.35], [80,915.45], [80,915.46], [80,915.50], [80,915.140] Australian Securities and Investments Commission v Plymin (2003) 175 FLR 124 …. [80,120.50] — v Wiggins (1998) 90 FCR 314; 30 ACSR 190 …. [81,005.10] Australian Workers Union v Bowen (1946) 72 CLR 575 …. [80,975.30] Authentico Transnational Pty Ltd v Nagpal [2004] NSWSC 12; BC200400880 …. [84,305.10] Autron Pty Ltd v Benk (2011) 195 FCR 404; 280 ALR 417 …. [80,915.10], [80,915.13], [82,310.25] Axarlis v Pets Paradise Franchising (SA) Pty Ltd (2010) 183 FCR 521; 267 ALR 412 …. [80,910.125]

Ayre, Re; Ex parte DCT (1995) 130 ALR 648 …. [80,765.30], [80,765.65] Ayres v Evans (1981) 39 ALR 129; 51 FLR 395 …. [80,745.5] — v — (1981) 56 FLR 235 (FC) …. [80,745.5] Ayres, Re; Ex parte Evans (1981) 51 FLR 395 …. [80,745.5] Azoulay, Re; Ex parte Andrew v Townsend (1989) 90 ALR 37 …. [81,900.30] Bagot v Oughton (1717) 1 P Wms 347; 24 ER 420 …. [81,240.23] Bagshaw v Scott [2002] FCAFC 362; BC200207339 …. [81,240.12], [81,240.15], [81,240.20] Bailey v Johnson (1872) LR 7 Ex 263 …. [82,315.10] — v MCH Building Pty Ltd [2011] FMCA 124; BC201104584 …. [80,910.125], [80,915.55] Bailey, Re [1927] GLR 470 …. [80,910.166] Bakamovic v Investec Bank (Aust) Ltd [2008] FMCA 1513 …. [81,015.125] Baker v Campbell (1983) 153 CLR 52 …. [81,550.50] — v Official Trustee in Bankruptcy BC9507272 …. [81,884.1], [81,890.50] — v Paul [2012] NSWSC 392; BC201203326 …. [81,240.25], [81,250.6] — v Perpetual Trustee Co Ltd (2012) 204 FCR 593 …. [81,015.56] Baker & Landon (2010) 43 Fam LR 675; 238 FLR 210 …. [80,120.17] Baldry v Jackson [1976] 1 NSWLR 19 …. [84,730.10] — v — [1977] 1 NSWLR 494 …. [81,650.2] Balfour’s Settlement, Re [1938] 1 Ch D 928 …. [84,713.5] Balhorn v Colby (1982) 45 ALR 174 …. [80,800.10] Balhorn, Re; Ex parte Balhorn and Official Trustee in Bankruptcy (1981) 39 ALR 223 …. [81,975.5], [82,270.5] Ball, Re; Ex parte Commercial Banking Co of Sydney Ltd (1980) 31 ALR 16 …. [81,650.45] Ballan Pty Ltd (in liq) v Hood (1994) 13 WAR 385 …. [81,895.70] Banditt v R (2005) 223 ALR 633; 80 ALJR 421 …. [81,650.7], [82,275.10] Bank of Australasia v Hall (1907) 4 CLR 1514 …. [80,120.50], [81,015.80], [81,895.30], [81,895.40] Bank of Credit and Commerce International SA, Re (No 8) [1997] 4 All ER 568 …. [81,015.125]

Bank of Melbourne Ltd v Hannan (1997) 78 FCR 249 …. [80,915.16], [80,915.100] Bank of New South Wales v Commonwealth (1948) 76 CLR 1 …. [80,970.60] Bank of Western Australia Ltd v Loiterton (2006) 197 FLR 232 …. [80,990.20] Banque Commerciale SA (En Liquidation) v Akhil Holdings Ltd (1990) 169 CLR 279; 92 ALR 53 …. [82,113ZQ.10] Barclays Bank plc v O’Brien [1993] QB 109; [1992] 4 All ER 983; [1992] 3 WLR 593 …. [81,860.11] Barewa Oil & Mining NL (in liq) v Isim Mineral Development Pty Ltd (1981) 38 ALR 288 …. [81,650.1], [81,650.20], [81,650.25], [82,275.15] Barlaw Pty Ltd v Crouch [2011] FMCA 384; BC201105678 …. [82,645.12] Barne, Re; Ex parte Barne (1886) 16 QBD 522 …. [80,970.10] Barnes, Re; Ex parte Stapleton (1961) 19 ABC 126 …. [81,890.25] Barnett v Holmgreen [2009] FMCA 97; BC200900842 …. [80,910.150] Barry, Re (1930) 2 ABC 85 …. [81,655.5] Barter, Ex parte (1884) 26 Ch D 510 …. [84,713.5] Barton v DCT (Cth) (1974) 131 CLR 370; 48 ALJR 407 …. [80,170.5], [80,910.20], [81,884.8], [81,889.5], [81,889.10], [81,890.25] — v Official Receiver (1977) 13 ALR 283; 29 FLR 195 …. [81,550.45] — v — (1984) 4 FCR 380; 58 ALR 328 …. [81,884.1], [81,885.5], [81,890.35] — v — (1986) 161 CLR 75; 66 ALR 355 …. [81,885.20], [81,885.5], [81,889.25], [81,890.40], [81,900.30] Barton, Re (1980) 43 FLR 245 …. [80,750.5] Barton, Re; Ex parte Official Receiver v Barton (1983) 52 ALR 95; 76 FLR 223 …. [81,885.10], [81,885.15], [81,885.20], [81,885.25], [81,890.15], [81,890.20], [81,890.25] Barwick v Goodridge (2011) 255 FLR 245 …. [80,735.2], [81,250.6] Battenberg v Restrom (2006) 149 FCR 128 …. [80,970.35] Baulkham Hills Shire Council v Stankovic [2009] NSWCA 281; BC200908298 …. [81,240.20], [81,250.6]

— v Stankovic (No 6) [2010] NSWLEC 33; BC201001538 …. [80,120.27] Baumgartner v Baumgartner (1987) 164 CLR 137; 76 ALR 75 …. [81,860.11], [81,884.5], [81,884.12], [81,889.5] Baxter, Re; Ex parte Official Trustee in Bankruptcy (1986) FLC 91-715 …. [81,900.30] Bayliss, Re [1972] ALR 890; (1971) 19 FLR 14 …. [80,915.30] Bayliss, Re; Ex parte Official Trustee in Bankruptcy (1987) 15 FCR 167; 73 ALR 455 …. [80,000.5], [80,750.10], [82,090.10] Bayne v Baillieu (1907) 5 CLR 64 …. [80,770.10], [80,970.10], [81,015.55] — v Blake (No 2) (1909) 9 CLR 360 …. [81,015.110] BDT Holdings Pty Ltd v Piscopo [2009] FCA 151; BC200900944 …. [81,760.5], [81,760.10], [82,640.25] — v Piscopo (No 3) [2010] FCA 1480; BC201010234 …. [81,550.20] Beames v Rigby [2002] FCA 806 …. [81,015.95], [81,015.210] Beard v Prestige Baking Industries Pty Ltd, Re (1981) 36 ALR 307; 52 FLR 384 …. [83,135.10], [83,390.14] Beauchamp, Re; Ex parte Beauchamp [1904] 1 KB 572 …. [80,915.105] Bebro, Re [1900] 2 QB 316 …. [80,990.80] Bechara v Cross [2014] NSWCA 175; BC201404258 …. [81,240.25] Becher (dec’d), Re [1944] 1 Ch 78 …. [81,700.5] Beck Legal Pty Ltd v Shirreff [2010] FMCA 58; BC201001183 …. [81,015.65] Beckham v Drake (1849) 2 HLC 579; 9 ER 1213 …. [81,240.12], [81,860.9], [81,860.15] Beckwith v Pedler [1999] FCA 1312; BC9906135 …. [80,915.197] Beddoe: Downes v Cottam, In re [1893] 1 Ch 547 …. [82,470.45] Bedford, Re; Ex parte H.C.Sleigh (Qld) Pty Ltd (1967) 9 FLR 497 …. [80,915.18A], [81,015.60] Bedford: Ex parte Official Receiver, Re (1968) 12 FLR 309 …. [81,860.10], [81,860.11] Bega v RMB Australia Holdings Ltd [2012] FMCA 517; BC201204739 …. [80,915.57] Bell v Cribb [2013] WASC 32; BC201300448 …. [81,250.6]

Bellis, Re (1959) 20 ABC 80 …. [81,405.20] Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260 …. [81,240.7] Bendeich v Andresen [2000] FCA 61; BC200000152 …. [83,075.20], [83,075.25] Bendeich, Re (1994) 53 FCR 422; 126 ALR 643 …. [82,470.45] Bendel, Re; Ex parte Bendel v Pattison (1997) 80 FCR 123 …. [81,405.20], [81,425.10] Bendigo Bank Ltd v Demaria [2001] VSC 218; BC200104175 …. [82,640.2] — v Gard (1999) 92 FCR 560 …. [80,915.147] — v Scerri [1999] FCA 1215; BC9905567 …. [80,915.49], [80,915.75] — v Williams (2000) 98 FCR 377; 173 ALR 175 …. [80,915.147] Benjamin v GB Franchising (No 2) [2008] FMCA 364; BC200803060 …. [82,470.45] Bennell v American Express International Inc [2006] FCAFC 80; BC200604422 …. [80,915.30] Bennett v Gauge (1876) 35 LT 764 …. [82,275.25] Bent v Gough (1992) 36 FCR 204; 108 ALR 131 …. [80,765.65], [82,470.45] Benzon, Re; Bower v Chetwynd [1914] 2 Ch 68 …. [81,650.50] Beson v Dean BC9706376 …. [80,910.87], [80,910.90] Bethune v Newman (1996) 19 ACSR 99 …. [81,250.15], [81,520.25], [82,640.20], [82,640.25] — v Porteous (1892) 18 VLR 493 …. [91,560.5] Betts, Re; Ex parte Official Receiver [1901] 2 KB 39 …. [81,080.5] Bhagat v Global Custodians Ltd [2002] FCAFC 51; BC200200780 …. [80,910.125], [80,910.140], [80,910.145] — v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159; BC200001012 …. [82,470.45] Bienstein v Bienstein (2003) 30 Fam LR 488; 195 ALR 225 …. [80,735.6] Bilen, Re; Ex parte Sistrom (1985 unreported) …. [80,000.5] — BC8501292 …. [80,750.5], [81,884.21] Billson v Crofts (1873) LR 15 Eq 314 …. [84,713.5] Bird v Inland Revenue Cmr, Re [1962] 1 WLR 686 …. [80,970.60]

— v Johnson (1854) 18 Jur 976 …. [84,713.5] Bird, Re; Ex parte Azzopardi (1979) 39 FLR 277 …. [81,900.10] Bird, Re; Ex parte M & G Casabene (1979) 39 FLR 281 …. [81,895.10] BL & M Grollo Homes Pty Ltd v Comptroller of Stamps (Vic) [1983] 1 VR 445; (1982) 13 ATR 514; 82 ATC 4524 …. [81,885.23] Black v Robins [2008] FMCA 19; BC200800262 …. [80,915.10] Black, Re (1891) 1 BC (NSW) 70 …. [80,910.165] Blair v Inspector General in Bankruptcy (1994) 34 ALD 258 …. [82,113L.5] Blake, Re (1933) 6 ABC 85 …. [81,655.5] Blakeley, Re (1854) 4 De GM & G 881; 43 ER 752 …. [81,650.15] Bletchley Boat Co Ltd, Re [1974] 1 WLR 630 …. [81,550.20] Boaler v Power [1910] 2 KB 229 …. [81,240.12] Boensch v Pascoe [2007] FCA 1977; BC200711033 …. [82,645.10] Boglari v Coadys [2009] FCA 1398; BC200910688 …. [81,015.65] Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 …. [82,310.20], [82,310.25], [82,310.45] Bond v Rees Group [2014] FCA 430; BC201403151 …. [82,310.20] — v Trustee of Property of Bond (a bankrupt) (1994) 125 ALR 429 …. [82,113L.5], [82,113P.5], [82,113L.20] — v Tuohy (1995) 56 FCR 92; 128 ALR 595 …. [81,531.20], [81,531.35] Bond Corp Holdings Ltd v Sulan (1990) 3 WAR 49 …. [83,390.5] Bond, Re; Ex parte Bond v Caddy (No 1) (1994) 11 WAR 330; 115 FLR 152 …. [81,884.12], [82,113ZJ.5], [82,113ZK.5], [82,113ZL.5], [82,113ZM.5], [82,113ZM.10] — v Caddy (No 2) (1994) 11 WAR 345 …. [82,113ZK.5] Bond, Re; Ex parte Hong Kong Bank of Australia Ltd (1991) 33 FCR 426; 105 ALR 581 …. [80,915.90] Bond, Re; Ex parte Ramsay (1994) 54 FCR 394; 126 ALR 720 …. [81,520.5], [81,520.50], [81,520.55], [81,531.5], [81,550.45] Bonds Industries Ltd v Sing [1999] FCA 1055; BC9904427 …. [80,915.135] Boots, Re; Ex parte Official Receiver (1976) 12 ALR 427; 26 FLR 320 …. [81,795.25] — (1976) 26 FLR 320 …. [81,795.10]

Bora Homes Australia v AIM Site Hire Pty Ltd [2013] FCA 23; BC201300217 …. [81,015.105] Boral Montoro Pty Ltd v McLachlan [2007] FMCA 533; BC200702673 …. [82,390.12] Borg Warner v Zupan [1982] VR 437; (1981) 69 FLR 300 …. [81,650.1], [81,650.2] Boscolo v Botany Council BC9604945 …. [91,105.5] Boscolo, Re; Ex parte Botany Council (1996) 62 FCR 397; 136 ALR 623 …. [80,790.10], [81,860.10] Bosun Pty Ltd (in liq) v Makris (2003) 21 ACLC 666 …. [82,310.5] Bou Francis v Anderson (as trustee of the bankrupt estate of Sarkis Bou Francis) [2008] FCA 2006; BC200811740 …. [81,884.35] Boumelhem v Commonwealth Bank of Australia [2008] FCA 1568 …. [81,015.95] Bourke v Westpac Banking Corporation [2012] FCA 6; BC201200021 …. [80,800.12], [80,800.20] Bower v Hett [1895] 2 QB 51 …. [81,875.10] Bowmaker’s case [1951] Ch 313 …. [80,970.10.5] Boylan v Farthing [2000] FCA 575; BC200003064 …. [80,915.147] Boyley, Re (1952) 16 ABC 33 …. [80,000.40] Boys v Quigley (2002) 26 WAR 454; 41 ACSR 499 …. [81,005.45] BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; 45 LGRA 62; 16 ALR 363; 52 ALJR 20 …. [80,915.202] BPTC Ltd (in liq), Re (No 5) (1993) 10 ACSR 756; 11 ACLC 734 …. [81,005.45] Bradbury, Re; Ex parte R (1931) 3 ABC 204 …. [81,650.6] Brady v Stapleton (1952) 88 CLR 322; [1952] ALR 989; (1952) 26 ALJR 428 …. [81,884.1], [81,890.50] Brady, Re (1898) 19 LR (NSW) B & P 6 …. [80,910.165] Braithwaite; R v [1918] 2 KB 319; [1918] All ER Rep 1145 …. [89,760.15] Brall, Re; Ex parte Norton [1893] 2 QB 381 …. [81,884.1] Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213; [1966] ALR 81; (1966) 39 ALJR 410 …. [81,650.1]

Brandon v Robinson (1811) 18 Ves 429; 34 ER 379 …. [84,713.5] Brauch, Re; Ex parte Britannic Securities and Investments Ltd [1977] 3 WLR 354 …. [80,970.40], [80,970.60] Brauch, Re; Ex parte Brittanic Securities & Investments Ltd [1978] Ch 316 (CA) …. [80,970.60] Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317; 200 ALR 607 …. [80,910.17] Brebner v Bruce (1950) 82 CLR 161; [1950] ALR 811; (1950) 24 ALJR 383 …. [80,915.11] Breen v Williams (1996) 43 ALD 481; 138 ALR 259; 186 CLR 71 …. [81,525.20] Bride v Peat Marwick Mitchell [1989] WAR 383 …. [81,240.7] Bridge v Great Western Portland Cement & Lime Co Ltd (1932) 48 CLR 522 …. [80,910.15], [83,165.35] Brien v P & E Phontos (1999) 91 FCR 209 …. [80,770.45] Briggs, Re (1986) 12 FCR 310; 75 ALR 554 …. [80,000.5] Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] ALR 334; (1938) 12 ALJR 100 …. [81,015.60] Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 …. [81,015.170] Brindle, Re; Ex parte FB & FA McMahon Pty Ltd (1992) 35 FCR 506; 108 ALR 470 …. [80,120.20], [80,760.5], [81,760.10] Brink, Re; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433; 44 FLR 135 …. [80,910.125], [80,910.145], [80,910.150], [80,910.17], [80.915.19], [80,915.200], [80,915.210], [80,915.212] British Gold Fields of West Africa, Re [1899] 2 Ch 7 …. [81,650.2.3] Broadley v Inspector-General in Bankruptcy (2007) 97 ALD 797 …. [82,173.10], [87,653.5] Brogden, Re; Billing v Brogden (1888) 38 Ch D 546 …. [80,450.5], [82,375.10] Brooke v Pearson (1859) 27 Beav 181; 54 ER 70 …. [84,713.5] Brookfield v Yevad [2002] FMCA 82 …. [80,750.10] Brookfield & Septic Products Australia Pty Ltd (in liq) v Davey Products Pty Ltd BC9804970 …. [84,730.10]

Brooks v Heritage Hotel Adelaide, (1996) 20 ACSR 61 …. [80,120.50] Brott v Grey (2000) 181 ALR 617 …. [83,075.30] Broughton v Barker (1962) 1 SCR (NSW) Eq 78 …. [81,895.60] Broughton, Re (1887) 57 LT 8 …. [84,713.5] Brown v A Whistle & Co (1979) Pty Ltd [2011] FMCA 423; BC201104450 …. [82,865F.10], [91,370.5] — v Brook (1971) 125 CLR 275 …. [80,120.5] — v Heffer (1967) 116 CLR 344; [1968] ALR 89 …. [81,410.15] — v Petranker (1991) 22 NSWLR 717 …. [82,380.5] Brown, Re (1886) 32 Ch D 597 …. [80,000.75] Brown, Re; Ex parte Taylor v Queensland Electricity Commission (1988) 19 FCR 180; 83 ALR 141 …. [81,250.55] Browne, Re; Ex parte Spirulina Products Co Australia Pty Ltd (1985) 7 FCR 251 …. [80,915.49] Bruckland v Newsame (1808) 170 ER 1026 …. [80,975.30] Brunner, Re; Ex parte Official Trustee in Bankruptcy (1984) 2 FCR 6 …. [81,860.11], [81,885.20], [81,885.45] Brunninghausen v Glavanics BC9800779 …. [80,915.172] Bryant v Commonwealth Bank (1996) 90 LGERA 126; 134 ALR 460; 70 ALJR 306 …. [81,015.100] — v Commonwealth Bank of Australia (1994) 217 ALR 251 …. [80.915.19], [80,915.170], [80,915.197], [80,915.200] — v — (1997) 75 FCR 545 …. [81,860.15] — v — BC9502003 …. [80,990.20] Bryson v Pember [2013] FamCA 43; BC201350012 …. [81,240.50] Buckle, Re (1969) 15 FLR 460 …. [81,265.5], [81,975.5] Buckley and Bienefelt, Re; Ex parte James Hardie and Co Pty Ltd (1976) 13 ALR 291 …. [81,000.20] Buckton, Buckton v Buckton, Re [1907] 2 Ch 406 …. [82,000.40] Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307; BC200704737 …. [82,310.20], [82,310.25] Bullock v Goodluck (1983) 48 ALR 217 …. [81,860.15] Bunn, Re; Ex parte Bunn (1989) 20 FCR 393; 95 ALR 471 …. [80,975.120]

Buratovic, Re (1983 unreported) …. [81,885.35] Burch v Cone [2009] NSWSC 1430; BC200911479 …. [81,240.23] Bureau Interprofessional Des Vins De Bourgogne v Red Earth Nominees Pty Ltd [2002] FCA 588 …. [81,980.5] Burgess v Permanent Custodians Ltd [2010] FCA 986 …. [81,015.55] Burke v Chesterfield Australia Pty Ltd [2012] FMCA 10; BC201200068 …. [81,015.56] Burlock, Re; Burlock v DCT (1994) 49 FCR 522; 121 ALR 168 …. [83,085.10] Burmingham v Colman Francis Moloney trading as Davies Moloney [2011] FCA 1490; BC201110501 …. [81,250.60] Burns v McFarlane (1940) 64 CLR 108 …. [81,895.90] — v Stapleton (1959) 102 CLR 97 …. [81,895.5], [81,895.20], [81,895.70] Burns, Re (1894) 15 LR (NSW) B & P 1 …. [80,910.165] Burns, Re; Ex parte National Mutual Life Assn of Australasia Ltd (1992) 39 FCR 477; 117 ALR 174 …. [83,145.15], [83,145.20], [83,145.25], [83,145.30], [83,165.40] Butler v Craine [1986] VR 274 …. [81,860.11] Butler’s Trusts, Re (1888) 38 Ch D 286 …. [81,795.25] BWK Elders (Aust) Pty Ltd v White [2004] FCA 1611; BC200408493 …. [81,175.50] Byrnes v Kendle (2011) 243 CLR 253, 286-287 …. [81,240.23] Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 …. [80,915.85], [80,915.197] Caboche v Ramsay (1993) 119 ALR 215; 27 ATR 479 …. [84,713.5] Caddies, Re; Ex parte Stapleton (1962) 19 ABC 155 …. [81,650.6] Caddy v McInnes (1995) 58 FCR 570; 131 ALR 277 …. [81,890.15], [81,890.30], [81,890.35], [81,890.40], [81,890.50] Cain v Whyte (1933) 48 CLR 639; 6 ALJR 457 …. [80,910.125], [81,015.55], [81,015.80], [81,015.97], [81,015.100], [81,240.16] Calderon (1977), Re (1977 unreported) …. [82,310.5] Caldwell v Bridge Wholesale Acceptance Corp (Australasia) Ltd (1993) 6 BPR 13,359 …. [81,240.23]

Calse v Claridge (1881) 7 QBD 516 …. [83,360.5] Calverley v Green (1984) 56 ALR 483; 9 Fam LR 940; 155 CLR 242 …. [80,750.6], [81,240.23], [81,860.11], [81,884.5] Calvert, Re [1899] 2 QB 145 …. [81,760.10] Cameron v Cole (1944) 68 CLR 571; [1944] ALR 130; (1944) 17 ALJR 397 …. [82,310.5] — v Holt (1980) 142 CLR 342; 28 ALR 490 …. [83,390.15] Campbell v Metway Leasing Ltd (2001) 188 ALR 100 …. [81,250.20] Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557; 153 ALR 163 …. [81,884.8], [81,889.10], [81,889.3], [81,890.25], [81,890.35], [81,890.5] Cannane (J) Pty Ltd v Vouris (1995 unreported) …. [81,890.35] Cant, Re; Ex parte Smith and Shirlaw (1975) 7 ALR 399 …. [83,395.5] Canty v Agency Printing (Aust) Pty Ltd [2010] FMCA 174; BC201001622 …. [80,765.80], [80,915.30] Capital Finance Australia Ltd v Vellar [2012] FMCA 285; BC201202061 …. [80,735.6], [80,800.20] Capital Finance Australia Pty Ltd v Nathan [2008] FMCA 1363 …. [81,015.140] Capsanis, Re; Capsanis v Owners - Strata Plan 11727 [2000] FCA 1262; BC200005275 …. [80,910.17], [80,910.125], [80,910.150], [80,915.212] Carney, Re (1983) 77 FLR 97 …. [80,910.168] Carratti v Weininger [2007] FMCA 415; BC200702191 …. [81,015.60] Carson, Re; Ex parte Carson (1960) 19 ABC 108 …. [84,370.5] Carter v Kennedy [2012] FMCA 1229; BC201210429 …. [81,015.20] — v Scotney [2014] FCCA 697 …. [82,090.15] — v Vos [1999] FCA 1703; BC9908005 …. [80,790.10] Carter & Kenderdine’s Contract, Re [1897] 1 Ch 776 …. [81,884.1] Carter, Re (1936) 9 ABC 204 …. [84,360.5] Caruana and Fenech, Re; Ex parte DCT (1988) FLC 91-903 …. [81,900.30] Case X18 (1990) 90 ATC 219 …. [81,250.55] Cashflow Finance Pty Ltd (in liq) v Westpac Banking Corp [1999] NSWSC 671; BC9904226 …. [81,860.8] Castle New Homes Ltd, Re [1979] 2 All ER 775; [1979] 1 WLR 1075 ….

[81,550.20] Castlemaine Tooheys 161 CLR 155 …. [81,015.95] Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 …. [81,015.95] Catalano v Commonwealth Bank of Australia (1998 unreported) …. [80,915.95] Cavanagh v Bank of New Zealand (1990) 22 FCR 124; 98 ALR 217 …. [80,970.70], [82,390.25] Cawood, In the Marriage of (2000) 27 Fam LR 403 …. [80,910.60], [80,910.87] CBFC Ltd v Sim [2006] NTSC 57 …. [81,550.5] CCA Systems Pty Ltd v Communications & Peripherals (Aust) Pty Ltd (1989) 15 ACLR 720; 7 ACLC 1080 …. [81,650.70] CDJ v VAJ (1998) 197 CLR 172; 157 ALR 686 …. [81,015.60], [83,390.10] Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365; 136 ALR 733 …. [80,910.17] Century 21 (South Pacific) Pty Ltd (in liq) v Century 21 Real Estate Corp (1996) 136 ALR 687 …. [81,885.15], [81,885.20] Challen v Bendeich [1999] FCA 845; BC9903518 …. [80,765.75] Challon (A Bankrupt), Re; Ex parte Brown v — (1996 unreported) …. [82,645.12] Chalmers v Pardoe [1963] 1 WLR 677 …. [81,860.11], [81,885.45] Chandramouli v Wallader [2001] FCA 808 …. [80,915.18A] Chaplin v Young (No 2) (1864) 33 Beav 414; 55 ER 428 …. [81,355.5] Chapman, Re [1896] 2 Ch 763 …. [82,375.10] Charan v Gleeson [2012] FCA 236; BC201201301 …. [81,889.10], [81,890.35] Chase v Donnelly [2002] FCA 1565; BC200207816 …. [82,640.20] Chase, Re; Permfox Pty Ltd v Official Receiver [2002] FCA 1504; BC200207815 …. [81,889.10] Cheesman v Waters (1997) 77 FCR 221; 148 ALR 21 …. [80,450.5], [80,760.5], [82,640.10] Cheesman, Re (1997) 143 ALR 78 …. [82,640.10], [82,640.20], [82,645.12]

Chemaisse, In the Marriage of (1987) 11 Fam LR 392 …. [81,900.30] — (1988) 12 Fam LR 48 …. [81,900.30] Chesson v Smith (1992) 35 FCR 594 …. [80,910.140] Chief Executive Officer of the Australian Customs Service v Karam (No 2) [2013] NSWSC 33; BC201300391 …. [81,650.6] China and South Sea Bank Ltd v Tan [1990] 1 AC 536 …. [81,015.125] Choi On On, Re (1986) 11 FCR 149; 73 ALR 370 …. [81,005.15] Christie, Re (1948) 22 ALJ 302 …. [82,145.5] Christou v Demandem Holdings Pty Ltd [2012] FCA 695; BC201204708 …. [81,015.56] Chu, Re; Ex parte RSL Permanent Building Society Ltd (1976) 15 ALR 173 …. [80,990.20] Circle Credit Co-op Ltd v Lilikakis (2000) 99 FCR 592; 173 ALR 122 …. [80,915.18A], [80,915.20] Cirillo v Consolidated Press Property Pty Ltd [2007] FCAFC 167; BC200709395 …. [81,015.210] Cirillo, Re (1996) 136 ALR 607 …. [80,000.80] Citicorp Australia Ltd v Official Trustee (1996) 141 ALR 667 …. [81,670.60] Civoniceva; Ex parte Attorney-General; R v [1983] 2 Qd R 633; [1983] 13 A Crim R 313 …. [81,650.6] CK Nominees Australia Pty Ltd v Official Receiver (WA) [2007] 160 FCR 524 …. [81,531.20] Clapham v Commonwealth Bank of Australia [2012] FCA 1452; BC201209930 …. [80,910.35] — v — [2013] FCAFC 84; BC201311636 …. [81,015.97] Clark v Wood (1997) 78 FCR 356; 149 ALR 38 …. [81,550.40] Clark, Re [1975] 1 All ER 453 …. [80,000.75] Clark, Re; Ex parte Beardmore (1894) 2 QB 393 …. [81,240.10] Clarke v Furnari [2007] FMCA 513; BC200702666 …. [82,310.25] Clarke, Re; Ex parte Official Receiver (1981) 35 ALR 359 …. [80,000.5], [81,785.10] Clear Hall v Moloney (2012) 264 FLR 299 …. [80,910.125], [80,990.35]

Clements, Re; Ex parte Trustee; Goldsbrough Mort & Co Ltd (1931) 7 ABC 255 …. [81,670.7], [81,670.70], [81,895.10] Close (t/as FB Close Transport), Re (1983) 50 ALR 571 …. [82,390.5] Clough v Samuel [1905] 1 AC 442 …. [80,910.165] Clout v Sing [2005] FCA 1058; BC200505493 …. [81,895.100] Clout (Trustee) v Anscor Pty Ltd [2003] FCA 326; BC200301682 …. [81,860.8], [81,884.1] Clubb, Re; Ex parte Clubb v Westpac Banking Corp (1990) 93 ALR 123 …. [80,915.65] Clunies-Ross, Re; Ex parte Totterdell (1988) 82 ALR 475 …. [80,745.10] Clyne v Andrew (1984) 1 FCR 169; 52 ALR 532 …. [80,750.5] — v DCT (1981) 150 CLR 1 …. [80,975.130], [81,110.5], [81,240.30], [81,690.5] — v — (1984) 154 CLR 589; 55 ALR 143; 58 ALJR 398 …. [80,000.5], [80,000.50], [81,080.5], [81,175.45], [81,175.50], [81,240.25], [82,310.5] — v — (1984) 52 ALR 657 …. [80,910.60] — v DCT (No 4) (1982) 13 ATR 302; 42 ALR 703 …. [80,970.10.5], [89,760.10], [89,760.15] — v Deputy Commissioner of Taxation (1982) 45 ALR 323 …. [81,015.55] — v Deputy Commissioner of Taxation (NSW) (1983) 48 ALR 545; 57 ALJR 673; 83 ATC 4532 …. [80,915.13], [82,310.25] Clyne, Re; Ex parte DCT (1986) 15 FCR 128; 68 ALR 603 …. [81,550.30], [81,550.45] Coast Securities Pty Ltd (No 9), Re; Ex parte Prapnell (1985) 7 FCR 293 …. [80,000.10] Cobbs Hill v El Moustafa (1998) 83 FCR 403 …. [84,740.5] Coffey v Bennett [1961] VR 264 …. [81,240.12] Cohen v Cohen (1929) 42 CLR 91; 35 ALR 204 …. [81,884.1] Cohn, Re (1954) 16 ABC 150 …. [83,165.35] Cole v Challenge Bank Ltd [2002] FCAFC 200; BC200203337 …. [81,250.15] — v Commonwealth [1962] SR (NSW) 700 …. [81,860.8] Coleman v Lazy Days Investments Pty Ltd (1994) 55 FCR 297 ….

[80,800.12], [80,800.20], [81,015.210] Coleman and Del Carlo v R [1988] WAR 196 …. [81,889.10] Coleman, Re; Ex parte Lazy Days Investments Pty Ltd (1994 unreported) …. [80,910.163], [80,910.167] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 …. [91,550.10] Collier, Re; Ex parte Dan Rylands Ltd (1891) 64 LT 742 …. [80,970.10.5] Colonial Mutual Life Assurance Society Ltd v Donnelly (1998) 82 FCR 418; 154 ALR 417 …. [81,550.70], [84,140.10] Colquhoun v Brooks (1888) 21 QBD 52; 57 LJQB 439 …. [84,335.5] Combined Insurance Company of America t/as Combined Insurance Co of Australia v Tamer [2011] FMCA 1040; BC201110481 …. [81,000.10] Combis (Trustee) v Spotiswood (No 2) [2013] FCA 240; BC201301191 …. [81,884.1] Comcare Australia v Lees (1997) 151 ALR 647 …. [81,980.10] Comfit Farm Produce Pty Ltd v Valamiou [2009] SADC 19 …. [81,650.25] Commercial & General Acceptance Ltd v Nixon (1981) 38 ALR 225 …. [82,000.15] Commins, Re; Ex parte Registrar in Bankruptcy (1989) 21 FCR 55 …. [82,383I.10] Commissioner for Motor Transport (NSW) v Train (1972) 127 CLR 396 …. [81,250.10], [81,250.50], [81,650.6] Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12; [1965] AC 694; [1965] ALR 803 …. [81,860.5] Commissioner of Taxation v Bayeh (1999) 100 FCR 144 …. [81,015.55] — v Oswal [2012] FCA 1507; BC201210249 …. [80,910.17] Commonwealth v Duncan [1981] VR 879; (1981) 37 ALR 665 …. [81,760.10] — v Ling (1993) 44 FCR 397 …. [80,910.130] — v Precision Pools Pty Ltd (1994) 29 ATR 335; 94 ATC 4727; 53 FCR 183 …. [81,795.15] Commonwealth Bank of Australasia v Maher [2008] FMCA 552; BC200803062 …. [80,770.70], [81,015.230] Commonwealth Bank of Australia v A. Boumelhem [2008] FMCA 789;

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Cooke, Re; Ex parte Official Trustee in Bankruptcy (1985) 4 FCR 398 …. [81,895.20] Coomber, Re [1911] 1 Ch 723 …. [81,650.25] Cooper v Cmr of Taxation (2004) 139 FCR 205 …. [80,915.16] — v Wyatt (1821) 5 Madd 484; 56 ER 980 …. [84,713.5] Cope v Keene (1968) 118 CLR 1; [1969] ALR 57; (1968) 42 ALJR 169 …. [81,860.8] Cope, Re (1947) 16 ABC 113 …. [83,165.35] Copley, Re; Ex parte Sundell (1964) 20 ABC 229 …. [89,760.5] Coram, Re; Ex parte Official Trustee v Inglis (1992) 36 FCR 250; 109 ALR 353 …. [84,713.5] Cordes as Trustee for Alexander Georgev Dr Peter Ironside Pty Ltd [2009] QCA 302 …. [81,250.6] Coretel Pty Ltd, Re (2003) 48 ACSR 178 …. [81,005.45] Corin v Patton (1990) 169 CLR 540; 92 ALR 1 …. [81,240.10] Corke v Corke (1994) 48 FCR 359; 121 ALR 320 …. [81,860.11], [81,890.45], [81,900.30] Cornelius v Barewa Oil & Mining (NL) (in liq) (1982) 42 ALR 83 …. [81,650.1], [81,650.10], [82,275.5], [82,275.10] Corney v Brien (1951) 84 CLR 343; [1951] ALR 525; (1951) 25 ALJR 133 …. [80,120.24], [81,015.60], [81,795.15], [91,370.5] Cornish, Re; Ex parte English (1984) 6 FCR 257 …. [81,175.50] Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319; 100 ALR 609 …. [81,550.50] Corporate Affairs Commission (SA) v Karounos (1984) 9 ACLR 405 …. [81,650.5], [81,650.70] Coshott v Burke [2012] FCA 517; BC201203561 …. [81,750.5], [81,760.5] — v Coshott (2010) 184 FCR 495 …. [82,795A.5] — v — [2013] FCA 156; BC201300798 …. [82,410.5] — v Principal Strategic Options Pty Ltd [2004] FCAFC 50; BC200401056 …. [81,005.35] Costaexchange Ltd v Shephard (No 2) [2011] FMCA 545; BC201105312 …. [80,800.20], [81,015.80]

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(1985) 11 FCR 272 …. [80,915.48] Croker v Cmr of Taxation (2005) 145 FCR 150 …. [80,915.18A] — v Commissioner of Taxation (2003) 52 ATR 226 …. [80,915.30] — v — (2005) 58 ATR 327 …. [80,770.25], [80,915.20], [80,915.67] Crook v Morley [1891] AC 316 …. [80,910.160], [80,910.161], [80,910.165] Cropley’s Ltd v Vickery (1920) 27 CLR 321 …. [80,910.160], [80,910.163] Croton v R (1967) 117 CLR 326; [1968] ALR 331 …. [81,890.50] Crum, Re; Ex parte Noyes Bros (Sydney) Ltd (1937) 9 ABC 281 …. [91,370.5] CSR Ltd trading as CSR Construction Materials v Antonio Barillaro (2001) 184 ALR 308 …. [81,015.30], [89,760.15] Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1 …. [80,120.23], [80,120.27], [81,240.12], [81,240.20], [81,250.6], [81,250.55], [81,310.5], [82,275.25], [82,640.2], [82,640.20], [82,640.25] — v Lewis (1993) 41 FCR 559; 113 ALR 285 …. [80,765.10] — v — (1992 unreported) …. [80,765.10] Cummins, Re (1951) 15 ABC 185 …. [81,884.1] Cunningham v Green [2011] FMCA 515; BC201105205 …. [82,145.5] Curry, Re; Ex parte Goldsea Pty Ltd (1992) 40 FCR 32 …. [80,910.170], [80,910.171], [83,075.25] Curtis, Re (1970) 17 FLR 327 …. [81,265.5] Cusack v De Angelis [2008] FMCA 18; BC200800261 …. [81,015.95] Cushla Ltd, Re [1979] 3 All ER 415 …. [81,670.65] Custom Capital Pty Ltd v Thompson [2009] FMCA 337; BC200903455 …. [80,765.80] D H Curtis (Builders) Ltd, Re [1978] Ch 162 …. [81,670.65] Da Sousa v Minister of State for Immigration, Local Government and Ethnic Affairs (1993) 30 ALD 782; 114 ALR 708; 41 FCR 544 …. [82,470.45] Dabbs v Seaman (1925) 36 CLR 538; 31 ALR 402; 42 WN (NSW) 146a …. [81,884.1] Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45; 79 ALR 591; 90 FLR 469 …. [81,250.25], [81,250.45], [81,860.15] — v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR

178; 99 ALR 789 …. [81,240.37], [82,270.5], [82,275.20], [82,275.25], [82,275.35] Dagnall, Re [1896] 2 QB 407 …. [80,910.166] Daintree, Re; Ex parte Mant [1900] 1 QB 546 …. [81,670.30] Daintrey, Re; Ex parte Holt [1893] 2 QB 116 …. [80,910.167] Dalco, Re; Ex parte Dalco v Deputy Commissioner of Taxation (Cth) (1986) 67 ALR 605 …. [80,915.23], [80,915.85] Dalgety Ltd v Commercial Bank of Australia Ltd [1981] 2 NSWLR 211 …. [81,650.60] Dalrymple v Melville (1932) 32 SR (NSW) 596 …. [84,360.10] Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371; 65 ALR 193 …. [81,860.11] — v Watson (1994) 50 FCR 544; 128 ALR 309 …. [80,990.20] Dannawi v Naoum [2010] FMCA 1003; BC201010174 …. [80,275.5] Darby, Re (1904) 2 WN (NSW) 87 …. [80,975.30] Dare v Doolan [2004] FCA 461; BC200401983 …. [82,480.1], [82,795.5] Dare, Re; Ex parte Dare (1992) 38 FCR 356; 110 ALR 659 …. [82,485.10] Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510; 80 ALR 203 …. [80,750.5] Davey v Danby (1887) 13 VLR 957 …. [81,885.5] Davies v English, Scottish & Australian Bank Ltd (1934) 7 ABC 210 …. [81,240.12] Davis, Re Estate of (1985) 63 ALR 403 …. [80,560.5] Dawson, Re; Ex parte Dawson v Arthur Andersen (1985) 5 FCR 133; 59 ALR 355 …. [83,165.35] Day v Mount (1984) 2 FCR 237; 53 ALR 468 …. [81,005.35] Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (1981) 34 ALR 595 …. [81,670.15] — v North Australian Properties Pty Ltd (prov liq apptd) (1982) 150 CLR 85; 40 ALR 399 …. [81,670.5], [81,670.10], [81,670.30] Daynes v CBD Central Pty Ltd [2012] QSC 085; BC201202163 …. [81,889.26] De Angelis v Cusack [2007] FMCA 1884; BC200710152 …. [80,915.85]

De Ieso, Re (1978) 24 ALR 701; 45 FLR 396 …. [84,760.5] De Kantzow, Re; Ex parte De Kantzow and James (1992) 35 FCR 74; 107 ALR 219 …. [83,075.30] De La Vega v Aneeta Window Systems (NSW) Pty Ltd [2012] FMCA 153; BC20123047 …. [80,910.125] de Robillard v Carver (2007) 159 FCR 38; 240 ALR 675 …. [80,800.12], [80,800.20], [80,970.10.5], [81,015.210], [89,760.10], [89,760.15] Dean v Q U F Industries Ltd (1981) 51 FLR 317 …. [81,000.5], [81,000.15], [81,000.20] Deane, Re; Ex parte Van Reesema [1962] ALR 89; (1961) 20 ABC 259 …. [80,910.110] Debtor a, Re; Ex parte Debtor v Dodwell [1949] Ch 236 …. [84,370.5] Debtor, No 21 of 1950 a, Re; Ex parte the Debtor v Bowmaker Ltd [1951] Ch 313 …. [80,915.18B] Debtor, Re (1958) 1 Ch 81 …. [80.915.19] Debtor, Re a (1912) 106 LT 812 …. [80,910.168] — [1912] 2 KB 533 …. [80,910.40] — [1922] 2 KB 109 …. [80,975.140] — [1929] 1 Ch 362 …. [80,910.164], [80,910.166] — [1929] 2 Ch 146 …. [80,915.18] — [1952] 1 All ER 519 …. [80,910.20] — [1958] Ch 81 …. [80,915.202] Debtor, Re a (No 7 of 1910) [1910] 2 KB 59 …. [80,990.20] Debtor, Re a (No 441 of 1938) [1939] Ch 251 …. [84,760.6] Debtor, Re; ex parte Bolam (1909) 9 SR (NSW) 580 …. [80,910.140] Deen, Re; Ex parte Deen v Muller (1995) 58 FCR 441 …. [80,910.125] Dehy Fodders (Aust) Pty Ltd, In re; Winter v The Bank of Adelaide (1973) 4 SASR 538 …. [81,240.7], [81,895.50] Dekkan v Evans [2008] FCA 1004 …. [80,910.125] Delehunt v Carmody (1986) 161 CLR 464; 68 ALR 253; 61 ALJR 54 …. [81,240.40] Demandem Holdings Pty Ltd v Christou [2011] FMCA 489; BC201106519 …. [81,015.100]

Denby (as trustee in bankruptcy of the estate of SS Wing Tam) v Shum [2002] QSC 117; BC200203759 …. [80,755.5] Denlay v Commissioner of Taxation (No 3) [2012] FCA 317; BC201201679 …. [81,250.15], [82,640.2] Densham, Re [1975] 1 WLR 1519 …. [81,885.30] Deputy Cmr of Taxation v Coco (2003) 52 ATR 700; 179 FLR 362 …. [89,760.10] — v Gadaleta (1999) 42 ATR 414 …. [89,760.15] —v Gruber (1998) 43 NSWLR 271; 143 FLR 432 …. [89,760.10] Deputy Commission of Taxation v Mahaffy [2011] FMCA 416; BC201104059 …. [84,730.10], [84,760.6] Deputy Commissioner of Taxation v Andrew (1984) 52 ALR 701 …. [84,370.10] — v Catanese (1999) 42 ATR 247 …. [80,910.110] — v Clyne (1983) 50 ALR 118 …. [81,005.10], [81,005.15], [81,005.25], [81,005.40] — v Cumins [2007] FMCA 1841; BC200709949 …. [80,970.27] — v — [2008] FCA 353 …. [81,015.55] — v Cumins [No 5] [2008] FCA 794; BC200803956 …. [80,915.55], [80,915.60], [81,015.55], [81,015.100] — v Debaugy (2012) 263 FLR 193 …. [80,755.3] — v Donnelly (1989) 25 FCR 432; 89 ALR 232; 89 ATC 5071 …. [80,975.130], [81,110.5], [81,240.30], [81,690.5], [81,855.25], [81,870.10] — v Donnelly (No 2) [2011] FMCA 627; BC201106244 …. [81,015.80] — v Ganke [1975] 1 NSWLR 252 …. [84,339.5], [84,341.5] — v Keenan (1999) 99 ATC 4465 …. [81,015.90] — v Lowry [2006] FMCA 913; BC200605103 …. [81,015.60] — v Petrov [2008] FMCA 539; BC200804241 …. [81,000.5] — v Prentice (Trustee) [2011] FCA 1535; BC201110599 …. [81,310.5], [82,640.2] — v Somerton [2011] FMCA 592; BC201105687 …. [81,015.93] — v Steele (1987) 87 ATC 5050 …. [81,240.30], [81,690.5]

— v Steuer [2014] FCCA 773 …. [83,075.5] — v Swain (1988) 20 FCR 507; 81 ALR 12 …. [81,900.30] — v Wachjo (2005) 216 ALR 682; 59 ATR 253 …. [80,910.20] — v Willis [2007] FMCA 579; BC200702865 …. [81,015.30] — v Woods (No 2) [2010] TASSC 67; BC201009964 …. [80,910.17] Deriu, Re (1970) 16 FLR 420 …. [82,310.20] Derriman v National Australia Bank Ltd [2005] FCA 75; BC200500280 …. [80,915.35] Detmold, Re (1889) 40 Ch D 585 …. [84,713.5] Diamond v Hughes as liquidator of CSC Mining Services Pty Ltd [2012] FMCA 1132; BC201209314 …. [80,985.5] Dick as Trustee in Bankruptcy v McIntosh [2001] FCA 1008 …. [80,120.37], [80,745.5] Dickson; Owners of Strata Plan Number 14368, The v (2008) 221 FLR 299 …. [80,910.17] Dier, Re; Ex parte Suduk (1990 unreported) …. [80,915.65] Dimasi v Nangiloc Colignan Farms Pty Ltd [2006] FMCA 856; BC200604700 …. [80,915.185] Dingle, Re; Westpac Banking Corp v Worrell (1993) 47 FCR 478; 119 ALR 265 …. [80,750.5], [82,640.20], [83,135.10] Dinsdale bht Protective Commissioner v Arthur (2006) 12 BPR 23,509 …. [81,240.23] Director of Public Prosecutions v Chidiac (1991) 25 NSWLR 372 …. [83,750.35] Director of Public Prosecutions (WA) v Mansfield (2008) 35 WAR 431; 246 ALR 186 …. [80,735.7] Discovery Books, Re (1972) 20 FLR 470 …. [81,895.80] Distribution Group Ltd (t/as Lawrence & Hanson) v Lyndan (1997) 78 FCR 240 …. [80,915.16] Ditfort v Temby (1990) 26 FCR 72 …. [84,760.6] Ditfort, Re; Ex parte DCT (NSW) (1988) 19 FCR 347; 83 ALR 265 …. [80,970.10.5], [80,970.30], [82,310.5], [82,310.15], [84,730.10], [84,760.6], [89,760.10], [89,760.15]

Dixon v Riquero [2004] FMCA 173; BC200401473 …. [81,240.11] Dixon as Trustee of the Bankrupt Estate of Badillo-Watiwat v Watiwat [2012] NSWSC 402; BC201202773 …. [81,240.40] DJ Sweeney Holdings Pty Ltd v McLeod (2011) 253 FLR 1 …. [80,915.11] DK Rogers, Re; Ex parte CMV Parts Distributors Pty Ltd (1989) 20 FCR 561 …. [81,760.5], [81,760.10] DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431; 40 ALR 1; 56 ALJR 287 …. [81,885.23] DL Collections v Nguyen [2006] FMCA 427; BC200602213 …. [80,910.90] DM Developments v Driscoll [2011] FMCA 464; BC201104633 …. [84,760.6], [89,760.9A] DM Developments Pty Ltd v — [2013] FMCA 129; BC201301349 …. [81,015.100] Dodds, Re; Ex parte Pritchard (1890) 25 QBD 529 …. [81,650.65] Dolman, Re; Ex parte Elder Smith Goldsbrough Mort Ltd (1967) 10 FLR 384 …. [81,015.55], [81,015.130] Donkin v Official Trustee [2003] QSC 401; BC200307132 …. [80,450.5] Donkin, Re; Ex parte AGC Advances Ltd (1994) 52 FCR 271; 125 ALR 293 …. [80,910.135] Donnelly (Trustee) v Windoval Pty Ltd (Trustee); In the Matter of Donnelly (Trustee) [2014] FCA 80; BC201400526 …. [81,889.5] Donovan, In the Marriage of (1992) FLC 92-276 …. [81,860.10], [81,860.11] Donovan, Re; Ex parte Australia and New Zealand Banking Group Ltd [1972] ALR 313; (1972) 20 FLR 50 …. [80,910.169], [80,910.170], [83,075.25] Doolan v Dare [2004] FCA 682; BC200403124 …. [82,640.25], [82,645.10] — v — [2005] FCAFC 69; BC200502718 …. [82,470.5] Dorsett v Dorsett (1861) 10 WR 96; 54 ER 96 …. [84,713.5] Douglas, Re [2011] FMCA 481; BC201104663 …. [83,115.10] Doulman v ACT Electronic Solutions Pty Ltd [2011] FMCA 232; BC20110232 …. [80,800.20], [81,015.80] Dowell, Re; Ex parte Marks (1987 unreported) …. [81,860.12]

Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509; 21 ALR 425 …. [80,910.125], [81,015.95] Downs Distributing Co Pty Ltd v Associated Blue Star Stores Pty Ltd (in liq) (1948) 76 CLR 463 …. [81,895.90], [81,900.10] Doyle (dec’d), Re; Ex parte Brien v Doyle (1993) 112 ALR 653 …. [81,885.47] Doyle, Re; Ex parte Brien v — (1993) 41 FCR 40; 112 ALR 653 …. [81,884.5] Drake v Stanton [1999] FCA 1635; BC9907684 …. [80,915.25], [89,760.15] Draper v Official Trustee in Bankruptcy (No 2) [2008] FMCA 701; BC200804524 …. [82,495.30] Draper, Re; Ex parte Australian Society of Accountants BC8908057 …. [84,730.10] Driller & Nebenson, Re [1972] ALR 735; (1972) 21 FLR 159 …. [80,765.50], [82,000.35] DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 …. [81,525.20], [81,550.45] Duckworth v Water Corp (No 2) [2012] WASC 163; BC201203528 …. [81,250.17] — v Water Corporation [2012] WASC 30 …. [81,250.6] Duckworth, Re; Ex parte Lockett (1987 unreported) …. [80,750.10] Dugdale, Re (1888) Ch D 176 …. [84,713.5] Duncan Fox & Co v North and South Wales Bank (1880) 6 App Cas 1 …. [81,240.23], [81,650.60] Duncan, Re; Ex parte Modlin (1916) 17 SR (NSW) 152; 34 WN (NSW) 49 …. [80,915.202] — (1917) 17 SR (NSW) 152; 34 WN 49 …. [80.915.19] Dunlop v Fishburn (No 3) [2012] FCA 315; BC201202679 …. [80,120.16] Dunn, Re; Ex parte Andrew (1981) 35 ALR 466; 53 FLR 102 …. [80,000.40] Dunn, Re; Ex parte Official Receiver v Dunn [1949] Ch 640 …. [81,175.50] Dunwoody v Official Receiver [2005] FMCA 1634; BC200511863 …. [81,520.25] Durra v Bank of New South Wales [1940] VLR 170 …. [81,650.2]

Dutton Massey and Co, Re; Ex parte Manchester and Liverpool District Banking Co [1924] 2 Ch 199 …. [81,690.5] Dwyer v Chicago Boot Co Pty Ltd (2011) 82 ACSR 193 …. [80,120.50], [80,120.55] — v Ross (1992) 34 FCR 463 …. [82,070.5] Dye (V R) & Co v Peninsular Hotels Pty Ltd (in liq) [1999] 3 VR 201; (1999) 32 ACSR 27; 150 FLR 307 …. [81,895.70] Ebert v The Union Trustee Co of Australia Ltd (1960) 104 CLR 346; [1960] ALR 691; (1960) 34 ALJR 182 …. [80,910.17], [80,910.125], [80,910.145], [80,910.140], [80,910.145], [80,910.150], [80,915.200], [80,915.202], [80.915.19], [80,915.212], [81,015.20] Ebner v Official Trustee in Bankruptcy (1999) 91 FCR 353; 161 ALR 557 …. [81,889.3], [81,889.10], [81,890.25] — v — (2000) 205 CLR 337; 176 ALR 644 …. [80,970.10.10], [81,015.95], [81,015.105] — v — (2003) 126 FCR 281; 196 ALR 533 …. [82,640.25] Edelsten v DCT (NSW) (1989) 86 ALR 257 …. [81,175.50], [82,310.5], [82,310.15] Edelsten, Re; DCT (NSW) v Donnelly (1989) 20 ATR 1331 …. [82,113ZK.5] Edge Technology Pty Ltd v Wang [2000] FCA 1586; BC200006732 …. [80,910.20] Edwards, Re; Ex parte Edwards (1987) 14 FCR 113; 71 ALR 403 …. [81,405.10] Elders Ltd v Lloyd [2005] FMCA 1020; BC200505285 …. [82,000.35] Electrical Enterprises Retail Pty Ltd v Rodgers (1988) 15 NSWLR 473 …. [81,890.25] Electricity Meter Manufacturing Co Ltd v Manufacturers’ Products Pty Ltd (1930) 30 SR (NSW) 422; 47 WN (NSW) 182 …. [81,240.7], [81,895.50] Elias v Pascoe [2006] FCA 802; BC200604817 …. [80,765.5], [80,765.50], [80,765.53] Elkateb, Lawindi v Elkateb, Re (2001) 187 ALR 479 …. [80,915.25] Ellis & Co’s Trustee v Dixon-Johnson [1924] 1 Ch 342 …. [81,650.65],

[81,775.5] Ellis, Re; Ex parte Jefferson (1995 unreported) …. [82,113L.5], [82,113Y.5], [82,113L.25], [82,113Z.10], [82,187.10] Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385; 133 ALR 206 …. [80,770.70], [81,015.220] Emerson v Wreckair Pty Ltd (1992) 33 FCR 581; 109 ALR 539 …. [80,915.18A], [80,915.60], [80,915.67], [81,015.55] Emerson, Re; Ex parte Wreckair Pty Ltd (1991) 101 ALR 315 …. [80,915.67] Emma Silver Mining Co v Grant (1880) 17 Ch D 122 …. [81,650.25] Environment Protection Authority v Mistring Pty Ltd (2013) 82 NSWLR 784; 194 LGERA 340 …. [84,375.10] Environmental & Earth Sciences Pty Ltd v Vouris (2006) 152 FCR 510; 230 ALR 119 …. [81,650.1.5] Esso Australia Resources Ltd v FCT (Cth) (1999) 201 CLR 49; 168 ALR 123 …. [81,525.20], [81,550.45] Esso Petroleum v Alstonbridge Properties Ltd [1975] 3 All ER 358; [1975] 1 WLR 1474 …. [81,000.15] Estate of Connell (decd), Re the [2001] FCA 51; BC200100166 …. [81,785.15] Eurostar Pty Ltd v Donnelly [2005] FCA 698; BC200503656 …. [81,240.35] Evans v European Bank Ltd (2004) 61 NSWLR 75 …. [81,240.23] — v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424 …. [80,800.12], [80,800.20], [81,015.210] — v Hoare [1892] 1 QB 593 …. [82,795A.5] EW (2010) 72 SR (WA) 49 …. [82,645.5] Exell, Re; Ex parte Martin (1995) 62 FCR 337; 134 ALR 623 …. [80,910.87], [80,910.90] Eykamp v Deputy Commissioner of Taxation [2010] FCA 797; BC201005271 …. [81,015.80] Eyston, Ex parte (1877) 7 Ch D 145 …. [84,713.5] F Pracey and E H Pracey, Re; Ex parte Watson Adco Ltd (1929) 1 ABC 86 …. [80,980.15] Falamaki v Wollongong City Council [2010] NSWSC 38; BC201000543 ….

[81,250.7] Falloon v Madden; Madden v Madden [2012] NSWSC 652; BC201204184 …. [81,240.37] Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; 48 ALR 1 …. [80,915.25], [82,315.15], [89,760.10] Farley v Official Trustee in Bankruptcy [2011] FMCA 10; BC201100055 …. [81,860.9], [82,310.20] Farnan and Inspector-General in Bankruptcy, Re (2007) 95 ALD 186 …. [82,165.10] Farrow Finance Company Ltd (in liq) v ANZ Executors and Trustee Co Ltd [1998] 1 VR 50; [1998] 136 FLR 154 …. [81,015.100] Farrow Mortgage Services Pty Ltd (in liq) and Hodgson v Abeyratne and Sheehan (1993) 47 FCR 208 …. [80,750.5], [83,135.10] Farrugia v Farrugia (2000) 99 FCR 16; 178 ALR 506 …. [80,915.50] — v — [2000] FCA 129 …. [80,915.40] — v Official Receiver in Bankruptcy (1982) 43 ALR 700; 58 FLR 474 …. [81,240.23] Farrugia, Re; Ex parte DCT (1988) 19 FCR 1; 80 ALR 651 …. [80,915.75] Faulkner v Bluett (1981) 52 FLR 115 …. [81,250.10], [81,250.25], [81,860.15] Faulkner, Re; Ex parte Official Receiver (1981) 52 FLR 109 …. [80,770.45] Fazio v Westpac Banking Corp [2014] WASCA 80 …. [82,000.30] Fearnley v Australian Fisheries Management Authority (2006) 94 ALD 519 …. [82,165.10] Featherstone v Hambleton as Liquidator of Ashala Pty Ltd (in liq) [2014] FCCA 1149; BC201404275 …. [80,915.23] Federal Cmr of Taxation v Spotless Services Ltd (1996) 186 CLR 404; 141 ALR 92 …. [81,889.10] Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499; 23 ALR 480; 79 ATC 4039 …. [84,344.5] — v Citibank Ltd (1989) 20 FCR 403; 85 ALR 588 …. [81,550.50] — v Dixon (1952) 86 CLR 540 …. [82,113L.15] — v Gosstray [1986] VR 876 …. [81,650.5], [81,650.70]

Federated Engine Drivers’ and Firemen’s Assn of Australasia v Broken Hill Proprietary Co Ltd (1913) 16 CLR 245; 19 ALR 177 …. [83,390.5] Feliciano Gonzales v Maria De Luz Marmentini, Executrix of the Estate of the Late Ida Garcia Raber BC9803583 …. [83,750.90] Felton v Mulligan (1971) 124 CLR 367 …. [80,735.7] Ferella v Official Trustee in Bankruptcy (2010) 188 FCR 68 …. [82,645.12] — v — [2013] FCAFC 43; BC201302350 …. [82,645.12] — v Official Trustee in Bankruptcy (No 2) [2011] FCA 619; BC201103747 …. [81,025.30], [82,645.12] Ferguson, Re; Ex parte EN Thorne and Co Pty Ltd (in liq) [1970] ALR 177; (1969) 14 FLR 311 …. [81,015.60] Ferrarese, Re; Ex parte Aloisio (1995) 60 FCR 586 …. [80,970.10.5] Ferris v Bilic [2014] FCCA 781 …. [80,915.16] Fewings, Ex parte; in re Sneyd (1883) 25 Ch D 338 …. [80,915.57] Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403; 37 FLR 341 …. [80,770.45], [80,770.5], [80,800.20], [81,015.100], [81,015.210], [81,240.16], [83,180.5] — v Jenolan Caves Resort Pty Ltd (No 2) [2008] FMCA 1701; BC200811655 …. [80,910.125], [80,915.200] — v St George Bank Ltd [2009] FCA 1042; BC200908499 …. [81,015.20] Finn v Gavin [1905] VLR 93 …. [81,650.1] Finn, Re; Ex parte Amoco Australia Ltd (1982) 41 ALR 487 …. [80,975.140] Fiorino, Re; Ex parte Woodgate BC9405885 …. [81,884.1] Fitzgerald, Duke of Leinster; R v [1924] 1 KB 311 …. [84,360.5] Fitzgerald, Re [1903] 1 Ch D 933 …. [84,713.5] Fitzgerald, Re; Ex parte Burns (1986) 10 FCR 261; 63 ALR 623 …. [81,884.1] — (1986) 63 ALR 623 …. [81,885.50] Fitzpatrick v Keelty (2008) 99 ALD 696 …. [81,250.25] — v Keelty (No 2) [2008] FCA 742; BC200803832 …. [82,470.45] — v Kidney [2007] FMCA 1422; BC200707193 …. [82,310.20] Flatau, Re (1888) 22 QBD 83 …. [81,240.12]

Flatau, Re; Ex Parte Scotch Whisky Distillers (1882) 22 QBD 83 (CA) …. [81,015.55] Fleming, Fraser & Co, Re (1888) 60 LT (NS) 154 …. [80,910.161] Fletcher v EEBME Pty Ltd (2007) 213 FLR 1 …. [81,525.20] — v George [2011] FMCA 553; BC201105681 …. [81,860.8] Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (2001) 4 VR 28 …. [81,015.80] Fletcher, Re; Ex parte Hanimex Pty Ltd (1984) 9 ACLR 30 …. [81,760.5] Florance v Andrew (1985) 58 ALR 377 …. [81,890.45] Florance, Re; Ex parte Andrew (1983) 52 ALR 339 …. [81,890.30] Florance, Re; Ex parte Hardiman v Andrew (1992 unreported) …. [81,550.35] Florance, Re; Ex parte Turimetta Properties Pty Ltd (1979) 28 ALR 403 …. [84,730.10], [84,730.15] Fodare Pty Ltd v Official Trustee in Bankruptcy [2000] FCA 1721; BC200007296 …. [81,884.1] Foote v Mid-West Finance Pty Ltd (in liq) (1997) 78 FCR 306; 158 ALR 320 …. [80,915.135] Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; 241 ALR 32 …. [81,650.1], [81,650.2.3] For the Good Times Pty Ltd v Boyle [2009] FMCA 512; BC200905130 …. [83,390.40] Ford, Re (1909) 12 WALR 15 …. [80,910.166] Forder, Re [1927] 2 Ch D 291 …. [84,713.5] Forshaw v Thompson (1992) 35 FCR 329; 106 ALR 633 …. [80,750.10], [80,750.5], [83,135.10], [83,135.5], [83,150.5] Forster v Baker [1910] 2 KB 636; [1908] All ER Rep 554 …. [80,910.180] Foster, Ex parte Basan, Re (1885) 2 Morr 29 …. [80,910.140], [80,910.145] Foster, Re; Ex parte Foster v Duus (1994) 121 ALR 494 …. [80,765.65] — v — (1994) 49 FCR 309 …. [81,520.35] Fowkes v Deputy DPP [1997] 2 VR 506; (1997) 88 A Crim R 166 …. [81,860.8] Fox v Robinson [2003] FMCA 107; BC200301976 …. [82,310.4]

Foyster v Australia and New Zealand Banking Group Ltd [1999] FCA 1043; BC9904275 …. [80,915.212] — v Prentice [2008] FMCA 757; BC200804562 …. [80,750.5], [80,970.10], [81,025.10], [81,860.15], [81,860.9], [82,640.20] Francis v Commonwealth Wool & Produce Co Ltd (1941) 65 CLR 662 …. [80,910.165] — v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18; BC201401206 …. [82,310.25] Francis, Re (1941) 12 ABC 111 …. [80,910.160], [80,910.165] Francis, Re; Ex parte Gartrell (1983) 77 FLR 80 …. [80,915.115], [84,730.15] Francis, Re; Ex parte Official Trustee in Bankruptcy (1988) 19 FCR 149; 82 ALR 335; [1988] ANZ ConvR 585 …. [81,240.40], [81,795.25] Frank Dimasi (t/as F & M Dimasi) v Nangiloc Colignan Farms Pty Ltd (2007) 157 FCR 387; 239 ALR 330 …. [80,910.147], [84,730.15] Frank, Re; Ex parte Piliszky (1987) 16 FCR 396; 77 ALR 511 …. [80,910.95], [80,975.50], [82,310.5], [82,310.15], [82,310.20], [82,310.25], [82,310.5] Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; 264 ALR 15 …. [80,915.57] Franks v Equitiloan Securities Pty Ltd [2007] NSWSC 812; BC200705956 …. [80,910.125], [80,990.35] Fraser v DCT (1996) 69 FCR 99; 138 ALR 689 …. [81,900.30], [82,865F.5] Frasersmith, Re; Ex parte J Blackwood & Son Ltd (1992) 36 FCR 144 …. [80,910.137] Fredericke & Whitworth, Re; Ex parte Hibbard [1927] 1 Ch 253 …. [80,910.180], [80,915.220] Freeman v Joiner (2005) 219 ALR 136 …. [82,640.25] — v National Australia Bank Ltd [2003] FCA 1233; BC200306606 …. [82,640.25] — v — [2003] FCAFC 200; BC200304760 …. [81,015.60] — v Pope (1870) LR 5 Ch App 538 …. [81,889.10], [81,890.30] Frost v Bovaird (2012) 203 FCR 95 …. [82,000.40] — v Sheahan (2005) 220 ALR 733 …. [82,640.25]

— v Sheahan (Trustee) [2009] FCAFC 20; BC200901098 …. [81,310.5], [82,640.2] — v Shehan as Trustee of the Bankrupt Estate of Allen Gordon Frost [2012] FCAFC 46; BC201201680 …. [81,889.9] Frost & Fallon [2011] NSWSC 591; BC201104266 …. [83,780.5] Frost, Re [1899] 2 QB 50 …. [81,655.5] Fuller v Beach Petroleum NL (1993) 43 FCR 60; 117 ALR 235 …. [81,240.12] Fuller, Re BC9602814 …. [82,640.10] Fuller, Re; Wily v Fuller [1999] FCA 1811; BC9908500 …. [80,735.2] Furney, Re (1964) 20 ABC 166 …. [81,550.50] Gadelrabb v Liristis [2012] FMCA 318; BC201202312 …. [91,150.5] Gaffney v Federal Cmr of Taxation (1998) 98 ATC 4659; 38 ATR 594; 81 FCR 574 …. [81,650.5] Gagliardi, Re; Ex parte Mount (1984) 57 ALR 718 …. [83,360.10] Gambetta Holdings Pty Ltd v City and Suburban Pty Ltd [2013] WADC 3; BC201350030 …. [80,120.23] Gange v Sullivan (1966) 116 CLR 418; 40 ALJR 224 …. [81,410.15] Gantry Acquisition Corp v Parker & Parsley Petroleum Australia Pty Ltd (1994) 51 FCR 554; 123 ALR 29; 14 ACSR 11 …. [83,390.5] Garcia v National Australia Bank Ltd (1998) 194 CLR 395; 155 ALR 614 …. [81,860.11] Garofano, Re; Ex parte American Express International Inc (1990) 26 FCR 592 …. [80,765.65] Garvin v Patterson [2001] FCA 1253; BC200105640 …. [80,915.46] Gas and Fuel Corporation of Victoria v Wood Hall Ltd [1978] VR 385 …. [80,910.17] Gasbourne Pty Ltd, Re [1984] VR 801 …. [81,650.1] Gault, Re; Gault v Law (1981) 57 FLR 165 …. [81,980.5], [82,640.25], [82,645.12] GE Commercial Corporation (Aust) Pty Ltd v Nichols as Trustee of the Bankrupt Estate of Lymn [2012] NSWSC 562; BC201203604 …. [82,640.25]

Gear (Deceased), Re [1964] Qd R 528 …. [81,860.8] Geard, Re; Ex parte Reid (1994) 217 ALR 191 …. [80,915.85] — (1994 unreported) …. [80,915.197] GEB, Re (1903) 2 KB 340 …. [80,910.125] Gee v Liddell [1913] 2 Ch 62 …. [81,240.23] — v Smart (1857) 8 El and Bl 313; 120 ER 116 …. [81,240.23] Geelong School Supplies Ltd v Dean (2006) 237 ALR 612 …. [81,980.5] Geia v Palm Island Aboriginal Council (1999) 152 FLR 135 …. [80,735.2] — v — [2001] 1 Qd R 245 …. [80,735.2] General Motors Acceptance Corporation Australia v Marshall [2002] FCA 100 …. [81,000.10] Genovese v BGC Construction Pty Ltd [2006] FCA 105; BC200600504 …. [80,915.140] — v — [2006] FMCA 1507; BC200608146 …. [80,970.27] — v BGC Construction Pty Ltd (No 2) [2007] FMCA 601; BC200703687 …. [80,765.20], [91,550.10] Gentry, Re [1910] 1 KB 825 …. [81,015.120] George v DCT (2004) 212 ALR 495; 57 ATR 450 …. [80,910.171], [83,390.5], [83,390.10], [83,390.15], [83,390.20] George, Re; Ex parte Tricontinental Corporation Ltd (1994) 53 FCR 284; 126 ALR 541 …. [80,990.20] Gerson v Simpson [1903] 2 KB 197 …. [81,650.2] Gersten v Minister for Immigration and Multicultural Affairs [2001] FCA 260; BC200100995 …. [82,113ZQ.5] Gertig v Davies (2003) 85 SASR 226; 226 LSJS 350 …. [81,240.12] Gibbons v LibertyOne Ltd (in liq) (2002) 41 ASCR 442; 167 FLR 310 …. [82,115.1] Gilchrist v Dean [1960] VR 266; (1960) 2 FLR 175 …. [81,650.1], [81,650.2] Gill, Re; Ex parte Official Receiver (1964) 6 FLR 273 …. [81,655.5] Gillies, Re; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571; 115 ALR 631 …. [81,985.10], [82,113P.5], [82,113L.15] Ginnane v Diners Club Ltd (1993) 42 FCR 90; 120 ALR 375 …. [84,760.15]

GIO Workers Compensation (NSW) Ltd v De Vita [2007] FMCA 1594; BC200708381 …. [82,310.20] Girardet v Crease & Co (1987) 11 BCLR (2d) 361 …. [81,650.25] Gissing v Gissing [1971] AC 886; [1970] 2 All ER 780 …. [81,860.11] Giumelli v Giumelli (1999) 196 CLR 101; 161 ALR 473 …. [81,860.8], [81,884.5], [81,889.5] Glazier Holdings Pty Ltd v Australian Men’s Health Pty Ltd [2000] NSWSC 253; BC200001836 …. [81,240.23] Gleeson v Storey [2008] FMCA 696; BC200804250 …. [82,310.30] Glegg v Bromley [1912] 3 KB 474; [1911] All ER Rep 1138 …. [81,889.10] Glenisia Investments Pty Ltd (in liq), Re (1995) 19 ACSR 84; 14 ACLC 237 …. [81,785.15] Glentham Pty Ltd v McPhee [2007] FMCA 1939; BC200710295 …. [80,915.85] Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331 …. [80,910.125], [80,910.150], [80,910.17], [80,915.200], [80,915.212] Glouftsis v Glouftsis (1987) 44 SASR 298 …. [81,860.11] Goater, Ex parte; Re Finney (1874) 30 LT 620 …. [80,910.20] Godden v Crowhurst (1842) 10 Sim 642; 59 ER 765 …. [84,713.5] Godfrey, Re (1929) 1 ABC 165 …. [84,365.5] Goldberg, Re; Ex parte Law Society of New South Wales (1988) 82 ALR 271 …. [80,975.60] Gollan, Re; Ex parte Gollan (1992) 40 FCR 38; 113 ALR 475 …. [80,800.20], [82,310.5], [82,310.15], [82,310.20] Gomez v State Bank of New South Wales Ltd [2002] FCAFC 101; BC200201643 …. [80,910.17], [80,910.125], [80,910.150], [80,915.212] Goo Tuck, Re; Ex parte Goo Tuck (1892) 2 BC (NSW) 95 …. [82,310.15] Goode, Re; Ex parte Mount (1974) 4 ALR 579; 24 FLR 61 …. [81,860.8], [81,884.1] Gordon, Re (1988) 18 FCR 366; 80 ALR 289 …. [81,550.45] Gordon, Re; Ex parte Weedon v Pipkin (1985) 4 FCR 190; 59 ALR 596 …. [82,640.5] Gosden v Dixon (1992) 107 ALR 329 …. [81,240.37]

Gosling v McCombie (1972) 126 CLR 487; [1972] ALR 273; (1972) 46 ALJR 468 …. [84,710.5] Gould v Companies Auditors and Liquidators Disciplinary Board (2009) 71 ACSR 648 …. [80,915.10] — v Day [1999] FCA 1650; BC9907767 …. [80,910.17], [80,910.125], [80,910.150], [80,915.212] Gould, Re; Ex parte Skinner (1983) 72 FLR 393 …. [80,910.125] Government of Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199 …. [80,910.125], [80,990.35] Gowing, Re; Ex parte Deputy Registrar in Bankruptcy (1985) 11 FCR 111; 61 ALR 186 …. [80,770.55], [83,115.10] GR Finance Ltd v Waldron (No 2) [2010] FMCA 168; BC201001371 …. [81,015.100], [81,015.125] Graham v Lewis (1888) 22 QBD 1 …. [80,970.60] Grampians Carpet Cleaning Pty Ltd v McLelland [2010] FMCA 229; BC201002073 …. [82,000.35] Grant v DCT [2000] 104 FCR 1 …. [81,531.20] Graves v Dolphin (1826) 1 Sim 66; 57 ER 503 …. [84,713.5] Gray v Clout (1990) 27 FCR 141; 21 ALD 510 …. [82,640.25] — v Dowman (1858) 27 LJ Ch 702 …. [81,240.23] Gray, Re; Ex parte DCT (1993) 115 ALR 638 …. [80,970.20] Greater Building Society Ltd v Hill [2012]1 FMCA 431; BC201203589 …. [81,175.10], [81,175.50] Greater Wollongong City Council v Cowan (1955) 93 CLR 435; 29 ALJR 36 …. [81,015.60] Green v Daley (2002) 28 SR (WA) 101 …. [81,240.16] — v Green (1989) 17 NSWLR 343; 13 Fam LR 336 …. [81,884.12] — v Official Trustee in Bankruptcy (2003) 128 FCR 383 …. [81,785.15] — v Schneller (2001) 189 ALR 464 …. [80,755.5] — v Wilden Pty Ltd [2013] FMCA 24; BC201300117 …. [80.915.19], [81,015.20] Green’s Will Trusts, Re [1985] 3 All ER 455 …. [83,390.5] Greenhill, Re; Ex parte Myer (NSW) Ltd (1984) 5 FCR 84; 58 ALR 185 ….

[80,915.67] Gremmer and Inspector-General in Bankruptcy, Re [2011] AATA 368; BC201103502 …. [82,173.7] Griffin v Pantzer [2004] FCAFC 113; BC200402587 …. [81,550.45] Griffin, Ex parte; Re Dixon (1826) 2 GL&J 114 …. [82,790.11] Griffin, Re (1928) 1 ABC 24 …. [80,990.80] Griffiths v Civil Aviation Authority (1996) 41 ALD 50; 137 ALR 521; 67 FCR 301 …. [81,240.12] Griffiths, Re; Ex parte Huntley (1892) 3 BC (NSW) 6 …. [82,310.20] Groom, Re (1977) 16 ALR 278; 78 ATC 4530 …. [80,000.40] Groom, Re; Ex parte Official Receiver (1976) 13 ALR 529 …. [80,000.40] Groome, Ex parte (1744) 1 Atk 115 …. [81,650.5] Grundy v Wattyl Australia [2002] FCA 615; BC200202348 …. [81,240.16] GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123 …. [81,980.5] Gu v Pascoe [2006] FMCA 367; BC200601615 …. [81,520.25] Gudgeon, Re; Ex parte Pegler (1969) 13 FLR 350 …. [82,790.11] Guirguis v Guirguis (1997) 21 Fam LR 356; 137 FLR 130 …. [81,240.12] Gulotti v Coad [2007] FMCA 525; BC200702934 …. [80,915.85] Guss v Johnstone (2000) 171 ALR 598; 74 ALJR 884 …. [80,770.10], [80,910.17], [80,910.125], [80,910.150], [80.915.19], [80,915.200], [80,915.202], [82,315.10] — v — [2000] FCA 1455; BC200006251 …. [80,770.10], [81,015.60] Gye v McIntyre (1991) 171 CLR 609; 98 ALR 393 …. [81,670.20], [81,670.45], [81,670.50], [81,670.60], [81,670.65] H J Price, Re (No 3) (1948) 14 ABC 137 …. [81,550.5], [81,550.20] H J Price, Re (No 4) (1948) 14 ABC 142 …. [81,550.5], [82,640.25] H. Starke & Sons Pty Ltd v Von Stanke, O’Meara (2006) 95 SASR 425 …. [81,980.5] Hacker v The Owners - Strata Plan No 17572 [2005] FCA 1936; BC200511705 …. [89,760.9] Hadwick, Re [1976] Qd R 264; (1976) 13 ALR 641 …. [80,765.5], [91,550.5]

Halfey v Tait (1875) 1 VLR (E) 8 …. [81,884.1] Hall v Poolman (2007) 65 ACSR 123; 215 FLR 243 …. [81,015.80] — v Richards (1961) 108 CLR 84; [1961] ALR 816 …. [80,120.25], [81,870.30] — v Woolf (1908) 7 CLR 207 …. [80,275.5] Hall and Official Receiver, Re (1993) 18 AAR 378 …. [82,173.15] Hall, Re (1957) 20 ABC 21 …. [84,370.5] — (1994) 14 ACSR 488 …. [82,170.5], [82,170.10], [82,170.15] Halse v Norton (1997) 76 FCR 389 …. [82,113ZQ.10] Hamilton v BHP Steel (JLA) Ltd (1995) ACLC 1548 …. [80,120.55] — v Oades (1989) 166 CLR 486; 85 ALR 1 …. [81,550.5], [81,550.45] Hammant, Re; Ex parte Burke [1965] ALR 340 …. [80,765.15] Hanby, Re; Ex parte Flemington Central Spares Pty Ltd (1967) 10 FLR 378 …. [80,910.40], [80,910.60], [80,915.13] Hankey, Re; Ex parte Kratzmann (1986) 11 FCR 512; 66 ALR 702 …. [80,765.20], [81,175.50] Hansen, Re; Ex parte Hansen (1985) 4 FCR 590 …. [80,915.48] Hanshaw v National Australia Bank Ltd (2012) 16 BPR 30,991; 264 FLR 294 …. [81,240.38] Hardie v Hanson (1960) 105 CLR 451 …. [81,890.25] Harding v DCT (No 2) [2008] FCA 1985; BC200811623 …. [80,915.200], [80,915.203] Hardman, Re (1932) 4 ABC 207 …. [81,895.20] Hardoon v Belilios [1901] AC 118; (1900) 70 LJPC 9; 83 LT 573; 9 WR 209 …. [82,645.25] Hardy v Fothergill (1888) LR 13 AC 351 …. [81,650.5] Hardy, Re; Hardy v Farmer [1896] 1 Ch 904 …. [81,265.5] Hariasio Clagett, Re; Ex parte Charman [1887] WN 184 …. [81,775.5] Harkness v Partnership Pacific (1997) 143 ALR 227 …. [81,895.5], [81,895.10], [81,895.90] Harris v Caladine (1991) 99 ALR 193; 14 Fam LR 593; 172 CLR 84 …. [80,000.5], [80,750.5] Harrison v Del Santo [2007] FMCA 470 …. [81,025.30]

Harrison & Ingram, Re [1900] 2 QB 710 …. [81,885.5] Harrods Ltd v Stanton [1923] 1 KB 516 …. [81,884.1], [81,890.50] Hart, Re; Ex parte Green [1912] 3 KB 6 …. [81,885.50], [81,895.60] Harvey v Phillips (1956) 95 CLR 235 …. [81,410.15] — v RG O’Dell Pty Ltd [1958] 2 QB 78; [1958] 1 All ER 657,; [1958] 2 WLR 473; [1958] 1 Lloyd’s Rep 273 …. [81,650.1] Hasler, Re; Ex parte Official Receiver v Bank of New South Wales (1974) 23 FLR 139 …. [81,905.5] Hatfield v Health Insurance Commission (1987) 15 FCR 487 …. [81,980.10] Hatzimarcos, Re; Ex parte Dixon (1984 unreported) …. [81,885.15], [81,885.20] Hausman v White [2011] FMCA 524; BC201105087 …. [82,640.35] Hawkes, Re; Ex parte Bird (1984) 1 FCR 24 …. [83,075.15] Hawkins, Re; Ex Parte Troup (1895) 1 QB 404 …. [81,015.60] Hayes, Re; Ex parte Thomas Borthwick & Sons (A’asia) Ltd (1970) 18 FLR 216 …. [81,000.15] Healey v Prentice (No 2) [2000] FCA 1598; BC200006771 …. [82,640.25] Healy, Re; Falaren Pty Ltd (deregistered) v ASIC [2012] FCA 368; BC201202089 …. [81,760.10] Heath v Tang [1993] 4 All ER 694; [1993] 1 WLR 1421 …. [81,240.12] Hecquard, Re; Ex parte Hecquard (1889) 24 QBD 71 …. [80,970.50] Hedge, Re; Ex parte Goddard (1994) 50 FCR 421 …. [80,765.25] Hedley Byrne and Co Ltd v Heller and Partners [1964] AC 465; [1963] 2 All ER 575 …. [81,860.15] Hedwan v Hannouf [(1997) 140 FLR 229 …. [80,120.27] Heenan, Re; Ex parte Collins (t/as Hertz Carnarvon Auto Rentals) v Official Receiver (1992) 39 FCR 428; 116 ALR 146 …. [81,860.9], [81,860.15], [82,310.5] Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315; BC200308037 …. [82,310.20] Henderson v Henderson [1843] All ER Rep 378; (1843) 67 ER 313; 3 Hare 100 …. [80,910.150] — v National Australia Bank Ltd [2012] FMCA 14; BC201200432 ….

[80,915.18A] Henderson; R v [1898] AC 720 …. [81,015.95] Henning v Lynch [1974] 2 NSWLR 254 …. [82,380.5] Hepburn, Re; Ex parte DCT v Intercapco Pty Ltd (1989 unreported) …. [80,750.10] Hepburn; Ex parte DCT (2007 unreported) …. [80,750.10] Herbert Berry Associates Ltd v Inland Revenue Commissioners [1977] 1 WLR 1437 …. [80,915.13] Heshmati v Burness [2012] FMCA 1097; BC201209259 …. [81,520.25] Hewson, Re; Ex parte Sydney Stock Exchange Ltd (1967) 10 FLR 479 …. [80,910.162], [80,910.165] Heyer v Burke [2007] FMCA 1627; BC200708398 …. [81,760.10] Hibberson v George (1989) 12 Fam LR 725; [1989] ACLD 229 …. [81,860.11] Hickey, In the Marriage of (2003) 30 Fam LR 355; (2003) FLC 93-143 …. [80,785.5] Hickman, Re (1943) 13 ABC 138 …. [82,375.25] Hicks v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 757 …. [80,915.16] Hicks, Re; Ex parte Lamb (1994) 217 ALR 195 …. [81,520.25], [82,640.35], [84,370.5] Hide, Re; ex parte Llynvi Coal and Iron Company (1871) LR 7 Ch App 28 …. [81,650.1] Higgins v GS Enterprises (1989) 7 ACLC 410 …. [81,895.70] — v Wingfield [1987] VR 689 …. [81,860.11] Higgins, Re; Ex parte Higgins (1984) 4 FCR 533 …. [81,650.6] Higinbotham v Holme (1812) 19 Ves Jun 88; 34 ER 451 …. [84,713.5] Hiley v Peoples Prudential Assurance Co Ltd (1938) 60 CLR 468 …. [81,670.25], [81,670.30], [81,670.70] Hill v Piscopo [2007] FMCA 814; BC200704192 …. [81,520.25] — v — [2008] FMCA 574; BC200803319 …. [82,640.35] Hill, Ex parte (1804) 11 Ves 646; 32 ER 1239 …. [81,650.2.3] Hills Trustee v Rowlands [1896] 2 QB 124 …. [80,910.163]

Hills, Re (1912) 107 LT 95 …. [81,655.5] Hinde & Hinde [2008] FamCA 24 …. [82,310.7] Hingston v Westpac Banking Corp (2012) 200 FCR 493 …. [83,390.21] Hodby, Re (1987 unreported) …. [81,884.1] Hodby, Re; Ex parte Kenny (1987) 77 ALR 118 …. [80,765.70] Hohol v Hohol [1981] VR 221 …. [81,860.11] Holden v Van Houten [2012] FCA 4; BC201200038 …. [82,315.20] Holden, Re; Ex parte Holden (1989) 13 Fam LR 328 …. [80,990.40] Holland, Re; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165 …. [81,795.25] Holley, In the marriage of (1982) FLC 91-257 …. [81,860.10], [82,310.7] Hollier, Re; Ex parte Tasmania [1999] FCA 1348; BC9906281 …. [80,915.25] Hollis, Re (1968) 15 FLR 386 …. [81,650.6] Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd (1984) 55 ALR 594; 73 FLR 88 …. [81,250.15], [81,250.20], [81,250.25] Holt, Re; Ex parte Hodgson (1983 unreported) …. [81,900.5] Hong v Minister for Immigration & Multicultural Affairs (1998) 82 FCR 468; 55 ALD 358; 153 ALR 327 …. [82,188.5] HongKong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512; 8 ACSR 736 …. [81,005.45] Hoop & Javelin Holdings Ltd v BT Projects Pty Ltd (In liq) (No 3) [2010] FCA 191; BC201001121 …. [81,650.7] Hooper v Ewins (1997) 79 FCR 389 …. [83,075.30] Hope, Re; Ex parte Carter (1985) 59 ALR 609; [1985] ANZ ConvR 279 …. [81,860.8] Hopgood, Re; Ex parte Coveney (1957) 18 ABC 133 …. [81,995.15] Hopper, Re; Ex parte Esanda Ltd (1980) 43 FLR 452 …. [89,760.5] Horne v Concore Australia Pty Ltd (97 unreported) …. [82,070.10] Horsburg v Commonwealth (1984) 2 ACLC 142 …. [81,895.10] Horwarth, Re; Ex parte Mortgage Acceptance Nominees Ltd (1993) 43 FCR 587 …. [80,915.85] House v R (1936) 55 CLR 499; 10 ALJR 202 …. [80,770A.5], [80,910.17],

[82,645.12] Houssein v Dept of Industrial Relations and Technology (NSW) (1982) 148 CLR 88; 38 ALR 577 …. [84,335.5] Houvardas v Zaravinos (2003) 202 ALR 535 …. [81,889.7] Hovan v Goycolea-Silva [2003] FCA 234; BC200301153 …. [80,915.185] — v — [2003] FCA 378; BC200302028 …. [80,910.150] Howell, Re; Ex parte DCT (1996) 70 FCR 261 …. [80,770.70] HP Mercantile Pty Ltd v Clements [2014] NSWSC 509; BC201403194 …. [84,710.5] HP Merchantile Pty Ltd v Turco (No 2) [2010] FMCA 149; BC201001621 …. [82,390.10] Hubner v Australia and New Zealand Banking Group Ltd (1999) 88 FCR 445 …. [80,915.120], [80,915.205], [80,915.210] Hudson v Donald BC9703964 …. [80,915.55], [80,915.140] — v Whalen [1999] FCA 189 …. [82,310.5] Hudson, Re Estate of [2004] FCA 172; BC200400709 …. [82,640.25] Hudson, Re; Ex parte Australia and New Zealand Banking Group Ltd v Bird (1994) 50 FCR 281 …. [81,405.15], [81,410.5], [81,410.10] Hudson, Re; Ex parte GE Crane & Sons Ltd (1990) 25 FCR 318 …. [84,730.10], [84,760.6] Huggins, Ex parte; Re Huggins [1882] 21 Ch D 85 …. [82,113L.15] Hugh J Roberts Pty Ltd (in liq), Re (1970) 2 NSWR 582 …. [81,005.45] — (1970) 91 WN (NSW) 537 …. [81,550.20] Hughes v Hill [1937] SASR 285 …. [82,380.5] Hughes, Re; Ex parte Westpac Banking Corporation (1997 unreported) …. [82,865F.5] Humane Society International Inc v Kyodo Senpaku Kaisha Ltd (2004) 212 ALR 551 …. [80,910.17] Hume v Palmer (1926) 38 CLR 441; [1926] ALR 66 …. [81,889.7] Humphreys and Walter, Re (1931) 3 ABC 254 …. [82,383I.10] Hungerfords v Walker (1989) 84 ALR 119; 171 CLR 125; 20 ATR 36; 63 ALJR 210 …. [80,915.57] Hunter v Chief Constable of the West Midlands Police [1982] AC 529 ….

[82,310.5] Hunter, Re; Ex parte Bank of NSW (1979) 38 FLR 354 …. [81,650.15] Huntley, Re (1917) 87 LJQ 13 590 …. [81,750.10] Hurt, Re; Ex parte Hurt (1988) 80 ALR 236 …. [82,375.20], [82,375.25], [82,375.40], [82,470.35], [82,485.5] Hussain v King Investment Solutions [2007] FMCA 242; BC200701433 …. [80,915.55] — v King Investment Solutions Pty Ltd (2006) 153 FCR 428; 234 ALR 195 …. [80,915.60] Hutton, Re; Ex parte Mediterranean Machine Operations Ltd v Haigh [1969] 2 Ch 201 …. [80,450.5] HWY Rent Pty Ltd v HWY Rentals (in liq) (No 2) [2014] FCA 449; BC201403302 …. [80,915.16] Hyams v Elder Smith Goldsbrough Mort Ltd (1976) 133 CLR 637 …. [81,000.10], [81,000.15], [81,000.20] Hyams, Re; Official Receiver v Hyams (1970) 19 FLR 232 …. [81,885.15], [81,885.40], [81,885.5], [81,889.10], [81,890.35], [81,890.40] Hymix Concrete v Garrity (1977) 13 ALR 321 …. [81,895.30], [81,895.50] ICM Agriculture Pty Ltd v Young [2009] FCA 109; BC200900942 …. [80,910.17], [80,910.130], [80,910.150] ICM Agriculture Pty Ltd (ACN 006 077 765) v — (2009) 260 ALR 515 …. [81,015.97], [81,015.103] Ide, Ex parte; Re Ide (1886) 17 QBD 755 …. [81,005.30] Ierino v Gutta (2012) 43 WAR 372 …. [81,240.23] Ikon Management Pty v Hladin (2009) 58 SR (WA) 182 …. [81,650.5] Iliff, Re (1902) 18 TLR 819 …. [81,655.5] ING Bank (Aust) Ltd v Haddad [2008] FMCA 1695 …. [81,015.60] Ingram v Ingram (1938) 38 SR (NSW) 407 …. [84,339.5] Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22; BC200600179 …. [81,015.93], [82,380.5] Interchase Corp Ltd (in liq), Re (No 2) (1993) 120 ALR 143 …. [81,531.10] Interchase Corp Ltd, Re (1996) 68 FCR 481; 139 ALR 183 …. [81,550.55] Interchase Corporation Ltd (in liq) v FAI General Insurance Co Ltd [2000] 2

Qd R 30 …. [81,865.5] International Air Transport Association v Ansett Australia Holdings Ltd (2008) 242 ALR 47; 65 ACSR 1 …. [84,710.5] International Alpaca Management Pty Ltd v Ensor [1999] FCA 72; BC9900211 …. [81,015.80], [81,015.120], [81,015.130] Iskenderian, Re; ex parte Iskenderian Bros Pty Ltd (1989) 21 FCR 363; 87 ALR 294 …. [81,855.5], [81,860.9], [81,860.15], [81,860.40] Issitch v Worrell (2000) 172 ALR 586 …. [81,884.1] Jabbour v Israel [1954] 1 All ER 145 …. [81,650.1] — v Sherwood [2003] FCA 529; BC200302655 …. [81,884.5], [81,889.5] Jack v Smail (1905) 2 CLR 684; 11 ALR 372 …. [81,550.70], [81,884.1], [81,885.5] Jacka, Re; Ex parte Jacka (1986) 12 FCR 44; 66 ALR 564 …. [81,550.30] Jackson v Conway [2000] FCA 1530; BC200006600 …. [80,915.85] — v Sterling Industries Ltd (1987) 162 CLR 612; 71 ALR 457; (1987) ATPR 40-792 …. [80,000.5] Jacobs, Re; Ex parte O’Connor (1984) 1 FCR 1; 53 ALR 93 …. [80,000.40], [83,165.20] Jambrecina v Official Trustee in Bankruptcy [2003] FCA 1352; BC200307089 …. [81,250.12], [81,250.15], [82,640.20] James v Abrahams (1981) 34 ALR 657; 51 FLR 16 …. [80,770.65], [80,910.130], [80,915.185], [80,915.23], [80,915.85] — v Commonwealth Bank of Australia (1995) 13 ACLC 1604 …. [81,895.70] — v DCT (1957) 97 CLR 23 …. [80,915.215] — v FCT (1955) 93 CLR 631; 29 ALJR 587 …. [80,915.11], [80,915.18B], [80,915.110], [80,915.30], [80,915.40], [84,730.10] — v Hill [2005] FCA 853; BC200504309 …. [80,915.185] — v Oxley (1939) 61 CLR 433; [1939] ALR 55 …. [82,113L.15] James, Ex parte (1874) LR 9 Ch App 609 …. [80,000.75] James, Re (1890) LT 454 …. [84,713.5] James, Re; Ex parte Carter Holt Harvey Roofing (Aust) Pty Ltd (No 2) (1994) 51 FCR 14 …. [81,015.20]

Jay, Ex parte (1879) 24 Ch D 19 …. [84,713.5] Jeavons, Re; Ex parte Mackay (1873) 8 Ch App 643 …. [84,710.5] Jefferson v Official Trustee in Bankruptcy (2000) 175 ALR 671 …. [82,470.5], [82,795.5] Jeffrey, Re; Ex parte Honey (1871) LR 7 Ch App 178 …. [81,715.5] Jemielita, Re; ex parte Official Trustee in Bankruptcy (1996) 63 FCR 141 …. [81,860.9], [81,860.15] Jenkins v National Australia Bank Ltd [1999] FCA 1758; BC9908483 …. [80,915.85], [80,915.195] Jennings v Mather [1902] 1 KB 1; [1900] All ER Rep 788; (1901) 70 LJKB 1032; 50 WR 52 …. [82,000.40] Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681; 69 ALR 265; 61 ALJR 102 …. [80,800.20] Jensen, Re; Ex parte Jensen (1982) 45 ALR 574; 65 FLR 97 …. [81,900.20], [82,865F.5] John Arnold’s Surf Shop Pty Ltd (in liq), Re (1979) 23 SASR 222; 4 ACLR 663; (1980) CLC 40-605 …. [81,550.20] John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351 …. [83,750.35] John Holland (Construction) Pty Ltd v Jordin (No 2) (1985) 36 NTR 1; 79 FLR 210 …. [81,650.1] Johnson v Johnson (2000) 201 CLR 488; 174 ALR 655 …. [80,970.10.10], [81,015.105] — v Royal Mail Steam Packet Company (1867) LR 3 CP 38 …. [81,884.1], [81,884.14] Johnson, Ex parte Johnson v Tonkin, Re (1994) 53 FCR 70; 123 ALR 607 …. [80,910.17], [80,910.90], [80,910.137], [80,915.14] Johnson, Re [1904] 1 KB 134 …. [84,713.5] Johnstone v Commonwealth (1979) 143 CLR 398 …. [84,375.10] — v Guss BC9806988 …. [81,000.5] Johnstone, Re; Ex parte Cole (1984) 3 FCR 32 …. [81,885.10], [81,885.15], [81,885.20] Joiner v Bailey [2004] FCA 1411; BC200407286 …. [83,360.10], [83,390.30] Jolly v District Council of Yorketown (1968) 119 CLR 347; 16 LGRA 35;

[1969] ALR 89 …. [83,390.5] Jones v Australian Olives Ltd [2009] FMCA 46; BC200900230 …. [80,910.140], [80,910.145] — v Southall & Bourke Pty Ltd [2004] FCA 539; BC200402346 …. [81,860.8], [81,895.90], [81,895.100], [81,895.110] Jones Shopfitting Co Pty Ltd (in liq) v National Bank of Australasia Ltd (1982) 68 FLR 282 …. [81,895.110] Jones’s Will, Re (1886) 23 LT Rep NS 211 …. [84,713.5] Jones, Re; Ex parte Lovering (1874) LR 9 Ch App 586 …. [80,770.50] Jonson, Re; Ex parte Prentice BC9703993 …. [81,005.45], [81,531.5], [81,531.20], [81,550.20] Joossé v Commissioner of Taxation [2007] FCA 445; BC200702082 …. [81,015.60] — v DCT (2003) 54 ATR 387 …. [81,015.60] Joosse v Deputy Commissioner of Taxation (2004) 137 FCR 576; 57 ATR 92 …. [81,015.60], [81,015.65], [81,250.60] Jowitt v Callaghan, Re (1938) 38 SR (NSW) 512 …. [81,775.5] JTC McKee, Re; Ex parte Laroar Holdings (1996) 71 FCR 156 …. [81,531.5], [81,531.20], [81,531.30] Judd, Re; Ex parte Pike (1924) 24 SR (NSW) 537 …. [80,910.125] Judgment Debtor (530 of 1908), Re a [1908] 2 KB 474 …. [80,915.18B], [80,915.30], [84,730.10] Jury, Re; Ashton v Prentice (1999) 92 FCR 68 …. [81,889.10], [81,890.15] Justices of Kent; R v (1873) LR8QB 305 …. [82,795A.5] Kakavas v Crown Melbourne Ltd [2011] FMCA 11; BC201100117 …. [80,915.85] Karas, Re; Ex parte Page (1997 unreported) …. [81,531.10], [81,531.20] Karounos v Official Trustee (1988) 19 FCR 330; 80 ALR 626 …. [81,531.5], [81,550.10], [81,550.20], [81,550.5], [82,640.25] Karounos, Re; Ex parte Official Trustee in Bankruptcy (1989) 25 FCR 177; 89 ALR 580 …. [83,390.5] Kassab, Re; Ex parte Commissioner of Taxation (1994) 55 FCR 305 …. [80,915.25]

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Kidd, Re; Ex parte Official Assignee (1903) 3 SR (NSW) 363 …. [80,910.160] Killoran v Duncan [1999] FCA 1574; BC9907553 …. [80,915.172] King, Re; Ex parte Commercial Bank of Australia Ltd (No 2) [1920] VLR 490 …. [81,005.45] Kinsela, Re; Ex parte Butterell (1984) 3 FCR 524; 53 ALR 557 …. [81,870.25] Kirk v Ashdown [1999] FCA 1664; BC9907800 …. [80,915.45], [80,915.147] — v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) (2010) 239 CLR 531; 262 ALR 569 …. [80,910.17] Kirkwood and Jenkins and Peake, Re (1994 unreported) …. [82,173.10] Kitson v Hardwick (1872) LR 7 CP 473 …. [82,000.20] Kitt, Re [2005] FCA 1564; BC200512035 …. [81,795.15] Klau, Re (1987) 74 ALR 67 …. [80,000.5] Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161 …. [80,915.10], [80,915.18B], [80,915.30], [80,915.35], [80,915.40], [80,915.55], [80,915.70], [80,915.75], [84,730.10], [84,730.15] Kleiss, Re; Ex parte McDonough (1968) 15 FLR 281 …. [82,000.25] Klekner, Re (1966) 8 FLR 53 …. [81,550.65] Klewer v Walton [2004] FCAFC 284; BC200407309 …. [80,910.40] Klewer, Re; Klewer v — [2004] FCA 410; BC200401696 …. [80,915.18] Klinger v Nicholl [2005] FCAFC 153; BC200505644 …. [81,015.60], [81,015.100] Knight v FP Special Assets Ltd (1992) 174 CLR 178 …. [82,470.45] —v Lawrence [1993] BCLC 215, 231 …. [81,240.23] Knowles & Gaudi [2008] FamCA 436 …. [82,310.7] Kocijan, Re (1991) 14 Fam LR 747; (1991) FLC 92-230 …. [81,860.10], [81,860.11] Kok v Commonwealth Development Bank [2004] NSWSC 51; BC200400352 …. [81,240.12] Komesaroff v Law Institute of Victoria [1997] FCA 965 …. [80,770.70]

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Mann v Carnell (1999) 201 CLR 1; 168 ALR 86 …. [81,525.20], [81,550.45] Mannella, Re; Ex parte Official Trustee v Giorgio (1989) 21 FCR 50 …. [81,550.70], [81,890.5] Mannigel v Aitken (1983) 77 FLR 406 …. [80,450.5] Manpac Industries Pty Ltd v Ceccattini, (2002) 20 ACLC 1304 …. [80,120.55] Marks v R (1937) 57 CLR 58 …. [84,365.5] Marshall v General Motors Acceptance Corporations Australia (2003) 127 FCR 453; 199 ALR 109 …. [80,915.30], [80,970.12] — v Western Australia (1998) 84 FCR 363 …. [81,650.6] Marshall, Re (1973) 22 FLR 71 …. [80,000.40], [83,165.5] Martin v Powning (1868) 38 LJ Ch 212 …. [82,375.25] Martin, Re [1972] ALR 403; (1971) 18 FLR 372 …. [80,915.47] Martindale ACF Pty Ltd v Johnson [2013] FMCA 63; BC201300418 …. [81,750.10] Massih v Esber (2008) 250 ALR 648 …. [80,765.80] Masters, Re; Ex parte Gerovich (1985 unreported) …. [81,760.10] Mateo v Official Trustee in Bankruptcy (2002) 117 FCR 179; 188 ALR 667 …. [81,884.10], [81,900.30] Mathai v Nelson (2012) 208 FCR 165; 133 ALD 121 …. [81,889.3] Matheson v Scottish Pacific Business Finance Pty Ltd [2005] FCA 670; BC200503515 …. [80,915.48], [82,000.35], [84,730.10] Mathieson’s Trustee v Burrup Mathieson & Co [1927] 1 Ch 562 …. [80,000.1], [81,670.65] Matteucci, Re; Bankrupt Estate of Matteucci v Gollant [2013] FCA 6; BC201300062 …. [80,770A.5] Matthews v Geraghty (1986) 43 SASR 576 …. [81,895.70] Maxwell-Smith v Donnelly [2005] FCA 332; BC200501685 …. [82,315.20] — v Donnelly (No 2) [2011] FCA 259; BC201101455 …. [82,645.25] — v Donnelly (No 3) [2011] FCA 1226; BC201108364 …. [82,645.12] Mayger v Prentice [2000] FCA 99; BC200000252 …. [82,640.35] Mayne v Jaques (1960) 101 CLR 169; [1960] ALR 289 …. [80,750.5], [82,470.5], [82,795.5]

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Michael v Thompson (1894) 20 VLR 548 …. [81,890.10], [81,890.35] Mid-Kent Fruit Factory, Re [1896] 1 Ch 567 …. [81,670.40] Middleton v Pollock: Ex parte Elliott (1876) 2 Ch D 104; 45 LJ Ch 293 …. [81,889.10] — v Pollock; Ex parte Knight and Raymond (1875) LR 20 Eq 515 …. [80,910.130] Midgley, Re (1913) 108 LT 45 …. [80,910.166] Midland Montagu Australia Ltd v Harkness (1994) 35 NSWLR 150; 124 ALR 407; 12 ACLC 819 …. [81,650.77] Milan Tramways Co, Re; Ex parte Theys (1884) 25 Ch D 587 …. [81,670.70] Miles v Shell Company Australia (1998) 156 ALR 133 …. [81,750.10] Militz v Bowering-Wood [1954] SASR 175 …. [81,795.15] Milland, In the marriage of (1980) 7 Fam LR 478; (1981) FLC 91-065; (1980) 54 FLR 270 …. [82,310.7] Millane v President of the Shire of Heidelberg [1928] VLR 52 …. [81,250.20] Miller v Cameron (1936) 54 CLR 572; [1936] ALR 301; (1936) 10 ALJR 35a …. [82,800.5] —v Niven [2001] FMCA 32 …. [80,915.46] Miller, Re [1901] 1 QB 51 …. [80,910.165] Mills, Re; Ex parte Bondor Pty Ltd BC9102992 …. [80,915.25], [82,315.15] Mills, Re; Ex parte Lloyd’s v Prentice (1997) 73 FCR 551 …. [83,145.35], [83,390.1] Milner, Re; Ex parte Milner (1885) 15 QBD 605 …. [83,165.20] Mineral Securities Australia Ltd, Re [1973] 2 NSWLR 207 …. [82,000.30] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 …. [81,015.56] Minister for Immigration and Ethnic Affairs, Re; Ex parte Lai Qin (1997) 186 CLR 622; 143 ALR 1; 71 ALJR 533 …. [80,765.20], [81,550.20] Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 65 ALD 1; 178 ALR 421; 205 CLR 507 …. [83,390.10] Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001)

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Mulhern v Bank of Queensland (2012) 271 FLR 396 …. [81,015.30] Mullane v Mullane (1983) 45 ALR 291; 8 Fam LR 777; 158 CLR 436 …. [81,890.37] Murdaca v Acounts Control Management Services Pty Ltd [2007] FCA 964; BC200704974 …. [80,800.20], [81,015.210] Murphy v KRM Holdings Pty Ltd (1985) 8 FCR 349; 63 ALR 397; 9 ALN N55 …. [81,980.10] — v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 135 FCR 550 …. [89,760.10] Murray v Barlee (1834) 3 My & K 209, 220; 40 ER 80,84 …. [81,240.23] — v Figge (1974) 4 ALR 612 …. [82,380.5] Murray and Moore, Re; Ex parte Silk and Textile Printers Ltd (1955) 17 ABC 72 …. [80,980.15] Muschinski v Dodds (1985) 11 Fam LR 930; 62 ALR 429; 160 CLR 583 …. [80,750.6], [81,860.11], [81,860.8], [81,884.12], [81,884.5], [81,889.5] Mutton, Re (1880) 19 QBD 102 …. [84,360.5] Muttukumaru, Re (1995) 57 FCR 384 …. [82,113ZQ.25] Mutual Life & Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 556 …. [81,860.15] Myers, Re; Ex parte Mulholland (1932) 5 ABC 128 …. [80,985.5] NA Kratzmann Pty Ltd (in liq) v Tucker (1966) 123 CLR 257 …. [81,885.5], [81,890.40] Naghten v Commonwealth Bank of Australia, Re (1998 unreported) …. [80,910.125] Napiat Pty Ltd v Salfinger; Re Salfinger (No 3) [2011] FCA 1279; BC201108692 …. [80,990.20] Napier v Public Trustee (1982) 32 ALR 153 …. [81,860.11] Nathan v Burness (2011) 193 FCR 360 …. [81,550.5], [81,550.75] — v Burness (No 2) [2011] FCA 289; BC201101771 …. [82,310.5] National Australia Bank v Pollak (2001) 186 ALR 44 …. [91,105.5] National Australia Bank Ltd v Acheson [2011] FMCA 437; BC201105300 …. [81,015.20] — v Cranney [2011] FMCA 169; BC201101611 …. [83,390.14]

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Olivieri v Stafford (1989) 24 FCR 413; 91 ALR 91 …. [80,915.18A], [81,015.60] One.Tel Pty Ltd, Re (2002) 43 ACSR 305; 171 FLR 206 …. [82,115.1] Opie v Opie (1951) 84 CLR 362; 25 ALJR 411 …. [80,910.60], [80,910.75], [80,910.190], [80,915.13] Organ v Sandwell [1921] VLR 622 …. [81,860.11] Orix Australia Corp Ltd v McCormick (2005) 145 FCR 244; 222 ALR 507 …. [81,175.55] Osborn & Bernotti t/as G04 Productions v McDermott t/as RA McDermott & Co & Karmine Pty Ltd [1998] 3 VR 1 …. [80,910.17] Osborn, Re (1989) 25 FCR 547; 91 ALR 135 …. [81,884.5], [81,889.5] Oshlack v Richmond River Council (1998) 193 CLR 72 …. [81,015.56] Oskar, Re; Ex parte Commonwealth (1984) 55 ALR 717 …. [80,280.5] Osmond v Public Service Board of New South Wales [1984] 3 NSWLR 447 …. [81,980.10] Oswald, Re; Ex parte Official Trustee in Bankruptcy (1985) 61 ALR 339 …. [81,795.25] Owen, Ex parte; Re Owen (1884) 13 QBD 113 …. [80,975.30] Owens v Comlaw (No 62) Pty Ltd [2006] VSCA 151; BC200605225 …. [81,240.12], [81,250.43] — v Lofthouse [2007] FMCA 238; BC200701432 …. [80,750.10] Owners Corp Strata Plan 3438 v Hudson BC9803067 …. [80,910.105] Owners Corporation Strata Plan 62734 v O’Connell [2011] FMCA 424; BC201104063 …. [81,015.80], [81,015.97] Owners of Strata Plan No 5459 v Mason (1999) 91 FCR 92 …. [80,915.11] Owners Strata Plan No 11723 v Singh [2012] FMCA 308; BC201202211 …. [81,015.60] Owners Strata Plan No 55932 v Deary [2011] FMCA 584; BC201105707 …. [81,015.80] Ozer v Australian Liquor Marketers Pty Ltd [1999] FCA 1206; BC9906419 …. [82,310.25] Padagas, Re; Ex parte Carrier Air-Conditioning Pty Ltd (1977) 30 FLR 170 …. [80,910.95], [80,975.50]

Paddle River Construction Ltd, Re (1961) 35 WWR 605 …. [83,390.5] Page v Commonwealth Life Assurance Society Ltd, Re (1936) 36 SR (NSW) 85 …. [81,775.5] Pahoff, Re; Ex parte Oglivie (1961) 20 ABC 17 …. [81,884.1], [81,885.5] Palasty v Tomko [2008] FMCA 10; BC200800158 …. [80,910.63] Palicave Pty Ltd v O’Farrell [2009] FMCA 9; BC200900442 …. [81,015.140] Palmer and Minister for the Capital Territory, Re (1978) 1 ALD 183; 23 ALR 176 …. [81,980.10] Palmer, Re; Ex parte Brims [1898] 1 QB 419 …. [80,910.180] Palmer, Re; Ex parte Taylor (1988) 18 FCR 271; 79 ALR 621 …. [82,470.5] Pannowitz, Re; Ex parte Wilson (1975) 6 ALR 287; 38 FLR 184 …. [80,910.70], [80,910.87], [80,910.185], [81,005.30] Pappas v Rimar Pty Ltd (1984) 55 ALR 327; 75 FLR 175 …. [84,355.5] — v Tapp (1997) 78 FCR 524 …. [82,310.20], [82,310.25] Parianos v Lymlind Pty Ltd (1999) 164 ALR 229 …. [80,915.130] — v — (1999) 93 FCR 191; 164 ALR 229 …. [80,915.18B] — v Melluish (Trustee) (2003) 30 Fam LR 524; (2003) FLC 93-130 …. [81,860.8] Parij v Parij (1997) 72 SASR 153; 195 LSJS 340 …. [81,884.12] Parsons v Bunge (1941) 64 CLR 421 …. [80,910.164] — v McBain (2002) 109 FCR 120; 192 ALR 772 …. [81,240.23], [81,884.5], [81,889.5] Pascoe v Dyason [2011] NSWSC 1217; BC201109929 …. [81,240.40] — v Erten [2011] NSWSC 769; BC201105384 …. [81,025.30] — v Nguyen [2007] FMCA 194; BC200701431 …. [80,750.6] Passmore v Underdown (Deceased) [2010] FCA 70; BC201000457 …. [83,750.90] Pastro v Official Trustee in Bankruptcy [2000] FCA 744; BC200003139 …. [81,889.9], [81,890.15] Patane v Asteron Life Ltd [2004] FCA 232; BC200401022 …. [80,910.40] Paterson, Re [1936] NZLR 65 …. [80,910.166] Patrick Partners, Re; Ex parte Commercial Banking Co of Sydney Ltd (1976)

10 ALR 71 …. [80,000.40], [83,180.5] Patrick, Re (1935) ABC 124 …. [81,700.5] Pattison v Hadjimouratis (2006) 155 FCR 226; 236 ALR 1 …. [82,310.25], [82,310.30] — v Inspector-General in Bankruptcy; Re Ansett (1994) 32 ALD 679 …. [82,113N.5], [82,113L.25] — v Schiffer [2007] FMCA 319; BC200701854 …. [82,113Y.5] Payne, Re (1858) 25 Beav 556; 55 ER 749 …. [84,713.5] Pearce v Bastable’s Trustee in Bankruptcy (1901) 2 Ch 122 …. [81,240.10] — v Cocchiaro (1977) 137 CLR 600; 14 ALR 440 …. [84,375.5] Pearce (Trustee) v Mulhern (Bankrupt) (No 3) (2012) 124 ALD 420 …. [81,535.2], [81,550.5] Pearlman (Veneers) SA (Pty) Ltd v Bartels [1954] 3 All ER 659; [1954] 1 WLR 1457 …. [82,000.35] Pearson v Dolman (1866) LR 3 Eq 315 …. [84,713.5] Pearson, Re; Ex parte Wansley (1993) 46 FCR 55; 17 Fam LR 224 …. [81,895.130], [81,900.20], [81,900.30], [82,113ZQ.5] Peat v Jones (1881) 8 QBD 147 …. [81,670.50] Pegler v Dale [1975] 1 NSWLR 265; (1975) 6 ALR 62; 24 FLR 401 …. [81,240.7], [82,270.5], [82,275.20], [82,275.25], [82,275.35] Peldan v Anderson (2006) 227 CLR 471; 229 ALR 432 …. [81,889.9] Pelechowski v NSW Land and Housing Commission [2000] FCA 233; BC200000790 …. [81,250.25] Pelka v Secretary, Dept of Family & Community Services [2006] AAR 43; [2006] FCR 151; [2006] FCA 735 …. [80,120.17] Peninsula Service Pty Ltd (in liq), Re (1987) 91 FLR 4 …. [81,890.25], [81,890.30] Penning v Steel Tube Supplies Pty Ltd (1988) 80 ALR 689 …. [81,005.30] Penning, Re; Ex parte State Bank of South Australia (1989) 89 ALR 417 …. [81,005.35] — (1987 unreported) …. [80,910.166] Perpetual Nominees Ltd v Masri Apartments Pty Ltd (2004) 49 ACSR 714; 183 FLR 142 …. [89,760.10]

— v Pascoe [2007] FMCA 529; BC200702670 …. [81,785.15] Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; 41 ALR 441 …. [81,410.15] Pertsoulis, In the Marriage of (1979) 4 Fam LR 613; (1979) FLC 90-613; 35 FLR 408 …. [81,890.37] — (1993) 16 Fam LR 779; (1993) FLC 92-406; 114 FLR 89 …. [81,890.37] Peters, Re; Ex parte Lloyd (1882) 47 LT 64 …. [84,370.5] Peters, Re; Ex parte NZI Securities Ltd (1992 unreported) …. [83,135.10] Petratos v Provident Capital Ltd [2009] FMCA 1168 …. [81,015.125] Petrie v Redmond (1942) 13 ABC 44 …. [81,015.60] Pettitt v Pettitt [1970] AC 777; [1969] 2 All ER 385 …. [81,860.11] Pevsner, Re; Ex parte Official Trustee in Bankruptcy (1983) 68 FLR 254 …. [81,240.7], [81,860.5] Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457; 33 ALR 465; (1981) ATPR 40-197 …. [82,310.4] Philip Morris Ltd v Ainley [1975] VR 345 …. [81,650.2] Philips Electronics Australia Ltd v Roberts [2006] FMCA 911; BC200605415 …. [80,910.87], [80,910.90] Phillips and Inspector-General in Bankruptcy, Re [2011] AATA 25 …. [82,188.5] Phillips, Re (1897) 76 LT 531 …. [80,910.168] Piepkorn v Scott [2005] FCAFC 88; BC200503177 …. [82,310.25] Pike, Re (1896) 17 LR (NSW) B & P 34 …. [80,910.162], [80,910.165] Pillai v Comptroller of Income Tax [1970] AC 1124 …. [80,915.30], [80,915.40], [84,730.10] Pioneer Concrete Pty Ltd v Ellston (1985) 10 ACLR 289 …. [80,120.55] Pit v Cholmondeley (1754) 2 Ves Sen 565; 28 ER 360 …. [81,240.23] Pitts v La Fontaine (1880) 6 App Cas 482 …. [80,765.50] Piwinski v Corporate Trustees of the Diocese of Armidale [1977] 1 NSWLR 266 …. [81,240.7], [81,250.55] Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 …. [81,865.3] Plant v Ken Smith Electronics Pty Ltd [2000] FMCA 7 …. [80,910.60]

Player, Re; Ex parte Harvey (1885) 15 QBD 682 …. [81,885.5] Plimmer v Wellington Corporation (1884) 9 App Cas 699 …. [81,860.11] Plummer, Re [1900] 2 QB 790 …. [81,885.5] Policy Nominees Pty Ltd (prov liq apptd) v McDougall BC9705237 …. [83,085.10] Pollack, Re; Ex parte DCT (1991) 32 FCR 40; 103 ALR 133 …. [80,910.95], [80,975.50] Pollak v Lombe [2004] FCA 362; BC200401407 …. [81,005.45], [81,550.20] Pollard, Re; Ex parte Lensing Management Co Pty Ltd (1991) 33 FCR 284 …. [80,910.40], [81,015.150] Pollitt, Re; Ex parte Minor [1893] 1 QB 455 …. [81,855.10] Pollnow v Armstrong [2000] NSWCA 245 …. [81,250.20] — v Queensboro Pty Ltd (1988 unreported) …. [80,910.140] Pollock v Deputy Commissioner of Taxation (Cth) (1994) 94 ATC 4148 …. [82,310.5] Polyukhovich v Commonwealth (1991) 172 CLR 501; 101 ALR 545 …. [84,760.20] Ponsford, Baker & Co v Union of London and Smith’s Bank Ltd [1906] 2 Ch 444 …. [81,855.10] Pope, Re; Ex parte Dicksee [1908] 2 KB 169 …. [81,885.20], [81,900.30] Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; 36 ALR 3; 55 ALJR 621 …. [80,770A.5], [80,910.150], [81,015.140], [81,650.1] Porter v OAMPS Ltd (2004) 207 ALR 635 …. [80,915.85] Posner v Chen (No 2) [2007] FMCA 502; BC200702661 …. [81,885.65], [81,889.30] Posner, Re [2007] FMCA 610; BC200702935 …. [80,770.55], [83,115.10] Poulson, Re [1976] 2 All ER 1020; [1976] 1 WLR 1023 …. [81,550.5], [82,640.25] Poulson, Re; Ex parte Hempenstall Bros Ltd (No 2) (1929) 1 ABC 54 …. [81,015.80] Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 …. [81,015.95], [81,015.210]

Prentice v Cummins (No 5) (2002) 124 FCR 67; 51 ATR 400 …. [81,889.10] Pretorius v Daltons Carpet Tiles Pty Ltd (1984) 1 FCR 346; 54 ALR 743 …. [83,075.30], [83,165.30] Price v Parsons (1936) 54 CLR 332; [1936] ALR 115; [1936] 9 ALJR 421 …. [81,884.1] — v West London Investment Building Society [1964] 2 All ER 318; [1964] 1 WLR 616 …. [89,760.15] Principal Strategic Options Pty Ltd, Re [2001] FCA 664; BC200102900 …. [80,765.5], [80,765.50] Probiotec Ltd v University of Melbourne (2008) 166 FCR 30 …. [81,015.56] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 …. [80,120.17], [80,915.35] Prow, Re; Ex parte Dalgety Farmers Ltd (1985) 5 FCR 233 …. [80,910.30] Prudential-Bache Securities (Aust) Ltd v Warner [1999] FCA 1143; BC9905004 …. [80,915.10], [80,915.20] PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515; 107 ALR 199 …. [81,884.1], [81,884.8], [81,885.15], [81,889.5], [81,889.10], [81,890.10], [81,890.25], [81,890.35], [81,890.40], [81,890.5] Puels v Excelerate Funding Pty Ltd (2005) 214 ALR 616 …. [80,910.20] Pugliese, Re; Ex parte Chase Manhattan Bank Australia Ltd (1993) 44 FCR 536 …. [80,915.110] Puntoriero, Re; Ex parte Nickpack Pty Ltd (1991) 104 ALR 523 …. [81,860.30], [81,895.50] Purden Pty Ltd v Registrar in Bankruptcy (1982) 43 ALR 512 …. [80,970.20] Putland v R [2003] NTCCA 3; BC200301706 …. [84,335.5], [84,355.10] Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328; 45 ALR 509; 57 ALJR 236; (1983) ATPR 40-341 …. [81,531.20], [81,550.45] QBE Insurance (Aust) Ltd v Lois Nominees Pty Ltd and the persons detailed in the schedule attached to the Appeal Notice (Civil) [2012] WASCA 186; BC201207427 …. [81,865.5] QBM Lawyers (A Firm) v Quinlivan [2011] FMCA 520; BC201106520 ….

[81,000.15] Queensland v Beames [2003] QSC 399; BC200307129 …. [81,250.20] — v JL Holdings Pty Ltd (1997) 189 CLR 146; 141 ALR 353 …. [80,915.20] Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 …. [81,895.80], [81,895.100] Quinn v Official Trustee in Bankruptcy (1996) 63 FCR 136; 137 ALR 501 …. [81,405.5] Quinn, Re (1995) 143 ALR 85 …. [82,640.10] Qun Xiong (Kenny) Yu v Todaytech Distribution Pty Ltd (ACN 059 027 250) [2006] FCA 131; BC200600686 …. [81,015.100] Qureshi v Commonwealth Bank of Australia [2007] FCA 2096; BC200711590 …. [80,915.86] R v Michell (1880) 50 LJ (MC) 76; 43 LT 572 …. [84,325.10] —v Ross-Jones; Ex parte Green (1984) 156 CLR 185; 56 ALR 609 …. [81,900.30] — v Ward (1978) 140 CLR 584 …. [84,375.10] Radcliffe, Re; Ex parte Bell’s Thermalag Pty Ltd (1968) 11 FLR 453 …. [80,910.165] Radich v Bank of New Zealand (1993) 45 FCR 101; 116 ALR 676 …. [80,745.5], [81,015.110], [81,015.125] Radio Corp Pty Ltd v Bear (1961) 108 CLR 414; [1962] ALR 42 …. [81,855.10] Rae v Samuel Taylor Pty Ltd (1963) 110 CLR 517; [1965] ALR 102 …. [81,870.5], [81,875.10] Ramage v Waclaw (1988) 12 NSWLR 84 …. [81,250.17] Rambaldi v Woodward [2013] FCA 89; BC201300596 …. [81,884.1] Rambaldi (The Trustee of the Estate of Atkinson, a Bankrupt) v — [2012] NSWSC 434; BC201203148 …. [80,455.5], [90,150.5] Rams Mortgage Corporation Ltd v Skipworth (No 2) (2007) 239 ALR 799; 210 FLR 11 …. [81,990.5], [81,995.25] Rangott v Marshall (2004) 139 FCR 14 …. [82,315.10] Rangott, Ex parte (1992) 39 FCR 573 …. [82,405.5], [82,790.10]

Rankin v Official Trustee in Bankruptcy (2005) 220 ALR 723 …. [81,240.11] Raschilla v Gulluni (1987) 14 FCR 57 …. [80,000.40] Raymond, Re (1992) 36 FCR 424 …. [82,310.25] RDN Developments Pty Ltd v Shtrambrandt (2012) 262 FLR 464 …. [82,310.20], [83,390.40] Re: Svir; Ex Parte Deputy Commissioner of Taxation (1998) 83 FCR 314; 154 ALR 710; 39 ATR 113 …. [80,910.125], [81,015.130] Real Estate & Business Agents Supervisory Board (REBA) v Low (No 2) [2009] FMCA 142; BC200901172 …. [81,015.230], [81,650.6] Reasonable Endeavours Pty Ltd v Dennehy (2001) 107 FCR 144; 182 ALR 195 …. [80,910.87], [80,910.90] — v — [2002] FCA 1472; BC200207167 …. [80,910.17], [80,915.55], [80,970.11], [81,015.60] Rees v Bank of New South Wales (1964) 111 CLR 210 …. [81,895.10], [81,895.30], [81,895.80] — v — (1964) 111 CLR 666 …. [80,120.50] — v Kratzmann (1965) 114 CLR 63; [1966] ALR 3; (1965) 39 ALJR 204 …. [81,550.20] Rees, Re; Stubberfield v Stubberfield [1999] FCA 1862; BC9908618 …. [82,145.5] Registrar of the Accident Compensation Tribunal v FCT (1993) 178 CLR 145 …. [80,455.10] Registrar of Titles (WA) v Franzon (1975) 132 CLR 611; 7 ALR 383; 50 ALJR 4 …. [82,310.15] Reichel v Magrath (1889) 14 App Cas 665 …. [81,865.5] Reid v Hubbard [2003] FCA 1424; BC200307440 …. [80,910.50], [80,910.60], [80,915.195], [81,015.100], [81,015.160], [81,015.60], [84,715.5] Repatriation Commissioner v Gordon (1990) 26 FCR 569; 21 ALD 145; 100 ALR 255 …. [80,970.10.5], [89,760.10] RHG Mortgage Corporation Ltd v Araya [2008] FMCA 1324 …. [81,015.140] Rhodes, Re [1899] 2 QB 347 …. [80,000.75]

Rhodes, Re; Ex parte Heyworth (1884) 14 QBD 49 …. [80,770.10], [80,915.85], [80,970.10] Rhodin v Frost BC8500329 …. [81,900.10] Ricegrowers Cooperative Mills Ltd v Bannerman (1981) 38 ALR 535; (1981) ATPR 40-262; 56 FLR 443; 4 ALN No 52 …. [81,980.10] Richard Walter Pty Ltd v Federal Commissioner of Taxation (1965) 33 ATR 97 …. [82,310.7] Richards v Lloyd (1933) 49 CLR 49 …. [81,895.10] Richards, Re; Ex parte Sommers (1947) 14 ABC 112 …. [81,005.30] Richardson v Commercial Banking Co of Sydney (1952) 85 CLR 110 …. [81,895.80] — v Leonard Cohen & Co [2008] FCA 1392; BC200808035 …. [81,015.60] Richmond v BMW Australia Finance Ltd (No 1) [2009] FCAFC 24; BC200901378 …. [80,800.10], [83,075.7] — v BMW Australia Finance Ltd (No 2) (2009) 174 FCR 232; 254 ALR 76 …. [81,015.80] Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd (2010) 265 ALR 112 …. [81,550.20] Rigg v Baker (2006) 155 FCR 531; 236 ALR 629 …. [81,015.20], [81,015.95], [81,015.97], [82,310.20], [82,310.25], [82,310.5] Riley v Osborne [1986] VR 193 …. [81,860.11] Rimar Pty Ltd v Pappas (1986) 160 CLR 133; 64 ALR 9 …. [81,900.30], [81,915.10], [84,355.5] Ringuet, Re; Ex parte Knight (1986) 11 FCR 45; 71 ALR 295 …. [83,125.5] Riviere, Re; Ex parte Original Mont de Piete Ltd (1919) 20 SR(NSW) 77 …. [80,915.18A] RMG Acquisitions No 8 Pty Ltd v Collard (2011) 252 FLR 188 …. [80,915.10] Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (Receiver & Manager Appointed) (1997) 42 NSWLR 462 …. [80,910.125] Roberts v Gill and Co [2011] 1 AC 240; [2010] All ER (D) 180 (May); [2010] NLJR 768; [2010] UKSC 22 …. [81,250.17] Roberts, Re (1976) 12 ALR 730 …. [80,000.75] — (1998 unreported) …. [83,075.30]

Roberts, Re; Ex parte Australian Telecom Employees’ Credit Co-op Ltd (1982 unreported) …. [80,120.25] Roberts, Re; Ex parte Evans (1989 unreported) …. [80,915.25] Robertson v Banham & Co [1997] 1 All ER 79; [1997] 1 WLR 446 …. [89,760.15] — v Grigg (1932) 47 CLR 257 …. [81,895.40], [81,895.90], [81,900.10] — v Moran [2011] FMCA 496; BC201105307 …. [83,390.14] Robertson Jnr v DCT (2004) 55 ATR 106 …. [82,275.25] Robins v Black [2009] FMCA 45; BC200900241 …. [91,550.5], [91,550.10] Rochford v Hackman (1852) 9 Hare 474 …. [84,713.5] Rochfort v Battersby (1849) 2 HLC 388; 9 ER 1139 …. [81,240.12] Rodgers v Schmierer [2003] FCA 386; BC200302069 …. [81,889.25] Rodgers, Re; Ex parte CMV Parts (1989) 20 FCR 261 …. [81,760.10] Rodway v White [2009] WASC 201; BC200906244 …. [80,735.7], [81,350.10] Rogers v Asset Loan Co Pty Ltd [2006] FCA 1708; BC200610301 …. [81,860.9] — v — [2006] FCA 434; BC200602418 …. [81,250.25], [81,860.12.5] — v R (1994) 181 CLR 251; 123 ALR 417 …. [82,310.5] Rogerson v Tchia (1995) 123 FLR 126 …. [80,915.25] Rohde, Re (1993) 42 FCR 149; 115 ALR 705 …. [80,770A.5], [80,770.75], [82,163.10] Rolfe and Bank of Australasia v Flower, Salting and Co, Re (1865) LR 1 PC 27 …. [81,690.5] Rolloswin Investments v Chromolit Portugal Cutelarias E Produtos Metálicos SARL [1970] 2 All ER 673; [1970] 1 WLR 912 …. [89,760.5] Romano v Peldan [2003] FCA 767; BC200304694 …. [80,910.180], [80,915.220] Romeo v Trust Company (PTAL) Ltd [2012] NSWCA 62; BC201202030 …. [81,240.40] Rondo Building Services Pty Ltd v Starkey [2005] FMCA 275 …. [82,390.12], [82,645.12] Rookharp Pty Ltd v Webb (2011) 254 FLR 410 …. [80,910.125]

Rosaub Pty Ltd (in liq), Re (2005) 54 ACSR 371; 192 FLR 395 …. [81,760.10] Rose v Buckett [1901] 2 KB 449 …. [81,240.12] Rose, Re; Godfrey v Whitton [2006] FCA 823; BC200604876 …. [82,113ZQ.5] Rosenberg, Re; Ex parte Westpac Banking Corp (1993 unreported) …. [80,915.25] Rosher, Re (1884) 26 Ch D 801 …. [84,713.5] Ross v Costigan (1982) 59 FLR 184; 59 FLR 184 …. [82,113ZA.5] Rozenbes v Kronhill (1956) 95 CLR 407; [1956] ALR 1004; (1956) 30 ALJR 470 …. [80,770.5], [81,015.95], [81,015.97], [81,015.100], [81,015.125], [81,015.160], [81,240.16] Rudy, Re; Ex parte Rudy (1986) 13 FCR 175 …. [81,250.50] Ruffle, Ex parte (1873) LR 8 Ch App 997 …. [83,135.5], [83,135.10] Rushton, Re; Ex parte National Westminster Bank Ltd v Official Receiver [1972] Ch 197 …. [80,120.30], [81,690.5] Russell v East Anglian Railway Co (1850) 42 ER 201; 20 LJ Ch 257; 3 Mac & G 104 …. [81,005.30] — v Polites Investments Pty Ltd [2011] FMCA 476; BC201104754 …. [81,015.95] — v — [2012] FCA 11; BC201200074 …. [81,015.55] Russo v Private Funds Management Pty Ltd [2011] FMCA 8; BC201100057 …. [81,015.80] Rustic Homes Pty Ltd, Re (1988) 49 SASR 41; 13 ACLR 105 …. [89,760.10] Ryder v Hartford Insurance Co [1977] VR 257 …. [81,650.1], [81,650.2] Sabri, Re; Ex parte Brien v Australia and New Zealand Banking Group Ltd (1997) 21 Fam LR 213; 137 FLR 165 …. [81,884.10], [81,900.30] Sabri, Re; Ex parte Sabri v Brien (1995) 60 FCR 131; 19 Fam LR 710 …. [80,790.10], [81,860.10] Sadler, Re; Ex parte Norris (1886) 17 QBD 728 …. [81,700.5] SAEED v Minister for Immigration and Citizenship (2010) 241 CLR 252 …. [89,760.15] Safety Explosives Ltd, Re [1904] 1 Ch 226 …. [81,700.5]

Saheed v Official Receiver (1993) 41 FCR 148 …. [83,075.30] Salomon v Salomon and Co Ltd (1897) AC 22 …. [80,970.60] Sammon and Pierson, Re; Ex parte Sammon (1831) 1 Mont 253 …. [81,775.5] Samootin v Official Trustee in Bankruptcy (No 2) [2012] FCA 316; BC201201877 …. [80,455.10] —v Shea [2010] NSWCA 371; BC201009911 …. [81,860.15] Sampson v McInness [2007] FMCA 1656; BC200708601 …. [80,765.20] Sandell v Porter (1966) 115 CLR 666; 40 ALJR 71 …. [80,120.50], [81,015.80], [81,080.5], [81,895.30], [82,310.45], [83,770.15] Sanders v Sanders (1967) 116 CLR 366 …. [81,860.11], [81,900.20] Sanwick v Wily as Trustee of Bankrupt Estate of Finn [2009] NSWSC 86; BC200901152 …. [81,885.40] Sarflax Ltd, Re [1979] Ch 592; [1979] 1 All ER 529; [1979] 2 WLR 202 …. [81,889.10] Sarina, Re; Ex parte Council of the Shire of Wollondilly (1980) 30 ALR 266; 43 FLR 163 …. [82,310.20] Sarina, Re; Ex parte Wollondilly Shire Council (1980) 32 ALR 596; 48 FLR 372 …. [81,015.80], [81,015.90], [81,015.97], [81,015.130] Sarkis v Moussa (2012) 262 FLR 359 …. [81,240.20], [81,250.6] Sass, Re; Ex parte National Provincial Bank of England (1896) 1 Ex D 157 …. [81,650.60] Saunders v Evans (1861) 31 LJ Ch 233; 8 HL Cas 721 …. [84,335.5] Savieri v Brown [2008] NSWSC 1210; BC200810176 …. [81,240.38] Saville, Re; Ex parte Commercial & General Acceptance Ltd (1964) 20 ABC 225 …. [80,770.25] Savin, Re (1872) LR Ch App 760 …. [81,680.5], [81,775.5] Scaffidi v Perpetual Trustees Victoria Ltd [2011] WASCA 159; BC201105663 …. [80,910.17] Scanlan v Douglas [2007] FMCA 1265; BC200707871 …. [80,910.125] Scerri, Re (1998) 82 FCR 146 …. [80,910.63], [80,915.85], [80,915.140] Schekeloff v Hopkins Group Pty Ltd (1989) 22 FCR 407; 86 ALR 645 …. [80,910.17], [80,910.137]

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[80,975.140] Smith v Dresser (1866) 35 Beav 378; 55 ER 942 …. [81,815.15] — v New South Wales Bar Association [No 2] (1992) 108 ALR 55 …. [82,380.5] Smith, Re; Ex parte Kern Corp Ltd (1985 unreported) …. [80,910.20], [82,390.10] Smith, Re; Ex parte Wilde v PAD Investments Pty Ltd (1985) 11 FCR 114; 61 ALR 516 …. [81,870.5], [81,880.5] Snow v Deputy Federal Commissioner of Taxation (WA) (1987) 14 FCR 119; 12 ALD 257; 70 ALR 672; 87 ATC 4078 …. [80,910.17] Sofia, Re; Ex parte Sofia v Pattison (1997 unreported) …. [82,163.10], [84,730.7] Solic v Bertossa [1969] VR 594 …. [80,910.125] Solomon, Re; Ex parte Reid (1986) 10 FCR 423; 66 ALR 571 …. [80,910.90], [81,005.30] Sonenco (No 77) Pty Ltd v Silvia (1989) 24 FCR 105; 89 ALR 437 …. [81,240.10], [81,900.30] Soong v Inspector-General in Bankruptcy [2014] AATA 372; BC201481327 …. [82,113ZA.5] Sopikiotis v Owners Corporation RP017740 [2013] FMCA 122; BC201301343 …. [81,015.130] Sorby v Commonwealth (1983) 152 CLR 281 …. [81,550.45] Sourlos v Luv a Coffee Lismore Pty Ltd (No 2); [2008] FMCA 772; BC200804617 …. [91,105.5] Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation (2001) 53 NSWLR 213 …. [80,120.55] Southern Equities Corp Ltd (in liq), Re (1997) 25 ACSR 394; 194 LSJS 401 …. [81,005.45] Southern Equities Corp Ltd (in liq), Re; Caboche v England (1997) 24 ACSR 582 …. [81,550.10] Southern Equity Corp Ltd (in liq), Re; Bond v — (1997) 24 ACSR 472; 140 FLR 202 …. [81,005.45] Southern Wine Corporation, Re; Ex parte Featherby [2005] WASC 21; BC200500897 …. [81,005.45]

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— v Smith (1976) 135 CLR 102; 12 ALR 513; 51 ALJR 177 …. [84,710.5] — v STX Pan Ocean & Co Ltd [2011] FMCA 575; BC201106521 …. [80,915.18B] Thorold, Re (1890) 11 LR (NSW) 331 …. [80,910.165] Thorpe v Bristile Ltd (1997) 80 FCR 330 …. [80,915.80] Thwaites v Ryan [1984] VR 65 …. [81,860.11] Tickner v Chapman (1995) 57 FCR 451; 133 ALR 226 …. [83,390.5] Tilley v Bowman Ltd [1910] 1 KB 745 …. [81,670.40] Timothy’s Pty Ltd and the Companies Act, Re [1981] 2 NSWLR 706 …. [80,910.130] Todd, Re; Ex parte Todd (1986) 68 ALR 483 …. [84,325.5], [84,355.10] Tomson v Boitano [2011] NSWSC 527; BC201103979 …. [81,860.15] Tooheys Ltd v Cmr of Stamp Duties (NSW) (1961) 105 CLR 602; [1962] ALR 195; (1961) 35 ALJR 109 …. [81,885.23] — v — [1960] NSWR 302; (1960) 60 SR(NSW) 539; 77 WN (NSW) 495 …. [81,885.23] Tory v Tory [2007] NSWSC 1078; BC200708273 …. [81,240.40] Totev v Sfar (2006) 230 ALR 236 …. [81,015.20], [81,015.56], [81,015.80], [81,015.100] — v — (2008) 167 FCR 193; 247 ALR 180 …. [81,015.103] — v — (2008) 5 ABC (NS) 691 …. [81,015.97] Totterdell v Nelson (1990) 26 FCR 523; 97 ALR 341 …. [81,520.50] Tov-lev v Lowbeer (No 2) [2014] FCA 379; BC201402571 …. [81,015.60] Toward v Read [2014] FCCA 1100; BC201404174 …. [80,910.137] Trautwein v Richardson [1946] ALR 129 …. [81,884.1], [81,890.50] Trautwein, Re (1944) 14 ABC 61 …. [81,885.5] Tregonning: Ex parte Friends’ Provident Life Office, Re (1983) 74 FLR 327 …. [83,135.5], [83,135.10], [83,150.5] Trendtex Trading Corporation v Credit Suisse [1982] AC 679 …. [80,910.130] Trigg, Re; Ex parte Trigg v Official Receiver (1978) 25 ALR 207 …. [81,860.10], [81,900.30] Trihakis v Official Receiver (Vic) [1999] FCA 1426; BC9906729 ….

[81,025.20] Trimboli, Re; Ex parte DCT (1984) 4 FCR 586; 59 ALR 625 …. [81,015.40], [84,760.20] Trkulja v Morton [2005] FCA 659; BC200503544 …. [81,405.5], [82,185.5], [82,640.25], [82,645.10] — v — [2005] FCAFC 259; BC200510886 …. [82,640.25] Trojan v Hindmarsh Corporation (1987) 16 FCR 37; 82 ALR 225 …. [81,015.80], [81,015.90] Trollope v Middleton (2008) 169 FCR 507; 104 ALD 373; 249 ALR 578 …. [81,980.10] — v Rambaldi [2009] FCA 74; BC200900493 …. [81,980.5], [82,640.25] Tru Floor Service Pty Ltd v Jenkins (No 2) [2006] FCA632 …. [80,120.55] Trustee of Bankrupt Estate of Tom Karas v Karas (1998 unreported) …. [80,750.10], [82,090.10] Trustee of the Property of O’Halloran, Re [2002] FCA 1305; BC200206376 …. [81,884.1] Trustees Executors and Agency Co Ltd v Reilly [1941] VLR 110 …. [81,250.35] Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447; 176 ALR 501 …. [80,800.20], [80,915.17], [80,915.147], [82,795A.5] Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278; 224 ALR 280 …. [80,750.6], [81,240.40], [81,889.5] Tsingaris v Official Receiver for the Bankruptcy District of Victoria [1999] FCA 1389; BC9906543 …. [81,025.20] Tucker, Re; Ex parte Tucker (1895) 73 LR 170 …. [80,975.30] Tulloch Ltd (in liq), Re (1978) 3 ACLR 808 …. [81,995.15], [81,995.25] Turner v Official Trustee in Bankruptcy (1996) 71 FCR 418 …. [81,860.9], [81,860.15], [81,860.40] — v — (1998 unreported) …. [82,645.12] — v Trevorrow (1994) 49 FCR 566; 126 ALR 263 …. [80,970.60] Turner, Re; Ex parte Curtin (1941) 12 ABC 1 …. [81,765.5] Turner, Re; Ex parte West Riding Union Banking Co (1881) 19 Ch D 105 …. [81,690.5]

Turnour, Re (1961) 19 ABC 72 …. [81,815.15] Turtle Productions Pty Ltd v Hawa [2011] FMCA 460; BC201104442 …. [82,865U.5] Tweed Garages Ltd, Re [1962] Ch 406 …. [80,120.50] Tyler v Thomas [2006] FCAFC 6; BC200200498 …. [80,750.5], [81,884.21] Tyler, Re; Ex parte Official Receiver [1907] 1 KB 865 …. [82,375.25] Tynan, Re; Ex parte Tynan (1987) 16 FCR 307; 77 ALR 111 …. [81,405.10] Tyndall v Mathews [2010] FMCA 976; BC201010152 …. [80,915.40] Tyndall, Re; Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6 …. [81,520.20], [81,520.25], [81,980.5], [82,195.5], [82,640.20], [82,640.25], [82,640.5], [82,640.35], [82,645.12], [84,370.5] — (1977) 17 ALR 182; 30 FLR 6 …. [81,310.5], [82,640.2] Udovenko v Mitchell (1997) 79 FCR 418; 160 ALR 161 …. [81,015.60] Ugly Tribe Company Pty Ltd v Sikola [2001] VSC 189; BC200103454 …. [81,889.30] Union Club v Battenberg [2006] NSWCA 72; BC200604062 …. [82,315.10] Union Fidelity Trustee Company of Australia Ltd v Dodds (1967) 10 FLR 111 …. [81,860.9] Unit 2 Windows Ltd, Re [1985] 1 WLR 1383 …. [81,670.65] Uniting Church in Australia Property Trust (NSW) v Millane [2002] NSWSC 1070; BC200206946 …. [81,860.5] Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429; 41 ALJR 348 …. [83,390.14] Urban Transport Authority of NSW v NWEISER (1992) 28 NSWLR 471 (“UTA”) …. [82,380.5] UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 14 ACLC 1262 …. [80,000.80] Valassis v Bernard [2001] FCA 477; BC200102485 …. [80,915.85] Vale v Sutherland (2009) 258 ALR 1; 83 ALJR 940 …. [82,113ZQ.10] Valoutin Pty Ltd v Furst (1998) 154 ALR 119 …. [81,884.1] van Coblyn, Re; Ex parte Mercantile Credits Ltd (1992 unreported) …. [80,770.70] Van Reesema; Ex parte Giameos (1979) 27 ALR 509 …. [82,000.35]

Van Twest, Re; Ex parte Tubemakers Australia Ltd (1986) 69 ALR 573 …. [83,140.10] Van Win Pty Ltd v Eleventh Mirontron Pty Ltd [1986] VR 484; [1986] 58 LGRA 259 …. [81,650.1] Vanechteld, Re (1960) 18 ABC 258 …. [80,765.15] Vansittart, Re [1893] 1 QB 181 …. [81,885.5] Vansittart, Re; Ex parte Brown [1893] 2 QB 377 …. [81,884.1] Vasiliou v Marchesi [2006] FCA 37 …. [82,645.10] Vassis, Re; Ex parte Leung (1986) 9 FCR 518; 64 ALR 407 …. [80,910.20], [80,970.60] Vaucluse Hospital Pty Ltd v Phillips [2006] FMCA 44; BC200600176 …. [82,310.30] Vaughan v Official Trustee (1996) 71 FCR 34 …. [81,860.12] — v R (1938) 61 CLR 8 …. [84,360.10] Vedejs v Public Trustee [1985] VR 569 …. [81,860.11] Vella, Re; Ex parte Seymour (1983) 48 ALR 420; 67 FLR 287 …. [80,910.40] Vellnagel, Re; Whiteman v Hansen (1975) 6 ALR 80 …. [81,685.5] Venetoulis, Re; Ex parte Calsil Ltd (1976) 13 ALR 625 …. [80,000.40], [83,135.10], [83,165.5], [83,415.5], [84,155.5] Vereker v Timbs [2001] FCA 1776 …. [80,915.40] Verge v Devere Holdings Pty Ltd (No 5) [2010] FCA 1452; BC201009876 …. [81,884.1], [81,884.14] Verge (Trustee), Re; Underdown (dec’d) (a bankrupt) v Fazio [2013] FCA 18; BC201300074 …. [82,000.30] Verma, Re; Ex parte; Re Lewin and Glasson; Ex parte Milner (1986) 67 ALR 591 …. [80,970.10] Verma, Re; Ex parte Deputy Commissioner of Taxation (1985) 4 FCR 181 …. [80,910.140], [80,910.145], [80,970.10], [81,015.55] Vicini, Re; Ex parte EA Sealey & Co (1982) 64 FLR 323 …. [80,910.150] Vickery v Woods (1952) 85 CLR 336; 25 ALJR 740; 52 SR (NSW) 103 …. [83,390.14] Victoria v Hansen [1960] VR 582 …. [81,650.2]

Victorian Producers’ Co-operative Co Ltd v Kenneth [1999] FCA 1488; BC9907102 …. [81,884.1], [81,884.8] Virendra Kumar Verma, Re; Ex Parte DCT (1984 unreported) …. [81,015.55] Vittoria Di Giacomo, Re; Ex parte Boral Steel Ltd (1983) 68 FLR 106 …. [80,910.17], [80,910.95], [80,975.50] Vogwell v Vogwell (1939) 11 ABC 75 …. [80,910.130] — v — (1939) 11 ABC 83 …. [80,910.125], [80,915.200], [80,915.203] Vonidis v BMW Australia Finance Ltd [1999] FCA 1377; BC201103568 …. [82,310.5] — v — [2010] FMCA 972; BC201010151 …. [82,310.45] — v — BC5201010141 …. [82,310.30] Voskuilen v Morisset Mega Markets [2005] NSWSC 34; BC200500478 …. [81,250.15] Vowell, Re; Ex parte Vince v Lofthouse (1994) 126 ALR 638 …. [81,785.9] WA Brown & Sons Pty Ltd [1964] NSWR 575,; [1964] 81 WN (Pt 1) (NSW) 402 …. [81,650.1], [81,650.2] Wade v AMI Australia Holdings Pty Ltd [2010] FCAFC 120; BC201007184 …. [81,250.15] — v Leroy [2010] FCA 178; BC201001065 …. [82,640.25] Wadsworth v Pickles (1880) 5 QBD 470 …. [81,415.5] Wagner, Re; Ex parte Stapleton v Bennett (1964) 20 ABC 133 …. [81,550.50] Wainrit v Westpac Banking Corporation (2004) 84 ALD 57 …. [80,915.90] WAJR v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 80 ALD 435; 204 ALR 624 …. [83,390.10] Wakim, Re; Ex parte McNally (1999) 198 CLR 511; 163 ALR 270 …. [80,735.2], [80,750.5], [82,310.4] Walker v Department of Social Security (1995) 36 ALD 513; 129 ALR 198; 56 FCR 354 …. [80,910.125] Walker, Re (1952) 16 ABC 69 …. [82,270.5] Wallace v Anderson (1853) 18 Beav 533 …. [84,713.5] Wallin v MJB Building Services Pty Ltd [2002] FCA 1355; BC200206598

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Webb, Re; Ex parte Taylor (1987) 75 ALR 139 …. [81,785.15] Wedd, Re; Ex parte Wedd (1961) 19 ABC 36 …. [80,910.130] Weiss v Official Trustee in Bankruptcy (1983) 1 FCR 40 …. [81,005.10], [81,520.25], [82,640.35] Weiss, Re; Ex parte White v John Vicars & Co [1970] ALR 654 …. [81,895.100] Welch, Re; Ex parte Stone (1873) LR 8 Ch App 914 …. [81,715.5] Welham v DPP [1961] AC 103 …. [84,335.5] Wenham, Re; Ex parte Battams [1900] 2 QB 698 …. [80,980.5] Wenkart v Pantzer [2003] FCA 471; BC200302427 …. [87,985.5] — v — [2003] FCA 315; BC200301604 …. [81,410.15] — v Pantzer (No 8) (2004) 135 FCR 422 …. [80,750.5] Wentworth v New South Wales Bar Association (1992) 176 CLR 239; 106 ALR 624; 66 ALJR 360 …. [80,970.25] Western Australia v Bond Corporation Holdings Ltd (No 2) (1992) 37 FCR 150; 114 ALR 275; 8 ACSR 352; 10 ACLC 1349 …. [81,715.10] — v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102; 4 ACSR 795 …. [80,910.17] Westpac Bank v Morton, Re (1988) 79 ALR 206 …. [81,700.5], [81,705.5], [81,710.5], [83,185.10] Westpac Banking Corp v Faress [2011] FMCA 26; BC201100140 …. [80,970.60], [81,015.120] —v Goodman [2010] FMCA 993; BC201010150 …. [80,910.177], [81,005.45], [81,015.97] — v Markovic (1985) 82 FLR 7 …. [80,000.75] — v Ollis [2007] FCA 1194 …. [81,240.25] Westpac Banking Corporation v Carver (2003) 126 FCR 113 …. [80,770.10], [80,915.85], [81,015.95] — v Dixon [2011] FMCA 211; BC201104359 …. [81,315ZA.5], [83,390.7] — v Tsatsoulis [2003] FCA 406; BC200302071 …. [80,770.45], [80,800.20], [81,015.100], [81,015.210], [81,240.16] Wharton v Official Receiver in Bankruptcy (2001) 107 FCR 28; 182 ALR 208 …. [82,173.10], [87,653.5]

Wheeler & Reynolds, Re; Ex parte Kerr v Crowe (1988) 20 FCR 185 …. [80,120.20], [80,915.30], [80,980.20], [80,980.5], [80,980.7], [84,730.7] Wheeler, Re [1982] 1 All ER 345; [1982] 1 WLR 175 …. [80,915.95] Wheeler, Re; Ex parte Wheeler (1994) 54 FCR 166 …. [81,250.15], [82,640.20], [82,640.25] Whitbread v Whitbread (1967) 10 FLR 120 …. [81,990.5] White v Quartermain (1985 unreported) …. [81,860.12] White Industries Australia Ltd v Commissioner of Taxation (2003) 129 FCR 276 …. [81,015.100] Whyte v Williams [1903] VLR 69 …. [84,713.5] Wiest v Director of Public Prosecutions (1988) 23 FCR 472 …. [91,560.5] Wigan v English and Scottish Law Life Assurance Assn [1909] 1 Ch 291 …. [81,884.10], [81,890.40] Wiggins, Re; Ex parte Credit Assistance Pty Ltd (1979) 30 ALR 443 …. [80,975.110] Wilcox v Cottrell [2000] FCA 1656; BC200008361 …. [81,015.125] Wilde (Liquidators of Blackburn Industries Pty Ltd) v Australian Trade Equipment Co Pty Ltd (1981) 34 ALR 148; 55 ALJR 280 …. [81,005.35] Wilhelmsen, Re; Ex parte Gould (1986) 11 FCR 107; 66 ALR 189 …. [80,770.60], [80,915.65] Wilkinson, Re (1970) 16 FLR 414 …. [81,265.5] Willey, Ex parte; Re Wright (1883) 23 Ch D 118 …. [81,550.5] Williams v Lloyd (1934) 50 CLR 341; 7 ALJR 463 …. [81,884.1], [81,885.5], [81,889.5], [81,889.10], [81,890.25] — v People’s Solicitors Pty Ltd [2011] FMCA 482; BC201105077 …. [80,910.17] — v Silver Peak Mines Ltd (1915) 21 CLR 40 …. [82,795A.5] — v Spautz (1992) 174 CLR 509; 107 ALR 635 …. [81,005.45], [81,015.65], [81,015.100], [81,015.115], [81,015.125] Williams, Re (1933) 6 ABC 40 …. [81,815.10] — [1969] ALR 179; (1968) 13 FLR 10 …. [82,310.5], [82,310.15], [82,310.20], [82,310.25], [84,760.10]

Williams, Re; Ex parte General Credits Ltd (1983) 68 FLR 202 …. [80,910.95], [80,975.50] Willison v Warburton (1873) 4 AJR 66 …. [81,250.55] Willoughby v Clayton Utz (2008) 102 ALD 640 …. [80,910.125] — v Clayton Utz (No 2) [2009] WASCA 29; BC200900218 …. [81,250.20] — v Official Trustee in Bankruptcy (WA) (2000) 102 FCR 261 …. [82,640.25] Wilson v Commonwealth [1999] FCA 219 …. [81,980.5] — v Greenwood [1814] All ER Rep 173; (1818) 1 Swan 471 …. [84,713.5] — v Official Trustee in Bankruptcy [1999] FCA 1760; BC9908304 …. [80,915.55], [80,915.197] — v United Counties Bank Ltd [1920] AC 102 …. [81,250.55], [81,860.15] Wiltshire-Smith v Olsson (1995) 57 FCR 572 …. [80,910.17], [80,915.5] Wiltshire-Smith, Re; Ex parte Randle & Taylor Services Pty Ltd (1994) 48 FCR 371 …. [81,000.5] Wimborne, Re; Ex parte Debtor (1979) 24 ALR 494 …. [80,915.40], [84,730.10], [84,730.15] Winn v Blueprint Instant Printing Pty Ltd (2011) 193 FCR 41 …. [80,915.16] — v — [2011] FCA 292; BC201101600 …. [80,915.16] — v Blueprint Instant Printing Pty Ltd (No 2) [2011] FCA 723; BC201104637 …. [80,910.17], [80,915.16] — v Blueprint Instant Printing Pty Ltd (No 3) [2011] FCA 742; BC201104738 …. [80,800.20] Winton v Jolliffe (1988) 78 ALR 187 …. [80,415.5] Witt v Witt [2007] FMCAfam 681; BC200708335 …. [80,785.5] Wolff v Donovan (1991) 29 FCR 480 …. [81,015.60], [81,015.65] Wong, Re BC9600498 …. [81,535.2] Wong, Re; Ex parte Kitson (1979) 27 ALR 405; 38 FLR 207 …. [80,915.47], [84,730.15] Wong, Re; Ex parte Wong v Robinson [1995] FCA 805; BC9502840 …. [80,750.5], [82,310.20], [82,310.25] Wood v Prentice [2001] FCA 1050; BC200104485 …. [82,170.10],

[82,170.15] Woodcock, In the Marriage of (1997) 21 Fam LR 393; 137 FLR 14 …. [81,884.10] Woodman and Inspector-General in Bankruptcy, Re (1996) 40 ALD 800; 22 AAR 508 …. [82,170.20], [82,173.7], [82,173.8] Worchild v Drink Nightclub (Qld) Pty Ltd [2005] FCA 863; BC200504454 …. [80,915.40], [84,730.15] — v The Drink Nightclub (Qld) Pty Ltd (2005) 224 ALR 339 …. [82,310.25] World Expo Park Pty Ltd v EFG Australia Ltd (1995) 129 ALR 685 …. [81,889.10], [81,890.25], [81,890.30] Worrell v Foodlink Ltd BC9807797 …. [81,250.20] — v Power & Power (1993) 46 FCR 214; 118 ALR 237 …. [82,113ZM.10], [82,113ZS.10] WR Henry & Son v Hodge [1963] VR 111 …. [81,240.12], [81,860.35] Wraith v Giannarelli [1988] VR 713 …. [81,889.10] Wren v Mahony [1972] ALR 307; (1972) 46 ALJR 163; 126 CLR 212 …. [80,120.24], [80,910.60], [81,015.55], [81,015.60], [81,015.65], [81,015.105], [81,250.60], [81,650.55], [91,370.5] Wright v Australia and New Zealand Banking Group Ltd [2001] FCA 386; BC200101464 …. [80,915.46] — v Gibbons (1949) 78 CLR 313 …. [81,795.25] Wright, Re; Ex parte Wiltshire (1941) 13 ABC 26 …. [81,995.10] Wyatt, Re (1969) 15 FLR 374 …. [81,550.30] Wylie v McCann Worldgroup Pty Ltd [2009] FMCA 959; BC200910713 …. [80,910.17], [80,910.25] Xat Ky v Australvic Property Management Pty Ltd [2007] FCA 1541 …. [81,980.5] Yang v Mead [2009] FCA 1202; BC200909678 …. [80,915.12] — v — [2009] FMCA 149; BC200901095 …. [82,310.20] Yap v Bailiff [2006] WADC 119 …. [81,240.7] Yates, Re; National Mutual Life Assn v Catco Developments Pty Ltd (1989) 88 ALR 583 …. [81,000.5]

Young Ex Parte: Smith, Re (1985) 5 FCR 204 …. [81,015.230] Young, Re; Ex parte Smith (1985) 5 FCR 20; 59 ALR 385 …. [80,770.70] Younghusband v Gisborne (1884) 1 Coll 400; 63 ER 473 …. [84,713.5] Yu v Farrow Mortgage Services Pty Ltd (in liq) (1995) 60 FCR 300 …. [80,915.35] Zagoridis v Q’Plas Group Pty Ltd (1990) 27 FCR 108; 98 ALR 718 …. [80,910.40] Zaniotis v Andrew (No 2) (1988) 80 ALR 299 …. [83,135.10], [83,135.15], [83,150.5] Zantiotis v Andrew (1987) 80 ALR 23 …. [80,000.5], [80,000.40], [83,135.10], [83,150.5] Zegarac v Rambaldi [2010] FCA 219; BC201001290 …. [82,315.10] Zobory v FCT (1995) 64 FCR 86; 129 ALR 484 …. [81,860.8] Zurcas v Bryantcraft Pty Ltd [2010] FMCA 161; BC201001191 …. [80,915.40], [84,730.15]

Table of Statutes CO-OPERATIVE SCHEME LEGISLATION Federal Court Rules 2011 r 36(08) …. [80,800.12], [81,015.95] NATIONAL SCHEME LAWS Corporations Law s 564 …. [81,785.15] COMMONWEALTH Acts Interpretation Act 1901 s 15AA …. [80,000.5] s 15AB …. [80,000.5] s 22(b) …. [80,975.80] s 22C …. [80,120.17] s 25C …. [80,915.18B], [80,915.50] s 26(d) …. [84,375.5] s 36 …. [80,770.35] s 36(1) …. [80,910.45], [80,970.20], [80,975.80], [83,155.10] s 36(2) …. [80,910.45] Administrative Appeals Tribunal Act 1975 s 27A …. [82,113W.5], [82,178.5] s 29 …. [82,113Z.5], [82,187.5] s 44 …. [82,113Z.10] Australian Securities And Investments Commission Act 2001 s 30 …. [81,531.20] Bankruptcy (Estate Charges) Act 1997

Pt 3 …. [85,125] s 5 …. [85,125] s 5(2)(b) …. [85,125] s 5(2)(c) …. [85,125] s 5(2)(d) …. [85,125] s 6(1)(c) …. [85,125] s 6(1A) …. [85,125] Bankruptcy (Registration Charges) Act 1997 …. [82,375.8] Pt 3 …. [79,943] Bankruptcy Act 1924 …. [79,960], [81,889.5] s 25 …. [80,750.10] s 27(1) …. [80,765.15] s 58 …. [80,765.15] s 134(1)(b) …. [82,485.10] Bankruptcy Act 1966 …. [79,950], [79,955], [79,965], [80,000.5], [80,120.17], [80,765.75], [81,240.45], [81,550.70], [81,860.11], [81,870.8], [81,895.5] Pt 4 Div 5 …. [81,405.20] Div 5 …. [83,122.5] Div 6 …. [79,941], [81,315B.5], [81,315E.5], [81,315G.5], [81,315R.5], [81,315S.5], [81,315T.5], [81,315U.5], [81,315V.5], [81,315W.5], [81,315X.5], [81,315ZB.5], [81,315ZE.5], [81,405.5] Pt 5 …. [81,520.5], [81,531.5] Pt 6 …. [83,785.10] Div 3 …. [81,884.1] Div 4A …. [82,070], [82,070.5] Div 4B …. [81,985.10] Div 4B …. [82,113L.5], [82,113P.5], [82,113L.10], [82,113Z.10] Div 4C …. [81,520.15] Pt 7 Div 2

Subdiv C …. [82,113Z.10] Subdiv G …. [82,113Z.10] Div 3 …. [80,970.70] Pt 8 …. [81,420.5] Pt 10 …. [79,941], [80,000.10], [80,000.40], [80,120.10], [80,765.25], [80,765.50], [80,770.5], [80,770.45], [80,770.55], [80,800.20], [80,910.15], [80,910.170], [80,910.171], [81,015.100], [81,015.210], [81,550.5], [81,650.1], [81,680.5], [81,710.5], [81,710.10], [81,740.5], [81,745.5], [81,750.5], [81,765.5], [81,770.5], [81,775.5], [81,890.5], [82,640.25], [83,075.5], [83,075.20], [83,075.25], [83,085.10], [83,135.10], [83,150.5], [83,185.10], [83,375.5], [84,325.5], [84,345.5], [85,125] Div 2 …. [83,140.5], [83,150.5] Pt 11 …. [79,955], [80,000.10], [80,760.5], [81,890.5], [83,750.70] s 5 …. [79,945], [80,000.45], [80,415.5], [80,910.10], [81,095.5], [81,240.5], [81,240.30], [81,690.5], [81,690.15], [81,855.5], [81,870.15], [81,875.5], [81,890.20], [81,895.130], [81,900.20], [81,900.30], [82,025.5], [82,113K.5], [82,275.30], [82,795.1], [83,130.5], [83,165.25], [83,170.5], [83,345.5], [83,410.5], [83,415.5], [83,415.10], [83,750.20], [83,915.5], [84,275.10], [84,275.15], [84,325.10], [84,325.15], [84,360.5], [84,730.7] s 5(1) …. [80,120.23], [80,735.4], [80,755.5], [80,910.50], [80,975.100], [81,240.12], [81,525.5], [81,550.70], [81,884.1], [81,895.40], [94,045] s 5(2) …. [81,895.30] s 5(3) …. [81,895.30] s 6 …. [81,889.10], [81,890.25], [81,900.20], [84,275.5] s 6A …. [79,950], [82,173.8] s 6A(1) …. [79,950] s 6A(2)(b)(ii) …. [81,545.5] s 6B …. [79,950] s 7 …. [80,000.10] s 12(4) …. [79,950] s 14ZZ …. [82,275.25] s 15(5) …. [81,175.55]

s 19 …. [79,950], [80,455.10] s 19(1)(f) …. [81,884.1] s 20J …. [80,560.5], [80,560.10], [80,560.20] s 27(1) …. [80,735.2], [80,735.4], [80,765.15] s 29 …. [80,745.5], [80,745.10] s 29(1) …. [80,745.5] s 29(2)(a) …. [80,745.5] s 29(4) …. [80,745.10] s 30 …. [80,000.5], [80,000.10], [80,750.5], [80,765.70], [81,025.30], [81,425.15], [81,531.20], [81,860.11], [81,884.1], [81,884.14], [81,900.30], [82,113ZQ.10], [82,113ZS.5], [82,640.25], [83,150.5], [83,380.5] s 30(1) …. [80,915.170], [82,390.12] s 30(1)(b) …. [80,750.10], [81,535.2] s 30(2) …. [82,640.25] s 31 …. [80,000.10], [80,755.5] s 31(h) …. [81,655.5] s 31(1) …. [80,755.5] s 31(1)(e) …. [80,755.5] s 31(1)(f) …. [80,755.5] s 31A …. [80,760.5] s 32 …. [80,765.5], [80,765.10], [80,765.15], [80,765.50], [80,765.65], [80,765.70], [81,015.200], [91,550.5], [120,005] s 33 …. [80,990.20], [83,365.5] s 33(1)(a) …. [80,770.20] s 33(1)(b) …. [80,915.20] s 33(1)(c) …. [80,770.40], [80,770.45], [80,770.55], [80,770.60], [80,770.65], [80,770A.5], [80,770.70], [80,770.75], [80,915.65], [80,915.185], [81,025.30], [81,695.10], [82,163.10], [83,115.10], [83,360.10] s 33(2)(c) …. [83,115.10] s 33A(2) …. [80,770A.5] s 34 …. [81,550.30]

s 34A …. [80,000.20] s 35A …. [80,000.5], [80,760.5], [81,860.10], [81,860.11] s 35A(5) …. [80,800.20] s 36 …. [81,015.130] s 37 …. [81,000.20] s 37(1) …. [80,800.10] s 37(2) …. [80,800.10], [83,750.70] s 37(2)(a) …. [80,800.20], [81,015.210] s 40 …. [80,120.15], [94,030] s 40(1) …. [80,910.5] s 40(1)(i) …. [83,075.25] s 40(1)(a) …. [80,910.17] s 40(1)(c) …. [80,910.20] s 40(1)(c)(iii) …. [80,910.20] s 40(1)(d) …. [80,910.25], [94,030] s 40(1)(da) …. [81,075.5] s 40(1)(g) …. [80,765.80], [80,910.5], [80,910.17], [80,910.35], [80,910.40], [80,910.60], [80,910.65], [80,910.87], [80,910.90], [80,910.95], [80,910.125], [80,910.140], [80,910.150], [80,910.175], [80,915.18A], [80,915.85], [80,915.200], [80,915.202], [80,915.203], [80,970.35], [80,975.50], [81,900.20], [94,030] s 40(1)(h) …. [80,910.168] s 40(1)(i) …. [80,910.166] s 40(1)(j) …. [80,910.166], [80,910.171], [83,075.25] s 40(1)(k) …. [80,910.171], [83,075.25] s 40(1)(l) …. [80,910.171], [83,075.25] s 40(1)(l)(ii) …. [83,165.30] s 40(1)(m) …. [80,910.171], [83,075.25] s 40(1B) …. [81,895.5] s 40(3) …. [80,910.175] s 40(3)(b) …. [82,275.40] s 40(3)(e) …. [80,910.70], [80,910.185]

s 40(3)(f) …. [80,910.75], [80,910.190], [81,900.20], [82,275.40] s 40(3)(g) …. [82,275.40] s 41(1) …. [80,915.10] s 41(1)(a) …. [80,910.95], [80,975.50] s 41(1)(b) …. [80,910.95], [80,915.10], [80,915.90], [80,975.50] s 41(2) …. [80,915.5], [80,915.45] s 41(2)(a)(i) …. [80,915.115] s 41(3)(a) …. [80,910.60] s 41(3)(b) …. [80,765.80], [80,910.17], [80,910.90], [80,910.95], [80,975.50] s 41(3)(c)(i) …. [80,915.20] s 41(5) …. [80,770.25], [80,770.60], [80,770.65], [80,915.18A], [80,915.20], [80,915.55], [80,915.65], [80,915.67] s 41(6) …. [80,915.55] s 41(6A) …. [80,915.23], [80,915.40], [80,915.85], [80,915.86], [80,915.180], [80,915.185] s 41(6A)(a) …. [80,915.85] s 41(6A)(b) …. [80,915.85] s 41(6C) …. [80,915.85], [80,915.86], [80,915.197] s 41(7) …. [80,770.65], [80,910.17], [80,910.125], [80,910.145], [80,910.150], [80,915.85], [80,915.200], [80,915.202], [80,915.212] s 43 …. [80,910.5], [80,970.10.5], [80,970.60], [81,015.20], [81,015.40], [94,030] s 43(1) …. [83,390.1], [84,760.20] s 43(1)(b) …. [80,970.10], [80,970.35], [81,015.40], [83,750.5], [83,765.5], [84,760.20] s 43(2) …. [80,970.70], [81,884.1] s 43(2)(a) …. [80,970.70] s 44 …. [80,975.50], [80,975.100], [81,015.10], [81,015.20], [83,390.1], [83,765.5] s 44(1) …. [80,975.10], [83,750.5] s 44(1)(b) …. [80,975.70], [83,750.5] s 44(1)(c) …. [80,120.15], [80,970.10.5]

s 44(1)(h) …. [80,910.166] s 44(2) …. [83,750.5] s 44(3) …. [83,750.5] s 44(4) …. [80,975.130], [81,690.15], [83,750.5] s 44(5) …. [80,975.130], [83,750.5] s 44(6) …. [83,750.5] s 45 …. [80,980.5], [80,980.7], [80,980.20], [81,020.10] s 45(1) …. [80,915.55], [80,980.5] s 47 …. [80,975.10], [80,990.10], [81,015.10], [81,015.20], [83,390.1] s 47(1)(b) …. [83,750.5] s 49 …. [81,000.5] s 50 …. [79,937], [81,005.12], [81,005.15], [81,005.25], [81,005.30], [81,005.35], [81,005.40], [81,785.20], [94,045] s 50(1) …. [81,005.12], [81,005.15], [86,545.5] s 50(2) …. [80,910.40], [81,550.5], [84,300.5] s 51 …. [80,765.15], [80,915.205], [81,015.200], [120,005] s 52 …. [79,950], [80,765.5], [80,970.10.5], [80,990.10], [81,015.10], [81,900.30] s 52(1) …. [80,770.5], [80,910.125], [81,015.55], [81,015.97], [81,240.16], [83,390.1] s 52(2) …. [81,015.130], [81,015.170], [83,390.1], [83,750.5] s 52(2)(a) …. [81,015.80], [81,015.130] s 52(2)(b) …. [81,015.100], [81,015.120], [82,390.12] s 52(3) …. [80,800.20], [81,015.95], [81,015.210], [81,240.16] s 52(4) …. [81,000.5] s 52(5) …. [80,770.10], [80,770.70], [81,000.5], [81,015.230] s 52(J) …. [81,015.20] s 53(1)(b) …. [81,015.30] s 54 …. [80,000.10], [80,970.10], [81,025.10], [81,025.20], [81,025.30], [82,163.5], [82,163.10], [84,730.7] s 54(1) …. [79,941], [79,950], [80,770A.5], [81,025.10] s 54(2) …. [79,941], [79,950]

s 54(3) …. [80,000.25] s 54A …. [80,000.35], [81,075.5], [81,080.5], [81,095.5], [93,410] s 54C …. [81,095.5] s 55 …. [80,000.30] s 55(2) …. [79,950], [81,175.15], [93,415] s 55(2)(b) …. [79,941], [81,025.10] s 55(3A) …. [81,175.50], [81,175.55] s 55(4) …. [81,175.10] s 55(4A) …. [81,175.55], [81,884.1] s 55(4A)(b) …. [81,175.55] s 56(2)(a) …. [79,950] s 56(2)(b) …. [79,950] s 56(13)(a) …. [79,950] s 56(13)(b) …. [79,950] s 56A …. [80,000.30], [80,000.70], [81,020.10] s 56B(2) …. [93,415] s 56B(3)(a) …. [79,941] s 56B(3)(b) …. [79,941] s 56F(1) …. [81,025.10] s 56F(1)(a) …. [79,941] s 56F(1)(b) …. [79,941] s 57 …. [80,000.30], [80,000.70] s 57(2) …. [81,025.10], [93,415] s 57(2)(a) …. [79,941], [79,950] s 57(2)(b) …. [79,941], [79,950] s 58 …. [80,000.45], [81,240.5], [81,240.7], [81,240.20], [81,240.40], [81,795.25], [81,865.3], [81,884.1] s 58(1) …. [80,755.5], [81,240.12], [81,240.15], [81,250.12], [83,785.5] s 58(1)(b) …. [81,240.50], [81,250.15] s 58(2) …. [83,785.5] s 58(3) …. [80,000.45], [81,240.35], [81,650.5], [83,785.5] s 58(3)(a) …. [81,240.12]

s 58(3)(b) …. [81,240.12], [81,240.35], [81,250.10], [81,250.35], [81,900.30] s 58(4) …. [83,785.5] s 58(5) …. [81,240.40], [81,690.5], [83,785.5] s 60 …. [81,250.25], [81,250.55], [81,650.33], [82,640.2], [82,640.20] s 60(1) …. [81,250.2], [81,250.10], [81,650.6] s 60(1)(b) …. [81,250.10], [81,250.50], [81,650.6] s 60(1)(b)(i) …. [81,250.35] s 60(1)(b)(ii) …. [81,250.35], [81,250.40] s 60(2) …. [81,240.12], [81,250.6], [81,250.7], [81,250.12], [81,250.13], [81,250.15], [81,250.25], [81,250.55], [82,275.25] s 60(3) …. [80,770.45], [81,250.7], [81,250.13], [81,250.20], [81,250.55], [82,275.25], [82,315.10] s 60(4) …. [80,000.45], [81,250.12], [81,250.25], [81,250.55] s 60(4)(a) …. [81,250.25] s 60(5) …. [81,250.45], [81,250.55] s 61 …. [120,005] s 63 …. [81,265.5] s 63A …. [79,950] s 63B(1) …. [83,390B.5] s 64 …. [79,950], [81,425.10] s 64A …. [79,950], [82,795A.5] s 64D …. [81,315ZA.5], [93,420] s 64E …. [93,420] s 64ZA …. [79,950] s 64ZA(6) …. [81,315ZA.5] s 64ZA(9) …. [83,150.15] s 64ZB(3) …. [83,145.35] s 64ZC …. [93,420] s 65 …. [79,950] s 70 …. [79,950], [81,315.15] s 71(1)(f) …. [81,350.10]

s 73 …. [79,937], [81,405.5], [81,405.10], [81,405.20], [81,425.10], [82,640.10] s 74 …. [79,950], [81,405.10] s 74(5) …. [79,950] s 74(6) …. [81,410.10] s 74(7) …. [81,410.10] s 75 …. [79,950] s 75(4) …. [79,941] s 75(5) …. [81,410.15] s 75(8) …. [81,875.15] s 76A …. [81,405.20], [81,425.5] s 76B …. [79,941] s 77 …. [80,000.10], [80,000.25], [81,025.10], [81,520.5], [81,520.55], [81,520.60], [81,550.45], [81,975.5], [82,173.10] s 77(1)(a) …. [81,550.45] s 77(1)(f) …. [81,350.10] s 77(1)(g) …. [81,520.50] s 77A …. [81,525.20] s 77A(2)(e) …. [81,525.20] s 77AA …. [81,531.35] s 77C …. [79,939], [81,025.30], [81,531.5], [81,531.20], [81,531.35], [81,531.40], [84,140.10], [84,344.5] s 77C(1)(b) …. [81,531.20] s 78 …. [80,750.10], [81,520.10], [81,531.25], [81,535.2], [81,860.11], [94,080] s 78(1) …. [81,350.10] s 78(1)(f) …. [80,000.10], [80,000.25], [81,350.10], [81,520.60] s 80 …. [81,545.5] s 81 …. [79,939], [80,745.10], [80,760.5], [80,770.20], [81,550.5], [81,550.15], [81,550.55], [81,550.70], [81,550.75], [81,655.7], [82,270.5], [82,640.10], [82,640.25], [84,140.10], [84,300.5], [84,300.10], [84,305.10], [84,760.20], [94,045], [94,050], [94,085] s 81(1) …. [81,550.5], [81,550.10], [82,270.5], [94,045]

s 81(1)(a) …. [81,655.7] s 81(1A) …. [81,550.20] s 81(1A)(b) …. [81,550.55] s 81(1B) …. [81,550.5], [81,550.45] s 81(2) …. [81,550.30], [81,650.1.5] s 81(3) …. [80,770.20], [81,550.30] s 81(4) …. [80,770.20], [81,550.40] s 81(10) …. [81,550.20] s 81(11AA) …. [81,550.45] s 81(14) …. [80,765.5], [80,765.60], [81,550.60], [81,550.65] s 81(17) …. [80,000.20], [81,550.70], [84,140.10] s 81(17)(a) …. [81,890.5] s 81(17)(b) …. [79,937] s 81(19) …. [80,000.20] s 82 …. [80,450.5], [81,650.1], [81,650.2.3], [81,650.5], [81,895.40], [82,115.5] s 82(1) …. [80,970.25], [81,650.1], [81,650.2.3], [81,650.5], [81,650.15], [81,650.70] s 82(1A) …. [82,275.40] s 82(2) …. [81,650.1], [81,650.7], [81,650.70], [82,275.10] s 82(3) …. [81,015.230], [81,250.10], [81,650.6], [81,650.75] s 82(3A) …. [82,865QA.1] s 82(3B) …. [81,650.45], [81,650.77] s 82(4) …. [81,650.65] s 82(5) …. [81,650.65], [81,650.80] s 82(6) …. [81,650.65] s 82(8)(c) …. [81,650.70] s 84(2) …. [93,425] s 84(2)(b) …. [81,660.5] s 85(2) …. [81,660.5], [93,425] s 86 …. [81,650.35], [81,670.5], [81,670.10], [81,670.15], [81,670.25] s 89(2) …. [81,685.5]

s 90 …. [81,685.5], [83,185.5] s 91(4) …. [81,690.10] s 92 …. [81,700.5], [81,705.5], [81,730.5], [81,740.5], [83,185.10] s 92(1) …. [81,700.5] s 95 …. [81,015.80], [81,715.5], [81,715.10] s 98 …. [81,740.5] s 99 …. [80,000.10], [81,655.5], [81,750.5] s 100 …. [81,650.3], [81,700.5], [81,730.5], [120,005] s 102 …. [81,655.5], [81,750.5], [82,115.5] s 102(2) …. [81,655.5], [81,750.5] s 104 …. [80,000.10], [81,750.5], [81,760.10] s 105 …. [80,765.55], [120,005] s 106B …. [82,310.7] s 109 …. [80,000.40], [80,765.15], [81,010.5], [81,780.5], [81,785.9], [120,005] s 109(1)(a) …. [82,470.5] s 109(1)(b) …. [81,785.9] s 109(1)(c) …. [81,815.5] s 109(10) …. [81,785.15] s 109(10)(a) …. [81,785.15] s 109(10)(b) …. [81,785.15] s 110 …. [81,690.5], [81,795.5], [81,795.25] s 110(1) …. [81,795.15] s 111 …. [84,710.5] s 115 …. [80,000.45], [80,000.75], [80,910.10], [81,175.50], [81,855.5], [81,884.1], [82,310.5], [83,770.5] s 115(1) …. [80,120.15] s 115(2) …. [80,120.15], [81,175.40] s 116 …. [79,945], [79,947], [81,855.5], [81,860.8], [81,860.15], [81,884.1], [81,995.15], [83,770.5] s 116(1) …. [80,000.45], [81,240.5], [81,250.25], [81,350.10], [81,860.5], [81,860.15]

s 116(1)(b) …. [81,240.12] s 116(2) …. [80,000.45], [81,240.5], [81,860.15], [83,785.5] s 116(2)(a) …. [80,000.75], [80,120.25], [83,785.10] s 116(2)(b) …. [81,860.12] s 116(2)(c) …. [81,860.12] s 116(2)(d) …. [79,945], [81,860.14] s 116(2)(e) …. [79,945] s 116(2)(f) …. [79,945] s 116(2)(fa) …. [79,945] s 116(2)(g) …. [81,250.12], [81,860.15], [82,310.5] s 116(2)(g)(i) …. [81,670.65] s 116(2)(k) …. [79,947] s 116(2)(m) …. [79,947] s 116(2)(ma) …. [79,947] s 116(2)(mb) …. [79,947] s 116(2)(mc) …. [79,947] s 116(2)(md) …. [79,947] s 116(2A)(a) …. [79,945] s 116(2A)(b) …. [79,945] s 116(2A)(c) …. [79,945] s 116(2D) …. [79,945] s 116(5) …. [79,945], [81,860.14] s 116(6) …. [79,945], [81,860.14] s 116(7) …. [79,945] s 116(8) …. [79,945] s 116(9) …. [79,945] s 117 …. [81,650.7], [81,865.3] s 117(1) …. [81,865.3] s 118 …. [81,870.5], [81,870.10], [83,170.5] s 118(1) …. [81,870.5], [81,880.5] s 118(9) …. [81,870.25], [81,870.35] s 118(12) …. [81,870.20], [81,870.35]

s 120 …. [80,735.4], [81,855.5], [81,860.11], [81,884.1], [81,884.5], [81,884.30], [81,885], [81,885.5], [81,885.20], [81,885.25], [81,885.45], [81,885.47], [81,885.50], [81,889.5], [81,889.9], [81,889.25], [81,890.35], [81,890.37], [81,890.40], [81,900.20], [81,900.30], [82,113ZQ.5], [82,113ZQ.10] s 120(1) …. [81,884.1], [81,884.8], [81,884.35], [81,885.50], [81,890.40] s 120(1)(a) …. [81,885], [81,885.15], [81,885.20], [81,885.35], [81,890.35] s 120(1)(b) …. [81,884.1], [81,885], [81,885.35] s 120(2) …. [81,884.1] s 120(2)(b) …. [81,900.30] s 120(3) …. [81,884.1] s 120(4) …. [81,780.5], [81,884.1], [81,884.8] s 120(5) …. [81,885] s 120(6) …. [81,884.1] s 120(7) …. [81,885.50], [81,889.9] s 120(7)(a) …. [81,890.37] s 120(8) …. [81,885.5], [81,885.40] s 121 …. [80,755.5], [81,550.70], [81,884.1], [81,884.5], [81,889.3], [81,889.5], [81,889.10], [81,890], [81,890.5], [81,890.15], [81,890.25], [81,890.35], [81,890.37], [81,890.40], [81,890.45], [81,890.50], [81,900.20], [81,900.30], [82,113ZQ.5], [82,113ZQ.10] s 121(1) …. [81,889.10], [81,890.37], [81,890.40] s 121(1)(a) …. [81,890.37] s 121(1)(b) …. [81,889.10], [81,890.15] s 121(2) …. [81,889.10], [81,890.15], [81,900.20] s 121(3) …. [81,889.10], [81,890.15] s 121(9) …. [81,889.9] s 121(9)(a) …. [81,890.37] s 122 …. [80,000.10], [80,755.5], [81,884.1], [81,890.25], [81,895.5], [82,113ZQ.5], [82,113ZQ.10] s 122(1) …. [81,895.10], [81,895.70] s 122(1A) …. [81,895.20]

s 122(1A)(b) …. [81,895.20] s 122(2) …. [81,895.5], [81,895.10] s 122(2)(a) …. [81,895.5], [81,900.10] s 122(2A) …. [81,895.5] s 122(3) …. [81,895.10] s 122(4)(a) …. [81,895.40] s 122(4)(c) …. [81,895.10], [81,895.110] s 122(5) …. [81,895.5] s 122(8) …. [81,889.9] s 122(8)(a) …. [81,895.20] s 122(8)(b) …. [81,895.20] s 122(8)(c) …. [81,895.120] s 123 …. [80,910.40], [81,855.20], [81,884.1], [81,900.5], [81,900.10] s 123(6) …. [81,885.60], [81,900.20], [81,900.30] s 124 …. [81,855.20], [81,900.5] s 124(3)(a) …. [81,015.80] s 127 …. [81,895.140] s 127(4) …. [81,890.5] s 129 …. [81,520.10] s 129(4A) …. [81,975.5] s 129(4B) …. [93,430] s 129A(1) …. [79,970] s 129A(2) …. [79,970] s 130 …. [79,970], [81,535.5], [81,980.5], [81,980.10] s 131 …. [81,985.10], [82,113P.5] s 131(2) …. [81,265.5] s 132 …. [80,755.5] s 132(2) …. [81,990.5] s 132(3) …. [81,990.5], [83,785.5] s 133 …. [80,000.55], [81,240.15] s 133(6) …. [80,770.50] s 134 …. [80,000.40], [81,345.5], [81,520.40], [83,785.5]

s 134(1)(j) …. [81,240.12] s 134(4) …. [80,000.10], [81,795.25], [82,000.10] s 134W …. [82,113ZD.5] s 135 …. [81,345.5], [81,520.40], [83,785.5] s 139 …. [80,450.5] s 139D …. [80,750.10], [81,860.11], [82,070.10] s 139E …. [81,860.11], [82,070.10] s 139H(1) …. [81,885] s 139H(2) …. [81,780.5] s 139K …. [82,113L.10], [82,113ZQ.20] s 139L …. [79,945], [81,860.11], [82,113L.5], [82,113Y.10] s 139L(a) …. [82,113L.5] s 139L(e) …. [82,113L.20] s 139L(f) …. [82,113L.25] s 139L(1)(a)(vi) …. [82,113L.15] s 139M …. [82,113ZK.5], [82,113L.10] s 139N …. [82,113N.5] s 139P …. [84,370.15] s 139P(1) …. [82,114.1] s 139Q …. [84,370.15] s 139Q(1) …. [82,114.1] s 139S …. [82,113P.5] s 139U …. [82,113U.5], [82,640.25] s 139W …. [82,113W.5], [82,113Z.5], [82,113ZD.5] s 139Y(1)(b) …. [82,113Y.5] s 139Y(1)(b)(i) …. [82,113Y.5] s 139Y(1)(b)(ii) …. [82,113Y.5] s 139ZA …. [82,113Z.5] s 139ZF …. [82,113Z.5], [82,113ZA.5] s 139ZG …. [80,735.10], [82,640.25] s 139ZI …. [82,113W.5] s 139ZK(1) …. [82,113ZL.5]

s 139ZK(1)(a) …. [82,113ZK.5] s 139ZL …. [80,735.10] s 139ZL(2) …. [81,884.12], [82,113ZL.5] s 139ZM …. [82,113ZM.5], [82,113ZM.10] s 139ZQ …. [80,735.10], [81,884.1], [81,884.5], [81,889.5], [81,890.37], [82,113ZQ.5], [82,113ZR.5], [82,113ZS.5], [82,113ZQ.10], [82,113ZQ.15], [82,113ZQ.20], [82,113ZQ.25] s 139ZQ(1) …. [82,113ZQ.10] s 139ZQ(2) …. [81,884.12], [82,113ZQ.10] s 139ZQ(8) …. [82,113ZQ.10] s 139ZR …. [82,113ZQ.10] s 139ZR(1) …. [82,113ZQ.10] s 139ZS …. [81,890.37], [82,113ZM.5], [82,113ZQ.10], [82,113ZS.10] s 139ZS(1) …. [82,113ZS.5] s 139ZS(2) …. [82,113ZQ.10] s 139ZU …. [84,370.15] s 140 …. [81,750.5] s 140(8) …. [93,395] s 140(9) …. [82,115.1] s 141 …. [81,795.5] s 143 …. [82,115.5] s 145 …. [82,115.5] s 146 …. [81,025.30] s 147 …. [81,775.10] s 148 …. [79,950], [82,640.5] s 148(2) …. [79,950] s 149 …. [79,950], [80,770.40], [80,770.75], [82,170.15], [82,640.25] s 149(1) …. [81,250.50] s 149(1)(e) …. [82,640.25] s 149(1)(f) …. [82,640.25] s 149(1)(g) …. [82,173.10] s 149(3) …. [80,770A.5]

s 149(3)(a) …. [82,165.10] s 149(3)(c) …. [79,950] s 149A …. [82,195.5], [82,640.25] s 149B …. [79,950], [82,173.7] s 149C …. [82,170.5], [82,173.15] s 149C(1)(b) …. [82,170.5] s 149C(1)(c) …. [82,170.5] s 149D …. [82,113U.5] s 149D(1) …. [82,640.25] s 149D(1)(a) …. [81,520.15], [82,165.5] s 149D(1)(b) …. [82,114.1] s 149D(1)(c) …. [82,160.5] s 149D(1)(d) …. [82,173.7], [87,653.5] s 149D(1)(e) …. [82,173.8] s 149D(1)(h) …. [81,520.15] s 149D(1)(i) …. [82,173.15] s 149D(1)(j) …. [81,545.10] s 149D(1)(k) …. [81,520.40] s 149D(1)(m) …. [81,520.30], [81,520.35], [81,531.5], [81,550.5], [81,550.20] s 149D(1)(n) …. [81,520.45] s 149G …. [82,168.10] s 149J …. [81,405.5], [82,640.25] s 149N …. [82,165.10], [82,640.25] s 150 …. [79,950] s 150(3) …. [79,950] s 150(5) …. [79,950] s 150(6) …. [79,950] s 150(9) …. [79,950] s 152 …. [81,860.5], [82,275.25], [82,275.35] s 153 …. [80,000.40], [81,240.12], [81,860.5], [82,270.5], [82,275.25] s 153(1) …. [82,275.25], [82,275.35], [82,275.40]

s 153(2)(b) …. [81,650.1], [81,650.7], [82,275.10] s 153(2A) …. [82,275.40] s 153A …. [83,810.5] s 153A(6) …. [81,775.5] s 153B …. [79,950], [80,000.10], [81,175.55], [82,310.5], [82,310.15], [83,812.5] s 153B(1)(a) …. [82,310.10] s 154 …. [79,950], [80,915.25], [81,410.5], [82,315.15], [83,814.5] s 154(1) …. [82,315.20] s 154(1)(a) …. [79,950] s 154(1)(b) …. [79,950] s 154(2) …. [82,275.25], [82,275.35] s 154(3) …. [79,950] s 154(4) …. [79,950] s 154(6) …. [79,950] s 154A …. [79,937], [81,420.5] s 154A(2) …. [93,435] s 154A(3)(b) …. [79,937] s 155(5B) …. [82,383I.10] s 155C(1)(b) …. [79,937] s 155D …. [79,937] s 155E …. [79,937] s 155E(2) …. [93,440] s 155E(3) …. [79,937] s 155E(3)(a) …. [79,937] s 156A …. [82,390.12], [93,445] s 156A(3) …. [80,445.5], [82,390.5], [82,390.25] s 156A(4) …. [82,390.10] s 157 …. [81,315.10] s 157(6) …. [82,395.5] s 159 …. [82,405.5] s 160 …. [80,445.5], [82,405.5], [82,790.11]

s 161B …. [80,735.10], [82,470.5] s 162 …. [81,345.5], [82,470.5] s 162(1) …. [82,470.5] s 162(4) …. [81,410.15], [82,470.5] s 163 …. [79,937] s 163A …. [79,937] s 164 …. [82,795.5] s 165(1)(b) …. [82,470.35], [82,485.5] s 167 …. [80,750.10], [120,005] s 169 …. [79,943] s 172 …. [79,943] s 177 …. [81,345.5] s 178 …. [80,000.10], [81,005.45], [81,240.11], [81,240.12], [81,425.15], [81,520.25], [81,980.5], [82,113Z.10], [82,187.10], [82,640.2], [82,640.5], [82,640.10], [82,640.20], [82,640.25], [82,640.35], [82,645.10] s 179 …. [81,980.5], [82,640.10], [82,640.25], [82,790.10], [82,790.11] s 180 …. [82,470.5], [82,790.11] s 181 …. [82,795.5] s 181A(2) …. [82,795A.5] s 181A(3) …. [82,795A.5] s 185C …. [79,937] s 185D …. [79,941], [81,025.10] s 185F(1)(a) …. [82,865F.10] s 185T(2)(b) …. [81,650.2.5] s 187 …. [80,000.40], [80,120.10] s 187(1) …. [83,020.30], [83,165.5] s 187(1A) …. [83,020.15] s 188 …. [79,937], [79,941], [79,955], [80,000.40], [80,910.166], [81,785.9], [83,075.5], [83,075.10], [83,075.15], [83,075.25], [83,180.5], [93,450] s 188(2)(a) …. [83,075.25]

s 188(2)(c) …. [83,075.25] s 188(2)(c)(i) …. [79,950] s 188(4) …. [83,075.30] s 188A …. [81,025.10], [83,390.1] s 189 …. [80,000.40] s 189(1A)(d) …. [83,125] s 189A …. [83,085.10] s 189A(2) …. [93,450] s 189AB …. [80,000.40] s 190 …. [83,150.5] s 190(2) …. [80,000.40] s 190(5) …. [80,000.40] s 194 …. [80,770.55], [80,910.170], [80,910.171], [83,115.10] s 194(1) …. [83,115.10] s 196 …. [83,125] s 198 …. [83,135.10], [83,135.15] s 198(2) …. [83,135.10], [83,150.5] s 198(4) …. [83,135.10] s 198(5) …. [83,135.10] s 198(6) …. [83,135.10] s 199 …. [83,140.5] s 200(3) …. [83,145.35] s 200(3A) …. [83,145.15] s 200(3A)(a) …. [83,145.15] s 201 …. [83,135.10], [83,145.35], [83,150.5] s 204 …. [79,941], [80,000.40], [83,390.1], [85,125] s 205(2) …. [83,170.5] s 205(4) …. [83,170.5] s 206 …. [83,180.5] s 208 …. [80,000.40] s 210 …. [79,943] s 213 …. [80,910.15], [83,375.5]

s 213(2) …. [80,000.40] s 214 …. [80,000.40] s 214(2) …. [93,455] s 214(2)(b) …. [80,000.40] s 216 …. [80,000.40] s 216(1) …. [83,360.10] s 216(2) …. [83,360.10] s 218 …. [81,690.5], [81,855.25] s 219 …. [83,335.1] s 220 …. [83,395.5] s 220(2) …. [83,380.5] s 221(1)(b) …. [81,875.15], [83,165.30] s 222 …. [79,941], [83,150.5], [83,180.5], [83,390.1], [83,390.5] s 222(1) …. [83,390.1], [83,390.5] s 222(1)(d) …. [83,390.1] s 222(2) …. [83,390.1] s 222(2)(a) …. [83,390.5] s 222(4) …. [81,875.15], [83,390.1] s 222(9) …. [81,875.15] s 222B(1)(b) …. [83,390B.5] s 222C …. [79,941] s 224 …. [79,941] s 224A …. [79,941] s 225(2) …. [83,415.5] s 231 …. [80,000.40], [81,550.5], [83,185.5] s 231(2) …. [81,890.5] s 231A …. [79,950] s 234 …. [80,000.40] s 236 …. [81,875.15], [83,180.5] s 236(5) …. [81,875.15] s 237 …. [80,000.40], [81,550.5], [83,185.5] s 237(2) …. [81,785.9]

s 237AA …. [79,950] s 239 …. [80,000.40], [81,900.30], [83,390.1] s 239(4) …. [81,875.15] s 240(2) …. [81,710.5] s 241 …. [83,165.40] s 242(5) …. [81,875.15] s 243 …. [80,000.40], [81,550.5], [81,670.60], [83,185.5], [83,185.10] s 243AA …. [79,950] s 244 …. [83,765.5], [94,070] s 244(1) …. [83,750.5] s 244(2) …. [83,750.5] s 244(3) …. [83,750.5] s 244(4) …. [83,750.5] s 244(5) …. [83,750.5], [83,750.10] s 244(6)(a) …. [83,750.5] s 244(6)(b) …. [83,750.5], [83,765.5] s 244(7) …. [83,750.5] s 244(8) …. [83,750.5] s 244(9) …. [94,070] s 244(12) …. [83,750.5] s 246(1) …. [81,025.10] s 246(1)(a) …. [79,950] s 247(1) …. [79,950], [81,025.10] s 247(2) …. [83,765.5] s 248(1) …. [81,890.5] s 249 …. [79,945] s 249(1) …. [83,785.5] s 249(2) …. [83,785.5] s 249(3) …. [83,780.5], [83,785.5] s 249(4) …. [83,785.5] s 249(5) …. [83,785.5] s 249(6)(a)(ii) …. [79,945]

s 249(6)(b) …. [83,785.5] s 249(6)(c) …. [83,785.5] s 249(6)(e) …. [83,790.5] s 249(7)(a)(ii) …. [79,945] s 249(8)(a)(ii) …. [79,945] s 249A(1) …. [83,790.5] s 252A …. [83,750.70] s 254(2) …. [79,950] s 254(3) …. [79,950] s 254(4) …. [79,950] s 255 …. [80,000.20], [81,550.70], [120,005] s 255(2) …. [81,550.70], [84,140.10] s 256 …. [80,000.20] s 257 …. [80,000.20], [81,345.5] s 258 …. [80,000.20], [81,345.5] s 260 …. [80,000.20] s 263 …. [81,660.20] s 264A …. [81,550.5], [81,550.75], [84,300.10] s 264A(1)(c) …. [81,550.5] s 264A(1A)(a) …. [81,550.5] s 264A(2) …. [81,550.5] s 264B …. [80,760.5], [81,550.25], [81,550.75], [84,305.10], [94,045], [94,085] s 264B(1) …. [84,305.10] s 264B(4) …. [94,085] s 264C …. [81,550.5], [81,550.75] s 264C(2) …. [81,550.5] s 264D …. [81,550.75], [84,344.5] s 265 …. [81,520.60], [81,550.75], [84,345.5] s 265(1)(a) …. [81,350.10] s 265(4)(e) …. [81,900.20] s 265A …. [81,525.15], [81,550.45]

s 265A(4) …. [84,330.5] s 266(1) …. [84,335.5] s 266(3) …. [81,900.20] s 267B …. [81,025.30], [81,531.40], [81,550.45] s 267C …. [81,531.40] s 267D …. [81,531.40] s 267E …. [81,531.15], [81,531.25] s 267F …. [81,531.40], [81,550.45] s 267G …. [81,531.40] s 269 …. [84,355.5], [84,355.10] s 269(1)(b) …. [84,355.10] s 270(2) …. [84,360.10] s 272 …. [82,640.35] s 272(1)(c) …. [82,114.1] s 272(BA) …. [81,520.15] s 272(C) …. [81,520.15] s 273 …. [81,525.15], [81,531.40], [81,545.20], [84,375.10] s 273(2) …. [84,375.5] s 301 …. [80,000.55] s 302 …. [80,000.55] s 302A …. [79,945], [81,860.14], [84,713.5] s 304A …. [81,532.10], [81,533.10], [82,160.5] s 305 …. [120,005] s 306 …. [80,770A.5], [80,910.147], [80,915.20], [80,915.55], [80,970.10], [80,990.20], [80,990.40], [81,025.10], [82,795A.5], [84,730.10], [84,730.15] s 306(1) …. [80,770A.5], [80,915.10], [80,915.30], [80,915.48], [82,163.10], [84,730.7] s 306(2) …. [81,350.5] s 306A …. [81,550.45] s 306A(3) …. [81,550.75] s 306B …. [84,740.5]

s 307 …. [80,975.35], [80,980.5], [80,980.7] s 308 …. [80,990.40] s 308(b) …. [84,755.1] s 309 …. [80,915.25] s 309(2) …. [80,760.5], [80,915.25], [80,970.35], [81,550.15], [84,760.15], [84,760.20] s 315 …. [120,005] s 315(2)(j) …. [79,937] s 401 …. [82,275.40] s 447B(2) …. [80,120.37] s 592 …. [81,650.70] Bankruptcy Amendment Act 1980 …. [79,960] Bankruptcy Amendment Act 1987 …. [82,070.5] s 2 …. [79,955] s 10(1) …. [79,955] s 11(1) …. [79,955] s 18(1) …. [79,955] s 25(1) …. [79,955] s 26(1) …. [79,955] s 27(1) …. [79,955] s 28(1) …. [79,955] s 29(1) …. [79,955] s 30(1) …. [79,955] s 31(1) …. [79,955] s 32(1) …. [79,955] s 34(1) …. [79,955] s 35(1) …. [79,955] s 36(1) …. [79,955] s 37(3) …. [79,955] s 38(1) …. [79,955] s 40(1) …. [79,955]

s 43(3) …. [79,955] s 46(1) …. [79,955] s 47(1) …. [79,955] s 53(2) …. [79,955] s 55(1) …. [79,955] s 62(1) …. [79,955] s 63(1) …. [79,955] s 64(1) …. [79,955] s 65(1) …. [79,955] s 68(1) …. [79,955] s 69(1) …. [79,955] s 70(1) …. [79,955] s 71(1) …. [79,955] s 72(1) …. [79,955] s 76(1) …. [79,955] s 77(1) …. [79,955] s 78(1) …. [79,955] s 79(3) …. [79,955] s 79(4) …. [79,955] s 82(1) …. [79,955] s 86(1) …. [79,955] s 89(1) …. [79,955] s 97(1) …. [79,955] s 99(1) …. [79,955] s 103(1) …. [79,955] s 106 …. [79,955] Bankruptcy Amendment Act 1991 …. [79,950], [81,884.1] Pt 3 …. [79,950] s 4 …. [79,950] s 6 …. [79,950] s 9 …. [79,950]

s 15 …. [79,950] s 16 …. [79,950] s 17 …. [79,950] s 26 …. [79,950] s 29 …. [79,950] s 51(2) …. [79,950] s 51(5) …. [79,950] s 66(4) …. [79,950] s 70(3)(a) …. [79,950] s 70(3)(b) …. [79,950] s 70(6) …. [79,950] Bankruptcy Amendment Act 1992 …. [81,405.5] Bankruptcy Legislation Amendment Act 1996 Sch 1 …. [79,943] Bankruptcy Regulations 1996 …. [83,760.5] s 149D(1)(d) …. [82,173.10] reg 2.01 …. [80,560.10] reg 2.01(3)(a) …. [94,010] reg 2.01(4)(a) …. [94,015] reg 4.01 …. [80,915.10], [80,915.18B] reg 4.01(1)(b) …. [80,915.145] reg 4.01(B) …. [80,915.10] reg 4.02 …. [80,910.63], [80,915.16], [80,915.18B] reg 4.02(1) …. [80,915.5] reg 4.02(3) …. [80,915.18B] reg 4.02(A) …. [80,915.215] reg 4.02A …. [81,015.130] reg 4.04 …. [80,915.18B], [80,915.130] reg 4.04(1) …. [80,915.18B] reg 4.04(2) …. [80,915.50] reg 4.04(2)(a) …. [80,915.18B], [80,915.130]

reg 4.04(2)(b) …. [80,915.18B], [80,915.130] reg 4.04(2)(b)(iii) …. [80,915.18B] reg 4.04(3) …. [80,915.18B] reg 4.05 …. [80,990.10] reg 4.08 …. [81,005.12] reg 4.08(a) …. [86,545.5] reg 4.08(b) …. [86,545.5] reg 4.11(1) …. [81,175.55] reg 4.11(3) …. [81,175.55] reg 4.11(5) …. [81,175.55] reg 4.19 …. [81,425.5] reg 5.01 …. [81,535.5] reg 6.01 …. [81,785.5] reg 6.03 …. [80,000.45], [81,860.12] reg 6.04 …. [80,000.45] reg 7.01 …. [82,173.5], [82,173.7] reg 7.01A …. [87,653.5] reg 8.01 …. [82,375.5] reg 8.02 …. [82,382.5] reg 8.06 …. [82,390.20] reg 8.07 …. [82,470.40] reg 8.08 …. [81,410.15] reg 8.09 …. [82,495.20] reg 8.12 …. [82,475.10] reg 8.14 …. [82,640.25] reg 10.02 …. [80,000.40], [83,025.5] reg 10.02(3) …. [93,450] reg 10.04 …. [81,315.20], [83,085.5] reg 10.05 …. [83,122.5] reg 10.07 …. [83,200.5] reg 10.09 …. [83,370.5] reg 10.11 …. [83,400.5]

reg 11.01 …. [83,765.5] reg 11.02 …. [83,775.5] reg 14.01 …. [81,535.5] reg 15(01) …. [82,380.5] reg 16 …. [84,760.7] reg 16.01 …. [80,915.25], [81,000.10], [81,015.30], [81,531.15], [81,550.15], [84,730.10] reg 16.01(1) …. [89,760.10], [89,760.15] reg 16.01(1)(c) …. [89,760.15] reg 16.01(2) …. [80,915.25], [89,760.10] reg 16.07 …. [82,475.10] reg 16.12 …. [82,478.5] r 7(01A) …. [82,173.10] r 16(17) …. [92,945] Sch 1 …. [80,915.16] Form 1 …. [80,915.5], [80,915.16], [80,915.80], [80,915.85], [80,915.100], [80,915.175], [93,395] Sch 2 …. [81,315B.5], [81,315E.5], [81,315G.5], [81,315R.5], [81,315S.5], [81,315T.5], [81,315U.5], [81,315V.5], [81,315W.5], [81,315X.5], [81,315ZB.5], [81,315ZE.5] reg 4.05(1) …. [94,030] Bankruptcy Rules s C1 Sch 3 …. [120,050], [120,200] s C2 Sch 3 …. [120,200] s C3 Sch 3 …. [120,200] r 24(1) …. [81,175.15] r 37(2) …. [81,660.5] r 161 …. [82,495.10] r 162(2B) …. [120,050], [120,200]

Sch 1 Form 16 …. [81,660.5] Form 43 …. [83,145.30] Form 44 …. [83,145.30] Form 156 …. [82,865Q.5] Sch 2 Form 5 …. [81,650.80] Form 4 …. [83,760.5], [83,765.5] Form 5 …. [81,250.55] Form 6 …. [81,175.15] Form 8 …. [81,660.5], [81,665.5] Form 12 …. [82,390.15], [83,350.5] Form 13 …. [83,075.10] Form 14 …. [80,000.40] Form 156 …. [82,865T.5] Form 157 …. [83,750.10] Form 158 …. [83,765.5] Companies Act 1961 s 227 …. [81,890.15] Companies Code 1981 s 229 …. [81,650.33] s 366 …. [80,765.15] s 556 …. [81,650.70] Competition and Consumer Act 2010 …. [81,860.9] s 155 …. [81,531.20] Sch 2 s 18 …. [81,650.7] s 82 …. [81,650.1] s 87 …. [81,650.1] Constitution of the Commonwealth of Australia 1901 s 71 …. [80,735.7]

s 51(xvii) …. [80,000.1], [81,005.40] s 71 …. [81,015.95] s 75 …. [80,735.10] s 76 …. [80,735.7] s 109 …. [81,889.7] Corporations Act 2001 …. [80,120.50], [80,765.15], [82,470.5] Ch 5 …. [81,240.45] s 9 …. [81,240.45], [81,240.50] s 416 …. [81,240.45] s 466(1) …. [80,765.15] s 513B …. [81,250.60] s 553 …. [81,650.5] s 562 …. [81,865.3] s 565 …. [81,890.25] s 588J …. [81,650.70] s 588M …. [81,650.70] s 596 …. [81,550.10] s 596B …. [81,005.45] s 601CL …. [81,240.45] Cross Border Insolvency Act 2008 s 21 …. [80,745.5] Evidence Act 1995 …. [81,550.70] s 4 …. [81,550.55] s 64 …. [80,000.20], [81,550.70] s 67 …. [80,000.20], [81,550.70] s 131 …. [80,910.167] s 135 …. [81,550.70], [84,140.10] s 136 …. [81,550.70], [84,140.10] s 140 …. [80,780.10] s 190 …. [80,000.20], [81,550.70] Fair Work Act 2009

s 12 …. [80,120.17] Family Law Act 1975 …. [80,120.17], [80,910.75], [80,975.120], [81,860.11], [81,900.20] Pt VIIIAA …. [81,860.11] s 4 …. [80,785.5] s 58 …. [81,240.35] s 66G …. [81,900.20] s 74 …. [81,900.20] s 78 …. [81,860.10], [81,860.11], [81,889.7], [81,900.20], [81,900.30] s 78(3) …. [81,900.30] s 79 …. [81,240.50], [81,860.11], [81,890.37], [81,900.20] s 79A …. [81,860.10], [81,860.11], [81,890.37] s 83 …. [81,900.20] s 86 …. [81,900.20], [81,900.30] s 87 …. [81,900.20], [81,900.30] s 87(3) …. [81,900.30] s 87(8) …. [81,900.30] Federal Court (Bankruptcy) Rules 2005 r 1.06(3) …. [94,030] r 4.03 …. [94,030] r 4.04 …. [94,030] Sch 1 Form 4 …. [94,030], [94,070], [94,075] Form 5 …. [94,030], [94,070], [94,075] Federal Court Rules …. [80,000.12], [80,910.45], [89,760.5] O 3 …. [80,770.35] r 3 …. [80,770.30] r 7(2)(e) …. [80,770.30] O4 r 11 …. [81,015.30] O 8 …. [81,015.40]

O 9 …. [81,015.70] O 13 …. [80,770.25] O 14 …. [81,000.10] O 35 r 7 …. [80,800.20] O 62 …. [80,765.35], [91,550.5] r 45(3) …. [80,915.80] O 64 r 1 …. [121,035.15] r 2 …. [121,035.15] O 77 …. [81,015.70], [81,015.210] Div 14 …. [80,765.35] r 2(1)(d) …. [81,550.20] r 7 …. [80,000.5], [80,760.5], [80,765.5] r 8 …. [80,760.10], [81,550.40] r 13 …. [80,915.175], [80,915.190], [80,915.205] r 13(3)(b) …. [80,915.210] r 14 …. [80,915.175], [80,915.190] r 16 …. [80,990.30], [80,990.40] r 16(2)(a) …. [81,015.30] r 17 …. [80,910.25] r 19(2) …. [81,015.30] r 19(4) …. [81,015.50] r 19(5) …. [80,915.115] r 19(6) …. [81,015.50] r 20 …. [81,550.5] r 22 …. [80,990.80] r 28 …. [81,550.10] r 28(2) …. [81,550.10] r 29 …. [81,550.10] r 30 …. [81,550.15] r 31 …. [81,550.10]

r 33 …. [81,550.10] r 34 …. [81,550.10] r 34(2)(c) …. [81,550.10] r 35 …. [81,550.10] r 37 …. [81,550.15] r 38 …. [81,550.20] r 39 …. [81,550.15], [81,550.65] r 40 …. [81,650.80] r 41 …. [82,310.3] r 46 …. [82,395.5] r 47 …. [82,790.15], [82,805.10] r 48 …. [82,495.20] r 49 …. [82,865Q.5] r 50 …. [82,865T.5] r 51 …. [82,865Q.5], [82,865T.5] r 52 …. [82,865Q.5], [82,865T.5] r 59 …. [83,750.10] r 60 …. [83,750.10], [83,750.20] r 62 …. [83,765.5] r 64 …. [81,531.25], [81,535.5], [81,550.25] r 65 …. [81,535.5], [81,550.25] O 80 …. [80,800.10] Sch 1 Form 149 …. [81,015.70] Form 151 …. [81,550.10] Sch 3 Pt 3 …. [80,000.10], [80,760.5] Federal Court of Australia Act 1976 …. [80,000.25] s 23 …. [81,535.2] s 24 …. [80,120.23], [81,240.12] s 24(1)(d) …. [83,390.10]

s 27 …. [80,800.10], [81,015.60], [81,895.50] s 31 …. [81,550.40] s 32 …. [82,310.4] s 32(1) …. [82,310.4] s 35A …. [80,000.5], [80,765.5] s 43 …. [80,765.5], [82,470.45], [121,035.15] s 48 …. [82,640.5] s 56 …. [91,560.5] Federal Court of Australia Rules 1977 …. [121,035.15] Federal Magistrates Act 1999 …. [80,000.12], [80,000.25] Div 6 …. [81,015.80] s 18 …. [82,310.4] s 19 …. [80,970.27] s 19(1) …. [80,970.27] s 19(3) …. [80,970.27] s 39 …. [80,970.27] s 74(1) …. [81,015.80] s 79(2) …. [91,550.5] s 79(3) …. [91,550.5] s 86(B) …. [91,550.5] s 102 …. [80,000.5] s 104 …. [80,970.10.10] Federal Magistrates Court (Bankruptcy) Rules 2006 r 3.02(2) …. [80,910.140] r 13.01 …. [91,550.5] Federal Magistrates Court Rules 2001 …. [80,000.12], [80,000.25] r 1.05 …. [80,000.12] r 13.01 …. [81,760.10] r 13.02 …. [81,760.10] r 16.05(2)(a) …. [82,310.30], [82,310.45] r 20.00A …. [80,000.5]

r 21.07 …. [82,470.45] Sch 3 Pt 2 …. [80,000.12] Federal Proceedings (Costs) Act 1981 …. [80,765.75] Foreign Judgments Act 1991 s 6 …. [80,915.207] s 7(2)(a) …. [80,915.207] Income Tax Assessment Act 1936 …. [81,760.10] Pt 6 Div 8 …. [81,250.60] Div 9 …. [81,250.60] s 102AAB …. [80,120.17] s 140ZD …. [81,860.14] s 140ZD(2) …. [81,860.14] s 218 …. [80,975.130], [81,110.5], [81,240.30], [81,870.10], [81,870.35], [82,113ZJ.5], [82,113ZK.5] s 218(1) …. [82,113ZK.5] s 221YU …. [81,785.10] s 264 …. [81,531.5], [81,531.20], [84,344.5] s 317 …. [80,120.17] Insolvency Practitioners in Australia (December 2011) …. [81,550.40], [82,113ZS.5] Judiciary Act 1903 s 8 …. [80,280.5] s 30 …. [82,470.5] s 35A …. [80,770.10] s 39B(1A) …. [82,470.5] s 40(1) …. [80,735.6] s 57 …. [84,375.10] s 61 …. [80,280.5] Jurisdiction of Courts (Cross-vesting) Act 1987 …. [80,735.10]

s 4 …. [80,000.5] s 5 …. [81,860.10], [81,860.11] Law and Justice Legislation Amendment Act 1994 …. [79,947] s 90 …. [79,947] s 91 …. [79,947] s 91(1) …. [79,947] s 91(2) …. [79,947] Matrimonial Causes Act 1959 s 84 …. [81,900.20] s 86(1) …. [81,900.20] National Health Act 1953 s 4 …. [80,120.17] Primary Industries and Energy Legislation Amendment Act 1994 s 2(5) …. [79,947] s 11 …. [79,947] s 12 …. [79,947] Sch 1 …. [79,947] Privacy Act 1988 s 6 …. [81,525.20] Proceeds of Crime Act 1987 …. [79,950], [82,275.30] Prohibition of Human Cloning for Reproduction Act 2002 …. [80,120.17] Service and Execution of Process Act 1901 s 11(b) …. [81,650.2] s 11(c) …. [81,650.2] Social Security Act 1991 …. [82,113L.5] s 4 …. [80,120.17] Superannuation Industry (Supervision) Act 1993 …. [81,860.14] Superannuation Industry (Supervision) Consequential Amendments Act 1993

s 6 …. [79,945] s 7 …. [79,945], [81,860.14] s 8 …. [79,945] s 9 …. [79,945] s 10 …. [79,945], [84,713.5] s 11 …. [79,945] Taxation Administration Act 1953 s 8C …. [81,531.20] s 8D …. [81,531.20] s 8E …. [81,531.20] NEW SOUTH WALES Community Services (Complaints, Reviews and Monitoring) Act 1993 …. [81,860.11] Conveyancing Act 1919 s 37A …. [81,884.1], [81,889.5], [81,889.7] District Court Act 1973 s 83A …. [80,915.46] s 85 …. [80,915.46] Industrial Relations Act 1996 s 182(3) …. [80,910.60] Local Courts (Civil Claims) Act 1970 s 39 …. [80,915.30], [80,915.46] s 69 …. [81,889.7] s 84(1)(r) …. [81,889.7] Real Property Act 1900 s 58(3) …. [81,670.55] s 90 …. [81,240.40] Supreme Court Act 1970 s 75 …. [81,240.35]

s 94 …. [80,915.46] s 95 …. [80,915.30] s 95(1) …. [80,915.46] Supreme Court Rules 1970 Pt 42 r 7 …. [84,305.10] Uniform Civil Procedure Rules 2005 …. [80,765.80] r 42.7(2) …. [80,765.80], [80,915.30] Wills, Probate and Administration Act 1898 s 61 …. [81,860.5] VICTORIA Companies Act 1961 s 291(2) …. [81,795.5] Limitation of Actions Act 1958 s 3(1) …. [80,915.55] s 5(2) …. [80,915.55], [80,970.11], [81,015.60] Magistrates Court Act 1989 s 100(7) …. [80,915.30] Marriage Act 1958 s 161 …. [81,860.11] Partnership Act 1958 s 37(1) …. [80,000.60] Property Law Act 1958 s 73A …. [80,000.40] s 172 …. [81,884.1], [81,900.30] s 279 …. [81,860.11] Supreme Court Act 1958 …. [81,860.12] Supreme Court Act 1986

s 101 …. [80,915.30] QUEENSLAND Acts Interpretation Act 1954 …. [89,760.10] s 39(1)(b) …. [89,760.10] WESTERN AUSTRALIA Civil Judgments Enforcement Act 2004 …. [80,910.125] Limitation Act 1935 …. [81,250.20] Motor Vehicle (Third Party Insurance) Act 1943 …. [81,860.15] Property Law Act 1969 s 89 …. [81,884.1] s 172 …. [81,900.20] Sentencing Act 1995 s 119(1) …. [81,650.5] SOUTH AUSTRALIA Companies Act 1962 s 374C …. [81,650.70] s 374D …. [81,650.70] Partnership Act 1891 s 9 …. [81,795.15] AUSTRALIAN CAPITAL TERRITORY Building Act 1972 s 19 …. [80,000.35] UNITED KINGDOM Bankruptcy Act 1869 …. [81,715.5]

Bankruptcy Act 1883 …. [83,145.30] s 7(4) …. [80,915.85] s 41(1)(g) …. [80,915.13] Bankruptcy Act 1914 s 122 …. [80,745.10] Bankruptcy Court Act 1831 …. [80,000.1] Common Law Procedure Act 1952 …. [81,650.2] Insolvency Act 1986 s 214 …. [81,650.70] Statute of Elizabeth 1585 (27 Eliz c 4) …. [81,889.10] Sunday Observance Act 1677 …. [89,760.5] Wills Act 1837 …. [80,915.11]

Contents Publisher’s note Features of this Book Table of Cases Table of Statutes Bankruptcy Act 1966 Table of Provisions Table of Amendments Application and Transitional Provisions Introduction to the Bankruptcy Act 1966 Pt I — Preliminary Pt IA — Interpretation Pt IB — Application of Act Pt II — Administration Pt III — Courts Pt IV — Proceedings in Connection with Bankruptcy Pt V — Control over Person and Property of Debtors and Bankrupts Pt VI — Administration of Property Pt VII — Discharge and Annulment Pt VIII — Trustees Pt IX — Debt Agreements Pt X — Personal Insolvency Agreements Pt XI — Administration of Estates of Deceased Persons in Bankruptcy Pt XIA — Farmers’ Debts Assistance Pt XII — Unclaimed Dividends or Moneys Pt XIII — Evidence Pt XIV — Offences

Pt XV — Provisions Relating to the Bankruptcy (Estate Charges) Act 1997 Pt XVI — Miscellaneous Schedules

Bankruptcy (Estate Charges) Act 1997 Table of Provisions Table of Amendments Transitional Provisions Pt 1 — Preliminary Pt 2 — Interest Charge Pt 3 — Realisations Charge Pt 4 — Miscellaneous

Bankruptcy (Registration Charges) Act 1997 [Repealed] Table of Provisions Table of Amendments Bankruptcy (Registration Charges) Act 1997

Bankruptcy Regulations 1996 Table of Provisions Table of Amendments Pt 1 — Preliminary Pt 2 — Administration Pt 3 — Courts Pt 4 — Proceedings in Connexion with Bankruptcy Pt 5 — Control over Person and Property of Debtors and Bankrupts Pt 6 — Administration of Property Pt 7 — Discharge and Annulment Pt 8 — Trustees Pt 9 — Debt Agreements Pt 10 — Personal Insolvency Agreements Pt 11 — Administration of Estates of Deceased Persons in Bankruptcy

Pt 12 — Unclaimed Dividends or Moneys Pt 13 — National Personal Insolvency Index Pt 14 — Offences under the Act Pt 15 — Registration of Registered Trustees [Repealed] Pt 15A — Provisions Relating to the Bankruptcy Charges Acts Pt 16 — Miscellaneous Schedule 1 — Forms see Bankruptcy Forms Schedule 2 — Modifications under Section 76A of the Act — Meetings of Creditors under Division 6 of Part IV of the Act Schedule 3 — Paragraph 109(1)(a) of the Act — Order of Payment of First Priority Debts Schedule 4 — Modifications of the Fringe Benefits Tax Assessment Act 1986 Schedule 4A — Performance Standards for Trustees (including Controlling Trustees) Schedule 5 — Modifications under Section 185A of the Act — Meetings to Consider Proposals Relating to Debt Agreements [Repealed] Schedule 6 — Modifications in Relation to Part X of the Act Schedule 7 — Modifications under Part XI of the Act — Administration of Estates of Deceased Persons Schedule 8 — Information on the National Personal Insolvency Index Schedule 9 — Official Receiver’s Fees [Repealed] Schedule 10 — Official Trustees’ Fees [Repealed]

Federal Court (Bankruptcy) Rules 2005 Table of Provisions Table of Amendments Pt 1 — Preliminary Pt 2 — General Pt 3 — Bankruptcy Notices Pt 4 — Creditor’s Petitions Pt 5 — Debtor’s Petitions Pt 6 — Examinations

Pt 7 — Annulment or Review of Bankruptcy Pt 8 — Trustees Pt 9 — Debt Agreements Pt 10 — Personal Insolvency Agreements Pt 11 — Administration of Estates of Deceased Persons Pt 12 — Warrants Pt 13 — Costs Pt 14 — Proceedings under Cross-border Insolvency Act Schedule 1 — Forms see Bankruptcy Forms Schedule 2 — Powers of the Court that may be Exercised by a Registrar Schedule 3 — Notes to these Rules see Bankruptcy Forms

Bankruptcy Forms Contents Bankruptcy Regulations 1996 Schedule 1 — Forms Insolvency and Trustee Service Approved Forms Federal Court Bankruptcy Forms

Costs and Fees Contents Bankruptcy Act — Table Bankruptcy Rules Federal Court Rules

Index Index

[page 1]

Bankruptcy Act 1966 TABLE OF PROVISIONS Section

1 2 3 4

5 5AA 5A 5B 5C 5D 5E 5F 5G 5H 5J

Title

PART I — PRELIMINARY Short title …. Commencement …. Parts [Repealed] …. Repeal …. PART IA — INTERPRETATION Interpretation …. Place of origin of bankruptcy and insolvency matters [Repealed] …. Acting in accordance with a person’s directions or instructions …. Associated entities: companies …. Associated entities: natural persons …. Associated entities: partnerships …. Associated entities: trusts …. Controlling an entity in relation to a matter …. Financial affairs of a company …. Financial affairs of a natural person …. Financial affairs of a partnership ….

Paragraph

[80,005] [80,010] [80,015] [80,017]

[80,120] [80,122] [80,125] [80,130] [80,135] [80,140] [80,145] [80,150] [80,155] [80,157] [80,160]

5K 6 6A 6B

6C

7 7A 8 9

Financial affairs of a trust …. Meaning of intent to defraud creditors …. Statement of affairs for purposes other than Part XI …. Provision of statement of affairs under Part XI and statement of administration of estate of deceased person …. Interpretive provisions relating to proceeds of crime orders …. PART IB — APPLICATION OF ACT Application of Act …. Application of the Criminal Code …. Act to bind the Crown …. Laws of States and Territories not affected by Act ….

[80,165] [80,170] [80,175]

[80,180] [80,185]

[80,275] [80,278] [80,280] [80,285]

PART II — ADMINISTRATION

10

DIVISION 1 — GENERAL Delegation by Minister or Secretary ….

[80,385] [page 2]

11 12 13 14 14A 15

Inspector-General in Bankruptcy …. Functions of Inspector-General …. The Australian Financial Security Authority …. Registrars and Deputy Registrars [Repealed] …. Stamps of Registrars [Repealed] …. Official Receivers ….

[80,390] [80,395] [80,400] [80,405] [80,410] [80,415]

16 17 17A 17AA 17B 18 18AA

18A 19 19AA 19A 19B 20

20A 20B 20C 20D 20E 20F

Appointment of Inspector-General and Official Receivers …. Acting Inspector-General and Acting Official Receivers …. Acting Registrars and Deputy Registrars [Repealed] …. Functions of Registrar may be exercised by certain officials [Repealed] …. Arrangements for services of State and Northern Territory Magistrates …. The Official Trustee in Bankruptcy …. Public Governance, Performance and Accountability Act 2013 does not apply to the Official Trustee …. Liability of the Official Trustee …. Duties etc of trustee …. Power of investigation of bankrupt’s affairs …. Liability of Inspector-General, Official Receivers etc …. Officers to act in aid of each other [Repealed] …. Records, returns and bank accounts [Repealed] …. DIVISION 2 — COMMON INVESTMENT FUND Interpretation …. The Common Investment Fund …. Investment Board [Repealed] …. Investment of money in Common Fund …. Borrowing for the Common Fund …. Moneys in Common Fund not held on

[80,420] [80,425] [80,430] [80,435] [80,440] [80,445]

[80,447] [80,450] [80,455] [80,460] [80,465] [80,470] [80,475]

[80,525] [80,530] [80,535] [80,540] [80,543]

20G 20H 20J

account of particular estates etc …. Common Investment Fund Equalization Account …. Credits to and debits from the Equalization Account …. Interest on moneys in Common Fund payable only in certain circumstances ….

[80,545] [80,550] [80,555] [80,560]

PART III — COURTS DIVISION 1 — THE FEDERAL COURT OF BANKRUPTCY [Repealed] DIVISION 2 — JURISDICTION AND POWERS OF COURTS IN BANKRUPTCY 27 Bankruptcy courts …. [80,735] 28 Jurisdiction and powers of Courts in bankruptcy [Repealed] …. [80,740] 29 Courts to help each other …. [80,745] [page 3] 30 31 31A 32 33 33A 34

General powers of Courts in bankruptcy …. Exercise of jurisdiction …. Exercise of powers by certain officials [Repealed] …. Costs …. Adjournment, amendment of process and extension and abridgment of times …. Alteration of filing date for statement of affairs …. Orders and commissions for examination of

[80,750] [80,755] [80,760] [80,765] [80,770] [80,770A]

34A 35

35A 35B 36 37 38 39

witnesses …. Standard of proof …. Family Court’s jurisdiction in bankruptcy where trustee is a party to property settlement or spousal maintenance proceedings etc …. Transfer of proceedings to Family Court …. Family Court of Western Australia …. Enforcement of orders etc …. Power of Court to rescind orders etc …. Appeals to Federal Court of Australia [Repealed] …. Appeals to High Court [Repealed] ….

[80,775] [80,780]

[80,785] [80,790] [80,793] [80,795] [80,800] [80,805] [80,810]

PART IV — PROCEEDINGS IN CONNECTION WITH BANKRUPTCY

40 41 42

43 44 45 46 47 48

49

DIVISION 1 — ACTS OF BANKRUPTCY Acts of bankruptcy …. Bankruptcy notices …. Payment etc of debt to Commonwealth or State after service of bankruptcy notice …. DIVISION 2 — CREDITORS’ PETITIONS Jurisdiction to make sequestration orders …. Conditions on which creditor may petition …. Creditor’s petition against partnership …. Petition against 2 or more joint debtors …. Requirements as to creditor’s petition …. Petitioning creditor to lodge deposit to cover advertising expenses, etc [Repealed] …. Change of petitioners ….

[80,910] [80,915] [80,920]

[80,970] [80,975] [80,980] [80,985] [80,990]

[80,995] [81,000]

50 51 52 53 54

Taking control of debtor’s property before sequestration …. Costs of prosecuting creditor’s petition …. Proceedings and order on creditor’s petition …. Consolidation of proceedings …. Bankrupt’s statement of affairs ….

[81,005] [81,010] [81,015] [81,020] [81,025]

DIVISION 2A — DECLARATION OF INTENTION TO PRESENT DEBTOR’S PETITION 54A Presentation of declaration …. [81,075] 54B When debtor disqualified from presenting declaration …. [81,080] 54C Acceptance or rejection of declaration …. [81,085] 54D Official Receiver to give information to debtor …. [81,090] [page 4] 54E 54F 54G 54H 54J 54K 54L

Enforcement suspended during stay period …. Duties of sheriff …. Duty of court registrar …. Duties of person entitled to deduct money owing to declared debtor …. Extension of time where this Division prevents the doing of an act …. Section 33 not to apply to this Division …. Secured creditor’s rights under security not affected ….

[81,095] [81,100] [81,105] [81,110] [81,115] [81,120] [81,125]

55 56 56A 56B 56C 56D 56E 56F 56G 57 57A

DIVISION 3 — DEBTORS’ PETITIONS Debtor’s petition …. Debtor’s petition against partnership [Repealed] …. Persons who may present a debtor’s petition against a partnership …. Presentation of a debtor’s petition against a partnership …. Referral to the Court of a debtor’s petition against a partnership …. Acceptance of a debtor’s petition against a partnership by the Official Receiver …. Effects of acceptance of a debtor’s petition against a partnership …. Extra duties of non-petitioning partners who become bankrupts …. Inspection of statements of affairs of partners and partnerships …. Debtor’s petition by joint debtors who are not partners …. Time at which person becomes bankrupt on debtor’s petition ….

[81,175] [81,180] [81,180A] [81,180B] [81,180C] [81,180D] [81,180E] [81,180F] [81,180G] [81,185] [81,190]

DIVISION 4 — EFFECT OF BANKRUPTCY ON PROPERTY AND PROCEEDINGS 58 Vesting of property upon bankruptcy — general rule …. [81,240] 58A Vesting of property upon bankruptcy — effect of orders in force under the proceeds of crime law …. [81,243] 59 Second or subsequent bankruptcy …. [81,245] 59A Orders under Part VIII or VIIIAB of the Family Law Act 1975 …. [81,247]

60 61

Stay of legal proceedings …. Actions by bankrupt partner’s trustee ….

[81,250] [81,255]

62 63

Actions on joint contracts …. Death of bankrupt ….

[81,260] [81,265]

DIVISION 5 — MEETINGS OF CREDITORS

63A 63B

Subdivision A — Preliminary Definitions …. Trustee’s representative ….

[81,305] [81,310] [page 5]

64 64A 64B 64C 64D 64E 64F 64G

64H 64J

Subdivision B — Convening of meetings Trustee to convene meetings …. Persons to whom notice of meeting to be given …. Certain matters to be included in notice of meeting …. If telephone conference facilities are available …. Statement by creditor as to amount of debt …. Notice about voting by proxy …. Notice about appointment of attorney …. Agenda to be set out in notice of meeting ….

[81,315] [81,315A] [81,315B] [81,315C] [81,315D] [81,315E] [81,315F] [81,315G]

Subdivision C — Procedure before opening of meeting Creditors, or proxies or attorneys, participating by telephone …. [81,315H] Preparation of attendance record …. [81,315J]

64K 64L 64M 64N 64P 64Q 64R 64S 64T 64U 64V 64W 64X

64Y 64Z 64ZA 64ZB 64ZBA 64ZC 64ZD 64ZE 64ZF 65 66

Subdivision D — Procedure at meetings Opening of meeting …. Appointment of minutes secretary …. Announcement of proxies and attorneys …. Quorum …. Election of person to preside at meeting …. Whether holding of meeting is convenient to majority of creditors …. Tabling of bankrupt’s statement of affairs …. Statements and questions …. Motions …. Remuneration of registered trustee …. Appointment of committee of inspection …. Other business …. Next meeting …. Subdivision E — Miscellaneous Adjournment of meeting …. Duties of minutes secretary …. Entitlement to vote …. Manner of voting …. Creditors’ resolution without meeting …. Appointment of proxies …. Provisions relating to motions and amendments of motions …. Joint bankruptcies …. Substantial compliance to be sufficient …. Election of chairman [Repealed] …. Entitlement to vote at meeting of creditors [Repealed] ….

[81,315K] [81,315L] [81,315M] [81,315N] [81,315P] [81,315Q] [81,315R] [81,315S] [81,315T] [81,315U] [81,315V] [81,315W] [81,315X]

[81,315Y] [81,315Z] [81,315ZA] [81,315ZB] [81,315ZBA] [81,315ZC] [81,315ZD] [81,315ZE] [81,315ZF] [81,320]

67 68 69

Manner of voting [Repealed] …. Admission and rejection of claim to vote [Repealed] …. Public examination of bankrupt [Repealed] ….

[81,325] [81,330] [81,335] [81,340] [page 6]

70 71 72

73 73A 73B

73C 74 74A 75 76

DIVISION 5A — COMMITTEE OF INSPECTION Committee of inspection …. Vacation of office etc …. Member of committee not to purchase part of estate ….

[81,345] [81,350] [81,355]

DIVISION 6 — COMPOSITION OR ARRANGEMENT WITH CREDITORS Composition or arrangement …. [81,405] Trustee may require surety for cost of meeting …. [81,405A] Declaration of relationships by proposed trustee of composition or scheme of arrangement …. [81,405B] Statement of affairs and declarations of relationships to be tabled at meeting …. [81,405C] Annulment of bankruptcy …. [81,410] Variation of composition or scheme of arrangement …. [81,410A] Effect of composition or scheme of arrangement …. [81,415] Application of Part VIII to trustee of a

composition or arrangement …. Meetings of creditors …. Setting aside and termination of a composition or scheme of arrangement ….

76A 76B

[81,420] [81,425] [81,425B]

PART V — CONTROL OVER PERSON AND PROPERTY OF DEBTORS AND BANKRUPTS

77 77AA 77A 77B 77C 77CA 77D 77E 77F 78 79 80 81

DIVISION 1 — GENERAL Duties of bankrupts as to discovery etc of property …. Access by Official Receiver and others to premises …. Access by trustee to books of associated entity …. Bankrupt to assist Official Receiver [Repealed] …. Power of Official Receiver to obtain information and evidence …. Power of Official Receiver to obtain statement of affairs …. Allowances and expenses in respect of attendance …. Advance on account of allowances and expenses …. Allowances and expenses to be paid out of bankrupt’s estate …. Arrest of debtor or bankrupt …. Re-direction of postal articles [Repealed] …. Notification of change in name, address or day-time telephone number …. Discovery of bankrupt’s property etc ….

[81,520] [81,523] [81,525] [81,530] [81,531] [81,531A] [81,532] [81,533] [81,534] [81,535] [81,540] [81,545] [81,550]

81A 81B 81C 81D

DIVISION 2 — OFFSHORE INFORMATION NOTICES Issue of notices …. [81,580] Extension of period of notice …. [81,585] Variation of notices …. [81,590] Withdrawal of notices …. [81,595] [page 7]

81E 81F

Notices may be included in same document …. Relationship between this Division and section 77C ….

[81,600] [81,605]

DIVISION 3 — FAILURE TO COMPLY WITH CERTAIN NOTICES 81G Effect of non-compliance with notice …. [81,630] PART VI — ADMINISTRATION OF PROPERTY

82 83 84 85 86 87 88 89 90

DIVISION 1 — PROOF OF DEBTS Debts provable in bankruptcy …. Debt not to be considered proved until admitted …. Manner of proving debts …. Proof by employees …. Mutual credit and set-off …. Deduction of discounts …. Apportionment to principal and interest of payments made before bankruptcy …. Apportionment where security realized before or after bankruptcy …. Proof of debt by secured creditor ….

[81,650] [81,655] [81,660] [81,665] [81,670] [81,675] [81,680] [81,685] [81,690]

91 92 93 94 95 96 97 98 99

100 101 102 103 104 105 106 107

Redemption of security by trustee etc …. Amendment of valuation …. Repayment of excess …. Subsequent realization of security …. Proof in respect of distinct contracts …. Proof in respect of proportionate part of periodical payment …. Production of bills of exchange and promissory notes …. Amendment of proof of debt …. Application to the Court where creditor or bankrupt considers proof wrongly admitted [Repealed] …. Costs of proving debts etc …. Inspection of proofs by creditors etc …. Admission or rejection of proofs …. Debts to be rounded down to nearest dollar …. Appeal against decision of trustee in respect of proof …. Costs of appeal …. Trustee may administer oaths etc …. Creditor not to receive more than the amount of his or her debt and interest ….

[81,695] [81,700] [81,705] [81,710] [81,715] [81,720] [81,725] [81,730]

[81,735] [81,740] [81,745] [81,750] [81,755] [81,760] [81,765] [81,770] [81,775]

DIVISION 2 — ORDER OF PAYMENT OF DEBTS

108 109 109A

Subdivision A — General Debts proved to rank equally except as otherwise provided …. Priority payments …. Debts due to employees ….

[81,780] [81,785] [81,790]

[page 8] 110 111 112 113 114

Application of estates of joint debtors …. Postponement of spouse’s claims [Repealed] …. Interest on debts [Repealed] …. Apprenticeship etc claims …. Payment of liabilities etc incurred under terminated deed etc ….

[81,795] [81,800] [81,805] [81,810] [81,815]

Subdivision B — The effect of proceeds of crime orders and applications for proceeds of crime orders 114A The effect of proceeds of crime orders …. [81,820] 114B The effect of applications for proceeds of crime orders …. [81,825] 114C Director of Public Prosecutions or Commissioner of the Australian Federal Police must notify the trustee of certain matters …. [81,830] DIVISION 3 — PROPERTY AVAILABLE FOR PAYMENT OF DEBTS

115 116 117 118 119 119A

Subdivision A — General Commencement of bankruptcy …. Property divisible among creditors …. Policies of insurance against liabilities to third parties …. Execution by creditor against property of debtor who becomes a bankrupt etc …. Duties of sheriff after receiving notice of presentation of petition etc …. Duties of sheriff after receiving notice of bankruptcy etc ….

[81,855] [81,860] [81,865] [81,870] [81,875] [81,880]

120 121 121A 122 123 124 125 126 127 128

128A 128B

128C 128D 128E

Undervalued transactions …. Transfers to defeat creditors …. Transactions where consideration given to a third party …. Avoidance of preferences …. Protection of certain transfers of property against relation back etc …. Protection of certain payments to bankrupt etc …. Certain accounts of undischarged bankrupt …. Dealings with undischarged bankrupt in respect of after-acquired property …. Limitation of time for making claims by trustee etc …. Notice to trustee where identity of vendor etc with bankrupt in doubt …. Subdivision B — Superannuation Contributions Simplified outline …. Superannuation contributions made to defeat creditors — contributor is a person who later becomes a bankrupt …. Superannuation contributions made to defeat creditors — contributor is a third party …. Time for making claims by trustee …. Superannuation account-freezing notice ….

[81,884] [81,889] [81,893] [81,895] [81,900] [81,905] [81,910] [81,915] [81,920] [81,925]

[81,925A]

[81,925B] [81,925C] [81,925D] [81,925E] [page 9]

128F

Revocation of superannuation accountfreezing notice ….

[81,925F]

128G 128H 128J 128K 128L 128M 128N

129 129AA 129A 130 131 132 133 134 135 136 137 138

Copy of superannuation account-freezing notice to be given to trustee etc …. Consent of Official Receiver to the cashing etc of a superannuation interest …. Power of Court to set aside superannuation account-freezing notice …. Judicial enforcement of superannuation account-freezing notices …. Protection of trustee of eligible superannuation plan …. References to a member of an eligible superannuation plan …. Definitions …. DIVISION 4 — REALIZATION OF PROPERTY Trustee to take possession of property of bankrupt …. Time limit for realising property …. Eligible judges …. Warrant for seizure of property connected with the bankrupt …. Income of bankrupt [Repealed] …. Vesting and transfer of property …. Disclaimer of onerous property …. Powers exercisable at discretion of trustee …. Further powers exercisable by trustee [Repealed] …. Right to pay off mortgages …. Right of trustee to inspect goods held as security …. Limitation of trustee’s power in respect of

[81,925G] [81,925H] [81,925J] [81,925K] [81,925L] [81,925M] [81,925N]

[81,975] [81,976] [81,978] [81,980] [81,985] [81,990] [81,995] [82,000] [82,005] [82,010] [82,015]

139

copyright, patents etc …. Protection of trustee from personal liability in certain cases ….

[82,020] [82,025]

DIVISION 4A — ORDERS IN RELATION TO PROPERTY OF ENTITY CONTROLLED BY BANKRUPT OR FROM WHICH BANKRUPT DERIVED A BENEFIT 139A Trustee may apply to Court …. [82,075] 139B Application to be served on respondent entity …. [82,080] 139C Who may appear at hearing …. [82,085] 139CA Definition of examinable period …. [82,088] 139D Order relating to property of entity other than a natural person …. [82,090] 139DA Order relating to property of natural person …. [82,093] 139E Order relating to net worth of entity other than a natural person …. [82,095] 139EA Order relating to increase in value of property of natural person …. [82,098] 139F Court to take account of interests of other persons …. [82,100] 139G Giving effect to orders under this Division …. [82,105] 139H Entity entitled to claim in bankruptcy …. [82,110] [page 10]

DIVISION 4B — CONTRIBUTION BY BANKRUPT AND RECOVERY OF PROPERTY

139J

Subdivision A — Preliminary Objects of Division ….

[82,113J]

139K

Subdivision B — Interpretation Definitions ….

[82,113K]

139L 139M 139N

139P 139Q 139R 139S 139T

139U 139V

Subdivision C — Income Meaning of income …. Derivation of income …. Income varied by income tax payments and refunds and child support payments ….

[82,113L] [82,113M] [82,113N]

Subdivision D — Liability of bankrupt to pay contributions Liability of bankrupt to pay contribution …. [82,113P] Change in liability of bankrupt …. [82,113Q] Liability not affected by subsequent discharge …. [82,113R] Contribution payable by bankrupt …. [82,113S] Determination of higher income threshold in cases of hardship …. [82,113T] Subdivision E — Provision of information to trustee Bankrupt to provide evidence of income …. [82,113U] Power of trustee to require bankrupt to provide additional evidence …. [82,113V]

Subdivision F — Assessments of income and contribution 139W Assessment of bankrupt’s income and contribution …. [82,113W] 139WA No time limit on making assessment …. [82,113WA] 139X Basis of assessments …. [82,113X] 139Y Trustee may regard bankrupt as receiving reasonable remuneration …. [82,113Y]

139Z

If bankrupt claims not to be in receipt of income ….

139ZF

Subdivision G — Review of assessment Internal review of assessment …. Inspector-General may authorise officer to act on his or her behalf [Repealed] …. Inspector-General may request further information …. Decision on review …. Inspector-General to notify bankrupt and trustee of decision …. Review of assessment decisions ….

139ZG 139ZH 139ZI

Subdivision H — When contribution payable Payment of contribution …. If excess contribution paid …. Notice of determinations ….

139ZA 139ZB 139ZC 139ZD 139ZE

[82,113Z]

[82,113ZA] [82,113ZB] [82,113ZC] [82,113ZD] [82,113ZE] [82,113ZF]

[82,113ZG] [82,113ZH] [82,113ZI] [page 11]

Subdivision HA — Supervised account regime 139ZIA Objects …. [82,113ZIA] 139ZIB Definitions …. [82,113ZIB] 139ZIC Trustee may determine that the supervised account regime applies to the bankrupt …. [82,113ZIC] 139ZID Revocation of determination …. [82,113ZID] 139ZIDA When determination ceases to be in force …. [82,113ZIDA] 139ZIE Bankrupt must open and maintain supervised account …. [82,113ZIE]

139ZIEA New supervised account …. 139ZIF Bankrupt’s monetary income to be deposited to supervised account …. 139ZIG Trustee to supervise withdrawals from supervised account …. 139ZIH Constructive income receipt arrangements …. 139ZIHA Non-monetary income receipt arrangements …. 139ZII Cash income …. 139ZIIA Keeping of books …. 139ZIJ Injunctions …. 139ZIK Interim injunctions …. 139ZIL Discharge etc of injunctions …. 139ZIM Certain limits on granting injunctions not to apply …. 139ZIN Other powers of the Court unaffected …. 139ZIO Inspector-General may review trustee’s decision …. 139ZIP Inspector-General may request further information …. 139ZIR Inspector-General’s decision on review …. 139ZIS Inspector-General to notify bankrupt and trustee of decision …. 139ZIT AAT review of decisions ….

[82,113ZIEA] [82,113ZIF] [82,113ZIG] [82,113ZIH] [82,113ZIHA] [82,113ZII] [82,113ZIIA] [82,113ZIJ] [82,113ZIK] [82,113ZIL] [82,113ZIM] [82,113ZIN] [82,113ZIO] [82,113ZIP] [82,113ZIR] [82,113ZIS] [82,113ZIT]

Subdivision I — Collection of money or property by Official Receiver from person other than the bankrupt 139ZJ Definition …. [82,113ZJ] 139ZK Persons to whom Subdivision applies …. [82,113ZK] 139ZL Official Receiver may require persons to make payments …. [82,113ZL]

139ZM 139ZN 139ZO 139ZP

Power of Court to set aside notice …. Charge over property …. Failure to comply with notice …. Employer not to dismiss or injure bankrupt because of giving of notice ….

[82,113ZM] [82,113ZN] [82,113ZO] [82,113ZP]

Subdivision J — Collection of money or property by Official Receiver from party to transaction that is void against the trustee 139ZQ Official Receiver may require payment …. [82,113ZQ] 139ZR Charge over property …. [82,113ZR] 139ZS Power of Court to set aside notice …. [82,113ZS] 139ZT Failure to comply with notice …. [82,113ZT] [page 12]

Subdivision K — Rolled-over superannuation interests etc 139ZU Order relating to rolled-over superannuation interests etc …. [82,113ZU] 139ZV Enforcement of order …. [82,113ZV] 139ZW Definitions …. [82,113ZW] DIVISION 4C — RESTRICTION ON OVERSEAS TRAVEL BY BANKRUPT [Repealed]

140 141 142 143

DIVISION 5 — DISTRIBUTION OF PROPERTY Declaration and distribution of dividends …. Joint and separate dividends …. Apportionment of expenses of administration of joint and separate estates …. Provision to be made for creditors residing at

[82,115] [82,120] [82,125]

144 145 146 147

a distance etc …. Right of creditor who has not proved debt before declaration of dividend …. Final dividend …. Distribution of dividends where bankrupt fails to file statement of affairs …. No action for dividend ….

[82,130] [82,135] [82,140] [82,145] [82,150]

PART VII — DISCHARGE AND ANNULMENT

148

DIVISION 1 — PRELIMINARY Misleading conduct by bankrupt ….

[82,160]

DIVISION 2 — DISCHARGE BY OPERATION OF LAW

149 149A

149B 149C 149D 149E 149F 149G 149H 149J

Subdivision A — Discharge after certain period Automatic discharge …. Bankruptcy extended when objection made …. Subdivision B — Objections Objection to discharge …. Form of notice of objection …. Grounds of objection …. Registrar to record objection [Repealed] …. Copy of notice of objection to be given to bankrupt …. Date of effect of objection …. Trustee ceasing to object on some grounds …. Withdrawal of objection …. Subdivision C — Review of objection

[82,163] [82,165]

[82,168] [82,170] [82,173] [82,175] [82,178] [82,180] [82,183] [82,185]

149K 149L 149M

Internal review of objection …. Inspector-General may authorise officer to act on his or her behalf [Repealed] …. Inspector-General may request further information ….

[82,188] [82,190] [82,193] [page 13]

149N 149P 149Q

Decision on review …. Inspector-General to notify bankrupt and trustee of decision …. Review of decisions ….

[82,195] [82,198] [82,200]

DIVISION 3 — EARLY DISCHARGE [Repealed] DIVISION 4 — PROVISIONS APPLICABLE TO ALL DISCHARGES 152 Discharged bankrupt to give assistance …. [82,270] 153 Effect of discharge …. [82,275]

153A 153B 154

DIVISION 5 — ANNULMENT OF BANKRUPTCY Annulment on payment of debts …. Annulment by Court …. Effect of annulment ….

[82,305] [82,310] [82,315]

PART VIII — TRUSTEES

154A 155 155A

DIVISION 1 — APPOINTMENT AND OFFICIAL NAME Application to become a registered trustee …. [82,375] Processing of an application …. [82,380] Committee’s decision on an application …. [82,382]

155B 155C 155D 155E 155F 155G 155H 155I 155J 155K 156 156A 157 158 159 160 161 161A

Effect of committee’s decision …. Registration as a trustee …. Extension of registration …. Application for change of conditions on practising as a registered trustee …. Decision on application for change of conditions …. Voluntary termination of registration …. Consideration of involuntary termination of registration …. Decision on involuntary termination of registration …. After termination of registration …. Payment of fees etc for application, registration and extension …. Gazettal of registration etc [Repealed] …. Consent to act as trustee …. Appointment of trustees …. Appointment of more than one trustee etc …. Vacancy in office of trustee …. Official Trustee to be trustee when no registered trustee is trustee …. Trustee may act in official name …. Registered trustee to notify InspectorGeneral of certain events ….

[82,383] [82,383C] [82,383D] [82,383E] [82,383F] [82,383G] [82,383H] [82,383I] [82,383J] [82,383K] [82,385] [82,390] [82,395] [82,400] [82,405] [82,410] [82,415] [82,420] [page 14]

161B

DIVISION 2 — REMUNERATION AND COSTS Trustee’s remuneration — minimum

162 163 163A 164 165 166 167

168 169 170 170A 171 172 173 174 175 176

177 178 179

entitlement …. Trustee’s remuneration — general …. Remuneration of the Official Trustee …. Costs and expenses of Official Receiver …. Two or more trustees acting in succession …. Trustee not to accept extra benefit etc …. Payment to third parties …. Review of remuneration etc …. DIVISION 3 — ACCOUNTS AND AUDITS Trustee not to pay moneys into private account …. Trustee to pay moneys into bank account …. Trustee to give Official Receiver and bankrupt information etc …. Annual return …. Trustee to give and obtain receipts …. Investment of surplus funds [Repealed] …. Books to be kept by trustee …. Trustee’s books when trading …. Audit of trustee’s accounts …. Court may order trustee to make good loss caused by breach of duty …. DIVISION 4 — CONTROL OVER TRUSTEES Control of creditors over trustees …. Appeal to Court against trustee’s decision etc …. Control of trustees by the Court ….

[82,465] [82,470] [82,475] [82,478] [82,480] [82,485] [82,490] [82,495]

[82,545] [82,550] [82,555] [82,557] [82,560] [82,565] [82,570] [82,575] [82,580] [82,585]

[82,635] [82,640] [82,645]

DIVISION 4A — EXAMINATION OF TRUSTEES AND OTHER

PERSONS [Repealed]

180 181 181A 182 183 184 184A

DIVISION 5 — VACATION OF OFFICE Resignation of trustee …. Removal of trustee …. Streamlined method for replacing trustee …. Bankruptcy of trustee etc …. Release of registered trustee by the Court …. Release of registered trustee by operation of law after 7 years …. Release of the Official Trustee ….

[82,790] [82,795] [82,795A] [82,800] [82,805] [82,810] [82,815]

PART IX — DEBT AGREEMENTS

185 185A

DIVISION 1 — INTRODUCTION Definitions …. Procedures for dealing with proposals [Repealed] ….

[82,865] [82,865A] [page 15]

185B

185C 185D 185E 185EA

Acceptance of a proposal [Repealed] ….

[82,865B]

DIVISION 2 — DEBT AGREEMENT PROPOSALS Giving a debt agreement proposal to the Official Receiver …. [82,865C] Statement of affairs to be given with a debt agreement proposal …. [82,865D] Accepting a debt agreement proposal for processing …. [82,865E] Processing of debt agreement proposal …. [82,865EA]

185EB 185EC 185ED 185F 185G

185H 185I 185J 185K 185L

185LA 185LB 185LC

185LD 185LE 185LEA 185LF 185LG

Inspection of creditor’s statement …. Acceptance of a debt agreement proposal …. Cancellation of acceptance of debt agreement proposal for processing …. Effect of accepting a debt agreement proposal for processing …. Lapsing of a debt agreement proposal ….

[82,865EB] [82,865EC] [82,865ED] [82,865F] [82,865G]

DIVISION 3 — MAKING A DEBT AGREEMENT Making a debt agreement …. [82,865H] Parties to a debt agreement …. [82,865I] Release of debtor from debts [Repealed] …. [82,865J] Prevention of proceedings relating to debts …. [82,865K] Distribution of property under a debt agreement [Repealed] …. [82,865L] DIVISION 3A — DUTIES OF ADMINISTRATORS Duties of an administrator — general …. [82,865LA] Administrator to notify creditors of a 3month arrears default by a debtor …. [82,865LB] Administrator to notify Official Receiver of a designated 6-month arrears default by a debtor …. [82,865LC] Administrator to maintain separate bank account …. [82,865LD] Administrator to keep accounts etc …. [82,865LE] Annual return …. [82,865LEA] Succession of administrator …. [82,865LF] Duties of an administrator in relation to debt agreements — extended meaning …. [82,865LG]

185M 185MA 185MB 185MC 185MD

185N

DIVISION 4 — VARYING A DEBT AGREEMENT Varying a debt agreement …. [82,865M] Procedures for dealing with proposals to vary debt agreements …. [82,865MA] Inspection of creditor’s statement …. [82,865MB] Acceptance of a proposal to vary a debt agreement …. [82,865MC] Withdrawal of proposal to vary a debt agreement …. [82,865MD] DIVISION 5 — ENDING A DEBT AGREEMENT End of debt agreement on discharge of obligations under agreement …. [82,865N] [page 16]

185NA 185P 185PA 185PB 185PC 185PD 185Q 185QA 185R

Release of debtor from debts …. Terminating a debt agreement by accepting a proposal …. Procedures for dealing with proposals to terminate debt agreements …. Inspection of creditor’s statement …. Acceptance of a proposal to terminate a debt agreement …. Withdrawal of proposal to terminate a debt agreement …. Terminating a debt agreement by order of the Court …. Terminating a debt agreement — designated 6-month arrears default …. Terminating a debt agreement by the bankruptcy of the debtor ….

[82,865NA] [82,865P] [82,865PA] [82,865PB] [82,865PC] [82,865PD] [82,865Q] [82,865QA] [82,865R]

185S

185T 185U 185V

Validity of things done under a debt agreement that was terminated ….

[82,865S]

DIVISION 6 — VOIDING A DEBT AGREEMENT Applying for an order declaring a debt agreement void …. [82,865T] Making an order declaring a debt agreement void …. [82,865U] Validity of things done under a debt agreement that was declared void …. [82,865V]

DIVISION 7 — GENERAL PROVISIONS RELATING TO DEBT AGREEMENTS 185W Court directions to the Official Receiver …. [82,865W] 185X No stamp duty payable on a debt agreement …. [82,865X] 185XA Secured creditors …. [82,865XA] 185Y Money received by administrator to be held on trust …. [82,865Y] 185Z Remuneration of administrator …. [82,865Z] 185ZA Notification of death of administrator …. [82,865ZA] 185ZB Official Trustee to replace an administrator who dies etc …. [82,865ZB] 185ZC Official Receiver may appoint a new administrator …. [82,865ZC] 185ZCA Court may order administrator to make good loss caused by breach of duty …. [82,865ZCA] 185ZCB Control of administrators by the Court …. [82,865ZCB] 185ZD Remuneration of administrator …. [82,865ZD] DIVISION 8 — REGISTRATION OF DEBT AGREEMENT ADMINISTRATORS ETC

186A

186B 186C 186D 186E 186F

Subdivision A — Introduction Basic eligibility test ….

[82,885A]

Subdivision B — Registration of debt agreement administrators Application for registration as a debt agreement administrator …. [82,885B] Inspector-General must approve or refuse to approve registration application …. [82,885C] Registration as a debt agreement administrator …. [82,885D] Duration of registration as a debt agreement administrator …. [82,885E] Conditions of registration — general …. [82,885F] [page 17]

186G 186H

Condition of registration — companies …. Application to change or remove registration conditions ….

[82,885G] [82,885H]

Subdivision C — Surrender and cancellation of registration as a debt agreement administrator 186J Surrender of registration as a debt agreement administrator …. [82,885J] 186K Cancellation of an individual’s registration as a debt agreement administrator …. [82,885K] 186L Cancellation of a company’s registration as a debt agreement administrator …. [82,885L] 186LA Inspector-General may obtain information about debt agreement administration trust accounts …. [82,885LA] 186LB Account-freezing notices — debt agreement

186LC 186LD 186LE

administration trust accounts …. Power of court to set aside account-freezing notices …. Judicial enforcement of account-freezing notices …. Protection of bank ….

[82,885LB] [82,885LC] [82,885LD] [82,885LE]

Subdivision D — Ineligibility of a person to act as a debt agreement administrator 186M Inspector-General may declare a person ineligible to act as an administrator …. [82,885M]

186N 186P 186Q

Subdivision E — Miscellaneous Return of certificate of registration …. Cessation of registration as a debt agreement administrator — no refund of fees …. Guidelines relating to Inspector-General’s powers ….

[82,885N] [82,885P] [82,885Q]

PART X — PERSONAL INSOLVENCY AGREEMENTS

187 187A

DIVISION 1 — INTERPRETATION Interpretation …. Application of Part to joint debtors ….

[83,020] [83,025]

DIVISION 2 — MEETING OF CREDITORS AND CONTROL OF DEBTOR’S PROPERTY 188 Debtor may authorise trustee or solicitor to be controlling trustee …. [83,075] 188A Personal insolvency agreement …. [83,077A] 188B Inspection of statement of debtor’s affairs …. [83,077B] 189 Control of property of a debtor who has given authority under section 188 …. [83,080]

189AAA

189AA 189AB 189AC 189A

Stay of proceedings relating to creditor’s petition until meeting of debtor’s creditors …. Court orders with effect during period of control of debtor’s property …. Charge over debtor’s property that is subject to control …. Right of indemnity for controlling trustee …. Report and declaration by controlling trustee ….

[83,080AAA] [83,082] [83,083] [83,083AC] [83,085] [page 18]

189B 190 190A 191 192 193 194 194A 195 196 197 198

Controlling trustee to prepare statement about possible resolutions …. Duties and powers of controlling trustee …. Additional duties of controlling trustee …. Payments to protect property etc …. Changing the controlling trustee …. Remuneration of controlling trustee [Repealed] …. Time for calling meeting …. Statement of affairs and declarations of relationships to be tabled at meeting …. Debtor to attend meeting …. Procedure for calling and holding meeting …. Adjournments (before 16/12/96) [Repealed] …. Entitlement to vote at meeting (before

[83,090] [83,095] [83,095A] [83,100] [83,105] [83,110] [83,115] [83,115A] [83,120] [83,122] [83,130]

199 200 201 202 203 204 205 205A

206

207 208 209

210 211 212

16/12/96) [Repealed] …. Restriction on voting by proxy (before 16/12/96) [Repealed] …. Manner of voting (before 16/12/96) [Repealed] …. Admission and rejection of claim to vote (before 16/12/96) [Repealed] …. Quorum (before 16/12/96) [Repealed] …. Minutes of meeting (before 16/12/96) [Repealed] …. Resolution for personal insolvency agreement …. Duties of sheriff after receiving notice of signing of authority under s 188 etc …. Duties of sheriff after receiving notice of execution of personal insolvency agreement etc …. Court may adjourn hearing of petition where creditors have passed resolution for personal insolvency agreement …. Surrender of security etc where secured creditor has voted …. Termination of control of debtor’s property by the Court …. Acts of controlling trustee to bind trustee of subsequent personal insolvency agreement or bankruptcy …. Other provisions about controlling trustee …. Other provisions about debtor …. Court may order controlling trustee to make good loss caused by breach of duty [Repealed] ….

[83,135] [83,140] [83,145] [83,150] [83,155] [83,160] [83,165] [83,170]

[83,175]

[83,180] [83,185] [83,190]

[83,195] [83,200] [83,205]

[83,210]

212A

Appeal to the Court against controlling trustee’s decision etc [Repealed] ….

[83,215]

212B

Control of controlling trustee by the Court [Repealed] ….

[83,220]

DIVISION 2A — EXAMINATION OF CONTROLLING TRUSTEES AND OTHER PERSONS [Repealed] [page 19]

213

214 215 215A 215B 216 217 218 219 220

DIVISION 3 — GENERAL PROVISIONS Arrangements by debtor with creditors otherwise than in accordance with this Part etc to be void [Repealed] …. Form etc of deeds [Repealed] …. Eligibility to be trustee of personal insolvency agreement …. Nomination or appointment of trustee of personal insolvency agreement …. Duties of chairman [Repealed] …. Execution of personal insolvency agreements …. Failure of trustee to execute personal insolvency agreement …. Notice of execution of personal insolvency agreement …. Trustee may sue, be sued etc by official name …. Filling of vacancy in office of trustee after execution of personal insolvency

[83,335] [83,340] [83,345] [83,350] [83,355] [83,360] [83,365] [83,370] [83,375]

221

221A 222 222A 222B 222C 222D

223 223A 224 224A

225 226 227

229

agreement etc …. Sequestration order where debtor fails to attend meeting, execute personal insolvency agreement etc …. Variation of personal insolvency agreement …. Court may set aside personal insolvency agreement …. Termination of personal insolvency agreement by trustee …. Termination of personal insolvency agreement by creditors …. Court may terminate personal insolvency agreement …. Termination of personal insolvency agreement by occurrence of terminating event …. Calling of meetings after the first meeting …. Rules in relation to meetings …. Validity of acts if personal insolvency agreement set aside or terminated …. Notice that a personal insolvency agreement has been set aside, varied or terminated …. Evidence of personal insolvency agreement, resolution etc …. Creditor may inspect personal insolvency agreement etc …. Stamp duty not payable on personal insolvency agreements etc entered into under this Part …. Personal insolvency agreement to bind all

[83,380]

[83,385] [83,385A] [83,390] [83,390A] [83,390B] [83,390C]

[83,390D] [83,395] [83,400] [83,405]

[83,410] [83,415] [83,420]

[83,425]

creditors …. Release of provable debts ….

230 231 231A 232

Application of general provisions of Act to personal insolvency agreements …. Right of debtor to remaining property …. Certificate relating to discharge of obligations ….

[83,480] [83,485] [83,490] [83,493] [83,495]

DIVISION 4 — SPECIAL PROVISIONS APPLICABLE TO DEEDS OF ASSIGNMENT [Repealed] DIVISION 5 — SPECIAL PROVISIONS APPLICABLE TO DEEDS OF ARRANGEMENTS [Repealed] [page 20]

DIVISION 6 — SPECIAL PROVISIONS APPLICABLE TO COMPOSITIONS [Repealed]

244 245 246 247

PART XI — ADMINISTRATION OF ESTATES OF DECEASED PERSONS IN BANKRUPTCY Administration of estates under this Part upon petition by creditor …. [83,750] Debtor dying after presentation of creditor’s petition …. [83,755] Statement of deceased debtor’s affairs etc by legal personal representative …. [83,760] Petition for administration under this Part by person administering deceased person’s

247A 248 248A 249 249A 250 251

252 252A 252B 252C 253

253A 253B 253C 253D 253E 253F

estate …. Commencement of administration under Part …. Application of Act in relation to administrations under this Part …. Consolidation of proceedings …. Vesting of property on making of order …. Charge over property owned in joint tenancy …. Effect of order under Part where deceased person was bankrupt …. Real property devised by will that vests directly in devisee to form part of estate in certain cases …. Liability of legal personal representative …. Annulment on payment of debts …. Annulment by Court …. Effect of annulment …. Application of surplus [Repealed] …. PART XIA — FARMERS’ DEBTS ASSISTANCE Interpretation …. Law of State or Territory may be proclaimed …. Notice about stay under proclaimed law …. Registrar to notify relevant authority of pending proceedings [Repealed] …. Relevant authority may apply for stay of proceedings under certain petitions …. Relevant authority may be heard on application relating to debtor’s petition ….

[83,765] [83,770] [83,775] [83,780] [83,785] [83,790] [83,795]

[83,800] [83,805] [83,810] [83,812] [83,814] [83,815]

[83,915] [83,920] [83,925] [83,930] [83,935] [83,940]

254

255 256

PART XII — UNCLAIMED DIVIDENDS OR MONEYS Payment of unclaimed moneys to the Commonwealth …. [84,040] PART XIII — EVIDENCE Record of proceedings or evidence …. Evidence of matters stated in notices published in Gazette ….

[84,140] [84,145] [page 21]

257 258 259 260 261 262

263 263A 263B 263C 264 264A

Evidence of proceedings at meetings of creditors or committee of inspection …. Presumption about due convening of meetings etc …. Evidence of bankruptcy documents [Repealed] …. Evidence as to bankruptcy and appointment of trustee etc [Repealed] …. Evidence of appointment of trustee [Repealed] …. Swearing of affidavits …. PART XIV — OFFENCES Concealment etc of property etc …. False affidavits …. False proof of debts [Repealed] …. False claims about a creditor’s entitlement to vote …. Forgery of process etc [Repealed] …. Failure of person to attend before the Court etc ….

[84,150] [84,155] [84,160] [84,165] [84,170] [84,175]

[84,275] [84,280] [84,285] [84,290] [84,295] [84,300]

264B 264C 264D 264E 265 265A 266

267 267A 267B 267C 267D 267E 267F 267G 268 268A 269

Arrest of person failing to attend before the Court etc …. Refusal to be sworn or give evidence etc …. Prevarication or evasion in the course of examination …. Offences in relation to Registrar or magistrate conducting an examination …. Failure of bankrupt or debtor to disclose property etc …. Offences relating to exercise of powers under section 77A or 130 …. Disposing or charging of property by person who becomes, or has become, a bankrupt …. False declaration by debtor or bankrupt …. Bankrupt not to give false misleading statement [Repealed] …. Failure of person to provide information …. Person not to provide false or misleading information [Repealed] …. Failure of person to attend …. Arrest of person failing to attend before Official Receiver or authorised officer …. Refusal to be sworn or give evidence etc …. Prevarication or evasion in the course of giving evidence …. Offences in relation to personal insolvency agreements …. False or misleading declaration under section 215A [Repealed] …. Bankrupt or debtor who is a party to a debt agreement obtaining credit etc without disclosing bankruptcy or debt agreement

[84,305] [84,310] [84,315] [84,320] [84,325] [84,330]

[84,335] [84,337] [84,338] [84,339] [84,340] [84,341] [84,342] [84,343] [84,344] [84,345] [84,350]

270 271 272

…. Failure to keep proper books of account …. Gambling or hazardous speculations …. Leaving Australia with intent to defeat creditors etc ….

[84,355] [84,360] [84,365] [84,370] [page 22]

273 274 275 276 277 277A 277B

Trial of offences …. Time within which summary proceedings to be brought [Repealed] …. Criminal liability not affected by discharge etc …. Trustee acting under a personal insolvency agreement that has been set aside …. Punishment of contempt of court …. Keeping of books in respect of period of bankruptcy …. Infringement notices for offences ….

[84,375] [84,380] [84,385] [84,390] [84,395] [84,400] [84,403]

PART XV — PROVISIONS RELATING TO THE BANKRUPTCY (ESTATE CHARGES) ACT 1997 278 Interpretation …. [84,500] 279 Administration of, and powers and functions in relation to, the Charges Acts …. [84,505] 280 Deferred payment of interest charge or realisations charge …. [84,510] 281 Late payment penalty — interest charge and realisations charge …. [84,515] 282 Extension of time for payment — interest charge and realisations charge …. [84,520]

283 284 285 286

301 302 302A

302AB 302B 303 304

304A 305 306 306A 306B 306C 307

Remission of interest charge, realisations charge and late payment penalty …. Recovery of interest charge, realisations charge and late payment penalty …. Payments by cheque or payment order …. Regulations may deal with other matters …. PART XVI — MISCELLANEOUS Certain provisions in contracts etc to be void …. Certain provisions in bills of sale etc to be void …. Certain provisions in governing rules of superannuation funds and approved deposit funds to be void …. Certain provisions in RSA’s terms and conditions to be void …. Certain provisions in trust deeds void …. Applications to Court …. Parts of dollar to be disregarded in determining majority in value of creditors etc …. Indexation …. Payment of expenses by Commonwealth …. Formal defect not to invalidate proceedings …. Protection of Registrars, magistrates etc in relation to examinations …. Protection in respect of reports …. Protection in respect of trustee’s reports [Repealed] …. Proceedings in firm name ….

[84,525]

[84,530] [84,535] [84,540]

[84,705] [84,710]

[84,713] [84,713A] [84,714] [84,715]

[84,720] [84,723] [84,725] [84,730] [84,735] [84,740] [84,745] [84,750]

[page 23] 308 309 310

311 312 313 314 315 316

Representation of corporation etc …. Service of notices etc …. Publication of notice of making of sequestration order, discharge etc [Repealed] …. Stamp duty not payable on trustee’s cheques or receipts …. Return or destruction of old accounts and records …. Audit of accounts and records of the Official Trustee and the Official Receivers …. Annual report [Repealed] …. Regulations …. Legislative instruments determining fees …. SCHEDULE 1 — ACTS REPEALED …. SCHEDULE 2 [Repealed] …. SCHEDULE 3 [Repealed] …. SCHEDULE 4 [Repealed] ….

[84,755] [84,760]

[84,765] [84,770] [84,775] [84,780] [84,785] [84,790] [84,795] [84,890] [84,895] [84,920] [84,940]

[page 24]

Bankruptcy Act 1966 TABLE OF AMENDMENTS The Bankruptcy Act 1966 was assented to on 1 June 1966 and commenced on 4 March 1968. Since that date the Act has been amended by: Amending Legislation Bankruptcy Act 1968 No 121 Judges’ Remuneration Act 1969 No 40 Bankruptcy Act 1970 No 122 Statute Law Revision Act 1973 No 216 Postal and Telecommunications (Transitional Provisions) Act 1975 No 56 Acts Citation Act 1976 No 37 Administrative Changes (Consequential Provisions) Act 1976 No 91 Federal Court of Australia Act 1976 No 156 Bankruptcy Amendment Act 1976 No 161 Remuneration and

Date of Assent Date of Commencement 3 December 1968 31 December 1968 14 June 1969 14 June 1969 11 November 1970 19 December 1973 12 June 1975

11 November 1970

26 May 1976 20 September 1976

1 July 1976 20 September 1976

31 December 1973 1 July 1975

9 December 1976 9 December 1976 9 December 1976 1 February 1977 28 October 1977

1 June 1977

Allowances Amendment Act 1977 No 111 Australian Federal Police 28 November (Consequential 1979 Amendments) Act 1979 No 155 1Bankruptcy Amendment Act 8 April 1980 1980 No 12

Australian Federal Police (Consequential Amendments) Act 1980 No 70 Commonwealth Functions (Statutes Review) Act 1981 No 74

28 May 1980

18 June 1981

19 October 1979 (retrospective commencement) ss 1, 2, 3(1), 4–6, 8, 13– 14, 18–20, 23–25, 29– 30, 36–41, 45–6, 47(1), (3), 48, 52–54, 56, 63, 66–8, 71, 73(1), 79, 89, 91, 93– 5, 97, 99, 105, 115, 117, 120–3, 126, 128– 9, 131, 133, 135, 143, 149–50, 153, 155–62, 165–70, 174, 176: 8 April 1980; remainder: 1 February 1981 (Gaz G1 of 6 January 1981) 28 May 1980

Pt V (amending Bankruptcy Act): 2 November 1981 [page 25]

Statute Law (Miscellaneous Amendments) Act 1981 No 176

2 December 1982 Pt VIII (amending Bankruptcy Act): 1 February 1982; Pt X (amending

Income Tax (Payments for Work) (Consequential Amendments) Act 1983 No 18 Australian Government Solicitor (Consequential Amendments) Act 1984 No 10 Public Service Reform Act 1984 No 63 Statute Law (Miscellaneous Provisions) Act (No 2) 1985 No 193

14 June 1983

Commonwealth Functions (Statute Review) Act 1981): 2 November 1981 Pt II (amending Bankruptcy Act): 14 June 1983

10 April 1984

1 July 1984

25 June 1984

1 July 1984

16 December 1985

s 7 and Sch 1 (in its application to s 41 Bankruptcy Act): 7 April 1986; remainder: 16 December 1985 19 May 1986

Bankruptcy Amendment Act 7 May 1985 1985 No 21 Taxation Laws Amendment 18 December Act (No 4) 1986 No 154 1986 Statute Law (Miscellaneous 18 December Provisions) Act (No 2) 1986 1986 No 168 Proceeds of Crime 5 June 1987 (Miscellaneous Amendments) Act 1987 No 73 2Bankruptcy Amendment Act 16 December 1987 No 119 1987

18 December 1986 18 December 1986 (except insertion of s 31A Bankruptcy Act: 2 March 1987) 5 June 1987

ss 1, 2: 16 December 1987; ss 14, 42–4, 51: 1 March 1988 (Gaz S49 of 23 February

1988); ss 4(1)(f), 9–11, 19, 24–9, 31, 32, 34–7, 46–7, 53–8, 97–8, 101, 103, 105: 3 January 1989 (Gaz S392 of 16 December 1988); ss 6, 16–18, 20–2, 30, 38, 41, 59–60, 62–5, 68– 79, 82, 86–7, 90, 99– 100: 31 July 1989 (Gaz S245 of 12 July 1989); remainder: 13 January 1988 1 July 1988

Family Court of Australia 5 April 1988 (Additional Jurisdiction and Exercise of Powers) Act 1988 No 8 Statute Law (Miscellaneous 3 June 1988 3 June 1988 Provisions) Act 1988 No 38 Statutory Instruments 2 December 1988 2 December 1988 (Tabling and Disallowance) Legislation Amendment Act 1988 No 99

[page 26] Banking Legislation Amendment Act 1989 No 129 Law and Justice Legislation Amendment Act 1990 No 115

7 November 1989 28 December 1989

21 December 1990

ss 3, 5–6, 8–9, 16–17, 20–3, 28, 30, 32–3, 38–9: 4 February 1991

3Bankruptcy

Amendment Act 17 January 1992

1991 No 9

Social Security Legislation Amendment Act 1992 No 81 Law and Justice Legislation Amendment Act (No 4) 1992 No 143

30 June 1992

(Gaz GN3 of 23 January 1991); ss 4, 7, 10–15, 18–19, 24–7, 29, 31, 34–7: 21 June 1991; remainder 21 December 1990 Pts 1 (ss 1, 2), 3 (ss 51– 8): 17 January 1992; Pt 2 (ss 3–50): 1 July 1992 Pt 1: 30 June 1992: s 117 and Sch 2: 1 July 1992

7 December 1992 7 December 1992 (except amendment to s 19 Bankruptcy Act: 4 January 1993) Corporate Law Reform Act 24 December ss 1, 2: 24 December 1992 No 210 1992 1992; s 20: 1 February 1993; s 125 and Sch 2: 23 June 1993 Bankruptcy Amendment Act 31 May 1993 31 May 1993 1993 No 11 Insolvency (Tax Priorities) 16 June 1993 ss 1, 2: 16 June 1993; ss Legislation Amendment 29, 30: 1 June 1993 Act 1993 No 32 4Superannuation Industry 30 November ss 1, 2: 1 December (Supervision) 1993 1993; Pt 3: 1 July 1994 Consequential Amendments Act 1993 No 82 5Law and Justice Legislation 23 June 1994 ss 1, 2, Pt 10: 23 June Amendment Act 1994 No 1994 84 (as amended by Primary Industries and Energy

Legislation Amendment Act 1994 No 94) Student Assistance (Youth Training Allowance — Transitional Provisions and Consequential Amendments) Act 1994 No 184 Taxation Laws Amendment Act (No 3) 1995 No 170 Bankruptcy Legislation Amendment Act 1996 No 44 6Bankruptcy Amendment Act 1997 No 11 Retirement Savings Account (Consequential Amendments) Act 1997 No 62 Audit (Transitional and Miscellaneous) Amendment Act 1997 No 152

23 December 1994

1 January 1995

16 December 1995 25 October 1996

16 December 1995

13 March 1997

28 May 1997

Sch 2: 25 October 1996; Schs 1, 3: 14 April 1997 2 June 1997

24 October 1997

1 January 1998

16 December 1996

[page 27] Farm Household Support Amendment (Restart and Exceptional Circumstances) Act 1997 No 179 Social Security Legislation Amendment (Youth

25 November 1997

25 November 1997

17 June 1998

1 July 1998

Allowance Consequential and Related Measures) Act 1998 No 45 Financial Sector Reform (Consequential Amendments) Act 1998 No 48 Social Security and Veterans’ Affairs Legislation Amendment (Budget and Other Measures) Act 1998 No 93 Superannuation Legislation Amendment Act 1999 No 38 Financial Sector Reform (Amendments and Transitional Provisions) Act (No 1) 1999 No 44 A New Tax System (Family Assistance) (Consequential and Related Measures) Act (No 2) 1999 No 83 Public Employment (Consequential and Transitional) Amendment Act 1999 No 146 A New Tax System (Tax Administration) Act 1999 No 179 Federal Magistrates (Consequential Amendments) Act 1999 No 194

29 June 1998

1 July 1998

15 July 1998

1 April 1998

31 May 1999

31 May 1999

17 June 1999

1 July 1999

8 July 1999

s 3: 8 July 1999; Sch 11[3], [4]: 1 July 2000

11 November 1999

Sch 1[280]: 5 December 1999

22 December 1999

s 3: 22 December 1999; Sch 11 (except [44]): 1 July 2000 23 December 1999

23 December 1999

Dairy Industry Adjustment 3 April 2000 Act 2000 No 22 Criminal Code Amendment 24 November (Theft, Fraud, Bribery and 2000 Related Offences) Act 2000 No 137

3 April 2000

ss 1–3 and Sch 1 [1], [4], [6]–[7], [9]–[11], [32]: 24 November 2000; remainder: 24 May 2001 Family Law Amendment Act 29 November Sch 3[31A], [117]: 29 2000 No 143 2000 November 2000; Sch 3[41]: 1 July 1988 (retrospective commencement); remainder: 27 December 2000 Farm Household Support 7 December 2000 ss 1 and 2: 7 December Amendment Act 2000 No 2000; remainder: 18 144 December 2000 Law and Justice Legislation 6 April 2001 Sch 1: 4 May 2001; Schs Amendment (Application 21, 51: 15 December of Criminal Code) Act 2001; Sch 40[10]: 21 2001 No 24 December 2001; remainder: 24 May 2001 [page 28] Corporations (Repeals, 28 June 2001 Consequentials and Transitionals) Act 2001 No 55 Family Law Legislation 28 June 2001 Amendment (Superannuation) Act 2001

s 3 and Sch 3 (except [65], [67], [146], [191], [296]–[302], [438], [495], [574]– [575]): 15 July 2001 28 December 2002

No 61 Higher Education Funding 18 July 2001 Amendment Act 2001 No 86 Financial Services Reform 27 September (Consequential Provisions) 2001 Act 2001 No 123 Taxation Laws Amendment 29 June 2002 (Superannuation) Act (No 2) 2002 No 51

Proceeds of Crime (Consequential Amendments and Transitional Provisions) Act 2002 No 86

11 October 2002

Bankruptcy Legislation Amendment Act 2002 No 131 Higher Education Support (Transitional Provisions and Consequential Amendments) Act 2003 No 150 Law and Justice Legislation Amendment Act 2004 No 62 7Bankruptcy Legislation Amendment Act 2004 No 80 Financial Framework

18 December 2002

ss 1–3, Sch 1[1]–[10], Schs 2–4: 18 July 2001 Sch 1[216]: 11 March 2002 Sch 6 [1], [2]: 5 May 2003 (on commencement of Sch 1[77] of Bankruptcy Legislation Amendment Act 2002 No 131) 1 January 2003 (on commencement of ss 3–338 of Proceeds of Crime Act 2002: Gaz GN 44 of 6 November 2002 p 2948) 5 May 2003 (Gaz S138 of 2 May 2003)

19 December 2003

ss 1–3: 19 December 2003: Sch 2[95]–[103]: 1 January 2004

26 May 2004

Sch 1[11]–[12]: 27 May 2004

23 June 2004

Schs 1–5: 1 December 2004; Sch 6: 23 June 2004 22 February 2005 Sch 1[1]–[440]: 22

Legislation Amendment Act 2005 No 8 Bankruptcy and Family Law Legislation Amendment Act 2005 No 20

February 2005 18 March 2005

Family Law Amendment Act 2005 No 98 Workplace Relations Amendment (Work Choices) (Consequential Amendments) Regulations 2006 (No 1) SLI No 50 Bankruptcy Legislation Amendment (Antiavoidance) Act 2006 No 33 Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006 No 101 8Bankruptcy Legislation Amendment (Fees and Charges) Act 2006 No 34

6 July 2005

Sch 1: 18 September 2005; Sch 2: 18 March 2005; Schs 3–5: 15 April 2005 18 September 2005

17 March 2006

27 March 2006

3 May 2006

ss 1–3: 3 May 2006: Sch 1: 31 May 2006

14 September 2006

Sch 2[25], [26] and Sch 6[1], [6]–[11]: 14 Sept 2006

3 May 2006

Statute Law Revision Act 2007 No 8

15 March 2007

ss 1–3, Sch 4: 3 May 2006; Sch 1 Pts 1 and 2, Schs 2 and 3: 1 July 2006 Sch 4: 15 March 2007

[page 29] Superannuation Legislation Amendment (Simplification) Act 2007 No 15

15 March 2007

Sch 3[1]–[3]: 1 July 2007

Bankruptcy Legislation Amendment (Debt Agreements) Act 2007 No 44 Bankruptcy Legislation Amendment (Superannuation Contributions) Act 2007 No 57 Statute Law Revision Act 2008 No 73 Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 No 115 Same-Sex Relationships (Equal Treatment in Commonwealth Laws— General Law Reform) Act 2008 No 144 Fair Work (State Referral and Consequential and Other Amendments) Act 2009 No 54 Federal Court of Australia Amendment (Criminal Jurisdiction) Act 2009 No 106 Personal Property Securities (Consequential Amendments) Act 2009 No 131 Crimes Legislation Amendment (Serious and Organised Crime) Act

10 April 2007

ss 1–3: 10 April 2007; Sch 1: 11 April 2007; Sch 2: 1 July 2007

15 April 2007

Sch 1 Pt 1: 28 July 2006; Sch 2[2]–[4]: 16 April 2007; Sch 2[8]: 31 May 2006; Sch 2[10]: 1 July 1994 Sch 3: 3 July 2008

3 July 2008 21 November 2008

1 March 2009

9 December 2008 Sch 2[11]–[23], [25], [27]–[33]: 10 December 2008

25 June 2009

1 July 2009

6 November 2009 4 December 2009

14 December 2009

30 January 2012

19 February 2010 19 February 2010

2010 No 3 Bankruptcy Legislation Amendment Act 2010 No 106

Statute Law Revision Act 2011 No 5 Acts Interpretation Amendment Act 2011 No 46 Crimes Legislation Amendment Act (No 2) 2011 No 174 Family Law Legislation Amendment (Family Violence and Other Measures) 2011 No 189 Federal Circuit Court of Australia (Consequential Amendments) Act 2013 No 13 Statute Law Revision Act (No 1) 2014 No 31 Trade Support Loans (Consequential Amendments) Act 2014 No 82

14 July 2010

22 March 2011 27 June 2011

ss 1–3: 14 July 2010; Sch 3: 15 July 2010; Sch 4 Pt 1: 11 August 2010; Schs 1, 2 and 4 Pt 2: 1 December 2010 Sch 5[44] and Sch 7[30]: 19 April 2011 27 December 2011

6 December 2011 s 3 and Sch 2[142]– [150]: 1 January 2012 7 December 2011 4 January 2012

14 March 2013

Sch 1 items 54–57; Sch 2 item 1: 12 April 2013

27 May 2014

Sch 4 items 9, 10, 60: 24 June 2014 s 2(2): 18 July 2014

17 July 2014

[page 30] Public Governance, Performance and

30 June 2014

Sch 6 item 31, Sch 8 Items 10–12: 1 July

Accountability (Consequential and Transitional Provisions) Act 2014 No 62

See [79,960] for transitional provisions to this Act. See [79,955] for notes on the application of amendments. 3 See [79,950] for transitional provisions of this Act. 4 See [79,945] for notes on the application of amendments. 5 See [79,947] for notes on the application of amendments. 6 See [79,943] for transitional provisions of this Act. 7 See [79,941] for application and transitional provisions of this Act. 8 See [79,937] for application and transitional provisions of this Act. 1 2

2014 (s 2(6))

[page 31]

APPLICATION AND TRANSITIONAL PROVISIONS Notes to the Bankruptcy Legislation Amendment (Fees and Charges) Act 2006 No 34

[79,937] Application of amendments Schedule 1 of the Bankruptcy Legislation Amendment (Fees and Charges) Act 2006 No 34 provides as follows: Application of amendment of paragraph 154A(3)(b) 3 The amendment of paragraph 154A(3)(b) of the Bankruptcy Act 1966 made by this Part applies to applications made on or after 1 July 2006 under section 154A of the Bankruptcy Act 1966. Application of amendment of paragraph 155C(1)(b) 5 The amendment of paragraph 155C(1)(b) of the Bankruptcy Act 1966 made by this Part applies to registrations resulting from applications made on or after 1 July 2006 under section 154A of the Bankruptcy Act 1966. Application of amendments of section 155D 9 The amendments of section 155D of the Bankruptcy Act 1966 made by this Part apply to extensions under that section resulting from applications made on or after 1 July 2006 as described in that section. Application of amendments of section 163 13 The amendments of section 163 of the Bankruptcy Act 1966 made by this Part apply to remuneration of the Official Trustee for work arising from any of the following events happening on or after 1 July 2006: (a) the making of a direction under section 50 of that Act; (b) a person becoming bankrupt; (c) lodgment of a proposal for a composition or scheme of arrangement under section 73 of that Act; (d) the giving of a proposal for a debt agreement under section 185C of that Act;

(e) signature of an authority under section 188 of that Act; (f) the making of an order for the Official Trustee to act as the trustee of an estate. Application of amendment of section 163A 15 The amendment of section 163A of the Bankruptcy Act 1966 made by this Part applies to the fee for the exercise of a power at the request of a trustee made on or after 1 July 2006. Saving regulations providing for charging and payment of fees 18 (1) This item explains the effect of the amendment of paragraph 315(2)(j) of the Bankruptcy Act 1966 made by this Part on regulations that: (a) were in force just before 1 July 2006; and (b) provided for the charging or payment of fees in relation to things described in that paragraph.

[page 32] (2)* The amendment affects the regulations only so far as they provided for the setting of amounts of fees other than fees mentioned in paragraph 81(17)(b). (3) To avoid doubt, the amendment does not affect the regulations so far as they provide for other aspects of the charging and payment of fees.

Transitional provisions Schedule 3 Part 2 item 4 provides as follows: Transitional provision 4 (1) Regulations that were in force for the purposes of paragraph 155E(3)(a) of the Bankruptcy Act 1966 just before the commencement of the amendment of section 155E of that Act made by this Part have effect as if they had been made for the purposes of subsection 155E(3) of that Act as amended by this Part. (2) This item does not prevent the amendment or repeal of those regulations by regulations under the Bankruptcy Act 1966.

*Note: The amendment causes the regulations to cease setting the amounts of fees (other than fees mentioned in paragraph 81(17)(b)) on 1 July 2006.

[page 33]

Notes to the Bankruptcy Legislation Amendment (Anti-avoidance) Act 2006 No 33

[79,939] Section 30 of the Bankruptcy Legislation Amendment (Anti-avoidance) Act 2006 No 33 provides as follows: Application of amendments 30 (1) The amendment made by item 2 applies in relation to an attendance under section 77C of the Bankruptcy Act 1966 that occurs on or after the commencement of this item. (2) The amendment made by item 3 applies in relation to an examination under section 81 of the Bankruptcy Act 1966 that occurs on or after the commencement of this item. (3) The amendments made by items 6 to 15 apply to a transfer of property made on or after the commencement of this item. (4) The amendments made by items 1, 4 and 5 and 16 to 29 apply in relation to an examinable period that commences on or after the commencement of this item.

[page 34]

Notes to the Bankruptcy Legislation Amendment Act 2004 No 80

[79,941] Application and transitional provisions Part 3 of Sch 1 of the Bankruptcy Legislation Amendment Act 2004 No 80 contains the following application and transitional provisions:

“PART 3 — APPLICATION AND TRANSITIONAL PROVISIONS “Transitional — pre-commencement deeds and compositions 212 (1) For the purposes of this item, if a deed of assignment or a deed of arrangement was executed by a debtor and a trustee under Part X of the Bankruptcy Act 1966 before the commencement of this item, the deed is a pre-commencement deed. (2) For the purposes of this item, if a composition was accepted before the commencement of this item by a special resolution of a meeting of creditors under section 204 of the Bankruptcy Act 1966, the composition is a pre-commencement composition. (3) Despite the repeals and amendments made by Parts 1 and 2 of this Schedule: (a) the Bankruptcy Act 1966 and regulations under that Act; and (b) the Acts amended by Part 2 of this Schedule; continue to apply, in relation to: (c) a pre-commencement deed; and (d) a pre-commencement composition; and (e) any matter connected with, or arising out of: (i) a pre-commencement deed; or (ii) a pre-commencement composition; as if those repeals had not happened and those amendments had not been made. “Transitional — pre-commencement authorities 213 (1) For the purposes of this item, if: (a) an authority given by a debtor under section 188 of the Bankruptcy Act 1966 became effective before the commencement of this item; and (b) as at the commencement of this item, none of the following had happened: (i) the execution by the debtor and the trustee of a deed of assignment under Part X of the Bankruptcy Act 1966; (ii) the execution by the debtor and the trustee of a deed of arrangement under Part X of the Bankruptcy Act 1966; (iii) the acceptance of a composition by a special resolution of a meeting of the debtor’s creditors under section 204 of the Bankruptcy Act 1966;

the authority is a pre-commencement authority. (2) Despite the repeals and amendments made by Parts 1 and 2 of this Schedule: (a) the Bankruptcy Act 1966 and regulations under that Act; and (b) the Acts amended by Part 2 of this Schedule; continue to apply, in relation to: (c) a pre-commencement authority; and (d) the control of the debtor’s property following a pre-commencement authority becoming effective; and (e) a meeting of the debtor’s creditors called under a pre-commencement authority; and (f) whichever of the following is applicable: (i) a deed of assignment executed after the commencement of this item by the debtor and the trustee under Part X of the Bankruptcy Act 1966 in accordance with a special resolution of such a meeting;

[page 35] (ii) a deed of arrangement executed after the commencement of this item by the debtor and the trustee under Part X of the Bankruptcy Act 1966 in accordance with a special resolution of such a meeting; (iii) a composition accepted after the commencement of this item by a special resolution of such a meeting; and (g) any other matter connected with, or arising out of: (i) a pre-commencement authority; or (ii) a deed of assignment mentioned in subparagraph (f)(i); or (iii) a deed of arrangement mentioned in subparagraph (f)(ii); or (iv) a composition mentioned in subparagraph (f)(iii); as if those repeals had not happened and those amendments had not been made. “Application — statements of affairs 214 (1) The amendment made by item 41 of this Schedule, in so far as it relates to subsection 54(1) or (2) of the Bankruptcy Act 1966, applies to a statement filed after the commencement of this item. (2) The amendment made by item 41 of this Schedule, in so far as it relates to paragraph 55(2) (b), 56B(3)(a) or (b), 56F(1)(a) or (b) or 57(2)(a) or (b) of the Bankruptcy Act 1966, applies in relation to a statement that accompanies a petition presented after the commencement of this item. (3) The amendment made by item 4 of this Schedule, in so far as it relates to section 185D of the Bankruptcy Act 1966, applies to a statement given after the commencement of this item. “Transitional — regulations 215 (1) The regulations may make provision for matters of a transitional nature arising from the amendments made by Parts 1 and 2 of this Schedule. (2) The Governor-General may make regulations for the purposes of subitem (1).”

Schedule 2 item 12 of the same Act provides as follows:

“Transitional—annulments 12 (1) For the purposes of this item, if a composition or scheme of arrangement under Division 6 of Part IV of the Bankruptcy Act 1966 was annulled before the commencement of this item, the annulment is a pre-commencement annulment. (2) For the purposes of this item, if: (a) an application is made before the commencement of this item under subsection 75(4) of the Bankruptcy Act 1966 for the annulment of a composition or scheme of arrangement; and (b) as at the commencement of this item, proceedings in relation to that application have not been finally determined; the application is a pre-commencement annulment application. (3) Despite the repeals and amendments made by items 1, 2, 3, 7, 8, 9 and 10 of this Schedule and item 41 of Schedule 1,2 the Bankruptcy Act 1966 and regulations under that Act continue to apply, in relation to: (a) a pre-commencement annulment; and

[page 36] (b) a pre-commencement annulment application; and (c) an annulment that results from a pre-commencement annulment application; as if those repeals had not happened and those amendments had not been made.”

1Editor’s

note: Schedule 1 item 4 of Act 80 of 2004 amends the Bankruptcy Act 1966 as follows:

“After paragraph 6A(2)(a) 4 Insert: (b) includes a statement identifying any creditor who is a related entity of the debtor or bankrupt; and” 2Editor’s

note: Schedule 2 items 1–3 and 7–10 of Act 80 of 2004 amend the Bankruptcy Act 1966 as

follows: “Paragraph 31(1)(da) 1 Repeal the paragraph, substitute: (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;

“Paragraph 40(1)(n) 2 Repeal the paragraph, substitute: (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. “Subsection 40(7) 3 Omit ‘annulled’, substitute ‘set aside or terminated’. … “Subsections 75(4), (5), (6), (7) and (8) 7 Repeal the subsections. “At the end of Division 6 of Part IV 8 Add: 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. “Paragraph 109(1)(c) 9 Omit ‘annulled,’. “Subsection 114(1) 10 Omit ‘annulled,’.” Schedule 1 item 41 of the same Act provides: “Subsection 114(2) 41 Repeal the subsection, substitute: (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.”

[page 37]

Notes to the Bankruptcy Amendment Act 1997 No 11

[79,943] Transitional provisions Schedule 3 of the Bankruptcy Amendment Act 1997 contains transitional provisions which are reproduced below:

“SCHEDULE 3 — TRANSITIONAL PROVISIONS RELATING TO AMENDMENT OF THE BANKRUPTCY ACT 1966 “Bank accounts and investments under sections 169, 172 and 210 1 (1) If: (a) immediately before the commencement of this Schedule, a trustee was maintaining an account under: (i) section 169 or 172 of the Bankruptcy Act 1966 as then in force; or (ii) section 210 of the Bankruptcy Act 1966 as in force immediately before the commencement of Schedule 1 to the Bankruptcy Legislation Amendment Act 1996; and (b) the account does not comply with section 169 of the Bankruptcy Act 1966 as amended by Schedule 1 to this Act; the trustee must pay the money into an account that complies with that section as so amended as soon as reasonably practicable after the commencement of this Schedule. (2) If, immediately before the commencement of this Schedule, a trustee held public securities as an investment under section 172 of the Bankruptcy Act 1966 as then in force, the trustee must, as soon as reasonably practicable after that commencement: (a) convert the securities into money; and (b) pay the money into an account that complies with section 169 of the Bankruptcy Act 1966 as amended by Schedule 1 to this Act. (3) This item does not require a trustee to close a fixed term deposit, or to convert fixed term securities into money, before the term ends. (4) In this item, a reference to section 169 or 172 of the Bankruptcy Act 1966 as in force at a particular time includes a reference to that section as applied by other provisions of that Act as then in force. “Transition to realisations charge 2 (1) The Governor-General may make regulations dealing with the transition from the fees imposed by old rule 179 to the realisations charge imposed by Part 3 of the Bankruptcy (Estate Charges) Act 1996. (2) For example, the regulations may provide for:

the continued application, with specified modifications, of old rule 179 in relation to (a) amounts received or paid by a trustee before the commencement of this Schedule, including, in particular, amounts received or paid before 1 November 1996 (the start of the first charge period); and (b) the crediting or waiver of fees paid or payable under that rule, or that rule as it continues to apply, to the extent that the fees are attributable to amounts received by a trustee on or after 1 November 1996. (3) In this item: crediting means crediting against a liability to pay realisations charge. old rules 179 and 181 means rules 179 and 181 of the Bankruptcy Rules as in force immediately before the commencement of Schedule 1 to the Bankruptcy Legislation Amendment Act 1996.”

[page 38]

Notes to the Superannuation Industry (Supervision) Consequential Amendments Act 1993 No 82

[79,945] Application of amendments Section 11 of the Superannuation Industry (Supervision) Consequential Amendments Act 1993 provides as follows: “Application of amendments 11 (1) The following amendments made by this Part apply in relation to a bankruptcy, if the date of the bankruptcy is on or after the date of commencement of this section: (a) section 6 (to the extent to which the amendment relates to section 116 of the Principal Act); (b) sections 7, 8 and 10. (2) The remaining amendments made by this Part apply in relation to the death of a person, if the death occurs on or after the date of commencement of this section.”

The amendments effected by the Superannuation Industry (Supervision) Consequential Amendments Act 1993 referred to in s 11 above were as follows: (i) s 6 — amended s 5 of the Bankruptcy Act 1966 by repealing the definition of “policy for pure endowment”; (ii) s 7 — amended s 116 of the Bankruptcy Act 1966 by substituting a new subsection for s 116(2)(d), (e), (f) and (fa); by adding “or” at the end of para (2A)(a); by omittting “or” from the end of para (2A) (b); by repealing para (2A)(c); by substituting paragraph (a) of the definition of “exempt money” in subs (2D) with a new para (a); by inserting subsections (5), (6), (7), (8) and (9); (iii) s 8 — amended s 139L of the Bankruptcy Act 1966 by omitting “a payment” from paragraph (a) of the definition of “income” and substituting “an annuity or pension paid”; by inserting “of annuity or pension” in para (c) of that definition; by inserting a definition of “pension”; (iv) s 10 — amended the Bankruptcy Act 1966 by inserting s 302A;

s 9 (referred to as “the remaining amendments”) — amended s 249 (v) of the Bankruptcy Act 1966 by substituting a new subs (6)(a)(ii), (7)(a)(ii) and (8)(a)(ii).

[page 39]

Notes to the Law and Justice Legislation Amendment Act 1994 No 84

[79,947] Application of amendments Section 116 was amended by s 90 of the Law and Justice Legislation Amendment Act 1994, assented to 23 June 1994. Section 91 of the Law and Justice Legislation Amendment Act 1994 No 84 provides as follows: “Application 91 (1) The amendments made by section 90 apply to any bankruptcy for which the date of the bankruptcy is after the day on which this Act receives the Royal Assent. (2) So far as the amendments made by section 90 relate to RAS payments, they also apply to any bankruptcy that resulted or results from a creditor’s petition or a debtor’s petition presented after 28 April 1994. For the purposes of this subsection, RAS payments means amounts described in paragraph (2)(k), (m), (ma), (mb), (mc) or (md) of the Principal Act as amended by this Act. (3) Subsection (2): (a) does not affect any distribution of a dividend on or before the day on which this Act receives the Royal Assent; and (b) does not make the trustee liable for any act or omission of the trustee that occurred on or before the day on which this Act receives the Royal Assent.”

The Law and Justice Legislation Amendment Act 1994 No 84 was subsequently amended by the Primary Industries and Energy Legislation Amendment Act 1994 No 94 with effect from 23 June 1994: s 2(5) of the latter Act. Section 11 and Sch 1 of the Primary Industries and Energy Legislation Amendment Act 1994 No 94 amended s 91 of the Law and Justice Legislation Amendment Act 1994 as follows: “Subsection 91(1): Omit ‘The amendments’, substitute ‘Subject to this section, the amendments’. “Subsection 91(2): Omit the subsection, substitute: ‘(2) So far as the amendments made by section 90 relate to RAS payments, the amendments apply in relation to: (a) RAS payments paid after 28 April 1994, regardless of the date of the bankruptcy;

and (b) RAS payments paid on or before 28 April 1994, if the bankruptcy occurred as a result of a creditor’s petition or debtor’s petition presented after 28 April 1994. For the purposes of this subsection, RAS payments means amounts described in paragraph (2)(k), (m), (ma), (mb), (mc) or (md) of the Principal Act as amended by this Act.’”

Additionally, s 12 of the Primary Industries and Energy Legislation Amendment Act 1994 provided as follows: “Application of amendments of the Law and Justice Legislation Amendment Act 12 The amendments of the Law and Justice Legislation Amendment Act 1994 made by the Schedule: (a) do not affect any distribution of a dividend on or before the day on which this Act receives the Royal Assent; and (b) do not make the trustee liable for any act or omission of the trustee that occurred on or before the day on which this Act receives the Royal Assent.”

[page 40]

Notes to the Bankruptcy Amendment Act 1991 No 9 of 1992

[79,950] Transitional provisions Part 3 of the Bankruptcy Amendment Act 1991 No 9 of 1992 contains transitional provisions which are reproduced below. Where a provision of the Bankruptcy Act 1966 has been repealed by the Bankruptcy Amendment Act 1991 and is relevant to the transitional provisions, it is inserted as an editor’s note. Cross-references to the transitional provisions have been inserted at the relevant sections of the Bankruptcy Act 1966.

“PART 3 — TRANSITIONAL “Amendments to extend to existing bankruptcies 51 (1) Subject to this section, each amendment of the Principal Act that is made by this Act, other than the amendment of section 19 of the Principal Act that is made by section 6 of this Act, and relates to bankruptcies applies according to its tenor in relation to persons who were bankrupt at the commencement of that amendment as it applies in relation to persons who become bankrupt after that commencement. (2) Section 6A 1 of the Principal Act as amended by section 4 of this Act applies only in respect of statements of affairs filed after the commencement of section 4 of this Act, and section 6A of the Principal Act continues to apply, despite its repeal, in respect of statements of affairs filed before that commencement. (3) Any rules in force for the purposes of section 6A of the Principal Act immediately before the commencement of section 4 of this Act continue in force for the purposes of: (a) section 6A of the Principal Act as it continues to apply by virtue of subsection (2) of this section; and (b) section 6B of the Principal Act as amended by this Act; but may be amended by rules made under the Principal Act as amended by this Act. (4) Subsection 12(4) of the Principal Act as amended by this Act: (a) applies in respect of all meetings held after the commencement of that subsection; and (b) in respect of a meeting to which section 64ZA of the Principal Act as amended by this Act does not apply because of subsection (5) of this section, so applies as if section 64ZA applied to that meeting.

[page 41]

(5) The amendments of the Principal Act made by sections 9 to 14 2 (inclusive) and 17 of this Act apply only in respect of meetings convened by notices given after the

[page 42] commencement of the amendments made by the section concerned and the provisions of the Principal Act that are amended or repealed by those sections continue to apply, despite their amendment or repeal, in respect of meetings convened by notices given before the commencement of those amendments. “Compositions and schemes of arrangement 52 (1) Any proceeding under section 74 of the Principal Act that was pending before the Court immediately before the commencement of section 15 3 of this Act lapses upon that commencement. (2) Where: (a) within the period of 3 months immediately before the date of commencement of section 15 of this Act, the creditors of a bankrupt had accepted a composition or scheme of arrangement; and (b) the bankruptcy had not been annulled by the Court before that date; and (c) the Court had not refused to approve the composition or scheme of arrangement before that date; subsection 74(5) of the Principal Act as amended by this Act has effect as if the special resolution accepting the composition or scheme of arrangement had been passed on that date. (3) Section 75 of the Principal Act as amended by this Act extends to all compositions and schemes of arrangement that are in force at the commencement of section 16 of this Act. “If proceedings pending under proceeds of crime legislation 53 Any order that was in force under section 148 4 of the Principal Act immediately before the repeal of that section by section 26 of this Act continues to have effect as if it were made: (a) in the case of an order in relation to a bankrupt — under subsection 154(6) of the Principal Act as amended by this Act; or

[page 43] (b) in the case of an order in relation to a debtor who had executed a deed of assignment — under section 231A of the Principal Act as amended by this Act; or (c) in the case of an order in relation to a debtor who had executed a deed of arrangement — under section 237AA of the Principal Act as amended by this Act; or (d) in the case of an order in relation to a debtor who had entered into a composition — under section 243AA of the Principal Act as amended by this Act. “Existing objections and proceedings are to lapse

54 (1) Any objection to the discharge of a bankrupt that was entered under paragraph 149(3)(c) of the Principal Act and had not been withdrawn or lapsed before the repeal of section 149 of that Act by this Act lapses upon that repeal but the trustee or Official Receiver is not precluded by the lapsing of that objection from filing a notice of objection under section 149B of the Principal Act as amended by this Act. (2) Any proceeding that was pending before the Court, and any order by the Court that was in force, under section 149 of the Principal Act immediately before the repeal of that section lapse upon that repeal. 5

“Pending applications to Court for discharge are to lapse 55 Any application made to the Court under section 150 6 of the Principal Act that did

[page 44] not result before the repeal of that section in the making of an order for the unconditional discharge of the bankrupt, and any order made on such an application, lapse upon the repeal of that section. “Pending proceedings for annulment of bankruptcy under section 154 56 (1) Any proceeding that was pending before the Court immediately before the repeal of section 154 7 of the Principal Act for an order annulling a bankruptcy on a ground set out in paragraph 154(1)(b) of that Act lapses upon the repeal of that section.

[page 45] (2) Any proceeding that was pending before the Court immediately before the repeal of section 154 of the Principal Act for an order annulling a bankruptcy on a ground set out in paragraph 154(1)(a) of that Act continues as if it were a proceeding before the Court under section 153B of that Act as amended by this Act, and the Court may give such directions and make such orders as are necessary to resolve any difficulties of practice, procedure or otherwise in giving effect to this subsection. “Amendments to extend to existing deeds and compositions 57 Subject to section 52, each amendment of the Principal Act that is made by this Act and relates to deeds of assignment, deeds of arrangement, or compositions, applies according to its tenor in relation to deeds executed or compositions entered into before the commencement of the amendment as it applies in relation to deeds executed or compositions entered into after that commencement. “Amendments to extend to existing administrations of estates of deceased persons 58 Each amendment of the Principal Act that is made by this Act and relates to the administration of the estates of deceased persons applies according to its tenor in relation to any such estates that were being administered under the Principal Act at the commencement of that amendment as it applies in relation to estates that begin to be administered after that

commencement.”

note: Section 6A, inserted by Act 119 of 1987 s 6 and repealed by s 4 of the Bankruptcy Amendment Act 1991 No 9 of 1992, read as follows: 1Editor’s

“Statements of affairs 6A (1) A reference in a relevant provision to: (a) a statement of particular affairs; or (b) a statement of a deceased person’s affairs and of a person’s administration of the deceased person’s estate; is a reference to a statement of those affairs, or of those affairs and that administration, as the case may be, that: (c) contains such information as is prescribed for the purposes of that provision; and (d) is verified by affidavit. (2) In subsection (1): relevant provision means subsection 54(1) or (2) or 55(2), paragraph 56(2)(a) or (b) or (13)(a) or (b) or 57(2)(a) or (b), subparagraph 188(2)(c)(i), paragraph 246(1)(a) or subsection 247(1).” note: Sections 9–14 and 17 of the Bankruptcy Amendment Act 1991 No 9 of 1992 inserted ss 63A–63B and 64A–64ZF, amended ss 64 and 70 and repealed ss 65–68. Sections 64 and 70 before their amendment and ss 65–68 before their repeal provided as follows: 2Editor’s

“Meetings of creditors 64 (1) The trustee shall convene a meeting of the creditors of a bankrupt: (a) whenever the creditors so direct by resolution; (b) whenever so requested in writing by at least one-fourth in value of the creditors; and (c) whenever so requested in writing by less than one-fourth in value of the creditors, being a creditor who has, or creditors who together have, lodged with the trustee sufficient security for the cost of holding the meeting. (2) The trustee may convene at any time a meeting of the creditors of a bankrupt. “Election of chairman 65 The majority in number of the creditors present at a meeting of creditors in person, by attorney or by proxy shall elect a chairman to preside at the meeting. “Entitlement to vote at meeting of creditors 66 (1) Subject to this section, each creditor who is entitled to prove a debt in the bankruptcy is entitled to vote at a meeting of creditors. (2) A creditor is not entitled to vote at a meeting of creditors (otherwise than in respect of the election of a chairman of the meeting) unless he has made known to the chairman particulars of his debt.

(3) Except as provided by subsection (4), a secured creditor is not entitled to vote in respect of a secured debt unless he surrenders his security. (4) A secured creditor may, if he has furnished to the chairman, in writing, particulars of his security and of the value at which he estimates it, vote in respect of the balance (if any) of the secured debt after deducting the value at which he has estimated the security. (5) The spouse, or the de facto spouse, of the bankrupt is not entitled to vote at a meeting of creditors. “Manner of voting 67 (1) A creditor may vote at a meeting of creditors either in person or by his attorney or by a proxy appointed in writing by the creditor or his attorney. (2) A proxy may be appointed to vote on all matters arising at the meeting or on particular matters specified in the instrument of appointment. (3) A person claiming to be the proxy of a creditor is not entitled to vote as proxy (otherwise than in respect of the election of a chairman of the meeting) unless the instrument by which he is appointed has been lodged with the chairman. (4) A person claiming to be the attorney of a creditor is not entitled to vote as attorney (otherwise than in respect of the election of a chairman of the meeting) unless— (a) the instrument by which he is appointed has been produced to the chairman; or (b) the chairman is otherwise satisfied that he is the duly authorized attorney of the creditor. “Admission and rejection of claim to vote 68 Any question as to the persons entitled to vote at a meeting of creditors of a bankrupt, or as to the amount of the debt in respect of which a creditor is entitled to vote at the meeting, shall be determined by the chairman, who may, if he thinks it necessary to do so, adjourn the meeting for a period, not exceeding 14 days, to enable him to investigate the matter. … “Committee of inspection 70 (1) The creditors who are qualified to vote may, at a meeting of the creditors, by resolution appoint a committee of inspection for the purpose of advising and superintending the trustee. (2) The committee of inspection shall consist of not more than 5 and not less than 3 persons. (3) A person is not eligible for appointment as a member of a committee of inspection unless— (a) he is a creditor or a person authorized by a creditor to act for the creditor in relation to the bankruptcy; or (b) he is a person whom a creditor intends to authorize to act for him in relation to the bankruptcy. (4) A creditor or other person referred to in paragraph 3(a) is not qualified to act as a member of the committee of inspection until, in the case of a creditor, his proof of debt or, in the case of another person, the creditor’s proof of debt, has been admitted and a person referred to in paragraph 3(b) is not qualified so to act until the creditor has authorized him to act for the creditor in relation to the bankruptcy and the creditor’s proof of debt has been admitted. (5) Subject to subsection (6), the committee of inspection shall meet at such times as the committee appoints from time to time. (6) The trustee or a member of the committee may call a meeting of the committee at any time. (7) The Committee may act by a majority of its members present at a meeting but, except as provided by the next succeeding section, shall not act unless a majority of its members is present

at the meeting.” note: Sections 15 and 16 of the Bankruptcy Amendment Act 1991 No 9 of 1992 commenced on 1 July 1992. 3Editor’s

note: The Bankruptcy Amendment Act 1991 No 9 of 1992 repealed the existing s 148 and inserted a new s 148 in Pt VII. The repealed s 148 provided as follows: 4Editor’s

“Right of bankrupt to surplus 148 (1) Subject to subsection (2), a bankrupt is entitled to any surplus remaining after payment in full of— (a) the costs, charges and expenses of the administration of the bankruptcy; (b) all debts that have been proved in the bankruptcy; and (c) interest on interest-bearing debts that have been proved in the bankruptcy. (2) The Court may make an order directing the Official Trustee not to pay the surplus, or a specified part of the surplus, to the bankrupt if: (a) the Director of Public Prosecutions, or a person who is entitled to apply for an interstate confiscation order under a corresponding law, applies to the Court for an order under this subsection; and (b) the Court is satisfied that: (i) proceedings are pending under the Proceeds of Crime Act 1987 or a corresponding law; and (ii) property of the bankrupt may: (A) become subject to a forfeiture order or interstate forfeiture order made in the proceedings; or (B) be required to satisfy a pecuniary penalty order or interstate pecuniary penalty order made in the proceedings. (3) The Court may, on application, vary or revoke an order made under subsection (2).” note: Section 149(3)(c), repealed by the Bankruptcy Amendment Act 1991 No 9 of 1992, provided as follows: 5Editor’s

“(3) A bankrupt is not discharged from bankruptcy by virtue of this section if — … (c) the Registrar, the Inspector-General or the trustee has entered, or a creditor has, with the leave of the Court, entered, an objection, in accordance with the prescribed form and in the prescribed manner, to the discharge of the bankrupt by force of this section and the objection has not been withdrawn or lapsed before the time when the bankrupt would have been so discharged but for this subsection; or” note: Section 150, repealed by the Bankruptcy Amendment Act 1991 No 9 of 1992, provided as follows: 6Editor’s

“Discharge by the Court 150 (1) A person who becomes, or has before the commencement of this subsection become, a bankrupt may apply to the Court at any time for an order of discharge. (2) A person who immediately before the commencement of this Act was an undischarged bankrupt under the repealed Act may apply to the Court at any time for an order of discharge.

(3) On the hearing of an application under this section, the Court shall take into consideration a report in writing by the trustee about the bankrupt and the bankrupt’s conduct and examinable affairs both in respect of the period before and the period after the applicant became a bankrupt. (4) The Court may, in addition— (a) hear, and put such questions as it thinks fit to— (i) an Official Receiver; (ii) a creditor who has a provable debt; (iii) the bankrupt; or (iv) the trustee; and (b) receive such other evidence as it thinks fit. (5) The Court shall, if any of the matters specified in subsection (6) is established— (a) refuse to make an order of discharge; or (b) make an order of discharge but suspend the operation of the order as the Court thinks proper, either unconditionally or subject to conditions. (6) The matters upon the establishment of which the Court may exercise the powers specified in subsection (5) are as follows— (a) that the bankrupt has omitted to keep and preserve such books, accounts or records as sufficiently disclose his business transactions and financial position within the period of 5 years immediately preceding the date on which he became a bankrupt; (b) that the bankrupt has, after knowing himself to be insolvent, continued to trade or obtain credit to the amount of $100 or upwards; (c) that the bankrupt has contracted a debt provable in the bankruptcy without having at the time of contracting it any reasonable or probable grounds of expectation (proof of which lies on him) of being able to pay it after taking into consideration his other liabilities at the time; (d) that the bankrupt has failed to account satisfactorily to the trustee for any loss of, or depreciation of, assets or for a deficiency of assets; (e) that the bankrupt has brought on, or contributed to, his bankruptcy by— (i) rash or hazardous speculations; (ii) unjustifiable extravagance in living; (iii) culpable neglect of his business affairs; (f) that the bankrupt has, within the period of 6 months immediately preceding the presentation of the petition on which, or by virtue of the presentation of which, he became a bankrupt— (i) put any of his creditors to unnecessary expense by a frivolous or vexatious defence to an action brought against him; or (ii) incurred expense by bringing a frivolous or vexatious action; (g) that the bankrupt has, within the period of 6 months immediately preceding the presentation of the petition on which, or by virtue of the presentation of which, he became a bankrupt, when unable to pay his debts as they became due, given an undue preference to any of his creditors; (h) that the bankrupt has been guilty of fraud or fraudulent breach of trust; or (i) that the bankrupt has been convicted of an offence against this Act or the repealed Act or of any other offence related to his bankruptcy. (7) The court shall not, under subsection (5), suspend the operation of an order of discharge subject to conditions that require, or have the effect of requiring, the bankrupt to make payments

from his income at any time after the expiration of the period of 5 years commencing on the date of the bankruptcy. (8) Notwithstanding that the operation of an order of discharge is, by virtue of an order of the Court in force immediately before the commencement of this subsection (including such an order as varied after the commencement of this subsection), suspended subject to conditions that require, or have the effect of requiring, a bankrupt to make payments from his income, the bankrupt is not required to make payments in pursuance of the conditions as any time after— (a) the expiration of the period of 5 years commencing on the date of the bankruptcy; or (b) in a case where the period referred to in paragraph (a) expired before the commencement of this subsection — the commencement of this subsection. (9) Where none of the matters specified in subsection (6) is established, the Court may— (a) refuse to make an order of discharge; (b) make an order of discharge; or (c) make an order of discharge but suspend the operation of the order as the Court thinks proper, either unconditionally or subject to conditions. (10) The Court shall not, under subsection (9), suspend the operation of an order of discharge beyond the period of 3 years commencing on the date of the bankruptcy. (11) The Court may, at any time while the operation of an order of discharge (including such an order made before the commencement of this subsection) is suspended, rescind or vary the order. (12) A report referred to in subsection (3) is, for the purposes of this section, prima facie evidence of the statements contained in it.” note: Before its repeal and substitution by s 29 of the Bankruptcy Amendment Act 1991 No 9 of 1992, s 154 provided as follows: 7Editor’s

“Power to annul bankruptcy 154 (1) Where the Court is satisfied— (a) that a sequestration order ought not to have been made or, in the case of a debtor’s petition, that the petition ought not to have been presented or ought not to have been accepted by the Registrar; or (b) that the unsecured debts of the bankrupt, being debts that have been proved in the bankruptcy, have been paid in full or the bankrupt has obtained a legal acquittance of them, the Court may make an order annulling the bankruptcy. (2) 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 (3), 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 estate or interest in it, on such terms and subject to such conditions, if any, as the Court orders. (3) 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. (4) For the purposes of this section, where a debt has been proved by a creditor but the creditor cannot be found or cannot be identified, the debt may be paid to the Registrar, and if so paid, shall, for the purposes of this section, be deemed to have been paid in full to the creditor.

(5) Where money is paid to the Registrar under subsection (4), the Registrar shall pay that money into the Consolidated Revenue Fund and the provisions of subsections 254(3) and (4) apply in relation to that money as if it had been paid into the Consolidated Revenue Fund by a trustee in pursuance of subsection 254(2).”

[page 46]

Notes to the Bankruptcy Amendment Act 1987 No 119

[79,955] Application of certain amendments Section 106 of the Bankruptcy Amendment Act 1987 provides as follows: “106 (1) The amendment or amendments made by subsection 10(1), 18(1), 26(1), 27(1), 28(1), 29(1), 30(1), 31(1), 32(1), 34(1), 37(3), 38(1), 40(1), 43(3), 46(1), 53(2), 55(1), 97(1) or 103(1), or the section inserted in the Principal Act by subsection 11(1), 25(1), 35(1), 36(1) or 47(1), of this Act applies or apply in relation to a bankrupt in respect of a bankruptcy if, and only if, the date of the bankruptcy occurred on or after the day of commencement of that subsection. (2) The amendment or amendments made by subsection 62(1), 63(1), 65(1), 68(1), 69(1), 70(1), 71(1), 72(1), 77(1), 78(1), 79(3) or (4), 82(1) or 99(1), or the sections inserted in the Principal Act by subsection 64(1) or 76(1), of this Act applies or apply in relation to: (a) an authority signed by a person under section 188 of the Bankruptcy Act 1966 after the commencement of that subsection; (b) a meeting called under such an authority; or (c) a deed of assignment or deed of arrangement executed under, or a composition accepted by, a resolution passed at a meeting called under such an authority; as the case requires, whether the registered trustee or solicitor who is named in the authority consented under subsection (2) of that section before or after that commencement. (3) The amendment or amendments made by subsection 86(1) or 89(1) apply in relation to an order made under Part XI of the Bankruptcy Act 1966 after the commencement of that subsection, whether the person to whose estate the order relates died before or after the commencement.”

Some amendments made for avoidance of doubt Section 107 of the Bankruptcy Amendment Act 1987 No 119 provides as follows: “107 Because some amendments made by this Act are for the avoidance of doubt, an amendment made by this Act shall not be taken to affect by implication the interpretation of the Bankruptcy Act 1966 as in force before that amendment came into operation.”

[page 47]

Notes to the Bankruptcy Amendment Act 1980 No 12

[79,960] Transitional provisions and courts’ power to resolve difficulties Sections 175 and 176 of the Bankruptcy Amendment Act 1980 provide as follows: “Transitional provision 175 While, immediately before the commencement of this section, an Official Receiver, for the purposes of the Bankruptcy Act 1966 or of the provisions of the Bankruptcy Act 1924–1965 in their continued application by virtue of the Bankruptcy Act 1966, held or was acting in the office of trustee or one of the offices of trustee of the estate of a bankrupt or of a deceased debtor or of a deed of assignment, a deed of arrangement, a composition or a scheme of arrangement, the Official Trustee in Bankruptcy becomes, upon the commencement of this section, the trustee or one of the trustees of the estate, deed, composition or scheme of arrangement, as the case requires, in place of the Official Receiver, and holds or acts in that office of trustee under and in accordance with the provisions of the Bankruptcy Act 1966 or, subject to that Act, the provisions of the Bankruptcy Act 1924–1965 in their continued application by virtue of the Bankruptcy Act 1966, as the case requires. “Court may resolve difficulties 176 (1) Where any difficulty arises in the application, in accordance with provisions of this Act, to a particular matter of the amendments of the Principal Act made by this Act, the Court may, on the application of an interested person, make such order as it thinks proper to resolve the difficulty. (2) An order so made has effect notwithstanding anything contained in the Principal Act as amended by this Act.”

[page 48]

Notes to the Crimes Legislation Amendment Act (No 2) 2011 No 174

[79,965] Application of amendments — the Bankruptcy Act 1966 Section 150 of the Crimes Legislation Amendment Act (No 2) 2011 No 174 provides as follows: 150 (1) The amendments of the Bankruptcy Act 1966 made by items 142 to 149 of this Schedule apply as set out in this item. (2) The amendments apply in relation to proceeds of crime orders (or applications, proceedings or pending proceedings for proceeds of crime orders), or proceedings under the Bankruptcy Act 1966, made or (in the case of proceedings) started before, at or after the commencement of those items. (3) The amendments apply under subitem (2) of this item regardless of whether the conduct giving rise to those orders (or applications or proceedings for orders) occurred, or is suspected to have occurred, before, at or after the commencement of those items.

[page 49]

Notes to Federal Circuit Court of Australia (Consequential Amendments) Act 2013 No 13

[79,970] Application of amendments — the Bankruptcy Act 1966 Saving provisions 57 (1) A consent that is in force immediately before the commencement of this item under subsection 129A(1) of the Bankruptcy Act 1966 in respect of a Federal Magistrate continues in force, after that commencement, as a consent in respect of a Judge of the Federal Circuit Court of Australia. (2) A declaration that is in force immediately before the commencement of this item under subsection 129A(2) of the Bankruptcy Act 1966 in respect of a Federal Magistrate continues in force, after that commencement, as a declaration in respect of a Judge of the Federal Circuit Court of Australia. (3) A thing done by, or in relation to, a Federal Magistrate, as an eligible judge, under section 130 of the Bankruptcy Act 1966 before the commencement of this item has effect, after that commencement, as if it had been done by, or in relation to, a Judge of the Federal Circuit Court of Australia, as an eligible judge, under that section.

[page 51]

INTRODUCTION TO THE BANKRUPTCY ACT 1966

[80,000.1] Introduction Bassanio: Why dost thou whet thy knife so earnestly? Shylock: To cut the forfeiture from that bankrupt there. William Shakespeare, The Merchant of Venice, Act IV Scene I (“A Court of Justice”) Section 51(xvii) of the Constitution confers power upon the Commonwealth to make laws in respect of bankruptcy and insolvency. The first Commonwealth Bankruptcy Act came into force in 1928 and the present Act, the Bankruptcy Act 1966, came into force on 4 March 1968. Earlier state legislation had been founded upon English bankruptcy legislation which had undergone considerable consolidation and modernisation during the nineteenth century. Bankruptcy remains “a proceeding by which possession of the property of a debtor is taken for the benefit of his creditors generally, by an officer appointed for the purpose, the property being realised and, subject to certain priorities, distributed ratably amongst those creditors, that is to say, the persons to whom the debtor owes money or has incurred pecuniary liabilities. In bankruptcy proceedings the debtor obtains protection from suits by the persons to whom he has incurred debts or liabilities … He may [be automatically entitled to] discharge, by which he will be released from his debts and liabilities subject to certain exceptions”: Halsbury’s Laws of England 4th ed, vol 3, para 201. Bankruptcy is entirely a creation of statute law, but, although there is no “common law of bankruptcy” as such, the term is sometimes applied to certain principles of law not specifically enacted in bankruptcy statutes but laid down from time to time by the judges exercising bankruptcy jurisdiction: Halsbury’s Laws of England, above, para 202; see also Re Mendonca; Ex parte FCT (1969) 15 FLR 256. Note, for example, “the rule against double proofs” and the proposition that a petitioning creditor’s debt must have been in existence at the time of the commission of the relevant act of bankruptcy.

Yet the Court of Bankruptcy has always been regarded as a “Court of Equity”, the bankruptcy statutes regulating the proceedings on equitable principles, recognising equitable debts, subject of course to such infirmities as are sometimes present, but drawing no distinction between equitable and legal rights for the purposes of administering the estate of the bankrupt: Mathieson’s Trustee v Burrup Mathieson & Co [1927] 1 Ch 562. By the Bankruptcy Court Act 1831 (Eng), courts of bankruptcy were declared to be courts “of Law and Equity”. [80,000.5] Jurisdiction Federal jurisdiction in bankruptcy is exercised throughout Australia by the Federal Court and, semble, by the Supreme Courts pursuant to s 4 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), and also more recently by the Federal Magistrates Court. In many routine matters, the registrars of the Federal Court exercise the jurisdiction of that court pursuant to s 35A of the Federal Court of Australia Act 1976 and O 77 r 7 of the Federal Court Rules. The registrars of the Federal Magistrates Court exercise the jurisdiction of that court pursuant to s 102 of the Federal Magistrates Act 1999 and r 20.00A of the Federal Magistrates Court Rules 2001. Harris v Caladine (1991) 172 CLR 84; 99 ALR 193; 65 ALJR 280 establishes that the judicial power of the Commonwealth invested in a federal court may be delegated by such a court to its officers so long as the exercise of delegated jurisdiction, powers and functions by a court officer is subject to “review or appeal by a judge or judges of the court on questions of both fact and law”. The cross-vesting legislation contemplates the transfer of matters arising in the bankruptcy jurisdiction between federal and state or territory Supreme Courts, and the Family Court of Australia (Additional Jurisdiction and Exercise of Powers) Act 1988 (Cth), which enacted s 35A of the Bankruptcy Act 1966, contemplates the transfer to the Family Court of Australia by the Federal Court (on the application of a party or of its own motion) of pending proceedings. The jurisdiction of Australian courts exercising federal bankruptcy law is contained in the Bankruptcy Act in certain specific provisions. The general provisions of s 30 confer wide powers upon those courts in respect of the exercise of that jurisdiction. See for example Clyne v DCT (1984) 154 CLR 589 at 597; 55 ALR 143 at 150; 58 ALJR 398; Re Briggs (1986) 12 FCR 310; 75 ALR

[page 52] 554 at 555–6 per Toohey J (Federal Court); Re Bayliss; Ex parte Official Trustee in Bankruptcy (1987) 15 FCR 167; 73 ALR 455 per Pincus J (interlocutory injunctions) and Re Bilen; Ex parte Sistrom (Fed C of A, Neaves J, 706/1983, 11 April 1985, unreported) cited with approval by Fisher J in Re Klau (1987) 74 ALR 67 at 72. The section has been “liberally construed”: Zantiotis v Andrew (1987) 80 ALR 23 at 26. See also Jackson v Sterling Industries Ltd (1987) 162 CLR 612; 71 ALR 457; (1987) ATPR 40– 792. Frequently considered extrinsic materials are the Report of the Committee Appointed by the Attorney-General of the Commonwealth to Review the Bankruptcy Law of the Commonwealth dated 14 December 1962 (the “Clyne Committee Report”) and the explanatory memoranda that accompanied the Bills for the 1980 and 1987 amending Acts. See also Re Clarke; Ex parte Official Receiver (1981) 35 ALR 359 and ss 15AA and 15AB of the Acts Interpretation Act 1901 (Cth). [80,000.10] Scope of Bankruptcy Act 1966 The application of the Bankruptcy Act 1966 is restricted to debtors who are natural persons, whether or not they are Australian citizens and whether or not they have attained the age of 18 years: s 7. Apart from occasional proceedings which may give rise to argument concerning the scope and effect of s 30 (or the jurisdictional limits of the Federal Court as distinct from a state or territory Supreme Court purporting to exercise bankruptcy jurisdiction), proceedings under the Bankruptcy Act may be categorised as: (1) voluntary bankruptcies; (2) voluntary arrangements with creditors without bankruptcy; establishing deeds of assignment, deeds of arrangement and compositions on the one hand, and applying to the court for orders declaring such voluntary arrangements void, terminating them or setting them aside, as the case may require; (3) involuntary bankruptcies, that is to say creditors’ petitions and applications (associated with proceedings attacking Pt X deeds or compositions) for ‘summary’ sequestration orders;

(4) post-bankruptcy compositions and schemes of arrangement; (5) applications for annulment of bankruptcy: s 153B; (6) proceedings associated with the investigation of the “examinable” affairs and conduct of a bankrupt or Pt X debtor; (7) proceedings in respect of the realisation of property by the trustee of a bankrupt estate, the estate of a deceased debtor, or deed under Pt X (which proceedings may overlap with proceedings not under the Bankruptcy Act instituted or defended by a trustee in bankruptcy in various courts and tribunals); (8) preferences: s 122; (9) voidable dispositions (fraudulent or voluntary) and the “doctrine of relation back”; (10) proofs of debt (appeals under s 104 and applications to expunge or reduce admitted proofs under s 99); (11) appeals by creditors (or bankrupts) affected by an act, omission or decision of a trustee in bankruptcy: s 178; (12) applications for directions by trustees in bankruptcy: s 134(4); (13) applications for orders for the administration of deceased estates of debtors: Pt XI; (14) miscellaneous proceedings, for example, proceedings for the registration of trustees in bankruptcy (or their de-registration), criminal proceedings, applications to punish bankrupts for contempt for failing to file a statement of affairs (s 54), or for other misconduct (ss 77, 78(1)(f)) and appeals from the registrar. The list of matters which must be heard and determined in open court (s 31) and the list of powers of the court delegated to the registrar (Federal Court Rules, Third Schedule, Pt 3) provide a useful index to the various litigious proceedings (as distinct from non-litigious proceedings such as the making of an application to the registrar for issue of a bankruptcy notice: Re Coast Securities Pty Ltd (No 9); Ex parte Prapnell (1985) 7 FCR 293) involved in the exercise of the bankruptcy jurisdiction. [80,000.12] Federal Magistrates Court The Federal Magistrates Court was created and invested with jurisdiction in bankruptcy by the Federal Magistrates Act 1999. Bankruptcy

[page 53] proceedings in the Federal Magistrates Court are governed by the Federal Magistrates Court Rules 2001. In so far as those Rules are insufficient or inappropriate, the court may apply the Federal Court Rules, in whole or in part and modified or dispensed with as necessary: see r 1.05 and Sch 3 Pt 2 of the Federal Magistrates Court Rules. [80,000.15] Administrative Appeals Tribunal In recent years, jurisdiction has been conferred upon the Federal Administrative Appeals Tribunal to review numerous administrative decisions of trustees and the inspectorgeneral, including decisions to lodge objections to automatic discharge and decisions in respect of income contribution assessments. [80,000.20] Evidence A civil standard of proof in all bankruptcy matters has been imposed (pursuant to an amendment that came into force on 13 January 1988) by s 34A. Transcripts of evidence taken at public examinations of persons are admissible pursuant to s 81(17) in “any proceedings under this Act in which the person is a party”. Contrast s 81(19) with s 255 and with ss 64, 67 and 190 of the Evidence Act 1995 (Cth); see also Re Schofield; Ex parte Rangott v P & B Barron Pty Ltd (1997) 143 ALR 185. Gazette notices and minutes of meetings constitute prima facie proof: ss 256, 257, 260. See also ss 255 and 258. [80,000.25] Enforcement Judgments and orders of the court are now enforced in accordance with the relevant provisions of the Federal Court of Australia Act 1976, Federal Court Rules, Federal Magistrates Act 1999 and Federal Magistrates Court Rules. The power to punish for contempt (s 78(1) (f)) certain transgressions by bankrupts (ss 54(3), 77) remains unaffected. [80,000.30] Voluntary bankruptcy An individual debtor may present a debtor’s petition pursuant to s 55. All the members of a partnership or a majority of the members of a partnership resident in Australia may present a petition pursuant to s 56A (the Official Receiver being obliged to refer the petition to the court if it is not signed by all the members of the partnership). Joint debtors who are not partners may present a petition pursuant to s 57.

[80,000.35] “Cooling off” Section 19 of the Bankruptcy Amendment Act 1987 (which came into operation on 3 January 1989) introduced ss 54A–54L which prescribe a procedure whereby a person may declare an intention to present a debtor’s petition in certain circumstances. This procedure has been seldom used. [80,000.40] Arrangements with creditors without bankruptcy There are three types of arrangement between debtor and creditors under Pt X of the Bankruptcy Act 1966, namely deed of assignment, deed of arrangement and composition. An arrangement under Pt X can only result from the passing of a special resolution at a meeting of the debtor’s creditors convened in strict compliance with the provisions of that Part. The procedure (prescribed in ss 187–227) involves the signing by a debtor of an authority under s 188, the acceptance of the authority by a solicitor of the Official Trustee a private registered trustee (who becomes the “controlling trustee”), the advertising and giving of notice of the meeting to creditors and the consideration of the debtor’s statement of affairs at the meeting. A court would not ordinarily intervene to restrain the holding of a meeting of creditors under Pt X: see Re Patrick Partners; Ex parte Commercial Banking Co of Sydney Ltd (1976) 10 ALR 71 at 78–9 (Riley J); but compare Zantiotis v Andrew (1987) 80 ALR 23 at 26 (Beaumont J). There is now a greater judicial inclination to intervene in the procedure of creditors’ meetings. Controlling trusteeship Where a debtor has given an effective authority under s 188, the property of the debtor becomes subject to control (by the “controlling trustee”) until the creditors resolve by special resolution otherwise, a deed of assignment or deed of arrangement is executed, a composition is accepted by special resolution of the creditors, the debtor becomes a bankrupt or dies or the court makes an order under s 208 releasing the debtor’s property from control (s 189). The powers of the controlling trustee are prescribed by s 190(2) and are limited to preservation of the debtor’s property pending the meeting of creditors. The “debtor’s property” (see s 190(5)) does not [page 54]

vest in the controlling trustee (but is charged under s 189AB) and it is arguable whether or not the control and charge imposed upon that property gives rise to a caveatable interest in land included in the debtor’s property. Deed of assignment By this prescribed form of deed entered into pursuant to a special resolution of creditors passed under s 204, a debtor assigns all his or her divisible property to a trustee for the benefit of creditors in return for an immediate release from all provable debts (except those which would not be released by discharge from bankruptcy: see s 153). A deed of assignment must be executed within 21 days (s 216) and must comply substantially (s 214(2)(b)) with the prescribed form (Approved Form 14). In Victoria, s 73A of the Property Law Act 1958 may excuse failure to seal the deed: compare Re Dunn; Ex parte Andrew (1981) 35 ALR 466; 53 FLR 102 and note s 213(2). Deed of arrangement This is a deed which records an agreement between the debtor and his or her creditors (although only the debtor and the trustee are the parties) which provides for a particular arrangement of the debtor’s financial affairs, possibly including a complete assignment of all the debtor’s property or even a simple composition. Most likely, a deed of arrangement will proceed for partial assignment together with some contributions from future income or third parties. There is no prescribed form of deed of arrangement, although its terms must not conflict with the provisions of ss 214 and 216. A deed of arrangement does not operate as a release of the liabilities of a debtor to his or her creditors unless the deed so provides: s 234. Although it is clear that a deed of arrangement may provide that property not ordinarily divisible amongst the creditors of a bankrupt (such as compensation for personal injuries) be assigned to the trustee for distribution to creditors, there is some divergence of opinion as to whether or not a deed of arrangement may provide for the assignment of after-acquired property (which would not be included in the definition of “divisible property” in s 187 in respect of a deed of assignment). See Re Marshall (1973) 22 FLR 71 at 92; Re Venetoulis; Ex parte Calsil Ltd (1976) 13 ALR 625 at 633; Re Leask and Trumbich; Ex parte Nelson (1986) 11 FCR 305; 66 ALR 487. Composition A composition is defined in s 187 as an arrangement by which

the creditors of a debtor agree to accept payment of the debts due to them by instalments or agree to accept in full and final satisfaction of the debts due to them, less than the full amount of those debts, whether in the form of money or other property and whether by instalments or otherwise. A composition takes effect upon the passing of a special resolution pursuant to s 204 accepting the debtor’s proposal. It operates as a release of all provable debts. However, provisions that are imported from other parts of the Bankruptcy Act 1966 conferring powers upon the trustee (s 134) and priorities in distribution (s 109) do not apply and a composition will not be an appropriate form of administration unless the facts of the relevant case are simple and straightforward. See ss 231, 237 and 243 and note the “modification” of imported provisions effected by reg 10.02 of the Bankruptcy Regulations. For example, although on the face of it, creditors may vote under s 204 for a composition depriving a creditor of a priority that the creditor would have enjoyed on the administration of a bankruptcy (such as the Deputy Commissioner of Taxation in respect of tax instalment deductions or an employee in respect of wages, etc), a composition in such terms entered into without the consent of the prejudiced creditor would be liable to be set aside pursuant to s 239. See Re Boyley (1952) 16 ABC 33; Re Groom; Ex parte Official Receiver (1976) 13 ALR 529 at 535; Re Groom (1977) 16 ALR 278 at 283; 78 ATC 4530; Re Jacobs; Ex parte O’Connor (1984) 1 FCR 1; 53 ALR 93; Raschilla v Gulluni (1987) 14 FCR 57. [80,000.45] Effect of bankruptcy When a debtor becomes a bankrupt his or her real and personal property at the date of the commencement of the bankruptcy vests in the trustee of the bankrupt estate: s 58. For a definition of the date of the commencement of the bankruptcy, see ss 5 and 115. The property of the bankrupt which vests in the trustee is that which is divisible among the creditors of the bankrupt estate, including after-acquired property (which vests as soon as it is acquired), and powers of appointment, pursuant to s 116(1) of the Bankruptcy Act 1966. Section 116(2) excludes certain classes of property, including necessary household furniture and effects, a car and tools of trade up to certain values, superannuation and some life insurance policies, etc. See regs 6.03 and 6.04. [page 55]

Other consequences of bankruptcy to the debtor are that he or she may be prohibited from being a director, promoter or concerned in the management of a company without the leave of a court; a partnership of which the debtor is a member may be dissolved; and he or she may not sit as a member of Parliament etc. The debtor once bankrupt may forfeit certain professional qualifications and may be prevented from travelling overseas without the written consent of his or her trustee or an order of court and must hand in his or her passport to his or her trustee. The debtor may be exposed to criminal sanctions for certain misconduct prior to bankruptcy and may commit offences after bankruptcy (for example, if he or she obtains credit of more than a certain amount without disclosing the fact the he or she is an undischarged bankrupt), and civil proceedings in which he or she has been involved prior to bankruptcy will be stayed (compare ss 58(3) and 60(4)). [80,000.50] Fundamental principle Upon the bankruptcy of a debtor the rights of creditors are converted into rights to prove their debts in the administration of the bankrupt’s estate, and they lose their rights to pursue other remedies for unsatisfied debts (with the exception of remedies in respect of maintenance payments): Clyne v DCT (1984) 154 CLR 589 at 594–5; 55 ALR 143 at 148; 58 ALJR 398. However, the Commonwealth and the Deputy Commissioner of Taxation have been recognised by different Full Courts of the Federal Court of Australia as enjoying a special position in relation to the exercise of remedies against the property of the bankrupt, although it must be appreciated that this special position is limited to recovery of social security overpayments and the setting off of post-bankruptcy tax instalment deductions from the wages of bankrupts against pre-bankruptcy income tax liability. See, respectively, Taylor v Dept of Social Security (1988) 79 ALR 327, especially at 336 and Taylor v DCT (1987) 16 FCR 212; 73 ALR 219, especially at 231. The social security case was decided after the taxation case, and that Full Court had the opportunity to consider, as a postscript to the judgments, the then-recent amendment to the definition of “the property of the bankrupt”. The change in definition makes no difference to the operation of the social security and taxation provisions concerned, which have been held to operate autonomously of the bankruptcy legislation. In other words, the relevant provisions of the Social Security and Income Tax Assessments Acts operate self-sufficiently so that, only after the

operation of those provisions, could the bankruptcy law apply and an asset of a bankrupt or a provable debt (by the Commonwealth or Deputy Commissioner of Taxation in the bankruptcy) be identified. [80,000.55] Uncompleted contracts In general, the bankruptcy of a party to a contract will leave the non-bankrupt contracting party with a claim for damages for breach (non-performance), which claim is converted into a right to prove in the administration of the bankruptcy. However, the trustee in bankruptcy is entitled to the benefit of all contracts entered into by the bankrupt and which are on foot at the time of bankruptcy; the non-bankrupt party to such a contract cannot determine the contract simply because of the bankruptcy: ss 301, 302; see also Official Receiver v Henn [1982] VR 362; (1981) 40 ALR 569; 61 FLR 410. Under s 133, the trustee of the bankrupt estate has the right to disclaim unprofitable contracts, although there are cases where specific performance will be ordered against the trustee of the bankrupt. For example, where the bankrupt has received the deposit under a contract for the sale of a particular chattel, the trustee of the bankrupt estate cannot both disclaim the contract and keep the chattel for realisation for the benefit of creditors. Where the bankrupt’s personal skill or conduct forms a material part of the consideration for a contract, the trustee of the bankrupt estate may not substitute the performance of another person and seek to enforce the contract. Of course, the trustee may sue for a breach prior to bankruptcy where the personal services of the bankrupt have already been supplied, or the bankrupt’s part of the bargain has been substantially performed. [80,000.60] Partnerships Many partnership agreements provide for the consequences of the bankruptcy of a partner. In some instances, a process is described in the partnership agreement for the valuation of the bankrupt’s share in the assets and goodwill of the partnership and the continuing partners are given the opportunity to purchase the bankrupt’s share from the trustee of his or her bankrupt estate. [page 56] Otherwise, the bankruptcy of a partner brings about a dissolution of the

partnership, and the solvent partners are obliged (and entitled) to realise the partnership assets, pay the partnership debts, and distribute any surplus to the partners including the trustee of the bankrupt partner’s estate; compare s 37(1) of the Partnership Act 1958 (Vic). [80,000.70] Joint tenancy Bankruptcy of a spouse will sever any joint tenancy, the interest of the bankrupt joint tenant vesting in the trustee in bankruptcy. If joint tenants of a matrimonial home become bankrupt separately (the husband a few days or weeks before the wife), the respective interests of the bankrupts as tenants in common (upon severance on bankruptcy of the joint interest) will vest in each bankrupt’s separate estate; whereas if husband and wife become bankrupt pursuant to s 56A or s 57 on a joint petition, the jointly owned matrimonial home will fall in with partnership property for the benefit of partnership creditors. See [81,020.10]. [80,000.75] The rule in Ex parte James Bankruptcy courts have long recognised that “analogous to trusts affecting the property in the hands of the bankrupt [which by virtue of s 116(2)(a) of the Bankruptcy Act 1966 bind the trustee] are equities arising in respect of property augmented or benefited at the expense of third parties since the date to which the trustee’s title relates back [under s 115], with the consent or at the implied request of the bankrupt”: see Williams & Muir Hunter on Bankruptcy, 19th ed, p 249. As a rule (the “rule in Ex parte James”) the trustee of an estate will be ordered, as an officer of the court, to do the fullest equity, and in certain cases, an even higher standard of conduct is imposed on him or her. In the leading case itself (Ex parte James (1874) LR 9 Ch App 609), the Court of Appeal held that a trustee in bankruptcy to whom an execution creditor had paid over the fruits of his execution, under a view of the law shortly afterwards shown to have been erroneous, must refund the money so paid. Again, in Ex parte Simmonds; Re Carnac (1885) 16 QBD 308, the trustee was ordered to refund money paid under a mistake of law (which was then not ordinarily refundable) so far as it remained in his hands and to make good the balance from the first assets that were available. In Re Brown (1886) 32 Ch D 597, money paid to a trustee in a liquidation representing the interest of the debtor under a will, the debtor having already received more than his full share, was ordered to be refunded. And in Re Rhodes [1899] 2 QB 347, the principle was applied to a mistake of law by an executrix as to her right of

retainer against the trustee of the deceased insolvent. In Australia, the rule has been recognised as firmly entrenched in our “common law of bankruptcy”. In Re Roberts (1976) 12 ALR 730, Riley J, although there rejecting the attempt by a money lender to take advantage of the rule in Ex parte James, above, explained and approved the rule, pointing out that the burden of satisfying the court that the facts of a particular case are such that the principle should be applied lies on the applicant. In that case, the “applicant” (which was a respondent to the official receiver’s application for directions) relied heavily upon the English decision of Re Thelluson [1919] 2 KB 735, the ratio decidendi of which was that “the court in bankruptcy ought not to allow its officer to insist upon a rule of law or equity in the administration of an estate in bankruptcy under the control of the court where insistence would produce an unjust and dishonest result … [therefore] in as much as if the debtor had known on [the day after bankruptcy] of the receiving order it would have been dishonourable of him to receive the money, the trustee ought to be directed to refund it”. That case is generally regarded as the high water mark of the rule in Ex parte James. Riley J pointed out that the rule in Ex parte James, where it is applied at all, is usually applied in circumstances where the trustee has acted in an unworthy manner to acquire property of the bankrupt and where, as Walton J said in Re Clark [1975] 1 All ER 453 at 459: “If in all the circumstances of the case, an honest man who would be personally affected by the result would nevertheless be bound to admit: ‘It’s not fair that I should keep the money; my claim has no merits’, then the rule applies so as to nullify the claim which he would otherwise have.” Riley J considered that it would only be in an exceptional case that the rule in Ex parte James would be applied where the trustee (or any predecessor of the trustee) had not been personally concerned in the transaction. Re Thelluson, above was such an exceptional case because the lender of the money, an ordinary person, was totally ignorant of the existence of the bankruptcy (as apparently was the bankrupt himself). Therefore, knowledge on the part of the person lending money to a debtor or performing services [page 57]

for him, of the precarious financial position of the debtor will generally be the factor that deprives that person of any benefit under the rule in Ex parte James. Re Clark, above, although a decision of a single judge of the Chancery Division in England (exercising bankruptcy jurisdiction), contains a thorough analysis of the law in this esoteric area. That decision was referred to with approval by Riley J in Re Roberts and, in Williams, as containing a summary of the principles appearing to underlie the rule. For the rule to operate: (1) there must be some form of enrichment to the bankrupt’s estate resulting from the conduct of the person seeking to take advantage of the rule; (2) except in the most unusual cases, the claimant must not be in a position to admit an ordinary proof of debt (the underlying reason for this aspect of the rule is that the Bankruptcy Act contains a mandatory rateable division of the estate between all creditors). The rule is not to be used merely to confer a preference on an otherwise unsecured creditor, but to provide relief for a person who would otherwise be without it; (3) would, in all circumstances, an honest person who would be personally affected by the result, nevertheless be bound to admit: “It is not fair that I should keep the money; my claim has no merits”? In that event, the rule applies so as to nullify the claim which he or she would otherwise have; (4) the rule applies only the extent necessary to nullify such enrichment; it by no means restores the claimant to the status quo ante. In Re Clark, above, Walton J was considering a case where the bankrupt had been licensed to carry on business as a petrol and filling service station by Texaco Ltd, but Texaco had withdrawn from the bankrupt all credit facilities and were only prepared to deliver petrol etc on a “cash sale” basis. Postbankruptcy trading between the bankrupt and Texaco took place, Texaco at least having no knowledge of the making of the relevant receiving order (owing to an industrial dispute at the London Gazette). By the time the trustee intervened (ignorant of the post-bankruptcy trading), Texaco had delivered several thousand pounds’ worth of petrol but had received only two-thirds of the value of that petrol. The trustee was thus put in a position

where he could have realised for the benefit of creditors substantially more than if he had taken possession of the business and stood in the shoes of the bankrupt on the date of the making of the relevant receiving order. The trustee was directed not to pursue from Texaco the value of cheques paid over to Texaco after bankruptcy (amounting, as mentioned above, to approximately two-thirds of the total value of petrol supplied after bankruptcy). In Re Country Stores Pty Ltd [1987] 2 Qd R 318, the rule was applied so as to oblige a liquidator to complete a sale of the business of the company in liquidation the propriety of which was doubted, notwithstanding the earlier reluctance of Australian courts to apply the rule expressed in Re Roberts, above and in Westpac Banking Corp v Markovic (1985) 82 FLR 7 (Supreme Court of South Australia). Also, in Re TH Knitwear (Wholesale) Ltd [1988] 1 All ER 860 it was clearly stated that a liquidator in a voluntary liquidation, not being an officer of the court, cannot be affected by the rule. [80,000.80] Litigation funding Champerty and maintenance were the subject of consideration by the Federal Court in Re Movitor Pty Ltd; Ex parte Sims (1996) 64 FCR 380; 136 ALR 643 (Drummond J). There, a liquidator successfully sought approval to enter into a “Cover Court” insurance policy whereby the costs of litigation would be indemnified by an insurer in return for a premium equating with a share of the fruits of the proposed proceedings, if any. Drummond J referred extensively to the power of a trustee in bankruptcy to realise a bankrupt’s cause of action by selling it (even to the discharged bankrupt) in return for a percentage of the fruits. It is clear that both trustees and liquidators may deal with causes of action in a manner which would constitute champertous maintenance on the part of others. The Victorian Court of Appeal affirmed Hansen J’s decision in UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 14 ACLC 1262. In Re Cirillo (1996) 136 ALR 607, Branson J accepted that a trustee in bankruptcy may sell a cause of action to a discharged bankrupt, but the claim must be tenable. Her Honour’s decision on that and other grounds was affirmed on appeal by the Full Court of the Federal Court (Foster, von Doussa and Sundberg JJ) on 16 December 1996. There appears now to be a real trade in causes of actions, but, of course, the market is limited in that the only “licensed” vendors are trustees and liquidators.

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[page 58]

PART I — PRELIMINARY

[80,005] Short title 1 This Act may be cited as the Bankruptcy Act 1966. [s 1 am Act 37 of 1976 s 3]

[80,010] Commencement 2 This Act shall come into operation on a date to be fixed by Proclamation.

[80,015] Parts 3 [s 3 rep Act 216 of 1973 s 3]

[80,017] Repeal 4 (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.

PART IA — INTERPRETATION [Pt 1A am Act 119 of 1987 s 3]

[80,120] Interpretation 5 (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. [def insrt Act 48 of 1998 s 3 and Sch 1]

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. [def insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 44 of 2007 s 3 and Sch 2[1], opn 1 July 2007]

affidavit includes affirmation and statutory declaration. approved bank [def rep Act 48 of 1998 s 3 and Sch 1]

[page 59] approved form means an electronic or other form approved, in writing, by the Inspector-General. [def insrt Act 44 of 1996 s 3 and Sch 1; am Act 34 of 2006 s 3 and Sch 4[1], opn 3 May 2006; Act 44 of 2007 s 3 and Sch 1[1], opn 11 Apr 2007]

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

a company that is, or has been, associated with the person at a (b) time when the company is, or was, as the case may be, a private company. 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. [def insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

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. 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. 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. [def subst Act 144 of 2008 s 3 and Sch 2[11], opn 10 Dec 2008]

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. [def am Act 144 of 2008 s 3 and Sch 2[12], opn 10 Dec 2008]

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). [def insrt Act 174 of 2011 s 3 and Sch 2[142], opn 1 Jan 2012]

[page 60] 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; (c) [repealed] (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.

[def am Act 210 of 1992 s 125 and Sch 2; Act 55 of 2001 s 3 and Sch 3, opn 15 July 2001; Act 8 of 2007 s 3 and Sch 4[2], opn 15 Mar 2007]

confiscation order has the same meaning as in the Proceeds of Crime Act 2002. [def am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

constable means a member or special member of the Australian Federal Police or a member of the Police Force of a State or Territory. [def am Act 155 of 1979 s 3 and Sch]

corporation includes any body corporate. corresponding law has the same meaning as in the Proceeds of Crime Act 2002. [def am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

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. [def insrt Act 44 of 1996 s 3 and Sch 1]

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. [def insrt Act 44 of 1996 s 3 and Sch 1]

debt agreement proposal means a written proposal referred to in subsection 185C(1). [def insrt Act 44 of 1996 s 3 and Sch 1]

[page 61] 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.

[def am Act 44 of 1996 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

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. [def insrt Act 144 of 2008 s 3 and Sch 2[13], opn 10 Dec 2008]

de facto spouse [def rep Act 144 of 2008 s 3 and Sch 2[14], opn 10 Dec 2008]

Deputy Registrar [def rep Act 44 of 1996 s 3 and Sch 1]

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. District [def rep Act 106 of 2010 s 3 and Sch 3[1], opn 15 July 2010]

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. [def am Act 9 of 1992 s 3; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

enforcement process, in relation to a frozen debt, means, in the case of a judgment debt: [page 62] (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 matter [def rep Act 44 of 1996 s 3 and Sch 1]

examinable period has the meaning given by section 139CA.

[def subst Act 33 of 2006 s 3 and Sch 1[2], opn 31 May 2006]

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 Judge, the Deputy Chief Judge, a Judge Administrator or a Senior Judge). Federal Circuit Court means the Federal Circuit Court of Australia. [def insrt Act 13 of 2013 s 3 and Sch 1 item 54, opn 12 Apr 2013]

Finance Minister means the Minister administering the Public Governance, Performance and Accountability Act 2013. [def insrt Act 5 of 2011 s 3 and Sch 5 item [44], opn 19 Apr 2011; am Act 62 of 2014 s 3 and Sch 8 item 10, opn 1 July 2014]

forfeiture order means a forfeiture order made under a proceeds of crime law. [def subst Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

frozen debt means a debt that: (a) is owed by a declared debtor; and [page 63] (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. [def insrt Act 54 of 2009 s 3 and Sch 5[17], opn 1 July 2009]

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. [def am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

interstate pecuniary penalty order has the same meaning as in the Proceeds of Crime Act 2002. [def am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

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 Magistrate 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 (other than the Northern Territory). [def am Act 194 of 1999 s 3 and Sch 7; Act 13 of 2013 s 3 and Sch 1 item 55, opn 12 Apr 2013]

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. [def subst Act 20 of 2005 s 3 and Sch 3, opn 15 Apr 2005; am Act 115 of 2008 s 3 and Sch 2[4], opn 1 Mar 2009]

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. [def subst Act 44 of 1996 s 3 and Sch 1]

modifications includes additions, omissions and substitutions. [page 64] National Personal Insolvency Index means the Index of that name established under the regulations. [def insrt Act 44 of 1996 s 3 and Sch 1]

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. [def insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

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. [def subst Act 144 of 2008 s 3 and Sch 2[15], opn 10 Dec 2008]

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. [def subst Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003; am Act 3 of 2010 s 3 and Sch 1[43], opn 19 Feb 2010]

personal insolvency agreement means a personal insolvency agreement executed under Part X. Note: Section 188A sets out requirements for personal insolvency agreements. [def insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 65] 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. *policy for pure endowment [def rep Act 82 of 1993 s 6]

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. [def insrt Act 131 of 2009 s 3 and Sch 5 item 5, opn 30 Jan 2012]

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. [def insrt Act 131 of 2009 s 3 and Sch 5 item 6, opn 30 Jan 2012]

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. [def insrt Act 131 of 2009 s 3 and Sch 5 item 7, opn 30 Jan 2012]

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. [def insrt Act 131 of 2009 s 3 and Sch 5 item 8, opn 30 Jan 2012]

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. prescribed [def rep Act 44 of 1996 s 3 and Sch 1]

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. [def am Act 9 of 1992 s 3; Act 55 of 2001 s 3 and Sch 3, opn 15 July 2001; Act 123 of 2001 s 3 and Sch 1, opn 11 Mar 2002]

[page 66]

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. [def insrt Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

proceeds of crime order means: (a) a restraining order; or (b) a forfeiture order; or (c) a pecuniary penalty order. [def insrt Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

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. [def insrt Act 62 of 1997 s 3 and Sch 3]

public examination

[def rep Act 115 of 1990 s 4]

registered trustee means a person who is registered under this Act as qualified to act as a trustee. Registrar means: (a) the Registrar, a Deputy Registrar, a District Registrar or a Deputy District Registrar of the Federal Court; or (b) a Registrar of the Federal Circuit Court. [def subst Act 194 of 1999 s 3 and Sch 7; am Act 13 of 2013 s 3 and Sch 2 item 1, opn 12 Apr 2013]

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; [page 67] (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. [def insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; am Act 144 of 2008 s 3 and Sch 2[16], opn 10 Dec 2008]

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. [def insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; am Act 144 of 2008 s 3 and Sch 2[17], opn 10 Dec 2008]

resolution means a resolution passed by a majority in value of the creditors present personally, by telephone, by attorney or by proxy at a meeting of creditors and voting on the resolution. [def am Act 44 of 1996 s 3 and Sch 1]

restraining order means a restraining order made under a proceeds of crime law. [def insrt Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

RSA has the same meaning as in the Retirement Savings Accounts Act 1997. [def insrt Act 62 of 1997 s 3 and Sch 3]

RSA holder has the same meaning as in the Retirement Savings Accounts Act 1997. [def insrt Act 62 of 1997 s 3 and Sch 3]

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 [page 68] (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. [def subst Act 131 of 2009 s 3 and Sch 5 item 9, opn 30 Jan 2012]

sheriff includes any person charged with the execution of a writ or other process. special resolution means a resolution passed by a majority in number and at least three-fourths in value of the creditors present personally, by telephone, by attorney or by proxy at a meeting of creditors and voting on the resolution. [def am Act 44 of 1996 s 3 and Sch 1]

State Court [def rep Act 44 of 1996 s 3 and Sch 1]

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. [def am Act 106 of 2010 s 3 and Sch 4[5], opn 1 Dec 2010]

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. [def insrt Act 144 of 2008 s 3 and Sch 2[18], opn 10 Dec 2008]

Territory, except in the expression “Territory of the Commonwealth”, means the Australian Capital Territory or the Northern Territory of Australia. 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. [def am Act 44 of 1996 s 3 and Sch 2]

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 [page 69]

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. [def am Act 44 of 1996 s 3 and Schs 1, 2]

the Family Court means the Family Court of Australia. the Federal Court means the Federal Court of Australia. the first meeting of creditors [def rep Act 119 of 1987 s 4]

the Official Receiver means any Official Receiver. [def subst Act 106 of 2010 s 3 and Sch 3[2], opn 15 July 2010]

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 repealed Act [def rep Act 44 of 1996 s 3 and Sch 1]

the rules [def rep Act 44 of 1996 s 3 and Sch 1]

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. [def am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

this Act includes the regulations. [def am Act 44 of 1996 s 3 and Sch 1] [subs (1) am Act 121 of 1968 s 2; Act 122 of 1970 s 4; Act 12 of 1980 s 3; Act 21 of 1985 s 3; Act 73 of 1987 s 4; Act 119 of 1987 s 4; Act 8 of 1988 s 35; Act 115 of 1990 s 4; Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (1A) insrt Act 119 of 1987 s 4]

(1B) A reference in this Act to an entity includes, in the case of a trust, a reference to the trustee of the trust. [subs (1B) insrt Act 119 of 1987 s 4]

[page 70] (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. [subs (1C) insrt Act 119 of 1987 s 4]

(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. [subs (2) subst Act 44 of 1996 s 3 and Sch 1]

(3) A person who is not solvent is insolvent. [subs (3) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (4) subst Act 12 of 1980 s 3; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(5) [subs (5) rep Act 13 of 2013 s 3 and Sch 1 item 56, opn 12 Apr 2013] (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. [subs (6) insrt Act 144 of 2008 s 3 and Sch 2[19], opn 10 Dec 2008] SECTION 5 GENERALLY [80,120.2] “associated entity” See Re Simersall (1992) 35 FCR 584; 108 ALR 375. [80,120.3] “forfeiture order” The definition “forfeiture order” was substituted on 1 January 2003 by the Proceeds of Crime (Consequential Amendments and Transitional Provisions) Act 2002 No 86. Before this amendment there was a reference back to the Proceeds of Crime Act 1987; the definition now covers more than one statute. [80,120.5] “unless contrary intention appears” See Brown v Brook (1971) 125 CLR 275. [80,120.10] “Part X” Further definitions relating to Pt X of the Act are found in s 187. [80,120.15] “available act of bankruptcy” See ss 40–42, 44(1)(c) and 115(1) and (2). [80,120.16] “Bankrupt” Section 5 provides that a person is solvent if, and only if, he or she is able to pay all his or her debts as and when they become due and payable and that otherwise the person is insolvent: Dunlop v Fishburn (No 3) [2012] FCA 315; BC201202679 at [29] per Katzmann J. The test for solvency is the cash flow test, rather than a simple “balance sheet” basis. That means that the Court will have regard to any express or implied agreement between debtor and creditor for an extension of time stipulated for payment: Keith Smith East West Transport Pty Ltd (in liq) v Australian Taxation Office (2002) 42 ACSR 501; [2002] NSWCA 264; BC200204577 at [33], Mason P, with whom Handley and Giles JJA agreed. Although this was a case dealing with s 95A of the Corporations Act

2001 (Cth), the definition of solvency in that Act is the same as the definition in the Bankruptcy Act. See at [31] per Katzmann J. [page 71] [80,120.17] “de facto” spouse In Baker & Landon (2010) 238 FLR 210; (2010) 43 Fam LR 675; [2010] FMCAfam 280; BC201001961 at [19] the court draws attention to the many links with other legislation so as to consider the meaning given to this term in this statute. The court’s reference in [21] makes clear that not every factor in the definitions has to be considered: under this statute those factors dealing with economic relationships are likely to be the most relevant. The “statutory context” can best be essayed by quoting several paragraphs of the judgment: [19] Definitions of de facto relationships appear in a myriad of legislative provisions. The variety in wording is apparent and the wide variety of statutory contexts is significant. The definition in the Acts Interpretation Act 1901 at s 22C (which is adopted in many other Acts including the Bankruptcy Act 1966, the Parliamentary Entitlements Act 1990, the Prohibition Of Human Cloning For Reproduction Act 2002 and the Research Involving Human Embryos Act 2002) is substantially the same as that in the Family Law Act, although with s 4AA(2)(g) omitted. In other Commonwealth legislation differently worded definitions appear, for example: the Migration Act 1958 at s 5CB refers to “a mutual commitment to a shared life to the exclusion of all others”; the National Health Act 1953 at s 4 refers to “living with the person on a genuine domestic basis”; the Fair Work Act 2009 at s 12 refers to “a relationship as a couple on a genuine domestic basis”; the Income Tax Assessment Act 1936 at ss 317 and 102AAB refers to “live with each other on a genuine domestic basis in a relationship as a couple”. The Social Security Act 1991 at s 4 provides an extensive definition with respect to couples (over 2000 words), which provides a list of relevant factors in s 4(3) that is very structured: (a) the financial aspects of the relationship, including: (i) any joint ownership of real estate or other major assets and any joint liabilities; and (ii) any significant pooling of financial resources especially in relation to major financial commitments; and (iii) any legal obligations owed by one person in respect of the other person; and (b) the nature of the household, including: (i) any joint responsibility for providing care or support of children; and (ii) the living arrangements of the people; and (iii) the basis on which responsibility for housework is distributed; (c) the social aspects of the relationship, including: (i) whether the people hold themselves out as married to, or in a de facto relationship with, each other; and (ii) the assessment of friends and regular associates of the people about the nature of their relationship; and (iii) the basis on which the people make plans for, or engage in, joint social activities; (d) any sexual relationship between the people; (e) the nature of the people’s commitment to each other, including: (i) the length of the relationship; and (ii) the nature of any companionship and emotional support that the people provide to each other; and

whether the people consider that the relationship is likely to continue indefinitely; (iii) and (iv) whether the people see their relationship as a marriage-like relationship or a de facto relationship. [20] Whilst this list of factors under the Social Security Act has similar factors to the Family Law Act, it also has different factors. The importance of a consideration of the social security rule, its interpretation, and the attendant critical literature, is that it demonstrates: first, that there is a degree of uncertainty in the legislation, which has resulted in a number of amendments of the Social Security Act; and secondly, it is apparent that the context of the legislation is of significant impact in interpreting the provisions. In this respect, it is important to note that the Social Security Act provides for financial support for those in society in need, in contrast to legislation such as the Family Law Act, and in particular the Status of Children Act in Victoria, which regulate the parentage and property rights of parties who enter into relationships. [page 72] [21] The words of s 4AA, making it clear that not every factor is necessarily required to be considered, indicate that the legislature moved away from the very structured approach suggested by French J (as his Honour then was) in Pelka v Secretary, Dept of Family & Community Services [2006] FCA 735; (2006) 151 FCR 546; (2006) 43 AAR 220 with respect to the Social Security Act. Similarly, the legislature’s use of a definition section different to that utilised in the Social Security Act indicates that the two definitions are intended to be different, although both assess similar situations. [22] As a result, it is likely that there will be differences in the relationships covered by the term “de facto” as it appears in various enactments, as a result not only of differences in wording, but the different purposes of the statutory schemes. It may well be that a person is in a relationship sufficient to satisfy s 4AA of the Family Law Act, yet not satisfy the relevant provision of the Social Security Act 1991. As a result, the receipt of a single rate of pension will not be determinative of the question under the Family Law Act, although the circumstances leading to such a pension being granted will be a factor to take into account. [23] It is important to recall the principle of statutory interpretation set out in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; (1998) 153 ALR 490; (1998) 72 ALJR 841; [1998] 8 Leg Rep 41, where McHugh, Gummow, Kirby and Hayne JJ said: [69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed. [24] An example of the express statutory recognition of this principle within one Act can be seen in the Migration Act 1958 at s 5CB where the definition of de facto relationship includes the rider that:

(3) The regulations may make provision in relation to the determination of whether one or more of the conditions in paragraphs (2)(a), (b), (c) and (d) exist. The regulations may make different provision in relation to the determination for different purposes whether one or more of those conditions exist. [25] The result is that the definition must be interpreted in the context of the operation of the Family Law Act …. Although an explanation of the definition requires an exhaustive explanation, Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28; BC9801389 makes this exercise inescapable. [80,120.20] “proceeding” The issue of a bankruptcy notice is a proceeding notwithstanding that it is an administrative act: Re Wheeler & Reynolds; Ex parte Kerr v Crowe (1988) 20 FCR 185. See also Re Brindle; Ex parte F B & F A McMahon Pty Ltd (1992) 35 FCR 506; 108 ALR 470. [80,120.23] “property” In Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1 the question arose as to whether an appellant’s interest in the appeal is “property”. A bankruptcy had intervened in the course of an appeal. The issue before the High Court was whether the appeals were competent, in view of the intervening bankruptcies. The court held unanimously that they were not. The reasoning of the members of the court differed between the majority of Brennan CJ and Gaudron and McHugh JJ and the minority of Dawson and Toohey JJ. The minority thought that the right of appeal conferred by s 24 of the Federal Court of Australia Act 1976 (Cth) was “property” as defined in s 5(1) and vested in the trustee in bankruptcy. The majority disagreed, but held that the bankrupts lacked standing to appeal for a different reason. That reason was that the [page 73] bankrupts had no interest in the judgment against them which would support the institution of appeals in their own names. This was because the judgment debt was a debt provable in the bankruptcies, could be satisfied only out of property vested in the trustee in bankruptcy, and was not payable by the bankrupts themselves. That decision on this point was considered by Lindgren J in Scully v Jones [2002] FCA 1396; BC200206997. The circumstances were similar to Cummings but differed in that the orders were declaratory and injunctive save for the order for costs. His Honour held at [15] that the issue was arguable because that party had an interest, at least in the declaration and injunctions, which would supply locus standi to appeal against them. Yet there is no doubt that the trust status of bankruptcy assets changes the availability of such assets to satisfy debts. In Gambetta Holdings Pty Ltd v City and Suburban Pty Ltd [2013] WADC 3; BC201350030, Registrar Kingsley followed Re Morgan, Pillgrem v Pillgrem (1881) 18 Ch D 93 as authority for the proposition that the only property that may be taken in execution is that property to which the execution debtor is beneficially entitled, and no property of which the execution debtor is only a trustee can be taken. In relation to the question of bankruptcy the Registrar held at [10]: “Whilst the assets may not be taken in execution, in the event of the trustee’s bankruptcy the creditors will be subrogated to the beneficial interest enjoyed by the trustee. It is the event of bankruptcy of the trustee whereby the trustee interests in the trust property pass to the trustee in bankruptcy for the benefit of the creditors”. He cited Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360; 27 ALR 129; 54 ALJR 87; BC7900099 and Agusta Pty Ltd v Provident Capital Pty Ltd (2012) 16 BPR 30,397; [2012] NSWCA 26; BC201201168.

[80,120.24] “judgment debt” The concept of a judgment debt is vital to the enforcement process of bankruptcy. See enforcement process above. The term means persons against whom a final judgment for an amount of money has been obtained in court. See Kuhadas v Gomez [2014] FCCA 1130; BC201404164 at [20] per Judge Manousaridis. A judgment debtor commits an act of bankruptcy (qv) if he fails to comply with a bankruptcy notice demanding payment of the amount constituted by the judgment. A judgment debt constitutes the highest proof of a debt that can be obtained, and thus provides the surest grounds for inferring a judgment debtor’s inability to pay his or her debts when the judgment debtor does not pay the judgment debt in response to a bankruptcy notice issued under the Act. Per Fullagar J in Corney v Brien (1951) 84 CLR 343 at 353; [1951] ALR 525; (1951) 25 ALJR 133: “Generally speaking, a judgment at law for a sum of money creates an obligation of its own force. The pre-existing obligation, which the judgment is intended to enforce, merges in the new obligation so created…”. In most cases courts of bankruptcy accept judgment debts as recording a true debt, and accept a judgment debtor’s failure to pay the judgment debt demanded in a bankruptcy notice as an act of bankruptcy. A judgment debt, however, “is never conclusive in bankruptcy”; it “does not always represent itself as the relevant debt of the petitioning creditor, even though under the general law, the prior existing debt has merged in a judgment”. Per Barwick CJ in Wren v Mahoney (1972) 126 CLR 212 at 224; [1972] ALR 307; (1972) 46 ALJR 163; BC7200360. Courts of bankruptcy, therefore, hold in reserve the power to inquire into whether the judgment debt is in fact based on a true debt. And a bankruptcy court’s determining whether a debt recorded in a judgment records a true debt is known as “going behind the judgment” (qv). [80,120.25] “secured creditor” The holder of an equitable mortgage is a “secured creditor” within the meaning of the Act. See Re Roberts; Ex parte Australian Telecom Employees’ Credit Co-op Ltd (Fed C of A, Sweeney J, 5 August 1982, unreported). The provisions of the Local Government Act crediting a change in favour of a council makes the council a secured creditor: Re St Ledges Cheyne; Ex parte Willoughby Municipal Council (1958) 18 ABC 179. A mortgage given by a debtor in his or her capacity as executor or trustee makes the mortgagee a secured creditor for the purpose of this section, notwithstanding other provisions of the Act such as s 116(2)(a): Re Morris; Ex parte Australia and New Zealand Banking Group Ltd (1991) 29 FCR 1. [page 74] A judgment creditor is not a secured creditor simply by fact of lodging a caveat on a title absent any caveatable interest in that land: Hall v Richards (1961) 108 CLR 84; [1961] ALR 816. [80,120.27] “the property of the Bankrupt” In Baulkham Hills Shire Council v Stankovic (No 6) [2010] NSWLEC 33; BC201001538 Pain J held, in relation to s 5(a)(ii), above (when discussing whether a bankrupt had standing to present a notice of motion in the Land and Environment Court of NSW): [8] Therefore a right of appeal in relation to property is property of the bankrupt as defined in s 5(1), which vests in his or her trustee by s 58(1)(a). This is consistent with the finding in Hedwan v Hannouf [(1997) 140 FLR 229; BC9703786] of Santow J at 231. [9] The operation of the Bankruptcy Act as discussed in Cummins [Cummins v Claremont Petroleum NL (1996) 185 CLR 124; (1996) 137 ALR 1; [1996] HCA 19; BC9602501] to the effect that a bankrupt has no standing to institute an appeal from a judgment and Hedwan that a

bankrupt has no standing to set aside a judgment, combined with UCPR r 6.30(2) confirm that the trustee’s position is correct so that the Respondent does not have standing to pursue his Notice of Motion and it cannot proceed. The Notice of Motion should be dismissed. [80,120.30] “joint property” For a discussion as to the situation relating to property jointly owned by the debtor and another, see Re Rushton; Ex parte National Westminster Bank Ltd v Official Receiver [1972] Ch 197. [80,120.35] “maintenance agreement”, “maintenance order” See [81,900.20]. [80,120.37] “company officer” includes a receiver The definition of “company officer” includes a receiver and manager of property of the corporation appointed under a power contained in an instrument. This definition is the intersection between corporations’ liquidation powers, which operate under the same general principles as individuals’ bankruptcies, and the control over the operations of receivers. All states can deal with the powers receivers have under either trustees’ legislation or the rules of court or both. In regulating the powers of receivers, these jurisdictions frequently deal with bankruptcy matters. In The Commonwealth of Australia v ABC2 Group Pty Ltd (2008) 69 ACSR 228; [2008] NSWSC 1383; BC200811330, Barrett J considered such matters in the immediate context of insolvency: [25] But even if s 447B(2) were not available as a basis for the appointment of receivers as the Commonwealth seeks, there may be a more general basis. The court may appoint a receiver in a wide range of circumstances; indeed, whenever the interests of justice warrant it. Appointments are most often made to protect the subject matter of legal proceedings pending determination of those proceedings by the court. But the jurisdiction is wider than that. There are instances in crossborder insolvency cases where the local court has appointed a receiver to act in aid of a foreign liquidator or trustee in bankruptcy: see for example Dick v McIntosh [2001] FCA 1008. A receiver may be appointed to hold property affected by a lien pending a judicial sale. Receivers have been appointed in a number of cases to collect the assets of an unregistered managed investment scheme and to apply them in winding up the scheme. There is reference in the Western Australian case of McLean v McKinlay [2004] WASC 2 to the possibility of appointing a receiver of the assets of an incorporated association pending election of a governing body capable of acting and taking the affairs of the association in hand. [80,120.50] Insolvency Many useful definitions will not be found in bankruptcy legislation as such, but rather within the Corporations Act 2001 (Cth) which deals with the more commercial aspects of insolvency. A number of these definitions with collections of all principles were the subject of observations by Sulan J of the South Australian Supreme Court in Dwyer v Chicago Boot [page 75] Co Pty Ltd (2011) 82 ACSR 193; [2011] SASC 27; BC201100755. Dealing with this subject the judge drew attention as follows: [13] Insolvency is defined by s 9 of the Act as having the meaning given to it by s 95, which states: (1) 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. (2) A person who is not solvent is insolvent.

[14] Mandie J in ASIC v Plymin (2003) 175 FLR 124 summarised the Court’s approach to determining insolvency. Mandie J observed that the meaning given to ‘insolvency’ is the recognised ‘cash flow test’ of insolvency. Mandie J referred to a passage of A R Keay in which the author states: The cash flow test provides that a company is insolvent when it is unable to pay its debts as they fall due. It is of no consequence, under this test, that assets exceed liabilities. The important point is: can the company pay its way in carrying on its business? The court, in examining whether a company is suffering cash flow insolvency, will consider whether the company is actually paying its debtors”. (At page 207, citing A R Keay “The Insolvency Factor In The Avoidance Of Antecedent Transactions In Corporate Liquidations” (1995) 21 Monash University Law Review 305, 307.) [15] In approaching this test, one cannot simply have regard to the assets and liabilities, as identified in the balance sheet, to determine whether the debts may be paid at some time in the future out of a company’s assets. The test is whether the debtor is presently able to pay its debts with monies actually available. (Bank of Australasia v Hall (1907) 4 CLR 1514, 1528). In Brooks v Heritage Hotel Adelaide, (1996) 20 ACSR 61 the Court observed: It is to be seen that, by its definition of insolvency, the Law poses what has been described in the decided cases as a ‘cash flow’ test, rather that a ‘balance sheet’ test. This aspect must firmly be borne in mind, because it seems to me that, in the course of his submissions counsel for the respondent leant fairly heavily on the latter aspect, albeit in the context of a wider submission related to the need to have a prospective perspective of what were said to be possible, if not probable, future developments. [16] A company may at the same time be insolvent and wealthy. It may have its assets locked up in investments not presently realisable but not have the assets available to it to meet its current liabilities. (Re Tweed Garages Ltd [1962] Ch 406, 410). However, this does not mean that, in order to remain solvent, a trader must have cash ready to cover their commitments as and when they fall due for payment. In Rees v Bank of New South Wales (1964) 111 CLR 666 Barwick CJ said: It is quite true that a trader, to remain solvent, does not need to have ready cash by him to cover his commitments as they fall for payment, and that in determining whether he can pay his debts as they become due regard must be had to his realizable assets. The extent to which their existence will prevent a conclusion of insolvency will depend on a number of surrounding circumstances, one of which must be the nature of the assets and in the case of a trade, the nature of his business. In Sandell v Porter (1996) 115 CLR 666 Barwick CJ observed that it was important not to confuse insolvency with a temporary lack of liquidity. A debtor’s moneys are not limited to the cash resources immediately available, but extend to moneys which can be realised by sale, mortgage or pledge of assets within a relatively short time, and having regard to the amount of debts and to the circumstances, which include the nature of the business. He said: The conclusion of insolvency ought to be clear from a consideration of the debtor’s financial position in its entirety and generally speaking ought not be drawn simply from evidence of a temporary lack of liquidity. It is the debtor’s inability, utilizing such cash resources as he has or can command through the use of his assets, to meet his debts as they fall due which

[page 76] indicates insolvency. Whether the state of his affairs has arrived is a question for the Court and not the one as to which expert evidence may be given in terms though no doubt experts may speak as to the likelihood of any of the debtor’s assets or capacities yielding ready cash in sufficient time to meet the debts as they fall due. [80,120.55] When a debt is due As the usual definition of insolvency means that one is unable to pay one’s debts when they fall due, the question of when a debt is due is important. In Dwyer v Chicago Boot Co Pty Ltd (2011) 82 ACSR 193; [2011] SASC 27; BC201100755 Sulan J summed up the present state of the law at [17]: [17] There has been much discussion about the approach to be taken when considering the question of when a debt is due. [See Tru Floor Service Pty Ltd v Jenkins (No 2) [2006] FCA 632 [45–8]. For a discussion, see also C J Hamilton, ‘An Insolvency Riddle: When Is A Debt Which Is Due Not A Debt Which Is Due And Payable’ (1997) 5 Insolvency Law Journal 78.] The preferred position is that a debt is due when it is legally repayable. The conduct of a creditor in not seeking to recover a debt, or from taking other enforcement action, does not mean the debt is not due and payable. In considering whether a debt is due, the court will look to the legally binding agreement between the parties. Often, creditors will withhold taking action to enforce a debt. This may occur for a variety of reasons, including that a creditor may not wish to put at risk an ongoing commercial arrangement, or the creditor may be prepared to give the debtor time because the creditor believes the debtor has temporary liquidity problems. The court will have regard to commercial reality and, in considering the question, will take into account whether there has been an express or implied agreement between the creditor and debtors to extend the time stipulated for payment, and whether there has been a course of conduct from which it can be concluded that debts are payable, other than as stipulated in the contract. [See Lee Kong v Pilkington (Australia) Ltd (1997) 25 ACSR 103; Pioneer Concrete Pty Ltd v Ellston (1985) 10 ACLR 289; Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; Standard Chartered Bank of Australia Ltd v Antico (Nos 1 & 2) (1995) 38 NSWLR 290.] [footnotes inserted]. [18] In Manpac Industries Pty Ltd v Ceccattini, (2002) 20 ACLC 1304. Young CJ said: “Solvency and insolvency are defined in s 95A of the Corporations Act as meaning a company which is unable to pay all its debts as and when they become due and payable. This, as Lindgren J pointed out in Melbase Corp Pty Ltd v Segenhoe Ltd (1995) 17 ACSR 187, requires a cashflow test rather than a balance sheet test. Again, as His Honour said in that case, when one is applying the cash flow test, it is relevant to take into consideration the relationships between creditor and debtor, any agreement and the course of conduct. In Hamilton v BHP Steel (JLA) Ltd (1995) ACLC 1548] I indicated that that course of conduct may mean that despite what is written on the invoices etc as to time for payment, industry practice or dealings between the parties demonstrate that everyone accepts that debtors will often not pay creditors within normal trading terms. In business circumstances sometimes it is quite necessary in an industry which is experiencing recession because otherwise creditors may not be able to sell their product at all. Even though they would prefer people to stick to their 30 day terms it is better to have recalcitrant debtors than sell no product at all. [emphasis added]

____________________

*Editor’s note: This definition applies to offences committed at any time, whether before or after its commencement on 5 May 2003: see Sch 1 Pt 2 cl 199 of Act 131 of 2002. *Editor’s note: See [79,945] concerning the application of this amendment.

[80,122] Place of origin of bankruptcy and insolvency matters 5AA [s 5AA rep Act 106 of 2010 s 3 and Sch 3[3], opn 15 July 2010]

[80,125] Acting in accordance with a person’s directions or instructions 5A 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 [page 77] 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. [s 5A insrt Act 119 of 1987 s 5]

[80,130] Associated entities: companies 5B (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

has power to dispose of, or to exercise control over the disposal of, (e) 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. [subs (2) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3) insrt Act 44 of 1996 s 3 and Sch 1] [s 5B insrt Act 119 of 1987 s 5; am Act 44 of 1996 s 3 and Sch 1]

[80,135] Associated entities: natural persons 5C (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. [page 78] (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. [subs (2) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3) insrt Act 44 of 1996 s 3 and Sch 1] [s 5C insrt Act 119 of 1987 s 5; am Act 44 of 1996 s 3 and Sch 1]

[80,140] Associated entities: partnerships 5D 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. [s 5D insrt Act 119 of 1987 s 5]

[80,145] Associated entities: trusts 5E 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. [s 5E insrt Act 119 of 1987 s 5]

[80,150] Controlling an entity in relation to a matter 5F (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.

[page 79] (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. [s 5F insrt Act 119 of 1987 s 5]

[80,155] Financial affairs of a company 5G 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; (ii) [repealed]

(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. [s 5G insrt Act 119 of 1987 s 5; am Act 210 of 1992 s 125 and Sch 2; Act 55 of 2001 s 3 and Sch 3, opn 15 July 2001; Act 8 of 2007 s 3 and Sch 4[3] and [4], opn 15 Mar 2007]

[page 80]

[80,157] Financial affairs of a natural person 5H 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. [s 5H insrt Act 119 of 1987 s 5; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[80,160] Financial affairs of a partnership 5J 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. [s 5J insrt Act 119 of 1987 s 5]

[80,165] Financial affairs of a trust 5K 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; [page 81] (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. [s 5K insrt Act 119 of 1987 s 5]

[80,170] Meaning of intent to defraud creditors 6 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. SECTION 6 GENERALLY [80,170.5] Discussion See Barton v DCT (Cth) (1974) 131 CLR 370; 48 ALJR 407.

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[80,175] Statement of affairs for purposes other than Part XI *6A (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. [subs (1) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 106 of 2010 s 3 and Sch 2[1] and Sch 4[6], opn 1 Dec 2010]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 34 of 2006 s 3 and Sch 4[2], [3], opn 3 May 2006]

(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; [page 82] 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. [subs (3) am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (4) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [s 6A subst Act 9 of 1992 s 4] *Editor’s note: Section 51(2) and (3) of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as follows: “51 … (2) Section 6A of the Principal Act as amended by section 4 of this Act applies only in respect of statements of affairs filed after the commencement of section 4 of this Act, and section 6A of the Principal Act continues to apply, despite its repeal, in respect of statements of affairs filed before that commencement. (3) Any rules in force for the purposes of section 6A of the Principal Act immediately before the commencement of section 4 of this Act continue in force for the purposes of: (a) section 6A of the Principal Act as it continues to apply by virtue of subsection (2) of this section; and (b) section 6B of the Principal Act as amended by this Act; but may be amended by rules made under the Principal Act as amended by this Act.” See [79,950] following the Table of Amendments for the full text of transitional provisions.

[80,180] Provision of statement of affairs under Part XI and statement of administration of estate of deceased person *6B (1) [Repealed] [subs (1) rep Act 34 of 2006 s 3 and Sch 4[4], opn 3 May 2006]

(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. [subs (2) subst Act 34 of 2006 s 3 and Sch 4[5], opn 3 May 2006]

(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. [subs (3) insrt Act 44 of 1996 s 3 and Sch 1] [s 6B insrt Act 9 of 1992 s 4; am Act 44 of 1996 s 3 and Sch 1] *Editor’s note: Section 51(2) and (3) of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as follows: “51 … (2) Section 6A of the Principal Act as amended by section 4 of this Act applies only in respect of statements of affairs filed after the commencement of section 4 of this Act, and section 6A of the Principal Act continues to apply, despite its repeal, in respect of statements of affairs filed before that commencement. (3) Any rules in force for the purposes of section 6A of the Principal Act immediately before the commencement of section 4 of this Act continue in force for the purposes of: (a) section 6A of the Principal Act as it continues to apply by virtue of subsection (2) of this section; and (b) section 6B of the Principal Act as amended by this Act; but may be amended by rules made under the Principal Act as amended by this Act.”

See [79,950] following the Table of Amendments for the full text of transitional provisions.

[80,185] Interpretive provisions relating to proceeds of crime orders 6C (1) When property is covered by a restraining order or a forfeiture order 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 [page 83] (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. (2) Satisfaction of pecuniary penalty orders 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. (3) When applications for proceeds of crime orders are finally determined 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. [s 6C insrt Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

PART IB — APPLICATION OF ACT

[Pt IB am Act 119 of 1987 s 6]

[80,275] Application of Act 7 (1) This Act extends to debtors being persons who are not Australian citizens and persons who have privilege of Parliament. [subs (1) am Act 12 of 1980 s 4; Act 44 of 1996 s 3 and Sch 1]

(1A) This Act applies to debtors whether or not they have attained the age of 18 years. [subs (1A) insrt Act 12 of 1980 s 4]

(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. [subs (2) am Act 119 of 1987 s 7]

(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. [subs (3) am Act 119 of 1987 s 7; Act 44 of 1996 s 3 and Sch 1]

(4) [subs (4) rep Act 119 of 1987 s 7] SECTION 7 GENERALLY [80,275.5] Purpose The intent of this section is to make it clear that the provisions of the Act extend to persons who are not Australian citizens so that local assets and overseas movable assets may be available for creditors. See Hall v Woolf (1908) 7 CLR 207. [page 84] In Dannawi v Naoum [2010] FMCA 1003; BC201010174 a Debtor, and the Consul-General of a foreign state sought to avoid substituted service of a petition on the ground that he possessed immunity under the Foreign States Immunity Act 1985 (Cth). Raphael FM summarised the position at [7]: The short point Mr Evatt, on behalf of Mr Naoum, seeks to make is that Mr Naoum is a foreign State or possibly a separate entity of a foreign State. This is not a submission that I accept. The State of Lebanon has not been sued in these proceedings. Nor was it a party to the proceedings brought by Mr Naoum against Mr Dannawi. Mr Naoum may be the Consul-General for Lebanon

but that would not constitute him as a separate entity of that state because it is Mr Naoum’s argument in relation to his own personal immunity that he is an organ of the executive government of Lebanon. He claims that he is a diplomat. He cannot be a separate entity and a diplomat at the same time. To my mind the reference in the Act to separate entity is to some organisation which is clearly acting on behalf of the state in relation to its affairs. So, for example, if there was such a thing as the State of Lebanon Cultural Organisation that might constitute a separate entity of the state.

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[80,278] Application of the Criminal Code 7A 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. [s 7A insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

[80,280] Act to bind the Crown 8 This Act binds the Crown in right of the Commonwealth, of each of the States and of the Northern Territory. [s 8 subst Act 12 of 1980 s 5] SECTION 8 GENERALLY [80,280.5] Rights of Commonwealth to present petition In Re Oskar; Ex parte Commonwealth (1984) 55 ALR 717 it was held that notwithstanding the provisions of s 61 of the Judiciary Act 1903, which limits persons who are authorised to bring suits in the name of the Commonwealth, s 8 has the effect of defining “creditor” to include any juristic person to whom a debt is owed and that the Commonwealth falls within that category of persons.

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[80,285] Laws of States and Territories not affected by Act 9 (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. (2) [subs (2) rep Act 12 of 1980 s 6] (3) [subs (3) rep Act 12 of 1980 s 6] (4) [subs (4) rep Act 12 of 1980 s 6]

PART II — ADMINISTRATION DIVISION 1 — GENERAL [Div 1 am Act 12 of 1980 s 7]

[80,385] Delegation by Minister or Secretary 10 (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. [page 85] (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. [def am Act 5 of 2011 s 3 and Sch 7 item [30], opn 19 Apr 2011] [subs (7) am Act 115 of 1990 s 4] [s 10 subst Act 119 of 1987 s 8]

[80,390] Inspector-General in Bankruptcy 11 (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. [subs (2) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3) insrt Act 44 of 1996 s 3 and Sch 1]

(4) The Inspector-General may by signed instrument delegate to an authorised employee all or any of the powers and functions of the InspectorGeneral under this Act. [subs (4) insrt Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[80,395] Functions of Inspector-General 12 (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 InspectorGeneral 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 [page 86]

(ba)

(bb)

(bc)

(c)

(d)

(vi) property in relation to which the trustee is the controlling trustee under an authority given under section 188; and may make such inquiries and investigations as the InspectorGeneral 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 XI; 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 may make such inquiries and investigations as the InspectorGeneral thinks fit with respect to any conduct of an administrator that relates to a debt agreement; and may make such inquiries and investigations as the InspectorGeneral thinks fit with respect to whether a person has committed an offence against this Act; and 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 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.

[subs (1) subst Act 12 of 1980 s 8; am Act 21 of 1985 s 4; Act 119 of 1987 s 9; Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 106 of 2010 s 3 and Sch 2[2], opn 1 Dec 2010]

(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. [subs (1A) insrt Act 21 of 1985 s 4; Act 44 of 2007 s 3 and Sch 1[2], [3], opn 11 Apr 2007]

(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. [subs (1BA) insrt Act 119 of 1987 s 9; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 44 of 2007 s 3 and Sch 1[4], opn 11 Apr 2007; Act 106 of 2010 s 3 and Sch 2[3], opn 1 Dec 2010]

(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. [subs (1B) insrt Act 21 of 1985 s 4; am Act 44 of 1996 s 3 and Sch 1; Act 44 of 2007 s 3 and Sch 1[4], opn 11 Apr 2007; Act 106 of 2010 s 3 and Sch 2[3], opn 1 Dec 2010]

(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 [page 87] (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. [subs (1C) insrt Act 73 of 1987 s 5; am Act 174 of 2011 s 3 and Sch 2[143], opn 1 Jan 2012]

(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. [subs (1D) insrt Act 44 of 2007 s 3 and Sch 1[5], opn 11 Apr 2007]

(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. [subs (1E) insrt Act 44 of 2007 s 3 and Sch 2[2], opn 1 July 2007]

(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. [subs (1F) insrt Act 44 of 2007 s 3 and Sch 2[2], opn 1 July 2007]

(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. [subs (2) am Act 12 of 1980 s 8; Act 21 of 1985 s 4; Act 168 of 1986 s 3; Act 44 of 1996 s 3 and Schs 1, 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 44 of 2007 s 3 and Sch 1[6], opn 11 Apr 2007]

(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 [page 88] 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. [subs (2A) insrt Act 106 of 2010 s 3 and Sch 2[4], opn 1 Dec 2010]

(2B) The period specified in a notice given under subsection (2A) must be at least 14 days after the notice is given. [subs (2B) insrt Act 106 of 2010 s 3 and Sch 2[4], opn 1 Dec 2010]

(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. [subs (2C) insrt Act 106 of 2010 s 3 and Sch 2[4], opn 1 Dec 2010]

(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). [subs (2D) insrt Act 106 of 2010 s 3 and Sch 2[4], opn 1 Dec 2010]

(2E) Subsection (2A) does not limit the application of subsection (2) in relation to an inquiry or investigation under paragraph (1)(bc). [subs (2E) insrt Act 106 of 2010 s 3 and Sch 2[4], opn 1 Dec 2010]

(3) [subs (3) rep Act 44 of 1996 s 3 and Sch 1] **(4) The Inspector-General: (a) is entitled to attend any meeting of creditors held under this Act; and

(b) subject to section 64ZA, is entitled to participate in any such meeting as the Inspector-General thinks fit. [subs (4) insrt Act 9 of 1992 s 5; am Act 44 of 1996 s 3 and Sch 1] *Editor’s note: Subsection (2)(b) applies only to authorities given under s 188 of the Bankruptcy Act 1966 after 16 December 1996. The paragraph as it stood can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney 1996 ed at [80,395]. **Editor’s note: Section 51(4) of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as follows: “51 … (4) Subsection 12(4) of the Principal Act as amended by this Act: (a) applies in respect of all meetings held after the commencement of that subsection; and (b) in respect of a meeting to which section 64ZA of the Principal Act as amended by this Act does not apply because of subsection (5) of this section, so applies as if section 64ZA applied to that meeting.” See [79,950] following the Table of Amendments to this Act for the full text of transitional provisions.

[80,400] The Australian Financial Security Authority 13 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 [page 89]

the purposes of the Australian Financial Security Authority include (e) the functions of the Inspector-General referred to in subsection 11(2) and section 12. [s 13 insrt Act 62 of 2014 s 3 and Sch 6 item 31, opn 1 July 2014]

[80,405] Registrars and Deputy Registrars 14 [s 14 rep Act 44 of 1996 s 3 and Sch 1]

[80,410] Stamps of Registrars 14A [s 14A rep Act 44 of 1996 s 3 and Sch 1]

[80,415] Official Receivers 15 (1) There is to be such number of Official Receivers as the Minister thinks necessary. [subs (1) subst Act 106 of 2010 s 3 and Sch 3[5], opn 15 July 2010]

(2) [subs (2) rep Act 44 of 1996 s 3 and Sch 1] (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. [subs (4) subst Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (5) subst Act 44 of 1996 s 3 and Sch 1] SECTION 15 GENERALLY [80,415.5] Official Receiver — officer There is a distinction between the powers of the Official Receiver and those of “officers” defined in s 5: Winton v Jolliffe (1988) 78 ALR 187.

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[80,420] Appointment of Inspector-General and Official Receivers

16 The Inspector-General and each Official Receiver shall be appointed by the Minister. [s 16 am Act 12 of 1980; Act 21 of 1985 s 6; Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[80,425] Acting Inspector-General and Acting Official Receivers 17 *(1) The Minister may appoint a person to act as Inspector-General: (a) during a vacancy in the office of Inspector-General; or [page 90] (b) during any period, or during all periods, when the InspectorGeneral 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. [subs (1) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 46 of 2011 s 3 Sch 2[289], opn 27 Dec 2011]

*(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. [subs (2) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 46 of 2011 s 3 Sch 2[289], opn 27 Dec 2011]

(3) [subs (3) rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] (4) [subs (4) rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] (5) [subs (5) rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] (6) [subs (6) rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] (7) [subs (7) rep Act 46 of 2011 s 3 Sch 2[290], opn 27 Dec 2011] [s 17 subst Act 12 of 1980 s 12; am Act 21 of 1985]

*Editor’s note: Schedule 2 Pt 2, cl 202 of Act 131 of 2002 provides as follows: “202 An appointment in force under section 17 of the Bankruptcy Act immediately before the commencing time continues in effect after the commencing time as if it had been made under that section as amended by this Act. However, nothing in this item is taken to alter the time when the appointment was made.”

[80,430] Acting Registrars and Deputy Registrars 17A [s 17A rep Act 44 of 1996 s 3 and Sch 1]

[80,435] Functions of Registrar may be exercised by certain officials 17AA [s 17AA rep Act 44 of 1996 s 3 and Sch 1]

[80,440] Arrangements for services of State and Northern Territory Magistrates 17B (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 Magistrates of the Territory. [s 17B insrt Act 12 of 1980 s 12]

[80,445] The Official Trustee in Bankruptcy 18 (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. [subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(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. [page 91] (3) [subs (3) rep Act 44 of 1996 s 3 and Sch 1] (4) The Official Trustee shall have such seals as the Minister directs by writing under his or her hand. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) The designs of the seals of the Official Trustee shall be as determined by the Minister by writing under his or her hand. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(6) [subs (6) rep Act 168 of 1986 s 3] (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. (8) The Official Receiver may exercise the powers, and perform the functions, of the Official Trustee. [subs (8) subst Act 106 of 2010 s 3 and Sch 3[6], opn 15 July 2010]

(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. [subs (8AA) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (8A) insrt Act 168 of 1986 s 3; am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (8B) subst Act 44 of 1996 s 3 and Sch 1; am Act 106 of 2010 s 3 and Sch 3[7], opn 15 July 2010]

(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. [subs (8C) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (8D) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (8E) insrt Act 106 of 2010 s 3 and Sch 3[8], opn 15 July 2010]

[page 92] (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. [subs (9) subst Act 168 of 1986 s 3; am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (10) subst Act 168 of 1986 s 3; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(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. [s 18 subst Act 12 of 1980 s 12; am Act 21 of 1985 s 9] SECTION 18 GENERALLY [80,445.5] Generally The Official Trustee is by operation of s 160 automatically appointed the trustee of a bankrupt estate in circumstances where there is no consent by a registered trustee. If at the time a debtor becomes bankrupt a registered trustee has consented to act as the trustee of the estate of the debtor and the consent has not been revoked, the registered trustee becomes the trustee of the estate of the debtor: s 156A(3).

____________________

[80,447] Public Governance, Performance and Accountability Act 2013 does not apply to the Official Trustee 18AA 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. [s 18AA subst Act 62 of 2014 s 3 and Sch 8 item 11, opn 1 July 2014]

[80,450] Liability of the Official Trustee 18A (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 [page 93] (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; (f) [repealed] as an individual would be subject if the individual had done, or omitted to do, that act as such a trustee. [subs (1) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 1]

(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. [s 18A insrt Act 12 of 1980 s 12] SECTION 18A GENERALLY [80,450.5] Protection of trustees in bankruptcy from personal liability By virtue of s 139 a trustee is not personally liable for any loss or damage arising from the seizure or disposal of goods or for the costs of proceedings taken in respect of the seizure or disposal of goods unless the court in which the claim is made is of the opinion the trustee has been guilty of negligence in respect of the seizure or disposal. The question of whether a person claiming loss or damage arising from the seizure or disposal of goods has a right to claim out of the bankrupt estate, as opposed to from the trustee generally, is different. While s 82 sets out the priority in which payments are to be made it has been held that the court has sufficient power to award damages for conversion or wrongful detention to be paid out of the assets of the estate: Re Hutton; Ex parte Mediterranean Machine Operations Ltd v Haigh [1969] 2 Ch 201. There is some authority to support the proposition that despite the protection afforded by the Act a trustee owes a duty of care to all creditors and if that duty is breached is liable in negligence for a claim for the loss suffered by them: see Ex parte Shaw; Re Howard & Gibbs (1822) 1 GI & J 127 at 156. The duties of a trustee in bankruptcy were summarised in Adsett v Berlouis (1992) 37 FCR 201 at 208–9; 109 ALR 100 at 107–8: “The trustee is bound to administer [a bankrupt] estate in accordance with the Bankruptcy Act … The trustee has a dual function: first, to administer the estate in the interest of the creditors and the [page 94] bankruptcy; secondly, to exercise, as a public duty and for the public welfare, certain powers given, and duties imposed, under the Act … The conduct of the trustee is subject to the supervision of the court … and a trustee in bankruptcy has historically been regarded as an officer of the relevant court … A trustee in bankruptcy who acts for remuneration is under a duty of care greater than that of a gratuitous trustee … A trustee under the general law must exercise judgment so as to save the estate unnecessary expenditure of money … A trustee in bankruptcy is in no different position. The discharge of a public duty imposed by the Act is to be performed conformably with the requirements of that duty, but also conformably with the trustee’s obligation to administer the estate in such a manner as to maximise the return from estate assets, and thereby to maximise satisfaction of the creditors’ claims and any possible surplus for the bankrupt.” The court approved the following passage from Mannigel v Aitken (1983) 77 FLR 406 at 408–9:

“In Re Brogden [(1888) 38 Ch D 546] Lord Justice Fry said at 571: ‘A trustee undoubtedly has a discretion as to the mode and manner, and very often as to the time in which or at which, he shall carry his duty into effect. But his discretion is never an absolute one. It is always limited by — the dominant duty — the guiding duty of recovering, securing and duly applying the trust fund; and no trustee can claim any right of discretion which does not agree with that paramount obligation.’ “Where an order is sought that the trustee be removed and to make good the losses suffered by the estate, it must be established that the trustee has been guilty of a breach of duty to act ‘diligently and prudently in regard to that business of the trust’: see Riley J in Re Alafaci [(1976) 9 ALR 262] at 285 … “[A] trustee must take all reasonable and proper measures to obtain possession of the trust property and to get in all debts and funds due to the trust estate, and to preserve it, and to secure it from loss. He must take reasonable precautions to see the property is not stolen or lost by default. The trustee is bound to execute the trust with fidelity and reasonable diligence and ought to conduct its affairs in the same manner as an ordinary prudent man of business would conduct his own affairs. But beyond this he is not bound to adopt further precautions …” A trustee in bankruptcy, said the court in Adsett v Berlouis, “is governed by the general law relating to trustees save where the position of the trustee is modified by the Bankruptcy Act or [Regulations]”. See also Cheesman v Waters (1997) 77 FCR 221; 148 ALR 21. Adsett v Berlouis was followed in Donkin v Official Trustee [2003] QSC 401; BC200307132 by Chesterman J. In that case at [36] his Honour was careful to emphasise the difference between the official trustee who had to discharge a public duty, and a trustee under the general law who had an obligation to save the estate unnecessary expenditure. The official trustee’s duty is to act within the requirement to secure, first, the estate for the creditors, and, then, to direct any surplus for the benefit of the bankrupt. [80,450.10] Right to be reimbursed — subs (3) A trustee as a trustee is entitled as a right to full indemnity out of the trust estate for all costs and expenses incurred by him or her in respect of the administration of the trust.

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[80,455] Duties etc of trustee 19 (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; (d) giving information about the administration of the estate to a creditor who reasonably requests it;

determining whether the bankrupt has made a transfer of property (e) that is void against the trustee; (f) taking appropriate steps to recover property for the benefit of the estate; [page 95] (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. [subs (1) subst Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(1A) [subs (1A) rep Act 44 of 1996 s 3 and Sch 1] (1B) [subs (1B) rep Act 44 of 1996 s 3 and Sch 1] (1C) [subs (1C) rep Act 44 of 1996 s 3 and Sch 1] (1D) [subs (1D) rep Act 44 of 1996 s 3 and Sch 1] (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. [subs (2) am Act 74 of 1981 s 123] SECTION 19 GENERALLY [80,455.5] Personal liability of trustee See [80,450.5] concerning the question of the personal liability of trustees in bankruptcy. This section was applied in Rambaldi (The Trustee of the Estate of Atkinson, a Bankrupt) v Woodward [2012] NSWSC 434; BC201203148. That case concerned an application under s 66G of the Conveyancing Act (NSW) to sell jointly owned property.

[80,455.10] The relationship between bankrupt and trustee In Samootin v Official Trustee in Bankruptcy (No 2) [2012] FCA 316; BC201201877 Katzmann J said: [25] The relationship between bankrupt and trustee in bankruptcy is a creature of statute: cf Registrar of the Accident Compensation Tribunal v FCT (1993) 178 CLR 145 at 175. A trustee in bankruptcy performs a dual function: to administer the estate in the interests of creditors and the bankrupt, and to exercise its powers and duties under the Act as a public duty and for the public welfare: Adsett v Berlouis (1992) 37 FCR 201 at 208. The statutory duties of the Official Trustee (set out in s 19 of the Act) include administering the estate in the interests of creditors and, in the event of there being a surplus, the bankrupt. [26] Unlike the trustee/beneficiary relationship there is no identity of interest between the bankruptcy trustee and the bankrupt in all aspects of the administration of the bankrupt estate. In the trustee/beneficiary relationship, every step the trustee takes must be in furtherance of the beneficiary’s interest; it is that identity of interest upon which the joint privilege is based. In contrast, the Official Trustee acts in furtherance of its statutory duties, which may not always coincide with the interests of the bankrupt. In this particular case, the individual interests of the Official Trustee and Ms Samootin were potentially adverse to each other. [27] It follows that the claim of joint or common interest privilege must fail.

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[80,460] Power of investigation of bankrupt’s affairs 19AA (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. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) [subs (2) rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 19AA subst Act 44 of 1996 s 3 and Sch 1]

[page 96]

[80,465] Liability of Inspector-General, Official Receivers etc 19A (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. [subs (1) am Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (2) am Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (3) am Act 44 of 1996 s 3 and Schs 1, 2] [s 19A insrt Act 12 of 1980 s 14; am Act 44 of 1996 s 3 and Sch 1]

[80,470] Officers to act in aid of each other 19B [s 19B rep Act 44 of 1996 s 3 and Sch 1]

[80,475] Records, returns and bank accounts 20 [s 20 rep Act 44 of 1996 s 3 and Sch 1]

DIVISION 2 — COMMON INVESTMENT FUND [Div 2 insrt Act 12 of 1980 s 16]

[80,525] Interpretation 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 continued in existence by section 20G. [def insrt Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

Equalization Reserve [def rep Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005] [s 20A insrt Act 12 of 1980; am Act 168 of 1986 s 3]

[80,530] 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 subsection (8) applies) received by the Official Trustee after the commencement of this section shall be paid into the Common Fund. [page 97] (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. [subs (4) am Act 168 of 1986 s 3 subs (4); Act 48 of 1998 Sch 1]

(5) [subs (5) rep Act 106 of 2010 s 3 and Sch 3[9], opn 15 July 2010] (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. [subs (7) am Act 44 of 1996 s 3 and Sch 1]

(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. [s 7A insrt Act 44 of 2007 s 3 and Sch 1[7], opn 11 Apr 2007]

(8) This subsection applies to moneys held or received by the Official Trustee: (a) under a direction given, or order made, under section 50; or (b) [repealed] (c) as the controlling trustee in relation to a debtor whose property is subject to control under Division 2 of Part X. (d) [repealed] (e) [repealed] [subs (8) am Act 168 of 1986 s 3]

[80,535] Investment Board 20C [s 20C rep Act 168 of 1986 s 3]

[80,540] Investment of money 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; 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. [subs (1) am Act 11 of 1997 s 3 and Sch 1; Act 48 of 1998 Sch 1]

(2) [subs (2) rep Act 168 of 1986 s 3] (3) [subs (3) rep Act 168 of 1986 s 3] [page 98]

(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). [subs (4) am Act 168 of 1986 s 3; Act 48 of 1998 Sch 1]

(5) [subs (5) rep Act 44 of 1996 s 3 and Sch 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. [subs (8) am Act 119 of 1987 s 12; Act 48 of 1998 Sch 1]

[80,543] Borrowing for the Common Fund 20E (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; [page 99] 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. [subs (1) am Act 168 of 1986 s 3; Act 48 of 1998 Sch 1]

(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. [subs (2) am Act 168 of 1986 s 3; Act 44 of 1996 s 3 and Sch 2]

(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.

[80,545] Moneys in Common Fund not held on account of particular estates etc 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 or fund. [subs (1) am Act 168 of 1986 s 3]

(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. [subs (2) am Act 168 of 1986 s 3]

(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. [subs (3) am Act 168 of 1986 s 3]

(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. [subs (4) am Act 168 of 1986 s 3]

(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. [subs (5) am Act 168 of 1986 s 3]

(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. [subs (6) am Act 168 of 1986 s 3]

(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. [subs (7) am Act 168 of 1986 s 3]

(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). [subs (8) subst Act 168 of 1986 s 3]

[page 100]

[80,550] Common Investment Fund Equalization Account 20G (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. [s 20G subst Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005; am Act 62 of 2014 s 3 and Sch 8 item 12, opn 1 July 2014]

[80,555] Credits to and debits from the Equalization Account 20H (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 InspectorGeneral determines that any amounts are not so required, the InspectorGeneral may direct that the amounts not so required, or any part of those amounts, are to be debited from the Equalization Account. [subs (5) am Act 57 of 2007 s 3 and Sch 2[2]–[3], opn 16 Apr 2007]

(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. [s 20H subst Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

[80,560] Interest on moneys in Common Fund payable only in certain circumstances 20J (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 [page 101] (ii) the trustee of a personal insolvency agreement; (iii) [repealed] 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. [subs (1) subst Act 168 of 1986 s 3; am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(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. [subs (2) am Act 168 of 1986 s 3; Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (3) am Act 168 of 1986 s 3]

(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. [subs (3A) insrt Act 168 of 1986 s 3]

(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; [page 102] 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. [subs (4) subst Act 168 of 1986 s 3; am Act 44 of 1996 s 3 and Sch 1]

(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. SECTION 20J GENERALLY [80,560.5] “interest … at the rate prescribed” — s 20J(2) See Re Estate of Davis (1985) 63 ALR 403, where the registrar directed the payment of interest for a period which commenced before the

interest rate was prescribed. The court held the clear intent of s 20J is that the registrar’s discretion in this respect ought to be unfettered and that, while no direction to pay could be made until a rate was prescribed, once it was, it was to be applied to all cases which came before the registrar where the registrar was required to exercise the discretion under this subsection: Re Estate of Davis, above at 406 per Sheppard J. [80,560.10] Prescribed rate The prescribed rate for the purposes of s 20J is set out in reg 2.01 of the Bankruptcy Regulations (7% pa). [80,560.20] Payment of interest — s 20J The Inspector-General is now the official empowered to direct the payment of interest under s 20J. The office of Registrar in Bankruptcy was abolished on 16 December 1996.

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PART III — COURTS DIVISION 1 — THE FEDERAL COURT OF BANKRUPTCY [Repealed] [Div 1 rep Act 44 of 1996 s 3 and Sch 1]

DIVISION 2 — JURISDICTION AND POWERS OF COURTS IN BANKRUPTCY

[80,735] Bankruptcy courts 27 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. [s 27 am Act 44 of 1996 s 3 and Sch 1; Act 194 of 1999 s 3 and Sch 7; Act 20 of 2005 s 3 and Sch 1, opn 18 Sep 2005; Act 13 of 2013 s 3 and Sch 2 item 1, opn 12 Apr 2013] SECTION 27 GENERALLY [80,735.2] General The Federal Court and the Federal Magistrates Court now have concurrent jurisdiction in bankruptcy, exclusive of all other courts. See generally Sutherland v Brien (1999) 149 FLR 321; [1999] NSWSC 155; BC9900755; Mechtler v P & E Phontos Pty Ltd [1998] NSWSC

[page 103] 513 and Geia v Palm Island Aboriginal Council (1999) 152 FLR 135; [1999] QCA 389; BC9905981. As to the effect of Re Wakim; Ex parte McNally (1999) 198 CLR 511; 163 ALR 270; [1999] HCA 27; BC9903189 on bankruptcy matters, see: Scott v Bagshaw (2000) 99 FCR 573; [2000] FCA 816; BC200003274; Re Fuller; Wily v Fuller [1999] FCA 1811; BC9908500; Lynn v White (2000) 171 ALR 217; [2000] FCA 429; BC200001584. Black J of the Supreme Court of NSW employs an elegant summary of the application of this section in Barwick v Goodridge (2011) 255 FLR 245; [2011] NSWSC 1233; BC201110289 at [8]: … s 27(1) of the Bankruptcy Act 1966 (Cth) relevantly provides that the Federal Court of Australia and the Federal Magistrates Court have concurrent jurisdiction in bankruptcy and that jurisdiction is exclusive of the jurisdiction of all Courts other than specified jurisdiction of the High Court and the Family Court. The term “bankruptcy” is defined in s 5, in relation to jurisdiction or proceedings, as any jurisdiction or proceedings “under or by virtue of the Bankruptcy Act and the term “proceeding” means a proceeding under the Bankruptcy Act. Section 37(1)(f) of the Bankruptcy Act in turn deals with the exercise of the Federal Court’s jurisdiction and refers, inter alia, to applications to declare for or against the title of the trustee in bankruptcy to any property. The same learned judge made the following observations with regard to the concurrency of jurisdiction: [9] In Sutherland v Brien [1999] NSWSC 155, Austin J observed that this Court retained jurisdiction where the relevant proceedings were not themselves under or by virtue of the Bankruptcy Act but were within the Court’s general jurisdiction, and in those circumstances the proceedings were not within the jurisdiction in bankruptcy which Bankruptcy Act s 27 vested exclusively in the Federal Court, even if an issue arose in them as to the proper construction and application of the Bankruptcy Act. In Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245 at 253, the Supreme Court of Queensland held that it had jurisdiction to decide a question as to the trustee in bankruptcy’s title to a wrongful dismissal action, although that question could also have been decided by the Federal Court under Bankruptcy Act s 37(1)(f). [10] In Scott v Bagshaw (2000) 99 FCR 573, the Full Court of the Federal Court held that Bankruptcy Act s 31(1)(f) elucidated what fell within “bankruptcy” as defined in Bankruptcy Act s 5(1) and used in Bankruptcy Act s 27(1). The Court held that applications with the effect of declaring for or against the title of a trustee in bankruptcy to property would fall within the jurisdiction in bankruptcy which is exclusively vested in the Federal Court. The Court distinguished Sutherland v Brien and observed that the effect of the order sought in those proceedings would be a declaration made against the title of the trustees in bankruptcy, which would have a necessary adverse effect on that title and would fall within the jurisdiction in bankruptcy. And it may be said that the same observations would apply to other courts possessing similar jurisdiction including the Supreme Courts of the states. [80,735.4] Analysis In Anderson v Peldan (2004) 212 ALR 291; 183 FLR 354; [2004] QSC 335; BC200406321 Philippides J provided this analysis of s 27(1): [10] … The meaning of “jurisdiction in bankruptcy” is informed by the definition of “bankruptcy” in s 5(1) of the Act which provides that “bankruptcy, in relation to jurisdiction or proceedings, means any jurisdiction or proceedings under or by virtue of this Act”.

[11] The concurrent jurisdiction of the Federal Court and the Federal Magistrates Court “in bankruptcy” is thus expressed by s 27(1) to be “exclusive of the jurisdiction of all other courts other than the jurisdiction of the High Court …” and that jurisdiction is identified by s 5(1) as “any jurisdiction … under or by virtue of this Act…” [12] Counsel for the respondents placed particular reliance on Sutherland v Brien. The issue for determination in that case was whether arrangements made by a director and his wife with the [page 104] administrator of a company were void against their trustees in bankruptcy under s 120 of the Act. Austin J held that the matter was not one within the exclusive jurisdiction of the Federal Court, stating (at 323): Here the proceedings arise out of claims to a fund held in a trust account. The proceedings have been brought for a determination of those claims and for orders as to the payment of the fund … the proceedings themselves are not “proceedings under or by virtue of” the Bankruptcy Act. Rather, they are proceedings which invoke the Court’s well-established jurisdiction to determine and declare rights to property and make orders as to its destination. Consequently, these proceedings do not fall within the definition of “bankruptcy” in relation to jurisdiction or proceedings, and do not fall within the “jurisdiction in bankruptcy” which s 27(1) vests exclusively in the Federal Court. [80,735.6] Federal Magistrates’ Court-Constitutional issues In at least one bankruptcy case, Capital Finance Australia Ltd v Vellar [2012] FMCA 285; BC201202061 a party has raised Constitutional issues relating to the jurisdiction of federal magistrates. The objections were related to the remuneration of magistrates as against federal judges. In an earlier decision, Srinivasan v Bank of Western Australia Ltd [2012] FCA 319; BC201201710, Smith FM said at [56] in that case: Nor, in my opinion, if the contended constitutional implication is to be met by a duty on the Governor-General to provide for judicial pensions in a determination under Sch 1 cl 8 of the Federal Magistrates Act, would it be “required or justified” to imply invalidity of appointments of Federal Magistrates in the absence of performance of that duty (cf Gleeson CJ in Bradley’s Case (supra) at [9], and the judgment of the plurality at [65]). And proceeded to follow that decision. Furthermore, His Honour noted that the High Court in Bienstein v Bienstein (2003) 195 ALR 225; 30 Fam LR 488; [2003] HCA 7; BC200300216 had warned against an over-precipitate use of s 40(1) of the Judiciary Act in these words: [45] There is no basis on which this Court could remove the proceedings identified by Mrs Bienstein even if the Court thought that the issues she seeks to raise would in other circumstances justify an order for removal. Orders for removal interfere with the processes of the courts hearing the proceedings sought to be removed. Only where the issues are important and require this Court’s urgent decision should the Court make an order for removal. Not only do orders removing proceedings interrupt the processes of the lower courts but they deny this Court the benefit of the reasons of the lower courts on the constitutional issues and allow parties to by-pass the special leave and leave requirements of the Judiciary Act. The s 40(1) power to remove is not intended to convert this Court into a court exercising a general supervisory jurisdiction over lower courts. As Hayne J observed in the removal proceedings:

It may be readily accepted that this Court has, as one of its fundamental role that, as final court of appeal for this country, and in its original jurisdiction, particularly under section 75(b), of ensuring application of the rule of law, particularly in the judicial system of Australia. That is not to be done, however, as if the court were general judicial ombudsman. In particular the powers under section 40(1) the Judiciary Act not be exercise save for the evident purpose for which they are the meeting removal into this court causes, or pass cause, which raise constitutional issues ripe for decision. [80,735.7] State courts Heenan J of the Supreme Court of WA in Rodway v White [2009] WASC 201; BC200906244 dealt with the important question of whether, as His Honour put it (at [1]), whether “an undischarged bankrupt is obliged to disclose to his trustee after-acquired property purchased with income which the bankrupt was permitted to retain for his own use by reasons of the operation of Pt VI Div 4B of the Bankruptcy Act”. The case also dealt with the even more important question of whether the Magistrates Court of WA had federal jurisdiction and whether it had jurisdiction over bankruptcy offences. The questions [page 105] required examination of s 76 of the Constitution as well as s 27 of the Bankruptcy Act. As to the question of federal law, his Honour applied, inter alia, the judgment of McLure JA in Director of Public Prosecutions (WA) v Mansfield (2008) 35 WAR 431; 246 ALR 186; [2008] WASCA 5; BC200800075 at [110] where her Honour said: The interpretation of a law of the Commonwealth does not without more involve the exercise of federal jurisdiction: Felton v Mulligan (1971) 124 CLR 367, 382–383; LNC Industries Ltd v BMW (Aust) Ltd (1983) 151 CLR 575 at 581. It is sufficient but not essential for the cause of action or form of relief to owe its existence to a federal law. A matter will also arise under a federal law if a right or duty in question in the matter owes its existence to a federal law or depends upon such a law for its enforcement or is the source of a defence to the application: Felton v Mulligan (408). Federal jurisdiction will be attracted if the court finds it necessary to decide, as a step in a proceeding, whether a right or duty based in federal law exists: Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 476. But, as Heenan J pointed out at [10], the question before him was not merely federal jurisdiction but also bankruptcy jurisdiction pursuant to s 27. The test was expressed by Greenwood J in Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380; 251 ALR 19; [2008] FCAFC 172; BC200808936, where his Honour said, with respect to s 27, at [80]–[81]: [80] The Parliament has thus invested exclusive jurisdiction ‘in bankruptcy’ in the identified courts for the purposes of ss 71, 76(ii) and 77(ii) of the Constitution. The exclusive jurisdiction is a jurisdiction ‘in bankruptcy’ which means ‘in relation to jurisdiction or proceedings, any jurisdiction or proceedings under or by virtue of the [Bankruptcy Act] (s 5)’. [81] The investing of exclusive jurisdiction in bankruptcy in the nominated s 27 courts effects a repeal of the general investing of federal jurisdiction in State courts within the limits of their several jurisdictions by s 39(2) of the Judiciary Act having regard to ss 71, 76(i) and 77(i) of the Constitution, in matters arising under a law of the Commonwealth, to the extent any jurisdiction or proceeding arises under or by virtue of the Bankruptcy Act. As his Honour then put the matter at [26] after reviewing the authorities:

I am satisfied that I should accept that jurisdiction has effectively been conferred both upon the Magistrates Court and upon this court. It is perhaps unfortunate that there is any scope at all for any doubts upon such a fundamental and basic proposition yet, as the views taken in Meriton Apartments Pty Ltd v Industrial Court of New South Wales (above) illustrate, the effect of s 27 of the Bankruptcy Act is not as clear and obvious as its apparently unequivocal language might suggest. Dealing with the merits of the appeal at [75], again after a thorough review of the authorities his Honour said: [75] In the present case, however, there is no doubt that the legislature specifically intended that after-acquired property, except of certain kinds, should vest in the trustee (s 116(1)) and that a bankrupt is under an obligation to disclose to the trustee the existence or acquisition of property which is divisible amongst his or her creditors, either held at the date of bankruptcy or afteracquired — s 265(1)(a) and s 77(1)(f) respectively. Nor can there be any doubt that penal consequences are intended to attach to a failure to make disclosure of such property at the appropriate time. [76] The only remaining question for interpretation is whether or not a failure to disclose the acquisition or devolution of after-acquired property divisible among creditors is dealt with by s 78(1)(f) to the exclusion of s 265(1)(a). I accept that there is some uncertainty and lack of specific identification in the Bankruptcy Act in this regard but, even after giving due weight to canons of construction relating to penal provisions, I consider that the proper approach is to treat s 265(1)(a) as creating an offence, punishable by imprisonment or fine, for any breach of the disclosure obligations whether applying to divisible property held by the bankrupt at the time of [page 106] the bankruptcy or earlier or relevant after-acquired property but, in the case of after-acquired property, the time for disclosure is modified by s 77(1)(f) to be ‘as soon as practicable’ after the acquisition or devolution. [77] There are two principal factors which lead to this conclusion. The first is that the penal consequences created by s 78(1)(f) do not apply specifically or exclusively to s 77(1)(f) but relate to the failure by a bankrupt to comply with an order of the court any obligation created by the Act. Furthermore, in this respect, the consequences specified are not fines or other finite punishment for a summary offence but rather committal to prison for an indeterminate period as an ultimate form of enforcement of an obligation which the bankrupt has not discharged. So, for example, if the bankrupt had failed to perform the obligation of disclosing the existence of relevant afteracquired property as soon as practicable but did so after proceedings under s 78(1)(f) had been commenced, it seems unlikely that an order for committal or any other form of sanction would then occur, notwithstanding that there had been perhaps a defiant act of non-disclosure. [78] The second factor is that an act of non-disclosure contrary to s 77(1)(f) is essentially of the same character, and offends the same legislative purposes, as a non-disclosure of existing divisible property at the date of bankruptcy or ealier contrary to s 265(1)(a). There is essentially no difference in the nature of the breach of the obligation, except as to when it must be performed. That leads to the conclusion that s 77(1)(f) is an enlargement of the same obligation of disclosure as is created by s 265(1)(a) with the accompanying necessary qualification as to the timing when such disclosure obligations occur. Treating s 77(1)(f) as an enlargement of the obligation created

by s 265(1)(a) means that it is sensible to treat the legislature as intending that the sanctions proposed under s 265(1)(a) can be applied to either form of non-disclosure. [79] This means that, in my opinion, the appellant was rightfully convicted of the offences charged under s 265(1)(a) and that, therefore, this appeal should be dismissed. Therefore, his Honour dealt with two unresolved or doubtful propositions and set a firm precedent. [80,735.10] Explanatory Memorandum The following passage is extracted from para 29.1 of the Explanatory Memorandum which accompanied the Bankruptcy Legislation Amendment Bill 1996: In order to preserve the existing arrangements whereby there is national uniformity with respect to creditor’s petitions, it is necessary to give the Federal Court jurisdiction in bankruptcy exclusive to that of other courts except the High Court under s 75 of The Constitution. The Supreme Courts will be able to deal with bankruptcy matters under the Jurisdiction of Courts (Cross-vesting) Act 1987, but in general, as at present, bankruptcy proceedings will only be capable of being initiated in the Federal Court. This change will not have any significant impact in practice, as very few bankruptcy cases are initiated in state or territory courts, with only one known matter in 1994. Nor will this change affect the operation of provisions of the Act such as ss 139ZG, 139ZL, 139ZQ and 161B, which create debts in respect of contributions liabilities, avoid transfers of property and trustee remuneration, and enable trustees to enforce those debts in state and territory courts of competent jurisdiction.

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[80,740] Jurisdiction and powers of Courts in bankruptcy 28 [s 28 rep Act 44 of 1996 s 3 and Sch 1]

[80,745] Courts to help each other 29 (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. [page 107] (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. [subs (2) subst Act 12 of 1980 s 18]

(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. [subs (3) insrt Act 12 of 1980 s 18]

(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. [subs (4) insrt Act 12 of 1980 s 18]

(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. [subs (5) insrt Act 12 of 1980 s 18; am Act 44 of 1996 s 3 and Sch 1] [s 29 am Act 44 of 1996 s 3 and Sch 1] SECTION 29 GENERALLY [80,745.5] Section 29(2)(a) Section 29(2)(a) prevents application of the policy that the courts of one state will not lend aid to obtaining moneys for the payment of a revenue debt to another state. For a consideration of the subject see Ayres v Evans (1981) 39 ALR 129; 51 FLR 395. The principle as set out by Collier J in Levy v Reddy [2009] FCA 63; BC200900355 at [12] is: [12] … although the orders made in respect of the respondent’s property by the High Court of Justice in the United Kingdom are not recognised in this Court as operating as an assignment of the respondent’s Australian lands (Australian Mutual Provident Society v Gregory (1908) 5 CLR 615), the Court may act in aid of the foreign court under s 29 Bankruptcy Act to make property in Australia available to the trustee in bankruptcy to enable it to be realised for the benefit of the creditors in the foreign bankruptcy: Australian Mutual Provident Society v Gregory (1908) 5 CLR 615 at 623, 625, 628 and 630; Radich v Bank of New Zealand (1993) 45 FCR 101 at 109, 115 and 119; Dick as Trustee in Bankruptcy v McIntosh [2001] FCA 1008 at [7]. Indeed, s 29(1) requires this Court to give all assistance it can to a requesting Court if the conditions of the section are satisfied, leaving this Court with a discretion as to what assistance ought to be given (including discretion as to any conditions attach to the provision of assistance): Re Ayres; Ex parte Evans (1981) 51 FLR 395 at 405–407 esp at 407 per Lockhart J; Ayres v Evans (1981) 56 FLR 235 (FC) at 240, 247 and 254–255; Radich v Bank of New Zealand at 105, 118; Dick as Trustee in Bankruptcy v McIntosh at [8].

[13] Sixth, it is clear that under s 29 Bankruptcy Act the Court has power to appoint a receiver of the respondent’s property in Australia in aid of the administration of the respondent’s insolvent estate in the United Kingdom: Re Ayres; Ex parte Evans (1981) 51 FLR at 408–409; Ayres v Evans (1981) 56 FLR at 240, at 247 and 255; Radich v Bank of New Zealand at 121–122; Dick as Trustee in Bankruptcy v McIntosh at [19]. [page 108] [14] Finally, I note that s 21 Cross Border Insolvency Act 2008 (Cth) provides: If the Model Law (as it has the force of law in Australia) or a provision of this Act is inconsistent with section 29 of the Bankruptcy Act 1966, the Model Law or the provision of this Act prevails, and that section has no effect to the extent of the inconsistency. [80,745.10] Section 29(3)–(5) In Re Clunies-Ross; Ex parte Totterdell (1988) 82 ALR 475, the effect of s 29 was discussed. It was held that the effect of the section in relation to the issue of and response to requests for aid between the courts within Australia, on the one hand, and the courts of its external territories and foreign countries, on the other, marked it as a code. In that case, it was held that the Federal Court of Australia was empowered by virtue of s 29(4) to issue a letter of request to the Supreme Court of the Cocos (Keeling) Islands Territory for that was a part of an external territory which had jurisdiction in bankruptcy. The Supreme Court of the Cocos Island Territory had jurisdiction to act in aid of the Federal Court of Australia in the exercise of its bankruptcy jurisdiction. The constitutional lineage of both the Supreme Court of the Cocos Islands and the Federal Court of Australia from the Parliament of the United Kingdom was sufficient for both to be treated as “British Courts” for the purpose of s 122 of the Bankruptcy Act 1914 (UK). While the effect of s 29 is to exclude the effect of s 122 of the UK Bankruptcy Act in its application to the Federal Court of Australia, it did not have the effect of repealing s 122 in its application to the Supreme Court of the Cocos Islands. See also Levy v Reddy [2009] FCA 63; BC200900355, in particular, the principle set out by Collier J (cited at [80,745.5]). In Lees v O’Dea [2014] FCA 571; BC201404229 the need to secure statement of affairs was held sufficient to justify such an order at [7]. If there was a need for the respondent to travel the trustees had sufficient discretion under s 81 to grant leave to travel.

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[80,750] General powers of Courts in bankruptcy 30 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3) am Act 194 of 1999 s 3 and Sch 7]

(4) [subs (4) rep Act 44 of 1996 s 3 and Sch 1] (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 [page 109] (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. [subs (5) am Act 119 of 1987 s 13]

(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. [subs (6) am Act 119 of 1987 s 13] SECTION 30 GENERALLY [80,750.5] General The words of s 30 are words of extension, and not words of limitation. They were intended to facilitate the court having full power within the limits of jurisdiction to make such orders as it considers appropriate to give effect to and carry out the Act: Re Bilen; Ex parte Sistrom (FCA, Neaves J, 706/1983, 11 April 1985, unreported, BC8501292). The court has power to grant leave to creditors to intervene in proceedings: Re Barton (1980) 43 FLR 245; Clyne v Andrew (1984) 1 FCR 169; 52 ALR 532; Re Hepburn; Ex parte DCT v Intercapco Pty Ltd (FCA, Morling J, 5 April 1989, unreported, BC8501292). For a general discussion, see Re Amadio (1978) 24 ALR 455; 46 FLR 147. As to the distinction between jurisdiction and power, see Forshaw v Thompson (1992) 35 FCR 329; 106 ALR 633; Farrow Mortgage Services Pty Ltd (in liq) and Hodgson v Abeyratne and Sheehan (1993) 47 FCR 208; Re Dingle; Westpac Banking Corp v Worrell (1993) 47 FCR 478; 119 ALR 265 and Scott v Bagshaw (1999) 95 FCR 37; [1999] FCA 1653; BC9907765. These principles have been emphasised in Tyler v Thomas [2006] FCAFC 6; BC200600498; (2006) 3 ABC (NS) 773 at [13], [78] and [208]. See also Foyster v Prentice [2008] FMCA 757; BC200804562 at [77]-[80]. In Tyler, a Full Court of the Federal Court (Branson, Bennett and Graham JJ) had to consider whether a Federal Magistrate was able to rely on the powers of s 30 of the statute, which provides that the court has full powers to make orders giving effect to decisions of the court, to disregard the strict requirement of s 120(1) that the transferee was required to give consideration for the transfer or give consideration of no less value than the market value of the property. The court held, in the words of Branson J at [13], that s 30(1) was intended to give wide powers to carry out the effect of the statute but was not a source of power to override express provisions of the statute. See also [81,884.21]. “Necessary” has been said by Gummow J to mean if it is in the interests of justice having regard to the purposes of the statute: Re Simersall; Blackwell v Baray (1992) 35 FCR 584 at 591; 108 ALR 375. That case was applied in Foyster v Prentice [2008] FMCA 757; BC200804562 at [80]. The recognition of the implied freedom under the constitution and in some state jurisdictions led to a case being stated to the Full Court of the Federal Court in Talacko v Talacko (2010) 183 FCR 311; 268 ALR 266; [2010] FCAFC 54; BC201003473. The parties disclaimed reliance on s 78, which allows movement to be restricted in certain circumstances and in the case stated asked whether a bankrupt could be restrained from leaving the jurisdiction and required to deliver up passports. The court, Gray, Mansfield and Mckerracher JJ, considered the respondent’s contention which they summarised: [6] … The general power described in s 30(1), however, is subject to specific limitations on the power of the Court provided for in the Bankruptcy Act and is also subject to the right of Australian citizens to travel freely to and from Australia. This is said to be a “fundamental right”. Such a fundamental right, it is argued, cannot be displaced by the general words of s 30(1) of the Bankruptcy Act. [page 110] The court came to the conclusion that the preservation of the scheme and purposes of bankruptcy legislation required the use of ancillary powers and adopted the observations of Gibbs CJ in Storey v Lane (1981) 147 CLR 549; 36 ALR 129; [1981] HCA 47; BC8100098 (at CLR 556–557). They said, adopting the observations of Neaves J in Re Bilen; Ex parte Sistrom (unreported, Federal Court, Neaves

J, 11 April 1985, BC8501292), that the breadth of the language appearing in s 30(1) supports a conclusion that it should not be construed narrowly or in a confined or limited way. The court concluded that the judgment of Ryan J in Talacko v Talacko (2010) 183 FCR 297; [2010] FCA 239; BC201001344 at [31]–[33] was correct when His Honour expressed the following view: [32] I do not regard the presence in the Act of s 78 as negativing an intention that the power conferred by s 30(1) extends to an order restricting a debtor’s freedom of movement or travel if that is seen as necessary in aid of a direction under s 50. Section 78(1)(a) does not deal, in terms, with a restriction on travel or movement, even of an absconding debtor. It is confined to a power to issue a warrant for the arrest and committal of the debtor. Taken to its logical conclusion, the argument advanced on behalf of the present debtor would entail that, if the court thinks it appropriate to release a debtor on bail after an order for committal, there is no power under s 30(1) to impose a condition requiring the surrender of the debtor’s passport. The conclusion of the Full Court in Talacko v Talacko (2010) 183 FCR 311; 268 ALR 266; [2010] FCAFC 54; BC201003473 at [35] was: [35] To restrain a citizen from travelling is an order which would not be granted lightly and, in granting the order, the importance of the right to be free to travel would be a significant consideration to weigh in the balance. So also would be the prospect that the purposes of the Bankruptcy Act would be defeated or the bankruptcy rendered nugatory if travel were not restrained. The weighing of such considerations in the course of the exercise of judicial discretion is a task with which courts are charged on many occasions. Fees and charges The judgment of Lindgren J in Wenkart v Pantzer (No 8) (2004) 135 FCR 422; [2004] FCA 280; BC200401221 was an attempt to enforce the payment of certain fees and charges. After noting that in Re Wong; Ex parte Wong v Robinson [1995] FCA 805; BC9502840 Sackville J declined to make an annulment order in the absence of provision for the payment of fees and charges, his Honour said at [67] that: [67] … Once jurisdiction under s 27(1) exists, the Court can have “accrued jurisdiction” in accordance with the principles established in Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 585–587; Scott v Bagshaw, above, at 577–578. But in my opinion the question of the Court’s jurisdiction to enforce the charge can be resolved without reference to its accrued jurisdiction, broad as Wakim shows it to be. (See the discussion of the Court’s accrued jurisdiction by Justice Ronald Sackville in “The re-emergence of federal jurisdiction in Australia” (2001) 21 Aust Bar Rev 133 at 139 et seq.) And at [70]: [70] … The Act requires that a trustee’s entitlement to remuneration be quantified so that the entitlement will be effectual: Mayne v Jaques (1960) 101 CLR 169. Quantification is essential to entitlement. Unless a trustee in bankruptcy has agreed to act gratuitously, the Act gives or recognises a right to remuneration upon which “[g]eneral doctrines of equity concerning the remuneration of express trustees have little bearing”: Mayne v Jaques (above at 181 per Windeyer J). His Honour relied, chiefly, upon the reasoning in Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510; 80 ALR 203 for federal jurisdiction to deal with the transaction under which the fees and charges accrued. Likewise in Stankovic v Van der Veld (No 2) [2012] FCA 1437; BC201210239 Emmett J held that it was necessarily to deal with such matters in a timely fashion. He explained at [5]: … Various other proceedings have been commenced and disposed of in that time. In all of the circumstances, I do not consider that it is appropriate to defer the determination of the question

raised by the cross-claim simply because of the possibility that the current annulment proceeding might succeed. [page 111] Delegation In Nicholls v Hills (2004) 136 FCR 201; [2004] FCA 333; BC200401314 Tamberlin J held that a delegation made to the registrar was valid under federal law, relying upon the following words of McHugh J in Harris v Caladine (1991) 172 CLR 84 at 164; 99 ALR 193 at 249–50; 14 Fam LR 593 at 644; BC9102648: It follows, in my opinion, that this court or a federal court created under s 71 of the Constitution may be authorised to delegate the exercise of its judicial powers to an officer of that court provided that the exercise of the power is subject to review by way of a de novo hearing by a justice or judge of that court who has been appointed in accordance with s 72 of the Constitution. It goes without saying that the Parliament cannot require the court to delegate any of its powers. Nor, in my opinion, will anything less than a hearing de novo to review the exercise of the power by the officer be sufficient. That is to say, appellate review is an insufficient condition of the delegation of the exercise of the power; there must be a complete rehearing of the facts and the law as they exist when the justice or judge reviews the order made by the officer. Otherwise, the officer and not the justices or judges of the court would be exercising the original jurisdiction of the court. [80,750.6] Questions of law This section enables such matters as the existence of constructive and resulting trusts to be raised: Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278; (2006) 224 ALR 280; [2006] HCA 6; BC200600981. A recent example of the application of these principles is Pascoe v Nguyen [2007] FMCA 194; BC200701431. In that case the existence of a resulting trust, as in Calverley v Green (1984) 155 CLR 242; 56 ALR 483; 9 Fam LR 940; BC8400459 or a resulting trust as in Muschinski v Dodds (1985) 160 CLR 583; 62 ALR 429; 11 Fam LR 930; BC8501051, was in issue. Raphael FM first considered, and found as to the validity of the marriage which formed the background to the existence of the trusts, and then applied the principles confirmed in Cummins to conclude that the existence of a trust as to the mortgage payments in question was not proven: Pascoe v Nguyen, above, at [30]. [80,750.7] Discretion to make sequestration order and to approve trustee See [82,390.12]. [80,750.10] Injunctions While the equivalent provision in the 1924 Act (s 25) did not specifically provide for the court to grant injunctions such power was exercised. See cases referred to in Re Bayliss; Ex parte Official Trustee in Bankruptcy (1987) 15 FCR 167; 73 ALR 455. Re Bayliss is also authority for the proposition that in granting an injunction in aid of a trustee in bankruptcy the usual equitable principles relating to injunctions do not necessarily apply. In Trustee of Bankrupt Estate of Tom Karas v Karas (FCA, Ryan J, 15 April 1998, unreported), this latter aspect of Re Bayliss was distinguished. His Honour preferred to apply the usual High Court authorities to the question of whether or not an injunction should be granted to restrain a mortgagee from an associated entity (see s 139D) of the bankrupt from dealing with mortgaged property. In certain circumstances the court will grant injunctions on the application of a creditor: Re Hepburn; Ex parte DCT v Intercapco Pty Ltd (FCA, Morling J, 5 April 1989, unreported). It is necessary for there to be an application on foot that if successful will affect the legal rights of parties before the power to grant injunctions will be exercised: Forshaw v Thompson (1992) 35 FCR 329; 106 ALR 134.

As to the power of the court to grant an injunction to restrain a trustee from allowing certain alleged creditors from voting at a meeting pursuant to Pt X of the Act, see Re Amadio (1978) 24 ALR 455; 46 FLR 147 and Forshaw v Thompson, above. In Re Brazel; Ex parte Royal Nominees (FCA, Cooper J, 2 June 1995, unreported), Cooper J doubted whether the court had power under subs (1)(b) to restrain a person leaving the jurisdiction prior to the making of a sequestration order in view of the express provision to restrain fleeing debtors contained in s 78. In Owens v Lofthouse [2007] FMCA 238; BC200701432 at [11] McInnes FM had no doubt that this section provided an injunctive power, but he considered that the power was constrained by subs (1)(b), which requires the court to consider the exercise of the power, is necessary for the [page 112] purposes of the statute, following Hepburn; Ex parte DCT (FCA, Hill J, 10 July 1989, unreported). In this case he considered that an alternative, that is, s 167, providing powers to tax costs, was available. Setting aside on other grounds Jarrett FM in Commonwealth Bank of Australia v Jorgensen (No 3) [2011] FMCA 1046; BC201110721 at [22]–[23] set out the principle: [22] Re Duckworth; Ex parte Lockett (unrep Fed Ct of Aust, French J. 12 February 1987) stands as authority for the proposition that one cannot set aside a bankruptcy notice after time for compliance with it has expired. That decision has been applied, and in the context of an application such as this where there is an outstanding application to set aside a judgment by default, the principle has particular application. Even if the judgment by default is set aside, the act of bankruptcy has been committed, and so the creditor’s petition still has a foundation upon which it can proceed. [23] However, in Brookfield v Yevad [2002] FMCA 82 at [7]–[13] Raphael FM examined the authorities and determined that in certain circumstances the Court can set aside a bankruptcy notice under s 30(1) of the Bankruptcy Act after time for compliance has expired even in the absence of an extension of time within which to comply with its terms. The circumstances identified by his Honour were those where it was found that the bankruptcy notice is invalid. If the bankruptcy notice is invalid, no act of bankruptcy can be committed by failing to comply with its terms. [80,750.20] Declarations In Nicols v Geekie [2007] FMCA 1576; BC200708367 it was held that the use of this remedy was subject to the restrictions applied by Mason CJ, Dawson, Toohey and Gaudron JJ stated in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582; 106 ALR 11 at 22. See [81,025.30].

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[80,755] Exercise of jurisdiction 31 (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; (ba) [repealed] (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; (da) [repealed] (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; (h) [repealed] (i) applications for the trial of questions of fact with a jury and the trial of those questions; [page 113] (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; (iii) [repealed] (iv) [repealed] (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.

[subs (1) am Act 12 of 1980 s 19; Act 119 of 1987 s 14; Act 143 of 1992 s 3 and Sch; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Schs 1, 2, opn 1 Dec 2004]

(2) All other matters under this Act may, in the discretion of the Court, be heard in open Court or in Chambers. SECTION 31 GENERALLY [80,755.3] Legal practice Lucev FM has carefully considered the right of various statutory authorities to representation and the ability of lawyers to practice in Deputy Commissioner of Taxation v Debaugy (2012) 263 FLR 193; [2012] FMCA 451; BC201204112. The decision is authoritative, exhaustive and useful, but it is clear that the rights with which His Honour are concerned do not arise from the legislation considered here. [80,755.5] The function of s 31 when operating with s 27 In Anderson v Peldan (2004) 212 ALR 291; 183 FLR 354; [2004] QSC 335; BC200406321 Philippides J provided this analysis of the essential part played by s 31. The reference to Austin J is to His Honour’s judgment in Sutherland v Brien (1999) 149 FLR 321; [1999] NSWSC 155; BC9900755 considered above at [80,735.5]. [13] However, Austin J did not, in considering the question of the jurisdiction in bankruptcy, have regard to what role if any was played by s 31 of the Act in defining matters within the exclusive jurisdiction of the Federal Court or Federal Magistrates Court. That was a matter considered by the Full Court of the Federal Court in Scott v Bagshaw (2000) 99 FCR 573. [14] Section 31(1)(e) and (f) of the Act provides: (1) In exercising jurisdiction under this Act, the Court shall hear and determine the following matters in open Court … (e) applications to set aside or avoid a charge, charging order, settlement, disposition, conveyance, transfer security or payment; (f) applications to declare for or against the title of the trustee to any property… “The Court” is defined in s 5(1) as meaning “… a Court having jurisdiction in bankruptcy under this Act”. [15] The Full Court in Scott v Bagshaw emphasised that s 27(1) falls to be understood in its context and that s 31(1) elucidates what the drafter of the provision had in mind as falling within “bankruptcy” in s 27(1) as defined in s 5(1) of the Act. The Full Court stated that it was apparent from s 31(1) that the drafter of it intended that applications having that stated effect would be encompassed within the concept of jurisdiction in bankruptcy. The Full Court distinguished Sutherland v Brien on the basis that it did not concern a case, such as that in Scott v Bagshaw, which fell within s 31(1)(f) of the Act. [16] Scott v Bagshaw concerned proceedings whereby the appellant trustee of a family trust sought a declaration that properties were charged in his favour. The first respondent was a bankrupt, the second respondent was the bankrupt’s wife and the third respondents were the first respondent’s trustees in bankruptcy. The proceedings were ordered to be stayed for want of jurisdiction. The Full Court in Scott noted that the nature of the claim was “one to realise an [page 114]

equitable charge”. The pleadings made no reference to any section of the Act and it was possible for judgment to be given without reference to any such section. However, as the court stated (at 577): … the undoubted effect of an order being made in the terms sought by the appellant would be that a declaration would be made against the title of the third respondents. Upon the third respondents’ becoming trustees, the title to the properties (and subsequently to the money representing part of the properties) became vested in them: ss 58(1) and 132 of the Act. The consequence of any such order must therefore be that it would have a necessary adverse effect on the title of the third respondents to the extent that it established title in the appellant. That is a matter that falls within the jurisdiction in bankruptcy. [17] Scott v Bagshaw and Sutherland v Brien were explained in the following passage by Barrett J in Green v Schneller (2001) 189 ALR 464 at 469 [22]: Austin J [in Sutherland] decided that s 27(1) did not vest in the courts to which it refers exclusive jurisdiction in respect of every question turning upon the interpretation and application of the Bankruptcy Act. That must be so. When persons become bankrupt, it is necessary for courts to determine all types of questions about the consequences. Many of those questions will depend for their answers on the provisions of the Bankruptcy Act. One class of such questions relates to the nature of the rights of persons to property. Austin J held that nothing in the Bankruptcy Act precludes the exercise in such cases of the well established jurisdiction of courts other than those mentioned in s 27(1) “to determine and declare rights to property and make orders as to its destination”. But that undoubted general jurisdiction will yield to any aspect of the jurisdiction for determination and declaration of such rights which the Bankruptcy Act itself places in the hands of s 27(1) courts. In Scott v Bagshaw … the Full Federal Court noted that among the matters so placed in the hands of those courts is “applications to declare for or against the title of the trustee to any property”. Because this is one of the matters s 31(1) of the Act requires “the Court” to hear in open court, it is identified as a matter within the definition of “bankruptcy” and thereby seen to be within s 27(1). That aspect of the general jurisdiction “to determine and declare rights of property and to make orders as to its destination” which entails “applications to declare for or against the title of the trustee to any property is accordingly reposed in s 27(1) courts alone. [Emphasis added]. [18] Both parties relied on Denby (as trustee in bankruptcy of the estate of S S Wing Tam) v Shum [2002] QSC 117; BC200203759, as supporting their respective submissions concerning the jurisdiction of this court. Denby concerned a claim brought in the Supreme Court by a trustee in bankruptcy alleging that a payment made to the defendant was void as against it pursuant to s 122 of the Act. The application in that case did not expressly seek a declaration under s 31(1)(f) or make application to avoid a disposition under s 31(1)(e), but rather sought repayment of money by the defendant, relying primarily on the operation of s 122 of the Act. While Muir J doubted that such a claim, not being a claim for a declaration, came within s 31(1)(f), his Honour found that the application seeking repayment of money on the basis that the payment was void under s 122 of the Act was in substance one to set aside or avoid a disposition or payment and as such came within s 31(1)(e) and was therefore not within this court’s jurisdiction. [19] But of course the approach taken by Muir J applies equally to a claim made by a trustee in bankruptcy pursuant to s 121 if it can be characterised in substance as one to set aside or avoid a disposition or conveyance within s 31(1)(e) of the Act or as one which seeks a declaration for or against the title of the trustee to any property within s 31(1)(f) of the Act.

[20] The respondents in this proceeding claim an entitlement to the entire legal and equitable interest in the disputed sum, notwithstanding the pleaded assertion by the applicants to an entitlement and seek a declaration accordingly. On one view the pleaded assertion of the applicants’ entitlement can be said not to raise a sufficient cause of action as to the nature of the dispute between the parties. But that is a matter that could be remedied by further particulars and [page 115] the submissions made by both counsel leave no doubt that the pleaded assertion concerning the applicants claimed entitlement to the disputed sum is understood as being based, inter alia, on a claim that the transaction severing the joint tenancy is void pursuant to s 121 of the Act. [21] The effect of a declaration in favour of the respondents as to the entirety of the title to the disputed property, would involve a finding “against the title of the applicants” to that property, arising inter alia as a consequence of the application of s 121. That is a matter falling within s 31(1)(f) of the Act in that it can be said to concern a claim to a declaration “against the title of the trustee to property” and outside this court’s jurisdiction. [22] However, even if that conclusion cannot be drawn given the limited nature of the pleading as to the applicants’ claimed entitlement, there is another basis on which the proceeding ought to be struck out. [23] The proceeding in this court is in reality a futility without the determination of the applicants’ claim pursuant to s 121, presently the subject of the application brought in the Federal Magistrates Court. That claim by the applicants to a declaration that the transfer severing the joint tenancy is, inter alia, void pursuant to s 121 of the Act as against the applicants, is not one within the jurisdiction of this court to entertain. That is because that claim is in substance one to avoid the transaction whereby the joint tenancy was severed and is thus in substance one to avoid “a disposition or conveyance”. As such it concerns a matter within s 31(1)(e) of the Act and concerns the exercise of jurisdiction “under or by virtue” of the Act. [24] It follows that that application brought by the applicants in the Federal Magistrates Court cannot be raised by way of counter-claim in these proceedings as it is not within the jurisdiction of this court. The determination of the application in that court will determine the real issues of dispute between the parties. It was not submitted that there are any other matters that would remain for determination. Accordingly, the proceedings in this court will be otiose upon the determination of the application in the Federal Magistrates Court and there can be no justification for merely staying the within proceeding.

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[80,760] Exercise of powers by certain officials 31A [s 31A rep Act 44 of 1996 s 3 and Sch 1] REPEALED PROVISION — SECTION 31A GENERALLY [80,760.5] Section 31A was repealed on 16 December 1996. However, the delegation of part of the

jurisdiction, powers and functions of the Federal Court in respect of bankruptcy matters remains. Section 35A and O 77 r 7 and Pt 3 of the Third Schedule of the Federal Court Rules operate so that a registrar of the Federal Court will normally, subject to review by hearing de novo by a judge, exercise delegated judicial power: to set aside a bankruptcy notice; to adjourn or allow amendment of process or extension and abridgment of time; to make sequestration orders to grant leave; to withdraw creditor’s petitions; to allow substitution of petitioning creditors; to dismiss creditor’s petitions; to order and conduct examinations under s 81; to grant or refuse permission to a bankrupt to leave Australia; to order service under Pt XI or to dispense with service of a petition under that Part; to make orders for administration under Pt XI; to issue warrants under s 264B; to order substituted service under s 309(2). [page 116] As to the validity of the scheme of delegation of judicial power to registrars of the Federal Court under the repealed s 31A, see Cheesman v Waters (1997) 77 FCR 221; 148 ALR 21 (affirmed on appeal Cheesman v Waters (1997) 77 FCR 221; 148 ALR 21); Taylor v Australian Taxation Office (FCA, Dowsett J, 7121 of 1998, 29 October 1998, unreported, BC9806375). For discussion on the exercise of judicial powers by registrars, see Re Brindle; Ex parte FB & FA McMahon Pty Ltd (1992) 35 FCR 506; 108 ALR 470. Where a registrar is exercising such power he or she should make it clear what the source of the power being exercised is: Re Kwiatek; Ex parte Big J Ltd (1989) 21 FCR 374. [80,760.10] Appeals from registrars must be instituted within 21 days: Federal Court Rules O 77 r 8.

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[80,765] Costs 32 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. SECTION 32 GENERALLY [80,765.5] General Section 32 confers power on the court to make costs orders in bankruptcy proceedings. Power is conferred on the court to make orders for costs in other proceedings by s 43 of the Federal Court Act 1976. Section 32 has no application in relation to a proceeding before the registrar sitting as registrar, for example, at a public examination (but now see s 81(14)). Further, s 32 does not confer on the court power to make a costs order in an examination before the registrar: Re

Kusmenko; Golovachenko v Official Receiver (1976) 14 ALR 673; 28 FLR 183. Section 32 would apply where the registrar was exercising delegated power of the court (see s 35A of the Federal Court Act 1976 and O 77 r 7), for example, when hearing a creditor’s petition pursuant to s 52 of the Act. Section 32 makes it clear that a litigant will only obtain costs as a consequence of a discretionary order, and not as a matter of right: Re Hadwick [1976] Qd R 264; (1976) 13 ALR 641. The general rule is the same as in other jurisdictions: see Principal Strategic Options Pty Ltd [2001] FCA 664; BC200102900 at [17]–[18], and Elias v Pascoe [2006] FCA 802; BC200604817. Section 32 gives the court a very wide discretion with respect to orders for costs, albeit that the discretion must be exercised judicially. [80,765.10] Costs of a successful party to litigation In Re Skase; Ex parte Donnelly (1992) 37 FCR 509; 114 ALR 303 at 317, Dummond J set out and applied the following propositions in relation to the costs of a successful party to litigation. The propositions were derived from the decision of Wilcox J in Cummings v Lewis (FCA, Wilcox J, 29 May 1992, unreported), which was upheld on appeal in Cummings v Lewis (1993) 41 FCR 559; 113 ALR 285: (a) The Court has an unfettered discretion as to its costs order: here see s 32 of the Bankruptcy Act. (b) But, because of the usual practice of the Court, a successful respondent has a reasonable expectation of recovering costs, in the absence of special circumstances. (c) In considering the matter of costs, the Court is entitled to look beyond the actual conduct of the case and have regard to the circumstances out of which it arose. (d) However, there must be a limitation on the weight to be put on pre-litigation conduct, less the exception overwhelm the rule. If too much emphasis is placed upon the circumstance that the litigation would not have arisen but for an action of the defendant, few successful defendants would recover their costs. (e) The Court may take into account the conduct of the litigation by the successful party. Where a successful party has put the opposing party to significant expense in connection with an issue on which that party failed, it may be reasonable to take that matter into account by awarding something less than full party–party costs. [page 117] (f)

There is no difference in principle between the case of a successful plaintiff and that of a successful defendant.

In Oldfield v WBG Developments Pty Ltd (in liq) [2003] FCA 1012; BC200306182 Allsop J, in dealing with a case where an application had joined only one of two joint creditors, decided that in such circumstances the applicant should make a 25% contribution towards costs despite the usual rule. [80,765.15] Costs of applicant creditor Special provision is made in relation to the costs of the prosecution of a creditor’s petition in s 51 of the Act. Section 51 provides: 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. Section 51 addresses the situation where a creditor’s petition is withdrawn or dismissed. In a case where a sequestration order is made, the usual order for costs is that they be taxed and paid in accordance with the statute: ie, out of the bankrupt estate with the priority afforded to them by s 109. Notwithstanding the words “shall be at the expense of the creditor” in s 51, there is authority for the

view that s 32 gives the court an overriding discretion to award costs to a petitioning creditor where the petition is withdrawn or dismissed. It is a discretion which will generally only be exercised in exceptional circumstances. Commenting on ss 27(1) and 58 of the Bankruptcy Act 1924–59, the statutory precursors to ss 32 and 51, respectively, of the current Act, Paine J in Re Vanechteld (1960) 18 ABC 258 stated: I arrive at the conclusion that s 27(1) gives the court an overriding discretion to award costs to a petitioning creditor under such circumstances. That discretion must, of course, be based on judicial grounds — eg that the petitioning creditor’s actions have been warranted and that while the estate may be benefited he has been deprived of some at least of his rights by what has actually occurred. In the present case it cannot be said that the petitioning creditor’s original action was unwarranted. But the estate has not been benefited, as no sequestration order or other method of distributing the debtor’s estate between what other creditors he may have has resulted as was the case in Re Haarsma (unreported). The petitioning creditor has been paid his debt and at least part of his costs, and has chosen of his own volition to apply to withdraw his petition. He could possibly have protected himself by refusing to accept the debtor’s solicitor’s cheques and pressed his petition for a sequestration order, and this, prima facie at any rate, would have been granted. It may be he has wisely chosen to take the bird in hand, but I am unable to see the merits of his further application for the bird in the bush as well. See also Re Hammant; Ex parte Burke [1965] ALR 340. The Corporations Act contains a similar provision with respect to application for winding up orders; see Corporations Act s 466(1) and its precursor Companies Code s 366. As to their interpretation, see Re Mailrite Pty Ltd (1985) 9 ACLR 863; 3 ACLC 528. [80,765.20] Costs of applicant creditor — intervening voluntary bankruptcy The presentation (and acceptance) of a debtors petition during the currency of the creditor’s petition does not deprive the court of the power to make an appropriate order in respect of costs: Re Hankey; Ex parte Kratzmann (1986) 11 FCR 512; 66 ALR 702. In that case, the terms of the order were that the costs of the petitioning creditor of and incidental to the petition up to the date when his solicitors received notice of the presentation of the debtor’s petition, and thereafter the costs which must have been incurred on the footing of the necessity to make an application for an order for costs, be taxed and paid as if a sequestration order had been made on the petition. The same principle arises when a judgment is entered because the applicant is unaware of the bankruptcy. Simpson FM in Sampson v McInness [2007] FMCA 1656; BC200708601 considered whether each party should pay their own costs in such a case (as was decided in Re Minister for [page 118] Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; 143 ALR 1; 71 ALJR 533; BC9700811). At [45] his Honour ordered that the costs should be paid by the respondent creditor: [45] … on an indemnity basis, that is all of the costs incurred by the applicants, except insofar as they are an unreasonable amount or were unreasonably incurred, so that, subject to such exceptions, the applicants will be completely indemnified by the respondent for their costs. Further, his Honour considered that a discretion exists whether to order indemnity costs, following

Lucev FM’s conclusions in Genovese v BGC Construction Pty Ltd (No 2) [2007] FMCA 601; BC200703687 at [48]: [48] The discretion is not so circumscribed that an indemnity costs order “may only be made against an ethically or morally delinquent party”. The discretionary categories are not closed, and “other elements of litigious misconduct may be relevant”. [80,765.25] Costs of applicant creditor — intervening Pt X Where a creditor’s petition is withdrawn or dismissed because the debtor has executed a deed of arrangement or deed of assignment under Pt X of the Act, or the debtor’s creditors have accepted a composition under Pt X of the Act, the court has power to order that the costs be paid out of the estate with priority: Re Hedge; Ex parte Goddard (1994) 50 FCR 421 (composition); Re Mitchell; Ex parte South Australian Tractor Co Ltd [1967] ALR 418; (1967) 9 FLR 286 (deed of arrangement). In Re Hedge; Ex parte Goddard, above, the creditor issued a bankruptcy notice relying on the costs order made at the time the petition was dismissed. Drummond J set aside the bankruptcy notice, and ordered that the costs of the creditor’s petition be paid by the trustee of the composition out of the moneys received by him, in priority to all other debts and fees payable out of those moneys. [80,765.30] Costs of supporting creditor An application for the costs of a supporting creditor in circumstances where there has been a sequestration order without an order for substitution raises a number of issues. Strictly speaking, the supporting creditor is not a party to the proceeding. Nevertheless, it is clear that the court has power to make an order both against and in favour of a nonparty: Re Ayre; Ex parte DCT (1995) 130 ALR 648. On the question of discretion, a central issue is whether the “support” was for the benefit of all creditors. A supporting creditor may argue that but for its presence, the original petitioner might have withdrawn the petition after receiving payment or compromising the debt. [80,765.35] Taxation of costs The procedure governing the taxation of costs is set out in O 62 of the Federal Court Rules. An applicant creditor, in respect of a petition relying on the failure to comply with a bankruptcy notice, has a choice of filing a short form bill of costs in accordance with Div 14 of O 77. [80,765.50] Costs order against the trustee The principles concerning the obligation of the trustee to pay costs of another party to litigation were considered by a Full Court in Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100. The Full Court stated: The obligation of a trustee in bankruptcy to pay costs to another party involved in litigation unsuccessfully instituted or defended by the trustee is a matter distinct from the trustee’s entitlement to recoupment out of the bankrupt’s estate (Pitts v La Fontaine (1880) 6 App Cas 482 at 486; Re Driller & Nebenson [1972–73] ALR 735; (1972) 21 FLR 159 at 175). Ordinarily, an unsuccessful trustee will be ordered to pay the costs of the successful party. Such an order imposes a personal obligation on the trustee. In such a case, the question then arises as to whether or not the trustee has a right to be reimbursed out of the trust estate. This latter question arises in the administration of the bankruptcy, not in the original litigation. In Oayda v Mercantile Mutual Ltd [1994] FCA 1083 Wilcox J ordered that the controlling trustee pay the costs of a successful application to set aside a composition under Pt X of the Act on the basis of a number of serious irregularities in connection with the meeting. His Honour further ordered that those costs not be reimbursed out of the estate. [page 119]

In some matters involving the trustee, he or she should act as a neutral party, coming forward at an early stage to inform the court that he or she will abide by the orders of the court. The trustee might be expected to file material advising the court of matters in connection with the administration. Where the trustee takes the position of opposing litigant, the trustee might expose himself or herself to an order for costs: Kennedy v Australian Mutual Provident Society [1996] FCA 1045; BC9605794. If the trustee can be said to have acted precipitously in the issue of a bankruptcy notice there may exist circumstances, as there did in Elias v Pascoe [2006] FCA 802; BC200604817, which allow costs to be ordered against the trustee where an appeal has not yet been determined. Branson J held at [10] that, applying Re Principal Strategic Options Pty Ltd [2001] FCA 664; BC200102900 at [17]–[18], s 32 gives the court a very wide discretion with respect to orders for costs, albeit that the discretion must be exercised judicially. [80,765.53] Costs of debtor who extends time for a successful appeal This was the situation in Elias v Pascoe [2006] FCA 802; BC200604817. The court was of the view that the trustee acted unreasonably and made a costs order against him: at [17]. [80,765.55] Costs in application to review trustee’s decision on a proof of debt Neither the Official Trustee nor a registered trustee is personally liable for the costs in relation to an application to review the trustee’s decision on a proof of debt except, in the case of the decision of a registered trustee, where there are special circumstances: s 105. See [81,765.5]. [80,765.60] Costs of an examinee at a public examination The court, the registrar or the magistrate has power to order that the costs of a person examined, other than the relevant person, be paid out of the estate of the relevant person: s 81(14). See [81,550.60]. [80,765.65] Costs order against a non-party Section 32 of the Act confers power on the court to make an order both in favour of and against a non-party. As a general rule such orders are only made in special or exceptional circumstances: Re Ayre; Ex parte DCT (1995) 130 ALR 648. For examples of matters in which such orders have been made, see Bent v Gough (1992) 36 FCR 204; 108 ALR 131 (costs order against liquidator of petitioning creditor); Re Foster; Ex parte Foster v Duus (1994) 121 ALR 494 (costs order against bankrupt’s wife) and Re Garofano; Ex parte American Express International Inc (1990) 26 FCR 592 (costs order against solicitor for father of debtor). [80,765.70] Security for costs Section 32 does not confer jurisdiction to award security for costs. In an appropriate case, such an order can be made under s 30. Under that section, the court would need to find that the order for security was “necessary for the purposes of carrying out or giving effect to the Act”: Re Hodby; Ex parte Kenny (1987) 77 ALR 118; Re Taylor; Ex parte Century 21 Real Estate Corp (1994) 49 FCR 324. [80,765.75] Costs certificate See the Federal Proceedings (Costs) Act 1981. For an example of the grant of a costs certificate in a successful appeal against a decision of the Administrative Appeals Tribunal in a matter arising under the Bankruptcy Act 1966, see Challen v Bendeich [1999] FCA 845; BC9903518. [80,765.80] Costs Certificates in NSW and generally Under the Uniform Civil Procedure Rules 2005 (NSW) a costs certificate can be applied for when an interlocutory costs order is made, and similar procedures exist in other states. However, this procedure, which is analogous to certain debts due to statutory bodies, gives no opportunity to respondents having a counterclaim to advance that argument. In Canty v Agency Printing (Aust) Pty Ltd [2010] FMCA 174; BC201001622 Smith FM dismissed a bankruptcy petition founded on a debt of this nature. His Honour stated his reasons at [7]–[9]: If Mr and Mrs Canty have prospects of obtaining a judgment against Agency Printing in the

Supreme Court proceedings exceeding the amount of these costs, either on a cross-claim or even [page 120] by way of costs on a successful defence, it is clear that such claims could not have been set up in the Local Court in answer to the registration of the costs certificate, since that proceeding did not provide any opportunity for a defence or cross-claim to be filed in the Local Court (see Massih v Esber (2008) 250 ALR 648; [2008] FCA 1452; BC200808387. Whether such prospects are established on the evidence before me today has been disputed by Agency Printing. However, it is unnecessary for me to examine this issue, including the significance of the subsequent history of the Supreme Court proceedings and McCallum J’s orders on 3 March 2010. This is because Mr and Mrs Canty today rely only upon one contention, which is that the bankruptcy notice was invalid as issued and served, on the ground that the Local Court judgment was not “a judgment or order the execution of which has not been stayed”, within the language of ss 40(1)(g) and 41(3)(b) of the Bankruptcy Act. In support of that contention they rely upon the provisions of r 42.7(2) of the Uniform Civil Procedure Rules 2005 (NSW). This rule provides that “the costs of any application or other step in any proceedings” “do not become payable until the conclusion of the proceedings” … “unless the court orders otherwise”. I have considered the effect of this rule in relation to bankruptcy notices in a similar situation in Custom Capital Pty Ltd v Thompson [2009] FMCA 337; BC200903455 where I followed my earlier reserved judgment in Maher v Honeysett [2009] FMCA 4; (2009) 222 FLR 407; BC200900179. I was not invited today to reconsider my reasoning in those cases, in so far as it decided that a stay on execution arising under r 42.7(2) in relation to an interlocutory costs order made in Supreme Court proceedings gives rise to a stay on execution of a registered costs assessment certificate for the purposes of ss 40(1)(g) and 41(3)(b) [of] the Bankruptcy Act. As his Honour made clear at [9], such a view follows in analogous cases.

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[80,770] Adjournment, amendment of process and extension and abridgment of times 33 (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. [subs (1) am Act 12 of 1980 s 20]

(2) [subs (2) rep Act 44 of 1996 s 3 and Sch 1] SECTION 33 GENERALLY [80,770.5] Adjournment of petition pending a Pt X meeting — s 33(1)(a) In Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403 at 411–12; 37 FLR 341 at 349–50, Sweeney J (with whom Franki J agreed) stated: It would be unwise to attempt to draw up an exhaustive catalogue of the circumstances to which the court should pay regard in considering an application for an adjournment of a creditor’s petition. However, to illustrate the point that the one circumstance of the execution of an authority should be looked at in the general context of each individual case, one may usefully refer to some other relevant circumstances in such a case, as for example: (1) the course of dealings between the parties, from the time when the obligation to the petitioning creditor is said to have arisen to the date of the hearing; [page 121] (2) the attitude to the application of the petitioning creditor, as prima facie, on proof of the matters mentioned in s 52(1) of the Bankruptcy Act 1966, the court will proceed to make an order for sequestration (see Rozenbee v Kronhill (1956) 95 CLR 407; [1956] ALR 1004); (3) the general financial position of the debtor; (4) the relation between the debt of the petitioning creditor and the total liabilities of the debtor, as it may be seen, for example, that the petitioning creditor’s opposition would be sufficient to defeat any special resolution proposed at a creditors’ meeting; (5) any attitude to the application disclosed by other creditors; (6) any evidence bearing upon the question whether it would be for the advantage of the creditors that the debtor’s affairs be administered under Pt X of the Act; (7) the likelihood that the debtor would be able to place before a meeting of creditors a particular proposal, or evidence of his general circumstances, calculated to persuade them to vote for the administration of his affairs under Pt X. [80,770.10] Adjournment of petition pending an appeal — s 33(1)(a) In Ahern v DCT (Qld) (1987) 76 ALR 137, a Full Court held: It is also well established that in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds: Re Rhodes; Ex parte Heyworth (1884) 14 QBD 49; Bayne v Baillieu (1907) 5 CLR 64 and Re Verma; Ex parte DCT (NSW) (1984) 4 FCR 181. These cases rest on the broad principle that before a person can be made bankrupt the court must

be satisfied that the debt on which the petitioning creditor relies is due by the debtor and that if any genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before he is made bankrupt. Bankruptcy is not mere inter partes litigation. It involves change of status and has quasi-penal consequences. See also Adamopoulos v Olympic Airways SA (1990) 95 ALR 525. In Guss v Johnstone [2000] FCA 1455; BC200006251, the trial judge refused the respondent debtor’s application to adjourn the petition on the basis of a special leave application (against the dismissal of his application to set aside a bankruptcy notice) and proceeded to make a sequestration order against him. The High Court subsequently granted the respondent special leave to appeal, but dismissed the appeal (see Guss v Johnstone (2000) 171 ALR 598; 74 ALJR 884; [2000] HCA 26; BC200002278). The respondent debtor appealed the trial judge’s decision (to refuse the adjournment) to a Full Court of the Federal Court. Sackville J (with whom Drummond and Dowsett JJ agreed) held that the decision to refuse the adjournment was interlocutory in character, and that an erroneous interlocutory decision may justify setting aside the final orders made in the proceedings if the “error infects the final judgment”. His Honour held that even if the decision to refuse the adjournment was erroneous, it did not occasion the appellate debtor injustice. The principle reason for this conclusion was the dismissal by the High Court of the appeal, which was the basis for the adjournment application. Sackville J rejected an argument that the appellant had been deprived of the “advantage” of having the petition automatically lapse by virtue of s 52(5) of the Act. What of an appeal to the High Court? It seems that it is necessary to consider the character of an High Court appeal which is undoubtedly different from an appeal as of right. The decision of Beaumont J in Westpac Banking Corporation v Carver (2003) 126 FCR 113; [2003] FCA 221; BC200301149 at [15] considers this difference and the relevant authorities, drawing in particular on the decision of McHugh J in SDN Children’s Services Inc v Hughes (2002) 23(10) Leg Rep SL1: [15] … Three applicants for special leave to appeal in three separate proceedings seek expedition of their special leave applications. An application for expedition of a special leave application in this court is not comparable with an application for expedition of a proceeding in other courts. [page 122] First, an application for special leave is an application for permission to commence proceedings in the court. For that reason, there are no parties in the proper sense of that word to an application for special leave to appeal. Nor is there any matter in the court until leave is granted. Second, there is no right to special leave. Moreover, the judgment that is the subject of the application is not a provisional judgment, having no effect or efficacy until its validity is confirmed by this court. The judgment of the court below represents the rights and liabilities of the parties and, when entered, it can be immediately enforced unless this court sets it aside or there is an order of this court or the lower court staying the judgment. Thirdly, no special leave application can be or ought to be brought unless it involves some matter of public importance or a miscarriage of justice. There is no miscarriage of justice in the relevant sense merely because it appears that the decision below was wrongly decided. If error alone constituted a miscarriage of justice, every arguably wrong decision would be a candidate for special leave to appeal.

By “miscarriage of justice”, I mean such a departure from the rules that govern judicial procedures as to make the decision of the court below not a judicial decision in the proper sense of the term and therefore one where the interests of the administration of justice require the grant of leave. Before examining and hearing a special leave application, this court must proceed on the basis that applications for special leave that are pending in the court are properly brought. That has the result that in hearing an application for expedition the court must proceed on the basis that other pending applications are either of public importance or involve a miscarriage of justice. Regrettably, over 85 per cent of applications for special leave to appeal do not have the requisite qualifications and are dismissed. Many of them should not even have been filed in the first place. Despite these melancholy statistics, the court can only proceed on the basis that all pending applications are of public importance or involve a miscarriage of justice. Many pending cases also involve the liberty of the subject. They concern persons serving gaol sentences or being detained in refugee detention centres. If an application for expedition is successful, it means that another application must lose its relative priority. In these circumstances, very strong grounds, particularly in a civil case, are needed before an application for expedition can succeed. The need to maintain the temporal priority of applications is reinforced by the increasing number of special leave applications. The number of applications for special leave has increased 787 per cent since 1984, yet the court has the same number of justices as it did in 1984. Panels of three justices consider each leave application, although often only two justices will hear the application. The court has been forced to set aside many more days for hearing special leave applications than was the case when I was appointed to this court in February 1989. So many hearing days and out of court time of the justices are now taken up with leave applications that it seems impossible to give any more time to leave applications without affecting the court’s capacity to continue to perform its appellate and constitutional jurisdiction in a proper manner. As a result of the increasing number of applications, the time between filing and the hearing of applications is continuing to increase. This makes it all the more important [that] an application for special leave not lose its temporal priority unless the application seeking expedition has some urgent aspect or need that is different in kind from that of other pending special leave applications Beaumont J continued at [17]–[18]: [17] … It must follow therefore, in my opinion, that whilst, as Burchett and Gummow JJ reminded us in Adamopoulos, these are general principles, the discretion to adjourn is not fettered, in any sense, where an argument is put on behalf of a respondent debtor that an [page 123] adjournment of a petition should be granted upon the basis that the appeal is genuine and that there are arguable grounds upon which the appeal is based. The relevant inquiry, in my opinion, should in truth proceed upon the footing that the subject matter for consideration is not an appeal as of right but an application for special leave to appeal. [18] In other words, the question for this court is not simply whether the appeal is genuine and that

there is an obvious or manifest error of law or of fact in the judgment from which special leave is sought. The respondent debtor must go further and show not only that the application for special leave to appeal is genuine, but that there are arguable grounds for concluding that special leave to appeal will be granted, given not only the provisions of s 35A of the Judiciary Act but also the other considerations explained by Mr Jackson. [80,770.15] Adjournment of petition which is bad — s 33(1)(c) A petition which is bad must be withdrawn or dismissed, and not adjourned: Re Laycock; Ex parte Burton [1929] QWN 32; (1929) 1 ABC 46. [80,770.20] Adjournment of an examination — s 33(1)(c) Most examinations under s 81 are conducted by a registrar acting administratively, therefore s 33(1)(a) would have no application. Express power to adjourn an examination is conferred by s 81(3) and (4). [80,770.25] Amendments — s 33(1)(b) The court will only permit amendment where it is satisfied that no injustice will be done to other parties: Re Small; Westminster Bank v Trustee [1934] Ch 541. An amendment should be allowed if thereby the real question can be raised between the parties: Re Saville; Ex parte Commercial & General Acceptance Ltd (1964) 20 ABC 225. See also O 13 of the Federal Court Rules, which deals with amendment of a document in a proceeding in the court. In Croker v Commissioner of Taxation (2005) 58 ATR 327; [2005] FCA 127; BC200500522 at [17] and [18] Hely J said, in answer to the proposition that the power of amendment under the section extended to the correction of an error in the Bankruptcy Notice, that, rather, the power to withdraw and issue a fresh notice under s 41(5) met the case as was established in Seovic Civil Engineering Pty Ltd v Groeneveld (1999) 87 FCR 120; 161 ALR 543. [80,770.30] Extensions and abridgments — s 33(1)(c) “The power to extend time is a broad discretionary power. It is unfettered and must be exercised with a view to doing justice between the parties”: Abeyratne v Trkulja (1998) 90 FCR 253; [1998] FCA 1676; BC9807006. See also O 3 r 3 of the Federal Court Rules, which deals with the extension of time fixed by the rules or a judge or order, and O 35 r 7(2)(e) which deals with the varying of an order that does not reflect the intention of the court. The subsequent history of the section is covered in [80,770A.5]. [80,770.35] Reckoning of time — s 33(1)(c) For the rules governing the reckoning of time, see s 36 of the Acts Interpretation Act 1901 and O 3 of the Federal Court Rules. [80,770.40] “doing an act or thing” — s 33(1)(c) In Nilant v Machia (1997) 18 FCR 419; 148 ALR 329, a Full Court held that the time provided for by s 149 for automatic discharge from bankruptcy could not be extended by the court pursuant to s 33(1)(c). The court held that it was not a time limited by the Act for “doing an act or thing”. See [80,770.75]. [80,770.45] Extension of time for election to prosecute an action — s 33(1)(c) The 28-day period prescribed by s 60(3) for the trustee to elect to prosecute or discontinue an action after receiving notice of the action may be extended by the court pursuant to s 33(1)(c): Re Faulkner; Ex parte Official Receiver (1981) 52 FLR 109; Abeyratne v Trkulja (1998) 90 FCR 253; [1998] FCA 1676; BC9807006. In Brien v P & E Phontos (1999) 91 FCR 209; [1999] FCA 1072; BC9904503, Madgwick J held that it was possible for the court to extend the time for the election after the trustee had assigned the cause of action to the debtor’s father. His Honour rejected an argument that the trustee could not apply to extend the time under s 60(3), where he did not have the right to pursue the action. [page 124]

In Westpac Banking Corporation v Tsatsoulis [2003] FCA 406; BC200302071 the respondent sought to stay the petition on the ground that the respondent might have an action against former legal advisers. Applying Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 26; 143 ALR 396 at 401–2, Branson J held that it was not in the public interest that debtors should be able to prosecute litigation and the court needed to have shown to it a solid case that the litigation would be prosecuted and would be successful. Even in such an event, Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403; 37 FLR 341 was authority that the court had a discretion not to adjourn the petition even if a meeting of creditors had passed a special resolution requiring the respondents to execute a deed of assignment or a deed of arrangement under Pt X. In the event the court refused relief on the cited ground but stayed the petition on another ground. [80,770.50] Extension of time to disclaim property — s 33(1)(c) The court probably has power to extend the 28-day period prescribed by s 133(6) for the disclaimer of onerous property: compare Re Jones; Ex parte Lovering (1874) LR 9 Ch App 586. [80,770.55] Extension of time to call Pt X meeting — s 33(1)(c) The time prescribed by s 194 for calling a meeting under Pt X of the Act may be extended by the court under s 33(1)(c): Re Gowing; Ex parte Deputy Registrar in Bankruptcy (1985) 11 FCR 111; 61 ALR 186. See [83,115.10] and Re Posner [2007] FMCA 610; BC200702935. [80,770.60] Extension of time for notice of overstatement — s 33(1)(c) The time for giving a notice of overstatement in relation to a bankruptcy notice, under s 41(5) may be extended by the court under s 33(1)(c): Re Wilhelmsen; Ex parte Gould (1986) 11 FCR 107; 66 ALR 189. [80,770.65] Extension of time for compliance with bankruptcy notice — s 33(1)(c) The power to extend the time for compliance with a bankruptcy notice is expressly excluded by s 33(1)(c). The only source of power for the court to extend the time for compliance with a bankruptcy notice is s 41(5): James v Abrahams (1981) 34 ALR 657; 51 FLR 16. See [80,915.185]. The time for compliance with a bankruptcy notice is extended when an application is made to set aside the notice on the basis of counterclaim, set-off or cross demand: s 41(7). See [80,915.200]. [80,770.70] Extension of life of a creditor’s petition — s 33(1)(c) Section 33(1)(c) cannot be used as a source of power to extend the life of a petition after it has lapsed: Re Young; Ex parte Smith (1985) 5 FCR 20; 59 ALR 385. Despite some earlier decisions to the contrary (for example, Re Agushi; Ex parte Farrow Mortgage Services Pty Ltd (in liq) (1994) 126 ALR 704), it would now appear that the “slip” rule may be used as the basis for extending the life of a petition after it has lapsed: Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385; 133 ALR 206. While the views of the Full Court in Elyard are strictly obiter, they have been followed (on occasion with reluctance) in a number of subsequent cases: Re Howell; Ex parte DCT (1996) 70 FCR 261; Komesaroff v Law Institute of Victoria [1997] FCA 965 and Re Langridge; Ex parte Bennett [1998] FCA 879; BC9803425. See also Re van Coblyn; Ex parte Mercantile Credits Ltd (FCA, Einfeld J, 21 September 1992, unreported). Nevertheless, the “slip” must be that of the court, and not that of the creditor or the creditor’s legal adviser. In a number of cases, the “slip” occurred at the time the petition was adjourned to a date past the date on which it would otherwise have lapsed, without the court addressing the question of its extension. Hartnett FM’s observations in Commonwealth Bank of Australia v Maher [2008] FMCA 552; BC200803062 at [11] in relation to s 52(5) would seem to refer to the more common situation under the present section. See [81,015.230]. [80,770.75] Abridgment of time for automatic discharge — s 33(1)(c) The time provided for by s 149 of the Act, in relation to automatic discharge from bankruptcy, cannot be abridged by the court pursuant to s 33(1)(c). It is not a time limited by the Act for doing an act or thing: Nilant v Machia

(1997) 18 FCR 419; 148 ALR 329 (overruling a line of authorities beginning with Re Rohde (1993) 42 FCR 149; 115 ALR 705). See also [82,163.10].

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[80,770A] Alteration of filing date for statement of affairs [80,770A] Alteration of filing date for statement of affairs *33A (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. [s 33A insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 33A GENERALLY [80,770A.5] Requirements of the section The decision of Collier J in Wangman v Official Receiver, Insolvency & Trustee Service Australia [2006] FCA 202, a decision of Collier J is the first case in its jurisdiction having a bearing on the interpretation of this section. It was followed by Re Matteucci; Bankrupt Estate of Matteucci v Gollant [2013] FCA 6; BC201300062. His Honour applied the judgment of Hill J in Nilant v Macchia (2000) 104 FCR 238; 178 ALR 371; [2000] FCA 1528; BC200006504 at [29] where his Honour said: [29] … The obligation to file a statement of affairs in a public register is intended to make information concerning the bankrupt’s affairs available to creditors and, for that matter, members of the public. The former may inspect without payment of a fee, the latter only on payment of a fee. But it is in the interests of the public in the encouragement of morality in trading that the financial situation of a bankrupt debtor be open to inspection. Because, ordinarily, the administration of the estate and ultimate distribution of dividends from the estate, will be dependent upon the trustee having full details of the trade dealings and debts of a debtor, the

statement is to be made available as well to the trustee in bankruptcy. Despite the fact that the appellant had not sought the aid of s 306(1) to cure irregularities in his statement of affairs, His Honour considered that the following passage from the judgment of Weinberg J, in Nilant v Macchia, above, at [64]–[65], was appropriate: [64] Where there has been an attempt to comply with the obligations of s 54(1), whether within the 14-day period specified, or on some occasion thereafter, it is entirely apt to speak of that attempt as being a “proceeding under this Act”, and as being capable of being regarded by the court as “not invalidated” by reason of any formal defect or error … It follows that the bankruptcy will not continue for an unconscionably long period merely because of some relatively minor failure on the part of the bankrupt to comply with the strict requirements of s 54(1). [65] Regrettably, it seems to me that s 306(1) cannot be invoked in the circumstances of the present case, where no step whatever has been taken by the bankrupt in purported compliance with the requirements of s 54(1) … His Honour considered that, on the facts, the same could be said of the matter before him and declined relief. He also declined to exercise his discretion, following the principles of House v R (1936) 55 CLR 499 at 504–5; 10 ALJR 202, where Dixon, Evatt and McTiernan JJ said: It is not enough that the judge composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that [page 126] some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise his own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. As to s 306 see [84,730.10] et seq. In Macchia v Nilant (Trustee) [2006] FCA 213; BC200601181, Siopis J was primarily concerned as to whether the circumstances of the case required an order summarily dismissing the same because of the requirements of Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; 36 ALR 3; 55 ALJR 621; BC8100097, and he said of two of the cases in the section at [92]: [92] The Federal Magistrate also dealt obiter with the claim which the applicant had made in reliance on s 33A of the Act. He said that he would have been prepared to grant relief under that section had he been required to do so. However, what is significant in that case was that the applicant was still bankrupt at the time of the making and hearing of the application. Here the applicant had been discharged from bankruptcy for more than eight years when the application was made. It is plain from the terms of s 33A(3) of the Act that relief under s 33A of the Act would not be available to a person who has already been discharged from bankruptcy at the time of making an application for that relief. Accordingly, the case of Dumitrasku relied on by the

applicant has no application to this issue. Further, the Baral case relied upon by the applicant deals with annulment of bankruptcy and has no application to the construction of s 33A of the Act. In Matteuchi Lander J at [49] and [52] pointed out that the Full Court in Nilant did not have power to abridge the time limited by s 149(3) (which is not relevantly distinguishable). The court was of the opinion that power was not given by s 33(1)(c) because the time provided in s 149 for the automatic discharge from bankruptcy was not a time limited by the Act for the doing of an act or a thing. In that decision, the Full Court overruled a series of decisions at first instance commencing with Re Rohde (1993) 42 FCR 149; 115 ALR 705 to the contrary. The court had urged parliament to consider amending the statute was followed in due course by the addition of s 33A. Judge Lander said at [54] that: Subsection (2) of s 33A empowers a Court to treat the filed statement of affairs as having been filed at a time before it was actually filed by the bankrupt. The power to make the order depends upon the Court being satisfied that the person believed on reasonable grounds that the statement had already been filed at a time before it was actually filed. ____________________ *Editor’s note: Section 33A applies to statements of affairs filed at any time, whether before or after its commencement on 5 May 2003: see Sch 1 Pt 2 cl 204 of Act 131 of 2002.

[80,775] Orders and commissions for examination of witnesses 34 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 [page 127] (d) admit in evidence, saving all just exceptions, the testimony obtained at the examination or in pursuance of the commission. [s 34 am Act 44 of 1996 s 3 and Sch 2]

[80,780] Standard of proof 34A (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. [s 34A insrt Act 119 of 1987 s 15] SECTION 34A GENERALLY [80,780.10] Compare ss 140–142 of the Evidence Act 1995 (Cth).

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[80,785] Family Court’s jurisdiction in bankruptcy where trustee is a party to property settlement or spousal maintenance proceedings etc 35 (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. [subs (1A) insrt Act 115 of 2008 s 3 and Sch 2[5], opn 1 Mar 2009]

[page 128] (2) Subsections (1) and (1A) do not limit the Family Court’s jurisdiction under section 35A. [subs (2) am Act 115 of 2008 s 3 and Sch 2[6], opn 1 Mar 2009]

(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. [subs (4) insrt Act 115 of 2008 s 3 and Sch 2[7], opn 1 Mar 2009] [s 35 insrt Act 20 of 2005 s 3 and Sch 1, opn 18 Sep 2005] SECTION 35 GENERALLY [80,785.5] Matrimonial proceedings In Witt v Witt [2007] FMCAfam 681; BC200708335 O’Sullivan

FM considered the interaction between the Family Law Act 1975 and the Bankruptcy Act 1966, particularly in relation to the changes introduced by the Bankruptcy and Family Law Legislation Amendment Act 2005. His Honour notes, at [31], the changes effected by that statute, which adds, inter alia, to the definition of “matrimonial case” the definition “[p]roceedings between … (ii) the bankruptcy trustee of a bankrupt party to the marriage; with respect to any vested bankruptcy property in relation to the bankrupt party …”. The intention is to preserve vested property — which is defined in the Family Law Act s 4, in relation to a bankrupt, to be “property of the bankrupt that has vested in the bankruptcy trustee under the Bankruptcy Act 1966. For this purpose property has the same meaning as in the Bankruptcy Act 1966” — for the benefit of the creditors, but always subject to the requirements of the Family Law Act. In Witt v Witt, above, at [35]–[36] O’Sullivan FM adopts the remarks of Walters FM delivered in a paper to the 12th National Family Law Conference held in Perth in 2006 entitled, ‘Some Aspects of the Interaction of Bankruptcy with Family Law’: [35] … At paragraph 95 of that paper, His Honour in reference to how the Court should approach the “multifaceted and interwoven set of claims and disputes” that are involved in these matters said: In my opinion the answer lies in a methodical application of the basic principles relating to the resolution of property settlement disputes in Family Law Courts. [36] … … the ability of a creditor to recover his or her debt has not been given automatic or prima facie (or, indeed, any) priority over the non-bankrupt spouse’s claim. At [37] O’Sullivan FM accepted the submission, quoted at [33] of the judgment, as to the approach to be adopted in dealing with these principles: … the proper approach is to take into account all of the property of the parties to a marriage including superannuation and the vested bankruptcy property with the Trustees and determine the outcome based on the relevant provisions of the Family Law Act, including s 75(2)(ha), using the approach identified by the Full Court in Hickey & Hickey (2003) FLC 93-143.

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[80,790] Transfer of proceedings to Family Court 35A (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. [page 129] (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. [subs (2A) insrt Act 194 of 1999 s 3 and Sch 7; am Act 13 of 2013 s 3 and Sch 2 item 1, opn 12 Apr 2013]

(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)

(ii)

(iii)

(iv) (v)

a reference to the Federal Court (other than in the expression “the Court or a Judge”) included a reference to the Family Court; 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; 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; a reference to a Registrar included a reference to a Registrar of the Family Court; and 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. [subs (3) am Act 44 of 1996 s 3 and Sch 1; Act 189 of 2011 s 3 and Sch 2[1], [2], opn 4 Jan 2012]

(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. [page 130] (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. [subs (5) am Act 194 of 1999 s 3 and Sch 7; Act 13 of 2013 s 3 and Sch 2 item 1, opn 12 Apr 2013] [s 35A insrt Act 8 of 1988 s 35] SECTION 35A GENERALLY [80,790.10] General See Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131; 19 Fam LR 710; Re Boscolo; Ex parte Botany Council (1996) 62 FCR 397; 136 ALR 623 and Carter v Vos [1999] FCA 1703; BC9908005.

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[80,793] Family Court of Western Australia 35B (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. [subs (1) am Act 115 of 2008 s 3 and Sch 2[8], opn 1 Mar 2009]

(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). [subs (1A) insrt Act 115 of 2008 s 3 and Sch 2[9], opn 1 Mar 2009]

(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. [s 35B insrt Act 98 of 2005 s 3 and Sch 1, opn 18 Sep 2005]

[80,795] Enforcement of orders etc 36 (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. [subs (2) am Act 44 of 1996 s 3 and Sch 1]

(3) Where the Court commits a person to prison under this Act, the committal may be to such prison as the Court thinks fit.

[80,800] Power of Court to rescind orders etc 37 (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. [s 37 subst Act 9 of 1992 s 8]

[page 131] SECTION 37 GENERALLY [80,800.10] General Section 37(1) confers a general and unfettered discretion on the court, which should be broadly construed, notwithstanding that it must be exercised judicially: Balhorn v Colby (1982) 45 ALR 174, where the court set aside orders made in the absence of the appellant on the grounds that there was an explanation for the appellant’s non-attendance at the initial hearing. There exists under other legislation, the Federal Court of Australia Act 1976 s 27 and the Federal Court Rules O 80 a process of review of the powers of registrars to make, inter alia, sequestration orders. Nicholson J considered the limits of this power in Shortall v Keily [2005] FCA 1930; BC200511570. His Honour said at [5]: [5] I have examined the reasons for judgment of the federal magistrate, to determine for myself whether there is error in them, because the parties have all appeared before me today without representation. I have some concern as to whether the federal magistrate understood his function in dealing with a review of this nature. It is widely understood that the basis on which a registrar of a court created under ch III of the Constitution exercises the delegated power to do things such as making sequestration orders, is that there must always be open to a person affected adversely by such an order a right to have a review, and consequently to the exercise of the judicial power of the Commonwealth. The review is to be by what the High Court of Australia has described as a “hearing de novo”. It is true, as the federal magistrate pointed out, that the application for review that was lodged did not give any details as to the order that had been made, or as to the orders that were sought on review. Nevertheless, it seems to me to be clear enough that the function of the federal magistrate was to deal with the creditors’ petition as if he were dealing with it for the first time, and to determine whether he should make a sequestration order, without regard to what the registrar had done. The Full Court said in Richmond v BMW Australia Finance Ltd (No 1) [2009] FCAFC 24; BC200901378: Under s 37(1) of the Bankruptcy Act, the Court may suspend the operation of an order made under that Act but s 37(2) makes it plain that the Court does not have power to suspend the operation of a sequestration order. It is for this reason that the order made by Rares J on 16 October 2008 was an order to stay, until a further order, all proceedings under the sequestration order made by the Federal Magistrates Court against the appellant. Although its operation is stayed, the sequestration order itself remains.

[80,800.12] Staying of an order pending appeal Despite the fact that s 37(2) provides that no order may generally be made to suspend the operation of a sequestration order, the court nonetheless has the power to stay a sequestration order pending an appeal as part of the necessary jurisdiction to control its own acts. Authorities where this power has been exercised include the judgment of Yates J in Liprini v Liprini (No 2) [2011] FCA 1150; BC201107760, and the judgment of Pincus J in Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424; BC9003415, as well as Coleman v Lazy Days Investments Pty Ltd (1995) 30(1) AustLawyer 43h(note); (1994) 55 FCR 297 at 301; BC9400047, and in de Robillard v Carver (2007) 159 FCR 38; 240 ALR 675; [2007] FCAFC 73; BC200704121 at [125] and Bourke v Westpac Banking Corporation [2012] FCA 6; BC201200021 at [8]. The power to grant such a stay pending an appeal is now to be found in r 36.08 of the Federal Court Rules 2011 (see [r 36.08]. Note that s 52(3) of the statute provides the power to stay proceedings under a sequestration order for a period not exceeding 21 days. See [80,800.20]. [80,800.20] Sequestration orders: Stay The court does not have power to rescind or discharge the operation of a sequestration order: s 37(2)(a). Despite this prohibition, it has been held that a court may set aside a sequestration order in a number of situations: for example, Re Daskalovski; Ex parte Austral Brick Co Pty Ltd (FCA, Emmett J, 7458 of 1998, 23 June 1998, unreported, BC9803074); Symons v Bateman [1999] FCA 658; BC9902688 and Official Trustee in Bankruptcy v Radin [1999] FCA 1467; BC9906911 (pursuant to O 35 r 7 of the Federal Court Rules); Re Anasis; Ex parte Total Australia Ltd (1985) 11 FCR 127; 63 ALR 493 (inherent, implied or [page 132] incidental power); Re Gollan; Ex parte Gollan (1992) 40 FCR 38; 113 ALR 475 and Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447; 176 ALR 501; [2000] FCA 574; BC200002129 (exercising power of review of order made by a registrar under s 35A(5)). The court does not have power to suspend the operation of a sequestration order (s 37(2)(a)); but the court may “stay all proceedings under a sequestration order for a period not exceeding 21 days”: s 52(3). See Re Wardle; Ex parte Widen v Australia and New Zealand Banking Group Ltd (1987) 70 ALR 633; Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424. Compare Trustees of the Franciscan Missionaries of Mary v Weir, above (stay of operation of a sequestration order made by a registrar) and Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424; Coleman v Lazy Days Investments Pty Ltd (1994) 55 FCR 297 (stay pending an appeal). Also Liprini v Liprini (No 2) [2011] FCA 1150; BC201107760, and the judgment of Pincus J in Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424; BC9003415, as well as Coleman v Lazy Days Investments Pty Ltd (1995) 30(1) AustLawyer 43h(note); (1994) 55 FCR 297 at 301; BC9400047, and in de Robillard v Carver (2007) 159 FCR 38; 240 ALR 675; [2007] FCAFC 73; BC200704121 at [125] and Bourke v Westpac Banking Corporation [2012] FCA 6; BC201200021 at [8]. In Westpac Banking Corporation v Tsatsoulis [2003] FCA 406; BC200302071 the respondent sought to stay the petition on the ground that the respondent might have an action against former legal advisers. Applying Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 26; 143 ALR 396 at 401–2, Branson J held that it was not in the public interest that debtors should be able to prosecute litigation, and the court needed to have shown to it a solid case that the litigation would be prosecuted and would be successful. Even in such an event, Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403; 37 FLR 341 was authority that the court had a discretion not to adjourn the petition even if a meeting of creditors had passed a special resolution requiring the respondents to execute a deed of assignment or a deed of arrangement under Pt X. In the event the court refused relief on the cited ground but stayed the petition on another ground.

Dodds-Streeton J in Winn v Blueprint Instant Printing Pty Ltd (No 3) [2011] FCA 742; BC201104738 at [18] characterised a stay application applying Branson J’s principle in Murdaca v Accounts Control Management Services Pty Ltd [2007] FCA 964; BC200704974, as akin to an application for a stay to preserve the subject matter of litigation pending an application for special leave to appeal. Following Branson J’s view he applied Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 at 684; 69 ALR 265; 61 ALJR 102; BC8601399 as follows: In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court’s discretion. In each case when the Court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies. It is submitted that this statement governs the imposition of a stay under this section and should be applied. The availability of s 37 to rescind, discharge, or suspend the operation sequestration orders is less likely to be invoked when the administration has taken place: see Austral Brick Co Pty Ltd v Daskalovski [1998] FCA 782; BC9803074; Costaexchange Ltd v Shephard (No 2) [2011] FMCA 545; BC201105312 and Doulman v ACT Electronic Solutions Pty Ltd [2011] FMCA 232; BC20110232 at [50]–[52]. In Capital Finance Australia Ltd v Vellar [2012] FMCA 285; BC201202061 Smith FM applied the judgment of Rares J in Srinivasan v Bank of Western Australia Ltd [2012] FCA 319; BC201201710 at [7]: [7.] If I were to grant a stay in this matter, the consequence would be to suggest that every decision and order made by the Federal Magistrates Court had no validity. Were the appellant’s argument accepted, it could make it impossible for any Federal Magistrate to hear and determine [page 133] any matter filed in the Federal Magistrates Court. That is a serious step for any court to take. I am of opinion that the appellant’s argument must be rejected… [15.] In my opinion, the overwhelming public interest is that the appellant should have his estate sequestrated and controlled by an independent trustee in bankruptcy. I am unable to detect any prejudice to him in refusing a stay. Accordingly, I dismiss the interlocutory application for a stay and I order the appellant to pay the respondent’s costs of that application. The Federal Magistrate was considering a constitutional submission which would have the consequence of stopping all federal magistrates from performing the duties of their office.

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[80,805] Appeals to Federal Court of Australia

*38 [s 38 rep Act 44 of 1996 s 3 and Sch 1] *Editor’s note: The repeal of this section does not apply in relation to appeals from proceedings continued under s 28 in the Supreme Court after 16 December 1996.

[80,810] Appeals to High Court 39 [s 39 rep Act 161 of 1976 s 6]

PART IV — PROCEEDINGS IN CONNECTION WITH BANKRUPTCY DIVISION 1 — ACTS OF BANKRUPTCY

[80,910] Acts of bankruptcy 40 (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; [page 134] (e)

(f)

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; 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 a majority of the creditors present at the meeting either in person or by attorney 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)

(h)

(ha) (hb) (hc) (hd) (i) (j) (k) (l)

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; 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; if the debtor gives the Official Receiver a debt agreement proposal; if a debt agreement proposal given by the debtor to the Official Receiver is accepted by the debtor’s creditors; if the debtor breaches a debt agreement; if a debt agreement to which the debtor was a party (as a debtor) is terminated under section 185P, 185Q or 185QA; if he or she signs an authority under section 188; if a meeting of his or her creditors is called in pursuance of such an authority; if, without sufficient cause, he or she fails to attend a meeting of his or her creditors called in pursuance of such an authority; 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; [page 135] (m)

(n)

(o)

if a personal insolvency agreement executed by him or her under Part X is: (i) set aside by the Court; or (ii) terminated; 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; 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.

[subs (1) am Act 119 of 1987 s 16; Act 44 of 1996 s 3 and Schs 1, 2; Act 152 of 1997 s 3 and Sch 2; Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 80 of 2004 s 3 and Schs 1, 2, opn 1 Dec 2004; Act 20 of 2005 s 3 and Sch 3, opn 15 Apr 2005; Act 115 of 2008 s 3 and Sch 2[10], opn 1 Mar 2009; Act 31 of 2014 s 3 and Sch 4 item 9, opn 24 June 2014]

(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; (c) [repealed] (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. [subs (3) am Act 12 of 1980 s 23; Act 21 of 1985 s 13; Act 44 of 1996 s 3 and Sch 1]

[page 136] (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. [subs (4) am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (5) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(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. [subs (6) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(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. [subs (7) am Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004]

(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. [subs (7A) insrt Act 20 of 2005 s 3 and Sch 4, opn 15 Apr 2005]

(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. SECTION 40 GENERALLY [80,910.5] General The court’s jurisdiction to make a sequestration order is enlivened by the commission of an act of bankruptcy by the debtor: see s 43. While there are other acts of bankruptcy set out in s 40(1), the overwhelming majority of creditors petitions are based on the failure by the debtor to comply with a bankruptcy notice: see s 40(1)(g). [80,910.10] Commencement of bankruptcy The date of the commission of an act of bankruptcy is central to the doctrine of relation back. Under that doctrine, the bankruptcy is deemed to have relation back to, and commenced at the earliest act of bankruptcy committed by that person within six months prior to the presentation of the petition: see ss 5 and 115. A similar position applies in relation to voluntary bankruptcies. [80,910.15] Section 40(1)(a) The conveyance or assignment must be for the benefit of “creditors generally”. Hence conveyance or assignment to a class of creditors will not satisfy the section. An assignment entered into pursuant to the provisions of Pt X of the Act does not constitute an act of

bankruptcy: Bridge v Great Western Portland Cement & Lime Co Ltd (1932) 48 CLR 522. As to the effect of an assignment that does not comply with Pt X of the Act, see s 213. [80,910.17] Stay of execution of judgment or otherwise unenforceable judgment s 40(1)(a), (g) This example deals with one of a class of judgments or orders that cannot be enforced. If a judgment cannot be enforced it cannot be the subject of a valid bankruptcy notice: Wiltshire-Smith v Olsson (1995) 57 FCR 572; BC9507848; Khalifa v Wenburg [2008] FMCA 103; BC200800500. [page 137] Section 40(1)(g) requires as one of the acts of bankruptcy under s 40(1)(a) “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 … a bankruptcy notice under this Act and the debtor does not … within the time specified in the notice … comply with the requirements of the notice …”. In American Express Australia Ltd v Viscariello [2007] FMCA 1574; BC200708365 it was contended that because the execution of the judgment relied upon as an act of bankruptcy had been stayed, no act of bankruptcy had been committed in accordance with the reasoning of Evatt J in Di Giacomo; Ex parte Boral Steel Ltd (1983) 68 FLR 106. Because Burchett J had indicated in Schekeloff v Hopkins Group Pty Ltd (1989) 22 FCR 407; 86 ALR 645 that each case had to be decided on its facts, it was contended that this was merely “a device” to avoid the requirements of the judgment. It was also argued that it was relevant that the judgment was not stayed at the time of issue of the bankruptcy notice. Barnes FM, at [22], considered the judgment of Gibbs J in Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285; (1968) 13 FLR 101 in which his Honour had said “[t]he effect of these provisions is that if at the time of the issue or the service of the notice the execution of the judgment on which the notice is founded has been stayed, and the stay is still in force, so that at that time the creditor was not entitled immediately to issue execution on the judgment, the notice will be bad” (emphasis by Barnes FM). Barnes FM found at [24] “… because a stay of execution of the judgment in issue in this case was in force at the date of service of the bankruptcy notice such notice could not found the act of bankruptcy alleged in the creditor’s petition within section 40(1)(g) of the Act”. The same applied to judgments unenforceable for other reasons: Khalifeh v Wenberg [2008] FMCA 103; BC200800500, Wiltshire-Smith v Olsson (1995) 57 FCR 572; BC9507848. It was argued in The Owners of Strata Plan Number 14368 v Dickson (2008) 221 FLR 299; [2008] FMCA 1555; BC200810383 that the stay of a judgment could occur by force of the Uniform Civil Procedure Rules 2005 (NSW). Part 37 of the Rules was found to create a relevant stay in that the Part operates to allow a judgment debtor to apply for an instalment order and, if granted, the instalment order acts as a stay. Smith FM held at [14] and [15] that the application was made out. His Honour drew attention to the authorities on the meaning of “stay”, the issue concerning the requirement of s 40(1)(g) that a valid bankruptcy notice must rely upon a judgment “the execution of which has not been stayed”. His Honour continued, at [4]: It is well established that this requirement must be satisfied as at the date of issue of the notice, and the balance of authority also suggests that it must be satisfied at time of service (see Re Johnson; Ex parte Johnson v Tonkin (1994) 53 FCR 70 at 77, and other cases cited by Spender J). The requirement is also reflected in the direction in s 41(3)(b) that a notice ‘shall not be issued … 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’.

In Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331; [2003] FCA 373; BC200301950, Lindgren J (at [8]–[12]) said of the examination that the court must make: [8] In order to avoid committing the act of bankruptcy identified in para 40(1)(g) of the Act, Glew and Tresidder must satisfy the court that they have a counter-claim, set-off or cross-demand against Hunts of the kind described in that paragraph. What they must do in order to “satisfy the Court” for the purposes of para 40(1)(g) of the Act that they have the asserted counter-claim, setoff or cross demand has been variously described. The descriptions do not necessarily purport to be comprehensive definitions. To state that a debtor in receipt of a bankruptcy notice must show X does not necessarily imply that he or she need not also show Y, or that he or she will not be defeated if the creditor shows Z. [9] There are authorities suggesting that Glew and Tresidder must satisfy me of the following interrelated and sometimes overlapping matters: that they have a “prima facie case”, even if they do not adduce evidence which would be admissible on a final hearing making out that case: Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 (Ebert) at 350; Re Brink; Ex parte Commercial Banking Co of [page 138] Sydney Ltd (1980) 30 ALR 433 at 438–9; 44 FLR 135 at 141 (Brink); Gomez v State Bank of New South Wales Ltd [2002] FCAFC 101; BC200201643 at [17], [18]; that they have “a fair chance of success” or are “fairly entitled to litigate” the claim: Brink at ALR 438–9; FLR 141; Gould v Day [1999] FCA 1650; BC9907767 at [27], [28]; Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]; and that they are advancing a “genuine” or “bona fide” claim: Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]. It may be that the first and second formulations are intended to cover the same ground. In Brink Lockhart J treated (at ALR 438–9; FLR 141) the reference to a “prima facie case” in Ebert as a preference to “a fair chance of success”. See Williams v People’s Solicitors Pty Ltd [2011] FMCA 482; BC201105077 at [25]. [10] In Brink Lockhart J said (at 141) that the Court is not required to ‘undertake a preliminary trial of the counter-claim, set-off or cross demand’. But, clearly, the application of the criteria above requires the Court to make some kind of preliminary assessment, though obviously not to determine the counter-claim, set-off or cross demand finally. And in Guss v Johnstone (2000) 171 ALR 598, Gleeson CJ, Gaudron, McHugh, Kirby and Callinan JJ stated (at 606): [40] The state of satisfaction referred to in s 40(1)(g), and s 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim. [11] Plainly, in order to ‘satisfy’ the Court for the purposes of para 40(1)(g), the debtor is not required to prove, as on a final hearing, the asserted entitlement to recover from the creditor. Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not

as if the proceeding were one in which the debtor’s claim was being finally determined, but by reference to the question whether the Court should be satisfied that the debtor has a claim deserving to be finally determined. [12] Perhaps little more can usefully be said than that a debtor must satisfy the Court that there is sufficient substance to the counter-claim, set-off or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy. The same judge applied the same principle in ICM Agriculture Pty Ltd v Young [2009] FCA 109; BC200900942. The nature of the “preliminary assessment” is therefore clearly spelt out. In Humane Society International Inc v Kyodo Senpaku Kaisha Ltd (2004) 212 ALR 551; [2004] FCA 1510; BC200407830 at [23] Allsop J said: A prima facie case for relief is made out if, on the material before the court, inferences reached at a somewhat lesser degree of scrutiny than is called for in circumstances such as consideration of a no-case submission are open which, if translated into findings of fact, would support the relief claimed: see generally Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110; 4 ACSR 795 at 803; Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 at 325, 340; 200 ALR 607 at 611 [17], 626 [97]; Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390; Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 at 372–3; 136 ALR 733 at 740–1. See also Commissioner of Taxation v Oswal [2012] FCA 1507; BC201210249 at [18] per Gilmour J. [page 139] Jurisdictional facts and procedural fairness Much of the material in this section deals with jurisdictional facts, which is to say that the originating process and the particulars derived from it must be capable of laying out for both the court and the parties the elements of the jurisdiction claimed. Of particular moment is Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) (2010) 239 CLR 531; 262 ALR 569; [2010] HCA 1; BC201000230 which sets out the principle that the common law requires that a defendant is entitled to be told not only of the legal nature of the offence with which he or she is charged, but also of the particular act, matter or thing alleged as the foundation of the charge. It is submitted that the same principle relates to tort or contract, for example, where the particulars are of conduct complained of or of some other element that indicates the jurisdiction of the court. Therefore it is submitted that the originating process and the particulars derived from it must be capable of laying out for both the court and the parties the elements of the jurisdiction claimed. The court applied this principle in Abela v Victoria [2010] FMCA 172; BC201001261, a case concerning Workcover breaches. In Re Moore (a bankrupt) (1969) 113 S J 791 it was held that bankruptcy requires “proof [that] should be clear and convincing; a person should not be made bankrupt on an ambiguity.” In Abela v Victoria [2010] FMCA 172; BC201001261 this principle was taken to its logical fruition. Despite the fact that the rules require procedural requirements to be based on informality, it was held that some procedural requirements did not impart a right to have every material fact pleaded. Nonetheless, failure to provide sufficient particulars may be a requirement of procedural fairness. The case of Wylie v

McCann Worldgroup Pty Ltd [2009] FMCA 959; BC200910713 at [28]–[32] was cited (at [11]) as authority for both these propositions. One case which raises the questions and, hence the structure authority that supports them is Winn v Blueprint Instant Printing Pty Ltd [2011] FCA 723; BC201104637. The particular point that gave rise to decision was that the appellant was said to be denied in refusing her leave to appeal but by telephone and to make submissions. Dodds-Streeton J at [59] applied Gas and Fuel Corporation of Victoria v Wood Hall Ltd [1978] VR 385, Marks J described procedural fairness (or “natural justice”) as follows (at 396): There are two rules or principles of natural justice (de Smith: Judicial Review of Administrative Action 3rd ed p 134; Fairness and Natural Justice, by GDS Taylor (1977), 3 Monash Law Review 191 at p 202). The first is that an adjudicator must be disinterested and unbiased. This is expressed in the Latin maxim — nemo judex in causa sua. The second principle is that the parties must be given adequate notice and opportunity to be heard. This in turn is expressed in the familiar Latin maxim — audi alteram partem. In considering the evidence in this case, it is important to bear in mind that each of the two principles may be said to have sub-branches or amplifications. One amplification of the first rule is that justice must not only be done but appear to be done; (Lord Hewart, CJ in R v Sussex Justices; ex parte McCarthy, [1924] 1 KB 256 at p 259; [1923] All ER Rep 233). Sub-branches of the second principle are that each party must be given a fair hearing and a fair opportunity to present its case. Transcending both principles are the notions of fairness and judgment only after a full and fair hearing given to all parties. Dodds-Streeton J held at [60] that: While the content and scope of the procedural fairness requirements, including the requirement of an “opportunity to be heard”, cannot be determined solely by reference to statute, they must nonetheless be considered in light of the statutory context (Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 94 per McHugh J). However, relief has declined on the ground that the particular mode of delivery was a matter of discretion which was to be exercised in accordance with the principles of House v R (1936) 55 CLR 409 at 504; 10 ALJR 202. One area in which a solicitor-client debt might not properly give rise to a bankruptcy notice is where it was raised upon an indebtedness that arose from the provision of services in the capacity as executor, on the implicit assumption that the estates and not the executor would be liable for payment of the fees. [page 140] These facts were explored in Liprini v Kerem [2010] FMCA 244; BC201002235 at [24]–[27]. As the court put it at [27]: [27] It appears to me that, if I were satisfied that Dr Liprini engaged Law Partners to provide their legal services to him purely in his representative capacities, and without incurring personal liability for their fees, then it would be appropriate to set aside the bankruptcy notice. This would make clear that service of the notice was an irrelevance to any liability of the estate to insolvency proceedings, and would also make clear that Dr Liprini’s non-compliance with the notice could not give rise to an act of bankruptcy upon which a petition for insolvency administration of his personal estate could be based. In effect, it would establish that a relevant indebtedness upon which s 40(1)(g) could operate did not exist, so that the notice was invalidly issued.

The court was not so satisfied: [39]. There is, however, no other authority that takes the matter further at present. In Shannon v Official Receiver [2011] FMCA 462; BC201104443 a similar attempt was made to establish that the relevant indebtedness did not exist on the ground that there had indeed been a release which operated as a novation. Raphael FM observed at [8]: [8] … What that later agreement was intended to be was an accord and satisfaction but in this case there was an accord without satisfaction and that, as indicated by Morris v Baron & Company [1918] AC 1; [1917] WN 297 at [35]: Has no legal affect and the original cause of action is not discharged as along as the satisfaction agreed upon remains executory. His Honour applied Taxation, Deputy Commissioner of v Hadidi (1994) 51 FCR 453 and Reasonable Endeavours Pty Ltd v Dennehy [2002] FCA 1472; BC200207167, adding at [11]: [11] In my view the settlement agreement in the instant case constitutes a similar postponement of the creditor’s recourse to its judgment until the accord had been satisfied. When it was not satisfied and when the agreement was terminated the creditor was entitled to return to his judgment and enforce it in the manner that it did giving credit for the amounts paid. Wilcox J in Hadidi said: The major question argued at the hearing of this appeal was that decided by the learned primary Judge Sweeney J the nature of the agreement made between Ali Oygur, on behalf of Mr and Mrs Hadidi, and Ray South, of the Australian Taxation Office, in November 1989. In particular the question was whether Mr South agreed that the Deputy Commissioner would abandon his claim to enforce the default judgments he had obtained against Mr and Mrs Hadidi in return for their mere promise to pay a total sum of $75,000, or whether the agreement to abandon the judgment was conditional upon actual payment of $75,000. Sweeney J held that the abandonment was made in return for a mere promise to pay. I agree with Beaumont and Heerey JJ in preferring the alternative view. It seems to me inherently unlikely that an informed creditor, holding judgments for about $100,000 against two debtors, would agree to abandon those judgments in return for a mere promise to pay $75,000. That promise might be broken immediately; the debtors might fail to make even the first payment. Yet, according to the view of the case adopted by Sweeney J, the creditor would be precluded from enforcing either judgment. He would have to start the litigation again; commencing fresh proceedings, presumably only for $75,000. From a creditor’s point of view, there is little advantage in that type of arrangement. The Western Australian Court of Appeal in its judgment (Newnes, and Murphy JJA & Mazza J) in Scaffidi v Perpetual Trustees Victoria Ltd [2011] WASCA 159; BC201105663 deals with accord and satisfaction commencing at [26]. That Court noted the judgment of Fullagar J in Scott v English [1947] VLR 445; [1947] ALR 284 at 452 and the summary of his conclusions in Osborn & Bernotti [page 141] t/as G04 Productions v McDermott t/as RA McDermott & Co & Karmine Pty Ltd [1998] 3 VR 1; BC9601052 at 10 where three possibilities were held to arise out of this type of compromise: Thus, there are three possibilities, not two. First, there is the mere accord executory which, on the

authorities, does not constitute a contract and which is altogether unenforceable, giving rise to no new rights and obligations pending performance and under which, when there is performance (but only when there is performance), the plaintiff’s existing cause of action is discharged. Secondly, at the other end of the scale is the accord and satisfaction, under which there is an immediate and enforceable agreement once the compromise is agreed upon, the parties agreeing that the plaintiff takes in satisfaction of his existing claim against the defendant the new promise by the defendant in substitution for any existing obligation. Somewhere between the two, there is the accord and conditional satisfaction, which exists where the compromise amounts to an existing and enforceable agreement between the parties for performance according to its tenor but which does not operate to discharge any existing cause of action unless and until there has been performance. Where there is a mere accord executory, no suit can be maintained upon the compromise unless and until there has been performance, and then suit is ordinarily unnecessary. Upon default in performance, the plaintiff’s existing cause of action continues unaffected. With accord and satisfaction, either party may sue upon the compromise, but only on the compromise and for nothing else: the original cause of action has gone. Where there is accord and conditional satisfaction, the plaintiff is bound to await performance and accept it if tendered, but if there be no performance, then the plaintiff may proceed according to general principles called into play when any agreement is repudiated: the plaintiff may either treat the agreement (the accord) as at an end and proceed on his original cause of action; or he may, at his option, sue on the compromise agreement, in place of the original cause of action… (emphasis added) In Nissho Iwai Australia Ltd v Shrian Oskar [1984] WAR 53 at 58 Brinsden J noted: I am of the opinion that [the compromise] was no mere accord executory but a contract intended to create new antecedent obligations, but effected no absolute discharge of the cause of action but only if the defendant performed his promise. The defendant in this case failed to perform his promise and so that left the plaintiff in the position that it could sue on the new contract or rescind the new contract and proceed on the original cause of action. Whether a stay of execution should be refused or granted The usual approach is that a successful litigant is entitled to the fruits of his judgment. Holt AJ in Deputy Commissioner of Taxation v Woods (No 2) [2010] TASSC 67; BC201009964 has recently addressed this question and has taken into account the legal history. But the learned judge dealt with the stay as a means of preventing bankruptcy. The judge adopted the decision in Snow v Deputy Federal Commissioner of Taxation (WA) (1987) 14 FCR 119; 12 ALD 257; 70 ALR 672; 87 ATC 4078 quoting the decision of French J (as he then was) as follows: It may generally be concluded from the preceding review, that the power of State courts to stay recovery proceedings instituted in them under the ITAA is well established and that courts exercising it have regard to the following propositions: 1 The policy of the ITAA as reflected in its provisions gives priority to recovery of the revenue against the determination of the taxpayer’s appeal against his assessment. 2 The power to grant a stay is therefore exercised sparingly and the onus is on the taxpayer to justify it. 3 The merits of the taxpayer’s appeal constitute a factor to be taken into account in the exercise of the discretion (although some Judges have expressed different views on this point). 4 Irrespective of the legal merits of the appeal a stay will not usually be granted where the taxpayer is party to a contrivance to avoid his liability to payment of the tax.

[page 142] 5 6 7

A stay may be granted in a case of abuse of office by the Commissioner or extreme personal hardship to the taxpayer called on to pay. The mere imposition of the obligation to pay does not constitute hardship. The existence of a request for reference of an objection for review where appeal is a factor relevant to the exercise of the discretion.

This valuable precedent is useful. The principal most likely to be relied upon will be that in 5, extreme personal hardship. [80,910.20] “intent to defeat or delay creditors” — s 40(1)(c)(iii) It is enough to satisfy the requirements of s 40(1)(c)(iii) if it is shown that the debtor “must have known that the likely result of his absenting himself” would result in the defeat or delay of his or her creditors: Barton v DCT (Cth) (1974) 131 CLR 370; 48 ALJR 407, followed in Re Smith; Ex parte Kern Corp Ltd (FCA, Pincus J, No QLD PET 373/85, 19 June 1985, unreported). See also Re Vassis; Ex parte Leung (1986) 9 FCR 518 and Thai v DCT (1994) 53 FCR 252; 123 ALR 570; 34 ALD 132. The debtor’s reason for departure or staying away must be “so much the most probable explanation of the debtor’s conduct as to make it in effect the only probable one”: Re a Debtor [1952] 1 All ER 519 at 520–1; Barton v DCT (Cth), above. In Puels v Excelerate Funding Pty Ltd (2005) 214 ALR 616; [2005] FCAFC 38; BC200501182 a debtor was held to have absented himself with intent to defraud his creditors. Lander J expressed the view (with which Weinberg and Jacobson JJ agreed) that the test was rather to demonstrate an instance where such would be found to have been the case. Conti J held in Deputy Commissioner of Taxation v Wachjo (2005) 216 ALR 682; 59 ATR 253; [2005] FCA 561; BC200502922, applying his earlier decision of Edge Technology Pty Ltd v Wang [2000] FCA 1586; BC200006732: Section 40(1)(c) of the Bankruptcy Act requires a physical act that is accompanied by the necessary intent in order to satisfy the notion of defeating or delaying the debtor’s creditors. A useful general statement on the subject is contained in the judgment of Clyne J sitting as judge in the Federal Court of Bankruptcy in Re Andrews; Ex parte Manning (1966) 8 FLR 56 at 58: Intent to defeat or delay is a question of fact and must be alleged by a petitioning creditor and proved. It is seldom that the intent of a debtor can be proved by a debtor’s own statements, and it is usually shown by inference from the circumstances in which the debtor departed from his dwelling house or place of business. The evidence necessary to prove intent must differ according to the circumstances of each particular case. The conduct of a debtor in various forms may give rise to a presumption of intent obliging the debtor to rebut the presumption, but in the end this intent must be established. Furthermore, as I pointed out in Edge Technology at [5]: In considering the conduct of the debtor against a background of all the facts and circumstances, it is clear that the Court must infer that a person intends the necessary consequences of his or her acts: Ex parte Goater; Re Finney (1874) 30 LT 620 at 621 per Mellish LJ. His Honour also referred to Barton v Deputy FCT (1974) 131 CLR 370 at 375; 48 ALJR 407 as referring to the requisite intent needed by the section. [80,910.25] Section 40(1)(d) If a petition is based on the act of bankruptcy set out in s 40(1)(d), the

affidavit verifying it must state those matters set out in O 77 r 17. If it is based upon the writ or warrant of execution being returned unsatisfied, it must have attached to it a sealed or certified copy of the writ or warrant of execution returned unsatisfied. This requirement goes further: see [80,910.17]. The material in the affidavit must be sufficiently particular to set out the case which the other party has to meet. Failure to provide sufficient particulars may be a requirement of procedural fairness: Wylie v McCann Worldgroup Pty Ltd [2009] FMCA 959; BC200910713 at [28]–[32]. [page 143] [80,910.26] Return of execution What is the “return” of the warrant, whether under the rules applicable in Queensland or otherwise? The courts act on the principle set out in Re Moore (a bankrupt) (1969) 113 S J 791, where it was held that bankruptcy requires “proof [that] should be clear and convincing; a person should not be made bankrupt on an ambiguity.” This principle was cited in what is now the latest case dealing with this question: Aluma-Lite Products Pty Ltd v Reynolds [2010] FMCA 122; BC201001137 at [63]. Another case cited in Aluma-Lite (at [72]), namely Re Peddler Volume XVII The Australian Law Times 17 August 1895, explains the usual background and the principle that the courts have applied. In that case, the Victorian Full Court held: The next question is whether the Insolvency Act, s 37(v) requires that before an act of insolvency is complete, notice of the seizure should be conveyed in some way expressly to the debtor. We think that is not so. The very object of that section appears to be to protect the general body of creditors against any contrivance of the insolvent not to be aware of the seizure. The debtor knows that there is a judgment against him, and that if he does not satisfy it his goods may be seized. If the notice were required, the debtor might keep out of the way and thus defeat the very object of the subsection. We think, therefore, that the notice in question is not necessary, and that the act of insolvency might be complete though the debtor had no notice of the seizure Therefore, in Aluma-Lite Burnett FM held that service was duly effected under the rules and that furthermore, that there was no requirement that service be personal. Similar rules exist in all jurisdictions. It followed that an act of bankruptcy was held to have been committed, after which execution under the process of the court occurred. [80,910.27] Section 40(1)(daa) Section 40(1)(daa) was inserted by the Bankruptcy Legislation Amendment Act 2002 No 131 and adds a debtor’s petition as an act of bankruptcy. The most used act of bankruptcy remains the failure to comply with a bankruptcy notice. [80,910.30] Section 40(1)(g) The act of bankruptcy is committed by the non-compliance with a bankruptcy notice when the time prescribed in the notice expires: see Re Prow; Ex parte Dalgety Farmers Ltd (1985) 5 FCR 233. [80,910.35] Bankruptcy notice — s 40(1)(g) See [80,915.5]. Discretionary Aspects This subsection provides the court with authority to regulate certain procedural matters which might determine the fate of the application without adjudication. Clapham v Commonwealth Bank of Australia [2012] FCA 1452; BC201209930 at [3]. The applicants had an application for security for costs which for obvious reasons would terminate any action without hearing the merits. As the court (Nicholas J) explained:

… regardless of how strong Mr and Mrs Clapham’s cross-claim might be, it could not provide a basis for an order setting aside the bankruptcy notice, even though it might provide a basis for an order either dismissing or adjourning any creditor’s petition that might later be issued. In particular, her Honour was not satisfied that Mr and Mrs Clapham could not have set up the crossclaim in the proceeding in which the judgment was entered: see s 40(1)(g) of the Bankruptcy Act 1966. Accordingly the court declined to make an order for security for costs. [80,910.40] Act of bankruptcy — s 40(1)(g) The failure to comply with a bankruptcy notice is an available act of bankruptcy even where the judgment upon which it was based is subsequently set aside: Re Hanby; Ex parte Flemington Central Spares Pty Ltd (1967) 10 FLR 378; Re Vella; Ex parte Seymour (1983) 48 ALR 420; 67 FLR 287; Zagoridis v Q’Plas Group Pty Ltd (1990) 27 FCR 108; 98 ALR 718. However, if the time for compliance with the bankruptcy notice expires, but it is later held that the bankruptcy notice is a nullity, no act of bankruptcy will have been committed: Re Pollard; Ex parte Lensing Management Co Pty Ltd (1991) 33 FCR 284. As to the situation where the creditor commits an act of bankruptcy during the time for compliance with the bankruptcy [page 144] notice, see Re a Debtor [1912] 2 KB 533 and s 123. Because of NSW legislative reform such an event was argued, unsuccessfully, to have occurred in Klewer v Walton [2004] FCAFC 284; BC200407309 at [15]. In Patane v Asteron Life Ltd [2004] FCA 232; BC200401022 at [101] Lander J said of this section, and distinguishing Re Schmidt; Ex parte Anglewood Pty Ltd (1967) 13 FLR 111 (Gibbs J) which concerned the making of a sequestration order: An application under s 40(1)(g) raises different issues. The debtor will have committed an act of bankruptcy if the bankruptcy notice is not complied with. That entitles the judgment creditor to issue a petition based on that act of bankruptcy. The debtor can still satisfy the court that he or she is able to pay his or her debts (s 50(2)) at the hearing of the judgment debtor’s petition. At that time the course suggested by Gibbs J may for the reasons given by him be appropriate. However in my opinion an applicant under s 40(1)(g) of the Act must satisfy all of the elements of s 40(1) (g) and establish to the requisite level of satisfaction that he or she has a counter-claim set-off or cross demand equal to or exceeding the amount of the judgment debt. Abuse of process In Seller v Deputy Commissioner of Taxation (2011) 282 ALR 80; [2011] FCA 865; BC201105744 Flick J considered the circumstances which might give rise to an abuse of process. None of those circumstances were apparent in this case. His Honour stated that if such circumstances were alleged, however, they would be subject to a substantial burden of proof, especially if the alleged action was economic duress (such as in this case). [80,910.45] Time for compliance with bankruptcy notice — s 40(1)(g) If the time for compliance with the bankruptcy notice expires on a weekend, a public holiday or a bank holiday, then the time for compliance is the next day that is not a weekend, a public holiday or a bank holiday: s 36(2) of the Acts Interpretation Act 1901. Time is calculated exclusive of the day upon which the notice was served: s 36(1). The provisions for reckoning time in the Federal Court Rules have no application to the time fixed for compliance with a bankruptcy notice. [80,910.50] “creditor” — s 40(1)(g) A bankruptcy notice may be issued on the application of joint

creditors: compare Re McLeod; Ex parte Beneficial Finance Corp Ltd (FCA, Branson J, SN 267/95, 5 October 1995, unreported, BC9502786). A bankruptcy notice probably cannot be issued on the application of separate creditors: see definition of “creditor’s petition” in s 5(1). For a discussion of the meaning of the word “creditor” see Abigroup Ltd v Abignano (1992) 39 FCR 74; 112 ALR 497. As to the situation where the creditor is a trustee, see Aluma-Lite Products Pty Ltd v Simpson [1999] FCA 1105; BC9904983. Reid v Hubbard [2003] FCA 1424; BC200307440 dismissed allegations that a creditor was not bona fide. [80,910.55] Assignee of creditor — s 40(1)(g) See [80,910.180]. [80,910.60] “final judgment or final order” — s 40(1)(g) In Clyne v DCT (1984) 52 ALR 657, Gibbs CJ, with whom all of the other members of the court agreed, held: A final judgment within the meaning of the provisions of the Bankruptcy Act has been held to mean a judgment obtained in an action by which the question whether there was a pre-existing right of the plaintiff against the defendant is ascertained or established: Opie v Opie (1951) 84 CLR 362 at 372; 25 ALJR 411. In other words it is a judgment which finally disposes of the rights of the parties: see Licul v Corney (1976) 180 CLR 213; 8 ALR 437; 50 ALJR 439 at 444. The fact that the judgment is subject to appeal or that it may later be set aside or become inoperative does not mean that it is not final: Re Hanby; Ex parte Flemington Central Spares Pty Ltd (1967) 10 FLR 378. An order granting liberty to apply does not detract from what would otherwise be a final judgment or a final order: Abigroup Ltd v Abignano (1992) 39 FCR 74; 112 ALR 497. Reid v Hubbard [2003] FCA 1424; BC200307440 decided that a decision of a magistrate dismissing an application to set aside a bankruptcy notice was a final judgment, following the [page 145] principles of A-Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 120 FLR 277; 17 ACSR 176; BC9504730, holding at [7] that “[the] judgment is closely analogous to that on an application to set aside a statutory demand against a corporation, which has been held by the New South Wales Court of Appeal to be a final judgment”. The words “final judgment or final order, being a judgment or order the execution of which has not been stayed”, within the language of ss 40(1)(g) and 41(3)(a) of the Act, have a particular application in the case of judgments under s 182(3) of the Industrial Relations Act 1996 (NSW). Such judgments require that a certificate be lodged in the registry of a court having jurisdiction to enforce the judgment. Where this is not done the judgment is not final because it is not a judgment upon which the creditor is in a position to enter execution. So held Plant v Ken Smith Electronics Pty Ltd [2000] FMCA 7 at [14] applying Abigroup Ltd v Abignano (1992) 39 FCR 74 at 80–1; 112 ALR 497, also In the Marriage of Cawood (2000) 27 Fam LR 403; [2000] FCA 1786; BC200007516 and recently applied in Mejias v Federal Express (Aust) Pty Ltd [2007] FMCA 1817; BC200709948. The same language applies to a BCIPA (a statutory scheme operating in Queensland described as the Building and Construction Industry Payments Act 2009 (Qld)). See Adams v Northern Plumbing (NQ) Pty Ltd [2010] FMCA 224; BC201010368. Judge Jarrett in Anne v Ask Funding Ltd [2014] FCCA 1153; BC201400627 said at [8], which remark conveniently summarises the principle: “It is right to say that the Court has a discretion to go behind a debt which is said to found the issue of a bankruptcy notice. That discretion can be enlivened

even where the debt is based upon a judgment of another court. But the authorities, and Wren v Mahony (1972) 126 CLR 212; [1972] ALR 307; BC7200360 is but one of them, demonstrate that where there has been a finding by a court on the merits, then it is unlikely that a bankruptcy court will go behind a judgment. The judgment is likely to be seen as satisfactory proof of the petitioning creditor’s debt. A court is likely to exercise its discretion more readily if the judgment that is sought to be attacked is a judgment which has gone by default.” [80,910.63] Attachments: copy of judgment Regulation 4.02 of Bankruptcy Regulations 1996 requires that a bankruptcy form must include “a copy of the judgments or orders relied upon by the creditor”. In Palasty v Tomko [2008] FMCA 10; BC200800158 the applicant argued that the omission of the odd-numbered pages rendered the notice invalid. The Federal Magistrate held at [34]–[35] that a “certified, sealed or certified copy of the (final) judgment be attached, being in respect of ‘the final judgment specified’ ‘on the approved form’ (in context form 1)” complied with that requirement. Such a case was distinguished from cases such as Re Scerri (1998) 82 FCR 146 and similar cases where no judgment was attached. The case distinguishes also the reasons for judgment and the certified judgment holding that the former in not required by the form but the latter is. [80,910.65] Costs order — s 40(1)(g) A costs order and determination of the taxing officer is a final order for the purposes of s 40(1)(g). See [80,915.95]. [80,910.70] Order made under Bankruptcy Act — s 40(1)(g) An order made by the court in the exercise of jurisdiction under the Bankruptcy Act 1966 is deemed to be a final judgment or order: s 40(3)(e). This provision was enacted to overcome the decision in Re Pannowitz; Ex parte Wilson (1975) 6 ALR 287; 38 FLR 184. [80,910.75] Maintenance order — s 40(1)(g) An order for payment of arrears of maintenance under the Family Law Act 1975 is deemed to be a final order: s 40(3)(f). This provision was enacted to overcome the decision in Opie v Opie (1951) 84 CLR 362; 25 ALJR 411. [80,910.80] Going behind the judgment or order — s 40(1)(g) See [81,015.20]. [80,910.85] More than one judgment or order — s 40(1)(g) See [80,915.90]. [80,910.87] “execution” — ss 40(1)(g), 41(3) The word “execution” has two meanings. In its widest sense, it means the enforcement or giving effect to the judgments or orders of courts of justice. In its narrow sense, it means the enforcement of those judgments or orders by a public [page 146] officer under the writs of fieri facias. There is conflicting authority as to the sense in which the word is used in s 40(1)(g). On the one hand, in Re Exell; Ex parte Martin (1995) 62 FCR 337; 134 ALR 623, Olney J held that the word was used in its widest sense. On the other hand in Re Pannowitz; Ex parte Wilson (1975) 6 ALR 287; 38 FLR 184, Reasonable Endeavours Pty Ltd v Dennehy (2001) 107 FCR 144; 182 ALR 195 and In the Marriage of Cawood (2000) 27 Fam LR 403; [2000] FCA 1786; BC200007516, it was held that the word is used in its narrower sense. The relevance of the distinction is that under the wider test, if there is an alternative method of enforcement, the judgment or order will not be one the execution of which has been stayed. As was pointed out in Philips Electronics Australia Ltd v Roberts [2006] FMCA 911; BC200605415 that question was best resolved by the application of Beson v Dean [1997] FCA 1320; BC9706376 where the court asked the question whether the creditor was entitled to immediate execution. See [80,910.90].

[80,910.90] Execution of judgment must not be stayed — s 40(1)(g) A bankruptcy notice based on a judgment or order, the execution of which has been stayed is a nullity. Further, the requirement that the judgment or order not be stayed must be satisfied both at the time of the issue of the bankruptcy notice and at the time of its service: Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285; (1968) 13 FLR 101. A stay may arise, otherwise than by reason of an order of the court. For example, in Re Johnson; Ex parte Johnson v Tonkin (1994) 53 FCR 70; 123 ALR 607, the stay arose by virtue of a provision of the Queensland Supreme Court Rules providing for leave of the court to issue execution where six years had elapsed since the date the order was given. There is a conflict of authority as to the effect of a similar requirement under the Rules of the Supreme Court of Victoria: see Re Exell; Ex parte Martin (1995) 62 FCR 337; 134 ALR 623 and Reasonable Endeavours Pty Ltd v Dennehy (2001) 107 FCR 144; 182 ALR 195. The conflict arises from different interpretations of the word “execution” in 40(1) (g) (see [80,910.87]). For the purpose of ss 41(3)(b) and 40(1)(g), execution of a judgment or order is deemed to be stayed where a judgment creditor is not “in a position to issue immediate execution upon it”: Re Solomon; Ex parte Reid (1986) 10 FCR 423; 66 ALR 571. The meaning of the term execution was dealt with in Philips Electronics Australia Ltd v Roberts [2006] FMCA 911; BC200605415. Driver FM held at [9] that: [9] The words in s 40(1)(g) of the Bankruptcy Act, “the execution of which has not been stayed” require that the person issuing the bankruptcy notice should be in a position to issue immediate execution on the judgment or order at the time of the application for the issue of the notice. Execution may be stayed notwithstanding that there is not an express stay by order of the Court: Re Seers (1955) 17 ABC 11. If execution on a judgment has been stayed s 41(3)(b) of the Bankruptcy Act prevents the Official Receiver from issuing a bankruptcy notice. His Honour said that, as in [80,910.87], the question was whether to elect a wide or narrow construction of the term was to be employed. Authority, particularly the judgment of Branson J in Beson v Dean [1997] FCA 1320; BC9706376, supported the view that the question was best resolved by asking whether the creditor was in a position to issue immediate execution upon the judgment upon which the bankruptcy notice was founded. The judgment of Branson J in Beson v Dean, above, had been applied in DL Collections v Nguyen [2006] FMCA 427; BC200602213 at [5]–[8]. Another example is provided by Slater v Watts [2007] FMCA 1722; BC200708949 that dealt with a provision of the Uniform Civil Procedure Rules 2005 (NSW) r 9.11, which provided that a judgment on a cross-claim was not to be entered save by leave of the court. Applying DL Collections v Nguyen [2006] FMCA 427; BC200602213 it was held that the applicant was entitled to an order setting aside the bankruptcy notice. [80,910.95] Effect of instalment order — s 40(1)(g) Several state statutes provide that an instalment order, while it remains in force operates “as a stay of enforcement of the judgment” in respect of which it was made. Thus, if an instalment order comes into operation before the issue or service of a bankruptcy notice, the notice will be bad: ss 40(1)(g) and 41(3)(b); Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285; (1968) 13 FLR 101. If, however, by the time the instalment order operates, the act of bankruptcy has been committed, the judgment creditor is not disqualified [page 147] from presenting the petition because s 41(1)(a) and (b) do not require, as does s 40(1)(g), that the debt shall be one, the execution of which has not been stayed: Re Agrillo; Ex parte Bankrupt (1976) 29 FLR 484; Re Padagas; Ex parte Carrier Air-Conditioning Pty Ltd (1977) 30 FLR 170; Re Williams; Ex parte General Credits Ltd (1983) 68 FLR 202; Re Frank; Ex parte Piliszky (1987) 16 FCR 396; 77

ALR 511; Re Vittoria Di Giacomo; Ex parte Boral Steel Ltd (1983) 68 FLR 106; Re Pollack; Ex parte DCT (1991) 32 FCR 40; 103 ALR 133. [80,910.100] “comply with the requirements” — s 40(1)(g) By para 3 of the prescribed form of bankruptcy notice, a debtor is required to pay to the creditor the amount of the debt; or to make an arrangement to the creditor’s satisfaction for settlement of the debt. [80,910.105] Tender of amount claimed — s 40(1)(g) In order to be effective, the tender must be unconditional. A creditor cannot rely on the failure by the debtor to comply with a bankruptcy notice in circumstances where it has rejected a valid tender: Owners Corp Strata Plan 3438 v Hudson [1998] FCA 762; BC9803067 (citing Alcatel Australia Ltd v PRB Holdings Pty Ltd (1998) 27 ACSR 708). [80,910.110] Arrangement for settlement of the debt — s 40(1)(g) If within the time for compliance with a bankruptcy notice, the debtor and creditor enter into an arrangement to the creditor’s satisfaction for settlement of the debt, the debtor will not commit an act of bankruptcy. That is so even where the debtor does not honour the arrangement: Deputy Commissioner of Taxation v Catanese (1999) 42 ATR 247; [1999] FCA 564; BC9904188; Re Deane; Ex parte Van Reesema [1962] ALR 89; (1961) 20 ABC 259. As to the meaning of the word “arrangement” see Deputy Commissioner of Taxation v Catanese, above. [80,910.115] Service of bankruptcy notice on debtor — s 40(1)(g) See [80,915.25]. [80,910.120] Time for service of a bankruptcy notice — s 40(1)(g) See [80,915.215]. [80,910.125] “counter-claim, set-off or cross demand” — s 40(1)(g) In Re Judd; Ex parte Pike (1924) 24 SR (NSW) 537, Maughan AJ stated: “There is no authority of which I am aware deciding what limits (if any) ought to be placed on the words “counter-claim, set-off or cross demand”. I think that the legislature by the word “counterclaim” probably referred to those claims which might be the subject of a counter-claim in equity and by the word “set-off” to those claims which might be the subject of a set-off at common law. The other term “cross-demand” however, is not a technical term and must in my opinion refer to claims other than those which would be comprised in the two expressions “counter-claim” and “set-off”. This passage was cited with approval by Lockhart J in Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433; 44 FLR 135. This general approach is supported by the comprehensive judgment of Wilson FM in Willoughby v Clayton Utz (2008) 102 ALD 640; [2008] FMCA 627; BC200803585 at [47] which takes similar principles. The authorities cited by his Honour indicate that to establish a counterclaim, set-off or cross demand that they could not have set up in the proceedings in which the judgment was obtained it is necessary to establish a prima facie case. See Re Gould; Ex parte Skinner (1983) 72 FLR 393 where Fitzgerald J considered that the applicants had to show that they had a prima facie case. The court must be satisfied that the debtor has a fair chance of success. In Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346; [1960] ALR 691; (1960) 34 ALJR 182; BC6000660 the High Court held that a debtor must establish a prima facie case. Note that this judgment is consistent in its principles with Scanlan v Douglas, cited below. Before Willoughby v Clayton Utz, above, that case might be confined to its facts, but that is much less likely when one examines the other authorities relied upon by Wilson FM as well as Ebert v Union Trustee Co of Australia Ltd, namely Re Ling; Ex parte Ling v Commonwealth of Australia (1995) 58 FCR 129; 130 ALR 596 as well as the historical approach in Re Deen; Ex parte Deen v Muller (1995) 58 FCR

441 at 442. [page 148] In Field v Jenolan Caves Resort Pty Ltd (No 2) [2008] FMCA 1701; BC200811655, Raphael FM held: [8] Any set off, counter claim or cross-demand that is utilised by a debtor for the purposes of s 40(1)(g) and s 41(7) of the Act must be established to be an effective set off which exists at the time of the application to set aside the bankruptcy notice; Re GEB (1903) 2 KB 340 at [348], Vogwell v Vogwell (1939) 11 ABC 83. The courts have cast doubt as to whether a setoff that is merely contingent or inchoate can be an effective setoff for the purposes of s 40(1)(g); Guss v Johnson (2000) 171 ALR 598. In that case the High Court said at [40]: The state of satisfaction referred to in s 40(1)(g) and 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to wait for determination of the claim. [9] In that case the views expressed by the primary judge about the cross-claim involved, including its inchoate nature and the delay in it being brought, were accepted by the High Court as correct reasoning; Guss at [47]. Delay was also considered to be a matter of importance in Re Naghten & Anor v Commonwealth Bank of Australia unreported Federal Court, Foster J, 21 May 1998… What must be proven? In Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331; [2003] FCA 373; BC200301950 Lindgren summarized at ALR 333–4: There are authorities suggesting that Glew and Tresidder must satisfy me of the following interrelated and sometimes overlapping matters: that they have a “prima facie case”, even if they do not adduce evidence which would be admissible on a final hearing making out that case: Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 (Ebert) at 350; Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433 at 438–9; 44 FLR 135 at 141 (Brink); Gomez v State Bank of New South Wales Ltd [2002] FCAFC 101; BC200201643 at [17], [18]; that they have “a fair chance of success” or are “fairly entitled to litigate” the claim: Brink at ALR 438–9; FLR 141; Gould v Day [1999] FCA 1650; BC9907767 at [27], [28]; Re Capsanis; Capsanis v Owners — Strata Plan 1 1727 [2000] FCA 1262; BC200005275 at [11]; and that they are advancing a “genuine” or “bona fide” claim: Re Capsanis; Capsanis v Owners — Strata Plan 1 1727 [2000] FCA 1262; BC200005275 at [11]. Equitable setoff Frequently, such claims can arise by operation of law. See Clear Hall v Moloney (2012) 264 FLR 299; [2012] FMCA 216; BC201203048 at [12] et seq. Driver FM pointed to an important principle which is obtained both from equitable principles and s 12 of the Conveyancing Act (NSW) which requires that a chose in action of debt is taken subject to all equities. In this case these equities founded an equitable set off of which His Honour explained the principles, which includes the principle of mutuality in set-offs, from at [14] et seq: [14] The applicants rely upon Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd

(Receiver & Manager Appointed) (1997) 42 NSWLR 462 at 481–483 (especially at 482B–E), in which Gleeson CJ (as his Honour then was), Handley JA and Brownie A-JA confirmed that a legal assignee of a debt was subject to the same “equities” (including cross-claims or set-offs) to which the assignor had been subject. At 482D–E, their Honours identified that “the merits [of the principle] are clear” and quoted with approval from the judgment in Government of Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199 at 12, where Lord Hobhouse stated: … It would be a lamentable thing if it were found to be the law that a party to a contract may assign a portion of it, perhaps a beneficial portion, so that the assignee shall take the benefit, wholly discharged of any counter-claim by the other party in respect of the rest of the contract, which may be burdensome. [page 149] [15] More recently, his Honour Brereton J gave detailed consideration to the principle and the application of s 12 of the Conveyancing Act in Franks v Equitiloan Securities Pty Ltd [2007] NSWSC 812, especially at [23]–[33]. [16] Making reference to the express terms of s 12 of the Conveyancing Act, Brereton J stated at [25]: I accept that the reference to “equities” in this context is not to be narrowly interpreted, and not only includes defences which may be raised by way of set-off, but also extending to crossclaims and counter-claims that the person subject to the assigned obligation is entitled to set up in opposition to the claim of the person entitled to its benefit… [17] At [33], Brereton J concluded the analysis in the following terms: The preserving of the “equities”, by s 12, means that the obligor can raise against an assignee all matters that he could have raised against the assignor in extinguishment or reduction of the liability. This ensures that the obligor does not become liable to pay the assignee a sum which, because of an available set-off or counter-claim, it would never have had to pay to the assignor. But that is not to say that the obligor should be better off. The obligor retains the rights against the assignor, who remains primarily liable on any counter-obligation. This leaves the obligor in no worse position than would have been the case in the absence of an assignment. As against the assignee, the obligor retains the benefit of the defences it would have had against the assignor. That extends to defences by way of cross-claim, which can be set off in extinguishing or reduction of the obligor’s liability, but it does not extend to improving the obligor’s position by creating new rights to sue the assignee, in circumstances where those rights lie against the assignor. Liabilities, unlike assets, are not capable of assignment. … [19] The Court’s jurisdiction to set aside the bankruptcy notice arises pursuant to s 47(7) of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”). That section requires a debtor to satisfy the Court that the debtor has a counter-claim, set-off or cross-demand as referred to in s 40(1)(g). In this case the applicants assert a set-off. A right of set-off must be an effective set-off existing at the time the application to set aside the bankruptcy notice is heard. Where a debtor seeks to set aside a bankruptcy notice on the grounds that the debtor has a cross-demand that equals or exceeds the amount on which the bankruptcy notice is founded, the judgment on the one hand and the cross-

demand on the other must be mutual and in the same right. [20] The word “mutual” in this context means that the claims must be of the same kind or nature. Joint debts cannot be set off against several debts. In a case where a bankruptcy notice is issued by several joint creditors, the debtor may not raise a debt owed by one or some of them individually. Summary of principles Driver FM has summarized the requirements even more succinctly in Bailey v MCH Building Pty Ltd [2011] FMCA 124; BC201104584 at: [19] Accepting, then, that the fair trading/trade practices claim could not have been set up in the proceedings leading to the judgment debt, the questions are, is that claim a counter-claim, set off or cross demand and, if so, what is the value of it? There must at the very least be a genuine off setting claim advanced in good faith for an amount claimed in good faith. There must be a claim arguable on the basis of facts asserted with sufficient particularity to enable the Court to determine that the claim is not fanciful (Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 1008). In the bankruptcy jurisdiction, the Court must be satisfied that the demand is more than bona fide. It must have a reasonable probability of success (Bhagat v Global Custodians Ltd [2002] FCA 223 at [52]). A debtor must show that he has a prima facie case, even if unable to adduce the admissible evidence which would make out that case before [page 150] the Court dealing with the case [Gus v Johnstone (2000) 74 ALJR 884; 171 ALR 598]. There are, in my view, three interrelated and sometimes overlapping matters of which the Court must be satisfied: first, that there is a prima facie case, even if the evidence is not adduced, which would be admissible on a final hearing; secondly, that the claimant has a fair chance of success; and thirdly, that the claim is genuine or bona fide (Dekkan v Evans [2008] FCA 1004 at [52]. The mere production of a statement of claim in an action alleging facts which, if true, might give rise to such a claim will be insufficient to satisfy the Court [Re Cox (1934) 7 ABC 98). It may be that the first and second formulations in Field are intended to cover the same ground. In Brink Lockhart J treated (at ALR 438–9; FLR 141) the reference to a “prima facie case” in Ebert as a reference to “a fair chance of success”. In Brink Lockhart J said (at ALR 438–9; FLR 141) that the court is not required to “undertake a preliminary trial of the counter-claim, set-off or cross demand”. But, clearly, the application of the criteria above requires the court to make some kind of preliminary assessment, though obviously not to determine the counter-claim, set-off or cross-demand finally. And in Guss v Johnstone (2000) 171 ALR 598; [2000] HCA 26; BC200002278, Gleeson CJ, Gaudron, McHugh, Kirby and Callinan JJ stated (at ALR 606): [40] The state of satisfaction referred to in s 40(1)(g), and s 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim. Plainly, in order to “satisfy” the court for the purposes of s 40(1)(g), the debtor is not required to prove, as on a final hearing, the asserted entitlement to recover from the creditor. Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not as if the proceeding were one in which the debtor’s claim was being finally determined, but by reference to the question whether the court should be satisfied that the debtor has a claim deserving to be finally determined.

Perhaps little more can usefully be said than that a debtor must satisfy the court that there is sufficient substance to the counter-claim, set-off or cross-demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy. In Thomas v Nash [2011] FMCA 661; BC201106531 applied Cain v Whyte (1933) 48 CLR 639 at 646; 6 ALJR 457b: Prima facie, on proof of the matters mentioned in s 52(1), the court will proceed to make an order for sequestration, and it is for the debtor to show some cause overriding the interests of the public in the stopping of unremunerative trading, and the rights of the individual creditors who are unable to get their debts paid to them as they become due. Something has to be put before the court to outweigh those considerations before it can be said that sufficient cause is shown against the making of a sequestration order. Lindholdt v Merritt Madden Printing Pty Ltd [2002] FCA 260; BC200200877 and Rookharp Pty Ltd v Webb (2011) 254 FLR 410; [2011] FMCA 801; BC201107996 as considered by Driver FM in De La Vega v Aneeta Window Systems (NSW) Pty Ltd [2012] FMCA 153; BC20123047 at [43], are all cases where the court has been so satisfied. But the absence of these factors merely provides a bar to the debtor escaping a sequestration order: it does not provide “other sufficient cause” why a sequestration order should not be made: Re: Svir; Ex Parte Deputy Commissioner of Taxation (1998) 83 FCR 314 at 316; 154 ALR 710; 39 ATR 113; BC9801780. Arising from this Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509 at 521; 21 ALR 425; [1915] HCA 56; BC1500018 has held: (a) that the creditor has an absolute right to found a petition for a sequestration order on a statutory act of bankruptcy; (b) that an ulterior private purpose is not necessarily a fraud on the Court; (c) that a by-motive unless there is fraud is not a bar; [page 151] (d) that an abuse of process does not exist unless the remedy is unsuitable and would enable the person obtaining it fraudulently to defeat the rights of others, whether legal or equitable. This summary, it is submitted, provides an appropriate and useful statement of the effect of this section. Brink and many others were applied by Dodds-Streeton J in Axarlis v Pets Paradise Franchising (SA) Pty Ltd (2010) 183 FCR 521; 267 ALR 412; [2010] FCA 319; BC201001953. Western Australia Scanlan v Douglas [2007] FMCA 1265; BC200707871, a decision by Lucev FM, summarised the principles as they apply under local law and in respect of local institutions in Western Australia. The principles do not differ from elsewhere. Following Ebert v Union Trustee Co of Australia (1960) 104 CLR 346; [1960] ALR 691; (1960) 34 ALJR 182; BC6000660, his Honour held that to demonstrate a counter-claim, set-off or cross-demand, the debtor must show a prima facie case. Admissible evidence need not be adduced to make out that case. If the District Court grants leave the applicant will be entitled to set aside the bankruptcy notice, and, even if leave is refused the applicant is still able to have the notice set aside because a set-off can still be demonstrated in equity: Civil Judgments Enforcement Act 2004 (WA); Walker v Department of Social Security (1995) 56 FCR 354; 129 ALR 198; 36 ALD 513; Australian Mutual Provident Society v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326 at 331–2; (1991) ASC ¶56-109; (1991) ATPR ¶41-137. In deciding whether to grant leave the court will consider any question of delay as well as other discretionary

matters. The existence of the equitable considerations means that the only issue is to decide whether the applicant is still entitled to issue execution, but no more. See Solic v Bertossa [1969] VR 594 at 595. [80,910.130] Counterclaim etc must be mutual and due in same right — s 40(1)(g) See [80,910.125] at “Equitable setoff”. In Stec v Orfanos [1999] FCA 457; BC9905756 a Full Court summarised the authorities in the following terms: Where a debtor seeks to set aside a bankruptcy notice on the ground that the debtor has a cross demand which equals or exceeds the amount of the judgment or order on which the bankruptcy notice is founded, the judgment on the one hand and the cross demand on the other must be mutual and due in the same right: Re Anderson; Ex parte Alexander (1927) 27 SR (NSW) 296; James v Abrahams (1981) 34 ALR 657; 51 FLR 16 at 27. The requirement that the two claims be ‘in the same right’ is directed to the capacities in which the claimants claim. Thus a claim by a judgment creditor personally cannot be answered by a claim against the creditor as a member of a partnership or as an executor or trustee. See Re Wedd; Ex parte Wedd (1961) 19 ABC 36; Re Molesworth (1907) 51 Sol Jo 653; Vogwell v Vogwell (1939) 11 ABC 75 at 89. But the requirement relevant to the present case is that the claims be mutual; that is that they be of the same kind or nature. Thus joint debts cannot be set off against several debts: Middleton v Pollock; Ex parte Knight and Raymond (1875) LR 20 Eq 515 at 518. In ICM Agriculture Pty Ltd v Young [2009] FCA 109; BC200900942, Lindgren J declined to uphold an appeal against a Federal Magistrate’s finding in these terms: [122] The present case concerns an assignment of a bare cause of action for unliquidated damages for breach of contract, not of a property right to which a cause of action is ancillary. The parties accepted that in these circumstances the assignment could be sustained only if Mr Young had a genuine commercial interest in taking the assignment and enforcing it for his own benefit: see Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 703, which has been followed in many cases in Australia including, but not limited to, Re Timothy’s Pty Ltd and the Companies Act [1981] 2 NSWLR 706; Commonwealth v Ling (1993) 44 FCR 397; National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514; and see G Tolhurst, The Assignment of Contractual Rights (Hart Publishing, 2006) at [6.59]ff. [123] In my opinion, Mr Young’s indirect interest as sole shareholder of Young’s Rural Services Pty Ltd which owned one sixth of the share capital of AAC did not give him a genuine [page 152] commercial interest of the kind required in the present area of discourse. Mr Young’s interest was his personal interest in defeating the Bankruptcy Notice. [124] The circumstances of the present case are analogous to those in Monk in which the assignee’s interest was that of obtaining a set-off against a judgment debt. In that case, Cohen J said (at 153): The plaintiff’s only apparent interest is in the possibility of his becoming a creditor of the Bank. That is, his interest is in using the debt which might arise from the cause of action for his personal benefit. That no doubt is the interest of any assignee. The using of the debt as a set-off against the judgment debt is merely an example of obtaining some personal benefit. In that

regard the plaintiff is in no stronger position than he would be if he had obtained an assignment of a cause of action for negligence by a customer of the Bank who claimed to have suffered injuries arising from unsafe premises. In the authorities where the Trendtex test has been applied, the commercial interest has gone beyond a mere personal interest in profiting from the outcome of the proceedings and has required an interest by the assignee in the assignor or its business affairs or activities which the assignment may in some way protect. These observations are applicable, mutatis mutandis, to the present case. [125] It is not as though, for example, it is suggested that AAC cannot, or will not, for some reason, enforce its cause of action against ICM and that the only means of the enforcement is for Mr Young to purchase it from AAC and enforce himself, or that ICM’s claim against Mr Young was founded on a liability of AAC which Mr Young had guaranteed. [126] ICM also submits that the assignment is to be impugned on the ground that Mr Young procured it in breach of his fiduciary duty, as a director of AAC, to the shareholders of AAC. As noted at [51]–[54] above, five out of the six issued shares in the capital of AAC at the date of the assignment were held by IDAC Investments Pty Ltd, The Lentil Co Pty Ltd and Patrick Griffiths. In evidence before the Federal Magistrate, Mr Young acknowledged that he had no board minute or other written consent from any of the shareholders to his taking the assignment from AAC. The two considerations are comparable. In the first case, the cross demand must be mutual and in the same right while, in the second case, there is a necessity that the interest be more than a bare assignment. There is also a requirement that the assignment in fact represents a genuine commercial interest. See also [80,910.125]. [80,910.135] Counterclaim etc for an unquantified amount — s 40(1)(g) See Re Donkin; Ex parte AGC Advances Ltd (1994) 125 ALR 293; 52 FCR 271 and Melbourne v Relativity Pty Ltd [1999] FCA 160; BC9900486. [80,910.137] “more than six years” s 40(1)(g)(i) In addition to the requirement of the subsection, most state jurisdictions require that leave be granted to pursue a judgment after six years as was the case of Re Johnson, Ex parte Johnson v Tonkin (1994) 53 FCR 70; 123 ALR 607; BC9405931. He said at 613: In my opinion, it is a necessary requirement of the Act that a judgment or order founding a bankruptcy notice be one which is not stayed (within the wide meaning given to that phrase) both at the time of issue of the bankruptcy notice and at the time of service. This conclusion is consistent not only with the cases I have cited but with the judgment of Burchett J in Re Schekeloff; Ex parte Schekeloff v Hopkins Group Pty Ltd (1989) 22 FCR 407 and Beaumont J in Re Frasersmith; Ex parte J Blackwood & Son Ltd (1992) 36 FCR 144. That case was applied in Acciarito v Enfield Bond Pty Ltd [2009] FMCA 1147; BC200910966, and in Toward v Read [2014] FCCA 1100; BC201404174. [page 153] [80,910.140] Claim in principal proceeding as counterclaim etc — s 40(1)(g) In Pollnow v Queensboro Pty Ltd (FCA, Burchett J, 19 October 1988, unreported) the bankruptcy notice was based on a costs order made in an interlocutory application. The debtor successfully relied upon his claim in

the principal proceeding as a cross demand and the bankruptcy notice was set aside. See also the Full Court decisions in Chesson v Smith (1992) 35 FCR 594 and Walton v National Mutual Life Assn of Australia Ltd (1994) 49 FCR 406. In Shepherd v Blueberry Farms of Australia (Corindi) Ltd (2001) 162 FLR 339; [2001] FMCA 2, Driver FM summarised the obligation upon an applicant for an order to set aside a bankruptcy notice who sought to establish that he or she had counterclaim, set off or cross demand within the terms of s 40(1)(g) of the Bankruptcy Act in the following way: [47] As I have already noted the applicant claims that he has a counterclaim, set off or cross demand within the terms of s. 40(1)(g) of the Bankruptcy Act. The relevant legal principles are usefully set out in the 5th Edition of McDonald, Henry & Meek; Australian Bankruptcy Law and Practice, Law Book Co, at [40.1.340–350]. For convenience, I incorporate extracts from that text below at paragraphs 47–50. A debtor upon whom a bankruptcy notice has been served must offer evidence that he or she has such a counterclaim, set off or cross demand. The mere production of a statement of claim in an action for which he or she alleges facts, which, if true, might give rise to such a claim, is not evidence and is insufficient unless supported by prima facie evidence of their truth. The applicant must first establish the existence of a counterclaim, set off or cross demand. Secondly he must establish that the counterclaim ‘could not have been set up in the actual proceedings in which the judgment or order was obtained’ and, thirdly, he must establish that the counterclaim is equal to or exceeds the amount of the judgment debt. [48] As to the first issue, it has been held by the High Court that the degree to which the bankruptcy court should be satisfied that a debtor has a counterclaim, set off or cross demand of the required amount ‘may be expressed by saying that the debtor must show that he or she has a prima facie case, even if then and there he or she does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his or her counterclaim, set off or cross demand’: Ebert v Union Trustee Co (Aust) Ltd [1960] HCA 50; (1960) 104 CLR 346 at 350. However, the demand must be more than bona fide. The Court must be satisfied that it has a reasonable probability of success. This Court is not called upon to determine the validity of the counterclaim, set off or cross demand but it must be satisfied that the claim is a substantial and bona fide claim which the debtor should fairly be permitted to litigate before the bankruptcy proceedings are allowed to continue: Re A Debtor; ex parte Bolam (1909) 9 SR (NSW) 580. The state of satisfaction required involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim. Rule 3.02(2) of the Federal Magistrates Court (Bankruptcy) Rules 2006 relevantly provides: 3.02 (2) If the application is based on the ground that the debtor has a counter-claim, set-off or cross demand mentioned in paragraph 40(1)(g) of the Bankruptcy Act, the affidavit must also state: (a) the full details of the counter-claim, set-off or cross demand; and (b) the amount of the counter-claim, set-off or cross demand and the amount by which it exceeds the amount claimed in the bankruptcy notice; and (c) why the counter-claim, set-off or cross demand was not raised in the proceeding that resulted in the judgment or order in relation to which the bankruptcy notice was issued. At [19] of Jones v Australian Olives Ltd [2009] FMCA 46; BC200900230, Jarrett FM stated: In Bhagat v Global Custodians Ltd [2002] FCAFC 51; [2002] FCA 223; BC200200780, the Full Federal Court pointed out:

[53] … that the mere production of claim in an action that pleads facts which, if proved, would support a claim, has long been held to be insufficient: ‘[a] statement of claim is no [page 154] evidence of anything’: Re Foster, Ex parte Basan (1885) 2 Morr 29 at 33 per Brett MR: see also Re Cox (supra) at 101 and Re Verma; Ex parte Deputy Commissioner of Taxation (1985) 4 FCR 181 at 187. It is not even sufficient for a debtor to file an affidavit which merely propounds a claim and states how the debtor proposes to establish it: Ebert v The Union Trustee Co of Australia Ltd (1960) 104 CLR 346 at 350. There is an obligation on the debtor to adduce evidence that provides reasonable grounds for the institution of proceedings Vogwell v Vogwell (supra) at 85 per Lathan CJ. The task that Mr Bhagat faced was an onerous task. He has raised serious allegations but has not placed before the Court the material (if indeed such material exists) that would justify a Bankruptcy Court from interfering with the judgment that founded the Bankruptcy Notice. [80,910.145] “satisfy the Court” — s 40(1)(g) In an application under s 41(7), the court does not decide the debtor’s claim against the creditor. In Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346; [1960] ALR 691, Dixon CJ, McTiernan and Windeyer JJ stated: Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand. This decision was explained and applied by Lockhart J in Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433; 44 FLR 135. Both cases have been applied on numerous occasions. In Jones v Australian Olives Ltd [2009] FMCA 46; BC200900230, at [3], it: … was not suggested that the bankruptcy notice was in any way defective. The only matter argued on the application was whether the applicant could, and had, satisfied the court that he had the requisite counterclaim, set-off or cross-demand”. The debtor sought to defend the claims of a management company for periodic charges. Jarrett FM followed the decision of Driver FM in Shepherd v Blueberry Farms of Australia (Corindi) Ltd (2001) 162 FLR 339; [2001] FMCA 2 at [47]–[48]; see [80,910.140]. Jarrett FM applied these principles in Jones and noted at [19] the decision in Bhagat v Global Custodians Ltd [2002] FCAFC 51; [2002] FCA 223; BC200200780, where the Full Federal Court pointed out: [53] … that the mere production of claim in an action that pleads facts which, if proved, would support a claim, has long been held to be insufficient: ‘[a] statement of claim is no evidence of anything’: Re Foster, Ex parte Basan (1885) 2 Morr 29 at 33 per Brett MR: see also Re Cox (supra) at 101 and Re Verma; Ex parte Deputy Commissioner of Taxation (1985) 4 FCR 181 at 187. It is not even sufficient for a debtor to file an affidavit which merely propounds a claim and states how the debtor proposes to establish it: Ebert v The Union Trustee Co of Australia Ltd (1960) 104 CLR 346 at 350. There is an obligation on the debtor to adduce evidence that provides reasonable grounds for the institution of proceedings Vogwell v Vogwell (supra) at 85 per Lathan CJ. The task that Mr Bhagat faced was an onerous task. He has raised serious allegations but has not placed before the Court the material (if indeed such material exists) that would justify a Bankruptcy Court from interfering with the judgment that founded the Bankruptcy Notice.

The debtor’s complaint in Jones was that the olive venture had been disposed of but, at [22], it was held that: In so far as the complaints about the projections in the Prospectus are concerned, there is no evidence, even of a prima facie nature, that the circumstances of the making of those projections would give rise to liability to Mr Jones. That projections may not have come to be realised does not mean that the making of them was misleading, deceptive or fraudulent: see for example Lake Koala Pty Ltd v Walker [1991] 2 Qd R 49. [page 155] It was concluded that the court was “not satisfied that Mr Jones has demonstrated to the requisite standard that he has counterclaim, set-off or cross-demand against the respondent”. [80,910.147] Misnomer and joint debtors The error in the case of misnomers does not extend to joint debtors to the extent that such a notice, which complies with all of the statutory requirements in respect of one of two or more joint debtors, is effective against that debtor notwithstanding that it is invalid or defective as against the other debtor or debtors or has not been served on the other debtor or debtors. See Frank Dimasi (t/as F & M Dimasi) v Nangiloc Colignan Farms Pty Ltd (2007) 157 FCR 387; 239 ALR 330; [2007] FCA 308; BC200701353 at [43] per Ryan J. Malek v Macquarie Leasing Pty Ltd (2007) 156 FCR 552; [2007] FCAFC 14; BC200700782 was applied in that case to conclude that a misnomer in respect of one joint debtor was not capable of causing substantial injustice to the other debtor, and that, in such a case, the notice was capable of rescue by virtue of s 306. See [84,730.15]. [80,910.150] “could not have set up” — s 40(1)(g) Considerations personal to a debtor which prevent him, as a matter of practical reality, from pursuing a cross-claim in proceedings in which judgment is given on which a bankruptcy notice is founded, do not constitute circumstances which entitle the debtor to characterise such a cross-claim as one which he could not have set up in the action or proceeding in which the judgment was obtained: Re Vicini; Ex parte EA Sealey & Co (1982) 64 FLR 323. Lindgren J in Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331; [2003] FCA 373; BC200301950 described the threshold at which the applicant may be allowed to litigate as “relatively low”: at [54]. At [9]–[11] he summarised the requirements: [9] There are authorities suggesting that Glew and Tresidder must satisfy me of the following interrelated and sometimes overlapping matters: that they have a ‘prima facie case’, even if they do not adduce evidence which would be admissible on a final hearing making out that case: Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 (Ebert) at 350; Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433 at 438–9; 44 FLR 135 at 141 (Brink); Gomez v State Bank of New South Wales Ltd [2002] FCAFC 101; BC200201643 at [17], [18]; that they have ‘a fair chance of success’ or are ‘fairly entitled to litigate’ the claim: Brink at ALR 438–9; FLR 141; Gould v Day [1999] FCA 1650; BC9907767 at [27], [28]; Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]; and that they are advancing a ‘genuine’ or ‘bona fide’ claim: Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]. It may be that the first and second formulations are intended to cover the same ground. In Brink

Lockhart J treated (at ALR 438–9; FLR 141) the reference to a ‘prima facie case’ in Ebert as a reference to ‘a fair chance of success’. [10] In Brink Lockhart J said (at [FLR] 141) that the Court is not required to ‘undertake a preliminary trial of the counter-claim, set-off or cross demand’. But, clearly, the application of the criteria above requires the Court to make some kind of preliminary assessment, though obviously not to determine the counter-claim, set-off or cross demand finally. And in Guss v Johnstone (2000) 171 ALR 598, Gleeson CJ, Gaudron, McHugh, Kirby and Callinan JJ stated (at 606): [40] The state of satisfaction referred to in s 40(1)(g), and s 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim. [11] Plainly, in order to ‘satisfy’ the Court for the purposes of para 40(1)(g), the debtor is not required to prove, as on a final hearing, the asserted entitlement to recover from the creditor. [page 156] Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not as if the proceeding were one in which the debtor’s claim was being finally determined, but by reference to the question whether the Court should be satisfied that the debtor has a claim deserving to be finally determined. [12] Perhaps little more can usefully be said than that a debtor must satisfy the Court that there is sufficient substance to the counter-claim, set-off or cross demand asserted to make it one which the debtor should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy. In Barnett v Holmgreen [2009] FMCA 97; BC200900842 at [17], Smith FM considered that para [12] of Lindgren J’s decision in Glew v Harrowell indicated that a bankruptcy court did not conduct a trial of the evidence in support of the presented counter-claim. In Smith FM’s opinion, it was also not necessary for the bankruptcy court to resolve issues of law which may arise in the court of such a counter-claim. His Honour continued (at [17]): [17] The Court generally conducts only a provisional assessment of the merits of the claim, including by looking at evidence which may not be admissible. In my opinion, it is also entitled to give weight to credible opinions on complex legal issues, even though such opinions might not be authoritative if the legal issues were being judicially determined on a final basis. However, in the instant case, Smith FM said: [19] However, he does have the onus of proof to satisfy me, albeit on a provisional standard of persuasion, that not only is his costs assessment application genuine and bona fide, but that it also holds some prospect of success in an amount exceeding Mr and Mrs Holmgreen’s assessed costs. Moore J in Melbourne v Relativity Pty Ltd [1999] FCA 160 at [34] suggested that this element can be described as a test of ‘reasonable prospects’ of recovering an amount equal to or exceeding the amount upon which the bankruptcy notice is founded. It also might be encompassed within the test of ‘fair chance of success’ identified by Lindgren J, on the basis that the required chance of success must extend not only to the existence of the claim but also to its prospects of producing an

outcome exceeding the amount of the judgment upon which the bankruptcy notice is based. The decision in Glew v Harrowell of Hunt & Hunt Lawyers (above) has been cited often but, in ICM Agriculture Pty Ltd v Young [2009] FCA 109; BC200900942, was considered by the same judge — Lindgren J. In ICM v Young, to decide whether the decision of a Federal Magistrate to the effect that a deed of assignment was needed, Lindgren J applied (inter alia) the decision in Monk v Australia & New Zealand Banking Group Ltd (1994) 34 NSWLR 148; BC9405181 (per Cohen J), which has led to the expansion of the principle in Glew v Harrowell. Cohen J held that (at 153): The plaintiff’s only apparent interest is in the possibility of his becoming a creditor of the Bank. That is, his interest is in using the debt which might arise from the cause of action for his personal benefit. That no doubt is the interest of any assignee. The using of the debt as a set-off against the judgment debt is merely an example of obtaining some personal benefit. In that regard the plaintiff is in no stronger position than he would be if he had obtained an assignment of a cause of action for negligence by a customer of the Bank who claimed to have suffered injuries arising from unsafe premises. In the authorities where the Trendtex test has been applied, the commercial interest has gone beyond a mere personal interest in profiting from the outcome of the proceedings and has required an interest by the assignee in the assignor or its business affairs or activities which the assignment may in some way protect. Use of a failed contention of a formal defect in subsequent proceedings raises an Anshun estoppel (that is, Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; 36 ALR 3; 55 ALJR 621; BC8100097) based on the extended principle expressed in Henderson v Henderson (1843) 3 Hare 100; [1843-60] All ER Rep 378; (1843) 67 ER 313. The principle in such a case is the public [page 157] interest against repetitive litigation. This principle has been applied in Hovan v Goycolea-Silva [2003] FCA 378; BC200302028 at [25] and more recently in Skalkos v Tzovaras Legal Pty Ltd [2008] FMCA 543; BC200803444. See also [80,915.202]. [80,910.155] Procedure on application to set aside a bankruptcy notice on basis of counterclaim etc — s 40(1)(g) See [80,915.205]. [80,910.160] Section 40(1)(h) The question of what constitutes a notice of suspension is one of fact: Re Lamb; Ex parte Gibson and Bolland (1887) 4 Mor 25. In Cropley’s Ltd v Vickery (1920) 27 CLR 321, Knox CJ held that: … to constitute this act of bankruptcy two things are requisite: first, an intention residing in the mind of the debtor that he will, in a sense voluntarily, that is, as his own act, refuse to pay his debts as they become due, and secondly, a communication of that intention to one of his creditors. Compare Re Francis (1941) 12 ABC 111 at 115. In Re Lamb; Ex parte Gibson and Bolland, above, Bowen LJ formulated the test as follows: “What effect would the circular produce on the mind of a creditor receiving it as to the intention of the debtor with regard to his creditors?” See also Crook v Morley [1891] AC 316. The circumstances in which the notice was communicated are relevant in determining whether the notice comes within the section; particularly those known to the creditors at the time the notice was given: Official Assignee of Simon v Arnold & Wright Ltd [1967] NZLR 552.

Where the words used are capable of two reasonable constructions, one amounting to a notice of suspension and one not, the court must choose the latter: Re Kidd; Ex parte Official Assignee (1903) 3 SR (NSW) 363. [80,910.161] Suspension — s 40(1)(h) “Suspension of payment is a business term usually applied to traders. It seems to me that it means not meeting your engagements, and paying your debts in the ordinary course of business as they become due and as you are called upon to pay them”: Re Lamb; Ex parte Gibson and Bolland (1887) 4 Mor 25 per Bowen LJ. A temporary suspension which might not be permanent comes within the section: Moy v Briscoe & Co Ltd (1907) 5 CLR 56; Crook v Morley [1891] AC 316; compare Re Fleming, Fraser & Co (1888) 60 LT (NS) 154. [80,910.162] Form of notice — s 40(1)(h) The notice may be given orally or in writing: Ex parte Nickoll; Re Walker (1884) 13 QBD 469. If notice is given orally, it must be formal and not “mere casual talk”: Ex parte Oastler; Re Friedlander (1884) 13 QBD 471; Re Pike (1896) 17 LR (NSW) B & P 34 or a mere “haphazard or casual communication”: Re Hewson; Ex parte Sydney Stock Exchange Ltd (1967) 10 FLR 479. However, there is no requirement that the notice be given at a formal meeting of creditors: Re Hewson; Ex parte Sydney Stock Exchange Ltd, above. [80,910.163] Notice given to a single creditor — s 40(1)(h) A statement to a single creditor (Re Scott; Ex parte Scott [1896] 1 QB 619) or group of creditors (Re Coleman; Ex parte Lazy Days Investments Pty Ltd (FCA, Lee J, 1045 of 1994, unreported)) can constitute an act of bankruptcy under this paragraph; but a statement to a single creditor is less readily construed as a notice of suspension than if it had been given to creditors generally: Hills Trustee v Rowlands [1896] 2 QB 124; Cropley’s Ltd v Vickery (1920) 27 CLR 321. The notice itself must relate to creditors as a body, even if communicated to only one of them: Re Scott; Ex parte Scott, above. [80,910.164] Notice by debtor’s agent — s 40(1)(h) Notice of suspension may be given by an agent on the debtor’s behalf: Parsons v Bunge (1941) 64 CLR 421; Re Lamb; Ex parte Gibson and Bolland (1887) 4 Mor 25. Regard must be had to the scope of the agent’s authority. [page 158] Similarly, an act of bankruptcy may be committed if the notice is communicated to an agent of the creditor: Re a Debtor [1929] 1 Ch 362 (CA). [80,910.165] Admission of insolvency — s 40(1)(h) “An admission of insolvency, in fact, is not enough unless it is accompanied by some words from which the intention of the debtor as to the future conduct of his business can be gleaned”: Re Pike (1896) 17 LR (NSW) B & P 34 at 38. See also Re Hewson; Ex parte Sydney Stock Exchange Ltd (1967) 10 FLR 479; Re Radcliffe; Ex parte Bell’s Thermalag Pty Ltd (1968) 11 FLR 453; Clough v Samuel [1905] 1 AC 442 at 444. In Crook v Morley [1891] AC 316, a debtor sent a circular to his creditors which provided: “Being unable to meet my engagements as they fall due I invite your attendance at [a specified place and time] … when I will submit a statement of my position for your consideration and decision”. The court held that this amounted to a notice that the debtor was about to suspend payment of his debts within the meaning of the section, on the basis that the letter involved of necessity a suspension until at least after the meeting. See also Re Thorold (1890) 11 LR (NSW) 331; Re Black (1891) 1 BC (NSW) 70; Re Burns (1894)

15 LR (NSW) B & P 1; Re Pike (1896) 17 LR (NSW) B & P 34; Re Brady (1898) 19 LR (NSW) B & P 6; Re Miller [1901] 1 QB 51; Re Francis (1941) 12 ABC 111 (affirmed Francis v Commonwealth Wool & Produce Co Ltd (1941) 65 CLR 662 (note)). [80,910.166] Calling a meeting of creditors — s 40(1)(h) The calling of a meeting of creditors without more does not constitute an act of bankruptcy within the meaning of s 44(1)(h). In order to determine whether the notice is sufficient, “the words of the notice must be considered in relation to the circumstances, and particularly the circumstances known to the creditors at the time”: Official Assignee of Simon v Arnold & Wright Ltd [1967] NZLR 552; Re Bailey [1927] GLR 470. See also Re Simonson [1894] 1 QB 433; Re Walsh (1885) 2 Mor 112; Re Selwood (1894) 1 Mans 66; Re Morgan (1895) 2 Mans 508; In Re Dagnall [1896] 2 QB 407; Re Ford (1909) 12 WALR 15; Re Midgley (1913) 108 LT 45; Re a Debtor [1929] 1 Ch 362 (CA); Re Taylor [1962] NZLR 507; Re Morrison (1913) 33 NZLR 186; Re Paterson [1936] NZLR 65 and Re Penning; Ex parte State Bank of South Australia (FCA, Forster J, 23 December 1987, unreported). The signing of an authority under s 188 and the calling of a meeting pursuant to such an authority are made acts of bankruptcy by s 40(1)(i) and (j) respectively. [80,910.167] “Without prejudice” communications — s 40(1)(h) A “without prejudice” communication may be admissible as evidence of this act of bankruptcy: Re Daintrey; Ex parte Holt [1893] 2 QB 116; Re Coleman; Ex parte Lazy Days Investments Pty Ltd (FCA, Lee J, 1045 of 1994, unreported). However, see now Evidence Act 1995 (Cth) s 131. [80,910.168] Traders — s 40(1)(h) This act of bankruptcy is not limited to traders: Re Scott; Ex parte Scott [1896] 1 QB 619. No act of bankruptcy is committed under s 40(1)(h) when a debtor indicates his or her inability and lack of intention to pay the petitioning creditor in full, but intends to continue to trade and to pay creditors in the course of business: see Re Carney (1983) 77 FLR 97. See also Re a Debtor (1912) 106 LT 812; Re Phillips (1897) 76 LT 531. [80,910.169] Partners — s 40(1)(h) A notice that a partnership has suspended payment of debts is not, of itself, notice that an individual partner has suspended payment of his or her debts within the meaning of the section: Re Donovan; Ex parte Australia and New Zealand Banking Group Ltd [1972–73] ALR 313; (1972) 20 FLR 50. [80,910.170] Section 40(1)(i) The signing of an authority under Pt X of the Act may constitute an act of bankruptcy even though it is not effective for the purposes of Pt X: Re Donovan; Ex parte ANZ Banking Group Ltd [1972–73] ALR 313; (1972) 20 FLR 50. Compare Re Curry; Ex parte Goldsea Pty Ltd (1992) 40 FCR 32. As to what constitutes an authority that is effective for the purposes of Pt X, see s 194. [page 159] [80,910.171] Section 40(1)(j), (k), (l) and (m) The acts of bankruptcy constituted by s 40(1)(j), (k), (l) and (m) require an authority that is effective for the purposes of Pt X of the Act. In Re Curry; Ex parte Goldsea Pty Ltd (1992) 40 FCR 32, the debtor’s failure to comply with a requirement made at a creditors meeting that he present a debtor’s petition did not constitute an act of bankruptcy because the petition was not effective for the purposes of Pt X. As to what constitutes an authority that is effective for the purposes of Pt X, see s 194. However, it is an act of bankruptcy if a deed of assignment executed by a debtor under Pt X is declared void by the court, as stated by Stone J in George v DCT

(2004) 212 ALR 495; 57 ATR 450; [2004] FCA 1433; BC200407316 at [46]. [80,910.175] Section 40(3) Section 40(3) deems certain awards, judgments and orders to be final judgments or final orders for the purpose of s 40(1)(g). [80,910.177] Orders for costs are final orders — s 40(3)(b) In Westpac Banking Corp v Goodman [2010] FMCA 993; BC201010150 the court dealt with a plea which propositioned that a bankruptcy notice based on a costs order was not a final but an interlocutory order. The submission was apparently based on an error and was held to be directly contrary to the established authority of Re Skinners and Smiths Application (1982) 45 ALR 553 per Fitzgerald at 555 which held a costs order was a final order. [80,910.180] Assignee of creditor — s 40(3)(d) In Abigroup Ltd v Abignano (1992) 39 FCR 74; 112 ALR 497, a bankruptcy notice issued by the assignee of the judgment creditor was held to be valid in circumstances where the judgment was not immediately enforceable at the time of assignment, because a condition made with respect to enforceability had not been fulfilled. The true principle in Abigroup Ltd v Abignano, above, is that the court may decline to make a sequestration order where a creditor relies upon a bankruptcy notice which has been issued in bad faith or to embarrass the debtor, but there is an absolute requirement that only one bankruptcy notice is to be issued: Re Fredericke & Whitworth; Ex parte Hibbard [1927] 1 Ch 253, applied by Dowsett J in Romano v Peldan [2003] FCA 767; BC200304694. An assignee of part of a judgment debt is not entitled to issue a bankruptcy notice: Forster v Baker [1910] 2 KB 636; [1908–10] All ER Rep 554. A judgment creditor can issue a bankruptcy notice despite assignment of the judgment debt in equity: Re Palmer; Ex parte Brims [1898] 1 QB 419. [80,910.185] Order made under Bankruptcy Act — s 40(3)(e) Section 40(3)(e) was enacted to overcome the decision in Re Pannowitz; Ex parte Wilson (1975) 6 ALR 287; 38 FLR 184. [80,910.190] Maintenance order — s 40(3)(f) Section 40(3)(f) was enacted to overcome the decision in Opie v Opie (1951) 84 CLR 362; 25 ALJR 411.

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[80,915] Bankruptcy notices 41 (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. [subs (1) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 106 of 2010 s 3 and Sch 4[1], opn 11 Aug 2010]

(2) The notice must be in accordance with the form prescribed by the regulations. [subs (2) subst Act 44 of 1996 s 3 and Sch 1]

[page 160] (2A) [subs (2A) rep Act 44 of 1996 s 3 and Sch 1] (2B) [subs (2B) rep Act 44 of 1996 s 3 and Sch 1] (2C) [subs (2C) rep Act 44 of 1996 s 3 and Sch 1] (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. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 80 of 2004 s 3 and Sch 6, opn 23 June 2004]

(4) [subs (4) rep Act 44 of 1996 s 3 and Sch 1] (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. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (6) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (6A) insrt Act 12 of 1980 s 24; am Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(6B) [subs (6B) rep Act 44 of 1996 s 3 and Sch 1] (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. [subs (6C) insrt Act 12 of 1980 s 24; am Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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 [page 161] 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. (8) [subs (8) rep Act 44 of 1996 s 3 and Sch 1] (9) [subs (9) rep Act 44 of 1996 s 3 and Sch 1] SECTION 41 GENERALLY [80,915.5] General For the purposes of s 41(2), the form of bankruptcy notice set out in Form 1 to Sch 1 is prescribed: reg 4.02(1). The current form of bankruptcy notice was prescribed by SR 76 of 1997, which came into effect upon gazettal on 14 April 1997. That form was amended by SR 220 of 2000, which, although expressed to commence on 1 July 2000, was gazetted on 17 August 2000. As to the effect of the retrospective amendment of the prescribed form, see Lee v McNulty [2000] FCA 1519; BC200006517 and Atkinson v Oakleigh Holdings Pty Ltd [2000] FCA 1547; BC200006609. If the judgment cannot be enforced it cannot be the subject of a valid bankruptcy notice; WiltshireSmith v Olsson (1995) 57 FCR 572; BC9507848; Khalifa v Wenburg [2008] FMCA 103; BC200800500. [80,915.10] Issue of bankruptcy notice — s 41(1) and (3), regs 4.01 and 4.02 In order to apply for the issue of a bankruptcy notice, a person must lodge with the Official Receiver a draft bankruptcy notice, a copy for the Official Receiver and sufficient copies for service and annexure to any required affidavits of service, and a sealed or certified copy of the judgment or order (or other document specified pursuant to reg 4.01(b)): reg 4.01. Prior to 16 December 1996, bankruptcy notices were issued by the Registrar in Bankruptcy, but this position has been abolished. In Prudential-Bache Securities (Aust) Ltd v Warner [1999] FCA 1143; BC9905004, the bankruptcy notice was neither signed nor stamped by the Official Receiver or delegate or authorised officer, as required by Form 1, owing to administrative oversight. Emmett J held that notwithstanding these omissions, the notice had been “issued”. His Honour further held that the defect in relation to signature and stamping was cured by s 306(1) of the Act. His Honour declined to follow a decision to the opposite effect in Re O’Sullivan; Ex parte Bank of New Zealand (1991) 30 FCR 112; 102 ALR 206. Section 41(1) was amended on 5 May 2003 by the Bankruptcy Legislation Amendment Act 2002 No 131 with the addition of paragraph (b). The subsection as amended widens the occasion in which the Official Receiver may file a bankruptcy notice on the application of a creditor against a debtor so as to include as one of the grounds a final judgment. It should be noted that neither the ACR number nor the statement “in liquidation” need be stated. See McClymont v Wright Designed Pty Ltd (2006) 229 ALR 560; 196 FLR 344; [2006] FMCA 4; BC200600067. Since the requirement of the statute is that the official receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor of final judgment final order, it is not therefore a requirement that the company should display such additions. See Gould v Companies Auditors and Liquidators Disciplinary Board (2009) 71 ACSR 648; [2009] FCA 475; BC200903881; and RMG Acquisitions No 8 Pty Ltd v Collard (2011) 252 FLR 188; [2011] FMCA 596; BC201105900. The relevant time for determining the existence of a final judgment is at the issuing and service of the bankruptcy notice: Black v Robins [2008] FMCA 19; BC200800262. The wording of the section refers to a “final judgment” or “final order”. This has been the subject of

a great deal of litigation and judicial comment. The Full Court of the Federal Court in Autron Pty Ltd v Benk (2011) 280 ALR 417; [2011] FCAFC 93; BC201105552 in a joint judgment in which all the substantial authorities are considered came to the following conclusion: [35] There is no reason to doubt that the expressions “final judgment” and “final order” as used in s 40(1)(g) and s 41(1) of the Bankruptcy Act were intended by the legislature to have their [page 162] generally understood meanings as judicially interpreted in Australian bankruptcy law, extended only by recourse to s 40(3), which operates on those generally understood meanings. [36] There is no reason why s 41(1) should not then have the plain meaning that its words bear: subject to the further limitations imposed by s 41(3), a bankruptcy notice should only issue where the creditor seeking its issue has obtained a “final judgment” or “final order” for, at least, the statutory minimum amount, or two or more such judgments or orders that, taken together, are for, at least, that amount. The use of the word “for” in this context does not really admit debate. It means the amount, in monetary terms, of the “final judgment” or “final order”, or of the two or more such judgments or orders taken together, obtained by the creditor. [37] In the course of submissions counsel appearing as amicus curiae sought to argue that s 41(1) should not be construed literally, but given a meaning or operation that would accommodate payments made by the debtor or credits allowed by the creditor. Counsel submitted that “it is unlikely that Parliament intended that a creditor may issue a bankruptcy notice in respect of a judgment debt of $2,000 in circumstances where it had been paid $1,999”. However, to so construe s 41(1) would be to radically alter the words chosen by the legislature. Expressed in its simplest terms, the legislature has chosen to condition the issue of a bankruptcy notice on the amount of the “final judgment” or “final order”, not on the amount of the total debt (after allowing for payments and credits) for which the creditor seeks to have the notice issued. No doubt, as a matter of policy, the legislature could have chosen to adopt the latter course. The plain words of s 41(1) show that that was not its intention. [38] In the present case, the bankruptcy notice did not satisfy the requirements of s 41(1)(b)(ii) of the Bankruptcy Act. It was not, therefore, a “bankruptcy notice under this Act” for the purposes of s 40(1)(g). A bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Bankruptcy Act: Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 at 79; 79 ALR 161 at 165. There can be no doubt that the attainment of the minimum amount prescribed by s 41(1) of the Bankruptcy Act is an essential requirement for the issue of a bankruptcy notice under that section. Accordingly, the failure of the respondent to comply with the bankruptcy notice issued in the present case could not constitute an act of bankruptcy under s 40(1)(g). It follows that, absent the act of bankruptcy on which the appellant relied, the conditions required by s 44 of the Bankruptcy Act, on which its petition was to be presented, could not be met. [39] The presiding Federal Magistrate did not err in dismissing the appellant’s application for review of the Registrar’s decision. Further, in Lewis v Lamru Pty Ltd [2011] FCA 758; BC201104905, Foster J at [28] held that the court order relied upon failed to meet the requirements of s 41 in that they were proved from internal

evidence that they were not made on their purported date. [80,915.11] Section 41(1) and (3) multiple creditors The statute does not extend to permit multiple creditors unless in the same interest. In DJ Sweeney Holdings Pty Ltd v McLeod (2011) 253 FLR 1; [2011] FMCA 608; BC201105902 a series of creditors sought to issue notices for separate dates against one creditor relying upon a series of interpretation statutes and the fact that the use of exceptions was allowed. Raphael FM relied on Brebner v Bruce (1950) 82 CLR 161 at 175; [1950] ALR 811; (1950) 24 ALJR 383; BC5000560 where Fullagar J considered the meaning of the phrase “unless a contrary intention appears” and said: To provide that a certain position shall be taken to exist “unless a contrary intention appears” in an instrument is a common enough form of enactment. A well-known instance is to be found in s 27 of the Wills Act 1837 (Eng). Speaking of that section in Scriven v Sandom, Sir William Page Wood VC said: — “There is no contrary intention within the meaning of the statute, unless you find something in the will inconsistent with the view that the general devise was meant as an execution of the power. It would not be a safe rule to proceed upon, to pick out little [page 163] circumstances, and infer from them whether the testator had or had not in his mind the intention of exercising the power; there ought to be shewn something which can fairly be described as inconsistent with such an intention.” This provided, he said, “the only safe rule for discriminating between mere conjecture and the contrary intent required by the statute”. The “contrary intention” need not, of course, be stated in express words, but it must “appear”, and I think it can appear only by express words or by necessary implication. Raphael FM also applied Owners of Strata Plan No 5459 v Mason (1999) 91 FCR 92; [1999] FCA 1137; BC9904991 at [4]–[6] and [10] per Emmet J in support of the same view and concluded at [14]: In the final analysis I believe that s 41(1) of the Act does not extend to permit of multiple creditors unless they are in the same interest: see also McDonnell v Fernwood Fitness Centre Pty Ltd [2005] FMCA 877 at [18–28]. If my understanding and reasoning are incorrect then I would say that in this particular case I believe that the notice itself is liable to mislead the debtor, noting that the court cannot enquire whether the debtor has in fact been misled or not: James v Federal Commissioner of Taxation [1955] 93 CLR 631 at [644]. The bankruptcy notice issued against Mrs Vicki Margaret McLeod is invalid and thus a petition based upon it cannot proceed. The petition is dismissed. There will be no order as to costs as the respondent debtor was not represented. [80,915.12] Misdescription The proper identification of the parties to a bankruptcy notice might be said to be an essential requirement therefore, merely formal errors do not result in invalidity unless they cause “substantial injustice”. See Kyriackou v Shield Mercantile Pty Ltd (2004) 138 FCR 324 at 336; 207 ALR 393; [2004] FCA 490; BC200402106. “The touchstone of invalidity is thus whether any error is “capable of misleading” a debtor in a manner that results in “substantial injustice””: Yang v Mead [2009] FCA 1202; BC200909678 at [15]. In Anne v Ask Funding Ltd [2013] FCCA 1271; BC201312635 Jarrett J cited these cases and others where misdescriptions of names were held to be the type of error caught by s 306(1) of the statute. This was particularly the case where there was no confusion as to the identity of the party concerned. [80,915.13] Interest as a component In Autron Pty Ltd v Benk (2011) 195 FCR 404; 280 ALR 417; [2011] FCAFC 93; BC201105552 the Full Court (Lander, Tracey & Yates JJ) stated at [16]:

[16] The Registrar who heard the appellant’s petition reasoned that, while post-judgment interest can be relied on to ground a debt or debts for the statutory minimum amount on which a creditor’s petition can be presented under s 44(1) of the Bankruptcy Act, such interest cannot be relied on to reach or exceed the statutory minimum amount prescribed by s 41(1)(b)(ii) of the Bankruptcy Act. In the present case, absent the inclusion in the bankruptcy notice of the sum of $110.80 for postjudgment interest, the total debt claimed in the bankruptcy notice would have been less than $2,000.00 ($1,979.44). The Registrar concluded, therefore, that the bankruptcy notice was a nullity. On review, the presiding Federal Magistrate came to the same view. Their Honours explained the principle behind this conclusion at [21] et seq: [21] The Bankruptcy Act does not define the expressions “final judgment” and “final order” as used in ss 40(1)(g) and 41(1). Historically, in bankruptcy law, a rigid distinction has been drawn between a “final judgment” and a “final order”. In context, a “final judgment” is strictly construed to mean a final judgment “obtained in an action”. Thus, in Clyne v DCT (NSW) (1983) 48 ALR 545 at 547–548 Gibbs CJ (with whom the other members of the High Court agreed) said: A final judgment within the meaning of the provisions of the Bankruptcy Act has been held to mean a judgment obtained in an action by which the question whether there was a pre-existing right of the plaintiff against the defendant is ascertained or established: Opie v Opie (1951) 84 CLR 362 at 372. In other words it is a judgment which finally disposes of the rights of the parties: see Licul v Corney (1976) 8 ALR 437; 50 ALJR 439 at 444. The fact [page 164] that a judgment is subject to appeal or that it may later be set aside or become inoperative does not mean that it is not final: Re Hanby; Ex parte Flemington Central Spares Pty Ltd (1967) 10 FLR 378. [22] In a technical sense, an “action” is the invocation of a court’s jurisdiction by writ and a “proceeding” is an invocation of a court’s jurisdiction by other process: Herbert Berry Associates Ltd v Inland Revenue Commissioners [1977] 1 WLR 1437 at 1446. Accordingly, in Re A Bankruptcy Notice; Ex parte The Official Receiver [1895] 1 QB 609 a bankruptcy registrar refused to issue a bankruptcy notice for a debt, represented by unpaid costs ordered to be paid in proceedings successfully taken by the Official Receiver, as trustee in bankruptcy, to set aside an assignment of property. The registrar refused to issue the bankruptcy notice on the ground that an order upon motion in bankruptcy was not a final judgment in an action for the purpose of s 4(1)(g) of the Bankruptcy Act 1883 (Eng) (the 1883 Act) (which provided for the issue of bankruptcy notices). The Court of Appeal dismissed an appeal from that refusal. Lord Justice Rigby said (at 611): No doubt this order is a final one, and it is very like a judgment. But it is certainly not a judgment in an action, and, according to the former decisions of this Court, the “final judgment” spoken of by s 1(g) must be a judgment in an action. And at [26]: [26] In the Australian context the focus of case law, for the purposes of ss 40(1)(g) and 41(1) of the Bankruptcy Act, has been the requirement for there to be “judgments” and “orders” that are “final” rather than the distinction between “judgments” and “orders” themselves. The provisions of s 40(3) of the Bankruptcy Act give, in a number of respects, an extended interpretation to “final

judgment” and “final order” as used in s 40(1)(g) (and hence to the corresponding expressions used in s 41(1)) by deeming certain awards, Judgments and orders to be a “final judgment” or a “final order”. This has eliminated a number of the controversies that might otherwise have arisen in the absence of those provisions: see, in particular, ss 40(3)(a), (b) and (f). Importantly, in the present appeal, the issue of “finality” itself does not arise. [80,915.14] Time issues When a creditor issues a bankruptcy notice he or she must be in a position to effect execution on his or her judgment at the time of issue: Johnson, Re; Ex parte Johnson v Tonkin (1994) 53 FCR 70; 123 ALR 607 at 610; BC9405931. In Neatport Pty Ltd v Watson [2011] FMCA 465; BC201104444 (Burnett FM) the judgment relied upon was stayed, and then the stay was lifted. It was held that, following both the domestic rules applicable in Queensland and the former practice in the White Book, Order 45 r 6 that the court was entitled to fix a later time for performance. Can the existence of the “order” be relied upon? Barnett FM at [19] held: “My view is that the order made on 30 September 2003 was, in fact, not a ‘judgment’ but an ‘order’. By operation of its terms, the order was not meant to take effect until a later order, which later order took effect from 2 May 2008. That order constituted the final order which picked up the original order of 30 September 2003 which, in turn, was relied upon for the issue of the bankruptcy notice. The bankruptcy notice was issued within time and, accordingly, satisfied the requirement of s 41(3) for the issue of a bankruptcy notice.” [80,915.15] Setting aside bankruptcy notices and mareva injunctions See [91,105.5]. [80,915.16] Prescribed form — s 41(2) and reg 4.02 The prescribed form for a bankruptcy notice is set out in Form 1 of Sch 1 of the Bankruptcy Regulations: reg 4.02. It was introduced by SR No 76 of 1997, and has been in force since 15 April 1997. The previous form (see SR No 263 of 1997) was in force between 16 December 1996 and 14 April 1997. Parts of that form were held to be ultra vires in Distribution Group Ltd (t/as Lawrence & Hanson) v Lyndan (1997) 78 FCR 240 and Bank of Melbourne Ltd v Hannan (1997) 78 FCR 249. Prior to 16 December 1996, the [page 165] prescribed form of bankruptcy notice was set out in Form 4 of the Bankruptcy Rules (now repealed). The cases dealing with invalidity of bankruptcy notices follow in the cross-reference. The High Court has now, in Adams v Lambert (2006) 225 ALR 396; 80 ALJR 679; [2006] HCA 10; BC200601712, followed the dissenting judgment in Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68; [2000] FCA 1915; BC200008108. See [80,915.30]. In Mejias v Federal Express (Aust) Pty Ltd [2007] FMCA 1817; BC200709948 at [17] Smith FM applied the judgment in Commonwealth Bank of Australia v Horvath (Jnr) (1999) 161 ALR 441; [1999] FCA 143; BC9900436 on the ground that the reasoning of Finkelstein J remained sound. The central importance that a recipient of a bankruptcy notice should be able to establish unambiguously from the notice itself what judgment or order was relied upon for the claimed debt was set forth in his Honour’s reasons. A similar conclusion was arrived at in Australia and New Zealand Banking Group Ltd v Menso (2006) 205 FLR 169; [2006] FMCA 1522; BC200611107 at [66]. Attacks on Finkelstein J’s formulation continue but it seems to have survived and emerged triumphant: Ryan J in Winn v Blueprint Instant Printing Pty Ltd [2011] FCA 292; BC201101600 and Winn v Blueprint Instant Printing Pty Ltd (2011) 193 FCR 41; [2011] FCA 293; BC201101599. As Dodds-Streeton J said of this decision in Winn v Blueprint Instant Printing Pty Ltd (No 2) [2011] FCA 723; BC201104637 at [49]: His Honour, (having noted the conflicting views expressed by Finkelstein J in Commonwealth

Bank of Australia v Horvath (Junior) (1999) 161 ALR 441 and Hansen J in Scott v Evia Pty Ltd; Scott v Charitopoulos [2008] VSC 324) concluded at [21]: As a result of Finkelstein J’s characterisation, even if only for reasons of comity, of the order of a taxing master of the Supreme Court of Victoria as a final order for the purposes of s 41(3) of the Bankruptcy Act, I am obliged to come to the same conclusion in respect of the Taxing Master’s order of 9 November 2005 unless I am persuaded that Finkelstein J’s approach was clearly wrong; see Hicks v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 757 per French J, at [76] and Cooper v Cmr of Taxation (2004) 139 FCR 205, per Lander J, at [46]. I am not so persuaded. When a bankruptcy notice was issued as part of an abuse of process, as it was in HWY Rent Pty Ltd v HWY Rentals (in liq) (No 2) [2014] FCA 449; BC201403302 (Perry J) the court has applied Finkelstein J’s judgment and American Express International Inc v Held (1999) 87 FCR 583; 168 ALR 185; [1999] FCA 321; BC9901337 thus confirming the principle. Judge Burnett in Ferris v Bilic [2014] FCCA 781; BC201402652 reiterated the importance on conformity in which he sets out the deficiency and why it cannot be deal with under s 306: 5. The certificate was submitted to the Registrar of the Queensland Magistrates Court by the creditor personally. Its form bears the seal of the court, but the document itself, being that attached to the bankruptcy notice as the final order or judgment, does not bear any signature of a court officer. In my view, for reasons that follow, the absence of a signature of a relevant officer of the Court is significant and determinative. 6. The presence of a signature serves to confirm and authenticate the matters required by s 31(1). That is, the adjudication certificate has been filed as a judgment consistent with s 31(2). As I have noted, s 31(2) requires that the certificate be accompanied by an affidavit stating that the whole or part of the adjudicated amount has not been paid at the time the certificate is filed. Upon the filing of the affidavit and the certificate an important assessment must take place, that is, that those matters are assessed as correct. 7. In my view, that assessment is no trifling issue. That matter is fundamental to the efficacy of the final order or judgment. It is on the strength of that assessment that the certificate may be “filed as a judgment,” as referred to in s 31(1). Significantly, s 31(1) appears to be in two parts. The first is that part I have just mentioned, namely, the certificate being “filed as a judgment for a debt,” and the second is that the judgment “may be enforced” in a court of competent jurisdiction. [page 166] This iteration sets out the obstacle in some detail: it is clear that the argument set out by His Honour can only be gainsaid by either new legislation or a, as yet unknown principle. [80,915.17] Authorisation for issue of bankruptcy notice The prescribed form of bankruptcy notice makes provision for the identification of the person who applied for the bankruptcy notice, that is, the creditor or the creditor’s authorised agent. There is also provision for the signature of that person. In the case of the authorised agent, the signature is expressed to be given as confirmation that the person is the authorised agent. Despite earlier authority to the contrary (for example, McWilliam v Jackson (2000) 96 FCR 561; [2000] FCA 175; BC200000463; National Australia Bank Ltd v Westbrook [2000] FCA 246; BC200000789), it would now appear that the creditor’s authorised agent need not be a natural person, and that another person may sign the confirmation note on behalf of the authorised person’s agent:

Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447; 176 ALR 501; [2000] FCA 574; BC200002129; Meekin v Commonwealth Bank of Australia [1999] FCA 682; BC9902704. [80,915.18] Identity of judgment creditor Where a procedural enactment such as s 213 of the Criminal Procedure Act 1986 (NSW) requires a penalty to be paid to the registrar of the court, that does not make that officer the judgment creditor, but rather the named individual in whose favour the order has been made. The registrar, for example, is not the principal, but merely “acting as a necessary part of the machinery under which the sum enured for the benefit” of the person entitled: see Re Klewer; Klewer v Walton [2004] FCA 410; BC200401696 at [13] and Re a Debtor [1929] 2 Ch 146. [80,915.18A] The effect of s 41(5) The decision of Lucev FM in Henderson v National Australia Bank Ltd [2012] FMCA 14; BC201200432 the essence of which follows in the quoted passages, sums up the entire principles and usage of the subsection: [7] Section 41(5) of the Bankruptcy Act is central to the resolution of the issues in dispute… [8] In Re Bedford; Ex parte H.C.Sleigh (Queensland) Pty Ltd (1967) 9 FLR 497 the Queensland Supreme Court, having found that the judgment and bankruptcy notice were for an amount (4,227l 17s 8d) in excess of the debt due (3,927l 17s 8d), said that: Nowhere in the judgments in that case can I find any statement that suggests that if a judgment for an excessive amount is not set aside, bankruptcy proceedings founded on it are bad, nor can I see in principle why if a judgment is irregular for this reason it should necessarily invalidate subsequent bankruptcy proceedings. The company in the present case has obtained a final judgment which has not been set aside and which, although irregular, is not null. My inquiry has shown that the judgment was founded on a real debt. A bankruptcy notice in the prescribed form was served. The amount stated in the notice was excessive but this does not invalidate the notice … The act of bankruptcy … has therefore been proved. [Bedford at 499 per Gibbs J. The case referred to in the first sentence is Muir v Jenks [1913] 2 KB 412.] [9] In Walsh v Deputy Commissioner of Taxation of the Commonwealth of Australia, (1984) 156 CLR 337 the High Court said: There is no doubt that a bankruptcy notice will be invalid if the sum specified in the notice as the amount due to the creditor exceeds the amount for which the creditor is entitled to issue execution, provided that the debtor gives timely notice under s 41(5) of the Bankruptcy Act 1966 (Cth), as amended, that he disputes the validity of the notice on that ground. and … the [bankruptcy] notice must be understood as speaking as at the date of its issue and the requirements of the notice, for the purposes of s 40(1)(g) of the Bankruptcy Act, must be ascertained in that context. This reinforces the view that the amount which must be correctly stated is the amount of the judgment debt owing at the date of issue. [page 167] [10] Olivieri v Stafford & Ors (1989) 24 FCR 413 is a judgment of a Full Court of the Federal Court in which the appellant contended that that the amount of a final judgment in the District Court of New South Wales, being $19,318.93, which was the same amount as the debt said to be

owing under the bankruptcy notice, was overstated by an amount of $389, and that the bankruptcy notice was therefore invalid. The appellant had failed in an application to the District Court of New South Wales to set aside the final judgment. The majority in Olivieri upheld the validity of the bankruptcy notice and dismissed the appeal. A number of propositions emerge from the separate majority judgments, including that: a. a court exercising bankruptcy jurisdiction has power to “go behind” the judgment relied on to found the bankruptcy notice so as to inquire into the existence of the alleged debt, [36] and does so on the basis that a bankruptcy notice which has been “issued for a debt which is liable to be set aside or varied such that the creditor does not have a debt upon which the bankruptcy proceedings can be founded” does not give effect to the provisions of the Bankruptcy Act; Olivieri at 429–430 per Gummow J. b. if the judgment relied upon to found the bankruptcy notice is a default judgment, the court exercising bankruptcy jurisdiction “will always ‘go behind’ the judgment if there is what it regards as a bona fide allegation that no real debt ‘lay behind’ the judgment”; Olivieri at 422 per Beaumont J. c. the judgment stands as prima facie evidence of a debt until a court exercising bankruptcy jurisdiction goes behind the judgment; Olivieri at 422 per Beaumont J. d. if a court exercising bankruptcy jurisdiction goes behind the judgment relied upon, the examination of whether there is a bona fide debt “extends to every aspect of the parties dealings”, and not merely limited transactions selected by creditor or debtor; Olivieri at 424 per Beaumont J. e. a bankruptcy notice which accurately states the amount of a judgment, which a court exercising bankruptcy jurisdiction has not gone behind, does not overstate the amount due; Olivieri at 424 per Beaumont J. and citing Re Riviere; Ex parte Original Mont de Piete Ltd (1919) 20 SR(NSW) 77 at 84 per Owen AJ. f. a court exercising bankruptcy jurisdiction will only reconsider the judgment relied on to found the bankruptcy notice to determine whether the bankruptcy notice should be set aside, and not merely to ascertain if the judgment debt should be reduced, [42] and hence the court should not go behind a judgment where “to do so would leave a substantial sum still due and owing but unpaid”. Olivieri at 432 per Beaumont J. [11] In Emerson v Wreckair Pty Limited (1992) 33 FCR 581 the amount claimed in the bankruptcy notice to be due and unpaid was the amount of the judgment debt, but that amount was overstated by either $750 or $900 on a debt of $29,081.65. [45] On appeal to the Supreme Court of Queensland the judgment debt was reduced by the sum of $5,400. That appeal was determined after the validity of the bankruptcy notice had been argued before the Full Court of the Federal Court, but before judgment was delivered. [46] In Wreckair the Full Court of the Federal Court: a. citing Walsh said that: i) the relevant date for the inquiry into whether the amount specified in the bankruptcy notice is excessive, that is whether it exceeds the amount in fact due, is the date of the issue of the bankruptcy notice; and ii) a payment in reduction of the judgment debt made after the issue of a bankruptcy notice, but before the service of the bankruptcy notice will not invalidate the bankruptcy notice; (at 587) b. said that once an act of bankruptcy has been committed, it remains an available act of bankruptcy even though the judgment on which it is based is set aside; [ibid] c. found that:

i.

the amount due by the appellants and the amount for which execution might issue [page 168]

was the amount stated in the judgment (at first instance in the Queensland District Court), and the bankruptcy notice claimed an amount in accordance with that judgment, and was therefore not for an amount exceeding that in fact due; (at 547) ii. “[t]he circumstance that the amount of the judgment was subsequently reduced is not to the point”; [ibid] and iii. it was not appropriate that a court exercising jurisdiction in bankruptcy, on an application to set aside a bankruptcy notice, go behind a judgment where the grounds for the application, if accepted, would only support a finding that the amount of the debt be reduced, and would not support a finding that there was in truth no debt at all. [at 588–589] [12] In Kyriackou v Shield Mercantile Pty Ltd (2004) 138 FCR 324; [2004] FCA 490 the Federal Court concluded that: [36] The purpose of a bankruptcy notice is to convey to the debtor the amount claimed by the creditor, and to give the debtor the opportunity to pay or secure that amount. It is important that a bankruptcy notice be prepared with great care. The courts require strict compliance with the Act and Regulations. The reason for this is that a bankruptcy notice sets in train the entire process leading to bankruptcy, a process that has been described as “quasi-penal”. [37] Formal errors in a bankruptcy notice do not result in its invalidity unless they have caused substantial injustice. However, substantive errors will generally lead to the notice being regarded as invalid and of no effect. If a bankruptcy notice is invalid, any bankruptcy proceedings based upon that notice will be dismissed. (at 335–6 and 36–7). [13] In Sgro ABC(NS) at 646–647 per McInnis FM; FMCA at para.31–35 per McInnis FM. this Court set aside a bankruptcy notice in circumstances where a payment of at least $457,178.36 had been made to the respondent creditor after judgment was entered, but some seven weeks prior to the issuance of the bankruptcy notice. The omission in the bankruptcy notice of the amount paid prior to the issuance of the bankruptcy notice was held to be a failure to meet an essential requirement under the Bankruptcy Act to state amounts paid prior to the issuance of the bankruptcy notice, and was therefore a failure in respect of the substantive matter warranting the setting aside of the bankruptcy notice. [at 646–647 & 31–35]. [14] In Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10 the High Court, having referred to the dissenting judgments in Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; [2000] FCA 1915 said that the “view of the legislative purpose” of s 41(5) of the Bankruptcy Act that was “persuasive” [57] was that expressed in Lewis as follows: It cannot be correct that amendments to the [Bankruptcy] Act that left undisturbed s 41(5) and (6) which state that a notice that demands payment of a sum that is unjustified or excessive is only invalid if a debtor gives notice within a prescribed period, introduced a new regime in respect of bankruptcy notices under which a judgment debtor could have such a notice set aside where the amount claimed is due in fact and there is no prospect that the debtor could be misled as to the steps to be taken to comply with the notice. [Lewis FCR at 68

per Lee J; FCA at para 97 per Lee J, quoted at Adams CLR at 421 per Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ; HCA at para 33 per Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ (emphasis added). [15] In Skouloudis (Skouloudis v St George Bank Ltd (2008) 173 FCR 236; [2008] FCA 1765) the debtor, Ms Skouloudis, had issued a s 41(5) notice under the Bankruptcy Act alleging overstatement on the basis of payments of more than one million dollars prior to the issuance of the bankruptcy notice by the respondent bank. After service of Ms Skouloudis’ s 41(5) notice, [page 169] this Court allowed the bank to amend the bankruptcy notice to reflect the amount said be due after the payments made prior to the issuance of the bankruptcy notice. [59] The Federal Court held that: a. the bankruptcy notice was invalid because of the overstatement, saying that it was a correct statement of the law that: … an overstatement in a bankruptcy notice of the amount in fact due renders the notice invalid, whether or not the overstatement could reasonably mislead the debtor, if a notice complying with the requirements of s 41(5) has been duly given; [at 243 at [23]] and b. that an invalid bankruptcy notice was not able to be amended under s 33(1)(b) of the Bankruptcy Act once a valid s 41(5) notice under the Bankruptcy Act had been served. [at 245 and [35]–[36]] The Federal Court said: If a bankruptcy notice is a nullity and of no effect, it is not a notice under the Act: see Circle Credit Co-Operative Ltd v Lilikakis (2000) 99 FCR 592 at [10] per Heerey J; Chandramouli v Wallader [2001] FCA 808 at [4]. It must be a notice under the Act to be subject to the Court’s power of amendment in s 33(1)(b). [at 245 and [35]] [16] There notice of overstatement of the amount due in the bankruptcy notice has been given for the purposes of s 41(5) of the Bankruptcy Act, the quantum of the overstatement is immaterial. [Croker v Cmr of Taxation (2005) 145 FCR 150 at 152–153 per Hely J; [2005] FCA 127 at paras 9–16 per Hely J (“Croker”). See also PP McQuade and MGR Gronow, Australian Bankruptcy Law and Practice (6th Edn) (Sydney: Thomson Reuters, 2008) at para 41.5.05, where, citing Croker, it is said: “[n]or does it matter that the amount of the overstatement is small compared with the amount of the judgment debt”.] [80,915.18B] Section 41(6A) failure of Bankruptcy notice to comply with reg 4.04(2) Regulation 4.04(2)(b)(iii) requires a statement that the conversion of the amount of foreign currency spending currency must be made in accordance with the regulation in particular that the applicable rate of exchange being the rate worked out by subreg (3). In the judgment of Sackville J in Parianos v Lymlind Pty Ltd (1999) 93 FCR 191; 164 ALR 229; [1999] FCA 684; BC9903516 his Honour made the following observations at [16]–[18]: The language of reg 4.04 strongly suggests that it is intended to create requirements essential to the validity of a bankruptcy notice. It applies to the specific case of a bankruptcy notice issued in relation to a judgment expressed in an amount of foreign currency: reg 4.04(1). The regulation is expressed in emphatic language. The notice must contain a statement to the effect that the amount of foreign currency expressed in the judgment or order may be paid in that foreign currency or by

means of a specified amount of Australian currency that is stated to be the equivalent to the amount of foreign currency: reg 4.04(2)(a). The notice also must set out the applicable rate of exchange worked out in accordance with reg 4.04(3), the conversion calculation and a statement that the conversion of the foreign currency amount into Australian currency has been made in accordance with the regulation: reg 4.04(2)(b). Regulation 4.04(3) itself specifies the manner in which the conversion must be done. In particular, it requires the conversion to be done in accordance with the opening telegraphic transfer rate of the CBA on the second working day before the day on which the application for a bankruptcy notice is lodged under reg 4.01. Thus reg 4.04(3) identifies a particular exchange rate prevailing at a particular time in a particular institution. Reg 4.04 is clearly intended to establish a specific scheme for bankruptcy notices issued in relation to foreign currency judgments. The scheme has two principal objects. The first is to inform the judgment debtor that, in order to comply with the bankruptcy notice, he or she has an option. The debtor may pay the judgment debt in the foreign currency in which the judgment is [page 170] expressed. Alternatively, he or she may choose to pay “by means of a specified amount of Australian currency that is stated to be the equivalent to the amount of foreign currency”. The second and related object is to identify the precise means by which the “specified amount of Australian currency” must be calculated and therefore to notify the debtor of the precise amount of Australian currency that must be paid, if he or she exercises the option to pay in local currency. The means chosen to identify the exchange rate recognises the obvious fact that exchange rates may vary, not merely from day to day, but from hour to hour or even by the minute or second. For this reason, a clearly identified and readily ascertainable rate of exchange is nominated for the purpose of undertaking the calculation required by reg 4.04. He further state at [22]: Confirmation that reg 4.04 is to be interpreted as creating an essential requirement for a bankruptcy notice is provided by the wording of reg 4.02. Mr Aldridge submitted that minor departures from the prescribed form of a bankruptcy notice could hardly be intended to lead to the invalidity of the notice. This is plainly correct. However, the conclusion follows from the express language of reg 4.02, which prescribes the required form. Reg 4.02(3) states that the requirement that a bankruptcy notice must follow the prescribed form is not to be taken as expressing an intention contrary to s 25C of the Acts Interpretation Act 1901 (Cth). Since s 25C provides that, in the absence of a contrary intention, strict compliance with a prescribed form is not necessary, reg 4.02(3) makes it abundantly clear that substantial compliance with the prescribed form is sufficient. Had the drafter of Pt4 intended that, in the case of a bankruptcy notice founded on a foreign currency judgment, substantial compliance with reg 4.04 should be enough, it would have been very easy to adopt a formula similar to that employed in reg 4.02(3). The absence of any such formula in reg 4.04 strongly suggests that strict compliance was required, at least in relation to the date by which the conversion calculation is to be made. The matter was the subject of a Full Court decision in Australian Steel Company (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68; [2000] FCA 1915; BC200008108 at [3] and [22]. That proposition was supported by the observations of Deane J in Kleinwort Benson Australia Ltd v Crowl

(1988) 165 CLR 71 at 81; 79 ALR 161; 62 ALJR 383; BC8802611: It has long been a fundamental precept of the law of bankruptcy that “a bankruptcy notice, which is the foundation of a bankruptcy, attended as a bankruptcy is with penal consequences, is a matter in which great strictness is required” (per Cozens-Hardy MR, In Re A Judgment Debtor, 530 of 1908 [1908] 3 KB 474 at 476–477; see also James v FCT (1955) 93 CLR 631 at 644). A defect in a bankruptcy notice will invalidate it “except in the case of a merely formal defect” (per Vaughan Williams LJ, In Re OCS (a Debtor); Ex parte the Debtor [1904] 2 KB 161 at 163; see also Re a Debtor, No 21 of 1950; Ex parte the Debtor v Bowmaker Ltd [1951] Ch 313 at p 317). If a defect in a bankruptcy notice is other than a formal one, the notice itself is defective and failure to comply with it does not constitute an act of bankruptcy. Although the judge was in a minority in that case there was nothing in the judgement of the majority that falsified that proposition. Burnett FM applied each of these cases in Thompson v STX Pan Ocean & Co Ltd [2011] FMCA 575; BC201106521 and reluctantly at [37] set aside the bankruptcy notice. [80.915.19] s 41(7): failure to satisfy requirements This section provides for any extension of time for compliance with the bankruptcy notice so as to allow the court time to hear the parties and consider the debtor’s claim that he has a counterclaim as described in s 40(1)(g). The principle is set out in Bryant v Commonwealth Bank of Australia (1994) 217 ALR 251; BC9400001 per Davies, Foster and O’Loughlin JJ at Ground 10: Section 41(7) provides for an extension of time for compliance with the bankruptcy notice so as to allow the Court time to hear the parties and to consider the debtor’s claim that he has a counterclaim or set-off as described in s 40(1)(g). The mere filing of an affidavit which satisfies [page 171] the terms of the subsection will bring the extension of time, for which the section provides, into operation. As an affidavit is required, it must verify the cross-claim or set-off, it must verify that the cross-claim or set-off equals or exceeds the amount of the judgment debt, and it must verify the fact that the cross claim is one which could not have been set up in the action which the judgment order was obtained. In Re Brink: Ex parte The Commercial Banking Co of Sydney Ltd (1980) 44 FLR 135 Lockhart J said at 142: In my opinion the affidavit cannot merely contain an assertion that the debtor has a counterclaim, set-off or cross demand which he could not have set up in the action in which the judgment or order was obtained. The affidavit must show a counterclaim, set-off or cross demand which equals or exceeds the amount of the judgment debt and which the debtor could not have set up in the action in which the judgment or order was obtained: see Vogwell v Vogwell (1939) 11 ABC, at 85; Ebert’s case (1960) 104 CLR, at 350; Re A Debtor per Slesser LJ [1935] 1 Ch 347, at 352. In Ebert v Union Trust Co of Australia Ltd (1960) 104 CLR 346; [1960] ALR 691; (1960) 34 ALJR 182; BC6000660 the High Court stated: The debtor clearly must satisfy the Court that there exists in him a counter-claim, set-off or cross demand. “Cross demand” is the word relied upon here. The appellant cannot satisfy the Court that a cross demand exists by showing no more than that she propounds one and states how she suggests that she can make it out. In Re Duncan; Ex parte Modlin (1917) 17 SR (NSW) 152; 34

WN 49 Street J said that the debtor need not satisfy the Court that there are reasonable grounds for believing that he will establish his cross action, but only that he has a bona fide claim which he is fairly entitled to litigate. This perhaps is expressed too favourably to the debtor. In Re A Debtor (1958) 1 Ch 81 Roxburgh J said: “But not every demand will suffice. A demand made in bad faith would not be good enough. The debtor must satisfy the Court that he has a genuine demand … But in my opinion a demand must be more than bona fide: the Court must be satisfied that it has a reasonable probability of success” (1958) 1 Ch, at p 99. Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand. In Guss v Johnstone (2000) 171 ALR 598; 74 ALJR 884; [2000] HCA 26; BC200002278 the same Court stated at [40]: [40] The state of satisfaction referred to in s 40(1)(g), and s 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim. This line of authority was considered and applied by Lloyd-Jones FM in Kwok v Bank of Western Australia Ltd [2011] FMCA 559; BC201105405 from [29] and, as the authorities were assembled from several sources, provides a useful compendium for practitioners. These cases were also applied by Lucev FM in Green v Wilden Pty Ltd [2013] FMCA 24; BC201300117, from at [21] but in this case a set-off extinguishing the debt was found to exist. [80,915.20] Amendment of bankruptcy notice In Circle Credit Co-op Ltd v Lilikakis (2000) 99 FCR 592; 173 ALR 122; [2000] FCA 667; BC200002587, the bankruptcy notice was altered by a process server prior to service, so as to correct an incorrect address of the Federal Court registry in the debtor’s state or territory. Heerey J held that as the notice had been altered without the official receiver’s authority, it was not “a bankruptcy notice under [the Bankruptcy Act 1966 (Cth)]”. Accordingly, it was held to be invalid. See also Prudential-Bache Securities (Aust) Ltd v Warner [1999] FCA 1143; BC9905004 (issue of replacement bankruptcy notice). [page 172] Amendment by the authority of the court under s 41(5) is a different matter. In Skouloudis v St George Bank Ltd [2008] FMCA 114; BC200800505 at [6] Raphael FM noted that in other cases it would be easier to start again, but in the case before him that option was closed because it was more than 6 years since the date of judgment pursuant to s 41(3)(c)(i) of the statute. But should the amendment be granted? In Croker v Commissioner of Taxation (2005) 145 FCR 150; 58 ATR 327; [2005] FCA 127; BC200500522 at [17] and [18] Hely J, referring to Seovic Civil Engineering Pty Ltd v Groeneveld (1999) 87 FCR 120; 161 ALR 543; [1999] FCA 255; BC9901025, suggested that the usual course was to issue a new notice. In Skoulidis, above, these decisions were directly in issue. Raphael FM at [24] adopted the view expressed in Adams v Lambert (2006) 228 CLR 409; 225 ALR 396; [2006] HCA 10; BC200601712: [24] In terms, s 33(1)(b) expressly permits amendment, at the discretion of the Court, of “any written process, proceeding or notice under this Act”. This phrase, in its ordinary meaning, is well capable of including creditor’s petitions. The appellant relies on the isolated dictum in Re Abrahamson directed to s 306 the Bankruptcy Act as justifying a construction of s 33(1)(b) so as

to imply into the otherwise unqualified words of that provision a limitation that would deny power to amend process, including petitions, to remedy defects, at least if they could be said to be of fundamental substance. No other basis upon which it would be permissible to restrict the wide words of this provision was identified. To read s 33(1)(b) down in the way suggested is inconsistent with the object of Parliament in conferring on the Court an unqualified discretion to amend process in bankruptcy, a discretion exercisable in all cases according to the circumstances of the particular case and, in particular, whether the exercise of the discretion would inflict justice on or avoid injustice to any person. [emphasis added by His Honour] Raphael FM noted at [8] that: Such an unqualified discretion to amend is to be exercised in the interests of justice: Queensland v JL Holdings Pty Ltd(1997) 189 CLR 146; see also Australia and New Zealand Banking Group Ltd v Coutts (2003) 201 ALR 728 at [22] per Conti J. [80,915.23] Extensions of time subss (6A) and (6C) In Seller v Deputy Commissioner of Taxation (2011) 282 ALR 80; [2011] FCA 865; BC201105744 Flick J considered the circumstances which an extension of time should be allowed in which an answer can be supplied to a bankruptcy notice. The power to extend time is found in subss (6A) and (6C) of this section. His Honour said at [38]: An applicant who seeks to invoke s 41(6A) must bring himself within either s 41(6A)(a) or (b) before any question arises as to the manner in which the discretion may be exercised. Other than pursuant to s 41(6A), there is no statutory grant of power and no general inherent power in the court to extend time for compliance with a bankruptcy notice: James v Abrahams (1981) 34 ALR 657 at 661; 51 FLR 16 at 22 per Deane and Lockhart JJ. Section 41(6A) is thus the “sole source of power in the court to extend the time for compliance with the requirements of a bankruptcy notice”: Re Dalco; Ex parte Dalco v Deputy Commissioner of Taxation (1986) 67 ALR 605 at 613 per Neaves J. The judge agreed with counsel for the Commissioner that because no application had been made to the Supreme Court finding with respect to the issue of the bankruptcy notice and that once the decision has been made not to set aside bankruptcy notice the power to extend time is spent. Accordingly his Honour declined to extend time. Judge Jarrett in Featherstone v Hambleton as Liquidator of Ashala Pty Ltd (in liq) [2014] FCCA 1149; BC201404275 explained the working of the subsection at [11]: [11] The authorities make it clear that where one of the two limbs of s 41(6A) has been fulfilled within the time proscribed by that subsection, the Court has power to extend the time for compliance with the bankruptcy notice, notwithstanding that at the time of making of the order for extension, the time for compliance with the bankruptcy notice has expired and an act of bankruptcy has been committed. [page 173] [12] In this case the appeal which, for the purposes of s 41(6A), can be seen to be an application to set aside the judgment or order in respect of which the bankruptcy notice was issued, was instituted well before the time for complying with the bankruptcy notice passed. In fact, the appeal was instituted before the bankruptcy notice was issued. So the first limb of s 41(6A) is made out. [80,915.25] Service of bankruptcy notice For policy reasons, personal service of a bankruptcy notice is desirable: see Re Kassab; Ex parte Commissioner of Taxation (1994) 55 FCR 305 at 315. Regulation

16.01 deals with service of documents and specifies five methods, namely personal delivery, delivery by post or courier, delivery by document exchange, or delivery by fax or email. Regulation 16.01(2) provides for when a document is taken to have been received. The amendments to s 309 of the Act and the repeal of the bankruptcy rules appear to mean that personal service of a bankruptcy notive is no longer necessary; see Re Silvas; Ex parte Official Trustee v Maureen Silvas (FCA, Tamberlin J, NG 7238/97, 4 April 1997, unreported, BC9701064); Re Hollier; Ex parte Tasmania [1999] FCA 1348; BC9906281 (service by fax and post) and Drake v Stanton [1999] FCA 1635; BC9907684 (service at last known address). Application may, of course, still be made for an order for substituted service under s 309(2), but the usual filing fee on the making of an application to the court will be required. Unless there is personal service of a bankruptcy notice, or unless the provisions of an order for substituted service are complied with, a petitioning creditor will be at risk that a creditor’s petition may be dismissed if a bankrupt appears and contends that the method of service used in the circumstances was ineffective. See also Re O’Sullivan; Ex parte O’Sullivan v Commonwealth Bank of Australia (1995) 57 FCR 145; 129 ALR 295 (service within the precincts of the court). In Re Mills; Ex parte Bondor Pty Ltd (FCA, Burchett J, No 1683/90, 18 June 1991, unreported, BC9102992), Burchett J dealt with the situation where reliance is made upon a statutory process of service, but where it is positively proven that the bankruptcy notice in question was not served. In such a case, his Honour held that the bankruptcy notice is a nullity under s 154 of the Act. His Honour relied, chiefly, upon Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 96; 48 ALR 1 at 8 where, in a joint judgment, the court came to the conclusion that Imperial authority established the principle that: … proof of non-delivery means that service cannot be deemed to have taken place … at the time of delivery in the ordinary course of the post and cannot be established as having taken place at any other time. The consequence is that where it is necessary to establish service at a particular time, proof of non-delivery is as effective as proof of non-service, notwithstanding that service by post is in the circumstances permitted and the requirements of the Interpretation Act [of the United Kingdom] are observed … The consequence was that nullity had been established pursuant to s 154. The factual nature of circumstances where personal service has been found to occur is considered in Re Elkateb, Lawindi v Elkateb (2001) 187 ALR 479 at 479; [2001] FCA 1527; BC200106656 and in Re Lucas (recs and mgrs); MSI Holdings Pty Ltd (recs and mgrs apptd) (in liq) [2012] FCA 1486; BC201210627 at [19]. In the former case at [13] Stone J said: The question then is whether the respondent was informed of the nature of the document. Order 7 r 2(2) states that the person served must be informed of the nature of the document. Although the word “nature” may be somewhat vague, it is clear that the rule is not very demanding: Re Roberts; Ex parte Evans (unreported, Hill J, 25 August 1989); Re Rosenberg; Ex parte Westpac Banking Corp (unreported, Spender J, 21 July 1993); Rogerson v Tchia (1995) 123 FLR 126. Further, the person served need not be informed of the “nature” of the document orally: Rogerson v Tchia (above). Thus if the “nature” of the document is clear on its face and the document is not placed in an envelope or otherwise concealed, r 2(2) will be satisfied. In this case, one of the documents served clearly bore the heading “CREDITOR’S PETITION” and [page 174] identified “MOHAMED SAFWAT ELKATEB” as respondent. There was no evidence to suggest that these parts of the document would not have been immediately visible to Mr Elkateb.

[80,915.30] Validity of bankruptcy notice — s 306(1) A bankruptcy notice is a proceeding under the Act: Re Wheeler & Reynolds; Ex parte Kerr v Crowe (1988) 20 FCR 185. Therefore, if it is defective or irregular, regard should be had to s 306(1) of the Act, which provides: 306 (1) Proceedings under this Act are not invalidated by a formal defect or an irregularity unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court. The classic statement of principle in relation to the validity of bankruptcy notices is found in Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161 at 165. In that case, Mason CJ, Wilson, Brennan and Gaudron JJ stated: The authorities show that a bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Act, or if it could reasonably mislead a debtor as to what is necessary to comply with the notice: James v FCT (1955) 93 CLR 631 at 644; [Pillai v Comptroller of Income Tax [1970] AC 1124] at 1135. In such cases the notice is a nullity whether or not the debtor in fact is misled: Re a Judgment Debtor (530 of 1908) [1908] 2 KB 474 at 481. But what happens when the bankruptcy notice is based on a judgment that is a nullity? In such circumstances Re Bayliss [1972-73] ALR 890; (1971) 19 FLR 14 set the result aside as ineffective in law. Similar circumstances were considered by the Full Court of the Federal Court consisting of Lee, Whitlam, and Jacobsen JJ in Croker v Commissioner of Taxation (2003) 52 ATR 226; [2003] FCAFC 23; BC200300444 where, at [12], the court said: [12] … in The Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33 a majority of the Full Court held that it is an essential requirement of a bankruptcy notice, in which interest is being claimed, that it state the provision under which such interest could be validly claimed. Interest on the amount of a judgment registered under s 105(1) of the Service and Execution of Process Act (which was not the case here) is payable pursuant to s 108 of that Act. Yet in this case, as appears from the terms of the attachment to the bankruptcy notice reproduced in [4] above, the respondent has wrongly claimed that interest is payable pursuant to s 39 of the Local Courts (Civil Claims) Act 1970 (NSW). This has been enlarged by the judgments in Marshall v General Motors Acceptance Corporation Australia (2003) 127 FCR 453; 199 ALR 109; [2003] FCAFC 45; BC200300967 (Spender J (dissenting), Cooper and North JJ). Spender J tended to follow a strict interpretation of the cases arguing for nullity. The majority relied on Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68; [2000] FCA 1915; BC200008108. Spender J formed the view that the principle in the latter case was inconsistent with the view of the High Court in Kleinwort Benson. His Honour observed at [16]: [16] Australian Steel, in truth, is not a case where there has been a want of compliance with the form prescribed by the Regulations for a bankruptcy notice. It was a case where the provision under which the interest was being claimed was incorrectly stated, the bankruptcy notice stating that interest was claimed “… pursuant to section 101 of the Supreme Court Act 1986 (Vic).” That section provided for interest to be payable on money judgments of the Supreme Court of Victoria and had no operation in respect of money judgments of the Magistrates’ Court of Victoria. Interest on a Magistrates’ Court judgment in Victoria was payable under the provisions of s 100(7) of the Magistrates’ Court Act 1989 (Vic). Australian Steel was a case where the information contained in the form was incorrect. This was precisely the situation which was the subject of consideration by the High Court in Kleinwort Benson.

[page 175] Cooper J held that a claim as to interest was incapable of generating a formal error because it was impossible to exactly specify the claim for interest. He said at [55]–[56]: [55] The certified judgment is not such a document in terms. It includes no claim for, or calculation of interest. On the proper construction of the document attached to the bankruptcy notice in the present case, the notice of Bourne as to the provision under which the interest was claimed was s 95(1) of the Supreme Court Act 1970 (NSW) and not otherwise. The claim was not well based and the notice did not comply with the requirements of the statutory form [56] There are no material differences between the circumstances of the bankruptcy notice in issue in the Australian Steel Company (Operations) decision and the notice the subject of this appeal. In those circumstances, as his Honour acknowledged at first instance, he was bound toapply the decision of the majority in Australian Steel Company (Operations) and to dismiss the petition on the ground that the bankruptcy notice was invalid, and that in consequence, the appellant had not committed an act of bankruptcy in failing to comply with its terms. North J substantially agreed at [83]. As there may well be a challenge to the reasoning of the majority attention to all three judgments is advised. Adams v Lambert (2006) 225 ALR 306; 80 ALJR 679; [2006] HCA 10; BC200601712 reconsidered Kleinwort Benson Australia Ltd v Crowl, above. The court (Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ) held that the principle was correctly stated by Gyles and Lee JJ in Australian Steel Company (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68; [2000] FCA 1915; BC200008108. The High Court said: [32] … Gyles J accurately identified the question as whether correct completion of the form prescribed by the regulations in every respect is a requirement made essential by the Act. Bearing in mind that, in the present case, the error could not have misled the respondent as to what it was necessary to do in order to comply with the requirements of the notice, it is difficult to understand how, consistently with Kleinwort Benson, the respondent could succeed without an affirmative answer to that question. and [32] … In their dissenting reasons in Lewis, Lee J and Gyles J both gave a detailed account of the 1996 amendments to the Act and Regulations. It is unnecessary to repeat what they said in that respect. Lee J concluded: [93] Properly construed, the Act and Regulations do not express an intention to create a new regime of strict compliance imposed on a judgment creditor issuing a bankruptcy notice. The tenor of the Act and Regulations is not consistent with that conclusion. An attempt has been made to recast the process of issue of a bankruptcy notice in terms more understandable to a judgment debtor, but the essential requirements of a bankruptcy notice remain as they have been stated by bankruptcy legislation over many years. Lee J also said [at [97]]: It cannot be correct that amendments to the Act that left undisturbed s 41(5) and (6) which state that a notice that demands payment of a sum that is unjustified or excessive is only invalid if a

debtor gives notice within a prescribed period, introduced a new regime in respect of bankruptcy notices under which a judgment debtor could have such a notice set aside where the amount claimed is due in fact and there is no prospect that the debtor could be misled as to the steps to be taken to comply with the notice. The amending Act could not have contemplated that a mistaken citation of the source of entitlement to claim interest would be a substantive defect or irregularity in the notice so as to exclude the operation of s 306 of the Act. That case has recently been followed in Bennell v American Express International Inc [2006] FCAFC 80; BC200604422. [page 176] The same reasoning applies when the statute incorporates other legislation by reference. Most state jurisdictions (as does r 42.7(2) of the Uniform Civil Procedure Rules 2005 (NSW)), require that “the costs of any application or other step in any proceedings” … “do not become payable until the conclusion of the proceedings” … “unless the court orders otherwise”. As in most civil proceedings an interlocutory order for costs does not provide a valid basis for a bankruptcy order (as against a final order): Maher v Honeysett (2009) 222 FLR 407; Canty v Agency Printing (Australia) Pty Ltd [2010] FMCA 174. [80,915.35] “requirement made essential by the Act” For a discussion of the meaning of the phrase “requirement made essential by the Act” in Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161, see Yu v Farrow Mortgage Services Pty Ltd (in liq) (1995) 60 FCR 300. In Kyriackou v Shield Mercantile Pty Ltd (2004) 138 FCR 324; 207 ALR 393; [2004] FCA 490; BC200402106 the issue of non-conforming notices was addressed in detail by Weinberg J. His Honour followed Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68, which in turn followed Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161. The principle was described at [37]: [37] Formal errors in a bankruptcy notice do not result in its invalidity unless they have caused substantial injustice. However, substantive errors will generally lead to the notice being regarded as invalid and of no effect. If a bankruptcy notice is invalid, any bankruptcy proceedings based upon that notice will be dismissed. At [44] he said: A bankruptcy notice that fails correctly to identify the statute under which interest is claimed cannot sensibly be regarded as invalid, while one that fails adequately to identify the creditor is upheld. The defect or irregularity in the present case was, on any view, of greater significance that that which was held to invalidate the bankruptcy notice in Australian Steel. The bankruptcy notice in the present case was therefore invalid. In Derriman v National Australia Bank Ltd [2005] FCA 75; BC200500280, Wilcox J considered that alternative approach, in turn considered in Australian Steel Co (Operations) Pty Ltd v Lewis, above — that of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490 where the test was whether it was the purpose of the legislation that the act done in breach of the provision should be invalid, and noted that the court reached substantially the same conclusion. See also [80,915.40] and [80,915.45].

[80,915.40] “reasonably mislead a debtor” The question is not whether the debtor was in fact misled, but whether the defect was reasonably capable of doing so. The question is considered from the point of view of the debtor in question, and not a hypothetical debtor. The court may look to facts extraneous to the bankruptcy notice: Re Wimborne; Ex parte Debtor (1979) 24 ALR 494. These principles were followed in Worchild v Drink Nightclub (Qld) Pty Ltd [2005] FCA 863; BC200504454. The judgment is of interest also because of the conclusions drawn as to the alleged means of misleading. In Maloney v Australia and New Zealand Banking Group Ltd [2007] FMCA 1729; BC200708952 was a decision of Raphael FM who stated at [6]: [6] A Bankruptcy Notice cannot be drawn in a way that is likely to confuse or mislead a debtor as to the amount payable. The test is whether the Bankruptcy Notice will “reasonably mislead a debtor as to what is necessary to comply with the notice”: Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 at 165 per Mason CJ, Wilson, Brennan and Dawson JJ (referring to James v FCT (1955) 93 CLR 631 at 644; Pillai v Comptroller of Income Tax [1970] AC 1124 at 1135) see also Farrugia v Farrugia [2000] FCA 129 per Madgwick J at [14]; Vereker v Timbs [2001] FCA 1776 per Branson J at [15]. In such cases, the notice will be a nullity whether or not the debtor is in fact misled: Kleinwort Benson, (above) at 165. [page 177] But a line of authority which requires the certain bankruptcy notices be treated as a nullity whether the bankrupt was in fact mislead or not (which question, too, is the effect of this section). A persistent and increasingly strong line of authority descending from the judgment of Finkelstein J in Commonwealth Bank of Australia v Horvath (Jnr) (1999) 161 ALR 441; [1999] FCA 143; BC9900436 continues to find support. Finkelstein J said at [13]: Then comes the question whether we should regard the shortcomings of the notice as a formal defect or irregularity which should be cured by the court in its discretion under s 147 of the Bankruptcy Act 1914 [the counterpart of s 306 of the Australian legislation] … The case is rather different from anything that subsequently occurs in bankruptcy proceedings because the failure to comply with the notice is the very act of bankruptcy on which all the rest is founded. Unless, therefore, you have a notice that fulfils the statutory requirements, you cannot fairly say that a debtor has committed an act of bankruptcy by not complying with it …. On the whole, it appears to me, although the debtors do not seem to have been misled in any way in the particular circumstances, that we should be departing from the course mapped out by reported authority if we were to overlook or attempt to cure the shortcomings of the notice in the present case.” A similar view was expressed in Skouloudis v St George Bank (2008) 173 FCR 236; [2008] FCA 1765; BC200810409 and by Burchardt FM in Zurcas v Bryantcraft Pty Ltd [2010] FMCA 161; BC201001191 in which the bankruptcy notice was set aside on the basis of the above authority. Tyndall v Mathews [2010] FMCA 976; BC201010152 illustrates and summarises these principles in rejecting an application based upon s 41(6A). It’s utility to the reader is based upon how a “misleading” statement can be identified and summarises the application of the above cases. [80,915.45] Defect in compliance with prescribed form The effect of the 1996 amendments to the Act, which provide that a bankruptcy notice is required to be in the form prescribed in the Regulations (s 41(2)) has been the subject of much conflicting Federal Court authority. In Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68, a Full Court of five judges heard three

unopposed petitions in which the bankruptcy notice had a defect or irregularity. The majority applied a purposive test in finding that the relevant requirement (see below) was one made essential by the Act, and therefore the notices which failed to comply with that requirement, were invalid. The High Court has granted special leave to hear an appeal from the Full Court decision in Kirk v Ashdown [1999] FCA 1664; BC9907800, in which the issue was raised. [80,915.46] Defect in interest calculation schedule Much of the recent authority in relation to defects in bankruptcy notices has been concerned with defects in the interest calculation schedule. In Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68, a Full Court held that a bankruptcy notice which relied on a Magistrate Court order but erroneously referred to the Supreme Court interest provision was invalid, on the basis that there had been a failure to comply with an essential requirement. In Shephard v Blueberry Farms of Australia (Corindi) Ltd (2001) 162 FLR 339; [2001] FMCA 2, Driver FM held that a bankruptcy notice which referred to s 94 of the Supreme Court Act 1970 (NSW) instead of s 95(1) of the same act breached a requirement made essential by the Act and was invalid. See also Miller v Niven [2001] FMCA 32. In Wright v Australia and New Zealand Banking Group Ltd [2001] FCA 386; BC200101464, Beaumont J held that a bankruptcy notice which referred to both s 39 of the Local Courts (Civil Claims) Act 1970 (NSW) (which was incorrect) and s 95(1) of the Supreme Court Act 1970 (NSW) (which was correct) was valid. His Honour held that as this was an obvious error, it did not constitute a “defect” or “irregularity”. In St George Bank Ltd v Baldwin [2001] FCA 161; BC200101306 Madgwick J held that a bankruptcy notice which referred to s 83A of the District Court Act 1973 (NSW) (which was incorrect) rather than s 85 of the same Act was valid, on the basis that the correct section (s 85) was [page 178] referred to in the certificate of judgment. On this basis it was held that there had been compliance with the requirements of the Act. Further, his Honour held that, overall, the bankruptcy notice was not misleading. In Garvin v Patterson [2001] FCA 1253; BC200105640 Beaumont J held that a bankruptcy notice which referred to the relevant Act but not section was valid. His Honour held that “a reader of the statement made in the present notice would, in my view, interpret the reference to the Supreme Court Act to be a reference to that statute in its relevant application in the present context.” On this basis, his Honour found that the notice was not defective. In Australian Central Credit Union Ltd v Laing (2001) 113 FCR 363; [2001] FCA 1154; BC200104841 Mansfield J held that a bankruptcy notice which referred to the relevant legislation (Local Court Rules (NT)) but not the rule (r 39.01) was invalid because it did not state the “provision” under which interest was claimed. The petition was dismissed. [80,915.47] Defect in reproduction of printed form A bankruptcy notice may be invalid in circumstances where there is a material omission from the words of the printed form: Re Manion; Ex parte DCT (1979) 23 ALR 270; 37 FLR 78; Re Martin [1972] ALR 403; (1971) 18 FLR 372 (material parts of notice illegible). For example, in Re Wong; Ex parte Kitson (1979) 27 ALR 405; 38 FLR 207, the failure to include the word “or” between paras (a) and (b) of the old form of bankruptcy notice was held to be a defect that could reasonably mislead the debtor, and hence rendered the notice a nullity. A contrary example is found in Northam v Commonwealth Bank of Australia [1999] FCA 544; BC9902166, where a bankruptcy notice was held to be valid despite a number of minor departures from

the prescribed form. [80,915.48] Misdescription of debtor or creditor In Re McSwiney; Ex parte Davies (FCA, Beaumont J, 24 November 1986, unreported), Beaumont J held that a misdescription of the debtor’s middle name in the bankruptcy notice was cured by s 306(1). The mistake also occurred in the judgment. His Honour held that the notice, read as a whole, could not reasonably have misled the debtor. In McWilliam v Jackson (2000) 96 FCR 561; [2000] FCA 175; BC200000463, Wilcox J held that a bankruptcy notice which gave the creditor as “Anthony Jackson & Others” was fatally defective on the basis that the notice failed to properly identify the person or persons who constituted the creditor. In several cases, the creditor’s name changed between the entry of judgment and the issue of the bankruptcy notice. Where the new name is used in the bankruptcy notice, the question is whether the debtor would be misled by the use of the new name: Re Crisafulli; Ex parte National Commercial Banking Corp of Australia Ltd (1985) 11 FCR 272; Re Hansen; Ex parte Hansen (1985) 4 FCR 590. In Matheson v Scottish Pacific Business Finance Pty Ltd [2005] FCA 670; BC200503515 a misdescription of a name by providing less that the full name “does not cause any injustice as it was not likely to mislead the debtor.” In several cases, the creditor’s name changed between the entry of judgment and the issue of the bankruptcy notice. Where the new name is used in the bankruptcy notice, the question is whether the debtor would be misled by the use of the new name: Re Crisafulli; Ex parte National Commercial Banking Corp of Australia Ltd, above; Re Hansen; Ex parte Hansen, above. [80,915.49] Internal inconsistency in bankruptcy notice In Bendigo Bank Ltd v Scerri [1999] FCA 1215; BC9905567, it was held that a bankruptcy notice that had a discrepancy between the amount claimed in para 1 of the notice and the “Total Debt Owing” in the schedule was fatally defective. See also Re Browne; Ex parte Spirulina Products Co Australia Pty Ltd (1985) 7 FCR 251. [80,915.50] Format of bankruptcy notice A bankruptcy notice must follow Form 1 in respect of its format (reg 4.02(2)), but this is not to be taken as an expression of contrary intention for the purposes of s 25C of the Acts Interpretation Act 1901. Section 25C provides that substantial compliance with a prescribed form is sufficient, unless the contrary intention appears. The requirement that the warning be in bold type face is probably not one made essential by the Act: Australian Steel Co (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68 commenting on Farrugia v Farrugia (2000) 99 FCR 16; 178 ALR 506. [page 179] [80,915.51] Time at which debt must be correctly stated A bankruptcy notice speaks as at the date of its issue. Therefore, the debt must be correctly stated as at that date. Payments made since the date of issue and before service do not render a bankruptcy notice defective: Walsh v DCT (1984) 156 CLR 337; 53 ALR 606. [80,915.55] Overstatement of debt— s 41(5) Overstatement of the amount due to the creditor in a bankruptcy notice is a defect or irregularity. However, a bankruptcy notice will not be invalidated if, during the period given for compliance, the debtor serves on the creditor a notice disputing the validity of the notice on this ground. It is necessary that the debtor establish a case set out above at [80,910.125] and particularly in Bailey v MCH Building Pty Ltd [2011] FMCA 124; BC201104584. In deciding that a bankruptcy notice is not liable to be set aside by reason only of an overstatement unless the debtor gives notice to the creditor under s 41(5), Gilmour J in Deputy Commissioner of Taxation v Cumins [No 5] [2008] FCA 794; BC200803956 affirmed the obiter remarks of Sackville J

in Re Murdoch; Ex parte Australia & New Zealand Banking Group Ltd [1994] FCA 737 at [10] that where no notice under s 41(5) was given then the bankruptcy notice would not be invalid even if the overstatement of the amount due is capable of misleading the debtor. Sackville J’s remarks sat in the context of his consideration of s 306 of the Act in respect to an overstatement in a bankruptcy notice but where no notice under s 41(5) had been given. The parties had proceeded on the assumption that s 306 had application in those circumstances. His Honour doubted the correctness of the assumption but the case was decided on the basis of it. In Hudson v Donald [1997] FCA 852; BC9703964 (affirmed on appeal), Lindgren J considered how s 41(5) and (6) apply to the new form of bankruptcy notice: Clearly, the expression in subs 41(5) “the sum specified in the notice as the amount due to the creditor” is apt to refer at least to the amount shown as “Total debt owing.” Does it also refer to the component parts of that amount, in particular, “Amount of judgment or order”? Although the contrary is arguable, I think that it does, at least in a case such as the present, where the overstatement in the “Total debt owing” is no more than a reflection of an overstatement in one of those elements. Except in a case of an arithmetical error of addition, an overstatement of the “Total debt owing” will always predicate an error in one or more of the component elements. To confine the operation of the subsections to a case where there is an overstatement only of the “Total debt owing” due to an arithmetical error of addition would be too narrow a construction. Where, as here, the overstatement of the amount of the “Total debt owing” is attributable to an overstatement in the amount of one or more components in the Schedule, the excessive specification of “the sum specified in the notice as the amount due to the creditor” to which subs 41(5)) refers, extends to embrace the corresponding and causative excessive specification in the Schedule of an amount or amounts of the latter kind. In that case His Honour enunciated what Gilmour J called in Deputy Commissioner of Taxation v Cumins [No 5], above, the “wider construction”. Gilmour J preferred the wide view, exemplified in that passage, to the narrow view, which was expressed in the later case of St George Wholesale Finance Pty Ltd v Spalla (2000) 181 ALR 682; [2000] FCA 1094; BC200004668, which His Honour declined to follow. Gilmour J statesat [33]: The intent of s 41(5) is, in my opinion, to consider the question of whether the amount stated is excessive as well as why that is the case. This approach to its construction is consistent with the observations of the Full Court in Seovic (i.e Seovic Civil Engineering Pty Ltd v Groeneveld (1999) 87 FCR 120) at [36] to which I have referred concerning the need for the debtor, when giving notice under s 41(5), to provide sufficient information to enable the creditor to identify the nature of the misstatement. I apprehend that this was intended to mean that information needs to be provided disclosing not just that the amount stated as due is excessive but the reason(s) why that is said to be so. His Honour may be said to have ended one of the lines of authority on this question. What His Honour has indicated is that to establish an overstatement of debt is more than establishing an arithmetical error but requires a wrong principle of calculating revealing a fundamental error. [page 180] But Edmonds J in Skouloudis v St George Bank Ltd [2008] FCA 1765; BC200810409 held that s 45(1) was now so drawn the he followed the view expressed in at [51] of Seovic, above, that an overstatement in a bankruptcy notice of the amount in fact due renders the notice invalid, whether or not the overstatement could reasonably mislead the debtor, if a notice complying with the requirements

of s 41(5) has been duly given. Therefore, he has also followed the observations of Mason CJ, Wilson, Brennan and Gaudron JJ Klienwort Benson (ie Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161; [1988] HCA 34; BC8802611) that a bankruptcy notice is a nullity, and that s 45(1) cannot be employed to amend a notice in circumstances where it is a nullity. Section 41(5) has no application to the situation where the judgment is for a greater amount than that owing. It is concerned with an overstatement in the amount owing under a bankruptcy notice and not a judgment. While the court has power to go behind the judgment, it cannot do so if the only purpose is to show that the amount should be reduced, as opposed to showing that there is no debt owing at all: see [81,015.60]. However, it may be relevant to show that the judgment should be reduced to an amount below the minimum amount that supports a petition: Wilson v Official Trustee in Bankruptcy [1999] FCA 1760; BC9908304. It cannot be argued that the overstatement is a penalty because it is clear that a bankruptcy court’s ability to go behind the judgment is limited as aforesaid and that a bankruptcy court is not an appropriate venue for this purpose: Hussain v King Investment Solutions [2007] FMCA 242; BC200701433. In Reasonable Endeavours Pty Ltd v Dennehy [2002] FCA 1472; BC200207167 various grounds were submitted that the judgment was overstated, notably that the amount of interest on the judgment was overstated because of s 5(7) of the Limitation of Actions Act 1958 (Vic) which stated that no action should be brought relating to interest on a judgment for more than six years after it became due. Because s 3(1) of the same statute defined “action” to include any proceeding in a court of law, it was submitted that a bankruptcy notice was not an action: see Lockhart J in Re Maddox; Ex parte the Debtor (1979) 24 ALR 279 at 283–4; 36 FLR 392 at 396–7. Marshall J held that the role of the court in hearing a creditor’s petition was to determine whether an act of bankruptcy had occurred and not whether arrears of interest could be received. He applied Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285 at 287; (1968) 13 FLR 101 at 105 and Re Maddox, above, ALR at 284; FLR at 396. His Honour concluded that a bankruptcy notice is a proceeding for some purposes under the Bankruptcy Act but that it was not a proceeding for the purposes of the Limitation of Actions Act 1958 (Vic). [80,915.57] Bargains re repayment of debt Whether compromises in court proceedings impinge upon this section depends upon the interpretation of the agreement as Robertson J found in Medcalf v Crimeguard International Security Systems Sydney Pty Ltd [2011] FCA 963; BC201106387. A summary of the ground of appeal at [37]: As may be seen from the notice of appeal, the major thrust of the appellants’ argument is that by the time of the agreement constituted by the exchange of emails, the terms of the second deed had merged in the judgment. The submission was that as at the date of the agreement on 27 September 2010 the second deed had ceased to have a separate legal existence. This was because the judgment had been filed and entered on 23 September 2010 and by virtue of the principle of merger as explained in Ex parte Fewings; in re Sneyd (1883) 25 Ch D 338. It followed that the agreement to pay $25,000 could not have been in relation to the second deed. As a consequence following the principle of Walsh v Deputy Commissioner of Taxation (1984) 156 CLR 337 at 339; 53 ALR 606; 58 ALJR 368; BC8400499 the bankruptcy notices contained an amount that was excessive and would therefore be void. The judge however took the view that although the Civil Procedure Act (NSW) provided for interest this provision was not exhaustive and might arise through other entitlements such as by agreement: Hungerfords v Walker (1989) 171 CLR 125; 84 ALR 119; 63 ALJR 210; 20 ATR 36. Robertson J said at [51]: The mistake as to the legal source of the obligation was not a vitiating factor. The respondent bargained away its entitlement to enforce the date for a period. The bargain was performed in that no steps were taken to enforce the debt until 21 December 2010 when the bankruptcy notices issued.

[page 181] By way of contrast, in Bega v RMB Australia Holdings Ltd [2012] FMCA 517; BC201204739 the Federal Magistrate mistook the effect of promised relief, because the promises did not amount to a binding agreement at [27]. See also Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; 264 ALR 15; [2009] NSWCA 407; BC200911627 at [4]–[6]. [80,915.60] Form of notice of overstatement — s 41(5) In Seovic Civil Engineering Pty Ltd v Groeneveld (1999) 161 ALR 543 the court held, by way of obiter, that a debtor must do more than merely assert that there is a misstatement. The notice must give sufficient information for the creditor to identify what is said to be the alleged misstatement. Compare Emerson v Wreckair Pty Ltd (1992) 33 FCR 581; 109 ALR 539. This case was applied in Hussain v King Investment Solutions Pty Ltd (2006) 153 FCR 428; 234 ALR 195; [2006] FCA 905; BC200605679 where it was held that so long as the notice was served in the time specified the subsection was satisfied. This principle has been applied in Deputy Commissioner of Taxation v Cumins [No 5] [2008] FCA 794; BC200803956. [80,915.65] Extending time for notice of overstatement — ss 41(5) and 33(1)(c) The time prescribed by s 41(5) may be extended by the court under s 33(1)(c): Re Wilhelmsen; Ex parte Gould (1986) 11 FCR 107; 66 ALR 189; Re Clubb; Ex parte Clubb v Westpac Banking Corp (1990) 93 ALR 123. Doubt has been expressed as to whether such an order can be made after the commission of an act of bankruptcy (see Re Shaddock; Ex parte Commonwealth Bank of Australia (FCA, Goldberg J, 7800/97, 9 April 1998, unreported, BC9801209)) or the presentation of a petition: see Re Dier; Ex parte Suduk (FCA, Beaumont J, 9 March 1990, unreported). [80,915.67] Effect of a notice of overstatement The prevailing view is that the giving of a notice of overstatement in accordance with s 41(5) invalidates a bankruptcy notice whether or not the overstatement could reasonably mislead the debtor: Re Greenhill; Ex parte Myer (NSW) Ltd (1984) 5 FCR 84; 58 ALR 185; Re Emerson; Ex parte Wreckair Pty Ltd (1991) 101 ALR 315 at 318–19 (affirmed on other grounds in Emerson v Wreckair Pty Ltd (1992) 33 FCR 581; 109 ALR 539). In each case, the court declined to follow the decision of Lockhart J (at first instance) in Re Walsh (1982) 47 ALR 751; 65 FLR 87. For a discussion of these cases, see Seovic Civil Engineering Pty Ltd v Groeneveld (1999) 87 FCR 120; 161 ALR 543. This interpretation has been supported by Hely J in Croker v Commissioner of Taxation (2005) 58 ATR 327; [2005] FCA 127; BC200500522 at [16] and by Tracey J in Spencer v Lane Rowin Pty Ltd [2007] FCA 1519; BC200708724. [80,915.70] Understatement of debt due In Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161, Mason CJ, Wilson, Brennan and Gaudron JJ held: Understatement of the amount due, whether it be an understatement of the judgment debt or of interest payable thereon, will thus constitute a defect which is substantive rather than formal only if the understatement is objectively capable of misleading the debtor as to what is necessary for compliance with the notice. It may be that, in a given case, understatement is capable of misleading the judgment debtor particularly if the notice is capable of producing uncertainty as to whether the debtor is required to pay the amount in fact due or the amount specified in the notice. In such a case uncertainty arises, not merely from the understatement, but from the understatement in the context of the particular bankruptcy notice. No such uncertainty arises if it is clear that payment of the amount specified in the notice will constitute compliance with the notice. See also Re McDonald; Ex parte Elder Smith Goldsbrough Mort Ltd (1978) 18 ALR 505; 32 FLR

11; Re Schierholter; Ex parte Geis (1978) 19 ALR 113; 32 FLR 22; Re Sly; Ex parte Broadlands International Finance Ltd (1988) 79 ALR 68. [80,915.75] Claim for post-judgment interest The prescribed form for a bankruptcy notice makes provision in its schedule for a claim for interest due on the judgment or order. Where interest [page 182] is claimed, the notice must have attached to it a document setting out the provision under which the interest is being claimed and details of the calculation in accordance with Note 2 to Form 1 (Bankruptcy Notice). However, a claim for interest is optional: Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161. Where interest is claimed to a point prior to the issue of the bankruptcy notice, the creditor does not need to specifically abandon the interest accruing after that point: Re Farrugia; Ex parte DCT (1988) 19 FCR 1; 80 ALR 651. This decision overcomes the practical problem associated with drawing a bankruptcy notice in circumstances where it is uncertain as to when the notice will be issued. In Bendigo Bank Ltd v Scerri [1999] FCA 1215; BC9905567, the amount claimed in para 1 of the notice did not include interest. However, interest was set out in the Schedule and reflected under the item in the Schedule: “Total Debt Owing”. The notice was held to be invalid because the defect was likely to mislead a debtor as to what was necessary to comply with notice. As to the situation where there has been a defect or irregularity in respect of the document setting out the interest calculation, see [80,915.147]. [80,915.80] Claim for costs If legal costs are claimed in a bankruptcy notice, a certificate of taxed or assessed costs must be attached to the bankruptcy notice: Form 1, Note 1. This requirement is additional to the requirement that a copy of the judgment or order relied upon by the creditor be attached to the bankruptcy notice: Form 1, para 2. The old form of bankruptcy notice (in force prior to 16 December 1996) did not require either attachment, but required details of the judgment. There are a number of conflicting authorities on the question of whether reference had to be made to both the judgment or order and the taxing officer’s determination. For a discussion of those authorities, see Thorpe v Bristile Ltd (1997) 80 FCR 330. The authorities might be relevant in a case where there has been a failure to annex the certificate of taxation to the bankruptcy notice. In the case of a “speaking order”, such as an order made pursuant to O 62 r 45(3) of the Federal Court Rules, it is probably unnecessary to attach the certificate of taxation: see Re Luckins; Ex parte Columbia Pictures Industries Inc and Tristar Pictures Inc (1996) 67 FCR 549. [80,915.85] Time for compliance and extension of time — s 41 (6)–(7) In Re Scerri (1998) 82 FCR 146, Beaumont J held that the stipulation of 14 days for payment rather than 21 (as provided for in the note under para 3) was a fundamental defect in the bankruptcy notice. See also Re Manion; Ex parte DCT (1979) 23 ALR 270; 37 FLR 78 (omission of time for compliance); Re Spurr; Ex parte Werner (1991) 31 FCR 236 (more than one time for compliance given). Subsections (6A)–(6C) provide for extension of time. Factors relevant to an exercise of this discretion, and the list is not closed, include those set out in McPhee v Glentham Pty Ltd [2006] FMCA 1508; BC200608143 at [19] and [20] per Lucev FM and adopted and applied in Morien v Johnston [2006] FMCA 1918; BC200611000 at [10] per Lucev FM. In McPhee v Glentham Pty Ltd, above, at [19] and [20], the court said: [19] The discretion conferred is “at large”, subject to s 41(6C) of the Bankruptcy Act: Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 at pp 270–1 per Lehane J (Byron). However, grounds must be shown: Conway at pp 206 and 210 per Moore, Matthews and Mansfield JJ.

[20] Where proceedings to set aside a judgment debt and order have been instituted by way of an appeal factors to be taken into account when determining whether to exercise the discretion include: (a) whether there is an arguable case on appeal; (b) whether a stay of execution has been sought or obtained; (c) prejudice to the debtor; (d) prejudice to the creditor and other creditors; (e) the impact on the date of bankruptcy; (f) the impact on any related legal proceedings; (g) delay; and (h) whether or not undertakings have been given, or conditions can be imposed, in relation to, for example: (i) payment of monies on trust by the debtor; (ii) non-disposal of assets by the debtor; (iii) notification of significant expenditure by the debtor; and (iv) further borrowings on real property owned by the debtor, [page 183] and the debtor’s ability to fulfil or comply therewith. See Re Horwarth; Ex parte Mortgage Acceptance Nominees Ltd (1993) 43 FCR 587 at pp 592–3 per Einfeld J; Valassis v Bernard [2001] FCA 477 per Beaumont J; O’Loughlin v Glenmont Investments Pty Ltd [2001] FCA 925 at [17] and [19], per Mansfield J. To maintain a successful appeal there must be an error disclosed. In Gulotti v Coad [2007] FMCA 525; BC200702934, which applied the reasons set out above, Lucev FM, at [17], held that an allowance should be made if an ex tempore judgment is appealed from, and it was proper to adopt the submissions of one party, provided that they were properly attributed, and the matter was otherwise properly reasoned by the judge. [17] … The Magistrate referred, albeit briefly, to the essential facts which were open for him to find and reached a finding based on an application of the proper authorities taken from the Respondent’s submissions to those facts. Reasons need not be lengthy, provided they cover the essential facts, law and reasons … His Honour applied Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273; 136 LGERA 16; [2004] WASCA 149; BC200404365 at [28]–[29] per Steytler P, Templeman and Simmonds JJ. For this reason the application was dismissed. The position was summarised by Wilson FM in De Angelis v Cusack [2007] FMCA 1884; BC200710152 at [8]: [8] It is accepted that s 41(6A) is the sole source of power to extend time for compliance with a bankruptcy notice: Re Dalco; Ex parte Dalco v Deputy Commissioner of Taxation (Cth) (1986) 67 ALR 605; James v Abrahams (1981) 34 ALR 657. However, the subsection has two limbs, either of which is sufficient to enliven the court’s jurisdiction. Here the parties have focussed on subparagraph (a). However, it is clear that subparagraph (b) has been satisfied. The application to set aside the bankruptcy notice was filed within time. In my view, that is sufficient to invoke the court’s jurisdiction even if no application was made to set aside the judgment upon which the

bankruptcy notice relies. That is also the view of the learned authors of Australian Bankruptcy Law and Practice, 5th ed, Darvall & Fernon, at [41.6A.10]. Section 41(7) was considered in Khera v Jones [2007] FMCA 1453; BC200707340, which case, although decided on the facts, provides a useful example of the consideration and employment of the subsection. The applicant claimed that an assignment of the costs of the respondent had been received. This was an alleged set-off, raising questions of validity of the assignment. His Honour considered on the facts, at [78]–[79], that the applicant did not have a genuine commercial interest. The conclusion was, for this reason, at [85]: [85] … I am satisfied and find that the Applicant Debtor does not have for the purpose of s 40(1) (g) of the Bankruptcy Act a “counterclaim, set-off or cross-demand equal to or exceeding the amount of the judgment debt …” Because, as the full bench of the Federal Court held in Ahern v DCT (Qld) (1987) 76 ALR 137 at 147, bankruptcy involves a change of status: … a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds. However Raphael FM observed in Porter v OAMPS Ltd (2004) 207 ALR 635; [2004] FMCA 272 at [22]: [22] … this approach appears to overlook the fact that the service of a bankruptcy notice simply marks the start of a process and that the commission of an act of bankruptcy, while undoubtedly of significance to the debtor, does not affect the actual status of the debtor: Byron v Southern Star Group Pty Ltd 73 FCR 264; Shephard v Chiquita Brands (South Pacific) Ltd [2001] FCA 1394; BC200106197; Re Geard; Ex parte Reid (unreported, FCA, Sheppard J, 11 February 1994); Liew v JNS Technologies [1999] FCA 1428; BC9906724; Jenkins v National Australia Bank Ltd [1999] FCA 1758; BC9908483; Warner v Frost [1999] FCA 830; BC9903321. The court in these [page 184] cases when considering whether to grant an extension of time for compliance with a bankruptcy notice has been mindful of balancing the interests of creditors, noting the potential impact of a later act of bankruptcy in the event that the appeal is unsuccessful and proceedings continue. In Liew v JNS Technologies, above, Kenny J referred to the comments of Heerey J in Re Nguyen; Ex parte Commissioner of Taxation (1995) 54 FCR 403 at 407: Extension of time for compliance with the bankruptcy notice may have important adverse consequences for the judgment creditor. For example, if a sequestration order is subsequently made the commencement of the bankruptcy may be later than would otherwise have been the case, which in turn may affect rights of recovery by the trustee in relation to property. Kakavas v Crown Melbourne Ltd [2011] FMCA 11; BC201100117, an application to set aside a bankruptcy notice, also considered an extension of time to comply with the bankruptcy notice. Reithmuller J considered and applied Re Geard (above). His Honour concluded that when the extension was desired in order to pursue an appeal, noting that a stay had been refused by the Supreme Court of Victoria, that the application for relief should be refused. At [23], “it seems that if the judgments against the applicant stand, he is insolvent and, indeed, is likely to be insolvent even if the judgments do not stand.”

An appropriate safeguard for debtors was seen to exist as the court is always able to exercise its discretion and adjourn any petition for sequestration until after the appeal has been heard. In Glentham Pty Ltd v McPhee [2007] FMCA 1939; BC200710295 Lucev FM in considered an application for an adjournment which was fortified by counsel’s advice that there were sufficient grounds to justify special leave to the High Court, and ultimately good prospects of success. Applying Westpac Banking Corporation v Carver (2003) 126 FCR 113; [2003] FCA 22; BC200301149 his Honour held that the court would not issue a sequestration order while an appeal was pending. In this case, and generally, special leave applications would be considered on the basis of whether the special leave application was genuine and there were arguable grounds. His Honour concluded that “genuine” meant not spurious or authentic, and discussed the line of cases flowing from s 7(4) of the Bankruptcy Act 1883 (Imp) and Re Rhodes; Ex parte Heyworth (1884) 14 QBD 49 in formulating appropriate orders. In McClymont v Owners Strata Plan No 12139 [2009] FMCA 1079; BC200910229, it was ruled that an owner’s corporation under NSW law had the necessary authority under s 41(6A)(b) to recover costs and to issue a bankruptcy notice. [80,915.86] Prohibition of extension of time — s 41(6C) Emmett J in Qureshi v Commonwealth Bank of Australia [2007] FCA 2096; BC200711590 at [10]–[11] considered the use of this section as follows: [10] Under s 41(6A) of the Bankruptcy Act 1966 (Cth) where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor, the Court may extend the time for compliance with the bankruptcy notice. Under s 41(6C), where the Court is of the opinion that the proceedings to set aside the judgment or order have not been instituted bona fide or are not being prosecuted with due diligence, the Court must not extend the time for compliance with the bankruptcy notice. [11] It has not been suggested, on behalf of the Bank, that s 41(6C) should be applied in the present case. I accept that a filing of notice of appeal from the orders of the Supreme Court of 29 August 2007 to the Court of Appeal constitutes a proceeding to set aside the judgment and orders of 29 August 2007. However, the question of whether the time for compliance with the Bankruptcy Notice should be extended involves the exercise of discretion on the part of the Court. That discretion would ordinarily be exercised by weighing in the balance the competing interests of the debtor and creditor. A principal consideration in that balancing exercise is whether or not there are prospects of success in the proceedings to set aside the relevant judgment or order, in this case, the appeal to the Court of Appeal. The application before his Honour was for leave to appeal against the decision of a Federal Magistrate dismissing an application for review of the order of the registrar declining to extend the [page 185] time for compliance with a bankruptcy notice served on the applicant. His Honour dismissed the application on the ground that it had not been demonstrated to him that there were good prospects for success of the appeal, but (at [22]): [22] If the applicant puts himself in a position where he can advance cogent arguments to the Federal Magistrates Court on 4 February 2008 in support of his appeal and provides appropriate assurances that he intends to prosecute the appeal with all due diligence, the Federal Magistrates

Court may be disposed to adjourn the hearing of the petition pending the hearing of the appeal to the Court of Appeal. It may also be necessary for the applicant to proffer appropriate undertakings concerning non-disposition of property, as a term of any adjournment. Those, of course, are matters that would have to be weighed in the balance by the Federal Magistrates Court in determining whether or not to adjourn the hearing of the petition pending the resolution of the appeal to the Court of Appeal. [80,915.90] More than one judgment or order Section 41(1)(b) now provides that a bankruptcy notice may be issued on two or more judgments or orders. Wainrit v Westpac Banking Corporation (2004) 84 ALD 57; [2004] FMCA 669; BC200407360 held that the inclusion of a costs order in a bankruptcy notice did not render the notice null. The former proposition, that a notice is null if founded on more than one judgment or order, was based upon such cases as Re Bond; Ex parte Hong Kong Bank of Australia Ltd (1991) 33 FCR 426; 105 ALR 581. This was not sustainable on the grounds that a bankruptcy notice for costs in a pending supreme court action did not involve an abuse of process and was not confusing. The decision in Wainrit, above, could be seen as denying the former proposition, but the matter has been put beyond doubt by the legislation. [80,915.95] “channelling” multiple costs orders In Re Wheeler [1982] 1 All ER 345; [1982] 1 WLR 175, the Court of Appeal held that the effect of a certificate of taxation given where the bill related to a number of costs orders was to ‘channel’ the orders into one, so as to constitute a single, final order. The court distinguished an earlier decision of Re Low; Ex parte Argentine Gold Fields Ltd [1891] 1 QB 147, which rejected such an argument, on the basis that the orders upon which the certificate was based were made in several actions. Re Wheeler, above has been followed in a number of cases in the Federal Court: see for example Catalano v Commonwealth Bank of Australia (FCA, Sundberg J, 649/97, 3 July 1997, unreported, BC9703156). [80,915.100] Creditor’s address The address of the creditor or the creditor’s agent must be set out in the body of the notice. For example, in Bank of Melbourne Ltd v Hannan (1997) 78 FCR 249 Northrop J held that a bankruptcy notice was valid in circumstances where the address of the creditor was omitted from para 1 of the bankruptcy notice, but an address where payment could be made was set out in para 4. A bankruptcy notice that does not contain an address for the creditor is a nullity: Re St Leon; Ex parte National Australia Bank Ltd (1994) 54 FCR 371. [80,915.105] Address at which it is reasonably practicable to make payment In Re Nugent; Ex parte Nugent (1985) 5 FCR 161, Pincus J stated: I am inclined to think that the basic principle, in accordance with which most of the authorities are capable of being reconciled, is that the address given should be one at which, during the relevant period, it is reasonably practicable to make payment or secure or compound. There may be quite a number of reasons why difficulty in making payment at the address given arises: for example, because it is in some remote place, or otherwise physically difficult of access, or because it is, during part of the relevant time, unattended. Re Beauchamp; Ex parte Beauchamp [1904] 1 KB 572 shows that “occasional absence of the creditor from that address, even for a whole day” is not fatal: see Re Beauchamp at 583. The qualification the court added was that the notice would be “inefficient” if “the absence is such as to deprive the debtor of a reasonable opportunity of paying the debt or securing for it or compounding for it according to the terms of the notice.” The test of “reasonable opportunity of paying” is roughly equivalent to the test of reasonable practicability mentioned above. [page 186]

[80,915.110] Person who can give a good discharge for the debt In Re Lynch; Ex parte Depela Pty Ltd (in liq) (1988) 81 FCR 944; 153 ALR 271, a bankruptcy notice was set aside on the basis that the creditor changed firms and business address (which was given in the notice) during the time for compliance with the notice, and that his former partners did not have any actual authority to receive payments on his behalf after that time. See also James v FCT (1955) 93 CLR 631; 29 ALJR 587; Re Pugliese; Ex parte Chase Manhattan Bank Australia Ltd (1993) 44 FCR 536. [80,915.115] Judgment or order specifies court or other person for payment The judgment or order upon which a bankruptcy notice is based may require payment to a specified person at a specified place, for example, to the registrar of a particular court at a particular place. In Re Francis; Ex parte Gartrell (1983) 77 FLR 80, it was held that a bankruptcy notice which specified the incorrect place for payment was more than a mere formal defect. The basis of these decisions is the rule that the bankruptcy notice must require payment in accordance with the judgment or order. That requirement was based on s 41(2)(a)(i). Notwithstanding the repeal of s 41(2)(a)(i), the rule would appear to have survived: see [80,915.46]. Unlike the old form of bankruptcy notice, the new form does not have provision for payment other than to the creditor. However the rules governing proof of indebtedness at the hearing contemplate that a bankruptcy notice might be based on a judgment requiring payment into court: O 77 r 19(5). [80,915.120] Joint debtors A bankruptcy notice may be issued to joint debtors but not to several debtors: Re McLeod; Ex parte Beneficial Finance Corp Ltd (FCA, Branson J, SN 267 of 1995, 5 October 1995, unreported, BC9502786); Hubner v Australia and New Zealand Banking Group Ltd (1999) 88 FCR 445; [1999] FCA 385; BC9901687. [80,915.125] Foreign creditor A foreign creditor must give as its address a place in Australia at which there is in fact a person duly authorised to receive payment: Re Luckins; Ex parte Columbia Pictures Industries Inc and Tristar Pictures Inc (1996) 67 FCR 549. [80,915.130] Judgment in a foreign currency Where a judgment or order is expressed in an amount of foreign currency (whether or not it is also expressed in Australian dollars), the bankruptcy notice must contain a statement in accordance with reg 4.04(2)(a) and set out the matters in reg 4.04(2)(b). Note 3 in the bankruptcy notice makes provision for this information. For the purpose of the calculation, the exchange rate is the relevant opening telegraphic transfer rate of the Commonwealth Bank of Australia on the second working day before application for the issue of the bankruptcy notice is lodged. In Parianos v Lymlind Pty Ltd (1999) 164 ALR 229, the bankruptcy notice followed reg 4.04 in all respects except one; the exchange rate used was the relevant rate on the first working day before the application was lodged. Sackville J held that reg 4.04 was an essential requirement and that the bankruptcy notice was invalid. [80,915.135] Address of Federal Court The requirement that the telephone number and address of the Federal Court in the debtor’s state or territory be stated in para 10 of the notice was removed by SR 220 of 2000: see [80,915.5]. The following are authorities concerning the former requirement: Foote v MidWest Finance Pty Ltd (in liq) (1997) 78 FCR 306; 158 ALR 320; Bonds Industries Ltd v Sing [1999] FCA 1055; BC9904427. [80,915.140] Attachment of copy of judgment or order The requirement that the bankruptcy notice have attached to it a copy of the judgment or order is an essential requirement. Accordingly, a bankruptcy notice which fails to comply with that requirement is a nullity: Commonwealth Bank of Australia v Horvath (Junior) (1999) 161 ALR 441; Re Scerri (1998) 82 FCR 146. The purpose of the requirement is to identify for the debtor the judgment or order upon which the notice is founded. The identification of the relevant judgment or order is an essential element in establishing an adequate

foundation for the bankruptcy notice: American Express International Inc v Held (1999) 87 FCR 583. Compare Hudson v Donald [1997] FCA 852; BC9703964 (affirmed on appeal) (attachment of part of judgment or order). In St George Bank Ltd v Klintworth (1998) 86 FCR 240; 157 ALR 286, Hill J held that a document generated by the computer used by the New South Wales [page 187] District Court, containing particulars of the judgment, was a copy of the order so as to comply with the requirement in Form 1. See also Lee J’s judgment in Genovese v BGC Construction Pty Ltd [2006] FCA 105; BC200600504 which applied the above principles adding as authority The Australian Steel Company (Operations) Pty Ltd v Lewis (2000) 109 FCR 33; 199 ALR 68; [2000] FCA 1915; BC200008108. His Honour also stated at [16]: [16] … I note that in Stec v Orfanos [1999] FCA 457 at [17] it is suggested that it is not necessary to attach a certificate of taxed costs where a judgment recited in Item 1 of the Schedule provides for costs to be taxed. But such a conclusion would not be consistent with the words used in Item 2 of the Schedule or Note 1 and, furthermore, would fail to meet the evidentpurpose of a bankruptcy notice prescribed by the Act and Regulations, namely, to give a debtor notice of how the amount set out in the Notice has been calculated as the amount owing. [80,915.145] Document in respect of final judgment or order Paragraph 2 of the bankruptcy notice refers to an attachment of the copy of the judgment or order. Regulation 4.01(1)(b) makes provision for the use of a number of documents in respect of the judgment or order; not just a sealed or certified copy of that judgment or order. If a certificate of the judgment or order is relied upon, the particulars of the judgment that the document contains must be substantially accurate: Thompson v Metham [1999] FCA 935; BC9903834. See also KGB Design & Construction Pty Ltd v Leondaris (FCA, Einfeld J, 6 October 1998, unreported). [80,915.147] Attachment of document setting out interest calculation Where (post-judgment) interest is claimed in a bankruptcy notice, details of the calculation must be set out in a document attached to the notice: Note 2. The document must set out the provision under which interest is claimed, and the principle sum on which, the period for which, and the interest rate or rates at which, the interest is being claimed. There is conflicting Full Court authority on the question of what is the effect of defective compliance or noncompliance with these requirements. In Kirk v Ashdown [1999] FCA 1664; BC9907800, the court held that the requirement was not mandatory, and the question was whether the debtor could reasonably have been mislead as to what was necessary in order to comply with the notice. On the other hand, the majority in Bendigo Bank Ltd v Williams (2000) 98 FCR 377; 173 ALR 175; [2000] FCA 482; BC200001866 took a strict approach. The case was criticised in Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447; 176 ALR 501; [2000] FCA 574; BC200002129 and again in Boylan v Farthing [2000] FCA 575; BC200003064 (where Finn J chose to follow the approach taken in Kirk v Ashdown [1999] FCA 1664; BC9907800). See also Bendigo Bank Ltd v Gard (1999) 92 FCR 560; [1999] FCA 1179; BC9905553 (failure to attach interest calculation document). [80,915.150] “final judgment or final order” — s 41(3)(a) See [80,910.60]. [80,915.160] “execution … has been stayed” — s 41(3)(b) See [80,910.90]. [80,915.165] Going behind the judgment See [81,015.60].

[80,915.170] Setting aside a bankruptcy notice There is no express power in the Act to set aside a bankruptcy notice. Such a power arises by necessary implication, and is within the general powers of the court conferred by s 30(1): Bryant v Commonwealth Bank of Australia (FCA, Full Court, No 282/94, 9 November 1994, unreported, BC9400001). [80,915.172] Bankruptcy notice an abuse of process The court has an inherent jurisdiction to set aside a bankruptcy notice as an abuse of process: Re Sterling; Ex parte Esanda Pty Ltd (1980) 30 ALR 77; 44 FLR 125; Re Lentini; Ex parte Lentini v CSR Ltd (1991) 29 FCR 363. If it is apparent that the purpose of the bankruptcy notice is to put pressure on a debtor to pay a debt rather than to invoke the court’s jurisdiction in relation to insolvency, then the filing of a bankruptcy notice is an abuse of process: Brunninghausen v Glavanics (FCA, Emmett J, No 8293/97, 3 March 1998, [page 188] unreported, BC9800779). The time to judge abuse of process is the time that the bankruptcy notice is issued: see Killoran v Duncan [1999] FCA 1574; BC9907553. [80,915.175] Procedure on application to set aside a bankruptcy notice — O 77 rr 13 and 14 The procedure on an application to set aside is set out in O 77 rr 13 and 14. The application must be made in Form 5. The application must be accompanied by the bankruptcy notice and an affidavit stating the grounds in support of the application and the date of service of the bankruptcy notice. Where application is made on the ground of a counterclaim etc, see [80,915.205]. [80,915.180] Extension of time — s 41(6A) The time for compliance with a bankruptcy notice may be extended notwithstanding that at the time of making the order the time for compliance with the notice has already expired, provided that one of the two limbs of the subsection has been fulfilled: Streimer v Tamas (1981) 37 ALR 211; 54 FLR 253. The decision of Lockhart J in Re Sterling; Ex parte Esanda Ltd (1980) 30 ALR 77; 44 FLR 125 was applied by the Full Court of the Federal Court in Shephard v Chiquita Brands South Pacific Ltd [2004] FCAFC 76; BC200401531. Hill and Marshall JJ observed that at [40]: [40] … Clearly s 41(6A) was intended to be in aid of the application to set aside the judgment or the bankruptcy notice as the case may be. In that context it seems strange that the legislature would intend that so long as at any time in the past there had been an application to set aside a judgment or a bankruptcy notice, and notwithstanding that such application had been determined and even notwithstanding that the time for compliance had long passed the court would have power to extend the time for compliance. Once the application to set aside the judgment or the bankruptcy notice has been finally determined (and it is not necessary to consider here the question of the status of that application during such time as an appeal was current) there is no aid which the power to extend time for compliance can give to the determined application. It follows, in our view, that the power to extend time for compliance has been spent. Sackville J made similar observations at [54]. [80,915.185] Power to extend time for compliance with bankruptcy notice — s 41(6A) In James v Abrahams (1981) 34 ALR 657; 51 FLR 16, Deane and Lockhart JJ held that “the express exclusion of a power to extend time for compliance with the requirements of a bankruptcy notice from the general powers to extend time conferred by s 33(1)(c) and the express grant of the power to extend the time for compliance in the specific cases mentioned in s 41(6A) preclude the implication of a general inherent power in the court to extend the time fixed by the registrar for compliance with the requirements of a

bankruptcy notice”. The same conclusion was reached in Hovan v Goycolea-Silva [2003] FCA 234; BC200301153 at [9]. In James v Hill [2005] FCA 853; BC200504309 Edmonds J considered the decision of the Full Court in Shephard v Chiquita Brands South Pacific Ltd [2004] FCAFC 76; BC200401531 to the effect that s 41(6A) was available for an extension of time, making resort to inherent powers unnecessary, and reached the same conclusion. McInnes FM in Dimasi v Nangiloc Colignan Farms Pty Ltd [2006] FMCA 856; BC200604700 held at [17]–[19] that the fact that an order might require action at a time at which the registry would be closed does not preclude an extension of a bankruptcy notice. See also [89,760.5] and [89,760.6]. [80,915.190] Procedure on application to extend time The procedure on an application to extend time for compliance with a bankruptcy notice is set out in O 77 rr 13 and 14. The application is made in Form 5. It must be accompanied by a copy of the bankruptcy notice, an affidavit stating the grounds in support of the application, and the date when the bankruptcy notice was served on the applicant. Where the application has been made on the basis of proceedings to set aside the judgment or order upon which the bankruptcy notice was based, the application must also be accompanied by that application and any material in support of it. [80,915.195] “proceedings to set aside the judgment or order”: s 41(6A)(a), (6C) An appeal is in the nature of “proceedings to set aside the judgment … in respect of which the bankruptcy [page 189] notice was issued”: see Liew v JNS Technologies (M) Sdn Bhd [1999] FCA 1428; BC9906724 (in which some of the authorities are collected). So, too, is an application for special leave to appeal to the High Court: Jenkins v National Australia Bank Ltd [1999] FCA 1758; BC9908483. See also Reid v Hubbard [2003] FCA 1424; BC200307440. [80,915.197] Discretion to extend time — s 41(6A)(a) The court’s opinion that the proceedings to set aside the judgment or order are bona fide and being prosecuted with due diligence is a threshold: s 41(6C). The court has a discretion to extend the time for compliance with a bankruptcy notice in circumstances where proceedings to set aside the judgment or order have been instituted. There are a number of factors which may be relevant to the exercise of the discretion. In the case of an appeal against the judgment upon which the notice was based, they include the prospects of success (Bryant v Commonwealth Bank of Australia (Fed C of A, Davies, Foster and O’Loughlin JJ, No 282/94, 9 November 1994, unreported, BC9400001)), the period of time likely to pass before the appeal is heard and determined (Bryant v Commonwealth Bank of Australia, above), the failure of the debtor to seek (and obtain) a stay of the judgment upon which the bankruptcy notice was based (Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264; Re Geard; Ex parte Reid (Fed C of A, Sheppard J, 11 February 1994, unreported); Beckwith v Pedler [1999] FCA 1312; BC9906135 (note the different situation in respect of Victorian judgments); Liew v JNS Technologies (M) Sdn Bhd [1999] FCA 1428; BC9906724), the debtor’s solvency and the interests of creditors. It has been observed in a number of cases that the principles governing the discretion are not free from doubt. The competing views are set out in the decision of Kenny J in Liew v JNS Technologies (M) Sdn Bhd, above. As to when a proceeding is taken to have been “instituted”, see Wilson v Official Trustee in Bankruptcy [1999] FCA 1760; BC9908304. [80,915.200] “counter-claim, set-off or cross demand” — s 41(7) The mere filing of an application and affidavit will not satisfy the court that the debtor has a counterclaim, set-off or cross-demand. The

satisfaction of the court must be expressed in a finding by the court and an order giving effect to that finding: Bryant v Commonwealth Bank of Australia (FCA, Davies, Foster and O’Loughlin JJ, No 282/94, 9 November 1994, unreported, BC9400001). An appeal lies against the refusal by the trial judge to express his or her satisfaction of the matter referred to in s 41(7). It is within the power of an appellate court to set aside the declaration of the trial judge, and to alter the consequences of that decision. The time for compliance with the bankruptcy notice may be extended, notwithstanding the commission of an act of bankruptcy: Guss v Johnstone (2000) 171 ALR 598; 74 ALJR 884; compare Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346; [1960] ALR 691. See [80,910.145]. In Re Glew; Glew v Harrowell (2003) 198 ALR 331; [2003] FCA 373; BC200301950, Lindgren J reviewed the authorities and concluded that the following had to be made out: [9] There are authorities suggesting that Glew and Tresidder must satisfy me of the following interrelated and sometimes overlapping matters: that they have a ‘prima facie case’, even if they do not adduce evidence which would be admissible on a final hearing making out that case … that they have ‘a fair chance of success’ or are’ fairly entitled to litigate’ the claim; … and that they are advancing a ‘genuine’ or ‘bona fide’ claim … It may be that the first and second formulations are intended to cover the same ground. In Brink [Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 44 FLR 135; 30 ALR 433] Lockhart J treated (at ALR 438-9; FLR 141) the reference to a ‘prima facie case … as a reference to ‘a fair chance of success’. … [11] Plainly, in order to ‘satisfy’ the Court for the purposes of para 40(1)(g), the debtor is not required to prove, as on a final hearing, the asserted entitlement to recover from the creditor. Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not as if the proceeding were one in which the debtor’s claim was being finally determined, but by reference to the question whether the Court should be satisfied that the debtor has a claim deserving to be finally determined. [page 190] See also Harding v DCT (No 2) [2008] FCA 1985; BC200811623 which referred to the same tests with approval. The learned judge held that the task to be undertaken was formulated in Guss v Johnstone (2000) 171 ALR 598; 74 ALJR 884; [2000] HCA 26; BC200002278 by Gleeson CJ, Gaudron, McHugh, Kirby and Callinan JJ as follows: [39] In Vogwell v Vogwell (1939) 11 ABC 83, Latham CJ said, in relation to a corresponding provision: [T]he authorities show that the matter to which the court looks is this, — whether it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue; in other words, whether it is a claim which it is proper and reasonable to litigate. In Harding v DCT (No 2), the court had to consider, inter alia, whether remarkable actions by a third party, which included production of a “GST exemption” (which was reproduced in the judgment) could have any effect upon the validity of the District Court decision upon which the bankruptcy was based. Flick J held that this conduct was not reflected in the conduct of any officer of the court, including

opposing solicitors, and that no case had been established which was analogous to that in SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189; 237 ALR 64; [2007] HCA 35; BC200706045 where although the Refugee Review Tribunal was unaware of the fraud of the agent, the result of his fraud was that the applicants had been denied such natural justice as was afforded by the Migration Act 1958 (Cth). Nor was there a general discretion in the court under s 40(1)(g) on the ground that the court retained a discretion to set aside a bankruptcy notice if it was considered “just” to do so. Latham CJ in Vogwell v Vogwell (1939) 11 ABC 83 at 85 made it clear that a claim sounding in money must be a real claim, not merely believed to be such by the claimant, and that the court must consider whether it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue. See Harding at [73]. In Commonwealth Bank of Australia v Gargan (2004) 140 FCR 1; 206 ALR 571; [2004] FCA 707; BC200403218 Hely J had to consider the circumstances in which a qui tam action (a procedure by which a common informer brings an action on behalf of the Crown) was available in Australia, its elements, and whether it was available in this particular case. The judgment examines the entire relevance of such a proceeding to the bankruptcy jurisdiction and in its course shows a great deal of legal learning lightly worn, but his Honour did not accept the contentions as providing reason why a sequestration order should not be made. Another matter which sought to bring into account an obscure form of property is Field v Jenolan Caves Resort Pty Ltd (No 2) [2008] FMCA 1701; BC200811655. The property was described by Raphael FM as: The debtor argues that he is an obligor of the bank under a guarantee in respect of which he has been sued and in respect of which a judgment exists for some $6 million odd. He would argue that if he complies with his obligations under the guarantee and pays the bank on behalf of the company he has a right of contribution from the company and therefore a set off against the company in respect of any debt that he owes the company. I believe that putting the matter in this way puts it at the highest so far as the debtor is concerned. The problem was that the debtor had not paid any money to the bank and the whole proposition was contingent and that no-one could say how much it was worth. The degree of satisfaction required by the court is set out in the next paragraph. Raphael FM referred to Vogwell v Vogwell. The result was at [10] was that the “evidence that is put before me does not satisfy me that the applicant has a set off equal to or exceeding the amount of the judgment debt”. [80,915.202] Level of satisfaction required In Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346; [1960] ALR 691 the High Court stated: “The debtor clearly must satisfy the court that there exists in him a counter-claim, set-off or cross demand. ‘Cross demand’ is the word relied upon here. The appellant cannot satisfy the court that a [page 191] cross demand exists by showing no more than that she propounds one and states how she suggests that she can make it out. In Duncan, Re; Ex parte Modlin (1916) 17 SR (NSW) 152; 34 WN (NSW) 49, Street J said that the debtor need not satisfy the court that there are reasonable grounds for believing that he will establish his cross action, but only that he has a bona fide claim which he is fairly entitled to litigate. This perhaps is expressed too favourably to the debtor. In Re a Debtor [1958] Ch 81 Roxburgh J said, at 99: ‘But not every demand will suffice. A demand made in bad faith would not be good enough. The debtor must satisfy the court that he has a genuine demand … But in my opinion a demand must be more than bona fide: the court must be satisfied that it has a reasonable probability of

success’. Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand.” In Guss v Johnstone (2000) 171 ALR 598; 74 ALJR 884 the High Court stated: “The state of satisfaction referred to in s 40(1)(g), and s 41(7), involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim.” In Kuhadas v Gomez [2014] FCCA 1130; BC201404164 at [63] the court was prepared to draw implication of contractual terms as in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283; 45 LGRA 62; 16 ALR 363; 52 ALJR 20. [80,915.203] Is there a general discretion? Is there a general discretion in the court under s 40(1)(g) on the ground that the Court retained a discretion to set aside a bankruptcy notice if it was considered “just” to do so? This question has sometimes been advanced, calling in aid the decision of Latham CJ in Vogwell v Vogwell (1939) 11 ABC 83 at 85. Flick J in Harding v DCT (No 2) [2008] FCA 1985; BC200811623 has pointed out at [73] that Latham CJ, when his words are examined in full, made it clear that a claim sounding in money must be a real claim, not merely believed to be such by the claimant, and that the court must consider whether it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue. The discretion is a general one in that it extends even to a finding upon the true construction of an agreement made under a foreign jurisdiction in accordance with foreign law, and that can be applied by the court. See Kuhadas v Gomez [2014] FCCA 1130; BC201404164 at [39]–[41]. [80,915.204] The role of natural justice In [80,915.200], the High Court in SZFDE v Minister for Immigration and Citizenship (2007) 232 CLR 189; 237 ALR 64; [2007] HCA 35; BC200706045 could, in appropriate circumstances, apply the rules of natural justice to set aside bankruptcy notices. In Macdiggers Pty Ltd v Dickinson [2008] VSC 576; BC200811132, the rules according to the provisions of natural justice which are in force or can be derived from the particular jurisdiction were applied. The layman representing the company debtor was unable to assist the tribunal as he had not been notified about the hearing in a timely fashion and had no legal advice on how to proceed. He sought an adjournment but was told by the tribunal that to be granted an adjournment he would have to pay costs. The layman could not pay those costs. Upon appeal, it was held that there should have been an opportunity to obtain legal advice and that a denial of this opportunity was a breach of natural justice. Therefore, procedural breaches in the processors that lead up to the act of bankruptcy and a breach of natural justice might be something that has very little to do directly with the bankruptcy. [80,915.205] Procedure on application to set aside a bankruptcy notice on basis of counter-claim, set-off or cross demand — O 77 r 13 The court has a wide discretion under s 51 of the Act to ensure that proceedings are not invalidated by reason of a formal defect, provided that substantial injustice will not be caused. In an appropriate case, this section may be relied upon to relieve an applicant from a failure to comply with O 77 r 13. However, this cannot avail if the applicant has failed to file an application within the time for compliance with a notice: Hubner v Australia and New Zealand Banking Group Ltd (1999) 88 FCR 445; [1999] FCA 385; BC9901687. See [80,915.175]. [page 192] [80,915.207] Foreign Judgments Kuhadas v Gomez [2014] FCCA 1130; BC201404164 at [76] is

authority for these propositions: a) b)

A bankruptcy court has power to set aside a bankruptcy notice based on a foreign judgment registered under s 6 of the FJ Act.; A bankruptcy court will exercise that power where the judgment debtor has given substantial reasons for questioning whether in truth and reality the foreign judgment ought to have been registered, or for questioning whether its registration could withstand being set aside under s 7(2)(a) of the FJ Act.

[80,915.210] “full details of the counter-claim, set-off or cross demand” — O 77 r 13(3)(b) The requirement in O 77 r 13(3)(b) that “full details of the counter-claim, set-off or cross demand” be stated will be satisfied if the details stated are sufficient to show the nature and substance of the cross-action and to demonstrate that the debtor is bona fide in his or her contention that the cross-action exists: Crimmins v Glenview Home Units Pty Ltd [1999] FCA 515; BC9901948. A mere assertion of a counterclaim, set-off or cross-demand would not be sufficient: Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433; 44 FLR 135. See also Hubner v Australia and New Zealand Banking Group Ltd (1999) 88 FCR 445; [1999] FCA 385; BC9901687. [80,915.212] Filing of supplementary affidavit — s 41(7) Lindgren J in Glew v Harrowell of Hunt & Hunt Lawyers (2003) 198 ALR 331; [2003] FCA 373; BC200301950 described the threshold at which the applicant may be allowed to litigate as “relatively low”: at [54]. At [9]–[11] he summarised the requirements: “There are authorities suggesting that Glew and Tresidder must satisfy me of the following interrelated and sometimes overlapping matters: that they have a ‘prima facie case’, even if they do not adduce evidence which would be admissible on a final hearing making out that case: Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346 (Ebert) at 350; Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433 at 438–9; 44 FLR 135 at 141 (Brink); Gomez v State Bank of New South Wales Ltd [2002] FCAFC 101; BC200201643 at [17], [18]; that they have ‘a fair chance of success’ or are ‘fairly entitled to litigate’ the claim: Brink at ALR 438–9; FLR 141; Gould v Day [1999] FCA 1650; BC9907767 at [27], [28]; Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]; and that they are advancing a ‘genuine’ or ‘bona fide’ claim: Re Capsanis; Capsanis v Owners — Strata Plan 11727 [2000] FCA 1262; BC200005275 at [11]. “It may be that the first and second formulations are intended to cover the same ground. In Brink Lockhart J treated (at ALR 438–9; FLR 141) the reference to a ‘prima facie case’ in Ebert as a reference to ‘a fair chance of success’.” See also [80,910.145]. The deemed extension of time otherwise effected by s 41(7) has no application where the affidavfit in support does not establish a counter-claim etc which satisfies the requirements of s 41(7): Webb v Hunter (1995) 59 FCR 24. However, provided that the affidavit in support of the application satisfies the requirements of s 41(7), a debtor may file further affidavit material in support of its application; even outside of the time for compliance with the bankruptcy: Foyster v Australia and New Zealand Banking Group Ltd [1999] FCA 1043; BC9904275. [80,915.215] Lifespan of bankruptcy notice — reg 4.02A A bankruptcy notice must be served within six months of its issue, or any further period the Official Receiver allows, whether within or outside that period: reg 4.02A. The application for the extension does not need to be made within the six

months: Alexander v Pargiter (1998) 86 FCR 108; BC9804358. A debtor does not commit an act of bankruptcy if, before service, the bankruptcy notice has expired and time for service has not been extended: James v DCT (1957) 97 CLR 23. [80,915.220] Successive notices It is open to a creditor to issue a fresh bankruptcy notice for the purpose of overcoming a challenge or possible challenge to an earlier notice. Where the same [page 193] creditor issues successive overlapping bankruptcy notices, the creditor must make an election as to which bankruptcy notice it is with which the debtor is required to comply: Abignano v Wenkart [1998] FCA 1468; BC9806185. But the true principle in Abignano is that the court may decline to make a sequestration order where a creditor relies upon a bankruptcy notice which has been issued in bad faith or to embarrass the debtor, but there is an absolute requirement that only one bankruptcy notice is to be issued: Re Fredericke & Whitworth; Ex parte Hibbard [1927] 1 Ch 253, applied by Dowsett J in Romano v Peldan [2003] FCA 767; BC200304694.

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[80,920] Payment etc of debt to Commonwealth or State after service of bankruptcy notice 42 (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. [subs (1) am Act 10 of 1984 s 3 and Sch]

(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. [subs (2) am Act 12 of 1980 s 174]

DIVISION 2 — CREDITORS’ PETITIONS

[80,970] Jurisdiction to make sequestration orders 43 (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(5) or 153A(1) or under section 153B. [subs (2) am Act 12 of 1980 s 25; Act 143 of 1992 s 3 and Sch; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 194] SECTION 43 GENERALLY [80,970.10] General The policy behind s 54 was described by Hill J in Nilant v Macchia (2000) 104 FCR 238; 178 ALR 371; [2000] FCA 1528; BC200006504 as follows, at [29]: Given the penal nature of the obligation created by s 54, it is difficult to see that breach of the section, no matter how inadvertent, could be categorised as merely formal. The policy behind s 54 is clear. The obligation to file a statement of affairs in a public register is intended to make information concerning the bankrupt’s affairs available to creditors and, for that matter, members of the public. The former may inspect without payment of a fee, the latter only on payment of a fee. But it is in the interests of the public in the encouragement of morality in trading that the financial situation of a bankrupt debtor be open to inspection. Because, ordinarily, the administration of the estate and ultimate distribution of dividends from the estate, will be dependent upon the trustee having full details of the trade dealings and debts of a debtor, the statement is to be made available as well to the trustee in bankruptcy. Given the scheme of the

legislation and the important role that the statement of affairs plays in it, there is considerable difficulty in seeing that Parliament would have intended that the Court, through s 306, have the ability to treat non-compliance with the statutory obligation as merely formal. This case was applied in Foyster v Prentice [2008] FMCA 757; BC200804562. In Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148 the Full Court said: It is also well established that in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds: Re Rhodes; Ex parte Heyworth (1884) 14 QBD 49; Bayne v Baillieu (1907) 5 CLR 64 and Re Verma; Ex parte Deputy Commissioner of Taxation (1985) 4 FCR 181. These cases rest on the broad principle that before a person can be made bankrupt the court must be satisfied that the debt on which the petitioning creditor relies is due by the debtor and that if any genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before he is made bankrupt. Bankruptcy is not mere inter partes litigation. It involves change of status and has quasi-penal consequences. In Council of the City of Sydney v Obeid [2013] FCA 149; BC201300931 Robertson J said at [38]: That decision was followed by a later Full Court in Adamopoulos v Olympic Airways SA (1990) 95 ALR 525. Judges Burchett and Gummow quoted Ahern v Deputy Commissioner of Taxation (Qld) (above) at 148 as laying down the governing principle and said at 532: It will, of course, be observed that the principle is stated in terms which acknowledge the existence of exceptions; it operates “in general”. For situations which were held to raise considerations making them fall outside the general rule, see Re Verma; Re Lewin and Glasson; Ex parte Milner (1986) 67 ALR 591. His Honour considered at [39] that because the judgment founding the bankruptcy notice in that case remained subject to an appeal, then the hearing of the petition ought to be adjourned pending the making of final orders. Jurisdiction to make sequestration orders is conferred by this section. The court has jurisdiction, if, when the act of bankruptcy was committed, the debtor was connected with Australia in one of the ways mentioned in s 43(1)(b): Re Mendonca; Ex parte FCT (1969) 15 FLR 256. The appropriate time to challenge the court’s jurisdiction to make a sequestration order is upon the hearing of the creditor’s petition to the court: Re Meredith; Ex parte Commonwealth Bank of Australia (1992) 38 [page 195] FCR 467. The onus of proving that the debtor has the required nexus with Australia at the time of commission of the act of bankruptcy is upon the petitioning creditor: Re Barne; Ex parte Barne (1886) 16 QBD 522. [80,970.10.5] Service generally The requirements of service as an essential component of a sequestration order are usefully summarised in Mbuzi v Favell (No 2) [2012] FCA 311; BC201201685 at [24]: [24] It is self-evident that a sequestration order against an estate is an event of the utmost

seriousness for a putative debtor (cf comments of Burchett J in Re Anthony Edward Millar; Ex parte Commonwealth Development Bank of Australia at 7 (unreported, Burchett J, 27 April 1993)). The jurisdiction of the Court to make a sequestration order is conferred by s 43 of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”), which provides that the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor where (inter alia) the debtor has committed an act of bankruptcy. [25] Section 52 of the Bankruptcy Act requires the court at the hearing of a creditor’s petition to require proof of, inter alia, the matters stated in the creditor’s petition. The creditor’s petition is required to state the act of bankruptcy upon which the petition is founded (s 44(1)(c)). Where the act of bankruptcy upon which the creditor relies is failure of the debtor to comply with a bankruptcy notice, it is beyond contention that effective service of a bankruptcy notice is essential. As Lehane J observed in Re Ferrarese; Ex parte Aloisio (1995) 60 FCR 586 at [6]: Proper service of process is of fundamental importance, and it is perhaps particularly so in the context of bankruptcy proceedings given their potentially penal consequences. It is of great importance that those whose task it is to effect service perform the task meticulously. It is equally important that the evidence given of service be meticulously accurate. Because it is essential that the Court be able to rely on evidence of service, it must be expected that the Court will regard very seriously any departure from that standard. … [27] That a bankruptcy notice may be served in accordance with methods prescribed by reg 16.01(1)(a) is clear from the decision of the Full Court in Skalkos. However, it is equally clear that the onus lies with the creditor to establish proof of service in accordance with the methods permitted by reg 16.01(1): de Robillard v Carver (2007) 159 FCR 38 at [46], [68]. Further, strict proof of service on the debtor is required. If the creditor is unable to demonstrate strict proof of delivery, the chain of delivery breaks down: de Robillard at [68]. [28] These principles were explained by Buchanan J in de Robillard in relation to reg 16.01(1)(b) of the Bankruptcy Regulations, which allows a document to be served by being left in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility. His Honour, with whom Moore and Conti JJ agreed, said as follows: [67] First, it is appropriate in principle to require strict proof. Before the introduction of reg 16.01 bankruptcy notices were required to be served personally unless an order for substituted service was made. The requirements for service were strictly enforced (Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 per Gummow J at 358). For example, in Clyne v DCT (No 4) (1982) 13 ATR 302; 42 ALR 703, Lockhart J set aside a bankruptcy notice served by post because, although by order of the Court service was deemed effective 14 days after posting and compliance was required 28 days after due service, the alleged debtor could not know when posting had in fact occurred and therefore could not reliably calculate the time for compliance. Although the introduction of reg 16.01 has removed the need for personal or substituted service, a strict approach to satisfaction of the elements of service remains appropriate. (Emphasis added.) [29] His Honour also referred with approval to In re Long; Ex parte Fraser Confirming Pty Ltd (1975) 12 SASR 130 where Walters J also endorsed the need for strict compliance with the formalities of service of a bankruptcy notice. At 133–134 his Honour said:

In taking the view that strict compliance with rules prescribing the method of service of a bankruptcy notice must be insisted upon, I draw support from the rule laid down by the [page 196] Divisional Court in Re Collier; Ex parte Dan Rylands Ltd (1891) 64 LT 742 at p 743], where Cave J observed: Due service of a bankruptcy notice is necessary in order to constitute an act of bankruptcy, and it is more important that the rules and regulations should be properly complied with in the case of a bankruptcy notice than in the case of a petition for adjudication. When an act of bankruptcy has been committed, then the petition is a less formal matter, and one as to which it is not necessary to take exactly the same view. Very soon after the Act of 1883 came into operation several cases were brought before the Courts with reference to a bankruptcy notice, and on more than one occasion the Court of Appeal have expressed the opinion that, since the commission of an act of bankruptcy was a serious matter, and involved consequences of what have been called a penal nature, it was important to see that the necessary preliminaries have been complied with. This dictum of Cave J was expressly approved by Vaughan Williams LJ in In re O.C.S. (A Debtor) [[1904] 2 KB 161 at p 162] and by Harman J in Bowmaker’s case [[1951] Ch 313 at p 318]… [30] Later in the judgment Walters J continued (at 134): Reference may also be made to the decision of the Court of Appeal Re A Debtor [[1939] 1 Ch 251]. There it was held that the handling of a bankruptcy petition to the debtor in a sealed envelope was not good service, for the reason that, as the petition was in a sealed envelope which bore no reference, and called no attention, to its contents, the debtor could have had no knowledge of what was contained in the envelope. In delivering his judgment (in which other members of the Court concurred), Sir Wilfred Greene MR stressed the necessity for “great strictness” in observing the directions prescribed by the relevant English Bankruptcy Rules for service of a bankruptcy petition. His Lordship said: It is no exaggeration to say that the practice in to writs and the requirements of the law in regard to the service of writs are, and have always been, regarded as matters strictissimu juris. In the case of the service of a bankruptcy petition, I can see nothing in the section and Rules which can fairly be construed as relaxing the strict requirements which are to be found in the case of service of writs and other documents under the Rules of the Supreme Court. [31] The importance of proper proof in respect of service of a bankruptcy notice was also recognised by Gummow J in Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 359. In the instant case His Honour distinguished Repatriation Commissioner v Gordon (1990) 26 FCR 569; 21 ALD 145; 100 ALR 255; BC9003635 mainly on the ground that the subject-matter of that case was concerned with the benevolent nature of the Repatriation Commissioner and not with the penal requirements of bankruptcy. “I consider that — to respectfully adopt language of Burchett J in Millar at 6–7 — the creditor’s petition later served on Mr Mbuzi was poisoned at its source. There was no proof that an act of bankruptcy based on a failure to comply with the bankruptcy notice had actually occurred.” at [41].

[80,970.10.10] Procedural errors In Moore v Wilson [2006] FCA 79; BC200600971, when considering a rehearing pursuant to s 104 of the Federal Magistrates Act 1999 (Cth), Manfield J considered a number of procedural errors that, if found in a particular case, might be fatal to a petition. His Honour at [40] found: [40] … review hearing therefore required the respondents to prove the various matters which they were also required to prove before the Registrar, including those specified in s 52(1) of the Act: see eg Martin v Commonwealth Bank of Australia (2001) 217 ALR 634; Meehan v Alfaro (1999) 93 FCR 201. The same approach applies under s 104 of the FM Act. There is no material [page 197] difference in the two provisions. That approach has been adopted in the Federal Magistrates Court: see Adelaide Bank Ltd v Badcock [2002] FMCA 10; Clancy v Robinson [2002] FMCA 47. His Honour considered that the court needed to show that justice had been administered fairly in the presence of the parties. The test was whether the impugned conduct would cause a fair-minded lay observer to apprehend that the magistrate might not bring an impartial and unprejudiced mind to the resolution of the review application: see Johnson v Johnson (2000) 201 CLR 488 at 492; 174 ALR 655 at 657–8; [2000] HCA 48; BC200005268; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344; 176 ALR 644; [2000] HCA 63; BC200007446. [80,970.11] Is a petition the result of a step in an action? If this were the case then the limitation statutes in certain states could affect the circumstances in which one could be brought, and its subject matter. An example is Reasonable Endeavours Pty Ltd v Dennehy [2002] FCA 1472; BC200207167 where s 5(7) of the Limitation of Actions Act 1958 (Vic) was raised as justifying the contention that the bankruptcy notice overstated the amount of interest said to be owing. Marshall J held, applying Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285 at 287; (1968) 13 FLR 101 at 105 and Re Maddox; Ex parte the Debtor (1979) 24 ALR 279 at 283–4; 36 FLR 392 at 396–7, that although a bankruptcy notice is a proceeding for some purposes under the Bankruptcy Act, it was not a proceeding for other purposes. The question of whether bankruptcy proceedings amount to substantive proceedings and whether they have a particular status vis-à-vis limitation statutes was considered by the Full Court of the Federal Court in O’Mara Constructions Pty Ltd v Avery [2006] FCAFC 55; BC200602897. At [19], the court cited the judgment of Kitto J in Motor Terms Co Pty Ltd v Liberty Insurance Ltd (1967) 116 CLR 177 at 180; [1967] ALR 465; (1967) 40 ALJR 516; BC6700290 in respect of bankruptcy proceedings: It is a question as to whether the word “creditor” in the section excludes a statute-barred creditor, and, if so, as at what date the Court must be satisfied that a petition upon which it is invited to make a winding up order is the petition of a “creditor” in the relevant sense of the word. The application of the word in its most general sense is not affected by the Statute of Limitations, for the operation of the statute in respect of a debt is only to bar the remedy: it does not extinguish the debt. But in construing statutory provisions for the distribution of assets amongst creditors there is a natural presumption that the only creditors in contemplation are those who, by the operation of the relevant statute in the particular case, are denied a right they would otherwise have had to sue for their debts by action or suit under the general law and are given instead a right to participate in the distribution … Lord Eldon made the general principle clear when he said … that in the consideration of the old Bankruptcy Acts “a Commission of Bankruptcy is nothing more than a substitution of the authority of the Lord Chancellor enabling him to work out the payment of those

creditors who could, by legal action or equitable suit, have compelled payment”. Under the Bankruptcy Act 1924–1960 (Cth) a creditor’s right to recover his debt by ordinary legal proceedings is taken from him at sequestration … and the right of proof which he is given in its place is expressly limited to liabilities to which the bankrupt is subject at the date of the sequestration order … Under the Companies Act 1961 (NSW) in the case of a compulsory winding up the more important provisions by which a right of participation in distribution under the authority of the court is substituted for a pre-existing right of suit are section 233, placing all the company’s property in the custody of the liquidator upon the making of the winding up order; section 244, requiring the assets to be applied in discharge of the company’s liability; section 291, giving creditors their right of proof in the winding up; and section 226(3), which operates automatically on the making of a winding up order to prevent any action or proceeding from being proceeded with or commenced against the company, in contrast with section 226(1) which recognizes that prima facie the presentation of a petition is no bar to a creditor’s pursuit of his remedies in the ordinary courts. The fundamental notion that special modes of administering assets are for the benefit of those creditors only whose ordinary rights of recovery are withdrawn from them upon the initiation of [page 198] the special administration was applied by the Court of Chancery in relation not only to bankruptcies and insolvencies but to trusts for creditors and administration decrees in respect of deceased estates. It is a necessary corollary that a person is not a creditor in the relevant sense if, at the time when a right to come in to receive payments under an official administration of the debtor’s assets supersedes an existing right of action or suit, his right of enforcement by action or suit is barred by the Statute of Limitations (if the debt is legal), or would be denied by a Court of Equity on the analogy of the Statute (if the debt is equitable). … Accordingly … it was held that all debts not statute-barred at the time of an order for the winding up of a company are provable, notwithstanding that before actual proof the period has elapsed which would have made them irrecoverable by action; and the broad proposition was laid down that the liabilities in discharge of which the assets are to be applied are all those which existed (ie the payment of which could be compelled) at the time of the winding up order. This has been accepted as the law ever since, and its consequence, that a debt is not provable if it has become unenforceable by reason of the Statute of Limitations before the time of the winding up order, was held not only to be settled with respect to a compulsory winding up but to extend in principle to a voluntary winding up. … The general conclusion is justified, I think, that wherever in winding up provisions a creditor is referred to, the references is prima facie to one of those for whose benefit the winding up takes place, so that one whose debt was statute-barred at the time of the order or resolution which set the winding up in motion is excluded. The court noted at [21]: [21] It is of some interest that Menzies J observed at 195:

The Statute of Limitations does not itself bar the taking or the prosecuting of proceedings for the winding up of a debtor company and, if the Statute were to be applied by analogy, the presentation of the petition would clearly enough correspond with the commencement of an action to recover the debt. And concluded at [24]: [24] In summary, if a debt is statute-barred it will not be provable in the winding up of a company and cannot ground the presentation of a petition. The same approach applies in bankruptcy. To the extent that s 17 barred recovery by the appellant of the debt as against the respondent, it was unenforceable against any trustee in bankruptcy. To the extent that the debt was unenforceable, it could not be relied upon by the appellant in presenting and prosecuting the petition. [80,970.12] Misleading petition In Lake and Worley Pty Ltd v Blackford [2004] FCA 208; BC200401021 at [13]–[14] Allsop J decided that a petition which included interest said to be claimed under an incorrect statutory attribution was misleading and failed to comply with essential requirements of the statute. His Honour cited Marshall v General Motors Acceptance Corporations Australia (2003) 127 FCR 453; 199 ALR 109; [2003] FCAFC 45; BC200300967. As to interest running while an order is stayed: see Weinberg J in P Aker Flowerbulbs Pty Ltd v Coulter (2004) 140 FCR 410; 212 ALR 606; [2004] FCA 1486; BC200407681 at [36]. His Honour carefully reviewed all the authorities and concluded: [36] … I do not think that the stay had that effect. I can see no reason, in principle, why a judgment creditor should be deprived of interest that would otherwise automatically accrue from the time that judgment is entered, by reason of s 73(4) [of the County Court Act (Vic)], merely because the judgment debtor has been granted the indulgence of a stay of execution. [page 199] [80,970.20] Presentation of petition A petition must be “handed or delivered to” and “accepted by” the appropriate court officer to be “presented” within the meaning of the Act. There is a difference between “presentation” under the Act, which affects the rights and liabilities of the petitioning creditor, other creditors and the debtors; and “filing” under the rules of court, which is internal to the registry: Purden Pty Ltd v Registrar in Bankruptcy (1982) 43 ALR 512. The date of presentation is excluded from the computation: s 36(1) Acts Interpretation Act 1901 (Cth); Re Gray; Ex parte DCT (1993) 115 ALR 638. [80,970.25] Standing generally Whether the Bar Council of New South Wales had standing to present a petition was considered in Council of the New South Wales Bar Association v Eddy [2006] FCA 254; BC200601458 (Eddy). The position of the Bar Council itself was one of the subjects of Wentworth v New South Wales Bar Association (1992) 176 CLR 239; 106 ALR 624; 66 ALJR 360; BC9202702. In Eddy Edmonds J said at [26] that the fact that the Bar Council could not be separated from the Bar Association did not inhibit its standing as a creditor. See Arnold v Queensland (1987) 73 ALR 607 at 611; 13 ALD 195 at 199–200 per Wilcox J. His Honour held that a partnership is not a legal entity separate from its partners and yet it may be a creditor for the purposes of the Act. So much was implicit in s 82(1) of the Act; as to which see [81,650.5]. [80,970.27] Transfer to Federal Court Deputy Commissioner of Taxation v Cumins [2007] FMCA 1841; BC200709949 raised an important procedural question. Applications to extend time for compliance with the bankruptcy notice were unsuccessful. The respondent appealed to the Federal

Court and there has been no decision at the date of this hearing. The bankruptcy arose out of an unopposed order, for which an application for review in the Supreme Court of WA was as yet unheard. The judgment was in excess of $38,000,000. The applicant sought to transfer the proceedings to the Federal Court pursuant to s 39 of the Federal Magistrates Court Act 1999. The respondent filed a notice opposing the transfer of proceedings on the grounds that under s 19 of the Federal Magistrates Court Act proceedings must not be instituted in the Federal Magistrates Court if an associated proceeding is pending in the Federal Court and that the petition ought to be dismissed under the section. By virtue of s 19(3) of the statute it is provided that if proceedings are presented in the Federal Magistrates Court in contravention of s 19(1) then the proceedings may be transferred to the Federal Court. Such an order is discretionary. Should the court’s discretion be triggered? Lucev FM observed at [28], [32], [42] and [44] that although under s 19(1) the proceedings were inappropriate, in fact they were not normally so because the great majority of bankruptcy cases were presented in the Federal Magistrates Court. This tended to reduce the significance of the pending proceedings when considering whether the transfer the matter to the Federal Court. One factor that might be influential was whether a question of general importance was raised. His Honour referred to Genovese v BGC Construction Pty Ltd [2006] FMCA 1507; BC200608146 at [13], and also observed that questions relating to the harmonization of bankruptcy procedure in the different jurisdictions and the issuance of a bankruptcy notice proceeding out of a properly issued final judgment: [44] … followed by a failure to comply with the bankruptcy notice, which brings about an act of bankruptcy upon which all creditors, and not merely the Applicant, can found a petition. It does not require a bankruptcy notice founded upon a judgment debt provable in bankruptcy: the legislative purpose is to identify markers or criteria pointing towards insolvency, for the public benefit. Lucev FM concluded at [47] that: [47] The exercise of a discretion does not require a court, absent statutory direction, to give equal weight to all factors to be considered in the exercise of a discretion. In this case the interests of the administration of justice, and the important issue of the extraordinary amount of money owing to the Commonwealth by an individual non-corporate taxpayer, are of sufficient weight, when balanced against the other factors, to warrant transfer of these proceedings to the Federal Court. An order will issue to give effect to the transfer. [page 200] [80,970.30] “personally present” — s 43(1)(b)(i) It is enough that when the act of bankruptcy was committed the debtor was personally present in Australia. The fact that the debtor may not properly be personally present, for example by virtue of being extradited in circumstances involving breaches of international law, does not prevent him from being described as “personally present” if he is physically in the country: Re Ditford; Ex parte DCT (1988) 19 FCR 347; 83 ALR 265. The court’s power to make a sequestration order is discretionary and it may, in the exercise of that discretion, despite the personal presence of the debtor within the jurisdiction, decline to make such an order. Examples of the circumstances in which the court may decline to make an order include: where the Commonwealth fails to follow proper procedures; where the Commonwealth acts beyond its jurisdictional competence; where the Commonwealth is in breach of its obligations to a state: Re Ditford; Ex parte DCT, above.

[80,970.35] Service out of the jurisdiction and substituted service In Battenberg v Restrom (2006) 149 FCR 128; [2006] FCAFC 20 the Full Court stated at [19]–[20]: [19] It is clear that a bankruptcy notice may be served out of Australia, subject to leave being granted by the court. The only question is as to the mechanics of service. We accept that the notice, itself, can only be served by leave, but as we have pointed out, there is a history of serving notice of proceedings rather than the initiating writ. There is also a history of making orders for substituted service which do not involve actual service. Re Mendonca establishes that subs 309(2) authorises service out of Australia even when the relevant process was issued after the debtor left Australia. The only jurisdictional requirement is that contained in par 43(1)(b) which has no present application. There is no reason why s 309(2) should not also authorise an order for substituted service of a bankruptcy notice made whilst the debtor is out of Australia. If, as in this case, that order does not involve service of the bankruptcy notice itself outside of Australia, par 40(1)(g) does not dictate that leave be obtained. [20] … Finally, we should say something about the inter-relationship between par 40(1)(g) and subs 309(2). The appellant’s case assumed that an order made for service of a bankruptcy notice out of Australia pursuant to the latter provision would also require leave pursuant to the former provision. As for substituted service, in Commonwealth Bank of Australia v Oswal (No 2) [2012] FMCA 1167; BC201209531 Lucev FM economically set out the requirements at [3]: [3] In order to obtain orders for such service as sought, the Deputy Commissioner must satisfy the court that: a) at least provisionally, the Deputy Commissioner has an arguable case in support of the issuance of a sequestration order against Mr Oswal; b) abnormal difficulty exists in effecting personal service on Mr Oswal; c) there is a reasonable probability that the stalls will be informed of the documents as a result of the proposed means of service; [80,970.40] “ordinarily resident in Australia” — s 43(1)(b)(ii) There is no definition in the Act as to what is meant by a debtor being “ordinarily resident” in Australia at the time of the act of bankruptcy. A summary of the authorities upon the definition of ordinary residence is contained in the decision of Lockhart J in Re Taylor; Ex parte Natwest Bank Ltd (1992) 37 FCR 194. The debtor in that case was the managing director of a group of companies which had international interests in mining. The company required the debtor to spend extended periods of time overseas in the management of the companies affairs. Lockhart J held that the debtor in this case was ordinarily resident in Australia at the time of the commission of the act of bankruptcy despite having been absent overseas for a number of months for business purposes. Instrumental in this finding of fact were the declarations the debtor made to customs upon his departures and arrivals from and to Australia over the preceding months in which he stated he was a resident departing temporarily or a resident returning to Australia. His Honour found: I shall not attempt to give any comprehensive definition of the word resident. It has no technical or special meaning for the purposes of the Act. Nor do the words “ordinarily resident” have any [page 201] such technical or special meaning. They are ordinary English words. Whether a debtor is an

ordinarily resident of Australia is a question of fact and degree … A person may have two places of residence; for example a city flat and a country house. He may regularly live in each. He cannot be physically present in both at the same time but he may be resident (or ordinarily resident) at the same time. People may come and go from the place in a large variety of circumstances and on various occasions. It is always a question of fact and degree … The concept of ordinary residence for the purposes of the Act in my opinion denotes a place where in the ordinary course of a person’s life he regularly or customarily lives. There must be some element of permanence, to be contrasted with a place where he stays only casually or intermittently. The expression “ordinarily resident in” denotes some habit of life and is to be contrasted with temporary or occasional residence. See also Re Brauch; Ex parte Britannic Securities and Investments Ltd [1977] 3 WLR 354. [80,970.50] “dwelling house” — s 43(1)(b)(iii) There is no definition of “dwelling house” contained in the Act. Lord Esher MR held in the case of Re Nordenfelt; Ex parte Maxim and Nordenfelt Guns and Ammunition Co [1895] 1 QB 151 as follows: “I will not attempt to give an exhaustive definition or indeed any definition of the term ‘dwelling house’ as used in this section. I only intend to say what I think is not a dwelling house. If a man has a house belonging to him but he has abandoned it as his dwelling house, that house is not his dwelling house within the meaning of this section”. In the case of Re Hecquard; Ex parte Hecquard (1889) 24 QBD 71 the Court of Appeal held that the keeping of rooms for a three month period by a debtor was sufficient to constitute a dwelling of the debtor. [80,970.60] “carrying on business in Australia” — s 43(1)(b)(iii) In Re Mendonca; Ex parte FCT (1969) 15 FLR 256 at 260–1, Gibbs J (as he then was) referred to “the somewhat wider understanding of those words (‘was carrying on business’)” that has come to be established in bankruptcy law. Gibbs J cited Theophile v Solicitor-General [1950] AC 186; and Re Bird v Inland Revenue Cmr [1962] 1 WLR 686. In Theophile’s case Lord Porter (at 201) said: “Trading does not cease when, as the expression is, ‘the shutters are put up’ but continues until the sums due are collected and all debts paid.” Both these cases were applied in Re Vassis; Ex parte Leung (1986) 9 FCR 518; 64 ALR 407 at FCR 535. This line of cases elicited support in Morphitis v Bernasconi [2003] All ER(D) 33; [2003] EWCA Civ 289; [2003] Ch 552 and more particularly in Westpac Banking Corp v Faress [2011] FMCA 26; BC201100140. Thus a person can be regarded as carrying on business in Australia even if the only activities involve a winding up of the business and the payment of debts. The words “either personally or by means of an agent or manager” should be regarded not as cutting down the broad meaning of the expression “was carrying on business in Australia”; rather, they are words of extension, not limitation: Lutovi Investments Pty Ltd (1978) 140 CLR 434 at 444; 22 ALR 519; Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 383. A distinction must be made between a debtor carrying on business on his or her own account and managing the business of a company. If a debtor manages a business on behalf of the company it cannot be said that he or she is carrying on business within the meaning of s 43 of the Act. The Act requires that a debtor carry on business on his or her own account: Re Brauch; Ex parte Britannic Securities and Investments Ltd [1977] 3 WLR 354. However, the relevant business must have been the debtor’s own. Employment in a business carried on by someone else or some other entity is not by itself sufficient. Thus, in Turner v Trevorrow (1994) 49 FCR 566; 126 ALR 263; BC9406543, the Full Court of the Federal Court pointed out at ALR 268– 9: In our opinion it must be shown that the debtor was carrying on his or her own business. It is not sufficient that the debtor was engaged as an employee in the business of somebody else. That conclusion follows, we think, as a matter of the ordinary and natural meaning of the language of the statute. It is harmonious with s 43(1)(b)(iv) which speaks of a debtor as “a member of a firm or

partnership carrying on business”; both paragraphs are concerned with debtors carrying on business as principals, either as sole traders (para(iii)) or in partnership (para(iv)). [page 202] There is long-established authority to the same effect. In Graham v Lewis (1888) 22 QBD 1 the English Court of Appeal held that a clerk employed by a solicitor in London did not “carry on business within the City of London” for the purposes of s 12 of the Mayor’s Court (Extension) Act 1857. Lord Esher MR said (at 3): “… we ought to give the words their primary business sense, already well known in the City, namely, the carrying on of business by the person whose business it is.” The next question is whether the respondents are right in their contention that the business of the company really was Mr Turner’s. In Brauch the English Court of Appeal rejected a similar argument. Goff LJ said (at 1013h) after referring to Salomon v Salomon and Co Ltd (1897) AC 22: “… it would be wrong to hold that s 4(1)(d) (of the Bankruptcy Act 1914 which conferred jurisdiction where a debtor “has carried on business in England, personally or by means of an agent or manager”) applies to a man who is running his company’s business even though he be the sole beneficial shareholder and in complete control.” This case, too, was applied in Westpac Banking Corp v Faress [2011] FMCA 26; BC201100140. Jarrett FM explained: [15] “Carrying on business” extends to situations where active trading has ceased, but the business is still being wound up and debts are being collected or paid. The phrase was explained in Re Vassis; Ex parte Leung (1986) 9 FCR 518 at 525–526 as follows: If it had not been the proper conclusion that Vassis was ordinarily resident in countryregionAustralia, the question might have arisen whether within s 43(1)(b)(iii) he “was carrying on business in Australia, either personally or by means of an agent or manager”.In Re Mendonca; Ex parte FC of T (1969) 15 FLR 256 at 260–1 Gibbs J (as he then was) referred to “the somewhat wide understanding of those words [ie “was carrying on business”] that has come to be established in bankruptcy law”. Gibbs J cited Theophile v Solicitor-General [1950] AC 186; and Re Bird v IRC; Ex parte The Debtor [1962] 1 WLR 686. In Theophile’s case Lord Porter (at p 201) said: Trading does not cease when, as the expression is, “the shutters are put up”, but continues until the sums due are collected and all debts paid. In this sense, it seems clear that at the relevant time Vassis “was carrying on business in Australia”, since the winding up of the business of his practice and the payment of its debts had not been concluded. The payment of the debts of a business, in order to conclude its carrying on, is to be understood in no narrow sense, as the second case cited by Gibbs J shows. See also Morphitis v Bernasconi [2003] All ER (D) 33. [16] However, the relevant business must have been the debtor’s own. Employment in a business carried on by someone else or some other entity is not by itself sufficient. Thus, in Turner v Trevorrow (1994) 49 FCR 566, the Full Court of the Federal Court pointed out:

22. In our opinion it must be shown that the debtor was carrying on his or her own business. It is not sufficient that the debtor was engaged as an employee in the business of somebody else. That conclusion follows, we think, as a matter of the ordinary and natural meaning of the language of the statute. It is harmonious with s 43(1)(b)(iv) which speaks of a debtor as “a member of a firm or partnership carrying on business”; both paragraphs are concerned with debtors carrying on business as principals, either as sole traders (par (iii)) or in partnership (par (iv)). 23. There is long-established authority to the same effect. In Graham v Lewis (1888) 22 QBD 1 the English Court of Appeal held that a clerk employed by a solicitor in London did not [page 203] “carry on business within the City of London” for the purposes of s 12 of the Mayor’s Court (Extension) Act 1857. Lord Esher MR said (at 3): … we ought to give the words their primary business sense, already well known in the City, namely, the carrying on of business by the person whose business it is. 24. The next question is whether the respondents are right in their contention that the business of the company really was Mr Turner’s In Brauch the English Court of Appeal rejected a similar argument. Goff LJ said (at 1013h) after referring to Salomon v Salomon and Co Ltd (1897) AC 22: … it would be wrong to hold that s 4(1)(d) (of the Bankruptcy Act 1914 which conferred jurisdiction where a debtor “has carried on business in England, personally or by means of an agent or manager”) applies to a man who is running his company’s business even though he be the sole beneficial shareholder and in complete control. [17] It might sometimes be said, however, that a person is carrying on a business through the use of companies as tools for carrying on that business. An example is Re Brauch; Ex parte Brittanic Securities & Investments Ltd [1978] Ch 316 (CA). [80,970.70] Date of operation of sequestration order The words “upon the making of a sequestration order” in s 43(2) mean “upon the pronouncement of a sequestration order”. A sequestration order is operative upon pronouncement and the debtor becomes a bankrupt even though the order has not yet been taken out. The order is only provisional in the sense that it may be reviewed and reconsidered until signed and sealed: Cavanagh v Bank of New Zealand (1990) 22 FCR 124; 98 ALR 217. Subsection (2)(a) was amended on 5 May 2003 by the Bankruptcy Legislation Amendment Act 2002 No 131 by omitting the words “or in accordance with Division 3 of Part VII” from the end of that paragraph, the effect of which is to make the early discharge provisions of the Division unavailable.

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[80,975] Conditions on which creditor may petition 44 (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. [subs (1) am Act 12 of 1980 s 26; Act 21 of 1985 s 14; Act 44 of 1996 s 3 and Sch 1; Act 106 of 2010 s 3 and Sch 4[2], opn 11 Aug 2010]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(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 [page 204] 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. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) Where a petitioning creditor is a secured creditor, he or she shall set out in the petition particulars of his or her security. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (5) am Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (6) am Act 44 of 1996 s 3 and Sch 2] SECTION 44 GENERALLY [80,975.10] General Section 44(1) sets out the three conditions upon which a petition may be presented. If one or more of those conditions is not satisfied, the petition must be dismissed. For the requirements relating to the petition, see s 47. [80,975.20] Presentation of petition See [80,970.20]. [80,975.30] Joint creditors — s 44(1)(a) All joint creditors must join in a bankruptcy petition (Ex parte Owen; Re Owen (1884) 13 QBD 113; Bruckland v Newsame (1808) 170 ER 1026; Re Tucker; Ex parte Tucker (1895) 73 LR 170). The decision in Re Darby (1904) 2 WN (NSW) 87, that one of a number of joint judgment creditors was entitled to obtain the issue of a bankruptcy notice in the names of all the creditors cannot be supported and is against the above authorities. Where there are a number of judgment creditors, the creditor’s petition should be signed by or by the authority of all of the creditors. It appears that a joint creditor who is unwilling to join in the presentation of a bankruptcy petition after being offered an indemnity against costs can be made a respondent to the petition: per Williams J in Australian Workers Union v Bowen (1946) 72 CLR 575 at 593. The petitioners’ solicitor may now sign: see Form 150. [80,975.35] Petition in firm name Creditors carrying on business under a firm name may present the petition in the firm name: s 307. In Anderson Rice (a firm) v Bride (1995) 61 FCR 529; 132 ALR 550, this provision was held to permit a bankruptcy notice and creditors petition to be issued in the name of a firm, in circumstances where the members of the firm (a partnership) changed after the liability sought to be enforced was incurred. [80,975.40] Debt — s 44(1)(b)(i) The debt must have accrued before the act of bankruptcy upon which the petition is based: Taylor v DCT (1987) 16 FCR 212; 73 ALR 219. This rule is particularly important to bear in mind where there is a change of petitioner: see [81,000.15]. [80,975.50] Stay of enforcement of judgment — s 44(1)(b)(ii) Although the debt must be “payable either immediately or at a certain future time” at the date of the presentation of the petition and date of hearing, s 44 does not require that the execution of the debt shall never have been stayed. Several state statutes provide that an instalment order, while it remains in force operates “as a stay of enforcement of the judgment” in respect of which it was made. Thus, if an instalment order [page 205] comes into operation before the issue or service of a bankruptcy notice, the notice will be bad: ss 40(1) (g) and 41(3)(b); Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285; (1968) 13 FLR 101. If, however, by the time the instalment order operates, the act of bankruptcy has been committed, the judgment creditor is not disqualified from presenting the petition because s 41(1)(a) and (b) do not require, as does s 40(1)(g), that the debt shall be one, the execution of which has not been stayed: Re Agrillo; Ex parte Bankrupt (1976) 29 FLR 484; Re Padagas; Ex parte Carrier Air-Conditioning Pty

Ltd (1977) 30 FLR 170; Re Williams; Ex parte General Credits Ltd (1983) 68 FLR 202; Re Frank; Ex parte Piliszky (1987) 16 FCR 396; 77 ALR 511; Re Vittoria Di Giacomo; Ex parte Boral Steel Ltd (1983) 68 FLR 106; Re Pollack; Ex parte DCT (1991) 32 FCR 40; 103 ALR 133. The concept of stay of execution is not to be restricted to cases where there is an express stay by order of the court: Re Seers (1955) 17 ABC 11. [80,975.60] Debt does not need to be a judgment debt There is no requirement that the debt relied upon by the creditor be a judgment debt: Re Goldberg; Ex parte Law Society of New South Wales (1988) 82 ALR 271. However, in practice, most petitioning creditors are judgment creditors (because most petitions are based on the failure to comply with a bankruptcy notice, which must be based on a judgment or order). [80,975.70] Income tax liability as a debt Where Notices of Assessment to Income Tax have issued specifying as the date on which the tax will be due and payable, a date later than the date of commission of an act of bankruptcy, the income tax will nonetheless amount to a debt which is a liquidated sum payable at a certain future time within the meaning of s 44(1)(b) of the Act. A creditor’s petition may be presented upon the Notice: Re Mendonca; Ex parte FCT (1969) 15 FLR 256. Income tax liability is imposed by statute. The assessment is a method of ascertaining the extent of liability. Tax is therefore a debt due and owing, notwithstanding that no assessment has issued and the debt is not yet payable. The Notice of Assessment fixes the time for payment and the amount payable. The amount claimed is, therefore, a debt for a liquidated sum payable at a certain future time. Where no assessment has issued as at the date of the act of bankruptcy, the tax owed at that date is neither liquidated nor payable immediately or at a certain future time: Re Mendonca; Ex parte FCT, above. Accordingly, the Commissioner is not entitled to petition in respect of a debt representing tax where no Notice of Assessment has issued. [80,975.80] Act of bankruptcy committed within 6 months — s 44(1)(c) For the rules concerning the reckoning of time, see ss 22(b) and 36(1) of the Acts Interpretation Act 1901. It has been held that a petitioning creditor was not entitled to present his petition because the act of bankruptcy on which it was based did not occur within six months before the presentation of the petition, even though the expiration of the six-month period fell on a Sunday, a non-juridical day: Re Tavella (1953) 16 ABC 166. [80,975.90] One act of bankruptcy In Australia and New Zealand Banking Group Ltd v Hubner [1999] FCA 1346; BC9906277, Spender J thought that there was a serious question to be raised as to whether it was competent for the petitioning creditor to allege more than one act of bankruptcy against a debtor. His Honour thought that if it was competent, then the acts of bankruptcy would need to be alleged in the alternative, and not in combination. The issue, however, did not need to be decided, because leave was granted to amend the petition so as to delete references to the second and third acts of bankruptcy. [80,975.100] “secured creditor” — s 44(2)–(6) A secured creditor is defined as a person holding a mortgage, charge or lien on property of the debtor as security for a debt due to him or her from the debtor: s 5(1); see [80,120.25]. A trustee who is a creditor is not a “secured creditor” within the meaning of s 44, by reason of its right of indemnity against the trust estate: Aluma-Lite Products Pty Ltd v Simpson [1999] FCA 1105; BC9904983. [page 206]

[80,975.110] “applicant holding security over debtors’ property” A secured creditor is only required to state in its petition an estimate of the value of its security, and not the actual value of the security. Provided that the petitioner acts in good faith, in the event of a sequestration order being made, it is not bound by the estimate when it seeks to prove its debt. However, if it states it is willing to surrender the security in the event of a sequestration order being made against the debtor, on the making of that order he or she is obliged to do so: Re Wiggins; Ex parte Credit Assistance Pty Ltd (1979) 30 ALR 443. The petitioning creditor’s estimate “must bear a close relationship to the realities of the matter … [and] not be arbitrary or capricious”: Re O’Leary; Ex parte Bayne (1985) 61 ALR 674. [80,975.120] Petitioner a secured creditor by virtue of Family Court orders In Re Bunn; Ex parte Bunn (1989) 20 FCR 393; 95 ALR 471, Neaves J held that the wife petitioner, who was a secured creditor by virtue of orders made by the Family Court of Australia lacked the capacity to surrender her security for the benefit of creditors generally. It was held, inter alia, to be quite foreign to the underlying object and purpose of the legislative provisions of the Family Law Act 1975 to treat the recipient of the benefit as having a capacity to surrender that benefit in favour of the creditors of the other party to the marriage. [80,975.130] Commissioner of taxation as a secured creditor A s 218 notice under the Income Tax Assessment Act 1936 charges the debt owed to the taxpayer, preventing the debtor from paying the taxpayer and obliging him or her to pay the debt to the Commissioner. The notice makes the Commissioner a secured creditor under bankruptcy law: Clyne v DCT (1981) 150 CLR 1; Stapleton v O’Donnell Griffin & Co (Qld) Pty Ltd (1961) 108 CLR 106; Deputy Commissioner of Taxation v Donnelly (1989) 25 FCR 432; 89 ALR 232; 89 ATC 5071. It follows, that where the Commissioner of Taxation is a petitioning creditor and has, under s 218 of the Income Tax Assessment Act 1936 recovered moneys from persons owing money to the debtor, the Commissioner must include in his or her 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. As a secured creditor he or she must comply with the requirements of s 44(4) and (5). [80,975.140] Failure to value security In Re a Debtor [1922] 2 KB 109, it was held that where a petitioning creditor had inadvertently omitted a security from his petition, a receiving order made on the petition was not invalidated by the omission. It will be otherwise if the debtor can show that the value of the security, when deducted, will reduce the amount of the debt below the statutory minimum of $2000. A petition was presented and security of considerable worth was inadvertently not valued and the value of the security was substantially less than the debt owed. The court held that it had jurisdiction to grant leave to amend the petition and the proof by valuing the security: Re Small; Westminster Bank v Trustee [1934] Ch 541. The failure by a secured creditor to disclose security held by it in a petition is not necessarily a basis for an application to annul the bankruptcy although it is a matter that the court can take into account on such an application: Re Finn; Ex parte Amoco Australia Ltd (1982) 41 ALR 487.

____________________ *Editor’s note: Paragraph (a) as amended by Act 44 of 1996 applies only to the presentation of creditor’s petitions after 16 December 1996. It does not prevent the continuation of proceedings begun before 16 December 1996.

[80,980] Creditor’s petition against partnership 45 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. SECTION 45 GENERALLY [80,980.5] General It is argued that s 45(1) should be interpreted to refer to circumstances where the creditor may present a petition in respect of an act of bankruptcy committed by the [page 207] bankrupt as: (1) an act of the partnership; and (2) a partner. The purpose of s 45(1) is to encompass those circumstances where one partner is resident in Australia or the residence of the other partner is not known: Re Mohr and Howe; Ex parte Fisher (1891) BC (NSW) 33. Section 307 of the Act authorises the conduct of proceedings in a firm name in relation to a person or persons carrying on business in the firm name. Thus, a bankruptcy notice based on a judgment entered against a partnership in its business name may be issued by the court addressed to the business name even though, at the time of issue, a person other than the partnership has become the sole proprietor of the name: Re Wenham; Ex parte Battams [1900] 2 QB 698; Re Wheeler & Reynolds; Ex parte Kerr v Crowe (1988) 20 FCR 185. Section 45 empowers the creditor to present a petition against any of the members in respect of a debt owed by the partnership. [80,980.7] Presentation of petition against partnership By virtue of the combined operation of ss 45 and 307 of the Act, the creditor’s petition may be presented against persons carrying on business under a firm name at the relevant time. Thus where a bankruptcy notice issued, based on a judgment obtained against a business name of which a stranger subsequently became the proprietor, it was held that this was not a ground on which the stranger could have the bankruptcy notice set aside. The court acknowledged that as the stranger was not a member of the partnership, there was no basis upon which the stranger, as current proprietor of the business name, could be exposed to the consequences of the Act, resulting from the judgment against the partnership or business name: Re Wheeler & Reynolds; Ex parte Kerr v Crowe (1988) 20 FCR 185. [80,980.15] Petition against several partners In Re Murray and Moore; Ex parte Silk and Textile Printers Ltd (1955) 17 ABC 72, a bankruptcy petition against two parties was presented based upon the fact that a writ of execution against the parties as judgment debtors had been returned nulla bona in respect of the assets of one only of the debtors. It was held that since the writ might be levied against the separate property as well as the joint property of the debtors and the present return was in respect of the property of one only of the debtors and did not include the property of the other debtor, it followed

that there was no justification for a return that the warrant was unsatisfied. Further, it followed that neither of the debtors had been proven to have committed the act of bankruptcy alleged and the petition was dismissed with costs. See also Re F Pracey and E H Pracey; Ex parte Watson Adco Ltd (1929) 1 ABC 86. [80,980.20] Proceedings in firm name The reference in s 45 to persons carrying on business under a firm name is a reference to the persons who are carrying on the business at the relevant time. A person who subsequently becomes the proprietor of the business name will not be exposed to any of the consequences of the Act which may flow from a judgment obtained against the firm prior to that person’s proprietorship, but the fact that a bankruptcy notice is issued based on a judgment obtained against a firm name being a business name of which an “innocent” person is now the proprietor is not a ground on which the bankruptcy notice may be set aside: Re Wheeler & Reynolds; Ex parte Kerr v Crowe (1988) 20 FCR 185.

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[80,985] Petition against 2 or more joint debtors 46 (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. SECTION 46 GENERALLY [80,985.5] Generally This section overcomes the decision in Re Myers; Ex parte Mulholland (1932) 5 ABC 128, which held that two or more debtors cannot be included in the one petition. [page 208] Lucev FM has pointed out in Diamond v Hughes as liquidator of CSC Mining Services Pty Ltd [2012] FMCA 1132; BC201209314 that in a case where a Bankruptcy Notice has been filed before the time for compliance has passed at [20]. “Section 41(6A) of the Bankruptcy Act is the sole source of the court’s power to extend time for compliance with a Bankruptcy Notice.” And that filing before the time for compliance has expired is a jurisdictional error “and is fatal to the exercise of the court’s bankruptcy jurisdiction.” At [21].

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[80,990] Requirements as to creditor’s petition 47 (1) A creditor’s petition must be verified by an affidavit of a person who knows the relevant facts.

[subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(1A) If the rules of court prescribe a form for the purposes of this subsection, the petition must be in the form prescribed. [subs (1A) insrt Act 44 of 1996 s 3 and Sch 1]

(2) Except with the leave of the Court, a creditor’s petition shall not be withdrawn after presentation. SECTION 47 GENERALLY [80,990.10] General Section 47 deals with matters pertaining to the petition itself. Matters relating to the hearing of the petition are set out in s 52. The creditor must give a copy of the petition to the Official Receiver within 3 days of presentation to the court: reg 4.05. [80,990.20] Verification of petition — s 47(1) and r 4.02 of the Federal Court (Bankruptcy) Rules 2005 A petition must be verified by an affidavit of someone who knows the relevant facts, that is, the facts set out in paras 1, 2, 3 and 4 of the petition. Usually, there are two affidavits verifying the petition: an affidavit verifying paras 1, 2 and 3 and an affidavit verifying para 4. There is no prescribed form for the verifying affidavit(s). The requirement that the petition be verified is designed to operate as a brake on the filing of insubstantial petitions: Bryant v Commonwealth Bank of Australia (FCA, Full Court, 223/95, 24 November 1995, unreported, BC9502003) (citing Re a Debtor (No 7 of 1910) [1910] 2 KB 59). Deficiencies in the verifying affidavits may be overcome by the adducing of further evidence at the hearing: Daly v Watson (1994) 50 FCR 544; 128 ALR 309 (per Beaumont and Gummow JJ); Bryant v Commonwealth Bank of Australia, above; Re Chu; Ex parte RSL Permanent Building Society Ltd (1976) 15 ALR 173. A petition which is amended under s 33 is not subject to the requirement for verification: Thai v DCT (1994) 53 FCR 252; 123 ALR 570; 34 ALD 132. Verification of the creditor’s petition before the act of bankruptcy was held to be a formal defect in Re Moore; Ex parte MGICA Ltd (1986) 11 FCR 400. The correct description of interest after judgment has been considered in Arbalis v Roth (No 2) [2009] FMCA 184; BC200901443. Barnes FM considered the matter of interest claimed under the Civil Procedure Act 2005 (NSW), an Act which came into force on 15 August 2005. He referred to Bank of Western Australia Ltd v Loiterton (2006) 197 FLR 232; [2006] FMCA 361; BC200601613 at [20], where Smith FM suggested that interest calculation documents attached to bankruptcy notices will not reveal an error by identifying either the relevant provision from the legislation formerly applicable to the Local Court, District Court or Supreme Court, or from s 101 of the Civil Procedure Act, or both of them, as the source of the continuing right to interest accruing both before and after 15 August 2005 on a judgment entered prior to that date. Barnes FM noted that in neither that case and others that he cited was it seen as necessary to consider the possible application of s 306 of the Bankruptcy Act to cure a defect in the bankruptcy notices in issue. Similarly in this [page 209] case, the calculation of interest by reference to s 101 does not constitute a misdescription of the source of liability for the interest claimed. He was of the view that, in any event, any “defect” of this nature would not be such that it could reasonably have misled a debtor as to what was necessary to comply with the notice and can be cured under s 306 in accordance with the principles in Adams v Lambert (2006) 228 CLR 409; 225 ALR 396; [2006] HCA 10; BC200601712. He also noted that as to the rate of interest being misdescribed that, in Re George; Ex parte Tricontinental Corporation Ltd (1994) 53

FCR 284; 126 ALR 541; BC9400215, the Full Court of the Federal Court considered a bankruptcy notice in which the correct amount (including interest) was claimed as being due on the judgment on which the bankruptcy notice was based, but in which there was an incorrect reference to interest at 10.05% instead of the correct percentage rate of 10.5%. The bankruptcy notice was held to be valid on the ground that this misdescription would not have been capable of misleading the debtor. Foster J in Napiat Pty Ltd v Salfinger; Re Salfinger (No 3) [2011] FCA 1279; BC201108692 at [7] that Form 6 of Sch 1 to the Federal Court (Bankruptcy) Rules [see [94,030]] provides that, in para 3 of a proposed creditor’s petition, there should be an assertion as to which of the jurisdictional bases specified in s 43(1) of the Bankruptcy Act are to be relied upon by the judgment creditor as the foundation for the Court’s jurisdiction in respect of the particular creditor’s petition. The form contains various possibilities which reflect, in substance, the terms of s 43(1) of the Bankruptcy Act. The affidavit verifying the creditor’s petition, according to the form, is intended to operate as verification of the assertions made in para 3 of the creditor’s petition. [80,990.30] Prescribed form — s 47(2) A creditors’ petition must be in accordance with Form 150: O 77 r 16. [80,990.35] Proof that debtor has a counterclaim of set-off as referred to in s 40(1)(g) — s 47(7) In New South Wales the contention is governed by s 12 of the Conveyancing Act (and in other states by similar statutes and propositions in equity) which requires that a conveyance is subject to all equities. The operation of the section is explained by Lord Hobhouse in Government of Newfoundland v Newfoundland Railway Co (1888) 12 App Cas 199 at 212 and by Brereton J in Franks v Equitiloan Securities Pty Ltd [2007] NSWSC 812; BC200705956 at [23]–[33] and followed by Driver FM in Clear Hall v Moloney (2012) 264 FLR 299; [2012] FMCA 216; BC201203048 at [16]. That case concerned an equitable set-off, which does not, as the plea at law, require mutuality at [34]. [80,990.40] Execution of petition The rules now provide for the petition to be signed by the solicitor for the petitioning creditor: O 77 r 16; Form 150. However, the mere writing of the name of the firm is not the appending of a signature of the solicitor for the petitioner: Australia and New Zealand Banking Group Ltd v Hubner [1999] FCA 1346; BC9906277. As to other methods of execution, see s 308. In both Re Holden; Ex parte Holden (1989) 13 Fam LR 328 and Australia and New Zealand Banking Group Ltd v Elferkh (1999) 92 FCR 195; [1999] FCA 1049; BC9904350 it was held that the failure for the petition to be signed was a formal defect that could be cured by s 306. A contrary view was taken in Re Taylor; Ex parte Ryan (1986) 14 FCR 472. [80,990.50] Presentation of petition See [80,970.10]. [80,990.60] Amendment of petition See [80,770.25]. [80,990.70] Service of petition See [81,015.30]. [80,990.80] Withdrawal of petition — s 47(3) In Re Griffin (1928) 1 ABC 24, it was held that a creditor is entitled to withdraw a petition at any time except that the debtor is entitled to ask that, in lieu of withdrawal the petition should be dismissed with costs. The debtor might waive this entitlement by consenting to the petition being withdrawn. It was further held that leave to withdraw a petition should not be given without the court being informed of the facts of the case and the proposed terms of the withdrawal so that it may exercise its judgment as to whether the case is a proper one for allowing a withdrawal: Re Bebro [1900] 2 QB 316. The court would, in certain [page 210]

circumstances, regard it as proper to allow a creditor of the debtor to show cause or attempt to show cause why leave to withdraw a petition should not be granted. The court may require notice of withdrawal of the petition to be given to other creditors: Re Conomo; Ex parte Scanlen’s Food & Confectionery Co Ltd (1958) 18 ABC 174. Order 77 r 22 may apply to withdrawal as well as dismissal.

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[80,995] Petitioning creditor to lodge deposit to cover advertising expenses, etc 48 [s 48 rep Act 12 of 1980 s 27]

[81,000] Change of petitioners 49 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. SECTION 49 GENERALLY [81,000.5] General The presentation and prosecution of a creditor’s petition are done for the benefit of all the debtor’s creditors. Accordingly, where a creditor’s petition is not prosecuted with due diligence, the Act allows for another creditor to be substituted as applicant creditor. The section serves a number of practical purposes. It helps to avoid multiplicity of petitions in that it reduces the circumstances in which it is necessary for another creditor to file an independent petition to protect his position against the possibility that the pending petition may be paid out or may otherwise fail to proceed. It gives other creditors a degree of protection against dilatoriness on the part of the petitioner or collusion between petitioner and debtor to defeat or delay creditors: Dean v QUF Industries (1981) 51 FLR 317 at 321. The power to permit substitution is discretionary. For an example of some of the factors relevant to the exercise of that discretion, see Johnstone v Guss (FCA, Kenny J, 7353 of 1997, 21 December 1998, unreported, BC9806988) and Re Wiltshire-Smith; Ex parte Randle & Taylor Services Pty Ltd (1994) 48 FCR 371. A creditor that wishes to be substituted should be mindful of the provisions of s 52(4) and (5), which provide for the lapse of a petition at the expiration of 12 months from presentation, unless extended by the court. The lapse of 6 months from the act of bankruptcy is no bar to substitution: Dean v QUF Industries, above at 321.

In Re Yates; National Mutual Life Assn v Catco Developments Pty Ltd (1989) 88 ALR 583, it was held that on the construction of the debenture, the receiver had the right to apply for substitution in the name of the company. The discretion was exercised in favour of the Deputy Commissioner for Taxation, who sued upon an amended assessment in Deputy Commissioner of Taxation v Petrov [2008] FMCA 539; BC200804241 at [15] per Driver FM: [15] … In my view, the existence of an unsatisfied taxation assessment would be sufficient to establish the Commissioner as a creditor for the purposes of s 49 of the Bankruptcy Act provided that the debt preceded the act of bankruptcy. See also Starbucks Corporation v McLeay [2005] FCA 1269; BC200507030. [81,000.10] Procedure The practice of the court is to allow creditors other than the applicant creditor to appear on the return of the petition. In the event that the creditors petition is not [page 211] prosecuted with due diligence, a supporting creditor may wish to seek an adjournment of the petition so that an application for substitution can be made. An application for substitution is made in accordance with r 9.11 of the Federal Court Rules. The notice should be supported by affidavit containing evidence of the debt on which the creditor relies. Substitution is governed by Australian Litigation Fund Pty Ltd v Mearns (2005) 227 ALR 721; [2005] FMCA 1727 applying the judgment of Heery J is Morris Komesanoff v Law Institute of Victoria [1997] FCA 093 as follows: It is the debt which must be owed at the date of the petition: McNamara v Longford (1935) 45 CLR 267, Hyams v Elder Smith Goldsborough Mort Limited (1976) 133 CLR 637 at 639. But the debt need not necessarily be owed then to the party who has sought to be substituted as petitioning creditor.” Also see General Motors Acceptance Corporation Australia v Marshall [2002] FCA 100 (reversed on appeal for other reasons) at [32] per Gyles J pointing out that “section 49 speaks in the present tense and the requirement is that the substituted petitioner be a creditor in sufficient amount at the time of substitution. Although Raphael FM in Combined Insurance Company of America t/as Combined Insurance Co of Australia v Tamer [2011] FMCA 1040; BC201110481 at [7] said of Mearns that it had been upheld on appeal but: “The point about the assignment and the fact that the assignee was not a creditor at the time of the act of bankruptcy was not a matter that was taken on appeal, and one can only assume that her Honour’s view of the law was correct. Certainly, I am unable to say that it was so clearly wrong that I should depart from it and I would not be so bold as to express a similar view in respect of the decision of Heerey J.” The court may make orders authorising the amendment of the petition (see O 14) and re-service (see reg 16.01) on the debtor. [81,000.15] Existence of debt A creditor who seeks to be substituted as petitioning creditor must be a person whose debt was in existence at the time of the act of bankruptcy alleged in the petition: McNamara v Langford (1931) 45 CLR 267. It is not necessary for the creditor to establish this as part of his or her application for substitution. Whether or not the debt is sufficient in point of time to support the petition is decided at the hearing of the petition. However, if it appears on the face of the material that the debt was not in existence at the

relevant time, the court should not order the substitution: Hyams v Elder Smith Goldsbrough Mort Ltd (1976) 133 CLR 637 at 639. A debtor who does not comply with a bankruptcy notice will commit an act of bankruptcy, even though the judgment may subsequently be set aside. Accordingly, a substituted creditor may rely on that act of bankruptcy when prosecuting the petition: Re Hayes; Ex parte Thomas Borthwick & Sons (A’asia) Ltd (1970) 18 FLR 216. A creditor whose claim is against one only of two respondents may be substituted for a petitioner who has alleged that the respondents were jointly indebted to him or her: Dean v QUF Industries (1981) 51 FLR 317. Particularly in the case of guarantees this question becomes immediately relevant and its answer depends upon the terms of the guarantee question. This is because many guarantees are not activated without a special demand: Esso Petroleum v Alstonbridge Properties Ltd [1975] 3 All ER 358; [1975] 1 WLR 1474; and QBM Lawyers (A Firm) v Quinlivan [2011] FMCA 520; BC201106520. In the latter case the obligations of the guarantor applied whether or not such obligations had or had not occurred, This includes those obligations which were contingent. [81,000.20] “may be substituted” An order for substitution is interlocutory; the court is not barred from using its powers under s 37 to rescind the order at a later time: Re Buckley and Bienefelt; Ex parte James Hardie and Co Pty Ltd (1976) 13 ALR 291. [page 212] The principles applied were set out and adopted in Kerry Ingredients Australia Pty Ltd v Anderson [2012] FMCA 1156; BC201209525 by Lloyd-Jones FM at [6]: [6] Mr Chee referred the court to the decision Dean v Q U F Industries Ltd (1981) 51 FLR 317 per Deane, McGregor and Sheppard JJ at 322, where their Honours stated: In Hyams v Elder Smith Goldsbrough Mort Ltd it was held by the High Court of Australia that an order for substitution did not involve a finding that the respondent was indebted to the substituted petitioner in the requisite amount at the relevant time. Barwick CJ, with whom Gibbs J and Mason J agreed said: “Although a creditor seeking an order of substitution must claim the existence of a debt of the required amount as at the date of the act of bankruptcy, it is not necessary, in my opinion, that creditor should establish, as part of his application, that his debt was in fact in existence at that time. Of course, if it appears on the face of the material he produces in support of his application that his debt was not in existence at the appropriate time the Court should not order the substitution. McNamara v Langford), properly understood, decides no more than that, Whether or not the substituted petitioning creditor’s debt is sufficient in point of time to support the petition will be decided when the petition is head”).

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[81,005] Taking control of debtor’s property before sequestration 50 (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. [subs (1) subst Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (1A) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (1B) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (2) subst Act 119 of 1987 s 17]

(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. [subs (3) subst Act 119 of 1987 s 17]

(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. [subs (4) insrt Act 119 of 1987 s 17]

[page 213] (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. [subs (5) insrt Act 119 of 1987 s 17; am Act 44 of 1996 s 3 and Sch 1] SECTION 50 GENERALLY [81,005.10] General The section enables steps to be taken to preserve and protect the property of the debtor and to reduce the risk that the debtor’s property is disposed of in a manner which renders it unavailable for distribution among the creditors after sequestration; see Deputy Commissioner of Taxation v Clyne (1983) 50 ALR 118 and Leondaris v KGB Design & Construction Pty Ltd (FCA, Tamberlin J, No 1354/98, 27 October 1998, unreported, BC9805692). See also Tasman KB Pty Ltd v Watkins [2004] FCA 1190; BC200409268; Weiss v Official Trustee in Bankruptcy (1983) 1 FCR 40; [1984] FCA 2; and ASIC v Wiggins (1998) 90 FCR 314 at 320; 30 ACSR 190; BC9807214. The practice is alluded to in Talacko v Talacko [2010] FCA 193; BC201001214 where the court ordered the passport concerned to be delivered up to his solicitor from whom undertakings were required. [81,005.12] Procedure By the amendment to s 50(1) effected by the Bankruptcy Legislation Amendment Act 2002 No 131, that legislation removed an amendment of 1966 which removed the main condition precedent of presentation of a creditor’s petition so as restore the status quo ante. Therefore there is now restored the opportunity to apply for interim control if the relevant act of bankruptcy relied on by a petitioning creditor was the failure to comply with a bankruptcy notice. In Kyriackou v Official Trustee in Bankruptcy [2005] FCA 921; BC200504702 North J held that an application for damages under reg 4.08 of the Bankruptcy Regulations 1996 required as a condition precedent to its exercise that an order be made under s 50(1): at [10]. In that case a judgment had set aside the sequestration order. This was said to have the effect that no bankruptcy notice was issued and no creditor’s petition presented, and therefore the only source of authority for the Official Trustee to deal with the property was this section. North J held that unless and until a direction under s 50 was made no order under reg 4.08 could be made. [81,005.15] Operation of s 50 The structure of subs (1) of the section is twofold: it provides for a direction to a trustee “to take control of the property of the debtor”, and then, in a case where such a direction is made, for a court also to “make such orders in relation to that property as the court considers just”. See Re Choi On On (1986) 11 FCR 149; 73 ALR 370.

The order made by the court under s 50 of the Act need not specify the actual property affected by the order. See Deputy Commissioner of Taxation v Clyne (1983) 50 ALR 118. [81,005.25] Duration of orders made under s 50 Orders made under s 50 continue in force despite the fact that the judgment debtor subsequently becomes bankrupt: Deputy Commissioner of Taxation v Clyne (1983) 50 ALR 118. [81,005.30] Execution where trustee has control of property In Penning v Steel Tube Supplies Pty Ltd (1988) 80 ALR 689 at 697 the court found that “no material distinction is to be drawn between the appointment by a court of a trustee to take control of debtor’s property under s 50 of the Bankruptcy Act 1966 and the appointment by a court of a receiver to take possession of the property of a named person. In either case, and independently of whether there is an injunction [page 214] requiring any particular person to deliver the goods into the control or possession of the receiver or trustee, any conduct without the sanction or authority of the court which prevents or hinders the taking of control or entry into possession by receiver or trustee of the property the subject of the court order, if done in knowledge of the court order, would appear to constitute a contempt”. See also Ames v Birkenhead Docks Trustees (1855) 20 Beav 332; 52 ER 630; Russell v East Anglian Railway Co (1850) 3 Mac & G 104; 20 LJ Ch 257; 42 ER 201, considered. In Penning v Steel Tube Supplies Pty Ltd, above, the court further found that a creditor is not in a position to issue execution on his judgment against the property of a debtor where a trustee has been directed by the court, pursuant to s 50, to take control of the debtor’s property. The position of a trustee under s 50 is equally applicable to the position of a receiver appointed by a court, as their appointments are for the same purpose. See also Ex parte Ide; Re Ide (1886) 17 QBD 755; Re Richards; Ex parte Sommers (1947) 14 ABC 112; Re Seers (1955) 17 ABC 11; Re Pannowitz; Ex parte Wilson (1975) 6 ALR 287; 38 FLR 184; Re Solomon; Ex parte Reid (1986) 10 FCR 423; 66 ALR 571. See [81,015.95] and Sharpe v W H Bailey & Sons Pty Ltd [2013] NSWSC 913; BC201310961 Campbell J at [44] & [45]: [44] However, there is another consideration in this case. It is common ground, from what I was told in argument, that Mr Sharpe has committed an act of bankruptcy by failing to comply with a bankruptcy notice served on him by Mr Heywood. As yet, no creditor’s petition has been issued out of the federal courts. I will not second-guess the matter but, given the history of that interwoven litigation, it is reasonable to expect that that step will be taken sooner rather than later. If that occurs and a sequestration or bankruptcy order is made, Mr Sharpe’s statutory right of appeal from the decision of Magistrate Evans will be property which will vest in his trustee in bankruptcy. It will then be a matter for the trustee’s discretion as to whether an appeal will proceed. [45] I think, however, it would be wrong for me to anticipate those developments by refusing Mr Sharpe a stay at this time. It is not for the Court to attempt to forecast the future developments in the litigation. Certainly, any forecast cannot be made with any semblance of certainty. [81,005.35] Distribution of property after dismissal of petition Once a petition has been dismissed the court can give all necessary directions as to the distribution of the debtor’s property in the control of the person appointed under s 50. The court may also, after dismissal of the petition, settle the proper remuneration of that person for

work done prior to dismissal of the creditor’s petition: Re Penning; Ex parte State Bank of South Australia (1989) 89 ALR 417 at 425 per von Doussa J. Subsequent to the dismissal of the bank’s petition in Re Penning; Ex parte State Bank of South Australia, above, a sequestration order was made in respect of the husband debtor’s estate on the petition of another creditor. His wife became bankrupt on her own petition. The husband debtor appealed against the order made against him. The order was set aside and the petition dismissed, but in the meantime, Mr Heywood-Smith had carried on administration of the estate. In Re Penning; Ex parte State Bank of South Australia, above, the husband sought damages against the bank and orders were made relating to Mr Heywood-Smith and his remuneration. Von Doussa J held that the appointment of a person to take control of the property of a debtor by order made under s 50 terminates, but the termination does not invalidate the appointment ab initio. The court had jurisdiction upon the presentation of the creditor’s petition to make the appointment. The appointment was valid when made and remained valid until the dismissal of the creditor’s petition. The dismissal of the petition established that the order had been voidable but not void ab initio: Wilde (Liquidators of Blackburn Industries Pty Ltd) v Australian Trade Equipment Co Pty Ltd (1981) 34 ALR 148; 55 ALJR 280; Day v Mount (1984) 2 FCR 237; 53 ALR 468. Cases can exist where damages may occur in respect of “the usual undertaking as to damages”. The Full Court of the Federal Court considered the principles and the circumstances where such an order might be applied in Coshott v Principal Strategic Options Pty Ltd [2004] FCAFC 50; BC200401056. [page 215] [81,005.40] Constitutional validity of s 50 Section 50 of the Act is a valid exercise of the bankruptcy and insolvency power of the Commonwealth under s 51(xvii) of the Constitution: Deputy Commissioner of Taxation v Clyne (1983) 50 ALR 118. [81,005.45] Review and abuse of process A Keahy, McPherson, The Law of Company Liquidation, 4th ed, LBC Information Services, Sydney, 1999, at pp 637–8 says, inter alia, of public examinations: It is an abuse of process if: a liquidator seeks to gain a forensic advantage not otherwise available to her or him; questions that are asked are not relevant; the applicant for the examination has an improper object; the examination is vexatious or oppressive. The last category is very broad and its limitations are not clear. It must be added that just because a forensic advantage is obtained, that alone is not decisive in determining whether an abuse of process has occurred. Whether there is an abuse of process will be a question that depends on the purpose motivating the applicant who is seeking the order and the circumstances of the case. For an abuse it will be necessary that the purpose of the applicant that is offensive is at least the predominant purpose. In taking action to have a summons set aside on the basis of abuse of process the applicant’s burden of proof is a high one. The power to examine may be used to conduct a fishing expedition ie beginning an examination without any clear suspicions and conducting an examination to determine if any matters or facts might emerge that may be of interest or assistance. Whether or not the information sought by the liquidator is relevant to the performing of her or his

statutory duty and whether the examinee needs to be safeguarded beyond the normal safeguards of court control of the whole process from the exercise of any oppressive power are matters to be left to the judge or officer presiding over the examination. This issue was taken up in Pollak v Lombe [2004] FCA 362; BC200401407 by Beaumont ACJ. His Honour discussed the particular circumstances against the background of authority, particularly Re Jonson; Ex parte Prentice (FCA, Lockhart J, No 2908/94, 1 September 1997, unreported, BC9703993) at 10. His Honour also considered whether the summons should be discharged (R v Associated Northern Collieries (1910) 11 CLR 738 at 747; 17 ALR 359 per Isaacs J) on the ground that the bankrupt could be exposed to a penalty, viz, the extension of the bankruptcy. A case, setting out in some detail the scope of such an order, and the onus of proof for setting it aside is Re Southern Wine Corporation; Ex parte Featherby [2005] WASC 21; BC200500897 per Newnes M. This decision occurred against the background of a resolution of growers requiring the administrators of the company, the plaintiffs, to make certain specified payments to grape grower members. The liquidators contended that the company was subject to a management fee, and that these funds should be applied towards that use. The administrators contended that these funds were, instead, available to support a lien which was claimed over the material harvest. The liquidators claimed that instead a form of “Quistclose” trust had been created by the resolution of growers requiring that these funds be employed for the use of growers (at [16]–[23]). The Master made the following observations at [27], [29], [32], [36], [37] with regard to the examination: … a liquidator who applies under s 596B of the [Corporations] Act for an order for examination bears a heavy onus of disclosure … [extending to] any matter which might lead the court to refuse the application: Re Southern Equities Corp Ltd (in liq) (1997) 194 LSJS 401; 25 ACSR 394 at 422–3; Re Coretel Pty Ltd (Subject Deed of Company Arrangement) (2003) 48 ACSR 178 … An abuse of process will occur where the applicant for the examination summons is seeking to achieve some purpose foreign to that for which the legislature provided the examination machinery: New Zealand Steel (Aust) Pty Ltd v Burton (1994) 13 ACSR 610; 12 ACLC 586. The [page 216] examination process will be used for an improper purpose where, for instance, the examination is sought for the predominant purpose of a dress rehearsal of cross examination or obtaining a forensic advantage not available from ordinary pre-trial procedures or simply to cause undue inconvenience or embarrassment to the examinee: Re Southern Equity Corp Ltd (in liq); Bond v England [(1997) 25 ACSR 394] at 433–4. The mere fact that a third party may acquire a collateral benefit by reason of an examination does not render the purpose for which it was obtained improper: Re Hugh J Roberts Pty Ltd (in liq) (1970) 2 NSWR 582; HongKong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512; 8 ACSR 736 … The fact that a liquidator seeks to use the examination to gather information in relation to proceedings which the liquidator has already instituted, does not, of itself, constitute an abuse of process … The onus of satisfying the court that there is an abuse of process lies on the party alleging it and that party must establish that the improper purpose is the predominant one: Williams v Spautz

(1992) 174 CLR 509; 107 ALR 635; Sent v Andrews (2002) 6 VR 317; [2002] VSCA 209; BC200207762; Re Southern Equity Corp Ltd (in liq); Bond v England [(1997) 24 ACSR 472] … While the power to compel production of documents is a wide one, it is ancillary to an examination order and cannot require the production of documents independently of the examination of particular individuals. An order for production of documents which has the effect of compelling the production of documents which are not required for the examination would be oppressive and in excess of the power to make such an order: Re Leisure Developments (Qld) Pty Ltd (in liq) (2002) 41 ACSR 276; [2002] NSWSC 248; BC200201574; Re BPTC Ltd (in liq) (No 5) (1993) 10 ACSR 756 per Bryson J at 763. If the scope of the documents sought is too wide, because they would include documents having no connection with the enforceability of a claim by the plaintiffs, it ought to be narrowed: Boys v Quigley (2002) 26 WAR 454; 41 ACSR 499. Where the production required goes beyond permissible limits and it is not possible to limit it the whole order for production may need to be set aside: Re BPTC Ltd (in liq) (above) [ACSR] at 766; Re Leisure Developments (Qld) Pty Ltd (in liq) (above) per Austin J at [25]. In this case it was argued that the public examination would require disclosure of documents to an inconvenient degree; that it involved revealing materials of the affected commercial decisions and operations. The plaintiffs submitted that on the facts any knowledge to be obtained could not be to the extent of other parties’ commercial decisions or commercial viability and that, accordingly, there was no evidence that the result of any of the requests would create unreasonable difficulty. The court was in any event seized of powers to prevent improper questions in the course of the examination: at [53]– [58]. The court held that no basis was established that there was an improper purpose, that the requirement of production of documents was unduly onerous, or that it had been demonstrated that the scope of the documents was wider than is reasonably required for the purposes of the examinations or that they went beyond matters of legitimate inquiry by the liquidators in respect of the company’s examinable affairs. In Westpac Banking Corp v Goodman [2010] FMCA 993; BC201010150 the debtor alleged that the creditor’s petition had been presented “not with a bona fide view of obtaining an adjudication but with the view of putting pressure on the debtor to prevent him from taking action against the creditor”. Turner FM held at [14]: … If a creditor has an interest in the debtor being made bankrupt to stifle litigation, that in itself is not enough for refusing the making of a sequestration order Re Coyne; Ex parte Binningup (South) Pty Ltd (unreported) 10 November 1992 at [22]. An order should not be refused if apart from that motive the petitioning creditor is entitled to the order sought Re King; Ex parte Commercial Bank of Australia Ltd (No 2) [1920] VLR 490 at 510. Bride v KMG Hungerfords (a firm) (unreported) FCA 23 April 1998 at 9. Apart from making the allegation (Affidavit of Morris Goodman affirmed 15 September 2010) nothing has been presented to the court in support of the allegation. The court finds that the onus of proof of improper motive or abuse of process is on the debtor Williams v Spautz (1992) 174 CLR 509 at 529. There is no evidence of [page 217] the creditor’s state of mind as to improper motive and the court will not infer an improper motive Bride v KMG Hungerfords (a firm) supra at 8–9. The contention is denied by the creditor and rejected by the court. Even if such a notice were shown, the creditor would otherwise be entitled to the orders sought for the reasons expressed below. The nature of the supervisory jurisdiction under s 178 is considered in Nguyen v Pattison (2005) 142

FCR 561; 86 ALD 43; [2005] FCA 650; BC200503401. See also [82,640.25].

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[81,010] Costs of prosecuting creditor’s petition 51 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. [s 51 am Act 12 of 1980] SECTION 51 GENERALLY [81,010.5] General See notes under s 32 at [80,765.5].

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[81,015] Proceedings and order on creditor’s petition 52 (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. [subs (1) am Act 74 of 1981 s 125; Act 21 of 1985 s 15]

(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). [subs (1A) insrt Act 44 of 1996 s 3 and Sch 1; am Act 106 of 2010 s 3 and Sch 3[10], opn 15 July 2010; Act 106 of 2010 s 3 and Sch 2[5] and [6], opn 1 Dec 2010]

(1B) Subsection (1A) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code. [subs (1B) insrt Act 106 of 2010 s 3 and Sch 2[7], opn 1 Dec 2010]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(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 [page 218] (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. [subs (4) subst Act 12 of 1980 s 29]

(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. [subs (5) insrt Act 12 of 1980 s 29]

SECTION 52 GENERALLY [81,015.10] General Section 52 sets out the matters required to be proved at the time of the hearing of the petition, as well as other matters relating to the sequestration order. Matters pertaining to the petition itself are set out in s 47. The conditions on which a petition may be presented are set out in s 44. [81,015.20] Verification of petition — s 52(1)(a) “cross-claim” See [80,990.20]. The circumstances in which, and the authorities that the court should consider, when deciding whether or not to set aside a petition or grant an adjournment are set out by the judgement of Sundberg J in St George Bank Ltd v Helfenbaum [1999] FCA 1337; BC9906256. This case has been applied in Totev v Sfar (2006) 230 ALR 236; [2006] FCA 470; BC200603513; Rigg v Baker (2006) 155 FCR 531; 236 ALR 629; [2006] FCAFC 179; BC200610222; Field v St George Bank Ltd [2009] FCA 1042; BC200908499. The principle is that an applicant is required to satisfy the court that it has a claim against the petitioning creditor that has at least reasonable prospects of success in order for the court to set aside the petition. But as French J said in Rigg v Baker at [66]: A distinction has been drawn between a claim against the petitioner creditor which is likely to succeed and which would warrant refusal of a sequestration order and a “real claim” which has sufficient prospect to warrant the debtor being granted an opportunity to have it litigated. In the latter case an adjournment of the petition may be appropriate: Re Jovanovic; Govedarica v Jovanovic [1998] FCA 463 citing Re James; Ex parte Carter Holt Harvey Roofing (Aust) Pty Ltd (No 2) (1994) 51 FCR 14 at 22 per Olney J. The existence of a cross-claim against the petitioning creditor which is likely to succeed may support the proposition that the sequestration order ought not to have been made and should be annulled. On the other hand the existence of a real claim which might have warranted adjournment would not necessarily support that conclusion. That is not to exclude the possibility that in appropriate circumstances the registrar or judge hearing the petition ought to grant an adjournment on the basis of a “real cross-claim”. On the same point, Lucev FM in Green v Wilden Pty Ltd [2013] FMCA 24; BC201300117 referred to Ebert v The Union Trustee Co of Australia Ltd (1960) 104 CLR 346; [1960] ALR 691; (1960) 34 ALJR 182; BC6000660 at 350 per Dixon CJ, McTiernan and Windeyer JJ. As to what constitutes a “real claim”: … section 52(j) makes it necessary that a debtor served with a bankruptcy notice, if he does not comply with its requirements, should satisfy the Court of Bankruptcy that he has a counter-claim, set-off or cross demand which equals or exceeds the amount of the judgment debt. The debtor clearly must satisfy the Court that there exists in him a counter-claim, set-off or cross demand. “Cross demand” is the word relied upon here. The appellant cannot satisfy the Court that a cross demand exists by showing no more than that she propounds one and states how she suggests that she can make it out … Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the [page 219] admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand.

Alsop J in Totev set out the principle at [44]: It may be … St George Bank Ltd v Helfenbaum is open to debate as to whether it states the matter slightly too unequivocally in the light of what was said in Ling v Enrobook. Nevertheless, what is clear is that the fact that there has been an act of bankruptcy does not make the claim by the debtor against the petitioning creditor irrelevant. It should be examined to assess whether it can be said that there is sufficient evidence to show that it is a real claim which is likely to succeed. Also relevant is the stage of the litigation, the length of time for its vindication and any other relevant matters. It goes without saying that solvency is a relevant consideration. In some circumstances, it may be difficult to assess the likelihood of success of the debtor’s claim. All the authorities show that central to the showing of “other sufficient cause” for the purposes of s 52(2)(b) is the question of the prospects of success. The case is not tried in the bankruptcy court, but the material is examined for the purpose alluded to by Gibbs J in Re Schmidt. As Olney J identified in Re James, if a likelihood of success can be demonstrated, that may justify a refusal of a sequestration order. Alternatively, the circumstances may reveal a claim of a character and nature in which likelihood of success cannot be predicted with accuracy but in the circumstances the petition should be dismissed or an adjournment of the petition should granted: see the approach of Sundberg J in Ling v Commonwealth [1996] FCA 1646… Raphael FM in National Australia Bank Ltd v Acheson [2011] FMCA 437; BC201105300 set out and applied these authorities. In Carter v Kennedy [2012] FMCA 1229; BC201210429, Lloyd-Jones FM pointed out that proof of the matters in this section and ss 43, 44 and 47 had costs implications. See at [22]. [81,015.30] Service of petition — s 52(1)(b) The petition, verifying affidavits and consent (if any) must be served on the debtor: see s 53(1)(b) and O 77 r 19(2) of the Federal Court Rules. Regulation 16.01, which provides five modes of service, has no application to the service of a creditors petition: CSR Ltd (t/as CSR Construction Materials) v Barillaro (2001) 184 ALR 308; [2001] FMCA 23. A creditors petition must be served personally, or pursuant to an order for substituted service: see [84,760.10]. Service must be effected not less than 5 days before the hearing: Federal Court Rules O 4 r 11. The Rules appear to contemplate that a sealed petition will be annexed to the affidavit of service: O 77 r 16(2)(a). See also Deputy Commissioner of Taxation v Willis [2007] FMCA 579; BC200702865 at [36]. Although in Mulhern v Bank of Queensland (2012) 271 FLR 396; [2012] FMCA 1124; BC201209271 the matter was adjourned, a number of issues relating to service were explored. These include “Substituted Service” and “Short Service”. A Substituted Service: where it is established that the creditor’s petition did not come to the debtor’s attention until after the sequestration order was made. Chief Justice Lord Cockburn observed in Watt v Barnett (1878) 3 QBD 183: … The question therefore arises whether an order under Order IX., Rule 2, for substituted service is final and conclusive, so that, after the proceedings have gone on to judgment, it is not competent for the defendant to come before the Court and, on the ground that the substituted service has failed, apply for leave to appear and defend the action… And at p 185: … Now, in the first place, it cannot, I think, be said that the judgment was signed irregularly, inasmuch as the service was in accordance with the order of the Court made under Order IX., Rule 2; but, on the other hand, I think the legislature did not intend that the order for substituted service should be final and conclusive on the defendant, when it can be shewn that the

[page 220] substituted service failed and the proceedings were never brought to the knowledge of the defendant. It is the essential foundation of the administration of justice that a person, against whom an action or other proceeding is brought, should have notice of the proceedings before he is concluded, and therefore I think that, when it is shewn to the Court that the substituted service has failed and the defendant has had no such notice, it is competent to the Court to enable the defendant to come in and defend the action, as he would have been enabled to do if the substituted service had been effectual. At the same time I agree that the matter is one on which the Court ought to exercise its discretion. It is not because the substituted service has failed and never came to the knowledge of the defendant that the Court is absolutely bound to set the proceedings aside, for it may be, that though the action was not brought to the defendant’s knowledge through the substituted service, yet it has come to his knowledge in some other way. If he knew of the action and had an opportunity of coming in, but instead of doing so he allowed the proceedings to go on and took his chance of the other defendants defeating the plaintiff, then I think we ought to refuse to set aside the judgment, which is regular by virtue of the order for substituted service, and not to allow the defendant to reopen the litigation. All I hold is that the order for substituted service is not finally binding and conclusive, if the Court are satisfied that through that order injustice will be done if the defendant is not let in to defend, he never having had any knowledge of the action… His Lordship’s observations were also cited with approval in see Surfers Paradise International Convention Centre Pty Ltd v National Mutual Life Association of Australasia Ltd [1984] 2 Qd R 447 at 454 as well as Mulhearn. Service beyond the terms of the order: Burnett FM in Mulhearn at [22] indicated that if there was an irregularity he was prepared to make a corrective order under s 306. Short service: Where insufficient notice had been given, and following Lord Cockburn CJ in Watt v Barnett (1878) 3 QB 183 at 185: “… Before letting the defendant in to defend we must consider whether he gives us any grounds for thinking that he has a substantial case which he desires to try…”. This exercise should be carried out before addressing the option under s 52(2). [81,015.40] Service of petition out of the jurisdiction — s 52(1)(b) A bankruptcy petition may be served outside the jurisdiction provided that when the act of bankruptcy was committed any of the requirements of s 43(1)(b) will have been satisfied. The Federal Court Rules, in their application to matters other than bankruptcy matters, make specific provision for service outside the jurisdiction: O 8. See generally Re Trimboli; Ex parte DCT (1984) 4 FCR 586; 59 ALR 625 as to the former position. As a general rule the bankruptcy court will make an order for service of a creditor’s petition out of the jurisdiction where the debtor answers the description of persons against whom the court has jurisdiction to make an order under s 43 and who has absconded from Australia: Re Mendonca; Ex parte FCT (1969) 15 FLR 256. [81,015.50] Proof of indebtedness — s 52(1)(c) Order 77 r 19(4) of the Federal Court Rules requires that the applicant must file an affidavit “sworn as soon as practicable” before the hearing of the petition stating that each debt on which the applicant relies is still owing. The affidavit must be sworn by a person who knows the relevant facts. Where it is impracticable for an original of that affidavit to be filed, a facsimile may be filed, and then the original within two days of the hearing: r 19(6). [81,015.55] Other s 52(1)(c) considerations In Deputy Commissioner of Taxation v Cumins [No 5] [2008] FCA 794; BC200803956 at [68], Gilmour J held that a subsequent reduction of a judgment debt does not render the bankruptcy notice invalid because the bankruptcy notice is calculated by reference to the amount of the original judgment. See Emerson v Wreckair Pty Ltd (1992) 33 FCR 581 at 587;

109 ALR 539. [page 221] Flick, J in Russell v Polites Investments Pty Ltd [2012] FCA 11; BC201200074 said at [23]: [23] Upon proof of the matters set forth in s 52(1) a petitioning creditor has been said to have a “prima facie right” to the making of a sequestration order: Deputy Commissioner of Taxation v Cumins [2008] FCA 353 at [14], 101 ALD 78 at 81. Gilmour J there helpfully summarised the general principles to be applied as follows: [14] On proof of the matters mentioned in s 52(1) of the Bankruptcy Act 1966 (Cth) (the Act) a petitioning creditor has a prima facie right to the making of a sequestration order and the court will proceed to make a sequestration order unless the court is satisfied that for other sufficient cause a sequestration order should not be made: s 52(2)(b) of the Act; Cain v Whyte (1933) 48 CLR 639 at 646. The onus is on the respondent debtor to demonstrate “sufficient cause”: Commissioner of Taxation v Bayeh (1999) 100 FCR 144; [1999] FCA 1223 at [12]. [15] Section 52(2)(b) of the Act is wide enough to entitle the court, in a proper case, to adjourn or dismiss a petition in the exercise of its discretion, where the debtor demonstrates a genuine dispute as to the liability to pay the debt: Re Verma; Ex Parte Deputy Commissioner of Taxation (1984) 4 FCR 181 at 185 and 187. This power is discretionary: Clyne v Deputy Commissioner of Taxation (1982) 45 ALR 323 at 328. [16] The court is entitled to inquire whether a judgment is founded on a real debt. In general, a court exercising jurisdiction should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings, provided that the appeal is based on genuine and arguable grounds: Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 148; Bayne v Baillieu (1907) 5 CLR 64; [1907] HCA 39. [17] The mere fact that an appeal has been lodged does not without more, give rise to a duty to postpone the hearing of the petition: in Re Flatau; Ex Parte Scotch Whisky Distillers (1882) 22 QBD 83 (CA) at 84–85; nor will the court as a matter of course inquire into the validity of a judgment debt: Wren v Mahony (1972) 126 CLR 212 at 222–223; [1972] ALR 307 at 312–314. [18] The test to be applied has been described variously. The judgment debtor must point to grounds having “a real chance of success on appeal”: Re Lewin; Ex Parte Milner (1986) 11 FCR 312 at 318; or ensure “that substantial reasons are given for questioning” whether there was in truth a debt: Wren at 225. It is not enough to rely upon mere assertion. The onus is on the applicant for a stay to show the existence of a genuine dispute by adducing evidence establishing the substantial nature of the grounds of challenge: Re Verma and Re Virendra Kumar Verma; Ex Parte DCT (FCA, Beaumont J, 14 November 1984, unreported) referred to with approval in Re Verma at 187: [[2008] FCA 353] In Re Dolman; Ex parte Elder Smith Goldsbrough Mort Ltd (1967) 10 FLR 384 at 391 Gibbs J also referred to a creditor who had proved the existence of a debt and an act of bankruptcy having “what may be called a prima facie right to a sequestration order”. See also: Burgess v Permanent Custodians Ltd [2010] FCA 986 at [37]. [81,015.56] Discretionary and evidential considerations In Burke v Chesterfield Australia Pty Ltd

[2012] FMCA 10; BC201200068 Jarrett FM pointed out at [15] that the relief granted under s 51 statute was discretionary in nature and therefore an objection that a petition was misleading because of the accompanying letter rather than the contents of the petition, could be disposed of on the ground that it was proper to raise such matters in the exercise of the court’s discretion. In another example, Baker v Perpetual Trustee Co Ltd (2012) 204 FCR 593; [2012] FCA 553; BC201203653 in which Katzmann J at [35] stated “The Act confers a discretion on the court which in its terms is unconfined. In these circumstances, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, unless the subject-matter, scope and purpose of the Act imposes an implied limitation on the factors the court may legitimately consider: cf Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39–40; Oshlack v Richmond River Council (1998) 193 CLR 72 at [22] per Gaudron and Gummow JJ; Probiotec Ltd v University of Melbourne [page 222] (2008) 166 FCR 30 at [47] per Rares J”. Also at [36] the court was able to take into account under subs (1) evidence of ability or inability to pay debts, whether for or against the proposition advanced by the debtor. Further, at [37] applying Totev v Sfar (2006) 230 ALR 236; [2006] FCA 470; BC200603513 at [44], “[i]t goes without saying that solvency is a relevant consideration”. Similar views were expressed by Barker J in Christou v Demandem Holdings Pty Ltd [2012] FCA 695; BC201204708. [81,015.60] Going behind the judgment The court has the jurisdiction to go behind a judgment to see whether in truth and reality there is a debt. The court will not generally go behind such a judgment unless it can be shown that there is a prima facie case of fraud, collusion or miscarriage of justice. See Corney v Brien (1951) 84 CLR 343 at 356–7; [1951] ALR 525; Udovenko v Mitchell (1997) 79 FCR 418; 160 ALR 161; Seymour v Housing Guarantee Fund Ltd [1999] FCA 1441; BC9906845. In Wren v Mahony (1972) 126 CLR 212 at 224–5; [1972] ALR 307 at 314 Barwick CJ, with whom Windeyer and Owen JJ concurred, said: The judgment is never conclusive in bankruptcy. It does not always represent itself as the relevant debt of the petitioning creditor, even though under the general law, the prior existing debt has merged in a judgment. But the Bankruptcy Court may accept the judgment as satisfactory proof of the petitioning creditor’s debt. In that sense that court has a discretion. It may or may not so accept the judgment. But it has been made quite clear by the decisions of the past that where reason is shown for questioning whether behind the judgment or as it is said, as the consideration for it, there was in truth and reality a debt due to the petitioning creditor, the Court of Bankruptcy can no longer accept the judgment as such satisfactory proof. It must then exercise its power, or if you will, its discretion to look at what is behind the judgment to what is its consideration. It is not the law, in my opinion, that whether in any case the Court of Bankruptcy will consider whether there is satisfactory proof of the petitioning creditor’s debt is a mere matter of its own discretion … Rather the emphasis is upon the paramount need to have satisfactory proof of the petitioning creditor’s debt. The Court’s discretion in my opinion is a discretion to accept the judgment as satisfactory proof of that debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner. The majority judgment of Dixon, Williams, Webb and Kitto JJ in Corney v Brien, above at 347, referred to the court’s undoubted jurisdiction “to go behind a judgment obtained by default or compromise or where fraud or collusion is alleged and inquire whether the judgment is founded on a real debt” and noted with approval the suggestion by Latham CJ in Petrie v Redmond (1942) 13 ABC

44 at 49 that “the court looks with suspicion on consent judgments and default judgments”. In Wolff v Donovan (1991) 29 FCR 480 at 486, Lee and Hill JJ cited the above passage and continued: Where a judgment is obtained by default the court in bankruptcy will more readily look behind the judgment than it would if the judgment were obtained following a hearing on the merits … Gray J reviewed the authorities in Joossé v DCT (2003) 54 ATR 387; [2003] FCA 1325; BC200306929 and applied them. Reid v Hubbard [2003] FCA 1424; BC200307440 and the judgment of Emmett J (with whom the Full Court agreed) in Klinger v Nicholl [2005] FCAFC 153; BC200505644 are significant examples and statements of principle. In Commonwealth Bank of Australia v Jeans [2005] FCA 569; BC200502872 at [13] Hely J said: In Wren v Mahony (1971–1972) 126 CLR 212 the High Court held that the bankruptcy court not only may go behind a judgment, but must do so if there appear to be substantial reasons for doubting whether there really was a debt due to the petitioning creditor. However, a judgment after the trial of an action will not usually be re-opened unless a prima facie case of fraud, collusion, or miscarriage of justice is made out: Corney v Brien (1951) 84 CLR 343 at 356–7. [page 223] Later, in Commonwealth Bank of Australia v Jeans, above, his Honour considered whether he ought to exercise his discretion to go behind a judgment regularly obtained, on the principle that the rights of creditors are concerned in any such decision and not merely the parties: Re Hawkins; Ex Parte Troup (1895) 1 QB 404 at 408–9. He declined to exercise his discretion but noted that a court could go behind a judgment regularly obtained, acted according to the principles set out in Udovenko v Mitchell (1997) 79 FCR 418 at 421; 160 ALR 161 at 163–4 where Davies J had said: The circumstances in which a court will go behind a judgment cannot be stated in a definitive manner; however there are two guiding principles. First, as Fullagar J said in Corney v Brien at 356–357: If the judgment in question followed a full investigation at a trial on which both parties appeared, the Court will not reopen the matter unless a prima facie case of fraud or collusion or miscarriage of justice is made out. Secondly, in the same case, Dixon, Williams, Webb and Kitto JJ (at 348) cited the remarks of Latham CJ in Petrie v Redmond (1942) 13 ABC 44 at 49 that “… the court looks with suspicion on consent judgments and default judgments”. Fullagar J put this point more forcefully when he said (at 357–358): But, wherever the judgment in question is a judgment by default, it appears that the Court will always “go behind” the judgment if there is what it regards as a bona-fide allegation that no real debt “lay behind” the judgment. Gilmore J stated in Richardson v Leonard Cohen & Co [2008] FCA 1392; BC200808035 at [14], it is not necessary for the debtor to prove that he is “not, in truth and reality, indebted to the petitioning creditor”. What is required is that the debtor show (in the sense considered in Wolff v Donovan, above) that there is “substantial reason for questioning whether there is … a debt”: Joossé v DCT, above, at [6] per North and Finkelstein JJ. It is necessary to determine whether “sufficient facts have been shown to suggest that an investigation into the judgment should be pursued” (Wolff v Donovan, above, at [17]). See also Barned FM’s judgment in ING Bank (Australia) Ltd v Haddad [2008] FMCA 1695;

BC200811656, at [17], where His Honour applied this and other principles adverted to in this section. The court will only reconsider the judgment in order to ascertain whether the petitioning creditor’s debt on which the bankruptcy proceedings have been founded should be struck out altogether. The court does not reconsider the judgment merely with a view to seeing whether the judgment debt should be reduced but in order to ascertain whether the creditor has a debt upon which the bankruptcy proceedings can be founded: Olivieri v Stafford (1989) 24 FCR 413; 91 ALR 91; Re Longo; Ex parte Longo (1995) 57 FCR 523 at 530. This case was applied in Owners Strata Plan No 11723 v Singh [2012] FMCA 308; BC201202211 at [19]. … Another such case is the decision of the Full Court of the Federal Court in Freeman v National Australia Bank Ltd [2003] FCAFC 200; BC200304760 (French, Cooper and Nicholson JJ) where the court had to consider an appeal against a refusal to go behind concluded proceedings in the Supreme Court of Queensland. The court decided to dismiss the application that, following Udovenko v Mitchell, above, FCR at 420–1 and Corney v Brien, above and in particular, the principle in Corney v Brien (CLR at 356–7): If the judgment in question followed a full investigation at trial on which both parties appeared, the Court will not reopen the matter unless a prima facie case of fraud or collusion or miscarriage of justice is made out. The judge at first instance, Spender J, had held that a prima facie case of fraud or collusion or miscarriage of justice had not been made out such as to impeach the judgment that was obtained after a full investigation at a trial at which both parties appeared and were represented by solicitors and counsel. [page 224] Reliance was placed by the appellant upon s 27 of the Federal Court of Australia Act 1976 which permits receipt of evidence that does not satisfy the common law rules for receipt of fresh evidence. Reliance was had upon Greater Wollongong City Council v Cowan (1955) 93 CLR 435; 29 ALJR 36; CDJ v VAJ (1998) 197 CLR 172 at 184–6, 199–201, 230–8; 157 ALR 686 at 696–8, 707–9, 732–9 per Gaudron J; McHugh, Gummow and Callinan JJ; and Kirby J respectively, and to Guss v Johnstone [2000] FCA 1455; BC200006251 at [29]–[46] where it was submitted that s 27 confers upon the court a discretion as to whether or not to receive further evidence confined only by the requirement that it be exercised judicially and consistently with the judicial process. It was also submitted that a greater willingness has always been demonstrated in bankruptcy cases to receive further evidence on appeal where the interests of creditors generally are affected. However, the court held that it had not been demonstrated that any substantial material not available at first instance had been submitted, and, in short, that the evidence sought to be adduced was not compelling: Freeman v National Australia Bank Ltd, above, at [68]–[69]. That case, however, usefully collects the principles of law which allow fresh evidence to be considered and the circumstances in which a court is likely to reject or receive such evidence. Deputy Commissioner of Taxation v Lowry [2006] FMCA 913; BC200605103 does much the same. In Joossé v DCT (2004) 137 FCR 576; 57 ATR 92; [2004] FCAFC 245; BC200405721 the Full Court held it was necessary for the appellant to show “substantial reason for questioning whether there is a debt”. Ryan J, on a subsequent appeal against the Federal Magistrate’s refusal to conclude that there were such reasons, stated in Joossé v Commissioner of Taxation [2007] FCA 445; BC200702082 that the magistrate, in determining that question, was not obliged to treat the Full Court’s finding as an issue estoppel, or incapable of being re-litigated as a matter of discretion, or, alternatively, that the case

of Makhoul v Barnes (1995) 60 FCR 572 at 582; BC9501563, which dealt with the circumstances in which the court could revisit applications to set aside a bankruptcy notice was inapplicable: Joossé v Commissioner of Taxation (2007), above, at [15]–[19]. When the judgment entered has been obtained in reliance upon facts deposed to or stated in the absence of one party, Weinberg J, in Linholt v Merritt Madden Printing Pty Ltd [2002] FCA 260; BC200200877 at [45], has stated this principle: [45] A party who applies ex parte for an order in the exercise of a judicial, or quasi judicial, power is required to meet a high standard of candour and responsibility in bringing to the attention of the decision-maker all facts material to the determination of the application. This obligation extends to facts which the absent party (if present) would presumably rely upon in defence to the application. The existence of such a duty of candour is not limited to applications to the Court for injunctive or other equitable relief. An order obtained in breach of an ex parte applicant’s duty of candour will almost invariably be set aside even if, on a fresh application following full disclosure, the applicant would be entitled to an order in similar terms. In such a case the court will the more readily go behind the judgment. As Pincus J noted in Re McCollun; Ex parte The Bankrupt (1987) 71 ALR 626 at 628 (quoting Re Ferguson; Ex parte EN Thorne and Co Pty Ltd (in liq) [1970] ALR 177; (1969) 14 FLR 311): The fact that the judgment may be irregular or wrong in form is no sufficient reason for dismissing the petition … The object of going behind a judgment is not to inquire whether the proper procedure was followed to obtain it, but to determine whether the debtor in reality owed to the creditor the moneys which the judgment held that he owed. Once it is found that the debtor was really indebted to the petitioning creditor in the amount for which judgment was given, any irregularities of procedure, however important they may have been had they been relied upon in the proceedings in which the judgment was obtained, cease to be of importance … once the existence of the debt is found, it cannot be sufficient cause for refusing to make a sequestration order that a judgment for the correct amount, given by a court having jurisdiction, was obtained by the wrong procedure or given in the wrong form. No-one has stated an exact principle upon which the court will act for obvious reasons but the nearest that any court has come to such a proposition is the statement of Rares J in Tov-lev v Lowbeer (No 2) [2014] FCA 379; BC201402571 at [68] et seq. His Honour stated that the Court must be satisfied that the debt on which a petitioning creditor relies is owing at the time of the [page 225] hearing. He added that bankruptcy has serious consequences, not only for the debtor but also for the general body of his or her creditors. If the debtor is made bankrupt, the creditors lose their right to proceed against him or her for the full value of their debts and, in exchange, acquire rights to prove in the administration of the debtor’s estate. Beginning with this proposition he went on to make the following valuable evidentiary remarks at [69] and [70]: 69 While the civil onus of proof is applicable in these proceedings, s 140(2) of the Evidence Act 1995 (Cth) requires the Court, in determining whether it is satisfied on the balance of probabilities, to take into account the nature of the cause of action, the subject matter of the proceedings and the gravity of the matters alleged. That reflects the view of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361–362; [1938] ALR 334; (1938) 12 ALJR 100; BC3800027 that a tribunal of fact must feel an actual persuasion of the occurrence or existence of the fact before it can be found. And Dixon J made the well-known statement that, in such matters, reasonable

satisfaction is not to be produced by inexact proofs, indefinite testimony or any indirect inferences: see too: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 at 479–482; 242 ALR 643; [2007] FCAFC 132; BC200706673 at [29]–[38] per Weinberg, Bennett and Rares JJ. 70. In Wren v Mahony (1972) 126 CLR 212 at 220; [1972] ALR 307; (1972) 46 ALJR 163; BC7200360, Barwick CJ with whom Windeyer and Owen JJ agreed, emphasised that s 52(1)(c) of the Act required the Court to be satisfied with the proof of the fact that each debt on which the petitioning creditor relied is still owing at the hearing of the petition. He said that, where circumstances tended to show fraud or collusion or miscarriage of justice or that a compromise was not fair or reasonable in the sense that, even if not fraudulent, it was foolish, absurd or improper or resulted from an unequal position of the parties, the Court of Bankruptcy had power to inquire into the consideration of the judgment: Wren 126 CLR at 223. He emphasised that the mandatory words in s 52(1) did not concern only the immediate parties to the proceedings. The Chief Justice continued that, where reason is shown for questioning whether, behind the judgment or in consideration for it, there was in truth and reality a debt due to the petitioner, the Court could no longer accept the judgment itself as a satisfactory proof of the debt and that there was a “paramount need to have satisfactory proof of the petitioning creditor’s debt” (Wren 126 CLR at 224–225). The Court has a discretion to accept a judgment as satisfactory proof of the debt, but this discretion will not be exercised where substantial reasons are given for questioning whether, behind that judgment, there is in truth and reality a debt due to the petitioner: Wren 126 CLR at 224–225. 71 Where, at the hearing of the petition, the Court is satisfied there is a real debt on which the judgment was founded, although it might have been entered for a sum greater than that truly owing to the judgment creditor, the Court is nonetheless entitled to proceed to make the debtor bankrupt: Re Bedford; Ex parte H C Sleigh (Qld) Pty Ltd (1967) 9 FLR 497 at 498–499; [1967] QWN 17 per Gibbs J. There is no suggestion here that the assessment for costs was other than entirely accurate. The importance of these remarks is that the learned judges ties in a series of evidentiary and other principles to going behind the judgment which principles can be put to proper use. And see Carratti v Weininger [2007] FMCA 415; BC200702191 for an application of these principles. The court will apply the principle that proceedings springing from the bankruptcy notice have a limited purpose only. See for instance Reasonable Endeavours Pty Ltd v Dennehy [2002] FCA 1472; BC200207167 where s 5(7) of the Limitation of Actions Act 1958 (Vic) was raised as justifying the contention that the bankruptcy notice overstated the amount of interest said to be owing. Marshall J held, applying Re Moss; Ex parte Tour Finance Ltd [1969] ALR 285 at 287; (1968) 13 FLR 101 at 105 and Re Maddox; Ex parte the Debtor (1979) 24 ALR 279 at 283–4; 36 FLR 392 at 396–7, that although a bankruptcy notice is a proceeding for some purposes under the Bankruptcy Act, it was not a proceeding for other purposes. See National Bank of Australia Ltd v Larter (No 2) [2007] FMCA 595; BC200702860 for cases where an Anshun estoppel defence is raised but not referred to in other, pertinent, proceedings. [page 226] [81,015.65] Summary According to the principles relied on in Beck Legal Pty Ltd v Shirreff [2010]

FMCA 58; BC201001183 which case adopted the decision in Joosse v Deputy Commissioner of Taxation (2004) 137 FCR 576; 57 ATR 92; [2004] FCAFC 245; BC200405721 at [3]: The court can go behind a judgment to determine whether it is founded on a real debt because a sequestration order should not be made on the petition of a person who is not a real creditor. The court has discretion whether or not to go behind the judgment. The discretion is of a limited kind. In Wren v Mahony (1972) 126 CLR 212; [1972] ALR 307; (1972) 46 ALJR 163; BC7200360, Barwick CJ, with whom Windeyer and Owen JJ agreed, said (at 224 to 225) that “[t]he Court’s discretion …. is a discretion to accept the judgment as satisfactory proof of [the petitioning creditor’s] debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner. Such considerations were raised in Williams v Teoh [2012] FMCA 1138; BC201209515 at [39] relating to the stand of proof required before the court can be asked to go behind the judgment, or to exercise the discretion under s 52(2)(b). The court referred to Wolff v Donovan (1991) 29 FCR 480; [1991] FCA 222; BC9103193 and St George Bank Ltd v Helfenbaum [1999] FCA 1337; BC9906256 on these two matters. In Boglari v Coadys [2009] FCA 1398; BC200910688 at [13], Gray J drew attention to the fact that the Court will be more ready to find that there is a substantial reason for questioning whether a judgment is based on an actual debt when that judgment has been given by default. In Commonwealth Bank of Australia v Martinek [2014] FCCA 2321 Judge Burnett dealt with the substantive point as to whether the court should go behind the judgment at [30]: As Mullins J observed in debate between herself and counsel for the creditor in the summary judgment application, the debtors were simply a casualty of the global financial crisis, and that matter is no defence to a failure to satisfy a contractual obligation to repay a facility upon the due date. The claim proposed by the debtor is, in my view, a weak claim. If there is something in the claim, it is a matter that the debtors’ trustee in bankruptcy can consider in the administration of their estates. The proposed counterclaim was, at [32], expressed by the judge as “I do not think that the debtors’ claim against the creditor is such as to be likely to give rise to the prospect of fruitful litigation, and its outcome is unlikely to see the debtors’ solvency established or preserved even if an outcome could be quickly obtained (a matter I seriously doubt)”. The words used by the court indicate the strength and persuasiveness of the evidence and how it should be judged. [81,015.70] Opposition to petition At least 3 days before the hearing, a person intending to oppose a petition must do those things set out in O 77 r 11. That rule requires the filing or entry and service of an appearance in accordance with O 9, notice of opposition stating grounds of opposition (Form 149) and affidavit in support of grounds of opposition. The court may allow those documents to be filed at the hearing. [81,015.80] “able to pay his or her debts” — s 52(2)(a) The test of ability to pay debts in an earlier version of this section, which required the debtor to pay his debts out of his own money is that stated by Barwick CJ (with whom McTiernan and Windeyer JJ agreed) in Sandell v Porter (1966) 115 CLR 666 at 670: Insolvency is expressed in s 95 as an inability to pay debts as they fall due out of the debtor’s own money. But the debtor’s own moneys are not limited to his cash resources immediately available. They extend to moneys which he can procure by realization by sale or by mortgage or pledge of his assets within a relatively short time — relative to the nature and amount of the debts and to the

circumstances, including the nature of the business, of the debtor. The [page 227] conclusion of insolvency ought to be clear from a consideration of the debtor’s financial position in its entirety and generally speaking ought not to be drawn simply from evidence of a temporary lack of liquidity. It is the debtor’s inability, utilizing such cash resources as he has or can command through the use of his assets, to meet his debts as they fall due which indicates insolvency. In Bank of Australasia v Hall (1907) 4 CLR 1514 at 1527–8 Griffith CJ (with whom Barton J agreed) said of the words “unable to pay his debts as they become due from his own moneys” in the Insolvency Act 1874 (Qld): It was argued that only debts then actually payable and the amounts of which were then actually ascertained should be taken into consideration. One answer to this argument is that the matter for determination is the ability of the debtor, which is a state or condition that cannot be determined without having regard to all the facts. Another answer is that the debts referred to are not his debts “then” payable, but his debts “as they become due” — a phrase which looks to the future. No doubt, only the reasonably immediate future is to be looked to … The words “as they become due” require, as already pointed out, that some consideration shall be given to the immediate future; and, if it appears that the debtor will not be able to pay a debt which will certainly become due in, say, a month … by reason of an obligation already existing, and which may before that day exhaust all his available resources, how can it be said that he is able to pay his debts “as they become due”, out of his own moneys? The reference to the ability to pay debts “as they become due from his own money” has since been removed from the section. Nevertheless, the approach adopted in Hall and Sandell v Porter has been applied to the current wording of the section: “unable to pay his or her debts” in s 52(2)(a). See International Alpaca Management Pty Ltd v Ensor [1999] FCA 72; BC9900211; St George Bank Ltd v Helfenbaum [1999] FCA 1337; BC9906256; Lawman v Queensland Building Services Authority [1999] FCA 1781; BC9904218. The debtor bears the onus of establishing that he or she is solvent and able to pay his or her debts within the meaning of s 52(2)(a): Re Poulson; Ex parte Hempenstall Bros Ltd (No 2) (1929) 1 ABC 54. In Lane Rowin Pty Ltd v Perovich [2007] FMCA 1429; BC200706798 Wilson FM adopted this approach. He said at [16]: [16] One starts from the uncontroversial proposition that a debtor who is in a position to pay all the debts which she owes within a reasonable time ought not be subject to a sequestration order. The ability to pay debts does not necessarily require a debtor to have sufficient cash on hand or available on deposit to pay all creditors in full immediately, if the debtor has other realisable assets … At [17] his Honour, on this aspect, also applied Hely J’s practical observation in Australian and New Zealand Banking Group Pty Ltd v Foyster [2000] FCA 400; BC200001377: [17] The onus with proving sufficiency of assets lies on the respondent. It is not sufficient for the respondent simply to establish that he has assets which exceed his liabilities in value. It must also be established that the assets are available to be realised and that they are capable of ready realisation. …

This case and Hely J’s observation have continued to be cited, for example Russo v Private Funds Management Pty Ltd [2011] FMCA 8; BC201100057: [17] The onus of proving sufficiency of assets lies on the respondent. It is not sufficient for the respondent simply to establish that he has assets which exceed his liabilities in value. It must also be established that the assets are available to be realised and that they are capable of ready realisation. If a debtor is able to pay his or her debts, but is recalcitrant, the creditors may resort to other remedies, such as execution against property and garnishee proceedings, but not to sequestration. Bankruptcy is not a proceeding designed for the recovery of debts: see Re Sarina; Ex Parte Wollondilly Shire Council (1980) 32 ALR 596, 599. [page 228] [18] Although a sequestration order will not be made against the estate of a debtor who is recalcitrant but plainly solvent, the Bank submitted, on the basis of Trojan v Corporation of Hindmarsh (1987) 16 FCR 37, 46–48, that the discretion under s 52(2)(a) should not be exercised unless the debtor demonstrates that the petitioning creditor will be satisfied from the ordinary remedies such as execution and guarantee. Trojan decides that even if a debtor establishes solvency, the court retains a discretion whether or not to dismiss the petition. The Full court said, at p 48: … the principle laid down in the Sarina case would not necessarily be satisfied by a sterile demonstration of an ability to achieve a payment which was not in reality at all likely to be compelled. Section 52(2)(a) envisages a situation which will probably bear fruit in payment. It is not easy to see any other reason why the legislature saw fit to make a demonstration of ability to pay only a discretionary ground of dismissal of a petition, and not an absolute bar to its success. [19] Under s 52(2)(a) the respondent must satisfy the court that he is “able to pay his … debts”, including liabilities: s 5(1). In my view, the subsection refers to a state of affairs which requires account to be taken of debts which will fall due in the reasonably immediate future pursuant to existing obligations: Bank of Australasia v Hall [1907] HCA 78; (1907) 4 CLR 1514, 1527–1528 as well as debts which are presently due and payable. However, whether that is so or not, for the reasons explained by Katz J in International Alpaca Management Pty Ltd account needs to be taken, if not in assessing solvency, then in the exercise of the discretion whether or not to dismiss the petition, of liabilities which will become payable in the reasonably immediate future. Another frequently used test is that of Buchanan J in Eykamp v Deputy Commissioner of Taxation [2010] FCA 797; BC201005271 at [7]: Under an earlier definition in the Act considered in Sandell v Porter (1966) 115 CLR 666; 40 ALJR 71; BC6600670 it was necessary for a debtor to be able to pay debts as they fell due out of the debtor’s own money. Such monies extended to those capable of being procured by sale, by mortgage or pledge of assets of the debtor’s within a relatively short time. A more flexible position now obtains. I note that in International Alpaca Management Pty Ltd v Ensor [1999] FCA 72; BC9900211 Katz J favoured the view that the necessity to pay a debt from a person’s own money continued to be an important element in the scheme established under the Act (see eg s 124(3)(a) of the Act). However, with respect, so far as it concerns consideration of whether a person is, or is not, solvent, I prefer the view taken by Palmer J in Lewis v Doran (2004) 208 ALR 385; 184 FLR

454; [2004] NSWSC 608; BC200404328 at [116] (see on appeal Lewis v Doran (2005) 219 ALR 555; 54 ACSR 410; [2005] NSWCA 243; BC200506071 at [109]–[112]) to which I subscribed, with the agreement of Marshall and Tracey JJ, in Whitton at [34]–[38]. Accordingly it would not be impermissible to pay regard to the fact that Mrs Eykamp could raise sufficient money to pay the debt, whether or not that was the direct result of sale, mortgage or pledge of her assets. However, whatever mechanism is employed to secure the necessary funds, and satisfy the Court that it provides adequate evidence of solvency, it remains necessary that it produce results within a realistic time frame (Sandell v Porter (1966) 115 CLR 666 at 670; 40 ALJR 71; BC6600670; Hall v Poolman (2007) 215 FLR 243; 65 ACSR 123; [2007] NSWSC 1330; BC200710202 a [187]). In Owners Strata Plan No 55932 v Deary [2011] FMCA 584; BC201105707 Smith FM applying the above case and Totev v Sfar (2006) 230 ALR 236; [2006] FCA 470; BC200603513 gave weight to the fact that an act of bankruptcy had occurred and that there was a real possibility of success for the impugned claim. In Owners Corporation Strata Plan 62734 v O’Connell [2011] FMCA 424; BC201104063 Driver FM at [8] used a simpler test as follows: “The test of solvency is whether the debtor can pay his debts as and when they fall due or within a reasonable time.” In Cain v Whyte (1933) 48 CLR 639; 6 ALJR 457b the High Court pointed out that the onus is on the debtor to satisfy the court that there [page 229] is other sufficient cause and that the public interest in dealing with an insolvent debtor and the rights of individual creditors are outweighed by other considerations. All of these tests were considered in Deputy Commissioner of Taxation v Donnelly (No 2) [2011] FMCA 627; BC201106244 by Barnes FM. Practice: reasons The decision of the Full Court in Richmond v BMW Australia Finance Ltd (No 2) (2009) 174 FCR 232; 254 ALR 76; [2009] FCAFC 25; BC200901379 made it clear that a Federal Magistrate, in dealing with an application for a sequestration order has the power to reserve judgment and his or her reasons. The magistrate, who had a long list, had no opportunity to deliver reasons at the same time as the making of the order. The appellant received the reasons within 21 days. The Full Court held that Div 6 and s 74(1) of the Federal Magistrates Act 1999 (Cth) gave the necessary authority to reserve the delivery of reasons until a later date, Black CJ adding (at [12]–[14]): [12] There are cases that discuss the common law obligation to deliver reasons promptly and in public. The authorities have not always proceeded in the same direction, but it would seem to me that the analysis of the general position by the Court of Appeal of Victoria, in Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (2001) 4 VR 28, is particularly valuable and reflects the practices accepted in this Court. The same may be said of the observations of the learned Chief Justice of New Zealand, Sir Thomas Eichelbaum, in Stratford v Ministry of Transport [1992] 1 NZLR 486. [13] Accordingly the provisions of the Act, read in the context of the common law tradition of public justice, make it perfectly plain that the Federal Magistrates Court has a power to reserve judgment, and a power, having delivered judgment, to reserve reasons. There is no basis for any suggestion that the period of 21 days or thereabouts between the pronouncement of judgment and the publication of reasons was, in the circumstances, beyond appropriate limits. [14] For these reasons I conclude that Mr Richmond’s ground of appeal has not been made out.

Practice: administration has taken place The availability of s 37 to rescind, discharge, or suspend the operation sequestration orders is less likely to be invoked when the administration has taken place: see Austral Brick Co Pty Ltd v Daskalovski [1998] FCA 782; BC9803074; Costaexchange Ltd v Shephard (No 2) [2011] FMCA 545; BC201105312 and Doulman v ACT Electronic Solutions Pty Ltd [2011] FMCA 232; BC20110232 at [50]–[52]. See [80,800.20]. [81,015.90] refusal by solvent debtor to pay petitioner’s debt — s 52(2)(a) A sequestration order is not appropriate where a debtor who is able to pay his debts, refuses to do so. The words “able to pay” do not mean “willing and able to pay”. In Re Sarina; Ex parte Wollondilly Shire Council (1980) 32 ALR 596; 48 FLR 372 Deane J held that there is no policy discernible in the legislation which allows a creditor to make bankrupt a recalcitrant but solvent debtor. The question arose because the debtor in that case had demonstrated his solvency. Notwithstanding that, it was argued that, because he had refused to pay the debt to the creditor, it should be found that he was not able to pay his debts in the sense relevant to the statutory provision. Deane J considered the arguments, but concluded that there was no policy underlying the provisions of the Bankruptcy Act to the effect that a creditor should be entitled to make a recalcitrant debtor bankrupt even though the debtor satisfies the court that he is plainly solvent and able to pay his debts. In those circumstances, His Honour said “It seems to me that it may well be that the legislative intent was to leave a creditor, in those circumstances, to the ordinary remedies by way of execution and garnishee”. However, the principle in Re Sarina; Ex parte Wollondilly Shire Council, above, would not be satisfied by a sterile demonstration of an ability to pay: Trojan v Hindmarsh Corporation (1987) 16 FCR 37; 82 ALR 225. See also Deputy Commissioner of Taxation v Keenan (1999) 99 ATC 4465; [1999] FCA 524; BC9902081 (conscientious objection to payment of tax). [81,015.93] Discretion to grant sequestration order and to re-open case Deputy Commissioner of Taxation v Somerton [2011] FMCA 592; BC201105687 relied upon Shaw v R (1952) 85 CLR 365; [1952] ALR 257; BC5200140 and Inspector-General in Bankruptcy v [page 230] Bradshaw [2006] FCA 22 for authority to re-open a case where there was fresh evidence, an inadvertent error or mistaken apprehension of the facts of the law. The overriding principle was whether the interests of justice were better served by allowing or rejecting the application for leave to re-open. [81,015.95] Pending proceedings — s 52(2) In Rigg v Baker (2006) 155 FCR 531; 236 ALR 629; [2006] FCAFC 179; BC200610222 at [67] French J said: [67] When the creditor’s petition is based upon a judgment debt, the existence of a pending appeal against that judgment may also be a ground for adjourning the petition. In Ahern v DCT (Qld) (1987) 76 ALR 137 the Full Court said that: It is also well established that in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds. This principle, without mentioning the case, was the reason why in Sharpe v W H Bailey & Sons Pty Ltd [2013] NSWSC 913; BC201310961 Campbell J at [44] & [45]: [44] However, there is another consideration in this case. It is common ground, from what I was

told in argument, that Mr Sharpe has committed an act of bankruptcy by failing to comply with a bankruptcy notice served on him by Mr Heywood. As yet, no creditor’s petition has been issued out of the federal courts. I will not second-guess the matter but, given the history of that interwoven litigation, it is reasonable to expect that that step will be taken sooner rather than later. If that occurs and a sequestration or bankruptcy order is made, Mr Sharpe’s statutory right of appeal from the decision of Magistrate Evans will be property which will vest in his trustee in bankruptcy. It will then be a matter for the trustee’s discretion as to whether an appeal will proceed. [45] I think, however, it would be wrong for me to anticipate those developments by refusing Mr Sharpe a stay at this time. It is not for the court to attempt to forecast the future developments in the litigation. Certainly, any forecast cannot be made with any semblance of certainty. Raphael FM said in Commonwealth Bank of Australia v Qureshi [2009] FMCA 1111; BC200910231 that the principle is as follows: [5] It is settled law that a court in bankruptcy will be reluctant to make a sequestration order against a debtor when the primary debt in respect of which the order is sought is still the subject of an appeal, particularly when it is the subject of an appeal of first instance, ie an appeal to the court immediately superior to the court in which the decision was made; Ahern v Deputy Commissioner of Taxation 76 ALR 137. But this principle is not one in respect of which there can be no variation and this court has in the past been prepared to make sequestration orders even though there is an extant appeal. See Boumelhem v Commonwealth Bank of Australia [2008] FCA 1568 and Sexton v Tagget [2007] FMCA 1438. [6] What the court has to do in these instances is to balance the public interest in proceedings with the bankruptcy of an otherwise insolvent person with that person’s right to challenge the debt in respect of which the petition has been issued. See also similar sentiments in Westpac Banking Corporation v Carver (2003) 126 FCR 113; [2003] FCA 221; BC200301149 at [3]–[4] and at [18] and particularly by the Full Court in Adamopoulos v Olympic Airways SA (1990) 95 ALR 525 at 526, 531–2, most recently applied in Lewarne v Scotts [2008] FMCA 533; BC200803929. French J’s remarks have great authority, but it is necessary that the results not be futile. An example of such a case is Cusack v De Angelis [2008] FMCA 18; BC200800261, where, as Wilson FM put it at [30]–[31]: [30] Even adopting the test most generous to the respondent, I do not think an adjournment is warranted in this case. As counsel for the applicant creditor submitted, apart from one argument, [page 231] even if the respondent obtains special leave and is entirely successful that does not result in a conclusion that no money is owed by the respondent to the applicant. The judgment would be set aside, but an act of bankruptcy has occurred, and the petitioning creditor is undoubtedly a creditor, albeit for an unquantified amount, depending upon any subsequent decision as to the interest she is entitled to claim. She would still be a creditor for the principal sum guaranteed by the respondent. [31] That argument seems to me to be unassailable. Therefore, accepting that the application for special leave is genuine and arguable, and accepting that the judgment in the creditor’s favour may

be set aside, there is no point adjourning the petition, because whatever results the applicant will still be a creditor entitled to petition. The question of futility of existing proceedings has been raised in a number of cases, most clearly in Russell v Polites Investments Pty Ltd [2011] FMCA 476; BC201104754 by Simpson FM, which is also authority for the nature of the hearing de novo from the registrar’s decision (as to which see [18] for an interesting and extensive consideration of the applicable concepts). Importantly, at [30] the Federal Magistrate applied the following statement of the privy Council in R v Henderson [1898] AC 720, in favour of a litigant who had established the requirements of section and reg 4.06: A creditor has an absolute right to found a petition seeking a sequestration order on a statutory act of bankruptcy; An ulterior private purpose is not necessarily a fraud on the court; A further motive is not a bar to bringing a petition for sequestration unless there is fraud; and An abuse of process does not exist unless the remedy is unsuitable and would enable the person obtaining it to fraudulently defeat the rights of others, whether legal or equitable. This statement has been approved by the High Court (Dixon CJ, Webb and Fullagar JJ) on Rozenbes v Kronhill (1956) 95 CLR 407 at 417; [1956] ALR 1004; (1956) 30 ALJR 470; BC5600410, and Isaacs J in Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509 at 522; 21 ALR 425; BC1500018, all of which have been referred to by the learned Federal Magistrate. It should be noted that an argument based on futility was rejected on the facts in Sharpe v W H Bailey & Sons Pty Ltd [2013] NSWSC 913; BC201310961 Campbell J at [44] & [45]. Stay in Federal Court and in Federal Magistrates’ Court Rares J in Srinivasan v Bank of Western Australia Ltd [2012] FCA 319; BC201201710 has set out the principle at [8]–[10]: [8] The principles on which interlocutory relief, such as the stay sought by the appellant, is granted in cases involving challenges to the validity of a statute were discussed by Mason ACJ in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153–157: approved in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at 82 [66] per Gummow and Hayne JJ with whom Gleeson CJ and Crennan J agreed at 68 [19]. Mason ACJ identified the public interest as a prime consideration in assessing the balance of convenience in such a case. In the ordinary course, the balance of convenience requires a person who challenges the Constitutional validity of a law to obey that law pending the Court’s decision: Castlemaine Tooheys 161 CLR 155. Here the balance of convenience is overwhelmingly against the grant of a stay. [9] The Federal Magistrates Court was created by Parliament pursuant to s 71 of the Constitution. It has a wide jurisdiction. The question of the pension arrangements for its judges goes to the adequacy with which they may be remunerated. That question is pending before Buchanan J in the Pension case that is proceeding to a full hearing in due course. [10] In the meantime, it is the duty of the Federal Magistrates Court to hear and determine all matters within its jurisdiction. That is the duty of every judge of every Court: Ebner v Official [page 232]

Trustee in Bankruptcy (2001) 205 CLR 337 at 348 [19] per Gleeson CJ, McHugh, Gummow and Hayne JJ. The principle of necessity requires that judges sit in cases where there is no practical alternative. In a case such as the present that principle justifies judges of the Federal Magistrates Court exercising the jurisdiction vested in a Court that was constituted by a prima facie valid Act of the Parliament. In Commonwealth Bank of Australia v Pattison [2012] FCA 1511; BC201210697, Jessup J considered that the discretionary considerations going to both s 52(3) of the Act and those of r 36.08 of the Rules were the same (at [4]). Nolten v Groeneveld Australia Proprietary Ltd [2011] FCA 1494; BC201110268 contains a useful summary of the principles to be applied when considering whether a stay of a sequestration order pending appellate proceedings in this Court should be granted. Judge Kenny said at [24]: Rule 36.08 of the Rules confers a broad discretion to order a stay notwithstanding that an appeal shall not operate as a stay of execution or of proceedings under the judgment appealed from. In Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65, a Full Court of this Court held that the appropriate test for a stay under the equivalent of Rule 36.08 of the current Rules was that set down in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, namely, whether the applicant for a stay showed a reason or an appropriate case to warrant the exercise of discretion in his favour. More specifically, with respect to an application for a stay of a sequestration order, the question is whether there is an arguable point on the proposed appeal and whether the balance of convenience favours the granting of a stay: see Freeman at [3]–[4]; Coleman at 303; Beames v Rigby [2002] FCA 806 at [2]; Kellow v Dudzinski [2003] FCA 238 (“Dudzinski”) at [8]; and Shirreff v Beck Legal Pty Ltd [2010] FCA 1407 at [67]; (2010) 119 ALD 284 at 293–294 [67]. The test for a stay under s 52(3) of the Act is not materially different. [81,015.97] s 52(2)(a) “other sufficient cause” — principles In Westpac Banking Corp v Goodman [2010] FMCA 993; BC201010150 the federal magistrate dealt with broader principles particularly at [41] et seq that the debtor is required to satisfy the court that his litigation against the creditor is “likely to succeed” and not merely that he has an arguable claim: he cited ICM Agriculture Pty Ltd (ACN 006 077 765) v Young (2009) 260 ALR 515; [2009] FCA 1169; BC200909348 to constitute “other sufficient cause” noting in respect of s 52(2)(b) the references to [85], [86] and [114] in that case. He noted these other two matters of principle at: [43] Even if the debtor established a “sufficient cause” under s 52(2)(b) of the Act the court still maintains a discretion to make the sequestration order. (Ibid [118] referring to Sarina v Council of the Shire of Wollondilly (1980) 32 ALR 596 at 599–600). The power to dismiss under s 52(2) of the Act is permissive not mandatory (Ibid 600.5). [44] The mere existence of an arguable claim, counterclaim or appeal by the debtor does not, however, by itself necessarily constitute “other sufficient cause” to dismiss the creditors petition Rigg v Baker (2006) 155 FCR 531; Totev v Sfar (2008) 5 ABC (NS) 691. “Other sufficient cause” may extend two reasons which might amount to an abuse of process, for example the existence of a competing petition. In Owners Corporation Strata Plan 62734 v O’Connell [2011] FMCA 424; BC201104063 Driver FM at [11] Driver FM referred to such instances. But a petitioning creditor who has satisfied the requirement of s 52(1) of the Act is prima facie entitled to a sequestration order (Cain v Whyte (1933) 48 CLR 639 at 645–6; 6 ALJR 457b; BC3315271; Rozenbes v Kronhill (1956) 95 CLR 407 at 414; [1956] ALR 1004; (1956) 30 ALJR 470; BC5600410. But if the debtor satisfies the court that he or she has a real claim against the petitioning creditor that is likely to succeed for an amount that is equal to or in excess of the amount owing to the creditor, then the court may decline to make a sequestration order, and make an order adjourning or

dismissing the creditor’s petition (Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLR 111 at 115– 16 (Gibbs J)). [page 233] This line of authority received some support in Clapham v Commonwealth Bank of Australia [2013] FCAFC 84; BC201311636, a decision of the Full Court (North, Barker and Nicholas JJ). The court held that a cross-claim against the bank should be heard before the sequestration order should go ahead at [57]: While we are not persuaded that Mr and Mrs Clapham’s claim is likely to succeed, we are satisfied that it is sufficiently strong to justify us allowing Mr and Mrs Clapham’s appeal and adjourning the creditor’s petition to give them an opportunity to have their claim against the Bank determined by the Supreme Court. This is the course that was followed by the Full Court in Ling v Commonwealth (1996) 68 FCR 180, and we think it is the preferable course to take in this case. The Full Court therefore considered the weight of the evidence for the cross-claim for the limited purpose of deciding whether the appeal should be determined. [81,015.100] Cross claim against creditor as “other sufficient cause”: s 52(2)(b) The existence of a set-off, cross-claim or cross-demand may be a “sufficient cause” within the meaning of s 52(2)(b) for declining to make a sequestration order: Ling v Enrobook Pty Ltd (1997) 74 FCR 19; 143 ALR 396. The debtor must establish the existence of “sufficient cause”: Cain v Whyte(1933) 48 CLR 639. See St George Bank Ltd v Helfenbaum [1999] FCA 1337; BC9906256 (in which the authorities are summarised) and Totev v Sfar [2006] FCA 470; BC200603513 particularly at [37]–[45]. In Klinger v Nicholl [2005] FCAFC 153; BC200505644 Emmett J (with whom Moore and Tamberlin JJ agreed) applied this test to ascertain “other sufficient cause” at [32]: [32] The exercise of discretion under s 52(2) entails a balancing exercise. While the fact of an instalment order may be a relevant consideration for a bankruptcy court to take into account (see Cain v Whyte (1933) 48 CLR 639), it is but one of the considerations that might be taken into account. For a matter to constitute sufficient cause to decline to make a sequestration order, when the prerequisites of ss 52, 43 and 44 of the Act have otherwise been satisfied, the matter must be one of significant weight to displace the interest of the community in avoiding insolvent trading. It is not sufficient merely to raise the counterclaim or set-off but some evidence most be supplied upon which the court may make an evaluation. See St George Bank Ltd v Helfenbaum, above, and see its application in Qun Xiong (Kenny) Yu v Todaytech Distribution Pty Ltd (ACN 059 027 250) [2006] FCA 131; BC200600686 at [39]. Reid v Hubbard [2003] FCA 1424; BC200307440 was an attempt to raise “sufficient cause” but the court has recognised while discretion enlivened in such circumstances the existence of a counterclaim by a respondent debtor against a petitioning creditor has been held not to constitute sufficient reason for the court to decline to make a sequestration order, even though it has been accepted that, in an appropriate case, such a claim might constitute “other sufficient cause”: Ling v Enrobook Pty Ltd (1997) 74 FCR 19; 143 ALR 396 at 400–2; BC9701152 at [25]–[26] and Re Schmidt; Ex parte Anglewood Pty Ltd (1967) 13 FLR 111 at 115–117. The court identified that the determination of such a question would depend upon an assessment of the particular facts in each case, considered in conjunction with the interests of the petitioning creditor. The question is what principle is activated when the abuse a counterclaim but it is governed by a contingency which has not yet happened? In

Demandem Holdings Pty Ltd v Christou [2011] FMCA 489; BC201106519 Driver FM distinguished between a contingency that had not occurred and one that had crystallized before the petition, holding at [29] that it was much less likely that the latter might constitute “other sufficient cause” against sequestration. In Westpac Banking Corporation v Tsatsoulis [2003] FCA 406; BC200302071 the respondent sought to stay the petition on the ground that the respondent might have an action against former legal advisers. Applying Ling v Enrobook Pty Ltd, above, FCR at 26; ALR at 401–2, Branson J held that it was not in the public interest that debtors should be able to prosecute litigation and the court needed to have shown to it a solid case that the litigation would be prosecuted and would be successful. Even in such an event, Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403; 37 FLR 341 was authority that the court had a discretion not to adjourn the petition even if a meeting of creditors had passed a special resolution requiring the respondents to execute a deed of [page 234] assignment or a deed of arrangement under Pt X. In the event the court refused relief on the cited ground but stayed the petition on another ground. Rares J considered the authorities in Commonwealth Bank of Australia v Jeans [2006] FCA 693; BC200604009. In that case a debtor had alleged that a signature appearing on a guarantee did not appear to be his and the debtor began proceedings in the NSW Supreme Court alleging that a witness had fraudulently asserted he was a witness when he had affixed his signature to the guarantee: see [2]. The Court of Appeal held that this was a triable issue. His Honour considered Ling v Enrobook Pty Ltd (1997) 74 FCR 19; 143 ALR 396; BC9701152 on the issue of whether an adjournment should be granted pending the determination of the issue in the Supreme Court and whether, if the petition remained undetermined prior to its expiry on 9 July 2006, the bank would lose the benefit of any relation back period based on the occurrence of the act of bankruptcy which founded the petition: see Commonwealth Bank of Australia v Jeans, above, at [12]. His Honour granted a limited adjournment during which the debtor would have an opportunity to submit evidence which might form the basis of an undertaking not to dissipate assets. After successful appellate proceedings Driver FM, in SFAR v Totev [2007] FMCA 245; BC200705371 at [11] and [12], expressed the view that a real case had to be demonstrated, even if the evidence is spare. Driver FM applied, inter alia, Ling v Enrobook Pty Ltd (1997) 74 FCR 19; 143 ALR 396; BC9701152. However, it is not all credits that can stand under this subsection. In Deputy Commissioner of Taxation v Cumins [No 5] [2008] FCA 794; BC200803956 at [71], Gilmour J declined to exercise his discretion on the basis that credits were applied to the judgment debt because no issue estoppel arises in this respect: Makhoul v Barnes (1995) 60 FCR 572 at 582; BC9501563. However, the fact that payments were received which did not, as a matter of law, give rise to any entitlement to a credit in that amount for a tax debt in respect of which judgment was given were held to be an inappropriate exercise of the discretion. Similarly, His Honour held that pending proceedings in the Administrative Appeals Tribunal (AAT) could not go to the exercise of discretion because it was held at [72]: If he succeeds in the AAT proceedings, the Commissioner must implement the findings of the AAT and a fresh assessment would have to be issued: s 14ZZL of the Taxation Administration Act 1953 (Cth) and s 170(1) of the Income Tax Assessment Act 1936 (Cth). Only if and when that assessment occurs would there be an enforceable liability against him. There is no liability on him to pay tax until the relevant notice of assessment has been given: White Industries Australia Ltd v Commissioner of Taxation [2003] FCA 599; (2003) 129 FCR 276 at [27], 282.

The court considered the circumstances in which an abuse of process could be made out in GR Finance Ltd v Waldron (No 2) [2010] FMCA 168; BC201001371. The contention was advanced that a bankruptcy notice was issued when valuers in collateral proceedings settled an issue against the bankrupt but not in respect of a common debt, in respect of which the creditor was free to pursue recovery of its losses from a contributory tortfeasor, it being open to it to arrive at a settlement with that person before exhausting all avenues of recovery from the debtor or other person principally liable. It was asserted that the proceedings were to obtain a collateral advantage as in Williams v Spautz (1992) 174 CLR 509; 107 ALR 635; BC9202694 and that the petition should be dismissed on the principles of Rozenbes v Kronhill (1956) 95 CLR 407; BC5600410. Smith FM considered that in these circumstances he should follow Farrow Finance Company Ltd (in liq) v ANZ Executors and Trustee Co Ltd [1998] 1 VR 50; 136 FLR 154; BC9606806 which explained why there was no implied release of the debtor, why the settlement amount did not amount to a payment in relation to a common debt, and why principles of double satisfaction would not apply so as to require the settlement amount to be brought into account, and that the circumstances of extortion in Rozenbes were different from the facts in the instant case. In short, the court examines all the reasons specified by Gilmour J in Cumins particularly at [15]– [18] and as His Honour said at [18]: [page 235] The judgment debtor must point to grounds that have “a real chance of success on appeal” … or ensure “that substantial reasons are given for questioning” whether there was in truth a debt … It is not enough to rely upon the mere assertion. The onus is on the applicant for a stay to show the existence of a genuine dispute by adducing evidence establishing the substantial nature of the grounds of challenge. But, as Kirby J observed in Bryant v Commonwealth Bank (1996) 90 LGERA 126; 134 ALR 460; 70 ALJR 306; BC9600435 at [17] that the examination is limited to a general impression of the prospects of the cause. As Burnett FM stated in DM Developments Pty Ltd v Driscoll [2013] FMCA 129; BC201301349 at [21]: … all contingencies must be examined including the means to prosecute the appeal, the debtor’s past conduct and all other matters indicating the success of the debtor’s cause. [81,015.103] “Claim likely to succeed” and the existence of a sequestration order Collier J in Singh v Deputy Commissioner of Taxation [2011] FCA 889; BC201105872 at [14] held that it was necessary for an appellant to establish that the claims were likely to succeed and not merely arguable: ICM Agriculture Pty Ltd v Young (2009) 260 ALR 515; [2009] FCA 1169; BC200909348 at [85]; Totev v Sfar (2008) 167 FCR 193; 247 ALR 180; [2008] FCAFC 35; BC200801800 (in particular Cowdroy J at [78]–[87]). Further, the fact that a sequestration order had been made rendered the appellants standing as dubious. [81,015.105] Bias as “other sufficient cause” The test in Johnson v Johnson (2000) 201 CLR 488 at 492; 174 ALR 655; [2000] HCA 48; BC200005268 and in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344; 176 ALR 644; [2000] HCA 63; BC200007446 of whether “those events might reasonably cause a fair-minded lay observer to apprehend that the magistrate might not bring an impartial and unprejudiced mind to the resolution of the review application” was applied in Moore v Wilson [2006] FCA 79; BC200600971 at [72]. Judge Kenny in Bora Homes Australia v AIM Site Hire Pty Ltd [2013] FCA 23; BC201300217

illustrated by reference to authority what is required to employ an impartial and unprejudiced mind. He pointed out at [43] and [44] that the onus was upon the debtor to establish sufficient cause to avoid the making of the order. While the circumstances that may constitute “other sufficient cause” cannot be exhaustively stated, they clearly include a circumstance in which the judgment on which the creditor relies is shown not to be founded on a real debt, and there was a bona fide allegation that no real debt lay behind the default judgment, and if there was such an allegation then the court may go behind the judgment. As Barwick CJ said in Wren v Mahony (1972) 126 CLR 212; 46 ALJR 163; [1972] ALR 307; BC7200360 at 224: The Court’s discretion in my opinion is a discretion to accept the judgment as satisfactory proof of that debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner. Judge Kenny said [46]: Whether or not the court will inquire into a judgment depends partly on the circumstances in which the judgment was obtained. If the judgment arose from a trial in which the parties appeared to contest the matters in issue, the court “will not re-open the matter unless a prima-facie case of fraud or collusion or miscarriage of justice is made out”: Corney v Brien (1951) 84 CLR 343 (“Corney”) at 356–357; per Fullagar J. Where judgment has been obtained in pursuance of a compromise, there must be a ground shown for challenging the compromise as such before the judgment will be re-opened: Corney at 357. Relevantly for Mr Komba’s case: [W]herever the judgment in question is a judgment by default, it appears that the court will always “go behind” the judgment if there is what it regards as a bona-fide allegation that no real debt “lay behind” the judgment. [page 236] It is submitted that this shows the correct application of the authorities bearing in mind the onus of proof imposed by the section. [81,015.110] Futility of bankruptcy as “other sufficient cause”: s 52(2)(b) The court may dismiss a petition on the basis that the making of a sequestration order would be an exercise in futility. There needs to be cogent evidence of the futility before such an order would be made: see Radich v Bank of New Zealand (1993) 45 FCR 101; 116 ALR 676. But any such determination can only be made after sequestration, with a full examination by the trustee in bankruptcy, that assets come to light. This case indicates also that claims of destitution or disposing of assets to avoid bankruptcy should be avoided. The onus of proving that there are no assets lies with the debtor. But the mere fact that there are no reasons for suspecting that the debtor has any assets, is not a ground for refusing to make a sequestration order Bayne v Blake (No 2) (1909) 9 CLR 360; [1909] HCA 61 at [364]–[365]. [81,015.115] Frustration of pending appeal as “other sufficient cause” In Commonwealth Bank of Australia v Pattison [2012] FCA 1397; BC201209947, Jessup J was asked to consider whether a plea that a sequestration order was sort for the improper purpose of preventing the respondent from prosecuting and appeal in another court was “sufficient cause” to decline asequestration order. The court considered Williams v Spautz 174 CLR 509; 107 ALR 635; 66 ALJR 585; BC9202694, where Mason CJ and Dawson, Toohey and McHugh JJ stated the principle as: [C]ourt proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which

such proceedings are properly designed and exist; and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualified from invoking the powers of the court by proceedings he has abused. But the judge stated at [46]: “… if the putative plaintiff had a right to bring the proceedings concerned, and did so to derive the outcome conventionally associated with the proceedings, the circumstance that he or she also harboured the desire that such an outcome would bring other benefits, or would deliver other detriments to his or her opponent, would not make the proceedings an abuse of process.” In this case the court was unpersuaded that the raising of a collateral issue was capable on the facts brought forward of setting aside the applicant’s prima facie right to sequestration either because an improper purpose might be concerned or because the bankruptcy might be rendered futile. Futility was rejected on the facts in Sharpe v W H Bailey & Sons Pty Ltd [2013] NSWSC 913; BC201310961 Campbell J at [44] & [45]. See [81,015.95] [81,015.120] Petitioner’s refusal to accept tender of debt as “other sufficient cause”: s 52(2)(b) A petitioning creditor’s refusal to accept a tender of the full amount of the debt, would not amount to “other sufficient cause” within the meaning of s 52(2)(b): McIntosh v Shashoua (1931) 46 CLR 494; International Alpaca Management Pty Ltd v Ensor [1999] FCA 72; BC9900211. See also Re Gentry [1910] 1 KB 825 and Westpac Banking Corp v Faress [2011] FMCA 26; BC201100140. [81,015.121] Giving of an undertaking of payment by solicitor See also [89.760.9A]concerning “last known address”. Concerning undertakings given by solicitors, Raphael FM concluded in Magafas v Carantinos (2008) FLR 185; [2008] FMCA 1654; BC200811160, at [25] that: In considering whether the undertaking was by the plaintiff’s solicitor personally or in his capacity as agent, it may be relevant to consider whether the recipient of the undertaking could reasonably construe the undertaking as having been given personally … I am of the view that this undertaking was requested of and given by the solicitor as agent for the client. As such I have already found it to be a gratuitous gesture of no significance. It cannot reach the height of an ‘other sufficient cause’ under s 52. Thus there is no impediment to my making the sequestration order. [page 237] At [26], the Magistrate noted that the debtor had not alleged insolvency and that the evidence in the case indicated that the debtor was indebted to the partnership whatever his other debts might be. The Magistrate was satisfied that the debtor had committed the act of bankruptcy alleged in the petition and was satisfied with the proof of the other matters required by s 52. [81,015.125] Improper purpose In Rozenbee v Kronhill (1956) 95 CLR 407; [1956] ALR 1004 the High Court (Dixon CJ, Webb and Fullagar JJ) stated by way of dicta: The latest case is In Re Majory [1955] Ch 60. The conclusions to be drawn from the cases are stated in a series of five propositions by Lord Evershed MR for himself, Jenkins LJ and Romer LJ. The case seems finally to establish that the ultimate principle involved is that a court will not allow its process to be abused. There is an abuse of process if a pending bankruptcy petition or a threat of proceedings in bankruptcy is used as a means of extortion. The word “extortion” is not a technical term and it has in bankruptcy law “no special and artificial significance divorced altogether from the ordinary implication of the word”. The court will look strictly at the conduct of

a creditor using or threatening bankruptcy proceedings and extortion may be held to have taken place if the creditor has used or attempted to use a pending petition or threat of a petition in order to extract from the debtor money which the debtor is not bound to pay or in order to obtain some secret or unfair advantage over other creditors. But extortion will not be held to have taken place “in the absence of mala fides or anything amounting to oppression in fact”. There must be a real intention on the part of the creditor to use the process for some other end than its legitimate end, and there must be a real exertion of pressure. For a more recent application of these principles, see Wilcox v Cottrell [2000] FCA 1656; BC200008361. Rozenbes v Kronhill (1956) 95 CLR 407; BC5600410 continues to be relied upon in arguments in this jurisdiction. There have been cases in which parties have attempt to prove “extortion” for at least “improper purpose” but it would seem that the scope available to such pleas is limited in bankruptcy. In GR Finance Ltd v Waldron (No 2) [2010] FMCA 168; BC201001371 the petitioning creditor had made certain concessions to a party collaterally involved in the contract which appeared to reduce the amount owed by the bankrupt. It was sought to argue that this concession appeared to call for relief either because the circumstances were “other sufficient cause” or gave rise to an abuse of process. The court took the view: [23] In this respect, I note that it is well established that a lender is entitled to pursue all remedies for the recovery of moneys owed by a debtor, including remedies in relation to personal indebtedness, realisation of security, or recovery from guarantors, “at any time or times simultaneously or contemporaneously or successively or not at all” (see China and South Sea Bank Ltd v Tan [1990] 1 AC 536 at 545, cited in Re Bank of Credit and Commerce International SA (No 8) [1997] 4 All ER 568 at 572, applied by me in Bakamovic v Investec Bank (Aust) Ltd [2008] FMCA 1513 at [11], and Petratos v Provident Capital Ltd [2009] FMCA 1168 at [25]). In my opinion, the creditor is similarly free to pursue recovery of its losses from a contributory tortfeasor, and it is open to it to arrive at a settlement with that person before exhausting all avenues of recovery from the debtor or other person principally liable. As the present settlement deed illustrates, any such settlement will usually not itself amount to a discharge of the principal debtors, and is likely to be subject to obligations of accounting in the event that later recoveries from the principal debtors occur. This being the case there was no scope for the operation of the exception in Rozenbee. The creditor was entitled to pursue its remedy using the full range available. Since that case there have been attempts to widen the scope of “improper purpose”, usually either through a plea that a sequestration order should be withheld on the ground that it would be futile to issue a notice because to go ahead would be to create an unnecessary bankruptcy: See Radich v Bank of New Zealand (1993) 45 FCR 101 at 123; 116 ALR 676; BC9305003. The difficulty commonly encountered with this contention is that the facts are not available: see Commonwealth Bank of Australia v Pattison [2012] FCA 1397; BC201209947 at [44]. An alternative approach based on Williams v Spautz (1992) 174 CLR 509; 107 ALR 635; 66 ALJR 585; BC9202694, of [page 238] abuse of process has been put forward. In Spautz Mason CJ, Dawson, Toohey and McHugh JJ at 528 endorsed the statement of principle Re Majory [1955] Ch 600 at 623–4: [C]ourt proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which

such proceedings are properly designed and exist; and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualified from invoking the powers of the court by proceedings he has abused. The principle considered in Commonwealth Bank of Australia v Pattison was at 174 CLR at 526–7 of Spautz where their Honours said: “otherwise when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers”. The principle could not be found in Pattison at [50]. [81,015.130] Discretion not to make a sequestration order: Time considerations s 52(2) A debtor who is able to establish the matters set out in s 52(2)(a) of the petition is not entitled to have the petition dismissed as of right; that only enlivens the court’s discretion under s 52(2): Re Sarina; Ex parte Wollondilly Shire Council (1980) 32 ALR 596; 48 FLR 372, referred to in International Alpaca Management Pty Ltd v Ensor [1999] FCA 72; BC9900211. See also Re Dolman; Ex parte Elder Smith Goldsbrough Mort Ltd (1967) 10 FLR 384; Re Svir; Ex parte DCT (1998) 83 FCR 314; 154 ALR 710. In calculating time in applications under this sub-section, the decision of Burchardt FM in Sopikiotis v Owners Corporation RP017740 [2013] FMCA 122; BC201301343 adverts to an important principle. The applicant sought to review the decision of the registrar in making a sequestration order. The matter of service of the bankruptcy notice was raised: it was served on the 18 February 2011 and issued on the 18 August 2011. Regulation 4.02A requires that a notice must be served within “the period of 6 months commencing on the date of issue of the bankruptcy notice”. This, as the Regulation implies, is subject to s 36 of the Acts Interpretation Act as follows: Where in an Act any period of time, dating from a given day, act, or event, is proscribed or allowed for any purpose, the time shall, unless the contrary intention, appears be reckoned exclusive of such day or the day of such act or event. As the Federal Magistrate said at [20]: “The six months in this case commences on a given day, in other words, the day of issue.” [81,015.135] Discretion to make a sequestration order — s 52(2)(b) See [82,390.12]. [81,015.140] Application of “extended principle” in Port of Melbourne Authority v Anshun Pty Ltd In Ashdown v Kirk [1999] FCA 1263; BC9905779, the debtor sought to raise new challenges to the validity of a bankruptcy in circumstances where an application to set aside the bankruptcy notice had failed. Dowsett J expressed the view that the objection of the “extended principle” in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; 36 ALR 3 would have been open to the creditor, but the point was not taken by the debtor. See also Makhoul v Barnes (1995) 60 FCR 572; BC9501563. In Palicave Pty Ltd v O’Farrell [2009] FMCA 9; BC200900442, Driver FM considered a submission that the creditor might be estopped from claiming a debt addition to that sued for. Although the state of the contract and its terms provided the answer His Honour set out the principle at [15]: … A res judicata only applies if it could be said that the earlier judgment is to be taken as determining all claims which might be made by the lender under or in relation to the second loan agreement. Thus no cause of action estoppel or res judicata prevents Palicave from asserting an outstanding debt in these proceedings. The more significant question is whether the wider principle of Anshun estoppel applies in this case. Two recent decisions of this Court have considered the operation of that principle: Capital Finance Australia Pty Ltd v Nathan [2008] [page 239]

FMCA 1363 and RHG Mortgage Corporation Limited v Araya [2008] FMCA 1324. To make out this argument Mr O’Farrell must demonstrate that it was unreasonable for Palicave to sue for the four instalments rather than to maintain a claim for the whole of the loan debt. See Boles v Esanda ibid [(1989) 18 NSWLR 666] at 673C and following; Capital Finance v Nathan ibid at [29] and RHG Mortgage Corporation v Araya at [57]. The latter case approved at [56] those decisions which state that the rule will only apply after there has been a scrupulous analysis of the circumstances of the earlier proceedings so as to properly inform the Court’s assessment of whether the failure to raise the argument or cause of action in the earlier proceedings can be said to have been ‘unreasonable’. [81,015.150] No estoppel as to validity of bankruptcy notice It is open to a debtor to oppose the making of a sequestration order based on a defective bankruptcy notice in circumstances where the debtor did not seek to set the bankruptcy notice aside or if such an application was dismissed by consent. If the bankruptcy notice is held to have been a nullity then there is no act of bankruptcy on which to base the petition: Re Pollard; Ex parte Lensing Management Co Pty Ltd (1991) 33 FCR 284. [81,015.160] Presentation or prosecution of petition for an improper motive See Rozenbee v Kronhill (1956) 95 CLR 407; [1956] ALR 1004 and Reid v Hubbard [2003] FCA 1424; BC200307440. [81,015.170] Adjournment of petition — s 52(3) See [80,770.5]. And see Angus Property & Development Pty Ltd v Dwyer [2007] FMCA 528; BC200702669 at [8]. Sexton v Tagget [2007] FMCA 1438; BC200707031 is a case directly concerned with the subsection. The respondent’s case was partly for adjournment, partly an application opposing the making of the sequestration order for other sufficient reasons under s 52(2). Driver FM applied Ahern v DCT (Qld) (1987) 76 ALR 137 at 148 which provided that the appeal should be of genuine and arguable grounds, and in such event then the court should not proceed to sequester the estate. Where no stay is granted by the Court of Appeal a stay is less likely to be granted, but in the case before him the magistrate chose to grant an adjournment for 21 days, partly to allow for the expiry of a deadline to secure costs in the appeal court, partly to allow for an appeal against the magistrate’s court decision to proceed with the sequestration order. The question on whether or not a second application can be contemplated after an adverse order has been made was considered in Lahood v Bank of Westrern Australia (No 2) [2013] [FCA] 150; BC201300932. In Lahood, a second application was attempted before Perram J, who considered at [3]: “Those considerations required me to assess two matters: First, the prospects of Mr Lahood’s appeal succeeding; and secondly, the question of the balance of convenience.” Furthermore, the judge stated at [14]: The principles to be applied where a fresh application of an interlocutory nature is made have been authoritatively stated by McClelland J in Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44. Generally speaking, a party is not permitted to make fresh interlocutory applications because, in effect, this constitutes a species of abuse of process. [81,015.180] Amendment of petition See [80,770.25]. [81,015.190] Withdrawal of petition See [80,990.80]. [81,015.200] Costs of petitioning creditor See ss 32, 51 and [80,765.15]. [81,015.210] Stay of proceedings under a sequestration order — s 52(3) Kenny J summarised the effects of the rules and the section in Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494; BC201110268:

[23] Rule 36.08 of the Rules confers a broad discretion to order a stay notwithstanding that an appeal shall not operate as a stay of execution or of proceedings under the judgment appealed [page 240] from. In Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65, a Full Court of this court held that the appropriate test for a stay under the equivalent of Rule 36.08 of the current Rules was that set down in Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685, namely, whether the applicant for a stay showed a reason or an appropriate case to warrant the exercise of discretion in his favour. More specifically, with respect to an application for a stay of a sequestration order, the question is whether there is an arguable point on the proposed appeal and whether the balance of convenience favours the granting of a stay: see Freeman at [3]–[4]; Coleman at 303; Beames v Rigby [2002] FCA 806 at [2]; Kellow v Dudzinski [2003] FCA 238 (“Dudzinski”) at [8]; and Shirreff v Beck Legal Pty Ltd [2010] FCA 1407 at [67], (2010) 119 ALD 284 at 293–294 [67]. The test for a stay under s 52(3) of the Act is not materially different. Other useful examples of the exercise of the principle follow. The court does not have power to suspend the operation of a sequestration order (s 37(2)(a): see [80,800.20]); but s 52(3) provides that the court may “stay all proceedings under a sequestration order for a period not exceeding 21 days”. It may be possible to frame an order so as to cause the sequestration order not to be made until the expiry of the period of extension: Re Wardle; Ex parte Widen v Australia and New Zealand Banking Group Ltd (1987) 70 ALR 633; compare Official Trustee in Bankruptcy v Radin [1999] FCA 1467; BC9906911. If the application is made pursuant to O 52 r 17 of the Federal Court Rules, then the court does have the power to stay the operation of a sequestration order pending an appeal against the making of the sequestration order: Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424. See also Coleman v Lazy Days Investments Pty Ltd (1994) 55 FCR 297. In Westpac Banking Corporation v Tsatsoulis [2003] FCA 406; BC200302071 the respondent sought to stay the petition on the ground that the respondent might have an action against former legal advisers. Applying Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 26; 143 ALR 396 at 401–2, Branson J held that it was not in the public interest that debtors should be able to prosecute litigation, and the court needed to have shown to it a solid case that the litigation would be prosecuted and would be successful. Even in such an event, Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403; 37 FLR 341 was authority that the court had a discretion not to adjourn the petition even if a meeting of creditors had passed a special resolution requiring the respondents to execute a deed of assignment or a deed of arrangement under Pt X. In the event the court refused relief on the cited ground but stayed the petition on another ground. In Murdaca v Acounts Control Management Services Pty Ltd [2007] FCA 964; BC200704974 at [2] Branson J also held that the appropriate order to be sought under this subsection was a stay of proceedings under the sequestration order. Accordingly an order staying the sequestration order itself was refused in Cirillo v Consolidated Press Property Pty Ltd [2007] FCAFC 167; BC200709395, applying the former decision. See also de Robillard v Carver (2007) 159 FCR 38; 240 ALR 675; [2007] FCAFC 73; BC200704121 at [125]. [81,015.220] Lapse of petition — s 52(4) The “slip rule” may be used as the basis for extending the life of a petition after it has lapsed: Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385; 133 ALR 206. See [80,770.70]. Nevertheless the “slip” must be that of the court, and not that of the creditor or the creditor’s legal adviser. In a number of cases, the slip occurred at the time the petition was adjourned to a date past the date on which it would otherwise have lapsed, with out the

court addressing the question of its extension. The discretionary considerations that really dominate the use of this subsection in most cases are illustrated by Commonwealth Bank of Australia v A. Boumelhem [2008] FMCA 789; BC200804856. In that case, the court had previously granted an adjournment so that the matter could be heard in the District Court. At issue was the decision of the bank to sell the defendant’s property at other than the best price available. The court held that it was not the responsibility of the bank to obtain the best price then available if it had obtained the market value obtainable at auction. The debtors argued that the District Court was in error. The Federal Magistrate, Raphael FM, considered a number of discretionary matters that carried weight for him, such as the following: 1. The petition had a life of one year, and the time left to deal with the adjourned matter was relevant; [page 241] 2.

3. 4. 5.

In considering an adjournment application, the court should be informed about the financial position of the debtors: in particular whether there are other creditors or whether this one debt would bring about their bankruptcy; Whether there is any time before the expiry of the petition for the matter to be heard; Whether it can be said that there are no prospects of success; The general issues of justice.

[81,015.230] Extension of life of petition — s 52(5) See [80,770.70]. In addition to the above reference, in Commonwealth Bank of Australasia v Maher [2008] FMCA 552; BC200803062 at [11] Hartnett FM said of this subsection: [11] The court must be satisfied that it is just and equitable to extend the life of the petition. The purpose of section 52(5) of the Bankruptcy Act 1966 (Commonwealth) is to prevent stale petitions remaining on foot and to limit the opportunities for parties to obtain indefinite adjournments (Re Young Ex Parte: Smith (1985) 5 FCR 204 at 206–207). If the petition is not extended by 23 March 2008 then it lapses and cannot be extended (Re Norman Kingsley Hibbard Ex Parte: Playroom Pty Ltd (1988) FCA 424 Pincus J at paragraph 3). In Real Estate & Business Agents Supervisory Board (REBA) v Low (No 2) [2009] FMCA 142; BC200901172, Lucev FM decided that a penalty or fine imposed for disciplinary proceedings does not involve punishment for an offence (see at [11]): The court therefore concludes penalties and fines imposed in disciplinary proceedings do not fall within the ordinary meaning of the word ‘offence’, and their exclusion from the application of s 82(3) of the Bankruptcy Act is consistent with the policy of the Bankruptcy Act. The court accepts that the costs component of the SAT Orders is compensatory in nature, rather than in the form of a penalty. Therefore, an application under the sub-section might be dealt with and did not constitute a “formal defect of irregularity”.

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[81,020] Consolidation of proceedings 53 (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. [subs (2) insrt Act 12 of 1980 s 30]

(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. [subs (3) insrt Act 12 of 1980 s 30] [s 53 am Act 121 of 1968 s 4] Section 53 Generally

[81,020.10] General The power of consolidation should be exercised whenever it is in the interests of all parties concerned in the administration of the estates. In Re Lamb; Ex parte Melsom [page 242] [1980] WAR 129; (1980) 29 ALR 157, proceedings were consolidated in circumstances where two persons had been carrying on business in partnership, and one went bankrupt, and the other entered into a deed of arrangement. See also ss 45 and 56A as to partnerships.

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[81,025] Bankrupt’s statement of affairs 54 (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: 25 penalty units. [subs (1) am Act 12 of 1980 s 31; Act 74 of 1981 s 126; Act 119 of 1987 s 18; Act 44 of 1996 s 3 and Schs 1, 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 106 of 2010 s 3 and Sch 3[11], opn 15 July 2010; Act 106 of 2010 s 3 and Sch 2[8], opn 1 Dec 2010]

(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: 5 penalty units. [subs (2) insrt Act 12 of 1980 s 31; am Act 74 of 1981 s 126; Act 119 of 1987 s 18; Act 44 of 1996 s 3 and Schs 1, 2; Act 106 of 2010 s 3 and Sch 3[11], opn 15 July 2010]

(3) Subsections (1) and (2) are offences of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (3) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(3A) [subs (3A) rep Act 44 of 1996 s 3 and Sch 1] (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. [subs (4) am Act 44 of 1996 s 3 and Schs 1, 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(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. [subs (5) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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). [subs (6) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 243] (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. [subs (7) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 54 GENERALLY [81,025.10] General Within 14 days after being notified of the making of a sequestration order, a bankrupt is required to make out and file in the office of the Official Receiver in the relevant District, a statement of his or her affairs and furnish a copy to the trustee. Statements of affairs are also required to be made out in a number of other circumstances: see ss 55(2)(b), 57(2), 56F(1), 185D, 188A, 246(1) and 247(1)). For the approved form of statement of affairs, see Approved Form 3. The failure to file a statement of affairs in accordance with s 54(1) constitutes an offence, carrying a penalty of five penalty units. Filing a statement of affairs in accordance with s 54(1) creates an obligation which must be complied with by the bankrupt and for which no excuses are tolerated. Wilson FM stated in Foyster v Prentice [2008] FMCA 757; BC200804562 at [47]: It is not for the applicant, as bankrupt, to sit back and wait for his trustee to drag information out of him. The applicant was obliged by s 54(1) of the Act to submit a proper and complying Statement of Affairs within 14 days of becoming bankrupt. By s 77 of the Act the bankrupt is required to give assistance to the trustee. In De Robillard v Carver (2007) 159 FCR 38; 240 ALR 675; [2007] FCAFC 73; BC200704121 Buchanan J said at [136]:

Given the penal nature of the obligation created by s 54, it is difficult to see that breach of the section, no matter how inadvertent, could be categorised as merely formal. The policy behind s 54 is clear. The obligation to file a statement of affairs in a public register is intended to make information concerning the bankrupt’s affairs available to creditors and, for that matter, members of the public. The former may inspect without payment of a fee, the latter only on payment of a fee. But it is in the interests of the public in the encouragement of morality in trading that the financial situation of a bankrupt debtor be open to inspection. Because, ordinarily, the administration of the estate and ultimate distribution of dividends from the estate, will be dependent upon the trustee having full details of the trade dealings and debts of a debtor, the statement is to be made available as well to the trustee in bankruptcy. Given the scheme of the legislation and the important role that the statement of affairs plays in it, there is considerable difficulty in seeing that Parliament would have intended that the Court, through s 306, have the ability to treat non-compliance with the statutory obligation as merely formal. [81,025.20] “in the office of the Official Receiver” Prior to December 1996, the statement of affairs was required to be given to the Registrar in Bankruptcy in the District in which the sequestration order was made. Section 54 was amended to substitute the (office of the) Official Receiver for the Registrar in Bankruptcy, as the person with whom the statement of affairs is to be filed. In Tsingaris v Official Receiver for the Bankruptcy District of Victoria [1999] FCA 1389; BC9906543, the bankrupt filed a photocopy of the statement of affairs with his trustee, the Official Trustee, and not with the Registrar in Bankruptcy as the Act then required. However, because of the structure of the Insolvency and Trustee Service, the person who accepted the statement of affairs on behalf of the Official Trustee, was also an employee of the office of Official Receiver. Weinberg J noted that this person was, in effect, wearing two hats at the time the statement of affairs was filed. On this basis, his Honour held that the obligation to file the statement of affairs was complied with on the date on which the legislation was amended to substitute the Official Receiver for the Registrar in Bankruptcy, around 3 months later. See also Trihakis v Official Receiver (Vic) [1999] FCA 1426; BC9906729. [page 244] [81,025.30] Failure to file statement of affairs If the bankrupt fails to file her or his statement of affairs in accordance with s 54, time will not begin to run for the purpose of automatic discharge from bankruptcy. The time limited by the court under s 33(1)(c): Nilant v Machia (1997) 18 FCR 419; 148 ALR 329. See [80,770.75] and [82,163.10]. Where it is sought to persuade the court that the trust shares some responsibility, there is an onus falling on the applicant to establish that there are substantial grounds for believing that the trustee urged in the administration or had engaged in misconduct. See Yates J’s reasons in Ferella v Official Trustee in Bankruptcy (No 2) [2011] FCA 619; BC201103747 at [11]–[20]. See also Pascoe v Erten [2011] NSWSC 769; BC201105384 at [23] and [24]. In Official Receiver v Howard [2007] FMCA 786; BC200708950 at [6] Lucev FM sets out a number of matters that the court should consider before an order pursuant to s 146 should be made, applying Official Trustee in Bankruptcy v Thor [2006] FMCA 1637; BC200609484: [6] … (a) the Respondents’ bankruptcy; (b) the Official Trustee’s attempts to obtain a Statement of Affairs from the Respondents; (c) the Respondents’ being successfully prosecuted under s 267B of the Bankruptcy Act for their respective failures to provide information pursuant to a notice given under s 77C of the Bankruptcy Act; (d) the Respondents’ failure to respond to file a Statement of Affairs;

(e) Respondents’ failure to file Statements of Affairs following their convictions under s 267B of the Bankruptcy Act; (f) the failed attempts to identify creditors of the bankrupt estate other than the petitioning creditor; (g) details of the only known assets of the bankrupt estates; … His Honour said at [8]: [8] That approach has since been followed by this Court in Harrison v Del Santo [2007] FMCA 470 at [8] per Nicholls FM and is, of course, based on the well known decision of the Federal Court in Re Sturt; Ex Parte Official Trustee in Bankruptcy (2001) 117 FCR 1 at 5; [2001] FCA 1649 at [19]. Is a partial failure a “failure” as defined in s 146? Nicols v Geekie [2007] FMCA 1576; BC200708367 examined this question. In that case the argument that a partial failure was “failure” turned on some obiter remarks by Collier J in Wangman v Official Receiver [2006] FCA 202. That case was concerned with the filing of a statement of affairs which was so incomplete that it could not be properly described as a statement of affairs. Collier J found that any omission did not amount to a failure but that the omission had to be substantial enough to trigger the exception. Barnes FM in Nicols v Geekie, above, was not persuaded on the facts, noting at [41] that the purpose of s 146, under which the application was made, was to provide, in the words of Gyles J in Re Shaw; Ex parte Official Trustee in Bankruptcy [1999] FCA 968; BC9904005 at [4], “the court the means of ensuring that the absence of a statement of affairs does not prejudice those with an interest in the bankrupt’s affairs”. In the context of the power of the court to make declarations pursuant to s 30 his Honour adopted the statement of Mason CJ, Dawson, Toohey and Gaudron JJ in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582; 106 ALR 11 at 22 that declaratory relief will not be granted if the question in issue is “‘purely hypothetical’, if relief is ‘claimed in relation to circumstances that have not occurred and might never have’ or ‘if the court’s declaration will produce no foreseeable consequences for the parties’”. See [82,145.5] and [80.750.20].

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DIVISION 2A — DECLARATION OF INTENTION TO PRESENT DEBTOR’S PETITION [Div 2A insrt Act 119 of 1987 s 19]

[81,075] Presentation of declaration 54A (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. [subs (1) am Act 106 of 2010 s 3 and Sch 4[7], opn 1 Dec 2010]

(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. [subs (2) insrt Act 106 of 2010 s 3 and Sch 4[8], opn 1 Dec 2010] [s 54A am Act 44 of 1996 s 3 and Sch 1] SECTION 54A GENERALLY [81,075.5] Generally A debtor commits an act of bankruptcy if he or she presents a declaration under s 54A: s 40(1)(da). For the purposes of this section, the prescribed form of declaration is Approved Form 5.

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[81,080] When debtor disqualified from presenting declaration 54B 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. SECTION 54B GENERALLY

[81,080.5] Abuse of process If the presentation by a debtor of a debtor’s petition amounts to an abuse of process it can properly be said that the petition ought not to have been presented: Clyne v DCT (1984) 154 CLR 589; 55 ALR 143; 58 ALJR 398. The presentation of a debtor’s petition may relevantly amount to an abuse of process when the debtor is not, at the time of the presentation of the debtor’s petition, insolvent in the sense described in Sandell v Porter (1966) 115 CLR 666 at 670, where the debtor reasonably or honestly believes that he or she is insolvent but wrongly forms that belief the presentation of a petition may not amount to an abuse of process: compare Re Betts; Ex parte Official Receiver [1901] 2 KB 39; Re Mottee; Ex parte Mottee v Official Receiver (1977) 16 ALR 129; 29 FLR 406 at 412, 413. Once a creditor’s petition has been presented and served a declaration under s 54A cannot be presented.

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[81,085] Acceptance or rejection of declaration 54C (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. [subs (1) am Act 106 of 2010 s 3 and Sch 4[9], opn 1 Dec 2010]

(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. [subs (2) insrt Act 106 of 2010 s 3 and Sch 4[10], opn 1 Dec 2010] [s 54C am Act 44 of 1996 s 3 and Sch 1]

[81,090] Official Receiver to give information to debtor 54D (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. [subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 1]

[81,095] Enforcement suspended during stay period 54E (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. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(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. SECTION 54E GENERALLY [81,095.5] Meaning of “frozen debt” “Frozen debt” is defined in s 5 as meaning a debt owed by a declared debtor that would, if the debtor became a bankrupt when the declaration of intention was accepted under s 54C, be provable in the bankruptcy. It does not include a debt in respect of the debtor’s liability under a maintenance agreement or maintenance order. Where a sealed copy of the declaration under s 54A is produced to a debtor to whom a frozen debt is owed, the creditor is precluded from taking steps to recover the debt during the “stay period”. “Enforcement process” is also defined in s 5 as meaning the “process of a court issued to enforce in any manner, payment of the judgment debt” or “process of a court for attaching” a “debt or other money payable or owing, or to become payable or owing, to the declared debtor”.

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[81,100] Duties of sheriff 54F (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. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(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. SECTION 54F GENERALLY [81,100.5] “sheriff” For the definition of “sheriff” see s 5.

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[81,105] Duty of court registrar 54G 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.

[s 54G am Act 44 of 1996 s 3 and Sch 1]

[81,110] Duties of person entitled to deduct money owing to declared debtor 54H (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. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(2) The person shall, throughout the remainder of that period: (a) refrain from so retaining or deducting money; and [page 248] (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. [subs (2) am Act 44 of 1996 s 3 and Sch 1]

(3) Nothing in this section affects a person’s liability to pay money to the debtor. (4) [subs (4) rep Act 44 of 1996 s 3 and Sch 1] SECTION 54H GENERALLY [81,110.5] Effect of stay period The stay period prohibits the retention or deduction of moneys by persons entitled under a Commonwealth, state or territory law, with the exception of the operation of s 218 of the Income Tax Assessment Act 1936. Section 218 has the effect upon service of the notice of working an assignment of moneys to be paid to the Commissioner as though the taxpayer concerned had charged the moneys otherwise payable to him or her with payment of his or her tax liability: Clyne v DCT (1981) 150 CLR 1. A s 218 notice

creates a charge over the moneys in favour of the Commissioner: Deputy Commissioner of Taxation v Donnelly (1989) 25 FCR 432; 89 ALR 232; 89 ATC 5071.

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[81,115] Extension of time where this Division prevents the doing of an act 54J 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.

[81,120] Section 33 not to apply to this Division 54K Nothing in section 33 permits the extension or abridgment of a period or time limited by this Division.

[81,125] Secured creditor’s rights under security not affected 54L 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

[81,175] Debtor’s petition 55 (1) Subject to this section, a debtor may present to the Official Receiver a petition against himself or herself. [subs (1) subst Act 119 of 1987 s 20; am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (2) subst Act 119 of 1987 s 20; am Act 44 of 1996 s 3 and Sch 1]

(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 [page 249] (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. [subs (2A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (3) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3AA) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3AB) The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA). [subs (3AB) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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). [subs (3AC) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3A) Before accepting a debtor’s petition the Official Receiver must give

the debtor the information prescribed by the regulations. [subs (3A) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3B) insrt Act 44 of 1996 s 3 and Sch 1]

[page 250] (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. [subs (3C) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (4) subst Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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.

[subs (4A) insrt Act 119 of 1987 s 20; am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (5) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (5A) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (6) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(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. [subs (6A) insrt Act 122 of 1970 s 5;; am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (7) am Act 122 of 1970 s 5; Act 44 of 1996 s 3 and Schs 1, 2]

(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(5) or 153A(1) or under section 153B. [subs (8) am Act 12 of 1980 s 32; Act 143 of 1992 s 3 and Sch; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (9) insrt Act 12 of 1980 s 32; am Act 44 of 1996 s 3 and Schs 1, 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

[page 251] (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. [subs (10) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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). [subs (11) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (11) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 55 GENERALLY [81,175.5] “debtor presents own petition” By force of this section, the debtor becomes bankrupt on presentation of his or her own petition, and there is no need for the court to make a sequestration order: Re Mottee; Ex parte Mottee v Official Receiver (1977) 16 ALR 129 at 135; 29 FLR 406. [81,175.10] Preconditions to the Official Receiver “accepting” a debtor’s petition The Official Receiver must accept a debtor’s petition if the circumstances specified in s 55(4) exist. See Re Agostino; Ex parte Jackson (1983) 78 FLR 142. See Greater Building Society Ltd v Hill [2012] FMCA 431; BC201203589 at [9]. [81,175.15] Prescribed Form For the purposes of s 55(2) a debtor’s petition shall be in accordance with Approved Form 6: r 24(1).

[81,175.40] Debtor’s petition — date of commencement of bankruptcy The bankruptcy of a person who becomes a bankrupt by virtue of the presentation of a debtor’s petition is deemed to have commenced at the time of the presentation of the petition unless he or she has committed an act or acts of bankruptcy. See s 115(2). [81,175.45] Creditor’s petition — when sequestration order cannot be made Where a creditor’s petition has been founded and presented on a debt incurred before the date of presentation by the debtor of his or her own petition, it is not possible to make a sequestration order while the bankruptcy, which resulted from the acceptance of the debtor’s petition, continues to exist. Thus in Clyne v DCT (1984) 154 CLR 589; 55 ALR 143; 58 ALJR 398, the High Court held that in such a situation the court had no power to make a sequestration order based upon the presentation of the creditor’s petition but, in an appropriate case, had power to annul the bankruptcy based upon acceptance of the debtor’s petition. [81,175.50] Presentation of debtor’s petition — abuse of process If the presentation of a debtor’s petition amounts to an abuse of process, the bankruptcy based upon the presentation of that petition can be annulled. It is an abuse of process for a debtor to present a petition so as to make it impossible for a creditor to obtain a sequestration order on a pending petition with the further purpose of shortening the period of relation back, thereby possibly placing beyond the reach of the trustee, property which would otherwise vest in him or her: Clyne v DCT (1984) 154 CLR 589; 55 ALR 143; 58 ALJR 398. By virtue of s 55(3A) the registrar is now bound to refer such a debtor’s petition to a judge for the judge to decide as a matter of discretion to accept or reject. Bankruptcy based upon presentation of a debtor’s petition will not be annulled merely because the debtor’s motive in presenting a petition is to protect the debtor from evils which he or she might otherwise suffer, absent any benevolent intention of benefiting his or her creditors by securing a fair [page 252] distribution of assets among them: Re Dunn; Ex parte Official Receiver v Dunn [1949] Ch 640, Greater Building Society Ltd v Hill [2012] FMCA 431; BC201203589 at [9]. It is insufficient to show merely that the effect of the presentation of the debtor’s petition is to prevent the petitioning creditor succeeding on his or her petition: Re Cornish; Ex parte English (1984) 6 FCR 257; Re Hankey; Ex parte Kratzmann (1986) 11 FCR 512; 66 ALR 702. See also Edelsten v DCT (NSW) (1989) 86 ALR 257. In that case the Full Court also held that the fact the debtor was influenced in presenting his petition by a desire to have a particular person as trustee of his estate who would be “fair” may have been sufficient to constitute an independent ground for regarding that petition as being an abuse of process and thus liable to be annulled or set aside. In Edelsten v DCT (NSW), above, the court called for reform of the section so as to prevent the effective automatic bankruptcy operating from presentation of a debtor’s petition and suggested that where a creditor’s petition is pending at the time of the filing of a debtor’s petition, both petitions should be set down for hearing at the same time thus allowing the presiding judge a discretion whether to seek the sequestration on the basis of the debtor’s petition or the creditor’s petition. See now s 115. In BWK Elders (Australia) Pty Ltd v White [2004] FCA 1611; BC200408493 Finkelstein J, hearing an application to annul bankruptcies the result of the respondent’s petitions, said this at [7]: [7] … By presenting their own petitions, subject to the costs and expenses incurred by their respective trustees in bankruptcy, each bankrupt’s estate will go to his wife as the sole creditor. No part of the estate will be available to discharge the judgment debt obtained by BWK. It is an abuse of process for a debtor to present a petition for the purpose of placing his estate beyond the reach of a person who will imminently become a creditor. The purpose of bankruptcy laws is to secure

an equitable distribution of a bankrupt’s assets among all creditors. True it is that BWK was not a creditor holding a provable debt when the petitions were presented, but the object of the petitioner in each case was to thwart or override the effect of the judgment that was about to be obtained. The bankruptcy laws cannot be used for that purpose. [81,175.55] Powers of attorney — s 55(3A) and (4A)(b) In Orix Australia Corp Ltd v McCormick (2005) 145 FCR 244; 222 ALR 507; [2005] FCA 1032; BC200505464 Graham J had to consider these questions (outlined at [1] of the judgment): (a) Can a debtor become bankrupt by force of s 55(4A)(b) of the Bankruptcy Act 1966 (Cth) (the Act) on a debtor’s petition presented to the official receiver against the debtor by an attorney ostensibly on the debtor’s behalf? (b) Does an enduring power of attorney executed by a debtor in accordance with s 32 of the Powers of Attorney Act 1998 (Qld) extending powers to the donee in respect of financial matters authorise the presentation to the official receiver of a debtor’s petition by the donee against the donor of the power? (c) Can s 55(3A) of the Act be satisfied by the official receiver giving the information prescribed by the regulations (see reg 4.11(1) of the Bankruptcy Regulations 1996 (Cth)) to an attorney of the debtor? (d) What consequences flow from a failure by the official receiver to comply with s 55(3A) of the Act before accepting a debtor’s petition? (e) Can a signed acknowledgment that a debtor has received and read the prescribed information mentioned in reg 4.11(1) be given by an attorney on behalf of a debtor (see reg 4.11(3); see also reg 4.11(5))? (f) What consequences flow if the official receiver purports to accept a debtor’s petition under s 55(4A) of the Act in circumstances where to do so would involve a contravention of reg 4.11(3) of the Bankruptcy Regulations? (g) If a debtor’s petition has been wrongly accepted by the official receiver, should the court review that acceptance in accordance with s 15(5) of the Act? (h) If a debtor’s petition ought not to have been presented or ought not to have been accepted by the official receiver, should the court make an order under s 153B of the Act annulling the bankruptcy? [page 253] His Honour answered these questions as follows (at [2]): (a) No. (b) No. (c) No. (d) and (f) It would render any purported acceptance of the petition by the official receiver null and void (e) Subject to what appears below in respect of reg 4.11(5), no. (g) Yes. (h) In the circumstances of this case, yes. His Honour considered every step in the application in a judgment helpful to readers with similar tasks. His Honour put the central question at [60]: [60] Whether the power to present a debtor’s petition against a debtor can be lawfully delegated to

an attorney depends upon whether the language of the Act, the regulations made thereunder, the approved forms and/or the relevant subject matter requires that the signature on the petition be the personal signature of the debtor. His conclusion is substantially at [83]: [83] For the reasons indicated above I am of the opinion that a signed acknowledgment that a debtor has received and read the prescribed information mentioned in reg 4.11(1) cannot be given by an attorney on behalf of a debtor. Furthermore, I am of the opinion that, having regard to the terms of the constraint imposed by reg 4.11(3) of the regulations, any purported acceptance by the official receiver of a debtor’s petition under s 55(4A) of the Act would be invalid in circumstances where such acceptance would involve a contravention of reg 4.11(3). The limited circumstances in which under the regulations a person other than the debtor may sign the requisite acknowledgement under reg 4.11(3) are clearly identified in reg 4.11(5) and such circumstances do not apply in the present case.

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[81,180] Debtor’s petition against partnership 56 [s 56 rep Act 44 of 1996 s 3 and Sch 1]

[81,180A] Persons who may present a debtor’s petition against a partnership 56A (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.

[subs (3) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(4) [subs (4) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] (5) [subs (5) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [page 254] (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. [s 56A insrt Act 44 of 1996 s 3 and Sch 1]

[81,180B] Presentation of a debtor’s petition against a partnership 56B (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. [s 56B insrt Act 44 of 1996 s 3 and Sch 1]

[81,180C] Referral to the Court of a debtor’s petition against a partnership 56C (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 [page 255]

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. [s 56C insrt Act 44 of 1996 s 3 and Sch 1]

[81,180D] Acceptance of a debtor’s petition against a partnership by the Official Receiver 56D (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. [s 56D insrt Act 44 of 1996 s 3 and Sch 1]

[81,180E] Effects of acceptance of a debtor’s petition against a partnership 56E (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(5) or 153A(1) or under section 153B. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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 [page 256] (b) give the trustee a copy of each statement of affairs that accompanied the debtor’s petition. [s 56E insrt Act 44 of 1996 s 3 and Sch 1]

[81,180F] Extra duties of non-petitioning partners who become bankrupts 56F (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: 25 penalty units. [subs (1) am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 106 of 2010 s 3 and Sch 2[9], opn 1 Dec 2010]

(1A) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (1A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(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). [subs (1B) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(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. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 56F insrt Act 44 of 1996 s 3 and Sch 1]

[81,180G] Inspection of statements of affairs of partners and partnerships 56G (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. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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). [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(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 [page 257] (b) obtain a copy of, or make extracts from, any statement of affairs that accompanied the petition. [subs (3) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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). [subs (4) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (5) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 56G insrt Act 44 of 1996 s 3 and Sch 1]

[81,185] Debtor’s petition by joint debtors who are not partners 57 (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. [subs (1) am Act 115 of 1990 s 12; Act 44 of 1996 s 3 and Sch 1]

(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. [subs (2) am Act 119 of 1987 s 22; Act 44 of 1996 s 3 and Sch 1]

(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. [subs (2A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (3) subst Act 44 of 1996 s 3 and Sch 1]

(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; [page 258] (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. [subs (3AA) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3AB) The Official Receiver is not required to consider in each case whether there is a discretion to reject under subsection (3AA). [subs (3AB) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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). [subs (3AC) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3A) Before accepting a debtor’s petition against joint debtors, the Official Receiver must give each petitioning debtor the information prescribed by the regulations. [subs (3A) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3B) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3C) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (4) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (5) subst Act 119 of 1987 s 22; am Act 44 of 1996 s 3 and Sch 1]

[page 259] (5A) [subs (5A) rep Act 21 of 1985 s 19] (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. [subs (6) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (6A) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (7) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(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. [subs (9) am Act 44 of 1996 s 3 and Sch 1]

(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(5) or 153A(1) or under section 153B. [subs (10) am Act 143 of 1992 s 3 and Sch; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (11) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(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. [subs (12) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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). [subs (13) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 260] (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. [subs (14) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 57 insrt Act 12 of 1980 s 33; am Act 44 of 1996 s 3 and Schs 1, 2]

[81,190] Time at which person becomes bankrupt on debtor’s petition 57A 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. [s 57A insrt Act 12 of 1980 s 33; am Act 44 of 1996 s 3 and Sch 1]

DIVISION 4 — EFFECT OF BANKRUPTCY ON PROPERTY AND PROCEEDINGS

[81,240] Vesting of property upon bankruptcy —

general rule 58 (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. [subs (1) am Act 12 of 1980 s 34; Act 74 of 1981 s 130; Act 34 of 2006 s 3 and Sch 4[5], [6], opn 3 May 2006]

(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. [subs (2) am Act 12 of 1980 s 34]

(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. [page 261] (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. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (5A) insrt Act 12 of 1980 s 34; am Act 73 of 1987 s 6; Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

(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. [subs (6) am Act 12 of 1980 s 34] SECTION 58 GENERALLY [81,240.5] “property of the bankrupt” Section 58 is concerned with vesting the “property of the bankrupt”, and any after-acquired “property of the bankrupt”, in the trustee. The phrase “property of the bankrupt” is defined in s 5 to include property divisible among the bankrupt’s creditors and any rights in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt. One must then refer to s 116(1) for the definition of “property divisible amongst

creditors”, the definition of which is limited by the factors listed in s 116(2). [81,240.7] Choses in action A chose in action to compel the due administration of a deceased estate is property of the bankrupt for the purpose of s 58. After the chose in action vests in the trustee, he or she will have the right to enforce it and to receive the proceeds after the administration is complete: Official Receiver v Schultz (1990) 170 CLR 306; 96 ALR 327; Re Pevsner; Ex parte Official Trustee in Bankruptcy (1983) 68 FLR 254. Quaere whether the right to prerogative relief is property of the bankrupt within s 58: see Madden v Madden (1996) 136 ALR 98. Apart from the two cases mentioned above, the Western Australian case of Bride v Peat Marwick Mitchell [1989] WAR 383, decision of a Full Court consisting of Malcolm CJ with whom Wallace and Brinsden JJ agreed is frequently referred to as setting out the legal basis and principles of this and the following section: Under s 58(1) of the Act ‘the property of the bankrupt, not being after-acquired property, vests forthwith’ in the trustee and ‘after-acquired property of the bankrupt vests, as soon as it is acquired’. By s 5 ‘property’ is defined to mean (inter alia) ‘personal property of every description’ which would include any chose in action or damages for a tort to which the bankrupt was entitled. The expression ‘the property of the bankrupt’ is relevantly defined by s 5 to mean: ‘(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…’ The property which is divisible among the bankrupt’s creditors is that referred to in s 116(1) to which reference has already been made. Clearly, such property would include the benefit of any chose in action, including an action for damages for tort. The effect of the statutory provisions [page 262] is that there is a notional assignment of the chose in action which vests it in the trustee in bankruptcy: Starke J G, Assignment of Choses in Action in Australia (1972) para 105. And at p 393: In my opinion, it is clear beyond doubt that any chose in action for damages reflecting any diminution of the appellant’s bankrupt estate in respect of the cause of action the subject of the appellant’s allegations against the respondents vested in the trustee in bankruptcy pursuant to s 58. In my view, such chose in action remained vested in the trustee, notwithstanding the appellant’s subsequent discharge from bankruptcy by an order made on 24 February 1986 pursuant to s 150 of the Act. Thus, s 152(1) of the Act provides that: ‘A discharged bankrupt shall, notwithstanding his discharge, give such assistance as the trustee reasonably requires in the realisation and distribution of such of his property as is vested in the trustee.’ Under s 150 it is possible, for example, for a bankrupt to obtain an order of discharge at any time after his public examination has been concluded or after the expiration of a period of 12 months from the commencement of the bankruptcy. Clearly the administration of the bankrupt’s estate

may well continue for some time after discharge. Hence, property vested in the trustee continues to be so vested even after discharge: Pegler v Dale [1975] 1 NSWLR 265; (1975) 6 ALR 62; (1975) 24 FLR 401 and Piwinski v Corporate Trustees of the Diocese of Armidale [1977] 1 NSWLR 266. It follows that any chose in action which the appellants had against the respondents before they became bankrupt or to which they became entitled after they became bankrupt vested in and remained with the trustee notwithstanding their discharge. For this reason they would have no standing to sue the respondents. In Bride v Australian Bank Ltd and Stewart (unreported; Federal Court, French J, 26 July 1988), it was held that a claim by the appellants against the bank and Stewart for damages for conspiracy and false, misleading and deceptive conduct and a claim to set aside the sale of the business of Oatmilling of Katanning was a chose in action which had vested in the trustee and remained so vested, notwithstanding discharge. The claim for damages in that case was based upon similar allegations to those made by the appellants in the present case. The decision of French J was affirmed by the Full Court of the Federal Court in Bride v Australian Bank and Stewart (unreported, Federal Court, Beaumont, Burchett and Lee JJ, 5 December 1988). Thus, both at first instance and on appeal the Federal Court reached the same conclusion on the standing point. Judge Macknay of the WA District Court in Yap v Bailiff [2006] WADC 119 applied this case but also Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47; 157 ALR 83; BC9803639. Judge Macknay concluded at [47]–[49]: In that regard there would appear no prospect of any revival, the Official Trustee having elected not to proceed with it, and the plaintiff not having any apparent prospect of obtaining an annulment of her bankruptcy … In those circumstances, and although a further action by the plaintiff would be likely to be statute-barred through the effluxion of time, there would seem no point in preserving the action, as the plaintiff will not be able to resume the conduct of it, and presently has no standing, and I consider the action ought therefore be dismissed. Evidence As pointed out above, the timing of a chose in action is important. Also, it should be noted that the existence or otherwise, much less the legal effect, of a chose in action is determined frequently by the existence of a stamp. Arnautovic & Sutherland t/as Jirsch Sutherland & Co v Cvitanovic (as Trustee of Bankrupt Estate of Rosee) [2011] FCA 809; BC201105460, a decision of Katzmann J, deals with the failure to stamp evidentiary documents and whether an unstamped document is capable of creating a chose in action. All states have generally accepted the law cited by the learned judge which begins with Electricity Meter Manufacturing Co Ltd v Manufacturers’ Products Pty Ltd (1930) 30 SR (NSW) 422; 47 WN (NSW) 182 at 430 where Street CJ (with whom Ferguson and James JJ agreed) held [page 263] that, unless and until an instrument is stamped it will not be recognised in any court as an effective instrument; but once it is stamped, “even after [the] action brought, it is as efficacious between the parties to it as if it had been duly stamped when executed”. Dixon J, with whom the other members of the Court agreed, approved this principle in Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359; [1931] ALR 194; (1931) 5 ALJR 109b; BC3100017 (“Shepherd”) and said (at 383) that: [W]hen by due stamping [an instrument] had become pleadable, receivable in evidence and admissible as good, useful and available, then its validity and operation as from the beginning were to be construed as unaffected by the enactment.

Katzmann J summarized at [42]: [42] In Official Trustee v D’Jamirze (1999) 48 NSWLR 416 (“D’Jamirze”) at 426–427 Hodgson CJ in Eq discussed the decision in Shepherd and explained: Plainly, this means that an unstamped instrument is not of absolutely no effect until stamped … Until stamped, an instrument has whatever effect is consistent with the proposition that, if stamped, it will be fully effective ab initio. To put this another way, Shepherd must mean that an instrument is effective from the start, conditionally upon being stamped before relied on in court, or alternatively, from the start carries the potentiality of being so effective. And [45]: [45] The authors of Hill’s Duties Legislation express a tentative view on the question, stating: Where an instrument liable to duty is not duly stamped, the normal sanction for failing to do so is the unenforceability of that instrument by virtue of it not being allowed to be given in evidence. That sanction is now to be found in s 304 of the Act. However, the general provisions of that section would give way to the specific provisions of s 211 in the event of an inconsistency. In one sense there is no inconsistency, since s 211 of this Chapter is specifically concerned with unenforceability, whereas s 304 may only be concerned with matters of evidence. The relationship between them is not clear, especially as s 304 permits undertakings to be given to permit an instrument to be given into evidence, whereas s 211, arguably, might still operate to require unenforceability [citing Neoform and Boral Recycling]. But in McCallum (aka Hain) v National Australia Bank Ltd [2000] NSWCA 218; BC200004868 Heydon JA, with whom Sheller and Fitzgerald JJA agreed, said: [17] It is necessary to examine the language of the statute rather than the language of the Minister. It does not point clearly to the construction for which the appellant contends. Further, it must be construed against the background of what has been said authoritatively about similar legislative language. A striking feature of s 84(4) is its use of the word “unless”. An essential aspect of Dixon J’s reasoning in Shepherd v Felt and Textiles of Australia Ltd is the construction it gave to the word “unless”. Dixon J treated that word as pointing to the consequence that late payment of duty would bring about a retroactively validating effect under s 29. The officers responsible for drafting s 84(4) must be presumed to have been aware of Dixon J’s approach to the word “unless” in s 29 — an approach which has been relied on in later authority, eg In re Dehy Fodders (Australia) Pty Ltd; Winter v The Bank of Adelaide (1973) 4 SASR 538 at 544 per Bray CJ and 556 per Walters J. The officers responsible for drafting s 84(4) must also be presumed to have been aware of Dixon J’s analysis of former stamp duty legislation and of the authorities on it which favour the view that stamping retrospectively validates conduct undertaken before stamping. If the parliament had intended to avoid in s 84(4) in relation to up stamping the consequence which Dixon J attributed to s 29 in relation to initial stamping, one would expect it not to have used the expression “unless”, but rather to have used language excluding the possibility of retroactive operation. The use of “unless” in s 84(4) in the light of the construction given to it by the High Court when it appeared in s 29 points against the validity of the appellant’s argument. [18] The appellant’s arguments would produce curious results. Once up stamped, mortgages in the position of the Mortgage in this case would have full validity, and would be admissible in [page 264]

evidence, but would be wholly unenforceable to the extent that any act of enforcement preceded the date of up stamping, and would be unenforced until some fresh step was taken to enforce them. The anomalous position of up stamped loan securities might produce considerable practical inconvenience in some circumstances. These consequences would have to be endured if statutory language compelled them, but one would look for clear statutory language before lightly arriving at them. [19] In short, the appellant’s arguments must be rejected because they find no clear support either in s 84(4) or in the Second Reading Speech; because if they were correct one would expect, in the light of prior authority, different language from that which was employed; and because if they were sound they are capable of producing inconvenient results which one would expect to be produced only by clear words. The test is set out: [11] Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260 — An agreement to lodge a caveat does not necessarily create a charge and pursuant to section 211 of the Duties Act a mortgage is unenforceable to the extent that duty has not been paid and this goes beyond section 304 of the Duties Act which states that provides that [sic] an instrument cannot be allowed into evidence unless duly stamped or an undertaking is given. (J’s emphasis) Katzmann J took the view that it would not be fair and just to receive the new evidence of stamping and the court declined to do so. [81,240.10] Title of trustee The trustee in bankruptcy takes the property of the bankrupt subject to “equity” and derives no better title than that of the bankrupt: Re Clark; Ex parte Beardmore (1894) 2 QB 393. If, before bankruptcy, a bankrupt has contracted to sell or mortgage his or her property, the trustee in bankruptcy takes the vendor’s property subject to the obligation to fulfil the contract, and on the basis that the estate in the property vests in the trustee subject to the equitable title of the purchaser to have the estate conveyed to him or her on payment of the purchase price: Pearce v Bastable’s Trustee in Bankruptcy (1901) 2 Ch 122 at 125; Sonenco (No 77) Pty Ltd v Silvia (1989) 24 FCR 105; 89 ALR 437. Lofthouse v Baxter (No 2) [2007] FMCA 1481; BC200707593 concerned declaratory proceedings to establish the title of a trustee to sell the land of a bankrupt. The major question dealt with was whether, following the High Court’s judgment in Corin v Patton (1990) 169 CLR 540; 92 ALR 1; BC9002936, the gift was perfected on the principles set forth in that case. There had been no claims by the alleged beneficiaries under the evidencing document. The court held, following Arthur v Public Trustee (1988) 90 FLR 203, that equity will only enforce a trust to the extent that the intention to create the trust is clear. The court was not satisfied that this was so. This authority exhaustively considers the authorities relevant to the equivocal creation of trusts and the consideration that should be weighed. [81,240.11] In what circumstances is trustee estopped? The leading case is O’Brian v Sheahan [2002] FCA 1292; BC200206238. In that case, the bankrupts were told that if they continued to maintain the property, pay the mortgage, rates and taxes they could retain their equity. Carr J considered that in advising the applicants to obtain valuations to assist the trustee in deciding whether to sell the property, it was incumbent on the trustee, within a reasonable time, to make a decision and inform the applicants whether they were going to take any steps to realise the property for the benefit of creditors and, if not, to inform the applicants what other course they intended to take. By not doing so for over 4 years, Carr J found that the trustee had represented that they did not propose to assert any

entitlement to any net proceeds from the realisation of the property. In Rankin v Official Trustee in Bankruptcy (2005) 220 ALR 723; [2005] FCA 1084; BC200505580 at [44] (Rankin) Heerey J said: [44] In rejecting the application for special leave in Sheahan v O Brien [2003] HCATrans 308 Gummow and Hayne JJ made it clear that the decision of the Federal Court the subject of the [page 265] application should not be understood as establishing that the law relating to estoppel was generally applicable in the administration of bankrupt estates. In Rankin, above, Heerey J stated that to give rise to an estoppel, any representation must be clear and unequivocal. His Honour rejected that there was any such representation on the evidence before him. In Dixon v Riquero [2004] FMCA 173; BC200401473 Raphael FM rejected a similar plea on the facts. In Official Trustee in Bankruptcy v Frederiksen [2007] FMCA 1915; BC200710153 at [24] Wilson FM, without deciding whether equitable principles apply, whether generally of by way of s 178 which requires the court to grant such relief as is just and equitable nonetheless held: [24] … There may well be room for the application of equitable principles to the administration of an estate in bankruptcy, whether by way of s 178 or more generally. After considering all the authorities cited above, his Honour concluded at [44]: [44] As the above cases to which I have referred make clear, if the trustee is to be estopped from relying upon his legal right to the property of the bankrupt, there must be a clear and unequivocal representation (either express or by conduct, including silence) that is relied on by the bankrupt to his detriment. That did not occur in the present case. … [81,240.12] Right of a bankrupt to appeal against a judgment creating or evidencing a provable debt Leave Section 58(3)(b) provides that, except as otherwise provided under the statute, it is not competent for a creditor to commence any proceedings against a bankrupt in respect of approval date, except with the leave of the court having jurisdiction under the statute. Under Singh v Official Trustee in Bankruptcy (2007) 5 ABC(NS) 607; [2007] FMCA 1367; BC200707872 leave may be granted with retrospective effect. See Secure Parking (WA) Pty Ltd v Francis [2010] FMCA 191; BC201001844. Substantial relief In Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1; 70 ALJR 616; BC9602501 (Claremont Petroleum), the High Court reviewed the authorities touching on the question whether a right to appeal a judgment remains personal property of a bankrupt not capable of vesting in the trustee of his or her estate, or vests and can only be pursued by the trustee. By majority, the court held that a bankrupt’s right to appeal a judgment in an action brought against him or her to enforce a liability is not “property” within the meaning of that term as used in s 58(1) of the Bankruptcy Act. Of particular interest are the majority’s obiter comments that a trustee has power by virtue of s 134(1)(j) to appeal a judgment against a bankrupt that “affects the administration of the estate”, and that the court has a discretion under s 178 to review a trustee’s decision to refuse to appeal in such a case. Interestingly, before the decision of the High Court, a Full Court of the Federal Court had cast doubt on the majority reasoning in Fuller v Beach Petroleum NL (1993) 43 FCR 60; 117 ALR 235: see Griffiths v Civil Aviation Authority (1996) 67 FCR 301; 137 ALR 521; 41 ALD 50; BC9602152. The former authorities have been considered by the Full Court of the Federal Court in Bagshaw v Scott (2002) 126 FCR 27; [2002] FCAFC 362; BC200207339, which concluded that in so

far as the appeal concerned a judgment which creates a provable debt the bankrupt had no financial interest that conferred locus standi to appeal in his own name, and which may be considered definitive but leaves the discretion under s 178 to be definitively dealt with later. Gertig v Davies (2003) 85 SASR 226; 226 LSJS 350; [2003] SASC 86; BC200301269 concerned an application by the appellant that costs payable to the appellant by the first respondent be set off against damages payable to the first respondent by the appellant. That respondent had become bankrupt after the application. The court had to consider whether s 58(3)(a) or (b) precluded such an order. The problem was explained as follows: If Mr Gertig’s claim is successful, Mr Davies’ award of damages for personal injuries will certainly be reduced and probably will be eliminated. An asset which Parliament has seen fit to withhold from the creditors will be diminished or lost. The asset will go in reduction of a provable claim by a creditor. It was held that damages were not protected property except to the extent that they are not divisible among creditors, and, to the extent that the applicant was rendered better off than other creditors, [page 266] that was not achieved at the other creditors’ expenses. Indeed the applicant’s claim conferred a benefit upon them for the applicant would no longer have a claim to a share in the assets held by the trustee. As to s 58(3)(b), the proceedings were not “a legal proceeding” but, rather, a step in an existing proceeding which had been commenced before the respondent became bankrupt. Bagshaw v Scott, above concerned a claim directed to land which trustees in bankruptcy held subject to s 58(1) of the Act, which meant that the land was held by a then-bankrupt until transmission of title. The principles set out by the Full Court at [25]–[35] were as follows: [25] In Cummings v Claremont Petroleum NL (1996) 185 CLR 124 the High Court dealt with the entitlement of a bankrupt to appeal against a judgment creating or evidencing a provable debt. A majority of the Full Court of the Federal Court (Gummow and Whitlam JJ) held that the right to appeal fell within the phrase “personal property of every description” within the meaning of “property” in subs 5(1) of the Act, and so for the purposes of subs 58(1) of the Act. In the High Court, Dawson and Toohey JJ were of the same view: Cummings, above at 146. Brennan CJ, Gaudron J and McHugh J disagreed with the proposition that the right to appeal in respect of the judgment was “property” for the purposes of subs 58(1). [26] Important to that disagreement was the identification of the subject matter of the appeal. Their Honours drew a clear distinction between an appeal relating to property that became vested in the trustee and an appeal relating to a claim by the bankrupt for money or property that would, on recovery, vest in the trustee, on the one hand, and an appeal against a money judgment entered in an action against the bankrupt, on the other hand: see Cummings, above at 134. The distinction was relevant in the analysis as to whether the right of appeal of the bankrupt vested in the trustee as property envisaged by subs 58(1). Their Honours were of the view that a right to appeal against a judgment merely creating a liability in the bankrupt was not “property”, nor did it answer the description of property divisible among creditors defined by para 116(1)(b): Cummings, above at 133. [27] However, their Honours seemed to accept that rights of appeal of the former kind did vest in the trustee. In this context their Honours examined the Court of Appeal decision of Boaler v Power [1910] 2 KB 229 which had been used by Adam J in WR Henry & Son v Hodge [1963] VR

111 at 112 as authority for a general proposition that any right to appeal a judgment was property divested from the bankrupt and vested in the trustee. In Boaler v Power, above at 252–3, Farwell LJ (with whom Kennedy LJ agreed) said: It is open to the Court in Bankruptcy, if it thinks fit, to allow the debtor to contest in the Bankruptcy Court the validity of the petitioning creditor’s judgment on the ground of fraud, collusion, or for any other sufficient reason: In re Flatau (1888) 22 QBD 83. But this is the only way in which the bankrupt can contest it: the adjudication, while it stands, is conclusively binding on him: he cannot contest it in any other Court on the ground of fraud or on any other ground. The right to continue these three actions is a chose in action vested in the trustee, and the bankrupt has no locus standi: see Motion v Moojen (1872) LR 14 Eq 202; Rochfort v Battersby (1849) 2 HLC 388 [9 ER 1139]; Metropolitan Bank Ltd v Pooley (1885) 10 App Cas 210. [28] An examination of the cases referred to by Farwell LJ: Motion v Moojen (1872) LR 14 Eq 202, Rochfort v Battersby (1849) 2 HLC 388; 9 ER 1139, and Metropolitan Bank Ltd v Pooley (1885) 10 App Cas 210, reveals that none had been concerned with an appeal against a judgment in personam, simply creating a liability in the bankrupt. Their Honours examined these cases in the following way. Motion, above, concerned a bankrupt who filed a bill of Chancery impugning an order approving a sale of part of the bankrupt’s interest in a partnership. Rochfort, above, involved a dispute between the mortgagees of certain property and the assignees in bankruptcy as to priority in respect of the mortgaged assets. Thus each of these two cases dealt with the right to bring proceedings which, if successful, would enhance the property which had formerly belonged to the bankrupt, but was then vested in the trustee. In Metropolitan Bank, above, the bankrupt instituted proceedings claiming damages against a defendant who, the bankrupt

[page 267] claimed, had tortiously maintained the proceedings which led to his bankruptcy. The damages, if awarded, would have fallen into his estate. Boaler, above, was itself a case in which the bankrupt was seeking to impeach judgments in actions brought to enforce proprietary rights which, if they existed, vested in the trustee. In this context their Honours said at 134: If the postulated appeal relates to property that became vested in the trustee on the bankruptcy, or if the postulated appeal relates to a claim by the bankrupt for money or property that would be vested on recovery in the trustee, the right to appeal is vested in the trustee, as the cases cited by Farwell LJ illustrate. But it does not follow that a right to appeal against a money judgment entered in an action against a bankrupt is property of the bankrupt and, on that account, vested in the trustee. [emphasis added] [29] After discussing the four cases to which we have just referred in the terms we have used, their Honours said the following, at 135–6: None of the three cases cited in Boaler v Power related to litigation in which judgment has been sought or entered against a bankrupt. Boaler v Power itself was a case in which the bankrupt was seeking to impeach judgments in actions brought to enforce proprietary rights which, if they existed, were vested in the trustee. Neither Boaler v Power nor the cases cited establish the affirmative proposition that a right to appeal is property. They do establish the negative proposition that a bankrupt has no right to bring or prosecute proceedings to protect, enhance or add to the property of which he has been divested on bankruptcy (see Rochfort v Battersby (1849) 2 HLC 388 at 406, 409 [9 ER 1139 at 1146, 1147] and Heath v Tang [1993] 1 WLR 1421; [1993] 4 All ER 694, referred to below). WR Henry & Son v Hodge was wrongly decided. If Boaler v Power were taken as authority for the proposition that a right to appeal in an action brought to enforce a liability of the defendant is property of the defendant, it too would be wrongly decided. But Boaler v Power is explicable as a case relating to proceedings brought by a bankrupt to protect or enforce rights in or to property vested in his trustee. But that is not the present case. The appellants, believing that they had to escape from the proposition that the right to appeal in the present case was property, contended that that “property” was not vested in their trustee but was analogous to those rights of action which do not pass to a trustee on bankruptcy because they are personal to the bankrupt and do not affect the quantum of the bankrupt estate (Beckham v Drake (1849) 2 HLC 579 at 627 [9 ER 1213 at 1230]; Rose v Buckett [1901] 2 KB 449 at 454; Davies v English, Scottish & Australian Bank Ltd (1934) 7 ABC 210 at 214; Coffey v Bennett [1961] VR 264 at 266). As the right to appeal in this case was not “property” within the meaning of that term in s 58(1), the appellants’ submissions miss the point. [emphasis added] [30] It is unnecessary to discuss what might be seen to be the tension between what their Honours said at 134 … and at 135 … The former may be seen as approval of the proposition that, in the case of the rights to appeal there postulated, the right to appeal is vested (as property) in the trustee. The latter may be seen as a drawing back from the proposition that even such postulated rights to appeal are property. Even so, the passages at 135–6 make clear that Boaler v Power, above, and the other cases referred to establish the negative proposition that a bankrupt has no right to bring or prosecute proceedings to protect, enhance or add to the property of which he or she was divested on bankruptcy.

[31] Their Honours went on to decide the case, reaching the same result as Dawson and Toohey JJ and the majority of the Full Court, but on the basis that so far as the appeal concerned a judgment which creates a provable debt, the bankrupt has no financial interest which would confer locus standi to appeal in his own name. Their Honours said at 137–8: So far as a judgment entered in an action against a bankrupt creates or evidences a provable debt, we respectfully agree that the bankrupt has no financial interest which would confer locus standi to appeal in his own name against the judgment. That is because it is fundamental to the law of bankruptcy that the bankrupt is divested of both his interest in his property and liability for his provable debts (Heath v Tang [1993] 1 WLR 1421 at 1427; [page 268] [1993] 4 All ER 694 at 701. It was not suggested in argument that, pursuant to s 153, the discharge of the appellants from bankruptcy would not release them from liability for the judgment debt, albeit there has been a finding of fraud. On that footing, the appellants have no financial interest in the judgment entered against them). Of course, a money judgment entered against a bankrupt has the effect of increasing the amount of the debts provable in his estate. But it is immaterial that, if an appeal against the judgment were successful, there would or might be a surplus in the estate after the remaining creditors are paid. A bankrupt’s contingent interest in a surplus does not give him an interest which would allow him to sue to enforce proprietary rights (Rochfort v Battersby (1849) 2 HLC 388 at 408, 409 [9 ER 1139 at 1147]) and, that being so, it cannot give him an interest to appeal to minimise liabilities. [32] In the light of their Honours’ consideration of the authorities referred to earlier in their reasons … such a conclusion applies a fortiori to an appeal concerning the status of property vested in the trustee, as charged or not. To the extent that the appeal is from an order which directs the taking of accounts to assess the liability of the bankrupt to be satisfied out of the property the subject of the charge, the order bears some characteristics of relating to the property and some characteristics of creating a debt. Thus, this part of the orders of the primary judge is also covered by the reasoning in Cummings, above. [33] In McCallum v Commissioner of Taxation (1997) 75 FCR 458 at 474, Lehane J (with whom Whitlam J agreed) in speaking of a right to challenge in the Administrative Appeals Tribunal (AAT) a decision of the Commissioner of Taxation to disallow an objection said: The majority decision in Cummings makes it clear that the trustee in bankruptcy does not become entitled to a right of appeal which the bankrupt has, as property of the bankrupt. Nor does the Bankruptcy Act confer on the trustee a general, or any relevant special, agency for the bankrupt. The trustee was held to have the right, which (but for the Bankruptcy Act) was a right of the bankrupt only, to appeal against a judgment for debt because the appeal was a proceeding relating to the administration of the estate and para 134(1)(j) authorised the trustee to bring or institute it. Once that is seen, it is evident, in my view, that the way in which the Assessment Act and the Administration Act limit the rights of objection, review and appeal are not to be regarded as precluding the exercise of those rights by the trustee in bankruptcy of a bankrupt taxpayer. That being so, in my opinion it should be held, consistently with Cummings, that in this case the Official Trustee has standing to apply for a review of the objection decision.

[34] The right to “appeal” to the AAT in McCallum, above, was closely analogous to the right to appeal in Cummings, above. Each was in respect of something (a decision and a judgment, respectively) which created a liability in the bankrupt in the nature of a provable debt. We do not read McCallum, above, as stating any principle concerning appeals which concern judgments or orders relating to property which had vested in the trustee. [35] In Guirguis v Guirguis (1997) 137 FLR 130 the Full Court of the Family Court of Australia dealt with the question of the right of a husband to appeal against property orders made by a judge of the Family Court of Australia. The court dealt with the matter on the basis of the absence of locus standi. As we read the decision, the court concluded that the reasons of Brennan CJ, Gaudron J and McHugh J are authority for the proposition that no right to appeal is property vested in the trustee, and that even where the appeal concerns property vested in the trustee, the only basis for the decision that the appeal cannot be brought is a lack of locus standi. With respect, it is not clear to us that Brennan CJ, Gaudron J and McHugh J went that far, except in relation to appeals in respect of orders merely creating provable debts in the estate. While their Honours may have drawn back from stating that appeals concerning orders affecting property, or dealing with money claims by the bankrupt, were “property”, their Honours did state (at 135) with some clarity “the negative proposition” referred to … above. [emphasis added] The court ruled that “whichever is the correct analytical foundation”, the Bagshaws were not entitled to bring the appeal. [page 269] Note that this issue and Cummings were considered by Lindgren J in Scully v Jones [2002] FCA 1396; BC200206997. His Honour put the issues in that case as follows: The issue before the High Court was whether the appeals were competent, in view of the intervening bankruptcies. The court held unanimously that they were not. The reasoning of the members of the court differed between the majority of Brennan CJ and Gaudron and McHugh JJ and the minority of Dawson and Toohey JJ. The minority thought that the right of appeal conferred by s 24 of the Federal Court of Australia Act 1976 was “property” as defined in s 5(1) and vested in the trustee in bankruptcy. The majority disagreed, but held that the bankrupts lacked standing to appeal for a different reason. That reason was that the bankrupts had no interest in the judgment against them which would support the institution of appeals in their own names. This was because the judgment debt was a debt provable in the bankruptcies, could be satisfied only out of property vested in the trustee in bankruptcy, and was not payable by the bankrupts themselves. Lindgren J had to consider different facts: the orders were declaratory and injunctive save for the order for costs. His Honour held at [15] that the issue was arguable because that party had an interest, at least in the declaration and injunctions, which would supply locus standi to appeal against them. The standing of a bankrupt to bring an action setting aside a default judgment was considered by Shaw J of the NSW Supreme Court in Kok v Commonwealth Development Bank [2004] NSWSC 51; BC200400352. In Owens v Comlaw (No 62) Pty Ltd [2006] VSCA 151; BC200605225, the Victorian Court of Appeal per Ashley JA, with whom Redlich JA agreed, expressed this view of Claremont Petroleum at [28]–[29]: [28] … The question was whether the appellants had standing to pursue an appeal against a money judgment. Two arguments were advanced why there was no such right. First, that the right to appeal was not “property” within s 5(1) of the Act. Second, that the appellants did not have such an interest in the appeals as would give them locus standi to institute the same.

[29] The majority in the High Court held that the right of appeal in the instant case, being an appeal against a money judgment, was not a “property” which vested in the trustee. That opened up the question whether the appellants nonetheless had standing to pursue their appeals. Their Honours resolved that question against each appellant. That was because his bankruptcy had divested him of interest in property which vested in his trustee, and of liability for provable debts. Even if his appeal succeeded, even if there would or might be a surplus in his estate, his contingent interest in the surplus did not give him rights which would permit him to prosecute the appeal. If the trustee did not appeal, then the appellant had a potential remedy under s 178 of the Act. I mention in passing their Honours’ observation that, had the appeals been commenced before the sequestration orders, then s 60(2) would have applied. [81,240.15] Rights under contract for sale of land The equitable estate and interest in land held by virtue of a contract of sale will vest pursuant to s 58(1) of the Act in the trustee where the purchaser’s estate is sequestrated before completion. The contract remains on foot unless the trustee exercises his or her right to disclaim under one of the heads in s 133: Official Receiver v Henn [1982] VR 362; (1981) 40 ALR 569; 61 FLR 410. See the observations in Bagshaw v Scott [2002] FCAFC 362; BC200207339. [81,240.16] Staying (and adjournment of) bankruptcy proceedings Wallin v MJB Building Services Pty Ltd [2002] FCA 1355; BC200206598 was an application by way of appeal from a federal magistrate whereby it was sought to stay bankruptcy proceedings. Section 52(3) of the Act was inapplicable because the hearing of the creditor’s petition had concluded a year earlier, and that application was not in aid of an appeal, as to which see Grundy v Wattyl Australia [2002] FCA 615; BC200202348. The application was accordingly dismissed. It is clear that an application for a stay based on abuse of process can be considered in order, if necessary, to protect the jurisdiction of the court. The authorities in support of this proposition are collected and considered at Green v Daley (2002) 28 SR (WA) 101; [2002] WADC 109. Commonwealth Bank of Australia v Paola [2005] FCA 855; BC200504356 indicates that where a creditable case is made out by a debtor that success in other pendant litigation would make [page 270] available funds to pay the creditor, the court may entertain an application to adjourn bankruptcy proceedings provided the court holds the test in Cain v Whyte (1933) 48 CLR 639; 6 ALJR 457 and Rozenbee v Kronhill (1956) 95 CLR 407 at 414; [1956] ALR 1004 which, citing the latter, is: … prima facie, on proof of the matters mentioned in s 56(2) [now s 52(1)], the Court will proceed to make an order for sequestration, and … it is for the debtor to show some cause overriding the interest of the public in the stopping of unremunerative trading, and the rights of individual creditors who are unable to get their debts paid to them as they become due. Something has to be put before the Court to outweigh those considerations before it can be said that sufficient cause is shown against the making of a sequestration order. In Ling v Commonwealth (1994) 51 FCR 88; 123 ALR 65 the Full Court noted that sufficient cause might be found where a debtor had a claim against a third party and was well advanced with litigation to establish that claim and the claim was likely to result in the debtor being in a position to pay his or her debts. Hill J said in Paola, above at [27] that circumstances where an adjournment might be considered are found in Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403 at 411–12; 37 FLR 341 in

the judgment of Sweeney J, but that the case also recognises that prima facie, on proof of the matters mentioned in s 52(1) of the Act, the court will proceed to make a sequestration order. An example of a case where an adjournment was refused is Westpac Banking Corporation v Tsatsoulis [2003] FCA 406; BC200302071 per Branson J. [81,240.20] Interest of a bankrupt in his or her property after bankruptcy: s 58 Upon bankruptcy the property of a bankrupt vests in the official trustee under s 58 of the Act. Where the trustee in bankruptcy has not taken steps to become registered proprietor of the property, the bankrupt as registered proprietor retains sufficient interest in the property to have locus standi to defend an action brought against the bankrupt affecting his or her position as registered proprietor: Crackenback Investments Pty Ltd v Wywsik (NSWSC, CLD, Greenwood M, No 14402/81, 25 August 1983, unreported). This decision is doubted and must now be read in the light of Bagshaw v Scott [2002] FCAFC 362; BC200207339 which denied the bankrupt locus standi but the bankrupt, being joined to the original proceedings, could be seen in the light only that it was appropriate that he be a party at least until the transmission applications were complete, but not otherwise. But what principle governs inchoate rights put forward by the Bankrupt? It was contended in both Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1; 70 ALJR 616; BC9602501 and Baulkham Hills Shire Council v Stankovic [2009] NSWCA 281; BC200908298 that the bankrupt did not possess a right of appeal that vested in the trustee, but rather that if a judgment against a bankrupt results in a judgment debt provable in the bankruptcy that the bankrupt does not have the standing to pursue the financial interest in the appeal. In the latter case because the subject matter of the appeal was not personal property of the bankrupt but rather the entitlement of the council to environmental orders then the court had jurisdiction. See the judgment of Latham J in Sarkis v Moussa (2012) 262 FLR 359; [2012] NSWCA 136; BC201203156 at [48]–[49]. [81,240.23] Equitable doctrine of exoneration In Official Trustee in Bankruptcy v Cameron [2008] QSC 89; BC200803514, Farrugia v Official Receiver in Bankruptcy (1983) 43 ALR 700; 58 FLR 474 was applied. The doctrine of exoneration is not limited, as Official Trustee in Bankruptcy v Cameron, above, at [26] makes clear, to married women (see also Parsons v McBain (2002) 109 FCR 120; 192 ALR 772; [2001] FCA 376; BC200101460 at [18]–[21]) but operates when the property of a person is charged or mortgaged in order to raise money for another. It is then presumed in the absence of contrary evidence that the first merely charges the property as a surety and is therefore entitled to be indemnified by the second with the result that the debt is on the estate of the second. Where, as in Official Trustee in Bankruptcy v Cameron, above, the second’s property passed to the Official Receiver the property was received subject to a charge in favour of the first, and in Official Trustee in Bankruptcy v Cameron there was held to be a triable issue on this question. [page 271] The legal history and the principles of this doctrine are examined in the Court of Appeal’s judgment in Ierino v Gutta (2012) 43 WAR 372; [2012] WASCA 222; BC201208725, (Pullin and Newnes JJA and Edelman J). The other members of the court agreed with the judgment of Edelman J. The facts are that the appellant was involved in the forgery of a transfer of title which transferred a property which he owned jointly with the respondent. The appellant agreed that he must account for the proceeds of the sale but stated that in the taking of the account the respondent should not have been exonerated for an amount of $90,000, submitting that the relevant time for exoneration is at a time prior to when the debt was incurred. The primary judge held that the appellant held his title to the property as a constructive trust for the respondent as to a half interest. That interest has also been described as a resulting trust in Evans v

European Bank Ltd (2004) 61 NSWLR 75 at 99–100; [2004] NSWCA 82; BC200401304 at [111]– [115] per Spigelman CJ; Handley and Santow JJ agreeing. The account is normally an account of what is received. A beneficiary can surcharge the account by proving a matter had been omitted which ought to have been included in the account. The account can be falsified if the beneficiary can show that a reduction in the account ought not to have been allowed: Pit v Cholmondeley (1754) 2 Ves Sen 565 at 565–6; 28 ER 360 at 360 per Lord Hardwicke LC; Glazier Holdings Pty Ltd v Australian Men’s Health Pty Ltd [2000] NSWSC 253; BC200001836 at [150]– [159]. In Duncan, Fox & Co v North & South Wales Bank (1880) 6 App Cas 1 at 11, Lord Selborne LC described three classes of case where suretyship principles apply: (1) where there is an agreement creating the relationship of principal and surety to which the creditor is a party; (2) where there is an agreement creating the relationship of principal and surety to which the creditor is not a party; and (3) where there is no agreement but that there is nevertheless a primary and secondary liability of two persons, the debt being “as between the two, that of one of those persons only, and not equally of both, so that the other, if he should be compelled to pay it, would be entitled to reimbursement from the person by whom (as between the two) it ought to have been paid”. The cases usually refer to the “equity of exoneration” in relation to the third class of case to which Lord Selborne LC referred. Although the third class is not strictly one of suretyship, the general principles apply in the same way between the parties in the positions of surety and principal debtor. The equity of exoneration is a right as between surety and principal debtor to have the principal debtor’s estate resorted to first for the purpose of satisfying the debt. An equitable charge can arise over the estate of the principal debtor to secure the surety’s right. Judge Deane said in Farrugia v Official Receiver in Bankruptcy (1982) 43 ALR 700; 58 FLR 474: Where the property of a married woman is mortgaged or charged in order to raise money for the benefit of her husband, it is presumed, in the absence of evidence showing an intention to the contrary, that, as between her husband and herself, she meant to charge her property merely as security. In such a case, she is, as between her husband and herself, in the position of surety and entitled both to be indemnified by the husband and to throw the debt primarily on his estate to the exoneration of her own (702). Judge Edelman said of this in Ierino v Gutta (2012) 43 WAR 372; [2012] WASCA 222; BC201208725 at [28]: Farrugia also involved the application of the equity of exoneration in circumstances in which the exoneration concerned only that part of the debt which had been used for the benefit of the husband. Although on this appeal there was a challenge to the primary judge’s factual finding about the division of the debt, there was no dispute that the equity of exoneration could apply if the debt could be “in effect subdivided” into the borrowing of Mr Ierino for his own benefit and the borrowing used for the joint benefit of the parties: see Farrugia (702–703), and the primary judge at [187]. Judge Edelman has pointed out in that case that they have been doubts expressed that the continuation of this principle “established an earlier age when wife’s property existed only in equity, and equity, in a number of special rules including this one, protected property interests of wives [page 272] against the legal and social blogs of the husbands” (Official Trustee in Bankruptcy v Citibank Savings Ltd (1995) 38 NSWLR 116 at 129–30; 7 BPR 14,469; BC9501685 per Bryson J) but he stated at [30]

“however, the doctrine now exists on a wider, and more principled, basis.” Judge Edelman starting at [31] links the equitable principle to its modern incarnation: [31] Prior to the enactment of the Married Women’s Property Act 1870, and its extension in the Married Women’s Property Act 1882, English common law did not generally permit a married woman to hold property. The married woman was under coverture. Her legal personality was merged with that of her husband: Murray v Barlee (1834) 3 My & K 209, 220; 40 ER 80, 84 (Lord Brougham LC). But in the Court of Chancery it was recognised that in various situations the husband would hold legal rights on trust for his wife. One of those was where there was a deed of settlement between the husband and wife. [32] The most common instance in which the equity of exoneration was historically applied was that described by Deane J in Farrugia where the property (usually the equitable rights) of a wife were charged to raise money for the benefit of her husband. But from the earliest cases the equity of exoneration was held to apply to the estate of a husband as well as that of a wife: Bagot v Oughton (1717) 1 P Wms 347; 24 ER 420 (Cowper LC); Gee v Smart (1857) 8 El and Bl 313; 120 ER 116 (Coleridge J); Gray v Dowman (1858) 27 LJ Ch 702 (Kindersley VC). And, at least by the time of the Married Women’s Property Acts, the view had developed that the equity of exoneration was a general principle which was not confined to husband and wife. [33] In the 1st edition of Snell’s Equity in 1887, Edmund Snell explained the principle on a general basis of the intention of the parties, giving only as an example of where the question had “generally arisen” the situation of a husband who mortgages his wife’s estate although the intention is that the equity of redemption be reserved on a different basis from that which is manifest in the mortgage: “her estate being in equity deemed only a security for his debt” (261– 262). And in Robbins’ 1897 rewrite of Coote’s Law of Mortgages, he placed the doctrine upon the usual principle “that where one person mortgages his property to secure an advance made to another person, it is the debt of the latter”: L Robbins, A Treatise on the Law of Mortgages (1897) 351. [34] The equity of exoneration has since been applied to brothers: Gee v Liddell [1913] 2 Ch 62 (Warrington J). It has been applied as between two couples: Caldwell v Bridge Wholesale Acceptance Corp (Australasia) Ltd (1993) 6 BPR 13,359 (Cole J). It was equated by BrowneWilkinson VC with the equitable principle of marshalling: Knight v Lawrence [1993] BCLC 215, 231. And, in a case to which reference will be made below, the Full Federal Court expressed the doctrine on a broad basis not confined to husband and wife: Parsons v McBain [2001] FCA 376; (2001) 109 FCR 120, 127 [20] (the court). [35] This principled basis for the equity of exoneration is the simple notion that effect should be given to the intention of the parties that, as between them, it is intended that the burden of a debt should be borne by one, and the other should be exonerated. [36] The intention with which the equity of exoneration is concerned is a manifest, or objective, intention. Although the equity of exoneration gives rise to an indemnity secured against the principal debtor’s estate, rather than a resulting trust of that estate, it shares the feature with a resulting trust that it is not concerned with unexpressed, subjective intentions of the parties but with objective manifest intentions: see, in relation to resulting trusts, Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, 261 (Mason & Brennan JJ), 270 (Deane J); Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, 286–287 [105]–[106] (Heydon & Crennan JJ). [37] It may be that, like a resulting trust which arises where a transferor has no intention to benefit

the recipient, there are circumstances in which the intention of both parties is not necessary for the equity of exoneration to arise. One such circumstance may be where the plaintiff and defendant agree that jointly borrowed funds will be applied for their joint benefit, but the defendant then applies the money for his or her own benefit without the knowledge of the [page 273] plaintiff. But it is not necessary to consider that situation or the basis in that circumstance for any exoneration of the plaintiff in respect of a benefit received by the defendant at the plaintiff’s expense. Judge Edelman, in addition to setting out the principle succintly, and incidentally, of considerable use to researchers on this topic, also dealt with the substantial question of the appeal, namely, when does exoneration apply? The appellant argued strongly that in each case the mortgage was given at the time the relevant debt was incurred. However at [44] his Honour stated: “nothing was saved in these cases to deny that the intention of the parties in relation to a debt subsequently incurred should be considered at the time the relevant date is incurred. In cases where the relevant date is any portable part of a line of credit relevant time for assessing the intention of the parties is the time that part of the debt is drawn down and incurred”. His Honour cited the following cases in support: Dinsdale bht Protective Commissioner v Arthur (2006) 12 BPR 23,509; [2006] NSWSC 809; BC200606198 at [24]–[25] (Brereton J); Burch v Cone [2009] NSWSC 1430; BC200911479 at [24] and [32] (Barrett J); Boyd v Hummelstad [1996] NSWSC 93 (Brownie J). Although this substantially disposed of the appeal is not dealt with other matters submitted below but it is submitted that is on a statement of the principle will be of substantial use to practitioners in this area, in particular those who had to deal with bankruptcy consequences of the invocation of this doctrine. [81,240.25] Enforcement of remedies: s 58(3) The effect of the bankruptcy of the debtor is that the remedies against the person and property of the debtor are taken away and there is substituted a right to prove against the estate: Re Thomas; Ex parte Cmr of Woods and Forests (1888) 21 QBD 380. The effect of the bankruptcy is that the debtor is no longer obliged to pay his or her creditors but is in fact disabled from doing so, and they in turn have a right or proof against the estate: Clyne v DCT (1984) 154 CLR 589; 55 ALR 143; 58 ALJR 398. Various attempts have been made to avoid or to invoke the section, usually by a claim of security and the seeking of declaratory relief. The need to obtain leave under this section, which is restricted to courts exercising bankruptcy jurisdiction, is first necessary. See [81,240.35]. The granting of the leave to proceed is often conditioned by purely practical considerations, as was the case in Commonwealth Bank of Australia v King [2011] FCA 790; BC201105141, which was directed to the practicality of Supreme Court procedures as against those of a trustee acting administratively using the machinery under the statute. Yates J summarised this view at [26]: [26] In all the circumstances I am satisfied that this is an appropriate case for the granting of leave under s 58(3)(b) of the Bankruptcy Act. I accept that the claims are complex claims of the kind that would be better and more comprehensively dealt with in a contested trial in the Supreme Court rather than by the third respondent as trustee. I also accept that the Bank’s claims against the first respondent’s parents could not be resolved in the absence of the first and second respondents as parties to the Supreme Court proceeding. These considerations plainly support the granting of leave under s 58(3)(b): Allanson v Midland Credit Ltd (1977) 16 ALR 43 at 48; Westpac Banking Corp v Ollis [2007] FCA 1194 at [18]. In adopting this course the Bank will not be preferred over other creditors. Any money judgment obtained by the Bank against the first and second

respondents in the Supreme Court proceeding will rank with other debts proved or to be proved in each bankruptcy. Finally, I am reinforced in my view that leave should be granted by the lack of any opposition by the respondents. In Storey v Lane (1981) 147 CLR 549 at 556; 36 ALR 129; 55 ALJR 608; BC8100098 the policy of the section is explained as providing that a bankrupt’s assets are made available for division among creditors while avoiding preferences. In Baker v Paul [2012] NSWSC 392; BC201203326 the NSW Supreme Court was enabled to enforce a contempt charge because its consequences involved no required payment and did not offend the Bankrupcy Act. See at [74]–[76]. In Bechara v Cross [2014] NSWCA 175; BC201404258 the NSW Court of Appeal (McFarlan, & Emmett JJA & Sackville AJA) MacFarlan JA at [18] noted that in the course of upholding an appeal that the plaintiff obtained leave under this section. The court did not find it necessary to consider whether it was necessary to obtain that leave but held that the defendants were proper defendants to the proceeding rather than the Trustee in Bankruptcy. It is clear from the context of the judgment [page 274] that such principles as considered in the preceding paragraph were before the court. If there is any likelihood that Commonwealth Bank of Australia v King, above will need to be invoked it better to obviate the risk by obtaining the order. [81,240.30] Secured creditors In s 5 of the Act a secured creditor is defined “in relation to a debtor, means 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.” Section 218 of the Income Tax Assessment Act 1936 creates a charge over moneys due to the taxpayer by a third party and thus causes the commissioner to bring himself or herself within the definition of “secured creditor” in s 5 of the Act as a person having a charge on the property of debtor: Clyne v DCT (1981) 150 CLR 1; Deputy Commissioner of Taxation v Steele (1987) 87 ATC 5050; Deputy Commissioner of Taxation v Donnelly (1989) 25 FCR 432; 89 ALR 232; 89 ATC 5071. [81,240.35] “Court may grant leave”: s 58(3)(b) For the circumstances in which the court may grant leave to the creditor to proceed in his or her action against the bankrupt, see Allanson v Midland Credit Ltd (1977) 16 ALR 43; 30 FLR 108. See [81,240.25] for an application of Allanson. This case specifically noted (ALR at 49) that cases where complex questions arise may be appropriately dealt with by leave being granted, so that they can be properly determined in a court, thereby likely resulting in less costs and complexity in the future conduct of the case. One such case where leave was granted was Eurostar Pty Ltd v Donnelly [2005] FCA 698; BC200503656 where a solicitor certified that there were reasonable grounds for believing that the plaintiffs had a reasonable prospect of success. Macquarie Bank Ltd v Bardetta [2005] FCA 507; BC200502490 applied Allanson to set aside consent orders under s 58 of the Family Law Act 1975. Conti J followed other decisions applying Allanson for the reason that the order sought permitted all parties to be joined and that the tribunal proposed for the contest was one to whom all necessary disclosure would be made: Macquarie Bank Ltd at [26]. In Mango Media Pty Ltd v Velingos [2008] NSWSC 202; BC200801341 at [13]–[15] Barrett J spoke of the purpose of subs (3): [13] … the objective of s 58(3)(b) which is, is clearly enough, to ensure that the bankrupt estate and the provable claims upon it remain under the control and supervision of the courts having

jurisdiction in bankruptcy. The legislation as a whole is aimed at marshalling assets, ascertaining debts and claims and applying the former towards satisfaction of the latter. The procedures by which the process is to be conducted and the objective is to be achieved are set out in the Bankruptcy Act and administered by those courts to which exclusive jurisdiction in bankruptcy is given by Parliament. To the extent that an attempt is made to resort to any other process of dealing with debts and claims, particularly if resort is to be had to courts other than the bankruptcy courts, there must first be screening by a bankruptcy court. [14] In the present case, this court is asked to make a binding declaration of right under s 75 of the Supreme Court Act 1970 recognising the existence of an interest in property of a bankrupt by way of security for a debt of the bankrupt. Given that the phrase “in respect of” only requires “some discernible and rational link” between the matters in question (Technical Products Pty Ltd v State Government Insurance Office (Q) [1989] HCA 24; (1989) 167 CLR 45 at CLR 47), the proceedings advancing the claim to have the court recognise the security for the debt seem to me clearly to be proceedings “in respect of” the debt claimed to be secured by the security. The security interest cannot be found to exist unless the debt is found to exist. [15] The claim for an order extending the caveat stands in the same light. It is a claim based on not only the existence of the interest in the property that is asserted by the plaintiff but also the existence of the debt for which the interest is said to stand as security. If there were no debt, there would be no basis for asserting an interest in the property and, therefore, no basis for attempting to obtain the declaratory relief or seeking to sustain the caveat. [81,240.37] “After acquired property” In Falloon v Madden; Madden v Madden [2012] NSWSC 652; BC201204184, Stevenson J at [143] summarised the meaning of this term and the [page 275] consequences arising: s 58(1)(b) of the Bankruptcy Act provides that “after-acquired property” vests in the Official Trustee as soon as it is acquired. Subsection 58(6) provides that “after-acquired property” means property “that is divisible amongst the creditors of the bankrupt”. In s 5 “property” is defined to mean real or personal property and “includes any estate [or] interest … to any such real or personal property”. Section 116(1) of that Act provides that property “divisible amongst creditors” includes property acquired by the bankrupt “after the commencement of the bankruptcy and before his or her discharge”. Notwithstanding a subsequent discharge such an interest remains vested in the Official Trustee: Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; 96 ALR 327; 64 ALJR 651; BC9002922; Daemar v Industrial Commission of NSW (No 2) (1990) 22 NSWLR 178; 22 ALD 780; 99 ALR 789; Gosden v Dixon (1992) 107 ALR 329; BC9201984; Metherell v Public Trustee [2010] WASC 205; BC201005833 at [4]. [81,240.38] “realize or otherwise deal with his or her security” — s 58(5) In Hanshaw v National Australia Bank Ltd (2012) 264 FLR 294; 16 BPR 30,991; [2012] NSWCA 100; BC201205445 Johnson J at [41]–[42] applied Savieri v Brown [2008] NSWSC 1210; BC200810176 at [32] per White J “The plaintiff is seeking to enforce a remedy, namely the alleged right to possession, which is a dealing with his security within the meaning of s 58(5).” [81,240.40] Bankruptcy severs joint tenancy In Sistrom v Urh (1992) 40 FCR 550; 117 ALR 528 it was held that, where a bankrupt and another are registered as joint tenants of Torrens system land, s 58 works to effect a severance of the joint tenancy in equity on the making of the sequestration order and imposes an obligation on the registered proprietor to hold the land on trust for the trustee in bankruptcy. To effect severance of the joint tenancy at law the trustee’s interest must be registered.

One of the mechanisms by which joint tenancy is severed is no application under the Conveyancing Act (NSW) s 66G. Stevenson J in Dixon as Trustee of the Bankrupt Estate of Badillo-Watiwat v Watiwat [2012] NSWSC 402; BC201202773 at [19] stated that an order under this section is granted almost of right, unless, on settled principles it would be inequitable to allow the application. The court followed Pascoe v Dyason [2011] NSWSC 1217; BC201109929 and Tory v Tory [2007] NSWSC 1078; BC200708273. Young JA said in Romeo v Trust Company (PTAL) Ltd [2012] NSWCA 62; BC201202030 at [19] and [20]: When a female mortgagor holding as joint tenant with her husband becomes bankrupt, the joint tenancy is severed and the bankrupt’s trustee and the husband hold as tenants in common in equity. Until the trustee becomes registered on the title under s 90 of the Real Property Act 1900, the married couple remain joint tenants at law though the Trustee holds a moiety share as equitable tenant in common, see eg Sistrom v Urh (1992) 40 FCR 550. And: The law appears to be that once bankruptcy intervenes, a bankrupt mortgagor cannot redeem: Spragg v Binkes (1800) 5 Ves 583, 590; 31 ER 751, 754. Thus, the rule that there must be payment into court by the mortgagor before equity could give relief cannot apply to the bankrupt. If the bankrupt is still a joint tenant at law, does this affect the situation of the other mortgagor? Are payments made with the intention of being payments under the mortgage by the bankrupt the property of the secured creditor because of the operation of s 58(5) of the Bankruptcy Act 1966 (Cth) or are they arguably preferences? The Court of Appeal of WA in Singh v Kaur Bal (No 2) [2014] WASCA 88; BC201402934 (Pullin, Newnes & Murphy JJA, by Murphy JA with whom the balance of the Court agreed) added: 43 Severance of a joint tenancy may also arise by involuntary alienation of the “interest” of one joint tenant. Thus, bankruptcy severs a joint tenancy in equity so that thereafter the co-owners become, in equity, tenants in common: Re Francis; Ex parte Official Trustee in Bankruptcy (1988) 19 FCR 149 at 153–154; 82 ALR 335; [1988] ANZ ConvR 585; Cummins [14]. The severance by bankruptcy of Torrens title land is not operative at law until the trustee in bankruptcy registers his or her interest: Sistrom v Urh (1992) 40 FCR 550 at 556; (1992) 117 [page 276] ALR 528. After severance by bankruptcy and until the trustee’s interest is registered, the joint tenants on the title (joint tenants at law) hold the land as trustee for the trustee in bankruptcy and the other co-owner as tenants in common in equal shares. If the bankrupt joint tenant then predeceases the other joint tenant and the other joint tenant, the survivor, becomes the sole registered proprietor, the registration merely vests the legal estate in the survivor, but the trust continues and the survivor holds the estate on trust for the trustee in bankruptcy, and himself, as tenants in common in equal shares: Sistrom v Urh at 557–558. 44 Where parties hold as joint tenants at law, and there is nothing in equity (including through the operation of any relevant presumption) to regard their interests as tenants in common, the equitable title follows the legal title and is ‘at home’ with the legal title: see Nelson v Nelson (1995) 184 CLR 538 at 547–548; 132 ALR 133; 70 ALJR 47; BC9501517; Delehunt v Carmody (1986) 161 CLR 464 at 471–473; 68 ALR 253; 61 ALJR 54; BC8601383.

[81,240.45] Cross-Border Insolvency Act 2008 (Cth) The above statute and its means of employment are illustrated by Lawrence v Northern Crest Investments Ltd (in liq) [2011] FCA 672, (Jagot J) in which the main object of the statute, which is to stay enforcement order execution against the defendant’s assets, is obtained. The case concerns application to declare certain proceedings in New Zealand to be a “foreign main proceeding” and to obtain interim relief pending the disposal of the substantive application. Article 15(3) requires the application for recognition to be accompanied by a statement identifying: all proceedings under the Bankruptcy Act 1966 in respect of the debtor; and (b) any appointment of a receiver (within the meaning of s 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of s 9 of that Act), in relation to the property of the debtor; and (c) all proceedings under Chapter 5, or s 601CL, of the Corporations Act 2001 in respect of the debtor. [81,240.50] Matrimonial causes The judgment of Forrest J in Bryson v Pember [2013] FamCA 43; BC201350012 deals with the consequences of the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth). The judge explained the interaction of this section and s 79 of the Family Law Act by stating at [21] that the filing of an application for alteration of property interests pursuant to s 79 does not of itself create, or give rise to interests in property in the applicant spouse that do not already exist. Nor does it change any interests that already exist or the way in which they are held. The bankruptcy of a party does not prevent that party from making an application under s 79: by operation of s 58(1)(b) of the Bankruptcy Act that party’s interests are likely to be subject to the operation of that statute and may be after acquired property. The question at issue was whether that party had “a chose in action in respect of property” which was itself property at [26]. In Loxton v Moir (1914)18 CLR 360; 15 SR (NSW) 1; (1914) 31 WN (NSW) 108a; BC1490128 at 379 Rich J of the High Court said: The phrase “chose in action” is used in different senses, but its primary sense is that of a right enforceable by an action. It may also be used to describe the right of action itself, when considered as part of the property of the person entitled to sue. A right to sue for a sum of money is a chose in action, and it is a proprietary right. In Krischell Pty Ltd v Nilant (2006) 32 WAR 540; 204 FLR 182; 60 ACSR 410; BC200608866 McClure JA said that “a chose in action” is a personal right of property which can only be claimed or enforced by action as distinct from taking physical possession and “that all bare rights to litigate are choses in action regardless of whether or not they are property”. The decision of Barker J in MG Corrosion Consultants Pty Ltd v Gilmour (2012) 202 FCR 354; 88 ACSR 170; [2012] FCA 383; BC201202156 who determined whether particular causes of action, one a statutory right to apply for compensation under the Corporations Act 2001, and one an action in equity for compensation or an account of profits for breach of fiduciary duties, were things, or choses in action and thus “property” within the definition of that term in s 9 of the Corporations Act 2001 (Cth). [page 277] As Forrest J noted at [36] he found that they were not. In doing so, he placed particular weight on the fact that they were incapable of assignment. His Honour did this having already noted McClure JA’s observation in Krishell that assignability is not an essential characteristic of a right of property but that a proprietary right must nevertheless be capable in its nature of assumption by third parties. The judge determined the nature of the property before him at [37]:

The right of a husband, statutorily created, to make an application for property adjustment orders under s 79 of the FLA, similarly, cannot be assigned. To the extent that the husband only seeks orders that the wife settle or transfer some of her “property” on, or to the husband because, in the circumstances, that is “appropriate” and “just and equitable”, I do not consider it to be a chose, or thing in action. The husband is not seeking to enforce or claim an existing corporeal or incorporeal interest. I consider the husband’s right to be a right or a cause of action, that is personal rather than proprietary in nature. Accordingly, I am of the view that the right of the husband to bring a s 79 FLA application, not being a chose in action, did not vest in his trustee on his bankruptcy. But his view was that this was one of a class of causes of action personal to the bankrupt, whether they be classified as a chose in action or not, that do not vest in the bankrupt’s trustee, noting that in O’Neill v O’Neill (1998) 145 FLR 237; 23 Fam LR 326; (1998) FLC 92-811 it was said: [I]t would appear to remain good law that a bankrupt spouse may initiate and prosecute property settlement proceedings during the course of his or her bankruptcy.

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[81,243] Vesting of property upon bankruptcy — effect of orders in force under the proceeds of crime law 58A (1) If a restraining order or forfeiture order is in force 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. (2) If a pecuniary penalty order is in force 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.

(3) Notifying the trustee of grounds for subsection 58(1) to apply to property 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. [subs (3) am Act 174 of 2011 s 3 and Sch 2[144], opn 1 Jan 2012]

[s 58A insrt Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

[81,245] Second or subsequent bankruptcy 59 (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; [page 278] 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. [subs (1) am Act 119 of 1987 s 23; Act 143 of 1992 s 3 and Sch; Act 44 of 1996 s 3 and Sch 2; Act 57 of 2007 s 3 and Sch 1[1], opn 28 July 2006]

(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 [page 279] (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. [s 59 subst Act 12 of 1980 s 35]

[81,247] Orders under Part VIII or VIIIAB of the Family Law Act 1975 59A Sections 58 and 59 have effect subject to an order under Part VIII or VIIIAB of the Family Law Act 1975. [s 59A insrt Act 20 of 2005 s 3 and Sch 1, opn 18 Sep 2005; am Act 115 of 2008 s 3 and Sch 2[11], opn 1 Mar 2009]

[81,250] Stay of legal proceedings 60 (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. [subs (1) subst Act 12 of 1980 s 36; am Act 44 of 1996 s 3 and Sch 2]

(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.

[subs (2) am Act 44 of 1996 s 3 and Sch 2]

[page 280] (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. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(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). [subs (4) am Act 44 of 1996 s 3 and Sch 2; Act 144 of 2008 s 3 and Sch 2[20] and [21], opn 10 Dec 2008]

(4A) Notwithstanding paragraph (1)(b), this section does not empower the Court to stay any proceedings under a proceeds of crime law. [subs (4A) insrt Act 73 of 1987 s 7; am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

(5) In this section, action means any civil proceeding, whether at law or in equity. SECTION 60 GENERALLY [81,250.2] Constitutional validity — s 60(1) The constitutional validity of s 60(1) was considered and upheld in Storey v Lane (1981) 147 CLR 549; 36 ALR 129. [81,250.4] Stay In Moore-McQuillan v Scott (2006) 149 FCR 486; [2006] FCA 63; BC200600972 Mansfield J held that an order that the applicant pay a costs order under the Workers Rehabilitation and Compensation Act 1986 (SA), which arose out of a successful prosecution, was compensatory and not penal and an order for which s 60(1) was available to stay and process. His Honour cited the authorities set forth in [20] of the judgment. [81,250.6] Jurisdiction Black J of the NSW Supreme Court has observed in Barwick v Goodridge (2011) 255 FLR 245; [2011] NSWSC 1233; BC201110289 at [11]: [11] In Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380, the Full Court of the Federal Court had to consider whether the Industrial Court of New South Wales had jurisdiction to determine whether there had been an abandonment of proceedings by the

trustee in bankruptcy. Greenwood and Branson JJ observed that a State Court’s recognition of the effect of the Bankruptcy Act to determine the status of proceedings or the standing of parties did not amount to exercising jurisdiction under or by virtue of the Act. [12] Branson J observed that, in respect of s 60 of the Bankruptcy Act: The status of a proceeding commenced by a person who subsequently becomes bankrupt is a matter which must necessarily be addressed by the court in which the proceeding has been commenced. Nothing in s 27, or elsewhere in the Act, discloses an intention to deprive a State court of the power to determine the status of a proceeding before it. Whether or not a trustee has made an election in writing to prosecute or discontinue a proceeding is a mixed question of law and fact. Although the Act requires every court seized of an action commenced by a person who subsequently becomes a bankrupt to determine this question, the determination of the question does not involve the exercise of jurisdiction “under or by virtue of [the] Act”. It relevantly involves mere recognition of the binding legal effect of the Act. Further, every [page 281] court has the implied or inherent jurisdiction to determine the extent of its jurisdiction and whether there is an impediment in the way of its hearing and determining a proceeding before it. (at [8]) [13] Greenwood J noted that it would be an odd result if the conferral of exclusive jurisdiction in bankruptcy in the terms of s 27 of the Bankruptcy Act on the Federal Court deprived the several Courts of the States of a jurisdiction to determine whether a plaintiff has properly engaged that Court’s jurisdiction having regard to his or her standing by reason of the operation of one or more provisions of the Bankruptcy Act. His Honour noted that “[t]here is a distinction between the exercise of a court’s jurisdiction in a proceeding that calls into question a provision of the Bankruptcy Act on the one hand and the exercise by that court of a jurisdiction under or by virtue of the Bankruptcy Act, on the other” (at [88]). His Honour also noted that a State Court’s determination whether a proceeding could properly be commenced or maintained before it or whether the Plaintiff has standing to engage the Court’s jurisdiction, by reason of any impediment going to the operation or application of a provision of the Bankruptcy Act, is not one under or by virtue of the Bankruptcy Act (at [117]). On the other hand, Perram J took the view that any question which determined the trustee’s title to a right of action was within the Federal Court’s exclusive jurisdiction and expressed the view that Sutherland v Brien was incorrectly decided. [14] In Cordes as Trustee for Alexander Georgev Dr Peter Ironside Pty Ltd [2009] QCA 302, the plaintiff had asserted rights in respect of real property on the basis of an interest as trustee which was inconsistent with the rights claimed by the trustee in bankruptcy and sought orders in respect of chattels seized by the trustee in bankruptcy. The Court of Appeal of the Supreme Court of Queensland upheld a decision in the Trial Division that the Court did not have jurisdiction to determine a controversy whether the bankruptcy trustee had title to particular property, a horse and a motor vehicle, and held that jurisdiction was exercisable only by the Federal Court or the Federal Magistrates Court. Holmes and Chesterman JJA observed at [38] that: Although the paths of reasoning in the judgments of Greenwood J and Perram J in Meriton Apartments are not identical, and the contemplated scope of bankruptcy jurisdiction is correspondingly different, both firmly endorse the conclusion in Scott v Bagshaw, that decisions involving findings for or against the trustee in bankruptcy’s title to property fall

within the jurisdiction of the Federal Court. This Court should not depart from an appellate decision of the Federal Court unless convinced that its interpretation is wrong. The conclusion that s 31(1)(f) provides an example of bankruptcy jurisdiction is not obviously flawed. There is no reason not to follow Scott v Bagshaw. Their Honours also observed that the case before them fell squarely within what was described in Scott v Bagshaw, since the orders the appellant sought, to the extent that they recognised title in the appellant, must have a “necessary adverse affect on the title” of the trustee in bankruptcy. See also Singh v Owners — Strata Plan 11723 [2012] NSWSC 519; BC201203357 per Adamson J at [35] et seq. However, In Storey v Lane (1981) 147 CLR 549 at 556; 36 ALR 129; 55 ALJR 608; BC8100098 the policy of the section is explained as providing that a bankrupt’s assets are made available for division among creditors while avoiding preferences. In Baker v Paul [2012] NSWSC 392; BC201203326 the NSW Supreme Court was enabled to enforce a contempt charge because its consequences involved no required payment and did not offend the Bankrupcy Act. See at [74]–[76]. In Sarkis v Moussa (2012) 262 FLR 359; [2012] NSWCA 136; BC201203156 at [48] and [49] Latham J drew a distinction between Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1; 70 ALJR 616; BC9602501 and Baulkham Hills Shire Council v Stankovic [2009] NSWCA 281; BC200908298. In the first it was held that the bankrupt did not possess a right of appeal that vested in the trustee, but rather that if a judgment against a bankrupt results in a [page 282] judgment debt provable in the bankruptcy that the bankrupt does not have the standing to pursue the financial interest in the appeal. In the latter case because the subject matter of the appeal was not personal property of the bankrupt but rather the entitlement of the council to environmental orders then the court had jurisdiction. In Bell v Cribb [2013] WASC 32; BC201300448 Beech J referred to s 60(2) and its effect in the following terms at [53]: The effect of s 60(2) is that a claim by a bankrupt is stayed even if the bankrupt concerned is “only one of several plaintiffs, whose claim was separate from those of other plaintiffs, although raising common questions of law and fact”: Re Lofthouse [2001] FCA 25; (2001) 107 FCR 151 [16]. Some of the cases following Re Lofthouse in this respect were collected by Edelman J in Duckworth v Water Corporation [2012] WASC 30 [40]. His Honour stayed the action until the trustee made an election to prosecute or to discontinue the action. [81,250.7] Summary In Falamaki v Wollongong City Council [2010] NSWSC 38; BC201000543 Schmidt J summarized the effect of the section as follows at [2]: … it is clear that by operation of s 60(2) of the Bankruptcy Act 1966 (Cth), these proceedings were stayed, except in so far as they concerned ‘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’, upon Dr Falamaki becoming a bankrupt. Section 60(3) gave Dr Falamaki’s trustee in bankruptcy 28 days within which to make an election as to whether to prosecute or discontinue these proceedings. The trustee made no election. The effect of s 60(3) was that in the absence of an election by the trustee, the trustee is ‘deemed to have abandoned the action’.

[81,250.10] Stay of proceedings The principles are set out in [81,240.7] above. For an example of an action being stayed which had been commenced prior to a sequestration order being made, see Faulkner v Bluett (1981) 52 FLR 115. In deciding whether or not to grant a stay, the court will look at the precise legal effect of the proceeding in each particular circumstance. See Re Sutherland-Cropper (1985) 11 FCR 156; 61 ALR 713. In Commissioner for Motor Transport (NSW) v Train (1972) 127 CLR 396 the High Court had held that the previous s 60(1) did not authorise the discharge out of custody of a person held under criminal process and that prosecutions for offences against the Road Maintenance (Contribution) Act 1958 (NSW) did not constitute civil legal process within the meaning of the subsection. The Bankruptcy (Amendment) Act 1980 repealed s 60(1). In Storey v Lane (1981) 147 CLR 549 at 555–6; 36 ALR 129 at 133 Gibbs CJ observed: Shortly stated the effect of the provision (the new s 60(1)) is to empower the court to relieve a debtor, against whom a petition has been presented, from process (civil or criminal) instituted against him because of his failure to pay a provable debt. The objects of the paragraph are to ensure that if a sequestration order is (or has been) made against the estate of the debtor his assets will be available for administration in the interest of his creditors generally, to prevent one creditor, who has the right to enforce payment of his debt under some other law, from exercising that right so as to gain an advantage over other creditors, and to protect the debtor from punishment because he has not paid the debt when payment might be a breach of the bankruptcy law … The obvious intention of the amendment is to enable a court, in appropriate circumstances, to discharge out of custody a person who was in fact imprisoned because of his or her failure to pay a provable debt or a penalty payable in consequence of the non-payment of a provable debt or because of his or her non-compliance with an order to pay a provable debt. In Storey v Lane, above, the applicant, Storey, had been convicted under Queensland Industrial legislation of having paid a lesser amount of wages than prescribed by the award and having failed to pay holiday pay. The court had power to fine the applicant and to order him to pay the sums due [page 283] for wages and holiday pay. That order was made with a default provision for imprisonment in the absence of payment. The applicant failed to make the payments ordered and was imprisoned. He then filed his own petition and applied for discharge from custody and the High Court itself exercised the discretion given by s 60(1)(b) in favour of the applicant. This case was considered by the Full Court of the Federal Court (comprising Spender, Hill, and Finn JJ) in Melnik v Melnik (2005) 144 FCR 141; 221 ALR 577; [2005] FCAFC 160; BC200505880. The court held, at [45], that “without the leave of the court, it was not competent, pursuant to s 58(3)(b) of the Bankruptcy Act, for the wife to commence, or to take any fresh step in the application that the husband be punished for contempt, that being ‘a legal proceeding in respect of a provable debt’”. In Re Lenske; Ex parte Lenske (1986) 9 FCR 532; 64 ALR 135, the debtor had been convicted of the charge of stealing as a servant and was ordered to pay restitution and in default of payment, imprisonment was ordered. It was argued that the matter fell outside s 60(1)(b) because the obligation in question was not a provable debt and fell within s 82(3). Section 82(3) provides that penalties or fines imposed by a court in respect of an offence against a law (whether Commonwealth or not) are not provable in bankruptcy. The court rejected that submission, however, upon the basis that the power given by s 60(1)(b) is not confined to instances in which the process stayed creates a provable debt. The court held that it is enough that there is process against the person or property of the debtor in respect of such a debt, or in consequence of refusal to comply with an order for payment of such a debt. The

underlying obligation which the stayed process is intended to enforce must, however, be a provable debt. The obligation was held to be that due by the applicant to the employer, in consequence of the thefts. More recently Mansfield J, by his careful reasoning in Moore-McQuillan v Scott (2006) 149 FCR 486; [2006] FCA 63; BC200600972 (as to which see [81,650.6]), has identified certain penalty provisions commonly used in other jurisdictions as compensatory in character and as proper objects for the power to stay in this section. [81,250.12] “subsequently becomes a bankrupt” In Jambrecina v Official Trustee in Bankruptcy [2003] FCA 1352; BC200307089 at [13] Bennett J said: Section 60(4) excludes from the operation of s 60(2) and provides that the bankrupt may continue, in his own name, an action commenced by him before he became a bankrupt in respect of a personal injury or wrong done to him and such a right to recover damages or compensation is not part of the property of the bankrupt to be divisible amongst his creditors (s 116(2)(g)). Again, this section may have no application as it does not apply where the bankruptcy preceded the commencement of the action. If s 60(2) and (4) of the Act do not apply, the cause of action would then vest in the respondent by reason of s 58(1). In Wealthsure Pty Ltd v Selig [2014] FCAFC 64; BC201404200 at [144] Mansfield, Besanko And White JJ, White J construed this subsection as operating subject to liabilities and equities. He added: It would be incongruous if a trustee in bankruptcy acquired as part of the property of a bankrupt the right of indemnity under an insurance policy but could, at the same time, negate the exercise by the insurer of its contractual right to defend a claim brought against the insured to which the policy would respond. [81,250.13] Automatic stay by virtue of subss 60(2) and (3) Subsections 60(2) and (3) operate to stay any action bought by a person who subsequently becomes a bankrupt until the trustee makes an election in writing to prosecute or discontinue the action and trustee has a limit of 28 days. And in default of action, the action is deemed to be abandoned. The process is described in Landmark Operations Ltd v J Tiver Nominees Pty Ltd (No 4) [2010] SASC 20; BC201000961. [81,250.15] “election” — s 60(3) If the trustee elects to continue the action the “election” must be made without qualification. In Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd (1984) 55 ALR 594; 73 FLR 88 the court held that an attempt by the trustee to continue the action while avoiding [page 284] the costs thereof was a qualified election and therefore invalid. Wade v AMI Australia Holdings Pty Ltd [2010] FCAFC 120; BC201007184 the trustee had not made an election within the time prescribed by s 60(2) above. See also Denlay v Commissioner of Taxation (No 3) [2012] FCA 317; BC201201679 at [5]. Such a failure to elect amounts to an abandonment of the action, as was held in Cole v Challenge Bank Ltd [2002] FCAFC 200; BC200203337 particularly Gray J at [14], [16] and applied by Gzell J in Voskuilen v Morisset Mega Markets [2005] NSWSC 34; BC200500478. Jambrecina v Official Trustee in Bankruptcy [2003] FCA 1352; BC200307089 was an attempt by a bankrupt to, among other things, stay proceedings until the trustee had made an election. It was sought to stay proceedings until this had been effected. In the absence of evidence of grounds upon which a trustee’s discretion was to be reviewed, and following Re Wheeler; Ex parte Wheeler (1994) 54 FCR

166 at 170 and Bethune v Newman (1996) 19 ACSR 99 at 103, relief under this head would be refused. In Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47; 157 ALR 83; 146 FLR 176, Wheeler J considered whether there was power in the trustee to assign a chose in action to a bankrupt during the term of the bankruptcy and concluded (WAR at 54) that there was no such power, noting that the scheme and purpose of the Act is directed at absolute control of the bankrupt’s property to the benefit of creditors. Her Honour observed (WAR at 52) that there would appear to be difficulties with such an assignment as the chose in action could well fall into the category of “after-acquired property” (s 58(1) (b)) and immediately revest in the trustee, and (WAR at 54) that the Act seeks to protect other parties from litigation commenced by a bankrupt who will neither be personally at risk as to costs, nor able to meet an order for costs. [81,250.17] Discontinuance and reinstatement Edelman J of the Supreme Court of WA in Duckworth v Water Corp (No 2) [2012] WASC 163; BC201203528 at [4] et seq states that the effect of discontinuing an action is not prodigiously dismissive. It might be possible for discontinued action to be reinstated after bankruptcy is discharged, or for fresh proceedings to be brought then. Beneficiaries can institute fresh proceedings in their own right, to enforce the trustee’s legal rights. See Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 369–370; 27 ALR 129; 54 ALJR 87; BC7900099 (Stephen, Mason, Aickin and Wilson JJ); Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47 at 58; 157 ALR 83; 146 FLR 176; BC9803639; Roberts v Gill and Co [2010] All ER (D) 180 (May); [2010] NLJR 768; [2011] 1 AC 240 at 256; [2010] UKSC 22 at [46] (Lord Collins); Alexander v Perpetual Trustees WA Ltd (2003) 216 CLR 109 at 129; 204 ALR 417; [2004] HCA 7; BC200400244 at [55] (Gleeson CJ, Gummow and Hayne JJ); Ramage v Waclaw (1988) 12 NSWLR 84 at 91 (Powell J). There is generally an inherent power to reinstate proceedings: Logan v Camm and Whitson (as executors of the estate of Leslie Robert Camm) [2008] QSC 255; BC200809138 at [32], [35] (Dutney J). Whether such proceedings at practical and whether other questions such as costs arise depend upon the facts in a particular case. [81,250.20] “notice of the action” — s 60(3) Lodgment of proof of debt is not “notice of the action” as required by s 60(3): Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd (1984) 55 ALR 594; 73 FLR 88. The “notice” should have direct reference to “the action”. In Queensland v Beames [2003] QSC 399; BC200307129 the state had a claim for a declaration that certain real property obtained by construction below the low water mark was its own. This was a counterclaim maintained by the bankrupt which was deemed abandoned by virtue of this section. The court held, following Stobbart v Mocnaj (1996) 16 WAR 318 at 323; Temsign Pty Ltd v Biscen Pty Ltd (1998) 20 WAR 47; 157 ALR 83; 146 FLR 176 at 187; Worrell v Foodlink Ltd [1998] FCA 1814; BC9807797; Campbell v Metway Leasing Ltd (2001) 188 ALR 100; BC200105464; [2001] FCA 1311 and Cousins v HTW Valuers (Cairns) Pty Ltd [2002] QSC 413; BC200207438 that although the particular proceeding was abandoned the cause of action continued. McMurdo J, declining to strike out the counterclaim, said at [16]: In Millane v Shire of Heidelberg [1928] VLR 52, Irvine CJ was asked to dismiss an action in these circumstances, ie where the trustee had elected to abandon the proceedings. He was concerned that the dismissal could be pleaded in bar as res judicata and he therefore declined to [page 285] dismiss it. His decision was applied by Shepherdson J in Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd (1984) 55 ALR 594 at 598. It is not entirely clear that the order sought here, which is the striking out of the counterclaim, would give rise to a res judicata. For example, a judgment

dismissing proceedings for want of prosecution, being an interlocutory order, does not give rise to a res judicata. It is unnecessary however to explore that further. If the striking out or dismissal of the counterclaim as the plaintiff now seeks would put paid to the causes of action involved within it, then it is an order which goes well beyond the effect of a deemed abandonment of the counterclaim, yet it is that deemed abandonment which is said to require the making of the order. Alternatively, if it has no effect beyond that of the deemed abandonment, the order serves no purpose. Because part of the counterclaim is effectively the inverse of the plaintiff’s claim, there is a risk that the orders sought on the counterclaim would also put paid to a defence of the plaintiff’s claim. The counterclaim, being abandoned, causes no burden to the plaintiff and there is no practical advantage to the plaintiff from its being struck out, except that it might well put paid to the case that the resurvey plan is accurate, and the plaintiff does not presently suggest that such a case is unarguable. A decision of the Court of Appeal (Pullin JA with whom Miller and Wheeler JJA agreed) in Willoughby v Clayton Utz (No 2) [2009] WASCA 29; BC200900218 is now the leading case in Western Australia on res judicata. The case dealt with the problem by applying the same point. The appellants who were engaged as litigants against a finance company settled the action. The respondents were the appellants’ solicitors. Because the appellants were bankrupt at the material time the official trustee assigned the cause of action to the respondents’ insurer. The master dismissed the first action on the ground that at the material time the appellants had no standing to bring the first action. The appellants then commenced a second action based on the same causes of action. Another master dismissed this action on the ground that the doctrine of res judicata meant that the second action was bound to be dismissed. The original appellants brought an appeal against that master’s decision on the ground that the master had erred in concluding that it was not arguable that the respondent was estopped from relying on a limitation defence which was otherwise bound to succeed. Pullin JA dealt extensively with the nature of res judicata as contrasted with issue estoppel, and with the nature of a final decision under the former. The question first to be dealt with was whether the appellants could revive their action, in the event that they had the right to bring their action. According to Pullin JA (at [27]), the judgment of Sheller and Priestley JJA in Pollnow v Armstrong [2000] NSWCA 245 “should be followed unless it is plainly wrong”. Sheller and Priestly JJ held: The passages preceding para 204 [of the third edition of Spencer, Bower on Res Judicata], and the cases cited in the second paragraph of para 204 itself for that matter, make it plain that the second paragraph is dealing with that branch of res judicata called issue estoppel, and not the main and original doctrine of res judicata, now frequently called in England cause of action estoppel. The two branches are substantially different and confusion between them would be lessened if the English habit of describing issue estoppel as a branch of res judicata were abandoned. At all events, none of the cases cited in para 204 gives the appellant in the present case any basis for escaping from the established rules of res judicata (properly so called and distinct from issue estoppel) referred to by Meagher JA in his reasons [42]. Pullin JA said at [30]: This is arguably analogous to a case which is dismissed because the plaintiff has sued in a tribunal which does not have jurisdiction. That will not support a plea of res judicata when the proceedings are commenced in the correct court or tribunal.”. The judge decided therefore (at [36]) that the decision of the second master was in error “in concluding that the defence of res judicata was bound to succeed. He should have concluded that it was arguable that it would not succeed because the Causes of Action had not been ‘litigated’ or decided ‘on the merits’”. But the judge held that the appellants were debarred by the Limitation Act 1935 (WA). The plaintiffs

could have proceeded with the action within time but had not. [page 286] [81,250.25] “personal injury” or “wrong done to the bankrupt” — s 60(4)(a) The meaning of this subsection was considered by Kirby P, with whom Samuels and Clarke JJA agreed, in Daemar v Industrial Commission of New South Wales (1982) 12 NSWLR 45; 79 ALR 591; 90 FLR 469. His Honour held that the claim for prerogative relief, declaration and damages did not fall within the exemption contemplated by s 60(4). He continued NSWLR at 50–5; ALR at 596–600: These provisions make it clear that the scheme and purpose of the Act is, upon the debtor’s becoming a bankrupt, to transfer property rights, including certainly the right to sue in respect of claims to property, from the bankrupt to his trustee. This is so, notwithstanding that it involves personal inconvenience to the bankrupt: see Faulkner v Bluett (1981) 52 FLR 115 at 119. Indeed, it is so notwithstanding the fact that it deprives the bankrupt of important civil rights which he or she would otherwise normally enjoy. It is of the essence of bankruptcy, as provided for by the Act, that property which belongs to the bankrupt, including choses in action (other than those which are specifically exempted) are vested upon bankruptcy in the bankrupt’s trustee … It could scarcely be otherwise for if it were, valuable interests which a bankrupt might have, in the form of choses in action would not be caught in the net cast by the very wide language of s 116(1) … It is necessary to keep the general purpose of the Act in mind, and the scheme by which those purposes are effected, when approaching the contentious issue about the operation of s 60 … … [t]he “action” commenced by this claimant is undoubtedly one whereby he seeks relief affecting his property. His is not the disinterested act of a public spirited citizen seeking, for whatever reason, to vindicate the rule of law. The whole purpose of his case is to seek specific redress against an order of the Commission which he claims to have been unjust and to have damaged him. His “action” is therefore of the very kind to which s 60(2) was designed to apply. Obviously, the prosecution of litigation commenced before bankruptcy by a person who later becomes bankrupt can involve the potential or actual diminution of the estate of the bankrupt available to his creditors. On occasion, it can, of course, provide a benefit to the creditors. That is precisely why Parliament has provided for the trustee to make an election. In Fitzpatrick v Keelty (2008) 99 ALD 696; [2008] FCA 35; BC200800226 Moore J applied these principles and held that to the extent that the claims answered the requirements of the section that they had no reasonable prospect of success. A defamation action is one of “personal injury” within the scope of s 60(4)(a) in so far as it relates to the personal character and reputation of the plaintiff. In Holmes v Goodyear Tyre & Rubber Co (Aust) Ltd (1984) 55 ALR 594; 73 FLR 88 the court held that the plaintiff was entitled to continue in his own name any part of the action whereby he claimed damages for personal injury. Further the words in s 60(4)(a) cannot be taken in isolation. The exemption provided by that subsection is limited to cases where it had been considered appropriate to sever the personal interests of the person subsequently made bankrupt from his or her property and to reserve to him or her the prosecution of and benefits derived from such litigation as not being legitimately entitlements of the creditors. In the present case the so-called wrong complained of was the very source of the financial problems that led to the bankruptcy and was not a wrong contemplated as being properly exempted from the operation of s 60(2): Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45; 79 ALR 591; 90 FLR 469. Greenwood J in Rogers v Asset Loan Co Pty Ltd [2006] FCA 434; BC200602418 considered the above concept and this and the various authorities upon the

question. See [42] et seq. See Fitzpatrick v Keelty, above, for an examination of authorities and Pelechowski v NSW Land and Housing Commission [2000] FCA 233; BC200000790. Professional negligence In Moss aka Miller v Eaglestone (2011) 285 ALR 656; 257 FLR 96; [2011] NSWCA 404; BC201110345 Alsopp P said at [8]: [8] In the light of the history and policy of the common law of bankruptcy in England and Australia, ss 60(4) and 116(2)(g) should not be construed so as to exclude a cause of action for professional negligence for failing to commence an action for defamation. The action for [page 287] defamation is plainly “an action … in respect of [a] personal injury or wrong” within ss 60(4) (and 116(2)(g)(i)) and the fruits of any such action would not form part of the property divisible amongst the creditors of the bankrupt. There is no reason in legal policy or in the language of the Act to treat an action for the loss of that action differently. The value of the lost chance of winning such an action should equally fall outside the divisible estate. Campbell and Young JJA agreed with the President. The President made an extensive and authoritative examination to support the above summary. [81,250.35] “In respect of” — s 60(1)(b)(i) The words “in respect of” in s 60(1)(b)(i) constitute a phrase having the “widest possible meaning of an expression intended to convey some connection or relation between the two subject matters to which the words refer”: per Mann CJ in Trustees Executors and Agency Co Ltd v Reilly [1941] VLR 110 at 111; State Government Insurance Office v Rees (1979) 144 CLR 549 at 561. The question is whether the proceeding sought to be stayed has a sufficient nexus with the non-payment of the provable debt: Re Sutherland-Cropper (1985) 11 FCR 156; 61 ALR 713. In Melnik v Melnik (2005) 144 FCR 141; 221 ALR 577; [2005] FCAFC 160; BC200505880 the Full Court of the Federal Court held, at [47], that the proceedings in the Family Court of Australia were proceedings “in respect of a provable debt” per s 58(3)(b) of the Bankruptcy Act. Further, those proceedings were proceedings “in respect of the non-payment of a provable debt”, within s 60(1)(b)(i), and also were proceedings “in consequence of his. refusal or failure to comply with an order of the [Family Court] … for the payment of a provable debt”, within s 60(1)(b)(ii). See [81,250.10] and the cases therein. [81,250.40] “for” — s 60(1)(b)(ii) There is a need to distinguish between an order made in order to obtain payment of a debt — covered by the wording of s 60(1)(b)(ii) — and an order made only as part of, or within, proceedings to obtain payment. See Re Sutherland-Cropper (1985) 11 FCR 156; 61 ALR 713. [81,250.43] Operation of s 60(2) In Owens v Comlaw (No 62) Pty Ltd [2006] VSCA 151; BC200605225, the Victorian Court of Appeal per Ashley JA, with whom Redlich JA agreed, expressed these conclusions at [42]: [42] … (2) Section 60(2) operates to stay an action which is on foot at the time when a person is made bankrupt until the trustee makes an election to prosecute or discontinue the same within the period made relevant by the giving of notice under subs (3). That is so where the proceeding is an “action” within the meaning of subs (5), provided always that it is not an action excluded from the operation of subs (2) by subs (4). …

(4) The question whether an action is one to which s 60(2) applies, assuming that it fits the description in subs (5), and is not excluded by operation of subs (4), is not necessarily dependent upon the action or its subject matter being “property” which vested in the trustee under s 58(1). There may nonetheless be such a connection between the action and the estate as to make s 60(2) applicable. … [81,250.45] “action” — s 60(5) The word “action” was given an extremely wide definition in s 60(5) of the Act. For a full discussion of the meaning of “action”: Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45; 79 ALR 591 at 599; 90 FLR 469. [81,250.50] “Debtor” In Commissioner for Motor Transport (NSW) v Train (1972) 127 CLR 396, Barwick CJ held that the use of the word “debtor” in the section does not exclude a bankrupt and the operation of the section is not restricted to the period between the presentation of the petition and the making of the order for sequestration. [page 288] In Re Rudy; Ex parte Rudy (1986) 13 FCR 175, Pincus J held that s 60(1)(b) might continue to apply notwithstanding the fact that the bankruptcy had been discharged by force of s 149(1). In his view, the expression “the debtor” is used in the provision only as a natural and convenient designation of the person by, or against, whom the petition spoken of in the section is presented and that the section exhaustively prescribes the limits of the times during which the jurisdiction under it may be exercised by the words “at any time after the presentation of the petition”. It is not intended to imply a further limitation by the words “the debtor”. [81,250.55] Application under s 60 — how made An application under s 60 must be instituted by filing an application in accordance with Form 5. The grounds on which the court will be asked to make the order in the application and the facts on which the applicant relies are to be stated in an affidavit filed in support of the application. An action of the type contemplated by s 60(2) means civil proceedings whether at law or in equity: s 60(5). The definition of “action” is probably explicable upon the basis that proceedings in equity are not to be called “actions”: Willison v Warburton (1873) 4 AJR 66. In Re Brown; Ex parte Taylor v Queensland Electricity Commission (1988) 19 FCR 180; 83 ALR 141, Pincus J held that the choice of the word “action” and the words “prosecute or discontinue the action” in s 60(2) suggested that the legislature had in mind court proceedings. Accordingly the making of a claim under an arbitration clause in a contract and proceedings towards arbitration did not constitute commencing an action within the meaning of s 60(2) and it followed that the arbitration proceedings were unaffected by the provisions of s 60(2) and (3). In Case X18 (1990) 90 ATC 219, the Administrative Appeals Tribunal held that a proceeding before it on review of a decision of the Commissioner of Taxation disallowing an objection by a taxpayer who subsequently became bankrupt was an “action” within the meaning of s 60(2) and (3) of the Act. As the term was appropriate to identify proceedings before the tribunal, constituted in consequence of a competent request for reference for independent review by the tribunal, the right to prosecute the tax appeal had passed to the bankrupt’s trustee.* The tribunal went on to consider that the action could not be characterised as an action within the meaning of s 60(4) of the Act and that subsection did not embrace an “action” which had, as its objective, a determination whether or not a bankrupt had been subjected to an excessive assessment of liability to income tax.

In Piwinski v Corporate Trustees Diocese of Armidale [1977] 1 NSWLR 266, the court held that a cause of action which accrued prior to bankruptcy, vested in the official receiver upon the making of a sequestration order against the debtor and that cause of action still vested in the official receiver notwithstanding the discharge upon bankruptcy of the debtor so that the only person who could proceed to recover the relief sought by the plaintiff was the official receiver. The distinction between s 60(2) and (4) is well illustrated by the decision in Wilson v United Counties Bank Ltd [1920] AC 102, where, in the same action, a claim by the official receiver in respect of the property of the bankrupt succeeded and resulted in the recovery of damages which went to augment the bankrupt’s estate. A claim was made by the bankrupt himself which, because it related to his personal reputation, was a claim which he might, himself, maintain personally. As to the status of a right to appeal a judgment, see generally [81,240.12]. [81,250.60] Going behind the order In Joossé v DCT [2004] FCAFC 245; BC200405721 at [3] the Full Court of the Federal Court (North and Finkelstein JJ, Jacobson J dissenting in part) concluded that: The court can go behind a judgment to determine whether it is founded on a real debt because a sequestration order should not be made on the petition of a person who is not a real creditor. The court has a discretion whether or not to go behind the judgment. The discretion is of a limited kind. In Wren v Mahony (1972) 126 CLR 212, Barwick CJ, with whom Windeyer and Owen JJ agreed, said (at 224–225) that “[t]he Court’s discretion … is a discretion to accept the judgment as satisfactory proof of [the petitioning creditor’s] debt. That discretion is not well [page 289] exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner.” Jacobson J, with whom the majority agreed, had concluded that the Chief Magistrate had erred in deciding it was necessary for her to go behind a County Court judgment. She had to determine whether to investigate the appellant’s claim that Bellhop Pty Ltd had been wound up voluntarily on 10 September 1999 by special resolution of its members. It was accepted that if the company had gone into liquidation on that day the appellant could not be made liable as a director for unremitted group tax under Divs 8 and 9 of Pt VI of the Income Tax Assessment Act 1936 (Cth). This was the basis for the judgment debt. Had the Chief Magistrate investigated the claim two issues would have arisen: (a) whether the members had passed the resolution to wind up the company, a matter over which there is controversy; and (b) if there was a resolution, on what date was it passed? She did not consider s 513B of the Corporations Act 2001, which provides that the voluntary winding up of a company is taken to commence on the day that the resolution was passed. The Full Court determined that she was in error in deciding not to go behind the judgment. What remained in issue was what the appellant had to do to establish that the appeal court had jurisdiction. The majority held at [6] that “it is only necessary for the appellant to show that there is ‘substantial reason for questioning whether there is … a debt’”. Jacobson J would have required a minute establishing that the resolution was passed on the day in question. Accordingly the matter was remitted to the Federal Magistrates Court for further investigation. Joosé was considered in Burmingham v Colman Francis Moloney trading as Davies Moloney [2011] FCA 1490; BC201110501 and the principle followed at [13].

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*Author’s note: This conclusion may be doubted in view of Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1: see [81,240.12].

[81,255] Actions by bankrupt partner’s trustee 61 (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. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(6) This section applies to and in relation to joint debtors who are not partners as if they were partners.

[81,260] Actions on joint contracts 62 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. [page 290]

[81,265] Death of bankrupt

63 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. [s 63 am Act 44 of 1996 s 3 and Sch 2] SECTION 63 GENERALLY [81,265.5] Construction of s 63 In Re Hardy; Hardy v Farmer [1896] 1 Ch 904, Chitty J said that the construction put upon the English section corresponding to s 63 is a general one. In Re Buckle (1969) 15 FLR 460, Gibbs J, as he then was, held that the section is not limited to particular proceedings that may be pending at the date of the death, but extends to the bankruptcy proceedings generally. The last proceedings necessary for the due administration of the bankrupt’s estate may be taken as far as possible as though the bankrupt were still alive. Accordingly in Re Buckle, above, the court made an order under former s 131(2) (relating to income contributions by bankrupts) notwithstanding the death of the bankrupt. In Re Wilkinson (1970) 16 FLR 414, the court held that a legal personal representative had sufficient status to apply for an order of annulment notwithstanding the demise of the bankrupt, but there appears to have been no power under the Act to make an order of discharge after the death of a bankrupt: Re Wilkinson, above; Re Curtis (1970) 17 FLR 327. Now, discharge occurs only by operation of the Act.

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DIVISION 5 — MEETINGS OF CREDITORS [Div 5 am Act 119 of 1987 s 24; Act 9 of 1992 s 9]

Subdivision A — Preliminary [Subdiv A insrt Act 9 of 1992 s 9]

[81,305] Definitions *63A (1) In this Division, unless the contrary intention appears: bankrupt, in relation to a meeting of the creditors of 2 or more bankrupts, means each bankrupt. creditors and their representatives, in relation to a meeting, means: (a) the creditors who are entitled to vote at the meeting and are participating in person or by telephone in the meeting; and (b) the persons participating in person or by telephone in the meeting as proxies or attorneys of any other creditors who are

entitled to vote at the meeting. joint bankruptcy means: (a) a bankruptcy that occurs as the result of a sequestration order made under section 52, being an order made on a petition presented under section 46; or (b) a bankruptcy that occurs by force of section 56E or 57; or [page 291] (c) bankruptcies in respect of which an order under section 53 has been made; or (d) bankruptcies that occur under section 55 where: (i) the date of each bankruptcy is the same; and (ii) immediately before the bankruptcies occurred, the bankrupts were joint debtors or partners who owned property jointly. [def am Act 44 of 1996 s 3 and Sch 1]

meeting means a meeting of the creditors of a bankrupt or a meeting of the creditors of any one or more of the bankrupts who were made bankrupt in a joint bankruptcy. minutes secretary, in relation to a meeting, means a person appointed under section 64L to record the minutes of the meeting. President, in relation to a meeting, means the person elected under section 64P to preside at the meeting. working day, in relation to a proposed meeting, means a day other than a Saturday, a Sunday or a public holiday in the place where the meeting is proposed to be held. (2) A reference in this Division to a person participating in person in a meeting is a reference to a person being physically present at the meeting. *Editor’s note: Section 51(5) of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as

follows: “51 … (5) The amendments of the Principal Act made by sections 9 to 14 (inclusive) and 17 of Act apply only in respect of meetings convened by notices given after the commencement of the amendments made by the section concerned and the provisions of the Principal Act that are amended or repealed by those sections continue to apply, despite their amendment or repeal, in respect of meetings convened by notices given before the commencement of those amendments.” See [79,950] following the Table of Amendments to this Act for the full text of transitional provisions.

[81,310] Trustee’s representative *63B (1) The trustee of a bankrupt may, by signed writing, appoint a person to represent the trustee at a meeting. (2) If the trustee is not personally present at a meeting, then, unless the contrary intention appears, a reference in this Division to the trustee, in respect of matters occurring at that meeting, is a reference to a person so appointed to represent the trustee at that meeting. SECTION 63B GENERALLY [81,310.5] General In Deputy Commissioner of Taxation v Prentice (Trustee) [2011] FCA 1535; BC201110599 Logan J considered the meaning of this section about which there had been various misconceptions and concluded, first at [11]: It can be seen from the terms of s 63B that it vests a discretion in a trustee. It follows that the Commissioner’s letter of 14 December 2011 evidences a misconception as to the meaning and effect of that section. Assuming that a direction could be made, the direction could do no more than require that a discretion be exercised, but not exercised in any particular way. If, however, the discretion were exercised, this Court would have jurisdiction to review the exercise of that discretion pursuant to s 178 of the Bankruptcy Act. He then applied Frost v Sheahan (Trustee) [2009] FCAFC 20; BC200901098 at [8] which adopted the following statement of principle: 1. Section 178 confers a “supervisory jurisdiction over the conduct of the trustee”: Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124 at 132 per Brennan CJ, Gaudron and McHugh JJ. The section confers on the Court a very wide discretion: McGoldrick v Official Trustee in Bankruptcy [1993] FCA 636; (1993) 47 FCR 547 at 552– 553. 2. It is not necessary for an applicant for relief under the section to show that the trustee’s decision was absurd, or unreasonable or taken in bad faith. The Court has a wide discretion to make such order as seems appropriate in the circumstances of the case: Re [page 292]

Tyndall; Ex parte Official Receiver (1977) 30 FLR 6 at 9–10; [1977] FCA 15; 17 ALR 182 at 186 per Deane J. At the same time, the Court will be slow to make orders which will have the effect of interfering in the day-to-day administration of a bankrupt’s estate and, in cases involving an exercise of business or commercial judgment, will place considerable weight on the trustee’s decision. Furthermore, a Court will not intervene under s 178 simply because the Judge forms a different view from that of the trustee. 3. An order may be made under s 178 even if the trustee’s decision was correct on the material before him, if, for example, additional material is put before the Court. See [82,640.2] below.

____________________ *Transitional provisions: See Editor’s note at [81,305].

Subdivision B — Convening of meetings [Subdiv B insrt Act 9 of 1992 s 10]

[81,315] Trustee to convene meetings *64 (1) The trustee must convene a meeting of the creditors of a bankrupt: (a) whenever the creditors so direct by resolution; and (b) whenever so requested in writing by at least one-fourth in value of the creditors; and (c) whenever so requested in writing by less than one-fourth in value of the creditors, being a creditor who has, or creditors who together have, lodged with the trustee sufficient security for the cost of holding the meeting. (2) The trustee may convene at any time a meeting of the creditors of a bankrupt. (3) When convening a meeting, the trustee must consider whether the proposed time and place is convenient for the creditors. [subs (3) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 64 subst Act 119 of 1987 s 25; am Act 9 of 1992 s 11] SECTION 64 GENERALLY [81,315.10] Appointment of registered trustee For the appointment of a registered trustee in lieu of the official trustee, see s 157. [81,315.15] Appointment of committee of inspection The creditors may appoint a committee of inspection for the purpose of advising and superintending the trustee (see s 70).

[81,315.20] Part X meetings See regs 10.04–10.06.

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[81,315A] Persons to whom notice of meeting to be given *64A (1) If: (a) the bankrupt has told the trustee, or the trustee has otherwise found out, that a person is a creditor of the bankrupt; and (b) the trustee is aware of one or more of the following: (i) the address of a place of business of the person; (ii) the address of a place of residence of the person or, in the case of a company, the address of its registered office; (iii) an address to which notices may be sent to the person; (iv) a document exchange number to which notices may be sent to the person; [page 293] (v) a fax number to which notices may be sent to the person; (vi) an email address to which notices may be sent to the person; the trustee must give notice to the person of any meeting of the bankrupt’s creditors. [subs (1) am Act 80 of 2004 s 3 and Sch 5, opn 1 Dec 2004; Act 31 of 2014 s 3 and Sch 4 items 10, 60, opn 24 June 2014]

(2) Notice of a meeting must be given in a manner specified in the regulations. [subs (2) subst Act 80 of 2004 s 3 and Sch 5, opn 1 Dec 2004] [s 64A insrt Act 9 of 1992 s 12]

[81,315B] Certain matters to be included in notice of meeting *64B (1) The notice must set out the full name and the address of a place

of residence of the bankrupt. (2) If the meeting is the first meeting of the bankrupt’s creditors, the notice must set out any trade or business name under which the bankrupt carried on business. (3) The notice must set out the time, date and place at which the meeting is to be held. (4) The notice must set out the agenda for the meeting and must state that additional matters may be added to the agenda with the leave of the meeting. (5) The notice must state that a creditor, or a proxy or attorney of a creditor, may make a statement at the meeting at the appropriate time during the proceedings. [s 64B insrt Act 9 of 1992 s 12] SECTION 64B GENERALLY [81,315B.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

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[81,315C] If telephone conference facilities are available *64C If telephone conference facilities are expected to be available at the place where the meeting is to be held and the trustee considers that, having regard to all the circumstances, it will be appropriate to use those facilities, the notice must: (a) set out the relevant telephone number; and (b) tell the creditors that a creditor, or the proxy or attorney of a creditor, who wishes to participate in the meeting by telephone must give to the trustee, not later than the second-last working day before the day on which the meeting is to be held, a written statement setting out: (i) the name of the creditor and of the proxy or attorney (if any); and (ii) an address to which notices to the creditor, proxy or attorney may be sent; and (iii) a telephone number at which the creditor, proxy or attorney

may be contacted; and (iv) any fax number to which notices to the creditor, proxy or attorney may be sent; and (c) also tell the creditors that a creditor, or the proxy or attorney of a creditor, who participates in the meeting by telephone must pay any costs incurred by the creditor, proxy or attorney in so participating and is not entitled to be reimbursed those costs out of the bankrupt’s estate. [s 64C insrt Act 9 of 1992 s 12; am Act 31 of 2014 s 3 and Sch 4 item 60, opn 24 June 2014] *Transitional provisions: See Editor’s note at [81,305].

[page 294]

[81,315D] Statement by creditor as to amount of debt *64D The notice must state that each creditor must give to the trustee at or before the meeting a written statement setting out: (a) the amount in respect of which the creditor claims that the bankrupt is indebted to the creditor; and (aa) if the creditor has been assigned a debt that the bankrupt owes to the creditor — the value of the consideration that the creditor gave for the assignment of the debt; and (b) if the meeting is the first meeting of the bankrupt’s creditors: (i) whether the creditor holds a security in respect of the debt and, if so, the value of the security as estimated by the creditor and the amount of the creditor’s debt after deducting that value; and (ii) brief particulars of the transaction and circumstances that gave rise to the debt. [s 64D insrt Act 9 of 1992 s 12; am Act 44 of 1996 s 3 and Sch 1]

[81,315E] Notice about voting by proxy

*64E (1) The notice must have attached to it a form for use in appointing a proxy. (2) The notice must tell the creditors that, where a creditor wishes to appoint a person to represent the creditor at the meeting as the creditor’s proxy, the creditor must complete the form of appointment of proxy and either: (a) arrange for the proxy to give the completed form to the trustee at the meeting; or (b) send the completed form with the statement given by the creditor to the trustee in accordance with section 64D. [s 64E insrt Act 9 of 1992 s 12] SECTION 64E GENERALLY [81,315E.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

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[81,315F] Notice about appointment of attorney *64F The notice must tell the creditors that, where a creditor wishes to be represented at the meeting by an attorney, the creditor must arrange for the power of attorney to be produced to the trustee at or before the meeting. [s 64F insrt Act 9 of 1992 s 12]

[81,315G] Agenda to be set out in notice of meeting *64G The agenda to be set out in a notice of meeting in accordance with subsection 64B(4) is to comprise the following items: (a) opening of the meeting and introduction of the trustee and the bankrupt; (b) appointment of a minutes secretary; (c) announcement of appointment of proxies and attorneys and circulation of instruments appointing proxies and copies of powers of attorney for inspection by the persons present; (d) determination whether a quorum exists;

[page 295] (e) election of a person to preside at the remainder of the meeting; (f) proposal of a motion “that the meeting is being held at a time, date and place that are convenient to the majority of creditors”; (g) if the meeting is the first meeting — tabling of the bankrupt’s statement of affairs; (h) statements by the trustee and by creditors and their representatives; (i) questions to the trustee and to the bankrupt; (j) President’s summary of matters raised in statements and questions; (k) proposal of other motions (if any); (l) if the trustee is a registered trustee who does not wish to be remunerated as prescribed by the regulations — if the meeting is the first meeting, approval of the remuneration proposed by the trustee, or, if the meeting is a subsequent meeting, a statement by the trustee of the amount of remuneration drawn before the meeting was held; (m) appointment of committee of inspection (if required); (n) any other business; (o) fixing of time, date and place for another meeting; (p) closure of meeting. [s 64G insrt Act 9 of 1992 s 12; am Act 44 of 1996 s 3 and Sch 1] SECTION 64G GENERALLY [81,315G.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________ *Transitional provisions: See Editor’s note at [81,305].

Subdivision C — Procedure before opening of meeting [Subdiv C insrt Act 9 of 1992 s 12]

[81,315H] Creditors, or proxies or attorneys,

participating by telephone *64H (1) If a trustee has considered it appropriate that telephone conference facilities may be used for a meeting of creditors pursuant to section 64C and if a creditor, or the proxy or attorney of the creditor, who wishes to participate by telephone in the meeting has satisfied the requirements of paragraph 64C(b), in so far as they are applicable, the trustee must take all reasonable steps to ensure that the creditor, or the proxy or attorney of the creditor, is contacted on the telephone number provided by that person before the start of the meeting, and if such a person is so contacted the trustee must take all reasonable steps to ensure that that person can hear the proceedings, and can be heard, by means of those facilities, so that that person can participate in the meeting. (2) A creditor who, or whose proxy or attorney, so participates in the meeting by telephone is taken, for all purposes of this Act, to be present personally at the meeting.

[81,315J] Preparation of attendance record *64J (1) The trustee must prepare an attendance record in accordance with subsection (2) for the purposes of the meeting and must keep the record in his or her possession after the conclusion of the meeting. [page 296] (2) The attendance record must include 5 columns and must indicate that particulars of creditors are to be entered as follows: (a) the name of each creditor participating in person or by telephone, or represented by a proxy or attorney participating in person or by telephone, is to be entered in the first column; (b) if a creditor is so represented by a proxy or attorney, the name of the proxy or attorney is to be entered in the second column opposite to the name of the creditor in the first column; (c) in respect of each creditor whose name is entered in the first column:

the value of the creditor’s debt is to be entered in the third column; and (ii) if the debt is secured in whole or in part: (A) the nature, and the value as estimated by the creditor, of the security is to be entered in the fourth column; and (B) the balance of the creditor’s debt after deducting that value is to be entered in the fifth column. (3) The attendance record must also include provision for recording whether the bankrupt is present and the names of any other persons present who are not creditors or proxies or attorneys of creditors, including provision for recording the capacity in which those other persons are present. (i)

*Transitional provisions: See Editor’s note at [81,305].

Subdivision D — Procedure at meetings [Subdiv D insrt Act 9 of 1992 s 12]

[81,315K] Opening of meeting *64K (1) The trustee is to preside at the meeting until a person is appointed to preside under section 64P. (2) The trustee must open the meeting and introduce himself or herself and, if the bankrupt is present, introduce the bankrupt. (3) If the bankrupt is not present, the trustee must announce that fact and, if the trustee is aware of any reason why the bankrupt is not present, must state that reason. (4) The trustee must circulate the attendance record prepared in accordance with section 64J among the creditors, and creditors’ proxies and attorneys, participating in person and must ask them to enter in that record the relevant particulars, as required by the attendance record, of: (a) the creditors who, or whose proxies and attorneys, are so participating in person; and (b) those proxies and attorneys; and (c) the debts of those creditors. (5) The trustee must enter in the attendance record the relevant particulars,

as required by the attendance record, of: (a) creditors who, or whose proxies or attorneys, are participating in the meeting by telephone; and (b) those proxies and attorneys; and (c) the debts of those creditors. (6) The trustee must state in the attendance record whether or not the bankrupt is present and, if the bankrupt is not present and the trustee is aware of any reason why the bankrupt is not present, must set out that reason. *Transitional provisions: See Editor’s note at [81,305].

[page 297]

[81,315L] Appointment of minutes secretary *64L (1) The trustee must then: (a) invite the creditors and their representatives to propose a motion appointing a person to record the minutes of the meeting; or (b) if no such motion is passed — appoint a person to record those minutes. (2) Anyone participating in person in the meeting, whether or not a creditor or a proxy or attorney of a creditor, and including the trustee but not including the bankrupt, is eligible for appointment as the minutes secretary. (3) If a person appointed to record the minutes of a meeting subsequently refuses, or is unable, to record, or to continue to record, those minutes, subsections (1) and (2) apply for the purpose of appointing another person to record the minutes.

[81,315M] Announcement of proxies and attorneys *64M (1) The trustee must then announce: (a) the names of the creditors who are not participating in person or by telephone but whose proxies or attorneys are participating in person or by telephone; and (b) the names of the proxies and attorneys.

Note: Under subsection 64ZB(3), a proxy or attorney may be allowed to vote even though the appointing instrument is lodged after the announcement.

(2) The trustee must then circulate the instruments appointing proxies, and the powers of attorney or copies of the powers of attorney, for inspection by persons present at the meeting.

[81,315N] Quorum *64N (1) The trustee must then determine whether a quorum is present. (2) A quorum is constituted by: (a) the presence in person of the trustee (or the trustee’s representative); and (b) a creditor, or a proxy or attorney of a creditor, participating in person or by telephone. Note: A meeting requires at least 2 persons. Therefore the person covered by paragraph (2)(a) cannot also be the proxy or attorney of the creditor covered by paragraph (2)(b). [subs (2) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) If a quorum is not present within 30 minutes after the time fixed for the meeting, the meeting is adjourned to a time, date and place fixed by the trustee. (4) The date of the adjourned meeting must be not earlier than 7 days nor later than 14 days from the date of the original meeting. (5) The time and place of the adjourned meeting need not be the same as the time and place of the original meeting. (6) The following provisions of this Division apply to any meeting at which a quorum is present within 30 minutes after the time fixed for that meeting. (7) To remove any doubt, but without limiting by implication the application of subsection 63B(2) to other references in this Division to the trustee, the reference in subparagraph (2)(a)(ii) of this section to the presence in person of the trustee includes a reference to the presence in person of a person appointed under subsection 63B(1) to represent the trustee. *Transitional provisions: See Editor’s note at [81,305].

[page 298]

[81,315P] Election of person to preside at meeting *64P (1) The trustee must: (a) invite the creditors and their representatives to nominate a person for election to preside at the meeting; or (b) if no person is so nominated — nominate a person for election to preside at the meeting. (2) Anyone participating in person in the meeting, whether or not a creditor or a proxy or attorney of a creditor, and including the trustee but not including the bankrupt, is eligible to be nominated for appointment, and may be elected, to preside at the meeting. (3) If only one person is nominated, that person is taken to be elected to preside at the meeting. (4) If 2 or more persons are nominated, an election is to be held to determine which of the persons nominated is to preside at the meeting and the person who receives the greatest number of votes (whether or not a majority of the votes cast) is taken to be elected to preside at the meeting. (5) Subject to subsection (6), voting at the election is to be on the voices. (6) If the trustee is unable to determine which of the persons nominated received the greatest number of the votes on the voices, the trustee must ask each creditor, and each proxy or attorney, participating in person or by telephone to state for which nominee the creditor, proxy or attorney is casting a vote or whether the creditor, proxy or attorney is abstaining from casting a vote. (7) If 2 or more persons each receive the greatest number of votes, the trustee must decide by lot which of those persons is to be chosen to preside at the meeting, and the person so chosen is taken to be elected to preside at the meeting. (8) A person elected under this section to preside at the meeting is to preside at all times after he or she is elected. (9) If a person so elected subsequently refuses, or is unable, to preside, or to continue to preside, at the meeting, the preceding provisions of this section apply for the purpose of electing another person to preside at the meeting.

[81,315Q] Whether holding of meeting is convenient

to majority of creditors *64Q (1) As soon as the President is elected, he or she must invite the creditors and their representatives to propose a motion that the meeting is being held at a time, date and place that are convenient to a majority of creditors. (2) If no such motion is proposed, or such a motion is proposed but is not passed, the meeting is adjourned to such time, date and place as the meeting resolves.

[81,315R] Tabling of bankrupt’s statement of affairs *64R (1) If the meeting is the first meeting, the President must then request the trustee to lay the bankrupt’s statement of affairs before the meeting and the trustee must comply with the request. (2) If any of the creditors and their representatives requests that a creditor be given a copy of the statement of affairs, the trustee must comply with the request as soon as reasonably practicable. [page 299] SECTION 64R GENERALLY [81,315R.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________ *Transitional provisions: See Editor’s note at [81,305].

[81,315S] Statements and questions 64S (1) The President must then invite the trustee and the creditors and their representatives to make statements to the meeting. (2) After the statements (if any) have been made, the President must invite the creditors and their representatives to ask questions of the trustee and, if

the bankrupt is present, of the bankrupt. (3) After the statements (if any) have been made and the questions (if any) have been asked, the President may, if he or she wishes to do so, summarise the matters raised in any such statements and in any questions asked of, and answers given by, the trustee and the bankrupt. SECTION 64S GENERALLY [81,315S.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________

[81,315T] Motions 64T The President must then invite the creditors and their representatives to propose any relevant motions. SECTION 64T GENERALLY [81,315T.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________

[81,315U] Remuneration of registered trustee *64U (1) If the meeting is the first meeting of the bankrupt’s creditors and the trustee is a registered trustee, the President must then ask the trustee to state the basis on which the trustee wishes to be remunerated. (2) [subs (2) rep Act 106 of 2010 s 3 and Sch 1[1], opn 1 Dec 2010] (3) [subs (3) rep Act 106 of 2010 s 3 and Sch 1[1], opn 1 Dec 2010] (4) [subs (4) rep Act 106 of 2010 s 3 and Sch 1[1], opn 1 Dec 2010] (5) The trustee must then state the basis on which the trustee wishes to be remunerated. The statement must: (a) if the trustee proposes to charge on a time-cost basis: (i) if there is only one rate at which the remuneration is to be calculated — state that rate; or (ii) otherwise — state the respective rates at which the

remuneration of the trustee and the other persons who will be assisting, or will be likely to assist, the trustee in the performance of his or her duties are to be calculated; or [page 300] (b) if the trustee proposes to charge on the basis of a commission upon money received by the trustee — state the rate of that commission; and must also state the periods at which the trustee proposes to withdraw funds from the bankrupt’s estate in respect of the trustee’s remuneration. [subs (5) am Act 106 of 2010 s 3 and Sch 1[2], opn 1 Dec 2010]

(5A) The statement under subsection (5) must also include: (a) an estimate of the total amount of the trustee’s remuneration; and (b) an explanation of the likely impact of that remuneration on the dividends (if any) to creditors. [subs (5A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 106 of 2010 s 3 and Sch 1[3], opn 1 Dec 2010]

(6) Any of the creditors and their representatives may ask the trustee questions about the proposed remuneration of the trustee and, if such a question is asked, the trustee must answer it. (6A) The President must invite the creditors and their representatives to propose a motion that the trustee be remunerated in accordance with the statement and, if no such motion is proposed, the trustee may propose such a motion. [subs (6A) insrt Act 106 of 2010 s 3 and Sch 1[4], opn 1 Dec 2010]

(7) Any of the creditors and their representatives may move an amendment to a motion proposed in accordance with subsection (6A) so as to change in any way the basis on which the trustee is to charge or the periods at which the trustee may withdraw funds in respect of his or her remuneration or to refer the fixing of the trustee’s remuneration to a committee of inspection. [subs (7) am Act 106 of 2010 s 3 and Sch 1[5], opn 1 Dec 2010]

(7A) If: (a) the meeting is the first meeting of the bankrupt’s creditors and the trustee is a registered trustee; and

(b) the following apply: (i) before the meeting the trustee had given a notice under section 64ZBA that contained a proposal relating to how the trustee was to be remunerated; (ii) the notice satisfied subsections 64ZBA(2) and (2A); (iii) the proposal was taken to have been passed under subsection 64ZBA(3); then subsections (1) to (7) of this section do not apply in relation to the meeting. [subs (7A) insrt Act 106 of 2010 s 3 and Sch 1[6], opn 1 Dec 2010]

(8) If the meeting is not the first meeting of the bankrupt’s creditors and the trustee is a registered trustee, the President must request the trustee to lay before the meeting a statement of the amount of remuneration drawn by the trustee from the funds of the bankrupt’s estate before the meeting was held and the trustee must comply with the request. SECTION 64U GENERALLY [81,315U.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________ *Transitional provisions: See Editor’s note at [81,305].

[81,315V] Appointment of committee of inspection *64V The President must then tell the creditors and their representatives that, if they wish to appoint a committee of inspection, a motion for the appointment of such a committee may be proposed and must explain to them the effect of section 70. [page 301] SECTION 64V GENERALLY [81,315V.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________

[81,315W] Other business *64W If no motion is proposed for the appointment of a committee of inspection, or a motion for the appointment of such a committee has been passed or defeated, the President must then invite the creditors and their representatives to raise any other matters relevant to the bankruptcy. SECTION 64W GENERALLY [81,315W.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________

[81,315X] Next meeting *64X (1) The President must then invite the creditors and their representatives to propose a motion fixing a time, date and place for another meeting. (2) The passing of a resolution fixing a time, date and place for another meeting does not prevent the trustee from convening any other meeting before or after the date so fixed. SECTION 64X GENERALLY [81,315X.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________

Subdivision E — Miscellaneous [Subdiv E insrt Act 9 of 1992 s 12]

[81,315Y] Adjournment of meeting *64Y (1) If, at any time during a meeting, the meeting is adjourned, or a resolution is passed for the adjournment of the meeting: (a) the adjourned meeting is taken to be a continuation of the original meeting; and

(b) without limiting the application of paragraph (a): (i) the persons who carried out the duties of President and minutes secretary at the original meeting are to continue to do so at the adjourned meeting; and (ii) any matters required to be dealt with at the original meeting that were not so dealt with are to be dealt with at the adjourned meeting. (2) The trustee must give notice of the time, date and place of the adjourned meeting to each creditor in accordance with subsection 64A(2).

[81,315Z] Duties of minutes secretary *64Z (1) It is the duty of the minutes secretary of a meeting to take minutes in accordance with this section recording the business transacted at the meeting. [page 302] (2) The minutes may, but need not, record full particulars of statements made, questions asked and answers given at the meeting but must contain sufficient particulars to show that the meeting dealt with all matters that are required by this Division to be dealt with. (3) Without limiting the generality of subsection (2), the minutes must record: (a) the name, and the address of a place of residence or business, of the minutes secretary or, if there were different minutes secretaries at different times during the meeting, of each minutes secretary; and (b) the votes cast for each nominee at an election of a person to preside at the meeting (other than an election at which voting took place on the voices); and (c) the name, and the address of a place of residence or business, of the President or, if there were different Presidents at different times during the meeting, of each President. (4) The minutes must record the precise words of each motion proposed at

the meeting and of any amendment proposed to such a motion. (5) If a resolution or a special resolution is passed at the meeting: (a) the minutes secretary must prepare a certificate recording the precise words of the resolution or special resolution; and (b) the President and the minutes secretary must each sign the certificate; and (c) the minutes secretary must give the certificate: (i) to the trustee; or (ii) in the case of a resolution passed under section 181 removing the trustee — to the trustee appointed in place of the trustee removed and to the Official Receiver; and (d) the trustee to whom the certificate is given must keep it and allow the bankrupt, a creditor or an authorised employee to inspect it at any reasonable time. [subs (5) am Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(6) If a motion is passed or defeated on the voices, the minutes must record that fact and, if a person who voted against a motion that was passed on the voices asks that the person’s dissent be recorded in the minutes, that dissent must be so recorded. (7) The minutes must record the value of each creditor’s debt and the total value of the debts of all the creditors. (8) If a poll is taken on a motion, the minutes must record: (a) the number and names of the creditors (if any) who voted in favour of the motion and the total value of their debts; and (b) the number and names of the creditors (if any) who voted against the motion and the total value of their debts; and (c) the number and names of the creditors (if any) who abstained from voting on the motion and the total value of their debts. (9) A reference in this section to the value of a creditor’s debt is, if the creditor is a secured creditor, a reference to the value of that debt after deducting the value of the security as estimated by the creditor in the statement given by the creditor to the trustee under section 64D. [subs (9) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(10) The minutes must be dated, and be signed by the President and the minutes secretary, not later than 14 days after the date of the meeting.

*Transitional provisions: See Editor’s note at [81,305].

[page 303]

[81,315ZA] Entitlement to vote *64ZA (1) This section applies to voting: (a) at an election under section 64P of a person to preside at a meeting; and (b) on any motion proposed at a meeting or an amendment proposed to such a motion. (2) In this section: creditor means a creditor who, or whose proxy or attorney, participates in the meeting in person or by telephone. (3) A person other than a creditor is not entitled to vote. (4) Subject to subsections (5) and (6), each creditor is entitled to vote and has one vote. (5) If a creditor is a secured creditor, the creditor is not entitled to vote unless the debt, or the total amount of the debts, owed to the creditor exceeds the amount estimated by the creditor in the statement given to the trustee under section 64D to be the value of the security. [subs (5) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(6) A creditor who has failed to give to the trustee a statement in accordance with section 64D is not entitled to vote. (7) A creditor is not disqualified from voting merely because the creditor is the President or the minutes secretary. (8) The trustee may determine any question that arises as to the entitlement of a person to vote. (9) If the trustee needs a period in which to determine a question referred to in subsection (8), the meeting is to be adjourned to such time, date and place as the meeting resolves, being a date not later than 14 days after the date of the original meeting, for the purpose of enabling the trustee to determine the question.

SECTION 64ZA GENERALLY [81,315ZA.5] Right to vote at meeting of creditors This section has few cases but one of them is Westpac Banking Corporation v Dixon [2011] FMCA 211; BC201104359. The point at issue was whether the bank had given its s 64D statement to the trustee by the time of the meeting of creditors in accordance with s 64ZA(6). The trustee did not have personal notice or possession of it but his office had received it. But, having regard to ss 14(3) and (4) of the Electronic Transactions Act 1999 (Cth) the answer to that question depends on whether the trustee had a dedicated system. It should be noted that s 64ZF states that: a meeting or anything down at the meeting, is not invalid because the requirements of this subdivision has not been strictly complied with have the requirement has been substantially complied with. The court at [24] was of the view that no substantial prejudice was incurred by the bank, and accordingly dismissed the application. The court relied on s 222(1)(e) (as to which see [83,390.7] below) to provide the authority for its decision.

____________________

[81,315ZB] Manner of voting *64ZB (1) A creditor who participates in a meeting in person or by telephone may cast the creditor’s vote personally and not otherwise. [page 304] (2) Subject to subsections (3) and (5), the vote of a creditor who is not participating in a meeting in person or by telephone may be cast by a proxy duly appointed by the creditor, or by an attorney duly authorised by the creditor under a power of attorney, being a proxy or attorney participating in the meeting in person or by telephone, and the casting of a creditor’s vote by such a proxy or attorney is taken to constitute the casting of a vote by the creditor. (3) A person claiming to be the proxy of a creditor is not entitled to vote as proxy unless the instrument of appointment has been lodged with the President (or with the trustee, before the President was elected), either before or after the announcement is made under section 64M about the appointment of proxies and attorneys. [subs (3) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3A) If an instrument of appointment of a proxy is lodged with the President in substitution for another instrument with an earlier date, then the later instrument commences to have effect (from the time it is lodged with the President) in substitution for the earlier instrument. [subs (3A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) A creditor’s proxy or attorney is not disqualified from casting the creditor’s vote merely because the proxy or attorney is the trustee, the President or the minutes secretary. (5) If the trustee or an associate of the trustee is a creditor’s proxy or attorney, the trustee or associate may not cast the creditor’s vote on a motion relating to the trustee’s remuneration unless the instrument appointing the proxy or the power of attorney, as the case may be, expressly authorises the trustee or associate to cast the creditor’s vote on such a motion. (6) For the purposes of subsection (5), a person is an associate of the

trustee if the person is: (a) a partner of the trustee; or (b) an employee of the trustee; or (c) a solicitor for the trustee, for a partnership in which the trustee is a partner, or for a person or partnership that employs the trustee. (7) A motion proposed at a meeting is to be resolved: (a) subject to paragraph (b) — on the voices; or (b) if: (i) the President is unable to determine the result of the voting on the voices; or (ii) any of the creditors and their representatives requests a poll, whether the request is made before the motion is put to the vote on the voices or after the President announces the result of the vote on the voices; or (iii) the motion relates to a matter in respect of which this Act requires the passing of a resolution or special resolution; by a poll taken: (iv) by a show of hands or written votes of creditors, or proxies or attorneys, participating in person; and (v) by statements made by telephone to the President by creditors, or proxies or attorneys, participating by telephone. (8) For the purposes of determining whether a motion proposed at the meeting is resolved, the value of a creditor who: (a) has been assigned a debt; and (b) is present at the meeting personally, by telephone, by attorney or by proxy; and (c) is voting on the motion; [page 305] is to be worked out by taking the value of the assigned debt to be equal to the value of the consideration that the creditor gave for the assignment of the debt.

[subs (8) insrt Act 44 of 1996 s 3 and Sch 1] SECTION 64ZB GENERALLY [81,315ZB.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

____________________ *Transitional provisions: See Editor’s note at [81,305].

[81,315ZBA] Creditors’ resolution without meeting 64ZBA (1) The trustee may at any time put a proposal to the creditors by giving a notice under this section. (2) The notice must: (a) contain a single proposal; and (b) include a statement of the reasons for the proposal and the likely impact it will have on creditors (if it is passed); and (c) be given to each creditor who would be entitled under section 64A to receive notice of a meeting of creditors; and (d) invite the creditor to either: (i) vote Yes or No on the proposal; or (ii) object to the proposal being resolved without a meeting of creditors; and (e) specify a time by which replies must be received by the trustee (in order to be taken into account). (2A) If the proposal relates to how the trustee is to be remunerated, the notice must also: (a) if the trustee proposes to charge on a time-cost basis: (i) if there is only one rate at which the remuneration is to be calculated — state that rate; or (ii) otherwise — state the respective rates at which the remuneration of the trustee and the other persons who will be assisting, or will be likely to assist, the trustee in the performance of his or her duties are to be calculated; and (b) if the trustee proposes to charge on the basis of a commission upon

money received by the trustee — state the rate of that commission; and (c) state the periods at which the trustee proposes to withdraw funds from the bankrupt’s estate in respect of the trustee’s remuneration; and (d) include an estimate of the total amount of the trustee’s remuneration and an explanation of the likely impact of that remuneration on the dividends (if any) to creditors. [subs (2A) insrt Act 106 of 2010 s 3 and Sch 1[7], opn 1 Dec 2010]

(3) If, within the time specified in the notice: (a) at least 1 creditor votes in writing; and (b) no other creditor objects in writing to the proposal being resolved without a meeting of creditors; then the following provisions have effect: (c) if the proposal requires a special resolution and there is a Yes vote by a majority in number, and at least 75% in value, of those who voted within the required time — the proposal is taken to have been passed by a special resolution of creditors at a meeting; [page 306] (d) if the proposal does not require a special resolution and there is a Yes vote by a majority in value of those who voted within the required time — the proposal is taken to have been passed by a resolution of creditors at a meeting; (e) in any other case — the proposal is taken not to have been passed. (4) A certificate signed by the trustee stating any matter relating to a proposal under this section is prima facie evidence of the matter. [s 64ZBA insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[81,315ZC] Appointment of proxies *64ZC (1) An instrument appointing a proxy must set out: (a) the full name, and the address of a place of residence or business,

of the creditor; and (b) the full name, and the address of a place of residence or business, of the person appointed as proxy. (2) An instrument appointing a proxy may appoint more than one person as proxy but: (a) if the first person named in the instrument as a proxy is participating in person or by telephone in the meeting, only that person may cast the creditor’s vote; and (b) any other person named in the instrument as a proxy may cast the creditor’s vote if, and only if, that person is participating in person or by telephone in the meeting and no person named in the instrument as a proxy before the name of that person is participating in person or by telephone in the meeting. (3) An instrument appointing a proxy must set out the bankrupt’s name and must state whether the appointment relates to a particular meeting or to all meetings. (4) An instrument appointing a proxy may authorise the proxy to cast the creditor’s vote at a meeting to which the proxy relates on all matters arising at the meeting or may authorise the proxy to cast the creditor’s vote at that meeting only on matters specified in the instrument. (5) An instrument appointing a proxy may direct the proxy as to the manner in which the proxy is to vote on a particular matter or matters that may arise at the meeting or on a particular motion or motions that may be proposed at the meeting. (6) If an instrument appointing a proxy purports to appoint the bankrupt as a proxy, the purported appointment does not have any effect but, if the instrument also appoints another person as a proxy, the appointment of the other person is not affected and the instrument has effect as if the purported appointment of the bankrupt were not included.

[81,315ZD] Provisions relating to motions and amendments of motions *64ZD (1) Subject to the right of the trustee to propose a motion relating to the trustee’s remuneration under subsection 64U(6A), the only persons who may propose motions, or amendments of motions, at a meeting are the

creditors and their representatives. [subs (1) am Act 106 of 2010 s 3 and Sch 1[8], opn 1 Dec 2010]

(2) A motion or amendment does not need to be seconded. (3) If a motion is proposed, the person presiding at the meeting must allow a reasonable time for debate on the motion and on any amendment proposed to the motion. (4) After a reasonable time for debate has elapsed, the person presiding must: [page 307] (a) if no amendment has been proposed — put the motion to a vote; or (b) if an amendment or amendments have been proposed, put the amendment or amendments to a vote; and (i) if the amendment or amendments are defeated — put the original motion to a vote; or (ii) if an amendment or amendments are passed — put the original motion as amended to a vote. (5) If a question arises as to the terms of a motion or amendment that is being put to a vote, the person presiding must read the motion or amendment to the meeting. *Transitional provisions: See Editor’s note at [81,305].

[81,315ZE] Joint bankruptcies *64ZE (1) At a meeting of the creditors in a joint bankruptcy, the trustee must explain to the creditors and their representatives the likely effect of section 110 with respect to the distribution of dividends. (2) At a meeting of the creditors in a bankruptcy to which section 141 applies, the trustee must explain to the creditors and their representatives the likely effect of section 141 with respect to the distribution of dividends. SECTION 64ZE GENERALLY [81,315ZE.5] Modification See Sch 2 of the Bankruptcy Regulations for modification of this section in its application to meetings of creditors under Div 6 of Pt IV of the Act.

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[81,315ZF] Substantial compliance to be sufficient *64ZF A meeting, or anything done at a meeting, is not invalid because a requirement of this Subdivision has not been strictly complied with if the requirement has been substantially complied with.

[81,320] Election of chairman *65 [s 65 rep Act 9 of 1992 s 12]

[81,325] Entitlement to vote at meeting of creditors *66 [s 66 rep Act 9 of 1992 s 12]

[81,330] Manner of voting *67 [s 67 rep Act 9 of 1992 s 12]

[81,335] Admission and rejection of claim to vote *68 [s 68 rep Act 9 of 1992 s 12]

[81,340] Public examination of bankrupt †69 [s 69 rep Act 115 of 1990 s 13] *Transitional provisions: See Editor’s note at [81,305]. † Savings provisions: Section 14(2) of the Law and Justice Legislation Amendment Act 1990 sets out the savings provisions to s 69: “(2) Despite the repeal of section 69 of the Principal Act, that section, as in force immediately before its repeal, continues to apply in relation to the examination of a person who became a bankrupt before that repeal.”

[page 308]

DIVISION 5A — COMMITTEE OF INSPECTION

[Div 5A insrt Act 9 of 1992 s 13]

[81,345] Committee of inspection *70 (1) The creditors who are entitled to vote may, at a meeting of the creditors, by resolution appoint a committee of inspection for the purpose of advising and superintending the trustee. [subs (1) am Act 119 of 1987 s 31; Act 9 of 1992 s 14]

(2) The committee of inspection shall consist of not more than 5 and not less than 3 persons. (3) A person is not eligible for appointment as a member of a committee of inspection unless: (a) he or she is a creditor or a person authorized by a creditor to act for the creditor in relation to the bankruptcy; or (b) he or she is a person whom a creditor intends to authorize to act for him or her in relation to the bankruptcy. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) A creditor or other person referred to in paragraph (3)(a) is not qualified to act as a member of the committee of inspection until, in the case of a creditor, his or her proof of debt or, in the case of another person, the creditor’s proof of debt, has been admitted and a person referred to in paragraph (3)(b) is not qualified so to act until the creditor has authorized him or her to act for the creditor in relation to the bankruptcy and the creditor’s proof of debt has been admitted. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) Subject to subsection (6), the committee of inspection shall meet at such times as the committee appoints from time to time. (6) The trustee or a member of the committee may call a meeting of the committee at any time. (7) The Committee may act by a majority of its members present at a meeting but, except as provided by the next succeeding section, shall not act unless a majority of its members is present at the meeting. SECTION 70 GENERALLY [81,345.5] Generally Section 177 obliges a trustee to have regard to any lawful directions given by resolution of the creditors or the committee of inspection. However, the trustee’s discretion under ss 134 and 135 is now very wide. If the creditors so resolve, the committee of inspection may, under s

162, fix the remuneration of the trustee of the estate of a bankrupt. The minutes of proceedings at a meeting of a committee of inspection signed by a person describing himself or herself as or appearing to have been the chairperson of the meeting is prima [page 309] facie evidence of those proceedings (s 257). Unless the contrary is shown, a meeting of a committee of inspection in respect of which the minutes have been signed as aforesaid is deemed to have been duly convened and held (s 258). *Editor’s note: Section 51(5) of the Bankruptcy Amendment Act 1991 (No 9 of 1992) provides as follows: “(5) The amendments of the Principal Act made by sections 9 to 14 (inclusive) and 17 of this Act apply only in respect of meetings convened by notices given after the commencement of the amendments made by the section concerned and the provisions of the Principal Act that are amended or repealed by those sections continue to apply, despite their amendment or repeal, in respect of meetings convened by notices given before the commencement of those amendments.” See [79,950] following the Table of Amendments to this Act for the full text of transitional provisions.

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[81,350] Vacation of office etc 71 (1) A member of a committee of inspection may resign his or her office by notice in writing signed by him or her and delivered to, or sent by post to, the trustee. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) The office of a member of such a committee becomes vacant if: (a) he or she becomes a bankrupt; or (b) he or she executes a personal insolvency agreement; or (c) he or she is absent from 5 consecutive meetings of the committee; or (d) in the case of a member who is not a creditor, he or she ceases to be a person authorized by a creditor to act for him or her in relation to the bankruptcy. [subs (2) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(3) A member of such a committee may be removed from office by resolution at a meeting of creditors of which 7 days’ notice, stating the object of the meeting, has been given.

(4) Where: (a) a vacancy has occurred in the membership of such a committee; and (b) there are 2 or more continuing members; the continuing members may act notwithstanding the vacancy and may appoint an eligible person to fill the vacancy. (5) Where the number of members of such a committee is at any time less than 2, a creditor may request the trustee to convene a meeting of creditors for the purpose of filling the vacancy or all or any of the vacancies and the trustee shall convene a meeting accordingly. SECTION 71 GENERALLY [81,350.5] Generally A member of the inspection committee can resign or can be removed from office and appointments made by substitution. Under s 306(2) a defect or irregularity in the appointment of any person exercising or purporting to exercise a power or function under the Act or under a deed entered into under the Act does not invalidate an act done by that person in good faith. [81,350.10] Non-Disclosure Heenan J of the Supreme Court of WA in Rodway v White [2009] WASC 201; BC200906244 dealt with the important question of jurisdiction of State courts (see [80,735.7]). His Honour also dealt with the obligations attaching to after-acquired property by the appellant at [75]– [79]: [75] In the present case, however, there is no doubt that the legislature specifically intended that after-acquired property, except of certain kinds, should vest in the trustee (s 116(1)) and that a bankrupt is under an obligation to disclose to the trustee the existence or acquisition of property which is divisible amongst his or her creditors, either held at the date of bankruptcy or afteracquired — s 265(1)(a) and s 77(1)(f) respectively. Nor can there be any doubt that penal consequences are intended to attach to a failure to make disclosure of such property at the appropriate time. [76] The only remaining question for interpretation is whether or not a failure to disclose the acquisition or devolution of after-acquired property divisible among creditors is dealt with by s 78(1)(f) to the exclusion of s 265(1)(a). I accept that there is some uncertainty and lack of [page 310] specific identification in the Bankruptcy Act in this regard but, even after giving due weight to canons of construction relating to penal provisions, I consider that the proper approach is to treat s 265(1)(a) as creating an offence, punishable by imprisonment or fine, for any breach of the disclosure obligations whether applying to divisible property held by the bankrupt at the time of the bankruptcy or earlier or relevant after-acquired property but, in the case of after-acquired property, the time for disclosure is modified by s 77(1)(f) to be ‘as soon as practicable’ after the acquisition or devolution.

[77] There are two principal factors which lead to this conclusion. The first is that the penal consequences created by s 78(1)(f) do not apply specifically or exclusively to s 77(1)(f) but relate to the failure by a bankrupt to comply with an order of the court any obligation created by the Act. Furthermore, in this respect, the consequences specified are not fines or other finite punishment for a summary offence but rather committal to prison for an indeterminate period as an ultimate form of enforcement of an obligation which the bankrupt has not discharged. So, for example, if the bankrupt had failed to perform the obligation of disclosing the existence of relevant afteracquired property as soon as practicable but did so after proceedings under s 78(1) had been commenced, it seems unlikely that an order for committal or any other form of sanction would then occur, notwithstanding that there had been perhaps a defiant act of non-disclosure. [78] The second factor is that an act of non-disclosure contrary to s 77(1)(f) is essentially of the same character, and offends the same legislative purposes, as a non-disclosure of existing divisible property at the date of bankruptcy or earlier contrary to s 265(1)(a). There is essentially no difference in the nature of the breach of the obligation, except as to when it must be performed. That leads to the conclusion that s 77(1)(f) is an enlargement of the same obligation of disclosure as is created by s 265(1)(a) with the accompanying necessary qualification as to the timing when such disclosure obligations occur. Treating s 71(1)(f) as an enlargement of the obligation created by s 265(1)(a) means that it is sensible to treat the legislature as intending that the sanctions proposed under s 265(1)(a) can be applied to either form of non-disclosure. [79] This means that, in my opinion, the appellant was rightfully convicted of the offences charged under s 265(1)(a) and that, therefore, this appeal should be dismissed.

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[81,355] Member of committee not to purchase part of estate 72 (1) A member of the committee of inspection shall not, while acting as such a member, except by leave of the Court, either directly or indirectly, become purchaser of any part of the property of the bankrupt. (2) Where a member of the committee of inspection is a person authorized by a creditor to act for the creditor in relation to the bankruptcy, the creditor shall not, while that person is acting as a member of the committee, except by leave of the Court, either directly or indirectly, become purchaser of any part of the property of the bankrupt. (3) A purchase made in contravention of this section may be set aside by the Court on the application of a creditor. SECTION 72 GENERALLY [81,355.5] Fiduciary A member of the committee of inspection owes a fiduciary duty: Chaplin v Young (No 2) (1864) 33 Beav 414; 55 ER 428. [81,355.10] Remuneration of committee members There is no provision for the remuneration of the Committee of Inspection or any member thereof.

____________________ [page 311]

DIVISION 6 — COMPOSITION OR ARRANGEMENT WITH CREDITORS

[81,405] Composition or arrangement 73 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(1A) The trustee must, within 2 working 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). [subs (1A) insrt Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004; am Act 106 of 2010 s 3 and Sch 3[12], opn 15 July 2010; Act 106 of 2010 s 3 and Sch 2[10], opn 1 Dec 2010]

(1B) For the purposes of subsection (1A), a working day is a day that is not a Saturday, Sunday or public holiday in the place in which the bankrupt resides. [subs (1B) insrt Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004; am Act 106 of 2010 s 3 and Sch 3[13], opn 15 July 2010]

(1C) Subsection (1A) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (1C) insrt Act 106 of 2010 s 3 and Sch 2[11], opn 1 Dec 2010]

(2) The trustee shall call a meeting of creditors and shall send to each creditor before the meeting a copy of the proposal accompanied by a report on it. (2A) The report must indicate whether the proposal would benefit the bankrupt’s creditors generally. [subs (2A) insrt Act 44 of 1996 s 3 and Sch 1]

(2AA) The report must name each creditor who was identified as a related entity of the bankrupt in the bankrupt’s statement of affairs. [subs (2AA) insrt Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004]

(2B) The trustee may refuse to call the meeting if the proposal does not make adequate provision for payment to the trustee of accrued fees that: (a) are owing to the trustee (at the time the proposal is lodged) in respect of the administration of the bankrupt’s estate, but are not able to be taken out of the bankrupt’s estate; and (b) have been approved by the creditors before the proposal is considered. [subs (2B) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) The bankrupt may, at the meeting, amend the terms of his or her proposal, but not in a way that reduces any provision for payment to the

trustee of fees referred to in subsection (2B). [subs (3) am Act 44 of 1996 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) The creditors may, by special resolution, accept the proposal. (5) A creditor who has proved his or her debt may assent to or dissent from the proposal by written notice to that effect delivered to the trustee before the meeting or sent by post to the trustee and received by him or her before the meeting, and in that case the creditor shall, for the purposes of this Division, be deemed to have been present at the meeting and to have voted according to his or her assent or dissent. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

[page 312] SECTION 73 GENERALLY [81,405.5] General A bankrupt may make a proposal to his or her creditors for a composition or scheme of arrangement. The first step of the process is for the bankrupt to lodge with the trustee a written proposal setting out the terms of the proposed composition or scheme of arrangement. The trustee must then call a meeting of creditors. Upon the acceptance of the proposal by a special resolution of creditors, the bankruptcy is annulled. Previously, there was a requirement for court approval of the composition or scheme of arrangement, but this was removed by the Bankruptcy Amendment Act 1991 (No 9 of 1992). A discharged bankrupt cannot make a proposal under Div 6: Quinn v Official Trustee in Bankruptcy (1996) 63 FCR 136; 137 ALR 501. The use of this procedure was referred to in Trkulja v Morton [2005] FCA 659; BC200503544 where Gray J, referring to the applicant’s submissions, said at [26]: “The respondent then explained the machinery of a composition pursuant to s 73 of the Bankruptcy Act, including saying that the applicant would have to put $5000 on the table for a start and then put a proposal to creditors, which they may or may not accept. The alternative was that, pursuant to s 149J of the Bankruptcy Act, the trustee has power to withdraw an objection to discharge. If he were to withdraw the objection then the applicant would be discharged and would be free.” Gray J declined the applicant the relief he sought, and therefore found it unnecessary to make any ruling on this procedure. It is submitted that the proposition is an arguable view of the machinery. [81,405.10] Joint compositions and schemes of arrangement Sections 73 and 74 neither expressly nor impliedly authorise acceptance by creditors of a joint composition: Re Edwards; Ex parte Edwards (1987) 14 FCR 113; 71 ALR 403. French J held (ALR at 707) that in order for the proposal to proceed, it would “have to be recast in the form of separate proposals for each of the bankrupts. Each will require a separate meeting of creditors, although the meetings can be held concurrently provided that the procedure necessary to maintain the distinction between the two proposals is followed”. In Re Tynan; Ex parte Tynan (1987) 16 FCR 307; 77 ALR 111, which French J describes as “a limiting case”, the court approved a joint composition in circumstances where there were no separate creditors and no separate assets, and no other relevant basis to distinguish one bankrupt from the other.

[81,405.15] Contents of proposal In Re Hudson; Ex parte Australia and New Zealand Banking Group Ltd v Bird (1994) 50 FCR 281, Northrop J held that a term of proposal for a composition or scheme of arrangement cannot confer on the court a power it would not otherwise have; for example in the case of a composition, the power to make orders giving an advantage to an indemnifying creditor. [81,405.20] Meeting of creditors A trustee must prepare a report and call a meeting of creditors when given a bona fide proposal under s 73. A proposal will be bona fide if the bankrupt genuinely “desires a meeting for the purpose of considering a composition or scheme of arrangement”. But a trustee may be justified in delaying calling a meeting if further investigations are required. A trustee is not justified in refusing to call a meeting on the basis that the costs of calling the meeting and/or the costs of the administration have not been paid: Re Bendel; Ex parte Bendel v Pattison (1997) 80 FCR 123. Division 5 of Pt IV applies to meetings of creditors under this Division: s 76A. Arcuri v Jones [2003] FCA 68; BC200300251 provides an example of “bona fide”. The debtor proposed an agenda for such a meeting that would have deprived the trustee of most of his remuneration. Following Re Bellis (1959) 20 ABC 80 at 84 it was held per Lindgren J at [16] that a scheme of arrangement must not “subordinate, override or neutralise” any provision of the Act. This adopted the words of Lukin J in Re Alam’s Deed of Arrangement (1932) 4 ABC 98 at 113. His Honour also pointed out that it was not possible to contract out of or waive the performance of terms inposed by the statute.

____________________ [page 313]

[81,405A] Trustee may require surety for cost of meeting 73A (1) Before calling a meeting under section 73, the trustee may require the bankrupt to lodge with the trustee an amount that is sufficient to cover: (a) the estimated costs that will be incurred by the trustee in arranging and holding the meeting; and (b) the estimated fee that will (if approved by the creditors) be payable to the trustee in respect of the meeting. (2) If the amount lodged by the bankrupt is more than the actual costs and fee, then the trustee must refund the excess to the bankrupt. [s 73A insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[81,405B] Declaration of relationships by proposed trustee of composition or scheme of arrangement

73B (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. (4) The trustee of the bankrupt’s estate must give a copy of the declaration to each of the creditors at the same time as the trustee gives a copy of the subsection 73(2) report to each creditor. [s 73B insrt Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004]

[81,405C] Statement of affairs and declarations of relationships to be tabled at meeting 73C (1) Scope This section applies to a meeting that is called under section 73. (2) Bankrupt’s statement of affairs The trustee must table at the meeting a copy of the bankrupt’s statement of affairs. (3) If: (a) the bankrupt had been required, immediately before the start of the meeting, to prepare a statement of affairs; and (b) that statement would have differed in one or more material respects from the statement a copy of which was tabled under subsection (2); the bankrupt must table at the meeting a written statement identifying those differences. (4) Proposed trustee’s declaration 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, the trustee

of the bankrupt’s estate must table at the meeting a copy of the declaration made by the proposed trustee under subsection 73B(2). (5) If: (a) 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; and [page 314] (b) assuming that the proposed trustee had been required, immediately before the start of the meeting, to make a declaration stating whether the bankrupt is a related entity of: (i) the proposed trustee; or (ii) a related entity of the proposed trustee; that declaration would have differed in one or more material respects from the declaration made by the proposed trustee under subsection 73B(2); the proposed trustee must table at the meeting a written statement identifying those differences. [s 73C insrt Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004]

[81,410] Annulment of bankruptcy *74 (1) [subs (1) rep Act 9 of 1992 s 15] (2) [subs (2) rep Act 9 of 1992 s 15] (3) [subs (3) rep Act 9 of 1992 s 15] (4) [subs (4) rep Act 9 of 1992 s 15] (5) Upon the passing of a special resolution at a meeting of creditors of a bankrupt under subsection 73(4), the bankruptcy is annulled, by force of this subsection, on the date on which the special resolution was passed. [subs (5) subst Act 9 of 1992 s 15]

(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). [subs (5A) insrt Act 9 of 1992 s 15; am Act 44 of 1996 s 3 and Sch 1; Act 106 of 2010 s 3 and Sch 2[12] and [13], opn 1 Dec 2010]

(5B) Subsection (5A) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (5B) insrt Act 106 of 2010 s 3 and Sch 2[14], opn 1 Dec 2010]

(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 [page 315] 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. [subs (6) insrt Act 12 of 1980 s 39; am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (7) insrt Act 12 of 1980 s 39] SECTION 74 GENERALLY [81,410.5] Effect of annulment See notes to s 154 at [82,315.10]. See also Re Hudson; Ex parte Australia and New Zealand Banking Group Ltd v Bird (1994) 50 FCR 281; Re Coyle v Cassimatis [1994] 2 Qd R 262; BC9404396. [81,410.10] Vesting of property Quaere whether the reference to “the Court” in s 74(6) and (7) is appropriate following the amendments to this section made by the Bankruptcy Amendment Act 1991

(No 9 of 1992): Re Hudson; Ex parte Australia and New Zealand Banking Group Ltd v Bird (1994) 50 FCR 281. [81,410.15] Section 74(6) — effect of annulment on security provided for trustee’s remuneration Beaumont J in Wenkart v Pantzer [2003] FCA 315; BC200301604 at [9], [10] and [11] said that: Where (as here) the trustee’s remuneration is not fixed by the creditors or the committee of inspection, the trustee is to be remunerated as prescribed by the regulations (s 162(4)). For the purposes of s 162(4) remuneration is to be (a) in accordance with the scale of charges that is (i) set out in the IPAA Guide; and (ii) applicable to the work to be remunerated; and (b) at the level of 85 per cent thereof (reg 8.08). The statutory scheme should be viewed against the background of the general law that, as a rule, a trustee is entitled to be reimbursed out of trust property for expenses incurred in the execution of the trust (see National Trustees Executors and Agency Co of Australasia Ltd v Barnes (1941) 64 CLR 268 at 274, 277). It was contended in that case that, inter alia, the effect of annulment deprived the court of jurisdiction under the above. His Honour’s conclusion at [22] was that the order contended against was a consent order evidencing an agreement between the parties and as a court order: see [16]. The normal rule was that a consent order was valid unless set aside by virtue of Re Macks; Ex parte Saint (2000) 204 CLR 158; 176 ALR 545; [2000] HCA 62; BC200007445, the voidability or the order “depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it …”: Harvey v Phillips (1956) 95 CLR 235 at 243. As the obligation was contingent upon annulment, as Brennan J observed in Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 565–6; 41 ALR 441 at 462; BC8200084: Though the stipulation specified the event upon the occurrence of which the obligations to complete cease to be contingent, the stipulation contains no promise that the event will occur. Until the event occurs or the purchasers waive the benefit of the stipulation (Gange v Sullivan (1966) 116 CLR 418; 40 ALJR 224; BC6600800) neither party is entitled to a decree of specific performance of their respective obligations to complete the sale (Brown v Heffer (1967) 116 CLR 344; [1968] ALR 89; BC6700340) and the purchases have no equitable interest in the property which is the subject of the contract (McWilliam v McWilliams Wines Pty Ltd (1964) 114 CLR 656; 37 ALJR 435; BC6400810). [page 316] Therefore although the agreement evidencing the consent orders was made during the bankruptcy they had no effect until the annulment occurred by force of s 75(5) later: see [19]. This dealt with the substantive objection.

____________________ *Editor’s note: Section 52(1) and (2) of the Bankruptcy Amendment Act 1991 No 9 of 1992 provide as follows: “Compositions and schemes of arrangement 52 (1) Any proceeding under section 74 of the Principal Act that was pending before the Court immediately before the commencement of section 15 of this Act lapses upon that commencement.

(2) Where: (a) within the period of 3 months immediately before the date of commencement of section 15 of this Act, the creditors of a bankrupt had accepted a composition or scheme of arrangement; and (b) the bankruptcy had not been annulled by the Court before that date; and (c) the Court had not refused to approve the composition or scheme of arrangement before that date; subsection 74(5) of the Principal Act as amended by this Act has effect as if the special resolution accepting the composition or scheme of arrangement had been passed on that date.” See [79,950] following the Table of Amendments to this Act for the full text of transitional provisions.

[81,410A] Variation of composition or scheme of arrangement 74A (1) This section applies to a composition or scheme of arrangement that has been accepted in accordance with this Division. (2) Variation by special resolution of creditors 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. (3) Variation proposal by trustee 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 would be entitled under section 64A (as that section applies in accordance with section 76A) 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. [s 74A insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[81,415] Effect of composition or scheme of arrangement *75 (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. [subs (1) am Act 9 of 1992 s 16]

(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. [subs (2) am Act 9 of 1992 s 16; Act 44 of 1996 s 3 and Sch 2]

[page 317] (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. [subs (3) am Act 9 of 1992 s 16]

(4) [subs (4) rep Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004] (5) [subs (5) rep Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004] (6) [subs (6) rep Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004] (7) [subs (7) rep Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004] (8) [subs (8) rep Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004] SECTION 75 GENERALLY [81,415.5] Remedy The remedy of any person aggrieved by default in payment is by application to the court. The composition or scheme remains valid until set aside by the court: Seymour v Coulson (1880)

5 QBD 359; Wadsworth v Pickles (1880) 5 QBD 470. Delay can only affect the decision to annul if it amounts to a miscarriage of justice: Loane v Gold Ribbon (Accountants) Pty Ltd [2004] FCA 537; BC200402408.

____________________ *Editor’s note: Section 52(3) of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as follows: “52 … (3) Section 75 of the Principal Act as amended by this Act extends to all compositions and schemes of arrangement that are in force at the commencement of section 16 of this Act.” See [79,950] following the Table of Amendments to this Act for the full text of transitional provisions.

[81,420] Application of Part VIII to trustee of a composition or arrangement 76 (1) Part VIII applies, 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. [subs (1) am Act 119 of 1987 s 33; Act 44 of 1996 s 3 and Schs 1, 2]

(2) If, after taking into account the modifications prescribed by the regulations, a provision of Part VIII 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. [subs (2) am Act 119 of 1987 s 33; Act 44 of 1996 s 3 and Sch 1] SECTION 76 GENERALLY [81,420.5] Prescribed modifications Part VIII comprises ss 154A–184A and relates generally to trustees. No modifications to Pt VIII have been prescribed under this section.

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[81,425] Meetings of creditors *76A Division 5 of Part IV applies, so far as it is capable of applying and with such modifications (if any) as are prescribed by the regulations, to meetings of creditors under this Division. [s 76A insrt Act 9 of 1992 s 17; am Act 44 of 1996 s 3 and Sch 1]

[page 318] SECTION 76A GENERALLY [81,425.5] Prescribed modifications Modifications to s 76A are prescribed by reg 4.19. [81,425.10] Convening meeting Section 64, which deals generally with the convening of meetings under the Act, “has no application to meetings called for the specific purpose dealt with by s 73”: Re Bendel; Ex parte Bendel v Pattison (1997) 80 FCR 123. [81,425.15] Entitlement to vote The trustee’s decision on entitlement to vote may be reviewed by the

court pursuant to ss 30 and 178 of the Act: Staples v Milner (1998) 83 FCR 203. The court will be reluctant to intervene unless it can be shown that the determination of the question of entitlement to vote did affect, or would have affected, the fate of the proposal by producing a different result.

____________________ *Editor’s note: Section 51(5) of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as follows: “51 … (5) The amendments of the Principal Act made by sections 9 to 14 (inclusive) and 17 of this Act apply only in respect of meetings convened by notices given after the commencement of the amendments made by the section concerned and the provisions of the Principal Act that are amended or repealed by those sections continue to apply, despite their amendment or repeal, in respect of meetings convened by notices given before the commencement of those amendments.” See [79,950] following the Table of Amendments to this Act for the full text of transitional provisions.

[81,425B] Setting aside and termination of a composition or scheme of arrangement 76B 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. [s 76B insrt Act 80 of 2004 s 3 and Sch 2, opn 1 Dec 2004]

PART V — CONTROL OVER PERSON AND PROPERTY OF DEBTORS AND BANKRUPTS DIVISION 1 — GENERAL [Div 1 am Act 9 of 1992 s 18]

[81,520] Duties of bankrupts as to discovery etc of property

77 (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) the bankrupt’s passport, if any; 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 [page 319] (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. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (2) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 77 am Act 119 of 1987 s 34; Act 44 of 1996 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 77 GENERALLY [81,520.5] General In Re Bond; Ex parte Ramsay (1994) 54 FCR 394; 126 ALR 720, Sheppard J stated: The provisions of s 77 and the other provisions of Pt V of the Act are designed to enable the Trustee to make the fullest investigation into a bankrupt’s property, dealings and affairs. At least so far as bankrupts are concerned, the essence is a requirement that they co-operate. Co-operation can and will be compelled in appropriate cases. If this were not the case, bankrupts could make a laughing stock of their obligations. Thus unwilling and uncooperative bankrupts must produce documents and answer questions against their will. That is their obligation. If they fail in that obligation they expose themselves to the risk of being found in contempt of court or in breach of the criminal law. [81,520.10] Delivery of books — s 77(1)(a)(i) The trustee has a corresponding duty to take possession of books: see s 129. See the provisions relating to the issue of a warrant for the arrest of the bankrupt and the seizure of property: s 78. [81,520.15] Delivery of passport — s 77(1)(a)(ii) The obligation of the bankrupt to give to the trustee the bankrupt’s passport forms part of the general restrictions upon the bankrupt leaving Australia. A bankrupt who is liable to pay income is not entitled to leave Australia or do any act preparatory to leaving Australia without permission from the Court: Div 4C of Pt VI and s 272(ba). A bankrupt who is not liable to pay income contributions is not entitled to leave Australia or do any act preparatory to leaving Australia without the written consent of the trustee: s 272(c). As to the corresponding grounds of objection, see s 149D(1)(a) and (h). [81,520.20] Trustee’s discretion in relation to overseas travel In Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6, Deane J stated: Restrictions upon such travel under the bankruptcy legislation must be seen as being aimed at insuring the proper administration of the bankruptcy laws and of bankrupt estates under such laws and not as a penalty imposed upon a citizen as a consequence of inability to pay debts leading to the making of a sequestration order. [81,520.25] Review of trustee’s decision The trustee’s decision to refuse to return the bankrupt’s passport or not to give written permission for the bankrupt to leave Australia may be [page 320] reviewed by the court pursuant to s 178: Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6; Bethune v Newman (1996) 19 ACSR 99; Re Nelson; Ex parte Nelson (1996) 65 FCR 7; Weiss v

Official Trustee (1983) 1 FCR 40 and Sharma v Pattison [2006] FCA 287; BC200602751. The principles were set out by Smith FM in Hill v Piscopo [2007] FMCA 814; BC200704192, quoting his own decision in Gu v Pascoe [2006] FMCA 367; BC200601615: [10] There are a number of decisions where the Court has been asked to review trustee decisions about travel. The law in this respect was helpfully collected by Bryant CFM in Luna v Pattison [2004] FMCA 237. I shall not repeat all the discussion from cases which she extracts in her judgment. As did she, I find assistance in Re Hicks; Ex parte Lamb (1994) 217 ALR 195, where Heerey J suggested three considerations which were not conclusive, but could be put at the forefront of consideration. These were whether: i) the proposed visit is genuine; ii) the bankrupt is likely to return to Australia as promised; iii) the visit will hamper the administration of the estate. [13] In Re Tyndall (supra) at 187, Deane J referred to the significant consideration that needs to be given to the human rights of the bankrupt person to enjoy travel in circumstances where, although a person has suffered a business collapse, he has not been found to have offended any laws. However, in a passage at 191, also extracted by Bryant CFM, Deane J said that the provisions of the Act in relation to the delivery of passport and the need for a trustee’s consent to travel: … recognize that a bankrupt’s legitimate desires to travel oversees must, in an appropriate case, be subordinated to what is necessary for the proper and efficient administration of his estate in bankruptcy and the administration of the bankruptcy law. The court in Hill v Piscopo [2007] FMCA 814; BC200704192 also considered Riethmuller FM in Dunwoody v Official Receiver [2005] FMCA 1634; BC200511863 at [29]: [29] I do not accept that the travel must be for a purpose that assists in the administration of the estate. If the travel may hinder the administration, either by hindering contact with the bankrupt by the trustee, or allowing the bankrupt an opportunity to deal with assets that are held overseas and have not been recovered by the trustee, these would be relevant considerations against allowing travel. If the travel would allow the bankrupt to earn a greater income, and thus satisfy all or part of the debts this would be a relevant consideration in favour of allowing the travel. To deny travel simply because it is only being undertaken for compassionate reasons would be an improper exercise of the discretion as it results in a punitive application of the provisions. However, denial of permission to travel where a bankrupt is in default of his or her other obligations may be an appropriate method by which a trustee can encourage compliance by a bankrupt. Further, Smith FM adopted and applied these principles in Heshmati v Burness [2012] FMCA 1097; BC201209259. [81,520.30] Attend the trustee — s 77(1)(b) As to the corresponding ground of objection, see s 149D(1)(m). [81,520.35] Attend meetings — s 77(1)(c) and (d) The creditors may, by resolution, excuse the debtor from attending or require the debtor to leave: Re Foster; Ex parte Foster v Duus (1994) 49 FCR 309. As to the corresponding ground of objection, see s 149D(1)(m). [81,520.40] Executed instruments — s 77(1)(e) The trustee has power to execute most instruments him or herself: see ss 134 and 135. As to the corresponding ground of objection, see s 149D(1)(k). [81,520.45] Disclose property — s 77(1)(f) As to the corresponding ground of objection, see s

149D(1)(n). [page 321] [81,520.50] Aid in the administration of the estate — s 77(1)(g) Section 77(1)(g) was relied upon by the trustee in Re Bond; Ex parte Ramsay (1994) 54 FCR 394; 126 ALR 720 to require the bankrupt to give his consent to the inspection of documents seized by the police in execution of a search warrant. See also Totterdell v Nelson (1990) 26 FCR 523; 97 ALR 341. [81,520.55] Privilege The privilege against self incrimination is not available to a bankrupt required to do any of the things pursuant to s 77. On the other hand legal professional privilege would appear to be available to a bankrupt required to comply with an obligation under the section: Re Bond; Ex parte Ramsay (1994) 54 FCR 394; 126 ALR 720. [81,520.60] Offences Failure by a bankrupt to comply with s 77 will generally constitute an offence: see s 265. It may also be punished by warrant for arrest of the bankrupt and his or her committal to jail: s 78(1)(f).

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[81,523] Access by Official Receiver and others to premises 77AA (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. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (1A) insrt Act 44 of 1996 s 3 and Sch 1]

(1B) The registered trustee may be accompanied by a person nominated by the registered trustee. [subs (1B) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (1C) insrt Act 44 of 1996 s 3 and Sch 1]

(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 [page 322] 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. [subs (1D) insrt Act 44 of 1996 s 3 and Sch 1]

(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. [subs (1E) insrt Act 44 of 1996 s 3 and Sch 1]

(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: $3,000. [s 77AA insrt Act 9 of 1992 s 19; am Act 44 of 1996 s 3 and Sch 1] SECTION 77AA GENERALLY [81,523.10] Privilege Section 77AA does not abrogate the common law right to claim legal professional privilege. However, a bankrupt may not be able to assert the privilege where the communication was “so closely connected with property of the bankrupt which vests in the trustee”: Re Steele (1994) 48 FCR 236; 119 ALR 716 at 725.

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[81,525] Access by trustee to books of associated entity 77A (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. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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 [page 323] (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. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) The production of books under this section does not prejudice a lien that a person has on the books. [s 77A insrt Act 119 of 1987 s 35] SECTION 77A GENERALLY [81,525.5] General For a general discussion, see Re Simersall (1992) 35 FCR 584; 108 ALR 375. The term “associated entity” is defined in s 5(1) of the Act. [81,525.15] Offences See s 265A. As to the prosecution of offences under the Act, see s 273. [81,525.20] Privilege See also [81,550.45]. Lombe v Pollak [2004] FCA 264; BC200401094 was one case where a claim of professional privilege, and waiver thereof, was claimed in bankruptcy proceedings. The issue was determined according to the principles of Esso Australia Resources Ltd v FCT (Cth) (1999) 201 CLR 49; 168 ALR 123 and Mann v Carnell (1999) 201 CLR 1; 168 ALR 86. Jacobson J specifically noted DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499; [2003] FCA 384; BC200301932 and said at

[36]: I respectfully agree with Allsop J that waiver can only occur in pleadings where the issue is raised by the party otherwise entitled to the privilege. It seems to me that the concept of waiver necessarily imports some conduct on the part of the privilege holder which brings about the loss of the privilege. On the issue as to whether privilege could be waived by not claiming it in a liquidator’s examination, Re Compass Airlines Pty Ltd (1992) 35 FCR 447; 109 ALR 119 so held. In Fletcher v EEBME Pty Ltd (2007) 213 FLR 1; [2007] FMCA 1235; BC200706499 privilege was sought to resist a trustee’s application under this section for production of documents relating to the employment of a surgeon. Wilson FM regarded the issue of legal professional privilege as closed by Re Steele; Ex parte Official Trustee in Bankruptcy v Clayton Utz (a firm) (1994) 48 FCR 236; 119 ALR 716; BC9406500, which considered that the privilege against self-incrimination was not abrogated by the section. However, His Honour considered two passages from Breen v Williams (1996) 186 CLR 71 at 81, 92; 138 ALR 259; 43 ALD 481; BC9604086 where it was suggested that a medical practitioner had a duty to protect the confidentially of his relationship with his patients, and that equity might restrain certain disclosures. His Honour held, at [21], that a trustee’s information should be confined to financial matters rather than matters that could be properly seen as raising matters of patient confidentiality. He held further, at [21], that s 77A did not require disclosure of personal information under s 6 of the Privacy Act 1988. At [31], His Honour set out the principle as: [31] The disclosure of such documents is, in my view, “authorised” by s 77A of the Bankruptcy Act, but only to the extent that the documents are relevant to the trustee’s investigation: s 77A(2) (e) Bankruptcy Act. Therefore, if the necessary financial information can be provided to [page 324] the Trustee without disclosure of “personal information”, as that term is defined in s 6 Privacy Act, that would, in my view, amount to sufficient compliance by the respondent with the trustee’s request pursuant to s 77A Bankruptcy Act. His Honour’s orders were made in support of the principle stated above.

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[81,530] Bankrupt to assist Official Receiver 77B [s 77B rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[81,531] Power of Official Receiver to obtain information and evidence* 77C (1) The Official Receiver may, by written notice given to a person,

require the person to do one or both 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. 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. [subs (1) subst Act 34 of 2006 s 3 and Sch 4[7], opn 3 May 2006]

(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 [page 325]

(iii) by any other person on payment of the fee determined by the Minister by legislative instrument. [subs (3) insrt Act 33 of 2006 s 3 and Sch 1[2], opn 31 May 2006; am Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006] [s 77C insrt Act 9 of 1992 s 20] SECTION 77C GENERALLY [81,531.5] General The provisions of Pt V of the Act are designed to enable the trustee to make the fullest investigations into a bankrupt’s property, dealings and affairs: Re Bond; Ex parte Ramsay (1994) 54 FCR 394 at 401; 126 ALR 720. Section 77C is a “statutory aid to the process of discovery and realisation of assets for the benefit of the creditors”: Re JTC McKee; Ex parte Laroar Holdings (1996) 71 FCR 156. The principles expressed in Karounos v Official Trustee (1988) 19 FCR 330; 80 ALR 626 with respect to s 81 of the Act have substantial application to s 77C: Re Jonson; Ex parte Prentice (FCA, Lockhart J, 1 September 1997, unreported, BC9703993). Section 77C is based on s 264 of the Income Tax Assessment Act, and accordingly cases on s 264 provide some guidance as to the interpretation of s 77C: see, for example, Re Terry; Ex parte Terry v Prentice (FCA, Lindgren J, 2 December 1994, unreported). The bankrupt’s failure to attend an examination for the purposes of the Act, without giving the trustee a reasonable explanation, is a ground of objection to discharge: s 149D(1)(m). [81,531.10] Form and contents of notices There is no prescribed form for a notice under s 77C of the Act. A notice that requires a person to attend to give evidence, does not need to specify the evidence that will be sought: Re Terry; Ex parte Terry v Prentice (FCA, Lindgren J, 2 December 1994, unreported). A notice that requires a person to produce books, must be expressly limited to “books in the possession of the person”: Re Terry; Ex parte Terry v Prentice, above. As to the degree of particularity required where a notice requires the production of books, see Re Karas; Ex parte Page (FCA, Tamberlin J, 14 November 1997, unreported). A notice must be limited by reference to the requisite “[relationship] to any matters connected with the performance of the functions of the Official Receiver or a trustee under the Act”, for example by using the phrase “relating to the income and assets of the bankrupt” to qualify the information, evidence or books sought: Re Terry; Ex parte Terry v Prentice, above. A notice addressed to a corporation should be addressed to “The Proper Officer” of that corporation: Re Terry; Ex parte Terry v Prentice, above; compare Re Interchase Corp Ltd (in liq) (No 2) (1993) 120 ALR 143 (Corporations Law examination). [81,531.15] Service While s 77C requires that written notice be “given to” a person, when it comes to the issue of a warrant, the Registrar must be satisfied, on proof by affidavit, of “service” of the notice and the offering of an advance in accordance with s 77E: s 267E. Note that reg 16.01 provides five methods by which a document may be given to or served on a person “unless the contrary intention appears”. A person other than the bankrupt or former bankrupt, is entitled to an advance on account of allowances and expenses: ss 77D and 77E. [81,531.20] Application to set aside notice Application to set aside a s 77C notice may be made under s 30 of the Act (general powers of courts in bankruptcy), or alternatively, the Official Receiver’s

decision to issue the notice may be reviewed under the Administrative Decisions (Judicial Review) Act 1977: see Re JTC McKee; Ex parte Laroar Holdings (1996) 71 FCR 156. The court will be careful to ensure that the power under s 77C is not used for an improper purpose, especially when the information sought relates to transactions impeached in current litigation: Re Jonson; Ex parte Prentice (FCA, Lockhart J, 1 September 1997, unreported, BC9703993). [page 326] Part of the trustee’s function is to investigate and assess the prospect of recovering funds from an existing action, and accordingly the obtaining of information by evidence and the production of books for this purpose is a legitimate exercise of power: Re JTC McKee; Ex parte Laroar Holdings, above. It may be possible for the defective part of a notice to be severed (Re Terry; Ex parte Terry v Prentice (FCA, Lindgren J, 2 December 1994, unreported)), but not for the court to rewrite categories of documents or of evidence: Re JTC McKee; Ex parte Laroar Holdings, above. In Re Karas; Ex parte Page (FCA, Tamberlin J, 14 November 1997, unreported), his Honour observed that the court should exercise caution when asked to review the discretion of the Official Receiver or trustee as to documents or information sought in a notice under this section. There is no implied limitation in s 77C that documents obtained by some coercive power, like the AFP, are not required to be produced: Bond v Tuohy (1995) 56 FCR 92; 128 ALR 595. There are a number of other statutory provisions like this one, for example s 155 of the Trade Practices Act 1974 (Cth), ss 30–33 of the Australian Securities and Investments Commission Act 2001 (Cth) and s 264 of the Income Tax Assessment Act 1936 (Cth). As Flick J observed in AB Pty Ltd v Australian Crime Commission (2009) 175 FCR 296; 107 ALD 591; [2009] FCA 119; BC200900744 at [23]: When considering s 264 of the 1936 Act in Grant v DCT [2000] FCA 1383; 104 FCR 1, Black CJ, Merkel and Finkelstein JJ relevantly observed: [12] There are competing factors to be taken into account when considering the proper construction of s 264. On the one hand, it is to be remembered that the section interferes with a person’s freedom to elect not to provide information, whether it is to the revenue authorities or to a law enforcement agency. Not only is s 264 an interference with personal liberty, a refusal or failure to comply with s 264 is an offence, attracting a fine or even a term of imprisonment: see ss 8C, 8D and 8E of the Taxation Administration Act 1953 (Cth). On the other hand, the principal source of revenue for the Commonwealth is income tax. It is notorious that many and varied devices are employed to avoid the incidence of that tax. Sometimes, outright fraud is involved. For this reason the Parliament found it necessary to give the Commissioner power to make wide ranging enquiries to investigate whether tax is due. In these circumstances, the Court should proceed on the footing that the intention was to give the Commissioner an effective, but not an oppressive or unfair, power of investigation. Therefore one can object to the exercise of this power if it is unduly oppressive. In AB Pty Ltd v Australian Crime Commission (above), Flick J considered (at [33]): [33] Section 77C of the Bankruptcy Act uses different language yet again. Section 77C(1)(b) permits a notice to be issued requiring a person to ‘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’. In respect to that provision it has been said that a ‘broad common sense approach’ should be adopted. If the demand can be reasonably understood, the notice is valid: CK Nominees Australia Pty Ltd v Official Receiver (WA) [2007] FCAFC 118; 160 FCR 524. A

statutory demand had there been issued under s 77C of the Bankruptcy Act and Moore J concluded (at [39]): [39] The appellant made a subsidiary submission that the notice was not reasonably clear about what documents were required. The submission centred on the expression ‘associated entities’ which is used in the definition of ‘examinable affairs’ set out on the third page of the notice (containing extracts from the Act). The expression ‘associated entities’ is defined in the Act (though that definition was not sent with the extracts) and the expression ‘private company’ which is found in the definition of ‘associated entities’ is a defined expression. In my opinion, the primary judge was correct in concluding that the Court should, when construing a notice of the type under consideration, take a ‘broad common sense approach’, an expression which fairly synthesises the more detailed discussion of the Full Court in [page 327] Pyneboard [57 FLR at 374–375; 39 ALR at 570–571]. In construing the reference to ‘examinable affairs’ and looking at the definition, including the expression ‘associated entities’, a recipient could reasonably be expected to understand that the notice was seeking documents concerning the direct dealings of the bankrupt as well as documents concerning the financial affairs of associated entities. That term described with sufficient clarity and as an ordinary English expression what was comprehended by the more precise definition including the reference to private company. [81,531.25] Attendance The Registrar may issue a warrant for the arrest of a person who fails to attend as required by a notice, or to appear and report from day to day, as required by the Official Receiver or authorised officer: s 267E. In the case of failure to attend by a bankrupt, see also s 78 and O 77 r 64 of the Federal Court Rules. [81,531.30] Examination The procedure to be adopted at an examination is a matter for the Official Receiver or authorised officer. The Official Receiver or authorised officer may admit any person to the examination whose presence is reasonably necessary to enable the Official Receiver or authorised officer to carry out the duty imposed under the Act. The Official Receiver or authorised officer may allow the trustee or the trustee’s legal representative to participate in the examination, for example, by asking questions. In that case, the Official Receiver or authorised officer may disallow any question that is improper: Re JTC McKee; Ex parte Laroar Holdings (1996) 71 FCR 156. [81,531.35] Privilege The privilege against self-incrimination is not abrogated by s 77C. However, the objection cannot be taken globally, and must be taken in relation to identifiable documents: Bond v Tuohy (1995) 56 FCR 92; 128 ALR 595. The common law right to claim legal professional privilege is not abrogated by s 77C: Bond v Tuohy. However, a bankrupt may not be able to assert the privilege where the communication was “so closely connected with property of the bankrupt which vests in the trustee”: Re Steele (1994) 48 FCR 236; 119 ALR 716 at 725 (in the context of s 77AA of the Act). [81,531.40] Offences Failure to comply with the provisions of s 77C will generally constitute an offence: see ss 267B (failure to provide information), 267C (provision of false or misleading information), 267D (failure to attend), 267F (refusal to be sworn or give evidence) and 267G (prevarication or evasion in the course of giving evidence).

As to the prosecution of offences under the Act, see s 273.

____________________ *Editor’s note: Subsection (1) was substituted by Sch 4[7] of Act 34 of 2006, for which Sch 4[8] provides: 8 Saving The repeal and substitution of subsection 77C(1) of the Bankruptcy Act 1966 by this Schedule does not affect: (a) a requirement under that subsection involving a notice given before the repeal; or (b) an authorisation of an officer to exercise powers under paragraph 77C(1)(b) of that Act that was given before the repeal.

[81,531A] Power of Official Receiver to obtain statement of affairs 77CA 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. [s 77CA insrt Act 106 of 2010 s 3 and Sch 2[15], opn 1 Dec 2010]

[81,532] Allowances and expenses in respect of attendance 77D (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. [page 328] (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. [s 77D insrt Act 9 of 1992 s 20] SECTION 77D GENERALLY [81,532.10] Allowance The amount of $20 in s 77D is to be replaced by an amount calculated in accordance with s 304A.

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[81,533] Advance on account of allowances and expenses 77E (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.

[subs (3) am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (4) am Act 44 of 1996 s 3 and Sch 1]

(5) The regulations may prescribe different amounts in respect of different distances and different means of travel. [subs (5) am Act 44 of 1996 s 3 and Sch 1]

(6) This section has effect subject to section 304A. [s 77E insrt Act 9 of 1992 s 20]

[page 329] SECTION 77E GENERALLY [81,533.10] Advance The amount of $20 in s 77E is to be replaced by an amount calculated in accordance with s 304A.

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[81,534] Allowances and expenses to be paid out of bankrupt’s estate 77F 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. [s 77F insrt Act 9 of 1992 s 20]

[81,535] Arrest of debtor or bankrupt 78 (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 (e) [repealed] (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. [subs (1) am Act No 121 of 1968 s 6; Act 119 of 1987 s 37; Act 44 of 1996 s 3 and Sch 2]

(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. [subs (2) am Act 119 of 1987 s 37; Act 44 of 1996 s 3 and Sch 2]

(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. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

SECTION 78 GENERALLY [81,535.2] Arrest of absconding debtor or bankrupt The use of the power to arrest under s 78 of the Act should be seen as being aimed at ensuring the proper administration of the bankruptcy laws in respect of persons and their property where the necessary circumstances specified in the [page 330] section have been made out. The power should not be used to frustrate the freedom to travel and financial interests of persons not declared bankrupt who wish to return to the jurisdiction and so expose themselves to due process of the bankruptcy laws in the ordinary way: Re Wong; Ex parte Wong v Boardwalk Regency Corporation (FCA, Cooper J, QB 1696/95, 27 February 1996, unreported, BC9600498). See Re Brazel; Ex parte Royal Nominees (FCA, Cooper J, 2 June 1995, unreported) for an attempt by a creditor to use s 30(1)(b) to restrain a debtor from leaving the jurisdiction prior to the making of a sequestration order (noted at [80,750.10]). After noting Re Wong, above, Flick J in Pearce (Trustee) v Mulhern (Bankrupt) (No 3) (2012) 124 ALD 420; [2012] FCA 16; BC201200072 noted two other characteristics of the power of arrest at [9]– [10]: [9] Second, the power conferred is not untrammelled. It may only be exercised in those circumstances where “it is made to appear to the Court” that one or other of those matters set forth in s 78(1)(a), (b), (c), (d) or (f) have been made out. Section 78(1)(e) has been repealed. It is sufficient if the matters set forth in s 78(1) are established on the balance of probabilities: Bankruptcy Act, s 34A. [10] Third, the power is discretionary — s 78(1) providing that “the court may issue a warrant …” That power is a power conferred by the Legislature for the purpose of promoting the object and purpose of the Bankruptcy Act. Centrally relevant to the manner in which the discretionary power is to be exercised must always remain an assessment as to whether the deprivation of liberty of a debtor or bankrupt is necessary in order to ensure the proper administration of the Bankruptcy Act. In addition to the discretionary power conferred by s 78 are such other powers which may also be exercised to promote the object and purpose of the Act. Thus, for example, s 30(1) relevantly confers a power to “make such orders … as the Court considers necessary for the purposes of carrying out or giving effect to this Act…” That power embraces a power to order that a person in respect of whom a bankruptcy notice has been issued be restrained from leaving the jurisdiction: Talacko v Talacko [2010] FCAFC 54; 183 FCR 311. The presence of s 78 in the Bankruptcy Act was there said not to be any reason for concluding that that was the only power to restrain a person from leaving Australia. There was said to be no discernible difference between the power conferred by s 30(1) of the Bankruptcy Act to that conferred by s 23 of the Federal Court of Australia Act 1976 (Cth) for the Court to make such orders as it considers appropriate. [81,535.5] Procedure As to the issue and execution of a search warrant, see s 130. See also regs 5.01, 14.01 and O 77 rr 64, 65.

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[81,540] Re-direction of postal articles 79 [s 79 rep Act 44 of 1996 s 3 and Sch 1]

[81,545] Notification of change in name, address or day-time telephone number 80 (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. [subs (1) subst Act 9 of 1992 s 21; am Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(1A) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (1A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

[page 331] (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. (3) [subs (3) rep Act 9 of 1992 s 21] (4) [subs (4) rep Act 44 of 1996 s 3 and Sch 1] SECTION 80 GENERALLY [81,545.5] General Because of the erroneous reference to s 6A(2)(b)(ii), it is doubtful whether s 80 has any application. [81,545.10] Ground of objection to discharge The failure to comply with s 80(1) is a ground for objection to discharge: s 149D(1)(j). [81,545.20] Offences As to the prosecution of offences under the Act, see s 273.

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[81,550] Discovery of bankrupt’s property etc

81 (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. [subs (1) subst Act 119 of 1987 s 38; am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (1A) insrt Act 119 of 1987 s 38]

(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. [subs (1B) insrt Act 119 of 1987 s 38]

(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. [subs (1C) insrt Act 119 of 1987 s 38]

(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.

[page 332] (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. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (7) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (8) am Act 119 of 1989 s 38]

(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. [subs (10) subst Act 119 of 1987 s 38]

(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. [subs (10A) insrt Act 119 of 1987 s 38]

(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. [subs (11) am Act 44 of 1996 s 3 and Sch 2]

*(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. [subs (11AA) insrt Act 115 of 1990 s 15]

(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 [page 333] 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. [subs (11A) insrt Act 119 of 1987 s 38]

(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. [subs (11B) insrt Act 119 of 1987 s 38]

(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. [subs (12) am Act 119 of 1987 s 38; Act 44 of 1996 s 3 and Sch 2]

(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 firstmentioned person to deliver the property to the trustee within a specified period, in a specified manner and on specified terms. [subs (13) subst Act 119 of 1987 s 38]

(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. [subs (14) am Act 119 of 1987 s 38; Act 9 of 1992 s 22]

(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. (16) [subs (16) rep Act 44 of 1996 s 3 and Sch 1] (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. [subs (17) am Act 21 of 1985 s 22; Act 119 of 1987 s 38; Act 44 of 1996 s 3 and Schs 1, 2; Act 33 of 2006 s 3 and Sch 1[3], opn 31 May 2006] [s 81 subst Act 12 of 1980 s 41] SECTION 81 GENERALLY [81,550.5] General The court or a Registrar may summon the bankrupt or an “examinable person” in relation to the bankrupt, to be examined on oath in relation to the bankrupt or the bankrupt’s “examinable affairs”: s 81(1). A summons may require the production of books: s 81(1B). Application for the issue of a summons can be made by a creditor, the trustee or the Official Receiver: s 81(1). In Karounos v Official Trustee (1988) 19 FCR 330; 80 ALR 626, the Full Court discussed the nature and purpose of the power given by s 81 of the Act: 1. The power given by s 81 of the Act is an unusual and far-reaching one (Re North Australian Territory Co (1890) 45 Ch D 87 at 93; Ex parte Willey; Re Wright (1883) 23 Ch D 118 at 128)

[page 334] and its use could easily become oppressive and vexatious if it is not approached responsibly by applicants for summonses, and controlled carefully by the Registrar and the court: see Re HJ Price (No 3) (1948) 14 ABC 137 at 139–40. 2. However the power is exercised in the interests of creditors, and those interests should not be defeated by an unduly technical or restrictive approach to the use of the power. The procedure is basically designed to establish what assets the bankrupt had, what has happened to those assets, and whether action should be begun (or continued) to recover them. See Re H J Price (No 4) (1948) 14 ABC 142 at 144; Re Andrews (1958) 18 ABC 181 at 184; Re Poulson [1976] 2 All ER 1020 at 1029. Section 81 applies to a debtor who has executed a deed of assignment (s 231) or a deed of arrangement (s 237) or entered a composition (s 243) under Pt X of the Act. As to an examination of a debtor after a bankruptcy notice has been issued, but before a sequestration order is made, see s 50(2) and FCR O 77 r 20. The bankrupt’s failure to attend an examination for the purposes of the Act, without giving the trustee a reasonable explanation, is a ground of objection to discharge: s 149D(1)(m). See also Hamilton v Oades (1989) 166 CLR 486; 85 ALR 1 (Companies Codes). With reference to arrest Flick J in Pearce (Trustee) v Mulhern (Bankrupt) (No 3) (2012) 124 ALD 420; [2012] FCA 16; BC201200072 noted: [11] In the present proceeding, a failure to attend a public examination assumes particular importance. The power to issue a summons requiring a person to attend for examination is conferred by s 81. The purpose of an examination pursuant to s 81 is to enable a Trustee to obtain information which would enable the Trustee to discover and recover assets for distribution to creditors in the bankruptcy. See: CBFC Ltd v Sim [2006] NTSC 57 at [12], 202 FLR 183 at 186. In Nathan v Burness (2011) 193 FCR 360; [2011] FCA 288; BC201101770 (Tracey J) the appellant submitted that on its proper construction s 264C of the Act did not empower the Federal Magistrate to deal with him for contempt. He contended that this submission derived support from the decision of this Court in Re Maher, Maher v Official Trustee in Bankruptcy (1993) 118 ALR 519; 68 LIJ 65d; BC9305112. In that case Olney J held that a person who is summoned under s 81 of the Act to attend before the Court to be examined could not be punished for contempt of court if he or she failed, without reasonable excuse, to so attend. The bankrupt, in that case, had failed to attend for examination despite being summoned pursuant to s 81. His Honour held, as a matter of statutory construction, that the provisions of s 264A(1)(c) and (1A)(a) effectively covered the field and displaced any scope, which otherwise might exist, for contempt proceedings to be brought in respect of the failure to attend. He held that s 264A(2) did no more than preserve “an existing power to punish the contempt” (at 522). In the course of his reasons (at 523) his Honour referred to s 264C in a context which suggested that the application of the same principles of statutory construction, as he had applied to s 264A, excluded the possibility that a person who refused or failed to be sworn at an examination or to answer questions could be prosecuted for contempt of Court. The learned judge held that a failure to appear in response to a summons issued under s 81 of the Act could be dealt with either by the laying of a charge under s 264A or by a proceeding for contempt of Court. Section 264A(2) indicates that such a choice is available. Maher, however, is not binding authority on the construction of s 264C of the Act. Whereas s 264A deals with failures to attend examinations, s 264C is concerned with refusals or failures by a bankrupt to do certain things once he

or she has appeared pursuant to summons. These refusals or failures may result from a refusal or failure to comply with an obligation imposed by s 81 or, independently, from a failure to comply with a direction of the Court or the Registrar to do something which s 81 would otherwise have required. Such a refusal or failure may thus constitute either a statutory offence, or contempt in the face of the Court, or both. Section 264C(2) leaves open the possibility of either prosecution for an offence under s 264C or prosecution for contempt of court being available in such situations. There may be good reason, depending on the circumstances, for resort to be had to the contempt of Court option if contempt is committed in the face of the Court. [page 335] In the later decision of the Court in Ambrose (Trustee), in the matter Peter Athanasas (Bankrupt) (No 2) [2008] FCA 1016; BC200805216, the bankrupt had attended for examination pursuant to a summons but had failed to produce documents as required by the summons. The Registrar adjourned the examination for hearing before this Court. When he appeared before the Court Lander J advised the bankrupt’s solicitor that: “He [the bankrupt] ought to understand that under s 264C his failure to comply with the summons is a criminal offence for which he can be fined or imprisoned, but it’s more than that. If this court takes a view that he has failed to comply with an order of the court, this court has power of its own motion to commit him to prison as a contempt of the court and that power is given to the court by Order 40 of the Federal Court Rules.” The powers extend to restriction of the respondent’s right to travel which may be extended by the trustees: see Lees v O’Dea [2014] FCA 571; BC201404229. [81,550.10] Application for issue of summons Application for the issue of a summons to a relevant person is made to the Registrar in accordance with Form 154 (FCR O 77, r 28), and must be accompanied by an affidavit containing the information set out in r 28(2). Application for a summons to an examinable person is made to the court or a Registrar in accordance with Form 5 or 154 respectively (FCR O 77, r 33), and must be accompanied by an affidavit containing the information set out in r 34 (which includes a draft summons). The supporting affidavit may be filed in a sealed envelope marked “Affidavit supporting application for summons for examination under s 81(1) of the Bankruptcy Act 1966”: O 77 rr 34 and 35. In Re Southern Equities Corp Ltd (in liq); Caboche v England (1997) 24 ACSR 582, the court considered the principles applicable to an application to inspect such an affidavit in the context of s 596 of the Corporations Law. Note: Bankruptcy Rules r 129 (now repealed) provided in the case of an examinable person, that the affidavit in support of an application for a summons set out evidence of enquiries, requests etc concerning the subject matter of the examination and the information sought. This requirement would now appear to be limited to enquiries, requests etc concerning books: FCR O 77, r 34(2)(c). The summons must be in accordance with Form 151, and if issued by a Registrar be signed and stamped by the Registrar. The summons must also identify any books that are to be produced: FCR O 77, rr 29 and 31. See Karounos v Official Trustee (1988) 19 FCR 330; 80 ALR 626, for a statement of the principles applicable in relation to the issue of summonses; but note that Karounas was decided prior to the 1989 amendments and the repeal of the Bankruptcy Rules (especially r 129). [81,550.15] Service The summons must be served personally, or in another way directed by the court or a judge, and notice must be given to each of the creditors known to the applicant, at least eight days before the date fixed for the examination: FCR O 77, rr 30 and 37. Note that reg 16.01 provides five

methods by which a document may be given to or served on a person “unless the contrary intention appears”. In Re Skase; Ex parte Donnelly (1991) 32 FCR 212; 104 ALR 229, Pincus J made an order pursuant to s 309(2) for substituted service of a summons under s 81 out of the jurisdiction. The power to order substituted service is now also conferred by FCR O 77, rr 30 and 37. For an example of some of the difficulties associated with the issue and execution of a warrant where the person is out of the jurisdiction, see Re Skase; Ex parte Donnelly (1992) 37 FCR 509; 114 ALR 303. A person other than a relevant person is entitled to conduct money and reasonable expenses for his or her attendance as a witness: FCR O 77, r 39. [81,550.20] Setting aside, discharge and adjournment and scope A summons may be set aside, discharged or adjourned on the ground that compliance with it would be vexatious or oppressive, or that it is being used for an improper purpose: Karounos v Official Trustee (1988) 19 FCR 330; 80 ALR 626. [page 336] In Karounos at ALR 633–4 the Full Court summarised the principles in relation to the discharge or adjournment of a summons in circumstances where litigation is pending: (8) Discharge or adjournment of a summons may be appropriate where there is litigation pending or likely to be instituted and it is alleged that: (a) the summons is being improperly sought as an aid to that litigation (cf Re North Australian Territory Co (1890) 45 Ch D 87; Re Bletchley Boat Co Ltd [1974] 1 WLR 630 at 637), where ordinary procedures of discovery, interrogation or subpoena would be fairer and more appropriate, or (b) it would be more just and equitable to defer the examination under s 81 of the Act until the particular piece of litigation has been disposed of. (9) If such an application is made to the court by a person summoned, the court must consider afresh, on the material before it, whether the summons should be set aside or adjourned to a more convenient time. It is not merely deciding whether, on the material before the Registrar, he correctly exercised his discretion. (10) There is no difference in principle between cases where proceedings have actually been instituted and where they are merely in contemplation, see Re Hugh J Roberts Pty Ltd (in liq) (1970) 91 WN (NSW) 537 at 541; but where litigation is afoot the issues will be clearer, procedures of discovery, inspection and subpoena available, and a time of hearing more certain. Any of these factors may affect the court’s decision in a particular case. (11) Where litigation is pending or likely to be brought and the information sought under a summons could affect that litigation, there is no presumption that the summons will be set aside or adjourned. It would normally only be set aside if the application were defective in some way or the court found some improper motive behind the application. It would be adjourned if the balance of justice and convenience in the particular case so required. In some cases it might be appropriate to defer examination on a particular topic. In all cases the Registrar or the court will be careful to see that injustice is not occasioned in the course of examination by the particular questions asked; see, for example, Re Anderson; Ex parte Official Receiver (1937) 10 ABC 284 at 288–9; Re Andrews (1958) 18 ABC 181 at 184–5; Re Hugh J Roberts, above, at 539, 542. (12) Both the Registrar and the court will give due weight to the fact that a summons is sought by the Official Trustee, who will not be presumed to have acted unfairly or for an improper purpose except

on convincing evidence; Re H J Price (No 3) (1948) 14 ABC 137 at 141. The same is true of an official liquidator: see Re Castle New Homes Ltd [1979] 2 All ER 775; [1979] 1 WLR 1075; Re John Arnold’s Surf Shop Pty Ltd (in liq) (1979) 4 ACLR 663; 23 SASR 222; (1980) CLC 40–605. But an application by the Official Trustee will still be subject to proper scrutiny and will be refused if the Registrar or Court is not satisfied that it should be granted. The bankrupt’s failure to attend an examination for the purposes of the Act, without giving the trustee a reasonable explanation, is a ground of objection to discharge: s 149D(1)(m). For the procedure on an application for an order to discharge a summons, see FCR O 77 r 38. As to scope, as Hely J said in Sheahan (Trustee) v Scott [2003] FCA 141; BC200300682 at [18]: [18] There is nothing in the Federal Court Rules which requires disclosure of the areas of enquiry intended to be covered at the examination, nor is there any provision in the prescribed form of summons for inclusion of that information. By force of s 81(1A) and 81(10) of the Act, the permissible scope of an examination is asking appropriate questions about the bankrupt, or the bankrupt’s examinable affairs. In Pollak v Lombe [2004] FCA 362; BC200401407, an application was made before Beaumont ACJ seeking to discharge a summons for abuse of process. It was claimed that the summons was an abuse of process, primarily because there was no apparent limit of scope. However, his Honour noted the remarks of Windeyer J in Rees v Kratzmann (1965) 114 CLR 63 at 79; [1966] ALR 3; (1965) 39 ALJR 204; BC6500540: But I see nothing in the Act that requires the court to limit the examination of a person to particular matters or transactions mentioned in the liquidator’s report. Something of importance [page 337] may emerge as the inquiry proceeds. How far trails may be followed cannot, I think, be laid down in advance, for the purpose of the inquiry is the discovery of facts. Despite making the order sought, his Honour said it was necessary to bear in mind the caveat expressed by Lockhart J in Re Jonson; Ex parte Prentice as Trustee of the Estate of Jonson (FCA, Lockhart J, NB 2908/94, 1 September 1997, unreported, BC9703993) (BC9703993 at 10) to the effect that the power to issue a summons to obtain information must be exercised with particular care, following the principles set out above. In BDT Holdings Pty Ltd v Piscopo (No 3) [2010] FCA 1480; BC201010234, Rares J applied O 22 r 2(1)(d) of the Federal Court Rules to an application for discontinuance to an application to set aside an examination summons under s 81. His Honour applied the following principles: [5] Where a party seeks to discontinue proceedings without the leave of the court, ordinarily, that party becomes liable to pay the costs of the other party or parties unless, in cases where they consent, the consent provides otherwise. As Jacobson, Siopis and Foster JJ said in Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd (2010) 265 ALR 112 at 136 [116], O 22 r 3 reflects a more general policy of the law to the effect that a party should always be permitted to discontinue his, her or its proceedings, but that, in the modern setting, they should usually have to pay the costs of the other parties occasioned by the bringing of the proceedings and their subsequent abandonment. Their Honours noted that in Mineralogy Pty Ltd v National Native Title Tribunal [1998] FCA 1700, Lee, Tamberlin and RD Nicholson JJ had held that, when the court was considering the question of costs in relation to an application for leave to discontinue

proceedings pursuant to O 22 r 2(1)(d), the appropriate test to apply was that explained by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624–625. [81,550.25] Attendance — s 81(1A) The court, Registrar or magistrate may issue a warrant for the arrest of a person who fails to attend as required by the summons, or to appear and report from day to day, as required by the court, the Registrar or magistrate: s 264B. As to the procedure for the issue of a warrant, see FCR O 77 rr 64 and 65. As to the issue and execution of a warrant in respect of a person who is out of the jurisdiction, see Re Skase; Ex parte Donnelly (1992) 37 FCR 509; 114 ALR 303. [81,550.30] Examination The examination is held before the court, the registrar or a magistrate and in public: s 81(2). It may be adjourned from time to time: s 81(3). A creditor (see Re Clyne; Ex parte DCT (1986) 15 FCR 128; 68 ALR 603), the trustee or the Official Receiver may take part in the examination, and may be represented by counsel, a solicitor or an agent: s 81(8). But a relevant person does not have the right to take part in an examination by putting questions to a witness: Re Jacka; Ex parte Jacka (1986) 12 FCR 44; 66 ALR 564. In Re Wyatt (1969) 15 FLR 374, Gibbs J found it unnecessary to lay down any general rules as to the procedure to be followed when a medical certificate is tendered on behalf of the examinee, but said that the registrar should be mindful of two matters. First, the necessity to ensure that a warrant is not issued where a person is genuinely too ill to attend. Second, the general principle that adverse orders should not be made until a person has had a full and fair opportunity to be heard. Also note the provisions of s 34 of the Act. [81,550.35] Produce books — s 81(1B) and (11A) In Re Florance; Ex parte Hardiman v Andrew (FCA, Foster J, 3 August 1992, unreported), Foster J upheld the registrar’s decision to allow the trustee access to books produced. Note that Lander J punished a failure to obey a similar summons with contempt in Ambrose (Trustee), in the matter of Peter Athanasas (Bankrupt) (No 2) [2008] FCA 1016; BC200805216. [81,550.40] Answer questions — s 81(11) The decision of a registrar to allow a question to be put to an examinee may be reviewed by the court or a judge: FCR O 77 r 8. Such a decision may also be reviewed under the Administrative Decisions (Judicial Review) Act 1977, but relief is discretionary: see for example Clark v Wood (1997) 78 FCR 356; 149 ALR 38. [page 338] If the examinee refuses to answer a question, then the examination may be adjourned before the court (pursuant to s 81(4)), which has the same power to punish for contempt as is possessed by the High Court: s 31 Federal Court of Australia Act 1976 and see Coward v Stapleton (1953) 90 CLR 573; [1953] ALR 743. [81,550.45] Privilege against self incrimination — s 81(11AA) In Griffin v Pantzer [2004] FCAFC 113; BC200402587 the Full Court of the Federal Court dealt comprehensively with the right to claim privilege against self-incrimination, including the historical background and the principles below. Put briefly, the situation set out below of a discretionary power in the person conducting the examination is both supported and linked to the progress of the legislation. The defences of “reasonable excuse” in ss 265A, 267B and 267F were held at [212] not to affect:

… the interpretation that is necessary for s 77(1)(a). These provisions concern demands made for information and books not only to the bankrupt but also to other persons. The use of the “reasonable excuse” defence by Parliament in this context does not gainsay the necessary and implied abrogation of the privilege in respect of the production of books under ss 77(1)(a) and 81(1B). A relevant person is not excused from answering a question merely because to do so might tend to incriminate him or her: s 81(11AA); see also s 306A and Re Clyne; Ex parte DCT (1986) 15 FCR 128; 68 ALR 603. Nevertheless, the court, the registrar or the magistrate has a discretion as to whether a question may be put to the relevant person. In exercising that discretion, “the harm that may be done to the witness by requiring an answer should be balanced against any benefit likely to accrue as to disclosure or recovery of assets, elucidation of the causes of the bankruptcy or otherwise relating to the bankruptcy”. Questions, the purpose of which appears to be to obtain evidence to assist in proof of a charge already laid, should be disallowed: Re Gordon (1988) 18 FCR 366; 80 ALR 289. See also Barton v Official Receiver (1977) 13 ALR 283; 29 FLR 195. In the case of an examinable person, it is likely that the privilege against self-incrimination would be available. See generally Sorby v Commonwealth (1983) 152 CLR 281; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328; 45 ALR 509; 57 ALJR 236; (1983) ATPR ¶40-341; Hamilton v Oades (1989) 166 CLR 486 at 498–9, 501–2; 85 ALR 1 at 8–11 and Re Bond; Ex parte Ramsay (1994) 54 FCR 394 at 401; 126 ALR 720 (in the context of s 77 of the Act). Lombe v Pollak [2004] FCA 264; BC200401094 was one case where a claim of professional privilege, and waiver thereof, was claimed in bankruptcy proceedings. The issue was determined according to the principles of Esso Australia Resources Ltd v FCT (Cth) (1999) 201 CLR 49; 168 ALR 123 and Mann v Carnell (1999) 201 CLR 1; 168 ALR 86. Jacobson J specifically noted DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499; [2003] FCA 384; BC200301932 and said at [36]: I respectfully agree with Allsop J that waiver can only occur in pleadings where the issue is raised by the party otherwise entitled to the privilege. It seems to me that the concept of waiver necessarily imports some conduct on the part of the privilege holder which brings about the loss of the privilege. On the issue as to whether privilege could be waived by not claiming it in a liquidator’s examination, Re Compass Airlines Pty Ltd (1992) 35 FCR 447; 109 ALR 119 so held. [81,550.50] Client legal privilege Legal professional privilege (or “client legal privilege” as it is called in the Evidence Act 1995 (Cth)) is not expressly abrogated by s 81. The question is whether that privilege is abrogated by necessary implication. In the case of an examinable person it is likely that legal professional privilege would be available. In the case of the relevant person, different considerations apply. Whilst the privilege has been held to be available to a bankrupt (for example Re Wagner; Ex parte Stapleton v Bennett (1964) 20 ABC 133 and Re Furney (1964) 20 ABC 166), a bankrupt may not be able to assert the privilege [page 339] where the communication was “so closely connected with property of the bankrupt which vests in the trustee”: Re Steele (1994) 48 FCR 236; 119 ALR 716 at 725 (in the context of s 77AA of the Act).

See generally, Baker v Campbell (1983) 153 CLR 52; Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403; 85 ALR 588; Re Compass Airlines Pty Ltd (1992) 35 FCR 447; 109 ALR 119; Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319; 100 ALR 609; Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360; 152 ALR 418. See also [81,525.20]. [81,550.55] Evidence Act 1995 (Cth) A summons under s 81 may be made returnable before the court, the registrar or a magistrate: s 81(1A)(b). However, in practice almost all summonses are made returnable before a Registrar. In the case of an examination before a Registrar acting administratively, it is unlikely that the Evidence Act 1995 would have any direct application: see Evidence Act 1995 s 4 and the definition of “federal court”. In the case of an examination before the Court or the Registrar sitting as the Court, there is a strong argument that the provisions of the Evidence Act 1995 would have direct application: compare Re Interchase Corp Ltd (1996) 68 FCR 481; 139 ALR 183 (Corporations Law examination). But quaere whether evidence is ‘adduced’ at an examination. [81,550.60] Costs — s 81(14) Prior to the insertion of s 81(14), it was held that there was no power to order the costs of a witness examined before a Registrar: see Re Kusmenko; Golovachenko v Official Receiver (1976) 14 ALR 673; 28 FLR 183. However, Riley J went on to consider what would have been the position if such a power existed. His Honour cited with approval the decision in Re Anderson; Ex parte Official Receiver (1937) 10 ABC 284, in which it was held that the discretion to award costs in favour of an examinee should only be exercised if legal proceedings were “either actually in existence or in contemplation, in the sense of being actually determined upon” by the trustee. It is arguable that this is now the law in relation to the exercise of the discretion in relation to costs under s 81(14). [81,550.65] Conduct money A person other than the relevant person is entitled to be paid conduct money and reasonable expenses: FCR O 77 r 39. The conduct money must be paid a reasonable time before the person’s attendance as a witness. The expenses must be paid by the applicant: compare s 81(14). The term “expense” means pecuniary loss suffered by a witness as a result of the witness’s attendance to give evidence, and does not include an amount for perusing documents: Re Klekner (1966) 8 FLR 53. Note: this case was decided before there was express provision for the payment of costs in s 81(14). [81,550.70] Evidence — s 81(15), (17) and s 255 See also [81,525.20]. In Colonial Mutual Life Assurance Society Ltd v Donnelly (1998) 82 FCR 418; 154 ALR 417, the Full Court held that a transcript of an examination under s 81 of the Act is admissible against a party other than the examinee in proceedings under the Act, provided that the examinee is also made a party to the proceedings. The transcript is admissible as evidence of both the words spoken by the examinee, and the matters described by the examinee in his or her evidence. Nevertheless, the court has a discretion under s 255(2) to exclude evidence otherwise admissible under that section (for example on the basis that it is unfairly prejudicial). The court left open the question of what relationship s 255(2) of the Act bears to ss 135 and 136 of the Evidence Act 1995. In Re Schofield; Ex parte Rangott v P & B Barron Pty Ltd (1997) 143 ALR 185, a trustee who sought to have the transcript of evidence given by a company officer at a s 81 examination admitted in evidence in a proceeding where the company was the respondent, failed on the basis that the evidence was not that of the company. Finn J held that transcripts of s 81 examinations will only be admitted in evidence in a proceeding under the Act if the person examined is a party to the proceeding. His Honour said the decision by the legislature to retain the “person as a party” limitation in s 81(17) is inconsistent with an intention that all transcripts are admissible in evidence unless the court orders to the contrary

(see s 255). Sections 64, 67 and 190 of the Evidence Act 1995 (Cth) do not assist in making transcripts of evidence of s 81 examinations admissible in evidence [page 340] in proceedings under the Bankruptcy Act: “If Parliament in the Evidence Act intended to remove or weaken limitation imposed on the admissibility of s 81 transcripts, it properly could have been expected to have done so expressly and unequivocally”. His Honour further held that a company could only be an “examinable person” for the purposes of s 81 if it was an “associated entity” of the bankrupt, as defined in s 5(1). As the corporation could not give oral evidence and the oral evidence given by the officer of the corporation was that of a witness not of the corporation, the transcript could not be admitted. In Jack v Smail (1905) 2 CLR 684, the trustee sought to use a sworn deposition of the wife of the bankrupt in a proceeding against her for a voidable settlement of property. At 695, Griffiths CJ held that “being used as an admission, the trustees must take the deposition as they find it. They cannot select a fragment and say it bears out their case, and reject all the rest that makes against their case. They must take the deposition as a whole.” See also Colonial Mutual Life Assurance Society Ltd v Donnelly, above. If the applicant intends to rely on a transcript of the examination of a bankrupt in proceedings under s 121 of the Act, then the bankrupt must be joined as a respondent to the application: Re Mannella; Ex parte Official Trustee v Giorgio (1989) 21 FCR 50. The circumstances in which the discretion should be exercised were considered by the Full Court of the Federal Court in Re Morris; Ex parte Donnelly (1997) 77 FCR 303; 148 ALR 349; BC9704113 where it was submitted that a party had been unfairly prejudiced by the receipt of the transcript. It was emphasised that the significance and weight of the transcript was subject to other evidence. In this case the objecting party had not made out a case for the exclusion of the evidence under s 135 of the Evidence Act because it had not been sought to balance the transcript by the calling of evidence reasonably available for that purpose. This and a number of other decisions on this and related points are considered in Confidential & Commissioner of Taxation [2013]AATA 112; BC201309073. [81,550.75] Offences Failure to comply with the provisions of s 81 will generally constitute an offence: see ss 264A (failure to attend before the court etc), 264C (refusal to be sworn or give evidence), 264D (prevarication or evasion in the course of giving evidence) and 264E (other offences). See also, ss 265 and 306A(3). A bankrupt who gives answers of such a nature as to convey to the court the intention of not giving any real answers to the questions to which they relate, can properly be convicted of refusing to answer such questions, but before he or she is convicted of contempt of court, the specific charge against the bankrupt must be distinctly stated and he or she must be allowed a reasonable opportunity to be heard in his or her own defence: Coward v Stapleton (1953) 90 CLR 573; [1953] ALR 743. Since that case Nathan v Burness (2011) 193 FCR 360; [2011] FCA 288; BC201101770 has been decided by Tracey J. That case was an appeal against a Federal Magistrate who had punished the appellant for contempt in that contemnor had, in the face of the court, declined to take the oath and to be examined by a Registrar. The judge considered Re Maher, Maher v Official Trustee in Bankruptcy (1993) 118 ALR 519; 68 LIJ 65d; BC9305112, a decision of Olney J who had held as matter of statutory construction that the provisions of subs 264A(1)(c) and (1A)(a) effectively covered the field and displaced any scope, which otherwise might exist, for contempt proceedings to be brought in respect of the failure to attend. He held that s 264A(2) did no more than preserve “an existing power to punish the contempt” (at 522). In the course of his reasons (at 523) his Honour referred to s 264C in a context which suggested that the application of the same principles of statutory construction, as he had

applied to s 264A, excluded the possibility that a person who refused or failed to be sworn at an examination or to answer questions, could be prosecuted for contempt of court. The judge in the instant case held as follows [30] … Maher, Maher, however, is not binding authority on the construction of s 264C of the Act. Whereas s 264A deals with failures to attend examinations, s 264C is concerned with refusals or failures by a bankrupt to do certain things once he or she has appeared pursuant to summons. These refusals or failures may result from a refusal or failure to comply with an obligation imposed by s 81 or, independently, from a failure to comply with a direction of the court or the Registrar to do something which s 81 would otherwise have required. Such a refusal or failure may thus constitute either a statutory offence, or contempt in the face of the court, or [page 341] both. Section 264C(2) leaves open the possibility of either prosecution for an offence under s 264C or prosecution for contempt of court being available in such situations. There may be good reason, depending on the circumstances, for resort to be had to the contempt of court option if contempt is committed in the face of the court. The judge preferred to apply Ambrose (trustee), Re; Athanasas (bankrupt) (No 2) [2008] FCA 1016; BC200805216, As was stated by the Judge; “the bankrupt was found to have been in contempt, not by reason of a failure to comply with directions given by the court, but rather by failure to comply with obligations imposed on him by ss 81 and 264C of the Act. It is also to be noted that Maher was not cited in argument. Nonetheless, it is clear that Lander J considered that he could deal with the bankrupt’s failure to meet his statutory obligations as a contempt of court rather than adjourn the hearing and await a decision by a prosecuting authority to lay charges, the conduct of a trial and the imposition of a penalty by another court.” The appellant argued that the Federal Magistrate’s finding of contempt was procedurally flawed because the charge of contempt was not clearly stated and he was not given sufficient opportunity to defend it. He was entitled to these protections under Pt 19 of the Federal Court Rule, namely r 19.01, which provided certain protections to the accused in such cases, that the Federal Magistrate which had been codified by Coward v Stapleton (1953) 90 CLR 573; [1953] ALR 743; (1953) 27 ALJR 423; BC5301000, above, the judge took the view that the contemnor’s conduct had been such, making it clear to the magistrate that he would not carry out the Magistrate’s directions, that the magistrate complied with r 19.01. Finally, the magistrate had not failed to give the comtemnor an opportunity to be heard on sentence because “… to adapt the words of Kirby J in Antoun v R (2006) 224 ALR 51 at 60; 80 ALJR 497; [2006] HCA 2; BC200600326, his Honour’s view that imprisonment was the only available penal option was “stated peremptorily, repeated emphatically and given force by [his] later remarks and actions.” See [81,550.25] in relation to the issue and execution of a warrant under s 264B of the Act. Failure to attend an examination is not punishable as a contempt: Re Maher; Maher v Official Trustee in Bankruptcy (1993) 118 ALR 519.

____________________ *Editor’s note: Section 15(2) of the Law and Justice Amendment Act of 1990 provides:

(2) Section 81 of the Principal Act, in force immediately before the commencement of this section, continues to apply in relation to the examination of a person who, before that commencement, became a “relevant person” within the meaning of that section.

DIVISION 2 — OFFSHORE INFORMATION NOTICES [Div 2 insrt Act 9 of 1992 s 23]

[81,580] Issue of notices 81A (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. [page 342]

[81,585] Extension of period of notice 81B (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.

[81,590] Variation of notices 81C (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.

[81,595] Withdrawal of notices 81D (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. [page 343]

[81,600] Notices may be included in same document 81E An offshore information notice may be contained in the same document as a notice under section 77C.

[81,605] Relationship between this Division and section 77C 81F 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 [Div 3 insrt Act 9 of 1992 s 23]

[81,630] Effect of non-compliance with notice 81G (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

[81,650] Debts provable in bankruptcy 82 (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. [subs (1) am Act 86 of 2001 s 3 and Sch 2, opn 18 July 2001]

(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. [subs (1A) subst Act 44 of 1996 s 3 and Sch 1]

[page 344] (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. [subs (3) am Act 73 of 1987 s 8; Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

(3AA) An amount payable under an order made under section 1317G of the Corporations Act 2001 is not provable in bankruptcy. [subs (3AA) insrt Act 210 of 1992 s 20; am Act 55 of 2001 s 3 and Sch 3, opn 15 July 2001]

(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); (b) Part 3.1 of the Trade Support Loans Act 2014 (trade support loan debts). [subs (3AB) subst Act 82 of 2014 s 3 and Sch 1 item 1, opn 18 July 2014]

(3A) An amount payable under an order made under a proceeds of crime law is not provable in bankruptcy. [subs (3A) subst Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

(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. [subs (3B) insrt Act 119 of 1987 s 39]

(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. [subs (5) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. SECTION 82 GENERALLY [81,650.1] Provable Debt Difficulty is often encountered in distinguishing between unliquidated claims in contract (which are provable), liquidated claims in tort (which are also provable) and unliquidated claims in tort (which are not provable). Part X composition The decisions of the Supreme Court of Western Australia in Barewa Oil & Mining NL (in liq) v Isim Mineral Development Pty Ltd (1981) 38 ALR 288 (Brinsden J) and (on [page 345] appeal from that decision) Cornelius v Barewa Oil & Mining (NL) (in liq) (1982) 42 ALR 83 concern the question of whether or not a composition under Pt X of the Bankruptcy Act 1966 operates to release a claim founded in tort (the alternative claims were expressed as money had and received by a company director in fraud of the company’s creditors, conspiracy to defraud the company’s creditors and deceit); but they were ultimately resolved (the appeal to the Full Court of the Supreme Court of Western Australia being dismissed) on the basis that a claim for “pure fraud” could not be released on discharge from bankruptcy (or by virtue of the approval of a composition). The proposition that unliquidated claims in tort are not provable is supported by ancient and unambiguous authority, for example Re Newman (1876) 3 Ch D 494 (which was cited with approval and explained by Kennedy J in Cornelius v Barewa Oil & Mining (NL) (in liq), above at 83). Indeed, when referring to the expression “breach of trust” used in ss 82(2) and 153(2)(b) of the Bankruptcy Act 1966, Kennedy J adverted to the fact that “contract was regarded ‘at the root of the liability of every person of whom it can be rightly predicated that he stands in a fiduciary relation to another, whether such person is called trustee, promoter, fiduciary agent, or otherwise’”. The ratio of the Full Court decision was expressed by Burt CJ at 84: A claim for damages for fraudulent misrepresentation remains a claim or demand for unliquidated damages even if the relief as claimed is for a liquidated amount. A conspiracy to injure is only actionable if it results in damage and the damages are in all such actions unliquidated. To quantify the damage in a pleading cannot, in my opinion, change the “nature” of the demand or the “nature” of the cause of action. It remains a demand “in the nature of unliquidated damages” and it arises “otherwise than by reason of a contract, promise or breach of trust” and hence it is a demand not provable in bankruptcy. The classic distinction between “debt or liquidated demand” on the one hand and “unliquidated damages” on the other hand is that given by Odgers, Pleading and Practice, 12th ed, 1939, pp 47–8, approved by Knox CJ and Starke J in Spain v Union Steamship Co of New Zealand Ltd (1923) 32 CLR 138 at 142, namely: … whenever the amount to which the plaintiff is entitled (if he is entitled to anything) can be ascertained by calculation or fixed by any scale of charges or other positive data, it is said to be liquidated or “made clear”. But an action in which the amount to be recovered depends upon all

the circumstances of the case, and no one can say positively beforehand whether the plaintiff will recover a farthing or 40 shillings, or 100 pounds is an action for unliquidated damages. This textbook distinction might seem trite, and (as Sholl J observed in Alexander v Ajax Insurance [1956] VLR 436 at 440) it does “not satisfactorily cover those cases in which a claim is made on one or more of the common counts for the payment of a reasonable price for goods or labour”. And it is well settled that a sum payable as “liquidated damages”, under an agreement, would fall within the definition “debt or liquidated demand” (as used in the former O 14 r 1 of the Victorian Supreme Court Rules). His Honour continued at 441: For example, the case of a claim on a common count before a jury for the reasonable price of goods would involve an assessment by the jury upon evidence, as to what was reasonable, and yet that would for historical reasons be a “liquidated demand”. On the other hand, in a case involving the question of the availability of the defence of set-off, it was held that a claim under a policy of marine insurance upon goods, for a partial loss, was a claim for unliquidated damages against which a claim for premiums could not be set-off, even though there had been an “adjustment”, whereby the defendant’s proportionate share of the loss … had been agreed (at a certain amount); see Luckie v Bushby (1853) 13 CB 864. At 442 of his judgment Sholl J referred to an earlier Victorian decision: In Finn v Gavin [1905] VLR 93, Madden CJ, at 95–6, propounded and applied yet another test of the meaning of the words “debt or liquidated demand in money” (this expression being the converse of “unliquidated damages”). The plaintiff there claimed, on a specially endorsed writ (a certain sum) for money due under a covenant in a lease whereby the defendant lessee had promised to observe the provisions of the Rabbit Act 1890 and the Thistle Act 1890 and to indemnify the plaintiff lessor against all liabilities, obligations, fines and penalties in respect [page 346] thereof. The defendant had failed to observe the acts, and the plaintiff as owner had been fined (that certain sum including costs) in relation to the prosecution. Madden CJ, held that the claim could not be specially endorsed, saying: “This is an action on a covenant of indemnity. It is an action for damages in which as far as I can see the proof of the damages will be exceedingly easy as to their extent but suppose that no proof were given of any damage, the plaintiff would be entitled to 1 shilling. I think that is the test. If plaintiff were suing for a liquidated money demand, and proved none, he could not get anything; but if he were suing for unliquidated damages, he would be entitled to 1 shilling damages for breach of the covenant if he proved no other loss. Therefore it seems to me that this is an action on a contract under seal, not for a liquidated money demand, but for damages for breach of covenant. For that reason I think that it does not fall within the rule as to special indorsements.” It may be, having regard to the wording of the covenant in that particular case, that upon proof of non-compliance by the defendant with the relevant acts, the plaintiff could have recovered nominal damages even if he had not been prosecuted. But the plaintiff did not sue for any such damages; he sued for “money due” under the covenant, and if he had failed to prove that he had been fined or put to costs, it is difficult to see how he could have recovered even nominal damages without an amendment of his claim. Sholl J then considered the origins of the modern distinction between a liquidated demand on the one hand and “unliquidated damages” on the other hand. His Honour ultimately determined that a claim for

indemnity under a general policy of insurance (not valued) could not be a claim for a liquidated amount. The observations of Sholl J need not be confined to contracts of insurance or indemnity, as his Honour passed further comment upon the decision of Finn v Gavin, above, of his judgment: Whether that case was rightly decided or not depends, I think, upon the answer to the question whether the claim there made, for the recovery of a specific sum for fines and costs, could have been at common law the subject of a liquidated claim in covenant, or possible even in debt if the covenant had been simply to re-pay to the plaintiff the amount of any fines inflicted on him by reason of defendant’s defaults. I should think a claim thereunder for repayment of specified fines would have been a liquidated demand. Perhaps the same might be true of a simple covenant to indemnify a party against any fines of a specific character. However, Sholl J went on (at 449) to highlight the need for careful historical analysis in explaining satisfactorily the fact that a claim for indemnity on a policy of insurance of goods is in general a claim for unliquidated damages, whereas a claim for a reasonable sum for goods sold and delivered or work and labour done is a claim for a debt or liquidated demand in money. In this regard, his Honour quoted from the judgment of Pearson J in Jabbour v Israel [1954] 1 All ER 145 at 151: “The explanation of the use of the expression ‘unliquidated damages’ to describe a claim for an indemnity under an insurance policy may be wholly or partly afforded by the old form of pleading in assumpsit, alleging a breach by non-payment, as in Castelli v Boddington. But, as the only wrong admitted by the insurer is his failure to pay a sum due under a contract, the amount of which has to be ascertained, he seems to be in much the same position as the person who owes and has failed to pay a reasonable price for goods sold and delivered or a reasonable remuneration for work done or services rendered. The claim is for unliquidated damages, but the word ‘damages’ is used in a somewhat unusual sense.” Sholl J concluded (at 450) that the claim in question “is a claim to be indemnified in respect of whatever the plaintiff can prove to have been his actual loss, and that will depend upon evidence, which is likely to be conflicting, as to (a) what was lost, and (b) what was its fair value at the time, and (c) possibly also, what consequential loss the plaintiff has suffered. Those are all matters which almost any lawyer would, I think, regard as fairly characteristic of an unliquidated claim.” Sholl J at 445 expressed the view that the words “debt or liquidated demand in money” covered any claim: (a) for which the action of debt would lie; (b) for which an indebitatus (or “common”) count would lie — including those cases [page 347] formerly covered by the quantum meruit or quantum valebat counts, notwithstanding that the only agreement implied between the parties in such cases was for payment at a “reasonable” rate; (c) for which covenant or special assumpsit would lie, provided that the claim was for a specific amount, not involving in the calculation thereof elements the selection whereof was dependent on the opinion of the jury. These suggested criteria were the subject of consideration by Hudson J in Lombard Australia Ltd v Smeaton [1966] VR 272 where “the question was whether the complaint was for a liquidated amount in respect of a cause of action arising out of a contract express or implied”, the relevant contract being a hire purchase agreement pursuant to which the amount of the claim could only be calculated after the making of an allowance for the value of the repossessed goods. The defendant contended that the claim

did not fall within any of the categories suggested by Sholl J, but Hudson J considered that, whatever the accuracy and sufficiency of the definition by Sholl J, the decision of the High Court in Spain v Union Steamship Co of New Zealand Ltd, above governed the case before him. There, the High Court held that under a clause in an award of the Arbitration Court, an employee was entitled to “reasonable expenses” incurred in the interests of the employer (namely, solicitor’s costs upon an inquiry by the Court of Marine Inquiry into the cause of the wreck of the employer’s ship of which the plaintiff was master). In Re WA Brown & Sons Pty Ltd [1964–65] NSWR 575, McLelland CJ in Equity held that the statutory right of contribution between tortfeasors was a claim for an “unliquidated sum” rather than “unliquidated damages”, and thus admissible to proof in a company winding up (to which the provisions of s 82 applied). Although cited by Nicholson J in Re Gasbourne Pty Ltd [1984] VR 801 at 837–8 as providing some support for the conclusion that a bank claiming indemnity or contribution as a contingent creditor was entitled to locus standi, it must be observed that McLelland CJ relied upon an equivocal textbook opinion, was not referred to the decisions of Sholl J in Alexander v Ajax Insurance, above and Gilchrist v Dean [1960] VR 266; (1960) 2 FLR 175, and cited authorities which go no further than to establish that the statutory right of contribution is not founded in tort. A “liquidated demand” may involve either a liquidated or an unliquidated sum: see Alexander v Ajax Insurance, above at 440–50. Liability between joint tortfeasors But there is a distinction between the statutory right of contribution between tortfeasors (which arises after liquidation — by judgment — of the claim against those tortfeasors or is otherwise dependent upon the prior outcome of proceedings between the head claimant and one of the joint tortfeasors) and a claim (whether in respect of a statutory remedy or not) for indemnity where the elements of liability (as well as quantum) fall to be established principal proceedings by the claimant against the alleged indemnifier; compare Borg Warner v Zupan [1982] VR 437 at 455–6; (1981) 69 FLR 300; Ryder v Hartford Insurance Co [1977] VR 257. In particular a claim under s 23(B) of the Wrongs Act 1958 (Vic). In such a case joint tortfeasors may not have direct claims against each other in respect of a joint liability which they may have to a person who has been wronged by them and, in such cases, the claims between the joint tortfeasors for contribution are independent from the claim of the plaintiff against them in tort or contract (Harvey v RG O’Dell Pty Ltd [1958] 2 QB 78; [1958] 1 All ER 657, at 107–8; [1958] 2 WLR 473; [1958] 1 Lloyd’s Rep 273; WA Brown & Sons Pty Ltd [1964–5] NSWR 575, at 580; 81 WN (Pt 1) (NSW) 402; Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213 at 218 and 221; [1966] ALR 981; (1966) 39 ALJR 410; BC6600230) and do not arise until “payment of the liability to which [the right to contribution] relates and not before” (Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 595; 36 ALR 3; 55 ALJR 621; BC8100097; John Holland (Construction) Pty Ltd v Jordin (No 2) (1985) 36 NTR 1; 79 FLR 210 at 217; Van Win Pty Ltd v Eleventh Mirontron Pty Ltd [1986] VR 484 at 490–2; 58 LGRA 259) notwithstanding that “litigation on the indemnity [can] take place before there is any liability” See Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; 36 ALR 3; 55 ALJR 621; BC8100097. In Sutherland v Jatkar [2014] FCA 532; BC201403932 at [10] was put by Pagone J: The first question which arises is, therefore, whether that claim was nonetheless a contingent debt or liability within the meaning of s 82(1) and therefore whether it was provable in the bankruptcy. The object of s 82(1) is to capture and to have proved in the bankruptcy a broad [page 348] range of debts and liabilities extending to past and future debts and liabilities whether certain or

contingent. In Re Hide; ex parte Llynvi Coal and Iron Company (1871–2) LR 7 Ch App 28 Sir James LJ said at 31–2: Then came the Act of Parliament, which — dealing in express terms with almost every one of the cases which had ever previously occurred, and excluding nothing but demands for damages for personal torts — provided that there should be nothing whatever for which a right to proof should not be given. Every possible demand, every possible claim, every possible liability, except for personal torts, is to be the subject of proof in bankruptcy, and to be ascertained either by the court itself or with the aid of a jury. The broad purview of this Act is, that the bankrupt is to be a freed man — freed not only from debts, but from contracts, liabilities, engagements, and contingencies of every kind. On the other hand, all the persons from whose claims, and from liability to whom he is so freed are to come in with the other creditors and share in the distribution of the assets. The difficulty is that such liability actually arises after the bankruptcy proceedings. The respondent argued that this fact made it analogous to compensation under ss 82 and 87 of the then Trade Practices Act 1974 (Cth) in respect of which it was held in Australian Competition and Consumer Commission v Black on White Pty Ltd (2004) 138 FCR 314; ATPR 41-997; [2004] FCA 363; BC200401576 and Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; 241 ALR 32; [2007] HCA 56; BC200710620. That in turn was similar to the liability under s 588FGA of the Corporations Act 2001: see Ansett Australia Ltd v Travel Software Solutions Pty Ltd (2007) 214 FLR 203; 65 ACSR 47; [2007] VSC 326; BC200708017. Pagone J concluded that the application failed on procedural grounds at [21]. [81,650.1.5] Reform of Corporations Law Readers concerned with the matters raised by the Attorney-General in the Corporate Law Reform Bill 1992 in relation to s 553 of the Corporations Law should refer to Environmental & Earth Sciences Pty Limited v Vouris (2006) 152 FCR 510; 230 ALR 119; [2006] FCA 679; BC200603868 in so far as it raises matters concerned with the interpretation of s 81(2). [81,650.2] Tort or contract In Sinclair v Brougham [1914] AC 398 at 415, Viscount Haldane LC said: All analogies drawn from other systems, such as that of the Roman Law, appear to me to be qualified in their application by two considerations. The first is that, broadly speaking, so far as proceedings in personam are concerned, the common law of England really recognises (unlike the Roman Law) only actions of two classes, those founded on contract and those founded on tort. When it speaks of actions arising quasi ex contractu, it refers merely to a class of action in theory based on a contract which is imputed to the defendant by a fiction of law. The fiction can only be set up with effect if such a contract would be valid if it really existed. After quoting this passage in Durra v Bank of New South Wales [1940] VLR 170 at 173, O’Bryan J went on at 175: All the judgments proceed upon the basis that an action for money had and received will not lie where it is impossible to impute a promise to pay in the circumstances because the fictional contract would itself be invalid. In other words it is not merely a matter of legal history that the action for money had and received arose out of assumpsit, but it is still today based upon the theory of a promise imputed to the defendant to pay. The question that O’Bryan J had to decide was whether or not there had been an alleged breach of contract within Victoria for the purpose of the Supreme Court Rules relating to service out of the state, and it was held that an obligation to pay money in Victoria, based upon imputed contract and giving rise to an action for money had and received, came within the rule.

[page 349] The modern law of restitution and quasi-contract has developed significantly in recent years, and it may not be correct to characterise all restitutionary claims being founded upon an imputed or implied contract; see Goff, The Law of Restitution (3rd ed) Sweet and Maxwell 1986 pp 3–16 and 605–23; especially at p 619: “If, however, the claimant waives his tort, he can prove in the tortfeasor’s bankruptcy for any liquidated sum received by the tortfeasor”. Another way of putting the proposition of Viscount Haldane is this: “Action of assumpsit lies where a party claims damages for breach of a simple contract, ie promise not under seal. Such promises may be express or implied, and the law always implies a promise to do that which a party is legally liable to perform”; extracted from Stephen on Pleading (7th edition) at p 11 and cited with approval by Adam J in Victoria v Hansen [1960] VR 582. Statutory obligations held to give rise to an implied contract include obligations to pay rates, taxes and stamp duty, although it might be said that the unusual case of Gerson v Simpson [1903] 2 KB 197 expands this field considerably. There, the defendant was sued for damages on account of a fraudulent misrepresentation in a prospectus and pursuant to a particular statutory provision he claimed contribution by third-party notice which he sought leave to serve out of the jurisdiction. At 200 of the report Lord Halsbury LC said that Parliament had provided that in such a case the ordinary rule that there should not be contribution between tortfeasors should not apply, but the rights of the parties should be treated “as though it were a question of contract, and not of tort.” This observation really demonstrates that the claim for contribution was an action founded in tort, as it were, “deemed” for the purposes of the case under consideration to be equivalent to a claim in contract (that is to say for the purpose of obtaining leave to serve out of the jurisdiction); so it must follow that Lord Halsbury considered that the proper characterisation of this statute-based claim is as a claim in tort. In Gilchrist v Dean [1960] VR 266 at 270–1; (1960) 2 FLR 175 (another application for leave to serve out of the jurisdiction a third-party notice in a motor car collision case), Sholl J was critical of Gerson v Simpson, above. Sholl J said: There are, however reported cases in which a statutory liability to pay money to another person has been held to arise in “contract” within the meaning of s 11(b) or (c) of the Commonwealth Service and Execution of Process Act. [His Honour then referred to cases relating to claims for rates, taxes and stamp duty which, he said, were] based upon old authorities which established clearly enough that an action, generally of debt, but sometimes in assumpsit, would lie for liquidated sums payable under statute … The rule came to be stated more widely, namely as a rule that “wherever an act of Parliament creates a duty or obligation to pay money, an action will lie for its recovery unless the act contains some provision to the contrary” … But originally the action, if for a liquidated sum, was usually one of debt, and a liability arising upon a statute, at any rate fora liquidated sum, was considered for the purposes of the statutes of limitation to be equivalent to a debt upon a specialty … When the Common Law Procedure Act 1852 abolished the need for specifying in the writ the form of action adopted, the question whether the proper form of action was debt or assumpsit or something else became unimportant … but the liability upon a statute was often spoken of as savoring of the nature of implied contract … The right to contribution now given by statute as between tortfeasors does not appear to me to resemble in any close way the types of actions upon statutes referred to in the authorities above cited, Rather it appears to resemble in some ways, though not in all, the equitable right to contribution between trustees guilty of a breach of trust … The proceedings to enforce the right to contribution between tortfeasors resemble, especially in the form which they take when instituted by third-party notice, the equitable procedure by bill quia timet … The right to contribution between co-sureties “is bottomed and fixed on general principles of justice, and does not spring from contract, though contract may qualify it — Dering v Earl of Winchelsea (1787) … but, furthermore, while even in

the case of co-trustees, the right is to equality of burden, yet in the case of tortfeasors, on the other hand, the statutory right is merely to such an apportionment as the adjudicating tribunal shall think just and equitable having regard to the extent of … responsibility for the damage … In truth, the right given by statute to obtain contribution is a ‘very special kind of action’, like the statutory right given to an employer who has paid workers’ compensation to obtain indemnity from a third party …” [page 350] His Honour went on (VR at 272): I am unable therefore to see that, even upon a reading of (former O 11 r 1(g) of the Victorian Supreme Court Rules) which pays the fullest regard to the History of Common Law procedure generally, and forms of action in particular, and which allows to the word “contract” a correspondingly wide connotation, the Court could possibly hold that these proceedings for contribution between tortfeasors, instituted by third-party notice in a running-down case, are “founded on any breach within the jurisdiction of any contract wherever made which according to the terms thereof ought to be performed within the jurisdiction”. The claim certainly does not depend on express contract. In my opinion, it does not depend on any implication of contract resting upon any analogy to be applied or fiction to be imported either on historical grounds or by reason of express enactment, and no authority goes so far as to oblige me to hold to the contrary of my own opinion. There appears to be nothing inconsistent with this conclusion in the case of Durra v Bank of New South Wales, above or in any of the cases which are there referred to upon the subject of imputed or implied contracts falling within Order 11 Rule 1(e). In categorising as either founded in tort or founded in contract a claim based on the particular provisions of a statute, one must be careful to distill the true nature of the claim from a proper construction of the statutory expression of the remedy. It is submitted that in Baldry v Jackson [1977] 1 NSWLR 494, Allen M (who did not cite Re W A Brown & Sons Pty Ltd [1964–65] NSWR 575 unduly emphasised the tortious nature of the claim by one motor car driver against another when concerned with one of those driver’s statutory claim to contribution from a third party. Indeed, because such statutory claims follow from quantification of “unliquidated damages” by judgment in proceedings between tortfeasors, they are said to lack that familiar hallmark of tort; see Borg Warner v Zupan [1982] VR 437; (1981) 69 FLR 300. In Ryder v Hartford Insurance Co [1977] VR 257, Jenkinson J (whose final conclusion might have to be regarded as having been doubted by at least Marks J in the Victorian Full Court decision of Borg Warner v Zupan [1982] VR 437; (1981) 69 FLR 300) held that the South Australian provision conferring a right of indemnity against the insurer of a deceased motor car driver was founded in tort (and therefore no claim under that provision could be justiciable in Victoria). His Honour distinguished that provision from the New South Wales equivalent (which had earlier been held to be founded in contract) as follows: The etiolation of delictual colour in (NSW section) derives, in my opinion, not only from merger of the tortious liability in a judgment or from extinction of the tortious cause of action by payment of a claim, satisfaction of either of which gives rise to the cause of action created by the subsection, but also from the use in the sub-section of the phrase “as a debt”. Neither of those considerations obtains in respect of (SA section). Of considerable significance for purposes of characterization, in my opinion, is the circumstance that there are included in the essential ingredients of the cause of action constituted by (SA section) all but one of the essential ingredients of the cause of action in tort for damages for

negligently causing personal injury. The omitted ingredient is the fact that it was the defendant whose negligent act caused the injury. In lieu of that ingredient (SA section) substitutes a different ingredient: the fact that the person whose negligent act caused the personal injury was an “insured person” within the meaning attributed to that phrase for the purposes of Part IV of the (SA) Act. In Philip Morris Ltd v Ainley [1975] VR 345 Menhennitt J approved a concession on behalf of the Incorporated Nominal Defendant that a workers’ compensation insurer’s right to statutory indemnity was not founded in contract and held that it was not founded in tort. Thus, the successful plaintiff did not suffer the reduction of costs prescribed by the relevant Supreme Court rule in respect of small claims, because his action was not “of contract or of tort”. [81,650.2.3] Costs orders s 81(2) The High Court has settled the question as to when costs orders may be proved as debt under the section. Previously, Re British Gold Fields of West Africa [1899] 2 Ch 7 was applied to deal with such matters. In Foots v Southern Cross Mine Management Pty Ltd (2007) 241 ALR 32; [2007] HCA 56; BC200710620 the court considered an application by [page 351] a bankrupt debtor to bring a claim against himself. If an order was made it would require the leave of the court to proceed: at [3]. Re British Gold Fields, above, was cited in support of the proposition that a costs order could be a debt or liability under s 82(1) (see at [16]), on the basis that such costs though incurred after bankruptcy were an “incident” or “attached to” a debt: at [19]–[20]. The High Court applied the principle stated by Lord Eldon LC in Ex parte Hill (1804) 11 Ves 646; 32 ER 1239 in which his Lordship observed: I apprehend, he held that, not upon any such ground of distinction as that the costs in Equity are in the discretion of the Court, but, considering an Order of this Court analogous to a proceeding at Law, that the costs could not be proved, unless ascertained by taxation; and he seems to approve the Law, as laid down by Lord Henley in Ex parte Todd. The High Court concluded at [65]: [65] If the distraction of British Gold Fields is resisted when construing the text of the Bankruptcy Act, and the nature of a costs order is appreciated, several difficulties lie in the path of the admission to proof of the costs order made against Mr Foots. First, the order made falls outside s 82(1) because it was made after bankruptcy, and was thus not a liability “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” (emphasis added). Secondly, as explained earlier in these reasons, Mr Foots was under no antecedent obligation to pay costs until the order was made against him. Thirdly, there is no scope in the text or structure of the Bankruptcy Act for the notion of an obligation or liability “incidental” to a provable debt. The necessary corollary of the appellant’s argument is the admission that such an obligation is not itself a provable debt, but is only “incidental” to one. If such an obligation is not a provable debt, when then should it be admitted to proof? Dressing the notion in the language of “incidence” does not alter matters: rather, it is apt to disguise the text of the Bankruptcy Act. In Spencer v GMG Legal Services Pty Ltd [2013] SASC 19; BC201309025 an application for leave to appeal by undischarged bankrupts was lodged. The application was lodged on the ground that this status did not deprive them of standing to appeal, because the claim for adjudication of costs was not in respect of a provable debt (within the meaning of s 82 of the Bankruptcy Act 1966 (Cth)). The

application was considered, but refused by Stanley J on the ground that a necessary party had not been joined. [81,650.2.5] Liability — s 82(2)–(8) In Kenny v Carkeek [2007] FMCA 510; BC200702664 it was argued before McInnes FM that, in the course of an argument for declarations under s 185T(2)(b) of the statute, a debt did not exist as such because, inter alia, the applicant was not shown as a creditor. And that, therefore, the notice was deficient in a material particular pursuant to s 185T(2)(b) of the statute. The Federal Magistrate took the view, at [68], that a debt was properly defined by the two subsections in the heading because “it is properly to be regarded as a debt or liability, present or future, certain or contingent”. As for the omission by the respondent: [70] … the question for the court to consider is whether that failure could properly be regarded as omitting “a material particular”. It does not seem to me that it could properly be characterised as “incorrect in a material particular”. And: [71] … I am not satisfied that the Statement of Affairs therefore could be found to be deficient by omitting a material particular namely an outstanding unspecified claim of the Applicant which prior to the date of the Debt Agreement had only been the subject of oral demands without particulars and referred to only in pleadings before the pending Magistrates Court proceedings. [81,650.3] Cost of proof Section 100 provides that a creditor shall pay his or her own costs of proof unless the court makes a special order to the contrary. [page 352] [81,650.5] Contingent liability — s 82(1) In Re Thiess Infraco (Swanston) Pty Ltd (2004) 209 ALR 694; 50 ACSR 434; [2004] FCA 1155; BC200405871 Finkelstein J traced the development of contingent debts or contingent claims from Ex parte Groome (1744) 1 Atk 115 via s 553 of the Corporations Act 2001 from its beginning in bankruptcy law. He summarised at [9]: [9] Since 1869 it has never been doubted that if at the date of bankruptcy the bankrupt was bound by an executory contract the creditor could prove as a contingent creditor for any losses that he might suffer from a past or future breach of that contract. This accords with the evident purpose of bankruptcy which is to permit all creditors to share in the distribution of the assets of the bankrupt and to leave the debtor thereafter free from the liability of previous obligations. As Lord Halsbury observed in Hardy v Fothergill (1888) LR 13 AC 351, 355: “[T]he legislature has been engaged in the effort to exhaust every conceivable possibility of liability under which a bankrupt might be, to make it provable in bankruptcy against his estate and relieve the bankrupt for the future from any liability in respect thereof.” It would be most unfortunate if persons entitled to the performance of executory agreements on the part of bankrupts were excluded from participation from bankrupt estates and the bankrupts themselves as a necessary corollary were left still subject to action for non-performance in the future although without the property or credit often necessary to enable them to perform those obligations. The categories of claims which are admissible should be as wide as possible so that the financial affairs of the bankrupt are dealt with comprehensively. His Honour referred to the decision of the Full Federal Court in Lam Soon Australia Pty Ltd (admin apptd) v Molit (No 55) Pty Ltd (1996) 70 FCR 34; 22 ACSR 169. It suggested that, a right to sue for damages for a future breach of a contract when looked at before the breach is not a contingent claim; it is a mere expectancy and therefore not provable. His Honour said at [16]: “I do not propose to apply

that dictum. It is contrary to both the purpose of the legislation and authority.” Edmonds J applied this concept in Council of the New South Wales Bar Association v Eddy [2006] FCA 254; BC200601458. See [80,970.25]. Mr Registrar Kingsley of the District Court of WA has observed in Ikon Management Pty Ltd v Hladin [2009] WADC 119 that there is no statutory definition of “contingent liabilities”. The court was dealing with an application by a defendant to have a means inquiry under s 119(1) of the Sentencing Act 1995 (WA) stayed as an abuse of process on the basis that the obligation giving rise to the compensation order falls within s 82 of the Bankruptcy Act as a provable debt. Relying on Lyford v Carey (1985) 3 ACLC 515, Corporate Affairs Commission (SA) v Karounos (1984) 9 ACLR 405 and Gaffney v Federal Cmr of Taxation (1998) 81 FCR 574; 98 ATC 4659; 38 ATR 594; BC9800916, it was submitted that the compensation order is a contingent debt provable by a creditor under s 82(1) of the Bankruptcy Act. It was further submitted that due to the bankruptcy, it may not now be pursued against him pursuant to s 58(3) of the Bankruptcy Act. Section 58(3) provides that after a debtor has become bankrupt it is not competent for a creditor to enforce any remedy against the person or property of the bankrupt in respect of a provable debt. The Registrar held that s 82 refers to contingent liabilities to which a bankrupt was subject at the date of bankruptcy by reason of an obligation incurred before the date of bankruptcy. The phrase “contingent liabilities” is not defined in the Bankruptcy Act. In Lofthouse v Cmr of Taxation (2001) 164 FLR 106; (2002) 20 ACLC 47; (2001) 48 ATR 63; [2001] VSC 326; BC200105493, Warren J considered the expression of contingent liability (from [23]). At [27] Warren J cited Franklin J in Lyford v Carey (1985) 3 ACLC 515 that the expression contingent liabilities imports the necessity that there be an existing obligation at the date of bankruptcy, an obligation (which may itself as its performance be suspended by the conditions of the contingency), out of which a liability to pay money will arise on the happening of the contingency. At [31] Warren J quoted from Tadgell J in Federal Commissioner of Taxation v Gosstray [1986] VR 876 at 879: The notion that a contingent debt must be founded on an existing obligation is strengthened when it is realised that a monetary claim for it, if made the subject of a proof, is to be stated as on the date of the bankruptcy … If when the proof is lodged the contingency has not happened, the amount of the claim must be estimated as accurately as possible … If, however, a claim were made not founded on an obligation of the bankrupt existing at the date of bankruptcy which [page 353] could ripen into a debt upon a contingency, the proper conclusion, in my view, would be not that the provable claim should be assessed at nil but that there was no claim on the bankrupt estate at all. Contrary to the submissions, the Registrar was of the view that the compensation order, imposed at the date of conviction and in circumstances that existed at the date of bankruptcy was not a contingent liability. The Registrar commented (at [17]): The term obligation in s 82 Bankruptcy Act cannot be properly used to describe what is no more than an vulnerability to a criminal prosecution and conviction, which might, in turn, give rise to a compensation order. Decisions need to be made to prosecute Hladin, for a conviction to be entered and upon conviction the Court exercising its discretion to make a compensation order. In my opinion these facts point to the conclusion that there was no obligation by Hladin before the date of bankruptcy. This is consistent with the view of Franklin J in Lyford v Carey (above) and Corporate Affairs Commission (SA) v Karounos (above).

The above cases were mostly applied in Ikon Management Pty v Hladin (2009) 58 SR (WA) 182; [2009] WADC 119; BC200940272 where a consistent principle was adopted by the Registrar at [14]: [14] Section 82 Bankruptcy Act provides that 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 bankruptcy, are provable in his or her bankruptcy. Section 82 refers to contingent liabilities to which a bankrupt was subject at the date of bankruptcy by reason of an obligation incurred before the date of bankruptcy. Contingent liabilities are not defined in the Bankruptcy Act. In Lofthouse v Commissioner of Taxation (2001) 164 FLR 106 from para 23 Warren J considered the expression of contingent liability. At [27] Warren J cited Franklyn J in Lyford v Carey (supra) that the expression contingent liabilities imports the necessity that there be an existing obligation at the date of bankruptcy, an obligation (which may itself as its performance be suspended by the conditions of the contingency), out of which a liability to pay money will arise on the happening of the contingency. [81,650.6] “penalties” — s 82(3) Criminal offences In Re Higgins; Ex parte Higgins (1984) 4 FCR 533 (Higgins), Spender J held that an award of costs in proceedings for a penalty or fine for an offence against a law was a component part of the total sum which bears a punitive character, and should be characterised as a penalty for the purposes of s 82(3) of the Act. Consequently, neither the fines imposed, nor the costs ordered to be paid, were provable in the bankruptcy. That decision was followed and applied by Farrell JR in Marshall v Western Australia (1998) 84 FCR 363; BC9803283. In Moore-McQuillan v Scott (2006) 149 FCR 486; [2006] FCA 63; BC200600972 (MooreMcQuillan), Mansfield J held that because the statute excludes the liabilities prescribed by s 82(3) it was necessary to examine the earlier legislation and to distinguish Higgins. Under Re Bradbury; Ex parte R (1931) 3 ABC 204, it was held that a penalty for a criminal offence was not a provable debt. In that case the relevant liability comprised a fine imposed for certain offences under the Game Act 1928 (Vic) and the costs ordered to be paid. In Moore-McQuillan his Honour said at [16]: [16] … In essence, the liability was found not to be a provable debt because it was in the nature of a punishment. The question was, however, addressed in a somewhat different context in Re Caddies; Ex parte Stapleton (1962) 19 ABC 155 (Caddies). The bankrupt, before his bankruptcy, had been convicted of false pretences, fined, and ordered to make restitution within three months, with a term of imprisonment in default of payment. Before the three month period had expired, he became bankrupt. He was, however, then arrested for non-payment of the fine and restitution, although the bankrupt by then had made some part payment which well exceeded [page 354] the amount of the fine itself. Gibbs J at 158 held that the order of the police court was of a punitive character, in particular as the magistrate had a discretion whether to make a restitution order, and whether to order a term of imprisonment in default of compliance with it. Once the characterisation of the order as being “something in the nature of punishment” was made, it was not an order in the nature of legal process to procure payment. The Court concluded that there was no power under the Bankruptcy Act 1924–1960 (Cth) to discharge the order upon which the bankrupt had been imprisoned. See also Commissioner for Motor Transport (NSW) v Train (1972) 127 CLR 396; Re Hollis (1968) 15 FLR 386. In Chief Executive Officer of the Australian Customs Service v Karam (No 2) [2013] NSWSC 33; BC201300391 McCallum J at [67]–[68] held that there was no doubt the customs penalties were caught

by s 82(3): “I think I am bound to approach my task on the premise that the appropriateness and proportionality of the prescribed minimum penalties to the gravity of the offence has been determined by Parliament, and binds me.” His Honour held that the power to stay under s 60(1) (see [81,250.10]) now operated to resolve this uncertainty and had been exercised in such cases as Re Lenske; Ex parte Lenske (1986) 9 FCR 532; 64 ALR 135. At [19] of his Honour’s judgment in Moore-McQuillan. [19] … His Honour preferred the “non-punitive” characterisation of the restitution order to the views of Gibbs J in Caddies, partly in reliance upon the Queensland Court of Criminal Appeal in R v Civoniceva; Ex parte Attorney-General [1983] 2 Qd R 633 at 634-635; 13 A Crim R 313. Hence, his Honour was able to (and did) exercise the discretionary power in s 60(1)(b) of the Act. His Honour referred to a number of other cases noted at [81,250.10]. The point of distinction was that costs of prosecution did have the character, described in Higgins of being “components of a total sum which has a punitive character in that non-payment of which is visited by imprisonment” (see Moore-McQuillan at [22]–[23]) but were pecuniary penalties recovered for the benefit of a statutory authority rather than a victim of crime and hence the power was a compensatory provision. He was prepared, in the court’s discretion, to exercise the power to stay under s 60(1)(b). In Real Estate & Business Agents Supervisory Board (REBA) v Low (No 2) [2009] FMCA 142; BC200901172, Lucev FM decided that a penalty or fine imposed for disciplinary proceedings does not involve punishment for an offence (see at [11]): The court therefore concludes penalties and fines imposed in disciplinary proceedings do not fall within the ordinary meaning of the word ‘offence’, and their exclusion from the application of s 82(3) of the Bankruptcy Act is consistent with the policy of the Bankruptcy Act. The court accepts that the costs component of the SAT Orders is compensatory in nature, rather than in the form of a penalty. Therefore, an application under the sub-section might be dealt with and did not constitute a “formal defect of irregularity”. [81,650.7] s 82(2) and Coventry v Charter Pacific Corp Ltd In Coventry v Charter Pacific Corp Ltd (2005) 222 ALR 202; 80 ALJR 132; [2005] HCA 67; BC200509687 (Coventry) the question was whether the respondent’s claim for unliquidated damages arose other than by reason of contract, promise or breach of trust. The principal judgment of the High Court was given by Gleeson CJ, Gummow, Hayne and Callinan JJ. The principle being considered was that a statutory claim for unliquidated damages for misleading or deceptive conduct which induced the claimant to make a contract not with the bankrupt but with a third party is not a debt provable in bankruptcy. It is a demand in the nature of unliquidated damages arising otherwise than by reason of a contract or promise. The bankrupt is not discharged from liability. The claim may be pursued by the claimant during the bankruptcy and after discharge from bankruptcy. By contrast, a claim for unliquidated damages for misleading or deceptive conduct by the bankrupt, which induced the claimant to make a contract with the bankrupt, would be a debt provable in bankruptcy. [page 355] Earlier, the Court of Appeal, following the decision of the Court of Appeal of Victoria in Aliferis v Kyriacou (2000) 1 VR 447; 179 ALR 477; [2000] VSCA 123; BC200004114, concluded that a claim arises by reason of a contract or promise only if a contract or promise is an essential element of the

cause of action. Here, although Charter Pacific suffered the damage it claimed because it had performed its obligations under the deed (or its subsequent agreement to make further advances), the Court of Appeal held that a contract or promise was not an essential element of Charter Pacific’s claim. Rather, the claim for damages for misleading or deceptive conduct was held to be founded upon conduct anterior to, and separate from, the making of the deed or subsequent agreement for further advances. The court noted in Coventry at [22] that the origins of the subsection could be found in imperial and colonial legislation and, at [23], that: [23] The development of bankruptcy legislation in the United Kingdom, especially during the nineteenth century, reflected the shifting accommodation made from time to time between a number of competing considerations. What debtors could take advantage of the legislation? Was it to be available only to traders or to debtors more generally? Was there to be official control of the bankrupt’s estate or were creditors to have control? What kinds of debt were to fall within the legislation? What was to be done about contingent obligations or unliquidated claims … Future examination of the statutory history and the history of set-off in bankruptcy will look to the court’s exhaustive and learned analysis. After this intriguing exercise the judgment summarised their conclusion, at [34]: [34] For present purposes, what is important to notice is that the set-off provisions found in both Acts are engaged where there have been mutual dealings between the bankrupt and another person proving or claiming to prove a debt in the bankruptcy. The set-off cases therefore cast light upon what debts are provable in bankruptcy. And what an examination of the nineteenth century cases will reveal is that the set-off provisions were used to extend the reach of debts provable in bankruptcy by giving to the expression “demand in the nature of unliquidated damages arising … by reason of a contract or promise” a more ample operation than the words might at first have been thought to suggest. The court then proceded to examine the conclusions of the leading cases, concluding, at [48]: [48] … For present purposes, it is enough to recognise two points that emerge from the nineteenth century cases. First, Jack v Kipping is taken to have established that a claim for damages for fraudulent misrepresentation, where the claim is made by one party to a contract against another, is a demand for unliquidated damages arising by reason of a contract or promise. But the second and related point, made in Re Giles, is that a claim for damages for fraudulent misrepresentation which has induced the claimant to make a contract with a third party is not a demand arising by reason of a contract or promise. The court then asked itself an important rhetorical question, at [50]: [50] … Why should this understanding of s 31 of the 1869 English Act be carried over to the construction of s 82(2) of the Bankruptcy Act 1966? Again, there are two related reasons. First, the text of s 82, like its legislative ancestors, shows that not all claims are provable in bankruptcy. Some content must therefore be given to s 82(2) and its reference to demands “arising otherwise than by reason of a contract, promise or breach of trust”. Secondly, any amplification or extension of the content to be given to s 82(2), beyond the immediate operation conveyed by reference to demands arising by reason of a contract or promise, is to be fixed by reference to the operation of other provisions of the statute, and particularly the set-off provisions of s 86. A claim which may be made in answer to a claim which the bankrupt estate makes for damages for breach of a contract between bankrupt and claimant may be provable. That answering claim may be provable because it arises out of the mutual dealing or bilateral relationship of contract between bankrupt and claimant. By contrast, a claim which comes from

[page 356] a tripartite transaction, in which the bankrupt’s misrepresentation induced the claimant to make a contract with a third party, does not arise from a mutual dealing and it arises otherwise than by reason of a contract or promise. The court considered that the importance of the construction imposed by the legal history was the mutuality of the respective claims. See [59]. The claim in the instant case failed to satisfy. Therefore there was no basis to conclude that the instant claims fell outside of the exceptional class of s 82(2) as not provable in bankruptcy. See [61]. The courts then said at [68] of Aliferis v Kyriacou (2000) 1 VR 447; 179 ALR 477; [2000] VSCA 123; BC200004114 that the test stated in that case: [68] … does not give any weight to the need to read s 82(2) in the light provided by the set-off provisions of s 86. It is a test which does not distinguish between bilateral and tripartite cases. It treats as the critical question whether the claimant must plead the existence of a contract, any contract. It treats as irrelevant whether the bankrupt was a party to the contract. The judgment of Kirby J should not be neglected. It too, will provide much inspiration to scholars of the section, its interpretation, its legal history and its policy. See [118]–[119]. His conclusion, at [142], should not be overlooked when the legislative provisions are next examined: [142] Rather than endeavouring to find a solution to the problem presented by s 82(2) of the Bankruptcy Act (almost certainly unintended by the drafters), relying on the highly specific provisions governing the particular matter of set-off in s 86 of the Act, (as favoured in the joint reasons) my own preference would be to return to the substance of the law as it was uniformly applied in Canada and New Zealand before their legislative reforms. So long as s 82(2) of the Bankruptcy Act is unreformed, there is a clear need for a simple, practical, efficient and readily ascertainable test to decide whether a demand in the nature of unliquidated damages arises “by reason of a contract [or] promise” or otherwise. Johnson J of the NSW Supreme Court considered Coventry in Skalkos v Smiles [2006] NSWSC 192; BC200602024 (Skalkos). The First Defendant relied on [50] of the reasons in Coventry to a similar conclusion on the facts. His Honour considered that the matter related to the interpretation of “fraud” in the judgment of Gummow, Hayne and Heydon JJ in Banditt v R (2005) 223 ALR 633; 80 ALJR 421; [2005] HCA 80; BC200510778 at [2] (cited as SGB v R (2005) HCA 80 in his Honour’s reasons), and as a result, his Honour concluded that the claims made were not demonstrated to the rigourous degree required by s 153(2)(b) of the statute, to fall outside of the permitted ambit. As to this see [82,275.10]. McKerracher J has considered the above case in Lovell v Penkin (2008) 101 ALD 335; [2008] FCA 637; BC200803244. Leave was sought to institute proceedings against a solicitor, who was said to be guilty of professional negligence. The Official Trustee contended that the right to recover an indemnity under s 117 was not a proper basis on which to determine the issues arising in this application as there is nothing before the court about the extent of the insurance held by the solicitor. It was argued that there was nothing to say that the insurer had agreed to indemnify the solicitor on the basis of the terms in the policy of insurance. In that case, the burden would fall on the bankrupt estate. Second, the Official Trustee contended that if a claim for negligence against a legal practitioner were found to be provable in all cases, it is conceivable that an insurer may review its position in relation to bankrupt practitioners, knowing that a claim of negligence may be met from the proceeds of the practitioner’s estate and/or discharged by the bankruptcy. His Honour had reservations about this aspect of the matter and granted leave on conditional terms which required the giving of notice to the Official Trustee. The judge decided that the objections of the Official Trustee could be met by conditioning the order so as to require the plaintiff to give notice to the Official Trustee of any proceedings that he took

against the solicitor. McKerracher J summarised the law as follows at [31]: [31] Although the High Court overruled the “essential element” test relied upon in Aliferis, there remains some uncertainty at present as to whether the words in s 82(2) of the Act “by reason of the contract, promise or breach of trust” dictate that a direct claim in negligence only — not in [page 357] contract — by one client against his or her solicitor, is provable. That outcome may be “anomalous” as the High Court accepted its conclusion was as to the proper construction of s 82(2) in Coventry. But the emphasis in Coventry on the narrow basis of exceptions to provable claims may well support the conclusion that such a claim is provable. Further, if there is insurance cover — and there has been no suggestion to the contrary — then the effect of s 117 of the Act is now that the benefit of that cover would still be received by the claimant rather than the estate as a whole. A claim of a different nature — under s 52 of the Trade Practices Act 1974 (Cth) (now s 18 of the Australian Consumer Law), is likewise inhibited under the same principles: See Hoop & Javelin Holdings Ltd v BT Projects Pty Ltd (In liq) (No 3) [2010] FCA 191; BC201001121 at [14]. [81,650.10] Demands In deciding whether or not liability is provable in bankruptcy, it is the nature, not the expression of the demand that is relevant: Cornelius v Barewa Oil & Mining (NL) (in liq) (1982) 42 ALR 83. [81,650.15] Lodging a proof of debt When lodging a proof of debt, the amount to be specified therein is the present balance of the debt. This is despite the reference in s 82(1) to a provable debt as being that to which a bankrupt was subject at the date of the bankruptcy: Re Hunter; Ex parte Bank of NSW (1979) 38 FLR 354, following Re Blakeley (1854) 4 De GM & G 881; 43 ER 752. [81,650.20] Claim for damages for conspiracy A claim for damages for conspiracy is not a debt provable in bankruptcy: Barewa Oil & Mining NL (in liq) v Isim Mineral Development Pty Ltd (1981) 38 ALR 288. [81,650.25] Claims arising from breach of fiduciary duty The authorities suggest that a claim for breach of fiduciary duty is a claim arising out of contract or analogous to contract and that it is provable in bankruptcy: Emma Silver Mining Co v Grant (1880) 17 Ch D 122 at 130 per Jessel MR; Re Macfadyen; Ex parte Vizianagaram Mining Co Ltd [1908] 2 KB 817 at 822 per Farwell LJ; Barewa Oil & Mining NL (in liq) v Isim Mineral Development Pty Ltd (1981) 38 ALR 288. Judge Smith, in Comfit Farm Produce Pty Ltd v Valamiou [2009] SADC 19, has defined the nature of a fiduciary duty, and particularly considered the term as it concerns a solicitor. He held (at [148]): [148] A breach of fiduciary duty is not to be confused with a breach of a common law or equitable duty albeit by a fiduciary. In Bristol & West Building Society v Mothew Millett LJ in the Court of Appeal said at 16 and 17 as follows: Despite the warning given by Fletcher Moulton LJ in Re Coomber [1911] 1 Ch 723, 728, this branch of the law has been bedevilled by unthinking resort to verbal formulae. It is therefore necessary to begin by defining one’s terms. The expression “fiduciary duty” is properly confined to those duties which are peculiar to fiduciaries and the breach of which attracts legal

consequences differing from those consequent upon the breach of other duties. Unless the expression is so limited it is lacking in practical utility. In this sense it is obvious that not every breach of duty by a fiduciary is a breach of fiduciary duty. I would endorse the observations of Southin J in Girardet v Crease & Co (1987) 11 BCLR (2d) 361, 362: The word ‘fiduciary’ is flung around now as if it applied to all breaches of duty by solicitors, directors of companies and so forth … That a lawyer can commit a breach of the special duty [of a fiduciary] … by entering into a contract with the client without full disclosure … and so forth is clear. But to say that simple carelessness in giving advice is such a breach is a perversion of words. These remarks were approved by La Forest J in LAC Minerals v International Corona Resources (1989) 16 IPR 27; 61 DLR (4th) 14 at 28; [1989] 2 SCR 574; (1989) 26 CPR (3d) 97 where he said: ‘not every legal claim arising out of a relationship with fiduciary incidents will give rise to a claim for breach of fiduciary duty.’ [page 358] It is similarly inappropriate to apply the expression to the obligation of a trustee or other fiduciary to use proper skill and care in the discharge of his duties. If it is confined to cases where the fiduciary nature of the duty has special legal consequences, then the fact that the source of the duty is to be found in equity rather than the common law does not make it a fiduciary duty. [81,650.33] Claims arising otherwise than by reason of breach of contract, promise or breach of trust In Tarea Management (Northshore) Pty Ltd (in liq) v Glass (1991) 28 FCR 93 it was held that liabilities that arose pursuant to a compensation order under s 229 of the Companies Code was a debt provable in bankruptcy. In that case the court ordered a permanent stay of enforcement of the order pursuant to s 60 of the Act the debtor having been discharged from bankruptcy prior to the making of the compensation order. [81,650.35] Set-off See s 86. [81,650.40] Rule against double proof Where there is more than one contract between the parties the creditor is entitled to one dividend only. [81,650.45] Interest By s 82(3B) a creditor is not entitled to prove for interest for any period commencing on or after the date of the bankruptcy, although, if there is a surplus left after payment of dividends, interest is payable at that stage. For consideration of principles applicable and review of authorities, see Re Ball; Ex parte Commercial Banking Co of Sydney Ltd (1980) 31 ALR 16. [81,650.50] Statute of Limitations Time stops running on the date of the sequestration order for the purpose of proving in the bankruptcy: Re Benzon; Bower v Chetwynd [1914] 2 Ch 68. [81,650.55] Judgment debts The trustee is entitled and obliged to go behind a judgment to satisfy himself or herself that there is in fact a real debt due and owing: Wren v Mahony (1972) 126 CLR 212; [1972] ALR 307. [81,650.60] Sureties A surety for the whole of a debt is entitled to prove in the bankruptcy of the principal debtor only when the full amount of the debt has been paid, whereas where a surety has guaranteed the whole debt but limited to a sum the surety may prove when he or she pays that sum

regardless of whether the creditor has been paid in full: Re Sass; Ex parte National Provincial Bank of England (1896) 1 Ex D 157: Duncan Fox & Co v North and South Wales Bank (1880) 6 App Cas 1; Dalgety Ltd v Commercial Bank of Australia Ltd [1981] 2 NSWLR 211. [81,650.65] Present or future, certain or contingent If at the date of bankruptcy a contingent debt is proved, subject to the contingency occurring it is necessary to estimate the present day value of the debt as accurately as possible. It is the amount of the estimate that is the amount proved: Ellis & Co’s Trustee v Dixon-Johnson [1924] 1 Ch 342. See s 82(4), (5) and (6). The estimate is considered final even if subsequent events prove it to be incorrect: Re Dodds; Ex parte Pritchard (1890) 25 QBD 529. [81,650.70] Insolvent trading claims Consideration of the nature of a claim under s 556 of the former Companies Code by a creditor of a company against a director of that company who caused or suffered the company to incur the debt to the creditor when the company was insolvent, illustrates the operation of s 82(2) of the Bankruptcy Act 1966. Note, however, the differences in wording between s 556 of the Code and superseded s 592 and current ss 588J and 588M of the Corporations Act. The latter provisions speak of “compensation” for “loss and damage”. In Official Trustee in Bankruptcy v CS & CJ Handby Pty Ltd (1989) 87 ALR 734, a Full Court of the Federal Court (Morling, Beaumont and Burchett JJ) held that, although such a claim was neither a claim founded in tort nor a claim founded in contract, it was not an unliquidated claim and it was not a claim for damages. Therefore, a claim against a bankrupt company director under s 556 is capable of proof in that person’s bankrupt estate. [page 359] See also CCA Systems Pty Ltd v Communications & Peripherals (Aust) Pty Ltd (1989) 15 ACLR 720; 7 ACLC 1080. In Corporate Affairs Commission (SA) v Karounos (1984) 9 ACLR 405, the Commissioner for Corporate Affairs sought an order that a company director pay a sum of money under s 374D of the former Companies Act, under which conviction of the director for an offence contrary to s 374C was a condition precedent (later, s 556 of the Companies Codes imposed “stand alone” civil liability to creditors of the company in certain circumstances as well as criminal liability). The existence at the date of bankruptcy of only a possibility of conviction would constitute, it is submitted, mere speculation and not a “contingency” (compare s 82(8)(c) of the Bankruptcy Act 1966 and Federal Commissioner of Taxation v Gosstray [1986] VR 876 and Thomas v DCT [1988] VR 133); so the consequent exclusion from proof of the s 374D claim would result from the speculative (as distinct from “contingent”) nature of the claim, not from the fact that the claim was non-contractual and unliquidated. In Corporate Affairs Commission (SA) v Karounos, above at 407, Prior J held that an “order made under s 374D certainly gives rise to a liability, but it is not a debt or liability to which the bankrupt was subject at the date of the bankruptcy” (compare s 82(1)). In 3M Australia Pty Ltd v Watt (1984) 2 ACLR 203; 2 ACLC 621 (on appeal Watt v 3M Australia Pty Ltd [1984] 3 NSWLR 671; (1984) 9 ACLR 324; 3 ACLC 324), the decision at first instance and on appeal turned entirely upon the conclusion of the court that s 556 liability was quite different from a director’s liability for breach of a fiduciary duty, a company creditor having been entitled to sue the director in the case of a s 556 claim. The regime under the present Corporations Law is quite different, the liquidator having the primary right to sue. The marginal note by which s 214 of the UK Insolvency Act 1986 is characterised is “wrongful

trading”, which accords with one’s “first impression” that the nature of the wrong (on the part of company directors) addressed by the statutory provisions is akin to deceit or contribution between trustees in breach of trust. The wording of ss 588J and 588M of the Corporations Act is consistent with the English development. [81,650.75] Penalties and fines Section 82(3) — see [81,250.10]. [81,650.77] Post Bankruptcy interest — s 84(3B) In Re Scott [2006] FCA 718; BC200604489, Mansfield J determined that after a surplus was found after the administration, that surplus could be directed to pay interest accrued post-bankruptcy by the creditors. His Honour said, at [8], that interest accruing on a debt post-bankruptcy is not itself a provable debt but that s 82(3B) of the Act reflected what was previously a rule of “justice and convenience”: He referred to the judgment of Dixon J in Mackenzie v Rees (1941) 65 CLR 1 at 8–11. He said (at [8]): [8] … In the case of a surplus after payment to the creditors from the bankrupt estate, Mackenzie v Rees (in the passage referred to) also lays down that, if admitted debts bore interest to the bankruptcy, the creditors are also entitled to participate in the surplus by way of interest accruing on them after the bankruptcy, and before the debtor may obtain the surplus. See also Midland Montagu Australia Ltd v Harkness (1994) 124 ALR 407; 35 NSWLR 150; 12 ACLC 819; BC9405177. McLelland CJ, at 164, in that case said the proposition is “overwhelmingly supported by the authorities”. [81,650.80] Procedure Appeal against estimate of value, s 82(5) — FCR O 77 r 40 requires an application in accordance with Form 5.

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[81,655] Debt not to be considered proved until admitted 83 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. [s 83 am Act 44 of 1996 s 3 and Sch 2]

[page 360] SECTION 83 GENERALLY [81,655.5] General Under s 102 of the Act, the trustee is required to examine each proof of debt. The grounds of the debts ought to be proved and the proof is thereafter admitted or rejected in whole or in part. If the proof is rejected, the creditor is informed in writing of the grounds of the rejection: s 102(2). Under s 31(h), applications to expunge a proof of debt or to reduce the amount of the admitted debt or to review a decision of the trustee in respect of a proof of debt, where the amount involved in the proof

exceeds $500 or such amount is prescribed, as heard by the court. Section 99 enables a creditor or the bankrupt to apply to the court for an order that a proof of debt be expunged, or that the amount of the admitted debt be reduced. A creditor who has proved is entitled to assign his or her debt and right to receive dividends. The trustee is authorised to pay a dividend only to a creditor who has proved or to somebody else on the written direction of that creditor. Mere production of an assignment does not entitle the assignee to receive payment. If the assignee has no written authority from the assignor, he or she must obtain an order from the court permitting the substitution of a new proof by him or her in lieu of the original proof by his or her assignor: Re Frost [1899] 2 QB 50; Re Iliff (1902) 18 TLR 819; Re Hills (1912) 107 LT 95; Re Barry (1930) 2 ABC 85; Re Blake (1933) 6 ABC 85; Re Gill; Ex parte Official Receiver (1964) 6 FLR 273. [81,655.7] Examination The registrar is obliged to consider if a person seeking to appear at an examination of a bankrupt pursuant to s 81 of the Act in circumstances where no proof of debt has been called for or decision made by the trustee is in fact a creditor, although it is not necessary for the court to determine the amount of the debt to allow the creditor to appear. See s 81(1)(a).

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[81,660] Manner of proving debts 84 (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. [subs (2) am Act 12 of 1980 s 43; Act 44 of 1996 s 3 and Sch 1]

(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. [subs (3) subst Act 12 of 1980 s 43; am Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (4) subst Act 44 of 1996 s 3 and Sch 1]

(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), [page 361] 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. [subs (5) insrt Act 12 of 1980 s 43; am Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001]

(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. [subs (6) insrt Act 12 of 1980 s 43] SECTION 84 GENERALLY [81,660.5] Form For the form for a proof of debt for the purposes of s 84(2)(b), see Approved Form 8. For the form of a proof of debt in respect of a debt due to employees, see s 85(2), r 37(2) and Form 16. [81,660.20] Offence See s 263 which makes it an offence to lodge a false proof of debt.

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[81,665] Proof by employees

85 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(2) The proof of debt in respect of the several debts shall be in accordance with the approved form. [subs (2) am Act 44 of 1996 s 3 and Sch 1]

(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. [subs (2A) insrt Act 12 of 1980 s 44; am Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (2B) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (2C) insrt Act 12 of 1980 s 44; am Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001]

[page 362]

(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. [subs (2D) insrt Act 12 of 1980 s 44]

(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. SECTION 85 GENERALLY [81,665.5] Forms For the form of proof of debt under this section, see Approved Form 8.

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[81,670] Mutual credit and set-off 86 (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 setoff 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. [subs (2) am Act 44 of 1996 s 3 and Sch 2] SECTION 86 GENERALLY [81,670.5] General The widest possible scope should be given to the interpretation of s 86 as the aim of the section is to protect people engaged in mutual dealings: Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (prov liq apptd) (1982) 150 CLR 85; 40 ALR 399.

[81,670.7] Payment which is void as a preference A payment which is void as a preference cannot be set-off: Re Clements; Ex parte Trustee; Goldsbrough Mort & Co Ltd (1931) 7 ABC 255. [81,670.10] Right of set-off under s 86 for contingent debts The protective provisions of s 86 will apply where, at the date of sequestration of the principal debtor’s estate, a surety has only a contingent liability for a debt. However once the surety has undertaken liability for the debt, whether it is before or after the date of sequestration of the bankrupt’s estate, grounds are made out for the surety to set off the debt against his or her liability to the principal debtor. The surety’s right to set-off is subject to the rule preventing the making of two claims in respect of the same debt: Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (prov liq apptd) (1982) 150 CLR 85; 40 ALR 399. [page 363] [81,670.15] Section 86 — a code “Section 86 is a code. There is no separately available defence of setoff arising in equity or under the statutes of set-off”: Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (1981) 34 ALR 595. [81,670.20] Mutual credits, mutual debts or other mutual dealings The word “mutual” conveys the notion of reciprocity rather than correspondence. It does not mean “identical” or “the same”. The concept means that the credits, the debts or the claims arising from other dealings must be between the same persons; the benefit or burden of them must lie in the same interests and the credits, debts or claims arising from other dealings must ultimately sound in money. However, the credits, the debts or the claims arising from other dealings need not be vested, liquidated or enforceable at the relevant time (the date of sequestration order or special resolution accepting the composition), provided they exist as contingent at the relevant time and are of a kind which will ultimately mature into pecuniary demands susceptible of set-off: Gye v McIntyre (1991) 171 CLR 609; 98 ALR 393. [81,670.25] Object of set-off The object of set-off in bankruptcy is to do substantial justice between the parties where a debt is really due from the bankrupt to the debtor of his or her estate. Where there are genuine mutual debts, credits or other dealings, it would be unjust if the trustee in bankruptcy could insist on having 100 cents in the dollar on the whole of the debt owed to the bankrupt, but at the same time insist that the bankrupt’s debtor must be satisfied with a dividend of some lesser amount in the dollar on the whole of the debt owed by the bankrupt to him or her. It was to prevent such injustice that the “mutual credit” and “mutual debts” (and later “mutual dealings”) provisions were introduced into bankruptcy legislation. To the extent necessary to achieve the legislative purpose of “substantial justice” to the parties, s 86 of the Act must be given the widest possible scope. However, this must be subject to limits which protect the debtors of the bankrupt from being disadvantaged by set-off being allowed in circumstances where debts, credits or other dealings have not been genuinely mutual as a matter of substance. Thus set-off under a provision such as s 86 is not available in circumstances where the beneficial entitlement and liability in respect of the countervailing credits and debts do not correspond: Hiley v Peoples Prudential Assurance Co Ltd (1938) 60 CLR 468. [81,670.30] Relevant date The requirement of mutual debts, credits, or other dealings is satisfied at the date of bankruptcy: Hiley v Peoples Prudential Assurance Co Ltd (1938) 60 CLR 468 at 480; Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (prov liq apptd) (1982) 150 CLR 85; 40 ALR 399. In this context the date of bankruptcy is to be understood as being the date of the actual making of the sequestration order: Re Daintree; Ex parte Mant [1900] 1 QB 546. [81,670.35] Operation of the section The section operates regardless of whether the result of a set-off

under the section would be that there was a balance against the person who has become bankrupt. In a case where there is a set-off under the section and sum due to the person who has become bankrupt exceeds the amount due from him or her, the section expressly provides that “only the balance of the account … is payable to the trustee”. In such a case it would be pointless for the other party to seek to prove as a debt in the bankruptcy the amount which was extinguished by the set-off under the section and which that section precluded from being claimed. [81,670.40] Dealings The word “dealings” is used in a non-technical sense in the section, being construed as referring to matters having a commercial or business flavour. It covers communications and negotiations, both verbal and written, and other relations which occur in a commercial or business setting. The word encompasses commercial transactions and the negotiations leading up to them. Thus, where a fraudulent misrepresentation is made in the course of such negotiations, the fraudulent misrepresentation is itself part of the relevant “dealings”: compare Re Mid-Kent Fruit Factory [1896] 1 Ch 567; Tilley v Bowman Ltd [1910] 1 KB 745. [81,670.45] Mutual dealings Dealings in which a creditor and a bankrupt have been involved before the making of a sequestration order and which give rise to mutual claims between them are [page 364] mutual dealings for the purposes of the section, notwithstanding that other parties may have been involved in the dealings, that either the creditor or the bankrupt may have been involved in the dealings in more than one capacity, or that those dealings also give rise to different claims between other parties or between the same parties and different beneficial interests: Gye v McIntyre (1991) 171 CLR 609; 98 ALR 393. [81,670.50] “person claiming to prove a debt in the bankruptcy” In Gye v McIntyre (1991) 171 CLR 609 at 621; 98 ALR 393 at 400 the High Court held that these words “should not be construed in the technical sense of referring only to a person who lodges a formal proof of debt”, but should be “construed as extending to a person who seeks to answer a claim brought against him by a trustee in bankruptcy by a set-off of a claim against a person who has become bankrupt which would have otherwise been provable in the bankruptcy”. The court held that the words should be understood as including a person who, but for set-off under the section, would be entitled to prove a debt in the bankruptcy. See also Peat v Jones (1881) 8 QBD 147; Mersey Steel and Iron Co v Naylor (1882) 9 QBD 648; Telsen Electric Co v Eastick [1936] 3 All ER 266; Mitchell v Purnell Motors Pty Ltd [1961] NSWR 165. [81,670.55] Preferable construction of s 86 in the case of sequestration Set-off between claims by and claims against a person who has become bankrupt is allowed only if the bankrupt estate is entitled to the benefit as well as being subjected to the burden of the respective claims. Thus the section should be construed as allowing a set-off in favour of the trustee in bankruptcy only in respect of a claim which vests in him or her under the bankruptcy. A mutual dealing extends to a case where a mortgagee sells a bankrupt’s real property without reasonable care to secure the best price reasonable obtainable. In Commonwealth Bank of Australia v Duggan [2003] ANZ ConvR 259; [2003] FCAFC 64; BC200301542 a Full Court consisting of Mansfield, Conti and Allsop JJ considered an appeal from Stone J. The judge at first instance found that the dealing concerned did not have the effect considered by the respondent, but considered that the proceeds of the sale had been applied inconsistently with s 58(3) of the Real Property Act 1900 (NSW) and as a consequence the mortgagee had to account for a sum: at [23] and [28]. As the Full Court

intimated at [30]: [30] That is not to accept that, in circumstances such as the present, the bank and AGC might not have entered into an agreement, and any necessary associated conveyances to give effect to an agreement, as to the extent to which the value of the freehold property and the MSB lease may be represented by certain proportions of the net proceeds of sale. It is not apparent at present why security holders might not agree in good faith in advance of the sale of separate properties separately secured to sell them together with the objective of achieving in totality a better net outcome, and might not agree about the proportion of the net outcome which would reflect the respective values of the separate properties. At [36] their Honours also observed: Nor is it correct to say that the bank’s agreement under the Sale Agreement to receive only 60% of the net proceeds of sale involved an allowance made by it to AGC for which, in equity, the bankrupt should now make allowance to the bank so as to entitle the bank to maintain its present claim. In our view, the sort of equitable adjustment discussed, for example, by Scrutton LJ in AL Underwood Ltd v Bank of Liverpool [1924] 1 KB 775 at 795, and by Mahoney J in Associated Midland Corp Ltd v Bank of New South Wales [1983] 1 NSWLR 533 at 552 does not arise in the present circumstances. Here, the arrangement between the bank and AGC was commercially negotiated at arms length. Outside that arrangement, in the particular circumstances, the bank owed duties to Raffindale and to the bankrupt in relation to the sale of the freehold property. It was obliged to account to the bankrupt for the proceeds of sale of the freehold property. As the Sale Agreement did not constitute an agreement as to what were the respective values of the freehold property and the MSB lease in a one-line sale, or otherwise a dealing with the mortgaged property in question, the bank was obliged to account for the true proceeds of sale of the freehold property, notwithstanding the Sale Agreement. Her Honour found those proceeds were 82.5% of the net proceeds of the one-line sale of the combined properties. [page 365] [81,670.60] Preferable construction of s 86 in the case of composition In the case of a composition there can be a set-off between a claim provable in the composition and a claim by the debtor which is not assigned to the trustee under the composition. In Gye v McIntyre (1991) 171 CLR 609; 98 ALR 393 the High Court held that the words of s 243 of the Act should not be construed as impliedly confined in some way which would preclude a set-off being allowed, in the case of a composition, in respect of any claim by the debtor which did not, by reason of the terms of the composition, vest in the trustee of the composition. The words of the section should not be confined by the introduction of any requirement to the effect that the countervailing claim of the trustee in bankruptcy must be of a kind which would be provable in the bankruptcy of the person who has had mutual dealings with the bankrupt if that other person were to become a bankrupt. The only further control of the type of claim which can be set-off under the section is that specified by the section itself, namely, that the countervailing claims be in respect of mutual credit, mutual debts or other mutual dealings which existed or had occurred at the time of the sequestration order. See also Citicorp Australia Ltd v Official Trustee (1996) 141 ALR 667. [81,670.65] Claims arising after sequestration A claim arising after the date of the sequestration order can be set-off under this section but only if it is in respect of a credit, debt, or other dealing which existed or had occurred at that date. In the case of a claim against the bankrupt the requirement that it

be provable in the bankruptcy means that, if it be a demand in the nature of unliquidated damages, it must be a demand arising by reason of a contract promise or breach of trust. In the case of a claim by the bankrupt, the requirement that it vest in the trustee must mean that if it were a demand for unliquidated damages it must not be a claim for personal injury or personal wrong: s 116(2)(g). There is no implied restriction to the effect that no subsequently arising claim in respect of a credit debt or other dealing which existed or had occurred at the time of the sequestration order can only be set-off if it is a claim in contract. There is no rule that set-off of claims which are contingent or unliquidated at the time of a sequestration order is precluded unless the claims “arise out of” contract. In Gye v McIntyre (1991) 171 CLR 609; 98 ALR 393 the High Court agreed with the judgment of Brightman J in Re D H Curtis (Builders) Ltd [1978] Ch 162 that the general proposition that set-off in bankruptcy was confined to claims arising from contract was unjustified by the relevant statutory provisions and contrary to the actual decision of Clauson J in Mathieson’s Trustee v Burrup Mathieson & Co [1927] 1 Ch 562. This conclusion has been accepted subsequently in other cases in England: Re Cushla Ltd [1979] 3 All ER 415; Re Unit 2 Windows Ltd [1985] 1 WLR 1383. [81,670.70] Subsection (2) This subsection provides protection in a case where the relevant steps have been taken before bankruptcy but after notice of an available act of bankruptcy. On the other hand, protection against abuse of the section by steps taken after bankruptcy lies in the main in the confinement by the cases of set-off under the section to circumstances where the requirement of mutual debts, credits or other dealings are satisfied at the date of the bankruptcy. An account under the section is taken at the date of the sequestration order: Re Clements; Ex parte Trustee; Goldsbrough Mort & Co Ltd (1931) 7 ABC 255; Re Milan Tramways Co; Ex parte Theys (1884) 25 Ch D 587; Hiley v Peoples Prudential Assurance Co Ltd (1938) 60 CLR 468.

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[81,675] Deduction of discounts 87 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.

[81,680] Apportionment to principal and interest of payments made before bankruptcy 88 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 [page 366] 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. SECTION 88 GENERALLY [81,680.5] Generally It is a well-established rule in the administration of bankrupt estates that a creditor cannot prove in bankruptcy for interest accruing after the date of the bankruptcy unless there is a surplus: Re Savin (1872) LR Ch App 760; McKenzie v Rees (1941) 65 CLR 1. This section applies to all proceedings under Pt X and administration of the estates of deceased persons in bankruptcy.

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[81,685] Apportionment where security realized before or after bankruptcy 89 (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. SECTION 89 GENERALLY [81,685.5] Generally The “debt” spoken of by s 89(2) is the “debt as at the date of bankruptcy” and the interest is the “interest which has become due at that date”: Re Vellnagel; Whiteman v Hansen (1975) 6 ALR 80 at 81. The “general rule” in bankruptcy is that there is “no proof for interest for any period subsequent to the bankruptcy and this rule applies whether the interest is on a secured or unsecured debt”: Re Vellnagel; Whiteman v Hansen, above at 81. A partly secured creditor cannot therefore claim for interest after the date of the sequestration order or assignment in respect of the unsecured balance of principal.

As to proof by a secured creditor, see ss 90–94. And see [81,670.55] for an example of such a debt.

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[81,690] Proof of debt by secured creditor 90 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

[page 367] (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. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (5) am Act 44 of 1996 s 3 and Sch 2] SECTION 90 GENERALLY [81,690.5] Generally “Secured creditor” in relation to a debtor means “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”: s 5. Under s 58(5), although property of the debtor upon his or her bankruptcy vests in the trustee and

unsecured creditors cannot enforce remedies against the personal property of the bankrupt in respect of any provable debt, any rights of a secured creditor to realise or otherwise deal with his or her security are not affected. The secured creditor may nonetheless prove in the debtor’s bankruptcy in the circumstances referred to in this section. The general principle is that “… a man is not allowed to prove against a bankrupt’s estate and to retain a security which, if given up, would go to augment the estate against which he proves”: see Re Turner; Ex parte West Riding Union Banking Co (1881) 19 Ch D 105. That principle governs a joint tenancy in exactly the same way as it governs a tenancy in common. Accordingly, where a debtor and his wife held property as joint tenants and charged that property by way of legal mortgage to secure money borrowed on current and loan account, and where in the debtor’s subsequent bankruptcy the bank then proved from money owing by the debtor and his wife, it was held that the bank should give credit for part of the moneys proved since those moneys were secured on property of the debtor: Re Rushton; Ex parte National Westminster Bank Ltd v Official Receiver [1972] Ch 197. Although a joint tenant has an interest in the whole of a property whereas a tenant in common has not, there is no difference between the two kinds of beneficial interest for bankruptcy purposes. The joint tenant has a severable share, therefore, if a charge could be apportioned between tenants in common, it could also be apportioned where there were joint tenants: Re Rushton; Ex parte National Westminster Bank Ltd v Official Receiver, above. For the purposes of the Act, the Commissioner of Taxation by virtue of the service of a s 218 notice becomes for the purposes of bankruptcy law a secured creditor: Deputy Commissioner of Taxation v Donnelly (1989) 25 FCR 432; 89 ALR 232; 89 ATC 5071; Deputy Commissioner of Taxation v Steele (1987) 87 ATC 5050; Kerrison v Acting Deputy FCT (SA) (1988) 88 ATC 4476; 19 ATR 1361; Clyne v DCT (1981) 150 CLR 1. Where the creditor has a security from a third party, the creditor can prove for the whole debt without giving up his or her security. Bankruptcy law treats the partnership estate as an entirely separate thing from the individual partner’s estate so that you have a separate estate of each individual partner and a joint estate or a partnership estate of a firm. Where there are joint and separate estates, and the creditor has a security for a joint debt on property forming part of the joint estate, he or she can prove against the joint estate on valuing or giving up his or her security and can also prove against the separate estates without bringing his or her security into account and vice versa. A fortiori, where the creditor has a claim against the separate estate for an unsecured debt and also a claim against the joint estate for a secured debt, he or she should be able to prove against the separate estate for his or her unsecured debt without bringing into account the property on which he [page 368] or she holds a security in respect of his or her claim against the joint estate, even though part of such property consists of the separate property of the debtors: Re Dutton Massey and Co; Ex parte Manchester and Liverpool District Banking Co [1924] 2 Ch 199. In bankruptcy the joint estate and separate estate of a debtor are considered as distinct estates (see s 110) and a partnership creditor having security over the separate estate of a debtor partner may prove its debt against the joint or partnership estate without being obliged to value or relinquish its security: Re Turner; Ex parte West Riding Union Banking Co (1881) 19 Ch D 105 per Jessel MR at 112–13; Re Rolfe and Bank of Australasia v Flower, Salting and Co (1865) LR 1 PC 27 at 46; Re Rushton; Ex parte National Westminster Bank Ltd v Official Receiver [1972] Ch 197; Re Dutton Massey and Co; Ex parte Manchester and Liverpool District Banking Co [1924] 2 Ch 199 at 208–10. The reason for such a rule is that the realisation, or the giving up, of the security over the separate estate would not augment

the joint or partnership estate. [81,690.10] Estimate By reason of the provision of s 91(4) it is very important for the creditor’s estimate of the value of the security to be accurate. [81,690.15] The bankrupt’s property A creditor is a secured creditor for the purpose of s 5 and s 44(4) even if the property over which the security was granted is held by him or her as trustee: Re Morris; Ex parte Australia and New Zealand Banking Group Ltd (1991) 29 FCR 1.

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[81,695] Redemption of security by trustee etc 91 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (2) am Act 44 of 1996 s 3 and Schs 1, 2]

(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. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(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. [page 369] SECTION 91 GENERALLY [81,695.5] Generally Although under ordinary circumstances a creditor proving in a bankruptcy may properly lump together his or her debts and securities, where the debts are distinct in substance with different rights over as against third persons, or with different securities, the trustee and the bankrupt may insist that proof shall not be made for a lump sum, and may require the creditor to distinguish and specify the particular debts and the values of the securities: Re Morris; James v London and County Banking Co [1899] 1 Ch 485. [81,695.10] Subsection (4) The trustee is required to make an election within three months after receiving written notice from the creditor. That time limit can be extended by the court: s 33(1)(c). If the trustee elects to exercise the power of redeeming the security or of requiring it to be realised, no time limit is specified within which either of those matters need be attended to.

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[81,700] Amendment of valuation 92 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (3) am Act 44 of 1996 s 3 and Sch 2] SECTION 92 GENERALLY [81,700.5] Generally Subsection (1) entitles a secured creditor to apply to the trustee or the court at any time for permission to amend the proof of debt by altering the estimated value. The words “at any time” have some limitation: the right will be at an end if the trustee, acting upon the valuation put upon the security by the creditor, has exercised the right to redeem the security at the assessed value: Re Sadler; Ex parte Norris (1886) 17 QBD 728. As a matter of principle the rule ought to be construed so as to give the creditor the right to amend unless the position of the creditor and the trustee has become so +altered that the rights of the parties concerned may be considered to be fixed on the basis of the alteration: Re Sadler; Ex parte Norris, above. Permission to amend the proof of debt is discretionary: in Re Becher (dec’d) [1944] 1 Ch 78. In the case of Re Safety Explosives Ltd [1904] 1 Ch 226, Sterling LJ at 236 noted that amendment or withdrawal of proof is not a matter of right but is subject to the control of the court and leave ought not to be given where the position of all parties has been altered in the interim. In Re Westpac Bank v Morton (1988) 79 ALR 206, the Full Court of the Federal Court held that the words “at any time” in s 92 are not intended to give a secured creditor an unlimited right to apply to the court to amend a proof of debt, but rather it was evident from the statutory context that the words were intended to provide rights to the trustee and creditor respectively in the course of a composition and prior to its completion. [page 370] Upon satisfaction of the composition the trustee’s duties to the creditor and debtor are complete. In Re Couldery v Bartrum (1881) 19 Ch D 394, which was again a composition case, the court held that it was inappropriate to grant leave to amend a proof of debt by substituting another value for the security after the close of a composition, whereas a creditor might be allowed to alter a proof of debt during pendency of such proceedings. In Re Patrick (1935) ABC 124, there was a late application by a creditor under a deed of assignment for leave to vary the estimated value of a security and to amend the proof of debt; although the period of time that had elapsed between the date on which the value of the security had been estimated and the date on which the application was made was almost four years. The deed of assignment had not been completed by the payment of a final dividend because of delay in realisation of a major asset of the estate and there was no question of a right to amend having been lost because of new rights established in the debtor or other creditors by completion of the deed of assignment. For the costs of amendment, see s 100.

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[81,705] Repayment of excess 93 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2] SECTION 93 GENERALLY [81,705.5] Generally This section deals with the consequences of the proof of debt being amended pursuant to s 92. This section speaks of the repayment of excess dividends to the trustee and of money being available for distribution as future dividends. It is apparent that the section is speaking prospectively and is based upon an assumption that the amendment of the proof of debt has taken place prior to termination of the trustees function, or alternatively in the course of a composition and prior to its completion: Re Westpac Bank v Morton (1988) 79 ALR 206.

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[81,710] Subsequent realization of security 94 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. [s 94 am Act 12 of 1980; Act 44 of 1996 s 3 and Sch 2] SECTION 94 GENERALLY [81,710.5] Generally This section provides for the substitution of the actual value of the security for the estimated value upon realisation of the security and the consequential amendment [page 371] of the proof of debt. The section must relate to an uncompleted composition as far as its application to Pt X is concerned. It can have no application to the realisation of a security pursuant to the provisions

of s 240(2) effected after the composition has been completed, the security having been preserved for the limited of purpose of s 240(2) only: Re Westpac Bank v Morton (1988) 79 ALR 206. [81,710.10] Application This section applies to all proceedings under Pt X and administration of the estates of deceased persons in bankruptcy.

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[81,715] Proof in respect of distinct contracts 95 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. [s 95 am Act 12 of 1980; Act 44 of 1996 s 3 and Sch 2] SECTION 95 GENERALLY [81,715.5] Generally This section had its origin in a provision which appeared for the first time in the Bankruptcy Act of 1869 (UK) No 1896, being a provision designed to cut down the effect of the doctrine of election in situations where there were distinct and separate engagements undertaken by debtors to a creditor. The effect of the English section had been considered in a number of cases. In Re Jeffrey; Ex parte Honey (1871) LR 7 Ch App 178, it was held that the holder of a joint and several promissory note signed by two members of a firm as well as by the firm was entitled to prove against and receive dividends from the joint estate of the firm as well as the separate estates of the two partners who had signed the note. In Re Welch; Ex parte Stone (1873) LR 8 Ch App 914, it was held by Mellish and James LJJ that an engagement under seal entered into by two partners jointly and separately to make payment of a sum of money would give rise upon the bankruptcy of the two partners to a right of proof against the joint estate of the two partners as well as against their separate estates. Section 95 in effect abolishes the bankruptcy doctrine of “election” as regards contracts. For although limited by its express words to cases where the joint liability is a liability as members of a firm, this includes all cases in which the doctrine of election could have applied, or that could only have applied where there was a joint estate ie a firm. The contract although “distinct” may yet be contained in one instrument, for example, a promissory note made by the members of a firm jointly, and by some or all of them separately. However, such a joint and separate promissory note need not on its face be made by the partners in the firm name; it may be made by all of the partners jointly and separately for a partnership purpose. In Re Scott (1970) 16 FLR 416, Scott and Carter had carried on business as garage proprietors borrowing money from Mutual Acceptance Co Ltd. The terms of the borrowing were recorded in two memoranda of mortgage under the Real Property Act, these memoranda being given in respect of land owned by the two bankrupts. Each memorandum contained a personal covenant for payment by the bankrupts and each contained a clause binding them jointly and severally.

In due course, there was default and sequestration orders were made against both estates. The applicant lodged separate proofs of debt in respect of its judgment in the joint estate and in each separate estate. It was held that the proof of debt could be made against both their joint estate and their separate estates in bankruptcy. [page 372] [81,715.10] Joint and several estates In Macks (Trustee), Re Weber (Bankrupt) [2006] FCA 636; BC200605675 Finn J said, in respect of the judgment of Street J in Re Scott (1970) 16 FLR 416: [14] As Street J held in Re Scott (1970) 16 FLR 416, where partners incur joint and several liability to pay make a payment they are for s 95 purposes liable in respect of distinct contracts (a) as members of the firm and (b) as sole contractors, even if those contracts were contained in the same instrument. Section 95 has its provenance in English Bankruptcy legislation provisions originating in the Bankruptcy Act 1861 (UK) s 152 and achieving its presently relevant form in the Bankruptcy Act 1883 (UK) Sch II r 18 (see also Bankruptcy Act 1914 (UK) Sch 2 r 19). The English legislation was copied in r 244 of the Rules made under the Bankruptcy Act 1924 (Cth). … [16] There being nothing in this matter to suggest that it falls within those exceptional cases not covered by s 95, a creditor to whom the Webers are jointly and separately bound on distinct contracts has a statutory entitlement to prove in both the joint and several estates. [17] I should add for the sake of completeness that the rule that only one proof may be lodged against a single estate in respect of each debt of that estate: see generally Western Australia v Bond Corporation Holdings Ltd (1992) 37 FCR 150 at 161–164; has no present relevance.

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[81,720] Proof in respect of proportionate part of periodical payment 96 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.

[81,725] Production of bills of exchange and promissory notes 97 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.

[81,730] Amendment of proof of debt 98 (1) A creditor may, with the consent of the trustee, amend a proof of debt lodged by him or her. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2] SECTION 98 GENERALLY [81,730.5] Generally This section gives an unsecured creditor the facility to amend a proof of debt. As to secured creditors, see [81,700.5]. Unlike s 92 the opportunity to amend cannot be applied for “at any time”, but presumably payment will be allowed in the case of mistake provided the estate has not been finalised or completed. For the costs of amendments, see s 100.

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[page 373]

[81,735] Application to the Court where creditor or bankrupt considers proof wrongly admitted 99 [s 99 rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[81,740] Costs of proving debts etc 100 (1) A creditor shall, unless the Court in the particular case otherwise orders, bear his or her own costs of proving a debt. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) The costs in relation to the amendment of a proof of debt under section 92 or 98 shall be borne by the creditor. SECTION 100 GENERALLY [81,740.5] Generally Section 92 relates to an estimation of the value of a security in the case of a secured creditor, whereas s 98 relates to creditors other than secured creditors. This section applies to all proceedings under Pt X and to the administration of the estates of deceased persons in bankruptcy.

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[81,745] Inspection of proofs by creditors etc 101 (1) A creditor is entitled to examine at all reasonable times the proofs of debt of other creditors. [subs (1) subst Act 119 of 1987 s 40]

(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. [subs (2) insrt Act 12 of 1980 s 46; am Act 119 of 1987 s 40] SECTION 101 GENERALLY [81,745.5] Application This section applies to all proceedings under Pt X and to the administration of the estates of deceased persons in bankruptcy.

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[81,750] Admission or rejection of proofs 102 (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. [subs (1) am Act 12 of 1980 s 47]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

[page 374] (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. [subs (3) insrt Act 12 of 1980 s 47; am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (4) insrt Act 12 of 1980 s 47; am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (5) insrt Act 12 of 1980 s 47; am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (6) insrt Act 12 of 1980 s 47] SECTION 102 GENERALLY [81,750.5] Generally This section applies to all proceedings under Pt X and to the administration of the estates of deceased persons in bankruptcy. Section 104 gives a creditor dissatisfied with a decision of the trustee concerning admission or rejection of a proof, the right of review by the court. The function of the court is to consider whether the applicant for review has a debt that should be admitted to proof or has established whether a debt admitted to proof ought not to have been. See Coshott v Burke [2012] FCA 517; BC201203561 at [56]. Emmett J in Kent and Orlizki Re Bankrupt Estate of Stankovic [2012] FCA 333; BC201201903 explains the scheme at [1]–[2]: [1] I have before me an application under s 104 of the Bankruptcy Act 1966 (Cth) … for review of a decision of the trustee of a bankrupt estate, made under s 102 of the Bankruptcy Act. Section 102 provides that a trustee in bankruptcy must 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, must, within a specific period, either admit the proof of debt in whole, admit it in part and reject it in part, reject it in whole, or require further evidence in support of it. Under s 102(2), where the trustee rejects a proof of debt in whole or in part, the trustee must inform the creditor by whom it was lodged of

the grounds of the rejection. [page 375] [2] Under s 104, a creditor, or the bankrupt, may apply to the Court for review of a decision of the trustee under s 102 in respect of a proof of debt. The Court may, on the application, confirm, reverse or vary the decision of the trustee. An application under s 104 to review a decision must not be heard by the Court unless it was made within 21 days from the date on which the decision was made. However, the Court may extend the time within which an application may be made. Section 99 entitles the creditor or a bankrupt to apply to the court for an order that a proof be expunged or that the amount of the admitted debt be reduced. In Kent and Orlizki Re Bankrupt Estate of Stankovic [2012] FCA 333; BC201201903, Emmett J said at [14] that s 104 might have created an inchoate right to an assessment which might have led to a variation of the debt, but until that right had been taken or it had expired, the debt remained. [81,750.10] Grounds of rejection In an appropriate case the court may order the trustee to provide reasons for his rejection of the proof: Re Huntley (1917) 87 LJQ 13 590. The question for the court is whether there was in fact and in law, a debt which could legally found the judgment. Miles v Shell Company Australia (1998) 156 ALR 133 at 136; BC9802290. In Martindale ACF Pty Ltd v Johnson [2013] FMCA 63; BC201300418 Simpson FM upheld a Trustee’s rejection of a proof of debt where the debt, which was nursing home charges, was attributed to the respondent on the grounds that either the respondent was the deceased’s attorney, or that he was executor. Simpson FM said that neither proposition supported the substantiability of the alleged debt at [21]–[24].

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[81,755] Debts to be rounded down to nearest dollar 103 If the amount of a debt includes cents, the cents must be disregarded in admitting proof of the debt. [s 103 subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 103 GENERALLY [81,755.5] Generally This section provides for the rounding down of a debt to the nearest dollar.

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[81,760] Appeal against decision of trustee in respect of proof 104 (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. [subs (1) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. SECTION 104 GENERALLY [81,760.5] Relevance of facts and surrounding circumstances In exercising its power of review the court will make reference to the facts and surrounding circumstances of the case: Re Fletcher; Ex parte Hanimex Pty Ltd (1984) 9 ACLR 30. The practical approach of the trustees in such a task is expressed by Emmett J in Kent (t/as Kent Attorneys) v Van der Velde (as trustees of the Bankrupt estate of Stankovic) [2012] FCA 333; BC201201903: [13] The approach taken by the Trustees appears to have been that it is a matter for them to assess the debt owing to a creditor. It is common ground that Kents are, and were at the date of [page 376] the sequestration order, creditors of the Bankrupt. The second aspect of the duty of a trustee in bankruptcy, in dealing with a proof of debt, is to assess the quantum of the debt. That would involve an assessment of the prospects of success of an application for assessment to the Supreme Court, or an assessment of the possibility, when such an application was out of time, of succeeding in an application for an extension of time. It appears to be clear enough that the Trustees did not address those questions. There is nothing to suggest that the Trustees made an assessment of whether or not an application for an extension of time to the Supreme Court had any prospects of success. Indeed, they specifically abandoned the application that had been made by the Bankrupt, although there may be a question as to whether the application made by the Bankrupt was competent, having regard to the making of the sequestration order. [14] Nevertheless, I consider that, on a proper analysis, a trustee in bankruptcy does not, as against a creditor, have any greater right than the bankrupt. As at the date of the sequestration order, Kents were creditors of the Bankrupt in the amount of their final proof of debt. There may have been an inchoate right on the part of the Bankrupt, as at the date of the sequestration order, to have an assessment that might have resulted in that debt being varied. However, until such time as that step was taken, or until the time when it was possible for such a step to be taken had expired, there was a legal debt owing by the Bankrupt to Kents. [15] In those circumstances I consider that it was not open to the Trustees to make an assessment of what might have been done by the Supreme Court had an application for assessment been made in time, or, if made out of time, had such an extension of time been granted, and an assessment then made. It is apparent that the Trustees did, in fact, make a genuine and bona fide assessment of

their own, in effect standing in the shoes of the Supreme Court, on the basis that an application had been made for review. I do not consider that it was open to them to take that step, and to approach the proof of debt in that way, in circumstances where there was no application for assessment on foot, and no competent application had been made. It follows, in my view, that the proof of debt should have been admitted in the full amount of $246,677.68. As to evidence to be taken into account, in Coshott v Burke [2012] FCA 517; BC201203561 at [56] the court said: The function of the Court under s 104 is not to consider the correctness or otherwise of the trustee’s decision in light of the material before the trustee, but to determine in light of the material before the Court whether the applicant for review has a debt that should be admitted to proof or has established that a debt admitted to proof ought not to have been. The court can take into account inconsistencies in the material provided to the trustee and the evidence before the Court: Re DK Rogers; Ex parte v CMV Parts Distributors Pty Ltd (1989) 20 FCR 561 at 562–563 per Von Doussa J; Payne; Ex parte Levi [1986] FCA 439 (23 September 1986 per Toohey J); BDT Holdings Pty Ltd v Piscopo [2009] FCA 151 at [4] per myself. An application to review a trustee’s decision under s 104 is an original proceeding that the court hears de novo: see too Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332 at 340–341 per Brennan and Dawson JJ, with whom, on this matter, Toohey J agreed at 354. [81,760.10] Nature of review The court, in reviewing a decision to admit or reject a proof, does not conduct the hearing as an appeal, considering the correctness or otherwise of the trustee’s decision in the light of the material before him or her. Rather the function of the court is to determine, in the light of the material before it, whether the applicant is entitled to succeed: Re Rodgers; Ex parte CMV Parts (1989) 20 FCR 261; Re Masters; Ex parte Gerovich (FCA, Toohey J, 30 July 1985, unreported). For a general discussion regarding the nature of a review, see Re Brindle; Ex parte FB & FA McMahon Pty Ltd (1992) 35 FCR 506; 108 ALR 470. Also in Re DK Rogers; Ex parte CMV Parts Distributors Pty Ltd (1989) 20 FCR 561 at 562–3, von Doussa J applied an earlier unreported decision of Toohey J in Payne; Ex parte Levi [1986] FCA 320, where his Honour applied earlier decisions of the court construing s 104 of the Act. Von Doussa J accepted that the function of the court on s 104 is not to consider the correctness or otherwise of the trustee’s decision in the light of the material before the trustee, but to determine in light of the material before [page 377] the court whether the applicant for review has a debt that should be admitted to proof. The court can take into account inconsistencies in the material provided to the trustee and the evidence before the court. The methods used are illustrated by Emmett J in Kent (t/as Kent Attorneys) v Van der Velde (as trustees of the Bankrupt estate of Stankovic) [2012] FCA 333; BC201201903. In Healy, Re; Falaren Pty Ltd (deregistered) v ASIC [2012] FCA 368; BC201202089 Siopis J examined the above principle in dealing with an application to reinstate a company pursuant to s 601AH of the Corporations Act which application turned on the decision of the trustee in taking the proceeding. His Honour held, applying Australian Competition & Consumer Commission (ACCC) v Australian Securities and Investments Commission (ASIC) (2000) 174 ALR 688; 34 ACSR 232; [2000] NSWSC 316; BC200002196 at [27] and Re Rosaub Pty Ltd (in liq) (2005) 192 FLR 395; 54 ACSR 371; [2005] NSWSC 689; BC200504990 that the applicant had failed to demonstrate sufficient utility to support the reinstatement. At [23] His Honour noted that the applicant had sought to impugn the proof of debt under s 104 only as a means of supporting an application for annulment. It is submitted

that this decision supports the general principle set forth in the preceding paragraph. The only way in which an income tax assessment can be challenged is under the appeal provisions of the Income Tax Assessment Act 1936 and it follows that the validity of an assessment cannot be challenged by any other procedure in any court. Thus the power of the court to look behind a judgment has no parallel applicable to taxation assessments. It seems therefore that it is not possible for a trustee to reject a proof of debt due to the Commissioner of Taxation which either consists of or is supported by a notice of assessment, even if an objection has been lodged against the assessment. The same is true of a liquidator in any proceedings: Commonwealth v Duncan [1981] VR 879; (1981) 37 ALR 665. The position is thus different from the ordinary case where the courts can go behind judgments in order to ascertain the true state of a debt: Re Calvert [1899] 2 QB 145; Re Moschi (1953) 35 TC 92; Re Noonan (1964) 13 ATD 409. The court however, has wide procedural powers: in Heyer v Burke [2007] FMCA 1627; BC200708398 this section was used to make orders to resolve the conflict between rr 13.01 and 13.02 of the Federal Magistrate Court Rules 2001 and the Federal Court Rules. Under r 13.02, if a party discontinues an application the other party may apply for costs and such application must be made within 28 days after service of the notice of discontinuance unless the court or a registrar otherwise directs. The procedure in the Federal Court is that costs automatically follow a notice of discontinuance. In Heyer v Burke, above, Raphael FM made orders that would effectively allow the bill to be taxed. Rares J’s judgment in BDT Holdings Pty Ltd v Piscopo [2009] FCA 151; BC200900944, whose view of the legislation has been adopted above, should be considered.

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[81,765] Costs of appeal 105 (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. [subs (1) subst Act 12 of 1980 s 49]

(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. [subs (2) am Act 12 of 1980 s 49] SECTION 105 GENERALLY [81,765.5] Generally This section applies to all proceedings under Pt X and to the administration of the estates of deceased persons in bankruptcy. [page 378] In order for costs to be awarded against a registered trustee there must be “special circumstances”. Probably only misconduct or malafides would suffice, mere carelessness or negligence being unlikely

to be regarded as “special circumstances”: Re Turner; Ex parte Curtin (1941) 12 ABC 1.

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[81,770] Trustee may administer oaths etc 106 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) This section does not apply in relation to the Official Trustee. [subs (2) insrt Act 12 of 1980 s 50] SECTION 106 GENERALLY [81,770.5] Application This section applies to all proceedings under Pt X.

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[81,775] Creditor not to receive more than the amount of his or her debt and interest 107 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. [s 107 am Act 44 of 1996 s 3 and Sch 2] SECTION 107 GENERALLY [81,775.5] Generally This section applies to all proceedings under Pt X. The general rule in bankruptcy is that there is no proof in bankruptcy for interest subsequent to the bankruptcy because “the theory in bankruptcy is to stop all things at the date of the bankruptcy, and to divide the wreck of the man’s property as it stood at that time”: Re Savin (1872) LR Ch App 760 at 764 per James LJ. Whenever there is a deficiency in assets, no proof for interest accruing after adjudication will be allowed, this rule applying whether the interest is on a secured or unsecured debt. Where there is an estate sufficient to enable the trustee to pay the debts in full and to leave a surplus, creditors who have debts which bear interest by contract can prove against the surplus for the interest which accrues after the date of the adjudication: Re Page v Commonwealth Life Assurance Society Ltd (1936) 36 SR (NSW) 85 at 97–8; Re Jowitt v Callaghan (1938) 38 SR (NSW) 512. Creditors can amend their proofs or lodge new proofs if there was no question of any surplus at the time when the proofs were originally

lodged, but not so as to disturb prior dividends: Ellis & Co’s Trustee v Dixon-Johnson [1924] 1 Ch 342 at 357. In the absence of express statutory provision, original debts which were not interest bearing by contract cannot be the subject of a claim for interest, even if there is a surplus: Re Sammon and Pierson; Ex parte Sammon (1831) 1 Mont 253; Re Hariasio Clagett; Ex parte Charman [1887] WN 184. On the issue generally, see McKenzie v Rees (1941) 65 CLR 1. However, for the purposes of annulment of a bankruptcy by payment of debts in full, “bankrupt’s debts” is defined to include all debts that have been proved in the bankruptcy including interest payable on those debts that bear interest: s 153A(6). [81,775.10] Statutory entitlement to interest on a dividend arises under s 147 where the trustee has neglected or refused to pay.

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DIVISION 2 — ORDER OF PAYMENT OF DEBTS Subdivision A — General [Subdiv A am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

[81,780] Debts proved to rank equally except as otherwise provided 108 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. [s 108 am Act 86 of 2002] SECTION 108 GENERALLY [81,780.5] Relevant sections Note that express priority is given to certain payments by virtue of the provisions of s 109. Also note the provisions of repealed s 120(4) (relating to unclaimed dividends) and s 139H(2) (applications relating to an entity).

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[81,785] Priority payments 109 (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 175; *(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 *Editor’s note: Paragraph (b) applies only to bankruptcies where the date of bankruptcy is on or after 16 December 1996. The paragraph as it stood prior to repeal can be found in G Bigmore, Annotated

Bankruptcy Act 1966 & Rules, Butterworths, Sydney 1996 ed at [81,785].

[page 380] 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. [subs (1) subst Act 12 of 1980 s 51; am Act 18 of 1983 s 4; Act 21 of 1985 s 23; Act 154 of 1986 s 16; Act 119 of 1987 s 41; Act 115 of 1990 s 16; Act 32 of 1993 s 29 and Sch 1; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Schs 1, 2, opn 1 Dec 2004; SLI 50 of 2006 reg 3 and Sch 32, opn 27 Mar 2006; Act 54 of 2009 s 3 and Sch 5[18], opn 1 July 2009]

(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. [subs (1A) insrt Act 32 of 1993 s 29 and Sch 1; am Act 170 of 1995 s 3 and Sch 2]

(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. [subs (1B) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (1C) insrt Act 51 of 2002 s 3 and Sch 6, opn 5 May 2003]

(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 [page 381] 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. (4) [subs (4) rep Act 119 of 1987 s 41] (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. [subs (6) am Act 21 of 1985 s 23]

(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. [subs (6A) insrt Act 21 of 1985 s 23]

(7) A special resolution shall not be deemed to have been duly passed for the purposes of paragraph (1)(j) unless the notice convening the meeting at which it was passed contained a copy of the proposed resolution. (7A) The trustee must keep the minutes of the meeting, and a written record of the terms of a special resolution, referred to in paragraph (1)(j). [subs (7A) insrt Act 44 of 1996 s 3 and Sch 1]

(7B) The trustee must allow a creditor or an authorised employee to inspect the minutes and record at any reasonable time. [subs (7B) insrt Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (8) subst Act 44 of 1996 s 3 and Sch 1]

(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. [subs (10) subst Act 21 of 1985 s 23]

(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. [page 382] (12) In subsection (11), debts includes liabilities, remuneration, commitments and expenses specified in subsection (1). [s 109 subst Act 12 of 1980 s 51] SECTION 109 GENERALLY [81,785.5] Section 109(1)(a) See reg 6.01. [81,785.9] Section 109(1)(b) “The provisions of s 109(1)(b) are not limited to cases where a deed of arrangement is entered into. They have equal application to a case where, for whatever reason, nothing comes from the authority under s 188 conferred on a registered trustee, but thereafter the debtor becomes a bankrupt. This would be so even if, within a limitation period, a number of such authorities had been given but with no result”: Re Vowell; Ex parte Vince v Lofthouse (1994) 126 ALR 638 per Northrop J. Note that Re Vowell; Ex parte Vince v Lofthouse concerned a claim by a controlling trustee in a deed of arrangement. In such a case, s 109 applies as if the debtor were a bankrupt and the trustee were the trustee in bankruptcy: s 237(2). [81,785.10] Sections 109(10) and 221YU of the Income Tax Assessment Act 1936 The power of the court to give an advantage to indemnifying creditors is not subject to s 221YU of the Income Tax Assessment Act 1936: Re Clarke; Ex parte Official Receiver (1981) 35 ALR 359. [81,785.15] Subsection (10) Property received after an indemnity for costs by creditor(s): Re Webb; Ex parte Taylor (1987) 75 ALR 139. Note the indemnity can be extended to matters not directly related to litigation. In respect of post-bankruptcy schemes and compositions, see [81,405.15]. Carr J discussed the policy of the subsection in Re the Estate of Connell (decd) [2001] FCA 51; BC200100166 (Re Connell). His Honour said at [24]: [24] The policy behind s 109(10) has been identified as being at least twofold. First, to encourage creditors to indemnify trustees in bankruptcy who wished to pursue claims in the administration of bankrupt estates: Re Ken Godfrey Pty Ltd (1984) 12 ACLC 1071 [a case involving the equivalent of s 109(10) in the Corporations Law viz s 564]. Secondly, to reward creditors who bear the burden and take the risks of litigation: Re Glenisia Investments Pty Ltd (In Liquidation) (1996) 14 ACLC 237 and the cases there discussed.

And Moore J said in Green v Official Trustee in Bankruptcy (2003) 128 FCR 383; [2003] FCA 164; BC200300756 at [22]: [22] The difficulty the applicant confronts is that s 109(10)(a) operates, in terms, in circumstances where property has been recovered under an indemnity for costs given by a creditor. While par (a) does not refer to an indemnity given to a trustee (unlike par (b)), it is fairly clear, in my opinion, that is what is intended by the provision. That is, a creditor who indemnifies a trustee for costs in litigation that results in property being recovered, realised or preserved can benefit (by way of being given an advantage) from an order of the Court concerning the distribution of the property. Counsel for the applicant invited me to take a broad view of what is meant by “indemnity” in s 109(10)(a). I accept that the provision should not be narrowly construed and the situation that has arisen in this case is not, at least in result, materially different from that addressed by s 109(10)(a). However the word “indemnity” in the expression “indemnity for the costs of litigation” must be given some meaning and would, ordinarily, be given its legal meaning: see Pearce and Geddes: Statutory Interpretation in Australia (fifth edition) at [4.11]–[4.12]. As to that meaning, it is sufficient to refer to a judgment of the Court of Appeal of New South Wales in Waterloo Holdings Pty Ltd v Tismo (Sheller & Powell JA & Sheppard AJA, 28 August 1997, unreported) concerning what is meant by “indemnify”: As a matter of everyday language, the word “indemnify” denotes the provision of compensation for damage or loss sustained or expense incurred. The different uses of the [page 383] term in law are discussed in Chitty on Contracts - Specific Contracts, 27th ed, para42-006-7. The application of s4 of the Statute of Frauds 1677 (UK) to contracts of guarantee has necessitated the drawing, in particular cases, of a distinction between contracts of guarantee and contracts of indemnity. In this dichotomy an indemnity has been described as “a promise by the promisor that he will keep the promisee harmless against loss as a result of entering into a transaction with a third party”; per Mason CJ in Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 254 and the cases there referred to. In the present case, the applicant did not offer to meet the costs of litigation undertaken by the trustee: see Re Kyra Nominees Pty Ltd (in liq) (1987) 11 ACLR 767, but rather undertook the litigation himself. In Official Trustee in Bankruptcy v Pastro [2004] FCA 713; BC200403402 Mansfield J declined to find that extending an indemnity to creditors gave those creditors an advantage. He applied Re Connell. Mansfield J did so on the basis that the discretion under s 109(10) is unqualified and, in the circumstances, the court has the power to order that the whole of the amount recovered by relevant litigation be distributed among the indemnifying creditors. Second, the policy behind s 109(10) is to encourage creditors to indemnify trustees to pursue claims and to reward creditors who do so, so that the property of the bankrupt will be available to creditors. Third, the way in which the discretion under s 109(10) should be exercised depends upon the facts of the particular case and is often, ultimately, a matter of impression. These principles were described and applied by Driver FM in Perpetual Nominees Ltd v Pascoe [2007] FMCA 529; BC200702670. [81,785.20] Priority under the Child Support (Registration and Collection) Act 1988 The object of this Act is to ensure that children receive financial support from their parents. Provision is made for registration of maintenance liability and the enforcement through a process of entry of maintenance

agreements in a Child Support Register, and for the automatic withholding of maintenance liability from the salary or wages of persons charged with maintenance liability. Section 50 of the Act provides that where an obligation to pay maintenance arises but the property of an employer required to remit deductions of maintenance is vested in or comes under the control of a trustee, the trustee is liable to pay the maintenance sum to the Child Support Register and the amount payable to the Register has priority over debts other than amounts payable under s 221YHZD(3) of the Income Tax Assessment Act 1936, which rank equally with amounts payable under the Child Support legislation.

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[81,790] Debts due to employees 109A (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. [page 384] (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). [s 109A insrt Act 21 of 1985 s 24]

[81,795] Application of estates of joint debtors 110 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. SECTION 110 GENERALLY [81,795.5] Application of ss 110 and 141 to winding-up of insolvent companies When considering the respective rights of creditors in a winding-up of an insolvent company under s 291(2) of the Companies Act 1961, ss 110 and 141 of the Bankruptcy Act 1966 apply to give a creditor who was owed a joint debt by joint debtors access to their joint estate ahead of a creditor who was owed a separate debt: Anmi Pty Ltd v Williams (1981) 36 ALR 171 at 171; 52 FLR 309. [81,795.10] Section 110 “whether partners or not” A “bankruptcy of partners is a bankruptcy of joint-debtors and no distinction should be made between partnership assets and liabilities and joint nonpartnership assets and liabilities”: Re Boots; Ex parte Official Receiver (1976) 26 FLR 320. [81,795.15] Application of s 110 where one partner is bankrupt: Where one partner is declared bankrupt his or her bankruptcy operates as an assignment of all his or her shares and interest in the partnership property to his or her trustee: Re Tarrant; Ex parte Putnin v Jeffs (FCA, Toohey J, 189 of 1984, 26 June 1985, unreported). In Re Kitt [2005] FCA 1564; BC200512035, Finn J provides an application of this section. His Honour summarised at [12]–[13]: [12] It is orthodox partnership law that, save in circumstances where a partner so acts as to render himself or herself separately or severally liable on a contract with the partnership, a contract which is binding on the firm is binding on all the partners jointly and on none of them severally: Kendall v Hamilton; Partnership Act 1891 (SA) s 9; and see Lindley & Banks on Partnership, 13-02 (18th ed, 2002). [13] When BP sued the Kitts it sued and obtained judgment on that joint obligation which itself merged in the new obligation created by the judgment: on merger see eg Corney v Brien (1951) 84

CLR 343 at 353; Commonwealth v Precision Pools Pty Ltd (1994) 53 FCR 183 at 191–2. The obligation so created by the judgment, though new, was not different in its incidents from the liability sued upon to judgment: cf Militz v Bowering-Wood [1954] SASR 175 at 179. The preexisting obligation was joint. Correspondingly, the obligation created by the judgment was joint. I emphasise this for this reason. BP in lodging its proofs of debt has proceeded on the premise that the Kitts’ liabilities to it are joint and several. [page 385] At [15] his Honour concluded: [15] In the absence of any evidence at all indicating that BP’s fuel contracts resulted in the Kitts being jointly and severally liable to BP as distinct from only jointly liable, the conclusion is inevitable that the ordinary contractual rule applies and that the Kitts are jointly liable to BP. In consequence, s 110(1) requires that BP’s proof of debt is initially to be lodged in the triple estate of the bankrupts. I will direct accordingly. [81,795.25] Joint tenancy A joint tenancy may be destroyed by severance thereby converting the estate into a tenancy in common. Bankruptcy occasions involuntary alienation with the consequence that as between joint tenants the bankrupt’s interest in properties is vested in his or her trustee: Morgan v Marques (1853) 156 ER 62; Re Butler’s Trusts (1888) 38 Ch D 286. It follows that at least in equity the joint tenancy in Torrens System land is severed as between the bankrupt and the other joint tenant or joint tenants: Wright v Gibbons (1949) 78 CLR 313. In Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165, husband and wife joint tenants were made bankrupt on different petitions and at different times so the question which arose for consideration was whether the property was for the purposes of s 110 joint property or part of each bankrupt’s separate estate. The court held that the severance which took place in equity was binding upon the trustee when he registered the transmission of the bankrupt’s interest in the property. At the time of her bankruptcy the wife was thus in equity the proprietor of an estate as tenant in common in the property as was the Official Trustee as trustee of the estate of the husband. It followed that the property and the net proceeds of sale must be treated as portion of the separate estate of each bankrupt and dealt with as such under the provisions of s 110 of the Act. In Re Francis; Ex parte Official Trustee (1988) 19 FCR 149 the Full Court of the Federal Court approved the decision in Re Holland; Ex parte Official Trustee in Bankruptcy, above, and declined to follow the decision of Beaumont J in Re Oswald; Ex parte Official Trustee in Bankruptcy (1985) 61 ALR 339. See also Sistrom v Urh (1992) 40 FCR 550; 117 ALR 528. Some interesting observations were made in Macks (Trustee), Re Weber (Bankrupt) [2006] FCA 636; BC200605675 in which Finn J was asked to make some directions pursuant to s 134(4) of the Bankruptcy Act. First, his Honour said (at [23]) that: [23] There is now a significant body of Australian case law in addition to Re Francis to the effect that the bankruptcy of a joint tenant severs the joint tenancy at law (if the land in question is old system land) or in equity (if the land is held under a title registration system), the involuntary alienation worked by s 58 of the Bankruptcy Act effecting the severance in either case: see generally Sistrom v Urh (1992) 40 FCR 550; Re Holland; Ex parte Official Trustee in Bankruptcy (1985) 5 FCR 165; Re Prestia [2001] FCA 792 at [23]–[24]. As Re Francis indicates, that involuntary alienation severs at least two of the “unities” (ie of interest and of time). His Honour then applied Re Francis; Ex parte Official Trustee in Bankruptcy (1988) 19 FCR 149; 82 ALR 335; [1988] ANZ ConvR 585 (discussed above) and said (at at [21]–[22]) in respect of Re Boots;

Ex parte Official Receiver (1976) 12 ALR 427; 26 FLR 320: [21] The question in Boots’ case was whether, because the husband and wife were “joint debtors” (in consequence of their conduct of the partnership business), their jointly owned real property, though not partnership property, was to be included in their “joint estate” under s 110(1). In holding that that property was part of the joint estate, Riley J clearly proceeded on the premise that no severance of the joint tenancy resulted from the contemporaneous bankruptcy of the joint tenants. The dictum quoted above from Re Francis endorsed the correctness of that premise. In this matter I am being asked to deal directly with whether the Full Court’s dictum and the premise of Boots’ are correct. [22] I am satisfied that they are, while acknowledging that the concept of joint tenancy does not accommodate itself easily to the scheme of the Bankruptcy Act at least where the property held as joint tenants is not partnership property and the joint tenants are made bankrupt at the same [page 386] time. I exclude from this comment jointly owned partnership property for this reason. Such property will necessarily constitute part of joint estate on the winding up of the firm irrespective of whether the property co-owned is held by the partners as joint tenants or as tenants in common: cf Partnership Act 1891 (SA) s 2(1)(a), s 20. In the case of non-partnership co-owned property, it will only be capable of forming part of the joint estate of joint debtors if that co-ownership is as joint tenants. If the co-ownership is as tenants-in-common, the co-owner’s shares on their bankruptcy will form part of each’s separate estates.

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[81,800] Postponement of spouse’s claims 111 [s 111 rep Act 119 of 1987 s 42]

[81,805] Interest on debts 112 [s 112 rep Act 119 of 1987 s 42]

[81,810] Apprenticeship etc claims 113 (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(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. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

[81,815] Payment of liabilities etc incurred under terminated deed etc 114 (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; [page 387] (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. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Schs 1, 2, opn 1 Dec 2004]

(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. [subs (2) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 114 GENERALLY [81,815.5] Priority Liabilities, expenses or unpaid remuneration rank for payment with priority under s 109(1)(c) provided bankruptcy occurs within two months after the bankrupt’s deed or composition has been declared void, terminated or set aside. [81,815.10] Unpaid commitments “Commitments” must be limited to acts or engagements in the course of administration or realisation of the assets and cannot extend to admission of proofs of debt or the determination of the priority to which each such debt is entitled: Re Williams (1933) 6 ABC 40. Where a dividend was paid under a deed of arrangement but the debtor’s estate was subsequently sequestrated it was held that a dividend should be repaid into the estate and the creditor was required to prove again. The dividend did not constitute a “commitment” under the predecessor to this section: Re Levine (1942) 13 ABC 37. [81,815.15] Expenses incurred under void deed Where trustees under a creditors’ deed realised assets but the deed afterwards proved invalid and the debtor was made bankrupt, it was held that the trustees were not entitled to their costs and expenses of administrating the estate, the deed under which they acted being totally void: Smith v Dresser (1866) 35 Beav 378; 55 ER 942. Where a purported deed was void ab initio because it could never answer the description of being a deed under the Act, it was held that payment of the fees and expenses of and incidental to the purported deed of arrangement were not provable in the bankruptcy. The deed had not received the requisite assent of the creditors and accordingly neither the debtor nor the creditors were bound by it and the trustee acquired no lawful right or authority under it: Re Turnour (1961) 19 ABC 72.

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*Subdivision B — The effect of proceeds of crime orders and applications for proceeds of crime orders [Subdiv B insrt Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

[81,820] The effect of proceeds of crime orders 114A (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. [page 388] (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.

[81,825] The effect of applications for proceeds of crime orders 114B (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.

[81,830] Director of Public Prosecutions or Commissioner of the Australian Federal Police

must notify the trustee of certain matters 114C 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. [s 114C am Act 174 of 2011 s 3 and Sch 2[145], opn 1 Jan 2012]

DIVISION 3 — PROPERTY AVAILABLE FOR PAYMENT OF DEBTS Subdivision A — General [Subdiv A insrt Act 57 of 2007 s 3 and Sch 1[3], opn 28 July 2006]

[81,855] Commencement of bankruptcy 115 (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. [subs (1) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 389] (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. [subs (1A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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. [subs (1B) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(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 Time to which bankruptcy has debtor’s petition was presented relation back and time of or accepted commencement of bankruptcy 1 Petition accepted by the Official Time specified by the Court as the Receiver under a direction of the commencement of the bankruptcy Court 2

Petition presented when at least one creditor’s petition was pending against the petitioning creditor (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

Time of commission of the earliest

creditor’s petitions were pending act of bankruptcy within the 6 but the debtor had committed at months before the petition was least one act of bankruptcy in the presented past 6 months, and accepted by the Official Receiver without a direction from the Court 4

Petition presented when no Time of presentation of the petition 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

[subs (2) subst Act 44 of 1996 s 3 and Sch 1]

(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. [page 390] SECTION 115 GENERALLY [81,855.5] Interrelationship with other sections “The commencement of the bankruptcy” is defined in s 5 to refer to the date upon which the bankruptcy is deemed by s 115 to have commenced. Section 115 provides that the bankruptcy of a person shall relate back to the time of the commission of the earliest act of bankruptcy within a period of six months before the presentation of the petition by virtue of which the person became bankrupt. Section 120 provides in relation to settlements that time shall be computed from “the commencement of the bankruptcy”. For the purposes of s 116, in determining the property divisible amongst creditors the reference point is the property belonging to or vested in the bankrupt at “the commencement of the bankruptcy”. Note that certain classes of property are excluded by virtue of s 116: Re Iskenderian; Ex parte Iskenderian Bros Pty Ltd (1989) 21 FCR 363; 87 ALR 294. [81,855.10] Effect of commission of act of bankruptcy Any interest in assets becomes, upon the commission of an act of bankruptcy, no longer an absolute interest but is contingent on no bankruptcy petition being presented within 6 months of the date of the act of bankruptcy which leads to a sequestration order being made. If the sequestration order is made the whole of the assets of the debtor vest in the debtor’s trustee as from the date of the act of bankruptcy, provided it was the earliest act of bankruptcy in the 6 months before the presentation of the petition. Note the position where the bankruptcy results from a debtor’s petition, but the commencement of the bankruptcy dates from the earliest act of bankruptcy committed within the 6 months before presentation of a creditor’s petition.

Lord Esher MR observed in Re Pollitt; Ex parte Minor [1893] 1 QB 455 at 457: The title of the trustee in the subsequent bankruptcy related back to that act of bankruptcy. What does that mean? The result of the relation back is, that all subsequent dealings with the debtor’s property must be treated as if the bankruptcy has taken place at the moment when the act of bankruptcy was committed. The debtor must be considered as having become a bankrupt the moment the deed was executed. Then, he being a bankrupt, all the money which he then had, and all the money which was owing to him, passed to the trustee in the bankruptcy for the purpose of being distributed by him amongst the bankrupt’s creditors. Where a person commits an act of bankruptcy, that person is not entitled to deal with his or her estate. He or she has no right to gather it in if not already in his or her hands or to make payment to his or her creditors out of that which he or she has actually at his or her command. He or she can give no good discharge to a debtor who pays him or her with notice of the act of bankruptcy, because the debt made by subsequent bankruptcy proceedings will be turned into a debt due to his or her trustee, and not to himself or herself: Ponsford, Baker & Co v Union of London and Smith’s Bank Ltd [1906] 2 Ch 444. See also Radio Corp Pty Ltd v Bear (1961) 108 CLR 414 at 422; [1962] ALR 42. [81,855.20] Transactions protected against relation back to doctrine See ss 123 and 124. See also Tailby v Official Receiver (1888) 13 App Cas 523. [81,855.25] Section 218 notice and relation back In Deputy Commissioner of Taxation v Donnelly (1989) 25 FCR 432; 89 ALR 232; 89 ATC 5071, the court held that a notice under s 218 of the Income Tax Assessment Act 1936 acted as a charge so that as and when moneys became due and payable to the debtor the charge created by the notice crystallised so that the doctrine of the relation back had no application.

____________________ *Editor’s note: Schedule 4 cl 16 of the Proceeds of Crime (Consequential Amendments and Transitional Provisions) Act 2002 No 86 provides as follows: “Application — existing bankruptcies 16 Subdivision B of Division 2 of Part VI of the Bankruptcy Act 1966 applies, in relation to: (a) a proceeds of crime order; or (b) an application for a proceeds of crime order; made after the commencement of this Schedule, to any bankruptcy, even if the date of bankruptcy is before that commencement.”

[page 391]

[81,860] Property divisible among creditors *116 (1) Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and (b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; and (c) property that is vested in the trustee of the bankrupt’s estate by or under an order under section 139D or 139DA; and (d) money that is paid to the trustee of the bankrupt’s estate under an order under section 139E or 139EA; and is property divisible amongst the creditors of the bankrupt. [subs (1) am Act 119 of 1987 s 43; Act 44 of 1996 s 3 and Sch 2; Act 33 of 2006 s 3 and Sch 1[4], [5], opn 31 May 2006]

(2) Subsection (1) does not extend to the following property: (a) property held by the bankrupt in trust for another person; (b) the bankrupt’s household property that is: (i) of a kind prescribed by the regulations; or (ii) identified by a resolution passed by the creditors before the trustee realises the property; (ba) personal property of the bankrupt that: (i) has sentimental value for the bankrupt; and (ii) is of a kind prescribed by the regulations; and (iii) is identified by a special resolution passed by the creditors

(c)

(ca)

(d)

before the trustee realises the property; the bankrupt’s property that is for use by the bankrupt in earning income by personal exertion and: (i) does not have a total value greater than the limit prescribed by the regulations; or (ii) is identified by a resolution passed by the creditors; or (iii) is identified by an order made by the Court on an application by the bankrupt; property used by the bankrupt primarily as a means of transport, being property whose aggregate value does not exceed the amount prescribed by the regulations or, if before the trustee realises the last-mentioned property the creditors determine by resolution a greater amount in relation to that property, that greater amount; subject to sections 128B, 128C and 139ZU: (i) policies of life assurance or endowment assurance in respect of the life of the bankrupt or the spouse or de facto partner of the bankrupt; (ii) the proceeds of such policies received on or after the date of the bankruptcy; [page 392] (iii) the interest of the bankrupt in: (A) a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); or (B) an approved deposit fund (within the meaning of that Act); or (C) an exempt public sector superannuation scheme (within the meaning of that Act); (iv) a payment to the bankrupt from such a fund received on or after the date of the bankruptcy, if the payment is not a pension within the meaning of the Superannuation Industry (Supervision) Act 1993;

(e) (f) (fa) (g)

(iva) a payment to the bankrupt under a payment split under Part VIIIB of the Family Law Act 1975 where: (A) the eligible superannuation plan involved is a fund or scheme covered by subparagraph (iii); and (B) the splittable payment involved is not a pension within the meaning of the Superannuation Industry (Supervision) Act 1993; (v) the amount of money a bankrupt holds in an RSA; (vi) a payment to a bankrupt from an RSA received on or after the date of the bankruptcy, if the payment is not a pension or annuity within the meaning of the Retirement Savings Accounts Act 1997; (vii) a payment to the bankrupt under a payment split under Part VIIIB of the Family Law Act 1975 where: (A) the eligible superannuation plan involved is an RSA; and (B) the splittable payment involved is not a pension or annuity within the meaning of the Retirement Savings Accounts Act 1997; [repealed] [repealed] [repealed] any right of the bankrupt to recover damages or compensation: (i) for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; or (ii) in respect of the death of the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person;

Note: See also subsection 5(6).

(h) (k)

[repealed] amounts paid to the bankrupt under a rural support scheme

(l)

(m) (ma)

prescribed for the purposes of this paragraph; amounts paid to the bankrupt under a rural support scheme prescribed for the purposes of this paragraph, where the amounts are paid in circumstances prescribed for the purposes of this paragraph; prescribed amounts paid to the bankrupt under a rural support scheme prescribed for the purposes of this paragraph; prescribed amounts paid to the bankrupt under a rural support scheme prescribed for the purposes of this paragraph, where the amounts are paid in circumstances prescribed for the purposes of this paragraph; [page 393]

(mb)

amounts paid to the bankrupt by the Commonwealth as compensation in relation to the loss of: (i) an amount covered by paragraph (k), (l), (m) or (ma); or (ii) property purchased or acquired wholly or partly with such an amount; (mc) [repealed] (mca) [repealed] (mcb) [repealed] (md) [repealed] (n) property to which, by virtue of subsection (3), this paragraph applies; (p) amounts paid to the bankrupt under subsection (2C) or (4); (q) any property that, under an order under Part VIII of the Family Law Act 1975, the trustee is required to transfer to the spouse, or a former spouse, of the bankrupt; (r) any property that, under an order under Part VIIIAB of the Family Law Act 1975, the trustee is required to transfer to a former de facto partner of the bankrupt. [subs (2) am Act 12 of 1980; Act 168 of 1986 s 3; Act 119 of 1987 s 43; Act 115 of 1990 s 17; Act 143 of 1992 s 3 and Sch; Act 82 of 1993 s 7; Act 84 of 1994 s 90; Act 44 of 1996 s 3 and Sch 1, 2; Act 62

of 1997 s 3 and Sch 3; Act 179 of 1997 s 3 and Sch 2; Act 38 of 1999 Sch 1; Act 22 of 2000 s 3 and Sch 2; Act 144 of 2000 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 20 of 2005 s 3 and Sch 1, opn 18 Sep 2005; Act 57 of 2007 s 3 and Sch 1[3], opn 28 July 2006; Act 15 of 2007 s 3 and Sch 3[1], opn 1 July 2007; Act 144 of 2008 s 3 and Sch 2[22], opn 10 Dec 2008; Act 115 of 2008 s 3 and Sch 2[12] and [13], opn 1 Mar 2009]

(2A) [subs (2A) rep Act 44 of 1996 s 3 and Sch 1] (2B) Where, because of a resolution passed by the creditors, or an order made by the Court, under paragraph (2)(b), (c) or (ca), property that is vested in the trustee ceases at a particular time to be property divisible among the creditors, then, immediately after that time: (a) the property revests in the bankrupt; (b) the trustee is discharged from the trustee’s liabilities in respect of the property; and (c) the bankrupt becomes subject to those liabilities. [subs (2B) insrt Act 119 of 1987 s 43; am Act 44 of 1996 s 3 and Sch 1]

(2C) Where: (a) property used by the bankrupt primarily as a means of transport is vested in the trustee; and (b) as at the time when the trustee realises that property: (i) no other property has remained vested in the bankrupt by virtue of paragraph (2)(ca); and (ii) no other property has, because of a determination by the creditors under paragraph (2)(ca), revested in the bankrupt by virtue of subsection (2B); the trustee shall pay to the bankrupt so much of the proceeds of realising that property as, when added to the aggregate of the amounts (if any) that the trustee has previously paid to the bankrupt under this subsection, does not exceed the prescribed amount within the meaning of paragraph (2)(ca). [subs (2C) insrt Act 119 of 1987 s 43]

(2D) In subsections (3) and (4): exempt loan money, in relation to a particular time, means so much of the principal sum of a loan to the bankrupt, or to the bankrupt and another person or other persons, as was repaid, before that time, out of exempt money. [page 394]

exempt money means money of any of the following kinds: (a) an amount to which subsection (1) does not extend because of subparagraph (2)(d)(ii) or (iv); (b) damages or compensation of a kind referred to in paragraph (2)(g); (c) amounts covered by paragraph (2)(k), (l), (m), (ma) or (mb). [def am Act 22 of 2000 s 3 and Sch 2]

outlay, in relation to property, in relation to a particular time, means all of the following: (a) the money paid for the purchase, or used in the acquisition, of the property; (b) the money paid before that time in respect of the extensions, alterations and improvements, if any, of the property constructed or made since that purchase or acquisition. protected money, in relation to a particular time, means: (a) exempt money; or (b) exempt loan money in relation to that time. [subs (2D) insrt Act 119 of 1987 s 43; am Act 82 of 1993 s 7; Act 84 of 1994 s 90; Act 179 of 1997 s 3 and Sch 2]

(2E) Nothing in this Act or the Legislative Instruments Act 2003 prevents regulations made for the purposes of paragraph (2)(k), (l), (m) or (ma) from applying to amounts paid before the regulations take effect. (2F) Regulations made for the purposes of paragraph (2)(k), (l), (m) or (ma) may make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time. (3) Where, at any time, the whole, or substantially the whole, of the money paid for the purchase, or used in the acquisition, of particular property is protected money, paragraph (2)(n) applies to the property. [subs (3) subst Act 119 of 1987 s 43; am Act 84 of 1994 s 90]

(4) Where, as at the time when the trustee realises particular property to which paragraph (2)(n) does not apply, the outlay in relation to the property is in part protected money and in part other money, the trustee shall pay to the bankrupt so much of the proceeds of realising the property as can fairly be attributed to that protected money.

[subs (4) subst Act 119 of 1987 s 43]

(5) [subs (5) rep Act 15 of 2007 s 3 and Sch 3[2], opn 1 July 2007] (6) [subs (6) rep Act 15 of 2007 s 3 and Sch 3[2], opn 1 July 2007] (7) [subs (7) rep Act 15 of 2007 s 3 and Sch 3[2], opn 1 July 2007] (8) [subs (8) rep Act 15 of 2007 s 3 and Sch 3[2], opn 1 July 2007] (8A) [subs (8A) rep Act 15 of 2007 s 3 and Sch 3[2], opn 1 July 2007] (9) [subs (9) rep Act 15 of 2007 s 3 and Sch 3[2], opn 1 July 2007] SECTION 116 GENERALLY [81,860.5] Right to administer deceased estate as property Under s 116(1) a chose in action to compel the due administration of a deceased estate is “property” for the purposes of that section, and it follows that after that property vests in the trustee then the trustee will have the right to enforce it and to receive the proceeds, if any, and notwithstanding the prior discharge from bankruptcy of the bankrupt. However, that is not by itself an adequate description of how the cases work and it is necessary to consider, in particular, Silvia v Thomson (1989) 87 ALR 695 in more detail. The principles set out In Official Receiver v Schultz (1990) 170 CLR 306; 96 ALR 327, the case where the principle was accepted by the High Court, the facts were that the deceased died leaving [page 395] certain property. The beneficiary was afterwards discharged. The question was whether the interest under the will formed part of her bankrupt estate. The official receiver claimed that the estate vested in him to be used to meet demands of the creditors. The official receiver, to justify his claim, needed to indicate some interest in the property which vested in Mrs Schultz prior to her discharge from bankruptcy, and, in fact, the property concerned vested in the executor. The court cited Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12; [1965] AC 694; [1965] ALR 803 in support of the proposition that the interest in the course of administration was a chose in action, being the right to administer, which attached to the official receiver by virtue of the bankruptcy. The case that set out the principle first and which the later cases draw upon is Silvia v Thomson, above. In that case, as in most jurisdictions in Australia the chose in action accrued to the beneficiary by virtue of a statute, namely, s 61 of the Wills, Probate and Administration Act 1898 (NSW). From the date of death until probate was taken out, the real and personal property of the testatrix vested in the Public Trustee of New South Wales by virtue of that statute. The right to have the estate property administered arose on the testatrix’s death and was enforceable against the Public Trustee, although by the time the application was made the applicant had been discharged. That right, upon the grant of probate, was transmuted to a right against the executor, but the right arose or accrued before the date of discharge, namely, upon the death of the testatrix and the elements which constituted that right crystallised at that time. That principle, in turn, operated from Sheppard J in Re Pevsner; Ex parte Official Trustee in Bankruptcy (1983) 68 FLR 254. The effect of a discharge from bankruptcy is to release the bankrupt from all debts provable in the bankruptcy (see s 153), but the trustee remains trustee of the former bankrupt’s property which remains available for realisation and distribution among the creditors. Nor does the discharge release the bankrupt from the obligation to give all due assistance to the trustee of the estate, and s 152 expressly provides that a discharged bankrupt shall,

notwithstanding his or her discharge, give such assistance as the trustee reasonably requires in the realisation and distribution of such of his or her property as is vested in the trustee. Discretionary considerations The appointment is, however, conditional and in the discretion of the court. Furthermore, the right to substitute the trustee requires that that trustee should be a fit and proper person to carry on the administration. In Uniting Church in Australia Property Trust (NSW) v Millane [2002] NSWSC 1070; BC200206946 at [8] Windeyer J observed: I should add to this that if the defendant were to misconduct himself as an executor then he could be removed. If he did not consent to the other executors bringing proceedings against him on behalf of the estate, then there is no doubt that the court would allow proceedings to be brought by the other executors or by the beneficiaries on behalf of the estate, if those executors refused to bring appropriate proceedings. So the court retains the power to determine the operation of the chose in action. The trustee gains no interest greater than the bankrupts and is subject to the same considerations. See also Monty Financial Services Ltd v Delmo [1996] 1 VR 65. Time for operation It will be observed that there is a narrow timeframe for the operation of s 153. The interest must devolve on the bankrupt at some stage during his or her bankruptcy. If subsequent proceedings shift that boundary, as did the decision of French J in Macchia v Nilant (2001) 110 FCR 101; [2001] FCA 7; BC200100006, this might have the effect of determining the trustee’s right. [81,860.8] Subject to equities — s 116(2)(a) See Re Goode; Ex parte Mount (1974) 4 ALR 579; 24 FLR 61; Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd (1994) 49 FCR 334; 121 ALR 626; 12 ACLC 364; BC9405684. In Clout (Trustee) v Anscor Pty Ltd [2003] FCA 326; BC200301682 at [44] Drummond J held that: … property of a bankrupt which, by force of s 116 [of] the Bankruptcy Act, vests in the trustee in bankruptcy, includes property in respect of which third parties have only equitable charges. That property vests in the trustee as property of the bankrupt, but subject to the equitable interests of the chargees. [page 396] See also [81,884.1]. In Jones v Southall & Bourke Pty Ltd [2004] FCA 539; BC200402346, Crennan J considered whether restitution of goods by a thief could be regarded as trust property. Her Honour held at [56]: [56] … The function of the court in such circumstances is to declare that a trust arose in the past as has been clearly done on a number of occasions concerning stolen money in the hands of a thief. See Australian Postal Corp v Lutak (1991) 21 NSWLR 584; Zobory v Federal Commissioner of Taxation (1995) 64 FCR 86; Fowkes v Deputy Director of Prosecutions [1997] 2 VR 506. Following certain statements quoted at [60] from Scott v Scott (1963) 109 CLR 649 at 660; [1964] ALR 946; (1963) 37 ALJR 345; BC6300470 and Muschinski v Dodds (1985) 160 CLR 583 at 615; 62 ALR 429, her Honour concluded at [62]: [62] As these extracts from the authorities make plain, the term ‘constructive trust’ covers both trusts arising by operation of law and remedial trusts. Furthermore, a constructive trust may give rise to either an equitable proprietary remedy based on tracing or, whether based on or

independently of tracing, an equitable personal remedy to redress unconscionable conduct. The equitable personal remedies include equitable lien or charge or a liability to account. The difference between an equitable proprietary remedy and an equitable personal remedy, is that a constructive trust giving rise to an equitable proprietary remedy gives the beneficiary an ‘ownership’ interest in the property whereas personal remedies, such as an equitable lien or charge, give the beneficiary ‘a security interest’: R P Meagher and W M C Gummow, Jacobs’ Law of Trusts in Australia, 6th edn, Butterworths, 1997, pp 736–740; R P Meagher, J D Heydon and M J Leeming, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies, 4th edn, Butterworths, 2002, pp 200–210; A W Scott and W F Fratcher, The Law of Trusts, 4th edn, Little Brown and Company, 1989, Vol V, §462. In the remedial context, it is for the court to choose the most appropriate remedy: see Giumelli v Giumelli (1999) 196 CLR 101; Warman International Ltd v Dwyer (1995) 182 CLR 544 … The application of these principles had been considered in Stephenson Nominees Pty Ltd v Official Receiver (1987) 16 FCR 536; 76 ALR 485 at 501–6 and Cashflow Finance Pty Ltd (in liq) v Westpac Banking Corp [1999] NSWSC 671; BC9904226. Tracing stolen property through assets acquired through a mixed fund was not possible on the evidence, which required such cases as Attorney-General (Hong Kong) v Reid [1994] 1 AC 324; [1994] 1 NZLR 1. Nonetheless, applying National Australia Bank Ltd v Rusu [2001] NSWSC 32; BC200100217 at [1]–[5], his Honour was of the opinion that it was possible to draw an inference as to the source of the acquired goods. Readers will find Jacobson J’s decision in Parianos v Melluish (Trustee) (2003) 30 Fam LR 524; (2003) FLC ¶93-130; [2003] FCA 190; BC200300854 useful both for its economical and elegant summary of the principles and for its consideration of the contrary arguments that are sometimes put forward in such cases. Trusts based on oral evidence The condition of bankruptcy, or its threat, often inspire the creation of trusts based upon uncontradicted evidence of witnesses. Such evidence may be true or false. The court is not obliged or required to accept such evidence. An example is Re Hope; Ex parte Carter (1985) 59 ALR 609; [1985] ANZ ConvR 279 where Spender J expressed this view of uncontradicted evidence reached between a bankrupt concerning a common intention: Uncontradicted evidence was sometimes given this operation in the older cases but the position is that a court in an appropriate case is not obliged to accept such evidence: see Cole v Commonwealth [1962] SR (NSW) 700; Taylor v Ellis [1956] VLR 457; and Re Gear (Deceased) [1964] Qd R 528 at 535 of that last case, Hart J said: Whether uncontradicted testimony should be accepted or not in my opinion must depend on all the circumstances of the case including its inherent probability and the possibility of calling evidence in denial. In Fletcher v George [2011] FMCA 553; BC201105681 Burnett FM considered among many examples of the principle, the above case. The court, in such cases, will look to other rate principles [page 397] such as those relating to the need to execute a registerable transfer as expressed in such cases as Cope v Keene (1968) 118 CLR 1; [1969] ALR 57; (1968) 42 ALJR 169; BC6800230 per Kitto CJ at [7]–[8]. Certainly, if such a situation arises consideration of Fletcher v George would repay perusal. [81,860.9] Damages and right to recover same — s 116(2)(g) In Re Iskenderian; ex parte

Iskenderian Bros Pty Ltd (1989) 21 FCR 363; 87 ALR 294, Neaves J traced the history of this subsection (at p 370): … the 1924 Act did not protect the proceeds of a personal injuries action from being divisible as part of the bankrupt’s estate: Union Fidelity Trustee Company of Australia Ltd v Dodds (1967) 10 FLR 111. This position was ameliorated by the 1966 Act, which introduced s 116(2)(g) and the 1980 amendments which introduced ss 116(2)(n), (3) and (4). These latter provisions were further amended in 1987. His Honour concluded (at p 370): That history indicates an intention on the part of the legislature progressively to limit, in the event of supervening bankruptcy, the property available for distribution amongst the bankrupt’s creditors with a consequential expansion of the property which a bankrupt may retain for his own benefit. The relevant provisions, therefore, are to be construed, within the limits which the language used will allow, so as to give effect to that evident intention. The language of s 116(3), however, when read with the definition set out in s 116(2D), gives rise to some difficulties stemming, perhaps, from the desire of the draftsman to deal in the one short subsection with a number of diverse situations. This decision was followed in Re Manivilovski; ex parte Official Trustee in Bankruptcy (1993) 45 FCR 358; 117 ALR 537; and approved by the Full Court in Turner v Official Trustee in Bankruptcy (1996) 71 FCR 418; BC9605985 at 422 and by the Federal Magistrates Court in Foyster v Prentice [2008] FMCA 757; BC200804562. Western Australians will note with particular interest the decision of Nicholson J in Re Jemielita; ex parte Official Trustee in Bankruptcy (1996) 63 FCR 141; BC9600305. There is a particularly useful examination of French J, then of the Federal Court in Re Heenan; Ex parte Collins (t/as Hertz Carnarvon Auto Rentals) v Official Receiver (1992) 39 FCR 428; 116 ALR 146; BC9203809. In Farley v Official Trustee in Bankruptcy [2011] FMCA 10; BC201100055 Lindsay FM followed and applied that case, adopting the summary of the principles set out in an article, D A Hassall “Annulment of Bankruptcy and Review of Sequestration Orders” (1993) 67 ALJ 761, as follows, and then added some observations of principle of his own: In the recent case of Re Heenan; Ex parte Collins, an application for annulment brought by a creditor was refused by French J in a case where an insolvent person in receipt of damages for personal injuries presented a debtor’s petition which, by virtue of s 116(2)(g) of the Act, had the effect of protecting the award of damages. It was held that as the petition was, in the circumstances, neither a fraud upon the creditors nor an abuse of process, but merely an avenue properly and legitimately open to a debtor who was insolvent, annulment should be refused. French J reviewed the authorities relating to annulment in this type of case, including, inter alia, Re Mottee, Clyne v Deputy Cmr of Taxation (Cth) and Re Moncada. However, his Honour also went on to examine in detail the policy underlying the exception to vesting created by s 116(2)(g) of the Act and the origin thereof, referring in particular to what James LJ said in Ex parte Vine; Re Wilson, a passage cited with approval by Dixon J in Isaacs v McKinnon. French J referred to the “tracing” amendments made to the Act in 1980 and 1987 extending the exemption in s 116(2)(g) as evincing a “strong legislative policy in favour of the exemption” such that “it cannot be said … that an insolvent debtor who takes advantage of that exemption by filing a debtor’s petition does so for a purpose which is foreign to the bankruptcy law.” Lindsay FM summarised the position at [15]: [15] The provisions of the Act, as French J described in Re Heenan; Ex parte Collins (t/as Hertz Carnarvon Auto Rentals) v Official Receiver (above) mirror the longstanding common law

[page 398] position that the protection which is afforded extends to rights of action “whether damages are to be estimated by immediate reference to pain felt by the bankrupt in respect of his body, mind or character: Beckham v Drake (1849) 2 HLC 579 at 604; 9 ER 1213 at 1222 (Erle J)” (see Re Heenan; Ex parte Collins (t/as Hertz Carnarvon Auto Rentals) v Official Receiver (above) at 432). An important decision that deals with the rights to recover damages and compensation, particularly under the Trade Practices Act 1974, is Rogers v Asset Loan Co Pty Ltd [2006] FCA 1708; BC200610301, a decision of Collier J. The main question was whether a tortious claim was expressed in a way that a duty was owed to the bankrupt personally or to his estate in bankruptcy. It was necessary for His Honour to consider each of the claims exhaustively and to conclude into which category each fell. That exercise is useful for others confronted with such matters. The applicant lacked standing to pursue claims other than those which were clearly in respect of a personal injury or wrong done to the bankrupt or his family and such claims as remained were not particularised: at [134]. His Honour therefore concluded that the statement of claim disclosed no cause of action and no part of it could be salvaged. [81,860.10] Section 116(1)(a) — rights under the Family Law Act Subsequent orders under matrimonial legislation will not affect the title of the trustee in bankruptcy once property has vested in him or her: Re Bedford: Ex parte Official Receiver (1968) 12 FLR 309; Re Mottee; Ex parte Mottee v Official Receiver (1977) 16 ALR 129; 29 FLR 406; Re Trigg; Ex parte Trigg v Official Receiver (1978) 25 ALR 207; Luxton v Luxton [1968] VR 540; [1969] ALR 93; (1968) 12 FLR 382. The Family Court of Australia has no power to make orders in relation to the trustee under s 78 of the Family Law Act, as he or she will not be considered a party to the marriage within the meaning of the section: Holley v Holley (1982) FLC ¶91-257. Current Family Court judgments seem generally to preserve and protect the interests of creditors, but creditors might still prefer to litigate their claims in traditional (debt recovery and bankruptcy) jurisdictions. If proceedings in such other jurisdictions are still outstanding when a debtor or his or her spouse invokes the jurisdiction of the Family Court, those proceedings might be amenable to crossvesting to the Family Court under s 35A of the Bankruptcy Act 1966 or s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). See for example Re Kocijan (1991) 14 Fam LR 747; (1991) FLC ¶92230, Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131; 19 Fam LR 710 and Re Boscolo; Ex parte Botany Council (1996) 62 FCR 397; 136 ALR 623. Compare In the Marriage of Donovan (1992) FLC ¶92-276, where the Official Trustee failed in an application for transfer by the Family Court to the Federal Court of its challenge under s 79A of the Family Law Act 1975 to an earlier property adjustment order unopposed by the near-bankrupt husband. Query whether the s 79A application was necessary or desirable. [81,860.11] The declaration and adjustment of the property rights of the insolvent spouse Family Law Act changes Since the enactment of Pt VIIIAA of the Family Law Act 1975 took effect from 17 December 2004 s 90AE grants power to the Family Court to alter the substantive rights of third parties. “Third party” now means “a person who is not a party to the marriage”. This is an expansive definition, and “does not necessarily depend upon the existence of a direct legal or other relationship between the parties to a marriage and a third party. The relationship of third party may arise as a consequence of an order made [under the new provisions] and not just because of a pre-existing legal relationship between the parties.” The definition of “marriage” is also expanded to include void marriages. The section enables the Family Court to substitute one party to the marriage for another in relation to

a debt, limit the liability of one party under a debt to a third party creditor, or direct a company director to register a transfer of shares from one party to a marriage to the other. The powers conferred on the Family Court under this provision are extremely wide and go far beyond merely rearranging debts. In theory these new provisions could have a revolutionary effect because the new amendments throw open the principles of such cases as Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; 33 ALR 631; BC8100055, but many of the guiding considerations of this case in particular still [page 399] operate even in the changed regime. We will be carefully watching the recent cases in the Family Court to monitor the changes and to see what remains of the old certainties. A very useful and comprehensive paper by Katja Levy, then a Senior Associate of Freehills and now a member of the Western Australian Bar, and which is available on the Freehills website http://www.freehills.com. This is her conclusion as to the safeguard provisions in the legislation: she considers that the Family Court is likely to interpret the provisions conservatively: The safeguard provisions are contained in ss 90AE(3) and 90AF(3) and apply to orders and injunctions respectively. The sections provide that the Family Court may only interfere with third party property interests if: it is reasonably necessary to effect a division of property between the parties to the marriage; it is not foreseeable that the interference would result in the debt not being paid in full; the third party has been accorded procedural fairness; it is just and equitable; and the following matters are taken into account: the taxation effect; the third party’s administrative costs; the capacity of a party to the marriage to repay the debt after the order/injunction is made; the economic, legal or other capacity of the third party to comply with the order/injunction; any other matters raised by granting procedural fairness to the third party or other matters the Family Court considers relevant. Ms Levy considers that remarks like those of Kirby J in Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 426; 155 ALR 614; [1998] HCA 48; BC9803588 (citing the House of Lords in Barclays Bank plc v O’Brien [1993] QB 109; [1992] 4 All ER 983; [1992] 3 WLR 593) raise matters that cannot be avoided in the future interpretation of the provisions: … Because of the recognition by society of the equity of the sexes, the majority of matrimonial homes are now in the joint names of both spouses. Therefore in order to raise finance for the business enterprises of one or other of the spouses, the jointly owned home has become a main source of security. The provision of such security requires the consent of both spouses … It is easy to allow sympathy for the wife who is threatened with the loss of her home at the suit of a rich bank to obscure an important public interest viz, the need to ensure that the wealth currently tied up in the matrimonial home does not become economically sterile. If the rights secured to wives by the law renders vulnerable loans granted on the security of matrimonial homes, institutions will be unwilling to accept such security, thereby reducing the flow of loan capital to business enterprises. It is therefore essential that a law designed to protect the vulnerable does not render

the matrimonial home unacceptable as security to financial institutions. [emphasis added] She then refers to the restraints that operate on the Family Court: Although the new provisions set out certain pre-conditions to the exercise of power, there are only three limits to the substantive power of the Family Court to alter the rights, liabilities and property interests of third parties. The first limitation is that the Family Court can only make such an order where it is “reasonably necessary, or reasonably appropriate and adapted” to effect a division of property between the parties to a marriage. Altobelli suggests that the requirement for the order to be “reasonably appropriate and adapted” is a “main purpose rule; that is, the main purpose of making the order or injunction against the third party is to effect a division of property that is just and equitable.” He suggests that implicit in this factor is a requirement not to interfere with third party rights where it is not absolutely necessary. However, St John states: How rigorously will “reasonably necessary” and/or the terms “reasonably appropriate” be interpreted? Further, must it be “reasonably appropriate” or “reasonably necessary” as between the parties, or to the situation of the affected third party, or to a combination of all. In other words, all the protection really means is that the exercise of power cannot be arbitrary. [page 400] The second limitation is that the section requires that any alteration of the rights, liabilities or property interests of a third party be “in relation to the marriage.” This limitation was required to bring the power within the ambit of the marriage power in the Constitution. The third, and perhaps most effective limitation is that the third party must be accorded procedural fairness. Procedural fairness requires that the person against whom the order is sought needs to be served with the process, be named as a party, have the opportunity to be heard, and be able to call evidence and test the evidence brought against them.” That is, a third party who is accorded procedural fairness has all the rights and obligations of a party to the proceedings. Courts exercising jurisdiction under the Bankruptcy Act 1966 (Cth) have power (s 30 together with various sections, for example, s 120) to declare rights in rem in respect of property the subject of proceedings under that Act. Likewise, courts exercising jurisdiction under the Family Law Act 1975 (Cth) have power (s 78) to declare rights in rem of a party to a marriage in respect of property in proceedings between the parties to a marriage. Of course, any person capable of being prejudiced by a declaration sought in any such proceeding should be properly notified or joined. See, for example, Lanceley v Lanceley (1994) 18 Fam LR 71; (1994) FLC ¶92-491. Statutory rights conferred upon a spouse in respect of claims to an adjustment of matrimonial property do not vest in the trustee of a bankrupt spouse. Although “a right to make an application under s 161 of the Marriage Act 1958 (as amended by Victorian Act No 6924) is a right personal to the wife which did not pass upon the sequestration of her estate to the official receiver, nevertheless her proprietary or contractual right in respect of the subject land … did vest in the official receiver”: Luxton v Luxton [1968] VR 540 at 545; [1969] ALR 93; (1968) 12 FLR 382. The same reasoning applies to claims by a spouse under s 79 of the Family Law Act, and claims by a “de facto partner” under s 279 of the Property Law Act 1958 (Vic). Conversely, the spouse of a bankrupt may not recover, by means of the provisions of such statutes, property vested in the trustee in bankruptcy: Re Bedford: Ex parte Official Receiver (1968) 12 FLR 309; Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; 33 ALR 631. See also Corke v Corke

(1994) 48 FCR 359; 121 ALR 320, a decision of the Full Court of the Federal Court on appeal from Rourke J of the Family Court. The proprietary and contractual rights inter se of spouses and de facto spouses have been the subject of extensive judicial consideration. A useful starting point is the decision of Marks J in McMahon v McMahon [1979] VR 239, where his Honour declined to order removal of a spouse’s caveat and referred to several subcategories of non-statutory beneficial interests in land that are often involved in the “common intention” and related cases. The relevant heads under which the authorities might be reviewed appear to be these: (1) Rights to property “adjustment” (see above) conferred by statute. These must be contrasted with rights to have existing property interests declared or enforced and with rights to maintenance: Sanders v Sanders (1967) 116 CLR 366 at 380. (2) A resulting or implied trust will be “presumed” (in the absence of actual agreement or intent and unless the “presumption of advancement” applies) in favour of contributors of purchase money. That presumption will be rebutted by proof of actual intention. (3) Common intention may be proved by evidence of actual intention or “inferred from the conduct of the parties. But what is to be enforced is an actual intention, inferred as a matter of fact, not an imputed intention which the parties never had but would have had, if they had applied their minds to it”: McMahon v McMahon, above, at 244 per Marks J. A trust is “constructed” to give effect to the common intention. The remedy of the constructive trust is not apt in the context of enforcement of an actual, albeit inferred, agreement: compare Muschinski v Dodds (1985) 160 CLR 583 at 614; 62 ALR 429 at 451 per Deane J. (4) A constructive trust will arise if it would be a fraud for one spouse to assert exclusive beneficial interest. Such a trust will be imposed, without regard to the intention of the parties, in order to satisfy the demands of justice and good conscience. Semble, the person whose legitimate expectation of a beneficial interest has been, or stands to be, frustrated [page 401] must have suffered detriment in reliance on the expectation. However, in Baumgartner v Baumgartner (1987) 164 CLR 137; 76 ALR 75, the element of detriment was not regarded as essential. Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, ie a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such — not, for example, as a loan … the presumption [of advancement] arises when a husband makes a purchase in the name of his wife, or a father in the name of his child or other person to whom he stands in loco parentis …: Calverley v Green (1984) 155 CLR 242 at 246–7; 56 ALR 483 at 485–6 per Gibbs CJ. The presumption of advancement does not arise in respect of de facto spouses: Napier v Public Trustee

(1982) 32 ALR 153. In Calverley v Green, above, it was found that “the evidence negatives an intention on the part of the appellant to confer a beneficial interest on the respondent and it does not reveal that the respondent had an actual intention that the land should be held beneficially by the appellant in any greater proportion than that in which he had contributed to the purchase price …The result in my opinion is that the evidence is sufficient to rebut a presumption of advancement, but not sufficient to rebut the presumption of a resulting trust … [T]he extent of the beneficial interests of the respective parties must be determined at the time when the property was purchased and the trust created. The fact that the mortgage debt was repaid by the appellant is therefore not relevant in determining the extent of the interests of the parties in the land, although it may be relevant on an equitable accounting between the parties. The parties each contributed $9000 of the amount borrowed, and it appears that the remainder of the price, $9250, was provided by the appellant, although the evidence on that point is unsatisfactory and there is no distinct finding on the question”: per Gibbs CJ, CLR at 252; ALR at 489–90. In their joint judgment in the same case, Mason and Brennan JJ said (CLR at 258; ALR at 494): Unless an equitable presumption of a trust is displaced by a counter-presumption or it is rebutted or qualified by evidence of the intention of the party paying the purchase price or of the common intention of the parties who contribute that price, the presumption determines the conclusion to be reached … Once it was found that both parties had contributed to the purchase price, the conclusion had to conform to the relevant equitable presumption unless it was displaced, rebutted or qualified … This is the basic presumption, though it may be displaced in appropriate cases by the presumption of advancement or perhaps, qualified by an inference of the kind espoused by Lord Upjohn in Pettitt v Pettitt [1970] AC 777; [1969] 2 All ER 385. His Lordship said at 815: “… where both spouses contribute to the acquisition of a property, then my own view (of course in the absence of evidence) is that they intended to be joint beneficial owners and this is so whether the purchase be in the joint names or in the name of one. This is the result of an application of the presumption of resulting trust. Even if the property be put in the sole name of the wife, I would not myself treat that as a circumstance of evidence enabling the wife to claim an advancement to her, for it is against all the probabilities of the case unless the husband’s contribution is very small …”. Regard must be had to purchase money, not incidental costs of acquisition eg fees and disbursements: Little v Little [1989] ACLD 73. [page 402] Interestingly, Calverley v Green was heard on 22 February 1984 but judgment was not delivered until 6 December 1984, that is to say, after the court (the only difference in composition being that Dawson J replaced Murphy J) had heard argument in Muschinski v Dodds, above, judgment in which was not delivered until 6 December 1985. In Muschinski v Dodds, above there were significant differences of fact, but similar principles of law. Calverley v Green was cited by the whole court in support of the proposition that the presumption of a resulting trust in favour of the appellant was rebutted by evidence that it was the common intention of the parties that the respondent should have an immediate and unconditional legal and beneficial one half interest in the property. It is clear from the decision in Muschinski v Dodds that a spouse must have a right of contribution against the other in respect of moneys paid towards the purchase price of the property, the improvements on the land and the repayments of the mortgages. That case also usefully demonstrates that the presumptions of resulting trust and advancement “cannot prevail over the actual intention of that party as established by the overall evidence, including the evidence of the parties’ respective contributions”: CLR at 612; ALR at 449 per Deane J. See also Glouftsis v Glouftsis (1987)

44 SASR 298. Of course, it is not necessary that there should have been a financial contribution by a person to the purchase price of a property for there to have been a common intention on the part of that person and the person in whose name the property is registered that both persons should enjoy the beneficial interest in the property. But, in the main, there must be clear and precise evidence of any agreement between those persons from which such a “common intention” might be deduced: Thwaites v Ryan [1984] VR 65 at 76 per Fullagar J. See also Butler v Craine [1986] VR 274 at 282 per Marks J and Riley v Osborne [1986] VR 193 at 198 per Kaye J. A “common intention” might be found upon clear evidence, or even inferred from the facts, such as the fact of marriage, but it will not be “imputed” where it does not exist. See Cooke v Cooke [1987] VR 625 at 638 per Southwell J, a case which involved parents who were not married, and who did not form a de facto relationship. His Honour discerned a distinction between his case and the “marriage cases”. In Thwaites v Ryan [1984] VR 65 at 91, Fullagar J made the following observation in respect of cases such as Gissing v Gissing [1971] AC 886; [1970] 2 All ER 780 (now further explained by the Privy Council in Austin v Keele (1987) 72 ALR 579), Allen v Snyder [1977] 2 NSWLR 685, Hohol v Hohol [1981] VR 221 (now further considered by the Full Court of the Supreme Court of Victoria in Higgins v Wingfield [1987] VR 689), Pettitt v Pettitt [1970] AC 777; [1969] 2 All ER 385 and others: In the marriage cases [as his Honour called this line of authorities] the courts have in my opinion extended the area of the application of the fundamental principle which was applied in Organ v Sandwell [[1921] VLR 622], that a person who accepts property in a fiduciary capacity cannot set up in himself the legal estate free of the trust, but in my view it did so only by taking a very generous view of the evidence required to establish that one spouse acquired the property on trust for the other spouse as well as himself. A trust was “constructed” where the land was, as each spouse knew, acquired for the purposes of marriage. Fullagar J was at pains to point out that the High Court had not spoken upon the “marriage case principle” and indeed, it is interesting to note that most of the recent High Court decisions referred to here turn upon questions of financial contribution, and not upon the “marriage case principle”. His Honour identified in the “marriage cases” a fundamental principle repeatedly espoused by judges in various jurisdictions, namely that a spouse may not accept in his own name property intended at the time of acquisition to be enjoyed jointly and for the benefit of both spouses and then refuse to recognise at a later time the other’s equitable interest simply because it has not been reduced to writing or otherwise (if in the nature of a contract) partly performed. Of course, the major difficulty with the “marriage cases” is the absence of financial contribution. However, in those cases there is usually ample evidence of other forms of contribution not regarded as financial consideration, such as the performance of housekeeping and family-raising work. It is difficult to discern a fiduciary relationship between spouses in respect of property acquired for mutual benefit in the name of only one of them. [page 403] The Victorian Marriage Act and the Federal Family Law Act were enacted because the law does not equate the house-keeping and family-raising contribution of a home-bound spouse with financial consideration. Logically, a spouse who has not made a financial contribution to the purchase price of a matrimonial property should not be found to have a beneficial interest in that property. Rather, the home-bound spouse should be required to rely upon the Marriage Act and Family Law Act remedies, which in almost all circumstances seem to be adequate. Thus, by parity of reasoning with Luxton v Luxton [1968] VR 540; [1969] ALR 93; (1968) 12 FLR 382 and the observations of Fullagar J in Thwaites v Ryan, above, no claim could be made by the trustee of the estate of a bankrupt spouse

against the other spouse where the only financial contribution had been effected by the non-bankrupt spouse. Nonetheless, it does not seem that the absence of a financial contribution by the bankrupt towards the purchase price of the house or for its improvement etc is a complete obstacle to a proceeding by the trustee in bankruptcy claiming an interest in that property (see Butler v Craine [1986] VR 274 at 283) but the reasoning of Marks J in that case was rejected by Gibbs CJ and Brennan and Dawson JJ and is distinguishable from that of Mason and Deane JJ in Muschinski v Dodds, above. See also Vedejs v Public Trustee [1985] VR 569 per Nicholson J. It remains for the High Court to reconcile the “common intention” or “marriage” cases with the notion of the constructive trust. Some progress towards reconciliation of these views has been made. In Baumgartner v Baumgartner (1987) 164 CLR 137; 76 ALR 75, in which judgment was delivered on 10 December 1987, the High Court held that a de facto wife was not entitled to an interest in land acquired solely in the name of the de facto husband after their relationship began because she had not made any financial contribution to the purchase or improvement etc of the land and because the trial judge found that, on the facts, there was no intention to create a trust by the husband for the wife of an interest in the land. Nonetheless, because of the “pooling” by husband and wife of their respective incomes for the purpose of defraying domestic expenses including the costs of accommodation, a constructive trust was imposed by the court pursuant to which the husband was declared to have 55% of the beneficial interest in the property and the wife 45%. In Baumgartner v Baumgartner, above, ALR at 84, the basis for the construction of a trust is described in the joint judgment of Mason CJ, Wilson and Deane JJ as follows: In this situation the [husband’s] assertion, after the relationship had failed, that the … property which was financed in part through the pooled funds, is his sole property, is his property beneficially to the exclusion of any interest at all on the part of the respondent, amounts to unconscionable conduct which attracts the intervention of equity and the imposition of a constructive trust at the suit of the respondent. As was said by Deane J in Muschinski v Dodds, above, ALR at 451: Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle. On the subject of constructive trusts generally, see the decision of the High Court in Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371; 65 ALR 193. On 13 February 1989, the New South Wales Court of Appeal held by a majority that a house registered in the sole name of a man was held beneficially as to 60% for the man and as to 40% for a woman (and that adjustment should be made to compensate for moneys expended by each of the parties in respect of the property), where the man, the woman and their children had occupied the house for some time, though it had been bought for $25,000 in the name of the man and he had paid the deposit and all instalments under the mortgage, for which he was solely responsible: Hibberson v George (1989) 12 Fam LR 725; [1989] ACLD 229. It must be noted that a separate dictum of Fullagar J in Thwaites v Ryan, above at 95 applied by Nicholson J in Vedejs v Public Trustee, above, has been disapproved of in favour of the opinion of O’Bryan J in Hohol v Hohol [1981] VR 221 at 225 by the Victorian Full Court in Higgins v [page 404] Wingfield [1987] VR 689 which held that it is a necessary element of a constructive trust that the

person claiming the beneficial interest in the property has acted to his or her detriment in reliance upon the expectation of a beneficial interest. However, the decision in Baumgartner v Baumgartner, above, was not available to the Victorian Full Court when the decision in Higgins v Wingfield was handed down. And, where the statutory property adjustment rights of a spouse do not avail the trustee of that person’s bankrupt estate, or where a resulting or constructive trust does not arise or a “common intention” cannot be discerned, yet it is clear that the bankrupt spouse has “invested” labour or materials in improving the land or has contributed financially towards mortgage interest or other outgoings ostensibly so as to defray no more than a “moral” obligation to the long-suffering provider of gratuitous accommodation, the trustee in bankruptcy seeking relief on the ground that it is simply inequitable for the non-bankrupt spouse to retain sole ownership of the land would be unlikely to succeed. But consider ss 139D and 139E of the Bankruptcy Act. In Re Brunner; Ex parte Official Trustee in Bankruptcy (1984) 2 FCR 6 at 11, Morling J said: I turn now to consider the claim that the trustee is entitled to relief because it would be inequitable, in the circumstances of the case, for the wife to retain sole ownership of the land. In Chalmers v Pardoe [1963] 1 WLR 677 at 681–2 the general equitable principle upon which the trustee relies was stated in the following terms: There can be no doubt on the authorities that where an owner of land has invited or expressly encouraged another to expend money upon part of his land on the faith of an assurance or promise that that part of the land will be made over to the person so expending his money, a court of equity will prima facie require the owner by appropriate conveyance to fulfil his obligation; and when, for example for reasons of title, no such conveyance can effectively be made, a court of equity may declare that the person who has expended the money is entitled to an equitable charge or lien for the amount so expended. It was said in Plimmer v Wellington Corporation (1884) 9 App Cas 699 at 714 PC that the court must look at the circumstances in each case to decide in what way the equity can be satisfied. As McLelland J observed in Morris v Morris [1982] 1 NSWLR 61 at 64, the principle is a flexible one and has been applied in a great variety of situations. But on no view of the facts of the present case would it be equitable to declare Mrs Brunner to hold the house in Alston Avenue upon trust for herself and the applicant in equal undivided shares. The house is now worth in excess of $100,000. There was never any arrangement between the bankrupt and his wife that he should have an interest in the land or in the house constructed upon it. If the loan is repaid (and there is no suggestion that this will not occur) the bankrupt’s only contribution to the construction of the house will have been the value of his labour upon it. But in return for his labour he has been permitted to live in the house and it is a reasonable assumption that he will continue to do so. The facts in this case are quite different from those considered by McLelland J in Morris’ case (see above). In that case the plaintiff had paid a substantial sum of money towards the cost of an extension to a home jointly owned by his son and daughter-in-law to provide accommodation for himself. Subsequently the plaintiff left the home consequent upon the breakdown of his son’s marriage and the deterioration of his relationship with his daughter-in-law. It was held that, on the facts of the case, it would be unconscionable and inequitable for the son and daughter-in-law to retain the benefit of the plaintiff’s expenditure on their property free from any obligation of recoupment. In the present case no circumstances have arisen which would make it inequitable for Mrs Brunner to retain the benefit of her husband’s labour in building the house which she owns. He continues to receive a real benefit from her in the form of free accommodation and there is nothing in the evidence to indicate that his benefit will not continue indefinitely. Moreover, although the work he put into the house was not inconsiderable, it would seem that the value of such work was not significant having regard to the present value of the house. Accordingly I think the alternative claim for relief also fails.

[page 405] Mrs Brunner admitted a liability to the estate for moneys borrowed from the bankrupt. Such “free accommodation” would now be regarded by most trustees in bankruptcy as income of the bankrupt within the meaning of s 139L, at least if provided in consideration of work performed by the bankrupt. The decision of Phillips J in Tamm v Marks (VSC, 7 May 1990, unreported) is of considerable significance to insolvency practitioners. The trustee of the bankrupt estate of Jutta Wake, Mr Marks, established, although there was no reference to the property in the statement of affairs, that the bankrupt was a registered proprietor with her mother of a certain property in Frankston. A transmission application was duly lodged at the Titles Office and Mr Marks became registered in place of the bankrupt as a co-proprietor with the plaintiff, Mrs Tamm. Mrs Tamm then instituted proceedings claiming a declaration that the apparent interest of the bankrupt in the property had always been held upon trust pursuant to an agreement made at the time of acquisition of an earlier property that the daughter’s name would be used only so that financial accommodation could be provided, there being no possibility of an elderly woman being able to obtain finance by herself. Unfortunately, the purchase price of the Frankston property seemed to have come from the business account of the bankrupt’s husband, Mr Wake, who himself became a bankrupt, although moneys raised on the security of the Frankston property very soon replaced that “bridging finance”. Disparities in amounts and other anomalies disclosed during investigation by the trustee necessitated the trustee’s defence of Mrs Tamm’s action. Mrs Tamm and the bankrupt were believed by his Honour, although the bankrupt’s husband was severely criticised (his Honour even gave thought to sending the papers to the DPP in respect of the conduct of Mr Wake). In the end, however, his Honour found that there had been an agreement between mother and daughter as alleged by them. It was submitted on behalf of the trustee of the bankrupt estate that the bankrupt had contributed to the purchase price of the Frankston property (in the sense explained in Calverley v Green) to the extent that she had been liable to pay the mortgagee whose funds replaced the “bridging finance”. Indeed, his Honour found that the relevant equitable presumption applied and, unless rebutted, would produce the result that the plaintiff and her daughter would hold the legal estate in the property in trust for themselves as tenants in common in shares proportionate to their contributions. However, his Honour regarded the evidence of the mother and daughter described above as rebutting the equitable presumption of a resulting trust in favour of the bankrupt to the extent of her contribution (her share of the mortgage funds). It followed that the unwritten but performed agreement between mother and daughter displaced the registered interest of the bankrupt in the land. In Lanceley v Lanceley (1994) 18 Fam LR 71; (1994) FLC 92–491, a Full Court of the Family Court affirmed a decision refusing declaratory relief against an insolvent husband who was represented but who did not oppose an order (sought under Family Law Act s 79 but involving a claim under s 78 as well) that she had a substantial interest in certain matrimonial property. Husband and wife remained happily married and creditors were not notified of the proceeding. The Family Court recognised that it could not bind unnotified non-parties, creditors or a trustee in bankruptcy etc, although it might be inferred that the Family Court would find jurisdiction to make declarations or even adjustments of property adverse to notified non-parties. Current Family Court judgments seem generally to preserve and protect the interests of creditors, but creditors might still prefer to litigate their claims in traditional (debt recovery and bankruptcy) jurisdictions. If proceedings in such other jurisdictions are still outstanding when a debtor or his or her spouse invokes the jurisdiction of the Family Court, those proceedings might be amenable to crossvesting to the Family Court under s 35A of the Bankruptcy Act or s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). See, for example, Re Kocijan (1991) 14 Fam LR 747; (1991) FLC 92– 230. Compare In the Marriage of Donovan (1992) FLC 92–276, where the official trustee failed in an

application for transfer by the Family Court to the Federal Court of its challenge under s 79A of the Family Law Act to an earlier property adjustment order unopposed by the near-bankrupt husband. Query whether the s 79A application was necessary or desirable. [81,860.12] Section 116(2)(b)(i) — “household property” See reg 6.03 of the Bankruptcy Regulations. Cases decided in respect of the former s 116(2)(b) may still be relevant. In White v Quartermain (VSC, Duggan J, 24 June 1985, unreported), the court was asked to determine whether [page 406] any goods seized by the bailiff pursuant to a warrant for execution could be said to be “necessary household property” of the plaintiff. The Supreme Court Act 1958 (Vic) expressly prohibited the seizure of property that would, by virtue of s 116(2)(b) and (c) of the Bankruptcy Act 1966, be exempt property in a bankruptcy. At p 19 of the judgment, Duggan J said: “It seems to me that what is properly regarded as ‘necessary household property’ in a particular case must be decided by reference to the household under consideration. A woman living in difficult circumstances with a number of children obviously requires more than eg a bachelor living in a city apartment.” Duggan J went on to formulate the following test: “it is intended that a household will not be deprived of that property that is reasonably necessary for its continuation as a viable household providing its normal occupants with such facilities as will prevent impoverishment or humiliation and will enable them to live in basic comfort.” Applying this test, Duggan J held that having regard to the household of the plaintiff, the following items were necessary household property: refrigerator, washing machine, clothes dryer, electric wok, clock, vacuum cleaner, television, stereo, one table and one set of chairs and one lounge suite. In Nawaz Nominees Pty Ltd v Butera (VCC, Waldron CJ, November 1985, unreported), Waldron CJ formulated a different test. At p 3 of the judgment, he said “In my opinion … necessary household property does not include those things which all of us would prefer to own and enjoy. It extends only to those items of the household without which life could not be properly serviced in a modern society.” Waldron CJ said that it would be in a very rare and exceptional case that a colour television or a stereo sound system could be found to come within the definition. In Re Dowell; Ex parte Marks (FCA, Evatt J, 13 February 1987, unreported), which was a decision of a single judge of the Federal Court, Evatt J approved of the test formulated by Duggan J in White v Quartermain, above, and went on to hold that having regard to the household under consideration, the following property was “necessary household property” of the bankrupts: one stereo, one colour television and video recorder, washing machine, tapes and records. Evatt J justified the inclusion of the video recorder on the ground that the bankrupts lived in a remote area with limited access to cinemas. See also Vaughan v Official Trustee (1996) 71 FCR 34; BC9605837. [81,860.12.5] Section 116(1)(b) Property divisible among creditors The decision of Greenwood J in Rogers v Asset Loan Co Pty Ltd [2006] FCA 434; BC200602418 analysed this subsection at [37] et seq (emphasis added): [37] Section 116(1)(b) characterises as property divisible amongst the creditors, “the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his … own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his … discharge”. The notion of property of the bankrupt within s 5(1) of the Bankruptcy Act seems to have the same meaning for the purposes of both s 58(1) and s 116(1) of the Bankruptcy Act, consistent with the views of the majority in Cummings v Claremont Petroleum NL (1986) 185

CLR 124 and Cirillo v Citicorp Australia Ltd [2004] SASC 293 at paragraphs [75]–[79] per Perry, Bleby and Gray JJ. [38] Accordingly, all legal and beneficial interests of the bankrupt and all rights, capacities and powers exercisable by the bankrupt in relation to those interests vest in the trustee and are divisible among the bankrupt’s creditors. The powers referred to in s 116(1)(b) of the Bankruptcy Act are “powers ‘which are familiar to all conveyancers and are powers properly so called’ as Farwell J pointed out in Re Rose; Trustee of the Property of E T Rose v Rose. In other words, the powers referred to are authorities to dispose of property or interests in property for the benefit of the donee of the power or of some other person”: Cummings v Claremont Petroleum NL (above), per Brennan CJ, Gaudron and McHugh JJ at p 133. [81,860.13] Section 116(2)(b) — Policies of life insurance or endowment insurance The policy of this section and sections which it replaced is that life insurance is viewed as a desirable provision for retirement, for old age and against the possibility of bereavement. It supports the [page 407] protection of such moneys from the claims of creditors. As such the legislation is given a liberal interpretation, it being seen as remedial legislation. See NM Superannuation Pty Ltd v Young (1993) 113 ALR 39. [81,860.14] Superannuation and approved deposit funds Section 116(2)(d) (amended by s 7 of the Superannuation Industry (Supervision) Consequential Amendments Act 1993) excludes, subject to s 116(5), from the definition of divisible property bankrupts’ interests in regulated superannuation funds and approved deposit funds as defined under the Superannuation Industry (Supervision) Act 1993. The effect of s 116(5) is to limit this protection to so much of the bankrupt’s interest as does not exceed the bankrupt’s pension RBL as worked out under s 140ZD of the Income Tax Assessment Act 1936. Section 140ZD(2) provides that a person’s pension RBL for the 1994–95 year of income is $800,000.00, which amount is indexed for the purposes of later years of income. Subsection 116(6) provides that the rules may prescribe a method for apportioning this protection where there is more than one item of non-divisible property under s 116(2)(d). As to forfeiture of interests in superannuation funds, see notes to s 302A. [81,860.14.5] Penalties The exemption provided for damages does not extend to statutory remedies for wrongs, as against “damages of compensation”. It was so held in Leaman v The Salvation Army (Victoria) Property Trust as Trustee for the Salvation Army (Vic) Social Work [2011] FMCA 1037; BC201110410, a decision of Riley FM, particularly at [5]. [81,860.15] Section 116(2)(g)(i) — “personal injury” Where the right of the bankrupt, if any, is directly related to his property or estate it does not answer the description of a right to recover damages or compensation for personal injury or wrong done within the meaning of the subsection. Thus an action commenced by a bankrupt before bankruptcy and founded on a breach of duty of the kind recognised in Hedley Byrne and Co Ltd v Heller and Partners [1964] AC 465; [1963] 2 All ER 575 and Mutual Life & Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 556 will vest in the official receiver pursuant to s 116(1). See Faulkner v Bluett (1981) 52 FLR 115. The right to sue for pecuniary loss to the estate of a bankrupt passes to the trustee by virtue of s 116(1) notwithstanding any personal inconvenience suffered by the bankrupt. The right to sue for personal injury, which includes injury to the body mind or character of the bankrupt, remains in the

bankrupt by virtue of s 116(2)(g). Where a cause of action includes both personal and pecuniary loss the claims may be split and pursued in either separate actions or joined in the same proceedings where the heads of damage will be assessed separately. For a discussion of the relevant authorities, see Bullock v Goodluck (1983) 48 ALR 217. For a review of the authorities and policy underlying the express inclusion in s 116(2)(g) of damages actually recovered in respect of personal injury: see Re Heenan; Ex parte Collins (1992) 39 FCR 428; 116 ALR 146. In this decision, the court held that a debtor’s petition, lodged in circumstances where the debtor was unable to pay his debts as and when they fell due out of his own money, protected from his creditors money due to him from the State Government Insurance Commission further to the Motor Vehicle (Third Party Insurance) Act 1943 (WA) (being damages awarded to him in respect of injuries suffered in a motor vehicle accident) because it could not be said that the debtor had lodged his petition for a purpose foreign to bankruptcy law. The character of the pecuniary loss exempted was considered in Re Iskenderian; ex parte Iskenderian Bros Pty Ltd (1989) 21 FCR 363; 87 ALR 294 per Neaves J. The case involved a personal injuries award that had been transmuted into real property. His Honour considered the exemption in s 116 (at p 370): The argument presented on behalf of the applicants requires the language of s 116(3) to be read as fastening upon, to the exclusion of all other considerations, the immediate source of the money used in the purchase or acquisition of the property in question. I am unable to accept that approach. Notwithstanding the difficulties to which the language of the provisions gives rise, I am of opinion that s 116(2)(g) and (n) and subs (3) sufficiently reflect a legislative intention that a bankrupt, notwithstanding his bankruptcy, is to continue to have the benefit not only of any damages or compensation of the kind referred to in s 116(2)(g) recovered by him, but also of any property which can, as at the time when he becomes a bankrupt, properly be described as [page 408] representing such damages or compensation. Those provisions are, therefore, to be construed accordingly. In the light of that evident legislative intention, I can see no basis for concluding that the protection is to extend only to the damages or compensation and to property initially purchased or acquired with the money recovered by way of damages or compensation: see Leach v Official Assignee [1975] 1 NZLR 83 at 87-88. In my opinion, s 116(3) requires that the totality of the circumstances be considered and the question asked whether the property, in truth, represents such damages or compensation. In the circumstances of a particular case, where properties have been bought and sold, it may well be difficult for a bankrupt to establish that property of which he is the beneficial owner as at the time when he becomes a bankrupt does, in truth, represent damages or compensation of the kind referred to in s 116(2)(g), which he recovered at some earlier time. That circumstance, however, provides no reason for reading the provisions in the limited way contended for by the applicants and as protecting only the money received by way of damages or compensation and the property first purchased therewith. The question is ultimately one of fact. That decision was followed in Re Manivilovski; ex parte Official Trustee in Bankruptcy (1993) 45 FCR 358; 117 ALR 537 and approved by the Full Court in Turner v Official Trustee in Bankruptcy (1996) 71 FCR 418; BC9605985 at 422. It was applied by Foyster v Prentice [2008] FMCA 757; BC200804562. RD Nicholson J considered these decisions in Re Jemielita; ex parte Official Trustee in Bankruptcy (1996) 63 FCR 141; BC9600305. His Honour considered that monies in a bank account might be protected under s 116(2), but if they are withdrawn that withdrawal might not become an “outlay” (at 145):

the definition of ‘outlay’ is confirmatory that the word ‘property’ as it appears in s 116(4) is a reference to property which has been acquired or purchased or otherwise dealt with as provided in the definition, none of which is the case in relation to a withdrawal of money from the bank account for the purpose of transferring that money to the Trustee. However, the issue for determination here is whether the plaintiff has standing to commence an action in respect of personal injuries. The question of standing in respect of a bankrupt asks in the words of Cox v Journeaux (No 2) (1935) 52 CLR 713; 9 ALJR 127 per Dixon J “whether the damages or part of them are to be estimated by an immediate reference to the pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property”. In Samootin v Shea [2010] NSWCA 371; BC201009911 Campbell JA found that where damages for pain and suffering were alleged to have resulted from a solicitor’s professional negligence, the plaintiff’s action is not in respect of any personal injury or wrong. His Honour explained: [79] The test of whether a cause of action seeks “damage or compensation … for personal injury or wrong” has been held to be “… whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property”: Cox v Journeaux (1935) 52 CLR 713 at 721 per Dixon J (applying in the Australian statutory context, Wilson v United Counties Bank Ltd [1920] AC 102 at 111 and 128–133, which was in turn applying Erle CJ in Beckham v Drake (1849) 2 HLC 579; 9 ER 12113 at 604, 1222), applied in Daemar v Industrial Commission of NSW (1988) 12 NSWLR 45 at 55–56 per Kirby P (with whom Clarke JA agreed); Mannigel v Hewlett Phelps [1991] NSWCA 186 at 2 per Handley JA (with whom Meagher JA agreed and Kirby P agreed “generally”); Arnoya Holdings Pty Ltd v Metway Leasing Ltd [1999] NSWCA 120 at [16] per Sheller JA (with whom Powell and Beazley JJA agreed). In Faulkner v Bluett (1981) 52 FLR 115 at 119 Lockhart J said: The common thread running through these cases is that where the primary and substantial right of action is direct pecuniary loss to the property or estate of the bankrupt, the right to sue passes to the trustee notwithstanding that it may have produced personal inconvenience to the bankrupt … Where the essential cause of action is the personal injury done to the person or feelings of the bankrupt the right to sue remains with the bankrupt. [page 409] [80] For this purpose, the nature of the action is determined by examining the initiating process and pleadings and any other relevant documents in the case: Bryant v Commonwealth Bank of Australia (1997) 75 FCR 545; BC9702862 at 549 per Lockhart J, 557–558 per O’Loughlin and Merkel JJ. [81] The “pain and suffering” for which Ms Samootin was claiming damages was pain and suffering that, on her pleaded case, allegedly arose from having lost her property through wrongful action of Ms Wagner. Thus any right of Ms Samootin to sue concerning Ms Wagner having caused her “pain and suffering” in the way alleged in the statement of claim is a right that would also have vested in the Official Trustee. Although this test requires the presence of an action for professional negligence, the common thread found by Lockhart J above represents a universal test which can be applied in one way or another to all such cases. A recent example is in Tomson v Boitano [2011] NSWSC 527; BC201103979. [81,860.20] Interest forfeited on bankruptcy As a matter of policy, provisions that purport to limit

property so that it reverts to a third party on bankruptcy are void (Re Ashton; Ballard v Ashton [1920] 2 Ch 481) although property may vest in a person until bankruptcy and then to a third party. See [84,713.5]. [81,860.30] Trustee’s title no better than bankrupt’s The property of the bankrupt vests in his or her trustee subject to all equities and liabilities: Mitford v Mitford (1803) 32 ER 534; Re Puntoriero; Ex parte Nickpack Pty Ltd (1991) 104 ALR 523. The trustee’s title is no better than that of the bankrupt. [81,860.35] Causes of action In WR Henry & Son v Hodge [1963] VR 111 it was held that the right to set aside a default judgment on which the sequestration order was based vested in the trustee in bankruptcy on the making of the sequestration order and the bankrupt had no standing to bring such an application. See [81,240.12]. [81,860.40] Section 116(3) and (4) — “paid for the purchase” — “used in acquisition” In Re Iskenderian; Ex parte Iskenderian Bros Pty Ltd (1989) 21 FCR 363; 87 ALR 294 the question of use of “exempt money” to discharge a mortgage over real property was considered, and it was held that as the interest of the bankrupt in the property is enhanced by such payments, this effectively amounts to “acquisition of property” within the meaning of the section. See also Re Manivilovski (1993) 117 ALR 537 and Turner v Official Trustee in Bankruptcy (FCA, Full Court, TG 13 of 1996, 9 December 1996, unreported, BC9605985).

____________________ *Editor’s note: See [79,945] and [79,947], located immediately after the Table of Amendments, concerning the application of parts of this section.

[81,865] Policies of insurance against liabilities to third parties 117 (1) Where: (a) a bankrupt is or was insured under a contract of insurance against liabilities to third parties; and (b) a liability against which he or she is or was so insured has been incurred (whether before or after he or she became a bankrupt); the right of the bankrupt to indemnity under the policy vests in the trustee and any amount received by the trustee from the insurer under the policy in respect of the liability shall, if the liability has not already been satisfied, be paid in full forthwith to the third party to whom it has been incurred. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Subsection (1) does not limit the rights of the third party in respect of any balance due to him or her after the payment referred to in that subsection has been made.

[subs (2) am Act 44 of 1996 s 3 and Sch 2]

[page 410] (3) This section applies notwithstanding any agreement to the contrary, whether entered into before or after the commencement of this Act. SECTION 117 GENERALLY [81,865.3] Interpretation In Tapp v LawCover Insurance Pty Ltd [2013] FCA 35; BC201300195 Rares J explained the meaning of the section at [13] and [14]: [13] Thus, s 117 creates a preferential treatment for the third party creditor over all other creditors. The section segregates the proceeds of the policy from amenability to distribution among the general body of the bankrupt’s creditors and obliges the trustee to pay those proceeds to the creditor whose claim against the bankrupt was insured: cf as to the analogous provisions of s 562 of the Corporations Act 2001 (Cth), AssetInsure Pty Ltd v New Cap Reinsurance Corporation Ltd (In liq) (2006) 225 CLR 331 at 358–359 [78]–[80] per Kirby and Hayne JJ with whom on this point, Gleeson CJ, Heydon and Crennan JJ agreed at 343 [28]. [14] Importantly, s 117(1) is a separate and distinct provision that vests property of the bankrupt in the trustee in a way different to the general provisions for the vesting of all other available property of the bankrupt provided for in s 58. The specific requirements of s 117 derogate from the general principle underlying the Act that the property of the bankrupt be vested in the trustee for equal distribution to the general body of creditors. Accordingly, the trustee has only one power to deal with the property consisting of a right to indemnity under insurance policies to which s 117 applies and that power is to pay the particular creditor in preference to all other creditors of the bankrupt’s estate: Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7 per Gavan Duffy CJ and Dixon J, Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 187–188 [84] per Gummow, Hayne, Crennan and Bell JJ. [81,865.5] Can declaratory relief determine this issue? In QBE Insurance (Australia) Ltd v Lois Nominees Pty Ltd and the persons detailed in the schedule attached to the Appeal Notice (Civil) [2012] WASCA 186; BC201207427 the Court of Appeal of Western Australia dismissed an appeal against the decision of Beech J at first instance by a majority consisting of Newnes and Murphy JJA, the President (McLure P) dissenting. As the President states “The primary issue in the appeal is whether a third party stranger to a liability insurance contract is arguably entitled to a declaration that the insurer is obliged to indemnify the insured against whom the third party is seeking to establish liability in legal proceedings. There is a conflict of authority on that issue at intermediate appellate court level. However, that conflict does not prevent this court from resolving the issue in the appellant’s favour.” The President’s summary of the law relating to declarations at [18] will continue to be of value to the profession and the conflicting authorities are summarised at [27] of the President’s judgment. Essentially the two lines are represented by Interchase Corporation Ltd (in liq) v FAI General Insurance Co Ltd [2000] 2 Qd R 30 and Ashmere Cove Pty Ltd v Beekink (No 2) (2007) 244 ALR 534; 14 ANZ Ins Cas 61-741; [2007] FCA 1421; BC200707813 and the issue was essentially whether the claim amounted to an abuse of process under Reichel v Magrath (1889) 14 App Cas 665 as being

the retrial of an already adjudicated issue. All three judgments would have to be considered when such matters are raised in considering this section.

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[81,870] Execution by creditor against property of debtor who becomes a bankrupt etc 118 (1) Subject to subsection (2), where: (a) a creditor has, within 6 months before the presentation of a petition, or after the presentation of a petition, against a debtor: (i) received moneys as a result of execution having been issued by him or her, or on his or her behalf, against property of the debtor, being moneys that [page 411] are the proceeds of the sale of property of the debtor that has been sold in pursuance of the process or that were seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of the process; or (ii) received moneys as a result of the attachment by him or her, or on his or her behalf, of a debt due to the debtor; and (b) the debtor subsequently becomes a bankrupt on, or by virtue of the presentation of, the petition; the creditor shall pay to the trustee of the estate of the bankrupt the amount by which the amount of those moneys exceeds the taxed costs of the execution or attachment, as the case may be. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Subsection (1) does not apply in relation to a creditor who has received moneys as a result of execution having been issued by him or her, or on his or her behalf, against property of a debtor, or as a result of the attachment by him or her, or on his or her behalf, of a debt due to the debtor, in respect of any liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the

commencement of this section). [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) Where a creditor has, in pursuance of subsection (1), paid the proceeds of the sale of property or other moneys to the trustee of the estate of a bankrupt, the creditor may prove in the bankruptcy for his or her debt as an unsecured creditor as if the execution or attachment, as the case may be, had not taken place. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) Where: (a) a creditor has, in pursuance of subsection (1), paid to the trustee of the estate of a bankrupt the proceeds of the sale of property or other moneys that were received as a result of execution having been issued by him or her, or on his or her behalf, against property of the bankrupt or of the attachment by him or her, or on his or her behalf, of a debt due to the bankrupt; and (b) that property or debt would not have been property divisible amongst the creditors of the bankrupt if the bankrupt had become a bankrupt immediately before the execution was issued or the debt was attached, as the case may be; the trustee shall pay those proceeds or other moneys to the bankrupt or to a person authorized by the bankrupt in writing for the purpose. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) Subject to this section, where notice in writing of the presentation of a creditor’s petition against a debtor is given to a creditor: (a) the creditor shall not take any action or further action, as the case may be, to attach a debt due to the debtor until the petition has been dealt with by the Court or has lapsed; and (b) if a debt due to the debtor has been attached by the creditor: (i) the creditor shall forthwith give a written notice of the presentation of the petition to the person liable to pay that debt; and (ii) the attachment of the debt is suspended until the petition has been dealt with by the Court or has lapsed. [subs (5) am Act 44 of 1996 s 3 and Sch 1]

(6) Subject to this section, where notice in writing of the reference to the Court of a debtor’s petition against a debtor is given to a creditor:

(a) the creditor shall not take any action or further action, as the case may be, to attach a debt due to the debtor until the Court has dealt with the petition; and [page 412] (b) if a debt due to the debtor has been attached by the creditor: (i) the creditor shall forthwith give a written notice of the presentation of the petition to the person liable to pay that debt; and (ii) the attachment of the debt is suspended until the Court has dealt with the petition. [subs (6) am Act 44 of 1996 s 3 and Sch 1]

(7) Nothing in this section shall be taken to prevent a person liable to pay a debt to a debtor from paying the debt or a part of the debt to the debtor during the suspension, in accordance with subsection (5) or (6), of an attachment of that debt. (8) A creditor who contravenes, or fails to comply with, subsection (5) or (6) is guilty of contempt of court. (9) Subject to subsection (10), where: (a) a creditor has, within 6 months before the presentation of a petition, or after the presentation of a petition, against a debtor obtained a charge or charging order against property of the debtor; and (b) the debtor subsequently becomes a bankrupt on, or by virtue of the presentation of, the petition; the charge or charging order, as the case may be, is void as against the trustee in the bankruptcy. (10) Subsections (5), (6) and (9) do not apply in relation to the attachment of a debt due to a debtor, or to a charge or charging order against property of a debtor, in respect of any liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section). (11) Notwithstanding anything contained in this Act, a person who purchases property in good faith:

(a) under a sale by a sheriff in consequence of the issue of execution against property of a debtor who, after the sale, becomes a bankrupt; or (b) under a sale in consequence of the enforcement by a creditor of a charge or a charging order against property of a debtor who, after the sale, becomes a bankrupt; acquires a good title to it as against the trustee of the estate of the bankrupt. (12) In this section: charge means a charge created by a law of the Commonwealth or of a State or Territory of the Commonwealth upon registration of a judgment in any registry. charging order means a charging order made by a court in respect of a judgment. [s 118 subst Act 12 of 1980 s 55] SECTION 118 GENERALLY [81,870.5] Scope of s 118(1) In Re Smith; Ex parte Wilde v PAD Investments Pty Ltd (1985) 11 FCR 114; 61 ALR 516 the question arose as to whether s 118(1) could apply to a secured creditor. The court noted that the history of sections similar to the current s 118 made it clear that such secured status only survived if the creditor could comply with the conditions set out by the section: McQuarrie v Jaques (1954) 92 CLR 262; [1955] ALR 49; Rae v Samuel Taylor Pty Ltd (1963) 110 CLR 517; [1965] ALR 102). The court concluded that “an execution creditor is not beyond the reach of s 118(1) by reason of his having, at any time, attained the status of a ‘secured creditor’ for bankruptcy purposes”. [page 413] Secure Funding Pty Ltd v Bettini [2011] NSWSC 557 reached a similar conclusion in respect of a garnishee order. Harrison J, after noting the provisions of ss (1) and (4) concluded at [22]: Under these provisions, a creditor, who within six months before or following presentation of a petition has received monies “as a result of the attachment by him …of a debt due to the debtor”, must pay those monies to the trustee in bankruptcy. “Attachment” refers to the curial attachment of debts of which a garnishee order is one form. If the curial attachment of debts, whether by writ of fi fa, by garnishee or otherwise, created an equitable charge in favour of the creditor, then such a creditor would be secured and take priority over other creditors. Instead, s 118 requires a creditor receiving monies by attachment to pay those monies to the trustee in bankruptcy, and to rank pari passu with the bankrupt’s unsecured creditors. [81,870.8] Preferences Section 122 may still apply to a transfer of property, even if the transfer appears to be preserved by s 118: Re Warner (1973) 1 ALR 164; 21 FLR 395. [81,870.10] Attachment For an historical analysis of the meaning of the word “attachment”, see Deputy Commissioner of Taxation v Donnelly (1989) 25 FCR 432; 89 ALR 232 at 258; 89 ATC 5071.

Section 118 does not affect the operation of a notice issued under s 218 of the Income Tax Assessment Act 1936 either because under the s 218 notice the third party is bound as and when debts become due and payable to the debtor to pay those moneys to the commissioner which is an obligation arising by a statute or alternatively because the charge created by the service of a notice under s 218 of the Income Tax Assessment Act 1936 does not fall to be considered as an attachment for the purposes of s 118 of the Bankruptcy Act: Deputy Cmr of Taxation v Donnelly, above at 258. [81,870.15] Maintenance agreement or maintenance order “Maintenance agreement” means 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 any other agreement with respect to the maintenance of a person that has been so registered or approved: s 5. For “maintenance order” see also s 5. [81,870.20] Charge and charging order For the definitions of “charge” and “charging order”, see s 118(12). [81,870.25] Interrelationship between interim and final charging orders Even if an interim charging order is made outside the six-month period where final charging order is made within the statutory time, the operation of the section will be attracted. In Re Kinsela; Ex parte Butterell (1984) 3 FCR 524; 53 ALR 557 a deputy prothonotary made a charging order “until further order of the court” and at a later date a final order was made by a judge. It was held that upon the making of the final order the interim order ceased to operate with the consequence that the interim order no longer had any effective operation and since the later order, being the only operative order for relevant purposes, fell within the prescribed statutory period, it was thus liable to be avoided by virtue of the provisions of s 118(9). [81,870.30] Caveat Since the legal effect of a caveat is to operate as a statutory injunction serving merely to preserve property or keep it available in case a judgment creditor should wish to have execution against it, it will not constitute a “charge” or “charging order” for the purposes of the subsection: Hall v Richards (1961) 108 CLR 84; [1961] ALR 816. [81,870.35] Effect of s 218 notice A notice issued under s 218 of the Income Tax Assessment Act 1936, even if it operates to give the commissioner a “charge”, does not create a charge of the type referred to in s 118(9) as defined in s 118(12): Kerrison v Acting Deputy FCT (SA) (1988) 88 ATC 4476; 19 ATR 1361.

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[81,875] Duties of sheriff after receiving notice of presentation of petition etc 119 (1) Subject to this section, where notice in writing of the presentation of a creditor’s petition against a debtor is given to a sheriff, the sheriff:

(a) shall refrain: (i) from taking any action to sell property of the debtor in pursuance of any process of execution issued by or on behalf of a creditor; and (ii) from taking any action on behalf of a creditor to attach a debt due to the debtor; and (b) shall not: (i) pay to the creditor by whom, or on whose behalf, the process of execution was issued, or to any person on his or her behalf, the proceeds of the sale of property of the debtor that has been sold in pursuance of any such process or any moneys seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of any such process; or (ii) pay to the creditor, or to any person on his or her behalf, any moneys received as a result of the attachment of the debt due to the debtor; until the petition has been dealt with by the Court or has lapsed. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Subject to this section, where notice in writing of the reference to the Court of a debtor’s petition against a debtor is given to a sheriff, the sheriff: (a) shall refrain: (i) from taking any action to sell property of the debtor in pursuance of any process of execution issued by or on behalf of a creditor; and (ii) from taking any action on behalf of a creditor to attach a debt due to the debtor; and (b) shall not: (i) pay to the creditor by whom, or on whose behalf, the process of execution was issued, or to any person on his or her behalf, the proceeds of the sale of property of the debtor that has been sold in pursuance of any such process or any moneys seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of any such process; or (ii) pay to the creditor, or to any person on his or her behalf, any moneys received as a result of the attachment of the debt due

to the debtor; until the Court has dealt with the petition. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) Where notice of the presentation of a creditor’s petition against a debtor has been given under subsection (1) to a sheriff or notice of the reference to the Court of a debtor’s petition against a debtor has been given under subsection (2) to a sheriff, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the sheriff a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (1) or (2), as the case may be, ceases to apply in relation to the process of execution or attachment, as the case may be. [subs (3) am Act 44 of 1996 s 3 and Sch 1]

[page 415] (4) Subject to this section, where notice in writing of the presentation of a creditor’s petition against a debtor is given to the registrar or other appropriate officer of a court: (a) to which the proceeds of the sale of property of the debtor or other moneys have been paid by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or (b) to which moneys have been paid in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor; any of those proceeds or moneys not paid out of court shall not be paid to the creditor or to any person on his or her behalf until the petition has been dealt with by the Court or has lapsed. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) Subject to this section, where notice in writing of the reference to the

Court of a debtor’s petition against a debtor is given to the registrar or other appropriate officer of a Court: (a) to which the proceeds of the sale of property of the debtor or other moneys have been paid by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or (b) to which moneys have been paid in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor; any of those proceeds or moneys not paid out of court shall not be paid to the creditor or to any person on his or her behalf until the Court has dealt with the petition. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(6) Where notice of the presentation of a creditor’s petition against a debtor has been given under subsection (4) to the registrar or other appropriate officer of any court or notice of the reference to the Court of a debtor’s petition against a debtor has been given under subsection (5) to the registrar or other appropriate officer of any court, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the registrar or other officer a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (4) or (5), as the case may be, ceases to apply in relation to the process of execution or attachment, as the case may be. [subs (6) am Act 44 of 1996 s 3 and Sch 1]

(7) Where a sheriff, in pursuance of subsection (1) or (2), refrains from taking action to sell property of a debtor (being real property), the debtor becomes a bankrupt and the property vests in the trustee in the bankruptcy, the costs of the execution are a first charge on that property. (8) A failure by a sheriff to comply with a provision of this section does not affect the title of a person who purchases property of a bankrupt in good faith under a sale by the sheriff in pursuance of a process of execution issued

by or on behalf of a creditor. [s 119 subst Act 12 of 1980 s 55] SECTION 119 GENERALLY [81,875.5] Sheriff The definition includes a person charged with the execution of a writ or other process: s 5. [81,875.10] Sheriff’s authority The sheriff or bailiff to whom a writ of fieri facias is addressed and delivered has authority from a judgment creditor to receive the amount which the writ directs [page 416] him or her to levy and upon receipt of that amount or some part of it the debtor is discharged either wholly or pro tanto: McQuarrie v Jaques (1954) 92 CLR 262; [1955] ALR 49. Where moneys were paid to the bailiff to forestall execution, it was held that the moneys did not represent the proceeds of an execution since no seizure had occurred: Rae v Samuel Taylor Pty Ltd (1963) 110 CLR 517; [1965] ALR 102. It would be otherwise if after seizure moneys are paid to avoid sale and for release of the debtor’s goods: Bower v Hett [1895] 2 QB 51. [81,875.15] Presentation of a creditor’s petition In the event of the failure of a composition or a scheme of arrangement after bankruptcy, a trustee or a creditor is entitled to apply to annul the composition or scheme. If the application includes an application for the making of a sequestration order, it is deemed to be equivalent to the presentation of a creditor’s petition: s 75(8). Where a debtor has been required by special resolution of a meeting of creditors to execute a deed of arrangement or deed of assignment or to present a debtor’s petition but fails to do so, an application can be made for a sequestration order and the application is equivalent to the presentation of a creditor’s petition: s 221(1)(b). An application under s 222(4) declaring a deed of assignment or a deed of arrangement or composition void may include an application for the making of a sequestration order in which event s 222(9) provides that the inclusion of the application for sequestration order is equivalent to the presentation of a creditor’s petition. Under s 236 an order for termination of a deed may include an application for a sequestration order and that application is deemed to be equivalent to the presentation of a petition: s 236(5). In relation to the setting aside of a composition or the termination of a composition, see s 239(4) and s 242(5) respectively which deem the inclusion of an order for sequestration in the application to be equivalent to the presentation of the creditors’ petition. [81,875.20] Maintenance agreement or maintenance order Where the sheriff is charged with the duty to attach a debt due under a maintenance agreement or maintenance order, the attachment or execution will be preserved notwithstanding notice of the presentation of a creditor’s petition, provided the sheriff is put upon notice.

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[81,880] Duties of sheriff after receiving notice of

bankruptcy etc 119A (1) Where a debtor has become a bankrupt (whether on a creditor’s petition or otherwise and whether before or after the commencement of this section), the trustee may give to the sheriff or to the registrar or other appropriate officer of a court, notice in writing of that fact and, upon the giving of the notice: (a) the sheriff shall deliver or pay to the trustee: (i) any property of the bankrupt in his or her possession under a process of execution issued by or on behalf of a creditor; (ii) any proceeds of the sale of property of the bankrupt or other moneys in his or her possession, being proceeds of the sale of property sold, whether before or after the bankrupt became a bankrupt, in pursuance of any such process or moneys seized, or paid to avoid seizure or sale of property of the bankrupt, whether before or after the bankrupt became a bankrupt, in pursuance of any such process; and (iii) any moneys in his or her possession as a result of the attachment, by or on behalf of a creditor, of a debt due to the bankrupt; or (b) the registrar or other officer of the court shall pay to the trustee: (i) any proceeds of the sale of property of the bankrupt or other moneys in court, being proceeds of sale or other moneys paid into court, whether before or after the bankrupt became a bankrupt, by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the bankrupt; and [page 417] (ii) any moneys in court that have been paid into court, whether before or after the bankrupt became a bankrupt, in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the bankrupt; as the case requires.

[subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Where property is, or the proceeds of the sale of property or other moneys are, required by subsection (1) to be delivered or paid to the trustee, the costs of the execution or attachment, as the case may be, are a first charge on that property or those proceeds of sale or other moneys, as the case may be. (3) For the purpose of giving effect to the charge referred to in subsection (2), the sheriff, registrar or other officer of a court may retain on behalf of the creditor entitled to the benefit of the charge, such amount from the proceeds of sale or other moneys referred to in that subsection as he or she thinks necessary for the purpose. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) Where a sheriff, registrar or other officer of a court has, in pursuance of subsection (1), delivered property or paid moneys to the trustee, the creditor who issued the process of execution or instituted the attachment proceedings, or on whose behalf the process was issued or the proceedings instituted, as the case may be, may prove in the bankruptcy for his or her debt as an unsecured creditor as if the execution or attachment, as the case may be, had not taken place. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) Where: (a) a sheriff, registrar or other officer of a court has, in pursuance of subsection (1), delivered to the trustee property that was seized, or paid to the trustee the proceeds of the sale of property or other moneys that were received, as a result of the issue of execution against property of a bankrupt or the attachment of a debt due to a bankrupt; and (b) that property or debt would not have been property divisible amongst the creditors of the bankrupt if the bankrupt had become a bankrupt immediately before the execution was issued or the debt attached, as the case may be; the trustee shall deliver that property, or pay those proceeds or other moneys, as the case requires, to the bankrupt or to a person authorized by the bankrupt in writing for the purpose. [subs (5) am Act 168 of 1986 s 3]

(6) Where:

(a) property has been delivered by a sheriff, or the proceeds of the sale of property or other moneys have been paid by a sheriff, registrar or other officer of a court, to the trustee of the estate of a bankrupt in pursuance of subsection (1); and (b) the property was in the possession of the sheriff, or the proceeds of the sale of the property or the other moneys were in the possession of the sheriff or paid into court, as the case may be, under or in pursuance of a process of execution issued, or proceedings to attach a debt instituted, by or on behalf of a creditor in respect of a liability of the bankrupt under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section); the trustee shall deliver that property, or pay those proceeds or other moneys, as the case requires, to that creditor. [page 418] (7) A failure by a sheriff to comply with a provision of this section does not affect the title of a person who purchases property of a bankrupt in good faith under a sale by the sheriff in pursuance of a process of execution issued by or on behalf of a creditor. [s 119A insrt Act 12 of 1980 s 55] SECTION 119A GENERALLY [81,880.5] Costs of execution or attachment Where a party caused a writ of execution to be issued on property to be sold under the writ but afterwards the debtor became bankrupt with the consequence that s 118(1) applied, the trustee of the bankrupt estate was entitled to receive from the execution creditor only the amount by which the sum received as a result of the execution exceeded the taxed costs of the execution: Re Smith; Ex parte Wilde v PAD Investments Pty Ltd (1985) 11 FCR 114; 61 ALR 516.

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[81,884] Undervalued transactions *120 (1) Transfers that are void against trustee A transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee) is void against the trustee in the transferor’s bankruptcy if:

(a) the transfer took place in the period beginning 5 years before the commencement of the bankruptcy and ending on the date of the bankruptcy; and (b) the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property. Note: For the application of this section where consideration is given to a third party rather than the transferor, see section 121A. [subs (1) am Act 33 of 2006 s 3 and Sch 1[6], opn 31 May 2006]

(2) Exemptions Subsection (1) does not apply to: (a) a payment of tax payable under a law of the Commonwealth or of a State or Territory; or (b) a transfer to meet all or part of a liability under a maintenance agreement or a maintenance order; or (c) a transfer of property under a debt agreement; or (d) a transfer of property if the transfer is of a kind described in the regulations. (3) Despite subsection (1), a transfer is not void against the trustee if: (a) in the case of a transfer to a related entity of the transferor: (i) the transfer took place more than 4 years before the commencement of the bankruptcy; and (ii) the transferee proves that, at the time of the transfer, the transferor was solvent; or (b) in any other case: (i) the transfer took place more than 2 years before the commencement of the bankruptcy; and (ii) the transferee proves that, at the time of the transfer, the transferor was solvent. [subs (3) subst Act 33 of 2006 s 3 and Sch 1[7], opn 31 May 2006]

(3A) Rebuttable presumption of insolvency For the purposes of subsection (3), a rebuttable presumption arises that the transferor was insolvent at the time of the transfer if it is established that the transferor: (a) had not, in respect of that time, kept such books, accounts and records as are

[page 419] usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor’s business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them. [subs (3A) insrt Act 33 of 2006 s 3 and Sch 1[8], opn 31 May 2006]

(4) Refund of consideration The trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee. (5) What is not consideration For the purposes of subsections (1) and (4), the following have no value as consideration: (a) the fact that the transferee is related to the transferor; (b) if the transferee is the spouse or de facto partner of the transferor — the transferee making a deed in favour of the transferor; (c) the transferee’s promise to marry, or to become the de facto partner of, the transferor; (d) the transferee’s love or affection for the transferor; (e) if the transferee is the spouse, or a former spouse, of the transferor — the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975; (f) if the transferee is a former de facto partner of the transferor — the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975. [subs (5) am Act 33 of 2006 s 3 and Sch 1[10], opn 31 May 2006; Act 144 of 2008 s 3 and Sch 2[25], opn 10 Dec 2008; Act 115 of 2008 s 3 and Sch 2[14] and [15], opn 1 Mar 2009]

(6) Protection of successors in title This section does not affect the rights of a person who acquired property from the transferee in good faith and by giving consideration that was at least as valuable as the market value of the property. (7) Meaning of transfer of property and market value For the purposes of

this section: (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; and (c) the market value of property transferred is its market value at the time of the transfer. [s 120 subst Act 44 of 1996 s 3 and Sch 1] SECTION 120 GENERALLY [81,884.1] General principles In Clout (Trustee) v Anscor Pty Ltd [2003] FCA 326; BC200301682, Clout, as trustee in bankruptcy, sought to recover commission moneys paid by the bankrupt Dexter to Anscor by claiming that “those payments are transfers which are void against him as Dexter’s trustee because they were ‘undervalued’ transactions within s 120 [of] the Bankruptcy Act: he claims that the consideration provided by Anscor to Dexter was much less than the amount of the commissions” (at [4]). This was factually a complex application in which Drummond J considered the following matters necessary for construction of the section as it now is, for the determination of whether the contested moneys were Dexter’s own or held by him in trust (see [22]). Drummond J said at [31]: [31] Where A pays money to B, it can be a difficult task to determine whether the relationship between them is that of trustee and beneficiary or debtor and creditor. “The answer to the [page 420] question whether a debt or trust was created in any particular case depends upon the intention of the parties. If the parties intended that the one receiving the money should hold that money for the benefit of the other … then it will be a trust because there is actual trust property. If the payee was entitled to use the money as his own, being under an obligation merely to repay the same amount of money at a future time, then he is merely a debtor.” See Jacobs, Law of Trust in Australia, 6th ed, at para 214. Where it appears that the parties intended that the payee is not to be free to use the money as his own, but must deal with it as a separate fund on behalf of the payer, there will be a trust: see Cohen v Cohen (1929) 42 CLR 91 at 100–1. But the governing consideration is the intention of the parties to be gathered from all the circumstances; so the absence of a prohibition on the recipient paying the money into a general account is not determinative as between trust and debt. See the Associated Alloys case (2000) 202 CLR 588 at 604; [2000] HCA 25 and the Canadian Supreme Court decision, Air Canada v M & L Travel Ltd (1993) 108 DLR (4th) 592 at 603–4, referred to therein and also Stephens Travel Service International Pty Ltd v QANTAS Airways Ltd (1988) 13 NSWLR 331 at 349. He then continued at [44] and [55]: [44] Specific property which a bankrupt holds for the benefit of others is property held by the bankrupt on trust. The trustee in bankruptcy has no claim to such property. But I accept that property of a bankrupt which, by force of s 116 [of] the Bankruptcy Act, vests in the trustee in bankruptcy, includes property in respect of which third parties have only equitable charges. That

property vests in the trustee as property of the bankrupt, but subject to the equitable interests of the chargees. See Re Hodby (Federal Court of Australia, 16 April 1987, unreported) at pars [19] and [20] where Fisher J expressed agreement with the views of White J in Re Goode; Ex parte Mount (1974) 4 ALR 579 at 595 and following. I also accept that, if property of a bankrupt does not cease to be such and accordingly vests in the trustee in bankruptcy pursuant to s 116, where the property is equitably charged in favour of a third party, a transfer of property by a person who later becomes bankrupt, which transfer his trustee in bankruptcy seeks to avoid under s 120, will include property of the bankrupt though equitably charged to third parties. Whether such a charge survives the transfer will depend on general equitable principles as to notice and whether the transferee gave value for the transferred property. … [55] I accept the trustee’s submission that where (as here) it is not possible to identify what part of a mixed fund should be regarded as belonging to or should be appropriated to a particular payee, any trust that might hitherto have existed in respect of the moneys of a particular payee paid into the mixed fund will be destroyed by that impossibility … [His Honour applied Brady v Stapleton (1952) 88 CLR 322; [1952] ALR 989 where it was held that tracing could be applied to such a merged fund to determine individual entitlements.] Determination of whether Anscor gave less value than the amount of the commissions “is to be assessed on an objective basis, not dependent on any special value which Dexter may have subjectively placed on the consideration: [Victorian Producers’ Co-operative Co Ltd v Kenneth [1999] FCA 1488; BC9907102] at para [18], following Sutherland v Brien (1999) 149 FLR 321; [1999] NSWSC 155; BC9900755”: at [63]. Additionally, “In my opinion, the same objective assessment required to be made by s 120(1)(b) has to be made in order to give effect to s 120(4) where it is concluded that the transferee has given consideration of some value, though less than market value, for the property transferred by the bankrupt”: at [79]. His Honour went on to apply those principles in individual tracing claims. Legal history In Anscor Pty Ltd v Clout (Trustee) (2004) 135 FCR 469; [2004] FCAFC 71; BC200401629 (Anscor), Lindgren J set out the legal history of the section (at [24]–[29]): [24] The present s 120 was introduced by the Bankruptcy Legislation Amendment Act 1996 (Cth) (No 44 1996), s 3, Sch 1, Item 208, in substitution for the previous s 120. The former s 120 dealt with certain settlements of property made by a person who became a bankrupt, after, or [page 421] within five years before, the commencement of the person’s bankruptcy (where the settlement was made more than two years before the commencement of the bankruptcy, the provision did not apply if the disponee established that the settlor was, at the time of the settlement, able to pay all his or her debts without the aid of the property settled, and the settlor’s interest in the property passed under the settlement on its execution). [25] The new s 120 applies where the date of the bankruptcy is on or after the commencement of Sch 1, which was on 16 December 1996 (see Item 457 of the Schedule). [26] The former s 120 was itself the successor to s 94 of the Bankruptcy Act 1924 (Cth), which descended from provisions in the various State Insolvency Acts. The relevant English provision was s 42 of the Bankruptcy Act 1914 (UK), which was derived from s 47 of the Bankruptcy Act 1883 (UK), and, originally, s 91 of the Bankruptcy Act 1869 (UK).

[27] Distinct from, but related to, this line of provisions, is the provision avoiding dispositions of property with intent to defraud creditors, which commenced with the Fraudulent Conveyances Act 1571 (UK) (13 Eliz 1 c 5), (“the Statute of Elizabeth”). The Statute of Elizabeth was replaced in England by s 172 of the Law of Property Act 1925 (UK). The Statute of Elizabeth was the progenitor of provisions in Australian State property legislation (see s 37A of the Conveyancing Act 1919 (NSW), s 172 of the Property Law Act 1958 (Vic), s 86 of the Law of Property Act 1936 (SA) and s 89 of the Property Law Act 1969 (WA)), and now of s 121 of the Act (the provision did not form part of the Bankruptcy Act 1924 (Cth)). [28] A third distinct but related provision is that providing for the avoidance of preferences: cf s 122 of the Act and its predecessor, s 95 of the Bankruptcy Act 1924 (Cth). [29] The new s 120 effected two changes from the previous s 120 of present relevance. First, the notion of a transfer of property replaced that of a settlement of property. The former s 120(8) provided that in s 120 “settlement of property” included any disposition of property. The word “property” was (and is) defined widely in s 5. The notion was understood to include money; cf Jack v Smail (1905) 2 CLR 684 at 700. But it was established that a “settlement” required a purpose of conferring benefit on the disponee, and therefore contemplated retention by the disponee of the property settled for at least some period, rather than its immediate dissipation or consumption: see Jack v Smail at 700–701 per Griffith CJ, 709–710 per Barton J; In re Williams; Williams v Lloyd (1934) 50 CLR 341 at 364 per Starke J, 375–6 per Dixon J with whom McTiernan J agreed; Re Pahoff; Ex parte Oglivie v Pahoff (1961) 20 ABC 17; Re La Rosa; Ex parte Norgard v Rocom Pty Ltd (1990) 21 FCR 270 (approved on appeal by Northrop, Davies and Lee JJ on 16 August 1990, unreported); P T Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 533–534; Re Fiorino; Fiorino v Woodgate [1994] FCA 181 (unreported, Gummow J, 14 April 1994) (“Fiorino”) at 9–10 (page numbers in original judgment). Interpretation In Anscor, Lindgren J also set out the following general propositions relating to the interpretation of the section. The remaining two judges did not find it necessary to find as to the matters of general interpretation, by which their Honours referred to the propositions in [43] below: [43] Seventh, in my opinion, the following propositions in relation to the operation of s 120 should be accepted (some of the authorities cited relate to the Statute of Elizabeth provision (intent to defraud creditors), rather than s 120 (transfers for less than full consideration) or its predecessors (settlements). (a) “Void” in the expression “void against the trustee” in s 120 (as in ss 121 and 122) means “voidable”, so that where the debtor/later bankrupt (or a transferee from the debtor) transfers property for no consideration or a consideration less than market value, within the time specified in the section, the transferee (and an acquirer from the transferee) takes a good title, but one which may, depending on the circumstances, be defeated if the trustee elects to avoid the transfer by the debtor/bankrupt: among numerous authorities, see In re Vansittart; Ex parte Brown; In re Brall; Ex parte Norton (“Brall”); In re Carter and Kenderdine’s Contract [1897] 1 Ch 776 (“Carter”); Harrods Ltd v Stanton [1923] 1 KB 516; In re Williams; Williams v Lloyd (1934) 50 CLR 341 at 374; Price v Parsons (1936) [page 422] 54 CLR 332 at 347, 351–352; Re Cummins; Richardson v Cummins (1951) 15 ABC 185 at 188; Brady v Stapleton (1952) 88 CLR 322 at 333–335; Noakes v Harvy Holmes & Son (1979) 37 FLR 5; Barton v Official Receiver (1984) 4 FCR 380 at 393; Re Fitzgerald; Ex parte Burns (1986) 10 FCR 261 at 262–263; Fiorino at 18–21; Baker v Official Trustee in

(b)

(c)

(d)

(e)

(f)

(g)

Bankruptcy [1995] FCA 565 (unreported, Burchett, Ryan and Carr JJ, 3 August 1995) (“Baker”); Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372 (“Alvaro”) at 426; Issitch v Worrell (2000) 172 ALR 586 (“Issitch”) at [36]; Trustee of the Property of O’Halloran, in the matter of O’Halloran v O’Halloran [2002] FCA 1305 (“O’Halloran”) at [77]. (Some modern successors to the State of Elizabeth use “voidable” rather than “void”; see s 89 of the Property Law Act 1969 (WA), s 37A of the Conveyancing Act 1919 (NSW) and s 172 of the Property Law Act 1958 (Vic).) Subject always to the various exceptions and protections in ss 120(2), (3), (4) and (6), where the trustee in bankruptcy elects to avoid, the trustee is entitled, for the purpose of identifying and realising the property of the bankrupt, to have the transfer of property by the debtor treated as not having occurred, and the debtor as having continued to own the property following the transfer until it vests in the trustee (if it does so vest — see below). This does not mean that s 120(1), activated by the trustee’s avoidance, re-vests title in the debtor/bankrupt retrospectively and ab initio, and thereby makes the act of transferring, whether by the debtor-transferor or subsequently by the transferee (or the act of taking a transfer, whether by the transferee or by the subsequent acquirer from the transferee), a wrongful act so as to give rise to a liability in personam in the transferee or acquirer, unless, of course, the transfer in fact occurs after title vests in the trustee (see below), in which case there will be a liability to the trustee on a common money account for money had and received: Halfey v Tait (1875) 1 VLR (Eq) 8 (“Halfey”); Brady v Stapleton at 333, 334; Baker; Alvaro at 426; Valoutin v Furst (1998) 154 ALR 119 at 149; Fiorino at 21. By contrast, s 139ZQ of the Act (inserted by the Bankruptcy Amendment Act 1991 (Cth) with effect from 1 July 1992) provides for a personal liability, by stipulating that where a person has received money or property as a result of a transaction that is void under Div 3 of Pt VI of the Act (ss 120, 121 and 122 are in Div 3), the person may be required by a notice issued by the Official Receiver, on the application of, relevantly, the trustee in bankruptcy, to pay to the trustee an amount equal to the money or the value of the property received, and that the trustee may recover that amount as a debt in a court of competent jurisdiction. Section 120 does not vest property in the trustee in bankruptcy; it makes transfers of property void as against the trustee in bankruptcy. The vesting of property in the trustee in bankruptcy is provided for elsewhere in the Act, as noted below. Where a debtor becomes a bankrupt, there vests forthwith in the trustee in bankruptcy “the property of the bankrupt”, that is, relevantly, the property that belonged to, or was vested in, the bankrupt, at the commencement of the bankruptcy (ss 58, 115, 116, 5(1) (“the property of the bankrupt”)). But, subject to, relevantly, s 120, s 123 will protect any transfers for full market value by the debtor between the commencement of the bankruptcy and the date of the bankruptcy, if the other conditions specified in that section are satisfied. The vesting in the trustee in bankruptcy does not take place upon the commencement of the bankruptcy; it takes place forthwith upon the debtor’s becoming a bankrupt. A debtor becomes a bankrupt on the making of a sequestration order upon a creditor’s petition (s 43(2) of the Act) or upon the endorsement by the Official Trustee of a debtor’s petition as ‘accepted’ (s 55(4A) of the Act). Until then, there is no trustee in bankruptcy in whom property can vest: cf Carter at 780–781 per Lindley LJ. The “commencement of the bankruptcy”, however, marks the time as at which the items of property constituting the “property of the bankrupt” are to be identified. Those items of property constitute the property which vests in the trustee in bankruptcy forthwith upon the debtor’s becoming a bankrupt. Such an item of property will not vest in the trustee in bankruptcy if it no longer exists when the debtor becomes a bankrupt, or if it still exists then but has been

[page 423] transferred in the meanwhile for full value under a transaction protected by s 123 as mentioned in the preceding paragraph. Statements to the effect that avoidance by the trustee is effective as from “the date of the accruer of [the trustee’s] title, or, in other words … from the date of the act of bankruptcy to which the title of trustee relates back” (Carter at 782 per AL Smith LJ — and see Fiorino at 18 and Alvaro at 426–427), do not signify that there is an actual vesting in the trustee at the commencement of the bankruptcy. They signify that, the transfer by the debtor/bankrupt being disregarded, if the property still exists at the commencement of the bankruptcy, it will form part of the property of the bankrupt which will vest in the trustee forthwith upon the debtor’s becoming a bankrupt, if the property also still exists then. (h) If the property the subject of a transfer made void by s 120 as a result of the trustee’s election to avoid, still exists in specie as at the commencement of the bankruptcy, it will vest in the trustee in bankruptcy forthwith upon the debtor’s becoming a bankrupt if it also still exists then (by reason of ss 58, 115, 116 and 5(1) (“the property of the bankrupt”), subject always to the exceptions and the protections given to third parties found in s 120. From the date of the bankruptcy, the owner will have had the property in trust for the trustee in bankruptcy, and, if the owner sells it after that date, will be accountable to the trustee for the proceeds of sale as for money had and received: cf Brall at 384; Brady v Stapleton at 334; Alvaro at 426; Fiorino at 21. (In Fiorino, the sale by the bankrupt’s mother, to whom the bankrupt had given the property, took place after the making of the sequestration order and before avoidance by the trustee. Gummow J held that she had held the property on trust for the trustee in bankruptcy and came under a personal liability to him “to account for, as money had and received, the proceeds of the sale of the property by her”.) (i) If the property the subject of a transfer made void by s 120 as a result of the trustee’s election to avoid, no longer exists in specie as at the commencement of the bankruptcy, but can be seen to exist as at that date in an identifiable substitute form of property, such as a fund representing the proceeds of sale of the property, that substitute property will vest in the trustee in bankruptcy forthwith upon the debtor’s becoming a bankrupt, if that substitute property, or an identifiable substitute for it, still exists then, subject, as ever, to the exceptions and the protections given to third parties found in s 120: cf Alvaro at 426–427; Halfey; Re Mouat; Kingston Cotton Mills Co v Mouat [1899] 1 Ch 831 (“Mouat”) at 834–835; Brady v Stapleton at 332–333; Lumsden v Snelson [2001] FCA 83 at [24]–[27]. (j) If, at the commencement of the bankruptcy, property the subject of a transfer made void by s 120 exists neither in specie nor in an identifiable substitute form, equitable relief founded in equity’s auxiliary jurisdiction may nonetheless be available to the trustee in bankruptcy. This may occur where, for example, the property, such as money, can be “followed” or “traced” into, other property which is not, however, simply an identifiable substitute for it: cf Mouat at 834–835; Trautwein v Richardson [1946] Arg LR 129; Issitch at [36]; O’Halloran at [80] per Allsop J and works cited by his Honour. In such a case an equitable charge over that other property in favour of the trustee in bankruptcy for the amount of the value of the property, or the amount of money which the debtor/bankrupt transferred plus interest, will often be found to be an appropriate remedy: for a recent illustration, see Fodare Pty Ltd v Official Trustee in Bankruptcy [2000] FCA 1721. (k) Where s 120 makes a transfer of property void, s 120(4) obliges the trustee in bankruptcy to pay to the transferee an amount equal to the value of any consideration the transferee gave for the transfer. There is no comparable provision relating to a transfer for less than full consideration by the transferee to an acquirer (cf s 120(6)). In the event of an effective

avoidance by the trustee of a transfer from the debtor-transferor to the transferee, general law principles would give an acquirer from the transferee who gave some, but less than full, consideration, a personal right of recovery from the transferee, because the acquirer would at the same time be deprived of title to that for which he or she provided the consideration. In the absence of s 120(4), general law principles would apparently have [page 424] given the transferee a similar right of recovery from the bankrupt, and a right to prove as a creditor in the bankruptcy. But s 120(4) goes further by imposing a personal liability on the trustee in bankruptcy in favour of the transferee for the full amount of the value of the consideration. Judge Mansfield in Ambrose (Trustee) in the matter of Poumako (Bankrupt) v Poumako (No 3) [2013] FCA 22; BC201300193 stated at [20]–[21]: [20] In my view, the jurisdictional foundation for the making of such orders rests in s 30 of the Act. It is beyond doubt and it is well established that equity may be used to assist to give a trustee, and the creditors, of a bankrupt equitable remedies which support the enforcement of legal remedies prescribed under legislation: In Re Mouat; Kingston Cotton Mills Co v Mouat [1899] 1 Ch 831. In Verge v Devere Holdings Pty Ltd (No 5) [2010] FCA 1452; BC201009876 at [43], it was said that a court of equity will assist a trustee in bankruptcy to obtain an effective remedy following the avoidance of a disposition. Thus, eg, in Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372; 138 ALR 341; BC9602616 the Court ordered that a charge be placed on some real estate acquired as a result of a disposition of money from a bankrupt to a transferee which had been declared void, when it was shown that the money had been spent by the transferee to acquire that real estate. See also Lumsden v Snelson [2001] FCA 83; BC200100250. [21] There are some older examples of similar principles in operation. In Johnson v Royal Mail Steam Packet Company (1867) LR3CP 38, a ship had been mortgaged by the owner to a third party, which subsequently took possession of the ship under the terms of the mortgage. The mortgagee was then obliged to meet the indebtedness of a charterer of the ship owner to members of the charterer’s crew for unpaid wages, so as to maintain his title to the ship un-der the mortgage. The mortgagee then successfully sued to recover from the charterer the money the mortgagee had paid to the crew. See also Noyes v Ellis (1877) 3 VLR (L) 307. At [22] the learned judge set out the practical application of such remedies, and, it is submitted, how they fit into the scheme of the section: To paraphrase those requirements, and to apply them to the present circumstances in respect of the matters discussed above, in my view the liability of Mr Ambrose to repay the mortgages granted by Jacqueline Poumako and Mrs Cassidy respectively falls upon him by reason of s 120(6) of the Act once the transfers of those properties to them became void as against Mr Ambrose as the trustee in bankruptcy of Mr Poumako; secondly, Mr Ambrose’s payment of those amounts then to reduce their indebtedness secured by the respective mortgages will benefit Jacqueline Poumako and Mrs Cassidy respectively by reducing their respective indebtedness in respect of the loans secured by the mortgages; and thirdly, Mr Ambrose’s assumption of the liability under those mortgages was not due to “officiousness” on his part but due to his claim properly made under s 120(1) of the Act, pursuant to the duty which he had as trustee of the bankrupt estate of Mr Poumako to pursue those assets reasonably available to him for the benefit of the creditors of the bankrupt estate: see s 19(1)(f) of the Act.

In Combis (Trustee) v Spotiswood (No 2) [2013] FCA 240; BC201301191 Logan J said of Anscor at [44]: The result is that there have been under the Deeds of Gift what are to be taken as transfers of property namely, payments of money to Mrs Spottiswood by Mr Spottiswood for consideration of no value less than 5 years prior to the commencement of his bankruptcy. By operation of s 120 of the Act, these transfers are void as against the trustees. The operation of the Act in these circumstances is then as carefully summarised by Lindgren J in Anscor Pty Ltd & Others v Clout & Another (2004) 135 FCR 469 at 481–483, at [43](e) to (k) (Anscor). The transfers occurred prior to the commencement of the bankruptcy and before any vesting of the property of the bankrupt in the trustees as a result of the making of the sequestration order. In the circumstances of this case, Mrs Spottiswood is liable to account to the trustees for the total of those transfers of money namely, $3,693,412.85 as money had and received. [page 425] This succinctly ties together the above principles. The judge added at [45] that the fact that no consideration passed did not assist but that having bound herself by deed to that position she could not resile from it: Dabbs v Seaman (1925) 36 CLR 538 at 549; 31 ALR 402; 42 WN (NSW) 146a; BC2500019 per Isaacs J. Estoppel arising out of the section In Rambaldi v Woodward [2013] FCA 89; BC201300596 Jessup J in considering an application for leave to appeal, dealt with the employment of the section to found a claim for Anshun like estoppel. The learned judge at [7] put the proposition that the primary judge “… had failed to have regard to the importance to the applicants of the amendments that would introduce the claim proposed to be made under s 120 of the Bankruptcy Act. It is true, that in the passage to which I have referred, her Honour did not advert to the importance of the claim under s 120, but in my view that was implicit. A submission made on the present application on behalf of the applicants is that an Anshun estoppel would, or at least would probably arise if the applicants, on a later occasion and in separate proceedings, sought to rely upon s 120 to avoid the payments made by the bankrupt to the mortgage account of the respondent. I am disposed to think that an argument based on such an estoppel would have considerable prospects of succeeding, but the difficulty is that this consideration was not, at least explicitly, advanced before the primary Judge by the applicants.” The fact that such an action might lie in such a case, although leave was refused in this case is noted. [81,884.5] Equitable interest in bankrupt estate In Jabbour v Sherwood [2003] FCA 529; BC200302655 French J held that an equitable interest under Muschinski v Dodds (1985) 160 CLR 583; 62 ALR 429 and Baumgartner v Baumgartner (1987) 164 CLR 137; 76 ALR 75 could be legitimately raised in proceedings appealing against a s 120 and a s 121 order. The facts on that issue were that it was claimed that the appellant claimed an equitable interest in the bankrupt’s interest in the property by reason of her payments of the mortgage and in failing to hold that the transfer was of only the bankrupt’s remaining interest. The magistrate at first instance failed to make a finding on this issue: at [71]. On the basic issue his Honour held at [76]–[77]: “The proposition that a claim to an equitable interest, based upon a common intention constructive trust, may be good against the trustee in bankruptcy is established by the judgment of the Full Court in Parsons v McBain (2001) 109 FCR 120 which overruled the contrary view previously expressed in Re Osborn (1989) 25 FCR 547. Parsons v McBain concerned a transfer of land by a husband, who later became bankrupt, to his wife. The trustee in bankruptcy had obtained an order at first instance avoiding

the transfer pursuant to ss 120 and 121 of the Bankruptcy Act. The Full Court held, contrary to the reasoning in Re Osborn, that a constructive trust does not arise when the court declares it to exist. It is a pre-existing equity. The transfer of the legal estate of the moiety beneficially owned by the wife in that case was not void against the trustee. Their Honours said, after reviewing relevant case law including Giumelli v Giumelli (1999) 196 CLR 101: ‘… the notion that a “common intention constructive trust” first comes into existence when so declared by the Court must be rejected. In virtue of the fact that such a view informed the decision in Re Osborn, the case should not be followed.’ (at 125) “In light of the schedule of payments the maximum amount of the appellant’s monetary contribution to mortgage repayments would not have exceeded about $15,000 … That reconsideration would also affect the conclusions as to the validity of the notice under s 139ZQ to the extent that, in the amount which it demanded, it did not recognise any equity. In the circumstances I propose to allow the appeal and remit it to the magistrate to give proper consideration to the question of any equitable interest and, if there be such an interest, to provide for an appropriate reduction in the amount payable by the appellant.” [page 426] In Re Doyle; Ex parte Brien v Doyle (1993) 41 FCR 40; 112 ALR 653; BC9304635 Burchett J said at FCR 55 that the word “property” should be confined to domestic law. The Court of Appeal of WA held per Pullin JA in Man Mahan Singh v Sardul Singh (2009) 253 ALR 575; [2009] WASCA 53; BC200901039 at [75]: [75] Doyle’s case is distinguishable because s 120(1) of the Bankruptcy Act 1966 (Cth) by force of the provision itself, stated that certain settlements of property were void. The section is not concerned with fraudulent dispositions of property. Section 89 of the Property Law Act 1969 (WA) confers a right on certain persons to avoid fraudulent dispositions of property carried out with fraudulent intent. Clearly there must be some territorial limitation. Thus, to take an extreme example, it may be assumed that it does not confer a right on a person in China to avoid a transaction carried out in China between two other Chinese nationals resident in China concerning a property in Russia. However, the section has no extraterritorial operation insofar as it confers a right on a person resident in Western Australia to avoid the disposition of property by acts performed in the State by a person resident in the State. Parliament does not legislate extraterritorially if it legislates concerning fraudulent conduct (occurring in the State) by a person resident within the State. [76] It may be inferred that by conferring a right on a person to avoid a fraudulent alienation of property, Parliament intended that right to be conferred in a way which would correspond with the right a person had under the Elizabethan statute and under the common law before that. That right extended to immoveable property out of the jurisdiction. But in Conlan v Stone [2012] FCA 1359; BC201209378 McKerracher J specifically raised the principles of Giumelli v Giumelli (1999) 196 CLR 101; 161 ALR 473; [1999] HCA 10; BC9901018 at [127] of his judgment: I raised with counsel for the Trustee the High Court decision of Giumelli v Giumelli (1999) 196 CLR 101 which shares some factual similarities to the present situation. The sons might be said to have relied on assurances given in conjunction with the Deed, foregoing their entitlement to claimed wages and foregoing any other entitlement to claim more concrete security for payments of wages or other debts which might have been due to them. There are multiple difficulties,

however, with this comparison. First, it was not the basis upon which the case was argued. Secondly, there is no adequate evidence as to the terms of the promises or exactly what was given up. Thirdly, while there might be some parallels, Giumelli operated so as to create an equity between the promisee and the promisor. It did not have the effect of withdrawing property from the bankrupt estate to the disadvantage of third party creditors. It seems likely that a case in equity will surely be raised in similar circumstances. This reasoning is consistent with what is said above concerning the formation of trust instruments. See also [81,884.1]. The above cases set out the principles. The presumption of advancement is considered in Aravanis (Trustee), in the matter of Aravanis (trustee) Re Gillespie (bankrupt) v Gillespie [2014] FCA 630; BC201404670 at [10] with particular reference to Calverley v Green (1984) 155 CLR 242 at 246 and 266; BC8400459. [81,884.8] Onus of proof and principles The trustee bears the onus of proving either that no consideration was provided or that it was provided at an undervalue. It is not necessary for the court to determine the question raised by s 120(4), or even at the same time as the question raised by s 120(1). See the judgment of Merkel J in Victorian Producers’ Co-operative Co Ltd v Kenneth [1999] FCA 1488; BC9907102 at [23]. The onus of proving the main purpose lies upon the applicant, but the conclusion can be drawn from all relevant circumstances: see Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557 at 566–7; 153 ALR 163 at 168 per Brennan CJ and McHugh J. That intent would be inferred when proper funds available for the payment of creditors became insufficient as in PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 524; 107 ALR 199, and it may be established by reference to future creditors as in Barton v DCT (Cth) (1974) 131 CLR 370 at 374; 48 ALJR 407. [page 427] These principles were applied by Hill J in Andrew v Zant Pty Ltd [2004] FCA 1716; BC200409334. [81,884.10] Consideration Unremunerated work in a marriage may amount to consideration, as in Mateo v Official Trustee in Bankruptcy (2002) 117 FCR 179; 188 ALR 667 at 673–4 and Lopatinsky v Official Trustee in Bankruptcy (2002) 29 Fam LR 274; [2002] FCA 861; BC200203820. The release from an obligation to pay maintenance may be valuable consideration: Re Sabri; Ex parte Brien v Australia and New Zealand Banking Group Ltd (1997) 137 FLR 165; 21 Fam LR 213. However, the trustee’s contention in Lopatinsky at [39] was that the consideration was past. Moore J held in that case at [45], [47] that the question was whether the consideration was a forbearance when, even after the event, it can amount to consideration, as was held in Wigan v English and Scottish Law Life Assurance Assn [1909] 1 Ch 291 at 303 per Parker J, and in Re Abbott [1983] 1 Ch 145; [1982] 3 All ER 181; [1982] 3 WLR 86. On appeal in Official Trustee in Bankruptcy v Lopatinsky (2003) 30 Fam LR 499; [2003] FCAFC 109; BC200302685, Whitlam and Jacobson JJ held at [101]–[102]: “Those passages indicate that his Honour endeavoured to value the ‘consideration’ provided by Mrs Lopatinsky upon the basis of her financial and non-financial contributions to the marriage in accordance with the criteria referred to in s 79 of the Family Law Act. “The short answer to this appeal is therefore that the primary judge’s view of the value of the consideration given by Mrs Lopatinsky depended upon factors which cannot provide a basis for assessing the value of the consideration which was given.” The court stated at [103] that actual forbearance to sue does not constitute consideration unless it is

evidence of an implied promise to forbear or unless it is given at the express or implied request of the other party: see Alliance Bank v Broom (Ltd) (1864) 2 Dr & Sm 289. The court also held at [105]: “[It] is well-established by authority of the Full Court of the Family Court that a wife cannot, by entering into an agreement with her husband, preclude herself from applying to the court for an order for maintenance or property adjustment: see In Marriage of Woodcock per Murray, Baker and Kay JJ.” [81,884.12] Constructive trust In Official Trustee in Bankruptcy v Lopatinsky (2003) 30 Fam LR 499; [2003] FCAFC 109; BC200302685 the Full Court of the Federal Court applied the principles of Muschinski v Dodds (1985) 160 CLR 583 at 614; 62 ALR 429 to the wife’s claim, holding that the constructive trust is a remedial institution imposed by equity without regard to the actual or presumed intentions of the parties, and that the relevant events which lead to the finding of an interest may occur after acquisition and beneficial interests may change in the course of the relationship: see Green v Green (1989) 17 NSWLR 343 at 355–6; 13 Fam LR 336 per Gleeson CJ. The court applied Baumgartner v Baumgartner (1987) 164 CLR 137; 76 ALR 75 to reach a conclusion that upheld a trust; it concluded that Re Bond; Ex parte Bond v Caddy (No 1) (1994) 11 WAR 330 at 336; 115 FLR 152, which was a decision under s 139ZL(2) of the Bankruptcy Act, should nonetheless be applied to s 139ZQ(2) of the Act; and it determined that the notice provided by the official trustee need not be set aside. The matter was returned to Moore J in Lopatinsky v Official Trustee in Bankruptcy (2003) 31 Fam LR 267; [2003] FCA 1256; BC200306641 where that judge determined at [16], in relation to the constructive trust: “I have little doubt that, in these circumstances, the principle in Baumgartner v Baumgartner (1987) 164 CLR 137 would operate, as the Full Court suggested it might, to erect a constructive trust in relation to the Peakhurst property against the asserted interest of the Trustee when assuming the position of the bankrupt. It was recognised in Baumgartner v Baumgartner (at 150) that contributions both financially or in kind can be called into account. As Deane J noted in the earlier case of Muschinski v Dodds (1985) 160 CLR 583, the indirect contribution of one party can take the form of support, home-making and family care. The applicant provided all of these things in large measure in addition to her financial contribution. As Debelle J noted in Parij v Parij (1997) 72 SASR 153 at 166, substantial and not token regard should be had to the contribution of a partner [page 428] who is the home maker and care giver. I should note that in that matter, the members of the Full Court identified, by a mechanism involving no particular exactitude, the interest in a constructive trust of the former de facto wife (in property, the legal title of which was vested in the former de facto husband) as one-fifth (Cox and Millhouse JJ), on the one hand, and one-third (Debelle J) on the other. In the present case the applicant, with the assistance of her parents, overwhelmingly assumed the role, in relevant respects, as the provider of funds as well as the home maker and care giver.” [81,884.14] Equity will assist trustee with an effective remedy In Verge v Devere Holdings Pty Ltd (No 5) [2010] FCA 1452; BC201009876 stated: [43] In Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372 (at 390–391) Wilcox and Cooper JJ held that a court of equity will assist a trustee in bankruptcy to obtain an effective remedy following the avoidance of a disposition. That case dealt with the former s 121 and the former language of disposition rather than transfer. There had been a disposition and the property had not been retained but had been transferred into other identifiable property or mixed with property of a third party. The court held that the court will allow a remedy against the identified

specific property in order to give the trustee in bankruptcy an effective remedy upon the avoidance of the property. As is usual with that judge the proposition is stated effectively and succinctly. His Honour required “a transfer of an undivided one-sixth interest in the land” to achieve this result. Judge Mansfield in Re Ambrose (Trustee); Poumako (Bankrupt) v Poumako (No 3) [2013] FCA 22; BC201300193 at [20] summed up the principle: In my view, the jurisdictional foundation for the making of such orders rests in s 30 of the Act. It is beyond doubt and it is well established that equity may be used to assist to give a trustee, and the creditors, of a bankrupt equitable remedies which support the enforcement of legal remedies prescribed under legislation: In Re Mouat; Kingston Cotton Mills Co v Mouat [1899] 1 Ch 831. In Verge v Devere Holdings Pty Ltd (No 5) [2010] FCA 1452 at [43], it was said that a court of equity will assist a trustee in bankruptcy to obtain an effective remedy following the avoidance of a disposition. Thus, eg, in Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372 the Court ordered that a charge be placed on some real estate acquired as a result of a disposition of money from a bankrupt to a transferee which had been declared void, when it was shown that the money had been spent by the transferee to acquire that real estate. See also Lumsden v Snelson [2001] FCA 83. The learned judge added some additional examples at [21]: There are some older examples of similar principles in operation. In Johnson v Royal Mail Steam Packet Company (1867) LR 3 CP 38, a ship had been mortgaged by the owner to a third party, which subsequently took possession of the ship under the terms of the mortgage. The mortgagee was then obliged to meet the indebtedness of a charterer of the ship owner to members of the charterer’s crew for unpaid wages, so as to maintain his title to the ship under the mortgage. The mortgagee then successfully sued to recover from the charterer the money the mortgagee had paid to the crew. See also Noyes v Ellis (1877) 3 VLR (L) 307. [81,884.20] Maintenance agreements and orders See [81,900.20]. [81,884.21] Can s 30 overcome s 120(1)? In Tyler v Thomas [2006] FCAFC 6; BC200200498, a Full Court of the Federal Court (Branson, Bennett and Graham JJ) had to consider whether a Federal Magistrate was able to rely on the powers of s 30 of the statute, which provides that the court has full powers to make orders giving effect to decisions of the court, to disregard the strict requirement of s 120(1) that the transferee was required to give consideration for the transfer or give consideration of no less value than the market value of the property. The court held, in the words of Branson J at [13], that s 30(1) was intended to give wide powers to carry out the effect of the statute but was not a source of power to override express provisions of the statute. See also Re Bilen; Ex parte Sistrom (FCA, Neaves J, 706/1983, 11 April 1985, unreported; BC8501292). [page 429] [81,884.30] Effect on s 139ZQ In Lin v Official Trustee in Bankruptcy (No 1) (2001) 187 ALR 220; [2001] FMCA 106 at [12]–[13] Raphael FM summarised the effect of the section, particularly in relation to s 120. See [82,113ZQ.10]. [81,884.35] Orders made in absence An observation made by Siopis J in Bou Francis v Anderson (as trustee of the bankrupt estate of Sarkis Bou Francis) [2008] FCA 2006; BC200811740 to the effect that

Rule 16.05 of the Federal Magistrates Court Rules 2001 (Cth) permits an order made under s 120(1) to be set aside if it is made in the absence of any party is obviously directly applicable to many cases. Rule 16.05 permits a party to apply to vary or set aside a judgment made in their absence. REPEALED PROVISION — SECTION 120 BEFORE 16 DECEMBER 1996 [81,885] Avoidance of voluntary and marriage settlements Section 120 as it existed prior to substitution by Act 44 of 1996 is reproduced below, with commentary as applicable prior to its repeal. It applies to bankruptcies for which the date of the bankruptcy was before 16 December 1996. Avoidance of voluntary and marriage settlements 120 (1) A settlement of property, whether made before or after the commencement of this Act, not being: (a) a settlement made before and in consideration of marriage, or made in favour of a purchaser or encumbrancer in good faith and for valuable consideration; or (b) a settlement made on or for the spouse or children of the settlor of property that has accrued to the settlor after marriage in right of the spouse of the settlor; is, if the settlor becomes a bankrupt and the settlement came into operation after, or within 2 years before, the commencement of the bankruptcy, void as against the trustee in the bankruptcy. [subs (1) am Act 12 of 1980 s 56] (2) A settlement of property, whether made before or after the commencement of this Act, not being a settlement referred to in paragraph (1)(a) or (b) or a settlement that is void as against the trustee by reason of the operation of that subsection, is, if the settlor becomes a bankrupt and the settlement came into operation after, or within 5 years before, the commencement of the bankruptcy, void as against the trustee in the bankruptcy, unless the parties claiming under the settlement prove: (a) that the settlor was, at the time of making the settlement, able to pay all his debts without the aid of the property comprised in the settlement; and (b) that the settlor’s interest in the property passed to the trustee of the settlement or to the donee under the settlement on its execution. [subs (2) am Act 12 of 1980 s 56] (3) A covenant or contract made, whether before or after the commencement of this Act, in consideration of marriage either: (a) for the future payment of money to the settlor’s spouse or children; or (b) for the future settlement of property on or for the settlor’s spouse or children; being money or property in which the settlor did not, at the date of the marriage, have any estate or interest, whether vested or contingent, in possession or remainder, and not being money or property of, or in right of, the settlor’s spouse, is, if the settlor becomes a bankrupt and the covenant or contract was executed after the commencement of the bankruptcy, void as against the trustee in the bankruptcy. [subs (3) am Act 12 of 1980 s 56] (4) The persons entitled under the covenant or contract may claim for dividend in the settlor’s bankruptcy under the covenant or contract, but such a claim 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 139H(1)) have been satisfied. [subs (4) am Act 12 of 1980 s 56; Act 119 of 1987 s 44]

[page 430] (5) A payment of money or transfer of property made by the settlor in pursuance of such a covenant or contract, whether before or after the commencement of this Act, is void as against the trustee in the settlor’s bankruptcy, unless the persons to whom the payment or transfer was made prove: (a) that the payment or transfer was made more than 2 years before the commencement of the bankruptcy; (b) that at the date of the payment of transfer the settlor was able to pay all his debts without the aid of the money so paid or the property so transferred; or (c) that the payment or transfer was made in pursuance of a covenant or contract to pay or transfer money or property expected to come to the settlor from, or on the death of, a particular person named in the covenant or contract and was made within 3 months after the money or property came into the possession or under the control of the settlor. (6) Where any such payment of money or transfer of property is void as against the trustee in the settlor’s bankruptcy by virtue of the subsection (5), the persons to whom the payment was made or the property was transferred are entitled to claim for dividend under the covenant or contract as if it had not been executed at the commencement of the bankruptcy. (7) Nothing in this section shall be taken to affect or prejudice the title or interest of a person who has, in good faith and for valuable consideration, purchased or acquired from the persons entitled to the benefit of the settlement, covenant or contract or from the trustee of the settlement the money or property the subject of the settlement, covenant or contract or an interest in that money or property. (8) In this section, settlement of property, includes any disposition of property. Section 120 Generally (Before 16 December 1996) [81,885.5] “settlement” — s 120(1) (before 16/12/96) For a detailed examination of the meaning of this term and the relevant authorities, see Re Kastropil; Ex parte Official Trustee in Bankruptcy (1991) 33 FCR 135; 109 ALR 568. In that case, French J considered that, in order for a disposition of property to be a “settlement” within the meaning of s 120, some permanent retention of the property by the donee must be contemplated, and not its immediate dissipation. Payments intended for expenditure of an income kind, such as a housekeeping allowance, school fees, entertainment or living expenses, may be difficult to characterise as a settlement. Each case will depend on its own facts: Re Kastropil; Ex parte Official Trustee in Bankruptcy (1991) 33 FCR 135; 109 ALR 568 at 575. The Full Court of the Federal Court of Australia approved French J’s views in Re La Rosa; Ex parte Norgard v Rocom Pty Ltd (FCA, Full Court, No 12/90, 16 August 1990, unreported), holding that s 120 will not operate to avoid a transaction unless the disposition was intended to secure an enduring benefit and there was no contemplation of the property’s immediate dissipation or consumption. French J’s decision at first instance is reported in Re La Rosa; Ex parte Norgard v Rocom Pty Ltd (1990) 21 FCR 270; 93 ALR 571. The seminal case is Re Player; Ex parte Harvey (1885) 15 QBD 682 which concerned a gift of money by a bankrupt to his son for the purpose of enabling him to commence business on his own account. The court held that the then English equivalent of s 120 was never intended to catch such transactions which, as a matter of moral obligation, are perfectly proper and right. The impracticability of tracing the gift into capital of business was a factor which also influenced the court’s decision (per Mathew J at 684 and Cave J at 687; compare Re Plummer [1900] 2 QB 790 at 804 per Lord Alverstone MR). The principle enunciated in Re Player; Ex parte Harvey, above has since been widely approved: Davey v Danby (1887) 13 VLR 957 at 965; Jack v Smail (1905) 2 CLR 684; Re Vansittart [1893] 1 QB

181; Re Tankard [1899] 2 QB 57; Re Plummer, above; Re Harrison & Ingram [1900] 2 QB 710 at 718; Williams v Lloyd (1934) 50 CLR 341; 7 ALJR 463; Re Trautwein (1944) 14 ABC 61; Re Pahoff (1961) 20 ABC 17; NA Kratzmann Pty Ltd (in liq) v Tucker (1966) 123 CLR 257; Re Hyams; Official Receiver v Hyams (1970) 19 FLR 232; Barton v Official Receiver (1986) 161 CLR 75 at 78; 66 ALR 355; Re La Rosa; Ex parte Norgard v Rocom Pty Ltd, above (French J); Lyford v Commonwealth Bank of Australia (1995) 130 ALR 267. The substitution of s 120(8) to define “settlement of property” as including “any disposition of property” arguably had the effect of broadening the range of transactions caught by s 120. In Re [page 431] Ward; Official Trustee in Bankruptcy v Dabnas Pty Ltd (1984) 55 ALR 395, Wilcox J stated that s 120(8) gave “a new wider definition of ‘settlement’ as offering to Australian courts the opportunity to rethink the desirability of adhering to the traditional test”. In the course of declaring void the forgiving of a debt, he questioned the continued application of the retention and permanency tests, considering that the definition of “settlement” no longer has the connotation of permanent benefit suggested by “conveyance or transfer” of property and that it is immaterial whether the property will be held indefinitely in specie, converted to some other form of capital or spent by the donee (at 401). Although his view was expressly disapproved of by French J in Re La Rosa; Ex parte Norgard v Rocom Pty Ltd, above, ALR at 588, it found obiter support in the decisions of Sweeney and Fisher JJ in Barton v Official Receiver (1984) 4 FCR 380; 58 ALR 328 at 335, 336; compare Official Trustee in Bankruptcy v Arcadiou (1985) 8 FCR 4 at 10 per Woodward and Northrop JJ. See also Official Trustee in Bankruptcy v Baker (1995) 3 InsolvLJ 6n. [81,885.10] “purchaser” — s 120(1)(a) (before 16/12/96) See Re Barton; Ex parte Official Receiver v Barton (1983) 52 ALR 95; 76 FLR 223 for a discussion of the line of cases which state, inter alia, that the word “purchaser” is to be understood in a commercial sense. The purchaser must also be a bona fide purchaser. It is impossible to consider whether a person is a “purchaser” without having regard to the question of whether “valuable consideration” is supplied: Re Johnstone; Ex parte Cole (1984) 3 FCR 32. [81,885.15] “good faith” — s 120(1)(a) (before 16/12/96) Knowledge or suspicion by the “purchaser” of the inability of the bankrupt to pay debts as they fall due negatives good faith (see Re Barton; Ex parte Official Receiver v Barton (1983) 52 ALR 95; 76 FLR 223), but mere knowledge of a substantial claim against the bankrupt does not. Good faith is concerned with “the actual state of mind of the person who took under the disposition”: Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364 at 371–2; 110 ALR 484. It is only material that the transferee act in good faith for there to be a valid disposition under s 120(1)(a). In Re Hatzimarcos; Ex parte Dixon (FCA, Fox J, W206 of 1982, 11 September 1984, unreported), it was held that the mere knowledge by the purchaser’s solicitor of the inability of the bankrupt to pay debts as they fell due would not be imputed to the purchaser. The transferee does not act in good faith when, knowing the bankrupt is unable to pay his debts, the transferee also knows that the property transferred reduces the amount available to the bankrupt’s creditors. See Re Louwen; Ex parte Walker (FCA, Franki J, 113 of 1981, 28 April 1983, unreported); Re Johnstone; Ex parte Cole (1984) 3 FCR 32. Knowledge on the part of the disponee that some fraud or preference contrary to the statute is intended will negative good faith: Re Hyams; Official Receiver v Hyams (1970) 19 FLR 232 at 256; Century 21 (South Pacific) Pty Ltd (in liq) v Century 21 Real Estate Corp (1996) 136 ALR 687 at 697. Oral evidence will always be admissible on the issue of “good faith”, even though that evidence has the effect of adding to, varying or contradicting the written terms of the instrument constituting the

settlement of property. See Re Hyams; Official Receiver v Hyams, above; Official Trustee in Bankruptcy v Arcadiou (1985) 8 FCR 4. A disponee will not act in good faith if he or she knows or suspects that the effect of the disposition will be to disadvantage creditors. It is not a requirement of lack of good faith that the disponee be aware of any intention on the part of the disponor to disadvantage his or her creditors: Wansley v Edwards (1996) 68 FCR 555; 148 ALR 420. See also Shirlaw v Malouf (1989) 15 ACLR 641; PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515; 107 ALR 199. [81,885.20] “valuable consideration” — s 120(1)(a) (before 16/12/96) A purchaser for valuable consideration within the meaning of s 120(1)(a) is one who has given consideration which has a real and substantial value and not one which is merely nominal, trivial or colourable: Barton v Official Receiver (1986) 161 CLR 75; 66 ALR 355. Valuable consideration does not have to be fully adequate consideration, nor need it be equal, or even nearly equal, to the value of the property: Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364; 110 ALR 484; Century 21 (South Pacific) Pty Ltd (in liq) v Century 21 Real Estate Corp (1996) 136 ALR 687 at 695. [page 432] A forbearance to sue, or a compromise of claim, may be valuable consideration for the purposes of s 120, so long as the forbearance or compromise is genuine: Linter Group (in liq) v Goldberg (1992) 7 ACSR 580 at 666 et seq; Re Pope; Ex parte Dicksee [1908] 2 KB 169; Re Abbott [1983] 1 Ch 145; [1982] 3 All ER 181; [1982] 3 WLR 86. A promise or covenant to repay a loan may be valuable consideration. The “reality” of the transaction is relevant to determining whether the promise or covenant to repay is valuable consideration. See Re Barton; Ex parte Official Receiver v Barton (1983) 52 ALR 95; 76 FLR 223 for a further discussion of the authorities. The court will look at the real intent of the whole transaction to determine if valuable consideration is given: Re Johnstone; Ex parte Cole (1984) 3 FCR 32. See also Re Brunner; Ex parte Official Trustee in Bankruptcy (1984) 2 FCR 6, where the court held that a promise to repay money with interest upon demand constituted valuable consideration, and made reference to additional advantages obtained by the transferee, such as free accommodation. See also Barton v Official Receiver, above. The consideration need not appear on the face of the deed, for “the court is bound to consider the broad effect of the arrangement embodied in the deed, and should not confine itself, in any narrow sense, to the technical language of the document”: Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364 at 370; 110 ALR 484; Century 21 (South Pacific) Pty Ltd (in liq) v Century 21 Real Estate Corp, above at 695. The mere fact of a difference between actual consideration paid and the consideration set out in the contract is not sufficient, in the absence of other evidence, to defeat the saving provision of s 120(1)(a). See Re Hatzimarcos; Ex parte Dixon (FCA, Fox J, 11 September 1984, No W206 of 1982, unreported). Section 120 only requires investigation as to whether the transaction in question is a “settlement made … for valuable consideration”. The court cannot be asked to go further and construe the transaction, or determine if the money is owing under it, or consider if it is capable of enforcement. See Official Trustee in Bankruptcy v Arcadiou (1985) 8 FCR 4. [81,885.23] “valuable consideration” — s 120(6) In Anscor Pty Ltd v Clout (Trustee) (2004) 135 FCR 469; [2004] FCAFC 71; BC200401629, Lindgren J, in considering the appeal of the trustee, applied

Tooheys Ltd v Cmr of Stamp Duties (NSW) [1960] NSWR 302; (1960) 60 SR(NSW) 539 at 548; 77 WN (NSW) 495 per Walsh J (affirmed by the High Court in Tooheys Ltd v Cmr of Stamp Duties (NSW) (1961) 105 CLR 602; [1962] ALR 195; (1961) 35 ALJR 109; BC6100860). His Honour noted the words of Walsh J as follows (at [200]): [200] … An acceptance of a trust and an agreement to held the trust property upon the terms of the trust and to administer it accordingly, do not constitute the giving of consideration by the trustees for the property so accepted. If it were so, every trust would have to be regarded as created for full consideration. And, at [204], noted the words of Dixon CJ: [204] … The company as the party directing the creation of the trust and the trustees as the parties creating the trust by the declaration of the trust obtained no consideration in money or money’s worth. The placing of the trust fund in the trustees’ hands was no consideration for the present or future equitable interests created. His Honour also observed at [205]: The statements of Walsh J in Tooheys and of Dixon CJ on appeal in that case were referred to with approval by Gibbs CJ in DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1981) 149 CLR 431 at 442. The statement of Walsh J in Tooheys was also referred to with approval by Tadgell J (with whom Starke J agreed) in BL & M Grollo Homes Pty Ltd v Comptroller of Stamps (Vic) [1983] 1 VR 445 at 450. [81,885.25] Onus of proof in s 120 applications (before 16/12/96) The onus of proving the elements to void a transaction as falling within s 120 rests upon the applicant. See Re Barton; Ex parte Official Receiver v Barton (1983) 52 ALR 95; 76 FLR 223. See also Re Louwen; Ex parte Walker (FCA, Franki J, 113 of 1981, 28 April 1983, unreported); Shirlaw v Malouf (1989) 15 ACLR [page 433] 641. For an example of the evidentiary problems faced by an applicant in establishing a settlement of property made by the bankrupt, see Re Ansett; Pattison v Crosswell (FCA, Northrop J, 25 March 1998, unreported, BC9800905). [81,885.30] “in consideration of marriage” — s 120(1)(a) (before 16/12/96) The test to determine whether property was settled “in consideration of marriage” was formulated by Goff J in Re Densham [1975] 1 WLR 1519. The settlement must be: (i) made on the occasion of the marriage; (ii) conditioned only to take effect on the marriage taking place; and (iii) made by a person for the purpose of or with a view to encouraging or facilitating the marriage. This test was applied in Re Walsh; Hamilton v Walsh (1982) 47 ALR 396 per Sheppard J. [81,885.35] “disposition” — s 120 (before 16/12/96) An express trust made by declaration of trust and without consideration is not a disposition within s 120(1)(a) and (b) and as such is void: Re Buratovic (WASC, Rowland J, No 1410/81, 30 September 1983, unreported). [81,885.40] “disposition of property” — s 120(8) (before 16/12/96) Assignment of a debt may be a “settlement of property” within the terms of s 120(8). For a discussion of the equitable and legal aspects

of an assignment in relation to this section, see Re Ward; Official Trustee in Bankruptcy v Dabnas Pty Ltd (1984) 55 ALR 395. For a general discussion of the legal principles involved in the interpretation of “disposition”, see Gibbs J, as a judge of the Federal Court of Bankruptcy (now superseded by the Federal Court of Australia) in Re Hyams; Official Receiver v Hyams (1970) 19 FLR 232 at 247–53. The facts may be complex but may well come down to disposition of property as was held by Bryson AJ in Sanwick v Wily as Trustee of Bankrupt Estate of Finn [2009] NSWSC 86; BC200901152. There the court found the actual transaction was in the nature of a guarantee for someone else’s debt, not one for which no consideration was given. Consideration given to someone else “is irrelevant to the purposes of legislation directed to protecting the estates of bankrupts from undervalued transactions.” [81,885.45] Rule in Chalmers v Pardoe (before 16/12/96) The rule in Chalmers v Pardoe [1963] 1 WLR 677 may apply in situations such as those envisaged by s 120: see Re Brunner; Ex parte Official Trustee in Bankruptcy (1984) 2 FCR 6. See also [81,860.11]. In Chalmers v Pardoe, above, at 681 the court held that, where the owner of land encouraged another to spend money on that land, with an assurance that part thereof would be made over to the person expending the money, equity will require that such conveyance be made. Alternatively, the court can declare an equitable lien over the land in favour of the person who has expended the money. [81,885.47] Effect of settlement of land outside Australia (before 16/12/96) In Re Doyle (dec’d); Ex parte Brien v Doyle (1993) 112 ALR 653 it was held, after a comprehensive review of the rules of private international law and their relationship with s 120 in so far as it affects the rights of third parties to foreign real property, that the section is subject to territorial limitations and cannot be used to affect the rights of parties to foreign “immovables”. [81,885.50] Relationship of s 120(7) and s 120(1) (before 16/12/96) Generally s 120(7) offers protection against the rest of s 120, even where the property is acquired by a person after the commencement of the bankruptcy. See Re Hart; Ex parte Green [1912] 3 KB 6. Section 120(1) will only be given full effect as long as the declaration sought does not “affect” the title of a party to whom s 120(7) applies. For example, a declaration made under s 120(1) voiding a bankrupt’s title to real property will not affect the title of a mortgagee who acquired the property from the bankrupt in good faith and for valuable consideration, where the interest is registered. The mortgagee’s interest in the land is based on his registration of the mortgage under the Torrens system, not on the title of the conveyor. The mortgagee’s interest will therefore be good against the trustee in bankruptcy even though the title of the mortgagor will not: Re Fitzgerald; Ex parte Burns (1986) 63 ALR 623. [page 434] [81,885.60] The declaration and adjustment of the property rights of the insolvent spouse (before 16/12/96) See [81,860.11]. On s 123(6), see [81,900.20]. [81,885.65] Costs The circumstances in which indemnity costs will be ordered, and the type of order are considered by Lucev FM in Posner v Chen (No 2) [2007] FMCA 502; BC200702661.

____________________ *Editor’s note: Section 120 applies only to bankruptcies for which the date of bankruptcy is on or after

16 December 1996. Section 120 as it appeared before substitution by Act 44 of 1996 is reproduced at [81,885].

[81,889] Transfers to defeat creditors *121 (1) Transfers that are void A transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee) is void against the trustee in the transferor’s bankruptcy if: (a) the property would probably have become part of the transferor’s estate or would probably have been available to creditors if the property had not been transferred; and (b) the transferor’s main purpose in making the transfer was: (i) to prevent the transferred property from becoming divisible among the transferor’s creditor’s; or (ii) to hinder or delay the process of making property available for division among the transferor’s creditors. Note: For the application of this section where consideration is given to a third party rather than the transferor, see section 121A. [subs (1) am Act 33 of 2006 s 3 and Sch 1[11], opn 31 May 2006]

(2) Showing the transferor’s main purpose in making a transfer The transferor’s main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can be reasonably inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent. (3) Other ways of showing the transferor’s main purpose in making a transfer Subsection (2) does not limit the ways of establishing the transferor’s main purpose in making a transfer. (4) Transfer not void if transferee acted in good faith Despite subsection (1), a transfer of property is not void against the trustee if: (a) the consideration that the transferee gave for the transfer was at least as valuable as the market value of the property; and (b) the transferee did not know, and could not reasonably have inferred, that the transferor’s main purpose in making the transfer was the purpose described in paragraph (1)(b); and (c) the transferee could not reasonably have inferred that, at the time of the transfer, the transferor was, or was about to become, insolvent. [subs (4) am Act 33 of 2006 s 3 and Sch 1[12], opn 31 May 2006; Act 57 of 2007 s 3 and Sch 2[8], opn 31 May 2006]

(4A) Rebuttable presumption of insolvency For the purposes of this section, a rebuttable presumption arises that the transferor was, or was about to become, insolvent at the time of the transfer if it is established that the transferor: (a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor’s business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them. [subs (4A) insrt Act 33 of 2006 s 3 and Sch 1[13], opn 31 May 2006]

[page 435] (5) Refund of consideration The trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee. (6) What is not consideration For the purposes of subsections (4) and (5), the following have no value as consideration: (a) the fact that the transferee is related to the transferor; (b) if the transferee is the spouse or de facto partner of the transferor — the transferee making a deed in favour of the transferor; (c) the transferee’s promise to marry, or to become the de facto partner of, the transferor; (d) the transferee’s love or affection for the transferor; (e) if the transferee is the spouse, or a former spouse, of the transferor — the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975; (f) if the transferee is a former de facto partner of the transferor — the transferee granting the transferor a right to live at the transferred property, unless the grant relates to a transfer or settlement of property, or an agreement, under the Family Law Act 1975.

[subs (6) am Act 33 of 2006 s 3 and Sch 1[15], opn 31 May 2006; Act 144 of 2008 s 3 and Sch 2[27], opn 10 Dec 2008; Act 115 of 2008 s 3 and Sch 2[16] and [17], opn 1 Mar 2009]

(7) Exemption of transfers of property under debt agreements This section does not apply to a transfer of property under a debt agreement. (8) Protection of successors in title This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property. (9) Meaning of transfer of property and market value For the purposes of this section: (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; and (c) the market value of property transferred is its market value at the time of the transfer. [s 121 subst Act 44 of 1996 s 3 and Sch 1] SECTION 121 GENERALLY [81,889.3] Exterritorial effect? “creditor” The background to the contentions advanced begins with consideration of whether a creditor must be established as being in existence. In Ebner v Official Trustee in Bankruptcy (1999) 91 FCR 353; 161 ALR 557; BC9900976 a Full Court of this court (Sackville, Finn and Kenny JJ) rejected a challenge to the primary judge’s finding that the intention comprehended by s 121 of the Act covered “existing, future or anticipated creditors”. Counsel for the appellant in that case sought to draw a distinction between “anticipated” creditors and “future” creditors. They submitted that an “anticipated” creditor was not a “creditor” under s 121. This was, it was argued, because an anticipated creditor was one “whom the disponor thought might become a creditor but who never obtains that status”. But the Full Court rejected that argument saying at 371: The short answer to this contention is that, as Cannane demonstrates, s 121 is concerned with an intention to defraud any present or future creditors. It is not concerned with the realisation of that intention. If the requisite intent exists at the time of the disposition in relation to a person or [page 436] persons not already creditors, it is immaterial whether or not they in fact later become creditors. Given the clear wording of s 121, there is no justification for reading such a limiting requirement into the section. Neither do doctrines and rules that turn, not upon an intent to defraud, but upon the effectuation in whole or in part of the fraud itself, assist in the proper construction of s 121. Judge Tracey in Mathai v Nelson (2012) 208 FCR 165; 133 ALD 121; [2012] FCA 1448; BC201209926 at [37] in examining this principle said: Section 121 places no temporal limitation on the status of “creditor”. If the prescribed intention is

present when the relevant transfer occurs, the transfer will be void against the trustee. The intention may relate to persons who were, at that time, yet to become creditors. Such persons may or may not choose or be able to prove in the subsequent bankruptcy. It is, therefore, possible for a person to be a creditor for the purposes of s 121 even if that person never seeks to prove in the bankruptcy and was not foreseen as a future creditor at the time of the transfer. The learned judge having thereby adopted a strong line of authority which tended to reduce the materiality of a “creditor” and requiring that later circumstances establish that status question. The court had then to examine whether the section operate in respect of creditors who were residents outside Australia’s rights were incurred wholly outside that jurisdiction at [38]. The only authority on this point was the judgment of Isaacs J in Morgan v White (1912) 15 CLR 1; 18 ALR 413; 13 SR (NSW) 20; BC1200040. At 13 his Honour set down the principle: Another relevant consideration, having an important bearing on the situation is the well-known doctrine that legislation is primarily territorial … The meaning of the doctrine is that unless the language of a Statute by express words or necessary implication indicates the contrary, the persons, property, and events in respect of which Parliament has legislated are presumed to be limited to those in the territory over which it has jurisdiction and for the welfare of which it exercises that jurisdiction. Judge Tracey said of this at [39]: This statement of orthodox doctrine does not, however, avail the appellants. It directs attention to the need for there to be a recognised territorial interest in the subject matter of legislation. If, for example, the legislation fastens on property which is within the jurisdiction, it matters not where the legal arrangements which led to the property being there were entered into or where the persons who were party to the arrangements were resident or domiciled at relevant times. So much was emphasised by Isaacs J when he continued (at 13) that “the jurisdiction of the State Parliament does not extend to any person whatever his nationality outside the State territory — though of course it may affect any property within it wherever the owner may be.” [81,889.5] Equitable interest in bankrupt estate In Cummins (a Bankrupt) v Cummins [2006] HCA 6; BC200600981, a joint judgment by Gleeson CJ, Gummow, Hayne, Heydon and Brennan JJ summarised the recent history of the section at [20]–[22]: [20] … Section 121, in its present form, was substituted for the previous s 121 by the Bankruptcy Legislation Amendment Act 1996 (Cth). The 1996 legislation had its genesis in the Harmer Report, published in 1988. [21] As originally enacted in 1966, s 121 rendered void as against the trustee in bankruptcy “a disposition of property … with intent to defraud creditors, not being a disposition for valuable consideration in favour of a person who acted in good faith” (s 121(1)). Protection was given to the title or interest of a person purchasing or acquiring property “in good faith and for valuable consideration” (s 121(2)). Section 121 had had no immediate counterpart in the Bankruptcy Act 1924 (Cth). Its provenance lay rather in the Elizabethan Statute of Fraudulent Dispositions, which in New South Wales is represented by s 37A of the Conveyancing Act 1919 (NSW). [page 437] The High Court discussed the meaning of the term “creditor” under s 121(1)(a) and (b) at [28]–[32]: [28] Whatever may be the operation retained by s 6, there was no substantial controversy between

the parties to the present appeal that in an appropriate case it was enough that one or more of the creditors of the transferor was the object of the main purpose spoken of in s 121(1)(b). [29] The question then arises whether the creditor or creditors spoken of in the section must have that status at the time of the transfer. In PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 526; 107 ALR 199; BC9203463, a case upon s 121 in its previous form, the Full Court of the Federal Court rejected a submission that the class of creditors referred to is limited to those who at the time of the disposition in question have claims of a nature which then would be susceptible to proof under s 82 of the Act [cf Coventry v Charter Pacific Corp Ltd (2005) 227 CLR 234; 222 ALR 202; [2005] HCA 67; BC200509687]. [30] In R v Dunwoody, an appeal against convictions under s 266 of the Act, McPherson JA said [(2004) 149 A Crim R 259 at 290]: “It is true that statutory enactments of this kind consistently refer to defrauding or deceiving “creditors”; but the course of its limited and technical sense of a person to whom a debt is presently due and owing.” Section 40(1)(c) stipulates as an act of bankruptcy the departure from or remaining out of Australia of a person “with intent to defeat or delay his or her creditors”. Of that expression, in Barton v Deputy Federal Commissioner of Taxation (Cth) (1974) 131 CLR 370 at 374; 48 ALJR 407, Stephen J treated as sufficient for the commission of that act of bankruptcy “awareness of an impending liability” or “some impending indebtedness”. In support of that conclusion, his Honour referred to decisions construing the Elizabethan statute and s 37A of the Conveyancing Act. [31] In the light of authorities such as these, there was no real dispute in the present appeal that, if the other elements of s 121 were made out, the Commonwealth, represented by the ATO, was a creditor for the purposes of the section. Given the further proposition that the section may be satisfied in the absence of a plurality of such creditors, it is unnecessary to consider a further point. This concerns whether an apprehension of actions for professional negligence against a barrister such as Mr Cummins and the taking of action with the main purpose of preventing the transfer of property becoming divisible among that class of potential plaintiffs could satisfy the section. [32] However, on the appeal to this Court, the respondents restated the submission that no inference should be drawn as to the level of receipts by Mr Cummins in the period preceding the August transactions. The proposition appeared to be that his “tax liability” did not exist, or was in such a low range as to make it implausible that this provided his “main purpose”. With that contention it will be necessary to deal further in these reasons. The court so dealt at [34] as explained by Foster J in Donnelly (Trustee) v Windoval Pty Ltd (Trustee); In the Matter of Donnelly (Trustee) [2014] FCA 80; BC201400526 at [139]: [139] At 292 [34], the Court observed that what had been required of the trustees to succeed at trial was that the circumstances appearing in the evidence gave rise to a reasonable and definite inference that, in entering into the impugned transactions, Mr Cummins had the requisite “main purpose”. The Court then noted that the trial judge had found that Mr Cummins was well aware that he had incurred substantial liabilities to the Australian Taxation Office and that those liabilities would become due and payable once taxation assessments were issued. The Court also noted that Mr Cummins was obviously cognisant of his tax delinquency going back many years and that, in light of these matters, he took steps to divest himself of all of his assets for no consideration in order to protect his assets from the claims of future creditors. At 294 [40], the Court referred to Williams v Lloyd (1934) 50 CLR 341; 7 ALJR 463; BC3490116 “by way of contrast”. The Court said that the impugned transactions in that case were directed not to protecting the property of the bankrupt against future creditors, but to withdrawing capital from [page 438]

apprehended improvident hazardous investments. In Williams v Lloyd, at 372, Dixon J had said that, at the time of the impugned dispositions, the bankrupt had been in a perfectly sound financial position “with nothing to fear”. [140] Cummins is authority for the proposition that, in s 121(1), the term “creditors” encompasses future creditors and is not confined to those persons who, at the time of the relevant disposition, had claims susceptible to proof pursuant to s 82 of the Bankruptcy Act. The relevant debt need not be due and owing as at that date. It is sufficient if it is “impending”. In Jabbour v Sherwood [2003] FCA 529; BC200302655 French J held that an equitable interest under Muschinski v Dodds (1985) 160 CLR 583; 62 ALR 429 and Baumgartner v Baumgartner (1987) 164 CLR 137; 76 ALR 75 could be legitimately raised in proceedings appealing against a s 120 and a s 121 order. The facts on that issue were that it was claimed that the appellant claimed an equitable interest in the bankrupt’s interest in the property by reason of her payments of the mortgage and in failing to hold that the transfer was of only the bankrupt’s remaining interest. The magistrate at first instance failed to make a finding on this issue: at [71]. On the basic issue his Honour held at [76]–[77]: [76] The proposition that a claim to an equitable interest, based upon a common intention constructive trust, may be good against the trustee in bankruptcy is established by the judgment of the Full Court in Parsons v McBain (2001) 109 FCR 120 which overruled the contrary view previously expressed in Re Osborn (1989) 25 FCR 547. Parsons v McBain concerned a transfer of land by a husband, who later became bankrupt, to his wife. The trustee in bankruptcy had obtained an order at first instance avoiding the transfer pursuant to ss 120 and 121 of the Bankruptcy Act. The Full Court held, contrary to the reasoning in Re Osborn, that a constructive trust does not arise when the court declares it to exist. It is a pre-existing equity. The transfer of the legal estate of the moiety beneficially owned by the wife in that case was not void against the trustee. Their Honours said, after reviewing relevant case law including Giumelli v Giumelli (1999) 196 CLR 101: … the notion that a “common intention constructive trust” first comes into existence when so declared by the Court must be rejected. In virtue of the fact that such a view informed the decision in Re Osborn, the case should not be followed. (at 125) [77] In light of the schedule of payments the maximum amount of the appellant’s monetary contribution to mortgage repayments would not have exceeded about $15,000 … That reconsideration would also affect the conclusions as to the validity of the notice under s 139ZQ to the extent that, in the amount which it demanded, it did not recognise any equity. In the circumstances I propose to allow the appeal and remit it to the magistrate to give proper consideration to the question of any equitable interest and, if there be such an interest, to provide for an appropriate reduction in the amount payable by the appellant. [81,889.7] Does bankruptcy “cover the field”? Bergin J in Houvardas v Zaravinos (2003) 202 ALR 535; [2003] NSWSC 387; BC200306176 dealt with a number of broad questions concerning the applicability of the bankruptcy legislation. Here the alienation of property by the first defendant to the second was said to be with intent to defraud under s 37A of the Conveyancing Act 1919 (NSW) which has equivalents in Imperial legislation and the legislation of other states. Transfers had been made some ten months before the Local Court had exercised jurisdiction under s 78 of the Family Law Act 1975, and it was contended, inter alia, that bankruptcy legislation “covered the field” in respect of alienation of property to default creditors. The notion of covering the field derives mainly from Dixon J’s reference to the operation of s 109 of the Constitution in Ex parte McLean (1930) 43 CLR 472 at 483; [1930] ALR 377:

When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and [page 439] s 109 applies. That this is so is settled, at least when the sanctions they impose are diverse (Hume v Palmer (1926) 38 CLR 441; [1926] ALR 66). But the reason is that, by prescribing the rule to be observed, the Federal statute shows an intention to cover the subject matter and provide what the law upon it shall be. If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no inconsistency would be exhibited in imposing the same duties or in inflicting different penalties. The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter. Bergin J dealt with a number of propositions, but he found that answer to the particular problem by distinguishing Silvera v Savic (1999) 46 NSWLR 124; 9 BPR 16,881; [1999] NSWSC 83; BC9900357 at [78]–[79] per Hodgson CJ in Eq, yet applying the principles: However, it seems to me that s 37A itself may provide the necessary power to the Supreme Court. In my opinion, the “alienation” in this case was the whole process of obtaining the Local Court order and the consequent transfer; and it is that whole alienation which is made voidable by s 37A. In my opinion, if one step in that alienation is the fraudulent obtaining of a Local Court order, then s 37A itself purports to give power to set that step aside. The question would be whether that legislative grant of power prevails over the possible exclusion of that power by s 69 of the Local Courts (Civil Claims) Act 1970. On the whole, I am inclined to think that s 37A would prevail: the very existence of s 84(1)(r) in the Local Courts (Civil Claims) Act 1970 shows that s 69 of that Act is not intended to prevail over more particular inconsistent statutory provisions. The final possibility, namely a declaration and orders making provision for an application to the Local Court to set aside its order is also, in my opinion, one that would be open to this Court. Having found that the whole process was undertaken with the intention to defraud creditors, the Supreme Court can, in my opinion, order the parties to the transaction to apply to the Local Court to set aside the order which they obtained. However, for reasons I have given this is not necessary in this case. In Houvardas v Zaravinos (2003) 202 ALR 535; [2003] NSWSC 387; BC200306176 at [126] and [127] his Honour held that those circumstances were distinguishable: This case is distinguishable from the facts in all the cases referred to earlier. In no case has there been registration of a transfer of property and a subsequent Family Court consent declaration. I am concerned to ensure that this court does not trespass upon the domain of the Family Court or the Local Court exercising Family Law jurisdiction. The circumstances now are quite different to the circumstances that prevailed when the defendants fraudulently secured the consent declaration from the Local Court. One approach that may be available is to make the declarations that the alienation included the obtaining of the consent orders and to declare that the second defendant is the owner at law and in equity of her half interest in the three properties with consequential orders for the re-transfer by her of the first defendant’s interests in the properties. These declarations and

orders would then be superimposed on the consent declaration and would not be in conflict with it. [81,889.9] Transfer of property This term may include a mortgage, as held in Pastro v Official Trustee in Bankruptcy [2000] FCA 744; BC200003139. See more recently Frost v Shehan as Trustee of the Bankrupt Estate of Allen Gordon Frost [2012] FCAFC 46; BC201201680 per the Court (Finn, Cowdroy & Flick JJ) at [69]: “On any view, however, a mortgage creates an interest in property and it is that interest which is transferred.” In the same case the Court cited Peldan [page 440] v Anderson (2006) 227 CLR 471; 229 ALR 432; [2006] HCA 48; BC200607848 where Gummow ACJ, Kirby, Hayne, Callinan and Crennan JJ there said: [26] As remarked earlier in these reasons, provisions in the terms of s 121(9) appeared at the same time as s 120(7) and s 122(8) of the Bankruptcy Act. It is to be expected that the subsection has the same meaning in each provision. In the Explanatory Memorandum to the House of Representatives upon the Bill for the 1996 Act, it was said at [84.10] of the inclusion of the provision in the undervalued transactions provision (s 120) that: “where a person creates an interest in property, for example by allowing a mortgage or charge to be created over it, the person will be taken to have transferred property, for the purposes of the section”. Other examples were given, including the conferral of a trademark or patent licence. Further instances would include the grant of a lease over freehold property and a declaration of a trust over property vested in the “transferor”. In all of these cases, the same act both creates the property in question and vests it in the other person. See also: Sutherland v Brien (1999) 149 FLR 321 at 325–326; [1999] NSWSC 155; BC9900755 per Austin J. [81,889.10] Inference of intent to defraud creditors Re Chase; Permfox Pty Ltd v Official Receiver [2002] FCA 1504; BC200207815 dealt with a series of complex transactions among which was said to be one transaction entered into with an intention to evade creditors pursuant to s 121(1)(b) of the Act. Allsop J made the following interesting observations at [90]–[94]: [90] This form of words replaced (in 1996) the previous well known expression “a disposition of property … made … with intent to defraud creditors”. This expression had been widened by s 6 of the Act which was (and still is) in the following terms: 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. [91] Section 6 of the Act overcame the authorities on the Statute of Elizabeth (the Fraudulent Conveyances Act, 13 Eliz c 5) that a disposition made with intent to defraud one creditor, but not all creditors, did not fall foul of the Statute of Elizabeth: PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 525, citing May, The Law of Fraudulent and Voluntary Conveyances (3rd ed 1908) pp 76–8 and 139; and see also Re Kelly: Ex parte Young (1932) 4 ABC 258 at 261–2; Middleton v Pollock: Ex parte Elliott (1876) 2 Ch D 104 at 108; Alton v Harrison (1869) LR 4 Ch App 622; Coleman and Del Carlo v R [1988] WAR 196; Glegg v Bromley [1912] 3 KB 474 at 492; Re Lloyd’s Furniture Palace Ltd [1925] Ch 853 at 860, 861–2; Re Sarflax Ltd [1979] Ch 592 at 602; Re Hyams; Official Receiver v Hyams (1970) 19 FLR 232 at 260–1; Re Nimbus Trawling Co Ltd [1986] 2 NZLR 308; and World Expo Park Pty Ltd v EFG Australia Ltd (1995) 129 ALR

685 at 700. [92] However, s 6 has not been amended to keep up with the wording of s 121, which is directed to the purposes there set out which include the phrase “divisible among the transferor’s creditors”. The trustee does not rely on s 6 in support of his submission that Mr Chase’s “main purpose” answers the description in para 121(1)(b). The trustee relies on the intent to evade (in effect defraud) the United States revenue of tax as evidence that enables the court more readily to draw the inference that Mr Chase’s main purpose was to prevent the moneys transferred from becoming divisible amongst his creditors generally. [93] If I be wrong about the main purpose of Mr Chase for para 121(1)(b), the question arises as to the application of subs 121(2), which is in the following terms: (2) The transferor’s main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent. [page 441] [94] The Full Court in Re Jury; Ashton v Prentice (1999) 92 FCR 68 made clear that the subsection does not mean that it must be proved that the bankrupt was insolvent or about to become insolvent. Rather: … [I]t is sufficient if the inference of insolvency is reasonably open. An analogy is the leaving of a case to a civil jury. If it can reasonably be inferred from all the circumstances that the defendant was negligent, or that the publication complained of was defamatory of the plaintiff, then the matter must go to a jury. Nevertheless the jury is not required to draw the relevant inference, and may not do so. The onus of proving the main purpose lies upon the applicant, but the conclusion can be drawn from all relevant circumstances: see Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557 at 566–7; 153 ALR 163 at 168 per Brennan CJ and McHugh J. That intent would be inferred when proper funds available for the payment of creditors became insufficient as in PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 524; 107 ALR 199, and it may be established by reference to future creditors as in Barton v DCT (1974) 131 CLR 370 at 374; 48 ALJR 407. Similarly at [32] McKerracher J in Charan v Gleeson [2012] FCA 236; BC201201301 provide a neat illustration of how this process works. These principles were applied by Hill J in Andrew v Zant Pty Ltd [2004] FCA 1716; BC200409334. Prentice v Cummins (No 5) (2002) 124 FCR 67; 51 ATR 400; [2002] FCA 1503; BC200207298 is an important decision by Sackville J on the uses and availability of judicial notice in construing “main purpose”. There, his Honour had to consider the case of Cummins QC of the Sydney Bar who had, it seemed, failed to file any tax returns between 1955 and 2000. How this could have come about was unexplained. His Honour, furthermore, had to consider a “no case” submission without either party calling evidence. The bankrupt, had, arguably, made his disposition in response to the distinct possibility the common law immunity possessed by barristers in the light of Wraith v Giannarelli [1988] VR 713 might soon be abolished by the High Court. His Honour considered that he was able to take judicial notice of the circumstances, and, hence, it could not be established that the main purpose of the disposition was one of those contemplated in the statute. In a work on bankruptcy a major decision on evidence cannot be more than noticed, but his Honour set out some important observations at [95]–[99] on the meaning of “main purpose”: [95] First, s 121(3) provides that s 121(2) does not limit the ways of establishing the transferor’s

main purpose in making a transfer. As was said in Re Jury (at 82): What s 121(3) does is acknowledge that the trustee may resort to modes of proving the transferor’s main purpose which are alternative to the presumption afforded by s 121(2). For example, the trustee may prove an admission by the transferee that the main purpose of the transfer was to prevent the property becoming divisible among the transferor’s creditors, even though all of the circumstances at the time of the transfer did not permit, or positively contradicted, the inference that the transferor was, or was about to become, insolvent. [96] If reliance is placed on s 121(2), the transferor’s subjective intention is likely to be irrelevant: in other words, if it can be reasonably inferred that the transferor was insolvent at the time of transfer, it will not matter if his or her subjective intention was not to prevent, hinder or delay the process of making property available for division among creditors: Re Jury, at 82. On the other hand, if the trustee attacking a transfer does not rely on s 121(2), the trustee will need to establish that the transferor’s subjective purpose was that described in s 121(1)(b). [97] Secondly, the Bankruptcy Act does not define the expression “main purpose”. The relevant dictionary definition of “main” is “chief; principal; leading”. The concept is similar to that of the “dominant purpose” used in s 177A(5) of the Income Tax Assessment Act 1936 (Cth) (“ITAA”) (although the “dominant purpose” under Part IVA of the ITAA is to be assessed objectively by reference to its objective facts). In Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404, at 416, the joint judgment interpreted “dominant” as meaning “the ruling, prevailing or most influential” purpose. A transfer of property will be within s 121(1)(b) of the [page 442] transferor’s principal or leading purpose was to prevent the transferred property from becoming divisible among his or her creditors, or to hinder or delay the process of making property available for division among the creditors. The transfer can be caught by s 121 even though the transferor had other purposes in mind. [97] Thirdly, as under the previous law (Williams v Lloyd (1934) 50 CLR 341, at 372, per Dixon J), the party attacking the transfer bears the onus of establishing that the terms of s 121(1) have been satisfied. [98] Fourthly, just as a court could infer from the surrounding circumstances that a transferor had an actual intention to defraud creditors (Noakes v J Harvy Holmes & Son (1979) 37 FLR 5, at 10– 11, per Brennan J (with whom Deane and Fisher JJ agreed); Garuda v Grellman [(1992) 35 FCR 515] at 523–524, per curiam; Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372, at 416– 421, per Wilcox and Cooper JJ) so a court can infer from the circumstances (independently of s 121(2)) that a transferor’s “main purpose” was that described in s 121(1)(b) of the Bankruptcy Act. Thus if a debtor makes a voluntary settlement of property, leaving the debtor without sufficient assets to meet his or her debts, it can readily be inferred that the debtor’s main purpose was to prevent the transferred property from becoming divisible among creditors since that is the necessary consequence of the disposition: Freeman v Pope (1870) LR 5 Ch App 538, at 541, per Giffard LJ, followed in Noakes v Harvy Holmes, at 10, per Brennan J. [99] Fifthly, a transferor’s main purpose may be to hinder or delay the process of making property available for division among his or her creditors even if the transferor has no creditors, or is able to satisfy all creditors, at the date of the transfer: Re Jury, at 82. It was well established under the previous law, for example, that a person who made a voluntary settlement immediately before entering into a financially hazardous venture could be said to have intended to defraud his or her

creditors notwithstanding that there were no outstanding creditors at the date of the transfer: Mackay v Douglas (1872) LR 14 Eq 106, at 118–120, per Malins V-C; Official Trustee v Alvaro at 419–421, per Wilcox and Cooper JJ. In other words, the transferor’s creditors can include future or anticipated creditors: see Ebner v Official Trustee in Bankruptcy (1999) 91 FCR 353, at 370–371, per curiam. A fortiori, a transferor may have the requisite purpose if assets are given away at a time when he or she is aware of an impending liability, but one which has not yet crystallised into an existing indebtedness: Barton v DCT [(1974) 131 CLR 370], at 374, per Stephen J (where the impending liability related to a taxation debt which would come into existence only once an assessment had issued). [81,889.20] Maintenance agreements and orders See [81,900.20]. [81,889.25] “market value” In Barton v Official Receiver (1986) 161 CLR 75 at 86; 66 ALR 355 at 362, the High Court held that a “‘purchaser … for valuable consideration’ within the meaning of s 120(1) of the Act [as it was before 16 December 1996] is one who has given consideration for his purchase ‘which has a real and substantial value, and not one which is merely nominal or trivial or colourable’ [Re Abbott [1983] 1 Ch 145 at 57; [1982] 3 All ER 181; [1982] 3 WLR 86]”. Conti J adopted the Barton v Official Receiver test in Rodgers v Schmierer [2003] FCA 386; BC200302069 at [25]. His Honour adopted the explanatory memorandum’s definition of “market value” with the qualification below (at [42]): [42] … [In] the context of s 120 of the Bankruptcy Act, the expression ‘market value’ was explained in para 84.13 of the Explanatory Memorandum as follows: The expression “market value” is intended to refer to the value of the property concerned if it were disposed of to an unrelated purchaser bidding in a market on an ordinary commercial basis for property of the kind disposed of, without any sort of discount or incentive for purchase being offered … of course, there may be differing opinions as to the precise market value of some property, for example, house properties where valuers or real estate agents may give kerbside valuations which spread over a range of monetary values. However, if the [page 443] property was transferred for an amount less than the lowest amount in the range, the transfer would be a transfer at undervalue for the purposes of the section. It is not essential however that in all cases or circumstances, market value must be translated or capable of translation into an ascertainable or calculable monetary equivalence, and the present circumstances serve to illustrate that observation. [81,889.26] Powers of the court The court may not use the wide powers in s 30(1) to achieve what this section and s 120(1) forbid. See [81,884.21]. However the position of the court was considered in Anderson v Peldan (2004) 212 ALR 291; 183 FLR 354; [2004] QSC 335; BC200406321 by Philippides J as to which see [80,755.5]. The court may well find itself in a situation such as that encountered in Daynes v CBD Central Pty Ltd [2012] QSC 085; BC201202163 (Martin J) where it was necessary that the court determine the substantive dispute to found the jurisdiction. Therefore in order to determine the question of title in the actions the court must determine the dispute between the parties. Conlan v Stone [2012] FCA 1359; BC201209378 provides an example of the wide powers available to McKerracher J and employed by His Honour at [135] and under s 121 of this statute. The case

concerned a deed executed between the bankrupt parents and their sons in relation to a schedule of plant and machinery and was found that the date was buoyed under the statute for its intention to defeat third party creditors. See [115]. [81,889.26.1] Section 121(5) Mansfield J in Sheahan (Trustee) in the matter of Frost (Bankrupt) v Frost (No 2) [2011] FCA 686; BC201104736 referred to this section, saying at [9] that: section 121(5) of the act was introduced at the same time as section 121 generally was introduced in its terms as in force at material times … It had no apparent legislator ancestor. It has not since been amended. Nor, so far as I can determine, has been the subject of a specific judicial consideration. In the explanatory memorandum (at [84.28]) no other comment is made then what is in effect a paraphrase subsection. Publish commentary upon the act also and is little to informants meeting other than to suggest that the onus of proof of there being no amount equal to the value of any consideration lies upon the trustee. That case is therefore the only case on the point. The court noted that the section was available despite the findings of previous litigation that the bankrupt’s main purpose of making transfer was the purpose of preventing an interest in becoming visible among his creditors but that this did not preclude the application of this section. He applied at [17] the following: Before doing so, I note the submission that the onus of proof of the value of any consideration is, on the submission of Mr Richardson, to rest upon Mr Sheahan. I do not accept that. In the first place, s 121(5) would not be activated or require consideration unless and until the transferee, against whom a transfer has been held to be void against the trustee in bankruptcy of the transferor, has raised the issue. I do not think it is a matter which a Court would routinely be expected to consider unless there was some reason to do so. There would be little reason for s 121(5) to be ventilated at all unless it was specifically raised by the transferee. In this matter, the issue was raised by Mr Frost and Mr Richardson by the notice of contention. That having been done, whether it is up to the transferee to assert the value of the consideration given for the transfer will depend on the circumstances. In practical terms, that will depend on what the transferee and trustee wish to respectively assert. It is routine to expect that the person who asserts the state of affairs in issue has, at least, an evidentiary burden of proof in relation to that state of affairs. If the trustee says there was no consideration because the transaction was a sham, the onus is upon the trustee to prove that because the trustee is asserting it. That is one of the assertions in this matter. For the purposes of the primary judgment, I did not need to address it explicitly. If the issue as expressed is whether the asserted consideration was in fact given at all, one would expect the transferee to adduce evidence about its character and value. If the trustee [page 444] says that the value was different from that asserted by the transferee, one would expect the trustee to adduce evidence as to its value. Once the evidence is adduced, I tentatively express the view that, if the issue is as to the value of the consideration given, the legal onus of proof is upon the transferee but if the issue is whether consideration was given at all (because it is said the transaction was a sham) the legal onus of proof of that is upon the trustee. I do not need to finally decide that technical issue. [81,889.27] Other matters See [81,525.20] and [81,550.70]. [81,889.30] Powers of court — costs The circumstances of litigation of such matters can properly lead

to an application for indemnity costs: see, for instance, Ugly Tribe Company Pty Ltd v Sikola [2001] VSC 189; BC200103454 and Posner v Chen (No 2) [2007] FMCA 502; BC200702661. REPEALED PROVISION — SECTION 121 BEFORE 16 DECEMBER 1996 [81,890] Fraudulent dispositions Section 121 as it existed prior to its substitution by Act 44 of 1996 is reproduced below, with commentary as applicable prior to its repeal. It applies to bankruptcies for which the date of bankruptcy is before 16 December 1996. Fraudulent dispositions 121 (1) Subject to this section, a disposition of property, whether made before or after the commencement of this Act, with intent to defraud creditors, not being a disposition for valuable consideration in favour of a person who acted in good faith, is, if the person making the disposition subsequently becomes a bankrupt, void as against the trustee in the bankruptcy. (2) Nothing in this section shall be taken to affect or prejudice the title or interest of a person who has, in good faith and for valuable consideration, purchased or acquired the property the subject of the disposition or any interest in that property. (3) In this section, disposition of property includes a mortgage of property or a charge on or in respect of property. Section 121 Generally (Before 16 December 1996) [81,890.5] Generally (before 16/12/96) Section 121 “was intended to reflect generally the principles which have been worked out over the centuries, in relation to fraudulent dispositions, since the enactment in 1570 of 13 Eliz I c 5 (the Statute of Elizabeth)”: Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364 at 368; 110 ALR 484 at 489. For a discussion of the history of the law in relation to fraudulent dispositions of property, see PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515; 107 ALR 199 and Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557; 153 ALR 163 per Kirby J (dissenting). Section 121 applies to the administration of assigned estates under Pt X of the Act (s 231(2)), and to the administration of deceased estates in bankruptcy under Pt XI of the Act (s 248(1)). If the applicant intends to rely on a transcript of the examination of a bankrupt in proceedings under this section, then the bankrupt must be joined as a respondent to the application: Re Mannella; Ex parte Official Trustee v Giorgio (1989) 21 FCR 50. See s 81(17)(a). There is no limitation period for an action under this section: s 127(4). [81,890.10] Onus of proof (before 16/12/96) The applicant bears the onus of proving that there was a disposition of property made with intent to defraud creditors, and that the disposition was not “a disposition for valuable consideration in favour of a person who acted in good faith”: see Official Trustee v Marchiori (1983) 69 FLR 290 at 294. [page 445] However, the surrounding circumstances may be such as to shift the burden to those seeking to maintain the transaction. In Michael v Thompson (1894) 20 VLR 548 at 552 the Full Court of the Supreme Court of Victoria held: In relation to a matter of this kind, where all the facts concerning the settlement are within the knowledge of the settlor and settlee and are not within the knowledge of the creditors impugning

the settlement, although the burden of proof is on those impugning the settlement, a very slight degree of proof should be sufficient to shift that burden. That is simply on the principle that, if it were not so, the most egregious frauds on creditors could never be investigated. If sufficient though slight evidence is given to impugn the deed, those who know all about the deed have only to go into the box and explain it. This passage was cited with approval by the Federal Court in PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 527; 107 ALR 199 at 211 and Official Trustee v Marchiori (1983) 69 FLR 290 (single judge). With regard to proof of an intent to defraud creditors, the onus may be discharged by inference from the known facts: see [81,890.30]. [81,890.15] “disposition” — s 121(1) (before 16/12/96) The term “disposition” ordinarily has the meaning of “a transfer, alienation or giving up”. The making of a loan was held to constitute a disposition of property in Re Barton; Ex parte Official Receiver v Barton (1983) 52 ALR 95; 76 FLR 223. In the context of s 227 of the Companies Act 1961, it has been held that payments by a bank pursuant to cheques drawn by a company in liquidation were not “dispositions” of property of the company by the bank: Re Mal Bowers Macquarie Electrical Centre Pty Ltd (in liq) [1974] 1 NSWLR 254. Street CJ said at 258: [T]he word disposition connotes in my view both a disponor and a disponee … It does not operate to affect the agencies interposing between the company as disponor and the recipient of the property as disponee. In Caddy v McInnes (1995) 58 FCR 570; 131 ALR 277, the bankrupt mortgaged her house in Drummond Street and used the funds so raised, $99,963, to construct a house upon the respondents’ land. It was originally intended that part of the respondents’ land would be transferred to the bankrupt, but that never occurred. On the question of whether there had been a disposition of property, the court said (ALR at 288): Here … the sum of $99,693 was “subtracted” from the bankrupt’s property, being the proceeds of the bank finance raised on the security of her Drummond Street property, and “utilised” in erecting a house upon the respondents’ land. Although, as a matter of form, the bank made the payments, this was done at the request of the bankrupt and of her family, including the respondents. Moreover, the liability to repay the amount paid to Mr Warburton was secured upon the bankrupt’s Drummond Street property, so that her own property was used as a necessary part of the arrangement. In substance, the arrangement was that the bankrupt make available to the respondents the sum of $99,693 for the purpose of providing a residence at Bringa Park, thus for the benefit of the respondents. In our view, approaching the matter in a “commercial” sense, this amounted to a “disposition” of that amount in favour of the respondents. In some cases difficulties can arise in identifying the relevant disposition: see, for example, Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372; 138 ALR 341. The phrase “disposition of property” includes the giving of a mortgage or a charge on or in respect of property: s 121(3). A grant of a mortgage constitutes a transfer of property for the purposes of s 121 of the Act: Pastro v Official Trustee in Bankruptcy [2000] FCA 744; BC200003139 and Sheahan (Trustee) v Frost [2011] FCA 356; BC201102477 at [110]. To establish the purpose of the granting of a mortgage, the transferor’s main purpose is said to be deemed to be that described in s 121(1)(b) if s 121(2) is satisfied: that is if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transfer was or was about to become

insolvent: Sheahan (Trustee) v Frost [2011] FCA 356; BC201102477 at [112]. [page 446] The test in s 121(2) was considered in Re Jury; Ashton v Prentice (1999) 92 FCR 68; BC9902584 (Ryan, Heerey and Katz JJ). Their Honours at [55] said that the formulation is not synonymous with the expression “if the transferor was insolvent”. They continued: The statutory provision, as a matter of ordinary language, leaves open the possibility that it may also reasonably be inferred that the transferor was solvent. In other words, it is sufficient if the inference of insolvency is reasonably open. An analogy is the leaving of a case to a civil jury. If it can reasonably be inferred from all the circumstances that the defendant was negligent, or that the publication complained of was defamatory of the plaintiff, then the matter must go to a jury. Nevertheless, the jury is not required to draw the relevant inference and may not do so. and [The] conclusion about the existence of a reasonable inference concerning the bankrupt state of solvency was supported by the conceded inability of the bankrupt to pay current legal expenses or expected future legal expenses in connection with the litigation … Also, in this context, his Honour relied on the large sums being claimed by … which the bankrupt could not pay. Although those claims had not by then merged in a judgment, his Honour held that they represented “a debt which came into existence, no doubt, at the latest when the bankrupt was called upon to pay under his guarantee. That is to say, it was a debt which existed and was due and payable at the time the transaction was entered into”. See also Sheahan (Trustee) v Frost [2011] FCA 356; BC201102477 at [113]–[114]. [81,890.20] “property” — s 121(1) (before 16/12/96) The term “property” is defined in s 5 of the Act. It includes personal property and therefore a payment by way of loan, that is money: Re Barton; Ex parte Official Receiver v Barton (1983) 52 ALR 95 at 121; 76 FLR 223 at 250. [81,890.25] “intent to defraud creditors” — s 121(1) (before 16/12/96) “The phrase ‘intent to defraud creditors’ suggests that the present or future creditors of the company will, if the intent is effectuated, be cheated of their rights. An intent to defraud creditors has been described, for the purposes of bankruptcy legislation, as an intent by deceit to deprive creditors of something to which they are entitled”: Hardie v Hanson (1960) 105 CLR 451 per Dixon CJ. In Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557; 153 ALR 163, the bankrupt and J Cannane Pty Ltd each disposed of their $1 share in Wisbeck Pty Ltd, to the bankrupt’s son and the bankrupt’s wife, respectively. The value of each of the shares at the time of the transfer was no more than $1, which was the consideration paid. The bankrupt intended to use Wisbeck as a vehicle to purchase shares in another company, CCI. That intention was later carried into effect. The official trustee and the liquidator of J Cannane Pty Ltd sought to avoid the transfers under s 121 of the Act and s 565 of the Corporations Law, respectively. The High Court held the bankrupt (and hence J Cannane Pty Ltd) did not have the requisite “intent to defraud creditors” at the time of the transfers, because the creditors had not been deprived of anything to which they were entitled; in particular, the opportunity to acquire, or direct the acquisition of the shares in CCI. Commenting on the element of “intent to defraud creditors”, Gaudron J said: It is notoriously difficult to provide an exhaustive statement as to what is involved in the concepts

of “fraud” and “intent to defraud”. “Fraud” involves the notion of detrimentally affecting or risking the property of others, their rights or interests in property, or an opportunity or advantage which the law accords them with respect to property. Conversely, it is not fraud to detrimentally affect or risk something in or in relation to which others have no right or interest or in respect of which the law accords them no opportunity or advantage. And there is no intent to defraud if the person in question believes that others have no right or interest in or in relation to the property concerned and that the law accords them no opportunity or advantage with respect to that property. “A real intent to defeat or delay creditors must exist, and the question always is whether, upon all the circumstances of the transaction, the transfer or other disposition was in fact made with that intent. The burden of proof is upon those alleging that it was so made”: per Dixon J in Williams v [page 447] Lloyd (1934) 50 CLR 341 at 372; 7 ALJR 463. See s 6 and World Expo Park Pty Ltd v EFG Australia Ltd (1995) 129 ALR 685 at 708 per Pincus JA; compare Re Barton; Ex parte Official Receiver v Barton (1983) 52 ALR 95 at 121; 76 FLR 223 at 250 (first instance). In Re Barnes; Ex parte Stapleton (1961) 19 ABC 126 which was a decision as to the effect of a reproduction of the Statute of Elizabeth, Gibbs J held at 131: Actual fraud, that is an actual intention to defeat or defraud creditors, must be established, and whether the existence of such an intention should be inferred from the circumstances is a question of fact. In Lloyd’s Bank Ltd v Marcan [1973] 3 All ER 754; [1973] 1 WLR 1387, which was a decision as to the effect of the English legislation, Pennycuick VC held (All ER at 367) that the word “defraud … is not intended to be confined to cases of fraud in the ordinary modern sense of that word, ie as involving actual deceit or dishonesty”. While this decision was affirmed on appeal in Lloyd’s Bank Ltd v Marcan [1973] 3 All ER 754; [1973] 1 WLR 1387, Cairns LJ was of the view that dishonest intention was a necessary element of an intent to defraud at least in circumstances where the conveyance was for valuable consideration. The relevant intention is that of the disponor. It is sufficient that the intent be to defraud any one or more creditor or creditors: s 6; see also Barton v DCT (Cth) (1974) 131 CLR 370; 48 ALJR 407. There is “no need to defraud creditors as a class”: PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 525; 107 ALR 199 at 209. An intent to defraud creditors need not be the sole intent of the disponor: Barton v DCT (Cth), above, CLR at 375. As to the circumstances in which the payment of, or giving of security for, an antecedent debt, for example a preference under s 122 of the Act, amounts to a “disposition of property … with intent to defraud creditors”, see World Expo Park Pty Ltd v EFG Australia Ltd (1995) 129 ALR 685; PT Garuda Indonesia Ltd v Grellman, above, FCR at 525; ALR at 209. Compare Re Peninsula Service Pty Ltd (in liq) (1987) 91 FLR 4 at 6. An intention to defraud potential future creditors may be sufficient in the particular circumstances of the case: PT Garuda Indonesia Ltd v Grellman, above, ALR at 210; World Expo Park Pty Ltd v EFG Australia Ltd, above; Re Kuch; Ex parte Official Trustee (FCA, Jenkinson J, No 955/95, 24 November 1995, unreported). Section 121 is concerned with the realisation of the intention to defraud existing or future creditors. “If the requisite intent exists at the time of the disposition in relation to a person or persons not already creditors, it is immaterial whether or not they in fact later become creditors”: Ebner v Official Trustee in Bankruptcy (1999) 91 FCR 353; 161 ALR 557 at 574. See also Hardie v Hanson (1960) 105 CLR 451; Electrical Enterprises Retail Pty Ltd v Rodgers

(1988) 15 NSWLR 473 at 496–8. [81,890.30] Inference of intent to defraud creditors — s 121(1) (before 16/12/96) An intent to defraud may be proved by inference from the known facts. In Freeman v Pope (1870) LR 5 Ch App 538 at 541, Lord Hatherley LC said: … it is established by the authorities that in the absence of any such direct proof of intention, if a person owing debts makes a settlement which subtracts from the property which is the proper fund for the payment of those debts, an amount without which the debts cannot be paid, then, since it is the necessary consequence of the settlement (supposing it effectual) that some creditors must remain unpaid, it would be the duty of the judge to direct the jury that they must infer the intent of the settlor to have been to defeat or delay his creditors, and that the case is within the statute. This approach has been adopted in a number of cases: see Noakes v J Harvy Holmes & Son (1979) 26 ALR 297 at 303; 37 FLR 5 at 10; Re Florance; Ex parte Andrew (1983) 52 ALR 339; Official Trustee v Marchiori (1983) 69 FLR 290 at 296; World Expo Park Pty Ltd v EFG Australia Ltd (1995) 129 ALR 685; Caddy v McInnes (1995) 58 FCR 570; 131 ALR 277 at 289. As to the use which can be made of admissions in criminal proceedings, see Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372; 138 ALR 341. The mere fact that a mortgage over torrens land has not been registered should not be taken as an indication of an intention to defraud creditors: Re Peninsula Service Pty Ltd (in liq) (1987) 91 FLR 4. [page 448] [81,890.35] “good faith” — s 121(1) and (2) (before 16/12/96) In Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557; 153 ALR 163, Kirby J (dissenting) held that a disponee needed “affirmatively to demonstrate a belief that all was regularly and properly done”, rather than to demonstrate an absence of bad faith or failure to advert to faith at all. He held that “wilful blindness” will deprive a disponee of “good faith”. The other members of the High Court did not consider the question of “good faith”. In Re Hyams; Official Receiver v Hyams (1970) 19 FLR 232 at 256 Gibbs J held that “in good faith” in the context of the predecessor to s 120 means “without notice that any fraud or preference contrary to the statute is intended”. This test has been applied in a number of cases dealing with s 121 of the Act: see Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364; 110 ALR 484; PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515; 107 ALR 199; compare Barton v Official Receiver (1984) 4 FCR 380 at 388; 58 ALR 328 at 337 per Fisher J. But quaere whether the wording used in s 121 imposes a more stringent duty of enquiry or investigation on the part of a purchaser than that which is required under s 120(1)(a): J Cannane Pty Ltd v Vouris (FCA, Tamberlin J, 665/95, 25 August 1995, unreported). In some cases, the court has asked whether the disponee has been privy or party to the fraud: PT Garuda Indonesia Ltd v Grellman, above, FCR at 528; ALR at 212; Caddy v McInnes (1995) 58 FCR 570; 131 ALR 277 at 293; compare Official Trustee in Bankruptcy v Mitchell, above, ALR at 492. In Official Trustee v Marchiori (1983) 69 FLR 290, the court asked whether the disponee ought to have been aware of the consequences of the transaction (which were to defraud creditors), and hence appears to have applied an objective test. Difficulties arise where the disponee is a minor or is unaware of the circumstances surrounding the transfer of property. When the onus of proof has shifted to the disponee in the circumstances described in Michael v Thompson (1894) 20 VLR 548 (see [81,890.10]), it is not necessarily discharged by proving a lack of knowledge or by an insufficient maturity to act in bad faith: Official Trustee v

Marchiori, above. See also Cannane v J Cannane Pty Ltd (in liq), above per Kirby J (dissenting). However uncontradicted evidence that the money was supplied for its intended (legitimate) purpose disposes of the issue. Charan v Gleeson [2012] FCA 236; BC201201301 at [44] per McKerracher J. See also [81,885.15]. [81,890.37] Family Court orders The decision of Official Trustee in Bankruptcy v Mateo (2003) 127 FCR 217; 202 ALR 571; [2003] FCAFC 26; BC200300521 has clarified the situation as to the applicability of s 121 to transfers made at the instance of the Family Court. The judgments of Wilcox, Branson and Merkel JJ should be read carefully. The judgment of Wilcox J, at [61], in discussing the cases following from s 37A of the Conveyancing Act 1919 (NSW) vis-à-vis this section perhaps encapsulates the application of the material concept: [61] … Section 37A of the Conveyancing Act uses the broad term “alienation”, whereas s 121 is concerned with a “transfer of property”. This term is not defined by the Act, other than by the statement in s 121(9)(a) (and s 120(7)(a)) that it includes a payment of money. It seems to direct attention to the particular transaction, commonly a document, that changes title to the relevant property. However, it is important to note that the transaction will not necessarily affect the legal title to the property. That is clear from the passage in Mullane, quoted by Needham AJ in Craven, in which Mason ACJ, Wilson, Brennan, Deane and Dawson JJ said s 79 referred to “orders which work an alteration of the legal or equitable interests in the property of the parties”. If the effect of a s 79 order requiring a party to a marriage to transfer an interest in real estate to the other party is to cause the designated transferor to become a bare trustee of the relevant legal interest, that is because the order has vested an equitable interest in the proposed transferee. Branson J said at [102]–[103]: [102] … the transfer which para 1 of the order required the husband to effect was necessary only to perfect the wife’s interest by the transfer to her of the husband’s legal interest in the matrimonial home. The transfer of the husband’s beneficial interest in the matrimonial home to [page 449] the wife was not on this view “[a] transfer of property by a person who later becomes a bankrupt.” within the meaning of s 121(1) of the Bankruptcy Act; it was a transfer of property by court order. [103] Even if the Family Court order is not so construed, in my view, the order necessarily destroyed the value of the husband’s interest in the property. The order gave the wife an entitlement to have the whole of the husband’s interest in the property transferred to her within 28 days and, if necessary, the right to call on the Registrar of the Family Court to execute all necessary documents. For this reason the husband’s remaining interest in the property was merely formal. The order restrained the husband in the meantime from charging or encumbering the title to the property: para 2 of the order. Although no argument was addressed to this court in this regard, it would seem that the order vested in the wife an interest in the property sufficient to support the registration of a caveat on the title to the matrimonial home: In the Marriage of Pertsoulis (1979) 4 Fam LR 613; In the Marriage of Bourke (1993) 16 Fam LR 779. In these circumstances, at no time after the making of the Family Court order could it be said, in my view, that any interest in the matrimonial home “would probably have become part of the [husband’s] estate or would probably have been available to creditors if the property had not been transferred” within the meaning of s 121(1)(a) of the Bankruptcy Act.

Her conclusion, at [114], was: [114] Although I have adopted a different approach to that adopted by Tamberlin J, in my view, the order his Honour made setting aside the notice issued by the official trustee was the appropriate order in the circumstances of this case. The first respondent did not, in my view, receive any money or property as a result of a “transaction” that is void against the trustee of a bankrupt: see s 139ZQ of the Bankruptcy Act. Section 121 of the Bankruptcy Act, upon which the applicant relied, had no application to the first respondent on the bases of the alleged facts and circumstances set out in the notice given to her by the official receiver: s 139ZS of the Bankruptcy Act. The remedy, if any, available to the appellant in the circumstances is, I consider, to make an application to the Family Court under s 79A of the Family Court Act. Merkel J at [133]–[134] concluded similarly: [133] It follows from the foregoing that when the Family Court makes an order by consent under s 79(1) of the Family Law Act altering the interests in property of the parties to a marriage the alteration, and the consequential vesting of the equitable estate or interest in the property in the transferee, take effect by reason of the court order and not by reason of the consent of the parties, even if that consent amounts to a contract between them. [134] The consent orders made by the Family Court on 22 June 2000 altered the interests in the matrimonial home of the bankrupt and his wife by transferring the equitable estate and interest of the bankrupt in the matrimonial home to his wife. The transfer of that estate and interest was brought about by the order of the Family Court, rather than by a transfer of the estate or interest by the bankrupt. For the purposes of ss 120 and 121 of the Bankruptcy Act the transfer of the equitable estate and interest in the matrimonial home was “by the consent orders made on 22 June 2000” and not “by the bankrupt”. Accordingly, there has not been a “transfer of property by a person who later becomes a bankrupt”. This is perhaps a sound summary of the labours of the Full Court that provides clear guidance in this situation. [81,890.40] “valuable consideration” — s 121(1) and (2) (before 16/12/96) In Barton v Official Receiver (1986) 161 CLR 75 at 86; 66 ALR 355 at 362, the High Court held that: … a “purchaser … for valuable consideration” within the meaning of s 120(1) of the Act is one who has given consideration for his purchase “which has a real and substantial value, and not one which is merely nominal or trivial or colourable”: Re Abbott [1983] 1 Ch 145 at 57. [page 450] This test has been applied in a number of cases dealing with s 121 of the Act: see Caddy v McInnes (1995) 58 FCR 570; 131 ALR 277 at 293; PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 532; 107 ALR 199 at 215; Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364; 110 ALR 484. The expression “valuable consideration” as used in s 121(1) includes the consideration of marriage: Official Trustee in Bankruptcy v Mitchell, above. “[C]onsideration consisting of an antecedent debt constitutes valuable consideration for a payment or transfer of property in discharge of that debt”: PT Garuda Indonesia Ltd v Grellman, above, FCR at 531; ALR at 214. However, the situation is different where a debtor conveys property by way of assignment or mortgage as security for an existing indebtedness: PT Garuda Indonesia Ltd v Grellman, above, FCR at 531; ALR at 215. In Re Hyams; Official Receiver v Hyams (1970) 19 FLR 232, which

was a decision as to the effect of the predecessor to s 120, Gibbs J said at 254: It is clear that the mere existence of an antecedent debt is not consideration for the giving of a security in respect of that debt; “in order to have consideration for a further security there must be an agreement, express or implied, to give time or some further consideration, or else there must be an actual forbearance which ex post facto may become the consideration to support the deed”: Wigan v English and Scottish Law Life Assurance Assn [1909] 1 Ch 291 at 303. In the context of s 120, see also NA Kratzmann Pty Ltd (in liq) v Tucker (1966) 123 CLR 257; Linter Group (in liq) v Goldberg (1992) 7 ACSR 580; Official Trustee v Racovitis (FCA, Davies, Lockhart and Spender JJ, 28 November 1995, unreported). See also [81,885.20]. [81,890.45] “becomes a bankrupt” — s 121(1) (before 16/12/96) Section 121 only applies to dispositions of property made before the disponor “becomes a bankrupt”. A person “becomes a bankrupt” upon the making of a sequestration order or upon the acceptance by the registrar of a debtor’s petition: Corke v Corke (1994) 48 FCR 359; 121 ALR 320; Florance v Andrew (1985) 58 ALR 377. [81,890.50] “void” — s 121(1) (before 16/12/96) In this context “void” means “voidable”: Noakes v J Harvy Holmes & Son (1979) 26 ALR 297 at 303; 37 FLR 5; compare Brady v Stapleton (1952) 88 CLR 322; [1952] ALR 989. In Official Trustee in Bankruptcy v Alvaro (1996) 66 FCR 372; 138 ALR 341, Wilcox and Cooper JJ summarised the relevant principles as follows: Although s 121 states that a disposition to which it applies is void, the courts will treat the disposition as effective until impugned in proceedings brought by the trustee in bankruptcy. Thus, where there is a disposition of property to which s 121 of the Act applies, the title which the donee receives is a defeasible one (see Brady v Stapleton (1952) 88 CLR 322 at 332–5 per Dixon CJ and Fullagar J; Harrods Ltd v Stanton [1923] 1 KB 516 at 520–1 per Bailache J; 521 per McCardie J). Until the title is defeased by the trustee in bankruptcy calling for delivery up or revesting of the property to the trustee or by instituting proceedings to establish the trustee’s entitlement to the property, the donee may deal with the property as owner and is not required to account for any profit made. If the property is sold and the proceeds of sale dissipated by the donee prior to defeasance the donee is not personally liable for the value of the property: Brady v Stapleton (1952) 88 CLR 322 at 332–5. Upon defeasance, if the property remains in its original form or in some derivative form in the hands of the donee, title to the property revests in the trustee in bankruptcy and the donee thereafter continues to hold the property as trustee for the trustee in bankruptcy and will be ordered to do all necessary acts to revest the property in the trustee in bankruptcy. Once the property has revested, the donee thereafter becomes personally liable to account for the property and any profits made by or from the use of that property since the time of revesting of the property. Thus, if the property comprises a money sum on deposit in a bank account earning interest the donee would not be liable for or be required to pay over interest earned prior to defeasance. On defeasance the beneficial interest in the chose in action being the debt owed by the bank to the donee equivalent to the amount of the money on deposit (Croton v R (1967) 117 [page 451] CLR 326 at 330–1; [1968] ALR 331) would vest in the trustee in bankruptcy and the donee would

be required to pay over or would be liable to the trustee for any interest earned from the date of defeasance. Where there has been a disposition of property and that property has not been retained but has been transformed into other identifiable property or mixed with the property of a third party, the court will allow a remedy against the identified specific property in order to give the trustee in bankruptcy an effective remedy upon the avoidance of the original disposition of property (Re Mouat; Kingston Cotton Mills Co v Mouat [1899] 1 Ch 831 at 834–5; Trautwein v Richardson [1946] ALR 129 at 130, 132–33). The decision in Re Mouat demonstrates that although the avoidance of the disposition brought about by s 121 of the Act and its predecessors is a legal remedy, the courts will grant equitable relief to make good the remedy. (See May on Fraudulent and Voluntary Dispositions of Property, 3rd ed, 1908, at pp 306–7). Where the property has altered in form, but remains in the hands of the donee, equity will allow the trustee in bankruptcy to claim the property in its altered form as property to which it is entitled, the original disposition by the bankrupt being void as against the trustee. Where the property has been mixed with property of another person so as to constitute a mixed asset or a mixed fund it becomes necessary to look to equity in order to determine how the interests of the persons whose property has come into the mixed fund are to be ascertained and provided for. The court set aside a number of dispositions of money, which was used to purchase property. See also Baker v Official Trustee (FCA, Burchett, Ryan and Carr JJ, 565/95, 3 August 1995, unreported, BC9507272). As to the situation where there is an intermediary between the disponor and disponee, see Caddy v McInnes (1995) 58 FCR 570; 131 ALR 277.

____________________ *Editor’s note: Section 121 applies only to bankruptcies for which the date of the bankruptcy is on or after 16 December 1996.

[81,893] Transactions where consideration given to a third party 121A (1) This section applies if: (a) a person who later becomes a bankrupt (the transferor) transfers property to another person (the transferee); and (b) the transferee gives some or all of the consideration for the transfer to a person (a third party) other than the transferor. (2) Sections 120 and 121 apply as if the giving of the consideration to the third party were a transfer by the transferor of the property constituting the consideration. (3) If the giving of the consideration to the third party is void against the trustee in the transferor’s bankruptcy under section 120 or 121, the trustee has the same rights to recover the property constituting the consideration as the

trustee would have if the giving of the consideration had actually been a transfer by the transferor of the property constituting the consideration. [s 121A insrt Act 33 of 2006 s 3 and Sch 1[15A], opn 31 May 2006]

[81,895] Avoidance of preferences *122 (1) A transfer of property by a person who is insolvent (the debtor) in favour of a creditor is void against the trustee in the debtor’s bankruptcy if the transfer: (a) had the effect of giving the creditor a preference, priority or advantage over other creditors; and (b) was made in the period that relates to the debtor, as indicated in the following table. [page 452] Periods during which transfers of property may be void Description of petition leading to debtor’s Period during which bankruptcy the transfer was made 1 Creditor’s petition Period beginning 6 months before the presentation of the petition and ending immediately before the date of the bankruptcy of the debtor 2

Debtor’s petition presented when at least one creditor’s petition was pending against a petitioning debtor or a member of a partnership against which the debtor’s petition was presented

Period beginning on the commencement of the debtor’s bankruptcy and ending immediately before the date of the

bankruptcy of the debtor 3

Debtor’s petition presented in any other circumstances

Period beginning 6 months before the presentation of the petition and ending immediately before the date of the bankruptcy of the debtor

[subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(1A) Subsection (1) applies in relation to a transfer of property by the debtor in favour of a creditor: (a) whether or not the liability of the debtor to the creditor is his or her separate liability or is a liability with another person or other persons jointly; and (b) whether or not the property transferred is the debtor’s own property or is the property of the debtor and one or more other persons. [subs (1A) insrt Act 12 of 1980 s 57; am Act 44 of 1996 s 3 and Schs 1, 2]

(2) Nothing in this section affects: (a) the rights of a purchaser, payee or encumbrancer in the ordinary course of business who acted in good faith and who gave consideration at least as valuable as the market value of the property; or (b) the rights of a person who is making title through or under a creditor of the debtor in good faith and who gave consideration at least as valuable as the market value of the property; or (c) a conveyance, transfer, charge, payment or obligation of the debtor executed, made or incurred under or in pursuance of a maintenance agreement or maintenance order; or (d) a transfer of property under a debt agreement. [subs (2) am Act 12 of 1980 s 57; Act 44 of 1996 s 3 and Sch 1]

(3) The burden of proving the matters referred to in subsection (2) lies upon the person claiming to have the benefit of that subsection. (4) For the purposes of this section:

a transfer of property is taken to have been made in favour of a creditor if it is made in favour of a person in trust for the creditor; and (b) a payment of tax, or of any other amount payable to the Commonwealth, or to the Commissioner of Taxation, under or because of an Act of which the Commissioner has the general administration, is taken to be made for consideration equal in value to the payment and in the ordinary course of business; and (a)

[page 453] (c) a creditor shall be deemed not to be a purchaser, payee or encumbrancer in good faith if the transfer of property was made under such circumstances as to lead to the inference that the creditor knew, or had reason to suspect: (i) that the debtor was unable to pay his or her debts as they became due from his or her own money; and (ii) that the effect of the transfer would be to give him or her a preference, priority or advantage over other creditors. [subs (4) am Act 32 of 1993 s 29 and Sch 1; Act 44 of 1996 s 3 and Schs 1, 2]

(4A) A reference in this section (other than subsection (5)) to a creditor of the debtor shall be read as including a reference to a person who would be a creditor of the debtor in relation to a contract, agreement, transaction or other dealing if the contract, agreement, transaction or other dealing were not, in whole or in part, void or unenforceable, or had not been voided in whole or in part, by or under a law of the Commonwealth or of a State or Territory of the Commonwealth. [subs (4A) insrt Act 12 of 1980 s 57]

(5) If a transfer of property is set aside by the trustee in a bankruptcy as a result of this section, the creditor to whom the property was transferred may prove in the bankruptcy as if the transfer had not been made. [subs (5) subst Act 44 of 1996 s 3 and Sch 1]

(6) [subs (6) rep Act 44 of 1996 s 3 and Sch 1] (7) In this section:

tax means tax (however described) payable under a law of the Commonwealth or of a State or Territory, and includes, for example, a levy, a charge, and municipal or other rates. [subs (7) subst Act 32 of 1993 s 29 and Sch 1]

(8) For the purposes of this section: (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; and (c) the market value of property transferred is its market value at the time of the transfer. [subs (8) insrt Act 44 of 1996 s 3 and Sch 1] SECTION 122 GENERALLY [81,895.5] General A transfer of property made by a debtor within a certain period prior to the date of bankruptcy in favour of a creditor may be avoided by the trustee if it had the effect of giving the creditor a preference, priority or advantage over other creditors. The purpose of s 122 is to avoid transfers which would otherwise have the effect of upsetting the statutory order of priorities amongst creditors: Burns v Stapleton (1959) 102 CLR 97 at 104. In an application under s 122(1), the trustee must prove the following: that there was a transfer of property by the bankrupt; that the bankrupt was insolvent at the time of the transfer; that the transfer was in favour of a creditor of the bankrupt (ie that there was a debtor/creditor relationship); that the transfer had the effect of giving the creditor a preference, priority or advantage over other creditors; and that the transfer was made during the relevant period. The transferee is entitled to retain the benefit of the transfer if it can bring itself within any of the exceptions set out in paragraphs of s 122(2). The most frequently relied upon of these is s 122(2)(a). [page 454] Paragraph 122(2)(a) provides that a transferee is entitled to retain the benefit of the transfer of property if it can prove the following: that the transfer was made in the ordinary course of business; that it acted in good faith; and that it gave consideration at least as valuable as the market value of the property. A transferee which has disgorged a preference may prove in the bankruptcy as if the transfer had not been made: s 122(5).

The giving of a preference is an act of bankruptcy: s 40(1)(b). For a history of the law of preferences and fraudulent preferences, see Harkness v Partnership Pacific (1997) 143 ALR 227 per Priestley JA. [81,895.10] Onus of proof The trustee bears the onus of proving the matters set out in s 122(1): Re Brechin; Ex parte the Trustee (1931) 7 ABC 255 at 268. A transferee which claims the benefit of s 122(2) bears the onus of proving the matters referred to in that subsection: s 122(3). Section 122(4)(c) does not cast an onus of proof on the transferee: Richards v Lloyd (1933) 49 CLR 49; Rees v Bank of New South Wales (1964) 111 CLR 210 and Spedley Securities Ltd (in liq) v Western Union Ltd (in liq) (1992) 27 NSWLR 111 at 117. Accordingly, a transferee seeking to prove that it acted in good faith is not required to negative the circumstances referred to in s 122(4)(c): Harkness v Partnership Pacific (1997) 143 ALR 227 at 235. Compare Re Bird; Ex parte M & G Casabene (1979) 39 FLR 281 at 286, 287; Horsburg v Commonwealth (1984) 2 ACLC 142. [81,895.20] “transfer of property” — s 122(1) The word “transfer” is one of the widest terms that can be used: Re Hardman (1932) 4 ABC 207. The word “transfer” is “an ample general word to describe transactions such as conveying property, creating charges, easements, profit a prendres, licences or leases, and any other act or thing which involves one person giving to or creating in another an interest in property”: Explanatory Memorandum to the Bankruptcy Legislation Amendment Bill 1996 [85.1]. The expression “transfer of property” is defined in s 122(8)(a) to include a payment of money. A transfer of property can also occur where a person does something that results in another person becoming the owner of property that did not previously exist: s 122(8)(b). The section covers a transfer of property held by the debtor on trust, where the transfer is made to a trust creditor in respect of a trust liability: Octavo Investment v Knight (1979) 144 CLR 360. In Sheahan v Carrier Air Conditioning Pty Ltd (1997) 147 ALR 1, the High Court was divided over the question of whether s 122(1A) widens the concept of “property” to include property of a third party. The majority (Dawson, Gaudron and Gummow JJ) preferred the narrow view that s 122(1A)(b) does not extend the concept of property beyond that which is jointly owned by the debtor and another person. Brennan CJ and Kirby J dissented on this issue. See also Re Cooke; Ex parte Official Trustee in Bankruptcy (1985) 4 FCR 398. See also Burns v Stapleton (1959) 102 CLR 97 at 104. [81,895.30] “person who is insolvent” — s 122(1) A person is insolvent if he or she is unable to pay his or her debts as and when they become due and payable: s 5(2) and (3). In Sandell v Porter (1966) 115 CLR 666 at 670, Barwick CJ held: “Insolvency is expressed in s 95 [the predecessor to s 122] as an inability to pay debts as they fall due out of the debtor’s own money. But the debtor’s own moneys are not limited to his cash resources immediately available. They extend to moneys which he can procure by realization by sale or by mortgage or pledge of his assets within a relatively short time — relative to the nature and amount of the debts and to the circumstances, including the nature of the business, of the debtor. The conclusion of insolvency ought to be clear from a consideration of the debtor’s financial position in its entirety and generally ought not to be drawn simply from a temporary lack of liquidity.” See also Bank of Australasia v Hall (1907) 4 CLR 1514 at 1528, 1543; Rees v Bank of New South Wales (1964) 111 CLR 210; Hymix Concrete v Garrity (1977) 13 ALR 321 at 328. [81,895.40] “in favour of a creditor” — s 122(1) A “creditor” means “any person who, at the date of the payment to him, would have had to come in and prove and rank with other creditors in

[page 455] the bankruptcy”: Bank of Australasia v Hall (1907) 4 CLR 1514 at 1536. See also s 82. The word “creditor” includes a contingent creditor: Bank of Australasia v Hall (1907) 4 CLR 1514 at 1536. A transfer is in favour of a creditor if it is made in favour of a person on trust for the creditor: s 122(4)(a). The transfer must be made to the creditor in its capacity as such (Robertson v Grigg (1932) 47 CLR 257 at 271) and not in some other capacity: for example as agent. The word “creditor” includes the Child Support Registrar in relation to a liability under a maintenance order: s 5(1). [81,895.50] Secured creditor A mortgage given during the statutory period to secure past indebtedness may constitute a preference to the extent of that past indebtedness: Hymix Concrete v Garrity (1977) 13 ALR 321. As to the situation where the transfer of property is preceded by an equitable assignment of the property given outside the statutory period, see Re Puntoriero; Ex parte Nickpack Pty Ltd (1991) 104 ALR 523. As to the situation where one form of security is substituted for another, see Sharyn Development Co Pty Ltd v Official Receiver (1980) 5 ACLR 1. This situation is analogous to arranging the security before the act of bankruptcy. In this case the availability of the evidence, and in particular the requirement under various state legislation for proof of payment of stamp duty is important. In Arnautovic & Sutherland t/as Jirsch Sutherland & Co v Cvitanovic (as Trustee of Bankrupt Estate of Rosee) [2011] FCA 809; BC201105460 per Katzmann J the court took the opportunity to deal with proof of payment of stamp duty. As the judge pointed at [1] “The appellants’ case at trial depended on the existence of an equitable charge created by an instrument upon which stamp duty was not paid. The appeal turns on the question of whether fresh evidence should be admitted to show that duty has now been paid.” The court set out the effect of this section (s 122(1)) at [6]: Section 122(1) of the Bankruptcy Act provides that a transfer of property by an insolvent person in favour of a creditor is void against the trustee in the debtor’s bankruptcy if the transfer had the effect of giving the creditor a preference, priority or advantage over other creditors and was made during one of three specified periods. Relevantly, one of those periods is the period beginning six months before the presentation of the debtor’s petitions and ending immediately before the date of the debtor’s bankruptcy. In this case that period commenced on 30 May 2009 — five days before Mr Kukulovski was appointed liquidator of Mr Rosee’s companie — and concluded on 30 November 2009. Only if Mr Kukulovski were a secured creditor could he avoid the effect of this provision. In this case the mechanism by which the evidence of payment can be admitted was according to s 27 of the Federal Court of Australia Act 1976 (Cth). There are similar provisions in force in other courts which are likely to have jurisdiction over such matters. The case was decided on whether the court should grant the application. The early decisions, namely Electricity Meter Manufacturing Co Ltd v Manufacturers’ Products Pty Ltd (1930) 30 SR (NSW) 422 at 430; 47 WN (NSW) 182 Street CJ (with whom Ferguson and James JJ agreed) and Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 283; [1931] ALR 194; (1931) 5 ALJR 109b; BC3100017 established the principle noted by Hodgson CJ in Eq in Official Trustee v D’Jamirze (1999) 48 NSWLR 416; 43 ATR 456; [1999] NSWSC 1249; BC9908354:

[58] Plainly, this means that an unstamped instrument is not of absolutely no effect until stamped … Until stamped, an instrument has whatever effect is consistent with the proposition that, if stamped, it will be fully effective ab initio. To put this another way, Shepherd must mean that an instrument is effective from the start, conditionally upon being stamped before relied on in court, or alternatively, from the start carries the potentiality of being so effective. But in McCallum (aka Hain) v National Australia Bank Ltd [2000] NSWCA 218; BC200004868 (“McCallum”) the appellant argued that, for a number of reasons, the principle in Shepherd did not apply to s 84(4). McCallum was a case in which the mortgage had been stamped at the relevant time [page 456] but it was stamped for a sum less than the value of the loan. The mortgage was later “up stamped”, that is, stamp duty was paid on an additional amount ensuring that duty was paid on the full amount of the loan. The “upstamping” did not take place, however, until after the mortgagee bank had served a notice for possession on the appellant mortgagor and after it had brought proceedings in the NSW Supreme Court, seeking (amongst other things) possession of the property secured by the mortgage. The key to the court of appeals reasoning can be found in [17], where the court came to the view that the construction of the statute excluded the whole line of reasoning of Shepherd by excluding the use of the word “unless”. The court also noted a similar approach by the full court of South Australia in Re Dehy Fodders (Aust) Pty Ltd v Bank of Adelaide (1973) 4 SASR 538 at 544 per Bray CJ and 556 per Walters J. The point turns on NSW legislation, but other jurisdictions including that of South Australia noted above, employ similar principles. The reasoning employed in this case would have to be considered by parties seeking to obtain the result contended for. As it was, the application was dismissed. [81,895.60] “void against the trustee” — s 122(1) The word “void” in this context means “voidable”. A transfer of property will be valid unless and until the trustee makes an election to treat it as void. See Broughton v Barker (1962) 1 SCR (NSW) Eq 78 and Re Hart; Ex parte Green [1912] 3 KB 6. [81,895.70] “preference, priority or advantage” — s 122(1) In Sheahan v Carrier Air Conditioning Pty Ltd (1997) 147 ALR 1, Kirby J identified two approaches to question of what constitutes a “preference, priority or advantage”. First, there is a broad approach: “To say that a disposition of property confers a preference upon a creditor in a liquidation conveys no more than that the disposition of property has placed the creditor in a position of advantage with respect to the general body of creditors”: Matthews v Geraghty (1986) 43 SASR 576 at 578 per Young J. Second, there is a narrower approach. “Although there appears to be a dearth of authority on the point, s 122(1) is directed at a situation of the pool of assets being available to creditors generally, being detrimentally affected by a transaction in favour of one creditor. Accordingly, in my view, what one has to do is to consider the situation of the creditors generally before the transaction, and then look at the situation afterwards and see whether the other creditors, that is the general creditors, have been disadvantaged … [I]f one can see that the position of the general creditors after the transaction was no worse than it was before the transaction then the transaction does not have the effect of giving a preference to one creditor over the others”: James v Commonwealth Bank of Australia (1995) 13 ACLC 1604 at 1607 per Young J. In Sheahan v Carrier Air Conditioning Pty Ltd, above, the receiver of a company paid moneys owing to two subcontractors so that they would complete work which they had abandoned. The company subsequently went into liquidation, and the liquidator sought to recover the payments as preferences. Brennan CJ held (obiter) that the payments were not preferences because the moneys realised by the

receiver would have been insufficient to discharge the appointor’s secured debt, and accordingly, the general body of unsecured creditors were in no worse position as a result of the payments. In so holding, he appears to have favoured the narrow interpretation. Kirby J, on the other hand, endorsed the broad view of “preference, priority or advantage”, and held (obiter) that the creditors had received a “preference, priority or advantage” over other creditors because they had been advantaged by the payments. He held that the general body of unsecured creditors did not necessarily have to be disadvantaged in order for the payments to be preferences. The majority (Dawson, Gaudron and Gummow JJ) did not address this issue. A contemporaneous payment for goods or services is not a payment to a creditor, even if there is past indebtedness. The prepayment for goods to be supplied or services to be provided does not constitute a preference: Airservices Australia v Ferrier (1996) 185 CLR 483. [page 457] As to the situation where moneys are paid into a solicitor’s or accountant’s trust account on account of work yet to be performed, see Higgins v GS Enterprises (1989) 7 ACLC 410 and V R Dye & Co v Peninsular Hotels Pty Ltd (in liq) [1999] 3 VR 201; (1999) 150 FLR 307; 32 ACSR 27 where, in the words of Tadgell J at [5]: “The money was paid by the respondent and received by the appellant for and on account of fees and disbursements to be incurred by the respondent; and inherent in the agreement was an authorisation to the appellant to take fees and disbursements out of that money. There can be no objection in principle to the conferral by a client of authority of that kind, even when the client is on the verge of insolvency. Indeed, an arrangement such as was made in this case may be, as it was here, a practical necessity.” Note also Ballan Pty Ltd (in liq) v Hood (1994) 13 WAR 385 (moneys paid into the accountant’s general account). See also Burns v Stapleton (1959) 102 CLR 97 at 104. [81,895.80] Running accounts Where the transfer of property challenged forms part of a series of transactions between the debtor and the creditor, its effect as a preference may need to be considered in light of the overall effect of the transactions on the creditor. In Richardson v Commercial Banking Co of Sydney (1952) 85 CLR 110 at 129, the court held that “where the payment forms an integral, an inseparable, part of an entire transaction its effect as a preference involves a consideration of the whole transaction” (see also Rees v Bank of New South Wales (1964) 111 CLR 210 at 221–2). Further, at 133, the court held: “A running account of any debtor who has reached insolvency must present difficulties under s 95 [the predecessor to s 122]. A debtor who pays something off his grocer’s account in order to induce the shopkeeper to give him further supplies of groceries can hardly be held, as it seems to us, to give the grocer a preference, if that was the clear basis of the payment. If the grocer credited the money as a payment for the future deliveries instead of the past deliveries of groceries he would in the end be in exactly the same position and yet he could not be attacked as having received a preference.” As to when a “running account” will be taken to exist, in Airservices Australia v Ferrier (1996) 185 CLR 483 at 504–5 Dawson, Gaudron and McHugh JJ held: “The essential feature of a running account is that it predicates a continuing relationship of debtor and creditor with an expectation that further debits and credits will be recorded.” The purpose for which the payment was made and received is particularly important in determining whether the creditor has been preferred. In Airservices Australia v Ferrier, above, Dawson, Gaudron

and McHugh JJ held that “the purpose for which the payment was made and received will usually determine whether the payment has the effect of giving the creditor a preference, priority or advantage over other creditors. If the sole purpose of the payment is to discharge an existing debt, the effect of the payment is to give the creditor a preference over other creditors unless the debtor is able to pay all his or her debts as they fall due. But if the purpose of the payment is to induce the creditor to provide further goods or services as well as to discharge an existing indebtedness, the payment will not be a preference unless the payment exceeds the value of the goods or services acquired”. At 502 they held: “To have the effect of giving the creditor a preference, priority or advantage over other creditors, the payment must ultimately result in a decrease in the net value of the assets that are available to meet the competing demands of the other creditors.” A trustee is entitled to choose any point during the statutory period, in order to show that there has been a decrease in the net value of assets, and there is “no reason why he should not choose … the point of peak indebtedness during the six month period”: Rees v Bank of New South Wales (1964) 111 CLR 210 at 221 (per Barwick CJ). Transfers of property after the date on which the account ceased to be a running account are considered separately for their effect as preferences: for example, see Airservices Australia v Ferrier, above. See also Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266; Re Discovery Books (1972) 20 FLR 470 and “The Ballad of the Running Account”, 7 Melbourne University Law Review 178. [page 458] [81,895.90] “ordinary course of business” — s 122(2)(a) In Robertson v Grigg (1932) 47 CLR 257 at 267 Gavan Duffy CJ and Starke J held that the test “is not whether the act is usual or common in the business of the debtor or of the creditor, but whether it is a ‘fair transaction, and what a man might do without having any bankruptcy in view’”. In Downs Distributing Co Pty Ltd v Associated Blue Star Stores Pty Ltd (in liq) (1948) 76 CLR 463, Rich J held: “The provision does not require that the transaction shall be in the ordinary course of any particular trade, vocation or business. It speaks of the ordinary course of business in general. But it does suppose that according to the ordinary and common flow of transactions in affairs of business there is a course, an ordinary course. It means that the transaction must fall into place as part of the undistinguished common flow of business done, that it should form part of the ordinary course of business as carried on, calling for no remark and arising out of no special or particular situation.” See also Taylor v White (1964) 110 CLR 129 at 136; [1964] ALR 595 and Burns v McFarlane (1940) 64 CLR 108. The transferee’s state of mind is not a matter which is relevant in determining whether the transfer was “in the ordinary course of business”. In relation to this issue, Priestley JA in Harkness v Partnership Pacific (1997) 143 ALR 227 at 291 held that “the ordinary course of business raises the question would an objective observer, knowing the actual business facts of how the particular payment came to be made, regard it as one in the ordinary course of business”. As to the relevance of the debtor’s state of mind, see Taylor v White, above; Kyra Nominees Pty Ltd v National Australia Bank Ltd (1986) 4 ACLC 400. In Jones v Southall & Bourke Pty Ltd [2004] FCA 539; BC200402346 Crennan J had to consider a case where the bankrupt had transferred a house obtained as a result of the application of stolen moneys to the purchase. It was contended that this transaction was one “in the ordinary course of business”. His Honour applied the cases set out above, particularly Harkness v Partnership Pacific. He said at [41]: “A person of modern sensibilities might have some difficulty in conceiving of a payment made as a

result of arrest and imprisonment for debt as being a payment made ‘in the ordinary course of business’ or within the earlier cognate phrase ‘in the usual course of trade and dealing’. However, payment after being arrested and imprisoned was, to apply to those times the [Robertson v Grigg (1932) 47 CLR 257] formula, ‘a fair transaction and what a man might do without any bankruptcy in view’ or Dixon CJ’s formula from [Taylor v White (1964) 110 CLR 129; [1964] ALR 595] ‘some usual process naturally passing without examination.’” His Honour held at [44]: “[The] restitutionary payment and the charge given by the bankrupt, which secured the payment, can be characterised as ‘fair’, ‘usual’ or ‘unremarkable’ occurrences in all the circumstances, despite not being actions which are ‘common’ or ‘everyday’ actions. That the charge was given following the discovery of a substantial fraud and that the charge was given and the payment made in return for the respondent forbearing to sue does not detract from this characterisation in the circumstances of this case.” [81,895.100] “good faith” — s 122(2)(a) In Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 at 287 (Queensland Bacon), Barwick CJ held: “The existence of knowledge or suspicion of insolvency negatives good faith: and the knowledge of circumstances from which ordinary men of business would conclude that the debtor is unable to meet his liabilities is knowledge of insolvency.” See also Re Weiss; Ex parte White v John Vicars & Co [1970] ALR 654 at 664. Where the creditor is an organisation, such as a corporation, the persons whose states of mind are relevant to the question of good faith, are those officers, employees or agents of the organisation who were concerned in an executive capacity in the transaction leading to the receipt of the moneys: Spedley Securities Ltd (in liq) v Western Union Ltd (in liq) (1992) 27 NSWLR 111 at 118–19. In Jones v Southall & Bourke Pty Ltd [2004] FCA 539; BC200402346 Crennan J applied the above cases to the facts set out at [81,895.90], so that a restitutionary payment by a thief can be made in good faith. In Clout v Sing [2005] FCA 1058; BC200505493 Kiefel J applied Queensland Bacon and linked the older authorities squarely to this section. [page 459] [81,895.110] Deemed lack of good faith — s 122(4)(c) A creditor shall be deemed not to be a transferee in good faith if the transfer was made under such circumstances as to lead to the inference that the creditor knew, or had reason to suspect, that the debtor was insolvent and that the effect of the transfer would be to give him or her a preference, priority or advantage over other creditors: s 122(4) (c). See Jones Shopfitting Co Pty Ltd (in liq) v National Bank of Australasia Ltd (1982) 68 FLR 282. In Jones v Southall & Bourke Pty Ltd [2004] FCA 539; BC200402346 at [53] it was held that the payments were made in good faith and were not subject to the above circumstances. As to the onus of proof in relation to s 122(4)(c), see [81,895.10]. [81,895.120] “market value of the property” — s 122(2)(a) The market value of the property is determined at the time of its transfer: s 122(8)(c). [81,895.130] “maintenance agreement” or “maintenance order” — s 122(2)(c) The terms “maintenance agreement” and “maintenance order” are defined in s 5. See Re Pearson; Ex parte Wansley (1993) 46 FCR 55; 17 Fam LR 224.

[81,895.140] Limitations A preference action cannot be commenced more than six years after the date of the bankruptcy: s 127.

____________________ *Editor’s note: Section 30(1) of the Insolvency (Tax Priorities) Legislation Amendment Act 1993 provides as follows: “Application of certain amendments of the Bankruptcy Act 1966 30 (1) The amendments of section 122 of the Bankruptcy Act 1966 apply to a payment made on or after the day on which this Act receives the Royal Assent, even if the tax or other amount became payable before that day.”

[81,900] Protection of certain transfers of property against relation back etc 123 (1) Subject to sections 118 to 122 (inclusive) and sections 128B and 128C, nothing in this Act invalidates, in any case where a debtor becomes a bankrupt: (a) a payment by the debtor to any of his or her creditors; (b) a conveyance, transfer or assignment by the debtor for market value; (c) a contract, dealing or other transaction by or with the debtor for market value; or (d) any transaction to the extent of a present advance made by an existing creditor; if: (e) the transaction took place before the day on which the debtor became a bankrupt; (f) the person, other than the debtor, with whom it took place, did not, at the time of the transaction, have notice of the presentation of a petition against the debtor; and (g) the transaction was in good faith and in the ordinary course of business. [subs (1) am Act 12 of 1908 s 58; Act 44 of 1996 s 3 and Schs 1, 2; Act 57 of 2007 s 3 and Sch 1[4], opn 28 July 2006]

(2) The burden of proving the matters referred to in paragraphs (1)(e), (f) and (g) in relation to a transaction lies upon the person who relies on the

validity of the transaction. (3) For the purposes of subsection (1), a transaction shall not be deemed not to have been in good faith and in the ordinary course of business by reason only that, at the time of the transaction, the person, other than the debtor, with whom it took place had notice of the commission of an act of bankruptcy by the debtor. (4) Nothing in this Act invalidates a payment by a debtor, on or before the date on which he or she became a bankrupt, of, or in respect of, a penalty or fine imposed on him or her by a court in respect of an offence against a law, whether a law of the Commonwealth or not. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

*(5) [subs (5) rep Act 32 of 1993 s 29 and Sch 1] [page 460] (6) Subject to sections 121, 128B and 128C, nothing in this Act invalidates, in any case where a debtor becomes a bankrupt, a conveyance, transfer, charge, disposition, assignment, payment or obligation executed, made or incurred by the debtor, before the day on which the debtor became a bankrupt, under or in pursuance of a maintenance agreement or maintenance order. [subs (6) subst Act 12 of 1980 s 58; am Act 119 of 1987 s 45; Act 57 of 2007 s 3 and Sch 1[5], opn 28 July 2006]

(7) In this section: payment includes the drawing, making or indorsing of a bill of exchange, cheque or promissory note. transaction includes payment, delivery, conveyance, transfer, assignment, contract or dealing. [s 123 am Act 44 of 1996 s 3 and Sch 1] SECTION 123 GENERALLY [81,900.5] Relation back and the court’s discretion — ss 123 and 124 In order to secure protection against the principle of relation back a person must fulfil the requirements of s 123 or s 124. The court does not have a general discretion: Re Holt; Ex parte Hodgson (FCA, Sweeney J, 281 of 1980, 3 November 1983, unreported). [81,900.10] “in the ordinary course of business” — s 123(1)(g) Section 123 is not restricted to

transactions between debtor and creditor. The concept of “ordinary course of business” cannot be restricted to considerations of trade: Rhodin v Frost (FCA, Needham J, 3914 of 1985, 20 December 1985, unreported, BC8500329). It is not a question of whether the act is usual or common in the business of the debtor, or of the creditor, but whether it is a “fair transaction, and what a man might do without having any bankruptcy in view”: Robertson v Grigg (1932) 47 CLR 257 at 267 per Starke J. See also Taylor v White (1964) 110 CLR 129; [1964] ALR 595; Downs Distributing Co Pty Ltd v Associated Blue Star Stores Pty Ltd (in liq) (1948) 76 CLR 463 at 477 per Rich J and see generally the annotations pursuant to s 122(2)(a). See also Re Bird; Ex parte Azzopardi (1979) 39 FLR 277. [81,900.20] Maintenance agreements and orders — s 123(6) Difficulty in interpretation of the law has sprung from amendments to the Bankruptcy Act 1966 (which came into force on 1 February [page 461] 1981) that introduced in s 5 definitions of “maintenance agreement” and “maintenance order” and a new s 123(6) which stated: Nothing in this [Bankruptcy] Act invalidates, in any case where a debtor becomes a bankrupt, a conveyance, transfer, charge, disposition, assignment, payment or obligation executed, made or incurred by the debtor, before the day on which the debtor became the bankrupt, under or in pursuance of a maintenance agreement or maintenance order. In respect of dispositions since 13 January 1988, the subsection was later prefaced with the words “Subject to section 121 …”. See 15 MULR 211 at 456, and especially at 466. In Melsom v Mullen (1985) 10 Fam LR 481; (1985) FLC 91–611, Brinsden J of the Supreme Court of Western Australia, had before him a chamber application in an action by a trustee in bankruptcy for an order restraining registration of a transfer in favour of the spouse of a bankrupt purportedly effected pursuant to a “maintenance agreement”. His Honour held that the equivalent of s 172 of the Property of Law Act was superseded upon the bankruptcy of the disponor by s 121 of the Bankruptcy Act, and that s 123(6) applied. It was (rightly) conceded that the subsection operated to prevent a trustee in bankruptcy from challenging a fraudulent disposition if that disposition were effected pursuant to a “maintenance agreement”. It is submitted that it was wrongly conceded that the agreement in question was a “maintenance agreement” within the meaning of the Bankruptcy (as distinct from the Family Law) Act. Section 120(2)(b) This provision applies to bankruptcies occurring on or after 16 December 1996. It exempts from the operation of s 120 “a transfer to meet all or part of a liability under a maintenance agreement or a maintenance order”. Section 121 In respect of bankruptcies occurring on or after 16 December 1996, a fraudulent purpose is deemed by s 121(2) to have governed a transfer (which now includes the creation of property in another) “if it can reasonably be inferred … that, at the time of the transfer, the transferor was, or was about to become, insolvent”. A spouse can only escape (under s 121(4)) the draconian consequences of this deeming provision if the relevant transfer was effected for “market value” (which would be unlikely in a divorce context) and if he or she can prove good faith. Essentially, the statutory construction issue is whether or not the words “with respect to the maintenance of a person” in the Bankruptcy Act definitions of “maintenance agreement” and “maintenance order” impose some limitation upon the types of orders and agreements intended to enjoy

immunity pursuant to s 123(6) of the Bankruptcy Act. The expression “with respect to the maintenance of a person” limits the Bankruptcy Act definition of “maintenance order” to the type of order that can be made by the Family Court pursuant to s 66G or s 74 of the Family Law Act 1975, as distinct from the type of order that can be made pursuant to s 78 or s 79 of that Act. However, a “maintenance agreement” within the meaning of the Family Law Act means an agreement in writing “that makes provision with respect to financial matters”, which are themselves defined as relating to, firstly, the maintenance of one of the parties, secondly, the property of the parties, and thirdly, the maintenance of children. In Re Pearson; Ex parte Wansley (1993) 46 FCR 55; 17 Fam LR 224, a trustee of a Deed of Assignment faced with the existence of a “maintenance agreement” within the meaning of the Family Law Act submitted that the expression “with respect to the maintenance of a person” in the Bankruptcy Act definition of “maintenance agreement” rendered s 123(6) inapplicable to an agreement which was in fact a property adjustment. However, the court did not decide the point; s 123(6) was held inapplicable because the relevant agreement had been made the subject of a consent order of the Family Court (under s 79 of the Family Law Act), and was therefore neither registered (under s 86 of the Family Law Act) nor approved (under s 87 of the Family Law Act). The Bankruptcy Act definition of “maintenance order” is not apt to include an order under s 79 of the Family Law Act and the Bankruptcy Act definition of “maintenance agreement” contemplates registration as a necessary element. In Re Jensen; Ex parte Jensen (1982) 45 ALR 574 at 576; 65 FLR 97, Fitzgerald J said: No doubt as a matter of deliberate policy, the Family Law Act 1975 draws a distinction between orders altering the interests of the parties in property, including orders with respect to settlement [page 462] of property, and orders with respect to maintenance … [S]ome practical difficulties seem to have been experienced by the Family Court as a consequence of limitations upon its powers which flow from the dichotomy between “property orders” and “maintenance orders”. These limitations appear to be overlooked, on occasion, by the Family Court in its efforts to resolve matrimonial disputes justly, efficiently and economically. Such a course is the more readily explicable, especially where the Family Court is asked to make a consent order, because the relevant considerations in respect of “property order” and “maintenance orders” overlap, although they do not coincide. In that case, his Honour decided that a consent order made by the Family Court expressed to be “as and by way of property settlement”, but really providing only for the payment of instalments of money, was a “maintenance order” and was therefore not an order authorised by s 79 of the Family Law Act, and as such it was able to be modified under s 83 of that Act. Accordingly, his Honour held that such an order, without more, was not a “final order” within the meaning of s 40(1)(g) of the Bankruptcy Act. (This anomaly has, incidentally, been cured by the insertion of s 40(3)(f) in the Bankruptcy Act 1966 by Act No 21 of 1985 which came into force on 19 May 1986. See Re Nemeth; Ex parte Nemeth (1987) 15 FCR 155; 73 ALR 499.) In Sanders v Sanders (1967) 116 CLR 366, Windeyer J said at 380: The basic distinction between s 84 [of the Matrimonial Causes Act 1959] and s 86(1) is that a provision for maintenance under s 84 does not involve an order relating to some particular item of property or an interest therein. An order may be made under s 84 providing simply for periodic payments, or for a lump sum, by way of maintenance. The party liable to perform it may then satisfy the obligation out of any resources available to him. That is a matter for him to decide. An

order under s 86(1), on the other hand, must be for a “settlement of property to which the parties are, or either of them is, entitled (whether in possession or reversion)”… [A]n order that one party should “settle” a sum of money, not being an existing separate fund, upon the other is not an order which can be made by virtue of s 86(1). But that does not mean that such an order cannot be made; for a provision for maintenance under s 84 is not restricted to a sum sufficient to provide subsistence. A lump sum may be ordered. And the order is not the less valid because it be described as a “settlement” and the party liable is permitted to raise it out of whatever of his assets he chooses. Therefore, s 123(6) of the Bankruptcy Act 1966 employs words such as “conveyance, transfer, charge, disposition, assignment, payment or obligation” rather than “periodic payments or lump sum payment or payment by way of maintenance”. But, to enjoy protection, any such “conveyance, transfer, charge, disposition, assignment, payment or obligation” must (semble) be “with respect to the maintenance of a person” rather than by way of property settlement or adjustment. Notwithstanding the recommendation at para 461 of ALRC Discussion Paper No 32, the 1987 amending legislation simply subjected s 123(6) to s 121 (so that fraudulent dispositions effected on or after 13 January 1988 are not protected). Even if it be the law that fraudulent dispositions effected before 13 January 1988 by intending bankrupts can be “protected” against creditors by s 123(6) of the Bankruptcy Act 1966, then it is nonetheless improper for a solicitor, accountant or other adviser to participate in any way in the creation of circumstances by which a fraud is perpetrated. Section 266(3) of the Bankruptcy Act 1966 proscribes criminal conduct in respect of which an adviser might be regarded as an accessory. That subsection provides: A person who has become a bankrupt after the commencement of this Act and, within 12 months before the presentation of the petition on which, or by virtue of the presentation of which he or she became a bankrupt and after the commencement of this Act, had disposed of, or created a charge on, any property with intent to defraud his or her creditors is guilty of an offence and is punishable, on conviction, by imprisonment for a period not exceeding 3 years. Note that s 6 of the Bankruptcy Act 1966 provides that “intent to defraud creditors” includes an intent to defraud one of them. [page 463] Also note that Bankruptcy Act s 265(4)(e) provides: (4) A person who, after the presentation of a petition on which, or by virtue of the presentation of which, he or she becomes a bankrupt: … (e) otherwise than in the ordinary way of his or her business, disposes of, or gives security over, property that he or she has obtained on credit and for which he or she has not paid; … is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 1 year. Although mens rea is an essential element of this offence, fraudulent intent is not. [81,900.30] “Collision” between Bankruptcy and Family Law Acts If bona fide, a settlement of Family Court proceedings between former spouses would not ordinarily be challenged by a trustee of the subsequent bankrupt estate of one of those spouses, as it is now well settled that the genuine

compromise of divorce proceedings constitutes “valuable consideration” within the meaning of s 120 of the Bankruptcy Act 1966, at least as it applies to pre-16 December 1996 bankrupt estates: Re Abbott [1983] 1 Ch 145; [1982] 3 All ER 181; [1982] 3 WLR 86; Barton v Official Receiver (1986) 161 CLR 75; 66 ALR 355. Since then, s 120(2)(b) specifically exempts transfers “to meet all or part of a liability under a maintenance agreement or a maintenance order”. Of course it is conceivable that the forgoing by a spouse of rights under the Family Law Act by way of compromise might be insignificant in value against the value of the property purportedly settled pursuant to that compromise; but in such a case, there would almost certainly be an apparent absence of bona fides capable of being challenged by the trustee in bankruptcy under the other limb of s 120 or under s 121 of the Bankruptcy Act. On 4 February 1987, the Deputy Commissioner of Taxation obtained an order at first instance from Purvis J of the Family Court of Australia sitting at Parramatta In the Marriage of Chemaisse (1987) 11 Fam LR 392, to the effect that the Deputy Commissioner had standing to bring an application pursuant to the provisions of s 87(8) of the Family Law Act 1975 seeking to have revoked an approval given pursuant to s 87(3) to an agreement reached between husband and wife. The Deputy Commissioner alleged that the approval was obtained in fraud of the court and the agreement was entered into in fraud of the Deputy Commissioner and in order to divest the husband of assets in favour of the wife, such assets being otherwise available in aid of satisfying a claim for income tax due and payable by the husband. However, on appeal (In the Marriage of Chemaisse (1988) 12 Fam LR 48), a Full Court of the Family Court cited Melsom v Mullen (1985) 10 Fam LR 481; (1985) FLC 91–611 as authority for the proposition “that it (was) not (before amendment) open to a court exercising jurisdiction under the Bankruptcy Act 1966 to treat the transaction as void or to set it aside”, and postulated that it was theoretically possible for a court exercising jurisdiction under the Family Law Act 1975 to approve a s 87 agreement even though it might specifically prejudice the interests of a creditor of a spouse. The rights of individual creditors to challenge frauds (whether as an abuse of the process of the Family Court or not) must be exercised for the benefit of creditors generally, and after a bankruptcy of the allegedly fraudulent debtor, by the trustee of that debtor’s bankrupt estate: see for example s 172 of the Property Law Act 1958 (Vic) and see Noakes v J Harvy Holmes & Son (1979) 26 ALR 297 at 304; 37 FLR 5. In Deputy Commissioner of Taxation v Swain (1988) 20 FCR 507; 81 ALR 12, a Full Court of the Federal Court of Australia considered an appeal from the decision of a judge adjourning bankruptcy proceedings by the Deputy Commissioner against Mr Swain. The adjournments had been granted because Mr Swain desired the opportunity to continue with the proceedings in the Family Court pursuant to which he sought orders that his wife leave him with sufficient property to pay the tax liability and his wife sought orders that all his property be made over to her. The Family Court proceedings were listed as defended proceedings likely to come on shortly. The Full Court of the Federal Court saw no reason why the bankruptcy proceedings should be postponed simply because proceedings were pending in the Family Court. The creditor was entitled to its sequestration order on establishment of the matters prescribed by s 52 of the Bankruptcy Act [page 464] and the power to adjourn had been exercised at first instance on the basis of the judge’s erroneous (it was held) belief that an adjournment was necessary to avoid a “collision” between the jurisdictions of the Federal and Family Courts. The Full Court pointed out that no such “collision” could occur if, by virtue of a bankruptcy, the husband’s property had vested in a trustee in bankruptcy before the Family Court came to hear the respective applications of the wife and husband. The Family Court would have

no power to deal with the property that had vested in the trustee in bankruptcy; but that gave rise to no “collision”. In the course of argument before the Full Court, reference was made to the provisions of s 123(6) as now amended. The court appreciated that, if the bankruptcy proceedings stood adjourned until the Family Court came to consider the respective applications of the husband and the wife, there would be a collision between any order of the Family Court that the husband make over property to the wife and earlier orders made by the Federal Court in the course of the bankruptcy proceedings freezing the husband’s property. The court plainly considered that overturning the adjournment of the bankruptcy proceedings and remitting the creditor’s petition for hearing immediately (and the likely sequestration order) would avert the “collision” as the Family Court would not have the opportunity to make an order in respect of property that had been frozen, that property by then having vested in the trustee in bankruptcy. The Full Court extracted lengthy passages from two High Court decisions, namely Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; 33 ALR 631 and R v Ross-Jones; Ex parte Green (1984) 156 CLR 185; 56 ALR 609, in support of the proposition that (except in the case of shams and dummy companies etc) “Parliament intended that the powers of the Family Court should be wide enough to prevent either of the parties to a marriage from evading his or her obligations to the other party, but it does not follow that the Parliament intended that the legitimate interests of third parties should be subordinated to the interests of a party to a marriage, or that the Family Court should be able to make orders that would operate to the detriment of third parties. There is nothing in the words of the sections [of the Family Law Act] that suggests that the Family Court is intended to have power to defeat or prejudice the rights or nullify the powers, of third parties, or to require them to perform duties which they were not previously liable to perform.” And “those powers [of the Family Court] are not to be construed so as to confer jurisdiction to defeat the rights, or enlarge the obligations, of persons who are not parties to the marriage involved in the relevant matrimonial cause” (the 1988 repeal of s 78(3) of the Family Law Act does not impinge upon this proposition). For the position under the Matrimonial Causes Act 1959, see Re Mottee; Ex parte Mottee v Official Receiver (1977) 16 ALR 129; 29 FLR 406 and Re Trigg; Ex parte Trigg v Official Receiver (1978) 25 ALR 207. Therefore, one might reasonably expect that an order made by, or an agreement registered in, the Family Court by which a spouse shortly to become bankrupt disposed of all divisible property in favour of the other spouse, to the detriment of the disponor’s creditors, would not be construed by a court exercising bankruptcy jurisdiction as fitting within the definitions in s 5 of the Bankruptcy Act of “maintenance agreement” or “maintenance order”. Nevertheless, despite this prediction, it is notable that such a view was not taken by Einfeld J in Re Moor; Ex parte Sonenco (No 77) Pty Ltd (1989) 13 Fam LR 27. Although it does not seem that the above proposition was submitted to his Honour, the relevant agreement was found to be a maintenance agreement within the meaning of s 123(6). However, his Honour was satisfied that the deed “amounted to a fraudulent attempt to defeat creditors”. Three ways of setting aside the disposition were suggested, his Honour embracing the dictum of Davies J in Re Caruana and Fenech; Ex parte DCT (1988) FLC 91–903 at 76,562 that “This court will be astute to protect creditors against fraud”. With respect, the suggestion that ss 30 and 239 might somehow facilitate the setting aside of a fraudulent disposition seems untenable; and the method actually employed by his Honour to set aside the s 86 agreement (a finding that, in strict terms of s 123(6), there had been no transfer because the relevant instrument had not been registered) is not convincing. When Re Moor went on appeal in Sonenco (No 77) Pty Ltd v Silvia (1989) 24 FCR 105; 89 ALR 437, s 123(6) was regarded as inapplicable because the transfer had not been, and could not have been, registered in face of the “Mareva” injunction obtained by the Deputy Commissioner of Taxation. Thus, there had not been a disposition pursuant to a “maintenance agreement” within the

[page 465] meaning of s 5 of the Bankruptcy Act 1966; nor had any “equity” arisen in the disponee by virtue of which the bankrupt’s covenant to transfer his interest in the land would be specifically enforced. In Re Azoulay; Ex parte Andrew v Townsend (1989) 90 ALR 37, Gummow J (who had delivered a joint judgment with Ryan J in Sonenco, the other member of that Full Court having been Beaumont J) again found it unnecessary to apply s 123(6) because the transfer under consideration was held to have been effected before the approval of any “maintenance agreement”. His Honour remarked obiter that the objectives of the bankruptcy and family law legislation “may, in given cases, collide or at least be ill-adjusted each to the other”. His Honour’s view in this regard was approved by the Full Court in Corke v Corke (1994) 48 FCR 359; 121 ALR 320, however such an observation falls a long way short of any judicial recognition of a conflict between the meaning and effect of each Act. In Re McMaster; Ex parte McMaster (1991) 33 FCR 70; 105 ALR 156, Hill J refused leave to proceed on a wife’s application under s 58(3)(b) of the Bankruptcy Act where the husband had become bankrupt after suffering a Family Court order to pay a substantial sum to her. Having discovered that she would compete with other unsecured creditors for very little property, she wished to go back to the Family Court to seek a replacement order declaring her to own the lion’s share of the “matrimonial property”. However, as the wife’s claim was in respect of a provable debt, she was obliged to seek leave to proceed from the Federal Court. The Family Court order had been based on a computation of the present value of the husband’s expected eventual superannuation entitlement and it was clear that such an entitlement would be unlikely ever to vest in the trustee in bankruptcy. The policy of the bankruptcy law to “bring about the discharge of the debtor from future liability for his existing debts” was perceived as a basis for preventing the wife from seeking a [Family Court] order which would “effectively defer the liability and take it out of the category of provable debts”. See also Fraser v DCT (1996) 69 FCR 99; 138 ALR 689. A Full Court of the Federal Court (Black CJ, Lockhart and Beazley JJ) in Corke v Corke (1994) 48 FCR 359; 121 ALR 320 found scope for the application of s 123(6), but declined to apply it to a maintenance agreement entered into before the wife became a bankrupt but during the period of relation back and registered pursuant to s 86 of the Family Law Act, because the agreement itself “did not create or give rise to any equitable interest in the matrimonial home to the benefit of the husband”. However, although the agreement contained a covenant by the parties to effect a transfer by the wife to the husband (which covenant had not been performed before commencement of the bankruptcy), the court (ALR at 326) concluded (obiter) that perfection of the covenant would have left the resultant transfer protected by s 123(6). It was not submitted that the agreement in question was not an agreement with respect to the maintenance of a person. The Federal Court has no power to interfere with orders made by the Family Court: Re Baxter; Ex parte Official Trustee in Bankruptcy (1986) FLC 91–715. There, a husband and wife owned their matrimonial home as tenants in common in equal shares. After their separation, the wife continued to occupy the house. The husband became bankrupt, whereupon his interest vested in the Official Trustee. After his discharge, the wife applied to the Family Court for orders under s 78 of the Family Law Act. The Official Trustee did not seek to appear. The court made a declaration that the wife was the sole proprietor of the property and ordered that the husband transfer his interest to the wife. Northrop J appeared to take the view that the Family Court orders were “beyond power”, but held that the Federal Court had no jurisdiction or power to interfere with them. Interestingly, the Family Court later recalled his orders! The trustee in bankruptcy had no need, at least in most cases, to seek to intervene in Family Court proceedings. If the Family Court appears to be in a position to make an order affecting the property of a bankrupt already vested in the trustee, he or she would be entitled to request the Family Court to refrain from arrogating jurisdiction and, if necessary, approach the High Court for prohibition: see R v Ross-

Jones; Ex parte Green (1984) 156 CLR 185; 56 ALR 609. See also Re Aley; Ex parte Sweeney (1996) 66 FCR 101 and Re Aley; Ex parte Sweeney v Aley (1996) 63 FCR 294. In Mateo v Official Trustee in Bankruptcy (2002) 117 FCR 179; 188 ALR 667 a disposition of property from husband to wife was held, bearing in mind the “duration of the marriage and the number of hours which she said she worked in caring for the children and in and around the home [page 466] over the 27 years of marriage for approximately 35 hours per week” to be adequate. In Lopatinsky v Official Trustee in Bankruptcy (2002) 29 Fam LR 274; [2002] FCA 861; BC200203820 at [40], however, Moore J held: “In my opinion the approach of the trustee to the judgment of Tamberlin J in Mateo is too narrow. It is true that his Honour, like Chisholm J in [Re Sabri; Ex parte Brien v Australia and New Zealand Banking Group Ltd (1997) 137 FLR 165; 21 Fam LR 213], attached some importance to the existence of the Family Court orders. However, that is because the fact that the Family Court had given its approval to those orders (and implicitly any consequential transfer of property) provided some support for the contention that the transfer was a fair and equitable one and bona fide. That in turn provided some evidence, or at least support for the contention, that adequate consideration had been provided in exchange for the transfer of property from one party to another. In this case, the applicant does not have the benefit of Family Court orders but that is not, in my opinion, determinative of whether consideration, or adequate consideration for the purposes of s 120, was provided.” His Honour took the view that an agreement to forbear from suing could validly operate in such circumstances. He said at [46]: “There is a body of case law that settlements of matrimonial causes (in the broadest sense) or forbearance to sue by refraining from prosecuting claims of this character, is good consideration. While the facts in the following cases and the statutory context in which they were decided are not precisely the same as the present, they nonetheless illustrate how these matters can constitute consideration.” He referred to Re Pope; Ex parte Dicksee [1908] 2 KB 169 and also to Re Abbott, above. His Honour said at [48]: “Re Abbott was referred to with approval in Rima[r] Pty Ltd v Pappas (1986) 160 CLR 133 at 142 though on a broader point. In Re Pearson; Ex parte Wansley v Pearson (1993) 46 FCR 55, Wilcox J followed Re Pope and concluded (at 65) that when the third party, in this case a wife, has given up a right to relief, a ‘transfer of that property to the other party constitutes valuable consideration because it derogates from the first party’s legal rights’.”

____________________ *Editor’s note: Section 30 of the Insolvency (Tax Priorities) Legislation Amendment Act 1993 provides as follows: “Application of certain amendments of the Bankruptcy Act 1966 30 (1) … (2) Despite the repeal of subsection 123(5) of the Bankruptcy Act 1966, that subsection continues to apply in relation to a deduction in relation to which section 221P or 221YU of the Income Tax Assessment Act 1936 applies.”

Prior to its repeal s 123(5) provided as follows: “(5) Nothing in this Act invalidates, in any case where a debtor, being: (a) a person required by Division 2 of Part VI of the Income Tax Assessment Act 1936 to make a deduction from the salary or wages of an employee; or (b) a person required by Division 4 of Part VI of the Income Tax Assessment Act 1936 to make a deduction from dividend or from interest; becomes a bankrupt, a payment to the Commissioner of Taxation (including a payment by means of the purchase of tax stamps) by the debtor, on or before the date on which he became a bankrupt, of an amount that he was required so to pay in respect of deductions so made.”

[81,905] Protection of certain payments to bankrupt etc 124 (1) Notwithstanding anything contained in this Act, a payment of money or delivery of property (including a security or a negotiable instrument) to, or in accordance with the order or direction of, a person who becomes, or has become, a bankrupt or a person claiming by assignment from him or her is a good discharge to the person paying the money or delivering the property: (a) if, in the case of a payment or delivery made before the day on which the first-mentioned person becomes a bankrupt — it is made in good faith and in the ordinary course of business; or (b) if, in the case of a payment or delivery made on or after the day on which the first-mentioned person became a bankrupt — it is made in good faith, in the ordinary course of business and without negligence. [subs (1) am Act 12 of 1980 s 59; Act 44 of 1996 s 3 and Sch 2]

(2) The burden of proving the matters referred to in subsection (1) lies upon the person who relies on the validity of the payment or delivery of property. (3) For the purposes of this section, a payment or delivery of property shall not be deemed not to have been made in good faith and in the ordinary course of business by reason only that, at the time of the payment or delivery, the person by whom it was made: (a) knew or had reason to suspect that the person to whom, or in accordance with whose order or direction, it was made was unable to pay his or her debts as they became due from his or her own money; or

[page 467] (b) had notice of the commission of an act of bankruptcy by that person or of the presentation of a creditor’s petition against that person. [subs (3) am Act 44 of 1996 s 3 and Sch 2] SECTION 124 GENERALLY [81,905.5] “in good faith in the ordinary course of business and without negligence” It is difficult to state with any clarity what those words mean. It is, of course, very much dependent on the facts of each individual case. In Re Hasler; Ex parte Official Receiver v Bank of New South Wales (1974) 23 FLR 139, it was noted that one can obtain nothing more than guidance from other cases as to the meaning of the expression. Negligence was held to be a careless disregard of the interests of the general body of creditors of the payee who had become bankrupt. The fact that the payee had become bankrupt before the payment or delivery was made is basic to the consideration of the question whether the payer was negligent. Where the question is whether a payment or delivery was made without negligence, it is material to consider whether the payer then (a) knew or had reason to suspect that the payee was unable to pay his debts as they became due from his own money; or (b) had notice of the commission of an act of bankruptcy by the payee or of the presentation of the creditor’s petition.

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[81,910] Certain accounts of undischarged bankrupt 125 (1) Where a prescribed organization has ascertained that a person having an account with it is an undischarged bankrupt, then, unless the prescribed organization is satisfied that the account is on behalf of some other person, it shall forthwith inform the trustee, in writing, of the existence of the account and, subject to subsection (2), shall not make any further payments out of the account, except under an order of the Court of which a copy has been served on it or in accordance with written instructions from the trustee. [subs (1) am Act 21 of 1985 s 25]

(2) If, within 1 month from the date on which the prescribed organization informed the trustee of the existence of the account, a copy of an order of the Court in respect of the account has not been served on the prescribed organization and it has not received written instructions from the trustee within that period in respect of the account, the prescribed organization is entitled to act without regard to any claim or right the trustee may have in

respect of the account. [subs (2) am Act 21 of 1985 s 25]

(2A) This section does not apply in relation to an account held by a bankrupt if the account is a supervised account in relation to the bankrupt. [subs (2A) insrt Act 20 of 2005 s 3 and Sch 2, opn 18 Mar 2005]

(3) In this section: bank means an ADI or any other bank. [def insrt Act 48 of 1998 Sch 1]

building society [def rep Act 44 of 1999 s 4 and Sch 7]

co-operative society means: (a) a society registered or incorporated as a co-operative housing society under a law of a State or Territory; or [page 468] (b) any other society whose principal business consists of borrowing moneys from its members and lending those moneys to its members and that is registered or incorporated under a law of a State or Territory relating to co-operative societies. [def subst Act 44 of 1999 s 4 and Sch 7]

prescribed organization means a bank, a co-operative society or any other financial organization of a kind prescribed by the regulations for the purposes of this definition. [def am Act 44 of 1999 s 4 and Sch 7]

supervised account has the meaning given by section 139ZIB. [def insrt Act 20 of 2005 s 3 and Sch 2, opn 18 Mar 2005] [subs (3) insrt Act 21 of 1985 s 25; am Act 44 of 1996 s 3 and Sch 1; am Act 44 of 1999 s 4 and Sch 7]

[81,915] Dealings with undischarged bankrupt in respect of after-acquired property 126 (1) A transaction by a bankrupt with a person dealing with him or her in good faith and for valuable consideration in respect of property acquired

by the bankrupt on or after the day on which he or she became a bankrupt is, if completed before any intervention by the trustee, valid against the trustee, and any estate or interest in that property which, by virtue of this Act, is vested in the trustee shall determine and pass in such manner and to such extent as is necessary for giving effect to the transaction. [subs (1) am Act 12 of 1980 s 60; Act 44 of 1996 s 3 and Sch 2]

(2) For the purposes of subsection (1), the receipt of any money, security or negotiable instrument from, or in accordance with the order or direction of, a bankrupt by his or her banker, and any payment of money or delivery of a security or negotiable instrument made to, or in accordance with the order or direction of, a bankrupt by his or her banker, shall be deemed to be a transaction by the bankrupt with that banker dealing with him or her for valuable consideration. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) The lodging by the trustee of a caveat having the effect of forbidding the registration of an instrument affecting any land, or an estate or interest in any land, shall be deemed to be a sufficient intervention for the purposes of this section in relation to a transaction in respect of that land or that estate or interest in land. (4) In this section: banker means an ADI or any other banker. [subs (4) insrt Act 48 of 1998 Sch 1] SECTION 126 GENERALLY [81,915.10] See Rimar Pty Ltd v Pappas (1986) 160 CLR 133; 64 ALR 9.

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[81,920] Limitation of time for making claims by trustee etc 127 (1) After the expiration of 20 years from the date on which a person became a bankrupt, a claim shall not be made by the trustee in the bankruptcy to any property of the bankrupt, and that property shall, subject to the rights, if any, of a person other than the [page 469]

trustee in respect of the property, be deemed to be vested in the bankrupt, or a person claiming through or under him or her, as the case may be. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) An action under subsection 118(9) with respect to a charge or charging order shall not be commenced by the trustee of the estate of a bankrupt after the expiration of 6 years from the date on which the bankrupt became a bankrupt. [subs (2) insrt Act 12 of 1980 s 61]

(3) An action under section 120 with respect to a transfer shall not be commenced by the trustee of the estate of a bankrupt after the expiration of 6 years from the date on which the bankrupt became a bankrupt. [subs (3) insrt Act 12 of 1980 s 61; am Act 44 of 1996 s 3 and Sch 1]

(4) An action under section 121 with respect to a transfer of property may be commenced by the trustee of the estate of a bankrupt at any time. [subs (4) insrt Act 12 of 1980 s 61; am Act 44 of 1996 s 4 and Sch 1]

(5) An action under section 122 with respect to a transfer of property shall not be commenced by the trustee of the estate of a bankrupt after the expiration of 6 years from the date on which the bankrupt became a bankrupt. [subs (5) insrt Act 12 of 1980 s 61; am Act 44 of 1996 s 3 and Sch 1]

[81,925] Notice to trustee where identity of vendor etc with bankrupt in doubt 128 (1) Where a doubt arises as to the identity with a bankrupt of a person appearing in the title to any property, an intending or actual vendor, mortgagor or lessor of the property or applicant to bring land under the provisions of any law of the Commonwealth or of a State or Territory of the Commonwealth relating to title to land, or a resuming or constructing authority under any law of the Commonwealth or of a State or Territory of the Commonwealth may give to the trustee in the bankruptcy a notice containing particulars of the property in question and of the person whose identity with the bankrupt is in question, and a statement of his or her intention to sell, mortgage or lease, or complete a sale, mortgage or lease of, the property or to bring the property under the provisions of any law of the Commonwealth or of a State or Territory of the Commonwealth relating to title to land, or to pay compensation in respect of the resumption of the property, as the case may be.

[subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) The trustee may, within 3 months after the notice was given, file with the Registrar of Titles or Registrar-General or other appropriate officer of the Commonwealth, or of the State or Territory concerned, a memorandum claiming the property in respect of which the notice was given. (3) If the trustee does not file a memorandum claiming the property in accordance with subsection (2), he or she is not entitled at a future time to assert his or her title to that property or to make any claim in respect of that property as against the vendor, mortgagor, lessor, applicant or the resuming or constructing authority, as the case may be, or a person claiming under or through the vendor, mortgagor, lessor or applicant. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) The trustee may, at any time before the expiration of the period of 3 months referred to in subsection (2), withdraw a memorandum filed under that subsection. [page 470]

Subdivision B — Superannuation Contributions [Subdiv B insrt Act 57 of 2007 s 3 and Sch 1[6], opn 28 July 2006]

[81,925A] Simplified outline 128A The following is a simplified outline of this Subdivision: This Subdivision enables the recovery of superannuation contributions made to defeat the bankrupt’s creditors. There are 2 types of recoverable contributions: (a) contributions made by a person who later becomes a bankrupt (see section 128B); (b) contributions made by a third party for the benefit of a person who later becomes a bankrupt (see section 128C). Superannuation accounts may be frozen for up to 180 days pending the taking of recovery action under section 139ZQ or 139ZU.

[81,925B] Superannuation contributions made to defeat creditors — contributor is a person who later becomes a bankrupt 128B Transfers that are void (1) A transfer of property by a person who later becomes a bankrupt (the transferor) to another person (the transferee) is void against the trustee in the transferor’s bankruptcy if: (a) the transfer is made by way of a contribution to an eligible superannuation plan; and (b) the property would probably have become part of the transferor’s estate or would probably have been available to creditors if the property had not been transferred; and (c) the transferor’s main purpose in making the transfer was: (i) to prevent the transferred property from becoming divisible among the transferor’s creditors; or (ii) to hinder or delay the process of making property available for division among the transferor’s creditors; and (d) the transfer occurs on or after 28 July 2006. Showing the transferor’s main purpose in making a transfer (2) The transferor’s main purpose in making the transfer is taken to be the purpose described in paragraph (1)(c) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent. (3) In determining whether the transferor’s main purpose in making the transfer was the purpose described in paragraph (1)(c), regard must be had to: (a) whether, during any period ending before the transfer, the transferor had established a pattern of making contributions to one or more eligible superannuation plans; and (b) if so, whether the transfer, when considered in the light of that pattern, is out of character.

Other ways of showing the transferor’s main purpose in making a transfer (4) Subsections (2) and (3) do not limit the ways of establishing the transferor’s main purpose in making a transfer. [page 471] Rebuttable presumption of insolvency (5) For the purposes of this section, a rebuttable presumption arises that the transferor was, or was about to become, insolvent at the time of the transfer if it is established that the transferor: (a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor’s business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them. Protection of successors in title (6) This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property. Meaning of transfer of property and market value (7) For the purposes of this section: (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; and (c) the market value of property transferred is its market value at the time of the transfer.

[81,925C] Superannuation contributions made to defeat creditors — contributor is a third party 128C Transfers that are void

(1) If: (a) a person (the transferor) transfers property to another person, (the transferee); and (b) the transfer is by way of a contribution to an eligible superannuation plan for the benefit of a person who later becomes a bankrupt (the beneficiary); and (c) the transferor did so under a scheme to which the beneficiary was a party; and (d) the property would probably have become part of the beneficiary’s estate or would probably have been available to creditors if the property had not been transferred; and (e) the beneficiary’s main purpose in entering into the scheme was: (i) to prevent the transferred property from becoming divisible among the beneficiary’s creditors; or (ii) to hinder or delay the process of making property available for division among the beneficiary’s creditors; and (f) the transfer occurred on or after 28 July 2006; the transfer is void against the trustee in the beneficiary’s bankruptcy. (2) For the purposes of paragraph (1)(b), disregard a benefit that is payable in the event of the death of a person. Showing the beneficiary’s main purpose in entering into the scheme (3) The beneficiary’s main purpose in entering into the scheme is taken to be the purpose described in paragraph (1)(e) if it can reasonably be inferred from all the circumstances that, at the time when the beneficiary entered into the scheme, the beneficiary was, or was about to become, insolvent.

[page 472] (4) In determining whether the beneficiary’s main purpose in entering into the scheme was the purpose described in paragraph (1)(e), regard must be had to: (a) whether, during any period ending before the scheme was entered into, the transferor had established a pattern of making contributions to one or more eligible superannuation plans for the benefit of the beneficiary; and (b) if so, whether the transfer, when considered in the light of that pattern, is out of character. (5) For the purposes of paragraph (4)(a), disregard a benefit that is payable in the event of the death of a person. Other ways of showing the beneficiary’s main purpose in entering into a scheme (6) Subsections (3) and (4) do not limit the ways of establishing the beneficiary’s main purpose in entering into a scheme. Rebuttable presumption of insolvency (7) For the purposes of this section, a rebuttable presumption arises that the beneficiary was, or was about to become, insolvent at the time the beneficiary entered into the scheme if it is established that the beneficiary: (a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the beneficiary and as sufficiently disclose the beneficiary’s business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them. Protection of successors in title (8) This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property. Meaning of transfer of property and market value

(9) For the purposes of this section: (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; and (c) the market value of property transferred is its market value at the time of the transfer.

[81,925D] Time for making claims by trustee 128D (1) An action under section 128B or 128C with respect to a transaction may be commenced by the trustee of a bankrupt’s estate at any time. (2) A section 139ZQ notice in relation to a transaction that, under section 128B or 128C, is void against the trustee of a bankrupt’s estate must not be given before the commencement of Part 2 of Schedule 1 to the Bankruptcy Legislation Amendment (Superannuation Contributions) Act 2007. (3) A section 139ZQ notice in relation to a transaction that, under section 128B or 128C, is void against the trustee of a bankrupt’s estate may be given even if the transaction occurred before the commencement of Part 2 of Schedule 1 to the Bankruptcy Legislation Amendment (Superannuation Contributions) Act 2007.

[81,925E] Superannuation account-freezing notice 128E (1) Scope This section applies in relation to a member of an eligible superannuation plan if the Official Receiver has reasonable grounds to believe that: (a) a transaction is void against the trustee of a bankrupt’s estate under section 128B or 128C; and [page 473] (b) either: (i) the whole or a part of the member’s superannuation interest is

attributable to the transaction; or (ii) the trustee of the bankrupt’s estate has made an application for a section 139ZU order that relates to the transaction and the member’s superannuation interest. (2) Giving of freezing notice The Official Receiver may, by written notice (a superannuation account-freezing notice) given to the trustee of the eligible superannuation plan, direct the trustee of the plan not to: (a) cash or debit; or (b) permit the cashing, debiting, roll-over, transfer or forfeiture of; the whole or any part of the superannuation interest except: (c) for the purposes of complying with a notice under section 139ZQ; or (d) for the purposes of complying with an order under section 139ZU; or (e) for the purposes of charging costs against, or debiting costs from, the superannuation interest; or (f) for the purposes of giving effect to a family law payment split; or (g) in accordance with the written consent of the Official Receiver given under section 128H; or (h) for the purposes of complying with an order under paragraph 128K(1)(b); or (i) for the purposes of complying with an order under subsection 139ZT(2); or (j) in such circumstances (if any) as are specified in the regulations. (3) The superannuation account-freezing notice must set out the facts and circumstances because of which the Official Receiver considers that the Official Receiver has reasonable grounds to believe that: (a) the transaction is void against the trustee of the bankrupt’s estate under section 128B or 128C; and (b) either: (i) the whole or a part of the member’s superannuation interest is attributable to the transaction; or (ii) the trustee of the bankrupt’s estate has made an application for a section 139ZU order that relates to the transaction and the

member’s superannuation interest. (4) When Official Receiver may give freezing notice The Official Receiver may give the superannuation account-freezing notice: (a) if the Official Trustee is the trustee of the bankrupt’s estate — on the initiative of the Official Receiver; or (b) if a registered trustee is the trustee of the bankrupt’s estate — on application by the registered trustee. (5) When freezing notice comes into force The superannuation accountfreezing notice comes into force when the notice is given to the trustee of the eligible superannuation plan.

[81,925F] Revocation of superannuation accountfreezing notice 128F (1) Revocation of freezing notice by Official Receiver If a superannuation account-freezing notice is in force in relation to a member of an eligible superannuation plan, the Official Receiver may, by written notice given to the trustee of the plan, revoke the superannuation account-freezing notice. [page 474] (2) The Official Receiver may revoke a superannuation account-freezing notice that relates to a member of an eligible superannuation plan: (a) if the Official Trustee is the trustee of the bankrupt’s estate — on the initiative of the Official Receiver; or (b) if a registered trustee is the trustee of the bankrupt’s estate — on application by the registered trustee; or (c) in any case — on application by the member. (3) Revocation of freezing notice when section 139ZQ notice complied with etc If: (a) subparagraph 128E(1)(b)(i) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan; and

(b) during the 180-day period after the superannuation accountfreezing notice comes into force, a section 139ZQ notice is given in relation to the transaction referred to in paragraph 128E(1)(a); the superannuation account-freezing notice is revoked: (c) when the trustee of the plan complies with the section 139ZQ notice; or (d) when the section 139ZQ notice is revoked; or (e) when the Court sets aside the section 139ZQ notice. (4) Revocation of freezing notice if no section 139ZQ notice given after 180 days If subparagraph 128E(1)(b)(i) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan, the superannuation account-freezing notice is revoked if: (a) 180 days pass after the notice comes into force; and (b) no section 139ZQ notice has been given in relation to the transaction referred to in paragraph 128E(1)(a). (5) Revocation of freezing notice when section 139ZU order complied with etc If: (a) subparagraph 128E(1)(b)(ii) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan; and (b) during the 180-day period after the superannuation accountfreezing notice comes into force, a section 139ZU order is made in relation to the transaction referred to in paragraph 128E(1)(a) and in relation to the member’s superannuation interest; the superannuation account-freezing notice is revoked: (c) when the trustee of the plan complies with the section 139ZU order; or (d) when the section 139ZU order is set aside on appeal. (6) Revocation of freezing notice when application for section 139ZU order dismissed or withdrawn If: (a) subparagraph 128E(1)(b)(ii) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan; and

(b) during the 180-day period after the superannuation accountfreezing notice comes into force: (i) the Court dismisses an application for a section 139ZU order in relation to the transaction referred to in paragraph 128E(1) (a) and in relation to the member’s superannuation interest; or [page 475] (ii) an application for a section 139ZU order in relation to the transaction referred to in paragraph 128E(1)(a) and in relation to the member’s superannuation interest is withdrawn; the superannuation account-freezing notice is revoked. (7) Revocation of freezing notice if no section 139ZU order made after 180 days If subparagraph 128E(1)(b)(ii) applied in relation to a superannuation account-freezing notice given in relation to a member of an eligible superannuation plan, the superannuation account-freezing notice is revoked if: (a) 180 days pass after the notice comes into force; and (b) no section 139ZU order has been made in relation to the transaction referred to in paragraph 128E(1)(a) and in relation to the member’s superannuation interest. (8) Extension of 180-day period The Court may, on application by the Official Receiver, extend, or further extend, the 180-day period referred to in subsection (5), (6) or (7). (9) The Official Receiver may make an application under subsection (8): (a) if the Official Trustee is the trustee of the bankrupt’s estate — on the initiative of the Official Receiver; or (b) if a registered trustee is the trustee of the bankrupt’s estate — on application by the registered trustee.

[81,925G] Copy of superannuation account-freezing notice to be given to trustee etc 128G (1) If the Official Receiver gives or revokes a superannuation

account-freezing notice that relates to a member of an eligible superannuation plan: (a) the Official Receiver must give 2 copies of the superannuation account-freezing notice or the revocation notice, as the case may be, to the trustee of the bankrupt’s estate; and (b) the trustee must give one of those copies to the member. (2) A failure to comply with subsection (1) does not affect the validity of the superannuation account-freezing notice or the revocation notice, as the case may be.

[81,925H] Consent of Official Receiver to the cashing etc of a superannuation interest 128H (1) Scope This section applies if a superannuation account-freezing notice is in force in relation to a member’s superannuation interest. (2) Consent The member may apply in writing to the Official Receiver for the Official Receiver to consent to the cashing, debiting, roll-over, transfer or forfeiture, in whole or in part, of the member’s superannuation interest. (3) If an application is made under subsection (2), the Official Receiver may, by written notice given to the trustee of the eligible superannuation plan concerned, consent to the cashing, debiting, roll-over, transfer or forfeiture, in whole or in part, of the member’s superannuation interest. (4) A consent under subsection (3) may be: (a) unconditional; or (b) subject to such conditions (if any) as are specified in the notice of consent. (5) If the Official Receiver gives a consent under subsection (3) in relation to a member’s superannuation interest, the Official Receiver must give a copy of the consent to the member. [page 476] (6) Consultation Before giving a consent under subsection (3), the Official Receiver must consult the trustee of the bankrupt’s estate.

(7) Review of decisions Applications may be made to the Administrative Appeals Tribunal for review of a decision of the Official Receiver refusing to give a consent under subsection (3). (8) The trustee of the bankrupt’s estate may apply to the Administrative Appeals Tribunal for review of a decision of the Official Receiver giving a consent under subsection (3).

[81,925J] Power of Court to set aside superannuation account-freezing notice 128J (1) If the Court, on application by: (a) a person to whom a superannuation account-freezing notice has been given; or (b) the member whose superannuation interest is affected by a superannuation account-freezing notice; or (c) any other interested person; is satisfied that the Official Receiver did not have reasonable grounds to believe that: (d) the relevant transaction is void against the trustee of a bankrupt’s estate under section 128B or 128C; and (e) either: (i) the whole or a part of the relevant member’s superannuation interest is attributable to the transaction; or (ii) the trustee of the bankrupt’s estate has made an application for a section 139ZU order that relates to the transaction and the relevant member’s superannuation interest; the Court may make an order setting aside the notice. (2) A superannuation account-freezing notice that has been set aside is taken not to have been given.

[81,925K] Judicial enforcement of superannuation account-freezing notices 128K (1) If the Court is satisfied that the trustee of an eligible superannuation plan has breached, or is proposing to breach, a

superannuation account-freezing notice, the Court may, on application of the trustee of the relevant bankrupt’s estate, make any or all of the following orders: (a) an order directing the trustee of the plan to comply with that notice; (b) an order directing the trustee of the plan to pay to the trustee of the relevant bankrupt’s estate an amount not exceeding the money, or the value of the property, received as a result of the transaction referred to in paragraph 128E(1)(a); (c) any other order that the Court thinks appropriate. (2) The Court may discharge or vary an order granted under this section. (3) An order by the Court under paragraph (1)(b) 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. [page 477]

[81,925L] Protection of trustee of eligible superannuation plan 128L (1) No criminal or civil proceedings lie against the trustee of an eligible superannuation plan because of anything done (or not done) by the trustee in good faith: (a) in compliance with a superannuation account-freezing notice; or (b) in connection with, or incidental to, the trustee’s compliance with a superannuation account-freezing notice; or (c) in compliance with a section 139ZQ notice; or (d) in connection with, or incidental to, the trustee’s compliance with a section 139ZQ notice; or (e) in compliance with a section 139ZU order; or (f) in connection with, or incidental to, the trustee’s compliance with a section 139ZU order; or (g) in compliance with a subsection 139ZT(2) order; or (h) in connection with, or incidental to, the trustee’s compliance with a

subsection 139ZT(2) order; or (i) in compliance with a paragraph 128K(1)(b) order; or (j) in connection with, or incidental to, the trustee’s compliance with a paragraph 128K(1)(b) order. (2) Anything done (or not done) by the trustee of a regulated superannuation fund, or the trustee of an approved deposit fund, in good faith: (a) in compliance with a superannuation account-freezing notice; or (b) in connection with, or incidental to, the trustee’s compliance with a superannuation account-freezing notice; or (c) in compliance with a section 139ZQ notice; or (d) in connection with, or incidental to, the trustee’s compliance with a section 139ZQ notice; or (e) in compliance with a section 139ZU order; or (f) in connection with, or incidental to, the trustee’s compliance with a section 139ZU order; or (g) in compliance with a subsection 139ZT(2) order; or (h) in connection with, or incidental to, the trustee’s compliance with a subsection 139ZT(2) order; or (i) in compliance with a paragraph 128K(1)(b) order; or (j) in connection with, or incidental to, the trustee’s compliance with a paragraph 128K(1)(b) order; is taken not to be in breach of: (k) the Superannuation Industry (Supervision) Act 1993; or (l) any standards prescribed under that Act. (3) Anything done (or not done) by an RSA provider in good faith: (a) in compliance with a superannuation account-freezing notice; or (b) in connection with, or incidental to, the RSA provider’s compliance with a superannuation account-freezing notice; or (c) in compliance with a section 139ZQ notice; or (d) in connection with, or incidental to, the RSA provider’s compliance with a section 139ZQ notice; or (e) in compliance with a section 139ZU order; or

(f)

in connection with, or incidental to, the trustee’s compliance with a section 139ZU order; or (g) in compliance with a subsection 139ZT(2) order; or [page 478] (h) in connection with, or incidental to, the trustee’s compliance with a subsection 139ZT(2) order; or (i) in compliance with a paragraph 128K(1)(b) order; or (j) in connection with, or incidental to, the trustee’s compliance with a paragraph 128K(1)(b) order; is taken not to be in breach of: (k) the Retirement Savings Accounts Act 1997; or (l) any standards prescribed under that Act.

[81,925M] References to a member of an eligible superannuation plan 128M References in a provision of this Subdivision to: (a) a member of an eligible superannuation plan; and (b) a bankrupt; do not imply that the bankrupt may not be the member.

[81,925N] Definitions 128N In this Subdivision: approved deposit fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993. cashed, in relation to a superannuation interest, includes applied towards the provision of a pension. contribution, in relation to an RSA, has the same meaning as in the Retirement Savings Accounts Act 1997. costs:

in relation to a regulated superannuation fund, an approved (a) deposit fund or an RSA — includes: (i) transaction costs; and (ii) government charges; and (iii) taxes and duties; and (iv) charges relating to the management or investment of fund assets or RSA assets, as the case may be; or (b) in any other case — includes anything that, under the regulations, is taken to be costs for the purposes of this paragraph. eligible superannuation plan means any of the following: (a) a regulated superannuation fund; (b) an approved deposit fund; (c) an RSA; (d) a public sector superannuation scheme. family law payment split means a payment split under Part VIIIB of the Family Law Act 1975. member: (a) in relation to a regulated superannuation fund — means a member of the fund; or (b) in relation to an approved deposit fund — means a depositor in the fund; or (c) in relation to an RSA — means the RSA holder; or [page 479] (d) in relation to a public sector superannuation scheme — has the meaning given by the regulations. pension includes: (a) a benefit provided by a fund, if the benefit is taken, under regulations made for the purposes of the definition of pension in subsection 10(1) of the Superannuation Industry (Supervision) Act 1993, to be a pension for the purposes of

that Act; and (b) a benefit provided by a public sector superannuation scheme, if the benefit is taken, under the regulations, to be a pension for the purposes of this definition. public sector superannuation scheme has the same meaning as in the Superannuation Industry (Supervision) Act 1993, but does not include a regulated superannuation fund. regulated superannuation fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993. RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997. scheme means: (a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and (b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise. superannuation account-freezing notice means a notice under section 128E. superannuation interest means an interest in an eligible superannuation plan, but does not include a reversionary interest. trustee, in relation to an eligible superannuation plan, means: (a) if the plan is a fund that has a trustee (within the ordinary meaning of that word) — the trustee of the plan; or (b) if the plan is an RSA — the RSA provider; or (c) if: (i) none of the preceding paragraphs apply; and (ii) a person is identified in accordance with the regulations as the trustee of the plan for the purposes of this definition; the person identified in accordance with the regulations; or (d) in any other case — the person who manages the plan. If a person who is not the trustee of an eligible superannuation

plan nevertheless has the power to make payments to members of the plan, then references in this Subdivision to the trustee of the plan include references to that person. withdrawal benefit: (a) in relation to a regulated superannuation fund or an approved deposit fund — has the same meaning as in the Superannuation Industry (Supervision) Regulations 1994; or (b) in relation to an RSA — has the same meaning as in the Retirement Savings Accounts Regulations 1997; or (c) in relation to a public sector superannuation scheme — has the meaning given by the regulations. [page 480]

DIVISION 4 — REALIZATION OF PROPERTY

[81,975] Trustee to take possession of property of bankrupt 129 (1) The trustee shall forthwith take possession of all the property of the bankrupt capable of manual delivery, including all deeds, books and documents of the bankrupt. (2) The Court may, on the application of the trustee, enforce possession accordingly. (3) A person is not entitled, as against the trustee, to withhold possession of the books of account or any papers or documents of the bankrupt relating to the accounts or to any of the examinable affairs of the bankrupt or to claim any lien on any such papers or documents. [subs (3) am Act 119 of 1987 s 46]

(4) If a person has in his or her possession or power any moneys or security that he or she is not by law entitled to retain as against the bankrupt or the trustee, he or she shall pay or deliver the moneys or security to the trustee. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(4A) Where: (a) moneys are payable to a person under a law of the Commonwealth or of a State or Territory of the Commonwealth; (b) that person is a bankrupt or the moneys are payable to the person as the legal personal representative of a person who was at the time of his or her death a bankrupt; and (c) the moneys constitute property divisible amongst the creditors of the bankrupt or the deceased bankrupt, as the case may be; those moneys shall, upon demand by the trustee, be paid to the trustee notwithstanding any provision to the contrary in that law. [subs (4A) insrt Act 12 of 1980 s 62; am Act 44 of 1996 s 3 and Sch 2]

(4B) A demand under subsection (4A) shall be in accordance with the approved form. [subs (4B) insrt Act 12 of 1980 s 62; am Act 44 of 1996 s 3 and Sch 1]

(4C) A payment made in pursuance of a demand under subsection (4A) is, to the extent of the amount paid, a valid discharge to the person making the payment as against the bankrupt or the estate of the deceased bankrupt, as the case may be. [subs (4C) insrt Act 12 of 1980 s 62]

(5) A person who does not pay or deliver to the trustee any moneys or security that he or she is required by subsection (4) or (4A) so to pay or deliver is guilty of contempt of court. [subs (5) am Act 12 of 1980 s 62; Act 44 of 1996 s 3 and Sch 2]

(6) If the person so failing to pay or deliver any moneys or security is a corporation, both the corporation and each officer of the corporation who is responsible for the non-compliance are guilty of contempt of court. SECTION 129 GENERALLY [81,975.5] Effect of discharge from bankruptcy on rights and obligations of discharged bankrupt and Official Trustee Where a bankrupt has refused to yield up property, the trustee’s power to take possession of that property remains even after the discharge: Re Balhorn; Ex parte Balhorn and Official Trustee in Bankruptcy (1981) 39 ALR 223. By virtue of s 77, the bankrupt has a duty to assist in the discovery and realisation of property. The effect of the insertion of s 129(4A) was to overcome the decision in Re Buckle (1969) 15 FLR 460.

____________________

[page 481]

[81,976] Time limit for realising property *129AA (1) This section applies only to: (a) property (other than cash) that was disclosed in the bankrupt’s statement of affairs; and (b) after-acquired property (other than cash) that the bankrupt discloses in writing to the trustee within 14 days after the bankrupt becomes aware that the property devolved on, or was acquired by, the bankrupt. In this subsection, cash includes amounts standing to the credit of a bank account or similar account. (2) If any such property is still vested in the trustee immediately before the revesting time, then it becomes vested in the bankrupt at the revesting time by force of this section. (3) Initially, the revesting time for property is: (a) for property disclosed in the statement of affairs — the beginning of the day that is the sixth anniversary of the day on which the bankrupt is discharged from the bankruptcy; and (b) for after-acquired property that is disclosed before the bankrupt is discharged from the bankruptcy — the beginning of the day that is the sixth anniversary of the day on which the bankrupt is discharged; and (c) for after-acquired property that is disclosed after the bankrupt is discharged from the bankruptcy — the beginning of the day that is the sixth anniversary of the day on which the bankrupt disclosed the property to the trustee. (4) If the trustee, before the current revesting time, gives the bankrupt a written notice (an extension notice) stating that a later revesting time applies to particular property, then that later time becomes the revesting time for that property. (5) There is no limit on the number of extension notices that the trustee may give (either generally or in relation to particular property). (6) The time specified in an extension notice must be either:

(a) a specified time that is not more than 3 years after the current revesting time; or (b) a time that is reckoned by reference to a specified event (for example, the death of a life tenant), but is not more than 3 years after the happening of that event. (7) Any property that becomes vested in the bankrupt under this section thereupon ceases to be subject to section 127. [s 129AA insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[81,978] Eligible judges 129A (1) A judge of the Court may, by writing, consent to be declared by the Minister under subsection (2). (2) The Minister may, by writing, declare a judge of the Court whose consent is in force under subsection (1) to be an eligible judge for the purposes of this Act. (3) An eligible judge has, in relation to the power to issue a warrant under section 130, the same protection and immunity as a Justice of the High Court has in relation to proceedings in the High Court. [s 129A insrt Act 115 of 1990 s 18] *Editor’s note: Section 129AA “applies to all bankruptcies, including those that ended before the commencing time. However, for a bankruptcy that ended before the commencing time, the initial revesting time is the beginning of the day that is the sixth anniversary of the commencing day (instead of the sixth anniversary of the day on which the bankrupt was discharged)”: Sch 1 Pt 2 cl 219 of Act 131 of 2002.

[page 482]

[81,980] Warrant for seizure of property connected with the bankrupt 130 (1) The trustee of a bankrupt’s estate may apply to an eligible judge for the issue of a warrant under subsection (2) if the trustee has reasonable grounds for suspecting that there is on or in any premises property (in this section called relevant property), being:

(a) any of the property of the bankrupt; (b) property that may be connected with, or related to, the bankrupt’s examinable affairs; or (c) books (including books of an associated entity of the bankrupt) relevant to any of the bankrupt’s examinable affairs. [subs (1) am Act 115 of 1990 s 19]

(2) On an application under subsection (1), the judge may issue a warrant authorising a constable, together with any other person named in the warrant: (a) to enter on or into the premises, using such force as is necessary for the purpose and is reasonable in the circumstances; (b) to search the premises for relevant property; (c) to break open, and search for relevant property, any cupboard, drawer, chest, trunk, box, package or other receptacle, whether a fixture or not, on or in the premises; (d) to take possession of, or secure against interference, any relevant property found on or in the premises; and (e) to deliver to the trustee, or to a person authorised in writing by the trustee for the purpose, any property of which possession is taken under the warrant. [subs (2) am Act 115 of 1990 s 19]

(3) An eligible judge shall not issue a warrant under subsection (2) unless: (a) an affidavit has been furnished to the judge setting out the grounds on which the issue of the warrant is sought; (b) the applicant for the warrant (or some other person) has given to the judge, either orally or by affidavit, such further information (if any) as the judge requires concerning the grounds on which the issue of the warrant is sought; and (c) the judge is satisfied that there are reasonable grounds for issuing the warrant. [subs (3) am Act 115 of 1990 s 19]

(4) Where an eligible judge issues a warrant under subsection (2), he or she shall set out on the affidavit furnished in accordance with subsection (3): (a) on which of the grounds specified in the affidavit; and (b) on which other grounds (if any); he or she has relied to justify the issue of the warrant.

[subs (4) am Act 115 of 1990 s 19]

(5) A warrant under this section shall: (a) state whether entry is authorised to be made at any time of the day or night or during specified hours of the day or night; and (b) specify a day, not later than 7 days after the day of issue of the warrant, on which the warrant ceases to have effect. (6) Where, under this section, a person takes possession of property, or secures property against interference, a person is not entitled, as against the trustee, to claim a lien on the property, but such a lien is not otherwise prejudiced. (7) Where, under this section, a person takes possession of books, or secures books against interference, that person or any other person to whom the books are delivered under paragraph (2)(e): (a) may make copies of, or take extracts from, the books; [page 483] (b) may require a person who was a party to the compilation of the books to explain to the best of the person’s knowledge and belief any matter about the compilation of the books or to which the books relate; (c) may retain possession of the books for such period as is necessary to enable the books to be inspected, and copies of, or extracts from, the books to be made or taken, by or on behalf of the trustee; and (d) during that period shall permit a person who would be entitled to inspect any one or more of those books if they were not in the possession of the first-mentioned person or the other person to inspect at all reasonable times such of those books as that person would be so entitled to inspect. (8) The powers conferred by this section are in addition to, and not in derogation of, any other powers conferred by law. [s 130 subst Act 119 of 1987 s 47] SECTION 130 GENERALLY [81,980.5] Search warrants Section 130 sets out the requirements concerning the issue of a search

warrant in some detail, and the principles have been set out in the judgment of Ryan J in Trollope v Rambaldi [2009] FCA 74; BC200900493. The applicant sought orders under ss 178 and 179 of the Bankruptcy Act arising from the execution of a search warrant. There was an allegation that certain privileged material was among the material seized. The application sought to make an inquiry into the conduct of the trustee. In dismissing the application, the learned judge set out the following principles: [32] In Moore v Macks [2007] FCA 10, Besanko J considered that s 179 of the Act may involve the Court in an investigation in two stages. His Honour went on to observe, at [30]; … First, the court must consider whether there is a basis to inquire into the conduct of a trustee in bankruptcy. Secondly, if an inquiry is undertaken, the court must consider what, if any, order should be made as a result of the inquiry. I note the following salient points with respect to the operation of the section in the case of the first stage. It is not necessary for me to consider the second stage because I do not think that there is a basis to inquire into the conduct of the trustee in bankruptcy. 1. The question of whether to order an inquiry is in the broad discretion of the court, and the court should be reluctant to do so unless there are “substantial grounds for believing that the trustee erred in his administration” (Re Gault, Gault v Law (1981) 57 FLR 165 (“Re Gault”) at 173 per Ellicott J, cited in Macchia at 120 per French J). This requirement has also been put in terms of “sufficient grounds” (Re Gault at 173 per Ellicott J), and “a proper cause to believe that a trustee may have failed to act in relation to a bankruptcy in the manner required by the Act or the general law” (Wilson v Commonwealth of Australia [1999] FCA 219 at [44] per Branson J). The onus is on the applicant to establish the grounds or case for an inquiry. 2. As with s 178, the exercise of the court’s discretion to order an inquiry is subject to the principle that the court will not unduly interfere with the day-to-day administration of a bankrupt’s estate by a trustee in bankruptcy: Re Tyndall at 120 per French J.’ … [34] The application for an inquiry in the present case has been made on the application of the Bankrupt and has focused entirely on the execution of the search warrant at the premises of TS&B and the treatment by agents of the Trustee of the documents obtained as a result of the execution of that warrant. The Trustee was not personally present during the execution of the warrant and I am not satisfied, on the evidence, that anything was done during it with his authority which would warrant his removal as Trustee of the estate of the Bankrupt or the making of any other order in respect of the Trustee’s conduct in relation to the bankruptcy. [page 484] His Honour went on to decline injunctive relief applying these principles: [37] The applicants have not pointed to any privileged document which has actually been read by any of the second to sixth respondents. It follows that the Court is unable to identify any detriment which has been occasioned to the applicants in the conduct of their defence to the Portsea litigation. In my view, a similar approach should be taken to an application to prevent a trustee in bankruptcy, or a trustee’s staff, from continuing to prosecute a particular legal action as courts have traditionally taken in deciding whether to restrain a legal practitioner from acting in litigation where that legal practitioner has obtained an advantage which could operate unfairly on another party to the litigation. The relevant authorities include GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123, H. Starke & Sons Pty Ltd v Von Stanke, O’Meara (2006) 95 SASR 425, Xat

Ky v Australvic Property Management Pty Ltd [2007] FCA 1541 and Geelong School Supplies Ltd v Dean (2006) 237 ALR 612. Those authorities indicate that the discretion to grant an injunction is to be exercised sparingly and where, as it would be perceived by a fair-minded reasonable observer, the risk to the proper administration of justice would outweigh the denial to the opposing litigant of his or her choice of legal representative and the cost and inconvenience of being compelled to change counsel or solicitors. See also Bureau Interprofessional Des Vins De Bourgogne v Red Earth Nominees Pty Ltd [2002] FCA 588, where I reviewed some of the cognate authorities on an application to restrain a firm of solicitors from continuing to act in proceedings because a solicitor employed by that firm had obtained information confidential to another party in the litigation as a result of having, whilst a partner in another firm, advised that party. I there assessed, at [60], whether there was a real risk of relevant confidential information coming into the hands of the firm by which the solicitor was then employed. In the light of that assessment, the injunction was refused. [38] The applicants’ failure to demonstrate that any of the Trustee’s staff or agents actually read and absorbed the contents of any privileged document militates strongly against the Court’s precluding the Trustee or any of the nominated members of his staff or his agents from participating further in the Portsea litigation. [81,980.10] Administrative law considerations The plaintiff in Trollope v Middleton (2008) 169 FCR 507; 104 ALD 373; 249 ALR 578; [2008] FCA 564; BC200805153 sought to object to the paucity of reasons concerning the issue of a search warrant. The application sought to review the decision (see [81,980.5]) pursuant to s 130. A decision-maker is obliged to provide a statement of reasons pursuant to s 13 of the ADJR Act on the grounds that the decision to issue a warrant might result in the institution of civil proceedings. Tracey J dismissed the proceedings mainly through following Ricegrowers Cooperative Mills Ltd v Bannerman (1981) 38 ALR 535; 56 FLR 443; 4 ALN No 52; (1981) ATPR 40-262 and by following Murphy v K R M Holdings Pty Ltd (1985) 8 FCR 349; 63 ALR 397; 9 ALN N55. Tracey J commented on the background and reasons for the application (as well as making a number of procedural observations): [22] The introduction of the requirement that administrative decision-makers provide reasons for their decisions (or do so on request from persons affected by those decisions) was a fundamental development in Australia’s system of administrative law. In his 1989 Blackburn Lecture, the then Chief Justice of the High Court, Sir Anthony Mason, said that the creation of the obligation to provide a statement of reasons for decisions ‘was a dramatic advance in arming the individual with effective remedies in the overall scheme to ensure administrative justice’ and that ‘reasoned and principled administrative decisions are an indispensable element in a modern democracy.’ The provision of reasons serves a number of useful functions: see Osmond v Public Service Board of New South Wales [1984] 3 NSWLR 447 at 463 (per Kirby P); Comcare Australia v Lees (1997) 151 ALR 647 at 656 (per Finkelstein J). Relevantly, the provision of reasons enables the parties, and, particularly, unsuccessful parties, to understand why the decision was made and to make an informed judgment as to whether to seek redress or to accept the decision. To this end ‘[i]t is necessary that the statement be sufficiently explicit to enable the recipient to determine whether “the making of the decision was an improper exercise of the power conferred by the enactment”, “the decision involved an error of law”, the decision-maker took into account an [page 485]

irrelevant consideration or failed to take into account a relevant consideration and like matters referred to in ss 5 and 6 of the [ADJR] Act’: Hatfield v Health Insurance Commission (1987) 15 FCR 487 at 490. In a frequently quoted passage from his judgment in Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 at 507, Woodward J explained the obligation, imposed on decision-makers by s 13 of the ADJR Act, as follows: The passages from judgments which are conveniently brought together in Re Palmer and Minister for the Capital Territory (1978) 23 ALR 176 at 206–207; 1 ALD 183 at 193–4, serve to confirm my view that s 13(1) of the Judicial Review Act requires the decision-maker to explain his decision in a way which will enable a person aggrieved to say, in effect: “Even though I may not agree with it, I now understand why the decision went against me. I am now in a position to decide whether that decision has involved an unwarranted finding of fact, or an error of law, which is worth challenging.” This requires that the decision-maker should set out his understanding of the relevant law, any findings of fact on which his conclusions depend (especially if those facts have been in dispute), and the reasoning processes which led him to those conclusions. He should do so in clear and unambiguous language, not in vague generalities or the formal language of legislation. These paragraphs set out the principle that the plaintiff sought to invoke. The learned judge, after considering the authorities, reached the following conclusion: [38] I do not consider that I am bound to apply Murphy. It appears that the Court in Murphy was not referred to Ricegrowers. In my view there is no relevant distinction to be drawn between a decision to issue a notice, under s 155 of the Trade Practices Act which requires the production of documents and a decision to issue a warrant under s 130 of the Bankruptcy Act which authorises the seizure of property (including documents). Both are decisions taken in order to facilitate an investigative process which has the potential to lead to the commencement of civil proceedings but which may not, necessarily, have that outcome. The same may be said of decisions to seize property, made under the Customs Act. These carefully reasoned conclusions will be considered whenever this section is construed.

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[81,985] Income of bankrupt 131 [s 131 rep Act 9 of 1992 s 24] SECTION 131 GENERALLY [81,985.10] The repeal of s 131 does not mean that the income of the bankrupt vests in the trustee. Rather, Div 4B of Pt VI operates as a code in respect of what income of the bankrupt must be contributed for the benefit of creditors. It follows that the bankrupt is entitled to keep his or her income save to the extent that contribution is required: Re Gillies; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571; 115 ALR 631.

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[81,990] Vesting and transfer of property 132 (1) Subject to this section, and to section 158, where a trustee is appointed by the creditors, the property of the bankrupt passes to and vests in the trustee so appointed on the day on which the appointment takes effect. [subs (1) am Act 74 of 1981 s 133]

(2) Subject to this section, the property of the bankrupt passes from trustee to trustee [page 486] and vests in the trustee for the time being during his or her continuance in office or, if the Official Trustee becomes the trustee, in the Official Trustee, without any conveyance, assignment or transfer. [subs (2) am Act 21 of 1985 s 26; Act 44 of 1996 s 3 and Sch 2]

(3) 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 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 vest in the trustee at law until the requirements of that law have been complied with. (4) [subs (4) rep Act 12 of 1980 s 64] SECTION 132 GENERALLY [81,990.5] Vesting in trustee — registration The effect of subs (2) and (3) is to vest the property in the trustee regardless of failure to register such interest pursuant to relevant legislation although for the legal interest in land under the Torrens system to vest in the trustee it is necessary to lodge a transmission application: Whitbread v Whitbread (1967) 10 FLR 120. See also EM Heenan J in Rams Mortgage Corporation Ltd v Skipworth (No 2) [2007] WASC 75; BC200702143 at [13] and see also [81.995.17].

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[81,995] Disclaimer of onerous property 133 (1AA) Where any part of the property of the bankrupt consists of: (a) land of any tenure burdened with onerous covenants; or

property (including land) that is unsaleable or is not readily saleable; subsection (1) applies. (b)

[subs (1AA) insrt Act 119 of 1987 s 48]

(1AB) Where: (a) any part of the property of the bankrupt consists of property, being neither land nor an interest in land; and (b) it may reasonably be expected that the costs, charges and expenses that the trustee would incur in realising the property would exceed the proceeds of realising the property; subsection (1) applies. [subs (1AB) insrt Act 119 of 1987 s 48]

(1) Subject to this section, the trustee may, notwithstanding that he or she has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation to it and notwithstanding, in the case of property the transfer of which is required by a law of the Commonwealth or of a State or Territory of the Commonwealth to be registered, that he or she has not become the registered owner of that property, by writing signed by him or her, at any time disclaim the property. [subs (1) am Act 119 of 1987 s 48; Act 44 of 1996 s 3 and Sch 2]

(1A) Subject to this section, the trustee may at any time, by writing signed by him or her, disclaim any contract that forms part of the property of the bankrupt whether or not the trustee has endeavoured to assign the property or exercised any rights in relation to it. [subs (1A) insrt Act 12 of 1980 s 65; am Act 44 of 1996 s 3 and Sch 2]

(2) A disclaimer under subsection (1) or (1A) operates to determine forthwith the rights, interests and liabilities of the bankrupt and his or her property in or in respect of the property disclaimed, and discharges the trustee from all personal liability in respect of [page 487] the property disclaimed as from the date when the property vested in him or her, but does not, except so far as is necessary for the purpose of releasing the bankrupt and his or her property and the trustee from liability, affect the

rights or liabilities of any other person. [subs (2) am Act 12 of 1980 s 65; Act 44 of 1996 s 3 and Schs 1, 2]

(3) If a trustee disclaims property whose transfer must be registered under a law of the Commonwealth or of a State or Territory of the Commonwealth, the trustee must give notice of the disclaimer as soon as practicable to the officer who has the function of registering the transfer. [subs (3) subst Act 44 of 1996 s 3 and Sch 1]

(4) A trustee is not entitled to disclaim a lease without the leave of the Court unless: (a) the trustee has given to the lessor and, if the bankrupt has sub-let the whole or any part of the leased property or has mortgaged the lease, to each sub-lessee or mortgagee, 28 days’ written notice of his or her intention to disclaim the lease; and (b) no person to whom the trustee has given such a notice has, within 28 days after it was given to the person, by written notice given to the trustee, required the trustee to apply to the Court for leave to disclaim the lease. [subs (4) subst Act 12 of 1980 s 65; am Act 44 of 1996 s 3 and Schs 1, 2]

(4A) [subs (4A) rep Act 44 of 1996 s 3 and Sch 1] (4B) [subs (4B) rep Act 44 of 1996 s 3 and Sch 1] (5) The Court may, in relation to an application for leave to disclaim a lease under this section: (a) impose such terms as a condition of granting the leave; and (b) make such orders with respect to fixtures, improvements and other matters arising out of the lease; as the Court considers just and equitable. (5A) A trustee is not entitled to disclaim a contract (other than an unprofitable contract) without the leave of the Court. [subs (5A) insrt Act 12 of 1980 s 65]

(5B) The Court may, in relation to an application for leave to disclaim a contract under this section: (a) impose such terms as a condition of granting the leave; and (b) make such orders with respect to matters arising out of the contract; as the Court considers just and equitable. [subs (5B) insrt Act 12 of 1980 s 65]

(6) Where: (a) an application in writing has been made to the trustee by a person interested in property requiring him or her to decide whether he or she will disclaim the property or not; and (b) the trustee has, for a period of 28 days after the receipt of the application, or such extended period as is allowed by the Court, declined or neglected to disclaim the property; the trustee is not entitled to disclaim the property under this section and, in the case of a contract, he or she shall be deemed to have adopted it. [subs (6) am Act 44 of 1996 s 3 and Sch 2]

(6A) [subs (6A) rep Act 44 of 1996 s 3 and Sch 1] (6B) [subs (6B) rep Act 44 of 1996 s 3 and Sch 1] (7) The Court may, on the application of a person who is, as against the trustee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order [page 488] rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as the Court considers just and equitable. (8) Damages so payable may be proved as a debt in the bankruptcy. (9) The Court may, on application by a person either claiming an interest in, or being under a liability not discharged by this Act in respect of, disclaimed property, and after hearing such persons as it thinks fit, make an order, on such terms as the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person entitled to it or a person in whom, or to whom, it seems to the Court to be just and equitable that it should be vested or delivered, or a trustee for that person. (10) Subject to subsection (11), where an order vesting property in a person is made under subsection (9), the property to which it relates vests forthwith in the person named in the order for that purpose without any conveyance, transfer or assignment. (11) Where:

(a) the property to which such an order relates is property the transfer of which is required by a law of the Commonwealth or of a State or Territory of the Commonwealth to be registered; and (b) that law enables the registration of such an order; the property, notwithstanding that it vests in equity in the person named in the order, does not vest in that person at law until the requirements of that law have been complied with. (12) A person aggrieved by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the extent of any loss he or she has suffered by reason of the disclaimer and may prove the loss as a debt in the bankruptcy. [subs (12) am Act 44 of 1996 s 3 and Sch 2]

(13) In this section: mortgage includes charge. mortgagee includes the person entitled to the benefit of a charge. SECTION 133 GENERALLY [81,995.10] “onerous covenants” It has been held that rates and taxes payable on land amount to onerous covenants (Re Wright; Ex parte Wiltshire (1941) 13 ABC 26) although see also Re Lister; Ex parte Bradford Corporation [1926] Ch 149 CA. [81,995.15] Equitable rights of purchaser As the trustee takes the property subject to all equities (see notes to s 116) it would seem not possible for him or her to disclaim a contract for sale of land entered into by the bankrupt on the basis that it was onerous as to do so would be to ignore the equitable interest of the purchaser. The reason for this view is that it has been held that a mortgagee of Torrens title land is a person “claiming an interest in” disclaimed property within the meaning of s 133(9): see Re Hopgood; Ex parte Coveney (1957) 18 ABC 133 at 139–41; Re Tulloch at 814; NAB v Leroy at [7]. In National Australia Bank Ltd v New South Wales (2009) 182 FCR 52; 260 ALR 115; [2009] FCA 1066; BC200908663 Rares J made the following statement at [29]: “[b]y force of s 133(2) the effect of the trustee’s disclaimer … appears to have determined any ongoing charge on the land for subsequent liabilities that would otherwise have continued to accrue, such as future (unpaid) interest on the debt secured by the mortgage.” See also National Australia Bank Ltd v New South Wales [2014] FCA 298; BC201402872. In National Australia Bank Ltd v Leroy [2003] FCA 862; BC200304625 at [7]. It was decided that the plaintiff bank would be entitled to a vesting order if it is shown: (a) that a disclaimer to relevant property has occurred within the meaning of s 133; [page 489] (b) that the applicant has an interest in the disclaimed property within the meaning of s 133(9);

and (c) that the applicant is entitled to the disclaimed property or that the Court considers it to be just and equitable that it should be so vested or delivered. (c) that the applicant is entitled to the disclaimed property or that the Court considers it to be just and equitable that it should be so vested or delivered. [81,995.20] Vesting of disclaimed property in entitled person — s 133(9) The applicant for such an order must establish that it is just as equitable that such an order be made. In Re Lasscock; Ex parte Lasscock (1961) 18 ABC 263 the section was invoked in aid of a wife who had continued to maintain mortgage payments under a formerly jointly owned property for which she was not liable. In McVey v NSW [2012] FCA 455; BC201202687, in which there were consents filed by parties contingently interested in the property, the fact that the wife who made the application was liable under the mortgage was held to strengthen her case: see at [10]. [81,995.25] Subsection (9): Vesting order The subsection enables the court to make a vesting order on an application of a person claiming an interest on such terms as the court thinks just and equitable. In National Australia Bank Ltd v NSW [2014] FCA 298; BC201402872 Perram J made some observations on the effect of the subsection when making the order. At [8] he said: … the apparent tension in the text of s 133 between the determination forthwith of the rights, interests and liabilities of the bankrupt, on the one hand, and the continued existence of the rights or liabilities of other persons, on the other. In a purely theoretical space there is a tension between extinguishing a set of rights which is attached to another set of rights which are not extinguished. The courts, however, have not been troubled by this anomaly. In a series of decisions it has been held that the rights of other persons, and in particular, the rights of mortgagees continue to have sufficient existence to ground an application such as the present one made by the Bank: see, for example, Re Tulloch Ltd (in liq) (1978) 3 ACLR 808 at 813, per Needham J. That reasoning is regarded as orthodox: see National Australia Bank Ltd v Leroy [2003] FCA 862; BC200304625 at [5]–[7]; Rams Mortgage Corporation Ltd v Skipworth (No 2) (2007) 239 ALR 799; 210 FLR 11; [2007] WASC 75; BC200702143 at [15]–[19]; National Australia Bank Ltd v New South Wales (2009) 182 FCR 52; 260 ALR 115; [2009] FCA 1066; BC200908663 at [29]; and National Australia Bank Ltd v Victoria (2010) 118 ALD 527; [2010] FCA 1230; BC201008553 at [10]– [12]. His Honour that a mortgagee of Torrens Tile land is a person “claiming an interest in” disclaimed property within the meaning of the subsection (at [10]). In National Australia Bank Ltd v New South Wales (2009) 182 FCR 52; 260 ALR 115; [2009] FCA 1066; BC200908663 at [29] Rares J stated: [b]y force of s 133(2) the effect of the trustee’s disclaimer … appears to have determined any ongoing charge on the land for subsequent liabilities that would otherwise have continued to accrue, such as future (unpaid) interest on the debt secured by the mortgage. I agree with Needham J’s conclusion that a mortgagee of Torrens title land is entitled to be granted a vesting order: Re Tulloch 3 ACLR at 814. I am of opinion that the land should be vested under s 133(9) in the bank for the purpose for which it originally was mortgaged, namely to secure payment to the bank of all principal, interest and other moneys due to it notwithstanding the effect of the disclaimer.

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[82,000] Powers exercisable at discretion of trustee 134 (1) Subject to this Act, the trustee may do all or any of the following

things: (a) sell all or any part of the property of the bankrupt; (aa) accept, without terms or conditions, or subject to terms and conditions, a sum of money payable at a future time as the consideration or part of the consideration for the sale of any property of the bankrupt; (ab) lease any property of the bankrupt; [page 490] (ac) divide among the creditors, in its existing form and according to its estimated value, property that, by reason of its peculiar nature or other special circumstances, cannot readily or advantageously be sold; (b) carry on a business of the bankrupt so far as may be necessary to dispose of it or wind it up for the benefit of creditors; (c) postpone the winding-up of the estate; (d) prove in respect of any debt due to the bankrupt; (da) mortgage or charge any of the property of the bankrupt for the purpose of raising money for the payment of the debts provable in the bankruptcy; (e) compromise any debt claimed to be due to the bankrupt or any claim by the bankrupt; (f) make a compromise with a creditor or a person claiming to be a creditor in respect of a debt provable, or claimed to be provable, in the bankruptcy; (g) make a compromise in respect of any claim arising out of the administration of the estate of the bankrupt, whether the claim is made by or against the trustee; (h) deal with property to which the bankrupt is beneficially entitled as tenant in tail in the same manner as the bankrupt could deal with it if he or she were not a bankrupt; (i) obtain such advice or assistance as he or she considers desirable relating to the administration of the estate or to the conduct or

affairs of the bankrupt; (ia) refer any dispute to arbitration; (j) bring, institute or defend any action or other legal proceeding relating to the administration of the estate; (k) execute powers of attorney, deeds or other instruments for the purpose of carrying the provisions of this Act into effect; and (m) employ the bankrupt: (i) to superintend the management of the whole, or a part, of the property of the bankrupt; (ii) to carry on the bankrupt’s trade or business for the benefit of the bankrupt’s creditors; or (iii) to assist in any other way in administering the property of the bankrupt; and, in consideration of the bankrupt’s services, make such allowance to the bankrupt out of the estate as the trustee considers reasonable; (ma) make such allowance out of the estate as he or she thinks just to the bankrupt, the spouse or de facto partner of the bankrupt or the family of the bankrupt; Note: See also subsection 5(6).

(n) superintend the management of the whole, or a part, of the property of the bankrupt; (o) administer the property of the bankrupt in any other way. [subs (1) am Act 12 of 1980 s 66; Act 119 of 1987 s 49; Act 44 of 1996 s 3 and Schs 1, 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 144 of 2008 s 3 and Sch 2[29] and [30], opn 10 Dec 2008]

(1A) An allowance made to the bankrupt in pursuance of paragraph (1)(m) may be reduced by the Court upon the application of an interested person. [subs (1A) insrt Act 12 of 1980 s 66]

(2) [subs (2) rep Act 44 of 1996 s 3 and Sch 1] (2A) [subs (2A) rep Act 44 of 1996 s 3 and Sch 1] (3) Subject to this Act, the trustee may use his or her own discretion in the administration of the estate. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

[page 491] (4) The trustee may at any time apply to the Court for directions in respect of a matter arising in connexion with the administration of the estate. Note: Section 178 allows an application to be made to the Court by the bankrupt, a creditor or any other person who is affected by an act, omission or decision of the trustee. [subs (4) am Act 44 of 1996 s 3 and Sch 1] SECTION 134 GENERALLY [82,000.10] General duties of trustees Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100. See [80,450.5]. Note that s 134(4) confers on the trustee the right to seek, and confers on the court the power to give, directions. [82,000.15] Duty on sale A trustee has duties similar to a mortgagee exercising a power of sale: Commercial & General Acceptance Ltd v Nixon (1981) 38 ALR 225. [82,000.20] Fiduciary relationship A trustee being a fiduciary cannot purchase property of the estate without full disclosure: Kitson v Hardwick (1872) LR 7 CP 473. [82,000.25] Power to carry on business The power to carry on business is as far as may be necessary for the beneficial disposal or winding up of the business: Re Kleiss; Ex parte McDonough (1968) 15 FLR 281; although see Re Lane (1982) 45 ALR 565; 66 FLR 159. [82,000.30] Trustee’s discretion For the court to interfere with the exercise of the trustee’s discretion it must be sure that the trustee’s decision was totally unreasonable: Re Mineral Securities Australia Ltd [1973] 2 NSWLR 207. An unsuccessful attempt to overcome this discretion was McKerracher J’s decision in Re Verge (Trustee); Underdown (dec’d) (a bankrupt) v Fazio [2013] FCA 18; BC201300074. Mrs Underdown who was then the sole registered proprietor of the property, had executed a transfer to the appellant granting him a joint interest in the property by way of a gift. The appellant had lodged the transfer for registration on 17 October 2007. Following Mrs Underdown’s death on 1 July 2007, the appellant had, on 2 July 2007, executed a survivorship application in favour of himself which he also lodged for registration on 17 October 2007. McKerracher J concluded that at the date of her death Mrs Underdown was bankrupt and as the transfer was for no consideration and occurred within five years of the commencement of the administration of her estate, it was void as against the trustees — see [18]–[19]. McKerracher J ordered, in substance, that the appellant provide vacant possession of the property, the trustees have conduct of its sale and that the proceeds of sale be paid to the trustees see [18], [23]. His Honour noted the respondent’s interest in the property by way of its mortgage and gave the respondent liberty to apply. This decision was discussed in the Court of Appeal of WA in Fazio v Westpac Banking Corp [2014] WASCA 80. [82,000.35] Application to court for directions — s 134(4) There is no general rule that a court is obliged to give directions when a trustee seeks them: Re Driller & Nebenson [1972–73] ALR 735; (1972) 21 FLR 159. There is an issue as to whether the court can make a binding determination of substantive rights under this subsection: Sutherland (Re Scutts) [1999] FCA 147; BC9900480. In Re Scott [2006] FCA 718; BC200604489, Mansfield J made such a determination. See [81,650.77]. In Grampians Carpet Cleaning Pty Ltd v McLelland [2010] FMCA 229; BC201002073, this section

has been employed to resolve questions of the misnomer of a party. On that question the court considered a number of authorities where alteration of the name of a party was refused on the ground that no confusion had resulted: Alexander Korda Film Productions Ltd v Columbia Pictures Corporation Ltd [1946] Ch 336; [1946] 2 All ER 424; (1946) 175 LT 430, and Schepis v Esanda Finance Corp Ltd [2006] FMCA 905; BC200605101, and a number of such cases where an order was allowed: Elders Ltd v Lloyd [2005] FMCA 1020; BC200505285, Van Reesema; Ex parte Giameos (1979) 27 ALR 509, Re McSwiney; Ex parte Davis [1986] FCA 405, Scottish Pacific Business Finance Pty Ltd [2005] FCA 670; BC200503515, Re Keith Laurence Draper; and Ex [page 492] parte Australian Society of Accountants [1989] FCA 10. The court concluded that the words of Denning LJ in Pearlman (Veneers) SA (Pty) Ltd v Bartels [1954] 3 All ER 659; [1954] 1 WLR 1457 encapsulated the correct principle: When the substantive judgment is not being altered, but only the title of the action, it is to my mind quite plain that this court has ample jurisdiction to correct any misnomer or misdescription at any time whether before or after judgment. [82,000.40] Cost applications In Frost v Bovaird (2012) 203 FCR 95; [2012] FCAFC 60; BC201202489 the court (Jacobson, Siopis and Nicholas JJ) at [53] adopted the principles isolated by Lightman J in Alsop Wilkinson (a firm) v Neary [1995] 1 All ER 431; [1996] 1 WLR 1220 with regard to what might become involved, including bankruptcy questions: His Honour said at 1223: Trustees may be involved in three kinds of dispute. (1) The first (which I shall call “a trust dispute”) is a dispute as to the trusts on which they hold the subject matter of the settlement. This may be “friendly” litigation involving eg the true construction of the trust instrument or some other question arising in the course of the administration of the trust; or “hostile” litigation eg a challenge in whole or in part to the validity of the settlement by the settlor on grounds of undue influence or by a trustee in bankruptcy or a defrauded creditor of the settlor, in which case the claim is that the trustees hold the trust funds as trustees for the settlor, the trustee in bankruptcy or creditor in place of or in addition to the beneficiaries specified in the settlement. The line between friendly and hostile litigation, which is relevant as to the incidence of costs, is not always easy to draw: see Re Buckton, Buckton v Buckton [1907] 2 Ch 406. (2) The second (which I shall call “a beneficiaries dispute”) is a dispute with one or more of the beneficiaries as to the propriety of any action which the trustees have taken or omitted to take or may or may not take in the future. This may take the form of proceedings by a beneficiary alleging breach of trust by the trustees and seeking removal of the trustees and/or damages for breach of trust. (3) The third (which I shall call “a third party dispute”) is a dispute with persons, otherwise than in the capacity of beneficiaries, in respect of rights and liabilities eg in contract or tort assumed by the trustees as such in the course of administration of the trust. In Frost the nature of the proceedings in which the trustees sought indemnity fell into the third category. The court adopted Lightman J’s observation at 1224: Trustees (express and constructive) are entitled to an indemnity against all costs, expenses and

liabilities properly incurred in administering the trust and have a lien on the trust assets to secure such indemnity. Trustees have a duty to protect and preserve the trust estate for the benefit of the beneficiaries and accordingly to represent the trust in a third party dispute. Accordingly their right to an indemnity and lien extends in the case of a third party dispute to the costs of proceedings properly brought or defended for the benefit of the trust estate. Views may vary whether proceedings are properly brought or defended, and to avoid the risk of a challenge to their entitlement to the indemnity, (a beneficiary dispute), trustees are well advised to seek court authorisation before they sue or defend. The right to an indemnity and lien will ordinarily extend to the costs of such an application. The court in Frost applied, too, Jennings v Mather [1900-3] All ER Rep 788; [1902] 1 KB 1; (1901) 70 LJKB 1032; 50 WR 52 a case where a third party creditor proceeded against a trustee, it was held that a trustee is prima facie entitled to an indemnity and it was for the party alleging to the contrary, to displace the prima facie position.

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[82,005] Further powers exercisable by trustee 135 [s 135 rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [page 493]

[82,010] Right to pay off mortgages 136 (1) Where any property of the bankrupt is subject to a mortgage, the trustee may, upon giving 6 months’ notice in writing to the mortgagee of his or her intention to do so or upon paying 6 months’ interest in lieu of notice, require the mortgagee to discharge the mortgage notwithstanding that the due time for payment of the moneys owing under the mortgage has not arrived and, upon tender of the moneys secured by the mortgage and, if appropriate, interest in lieu of notice, the mortgagee is bound to execute such documents as are necessary in consequence of the payment. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) The rights conferred on the trustee by subsection (1) are in addition to any rights to pay off the whole or part of the moneys secured by the mortgage before the due time conferred on the mortgagor by the mortgage instrument or by a law of a State or Territory of the Commonwealth.

[82,015] Right of trustee to inspect goods held as

security 137 (1) Where goods of a bankrupt are held by a person by way of security, the trustee may, after giving notice in writing of his or her intention to do so, inspect the goods. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Where notice has been given under subsection (1), the person holding the goods is not entitled to realize his or her security until he or she has given the trustee a reasonable opportunity of inspecting the goods and of exercising his or her right of redemption if he or she thinks fit to do so. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) Nothing in this section affects the rights or title of a bona fide purchaser for value who purchased, or entered into an agreement to purchase, goods held by way of security without notice of the fact that the person from whom the goods were purchased or with whom the agreement to purchase the goods was made had received a notice under this section.

[82,020] Limitation of trustee’s power in respect of copyright, patents etc 138 (1) Where: (a) the property of a bankrupt includes rights in respect of industrial property; and (b) the bankrupt is liable to pay royalties or a share of profits to a person in respect of those rights; the trustee is not entitled: (c) to exercise those rights except upon condition that he or she pays to that person such sums by way of royalty or share of profits as would have been payable by the bankrupt; or (d) without the consent of that person or of the Court, to assign or transfer, or grant any licence or permission in respect of, those rights, except upon terms that will secure to that person payments by way of royalty or share of profits at a rate not less than that at which the bankrupt was liable to pay. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) In this section:

industrial property means: (a) the copyright in any work; [page 494] (b) a patent in respect of an invention; (c) a registered trade mark; or (d) the copyright in a registered design. registered design means a design registered under a law of the Commonwealth relating to industrial designs. registered trade mark means a trade mark registered under a law of the Commonwealth relating to trade marks.

[82,025] Protection of trustee from personal liability in certain cases 139 (1) Where: (a) the trustee has seized or disposed of any goods in the possession or on the premises of a bankrupt without notice of any claim by any person in respect of those goods; and (b) the goods were not, at the date of the bankruptcy, the property of the bankrupt; the trustee is not personally liable for any loss or damage arising from the seizure or disposal, or for the costs of proceedings taken in respect of the seizure or disposal, unless the court in which the claim is made is of the opinion that the trustee has been guilty of negligence in respect of the seizure or disposal. [subs (1) am Act 12 of 1980 s 6]

(2) The trustee is not personally liable for any rates, land tax or municipal or other statutory charges imposed by or under a law of the Commonwealth or of a State or Territory of the Commonwealth upon or in respect of property forming part of the estate of the bankrupt, being rates, land tax or municipal or other statutory charges that fall due on or after the date of the bankruptcy, except to the extent, if any, of the rents and profits received by the trustee in

respect of that property on or after the date of the bankruptcy. (3) Where a trustee of the estate of a bankrupt carries on a business previously carried on by the bankrupt, he or she is not personally liable for any payment in respect of long service leave or extended leave for which the bankrupt was liable or for any payment in respect of long service leave or extended leave to which a person employed by him or her in his or her capacity as trustee of the estate of the bankrupt, or the legal personal representative of such a person, becomes entitled after the date of the bankruptcy. [subs (3) am Act 21 of 1985 s 27; Act 44 of 1996 s 3 and Sch 2]

(4) This section does not affect any liability of the trustee of the estate of a bankrupt other than personal liability. SECTION 139 GENERALLY [82,025.5] Section 5 “Goods” are defined in s 5 to include all chattels personal.

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DIVISION 4A — ORDERS IN RELATION TO PROPERTY OF ENTITY CONTROLLED BY BANKRUPT OR FROM WHICH BANKRUPT DERIVED A BENEFIT [Div 4A insrt Act 119 of 1987 s 51; am Act 33 of 2006 s 3 and Sch 1[16], opn 31 May 2006] DIVISION 4A — INTRODUCTION [82,070] Commencement Division 4A was enacted by proclamation of the Bankruptcy Amendment Act 1987 No 119. [82,070.5] Rationale and intention The explanatory memorandum circulated prior to the enactment of the Bankruptcy Amendment Act 1987 indicated that the intention of the new Division [page 495] was to claw back into bankrupt estates property legally owned by a third party but which the bankrupt had materially contributed to the acquisition of whether directly or indirectly in circumstances where the entity in whom the property is vested is an associated entity of the bankrupt. At the time it was enacted, it was widely thought that the provisions of Div 4A could be and would be used to great advantage by trustees to recover assets which had previously been out of reach of the creditors. In practice the provisions have not proved nearly as helpful to trustees as was at first envisaged.

There have been very few applications made by trustees pursuant to the section. One of the great difficulties is in gathering sufficient evidence to make out an application. See, for example, Dwyer v Ross (1992) 34 FCR 463. [82,070.10] For an example of the effective use (at least at an interlocutory stage) of ss 139D and 139E, see Horne v Concore Australia Pty Ltd (Fed C of A, North J, VG 7124/97, 6 June 1997, unreported).

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[82,075] 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). [s 139A insrt Act 119 of 1987 s 51]

[82,080] 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. [s 139B insrt Act 119 of 1987 s 51]

[82,085] 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. [s 139C insrt Act 119 of 1987 s 51]

[82,088] Definition of examinable period 139CA (1) For the purposes of this Division, the examinable period is: (a) in the case of an application for an order in relation to a related entity of the bankrupt — the period beginning: (i) if, at a time or times during the period of 1 year beginning 5

years before the commencement of the bankruptcy, the bankrupt became insolvent — at that time, or at the first of those times, as the case may be; or (ii) in any other case — 4 years before the commencement of the bankruptcy; and ending on the day on which the application is made; or (b) in any other case — the period beginning: (i) if, at a time or times during the period of 3 years beginning 5 years before the commencement of the bankruptcy, the bankrupt became insolvent — at that time, or at the first of those times, as the case may be; or [page 496] (ii) in any other case — 2 years before the commencement of the bankruptcy; and ending on the day on which the application is made. (2) For the purposes of subparagraphs (1)(a)(i) and (b)(i), a rebuttable presumption arises that a bankrupt became insolvent at a time during the period referred to in the relevant subparagraph if it is established that the bankrupt: (a) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor’s business transactions and financial position; or (b) having kept such books, accounts and records, has not preserved them. [s 139CA insrt Act 33 of 2006 s 3 and Sch 1[17], opn 31 May 2006]

[82,090] Order relating to property of entity other than a natural person 139D (1) Where, on an application under section 139A for an order in relation to a respondent entity other than a natural person, 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 end 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 (whether directly or indirectly) 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. [subs (1) am Act 115 of 1990 s 20; Act 33 of 2006 s 3 and Sch 1[18], [19], opn 31 May 2006]

(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. [s 139D insrt Act 119 of 1987 s 51; am Act 33 of 2006 s 3 and Sch 1, opn 31 May 2006]

[page 497] SECTION 139D GENERALLY [82,090.10] Injunctions In Trustee of Bankrupt Estate of Tom Karas v Karas (Fed C of A, Ryan J, 15 April 1998, unreported), Ryan J distinguished Re Bayliss; Ex parte Official Trustee in Bankruptcy (1987) 15 FCR 167; 73 ALR 455: see [80,750.10]. His Honour preferred to apply the usual High Court authorities to the question of whether or not an injunction should be granted to restrain a mortgagee from a respondent entity from dealing with mortgaged property. [82,090.15] Costs In Carter v Scotney [2014] FCCA 697; BC201402595 it was decided that the costs should be paid by both parties but that after an offer was made the successful party received a costs order. There was discussion of the circumstances.

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[82,093] Order relating to property of natural person 139DA If, on an application under section 139A for an order in relation to a respondent entity that is a natural person, the Court is satisfied that: (a) during the examinable period, the entity acquired an estate in particular property as a direct or indirect result of financial contributions made by the bankrupt during that period; and (b) the bankrupt used, or derived (whether directly or indirectly) a benefit from, the property at a time or times during the examinable period; and (c) the entity still has the estate in the property; the Court may make an order of a kind referred to in subsections 139D(2) and (3), whether or not the bankrupt has ever had an estate in the property. [s 139DA insrt Act 33 of 2006 s 3 and Sch 1[20], opn 31 May 2006] SECTION 139DA GENERALLY [82,093.10] Costs See 82,090.15 above.

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[82,095] Order relating to net worth of entity other than a natural person 139E (1) Where, on an application under section 139A for an order in relation to a respondent entity other than a natural person, 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 end 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; [page 498] subsection (2) has effect. [subs (1) am Act 115 of 1990 s 21; Act 33 of 2006 s 3 and Sch 1[21], opn 31 May 2006]

(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). [s 139E insrt Act 119 of 1987 s 51]

[82,098] Order relating to increase in value of property of natural person 139EA If, on an application under section 139A for an order in relation to a respondent entity that is a natural person, the Court is satisfied that: (a) during the examinable period, the value of the entity’s interest in particular property increased as a direct or indirect result of financial contributions made by the bankrupt during that period; and (b) the bankrupt used, or derived (whether directly or indirectly) a benefit from, the property at a time or times during the examinable period; the Court may, by order, direct the entity to pay to the applicant a specified amount not exceeding the amount by which the value of the entity’s interest in the property increased as a result of the financial contributions made by the bankrupt. [s 139EA insrt Act 33 of 2006 s 3 and Sch 1[22], opn 31 May 2006]

[82,100] Court to take account of interests of other persons 139F (1) In considering whether or not to make under section 139D or 139DA 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. [subs (1) am Act 33 of 2006 s 3 and Sch 1[23], opn 31 May 2006]

(2) In considering whether or not to make a particular order under section 139E or 139EA, the Court shall take account of the respondent entity’s

current net worth and any hardship the order might cause the entity’s creditors. [subs (2) am Act 33 of 2006 s 3 and Sch 1[24], opn 31 May 2006] [s 139F insrt Act 119 of 1987 s 51]

[82,105] Giving effect to orders under this Division 139G (1) Where: (a) the Court makes an order under section 139D or 139DA 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. [subs (1) am Act 33 of 2006 s 3 and Sch 1[25], opn 31 May 2006]

[page 499] (2) Where the Court makes under section 139D or 139DA 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. [subs (2) am Act 33 of 2006 s 3 and Sch 1[26], opn 31 May 2006]

(3) An order by the Court under section 139E or 139EA 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. [subs (3) insrt Act 119 of 1987 s 51; am Act 33 of 2006 s 3 and Sch 1[27], opn 31 May 2006] [s 139G am Act 33 of 2006 s 3 and Sch 1, opn 31 May 2006]

[82,110] Entity entitled to claim in bankruptcy 139H (1) Where, on an application under section 139A, the Court makes an order under section 139D or 139DA vesting in the applicant an estate in property, or an order under section 139E or 139EA 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. [subs (1) am Act 33 of 2006 s 3 and Sch 1[28], [29], opn 31 May 2006]

(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. [s 139H insrt Act 119 of 1987 s 51]

DIVISION 4B — CONTRIBUTION BY BANKRUPT AND RECOVERY OF PROPERTY [Div 4B insrt Act 9 of 1992 s 25]

Subdivision A — Preliminary

[82,113J] Objects of Division 139J The objects of this Division are: (a) to require a bankrupt who derives income during the bankruptcy to pay contributions towards the bankrupt’s estate; and (b) to enable the recovery of certain money and property for the benefit of the bankrupt’s estate.

Subdivision B — Interpretation

[82,113K] Definitions 139K In this Division, unless the contrary intention appears: actual income threshold amount, at the time an assessment is made in relation to a contribution assessment period, means:

(a) if the bankrupt does not have any dependants at that time — the base income threshold amount; or [page 500] (b) if the bankrupt has one dependant at that time — the base income threshold amount increased by 18%; or (c) if the bankrupt has 2 dependants at that time — the base income threshold amount increased by 27%; or (d) if the bankrupt has 3 dependants at that time — the base income threshold amount increased by 32%; or (e) if the bankrupt has 4 dependants at that time — the base income threshold amount increased by 34%; or (f) if the bankrupt has more than 4 dependants at that time — the base income threshold amount increased by 36%. [def am Act 44 of 1996 s 3 and Sch 1]

assessment, in relation to a contribution assessment period, means the original assessment or a subsequent assessment in respect of that period. base income threshold amount, at the time when an assessment is made in relation to a contribution assessment period, means: (a) for a contribution assessment period of one year — 3.5 times the amount that, at that time, is specified in column 3, item 2, Table B, point 1064-B1, Pension Rate Calculator A, in the Social Security Act 1991; or (b) for a contribution assessment period less than one year — a proportionally smaller amount based on the number of whole days in the period. [def subst Act 44 of 1996 s 3 and Sch 1]

contribution assessment period, in relation to a bankrupt, means a period that: (a) begins on the day the bankrupt becomes a bankrupt or an anniversary of that day during the bankruptcy; and (b) ends one year after that day or anniversary, as the case

requires, or if the bankrupt is discharged or the bankruptcy is annulled within that year, ends upon the discharge or annulment. [def subst Act 44 of 1996 s 3 and Sch 1]

dependant, in relation to a bankrupt in relation to a contribution assessment period, means a person who satisfies all the following conditions: (a) the person resides with the bankrupt; (b) the person is wholly or partly dependent on the bankrupt for economic support; (c) the income derived (or likely to be derived) by the person during the contribution assessment period is not more than the amount prescribed by the regulations for the purposes of this paragraph. For the purposes of this definition, income has its ordinary meaning. [def subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

derived means earned, derived or received from any source, whether within or outside Australia. income, in relation to a bankrupt, has the meaning given by section 139L. income tax includes Medicare levy. [def insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

original assessment, in relation to a contribution assessment period, means the assessment made by the trustee under subsection 139W(1) in respect of that period. spouse, in relation to a bankrupt, includes a de facto partner of the bankrupt. [def am Act 144 of 2008 s 3 and Sch 2[31], opn 10 Dec 2008]

[page 501] subsequent assessment, in relation to a contribution assessment period, means an assessment made by the trustee under subsection 139W(2)

in respect of that period. value, in relation to property referred to in a notice, means the market value of the property when the notice is given. SECTION 139K GENERALLY [82,113K.5] Contribution assessment period The first contribution assessment period (CAP) of a bankrupt begins on the commencement of the bankruptcy and not the date of the bankruptcy: see s 5 for the respective definitions of “the commencement of the bankruptcy” and “the date of the bankruptcy”.

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Subdivision C — Income

[82,113L] Meaning of income *139L (1) In this Division: income, in relation to a bankrupt, has its ordinary meaning, subject to the following qualifications: (a) the following are income in relation to a bankrupt (whether or not they come within the ordinary meaning of “income”): (i) an annuity or pension paid to the bankrupt from a provident, benefit, superannuation, retirement or approved deposit fund; (ia) an annuity or pension paid to the bankrupt from an RSA; (ii) a payment to the bankrupt in consequence of a termination of any office or employment; (iii) an amount of annuity or pension received by the bankrupt under a policy of life insurance or endowment insurance; (iv) an amount received by the bankrupt as a beneficiary under a trust to the extent that the amount was paid out of income of the trust; (v) the value of a benefit that: (A) is provided in any circumstances by any person (the provider) to the bankrupt; and (B) is a benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 as in force at the

beginning of 1 July 1992 (other than a benefit that would be an exempt benefit for the purposes of that Act if the provider were the employer of the bankrupt as an employee and the provider had provided the benefit in respect of the employment of the bankrupt); being that value as worked out in accordance with the provisions of that Act but subject to any modifications of any provisions of that Act made by the regulations under this Act; (vi) the value of a loan made to the bankrupt by an associated entity of the bankrupt, including: (A) a loan under which the loan money is not paid to the bankrupt, but is paid or applied at the bankrupt’s direction; and (B) a loan that is not enforceable at law or in equity; [page 502] (vii) the amount of any money, or the value of any other consideration, received by a person other than the bankrupt from another person as a result of work done or services performed by the bankrupt, less any expenses (other than expenses of a capital nature) necessarily incurred by the first-mentioned person in connection with the work or services; (b) the following are not income in relation to a bankrupt (even if they come within the ordinary meaning of “income”): (i) an amount paid to the bankrupt: (A) from the Child Support Account established under the Child Support (Registration and Collection) Act 1988; or (B) from another source for the maintenance of children of whom the bankrupt has custody; or

(ii) [repealed] (iii) [repealed] (iv) a payment to the bankrupt under: (A) a legal aid scheme or service established under a law of the Commonwealth or of a State or Territory of the Commonwealth; or (B) a legal aid scheme or service approved by the Attorney-General for the purposes of paragraph 2(4) (a) of the Federal Court of Australia Regulations; or (C) any other legal aid scheme or service established to provide assistance to people on low incomes; (v) a payment or amount that the regulations provide is not income of the bankrupt. [def subst Act 44 of 1996 s 3 and Sch 1; am Act 152 of 1997 s 3 and Sch 2; Act 45 of 1998 Sch 13; Act 93 of 1998 Sch 7; Act 83 of 1999 s 3 and Sch 11; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

pension includes a pension within the meaning of the Superannuation Industry (Supervision) Act 1993. (2) For the purposes of the application of the definition of income in subsection (1) to Subdivision HA, a reference in that definition to a bankrupt includes a reference to a person who has been discharged from bankruptcy. Note: Subdivision HA deals with the supervised account regime. [subs (2) insrt Act 20 of 2005 s 3 and Sch 2, opn 18 Mar 2005] [s 139L am Act 82 of 1993 s 8; Act 184 of 1994 s 10 and Sch 3; Act 62 of 1997 s 3 and Sch 3] SECTION 139L GENERALLY [82,113L.5] Generally Quaere whether the classes of payment in paras (a)–(f) are limited by a requirement that they constitute income according to ordinary usages and concepts. In Bond v Trustee of Property of Bond (a bankrupt) (1994) 125 ALR 429, French J (though in the minority, uncontradicted in respect of this dictum) indicated that there was no such limitation but “that the classes of payment defined in paragraphs (a)—(f) are assumed to be income. The income designation is not framed so as to limit those classes”. In Blair v Inspector General in Bankruptcy (1994) 34 ALD 258 payments of family allowance and rental assistance paid to the bankrupt under the Social Security Act 1991 were found to be assessable as income of the bankrupt under s 139L. The Administrative Appeals Tribunal found that “the effect of the words in parenthesis at the end of s 139L (other than paragraph (a) …) is that the exclusion from the meaning of income in the Act does not extend to a payment under the Social Security Act. Consequently the payments of family allowance and rent assistance as a payment under the Social Security Act are income for the purposes of s 139L.”

[page 503] It is submitted that the decision in Blair v Inspector General in Bankruptcy, above, is incorrect in that payments received by a bankrupt under the Social Security Act 1991 should only be assessable as income of the bankrupt for the purposes of Div 4B in so far as such payments constitute “income according to ordinary usages and concepts”. Quaere whether a bankrupt is entitled to have his or her assessable income reduced by expenses he or she incurred in the course of deriving his or her income: see Re Ellis; Ex parte Jefferson (FCA, Drummond J, QB 1914 of 1993, 17 February 1995, unreported). [82,113L.10] Derivation of income If income is “derived” by a bankrupt it will be assessed as income for the purposes of Div 4B: see ss 139K and 139M. [82,113L.15] Income according to ordinary usages and concepts The 1996 amendments substituted “ordinary meaning” for this well-known expression. The term “income according to ordinary usages and concepts” derives from the decision of Jordan CJ in Scott v Commissioner of Taxation (NSW) (1935) 35 SR (NSW) 215 at 219: The word “income” is not a term of art, and what forms of receipt are comprehended within it, and what principles are to be applied to ascertain how much of those receipts ought to be treated as income, must be determined in accordance with the ordinary concepts and usages of mankind, except in so far as the statute states or indicates an intention that receipts which are not income in ordinary parlance are to be treated as income, or that special rules are to be applied for arriving at the taxable amount of such receipts. This expression has been widely considered in the taxation context since it was first coined by Jordan CJ. While it is generally understood that income must be derived from an earning activity there is some authority to suggest that this is not necessarily the case. In Federal Commissioner of Taxation v Dixon (1952) 86 CLR 540, the High Court had to consider whether voluntary payments by a former employer of a taxpayer who had enlisted in the Army during the war constituted income according to ordinary concepts for taxation purposes. The payments to the taxpayer were to act as a supplement to his income. Fullagar J held at 568: “What the employing firm decided to do, and what it really did, in relation to the respondent and others in the same position, was ‘to make up the difference between their present rate of wages and the amount they will receive’. What is paid is not salary or remuneration and it is not paid in respect of or in relation to any employment of the recipient. But it is intended to be, and is in fact, a substitute for … the salary or wages which would have been earned and paid if the enlistment had not taken place. As such, it must be income, even though it is paid voluntarily and there is not even a moral obligation to continue making the payments. It acquires the character of that for which it is substituted and that to which it is added”. There are also references in a number of bankruptcy cases to the wide definition given to the term “income”: see generally Re Gillies; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571; 115 ALR 631. In the decision of Ex parte Huggins; Re Huggins [1882] 21 Ch D 85, Jessell MR held that “the present appellant’s income is not a salary but it is income. The word income is as large a word as can be used”. In Lockwood v Vince [2007] FCA 1946; BC200710710 Finkelstein J applied similar principles, but those appropriate to a trust. The trustee alleged that the bankrupt failed to disclose other income, namely sums paid into an investment property loan account by a third party. His Honour had to consider whether these payments were income within the ordinary meaning of that term were benefits under s 139L(1)(a)(vi). He concluded that because the bankrupt was not permitted to deal with the money from the

imposition of his bankruptcy it could not be said to have been “received”. He applied the judgment of Gibbs and Brennan JJ in National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 CLR 251; 65 ALR 385; BC8601427 in which their Honours applied in turn the decision of Dixon J James v Oxley (1939) 61 CLR 433 at 456; [1939] ALR 55; BC3900004. At [25], Finkelstein J’s conclusion was: [25] … For the same reason that I reached the conclusion that the deposits had not been “received” by the bankrupt it cannot be said that he was provided with any benefit from the payments. [page 504] [82,113L.20] Fringe benefits In Bond v Trustee of Property of Bond (a bankrupt) (1994) 125 ALR 429 the majority (Cooper and Carr JJ delivering separate judgments, French J dissenting) determined that in the absence of an employment relationship a benefit received by a bankrupt could not be assessed as income of the bankrupt by reason of s 139L(e). The 1996 amendments have reversed this position. [82,113L.25] For an example of how s 139L(f) is applied see Pattison v Inspector-General in Bankruptcy; Re Ansett (1994) 32 ALD 679. The expression “expenses … necessarily incurred by the first-mentioned person” does not include a payment of tax by that person: Re Ellis; Ex parte Jefferson (FCA, Drummond J, QB 1914 of 1993, 17 February 1995, unreported).

____________________ *Editor’s note: See [79,945] concerning the application of parts of this section.

[82,113M] Derivation of income 139M (1) Income is taken to be derived by a bankrupt for the purposes of this Division even though it is not actually received by the bankrupt because: (a) an amount is deducted from it, or it is wholly or partly otherwise applied, under a law of the Commonwealth, of a State or of a Territory; or (b) it is reinvested, accumulated or capitalised; or (c) it is dealt with on behalf of the bankrupt or as the bankrupt directs. (2) A reference in this Division to the income that a bankrupt is likely to derive during a contribution assessment period includes a reference to income that the bankrupt has derived during that period. (3) A reference in this Division to income derived by a bankrupt during a contribution assessment period includes a reference to income so derived in respect of work done or services performed by the bankrupt before that

period or work to be done or services to be performed by the bankrupt after that period.

[82,113N] Income varied by income tax payments and refunds and child support payments 139N (1) The income that is likely to be derived, or was derived, by a bankrupt during a contribution assessment period: (a) is taken to be reduced by: (i) any amount that the bankrupt pays or is likely to be liable to pay, or paid or was liable to pay, as the case may be, during that period in respect of income tax (but not including any amount that is in respect of a provable debt); and (ii) [repealed] (iii) if the bankrupt pays or is likely to be liable to pay, or paid or was liable to pay, as the case may be, during that period an amount for the support of a child pursuant to a maintenance agreement entered into under the Family Law Act 1975 or under a maintenance order — so much of that amount as does not exceed the maximum amount that, but for that agreement or order, the bankrupt could be, or could have been, liable to pay during that period in respect of child support under the Child Support (Assessment) Act 1989; and (b) is taken to be increased by any amount that the bankrupt receives or is likely to receive, or received or was entitled to receive, as the case may be, during that period as a refund of income tax. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 505] (2) A refund is not taken into account under paragraph (1)(b) if it relates to a year of income that ended before the date of the bankruptcy. [subs (2) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) If a refund relates to a year of income that commenced before, but ended after, the date of the bankruptcy, then it is taken into account under

paragraph (1)(b) only to the extent that the refund is attributable to the part of the year of income after the date of bankruptcy. For this purpose, the refund is apportioned on a time basis. [subs (3) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 139N am Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 139N GENERALLY [82,113N.5] Income tax “Only payments actually made in respect of income tax, and only refunds actually received, during the [contribution assessment period] are taken into account as required by s 139N”: Pattison v Inspector-General in Bankruptcy; Re Ansett (1994) 32 ALD 679. Therefore a liability of a bankrupt during the contribution assessment period (CAP) to pay income tax for a period prior to the CAP will be taken into account for the purposes of s 139N only to the extent the bankrupt makes payments in respect of that liability during the CAP. Similarly a refund will be taken into account in the CAP in which it is received.

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Subdivision D — Liability of bankrupt to pay contributions

[82,113P] Liability of bankrupt to pay contribution 139P (1) Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment exceeds the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is liable to pay to the trustee a contribution in respect of that period. (2) Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment does not exceed the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is not liable to, but may if he or she so wishes, pay to the trustee a contribution in respect of that period. SECTION 139P GENERALLY [82,113P.5] Income contributions Prior to 1 July 1992 and the repeal of s 131 a bankrupt in receipt of income was entitled to retain it for his or her own benefit, subject to an order of the court requiring him or her to make payment to the trustee. Due to the cost involved in making application to the court, the onus on the trustee of proving the bankrupt’s ability to pay contributions and the lack of effective sanction against a bankrupt failing to comply with an order, a bankrupt was rarely ordered to pay contributions to his or her bankrupt estate. Since the commencement of Div 4B on 1 July 1992 a bankrupt has been required to pay

contributions to the trustee of his or her bankrupt estate where his or her income, as assessed by his or her trustee, exceeds a given threshold level. The amount of contributions payable is equal to 50% of all income exceeding the threshold level: s 139S. In Re Gillies; Ex parte Official Trustee in Bankruptcy (1993) 42 FCR 571; 115 ALR 631 it was held that Div 4B constitutes a code for dealing with after-acquired income of a bankrupt. Therefore if the bankrupt is in receipt of property after the date of the bankruptcy that is assessable as income of the bankrupt for the purposes of Div 4B it will not vest in the trustee as after-acquired property. Income received by a bankrupt prior to the date of bankruptcy will, to the extent it remains unexpended, vest in the trustee upon bankruptcy as property of the bankrupt. [page 506] The object of the Bankruptcy Act in requiring a bankrupt to pay contributions to his or her bankrupt estate was considered in Bond v Trustee of Property of Bond (a bankrupt) (1994) 125 ALR 429. Cooper J indicated, obiter dicta, that it was the intent of the legislature to require a bankrupt to pay contributions only where there was a capacity to do so. The 1996 amendments appear to deny this judicial observation.

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[82,113Q] Change in liability of bankrupt 139Q (1) If the income that a bankrupt is likely to derive, or derived, during a contribution assessment period as assessed by the trustee under a subsequent assessment exceeds the actual income threshold amount applicable in relation to the bankrupt when the subsequent assessment is made, the bankrupt is liable to pay to the trustee a contribution in respect of that period. (2) The liability of the bankrupt under subsection (1) in respect of a contribution assessment period is in substitution for any liability of the bankrupt in respect of that period under subsection 139P(1) or under any previous application of subsection (1) of this section and has effect despite subsection 139P(2). (3) If the income that a bankrupt is likely to derive, or derived, during a contribution assessment period as assessed by the trustee under a subsequent assessment does not exceed the actual income threshold amount applicable in relation to the bankrupt when the subsequent assessment is made: (a) the bankrupt is not liable to, but may if he or she so wishes, pay to the trustee a contribution in respect of that income; and (b) any liability that the bankrupt had under subsection 139P(1) or

under subsection (1) of this section to pay a contribution in respect of that period is extinguished.

[82,113R] Liability not affected by subsequent discharge 139R Any liability of a bankrupt under section 139P or 139Q is not affected by his or her discharge from bankruptcy after the making of the assessment that gave rise to the liability.

[82,113S] Contribution payable by bankrupt 139S The contribution that a bankrupt is liable to pay in respect of a contribution assessment period is the amount worked out in accordance with the formula: where: Assessed income means the amount assessed by the trustee to be the income that the bankrupt is likely to derive, or derived, during the contribution assessment period. Actual income threshold amount means the actual income threshold amount assessed by the trustee to be applicable in relation to the bankrupt when the assessment is made.

[82,113T] Determination of higher income threshold in cases of hardship 139T (1) If: (a) the trustee has made an assessment of a contribution that a bankrupt is liable to pay to the trustee for a contribution assessment period; and [page 507]

the bankrupt considers that, if required to pay that contribution, he (b) or she will suffer hardship for a reason or reasons set out in subsection (2); the bankrupt may apply in writing to the trustee for the making of a determination under this section for that period. (2) The reasons are as follows: (a) the bankrupt or a dependant of the bankrupt suffers from an illness or disability that requires on-going medical attention and the supply of medicines, and the bankrupt is required to meet a substantial proportion of the costs of that medical attention or those medicines from his or her income; (b) the bankrupt is required to make payments from his or her income to meet the cost of child day-care to enable the bankrupt to continue in employment or other work; (c) the bankrupt is living in rented accommodation that is not provided by: (i) the Commonwealth, a State or a Territory; or (ii) an authority of the Commonwealth, a State or a Territory; or (iii) a local government authority; and the bankrupt is required to pay the cost of that accommodation wholly or mainly from his or her income; (d) the bankrupt incurs substantial expense in travelling to and from the bankrupt’s place of employment or other work, whether by public transport or otherwise; (e) the spouse of the bankrupt, or another person residing with the bankrupt, who ordinarily contributes to the costs of maintaining the bankrupt’s household has become unable to contribute to those costs because of unemployment, illness or injury; (f) any other reason prescribed by the regulations. (3) The trustee must not make a determination under this section unless the bankrupt provides satisfactory evidence of the bankrupt’s income and expenses, and any other matters on which the bankrupt relies to establish the reasons for the application. (4) The trustee must decide the application as soon as practicable, and in any event not later than 30 days, after the day on which the application is

received. (5) If the trustee does not make a decision on the application within that period of 30 days, the trustee is taken to have made a decision at the end of that period refusing the application. (6) If the trustee is satisfied that the bankrupt will suffer hardship if required to pay the contribution, the trustee may determine that, for the purposes of the application of section 139S in relation to the bankrupt in respect of the contribution assessment period, the actual income threshold amount that was applicable in relation to the bankrupt when the assessment was made is taken to have been increased to such amount as the trustee determines. (7) If the trustee is not satisfied that the bankrupt will suffer hardship if required to pay the contribution, the trustee must refuse the application. (8) If the trustee makes a determination under subsection (6), the trustee must make such assessment under section 139W as is necessary to give effect to the determination. (9) The trustee must give written notice to the bankrupt: (a) setting out the trustee’s decision on the application; and (b) referring to the evidence or other material on which the decision was based; and (c) giving the reasons for the decision. (10) The notice must include a statement to the effect that the bankrupt may request the Inspector-General to review the decision. [page 508] (11) A contravention of subsection (10) in relation to a decision does not affect the validity of the decision. (12) The trustee’s decision under this section is reviewable under Subdivision G in the same way as an assessment made by the trustee. [s 139T subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

Subdivision E — Provision of information to trustee

[82,113U] Bankrupt to provide evidence of income *139U (1) A bankrupt must, as soon as practicable, and in any event not later than 21 days, after the end of a contribution assessment period, give to the trustee: (a) a statement: (i) setting out particulars of all the income that was derived by the bankrupt during that contribution assessment period; and (ia) setting out particulars of all the income that was derived by each dependant of the bankrupt during that contribution assessment period; and (ii) indicating what income (if any) the bankrupt expects to derive during the next contribution assessment period; and (iii) indicating what income (if any) the bankrupt expects each dependant of the bankrupt to derive during the next contribution assessment period; and (b) such books evidencing the derivation of the income referred to in subparagraph (a)(i) as are in the possession of the bankrupt or the bankrupt can readily obtain. Penalty: Imprisonment for 6 months. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The particulars that a bankrupt is required to include in a statement given to the trustee under subparagraphs (1)(a)(i) and (ia) are all the particulars that are known to the bankrupt and any particulars that the bankrupt can readily obtain. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) Without limiting the generality of paragraph (1)(b), the books that a bankrupt is required to give to the trustee under that paragraph in respect of a contribution assessment period include: (a) if the bankrupt received from his or her employer one or more pay slips or other documents evidencing salary or wages paid to him or her by that employer during that period — that document or each of those documents; and (b) any copy of a group certificate or payment summary (within the meaning of section 16-170 in Schedule 1 to the Taxation Administration Act 1953) in the possession of the bankrupt that

relates in whole or in part to that period; and (c) any statement provided to the bankrupt by an ADI or other financial institution that shows periodic payments made during that period to an account kept by the bankrupt (either alone or jointly with any other person) with that institution; and [page 509] (d) any notice of assessment issued to the bankrupt under the Income Tax Assessment Act 1936 in respect of a year of income in which that period is included; and (e) if the bankrupt is in receipt of a pension, allowance or other benefit under a law of the Commonwealth, of a State or of a Territory — any letter or other document sent or given to the bankrupt by the Department or authority that administers the legislation or scheme under which the benefit is provided. [subs (3) am Act 170 of 1995 s 3 and Sch 2; Act 48 of 1998 Sch 1.19; Act 179 of 1999 s 3 and Sch 11] SECTION 139U GENERALLY [82,113U.5] Objection to discharge A failure to disclose particulars of income in accordance with s 139U is a ground of objection to discharge from bankruptcy: see [82,173].

____________________ *Editor’s note Section 56 of Act 170 of 1995 provides as follows: “Application and transitional — item 54 56 (1) The amendment made by item 54 applies to contribution assessment periods beginning on or after 1 July 1995 and ending 28 days or more after the day on which this Part commences. (2) If a contribution assessment period begins before 1 July 1995 and ends 28 days or more after the day on which this Schedule commences, paragraph 139U(3)(b) of the Bankruptcy Act 1966 applies as if the reference in that paragraph to any group certificate that relates in whole or in part to the contribution assessment period included a reference to any copy of a group certificate that relates in whole or in part to so much of the period as occurs after 30 June 1995.”

[82,113V] Power of trustee to require bankrupt to provide additional evidence

139V If the trustee has reasonable grounds to suspect that: (a) any particulars set out in the statement given by the bankrupt under subsection 139U(1) are false or misleading in a material respect; or (b) any material particulars have been omitted from that statement; then, for the purpose of enabling the trustee to decide whether the particulars set out in the statement are correct, the trustee, by written notice given to the bankrupt, may require the bankrupt to give to the trustee within a specified period of not less than 14 days such information or books as are specified in the notice.

Subdivision F — Assessments of income and contribution

[82,113W] Assessment of bankrupt’s income and contribution 139W (1) As soon as practicable after the start of each contribution assessment period in relation to a bankrupt, the trustee is to make an assessment of the income that is likely to be derived, or was derived, by the bankrupt during that period, of the actual income threshold amount that is applicable in relation to the bankrupt when the assessment is made and of the contribution (if any) that the bankrupt is liable to pay in respect of that period under section 139S. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(2) If at any time, whether during or after a contribution assessment period, any one or more of the following paragraphs applies or apply: (a) the trustee is satisfied that the income that is likely to be derived, or was derived, by the bankrupt during that period is or was greater or less than the amount of that income as assessed by the last preceding assessment in respect of that period; (b) the base income threshold amount increased or decreased after the making of the last preceding assessment in respect of that period and before the end of that period; (c) the trustee is satisfied that the number of the bankrupt’s dependants increased or decreased after the making of the last preceding assessment and before the end of that period;

the trustee is to make a fresh assessment of the income that is likely to be derived, or was derived, by the bankrupt during that period, of the actual income threshold amount that is [page 510] applicable in relation to the bankrupt when the assessment is made and of the contribution (if any) that the bankrupt is liable to pay in respect of that period. [subs (2) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 6, opn 23 June 2004]

(3) The powers of the trustee under subsection (2) may be exercised on the trustee’s own initiative or at the bankrupt’s request, but the trustee is not required to consider whether to exercise those powers at the bankrupt’s request unless the bankrupt satisfies the trustee that there are reasonable grounds for the trustee to do so. (4) As soon as practicable after the making of an assessment the trustee must give to the bankrupt written notice setting out particulars of the assessment and informing the bankrupt about the possibility of a variation under section 139T. [subs (4) am Act 131 of 2002 s 3 and Sch 1, opn 18 June 2003] SECTION 139W GENERALLY [82,113W.5] Notice of assessment There is provision in the Act requiring a trustee to provide a statement of reasons of an assessment under s 139W. The Notice of Determination referred to in s 139ZI refers specifically to “particulars” of the trustee’s determination under s 139ZI as to how a contribution is to be paid. However, as a decision of a trustee pursuant to s 139W is reviewable by the Administrative Appeals Tribunal, the trustee is required to provide a statement of reasons of that decision together with a statement of the bankrupt’s rights to have the decision reviewed in accordance with s 27A of the Administrative Appeals Tribunal Act 1975.

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[82,113WA] No time limit on making assessment 139WA (1) An assessment under section 139W (including a fresh assessment referred to in subsection 139W(2)) for a contribution assessment period may be made at any time, including:

(a) a time after the end of the contribution assessment period; or (b) a time after the bankrupt is discharged. (2) For the purpose of applying subsection (1), a reference in this Division to a bankrupt includes a reference to a former bankrupt. [s 139WA insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[82,113X] Basis of assessments 139X (1) In making an assessment of the income that is likely to be derived, or was derived, by a bankrupt during a contribution assessment period the trustee may have regard to any information provided by the bankrupt or any other information in the trustee’s possession. (2) If the trustee considers that any information provided by the bankrupt is or may be incorrect, the trustee may disregard that information and may make an assessment on the basis of what the trustee considers to be the correct information.

[82,113Y] Trustee may regard bankrupt as receiving reasonable remuneration 139Y (1) If: (a) the bankrupt is engaging or has engaged during a contribution assessment period in employment or other work or in activities that resemble employment or other work; and [page 511] (b) the bankrupt does not receive or did not receive any remuneration in respect of the employment, work or activities or receives or received remuneration that is less than the remuneration (in this subsection called the reasonable remuneration) that: (i) in the case of employment where an industrial instrument prescribes rates or minimum rates of salary or wages for the employment — might reasonably be expected to be or to have been received by the bankrupt in respect of the employment

by virtue of the industrial instrument; or (ii) in any other case — might reasonably be expected to be or to have been received by a person who engaged in similar employment, work or activities where there was no relationship or other connection between that person and the person for whom the employment, work or activities were carried out; then, for the purpose of making an assessment, the trustee may determine that the bankrupt receives or received the reasonable remuneration in respect of the employment, work or activities. [subs (1) am SLI 50 of 2006 reg 3 and Sch 32, opn 27 Mar 2006; Act 54 of 2009 s 3 and Sch 5[19], opn 1 July 2009]

(2) If: (a) the bankrupt enters or entered during a contribution assessment period into any transaction that might reasonably be expected to produce or to have produced income; and (b) the bankrupt does not derive or did not derive any income from the transaction or derives or derived income that is less than the income (in this subsection called the reasonable income) that might reasonably be expected to be or to have been derived if the transaction were or had been entered into at arm’s length; then, for the purpose of making an assessment, the trustee may determine that the bankrupt derives or derived the reasonable income from the transaction. SECTION 139Y GENERALLY [82,113Y.5] Reasonable expectation “Section 139Y(1)(b) draws a distinction between what might reasonably be expected to be or to have been received by ‘the bankrupt’ in subpara (i) and what might reasonably be expected to be or to have been received by ‘a person’ in subpara (ii). The second paragraph therefore does not necessarily refer to the bankrupt but refers to a hypothetical person engaged in similar employment, work or activities in an arm’s length situation. In my view, however, it is necessary to pay some regard to the particular circumstances of the bankrupt in order that the expectation can be seen to be reasonable”: Re Nelson and Inspector-General in Bankruptcy (1994) 35 ALD 113 at 117. For an application of the principles see Pattison v Schiffer [2007] FMCA 319; BC200701854 at [11]. It was held in Pattison v Schiffer, above, at [37] that an evidentiary onus is placed upon the applicant to show that the trustee acted “arbitrarily, or capriciously or in bad faith” and arbitrarily or capriciously in the manner described in Re Ellis; Ex parte Jefferson and Stevenson (FCA (Qld), Drummond J, QB1914/93, 17 February 1995, unreported) so as not to make use of a process available to him. [82,113Y.10] “derived from the bankrupt” Because s 139L is confined in its operation to income

“derived by the bankrupt” neither the bankrupt nor the trustee was entitled to the value of fringe benefits in the employment package when the bankrupt’s services were made available to a third party which paid the employer for the bankrupt’s services. See Re Stevenson and Inspector-General in Bankruptcy (1996) 45 ALD 775.

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[page 512]

[82,113Z] If bankrupt claims not to be in receipt of income 139Z (1) If a bankrupt: (a) does not provide information about whether he or she is likely to derive, or derived, income or a particular class of income during a contribution assessment period; or (b) claims not to be likely to derive, or not to have derived, any income or a particular class of income during a contribution assessment period; but the trustee has reasonable grounds for believing that the bankrupt is likely to derive, or derived, income, or income of that class, during that period, then, for the purpose of making an assessment, the trustee may determine that the bankrupt is likely to derive, or derived, income, or income of that class, during that period and may also determine the amount of that income. (2) Without limiting the matters that a trustee may take into account for the purpose of making an assessment as mentioned in subsection (1) in respect of a contribution assessment period, the trustee may have regard to any employment or other work or other income-producing activities that were engaged in by the bankrupt before that period and may determine whether the bankrupt is likely to engage, or to have engaged, in similar employment, work or other income-producing activities during that period.

Subdivision G — Review of assessment SUBDIVISION G GENERALLY [82,113Z.5] Generally Provision is made for the administrative review of the “decision of a trustee to make an assessment” by either the Inspector-General, whose decision may in turn be reviewed by the Administrative Appeals Tribunal, or directly by the Administrative Appeals Tribunal. There is no limitation period in which to make a request for review to the Inspector-General, however there is a limitation period for the lodging of an application for review with the tribunal: see generally s 29 of the Administrative Appeals Tribunal Act 1975. A review by either the Inspector-General or the tribunal is conducted de novo. While provision is made for the Inspector-General or the tribunal to review the “decision of a trustee

to make an assessment” (see ss 139ZA and 139ZF), to date the Inspector-General and the tribunal have been prepared to review the assessment under s 139W itself. [82,113Z.10] Review by the court Quaere the scope of the court’s power to review an assessment by the trustee. In Re Ellis; Ex parte Jefferson (FCA, Drummond J, QB 1914 of 1993, 17 February 1995, unreported) Drummond J left open the question of whether the court could, under s 178, review an income contribution assessment by a trustee. It was held, obiter dictum, that as “an appeal lies to the Federal Court, on questions of law only, from the AAT under s 44 of the Administrative Appeals Tribunal Act 1975; it is therefore unlikely that, having enacted Div 4B, the Legislature intended that there would co-exist with the power to review a trustee’s decision with respect to a contribution assessment vested in the Inspector-General and the AAT, power in the court to review the trustee’s decision under s 178 on both fact and law”. The review procedures in Subdiv G mirror those contained in Pt VII, Div 2 Subdiv C of the Act in relation to review of a trustee’s decision to file a notice of objection to discharge from bankruptcy. In Re Ansett; Ex parte Ansett v Pattison (1995) 56 FCR 526 it was held that the court had power under s 178 to review the decision of a trustee to file a notice of objection to discharge. While Olney J was not referred to the decision of Drummond J in Re Ellis; Ex parte Jefferson, above, he did not seek to limit the court’s powers under s 178. However, the court in Re Ansett; Ex parte Ansett v Pattison, above was only required to determine whether there was a notice of objection as a matter of law.

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[82,113ZA] Internal review of assessment 139ZA (1) The Inspector-General may review a decision of a trustee to make an assessment: (a) on the Inspector-General’s own initiative; or (b) if requested to do so by the bankrupt for reasons that appear to the Inspector-General to be sufficient to justify such a review. (2) The Inspector-General must review such a decision if requested to do so by the Ombudsman. (3) A request by the bankrupt to the Inspector-General for the review of such a decision must: (a) be in writing and lodged with the Official Receiver’s office not later than 60 days after the day on which the bankrupt is notified of the trustee’s assessment; and (b) be accompanied by:

(i) a copy of the notice of assessment; and (ii) any documents on which the bankrupt relies in support of the request. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) The Official Receiver must endorse on the request the date when it was lodged and must send the request and the accompanying documents to the Inspector-General as soon as practicable after they are received. (5) Within 60 days after the request is lodged, the Inspector-General must: (a) decide whether to review the decision; and (b) if the Inspector-General decides to review the decision — make his or her decision on the review. SECTION 139ZA GENERALLY [82,113ZA.5] When review is made Section (3)(a) restricts the Inspector-General from making a decision for a review if the decision is made more than 60 days after the day upon which the bankrupt was notified of the trustee’s assessment. No provision is made for enlargement of time except by “the Court” pursuant to s 33(1) of the statute. When the question deals with administrative review the Australian Administrative Appeals Tribunal may not enlarge or extend the time. In Soong v InspectorGeneral in Bankruptcy [2014]AATA 372; BC201481327 (Letcher QC, Senior Member) held that the decision on review is enlivened under the section and under s 139ZF meant “an ultimate or operative determination not a mere expression of opinion or a statement which can all the salt have no effect” (Ross v Costigan (1982) 59 FLR 184 at 197; 59 FLR 184 per Ellicott J). In the context of s 139ZF “refers to a refusal to make a review. It does not make sense that the tribunal should be able to review the inspector-general’s judgment about using her own initiative.” (at [15]). In the present case the conclusion was that the Inspector-General considered whether to form a review on her own initiative and concluded that she should not do so. Therefore no review was actually performed. See at [16]–[17].

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[82,113ZB] Inspector-General may authorise officer to act on his or her behalf 139ZB [s 139ZB rep Act 44 of 1996 s 3 and Sch 1]

[82,113ZC] Inspector-General may request further information 139ZC (1) For the purposes of the exercise of powers under this Subdivision, the Inspector-General may:

ask the bankrupt to provide such further information, either orally (a) or in writing, in support of the request as the Inspector-General specifies; and [page 514] (b) ask the trustee to provide such information, either orally or in writing, about the decision to make the assessment and the reasons for the decision as the Inspector-General specifies. (2) If any information is provided orally, the Inspector-General must record it in writing.

[82,113ZD] Decision on review 139ZD On a review of a decision, the Inspector-General has all the powers of the trustee and may either: (a) confirm the decision; or (b) set aside the decision and make a fresh assessment under subsection 139W(2). SECTION 139ZD GENERALLY [82,113ZD.5] Introduction Section 139W formerly provides that a fresh assessment must be conducted prior to a bankrupt’s discharge from bankruptcy so the Inspector-General’s power of review was limited to the period before the bankrupt is discharged: Re Medding and Paul Anthony Pattison (AAT(Fed), DP MacDonald, V 95-1095, 1255, 1265, 27 May 1996, unreported). The 1996 amendments to s 139W supersede this decision.

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[82,113ZE] Inspector-General to notify bankrupt and trustee of decision 139ZE (1) If the Inspector-General: (a) reviews a decision; or (b) refuses a request by a bankrupt for a review of a decision; the Inspector-General must give written notice to the bankrupt, to the trustee

and to the Official Receiver, of the Inspector-General’s decision on the review or on the request, as the case may be. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The notice must: (a) set out the decision; and (b) refer to the evidence or other material on which the decision was based; and (c) give the reasons for the decision. (3) In the case of a decision reviewing the trustee’s decision to make an assessment, the notice must also include a statement to the effect that, if the bankrupt or the trustee, is dissatisfied with the Inspector-General’s decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for review of the decision. (4) In the case of a decision refusing a request to review the trustee’s decision to make an assessment, the notice to the bankrupt must also include a statement to the effect that, if the bankrupt is dissatisfied with the InspectorGeneral’s decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for a review of the decision. (5) A contravention of subsection (3) or (4) in relation to a decision does not affect the validity of the decision. (6) If, within 60 days after lodgment of a request by a bankrupt for the review of the trustee’s decision to make an assessment, the Inspector-General has not given written notice to the bankrupt of his or her decision in accordance with subsection (1), the Inspector-General is taken to have reviewed the trustee’s decision and confirmed it under paragraph 139ZD(a). [page 515] (7) If the Inspector-General makes a fresh assessment, the InspectorGeneral must, as soon as practicable, give to the bankrupt written notice setting out particulars of the fresh assessment. (8) This Division, apart from this Subdivision, applies to an assessment made by the Inspector-General as if it had been made by the trustee under

subsection 139W(2). SECTION 139ZE GENERALLY [82,113ZE.5] Making the reviewable decision See [82,113ZA.5].

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[82,113ZF] Review of assessment decisions 139ZF An application may be made to the Administrative Appeals Tribunal for the review of: (a) a decision of the Inspector-General on the review of a decision by a trustee to make an assessment; or (b) a decision by the Inspector-General refusing a request to review a decision by a trustee to make an assessment. [s 139ZF subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

Subdivision H — When contribution payable

[82,113ZG] Payment of contribution 139ZG (1) Subject to subsection 139ZI(3), a contribution that a person is liable to pay under subsection 139P(1) or 139Q(1) is payable at such time as the trustee determines or, if the trustee permits the contribution to be paid by instalments, at such times and in such amounts as the trustee determines. (2) The liability of a person to pay a contribution under subsection 139P(1) or 139Q(1) is not affected by: (a) the making of an application by the person to the trustee under subsection 139T(1); or (b) the making by the person of a request to the Inspector-General for a review of the decision of the trustee to make the assessment that gave rise to the liability; or (c) the making of an application to the Administrative Appeals Tribunal for review of the decision of the Inspector-General. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 34 of 2006 s 3 and Sch 4[9], opn 3 May 2006]

(3) The total of any contributions or instalments that are not paid by the

bankrupt is recoverable by the trustee as a debt due to the estate of the bankrupt. [subs (3) subst Act 11 of 1993 s 3]

(4) The trustee may, in connection with proceedings to recover the debt: (a) sign a certificate setting out the nature and the amount of the debt; and (b) file the certificate in the court in which the proceedings have been instituted. [subs (4) subst Act 11 of 1993 s 3]

(5) In such proceedings, the certificate is prima facie evidence of the existence of the debt and the amount of the debt. [subs (5) subst Act 11 of 1993 s 3]

[82,113ZH] If excess contribution paid 139ZH (1) If: (a) a person has paid an amount in respect of the contribution that the person was assessed to be liable to pay in respect of a contribution assessment period; and [page 516] (b) as a result of a subsequent assessment: (i) the person is not liable to pay a contribution in respect of that period; or (ii) the amount referred to in paragraph (a) exceeds the amount of the contribution that the person is liable to pay in respect of that period; the person is not entitled to a refund of the amount paid or of the excess, as the case may be. (2) If a person has paid in respect of a contribution assessment period an amount that, because of a subsequent assessment made in respect of that period, the person was not liable to pay, the trustee is to apply that amount in or towards any contribution that the person is liable to pay in respect of a later contribution assessment period.

[82,113ZI] Notice of determinations 139ZI (1) If the trustee makes a determination under section 139ZG in respect of a person, the trustee must give to the person written notice setting out particulars of the determination. (2) A notice given to a person under subsection (1) may be contained in a notice of assessment (3) The time at which a payment is to be made by a person as a result of a determination made under section 139ZG must not be earlier than 14 days after notice in relation to the determination is given to the person under subsection (1) of this section.

Subdivision HA — Supervised account regime [Subdiv HA insrt Act 20 of 2005 s 3 and Sch 2, opn 18 Mar 2005]

[82,113ZIA] Objects 139ZIA The objects of this Subdivision are: (a) to improve the likelihood that a bankrupt will have sufficient money to pay contributions or instalments of contributions; and (b) to ensure that all monetary income received by the bankrupt is deposited to a single account (the supervised account); and (c) to enable the trustee to supervise withdrawals from the account.

[82,113ZIB] Definitions 139ZIB In this Subdivision: bankrupt includes a person who has been discharged from bankruptcy. bankrupt to whom the supervised account regime applies means a bankrupt in respect of whom a determination under subsection 139ZIC(1) is in force. constructive income receipt arrangement means an arrangement the effect of which is that income derived by a bankrupt is not actually received by the bankrupt because it is: (a) reinvested, accumulated or capitalised; or (b) dealt with on behalf of the bankrupt or as the bankrupt directs.

contribution means a contribution that a bankrupt is liable to pay under subsection 139P(1) or 139Q(1). engage in conduct means: (a) do an act; or (b) omit to perform an act. [page 517] non-monetary income receipt arrangement means an arrangement the effect of which is that income derived by a bankrupt is not actually received by the bankrupt in monetary form because it is derived in a non-monetary form. reviewable decision means a decision of the trustee of a bankrupt’s estate: (a) to make a subsection 139ZIC(1) determination; or (b) to refuse to revoke a subsection 139ZIC(1) determination; or (c) to specify a period in a supervised account notice for the purposes of subparagraph 139ZIE(1)(a)(ii); or (d) to refuse to specify a period in a supervised account notice for the purposes of subparagraph 139ZIE(1)(a)(ii); or (e) to specify requirements in a supervised account notice for the purposes of subparagraph 139ZIE(1)(a)(ix); or (f) to refuse to exercise the powers conferred by subsection 139ZIEA(1); or (g) to refuse to give a consent under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3); or (h) to vary a consent given under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3); or (i) to refuse to vary a consent given under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3); or (j) to revoke a consent given under subsection 139ZIG(3), 139ZIH(5), 139ZIHA(5) or 139ZII(3). supervised account, in relation to a bankrupt to whom the supervised

account regime applies, means an account maintained by the bankrupt in accordance with a supervised account notice that is in force in relation to the bankrupt. supervised account notice has the meaning given by subsection 139ZIE(1). withdraw, in relation to an account, includes: (a) transfer out of; and (b) draw a cheque on; and (c) do any other thing that results in a debit from. working day, in relation to a bankrupt, means a day that is not a Saturday, Sunday or a public holiday in the place where the bankrupt resides.

[82,113ZIC] Trustee may determine that the supervised account regime applies to the bankrupt 139ZIC (1) The trustee of a bankrupt’s estate may, by written notice given to the bankrupt, determine that the supervised account regime applies to the bankrupt. (2) The trustee must not make a determination under subsection (1) in relation to the bankrupt unless, at the time the determination is made: (a) the bankrupt is liable to pay a contribution; and (b) either: (i) if the trustee has made a determination under section 139ZG permitting the contribution to be paid by instalments — the bankrupt has not paid the whole of an instalment at or before the time when it became payable; or (ii) if the trustee has made a determination under section 139ZG requiring the bankrupt to pay the contribution at a specified time—the bankrupt has not paid the whole of the contribution at or before the time when it became payable. (3) A notice under subsection (1) must be in the approved form. [page 518]

(4) A notice under subsection (1) must be accompanied by: (a) a supervised account notice relating to the bankrupt concerned; and (b) a statement setting out: (i) the effect of sections 139ZIE to 139ZIT; and (ii) such other information (if any) as is specified in the regulations.

[82,113ZID] Revocation of determination 139ZID (1) If a determination is in force under subsection 139ZIC(1) in relation to a bankrupt, the trustee may, by written notice given to the bankrupt, revoke the determination. (2) The trustee must not revoke the determination unless the trustee is satisfied, having regard to: (a) the past payment record of the bankrupt; and (b) any other relevant matters; that the bankrupt will pay the whole of any current or future contributions or instalments of contributions at or before the time when they become payable. (3) The power conferred on the trustee by subsection (1) may be exercised: (a) on his or her own initiative; or (b) on the application of the bankrupt. (4) If, following the bankrupt’s application, the trustee refuses to revoke the determination, the trustee must give the bankrupt written notice of the refusal. (5) A notice under subsection (1) must be in the approved form.

[82,113ZIDA] When determination ceases to be in force 139ZIDA (1) Annulment If: (a) a determination is in force under subsection 139ZIC(1) in relation to a bankrupt; and (b) the bankruptcy is annulled; the determination ceases to be in force on the date of the annulment.

(2) Discharge — no liability to pay contributions If: (a) a determination is in force under subsection 139ZIC(1) in relation to a bankrupt; and (b) the bankrupt is discharged from the bankruptcy; and (c) at the time of the discharge, the bankrupt is not liable to pay a contribution; the determination ceases to be in force at the time of the discharge. (3) Discharge — continuing liability to pay contributions If: (a) a determination is in force under subsection 139ZIC(1) in relation to a bankrupt; and (b) the bankrupt is discharged from the bankruptcy; and (c) at the time of the discharge, the bankrupt is liable to pay a contribution; the determination ceases to be in force when the bankrupt is no longer liable to pay a contribution.

[82,113ZIE] Bankrupt must open and maintain supervised account 139ZIE (1) Supervised account notice For the purposes of this Subdivision, a supervised account notice is a written notice that is issued by the trustee of a bankrupt’s estate and that: (a) requires the bankrupt, within: (i) 10 working days after the notice is given to the bankrupt; or (ii) such longer period (if any) as is specified in the notice; [page 519] to open an account (a supervised account) that complies with the following requirements: (iii) the account is kept with an ADI; (iv) the account is kept in Australia; (v) the account is denominated in Australian currency;

(vi) the account is held solely in the name of the bankrupt; (vii) deposits may be made to, and withdrawals may be made from, the account; (viii)the account is designed not to have a debit balance; (ix) such other requirements (if any) as are specified in the notice; and (b) requires the bankrupt to inform the ADI, when opening the account, that the account is a supervised account; and (c) requires the bankrupt, after the account is opened, to maintain the account for so long as the notice is in force. (2) A supervised account notice must be in the approved form. (3) Compliance with supervised account notice A bankrupt to whom the supervised account regime applies must comply with a supervised account notice in force in relation to the bankrupt. (4) When supervised account notice ceases to be in force A supervised account notice relating to a bankrupt ceases to be in force if the bankrupt ceases to be a bankrupt to whom the supervised account regime applies. Note: A supervised account notice may be revoked under subsection 139ZIEA(1).

(5) Trustee to be notified of account details A bankrupt to whom the supervised account regime applies must, within 2 working days after opening a supervised account, give a written notice to the trustee setting out the following information about the supervised account: (a) the name of the ADI concerned; (b) the name in which the account is held; (c) the account number; (d) the BSB number concerned. (6) Offence A person is guilty of an offence if: (a) the person is subject to a requirement under subsection (3) or (5); and (b) the person engages in conduct; and (c) the person’s conduct breaches the requirement. Penalty for contravention of this subsection: Imprisonment for 6 months.

[82,113ZIEA] New supervised account

139ZIEA (1) If a bankrupt is a bankrupt to whom the supervised account regime applies, the trustee may: (a) by written notice given to the bankrupt, revoke a supervised account notice relating to the bankrupt; and (b) issue a fresh supervised account notice relating to the bankrupt, and give the fresh notice to the bankrupt; and (c) by written notice given to the bankrupt, require the bankrupt, immediately after the account is opened in accordance with the fresh notice, to transfer: (i) the balance (if any) of the account maintained in accordance with the revoked notice; to: (ii) the account opened in accordance with the fresh notice. [page 520] (2) The revocation under paragraph (1)(a) of the supervised account notice takes effect when the bankrupt opens the account in accordance with the fresh supervised account notice. (3) Notices under paragraphs (1)(a) and (c) may be set out in the same document. (4) The powers conferred on the trustee by subsection (1) may be exercised: (a) on his or her own initiative; or (b) on the application of the bankrupt. (5) If, following the bankrupt’s application, the trustee refuses to exercise the powers conferred by subsection (1), the trustee must give the bankrupt written notice of the refusal. (6) Offence A person is guilty of an offence if: (a) the person is subject to a requirement under paragraph (1)(c); and (b) the person engages in conduct; and (c) the person’s conduct breaches the requirement. Penalty for contravention of this subsection: Imprisonment for 6 months.

[82,113ZIF] Bankrupt’s monetary income to be deposited to supervised account 139ZIF (1) A bankrupt to whom the supervised account regime applies must ensure that all monetary income actually received by the bankrupt after the opening of the supervised account is deposited to the account: (a) if the income is received in the form of cash or cheque — within 5 working days of its receipt; or (b) in any other case — upon its receipt. (2) Cash refunds For the purposes of subsection (1), if: (a) the bankrupt receives an amount of income in the form of cash; and (b) before the paragraph (a) amount is deposited to the supervised account, the bankrupt uses a part of that amount to make a refund; the amount that the bankrupt must deposit to the supervised account is the paragraph (a) amount reduced by the part used as mentioned in paragraph (b). (3) For the purposes of subsection (1), if: (a) the bankrupt receives an amount of income in the form of cash; and (b) before the paragraph (a) amount is deposited to the supervised account, the bankrupt uses the whole of that amount to make a refund; the bankrupt is taken not to have received the paragraph (a) amount. (4) Offence A person is guilty of an offence if: (a) the person is subject to a requirement under subsection (1); and (b) the person engages in conduct; and (c) the person’s conduct breaches the requirement. Penalty for contravention of this subsection: Imprisonment for 12 months.

[82,113ZIG] Trustee to supervise withdrawals from supervised account 139ZIG (1) General prohibition on withdrawals A bankrupt to whom the supervised account regime applies must not: (a) make a withdrawal from the supervised account; or (b) authorise the making of a withdrawal from the supervised account.

[page 521] (2) Exceptions Subsection (1) does not apply if the withdrawal is made: (a) in accordance with the consent of the trustee under subsection (3); or (b) to pay a contribution or an instalment of a contribution; or (c) to transfer an amount as required by a notice under paragraph 139ZIEA(1)(c); or (d) to make a refund; or (e) to reverse a credit previously made to the account where the credit arose from an error or the dishonour of a cheque; or (f) to discharge any of the bankrupt’s tax liabilities (within the meaning of the Taxation Administration Act 1953); or (g) to discharge the bankrupt’s liability to pay a tax (however described) imposed by or under a law of the Commonwealth, a State or a Territory; or (h) to recover from the bankrupt an amount equal to an amount of tax (however described) that the ADI concerned has paid or is liable to pay in connection with the operation of the account; or (i) to discharge a liability of the bankrupt to pay a fee or charge in connection with the operation of the account. (3) Trustee may consent to withdrawals The trustee may, by written notice given to the bankrupt, consent to any of the following withdrawals from the supervised account: (a) a specified withdrawal; (b) withdrawals included in a specified class of withdrawals; (c) withdrawals up to a daily, weekly, fortnightly or monthly limit ascertained in accordance with the notice. (4) The trustee may, by written notice given to the bankrupt, vary or revoke a consent. (5) The powers conferred on the trustee by subsections (3) and (4) may be exercised: (a) on his or her own initiative; or

(b) on the application of the bankrupt. (6) If, following the bankrupt’s application, the trustee refuses to exercise a power conferred by subsection (3) or (4), the trustee must give the bankrupt written notice of the refusal. (7) Offence A person is guilty of an offence if: (a) the person is subject to a requirement under subsection (1); and (b) the person engages in conduct; and (c) the person’s conduct breaches the requirement. Penalty: Imprisonment for 12 months. (8) Garnishee powers not affected This section does not affect the exercise of powers conferred by: (a) section 139ZL of this Act; or (b) section 260-5 in Schedule 1 to the Taxation Administration Act 1953; or (c) a similar provision in: (i) any other law of the Commonwealth; or (ii) a law of a State or a Territory.

[82,113ZIH] Constructive income receipt arrangements 139ZIH (1) Bankrupt not to enter into new arrangements A bankrupt to whom the supervised account regime applies must not enter into a constructive income receipt arrangement. (2) Subsection (1) does not apply if the bankrupt enters into the constructive income receipt arrangement in accordance with the consent of the trustee under subsection (5). [page 522] (3) Bankrupt not to participate in existing arrangements If a bankrupt was participating in a constructive income receipt arrangement immediately before becoming a bankrupt to whom the supervised account regime applies,

the bankrupt must, as soon as practicable after becoming such a bankrupt, cease to participate in the arrangement. (4) Subsection (3) does not apply if the bankrupt continues to participate in the constructive income receipt arrangement in accordance with the consent of the trustee under subsection (5). (5) Consent The trustee may, by written notice given to the bankrupt: (a) consent to the bankrupt entering into: (i) a specified constructive income receipt arrangement; or (ii) constructive income receipt arrangements included in a specified class of constructive income receipt arrangements; or (b) consent to the bankrupt continuing to participate in: (i) a specified constructive income receipt arrangement; or (ii) constructive income receipt arrangements included in a specified class of constructive income receipt arrangements. (6) The trustee may, by written notice given to the bankrupt, vary or revoke a consent. (7) The powers conferred on the trustee by subsections (5) and (6) may be exercised: (a) on his or her own initiative; or (b) on the application of the bankrupt. (8) If, following the bankrupt’s application, the trustee refuses to exercise a power conferred by subsection (5) or (6), the trustee must give the bankrupt written notice of the refusal. (9) Offence A person is guilty of an offence if: (a) the person is subject to a requirement under subsection (1) or (3); and (b) the person engages in conduct; and (c) the person’s conduct breaches the requirement. Penalty for contravention of this subsection: Imprisonment for 12 months.

[82,113ZIHA] Non-monetary income receipt arrangements 139ZIHA (1) Bankrupt not to enter into new arrangements A bankrupt

to whom the supervised account regime applies must not enter into a nonmonetary income receipt arrangement. (2) Subsection (1) does not apply if the bankrupt enters into the nonmonetary income receipt arrangement in accordance with the consent of the trustee under subsection (5). (3) Bankrupt not to participate in existing arrangements If a bankrupt was participating in a non-monetary income receipt arrangement immediately before becoming a bankrupt to whom the supervised account regime applies, the bankrupt must, as soon as practicable after becoming such a bankrupt, cease to participate in the arrangement. (4) Subsection (3) does not apply if the bankrupt continues to participate in the non-monetary income receipt arrangement in accordance with the consent of the trustee under subsection (5). (5) Consent The trustee may, by written notice given to the bankrupt: (a) consent to the bankrupt entering into: (i) a specified non-monetary income receipt arrangement; or (ii) non-monetary income receipt arrangements included in a specified class of non-monetary income receipt arrangements; or [page 523] (b) consent to the bankrupt continuing to participate in: (i) a specified non-monetary income receipt arrangement; or (ii) non-monetary income receipt arrangements included in a specified class of non-monetary income receipt arrangements. (6) The trustee may, by written notice given to the bankrupt, vary or revoke a consent. (7) The powers conferred on the trustee by subsections (5) and (6) may be exercised: (a) on his or her own initiative; or (b) on the application of the bankrupt. (8) If, following the bankrupt’s application, the trustee refuses to exercise a

power conferred by subsection (5) or (6), the trustee must give the bankrupt written notice of the refusal. (9) Offence A person is guilty of an offence if: (a) the person is subject to a requirement under subsection (1) or (3); and (b) the person engages in conduct; and (c) the person’s conduct breaches the requirement. Penalty for contravention of this subsection: Imprisonment for 12 months.

[82,113ZII] Cash income 139ZII (1) A bankrupt to whom the supervised account regime applies must not receive income in the form of cash. (2) Subsection (1) does not apply if the income was received in accordance with the consent of the trustee under subsection (3). (3) Consent The trustee may, by written notice given to the bankrupt, consent to the bankrupt receiving in the form of cash: (a) a specified item of income; or (b) items of income included in a specified class of items of income. (4) The trustee may, by written notice given to the bankrupt, vary or revoke a consent. (5) The powers conferred on the trustee by subsections (3) and (4) may be exercised: (a) on his or her own initiative; or (b) on the application of the bankrupt. (6) If, following the bankrupt’s application, the trustee refuses to exercise a power conferred by subsection (3) or (4), the trustee must give the bankrupt written notice of the refusal. (7) Offence A person is guilty of an offence if: (a) the person is subject to a requirement under subsection (1); and (b) the person engages in conduct; and (c) the person’s conduct breaches the requirement. Penalty for contravention of this subsection: Imprisonment for 12 months.

[82,113ZIIA] Keeping of books 139ZIIA If: (a) a person is a bankrupt to whom the supervised account regime applies; and (b) the person has been discharged from the bankruptcy; section 277A applies in relation to the person as if: (c) the person were a bankrupt within the meaning of that section; and (d) the person had been discharged from the bankruptcy when the person ceases to be a bankrupt to whom the supervised account regime applies. [page 524]

[82,113ZIJ] Injunctions 139ZIJ (1) Restraining injunctions If a bankrupt has engaged, is engaging or is proposing to engage, in any conduct in contravention of this Subdivision, the Court may, on the application of the trustee, grant an injunction: (a) restraining the bankrupt from engaging in the conduct; and (b) if, in the Court’s opinion, it is desirable to do so — requiring the bankrupt to do something. (2) Performance injunctions If: (a) a bankrupt has refused or failed, or is refusing or failing, or is proposing to refuse or fail, to do an act or thing; and (b) the refusal or failure was, is or would be a contravention of this Subdivision; the Court may, on the application of the trustee, grant an injunction requiring the bankrupt to do that act or thing.

[82,113ZIK] Interim injunctions 139ZIK (1) Grant of interim injunction If an application is made to the Court for an injunction under section 139ZIJ, the Court may, before

considering the application, grant an interim injunction restraining a bankrupt from engaging in conduct of a kind referred to in that section. (2) No undertakings as to damages The Court is not to require an applicant for an injunction under section 139ZIJ, as a condition of granting an interim injunction, to give any undertakings as to damages.

[82,113ZIL] Discharge etc of injunctions 139ZIL The Court may discharge or vary an injunction granted under this Subdivision.

[82,113ZIM] Certain limits on granting injunctions not to apply 139ZIM (1) Restraining injunctions The power of the Court under this Subdivision to grant an injunction restraining a bankrupt from engaging in conduct of a particular kind may be exercised: (a) if the Court is satisfied that the bankrupt has engaged in conduct of that kind — whether or not it appears to the Court that the bankrupt intends to engage again, or to continue to engage, in conduct of that kind; or (b) if it appears to the Court that, if an injunction is not granted, it is likely that the bankrupt will engage in conduct of that kind — whether or not the bankrupt has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage to any person if the bankrupt engages in conduct of that kind. (2) Performance injunctions The power of the Court to grant an injunction requiring a bankrupt to do an act or thing may be exercised: (a) if the Court is satisfied that the bankrupt has refused or failed to do that act or thing — whether or not it appears to the Court that the bankrupt intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; or (b) if it appears to the Court that, if an injunction is not granted, it is likely that the bankrupt will refuse or fail to do that act or thing — whether or not the bankrupt has previously refused or failed to do

that act or thing and whether or not there is an imminent danger of substantial damage to any person if the bankrupt refuses or fails to do that act or thing. [page 525]

[82,113ZIN] Other powers of the Court unaffected 139ZIN The powers conferred on the Court under this Subdivision are in addition to, and not instead of, any other powers of the Court, whether conferred by this Act or otherwise.

[82,113ZIO] Inspector-General may review trustee’s decision 139ZIO (1) Reviewable decisions The Inspector-General may review a reviewable decision: (a) on the Inspector-General’s own initiative; or (b) if requested to do so by the bankrupt for reasons that appear to the Inspector-General to be sufficient to justify doing so. (2) The Inspector-General must review a reviewable decision if requested to do so by the Ombudsman. (3) Request by bankrupt A request by the bankrupt to the InspectorGeneral for the review of a reviewable decision must: (a) be in writing and lodged with the Official Receiver’s office not later than 60 days after the day on which the decision first came to the notice of the bankrupt; and (b) be accompanied by: (i) a copy of any relevant documents issued or given by the trustee under this Subdivision; and (ii) any other documents on which the bankrupt relies in support of the request. (4) The Official Receiver must: (a) endorse on the request the date when it was lodged; and

(b) send the request and the accompanying documents to the InspectorGeneral as soon as practicable after they are received. (5) Time limit for review Within 60 days after the request is lodged, the Inspector-General must: (a) decide whether to review the decision; and (b) if the Inspector-General decides to review the decision — make his or her decision on the review.

[82,113ZIP] Inspector-General may request further information 139ZIP (1) For the purposes of the exercise of powers in relation to a review, or a request for a review, of a reviewable decision, the InspectorGeneral may: (a) ask the bankrupt to provide such further relevant information, either orally or in writing, as the Inspector-General specifies; and (b) ask the trustee to provide such information, either orally or in writing, about the decision and the reasons for the decision as the Inspector-General specifies. (2) If any information is provided orally, the Inspector-General must record it in writing.

[82,113ZIR] Inspector-General’s decision on review 139ZIR (1) On a review of a reviewable decision, the Inspector-General has all the powers of the trustee and may: (a) confirm the decision; or (b) vary the decision; or (c) set aside the decision; or [page 526] (d) set aside the decision and make a decision in substitution for the decision so set aside.

(2) Application of this Subdivision to Inspector-General’s decision This Subdivision (apart from sections 139ZIO to 139ZIT), applies to a decision made by the Inspector-General as if it had been made by the trustee under this Subdivision.

[82,113ZIS] Inspector-General to notify bankrupt and trustee of decision 139ZIS (1) If the Inspector-General: (a) reviews a reviewable decision; or (b) refuses a request by a bankrupt for a review of a reviewable decision; the Inspector-General must give written notice to: (c) the bankrupt; and (d) the trustee; and (e) the Official Receiver; of the Inspector-General’s decision on the review or on the request, as the case may be. (2) The notice must: (a) set out the decision; and (b) give the reasons for the decision. (3) Notification of right of review by AAT In the case of a decision on the review of a reviewable decision, the notice must also include a statement to the effect that, if the bankrupt or the trustee is dissatisfied with the Inspector-General’s decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for review of the decision. (4) In the case of a decision refusing a request to review a reviewable decision, the notice to the bankrupt must also include a statement to the effect that, if the bankrupt is dissatisfied with the Inspector-General’s decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for a review of the decision. (5) A breach of subsection (3) or (4) in relation to a decision does not affect the validity of the decision.

(6) Inspector-General taken to have reviewed and confirmed decision If, within 60 days after lodgment of a request by a bankrupt for the review of a reviewable decision, the Inspector-General has not given written notice to the bankrupt of his or her decision in accordance with subsection (1), the Inspector-General is taken to have reviewed the trustee’s decision and confirmed it under paragraph 139ZIR(1)(a).

[82,113ZIT] AAT review of decisions 139ZIT An application may be made to the Administrative Appeals Tribunal for the review of: (a) a decision of the Inspector-General on the review of a reviewable decision; or (b) a decision by the Inspector-General refusing a request to review a reviewable decision.

Subdivision I — Collection of money or property by Official Receiver from person other than the bankrupt SUBDIVISION I GENERALLY [82,113ZJ.5] Generally “I regard the subdivision as having a similar purpose to s 218 of the Income Tax Act, namely to confer exceptional powers on the Official Receiver to facilitate the collection of contributions in cases where a bankrupt might otherwise escape payment”: Re Bond; Ex parte Bond v Caddy (No 1) (1994) 11 WAR 330; 115 FLR 152.

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[82,113ZJ] Definition 139ZJ In this Subdivision: bankrupt includes a person who has been discharged from bankruptcy.

[82,113ZK] Persons to whom Subdivision applies 139ZK (1) This Subdivision applies to a person:

(a) from whom any money is due or accruing, or may become due, to a bankrupt; or (b) who holds, or may subsequently hold, money for or on account of a bankrupt; or (c) who holds, or may subsequently hold, money on account of some other person for payment to or on behalf of a bankrupt; or (d) who has authority from some other person to pay money to or on behalf of a bankrupt; or (e) who is liable to pay money or transfer property wholly or principally in consideration of personal services supplied by a bankrupt after the commencement of the bankruptcy, whether the services were supplied to the first-mentioned person or to some other person; or (f) who has received money or property wholly or principally in consideration of personal services supplied by a bankrupt after the commencement of the bankruptcy, whether the services were supplied to the first-mentioned person or to some other person. (2) In subsection (1): personal services, in relation to a bankrupt, means personal services as defined by subsection 5(1), whether or not supplied for the payment of money, or the provision of other consideration, to the bankrupt. (3) If, apart from this subsection, money would not be due, or would not be repayable on demand, to a person, or the obligation to transfer property to a person would not arise, unless a condition were fulfilled, then, for the purposes of this section, the money is taken to be due or to be repayable on demand, or the obligation to transfer the property to the person is taken to arise, as the case may be, even though the condition has not been fulfilled. SECTION 139ZK GENERALLY [82,113ZK.5] Money “In my view ‘money’ has a broad and non-technical meaning in these provisions and the prospective operation of s 139ZK(1)(a) to (c) has significance in the interpretation of s 139M. I would adopt with respect what von Doussa J said of s 218 of the Income Tax Assessment Act in Re Edelsten; DCT (NSW) v Donnelly (1989) 20 ATR 1331 at 1339: ‘Until identifiable property comes into existence there is no subject matter in respect of which the assignment can operate. Likewise, in the case of a prospective notice given under s 218, until there is an identifiable sum of money owing to the taxpayer by the third party the conditions of the section are not met. It is the coming into existence of the identifiable debt which crystallises the obligation on the third party to pay to the Commissioner the ‘money’ referred to in s 218(1) and provides the measure of the obligation which is imposed by the

notice. If for any reason circumstances do not arise after the giving of the notice where ‘money’ answering the description in s 218(1) comes into existence, no obligation is ever imposed on the third party to make any payment to the Commissioner. Where ‘money’ does come into existence later, only at the point in time when it does so is an obligation imposed on the third party.’” See Re Bond; Ex parte Bond v Caddy (No 1) (1994) 11 WAR 330; 115 FLR 152; Re Bond; Ex parte Bond v Caddy (No 2) (1994) 11 WAR 345.

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[82,113ZL] Official Receiver may require persons to make payments 139ZL (1) If a bankrupt is liable to pay to the trustee a contribution under section 139P or 139Q, the Official Receiver: (a) if the Official Trustee is the trustee — on the initiative of the Official Receiver; or (b) if a registered trustee is the trustee — on application by the trustee; may require a person to whom this Subdivision applies, by written notice given to the person, to make a payment or payments to the trustee in accordance with this section in or towards the discharge of the liability of the bankrupt to make the contribution. (2) The notice must set out the facts and circumstances, and in particular must specify the money or property, because of which the Official Receiver considers that this Subdivision applies to the person to whom the notice is given. (3) The notice may either: (a) require payment of so much of the money, or of the value of the property, as does not exceed the amount, or the total of the amounts, of the contribution that the bankrupt is liable to pay; or (b) in the case of a person who is liable to pay money to or on behalf of the bankrupt, require the person, out of each payment that the person becomes liable from time to time to make, to pay such amount as is set out in the notice until the liability of the bankrupt to pay the contribution has been discharged.

(4) The notice may either: (a) require a payment to be made immediately the money becomes due or is held, the authority becomes exercisable, the liability arises or the money or property is received, as the case requires; or (b) require a payment to be made at a time or within a period set out in the notice, not being a time that occurs, or a period that commences, before the money becomes due or is held, the authority becomes exercisable, the liability arises or the money or property is received, as the case requires. (5) After the Official Receiver has given a notice to a person under subsection (1), the Official Receiver may at any time, by a further notice given to the person, revoke or amend the first-mentioned notice. (6) If the Official Receiver gives a notice under this section, the Official Receiver must send a copy of the notice to the bankrupt and, if a registered trustee is the trustee, to the trustee. (7) A notice to be given under this section to the Commonwealth, a State or a Territory, or to an authority of the Commonwealth, of a State or of a Territory, is taken to be duly given if it is given to a person who, by any law, regulation, appointment or authority, has the function of paying, or in fact pays, money on behalf of a Department of the Commonwealth, of that State or of that Territory, or on behalf of that authority, as the case may be. (8) If a person is required by a notice under this section to pay to the trustee the value of any property, the requirement is taken to be complied with if the property is transferred to the trustee. (9) A person making a payment or transferring property in accordance with this section is taken to have been acting under the authority of the bankrupt and of all other persons concerned and is entitled to be indemnified out of the estate of the bankrupt in respect of the payment or transfer. (10) An amount payable by a person to the trustee under this section is recoverable by the trustee as a debt by action against the person in a court of competent jurisdiction. [page 529]

SECTION 139ZL GENERALLY [82,113ZL.5] Set out the facts and circumstances “… an allegation which effectively does no more than assert as a factual conclusion one or other of the states of affairs set forth in s 139ZK(1) does not comply with s 139ZL(2)”: Re Bond; Ex parte Bond v Caddy (No 1) (1994) 11 WAR 330; 115 FLR 152.

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[82,113ZM] Power of Court to set aside notice 139ZM (1) If the Court, on application by a person to whom a notice has been given under section 139ZL or by any other interested person, is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court may make an order setting aside the notice. (2) A notice that has been set aside is taken not to have been given. SECTION 139ZM GENERALLY [82,113ZM.5] Generally “In my opinion the notice is intended to be an efficient administrative method of collection of an income contribution due from but unpaid by a bankrupt and s 139ZM confines the Court to a consideration of the allegations which it contains. The only application before me is made pursuant to the section and in my opinion it does not permit consideration of whether the notices as drawn are within the power given by the subdivision, or whether there are other respects in which either service of the notices or their effect may be challenged or reviewed, or their validity in the event that some parts of them may not be well founded.”: Re Bond; Ex parte Bond v Caddy (No 1) (1994) 11 WAR 330; 115 FLR 152. The court’s attitude in Bond’s case to the provisions of s 139ZM should be compared to the comments of Olney J in Re Lucera; Ex parte Official Trustee in Bankruptcy (1994) 53 FCR 329 in relation to similar provisions in s 139ZS: see [82,113ZS.5]. [82,113ZM.10] Proper party to application In Re Bond; Ex parte Bond v Caddy (No 1) (1994) 11 WAR 330; 115 FLR 152 it was held that the Official Receiver together with the trustee were proper parties to an application under s 139ZM; compare Worrell v Power & Power (1993) 46 FCR 214; 118 ALR 237 and see [82,113ZS.10].

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[82,113ZN] Charge over property 139ZN (1) If a notice under section 139ZL is given to a person to whom this Subdivision applies because the person is liable to transfer, or has received, any property as mentioned in paragraph 139ZK(1)(e) or (f): (a) the property is charged with the liability of the person to make

payments as required by the notice; and (b) if the person makes the payments or transfers the property to the trustee, the property ceases to be subject to the charge. (2) Subject to subsection (3), a charge under subsection (1) has priority over any existing or subsequent mortgage, lien, charge or other encumbrance over the property in favour of an associated entity of the bankrupt, and has that priority despite any other law of the Commonwealth or any law of a State or Territory. (3) A charge under subsection (1) does not have priority over a mortgage, lien, charge or other encumbrance in favour of an associated entity of the bankrupt if that entity satisfies the Court that that mortgage, lien, charge or other encumbrance arose from a transaction that was entered into at arm’s length and for valuable and adequate consideration provided by that entity. [page 530] (4) If any property being land is subject to a charge under subsection (1), the Official Receiver may certify by signed writing that the land is subject to a charge under that subsection and may lodge the certificate with the Registrar-General, Registrar of Titles or other proper officer of the State or Territory in which the land is situated. (5) The officer with whom the certificate is lodged may register the charge as nearly as practicable in the way in which mortgages over land are registered under the law in force in the State or Territory in which the land is situated. (6) The trustee has power to sell any property over which a charge exists under subsection (1) and, if the property is so sold, then, subject to any charges that have priority over the first-mentioned charge, the proceeds of the sale are, to the extent of the charge, to be applied in or towards the discharge of the liability to make a payment or payments to the trustee of the person to whom the notice was given.

[82,113ZO] Failure to comply with notice 139ZO (1) A person who refuses or fails to comply with a notice under

section 139ZL is guilty of an offence punishable upon conviction by imprisonment for a period not exceeding 6 months. (2) If a person is convicted of an offence against subsection (1) in relation to the refusal or failure of the convicted person or another person to comply with a notice under section 139ZL, the court that convicted the person may, in addition to imposing a penalty on the convicted person, order that person to pay to the trustee an amount not exceeding the amount, or the total of the amounts, that the convicted person or the other person, as the case may be, refused or failed to pay to the trustee in accordance with the notice.

[82,113ZP] Employer not to dismiss or injure bankrupt because of giving of notice 139ZP (1) If a notice under section 139ZL is given to the employer of the bankrupt, the employer must not dismiss the bankrupt, injure the bankrupt in his or her employment, or alter the position of the bankrupt to the bankrupt’s prejudice, because of the giving of the notice. Penalty: Imprisonment for 6 months. (2) In a prosecution for an offence against subsection (1), it is not necessary for the prosecutor to prove that the defendant’s reason for the action charged was the giving of the notice but it is a defence to the prosecution if the defendant proves that the action was not taken because of the giving of the notice. (3) If an employer is convicted of an offence against subsection (1) constituted by dismissing a bankrupt, the court that convicted the employer may order the employer: (a) to reinstate the bankrupt to the position that the bankrupt occupied immediately before the dismissal or a position no less favourable than the first-mentioned position; and (b) to pay to the bankrupt the whole or part of the wages lost by the bankrupt because of the dismissal.

Subdivision J — Collection of money or property by Official Receiver from party to transaction that is void against the trustee

[82,113ZQ] Official Receiver may require payment 139ZQ (1) If a person has received any money or property as a result of a transaction that is void against the trustee of a bankrupt under Division 3, the Official Receiver: (a) if the Official Trustee is the trustee — on the initiative of the Official Receiver; or (b) if a registered trustee is the trustee — on application by the trustee; [page 531] may require the person, by written notice given to the person, to pay to the trustee an amount equal to whichever of the following is applicable: (c) if: (i) the transaction is void against the trustee under section 128B or 128C; and (ii) the transaction is by way of a contribution to an eligible superannuation plan for the benefit of a person (the beneficiary) who may or may not be the bankrupt; and (iii) the beneficiary is a member of the eligible superannuation plan; whichever is the lesser of the following: (iv) the money or the value of the property received; (v) the beneficiary’s withdrawal benefit in relation to the eligible superannuation plan; (d) in any other case — the money or the value of the property received. (2) The notice must set out the facts and circumstances because of which the Official Receiver considers that the transaction is void against the trustee. (3) The notice may: (a) require the amount to be paid at a time or within a period set out in the notice; or (b) require the amount to be paid at such times, and in such instalments, as are set out in the notice.

(4) After the Official Receiver has given a notice to a person under subsection (1), the Official Receiver may at any time, by a further notice given to the person, revoke or amend the first-mentioned notice. (5) If the Official Receiver gives a notice under this section, the Official Receiver must send a copy of the notice to the bankrupt and, if a registered trustee is the trustee, to the trustee. (6) A notice to be given under this section to the Commonwealth, a State or a Territory, or to an authority of the Commonwealth, of a State or of a Territory, is taken to be duly given if it is given to a person who, by any law, regulation, appointment or authority, has the function of paying, or in fact pays, money on behalf of a Department of the Commonwealth, of that State or of that Territory, or on behalf of the authority, as the case may be. (7) If a person is required by a notice under this section to pay to the trustee the value of any property, the requirement is taken to be complied with if the property is transferred to the trustee. (8) An amount payable by a person to the trustee under this section is recoverable by the trustee as a debt by action against the person in a court of competent jurisdiction. (9) For the purposes of subparagraph (1)(c)(ii), disregard a benefit that is payable in the event of the death of a person. (10) In this section: contribution has the same meaning as in Subdivision B of Division 3. eligible superannuation plan has the same meaning as in Subdivision B of Division 3. member of an eligible superannuation plan has the same meaning as in Subdivision B of Division 3. withdrawal benefit has the same meaning as in Subdivision B of Division 3. [page 532] SECTION 139ZQ GENERALLY [82,113ZQ.5] Generally Section 139ZQ introduced an administrative mechanism for the recovery of dispositions of property void as against a trustee in bankruptcy. The practical effect of such notices

however has attracted an amount of judicial criticism. In Re Pearson; Ex parte Wansley (1993) 46 FCR 55 at 59; 17 Fam LR 224 Wilcox J warned: “There seems to be a danger that the new procedure will lure parties into litigation about formal matters, irrelevant to the issue they really need to have determined.” See also Re Lucera; Ex parte Official Trustee in Bankruptcy (1994) 53 FCR 329. Graham J in Re Rose; Godfrey v Whitton [2006] FCA 823; BC200604876 considered the interpretation of this section, saying, at [24], that: [24] … It is clear that the section was inserted by the legislature with a view to providing an administrative shortcut whereby the necessity for protracted proceedings under ss 120, 121 and 122 of the Act could be circumvented. His Honour said that in the case before him (which could be characterised, in the terms expressed by the Full Court in Gersten v Minister for Immigration and Multicultural Affairs [2001] FCA 260; BC200100995 at [19], that: “… if a party who has no defence to a claim of right, refuses to acknowledge that right and … obstinately … obliges the claimant to commence proceedings to enforce that right, that circumstance may attract the exercise of a discretion to award indemnity costs against that party …”) that costs might be awarded, though his Honour declined to award indemnity costs against the Official Trustee. [82,113ZQ.10] How it works: charges and valuations In Sutherland v Vale [2007] FMCA 1617; BC200708594, Lloyd-Jones FM described the machinery as it has evolved in the last 10 years: [45] The section 139ZQ notice acts as a charge. That charge remains in place either until it is complied with or the notice is set aside. … [49]A s 139ZQ notice may be set aside if it fails to establish that the value of the property claimed is correct: Re McInnes; McInnes v Official Receiver in Bankruptcy, No NB23 of 1999 FED No 882/94 Bankruptcy (unreported) per Einfield J; Re Kuch; Ex parte; Kuch v Official Trustee in Bankruptcy, No VB2754 of 1992 FED No 955/95 (unreported) per Jenkinson J. The notice must not only carefully set out the value of the property but also state the basis for the valuation. In this matter, the valuation issue is central to challenging the s 139ZQ notice. … [62] In support of the view that the value in the notice was not correct, I refer to the observations of Drummond J in Re Aley at [300]: I am reluctant to read s 139ZR of the Act as making a notice under s 139ZQ of the Act effective to charge property owned by the recipient of the notice with liability to pay the figure asserted in the notice as the value of the transferred property in contrast to the true value of the property at the date of receipt. S 139ZR(1) of the Act charges the property “with the liability of the person to make payments to the trustee as required by the notice”. Under s 139ZQ(1) of the Act, all that the notice can require by way of payment to the trustee is payment of “an amount equal to …. the value of the property received”. It is that, not for example the amount stated in the notice, that is to be paid. S 139ZQ(2) of the Act does not require any information as to how the figure demanded by the notice was arrived at to be set out in the notice. The figure stated in the notice as the value of the property received from the bankrupt is not given by the Act any evidentiary force. A notice issued in reliance on s 139ZQ is, in my opinion, only effective to give rise to a debt enforceable under s 139ZQ(8) of the Act and a charge within s 139ZR of the Act if the amount demanded by the notice is, in fact, equal to the value of the property at the relevant time. Such an interpretation should not create any significant difficulty since the concept of the value of property at a particular time will generally involve an imprecise rather than an exact assessment of worth.

[page 533] The Official Receiver could not properly issue such a notice unless he had available to him information identifying the value of the property at the relevant time; if a notice is challenged, the Official Receiver and the trustee would have the onus of proving that the amount demanded by the notice was an amount equal to the value of the property in question. In Lin v Official Trustee in Bankruptcy (No 1) (2001) 187 ALR 220; [2001] FMCA 106 at [12]–[14] Raphael FM summarised the effect of the section, particularly in relation to s 120: [12] Section 139ZQ is an administrative aid to a trustee in bankruptcy who seeks to recover money or property to which he claims he is entitled pursuant to ss 120, 121 or 122 of the Bankruptcy Act. Although a notice requires the recipient to make a payment or to transfer property to the trustee on pain of criminal sanctions it is not determinative of any issue between the trustee and the recipient but is subject to the right of the recipient to apply to the court under s 139ZS to set the notice aside. In the meantime the notice acts a charge upon the property. The provision is constitutionally valid: Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble (1995) 58 FCR 391; 130 ALR 609. [13] In Halse v Norton (1997) 76 FCR 389 the Full Bench of the Federal Court (Black CJ, Lee and R D Nicholson JJ) upheld the decision of Carr J reported as Norton v Halse (1996) 137 ALR 593 that the trustee bore an onus of establishing either that the facts and circumstances alleged in the notice under s 139ZQ and relied upon at the hearing existed, or that other facts or circumstances existed that would bring the transaction, the subject of the notice, within s 120 or s 121 of the Act (per Black CJ at 391). At 392 the Chief Justice said: Clearly, s 139ZS is not the exclusive means of challenging a notice under s 139ZQ (see Re McLernon at FCR 403), and there may well be cases in which there is good reason for the trustee to bring what would be in effect a cross-application for a declaration that a transaction is void, as in Re McLernon: see also Theo v Official Trustee in Bankruptcy (1996) 70 FCR 317; 34 ATR 404. This is the very application and cross-application with which the case before me deals. [14] Mr Bigmore QC who appeared on behalf of the applicant invited me to consider first the validity of the allegation that the property had been transferred in breach of s 120 of the Bankruptcy Act. In other words he wished me to deal with the respondent’s cross-application. He asserted that if I found that the transfer was not void against the trustee there was no need to consider the validity of the s 139ZQ notice. Vale v Sutherland (2009) 258 ALR 1; 83 ALJR 940; [2009] HCA 26; BC200906575 dealt with questions asked in the above cases. The Official Receiver issued a notice under this section asserting that certain property transactions were void as to their valuation. The question that the court had to decide was whether s 30 should by applied if the value stated was incorrect. The judgment of Gummow, Hayne, Haydon, Crennan and Kiefel JJ took up the view expressed in dissent by Lindgren J below and by Carr J in Re McLernon; Ex parte SWF Hoists and Industrial Equipment Pty Ltd v Prebble (1995) 58 FCR 391; 130 ALR 609. In Re McLernon, Carr J said: A hearing under s 139ZS is in my opinion a hearing de novo in which the Court may investigate and determine the correctness of the facts and circumstances stated in the notice and whether any defence to the liability asserted in the notice arises out of additional facts proved by the applicant. [footnotes not reproduced] In Vale v Sutherland (above), the High Court held (at [20]):

The result of that construction of the legislation is that s 30 could not be relied upon to qualify what otherwise would be the operation of s 139ZS for which the appellant contends. If his interpretation of that section be correct then an error in valuation will found an application to set aside the notice in question. Section 30 cannot save the notice from expungement under s 139ZS(2) by an order preserving its life as to that part of the amount which is accurately claimed. [page 534] The High Court held (at [40]) that at the preceding hearing the value of the property was in issue. The trustee contended that the determination of whether the value asserted in the notice was disputed depended entirely on whether in his defence he made a specific denial or a statement of specific nonsubmission. The High Court cited with approval the view of Dawson J in Banque Commerciale SA (En Liquidation) v Akhil Holdings Ltd (1990) 169 CLR 279; 92 ALR 53; [1990] HCA 11; BC9002932 at 296–7: But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties. … cases are determined on the evidence, not the pleadings. The High Court concluded (at [44]–[45]): [44] The majority of the Full Court was correct in its conclusion that the Federal Magistrate had erred in allowing the counterclaim and setting aside the Notice. But the decision of the majority is to be supported on reasoning which differs from that on which they relied. This is because, for the reasons given above, under the heading ‘The issue of construction between the parties’, the trustee’s submission respecting the scope of s 139ZS should be accepted. [45]To that extent, the appeal to this court should be dismissed. If no further order is made in this court, the orders of the Full Court will stand. These involve remittal to the Federal Magistrates Court for hearing of the claim brought by the trustee against the appellant. [82,113ZQ.15] Carr J was inclined to see more utility in s 139ZQ in Re McLernon; Ex parte SWF Hoists & Industrial Equipment Pty Ltd v Prebble (1995) 58 FCR 391; 130 ALR 609. In Sutherland v Vale [2007] FMCA 1617; BC200708594, Lloyd-Jones FM summarised the use and value of s 139ZQ. See [82,113ZQ.10]. [82,113ZQ.20] Value of the property received Where a notice under s 139ZQ requires the payment to the trustee of “the value of the property received” value was held to mean the value of the property as at the date of receipt of the property: see Re Lucera; Ex parte Official Trustee in Bankruptcy (1994) 53 FCR 329. However, see the definition of “value” in s 139K. [82,113ZQ.25] A notice of the Official Receiver In Re Muttukumaru (1995) 57 FCR 384, it was held that a notice under s 139ZQ given by a person described as “Deputy Official Receiver” was not a valid notice. As there was no evidence of the Official Receiver exercising a power of delegation the question of whether the power to give a notice under s 139ZQ could be delegated was left open.

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[82,113ZR] Charge over property 139ZR (1) If a notice under section 139ZQ is given to a person in respect of any property: (a) the property is charged with the liability of the person to make payments to the trustee as required by the notice; and (b) if the person makes the payments or transfers the property to the trustee, the property ceases to be subject to the charge. (2) Subject to subsection (3), a charge under subsection (1) has priority over any existing or subsequent mortgage, lien, charge or other encumbrance over the property in favour of an associated entity of the bankrupt, and has that priority despite any other law of the Commonwealth or any law of a State or Territory. (3) A charge under subsection (1) does not have priority over a mortgage, lien, charge or other encumbrance in favour of an associated entity of the bankrupt if that entity satisfies the Court that that mortgage, lien, charge or other encumbrance arose from a [page 535] transaction that was entered into at arm’s length and for valuable and adequate consideration provided by that entity and is not void against the trustee under Division 3. (4) If any property being land is subject to a charge under subsection (1), the Official Receiver may certify by signed writing that the land is subject to a charge under that subsection and may lodge the certificate with the Registrar-General, Registrar of Titles or other proper officer of the State or Territory in which the land is situated. (5) The officer with whom the certificate is lodged may register the charge as nearly as practicable in the way in which mortgages over land are registered under the law in force in the State or Territory in which the land is situated. (6) The trustee has power to sell any property over which a charge exists under subsection (1) and, if the property is so sold, then, subject to any charges that have priority over the first-mentioned charge, the proceeds of the

sale are, to the extent of the charge, to be applied in or towards the discharge of the liability to make a payment or payments to the trustee of the person to whom the notice was given. SECTION 139ZR GENERALLY [82,113ZR.5] Generally In Re Lucera; Ex parte Official Trustee in Bankruptcy (1994) 53 FCR 329 Olney J warned “[i]n my opinion s 139ZQ should not be resorted to as a means of short-circuiting the normal and established procedures appropriate to the registration of title”.

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[82,113ZS] Power of Court to set aside notice 139ZS (1) If the Court, on application by a person to whom a notice has been given under section 139ZQ or by any other interested person, is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice, the Court may make an order setting aside the notice. (2) A notice that has been set aside is taken not to have been given. SECTION 139ZS GENERALLY [82,113ZS.5] Generally A literal reading of s 139ZS suggests a recipient of a notice under s 139ZQ cannot challenge “the alleged facts and circumstances set out in the notice”. If this were so a challenge to the alleged facts and circumstances would have to be made by way of judicial review under the Administrative Decisions (Judicial Review) Act 1977. However, in Re Lucera; Ex parte Official Trustee in Bankruptcy (1994) 53 FCR 329 Olney J held that “it would seem to be the case that whatever the words is satisfied that this subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice mean, a person to whom a notice has been given may challenge the statement of facts and circumstances for the purpose of an application to set the notice aside”. Olney J went on to state that “if s 139ZS(1) does not provide sufficient authority for such an order, then s 30 does”. But see [82,113ZQ.8]. [82,113ZS.10] Proper party to application The trustee of the bankrupt estate and not the Official Receiver is the proper respondent to an application under s 139ZS: see Worrell v Power & Power (1993) 46 FCR 214; 118 ALR 237.

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[82,113ZT] Failure to comply with notice 139ZT (1) A person who refuses or fails to comply with a notice under section 139ZQ is guilty of an offence punishable upon conviction by

imprisonment for a period not exceeding 6 months. [page 536] (2) If a person is convicted of an offence against subsection (1) in relation to the refusal or failure of the convicted person or another person to comply with a notice under section 139ZQ, the court that convicted the person may, in addition to imposing a penalty on the convicted person, order that person to pay to the trustee an amount not exceeding the amount, or the total of the amounts, that the convicted person or the other person, as the case may be, refused or failed to pay to the trustee in accordance with the notice.

Subdivision K — Rolled-over superannuation interests etc

[82,113ZU] Order relating to rolled-over superannuation interests etc 139ZU (1) If, on application by the trustee of a bankrupt’s estate, the Court is satisfied that: (a) a transaction is void against the trustee of the bankrupt’s estate under section 128B or 128C; and (b) the transaction was by way of a contribution to an eligible superannuation plan (the first plan) for the benefit of a person (the beneficiary) who may or may not be the bankrupt; and (c) the beneficiary’s withdrawal benefit in relation to the first plan falls short of the amount of the money, or the value of the property, received as a result of the transaction; and (d) the beneficiary has a superannuation interest in another eligible superannuation plan; and (e) the superannuation interest referred to in paragraph (d) is attributable, in whole or in part, to the roll-over or transfer, after the transaction referred to in paragraph (a) happened, of the whole or a part of the beneficiary’s superannuation interest in the first plan; the Court may, by order, direct the trustee of the other eligible

superannuation plan to pay to the trustee of the bankrupt’s estate a specified amount not exceeding whichever is the lesser of the following: (f) the amount of the shortfall referred to in paragraph (c); (g) the beneficiary’s withdrawal benefit in relation to the other eligible superannuation plan. (2) The Court must not make an order under subsection (1) unless it is satisfied that it is in the interests of the creditors of the bankrupt to do so. (3) For the purposes of paragraph (1)(a), it is immaterial whether the transaction occurred before, at or after the commencement of this section. (4) For the purposes of paragraph (1)(b), disregard a benefit that is payable in the event of the death of a person. (5) For the purposes of paragraph (1)(c), if the beneficiary does not have a superannuation interest in an eligible superannuation plan, the beneficiary is taken to have a nil withdrawal benefit in relation to the plan. (6) For the purposes of paragraph (1)(e), it is immaterial whether the rollover or transfer occurred directly or indirectly through one or more interposed eligible superannuation plans. (7) An applicant under subsection (1) must give a copy of the application to: (a) the trustee of the other eligible superannuation plan; and (b) the beneficiary. [page 537] (8) At the hearing of an application under subsection (1): (a) the trustee of the other eligible superannuation plan; and (b) the beneficiary. may appear, adduce evidence and make submissions. (9) For the purposes of sections 128E, 128F and 128J, an order under this section is taken to relate to: (a) the transaction referred to in paragraph (1)(a) of this section; and (b) the beneficiary’s superannuation interest referred to in paragraph (1)(d) of this section.

[82,113ZV] Enforcement of order 139ZV An order by the Court under section 139ZU 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.

[82,113ZW] Definitions 139ZW In this Subdivision: contribution has the same meaning as in Subdivision B of Division 3. eligible superannuation plan has the same meaning as in Subdivision B of Division 3. superannuation interest has the same meaning as in Subdivision B of Division 3. trustee of an eligible superannuation plan has the same meaning as in Subdivision B of Division 3. withdrawal benefit has the same meaning as in Subdivision B of Division 3.

DIVISION 4C — RESTRICTION ON OVERSEAS TRAVEL BY BANKRUPT [Repealed] [Div 4C rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] REPEALED PROVISIONS — DIVISION 4C BEFORE 5 MAY 2003 [82,114.1] Transitional Part VI Div 4C comprising ss 139ZU–139ZZ was repealed on 5 May 2003 by the Bankruptcy Legislation Amendment Act 2002 No 131. However, Sch 1 Pt 2 cl 222 of the amending Act provides that despite its repeal: “(a) Division 4C of Part VI of the Bankruptcy Act continues to have effect: (i) in relation to permissions granted under that Division before the commencing time; and (ii) in relation to applications that were made to the Court under that Division before the commencing time; and (iii) in relation to permissions granted after the commencing time on applications referred to in subparagraph (ii); and (b) paragraph 272(c) of the Bankruptcy Act does not apply to anything done by a bankrupt in accordance with a permission referred to in paragraph (a) of this item.” Prior to their repeal, ss 139ZU–139ZZ appeared as follows:

“Bankrupt who is liable to pay contributions not to leave Australia without permission of Court 139ZU (1) A bankrupt who is liable to pay to the trustee a contribution under subsection 139P(1) or 139Q(1) is not entitled to leave Australia unless, on application made by the bankrupt, the Court has made an order granting the bankrupt permission to leave Australia. [page 538] (2) The Court must not grant permission: (a) unless it is satisfied that: (i) it is necessary for the bankrupt to leave Australia in order to continue to derive income; or (ii) it is appropriate for compassionate reasons relating to the death or serious illness of a close relative of the bankrupt to allow the bankrupt to leave Australia; and (b) if any payments in respect of the contribution will fall due before the bankrupt proposes to return to Australia — unless it is satisfied that the bankrupt has made those payments or has made arrangements that the Court is satisfied will ensure the making of those payments. (3) The Court must not grant permission if it is satisfied that any of the grounds of objection referred to in paragraphs 149D(1)(b) to (n), inclusive, that may be set out in a notice of objection to the discharge of the bankrupt under section 149B has been established, whether or not such a notice has been filed, or has been filed on that ground. (4) The Court may grant permission to the bankrupt to leave Australia on a particular occasion only, on a specified number of occasions, or on any occasions occurring during a particular period. “How application for permission is to be made 139ZV (1) An application by the bankrupt for an order under section 139ZU must: (a) be in writing and filed with the Court; and (b) set out, or be accompanied by, a statement of the reasons why the bankrupt wishes to leave Australia; and (c) set out the period or periods during which the bankrupt proposes to be absent from Australia; and (d) if any payments that the bankrupt is required to make in respect of the contribution have fallen due before the application is made — state whether the bankrupt has made those payments; and (e) if any payments that the bankrupt is required to make in respect of the contribution will fall due before the bankrupt proposes to return to Australia — state whether the bankrupt has already made those payments or, if those payments have not already been made, explain how the bankrupt proposes to meet his or her liability to make those payments; and (f) be accompanied by a certificate signed by the trustee stating whether the bankrupt has made all the payments in respect of the contribution that have fallen due and whether the bankrupt has already made all the payments that will fall due before the bankrupt proposes to return to Australia. (2) An application is not taken to be duly made unless copies of the application and of any

accompanying documents have been given to the trustee. “Trustee may appear or be represented at hearing of application 139ZW The trustee is entitled to appear at the hearing of an application, either in person or by solicitor or counsel, and may give evidence and make submissions to the Court. “Orders may contain conditions 139ZX (1) An order by the Court granting permission to a bankrupt to leave Australia may be unconditional or subject to conditions set out in the order. (2) The conditions that may be set out may be conditions to be complied with before the bankrupt leaves Australia or conditions to be complied with while the bankrupt is absent from Australia, or both. (3) Without limiting the nature of the conditions that the Court may impose, those conditions may include conditions as to the countries to be visited or not to be visited by the bankrupt and conditions as to the period or periods of the absence or absences. [page 539] “Application may be heard by telephone 139ZY Subject to the rules of court, if the applicant so requests and it is practicable to do so, the Court is to conduct the hearing of an application in a way that enables the applicant, and the trustee if he or she so wishes, to participate by telephone. “Procedure for applications to be prescribed by rules of court 139ZZ The rules of court may make provision with respect to the procedure to be followed in or in connection with the hearing of applications, including: (a) provision enabling formal procedures to be dispensed with and applications to be determined without undue formalities and as quickly as possible; and (b) without limiting the application of paragraph (a), provision as to the procedure to be followed in, or in connection with, the hearing of an application that involves the participation of the applicant, or of the applicant and the trustee, by telephone.”

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DIVISION 5 — DISTRIBUTION OF PROPERTY

[82,115] Declaration and distribution of dividends 140 (1) The trustee of the estate of a bankrupt shall, subject to this section, with all convenient speed, declare and distribute dividends amongst the creditors who have proved their debts. [subs (1) am Act 121 of 1968 s 8; Act 12 of 1980 s 69]

(2) Subject to the retention of such sums as are necessary to meet the costs

of administration or to give effect to the provisions of this Act, the trustee shall distribute as dividend all moneys in hand. (3) Before declaring the first dividend, the trustee must give written notice of the trustee’s intention to declare the dividend to anyone the trustee knows of who claims, or might claim, to be a creditor but has not lodged a proof of debt. [subs (3) subst Act 44 of 1996 s 3 and Sch 1]

(4) The trustee shall, in a notice published or sent in pursuance of subsection (3), specify a reasonable period within which creditors may lodge their proofs of debts. [subs (4) subst Act 12 of 1980 s 69]

(5) The trustee shall, before declaring a dividend (other than the first dividend or the final dividend) send notice of his or her intention to do so to each person who, to his or her knowledge, claims to be, or might claim to be, a creditor but has not lodged a proof of debt and has not been sent a notice under this section in relation to the declaration of a previous dividend. [subs (5) subst Act 12 of 1980 s 69; am Act 44 of 1996 s 3 and Sch 2]

(6) The trustee shall, in a notice sent in pursuance of subsection (5), specify a reasonable period within which creditors may lodge their proofs of debts. [subs (6) subst Act 12 of 1980 s 69]

(7) Where the trustee has sent a notice in pursuance of subsection (3) or (5) of this section in relation to the declaration of a dividend, the trustee shall not declare the dividend until after the expiration of 21 days after the expiration of the period specified in the notice. [subs (7) subst Act 12 of 1980 s 69]

(8) Subject to subsections (9) and (10), where the trustee declares a dividend, he or she shall pay each creditor who has proved his or her debt the amount due to the creditor and send the creditor a statement in accordance with the approved form in relation to the realization and distribution of the estate. [subs (8) insrt Act 12 of 1980 s 69; am Act 44 of 1996 s 3 and Schs 1, 2; Act 34 of 2006 s 3 and Sch 4[10], opn 3 May 2006]

[page 540]

(9) Where, but for this subsection, the amount due to a creditor in respect of a dividend would be less than $10 or, if a greater amount is, as at the beginning of the day on which the dividend is declared, prescribed by the regulations for the purposes of this subsection, that greater amount, the trustee need not pay that dividend to the creditor. [subs (9) insrt Act 12 of 1980 s 69; am Act 119 of 1987 s 52; Act 44 of 1996 s 3 and Sch 1]

(10) Where a creditor has furnished to the trustee an authority in writing to pay a dividend due to the creditor to another person, the dividend payable to the creditor may be paid, and the statement to be sent to the creditor in pursuance of subsection (8) may be sent, to that person. [subs (10) insrt Act 12 of 1980 s 69]

(11) This section has effect subject to an order under section 90SS or 114 of the Family Law Act 1975 (which deal with interlocutory injunctions). [subs (11) insrt Act 20 of 2005 s 3 and Sch 1, opn 18 Sep 2005; am Act 115 of 2008 s 3 and Sch 2[18], opn 1 Mar 2009] SECTION 140 GENERALLY [82,115.1] Applicability to corporations The questions as to whether subs (9) is a rule “with regard to debts provable” and whether the convenience and saving of expense are available to corporations were considered by Barrett J in the Equity Division of the New South Wales Supreme Court in Re One.Tel Pty Ltd (2002) 43 ACSR 305; 171 FLR 206; [2002] NSWSC 1081; BC200206816. To send out notices and to hold a meeting with numerous small creditors would absorb much of the funds available for the administration. His Honour held at [33] that to treat the subsection as concerned only with payment of dividends in satisfaction of debts would be superficial and that the operative words of the subsection, “Where, but for this subsection” vested in the trustee a discretion not to pay. As to the second question, his Honour referred to and applied the principles of Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270; 172 ALR 28 and Gibbons v LibertyOne Ltd (in liq) (2002) 41 ASCR 442; 167 FLR 310 as to the employment of this regime in winding up proceedings and conditioned orders appropriate to the circumstances but within that regime. [82,115.5] Cross-references See s 143 for calculation of dividends, s 145 for provision regarding final dividends and ss 82 and 102–105 for provisions regarding proof of debts.

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[82,120] Joint and separate dividends 141 Where one partner of a firm becomes bankrupt, a creditor to whom the bankrupt is indebted jointly with the other partners of the firm or any of them shall not receive a dividend out of the separate property of the bankrupt until all the separate creditors have received the full amount of their respective

debts.

[82,125] Apportionment of expenses of administration of joint and separate estates 142 Where joint and separate estates are being administered, the expenses of and incidental to the administration of the estates shall be fairly apportioned by the trustee between the joint and separate estates, having regard to the work done for, and the benefit received by, each estate.

[82,130] Provision to be made for creditors residing at a distance etc 143 In the calculation and distribution of a dividend, the trustee shall make provision for: (a) debts provable in bankruptcy appearing from the bankrupt’s statement of affairs or otherwise to be due to persons resident in places so distant from the place [page 541] where the trustee is acting that in the ordinary course of communication those persons would not have had sufficient time to lodge their proofs of debt; and (b) debts provable in bankruptcy in respect of which proofs of debt have been lodged but have not been admitted.

[82,135] Right of creditor who has not proved debt before declaration of dividend 144 A creditor who has not proved his or her debt before the declaration of a dividend is entitled to be paid, out of any available money for the time being in the hands of the trustee, dividends that he or she has failed to receive before that money is applied to the payment of a future dividend, but he or she is not entitled to disturb the distribution of a dividend declared before he

or she proved his or her debt. [s 144 am Act 44 of 1996 s 3 and Sch 2]

[82,140] Final dividend 145 (1) Subject to this section, when the trustee of the estate of a bankrupt has realized all the property of the bankrupt, or so much of it as can, in his or her opinion, be realized without needlessly protracting the trusteeship, he or she shall declare and distribute a final dividend. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) The trustee shall distribute as the final dividend all moneys realized and not previously distributed and shall distribute the final dividend without regard to any debt that had not been proved at the time when he or she declared the final dividend. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) The trustee shall, before declaring the final dividend, give notice, in the manner prescribed by the regulations, to each person who to his or her knowledge, claims to be, or might claim to be, a creditor but has not proved his or her debt that, if the person does not prove his or her debt within the period specified in the notice, the trustee will proceed to declare a final dividend without regard to his or her claim. [subs (3) am Act 44 of 1996 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) The trustee shall, in a notice sent to a person in pursuance of subsection (3), allow a reasonable period within which the person may prove his or her debt. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) The Court may, on the application of a person claiming to be a creditor, extend the period within which the person may prove his or her debt. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(6) Where the trustee has sent a notice in pursuance of subsection (3) in relation to the declaration of the final dividend, the trustee shall not declare the dividend until after the expiration of 21 days after the expiration of the period specified in the notice or, if the Court, under subsection (5), extends the period within which a person may prove his or her debt, until after the expiration of 21 days after the expiration of that extended period. [subs (6) am Act 44 of 1996 s 3 and Sch 2] [s 145 subst Act No 12 of 1980 s 70]

[82,145] Distribution of dividends where bankrupt fails to file statement of affairs 146 Where a bankrupt has failed to file a statement of his or her affairs as required by this Act, the Court may, on the application of the trustee, upon such terms as it thinks fit, [page 542] order that distribution of dividends amongst the creditors who have proved their debts shall proceed in accordance with this Division as if the bankrupt had filed a statement of his or her affairs and those creditors had been stated to be creditors in it. [s 146 am Act 44 of 1996 s 3 and Sch 2] SECTION 146 GENERALLY [82,145.5] General The purpose of the section is to “give the court the means of ensuring that the absence of a statement of affairs does not prejudice those with an interest in the bankrupt’s affairs”: Re Shaw; Official Trustee in Bankruptcy [1999] FCA 968; BC9904005 (Re Shaw). The section applies even where the failure is the result of circumstances beyond the control of the bankrupt (failure the result of mental infirmity): Re Sturt; Ex parte Official Trustee in Bankruptcy (2001) 117 FCR 1; 187 ALR 474; [2001] FCA 1649; BC200107266 (not following Re Christie (1948) 22 ALJ 302, which was distinguished). See also Sweeney v Skyring [2000] FCA 1126; BC200004609. In Cunningham v Green [2011] FMCA 515; BC201105205 at [7] after citing and applying Re Shaw the court referred to and followed Re Thor [2006] FMCA 1637; BC200609484: Of course, on any application under s 146 of the Bankruptcy Act the court must be satisfied that it is appropriate to make an order. The court may need to be satisfied, for example, that creditors have been notified of the application and have had an opportunity to be heard, although ordinarily the application would be made in the interests of creditors. As in this case, the court might require evidence that the trustee has taken appropriate steps to ascertain whether there are creditors other than those who have come to its attention by filing a proof of debt or otherwise. In Official Receiver v Lockhart [2006] FMCA 642; BC200605418, Smith FM applied Re Shaw, and also Re Rees; Stubberfield v Stubberfield [1999] FCA 1862; BC9908618 and Re Sturt, above, per Sackville J at [10] to similar effect, which addressed the principle of prejudice to the known creditors of the bankrupt resulting from delay in the administration of the estate. He noted that Allsop J in Official Trustee in Bankruptcy v Raeffael [2003] FCA 328; BC200302112, where the bankrupt had not been notified, was prepared to make an order to save the estate expense. This case has since been again applied in Condon v Wilson (No 2) [2012] FMCA 1070; BC201209254 which would seem to ensure its permanence. See [81,025.30]. In Nicols v Geekie [2007] FMCA 1576; BC200708367 it was held that the use of this section was directed to the absence of a statement of affairs, not to partial or incomplete statements.

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[82,150] No action for dividend 147 (1) An action for a dividend does not lie against the trustee of the estate of a bankrupt but, if the trustee neglects or refuses to pay a dividend to a creditor, the Court, on the application of the creditor, may, if it thinks fit, order the trustee to pay the dividend and may also order that the trustee pay interest on the dividend for the time that it is withheld and the costs of the application. [subs (1) subst Act 12 of 1980 s 71]

(2) Where the Court orders the trustee of the estate of a bankrupt to pay interest on a dividend or to pay the costs of an application under subsection (1), the trustee is personally liable for, and is not entitled to be reimbursed by the estate in respect of, the payment of that interest or those costs. [subs (2) insrt Act 12 of 1980 s 71]

[page 543]

PART VII — DISCHARGE AND ANNULMENT [Pt VII am Act 9 of 1992 s 27]

DIVISION 1 — PRELIMINARY [Div 1 insrt Act 9 of 1992 s 27]

[82,160] Misleading conduct by bankrupt *148 For the purposes of this Part, a bankrupt is taken to have engaged in misleading conduct in relation to a person in respect of a particular amount (in this section called the relevant amount) if: (a) the bankrupt, either alone or jointly with any other person, obtained credit to the extent of the relevant amount from the first-mentioned person without informing that person that he or she was an undischarged bankrupt; or (b) the bankrupt, either alone or jointly with any other person, obtained

goods or services from the first-mentioned person: (i) by giving a bill of exchange or cheque drawn, or a promissory note made, by the bankrupt, either alone or jointly with another person, being a bill, cheque or note under which the relevant amount is payable; or (ii) by giving 2 or more such instruments under which the total of the amounts payable is equal to the relevant amount; without informing the first-mentioned person that he or she was an undischarged bankrupt; or (c) the bankrupt, either alone or jointly with any other person, entered into a hire-purchase agreement with the first-mentioned person, or entered into an agreement for the leasing or hiring of any goods from the first-mentioned person, being a hire-purchase agreement or agreement for the leasing or hiring of goods under which the total of the amounts payable is equal to the relevant amount, without informing the first-mentioned person that he or she was an undischarged bankrupt; or (d) the bankrupt, either alone or jointly with any other person, obtained goods or services from the first-mentioned person by promising to pay that person or another person the relevant amount, or amounts the total of which is equal to the relevant amount, without informing the first-mentioned person that he or she was an undischarged bankrupt; or [page 544] (e) the bankrupt, either alone or jointly with any other person, obtained the relevant amount, or amounts the total of which is equal to the relevant amount, from the first-mentioned person by promising to supply goods to, or render services for, that person or another person without informing the first-mentioned person that he or she was an undischarged bankrupt; or (f) the bankrupt carried on business under an assumed name, in the name of another person or, either alone or in partnership, under a firm name and:

(i)

in the course of the carrying on of that business the bankrupt, or, if the bankrupt carried on the business in partnership under a firm name, the partnership, dealt with the first-mentioned person; and (ii) the bankrupt did not inform the first-mentioned person that he or she was an undischarged bankrupt. [s 148 subst Act 9 of 1992 ss 26 and 27] SECTION 148 GENERALLY [82,160.5] Misleading conduct It is a ground of objection (see s 149D(1)(c)) for a bankrupt to engage in misleading conduct in respect of an amount, or amounts the total of which exceed $3000. The sum of $3000 is subject to indexation pursuant to s 304A. *Editor’s note: The current s 148 was inserted in Div 1 of Pt VII by s 27 of the Bankruptcy Amendment Act 1991 No 9 of 1992, after the previous version of s 148 was repealed by s 26 of the same amending Act. Section 148 was originally located at the end of Pt VI Div 5. Section 53 of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as follows: “If proceedings pending under proceeds of crime legislation 53 Any order that was in force under section 148 of the Principal Act immediately before the repeal of that section by section 26 of this Act continues to have effect as if it were made: (a) in the case of an order in relation to a bankrupt — under subsection 154(6) of the Principal Act as amended by this Act; or (b) in the case of an order in relation to a debtor who had executed a deed of assignment — under section 231A of the Principal Act as amended by this Act; or (c) in the case of an order in relation to a debtor who had executed a deed of arrangement — under section 237AA of the Principal Act as amended by this Act; or (d) in the case of an order in relation to a debtor who had entered into a composition — under section 243AA of the Principal Act as amended by this Act.” The text of the repealed s 148 together with the full text of the transitional provisions of Act 9 of 1992 is reproduced at [79,950] following the Table of Amendments to this Act.

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DIVISION 2 — DISCHARGE BY OPERATION OF LAW [Div 2 insrt Act 9 of 1992 s 27]

Subdivision A — Discharge after certain period [Subdiv A am Act 9 of 1992 s 27]

[82,163] Automatic discharge *149 (1) Subject to section 149A, a bankrupt is, by force of this subsection, discharged from bankruptcy in accordance with this section. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 545] (2) If: (a) the bankrupt became a bankrupt before the commencement of section 27 of the Bankruptcy Amendment Act 1991; and (b) immediately before the commencement of that section, either: (i) paragraph 149(3)(c) of the Bankruptcy Act 1966 as amended applied in relation to the bankrupt; or (ii) an order under subsection 149(8) or (12) of the Bankruptcy Act 1966 as amended was in force in relation to the bankrupt; the bankrupt is discharged at the end of the period of 3 years from: (c) the date on which the bankrupt filed his or her statement of affairs; or (d) the date of commencement of that section; whichever is the later. (3) If the bankrupt became a bankrupt before the commencement of section 27 of the Bankruptcy Amendment Act 1991, and subsection (2) does not apply in relation to the bankrupt, the bankrupt is discharged at: (a) the end of the period of 3 years from the date on which the bankrupt filed his or her statement of affairs; or (b) the commencement of that section; whichever is the later. (4) If the bankrupt becomes a bankrupt after the commencement of section 27 of the Bankruptcy Amendment Act 1991, the bankrupt is discharged at the end of the period of 3 years from the date on which the bankrupt filed his or her statement of affairs. (5) [subs (5) rep Act 44 of 1996 s 3 and Sch 1] [s 149 subst Act 9 of 1992 s 27]

SECTION 149 GENERALLY [82,163.5] General Subject to an objection to discharge being filed (s 149B) or an application for early discharge being granted (Pt VII, Div 3), a bankrupt is discharged three years from the date of filing of his or her statement of affairs with the Official Receiver (s 54): s 149. [82,163.10] Failure to file statement of affairs Problems arise where the bankrupt has failed to file his or her statement of affairs in accordance with s 54, because time does not begin to run for the purpose s 149(3) of the Act. Prior to Nilant v Machia (1997) 18 FCR 419; 148 ALR 329, it was thought that s 33(1)(c) of the Act could be used to abridge the time limited by s 149(3): Re Rohde (1993) 42 FCR 149; 115 ALR 705. However, in Nilant v Macchia the Full Court overruled Re Rohde, and held that s 33(1)(c) does not give the court the power to abridge the time limited by s 149(3) of the Act. In Re Sofia; Ex parte Sofia v Pattison (FCA, Finkelstein J, 11 November 1997, unreported), the bankrupt prepared a statement of affairs and gave a copy of it to his trustee. Immediately afterwards, he took the original statement of affairs and left it on the counter at the Federal Court Registry. The statement of affairs was subsequently lost. Upon discovering that the bankruptcy file at the court did not contain the statement of affairs, the trustee sent a photocopy of that document to the registrar, and it was put on the court file. Around three years later, the bankrupt applied to the court for, inter alia, an order that the time expressed in s 149(3) be abridged. He did not proceed with that part of his application because of the decision in Nilant v Macchia. However, Finkelstein J accepted an argument that the filing of a statement of affairs was a “proceeding” within the meaning of s 306(1) of the Act, and that the filing of a photocopy of the statement of affairs, as opposed to an original as required by s 54, was a defect or irregularity that could be remedied by that section.

____________________ *Editor’s note: Section 149 was substituted by s 27 of the Bankruptcy Amendment Act 1992 No 9 of 1992. Section 54 of the Bankruptcy Amendment Act 1991 provides as follows: Existing objections and proceedings are to lapse 54 (1) Any objection to the discharge of a bankrupt that was entered under paragraph 149(3)(c) of the Principal Act and had not been withdrawn or lapsed before the repeal of section 149 of that Act by this Act lapses upon that repeal but the trustee or Official Receiver is not precluded by the lapsing of that objection from filing a notice of objection under section 149B of the Principal Act as amended by this Act. (2) Any proceeding that was pending before the Court, and any order by the Court that was in force, under section 149 of the Principal Act immediately before the repeal of that section lapse upon that repeal. The repealed s 149(3)(c) provided as follows: (3) A bankrupt is not discharged from bankruptcy by virtue of this section if: … (c) the Registrar, the Inspector-General or the trustee has entered, or the creditor has, with the leave of the Court, entered, an objection, in accordance with the prescribed form and in the prescribed manner, to the discharge of the bankrupt by force of this section and the objection has not been withdrawn or lapsed before the time when the bankrupt would

have been so discharged but for this subsection; or … See [79,950] following the Table of Amendments to this Act for the full text of transitional provisions. Section 54 of the Bankruptcy Amendment Act 1991 (Cth) does not operate to remove the right of the bankrupt to have the decision of a trustee to enter an objection to discharge prior to 1 July 1992 “reviewed” pursuant to s 178: McGoldrick v Official Trustee in Bankruptcy (1993) 47 FCR 547; 119 ALR 253.

[page 546]

[82,165] Bankruptcy extended when objection made 149A (1) If an objection to the discharge of a bankrupt has taken effect in accordance with section 149G, then, unless the objection is withdrawn or cancelled, the reference in whichever of subsections 149(2), (3) and (4) applies in relation to the bankrupt to the period of 3 years from the date on which the bankrupt filed his or her statement of affairs is taken to be a reference to the prescribed number of years from the prescribed date. (2) For the purposes of subsection (1): (a) the prescribed number of years is: (i) if the objection was made on a ground, or on grounds that included a ground, referred to in paragraph 149D(1)(ab), (ac), (ad), (d), (da), (e), (f), (g), (h), (ha), (ia), (k) or (ma) — 8 years; or (ii) in any other case — 5 years; and (b) the prescribed date is: (i) if the objection was made on a ground, or on grounds that included a ground, referred to in paragraph 149D(1)(a) or (h) — the date on which the bankrupt returned to Australia; or (ii) in any other case — the date on which the bankrupt filed his or her statement of affairs. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 57 of 2007 s 3 and Sch 1[7], opn 28 July 2006; Act 106 of 2010 s 3 and Sch 2[16], opn 1 Dec 2010]

(3) If the objection is withdrawn or cancelled: (a) the objection is taken never to have been made; and (b) if:

the period specified in whichever of subsections 149(2), (3) and (4) applies in relation to the bankrupt has ended; and (ii) no other objection against the discharge of the bankrupt is in effect; (iii) [repealed] the bankrupt is taken to be discharged under section 149 immediately the objection is withdrawn or cancelled. (i)

[subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 149A subst Act 9 of 1992 s 27] SECTION 149A GENERALLY [82,165.5] Notice of objection Generally where a notice of objection is filed the effect is to increase the period of bankruptcy from three to five years or even up to eight years in the event that objection is based upon any of the matters referred to in s 149D(1)(a)–(h). [82,165.10] Withdrawn or cancelled objection — s 149A(3) In Re Farnan and Inspector-General in Bankruptcy (2007) 95 ALD 186; [2007] AATA 1199; BC200702248 at [25] Deputy President Jarvis, in considering the scheme of the section, authoritatively concluded that the effect of the subsection is as follows: [25] … the powers of this tribunal, standing in the shoes of the Inspector-General, are limited to either cancelling the trustee’s notice of objection, or confirming the trustee’s decision to object to the discharge from bankruptcy. Under s 149(3)(a) of the Bankruptcy Act, if the objection is withdrawn, the objection is “taken never to have been made”. As a result, the tribunal is unable to exercise the function contemplated by s 149N of the Bankruptcy Act conferring jurisdiction on it, because there is no objection which the tribunal can cancel or affirm. The proceedings before me are accordingly obviously untenable, and therefore vexatious … The Deputy President adopted a similar analysis to Fearnley v Australian Fisheries Management Authority (2006) 94 ALD 519; [2006] FCAFC 3; BC200600393.

____________________ [page 547]

Subdivision B — Objections [Subdiv B insrt Act 9 of 1992 s 27]

[82,168] Objection to discharge 149B (1) Subject to the following provisions of this Subdivision, at any

time before a bankrupt is discharged from bankruptcy under section 149, the trustee may file with the Official Receiver a written notice of objection to the discharge. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The trustee of a bankrupt’s estate must file a notice of objection to the discharge if the trustee believes: (a) that doing so will help make the bankrupt discharge a duty that the bankrupt has not discharged; and (b) that there is no other way for the trustee to induce the bankrupt to discharge any duties that the bankrupt has not discharged. [subs (2) insrt Act 44 of 1996 s 3 and Sch 1] SECTION 149B GENERALLY [82,168.5] Generally Phillips v Inspector-General in Bankruptcy [2011] AATA 25; BC201100126 deals with the application of this section and other sections is the course of deciding whether certain subpoenas were valid. In considering the requirements of this area the tribunal does not go beyond the words of the statute (where it does, the principles are noted in respect of the particular section concerned). The advantage of the Tribunal’s treatment is that the words of the statute might seem opaque upon a first or second reading but the logical progression of the statute, particularly in the area of the objections taken by the Inspector-General is the more readily seen. [82,168.10] Written notice The written notice takes effect from the beginning of the day on which the notice is filed: s 149G. See [81,005.45].

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[82,170] Form of notice of objection 149C (1) A notice of objection must: (a) set out the ground or each of the grounds of objection, being a ground or grounds set out in subsection 149D(1) but not being a ground or grounds of a previous objection to the discharge that was cancelled; and (b) refer to the evidence or other material that, in the opinion of the trustee, establishes that ground or each of those grounds; and (c) state the reasons of the trustee for objecting to the discharge on that ground or those grounds. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(1A) Paragraph (1)(c) does not apply to a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (ia), (k) or (ma). [subs (1A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 106 of 2010 s 3 and Sch 2[17], opn 1 Dec 2010]

(2) A notice of objection is not invalid merely because it does not state the ground or grounds of objection precisely as set out in subsection 149D(1) provided that the ground or grounds can reasonably be identified from the terms of the notice. SECTION 149C GENERALLY [82,170.5] Generally Quaere whether the requirements as to form contained in s 149C must be strictly complied with or whether substantial compliance is sufficient. In Re Hall (1994) 14 ACSR 488 the court found that the use of the word “must” conveyed “the need for close compliance”. [page 548] However the court found it unnecessary to determine the question of whether strict compliance was necessary as it found that there had not been substantial compliance with the requirements of s 149C(1) (b) and (c). [82,170.10] Reference to evidence “The notice of objection should put the bankrupt in a position where he or she can identify, and if necessary search out, the evidence or other material relied upon for the purpose of the objection”: Re Hall (1994) 14 ACSR 488. In Wood v Prentice [2001] FCA 1050; BC200104485, a notice of objection based on a failure to pay income contributions was held to be defective because it did not refer to the amounts that the bankrupt was liable to pay. [82,170.15] Reasons for decision When evidence exists to support the filing of a notice of objection a trustee or the Official Receiver has a discretion whether to file a notice of objection or not. The reasons of the trustee or the Official Receiver for exercising his or her discretion to file a notice of objection must be contained in the notice. A failure to do so will result in the notice being a nullity and it will be ineffective to avoid discharge from bankruptcy by reason of s 149. The existence of a ground of objection and its recitation in the notice can not, in the absence of reasons being given, be relied upon as self-evident reasons for objecting: Re Hall (1994) 14 ACSR 488. In Re Ansett; Ex parte Ansett v Pattison (1995) 56 FCR 526, Olney J said: The mere existence of an available ground does not automatically give rise to an extension of the bankruptcy. To achieve that end the trustee must give notice setting out the ground he relies upon, the evidence which establishes that ground and the reason why he objects to the discharge on that ground. The latter requirement suggests that the trustee must address the relevance of the bankrupt’s conduct in administration of the estate and to make a judgment as to whether that conduct provides a basis or reason for the bankruptcy to be extended. Further, the trustee is required to expose his reasoning in the notice. In Wood v Prentice [2001] FCA 1050; BC200104485, Tamberlin J held that a statement to the effect that creditors would benefit from further income contribution assessments satisfied the requirement.

[82,170.20] When is there sufficient reason? It has been held that the AAT, in reviewing a decision to file an objection to discharge, should have “regard to all relevant circumstances” to determine whether the “significant extension of the period of time during which the [bankrupt] is obliged to carry out his various duties and obligations under the Act and during which his after acquired property will vest in his trustee” is warranted: Re Woodman and Inspector-General in Bankruptcy (1996) 40 ALD 800; 22 AAR 508. That case involved an objection being lodged following the bankrupt’s failure to provide written information as to his income, or his expected income. The tribunal, in determining “that the reasons given by the trustee do not justify the making of the objection in the light of the material now before [the] Tribunal, even though they existed and justified the notice of objection at the time it was lodged” held that it was appropriate to look at circumstances occurring after the date of filing the objection. Those circumstances would include the conduct of the bankrupt after the date of filing the objection and the intention of the bankrupt.

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[82,173] Grounds of objection 149D (1) The grounds of objection that may be set out in a notice of objection are as follows: (a) the bankrupt has, whether before, on or after the date of the bankruptcy, left Australia and has not returned to Australia; (aa) any transfer is void against the trustee in the bankruptcy because of section 120 or 122; (ab) any transfer is void against the trustee in the bankruptcy because of section 121; [page 549] (ac) any transfer is void against the trustee in the bankruptcy because of section 128B; (ad) any transfer is void against the trustee in the bankruptcy because of section 128C; (b) after the date of the bankruptcy, the bankrupt contravened section 206A of the Corporations Act 2001 (disqualification from managing corporations); (c) after the date of the bankruptcy the bankrupt engaged in misleading conduct in relation to a person in respect of an amount that, or amounts the total of which, exceeded $3,000;

(d) the bankrupt, when requested in writing by the trustee to provide written information about the bankrupt’s property, income or expected income, failed to comply with the request; (da) after the date of the bankruptcy, the bankrupt intentionally provided false or misleading information to the trustee; (e) the bankrupt failed to disclose any particulars of income or expected income as required by a provision of this Act referred to in subsection 6A(1) or by section 139U; (f) the bankrupt failed to pay to the trustee an amount that the bankrupt was liable to pay under section 139ZG; (g) at any time during the period of 5 years immediately before the commencement of the bankruptcy, or at any time during the bankruptcy, the bankrupt: (i) spent money but failed to explain adequately to the trustee the purpose for which the money was spent; or (ii) disposed of property but failed to explain adequately to the trustee why no money was received as a result of the disposal or what the bankrupt did with the money received as a result of the disposal; (h) while the bankrupt was absent from Australia he or she was requested by the trustee to return to Australia by a particular date or within a particular period but the bankrupt failed to return by that date or within that period; (ha) the bankrupt intentionally failed to disclose to the trustee a liability of the bankrupt that existed at the date of the bankruptcy; (i) the bankrupt has failed, whether intentionally or not, to disclose to the trustee a liability of the bankrupt that existed at the date of the bankruptcy; (ia) the bankrupt failed to comply with subparagraph 77(1)(a)(ii); (j) the bankrupt failed to comply with paragraph 77(1)(bb) or (bc) or subsection 80(1); (k) the bankrupt refused or failed to sign a document after being lawfully required by the trustee to sign that document; (l) the bankrupt failed to attend a meeting of his or her creditors without having first obtained written approval of the trustee not to

attend or without having given to the trustee a reasonable explanation for the failure; (m) the bankrupt failed to attend an interview or examination for the purposes of this Act without having given a reasonable explanation to the trustee for the failure; (ma) the bankrupt intentionally failed to disclose to the trustee the bankrupt’s beneficial interest in any property; (n) the bankrupt failed, whether intentionally or not, to disclose to the trustee the bankrupt’s beneficial interest in any property. [subs (1) am Act 55 of 2001 s 3 and Sch 3, opn 15 July 2001; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 57 of 2007 s 3 and Sch 1[8], opn 28 July 2006; Act 106 of 2010 s 3 and Sch 2[18], opn 1 Dec 2010]

(2) This section has effect subject to section 304A. [page 550] SECTION 149D GENERALLY [82,173.5] Bankrupt returning to Australia Where objection to discharge is made on the ground of the bankrupt having left Australia and not returning or being absent and failing to return upon request, but the bankrupt subsequently returns to Australia, the trustee must give notice to the registrar and provide the information referred to in reg 7.01. [82,173.7] Failure to comply with request — s 149D(1)(d) The “notion of failure in s 149D(1)(d) should be construed in the sense of imposing strict liability on the bankrupt otherwise the discretion under s 149B would become unduly limited and the trustee or Official Receiver would be deprived of the opportunity of looking at the totality of circumstances in determining whether or not to file a notice of objection”: Re Woodman and Inspector-General in Bankruptcy (1996) 40 ALD 800; 22 AAR 508. This section must be expanded by the operation of reg 7.01 (as to which see [87,653] below) which provides, inter alia, “a bankrupt is taken to have failed to comply with a request to provide information if the bankrupt has provided information that is incomplete or inaccurate”. In which case under s 149Q(a) an application may be made to the Administrative Appeals Tribunal for the review of a decision of the trustee to file a notice of objection. See s 149N at [82,195]. See also Re Gremmer and Inspector-General in Bankruptcy [2011] AATA 368; BC201103502, which provides an example. [82,173.8] Failure to disclose particulars of income — s 149D(1)(e) In Re Woodman and InspectorGeneral in Bankruptcy (1996) 40 ALD 800; 22 AAR 508 it was held that the failure to provide the “statement” in which the particulars of income were to be specified did not amount to a breach of s 149D(1)(e). The correctness of this decision must be doubted given that s 6A does not create any obligation to provide a “statement” but specifies the requirements of that statement. [82,173.10] Failure to explain adequately — s 149D(1)(g) In Re Kirkwood and Jenkins and Peake

(AAT, Deputy President Forrest, Messrs Elsum and McLean, V94.458, 25 November 1994, unreported) the bankrupt was confronted with evidence by the trustee of a disposition of property by the bankrupt. Only when confronted with the evidence did the bankrupt give an explanation of the transaction. The tribunal held: The Act requires a bankrupt to make full disclosure of his property and matters relevant to the administration of his estate: s 77. The task of the Tribunal standing in the shoes of the decision maker in considering an objection on the ground of s 149(1)(g) is to make an objective assessment of the bankrupt’s explanation surrounding the spending of money or the disposal of property. In Kirkwood’s case, it would include a consideration of when and in what circumstances the explanation was made, the nature and extent of the explanation and whether in all the circumstances it is reasonably satisfactory. In Wharton v Official Receiver in Bankruptcy (2001) 107 FCR 28; 182 ALR 208; [2001] FCA 96; BC200100576, which was applied by Lucev FM in Broadley v Inspector-General in Bankruptcy (2007) 97 ALD 797; [2007] FMCA 1714; BC200708960, his Honour noted that the finding of the Federal Court that there was no requirement under s 149D(1)(d) of the Bankruptcy Act for a bankrupt to provide information which was complete or accurate was soon followed by the enactment of reg 7.01A of the Bankruptcy Regulations 1996. It provides for a bankrupt to be taken to have failed to comply with a trustee’s request under s 149D(1)(d) of the Bankruptcy Act if the bankrupt provides information that is incomplete or inaccurate. [82,173.15] Failure to disclose a liability — s 149D(1)(i) “The proper administration of a bankrupt’s estate necessitates a full and complete disclosure to the trustee of liabilities and other relevant information. Failure to disclose that information, and to use the deliberate words of the statute, ‘intentionally or not’, leaves the trustee with insufficient information to carry out his or her statutory duties. Section 149D(1)(i) places a clear onus on the bankrupt to disclose all liabilities even if the trustee may have obtained knowledge from some other source”: Re Hall and Official [page 551] Receiver (1993) 18 AAR 378 at 385 (note that the notice of objection to discharge in this case was subsequently held to be a nullity by reason of the failure to give reasons as required by s 149C). See [82,178.15]. [82,173.20] Review See [81,005.45].

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[82,175] Registrar to record objection 149E [s 149E rep Act 44 of 1996 s 3 and Sch 1]

[82,178] Copy of notice of objection to be given to bankrupt 149F (1) As soon as practicable after a notice of objection is filed by the trustee, the trustee must give a copy of the notice to the bankrupt together with a notice to the effect that the bankrupt may request the InspectorGeneral to review the decision of the trustee to file the notice of objection. [subs (1) subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) A notice given to the bankrupt under subsection (1) must set out the effect of subsection 149K(3). (3) A contravention of this section does not affect the validity of the objection. [s 149F am Act 44 of 1996 s 3 and Sch 1] SECTION 149F GENERALLY [82,178.5] Notice of rights of review A notice setting out the bankrupt’s rights to have the decision to file a notice of objection reviewed should comply with the requirements of s 27A of the Administrative Appeals Tribunal Act 1975.

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[82,180] Date of effect of objection 149G An objection takes effect at the beginning of the day on which details of the notice of objection are entered in the National Personal Insolvency Index. [s 149G am Act 44 of 1996 s 3 and Sch 1]

[82,183] Trustee ceasing to object on some grounds 149H (1) If at any time before a bankrupt is discharged the trustee ceases to object to the discharge on a particular ground, the trustee must give the Official Receiver a notice specifying the ground and give the bankrupt a copy of the notice.

(2) [subs (2) rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] (3) If there is no longer an objection on any ground, the objection ceases to have effect at the beginning of the last day when details of a notice under subsection (1) are entered in the National Personal Insolvency Index. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) If one or more grounds of objection remain, the objection continues to have effect on the remaining ground or grounds. [s 149H subst Act 44 of 1996 s 3 and Sch 1]

[82,185] Withdrawal of objection 149J (1) If at any time before a bankrupt is discharged the trustee withdraws the objection, the trustee must give the Official Receiver a notice of the withdrawal of the objection and give the bankrupt a copy of the notice. [page 552] (2) [subs (2) rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] (3) The withdrawal takes effect at the beginning of the day when details of a notice under subsection (1) are entered in the National Personal Insolvency Index. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 149J subst Act 44 of 1996 s 3 and Sch 1] SECTION 149J GENERALLY [82,185.5] Procedure Gray J in Trkulja v Morton [2005] FCA 659; BC200503544 at [26] noted a submission as to the use of this section. See [81,405.5].

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Subdivision C — Review of objection [Subdiv C insrt Act 9 of 1992 s 27] SUBDIVISION C GENERALLY [82,187.5] Introduction Provision is made for administrative review of the decision to file a notice of objection by either the Inspector-General, whose decision may in turn be reviewed by the Administrative Appeals Tribunal, or directly by the Administrative Appeals Tribunal. There is no

limitation period in which to make a request for review to the Inspector-General, however, there is a limitation period for the lodging of an application for review with the tribunal: see generally s 29 of the Administrative Appeals Tribunal Act 1975. A review by either the Inspector-General or the Tribunal is conducted de novo. [82,187.10] Review by the court In McGoldrick v Official Trustee in Bankruptcy (1993) 47 FCR 547; 119 ALR 253 the Full Court of the Federal Court left open the question of whether the court retains power under s 178 to review the decision of a trustee to file a notice of objection. However, in Re Ansett; Ex parte Ansett v Pattison (1995) 56 FCR 526 it was expressly held that the court did have such power. Quaere whether the court’s power of review is limited to questions of law. See Re Ellis; Ex parte Jefferson (FCA, Drummond J, QB 1914 of 1993, 17 February 1995, unreported) and [82,113ZA.10].

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[82,188] Internal review of objection 149K (1) The Inspector-General may review a decision of the trustee to file a notice of objection: (a) on the Inspector-General’s own initiative; or (b) if requested to do so by the bankrupt for reasons that appear to the Inspector-General to be sufficient to justify such a review. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The Inspector-General must review such a decision if requested to do so by the Ombudsman. (3) A request by the bankrupt to the Inspector-General for the review of such a decision must: (a) be in writing and lodged with the Official Receiver’s office not later than 60 days after the day on which the bankrupt is notified of the trustee’s objection; and (b) be accompanied by: (i) a copy of the notice of objection; and (ii) any documents on which the bankrupt relies in support of the request. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 553]

(4) The Official Receiver must endorse on the request the date when it was lodged and must send the request and the accompanying documents to the Inspector-General as soon as practicable after they are received. (5) Within 60 days after the request is lodged, the Inspector-General must: (a) decide whether to review the decision; and (b) if the Inspector-General decides to review the decision — make his or her decision on the review. SECTION 149K GENERALLY [82,188.5] “lodge”, “file” Both these expressions occur in subs (3), “file” by implication. See Hong v Minister for Immigration & Multicultural Affairs (1998) 82 FCR 468; 55 ALD 358; 153 ALR 327; BC9801184; Burchett, Lehane and Finkelstein JJ at FCR 473; ALD 363; ALR 332. The Full Court concluded that “lodge” meant “… [W]hen the question is not whether a proceeding has commenced but merely whether a document has been ‘lodged’ there is no difficulty with the conclusion that the document has been ‘lodged’ when it is physically deposited with the court or tribunal or when it has come into the possession of the court or tribunal by some other means such as by post or facsimile transmission.” The word “file” is not synonymous and in the same citation the court said “… ‘Filing’ is the word used to describe the process of placing a document in the records of a court or its registry …”. The trustee must “file” and “lodge” his notice of objection. See also Re Phillips and Inspector-General in Bankruptcy [2011] AATA 25; BC201100126 where these principles were applied.

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[82,190] Inspector-General may authorise officer to act on his or her behalf 149L [s 149L rep Act 44 of 1996 s 3 and Sch 1]

[82,193] Inspector-General may request further information 149M (1) For the purposes of the exercise of powers under this Subdivision, the Inspector-General may: (a) ask the bankrupt to provide such further information, either orally or in writing, in support of the request as the Inspector-General specifies; and (b) ask the trustee who filed the notice of objection to provide such information, either orally or in writing, about the decision to file the notice and the reasons for the decision as the Inspector-General

specifies. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) If any information is provided orally, the Inspector-General must record it in writing.

[82,195] Decision on review 149N (1) On a review of a decision, if the Inspector-General is satisfied that: (a) the ground or grounds on which the objection was made was not a ground or were not grounds specified in subsection 149D(1); or (b) there is insufficient evidence to support the existence of the ground or grounds of objection; or (c) the reasons given for objecting on that ground or those grounds do not justify the making of the objection; or (d) a previous objection that was made on that ground or those grounds, or on grounds that included that ground or those grounds, was cancelled; [page 554] the Inspector-General must cancel the objection. (1A) An objection must not be cancelled under subsection (1) if: (a) the objection specifies at least one special ground; and (b) there is sufficient evidence to support the existence of at least one special ground specified in the objection; and (c) the bankrupt fails to establish that the bankrupt had a reasonable excuse for the conduct or failure that constituted the special ground. For this purpose, special ground means a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (ia), (k) or (ma). [subs (1A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 106 of 2010 s 3 and Sch 2[19], opn 1 Dec 2010]

(1B) In applying subsection (1A), no notice is to be taken of any conduct of the bankrupt after the time when the ground concerned first commenced to

exist. [subs (1B) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The cancellation does not take effect until: (a) the end of the period within which an application may be made to the Administrative Appeals Tribunal for the review of the decision of the Inspector-General; or (b) if such an application is made — the decision of the Tribunal is given. (3) If the Inspector-General is not satisfied as mentioned in subsection (1), the Inspector-General must confirm the decision. SECTION 149N GENERALLY [82,195.5] Review In Nguyen v Pattison [2005] FCA 650; BC200503401 Weinberg J considered the principles set by Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6 in the light of Macchia v Nilant (2001) 110 FCR 101; [2001] FCA 7; BC200100006. In view of the explanatory memorandum to ss 149A–149J that indicated that the policy of these sections was to provide a mechanism whereby decisions of a trustee that may have been appropriate at the time they were made can be reversed if it is nonetheless seen to be appropriate to bring the bankruptcy to an end, his Honour had to consider whether the earlier authorities were in point. His Honour applied, generally, the principles of Re Tyndall, above. He did not consider that the contention that an order dismissing an application would create an issue estoppel was justified, being contrary to the policy of the Act: at [87]. See [81,005.45], [82,640.25] and [82,173.7].

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[82,198] Inspector-General to notify bankrupt and trustee of decision 149P (1) If the Inspector-General: (a) reviews a decision; or (b) refuses a request by a bankrupt for a review of a decision; the Inspector-General must give written notice to the bankrupt, to the trustee and to the Official Receiver, of the Inspector-General’s decision on the review or on the request, as the case may be. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The notice must: (a) set out the decision; and (b) refer to the evidence or other material on which the decision was

based; and (c) give the reasons for the decision. [page 555] (3) In the case of a decision reviewing the decision to file a notice of objection, the notice must also include a statement to the effect that, if the bankrupt, or the trustee, is dissatisfied with the Inspector-General’s decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for review of the decision. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) In the case of a decision refusing a request to review the decision to file a notice of objection, the notice to the bankrupt must also include a statement to the effect that, if the bankrupt is dissatisfied with the Inspector-General’s decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for a review of the decision. (5) A contravention of subsection (3) or (4) in relation to a decision does not affect the validity of the decision. (6) If, within 60 days after lodgment of a request by a bankrupt for the review of the trustee’s decision to file a notice of objection, the InspectorGeneral has not given written notice to the bankrupt of his or her decision in accordance with subsection (1), the Inspector-General is taken to have reviewed the decision and confirmed it under subsection 149N(3).

[82,200] Review of decisions 149Q An application may be made to the Administrative Appeals Tribunal for the review of: (a) a decision of the Inspector-General on the review of a decision of the trustee to file a notice of objection; or (b) a decision of the Inspector-General refusing a request to review a decision of the trustee to file a notice of objection. [s 149Q subst Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

DIVISION 3 — EARLY DISCHARGE [Repealed] [Div 3 rep Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

DIVISION 4 — PROVISIONS APPLICABLE TO ALL DISCHARGES [Div 4 am Act 9 of 1992 s 27]

[82,270] Discharged bankrupt to give assistance 152 A discharged bankrupt must, even though discharged, give such assistance as the trustee reasonably requires in the realization and distribution of such of his or her property as is vested in the trustee. Penalty: Imprisonment for 6 months. [s 152 subst Act 9 of 1992 s 27] SECTION 152 GENERALLY [82,270.5] Purpose of s 152 This section indicates that the operation of s 153 in discharging the bankrupt from debts cannot have the effect of revesting in the bankrupt the property which was under the sequestration order vested in the trustee: Pegler v Dale [1975] 1 NSWLR 265; (1975) 6 ALR 62; Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178; 99 ALR 789. As to the powers of trustees vis-à-vis former bankrupts see: Re Coulson; Ex parte Official Receiver (Trustee) [1934] 1 Ch 45; Re Walker (1952) 16 ABC 69; compare Re Balhorn; Ex parte Balhorn and Official Trustee in Bankruptcy (1981) 39 ALR 223. [page 556] The doubts expressed by Lockhart J in Re Balhorn; Ex parte Balhorn and Official Trustee in Bankruptcy, above, were dispelled in Official Receiver v Todd (1986) 70 ALR 119 (on appeal) where it was held that the power conferred by s 81 to examine continued to apply notwithstanding discharge from bankruptcy. Section 81(1) now expressly provides for examination “whether before or after the end of the bankruptcy”.

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[82,275] Effect of discharge 153 (1) Subject to this section, where a bankrupt is discharged from a bankruptcy, the discharge operates to release him or her from all debts

(including secured debts) provable in the bankruptcy, whether or not, in the case of a secured debt, the secured creditor has surrendered his or her security for the benefit of creditors generally. Note: The operation of this section in relation to accumulated HEC debts and semester debts under the Higher Education Funding Act 1988 is affected by section 106YA of that Act. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 86 of 2001 s 3 and Sch 2, opn 18 July 2001]

(2) The discharge of a bankrupt from a bankruptcy does not: (a) release the bankrupt from: (i) a debt on a recognizance; or (ii) a debt with which the bankrupt is chargeable at the suit of the sheriff or other public officer on a bail bond entered into for the appearance of a person prosecuted for an offence against a law of the Commonwealth or of a State or Territory of the Commonwealth; or (aa) release the bankrupt from liability to pay an amount to the trustee under subsection 139ZG(1); or (b) release the bankrupt from a debt incurred by means of fraud or a fraudulent breach of trust to which he or she was a party or a debt of which he or she has obtained forbearance by fraud; or (c) subject to any order of the Court made under subsection (2A), release the bankrupt from any liability under a maintenance agreement or maintenance order; (d) [repealed] Note: A discharged bankrupt remains liable under any pecuniary penalty order because such liabilities are not provable in bankruptcy, see subsection 82(3A). [subs (2) am Act 12 of 1980 s 75; Act 73 of 1987 s 10; Act 9 of 1992 s 28; Act 44 of 1996 s 3 and Sch 2; Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

(2A) The Court may order that the discharge of a bankrupt from bankruptcy shall operate to release the bankrupt, to such extent and subject to such conditions as the Court thinks fit, from liability to pay arrears due under a maintenance agreement or maintenance order. [subs (2A) insrt Act 12 of 1980 s 75]

(3) The discharge of a bankrupt from a bankruptcy does not affect the right of a secured creditor, or any person claiming through or under him or her, to realize or otherwise deal with his or her security: (a) if the secured creditor has not proved in the bankruptcy for any part

of the secured debt — for the purpose of obtaining payment of the secured debt; or (b) if the secured creditor has proved in the bankruptcy for part of the secured debt — for the purpose of obtaining payment of the part of the secured debt for which he or she has not proved in the bankruptcy; and, for the purposes of enabling the secured creditor or a person claiming through or under him or her so to realize or deal with his or her security, but not otherwise, the [page 557] secured debt, or the part of the secured debt, as the case may be, shall be deemed not to have been released by the discharge of the bankrupt. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) The discharge of a bankrupt from a bankruptcy does not release from any liability a person who, at the date on which the bankrupt became a bankrupt: (a) was a partner or a co-trustee with the bankrupt or was jointly bound or had made a joint contract with the bankrupt; or (b) was surety or in the nature of a surety for the bankrupt. (5) Where a bankrupt has been discharged from a bankruptcy, all proceedings taken in or in respect of the bankruptcy shall be deemed to have been validly taken. [subs (5) am Act 9 of 1992 s 28]

(6) [subs (6) rep Act 12 of 1980 s 75] SECTION 153 GENERALLY [82,275.5] “debt” — s 153(2)(a) and (b) The meaning of the word “debt” as used in the subsection includes “liability”. An obligation, enforceable by a demand for money had and received gives rise to either a debt or a liability and thus falls within the Act: Cornelius v Barewa Oil & Mining (NL) (in liq) (1982) 42 ALR 83. [82,275.10] “fraud”, “fraudulent” — s 153(2)(b) In Cornelius v Barewa Oil & Mining (NL) (in liq) (1982) 42 ALR 83 it was not decided whether “fraud” in the Act includes constructive fraud, as actual fraud was established. Because of the re-examination of the accepted interpretation of s 82(2) occasioned by Coventry v

Charter Pacific Corp Ltd (2005) 222 ALR 202; 80 ALJR 132; [2005] HCA 67; BC200506987 (Coventry), as to which see [81,650.7], this subsection was considered by Johnson J in Skalkos v Smiles [2006] NSWSC 192; BC200602024. The case was an application to strike out pleadings. The First Defendant relied on [50] of Coventry, above, to a similar conclusion on the facts. His Honour considered that the matter related to the interpretation of “fraud” in the judgment of Gummow, Hayne and Heydon JJ in Banditt v R (2005) 223 ALR 633; 80 ALJR 421; [2005] HCA 80; BC200510778 (cited as SGB v R (2005) HCA 80 in his Honour’s reasons), and as a result, his Honour concluded that the claims made were not demonstrated to the rigourous degree required by s 153(2)(b) of the statute, to fall outside of the permitted ambit. Johnson J said of “fraud” at [62]–[63]: [62] The term “fraud” in s 153(2)(b) of the Act has been given a broad meaning. In Chittick v Maxwell, Young J (as his Honour then was) held that s 153(2)(b) of the Act was applicable in circumstances where equitable fraud had been established. On appeal, Mahoney JA (Priestley and Powell JJA agreeing) upheld this finding: Maxwell v Chittick. Mahoney JA said at 13: It was submitted for Mr Maxwell that the result of the composition with creditors which was effected in 1991 was that he was released from the claims made by the plaintiffs. Section 153(2) (b) of the Bankruptcy Act 1966 provided that no discharge should be effected so as to “release the bankrupt from a debt incurred by means of fraud or a fraudulent breach of trust to which he was a party or a debt of which he has obtained forbearance by fraud”. The learned judge concluded, and I agree, that the “debt” owed to the plaintiffs was incurred by means of fraud or a fraudulent breach of trust. As the learned judge has pointed out, the term “fraud” in the bankruptcy provisions in this regard has been given a broad interpretation. It is not necessary to pursue the authorities which were referred to by the judge and in argument before this court. So much is accepted. The obligations incurred by Mr Maxwell, however they arose and whatever point in time they arose, involved fraud of the relevant kind. The obligations which arose under and by virtue of the original proposal to build were of an equitable nature and, as I have indicated, there was deceit in the nature of fraud at that time. That deceit was repeated at the time the deed was executed. here were, when the various mortgages were entered into, breaches of equitable obligations arising from deceit in the [page 558] nature of fraud. In my opinion, on each of the relevant occasions, there was fraud within the meaning of the statute. I agree with the judge’s conclusions in this regard. [63]The decision of the Court of Appeal in Maxwell v Chittick was followed by Debelle J in Re Bosun, where his Honour said at [18]: The liquidator has identified a cause of action which, if proved, would entitle the liquidator to recover damages from Makris, notwithstanding that he has been released from bankruptcy. It cannot be said that the liquidator cannot in any respect bring himself within s 153(2)(b). Fraud has a wide denotation in equity, reflecting the fact that Courts of Chancery are courts of conscience acting in personam. Cases such as Keech v Sandford (1726) Sel Cas T King 61, 25 ER 223; Nocton v Lord Ashburton [1914] AC 932; and Boardman v Phipps [1967] 2 AC 46 are examples of what might be regarded as “technical” frauds: see the discussion in Meagher, Gummow and Lehane (3rd edition) paras 1201–1210. The pursuit of interest in conflict with a duty arising from a fiduciary relationship may give rise to a “technical” fraud. Fraud in this context must be given a broad interpretation by recognising that, in equity, that which is

unconscionable might constitute fraud. As was observed by Mahoney JA in Maxwell v Chittick (unreported, NSW Court of Appeal, 23 August 1994): The term “fraud” in the bankruptcy provisions in this regard has been given a broad interpretation. Johnson J referred to the judgment of the High Court in SGB v R (2005) HCA 80 (which is published as Banditt v R (2005) 223 ALR 633; 80 ALJR 425; [2005] HCA 80; BC200510778), at [2], to illuminate the meaning of the term in this subsection: When “reckless” is used in applying the principles of the tort of negligence, the yardstick is objective rather than subjective. On the other hand, to sustain an action in deceit, fraud is proved when it is shown “that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false”1. But (3) is but an instance of (2) because, as Lord Herschell put it in Derry v Peek2: [O]ne who makes a statement under such circumstances can have no real belief in the truth of what he states. This reasoning is akin to that which supports the evidentiary inference explained by Lord Esher MR as being that one who wilfully shuts his eyes to what would result from further inquiry may be found to know of that result [English and Scottish Mercantile Investment Co v Brunton [1892] 2 QB 700 at 707–708]. Johnson J said he considered that the fraud referred to in the subsection was fraud of this type, which was alleged in the disputed pleading. [82,275.15] Claim for damages for conspiracy A claim for damages for conspiracy is not a debt provable in bankruptcy, and hence a discharge from bankruptcy will not release the bankrupt from any liability arising from the claim: Barewa Oil & Mining NL (in liq) v Isim Mineral Development Pty Ltd (1981) 38 ALR 288. [82,275.20] Effective discharge The operation of the section in discharging the bankrupt from debts cannot have the effect of revesting in the bankrupt the property which was under the sequestrian order vested in the trustee: Pegler v Dale [1975] 1 NSWLR 265; (1975) 6 ALR 62; Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178; 99 ALR 789. [page 559] [82,275.25] Effect of deemed abandonment of action In Cousins v HTW Valuers (Cairns) Pty Ltd [2002] QSC 413; BC200207438 the applicant, upon his discharge from bankruptcy, sought to continue an action begun before he was involuntarily made bankrupt. Jones J made the following observations at [4], [7]–[8]: [4] Section 60(2) of the [Bankruptcy] Act provides that any action commenced by a person who subsequently becomes a bankrupt is, upon that person’s becoming a bankrupt, stayed until the trustee makes election, in writing, either to prosecute or discontinue the action. That same section further provides that, where the trustee has failed to make an election in writing, a defendant may serve on the trustee a notice of the action requiring the trustee to make an election whether or not to proceed … [7] Kirby P (as he then was) observed in Daemar v Industrial Commission of NSW (No 2) (1990)

22 NSWLR 178 at 182 that the status of an “action” after discharge of a bankrupt “is a matter of some controversy”. He there drew attention to what he described (at 184F) as “a competition of … authority”. He reviewed Pegler v Dale [1975] 1 NSWLR 265 in which Needham J held that s 153(1) of the Bankruptcy Act (by which a discharge operates to release a bankrupt from all debt provable in the bankruptcy) does not have the effect of re-vesting in the bankrupt property which had earlier vested in the trustee by virtue of the Act. He discussed the decision in Re Summerhayes; Ex parte the Official Assignee (1890) 1 BC (NSW) 24 where Manning J held that the official assignee’s omission to elect to prosecute a pending action commenced by the debtor was not a bar to a subsequent action by the official assignee in his representative capacity founded on the same cause of action. Kirby P pointed out (at 185) that Bennett v Gauge (1876) 35 LT 764 and Re Kwok; Ex parte Rummel (1981) 61 FLR 336 likewise provide authority for the proposition that a trustee’s deemed abandonment of the bankrupt’s action does not prevent him from enforcing the right to the chose in action which vested in him on bankruptcy by a new action of his own. [8] On close analysis there really does not seem to be any real competition among any of these authorities. On the one hand by s 152 of the Bankruptcy Act the property of the bankrupt, vested in the trustee by the sequestration order, continues to be vested in the trustee after discharge. Section 153(1), in discharging the bankrupt from debts, cannot have the effect of re-vesting in the bankrupt the property which was, under the sequestration order, vested in the trustee. That was decided in the Daem[a]r case. On the other hand the cause of action is not extinguished by the trustee’s omission to elect. Subject to any argument about abandonment, the trustee could sue on the bankrupt’s cause of action. But the cause of the action remains vested in the trustee. It is no longer the applicant’s to pursue. His Honour distinguished Theissbacher v MacGregor Garrick & Co (a firm) [1993] 2 Qd R 223 in which Pincus JA and White J said that under s 60(3) the deemed abandonment destroys the trustee’s right to pursue the action absolutely, on the ground that in that case the bankruptcy was determined by an annulment, not by discharge. That had the general effect that the former bankrupt was to be treated as if he had never been bankrupt, subject to s 154(2). The effect of this latter section was to preserve from invalidity acts of the trustee, but in that case the trustee had done nothing at all. The application was dismissed as a consequence. Does s 153(1) allow objection to taxation assessments under s 14ZU of the Taxation Administration Act 1953? As set out above the bankrupt’s right to pursue an action ceased upon bankruptcy. In Robertson Jnr v DCT (2004) 55 ATR 106; [2004] FCAFC 46; BC200400802 the appellant was made bankrupt and could not challenge the commissioner’s assessments. The matter came before Carr J who refused relief on the authority of McCallum v FCT (1997) 75 FCR 458; 145 ALR 446. Spender, Branson and Stone JJ considered that point. Section 153(1), inter alia, provides that where a bankrupt is discharged from bankruptcy, the discharge operates to release him or her from all debts provable in the bankruptcy. For this reason the primary tax debt that was provable in the appellant’s bankruptcy ceased, upon the appellant’s discharge from bankruptcy, to be an amount “due to the Commonwealth”. It is thus no longer a “primary tax debt”. The appellant said that his case was under s 153 of the Act, and that if he succeeded the effect would be to place his estate in surplus and that he would be entitled to annul his bankruptcy. [page 560] But McCallum contended, following Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1, that “he will not have standing merely because, for example, a successful challenge to the objection decision may result in a surplus in his bankrupt estate”: McCallum, above, FCR at 475; ALR

at 462. The conclusion was therefore that he was entitled to maintain his application to the tribunal under s 14ZZ because, absent any liability to the commissioner, his estate would have been more than adequate to pay his remaining creditors. [82,275.30] Definitions For definitions of “maintenance agreement”, “maintenance order” “pecuniary penalty order” and “Interstate pecuniary penalty order”, see s 5. The pecuniary penalty order references are to the Proceeds of Crime Act 1987 (Cth). [82,275.35] Effective discharge The operation of the section in discharging the bankrupt from debts cannot have the effect of re-vesting in the bankrupt the property which was under the sequestrian order vested in the trustee: Pegler v Dale [1975] 1 NSWLR 265; (1975) 6 ALR 62; Daemar v Industrial Commission of New South Wales (No 2) (1990) 22 NSWLR 178; 99 ALR 789. Jones J in Cousins v HTW Valuers (Cairns) Pty Ltd [2002] QSC 413; BC200207438 discussed the effect of these two judgments and noted at [8]: [8] On close analysis there really does not seem to be any real competition among any of these authorities. On the one hand by s 152 of the Bankruptcy Act the property of the bankrupt, vested in the trustee by the sequestration order, continues to be vested in the trustee after discharge. Section 153(1), in discharging the bankrupt from debts, cannot have the effect of re-vesting in the bankrupt the property which was, under the sequestration order, vested in the trustee. That was decided in the [Daemar] case. On the other hand the cause of action is not extinguished by the trustee’s omission to elect. Subject to any argument about abandonment, the trustee could sue on the bankrupt’s cause of action. But the cause of the action remains vested in the trustee. It is no longer the applicant’s to pursue. His Honour distinguished Theissbacher v MacGregor Garrick & Co (a firm) [1993] 2 Qd R 223 on the ground that that case proceeded after an annulment when the trustee had done nothing that could be preserved by s 154(2). [82,275.40] Child support issues In Segler v Child Support Registrar (2009) 223 FLR 191; [2009] FMCA 41; BC200900910, Lucev FM considered in some detail whether the court had jurisdiction to discharge a child support debt following bankruptcy and what matters should be considered by the judge in so doing. As the applicant owed a substantial sum to the Child Support Registrar, he applied to have the whole debt discharged. Although the parties agreed that the Federal Magistrates Court had jurisdiction, it was necessary for Lucev FM to consider this issue. He concluded that jurisdiction subsisted for the following reasons: [21] In this matter the Court is satisfied, and agrees with the parties, that it has jurisdiction under the Bankruptcy Act to make an order discharging Mr Segler’s child support debt because: a) section 153(1) provides power for a general discharge, subject to the other provisions of the section; b) section 153(2)(c) provides that the discharge of a bankrupt does not release the bankrupt from any liability under a maintenance agreement or maintenance order, subject to any order of the Court made under s 153(2A); c) section 153(2A) gives the Court a discretion in discharging a bankrupt from bankruptcy to release the bankrupt from liability to pay arrears due under a maintenance agreement or maintenance order to the extent, and subject to any conditions, that the court thinks fit; d) section 82(1A) provides that a child support debt of the type incurred by Mr Segler is a debt provable in bankruptcy; e) section 40(3)(b) provides that, for the purposes of s 40(1)(g), a judgment or order that is

enforceable as or in the same manner as a final judgment obtained in an action is deemed to be a final judgment, and the proceedings in which the judgment or order was obtained is deemed to be the action in which it was obtained; and [page 561] f)

section 40(3)(f) provides that, for the purposes of s 40(1)(g), an order made after its commencement (on 16 December 1996) for the payment by a person of arrears of maintenance is deemed to be a final order against that person.

On the question of jurisdiction, his Honour analysed Coventry v Charter Pacific Corp Ltd (2005) 227 CLR 234; 222 ALR 202; [2005] HCA 67; BC200509687 to conclude, at [81] that “any discharge of a maintenance debt (such as Mr Segler’s child support debt) must be limited to debts provable in bankruptcy up until the date of sequestration”. At [101] Lucev FM concluded: In relation to its determination of whether or not to discharge Mr Segler’s child support debt the Court is entitled to consider Mr Segler’s income, expenses, liabilities and assets, and Mr Segler’s conduct prior to the date of Mr Segler’s bankruptcy, during the period of Mr Segler’s bankruptcy, and since Mr Segler’s discharge from bankruptcy. 1 2

The formulation is that of Lord Herschell in Derry v Peek (1889) 14 App Cas 337, at 374. (1889) 14 App Cas 337, at 374.

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DIVISION 5 — ANNULMENT OF BANKRUPTCY [Div 5 insrt Act 9 of 1992 s 29]

[82,305] Annulment on payment of debts 153A (1) If the trustee is satisfied that all the bankrupt’s debts have been paid in full, the bankruptcy is annulled, by force of this subsection, on the date on which the last such payment was made. (1A) In determining whether there has been full payment of a debt that bears interest, the interest must be reckoned up to and including the date on which the debt (including interest) is paid. [subs (1A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The trustee must, before the end of the period of 2 days beginning on that date, give to the Official Receiver a written certificate setting out the former bankrupt’s name and bankruptcy number and the date of the annulment.

Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (2) am Act 44 of 1996 s 3 and Sch 1; Act 106 of 2010 s 3 and Sch 2[20] and [21], opn 1 Dec 2010]

(3) Subsection (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (3) insrt Act 106 of 2010 s 3 and Sch 2[22], opn 1 Dec 2010]

(4) For the purposes of this section, if a debt has been proved by a creditor but the creditor cannot be found or cannot be identified, the debt may be paid to the Official Receiver and, if so paid, is taken for the purposes of this section to have been paid in full to the creditor. [subs (4) am Act 44 of 1996 s 3 and Sch 1]

(4A) Money received by the Official Receiver under subsection (4) is received on behalf of the Commonwealth. [subs (4A) insrt Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

(5) If money is paid to the Official Receiver under subsection (4), the provisions of subsections 254(3) and (4) apply in relation to that money as if it had been paid to the Commonwealth by a trustee under subsection 254(2). [subs (5) subst Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

[page 562] (6) In this section: bankrupt’s debts means all debts that have been proved in the bankruptcy and includes interest payable on such of those debts as bear interest, and the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee.

[82,310] Annulment by Court 153B (1) If the Court is satisfied that a sequestration order ought not to have been made or, in the case of a debtor’s petition, that the petition ought not to have been presented or ought not to have been accepted by the Official Receiver, the Court may make an order annulling the bankruptcy. (2) In the case of a debtor’s petition, the order may be made whether or not

the bankrupt was insolvent when the petition was presented. [subs (2) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) The trustee must, before the end of the period of 2 days beginning on the day the trustee becomes aware of the order, give to the Official Receiver a written certificate setting out the former bankrupt’s name and bankruptcy number and the date of the annulment. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (3) insrt Act 106 of 2010 s 3 and Sch 2[23], opn 1 Dec 2010]

(4) Subsection (3) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (4) insrt Act 106 of 2010 s 3 and Sch 2[23], opn 1 Dec 2010] [s 153B am Act 44 of 1996 s 3 and Sch 1] SECTION 153B GENERALLY [82,310.3] Procedure See O 77 rr 41–45 of the Federal Court Rules. The application must be served on the trustee no later than 28 days before the hearing of the application, and then no later than five days before the hearing date for the application the trustee must file a report dealing with the bankrupt’s conduct and examinable affairs. [82,310.4] Associated jurisdiction In Mahmoud v Owners’ Corp Strata Plan No 811 (No 2) [2007] FMCA 474; BC200711656 the applicant sought certain orders alleging bias. The Federal Magistrate raised the jurisdictional question and counsel for the creditor submitted that the court had jurisdiction under s 18 of the Federal Magistrates Act 1999. Lucev FM found that the court possessed such jurisdiction applying the principles of New South Wales Department of Housing v Moskalev (2007) 158 FCR 206; 94 ALD 370; [2007] FCA 353; BC200701597. There the Federal Court considered the circumstances in which the Federal Magistrates Court could attract and hold such jurisdiction. See Cowdroy J at [26]–[31]. His Honour observed at [53], quoting from Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 585; 163 ALR 270 at 312; [1999] HCA 27; BC9903189 per Gummow and Hayne JJ: What is a single controversy “depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct in relationships”. There is but a single matter if different claims arise out of a “common transactions and facts” or a “common substratum of facts”, notwithstanding that the facts upon which the claims depend “do not wholly co-incide”. … Often, the conclusion that, if proceedings were tried in different Courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate [page 563]

that there is a single matter. By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter. On the words and parliamentary intention of s 18 of the Federal Magistrates Act 1999. Lucev FM cited Fox v Robinson [2003] FMCA 107; BC200301976 at [33]–[34] per McInnis FM and quoted from the judgment: Section 18 of the FM Act is almost identical to s 32(1) of the Federal Court of Australia Act 1976. That section was considered by the High Court in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457. In that case Mason J stated in relation to that section which applied to the Federal Court the following: Plainly it was intended to vest a jurisdiction in the Federal Court to hear and determine matters not otherwise within its jurisdiction, matters that are “associated” with matters in which the jurisdiction of the Court is invoked. The expression “To the extent that the Constitution permits” suggests that s 32 is directed, not merely to jurisdiction to hear and determine matters arising under federal laws not otherwise vested in the Federal Court, but also to jurisdiction arising under State or other non-federal laws. Problems of constitutional validity arise in relation to the latter, but not in relation to the former. The opening words of s 32(1) would serve no purpose at all if the sub-section was exclusively directed to matters arising under federal laws. In the Philip Morris case Mason J further states at p 512, Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction. His Honour, applying the principles to the facts before him, therefore found that the court possessed jurisdiction, but dismissed the motion. [82,310.5] Abuse of process In Walton v Gardiner (1993) 177 CLR 378 at 393; 112 ALR 289 at 298– 9; BC9303612, Mason CJ, Deane and Dawson JJ said: The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1982] AC 529, at p 536 as “the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people”. In his dissenting judgment in Rogers v R (1994) 181 CLR 251 at 286; 123 ALR 417 at 444; BC9404645 McHugh J adopted this formula: (1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute This approach was employed by Lee, Moore & Nicholson JJ in Symes v Holbrook [2005] FCAFC 219; BC200507982 at [47]. The bench also referred to the principles employed in State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports ¶81-423; BC9700254 where Giles CJ stated in relation to

abuse of process: The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice, and amongst the matters to which regard may be had are— (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or ultimate issue; [page 564] (b) (c) (d) (e)

the opportunity available and taken to fully litigate the issue; the terms and finality of the finding as to the issue; the identity between the relevant issues in the two proceedings; any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; … (f) the extent of the oppression and unfairness to the other party if the issue was relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and (g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process. In the instant case the issue had not been raised before. If the presentation of a petition amounted to an abuse of process, it can rightly be said that the petition ought not to have been presented and in those circumstances power exists to annul the bankruptcy resulting from its acceptance: Clyne v DCT (1984) 154 CLR 589; 55 ALR 143; 58 ALJR 398. In Re Heenan; Ex parte Collins (1992) 39 FCR 428; 116 ALR 146, it was held that an insolvent debtor who takes advantage of the exemption provided by s 116(2)(g) of the Act by filing a debtor’s petition cannot be said to have done so for a purpose that is foreign to the bankruptcy law, provided the debtor was unable to pay his or her debts from his or her own funds as and when they fell due at the time of the presentation of the petition. A debtor is entitled to take advantage of an express exemption created by the Act, irrespective of his or her motive. In Edelsten v DCT (NSW) (1989) 86 ALR 257 the bankruptcy was annulled because the debtor’s petition had been presented purposefully to prevent the petitioning creditor on another petition from obtaining a sequestration order (but see now s 115 and [81,175.50]). In Re Thanos; Ex parte Thanos (FCA, Davies J, SA 822 of 1988, 14 October 1988, unreported) an annulment was granted where it was shown that the debtor’s petition had been presented in an attempt to defeat orders to be made the same day by the Family Court of Australia. Bosun Pty Ltd (in liq) v Makris (2003) 21 ACLC 666; [2003] FCA 100; BC200300386 is of particular interest even though it concerns company liquidation rather than bankruptcy alone. First, Finkelstein J reviews the inherent power of the Federal Court to stay proceedings for abuse of process, and second he considers the circumstances in which that court will consider ordering security for costs against a liquidator, and does so. These cases were drawn together by French J (as he then was) in Rigg v Baker (2006) 155 FCR 531; 236 ALR 629; [2006] FCAFC 179; BC200610222. Since these principles had been enunciated they have been consistently followed, see Vonidis v BMW Australia Finance Ltd [2011] FCA 589; BC201103568 for a recent example. His honour summarises the principles:

[59] The power of the Court to annul a bankruptcy derives from s 153B of the Act. In the case of a bankruptcy created by a sequestration order on a creditor’s petition, the power involves two elements: (1) The Court’s satisfaction that the sequestration order ought not to have been made. (2) The Court’s exercise of a discretion to make an order annulling the bankruptcy. [60]The power to annul a sequestration order is to be distinguished from a power to vary or rescind an order (Cameron v Cole (1944) 68 CLR 571 at 583 per Latham CJ): When an order for sequestration is annulled the debtor, in respect of his property, is restored to the status quo ante, subject to any order which the ante, subject to any order which the Court may make under that sub-section. By virtue of s 37(2) of the Bankruptcy Act rescission has been abolished as a means of bringing a bankruptcy to an end: Re Gollan; Ex parte Gollan (1992) 40 FCR 38; 113 ALR 475; BC9203920 at 40 (Spender J). Nevertheless the nature of annulment with its restorative consequence invites caution in its application: Cameron v Cole (1944) 68 CLR 571; [1944] ALR 130; (1944) 17 ALJR 397; BC4400034 at 583 (Latham CJ); 594 (Starke J). [page 565] [61] In determining whether a sequestration order ought to have been made the Court may consider “not only the case as disclosed at the time that the order was made, but as it would have been disclosed had all the true facts been before the court on the making of the order”: Re Cook (1946) 13 ABC 245 at 259 (Clyne J); Re Williams (1968) 13 FLR 10 at 23; [1969] ALR 179 at 184 (Gibbs J). But facts which have come into existence since the making of the order are not relevant to the question whether it ought to have been made: Re Scott [1975] Qd R 125 at 126–127 (Lucas J); Re Frank; Ex parte Piliszky (1987) 16 FCR 396 at 400 (Fisher J); Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 350 (Gummow J). [62]The circumstances under which a sequestration order “ought” not to be made were described by Fisher J in Re Frank 16 FCR at 403: …a judge “ought” not to have made an order only if he was “bound” not to make the order. And further (Frank 16 FCR at 403): In my opinion “ought” in s 154(1)(a) is of imperative significance and an order should not be annulled unless the judge was in the circumstances bound not to make it and even then there is a residual discretion not to annul. That proposition was quoted with evident approval by the Full Court in Hudson v Whalen [1999] FCA 189 at [10]. [63] In Pollock v Deputy Commissioner of Taxation (Cth) (1994) 94 ATC 4148, Carr J set out five propositions relevant to applications for annulment. They were derived from the judgment of Riley J in Re Calderon (1977) (unreported, Federal Court of Australia, Riley J, No NSW 573 of 1976, 31 May 1977) as follows (at 4153–4154): 1. It is for the applicant for annulment who alleges, and it is therefore for him to bring himself within the section and satisfy the Court, that the sequestration order ought not to have been made.

2.

4. 5.

The Court to whom the application is made seeks to ascertain the actual state of affairs at the time when the sequestration order is made. In order to ascertain that actual state of affairs the Court hearing the application for annulment looks at the facts that were before the Court which made the sequestration order and at any other facts that were not before that Court but are shown on the hearing of the application for annulment to have been in existence when the sequestration order was made. Having considered all the facts so looked at, the Court determines whether on those facts the applicant has satisfied it that the sequestration order ought not to have been made. If it is so satisfied, the Court is not bound to annul the sequestration order but must consider in all the circumstances of the case whether it ought to be annulled.

See Nathan v Burness (No 2) [2011] FCA 289; BC201101771 per Tracey J at [8]. The judge’s consideration of discretionary factors against making an annulment order at [44] et seq is particularly useful. Proof needed to persuade the court Service and solvency are two areas where it is often sought to persuade the court, usually unsuccessfully, that an abuse of process has occurred. In each area authorities exist where the court has set out areas where it may be persuaded. When a defendant has been the subject of an order for substituted service he must first successfully challenge the making of that order before he can successfully assert a denial of procedural fairness: see Bright v Femcare Ltd (1999) 166 ALR 743; ATPR 41–720; [1999] FCA 1377; BC9906392, followed in Vonidis v BMW Australia Finance Ltd [2011] FCA 589; BC201103568. The court will certainly look to the subsequent conduct of the party in later proceedings and will note whether or not the defendant suffered prejudice by the making of the order and whether he made any protest on such an occasion. See Vonidis at [38]. [page 566] The issue of solvency of the defendant is for the defendant to prove according to the principles set out in Kostokanellis v Allen [1974] VR 596 at [34]–[37]. Further the fact that administration has commenced makes it inappropriate to decide the question of solvency: Austral Brick Co Pty Ltd v Daskalovski [1998] FCA 782; BC9803074. A useful example of such cases in Official Receiver v Clifton [2012] FMCA 988; BC201208358 where Lucev FM granted an application for annulment under s 153B because of, essentially, a mistake in the registry where, as His Honour put it, at [6], “The circumstances of this case are similar to those in Official Receiver v Seymour [2008] FMCA 1614 in which the Official Receiver’s office did not detect that Mr Seymour was already bankrupt by way of a sequestration order when it accepted his debtors petition.” His Honour distinguished this case from Nilant v Macchia (1997) 78 FCR 419; 148 ALR 329; BC9704517 at [15]: The facts are distinguishable from Macchia in that: a) the Bankrupt did not file the Statement of Affairs until after the sequestration order had been made; and b) in Macchia the debtors petition statement of affairs was never “filed” (there was only an attempted filing) as the debtors petition was not accepted by the Registrar (who at that time had the function of accepting debtors petitions prior to that function being

transferred to the Official Receiver), but was referred by the Registrar to the court. By contrast, in the present case, the Bankrupt’s Statement of Affairs was filed under both the Debtors Petition bankruptcy and the Creditors Petition Bankruptcy. [82,310.7] Abuse of process in matrimonial cases An area of potential conflict between the Family Court of Australia and the bankruptcy jurisdiction has been circumvented by s 106B of the Family Law Act 1975, which empowers the court to set aside or restrain the making of an instrument where it is likely to defeat an existing or anticipated Family Court order. By virtue of In the marriage of Milland (1980) 54 FLR 270; 7 Fam LR 478; (1981) FLC ¶91-065, this provision may be employed to set aside a disposition under the bankruptcy legislation. However, the Family Court will only employ this power in exceptional circumstances: In the marriage of Holley (1982) FLC ¶91-257. Because of the Family Court’s restricted ability to make orders with respect to third parties the court is, on the present state of the law, likely to act only if the petition was a sham. Reference has been made in [82,310.5] to Re Thanos; Ex parte Thanos (FCA, Davies J, SA 822 of 1988, 14 October 1988, unreported) where an annulment was granted when it was shown that the debtor’s petition had been presented in an attempt to defeat orders to be made the same day by the Family Court. Pursuant to s 106B, the Federal Court may annul a bankruptcy if it is satisfied that the sequestration order ought not to have been made, and will take into account circumstances where the employment of the procedure is an attempt to effect an abuse of process. Cases where similar orders to Re Thamos have been made include Re Lukic & Official Trustee in Bankruptcy (1996) 21 Fam LR 48; (1996) FLC ¶92-719, which is a Family Court decision where a husband’s bankruptcy was annulled on his wife’s application after the court held that the bankruptcy had been effected for the primary purpose of defeating anticipated Family Court property orders. In Knowles & Gaudi [2008] FamCA 436, Monteith J considered the power of the court to set aside a mortgage on the ground that it was a sham. His starting point was the decision of Gibbs J in Ascot Investments v Harper (1981) 148 CLR 337 at 354; (1981) 33 ALR 631; (1981) FLC ¶91-000; BC8100055. The concept was employed by other authorities cited by the judge including Sharrment Pty Ltd and Ors v Official Trustee in Bankruptcy (1998) 18 FCR 449 at pp 453-454 per Lockhart J, Richard Walter Pty Limited v Federal Commissioner of Taxation (1965) 33 ATR 97 at 109-110 per Hill J (at [62] in Knowles) and Hinde & Hinde and Anor [2008] FamCA 24 per Carmody J. [page 567] [82,310.10] Time for making application for annulment There is no reason to restrict the operation of subs (1)(a) to cases where the bankrupt is still an undischarged bankrupt. Thus in Re Oates; Ex parte DCT (1987) 17 FCR 402, the court annulled a bankruptcy years after the bankrupt had been automatically discharged from that bankruptcy. [82,310.15] Circumstances in which an order ought not to have been made An order “ought” not to have been made only if the judge making the order was “bound” not to make the order. If it was open to the judge to make an order in the exercise of discretion it can only be said that the judge ought not to have made the order if none of the circumstances could justify the making of the order; or, alternatively, if it can be established that an order ought not to have been made because subsequent evidence discloses that all of the true facts were not before the court when the order was made: Re Crook (1946) 13 ABC 245; Re Frank; Ex parte Piliszky (1987) 16 FCR 396; 77 ALR 511. RD Nicholson J considered the principles in Symes v Holbrook [2003] FCA 96; BC200300522 and he summarised the authorities at [13] et seq: [13] The words “ought not to have been presented” as they appear in s 153B have been understood

to mean generally that it is not possible for a debtor to establish that his or her bankruptcy should be annulled on that ground when it is clear that at that time the debtor was insolvent: Re Coyle (1993) 42 FCR 72 at 77 per Drummond J. In so stating his Honour referred to two cases in which voluntary bankruptcies had been annulled on the application of the bankrupt in the face of evidence of solvency. The circumstances in those cases were described by him as follows: In Re McCormack (unreported, 6 April 1990), Pincus J granted such an application where the evidence showed that the debtor was solvent at the time he presented his petition; it also seems that that continued to be in the position right up to the time the application was heard by his Honour, although there was reason to think that if an action then on foot went against the bankrupt, he would then become insolvent. In Re Goo Tuck; Ex parte Goo Tuck (1892) 2 BC (NSW) 95, annulment was ordered on the application of the bankrupt who was without assets and whose only liabilities were in respect of his involvement in a partnership. When he presented his petition, he was unaware that his infancy was an answer to the claims of all his creditors. At that time, the position thus was that he owed no enforceable debts of any kind, that is, he could probably be regarded as solvent. The two cases cited by Drummond J were therefore ones where it was apparent that the debtor was not insolvent at the time the bankruptcy was declared. [14]In Re Almassy [1999] FCA 1004 Mansfield J examined the wording of s 153B and relevantly to the issues in this application said: In my judgment, it is necessary for the applicant to establish some circumstance which meant that she was not eligible to present the petition to establish that it ought not have been presented. It is only if that point is reached that the court has a discretion to annul the bankruptcy. The expression “ought not to have been made” in s 153B in respect of a sequestration order being cancelled requires there to be shown that there was some matter upon which the order was made which was not in fact correct, although that might be shown not just from the facts as disclosed at the time, but as they would have been disclosed had all the true facts been disclosed at the time of the making of the order: Re Gollan (1992) 40 FCR 38 at 40–42 per Spender J and cases referred to therein. In Re Whithall (unreported, Federal Court, Kiefel J, No QG 7598 of 1997, 7 August 1998), Kiefel J said that it was necessary to show that, on the true facts, the judicial officer was bound not to make a sequestration order: see also per Fisher J in Re Frank (1987) 16 FCR 396. In respect of the expression “ought not to have been received”, a similar threshold has been required. I have referred to decisions on that expression above. Moore J in Re Abbas (at 142) noted that the expression “ought not to have” has been treated as comprehending [page 568] circumstances where the Registrar or judge making the order was not aware of facts that, had they been known, would have resulted in no sequestration order being made. His Honour noted also that a similar approach had been adopted to the expression “ought not to have been presented” in relation to a debtor’s petition. Thus, if the debtor was solvent at the time the petition was presented, the bankruptcy can be annulled: Re McCormack (unreported, Federal Court, Pincus J, 6 April 1990); Re Coyle (1993) 42 FCR 72.

There is every reason to apply the expression “ought not to have” consistently to the terms “made” “presented” and “received” in s 153B: Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 per Mason J [15]It was not in contest in this proceeding that the primary court was required to approach the section looking first to find whether ineligibility is established and then exercising the general discretion made appropriate by the use of the word “may”. Nor was it in contest that the court was entitled to consider not only the case as disclosed at the time the order was made, but as it would have been disclosed had all the true facts been known: Re Williams [1968] 13 FLR 10 at 23; Re Dunn [1949] 1 Ch 640; Re Scott (1975) 6 ALR 558; Re Ditfort (1988) 19 FCR 347; Re Gollan (1992) 40 FCR 38. The case the appellant was required to make was one required to be discharged to the civil onus: Edelsten v Deputy Commissioner of Taxation (NSW) (1989) 86 ALR 257. [82,310.20] “ought not to have been made” These words do not mean not only upon the case as disclosed at the time, but as it would have been disclosed had all the true facts, as shown in the application for discharge, been before the judge on the making of the sequestration order: Re Griffiths; Ex parte Huntley (1892) 3 BC (NSW) 6. Thus the facts that a bankrupt stood by at the time of the entry of default judgment and that he did nothing in respect of the bankruptcy notice or the creditor’s petition do not alter the factual situation as it truly existed at the time of the making of the sequestration order. In Re Raymond; Ex parte Raymond (1992) 36 FCR 424, Spender J annulled a bankruptcy where the bankrupt had stood by and done nothing to set aside default judgment or the bankruptcy notice, and had not contested the creditor’s petition yet later succeeded in having default judgment set aside because the true contractual liability and consequent indebtedness was that of his company and not his personal liability. In making the annulment order, Spender J declined to follow an earlier decision of Lucas J in Re Scott [1975] Qd R 125 where it was held that the applicant for annulment must show that the sequestration order “ought not to have been made” upon the facts as they existed at the date when the sequestration order was made. Lucas J concluded that in that case the bankrupt did not bring himself within the section as at the date of the sequestration order the judgment debt was still standing, and no application had been made for it to be set aside. The correct approach is to consider whether there is not and was not in truth and reality a debt which founded the creditor’s petition. The fact that the proceedings to set aside the judgment debt had not been initiated at the time of the making of the sequestration order will not lead to the conclusion that the discretion to annul a bankruptcy should be exercised against the bankrupt. See also Re Deriu (1970) 16 FLR 420; Re Gollan; Ex parte Gollan (1992) 40 FCR 38; 113 ALR 475. Re Deriu, above, is also authority for the proposition that when a debtor is already bankrupt then the later sequestration order ought to be anulled. See also GIO Workers Compensation (NSW) Ltd v De Vita [2007] FMCA 1594; BC200708381. Re Deriu, above, is also authority for the proposition that when a debtor is already bankrupt then the later sequestration order ought to be annulled. See also GIO Workers Compensation (NSW) Ltd v De Vita, above. These cases were applied in Fitzpatrick v Kidney [2007] FMCA 1422; BC200707193. The court also applied Re Sarina; Ex parte Council of the Shire of Wollondilly (1980) 30 ALR 266; 43 FLR 163 to establish that “able to pay his debts” did not also mean “willing and able to pay his debts”. Following Sackville J in Wong; Ex parte Wong v Robinson [1995] FCA 805; BC9502840, the court indicated that the ascertainment of vital facts, such as a large credit balance able to easily satisfy the [page 569] petitioning creditor’s debt, moved the court to exercise its discretion to grant an annulment, but with the order conditioned so as to allow the debtor an opportunity to make arrangements to satisfy the debt.

The principles upon which the court operates are summarised judicially in Bulic v Commonwealth Bank of Australia [2007] FCA 307; BC200704737 at [12]: (1) An order can be made under s 153B(1) of the Act notwithstanding that the applicant has been discharged from bankruptcy; Re Oates; ex parte Deputy Commissioner of Taxation (1987) 17 FCR 402. (2) An applicant who seeks an annulment of his or her bankruptcy “carries a heavy burden”. It is incumbent on an applicant “to place before the Court all relevant material with respect to his or her financial affairs so that the Court may be properly informed and may make a judgment that is based on the actual circumstances of the applicant”: Re Papps; Ex parte Tapp (1997) 78 FCR 524 at 531. (3) In determining whether or not a sequestration order “ought not to have been made” the Court is not confined to a consideration of whether the order should have been made on the facts known to the Court at the time at which it was made. The Court must take account of facts, known at the time at which the sequestration order was made and at which it determines an annulment application, even if those facts were not before the Court at the time at which the sequestration order was made: Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at 243; Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (4) A sequestration order “ought not to have been made” if, on the facts known at the time of the annulment application, the Court would have been bound not to make the sequestration order: Re Frank; ex parte Piliszky (1987) 16 FCR 396. (5) The Court will be so satisfied if it is established that the debtor was not, at the time the sequestration order was made, indebted to the petitioning creditor: Re Deriu (1970) 16 FLR 420 at 422. (6) If the Court is so satisfied, it is not precluded from annulling the bankruptcy because the bankrupt had not sought to have the default judgment set aside or failed to oppose the creditor’s petition or failed to seek a review of the sequestration order: Re Raymond; ex parte Raymond (1992) 36 FCR 424 at 426. (7) The power conferred on the Court by s 153B(1) is discretionary in nature. Even if persuaded that the sequestration order ought not to have been made, the Court can, in appropriate circumstances, decline to annul the bankruptcy: Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at 243. (8) Considerations which may have a bearing on the exercise of discretion include unexplained delay in the making of the application, whether or not the applicant is solvent, whether or not the applicant has made full disclosure of his or her financial affairs and a failure by the bankrupt to oppose the creditor’s petition and attend the hearing at which the sequestration order was made: Re Williams (1968) 13 FLR 10 at 24–5; Boles at 247; Re Papps; ex parte Tapp (1997) 78 FCR 524 at 531; Rigg v Baker [2006] FCAFC 179 at [79]; Cottrell v Wilcox [2002] FCA 1115 at [7]. Additional considerations are collected in D. A. Hassall, “Annulment of Bankruptcy and Review of Sequestration Orders” (1993) 67 ALJ 761 at 766. These principles were applied by Linday FM in Farley v Official Trustee in Bankruptcy [2011] FMCA 10; BC201100055 and in Bond v Rees Group [2014] FCA 430; BC201403151. Re Deriu, above, and Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315; BC200308037 at [20] (per Carr, Finn and Sundberg JJ) were applied by Raphael FM in Yang v Mead [2009] FMCA 149; BC200901095, which concerned a debtor’s petition where the debtor spoke little English and where she had stated that she was solvent. The debtor sought to annul the sequestration order that followed from the presentation of her own petition. On the facts, and satisfied that there was

a case the magistrate declined the application to nullify the sequestration order. [page 570] [82,310.25] Discretion to annul This discretion is a wide one: Pattison v Hadjimouratis (2006) 155 FCR 226; [2006] FCAFC 153; BC200608577 at [172]. In Clarke v Furnari [2007] FMCA 513; BC200702666 McInnes FM adopted these considerations in exercising the discretion: (a) delay by the bankrupt in making the application (see Wong v Robinson [1995] FCA 805; BC9502840); (b) interest of creditors; (c) failure to file a statement as to affairs (see Piepkorn v Scott [2005] FCAFC 88; BC200503177 at [3]); (d) failure to make a full disclosure (see Pappas v Tapp (1997) 78 FCR 524 at 531; BC9705041); (e) making arrangements to pay the debt to the petitioning creditor and the trustees costs (see Wong v Robinson, above); (f) conduct of the bankrupt since bankruptcy including committing offences (see Ozer v Australian Liquor Marketers Pty Ltd [1999] FCA 1206; BC9906419 at [26]). In Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18; BC201401206 at [16] the Court (Rares Flick & Blomberg JJ) applied the following test: [16] Tracey J helpfully summarised a number of principles relevant to the exercise of the discretionary power conferred by s 153B in Bulic v Commonwealth Bank of Australia Ltd [2007] FCA 307; BC200704737 at [12] including the following: Section 153B(1) and its predecessors have been considered in many decisions of this and other Courts. These authorities establish a number of relevant propositions. They are: … (2) An applicant who seeks an annulment of his or her bankruptcy “carries a heavy burden”. It is incumbent on an applicant “to place before the Court all relevant material with respect to his or her financial affairs so that the Court may be properly informed and may make a judgment that is based on the actual circumstances of the applicant”: Papps v Tapp (1997) 78 FCR 524 at 531; BC9705041. (3) In determining whether or not a sequestration order “ought not to have been made” the Court is not confined to a consideration of whether the order should have been made on the facts known to the Court at the time at which it was made. The Court must take account of facts, known at the time at which the sequestration order was made and at which it determines an annulment application, even if those facts were not before the Court at the time at which the sequestration order was made: Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at 243; [2001] FCA 639; BC200102997; Re Raymond (1992) 36 FCR 424 at 426; BC9203599. (4) A sequestration order “ought not to have been made” if, on the facts known at the time of the annulment application, the Court would have been bound not to make the sequestration order: Re Frank; Ex parte Piliszky (1987) 16 FCR 396; 77 ALR 511. … (6) If the Court is so satisfied, it is not precluded from annulling the bankruptcy because the

bankrupt had not sought to have the default judgment set aside or failed to oppose the creditor’s petition or failed to seek a review of the sequestration order: Re Raymond (1992) 36 FCR 424 at 426; BC9203599. (7) The power conferred on the Court by s 153B(1) is discretionary in nature. Even if persuaded that the sequestration order ought not to have been made, the Court can, in appropriate circumstances, decline to annul the bankruptcy: Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at 243; [2001] FCA 639; BC200102997. (8) Considerations which may have a bearing on the exercise of discretion include unexplained delay in the making of the application, whether or not the applicant is solvent, whether or not the applicant has made full disclosure of his or her financial affairs and a failure by the bankrupt to oppose the creditor’s petition and attend the hearing at which the sequestration order was made: Re Williams [1969] ALR 179; (1968) 13 FLR 10 at 24–5; Boles at 247; Papps v Tapp (1997) 78 FCR 524 at 531; BC9705041; Rigg v Baker (2006) 155 [page 571] FCR 531 at 548; 236 ALR 629; [2006] FCAFC 179; BC200610222 at [79] (per French J); Cottrell v Wilcox [2002] FCA 1115; BC200205248 at [7]. Additional considerations are collected in D. A. Hassall, “Annulment of Bankruptcy and Review of Sequestration Orders” (1993) 67 ALJ 761 at 766. At [29]–[30] the court added: [29] … In Clyne v Deputy Commissioner of Taxation (NSW) (1983) 48 ALR 545 at 547–548; 57 ALJR 673; 83 ATC 4532; BC8300095, Gibbs CJ, with whom Murphy, Wilson, Brennan and Deane JJ agreed, said of the phrase “final judgment” as used in ss 40(1)(g), (3)(d) and 41(3)(a) of the Act: A final judgment within the meaning of the provisions of the Bankruptcy Act has been held to mean a judgment obtained in an action by which the question whether there was a preexisting right of the plaintiff against the defendant is ascertained or established: … In other words it is a judgment which finally disposes of the rights of the parties: … The fact that a judgment is subject to appeal or that it may later be set aside or become inoperative does not mean that it is not final: … (Emphasis added). [30]The word “final” in the expression “final judgment or final order” in s 40(1)(g) is used in this sense: Autron Pty Ltd v Benk (2011) 195 FCR 404 at 411; 280 ALR 417; [2011] FCAFC 93; BC201105552 at [26] per Lander, Tracey and Yates JJ. An order for costs that are subsequently quantified in a sum certain by a taxation and, pursuant to rules of court, then inserted into an order that the amount be paid, is a final order for the purposes of s 40(1)(g) of the Act: Worchild v The Drink Nightclub (Qld) Pty Ltd (2005) 224 ALR 339 at 341; [2005] FCAFC 240; BC200509978 at [10] per Kiefel, Jacobson and Greenwood JJ. [82,310.30] Alternative to set aside sequestration order This alternative, referred to in Pattison v Hadjimouratis (2006) 155 FCR 226; 236 ALR 1; [2006] FCAFC 153; BC200608577 was considered in Gleeson v Storey [2008] FMCA 696; BC200804250. There Smith FM said (at [11]) that if this alternative procedure was not suggested by the parties it should not be put forward by the court. The trustee supported the annulment and the former bankrupt undertook to meet his costs of the administration, thus disposing of the main discretionary issue. This alternative action is to set aside the sequestration order under r 16.05(2)(a) of the Federal

Magistrates Court Rules 2001. This procedure and annulling the bankruptcy are seen as alternative events (or non-events) such as failure to effect service. See Anbar (in bankruptcy) v Linfox Australia Pty Ltd [2010] FMCA 717; BC201007499 at [18]; Vaucluse Hospital Pty Ltd v Phillips [2006] FMCA 44; BC200600176 and Vonidis v BMW Australia Finance Ltd [2010] FMCA 972; BC5201010141. [82,310.45] Failure to prove service In Vonidis v BMW Australia Finance Ltd [2010] FMCA 972; BC201010151 where service had not been proven the court, following Boles v Official Trustee in Bankruptcy (2001) 183 ALR 239 at 243; [2001] FCA 639; BC200102997 and applying Sandell v Porter (1966) 115 CLR 666 at 670; 40 ALJR 71; BC6600670 nonetheless declined either setting aside the order under r 16.05(2)(a) of the Federal Magistrates Court Rules 2001 or annulment on the ground that the debtor was not solvent.

____________________

[82,315] Effect of annulment *154 (1) If the bankruptcy of a person (in this section called the former bankrupt) is annulled under this Division: (a) 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 are taken to have been validly made or done; and [page 572] (b) the trustee may apply the property of the former bankrupt still vested in the trustee in payment of the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee; and (c) subject to subsections (3), (6) and (7), the remainder (if any) of the property of the former bankrupt still vested in the trustee reverts to the bankrupt. (2) If the property of the former bankrupt referred to in paragraph (1)(b) is insufficient to meet the costs, charges and expenses referred to in that paragraph, the amount of the deficiency is a debt due by the former bankrupt to the trustee and is recoverable by the trustee by action against the former bankrupt in a court of competent jurisdiction. (3) If an application is made to the Court by a person claiming an interest

in property referred to in paragraph (1)(c), the Court, after hearing such persons as it thinks fit, may make an order, either unconditionally or on such conditions as the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person in whom, or to whom, it seems to the Court to be just and equitable that it should be vested or delivered, or to a trustee for that person. (4) Subject to subsection (5), if an order vesting property in a person is made under subsection (3), the property vests immediately in the person without any conveyance, transfer or assignment. (5) If: (a) the property to which such an order relates is property the transfer of which is required by a law of the Commonwealth, of a State or of a Territory to be registered; and (b) that law enables the registration of such an order; the property, even though it vests in equity in the person named in the order, does not vest in that person at law until the requirements of that law have been complied with. (6) The Court may make an order directing the trustee not to pay or transfer the property, or a specified part of the property, referred to in paragraph (1)(c) to the former bankrupt if: (a) an application is made for an order under this subsection by a person mentioned in subsection (6A); and (b) the Court is satisfied that: (i) proceedings are pending under a proceeds of crime law; and (ii) property of the former bankrupt may: (A) become subject to a forfeiture order or interstate forfeiture order made in the proceedings; or (B) be required to satisfy a pecuniary penalty order or interstate pecuniary penalty order made in the proceedings. [subs (6) am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003; Act 174 of 2011 s 3 and Sch 2[146], opn 1 Jan 2012]

[page 573]

(6A) For the purposes of paragraph (6)(a), the application may be made by: (a) in the case of pending proceedings in relation to a forfeiture order or a pecuniary penalty order under the Proceeds of Crime Act 2002 — the Commonwealth proceeds of crime authority that is, or that is proposed to be, the responsible authority for the application for the order under that Act; or (b) in the case of pending proceedings under a corresponding law — a person who is entitled to apply for an interstate confiscation order under the corresponding law. [subs (6A) insrt Act 174 of 2011 s 3 and Sch 2[147], opn 1 Jan 2012]

(7) The Court, on application made to it, may vary or revoke an order made under subsection (6). [s 154 subst Act 9 of 1992 s 29] SECTION 154 GENERALLY [82,315.10] Effect of annulment Under s 81 of the Bankruptcy Act 1869 (UK) the effect of annulment was stated by Cockburn CJ in Bailey v Johnson (1872) LR 7 Ex 263 at 265 in the following terms: The effect of s 81 is, subject to a bona fide disposition lawfully made by the Trustee prior to the annulling of the bankruptcy, and subject to any condition which the court annulling the bankruptcy may, by its order impose, to remit the party whose bankruptcy is set aside to his original situation. See also per Clyne J in Re Lawson (1939) 11 ABC 137. In Theissbacher v MacGregor Garrick & Co (a firm) [1993] 2 Qd R 223 the Court of Appeal held that if a trustee elects to discontinue an action after reveiving a notice under s 60(3) requiring him or her to do so, a former bankrupt can, upon annulment of the bankruptcy, revive the action in any event. See also S Dutson, “Theissbacher v MacGregor Garrick & Co, or, How a ‘Bankrupt’ Can Go Scot Free” (1993) Bond Law Review, Vol 5, No 1, p 111; and D A Hassett, “Annulment of Bankruptcy and Review of Sequestration Orders” (1993) ALJ, Vol 67, No 11, p 761 for a further discussion on the effect of annulment and the practice and procedure relating thereto. The statute does not deal precisely with the effect of an appeal on a sequestration order. An authoritative pronouncement is the judgment of Gyles J in Rangott v Marshall (2004) 139 FCR 14; [2004] FCA 961; BC200404552, where, after a careful consideration of the authorities his Honour said at [29]: [29] I am bound by Simon v Vincent J O’Gorman Pty Ltd to conclude that the appellate provisions apply to a sequestration order. That being so, they cannot be read down. It would follow from the Full Court decision that the sequestration order made on 13 August 2002 and the consequent appointment of the applicant as trustee are set aside. If full effect is given to these provisions it is as if the sequestration order had never been made and the respondent had never been a bankrupt. On that basis the applicant is no longer trustee of the estate of the respondent and was not trustee at the date this proceeding was commenced. That conclusion appears to be consistent with the reasoning in Guss v Johnstone (2000) 74 ALJR 884; 171 ALR 598 at [56] [63] that concerned a different, but not dissimilar, issue although no argument by counsel was directed to that decision. Precisely how the eggs broken from 13 August 2002 to the present day are to be unscrambled is a

question that does not arise in the present proceeding (cf the authorities referred to by Sackville J in Shephard v Chiquita Brands South Pacific Ltd [2004] FCAFC 76 at [65]). In Union Club v Battenberg [2006] NSWCA 72; BC200604062 the NSW Court of Appeal (Giles, Santow and Bryson JJA) dealt with the effect of annulment by a majority with reasoning that is likely to be applied unless, or until, the High Court deals with such a matter. All three judges of appeal considered the legal history of annulment exhaustively. The respondent, the Union Club, [page 574] possesses a rule as do many other gentlemen’s clubs that determines a member’s membership upon bankruptcy. The appellant had been a member of the club, had been made bankrupt, and had then reverted to his previous status upon obtaining an annulment. The Court of Appeal had to consider whether that previous status necessarily impacted upon that rule. The majority concluded that the rule was effective. Giles JA held that although the law could create a presumptive version of facts it could not determine the non-existence of historical truth, and could not therefore act as though the events had never happened though it could in all other respects restore the appellant to the status quo ante. Santow JA would have upheld the appeal of the ground that this interpretation was a necessary consequence of the annulment, and Bryson JA held that the consequences of a private agreement (which the appellant’s club membership involved) could be construed according to its words and did not, in this case, deal with the effects of annulment at all. See [188]. Readers should consider all three judgments though, on the question of clubs and their rules, the judgment of Bryson JA is likely to be persuasive. The judgments in that case must be read against the background that, to use the court’s words in Zegarac v Rambaldi [2010] FCA 219; BC201001290, “Effectively, s 154(1) prevents the undoing of whatever the trustee in bankruptcy has done during the period between the making and the annulment of a sequestration order. Whatever has been done during the whole of the period of the bankruptcy is validated.” [82,315.15] Invalid service In Re Mills; Ex parte Bondor Pty Ltd (FCA, Burchett J, No 1683/90, 18 June 1991, unreported, BC9102992) Burchett J dealt with the situation where reliance is made upon a statutory process of service, but where it is positively proven that the bankruptcy notice in question was not served. In such a case, his Honour held that the bankruptcy notice is a nullity under s 154 of the Bankruptcy Act. His Honour relied chiefly upon Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 96; 48 ALR 1 where, in a joint judgment, the court came to the conclusion that Imperial authority established the principle that: … proof of non-delivery means that service cannot be deemed to have taken place … at the time of delivery in the ordinary course of the post and cannot be established as having taken place at any other time. The consequence is that where it is necessary to establish service at a particular time, proof of non-delivery is as effective as proof of non-service, notwithstanding that service by post is in the circumstances permitted and the requirements of the Interpretation Act [of the United Kingdom] are observed … The consequence was that nullity had been established pursuant to s 154. [82,315.20] Costs of administration Annulment and termination of a bankruptcy do not affect the liability of a former bankrupt to pay costs, charges and expenses of the administration. In Maxwell-

Smith v Donnelly [2005] FCA 332; BC200501685 these costs exceeded the claim made by the petitioning creditor. Wilcox J held that the words of the section focused upon the conduct of the trustee which is said to activate the power given by s 154(1): at [5]. In Holden v Van Houten [2012] FCA 4; BC201200038, a decision of Jessup J was an application of s 153B, which in turn called for the employment of subs (1) and (2) of the present section. The judge dealt with the application of an important principle in the following words: [12] The respondent placed much reliance upon the following passage rom the judgment of Weinberg J in Kyriackou v Shield Mercantile Pty Ltd (No 2) [2004] FCA 1338 at [42]: It seems to me that a trustee who administers a bankrupt estate, in the knowledge that the bankrupt is challenging the validity of the sequestration order, must exercise caution when incurring expenses whilst the status of the bankruptcy remains uncertain. I can well understand why, in Austral, given the facts of that case, involving as it did a resolution of a dispute between a debtor and a creditor, Emmett J concluded that it was appropriate to order the annulment of the bankruptcy, rather than simply setting aside the sequestration order. There was something to be said for making the putative bankrupt’s estate meet the costs needlessly thrown away, particularly given the fact that there had been a short administration. [page 575] The argument for fixing the estate with the costs and expenses of the administration seems to me to be less cogent when the putative bankrupt should never have been the subject of a sequestration order in the first place. That is particularly so when the sequestration order is based upon a bankruptcy notice that has always been attacked as invalid. His Honour’s reasoning has been applied by the Federal Magistrates Court in other cases. However, the very point which his Honour had to decide — in circumstances where he had previously ruled that the bankruptcy notice, which gave rise to the sequestration order, was invalid — was whether the proceeding should be determined by an order setting aside the bankruptcy, or by an order annulling the bankruptcy. Recognising that an order of the latter kind would give rise to the trustee’s entitlements under s 154 of the Act, and seeing no reason why the person who had wrongly been made bankrupt in that case should bear the costs of the trustee, his Honour decided that he would set aside the bankruptcy, rather than annul it. [13]By contrast in the present case, an order by way of annulment was made under s 153B of the Act, and so made on the application of the respondent herself. There is no scope for me to exercise the discretion which lay in the power of Weinberg J in Kyriackou to choose as between annulling, and setting aside, the bankruptcy. Once the bankruptcy had been annulled in the present case, the applicant’s rights flowed under s 154 as a matter of statutory entitlement. The considerations to which Weinberg J adverted in Kyriackou are, therefore, of no application in the present case.

____________________ *Editor’s note: Section 154 was substituted by the Bankruptcy Amendment Act 1991 No 9 of 1992 s 29. Section 56 of the Bankruptcy Amendment Act 1991 No 9 of 1992 provides as follows:

Pending proceedings for annulment of bankruptcy under section 154 56 (1) Any proceeding that was pending before the Court immediately before the repeal of section 154 of the Principal Act for an order annulling a bankruptcy on a ground set out in paragraph 154(1)(b) of that Act lapses upon the repeal of that section. (2) Any proceeding that was pending before the Court immediately before the repeal of section 154 of the Principal Act for an order annulling a bankruptcy on a ground set out in paragraph 154(1)(a) of that Act continues as if it were a proceeding before the Court under section 153B of that Act as amended by this Act, and the Court may give such directions and make such orders as are necessary to resolve any difficulties of practice, procedure or otherwise in giving effect to this subsection. For the text of the repealed s 154 and the full commencement provisions of Act 9 of 1992, see [79,950] following the Table of Amendments to this Act.

PART VIII — TRUSTEES DIVISION 1 — APPOINTMENT AND OFFICIAL NAME

[82,375] Application to become a registered trustee *154A (1) An individual may apply to the Inspector-General to be registered as a trustee. (2) The application must be in the approved form. (3) The application must be accompanied by: (a) any information or documents prescribed by the regulations; and (b) the fee determined by the Minister by legislative instrument. [subs (3) am Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(4) The application is properly made if subsections (2) and (3) are complied with. [subs (4) insrt Act 11 of 1997 s 3 and Sch 1] [s 154A subst Act 44 of 1996 s 3 and Sch 1; am Act 11 of 1997 s 3 and Sch 1] SECTION 154A GENERALLY [82,375.5] Procedure See reg 8.01. [82,375.8] Fees See the Bankruptcy (Registration Charges) Act 1997 No 13. [82,375.10] Duties of trustees See [80,450.5] and [82,005.10]. [page 576] In Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262 the trustee failed to file

accounts in due time and failed to call a meeting of creditors. This constituted a failure to act with due diligence and prudence in the performance of his duty as trustee and thus constituted a breach of trust which made it appropriate that the trustee no longer be registered. Although trustees acting honestly with ordinary prudence and within the limits of their trust are not liable for mere errors of judgment (Re Chapman [1896] 2 Ch 763) there is a proviso that a trustee must act with reasonable care, prudence and circumspection. Once it is shown that he has neglected his duty he is prima facie answerable for all the consequences of that neglect: Re Brogden; Billing v Brogden (1888) 38 Ch D 546. [82,375.20] Employees as registered trustees In Lamb v Registrar in Bankruptcy (Vic) (1984) 4 FCR 269; 56 ALR 521, the trial judge ordered that the appellant’s registration as trustee be cancelled not because of any impropriety on his part as trustee but on the grounds that his employer/employee relationship with his employer rendered him a person whom the court should not think qualified to act as a trustee. However the court on appeal held that because of the mere fact that an applicant for registration is an employee does not mean ipso facto that the applicant is not qualified to act as a trustee and is to be excluded from registration as a trustee. However, the court held that the employee could hardly be regarded as qualified to act as trustee nor could he continue to so act if it appeared that he had surrendered his independence. The reality as well as the appearance of independence and impartiality is a requirement of a trustee by law and a trustee in the employment of a firm of accountants is at a greater risk than a trustee in practice on his own account in terms of independence and impartiality. See also Re Hurt; Ex parte Hurt (1988) 80 ALR 236. [82,375.25] Trustee not an agent of his employers “When a trustee is appointed to administer a bankruptcy or for other purposes contemplated by the Act, he is appointed in his own right, not as an agent of his employer. It is the trustee, not his employer, who is accountable to the creditors and to the court. Indeed the weight of authority favours the view that he is an officer of the court: Martin v Powning (1868) 38 LJ Ch 212 at 216; Re Condon; Ex parte James [1874–80] All ER Rep 388 at 390; Ex parte Simmonds; Re Carnac (1885) 16 QBD 308 at 312; Re Tyler; Ex parte Official Receiver [1907] 1 KB 865 at 869; Re Thellusson; Ex parte Abdy [1919] 2 KB 735 at 754; Scranton’s Trustee v Pearse [1922] 2 Ch 87 at 119. A contrary view is expressed by Rogerson J in Re Ladyman (1981) 38 ALR 631 at 642 and adopted in Lewis A N, Australian Bankruptcy Law, 8th ed, Law Book Co, Sydney 1984, p 28”: Re Hurt; Ex parte Hurt (1988) 80 ALR 236 at 240–1. A person desirous of becoming registered as a trustee should be independent in the sense that he or she can carry out his or her duties as a trustee whenever required to do so and free from any control as may debar the person from giving his or her time and attention to the duties and responsibilities of a trustee. Accordingly an employee who is subject to the control of another is always likely to be subject to the risk of a conflict of duties in that the risk is that his or her duties as an employee might be prejudicial to his or her duties as a trustee. Thus in Re Hickman (1943) 13 ABC 138, the court refused an application for registration as a trustee where the applicant was a public accountant suitably qualified but who was in the employ of another public accountant as a managing clerk. [82,375.30] Is the trustee an officer of the court In Re Ladyman (1981) 38 ALR 631 Rogerson J observed that trustees are not officers of the court (unlike some liquidators) but they are nevertheless subject to the control of the court which may inquire into their conduct and remove them from office. Although the trustee must have regard to the directions given by resolution of the creditors at any general meeting, he or she must nevertheless exercise his or her own opinion. Thus where a trustee in his own opinion was satisfied that he should consent to a release but was wrongly influenced by the unwarranted and legally unauthorised directions of the creditors and consequently improperly refused to give consent, the court nevertheless directed that the trustee execute an instrument in writing consenting to the operation of the release in question, in fact overruling the wishes of the creditors: Re O’Keefe; Ex parte O’Keefe (1938) 10 ABC 153.

[82,375.40] Ethical standards and independence So far as possible conflicts of interest are concerned, the Statement of Ethical Rulings published by the Institute of Chartered Accountants in [page 577] Australia and the Code of Professional Conduct published by the Insolvency Practitioners Association embody what appear to be appropriate general guidelines, but ultimately the trustee proper, while deriving some guidance from such principles, must exercise his or her own judgment which may require a more stringent approach: Re Hurt; Ex parte Hurt (1988) 80 ALR 236 at 239 per French J.

____________________ *Editor’s note: Sections 154A and 155 apply only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996. The sections as they stood prior to substitution can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney 1996 ed at [82,375] and [82,380].

[82,380] Processing of an application *155 (1) After receiving a properly made application, the InspectorGeneral must convene a committee to consider the application. [subs (1) am Act 11 of 1997 s 3 and Sch 1]

(2) The committee must consist of: (a) the Inspector-General; and (b) an APS employee; and (c) a registered trustee chosen by the Insolvency Practitioner’s Association of Australia (ACN 002 472 362). [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) The committee must consider the application and interview the applicant. Note: The regulations may provide for the way in which the committee must do its work: see section 315. [s 155 subst Act 44 of 1996 s 3 and Sch 1] SECTION 155 GENERALLY [82,380.5] Procedure See regs 15A.01–15A.14. Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22; BC200600179 dealt with applications to re-open as follows at [24]:

[24] The authorities indicate that, broadly speaking, there are four recognised classes of case in which a court may grant leave to re-open, although these classes overlap and are not exhaustive. These four classes are: (1) fresh evidence (Hughes v Hill [1937] SASR 285 at 287; Smith v New South Wales Bar Association [No 2] (1992) 108 ALR 55 at 61–2); (2) inadvertent error (Brown v Petranker (1991) 22 NSWLR 717 at 728 (application to recall a witness); Murray v Figge (1974) 4 ALR 612 at 614 (application to tender answers to interrogatories); Henning v Lynch [1974] 2 NSWLR 254 at 259 (application to re-open); (3) mistaken apprehension of the facts (Urban Transport Authority of NSW v NWEISER (1992) 28 NSWLR 471 (“UTA”) at 478; and (4) mistaken apprehension of the law (UTA at 478). In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open: see UTA at 478; also The Silver Fox Company Pty Ltd as Trustee for the Baker Family Trust v Lenard’s Pty Ltd (No 2) [2004] FCA 1310 (“Silver Fox”) at [22] and [25]. The applicant, who had not previously quantified the costs flowing from the breach a bond, made an application to re-open their case. The application was refused because of that facts, it being determined that overriding principles of justice did not require such an action. His Honour also considered, though he did not need to do so, whether the circumstances required an election on the part of the applicant, holding that they did not. [page 578] [82,380.15] Prescribed body For the purposes of s 155(3A) the bodies are referred to in r 61A and Sch 2.

____________________ *Editor’s note: Sections 154A and 155 apply only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996. The sections as they stood prior to substitution can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney 1996 ed at [82,375] and [82,380].

[82,382] Committee’s decision on an application *155A (1) Time limit for decision Within 60 days of interviewing the applicant, the committee must decide whether the applicant should be registered as a trustee or not. (1A) Exam to assess suitability For the purpose of deciding whether the applicant should be registered, the Committee may require the applicant to sit for an exam. [subs (1A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) Mandatory decision in favour of registration The committee must

decide that the applicant should be registered if the committee is satisfied that the applicant: (a) has the qualifications, experience, knowledge and abilities prescribed by the regulations; and (b) will take out insurance against liabilities that the applicant may incur working as a registered trustee; and (c) has not been convicted, within 10 years before making the application, of an offence involving fraud or dishonesty; and (d) has not been a bankrupt or a party (as debtor) to a debt agreement or Part X administration within 10 years before making the application; and (e) has not had his or her registration as a trustee cancelled within 10 years before making the application on the ground that: (i) he or she contravened any conditions imposed by a committee on his or her practice as a registered trustee; or (ii) he or she failed to exercise the powers of a registered trustee properly; or (iii) he or she failed to carry out the duties of a registered trustee properly; or (iv) he or she failed to properly carry out the duties of an administrator in relation to a debt agreement; and (f) has not had his or her registration as a debt agreement administrator cancelled under section 186K, within 10 years before making the application, on the ground that he or she failed to properly carry out the duties of an administrator in relation to a debt agreement; and (g) has not had his or her registration as a debt agreement administrator cancelled, within 10 years before making the application, as a result of an order under section 185ZCA. [subs (2) am Act 44 of 2007 s 3 and Sch 1[8], [9], opn 11 Apr 2007; Act 44 of 2007 s 3 and Sch 2[3], opn 1 July 2007]

(3) Discretion to decide in favour of registration If the committee considers that the applicant is suitable to be registered as a trustee, it may decide that the applicant should be registered even if it is not satisfied that the applicant has the qualifications, experience, knowledge and abilities prescribed by the regulations for the purposes of paragraph (2)(a).

(4) Mandatory decision against registration The committee must decide that the applicant should not be registered if it is satisfied that the applicant: [page 579] (a) will not take out insurance against liabilities that the applicant may incur working as a registered trustee; or (b) has been convicted, within 10 years before making the application, of an offence involving fraud or dishonesty; or (c) has been a bankrupt or a party (as debtor) to a debt agreement or a Part X administration within 10 years before making the application; or (d) has had his or her registration as a trustee cancelled within 10 years before making the application on the ground that: (i) he or she contravened any conditions imposed by a committee on his or her practice as a registered trustee; or (ii) he or she failed to exercise the powers of a registered trustee properly; or (iii) he or she failed to carry out the duties of a registered trustee properly; or (iv) he or she failed to properly carry out the duties of an administrator in relation to a debt agreement; or (e) has had his or her registration as a debt agreement administrator cancelled under section 186K, within 10 years before making the application, on the ground that he or she failed to properly carry out the duties of an administrator in relation to a debt agreement; or (f) has had his or her registration as a debt agreement administrator cancelled, within 10 years before making the application, as a result of an order under section 185ZCA. [subs (4) am Act 44 of 2007 s 3 and Sch 1[10], [11], opn 11 Apr 2007; Act 44 of 2007 s 3 and Sch 2[4], opn 1 July 2007]

(4A) The Committee must decide that the applicant should not be registered if the Committee is not satisfied that the applicant has the ability (including knowledge) to perform satisfactorily the duties of a registered

trustee. [subs (4A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(5) Conditions on registration If the committee decides that the applicant should be registered, it may decide that specified conditions should apply to the applicant’s practice as a registered trustee. (6) Report of decision The committee must give the applicant and the Inspector-General a report on all of its decisions relating to the application, and the reasons for them. (7) Review of decision The applicant may apply to the Administrative Appeals Tribunal for review of a decision of the committee. [s 155A subst Act 44 of 1996 s 3 and Sch 1] SECTION 155A GENERALLY [82,382.5] Qualifications See reg 8.02.

____________________ *Editor’s note: Section 155A applies only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996. The section as it stood prior to substitution can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney 1996 ed at [82,375] and [82,380].

[82,383] Effect of committee’s decision *155B The Inspector-General must give effect to all of the committee’s decisions, subject to paragraph 155C(1)(b). [s 155B subst Act 44 of 1996 s 3 and Sch 1] *Editor’s note: Section 155B applies only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996. Section 155B as it stood prior to its substitution by Act 44 of 1996 can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney, 1996 ed at [82,383].

[page 580]

[82,383C] Registration as a trustee **155C (1) The Inspector-General must register the applicant as a trustee if: (a) the committee has decided that the applicant should be registered; and (b) the applicant has paid the fee determined by the Minister by legislative instrument. [subs (1) am Act 11 of 1997 s 3 and Sch 1; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(2) The Inspector-General registers an applicant by entering in the National Personal Insolvency Index the details relating to the applicant that are prescribed in the regulations. (3) After registering a person as a trustee, the Inspector-General must give the person a certificate of registration. (4) The registration has effect for 3 years. [s 155C insrt Act 44 of 1996 s 3 and Sch 1] **Editor’s note: Sections 155C–155J as inserted by Act 44 of 1996 apply only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996.

[82,383D] Extension of registration *155D (1) The Inspector-General must extend the registration of a person as trustee for three years from the expiry of the person’s registration if: (a) the person applies in writing to the Inspector-General for the extension before the person’s registration expires; and †(b) the person has paid the fee determined by the Minister by legislative instrument (and any late payment penalty under subsection (3) of this section). [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006] †(2) The Inspector-General must not extend the registration of a person if:

(a) the person owes a total of more than $50 for the following: (i) charge under the Bankruptcy (Estate Charges) Act 1997 (the estate charge);

(ii) penalty under section 281 of this Act in respect of that charge; and (b) the Inspector-General notified the person of the unpaid estate charge at least 14 days before the due date for payment of the charge under subsection (3) on the extension of the registration. [subs (2) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] †(3) The fee for an extension of registration is

due for payment one month before the expiry of the registration. If the fee is not paid by then, an additional amount equal to 20% of the fee is payable by the trustee by way of penalty. [subs (3) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006] [s 155D insrt Act 44 of 1996 s 3 and Sch 1; am Act 11 of 1997 s 3 and Sch 1] *Editor’s note: Sections 155C–155J as inserted by Act 44 of 1996 apply only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996. †Editor’s note: The amendments made to s 155D at subss (1)(b), (2) and (3) by Act 131 of 2002 “apply to extensions of registration with an expiry date that is at least 3 months after the commencing date”: Sch 1 Pt 2 cl 227 of Act 131 of 2002.

[page 581]

[82,383E] Application for change of conditions on practising as a registered trustee *155E (1) If a committee has decided under this Division that conditions should apply to a person’s practice as a registered trustee, the person may apply to the Inspector-General for the conditions to be changed or removed. (2) The application must be in the approved form. (3) The application must be accompanied by any information or documents prescribed by the regulations. [subs (3) subst Act 34 of 2006 s 3 and Sch 3, opn 1 July 2006]

(3A) The application is properly made if subsections (2) and (3) are complied with. [subs (3A) insrt Act 11 of 1997 s 3 and Sch 1]

(4) After receiving a properly made application, the Inspector-General must convene a committee to consider the application. [subs (4) am Act 11 of 1997 s 3 and Sch 1]

(5) The committee must consist of: (a) the Inspector-General; and (b) an APS employee; and (c) a registered trustee chosen by the Insolvency Practitioners’ Association of Australia (ACN 002 472 363). [subs (5) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(6) The committee must consider the application and interview the applicant. Note: The regulations may provide for the way in which the committee must do its work: see section 315. [s 155E insrt Act 44 of 1996 s 3 and Sch 1]

[82,383F] Decision on application for change of conditions *155F (1) Within 60 days of interviewing the applicant, the committee must: (a) decide that the conditions on the applicant’s practice as a registered trustee should not be changed; or (b) decide that specified modifications should be made to the conditions that apply to the applicant’s practice as a registered trustee. Note: See the definition of modifications in subsection 5(1).

(2) The committee must give the applicant and the Inspector-General a report of its decision relating to the application, and the reasons for the decision. (3) The applicant may apply to the Administrative Appeals Tribunal for review of the committee’s decision. (4) The Inspector-General must give effect to the committee’s decision. [s 155F insrt Act 44 of 1996 s 3 and Sch 1]

[82,383G] Voluntary termination of registration

*155G (1) A person who is a registered trustee may give the InspectorGeneral a written request that the person cease to be registered as a trustee. [page 582] (2) The person ceases to be registered as a trustee when the InspectorGeneral accepts the request. [s 155G insrt Act 44 of 1996 s 3 and Sch 1] *Editor’s note: Sections 155C–155J as inserted by Act 44 of 1996 apply only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996.

[82,383H] Consideration of involuntary termination of registration *155H (1) The Inspector-General may ask a registered trustee to give the Inspector-General a written explanation why the trustee should continue to be registered, if the Inspector-General believes that: (a) the trustee no longer has a qualification or ability that is prescribed by the regulations made for the purposes of paragraph 155A(2)(a); or (aa) the trustee no longer has the ability (including knowledge) to perform satisfactorily the duties of a registered trustee; or (b) the trustee has been convicted of an offence involving fraud or dishonesty since registration as a trustee; or (c) the trustee is not insured against liabilities that the trustee may incur, or has incurred, working as a registered trustee; or (d) the trustee is no longer practising as a registered trustee; or (e) the trustee has contravened any conditions imposed by the committee on the trustee’s practice; or (f) the trustee has failed to exercise powers of a registered trustee properly or has failed to carry out the duties of a registered trustee properly; or

(fa) if the trustee is or was the administrator of a debt agreement — the trustee has failed to properly carry out the duties of an administrator in relation to a debt agreement; or (g) the trustee has failed to comply with a standard prescribed for the purposes of subsection (5). [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 80 of 2004 s 3 and Sch 3, opn 1 Dec 2004; Act 44 of 2007 s 3 and Sch 1[12], opn 11 Apr 2007]

(2) If the Inspector-General does not receive an explanation within a reasonable time, or is not satisfied by the explanation, the Inspector-General must convene a committee to consider whether the trustee should continue to be registered. (3) The committee must consist of: (a) the Inspector-General; and (b) an APS employee; and (c) a registered trustee chosen by the Insolvency Practitioners’ Association of Australia (ACN 002 472 362). [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) In considering whether the trustee should continue to be registered, the committee must take into account the matters mentioned in paragraphs (1)(a) to (g). Note: The regulations may provide for the way in which the committee must do its work: see section 315. [subs (4) am Act 80 of 2004 s 3 and Sch 3, opn 1 Dec 2004]

(5) The regulations may prescribe standards applicable to the exercise of powers, or the carrying out of duties, of registered trustees. [subs (5) insrt Act 80 of 2004 s 3 and Sch 3, opn 1 Dec 2004] [s 155H insrt Act 44 of 1996 s 3 and Sch 1]

[page 583]

[82,383I] Decision on involuntary termination of registration *155I (1) The committee must: (a) decide that the trustee should continue to be registered; or

(b) decide that the trustee should cease to be registered. (2) The committee may decide under paragraph (1)(a) that: (a) the trustee should continue to be registered unconditionally; or (b) the trustee should continue to be registered on the condition that: (i) the trustee meets specified conditions; or (ii) specified conditions are imposed on the trustee’s practice; or (iii) specified modifications are made to conditions on the trustee’s practice. Note: See the definition of modifications in subsection 5(1).

(3) The committee may decide under paragraph (1)(b) that: (a) the trustee should cease to be registered unconditionally; or (b) the trustee should cease to be registered if the trustee fails to meet specified conditions. (4) The committee must give the trustee and the Inspector-General a report of its decision relating to the application, and the reasons for the decision. (5) The trustee may apply to the Administrative Appeals Tribunal for review of the committee’s decision. (6) The Inspector-General must give effect to the committee’s decision. Note: Sections 176 and 182 specify other circumstances in which a trustee may involuntarily cease to be registered. [s 155I insrt Act 44 of 1996 s 3 and Sch 1] SECTION 155I GENERALLY [82,383I.5] Review by AAT — s 155I(5) Registration of trustees and cancellation of their registration were formerly matters dealt with by the court. Now, the Act provides for administrative review of the Inspector-General’s decisions made on the advice of the committee. It seems likely that the AAT will have regard to cases decided under the previous regime concerning cancellation of registration of trustees. See [80,450.5] and [82,375.10]. [82,383I.10] Cancellation of registration of a person as a trustee In Re Humphreys and Walter (1931) 3 ABC 254, two registered trustees had been the subject of civil litigation for which a jury had found that they received fees as secret commissions. The trustees gave evidence before the jury and findings adverse to their testimony were reached. Lukin J inquired into those circumstances and had regard to the fact that the trustees not only had failed to file accounts in various estates although repeatedly reminded to do so, but had made certain unauthorised payments and otherwise acted in contravention of their duties. Orders were made cancelling their registration as trustees. Lukin J at 258 said: Before the court makes an order enrolling an applicant as a person qualified to act as trustee, it has to satisfy itself not only of his experience and competence as an accountant, but also of his honesty and good repute, and of his ability, as such, to command and retain the confidence of the court, if

the creditors and debtors in a bankruptcy proceeding, and of the general community. As such, each of the respondents was duly enrolled. Should I say that as such, in the face of this verdict, they retained such confidence … is the court … any longer justified in holding out the trustee in question as a fit and proper person to be entrusted with the important duties and grave responsibility which belongs to a trustee … [page 584] Before the court makes an order enrolling an applicant as a person qualified to act as trustee, it has to satisfy itself not only of his experience and competence as an accountant, but also of his honesty and good repute, and of his ability, as such, to command and retain the confidence of the court, if the creditors and debtors in a bankruptcy proceeding, and of the general community. As such, each of the respondents was duly enrolled. Should I say that as such, in the face of this verdict, they retained such confidence … is the court … any longer justified in holding out the trustee in question as a fit and proper person to be entrusted with the important duties and grave responsibility which belongs to a trustee … In Re Commins; Ex parte Registrar in Bankruptcy (1989) 21 FCR 55, Spender J held that the power to suspend for a specified period conferred by former s 155(5B) was to be exercised where the court is satisfied that there is something in the conduct of the trustee, either in respect of his or her duties as trustee or otherwise, which makes it proper not to permit him or her to act as trustee for a period. There has to be some finding by the court of unfitness or a disabling quality in the trustee personally before his or her registration as a trustee should be suspended for a specified period or cancelled. Spender J regarded the power to suspend as being exercisable only as a punitive or disciplinary matter and held that there is nothing prophylactic in the power given to the court to suspend a trustee. Further, Spender J held that the powers given in former s 155(5B) ought not to be exercised on the mere circumstance of a person being charged because to do so would mean that the trustee would suffer damages and be denied the capacity to earn an income without anything adverse to him or her having been established. Accordingly, in the absence of a provision which provided for suspension on the basis of a person being charged, Spender J held that it would be proper to inflict what would be a penalty on a person as a consequence of his or her being charged with an offence. In the absence of any such provision he decided that he ought not to infer any such a power.

____________________ *Editor’s note: Sections 155C–155J as inserted by Act 44 of 1996 apply only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996.

[82,383J] After termination of registration *155J (1) If a person ceases to be registered as a trustee for any reason, the person must give his or her certificate of registration to the Inspector-General before the end of the period of 7 days beginning on the day the person ceased

to be registered. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (1) am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 106 of 2010 s 3 and Sch 2[24] and [25], opn 1 Dec 2010]

(1A) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (1A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(1B) Subsection (1) does not apply if the person 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). [subs (1B) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) A person who ceases to be registered is not entitled to a refund of all or part of any registration fee that the person had paid. [s 155J insrt Act 44 of 1996 s 3 and Sch 1; am Act 24 of 2001 s 3 and Sch 5] *Editor’s note: Sections 155C–155J as inserted by Act 44 of 1996 apply only in relation to: (a) applications made after 16 December 1996; (b) persons who were registered trustees immediately before 16 December 1996; and (c) persons who became registered as trustees after 16 December 1996.

[page 585]

[82,383K] Payment of fees etc for application, registration and extension 155K If a person gives the Commonwealth a cheque or payment order in payment of a fee under section 154A, 155C or 155D, the amount is taken not to be paid until the cheque or payment order is paid by the institution on which it is drawn. [s 155K insrt Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

[82,385] Gazettal of registration etc **156 [s 156 rep Act 44 of 1996 s 3 and Sch 1] **Editor’s note: Section 156 as it stood prior to its repeal can be found in G Bigmore, Annotated

Bankruptcy Act 1966 & Rules, Butterworths, Sydney, 1996 ed at [82,385].

[82,390] Consent to act as trustee 156A (1) A registered trustee may, by instrument signed by him or her and filed with the Official Receiver, consent to act: (a) as the trustee of the estate of the debtor specified in the instrument in the event that the debtor becomes a bankrupt; or (b) as the trustee of the joint and separate estates of such of the debtors specified in the instrument, being members of a partnership or joint debtors who are not in partnership with one another, as may become bankrupts, or, if only one of those debtors becomes a bankrupt, as the trustee of the estate of that debtor. [subs (1) am Act 44 of 1996 s 3 and Schs 1, 2]

(2) An instrument under subsection (1) shall be in accordance with the approved form. [subs (2) am Act 44 of 1996 s 3 and Sch 1]

(3) Where: (a) at the time when a debtor becomes a bankrupt, a registered trustee has, under subsection (1), consented to act as the trustee of the estate of the debtor and the consent has not been revoked, the registered trustee becomes, at that time, by force of this subsection, the trustee of the estate of the bankrupt; and (b) at the time when 2 or more debtors, being members of a partnership or joint debtors who are not in partnership with one another, become bankrupts, a registered trustee has, under subsection (1), consented to act as the trustee of the joint and separate estates of those debtors and the consent has not been revoked, the registered trustee becomes, at that time, by force of this subsection, the trustee of the joint and separate estates of those bankrupts. (4) A creditor may file with the Court an application for the removal by the Court of a trustee of the estate of a bankrupt, being a trustee who is the trustee of that estate by virtue of subsection (3), on the ground: (a) that the trustee is not fit to act as trustee; or (b) that the connection of the trustee with, or the relation of the trustee to, the bankrupt is likely to make it difficult for him or her to act

with impartiality in the interests of the creditors generally. [subs (4) am Act 44 of 1996 s 3 and Schs 1, 2]

(5) Where an application under subsection (4) is filed, the Court may, if a ground specified in that subsection is established, remove the trustee from office and may appoint another registered trustee to be trustee in his or her place. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

[page 586] (5A) If the Court removes the trustee and appoints another trustee, the creditor who applied for the removal must give the Official Receiver written notice of the removal and appointment as soon as practicable. [subs (5A) insrt Act 44 of 1996 s 3 and Sch 1]

(6) Where the Court appoints a person as trustee under subsection (5), the Official Receiver must issue to the person a certificate of appointment. [subs (6) am Act 44 of 1996 s 3 and Sch 1]

(7) The appointment of a trustee under subsection (5) takes effect from and including the date on which the Court makes the appointment or such later date as the Court directs. [s 156A insrt Act 74 of 1981 s 136] SECTION 156A GENERALLY [82,390.5] Requirements for the operation of s 156A(3) A consenting trustee will only become trustee of an estate by virtue of s 156A(3) if a consent is obtained and filed in the proceedings in which the petition is accepted. Otherwise the Official Trustee will be the trustee of the estate: Re Agostino; Ex parte Jackson (1983) 78 FLR 142. See also Re Close (t/as FB Close Transport) (1983) 50 ALR 571. [82,390.10] Section 156A(3) — discretion of court There is no discretion vested in the court to prevent the appointment of a registered trustee who has consented to act. The sequestration order has the effect of automatically making him the trustee of the estate. See Re Smith; Ex parte Kern Corp Ltd (FCA, Pincus J, No QLD PET 373/85, 19 June 1985, unreported). The automatic appointment of the trustee is, however, subject to the court’s power under s 156A(4) to remove a trustee in the appropriate circumstances. But what happens when more than one trustee is appointed? In HP Merchantile Pty Ltd v Turco (No 2) [2010] FMCA 149; BC201001621 there were competing consents. This statute does not offer a solution. The court proposed the following: [20] The remaining question is what, if anything, the court should do with the competing consents signed by Messrs Lopez and Verge. The Bankruptcy Act does not envisage a circumstance where a creditor and debtor propose different trustees on a creditors petition. The scheme of the

legislation envisages that on a creditors petition it is the creditor rather than the debtor who proposes a registered trustee. That is why the creditor must serve a consent on the debtor. The position is the reverse on a debtor’s petition. That is why a copy of a trustee’s consent must be filed with a debtor’s petition (see Bankruptcy Regulation 4.12). It is the creditor who may file with the court an application to remove a trustee who has given consent pursuant to s 156A(3) of the Bankruptcy Act on the grounds of unfitness or partiality (s 156A(4)). Because the legislation does not envisage there being competing consents by registered trustees at the time of the making of a sequestration order, I take the view that ITSA should not receive a consent from a registered trustee in relation to the potential bankrupt estate of a particular debtor where another consent has already been received and has not been withdrawn or revoked and it does not appear that the second trustee will administer the estate jointly with the first trustee. I also take the view that ITSA should not receive a Consent to Act as Trustee lodged by a debtor on a creditors petition. A debtor is only entitled to nominate a trustee on a debtor’s petition. Nevertheless, the consents by Messrs Lopez and Verge have been received by ITSA, having been lodged on behalf of the debtors. [21]A similar circumstance arose in the case of Peter Klein v DCT; Official Trustee in Bankruptcy v William Edward Andrew. In that case a trustee’s consent had been filed with a debtors petition and had not been revoked. A different trustee’s consent had been filed with the creditors petition and it also had not been revoked. The Full Federal Court concluded that in the unusual circumstances of that case, both trustees became trustees of the bankrupt estate but that the problem could be resolved by either the creditors or the court, on application by one of the trustees or the controlling trustee under s 50 of the Bankruptcy Act. [page 587] [22] In the present case, there is no controlling trustee under s 50. No action was taken pursuant to that section. In my view, the consequence of competing consents having been given and accepted by ITSA is that, upon the making of a sequestration order, each of the trustees would be a trustee in bankruptcy of the estates of the debtors by operation of s 156A(3)(b) of the Bankruptcy Act. That inconvenient position can be resolved in a number of ways. It can be resolved on the application of a creditor, pursuant to s 156A(4) of the Bankruptcy Act. It can be resolved by the Official Receiver, pursuant to s 181A. It can be resolved by resolution of a meeting of creditors, pursuant to s 181. [23]In the meantime, some action is needed in order to direct who should take control of the administration of the bankrupt estates in the event that a sequestration order is made. In my view, the court has power under s 30 of the Bankruptcy Act to make appropriate orders. That is the course that I will take. In my view, Mr Reidy should administer the bankrupt estates upon the making of sequestration orders. He is the trustee of choice of the petitioning creditor and his consent was first in time and has not been withdrawn or revoked. The later consents lodged by the debtors should not have been accepted by ITSA. [82,390.12] Removal of trustee In Boral Montoro Pty Ltd v McLachlan [2007] FMCA 533; BC200702673, Wilson FM, having concluded that the appointment of a particular trustee was unsuitable, had to consider whether s 156A of the Bankruptcy Act is an exclusive code dealing with the circumstances in which a trustee can be removed. His Honour concluded that s 30(1) operates to decide whether a particular trustee should be appointed. He followed Rondo Building Services Pty Ltd v Starkey [2005] FMCA 275. He considered, at [17], that the better course would be to decline to make a sequestration order, as he would have

power to do pursuant to s 52(2)(b) of the Act. In Armstrong v Worrells Solvency And Forensic Accountants [2013] FCCA 1359; BC201312855 Burnett J set out a practical test at [3]: However, none of those matters have been substantiated in the material which is filed in this proceeding and, accordingly, they cannot be afforded any real weight, there having been no opportunity for the trustee to respond to any allegations of misfeasance. In any event, there is no real basis for the granting of the relief sought in the absence of any evidence of misfeasance on the part of the trustee. The only evidence before me indicates that the fees that are sought to be charged are reasonable, and that the trustee’s approach to seeking the recovery of these prior to undertaking any of the professional duties involved is also reasonable under the circumstances. [82,390.15] Consent Form See Approved Form 12. [82,390.20] Certificate of appointment See reg 8.06. [82,390.25] Time when debtor becomes a bankrupt Immediately a sequestration order is pronounced it becomes operative so that the debtor becomes a bankrupt with all the consequences which that entails including the consequence under s 156A(3). This is so even though the order has not been passed and entered and is thus provisional in the sense that it may be reviewed and reconsidered until signed and sealed: Cavanagh v Bank of New Zealand (1990) 22 FCR 124; 98 ALR 217.

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[82,395] Appointment of trustees *157 (1) Where a debtor becomes a bankrupt, the creditors may, if the Official Trustee is the trustee of the estate of the bankrupt, by resolution, at a meeting of creditors, appoint a registered trustee to the office of trustee of the estate of the bankrupt in place of the Official Trustee. [subs (1) subst Act 74 of 1981 s 137; am Act 119 of 1987 s 55]

[page 588] (2) The person (in this section referred to as the relevant trustee) who is the trustee of the estate of a bankrupt at the time of an appointment, under subsection (1), of a registered trustee as the trustee, or as one of the trustees, of the estate shall, as early as practicable, notify the registered trustee, in writing, that he or she has been so appointed. [subs (2) subst Act 74 of 1981 s 137; am Act 44 of 1996 s 3 and Sch 2]

(3) If the registered trustee appointed under subsection (1) informs the relevant trustee in writing, within 10 days after he or she is notified by the

relevant trustee of his or her appointment, that he or she accepts the office, the Official Receiver shall issue to him or her a certificate of appointment. [subs (3) am Act 74 of 1981 s 137; Act 44 of 1996 s 3 and Schs 1, 2]

(4) The appointment of a trustee under subsection (1) takes effect from and including the date of the certificate of appointment issued by the Official Receiver. [subs (4) am Act 12 of 1980 s 78; Act 44 of 1996 s 3 and Sch 1]

(5) If the registered trustee appointed under subsection (1) does not so inform the relevant trustee within 10 days after he or she is notified by the relevant trustee of his or her appointment, he or she shall be deemed to have declined the appointment, and the relevant trustee shall, unless the resolution of creditors has made provision for the contingency, convene another meeting of creditors as soon as practicable for the purpose of appointing, under subsection (1), another registered trustee to the office of trustee. [subs (5) am Act 74 of 1981 s 137; Act 44 of 1996 s 3 and Sch 2]

(6) A creditor may file with the Court an objection to an appointment of a person under this section on the ground: (a) that the appointment was not made in good faith by a majority in value of the creditors voting; (b) that the person appointed is not fit to act as trustee; or (c) that his or her connexion with, or relation to, the bankrupt or his or her estate or a particular creditor is likely to make it difficult for him or her to act with impartiality in the interests of the creditors generally. [subs (6) am Act 12 of 1980 s 78; Act 44 of 1996 s 3 and Schs 1, 2]

(7) Where such an objection is filed, the Court may, if any of the grounds specified in subsection (6) is established, cancel the appointment and may appoint another registered trustee to be trustee in his or her place. [subs (7) am Act 12 of 1980 s 78; Act 44 of 1996 s 3 and Sch 2]

(7A) If the Court cancels the appointment of a trustee and appoints another trustee, the creditor who filed the objection must give the Official Receiver written notice of the cancellation and appointment as soon as practicable. [subs (7A) insrt Act 44 of 1996 s 3 and Sch 1]

(8) Where the Court appoints a person as trustee under subsection (7), the Official Receiver must issue to the person a certificate of appointment. [subs (8) insrt Act 12 of 1980 s 78; am Act 44 of 1996 s 3 and Sch 1]

(9) The appointment of a trustee under subsection (7) takes effect from and including the date on which the Court makes the appointment or such later date as the Court directs. [subs (9) insrt Act 12 of 1980 s 78] SECTION 157 GENERALLY [82,395.5] Objection to appointment of trustee An objection under s 157(6) shall be by application: see FCR O 77 r 46.

____________________ *Editor’s note: See s 106(1) for application provisions.

[page 589]

[82,400] Appointment of more than one trustee etc 158 (1) The creditors may, if they think fit, appoint 2 or more registered trustees jointly, or jointly and severally, to the office of trustee, and in either such case the property of the bankrupt vests in those registered trustees as joint tenants. [subs (1) am Act 12 of 1980 s 79]

(2) The creditors may, if they think fit, appoint registered trustees to act as trustees in succession in the event of one or more of the registered trustees appointed declining to act or ceasing for any reason to hold the office of trustee. [subs (2) am Act 12 of 1980 s 79]

(3) In this section, a reference to a registered trustee, in relation to the appointment of a trustee of the estate of a bankrupt, includes a reference to a registered trustee who is, by virtue of subsection 156A(3), the trustee of the estate of the bankrupt. [subs (3) insrt Act 74 of 1981 s 138]

[82,405] Vacancy in office of trustee 159 (1) The creditors may, at a meeting of the creditors, fill any vacancy in the office of trustee.

[subs (1) am Act 119 of 1987 s 56]

(2) An Official Receiver shall, on the requisition of a creditor, summon a meeting of creditors for the purpose of filling such a vacancy. (3) For the purposes of this section, an office of trustee shall be deemed to be vacant notwithstanding that it is for the time being filled by the Official Trustee by reason of the operation of section 160. [subs (3) am Act 12 of 1980 s 80]

(4) The provisions of sections 157 and 158 apply, so far as they are capable of application, to and in relation to the appointment of a new trustee under this section. SECTION 159 GENERALLY [82,405.5] Appointment in case of vacancy There is no specific provision in the Act enabling appointment by the court of a trustee in place of another trustee of a bankrupt estate. Accordingly ss 159 and 160 when read together constitute a code in this area and upon the office of trustee being vacated, unless the creditors at a general meeting otherwise resolve, the Official Trustee becomes the trustee: Muir v Bradley (1984) 57 ALR 155. The provisions of s 159 apply to a vacancy created by the resignation of a trustee on the ground of ill-health: Ex parte Rangott (1992) 39 FCR 573.

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[82,410] Official Trustee to be trustee when no registered trustee is trustee 160 If at any time there is no registered trustee who is the trustee of the estate of a bankrupt, the Official Trustee shall, by force of this section, be the trustee of the estate. [s 160 subst Act 74 of 1981 s 139] [82,410.5] No requirement for order The section acts automatically without need for any order, as was the case in Coshott v Coshott [2013] FCA 156; BC201300798 when Buchanan J declined to make a substitution order for second defendant as trustee for the bankrupt estate saying the effect of the section was automatic.

____________________ [page 590]

[82,415] Trustee may act in official name 161 (1) The trustee of the estate of a bankrupt may sue and be sued by the prescribed official name and may, by that name, hold, dispose of or acquire property of every description, make contracts, enter into engagements binding on the trustee and his or her successors in office and do all other acts and things necessary or expedient to be done in the execution of his or her office. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) For the purposes of subsection (1), the prescribed official name is “The Trustee (or Trustees) of the Property of (name of bankrupt), a Bankrupt”. (3) This section applies to proceedings under the Family Law Act 1975 in a corresponding way to the way in which it applies to a suit. [subs (3) insrt Act 20 of 2005 s 3 and Sch 1, opn 18 Sep 2005]

(4) If: (a) a person (the first trustee) ceases to be the trustee of a bankrupt’s estate; and (b) proceedings to which the first trustee was a party were pending under the Family Law Act 1975 immediately before the cessation; and (c) another person (the second trustee) becomes the first trustee’s successor in office; the second trustee is, by force of this subsection, substituted for the first trustee as a party to the proceedings. [subs (4) insrt Act 20 of 2005 s 3 and Sch 1, opn 18 Sep 2005]

[82,420] Registered trustee to notify InspectorGeneral of certain events *161A (1) If a registered trustee is convicted of an offence involving fraud or dishonesty, the registered trustee must give the Inspector-General written notice of the conviction and the nature of the offence as soon as practicable. (2) If a registered trustee becomes a bankrupt, or enters as debtor into an insolvency administration, under the law of a foreign country, the registered trustee must give the Inspector-General written notice of the fact as soon as practicable.

[s 161A subst Act 44 of 1996 s 3 and Sch 1]

DIVISION 2 — REMUNERATION AND COSTS

[82,465] Trustee’s remuneration — minimum entitlement 161B (1) If the total remuneration payable to the trustee under section 162 would be less than the following amount (the statutory minimum): (a) $5,000; (b) if another amount is prescribed by the regulations for the purposes of this paragraph — that other amount; the trustee is entitled to be paid, from the funds in the bankrupt’s estate, additional remuneration equal to the shortfall. [subs (1) subst Act 106 of 2010 s 3 and Sch 1[9], opn 1 Dec 2010]

[page 591] (1A) The statutory minimum is increased by 8.4% if the trustee’s remuneration is consideration for a taxable supply (within the meaning of the A New Tax System (Goods and Services Tax) Act 1999). [subs (1A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 106 of 2010 s 3 and Sch 1[10], opn 1 Dec 2010]

(2) [subs (2) rep Act 106 of 2010 s 3 and Sch 1[11], opn 1 Dec 2010] (3) [subs (3) rep Act 106 of 2010 s 3 and Sch 1[11], opn 1 Dec 2010] [s 161B insrt Act 9 of 1992 s 30] *Editor’s note: Section 161A applies to trustees who consent to act as trustees after 16 December 1996. The section as it stood prior to substitution can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney 1996 ed at [82,420].

[82,470] Trustee’s remuneration — general 162 (1) Subject to section 161B, the remuneration of the trustee of the estate of a bankrupt may be fixed, from time to time, by resolution of the creditors or, if the creditors so resolve, by the committee of inspection.

[subs (1) am Act 9 of 1992 s 31]

(2) Where the remuneration of the trustee is to be, in whole or in part, a commission upon moneys received by the trustee, the trustee is entitled to commission upon all moneys received by the trustee (other than moneys received in the carrying on of a business of the bankrupt by him or her or under his or her supervision) at a rate not exceeding the rate prescribed by the regulations for the purposes of this subsection. [subs (2) subst Act 12 of 1980 s 82; am Act 44 of 1996 s 3 and Schs 1, 2]

(3) Where the trustee carries on a business of the bankrupt, or a business is carried on by the bankrupt under the supervision of the trustee, the trustee may be paid additional remuneration in the form either of a periodical payment based on, or a commission at the rate prescribed by the regulations for the purposes of this subsection on, the amount by which the estate is increased by reason of the carrying on of that business by him or her or under his or her supervision. [subs (3) subst Act 12 of 1980 s 82; am Act 44 of 1996 s 3 and Schs 1, 2]

(4) If the remuneration of the trustee is not fixed by the creditors or the committee of inspection, the trustee may, in the circumstances prescribed by the regulations, make an application, in accordance with the regulations, to the Inspector-General for the Inspector-General to decide the trustee’s remuneration. [subs (4) subst Act 106 of 2010 s 3 and Sch 1[12], opn 1 Dec 2010]

(4A) If an application is made to the Inspector-General under subsection (4), the Inspector-General must, by writing, decide the trustee’s remuneration, having regard to the matters prescribed by the regulations. [subs (4A) insrt Act 106 of 2010 s 3 and Sch 1[12], opn 1 Dec 2010]

(4B) The Inspector-General must give written notice of his or her decision under subsection (4A) to the trustee and to the bankrupt and creditors. [subs (4B) insrt Act 106 of 2010 s 3 and Sch 1[12], opn 1 Dec 2010]

(5) [subs (5) rep Act 44 of 1996 s 3 and Sch 1] (5A) The trustee must not withdraw funds from the bankrupt’s estate in respect of his or her remuneration at intervals of less than one week. [subs (5A) insrt Act 9 of 1992 s 31]

(6) Where a trustee receives remuneration for his or her services, a payment in respect of the performance by another person of the ordinary duties that are required by this Act to be performed by the trustee shall not be

allowed in his or her accounts unless the payment was authorized by resolution of the creditors or by the committee of inspection. [subs (6) am Act 44 of 1996 s 3 and Sch 2]

[page 592] (6A) The trustee must, in relation to the trustee’s remuneration, give such notices to the bankrupt and creditors as are required by the regulations. [subs (6A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(7) This section does not apply in relation to the Official Trustee. [subs (7) am Act 12 of 1980 s 82] SECTION 162 GENERALLY [82,470.5] Entitlement of trustee for remuneration for services Section 162(1) provides a limited exception to the general rule that a trustee is not entitled to remuneration for his or her own services: Re Ladyman (1981) 38 ALR 631. The following conclusions from Doolan v Dare [2005] FCAFC 69; BC200502718 at [19], [20], [21] should be noted: “Where a trustee in bankruptcy is appointed in the expectation that he or she will be remunerated, and there is no prior agreement to act gratuitously, the Act assumes the existence of a right to be remunerated (s 109(1)(a)). Section 162 provides a mechanism for fixing the remuneration to be paid. (See: Mayne v Jaques (1960) 101 CLR 169; Adsett v Berlouis (1992) 37 FCR 201 at 210). The history of the ‘fixing’ of fees of insolvency practitioners was considered and discussed by Finkelstein J in Korda; In the matter of Stockford Ltd (Subject to Deed of Company Arrangement) (2004) 52 ACSR 279. It is to be noted, however, that the provisions of the Corporations Act 2001 (Cth), with which his Honour was concerned, differ substantially from the provisions of the Act that govern this matter. “There is nothing in the Act which indicates or requires that the provisions of s 162(1) are subject to any contrary wish stated by the trustee at the first meeting of creditors. If the trustee states at that meeting that he or she wishes to be remunerated at the prescribed rate, it would be open to the creditors to fix the trustee’s remuneration under s 162(1), at least in relation to future work, at a lower rate. Section 162(4) does not prevent the creditors from fixing the trustee’s remuneration in relation to work to be undertaken thereafter in a sum or at a rate less than that which would otherwise flow from the application of the prescribed rate. The trustee’s entitlement to a minimum level of remuneration is expressly fixed by s 161B; it does not flow by implication from s 162(4), which is concerned with a different subject matter. “If the creditors fix the trustee’s remuneration at less than the prescribed rate notwithstanding the trustee’s stated wish to be remunerated at that rate, the trustee can choose whether to continue in the administration, or to ask the Court to accept his or her resignation under s 180 of the Act. In the event that the trustee and the creditors dispute the basis on which the trustee is to be remunerated and the trustee contends that the remuneration so fixed is not reasonable in the circumstances, the dispute between the parties would be a matter arising under the Act in respect of which the court has jurisdiction under s 39B(1A) of the Judiciary Act 1903 (Cth), or under s 30 of the Act, and may make such orders as are necessary to resolve the dispute and determine the rights of the parties. (See:

Jefferson v Official Trustee in Bankruptcy (2000) 175 ALR 671; Re Palmer; Ex parte Taylor (1988) 18 FCR 271 at 283–4).” [82,470.35] Relationship of ss 162 and 165(1)(b) In any given case the proposed billing method and remuneration of the trustee must not be inconsistent with the statutory scheme for a trustee’s remuneration and ought not to contravene s 165(1)(b) of the Act: Re Hurt; Ex parte Hurt (1988) 80 ALR 236. In Re Hurt; Ex parte Hurt, the court considered the preferred method of remuneration undesirable as it detracted from the independence that must necessarily attach to the holder of the statutory office of trustee. It is difficult to see how a trustee employer would have any right to render in an employee’s name an account for trustee’s remuneration. The trustee is appointed in his or her own right, not as an agent for his or her employer. [82,470.40] Prescribed remuneration See regs 8.07–8.15. [82,470.45] Cases where costs may be ordered Under s 43 of the Federal Court of Australia Act 1976 and s 79 of the Federal Magistrates Court Act 2001 parties and non-parties may be [page 593] required to contribute or to pay costs. As to non-parties; costs may be ordered against a non-party in exceptional circumstances: Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 192–3. Persons involved in a bankruptcy, such as a liquidator, or a creditor’s agent may become liable for costs. See Mead v Watson [2005] 23 ACLC 718; Benjamin v GB Franchising (No 2) [2008] FMCA 364; BC200803060. The circumstances generally involve unreasonable conduct of some sort as in the decision of Bowen LJ in In re Beddoe: Downes v Cottam [1893] 1 Ch 547 at 562 or in Bent v Gough (1992) 36 FCR 204 where a creditor’s petition was described as “hazardously speculative”. Involvement in the decision to commence litigation is generally an element. It has been held under r 21.07 of the Federal Magistrates Court Rules 2001 that in cases of an exceptional dereliction of duty costs may be levied on an indemnity basis against a solicitor: See Crimson SRL v Claudia Shoes Pty Ltd (No 8) [2008] FMCA 363; BC200803059; Re Bendeich (1994) 53 FCR 422; 126 ALR 643; BC9405707; Da Sousa v Minister of State for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544 at 547–8; 114 ALR 708; 30 ALD 782 per French J. In Fitzpatrick v Keelty (No 2) [2008] FCA 742; BC200803832 Moore J said that the fact that a litigant was a litigant in person did not prevent costs following the event. His Honour cited Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159; BC200001012 at [13]. Further, the fact that such an award may be futile is no reason to avoid making an order for costs: See Selliah v Minister for Immigration & Multicultural Affairs BC9801672 at 4 per Nicholson J.

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[82,475] Remuneration of the Official Trustee 163 (1) The Official Trustee is to be remunerated as determined by the Minister by legislative instrument. [subs (1) am Act 44 of 1996 s 3 and Sch 1; am Act 11 of 1997 s 3 and Sch 1; Act 34 of 2006 s 3 and

Sch 1, opn 1 July 2006]

(2) An amount equal to each amount of remuneration received by the Official Trustee shall be paid to the Commonwealth. Note: The remuneration may be in respect of work the Official Trustee does as trustee of the estate of a bankrupt or in respect of work done in any other situation under this Act (such as where the Official Trustee acts as a trustee as a result of a personal insolvency agreement). [subs (2) am Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006] [s 163 subst Act 12 of 1980 s 83] SECTION 163 GENERALLY [82,475.5] Calculation of the remuneration for the Official Trustee The Official Trustee is not entitled to remuneration for administration of a bankrupt estate until the work of administering the estate is completed. The fees will be calculated according to the schedule of fees current at that date: Re Athanassopoulos (1982) 41 ALR 603. In that case Lockhart J called for legislative review of this rule. [82,475.10] Prescribed remuneration For fees payable to the Official Trustee, see regs 8.12 and 16.07.

____________________

[82,478] Costs and expenses of Official Receiver 163A (1) If any Official Receiver exercises any power under this Act in relation to a bankrupt, the costs and expenses of the Official Receiver in connection with the exercise of the power are taken to be costs and expenses of the administration of the estate of the bankrupt. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

[page 594] (2) If any Official Receiver exercises any power under this Act at the request of the trustee of the estate of a bankrupt, the trustee is to pay to the Official Receiver the fee determined by the Minister by legislative instrument. [subs (2) am Act 44 of 1996 s 3 and Sch 1; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(3) Money received by the Official Receiver under subsection (2) is received on behalf of the Commonwealth. [subs (3) subst Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

[s 163A insrt Act 9 of 1992 s 32] SECTION 163A GENERALLY [82,478.5] Prescribed fees For prescribed fees, see reg 16.12.

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[82,480] Two or more trustees acting in succession 164 (1) If one person acts as a trustee of the estate of a bankrupt after another person has acted as the trustee, their remuneration and expenses are to be divided between them, if necessary, on a basis: (a) that they agree on; and (b) that is endorsed by a resolution passed at a meeting of the creditors. (2) When a person (the earlier trustee) ceases to be the trustee of the estate of a bankrupt because another person (the later trustee) has become trustee, the earlier trustee must: (a) prepare an account of his or her receipts and payments (including remuneration and expenses) for the period that he or she was trustee; and (b) keep a copy of the account; and (c) give each creditor a copy of the account; and (d) give the later trustee a copy of the account and any other accounts the earlier trustee has received from a person who was the trustee before the earlier trustee. (3) The later trustee must allow an authorised employee to inspect at any reasonable time an account received from the earlier trustee. [s 164 subst Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 164 GENERALLY [82,480.1] Operation and purpose of section In Dare v Doolan [2004] FCA 461; BC200401983 a trustee sought to prevent her removal by resolution on the ground that the operation of the section implied a prejudice to the former trustee. Cooper J denied that application for interlocutory relief on the ground that the operation of the section did not necessarily imply any prejudice and that, on the facts, the objection was that the remuneration would have to operate for two administrations. See [82,795.5].

____________________

[82,485] Trustee not to accept extra benefit etc 165 (1) A trustee of the estate of a bankrupt shall not: (a) make an arrangement for receiving, or accept, from the bankrupt or any other person, in connexion with the bankruptcy, any gift, remuneration or pecuniary or other consideration or benefit beyond the remuneration fixed in accordance with this Act; (b) make an arrangement for giving up, or give up, a part of his or her remuneration to the bankrupt or any other person; [page 595] (c) except as provided by this Act, directly or indirectly derive any profit or advantage from a transaction, sale or purchase for or on account of the estate or any gift, profit or advantage from a creditor; or (d) except with the leave of the Court, directly or indirectly become the purchaser of any part of the estate. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) A trustee who contravenes subsection (1) is guilty of contempt of court. (3) This section has effect subject to section 161B. [subs (3) insrt Act 9 of 1992 s 33] SECTION 165 GENERALLY [82,485.5] Scope of section The section is probably concerned with unlawful receipt of money by a trustee after appointment: Re Ladyman (1981) 38 ALR 631. Section 165(1)(b) could well be infringed by an arrangement under which the trustee in effect seeks to alienate his or her remuneration at source by abdicating to the trustee’s employer the right to charge for his or her services: Re Hurt; Ex parte Hurt (1988) 80 ALR 236. See also Lamb v Registrar in Bankruptcy (Vic) (1984) 4 FCR 269; 56 ALR 521. [82,485.10] Section 165(1)(b) In Re Dare; Ex parte Dare (1992) 38 FCR 356; 110 ALR 659, Drummond J concluded that this section covered much the same ground as s 134(1)(b) of the 1924 Act, prohibiting fee sharing by a trustee, the handing back of his fees or the making of an arrangement to pass on part of a fee to a creditor. However, it did not strike at the simple case of a trustee who was a partner of a firm bringing his earnings as a trustee into the pool of partnership income or the payment by an employee trustee of his fees earned as a trustee to his employer.

____________________

[82,490] Payment to third parties 166 The trustee must, in relation to the payment for services provided by another person in relation to the administration of a bankrupt’s estate, give such notices to the bankrupt and creditors of the bankrupt as are required by the regulations. [s 166 insrt Act 106 of 2010 s 3 and Sch 1[13], opn 1 Dec 2010]

[82,495] Review of remuneration etc 167 Trustee’s remuneration (1) The regulations may make provision for and in relation to: (a) the Inspector-General reviewing decisions of the trustee of the estate of a bankrupt to withdraw, or to propose to withdraw, funds from the estate for payment of the trustee’s remuneration; and (b) the bankrupt or a creditor of the bankrupt applying for the review. Payment to third parties (2) The regulations may make provision for and in relation to: (a) the Inspector-General reviewing a bill of costs for services provided by a person (the third party) in relation to the administration of a bankrupt’s estate; and (b) the trustee of the estate applying for the review. Content of regulations (3) The regulations may provide for: (a) the powers available to the Inspector-General in relation to the review; and (b) the trustee or the third party to provide information or documents to the Inspector-General; and [page 596] (c) the decisions that may be made by the Inspector-General in relation to the review; and

(d) the notification of decisions made by the Inspector-General. Repayment — trustee (4) The regulations may provide that, if the Inspector-General is satisfied that a withdrawal by the trustee of funds from the estate of the bankrupt for payment of the trustee’s remuneration exceeds the amount of remuneration the trustee is entitled to under this Division, the Inspector-General may require the trustee to repay the excess to that estate. (5) The amount of the excess is recoverable by the Inspector-General, as a debt due to the estate of the bankrupt, by action against the trustee in a court of competent jurisdiction. Appeal to the Court (6) The trustee, the bankrupt or a creditor of the bankrupt may appeal to the Court from a decision of the Inspector-General in relation to the review. In addition, if the review is of the kind mentioned in subsection (2), the third party may also appeal to the Court from a decision of the Inspector-General in relation to the review. Interpretation (7) Subsections (3) and (4) do not limit subsections (1) and (2). [s 167 subst Act 106 of 2010 s 3 and Sch 1[13], opn 1 Dec 2010] SECTION 167 GENERALLY [82,495.10] Bill of costs For form of bill of costs, see reg 8.10. [82,495.20] Procedure See regs 8.09–8.11 as to the procedure on taxation. See FCR O 77, r 48 as to appeals from taxing officer. [82,495.30] Lump sum costs In the Federal Magistrates Court, bankruptcy matters can employ s 79(2) and (3) of the Federal Magistrates Act 1999 (Cth). In Draper v Official Trustee in Bankruptcy (No 2) [2008] FMCA 701; BC200804524, Simpson FM applied these two sections to fix gross or lump sum costs as an alternative to taxation: see [8].

____________________

DIVISION 3 — ACCOUNTS AND AUDITS

[82,545] Trustee not to pay moneys into private account

168 (1) A trustee of the estate of a bankrupt shall not pay into a private account any moneys received by him or her as trustee. Penalty: 10 penalty units. Note: See also section 277B (about infringement notices). [subs (1) am Act 106 of 2010 s 3 and Sch 2[26], opn 1 Dec 2010]

(2) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (2) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001] [s 168 am Act 44 of 1996 s 3 and Sch 2; Act 48 of 1998 Sch 1]

[82,550] Trustee to pay moneys into bank account 169 (1) A trustee of the estate of a bankrupt must pay all money received by him or her on account of the estate to the credit of a single interest bearing bank account that complies with the requirements (if any) specified in the regulations. [subs (1) subst Act 11 of 1997 s 3 and Sch 1]

[page 597] (1A) The trustee must only pay into the account money received by the trustee on account of the estate of a bankrupt, but he or she may pay in money received on account of more than one estate. [subs (1A) insrt Act 11 of 1997 s 3 and Sch 1]

(1B) The trustee is entitled, in his or her personal capacity, to each payment of interest on the account, less an amount equal to the bank fees or charges (if any) paid or payable on the account during the period to which the interest relates. [subs (1B) insrt Act 11 of 1997 s 3 and Sch 1]

(1C) If, under subsection (1B), the trustee is only entitled to part of a payment of interest, the rest of that payment: (a) if the account contains money from only one estate — forms part of that estate; or (b) if the account contains money from more than one estate — forms part of those estates in proportion to the respective amounts of money held in the account on account of each of those estates.

[subs (1C) insrt Act 11 of 1997 s 3 and Sch 1]

(1D) Interest on money in the bank account is not subject to taxation under a law of the Commonwealth, a State or a Territory except as provided in Part 2 of the Bankruptcy (Estate Charges) Act 1997. [subs (1D) insrt Act 11 of 1997 s 3 and Sch 1]

(2) If a trustee of the estate of a bankrupt keeps in his or her hands any money exceeding $50 received on behalf of the estate for a period exceeding 5 days (excluding any day on which the branch of the bank at which the estate bank account is kept is not open for business), then, unless he or she satisfies the Court that his or her reason for retaining the money was sufficient: (a) he or she is liable to pay interest at the rate of 20% per annum on the amount by which the amount so retained exceeds $50; and (b) the Court may remove him or her from his or her office of trustee. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) Where a trustee is so removed from office, the Court may make such order with respect to his or her remuneration for his or her services as a trustee as the Court thinks proper and may further order that he or she pay expenses incurred by the creditors in consequence of his or her removal. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) This section does not apply in relation to the Official Trustee. [subs (4) subst Act 12 of 1980 s 86]

(5) In this section: bank means an ADI or any other bank. [subs (5) insrt Act 48 of 1998 Sch 1]

[82,555] Trustee to give Official Receiver and bankrupt information etc 170 (1) The trustee of the estate of a bankrupt (not being the Official Trustee) shall 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. [subs (1) am Act 12 of 1980 s 87; Act 44 of 1996 s 3 and Sch 2]

(2) The trustee shall, at the request of the bankrupt, furnish to the bankrupt information reasonably required by the bankrupt concerning his or her

property or affairs. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

[page 598]

[82,557] Annual return 170A (1) If, during a financial year, the trustee of the estate of a bankrupt administered the estate, the trustee must, within the period of 35 days after the end of that year, give the Inspector-General a return, in the approved form, in relation to the administration of that estate during that year. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices).

(2) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code.

(3) This section does not apply in relation to the Official Trustee. [s 170A insrt Act 106 of 2010 s 3 and Sch 2[27], opn 1 Dec 2010]

[82,560] Trustee to give and obtain receipts 171 (1) The trustee of the estate of a bankrupt must issue a receipt in respect of a payment into the estate if asked to do so by the person making the payment. (2) The trustee must, wherever practicable, obtain a receipt for a payment made out of the estate. [s 171 subst Act 11 of 1997 s 3 and Sch 1]

[82,565] Investment of surplus funds 172 [s 172 rep Act 11 of 1997 s 3 and Sch 1]

[82,570] Books to be kept by trustee 173 (1) The trustee of the estate of a bankrupt shall keep such accounts and records as are necessary to exhibit a full and correct account of the administration of the estate and shall permit a creditor of the bankrupt to

inspect, at all reasonable times, either personally or by an agent, the accounts and records relating to that estate. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (1) am Act 106 of 2010 s 3 and Sch 2[28], opn 1 Dec 2010]

(2) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (2) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001] [s 173 am Act 11 of 1997 s 3 and Sch 1]

[82,575] Trustee’s books when trading 174 Where the trustee carries on a business previously carried on by the bankrupt, he or she shall keep such accounts and records as are usual and proper in relation to the carrying on of a business of that kind and shall permit a creditor of the bankrupt to inspect, at all reasonable times, either personally or by an agent, those accounts and records. [s 174 am Act 12 of 1980 s 89; Act 44 of 1996 s 3 and Sch 2]

[82,580] Audit of trustee’s accounts 175 (1) The Inspector-General may, on his or her own initiative or at the request of a creditor or the bankrupt, audit an account referred to in section 173 or cause it to be audited by an appropriate person. [subs (1) subst Act 11 of 1997 s 3 and Sch 1]

[page 599] (2) [subs (2) rep Act 11 of 1997 s 3 and Sch 1] (3) [subs (3) rep Act 115 of 1990 s 28] (4) [subs (4) rep Act 115 of 1990 s 28] (5) For the purposes of an audit under this section, the trustee shall produce to the person carrying out the audit as and when required such books and information as that person requires. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices).

[subs (5) am Act 12 of 1980 s 90; Act 11 of 1997 s 3 and Sch 1; Act 106 of 2010 s 3 and Sch 2[29], opn 1 Dec 2010]

(5A) Subsection (5) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (5A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(6) The cost of an audit under this section shall be borne by the estate. [subs (6) am Act 115 of 1990 s 28]

(7) [subs (7) rep Act 11 of 1997 s 3 and Sch 1]

[82,585] Court may order trustee to make good loss caused by breach of duty *176 (1) Where, on application by the Inspector-General or by a creditor who has or had a debt provable in the bankruptcy, the Court is satisfied that a person who is or has been a trustee of a bankrupt’s estate has been guilty (whether before or after the commencement of this section) of breach of duty in relation to the bankrupt’s estate or affairs, subsection (2) applies. (2) The Court may make any one or more of the following orders: (a) an order directing the person to make good any loss that the bankrupt’s estate has sustained because of the person’s breach of duty; (b) if the person is a registered trustee — an order directing the Inspector-General to cancel the person’s registration as a trustee; (c) any other order that the Court considers just and equitable in the circumstances. [subs (2) am Act 44 of 1996 s 3 and Sch 1] [s 176 subst Act 119 of 1987 s 57; am Act 115 of 1990 s 29] SECTION 176 GENERALLY [82,585.5] Scope of section For discussion of the scope of the section, see Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262. See also [82,375.10].

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DIVISION 4 — CONTROL OVER TRUSTEES

[82,635] Control of creditors over trustees

*177 (1) Subject to this Act, in the administration of the estate of a bankrupt, the trustee shall have regard to any lawful directions given by resolution of the creditors at a meeting of the creditors or by the committee of inspection. [subs (1) am Act 119 of 1987 s 58]

[page 600] (2) [subs (2) rep Act 119 of 1987 s 58] (3) [subs (3) rep Act 119 of 1987 s 58] *Editor’s note: Section 57(2) of the Bankruptcy Amendment Act 1987 No 119 provides as follows: “(2) Notwithstanding subsection (1), section 176 of the Principal Act continues to apply in relation to an application made under that section before the commencement of this section.”

[82,640] Appeal to Court against trustee’s decision etc 178 (1) If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable. (2) The application must be made not later than 60 days after the day on which the person became aware of the trustee’s act, omission or decision. [subs (2) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 178 am Act 44 of 1996 s 3 and Sch 2] SECTION 178 GENERALLY [82,640.2] Overview of section Frost v Sheahan (Trustee) [2009] FCAFC 20; BC200901098 at [8] adopted the following statement of principle: 1.

2.

Section 178 confers a “supervisory jurisdiction over the conduct of the trustee”: Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124 at 132 per Brennan CJ, Gaudron and McHugh JJ. The section confers on the Court a very wide discretion: McGoldrick v Official Trustee in Bankruptcy [1993] FCA 636; (1993) 47 FCR 547 at 552–553. It is not necessary for an applicant for relief under the section to show that the trustee’s decision was absurd, or unreasonable or taken in bad faith. The Court has a wide discretion to make such order as seems appropriate in the circumstances of the case: Re Tyndall; Ex parte Official Receiver (1977) 30 FLR 6 at 9–10; [1977] FCA 15; 17 ALR 182 at 186 per Deane J. At the same time, the Court will be slow to make orders which

3.

will have the effect of interfering in the day-to-day administration of a bankrupt’s estate and, in cases involving an exercise of business or commercial judgment, will place considerable weight on the trustee’s decision. Furthermore, a Court will not intervene under s 178 simply because the Judge forms a different view from that of the trustee. An order may be made under s 178 even if the trustee’s decision was correct on the material before him, if, for example, additional material is put before the Court.

And Logan J applied those principles in Deputy Commissioner of Taxation v Prentice (Trustee) [2011] FCA 1535; BC201110599. Further the contingency of an election in s 60 (see [81,250.15]) and the existence of a power to review in this section gave rise to a remark by McDonald J in Bendigo Bank Ltd v Demaria [2001] VSC 218; BC200104175 at [34]–[38] that in a circumstance where bankruptcy had intruded upon pending litigation, it may be more appropriate for the court to order that the proceeding be stayed until further order rather than be dismissed, so as not to create a respondent judicata and thus prejudice the bankrupt’s right to continue the action should the bankrupt apply to the court to review the trustee’s decision under s 178. In Denlay v Commissioner of Taxation (No 3) [2012] FCA 317; BC201201679 at [5] attention was drawn to this observation. [82,640.5] Circumstances in which application can be made The bankrupt creditor or any person affected by an act omission or decision of the trustee is empowered to apply to the court and it is not a requirement that applicant be a person “aggrieved” as it was under the old s 148: Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6. [page 601] The section can be utilised to obtain orders that a trustee accept a proof of debt: Re Gordon; Ex parte Weedon v Pipkin (1985) 4 FCR 190; 59 ALR 596. In Macks v Garrett [2008] FCA 1973; BC200811748, a bankrupt commenced a proceeding in Western Australia seeking a review of the trustee’s refusal to review the admission of proofs of debt in the bankrupt’s estate, possibly invoking s 178. Under s 48 of the Federal Court of Australia Act 1976 (Cth), the trustee applied to have the action transferred from Western Australia to South Australia. Concerning s 48, his Honour held: [3] That section has been given a very wide construction by the Full Court of this Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155. In that case, their Honours said at 162: The power conferred on the Court or a judge by section 48 is in terms wholly unfettered. It should be exercised flexibly having regard to the circumstances of the particular case. It would be regrettable and unwise if the Court was to circumscribe the general power conferred by section 48 with inflexible rules or impose inelastic constraints upon its exercise. As the power may be exercised subject to conditions, the Court or a judge is in a position to mould orders under the section to take account of the many and varied circumstances that arise in particular cases. [4]The power conferred by s 48 recognises the national character of this Court. The factors which the Court is entitled to take into account in considering whether one place is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The Court must weigh those factors in each case. Residence of parties and of witnesses, expense to parties, the place where the

cause of action arose, and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances. The balance of convenience will generally be a relevant consideration but not necessarily determinative of each case. [82,640.10] “Appeals” by creditors, bankrupts or other interested persons These “appeals” against the acts omissions and decisions of trustees in bankruptcy may be brought to the court pursuant to s 178 of the Bankruptcy Act 1966. A bankrupt may make a proposal for a post-bankruptcy composition with creditors pursuant to s 73 of the Act. Recently, the question of whether or not a discharged bankrupt has standing under these sections has fallen for decision. In Watson v Healey (1996) 64 FCR 301, Lee J held that the court had no jurisdiction to entertain an application under s 178 by a discharged bankrupt whose administration had long been completed by his trustee in bankruptcy. In Re Quinn (1995) 143 ALR 85, Tamberlin J held that the word “bankrupt” in s 73 could not be construed as including a discharged bankrupt. The Act is a codification of many different substantive laws and rules developed in the courts exercising jurisdiction in bankruptcy over hundreds of years, and the word “bankrupt” is not always intended to include a discharged bankrupt. The confusion that can occasionally result was highlighted by the Full Court of the Federal Court in Official Receiver v Todd (1986) 70 ALR 119, where it was held by a majority (reversing the decision at first instance) that persons could be examined under s 81 even after discharge of the relevant bankrupt. The statute has been amended several times since that decision, yet the legislature has not always made apparent its understanding of the reasoning in that decision. On 21 February 1997, Merkel J handed down judgment in Cheesman v Waters (1997) 143 ALR 78; BC9700338 (affirmed on appeal in Cheesman v Waters (1997) 77 FCR 221; 148 ALR 21) where all these cases were cited in connection with a submission that the court lacked jurisdiction to hear the bankrupts’ s 178 application. His Honour declined to follow Lee J, and held that a discharged bankrupt could make application under the section, even years after discharge and completion of the administration (and after the retirement from practice of the elderly trustee!). In Re Fuller (FCA, Sheppard, Spender and Hill JJ, SG 34/95, 28 June 1996, unreported, BC9602814), the Full Court (Sheppard, Spender and Hill JJ) affirmed Jenkinson J’s rejection of a bankrupt’s application for removal under s 179 of his trustee in bankruptcy. The court reviewed the authorities concerning the fiduciary duties of trustees. [page 602] [82,640.20] Court’s supervisory jurisdiction over trustee Section 178 has had authority which stated that a discharged bankrupt has no standing to seek relief under the provision: Watson v Healey (1996) 64 FCR 301; BC9600496. However, subsequent authorities have taken a different view: Re Cheesman (1997) 143 ALR 78; BC9700338; Macchia v Nilant (2001) 110 FCR 101; [2001] FCA 7; BC200100006. The latter cases have been applied in Foyster v Prentice [2008] FMCA 757; BC200804562. In Chase v Donnelly [2002] FCA 1565; BC200207816 at [5]–[6] Allsop J summarised the nature of supervisory jurisdiction as follows: The nature of the supervisory jurisdiction conferred on the court by s 178 of the Act has been discussed in Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 133, Re Tyndall (1977) 30 FLR 6 at 9–10, Re Dingle; Westpac Banking Corp v Worrell (1993) 47 FCR 478, McGoldrick v Official Trustee in Bankruptcy (1993) 47 FCR 547, Re Wheeler; Ex parte Wheeler v Halse (1994) 54 FCR 166 and Macchia v Nilant (2001) 110 FCR 101 at 112–16 [30] to [40].

In Jambrecina v Official Trustee in Bankruptcy [2003] FCA 1352; BC200307089 Bennett J refused a stay because it had not been demonstrated how the trustee’s discretion had miscarried, following Re Wheeler; Ex parte Wheeler, above at 170; Bethune v Newman (1996) 19 ACSR 99 at 103. His Honour reviewed the circumstances in which a trustee’s wide discretion to elect to take proceedings under s 60 operated. [82,640.25] Principles In Nguyen v Pattison (2005) 145 FCR 561; 86 ALD 43; [2005] FCA 650; BC200503401 Weinberg J considered the principles set by Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6 (Re Tyndall) in the light of Macchia v Nilant (2001) 110 FCR 101; [2001] FCA 7; BC200100006. In view of the explanatory memorandum to ss 149A–149J that indicated that the policy of these sections was to provide a mechanism whereby decisions of a trustee that may have been appropriate at the time they were made can be reversed if it is nonetheless seen to be appropriate to bring the bankruptcy to an end, his Honour had to consider whether the earlier authorities were in point. His Honour applied, generally, the principles of Re Tyndall. He did not consider that the contention that an order dismissing an application would create an issue estoppel was justified, being contrary to the policy of the Act: at [87]. In Macchia v Nilant French J construed s 178 at [36]–[38]. He noted that it conferred on the Court a supervisory jurisdiction over the conduct of the trustee: Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 132; 137 ALR 1; [1996] HCA 19; BC9602501 per Brennan CJ, Gaudron and McHugh JJ. French J held that the applicant for review must show a ground on which the trustee’s administration of the affairs of the bankrupt is to be reviewed (citing: Re Wheeler; Ex parte Wheeler (1994) 54 FCR 166 at 170 per Lee J). Under s 178, the matter is in the original jurisdiction of the Court which has to determine whether it is just and equitable that the applicant for review should have the administration of the bankrupt’s affairs conducted in a particular way. French J said that the applicant must show a ground on which the trustee’s administration of the affairs of the bankrupt is to be reviewed, but it is not necessary to find that the trustee has done anything wrong: Macchia 110 CR at [36]. For present purposes, it is not necessary to consider further the issue under s 178. Rares J’s judgment in BDT Holdings Pty Ltd v Piscopo [2009] FCA 151; BC200900944, whose view of the legislation has been adopted above, should be considered. In Re Tyndall, Deane J said (ALR at 186–7; FLR at 9): In my view, the wording of s 178 of the Act is such as to confer upon the court the widest possible discretion as to the appropriate order which should be made in the particular case and is quite inconsistent with the approach that, upon an application made pursuant to the section by a bankrupt, creditor or other person affected by an act, omission or decision of the trustee, the court is only empowered to interfere with the trustee’s act, omission or decision if it is of the view that the trustee has acted absurdly or unreasonably or in bad faith … This is not, of course, to say that the court should either disregard the relevant decision of the trustee or ignore the well established policy under bankruptcy legislation that the court should not unduly interfere with the day-to-day administration of a bankrupt’s estate by a trustee. The [page 603] trustee is made responsible for the administration of the bankrupt’s estate under the general provisions of the Act. He must, in the course of that administration, make a variety of decisions aimed at enabling the administration to be carried out with promptness and efficiency … Again, under the present legislation, the trustee will ordinarily be the Official Receiver and the court must be conscious of the fact that the Official Receiver will be made responsible for the administration

of an extraordinarily large number of estates. In such circumstances, the administration of the Bankruptcy Act demands that the court take into account, in exercising its functions under the provisions of s 178 of the Act, the opinion of the Official Receiver, as trustee, as to what is expedient in the interests of the prompt and efficient administration of a particular bankrupt estate. That is, however, a completely different thing to saying that the court can only interfere with an act, omission or decision of the Official Receiver, as such trustee, when it is of the view that the Official Receiver has acted unreasonably, absurdly or in bad faith in so acting or failing to act or in reaching that decision. Observations to similar effect have been made by Pincus J in Gray v Clout (1990) 27 FCR 141 at 144; 21 ALD 510 and by French J in Macchia v Nilant, above, at [38]. Note that Madgwick J said in Heley v Prentice (No 2) [2000] FCA 1598; BC200006771 at [20]-[22] that the court should consider whether it is just and equitable that the court should intervene and that similar principles had been adopted by Nicholson J in Bethune v Newman (1996) 19 ACSR 99; BC9630001 and Lee J in Re Wheeler; ex parte Wheeler v Halse (1994) 54 FCR 166 at 170. Macchia v Nilant, above, was the seminal decision in this area. It has been followed and applied several times since. Recent notable examples include Doolan v Dare [2004] FCA 682; BC200403124 and Trkulja v Morton [2005] FCA 659; BC200503544. The last case conveniently summarises the principles: see [82,645.5] and [82,645.10]. In Willoughby v Official Trustee in Bankruptcy (WA) (2000) 102 FCR 261; [2000] FCA 757; BC200003010 at [26] it was held that s 178 “falls to be considered against the background provided by s 30 of the Act, which gives the court full power to decide all questions of fact or law in any case of bankruptcy coming within the cognisance of the court. The court may make such orders as are necessary for the purposes of carrying out or giving effect to the Act: s 30(2).” In Re Estate of Hudson [2004] FCA 172; BC200400709 at [31] Ryan J held: The most appropriate means, in conjunction with direct enquiries of relevant persons and entities, for carrying out the further investigations required is for the bankrupt to be examined under s 81 of the Act. This view accords with that expressed by a Full Court of this court in Karounas v Official Trustee (1988) 19 FCR 330, where it was said, at 335: However the power [in s 81] is exercised in the interest of the creditors, and those interests should not be defeated by an unduly technical or restrictive approach to the use of the power. The procedure is basically designed to establish what assets the bankrupt had, what has happened to those assets, and whether action should be begun (or continued) to recover them: see Re Price (No 4) (1948) 14 ABC 142 at 144; Re Andrews (1958) 18 ABC 181 at 184; Re Poulson [1976] 1 WLR 1023 at 1032; [1976] 2 All ER 1020 at 1029. Additionally, Spender J in Freeman v National Australia Bank Ltd [2003] FCA 1233; BC200306606 at [11] emphasised that the duty of a trustee is greater than that of a gratuitous trustee and analogous to an officer of the court. His Honour held at [13] that it was necessary that it be shown that the impugned decisions of the trustee were wrong and that justice and equity required the court to order to the contrary, and, as he put it at [22]: The duty of the trustee in bankruptcy is to exercise judgment so as to save the estate unnecessary expenditure of money. Further it is to discharge the public duty imposed by the Act conformably with his obligation to administer the estate in such a manner as to maximise the return from estate assets, thereby maximising satisfaction of the creditors’ claims, and any possible surplus for the bankrupt. The decisions which the trustee made in the present case conform to those duties. In Freeman v Joiner (2005) 219 ALR 136; [2005] FCA 547; BC200502833, Tamberlin J applied

[page 604] the principles above and added to them Healey v Prentice (No 2) [2000] FCA 1598; BC200006771 and Re Estate of Hudson [2004] FCA 172; BC200400709. He stated that the court, while prepared to act in a proper case, should not be too ready to intervene to prevent the orderly administration of bankruptcy, citing Healey v Prentice (No 2), above in that regard. However, Ebner v Official Trustee in Bankruptcy (2003) 126 FCR 281; 196 ALR 533; [2003] FCA 73; BC200300253 indicates that there is a limit to the powers under this section. Finkelstein J, in the course of an interesting and learned judgment on various aspects of personal property, stated at [42]: [42] However there are limits to what a court can do. Some of the limitations were discussed by French J in Macchia v Nilant (2001) 110 FCR 101. In a passage which is directly relevant to the present claim, French J said: In my opinion, however, ss 178 and 179 do not extend to provide statutory mechanisms for pursuing claims for damages for torts said to have been committed against a bankrupt in the administration of the estate or otherwise under the general law. That is not to say that conduct which attracts remedial intervention under these control provisions may not also give rise to causes of action in tort or otherwise. Nor does it preclude the possibility that orders may be made under these sections based upon common law or equitable rights. But the sections are not mechanisms by which bankrupts or others can pursue claims for damages for malfeasance in public office or for negligence or for the tortious breach of statutory duties. Broad as it is, the essentially supervisory function of ss 178 and 179 does not extend to such wide ranging application. In Re Gault; Gault v Law (1981) 57 FLR 165, Ellicott J found a breach of trust to have been committed by the trustee of a deed of arrangement under Part X of the Act, to which s 179 was applicable, but declined to order an inquiry under that section. His Honour observed that the applicant debtor was “free to pursue such rights (if any) as he may have against the respondent for breach of trust whether under the Bankruptcy Act or the general law” (at 196). I do not doubt that there is some overlap between the orders that may be made under these sections and general law remedies and that the orders may involve the grant of what amounts to relief for a general law cause of action. But whatever the extent of that overlap, it does not, in my opinion, extend to claims for damages for losses unrelated to the bankrupt estate itself. Frost v Sheahan (2005) 220 ALR 733; [2005] FCA 1014; BC200505372 is an attempt to review a trustee’s discretion on the just and equitable ground. Lander J examined the authorities, applied the principles in Freeman v National Australia Bank Ltd [2003] FCA 1233; BC200306606 discussed above, and concluded against making an order substantially upon those grounds. These general principles were followed and applied by the Full Court decision of Frost v Sheahan [2009] FCAFC 20; BC200901098. The court, comprising Ryan, Mansfield and Jagot JJ, first set out first the machinery (at [4]): Certain provisions of the Bankruptcy Act set the context for the resolution of these issues. Under s 149 a bankrupt is usually discharged from bankruptcy at the end of the period of three years from the filing of a statement of affairs. However, a trustee of a bankrupt estate may (and in certain circumstances must) file a notice of objection to the discharge in accordance with s 149B. The grounds of objection are set out in s 149D(1) and include, relevantly, s 149(1)(e) (where the bankrupt fails to disclose any particulars of income or expected income as required by s 139U), and s 149(1)(f) (where the bankrupt fails to pay the trustee an amount the bankrupt was liable to pay under s 139ZG). By s 149A, a discharge under s 149 does not operate if such an objection takes effect. Instead the bankruptcy continues for a further prescribed period unless, at an earlier time, the trustee withdraws, the Inspector-General cancels, or the Court orders the trustee to

withdraw, the notice of objection (as contemplated by ss 149J, 149N and 178 respectively). The court held (at [11]) that the core principle to be applied was as follows: The primary judge (at [48]) considered that substantial compliance required the provision of sufficient information to facilitate a proper assessment of income by the trustee (which is the [page 605] purpose of ss 149(1)(e) and 139U). This approach accords with the reasoning of Burchett J in Re Asset Risk Management and Others (1995) 130 ALR 605 at 607, namely, that ‘…substantial compliance is a matter of degree. What the Court is concerned with is the practical effect of what has been done, which should be compared with the practical effect the legislature appears to have sought to achieve’. The primary judge found that the provision of income tax returns did not amount to substantial compliance with the statutory obligation. The Full Court considered that it was not illegitimate for a judge to consider any relevant factor, such as the effect upon pending Family Court proceedings. These principles were applied in Trollope v Rambaldi [2009] FCA 74; BC200900493; see [81,980.5]. Under s 178, the matter is in the original jurisdiction of the court which has to determine whether it is just and equitable that the applicant for review should have the administration of the bankrupt’s affairs conducted in a particular way. French J said that the applicant must show a ground on which the trustee’s administration of the affairs of the bankrupt is to be reviewed, but it is not necessary to find that the trustee has done anything wrong. However, that principle has been applied in BDT Holdings v Piscopo [2009] FCA 151; BC200900944 to an alleged failure to discover documents. The definition of “fishing expedition” in discovery was applied in Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250 at 254. Owen J (with whom Street CJ and Herron J agreed) held as follows: … that a person who has no evidence that a fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not. If, however, there is material before the Court pointing to the probability that a party to litigation has in his possession documents tending to destroy his case or to support the case of his opponent and that privilege from inspection of such documents has been wrongly claimed, an application by that opponent to be allowed to inspect them cannot properly be described as a mere ‘fishing expedition’. Although the above principles are frequently called upon, there is a time scale which may increase the reluctance of the court to intervene. These limitations were considered in Trkulja v Morton [2005] FCA 659; BC200503544, upheld by the Full Court in Trkulja v Morton [2005] FCAFC 259; BC200510886. Gray J in the first-mentioned case held that the court had first to decide whether an inquiry should be undertaken. The court should be reluctant to undertake an inquiry or to interfere with the administration of the estate unless there are substantial grounds for believing that the trustee erred in the administration. In such cases as Doolan v Dare [2004] FCA 682; BC200403124 Spender J found that the breakdown in the relationship of trustee and bankrupt had its root in a conflict of interest in the trustee between her remuneration and its payment and her obligations as fiduciary to the creditors and the bankrupt. In Wade v Leroy [2010] FCA 178; BC201001065 the fact that the administration had ended, and the trustee had filed a notice under reg 8.14 of the Bankruptcy Regulations (see [88,055] et seq) contributed

to the reluctance to order an inquiry. See [32]–[33]. Restrictions on trustee in bankruptcy of a vendor In GE Commercial Corporation (Australia) Pty Ltd v Nichols as Trustee of the Bankrupt Estate of Lymn [2012] NSWSC 562; BC201203604 Rein J at [13] noted a passage in G Jones and W Goodhart, Specific Performance, 2nd ed, Butterworths, Sydney 1996, p 221 that “The trustee in bankruptcy of a vendor cannot, however, disclaim the contract if the equitable interest in the property sold has already passed to the purchaser, and in such a case the trustee can be ordered to complete the sale upon receipt of the purchase money”. [82,640.35] Travel A trustee may restrict the travel of a bankrupt if there is a reasonable risk that the bankrupt will leave Australia, if the reason for travel is not genuine, or if the travel will hinder the administration. Section 178 provides the vehicle for re-examination of the matter. The trustee has a wide discretion to make these decisions: see Re Tyndall, Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6. Since Re Hicks; Ex parte Lamb (1994) 217 ALR 195; BC9406120 [page 606] travel claims in particular have required examination of these questions: (a) is the proposed visit genuine? (b) is the bankrupt likely to return to Australia as promised? (c) will the visit hamper the administration of the estate? These matters have been considered in Lockwood v Vince [2007] FMCA 1497; BC200707597. The application concerned issue (c), above. The Federal Magistrate declined to support the applicant’s contention that the trustee’s claim was weak, and that fact alone provided a ground for the applicant’s objection. At [11] Riley FM said that it was appropriate to proceed “on the basis that the income contribution as assessed is payable unless and until it is set aside by the court.” The magistrate rejected the trustee’s contention that s 272 reflected a legislative intent supporting a restriction of travel to the effect that any outstanding contribution should be paid first. Rather, the circumstances of the case did not require special orders constructed so that travel was contingent upon payment of the imposts depending upon the outcome of a trial elsewhere: indeed, such orders would be “unjustifiably opportunistic and oppressive”. A comprehensive judgment listing a large number of authorities, including those above is Hill v Piscopo [2008] FMCA 574; BC200803319. See also Mayger v Prentice [2000] FCA 99; BC200000252; Weiss v Official Trustee in Bankruptcy (1983) 1 FCR 40. In Khan v Melluish [2010] FMCA 119; BC201001135 the court had to consider certain matters which militated against travel. It was held that the trustee can consider the fact that the bankrupt has ties in the country to be visited but not in Australia, and that there are no extradition or other appropriate provisions available in the other country. In Hausman v White [2011] FMCA 524; BC201105087 it was a material factor in the grant of the order that arrangements to find the expenses were made so that it did not interfere with the administration.

____________________ *Editor’s note: Section 58(2) of the Bankruptcy Amendment Act 1987 No 119 provides as follows:

(2) Notwithstanding subsection (1), subsections 177(2) and (3) of the Principal Act continue to apply in relation to a bankrupt in respect of a bankruptcy if the date of the bankruptcy occurred before the commencement of this section.

[82,645] Control of trustees by the Court *179 (1) The Court may, on the application of the Inspector-General, a creditor or the bankrupt, inquire into the conduct of a trustee in relation to a bankruptcy and may do one or both of the following: (a) remove the trustee from office; and (b) make such order as it thinks proper. [subs (1) am Act 21 of 1985 s 32; Act 44 of 1996 s 3 and Sch 1]

(2) The Inspector-General or a creditor may at any time require a trustee to answer an inquiry in relation to the bankrupt’s estate or affairs. [subs (2) am Act 21 of 1985 s 32; Act 44 of 1996 s 3 and Sch 1]

(3) [subs (3) rep Act 119 of 1987 s 59] (4) [subs (4) rep Act 119 of 1987 s 59] SECTION 179 GENERALLY [82,645.5] Scope of section The terms are wide and general and the court may inquire into any aspect of the conduct of a trustee in relation to a bankruptcy. One begins with French J in Macchia v Nilant (2001) 110 FCR 101; [2001] FCA 7; BC200100006 per French J (as he then was), but keeping in mind the limitations on the power to inquire. However other jurisdictions have found the principles in that case persuasive, as, for instance, the State Administrative Tribunal of Western [page 607] Australia in EW (2010) 72 SR (WA) 49; [2010] WASAT 91 at [96] and [98]. The guiding principle employed by the tribunal was the following passage at [50] of the judgment of French J: S 179 operates in aid of the Court’s supervision of trustees who are its officers. That operation, however, is subject to restraint against undue interference and to discretionary considerations including the practical benefit likely to be derived from the conduct of any inquiry … the discretion to determine the utility of an inquiry and its likely outcomes… [82,645.10] Procedure For discussion about appropriate procedures, see Re Alafaci; Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262 and [82,375.10] and Boensch v Pascoe [2007] FCA 1977; BC200711033. In Trkulja v Morton [2005] FCA 659; BC200503544 at [4]–[5], Gray J said: [4] In its terms, this power is plainly concerned with “the conduct” of the trustee “in relation to a bankruptcy”. As Macchia v Nilant (2001) 110 FCR 101; [2001] FCA 7; BC200100006 at [49]– [50] demonstrates, the court must first consider whether it should inquire into the conduct of the trustee. If an inquiry is undertaken, the next question is whether the trustee should be removed

from office and/or whether any other order should be made. The court should be reluctant to undertake an inquiry, unless there are substantial grounds for believing that the trustee erred in the administration. If an inquiry is unlikely to reveal misconduct, it should not be undertaken. The court should not unduly interfere with the day-to-day administration of a bankrupt’s estate by the trustee. In order to remove a trustee in bankruptcy, it is necessary to find misconduct on the part of the trustee. Removal is possible if the relationship between the trustee and the bankrupt has broken down totally: Doolan v Dare [2004] FCA 682; BC200403124 at [49]. In that case, Spender J found that there was a clear conflict of interest between the trustee’s interests in having her remuneration paid and how she thought that might be achieved, and her obligations as a fiduciary to the creditors and the bankrupt. [5]With these principles in mind, I took the view that I should conduct an inquiry. If true, the allegations of threats amounting to blackmail would be sufficiently serious conduct in relation to the bankruptcy to warrant the removal of the respondent as the applicant’s trustee in bankruptcy. The principal question is therefore whether the allegations of threats amounting to blackmail are true. If they are, it would be necessary to consider whether, in the circumstances, removal was appropriate. If the allegations are untrue, and there is nothing else about the conduct of the respondent on the two occasions in question to amount to misconduct in relation to the bankruptcy, then it would be appropriate to dismiss the application. Therefore, it is necessary to raise in an appeal that it has some prospect of success, and the same extends to allowing an extension of time. See Vasiliou v Marchesi [2006] FCA 37; BC200600355 and the cases cited therein. Boensch v Pascoe, above, a decision of Buchanan J, relies initially on French J’s outline in Macchia v Nilant, above. His Honour says that although the section and s 178 do not impose a two-stage process, the logic of the inquiry thereby gives the trustee “proper opportunity to prepare and present his case on those matters” (see Re Alafaci, Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262 at 268). Whether the court will embark on such an inquiry will depend on whether circumstances such as those in Trkulja v Morton exist. Examples can amount to the trustee acting improperly and in breach of the Act, and also when the relationship between trustee and bankrupt has completely broken down, as in Doolan v Dare [2004] FCA 682; BC200403124 at [49], though in that case the trustee was removed on the former rather than the latter ground. In Boensch v Pascoe, above, at [93] it was held that a breakdown in trust as a ground would depend upon the need for any further inquiry, though there could well exist cases where the existence of a breakdown of trust alone could operate as a ground. [82,645.12] Principles Yates J in Ferella v Official Trustee in Bankruptcy (No 2) [2011] FCA 619; BC201103747 at [12]–[27] sets out a number of considerations and that case went on appeal in Ferella v Official Trustee in Bankruptcy [2013] FCAFC 43; BC201302350 (Dowsett [page 608] Foster & Nicholas JJ). The court had to consider whether the court below correctly applied the principle in House v R (1936) 55 CLR 499 at 504–505; 10 ALJR 202; BC3690121. The court considered first the dictum of French J (as he then was) in Macchia v Nilant (2001) 110 FCR 101; [2001] FCA 7; BC200100006 at [49]–[50]: [49] As appears from the language of s 179 it invites first a consideration, albeit upon application by a person with standing, of whether the Court should inquire into the conduct of the trustee. If inquiry is undertaken, the next question is whether the trustee should be removed from office

and/or any other order made. The first question requires the Court to consider whether, on the grounds and facts before it, a case has been made for an inquiry — Re Alafaci at 268. The application of s 179 to that first step involves a broad discretion as to whether or not there are sufficient grounds to make an inquiry appropriate — Turner v Official Trustee in Bankruptcy (Full Court, 27 November 1998, unreported). The Full Court there quoted with approval the observation of Ellicott J in Re Gault that: “… the Court should be loath to order an inquiry unless it considers that on the evidence before it there are substantial grounds for believing that the trustee erred in his administration. If the Court considers that an inquiry is unlikely to reveal misconduct it should not make an order and put the respondent and possibly the creditors to the expense and trouble involved.” The policy consideration referred to by Deane J in Re Tyndall that “the Court should not unduly interfere with the day-to-day administration of a bankrupt’s estate by a trustee” applies also to the operation of s 179: Turner at 2–3. [50]Section 179 operates in aid of the Court’s supervision of trustees who are its officers. That operation, however, is subject to restraint against undue interference and to discretionary considerations including the practical benefit likely to be derived from the conduct of any inquiry. Like s 178, it may be invoked by a bankrupt after discharge and in part for the same reason, namely that the trustee’s powers continue in the various ways referred to by Merkel J at first instance in Cheesman. It may also be the case that the trustee should be held to account for conduct in the administration of the estate which has affected the bankrupt in some way. As is the case with s 178, it is not a vehicle for pressing claims for common law damages under the general law. That is a matter for a court of appropriate jurisdiction. In addition the Court will also have in such cases the discretion to determine the utility of an inquiry and its likely outcomes. For “although the Court is given a broad discretion under s 179 of the Act, that discretion must be exercised in the interests of the orderly administration of a bankrupt’s estate”: Re Challon (A Bankrupt); Ex parte Brown v Bendeich (unreported, Federal Court, Beaumont J, No QB 1548 of 1993, 23 April 1996) cited with approval by Merkel J in Cheesman at first instance, at p 114. Ferella continues: 40. As the decision is discretionary any appeal must be dealt with in the way prescribed by the High Court in House v The King (1936) 55 CLR 499 at 504–505 as follows: But the judgment complained of, namely, sentence to a term of imprisonment, depends upon the exercise of a judicial discretion by the court imposing it. The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the Judges composing the appellate court consider that, if they had been in the position of the primary Judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the Judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary Judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law opposes in the court of first instance. In such a case, although the [page 609]

nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. Driver FM in Barlaw Pty Ltd v Crouch [2011] FMCA 384; BC201105678 at [39] applied the principles set out in Rondo Building Services Pty Ltd v Starkey [2005] FMCA 275: a) b) c) d)

it is for the applicant to make out a case for removal; mere dissatisfaction with a decision, or actions, of the trustee or mere assertions of partiality, no matter how stridently put, are not enough to justify removal; the power to order removal should be exercised in the interests of all those directly concerned in the bankruptcy administration, namely the bankrupt and all creditors. to justify removal because of bias or lack of independence, actual partiality may not be necessary but there must be reasonable grounds for an apprehension of a lack of independence.

In Maxwell-Smith v Donnelly (No 3) [2011] FCA 1226; BC201108364 Nicholas J pointed out that the procedure for inquiry under s 179(1) of the Act has been described as involving a “two-stage” process. First, the court must be satisfied that it is appropriate to order an inquiry. Secondly, if the court orders an inquiry, the inquiry must take place and the court will thereafter make such orders as it thinks fit in the circumstances. The power to order an inquiry is discretionary and the court will not ordinarily make an order for an inquiry unless it is satisfied that a proper case for one has been demonstrated: Re Gault; Gault v Law (1981) 57 FLR 165. The power to make orders under s 179(1) continues to operate after the bankrupt has been discharged: Ferella v Official Trustee in Bankruptcy (2010) 188 FCR 68; [2010] FCA 766; BC201005065 at [22]. [82-645.20] See [80,450.5] concerning the question of personal liability of trustees in bankruptcy. [82,645.25] Remuneration In Maxwell-Smith v Donnelly (No 2) [2011] FCA 259; BC201101455 Nicholas J held at [10] that although there are circumstances where a beneficiary might be personally bound to indemnify a trustee for liabilities properly incurred, as in Hardoon v Belilios [1901] AC 118; (1900) 70 LJPC 9; 83 LT 573; 9 WR 209, nonetheless normally in the bankruptcy jurisdiction a trustee seeks no more than an order that he be indemnified out of the trust assets, as was the case here, where His Honour made a declaration accordingly.

____________________ *Editor’s note: Section 59(2) of the Bankruptcy Amendment Act 1987 No 119 provides as follows: (2) Notwithstanding subsection (1), subsections 179(3) and (4) of the Principal Act continue to apply in relation to an application made under subsection 179(3) of the Principal Act before the commencement of this section.

DIVISION 4A — EXAMINATION OF TRUSTEES AND OTHER PERSONS [Repealed] [Div 4A rep Act 44 of 1996 s 3 and Sch 1]

DIVISION 5 — VACATION OF OFFICE

[82,790] Resignation of trustee 180 The Court may, subject to such terms and conditions as it thinks just, accept the resignation of a registered trustee from the office of trustee of an estate. [s 180 am Act 12 of 1980 s 93] SECTION 180 GENERALLY [82,790.10] Court’s implied power In Ex parte Rangott (1992) 39 FCR 573 the court accepted the resignation of a registered trustee. Einfeld J held that a trustee who is too ill to administer many estates should not have to notify or wait for the notification of all bankrupts and creditors before being permitted to resign. He also held that the court had implied power to appoint a new trustee in place of a previous trustee who wished to resign on the grounds of ill-health. He distinguished such a case from removal under s 179 because a person removed for misconduct or voluntary act ought not to be able to nominate a successor. [page 610] A similar use of implied power was seen in Condon v Watson (2009) 69 ACSR 350; [2009] FCA 11; BC200900079 where Lindgren J considered the question whether it is open to two or more registered trustees to sign a form of consent to act, and so to be trustees of an estate. [82,790.11] Whether appointment joint or joint and several Lindgren J in Condon v Watson (2009) 69 ACSR 350; [2009] FCA 11; BC200900079 observed, at [29], that the general rule of law is that two or more trustees in bankruptcy “have only a joint and not a several authority”: Ex parte Griffin; Re Dixon (1826) 2 GL&J 114 at 116, cited in Re Gudgeon; Ex parte Pegler (1969) 13 FLR 350 at 352. In the instant case the two trustees were not appointed: rather they activated a mechanism by which they secured for themselves the office of trustees in bankruptcy. The judge inferred that the intention of the two was that they be joint and several trustees but in fact undisclosed intentions signified that the appointment was as joint and not as joint and several. Justice Lindgren took the view, at [33], that “s 180 allows the Court to accept the resignation of one [trustee]. The alternative and narrower construction is that the Court can accept the resignation, whether of one trustee or of multiple trustees, only if no registered trustee would be left in office. I cannot think of any sensible purpose that would have been intended to be served by this narrower construction”. The judge considered, at [34], the availability of s 179 but noted that it was “available only following an inquiry into the conduct of a trustee in relation to the bankruptcy and is inappropriate in the present circumstances”. After rejecting the application of s 160, His Honour considered that acceptance of the trustee’s resignation under s 180 was appropriate. A direction was given, at [37], that “from the time of the Court’s acceptance of [the trustee’s] resignation, [the other trustee] would be sole trustee of each estate”. [82,790.15] Procedure See FCR O 77 r 47.

____________________

[82,795] Removal of trustee 181 The creditors may, by resolution, at a meeting of which not less than 7 days’ notice has been given, remove a registered trustee appointed by them, or a registered trustee who is, by virtue of subsection 156A(3), the trustee of the estate of the bankrupt concerned, and may at the same or a subsequent meeting appoint another registered trustee to be trustee in his or her place. [s 181 am Act 12 of 1980 s 94; Act 74 of 1981 s 143; Act 9 of 1992 s 34; Act 44 of 1996 s 3 and Sch 2] SECTION 181 GENERALLY [82,795.1] “resolution” For the definition of “resolution”, see s 5. [82,795.5] Removal of trustee The Bankruptcy Act empowers the creditors to remove a trustee in circumstances which appear to the creditors to justify such a removal. The power to remove is not preconditioned upon there being any misconduct on the part of the trustee. If, for example, relations between the trustee and the creditors have broken down for whatever reason, that will be sufficient. Where a trustee has lost the confidence of creditors and those creditors seek the removal of the trustee, he or she should not resist removal unless there are proper reasons to do so: Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100 at 112. Ordinarily, the court would not interfere with an exercise of the power under s 181 to remove a trustee unless a good cause is shown for its interference: Re Crawford (dec’d) (1943) 13 ABC 201 at 202; Macks v Ardalich [1999] FCA 679; BC9902695 at [22]–[23]. Dare v Doolan [2004] FCA 461; BC200401983, which applied the above principles, provides an example of such a removal by resolution. That case turned upon whether the necessity of sharing the trustee’s remuneration between the old and the new trustee disclosed any prejudice to the former from that fact. Cooper J held that no such prejudice necessarily arose from either the operation of [page 611] s 164 of the Act. That provision had as its purpose the allocation of remuneration between old and new trustees and operated against a background whereby the trustee’s remuneration was not dependent upon, nor could it be taken away by, a resolution of the creditors: Jefferson v Official Trustee in Bankruptcy (2000) 175 ALR 671; [2000] FCA 990; BC200004212 at [18]–[21], [25]. Cooper J said at [23]: “As was said in Adsett v Berlouis at [ALR] 109, and Mayne v Jaques (1960) 101 CLR 169 at 171, 173 and 180, the Act assumes the existence of a right of a trustee to be remunerated unless the trustee has agreed to act without remuneration or has not done the work or no work needed to be done or the trustee has for some reason (for example misconduct) become disqualified to have the remuneration. So too a trustee is entitled as of right to a full indemnity out of the trust estate against all costs, charges and expenses properly incurred by the trustee: Adsett v Berlouis at 109, and cases cited therein; Jefferson v Official Trustee at [19].” In the instant case interlocutory relief, which would have prevented a meeting of creditors and the

putting of such a resolution to it, was denied.

____________________

[82,795A] Streamlined method for replacing trustee *181A (1) The current trustee of a bankrupt’s estate may, with the written consent of another trustee (either a registered trustee or the Official Trustee), nominate the other trustee as the new trustee of the estate. (2) The current trustee must give notice of the nomination to all the creditors who would be entitled under section 64A to receive notice of a meeting of creditors. (3) The notice must: (a) specify a date (at least 10 days after the notice is given) from which it is proposed that the new trustee will become the trustee of the estate; and (b) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the nomination taking effect without there being a meeting of creditors. (4) If no creditor lodges a written notice of objection with the current trustee at least 2 days before the specified date, then the new trustee replaces the current trustee as trustee of the estate, on the date specified in the notice. (5) For the purposes of this Act, the new trustee is treated as having been appointed by the creditors. (6) A certificate signed by the new trustee stating any matter relating to the replacement of the former trustee under this section is prima facie evidence of the matter. [s 181A insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] SECTION 181A GENERALLY [82,795A.5] Validity of appointment In Coshott v Coshott (2010) 184 FCR 495; [2010] FCA 300; BC201001732 this section came into consideration. An officer of the Official Trustee who was not a delegate of the Official Trustee should be transferred to a registered trustee. Rares J found that the trustee in question (at [24]) was validly nominated. He considered the interesting question of what amounts to a “signature” and held that there was no necessity that a physical signature be affixed, following Williams v Silver Peak Mines Ltd (1915) 21 CLR 40 at 47–48; [1915] HCA 83, wherein Griffiths CJ relied upon Schneider v Norris [1814] EngR 211; 2 M & S 286; R v Justices of Kent (1873) LR8QB 305 at 307; Evans v Hoare [1892] 1 QB 593 at 596. His Honour held that if there had been any invalidity of the nomination then s 306 would be available to mend ant “formal

[page 612] defect and irregularity” referring to Trustees of the Franciscan Missionaries of Mary v Weir (2000) 98 FCR 447 at 455–456; [2000] FCA 574; BC200002129 at [12]–[13] per Beaumont, Burchett and Hely JJ; Nilant v Macchia (2000) 104 FCR 238; [2000] FCA 1528; BC200006504 at FCR 244 and FCA [26]–[27] per Hill J, FCR 246 and FCA [36] per Carr J, and FCR 249 and FCA [51]–[53] per Weinberg J. In Nilat at FCR 249, Weinberg J (Carr J agreeing on this point at FCR 246 and FCA [36]). He reached this view despite the use of the word “must” in s 181A(2) and (3) and s 64A.

____________________ *Editor’s note: Section 181A applies to all bankruptcies, including those for which the date of bankruptcy was before the commencement of s 181A on 5 May 2003: see Sch 1 Pt 2 cl 229 of Act 131 of 2002.

[82,800] Bankruptcy of trustee etc 182 (1) If a registered trustee becomes bankrupt, becomes a party (as debtor) to a debt agreement or signs an authority under section 188, the trustee’s registration is cancelled. [subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(2) [subs (2) rep Act 44 of 1996 s 3 and Sch 1] (3) [subs (3) rep Act 44 of 1996 s 3 and Sch 1] (4) Where a person registered as a trustee dies, the person (the affected person) administering the estate of the deceased person must, before the end of the period of 28 days beginning on the day the affected person started to administer the estate, give written notice of that death to the Official Receiver. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (4) insrt Act 12 of 1980 s 95; am Act 44 of 1996 s 3 and Sch 1; Act 106 of 2010 s 3 and Sch 3[14], opn 15 July 2010; Act 106 of 2010 s 3 and Sch 2[30]–[32], opn 1 Dec 2010]

(5) Subsection (4) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (5) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001] SECTION 182 GENERALLY [82,800.5] Removal of bankrupt trustee The removal under this section is automatic, but Jacobs’ Law of Trusts in Australia, 7th ed, Butterworths, Sydney, 2006 observes that the court would usually remove a trustee who has become bankrupt (at [1585], citing, amongst other cases Miller v Cameron

(1936) 54 CLR 572; [1936] ALR 301; (1936) 10 ALJR 35a; BC3600025). See also Aravanis v Kelly; Estate of Thomson [2012] NSWSC 733; BC201204800.

____________________

[82,805] Release of registered trustee by the Court 183 (1) A trustee may apply to the Court for an order of release from the trusteeship of an estate. (2) Where the Court is satisfied that the trustee: (a) has realized all the property of the bankrupt or so much of it as can be realized without unduly protracting the trusteeship or has distributed a final dividend; (b) has ceased to act by reason of the approval of a composition or scheme of arrangement under Division 6 of Part IV; or (c) has resigned or has been removed from office; the Court may make the order sought. (3) In hearing the application, the Court must also consider any objection to the order sought that is made by the Inspector-General, the Official Receiver, a creditor or any other interested person. [subs (3) subst Act 44 of 1996 s 3 and Sch 1]

[page 613] (4) An order of release under this section: (a) discharges the trustee from all liability in respect of any act done or default made by him or her in the administration of the estate of the bankrupt; and (b) if the trustee has not already resigned or been removed from office, operates to remove him or her from office. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) An order of release under this section may be revoked by the Court on proof that it was obtained by fraud or by suppression or concealment of a material fact. (6) Where a trustee has died, the person administering the estate of the

trustee may apply to the Court for an order releasing the trustee’s estate from any claims arising out of the trustee’s administration of an estate of which he or she was trustee and, upon such an application, the Court may make such order as it thinks proper in the circumstances. [subs (6) subst Act 12 of 1980 s 96; am Act 44 of 1996 s 3 and Sch 2]

(7) This section does not apply in relation to the Official Trustee. [subs (7) subst Act 12 of 1980 s 96]

(8) [subs (8) rep Act 12 of 1980 s 96] SECTION 183 GENERALLY [82,805.10] Procedure See FCR O 77 r 47.

____________________

[82,810] Release of registered trustee by operation of law after 7 years 184 (1) If the trustee of the estate of a bankrupt: (a) is a registered trustee; and (b) has not already been released from being trustee of the estate under section 183; the trustee is released at the end of 7 years from the date on which the Official Receiver entered in the National Personal Insolvency Index the fact that the administration of the estate was finalised. [subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(2) [subs (2) rep Act 12 of 1980 s 97] (3) The release of a trustee from the trusteeship of an estate by force of this section has the same effect as an order of release under section 183.

[82,815] Release of the Official Trustee 184A (1) Where the Official Trustee becomes the trustee of the estate of a bankrupt upon the release of a registered trustee under section 183 or 184, the Official Trustee does not become personally liable, by reason of its so becoming the trustee, in respect of an act done, default made or liability incurred by a prior trustee.

(2) The Official Trustee is released from being trustee of the estate of a bankrupt at the end of 7 years from the date on which the Official Receiver entered in the National Personal Insolvency Index the fact that the administration of the estate was finalised. [subs (2) subst Act 44 of 1996 s 3 and Sch 1]

(3) [subs (3) rep Act 44 of 1996 s 3 and Sch 1] (4) [subs (4) rep Act 44 of 1996 s 3 and Sch 1] (5) [subs (5) rep Act 44 of 1996 s 3 and Sch 1] (6) [subs (6) rep Act 44 of 1996 s 3 and Sch 1] (7) [subs (7) rep Act 44 of 1996 s 3 and Sch 1] [s 184A insrt Act 12 of 1980 s 98]

[page 614]

PART IX — DEBT AGREEMENTS DIVISION 1 — INTRODUCTION [Div 1 am Act 44 of 2007 s 3 and Sch 2[5], opn 1 July 2007]

[82,865] Definitions 185 In this Part, unless the contrary intention appears: account-freezing notice means a notice under subsection 186LB(2). [def insrt Act 44 of 2007 s 3 and Sch 2[7], opn 1 July 2007]

affected creditor means: (a) in relation to a proposal to vary or terminate a debt agreement — a creditor who is a party (as creditor) to the agreement; or (b) in relation to a debt agreement proposal — a creditor who would be a party to the proposed debt agreement if it were made. applicable deadline: (a) in relation to a debt agreement proposal, means: (i) if Official Receiver accepted the proposal for processing in December — the end of the 42nd day after the

acceptance; or (ii) otherwise — the end of the 35th day after the Official Receiver accepted the proposal for processing; or (b) in relation to a proposal to vary a debt agreement, means: (i) if the proposal was given to the Official Receiver in December — the end of the 42nd day after the proposal was given; or (ii) otherwise — the end of the 35th day after the proposal was given to the Official Receiver; or (c) in relation to a proposal to terminate a debt agreement, means: (i) if the proposal was given to the Official Receiver in December — the end of the 21st day after the proposal was given; or (ii) otherwise — the end of the 14th day after the proposal was given to the Official Receiver. [def insrt Act 44 of 2007 s 3 and Sch 2[8], opn 1 July 2007]

bank means an ADI or any other bank. [def insrt Act 44 of 2007 s 3 and Sch 2[9], opn 1 July 2007]

basic eligibility test has the meaning given by section 186A. [def insrt Act 44 of 2007 s 3 and Sch 1[13], opn 11 Apr 2007]

debt agreement activities of a company means the activities of the company in connection with: (a) debt agreement proposals for which the company is to be the administrator; and (b) debt agreements for which the company is the administrator. [def insrt Act 44 of 2007 s 3 and Sch 1[14], opn 11 Apr 2007]

debtor [def rep Act 44 of 2007 s 3 and Sch 2[10], opn 1 July 2007]

designated 6-month arrears default has the meaning given by subsection 185LC(3). [def insrt Act 44 of 2007 s 3 and Sch 2[11], opn 1 July 2007]

externally-administered body corporate has the same meaning as in the Corporations Act 2001. [def insrt Act 44 of 2007 s 3 and Sch 1[15], opn 11 Apr 2007]

[page 615] frozen debt means a debt that: (a) is owed by a debtor who has given a debt agreement proposal that has been accepted by the Official Receiver for processing; and (b) would be a provable debt in relation to the proposed debt agreement if it were made; but does not include a debt arising under a maintenance agreement or maintenance order (whenever entered into or made). [def am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 44 of 2007 s 3 and Sch 2[12], opn 1 July 2007]

insolvent under administration [def rep Act 46 of 2011 s 3 Sch 2[291], opn 27 Dec 2011]

provable debt, in relation to a debt agreement, means a debt that would have been provable in bankruptcy if the debtor had become a bankrupt when the acceptance of the relevant debt agreement proposal for processing was recorded in the National Personal Insolvency Index. [def am Act 44 of 2007 s 3 and Sch 2[13], opn 1 July 2007]

registered debt agreement administrator means a person who is registered under section 186D as a debt agreement administrator. [def insrt Act 44 of 2007 s 3 and Sch 1[17], opn 11 Apr 2007]

working day means a day that is not: (a) a Saturday or a Sunday; or (b) a public holiday in any place in Australia. [def insrt Act 44 of 2007 s 3 and Sch 2[14], opn 1 July 2007]

(2) [subs (2) rep Act 44 of 2007 s 3 and Sch 2[15], opn 1 July 2007] (3) [subs (3) rep Act 44 of 2007 s 3 and Sch 2[15], opn 1 July 2007] [s 185 insrt Act 44 of 1996 s 3 and Sch 1]

[82,865A] Procedures for dealing with proposals 185A [s 185A rep Act 44 of 2007 s 3 and Sch 2[16], opn 1 July 2007]

[82,865B] Acceptance of a proposal 185B [s 185B rep Act 44 of 2007 s 3 and Sch 2[16], opn 1 July 2007]

DIVISION 2 — DEBT AGREEMENT PROPOSALS

[82,865C] Giving a debt agreement proposal to the Official Receiver 185C (1) Giving a debt agreement proposal A debtor who is insolvent may give the Official Receiver a written proposal for a debt agreement. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 44 of 2007 s 3 and Sch 2[17], opn 1 July 2007]

(2) Requirements for a debt agreement proposal A debt agreement proposal must: (aa) be in the approved form; and (a) identify the debtor’s property that is to be dealt with under the agreement; and (b) specify how the property is to be dealt with; and (c) authorise a specified person (being the Official Trustee, a registered trustee or another person) to deal with the identified property in the way specified; and [page 616] (d) provide that: (i) all provable debts in relation to the agreement rank equally; and (ii) if the total amount paid by the debtor under the agreement in respect of those provable debts is insufficient to meet those provable debts in full, those provable debts are to be paid proportionately; and (e) provide that a creditor is not entitled to receive, in respect of a provable debt, more than the amount of the debt; and

provide that the amount of a provable debt in relation to the (f) agreement is to be ascertained as at the time when the acceptance of the proposal for processing is recorded on the National Personal Insolvency Index; and (g) if a creditor is a secured creditor — provide that, if the creditor does not realise the creditor’s security while the agreement is in force, the creditor is taken, for the purposes of working out the amount payable to the creditor under the agreement, to be a creditor only to the extent (if any) by which the amount of the provable debt exceeds the value of the creditor’s security; and (h) if a creditor is a secured creditor — provide that, if the creditor realises the creditor’s security while the agreement is in force, the creditor is taken, for the purposes of working out the amount payable to the creditor under the agreement, to be a creditor only to the extent of any balance due to the creditor after deducting the net amount realised; and (i) be signed by the debtor; and (j) specify the date on which the debtor signed the proposal. [subs (2) am Act 44 of 2007 s 3 and Sch 2 [18]–[19], opn 1 July 2007]

(2A) A debt agreement proposal must not provide for the transfer of property (other than money) to a creditor. [subs (2A) insrt Act 44 of 2007 s 3 and Sch 2[20], opn 1 July 2007]

(2B) A debt agreement proposal given to the Official Receiver must be accompanied by an explanatory statement in the approved form containing such information as the form requires. [subs (2B) insrt Act 44 of 2007 s 3 and Sch 2[20], opn 1 July 2007]

(2C) The debtor’s subsection (2B) statement may be set out in the same document as the debtor’s debt agreement proposal. [subs (2C) insrt Act 44 of 2007 s 3 and Sch 2[20], opn 1 July 2007]

(2D) If the person specified under paragraph (2)(c) is not the debtor, the debt agreement proposal given to the Official Receiver must be accompanied by a certificate signed by the person to the effect that: (a) the person consents to being specified under that paragraph; and (b) the person has given the debtor the information prescribed by the regulations; and (c) having regard to:

(i)

the circumstances in existence at the time when the debtor’s statement of affairs was signed by the debtor; and (ii) any other relevant matters; the person has reasonable grounds to believe that the debtor is likely to be able to discharge the obligations created by the agreement as and when they fall due; and (d) the person has reasonable grounds to believe that all information required to be set out in the debtor’s statement of affairs has been set out in that statement; and [page 617] (e) the person has reasonable grounds to believe that all information required to be set out in the debtor’s subsection (2B) statement has been set out in that statement. [subs (2D) insrt Act 44 of 2007 s 3 and Sch 2[20], opn 1 July 2007]

(2E) A debt agreement proposal must not be given jointly by 2 or more debtors. [subs (2E) insrt Act 44 of 2007 s 3 and Sch 2[20], opn 1 July 2007]

(2F) If a debt agreement proposal is expressed to be subject to the occurrence of a specified event within a specified period after the debt agreement proposal is accepted, the specified period must not be longer than 7 days. [subs (2F) insrt Act 44 of 2007 s 3 and Sch 2[20], opn 1 July 2007]

(3) What a debt agreement proposal may include A debt agreement proposal may provide for any matter relating to the debtor’s financial affairs. If the person specified under paragraph (2)(c) is not the Official Trustee, the proposal may also provide for the remuneration of that person. (3A) Remuneration of administrator If a debt agreement proposal provides for the remuneration of the person specified under paragraph (2)(c), the debt agreement proposal must: (a) provide that the total remuneration of the person specified under paragraph (2)(c) is an amount equal to a specified percentage (the overall remuneration percentage) of the total amount payable by

the debtor under the agreement in respect of provable debts; and (b) provide that, if the debtor pays an amount (the individual debt repayment amount) under the agreement in respect of those provable debts: (i) the debtor must also pay to the person specified under paragraph (2)(c) an amount (the individual remuneration amount) ascertained in accordance with the agreement; and (ii) the individual remuneration amount must not exceed the overall remuneration percentage of the individual debt repayment amount; and (iii) the person specified under paragraph (2)(c) must apply the individual remuneration amount towards the discharge of the person’s entitlement to remuneration under the agreement. [subs (3A) insrt Act 44 of 2007 s 3 and Sch 2[21], opn 1 July 2007]

(4) When a debtor cannot give a debt agreement proposal A debtor cannot give the Official Receiver a debt agreement proposal at a particular time (the proposal time) if: (a) at any time in the 10 years immediately before the proposal time the debtor: (i) has been a bankrupt; or (ii) has been a party (as debtor) to a debt agreement; or (iii) has given an authority under section 188; or (b) at the proposal time the debtor’s unsecured debts total more than: (i) the threshold amount; or (ii) if the regulations prescribe a greater amount for this purpose — the amount prescribed; or (c) at the proposal time, the value of the debtor’s property that would be divisible among creditors if the debtor were bankrupt is more than the threshold amount; or (d) the debtor’s after tax income (see subsection (5)) in the year beginning at the proposal time is likely to exceed three-quarters of the threshold amount. [subs (4) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 618] (4A) Subparagraph (4)(a)(i) does not apply in relation to a bankruptcy that has been annulled under section 153B. [subs (4A) insrt Act 44 of 2007 s 3 and Sch 2[22], opn 1 July 2007]

(5) In this section: after tax income, in relation to a debtor and a year, means the amount that is likely to be the taxable income of the debtor for the year less the income tax and the medicare levy imposed on that taxable income (worked out treating the year as a year of income if it is not actually a year of income). Note: For the purposes of this definition, taxable income, income tax and year of income have the same meanings as in the Income Tax Assessment Act 1936, and medicare levy means the levy imposed by the Medicare Levy Act 1986.

threshold amount, in relation to a particular time, means 7 times the amount that, at that time, is specified in column 3, item 2, Table B, point 1064-B1, Pension Rate Calculator A, in the Social Security Act 1991. unsecured debt includes the amount by which the value of a debt exceeds the value of a security given for the debt. [s 185C insrt Act 44 of 1996 s 3 and Sch 1]

[82,865D] Statement of affairs to be given with a debt agreement proposal 185D (1) A debtor who gives the Official Receiver a debt agreement proposal must give the Official Receiver a statement of the debtor’s affairs with the proposal. Note: Section 6A sets out requirements for statements of affairs. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The debtor or an affected creditor may, without fee and either personally or by an agent: (a) inspect the statement of affairs; and (b) obtain a copy of, or make extracts from, the statement of affairs. [subs (2) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 44 of 2007 s 3 and Sch 2[23], opn 1 July 2007]

(3) If the approved form for a statement of affairs indicates that particular information in the statement will not be made available to the public, the Official Receiver must ensure that the information is not made available under this section to a person other than the debtor (or an agent of the debtor). [subs (3) insrt Act 44 of 2007 s 3 and Sch 2[24], opn 1 July 2007]

(4) The Official Receiver may refuse to allow a person access under this section to particular information in a debtor’s statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person. [subs (4) insrt Act 44 of 2007 s 3 and Sch 2[24], opn 1 July 2007]

(5) The debtor’s statement of affairs may be set out in the same document as the debtor’s subsection 185C(2B) statement. [subs (5) insrt Act 44 of 2007 s 3 and Sch 2[24], opn 1 July 2007]

(6) This section does not limit subsection 185C(2B). [subs (6) insrt Act 44 of 2007 s 3 and Sch 2[24], opn 1 July 2007] [s 185D insrt Act 44 of 1996 s 3 and Sch 1]

[page 619]

[82,865E] Accepting a debt agreement proposal for processing 185E (1) If the person specified under paragraph 185C(2)(c) is the debtor, the Official Receiver must, before accepting the debt agreement proposal for processing, give the debtor the information prescribed by the regulations. [subs (1) subst Act 44 of 2007 s 3 and Sch 2[25], opn 1 July 2007]

(2) If a debtor gives the Official Receiver a debt agreement proposal, the Official Receiver may accept the proposal for processing if: (a) the Official Receiver is satisfied that subsections 185C(2), (2A), (2B), (2E) and (4) have been complied with; and (b) if the person specified under paragraph 185C(2)(c) is not the debtor — the Official Receiver is satisfied that subsection 185C(2D) has been complied with; and (c) if the debt agreement proposal is expressed to be subject to the

occurrence of a specified event within a specified period after the debt agreement proposal is accepted — the Official Receiver is satisfied that subsection 185C(2F) has been complied with; and (d) if the proposal provides for the remuneration of the person specified under paragraph 185C(2)(c) — the Official Receiver is satisfied that subsection 185C(3A) has been complied with; and (e) the Official Receiver is satisfied that the statement of affairs accompanying the proposal is in order. [subs (2) subst Act 44 of 2007 s 3 and Sch 2[26], opn 1 July 2007]

(2AA) The Official Receiver must not accept a debt agreement proposal for processing unless the proposal was given to the Official Receiver within 14 days after the day on which the debtor signed the proposal. [subs (2AA) insrt Act 44 of 2007 s 3 and Sch 2[27], opn 1 July 2007]

(2A) If the person specified under paragraph 185C(2)(c) is not: (a) a registered debt agreement administrator; or (b) a registered trustee; the Official Receiver must not accept the debt agreement proposal unless the Official Receiver is satisfied that the person passes the basic eligibility test. [subs (2A) subst Act 44 of 2007 s 3 and Sch 2[28], opn 1 July 2007]

(2B) If the person specified under paragraph 185C(2)(c) is not the debtor, the Official Receiver must not accept the debt agreement proposal for processing unless: (a) the person is a registered debt agreement administrator; or (b) the person is a registered trustee; or (c) both: (i) the person is the administrator of not more than 5 debt agreements; and (ii) no declaration is in force in relation to the person under section 186M. [subs (2B) insrt Act 44 of 2007 s 3 and Sch 2[29], opn 1 July 2007]

(2C) If: (a) the person specified under paragraph 185C(2)(c) in relation to a debt agreement proposal (the first debt agreement proposal) is not: (i) a registered debt agreement administrator; or

(ii) a registered trustee; and (b) the person is specified under that paragraph in relation to one or more other debt agreement proposals; [page 620] the Official Receiver must not accept the first debt agreement proposal for processing if the person would become the administrator of more than 5 debt agreements if it were assumed that: (c) the first debt agreement proposal is accepted; and (d) those other debt agreement proposals are accepted. [subs (2C) insrt Act 44 of 2007 s 3 and Sch 2[29], opn 1 July 2007]

(3) The Official Receiver must not accept a debt agreement proposal for processing if the Official Receiver thinks that the creditors’ interests would be better served by not accepting the proposal for processing. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) A debtor who gives the Official Receiver a debt agreement proposal may apply to the Administrative Appeals Tribunal for review of the Official Receiver’s decision on whether to accept the proposal for processing. [subs (4) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(5) If the Official Receiver accepts a debt agreement proposal for processing, the Official Receiver must process the proposal in accordance with section 185EA. [subs (5) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 44 of 2007 s 3 and Sch 2[30], opn 1 July 2007]

(6) [subs (6) rep Act 44 of 2007 s 3 and Sch 2[31], opn 1 July 2007] [s 185E insrt Act 44 of 1996 s 3 and Sch 1]

[82,865EA] Processing of debt agreement proposal 185EA (1) Processing of proposals by the Official Receiver If the Official Receiver is required by subsection 185E(5) to process a debt agreement proposal, the Official Receiver must write to each of the affected creditors who is known to the Official Receiver, asking each affected creditor to indicate whether the proposal should be accepted.

(2) Writing to creditors to deal with a proposal When writing to each affected creditor under subsection (1) about a debt agreement proposal, the Official Receiver must: (a) provide the creditor with a copy of: (i) the debt agreement proposal; and (ii) the debtor’s subsection 185C(2B) statement; and (b) ask the creditor to give a written statement setting out whether or not the debt agreement proposal should be accepted; and (c) inform the creditor of the person to whom the statement should be given and of the need to give the statement before the applicable deadline. (3) The paragraph (2)(b) statement must be in the approved form. [s 185EA insrt Act 44 of 2007 s 3 and Sch 2[32], opn 1 July 2007]

[82,865EB] Inspection of creditor’s statement 185EB If an affected creditor gives a paragraph 185EA(2)(b) statement: (a) the debtor; or (b) any other affected creditor; may, without fee and either personally or by an agent: (c) inspect the statement; and (d) obtain a copy of, or make extracts from, the statement. [s 185EB insrt Act 44 of 2007 s 3 and Sch 2[32], opn 1 July 2007]

[page 621]

[82,865EC] Acceptance of a debt agreement proposal 185EC (1) Acceptance in writing A debt agreement proposal is accepted if: (a) the Official Receiver writes to affected creditors of a debtor under section 185EA; and (b) a majority in value of the creditors who reply before the applicable

deadline state that the proposal should be accepted. (2) Timing of acceptance A debt agreement proposal that is accepted under subsection (1) is taken to be accepted at the applicable deadline. Value of a creditor (3) In assessing, for the purposes of paragraph (1)(b), the value of a creditor who is a related entity of the debtor, any debt that was assigned to the creditor is taken to have a value equal to the value of the consideration that the creditor gave for the assignment. (4) For the purposes of paragraph (1)(b), the value of a creditor is to be assessed as at the time when the acceptance of the debt agreement proposal for processing was recorded on the National Personal Insolvency Index. (5) For the purposes of paragraph (1)(b), a secured creditor is taken to be a creditor only to the extent (if any) by which the amount of the debt owing to the creditor exceeds the value of the creditor’s security. [s 185EC insrt Act 44 of 2007 s 3 and Sch 2[32], opn 1 July 2007]

[82,865ED] Cancellation of acceptance of debt agreement proposal for processing 185ED (1) Scope This section applies if: (a) the Official Receiver has accepted a debt agreement proposal for processing; and (b) the applicable deadline has not arrived. (2) Cancellation The Official Receiver may cancel the acceptance of the debt agreement proposal for processing if: (a) the Official Receiver becomes aware that one or more affected creditors were not disclosed in the debtor’s statement of affairs; or (b) the Official Receiver becomes aware that: (i) the debtor’s statement of affairs; or (ii) the debtor’s subsection 185C(2B) statement; was deficient because it omitted a material particular or because it was incorrect in a material particular; or (c) the Official Receiver becomes aware of a material change in the debtor’s circumstances that:

was not foreshadowed in the debtor’s subsection 185C(2B) (i) statement or the debtor’s statement of affairs; and (ii) in the opinion of the Official Receiver, is capable of affecting an affected creditor’s decision whether or not to accept the proposal; or (d) the Official Receiver becomes aware of a matter that, if it had been known to the Official Receiver at the time of acceptance of the debt agreement proposal for processing, would have resulted in a refusal of acceptance on the grounds that subsection 185C(4) had not been complied with. (3) Notification of cancellation If the Official Receiver cancels the acceptance of a debt agreement proposal for processing, the Official Receiver must give written notice of the cancellation, and the reasons for it, to: (a) the debtor; and (b) affected creditors who are known to the Official Receiver. [page 622] (4) Review If the Official Receiver decides to cancel the acceptance of a debt agreement proposal for processing, the debtor may apply to the Administrative Appeals Tribunal for review of the decision. [s 185ED insrt Act 44 of 2007 s 3 and Sch 2[32], opn 1 July 2007]

[82,865F] Effect of accepting a debt agreement proposal for processing 185F (1) After acceptance of a debt agreement proposal for processing is recorded in the National Personal Insolvency Index: (a) a creditor cannot apply for enforcement of, or enforce, a remedy against the debtor’s person or property in respect of a frozen debt; and. (b) a sheriff must not take action, or further action, to execute, or sell property under, any process issued by a court to enforce payment of a frozen debt owed by the debtor; and

a person who is entitled under a law of the Commonwealth, or of a (c) State or Territory of the Commonwealth, to retain or deduct money from money that is or will be owing or payable to the debtor must not retain or deduct money; until any of the following events occurs: (d) in a case where: (i) the applicable deadline arrives; and (ii) the proposal has not been accepted; the arrival of the applicable deadline; (e) in a case where: (i) the proposal is accepted; and (ii) the proposal is not expressed to be subject to the occurrence of a specified event within a specified period after the proposal is accepted; and (ii) details of the debt agreement are entered on the National Personal Insolvency Index; the entry of those details on the National Personal Insolvency Index; (f) in the case where: (i) the proposal is accepted; and (ii) the proposal is expressed to be subject to the occurrence of a specified event within a specified period after the proposal is accepted; and (iii) that event occurs within that period; and (iv) details of the debt agreement are entered on the National Personal Insolvency Index; the entry of those details on the National Personal Insolvency Index; (g) in the case where: (i) the proposal is accepted; and (ii) the proposal is expressed to be subject to the occurrence of a specified event within a specified period after the proposal is accepted; and (iii) that event does not occur within that period;

the end of that period; (h) in a case where the Official Receiver cancels the acceptance of the proposal for processing — the cancellation of the acceptance; (i) in a case where the proposal lapses — the lapse of the proposal. [subs (1) am Act 44 of 2007 s 3 and Sch 2[33], opn 1 July 2007]

[page 623] (2) Subsection (1) does not prevent a creditor from: (a) starting a legal proceeding in respect of a frozen debt; or (b) taking a fresh step in such a proceeding (except to enforce a judgment). (3) Subsection (1) does not prevent a creditor from applying for enforcement of, or enforcing, a remedy against the debtor’s person or property in respect of a liability under a proceeds of crime law. [subs (3) insrt Act 44 of 2007 s 3 and Sch 2[34], opn 1 July 2007] [s 185F insrt Act 44 of 1996 s 3 and Sch 1] SECTION 185F GENERALLY [82,865F.5] General It remains to be seen whether the acceptance of a debt agreement for processing prevents a creditor from proceeding with a creditor’s petition. Arguably a creditor’s petition does not constitute enforcement of a remedy against the debtor’s person or property: see Fraser v DCT (1996) 69 FCR 99 at 111; 138 ALR 689; Re Jensen; Ex parte Jensen (1982) 45 ALR 574; 65 FLR 97; Re Hughes; Ex parte Westpac Banking Corporation (VSC, 1324 of 1997, 28 November 1997, unreported). [82,865F.10] Debt proposal In the absence of a debt agreement a proposal of the same, in the words of Hartnett FM in Brown v A Whistle & Co (1979) Pty Ltd [2011] FMCA 423; BC201104450 “…does not amount to enforcement of a remedy against the estate of the debtor within the meaning of s 185F(1)(a) of the Act (Accounts Control Management Services Pty Ltd v Elmer [2007] FMCA 733; BC200703801 per Wilson FM at para 9).” See [91,370.5].

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[82,865G] Lapsing of a debt agreement proposal 185G A debt agreement proposal lapses if: (a) [repealed]

the Official Receiver accepts the proposal for processing and writes (b) to affected creditors about it, but no replies are received before the applicable deadline; or (c) the debtor dies after giving the proposal to the Official Receiver but before a debt agreement is made on the basis of the proposal. Note: Section 185H deals with the making of a debt agreement. [s 185G insrt Act 44 of 1996 s 3 and Sch 1; am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 44 of 2007 s 3 and Sch 2[35]–[36], opn 1 July 2007]

DIVISION 3 — MAKING A DEBT AGREEMENT

[82,865H] Making a debt agreement 185H (1) This section sets out the 2 situations in which a debt agreement is made. (2) Unconditional debt agreement proposals If: (a) a debt agreement proposal is accepted; and (b) the proposal is not expressed to be subject to the occurrence of a specified event within a specified period after the proposal is accepted; then: (c) the Official Receiver must enter details of the debt agreement concerned on the National Personal Insolvency Index; and (d) the debt agreement is made in the terms of the proposal when those details are so entered. Note: Section 185EC explains how a proposal is accepted.

[page 624] (3) Conditional debt agreement proposals If: (a) a debt agreement proposal is accepted; and (b) the proposal is expressed to be subject to the occurrence of a specified event within a specified period after the proposal is accepted; and (c) the event occurs within that period;

then: (d) the Official Receiver must enter details of the debt agreement concerned on the National Personal Insolvency Index; and (e) the debt agreement is made in the terms of the proposal when those details are so entered. Note: Section 185EC explains how a proposal is accepted. [s 185H subst Act 44 of 2007 s 3 and Sch 2[37], opn 1 July 2007]

[82,865I] Parties to a debt agreement 185I The parties to a debt agreement are: (a) the debtor; and (b) the creditors to whom the debtor owed provable debts. [s 185I insrt Act 44 of 1996 s 3 and Sch 1; am Act 44 of 2007 s 3 and Sch 2[38], opn 1 July 2007]

[82,865J] Release of debtor from debts 185J [s 185J rep Act 44 of 2007 s 3 and Sch 2[39], opn 1 July 2007]

[82,865K] Prevention of proceedings relating to debts 185K (1) While a debt agreement is in force and details of it are entered on the National Personal Insolvency Index, a creditor cannot: (a) present a creditor’s petition against the debtor; or (b) proceed further with a creditor’s petition that was presented against the debtor before details of the debt agreement were entered in the Index; or (c) enforce a remedy against the debtor’s person or property, or start or take a fresh step in legal proceedings, in respect of a provable debt. [subs (1) am Act 44 of 2007 s 3 and Sch 2[40], opn 1 July 2007]

(2) Paragraph (1)(c) does not prevent a creditor from enforcing a remedy against the debtor or the debtor’s property for a liability under one or more of the following: (a) a maintenance agreement; (b) a maintenance order;

(c) a proceeds of crime law. [subs (2) am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

(3) While a debt agreement is in force and details of it are entered on the National Personal Insolvency Index: (a) a sheriff must not take action, or further action, to execute, or sell property under, any process issued by a court to enforce payment of a provable debt owed by the debtor; and (b) a person who is entitled under a law of the Commonwealth, or of a State or Territory, to retain or deduct money from money that is or will be owing or payable to the debtor must not retain or deduct money. [subs (3) insrt Act 44 of 2007 s 3 and Sch 2[41], opn 1 July 2007] [s 185K insrt Act 44 of 1996 s 3 and Sch 1]

[82,865L] Distribution of property under a debt agreement 185L [s 185L rep Act 44 of 2007 s 3 and Sch 2[42], opn 1 July 2007] [page 625]

DIVISION 3A — DUTIES OF ADMINISTRATORS [Div 3A insrt Act 44 of 2007 s 3 and Sch 2[43], opn 1 July 2007]

[82,865LA] Duties of an administrator — general 185LA The duties of an administrator of a debt agreement include: (a) dealing with the debtor’s property in the manner specified in the debt agreement; and (b) giving information about the administration of the debt agreement to the debtor if the debtor makes a reasonable request for the information; and (c) giving information about the administration of the debt agreement to a creditor who:

(i) is a party to the debt agreement; and (ii) makes a reasonable request for the information.

[82,865LB] Administrator to notify creditors of a 3month arrears default by a debtor 185LB (1) If a 3-month arrears default by a debtor occurs at a particular time in relation to a debt agreement, the administrator of the debt agreement must notify, in writing, each creditor who is a party to the debt agreement of that occurrence within 10 working days of that occurrence. (2) The administrator of a debt agreement is not required to give a notification under subsection (1) in respect of a 3-month arrears default (the first default) if: (a) one or more other 3-month arrears defaults by the debtor have occurred in relation to the debt agreement; and (b) the 3-month period to which the first default relates overlaps with the 3-month period to which any of those other 3-month arrears defaults relate; and (c) a notification under subsection (1) has already been given in respect of any of those other 3-month arrears defaults. (3) For the purposes of this section, a 3-month arrears default by a debtor occurs at a particular time (the test time) in relation to a debt agreement if: (a) at the beginning of the 3-month period ending immediately before the test time, one or more payments in respect of provable debts became due and payable by the debtor under the debt agreement; and (b) throughout that 3-month period, the debtor was in arrears in respect of any or all of those payments.

[82,865LC] Administrator to notify Official Receiver of a designated 6-month arrears default by a debtor 185LC (1) If a designated 6-month arrears default by a debtor occurs at particular time in relation to a debt agreement, the administrator of the debt

agreement must notify, in writing, the Official Receiver of that occurrence within 10 working days of that occurrence. (2) The administrator of a debt agreement is not required to give a notification under subsection (1) in relation to the debt agreement if the administrator has already given such a notification in relation to the debt agreement. (3) For the purposes of this Part, a designated 6-month arrears default by a debtor occurs at a particular time (the test time) in relation to a debt agreement if: [page 626] (a) both of the following apply: (i) before the test time, one or more payments in respect of provable debts became due and payable by the debtor under the debt agreement; (ii) at no time during the 6-month period ending immediately before the test time were any obligations in respect of those payments discharged; or (b) both of the following apply: (i) at the test time, the obligations created by the debt agreement have not been discharged; (ii) the last of those obligations should have been discharged at a time 6-months before the test time.

[82,865LD] Administrator to maintain separate bank account 185LD (1) A person who is: (a) either: (i) a registered debt agreement administrator; or (ii) a registered trustee; and (b) the administrator of one or more debt agreements;

must pay all money received by the person from debtors under those debt agreements to the credit of a single interest-bearing bank account that: (c) bears: (i) the person’s own name; and (ii) the words “— Debt Agreement Administration Trust Account”; and (d) complies with such other requirements (if any) as are specified in the regulations. (2) The person must only pay into the account money received by the person from debtors under debt agreements. (3) The person is entitled, in his or her personal capacity, to each payment of interest on the account, less an amount equal to the bank fees or charges (if any) paid or payable on the account during the period to which the interest relates. (4) Interest on money in the account is not subject to taxation under a law of the Commonwealth, a State or a Territory except as provided in Part 2 of the Bankruptcy (Estate Charges) Act 1997.

[82,865LE] Administrator to keep accounts etc 185LE (1) An administrator of a debt agreement must: (a) keep such accounts, books and records as are necessary to give a full and correct account of the administration of the debt agreement; and (b) if required to do so by the Inspector-General — make those accounts and records available for inspection by the InspectorGeneral; and (c) if required to do so by the Inspector-General — answer any inquiries about the debt agreement; and (d) cooperate with any inquiry or investigation made by the InspectorGeneral under paragraph 12(1)(bb). (2) If an administrator of one or more debt agreements is to be remunerated under those debt agreements, the administrator must: (a) maintain a separate record of: (i) money received by the administrator from the debtors in

relation to those debt agreements; and (ii) payments made by the administrator in relation to those debt agreements; and [page 627] (iii) the balance of money held by the administrator in relation to those debt agreements; and (b) if the administrator maintains an account under subsection 185LD(1) — at least once every 45 days, reconcile the balance held in the subsection 185LD(1) account with the corresponding record maintained under paragraph (a).

[82,865LEA] Annual return 185LEA (1) If, during a financial year, an administrator of a debt agreement administered the agreement, the administrator must, within the period of 35 days after the end of that year, give the Inspector-General a return, in the approved form, in relation to the administration of that agreement during that year. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices).

(2) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [s 185LEA insrt Act 106 of 2010 s 3 and Sch 2[33], opn 1 Dec 2010]

[82,865LF] Succession of administrator 185LF (1) Scope This section applies if: (a) a person (the earlier administrator) ceases to be the administrator of a debt agreement; and (b) another person (the later administrator) becomes the administrator of the debt agreement in place of the earlier administrator. (2) Duty The earlier administrator must: (a) prepare an account of:

money received by the earlier administrator from the debtor in relation to the debt agreement; and (ii) payments made by the earlier administrator in relation to the debt agreement; and (b) keep a copy of the account; and (c) give the later administrator: (i) a copy of the account; and (ii) a copy of any other accounts the earlier administrator received from a person who was the administrator of the debt agreement before the earlier administrator. (i)

[82,865LG] Duties of an administrator in relation to debt agreements — extended meaning 185LG (1) For the purposes of this Act, a duty of an administrator under this Act is taken to be a duty of an administrator in relation to a debt agreement, even if the duty does not relate to a particular debt agreement. (2) If a person signs a certificate under subsection 185C(2D) in relation to a debt agreement proposal: (a) the person must ensure that the certificate is correct; and (b) for the purposes of this Act, the requirement set out in paragraph (a) is taken to be a duty of an administrator in relation to a debt agreement. (3) For the purposes of this Act, a requirement set out in subsection 185LF(2) or 185N(5) is taken to be a duty of an administrator in relation to a debt agreement. [page 628]

DIVISION 4 — VARYING A DEBT AGREEMENT [Div 4 insrt Act 44 of 1996 s 3 and Sch 1]

[82,865M] Varying a debt agreement

185M (1) Proposing to vary a debt agreement A debtor or creditor who is a party to a debt agreement may give the Official Receiver a written proposal to vary the agreement. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(1A) The proposal must be in the approved form. [subs (1A) insrt Act 44 of 2007 s 3 and Sch 2[44], opn 1 July 2007]

(1B) The proposal must be accompanied by an explanatory statement in the approved form containing such information as the form requires. [subs (1B) insrt Act 44 of 2007 s 3 and Sch 2[44], opn 1 July 2007]

(1C) The subsection (1B) statement may be set out in the same document as the proposal. [subs (1C) insrt Act 44 of 2007 s 3 and Sch 2[44], opn 1 July 2007]

(2) Processing a proposal to vary a debt agreement The Official Receiver must process the proposal in accordance with section 185MA if the Official Receiver is satisfied that subsections (1A) and (1B) of this section have been complied with. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 44 of 2007 s 3 and Sch 2[45]–[46], opn 1 July 2007]

(3) Varying the agreement If the proposal is accepted, the agreement is varied in the way set out in the proposal. Note: Section 185MC explains how a proposal is accepted. [subs (3) am Act 44 of 2007 s 3 and Sch 2[47], opn 1 July 2007]

[82,865MA] Procedures for dealing with proposals to vary debt agreements 185MA (1) Processing of proposals by the Official Receiver If the Official Receiver is required by subsection 185M(2) to process a proposal to vary a debt agreement, the Official Receiver must write to each of the affected creditors who is known to the Official Receiver, asking each affected creditor to indicate whether the proposal should be accepted. (2) Writing to creditors to deal with a proposal When writing to each affected creditor under subsection (1) about a proposal to vary a debt agreement, the Official Receiver must: (a) provide the creditor with a copy of: (i) the proposal; and

(ii) the relevant subsection 185M(1B) statement; and (b) ask the creditor to give a written statement setting out whether or not the proposal should be accepted; and (c) inform the creditor of the person to whom the statement should be given and of the need to give the statement before the applicable deadline. (3) The paragraph (2)(b) statement must be in the approved form. [s 185MA insrt Act 44 of 2007 s 3 and Sch 2[48], opn 1 July 2007]

[82,865MB] Inspection of creditor’s statement 185MB If an affected creditor gives a paragraph 185MA(2)(b) statement: (a) the debtor; or (b) any other affected creditor; [page 629] may, without fee and either personally or by an agent: (c) inspect the statement; and (d) obtain a copy of, or make extracts from, the statement. [s 185MB insrt Act 44 of 2007 s 3 and Sch 2[48], opn 1 July 2007]

[82,865MC] Acceptance of a proposal to vary a debt agreement 185MC (1) Acceptance in writing A proposal to vary a debt agreement is accepted if: (a) the Official Receiver writes to affected creditors of a debtor under section 185MA; and (b) a majority in value of the creditors who reply before the applicable deadline state that the proposal should be accepted. (2) Timing of acceptance A proposal that is accepted under subsection (1) is taken to be accepted at the applicable deadline. Value of a creditor

(3) In assessing, for the purposes of paragraph (1)(b), the value of a creditor who is a related entity of the debtor, any debt that was assigned to the creditor is taken to have a value equal to the value of the consideration that the creditor gave for the assignment. (4) For the purposes of paragraph (1)(b), the value of a creditor is to be assessed as at the time when the acceptance of the relevant debt agreement proposal for processing was recorded on the National Personal Insolvency Index. (5) For the purposes of paragraph (1)(b), a secured creditor is taken to be a creditor only to the extent (if any) by which the amount of the debt owing to the creditor exceeds the value of the creditor’s security. [s 185MC insrt Act 44 of 2007 s 3 and Sch 2[48], opn 1 July 2007]

[82,865MD] Withdrawal of proposal to vary a debt agreement 185MD (1) Scope This section applies if: (a) a proposal to vary a debt agreement is given under section 185M; and (b) the applicable deadline has not arrived; and (c) the proposal has not been accepted. (2) Withdrawal of proposal If: (a) the Official Receiver becomes aware that the relevant subsection 185M(1B) statement was deficient because it omitted a material particular or because it was incorrect in a material particular; or (b) the Official Receiver becomes aware of a material change in circumstances that: (i) was not foreshadowed in the relevant subsection 185M(1B) statement; and (ii) in the opinion of the Official Receiver, is capable of affecting an affected creditor’s decision whether or not to accept the proposal; the Official Receiver may declare in writing that the proposal is withdrawn. (3) Notification of withdrawal If the Official Receiver makes a declaration under subsection (2), the Official Receiver must give written

notice of the declaration, and the reasons for it, to: (a) the debtor; and (b) affected creditors who are known to the Official Receiver. (4) Review If the Official Receiver decides to make a declaration under subsection (2), the debtor or an affected creditor may apply to the Administrative Appeals Tribunal for review of the decision. [s 185MD insrt Act 44 of 2007 s 3 and Sch 2[48], opn 1 July 2007]

[page 630]

DIVISION 5 — ENDING A DEBT AGREEMENT

[82,865N] End of debt agreement on discharge of obligations under agreement 185N (1) Time of end of debt agreement A debt agreement ends when all the obligations that it created have been discharged, unless the agreement has been terminated earlier under section 185P, 185Q, 185QA or 185R. [subs (1) am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003]

(2) Keeping surplus property that was subject to an agreement When a debt agreement ends under subsection (1), the debtor is entitled to any property that was subject to the debt agreement but that was not required by the agreement to be distributed to creditors. Example: Rhea entered into a debt agreement that required her to sell her boat and car and to pay her creditors $15,000 from the proceeds. The debt agreement ended when she sold her boat and car for $16,000 and paid her creditors $15,000. She may keep the remaining $1,000 received from the sale. (3) Certificate of the end of a debt agreement If a debt agreement ends under subsection (1), the Official Receiver must give the debtor a certificate to that effect. [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) Evidentiary value of certificate The certificate is prima facie evidence

of the facts stated in it. (5) Notification of end of debt agreement If a debt agreement ends under subsection (1), the person who was the administrator of the agreement immediately before it ended must, within 5 working days after the end of the agreement, notify the Official Receiver, in writing, of the end of the agreement. [subs (5) insrt Act 44 of 2007 s 3 and Sch 2[49], opn 1 July 2007]

(6) A notification under subsection (5) must be in the approved form. [subs (6) insrt Act 44 of 2007 s 3 and Sch 2[49], opn 1 July 2007] [s 185N insrt Act 44 of 1996 s 3 and Sch 1]

[82,865NA] Release of debtor from debts 185NA (1) Time and effect of release When a debt agreement ends under subsection 185N(1), the debtor is released from provable debts from which the debtor would have been released if the debtor had been discharged from bankruptcy immediately after the acceptance of the relevant debt agreement proposal for processing was recorded on the National Personal Insolvency Index. Limits on release (2) The release ceases to operate if the debt agreement is declared void by the Court. (3) The release does not: (a) release anyone else from a debt that he or she owes jointly with the debtor; or (b) release a guarantor from the guarantee that the guarantor gave for the debtor’s debt. [s 185NA insrt Act 44 of 2007 s 3 and Sch 2[50], opn 1 July 2007]

[82,865P] Terminating a debt agreement by accepting a proposal 185P Proposing to terminate a debt agreement (1) The debtor (or the debtor’s personal representative if the debtor has died) or a creditor who is bound by a debt agreement may give the Official Receiver a written proposal to terminate the agreement.

[subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[page 631] (1A) The proposal must be in the approved form. [subs (1A) insrt Act 44 of 2007 s 3 and Sch 2[51], opn 1 July 2007]

(1B) A proposal must be accompanied by an explanatory statement in the approved form containing such information as the form requires. [subs (1B) insrt Act 44 of 2007 s 3 and Sch 2[51], opn 1 July 2007]

(1C) The subsection (1B) statement may be set out in the same document as the proposal. [subs (1C) insrt Act 44 of 2007 s 3 and Sch 2[51], opn 1 July 2007]

(2) Processing a proposal to terminate debt agreement The Official Receiver must process the proposal in accordance with section 185PA if the Official Receiver is satisfied that subsections (1A) and (1B) of this section have been complied with. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 44 of 2007 s 3 and Sch 2[52]–[53], opn 1 July 2007]

(3) Termination of the debt agreement when the proposal is accepted The debt agreement is terminated when the proposal is accepted. Note: Section 185PC explains how a proposal is accepted. [subs (3) am Act 44 of 2007 s 3 and Sch 2[54], opn 1 July 2007] [s 185P insrt Act 44 of 1996 s 3 and Sch 1]

[82,865PA] Procedures for dealing with proposals to terminate debt agreements 185PA (1) Processing of proposals by the Official Receiver If the Official Receiver is required by subsection 185P(2) to process a proposal to terminate a debt agreement, the Official Receiver must write to each of the affected creditors who is known to the Official Receiver, asking each affected creditor to indicate whether the proposal should be accepted. Writing to creditors to deal with a proposal (2) When writing to each affected creditor under subsection (1) about a proposal to terminate a debt agreement, the Official Receiver must:

(a) provide the creditor with a copy of: (i) the proposal; and (ii) the relevant subsection 185P(1B) statement; and (b) ask the creditor to give a written statement setting out whether or not the proposal should be accepted; and (c) inform the creditor of the person to whom the statement should be given and of the need to give the statement before the applicable deadline. (3) The paragraph (2)(b) statement must be in the approved form. [s 185PA insrt Act 44 of 2007 s 3 and Sch 2[55], opn 1 July 2007]

[82,865PB] Inspection of creditor’s statement 185PB If an affected creditor gives a paragraph 185PA(2)(b) statement: (a) the debtor; or (b) any other affected creditor; may, without fee and either personally or by an agent: (c) inspect the statement; and (d) obtain a copy of, or make extracts from, the statement. [s 185PB insrt Act 44 of 2007 s 3 and Sch 2[55], opn 1 July 2007]

[page 632]

[82,865PC] Acceptance of a proposal to terminate a debt agreement 185PC (1) Acceptance in writing A proposal to terminate a debt agreement is accepted if: (a) the Official Receiver writes to affected creditors of a debtor under section 185PA; and (b) a majority in value of the creditors who reply before the applicable deadline state that the proposal should be accepted. (2) Timing of acceptance A proposal that is accepted under subsection (1) is taken to be accepted at the applicable deadline.

Value of a creditor (3) In assessing, for the purposes of paragraph (1)(b), the value of a creditor who is a related entity of the debtor, any debt that was assigned to the creditor is taken to have a value equal to the value of the consideration that the creditor gave for the assignment. (4) For the purposes of paragraph (1)(b), the value of a creditor is to be assessed as at the time when the acceptance of the relevant debt agreement proposal for processing was recorded on the National Personal Insolvency Index. (5) For the purposes of paragraph (1)(b), a secured creditor is taken to be a creditor only to the extent (if any) by which the amount of the debt owing to the creditor exceeds the value of the creditor’s security. [s 185PC insrt Act 44 of 2007 s 3 and Sch 2[55], opn 1 July 2007]

[82,865PD] Withdrawal of proposal to terminate a debt agreement 185PD (1) Scope This section applies if: (a) a proposal to terminate a debt agreement is given under section 185P; and (b) the applicable deadline has not arrived; and (c) the proposal has not been accepted. (2) Withdrawal of proposal If: (a) the Official Receiver becomes aware that the relevant subsection 185P(1B) statement was deficient because it omitted a material particular or because it was incorrect in a material particular; or (b) the Official Receiver becomes aware of a material change in circumstances that: (i) was not foreshadowed in the relevant subsection 185P(1B) statement; and (ii) in the opinion of the Official Receiver, is capable of affecting an affected creditor’s decision whether or not to accept the proposal; the Official Receiver may declare in writing that the proposal is withdrawn. (3) Notification of withdrawal If the Official Receiver makes a

declaration under subsection (2), the Official Receiver must give written notice of the declaration, and the reasons for it, to: (a) the debtor; and (b) affected creditors who are known to the Official Receiver. (4) Review If the Official Receiver decides to make a declaration under subsection (2), the debtor or an affected creditor may apply to the Administrative Appeals Tribunal for review of the decision. [s 185PD insrt Act 44 of 2007 s 3 and Sch 2[55], opn 1 July 2007]

[82,865Q] Terminating a debt agreement by order of the Court 185Q (1) Applying for an order Any of the following persons may apply to the Court for an order terminating a debt agreement: (a) the debtor (or the debtor’s personal representative if the debtor has died); [page 633] (b) a creditor of the debtor; (c) the Official Receiver. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) Simultaneous application for a sequestration order A creditor may include an application for a sequestration order in an application for an order terminating a debt agreement. (3) Effect of applying for a sequestration order For the purposes of this Act, making an application for a sequestration order under subsection (2) is taken to be presenting a creditor’s petition against the debtor, but subsection 43(1), sections 44 and 47, subsections 52(1) and (2) and Part XIA do not apply in relation to the application. (4) Prerequisites for making an order terminating a debt agreement The Court may make an order terminating a debt agreement if it is satisfied: (a) that the debtor (or the debtor’s personal representative if the debtor has died) has failed to carry out a term of the agreement and that it

is in the creditors’ interest to terminate the agreement; or (b) that carrying out the agreement would cause injustice or undue delay to the creditors or the debtor (or the debtor’s estate if the debtor has died); or (c) that for any other reason the agreement should be terminated and that it is in the creditors’ interest to do so. (5) Sequestration order If the Court makes an order terminating a debt agreement, the Court may also make a sequestration order if a creditor applied for the sequestration order. [s 185Q insrt Act 44 of 1996 s 3 and Sch 1] SECTION 185Q GENERALLY [82,865Q.5] Procedure See FCR O 77 rr 49, 51 and 52. Notice of application to the court must be given to creditors in Form 156 at least five days before hearing.

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[82,865QA] Terminating a debt agreement — designated 6-month arrears default 185QA (1) If: (a) the administrator of a debt agreement notifies the Official Receiver that a designated 6-month arrears default by the debtor has occurred; and (b) the Official Receiver is satisfied that the designated 6-month arrears default has occurred; the Official Receiver must: (c) declare in writing that the agreement is terminated; and (d) record the declaration on the National Personal Insolvency Index. (2) The debt agreement is terminated when the declaration is recorded on the National Personal Insolvency Index. [s 185QA subst Act 44 of 2007 s 3 and Sch 2[56], opn 1 July 2007] SECTION 185QA GENERALLY [82,865QA.1] Purpose This section reproduces the purpose apparent in the note to s 153(2), which states: “A discharged bankrupt remains liable under any pecuniary penalty order because such liabilities are not provable in bankruptcy, see subsection 82(3A).”

____________________

[page 634]

[82,865R] Terminating a debt agreement by the bankruptcy of the debtor 185R A debt agreement is terminated if the debtor becomes a bankrupt. Note: Despite section 185K, there are a number of ways in which a debtor who is a party to a debt agreement could become bankrupt. For example, the debtor could become bankrupt on a debtor’s petition if the Court gave permission for the debtor to present, or join in presenting, the petition, or the debtor could become bankrupt as a result of the presentation of a petition against a partnership. [s 185R insrt Act 44 of 1996 s 3 and Sch 1]

[82,865S] Validity of things done under a debt agreement that was terminated 185S If a debt agreement is terminated under section 185P, 185Q, 185QA or 185R, anything that was done in good faith under the agreement by a person before the person had notice of the termination: (a) is valid; and (b) cannot be voided by a trustee under section 120, 121 or 122 (whether applying of its own force or under subsection 188A(4)). [s 185S insrt Act 44 of 1996 s 3 and Sch 1; am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 44 of 2007 s 3 and Sch 2[57], opn 1 July 2007]

DIVISION 6 — VOIDING A DEBT AGREEMENT

[82,865T] Applying for an order declaring a debt agreement void 185T (1) Persons who may apply for an order The debtor (or the debtor’s personal representative if the debtor has died), a creditor or the Official Receiver may apply to the Court for an order declaring that all, or a specified part, of a debt agreement is void. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) Grounds for applying for an order A person mentioned in subsection

(1) may apply for an order only if: (a) there is doubt on a specific ground that all or part of the debt agreement was not made in accordance with this Part or does not comply with this Part; or (b) the statement of affairs lodged with the debt agreement was deficient because it omitted a material particular or because it was incorrect in a material particular. (3) Time limit on applying for an order A person cannot apply for an order declaring a debt agreement void after all the obligations created by the agreement have been discharged. (4) Simultaneous application for a sequestration order A creditor may include an application for a sequestration order in an application for an order declaring all or part of a debt agreement void. (5) Effect of applying for a sequestration order For the purposes of this Act, making an application for a sequestration order under subsection (4) is taken to be presenting a creditor’s petition against the debtor, but subsection 43(1), sections 44 and 47, subsections 52(1) and (2) and Part XIA do not apply in relation to the application. [s 185T insrt Act 44 of 1996 s 3 and Sch 1]

[page 635] SECTION 185T GENERALLY [82,865T.5] Procedure See FCR O 77, rr 50, 51, 52. Notice of application to the court must be given to creditors in Form 156 at least five days before the hearing. [82,865T.10] Application See [81,650.2.1].

____________________

[82,865U] Making an order declaring a debt agreement void 185U (1) Power to make order On an application under section 185T, the Court may make an order declaring a debt agreement void.

(2) Limit on declaring debt agreement void on grounds of noncompliance with this Part The Court must not declare all or part of a debt agreement void on the ground that it does not comply with this Part if the agreement or part of the agreement complies substantially with this Part. (3) Declaring a debt agreement void on grounds of deficient statement of affairs The Court must not declare all or part of a debt agreement void on the ground that the statement of affairs lodged with the debt agreement was deficient, unless the Court is satisfied that it is in the creditors’ interests to declare the agreement or part of the agreement void. (4) Sequestration order If the Court makes an order declaring all of a debt agreement void, the Court may also make a sequestration order if a creditor applied for the sequestration order. Ancillary orders (5) If the Court makes an order declaring all or part of a debt agreement void, the Court may make such other orders as the Court thinks fit. [subs (5) insrt Act 44 of 2007 s 3 and Sch 2[58], opn 1 July 2007]

(6) An order under subsection (5) may be an order directing a person to pay another person compensation of such amount as is specified in the order. This subsection does not limit subsection (5). [subs (6) insrt Act 44 of 2007 s 3 and Sch 2[58], opn 1 July 2007] [s 185U insrt Act 44 of 1996 s 3 and Sch 1] SECTION 185U GENERALLY [82,865U.5] General Turtle Productions Pty Ltd v Hawa [2011] FMCA 460; BC201104442 provides an example of the use of this section. The court was satisfied that the debt agreement was not made in accordance with s 185 of the Bankruptcy Act, on the ground that the agreement was not for the specified sum — that the secured debt was not above the threshold amount of $92,037.40 (in compliance with the Indexed Amounts published by Insolvency and Trustee Service Australia). The court said at [18] that the Notice to Creditors (Form 156) indicates that an application for a sequestration order would be sought at a hearing listed at 9.45am on Tuesday 14 June 2011. This satisfies the requirement that the notice must be given at least five days before the hearing.

____________________

[82,865V] Validity of things done under a debt agreement that was declared void 185V If a debt agreement is declared void, anything that was done in good faith under the agreement by a person before the person had notice of the

declaration: (a) is valid; and (b) cannot be voided by a trustee under section 120, 121 or 122 (whether applying of its own force or under subsection 231(2)). [s 185V insrt Act 44 of 1996 s 3 and Sch 1; am Act 44 of 2007 s 3 and Sch 2[59], opn 1 July 2007]

[page 636]

DIVISION 7 — GENERAL PROVISIONS RELATING TO DEBT AGREEMENTS [Div 7 am Act 44 of 2007 s 3 and Sch 1[18], opn 11 Apr 2007]

[82,865W] Court directions to the Official Receiver 185W (1) Any of the following persons may apply to the Court for an order directing the Official Receiver or another person how to exercise the Official Receiver’s powers under this Part: (a) a debtor who is a party to a debt agreement (or the debtor’s personal representative if the debtor has died); (b) a creditor who is a party to a debt agreement; (c) the Official Receiver. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) On an application under subsection (1), the Court may make an order directing the Official Receiver or another person how to exercise the Official Receiver’s powers under this Part. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 44 of 2007 s 3 and Sch 2[60], opn 1 July 2007] [s 185W insrt Act 44 of 1996 s 3 and Sch 1]

[82,865X] No stamp duty payable on a debt agreement 185X Stamp duty under a State or Territory law is not payable on a debt agreement or a variation of a debt agreement. [s 185X insrt Act 44 of 1996 s 3 and Sch 1]

[82,865XA] Secured creditors 185XA Nothing in this Division affects the right of a secured creditor to realise or otherwise deal with the creditor’s security. [s 185XA insrt Act 44 of 2007 s 3 and Sch 2[61], opn 1 July 2007]

[82,865Y] Money received by administrator to be held on trust 185Y (1) If the administrator of a debt agreement receives money from the debtor under the agreement, the money is taken to have been received by the administrator on trust to be dealt with in the way specified in the debt agreement. (2) Subsection (1) does not apply to a person if the person is both the debtor under, and the administrator of, the debt agreement. [s 185Y subst Act 44 of 2007 s 3 and Sch 2[62], opn 1 July 2007]

[82,865Z] Remuneration of administrator 185Z (1) The administrator of a debt agreement may be remunerated as provided in the agreement (see subsections 185C(3) and (3A)). (2) Subsection (1) does not apply to the Official Trustee. Note: For the remuneration payable to the Official Trustee, see section 163. [s 185Z subst Act 44 of 2007 s 3 and Sch 2[63], opn 1 July 2007]

[82,865ZA] Notification of death of administrator 185ZA (1) If the administrator in relation to a debt agreement dies, the person (the affected person) administering the estate of the deceased person must, before the end of [page 637] the period of 28 days beginning on the day the affected person started to administer the estate, give written notice of that death to the Official Receiver.

Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (1) am Act 106 of 2010 s 3 and Sch 3[15], opn 15 July 2010; Act 106 of 2010 s 3 and Sch 2[34]– [36], opn 1 Dec 2010]

(2) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [s 185ZA insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[82,865ZB] Official Trustee to replace an administrator who dies etc 185ZB (1) If the administrator of a debt agreement dies, the Official Trustee becomes the replacement administrator of that debt agreement. (2) If: (a) a person who is the administrator of a debt agreement is registered under Division 8; and (b) the person ceases to be so registered; then: (c) the person ceases to be the administrator of that debt agreement; and (d) the Official Trustee becomes the replacement administrator of that debt agreement. (3) If: (a) a person who is the administrator of a debt agreement is a registered trustee; and (b) the person ceases to be a registered trustee; then: (c) the person ceases to be the administrator of that debt agreement; and (d) the Official Trustee becomes the replacement administrator of that debt agreement. (4) If: (a) a person is the administrator of a debt agreement; and (b) under section 186M, the person becomes ineligible to act as the administrator of the debt agreement;

then: (c) the person ceases to be the administrator of that debt agreement; and (d) the Official Trustee becomes the replacement administrator of that debt agreement. (5) If, under section 185ZCB, the Court removes the administrator of a debt agreement from office, the Official Trustee becomes the replacement administrator of that debt agreement. (6) If, under subsection (1), (2), (3), (4) or (5), the Official Trustee becomes the replacement administrator of a debt agreement, the Official Receiver must notify the parties to the debt agreement that: (a) the Official Trustee is the replacement administrator until further notice; and (b) (if applicable) the Official Receiver intends to appoint another person as the new administrator. [s 185ZB subst Act 44 of 2007 s 3 and Sch 2[64], opn 1 July 2007]

[page 638]

[82,865ZC] Official Receiver may appoint a new administrator 185ZC (1) If the parties to a debt agreement have not already varied the agreement to appoint a new administrator, the Official Receiver may appoint another person to be the administrator of the agreement in place of the Official Trustee. [subs (1) am Act 44 of 2007 s 3 and Sch 2[65]–[66], opn 1 July 2007]

(2) An appointment must be in writing. (3) The Official Receiver must give written notice of the appointment to the parties to the debt agreement. (4) The Official Receiver cannot revoke an appointment under subsection (1). (5) This section does not prevent the appointment of another person as administrator by variation of the debt agreement.

[s 185ZC insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

[82,865ZCA] Court may order administrator to make good loss caused by breach of duty 185ZCA (1) This section applies if, on application by: (a) the Inspector-General; or (b) a creditor who is or has been a party to a debt agreement; the Court is satisfied that a person who is or has been an administrator of the debt agreement has committed a breach of duty in relation to the debt agreement. (2) The Court may make any one or more of the following orders: (a) an order directing the person to make good any loss that a creditor has sustained because of the person’s breach of duty; (b) if the person is a registered debt agreement administrator — an order directing the Inspector-General to cancel the person’s registration as a debt agreement administrator; (c) any other order that the Court considers just and equitable in the circumstances. [s 185ZCA insrt Act 44 of 2007 s 3 and Sch 2[67], opn 1 July 2007]

[82,865ZCB] Control of administrators by the Court 185ZCB If a debt agreement is in force, the Court may, on the application of: (a) the Inspector-General; or (b) the debtor; or (c) a creditor; inquire into the conduct of the administrator, and may do either or both of the following: (d) remove the administrator from office; (e) make such order as it thinks proper. [s 185ZCB insrt Act 44 of 2007 s 3 and Sch 2[67], opn 1 July 2007]

[82,865ZD] Remuneration of administrator 185ZD A person who becomes the administrator in relation to a debt agreement under section 185ZC is entitled to so much of the remuneration (if any) provided for in the agreement as has not already been paid to the previous administrator, or any of the previous administrators. [s 185ZD insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; am Act 44 of 2007 s 3 and Sch 2[68]– [69], opn 1 July 2007]

[page 639]

DIVISION 8 — REGISTRATION OF DEBT AGREEMENT ADMINISTRATORS ETC [Div 8 insrt Act 44 of 2007 s 3 and Sch 1[19], opn 11 Apr 2007]

Subdivision A — Introduction

[82,885A] Basic eligibility test 186A Individuals (1) For the purposes of this Division, an individual passes the basic eligibility test at a particular time (the test time) unless: (a) at any time during the 10-year period ending at the test time, the individual was: (i) an insolvent under administration; or (ii) a party (as a debtor) to a debt agreement; or (b) at any time during the 10-year period ending at the test time, the individual was convicted of an offence involving fraud or dishonesty; or (c) at the test time, the individual is disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001; or (d) at any time during the 10-year period ending at the test time, the individual’s registration as a liquidator was cancelled under subsection 1292(2) or (3) of the Corporations Act 2001; or

at any time during the 10-year period ending at the test time, the (e) individual’s registration as a trustee ceased under section 155I for a reason specified in paragraph 155H(1)(a), (aa), (b), (e), (f), (fa) or (g); or (f) at any time during the 10-year period ending at the test time, the individual’s registration as a debt agreement administrator was cancelled under section 186K on the ground that: (i) the individual contravened a condition that applied in relation to that registration; or (ii) the individual failed to properly carry out the duties of an administrator in relation to a debt agreement; or (g) at any time during the 10-year period ending at the test time, the individual’s registration as a debt agreement administrator was cancelled as a result of an order under section 185ZCA; or (h) at any time during the 10-year period ending at the test time, a declaration was made under section 186M in relation to the individual; or (i) at any time during the 10-year period ending at the test time, a determination in relation to the individual was made under subregulation 9.06(3) of the Bankruptcy Regulations 1996 as in force before the commencement of this section. (2) Subparagraph (1)(a)(i) does not apply in relation to a bankruptcy that has been annulled under section 153B. Companies (3) For the purposes of this Division, a company passes the basic eligibility test at a particular time (the test time) unless: (a) at any time during the 10-year period ending at the test time, the company was an externally-administered body corporate; or (b) at any time during the 10-year period ending at the test time, the company was convicted of an offence involving fraud or dishonesty; or [page 640]

(c) at any time during the 10-year period ending at the test time, the company’s registration as a debt agreement administrator was cancelled under section 186L on the ground that: (i) the company contravened a condition that applied in relation to that registration; or (ii) the company failed to properly carry out the duties of an administrator in relation to a debt agreement; or (d) at any time during the 10-year period ending at the test time, the company’s registration as a debt agreement administrator was cancelled as a result of an order under section 185ZCA; or (e) at any time during the 10-year period ending at the test time, a declaration was made under section 186M in relation to the company; or (f) at the test time, a director of the company does not pass the basic eligibility test; or (g) at any time during the 10-year period ending at the test time, a determination in relation to the company was made under subregulation 9.06(3) of the Bankruptcy Regulations 1996 as in force before the commencement of this section.

Subdivision B — Registration of debt agreement administrators

[82,885B] Application for registration as a debt agreement administrator 186B (1) An individual or company may apply to the Inspector-General to be registered as a debt agreement administrator. (2) The application must: (a) be in the approved form; and (b) be accompanied by such information and documents (if any) as are specified in the regulations; and (c) if the application is not by way of renewal — be accompanied by the fee determined by the Minister by legislative instrument; and (d) if the application is by way of renewal — be made before the expiry of the applicant’s existing registration as a debt agreement

administrator.

[82,885C] Inspector-General must approve or refuse to approve registration application *186C (1) After considering an application made under section 186B, the Inspector-General must, within 60 days of receiving the application: (a) approve the application; or (b) refuse to approve the application. Approval of application made by an individual (2) If: (a) the applicant is an individual; and (b) the application is not by way of renewal; [page 641] the Inspector-General must approve the application if the Inspector-General is satisfied that the applicant: (c) passes the basic eligibility test; and (d) has the ability (including the knowledge) to satisfactorily perform the duties of an administrator in relation to debt agreements; and (e) has such qualifications and experience (if any) as are prescribed by the regulations. Otherwise the Inspector-General must refuse to approve the application. (3) If: (a) the applicant is an individual; and (b) the application is by way of renewal; the Inspector-General must approve the application. Approval of application made by a company (4) If: (a) the applicant is a company; and (b) the application is not by way of renewal;

the Inspector-General must approve the application if the Inspector-General is satisfied that the applicant: (c) passes the basic eligibility test; and (d) has the ability to satisfactorily perform the duties of an administrator in relation to debt agreements. Otherwise the Inspector-General must refuse to approve the application. (5) If: (a) the applicant is a company; and (b) the application is by way of renewal; the Inspector-General must approve the application. Guidelines (6) In deciding whether to approve an application made under section 186B, the Inspector-General must have regard to any relevant guidelines in force under section 186Q. Notice of decision (7) If the Inspector-General refuses to approve an application made under section 186B, the Inspector-General must give the applicant a written notice of the refusal, and the reasons for it. Review (8) If the Inspector-General decides to refuse to approve an application made under section 186B, the applicant may apply to the Administrative Appeals Tribunal for review of the decision. Conditions of registration (9) If the Inspector-General approves an application under section 186B, the Inspector-General may decide that, if the applicant is registered as a debt agreement administrator under section 186D, the applicant’s registration as a debt agreement administrator is subject to specified conditions. (10) If the Inspector-General makes a decision under subsection (9), the Inspector-General must give the applicant a written notice of the decision and the reasons for it. (11) If the Inspector-General makes a decision under subsection (9), the applicant may apply to the Administrative Appeals Tribunal for review of the decision.

[page 642] (12) In subsection (11): decision has the same meaning as in the Administrative Appeals Tribunal Act 1975. *Editor’s Note: Schedule 1[23] of the Bankruptcy Legislation Amendment (Debt Agreement) Act 2007 provides as follows: [23] Before 1 July 2007, paragraphs 186C(2)(d) and (4)(d), 186K(3)(a) and 186L(3)(a) of the Bankruptcy Act 1966 have effect as if the amendments made by Schedule 2 to this Act, to the extent to which they relate to a duty of an administrator in relation to a debt agreement, had commenced at the same time as this item commences.

[82,885D] Registration as a debt agreement administrator 186D (1) This section applies if: (a) the Inspector-General approves an application under section 186C; and (b) the applicant has paid the fee determined by the Minister by legislative instrument. (2) The Inspector-General must register the applicant as a debt agreement administrator by entering on the National Personal Insolvency Index the details relating to the applicant that are prescribed by the regulations. (3) After registering the applicant as a debt agreement administrator, the Inspector-General must give the applicant a certificate of registration.

[82,885E] Duration of registration as a debt agreement administrator 186E Subject to this Division and section 185ZCA, if a person is registered under section 186D as a debt agreement administrator, the registration remains in force for: (a) if the registration is not by way of renewal — 3 years beginning when the person’s details are entered on the National Personal Insolvency Index; or

if the registration is by way of renewal — 3 years beginning (b) immediately after the person’s existing registration as a debt agreement administrator expires. [s 186E am Act 44 of 2007 s 3 and Sch 2[70], opn 1 July 2007]

[82,885F] Conditions of registration — general 186F (1) This section applies to a person if the person is a registered debt agreement administrator. (2) The Inspector-General may, by written notice given to the person, impose specified conditions on the person’s registration as a debt agreement administrator.

[82,885G] Condition of registration — companies 186G (1) This section applies to a company if the company is a registered debt agreement administrator. (2) It is a condition of the company’s registration as a debt agreement administrator that each individual who takes overall responsibility for managing the company’s debt agreement activities must be: (a) a registered debt agreement administrator; or (b) a registered trustee. (3) Subsection (2) does not limit subsection 186C(9) or section 186F.

[82,885H] Application to change or remove registration conditions 186H (1) If there are conditions on a person’s registration as a debt agreement administrator, the person may apply to the Inspector-General for the conditions to be changed or removed. (2) The application must: (a) be in the approved form; and (b) be accompanied by such information and documents (if any) as are specified in the regulations.

[page 643] (3) After considering an application made under subsection (1), the Inspector-General must: (a) decide that the conditions on the applicant’s registration as a debt agreement administrator should not be changed or removed; or (b) decide that specified modifications should be made to the conditions imposed on the applicant’s registration as a debt agreement administrator. Note: See the definition of modifications in subsection 5(1).

Notice of decision (4) If the Inspector-General decides that the conditions on the applicant’s registration as a debt agreement administrator should not be changed or removed, the Inspector-General must give the applicant a written notice of the decision, and the reasons for it. (5) If the Inspector-General decides that specified modifications should be made to the conditions imposed on the applicant’s registration as a debt agreement administrator, the Inspector-General must give the applicant a written notice of the decision, and the reasons for it. Review (6) The applicant may apply to the Administrative Appeals Tribunal for review of a decision of the Inspector-General made under this section. (7) In subsection (6): decision has the same meaning as in the Administrative Appeals Tribunal Act 1975.

Subdivision C — Surrender and cancellation of registration as a debt agreement administrator

[82,885J] Surrender of registration as a debt agreement administrator 186J (1) This section applies to a person if the person is a registered debt agreement administrator.

(2) The person may, by written notice given to the Inspector-General, request the Inspector-General to accept the surrender of the person’s registration as a debt agreement administrator. (3) A request under subsection (2) must be in the approved form. (4) The person ceases to be registered as a debt agreement administrator when the Inspector-General accepts the request. (5) If the Inspector-General accepts a request given under subsection (2), the Inspector-General must remove the person’s registration details from the National Personal Insolvency Index.

[82,885K] Cancellation of an individual’s registration as a debt agreement administrator *186K Scope (1) This section applies in relation to an individual if the individual is a registered debt agreement administrator. [page 644] Individual no longer passes the basic eligibility test (2) The Inspector-General must cancel the individual’s registration as a debt agreement administrator if the Inspector-General is satisfied that the individual no longer passes the basic eligibility test. Other grounds for cancellation of registration (3) The Inspector-General may ask the individual to give the InspectorGeneral a written explanation why the individual should continue to be registered as a debt agreement administrator, if the Inspector-General has reasonable grounds to believe that: (a) the individual no longer has the ability (including the knowledge) to satisfactorily perform the duties of an administrator in relation to a debt agreement; or (b) the individual has failed to properly carry out the duties of an administrator in relation to a debt agreement; or (c) the individual no longer has the qualifications or experience

prescribed by regulations made for the purposes of paragraph 186C(2)(e); or (d) the individual has contravened a condition of the individual’s registration. (4) If: (a) the Inspector-General does not receive an explanation within 28 days of requesting it; or (b) receives an explanation, but is not satisfied with it; the Inspector-General may cancel the individual’s registration as a debt agreement administrator. Notice of cancellation (5) If the Inspector-General cancels, under subsection (2) or (4), an individual’s registration as a debt agreement administrator, the InspectorGeneral must give the individual written notice of the cancellation, and the reasons for it. Removal of registration details (6) If the Inspector-General cancels, under subsection (2) or (4), an individual’s registration as a debt agreement administrator, the InspectorGeneral must remove the individual’s registration details from the National Personal Insolvency Index. Guidelines (7) In deciding whether to cancel, under subsection (2) or (4), an individual’s registration as a debt agreement administrator, the InspectorGeneral must have regard to any relevant guidelines in force under section 186Q. Review (8) If the Inspector-General decides to cancel, under subsection (2) or (4), an individual’s registration as a debt agreement administrator, the individual may apply to the Administrative Appeals Tribunal for review of the decision. *Editor’s Note: Schedule 1[23] of the Bankruptcy Legislation Amendment (Debt Agreement) Act 2007 provides as follows: [23] Before 1 July 2007, paragraphs 186C(2)(d) and (4)(d), 186K(3)(a) and 186L(3)(a) of the Bankruptcy Act 1966 have effect as if the amendments made by Schedule 2 to this Act, to the extent to which they relate to a duty of an administrator in relation to a debt agreement, had commenced at the same time as this item commences.

[82,885L] Cancellation of a company’s registration as a debt agreement administrator *186L Scope (1) This section applies in relation to a company if the company is a registered debt agreement administrator. [page 645] Company no longer passes the basic eligibility test (2) The Inspector-General must cancel the company’s registration as a debt agreement administrator if the Inspector-General is satisfied that the company no longer passes the basic eligibility test. Other grounds for cancellation of registration (3) The Inspector-General may ask the company to give the InspectorGeneral a written explanation why the company should continue to be registered as a debt agreement administrator, if the Inspector-General has reasonable grounds to believe that: (a) the company no longer has the ability to satisfactorily perform the duties of an administrator in relation to a debt agreement; or (b) the company has failed to properly carry out the duties of an administrator in relation to a debt agreement; or (c) the company has contravened a condition of the company’s registration. (4) If: (a) the Inspector-General does not receive an explanation within 28 days of requesting it; or (b) receives an explanation, but is not satisfied with it; the Inspector-General may cancel the company’s registration as a debt agreement administrator. Notice of cancellation (5) If the Inspector-General cancels, under subsection (2) or (4), a company’s registration as a debt agreement administrator, the Inspector-

General must give the company written notice of the cancellation, and the reasons for it. Removal of registration details (6) If the Inspector-General cancels, under subsection (2) or (4), a company’s registration as a debt agreement administrator, the InspectorGeneral must remove the company’s registration details from the National Personal Insolvency Index. Guidelines (7) In deciding whether to cancel, under subsection (2) or (4), a company’s registration as a debt agreement administrator, the Inspector-General must have regard to any relevant guidelines in force under section 186Q. Review (8) If the Inspector-General decides to cancel, under subsection (2) or (4), a company’s registration as a debt agreement administrator, the company may apply to the Administrative Appeals Tribunal for review of the decision. *Editor’s Note: Schedule 1[23] of the Bankruptcy Legislation Amendment (Debt Agreement) Act 2007 provides as follows: [23] Before 1 July 2007, paragraphs 186C(2)(d) and (4)(d), 186K(3)(a) and 186L(3)(a) of the Bankruptcy Act 1966 have effect as if the amendments made by Schedule 2 to this Act, to the extent to which they relate to a duty of an administrator in relation to a debt agreement, had commenced at the same time as this item commences.

[82,885LA] Inspector-General may obtain information about debt agreement administration trust accounts 186LA (1) Scope This section applies to a bank if: (a) the Inspector-General believes on reasonable grounds that: (i) a person who is or was an administrator of a debt agreement holds or held an account with the bank; and (ii) the account was kept, or purportedly kept, in compliance with subsection 185LD(1); and [page 646]

(b) the Inspector-General has asked the person: (i) under subsection 186K(3) or 186L(3), to give the InspectorGeneral a written explanation why the person should continue to be registered as a debt agreement administrator; or (ii) under subsection 155H(1), to give the Inspector-General a written explanation why the person should continue to be registered as a trustee; and (c) if subparagraph (b)(ii) applies — the Inspector-General asked for the explanation on the basis of paragraph 155H(1)(fa). (2) Requirement The Inspector-General may, by written notice given to the bank, require the bank to give to the Inspector-General, within the period and in the manner specified in the notice, such information about the account as is specified in the notice. (3) Offence A person commits an offence if: (a) the person has been given a notice under subsection (2); and (b) the person omits to do an act; and (c) the omission contravenes a requirement in the notice. Penalty for contravention of this subsection: 60 penalty units. [s 186LA insrt Act 44 of 2007 s 3 and Sch 2[71], opn 1 July 2007]

[82,885LB] Account-freezing notices — debt agreement administration trust accounts 186LB (1) Scope This section applies to a bank if: (a) the Inspector-General believes on reasonable grounds that: (i) a person who is or was an administrator of a debt agreement holds or held an account with the bank; and (ii) the account was kept, or purportedly kept, in compliance with subsection 185LD(1); and (b) at a particular time (the show cause time), the Inspector-General asked the person: (i) under subsection 186K(3) or 186L(3), to give the InspectorGeneral a written explanation why the person should continue to be registered as a debt agreement administrator; or

under subsection 155H(1), to give the Inspector-General a (ii) written explanation why the person should continue to be registered as a trustee; and (c) if subparagraph (b)(ii) applies — the Inspector-General asked for the explanation on the basis of paragraph 155H(1)(fa). (2) Giving of freezing notice The Inspector-General may, by written notice (an account-freezing notice) given to the bank within 42 days after the show cause time, direct the bank not to: (a) make a withdrawal from the account; or (b) permit the making of a withdrawal from the account; except: (c) in accordance with the written consent of the Inspector-General; or (d) to recover from the account-holder an amount equal to an amount of tax (however described) that the bank has paid or is liable to pay in connection to the operation of the account; or (e) to discharge a liability of the account-holder to pay a fee or charge in relation to the operation of the account; or (f) in such circumstances (if any) as are specified in the regulations. [page 647] (3) Duration of freezing notice An account-freezing notice given to a bank: (a) comes into force when the notice is given to the bank; and (b) remains in force for: (i) 42 days after the show cause time; or (ii) if a shorter period is specified in the notice — that shorter period. (4) Extension of 42-day period The Court may, on application by the Inspector-General, extend, or further extend, the 42-day period referred to in subsection (2) or subparagraph (3)(b)(i). (5) Revocation of freezing notice If an account-freezing notice is in force in relation to a bank, the Inspector-General may, by written notice given to

the bank, revoke the account-freezing notice. (6) Copy of account-freezing notice to be given to account-holder etc If the Inspector-General gives or revokes an account-freezing notice that relates to an account, the Inspector-General must give a copy of the account-freezing notice or the revocation notice, as the case may be, to the holder of the account. (7) A failure to comply with subsection (6) does not affect the validity of the account-freezing notice or the revocation notice, as the case may be. (8) Consent of Inspector-General A consent under paragraph (2)(c) may be: (a) unconditional; or (b) subject to such conditions (if any) as are specified in the notice of consent. (9) If the Inspector-General decides to refuse to give a consent under paragraph (2)(c), an application may be made to the Administrative Appeals Tribunal for review of the decision. [s 186LB insrt Act 44 of 2007 s 3 and Sch 2[71], opn 1 July 2007]

[82,885LC] Power of court to set aside accountfreezing notices 186LC (1) If the Court, on application by: (a) a bank to whom an account-freezing notice has been given; or (b) the account-holder whose account is affected by an accountfreezing notice; or (c) any other interested person; is satisfied that the Inspector-General was not authorised to give the notice, the Court may make an order setting aside the notice. (2) An account-freezing notice that is set aside is taken not to have been given. [s 186LC insrt Act 44 of 2007 s 3 and Sch 2[71], opn 1 July 2007]

[82,885LD] Judicial enforcement of accountfreezing notices

186LD (1) If the Court is satisfied that a bank has breached, or is proposing to breach, an account-freezing notice, the Court may, on application of the Inspector-General, make any or all of the following orders: (a) an order directing the bank to comply with that notice; (b) any other order that the Court thinks appropriate. (2) The Court may discharge or vary an order granted under this section. [s 186LD insrt Act 44 of 2007 s 3 and Sch 2[71], opn 1 July 2007]

[82,885LE] Protection of bank 186LE No criminal or civil proceedings lie against a bank because of anything done (or not done) by the bank in good faith: (a) in compliance with an account-freezing notice; or (b) in connection with, or incidental to, the bank’s compliance with an account-freezing notice. [s 186LE insrt Act 44 of 2007 s 3 and Sch 2[71], opn 1 July 2007]

[page 648]

Subdivision D — Ineligibility of a person to act as a debt agreement administrator

[82,885M] Inspector-General may declare a person ineligible to act as an administrator 186M (1) This section applies to a person if: (a) the person is or was the administrator of a debt agreement; and (b) the person is not: (i) a registered debt agreement administrator; or (ii) a registered trustee. (2) The Inspector-General may ask the person to give the InspectorGeneral a written explanation why the person should continue to be eligible to act as an administrator of debt agreements, if the Inspector-General has reasonable grounds to believe that the person has failed to properly carry out

the duties of an administrator in relation to the debt agreement. (3) If: (a) the Inspector-General does not receive an explanation within 28 days of requesting it; or (b) receives an explanation, but is not satisfied with it; the Inspector-General may declare that the person is ineligible, for a period of 3 years, to act as an administrator of debt agreements. (4) If the Inspector-General makes a declaration under subsection (3), the Inspector-General must give the person written notice of the declaration, and the reasons for it. Guidelines (5) In deciding whether to make a declaration under subsection (3), the Inspector-General must have regard to any relevant guidelines in force under section 186Q. Review (6) If the Inspector-General decides to make a declaration under subsection (3) in relation to a person, the person may apply to the Administrative Appeals Tribunal for review of the decision.

Subdivision E — Miscellaneous

[82,885N] Return of certificate of registration 186N (1) Surrender of registration as a debt agreement administrator A person commits an offence if: (a) the person has been given a certificate of registration under subsection 186D(3); and (b) the person gives a notice under subsection 186J(2) surrendering the person’s registration as a debt agreement administrator; and (c) the person does not return the certificate of registration to the Inspector-General before the end of the period of 7 days beginning on the day the Inspector-General accepts the notice. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (1) am Act 106 of 2010 s 3 and Sch 2[37] and [38], opn 1 Dec 2010]

[page 649] (2) Subsection (1) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).

(3) Cancellation of an individual’s registration as a debt agreement adminstrator An individual commits an offence if: (a) the individual has been given a certificate of registration under subsection 186D(3); and (b) the individual’s registration as a debt agreement administrator is cancelled under section 186K; and (c) the individual does not return the certificate of registration to the Inspector-General before the end of the period of 7 days beginning on the day the individual is given a notice under subsection 186K(5) in relation to the cancellation. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (3) am Act 106 of 2010 s 3 and Sch 2[39] and [40], opn 1 Dec 2010]

(4) Subsection (3) does not apply if the individual has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

(5) Cancellation of a company’s registration as a debt agreement administrator A company commits an offence if: (a) the company has been given a certificate of registration under subsection 186D(3); and (b) the company’s registration as a debt agreement administrator is cancelled under section 186L; and (c) the company does not return the certificate of registration to the Inspector-General before the end of the period of 7 days beginning on the day the company is given a notice under subsection 186L(5) in relation to the cancellation. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (5) am Act 106 of 2010 s 3 and Sch 2[41] and [42], opn 1 Dec 2010]

(6) Subsection (5) does not apply if the company has a reasonable excuse.

Note: A defendant bears an evidential burden in relation to the matter in subsection (6) (see subsection 13.3(3) of the Criminal Code).

Cancellation by court order of registration as a debt agreement administrator (6A) A person commits an offence if: (a) the person has been given a certificate of registration under subsection 186D(3); and (b) the person’s registration as a debt agreement administrator is cancelled as a result of an order under section 185ZCA; and (c) the person does not return the certificate of registration to the Inspector-General before the end of the period of 7 days beginning on the day of the cancellation. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (6A) insrt Act 44 of 2007 s 3 and Sch 2[72], opn 1 July 2007; am Act 106 of 2010 s 3 and Sch 2[43] and [44], opn 1 Dec 2010]

[page 650] (6B) Subsection (6A) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (6A) (see subsection 13.3(3) of the Criminal Code). [subs (6B) insrt Act 44 of 2007 s 3 and Sch 2[72], opn 1 July 2007]

(7) Strict liability Subsections (1), (3), (5) and (6A) are offences of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (7) am Act 44 of 2007 s 3 and Sch 2[73], opn 1 July 2007]

[82,885P] Cessation of registration as a debt agreement administrator — no refund of fees 186P (1) This section applies if a person ceases to be registered as a debt agreement administrator. (2) The person is not entitled to a refund of all or part of a fee paid by the person in relation to the person’s registration as a debt agreement administrator.

[82,885Q] Guidelines relating to InspectorGeneral’s powers 186Q The Inspector-General may, by legislative instrument, formulate guidelines for the purposes of the following provisions: (a) subsection 186C(6); (b) subsection 186K(7); (c) subsection 186L(7); (d) subsection 186M(5). Note: For consultation requirements, see Part 3 of the Legislative Instruments Act 2003.

PART X — PERSONAL INSOLVENCY AGREEMENTS [Pt X am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

DIVISION 1 — INTERPRETATION

[83,020] Interpretation *187 (1) In this Part, unless the contrary intention appears: composition [def rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

controlling trustee, in relation to a debtor whose property is subject to control under Division 2, means the person who is the controlling trustee under section 188 or 192. [def insrt Act 44 of 1996 s 3 and Sch 1]

debtor means a person who is insolvent. deed of arrangement [def rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

deed of assignment [def rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 651] divisible property, in relation to a personal insolvency agreement

executed by a debtor, means the property, other than property that was acquired by, or devolved on, the debtor on or after the day on which he or she executed the agreement, that would be divisible amongst his or her creditors under Part VI if he or she had become a bankrupt on that day. [def insrt Act 44 of 1996 s 3 and Sch 2; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

the controlling trustee [def rep Act 44 of 1996 s 3 and Sch 1]

the Registrar [def rep Act 44 of 1996 s 3 and Sch 1] [subs (1) am Act 122 of 1970 s 9; Act 12 of 1980 s 100; Act 44 of 1996 s 3 and Schs 1, 2]

(1A) Without limiting the definition of debtor in subsection (1), a reference in this Part to a debtor shall, unless the contrary intention appears, be read as including a reference to a person who is for the time being insolvent, even if the person may ultimately cease to be insolvent. [subs (1A) insrt Act 12 of 1980 s 100; am Act 44 of 1996 s 3 and Sch 1]

(2) In this Part, a reference, in relation to a personal insolvency agreement, to a provable debt shall be read as a reference to a debt or liability that would have been a provable debt in the debtor’s bankruptcy if the debtor had become a bankrupt on the day on which he or she executed the personal insolvency agreement. [subs (2) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 187 GENERALLY [83,020.15] “debtor” See the expanded definition in s 187(1A). [83,020.30] “divisible property” A right to recover excess tax may be “divisible property” under s 187(1) capable of assignment, even if the duty of the Federal Commissioner of Taxation to make a refund has not arisen. Whether such a right exists will be determined by reference to the Income Tax Assessment Act 1936 (Cth): see Re Mondin; Ex parte Bradshaw (1985) 6 FCR 430; 60 ALR 439.

____________________ *Editor’s Note: The definition of “controlling trustee” as inserted by Act 44 of 1996 applies in relation to authorities given under s 188 after 16 December 1996. The definition of “controlling trustee” prior to that date can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney 1996 ed at [83,020].

[83,025] Application of Part to joint debtors 187A This Part applies, with the prescribed modifications (if any), in relation to joint debtors, whether partners or not. [s 187A subst Act 119 of 1987 s 61] SECTION 187A GENERALLY [83,025.5] General Modifications to Pt X are prescribed by reg 10.02.

____________________

DIVISION 2 — MEETING OF CREDITORS AND CONTROL OF DEBTOR’S PROPERTY

[83,075] Debtor may authorise trustee or solicitor to be controlling trustee 188 (1) A debtor who desires that his or her affairs be dealt with under this Part without his or her estate being sequestrated and: (a) is personally present or ordinarily resident in Australia; (b) has a dwelling-house or place of business in Australia; [page 652] (c) is carrying on business in Australia, either personally or by means of an agent or manager; or (d) is 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; may sign an authority in accordance with the approved form naming and authorising a registered trustee, a solicitor or the Official Trustee to call a meeting of the debtor’s creditors and to take control of the debtor’s property. (e) [repealed] (f) [repealed]

[subs (1) am Act 12 of 1980 s 102; Act 44 of 1996 s 3 and Schs 1, 2]

(2) An authority signed by a debtor under this section is not effective for the purposes of this Part unless: (a) if the person authorised is a registered trustee or solicitor — the person has consented in writing to exercise the powers given by the authority; and (aa) if the person authorised is the Official Trustee — an Official Receiver has given the debtor written approval to name the Official Trustee in the authority. (b) [repealed] (c) [repealed] [subs (2) am Act 119 of 1987 s 62; Act 44 of 1996 s 3 and Sch 1; Act 34 of 2006 s 3 and Sch 4[11], [12], opn 3 May 2006]

(2AA) If the person authorised is a registered trustee or a solicitor, then, before the person consents to exercise the powers given by the authority, the person must give the debtor the information prescribed by the regulations. [subs (2AA) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2AB) If the person authorised is the Official Trustee, then, before the Official Receiver gives approval to name the Official Trustee in the authority, the Official Receiver must give the debtor the information prescribed by the regulations. [subs (2AB) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2A) The regulations may prescribe the circumstances in which a person (other than the Official Trustee or a registered trustee) is ineligible to act as a controlling trustee under this Part. [subs (2A) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2B) An authority signed by a debtor under this section is not effective for the purposes of this Part if, at the time the authority is signed, the person authorised: (a) is not the Official Trustee or a registered trustee; and (b) is ineligible, under the regulations, to act as a controlling trustee under this Part. [subs (2B) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2C) If the person authorised is a registered trustee or solicitor, the authority signed by the debtor under this section is not effective for the purposes of this Part unless, before the person authorised consents to exercise

the powers given by the authority, the debtor gives to the person authorised: (a) a statement of the debtor’s affairs; and (c) a proposal for dealing with them under this Part. Note: Section 6A sets out requirements for statements of affairs. [subs (2C) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2D) If the person authorised is the Official Trustee, the authority signed by the debtor under this section is not effective for the purposes of this Part unless, before an Official Receiver gives approval to name the Official Trustee in the authority, the debtor gives to the Official Receiver: (a) a statement of the debtor’s affairs; and (b) a proposal for dealing with them under this Part. Note: Section 6A sets out requirements for statements of affairs. [subs (2D) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 653] (2E) A proposal for dealing with the debtor’s affairs under this Part must include a draft personal insolvency agreement. Note: Section 188A sets out requirements for personal insolvency agreements. [subs (2E) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(3) An authority under this section that is effective for the purposes of this Part is not revocable by the debtor. (4) Subject to subsection 192(1), a debtor cannot give an authority within 6 months of giving another authority, unless the Court grants leave to do so. [subs (4) subst Act 44 of 1996 s 3 and Sch 1]

(5) A registered trustee or solicitor who consents to exercise the powers given by an authority must, within 2 working days of consenting, give a copy of: (a) the authority; and (b) the debtor’s statement of affairs; to the Official Receiver. [subs (5) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; am Act 106 of 2010 s 3 and Sch 3[16], opn 15 July 2010]

(5A) For the purposes of subsection (5), a working day is a day that is not a Saturday, Sunday or public holiday in the place where the registered trustee

or solicitor consented to exercise the powers given by the authority. [subs (5A) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(6) When an authority becomes effective, the person authorised by it becomes the controlling trustee. [subs (6) insrt Act 44 of 1996 s 3 and Sch 1] SECTION 188 GENERALLY [83,075.5] General Section 188 allows a debtor who desires that his or her affairs be dealt with under Pt X to authorise a trustee or solicitor to call a meeting of his or her creditors and to take control of the debtor’s property. The statement at the head of subs (1), that the debtor who desires that his or her affairs be dealt with is of some importance as it negates any contention that the circumstances in which an abuse of process might be alleged. This was so held in Council of the New South Wales Bar Association v Abdul-Karim [2006] FCA 28; BC200600267 at [14] and [15]. Edmonds J went on to explain, at [15], that “the relevant time at which the purpose upon which s 188(1) is predicated has to be determined is at the time of the signing of the authority …”. His Honour said that although the agreement itself could still, despite its terms, amount to an abuse of process, the requirement of s 188A(2) that requires the agreement to specify whether or not the antecedent requirements of the statute apply to the debtor would amount to acquiescence. However it is emphasised that it is necessary to name a specific trustee. See s. 188(c) which allows a debtor to “sign an authority in accordance with the approved form naming and authorising a registered trustee, a solicitor or the Official Trustee to call a meeting with the debtor’s creditors and to take control of the debtor’s property”. Furthermore before the person authorised consents to exercise the powers given by the authority “a statement of the debtor’s affairs and a proposal for dealing with them under Part X” renders the authority “not effective” under s 188(2c). See Deputy Commissioner of Taxation v Steuer [2014] FCCA 773. [83,075.7] Until sequestration The Full Court has pointed out in Richmond v BMW Australia Finance Ltd (No 1) [2009] FCAFC 24; BC200901378 that “a debtor who desires to have his or her affairs dealt with without his or her estate being sequestrated may appoint a controlling trustee.” And therefore, if the estate is sequestered, this section may not be employed. [83,075.10] Approved form The approved form of authority under s 188 of the Act is Insolvency and Trustee Service of Australia Approved Form 13. [page 654] [83,075.15] Undischarged bankrupt Although the Act provides for second and subsequent bankruptcies, there is no room in the scheme of the Act for an undischarged bankrupt to give a valid authority under s 188: Re Hawkes; Ex parte Bird (1984) 1 FCR 24. [83,075.20] Signatures to be attested by a witness — s 188(2)(b) In Bendeich v Andresen [2000] FCA 61; BC200000152, Keifel J found that the requirement that the signature of the solicitor to the consent be attested by a witness was not satisfied where there was a gap between the signature by the solicitor and that of the witness, and other evidence of the unreliability of the process of attestation. As a consequence the authority was not effective for the purposes of Pt X of the Act.

[83,075.25] Effect of an invalid authority In Re Donovan; Ex parte Australia and New Zealand Banking Group Ltd [1972–73] ALR 313; (1972) 20 FLR 50 Sweeney J held that a debtor who signed an authority under s 188 committed an act of bankruptcy prescribed by s 40(1)(i) of the Act by so doing, whether the authority becomes “effective for the purposes of Part X” within the meaning of s 188 or not. In Re Curry; Ex parte Goldsea Pty Ltd (1992) 40 FCR 32 the court held that where an authority under s 188 was inoperative and ineffective because of want of compliance with s 188(2)(a) and (c), it could not constitute the act of bankruptcy specified in and constituted by paras 40(1)(j), (k), (l) and (m) all of which require the existence of an authority which is effective for the purposes of Pt X before the acts of bankruptcy constituted by those respective paragraphs are made out. See also Bendeich v Andresen [2000] FCA 61; BC200000152. [83,075.30] Successive authorities — s 188(4) The requirement for leave of the court before a debtor may give an authority within 6 months of a previous authority was inserted in 1996. Commenting on the new provision, Emmett J in Re Roberts (FCA, Emmett J, 0216/98, 3 March 1998, unreported) stated: As I perceive the matter, section 188(4) is designed to prevent a debtor from frustrating the enforcement of debts by creditors by continually renewing authority under section 188 so as to place control of his or her property in the hands of a trustee. See also Hooper v Ewins (1997) 79 FCR 389 and Re Watt; Ex parte Watt (FCA, French J, 0213/98, 13 March 1998, unreported). For the position prior to that amendment, see Pretorius v Daltons Carpet Tiles Pty Ltd (1984) 1 FCR 346; 54 ALR 743; Re De Kantzow; Ex parte De Kantzow and James (1992) 35 FCR 74; 107 ALR 219 and Saheed v Official Receiver (1993) 41 FCR 148. See also Brott v Grey (2000) 181 ALR 617; [2000] FCA 1727; BC200007311.

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[83,077A] Personal insolvency agreement 188A (1) Requirements for a personal insolvency agreement A personal insolvency agreement is a deed that: (a) is expressed to be entered into under this Part; and (b) complies with subsection (2). (2) A personal insolvency agreement must: (a) identify the debtor’s property (whether or not already owned by the debtor when he or she executes the agreement) that is to be available to pay creditors’ claims; and (b) specify how the property is to be dealt with; and (c) identify the debtor’s income (whether or not already derived by the debtor when he or she executes the agreement) that is to be available to pay creditors’ claims; and (d) specify how the income is to be dealt with; and

(e) specify the extent (if any) to which the debtor is to be released from his or her provable debts; and (f) specify the conditions (if any) for the agreement to come into operation; and [page 655] (g) specify the circumstances in which, or the events on which, the agreement terminates; and (h) specify the order in which proceeds of realising the property referred to in paragraph (a) are to be distributed among creditors; and (i) specify the order in which income referred to in paragraph (c) is to be distributed among creditors; and (j) specify whether or not the antecedent transactions provisions of this Act apply to the debtor; and (k) make provision for a person or persons to be trustee or trustees of the agreement; and (l) provide that the debtor will execute such instruments and generally do all such acts and things in relation to his or her property and income as is required by the agreement. (3) Subsection (2) does not limit the provisions that may be included in a personal insolvency agreement. (4) Antecedent transactions provisions If a personal insolvency agreement specifies that the antecedent transactions provisions of this Act apply to the debtor, sections 120 to 125 apply, with any modifications prescribed by the regulations, in relation to the debtor as if: (a) a creditor’s petition had been presented against the debtor on the day on which the special resolution requiring the execution of the agreement was passed; and (b) a sequestration order had been made against the debtor on that petition on the day on which the debtor executed the agreement; and (c) the trustee of the agreement were the trustee in the debtor’s

bankruptcy. (5) In the application, by virtue of subsection (4), of the provisions referred to in that subsection: (a) a reference to the property of the bankrupt is to be read as a reference to the divisible property of the debtor; and (b) a reference to a provable debt is to be read as a reference to a provable debt within the meaning of this Part; and (c) a reference to the end of the bankruptcy is to be read as a reference to the end of the personal insolvency agreement. (6) Definition In this section: income has the meaning given by section 139L. [s 188A insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 188A GENERALLY [83,077A.5] Subsection 2 — identification of property The subsection operates with s 188(1) to tend to provide the answer of acquiescence if it is contended that the agreement amount to an abuse of process as being unknown to the bankruptcy law. See [83,075.5] and Council of the New South Wales Bar Association v Abdul-Karim [2006] FCA 28; BC200600267.

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[83,077B] Inspection of statement of debtor’s affairs 188B (1) This section applies to the following documents relating to a debtor: (a) a copy of a statement of the debtor’s affairs given to an Official Receiver under subsection 188(5); (b) a statement of the debtor’s affairs given to the Official Receiver under subsection 188(2D). [page 656] (2) A person who states in writing that he or she is a creditor of the debtor, may, without fee: (a) inspect, personally or by an agent, the document; and

(b) obtain a copy of, or make extracts from, the document. (3) A person who does not state in writing that he or she is a creditor of the debtor, may, on payment of the fee determined by the Minister by legislative instrument: (a) inspect, personally or by an agent, the document; and (b) obtain a copy of, or make extracts from, the document. [subs (3) am Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(4) The debtor may, without fee and either personally or by an agent: (a) inspect the document; or (b) obtain a copy of, or make extracts from, the document. (5) 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 debtor or an agent of the debtor). (6) The Official Receiver may refuse to allow a person access under this section to particular information in a debtor’s statement of affairs on the ground that access to that information would jeopardise, or be likely to jeopardise, the safety of any person. [s 188B insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,080] Control of property of a debtor who has given authority under section 188 189 (1) When an authority given by a debtor under section 188 becomes effective, the property of the debtor becomes subject to control under this Division. [subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(1A) The control continues until one of the following events happens: (a) the creditors resolve at a meeting called under this Part that the property cease to be subject to control; (b) the debtor and a trustee execute a personal insolvency agreement following a special resolution of creditors; (c) [repealed] (d) 4 months pass since the authority under section 188 became effective; (e) the Court, under section 208, releases the property from control; (f) the debtor becomes a bankrupt; (g) the debtor dies. [subs (1A) insrt Act 44 of 1996 s 3 and Sch 1; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(1B) The trustee must notify the Official Receiver in writing within 7 days after the trustee becomes aware that the control has ended because of an event specified in subsection (1A). [subs (1B) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) A debtor whose property is subject to control under this Division: (a) shall not remove, dispose of or deal with any of his or her property except with the consent of the controlling trustee; (b) shall furnish to the controlling trustee such information with respect to any of the debtor’s examinable affairs as the controlling trustee requires; and (c) shall comply with any direction given to him or her by the controlling trustee with respect to his or her property or affairs. [page 657]

Penalty: Imprisonment for 12 months. [subs (2) am Act 119 of 1987 s 63; Act 44 of 1996 s 3 and Sch 2]

(3) A disposal of, or dealing with, property by a debtor in contravention of subsection (2) is not invalid by reason only of that contravention. SECTION 189 GENERALLY [83,080.5] Generally Legislative intention is that the term of the office of a controlling trustee should be no longer than is necessary to enable either the debtor’s property to be released from control or some final form of statutory administration to be put in place whether by way of sequestration order or one of the recognised private arrangements.

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[83,080AAA] Stay of proceedings relating to creditor’s petition until meeting of debtor’s creditors 189AAA (1) If: (a) an authority signed by a debtor under section 188 has become effective; and (b) either: (i) a creditor’s petition was presented against the debtor before the authority became effective; or (ii) a creditor’s petition is presented against the debtor after the authority became effective but before the first or only meeting of the debtor’s creditors called under the authority; proceedings relating to that petition are, by force of this subsection, stayed until: (c) the conclusion of the meeting; or (d) the adjournment of the meeting; whichever is the earlier. (2) This section does not limit subsection 206(1). [s 189AAA insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,082] Court orders with effect during period of

control of debtor’s property 189AA (1) The Court may make an order that has effect while the property of the debtor is subject to control: (a) discharging an order made at any time against the person or property of the debtor under a law relating to the imprisonment of fraudulent debtors; or (b) staying a civil or criminal legal process begun at any time against the person or property of the debtor for the debtor’s failure: (i) to pay a debt that would be provable if the debtor were bankrupt; or (ii) to pay a pecuniary penalty payable as a result of the failure to pay a debt that would be provable if the debtor were bankrupt; or (iii) to obey an order of a court to pay a debt that would be provable if the debtor were bankrupt; or (c) if the debtor has been imprisoned under a law described in paragraph (a) or for a failure described in paragraph (b) — releasing the debtor from custody. (2) Paragraph (1)(b) does not allow the Court to stay any proceedings under a proceeds of crime law. [subs (2) am Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003] [s 189AA insrt Act 44 of 1996 s 3 and Sch 1]

[page 658]

[83,083] Charge over debtor’s property that is subject to control 189AB (1) Creation of charge When the debtor’s property becomes subject to control under this Division, the debtor’s property is charged with: (a) the debtor’s unsecured debts at the time the debtor signed the authority under section 188; and (b) any amount by which the debtor’s secured debts exceeded the value

of the property secured for payment of the debts at the time the debtor signed the authority under section 188. (2) Charge continues despite changing ownership of charged property Subject to subsections (3) and (9), the charge is not affected by any change of ownership of the charged property. (3) Certain other charges have priority The charge created by subsection (1) is subject to: (a) any charge or encumbrance that was on the debtor’s property immediately before the debtor signed the authority under section 188; and (b) any charge or encumbrance acquired in good faith and for market value by a person who did not have notice of the charge created by subsection (1). (4) Priority over some other charges The charge created by subsection (1) has priority over a charge or encumbrance that is not described in subsection (3). (5) Registration of charge The controlling trustee may register a charge created by subsection (1) over particular property if a law of the Commonwealth, or of a State or Territory, provides for registration of a charge over that sort of property. (6) Effect of registration of charge If the trustee registers the charge over particular property, a person who acquires the property or an interest in the property after the charge is registered is taken to have notice of the charge for the purposes of subsections (3) and (9). (7) Controlling trustee may sell charged property The controlling trustee may sell property that is subject to a charge under subsection (1). (8) Application of proceeds of sale Any proceeds from the sale of charged property that are not needed to meet a charge or encumbrance that has higher priority than the charge created by subsection (1) are the debtor’s property. (9) End of charge on property that is sold A charge created by subsection (1) ceases to have effect in relation to property if the property is acquired by a person: (a) in good faith for consideration at least as valuable as the market value of the property without notice of the charge; or

(b) from the controlling trustee in a sale under subsection (7). (10) Charge ends when property ceases to be subject to control Unless it has already ceased to have effect under subsection (9), the charge ceases to have effect when control of the debtor’s property ends under subsection 189(1A). (11) Meaning of debtor’s property In this section: debtor’s property has the meaning given in subsection 190(5). [s 189AB insrt Act 44 of 1996 s 3 and Sch 1]

[83,083AC] Right of indemnity for controlling trustee 189AC (1) The controlling trustee is entitled to be indemnified out of the debtor’s property for: (a) his or her remuneration; and (b) any costs, charges or expenses properly and reasonably incurred by the controlling trustee while the debtor’s property was subject to control under this Division. [page 659] (2) To secure a right of indemnity under subsection (1), the controlling trustee has a lien on the debtor’s property. (3) A lien under subsection (2) ceases to have effect if the debtor becomes a bankrupt. [s 189AC insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,085] Report and declaration by controlling trustee 189A (1) The controlling trustee must prepare a report: (a) summarising and commenting on the information about the debtor’s affairs that is available to the controlling trustee; and (b) stating whether the controlling trustee believes that the creditors’

interests would be better served: (i) by accepting the debtor’s proposal for dealing with his or her affairs under this Part; or (ii) by the bankruptcy of the debtor; and (c) naming each creditor who was identified as a related entity of the debtor in the debtor’s statement of affairs. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) The trustee must: (a) give a copy of the report to the Official Receiver and to each of the creditors; and (b) keep a copy of the report. (3) Declaration of relationships The controlling trustee must make a written declaration stating whether the debtor is a related entity of: (a) the controlling trustee; or (b) a related entity of the controlling trustee. [subs (3) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(4) The controlling trustee must: (a) give a copy of the declaration to the Official Receiver; and (b) give a copy of the declaration to each of the creditors at the same time as the controlling trustee gives a copy of the subsection (1) report to each creditor; and (c) keep a copy of the declaration. [subs (4) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [s 189A subst Act 44 of 1996 s 3 and Sch 1] SECTION 189A GENERALLY [83,085.5] General The controlling trustee’s report and other documents required by reg 10.04 must be given to creditors at least 10 days before the meeting: reg 10.04. [83,085.10] Trustee’s statement of opinion In Re Burlock; Burlock v DCT (1994) 49 FCR 522; 121 ALR 168 (FC) the court held that the failure by the trustee in his report further to s 189A to state whether or not in his opinion it would be in the best interests of the debtor’s creditors to deal under Pt X with the debtor’s affairs in the manner proposed by the debtor, comprised a substantial noncompliance with statutory requirements and provided a basis for an order that the deed purportedly entered by the debtor under Pt X was void. Re Burlock; Burlock v DCT, above was distinguished by another Full Court in Policy Nominees Pty Ltd (prov liq apptd) v McDougall (Fed C of A, Ryan, Whitlam and Marshall JJ, 1067/97, 16 October 1997, unreported, BC9705237), on the basis that the report did contain an opinion, albeit, one couched in terms of a recommendation.

____________________ [page 660]

[83,090] Controlling trustee to prepare statement about possible resolutions 189B (1) A controlling trustee under an authority under section 188 must prepare a written statement about the special resolutions under section 204 that may reasonably be expected to be passed at a meeting of creditors called under the authority. (2) The trustee must: (a) give a copy of the statement to the Official Receiver and to each of the creditors; and (b) keep a copy of the statement. [s 189B subst Act 44 of 1996 s 3 and Sch 1]

[83,095] Duties and powers of controlling trustee 190 (1) The controlling trustee must call a meeting of the debtor’s creditors under this Division. [subs (1) subst Act 44 of 1996 s 3 and Sch 1]

(2) The controlling trustee is empowered: (a) to take immediate control of the debtor’s property and affairs; (b) to make such inquiries and investigations in connection with the debtor’s property and examinable affairs as the trustee considers necessary; (c) to carry on a business of the debtor if, in the opinion of the trustee, it will be in the interests of the creditors to do so; and (d) to deal with the debtor’s property in any way that will, in the opinion of the trustee, be in the interests of the creditors. [subs (2) am Act 12 of 1980 s 103; Act 119 of 1987 s 65; Act 44 of 1996 s 3 and Sch 1]

(3) [subs (3) rep Act 44 of 1996 s 3 and Sch 1]

(3A) For the purpose of exercising the powers conferred by subsection (2), a trustee may, with the consent in writing of the debtor, obtain such advice or assistance as the trustee considers desirable. [subs (3A) insrt Act 12 of 1980 s 103]

(4) For the purposes of exercising his or her powers under this section, the trustee may act in the name of the debtor as if he or she had been duly appointed by the debtor to be his or her lawful attorney to exercise those powers. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(4A) The controlling trustee or any person affected by an act or omission of the controlling trustee may apply to the Court for directions on a matter connected with control of the debtor’s property under this Division. [subs (4A) insrt Act 44 of 1996 s 3 and Sch 1]

(4B) The Court may make any orders it thinks just on a matter raised by an application. [subs (4B) insrt Act 44 of 1996 s 3 and Sch 1]

(5) In this section, debtor’s property, in relation to a debtor who has given an authority under section 188, means the property of the debtor that would be divisible amongst his or her creditors under Part VI (other than Subdivision B of Division 2) if a sequestration order had been made against him or her on the day on which he or she signed the authority, and includes property that has been acquired by, or has devolved on, the debtor on or after that day, but, if a personal insolvency agreement is executed by him or her in accordance with a special resolution of a meeting of creditors called in accordance with the authority, does not include property that is acquired by, or devolves on, him or her on or after the day on which he or she executes the agreement. [subs (5) subst Act 12 of 1980 s 103; am Act 44 of 1996 s 3 and Schs 1, 2; Act 86 of 2002 s 3 and Sch 4, opn 1 Jan 2003; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 661]

[83,095A] Additional duties of controlling trustee 190A (1) The duties of the controlling trustee include the following: (a) notifying the debtor’s creditors of the giving by the debtor of an

(b) (c) (d) (e)

(f) (g)

(h) (i)

authority under section 188; giving information about the administration of the controlling trusteeship to a creditor who makes a reasonable request for it; taking whatever action is practicable to try to ensure that the debtor discharges all of the debtor’s duties under this Act; considering whether the debtor has committed an offence against this Act; referring to the Inspector-General or to relevant law enforcement authorities any evidence of an offence by the debtor against this Act; making appropriate inquiries and investigations in connection with the debtor’s property and examinable affairs; disclosing to creditors any material personal interests held by the trustee that could conflict with the proper exercise of his or her powers or the proper performance of his or her functions; exercising powers and performing functions in a commercially sound way; exercising powers and performing functions in an impartial and independent manner.

[s 190A insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,100] Payments to protect property etc 191 Without prejudice to the powers conferred on a controlling trustee by section 190, the trustee may, at any time while the property of the debtor is subject to his or her control, make any payments from the debtor’s money that, in the opinion of the trustee, it is necessary to pay for the purpose of safe-guarding the value of his or her property or any of it or of avoiding forfeiture or determination of any interest or rights of the debtor in or to property. [s 191 am Act 44 of 1996 s 3 and Schs 1, 2]

[83,105] Changing the controlling trustee 192 (1) If a registered trustee or solicitor who has consented to exercise the powers given by an authority under section 188:

(a) dies; or (b) ceases to be a registered trustee or solicitor; or. (c) becomes incapable of exercising his or her powers under this Part; or (d) gives the Official Trustee a written request to be relieved of duties under this Part; then: (e) the Official Trustee becomes the controlling trustee; and (f) the debtor may sign a new authority under section 188. (2) If the debtor signs a new authority under section 188 naming a registered trustee or solicitor, the registered trustee or solicitor becomes the controlling trustee when he or she consents to exercise the powers given by the authority. (3) If: (a) a meeting of creditors or the Court nominates a registered trustee or the Official Trustee to be the trustee of a personal insolvency agreement; and (b) the nominated trustee is not already the controlling trustee; [page 662] the nominated trustee becomes the controlling trustee when the nominated trustee consents to act as trustee of the agreement. [subs (3) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(4) A person who becomes the controlling trustee under this section: (a) has the same powers and duties as the person originally authorised by the debtor under section 188; and (b) is taken for the purposes of this Division to have done any act or thing duly done earlier by an earlier controlling trustee. [s 192 subst Act 44 of 1996 s 3 and Sch 1] SECTION 192 GENERALLY [83,105.5] Successive authorities See [83,075.30].

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[83,110] Remuneration of controlling trustee 193 [s 193 rep Act 44 of 1996 s 3 and Sch 1]

[83,115] Time for calling meeting 194 (1) The meeting that is to be called under an authority under section 188 must be held: (a) not more than 25 working days after the relevant consent or approval was given; or (b) if the relevant consent or approval was given in December — not more than 30 working days after the relevant consent or approval was given. (2) For the purposes of subsection (1), the relevant consent or approval is: (a) if the person authorised is a registered trustee or solicitor — the consent of the person to exercise the powers given by the authority; or (b) if the person authorised is the Official Trustee — the approval given by the Official Receiver to name the Official Trustee in the authority. (3) For the purposes of subsection (1), a working day is a day that is not a Saturday, Sunday or public holiday in the place where the meeting is to be held. [s 194 subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 194 GENERALLY [83,115.10] Enlarging time Do the powers under s 194(1) conflict with the limits imposed by s 33? Re Gowing; Ex parte Deputy Registrar in Bankruptcy (1985) 11 FCR 111; 61 ALR 186 first dealt with this question. Beaumont J said, ALR at 187: In my opinion there is nothing in the language of s 194 or elsewhere in the Act which could form a foundation for a suggestion that the general power to extend time contained in s 33(2)(c) is not available for the purpose of extending the time for holding the meeting. All that s 194(1) relevantly does is to fix a time limit for this purpose; it is silent on the question whether any extension of that time limit should be permitted. It follows, in my view, that the qualification in s 33(2)(c) is not applicable. The Federal Court answered the question it was asked in that particular case as follows, ALR at 188:

… s 33(2)(c) of the Act does empower the Registrar to extend the time by which the meeting of creditors should have been held pursuant to s 194 of the Act after that time has expired. [page 663] Section 33(2)(c), as it then was, was repealed, but it is in the same terms as s 33(1)(c) presently is. Lucev FM applied Re Gowing in Re Posner [2007] FMCA 610; BC200702935 to extend time in the case before him. In Re Douglas [2011] FMCA 481; BC201104663 this line of decisions was followed and applied. The court (Lucev FM) applied the following principles for extension of time regarding the creditor’s meeting: a) the fact that relevant time limits ought not be lightly ignored; b) the length of the delay and whether there is an acceptable reason for the delay; c) the merit of the substantive matter; and d) whether there is prejudice suffered by an affected party.

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[83,115A] Statement of affairs and declarations of relationships to be tabled at meeting 194A (1) Scope This section applies to a meeting that is called under an authority under section 188. (2) Debtor’s statement of affairs The controlling trustee must table at the meeting a copy of the debtor’s statement of affairs. (3) If, assuming that the debtor had been required, immediately before the start of the meeting, to prepare a statement of affairs, that statement would have differed in one or more material respects from the statement given by the debtor under subsection 188(2C) or (2D), the debtor must table at the meeting a written statement identifying those differences. (4) Controlling trustee’s declaration The controlling trustee must table at the meeting a copy of the declaration made by the controlling trustee under subsection 189A(3). (5) If, assuming that the controlling trustee had been required, immediately before the start of the meeting, to make a declaration stating whether the debtor is a related entity of: (a) the controlling trustee; or (b) a related entity of the controlling trustee;

that declaration would have differed in one or more material respects from the declaration made by the controlling trustee under subsection 189A(3), the controlling trustee must table at the meeting a written statement identifying those differences. [s 194A insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,120] Debtor to attend meeting 195 (1) The debtor shall, unless prevented by illness or other sufficient cause, attend the meeting. [subs (1) subst Act 119 of 1987 s 69]

(2) At the meeting, the debtor must help the person presiding to the best of the debtor’s knowledge and ability. [subs (2) insrt Act 44 of 1996 s 3 and Sch 1]

(3) The debtor shall, at the meeting, answer, to the best of his or her knowledge and ability, all questions put to him or her by the controlling trustee or by a creditor with respect to his or her conduct and examinable affairs. [subs (3) am Act 119 of 1987 s 69; Act 44 of 1996 s 3 and Sch 2]

[page 664] (3A) Where the Official Trustee is the controlling trustee, subsection (3) applies as if the reference in that subsection to the controlling trustee were a reference to an Official Receiver or a person authorized in writing by an Official Receiver to act on behalf of the Official Trustee at the meeting. [subs (3A) insrt Act 12 of 1980 s 106; am Act 44 of 1996 s 3 and Sch 1]

(4) The failure of the debtor to attend the meeting does not affect the validity of any resolution passed at the meeting.

[83,122] Procedure for calling and holding meeting 196 Division 5 of Part IV applies, with any modifications prescribed by the regulations, in relation to a meeting called under an authority under section 188 as if: (a) the debtor who signed the authority were bankrupt; and

(b) the controlling trustee were the trustee in the bankruptcy. [s 196 subst Act 44 of 1996 s 3 and Sch 1] SECTION 196 GENERALLY [83,122.5] General Modifications to Div 5 of Pt IV are prescribed by reg 10.05. REPEALED PROVISION — SECTION 196 BEFORE 16 DECEMBER 1996 [83,125] Election of chairman etc Section 196 as it existed prior to its substitution by Act 44 of 1996 is reproduced below, with commentary as applicable prior to its repeal. It applies in relation to a meeting held before 16 December 1996 or: (a) where notice of the meeting was given before 16 December 1996; or (b) where a meeting referred to in (a) was adjourned and continued. Note however the effect of s 189(1A)(d). “Election of chairman etc 196 (1) The majority in number of the creditors present at the meeting in person, by attorney or by proxy shall elect a chairman to preside at the meeting. (2) If the creditors so present determine, by resolution, that the time or place for which the meeting was called was not convenient to the majority in number of the creditors, the meeting shall be adjourned to a time and place determined, by resolution, by the creditors so present.” Section 196 Generally (Before 16 December 1996) [83,125.5] Duty of chairman of meeting (before 16/12/96) Of the duty of a chairman of a meeting, Uthwatt J in Second Consolidated Trust Ltd v Ceylon Amalgamated Tea & Rubber Estates Ltd [1943] 2 All ER 567 at 569 said: “The duty of a chairman of a meeting is to ascertain the sense of the meeting upon any resolution properly coming before the meeting. Then comes the question as to his position in regard to his right to demand a poll. Upon a fair construction of this deed, I do not regard that as a personal right to be exercised according to the fancy of the chairman; in other words, I do not think he has an unlimited discretion as to the manner in which he may exercise that power. It appears to me that the power to demand a poll is a power possessed by the chairman which is to be exercised or not to be exercised according to his decision whether it is necessary to exercise power in order to ascertain the sense of the meeting upon the matter before them; in other words, it is a power directed towards enabling him to carry on the meeting for the purpose for which it was convened”. And later on the same page: “In those circumstances, it seems to me that the chairman in this particular case in deciding not to demand a poll never had his mind directed to the real point which he should have considered before coming to a decision. That point was how best to ascertain the sense of the meeting.” The decision was followed in Re Ringuet; Ex parte Knight (1986) 11 FCR 45; 71 ALR 295. [page 665] [83,125.15] What constitutes a meeting of creditors? (before 16/12/96) Although creditors can be represented at a meeting by proxy, there cannot be said to be a meeting at all unless more than one individual is present in person. Furthermore, since the section indicates that the meeting is to be presided over by a chairman, in order to comply with a rule there must be a real meeting of persons “in

the flesh”: Re Andrew (1877) 2 Juris Rep (NZ) 257. Where the only person present at a meeting was a controlling trustee who held proxies for three creditors and purported to act on the basis that there were three creditors present by proxy at the meeting, it was held that there was no “meeting” of creditors: Re Shergold; Ex parte McInnes (1986) 11 FCR 506; 68 ALR 127. See also Re Nelson; Ex parte McInnes [1963] ALR 448; (1963) 19 ABC 172. [83,125.30] Place convenient (before 16/12/96) In Re Walton (1961) 19 ABC 52 the court construed the words “place … convenient” as meaning a place convenient in a goegraphical sense or some locality which is reasonably accessible in fact to creditors who are requested to attend a meeting called by the debtor.

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[83,130] Adjournments (before 16/12/96) *197 (1) A meeting may, by resolution, be adjourned from time to time. (2) Where a meeting is adjourned, the adjourned meeting shall, unless it is otherwise provided by the resolution by which it is adjourned, be held at the same place as the original meeting. [s 197 rep Act 44 of 1996 s 3 and Sch 1, opn 16 Dec 1996] REPEALED PROVISION — SECTION 197 BEFORE 16 DECEMBER 1996 [83,130.5] “resolution” (before 16/12/96) Section 5 defines resolution as a “resolution passed by a majority in value of the creditors present personally, by attorney or by proxy at a meeting of creditors and voting on the resolution”.

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[83,135] Entitlement to vote at meeting (before 16/12/96) *198 (1) Subject to this section, every creditor is entitled to vote at a meeting under this Division. (2) A creditor is not entitled to vote in respect of an unliquidated or contingent debt or a debt the value of which is not ascertained. (3) For the purpose of enabling a creditor to vote, a debt that is certain but is payable in the future shall be deemed to be payable at the time of the meeting. (4) A creditor is not entitled to vote (otherwise than in respect of the election of a chairman of the meeting), unless he has made known to the

chairman particulars of his debt. (5) Except as provided by subsection (6), a secured creditor is not entitled to vote in respect of a secured debt unless he surrenders his security. (6) A secured creditor may, if he has furnished to the chairman, in writing, particulars of the security and of the value at which he estimates it, vote in respect of the balance (if any) of the secured debt after deducting the value at which he has estimated the security. [page 666] (7) The spouse, or the de facto spouse, of the debtor is not entitled to vote at a meeting under this Division. [subs (7) am Act 119 of 1987 s 70] [s 198 rep Act 44 of 1996 s 3 and Sch 1, opn 16 Dec 1996] REPEALED PROVISION — SECTION 198 BEFORE 16 DECEMBER 1996 [83,135.5] Section 198(2) — “unliquidated or contingent debt or a debt the value of which is not ascertained” (before 16/12/96) A “contingent” debt refers to a case where there is doubt if there will be any debt at all; a debt “the value of which is not ascertained” means a debt the amount of which cannot be estimated until the happenings of some future event; and “an unliquidated” debt includes not only all cases of damages to be ascertained by a jury, but extends to any debt where the creditor fairly admits that he cannot state the amount: Ex parte Ruffle (1873) LR 8 Ch App 997 at 1001 per Mellish LJ; Re Segal; Lensworth Finance Ltd v Segal (1975) 9 ALR 154; 45 FLR 85; Re Levy; Ex parte Scholefield Goodman & Sons Ltd (1980) 50 FLR 99; Re Tregonning: Ex parte Friends’ Provident Life Office (1983) 74 FLR 327. Ordinarily, a debt owing under a guarantee is contingent until it becomes due and payable in accordance with the terms of the guarantee. This is normally upon service of a written demand: Re Levy; Ex parte Scholefield Goodman & Sons Ltd, above at 106. A debt is not “contingent” or “unascertained” merely because it is disputed: Forshaw v Thompson (1992) 35 FCR 329; 106 ALR 633 at 644; Re McLean; Ex parte Friends Provident Life Office (1992) 36 FCR 502; 108 ALR 360. A debt is certain if it is capable of being made certain, notwithstanding that it might not be agreed to by the debtor: Re Levy; Ex parte Scholefield Goodman & Sons Ltd, above at 112; compare Re Tregonning: Ex parte Friends’ Provident Life Office, above at 331. [83,135.10] Section 198(4) — “particulars of his debt” (before 16/12/96) A creditor is not entitled to vote unless he or she gives the chairman of the meeting particulars of his debt (see, for example, Re Peters; Ex parte NZI Securities Ltd (Fed C of A, Full Court, 16 October 1992, unreported); Farrow Mortgage Services Pty Ltd (in liq) and Hodgson v Abeyratne and Sheehan (1993) 47 FCR 208 (FCAFC). Any question as to the right of a person to vote at a meeting, or as to the amount of the debt in respect of which a person is entitled to vote, is to be determined by the chairman who may adjourn the meeting for a period of not more than 14 days to enable him to investigate the matter: s 201; see Re Segal; Lensworth Finance Ltd v Segal (1975) 9 ALR 154 at 160; 45 FLR 85. It follows that the

chairman must satisfy himself that the debtor has a substantial and meritorious defence to a creditor’s claim before he excludes that creditor from voting. He cannot merely rely on the fact that there are proceedings on foot in relation to the debt. It has been noted that the size of the debt may make it all the more incumbent on him to adjourn the meeting: Re Levy; Ex parte Scholefield Goodman & Sons Ltd (1980) 50 FLR 99 at 113; Re Tregonning: Ex parte Friends’ Provident Life Office (1983) 74 FLR 327 at 331. The chairman’s powers are not exclusive of the court’s jurisdiction to determine voting rights if called upon to do so (Zantiotis v Andrew (1987) 80 ALR 23 at 26; Forshaw v Thompson (1992) 35 FCR 329; 106 ALR 633 at 644; Re McLean; Ex parte Friends Provident Life Office (1992) 36 FCR 502; 108 ALR 360 at 370; but see Re Amadio (1978) 24 ALR 455 at 469ff; 46 FLR 147). It will usually be appropriate for the court to make a finding as to the existence and extent of the alleged debt and not merely whether there is an arguable case that the debt is owing: Re McLean; Ex parte Friends Provident Life Office, above, ALR at 369. In reviewing a chairman’s decision, the court will have regard to all the evidence before it and not merely the material provided to the chairman: Re McLean; Ex parte Friends Provident Life Office, above, ALR at 368. It is the policy of this legislation that meetings of creditors under Pt X proceed with as little delay and expense as possible. It is contemplated that the chairman will deal with questions of voting entitlements in a summary way without technicalities and delays: “The evident object of s 198 is to establish a simple, practical procedure to enable the chairman to determine who can vote and, if so, for what amount. Because of time constraints, it was no doubt thought undesirable that the chairman should have to enter upon an investigation into the technical questions which could well surround such an inquiry into whether a debt should be admitted to [page 667] ‘proof’. By s 198(4), a creditor is not entitled to vote unless he or she had made known to the chairman particulars of his or her debt. This is a practical safeguard designed to ensure that, for instance, frivolous claims cannot give any right to vote. Thus s 198 reveals on its face a legislative intention to establish a code that, with certain defined exceptions, gives a creditor a right to vote notwithstanding that further investigation may reveal that his claim should not be admitted to ‘proof’”: Zaniotis v Andrew (No 2) (1988) 80 ALR 299 at 302–3 per Beaumont J; compare Re Dingle; Westpac Banking Corp v Worrell (1993) 47 FCR 478; 119 ALR 265 at 273 (FC); Forshaw v Thompson, above, ALR at 639 per Lockhart J; Re Levy; Ex parte Scholefield Goodman & Sons Ltd, above, at 112 per Bowen CJ. Less, therefore, is required of a chairman determining rights of persons to vote at a meeting than is required of a trustee adjudicating claimants’ entitlements to prove in an administration. A person may be admitted by a chairman to vote pursuant to s 198 notwithstanding that his proof of debt in the Pt X may subsequently be rejected by the trustee: Zaniotis v Andrew (No 2), above. The chairman does not adjudicate creditors’ entitlements to vote in the same way that the court may. The chairman’s determination is not final and conclusive of the creditor’s rights; the power given by the Act to the chairman to determine voting rights does not exclude the court’s jurisdiction to determine those rights (Forshaw v Thompson, above; Re McLean; Ex parte Friends Provident Life Office, above; note that Re Amadio (1978) 24 ALR 455; 46 FLR 147 no longer appears to be good law in this respect), although the court’s discretion to review a chairman’s decision as to a creditor’s entitlement to vote is to be exercised reluctantly: Re Dingle; Westpac Banking Corp v Worrell, above, ALR at 272. On the other hand, the court’s finding is final and conclusive (Re McLean; Ex parte Friends Provident Life Office, above, ALR at 368; Re Levy at 112–13. Therefore, when it reviews a chairman’s decision, the court may examine all the evidence available as at the time of the hearing (even that which was not available to the chairman at the time of the meeting) in order to determine a person’s status as a creditor

and his or her voting entitlement (as to the court’s function, see Beard v Prestige Baking Industries Pty Ltd (1981) 36 ALR 307 at 325; 52 FLR 384; Re McLean; Ex parte Friends Provident Life Office, above, ALR at 368; Re Dingle; Westpac Banking Corp v Worrell, above, ALR at 272ff). There is little guidance as to what is meant by “particulars”: “The statute does not state what are the particulars that must be made known to the chairman. They obviously include the amount of the debt. It may be deduced that they include also sufficient information to enable the chairman to determine whether the debt is ‘an unliquidated or contingent debt or a debt the value of which is not ascertained’ (as to which expression see Ex parte Ruffle (1873) LR 8 Ch App 997 at 1001) (s 198(2)); particulars of the security, if any (s 198(5), (6)); and, if a question arises for determination under s 201, all such information as may be required to enable the chairman to determine that question”: Re Venetoulis; Ex parte Calsil Ltd (1976) 13 ALR 625 at 629 per Riley J. In Re Venetoulis; Ex parte Calsil Ltd, above, Riley J found no evidence that creditors had given to the chairman at the meeting any information about their debts other than that contained in an attendance schedule. The only details included in that document were the date of the debt, its amount and the name of the creditor. It did not make plain whether the debt was owed by the debtors jointly, severally or jointly and severally. It appears that the chairman may have relied on knowledge acquired by him in his capacity as controlling trustee. In any event, the special resolution of the creditors in favour of a deed of arrangement was upheld by Riley J on the basis that the applicant had failed to produce evidence that the creditors had not given the chairman “the necessary particulars” before the meeting. Unfortunately, His Honour’s decision casts little light on what those particulars were, or ought to have been. It is submitted that a chairman should require, at the very least, details of when the debt was contracted, the name of the creditor, the amount of the debt, the consideration given and (in cases of meetings of creditors of two or more debtors) whether it is owed jointly, severally or jointly and severally. Confirmation that the debt is liquidated and not contingent on the happening of some event might also be necessary in some instances. Arguably, information beyond this is not so much “particulars” as evidence of indebtedness; however, there is some authority for the proposition that “particulars” in this context, at least in some cases, does extend to documentary proof of the claim: [page 668] “The chairman presides at the meeting of creditors and must ensure that the requirements of the Bankruptcy Act are observed. He is required to determine, for the purposes of the meeting, who are the creditors and the amount of the debt owed to each creditor … Under s 201, the chairman has power to adjourn the meeting for a limited time to enable him to investigate any question as to the right of a person to vote at the meeting … The chairman might need to obtain documents supporting the claim. If the claimant has those documents, they should be made available to the chairman. The claimant is seeking the right to vote at the meeting. Common sense dictates that the claimant should take all reasonable steps to establish the claim of being a creditor. The chairman may need to obtain legal advice. These are all practical matters to be considered and applied in a practical manner.”: Farrow Mortgage Services Pty Ltd (in liq) and Hodgson v Abeyratne and Sheehan, above, at 215). It seems to follow from the Full Court’s decision in this case that documents are not “provided” for the purposes of subs 198(4) unless they are provided within sufficient time to enable the chairman to consider their contents and, if necessary, to obtain legal advice. It should be noted that Sheehan is a case where a “question” arose as to an entitlement to vote, calling for an adjournment of the meeting under s 201. Arguably, documentary evidence constitutes part of the necessary “particulars” only where a question as to a creditor’s voting entitlement does arise (which may or may not result in a 14 day adjournment under s 201). Normally, however, the inclusion of the debt in the debtor’s statement of affairs, and corresponding details from the creditor as to the

amount of the debt, when it was incurred and what consideration was given for it will be enough to satisfy the chairman as to the creditor’s entitlement to vote. [83,135.15] Code established by s 198 (before 16/12/96) Within certain defined exceptions s 198 gives a creditor a right to vote notwithstanding that further investigation may reveal that his claim should not be admitted to proof: Zaniotis v Andrew (No 2) (1988) 80 ALR 299 per Beaumont J.

____________________ *Editor’s Note: Sections 197–203 as they existed prior to their repeal by Act 44 of 1996 are retained for the benefit of readers, with commentary applicable prior to their repeal. They apply in relation to a meeting held before 16 December 1996 or: (a) where notice of the meeting was given before 16 December 1996; or (b) where a meeting referred to in (a) was adjourned and continued. Note however the effect of s 189(1A)(d).

[83,140] Restriction on voting by proxy (before 16/12/96) *199 A person acting as a proxy or attorney at a meeting under this Division is not eligible, unless he is expressly authorized to do so by the instrument by which he was appointed, to vote for the appointment of himself, his partner or his employer as trustee of a deed of assignment, a deed of arrangement or a composition. [s 199 rep Act 44 of 1996 s 3 and Sch 1, opn 16 Dec 1996] REPEALED PROVISION — SECTION 199 BEFORE 16 DECEMBER 1996 [83,140.5] Restrictions on voting by proxy (before 16/12/96) Section 199 imposes restrictions on voting by proxy by providing that a person acting as a proxy or attorney at a meeting under Div 2 of Pt X is not eligible, unless that person is expressly authorised to do so by the instrument by which he or she was appointed, to vote for himself or herself, the person’s partner or employer as trustee of a deed of assignment, a deed of arrangement or a composition. [83,140.10] Form of proxy (before 16/12/96) Since the purpose of this section is to ensure that a person voting by proxy for the appointment as trustee of a person who is connected with the propertyholder understands fully what he or she is doing, there must be some indication in the form of proxy authorising the person acting as proxy to vote for himself or herself, the person’s partner [page 669] or his or her employer as trustee of a deed. In Re Alty; Ex parte Muir (1985) 9 FCR 190, the court held that a deed of assignment was invalid because there was no power vested in a proxy holder to vote for the appointment of his employer as trustee for deed of assignment.

Where at a meeting of creditors a representative held a proxy which empowered her to vote to accept a composition of ten cents in the dollar over three years by monthly instalments but which said nothing about the appointment of a trustee, the purported vote of that representative based on that proxy in favour of the appointment of the nominated person as trustee was invalid: Re Van Twest; Ex parte Tubemakers Australia Ltd (1986) 69 ALR 573.

____________________ *Editor’s Note: Sections 197–203 as they existed prior to their repeal by Act 44 of 1996 are retained for the benefit of readers, with commentary applicable prior to their repeal. They apply in relation to a meeting held before 16 December 1996 or: (a) where notice of the meeting was given before 16 December 1996; or (b) where a meeting referred to in (a) was adjourned and continued. Note however the effect of s 189(1A)(d).

[83,145] Manner of voting (before 16/12/96) *200 (1) A creditor may vote either in person or by his attorney or by a proxy appointed in writing by the creditor or his attorney. (2) Subject to subsection (3A), a proxy may be appointed to vote on all matters arising at the meeting or on particular matters specified in the instrument of appointment. [subs (2) am Act 119 of 1987 s 71]

(3) A person claiming to be the proxy of a creditor is not entitled to vote as proxy (otherwise than in respect of the election of a chairman of the meeting) unless the instrument by which he is appointed has been lodged with the chairman. (3A) A person is not entitled to vote as proxy of a creditor on a proposed resolution under section 204 unless the instrument by which the person is appointed authorises the person to vote in a specified manner on each of the following kinds of resolution under that section: (a) a resolution that the debtor’s property be no longer subject to control under this Division; (b) a resolution requiring the debtor to execute a deed of assignment; (c) a resolution requiring the debtor to execute a deed of arrangement; (d) a resolution accepting a composition; (e) a resolution requiring the debtor to present a debtor’s petition within 7 days after the passing of the resolution;

and the person votes on the proposed resolution in accordance with the instrument. [subs (3A) insrt Act 119 of 1987 s 71]

(3B) For the purposes of subsection (3A), an instrument authorising a person to abstain from voting on a particular kind of resolution shall be taken to authorise the person to vote in a specified manner on that kind of resolution. [subs (3B) insrt Act 119 of 1987 s 71]

(4) A person claiming to be the attorney of a creditor is not entitled to vote as attorney (otherwise than in respect of the election of a chairman of the meeting) unless: (a) the instrument by which he is appointed has been produced to the chairman; or (b) the chairman is otherwise satisfied that he is the duly authorized attorney of the creditor. [s 200 rep Act 44 of 1996 s 3 and Sch 1, opn 16 Dec 1996] REPEALED PROVISION — SECTION 200 BEFORE 16 DECEMBER 1996 [83,145.5] Subsection (3) (before 16/12/96) The subsection “entitles a proxy appointed by the attorney of a creditor to vote by lodging the proxy of the attorney. It is not required that he produce the power of attorney”: Re Moloney; Ex parte Field (1981) 51 FLR 31. [83,145.10] Subsection (4) (before 16/12/96) A person claiming to be an attorney need not produce the instrument by which he or she is appointed if the person can otherwise satisfy the [page 670] chairman that he or she is the duly authorised attorney of the creditor: Re Segal; Lensworth Finance Ltd v Segal (1975) 9 ALR 154; 45 FLR 85. [83,145.15] Subsection (3A) (before 16/12/96) In Re Loustas; Ex parte Hama Pty Ltd (FCA, Ryan J, 9 April 1990, unreported) Ryan J said of s 200 (3A) at pp 6–7: In my view, that subsection requires the proxy instrument to authorise the proxy to vote in a specified manner on each of the five kinds of resolution indicated in paras (a) to (e). The specification of the manner of voting need not confine the proxy to voting for or against each kind of resolution. It may, for example, specify that the proxy holder may vote for or against a particular kind of resolution as he or she thinks fit. However, the specification must be sufficiently precise to enable the chairman of the meeting to determine, when the vote has been cast, whether it is in accordance with the proxy instrument. In Re Burns; Ex parte National Mutual Life Assn of Australasia Ltd (1992) 39 FCR 477; 117 ALR

174, Hill J held that a proxy which instructed the proxy holder to vote in a specified manner on each of the kinds of resolutions specifically referred to in s 200(3A) was a proxy that was valid in form. The proxy had been clearly directed on how to vote in relation to each of the five resolutions should any or all of them be put to a vote. Rather than vote only in favour of the motion first put the proxy holder was required to cast his vote as proxy as directed in respect of any of the resolutions which were put to the meeting. Neither in the Act or in the rules is there a proscription of directing a proxy to vote in a given way in respect of a resolution if there has been a direction of a particular kind in respect of a different resolution. [83,145.20] Validity of proxies (before 16/12/96) In Re Burns; Ex parte National Mutual Life Assn of Australasia Ltd (1992) 39 FCR 477; 117 ALR 174 the court considered that an instrument of proxy executed by an officer of a creditor on the creditor’s behalf wherein the creditor was not directly identified would nonetheless be held to be valid where the identification of the creditor appeared only in a covering letter. [83,145.25] Undated proxy forms (before 16/12/96) In Re Burns; Ex parte National Mutual Life Assn of Australasia Ltd (1992) 39 FCR 477; 117 ALR 174 proxy forms were received and admitted in favour of a composition notwithstanding that they were undated. The court held that the failure to date the proxies did not invalidate the appointment and that the chairman was entitled to admit the undated proxy to vote. [83,145.30] Requirement that instrument of proxy be witnessed (before 16/12/96) In Re Agushi; Ex parte Farrow Mortgage Services Pty Ltd (in liq) v Cole (1992) 8 ACSR 549, it was held that that absence of any attestation by a witness brought about the result that a proxy was fatally flawed. The court observed that there seemed to be no doubt that the signature of a creditor to a written appointment of a proxy should be witnessed. The court held that although there is no statutory provision to this effect, the prescribed Forms 43 and 44 both make provision for a witness to the creditor’s signature and that a similar situation prevailed under the Bankruptcy Act 1883 (UK). The contrary view is expressed by Hill J in Re Burns; Ex parte National Mutual Life Assn of Australasia Ltd (1992) 39 FCR 477; 117 ALR 174. This decision established that it did not follow that a form of proxy is void where it is executed under the common weal of a company attested to in accordance with the company law by a director and a secretary merely because it is not further attested to by yet another witness. [83,145.35] Faxed proxy (before 16/12/96) In Re Mills; Ex parte Lloyd’s v Prentice (1997) 73 FCR 551 the court affirmed the proposition that s 200(3) does not contemplate submission of proxy by fax (nevertheless, the chairman ought to have adjourned under s 201). See now s 64ZB(3).

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[page 671]

[83,150] Admission and rejection of claim to vote (before 16/12/96) *201 Any question as to the right of a person to vote at a meeting under this Division, or as to the amount of the debt in respect of which a person is entitled to vote at such a meeting, shall be determined by the chairman, who may, if he thinks it necessary to do so, adjourn the meeting for a period, not exceeding 14 days, to enable him to investigate the matter. [s 201 rep Act 44 of 1996 s 3 and Sch 1, opn 16 Dec 1996] REPEALED PROVISION — SECTION 201 BEFORE 16 DECEMBER 1996 [83,150.5] Challenge to the chairman’s decision (before 16/12/96) Sections 30 and 222 empower the court to review the basis of the chairman’s decision: Re Levy; Ex parte Scholefield Goodman & Sons Ltd (1980) 50 FLR 99; Zantiotis v Andrew (1987) 80 ALR 23. In Forshaw v Thompson (1992) 35 FCR 329; 106 ALR 633, the Full Court of the Federal Court was called upon to determine whether the decision of the chairman of a meeting of creditors of a debtor called under Pt X of the Act pursuant to s 190 admitting the claim of a creditor to vote at the meeting is examinable by the court. The second question was whether assuming that the first question could be answered in the affirmative, the trial erred in the exercise of his discretion when refusing to grant an injunction restraining the chairman of the meeting from prohibiting the creditor to vote at it. Lockhart J reviewed and followed Re Levy; Ex parte Scholefield Goodman & Sons Ltd, above, and the passages from the judgment of Bowen CJ in that case which were expressly approved and applied by Beaumont J in Zantiotis v Andrew (1987) 80 ALR 23. His Honour further considered Re Amadio (1978) 24 ALR 455; 46 FLR 147 where Rogerson J held that a decision of the chairman would not be challengeable unless perhaps there was special circumstances. Lockhart J was of the opinion that Rogerson J in Re Amadio, above, took an unduly restrictive approach and then observed: In my opinion s 201 does not evince an intention by the legislature to exclude the court’s jurisdiction to determine questions concerning the right of persons to vote at meetings of creditors under Div 2 of Pt X. The section entrusts to the chairman the power to determine the right of a person to vote at a meeting of creditors under Div 2 of Pt X and the amount of his debt to be taken into account for voting purposes. Although no right of appeal is granted against the chairman’s decision, the section does not make his decision final and conclusive. The determination of the right of a creditor to vote may involve the consideration of a variety of circumstances including, as here, the question whether the creditor is a contingent creditor and therefore disqualified from voting by s 198(2) or whether he is a creditor at all (also this case). The determination of these questions is certainly open to the chairman for the purposes of determining entitlement to vote at meetings, but his examination must necessarily be limited and not binding upon anyone otherwise than with respect to the entitlement to vote at the relevant meeting; he cannot determine substantive rights and liabilities involving the relationship of debtor and creditor.

Also the language of s 201 is not apt to oust the jurisdiction of the court; it simply says that any question as to a person’s right to vote at a meeting under Div 2 or as to the amount of the debt in respect to which he is entitled to vote at a meeting shall be determined by the chairman. It is a provision which both empowers and requires the chairman to determine these questions, but it does not thereby deny the power to the court. In considering the decision of the chairman of the meeting, the court is to determine whether the chairman’s decision was correct having regard to all the facts in evidence before the court and not [page 672] merely to the material before the chairman at the time; Re Tregonning: Ex parte Friends’ Provident Life Office (1983) 74 FLR 327; Zaniotis v Andrew (No 2) (1988) 80 ALR 299. [83,150.10] Disputed debts (before 16/12/96) The court’s function on a review of the correctness of the chairman’s decision in relation to a disputed debt is to make a finding as to the existence and extent of the alleged debt and not merely to determine whether there is an arguable case concerning the existence of a debt: Re McLean; Ex parte Friends Provident Life Office (1992) 36 FCR 502; 108 ALR 360. [83,150.15] See now s 64ZA(9).

____________________ *Editor’s Note: Sections 197–203 as they existed prior to their repeal by Act 44 of 1996 are retained for the benefit of readers, with commentary applicable prior to their repeal. They apply in relation to a meeting held before 16 December 1996 or: (a) where notice of the meeting was given before 16 December 1996; or (b) where a meeting referred to in (a) was adjourned and continued. Note however the effect of s 189(1A)(d).

[83,155] Quorum (before 16/12/96) *202 (1) At a meeting under this Division, 2 creditors, being creditors entitled to vote at the meeting, present personally, by attorney or by a proxy, constitute a quorum. (2) If a quorum is not present within 30 minutes after the time appointed for the meeting, any creditor or attorney or proxy of a creditor entitled to vote at the meeting who is present may adjourn the meeting to such date and place as he appoints. (3) The date so appointed shall not be earlier than 7 days, or later than 14 days, from the date on which the adjournment takes place.

(4) Notice of the adjournment shall forthwith be given to all the creditors by the debtor or by the controlling trustee or the solicitor authorized by the debtor to call the meeting in the manner specified in subsection 194(2). (5) A meeting of creditors on the date and at the place to which the meeting under this Division was adjourned shall not be deemed incompetent to act for the purposes of this Part by reason only of a failure to comply with subsection (4) unless the Court, on the application of a creditor or of the controlling trustee or solicitor by whom the meeting was called, otherwise declares. [subs (5) am Act 12 of 1980 s 107] [s 202 rep Act 44 of 1996 s 3 and Sch 1, opn 16 Dec 1996] REPEALED PROVISION — SECTION 202 BEFORE 16 DECEMBER 1996 [83,155.5] Present in person (before 16/12/96) A meeting of creditors requires more than one person to be present in person. Accordingly there will be “no meeting” of creditors if, for example, only the controlling trustee under the deed is present even if he or she holds proxies for various creditors: Re Shergold; Ex parte McInnes (1986) 11 FCR 506; 68 ALR 127. [83,155.10] Subsection (3) (before 16/12/96) For reckoning of time, see s 36(1) of the Acts Interpretation Act 1901 (Cth).

____________________

[83,160] Minutes of meeting (before 16/12/96) *203 (1) The chairman shall cause minutes of the proceedings at a meeting under this Division to be prepared and shall sign the minutes not later than 14 days after the date of the meeting. [page 673] (2) If the chairman dies without having signed the minutes or becomes incapable, whether through illness or other cause, of signing the minutes as required by subsection (1), the controlling trustee or the solicitor who called the meeting, if he attended the meeting, or a creditor who attended the meeting may sign the minutes in place of the chairman. (2A) Where: (a) the Official Trustee is acting as the controlling trustee; and

(b) an Official Receiver, or a person authorized by an Official Receiver to act on behalf of the Official Trustee for the purpose, attended a meeting under this Division; the Official Receiver or that person, as the case may be, may sign the minutes of the meeting in place of the chairman if the chairman dies without having signed the minutes or becomes incapable, whether through illness or other cause, of signing the minutes as required by subsection (1). [subs (2A) insrt Act 12 of 1980 s 108]

(3) Where a meeting is adjourned in pursuance of section 202, the person by whom it is adjourned shall cause a minute to that effect to be prepared and shall sign the minute not later than 14 days after the date on which the meeting was adjourned. (4) Where minutes of the proceedings at a meeting under this Division are prepared and signed in pursuance of this section, or a minute referred to in subsection (3) is prepared and signed in pursuance of that subsection, the controlling trustee, or the solicitor who called the meeting, shall, within 21 days after the day on which the meeting was held, cause a copy of the minutes or minute, as the case may be, to be filed in the office of the Registrar. [subs (4) insrt Act 12 of 1980 s 108] [s 203 rep Act 44 of 1996 s 3 and Sch 1, opn 16 Dec 1996] *Editor’s Note: Sections 197–203 as they existed prior to their repeal by Act 44 of 1996 are retained for the benefit of readers, with commentary applicable prior to their repeal. They apply in relation to a meeting held before 16 December 1996 or: (a) where notice of the meeting was given before 16 December 1996; or (b) where a meeting referred to in (a) was adjourned and continued. Note however the effect of s 189(1A)(d).

[83,165] Resolution for personal insolvency agreement 204 (1) The creditors may, at a meeting called in pursuance of an authority under section 188, by special resolution: (a) where the debtor’s property is subject to control under this Division, resolve that the debtor’s property be no longer subject to control under this Division;

(b) require the debtor to execute a personal insolvency agreement; or (c) [repealed] (d) require the debtor to present a debtor’s petition within 7 days from the day on which the resolution was passed. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) A special resolution requiring a debtor to execute a personal insolvency agreement must specify the provisions to be included in the agreement. [subs (2) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(3) If a special resolution requiring the debtor to execute a personal insolvency agreement has been passed, the creditors must, by resolution, nominate a trustee or trustees to be trustee or trustees of the agreement. [subs (3) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(4) [subs (4) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] (5) The creditors may, in nominating a trustee or trustees for the purposes of subsection (3): (a) nominate 2 or more trustees to hold the office of trustee jointly, or jointly and severally; and [page 674] (b) nominate trustees to be trustees of the personal insolvency agreement in succession in the event of one or more of the trustees nominated declining to act or ceasing for any reason to hold the office of trustee. [subs (5) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(6) Property of the debtor that vests in 2 or more trustees of a personal insolvency agreement, whether nominated to hold the office jointly, or jointly and severally, vests in those trustees as joint tenants. [subs (6) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

*(7) In this section: trustee means registered trustee or Official Trustee. [subs (7) subst Act 44 of 1996 s 3 and Sch 1]

*(8) [subs (8) rep Act 44 of 1996 s 3 and Sch 1] SECTION 204 GENERALLY

[83,165.5] After-acquired property If creditors require the debtor to execute a deed of assignment the definitions in s 187(1) ensure that the property assigned does not include after-acquired property. “Divisible property” is given a specific meaning but only in relation to deeds of assignment. If the creditors require the debtor to execute a deed of arrangement, there is nothing in the Act excluding after-acquired property from the deed of arrangement: Re Leask and Trumbich; Ex parte Nelson (1986) 11 FCR 305; 66 ALR 487; but compare Re Marshall (1973) 22 FLR 71; Re Venetoulis; Ex parte Calsil Ltd (1976) 13 ALR 625. SECTION 204(1) [83,165.20] Generally The essence of a composition between the debtor and his or her creditors is that the creditors be offered equality of treatment: Re Milner; Ex parte Milner (1885) 15 QBD 605. However, so long as creditors act in good faith toward each other and make no secret bargains with any other creditor or the debtor, there can be no complaint about an agreement the effect of which is that the creditors agree between themselves for something other than the quality of treatment. Thus there can be no objection to creditors agreeing among themselves to payments being made to one or more of their class in priority over others so long as each is aware and nothing is done secretly or by way of private bargain: Re Jacobs; Ex parte O’Connor (1984) 1 FCR 1; 53 ALR 93. [83,165.25] “special resolution” “Special resolution” (see s 5) means a resolution passed by a majority in number and at least three-fourths in value of creditors present personally by attorney or by proxy at meeting of creditors and voting on resolution. The definition “special resolution” does not pose a subjective test, but on the proper construction of the section it appears to be that there is such a resolution as mentioned in the definition if in fact the requisite majority votes in favour and the matter is not made dependent upon the view of the chairman. Accordingly, the question to be determined is whether there was a vote by the requisite majority, not whether the chairman properly thought there was: Re Ogle; Ex parte Allen (1986) 14 FCR 172. [page 675] [83,165.30] Failure to present petition Failure by the debtor to lodge his or her own petition constitutes an act of bankruptcy by virtue of s 40(1)(l)(ii) upon which a bankruptcy petition could be founded. Alternatively, by virtue of s 221(1)(b) the court might if it thought fit on the application of a creditor or the controlling trustee forthwith make a sequestration order against the estate of the appellant: Pretorius v Daltons Carpet Tiles Pty Ltd (1984) 1 FCR 346; 54 ALR 743. [83,165.35] Validity of deed A deed of assignment, arrangement or a composition once executed is valid and subsisting until it is declared void and any declaration of voidness has a prospective effect only: Re Cohn (1954) 16 ABC 150; Bridge v Great Western Portland Cement & Lime Co Ltd (1932) 48 CLR 522; Re Cope (1947) 16 ABC 113; Re Dawson; Ex parte Dawson v Arthur Andersen (1985) 5 FCR 133; 59 ALR 355. [83,165.40] Specifying date for payment of composition sum If a composition fails to specify a date for payment of the composition sum, the court may nonetheless infer the requirement of payment within a reasonable time: Re Burns; Ex parte National Mutual Life Assn of Australasia Ltd (1992) 39 FCR 477; 117 ALR 174. Should the debtor fail to provide the funds within a reasonable time, the creditors may have resort to s 241 of the Act which entitles a meeting of creditors called for the purpose to terminate a composition where a debtor has failed to carry out or comply with a term of the composition: Re Burns; Ex parte National Mutual Life Assn of Australasia Ltd, above.

____________________ *Editor’s Note: Prior to substitution by Act 44 of 1996, s 204(7) and (8) read as follows: “(7) Where the creditors pass a special resolution or a resolution under this section (other than a resolution of a kind referred to in subsection 215A(1), the chairman of the meeting shall: (a) forthwith sign a certificate to that effect in accordance with the prescribed form; and (b) forthwith cause the certificate to be filed in the office of the Registrar. (8) If the chairman dies without having performed his duties under subsection (7), or fails to perform those duties, the trustee or the solicitor by whom the meeting was called, or the controlling trustee (if any) may sign and file, or file, as the case requires, the certificate referred to in that subsection.” These subsections still have relevance to bankruptcies commenced before 16 December 1996.

[83,170] Duties of sheriff after receiving notice of signing of authority under s 188 etc 205 (1) Subject to this section, where notice in writing of the signing by a debtor of an authority under section 188, of the calling of a meeting of creditors of a debtor in pursuance of this Division or of the passing of a special resolution under section 204 requiring a debtor to execute a personal insolvency agreement or present a debtor’s petition is given to a sheriff, the sheriff: (a) shall refrain: (i) from taking any action to sell property of the debtor in pursuance of any process of execution issued by or on behalf of a creditor; and (ii) from taking any action on behalf of a creditor to attach a debt due to the debtor; and (b) shall not: (i) pay to the creditor by whom, or on whose behalf, the process of execution was issued, or to any person on his or her behalf, the proceeds of the sale of property of the debtor that has been sold in pursuance of any such process or any moneys seized, or paid to avoid seizure or sale of property of the debtor, in pursuance of any such process; or (ii) pay to the creditor, or to any person on his or her behalf, any moneys received as a result of the attachment of the debt due

to the debtor. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) Where a notice is given under subsection (1) to a sheriff, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the sheriff a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (1) ceases to apply in relation to the process of execution or attachment, as the case may be. [subs (2) am Act 44 of 1996 s 3 and Sch 1]

[page 676] (3) Subject to this section, where notice in writing of the signing by a debtor of an authority under section 188, of the calling of a meeting of creditors of a debtor in pursuance of this Division or of the passing of a special resolution under section 204 requiring a debtor to execute a personal insolvency agreement or present a debtor’s petition is given to the registrar or other appropriate officer of a court: (a) to which the proceeds of the sale of property of the debtor or other moneys have been paid by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or (b) to which moneys have been paid in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor; any of those proceeds or moneys not paid out of court shall not be paid to the creditor or to any person on his or her behalf. [subs (3) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(4) Where a notice is given under subsection (3) to the registrar or other appropriate officer of any court, a creditor who has issued a process of execution, or on whose behalf a process of execution has been issued, against

property of the debtor, or who has taken action, or on whose behalf action has been taken, to attach a debt due to the debtor, in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section) may give to the registrar or other officer a written notice setting out details of the maintenance agreement or maintenance order, and, upon the giving of the notice, subsection (3) ceases to apply in relation to the process of execution or the attachment, as the case may be. [subs (4) am Act 44 of 1996 s 3 and Sch 1]

(5) Subsection (1) does not prevent the sheriff from selling property, taking action to attach a debt or paying the proceeds of the sale of property or other moneys to a creditor or a person on his or her behalf, and subsection (3) does not prevent moneys in court from being paid out of court to a creditor or a person on his or her behalf, if: (a) having received notice of the signing by the debtor of an authority under section 188, the sheriff, registrar or other officer does not, within 42 days from the date on which the debtor signed the authority, receive notice of the passing of a special resolution under section 204 requiring the debtor to execute a personal insolvency agreement or present a debtor’s petition; (b) having received notice that a meeting of creditors of the debtor has been called, the sheriff, registrar or other officer does not, within 7 days from the date for which the meeting was called, receive notice of the passing of a special resolution referred to in paragraph (a) or of the adjournment of the meeting; (c) having received notice of the adjournment of a meeting of creditors of the debtor, the sheriff, registrar or other officer does not, within 7 days from the date to which the meeting was adjourned, receive notice of the passing of a special resolution referred to in paragraph (a) or of the further adjournment of the meeting; or (d) having received notice of the passing of a such a special resolution referred to in paragraph (a), the sheriff, registrar or other officer does not, within 21 days from the date on which the resolution was passed, receive notice that the personal insolvency agreement required to be executed has been duly executed or that the debtor has presented a debtor’s petition.

[subs (5) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 677] (6) Where: (a) the sheriff, in pursuance of subsection (1) of this section or of subsection 119(1) or (2), refrains from taking action to sell property of a debtor (being real property), the debtor executes a personal insolvency agreement, and the property vests in the trustee of the agreement; or (b) a sheriff, in pursuance of subsection (1), refrains from taking action to sell property of a debtor (being real property), the debtor becomes a bankrupt and the property vests in the trustee in the bankruptcy; the costs of the execution are a first charge on that property. [subs (6) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(7) A failure by the sheriff to comply with a provision of this section does not affect the title of a person who purchases property of a debtor in good faith under a sale by the sheriff in pursuance of a process of execution issued by or on behalf of a creditor. [s 205 subst Act 12 of 1980 s 109] SECTION 205 GENERALLY [83,170.5] Maintenance agreements and orders remain enforceable Maintenance agreements or maintenance orders remain enforceable notwithstanding notice to the sheriff or to the court for the execution of an authority under s 188: see s 205(2) and (4). For the definition of “maintenance agreement” or “maintenance order”, see s 5.

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[83,175] Duties of sheriff after receiving notice of execution of personal insolvency agreement etc 205A (1) [subs (1) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] (2) [subs (2) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] (3) [subs (3) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(4) Subject to this section, where: (a) the sheriff is satisfied: (i) that a debtor has executed a personal insolvency agreement; and (ii) that: (A) property of the debtor in his or her possession under a process of execution issued by or on behalf of a creditor; or (B) proceeds of the sale of property of the debtor or other moneys in his or her possession, being proceeds of the sale of property sold, whether before or after the execution of the agreement, in pursuance of any such process or moneys seized, or paid to avoid seizure or sale of property of the debtor, whether before or after the execution of the agreement, in pursuance of any such process; or (C) moneys in his or her possession as a result of the attachment, by or on behalf of a creditor, of a debt due to the debtor; is not, or are not, subject to the the agreement; the sheriff shall deliver that property, or pay those proceeds or other moneys, as the case requires, to the debtor or to a person authorized by the debtor in writing for the purpose; or (b) the registrar or other appropriate officer of a court is satisfied: (i) that a debtor has executed a personal insolvency agreement; and (ii) that: (A) proceeds of the sale of property of the debtor or other moneys in court, being proceeds of sale or other moneys paid into court, [page 678] whether before or after the execution of the agreement,

by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or (B) moneys in court that have been paid into court, whether before or after the execution of the agreement, in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor; are not subject to the the agreement; the registrar or other officer shall pay those proceeds or other moneys, as the case requires, to the debtor or to a person authorized by the debtor in writing for the purpose. [subs (4) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(5) The sheriff, registrar or other officer of a court shall not, in pursuance of subsection (4): (a) in the case of the sheriff — deliver property or pay the proceeds of the sale of property or other moneys; or (b) in the case of the registrar or other officer — pay moneys in court; to the debtor or to a person authorized by the debtor unless: (c) 21 days have elapsed since the day on which the personal insolvency agreement was executed; and (d) the sheriff, registrar or other officer, as the case may be, is satisfied that application has not been made to the Court for an order to set aside or terminate the agreement or that the application, or each application, made for such an order has been withdrawn or dismissed. [subs (5) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(6) Subject to this section, where: (a) the sheriff is satisfied: (i) that a debtor has executed a personal insolvency agreement; and (ii) that: (A) property of the debtor in his or her possession under a process of execution issued by or on behalf of a creditor; or (B) proceeds of the sale of property of the debtor or other

moneys in his or her possession, being proceeds of the sale of property sold, whether before or after the execution of the agreement, in pursuance of any such process or moneys seized, or paid to avoid seizure or sale of property of the debtor, whether before or after the execution of the agreement, in pursuance of any such process; or (C) moneys in his or her possession as a result of the attachment, by or on behalf of a creditor, of a debt due to the debtor; is, or are, subject to the the agreement; the sheriff shall deliver that property, or pay those proceeds or other moneys, as the case requires, to the trustee of the agreement; or (b) the registrar or other appropriate officer of a court is satisfied: (i) that a debtor has executed a personal insolvency agreement; and (ii) that: (A) proceeds of the sale of property of the debtor or other moneys in court, being proceeds of sale or other moneys paid into court, whether before or after the execution of the agreement, by a sheriff in pursuance of a process of execution issued, by or on behalf of a creditor, against property of the debtor; or [page 679] (B) moneys in court that have been paid into court, whether before or after the execution of the agreement, in pursuance of proceedings instituted, by or on behalf of a creditor, to attach a debt due to the debtor; are subject to the the agreement; the registrar or other officer shall pay those proceeds or other moneys, as the case requires, to the trustee of the agreement.

[subs (6) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(7) The sheriff, registrar or other officer of a court shall not, in pursuance of subsection (6): (a) in the case of the sheriff — deliver property or pay the proceeds of the sale of property or other moneys; or (b) in the case of the registrar or other officer — pay moneys in court; to the trustee of the agreement unless; (c) 21 days have elapsed since the day on which the personal insolvency agreement was executed; and (d) the sheriff, registrar or other officer, as the case may be, is satisfied that application has not been made to the Court for an order to set aside or terminate the agreement or that the application, or each application, made for such an order has been withdrawn or dismissed. [subs (7) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(8) Where property is, or the proceeds of the sale of property or other moneys are, required by subsection (4) or (6) to be delivered or paid to the trustee of a personal insolvency agreement or to a debtor or a person authorized by the debtor, the costs of the execution or attachment, as the case may be, are a first charge on that property or those proceeds of sale or other moneys, as the case may be. [subs (8) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(9) For the purpose of giving effect to the charge referred to in subsection (8), the sheriff, registrar or other officer of a court may retain, on behalf of the creditor entitled to the benefit of the charge, such amount from the proceeds of sale or other moneys referred to in that subsection as he or she thinks necessary for the purpose. [subs (9) am Act 44 of 1996 s 3 and Sch 2]

(10) Where a sheriff, registrar or other officer of a court has, in pursuance of subsection (4) or (6), delivered property or paid moneys to the trustee of a personal insolvency agreement or to the debtor or a person authorized by a debtor, the creditor who issued the process of execution or instituted the attachment proceedings, or on whose behalf the process was issued or the proceedings instituted, as the case may be, may prove under the agreement as an unsecured creditor as if the execution or attachment, as the case may be, had not taken place.

[subs (10) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(11) [subs (11) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] (12) Where: (a) property has been delivered by a sheriff, or the proceeds of the sale of property or other moneys have been paid by a sheriff, registrar or other officer of a court: (i) to a debtor, or a person authorised by the debtor under subsection (4); or (ii) to the trustee of a personal insolvency agreement under subsection (6); and (iii) [repealed] (iv) [repealed] (b) the property was in the possession of the sheriff, or the proceeds of the sale of the property or the other moneys were in the possession of the sheriff or paid into [page 680] court, as the case may be, under or in pursuance of a process of execution issued, or proceedings to attach a debt instituted, by or on behalf of a creditor in respect of a liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this section); the trustee, debtor or other person, as the case may be, to whom the property has been delivered, or those proceeds or other moneys have been paid, shall deliver that property, or pay those proceeds or other moneys, as the case requires, to that creditor. [subs (12) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(13) A failure by a sheriff to comply with a provision of this section does not affect the title of a person who purchases property of a debtor in good faith under a sale by the sheriff in pursuance of a process of execution issued by or on behalf of a creditor. [s 205A insrt Act 12 of 1980 s 109]

[83,180] Court may adjourn hearing of petition where creditors have passed resolution for personal insolvency agreement 206 (1) Where: (a) a meeting of creditors has, in accordance with this Part, passed a special resolution requiring a debtor to execute a personal insolvency agreement; and (b) a creditor’s petition was presented against the debtor before the passing of the resolution or is presented against him or her after the passing of the resolution but before the agreement has been duly executed; the Court may, upon application by the debtor, a creditor or a person nominated as trustee of the proposed agreement, if it appears to the Court that it would be for the advantage of the creditors that the debtor’s affairs be administered under the agreement, adjourn the hearing of the petition for such period as it considers necessary to allow the agreement to be executed and, if the agreement is duly executed within that period, shall dismiss the petition. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) Where a creditor’s petition is presented against a debtor who has been required by special resolution of a meeting of creditors to execute a personal insolvency agreement, the creditor who presents the petition must, as soon as practicable, give notice in writing of that fact to the person who has been nominated as trustee of the agreement and to the Official Receiver. [subs (2) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 206 GENERALLY [83,180.5] General Section 206 operates before a deed has been executed whereas ss 222 and 236 operate after execution of the deed. Under the section it would be open to the court to exercise its power to ensure that a majority of the creditors do nothing unfair to the minority or to the debtor on the application of a creditor: Re Patrick Partners; Ex parte Commercial Banking Co of Sydney Ltd (1976) 10 ALR 71. There is no invariable practice to adjourn the hearing of a petition merely upon evidence that the debtor has executed an authority under s 188: Field v Commercial Banking Co of Sydney Ltd (1978) 22 ALR 403; 37 FLR 341. For matters to be taken into account in considering an application for adjournment consequent upon execution of an authority under s 188, see Field v Commercial Banking Co of Sydney Ltd, above, at 411.

____________________ [page 681]

[83,185] Surrender of security etc where secured creditor has voted 207 (1) Where a secured creditor has estimated the value of his or her security for the purposes of voting at a meeting of creditors at which a special resolution requiring the debtor to execute a personal insolvency agreement was passed: (a) he or she is not entitled to estimate the value of the security for the purposes of proving part of his or her debt under the agreement at any other amount except with the approval of the Court; and (b) he or she shall, upon request in writing by the trustee of a personal insolvency agreement executed in accordance with the special resolution, surrender the security upon payment of the amount at which he or she has estimated the value of his or her security for the purposes of voting or, if the Court has approved his or her estimating the value of his or her security at another amount under paragraph (a), upon payment of that other amount. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) The Court shall not grant its approval under paragraph (1)(a) unless it is satisfied that: (a) the estimate made for the purposes of voting was made in good faith on a mistaken basis; or (b) the value of the security has changed since that estimate was made. (3) Subject to subsection (4), where a secured creditor has voted at a meeting of creditors at which a special resolution referred to in subsection (1) was passed in respect of the whole of his or her debt without having surrendered his or her security: (a) he or she shall be deemed to have estimated his or her security as having no value; and

he or she shall, upon request in writing by the trustee of a personal (b) insolvency agreement executed in accordance with the special resolution, surrender the security. [subs (3) am Act 44 of 1996 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(4) The Court may, upon application by a secured creditor to whom subsection (3) applies, if it is satisfied that his or her failure to estimate the value of his or her security was due to inadvertence, upon such terms as the Court considers just and equitable: (a) relieve him or her from the obligation to surrender the security; and (b) permit him or her to estimate its value for the purposes of proving part of his or her debt under the personal insolvency agreement. [subs (4) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(5) Subject to subsection (4), if a creditor referred to in subsection (1) or (3) fails to comply with a request in writing under that subsection, the trustee by whom the request was made may apply to the Court for an order requiring the creditor to surrender the security to which the request related and the Court may make an order accordingly. (6) The right conferred on a secured creditor under section 90, as applied in relation to personal insolvency agreements, to realize his or her security and prove for the balance due to him or her is not exercisable where the trustee of such an agreement has requested the surrender of the security under this section. [subs (6) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 207 GENERALLY [83,185.5] Cross-references Sections 90–94 which relate to proofs of debt by secured creditors apply to deeds of assignment or arrangement and compositions: see ss 231, 237 and 243. [page 682] [83,185.10] Amendment of proof of debt Section 92, in so far as it is made applicable to the provisions of Pt X by s 243, is to be read in the context of the various provisions which make up the framework of Pt X permitting arrangements between creditors and debtors without sequestration. Consequently the words “at any time” are not intended to give a secured creditor an unlimited right to apply to the court to amend a proof of debt particularly when the effect of a successful application after a composition has been completed would be to alter vested rights obtained by debtors and creditors on completion of the composition: Re Westpac Bank v Morton (1988) 79 ALR 206.

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[83,190] Termination of control of debtor’s property by the Court 208 The Court may make an order releasing the debtor’s property from control under this Division if: (a) an interested person applies to the Court for such an order; and (b) the Court is satisfied that special circumstances justify it making the order. [s 208 subst Act 44 of 1996 s 3 and Sch 1] SECTION 208 GENERALLY [83,190.5] Special circumstances For a case where the court released property from control under the division in the light of special circumstances, see Re Alty; Ex parte Muir (1985) 9 FCR 190. See also Laurence v Mulroney (1987) 15 FCR 268; 82 ALR 404.

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[83,195] Acts of controlling trustee to bind trustee of subsequent personal insolvency agreement or bankruptcy 209 Where: (a) a debtor signs an authority under section 188; and (b) subsequently a personal insolvency agreement is entered into by the debtor or the debtor becomes a bankrupt; all payments made, acts and things done, transactions entered into and liabilities incurred by the controlling trustee in good faith in exercise of his or her powers under this Part are binding on the trustee of the personal insolvency agreement or in the bankruptcy, as the case may be. [s 209 am Act 44 of 1996 s 3 and Schs 1, 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,200] Other provisions about controlling trustee 210 Part VIII, with any modifications prescribed by the regulations, applies in relation to the controlling trustee in relation to a debtor as if:

(a) the debtor were a bankrupt; and (b) the controlling trustee were the trustee of the estate of the bankrupt debtor. [s 210 subst Act 44 of 1996 s 3 and Sch 1] SECTION 210 GENERALLY [83,200.5] Modifications See reg 10.07.

____________________ [page 683]

[83,205] Other provisions about debtor 211 (1) Sections 77, 77A, 77C, 77D, 77E, 77F, 78 (other than paragraphs 78(1)(a), (b) and (c)) and 81, with any modifications prescribed by the regulations, apply in relation to a debtor whose property is subject to control under this Division as if: (a) the debtor were a bankrupt; and (b) the controlling trustee were the trustee of the estate of the bankrupt debtor. (2) Section 78 (other than paragraphs 78(1)(d) and (f)), with any modifications prescribed by the regulations, applies in relation to a debtor whose property is subject to control under this Division as if the debtor were a debtor against whom a bankruptcy notice has been presented. [s 211 insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,210] Court may order controlling trustee to make good loss caused by breach of duty 212 [s 212 rep Act 44 of 1996 s 3 and Sch 1]

[83,215] Appeal to the Court against controlling trustee’s decision etc

212A [s 212A rep Act 44 of 1996 s 3 and Sch 1]

[83,220] Control of controlling trustee by the Court 212B [s 212B rep Act 44 of 1996 s 3 and Sch 1]

DIVISION 2A — EXAMINATION OF CONTROLLING TRUSTEES AND OTHER PERSONS [Repealed] [Div 2A rep Act 44 of 1996 s 3 and Sch 1]

DIVISION 3 — GENERAL PROVISIONS

[83,335] Arrangements by debtor with creditors otherwise than in accordance with this Part etc to be void 213 [s 213 rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 213 GENERALLY [83,335.1] Generally In Watson v CGU Insurance Ltd [2008] NSWSC 1409; BC200811613, McDougall J in the course of giving judicial advice (as it is known in NSW) stated at [15] that arrangements, being without separate authority were void. As in this particular case (as to which see [83,375.5]), a Deed of Arrangement operated with a separate source of authority which fell to be dealt with under s 219.

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[83,340] Form etc of deeds 214 [s 214 rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [page 684]

[83,345] Eligibility to be trustee of personal insolvency agreement 215 Only a registered trustee or the Official Trustee can be a trustee of a personal insolvency agreement. [s 215 subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 215 GENERALLY [83,345.5] Definition For the definition of registered trustee, see s 5.

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[83,350] Nomination or appointment of trustee of personal insolvency agreement

*215A (1) A resolution that is passed at a meeting of creditors and purports to: (a) nominate one or more persons under subsection 204(3) to be a trustee or trustees; or (b) appoint a person under subsection 220(1) to a vacant office of trustee of a personal insolvency agreement; is void unless the person or each of the persons gave written consent before the meeting to act as a trustee of the agreement. [subs (1) subst Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(1A) As soon as possible after the resolution is passed, each person (except the Official Trustee) nominated or appointed by the resolution must give to the Official Receiver a copy of the consent that relates to that person. [subs (1A) insrt Act 44 of 1996 s 3 and Sch 1]

(2) Where, if this subsection had not been enacted, a resolution purporting to nominate a person or persons, or to appoint a person, would, because of a particular matter, be void by virtue of subsection (1), the Court may, on the application of the person, or of any of the persons, as the case may be, or of any other interested person, by order declare the resolution not to be void merely because of that matter. (3) Before a resolution is passed at a meeting of creditors that nominates one or more persons under subsection 204(3) to be a trustee or trustees: (a) the person or each of those persons must make a written declaration stating whether the debtor is a related entity of: (i) the person concerned; or (ii) a related entity of the person concerned; and (b) the person or each of those persons must: (i) give his or her declaration to the controlling trustee; and (ii) keep a copy of his or her declaration; and (c) the controlling trustee must table at the meeting a copy of each declaration given to the controlling trustee; and (d) the controlling trustee must give a copy of each such declaration to each of the creditors at the same time as the controlling trustee gives a copy of the subsection 189A(1) report to each creditor. [subs (3) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 685] (4) Before a resolution is passed at a meeting of creditors that appoints a person under subsection 220(1) to a vacant office of trustee of a personal insolvency agreement: (a) the person must make a written declaration stating whether the debtor is a related entity of: (i) the person; or (ii) a related entity of the person; and (b) the person must: (i) give his or her declaration to the person presiding at the meeting; and (ii) keep a copy of his or her declaration; and (c) the person presiding at the meeting must table at the meeting a copy of the declaration. [subs (4) insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [s 215A insrt Act 119 of 1987 s 76] SECTION 215A GENERALLY [83,350.5] Form of consent See Approved Form 12.

____________________ *Editor’s Note: Subsection 215A(1) as it stood prior to substitution can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney, 1996 ed at [83,350]. The new subs 215A(1) applies only to resolutions at a meeting held after 16 December 1996 except: (a) where notice of the meeting was given before this date; or (b) a meeting described in (a) that was adjourned and is continued.

[83,355] Duties of chairman 215B [s 215B rep Act 44 of 1996 s 3 and Sch 1]

[83,360] Execution of personal insolvency agreements

216 (1) A personal insolvency agreement must be executed by the debtor and the trustee within 21 days from the day on which the special resolution requiring the debtor to execute the agreement was passed. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) The execution of the agreement by the debtor and by the trustee shall be attested by a witness. [subs (2) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 216 GENERALLY [83,360.5] Witness A party to a deed is incompetent as an attesting witness: Calse v Claridge (1881) 7 QBD 516. [83,360.10] Time for attestation The necessary implication in s 216(2) is that the attestation must take place forthwith on execution by the debtor and trustee but it is possible to have the time for attestation of a deed extended: Re Lawrence; Ex parte Burns (1985) 9 FCR 9; 70 ALR 221. See also s 33(1)(c) (power of the court to extend time) and Re Gagliardi; Ex parte Mount (1984) 57 ALR 718. In Joiner v Bailey [2004] FCA 1411; BC200407286, Kiefel J concluded that the word “execution” in s 216(2) is clearly referable to the signing of the deed, while the meaning of the word “executed” in subs (1) may be wider. In this case a debtor had earlier signed a Deed of Assignment, but following a meeting of credits she indicated that her solicitor should sign the deed, presumably as a witness. Her Honour said at [9]: [9] In the present case it seems to me that until the meeting with Mr Joiner after the creditors meeting the respondent was not legally bound to the Deed of Assignment which she had earlier executed, in the sense that she could revoke her agreement to assign. Her agreement that Mr Joiner should then sign carried with it her own approval. She effectively ratified her agreement. The execution of the deed was then effective so far as concerned her. In these circumstances it [page 686] may be said that the respondent executed the Deed of Assignment in the period referred to in s 216(1). Certainly such an approach would not seem to me to cut across the objects of the section.

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[83,365] Failure of trustee to execute personal insolvency agreement 217 (1) Where a personal insolvency agreement is not executed, as required by section 216, by the registered trustee, or a registered trustee, nominated in a resolution of a meeting of creditors under section 204 to be the trustee, or a trustee, as the case requires, of the agreement, a meeting of

creditors called for the purpose, in accordance with the regulations, by any creditor or the debtor may, by resolution, nominate any other registered trustee in the place of that registered trustee. [subs (1) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) If the agreement is not executed by the registered trustee so nominated within 7 days from the date on which the resolution was passed or within such further period as the Court, on application made before the expiration of that period of 7 days, allows, the Court may, upon application by a creditor, nominate any registered trustee who is prepared to accept the office to be trustee in the place of the registered trustee who did not execute the agreement as required by section 216. [subs (2) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(3) A registered trustee so nominated by the Court shall execute the agreement within 7 days from the date on which the trustee was so nominated or within such further period as the Court, on application made before the expiration of that period of 7 days, allows. [s 217 subst Act 12 of 1980 s 114; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 217 GENERALLY [83,365.5] Cross-reference For power to extend time, see s 33.

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[83,370] Notice of execution of personal insolvency agreement 218 (1) The trustee of a personal insolvency agreement entered into in pursuance of this Part shall: (a) notify each creditor of the debtor as soon as practicable after the debtor and the trustee have executed the agreement; and (b) within 2 days after the execution of the agreement by the debtor and the trustee — file a copy of the agreement in the office of the Official Receiver. [subs (1) am Act 119 of 1987 s 77; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 106 of 2010 s 3 and Sch 2[45], opn 1 Dec 2010]

(2) The trustee commits an offence if the trustee fails to comply with a requirement under paragraph (1)(b).

Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (2) insrt Act 106 of 2010 s 3 and Sch 2[46], opn 1 Dec 2010]

(2A) Subsection (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (2A) insrt Act 106 of 2010 s 3 and Sch 2[46], opn 1 Dec 2010]

[page 687] (3) A trustee must notify creditors under paragraph (1)(a) in the way prescribed by the regulations. [subs (3) insrt Act 44 of 1996 s 3 and Sch 1; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 218 GENERALLY [83,370.5] Cross-references Notifying creditors: see reg 10.09.

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[83,375] Trustee may sue, be sued etc by official name 219 (1) The trustee of a personal insolvency agreement entered into in pursuance of this Part may sue and be sued by the prescribed official name and may, by that name, hold, dispose of or acquire property of every description, make contracts, enter into engagements binding on the trustee and his or her successors in office and do all other acts and things necessary or expedient to be done in the execution of the office of trustee. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) For the purposes of subsection (1), the prescribed official name is “The Trustee (or Trustees) of the Property of (name of debtor), a Debtor”. SECTION 219 GENERALLY [83,375.5] Termination In Watson v CGU Insurance Ltd [2008] NSWSC 1409; BC200811613 McDougall J in the course of giving judicial advice (as it is known in NSW) stated at [14]: [14] Section 219 is directed to equipping a trustee with powers that are necessary or desirable for the execution of the trusts created by a deed of arrangement. Once those trusts have terminated (because the deed has terminated) there is no reason for the statutory powers to continue to be available to

such a trustee. It follows that, on its proper construction, s 219 did not authorise someone who was a trustee of a deed of arrangement to exercise the powers set out in the subsection once that deed of arrangement has terminated. [15] If Mr Watson were to be able to maintain these proceedings notwithstanding termination of the deed of arrangement, it would amount to the execution of some private arrangement outside the scheme authorised by Pt X. That would be inconsistent with the clear underlying purpose of Pt 10 — that arrangements and the like should be public, not private — and would be avoided by s 213. So far as it is relevant, s 213 provides: Arrangements by debtor with creditors otherwise than in accordance with this Part etc to be void 213 (1) Subject to this Part, a deed of assignment or a deed of arrangement executed by a debtor after the commencement of this Act is void unless: (a) it is entered into in accordance with this Part; and (b) it complies with the requirements of this Part. (2) An instrument not under seal executed by a debtor after the commencement of this Act which, if it had been under seal, would have been a deed of assignment or a deed of arrangement is void. [16] That is not necessarily the end of the matter. Clause 4 of the deed authorised Mr Watson (in his capacity as ‘Trustee’) to get in and realise the assigned property. That is an independent source of power to institute and maintain these proceedings. But that power, being one given by the deed, does not survive its termination. [17] Termination of the deed did not (for reasons I give later) divest Mr Watson of any property held by him as ‘Trustee’ pursuant to the deed. But it may, and in my view does, affect both the identification of those entitled to the beneficial interest in any such property (or in the fruits of its realisation) and Mr Watson’s powers as a ‘trustee’ after termination. There is then (after [page 688] termination) no trust instrument authorising a continuation of proceedings, and no other source of power to do so (s 219 being unavailable for the reasons that I have given). [18] For those reasons, Question 1 should be answered ‘no’. His Honour’s judgment, particularly at [17], sets out both the problem and the solution.

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[83,380] Filling of vacancy in office of trustee after execution of personal insolvency agreement etc 220 (1) Where a vacancy occurs in the office of trustee of a personal insolvency agreement entered into under this Part, a meeting of creditors

called for the purpose may, by resolution, appoint a registered trustee to the vacant office. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) Where, at any time, a vacancy exists in an office of trustee of such a personal insolvency agreement, the Court may, on the application of the debtor, a creditor or an Official Receiver: (a) appoint to the vacant office a registered trustee who is willing to accept the appointment; or (b) appoint the Official Trustee or a registered trustee, being a registered trustee who is willing so to act, to act as trustee until the vacant office is filled by a meeting of creditors. [subs (2) am Act 12 of 1980 s 116; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(3) The appointment of a trustee to a vacant office of trustee by a meeting of creditors shall be deemed to have taken effect as from the date on which the vacancy in the office occurred, except where the Official Trustee or a registered trustee has been appointed to act as trustee under paragraph (2)(b), in which case the appointment takes effect on the date on which it is made. [subs (3) am Act 12 of 1980 s 116]

(4) The appointment of a registered trustee to a vacant office of trustee by the Court shall be deemed to have taken effect as from the date on which the vacancy in the office occurred. (5) Where, under this section, the Official Trustee or a registered trustee is appointed to an office of trustee or to act as trustee: (a) all property to which the personal insolvency agreement relates that is vested in the former trustee, alone or jointly with another trustee, shall, subject to subsection (6), vest in the Official Trustee or that registered trustee, as the case may be, alone or jointly with any continuing trustee, as the case may be, without any conveyance, assignment or transfer, as from the date on which the appointment takes effect or is deemed to have taken effect; and (b) the Official Trustee or that registered trustee, as the case may be, has the same rights, powers, duties and liabilities as if the Official Trustee or that registered trustee, as the case may be, had been an original trustee, but is not personally liable in respect of any act done, omission made or liability incurred by a prior trustee.

[subs (5) subst Act 12 of 1980 s 116; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(6) 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 a trustee so appointed to be registered as the owner of any such property to which the personal insolvency [page 689] agreement relates, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not vest in the trustee at law until the requirements of that law have been complied with. [subs (6) subst Act 12 of 1980 s 116; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 220 GENERALLY [83,380.5] Court’s power to act on report Under s 220(2) the court is only empowered to act upon the report of the registrar or an application by the debtor, a creditor or an official receiver but not that of an existing trustee although it is possible that the court in that situation could act of its own accord pursuant to s 30 of the Act: Muir v Bradley (1984) 57 ALR 155.

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[83,385] Sequestration order where debtor fails to attend meeting, execute personal insolvency agreement etc 221 (1) Where: (a) a debtor has failed, without sufficient cause, to attend a meeting of creditors called under an authority signed by him or her under section 188; (aa) a debtor has contravened subsection 189(2); (b) a debtor, having been required by a special resolution of a meeting of creditors called in pursuance of such an authority to execute a personal insolvency agreement, has failed without sufficient cause to execute the agreement within the time prescribed by this Act; or (c) a meeting of creditors called in pursuance of such an authority has not, within 4 months from the date for which the meeting was

called, passed one of the special resolutions referred to in subsection 204(1); the Court may, if it thinks fit, on the application of the Inspector-General, a creditor or the controlling trustee, forthwith make a sequestration order against the estate of the debtor. [subs (1) am Act 119 of 1987 s 78; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) The Court may, if it thinks fit, dispense with service on the debtor of notice of an application under this section, either unconditionally or subject to conditions. (3) Subject to subsection (4), the making of an application under this section in respect of a debtor shall, for the purposes of this Act, be deemed to be equivalent to the presentation of a creditor’s petition against the debtor. (4) The provisions of subsection 43(1), sections 44 and 47, subsections 52(1) and (2) and Part XIA do not apply in relation to an application under this section, but, on the hearing of such an application, the Court shall require proof (which may be given by affidavit) of the matters stated in the application and, unless service has been dispensed with by the Court, of service of the application on the debtor. [subs (4) am Act 122 of 1970 s 10]

[83,385A] Variation of personal insolvency agreement 221A (1) Variation by special resolution of creditors The creditors, with the written consent of the debtor, may vary a personal insolvency agreement by special resolution at a meeting called for the purpose. (2) Variation by trustee The trustee, with the written consent of the debtor, may, in writing, propose a variation of a personal insolvency agreement. (3) The trustee must give notice of the proposed variation to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors. [page 690]

(4) 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 date (at least 14 days after the notice is given) from which it is proposed that the variation will take effect; 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. (5) 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. (6) A certificate signed by the trustee stating any matter relating to a proposed variation under subsection (2) is prima facie evidence of the matter. [s 221A insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,390] Court may set aside personal insolvency agreement 222 (1) Setting aside on grounds of unreasonableness etc If a personal insolvency agreement is in force, the Court may, on application by: (a) the Inspector-General; or (b) the trustee; or (c) a creditor; make an order setting the agreement aside if the Court is satisfied that: (d) the terms of the agreement are unreasonable or are not calculated to benefit the creditors generally; or (e) for any other reason, the agreement ought to be set aside. (2) Setting aside on grounds of non-compliance with this Part etc If a personal insolvency agreement is in force, the Court may, on application by: (a) the Inspector-General; or (b) the trustee; or (c) a creditor; or (d) the debtor; make an order setting the agreement aside if the Court is satisfied that:

(e) the agreement was not entered into in accordance with this Part; or (f) the agreement does not comply with the requirements of this Part. (3) The Court must not make an order setting aside a personal insolvency agreement on the ground that it does not comply with the requirements of this Part if the agreement complies substantially with those requirements. (4) The Court must not make an order under subsection (2) unless the application for the order is made before all the obligations that the personal insolvency agreement created have been discharged. (5) Setting aside on grounds of false or misleading information etc If a personal insolvency agreement is in force, the Court may, on application by: (a) the Inspector-General; or (b) the trustee; or (c) a creditor; make an order setting the agreement aside if the Court is satisfied that: (d) the debtor has given false or misleading information in answer to a question put to the debtor with respect to any of the debtor’s conduct or examinable affairs at the meeting of creditors at which the resolution requiring the debtor to execute the agreement was passed; or [page 691] (e) the debtor has: (i) omitted a material particular from the statement of the debtor’s affairs given under subsection 188(2C) or (2D); or (ii) included an incorrect and material particular in that statement; or (f) the debtor was subject to a requirement under subsection 194A(3) to table a statement, and the debtor has: (i) omitted a material particular from that statement; or (ii) included an incorrect and material particular in that statement; or (g) the controlling trustee has:

(i)

omitted a material particular from the declaration given by the controlling trustee under subsection 189A(3); or (ii) included an incorrect and material particular in that declaration; or (h) the controlling trustee was subject to a requirement under subsection 194A(5) to table a statement, and the controlling trustee has: (i) omitted a material particular from that statement; or (ii) included an incorrect and material particular in that statement; or (i) a person who became the trustee of the agreement has: (i) omitted a material particular from the declaration given by the person under subsection 215A(3) or (4); or (ii) included an incorrect and material particular in that declaration. (6) The Court must not make an order under subsection (5) unless it is satisfied that it would be in the interests of the creditors to do so. (7) The Court must not make an order under subsection (5) unless the application for the order is made before all the obligations that the personal insolvency agreement created have been discharged. (8) Ancillary orders If the Court makes an order under subsection (1), (2) or (5), the Court may make such other orders as the Court thinks fit. (9) An order under subsection (8) may be an order directing a person to pay another person compensation of such amount as is specified in the order. This subsection does not limit subsection (8). (10) Application for sequestration order The trustee or a creditor may include in an application under subsection (1), (2) or (5) an application for a sequestration order against the estate of the debtor. If the Court, on the firstmentioned application, makes an order under this section setting the personal insolvency agreement aside, it may, if it thinks fit, immediately make the sequestration order sought. (11) The making of an application by the trustee or a creditor for a sequestration order under this section is taken, for the purposes of this Act, to be equivalent to the presentation of a creditor’s petition against the debtor, but the provisions of subsection 43(1), sections 44 and 47, subsections 52(1)

and (2) and Part XIA do not apply in relation to such an application. (12) Court may dispense with service on debtor of notice of application The Court may, if it thinks fit, dispense with service on the debtor of notice of an application by the Inspector-General, the trustee or a creditor under this section, either unconditionally or subject to conditions. [s 222 subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 692] SECTION 222 GENERALLY [83,390.1] Legislative history With the assistance of Flick J’s decision in Moran v Robertson [2012] FCA 371; BC201202149 it is possible to understand the reasons, and hence the purpose of the present section: [13] Section 222 in its present form, it may further be noted, was introduced by way of amendment in 2004 by the Bankruptcy Legislation Amendment Act 2004 (Cth). The section is an amalgamation of the powers of the court previously conferred by the former ss 222 and 239. Prior to its amendment, the former s 222 provided as follows: (1) Where there is a doubt, on a specific ground, whether a deed of assignment or a deed of arrangement was entered into in accordance with this Part or complies with the requirements of this Part, or whether a composition has been accepted by a special resolution of a meeting of creditors under s 204, the Inspector-General, the trustee, a creditor or the debtor may apply to the Court for an order under subsection (2). (2) Upon the hearing of an application made under subsection (1), the Court may, subject to this section, make an order: (a) declaring that the deed or composition is void, or that it is not void, on the ground specified in the application; or (b) declaring that a provision of the deed is void, or is not void, on the ground specified in the application. (3) The Court shall not make an order declaring a deed to be void on the ground that it does not comply with the requirements of this Part if the deed complies substantially with those requirements. (4) Where the Court, on the application of the Inspector-General, the trustee or a creditor, is satisfied that the debtor: (a) has given false or misleading information in answer to a question put to him or her with respect to any of his or her conduct or examinable affairs at the meeting of creditors at which the resolution requiring him or her to execute the deed or accepting the composition was passed; or (b) has omitted a material particular from the statement of the debtor’s affairs given under subsection 188A or included an incorrect and material particular in that statement; the Court may make an order declaring the deed or composition to be void or declaring any provision of the deed or composition to be void.

(5) The Court shall not make an order declaring a deed or composition, or a provision of a deed or composition, to be void on a ground specified in subsection (4) unless it is satisfied that it would be in the interests of the creditors to do so. (6) The Court shall not make an order under subsection (2) or (4) unless the application for the order is made: (a) in relation to a deed of assignment — before the final dividend has been paid under the deed; (b) in relation to a deed of arrangement — before the terms of the deed have been carried out; or (c) in relation to a composition — before the final payment has been made under the composition. (7) The trustee of a creditor may include in an application under subsection (1) or (4) an application for a sequestration order against the estate of the debtor and if the Court, on the firstmentioned application, makes an order under subsection (2) or (4) declaring the deed or composition to which it relates to be void, it may, if it thinks fit, forthwith make the sequestration order sought. (8) The Court may, if it thinks fit, dispense with service on the debtor of notice of an application by the trustee or a creditor under this section, either unconditionally or subject to conditions. (9) The making of an application by the trustee or a creditor for a sequestration order under this section shall, for the purposes of this Act, be deemed to be equivalent to the [page 693] presentation of a creditor’s petition against the debtor, but the provisions of subsection 43(1), sections 44 and 47, subsection 52(1) and (2) and Part XIA do not apply in relation to such an application. And the former s 239(2) provided as follows: If the Court, on such an application, considers that the terms of the composition are unreasonable or are not calculated to benefit the creditors generally or that for any other reason the composition ought to be set aside, it may make an order setting it aside and, if it thinks fit, may forthwith make the sequestration order sought. [14] Both the former s 239(2) and the current s 222(1)(d) direct attention to “the terms of” either “the composition” or “the agreement”. [15] When addressing the terms of the former s 239 and the importance of consideration being given to “the terms of the composition”, Lockhart and Hill JJ in Khera v National Australia Bank Ltd (1996) 71 FCR 133 at 146 observed: Turning to s 239 concerning compositions. Although at first sight the grounds on which the Court may set aside a composition under s 239(2) are wide, upon closer examination they relate in my opinion to matters that concern the terms of the composition itself, that is to say facts which were in existence (whether known or not) at the time of the passing of the special resolution of creditors to accept the composition under Pt X. The Court may set aside the composition if it considers “that the terms of the composition are unreasonable”. This plainly centres attention upon the terms of the composition itself. The Court may set aside a composition if the terms of the composition “are not calculated to benefit creditors generally”. Again attention is centred upon the terms of the

composition. Then follows the third ground “for any other reason the composition ought to be set aside”. In our opinion this ground, despite the width of its language, is confined to circumstances which relate to the terms of the composition itself or the circumstances in which the composition came to be accepted by special resolution of the creditors. To an extent these grounds may overlap with the grounds on which the Court may declare a composition void under s 222. That does not militate against the construction of s 239(2) which appeals to us. Tamberlin J agreed: (1996) 71 FCR at 147. [16] After referring to the “overlap” between those matters previously set forth in ss 239(2) and 222, Merkel J in Re Mills; Ex parte Lloyd’s (1997) 73 FCR 551 at 559 to 561 helpfully summarised as follows the factors that may inform the exercise of the discretionary power: In that regard a number of factors are relevant to the exercise of the power to declare a composition void under s 222 or to set it aside under s 239. The factors are: (a) Whether, after considering all the circumstances of the case, a greater opportunity to inquire into the debtor’s affairs and a more comprehensive explanation by the debtor were called for… (b) If circumstances arise which “give cause for a suspicion” or to “arguable” causes of action which may benefit creditors then that can suffice to set aside the composition: see Mendelson at p 33. It is not necessary to establish that the creditors will be, or even are more likely to be, advantaged by bankruptcy rather than the composition. It is sufficient if bankruptcy will afford: a prospect or possibility of economic advantage to creditors sufficient to justify the conclusion that it is in their interests to make the declaration.” per Jenkinson J in Augustyn v Putnin (1988) 83 ALR 514 at 515. … (c) If the amount offered under the composition is little or trivial there may be no harm of any consequence to creditors for the composition to be set aside if other factors warrant that course… (d) A Court may be more disposed to set aside a composition if no payments to creditors have been made pursuant to the composition… [page 694] (e) A composition passed, inter alia, on the basis of a report to creditors as to the debtor’s financial affairs which is misleading will also be a relevant factor… These factors remain equally apposite to the exercise of the discretionary power now conferred by s 222 in its present form. [17] It is not understood that Merkel J in Re Mills was attempting to exhaustively set forth the factors to be taken into account or to indicate that any one or other of the factors mentioned would be conclusive as to the manner in which the power was to be exercised. To the list of factors summarised by His Honour may be added the following (to the extent that they are not already included within His Honour’s summary), namely:

whether creditors who have voted in favour of a proposed insolvency agreement have indicated that they would not participate in any distribution of assets and, to the extent that it is known, the reasons for their non-participation; and whether the controlling trustee recommends the acceptance or rejection of the proposed insolvency agreement and the factual basis for that recommendation. [18] Although it may thus be accepted that: consideration can be given to the amount payable pursuant to a personalised insolvency agreement as compared to the debt; it is equally well accepted, albeit less frequently mentioned, that: such a consideration is but one of the factors to be taken into account. [83,390.2] “A trivial amount offered to the composition…” “in the interests of the creditors” In Moran v Robertson [2012] FCA 371 at [19]–[24]; BC201202149, Flick J went on to deal with this consideration in detail, having laid the statutory background. His Honour quite rightly emphasized, firstly, that the legal history heavily influenced the relief available under the section, and secondly, that that relief was influence by discretionary grounds. [83,390.5] Ground not specified In George v DCT (2004) 212 ALR 495; 57 ATR 450 Stone J had to deal with an appeal which sought, inter alia, to set aside a magistrate’s decision because the grounds were not specified in the application itself and therefore the court’s power to make a declaration in accordance with s 222(2)(a) that the deed of assignment was void “on the ground specified in the application”. At the time the cause of action arose subs (2)(a) read as follows: (2) Upon the hearing of an application made under subsection (1), the Court may, subject to this section, make an order: (a) declaring that the deed or composition is void, or that it is not void, on the ground specified in the application; or … His Honour, who also dealt with the nature of an appeal from the Magistrate’s Court (as to which see below) rejected that argument. Although he was dealing with a section that has since been replaced, his interpretation would operate equally well on the construction of the section as it now is, and analogous sections elsewhere in the Bankruptcy Act: [16] The appellant’s submission ascribes a very narrow meaning to the word, “application” as used in s 222. I am not aware of any authority on the point and the appellant did not refer to any. In the absence of binding authority I do not regard the interpretation as sustainable. The requirement that the ground for relief under s 222 be specified appears to be designed to ensure that the argument for and against the claim can be clearly understood and sharply focussed. In Tickner v Chapman (1995) 57 FCR 451 at 480; 133 ALR 226 at 255, Burchett J commented that in considering the meaning of the word, “specify” in a variety of contexts, courts “have treated it as a strong word”. Burchett J referred to his judgment in Gantry Acquisition Corp v Parker & Parsley Petroleum Australia Pty Ltd (1994) 51 FCR 554 at 569–70; 123 ALR 29 at 43; 14 ACSR 11 at 27 where, referring to “specify” as “a word which signifies precision”, his Honour said: Judicial attempts to expound the meaning of the word “specify” have repeatedly fixed upon unambiguous clarity as being connoted by it: Re Green’s Will Trusts [1985] 3 All ER 455; Re

[page 695] Paddle River Construction Ltd (1961) 35 WWR 605 at 618; A v B [1969] NZLR 534 at 536; Bond Corporation Holdings Ltd v Sulan (1990) 3 WAR 49 at 64. See also Re Karounos; Ex parte Official Trustee in Bankruptcy (1989) 25 FCR 177 at 181 per Sheppard J. In Jolly v Yorketown District Council (1968) 119 CLR 347 at 351, Barwick CJ and Owen J equated “specify” with “state in explicit terms”, a sense closely corresponding with that adopted by Kitto J in the same case at 352 and by Higgins J in his dissenting judgment in Federated Engine-Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Ltd (1913) 16 CLR 245 at 284–5. [17] In my view it is required that the basis of any claim for relief under s 222(1) be particular rather than general, explicit rather than implied and precise rather than indeterminate. I do not, however, see that it is required that a narrow, technical meaning be ascribed to the term, “application” such that it applies only to one of the documents that are required under the Federal Magistrates Court Rules to commence proceeding in that court. [83,390.7] material particular See [81,315ZA.5] Westpac Banking Corporation v Dixon [2011] FMCA 211; BC201104359. [83,390.10] Nature of appeal from a magistrate under s 25(1A) of the Federal Court of Australia Act 1976 Stone J in George v DCT (2004) 212 ALR 495; 57 ATR 450 held at [11] and [12] that the appeal from a magistrate was analogous to an appeal from a single judge to the full bench and was therefore by way of rehearing: [11] Section 24(1)(d) of the Federal Court [of Australia] Act [1976] extends the appellate jurisdiction of this court to judgments of the Federal Magistrates Court … [Section] 25(1A) of the Federal Court Act provides that, at the direction of the Chief Justice, a single judge may exercise the court’s appellate jurisdiction in such an appeal, but otherwise the Federal Court Act makes no distinction between an appeal from the Federal Magistrates Court and an appeal from a judge of this court. It is well settled that an appeal from a single judge of this court to a Full Court is an appeal by way of rehearing: Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 533; 178 ALR 421 at 439; 65 ALD 1 at 19 (Jia). It follows that an appeal from a Federal Magistrate is also an appeal by way of rehearing: Low v Commonwealth [2001] FCA 702; BC200103022 at [3]; WAJR v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 204 ALR 624 at 628. [12] On an appeal by way of rehearing the appellate court may draw inferences of fact from the evidence before the primary judge and has a discretion to allow the parties to adduce additional evidence: CDJ v VAJ (1998) 197 CLR 172 at 199, 201–2; 157 ALR 686 at 707–8, 710 per McHugh, Gummow and Callinan JJ. In Allesch v Maunz (2000) 203 CLR 172 at 180–1; 173 ALR 648 at 653– 4, the majority of the High Court (Gaudron, McHugh, Gummow and Hayne JJ) held that in an appeal by way of rehearing: … the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error but, where such an error is established, the appellate court: … can substitute its own decision based on the facts and the law as they then stand.

[83,390.14] Creditor The standing of a “creditor” to apply under s 222 requires proof of a claimed indebtedness, or only proof that the applicant lost a proof of debt with the controlling trustee and was admitted to vote. In Re Beard v Prestige Baking Industries Pty Ltd (1981) 36 ALR 307; 52 FLR 384 at FLR 404 Fox J suggested in relation to s 222 in its then terms, that “creditor”: is used in a wide sense, probably to include any creditor who could prove in bankruptcy … It is undoubtedly competent for the court to examine in close detail, definitively if necessary, [page 696] whether a person claiming to be a creditor for the purposes of the section is one … What has to be decided … will depend upon the circumstances of the case. At 410–411, Lockhart J explained why “Definitive rules cannot be laid down as to how the court determines these questions as the possibilities that may arise are so variable”. Smith FM in Robertson v Moran [2011] FMCA 496; BC201105307 at [12] after quoting the above passages applied his recent judgment in National Australia Bank Ltd v Cranney [2011] FMCA 169; BC201101611 at [32]–[35], to impose a more stringent or demanding test. On a careful examination of the deeds the court concluded that references containing the possible future substitution of contractual parties or changes in their capacities were not a barrier to recognise the particular party concerned as a creditor and, as he stated in [32] that the situation was not one where a narrow or pedantic approach was warranted and should discern a contraction of the rights and obligations which prevent them being buoyed for uncertainty of meaning, as was adopted in Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429 at 437; 41 ALJR 348; BC6800450 and Vickery v Woods (1952) 85 CLR 336 at 343, 348; 25 ALJR 740; 52 SR (NSW) 103; BC5200120. [83,390.15] Onus of proof George v DCT (2004) 212 ALR 495; 57 ATR 450 also disposes of this question. The appellant contended that the magistrate had erred in imposing an onus of proof upon the appellant rather than on the commissioner. Stone J said that the finding in question was an evidential shifting of the onus of the type considered by Barwick CJ in Cameron v Holt (1980) 142 CLR 342 at 347; 28 ALR 490 and that that a shift in the evidentiary burden does not mean that the legal burden of proof has shifted. [83,390.20] Subsection 2(b) “the ground specified in the application” In George v DCT (2004) 212 ALR 495; 57 ATR 450; [2004] FCA 1433; BC200407316 Stone J said at [18]: [18] In my view, the reference in subs (2)(b) to “the ground specified in the application” relates to the opening words of the subsection, “Upon the hearing of an application made under subsection (1)”, namely the application before the court. As the respondent pointed out that is also consistent with the use of the words, “may apply” in subs (1). The appellant submitted that on this interpretation the “specified ground” could be identified at any time in the proceedings, a result clearly not contemplated by the section. Because s 222(1) refers to a doubt existing on a specific ground as the circumstance that gives rise to the right to apply to the court for review, it may be that the specific ground must be identified at the outset of the proceedings, perhaps in the originating process which, in this case is the application and accompanying affidavits … [83,390.21] Subsections 222(1)(d) & (e) — setting aside on grounds of unreasonableness In assessing whether the composition is unreasonable, or not calculated to benefit creditors generally, the Court has regard to the amount of the composition as compared with the debts owing by the debtor (at [68]); in making that comparison the relativity between the amount of the debts incurred and the

proposed composition might suggest that the proposal is so trivial or so disproportionate (as, for all practical purposes, the creditors are receiving nothing or a negligible amount) that the administration of the estate is “better dealt with by way of bankruptcy” (Re Richards) with an investigation by the Trustee in bankruptcy exercising relevant powers: Re Richards: Ex parte Beneficial Finance Corporation Ltd [1986] FCA 74; Re Brennan; Re Codrington: Ex parte Don McKay Tourist and Charter Pty Ltd [1989] FCA 349; Re Palazzolo v Ex parte Discusso [1991] FCA 317; NZI Capital Corporation Ltd v Lancaster (1991) 30 FCR 441; BC9103286 (see at [69]–[74] of the principal judgment); the relativity of the amount of the debts owing, to the proposal made, is relevant but not determinative: Re Lockett: Ex parte Northern Equity Ltd [1992] FCA 142. See also Hingston v Westpac Banking Corp (2012) 200 FCR 493; [2012] FCAFC 41; BC201201496 at [58]. [83,390.30] Substantial compliance — s 222(3) and (5) See [83,360.10] and Joiner v Bailey [2004] FCA 1411; BC200407286. [83,390.40] Application for sequestration order — s 2(10) In RDN Developments Pty Ltd v Shtrambrandt (2012) 262 FLR 464; [2012] FMCA 437; BC201203678, Whelan FM, applying, inter alia, For the Good Times Pty Ltd v Boyle [2009] FMCA 512; BC200905130, held that s 222(1) [page 697] now has the effect that the consideration of the reasonableness and benefits to creditors of the terms of an agreement provides independent grounds for setting aside an agreement and making a sequestration order, and these considerations are no longer only qualifications after satisfaction of formal grounds, as under the old s 222(5). See at [52]. Subsection (10) provided the means by which that aim could be satisfied at [109].

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[83,390A] Termination of personal insolvency agreement by trustee 222A (1) The trustee of a personal insolvency agreement may, in writing, propose the termination of the agreement if the trustee is satisfied that the debtor is in default. (2) The trustee must give notice of the proposed termination to all the creditors who would be entitled under section 64A (as that section applies in accordance with section 223A) to receive notice of a meeting of creditors. (3) The notice must: (a) include a statement of the reasons for the termination and the likely impact it will have on creditors (if it takes effect); and (b) specify a date (at least 14 days after the notice is given) from which it is proposed that the termination will take effect; and

(c) state that any creditor may, by written notice to the trustee at least 2 days before the specified date, object to the termination taking effect without there being a meeting of creditors. (4) If: (a) the debtor is in default; and (b) no creditor lodges a written notice of objection with the trustee at least 2 days before the specified date; then the proposed termination takes effect on the date specified in the notice. (5) For the purposes of this section, the debtor is in default if, and only if: (a) the debtor has failed to carry out or comply with a term of the personal insolvency agreement; or (b) if the debtor has died — the debtor or the person administering the estate of the debtor has failed to carry out or comply with a term of the agreement. (6) A certificate signed by the trustee stating any matter relating to a proposed termination under this section is prima facie evidence of the matter. [s 222A insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,390B] Termination of personal insolvency agreement by creditors 222B (1) The creditors may, by resolution at a meeting called for the purpose, terminate a personal insolvency agreement if: (a) the debtor is in default; and (b) before the passage of the resolution, the trustee of the agreement tabled at the meeting a written declaration to the effect that the trustee is satisfied that the debtor is in default. (2) The creditors may, by special resolution at a meeting called for the purpose, terminate the personal insolvency agreement if: (a) property of the debtor is covered by a restraining order or a forfeiture order; or (b) a pecuniary penalty order made against the debtor is in force. [page 698]

(3) However: (a) paragraph (2)(a) does not apply if, when the personal insolvency agreement was made, the restraining order or forfeiture order already covered the property in question; and (b) paragraph (2)(b) does not apply if, when the personal insolvency agreement was made, the pecuniary penalty order was already in force against the debtor. (4) For the purposes of this section, the debtor is in default if, and only if: (a) the debtor has failed to carry out or comply with a term of the personal insolvency agreement; or (b) if the debtor has died — the debtor or the person administering the estate of the debtor has failed to carry out or comply with a term of the agreement. [s 222B insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 222B GENERALLY [83,390B.5] Written declaration In Lofthouse (Trustee) v Stirling (2008) 173 FCR 574; [2008] FCA 1936; BC200811393, Heerey J dealt with the meaning of the phrase “written declaration”. Concerning a resolution of a meeting of creditors, the respondent debtor submitted that the notice was defective because it was not a “written resolution”, as required by s 222B(1)(b) in that it was not the “formal statement” required by the subsection. Further, it was argued that the notice was not a written declaration of the applicant’s state of mind, as distinct from the applicant’s appointed representative. At [23], Heerey J held that the purpose of the subsection was to bring creditors at the meeting up to date as to the default of the debtor. His Honour set out several examples such as reliance on conduct that might amount to a waiver or estoppel. At [24], Heerey J examined the theoretical possibility that somebody other than the trustee might fraudulently produce a written declaration. The respondent debtor’s argument assumed that to prevent such an inherently unlikely eventuality, parliament intended that a stipulation should be read into s 222B that the written declaration must be signed by the trustee personally — notwithstanding the practical inconvenience that may cause. Section 63B(1) provides that a trustee may, by “signed writing”, appoint a person to represent him or her at a meeting. Furthermore, the general law of agency supports the validity of the notice. Gibbs CJ said in O’Reilly v Commissioners of State Bank of Victoria (1983) 153 CLR 1 at 11; 44 ALR 27; 57 ALJR 342; [1983] HCA 47: There can be no doubt that as a general proposition at common law a person sufficiently ‘signs’ a document if it is signed in his name and with his authority by somebody else…” Heerey J added that where a statute requires a document to be signed by a person, this rule is displaced only if the statute indicates by clear language that personal signature is required: McRae v Coulton (1986) 7 NSWLR 644 at 663 per Hope JA. There was no necessity for an express statement of satisfaction to be made. At [32], his Honour held that the fact that the notice did “not use the word ‘satisfied’ cannot detract from the clear meaning conveyed by the document. It is to be noted that the section speaks of a declaration “to the effect that”

the debtor is in default. This confirms that what is relevant is the substance of the declaration, not its wording”.

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[83,390C] Court may terminate personal insolvency agreement 222C (1) If a personal insolvency agreement is in force, the Court may, on application by: (a) the trustee; or (b) a creditor; or (c) the debtor; or (d) if the debtor has died — the person administering the estate of the debtor; [page 699] make an order terminating the agreement if the Court is satisfied: (e) that: (i) the debtor; or (ii) if the debtor has died — the debtor or the person administering the estate of the debtor; has failed to carry out or comply with a term of the agreement; or (f) that the agreement cannot be proceeded with without injustice or undue delay to: (i) the creditors; or (ii) the debtor; or (iii) if the debtor has died — the estate of the debtor; or (g) that, for any other reason, the agreement ought to be terminated. (2) The Court must not make an order terminating a personal insolvency agreement on the ground specified in paragraph (1)(e) or (g) unless it is satisfied that it would be in the interests of the creditors to do so.

(3) Ancillary orders If the Court makes an order terminating a personal insolvency agreement, the Court may make such other orders as the Court thinks fit. (4) An order under subsection (3) may be an order directing a person to pay another person compensation of such amount as is specified in the order. This subsection does not limit subsection (3). (5) Application for sequestration order The trustee or a creditor may include in an application under subsection (1) an application for a sequestration order against the estate of the debtor. If the Court, on the firstmentioned application, makes an order under this section terminating the personal insolvency agreement, it may, if it thinks fit, immediately make the sequestration order sought. (6) The making of an application by the trustee or a creditor for a sequestration order under this section is taken, for the purposes of this Act, to be equivalent to the presentation of a creditor’s petition against the debtor, but the provisions of subsection 43(1), sections 44 and 47, subsections 52(1) and (2) and Part XIA do not apply in relation to such an application. (7) Court may dispense with service on debtor of notice of application The Court may, if it thinks fit, dispense with service on the debtor of notice of an application by the trustee or a creditor under this section, either unconditionally or subject to conditions. [s 222C insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,390D] Termination of personal insolvency agreement by occurrence of terminating event 222D A personal insolvency agreement is terminated by the occurrence of any circumstance or event on the occurrence of which the agreement provides that it is to terminate. [s 222D insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,395] Calling of meetings after the first meeting 223 (1) The controlling trustee or the trustee of a personal insolvency agreement: (a) may call such meetings of the creditors as he or she considers necessary or desirable for the purposes of this Part; and

(b) shall call meetings of the creditors at such times as the creditors, by resolution, direct and whenever requested in writing to call such a meeting by not less than one-fourth in value of the creditors. [subs (1) am Act 119 of 1987 s 80; Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 700] *(2) [subs (2) rep Act 44 of 1996 s 3 and Sch 1] *(3) If, at any time, there is no trustee of a personal insolvency agreement, any creditor or the debtor may call a meeting of creditors (other than the meeting referred to in section 194) for the purposes of appointing a trustee of the agreement. [subs (3) am Act 12 of 1980 s 118; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 223 GENERALLY [83,395.5] Cross-reference As to the position where there is no trustee, see s 220. See also Re Cant; Ex parte Smith and Shirlaw (1975) 7 ALR 399.

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[83,400] Rules in relation to meetings 223A (1) Division 5 of Part IV applies, with any modifications prescribed by the regulations, in relation to a meeting called under section 223 as if: (a) the debtor who signed the authority under section 188 were bankrupt; and (b) the person who called the meeting were the trustee in the bankruptcy. (2) Section 195 applies, with any modifications prescribed by the regulations, in relation to a meeting called under section 223 as if references in section 195 to the controlling trustee included references to the trustee of a personal insolvency agreement. [subs (2) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [s 223A subst Act 44 of 1996 s 3 and Sch 1]

SECTION 223A GENERALLY [83,400.5] Modifications See reg 10.11.

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[83,405] Validity of acts if personal insolvency agreement set aside or terminated 224 (1) Scope This section applies if a personal insolvency agreement is: (a) set aside by the Court; or (b) terminated. (2) Validity of acts All payments made, acts and things done and transactions entered into in good faith under, or for the purposes of, the agreement by: (a) the trustee; or (b) any other person; before he or she had notice of the order of the Court or of the termination of the agreement, as the case may be, are valid and effectual and are not liable to be set aside by the trustee of a later personal insolvency agreement or in a subsequent bankruptcy. [s 224 subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,410] Notice that a personal insolvency agreement has been set aside, varied or terminated 224A (1) If a personal insolvency agreement is terminated or varied by a resolution or special resolution at a meeting of creditors called for the purpose, the trustee of the [page 701] agreement must, before the end of the period of 2 days beginning on the day of the termination or variation, file a copy of the resolution or special resolution in the office of the Official Receiver.

Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (1) am Act 106 of 2010 s 3 and Sch 2[47] and [48], opn 1 Dec 2010]

(2) If a personal insolvency agreement is varied in accordance with subsection 221A(5), the trustee of the agreement must, before the end of the period of 2 days beginning on the day of the variation, file a copy of the variation in the office of the Official Receiver. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (2) am Act 106 of 2010 s 3 and Sch 2[49] and [50], opn 1 Dec 2010]

(3) If a personal insolvency agreement is terminated by the occurrence of any circumstance or event on the occurrence of which the deed provides that it is to terminate, the trustee of the agreement must, before the end of the period of 2 days beginning on the day of the termination, give written notice of that fact to the Official Receiver. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (3) am Act 106 of 2010 s 3 and Sch 2[51] and [52], opn 1 Dec 2010]

(4) If: (a) the Court makes an order setting aside or terminating a personal insolvency agreement; and (b) a registered trustee was the trustee of the personal insolvency agreement; the registered trustee must, before the end of the period of 2 days beginning on the day the trustee becomes aware of the order, give written notice of the order to the Official Receiver. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (4) am Act 106 of 2010 s 3 and Sch 2[53] and [54], opn 1 Dec 2010]

(5) If: (a) the Court makes an order setting aside or terminating a personal insolvency agreement; or (b) a personal insolvency agreement is terminated otherwise than because of an order of the Court; the trustee of the personal insolvency agreement must give written notice of the order or termination to each of the creditors within 2 working days of the

making of the order or of the termination, as the case may be. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (5) am Act 106 of 2010 s 3 and Sch 2[55], opn 1 Dec 2010]

(6) For the purposes of subsection (5), a working day is a day that is not a Saturday, Sunday or public holiday in: (a) in the case of an order made by the Court — the place where the order is made; or (b) in the case of a termination otherwise than because of an order of the Court: (i) if the trustee of the personal insolvency agreement has only one office — the place where that office is located; or [page 702] (ii) if the trustee of the personal insolvency agreement has 2 or more offices — the place where the principal office is located. (7) Subsections (1), (2), (3), (4) and (5) are offences of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (7) insrt Act 106 of 2010 s 3 and Sch 2[56], opn 1 Dec 2010] [s 224A subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 224A GENERALLY [83,410.5] Cross-reference For the definition of special resolution, see s 5.

____________________ *Editor’s Note: Subsections (2) and (3) as they stood prior to amendment by Act 44 of 1996 can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney, 1996 ed at [83,395].

[83,415] Evidence of personal insolvency agreement, resolution etc 225 (1) A personal insolvency agreement that purports to have been executed by the debtor and by the trustee, and to have been attested in

accordance with this Part, shall, unless and until the contrary is proved, be deemed to have been duly executed and attested. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) A certificate of the passing of a special resolution under section 204 signed in accordance with that section is prima facie evidence that the meeting was duly convened and held and that the special resolution specified in the certificate was duly passed at the meeting. [subs (2) am Act 12 of 1980 s 122]

(3) A certificate of the passing of a resolution (not being a special resolution) under section 204 signed in accordance with that section is prima facie evidence that the resolution specified in the certificate was duly passed at the meeting. [subs (3) am Act 12 of 1980 s 122]

(4) The minutes of a meeting held under this Part signed in accordance with section 203 are prima facie evidence of the proceedings at the meeting. [subs (4) am Act 12 of 1980 s 122] SECTION 225 GENERALLY [83,415.5] Subsection (2) As to the situation where a relevant resolution failed to meet the requirements of s 225(2), see Re Venetoulis; Ex parte Calsil Ltd (1976) 13 ALR 625. “Special resolution” means a resolution passed by a majority in number and at least three-quarters in value of the creditors present personally, by attorney or by proxy at a meeting of creditors and voting on a resolution: s 5. [83,415.10] “resolution” “Resolution” means a resolution passed by a majority in value of the creditors present personally, by attorney or by proxy at a meeting of creditors and voting on the resolution: s 5.

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[83,420] Creditor may inspect personal insolvency agreement etc 226 (1) A person who states in writing that he or she is a creditor of a debtor who has executed a personal insolvency agreement under this Part may, at all reasonable times, inspect without fee, personally or by an agent, the agreement, the statement of the debtor’s affairs given under subsection 188(2C) or (2D) and the proofs of debt of creditors and may make copies of, or take extracts from, the agreement, the statement and the proofs.

[subs (1) subst Act 12 of 1980 s 123; am Act 119 of 1987 s 82; Act 44 of 1996 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 703] (2) [subs (2) rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] (3) A person who states in writing that he or she is a creditor of a debtor who has executed a personal insolvency agreement under this Part 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 document filed under this Part in the office of the Official Receiver in relation to the debtor, and may make copies of, or take extracts from, the document. [subs (3) insrt Act 12 of 1980 s 123; am Act 44 of 1996 s 3 and Schs 1, 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

(4) Any person is entitled, on payment of the fee determined by the Minister by legislative instrument, to obtain an office copy of any document filed under this Part in the office of the Official Receiver. [subs (4) insrt Act 12 of 1980 s 123; am Act 44 of 1996 s 3 and Sch 1; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

[83,425] Stamp duty not payable on personal insolvency agreements etc entered into under this Part *227 Stamp duty is not payable under a law of a State or Territory on: (a) an authority under section 188; or (b) a personal insolvency agreement. [s 227 am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,480] Personal insolvency agreement to bind all creditors 229 (1) A personal insolvency agreement that: (a) is entered into in accordance with this Part; and

(b) complies with the requirements of this Part; is, upon being duly executed by the debtor and the trustee, binding on all the creditors of the debtor. (2) If a personal insolvency agreement has become binding on the creditors of the debtor, it is not competent for a creditor, so long as the agreement remains valid: (a) to present a creditor’s petition against the debtor, or to proceed with such a petition presented before the agreement became so binding, in respect of a provable debt; or (b) to enforce any remedy against the person or property of the debtor in respect of a provable debt; or (c) to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding. (3) This section does not: (a) affect the right of a secured creditor to realise or otherwise deal with the creditor’s security; or (b) prevent a creditor, after all the obligations that a personal insolvency agreement created have been discharged, from taking any proceeding or enforcing any remedy in respect of a provable debt from which the debtor is not released by the operation of the agreement. (4) This section does not prevent a creditor from enforcing any remedy against: (a) a debtor who has executed a personal insolvency agreement; or (b) any property of such a debtor that is not subject to the agreement; *Editor’s Note: There is no s 228.

[page 704] in respect of any liability of the debtor under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this subsection). [s 229 insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,485] Release of provable debts 230 (1) If a personal insolvency agreement provides for a debtor to be released from a provable debt, the agreement operates to release the debtor from that provable debt unless the agreement is set aside or terminated under this Part. (2) Subsection (1) has effect subject to subsections (3), (4) and (5). (3) Exceptions Subsection (1) does not operate to release the debtor from a debt that would not be released by his or her discharge from bankruptcy if he or she had become a bankrupt on the day on which he or she executed the personal insolvency agreement. (4) Subsection (1) does not affect the right of a secured creditor, or a person claiming through or under a secured creditor, to realise or otherwise deal with the creditor’s security: (a) if the secured creditor has not proved under the agreement for any part of the secured debt — for the purpose of obtaining payment of the secured debt; or (b) if the secured creditor has proved under the agreement for part of the secured debt — for the purpose of obtaining payment of the part of the secured debt for which the creditor has not proved under the agreement; and, for the purposes of enabling the secured creditor, or a person claiming through or under a secured creditor, so to realise or deal with the creditor’s security, but not otherwise, the secured debt, or the part of the secured debt, as the case may be, is taken not to have been released. (5) A personal insolvency agreement does not release from any liability a person who, at the date on which the debtor executed the agreement, was: (a) a partner or a co-trustee with the debtor; or (b) jointly bound or had made a joint contract with the debtor; or (c) surety or in the nature of a surety for the debtor. [s 230 insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,490] Application of general provisions of Act to personal insolvency agreements 231 (1) Sections 77, 77A, 77AA, 77C, 77D, 77E, 77F, 78 (other than

paragraphs 78(1)(a), (b) and (c)) and 81 apply, with the prescribed modifications (if any), in relation to a debtor who has executed a personal insolvency agreement as if: (a) the debtor were a bankrupt; and (b) the trustee of the agreement were the trustee of the estate of the bankrupt debtor. (2) Section 78 (other than paragraphs 78(1)(d) and (f)) applies, with the prescribed modifications (if any), in relation to a debtor who has executed a personal insolvency agreement as if the debtor were a debtor against whom a bankruptcy notice has been presented. (3) Subsection 58(4) and sections 60, 61, 62, 70, 71, 72, 82 to 118, 127 to 130 and 133 to 139H, Subdivisions I and J of Division 4B of Part VI and sections 140 to 147 apply, with the prescribed modifications (if any), in relation to such an agreement as if: (a) a creditor’s petition had been presented against the debtor by whom the agreement was executed on the day on which the special resolution requiring the execution of the agreement was passed; and [page 705] (b) a sequestration order had been made against him or her on that petition on the day on which he or she executed the agreement; and (c) the trustee of the agreement were the trustee in his or her bankruptcy. (4) In the application, by virtue of subsections (1), (2) and (3), of the provisions referred to in those subsections: (a) a reference to the property of the bankrupt is to be read as a reference to the divisible property of the debtor; and (b) a reference to a provable debt is to be read as a reference to a provable debt within the meaning of this Part; and (c) a reference to the end of the bankruptcy is to be read as a reference to the end of the personal insolvency agreement. (5) Part VIII applies, with any modifications prescribed by the regulations, in relation to a trustee of a personal insolvency agreement as if:

(a) the debtor by whom the agreement was executed were a bankrupt; and (b) the trustee of the agreement were the trustee in his or her bankruptcy. (6) If, after taking into account the prescribed modifications and the provisions of subsection (4), a provision specified in subsection (1), (2), (3) or (5) is incapable of application in relation to a personal insolvency agreement, or the trustee of such an agreement, as the case requires, or is inconsistent with this Part, that provision does not so have application. (7) This Division does not empower the Court to stay any proceedings under a proceeds of crime law. [s 231 insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,493] Right of debtor to remaining property 231A (1) The debtor to whom a personal insolvency agreement relates is entitled to any property remaining after payment in full of: (a) the costs, charges and expenses of the administration of the agreement; and (b) all provable debts; and (c) interest on interest-bearing provable debts. (2) The Court may make an order directing the trustee not to pay or transfer the property, or a specified part of the property, referred to in subsection (1), to the debtor if: (a) an application is made for an order under this subsection by a person mentioned in subsection (2A); and (b) the Court is satisfied that proceedings are pending under a proceeds of crime law; and (c) the Court is satisfied that property of the debtor may: (i) become subject to a forfeiture order or interstate forfeiture order made in the proceedings; or (ii) be required to satisfy a pecuniary penalty order or interstate pecuniary penalty order made in the proceedings. [subs (2) am Act 174 of 2011 s 3 and Sch 2[148], opn 1 Jan 2012]

(2A) For the purposes of paragraph (2)(a), the application may be made by:

in the case of pending proceedings in relation to a forfeiture order (a) or a pecuniary penalty order under the Proceeds of Crime Act 2002 — the Commonwealth proceeds of crime authority that is, or that is proposed to be, the responsible authority for the application for the order under that Act; or [page 706] (b) in the case of pending proceedings under a corresponding law — a person who is entitled to apply for an interstate confiscation order under the corresponding law. [subs (2A) insrt Act 174 of 2011 s 3 and Sch 2[149], opn 1 Jan 2012]

(3) The Court, on application made to it, may vary or revoke an order made under subsection (2). [s 231A insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[83,495] Certificate relating to discharge of obligations 232 (1) If the trustee of a personal insolvency agreement is satisfied that all the obligations that the agreement created have been discharged, the trustee must, on written request by the debtor, give the debtor a certificate signed by the trustee to that effect. (2) A certificate signed by a trustee under this section is prima facie evidence of the facts stated in it. [s 232 insrt Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

DIVISION 4 — SPECIAL PROVISIONS APPLICABLE TO DEEDS OF ASSIGNMENT [Repealed] [Div 4 rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

DIVISION 5 — SPECIAL PROVISIONS APPLICABLE TO DEEDS OF ARRANGEMENTS

[Repealed] [Div 5 rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

DIVISION 6 — SPECIAL PROVISIONS APPLICABLE TO COMPOSITIONS [Repealed] [Div 6 rep Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

PART XI — ADMINISTRATION OF ESTATES OF DECEASED PERSONS IN BANKRUPTCY

[83,750] Administration of estates under this Part upon petition by creditor *244 (1) Subject to this section, where: (a) a debt of not less than $5,000 was owing by a deceased person at the time of his or her death to a creditor, or debts amounting in the aggregate to not less than that amount were so owing to any 2 or more creditors; (b) a debt incurred by the legal personal representative of a deceased person of not less than $5,000 is owing to a creditor, or debts so incurred amounting in the aggregate to not less than that amount are owing to any 2 or more creditors; or (c) a debt of not less than $5,000, or debts amounting in the aggregate to not less than that amount, which a deceased person would have been liable to pay to a creditor or any 2 or more creditors if he or she had not died becomes or become owing after his or her death; *Editor’s Note: The figure of $2000 was inserted by Act 44 of 1996 and applies only to bankruptcy proceedings commenced after 16 December 1996. The old figure of $1500 has application to bankruptcy proceedings begun by presentation of a petition to the court before that date.

[page 707] the creditor or creditors to whom the debt or debts is or are owing may present a petition to the Court for an order for the administration of the estate of the deceased person (in this section referred to as the deceased debtor) under this Part. [subs (1) am Act 12 of 1980 s 136; Act 21 of 1985 s 35; Act 44 of 1996 s 3 and Schs 1, 2; Act 106 of 2010 s 3 and Sch 4[3], opn 11 Aug 2010]

(2) Subject to subsection (3), a secured creditor shall, for the purposes of subsection (1), 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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) A secured creditor may present, or join in presenting, a petition under

this section 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 an order for the administration of the estate under this Part being made. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) Where a petitioning creditor is a secured creditor, he or she shall set out in the petition particulars of his or her security. [subs (4) am Act 44 of 1996 s 3 and Sch 2]

(5) A petition under this section shall be verified by the affidavit of a person who has knowledge of the facts. (6) A petition under this section shall not be presented unless: (a) the debt, or each of the debts, in respect of which it is presented: (i) is a liquidated sum due at law or in equity or partly at law and partly in equity; and (ii) is payable immediately or at a certain future time; and (b) at the time of his or her death, the deceased 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. [subs (6) am Act 44 of 1996 s 3 and Sch 2]

(7) Where a secured creditor has presented, or joined in presenting, a petition under this section 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 an order for the administration of the estate under this Part, surrender his or her security to the trustee for the benefit of the creditors generally. [subs (7) am Act 44 of 1996 s 3 and Schs 1, 2]

(8) A secured creditor to whom subsection (7) 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. [subs (8) am Act 44 of 1996 s 3 and Sch 2]

(9) Subject to subsection (10), a sealed copy of the petition shall be served upon the legal personal representative of the deceased debtor or, if there is no legal personal representative, upon such person as the Court directs. (10) The Court may, if it is satisfied that there is no legal personal representative of the deceased debtor and that there are special circumstances that justify its so doing, by order dispense with service of the petition, either unconditionally or subject to conditions. [page 708] (11) At the hearing of the 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, unless service of the petition has been dispensed with; and (c) the fact that the debt or debts to which the petition relates is or are still owing; and if it is satisfied with the proof of those matters, may make an order that the estate be administered under this Part. (12) If the Court is not satisfied with the proof of any of those matters or is of the opinion that for other sufficient cause the order sought ought not to be made, it may dismiss the petition. (13) Where proceedings have been commenced in a court for the administration of a deceased person’s estate under a law of a State or Territory, a petition for an order under this section in relation to the estate shall not be presented by a creditor except by leave of the Court and on such terms and conditions (if any) as the Court thinks fit. (14) If the Court makes an order that the estate be administered under this Part, the creditor who obtained the order must, before the end of the period of 2 days beginning on the day the order was made, give a copy of the order to the Official Receiver. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (14) insrt Act 44 of 1996 s 3 and Sch 1; am Act 106 of 2010 s 3 and Sch 2[57] and [58], opn 1

Dec 2010]

(15) Subsection (14) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (15) insrt Act 106 of 2010 s 3 and Sch 2[59], opn 1 Dec 2010] SECTION 244 GENERALLY [83,750.5] Equivalent provisions Following is a list of equivalent provisions:

s 244(2) s 244(1) s 244(3) s 244(4) s 244(5) s 244(6)(a) s 244(6)(b) s 244(7) s 244(8) s 244(12)

s 44(1) s 44(2) s 44(3) s 44(4) s 47(1)(b) s 44(1)(b) s 43(1)(b) s 44(5) s 44(6) s 52(2) SECTION 244(1)

[83,750.10] Form of petition FCR O 77 r 59, Form 157. Note that the petition should be verified by affidavit: s 244(5) and r 60. SECTION 244(2) [83,750.20] “secured creditor” For definition of “secured creditor”, see s 5 and r 60. SECTION 244(8) [83,750.35] Criminal and civil contempt For discussion of the difference between civil contempt and criminal contempt, see Australasian Meat Industry Employees Union v Mudginberri [page 709] Station Pty Ltd (1986) 161 CLR 98; 66 ALR 577; John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351; Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483; [1966] ALR 387. For discussion of the applicable onus of proof in the bankruptcy context, see Kerrison v Official Trustee (1990) 27 FCR 271. Where facts allege a criminal contempt there is no right of appeal from an acquittal: Director of Public Prosecutions v Chidiac (1991) 25 NSWLR 372. SECTION 244(9)–(12)

[83,750.70] Court’s powers Although an order for the administration of an estate under this Part can be annulled (s 252A), the court does not have power to rescind or discharge or suspend the operation of an order for administration under Pt XI: s 37(2). SECTION 244(13) [83,750.90] Grant of leave This provision was considered by Siopis J in Passmore v Underdown (Deceased) [2010] FCA 70; BC201000457. The estate was said to be bankrupt, and pending proceedings in the Supreme Court were adjourned for this application to be made. The principle of the section is set out in Feliciano Gonzales v Maria De Luz Marmentini, Executrix of the Estate of the Late Ida Garcia Raber [1998] FCA 911; BC9803583, per Emmett J where His Honour observed: The purpose of s 244(13) is to ensure that there are not two Courts administering an insolvent estate or administering the estate generally. It is not concerned with the grant of probate or letters of administration by a Court of Probate. Siopis J observed that if the application was made the Supreme Court proceedings would be discontinued.

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[83,755] Debtor dying after presentation of creditor’s petition 245 (1) Subject to subsection (2), where a person against whom a creditor’s petition has been presented under Part IV dies after he or she has been served with the petition but before a sequestration order has been made on the petition or the petition has been dismissed, an order may be made on that petition for the administration of his or her estate under this Part. [subs (1) am 44 of 1996 s 3 and Schs 1, 2]

(2) The matters of which the Court is to require proof before making such an order in a case to which subsection (1) applies are those of which the Court would have required proof before making a sequestration order on the petition if the deceased person had not died. (3) If the Court makes an order that the estate be administered under this Part, the creditor who obtained the order must, before the end of the period of 2 days beginning on the day the order was made, give a copy of the order to the Official Receiver. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (3) insrt Act 44 of 1996 s 3 and Sch 1; am Act 106 of 2010 s 3 and Sch 2[60] and [61], opn 1 Dec 2010]

(4) Subsection (3) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (4) insrt Act 106 of 2010 s 3 and Sch 2[62], opn 1 Dec 2010]

[83,760] Statement of deceased debtor’s affairs etc by legal personal representative 246 (1) Where an order is made under section 244 or 245 for the administration of the estate of a deceased person under this Part, and there is a legal personal representative [page 710] of the deceased person, the legal personal representative shall, within 28 days from the day on which he or she is notified of the making of the order: (a) make out a statement of the deceased person’s affairs and of his or her administration of the deceased person’s estate; and (b) give a copy of the statement to the Official Receiver. Penalty: 25 penalty units. Note: See also section 277B (about infringement notices). [subs (1) am Act 12 of 1980 s 137; Act 119 of 1987 s 86; Act 44 of 1996 s 3 and Schs 1, 2; Act 106 of 2010 s 3 and Sch 2[63], opn 1 Dec 2010]

(1A) Subsection (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (1A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) [subs (2) rep Act 44 of 1996 s 3 and Sch 1] (3) [subs (3) rep Act 44 of 1996 s 3 and Sch 1] (4) The cost of making out and filing such a statement shall be borne by the estate. (5) A person who states in writing that he or she is a creditor of the estate 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 filed under this section in respect of a deceased person, and make copies of, or take extracts from, the statement. [subs (5) am Act 12 of 1980 s 137; Act 44 of 1996 s 3 and Schs 1, 2; Act 34 of 2006 s 3 and Sch 1, opn

1 July 2006]

(6) If the trustee of the estate is a registered trustee, the Official Receiver must give the trustee a copy of the order and a copy of the statement of affairs. [subs (6) insrt Act 44 of 1996 s 3 and Sch 1] SECTION 246 GENERALLY [83,760.5] Statement of affairs Approved Form 4. See reg 11.01.

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[83,765] Petition for administration under this Part by person administering deceased person’s estate 247 (1) Subject to this section, a person administering the estate of a deceased person may present a petition for an order for the administration of the estate under this Part, accompanied by a statement, in duplicate, of the deceased person’s affairs and of his or her administration of the deceased person’s estate. [subs (1) am Act 122 of 1970 s 16; Act 119 of 1987 s 87; Act 44 of 1996 s 3 and Sch 2]

(1A) Upon hearing the petition, the Court may make, or refuse to make, the order sought as it thinks fit. [subs (1A) insrt Act 122 of 1970 s 16]

(2) A petition under this section shall not be presented unless, at the time of his or her death, the deceased person: (a) was personally present or ordinarily resident in Australia; (b) had a dwelling house or place of business in Australia; (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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

[page 711] (3) If the Court makes an order upon hearing the petition, the person administering the estate of the deceased person must, before the end of the period of 2 days beginning on the day the order was made, give a copy of the order to the Official Receiver. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (3) insrt Act 106 of 2010 s 3 and Sch 2[64], opn 1 Dec 2010]

(4) Subsection (3) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code.

[subs (4) insrt Act 106 of 2010 s 3 and Sch 2[64], opn 1 Dec 2010] SECTION 247 GENERALLY [83,765.5] Procedure See O 77 r 62 and Form 158. For equivalent provisions to s 247(2), see s 244(6)(b) and s 43(1)(b). A petition under this section is substantially different from ordinary petitions under s 44 or a petition under s 244. In particular note the change of language from “legal personal representative” as used in s 244 to “person administering the estate of a deceased person” which would be wide enough to cover an executor de son tort. For the statement of affairs, Approved Form 4 and reg 11.01.

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[83,770] Commencement of administration under Part 247A (1) Administration of the estate of a deceased person under this Part by virtue of an order made by the Court under section 244 or 247 after the commencement of this section shall be deemed to have relation back to, and to have commenced at: (a) if the deceased person was on the day of his or her death unable to pay his or her debts as they became due from his or her own moneys and had committed any act or acts of bankruptcy within the period of 6 months immediately preceding the day on which he or she died — the time of the commission of that act, or the first of those acts, as the case may be; (b) if the deceased person was on the day of his or her death unable to pay his or her debts as they became due from his or her own moneys, but had not committed any act of bankruptcy within the period of 6 months immediately preceding the day on which he or she died — the time of his or her death; or (c) if the deceased person was on the day of his or her death able to pay his or her debts as they became due from his or her own moneys — the time of the presentation of the petition on which the order was made. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Administration of the estate of a deceased person under this Part by virtue of an order made by the Court under section 245 on a creditor’s

petition shall be deemed to have relation back, and to have commenced at, the time of the commission of the earliest act of bankruptcy committed by the deceased person within the period of 6 months immediately preceding the date on which the petition was presented. [s 247A insrt Act 12 of 1980 s 138] SECTION 247A GENERALLY [83,770.5] Equivalent provisions For equivalent provisions in relation to ordinary estate, see ss 115 and 116. [83,770.10] Relation back If an act of bankruptcy is committed within six months of the date of death of the deceased, the administration relates back to that date. If there is no act of bankruptcy [page 712] within the relevant six-month period but the deceased was insolvent at the date of his or her death, the administration commences on the date of death. Otherwise commencement dates from the date of presentation of the petition. [83,770.15] Unable to pay debts as they become due from own moneys The concept involves a consideration whether the debtor is unable, utilising such cash resources as the debtor has or can command through the use of his or her assets, to meet his or her debts as they fall due and is thus insolvent: Sandell v Porter (1966) 115 CLR 666.

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[83,775] Application of Act in relation to administrations under this Part 248 (1) Subject to this section, subsection 47(2), sections 49 to 51 (inclusive), subsections 52(4) and (5), section 62, Division 5 of Part IV, sections 70 to 76 (inclusive), section 79, sections 81 to 114 (inclusive), sections 117 to 130 (inclusive), sections 132 to 139H (inclusive), Subdivisions I and J of Division 4B of Part VI and sections 140 to 147 (inclusive) and sections 156A to 184 (inclusive) apply, with any modifications prescribed by the regulations, in relation to proceedings under this Part and the administration of estates under this Part. [subs (1) am Act 12 of 1980 s 139; Act 119 of 1987 s 88; Act 9 of 1992 s 41; Act 44 of 1996 s 3 and Sch 1]

(2) [subs (2) rep Act 12 of 1980 s 139]

(3) Subject to the regulations, in the application of the provisions specified in subsection (1) in relation to proceedings under this Part and the administration of estates of deceased persons under this Part: (a) a reference to a sequestration order shall be read as a reference to an order for administration of an estate under this Part; (b) a reference to bankruptcy shall be read as a reference to administration under this Part; (c) a reference to the property of the bankrupt shall be read as a reference to the divisible property of the estate as defined by subsection 249(6); (d) a reference to the date of the bankruptcy or to the date on which a person became a bankrupt shall be read as a reference to the date on which the order for administration under this Part was made; (da) a reference to the commencement of the bankruptcy shall be read as a reference to the time at which administration of the estate under this Part is, by virtue of section 247A, to be deemed to have commenced; (e) a reference to a bankrupt shall be read as a reference to a deceased person in respect of whose estate an order for administration under this Part has been made and as including a reference to the estate of that deceased person; and (f) a reference to the trustee of the estate of a bankrupt shall be read as a reference to the trustee of the estate of a deceased person in respect of whose estate an order for administration under this Part has been made. [subs (3) am Act 12 of 1980 s 248; Act 119 of 1987 s 88; Act 44 of 1996 s 3 and Sch 1]

(4) If, after taking into account the prescribed modifications and the provisions of subsection (3), a provision specified in subsection (1) is incapable of application in relation to proceedings under this Part or the administration of estates under this Part, or is inconsistent with this Part, that provision does not so have application. [subs (4) am Act 119 of 1987 s 88]

(5) [subs (5) rep Act 119 of 1987 s 88] [page 713]

SECTION 248 GENERALLY [83,775.5] Modifications See reg 11.02.

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[83,780] Consolidation of proceedings 248A (1) Where orders have been made, whether before or after the commencement of this section, for the administration under this Part of the estates of 2 or more members of a partnership or 2 or more persons jointly liable for a debt, the Court may consolidate the proceedings upon such terms as it thinks fit. (2) Where: (a) a member of a partnership has become, whether before or after the commencement of this section, a bankrupt or 2 or more members of a partnership have become, whether before or after the commencement of this section, bankrupts; and (b) an order has been made, whether before or after the commencement of this section, for the administration under this Part of the estate of another member of the partnership or orders have been made, whether before or after the commencement of this section, for the administration under this Part of the estates of 2 or more other members of the partnership; the Court may consolidate the proceedings upon such terms as it thinks fit. (3) Where: (a) one of the persons jointly liable for a debt has become, whether before or after the commencement of this section, a bankrupt or 2 or more of the persons jointly liable for a debt have become, whether before or after the commencement of this section, bankrupts; and (b) an order has been made, whether before or after the commencement of this section, for the administration under this Part of the estate of another person jointly liable for the debt or orders have been made, whether before or after the commencement of this section, for the administration under this Part of the estates of 2 or more persons jointly liable for the debt;

the Court may consolidate the proceedings upon such terms as it thinks fit. (4) Where the Court makes an order under subsection (1), (2) or (3), section 110 applies in the administration under this Act of all the estates (whether estates of bankrupts or of deceased debtors) to which that order relates. (5) Where the Court makes an order under subsection (1), (2) or (3) in relation to 2 or more estates, 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 being administered in bankruptcy and the date on which each order for administration under this Part was made in respect of those estates being administered under this Part; and (c) declare a specified time to be, for that purpose, the time that is the commencement of the bankruptcy in respect of each of those estates being administered in bankruptcy and the time at which the administration under this Part of each of those estates being administered under this Part (other than an [page 714] estate in respect of which the order for its administration under this Part was made before the commencement of this section) is, by virtue of section 247A, to be deemed to have commenced; and, if the Court does so, those estates shall be administered accordingly. [s 248A insrt Act 12 of 1980 s 140] SECTION 248A GENERALLY [83,780.5] Leave to commence proceedings Without the leave provided for in s 249(3) litigants cannot maintain any proceedings in a bankrupt estate. This leave can often be a part of proceedings taken by trustees in such statutes as the Trustees Act 1925 (NSW) for judicial advice as to the maintenance and commencement of such proceedings. The recent decision of Ward J in Frost & Fallon

[2011] NSWSC 591; BC201104266 is such an instance. See [17]. In those proceedings which included proceedings for devastavit, of particular interest in the decision was Her Honour’s citation of Kation Pty Ltd v Lamru Pty Ltd; Lewis v Nortex Pty Ltd (in liq) (2009) 257 ALR 336; [2009] NSWCA 145; BC200905175 where Hodgson JA stated at [213]: Where a trustee successfully defends a beneficiaries dispute against a particular class of beneficiaries, an appropriate costs order, in circumstances where the plaintiff beneficiaries were unable to pay the costs may be one in which the trustees obtain indemnification from the estate, with the shares of the unsuccessful beneficiaries to be used first in satisfying the right to indemnity: see National Trustees and Executors and Agency Co of Australasia Ltd v Barnes [1941] HCA 3; [1941] 64 CLR 268…

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[83,785] Vesting of property on making of order *249 (1) Subject to this Act, where an order is made for the administration of the estate of a deceased person under this Part: (a) the divisible property of the estate, not being after-acquired property, vests forthwith in the Official Trustee or, if when the order is made, a registered trustee is trustee of the estate of the deceased person under this Act, in that registered trustee; and (b) after-acquired property of the estate vests, as soon as it is acquired by, or devolves on, the estate, in the Official Trustee or, if a registered trustee is trustee of the estate of the deceased person under this Act, in that registered trustee; and is divisible amongst the creditors of the deceased person and of his or her estate in accordance with this Act. [subs (1) am Act 12 of 1980 353 s 141; Act 9 of 1992 s 42; Act 44 of 1996 s 3 and Sch 2]

(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 deceased person under this Act to be registered as the owner of any such property that is part of the divisible property of the estate, 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. [subs (2) am Act 12 of 1980 s 141]

(3) Except as provided by this Act, after an order has been made for the administration of the estate of a deceased person under this Part, it is not competent for a creditor:

(a) to enforce any remedy against the estate in respect of a debt provable in the administration; or [page 715] (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceedings in respect of such a debt or take any fresh step in such a proceeding. (4) After an order has been made for the administration of the estate of a deceased person under this Part, distress for rent shall not be levied or proceeded with against the divisible property of the estate, whether or not the deceased person was a tenant of the landlord by whom the distress is sought to be levied. (4A) Nothing in this section shall be taken to prevent a creditor from enforcing any remedy against the estate of a deceased person in relation to which the Court has made an order for administration under this Part, or against any property of such an estate that is not part of the divisible property of the estate, in respect of any liability of the estate under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this subsection). [subs (4A) insrt Act 12 of 1980 s 141]

(5) Nothing in this section affects the right of a secured creditor to realize or otherwise deal with his or her security. [subs (5) am Act 44 of 1996 s 3 and Sch 2]

(6) For the purposes of this section, where the administration of the estate of a deceased person under this Part is, by virtue of section 247A, to be deemed to have commenced before the death of the deceased person, the divisible property of the estate comprises: (a) property that formed part of the estate upon the death of the deceased person other than: (i) property that, if the deceased person had not died and a sequestration order had been made against him or her immediately before his or her death, would not have been divisible amongst his or her creditors under Part VI; or (ii) so much of:

(A)

the proceeds of a policy of life assurance or endowment assurance; or (B) a payment from a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993) or an approved deposit fund (within the meaning of that Act); (BAA) a payment from an exempt public sector superannuation scheme (within the meaning of that Act); or (BA) a payment from an RSA; as would not have been divisible among the creditors of the deceased person under Part VI if: (C) the deceased person had not died; and (D) a sequestration order had been made against the deceased person immediately before his or her death; and (E) the amount concerned had been paid immediately before his or her death; (b) property that was or is acquired by, or devolved or devolves on, the estate after the death of the deceased person and before an order releasing the estate from administration under this Part is made, not being property that, if the deceased person had not died and a sequestration order had been made against him or her immediately before his or her death, would not have been divisible amongst his or her creditors under Part VI; [page 716] (c) the capacity to exercise, and to take proceedings for exercising, all such powers in, over or in respect of property as might have been exercised by the legal personal representative of the deceased person for the benefit of the estate at any time before an order releasing the estate from administration under this Part is made; (d) property that forms part of the divisible property of the estate by

virtue of section 251 and any amount for which a person is liable to account to the trustee of the estate under subsection 251(2); (e) if, immediately before the death of the deceased person, any property was owned by the deceased person and another person or other persons as joint tenants — an amount equal to the value of the improvements (if any) made to that property wholly or principally by or at the expense of the deceased person after, or not earlier than 2 years before, the commencement of administration of his or her estate under this Part; (f) property (other than property that formed part of the estate of the deceased person upon his or her death) that belonged to, or was vested in, the deceased person at the commencement of administration of his or her estate under this Part or was acquired by, or devolved on, the deceased person after the commencement of administration of his or her estate under this Part and before his or her death, not being property that, if he or she had not died and a sequestration order had been made against him or her at the commencement of administration of his or her estate under this Part, would not have been divisible amongst his or her creditors under Part VI; and (g) the capacity to exercise, and take proceedings for exercising, all such powers in, over or in respect of property as might have been exercised by the deceased person for his or her own benefit at the commencement of administration of his or her estate under this Part, or at any time after commencement of administration of his or her estate under this Part and before his or her death. [subs (6) subst Act 12 of 1980 s 141; am Act 82 of 1993 s 9; Act 44 of 1996 s 3 and Sch 2; am Act 38 of 1999 Sch 1]

(7) For the purposes of this section, where the administration of the estate of a deceased person is under this Part, by virtue of section 247A, to be deemed to have commenced at the time of his or her death, the divisible property of the estate comprises: (a) property that formed part of the estate upon the death of the deceased person other than: (i) property that, if the deceased person had not died and a sequestration order had been made against him or her

immediately before his or her death, would not have been divisible amongst his or her creditors under Part VI; or (ii) so much of: (A) the proceeds of a policy of life assurance or endowment assurance; or (B) a payment from a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993) or an approved deposit fund (within the meaning of that Act); or (BAA) a payment from an exempt public sector superannuation scheme (within the meaning of that Act); or (BA) a payment from an RSA; [page 717] as would not have been divisible among creditors of the deceased person under Part VI if: (C) the deceased person had not died; and (D) a sequestration order had been made against the deceased person immediately before his or her death; and (E) the amount concerned had been paid immediately before his or her death; (b) property that was or is acquired by, or devolved or devolves on, the estate after the death of the deceased person and before an order releasing the estate from administration under this Part is made, not being property that, if the deceased person had not died and a sequestration order had been made against him or her immediately before his or her death, would not have been divisible amongst his or her creditors under Part VI; (c) the capacity to exercise, and to take proceedings for exercising, all such powers in, over or in respect of property as might have been exercised by the legal personal representative of the deceased

person for the benefit of the estate at any time before an order releasing the estate from administration under this Part is made; (d) property that forms part of the divisible property of the estate by virtue of section 251 and any amount for which a person is liable to account to the trustee of the estate under subsection 251(2); and (e) if, immediately before the death of the deceased person, any property was owned by the deceased person and another person or other persons as joint tenants — an amount equal to the value of the improvements (if any) made to that property wholly or principally by or at the expense of the deceased person after, or not earlier than 2 years before, the commencement of administration of his or her estate under this Part. [subs (7) insrt Act 12 of 1980 s 141; am Act 82 of 1993 s 9; Act 44 of 1996 s 3 and Sch 2; Act 62 of 1997 s 3 and Sch 3; am Act 38 of 1999 Sch 1]

(8) For the purposes of this section, where the administration of the estate of a deceased person under this Part is, by virtue of section 247A, to be deemed to have commenced after the death of the deceased person, the divisible property of the estate comprises: (a) property that formed part of the estate at the commencement of administration of the estate under this Part other than: (i) property that, if the deceased person had not died and a sequestration order had been made against him or her at that time, would not have been divisible amongst his or her creditors under Part VI; or (ii) so much of: (A) the proceeds of a policy of life assurance or endowment assurance; or (B) a payment from a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993) or an approved deposit fund (within the meaning of that Act); or (BAA) a payment from an exempt public sector superannuation scheme (within the meaning of that Act); or (BA) a payment from an RSA; as would not have been divisible among the creditors of the

deceased person under Part VI if: (C) the deceased person had not died; and [page 718] (D)

a sequestration order had been made against the deceased person at that time; and (E) the amount concerned had been paid at that time; (b) property that was or is acquired by, or devolved or devolves on, the estate after the commencement of administration under this Part and before an order releasing the estate from administration under this Part is made, not being property that, if the deceased person had not died and a sequestration order had been made against him or her at the commencement of administration of his or her estate under this Part, would not have been divisible amongst his or her creditors under Part VI; (c) the capacity to exercise, and to take proceedings for exercising, all such powers in, over or in respect of property as might have been exercised by the legal personal representative of the deceased person for the benefit of the estate at the commencement of administration under this Part or at any time after that time and before an order releasing the estate from administration under this Part is made; and (d) property that forms part of the divisible property of the estate by virtue of section 251 and any amount for which a person is liable to account to the trustee of the estate under subsection 251(2). [subs (8) insrt Act 12 of 1980 s 141; am Act 82 of 1993 s 9; Act 44 of 1996 s 3 and Sch 2; Act 62 of 1997 s 3 and Sch 3; am Act 38 of 1999 Sch 1]

(9) The value of any improvements made to property owned by a deceased person in respect of whose estate an order is made for administration under this Part and another person or other persons as joint tenants shall, for the purposes of paragraph (6)(e) or (7)(e), be determined as at the date of the death of the deceased person. [subs (9) insrt Act 12 of 1980 s 141]

(10) In this section:

after-acquired property, in relation to an estate, means property that is acquired by, or devolves on, the estate of the deceased person on or after the day on which the order for the administration of the estate under this Part is made, being property that is part of the divisible property of the estate; commencement of administration, in relation to the administration of the estate of a deceased person under this Part, means the time at which the administration of the estate under this Part is, by virtue of section 247A, to be deemed to have commenced. [subs (10) insrt Act 12 of 1980 363 s 141] SECTION 249 GENERALLY [83,785.5] Equivalent provisions Following is a list of the equivalent provisions under the sections of the Act:

s 249(1) s 249(2) s 249(3) s 249(4) s 249(5) s 249(6)(b) s 249(6)(c)

s 58(1) ss 58(2), 132(3) s 58(3) s 58(4) s 58(5) s 116(2) ss 134, 135 [page 719]

[83,785.10] Divisible property The divisible property of the estate of a deceased person excludes property which would not have been divisible amongst the bankrupt’s creditors under Pt VI. Property held by a bankrupt in trust for another person is not so divisible: s 116(2)(a). See also Loftus v MacDonald (1974) 3 ALR 404.

____________________ *Editor’s Note: See [79,945] concerning the application of subss (6)(a)(ii), (7)(a)(ii) and (8)(a)(ii).

[83,790] Charge over property owned in joint tenancy 249A (1) Where: (a) an amount equal to the value of improvements made to property owned by a deceased person in respect of whose estate an order is made for administration under this Part and another person or other persons as joint tenants forms, for the purposes of section 249, part of the divisible property of the estate of the deceased person; and (b) the property is owned by that other person, or is owned (whether as joint tenants or otherwise) by all or some of those other persons and no other person, on the day on which the order for the administration of the estate under this Part is made; there is created, by force of this subsection, a charge on that property to secure the payment of that amount. (2) The charge created on property by subsection (1): (a) is subject to every charge or encumbrance to which the property was subject immediately before the time at which the order for administration under this Part was made; (b) subject to subsection (3), has priority over all other charges or encumbrances whatsoever; and (c) subject to subsection (3), is not affected by any change of ownership of the property. (3) A charge created by subsection (1) on any property: (a) ceases to have effect in respect of the property upon the sale of the property to a bona fide purchaser for value who, at the time of the purchase, has no notice of the charge; and (b) is postponed in favour of a further charge, or an encumbrance, on the property acquired bona fide and for value by a person who, at the time of the acquisition, had no notice of the first-mentioned charge. (4) Where a charge is created by subsection (1) on property of a particular kind and the provisions of any law of the Commonwealth or of a State or Territory provide for the registration of charges over property of that kind,

the trustee of the estate may cause the charge to be registered under the provisions of that law and, if he or she does so, a person who purchases or otherwise acquires the property, or an interest in the property, after registration of the charge shall, for the purposes of subsection (3), be deemed to have notice of the charge. [s 249A insrt Act 12 of 1980 s 142; am Act 44 of 1996 s 3 and Sch 2] SECTION 249A GENERALLY [83,790.5] Generally The administration of the estate of a deceased is deemed to have commenced before the date of death of the deceased where the deceased committed an act of bankruptcy within six months immediately preceding the day on which he or she died. In that event property forming part of the estate of the deceased comprises, inter alia, property held by the [page 720] deceased on joint tenancy but only to extent specified in s 249(6)(e). The amount equal to the value of the improvements made to property referred to therein gives rise to the creation of a charge on the property under s 249A(1).

____________________

[83,795] Effect of order under Part where deceased person was bankrupt 250 (1) Where an order is made for the administration of the estate of a deceased person under this Part who was, at the time of his or her death, a bankrupt: (a) property: (i) that was acquired by, or devolved on, the deceased person on or after the date of the bankruptcy; and (ii) that is divisible amongst the creditors of the deceased person, but had not been distributed amongst the creditors in the bankruptcy before the date on which the order was made; shall (subject to any disposition of that property made by the trustee in the bankruptcy without knowledge of the presentation of the petition on which the order was made and subject also to section 126 in its application to the administration of deceased estates under this Part by virtue of section 248) vest forthwith in the trustee of the estate of the deceased person; (b) property: (i) that is acquired by, or devolves on, the estate of the deceased person on or after the date of the making of the order; and (ii) that is divisible amongst the creditors of the estate under this Part; vests in the trustee of the estate of the deceased person under this Part as soon as it is acquired by, or devolves on, the estate; (c) the trustee in the bankruptcy: (i) shall be deemed to be a creditor in the administration of the estate of the deceased person under this Part in respect of any unsatisfied balance of his or her expenses or remuneration in the bankruptcy, the liabilities incurred by him or her in administering the estate in the bankruptcy and the debts proved in the bankruptcy (whether or not those debts are entitled to priority, or are postponed, in the bankruptcy); (ii) shall rank equally with the ordinary unsecured creditors of the

estate of the deceased person in its administration under this Part; and (iii) may, where he or she has lodged a proof of debt in the administration under this Part, amend that proof of debt, without the consent of the trustee of the estate of the deceased person under this Part, for the purpose of adding: (A) his or her expenses in the 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 bankruptcy after the proof of debt was lodged; or (C) debts proved in the bankruptcy after the proof of debt was lodged; or, with the consent of the trustee of the estate of the deceased person, 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 bankruptcy continues to be void as against that trustee; and [page 721] (e) a transaction that, by virtue of section 120, 121, 122, 128B or 128C, is void as against the trustee in the bankruptcy continues to be void as against that trustee. [subs (1) am Act 119 of 1987 s 89; Act 44 of 1996 s 3 and Sch 2; Act 57 of 2007 s 3 and Sch 1[9], opn 28 July 2006]

(2) Where: (a) the trustee of the estate of a bankrupt who has died receives, after the death of the bankrupt, notice of the presentation of a creditor’s petition against the deceased bankrupt, being a petition that was presented before he or she died; or (b) the trustee of the estate of a bankrupt who has died receives notice of the presentation of a petition for the administration of the estate

of the deceased bankrupt under this Part; the trustee shall hold the after-acquired property of the deceased 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. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) Where the trustee of the estate of a bankrupt who has died receives, after the death of the bankrupt, notice of the reference to the Court of a debtor’s petition against the deceased bankrupt, being a petition that was presented before he or she died, the trustee shall hold the after-acquired property of the deceased bankrupt that is then in the possession of the trustee, or the proceeds thereof, until the Court has dealt with the petition. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) Where the trustee of the estate of a bankrupt who has died is holding after- acquired property of the deceased bankrupt, or the proceeds of any such property, in pursuance of subsection 59(2) or (3) or subsection (2) or (3) of this section and an order is made for the administration of the estate of the deceased bankrupt under this Part, the trustee shall: (a) in a case where the trustee is also the trustee in relation to the administration of the estate of the deceased bankrupt under this Part — hold all such property, and the proceeds of such property, as trustee in relation to the administration of the estate of the deceased bankrupt under this Part; or (b) in any other case — deliver all such property, and pay the proceeds of such property, to the trustee in relation to the administration of the estate of the deceased bankrupt under this Part. (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 in relation to the administration of the estate of a deceased person under this Part to be registered as the owner of any such property that is part of the property of the estate, 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 deceased bankrupt, means such of the property that was acquired by, or devolved on, the bankrupt on or after the date of the bankruptcy and before he or she died or that was acquired by, or devolved on, the estate of the

bankrupt after his or her death, being property divisible among the creditors of the deceased bankrupt, as has not been distributed amongst the creditors in the bankruptcy. [subs (6) am Act 44 of 1996 s 3 and Sch 2] [s 250 subst Act 12 of 1980 s 142]

[page 722]

[83,800] Real property devised by will that vests directly in devisee to form part of estate in certain cases 251 (1) Subject to this section, where an order for the administration of the estate of a deceased person under this Part is made within 12 months after the death of that person, any real property of the deceased person devised by his or her will which, under a law of a State or Territory, vests, either upon the death of that person or upon compliance with a law of the State or Territory relating to the registration of interests in land, directly in the devisee, forms part of the divisible property of the estate. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Where, before the making of such an order, the devisee has disposed of the property devised, or has mortgaged or charged it, for valuable consideration, to a person acting in good faith, the property does not form part of the divisible property of the estate, or forms part of the divisible property of the estate subject to the mortgage or charge, as the case requires, but the devisee is liable to account to the trustee of the estate for the proceeds of the disposal of the property or for an amount equal to the amount for which it is mortgaged or charged, as the case requires.

[83,805] Liability of legal personal representative 252 (1) A payment or transfer of property made by the legal personal representative of a deceased person: (a) after service on him or her of a petition under this Part in respect of the estate of that person; (b) in a case to which subsection 245(1) applies, after he or she has knowledge of the presentation of a petition against that person; or (c) after a petition is presented under section 247 in respect of the estate of that person; does not, if an order for the administration of the estate of that person is made under this Part on that petition, operate as a discharge to the legal personal representative as between himself or herself and the trustee. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) Except as provided by subsection (1), nothing in this Part shall be taken to impose on the legal personal representative of a deceased person any liability for any payment or transfer of property made, or any act or thing done, in good faith by the legal personal representative before an order for administration of the estate of the deceased person is made under this Part.

[83,810] Annulment on payment of debts 252A (1) If the trustee of the estate of a deceased person is satisfied that all the debts of the estate of a deceased person have been paid in full, the order for the administration of the estate under this Part is annulled, by force of this subsection, on the date on which the last such payment was made. (2) The trustee must, before the end of the period of 2 days beginning on that date, give to the Official Receiver a written certificate setting out the name and the administration number of the estate and the date of the annulment. Penalty: 5 penalty units. Note: See also section 277B (about infringement notices). [subs (2) am Act 44 of 1996 s 3 and Sch 1; Act 106 of 2010 s 3 and Sch 2[65] and [66], opn 1 Dec 2010]

(3) Subsection (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (3) insrt Act 106 of 2010 s 3 and Sch 2[67], opn 1 Dec 2010]

[page 723] (4) For the purposes of this section, if a debt has been proved by a creditor but the creditor cannot be found or cannot be identified, the debt may be paid to the Official Receiver and, if so paid, is taken for the purposes of this section to have been paid in full to the creditor. [subs (4) am Act 44 of 1996 s 3 and Sch 1]

(4A) Money received by the Official Receiver under subsection (4) is received on behalf of the Commonwealth. [subs (4A) insrt Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

(5) If money is paid to the Official Receiver under subsection (4), the provisions of subsections 254(3) and (4) apply in relation to that money as if

it had been paid to the Commonwealth by a trustee under subsection 254(2). [subs (5) subst Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

(6) In this section: debts of the estate of a deceased person means all debts that have been proved in the administration of the estate and includes interest payable on such of those debts as bear interest, and the costs, charges and expenses of the administration of the estate, including the remuneration and expenses of the trustee. [s 252A subst Act 9 of 1992 s 43] SECTION 252A GENERALLY [83,810.5] Equivalent provision For the equivalent provision, see s 153A.

____________________

[83,812] Annulment by Court 252B If the Court is satisfied that an order for the administration of the estate of a deceased person under this Part ought not to have been made, the Court may make an order annulling the administration of the estate under this Part. [s 252B insrt Act 9 of 1992 s 43] SECTION 252B GENERALLY [83,812.5] Equivalent provision For the equivalent provision, see s 153B.

____________________

[83,814] Effect of annulment 252C (1) If the administration of the estate of a deceased person under this Part is annulled under section 252A or 252B: (a) all sales and dispositions of property and payments duly made, and all acts done, by the trustee of the estate under this Part or any person acting under the authority of the trustee or the Court before the annulment are taken to have been validly made or done; and (b) the trustee may apply the property still vested in the trustee in connection with the administration of the estate in payment of the

costs, charges and expenses of the administration of the estate, including the remuneration and expenses of the trustee; and (c) subject to subsection (2), the remainder (if any) of the property still vested in the trustee in connection with the administration of the estate reverts to the estate of the deceased person. [page 724] (2) If an application is made to the Court by a person claiming an interest in property referred to in paragraph (1)(c), the Court, after hearing such persons as it thinks fit, may make an order, either unconditionally or on such conditions as the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person in whom, or to whom, it seems to the Court to be just and equitable that it should be vested or delivered, or to a trustee for that person. (3) Subject to subsection (4), if an order vesting property in a person is made under subsection (2), the property vests immediately in the person without any conveyance, transfer or assignment. (4) If: (a) the property to which such an order relates is property the transfer of which is required by a law of the Commonwealth, of a State or of a Territory to be registered; and (b) that law enables the registration of such an order; the property, even though it vests in equity in the person named in the order, does not vest in that person at law until the requirements of that law have been complied with. [s 252C insrt Act 9 of 1992 s 43] SECTION 252C GENERALLY [83,814.5] Equivalent provision For the equivalent provision, see s 154.

____________________

[83,815] Application of surplus

253 [s 253 rep Act 9 of 1992 s 43]

PART XIA — FARMERS’ DEBTS ASSISTANCE [Pt XIA insrt Act 122 of 1970 s 17]

[83,915] Interpretation 253A In this Part, the relevant authority, in relation to a stay under a proclaimed law in its application in relation to a person or the estate of a deceased person, means the person administering the proclaimed law by or under which the stay was or is in force. [s 253A insrt Act 122 of 1970 s 17] SECTION 253A GENERALLY [83,915.5] Definition For the definition of “proclaimed law”, see s 5.

____________________

[83,920] Law of State or Territory may be proclaimed 253B Where a law of a State or Territory (including a law that came into operation before the commencement of this section): (a) provides for the giving of financial assistance for the purpose of discharging debts of persons who are farmers within the meaning of the Loan (Farmers’ Debt Adjustment) Act 1935; or (b) [repealed] (c) gives effect to the agreement between the Commonwealth and the States the execution of which, on behalf of the Commonwealth, was approved by the States Grants (Rural Adjustment) Act 1976 or that agreement as subsequently amended [page 725] (including that agreement as amended by the agreement between

the Commonwealth, the States and the Northern Territory the execution of which, on behalf of the Commonwealth, was approved by the States and Northern Territory Grants (Rural Adjustment) Act 1979 or that last-mentioned agreement as subsequently amended); or (d) gives effect to the agreement between the Commonwealth and the States and the Northern Territory the execution of which, on behalf of the Commonwealth, was approved by the States and Northern Territory Grants (Rural Adjustment) Act 1985 or that agreement as subsequently amended; or (e) gives effect to an agreement between the Commonwealth and a State or the Northern Territory whose execution, on behalf of the Commonwealth, was approved by the States and Northern Territory Grants (Rural Adjustment) Act 1988, or that agreement as subsequently amended; the Governor-General may, by Proclamation, specify the law as a law in relation to which this Part applies. [s 253B subst Act 12 of 1980 s 144; am Act 168 of 1986 s 3; Act 115 of 1990 s 33; Act 73 of 2008 s 3 and Sch 3[26], opn 3 July 2008]

[83,925] Notice about stay under proclaimed law 253C The relevant authority may give to the Official Receiver a written notice that a stay under a proclaimed law applies to a person specified in the notice. [s 253C subst Act 44 of 1996 s 3 and Sch 1]

[83,930] Registrar to notify relevant authority of pending proceedings 253D [s 253D rep Act 44 of 1996 s 3 and Sch 1]

[83,935] Relevant authority may apply for stay of proceedings under certain petitions 253E (1) If: (a) a creditor’s petition is presented against a person (whether alone or

jointly with another person) or against a partnership of which a person is a member; or (b) a debtor’s petition is presented against a partnership of which a person is a member and that person is not one of the partners presenting the petition; and a stay under a proclaimed law applies in relation to that person, the relevant authority may, at any time before a sequestration order is made on the creditor’s petition or before the debtor’s petition is accepted by the Official Receiver, as the case may be, apply to the Court for an order staying all or any proceedings under the petition, and the Court may, if it thinks fit, upon such terms and conditions as it thinks proper, stay all or any proceedings under the petition. [subs (1) am Act 44 of 1996 s 3 and Sch 1]

(2) If a petition is presented under section 244 or section 247 for an order for the administration of the estate of a deceased person and a stay under a proclaimed law applies in relation to the estate, the relevant authority may, at any time before the order is made, apply to the Court for an order staying all or any proceedings under the petition, and the Court may, if it thinks fit, upon such terms and conditions as it thinks proper, stay all or any proceedings under the petition. (3) An order made under this section may provide that the stay is to be of indefinite duration or for such period as the Court thinks fit. [s 253E insrt Act 122 of 1970 s 171]

[page 726]

[83,940] Relevant authority may be heard on application relating to debtor’s petition 253F (1) The relevant authority may appear and be heard at the hearing of: (a) an application under subsection 55(6A) for leave to present a petition against a debtor in relation to whom a stay applies under a proclaimed law; or (b) an application under subsection 56A(7) by a person to whom a stay under a proclaimed law applies for the Court’s permission to join in

presenting a petition against a partnership; or (c) an application under subsection 57(8) by a person in relation to whom a stay under a proclaimed law applies for leave to join in presenting a petition under section 57. (2) The relevant authority may appear in person or be represented by a barrister or solicitor. [s 253F subst Act 44 of 1996 s 3 and Sch 1]

PART XII — UNCLAIMED DIVIDENDS OR MONEYS

[84,040] Payment of unclaimed moneys to the Commonwealth 254 (1) In this section, trustee means: (a) a trustee of the estate of a bankrupt; or (aa) the administrator of a debt agreement; or (b) a trustee of a personal insolvency agreement; or (c) a trustee of a composition or a scheme of arrangement; or (d) a trustee of the estate of a deceased person in respect of which an order has been made under Part XI of this Act; and includes the Official Trustee. [subs (1) am Act 12 of 1980 s 147; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 44 of 2007 s 3 and Sch 2[74]–[76], opn 1 July 2007]

(2) Where a trustee has under his or her control: (a) any dividends or other moneys that have remained unclaimed for a period exceeding 6 months; or (b) any moneys that it is proposed not to distribute or pay to any person; he or she shall forthwith pay those moneys to the Commonwealth. [subs (2) am Act 44 of 1996 s 3 and Sch 2; Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

(2A) Where: (a) the Court has, after the presentation of a creditor’s petition against a debtor, directed the Official Trustee, an Official Receiver or a registered trustee to take control of the property of the debtor; (b) the petition has been withdrawn or dismissed;

(c) the Official Trustee, Official Receiver or registered trustee, as the case may be, has moneys under its control in pursuance of the direction; and (d) it is not reasonably practicable to pay those moneys to the person entitled to them; the Official Trustee, Official Receiver or registered trustee, as the case may be, shall pay those moneys to the Commonwealth. [subs (2A) insrt Act 12 of 1980 s 147; am Act 74 of 1981 s 145; Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

(3) A person who claims to be entitled to any moneys that have been paid to the Commonwealth by a trustee in pursuance of subsection (2) or (2A) may apply to the Court [page 727] for an order under this subsection declaring him or her to be so entitled and, if the Court is satisfied that the applicant is entitled to those moneys or a part of those moneys, it may make an order accordingly. [subs (3) am Act 12 of 1980 s 147; Act 44 of 1996 s 3 and Sch 2; Act 8 of 2005 s 3 and Sch 1, opn 22 Feb 2005]

(4) Upon receipt by the Official Receiver of an office copy of an order under subsection (3), the Official Receiver shall pay to the person in whose favour the order was made the amount specified in the order out of moneys lawfully available for the purpose. [subs (4) am Act 91 of 1976 s 3; Act 44 of 1996 s 3 and Sch 1]

PART XIII — EVIDENCE

[84,140] Record of proceedings or evidence 255 (1) A transcript or electronic or magnetic recording that purports to be a record of proceedings under section 77C or 81, or of proceedings before a court, is to be taken to be a record of that kind, unless the contrary is proved. (2) The transcript or recording is admissible as evidence of the matters described by a person whose words are recorded in the transcript or recording, unless the Court, or a court in which the transcript is sought to be

introduced, makes an order to the contrary. (3) The cost of preparing a transcript or recording is an expense of administration of the estate of the bankrupt or debtor to which the matters recorded relate. [s 255 subst Act 44 of 1996 s 3 and Sch 1] SECTION 255 GENERALLY [84,140.10] Sections 77C and 81 Transcripts and/or recordings of s 77C or s 81 examinations are not admissible in evidence unless the person examined is a party to the proceeding pursuant to s 81(17). There is nothing in the language of subs (2) that indicates the legislature intended it to provide the admission into evidence of any and all transcripts/recordings of inter alia, s 81 examinations: Re Schofield; Ex parte Rangott v P & B Barron Pty Ltd (1997) 143 ALR 185. On the use of transcripts see the discussion in Re Morris; Ex parte Donnelly (1997) 77 FCR 303; 148 ALR 349. In Colonial Mutual Life Assurance Society Ltd v Donnelly (1998) 82 FCR 418; 154 ALR 417, the Full Court held that a transcript is admissible as evidence of both the words spoken by the examinee, and the matters described by the examinee in his or her evidence. Nevertheless, the court has a discretion under s 255(2) to exclude evidence otherwise admissible under that section (for example on the basis that it is unfairly prejudicial). The court left open the question of what relationship s 255(2) of the Act bears to ss 135 and 136 of the Evidence Act 1995. See [81,550.70].

____________________

[84,145] Evidence of matters stated in notices published in Gazette 256 A copy of the Gazette containing any notice inserted in it in pursuance of this Act is prima facie evidence of the matters stated in the notice. [s 256 am Act 12 of 1980 s 149]

[84,150] Evidence of proceedings at meetings of creditors or committee of inspection 257 The minutes of proceedings at a meeting of creditors or of a committee of inspection under this Act, signed by a person describing himself or herself as, or appearing to have been, chair of the meeting is prima facie evidence of those proceedings. [s 257 am Act 12 of 1980 s 150; Act 44 of 1996 s 3 and Sch 2; Act 152 of 1997 s 3 and Sch 2]

[page 728]

[84,155] Presumption about due convening of meetings etc 258 Subject to this Act, unless the contrary is shown: (a) a meeting of creditors or of a committee of inspection in respect of which minutes of proceedings have been signed by a person describing himself or herself as, or appearing to have been, chair of the meeting shall be deemed to have been duly convened and held; and (b) all resolutions passed or proceedings taken at such a meeting shall be deemed to have been duly passed or taken. [s 258 am Act 119 of 1987 s 90; Act 44 of 1996 s 3 and Sch 2; Act 152 of 1997 s 3 and Sch 2] SECTION 258 GENERALLY [84,155.5] “the contrary” For a case where there was failure to show “the contrary”, see Re Venetoulis; Ex parte Calsil Ltd (1976) 13 ALR 625.

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[84,160] Evidence of bankruptcy documents 259 [s 259 rep Act 44 of 1996 s 3 and Sch 1]

[84,165] Evidence as to bankruptcy and appointment of trustee etc 260 [s 260 rep Act 44 of 1996 s 3 and Sch 1]

[84,170] Evidence of appointment of trustee 261 [s 261 rep Act 12 of 1980 s 152]

[84,175] Swearing of affidavits 262 (1) An affidavit to be used for the purposes of this Act may be sworn within the Commonwealth or a Territory of the Commonwealth before a person authorized to administer oaths for the purposes of the High Court or the Supreme Court of a State or Territory of the Commonwealth, a Judge of a

Court having jurisdiction under this Act, an Official Receiver, a justice of the peace, a commissioner for affidavits or a commissioner for declarations. [subs (1) am Act 122 of 1970 s 18; Act 44 of 1996 s 3 and Sch 1]

(2) An affidavit to be used for the purposes of this Act may be sworn at a place outside the Commonwealth and the Territories of the Commonwealth before: (aa) a Commissioner of the High Court authorized to administer oaths in that place for the purposes of the High Court; (a) a commissioner of the Supreme Court of a State or Territory of the Commonwealth for taking affidavits empowered and authorized to act in that place; (b) an Australian Diplomatic Officer or an Australian Consular Officer, as defined by the Consular Fees Act 1955, exercising his or her function in that place; (ba) an employee of the Commonwealth who is: (i) authorised under paragraph 3(c) of the Consular Fees Act 1955; and (ii) exercising his or her function in that place; (bb) an employee of the Australian Trade Commission who is: (i) authorised under paragraph 3(d) of the Consular Fees Act 1955; and (ii) exercising his or her function in that place; (c) a notary public exercising his or her function in that place; or [page 729] (d) a person qualified to administer an oath in that place, being a person certified by a person mentioned in any of paragraphs (aa) to (c), or by the superior court of that place, to be so qualified. [subs (2) am Act 122 of 1970 s 18; Act 12 of 1980 s 153; Act 44 of 1996 s 3 and Sch 2; Act 62 of 2004 s 3 and Sch 1, opn 27 May 2004]

PART XIV — OFFENCES

[84,275] Concealment etc of property etc 263 (1) A person shall not: (a) with intent to defraud the creditors of: (i) a bankrupt; (ii) a deceased person or the estate of a deceased person; or (iii) a debtor who has executed a personal insolvency agreement, a deed of assignment or a deed of arrangement; conceal property of the bankrupt, of the deceased person or his or her estate or of the debtor; (b) receive property: (i) from a bankrupt or a debtor who has executed a personal insolvency agreement, a deed of assignment or a deed of arrangement or a person on behalf of a bankrupt or such a debtor; (ii) from the legal personal representative of a deceased person; or (iii) from a debtor who subsequently becomes a bankrupt or executes such an agreement or deed, or a person on behalf of such a debtor; with intent to defraud, or to assist the bankrupt, the legal personal representative or the debtor to defraud, the creditors of the bankrupt, of the deceased person or his or her estate or of the debtor; (c) with intent to defraud, insert or cause to be inserted in the Gazette or in a newspaper an advertisement purporting to be under this Act without authority or knowing it to be false in any particular; or (d) with intent to defraud: (i) in any proceedings in bankruptcy; (ii) in connexion with the administration of the estate of a deceased person; or (iii) in connexion with the administration of a debtor’s affairs under a personal insolvency agreement, a deed of assignment, a deed of arrangement, a composition or a scheme of arrangement; make a false claim or a declaration or statement of account that is

untrue in any particular or lodge a proof of debt that is untrue in any particular. Penalty: Imprisonment for 5 years. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 106 of 2010 s 3 and Sch 2[68], opn 1 Dec 2010]

(2) A person is guilty of an offence if: (a) the person disposes of, receives, removes, retains or conceals property that has been seized: (i) as part of the property of a bankrupt; or (ii) as part of the estate of a deceased person; or (iii) under a personal insolvency agreement, a deed of assignment; and (b) the first-mentioned person knows that the property has been so seized. Penalty: Imprisonment for 1 year. [subs (2) subst Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 730] (3) In this section: composition does not include a composition entered into for the purposes of a proclaimed law. [def am Act 44 of 1996 s 3 and Sch 1]

deceased person means a deceased person in respect of whose estate an order for administration has been made under Part XI of this Act. [def am Act 44 of 1996 s 3 and Sch 1]

deed of arrangement does not include a deed of arrangement executed for the purposes of a proclaimed law. [def am Act 44 of 1996 s 3 and Sch 1]

deed of assignment [def rep Act 44 of 1996 s 3 and Sch 1]

scheme of arrangement does not include a scheme of arrangement made or entered into for the purposes of a proclaimed law.

[def am Act 44 of 1996 s 3 and Sch 1] SECTION 263 GENERALLY [84,275.5] Attempt to defraud This is read as including an attempt to defraud any one or more of the creditors: s 6. [84,275.10] Property of the bankrupt The property of the bankrupt means the property divisible amongst the bankrupt’s creditors and 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: see s 5 definition. [84,275.15] Property This means real or personal property of every description whether situated 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 real or personal property: see s 5 definition.

____________________

[84,280] False affidavits 263A A person who intentionally makes a false statement in an affidavit to be used for the purposes of this Act is guilty of an offence and is punishable: (a) upon summary conviction — by a fine not exceeding $200, or imprisonment for a period not exceeding 6 months, or both; or (b) upon conviction on indictment — by imprisonment for a period not exceeding 4 years. [s 263A insrt Act 122 of 1970 s 20; am Act 12 of 1980; Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

[84,285] False proof of debts 263B [s 263B rep Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001] SECTION 263B GENERALLY [84,285.5] Misleading A statement is misleading if it would lead one ordinary member of the public, likely to read the statement or to be influenced by it, into error: Keenhan v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77.

____________________ [page 731]

[84,290] False claims about a creditor’s entitlement to vote *263C (1) A creditor must not give to the trustee a voting document knowing or reckless that the document is false or misleading in a material particular. Penalty: imprisonment for 6 months. [subs (1) am Act 80 of 2004 s 3 and Sch 4, opn 1 Dec 2004]

(2) In this section: give includes cause to be given. section 64D statement [def rep Act 80 of 2004 s 3 and Sch 4, opn 1 Dec 2004]

trustee means: (a) a trustee in a bankruptcy; or (b) a trustee of a composition or scheme of arrangement under Division 6 of Part IV; or (c) [repealed] (d) a controlling trustee as defined in Part X; or (e) a trustee of a personal insolvency agreement under Part X; or (f) a trustee of an estate being administered under Part XI. [def am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 44 of 2007 s 3 and Sch 2[77], opn 1 July 2007]

voting document means: (a) a statement that is: (i) described in section 64D, as that section applies of its own force, or as it is applied by another provision of this Act; and (ii) given to the trustee at or before a meeting called for the purposes of Part IV, X or XI; or (b) a form that is: (i) described in section 64E, as that section applies of its own force, or as it is applied by another provision of this Act; and (ii) given to the trustee at or before a meeting called for the

purposes of Part IV, X or XI. [def insrt Act 80 of 2004 s 3 and Sch 4, opn 1 Dec 2004; am Act 44 of 2007 s 3 and Sch 2[78], opn 1 July 2007] [s 263C subst Act 44 of 1996 s 3 and Sch 1] *Editor’s Note: Section 263C as it stood prior to substitution can be found in G Bigmore, Annotated Bankruptcy Act 1966 & Rules, Butterworths, Sydney, 1996 ed at [84,290]. The new section applies only in relation to s 64D statements given on or after 16 December 1996.

[84,295] Forgery of process etc 264 [s 264 rep Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001]

[84,300] Failure of person to attend before the Court etc *264A (1) This section applies to a person who: (a) is served, whether before or after the commencement of this subsection, with a summons under this Act to attend for examination under a provision of this Act [page 732] (other than section 81), or to appear as a witness before the Court, and is tendered a reasonable sum for expenses; or (b) is not a relevant person within the meaning of section 81 but is served, whether before or after the commencement of this section, with a summons to attend for examination under that section and is tendered a reasonable sum for expenses; or (c) is a relevant person within the meaning of section 81 and is served, on or after the commencement of this section, with a summons to attend for examination under that section. [subs (1) subst Act 115 of 1990 s 35]

(1A) A person to whom this section applies must not, after the commencement of this section: (a) fail to attend as required by the summons served on the person; or

fail to appear and report from day to day, unless excused or released from further attendance by the Court, the Registrar or the magistrate, as the case may be. Penalty: Imprisonment for 6 months. (b)

[subs (1A) insrt Act 115 of 1990 s 35; am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(1B) Subsection (1A) does not apply if the person 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). [subs (1B) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) Nothing in this section limits the power of the Court to punish persons for contempt of court, but a person shall not be punished under this section and for contempt of court in respect of the same act or omission. [s 264A insrt Act 12 of 1980 s 155] SECTION 264A GENERALLY [84,300.5] Cross-references For provisions where a person can be required to attend for examination other than pursuant to s 81, see s 50(2). Note [81,550.75] in relation to contempt. [84,300.10] Relevant person For the purposes of ss 81 and 264A, this means the bankrupt.

____________________ *Editor’s Note: Savings provisions are contained in s 35(2) of the Law and Justice Legislation Amendment Act 1990 which provides as follows: “(2) Subsection 264A(1) of the Principal Act, as in force immediately before the commencement of this section, continues to apply to: (a) a person served, before that commencement, with a summons to attend for examination under section 69 of that Act, as so in force; and (b) a person who was a relevant person within the meaning of section 81 of the Principal Act, as in force immediately before the commencement of this section, and who was served, before that commencement, with a summons to attend for examination under that section.”

[84,305] Arrest of person failing to attend before the Court etc 264B (1) Subject to subsection (2), where a person who is served, whether before or after the commencement of this section, with a summons referred to in subsection 264A(1): (a) fails to attend before the Court, the Registrar or the magistrate, as

the case may be, as required by the summons; or (b) fails to appear and report himself or herself from day to day as required by the Court, the Registrar or magistrate, as the case may be; the Court, the Registrar or the magistrate, as the case may be, may, on proof by affidavit of the service of the summons, issue a warrant for the apprehension of the person. (2) The Court, the Registrar or the magistrate shall not issue a warrant under subsection (1) for the apprehension of a person mentioned in paragraph 264A(1)(a) or (b) who has failed to attend for examination under a provision of this Act, or to appear as a [page 733] witness before the Court, as required by a summons under this Act unless the Court, the Registrar or the magistrate, as the case may be, is satisfied, on proof by affidavit, that the person was tendered a reasonable sum for expenses. [subs (2) am Act 119 of 1987 s 93; Act 115 of 1990 s 36]

(3) A warrant issued under subsection (1) authorizes the apprehension of the person and his or her being brought before the Court, the Registrar or the magistrate, as the case may be, and his or her detention in custody until he or she is released by order of the Court, the Registrar or the magistrate, as the case may be. [subs (3) am Act 44 of 1996 s 3 and Sch 2]

(4) A warrant issued under subsection (1) may be executed by a constable and a constable executing the warrant has the power to break and enter any place or building for the purpose of executing the warrant. (5) The Court, the Registrar or the magistrate, as the case may be, may order a person apprehended under this section to pay the costs of the apprehension. (6) The apprehension of a person under this section does not relieve him or her from any liability incurred by him or her by reason of his or her failure to attend before the Court, the Registrar or the magistrate, as the case may be. [s 264B insrt Act 12 of 1980 s 155; am Act 44 of 1996 s 3 and Sch 2]

SECTION 264B GENERALLY [84,305.10] Power to issue a warrant In Re Skase; Ex parte Donnelly (1992) 37 FCR 509; 114 ALR 303, Drummond J considered an application by the trustee in bankruptcy of Christopher Skase upon the issue of a warrant for his arrest under s 264B(1) by reason of Skase’s failure to attend for examination in relation to his bankruptcy before the registrar. The court held that the power to issue a warrant under the section is conditioned only on the failure of the person in question to attend for examination after having been served with a summons. Thus there is no reason to apply to the construction of the provision the presumption against extra-territoriality. Accordingly, Drummond J held that there is power under the section to issue a warrant for the arrest of a person who at the time of the issue of the warrant is outside the jurisdiction, even though such a warrant cannot be executed unless and until the person comes into jurisdiction. The court also held that the power to issue a warrant under the section is discretionary. Because it was conceded that there was no basis upon which any warrant that might be issued for the arrest of Skase could be executed on him unless he first returned from Spain to Australia (and there was marginal utility in having the warrants issued against Skase when the warrants could not be executed in Majorca), the court in exercising its discretion declined to exercise the power to issue the warrant because the issue of the warrant would not serve any useful purpose. The court also assumed without deciding that evidence that a person had failed to attend as required by a summons because of inability to travel due to health reasons would be a powerful discretionary factor telling against the issue of a warrant. Authentico Transnational Pty Ltd v Nagpal [2004] NSWSC 12; BC200400880 indicates that the procedure followed in Re Skase, above is that employed by Pt 42 r 7 of the Supreme Court Rules (NSW). Note that the citation in Authentico of the section of this Act is of a non-existent s 274B but it is clearly s 264B that was intended. Failure to attend an examination under s 81 is not punishable as a contempt: Re Maher; Maher v Official Trustee in Bankruptcy (1993) 118 ALR 519.

____________________

[84,310] Refusal to be sworn or give evidence etc 264C (1) A person appearing before the Court, the Registrar or a magistrate for the purpose of being examined under this Act, or appearing as a witness before the Court, shall not: (a) refuse or fail to be sworn or to make an affirmation; (b) refuse or fail to answer a question which he or she is required to answer by the Court, the Registrar or the magistrate, as the case may be; or [page 734]

refuse or fail to produce any books that he or she is required by the (c) Court, the Registrar or the magistrate, as the case may be, or by a summons under this Act, to produce. Penalty: $1,000 or imprisonment for 6 months, or both. [subs (1) am Act 119 of 1987 s 94; Act 44 of 1996 s 3 and Sch 2; am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(1A) Subsection (1) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (1A) (see subsection 13.3(3) of the Criminal Code). [subs (1A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) Nothing in this section limits the power of the Court to punish persons for contempt of court, but a person shall not be punished under this section and for contempt of court in respect of the same act or omission. [s 264C insrt Act 12 of 1980 s 155]

[84,315] Prevarication or evasion in the course of examination 264D (1) Where a person who is being examined before the Court, the Registrar or a magistrate under this Act is guilty of prevarication or evasion, the person commits an offence punishable upon conviction by a fine not exceeding $1,000 or imprisonment for 6 months, or both. [subs (1) am Act 119 of 1987 s 94]

(2) Nothing in this section limits the power of the Court to punish persons for contempt of court, but a person shall not be punished under this section and for contempt of court in respect of the same conduct. [s 264D insrt Act 12 of 1980 s 155] SECTION 264D GENERALLY [84,315.10] “evasion” The word probably means intentional avoidance. For a general discussion of the word in different statutory contexts, see Kelly v JRA Ltd (1990) 92 ALR 651. In the bankruptcy context, see Coward v Stapleton (1953) 90 CLR 573; [1953] ALR 743.

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[84,320] Offences in relation to Registrar or magistrate conducting an examination

264E (1) A person shall not: (a) insult or disturb a Registrar or magistrate before whom an examination under this Act is being held; (b) interrupt an examination under this Act before a Registrar or magistrate; (c) create a disturbance, or take part in creating or continuing a disturbance, in or near a place where an examination under this Act is being held before a Registrar or magistrate; (d) use insulting or threatening language towards a Registrar or magistrate before whom an examination under this Act is being held; or (e) by writing or speech use words calculated: (i) to influence improperly a Registrar or magistrate before whom an examination under this Act is being held; or (ii) to bring a Registrar or magistrate before whom an examination under this Act is being held into disrepute. Penalty: $1,000 or imprisonment for 6 months, or both. [page 735] (2) For the purposes of an offence against subsection (1), strict liability applies to the following physical elements of circumstance of the offence: (a) that the Registrar or magistrate is a Registrar or magistrate before whom an examination under this Act is being held; (b) that the examination is an examination under this Act being held before a Registrar or magistrate. Note: For strict liability, see section 6.1 of the Criminal Code. [subs (2) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001] [s 264E insrt Act 12 of 1980 s 155; am Act 119 of 1987 s 96]

[84,325] Failure of bankrupt or debtor to disclose property etc 265 (1) A bankrupt:

(a) shall fully and truly disclose to the trustee all of the property of the bankrupt, and its value; (b) shall fully and truly disclose to the trustee particulars of any disposition of property made by him or her within the period of 2 years immediately preceding the date on which he or she became a bankrupt; (c) shall not refuse or fail to comply with a direction by the trustee to deliver to the trustee property in the possession of the bankrupt, being all or part of the property of the bankrupt; (ca) shall fully and truly disclose to the trustee such information about any of the bankrupt’s conduct and examinable affairs as the trustee requires; (d) shall not refuse or fail to tell the trustee where the books (including books of an associated entity of the bankrupt) relating to the bankrupt’s examinable affairs may be found; (e) shall not refuse or fail to comply with a direction by the trustee to deliver to the trustee books (including books of an associated entity of the bankrupt) that are in the possession of the bankrupt and relate to any of the bankrupt’s examinable affairs; (f) shall not omit any material particular from a statement relating to any of the bankrupt’s examinable affairs; (g) shall, if he or she knows that a person has lodged a proof of debt in the bankruptcy that is false, forthwith inform the trustee of the fact; and (h) shall give to the trustee a full and proper explanation of any loss or depreciation of any of his or her assets or part of any of his or her assets that occurred within the period of 2 years immediately preceding the date on which he or she became a bankrupt. Penalty: Imprisonment for 1 year. [subs (1) am Act 119 of 1987 s 97; Act 44 of 1996 s 3 and Sch 2; Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(1A) A bankrupt is taken to have complied with paragraph (1)(a), (b) or (ca) if he or she has fully and truly disclosed to the best of his or her knowledge and belief as required by that paragraph. Note: A defendant bears an evidential burden in relation to the matter in subsection (1A) (see subsection 13.3(3) of the Criminal Code).

[subs (1A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) A bankrupt shall be deemed to have complied with paragraph (1)(b) in respect of any property if he or she shows that that property has been disposed of in the ordinary way of his or her business or in meeting the ordinary expenses of his or her family. Note: See also subsection 5(6). [subs (2) am Act 44 of 1996 s 3 and Sch 2; Act 144 of 2008 s 3 and Sch 2[32], opn 10 Dec 2008]

[page 736] (3) A bankrupt shall not, with the intention of obtaining the consent of his or her creditors or any of them to any matter relating to any of the bankrupt’s examinable affairs, make a false representation or commit any fraud. Penalty: Imprisonment for 5 years. [subs (3) am Act 119 of 1987 s 97; Act 44 of 1996 s 3 and Sch 2; Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 106 of 2010 s 3 and Sch 2[69], opn 1 Dec 2010]

(4) A person who, after the presentation of a petition on which, or by virtue of the presentation of which, he or she becomes a bankrupt: (a) conceals or removes any part of his or her property to the value of $20 or more; (b) conceals a debt due to or by him or her; (c) conceals, parts with, destroys, mutilates, falsifies, alters or makes a false entry in, or omits a material particular from, a book (including a book of an associated entity of the person) affecting or relating to any of the person’s examinable affairs; (d) attempts to account for any part of his or her property by falsely stating that he or she has incurred a loss or expense; (e) otherwise than in the ordinary way of his or her business, disposes of, or gives security over, property that he or she has obtained on credit and for which he or she has not paid; or (f) prevents the production of a book (including a book of an associated entity of the person) affecting or relating to any of the person’s examinable affairs; is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 1 year.

[subs (4) am Act 119 of 1987 s 97; Act 44 of 1996 s 3 and Sch 2]

(5) A person who, after the presentation of a petition on which, or by virtue of the presentation of which, he or she becomes a bankrupt, either alone or jointly with another person: (a) obtains property by fraud; or (b) incurs any debt or liability by fraud; is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 5 years. [subs (5) am Act 44 of 1996 s 3 and Sch 2; Act 106 of 2010 s 3 and Sch 2[70]–[72], opn 1 Dec 2010]

(6) Subsections (4) and (5) extend to an act or omission done or made after the commencement of this Act where the petition was presented before the commencement of this Act but do not apply to an act or omission done or made after the person by whom it was done or made has been discharged from the bankruptcy or after his or her bankruptcy has been annulled. [subs (6) am Act 44 of 1996 s 3 and Sch 2]

(7) A person who has become a bankrupt after the commencement of this Act and, within 12 months before the presentation of the petition on which, or by virtue of the presentation of which, he or she became a bankrupt, has done any of the things specified in any of paragraphs (4)(a) to (f) or paragraph (5) (a) or (b), whether before or after the commencement of this Act, is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding the maximum period of imprisonment applicable to the doing of that thing under subsection (4) or subsection (5), as the case may be. [subs (7) am Act 44 of 1995 s 3 and Sch 2]

(8) A person who has become a bankrupt and, within 2 years before he or she became a bankrupt and after the commencement of this Act, has contracted a debt provable in the bankruptcy without having at the time of contracting it any reasonable or probable ground of expectation, after taking into consideration his or her other liabilities (if any), of being [page 737] able to pay the debt, is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 1 year. [subs (8) am Act 44 of 1995 s 3 and Sch 2; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(9) It is a defence to a charge under this section (not being a charge under paragraph (1)(c) or (e) or subsection (3), (5) or (8)) if the defendant proves that the act or omission to which the charge relates was done or made without intent to defraud any of his or her creditors. [subs (9) am Act 44 of 1995 s 3 and Sch 2] SECTION 265 GENERALLY [84,325.5] Bankrupt The obligation of disclosure is not intended to be lifelong but only so long as the person remains undischarged: Re Todd; Ex parte Todd (1986) 68 ALR 483. A person entering into a Pt X arrangement will not be caught by this section: R v Adams (1935) 53 CLR 563. [84,325.10] The property of the bankrupt in s 265(1)(a) The phrase means the property of the bankrupt as defined in s 5 at the date of the commencement of the bankruptcy: R v Michell (1880) 50 LJ (MC) 76; 43 LT 572. [84,325.15] Examinable affairs See definition in s 5.

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[84,330] Offences relating to exercise of powers under section 77A or 130 *265A (1) A person shall not refuse or fail to comply with a requirement under section 77A or 130. [subs (1) am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(1A) Subsection (1) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (1A) (see subsection 13.3(3) of the Criminal Code). [subs (1A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) A person shall not, in purported compliance with a requirement under section 77A or 130, give information, or make a statement, that is, to the person’s knowledge, false or misleading in a material particular. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) A person shall not: (a) obstruct or hinder a person in the exercise of a power under section 77A; or (b) obstruct or hinder a person who is executing a warrant issued under section 130. [subs (3) am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3A) Subsection (3) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (3A) (see subsection 13.3(3) of the Criminal Code). [subs (3A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

[page 738] (4) The occupier, or person in charge, of premises that a person enters under a warrant issued under section 130 shall provide to the last-mentioned person all reasonable facilities and assistance for the effective exercise of his or her powers under the warrant. Penalty: Imprisonment for 12 months. [s 265A insrt Act 119 of 1987 s 98; am Act 9 of 1992 s 44; am Act 24 of 2001 Sch 5]

SECTION 265A GENERALLY [84,330.5] Provision of assistance in relation to warrants The obligation under s 265A(4) is to provide “all reasonable facilities and assistance” for the effective exercise of powers under the warrant. This implies positive cooperation and probably the provision of advice as to where relevant documents may be located, access to areas of premises where those documents are kept and the provision of photocopying facilities. In O’Reilly v Cmrs of State Bank of Victoria (1983) 153 CLR 1; 14 ATR 64, the High Court considered the question what was meant by the phrase “full and free access”.

____________________ *Editor’s Note: Section 98(2) of the Bankruptcy Amendment Act 1987 No 119 provides as follows: “(2) A reference in the section inserted in the Principal Act by subsection (1) of this section to a requirement or warrant under section 130 of the Bankruptcy Act 1966 is a reference to a requirement or warrant under the section inserted in the Principal Act by subsection 47(1) of this Act.”

[84,335] Disposing or charging of property by person who becomes, or has become, a bankrupt 266 (1) A person who, after the presentation of a petition on which, or by virtue of the presentation of which, he or she becomes a bankrupt disposes of, or creates a charge on, any property with intent to defraud his or her creditors is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 5 years. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 106 of 2010 s 3 and Sch 2[73], opn 1 Dec 2010]

(2) Subsection (1) does not apply to the disposal of, or the creation of a charge on, property after the person by whom the disposal is effected or the charge is created is discharged from bankruptcy or after his or her bankruptcy has been annulled. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

(3) A person who has become a bankrupt after the commencement of this Act and, within 12 months before the presentation of the petition on which, or by virtue of the presentation of which, he or she became a bankrupt and after the commencement of this Act, has disposed of, or created a charge on, any property with intent to defraud his or her creditors is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 5 years. [subs (3) am Act 44 of 1996 s 3 and Sch 2; Act 106 of 2010 s 3 and Sch 2[73], opn 1 Dec 2010]

SECTION 266 GENERALLY [84,335.5] Intent to defraud creditors The concept may be expressed as an intention to deprive another person of a right or to cause the person to act in any way to his or her detriment or prejudice: Welham v DPP [1961] AC 103; Re London and Globe Finance Corp Ltd [1903] 1 Ch 728. It also connotes deliberate dishonesty: R v Landy (1981) 72 Cr App R 237. An example is Putland v R [2003] NTCCA 3; BC200301706. The appeal, touching on subs (1), is concerned primarily with the sentence, where the sentencing judge imposed an aggregate sentence of four years’ imprisonment and ordered that the appellant be released after serving 12 months upon entering into a good behaviour bond for three years. The court dismissed the appeal. The primary facts were, as the court put it at [56]: “At no time during the operation of the business in the name of Putland Equipment Hire did the appellant advise his creditors or others that he was in fact a bankrupt and that Ms Roberts was running that business on his behalf, or as he put it, as trustee for him.” [page 739] The most substantial part of the judgment deals with the powers of the court to impose an aggregate sentence, and the applicability of the maxim expressio unius est exclusio alterius. The court applied Houssein v Dept of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 94; 38 ALR 577 at 581: “That maxim must always be applied with care, for it is not of universal application and applies only when the intention it expresses is discoverable upon the face of the instrument: Saunders v Evans (1861) 8 HL Cas 721 at 729. It is ‘a valuable servant, but a dangerous master’: Colquhoun v Brooks (1888) 21 QBD 52 at 65.

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[84,337] False declaration by debtor or bankrupt 267 (1) This section applies to a declaration contained in a statement that: (a) is filed under paragraph 54(1)(a) or (2)(a); or (aa) accompanies a declaration presented under section 54A; or (b) accompanies a petition presented under paragraph 55(2)(b) or subsection 56B(1); or *(c) is filed under paragraph 56F(1)(a) or (b); or (d) accompanies a petition presented under subsection 57(1); or (da) is given to the Official Receiver under section 77CA; or (e) is given to the Official Receiver under: (i) subsection 185C(2B); or (ii) subsection 185M(1B); or (iii) subsection 185P(1B); or

(ea) is given to the Official Receiver under section 185D with a debt agreement proposal; or (f) is given under subsection 188(2C) or (2D). [subs (1) am Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 44 of 2007 s 3 and Sch 2[79], opn 1 July 2007; Act 106 of 2010 s 3 and Sch 2[74] and Sch 4[12], opn 1 Dec 2010]

(2) A person must not make a declaration to which this section applies that the person knows to be false. Penalty: Imprisonment for 12 months. [s 267 subst Act 9 of 1992 s 45; am Act 106 of 2010 s 3 and Sch 2[75], opn 1 Dec 2010] SECTION 267 GENERALLY [84,337.5] Statements The statements referred to are statements of affairs consequent upon sequestration order, statement of affairs accompanying debtor’s petitions and partnership petitions.

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[84,338] Bankrupt not to give false misleading statement 267A [s 267A rep Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001]

[84,339] Failure of person to provide information 267B (1) A person must not refuse or fail to comply with a notice given to the person under subsection 6A(3), subsection 77C(1) or section 77CA or 139V. [page 740] Penalty: Imprisonment for 12 months. [subs (1) am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 34 of 2006 s 3 and Sch 4[13], opn 3 May 2006; Act 106 of 2010 s 3 and Sch 2[76], opn 1 Dec 2010]

(2) Subsection (1) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code). [subs (2) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

[s 267B insrt Act 9 of 1992 s 45] SECTION 267B GENERALLY [84,339.5] Failure to comply with a notice Although the word “fail” depends upon its context it probably should be interpreted as constituted by an omission to do a thing by reason of some carelessness or delinquency: Ingram v Ingram (1938) 38 SR (NSW) 407; Deputy Commissioner of Taxation v Ganke [1975] 1 NSWLR 252.

____________________ *Editor’s Note: Section 267(1)(c) before its amendment by Act 44 of 1996 read as follows: “(c) is filed under paragraph 56(13)(a) or (b); or”. The new paragraph applies to statements given to the Official Receiver in relation to debtor’s petitions that: (a) are presented after 16 December 1996; or (b) were presented, but not dealt with by the Registrar in Bankruptcy before 16 December 1996.

[84,340] Person not to provide false or misleading information 267C [s 267C rep Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001]

[84,341] Failure of person to attend 267D (1) A person who is required by a notice under subsection 77C(1) to attend before the Official Receiver or an authorised officer and to whom an advance is offered in accordance with subsection 77E(1) must not: (a) fail to attend as required by the notice; or (b) fail to appear and report from day to day, unless excused or released from further attendance by the Official Receiver or authorised officer, as the case may be. Penalty: Imprisonment for 6 months. [subs (1) am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) Subsection (1) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code). [subs (2) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001] [s 267D insrt Act 9 of 1992 s 45] SECTION 267D GENERALLY

[84,341.5] Failed to attend or failed to appear The word “fail” means omission to do the thing by reason of some carelessness or delinquency: Deputy Commissioner of Taxation v Ganke [1975] 1 NSWLR 252.

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[84,342] Arrest of person failing to attend before Official Receiver or authorised officer 267E (1) Subject to subsection (2), if a person who is required by a notice under subsection 77C(1) to attend before the Official Receiver or an authorised officer: (a) fails to attend as required by the notice; or (b) fails to appear and report from day to day, as required by the Official Receiver or authorised officer; [page 741] the Registrar, on proof by affidavit of the service of the notice, may issue a warrant for the arrest of the person. (2) The Registrar must not issue a warrant under subsection (1) for the arrest of a person unless: (a) the Registrar is satisfied, on proof by affidavit, that the person was offered an advance in accordance with subsection 77E(1); or (b) both: (i) the person is or has been a bankrupt; and (ii) the person’s attendance was required for the purpose of giving evidence or producing books relating to the person’s bankruptcy. [subs (2) subst Act 80 of 2004 s 3 and Sch 6, opn 23 June 2004]

(3) A warrant issued under subsection (1) authorises the arrest of the person and his or her being brought before the Registrar, and his or her detention in custody until he or she is released by order of the Registrar. (4) A warrant issued under subsection (1) may be executed by a constable, and a constable executing the warrant has the power to break in and enter any

premises for the purpose of executing the warrant. (5) The Registrar may order a person arrested under this section to pay the costs of the arrest. (6) The arrest of a person under this section does not relieve the person from any liability incurred because of his or her failure to attend before the Official Receiver or authorised officer. [s 267E insrt Act 9 of 1992 s 45]

[84,343] Refusal to be sworn or give evidence etc 267F (1) A person attending before the Official Receiver or an authorised officer as required by a notice under subsection 77C(1) must not: (a) refuse or fail to be sworn or to make an affirmation; or (b) refuse or fail to answer a question that the person is required to answer by the Official Receiver or authorised officer, as the case may be; or (c) refuse or fail to produce any books that the person is required by the notice to produce. Penalty: Imprisonment for 6 months. [subs (1) am Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(2) Subsection (1) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code). [subs (2) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001] [s 267F insrt Act 9 of 1992 s 45]

[84,344] Prevarication or evasion in the course of giving evidence 267G Where a person who is giving evidence before the Official Receiver or an authorised officer as required by a notice under subsection 77C(1) is guilty of prevarication or evasion, the person is guilty of an offence punishable upon conviction by imprisonment for a period not exceeding 6 months. [s 267G insrt Act 9 of 1992 s 45]

[page 742] SECTION 267G GENERALLY [84,344.5] Prevarication or evasion See commentary to s 264D. Section 77C relates to the power of the Official Receiver to require any person whether a bankrupt or not to give information to that person or to attend to give evidence and produce books. This is an analogous section to s 264 of the Income Tax Assessment Act 1936. The power under s 77C can only be utilised “for the purposes of the performance of the functions of the Official Receiver or a trustee under the Act”. The section will probably be interpreted the same way as s 264 of the Income Tax Assessment Act 1936: Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499; 23 ALR 480; 79 ATC 4039.

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[84,345] Offences in relation to personal insolvency agreements *268 (1) A debtor shall not knowingly give a false or misleading answer to a question put to him or her at a meeting called under Part X. Penalty: Imprisonment for 1 year. [subs (1) am Act 44 of 1996 s 3 and Sch 2]

(2) A debtor who has executed a personal insolvency agreement under Part X: (a) shall fully and truly disclose to the trustee of the agreement all the property subject to the agreement and its value; (b) shall not refuse or fail to comply with a direction of the trustee of the agreement to deliver up to the trustee property subject to the agreement that is in the possession of the debtor; (ba) shall fully and truly disclose to the trustee of the agreement such information about any of the debtor’s conduct and examinable affairs as the trustee requires; (c) shall not refuse or fail to comply with a direction by the trustee of the agreement: (i) to tell the trustee where books (including books of an associated entity of the debtor) relating to any of the debtor’s examinable affairs may be found; or (ii) to deliver to the trustee such books that are in the possession

of the debtor; (d) shall not omit any material particular from a statement relating to any of the debtor’s examinable affairs; (e) shall, if he or she knows that a person has lodged a proof of debt under the agreement that is false, forthwith inform the trustee of the fact; (f) shall execute such instruments and do all such acts and things in relation to property subject to the agreement 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 (g) shall aid to the utmost of his or her power in the administration of his or her property and affairs under the agreement. Penalty: Imprisonment for 1 year. [subs (2) am Act 119 of 1987 s 99; Act 44 of 1996 s 3 and Sch 2; Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2A) A debtor is taken to have complied with paragraph (2)(a) or (ba) if he or she has fully and truly disclosed to the best of his or her knowledge and belief as required by that paragraph. Note: A defendant bears an evidential burden in relation to the matter in subsection (2A) (see subsection 13.3(3) of the Criminal Code). [subs (2A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

[page 743] (3) A debtor who has executed a personal insolvency agreement under Part X shall not make a false representation or commit any fraud with the intention of obtaining the consent of his or her creditors or any of them to any matter relating to any of the debtor’s examinable affairs. Penalty: Imprisonment for 5 years. [subs (3) am Act 119 of 1987 s 99; Act 44 of 1996 s 3 and Sch 2; Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 106 of 2010 s 3 and Sch 2[77], opn 1 Dec 2010]

(4) Subsections (2) and (3) do not apply to an act or omission that is done or made after: (a) all the obligations that the personal insolvency agreement created

have been discharged; or (b) the personal insolvency agreement has been set aside or terminated. Note: A defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code). [subs (4) subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(5) If a personal insolvency agreement specifies that the antecedent transactions provisions of this Act apply to the debtor, the debtor must fully and truly disclose to the trustee of the agreement particulars of any disposition of property made by him or her within the period of 2 years immediately preceding the date on which he or she signed the authority under section 188 authorizing the calling of the meeting of his or her creditors at which the resolution requiring the execution of the agreement was passed. Penalty: Imprisonment for 1 year. [subs (5) am Act 44 of 1996 s 3 and Sch 2; Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(5A) A debtor is taken to have complied with subsection (5) if he or she has fully and truly disclosed to the best of his or her knowledge and belief as required by that subsection. Note: A defendant bears an evidential burden in relation to the matter in subsection (5A) (see subsection 13.3(3) of the Criminal Code). [subs (5A) insrt Act 24 of 2001 s 3 and Sch 5, opn 24 May 2001]

(6) A debtor shall be deemed to have complied with subsection (5) in respect of any property if he or she shows that that property has been disposed of in the ordinary way of his or her business or in meeting the ordinary expenses of his or her family. Note: See also subsection 5(6). [subs (6) am Act 44 of 1996 s 3 and Sch 2; Act 144 of 2008 s 3 and Sch 2[33], opn 10 Dec 2008]

(7) A debtor who has signed an authority under section 188, and has, within 12 months before the date on which he or she signed that authority and after the commencement of this Act: (a) done any of the things specified in any of paragraphs 265(4)(a) to (f) or paragraph 265(5)(a) or (b); or (b) disposed of, or created a charge on, any property with intent to defraud his or her creditors; is guilty of an offence and is punishable, upon conviction, if the offence relates to the doing of a thing specified in paragraph 265(5)(a) or (b) or a thing specified in paragraph (b) of this subsection, by imprisonment for a

period not exceeding 5 years or, in any other case, by imprisonment for a period not exceeding 1 year. [subs (7) am Act 44 of 1996 s 3 and Sch 2; Act 106 of 2010 s 3 and Sch 2[78], opn 1 Dec 2010]

(8) It is a defence to a charge under this section (not being a charge under paragraph (2)(b) or (c) or subsection (3) of this section or a charge relating to the doing of a thing [page 744] specified in paragraph 265(5)(a) or (b) or paragraph (7)(b) of this section) if the defendant proves that the act or omission to which the charge relates was done or made without intent to defraud any of his or her creditors. [subs (8) am Act 44 of 1996 s 3 and Sch 2] SECTION 268 GENERALLY [84,345.5] Section 268 in relation to s 265 This section is the mirror image of s 265 but whereas that latter section is concerned with bankrupts this section deals with the obligation of debtors who have entered Pt X arrangements.

____________________ *Editor’s Note: See s 106(2) for application provisions.

[84,350] False or misleading declaration under section 215A 268A [s 268A rep Act 137 of 2000 s 3 and Sch 2, opn 24 May 2001]

[84,355] Bankrupt or debtor who is a party to a debt agreement obtaining credit etc without disclosing bankruptcy or debt agreement 269 (1) An undischarged bankrupt or a debtor who is a party to a debt agreement shall not: (a) either alone or jointly with another person, obtain credit to the extent of $3,000 or more from a person without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires); (aa) either alone or jointly with another person, obtain goods or services from a person: (i) by giving a bill of exchange or cheque drawn, or a promissory note made, by him or her either alone or jointly with another person, being a bill, cheque or note under which the sum payable is $3,000 or more; or (ii) by giving 2 or more such instruments under which the sums payable amount in the aggregate to $3,000 or more; without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires); (ab) either alone or jointly with another person, enter into a hirepurchase agreement with a person, or enter into a contract or agreement for the leasing or hiring of any goods from a person, being a hire-purchase agreement, contract or agreement under which the amounts payable to that person amount in the aggregate to $3,000 or more, without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires); (ac) either alone or jointly with another person, obtain goods or services

from a person by promising to pay that person or another person an amount of, or amounts aggregating, $3,000 or more without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires); (ad) either alone or jointly with another person, obtain an amount of, or amounts aggregating, $3,000 or more from a person by promising to supply goods to, or render services for, that person or another person without informing that person that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires); or (b) carry on business under an assumed name, in the name of another person or, either alone or in partnership, under a firm name without disclosing to every person with whom he or she or, if he or she is carrying on business in partnership [page 745] under a firm name, the partnership deals, his or her true name and the fact that he or she is an undischarged bankrupt or a party to a debt agreement (as the case requires). [subs (1) am Act 9 of 1992 s 46; Act 44 of 1996 s 3 and Sch 2; Act 106 of 2010 s 3 and Sch 2[79] and [80], opn 1 Dec 2010]

(2) This section has effect subject to section 304A. Penalty: Imprisonment for 3 years. [subs (2) insrt Act 9 of 1992 s 46] [s 269 am Act 12 of 1980 s 156; Act 119 of 1987 s 101; Act 106 of 2010 s 3 and Sch 2[79], opn 1 Dec 2010] SECTION 269 GENERALLY [84,355.5] Validity of transactions by bankrupt In R v Ward (1978) 20 ALR 72 the High Court held unanimously that a state court which exercised jurisdiction in a trial on indictment in respect of an offence against the Bankruptcy Act is not exercising bankruptcy jurisdiction. Section 269 implicitly enables a bankrupt to obtain credit to the extent of $3000 or more from a person provided the person is informed that the former is an undischarged bankrupt. Furthermore the bankrupt may carry on business under his or her own name or under an assumed name, in the name of another person or, either alone or in partnership, under a firm name provided that the bankrupt discloses to every person with whom he or she is carrying on business in partnership under a firm name, the partnership deals, his or her true name and, the fact that he or she is an undischarged bankrupt: Pappas

v Rimar Pty Ltd (1984) 55 ALR 327; 75 FLR 175 (affirmed Rimar Pty Ltd v Pappas (1986) 160 CLR 133; 64 ALR 9). [84,355.10] Undischarged bankrupt In some places in the Act the word “bankrupt” without addition means a person who has not yet got a discharge. However, in s 269 the expression “undischarged bankrupt” appears to be used or adopted out of an abundance of caution or for emphasis: Re Todd; Ex parte Todd (1986) 68 ALR 483. An example of the application of subs (1)(b) is Putland v R [2003] NTCCA 3; BC200301706 as to which see [84,335.5].

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[84,360] Failure to keep proper books of account 270 (1) A person who has become a bankrupt after the commencement of this Act and: (a) has not kept such books, accounts and records as are usual and proper in any business carried on by him or her and as sufficiently disclose his or her business transactions and financial position during any period while the business was being carried on within the period of 5 years immediately preceding the date on which he or she became a bankrupt; or (b) having kept such books, accounts or records, has not preserved them; is guilty of an offence and is punishable, upon conviction: (c) in the case of a person who has previously been either a bankrupt whose bankruptcy has not been annulled or a person whose affairs have been administered under a personal insolvency agreement, a deed of assignment or a deed of arrangement under this Act or the repealed Act or who has made a composition or arrangement with creditors under this Act or the repealed Act — by imprisonment for a period not exceeding 3 years; and (d) in the case of any other person — by imprisonment for a period not exceeding 1 year. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[page 746]

(2) It is a defence to a prosecution under subsection (1) if the accused proves that in the circumstances his or her failure to keep or preserve the books, accounts or records was honest and excusable. [subs (2) am Act 44 of 1996 s 3 and Sch 2] SECTION 270 GENERALLY [84,360.5] Books The kind of books which are required to be kept are such as are usual and proper in the business carried out, and the following words in the section show the manner in which the bankrupt is to keep those books: Re Mutton (1880) 19 QBD 102. The section speaks of “his or her business transactions and financial position” and not “his or her business transactions and his or her financial position” and accordingly they should be read as meaning “the transactions and financial position of his or her business”: Re Aarons; Ex parte The Bankrupt (1978) 19 ALR 633. “Books” is now defined in s 5. It appears that intention is not a necessary element of the offence and that the section is an absolute provision: R v Fitzgerald, Duke of Leinster [1924] 1 KB 311; Re Carter (1936) 9 ABC 204. [84,360.10] Defence under the section Section 270(2) provides that it is a defence if the accused proves that the failure to preserve the books, accounts or records was honest and excusable. The words “honest and excusable” were defined in Dalrymple v Melville (1932) 32 SR (NSW) 596. The onus is upon the accused: Vaughan v R (1938) 61 CLR 8. The offence of not preserving books implies that they have been destroyed or have disappeared or in some way have been lost beyond recovery by the bankrupt. It also implies some wilful act or some neglect or default on the part of the bankrupt leading to loss: Vaughan v R (1938) 61 CLR 8.

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[84,365] Gambling or hazardous speculations 271 A person who has become a bankrupt after the commencement of this Act and: (a) within 2 years before the presentation of the petition on which, or by virtue of the presentation of which, he or she became a bankrupt, whether the petition was presented before or after the commencement of this Act, materially contributed to, or increased the extent of, his or her insolvency; or (b) during any period between the presentation of that petition and the date on which he or she became a bankrupt, lost any of his or her property; by gambling or by speculations that, having regard to his or her financial position at the time and any other material circumstance, were rash and hazardous, being gambling or speculations not connected with a trade or

business carried on by him or her, is guilty of an offence and is punishable, on conviction, by imprisonment for a period not exceeding 1 year. [s 271 am Act 44 of 1996 s 3 and Sch 2] SECTION 271 GENERALLY [84,365.5] Evidence in relation to gambling The existence of abundant evidence of gambling or even heavy gambling will not constitute evidence that the gambling brought about or contributed to the bankruptcy unless there is evidence which shows that an inquiry has been made into the causes of bankruptcy or the fact is contributing to the bankruptcy: Marks v R (1937) 57 CLR 58. It appears that the charge should particularise the period during which the gambling activities are alleged to have contributed to the bankruptcy: Re Godfrey (1929) 1 ABC 165.

____________________ [page 747]

[84,370] Leaving Australia with intent to defeat creditors etc *272 (1) A person who: (a) within 6 months before the presentation of the petition on or by virtue of which he or she became a bankrupt, left Australia, or did an act preparatory to leaving Australia, with intent to defeat or delay his or her creditors; or (b) after the presentation of the petition on or by virtue of which he or she became a bankrupt and before he or she became a bankrupt, left Australia, or did an act preparatory to leaving Australia, with intent to defeat or delay his or her creditors; or (ba) [repealed] (c) after he or she has become a bankrupt and before he or she is discharged from the bankruptcy, without the consent in writing of the trustee of his or her estate, leaves Australia, or does an act preparatory to leaving Australia; is guilty of an offence and is punishable, on conviction, if the offence relates to the doing of a thing specified in paragraph (a) or (b), by imprisonment for a period not exceeding 5 years or, in any other case, by imprisonment for a

period not exceeding 3 years. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 106 of 2010 s 3 and Sch 2[81], opn 1 Dec 2010]

(2) The trustee may impose written conditions on a consent given for the purposes of paragraph (1)(c). If the bankrupt is liable to make a contribution to the trustee under section 139P or 139Q, the conditions may include conditions regarding the payment of that contribution. [subs (2) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) If the bankrupt contravenes any condition imposed by the trustee, the bankrupt is guilty of an offence and is punishable, on conviction, by imprisonment for a period not exceeding 1 year. [subs (3) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 272 subst Act 12 of 1980 s 157; am Act 9 of 1992 s 47; Act 44 of 1996 s 3 and Sch 2] SECTION 272 GENERALLY [84,370.5] Decision of trustee whether to consent A decision of the trustee will only be interfered with where it appears that the trustee is acting unreasonably or in bad faith: Re Peters; Ex parte Lloyd (1882) 47 LT 64; Re a Debtor; Ex parte Debtor v Dodwell [1949] Ch 236; Leon v York-O-Matic Ltd [1966] 3 All ER 277; [1966] 1 WLR 1450; Re Carson; Ex parte Carson (1960) 19 ABC 108; Re Hall (1957) 20 ABC 21. This approach is not followed in Re Tyndall; Ex parte Official Receiver (1977) 17 ALR 182; 30 FLR 6 where the court held that it would interfere with the trustee’s discretion if it considered it just and equitable to do so. See also [82,640.10]. As to the circumstances that might be taken into account in determining whether the court would interfere with the decision of the trustee in refusing consent to a bankrupt leaving Australia, see Re Tyndall; Ex parte Official Receiver, above. [page 748] The court when required to review the decision will apply the test of whether it is just and equitable in the circumstances. See Re Tyndall (1977) 17 ALR 182 and Re Hicks (1994) 217 ALR 195, and Sharma v Pattison [2006] FCA 287; BC200602751. [84,370.10] Consent of multiple trustees Where there are two trustees of a bankrupt estate the consent of each trustee is required before the bankrupt can leave Australia: Deputy Commissioner of Taxation v Andrew (1984) 52 ALR 701. [84,370.15] Where a bankrupt is liable to make contribution to his or her creditors under either s 139P or 139Q it is necessary to seek permission to leave Australia (s 139ZU) and the present section is a complementary provision imposing penalty if permission is not obtained.

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*Editor’s Note: Schedule 1 Pt 2, cl 222 of Act 131 of 2002 provides that despite the amendments made by that Act to s 272: “(a) Division 4C of Part VI of the Bankruptcy Act continues to have effect: (i) in relation to permissions granted under that Division before the commencing time; and (ii) in relation to applications that were made to the Court under that Division before the commencing time; and (iii) in relation to permissions granted after the commencing time on applications referred to in subparagraph (ii); and (b) paragraph 272(c) of the Bankruptcy Act does not apply to anything done by a bankrupt in accordance with a permission referred to in paragraph (a) of this item.”

[84,375] Trial of offences 273 (1) Subject to this section, an offence against this Act, other than an offence that is punishable by a fine only, is punishable either on indictment or on summary conviction. (2) Where proceedings for an offence that is punishable as provided by subsection (1) are brought in a court of summary jurisdiction, the court may either determine the proceedings or commit the defendant for trial, but shall not, if it determines the proceedings, impose a period of imprisonment exceeding 1 year in respect of the offence. (3) Subject to subsection (4), an offence against this Act that is punishable by a fine only is punishable by a court of summary jurisdiction. (4) The Federal Court has jurisdiction to try summarily any offence against this Act. Note: State and Territory courts are conferred jurisdiction by the Judiciary Act 1903 in relation to offences against this Act. The exercise by those courts of that jurisdiction does not involve the exercise of jurisdiction in bankruptcy conferred by this Act. [subs (4) am Act 106 of 2009 s 3 and Sch 1[7] and [8], opn 4 Dec 2009]

(5) Where proceedings for an offence other than an offence that is punishable by a fine only are brought in the Federal Court, the Federal Court may either determine the proceedings or commit the defendant for trial before a court of competent jurisdiction, but shall not, if it determines the proceedings, impose a period of imprisonment exceeding 1 year in respect of the offence. [subs (5) am Act 106 of 2009 s 3 and Sch 1[9], opn 4 Dec 2009]

(6) [subs (6) rep Act 44 of 1996 s 3 and Sch 1] (7) [subs (7) rep Act 44 of 1996 s 3 and Sch 1]

SECTION 273 GENERALLY [84,375.5] Court of summary jurisdiction The definition of a court of summary jurisdiction in s 26(d) of the Acts Interpretation Act 1901 when read in conjunction with s 273(2) of the Act indicates that a court of summary jurisdiction for the purposes of s 273(2) of the Act includes a magistrate of a state sitting as a court for the summary punishment of offences under state law, and having power to commit the defendant for trial: Pearce v Cocchiaro (1977) 137 CLR 600; 14 ALR 440. [84,375.10] Court of competent jurisdiction See Environment Protection Authority v Mistring Pty Ltd (2013) 82 NSWLR 784; 194 LGERA 340; [2013] NSWLEC 9; BC201300456 at [26]: The phrase “court of competent jurisdiction” which appears in s 73(1) has been interpreted in a variety of other contexts. In R v Ward (1978) 140 CLR 584, the High Court held that the use of this phrase in s 273 of the Bankruptcy Act 1966 (Cth) was not a reference to the courts upon which jurisdiction was specifically conferred under s 27 of that Act, but rather was “apt to [page 749] sigsignify a court which is otherwise endowed with jurisdiction, as for example by the provisions of the Judiciary Act” (at 588–589). In Johnstone v Commonwealth (1979) 143 CLR 398, Jacobs J held that in the context of s 56 of the Judiciary Act 1903 (Cth), the phrase refers to “competency in respect of amount and subject matter and personality of the plaintiff” (at 404).

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[84,380] Time within which summary proceedings to be brought 274 [s 274 rep Act 12 of 1980 s 158]

[84,385] Criminal liability not affected by discharge etc 275 A person may be prosecuted for an offence against this Act although: (a) he or she has been discharged from bankruptcy or his or her bankruptcy has been annulled; (b) a composition or a scheme of arrangement has been accepted or approved under Division 6 of Part IV; or (c) a personal insolvency agreement has become binding on his or her creditors. [s 275 am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[84,390] Trustee acting under a personal insolvency agreement that has been set aside 276 (1) A person who acts as trustee under a personal insolvency agreement that has, to his or her knowledge, been set aside or been terminated is liable, on conviction by the Court or a court of summary jurisdiction, to a fine not exceeding $20 for each day on which he or she has so acted, not being a day on which his or her acting as a trustee was confined to taking such steps as were necessary for the protection of the property of the debtor. [subs (1) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) It is a defence to proceedings brought under subsection (1) if the person alleged to have acted as trustee proves that his or her acting as a trustee was confined to taking such steps as were necessary for the protection of the property of the debtor. [subs (2) am Act 44 of 1996 s 3 and Sch 2]

[84,395] Punishment of contempt of court 277 Where by this Act it is provided that a person is guilty of contempt of court, that person may be dealt with by any court having jurisdiction in bankruptcy as if he or she were guilty of a contempt of that court, but a person is not liable to be punished by more than one court in respect of the one contempt. [s 277 am Act 44 of 1996 s 3 and Sch 2] SECTION 277 GENERALLY [84,395.5] Cross-references See [83,750.35].

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[84,400] Keeping of books in respect of period of bankruptcy 277A (1) Subject to this section, a bankrupt must: (a) keep books that record and explain any income derived by the bankrupt, record the particulars of any employment of the bankrupt,

and record and explain any [page 750] other dealings, transactions or other financial or business affairs of the bankrupt, during the period of the bankruptcy; and (b) retain the books until discharged from the bankruptcy. (2) The bankrupt must: (a) keep the books in writing in the English language or so as to enable the books to be readily accessible and convertible into writing in the English language; and (b) keep the books so as to enable any liability of the bankrupt arising under this Act by virtue of any acts, transactions or other matters occurring during the period of the bankruptcy to be readily ascertainable. (3) A person who has possession of any books referred to in subsection (1) must: (a) produce the books to the trustee or to the Official Receiver when requested to do so; and (b) retain the books until the bankrupt is discharged. (4) A person is not required to retain books if the trustee or the Official Receiver, by written notice given to the person, has told the person that the retention of those books is not necessary. Penalty: Imprisonment for 6 months. [s 277A insrt Act 9 of 1992 s 48]

[84,403] Infringement notices for offences 277B (1) The regulations may make provision in relation to enabling a person who is alleged to have committed an offence of a kind referred to in the table in subsection (2) to pay to the Commonwealth, as an alternative to prosecution, a penalty of an amount worked out in accordance with subsection (2). (2) The amount of penalty payable to the Commonwealth under

regulations made for the purposes of subsection (1) in respect of an offence is determined using the following table: Penalties payable Item Alleged offence 1 subsection 52(1A) 2 subsection 73(1A) 3 subsection 74(5A) 4 subsection 153A(2) 5 subsection 153B(3) 6 subsection 155J(1) 7 subsection 168(1) 8 subsection 170A(1) 9 subsection 173(1) 10 subsection 175(5) 11 subsection 182(4) 12 subsection 185LEA(1) 13 subsection 185ZA(1) 14 subsection 186N(1) 15 subsection 186N(3) 16 subsection 186N(5) 17 subsection 186N(6A) 18 subsection 218(2)

Penalty payable 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 2 penalty units 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit [page 751]

19 20 21

subsection 224A(1) subsection 224A(2) subsection 224A(3)

1 penalty unit 1 penalty unit 1 penalty unit

22 23 24 25 26 27 28

subsection 224A(4) subsection 224A(5) subsection 244(14) subsection 245(3) subsection 246(1) subsection 247(3) subsection 252A(2)

1 penalty unit 1 penalty unit 1 penalty unit 1 penalty unit 5 penalty units 1 penalty unit 1 penalty unit

[s 277B insrt Act 106 of 2010 s 3 and Sch 2[82], opn 1 Dec 2010]

PART XV — PROVISIONS RELATING TO THE BANKRUPTCY (ESTATE CHARGES) ACT 1997 [heading am Act 34 of 2006 s 3 and Sch 3, opn 1 July 2006]

[84,500] Interpretation 278 In this Part: Estate Charges Act means the Bankruptcy (Estate Charges) Act 1997. interest charge means charge imposed by Part 2 of the Estate Charges Act. late payment penalty means penalty payable under subsection 281(1). realisations charge means charge imposed by Part 3 of the Estate Charges Act. registration charge [def rep Act 34 of 2006 s 3 and Sch 3, opn 1 July 2006]

Registration Charges Act [def rep Act 34 of 2006 s 3 and Sch 3, opn 1 July 2006] [s 278 insrt Act 11 of 1997 s 3 and Sch 1]

[84,505] Administration of, and powers and functions in relation to, the Charges Acts 279 (1) The Inspector-General has the general administration of the Estate Charges Act. (2) A reference to this Act in section 12 or 77AA of this Act is taken to

include a reference to the Estate Charges Act. [s 279 insrt Act 11 of 1997 s 3 and Sch 1; am Act 34 of 2006 s 3 and Sch 3, opn 1 July 2006]

[84,510] Deferred payment of interest charge or realisations charge 280 (1) A person may defer the payment of an amount of interest charge relating to a particular trustee account if: (a) the total amount of interest charge that the person is liable to pay in respect of the account is less than $50; and (b) the account has not been closed; and (c) the person has notified the Inspector-General as provided for in subsection (3). [page 752] (2) A person may defer the payment of an amount of realisations charge relating to a particular bankrupt’s estate, deceased person’s estate or debtor’s property, as the case may be, if: (a) the total amount of realisations charge that the person is liable to pay in respect of the estate or property is less than $50; and (b) the trustee account in relation to the estate or property has not been closed; and (c) the person has notified the Inspector-General as provided for in subsection (3). (3) If a person intends to defer paying an amount of interest charge or realisations charge, he or she must notify the Inspector-General in writing of that fact before the time by which the amount is otherwise required to be paid. (4) If a person defers payment of an amount of interest charge or realisations charge in accordance with this section, the amount is still payable to the Commonwealth, but the person does not have to pay it until 21 days after whichever of the following happens first: (a) at the end of a charge period:

if the deferral is of interest charge — the total amount of interest charge that the person is liable to pay in respect of the relevant trustee account is $50 or more; or (ii) if the deferral is of realisations charge — the total amount of realisations charge that the person is liable to pay in respect of the relevant estate or property is $50 or more; (b) the relevant trustee account is closed. (i)

Note: As a deferred amount is still payable to the Commonwealth, it must be taken into account in working out the total amounts referred to in paragraphs (1)(a), (2)(a) and (4)(a).

(5) In this section: trustee account means an account under section 169, or under that section as applied by any of the following provisions: (a) section 210 (which applies section 169 to a controlling trustee under Division 2 of Part X); (b) subsection 231(5) (which applies section 169 to a personal insolvency agreement); (c) [repealed] (d) [repealed] (e) subsection 248(1) (which applies section 169 to administration of estates under Part XI). [def am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [s 280 insrt Act 11 of 1997 s 3 and Sch 1]

[84,515] Late payment penalty — interest charge and realisations charge 281 (1) If any interest charge or realisations charge remains unpaid after the time for payment of the charge, the person liable to pay the charge is liable to pay to the Commonwealth a late payment penalty calculated from that time at the rate of 20% per year on the amount unpaid. (2) The person liable to pay late payment penalty is personally liable to pay the penalty and is not entitled to be reimbursed in respect of the penalty out of the bankrupt’s estate, the deceased person’s estate or the debtor’s property, as the case may be. [s 281 insrt Act 11 of 1997 s 3 and Sch 1]

[page 753]

[84,520] Extension of time for payment — interest charge and realisations charge 282 (1) The Inspector-General may, in a particular case, extend the time for payment of interest charge or realisations charge. (2) The following provisions apply in relation to extensions of time under subsection (1): (a) the person liable to pay the charge may apply for an extension; (b) an application is to be in writing, setting out the reasons for the application, and is to be made to the Inspector-General before the original time for payment; (c) the Inspector-General’s decision on an application is to be in writing; (d) application may be made to the Administrative Appeals Tribunal for review of a decision to refuse an application, or to grant a lesser extension than was applied for. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable. [s 282 insrt Act 11 of 1997 s 3 and Sch 1]

[84,525] Remission of interest charge, realisations charge and late payment penalty 283 (1) The Inspector-General may remit an amount of interest charge, realisations charge or late payment penalty that is payable but has not been paid if the Inspector-General thinks that: (a) failure to remit the amount would cause a person undue hardship; and (b) it is appropriate to remit the amount. [subs (1) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) The following provisions apply in relation to remissions under subsection (1):

the person liable to pay the charge or penalty may apply for a (a) remission; (b) an application is to be in writing, setting out the reasons for the application, and is to be made to the Inspector-General; (c) the Inspector-General’s decision on an application is to be in writing; (d) application may be made to the Administrative Appeals Tribunal for review of a decision to refuse an application, or to remit a lesser amount than was applied for. Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.] [s 283 insrt Act 11 of 1997 s 3 and Sch 1]

[84,530] Recovery of interest charge, realisations charge and late payment penalty 284 Interest charge, realisations charge or late payment penalty that is due and payable may be recovered by the Commonwealth as a debt due to the Commonwealth. [s 284 insrt Act 11 of 1997 s 3 and Sch 1]

[84,535] Payments by cheque or payment order 285 (1) If a person gives the Commonwealth a cheque or payment order in payment of an amount of interest charge, realisations charge or late payment penalty, the amount is taken not to be paid until the cheque or payment order is paid by the institution on which it is drawn. [subs (1) am Act 48 of 1998 Sch 1; Act 34 of 2006 s 3 and Sch 3, opn 1 July 2006]

[page 754] (2) If: (a) a person gives the Commonwealth a cheque or payment order in payment of an amount of interest charge or realisations charge; and (b) the cheque or payment order is paid by the institution on which it is drawn;

then, for the purposes of working out if there is a liability to late payment penalty, the amount of charge is taken to have been paid when the person gave the cheque to the Commonwealth. [subs (2) am Act 48 of 1998 Sch 1] [s 285 insrt Act 11 of 1997 s 3 and Sch 1]

[84,540] Regulations may deal with other matters 286 (1) The regulations may include other provisions dealing with the collection and recovery of interest charge, realisations charge or late payment penalty, including (but not limited to) provisions dealing with the following: (a) the methods by which charge and late payment penalty may be paid; (b) refunds of, or overpayments of, charge or late payment penalty; (c) as an alternative to the refund of the whole or a part of an amount to a person, crediting the amount or part of the amount against a liability of the person to pay charge or late payment penalty; (d) forms to be used, and information to be provided, in relation to the payment of charge and late payment penalty. (2) The matters that may be covered in regulations made for the purposes of paragraph (1)(a) include, but are not limited to, the making of payments using: (a) electronic funds transfer systems; or (b) credit cards; or (c) debit cards. (3) A refund of an amount in accordance with the regulations is to be paid out of the Consolidated Revenue Fund, which is appropriated accordingly. [s 286 insrt Act 11 of 1997 s 3 and Sch 1]

PART XVI — MISCELLANEOUS

[84,705] Certain provisions in contracts etc to be void 301 (1) A provision in a contract or agreement for the sale of property, in a lease of property, in a hire-purchase agreement, in a licence or in a PPSA

security agreement to the effect that: (a) the contract, agreement, lease, hire-purchase agreement, licence or PPSA security agreement is to terminate, or may be terminated by the vendor, lessor, owner, licensor or PPSA secured party; or (b) the operation of the contract, agreement, lease, hire-purchase agreement, licence or PPSA security agreement is to be modified; or (c) property to which the contract, agreement, lease, hire-purchase agreement, licence or PPSA security agreement relates may be repossessed by or on behalf of the vendor, lessor, owner, licensor or PPSA secured party; if the purchaser, lessee, hirer, licensee or PPSA grantor or debtor becomes a bankrupt or commits an act of bankruptcy or executes a personal insolvency agreement under this Act is void. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 131 of 2009 s 3 and Sch 5 items 10– 12, opn 30 Jan 2012]

[page 755] (2) This section extends to contracts, agreements, leases, hire-purchase agreements and licences entered into or granted before the commencement of this Act. (2A) This section extends to a PPSA security agreement entered into at or after the time this subsection commences. Note: This subsection commenced at the registration commencement time within the meaning of section 306 of the Personal Property Securities Act 2009. [subs (2A) insrt Act 131 of 2009 s 3 and Sch 5 item 13, opn 30 Jan 2012]

(3) In this section: lease includes an agreement for a lease. lessee includes a person who has agreed to take a lease. lessor includes a person who has agreed to grant a lease.

[84,710] Certain provisions in bills of sale etc to be void

302 (1) A provision in a bill of sale, mortgage, lien, charge or PPSA security agreement: (a) enabling the grantee, mortgagee, person entitled to the benefit of the lien or charge or PPSA secured party to exercise any power or remedy; or (b) to the effect that the operation of the bill of sale, mortgage, lien, charge or PPSA security agreement is to be modified; if the grantor, mortgagor, the person whose property is subject to the lien or charge or the PPSA grantor or debtor becomes a bankrupt or commits an act of bankruptcy or executes a personal insolvency agreement under this Act is void. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 131 of 2009 s 3 and Sch 5 items 14– 16, opn 30 Jan 2012]

(2) This section extends to bills of sale, mortgages, liens and charges entered into or granted before the commencement of this Act. (3) This section extends to a PPSA security agreement entered into at or after the time this subsection commences. Note: This subsection commenced at the registration commencement time within the meaning of section 306 of the Personal Property Securities Act 2009. [subs (3) insrt Act 131 of 2009 s 3 and Sch 5 item 17, opn 30 Jan 2012] SECTION 302 GENERALLY [84,710.5] General This section was considered in International Air Transport Association v Ansett Australia Holdings Ltd (2008) 242 ALR 47; 65 ACSR 1; [2008] HCA 3; BC200800357 in the judgments of Gummow, Hayne, Heydon, Crennan and Kiefel JJ, with whom Gleeson CJ substantially agreed. In the course of the reasons the court referred to this section and Re Jeavons; Ex parte Mackay (1873) 8 Ch App 643 as providing an example of the type of provision caught by this section. There, X and Y agreed that if Y became bankrupt the security held by X for the indebtedness of Y should increase from a lien over one half to one over the whole of certain royalties to which Y was entitled. This arrangement failed in so far as the quantum of security was increased upon bankruptcy of the debtor. The property of the bankrupt, the right to one half of the royalties, was not to be dealt with except under the provisions of the bankruptcy statute. The case was concerned with an arrangement by which the appellant dealt with certain debts between airlines which appeared, on first inspection, to amount to an arrangement such as that referred to in Re Jeavons; Ex parte Mackay, above, by which the parties attempted to “contract out” of the bankruptcy statute. Instead, the view contained at [82] in the judgment of Gummow, Hayne, Heydon, Crennan and Kiefel JJ drew the following distinction: [82] At once it is apparent that any rule expressed as requiring that all of an insolvent company’s property be made available for distribution among its creditors must accommodate the

[page 756] possibility that, during an administration, the administrator has dealt with, or made some transaction affecting, the property of the company. And if the administration is brought to an end by the making of a Deed of Company Arrangement, the property that is then available to the company will be whatever property the company then has (after any transactions or dealings affecting property of the company that the administrator has made). In Gosling v McCombie (1972) 126 CLR 487; [1972–73] ALR 273; (1972) 46 ALJR 468; BC7200420 at [20] Walsh J observed that the expression “made available” then appearing in s 111 of the Bankruptcy Act 1966 (Cth) depended upon: … whether or not the real effect of what has taken place is that [a second person] was enabled to carry out or to take part in a dealing with [the first person’s] property, in a way which but for [the first person’s] concurrence would not have been possible, which is similar to that in which [the second person] could have dealt with property which [the second person] owned, and which gives to [the second person] a benefit or advantage. In Thompson v Smith (1976) 135 CLR 102; 12 ALR 513; 51 ALJR 177; BC7600111, Gibbs J observed that property was “made available”, within the ordinary meaning of those words, when a person placed it at the disposal of another or did something which enabled the other person to use the property either at will or in a particular way. In that case, his Honour observed that a wife who joined with her husband in giving a mortgage over land owned as joint tenants to a third party did not make the land available to the husband, because he was not enabled to deal with it in any way. And see HP Mercantile Pty Ltd v Clements [2014] NSWSC 509; BC201403194.

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[84,713] Certain provisions in governing rules of superannuation funds and approved deposit funds to be void *302A (1) This section applies to a provision in the governing rules of a provident, benefit, superannuation, retirement or approved deposit fund to the extent to which the provision has the effect that: (a) any part of the beneficial interest of a member or depositor is cancelled, forfeited, reduced or qualified; or (b) the trustee or another person is empowered to exercise a discretion relating to such a beneficial interest to the detriment of a member or depositor; if the member or depositor: (c) becomes a bankrupt; or

(d) commits an act of bankruptcy; or (e) executes a personal insolvency agreement under this Act. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) The provision is void. (2A) This section does not apply to a provision that facilitates compliance with: (a) section 128B; or (b) section 128C; or (c) a notice under section 128E; or (d) an order under paragraph 128K(1)(b); or (e) a notice under section 139ZQ; or (f) an order under subsection 139ZT(2); or (g) an order under section 139ZU. [subs (2A) insrt Act 57 of 2007 s 3 and Sch 1[10], opn 28 July 2006]

[page 757] (3) This section extends to governing rules made before the commencement of this section. [subs (3) am Act 57 of 2007 s 3 and Sch 2[10], opn 1 July 1994]

(4) In this section: governing rules, in relation to a fund, means any trust instrument, other document or legislation, or combination of them, governing the establishment or operation of the fund. [s 302A insrt Act 82 of 1993 s 10] SECTION 302A GENERALLY [84,713.5] As a matter of general law, attempts to limit grantees’ powers of alienation are void as repugnant to and inconsistent with the incidents of ownership of property: Re Rosher (1884) 26 Ch D 801 at 811ff; Re Dugdale (1888) Ch D 176; Re Jones’s Will (1886) 23 LT Rep NS 211; Re Forder [1927] 2 Ch D 291 at 311 per Sargant J. Further, a settlement of property by a person on trustees to hold the same for his or her benefit unless he or she should become bankrupt, in which case it should pass to another, is void as a fraud on the bankruptcy laws: Higinbotham v Holme (1812) 19 Ves Jun 88; 34 ER 451; Lockyer v Savage (1733) 2 Stra 947; 93 ER 959; Ex parte Barter (1884) 26 Ch D 510; Ex parte Mackay (1873) LR 8 Eq 643; Merry v Pownall [1898] 1 Ch D 306; Ex parte Jay (1879) 24 Ch D 19, per James LJ at 25. Such arrangements are not made enforceable by the giving of valuable

consideration: Whyte v Williams [1903] VLR 69 per Madden CJ at 78; Wilson v Greenwood (1818) 1 Swan 471 at 481; [1814–23] All ER Rep 173; Mackintosh v Pogose [1895] 1 Ch D 505; Re Johnson [1904] 1 KB 134. However, a forfeiture provision is not void if it defeats a single creditor rather than creditors generally: Re Detmold (1889) 40 Ch D 585. A bad condition subsequent is only itself void and does not vitiate the entire grant: Re Rosher, above, at 812. Property cannot be settled so as to continue in the enjoyment of a bankrupt notwithstanding his or her bankruptcy, such provision being regarded as repugnant and contrary to public policy: Brandon v Robinson (1811) 18 Ves 429; 34 ER 379; Graves v Dolphin (1826) 1 Sim 66; 57 ER 503; Younghusband v Gisborne (1884) 1 Coll 400; 63 ER 473; Re Fitzgerald [1903] 1 Ch D 933; but see Godden v Crowhurst (1842) 10 Sim 642; 59 ER 765; Wallace v Anderson (1853) 18 Beav 533; Re Loftus-Otway [1895] 2 Ch 235. However, while a provision attempting to guard against the alienation of a gift of an estate in fee simple will fail, a gift of a life estate which genuinely determines in the event of the grantee’s bankruptcy and passes to another is valid: Re Ashby; Ex parte Wreford [1892] 1 QB 872; Re Dugdale, above; Re Machu (1882) 21 Ch D 838; Brandon v Robinson, above; Pearson v Dolman (1866) LR 3 Eq 315; Rochford v Hackman (1852) 9 Hare 474. The determination of a life interest in the event of bankruptcy is regarded as merely accelerating the remainder interest: Sharp v Cosserat (1855) 20 Beav 470; 52 ER 684; Dorsett v Dorsett (1861) 10 WR 96; 54 ER 96. But apt words of limitation must be used (see Halsbury’s Laws of England 4th ed, 3.598; Cooper v Wyatt (1821) 5 Madd 484; 56 ER 980; Bird v Johnson (1854) 18 Jur 976; Re Payne (1858) 25 Beav 556; 55 ER 749; Brooke v Pearson (1859) 27 Beav 181; 54 ER 70; Re Alwyn’s Trusts (1873) LR 16 Eq 585; Billson v Crofts (1873) LR 15 Eq 314; Ex parte Eyston (1877) 7 Ch D 145; Re Levy’s Trusts (1885) Ch D 119; Nixon v Verry (1885) Ch D 196; Re Broughton (1887) 57 LT 8; Re James (1890) LT 454; Re Loftus-Otway [1895] 2 Ch 235; Re Akeroyd’s Settlement [1893] 3 Ch D 363; Re Laye [1913] 1 Ch 298; Re Balfour’s Settlement [1938] 1 Ch D 928. These rules apply equally to gifts of personalty and gifts of real estate: Metcalfe v Metcalfe (1889) Ch D 633 at 639. Until his or her retirement (or any of such other events as are prescribed in the deed), a member’s rights and “interest” in a superannuation fund are inchoate and no more than a “mere expectancy”: Re Coram; Ex parte Official Trustee v Inglis (1992) 36 FCR 250; 109 ALR 353. Quaere whether the member retains a beneficial interest in employee contributions capable of withdrawal at any time. A mere “spes” or expectancy is not property capable of vesting in a trustee in bankruptcy and, therefore, a deed may validly provide for its determination in the event of the member’s bankruptcy. However, the common law position prior to the insertion of s 302A was that, once a member’s rights [page 758] had crystallised into an absolute and indefeasible interest in the fund (for example, on retirement), that interest was property capable of vesting in a trustee in bankruptcy and could not be validly forfeited in the event of bankruptcy: Re Coram; Ex parte Official Trustee v Inglis, above; Caboche v Ramsay (1993) 119 ALR 215; 27 ATR 479. Where a clause was capable of being construed as intending the forfeiture of interests vested absolutely as well as expectancies, and severance was not possible, then the entire clause was void. Section 302A (inserted by s 10 of the Superannuation Industry (Supervision) Consequential Amendments Act 1993 No 82) codifies the previous common law position, save that a provision capable of being construed as forfeiting both expectancies and vested interests will now be void only “to the extent that” it purports to forfeit vested interests and will remain otherwise intact. It is submitted that the words “beneficial interest” in this context signify something more than a mere expectancy.

____________________ *Editor’s note: See [79,945] concerning the application of this section.

[84,713A] Certain provisions in RSA’s terms and conditions to be void 302AB (1) This section applies to a provision in the terms and conditions of an RSA to the extent to which the provision has the effect that: (a) any part of the amount of money a bankrupt holds in an RSA is cancelled, forfeited, reduced or qualified; or (b) the provider of the RSA is empowered to exercise a discretion relating to such an amount to the detriment of an RSA holder; if the RSA holder: (c) becomes a bankrupt; or (d) commits an act of bankruptcy; or (e) executes a personal insolvency agreement under this Act. [subs (1) am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) The provision is void. (3) This section does not apply to a provision that facilitates compliance with: (a) section 128B; or (b) section 128C; or (c) a notice under section 128E; or (d) an order under paragraph 128K(1)(b); or (e) a notice under section 139ZQ; or (f) an order under subsection 139ZT(2); or (g) an order under section 139ZU. [subs (3) insrt Act 57 of 2007 s 3 and Sch 1[11], opn 28 July 2006] [s 302AB insrt Act 62 of 1997 s 3 and Sch 3]

[84,714] Certain provisions in trust deeds void 302B (1) A provision of a trust deed is void to the extent that it has the effect of:

(a) cancelling, reducing or qualifying a beneficiary’s interest under the trust; or (b) allowing the trustee to exercise a discretion to the detriment of a beneficiary’s interest; if the beneficiary becomes a bankrupt, commits an act of bankruptcy or executes a personal insolvency agreement under this Act. (2) This section does not apply to a provision that facilitates compliance with: (a) section 128B; or (b) section 128C; or [page 759] (c) (d) (e) (f) (g)

a notice under section 128E; or an order under paragraph 128K(1)(b); or a notice under section 139ZQ; or an order under subsection 139ZT(2); or an order under section 139ZU.

[subs (2) insrt Act 57 of 2007 s 3 and Sch 1[13], opn 28 July 2006] [s 302B insrt Act 44 of 1996 s 3 and Sch 1; am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

[84,715] Applications to Court 303 Where in respect of any matter this Act provides that: (a) an application may be made to the Court; or (b) the Court or the Registrar may exercise a power; and does not specify the person by whom the application may be made or the person on whose application the power may be exercised, as the case may be, the application may be made by, or the power may be exercised on the application of, any person aggrieved by or interested in that matter. [s 303 am Act 44 of 1996 s 3 and Sch 1] SECTION 303 GENERALLY [84,715.5] Reid v Hubbard [2003] FCA 1424; BC200307440 was a case where this jurisdiction was exercised.

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[84,720] Parts of dollar to be disregarded in determining majority in value of creditors etc 304 In determining for the purposes of this Act whether a majority in value of creditors, or a particular proportion in value of creditors, has passed a resolution or done any other act or thing, if a creditor’s debt consists of a number of whole dollars and a part of a dollar, the part of the dollar shall be disregarded.

[84,723] Indexation 304A (1) In this section: index number, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter. indexable amount means: (a) the amount of $20 referred to in paragraph 77D(1)(a); or (b) the amount of $20 referred to in subsection 77E(2); or (c) the amount of $20 referred to in subsection 77E(3); or (d) the amount of $10 referred to in paragraph 77E(4)(a); or (e) the amount of $10 referred to in paragraph 77E(4)(b); or (f) an amount prescribed by the regulations for the purposes of paragraph 77E(3)(a) or (4)(a); or (g) the amount of $3,000 referred to in paragraph 149D(1)(c); or (h) [repealed] (i) [repealed] (j) each amount of $3,000 referred to in section 269; [page 760] or, if any such amount has previously been altered under this section, the amount as so altered or last altered.

[subs (1) am Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003; Act 106 of 2010 s 3 and Sch 1[14], opn 1 Dec 2010]

(2) Section 77D or 77E applies in relation to the attendance of a person on a day during a quarter that begins after the commencement of the section concerned as if the indexable amount or each indexable amount in that section were replaced by the amount worked out using the formula in subsection (6). (3) Section 149D applies in relation to an act, omission or transaction by a bankrupt that constituted misleading conduct that took place or was entered into on a day during a quarter that begins after the date of commencement of the section concerned as if the indexable amount in that section were replaced by the amount worked out using the formula in subsection (6). [subs (3) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(4) [subs (4) rep Act 106 of 2010 s 3 and Sch 1[15], opn 1 Dec 2010] (5) Section 269 applies in relation to an act, omission or transaction referred to in that section that took place or was entered into on a day during a quarter that begins after the date of commencement of section 41 of the Bankruptcy Amendment Act 1991 as if each indexable amount in section 269 were replaced by the amount worked out using the formula in subsection (6). (6) The formula for the purposes of subsections (2), (3) and (5) is: Previous indexable amount × Indexable factor where: Previous indexable amount means the indexable amount for the previous quarter. Indexation factor means the indexation factor for the quarter worked out under subsection (8). [subs (6) am Act 106 of 2010 s 3 and Sch 1[16], opn 1 Dec 2010]

(7) If, apart from this subsection, an amount worked out under subsection (6) would be an amount of dollars and cents, the amount is to be rounded to the nearest dollar (rounding 50 cents upwards). (8) The indexation factor for a quarter is the number (worked out to 3 decimal places) worked out by dividing the index number for the previous quarter by the index number for the quarter that immediately preceded the previous quarter. (9) If the factor worked out under subsection (8) in relation to a quarter would, if it were worked out to 4 decimal places, end with a number greater

than 4, the factor worked out under that subsection in relation to that quarter is taken to be the factor worked out to 3 decimal places and increased by 0.001. (10) Subject to subsection (11), if at any time, whether before or after the commencement of this section, the Australian Statistician has published or publishes an index number in respect of a quarter in substitution for an index number previously published by the Australian Statistician in respect of that quarter, the publication of the later index number is to be disregarded for the purposes of this section. (11) If at any time, whether before or after the commencement of this section, the Australian Statistician has changed or changes the reference base for the Consumer Price Index, then, for the purposes of the application of this section after the change took place or takes place, regard is to be had only to the index numbers published in terms of the new reference base. [s 304A insrt Act 9 of 1992 s 49]

[page 761]

[84,725] Payment of expenses by Commonwealth 305 (1) Where the Minister, upon the application of the trustee of the estate of a bankrupt, the trustee under Part X in relation to a debtor or the trustee of the estate of a deceased person that is being administered under Part XI of this Act, is satisfied: (a) that proceedings relating to: (i) the estate of the bankrupt, the debtor or the deceased person; or (ii) any of the examinable affairs of the bankrupt, the debtor or the deceased person; should be instituted, continued or defended; or (aa) that the trustee should appear and participate in proceedings before the Administrative Appeals Tribunal reviewing a decision or determination by the trustee, or reviewing a decision of the Inspector-General on a review of such a decision or determination; or

(b) that inquiries should be made concerning: (i) the estate of the bankrupt, the debtor or the deceased person; or (ii) any of the examinable affairs of the bankrupt, the debtor or the deceased person; and is also satisfied that the moneys in the estate of the bankrupt, the debtor or the deceased person, as the case may be, are, or may be, insufficient to meet the cost of the proceedings or inquiries, the Minister may, by instrument in writing, direct that the cost of the proceedings or inquiries (including any costs that may be awarded against the trustee), or such part of the cost of the proceedings or inquiries (including any costs that may be awarded against the trustee) as is specified in the direction, be paid by the Commonwealth and, in that case, the cost or that part of the cost, as the case may be, shall be paid accordingly out of moneys available under an appropriation made by the Parliament. [subs (1) am Act 119 of 1987 s 103; Act 9 of 1992 s 50; Act 44 of 1996 s 3 and Sch 1; Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(2) A direction made by the Minister under subsection (1) may be subject to such conditions (including conditions as to the taxation of all or any costs and the reimbursement of the Commonwealth, in whole or in part, by the estate of the bankrupt, the debtor or the deceased person, as the case may be) as the Minister thinks fit. [subs (2) am Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003]

(3) The Minister may, by instrument in writing, revoke or vary a direction made by him or her under subsection (1). (4) In this section: estate, in relation to a personal insolvency agreement under Part X, means the property and income subject to the agreement. [def subst Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [subs (4) insrt Act 131 of 2002 s 3 and Sch 1, opn 5 May 2003] [s 305 subst Act 12 of 1980 s 166; am Act 44 of 1996 s 3 and Sch 2]

[84,730] Formal defect not to invalidate proceedings 306 (1) Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect

or irregularity and that the injustice cannot be remedied by an order of that court. [page 762] (2) A defect or irregularity in the appointment of any person exercising, or purporting to exercise, a power or function under this Act or under a personal insolvency agreement entered into under this Act does not invalidate an act done by him or her in good faith. [subs (2) am Act 44 of 1996 s 3 and Sch 2; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] SECTION 306 GENERALLY [84,730.7] “Proceedings under this Act” The issue of a bankruptcy notice is a proceeding notwithstanding that it is an administrative act: Re Wheeler & Reynolds; Ex parte Kerr v Crowe (1988) 20 FCR 185. See also s 5. In Re Sofia; Ex parte Sofia v Pattison (FCA, Finkelstein J, 11 November 1997, unreported), Finkelstein J held that the filing of a statement of affairs was a proceeding under the Act; and that the filing of a photocopy instead of the original (see s 54), was a formal defect or irregularity that could be remedied under s 306(1). [84,730.10] “formal defect or irregularity” A “formal defect or irregularity” is one that could not reasonably mislead the debtor: Pillai v Comptroller of Income Tax [1970] AC 1124 at 1135; Re Wimborne; Ex parte Debtor (1979) 24 ALR 494; Re Florance; Ex parte Turimetta Properties Pty Ltd (1979) 28 ALR 403; Re Walsh; Ex parte DCT (NSW) (1982) 42 ALR 727; Re Draper; Ex parte Australian Society of Accountants (FCA, von Doussa J, No 1086–87/88, 3 February 1989, unreported, BC8908057). Service within the precincts of the court does not normally amount to a formal defect unless it possesses such a deterrent effect as to obstruct the administration of justice: Baldry v Jackson [1976] 1 NSWLR 19 at 25; Brookfield & Septic Products Australia Pty Ltd (in liq) v Davey Products Pty Ltd (FCA, Mansfield J, No 7158/98, 25 September 1998, unreported, BC9804970); Matheson v Scottish Pacific Business Finance Pty Ltd [2005] FCA 670; BC200503515. In the context of bankruptcy notices, a substantive defect is one which “is objectively capable of misleading the debtor as to what is necessary for compliance with the notice”: Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; 79 ALR 161 (understatement of amount due under a bankruptcy notice). Mason CJ, Wilson, Brennan and Gaudron JJ held (CLR at 79–80; ALR at 165): The authorities show that a bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Act, or if it could reasonably mislead a debtor as to what is necessary to comply with the notice: James v Federal Commissioner of Taxation [(1955) 93 CLR 631 at 644; 29 ALJR 587]; Pillai [v Comptroller of Income Tax [1970] AC 1124 at 1135]. In such cases the notice is a nullity whether or not the debtor is in fact misled: In re a Judgment Debtor, 530 of 1908 [[1908] 2 KB 474 at 481]. See particularly [80,915.35] and the sections following.

Where defective service is alleged it may well be that the situation has been altered by the various amendments to reg 16.01 as to which see [89,760.15] et seq. Conti J summarised the authorities that preceded these amendments in Mudge v Hudson Timber & Hardware Ltd [2004] FCA 722; BC200403327: [19] Counsel for Mr Mudge referred to authority, by way of background to the bankruptcy petition service issue, to the effect that prior to the introduction of Bankruptcy Regulation 16.01, personal service of a bankruptcy notice had been mandated, being a requirement said to be not merely of historical interest, but also tending to emphasise the historically established recognition of at least the continuing importance of service of a bankruptcy notice in a manner likely to bring the subject matter thereof promptly to the debtor’s attention. In deference to the quality of Counsel’s submissions (whilst equally acknowledging the quality of the submissions of counsel for the respondent as well), I will summarise those authorities below: (i) Re Long; ex parte Fraser Confirming Pty Ltd (1975) 6 ALR 338 at 343, where Walters J, in the context of review of a number of authorities, said as follows: I have come to the conclusion that the failure of the petitioner to prove personal service of the bankruptcy notice on the debtor is not a formal defect, or an irregularity, which can be corrected by bringing it “within the umbrella” of s 306 of the Act. [page 763] (ii) Re Ditfort ex parte Deputy Commissioner of Taxation (NSW) (1988) 83 ALR 265 at 275, where after referring to the above dictum of Walters J in Re Long, Gummow J said as follows: While not necessarily being of the view that s 306 can never apply in such a case in any circumstances, I respectfully agree with what was said by [Walters J] as to the importance of proper proof in these cases, and as to the salutary consequences for creditors for failure to comply with the rules. (iii) Re Stec; ex parte Scragg (1998) 155 ALR 173, where Von Doussa J said at 179–180 as follows: The first matter concerns a submission … that the bankruptcy notice was validly served, notwithstanding the events already discussed, because Mr Stec admitted that his wife in about early May 1997 had shown, or given, him the document which was served on her by Mr Bowering on 1 December 1996 … The Bankruptcy Act and Rules … contemplate that there will be a formal act of service by the petitioner creditor or by someone acting on behalf of the petitioner creditor. The formality of the act of service is important as the date when service occurs is critical in determining if and when an act of bankruptcy has occurred. It is for this reason that it is essential that due service in accordance with the statutory rules is insisted upon. It is essential to the proper working of the procedure initiated by the service of a bankruptcy notice that the date and manner of service be capable of reliable proof by the petitioning creditor … In Deputy Commission of Taxation v Mahaffy [2011] FMCA 416; BC201104059 Smith FM dealing with Gummow J’s judgment (Ditfort, Re; Ex parte Deputy Commissioner of Taxation (NSW) (1988) 19 FCR 347; 83 ALR 265), said at [12] et seq: [12] As I understand his Honour’s conclusion that something short of the passing over of the

bankruptcy notice from the process server to the debtor might satisfy the concept of personal delivery, it requires three elements to be satisfied: i) there has been an attempt by the process server at personal delivery in the sense of passing over in circumstances where this would have been physically possible, but for the refusal by a debtor to take “actual corporal possession” of the proffered court process; ii) the process server earlier or in response to the debtor’s refusal has “informed the debtor of the nature of the process”; and iii) the process server has “left it before or near the debtor so that the debtor has unimpeded and immediate access to the documents”. In my opinion, his Honour was suggesting that the second and third elements only arise for consideration if the first element has occurred. That is, there has been a conjunction of the process server with the debtor in a physical sense, in which a physical delivery has been rendered impossible only by the conduct of the debtor in refusing to accept a proffered bankruptcy notice. The second and third elements are then directed at establishing that, in practical effect, an immediate delivery has occurred of the process, allowing the debtor to have immediate knowledge of the nature of the process and to read it, so that he was left in an equivalent position to being left in physical possession of the process upon the departure of the process server. This is achieved by the process server conveying a description of the document of the process to the debtor, and placing it in his immediate locality where he can pick it up. [13] I would not understand his Honour’s language as accepting that these elements can be pushed so as to apply to a situation where, in effect, there has not been anything that might appear to be ‘personal delivery’ to the debtor, but only ‘personal delivery’ to a third person, even if there is a reasonable expectation that the third person would then effect a personal delivery to the debtor. [14] Later authority has, in my opinion, not established a less demanding approach. [page 764] [15] Re Ditfort was considered by Pincus J in Hudson, Re Hudson; Ex parte G E Crane and Sons Ltd (1990) 25 FCR 318. The circumstances of the service in that case are suggested at 319: The evidence concerning 23 May 1989 is, in substance, that instead of handing the bankruptcy notice to the debtor, the process server attended at his address and when the debtor refused to admit the process server to the premises, the process server attached the bankruptcy notice to the front door. During this period, that is when the server was attaching the notice, he explained to the debtor (who was behind the closed door) what he was doing and finished by saying, “Are you sure you would not like to come out and accept service?” to which the debtor replied “No”. There seems no doubt that the person who spoke to the process server was the debtor. [16] His Honour’s judgment did not address whether in the course of the process server’s ‘explanations’ to the debtor the process server informed him of “the nature of the process”. This suggests that satisfaction of the second element under Re Ditfort was not in issue, since otherwise his Honour would have recounted the whole of the conversation and addressed that issue. I therefore do not consider that this case is authority allowing any, as it were, laxity in relation to the second element. [17] Re Hudson does, however, stand as authority that the requirement of the third element under Re

Ditfort, of leaving a document “before or near the debtor so that the debtor had unimpeded and immediate access to the document”, can be satisfied by pushing the document under a closed door to a debtor who is known to be immediately behind a closed door “which he could have opened, and for all one knows did open, to get the document” (see p 320). I would not take its authority any further than that. [18] In relation to the second element, that of informing the debtor of the nature of the process, Sackville J in Wong v Robinson [1995] FCA 805 considered whether personal service of a creditor’s petition had been effected on a person, when she refused to accept it and it was placed in her presence by the process server. His Honour made a finding, largely it seems from what was not stated in the debtor’s evidence to the Court, that: I infer that the applicant knew on [the occasion of service] that the document left by the commercial agent was a creditor’s petition. He then addressed the second element under Re Ditfort: The circumstances of the present case satisfy the conditions for service specified by Gummow J, except in one respect. This is that, on the evidence, the commercial agent did not say specifically that it was a creditor’s petition that was being served. However, I have found that the applicant not only deliberately moved away in order to avoid taking possession of the documents, but she understood that it was a creditor’s petition that the commercial agent was attempting to serve. The applicant clearly had unimpeded and immediate access to the documents and the only reason she did not take physical possession of them was her desire to contend that she had not been properly served. [84,730.15] Debtor misled The court may look at facts extraneous to the notice itself to determine whether the debtor served with the bankruptcy notice could be misled: see Re Wimborne; Ex parte Debtor, above. See also Re Florance; Ex parte Turimetta Properties Pty Ltd (1979) 28 ALR 403 where a reading of an order of the Court of Appeal together with the notice of cross-appeal and the terms of the Supreme Court order, led to the conclusion that the bankruptcy notice correctly stated the amount due by the debtor. And see Re Wong; Ex parte Kitson (1979) 27 ALR 405; 38 FLR 207. A bankruptcy notice which specifies the wrong place for the payment of the judgment debt is fundamentally defective. The defect is of a kind which could reasonably mislead the debtor and is not a “formal defect” within the ambit of s 306: see Re Francis; Ex parte Gartrell (1983) 77 [page 765] FLR 80. See also Worchild v Drink Nightclub (Qld) Pty Ltd [2005] FCA 863; BC200504454 which discussed the principle in Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71 at 77; 79 ALR 161. The error in the case of misnomers does not extend to joint debtors to the extent that such a notice, which complies with all of the statutory requirements in respect of one of two or more joint debtors, is effective against that debtor notwithstanding that it is invalid or defective as against the other debtor or debtors or has not been served on the other debtor or debtors. See Frank Dimasi (t/as F & M Dimasi) v Nangiloc Colignan Farms Pty Ltd (2007) 157 FCR 387; [2007] FCA 308; BC200701353 at [43] per Ryan J. Malek v Macquarie Leasing Pty Ltd (2007) 156 FCR 552; [2007] FCAFC 14; BC200700782 was applied in that case to conclude that a misnomer in respect of one joint debtor was not capable of

causing substantial injustice to the other debtor, and that, in such a case, the notice was capable of rescue by virtue of s 306. See [84,730.15]. But the real question is whether the defect is capable of being cured. A persistent and increasingly strong line of authority descending from the judgment of Finkelstein J in Commonwealth Bank of Australia v Horvath (Jnr) (1999) 161 ALR 441; [1999] FCA 143; BC9900436 continues to find support. Finkelstein J said at [13]: … Then comes the question whether we should regard the shortcomings of the notice as a formal defect or irregularity which should be cured by the court in its discretion under s 147 of the Bankruptcy Act 1914 [the counterpart of s 306 of the Australian legislation] … The case is rather different from anything that subsequently occurs in bankruptcy proceedings because the failure to comply with the notice is the very act of bankruptcy on which all the rest is founded. Unless, therefore, you have a notice that fulfils the statutory requirements, you cannot fairly say that a debtor has committed an act of bankruptcy by not complying with it … On the whole, it appears to me, although the debtors do not seem to have been misled in any way in the particular circumstances, that we should be departing from the course mapped out by reported authority if we were to overlook or attempt to cure the shortcomings of the notice in the present case…. A similar view was expressed in Skouloudis v St George Bank (2008) 173 FCR 236; [2008] FCA 1765; BC200810409 and by Burchardt FM in Zurcas v Bryantcraft Pty Ltd [2010] FMCA 161; BC201001191 in which the bankruptcy notice was set aside on the basis of the above authority. See also [84,760.5] which deals with service and personal service. All the cases discussing this concept draw upon this section in their reasoning.

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[84,735] Protection of Registrars, magistrates etc in relation to examinations 306A (1) A Registrar or magistrate has, in the exercise of the powers and the performance of the functions conferred on him or her by this Act in relation to the examination of a person, the same protection and immunity as a Justice of the High Court. [subs (1) am Act 119 of 1987 s 104]

(2) A barrister, solicitor or other person representing a person being examined under this Act, or a person entitled to take part in the examination of a person under this Act, has in respect of the examination the same protection and immunity as a barrister has in appearing for a party in proceedings in the High Court. [subs (2) am Act 119 of 1987 s 104]

(3) Subject to this Act, a person summoned to attend for examination, or appearing for examination, under this Act has the same protection, and is, in

addition to the penalties provided by this Act, subject to the same liabilities, as a witness in proceedings in the High Court. [subs (3) am Act 119 of 1987 s 104] [s 306A insrt Act 12 of 1980 s 167]

[page 766]

[84,740] Protection in respect of reports *306B (1) An action, suit or proceeding does not lie against the InspectorGeneral, an Official Receiver, the trustee of the estate of a bankrupt or any other person in respect of a statement made in good faith in a report prepared or given to a person under subsection 12(1A) or (1B), 155A(6), 155F(2), 155I(4) or section 189A. [subs (1) am Act 74 of 1981 s 146; Act 21 of 1985 s 36; Act 119 of 1987 s 105; Act 118 of 1990 s 37; Act 44 of 1996 s 3 and Sch 1]

(2) Subsection (1) shall not be taken to limit or affect any other right, privilege, immunity or defence existing apart from that subsection. [s 306B insrt Act 12 of 1980 s 167] SECTION 306B GENERALLY [84,740.5] General Section 306B only operates to provide a ‘qualified privilege’ to persons under its umbrella in respect of defamation: Cobbs Hill v El Moustafa (1998) 83 FCR 403.

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[84,745] Protection in respect of trustee’s reports 306C [s 306C rep Act 74 of 1981 s 147]

[84,750] Proceedings in firm name 307 Any person or persons carrying on business under a firm name may take proceedings or be proceeded against under this Act in the firm name, but in that case the Court may, on the application of an interested person, order the name of the person or the names of the persons so carrying on business to be disclosed and verified in such manner as the Court directs.

[84,755] Representation of corporation etc 308 Subject to this Act, for the purposes of this Act: (a) a corporation may act by any person duly authorized in that behalf by the corporation; (b) a partnership may act by any of its members or a duly authorized agent; (c) a person of unsound mind may act by a person authorized or empowered by law to act for him or her; and (d) any person may act by his or her agent duly authorized in that behalf. [s 308 am Act 44 of 1996 s 3 and Sch 2] SECTION 308 GENERALLY [84,755.1] Employment of agent In Slack v Bottoms English Solicitors [2003] FCA 1337; BC200307010 at [6] Spender J held that s 308(b) did not authorise the employment of an agent to represent a bankrupt in the Federal Magistrates’ Court or on appeal, on the ground that this was “not the doing of an act ‘for the purposes of’ the Bankruptcy Act”.

____________________

[84,760] Service of notices etc 309 (1) [subs (1) rep Act 44 of 1996 s 3 and Sch 1] [page 767] (1A) Where a trustee carries on business at 2 or more addresses, a notice or other document in relation to which no special manner of service is prescribed may be sent to the trustee at any of those addresses. [subs (1A) insrt Act 12 of 1980 s 168; am Act 44 of 1996 s 3 and Sch 1]

(2) Where a notice or other document is required by this Act to be served on or given to a person, the Court may, in a particular case, order that it be given or served in a manner specified by the Court, whether or not any other manner of giving or serving the notice or other document is prescribed. SECTION 309 GENERALLY

[84,760.5] “service” Service involves making a legal delivery, and transfer of possession is essential: Re De Ieso (1978) 24 ALR 701; 45 FLR 396. [84,760.6] “Personal service” Smith FM in Deputy Commissioner of Taxation v Mahaffey [2011] FMCA 416; BC201104059 at [9] et seq summarised the position as: [9] In effect, this regulation replicates the previous Bankruptcy Rules in relation to service of bankruptcy notices, when they were processes of the bankruptcy court which were served in accordance with its rules. Under Rule 15 of the Bankruptcy Rules, in the absence of an order allowing substituted service under s 309(2) of the Bankruptcy Act 1966 (Cth), personal service of the bankruptcy notice was required to be “effected on the debtor by delivering to the debtor personally a copy of the bankruptcy notice signed and stamped by the Registrar”. [10] The effect of that requirement was the subject of discussion by Gummow J in Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 in a passage which has been quoted on many subsequent occasions, including when addressing whether personal delivery to the debtor has occurred under the present bankruptcy regulations. His Honour’s discussion at pages 359 and 360 was considered by Beaumont J in a subsequent case involving Mr Ditfort in relation to a similar provision requiring personal service, Ditfort v Temby (1990) 26 FCR 72. The starting point is, as Beaumont J noted at 79: It will be recalled that r 126 of the Bankruptcy Rules requires service to be effected by delivering the summons to the person personally. There are thus two requirements (1) there must be a “delivery”, that is to say, a physical delivery (cf Re a Debtor (No 441 of 1938) [1939] Ch 251 at 257); and (2) the delivery must be to the person concerned “personally”, that is to say, to that person and not to some other person, so that, in the absence of an order for substituted service, purported service on a person other than the person named in the summons is not valid service: see N J Williams, Civil Procedure — Victoria, Vol 1, p 2475 and the cases there cited. [11] In his discussion in the earlier case, Gummow J after discussing older authorities about personal service, said at 360: I accept the submission by the respondent to the present application that there may be delivery personally to the debtor of process within the meaning of r 15 of the Bankruptcy Rules, even though the process has not been left in what Patteson J described as the “actual corporal possession of the defendant”. If the debtor were refusing to take such actual corporal possession of the process, but the process server informed the debtor of the nature of the process and left it before or near the debtor so that the debtor had unimpeded and immediate access to the documents, that, in my view, should, in general, be sufficient to comply with r 15. [12] As I understand his Honour’s conclusion that something short of the passing over of the bankruptcy notice from the process server to the debtor might satisfy the concept of personal delivery, it requires three elements to be satisfied: i) there has been an attempt by the process server at personal delivery in the sense of passing over in circumstances where this would have been physically possible, but for the refusal by a debtor to take “actual corporal possession” of the proffered court process; [page 768] ii)

the process server earlier or in response to the debtor’s refusal has “informed the debtor of the nature of the process”; and

iii) the process server has “left it before or near the debtor so that the debtor has unimpeded and immediate access to the documents”. In my opinion, his Honour was suggesting that the second and third elements only arise for consideration if the first element has occurred. That is, there has been a conjunction of the process server with the debtor in a physical sense, in which a physical delivery has been rendered impossible only by the conduct of the debtor in refusing to accept a proffered bankruptcy notice. The second and third elements are then directed at establishing that, in practical effect, an immediate delivery has occurred of the process, allowing the debtor to have immediate knowledge of the nature of the process and to read it, so that he was left in an equivalent position to being left in physical possession of the process upon the departure of the process server. This is achieved by the process server conveying a description of the document of the process to the debtor, and placing it in his immediate locality where he can pick it up. His Honour went on to consider later cases, namely Re Hudson; Ex parte GE Crane & Sons Ltd (1990) 25 FCR 318; BC9003590. His conclusion reinforces his treatment of the earlier cases: [17] Re Hudson does, however, stand as authority that the requirement of the third element under Re Ditfort, of leaving a document “before or near the debtor so that the debtor had unimpeded and immediate access to the document”, can be satisfied by pushing the document under a closed door to a debtor who is known to be immediately behind a closed door “which he could have opened, and for all one knows did open, to get the document” (see p 320). I would not take its authority any further than that. [18] In relation to the second element, that of informing the debtor of the nature of the process, Sackville J in Wong v Robinson [1995] FCA 805 considered whether personal service of a creditor’s petition had been effected on a person, when she refused to accept it and it was placed in her presence by the process server. His Honour made a finding, largely it seems from what was not stated in the debtor’s evidence to the Court, that: I infer that the applicant knew on [the occasion of service] that the document left by the commercial agent was a creditor’s petition. It is submitted that His Honour’s treatment of this line of authority makes it possible for the courts to dispose of such questions. A different situation arises from DM Developments v Driscoll [2011] FMCA 464; BC201104633, where it was held that: [43] In this instance there was evidence demonstrating that there had been some intervening conduct. That is the redirection of the postal article which occurred on 22 December. Irrespective of whether the debtor knew the article awaiting collection was a bankruptcy notice or otherwise, the fact remains that once he became aware that an article was awaiting his collection he would, in my view, ordinarily have been subject to the presumption that arises under regulation 16.01(2)(a). In this case the court would have normally held, but for the intervening conduct, that service had not been affected. In this the court would have followed Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347; 83 ALR 265. But, in reliance upon the rule, discussed below at [89,760.9A], there were additional facts to draw the necessary inference. [84,760.7] Service of bankruptcy notice See [80,915.25] and reg 16. [84,760.10] Substituted service It is well established that to obtain an order for substituted service it is not enough to show that the debtor is keeping out of the way to avoid service or that for some other

cause prompt personal service cannot be effected. It is also necessary to show that the method of substituted service sought will, in all reasonable probability, be effective in bringing knowledge of the proceedings to the debtor: Re Cook (1946) 13 ABC 245; Re Stewart; Ex parte Barrett (1967) 10 FLR 99; Re Williams [1969] ALR 179; (1969) 13 FLR 10. [page 769] [84,760.15] Discretion and “substituted” service The discretion conferred by s 309(2) is unfettered but the authorities show that in relation to a creditor’s petition the discretion is not to be exercised lightly. Normally, the court must be satisfied that abnormal difficulties exist in effecting personal service of the petition on the debtor and that there is a reasonable probability that the debtor will be informed of the petition as a result of the form of service identified. In Re Mendonca; Ex parte FCT (1969) 15 FLR 256 at 261 Gibbs J said: “It is a fundamental rule that a method of substituted service will not be allowed which will not in all reasonable probability be effective to bring knowledge of the proceedings to the debtor: Re Stewart; Ex parte Barrett (1967) 10 FLR 99.” Although it is useful to look at the discretion in terms of two limbs, the first limb being that there has to be special reason to dispense with the requirement of personal service and the second limb being that the debtor would in all probability have knowledge of the petition as a result of the substituted service, the two limbs are not separate and distinct compartments. Together they form a composite basis for the exercise of a discretion: Ginnane v Diners Club Ltd (1993) 42 FCR 90; 120 ALR 375. [84,760.20] Service of process overseas The jurisdiction to make sequestration orders is conferred on the court by s 43(1) of the Act. It is not a condition of jurisdiction that the debtor should be an Australian national or domiciled in Australia. The court has jurisdiction if, at the time when the act of bankruptcy was committed, the debtor was connected with Australia in one of the ways mentioned in s 43(1)(b). In Re Mendonca; Ex parte FCT (1969) 15 FLR 256, the court held that although the Act and the Rules did not make express provision for service outside the jurisdiction, s 309(2) of the Act was sufficient to provide the court with ample power to order service outside the jurisdiction. In that case, Gibbs J held that once the court sees that a petition is presented in circumstances which bring the case within s 43(1) but the debtor has absconded from Australia, the court will normally order service on the debtor under the jurisdiction. As to the method of ordering substituted service, the court in Mendonca, above, held that it is a fundamental rule that a method of substituted service will not be allowed if it will not in all reasonable probability succeed in bringing notice of the proceedings to the debtor: Re Stewart; Ex parte Barrett (1967) 10 FLR 99. Accordingly, the court in Mendonca made an order for service by post on condition that, if the documents were returned from overseas unclaimed through the post, the service would not be deemed to be effective. A contrary view is expressed in Re Trimboli; Ex parte DCT (1984) 4 FCR 586; 59 ALR 625. The court in Re Trimboli; Ex parte DCT, above also held that without a relevant convention, it is inappropriate as a matter of international comity to send to a place outside Australia (except perhaps to another part of the British Commonwealth) an official copy of originating process which bears the seal of the court and which may be thought to contain a command for the appearance of the person to whom the originating process is addressed in default of compliance with which he or she may suffer detriment or disadvantage. Accordingly, in Re Trimboli; Ex parte DCT, above, the orders prepared provided for giving the debtor a notice of the presentation of the petition rather than for sending an official copy of the petition to him in Ireland. On the other hand, in Re Skase; Ex parte Donnelly (1991) 32 FCR 212; 104 ALR 229 the question

arose as to whether a summons under s 81 could validly issue to a person out of the jurisdiction. Pincus J held that it is clear that Parliament can validly provide for issue of a summons against persons resident outside Australia to give evidence with respect to the affairs of an Australian bankrupt. The external affairs power extends to persons outside Australia: Polyukhovich v Commonwealth (1991) 172 CLR 501; 101 ALR 545. For that reason the presumption against extra-territorial operation cannot, in its application to the Commonwealth, rest on lack of power. It cannot be properly stated as a mere presumption that “the legislature does not intend to exceed its jurisdiction”. In Re Skase, above, the court drew a distinction between the power to issue a summons and the question of service and enforcement, the relevant inhibition being on service not issue. Accordingly his Honour read the expression “examinable person” in s 81 of the Act literally without any implication that the person must be present within the jurisdiction at the time of issue of the summons. The court in Re Skase also held that the court may exercise its powers under s 309(2) even in a [page 770] case where a rule specifically requires personal service. Accordingly, following Re Mendonca; Ex parte FCT, above, his Honour held that s 309(2) had the effect of permitting an order for substituted service out of the jurisdiction. See also Amalgamated Wireless (A’asia) Ltd v McDonnell Douglas Corp (1987) 16 FCR 238; 77 ALR 537.

____________________ *Editor’s Note: Sch 1 item 491 of Act 44 of 1996 provides that despite the amendments made by this Act to s 306B “an action, suit or proceeding does not lie in respect of a statement made in good faith in a report referred to in subsection 19AA(2), 150(3), 154A(3) or 189A(1) of the Bankruptcy Act 1966 as in force before this Schedule commenced.”

[84,765] Publication of notice of making of sequestration order, discharge etc 310 [s 310 rep Act 44 of 1996 s 3 and Sch 1]

[84,770] Stamp duty not payable on trustee’s cheques or receipts 311 (1) In this section, trustee means: (a) a trustee of the estate of a bankrupt; or (b) a trustee of a personal insolvency agreement; or (c) a trustee of a composition or a scheme of arrangement; or (d) a trustee of the estate of a deceased person in respect of which an

order has been made under Part XI of this Act. [subs (1) am Act 121 of 1968 s 9; Act 44 of 1996 s 3 and Sch 1; Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(2) Notwithstanding anything contained in a law of a State or Territory, stamp duty is not payable under such a law: (a) on a cheque drawn by a trustee on an account kept under this Act; (b) on a cheque received by a trustee in his or her capacity as trustee, being a cheque drawn in a State or Territory other than that in which it is received by the trustee; or (c) on a receipt given by a trustee in his or her capacity as trustee. [subs (2) am Act 44 of 1996 s 3 and Schs 1, 2]

[84,775] Return or destruction of old accounts and records 312 (1) During the administration of the estate of a bankrupt or debtor, the trustee may destroy or give back to the bankrupt or debtor any books that: (a) the bankrupt or debtor gave to any trustee of the estate; and (b) the trustee considers will not help the administration. (2) After the end of the administration of the estate of a bankrupt or debtor, the last trustee to administer the estate: (a) may give back to the bankrupt or debtor any books that the bankrupt or debtor gave to any trustee of the estate; and (b) may destroy any other books relating to the estate in accordance with subsection (3) or (4). (3) The trustee may destroy books relating to the estate at any time at least 6 years after the end of the administration if, by the end of the administration: (a) no property had been realised; and (b) no dividends had been distributed to creditors; and (c) the trustee considered that there was no chance of realising any property or distributing dividends. (4) The trustee may destroy books relating to the estate at any time at least 15 years after the end of the administration if, by the end of the administration: (a) property had been realised; and

(b) the trustee had received some remuneration. [page 771] (5) A trustee may destroy books only in accordance with this section. (6) This section does not limit a trustee’s power to give back to a bankrupt or debtor books that the bankrupt or debtor gave to any trustee of the estate of the bankrupt or debtor. (7) This section does not limit a trustee’s power to require a bankrupt or debtor to give books to the trustee (even if the books have previously been given to a trustee of the estate). (8) In this section: end of the administration means: (a) in the case of a bankruptcy — the day on which the bankrupt is discharged or the bankruptcy is annulled, whichever happens first; or (b) in the case of an administration under Part X — the day 3 years after the day on which a personal insolvency agreement made by the debtor for the administration of the debtor’s estate took effect; or (c) in the case of an administration under Part XI — the day 3 years after the day on which the administration is taken to have commenced under section 247A. [def am Act 80 of 2004 s 3 and Sch 1, opn 1 Dec 2004] [s 312 subst Act 44 of 1996 s 3 and Sch 1]

[84,780] Audit of accounts and records of the Official Trustee and the Official Receivers 313 (1) The Auditor-General shall inspect and audit the accounts and records of the Official Trustee and the Official Receivers, and shall forthwith draw the attention of the Minister to any irregularity disclosed by the inspection and audit that, in the opinion of the Auditor-General, is of sufficient importance to justify his or her so doing. [subs (1) am Act 44 of 1996 s 3 and Schs 1, 2]

(2) The Auditor-General may, at his or her discretion, dispense with all or any part of the detailed inspection and audit of any accounts or records of the Official Trustee and the Official Receivers. [subs (2) am Act 44 of 1996 s 3 and Schs 1, 2]

(3) The Auditor-General shall, at least once in each financial year, report to the Minister the results of the inspection and audit carried out under subsection (1). (4) The Auditor-General or a person authorized by him or her is entitled at all reasonable times to full and free access to all books of the Official Trustee and the Official Receivers. [subs (4) am Act 44 of 1996 s 3 and Schs 1, 2]

(5) The Auditor-General or a person authorized by him or her may make copies of, or take extracts from, any books of the Official Trustee or an Official Receiver. [subs (5) am Act 44 of 1996 s 3 and Schs 1, 2]

(6) The Auditor-General or a person authorized by him or her may require any person to furnish him or her with such information in the possession of the person or to which the person has access as the Auditor-General or authorized person considers necessary for the purposes of the functions of the Auditor-General under this Act, and the person shall comply with the requirement. [subs (6) am Act 44 of 1996 s 3 and Sch 2]

(7) A person who contravenes subsection (6) is guilty of an offence punishable, upon conviction, by a fine not exceeding $200. [page 772]

[84,785] Annual report 314 [s 314 rep Act 44 of 1996 s 3 and Sch 1]

[84,790] Regulations 315 (1) The Governor-General may make regulations prescribing matters: (a) required or permitted by this Act to be prescribed; or

necessary or convenient to be prescribed for carrying out or giving (b) effect to this Act. (2) In particular, the regulations may: (a) provide for the establishment, maintenance, correction and inspection of the National Personal Insolvency Index; and (b) specify matters that must be, or may be, entered in the Index; and (c) provide for the obtaining of extracts of material entered in the Index; and (d) provide for the use of extracts of material entered in the Index in evidence in proceedings under this Act and other laws of the Commonwealth or of a State or Territory; and (e) provide for immunity from actions for defamation arising out of publication of material in the Index or publication of extracts of material from the Index; and (f) provide for information and documents to be given to persons for entry in the Index; and (g) provide for the means of service of documents; and (h) provide for the publication of notice of specified events; and (i) provide for the manner in which committees referred to in Division 1 of Part VIII are to perform their functions, including: (i) the convening of meetings of committees; and (ii) the number of members of a committee who form a quorum; and (iii) disclosure of interest in a matter before a committee; and (iv) the manner in which questions are to be decided by the committee; and. (j) provide for the charging and payment of fees, but not the setting of amounts of fees other than fees mentioned in paragraph 81(17)(b), in relation to: (i) proceedings under this Act; and (ii) inspection of material entered in the Index; and (iii) obtaining extracts of material entered in the Index; and (iv) inspection and copying of documents given to Official Receivers; and

(v) the making of other requests or applications under this Act or the presentation or lodgment of other documents under this Act; and (k) prescribe penalties not exceeding 10 penalty units for offences against the regulations; and (l) provide for a person who is alleged to have committed an offence against the regulations to pay a penalty to the Commonwealth as an alternative to prosecution (being a penalty not exceeding one-fifth of the maximum fine that a court could impose on the person for that offence). [subs (2) am Act 11 of 1997 s 3 and Sch 1; Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006; Act 106 of 2010 s 3 and Sch 2[83], opn 1 Dec 2010] [s 315 subst Act 44 of 1996 s 3 and Sch 1]

[84,795] Legislative instruments determining fees 316 (1) The Minister may make legislative instruments determining the amounts of one or more of the following: (a) fees for the purposes of one or more of subsections 54(4), 55(9), 56G(2) and [page 773] 57(11), subparagraph 77C(3)(b)(iii), paragraphs 154A(3)(b), 155C(1)(b) and 155D(1)(b) and subsection 163A(2), paragraphs 186B(2)(c) and 186D(1)(b) and subsections 188B(3), 226(3) and (4) and 246(5) (as they apply of their own force or as they apply because of another provision); (b) other fees relating to one or more of the following: (i) proceedings under this Act; (ii) inspection of material entered in the National Personal Insolvency Index; (iii) obtaining extracts of material entered in the National Personal Insolvency Index; (iv) inspection and copying of documents given to Official

Receivers; (v) the making of other requests or applications under this Act or the presentation or lodgment of other documents under this Act; (c) remuneration of the Official Trustee. [subs (1) am Act 44 of 2007 s 3 and Sch 1[20], opn 11 Apr 2007]

(2) Fees determined must not be such as to amount to taxation. [s 316 insrt Act 34 of 2006 s 3 and Sch 1, opn 1 July 2006]

[page 775]

[84,890]

SCHEDULE 1 — ACTS REPEALED Section 4(1)

Bankruptcy Act 1924 Bankruptcy Act 1927 Bankruptcy Act 1928 Bankruptcy Act 1929 Bankruptcy Act 1930 Bankruptcy Act 1932 Bankruptcy Act 1933 Bankruptcy Act 1945 Bankruptcy Act 1946 Bankruptcy Act 1954 Bankruptcy Act 1958 Bankruptcy Act 1959 Bankruptcy (Decimal Currency) Act 1965

[page 776]

[84,895] [Sch 2 rep Act 44 of 1996 s 3 and Sch 1]

SCHEDULE 2

[page 777]

[84,920] [Sch 3 rep Act 12 of 1980 s 174]

SCHEDULE 3

[page 778]

[84,940] [Sch 4 rep Act 12 of 1980 s 174]

SCHEDULE 4

[page 779]

Bankruptcy (Estate Charges) Act 1997 TABLE OF PROVISIONS Section

Title

Paragraph

1 2 3 4

PART 1 — PRELIMINARY Short title …. Commencement …. Act to bind the Commonwealth Crown …. Interpretation ….

[85,140] [85,145] [85,150] [85,155]

5

PART 2 — INTEREST CHARGE Interest charge ….

[85,255]

6 6A 7 7A 8

9

PART 3 — REALISATIONS CHARGE Realisations charge …. Charge not payable on estate surplus …. Amount of charge payable …. Certain amounts treated as being received by person …. Working out the amount on which charge is payable …. PART 4 — MISCELLANEOUS Regulations ….

[85,355] [85,357] [85,360] [85,363] [85,365]

[85,370]

[page 780]

Bankruptcy (Estate Charges) Act 1997 TABLE OF AMENDMENTS The Bankruptcy (Estate Charges) Act 1997 No 12 was assented to on 13 March 1997 and commenced on 14 April 1997. The Act has since been amended by: Amending Legislation Bankruptcy (Estate Charges) Amendment Act 2001 No 158 Bankruptcy (Estate Charges) Amendment Act 2002 No 61 1Bankruptcy (Estate Charges) Amendment Act 2004 No 81

Date of Assent 1 October 2001

Date of Commencement 3 July 2002

3 July 2002

3 July 2002

23 June 2004

1 December 2004 (on commencement of Sch 1 of Bankruptcy Legislation Amendment Act 2004 No 80) Sch 2: 1 July 2006

Bankruptcy Legislation 3 May 2006 Amendment (Fees and Charges) Act 2006 No 34 2Bankruptcy (Estate Charges) 10 April 2007 Amendment Act 2007 No 43

1 July 2007

1Editor’s 2Editor’s

note: See [85,125] for transitional provisions of this Act. note: see [85,127] for application of the amendments.

[page 781]

TRANSITIONAL PROVISIONS

Notes to the Bankruptcy Legislation Amendment (Fees and Charges) Act 2006 No 34 [85,123] Application of amendments Sch 2 item 3 provides as follows: Application of amendments 3 The amendments of the Bankruptcy (Estate Charges) Act 1997 made by this Schedule apply in relation to the financial year starting on 1 July 2006 and later financial years.

[page 782]

Notes to the Bankruptcy (Estate Charges) Amendment Act 2004 No 81 [85,125] Transitional provisions Sections 5(2)(b) and 6(1)(c) of the principal Act were substituted by items 1 and 2 respectively of Sch 1 Pt 1 of the Bankruptcy (Estate Charges) Amendment Act 2004 No 81. Item 1 also repealed s 5(2)(c) and (d), and item 3 amended s 6(1A) by replacing “deed” with “personal insolvency agreement”. Part 2 of the amending Act provides as follows:

“PART 2 — TRANSITIONAL PROVISIONS “Transitional 4 (1) In this item: post-commencement composition means a composition that was accepted after the commencement of this item by a special resolution of a meeting of creditors under section 204 of the Bankruptcy Act 1966 as that section continues to apply because of item 213 of Schedule 1 to the Bankruptcy Legislation Amendment Act 2004. post-commencement deed means a deed of assignment or a deed of arrangement that was executed after the commencement of this item by a debtor and a trustee under Part X of the Bankruptcy Act 1966 as that Part continues to apply because of item 213 of Schedule 1 to the Bankruptcy Legislation Amendment Act 2004. pre-commencement composition has the same meaning as in item 212 of Schedule 1 to the Bankruptcy Legislation Amendment Act 2004. pre-commencement deed has the same meaning as in item 212 of Schedule 1 to the Bankruptcy Legislation Amendment Act 2004. (2) Despite the amendment made by item 1 of this Schedule, section 5 of the Bankruptcy (Estate Charges) Act 1997 continues to apply, in relation to an amount to which a person is entitled because the person is: (a) the trustee of a pre-commencement deed; or (b) the trustee of a pre-commencement composition; or

(c) the trustee of a post-commencement deed; or (d) the trustee of a post-commencement composition; as if that amendment had not been made. (3) Despite the amendments made by items 2 and 3 of this Schedule, Part 3 of the Bankruptcy (Estate Charges) Act 1997 continues to apply, in relation to an amount received by a person because the person is: (a) the trustee of a pre-commencement deed; or (b) the trustee of a pre-commencement composition; or (c) the trustee of a post-commencement deed; or (d) the trustee of a post-commencement composition; as if those amendments had not been made.”

[page 783]

Notes to the Bankruptcy (Estate Charges) Amendment Act 2007 No 43 [85,127] Application of amendments Sch 1 item 4 provides as follows: Application of amendments 4 The amendments made by this Schedule apply in relation to a debt agreement made as the result of the acceptance of a debt agreement proposal given to the Official Receiver on or after 1 July 2007.

[page 785]

PART 1 — PRELIMINARY

[85,140] Short title 1 This Act may be cited as the Bankruptcy (Estate Charges) Act 1997.

[85,145] Commencement 2 (1) Subject to subsection (2), this Act commences on a day to be fixed by Proclamation. (2) If this Act does not commence within 6 months after the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period.

[85,150] Act to bind the Commonwealth Crown

3 This Act binds the Crown in right of the Commonwealth. However, it does not bind the Crown in right of a State, of the Australian Capital Territory, of the Northern Territory or of Norfolk Island.

[85,155] Interpretation 4 (1) In this Act: charge period* means a financial year. [def subst Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002; am Act 34 of 2006 s 3 and Sch 2, opn 1 July 2006]

(2) Unless the contrary intention appears, other expressions used in this Act have the same meanings as in the Bankruptcy Act 1966.

PART 2 — INTEREST CHARGE

[85,255] Interest charge 5 (1) An amount of interest to which a person is entitled, in his or her personal capacity, under subsection 169(1B) or 185LD(3) of the Bankruptcy Act 1966 is payable to the Commonwealth as a charge. [subs (1) am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002; Act 43 of 2007 s 3 and Sch 1[1], opn 1 July 2007]

*(1A) No charge is payable by a person in respect of an account for a charge period if the amount of that charge would be less than $10, or a higher amount prescribed by the regulations. [subs (1A) insrt Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002; am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002] *Editor’s note: The definition charge period was substituted by Sch 1 Pt 1, item 1 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 11(2)–(3) of the amending Act provide as follows: “(2) If this Act commences during an old charge period ending on 31 October, then: (a) that charge period is extended until 31 December; and (b) the amendment made by item 1 applies from 1 January following that 31 December. (3) In this item: old charge period means a charge period within the meaning of the Estate Charges Act (ignoring the amendment made by item 1).” *Editor’s note: Subsection (1A) was inserted by Sch 1 Pt 1, item 2 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 12 of the amending Act provides as follows: “Items 2 and 5

12 The amendments made by items 2 and 5 apply to charge periods that end after the commencing time.”

[page 786] (2) In subsection (1), the reference to subsection 169(1B) of the Bankruptcy Act 1966 includes a reference to that subsection as applied by the following provisions of that Act: (a) section 210 (which applies section 169 to a controlling trustee under Division 2 of Part X of that Act); (b) subsection 231(5) (which applies section 169 to a personal insolvency agreement); (c) [repealed] (d) [repealed] (e) subsection 248(1) (which applies section 169 to administration of estates under Part XI of that Act). [subs (2) am Act 81 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(3) The charge is payable by the person. [subs (3) am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002]

**(4) The charge is payable within 35 days after the end of the charge period in which the interest was paid. [subs (4) am Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002]

PART 3 — REALISATIONS CHARGE

[85,355] Realisations charge 6 (1) A charge, calculated in accordance with sections 7 and 8, is imposed in respect of amounts received by a person (including the Official Trustee) who, during a charge period: (a) is the trustee of the estate of a bankrupt under the Bankruptcy Act 1966; or * is the trustee of a composition or scheme of arrangement under (aa) Division 6 of Part IV of the Bankruptcy Act 1966; or (ab) is the administrator of a debt agreement under Part IX of the

Bankruptcy Act 1966; or (b) is controlling trustee in relation to a debtor whose property has become subject to control under Division 2 of Part X of the Bankruptcy Act 1966; or (c) is the trustee of a personal insolvency agreement executed in relation to a debtor under Part X of the Bankruptcy Act 1966; or [page 787] (d) is the trustee of the estate of a deceased person under Part XI of the Bankruptcy Act 1966. [subs (1) am Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002; Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002; Act 81 of 2004 s 3 and Sch 1, opn 1 Dec 2004; Act 43 of 2007 s 3 and Sch 1[2], opn 1 July 2007]

**(1A) No charge is payable by a person for a charge period in respect of a particular estate, personal insolvency agreement, composition or debtor (as the case requires) if the amount of that charge would be less than $10, or a higher amount prescribed by the regulations. [subs (1A) insrt Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002; am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002; Act 81 of 2004 s 3 and Sch 1, opn 1 Dec 2004]

(1B) Charge is not payable by a person in the person’s capacity as administrator of a debt agreement under Part IX of the Bankruptcy Act 1966 if the person is the debtor to whom the debt agreement relates. [subs (1B) insrt Act 43 of 2007 s 3 and Sch 1[3], opn 1 July 2007]

(2) The charge is payable by the person to the Commonwealth. [subs (2) am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002]

***(3) The charge is payable within 35 days after the end of the charge period. [subs (3) am Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002] **Editor’s note: Subsection (4) was amended by Sch 1 Pt 1, item 3 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 13 of the amending Act provides as follows: “Items 3 and 6 13 The amendments made by items 3 and 6 apply to charge periods that end after the commencing time.” *Editor’s note: Subsection (1)(aa) was inserted by Sch 1 Pt 1, item 4 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 14 of the amending Act provides as follows: “Item 4

14 The amendment made by item 4 applies to compositions and schemes of arrangement that are accepted by creditors after the commencing time.”

[85,357] Charge not payable on estate surplus †6A (1) If: (a) the person receives an amount in respect of a bankrupt’s estate; and (b) as a result of receiving the amount, the person becomes able to pay off all the bankrupt’s debts; then the following amounts are not taken into account in determining the amount on which charge is payable: (c) any excess of the received amount over the amount needed to pay off all the bankrupt’s debts; (d) any amount later received by the person in respect of the estate. [subs (1) am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002]

(2) In this section: [page 788] bankrupt’s debts has the same meaning as in subsection 153A(6) of the Bankruptcy Act 1966. [s 6A insrt Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002] **Editor’s note: Subsection (1A) was inserted by Sch 1 Pt 1, item 5 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 12 of the amending Act provides as follows: “Items 2 and 5 12 The amendments made by items 2 and 5 apply to charge periods that end after the commencing time.” ***Editor’s note: Subsection (3) was amended by Sch 1 Pt 1, item 6 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 13 of the amending Act provides as follows: “Items 3 and 6 13 The amendments made by items 3 and 6 apply to charge periods that end after the commencing time.” †Editor’s note: Section 6A was inserted by Sch 1 Pt 1, item 7 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 15 of the amending Act provides as follows: “Item 7 15 The amendment made by item 7 applies to amounts received after the commencing time.”

[85,360] Amount of charge payable 7 (1) The amount of charge payable for a charge period is the percentage, determined by the Minister by legislative instrument, of the amount on which charge is payable for the period. (2) The Minister may make a legislative instrument determining the percentage. (3) The percentage determined must not be more than 15%. [s 7 subst Act 34 of 2006 s 3 and Sch 2, opn 1 July 2006]

[85,363] Certain amounts treated as being received by person ††7A

For the purposes of this Part, an amount is treated as received by the person if it is applied or dealt with on behalf of the person, or in accordance with the person’s directions. [s 7A insrt Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002; am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002]

[85,365] Working out the amount on which charge is payable 8 (1) The amount on which charge is payable for a charge period is the amount realised less the permitted deductions. (2) The amount realised is the total amount received by the person in the capacity referred to in subsection 6(1) during the charge period, but not including: (a) amounts paid to the person by creditors under an indemnity in respect of costs; or (b) amounts paid to the person under section 305 of the Bankruptcy Act 1966. [subs (2) am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002]

(3) The permitted deductions are all amounts paid by the person in the capacity referred to in subsection 6(1) during the charge period that are: (a) amounts paid by the person in carrying on the business of the bankrupt, deceased person or debtor; or

(b) amounts paid to secured creditors. [subs (3) am Act 61 of 2002 s 3 and Sch 1, opn 3 July 2002]

(4) Once an amount has been taken into account for the purposes of subsection (2) as an amount received, the whole or part of the amount is not to be taken into account again as an amount received for the purposes of another application of that subsection.

PART 4 — MISCELLANEOUS [Pt 4 insrt Act 158 of 2001 s 3 and Sch 1, opn 3 July 2002]

[85,370] Regulations 9 The Governor-General may make regulations prescribing matters: (a) required or permitted by this Act to be prescribed; or (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act. note: Section 7A was inserted by Sch 1 Pt 1, item 8 of Act 158 of 2001, for which Sch 1 Pt 2 (Transitional Provisions), item 16 of the amending Act provides as follows: “Item 8 16 The amendment made by item 8 applies to amounts that are applied or dealt with after the commencing time.” ††Editor’s

[page 789]

Bankruptcy (Registration Charges) Act 1997 (Repealed)* [Repealed]

TABLE OF PROVISIONS Section

1 2 3 4 5 6 7

Title

Short title …. Commencement …. Interpretation …. Charge on applying to be registered trustee …. Charge on registration of trustee …. Charge on extension of registration …. Charge on change of trustee’s condition ….

Paragraph

[85,565] [85,570] [85,575] [85,580] [85,585] [85,590] [85,595]

Note: The Bankruptcy (Registration Charges) Act 1997 is repealed by s 3 and Sch 3 of the Bankruptcy Legislation Amendment (Fees and Charges) Act 2006 No 34. The repealed Act remains in this service due to the application provision which provides (Sch 3 item 2): 2 Application (1) The repeal of section 4 of the Bankruptcy (Registration Charges) Act 1997 by this Part applies to applications made on or after 1 July 2006 under section 154A of the Bankruptcy Act 1966. (2) The repeal of section 5 of the Bankruptcy (Registration Charges) Act 1997 by this Part applies to registrations resulting from applications made on or after 1 July 2006 under *Editor’s

section 154A of the Bankruptcy Act 1966. (3) The repeal of section 6 of the Bankruptcy (Registration Charges) Act 1997 by this Part applies to extensions under section 155D of the Bankruptcy Act 1966 resulting from applications made on or after 1 July 2006 as described in section 155D of the Bankruptcy Act 1966.

[page 790]

Bankruptcy (Registration Charges) Act 1997 (Repealed) TABLE OF AMENDMENTS The Bankruptcy (Registration Charges) Act 1997 No 13 was assented to on 13 March 1997 and commenced on 14 April 1997. Since that date the Act has been amended by: Amending Legislation

Date of Assent

Date of Commencement

[page 791]

[85,565] Short title 1 This Act may be cited as the Bankruptcy (Registration Charges) Act 1997.

[85,570] Commencement 2 This Act commences on the commencement of the Bankruptcy (Estate Charges) Act 1997.

[85,575] Interpretation 3 Unless the contrary intention appears, expressions used in this Act have the same meanings as in the Bankruptcy Act 1966.

[85,580] Charge on applying to be registered trustee 4 (1) A charge of $1500 is imposed for making an application to be registered as a trustee under section 154A of the Bankruptcy Act 1966. (2) The charge is payable by the applicant to the Commonwealth.

[85,585] Charge on registration of trustee 5 (1) A charge of $1,000 is imposed for registering a person as a trustee under section 155C of the Bankruptcy Act 1966. (2) The charge is payable by the person to the Commonwealth.

[85,590] Charge on extension of registration 6 (1) A charge of $1000 is imposed for extending the term of a trustee’s registration under section 155D of the Bankruptcy Act 1966. (2) The charge is payable by the trustee to the Commonwealth.

[85,595] Charge on change of trustee’s condition 7 (1) A charge of $500 is imposed for making an application under section 155E of the Bankruptcy Act 1966 for conditions applying to a registered trustee to be changed or removed. (2) The charge is payable by the trustee to the Commonwealth.

[page 793]

Bankruptcy Regulations 1996 TABLE OF PROVISIONS Regulation

1.01 1.02 1.03 1.04

2.01

3.01

Title

Paragraph

PART 1 — PRELIMINARY Name of Regulations …. Commencement …. Interpretation …. Application of Criminal Code ….

[86,005] [86,010] [86,015] [86,020]

PART 2 — ADMINISTRATION Section 20J of the Act — prescribed rate of interest on moneys in Common Fund ….

[86,165]

PART 3 — COURTS Paragraph 29(5)(b) of the Act — prescribed countries ….

[86,315]

PART 4 — PROCEEDINGS IN CONNEXION WITH BANKRUPTCY

4.01 4.02 4.02A 4.03 4.04

DIVISION 1 — BANKRUPTCY NOTICES Application for bankruptcy notice …. Form of bankruptcy notices …. Service of bankruptcy notices …. Inspection of bankruptcy notices …. Judgment or order in foreign currency ….

[86,465] [86,470] [86,472] [86,475] [86,480]

4.05 4.06 4.07 4.08 4.09 4.10 4.10A 4.11 4.12 4.13

DIVISION 2 — PETITIONS Copy of petition to be given to Official Receiver …. Control of debtor’s property before sequestration …. Expenses of trustee before sequestration …. Application for damages where petition dismissed …. Subsection 50(5) of the Act — prescribed modifications of applied provisions …. Acceptance of debtor’s declaration …. Fee for presentation of debtor’s petition …. Prescribed information to be supplied by Official Receiver to debtor …. Debtor’s petition — filing of trustee’s consent …. Notice to partners of referral to Court of petition by other partners against the partnership ….

[86,530] [86,535] [86,540] [86,545] [86,550] [86,555] [86,557] [86,560] [86,565]

[86,570] [page 794]

4.14 4.15 4.16 4.17

DIVISION 3 — MISCELLANEOUS Notification by trustee to creditors …. Exercise of proxy by trustee’s representative at meeting …. Lodgment of proxies by fax — section 64M of the Act …. Inspection and copying of composition or scheme of arrangement ….

[86,620] [86,625] [86,630] [86,635]

4.18 4.19

Proposal and report for a composition or arrangement …. Meetings of creditors — modification of Division 5 of Part IV of the Act ….

[86,640] [86,645]

PART 5 — CONTROL OVER PERSON AND PROPERTY OF DEBTORS AND BANKRUPTS 5.01 Where debtor or bankrupt is arrested …. [86,795] 5.02 Fee for making request for consent to leave Australia …. [86,800] PART 6 — ADMINISTRATION OF PROPERTY

6.01 6.02

DIVISION 1 — ORDER OF PAYMENT OF DEBTS Priority payments under section 109 of the Act — prescribed matters …. Maximum amount payable to employee ….

[86,945] [86,950]

DIVISION 2 — PROPERTY AVAILABLE FOR PAYMENT OF DEBTS 6.03 Household property …. [87,000] 6.03A Personal property …. [87,000A] 6.03B Property divisible among creditors — prescribed amounts …. [87,005]

6.04A 6.04B

DIVISION 2A — RURAL SUPPORT SCHEMES Prescribed rural support schemes (Act s 116) …. Prescribed rural support schemes (Act s 116) …. DIVISION 3 — APPORTIONMENT OF PROPERTY [Repealed] DIVISION 4 — UNDERVALUED TRANSACTIONS

[87,025] [87,030]

6.09

6.10

6.11 6.12 6.12A 6.12B 6.12C 6.12D

Transfers exempt from being void against trustee …. DIVISION 5 — REALISATION OF PROPERTY Disclaimer of onerous property ….

[87,120]

[87,170]

DIVISION 6 — DEFINITION OF INCOME (ACT s 139L) Interpretation …. [87,220] Fringe benefits: modification of the FBTA Act …. [87,225] Restart scheme payments …. [87,250] Superannuation contributions …. [87,255] Family assistance and social security payments …. [87,260] Primary Industry rural support scheme …. [87,260D] [page 795]

6.13 6.14 6.15 6.15A 6.16 6.17 6.18

DIVISION 7 — CONTRIBUTIONS BY BANKRUPT Interpretation …. [87,275] Contributions by bankrupt — modes of payment …. [87,280] Contributions where bankrupt dies …. [87,285] Contribution assessment — income of dependant …. [87,285A] Reasons for application to Official Receiver to vary contributions [Repealed] …. [87,290] Certificate of outstanding contribution …. [87,295] Discharged bankrupt to give information if contribution unpaid …. [87,300]

DIVISION 8 — NOTICE UNDER SECTION 139ZL OF THE ACT 6.19 Notice under section 139ZL of the Act not to refer to protected money …. [87,350] 6.20 Notice under section 139ZL of the Act (notice of ceasing or commencing employment) …. [87,400]

6.21 6.22

7.01 7.01A 7.02

DIVISION 9 — DISTRIBUTION OF PROPERTY Minimum amount of dividend …. Manner of declaring final dividend …. PART 7 — DISCHARGE AND ANNULMENT Trustee to inform the Official Receiver of return of bankrupt to Australia …. Grounds of objection — failure to provide complete and accurate information …. Trustee to inform the Official Receiver of cancellation of objection ….

[87,450] [87,500]

[87,650] [87,653] [87,655]

PART 8 — TRUSTEES

8.01 8.02 8.03

8.04

DIVISION 1 — APPLICATION FOR REGISTRATION, OR EXTENSION OF REGISTRATION, AS A TRUSTEE Documents to accompany application for registration …. [87,805] Qualifications, experience, knowledge and abilities of applicants …. [87,810] Subsection 155C(2) of the Act — prescribed particulars of applicant for registration as a trustee …. [87,815] Extension of registration — proof of insurance …. [87,820] DIVISION 1A — CHANGE IN TRUSTEE’S PARTICULARS

8.04A

Trustee to notify change in particulars ….

[87,850]

DIVISION 2 — REGISTRATION OF TRUSTEES

8.05

Subdivision 1 — Preliminary Definitions ….

[87,875] [page 796]

Subdivision 2 — Constitution and procedure of committees generally 8.05A Chairperson of a committee …. [87,875A] 8.05B Trustee chosen by the Insolvency Practitioners Association of Australia …. [87,875B] 8.05C Resignation of chairperson …. [87,875C] 8.05D Resignation of members …. [87,875D] 8.05E Disclosure of interests …. [87,875E] 8.05F Removal of members from a committee …. [87,875F] 8.05G Convening of a replacement committee …. [87,875G] 8.05H General procedures of a committee …. [87,875H] 8.05I Procedure at committee meetings …. [87,875I] 8.05J Resolutions without meeting …. [87,875J]

8.05K 8.05L 8.05M 8.05N

Subdivision 3 — Inquiries and interviews Inquiries by the committee …. Notice of interview …. Applicant interviews …. Report of committee decision ….

[87,875K] [87,875L] [87,875M] [87,875N]

8.05O

Subdivision 4 — Other matters Confidentiality ….

[87,875O]

8.05P

Evidence of proceedings at committee meetings ….

[87,875P]

DIVISION 3 — CONSENT TO ACT, APPOINTMENT, AS TRUSTEE OF ESTATE 8.06 Consent to act as trustee — subsection 156A(1) of the Act …. [87,925] 8.06A Certificate of appointment under subsection 156A(3) of the Act …. [87,930] DIVISION 4 — TRUSTEE’S REMUNERATION Subdivision 1 — Prescribed rates — subsections 162(2) and (3) of Act 8.07 Prescribed rate — subsection 162(2) of the Act …. [87,975] 8.08 Prescribed rate — subsection 162(3) of the Act …. [87,980] Subdivision 2 — Trustee’s remuneration decided by Inspector-General 8.09 Circumstances in which trustee may apply to Inspector-General to decide remuneration …. [87,985] 8.10 Application to Inspector-General to decide remuneration …. [87,990] 8.11 Matters to which Inspector-General must have regard …. [87,995]

8.12 8.12A 8.12B 8.12C

Subdivision 3 — Remuneration of trustees — notices Notices …. Initial remuneration notice …. Remuneration approval notice …. Remuneration claim notice …. Subdivision 4 — Review of remuneration

[88,000] [88,003] [88,006] [88,009]

8.12D 8.12E

[88,012] [88,015]

Review of remuneration …. Application for review — remuneration ….

[page 797] 8.12F 8.12G

Application threshold …. Notification of decision ….

8.12H 8.12I

Subdivision 5 — Review of bill of costs Review of bill of costs …. Application for review — third party bill of costs ….

8.12J 8.12K 8.12L 8.12M 8.12N 8.12O

Subdivision 6 — Review by Inspector-General Review by Inspector-General …. How review to be conducted …. Powers of Inspector-General …. Non-compliance with directions …. Decision of Inspector-General …. Repayments of excess ….

[88,018] [88,021]

[88,024] [88,027]

[88,030] [88,033] [88,036] [88,039] [88,042] [88,045]

DIVISION 5 — REGISTERED TRUSTEE CEASING TO BE TRUSTEE OF AN ESTATE 8.13 Notice of removal of trustee of estate …. [88,050] 8.14 Notice of finalisation of administration; entry on the Index …. [88,055] DIVISION 5A — TRUSTEE’S ACCOUNTS AND AUDIT [Repealed] DIVISION 6 — VARIATION AND TERMINATION OF REGISTRATION

8.15 8.16

Subdivision 1 — Preliminary Definitions …. Documents to accompany application for change or removal of conditions ….

[88,105] [88,110]

Subdivision 2 — Constitution and procedure of committees generally 8.17 Chairperson of a committee …. [88,115] 8.18 Trustee chosen by the Insolvency Practitioners Association of Australia …. [88,120] 8.19 Resignation of chairperson …. [88,125] 8.20 Resignation of members …. [88,130] 8.21 Disclosure of interests …. [88,135] 8.22 Removal of members from a committee …. [88,140] 8.23 Convening of a replacement committee …. [88,145] 8.24 General procedures of a committee …. [88,150] 8.25 Procedure at committee meetings …. [88,155] 8.26 Resolutions without meeting …. [88,160]

8.27 8.28 8.29 8.30

Subdivision 3 — Inquiries and interviews Inquiries by the committee …. Notice of interview (Act s 155E(6)) …. Change of conditions on practising as a registered trustee — interview …. Involuntary termination of registration — interview ….

[88,165] [88,170] [88,175] [88,180] [page 798]

8.31

Report of committee decision …. Subdivision 4 — Other committee-related matters

[88,185]

8.32 8.33 8.34

8.34A

Confidentiality …. Evidence of proceedings at committee meetings …. Time for deciding matters (Act s 155I(1)) …. Subdivision 4A — Standards for trustees Performance standards for trustees (including controlling trustees) ….

[88,190] [88,195] [88,200]

[88,200A]

Subdivision 5 — Controlling trustees other than Official Trustee or registered trustees 8.35 Eligibility of controlling trustees, other than Official Trustee or registered trustees …. [88,205] 8.36 Review by Tribunal of determination under subregulation 8.35(2) …. [88,210] 8.37 Official Trustee to perform duties …. [88,215]

9.01 9.02 9.03 9.04 9.05 9.06 9.07

10.01

PART 9 — DEBT AGREEMENTS Prescribed information to be supplied to the debtor …. Qualifications of applicants …. Administrator’s fee to be paid according to work done [Repealed] …. Persons ineligible to be debt agreement administrator [Repealed] …. Official Trustee to administer agreement [Repealed] …. Duties of administrator [Repealed] …. Review by Tribunal of decisions under subregulation 9.06(3) [Repealed] ….

[88,255] [88,260] [88,265] [88,270] [88,275] [88,280] [88,285]

PART 10 — PERSONAL INSOLVENCY AGREEMENTS Modifications of Part X of the Act — joint

10.02 10.03 10.04 10.05

10.06

10.07

10.08

debtors …. Information to be given to debtor (Act ss 188(2AA) and (2AB)) …. Documents under section 188 of Act …. Documents for meeting called under an authority under section 188 of the Act …. Modifications of Division 5 of Part IV of the Act — meetings called under authorities under section 188 of the Act …. Controlling trustee to give Official Receiver copy of special resolution and certain particulars for the Index …. Modifications of Part VIII of the Act — controlling trustees and trustees of personal insolvency agreements …. Modifications of Division 1 of Part V of the Act — debtors whose property is subject to control under Division 2 of Part X of the Act ….

[88,405] [88,410] [88,415] [88,420]

[88,425]

[88,430]

[88,435]

[88,440] [page 799]

10.09 10.10 10.11

10.12

Meeting if trustee does not execute personal insolvency agreement …. Notification of personal insolvency agreement …. Sequestration order, or order terminating or setting aside a personal insolvency agreement — notice to Official Receiver (Act s 221, s 222 and s 222C) …. Termination of personal insolvency agreement by trustee (Act s 222A) ….

[88,445] [88,450]

[88,455] [88,460]

10.13 10.14

Modifications of Parts V and VI of the Act — personal insolvency agreements …. Certificate relating to realisation of divisible property and non-availability of dividend ….

[88,465]

[88,470]

PART 11 — ADMINISTRATION OF ESTATES OF DECEASED PERSONS IN BANKRUPTCY 11.01 Statement of affairs and of administration of estate …. [88,640] 11.01A Copy of petition etc to be given to Official Receiver …. [88,640A] 11.01B Proof of statement of affairs …. [88,640B] 11.02 Modifications of the Act — administration of estates of deceased persons …. [88,645]

12.01

PART 12 — UNCLAIMED DIVIDENDS OR MONEYS Statement where moneys are paid to the Commonwealth …. [88,795] PART 13 — NATIONAL PERSONAL INSOLVENCY INDEX

13.01 13.02

DIVISION 1 — PRELIMINARY Interpretation …. Establishment and maintenance of the National Personal Insolvency Index ….

[88,945] [88,950]

DIVISION 2 — INFORMATION TO BE ENTERED ON THE INDEX 13.03 What information is to be entered on the Index? …. [89,000] 13.04 Application for certain information not to be on the Index …. [89,005] 13.05 Application to the AAT …. [89,010]

13.06 13.07 13.08 13.09 13.10 13.11

DIVISION 3 — MISCELLANEOUS Inspection of the Index …. Copy of extract to be evidence …. Immunity from defamation …. Access to the Index …. Information extracted from the Index to be evidence …. Inspector-General may provide information from the Index [Repealed] ….

[89,060] [89,065] [89,070] [89,075] [89,080] [89,085] [page 800]

PART 14 — OFFENCES UNDER THE ACT

14.01

14.02

14.03 14.04 14.05 14.06 14.07 14.08 14.09

DIVISION 1 — OFFENCES Apprehension under a warrant — notification to Registrar in certain cases …. Registrar to act on notification; direction to person executing warrant …. DIVISION 2 — INFRINGEMENT NOTICES Purpose and effect of Division …. Definitions …. When infringement notices can be issued …. Contents of infringement notice …. Method of serving infringement notices …. Time for payment of infringement penalty …. Extension of time to pay infringement

[89,230] [89,235]

[89,240] [89,245] [89,250] [89,255] [89,260] [89,265]

14.10 14.11 14.12 14.13 14.14 14.15

penalty …. Withdrawal of infringement notice …. Notice of withdrawal of infringement notices …. Refund of infringement penalty …. Effect of payment of infringement penalty …. Payment of infringement penalty — cheques …. Evidentiary certificates ….

[89,270] [89,275] [89,280] [89,285] [89,290] [89,295] [89,300]

PART 15 — REGISTRATION OF REGISTERED TRUSTEES [Repealed] PART 15A — PROVISIONS RELATING TO THE BANKRUPTCY CHARGES ACTS 15A.01 Interpretation …. [89,680] 15A.02 Mode of payment …. [89,685] 15A.03 Overpayments to be refunded or offset …. [89,690] 15A.04 Information to accompany payment of interest charge …. [89,695] 15A.05 Information to accompany payment of realisations charge …. [89,700] 15A.06 Information to accompany payment under regulation 16.14 [Repealed] …. [89,705] 15A.07 Lodgment of request for remission …. [89,710] PART 16 — MISCELLANEOUS DIVISION 1 — PROVISIONS CONCERNING DOCUMENTS (INCLUDING INVENTORIES) 16.01 Service of documents …. [89,760] 16.02 Documents for the Inspector-General, the

16.03

Official Receiver or the Official Trustee …. Inventory by trustee taking possession of, or attaching, property ….

[89,765] [89,770] [page 801]

16.03A

16.06 16.07 16.08 16.09 16.11 16.12

Document filed by Inspector-General or Official Receiver — fee not payable ….

[89,775]

DIVISION 2 — MATTERS RELEVANT TO FEES Payment of fees …. [89,830] Official Trustee’s entitlement to interim remuneration …. [89,835] Reimbursement of Official Trustee for expenses …. [89,840] Fees — notes and transcript of evidence …. [89,845] Waiver or remission of fees by InspectorGeneral …. [89,880A] Review by AAT of decision of InspectorGeneral …. [89,880B] Subdivision 2.1 — Fees payable to the Official Receiver [Repealed] Subdivision 2.2 — Fees payable to the Official Trustee [Repealed] Subdivision 2.3 — Other fees [Repealed] Subdivision 2.4 — Waiver and remission [Repealed]

16.13

DIVISION 3 — TRANSITIONAL Application of Same-Sex Relationships (Equal Treatment in Commonwealth Laws — General Law Reform) Act 2008 …. SCHEDULE 1 — FORMS …. SCHEDULE 2 — MODIFICATIONS UNDER SECTION 76A OF THE ACT — MEETINGS OF CREDITORS UNDER DIVISION 6 OF PART IV OF THE ACT …. SCHEDULE 3 — PARAGRAPH 109(1)(a) OF THE ACT — ORDER OF PAYMENT OF FIRST PRIORITY DEBTS …. SCHEDULE 4 — MODIFICATIONS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986 …. SCHEDULE 4A — PERFORMANCE STANDARDS FOR TRUSTEES (INCLUDING CONTROLLING TRUSTEES) …. SCHEDULE 5 — MODIFICATIONS UNDER SECTION 185A OF THE ACT — MEETINGS TO CONSIDER PROPOSALS RELATING TO DEBT AGREEMENTS [Repealed] ….

[89,880C] [90,040]

[90,045]

[90,095]

[90,145]

[90,150]

[90,195] [page 802]

SCHEDULE 6 — MODIFICATIONS IN RELATION TO PART X OF THE ACT …. SCHEDULE 7 — MODIFICATIONS

[90,245]

UNDER PART XI OF THE ACT — ADMINISTRATION OF ESTATES OF DECEASED PERSONS …. SCHEDULE 8 — INFORMATION ON THE NATIONAL PERSONAL INSOLVENCY INDEX …. SCHEDULE 9 — OFFICIAL RECEIVER’S FEES [Repealed] …. SCHEDULE 10 — OFFICIAL TRUSTEE’S FEES [Repealed] ….

[90,295]

[90,345] [90,395] [90,445]

[page 803]

Bankruptcy Regulations 1996 TABLE OF AMENDMENTS The Bankruptcy Regulations 1996 commenced on 16 December 1996. Since that date the Regulations have been amended by: Amending Legislation SR 278 of 1996 SR 76 of 1997

Date of Gazettal/Registration 12 December 1996 14 April 1997

SR 325 of 1997 SR 140 of 2000 SR 220 of 2000 SR 262 of 2001 SR 255 of 2002 SR 76 of 2003 SR 256 of 2004 SLI 218 of 2005 SLI 4 of 2006 SLI 50 of 2006 SLI 137 of 2006 SLI 91 of 2007 SLI 138 of 2007

1 December 1997 28 June 2000 17 August 2000 5 October 2001 6 November 2002 2 May 2003 26 August 2004 7 October 2005 16 February 2006 17 March 2006 23 June 2006 26 April 2007 13 June 2007

Date of Commencement 16 December 1996 regs 18.1, 29, 30: 16 December 1996; remainder: 14 April 1997 1 December 1997 1 July 2000 1 July 2000 5 October 2001 6 November 2002 5 May 2003 1 December 2004 8 October 2005 17 February 2006 27 March 2006 1 July 2006 27 April 2007 regs 1-4 and Sch 1: 14

SLI 195 of 2010 SLI 287 of 2010 SLI 51 of 2013 SLI 36 of 2014

9 July 2010 24 November 2010 11 April 2013 26 March 2014

June 2007; remainder: July 2007 1 August 2010 1 December 2010 11 April 2013 1 April 2014

[page 805]

PART 1 — PRELIMINARY

[86,005] Name of Regulations 1.01 These Regulations may be cited as the Bankruptcy Regulations 1996. [reg 1.01 am SR 140 of 2000 reg 3 and Sch 1]

[86,010] Commencement 1.02 These Regulations commence on 16 December 1996. Note: This date is the date of commencement of Schedules 1 and 2 to the Bankruptcy Legislation Amendment Act 1996.

[86,015] Interpretation 1.03 (1) In these Regulations, unless the contrary intention appears: 1985 Rural Adjustment Grant Scheme means a scheme established and operated by a State or the Northern Territory in accordance with: (a) the agreement between the Commonwealth, the States and the Northern Territory the execution of which, on behalf of the Commonwealth, was approved by the States and Northern Territory Grants (Rural Adjustment) Act 1985; or (b) that agreement as subsequently amended. [def insrt SLI 91 of 2007 reg 3 and Sch 1[1], opn 27 Apr 2007]

1988 Rural Adjustment Grant Scheme means a scheme established and operated by a State or the Northern Territory in accordance with: (a) an agreement between the Commonwealth and that State or Territory whose execution, on behalf of the Commonwealth, was approved by the States Grants (Rural Adjustment) Act 1988; or (b) that agreement as subsequently amended. [def insrt SLI 91 of 2007 reg 3 and Sch 1[1], opn 27 Apr 2007]

2006 Fees Determination

[def rep SLI 195 of 2010 reg 3 and Sch 1[1], opn 1 Aug 2010]

Act means the Bankruptcy Act 1966; commencement date means 16 December 1996; contribution assessment period has the meaning given by section 139K of the Act; CPI rate, in relation to a financial year, means the annual average of the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of the quarters in the year; Criminal Code means the Criminal Code set out in the Schedule to the Criminal Code Act 1995, being that Code as amended from time to time; DEP scheme means the scheme mentioned in section 52C of the Farm Household Support Act 1992. [def insrt SLI 91 of 2007 reg 3 and Sch 1[2], opn 27 Apr 2007]

farm help re-establishment grant scheme means the scheme mentioned in section 52A of the Farm Household Support Act 1992. [def insrt SLI 91 of 2007 reg 3 and Sch 1[2], opn 27 Apr 2007]

[page 806] FC (Bankruptcy) Rules means the Federal Court (Bankruptcy) Rules 2005. [def insrt SLI 4 of 2006 reg 3 and Sch 1[1], opn 17 Feb 2006]

FCC (Bankruptcy) Rules means the Federal Circuit Court (Bankruptcy) Rules 2006. [def insrt SLI 51 of 2013 s 4 and Sch 1 item 8, opn 11 Apr 2013]

Fees and Remuneration Determination means each determination made under subsection 316(1) of the Act, as in force from time to time. [def insrt SLI 195 of 2010 reg 3 and Sch 1[2], opn 1 Aug 2010]

FMC (Bankruptcy) Rules [def rep SLI 51 of 2013 s 4 and Sch 1 item 9, opn 11 Apr 2013]

registered liquidator has the meaning given by the Corporations Law;

Rural Adjustment Grant Scheme means a scheme established and operated by a State or the Northern Territory in accordance with: (a) the agreement between the Commonwealth and the States the execution of which, on behalf of the Commonwealth, was approved by the States Grants (Rural Adjustment) Act 1976; or (b) that agreement as subsequently amended, including that agreement as amended by: (i) the agreement between the Commonwealth, the States and the Northern Territory the execution of which, on behalf of the Commonwealth, was approved by the States and Northern Territory Grants (Rural Adjustment) Act 1979; or (ii) that agreement as subsequently amended. [def insrt SLI 91 of 2007 reg 3 and Sch 1[3], opn 27 Apr 2007]

Rural Adjustment Scheme has the meaning given by section 4 of the Rural Adjustment Act 1992. [def insrt SLI 91 of 2007 reg 3 and Sch 1[3], opn 27 Apr 2007]

Rural Reconstruction Grant Scheme means a scheme established and operated by a State in accordance with: (a) the agreement between the Commonwealth and the States the execution of which, on behalf of the Commonwealth, was approved by the States Grants (Rural Adjustment) Act 1971; or (b) that agreement as subsequently amended. [def insrt SLI 91 of 2007 reg 3 and Sch 1[3], opn 27 Apr 2007]

rural support scheme has the meaning given by subsection 5(1) of the Act. [def insrt SLI 91 of 2007 reg 3 and Sch 1[3], opn 27 Apr 2007]

Sugar Industry Reform Program means the scheme known as the Sugar Industry Reform Program 2004 made under the Sugar Industry Reform Program Guidelines as in force on 29 April 2004, administered by the Department of Agriculture, Fisheries and Forestry. [def insrt SLI 91 of 2007 reg 3 and Sch 1[3], opn 27 Apr 2007]

Tobacco Grower Adjustment Assistance Package means the scheme

known as the Tobacco Grower Adjustment Assistance Package 2006 made under the Tobacco Grower Adjustment Assistance Package Guidelines as in force on 2 March 2007, administered by the Department of Agriculture, Fisheries and Forestry. [def insrt SLI 91 of 2007 reg 3 and Sch 1[3], opn 27 Apr 2007]

taxing officer has the same meaning as in section 167 of the Act; [page 807] the court, in relation to a judgment or order, means the court by which the judgment was given or the order was made; the Index means the National Personal Insolvency Index established by subregulation 13.02(1); working day, in or in relation to a particular place, means a day that is not: (a) a public holiday or a bank holiday in that place; or (b) a Saturday or a Sunday. (2) A reference in these Regulations to a form of a specified number is a reference to the form of that number in Schedule 1.

[86,020] Application of Criminal Code 1.04 Chapter 2 of the Criminal Code applies to offences against these Regulations. Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. [reg 1.04 insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

PART 2 — ADMINISTRATION

[86,165] Section 20J of the Act — prescribed rate of interest on moneys in Common Fund 2.01 For the purposes of section 20J of the Act, the prescribed rate of interest is 7 percent per year. Note: This rate is prescribed under subsections 20J(2) and (4) of the Act.

PART 3 — COURTS

[86,315] Paragraph 29(5)(b) of the Act — prescribed countries 3.01 For the purposes of subsection 29(5) of the Act, each of the countries specified in the following table is prescribed:

Jersey Malaysia Papua New Guinea

TABLE Singapore Switzerland United States of America

PART 4 — PROCEEDINGS IN CONNEXION WITH BANKRUPTCY DIVISION 1 — BANKRUPTCY NOTICES

[86,465] Application for bankruptcy notice 4.01 (1) Subject to subregulation (2), to apply for the issue of a bankruptcy notice, a person must lodge with the Official Receiver: (a) an application in the approved form; and (b) 1 of the following documents in relation to the final judgment or final order specified by the person on the approved form: (i) a copy of the sealed or certified judgment or order; (ii) a certificate of the judgment or order sealed by the court or

signed by an officer of the court; [page 808] (iii) a copy of the entry of the judgment or order certified as a true copy of that entry and sealed by the court or signed by an officer of the court. (2) If the final judgment or final order specified by the person on the approved form is an award mentioned in paragraph 40(3)(a) of the Act, the person must lodge with the Official Receiver: (a) an application in the approved form; and (b) a copy of the award certified as a true copy by the arbitrator who made the award or, failing the arbitrator, by an officer of the Court after having compared the copy with the original award; and (c) a sealed or certified copy of the order giving leave to enforce the award. Note 1: For bankruptcy notices, see regulation 4.02 and Form 1. Note 2: A fee is payable to the Official Registrar for an application under this regulation — see Fees and Remuneration Determination. [reg 4.01 subst SLI 195 of 2010 reg 3 and Sch 1[3], opn 1 Aug 2010]

[86,470] Form of bankruptcy notices 4.02 (1) For the purposes of subsection 41(2) of the Act, the form of bankruptcy notice set out in Form 1 is prescribed. (2) A bankruptcy notice must follow Form 1 in respect of its format (for example, bold or italic typeface, underlining and notes). (3) Subregulation (2) is not to be taken as expressing an intention contrary to section 25C of the Acts Interpretation Act 1901. Note: Under section 25C of the Acts Interpretation Act 1901, where an Act prescribes a form, then, unless the contrary intention appears, strict compliance with the form is not required and substantial compliance is sufficient; see also paragraph 46(1)(a) of that Act for the application of that Act to legislative instruments other than Acts. See [80,915.30] for the principle in interpreting the section.

[86,472] Service of bankruptcy notices 4.02A A bankruptcy notice must be served within:

(a) the period of 6 months commencing on the date of issue of the bankruptcy notice; or (b) any further period that the Official Receiver allows (whether within or outside that period of 6 months). Note 1: If paragraph (b) applies to a bankruptcy notice, a fee is payable under the Fees and Remuneration Determination. Note 2: A bankruptcy notice may be served by any of the methods mentioned in regulation 16.01. [reg 4.02A subst SLI 4 of 2006 reg 3 and Sch 1[2], opn 17 Feb 2006; am SLI 137 of 2006 reg 3 and Sch 1[2], opn 1 July 2006; SLI 195 of 2010 reg 3 and Sch 1[4], opn 1 Aug 2010] REGULATION 4.02A GENERALLY [86,472.5] Service on Sunday Service on a Sunday is possible: see [89,760.5]. [86,472.10] Registry closed Time for service of a bankruptcy notice may be extended and the fact the registry may be closed does not prevent such an operation. See [80,915.185].

____________________

[86,475] Inspection of bankruptcy notices 4.03 (1) Subject to subregulation (2), the only persons who may inspect a bankruptcy notice lodged with the Official Receiver are: (a) a person specified in the notice; and [page 809] (b) a party to a proceeding to which the notice relates; and (c) a solicitor acting for a person mentioned in paragraph (a) or (b). (2) If a creditor’s petition is presented that is founded on an act of bankruptcy consisting of failure to comply with a bankruptcy notice, that notice (as lodged with the Official Receiver) is open to public inspection.

[86,480] Judgment or order in foreign currency 4.04 (1) This regulation applies to a bankruptcy notice if the judgment or order lodged under subregulation 4.01(1) in relation to the notice is expressed in an amount of foreign currency (whether or not the judgment or order is

also expressed in an amount of Australian currency). (2) A bankruptcy notice to which this regulation applies must: (a) contain a statement to the effect that payment of the amount of foreign currency expressed in the judgment or order may be paid in that foreign currency or by means of a specified amount of Australian currency that is stated to be equivalent to the amount of foreign currency; and (b) set out: (i) the applicable rate of exchange, being the rate worked out in accordance with subregulation (3); and (ii) the conversion calculation; and (iii) a statement that the conversion of the amount of foreign currency into Australian currency has been made in accordance with this regulation. (3) For paragraph (2)(b), the conversion of an amount of foreign currency into an equivalent amount of Australian currency must be done in accordance with the telegraphic rate of exchange prevailing on the second day before the day when the application to which the conversion applies is lodged under subregulation 4.01(1). [subreg (3) subst SLI 195 of 2010 reg 3 and Sch 1[5], opn 1 Aug 2010]

DIVISION 2 — PETITIONS

[86,530] Copy of petition to be given to Official Receiver 4.05 (1) A creditor who presents a petition under Division 2 of Part IV of the Act must, within 2 working days after the petition is endorsed by the Court, give an endorsed copy of the petition to the Official Receiver. [subreg (1) subst SLI 195 of 2010 reg 3 and Sch 1[6], opn 1 Aug 2010]

(2) [subreg (2) rep SLI 287 of 2010 reg 3 and Sch 1[1], opn 1 Dec 2010] (3) A creditor who presents a petition under Division 2 of Part IV of the Act must give a copy of any order, endorsed by the Court, dismissing, staying or extending the petition, or adjourning the hearing of the petition, to the Official Receiver within 2 working days after the Court has endorsed the

order. [subreg (3) insrt SLI 195 of 2010 reg 3 and Sch 1[7], opn 1 Aug 2010]

[86,535] Control of debtor’s property before sequestration 4.06 (1) Where the Court makes a direction or other order under subsection 50(1) of the Act, the creditor who applied for the direction or other order must, within 7 days, serve the following documents in accordance with subregulation (2): (a) a copy of the application; (b) a copy of any affidavit filed in support of the application; (c) a certified copy of the direction or other order. [page 810] (2) The documents must be served: (a) on the trustee who the Court has directed to take control of the debtor’s property; and (b) except where that person is the Official Trustee — on the Official Receiver.

[86,540] Expenses of trustee before sequestration 4.07 (1) Where: (a) the Court makes a direction or other order under subsection 50(1) of the Act; and (b) the amount deposited, in accordance with the direction or other order of the Court, with the Official Trustee or a registered trustee is insufficient to meet the fees and expenses incurred by the Official Trustee or registered trustee: (i) as a result of the direction or other order; or (ii) in carrying out an examination of a person as a result of the issue of a summons under subsection 50(2) of the Act;

the Official Trustee or registered trustee may: (c) request the creditor who made the application under subsection 50(1) of the Act; or (d) apply to the Court for an order directing that creditor; to deposit with the Official Trustee or the registered trustee a specified additional sum. (2) Where the Court, under section 50 of the Act, directs the Official Trustee or a registered trustee to take control of the property of a debtor, and subsequently any of the following events occurs: (a) the debtor enters into a personal insolvency agreement, or the debtor’s estate is administered under Part XI of the Act, and the Court authorises the Official Trustee or the registered trustee to transfer the property to some other person; (b) a sequestration order is made against the debtor; (c) the creditor’s petition against the debtor is dismissed; (d) a debtor’s petition relating to the debtor is accepted by the Official Receiver; (e) a proposal by the debtor relating to a debt agreement is accepted under section 185B of the Act; the creditor is entitled to a refund of the amount deposited by him or her in accordance with the direction or other order of the Court to meet the fees and expenses of the Official Trustee or the registered trustee incurred: (f) as a result of the direction; or (g) in carrying out an examination of a person as the result of the issue of a summons; less the amount of any fees or expenses so incurred. [subreg (2) am SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

[86,545] Application for damages where petition dismissed 4.08 Where: (a) the Court has made a direction or other order under subsection 50(1) of the Act; and

the creditor’s petition against the debtor is subsequently dismissed; (b) the debtor may, within 21 days after the day on which the petition is dismissed, apply to the Court for an order for: (c) the assessment of the amount of any damage resulting from the control of the property of the debtor by the Official Trustee or a registered trustee in accordance with the order; and (d) the payment by the creditor to the debtor of an amount so assessed. [page 811] REGULATION 4.08 GENERALLY [86,545.5] Requirements for the use of the regulation Kyriackou v Official Trustee in Bankruptcy [2005] FCA 921; BC200504702 was a case in which an applicant, having had a sequestration order set aside but claiming that in the course of the bankruptcy the property had been sold at a loss, then sought an application under reg 4.08(b). North J held that the requirement under reg 4.08(a) that the court first make a direction under s 50(1) conditioned the use of the regulation. Because no such direction had been given the application was refused. See [81,005.12].

____________________

[86,550] Subsection 50(5) of the Act — prescribed modifications of applied provisions 4.09 For the purposes of subsection 50(5) of the Act, section 81 of the Act is modified as follows: (a) by omitting from subsection (2) “An” and substituting “Subject to subsection (2A), an”; (b) by inserting after subsection (2) the following subsection: “(2A) The Court or a magistrate may direct that an examination, or any part of an examination, under this section shall be held in private.”; (c) by omitting from subsection (9) “is the trustee” and substituting “has been directed to take control of the property of the debtor”; (d) by omitting subsection (10A); (e) by omitting subsection (14) and substituting the following subsections: “(14) Subject to subsection (14A), the applicant for an examination under this section is to pay the costs incurred in connection with the examination. “(14A) The Court or a magistrate may order that all or some of the costs mentioned in subsection (14) are to be paid by the debtor.”.

[86,555] Acceptance of debtor’s declaration 4.10 Where, under paragraph 54C(a) of the Act, the Official Receiver accepts and signs a declaration, the Official Receiver must give a copy of the signed declaration to the debtor.

[86,557] Fee for presentation of debtor’s petition 4.10A A fee is payable in relation to the presentation of a debtor’s petition. Note: For the amount of the fee, see the Fees and Remuneration Determination. [s 4.10A insrt SLI 36 of 2014 s 4 and Sch 1 item 1, opn 1 Apr 2014]

[86,560] Prescribed information to be supplied by Official Receiver to debtor 4.11 (1) For the purposes of subsections 54D(1), 55(3A), 56B(5) and

57(3A) of the Act, the following information is prescribed: (a) information about alternatives to bankruptcy; (b) information about the consequences of bankruptcy; (c) information about sources of financial advice and guidance to persons facing or contemplating bankruptcy; (d) information about a debtor’s right to choose whether the bankruptcy is administered by a registered trustee or the Official Trustee; [page 812] (e) a statement that it is an act of bankruptcy for a debtor to present to the Official Receiver, under section 54A of the Act, a declaration of intention to present a debtor’s petition. [subreg (1) am SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004; SLI 138 of 2007 reg 3 and Sch 2[1]– [2], opn 1 July 2007]

(2) The information must be factual and objective. (3) The Official Receiver must not accept a declaration of intention to present a debtor’s petition under section 54A of the Act or a debtor’s petition under section 55, 56B or 57 of the Act unless the debtor has given to the Official Receiver a signed acknowledgement (which may be included in or appended to the petition) that the debtor has received and read the prescribed information. [subreg (3) subst SLI 195 of 2010 reg 3 and Sch 1[8], opn 1 Aug 2010]

(4) If the debtor presents a petition without having given the acknowledgment, the Official Receiver must: (a) if the debtor presents the petition in person — give the prescribed information to the debtor; or (b) if the debtor presents the petition by post — post the prescribed information to the debtor. (5) Subregulation (6) applies if a person (the intending petitioner) intends to present a petition under Division 2 of Part IV of the Act and the intending petitioner is: (a) unable to read the relevant material, because he or she is:

(i) blind, partially sighted, illiterate or partially literate; or (ii) insufficiently familiar with the English language; or (b) unable to sign the petition or the acknowledgment, because of a physical incapacity. [subreg (5) subst SLI 195 of 2010 reg 3 and Sch 1[9], opn 1 Aug 2010]

(6) The petition and the acknowledgement may be signed by another person, who must sign a statement: (a) if subparagraph (5)(a)(i) applies — that he or she has read the relevant material to the intending petitioner; or (b) if subparagraph (5)(a)(ii) applies — that he or she has interpreted the relevant material to the intending petitioner in a language with which both persons are familiar; or (c) if paragraph (5)(b) applies — that he or she believes that the intending petitioner has read and understood the relevant material. [subreg (6) insrt SLI 195 of 2010 reg 3 and Sch 1[9], opn 1 Aug 2010]

(7) In this regulation: relevant material means the petition, the prescribed information and the acknowledgment. [subreg (7) insrt SLI 195 of 2010 reg 3 and Sch 1[9], opn 1 Aug 2010]

[86,565] Debtor’s petition — filing of trustee’s consent 4.12 Where: (a) a debtor presents, or 2 or more debtors present, a petition to the Official Receiver under section 55, 56B or 57 of the Act; and (b) there is in force under section 156A of the Act the consent of a registered trustee to act as the trustee of: (i) the estate of the debtor; or [page 813] (ii) in the case of 2 or more debtors — the separate estates, the joint estates, or the joint and separate estates, of the debtors or

any of them; the petition to the Official Receiver must have with it the original, or a clearly legible photocopy, of the instrument of consent.

[86,570] Notice to partners of referral to Court of petition by other partners against the partnership 4.13 (1) Notice by the Official Receiver under subsection 56C(2) of the Act must: (a) be in writing; and (b) state that the petition has been referred to the Court specified in the notice; and (c) state the date, time and place of hearing of the petition. (2) The Official Receiver must give the notice: (a) at least 7 days before that date; and (b) in accordance with regulation 16.01; to each member to whom, under that subsection, it is required to be given.

DIVISION 3 — MISCELLANEOUS

[86,620] Notification by trustee to creditors 4.14 (1) The trustee of a person who becomes bankrupt must, within 28 days after the day on which the trustee receives the bankrupt’s statement of affairs, give to each creditor of the bankrupt: (a) a notice stating the fact and date of the bankruptcy; and (b) a summary of the statement of affairs of the bankrupt. (2) If the trustee does not receive the statement of affairs within 60 days after the date of bankruptcy, he or she must give notice in writing to each creditor of the bankrupt of whom the trustee is aware: (a) stating that the trustee has not received the statement of affairs; and (b) setting out what the trustee knows of the bankrupt’s affairs.

[86,625] Exercise of proxy by trustee’s

representative at meeting 4.15 A person appointed under subsection 63B(1) of the Act to represent a trustee at a meeting may exercise at the meeting any proxy exercisable by the trustee at the meeting.

[86,630] Lodgment of proxies by fax — section 64M of the Act 4.16 For the purposes of section 64M of the Act: (a) an instrument appointing a proxy may be lodged with the trustee by facsimile transmission; and (b) an instrument so lodged may be circulated by the trustee under subsection 64M(2) of the Act.

[86,635] Inspection and copying of composition or scheme of arrangement 4.17 Where a proposal for a composition or scheme of arrangement in relation to a bankrupt has been accepted under subsection 73(4) of the Act the person may, personally or by an agent, inspect and copy the composition or scheme of arrangement. Note: Except in the case of a person who states in writing that he or she is a person who is a creditor of the bankrupt, a fee is payable under the Fees and Remuneration Determination. [reg 4.17 subst SR 76 of 1997 reg 7; am SLI 137 of 2066 reg 3 and Sch 1[3], opn 1 July 2006; SLI 195 of 2010 reg 3 and Sch 1[10], opn 1 Aug 2010]

[page 814]

[86,640] Proposal and report for a composition or arrangement 4.18 Where a trustee is required, under subsection 73(2) of the Act, to send a copy of a proposal and a report to creditors before a meeting, the trustee must send those documents to each creditor so that they arrive, or should in due course of post arrive, at least 7 days before the meeting.

[86,645] Meetings of creditors — modification of Division 5 of Part IV of the Act 4.19 For the purposes of section 76A of the Act, Division 5 of Part IV of the Act is modified in accordance with Schedule 2 in relation to meetings of creditors under Division 6 of that Part.

PART 5 — CONTROL OVER PERSON AND PROPERTY OF DEBTORS AND BANKRUPTS

[86,795] Where debtor or bankrupt is arrested 5.01 Where a person is arrested under section 78 of the Act, the arresting officer must immediately notify a Registrar of the arrest.

[86,800] Fee for making request for consent to leave Australia 5.02 (1) This regulation applies in relation to a request by a bankrupt to the Official Trustee for the Official Trustee’s consent, under paragraph 272(1)(c) of the Act, to the bankrupt leaving Australia. (2) A fee is payable to the Official Trustee in relation to the making of the request. Note: For the amount of the fee, see the Fees and Remuneration Determination. [s 5.02 insrt SLI 36 of 2014 s 4 and Sch 1 item 2, opn 1 Apr 2014]

PART 6 — ADMINISTRATION OF PROPERTY DIVISION 1 — ORDER OF PAYMENT OF DEBTS

[86,945] Priority payments under section 109 of the Act — prescribed matters 6.01 (1) Payment of proceeds of the property of a bankrupt under paragraph 109(1)(a) of the Act is to be in the order set out in Schedule 3. [subreg (1) am SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

(2) For the purposes of item 5 of Schedule 3: (a) a reference to the petitioning creditor is taken to include a reference to a petitioner whose petition has not been proceeded with because of the acceptance of the debtor’s petition; and (b) paragraph (a) applies irrespective of whether the debtor’s petition was referred to the Court under subsection 55(3B) of the Act or, if the petition was so referred, the outcome of the reference.

[86,950] Maximum amount payable to employee 6.02 (1) For the purposes of paragraph 109(1)(e) of the Act, the maximum amount due to or in respect of an employee of a bankrupt is: (a) in the case of a bankruptcy occurring or continuing in the period commencing on the commencement date and ending at the end of 30 June 1997 — $3100; or [page 815] (b) in the case of a bankruptcy occurring in a financial year commencing on 1 July 1997 or on 1 July of a subsequent year — the amount worked out in accordance with subregulation (2). [subreg (1) am SR 76 of 1997 reg 8]

(2) For the purposes of subparagraph (1)(b), the applicable amount is: (a) in the case of the financial year commencing on 1 July 1997 — $3100 increased in accordance with the CPI rate for the financial year that commenced on 1 July 1996 and rounded down to the nearest multiple of $50; and (b) in the case of a subsequent financial year — the amount worked out

in accordance with this subregulation for the immediately preceding financial year, increased in accordance with the CPI rate for that financial year and rounded down to the nearest multiple of $50. Example: In the case of a bankruptcy occurring in the financial year 1997–1998, the applicable CPI rate is the rate for 1996–1997. Note: For the meaning of financial year, see para 22(1)(e) of the Acts Interpretation Act 1901.

DIVISION 2 — PROPERTY AVAILABLE FOR PAYMENT OF DEBTS

[87,000] Household property 6.03 (1) For the purposes of subparagraph 116(2)(b)(i) of the Act, household property of the bankrupt specified in this regulation is household property to which subsection 116(1) of the Act (which deals with property divisible among the creditors) does not extend. (2) Subsection 116(1) of the Act does not extend to household property (including recreational and sports equipment) that is reasonably necessary for the domestic use of the bankrupt’s household, having regard to current social standards. (3) In particular (but without limiting by implication the generality of subregulation (2)), subsection 116(1) of the Act does not extend to property of the following kinds: (a) in the case of kitchen equipment, cutlery, crockery, foodstuffs, heating equipment, cooling equipment, telephone equipment, fire detectors and extinguishers, anti-burglar devices, bedding, linen, towels and other household effects — that property to the extent that it is reasonably appropriate for the household, having regard to the criteria mentioned in subregulation (4); (b) sufficient household furniture; (c) sufficient beds for the members of the household; and (d) educational, sporting or recreational items (including books) that are wholly or mainly for the use of children or students in the household;

(e) (f) (g) (h)

1 television set; 1 set of stereo equipment; 1 radio; either: (i) 1 washing machine and 1 clothes drier; or (ii) 1 combined washing machine and clothes drier; (i) either: (i) 1 refrigerator and 1 freezer; or (ii) 1 combination refrigerator/freezer; (j) 1 generator, if relied on to supply electrical power to the household; (k) 1 telephone appliance; (l) 1 video recorder. [subreg (3) am SR 278 of 1996 reg 3; SR 76 of 1997 reg 9]

[page 816] (4) For the purposes of deciding whether property, other than property of a kind mentioned in paragraphs (3)(b) to (1) (both inclusive), is property to which subregulation (2) applies, regard must be had to the following criteria: (a) the number and ages of members of the bankrupt’s household; (b) any special health or medical needs of any of those members; (c) any special climatic or other factors (including geographical isolation) of the place where the household residence is located; (d) whether the property is reasonably necessary for the functioning or servicing of the household as a viable and properly run household; (e) whether the costs of seizure, storage and sale of the property would be likely to exceed the sale price of the property; (f) if paragraph (e) does not apply — whether for any other reason (for example, costs of transport) the sale of the property would be likely to be uneconomical. [subreg (4) am SR 76 of 1997 reg 9]

(5) The preceding provisions of this regulation do not prevent subsection 116(1) of the Act from extending to antique items.

(6) For the purposes of subregulation (5), an item is taken to be antique if, and only if, a substantial part of its market value is attributable to its age or historical significance.

[87,000A] Personal property 6.03A (1) For subparagraph 116(2)(ba)(ii) of the Act, sporting, cultural, military or academic awards made to the bankrupt in recognition of his or her performance are personal property to which subsection 116(1) of the Act does not extend. (2) Subregulation (1) does not apply to a monetary award. [reg 6.03A insrt SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[87,005] Property divisible among creditors — prescribed amounts 6.03B (1) For the purposes of subparagraph 116(2)(c)(i) of the Act, the maximum total value of a bankrupt’s property that is for use by the bankrupt in earning income by personal exertion is: (a) in the case of a bankruptcy occurring or continuing in the period commencing on the commencement date and ending at the end of 30 June 1997 — $2600; or (b) in the case of a bankruptcy occurring in a financial year commencing on 1 July 1997 or on 1 July of a subsequent year — the amount worked out in accordance with subregulation (2). [subreg (1) am SR 76 of 1997 reg 10]

(2) For the purposes of subparagraph (1)(b), the applicable amount is: (a) in the case of the financial year commencing on 1 July 1997 — $2600 increased in accordance with the CPI rate for the financial year that commenced on 1 July 1996 and rounded down to the nearest multiple of $50; and (b) in the case of a subsequent financial year — the amount worked out in accordance with this subregulation for the immediately preceding financial year, increased in accordance with the CPI rate for that financial year and rounded down to the nearest multiple of $50.

(3) For the purposes of paragraph 116(2)(ca) of the Act, the maximum aggregate value of property used by the bankrupt primarily as a means of transport is: (a) in the case of a bankruptcy occurring or continuing in the period commencing on the commencement date and ending at the end of 30 June 1997 — $5000; or [page 817] (b) in the case of a bankruptcy occurring in a financial year commencing on 1 July 1997 or on 1 July of a subsequent year — the amount worked out in accordance with subregulation (4). [subreg (3) am SR 76 of 1997 reg 10]

(4) For the purposes of subparagraph (3)(b), the applicable amount is: (a) in the case of the financial year commencing on 1 July 1997 — $5000 increased in accordance with the CPI rate for the financial year that commenced on 1 July 1996 and rounded down to the nearest multiple of $50; and (b) in the case of a subsequent financial year — the amount worked out in accordance with this subregulation for the immediately preceding financial year, increased in accordance with the CPI rate for that financial year and rounded down to the nearest multiple of $50. [reg 6.04 renum as reg 6.03B SLI 91 of 2007 reg 3 and Sch 1[4], opn 27 Mar 2007]

DIVISION 2A — RURAL SUPPORT SCHEMES [Div 2A insrt SLI 91 of 2007 reg 3 and Sch 1[5], opn 27 Apr 2007]

[87,025] Prescribed rural support schemes (Act s 116) 6.04A For paragraph 116(2)(k) of the Act, the following rural support schemes are prescribed: (a) DEP scheme;

(b) farm help re establishment grant scheme.

[87,030] Prescribed rural support schemes (Act s 116) 6.04B For paragraph 116(2)(l) of the Act, each rural support scheme mentioned in the following table, and the circumstances mentioned for the scheme, are prescribed. Item Rural support scheme Circumstance 1 1985 Rural Adjustment Grant Assistance is required by a person Scheme engaged in the agricultural industry, in the form of a loan for rehabilitation or household support 2 1988 Rural Adjustment Grant Assistance is required by a person Scheme engaged in the agricultural industry, in the form of a grant or loan for rehabilitation or household support 3 Rural Adjustment Grant Assistance is required by a person Scheme engaged in the agricultural industry, in the form of a grant or loan for rehabilitation or household support 4 Rural Adjustment Scheme Assistance is required by a person engaged in the agricultural industry, in the form of a grant or loan for rural adjustment 5 Rural Reconstruction Grant Assistance is required by a person Scheme engaged in the agricultural industry, in the form of a grant or loan for rehabilitation 6 Sugar Industry Reform Assistance is required in the form of Program a grant to enable a person engaged in the sugar industry, as a grower or harvester, to exit all agricultural industries 7 Tobacco Grower Adjustment Assistance is required in the form of

Assistance Package

a grant to enable a person engaged, or previously engaged, in the tobacco industry as a grower to exit all agricultural industries

DIVISION 3 — APPORTIONMENT OF PROPERTY [Repealed] [Div 3 rep SLI 138 of 2007 reg 3 and Sch 2[4], opn 1 July 2007]

[page 818]

DIVISION 4 — UNDERVALUED TRANSACTIONS

[87,120] Transfers exempt from being void against trustee 6.09 The kind of transfer of property to which paragraph 120(2)(d) of the Act applies is one where the costs of recovering the transferred property would, in the trustee’s opinion, be likely to exceed the value to the creditors of the property.

DIVISION 5 — REALISATION OF PROPERTY

[87,170] Disclaimer of onerous property 6.10 (1) A notice of disclaimer under subsection 133(1) or (1A) of the Act must: (a) in every case — adequately identify: (i) the bankrupt to whom the notice relates; and (ii) the property or contract being disclaimed; and (b) in the case of disclaimer, without the leave of the Court, of: (i) a lease — set out facts showing that subsection 133(4) of the Act has been complied with; or (ii) a contract — set out facts showing that the contract is, for the

purposes of subsection 133(5A) of the Act, an unprofitable contract. (2) A trustee who gives a notice of disclaimer under subsection 133(1) or (1A) of the Act must give the notice to each person who, to the trustee’s knowledge: (a) in the case of disclaimer of property — has an interest in the property; or (b) in the case of a contract — is entitled to a benefit of, or subject to a burden or liability under, the contract.

DIVISION 6 — DEFINITION OF INCOME (ACT s 139L) [Div 6 am SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

[87,220] Interpretation 6.11 In this Division: FBTA Act means the Fringe Benefits Tax Assessment Act 1986 as in force at the beginning of 1 July 1992.

[87,225] Fringe benefits: modification of the FBTA Act 6.12 (1) For the purposes of subparagraph (a)(v) of the definition of income in section 139L of the Act, the FBTA Act is modified in accordance with Schedule 4. (2) For those purposes, the following modifications of the FBTA Act apply: (a) a reference to a year of tax is taken to be a reference to a contribution assessment period; (b) a reference to the taxable value of a benefit is taken to be a reference to the value, for the purposes of the Act, of the benefit; (c) a reference to the declaration date is taken to be a reference to the date occurring 21 days after the end of the contribution assessment period in relation to the bankrupt; (d) a reference to a declaration to be given to the employer is taken to

be a reference to a declaration to be given to the trustee; (e) a reference to a form approved by the Commissioner is taken to be a reference to a form approved by the Inspector-General; (f) subject to paragraph (d), a reference to an employer, or to the employer, is taken to be a reference to any person (other than the bankrupt); [page 819] (g) a reference to an employee, or to the employee, is taken to be a reference to a bankrupt, or to the bankrupt, as the case requires; (h) a reference (however expressed) to: (i) the employment of the employee; or (ii) an associate of the employee; is to be disregarded. (3) In spite of subregulations (1) and (2), the modifications specified or referred to in those subregulations do not apply in relation to the provision of a fringe benefit, within the meaning of the FBTA Act, where the provider of the fringe benefit: (a) was the employer of the bankrupt; and (b) provided the fringe benefit to the bankrupt in respect of his or her employment by the provider; and (c) was not an employer over whom the bankrupt exercised effective control, whether directly or indirectly.

[87,250] Restart scheme payments 6.12A For subparagraph (b)(v) of the definition of income in section 139L of the Act, payments of restart income support, being payments of a kind mentioned in paragraph (a) of the definition of restart scheme payments in subsection 3(2) of the Farm Household Support Act 1992, are not income of a bankrupt. [reg 6.12A am SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

[87,255] Superannuation contributions 6.12B (1) Subject to subregulation (2), for subparagraph (b)(v) of the definition of income in section 139L of the Act, the following contributions and payments made for the purpose of providing superannuation benefits for a bankrupt person are not income of the person: (a) contributions made by, or on behalf of, each employer of the person to the extent that the contributions reduce the employer’s potential liability for the superannuation guarantee charge imposed under section 5 of the Superannuation Guarantee Charge Act 1992; (b) contributions made by, or on behalf of, each employer of the person in accordance with the employer’s obligation to make contributions for the person under: (i) an industrial award or determination made under a law of the Commonwealth, a State or a Territory; or (ii) an industrial agreement registered, made or lodged under a law of the Commonwealth, a State or a Territory; or (iii) a law of the Commonwealth, or of a State or Territory; that exceed the contributions, made by or on behalf of the employer, mentioned in paragraph (a); (c) payments of shortfall components made to, or for the benefit of, the person under sections 65 to 67 of the Superannuation Guarantee (Administration) Act 1992. [subreg (1) am SLI 50 of 2005 reg 3 and Sch 55, opn 27 Mar 2006]

(2) Contributions for a year are taken to be income of a person if: (a) the contributions exceed 9% of the employee’s ordinary time earnings for the year; and [page 820] (b) the employer has an obligation to make the contributions that arise under an individual industrial agreement; and (c) the contributions are not contributions of the kind mentioned in subparagraph (1)(b)(iii).

[subreg (2) subst SLI 195 of 2010 reg 3 and Sch 1[11], opn 1 Aug 2010]

(3) For this regulation: individual industrial agreement means an industrial agreement made solely between the employer and the person, including the following: (a) an AWA, or an ITEA, to which the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 applies; (b) a similar agreement under the law of a State or Territory. [def subst SLI 195 of 2010 reg 3 and Sch 1[12], opn 1 Aug 2010]

ordinary time earnings has the meaning given by section 6 of the Superannuation Guarantee (Administration) Act 1992. shortfall component has the same meaning as it has in Part 8 of the Superannuation Guarantee (Administration) Act 1992. [reg 6.12B insrt SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

[87,260] Family assistance and social security payments 6.12C (1) For subparagraph (b)(v) of the definition of income in section 139L of the Act, the following payments or amounts are not income of a bankrupt: (a) a payment or amount of family tax benefit paid under the family assistance law; (b) an amount that is not income for the purposes of the Social Security Act 1991 because of subsection 8(8) of that Act, except for a payment or amount mentioned in paragraph (a), (h), (ha), (k), (ka), (m), (z), (za) or (zb) of that subsection. (2) For this regulation, family assistance law has the same meaning as in the A New Tax System (Family Assistance) (Administration) Act 1999. [reg 6.12C insrt SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[87,260D] Primary Industry rural support scheme 6.12D For subparagraph (b)(v) of the definition of income in section 139L of the Act, any of the following is not income of a bankrupt: (a) an amount paid to a person under the DEP scheme; (b) an amount paid to a person under the Sugar Industry Reform

Program for the prescribed circumstance mentioned for it in regulation 6.04B; (c) an amount paid to a person under the Tobacco Grower Adjustment Assistance Package for the prescribed circumstance mentioned for it in regulation 6.04B. [reg 6.12D insrt SLI 91 of 2007 reg 3 and Sch 1[6], opn 27 Apr 2007]

DIVISION 7 — CONTRIBUTIONS BY BANKRUPT

[87,275] Interpretation 6.13 In this Division: contributing bankrupt means a bankrupt who is liable to make contributions; contribution means a contribution payable or paid under section 139P or 139Q of the Act. [page 821]

[87,280] Contributions by bankrupt — modes of payment 6.14 (1) A contributing bankrupt may pay a contribution in any of the following ways: (a) in cash to the trustee at the trustee’s office during business hours; (b) by bank draft, cheque, money order or postal order payable to the trustee and delivered or posted to that office; (c) by deposit of the amount of the contribution in, or transfer of that amount to, the trustee’s bank account; (d) any other method authorised in writing by the trustee. (2) In the case of payment by cheque, payment is taken to occur when the cheque is cleared and the amount of the payment is credited to the account into which the cheque is deposited. (3) The trustee may, on reasonable notice in writing to the bankrupt, vary

or cancel an authorisation under paragraph (1)(d). (4) If the trustee incurs a delivery or postal charge (including a surcharge) or bank charge in connection with the receipt or processing of payment of a contribution, the trustee may reimburse himself or herself for the amount of the charge from the bankrupt’s estate.

[87,285] Contributions where bankrupt dies 6.15 If a contributing bankrupt dies during a contribution assessment period: (a) no refund is payable in respect of any part of a contribution paid by or on behalf of the bankrupt in respect of that period; and (b) if a contribution in respect of that period remains unpaid, the deceased bankrupt’s estate is liable for the portion of the contribution attributable to the part of the period occurring before the date of death. Note: For proceedings in bankruptcy on the death of the bankrupt, see s 63 of the Act.

[87,285A] Contribution assessment — income of dependant 6.15A (1) For paragraph (c) of the definition of dependant in section 139K of the Act, the amount is $2500. (2) Section 304A of the Act applies to this regulation as if the amount mentioned in subregulation (1) were an amount also mentioned in the definition of indexable amount in subsection 304A(1) of the Act. [reg 6.15A insrt SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[87,290] Reasons for application to Official Receiver to vary contributions 6.16 [reg 6.16 rep SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

[87,295] Certificate of outstanding contribution 6.17 (1) A trustee may give a certificate, signed and dated by the trustee, stating:

(a) that the trustee has made an assessment under subsection 139W(1) or (2) of the Act in relation to a bankrupt; and (b) the amount of the contribution to which the assessment relates that the bankrupt is liable to pay; and (c) that the trustee has given notice setting out particulars of the assessment to the bankrupt under subsection 139W(4) of the Act; and (d) the respective dates of the assessment and the notice. [page 822] (2) In proceedings against the bankrupt for recovery of the amount, or part of the amount, of a contribution, the certificate: (a) is evidence that the bankrupt is liable to pay the amount of contribution stated in the certificate; and (b) may be tendered in evidence without further proof.

[87,300] Discharged bankrupt to give information if contribution unpaid 6.18 (1) If: (a) a person is discharged from bankruptcy; and (b) immediately before being discharged he or she was a contributing bankrupt; and (c) after the discharge he or she remains liable, under section 139R of the Act, in respect of a contribution that is due and unpaid; the person must at once give notice in writing to the trustee in relation to the bankruptcy if any change occurs in the particulars: (d) set out in the person’s statement of affairs in relation to the bankruptcy; or (e) notified by the person under section 80 of the Act. Penalty: 10 penalty units [subreg (1) am SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

(2) An offence against subregulation (1) is an offence of strict liability. Note For strict liability, see section 6.1 of the Criminal Code. [subreg (2) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

DIVISION 8 — NOTICE UNDER SECTION 139ZL OF THE ACT

[87,350] Notice under section 139ZL of the Act not to refer to protected money 6.19 A notice under section 139ZL of the Act must not specify money or property that is protected, under a law of the Commonwealth or a State or Territory, from a process such as assignment, attachment, charging, execution or garnishment.

[87,400] Notice under section 139ZL of the Act (notice of ceasing or commencing employment) 6.20 (1) If the employer of a bankrupt receives a notice under section 139ZL of the Act in relation to the bankrupt and the employment of the bankrupt subsequently ceases, the employer must, within 21 days of the cessation, give notice in writing to the trustee of the bankrupt stating that, on the date specified in the notice, the bankrupt ceased to be employed by the employer. Penalty: 2 penalty units (2) Within 21 days after commencing employment with an employer, the bankrupt must give notice in writing to the trustee stating: (a) the employer’s name and postal address; and (b) the address of the place where the bankrupt is employed; and (c) the amount of the bankrupt’s average gross weekly income from the employment. Penalty: 2 penalty units [subreg (2) am SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

[page 823] (3) An offence against subregulation (1) or (2) is an offence of strict liability. Note For strict liability, see section 6.1 of the Criminal Code. [subreg (3) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

DIVISION 9 — DISTRIBUTION OF PROPERTY

[87,450] Minimum amount of dividend 6.21 For the purposes of subsection 140(9) of the Act, the amount of $25 is prescribed.

[87,500] Manner of declaring final dividend 6.22 A notice under subsection 145(3) of the Act must be given by serving it, in accordance with subregulation 16.01(1), on each person to whom, under the subsection, it must be given.

PART 7 — DISCHARGE AND ANNULMENT

[87,650] Trustee to inform the Official Receiver of return of bankrupt to Australia 7.01 (1) This regulation applies to a registered trustee who is the trustee of the estate of a bankrupt, if: (a) an objection to the discharge of the bankrupt has been made on a ground, or on grounds that include a ground, referred to in paragraph 149D(1)(a) or (h) of the Act (which refer to the bankrupt being out of Australia); and (b) the bankrupt has returned to Australia; and (c) the trustee becomes aware that the bankrupt has returned to Australia. (2) Within 7 days after becoming aware that the bankrupt has returned to Australia, the registered trustee must give notice in writing to the Official Receiver stating: (a) that the bankrupt has returned to Australia; and (b) the date on which: (i) the bankrupt returned; or (ii) if the trustee does not know the date on which the bankrupt returned — the trustee became aware that the bankrupt had returned. Penalty: 1 penalty unit [subreg (2) am SR 76 of 1997 reg 12]

(3) An offence against (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subreg (3) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

[87,653] Grounds of objection — failure to provide complete and accurate information 7.01A For paragraph 149D(1)(d) of the Act, a bankrupt is taken to have failed to comply with a request to provide information if the bankrupt has provided information that is incomplete or inaccurate. [reg 7.01A insrt SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002] REGULATION 7.01A GENERALLY [87,653.5] Failure to provide accurate information The finding of the Federal Court in Wharton v Official Receiver in Bankruptcy (2001) 107 FCR 28; 182 ALR 208; [2001] FCA 96; [page 824] BC200100576 that there was no requirement under s 149D(1)(d) of the Bankruptcy Act for a bankrupt to provide information which was complete or accurate was soon followed by the enactment of reg 7.01A of the Bankruptcy Regulations 1996. It provides for a bankrupt to be taken to have failed to comply with a trustee’s request under s 149D(1)(d) of the Bankruptcy Act if the bankrupt provides information that is incomplete or inaccurate. See also Broadley v Inspector-General in Bankruptcy (2007) 97 ALD 797; [2007] FMCA 1714; BC200708960 and [82,173.10], behind guide card “Bankruptcy Act”. See [82,173.7].

____________________

[87,655] Trustee to inform the Official Receiver of cancellation of objection 7.02 (1) This regulation applies where the Administrative Appeals Tribunal (the AAT), on an application under section 149Q of the Act for review of a decision of a registered trustee to file a notice of objection to the discharge of a bankrupt, cancels or varies the decision. (2) Where this regulation applies, the registered trustee must, by notice in writing, inform the Official Receiver of the decision of the AAT. (3) The registered trustee must give the notice within 7 days of being notified of the decision of the AAT. [subreg (3) am SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

(4) An offence against (3) is an offence of strict liability. Penalty: 1 penalty unit

Note: For strict liability, see section 6.1 of the Criminal Code. [subreg (4) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

PART 8 — TRUSTEES DIVISION 1 — APPLICATION FOR REGISTRATION, OR EXTENSION OF REGISTRATION, AS A TRUSTEE

[87,805] Documents to accompany application for registration 8.01 (1) For the purposes of paragraph 154A(3)(a) of the Act, the following documents must accompany an application to be registered as a trustee: (a) if the applicant relies on a qualification referred to in paragraph 8.02(1)(a): (i) an original statement in accordance with subregulation (2), certified by the appropriate officer of the university, college of advanced education or other tertiary institution; or (ii) a copy of the statement, certified as a copy by a person before whom an affidavit may be sworn under section 262 of the Act; (b) 2 references, signed by the respective referees, who are familiar with relevant work undertaken by the applicant within the 12 months before the application, that contain the particulars specified in subregulation (3). [subreg (1) am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

(2) A statement referred to in subparagraph (1)(a)(i) must set out the relevant qualification of the applicant and state that the qualification represents: (a) a course of study in accountancy of not less than 3 years’ duration; and (b) a course of study in commercial law of not less than 2 years’ duration. [page 825]

(3) For the purposes of paragraph 1(b), each reference must contain the following particulars: (a) the name, address and telephone number of the referee; (b) the occupation of the referee; (c) the period during which, and the circumstances under which, the referee has known the applicant; (d) the referee’s opinion about the following matters: (i) the applicant’s abilities in oral and written communication; (ii) the applicant’s knowledge of the powers, duties and functions of a registered trustee or registered liquidator; (iii) [repealed] (iv) the applicant’s knowledge of business management and his or her ability to successfully conduct business activities; (e) whether, in the referee’s opinion, the applicant has experience in assisting a registered trustee or a registered liquidator within the meaning of the Companies Act 1981 or the Corporations Law in carrying out the functions of the trustee or liquidator and, if so: (i) the nature of the activities that the applicant was required to carry out in acquiring that experience; and (ii) the length of the period of time during which the applicant carried out those activities; and (iii) whether the applicant carried out those activities in a competent manner; (f) the referee’s reasons for supporting the application. [subreg (3) am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[87,810] Qualifications, experience, knowledge and abilities of applicants 8.02 (1) For the purposes of paragraph 155A(2)(a) of the Act, the following qualifications, experience, knowledge and abilities are prescribed in relation to an applicant for registration as a trustee: (a) completion of the academic requirements for the award of a degree, diploma or similar qualification from an Australian university or college of advanced education, or other Australian tertiary

institution of an equivalent standard, being a degree, diploma or similar qualification granted to a person who has completed: (i) a course of study in accountancy of not less than 3 years’ duration; and (ii) a course of study in commercial law of not less than 2 years’ duration; (b) engagement in relevant employment on a full-time basis for a total of not less than 2 years in the preceding 5 years; (c) the ability to perform satisfactorily the duties of a registered trustee immediately after registration. Note: If the committee considering the application considers that the applicant is suitable to be registered as a trustee, it may decide that the applicant should be registered even if it is not satisfied that the applicant has the qualifications, experience, knowledge and abilities prescribed in subregulation 8.02(1); see subsection 155A(3) of the Act. [subreg (1) am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

(2) In this regulation: relevant employment means employment that: (a) involves assisting a liquidator or trustee in the performance of his or her duties as a liquidator or trustee; and [page 826] (b) involves the providing of advice in relation to bankruptcy matters; and (c) provides experience in insolvency administrations outside bankruptcy, including administration of receiverships, the winding up of corporations and any other similar functions.

[87,815] Subsection 155C(2) of the Act — prescribed particulars of applicant for registration as a trustee 8.03 For the purposes of subsection 155C(2) of the Act, the following details are prescribed in relation to an applicant referred to in that subsection: (a) the applicant’s full name, and any alias; (b) the applicant’s business address including, where applicable, the postal address and telephone number; (c) a statement or summary of any conditions applying to the person’s entitlement to practise as a registered trustee; (d) the date on which details in respect of the applicant are entered on the Index. [reg 8.03 am SR 76 of 1997 reg 13]

[87,820] Extension of registration — proof of insurance 8.04 A person who applies under section 155D of the Act must provide proof, of a kind reasonably acceptable to the Inspector-General, that the applicant has insurance of the kind mentioned in paragraph 155A(2)(b) of the Act.

DIVISION 1A — CHANGE IN TRUSTEE’S PARTICULARS

[87,850] Trustee to notify change in particulars 8.04A (1) A trustee must promptly give notice in writing to the InspectorGeneral of any change, in relation to the trustee, of the particulars specified in paragraph 8.03(a), (b) or (c). Penalty: 1 penalty unit [subreg (1) insrt SR 76 of 1997 reg 14; am SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001; SLI 195 of 2010 reg 3 and Sch 1[13], opn 1 Aug 2010]

(2) An offence against subregulation (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code.

[subreg (2) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

DIVISION 2 — REGISTRATION OF TRUSTEES [Div 2 subst SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

Subdivision 1 — Preliminary

[87,875] Definitions 8.05 In this Division, unless the contrary intention appears: application means an application under subsection 154A(1) of the Act. chairperson means the chairperson of a committee. committee means a committee convened under subsection 155(1) of the Act. member, in relation to a committee, includes the chairperson. [page 827]

Subdivision 2 — Constitution and procedure of committees generally

[87,875A] Chairperson of a committee 8.05A The chairperson of a committee is: (a) the Inspector-General; or (b) if the Inspector-General appoints another member of the committee as chairperson — that person.

[87,875B] Trustee chosen by the Insolvency Practitioners Association of Australia 8.05B A registered trustee chosen by the Insolvency Practitioners Association of Australia under paragraph 155(2)(c) of the Act must have practised as a registered trustee for at least 5 years.

[87,875C] Resignation of chairperson 8.05C (1) A chairperson other than the Inspector-General may resign the office of chairperson by notice in writing signed by the chairperson and given to the Inspector-General. (2) A notice of resignation takes effect when the Inspector-General receives it.

[87,875D] Resignation of members 8.05D (1) A member of a committee, other than the Inspector-General, may resign from the committee by notice in writing signed by the member and given to the Inspector-General. (2) A notice of resignation takes effect when the Inspector-General receives it.

[87,875E] Disclosure of interests 8.05E If a member of a committee: (a) is a close relative of the applicant; or (b) has a financial or personal relationship with the applicant; the member must, as soon as practicable after becoming aware of the identity of the applicant, disclose the nature of the relationship to the other members of the committee and to the Inspector-General.

[87,875F] Removal of members from a committee 8.05F (1) The Inspector-General may terminate the appointment of a member of a committee if: (a) the member becomes physically or mentally incapable of performing the duties of a member; or (b) the member becomes a bankrupt; or (c) the member signs an authority under section 188 of the Act that is effective for the purposes of Part X of the Act; or (d) the member becomes a party, as a debtor, to a debt agreement; or (e) the member has been convicted of an offence involving fraud or dishonesty; or

(f)

the member neglects his or her duty as a member. [page 828]

(2) The Inspector-General may terminate the appointment of a member of a committee if: (a) the member: (i) is a close relative of the applicant; or (ii) has a financial or personal relationship with the applicant; and (b) the Inspector-General believes that relationship may affect the impartiality of the member.

[87,875G] Convening of a replacement committee 8.05G (1) This regulation applies if: (a) either of the following events occurs: (i) a member of a committee resigns or dies; (ii) the appointment of a member of a committee is terminated under regulation 8.05F; and (b) at the time of that occurrence, the committee has not made a decision under subsection 155A(1) of the Act. (2) If this regulation applies: (a) the Inspector-General must convene another committee (the new committee) in place of the committee referred to in subregulation (1) (the previous committee); and (b) the new committee must not have regard to any proceedings of the previous committee.

[87,875H] General procedures of a committee 8.05H (1) Subject to the Act and this Division, a committee may determine its procedure. (2) A committee must observe natural justice. (3) A committee is not bound by any rules of evidence but may inform

itself on any matter as it sees fit. (4) A committee must keep a written record of its decisions.

[87,875I] Procedure at committee meetings 8.05I (1) Subject to this regulation, all members of a committee must be present in order to constitute a quorum for a meeting of the committee. (2) At a meeting of a committee a matter is to be decided by a majority of the votes of the members. (3) Any member may participate in a meeting by telephone. (4) A member who participates in a meeting by telephone is taken to be present at the meeting. (5) A committee may keep minutes of proceedings at its meetings.

[87,875J] Resolutions without meeting 8.05J (1) If the majority of the members of a committee sign a document containing a statement that they are in favour of a resolution in the terms set out in the document, the resolution is taken to have been passed at a meeting of the committee: (a) on the day on which the document is signed; or [page 829] (b) if the members sign the document on different days — on the day on which the document is signed by the member who makes up the majority. (2) Two or more separate documents that are identical in all material respects (apart from signatures), each of which is signed by 1 or more members, are taken for the purposes of subregulation (1) to constitute a single document.

Subdivision 3 — Inquiries and interviews

[87,875K] Inquiries by the committee 8.05K (1) A committee considering an application may make inquiries of any person for the purposes of deciding whether the applicant should be registered as a trustee or not. (2) If the committee decides that the applicant should be registered, the committee may make inquiries of any person for the purposes of deciding what conditions, if any, should apply to the applicant’s practice as a registered trustee. (3) Inquiries made must be inquiries: (a) that are reasonable, for the purpose of making an informed decision; or (b) that the Chairperson of the committee believes are appropriate in order for the committee to have sufficient information to make the decision. (4) Before making a decision that is adverse to the applicant, a committee must: (a) inform the applicant of any information or material that the committee relies on, or proposes to rely on, in making the decision; and (b) give the applicant a reasonable opportunity to reply to, or rebut, the information or material.

[87,875L] Notice of interview 8.05L For subsection 155(3) of the Act, the Inspector-General or authorised employee on the committee must, after consultation with the other members of the committee: (a) fix a date, time and place for the interview; and (b) give written notice of that date, time and place to the applicant and the other members of the committee. [reg 8.05L am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[87,875M] Applicant interviews 8.05M (1) A committee must interview the applicant as soon as practicable and, for that purpose:

(a) any member of the committee may participate in the interview by telephone; and (b) the applicant may participate in the interview by telephone. (2) A member or applicant who participates in an interview as provided by paragraph (1)(a) or (b) is taken to be present at the interview. (3) If the applicant fails to attend, or participate by telephone in, the interview and does not, within 7 days, give the committee a reasonable excuse for that failure: (a) the application is taken to have lapsed; and (b) the application fee is not refundable. (4) If an applicant who fails to attend, or participate by telephone in, an interview gives the committee, within 7 days, a reasonable excuse for that failure, the committee must arrange another interview date, time and place. [page 830] (5) At an interview, the committee may ask the applicant any question that the committee reasonably believes to be related to: (a) the application; or (b) a reference accompanying the application; or (c) the issue of whether the applicant has the qualifications, experience, knowledge and abilities to perform the functions of a registered trustee. (6) A committee must not interview an applicant until: (a) the Inspector-General has received the information and documents in relation to the application that are prescribed by regulation 8.01; and (b) any charge imposed by an Act for making the application has been paid.

[87,875N] Report of committee decision 8.05N (1) A report under subsection 155A(6) of the Act must:

(a) be in writing; and (b) be signed by each member of the committee; and (c) in the case of a majority decision — set out the reasons of the minority member. (2) The report must be given to the applicant and to the Inspector-General within 14 days of the committee making its decision.

Subdivision 4 — Other matters

[87,875O] Confidentiality 8.05O A committee must take all reasonable measures to protect from unauthorised use or disclosure information given to it in confidence in, or in connection with, the performance of its functions or the exercise of its powers under the Act or these Regulations.

[87,875P] Evidence of proceedings at committee meetings 8.05P In any proceedings, a copy of the minutes of proceedings at a committee meeting, signed by the Chairperson of the committee: (a) is evidence of the proceedings as recorded in the minutes; and (b) may be tendered in evidence without further proof.

DIVISION 3 — CONSENT TO ACT, APPOINTMENT, AS TRUSTEE OF ESTATE

[87,925] Consent to act as trustee — subsection 156A(1) of the Act 8.06 (1) A trustee who signs an instrument under subsection 156A(1) of the Act in relation to a debtor must file the instrument with the Official Receiver as soon as practicable after signing it or, if the Court makes a sequestration order against the debtor’s estate, not later than 2 working days after the day on which the order is made. (2) A certificate under subsection 156A(6) of the Act or under regulation 8.06A may be given in the form of an extract of the Index setting out the matters required to be shown by the certificate. Note: For the admissibility in evidence of an extract of the Index, see r 13.07. [reg 8.06 subst SR 76 of 1997 reg 15]

[page 831]

[87,930] Certificate of appointment under subsection 156A(3) of the Act 8.06A Where a registered trustee becomes, under subsection 156A(3) of the Act, the trustee of an estate or of joint and separate estates, the Official Receiver is to give the registered trustee a certificate to that effect. [reg 8.06A insrt SR 76 of 1997 reg 15]

DIVISION 4 — TRUSTEE’S REMUNERATION [Div 4 subst SLI 287 of 2010 reg 3 and Sch 1[2], opn 1 Dec 2010] Editor’s Note: Division 4 of Part 8 of the Bankruptcy Regulations 1996, as in force immediately before the commencement of SLI 287 of 2010, continues to apply to a bankruptcy if the date of bankruptcy is before the day that regulation commenced.

Subdivision 1 — Prescribed rates — subsections 162(2) and (3) of Act

[87,975] Prescribed rate — subsection 162(2) of the Act 8.07 For subsection 162(2) of the Act, the rate is: (a) if the money received by the trustee does not exceed $30,000 — 10%; or (b) if the money received by the trustee exceeds $30,000 but does not exceed $50,000 — 10% for the first $30,000 and 7.5% for the balance of the money; or (c) if the money received by the trustee exceeds $50,000 — 10% for the first $30,000, 7.5% for the next $20,000 and 5% for the balance of the money.

[87,980] Prescribed rate — subsection 162(3) of the Act 8.08 For subsection 162(3) of the Act, the rate is 2.5%.

Subdivision 2 — Trustee’s remuneration decided by InspectorGeneral

[87,985] Circumstances in which trustee may apply to Inspector-General to decide remuneration 8.09 For subsection 162(4) of the Act, the following circumstances are prescribed: (a) the creditors or the committee of inspection: (i) fail to vote on a motion relating to remuneration put forward by the trustee at a meeting of creditors under section 64U of the Act; or (ii) reject a motion relating to remuneration put forward by the trustee at a meeting of creditors under section 64U of the Act; (b) the creditors or the committee of inspection: (i) fail to vote on a proposal relating to remuneration put forward by the trustee under section 64ZBA of the Act; or (ii) reject a proposal relating to remuneration put forward by the trustee under section 64ZBA of the Act; (c) it is not cost effective to seek the approval of creditors for the trustee’s remuneration; (d) it is not practicable to seek the approval of creditors for the trustee’s remuneration. Example for paragraph (c) It may not be cost-effective to seek the approval of creditors if the value of the assets in the estate is so small that the expense of holding a creditors’ meeting or sending a notice to creditors cannot be justified.

[page 832]

Examples for paragraph (d) 1 It may not be practicable to seek the approval of creditors if the bankruptcy is annulled and there are no longer any creditors to vote on a remuneration proposal. 2 It may not be practicable to seek the approval of creditors if a meeting is cancelled because of a lack of quorum. REGULATION 8.09 GENERALLY [87,985.5] Disbursements of trustee under Bankruptcy (Estate Charges) Act 1997 (Cth) s 167 — “disbursements” … “lawfully entitled” In Wenkart v Pantzer BC200302427; [2003] FCA 471 at [7] Beaumont J held that in taxing disbursements under the section applicants must establish to the taxing officer that the employment of the person in respect of the particular matters out of which the costs arise “was duly authorised and was reasonable and necessary”. A person may appeal against the decisions of the taxing officer, and either failure to object at the taxation or failure to appeal within the time allowed, unless a basis to enlarge time is demonstrated, can properly demonstrate that the applicant is “lawfully entitled” to the sum claimed.

____________________

[87,990] Application to Inspector-General to decide remuneration 8.10 For subsection 162(4) of the Act, the application: (a) must be in writing; and (b) must: (i) state which circumstance prescribed in regulation 8.09 applies to the application; and (ii) include evidence that the prescribed circumstance applies to the application; and (c) must contain a single proposal about the trustee’s proposed remuneration; and (d) must include the information required by subsections 64U(5) and (5A) of the Act about the trustee’s statement; and (e) must explain: (i) why any work already performed by the trustee was necessary; and (ii) why any work proposed to be performed by the trustee will be necessary; and (iii) why the proposed remuneration for the work, or proposed

(f)

work, is appropriate for the particular administration; and must be accompanied by the following: (i) any notices issued by the trustee to the bankrupt and creditors under subsection 162(6A) of the Act; (ii) any other notices issued by the trustee to the bankrupt and creditors under Subdivision 3. REGULATION 8.10 GENERALLY

[87,990.5] See [87.985.5].

____________________

[87,995] Matters to which Inspector-General must have regard 8.11 For subsection 162(4A) of the Act, the Inspector-General must have regard to the following matters when deciding the trustee’s remuneration: (a) whether the trustee has followed the procedure in section 64U of the Act for estimating remuneration, including whether the trustee has adequately described to creditors the work performed or to be performed; [page 833] (b) whether the trustee has given the bankrupt and creditors the notices required to be given under these Regulations; (c) whether the trustee has explained why the work already performed was necessary; (d) whether the trustee has explained why the work proposed to be performed will be necessary; (e) whether, taking into account the nature and complexity of the work, the proposed remuneration is commensurate with: (i) the work already performed; or (ii) the work proposed to be performed; (f) any other relevant matters.

Note: A decision on the application is made under subsection 162(4A) of the Act. The InspectorGeneral must advise the trustee and the bankrupt and creditors of the decision in accordance with subsection 162(4B) of the Act. REGULATION 8.11 GENERALLY [87,995.5] Appeal See [87.985.5]. [87,995.10] Time to appeal See [87.985.5].

____________________

Subdivision 3 — Remuneration of trustees — notices

[88,000] Notices 8.12 This Subdivision is made for subsection 162(6A) of the Act and sets out the notices that the trustee is required to give to the bankrupt and creditors in relation to the trustee’s remuneration.

[88,003] Initial remuneration notice 8.12A (1) The trustee must give the bankrupt and creditors notice of: (a) the method by which the trustee seeks to be remunerated; and (b) the rate of remuneration; and (c) an estimate of the expected amount of the trustee’s remuneration. (2) The notice must: (a) include a brief explanation of the types of methods that could be used to calculate remuneration; and (b) specify the method the trustee proposes to use to calculate remuneration; and (c) explain why the method is appropriate. (3) If the trustee proposes to charge on a time-cost basis, the notice must include details about the respective rates at which the remuneration of the trustee and the other persons who will be assisting, or will be likely to assist, the trustee in the performance of his or her duties are to be calculated. (4) The notice must be in writing and must be given to the bankrupt and creditors: (a) in the case of a trustee of a personal insolvency agreement who was

not the controlling trustee for a debtor under section 188 or 192 of the Act before the agreement for the debtor was executed — within 28 days after the day the agreement is executed as required by section 216 of the Act; and (b) in any other case: (i) within 28 days after the day the trustee receives the bankrupt’s statement of affairs; or [page 834] (ii) if the trustee does not receive the bankrupt’s statement of affairs within 60 days after the date of bankruptcy — within 7 days after the end of the 60 day period. (5) This regulation does not apply to: (a) a person who is the controlling trustee for a debtor under section 188 or 192 of the Act; or (b) a trustee of a personal insolvency agreement who was the controlling trustee for a debtor under section 188 or 192 of the Act before the agreement for the debtor was executed.

[88,006] Remuneration approval notice 8.12B (1) If the trustee proposes to have his or her remuneration fixed by creditors or the committee of inspection in accordance with subsection 162(1) of the Act, the trustee must give the creditors or the committee a notice that complies with this regulation. (2) The notice must include the following information: (a) a description of the work that the trustee has undertaken or will, or is likely to, undertake, including details of the particular tasks to be performed by the trustee and any person assisting the trustee; (b) details of: (i) the number of hours to be charged by the trustee and each person assisting the trustee; and (ii) the hourly rate charged by the trustee and each person

assisting the trustee; and (iii) the proposed total remuneration for the work; (c) a statement that the costs incurred, or to be incurred, are necessary and reasonable having regard to the value and complexity of the administration; (d) a report on work that has been completed, that is in progress and that is still to be undertaken. (3) The information in the notice must be sufficient to enable the creditors or the committee of inspection to be satisfied that the costs incurred, or to be incurred, are necessary and reasonable having regard to the value and complexity of the administration. (4) The notice must be given: (a) if the trustee proposes to have his or her remuneration fixed at a meeting of creditors — at the same time as the meeting of creditors is convened; or (b) if the trustees proposes to have his or her remuneration fixed by putting a proposal to the creditors under section 64ZBA of the Act — at the same time as the notice under that section is given to the creditors. (5) This regulation does not apply to: (a) a person who is the controlling trustee for a debtor under section 188 or 192 of the Act; or (b) a trustee of a personal insolvency agreement who was the controlling trustee for a debtor under section 188 or 192 of the Act before the agreement for the debtor was executed.

[88,009] Remuneration claim notice 8.12C (1) Subject to subregulation (3), the trustee must give the bankrupt and the creditors a notice that complies with this regulation when the remuneration claimed by the trustee reaches the amount (the fixed amount): (a) fixed by the creditors or the committee of inspection; or (b) decided by the Inspector-General; or [page 835]

(c) if the trustee claims the statutory minimum or less under subsection 161B(1) of the Act — claimed by the trustee under that subsection. (2) The notice must be given within 14 days after the fixed amount is reached. (3) If the remuneration claimed does not reach the fixed amount, the trustee must give the creditors a notice that complies with this regulation: (a) at the time the trustee declares a final dividend; or (b) if the trustee determines that no final dividend will be declared — at the time the administration of the estate is finalised. (4) A notice under subregulation (1) or (3) must include the following information: (a) the total remuneration claimed; (b) details of: (i) the work performed for which remuneration is claimed; and (ii) the names of the persons who performed the work; and (iii) the number of hours charged by, or in relation to, each person for the work; and (iv) the hourly rate charged by, or in relation to, each person for the work; (c) an explanation of any variation from the amounts set out in any notice under regulation 8.12B in relation to: (i) the remuneration claimed; and (ii) the number of hours charged; and (iii) the hourly rate charged; and (iv) the persons performing the work. (5) A notice under subregulation (1) or (3) must also include a statement advising the bankrupt and the creditors that they may, within 28 days after receiving the notice, request the Inspector-General to review the amount of remuneration claimed by the trustee. Note: Subdivision 4 deals with applications to the Inspector-General to review decisions in relation to a trustee’s remuneration. Subdivision 6 sets out how reviews are undertaken.

Subdivision 4 — Review of remuneration

[88,012] Review of remuneration 8.12D This Subdivision is made for subsection 167(1) of the Act and provides for the Inspector-General to review decisions about the trustee’s remuneration on application by a bankrupt or a creditor of the bankrupt.

[88,015] Application for review — remuneration 8.12E (1) A bankrupt or a creditor of the bankrupt (the applicant) may apply to the Inspector-General for a review of the amount of remuneration claimed by the trustee. (2) The application must be in writing and must, subject to subregulation (3), be made within 28 days after the day the applicant receives notification under regulation 8.12C. (3) The Inspector-General may, before or after the end of the 28 days mentioned in subregulation (2), extend the period in which an application for review may be made if the Inspector-General is satisfied that: (a) the applicant and the trustee have been engaged in an alternative dispute resolution process to try to resolve the matter; or (b) it is appropriate, in all the circumstances, to extend the period. (4) The Inspector-General may extend the period for any period the Inspector-General considers appropriate in all the circumstances. [page 836] (5) The applicant may apply to the Administrative Appeals Tribunal for the review of a decision by the Inspector-General under subregulation (3) to refuse to extend the period in which an application for review may be made. (6) The trustee may apply to the Administrative Appeals Tribunal for the review of a decision by the Inspector-General under subregulation (3) to extend the period in which an application for review may be made.

[88,018] Application threshold 8.12F (1) The Inspector-General must refuse to accept an application:

(a) unless the Inspector-General is satisfied on reasonable grounds that 1 or more of the following apply: (i) the trustee’s remuneration may have been fixed in a manner that is inconsistent with the requirements of the Act or these Regulations; (ii) the trustee may have acted improperly, or without due care and diligence, in the administration of the estate; or (b) if the Inspector-General is satisfied on reasonable grounds that: (i) the applicant does not have an interest in the outcome of the review; or (ii) the applicant has not adequately particularised the issue giving rise to the review; or (iii) the application is frivolous or vexatious. (2) However, the Inspector-General may accept an application if the Inspector-General is satisfied that there are exceptional circumstances to justify the review. (3) The Inspector-General may refuse to accept an application if the Inspector-General is satisfied on reasonable grounds that: (a) it was appropriate in all the circumstances for the applicant to attempt to resolve the matter without seeking a review under this Subdivision; and (b) the applicant did not do so; and (c) the applicant did not provide a reasonable explanation for not doing so.

[88,021] Notification of decision 8.12G (1) If the Inspector-General refuses to accept the application, the Inspector-General must give the applicant and the trustee written notice of the refusal. (2) The notice must be given to the applicant and the trustee within 14 days after the day the Inspector-General refuses the application and must include the reasons for the refusal.

Subdivision 5 — Review of bill of costs

[88,024] Review of bill of costs 8.12H This Subdivision is made for subsection 167(2) of the Act and provides for the Inspector-General to review a bill of costs for services provided by a third party in relation to the administration of a bankrupt’s estate.

[88,027] Application for review — third party bill of costs 8.12I (1) The trustee of the bankrupt’s estate may apply to the InspectorGeneral to review a bill of costs for services provided by a third party in relation to the administration of the bankrupt’s estate. [page 837] (2) The application must be in writing. (3) The application must, subject to subregulation (4), be made within 28 days after the trustee receives the bill of costs from the third party. (4) The Inspector-General may, before or after the end of the 28 days mentioned in subregulation (3), extend the period in which an application for review may be made if the Inspector-General is satisfied that: (a) the trustee and the third party have been engaged in an alternative dispute resolution process to try to resolve the matter; or (b) it is appropriate, in all the circumstances, to extend the period. (5) The Inspector-General may extend the period for any period the Inspector-General considers appropriate in all the circumstances. (6) The trustee may apply to the Administrative Appeals Tribunal for review of a decision by the Inspector-General under subregulation (4) to refuse to extend the period in which an application for review may be made. (7) The third party may apply to the Administrative Appeals Tribunal for the review of a decision by the Inspector-General under subregulation (4) to extend the period in which an application for review may be made.

Subdivision 6 — Review by Inspector-General

[88,030] Review by Inspector-General 8.12J (1) If the Inspector-General accepts an application under regulation 8.12E or 8.12I, the Inspector-General must conduct a review in accordance with this Subdivision. (2) The Inspector-General may: (a) affirm the amount claimed by the trustee or the third party; or (b) disallow all or part of the trustee’s claim for remuneration and substitute another amount for the amount claimed; or (c) disallow all or part of the third party’s bill of costs and substitute another amount for the amount claimed; or (d) dismiss the application.

[88,033] How review to be conducted 8.12K (1) The Inspector-General must conduct the review with as little formality and technicality, and with as much expedition, as the Act and these Regulations, and a proper consideration of the matter, permit. (2) In conducting the review, the Inspector-General: (a) is not bound by legal technicalities, legal forms or rules of evidence; and (b) may inform himself or herself on any matter relevant to the review in such manner as he or she thinks appropriate.

[88,036] Powers of Inspector-General 8.12L In conducting the review, the Inspector-General may do any of the following: (a) conduct the review: (i) with the parties present; or (ii) on the papers; or (iii) in part with the parties present and in part on the papers; (b) adjourn or discontinue the review if the Inspector-General considers it necessary or appropriate to do so;

[page 838] (c) engage an expert to assist in the review and arrange for payment to be made to the expert; (d) direct the trustee to provide an itemised invoice in a form, and within the time, specified in the direction for work undertaken by the trustee; (e) direct a third party to give an itemised bill of costs in a form, and within the time, specified in the direction in relation to work undertaken by the third party; (f) interview any party to the review and allow the other party or their representative to question that party; (g) direct a person to give a written statement, in a specified form and signed by the person, about a matter relevant to the review; (h) direct the trustee to produce to the Inspector-General or to a party to the review, all or part of the trustee’s files or documents in relation to the administration of the bankrupt’s estate; (i) copy documents, or arrange for copies to be made and delivered to the Inspector-General or a party to the review; (j) direct a party seeking inspection, production or copies of documents to comply with conditions (including conditions relating to payment) in relation to the inspection, production or copying; (k) proceed with the review in the absence of a party if the InspectorGeneral considers it necessary or appropriate to do so; (l) direct the trustee to take particular action for the administration of the estate, including refunding any remuneration not properly claimed or supported. Note: This regulation does not exclude the need for the Inspector-General to provide procedural fairness when conducting the review.

[88,039] Non-compliance with directions 8.12M (1) If a person to whom the Inspector-General gives a direction under regulation 8.12L does not comply with the direction, the InspectorGeneral may conduct the review on the basis of the information available to

the Inspector-General. (2) If the trustee does not comply with a direction of the Inspector-General under paragraph 8.12L(d), (h) or (1), the Inspector-General may direct that the trustee is not entitled to the remuneration, or part of the remuneration, that is the subject of the review. (3) If a third party does not comply with a direction of the InspectorGeneral under paragraph 8.12L(e), the Inspector-General may order that the trustee may declare and distribute a final dividend in the bankruptcy without regard to any claim of the third party. (4) If the Inspector-General makes an order under subregulation (3), the estate of the bankrupt has no liability to the third party for the bill of costs that is the subject of the review.

[88,042] Decision of Inspector-General 8.12N (1) The Inspector-General must complete the review, and make a decision on the application, within 60 days after the day the InspectorGeneral accepts the application for review. (2) When the Inspector-General makes his or her decision, the InspectorGeneral must prepare a written statement that: (a) sets out the decision of the Inspector-General; and (b) sets out the reasons for the decision; and (c) sets out the findings on any material questions of fact; and (d) refers to evidence or other material on which the findings of fact are based; and [page 839] (e) sets out the effect of subsection 167(6) of the Act in relation to the Inspector-General’s decision. (3) The Inspector-General must give each party to the review a copy of the statement within 14 days after making the decision.

[88,045] Repayments of excess

8.12O For subsection 167(4) of the Act, if the Inspector-General is satisfied that a withdrawal by the trustee of funds from the estate of the bankrupt for payment of the trustee’s remuneration exceeds the amount of remuneration the trustee is entitled to under Division 2 of Part VIII of the Act, the Inspector-General may require the trustee to repay the excess to the estate.

DIVISION 5 — REGISTERED TRUSTEE CEASING TO BE TRUSTEE OF AN ESTATE

[88,050] Notice of removal of trustee of estate 8.13 (1) This regulation applies in relation to the removal of a registered trustee if: (a) the Court removes the trustee, under subsection 156A(5) or 179(1) of the Act, from the office of trustee of an estate; or (b) the creditors remove the trustee, under section 181 of the Act, from that office. (2) In the event of such a removal, the person specified in paragraph (3)(a) or (b) (as the case requires) must give notice in writing to the Official Receiver, in accordance with the applicable paragraph, stating the name of the registered trustee, the fact and the date of the removal and whether the removal was by the Court or the creditors. (3) The notice must be given: (a) where paragraph (1)(a) applies — by the applicant to the Court for the removal, as soon as practicable after the making of the order for removal; or (b) where paragraph (1)(b) applies — by the new trustee of the estate appointed by the creditors under section 181 of the Act, as soon as practicable after the appointment. [subreg (3) am SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

(4) An offence against this regulation is an offence of strict liability. Penalty: 1 penalty unit Note: For strict liability, see section 6.1 of the Criminal Code. [subreg (4) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

[88,055] Notice of finalisation of administration; entry on the Index 8.14 (1) A registered trustee must, within 7 days of finalising the administration of an estate, give notice in writing of the finalisation to the Official Receiver. Penalty: 1 penalty unit [subreg (1) am SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

(2) The Official Receiver must promptly enter on the Index the fact that the administration of an estate has been finalised, where: (a) the Official Receiver receives notice under subregulation (1); or (b) the estate was administered by the Official Trustee. (3) An offence against subregulation (1) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. [subreg (3) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

[page 840]

DIVISION 5A — TRUSTEE’S ACCOUNTS AND AUDIT [Repealed] [Div 5A rep SR 76 of 1997 reg 18]

DIVISION 6 — VARIATION AND TERMINATION OF REGISTRATION [Div 6 subst SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

Subdivision 1 — Preliminary

[88,105] Definitions 8.15 In this Division, unless the contrary intention appears: application means an application under subsection 155E(1) of the Act. chairperson means the chairperson of a committee.

committee means a committee convened under subsection 155E(4) or 155H(2) of the Act. member, in relation to a committee, includes the chairperson.

[88,110] Documents to accompany application for change or removal of conditions 8.16 For paragraph 155E(3)(a) of the Act, an application must be accompanied by 2 references signed by the respective referees, containing the particulars specified in subregulation 8.01(3).

Subdivision 2 — Constitution and procedure of committees generally

[88,115] Chairperson of a committee 8.17 The chairperson of a committee is: (a) the Inspector-General; or (b) if the Inspector-General appoints another member of the committee as chairperson — that person.

[88,120] Trustee chosen by the Insolvency Practitioners Association of Australia 8.18 A registered trustee chosen by the Insolvency Practitioners Association of Australia under paragraph 155E(5)(c) or 155H(3)(c) of the Act must have practised as a registered trustee for at least 5 years.

[88,125] Resignation of chairperson 8.19 (1) A chairperson other than the Inspector-General may resign the office of chairperson by notice in writing signed by the chairperson and given to the Inspector-General. (2) A notice of resignation takes effect when the Inspector-General receives it.

[88,130] Resignation of members 8.20 (1) A member of a committee, other than the Inspector-General, may resign from the committee by notice in writing signed by the member and given to the Inspector-General. [page 841] (2) A notice of resignation takes effect when the Inspector-General receives it.

[88,135] Disclosure of interests 8.21 If: (a) a member of a committee convened under subsection 155E(4) of the Act: (i) is a close relative of the applicant; or (ii) has a financial or personal relationship with the applicant; or (b) a member of a committee convened under subsection 155H(2) of the Act: (i) is a close relative of the trustee concerned; or (ii) has a financial or personal relationship with the trustee; the member must, as soon as practicable after becoming aware of the identity of the applicant or trustee, disclose the nature of the relationship to the other members of the committee and to the Inspector-General.

[88,140] Removal of members from a committee 8.22 (1) The Inspector-General may terminate the appointment of a member of a committee if: (a) the member becomes physically or mentally incapable of performing the duties of a member; or (b) the member becomes a bankrupt; or (c) the member signs an authority under section 188 of the Act that is effective for the purposes of Part X of the Act; or

(d) the member becomes a party, as a debtor, to a debt agreement; or (e) the member has been convicted of an offence involving fraud or dishonesty; or (f) the member neglects his or her duty as a member. (2) The Inspector-General may terminate the appointment of a member of a committee convened under subsection 155E(4) or 155H(2) of the Act if: (a) the member: (i) is a close relative of the applicant, or trustee, concerned; or (ii) has a financial or personal relationship with the applicant or trustee; and (b) the Inspector-General believes that relationship may affect the impartiality of the member.

[88,145] Convening of a replacement committee 8.23 (1) This regulation applies if: (a) either of the following events occurs: (i) a member of a committee resigns or dies; (ii) the appointment of a member of a committee is terminated under regulation 8.22; and (b) at the time of that occurrence, the committee has not made a decision under subsection 155F(1) or 155I(1) of the Act. (2) If this regulation applies: (a) the Inspector-General must convene another committee (the new committee) in place of the committee referred to in subregulation (1) (the previous committee); and (b) the new committee must not have regard to any proceedings of the previous committee. [page 842]

[88,150] General procedures of a committee 8.24 (1) Subject to the Act and this Division, a committee may determine

its procedure. (2) A committee must observe natural justice. (3) A committee is not bound by any rules of evidence but may inform itself on any matter as it sees fit. (4) A committee must keep a written record of its decisions.

[88,155] Procedure at committee meetings 8.25 (1) Subject to this regulation, all members of a committee must be present in order to constitute a quorum for a meeting of the committee. (2) At a meeting of a committee a matter is to be decided by a majority of the votes of the members. (3) Any member may participate in a meeting by telephone. (4) A member who participates in a meeting by telephone is taken to be present at the meeting. (5) A committee may keep minutes of proceedings at its meetings.

[88,160] Resolutions without meeting 8.26 (1) If the majority of the members of a committee sign a document containing a statement that they are in favour of a resolution in the terms set out in the document, the resolution is taken to have been passed at a meeting of the committee: (a) on the day on which the document is signed; or (b) if the members sign the document on different days — on the day on which the document is signed by the member who makes up the majority. (2) Two or more separate documents that are identical in all material respects (apart from signatures), each of which is signed by 1 or more members, are taken for the purposes of subregulation (1) to constitute a single document.

Subdivision 3 — Inquiries and interviews

[88,165] Inquiries by the committee

8.27 (1) A committee considering an application may make inquiries of any person for the purposes of making a decision under subsection 155F(1) or 155I(1) of the Act. (2) Inquiries made must be: (a) inquiries that are reasonable for the purpose of making an informed decision; or (b) inquiries that the Chairperson of the committee believes are appropriate in order for the committee to have sufficient information to make the decision. (3) Before making a decision that is adverse to a person, a committee must: (a) inform the person of any information or material that the committee relies on, or proposes to rely on, in making the decision; and (b) give the person a reasonable opportunity to reply to, or rebut, the information or material. [page 843]

[88,170] Notice of interview (Act s 155E(6)) 8.28 For subsection 155E(6) of the Act, the Inspector-General or authorised employee on the committee must, after consultation with the other members of the committee: (a) fix a date, time and place for the interview; and (b) give written notice of that date, time and place to the applicant and the other members of the committee. [reg 8.28 am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[88,175] Change of conditions on practising as a registered trustee — interview 8.29 (1) A committee must interview the applicant as soon as practicable and, for that purpose: (a) any member of the committee may participate in the interview by telephone; and

(b) the applicant may participate in the interview by telephone. (2) A member, or applicant, who participates in an interview in accordance with paragraph (1)(a) or (b) is taken to be present at the interview. (3) If the applicant fails to attend, or participate by telephone in, the interview and does not, within 7 days, give the committee a reasonable excuse for that failure: (a) the application is taken to have lapsed; and (b) the application fee is not refundable. (4) If an applicant who fails to attend, or participate by telephone in, an interview gives the committee, within 7 days, a reasonable excuse for that failure, the committee must arrange another interview date, time and place. (5) At an interview, the committee may ask the applicant any question that the committee reasonably believes to be related to: (a) the application; or (b) a reference accompanying the application; or (c) the issue of whether the applicant has the qualifications, experience, knowledge and abilities to perform the functions of a registered trustee. (6) A committee must not interview an applicant until: (a) the Inspector-General has received the references, in relation to the application, mentioned in regulation 8.16; and (b) any charge imposed by an Act for making the application has been paid.

[88,180] Involuntary termination of registration — interview 8.30 (1) If the Inspector-General is required under subsection 155H(2) of the Act to convene a committee to consider whether a trustee should continue to be registered, the Inspector-General or authorised employee on the committee must, after consultation with the other members of the committee: (a) fix a date, time and place for the interview; and (b) give written notice of that date, time and place to the trustee and the other members of the committee. [subreg (1) am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

(2) The committee must interview the trustee as soon as practicable and, for that purpose: (a) any member of the committee may participate in the interview by telephone; and (b) the trustee may participate in the interview by telephone. [subreg (2) am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[page 844] (3) A member, or trustee, who participates in an interview in accordance with paragraph (1)(a) or (b) is taken to be present at the interview. (4) If the trustee fails to attend, or participate by telephone in, the interview and does not, within 7 days, give the committee a reasonable excuse for that failure, the committee may proceed with its consideration of the matter. (5) If a trustee who fails to attend, or participate by telephone in, an interview gives the committee, within 7 days, a reasonable excuse for that failure, the committee must arrange another interview date, time and place. [subreg (5) am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[88,185] Report of committee decision 8.31 (1) A report under subsection 155F(2) or 155I(4) of the Act must: (a) be in writing; and (b) be signed by each member of the committee; and (c) in the case of a majority decision — set out the reasons of the minority member. (2) The report must be given to the applicant or trustee, and to the Inspector-General, within 14 days of the committee making its decision.

Subdivision 4 — Other committee-related matters [Subdiv 4 am SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

[88,190] Confidentiality 8.32 A committee must take all reasonable measures to protect from

unauthorised use or disclosure information given to it in confidence in, or in connection with, the performance of its functions or the exercise of its powers under the Act or these Regulations.

[88,195] Evidence of proceedings at committee meetings 8.33 In any proceedings, a copy of the minutes of proceedings at a committee meeting, signed by the Chairperson of the committee: (a) is evidence of the proceedings as recorded in the minutes; and (b) may be tendered in evidence without further proof.

[88,200] Time for deciding matters (Act s 155I(1)) 8.34 A committee must decide a matter under subsection 155I(1) of the Act within 60 days of being convened.

Subdivision 4A — Standards for trustees [Subdiv 4A insrt SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

[88,200A] Performance standards for trustees (including controlling trustees) 8.34A (1) For subsection 155H(5) of the Act, the standards applicable to the exercise of powers, or the carrying out of duties, of registered trustees are set out in Schedule 4A. (2) For subsection 188(2A) of the Act, the standards in Parts 1, 2 and 5 of Schedule 4A also apply to a solicitor who is a controlling trustee. [page 845]

Subdivision 5 — Controlling trustees other than Official Trustee or registered trustees [Subdiv 5 insrt SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

[88,205] Eligibility of controlling trustees, other than Official Trustee or registered trustees 8.35 (1) For subsection 188(2A) of the Act, a person (other than the Official Trustee or a registered trustee) is not eligible to act as a controlling trustee if the person: (a) is convicted of a criminal offence involving fraud or dishonesty, or was so convicted within the 10 years before the proposed authorisation; or (b) is not insured against the liabilities the trustee may become subject to as a controlling trustee; or (c) is a solicitor who no longer holds a practising certificate; or (d) is an undischarged bankrupt or insolvent under administration, or became a party (as debtor) to a debt agreement or a Part X administration within the 10 years before the proposed authorisation; or (e) is a person who the Inspector-General decides under subregulation (2) has failed to properly exercise powers or carry out duties or to cooperate with an inquiry or investigation, or in relation to whom such a decision was made within the 3 years before the proposed authorisation; or (f) either: (i) is not a full member of the Insolvency Practitioners Association of Australia; or (ii) has not satisfactorily completed a course in insolvency approved by the Inspector-General. [subreg (1) am SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004; SLI 195 of 2010 reg 3 and Sch 1[14], opn 1 Aug 2010]

(1A) The Inspector-General may approve a course in insolvency by notice published on the Insolvency and Trustee Service Australia’s website. Note: Paper copies of the notice are available from the Insolvency and Trustee Service Australia on request. [subreg (1A) insrt SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

(2) In addition to subregulation (1), a person who is, or has been, a controlling trustee is not eligible to act as a controlling trustee if the Inspector-General determines that the person:

(a) has failed to properly exercise the powers, or carry out the duties or obligations, of a controlling trustee, including meeting a standard applicable to a controlling trustee set out in Schedule 4A; or (b) has refused, or failed to cooperate with the Inspector-General in an inquiry or investigation under paragraph 12(1)(b) of the Act. [subreg (2) am SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

(3) If the Inspector-General forms an opinion of the kind mentioned in paragraph (2)(a) or (b), the Inspector-General must: (a) by written notice, tell the person; and (b) invite the person to respond within 28 days or such longer time as is specified in the notice. (4) After the expiry of the time mentioned in paragraph (3)(b), the Inspector-General may, having regard to the response (if any) of the person, make a determination under subregulation (2). [page 846] (5) If the Inspector-General makes a determination under subregulation (2), the Inspector-General must give the person a written notice of the determination, setting out the reasons.

[88,210] Review by Tribunal of determination under subregulation 8.35(2) 8.36 Application may be made to the Administrative Appeals Tribunal for a review of a determination of the Inspector-General under subregulation 8.35(2).

[88,215] Official Trustee to perform duties 8.37 If a controlling trustee becomes ineligible to act as a controlling trustee then, unless and until the debtor appoints a controlling trustee who is eligible to so act, the Official Trustee must perform the duties of the controlling trustee. [reg 8.37 am SLI 4 of 2006 reg 3 and Sch 1 [3], opn 17 Feb 2006]

PART 9 — DEBT AGREEMENTS

[88,255] Prescribed information to be supplied to the debtor 9.01 (1) For paragraph 185C(2D)(b) and subsection 185E(1) of the Act, the following information is prescribed: (a) information about alternatives to entering into a debt agreement; (b) information about the consequences of making a debt agreement proposal; (c) information about sources of financial advice and guidance to persons facing or contemplating entering into a debt agreement; (d) a statement that it is an act of bankruptcy for a debtor to give to the Official Receiver a debt agreement proposal. (2) The information must be factual and objective. (3) The Official Receiver must not accept a debtor’s debt agreement proposal under Division 2 of Part IX of the Act, unless the debtor has given to the Official Receiver a signed acknowledgment that the debtor has received and read the prescribed information. (4) If the debtor presents a debt agreement proposal without having given the acknowledgement, the Official Receiver must: (a) if the debtor presents the debt agreement proposal in person — give the prescribed information to the debtor; or (b) if the debtor presents the debt agreement proposal by post — post the prescribed information to the debtor. (5) Subregulation (6) applies if a debtor intends to present a debt agreement proposal and the debtor is: (a) unable to read the relevant material, because he or she is: (i) blind, partially sighted, illiterate or partially literate; or (ii) insufficiently familiar with the English language; or (b) unable to sign the debt agreement proposal or the acknowledgment, because of a physical incapacity. [subreg (5) subst SLI 195 of 2010 reg 3 and Sch 1[15], opn 1 Aug 2010]

(6) The debt agreement proposal and the acknowledgement may be signed

by another person, who must sign a statement: (a) if subparagraph (5)(a)(i) applies — that he or she has read the relevant material to the debtor; or [page 847] (b) if subparagraph (5)(a)(ii) applies — that he or she has interpreted the relevant material to the debtor in a language with which both persons are familiar; or (c) if paragraph (5)(b) applies — that he or she believes that the debtor has read and understood the relevant material. [subreg (6) subst SLI 195 of 2010 reg 3 and Sch 1[15], opn 1 Aug 2010]

(7) In this regulation: relevant material means the debt agreement proposal, the prescribed information and the acknowledgment. [subreg (7) insrt SLI 195 of 2010 reg 3 and Sch 1[15], opn 1 Aug 2010] [reg 9.01 insrt SLI 138 of 2007 reg 3 and Sch 2[7], opn 1 July 2007]

[88,260] Qualifications of applicants 9.02 For paragraph 186C(2)(e) of the Act, the following qualifications are prescribed after 30 June 2009: (a) a Certificate IV in Financial Services (Accounting) from an Australian college of advanced education; (b) a degree, diploma or similar qualification from an Australian university, college of advanced education or other Australian tertiary institution that is of an equivalent or higher level to, and contains the same or similar subject matter as, the qualification mentioned in paragraph (a). [reg 9.08 insrt SLI 138 of 2007 reg 3 and Sch 1[1], opn 14 June 2007; renum SLI 138 of 2007 reg 3 and Sch 2[6], opn 1 July 2007; am SLI 195 of 2010 reg 3 and Sch 1[16], opn 1 Aug 2010]

[88,265] Administrator’s fee to be paid according to work done

9.03 [reg 9.03 rep SLI 138 of 2007 reg 3 and Sch 2[5], opn 1 July 2007]

[88,270] Persons ineligible to be debt agreement administrator 9.04 [reg 9.04 rep SLI 138 of 2007 reg 3 and Sch 2[5], opn 1 July 2007]

[88,275] Official Trustee to administer agreement 9.05 [reg 9.05 rep SLI 138 of 2007 reg 3 and Sch 2[5], opn 1 July 2007]

[88,280] Duties of administrator 9.06 [reg 9.06 rep SLI 138 of 2007 reg 3 and Sch 2[5], opn 1 July 2007]

[88,285] Review by Tribunal of decisions under subregulation 9.06(3) 9.07 [reg 9.07 rep SLI 138 of 2007 reg 3 and Sch 2[5], opn 1 July 2007]

PART 10 — PERSONAL INSOLVENCY AGREEMENTS [Pt 10 subst SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

[88,405] Modifications of Part X of the Act — joint debtors 10.01 For section 187A of the Act, a provision of Part X of the Act specified in Part 1 of Schedule 6 is modified in accordance with that Part in relation to its application, in accordance with that section, to joint debtors, whether partners or not. [page 848]

[88,410] Information to be given to debtor (Act ss 188(2AA) and (2AB)) 10.02 (1) For subsections 188(2AA) and (2AB) of the Act, the following information is prescribed: (a) information about the consequences of entering into a personal insolvency agreement; (b) information about sources of financial advice and guidance to persons facing or contemplating entering into a personal insolvency agreement; (c) information about whether a personal insolvency agreement may be administered by a registered trustee or the Official Trustee; (d) a statement that it is an act of bankruptcy if a debtor does any of the things mentioned in paragraphs 40(1)(i) to (m) of the Act; (e) information about the processes under Part X of the Act; (f) information about a debtor’s rights and responsibilities under Part X of the Act, including a debtor’s obligation to disclose all related entities; (g) information about a controlling trustee’s obligation to disclose his or her relationship with a debtor. (2) The information must be factual and objective. (3) A person authorised under subsection 188(1) of the Act to take control of a debtor’s property must not consent to exercise the powers given by the

authority unless the debtor has given the person a signed acknowledgement (which may be included with or appended to the authority) that the debtor has received and read the prescribed information. (4) Subregulation (5) applies if a debtor intends to sign an authority and the debtor is: (a) unable to read the relevant material, because he or she is: (i) blind, partially sighted, illiterate or partially literate; or (ii) insufficiently familiar with the English language; or (b) unable to sign the authority or the acknowledgment, because of a physical incapacity. [subreg (4) subst SLI 195 of 2010 reg 3 and Sch 1[17], opn 1 Aug 2010]

(5) The authority and the acknowledgement may be signed by another person, who must sign a statement: (a) if subparagraph (5)(a)(i) applies — that he or she has read the relevant material to the debtor; or (b) if subparagraph (5)(a)(ii) applies — that he or she has interpreted the relevant material to the debtor in a language with which both persons are familiar; or (c) if paragraph (5)(b) applies — that he or she believes that the debtor has read and understood the relevant material. [subreg (5) subst SLI 195 of 2010 reg 3 and Sch 1[17], opn 1 Aug 2010]

(6) In this regulation: relevant material means the authority, the prescribed information and the acknowledgment. [subreg (6) insrt SLI 195 of 2010 reg 3 and Sch 1[17], opn 1 Aug 2010]

[88,415] Documents under section 188 of Act 10.03 (1) A registered trustee or solicitor who consents to exercise the powers given by an authority under section 188 of the Act must sign a consent in accordance with the approved form. [page 849] (2) The registered trustee or solicitor must, within 2 working days after consenting, give a copy of the signed consent to an Official Receiver. [subreg (2) subst SLI 195 of 2010 reg 3 and Sch 1[18], opn 1 Aug 2010; am SLI 287 of 2010 reg 3 and Sch 1[3], opn 1 Dec 2010]

(3) The registered trustee or solicitor must, within 2 working days after a proposal for dealing with the debtor’s affairs under Part X of the Act is finalised, give a copy of the proposal to: (a) an Official Receiver; and (b) each creditor of the bankrupt of whom the registered trustee or solicitor is aware. Note: Under subsection 188(5) of the Act, a registered trustee or solicitor who consents to exercise the powers given by an authority must also give a copy of the authority and the debtor’s statement of affairs to an Official Receiver. [subreg (3) insrt SLI 195 of 2010 reg 3 and Sch 1[18], opn 1 Aug 2010; am SLI 287 of 2010 reg 3 and Sch 1[4]–[5], opn 1 Dec 2010] [subreg (2) subst SLI 4 of 2006 reg 3 and Sch 1 [6], opn 17 Feb 2006]

[88,420] Documents for meeting called under an authority under section 188 of the Act 10.04 At least 10 days before the first meeting of creditors called under an authority under section 188 of the Act is held, the controlling trustee must give an Official Receiver, the debtor and each creditor: (a) notice in writing of the date, time and place of the meeting; and (aa) [repealed] (b) a copy of the controlling trustee’s report, prepared in accordance with subsection 189A(1) of the Act, in relation to the debtor’s affairs; and (c) a copy of the controlling trustee’s statement, prepared in accordance with subsection 189B(1) of the Act, in relation to special resolutions expected to be passed at the meeting; and (d) a notice that includes the basis and the method on which the controlling trustee seeks to be remunerated, and, if appropriate, an estimate of the expected level of the controlling trustee’s remuneration; and (e) if the controlling trustee claims remuneration calculated by reference to an hourly rate — a notice stating: (i) the type of work undertaken by the trustee and the trustee’s staff; and (ii) the number of hours charged by each person; and (iii) the hourly rate charged for each person; and (iv) the total remuneration claimed. (f) [repealed] Note: Section 194 of the Act sets out the time for when a meeting that is to be called under an authority under section 188 of the Act must be held. Editor’s Note: Paragraph 10.04(f) of the Bankruptcy Regulations 1996, as in force immediately before the commencement of SLI 287 of 2010, continues to apply to a bankruptcy if the date of bankruptcy is before the day that regulation commenced. [reg 10.04 am SLI 4 of 2006 reg 3 and Sch 1 [7], [8], opn 17 Feb 2006; SLI 195 of 2010 reg 3 and Sch 1[19], opn 1 Aug 2010; SLI 287 of 2010 reg 3 and Sch 1[6]–[8], opn 1 Dec 2010]

[88,425] Modifications of Division 5 of Part IV of the Act — meetings called under authorities under section 188 of the Act 10.05 For section 196 of the Act, a provision of Division 5 of Part IV of the Act specified in Part 2 of Schedule 6 is modified in accordance with that Part in relation to its application, in accordance with that section, to a meeting called under an authority under section 188 of the Act. [page 850]

[88,430] Controlling trustee to give Official Receiver copy of special resolution and certain particulars for the Index 10.06 (1) If, at a meeting called under an authority under section 188 of the Act, a special resolution is passed under subsection 204(1) of the Act, the controlling trustee must give to the Official Receiver, within 7 days after the date when the resolution is passed: (a) a copy of the resolution; and (b) written notice specifying the following particulars for entry in the Index: (i) the date of the resolution; (ii) in respect of the debtor: (A) the debtor’s full name, and any alias; (B) the debtor’s address; (C) the debtor’s occupation (if any); (iii) if the resolution requires the debtor to execute a personal insolvency agreement — the name of each person nominated under subsection 204(3) of the Act to be a trustee of the agreement. Penalty: 1 penalty unit.

(2) An offence against subregulation (1) is an offence of strict liability.

[88,435] Modifications of Part VIII of the Act — controlling trustees and trustees of personal insolvency agreements 10.07 For section 210 of the Act, a provision of Part VIII of the Act specified in Part 3 of Schedule 6 is modified in accordance with that Part in relation to its application, in accordance with that section, to the controlling trustee in relation to a debtor.

[88,440] Modifications of Division 1 of Part V of the Act — debtors whose property is subject to control under Division 2 of Part X of the Act 10.08 For subsection 211(1) of the Act, a provision in Division 1 of Part V of the Act specified in Part 4 of Schedule 6 is modified in accordance with that Part in relation to its application, in accordance with that subsection, to a debtor whose property is subject to control under Division 2 of Part X of the Act.

[88,445] Meeting if trustee does not execute personal insolvency agreement 10.09 (1) A meeting of creditors under subsection 217(1) of the Act must be called in accordance with a written notice of the meeting that was given at least 7 days before the meeting to each of the following persons (other than the person giving the notice): (a) the debtor; (b) the trustee required to execute the personal insolvency agreement; (c) each creditor whose identity and address are known to, or can reasonably be discovered by, the person giving the notice. (2) A notice under subregulation (1) must set out the terms of any resolution proposed under subsection 217(1) of the Act that is known to the person giving the notice.

[88,450] Notification of personal insolvency agreement 10.10 A notification under paragraph 218(1)(a) of the Act must be in writing. Note: Regulation 16.01 applies to a notification under paragraph 218(1)(a) of the Act.

[page 851]

[88,455] Sequestration order, or order terminating or setting aside a personal insolvency agreement — notice to Official Receiver (Act s 221, s 222 and s 222C) 10.11 (1) This regulation does not apply in relation to an applicant who is the Official Trustee, the Inspector-General or a person authorised by the Inspector-General under subsection 222(1) or (5) of the Act. (2) If the Court makes a sequestration order under subsection 221(1), 222(10) or 222C(5) of the Act, the applicant for the order must give a copy of the order to the Official Receiver. (3) If the Court makes an order: (a) under subsection 222(1), (2) or (5) of the Act, setting aside a personal insolvency agreement; or (b) under subsection 222C(1) of the Act, terminating a personal insolvency agreement; the applicant for the order must give a copy of the order to the Official Receiver. (4) A copy of an order required by this regulation to be given to the Official Receiver must be given within 2 days after the order is made. Penalty: 1 penalty unit. (5) An offence against subregulation (4) is an offence of strict liability.

[88,460] Termination of personal insolvency agreement by trustee (Act s 222A) 10.12 (1) If a personal insolvency agreement is terminated in accordance with section 222A of the Act, the trustee of the agreement must immediately give written notice of the termination to the Official Receiver. Penalty: 1 penalty unit. (2) An offence against subregulation (1) is an offence of strict liability.

[88,465] Modifications of Parts V and VI of the Act

— personal insolvency agreements 10.13 (1) For subsection 231(1) of the Act, the provision specified in Part 5 of Schedule 6 is modified in accordance with that Part in relation to its application, in accordance with that subsection, to a debtor who has executed a personal insolvency agreement. (2) For subsection 231(3) of the Act, a provision specified in Part 6 of Schedule 6 is modified in accordance with that Part in relation to its application, in accordance with that subsection, to a personal insolvency agreement. (3) For subsection 231(5) of the Act, the provision specified in Part 7 of Schedule 6 is modified in accordance with that Part in relation to its application, in accordance with that subsection, to a trustee of a personal insolvency agreement.

[88,470] Certificate relating to realisation of divisible property and non-availability of dividend 10.14 (1) If the trustee of a personal insolvency agreement is satisfied that the divisible property of the debtor has, so far as practicable, been realised and no dividend [page 852] is payable to the creditors, the trustee must, on written request by the debtor, give the debtor a certificate signed by the trustee to that effect. (2) The trustee must give the certificate to the debtor within 7 days of receiving the written request. (3) In any proceeding, a certificate signed by the trustee under subregulation (1): (a) is evidence of the facts stated in it; and (b) may be tendered in evidence without further proof. (4) If the trustee gives a certificate to the debtor under subsection 232(1) of the Act or subregulation (1), the trustee must, within 7 days of giving the certificate, give a copy of the certificate to the Official Receiver.

Penalty: 1 penalty unit. (5) An offence against subregulation (4) is an offence of strict liability.

PART 11 — ADMINISTRATION OF ESTATES OF DECEASED PERSONS IN BANKRUPTCY

[88,640] Statement of affairs and of administration of estate 11.01 A statement under paragraph 246(1)(a) or subsection 247(1) of the Act must state, so far as applicable, the following particulars: (a) in relation to the capital account of the deceased person’s estate: (i) particulars of each amount received, including the name of the payer, the date received and the bank account into which the amount was paid; and (ii) particulars of each amount paid, including the name of the payee, the date of payment and the bank account from which the amount was drawn; (b) in relation to each of the assets of the deceased person transferred to beneficiaries — the particulars of the asset, the date of transfer and the name and address of the relevant beneficiary; (c) in relation to the income account of the deceased person: (i) particulars of each amount received, including the name of the payer, the date received and the bank account into which the amount was paid; and (ii) particulars of each amount paid, including the name of the payee, the date of payment and the bank account from which the amount was drawn; (d) in relation to each of the unsecured debts owed by the deceased person: (i) the name and address of the creditor and the amount (if any) owed by the creditor to the deceased person; and (ii) the amount of the debt; and (iii) the year when the debt was contracted; and

(iv) the nature of the debt; (e) in relation to each of the secured debts owed by the deceased person: (i) the name and address of the creditor and the amount (if any) owed by the creditor to the deceased person; and (ii) the amount of the debt and particulars of the security relating to it; and (iii) the date when the security was given; and (iv) the estimated present value of the security; and (v) the estimated deficiency or surplus if the security were to be realised; (f) in relation to each of current hire purchase, credit purchase, lease purchase or similar agreements: (i) the name and address of the finance company; and [page 853] (ii) (iii) (iv) (v) (vi)

the date of the agreement; and particulars of the goods to which the agreement relates; and any arrears of payment under the agreement; and the amount required to complete the agreement; and the present value of the goods and the estimated deficiency or surplus if the goods were to be realised; (g) in relation to any other assets and liabilities, including contingent assets and liabilities, of the deceased person’s estate — particulars of each asset and liability, including its present value.

[88,640A] Copy of petition etc to be given to Official Receiver 11.01A (1) A person who presents a petition under section 244 or 247 of the Act must, within 2 working days after the petition is endorsed by the Court, give a copy of the petition to the Official Receiver.

(2) The time within which, under subsection 244(14) of the Act, a creditor must give to the Official Receiver a copy of an order under subsection 244(11) of the Act is 2 working days after the order is endorsed by the Court. [reg 11.01A insrt SLI 195 of 2010 reg 3 and Sch 1[20], opn 1 Aug 2010]

[88,640B] Proof of statement of affairs 11.01B (1) Subregulation (2) applies in any proceedings to a document or copy of a document that purports to be a certificate signed by the InspectorGeneral stating that, at a particular point in time, the form of statement of affairs that is attached to the certificate was the approved form for section 6A of the Act. (2) The document or copy: (a) is proof, in the absence of evidence to the contrary, of information that is stated in it; and (b) may be tendered in evidence without further proof. [reg 11.01B insrt SLI 195 of 2010 reg 3 and Sch 1[20], opn 1 Aug 2010]

[88,645] Modifications of the Act — administration of estates of deceased persons 11.02 For the purposes of subsections 248(1) and (3) of the Act, the provisions specified in Schedule 7 are modified in accordance with that Schedule in relation to proceedings under Part XI of the Act and the administration of estates under that Part.

PART 12 — UNCLAIMED DIVIDENDS OR MONEYS

[88,795] Statement where moneys are paid to the Commonwealth 12.01 (1) Where a trustee pays moneys, under subsection 254(2) of the Act, to the Commonwealth, he or she must, at the time of payment, give to the officer to whom the moneys are paid a statement setting out the name and address of: (a) the trustee; and

the relevant bankrupt, debtor or (subject to subregulation (2)) (b) deceased person, as the case requires; and (c) each person who, so far as the trustee is aware, is entitled to the moneys or any part of the moneys. [subreg (1) am SLI 218 of 2005 reg 3 and Sch 1, opn 8 Oct 2005]

[page 854] (2) For the purposes of paragraph (1)(b), where the relevant person is a deceased person, the address to be stated is that person’s address at the date of his or her death. (3) Where the Official Trustee or Official Receiver, or a registered trustee, pays moneys, under subsection 254(2A) of the Act, to the Commonwealth, that person must, at the time of payment give to the officer to whom the moneys are paid a statement setting out the name and address of: (a) the trustee; and (b) each person who, so far as the Official Trustee, Official Receiver or registered trustee is aware, is entitled to the moneys or any part of the moneys. [subreg (3) am SR 278 of 1996 reg 7; SLI 218 of 2005 reg 3 and Sch 1, opn 8 Oct 2005]

(4) A registered trustee who gives a statement to an officer in accordance with subregulation (1) or (3) must, within 7 days, give a copy of the statement to the Official Receiver. [subreg (4) am SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

(5) An offence against subregulation (4) is an offence of strict liability. Penalty: 1 penalty unit Note: For strict liability, see section 6.1 of the Criminal Code. [subreg (5) insrt SR 262 of 2001 reg 3 and Sch 1, opn 5 Oct 2001]

PART 13 — NATIONAL PERSONAL INSOLVENCY INDEX DIVISION 1 — PRELIMINARY

[88,945] Interpretation

13.01 In this Part: BIOS means the electronic database, known as the Bankruptcy Index Online System, maintained before the commencement date by Registrars in Bankruptcy.

[88,950] Establishment and maintenance of the National Personal Insolvency Index 13.02 (1) For the purposes of the definition of National Personal Insolvency Index in subsection 5(1) of the Act, there is established an electronic index to be known as the National Personal Insolvency Index. (2) The Inspector-General has responsibility for the operation of the Index. (3) Each Official Receiver is to maintain the Index on behalf of the Inspector-General.

DIVISION 2 — INFORMATION TO BE ENTERED ON THE INDEX

[89,000] What information is to be entered on the Index? 13.03 (1) Subject to this regulation, the following information is to be entered on the Index: (a) in respect of each creditor’s petition bankruptcy, debt agreement under Part IX of the Act, personal insolvency agreement, administration under Part XI of the Act or order under section 253E of the Act, occurring or made on or after the commencement date — information of the kind specified in Schedule 8, to the extent applicable; (b) the information on BIOS in respect of bankruptcies (including completed bankruptcies); [page 855]

in respect of each registered trustee or controlling trustee (other (c) than the Official Trustee): (i) the trustee’s full name, and any alias; (ii) the trustee’s business address including, where applicable the postal address and telephone number; (iii) a statement or summary of any conditions applying to the person’s entitlement to practise as a registered trustee; (iv) the date on which details in respect of the trustee are entered on the Index; (v) the date (if any) of termination of the trustee’s registration as a trustee; (d) in respect of each applicant for registration as a trustee: (i) the applicant’s full name, and any alias; (ii) the applicant’s business address (or, if none, his or her residential address); (iii) the applicant’s occupation; (iv) the date on which details in respect of the applicant are entered on the Index; (e) in respect of each debtor specified in subregulation (3): (i) the debtor’s full name, and any alias; (ii) the debtor’s address; (iii) the debtor’s occupation (if any); (iv) the date on which details in respect of the debtor are entered on the Index; (f) information that, under these Regulations, the Official Receiver: (i) receives for entry on the Index; or (ii) is required to enter on the Index; (g) information concerning a creditor’s petition (including details of any orders made in relation to the petition, or the withdrawal of the petition). [subreg (1) am SR 76 of 1997 reg 20; SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

(1A) In relation to a matter mentioned in paragraph (1)(a), a document described in an item in Schedule 8 must be given to the Official Receiver by the person mentioned in column 4 of the item within the period mentioned in

column 5 of the item. [subreg (1A) insrt SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

(1B) Item 13 of Schedule 8 applies in relation only to a bankruptcy dated 4 May 2003 or earlier. [subreg (1B) insrt SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

(2) Paragraph (1)(a) is taken to apply also to bankruptcies that: (a) occurred before the commencement date; and (b) were not completed before the commencement date. (3) For the purposes of paragraph (1)(e), the following debtors are specified: (a) a debtor whose property is subject, by reason of a direction of the Court under paragraph 50(1)(a) of the Act, to the control of the Official Trustee or a registered trustee; (b) a debtor who signed an authority under subsection 188(1) of the Act; (c) subject to subregulation (5), in the case of a deceased debtor — where a petition for an order for the administration of the debtor’s estate has been presented under Part XI of the Act; (d) a debtor who has applied to the Court under subsection 253E(1) of the Act for an order staying all or any proceedings under a petition. (4) In the application of paragraph (3)(c) (concerning certain deceased debtors) to paragraph (1)(e), the information to be entered is the information that applied in respect of the debtor immediately before his or her death. [page 856] (5) Subregulation (1) applies subject to: (a) any decision of the Inspector-General under paragraph 13.04(3)(a); and (b) any order or direction of the Administrative Appeals Tribunal on an application under regulation 13.05. (6) If an entry on the Index contains information that is, in the opinion of the Official Receiver, in any particular:

(a) contrary to, or inconsistent with, a decision, order or direction of a kind mentioned in subregulation (5); or (b) out of date, inaccurate or misleading; the Official Receiver must correct the entry without delay. [subreg (6) am SR 76 of 1997 reg 20]

[89,005] Application for certain information not to be on the Index 13.04 (1) Subject to subregulation (4), a person who is a debtor or bankrupt may apply in writing to the Inspector-General for information in respect of the person: (a) not to be entered on the Index, on the ground that the entry of the information would jeopardise, or be likely to jeopardise, the person’s safety; or (b) on the Index to be removed on the ground that: (i) its inclusion jeopardises, or is likely to jeopardise, the person’s safety; or (ii) it is inaccurate or misleading; or (c) on the Index to be corrected on the ground that it is inaccurate or misleading. [subreg (1) am SR 278 of 1996 reg 8] Note: Under subregulation (4), an application cannot be made for the removal of information in respect of a person’s name or date of birth.

(2) The application must specify the ground relied and contain, or have with it, full particulars in support of the ground. Example:: A person may rely on a court order (such as a domestic violence order) to show that publication of the information in question would jeopardise, or be likely to jeopardise, the person’s safety.

(3) The Inspector-General must, without delay: (a) decide an application; and (b) give notice in writing to the applicant of: (i) the decision and the reasons for it; and (ii) the applicant’s right, if aggrieved by the decision, to apply under regulation 13.05 to the Administrative Appeals Tribunal

for review of the decision. (4) An application or a decision must not be made under this regulation to remove from the Index any of the following items of information in respect of a person: (a) the person’s name; (b) the person’s date of birth.

[89,010] Application to the AAT 13.05 A person who made an application under subregulation 13.04(1) and who is aggrieved by a decision under paragraph 13.04(3)(a) in respect of the application may apply to the Administrative Appeals Tribunal for review of the decision.

DIVISION 3 — MISCELLANEOUS

[89,060] Inspection of the Index 13.06 (1) A person may, by application in writing, ask an Official Receiver to inspect material in the Index and give an extract of material specified in the application. [page 857] (2) On receipt of an application, the Official Receiver: (a) if the fee determined under the Fees and Remuneration Determination is paid — must inspect the Index and, within 14 days of receiving the application: (i) give the requested extract to the applicant; or (ii) tell the applicant, in writing, that the requested extract is not entered in the Index; or (b) may give the applicant a list of Index search agents who may be able to inspect material entered in the Index for the applicant. [subreg (2) am SLI 195 of 2010 reg 3 and Sch 1[21], opn 1 Aug 2010]

(3) A person who has been granted access to the Index by the Inspector

General may, after paying the fee determined under the Fees and Remuneration Determination: (a) inspect material entered in the Index; or (b) obtain an extract of material entered in the Index. Example: for paragraph (b) Making notes of information shown on a computer screen, or obtaining a print out of information stored electronically. [subreg (3) am SLI 195 of 2010 reg 3 and Sch 1[22], opn 1 Aug 2010]

(4) However, prior payment is not required under subregulation (3) if the person has an alternative arrangement with the Inspector General about the method of payment. Example: An arrangement for payment by bulk billing.

(5) The Inspector General may specify conditions that apply to: (a) the use of information entered in the Index; and (b) the use of an extract of material entered in the Index. Note Under regulation 13.09, the Inspector General has control of access to the Index. [reg 13.06 subst SLI 137 of 2006 reg 3 and Sch 1[4], opn 1 July 2006]

[89,065] Copy of extract to be evidence 13.07 (1) In any proceedings, a document or copy of a document that qualifies under subregulation (2): (a) is proof, in the absence of evidence to the contrary, of information on the Index that is stated in it; and (b) may be tendered in evidence without further proof. [subreg (1) am SR 76 of 1997 reg 22]

(2) A document or copy qualifies if it: (a) purports (irrespective of the form of wording used) to be an extract of information on the Index; and (b) does not appear to the Court to have been revised or tampered with in a way that affects, or is likely to affect, the information. [subreg (2) am SR 76 of 1997 reg 22]

[89,070] Immunity from defamation

13.08 (1) The Inspector-General, and any officer acting at the direction or with the authority of the Inspector-General, have immunity from actions for defamation arising out of publication of material in the Index or publication of extracts of material from the Index. [page 858] (2) An officer has immunity from actions for defamation arising out of publication of material in the Index or publication of extracts of material from the Index, if the publication was done: (a) by an officer acting in the course of his or her duty; and (b) in good faith. (3) A person who provides material for entry in the Index has immunity from actions for defamation arising out of publication of the material by way of providing it for such inclusion, publication of the material in the Index or publication of extracts of the material from the Index, if the publication was done: (a) in the performance of a function or duty under these Regulations or any other law of the Commonwealth; and (b) in good faith. (4) Nothing in subregulation (2) or (3) affects by implication the generality of subregulation (1). (5) The immunity of the Inspector-General or another officer under this regulation arising out of publication of material extends to the Commonwealth and the Official Trustee to the extent that the Commonwealth or the Official Trustee would, apart from this subregulation, be liable in respect of the publication. (6) Nothing in this regulation affects by implication any other ground of defence.

[89,075] Access to the Index 13.09 The Inspector-General has control of access to the Index.

[89,080] Information extracted from the Index to be evidence 13.10 Information extracted from the Index is evidence, in the absence of proof to the contrary, of the truth of the information.

[89,085] Inspector-General may provide information from the Index 13.11 [reg 13.11 rep SLI 137 of 2006 reg 3 and Sch 1[5], opn 1 July 2006]

PART 14 — OFFENCES UNDER THE ACT DIVISION 1 — OFFENCES [Heading am SLI 287 of 2010 reg 3 and Sch 1[9], opn 1 Dec 2010]

[89,230] Apprehension under a warrant — notification to Registrar in certain cases 14.01 (1) This regulation applies where: (a) a warrant issued under subsection 264B(1) of the Act for the apprehension of a person is executed; and (b) the person executing the warrant considers that it is impracticable to bring the apprehended person forthwith before the Court, a Registrar or a magistrate. (2) Where this regulation applies, the person executing the warrant must immediately notify a Registrar of the apprehension and of the date and time when the person considers that it will be practicable to bring the apprehended person before the Court, a Registrar or a magistrate. [page 859]

[89,235] Registrar to act on notification; direction to

person executing warrant 14.02 (1) Where a Registrar receives a notification under subregulation 14.01(2), he or she must, without delay: (a) fix a date, time and place for the apprehended person to be brought before the Court, a Registrar or a magistrate; and (b) direct the person who gave the notification to bring the apprehended person before the Court, a Registrar or a magistrate accordingly. (2) The time and date fixed under paragraph (1)(a) must be the earliest that, in the Registrar’s opinion, are practicable. (3) A person to whom a direction is given under paragraph (1)(b) must comply with it.

DIVISION 2 — INFRINGEMENT NOTICES [Div 2 insrt SLI 287 of 2010 reg 3 and Sch 1[10], opn 1 Dec 2010]

[89,240] Purpose and effect of Division 14.03 (1) For section 277B of the Act, this Division establishes an infringement notice scheme, as an alternative to prosecution, for infringement notice offences. (2) This Division does not: (a) require an infringement notice to be issued to a person for an infringement notice offence; or (b) affect the liability of a person to be prosecuted for an infringement notice offence if an infringement notice is not issued to the person for the offence; or (c) prevent the issue of 2 or more infringement notices to a person for an infringement notice offence; or (d) affect the liability of a person to be prosecuted for an infringement notice offence if the person does not comply with an infringement notice for the offence; or (e) limit or otherwise affect the penalty that may be imposed by a court on a person convicted of an infringement notice offence.

[89,245] Definitions 14.04 In this Division: infringement notice means an infringement notice served under regulation 14.05. infringement notice offence means an offence mentioned in the table in subsection 277B(2) of the Act. infringement penalty, for an infringement notice offence, means the penalty for the offence mentioned in the table in subsection 277B(2) of the Act.

[89,250] When infringement notices can be issued 14.05 If the Inspector-General has reasonable grounds to believe that a person has committed an infringement notice offence, the Inspector-General may, within 12 months after the alleged commission of the offence, issue the person with an infringement notice for the offence.

[89,255] Contents of infringement notice 14.06 (1) An infringement notice must: (a) be identified by a unique number; and [page 860] (b) state that the notice is issued under these Regulations; and (c) state the name of the person who issued the notice and how the person may be contacted; and (d) be signed by the person who issued the notice; and (e) state the name and address of the person to whom it is issued; and (f) set out brief details of the offence the person is alleged to have committed, including: (i) the infringement notice offence that was allegedly contravened; and (ii) the maximum penalty that may be imposed by a court for the

offence; and (g) state the amount of the infringement penalty that is payable under the notice; and (h) state how and where the infringement penalty can be paid, including: (i) the period in which the penalty may be paid; and (ii) if the penalty can be paid by posting the payment — the place to which it should be posted; and (i) state that if the person pays the infringement penalty in time: (i) any liability of the person for the offence is discharged; and (ii) a prosecution of the offence may not be brought against the person; and (iii) the person is not regarded as having admitted guilt or liability for the offence; and (iv) the person is not regarded as having been convicted of the offence; and (j) state that the person may apply to the Inspector-General for an extension of time in which to pay the infringement penalty; and (k) set out how the notice may be withdrawn; and (l) state that if the notice is withdrawn: (i) any amount of penalty paid under the notice must be refunded to the person; and (ii) the person may be prosecuted in a court for the offence; and (m) state that the person may apply in writing to the Inspector-General requesting the withdrawal of the notice. (2) An infringement notice may contain any other information that the Inspector-General considers necessary.

[89,260] Method of serving infringement notices 14.07 (1) An infringement notice must be served on the person to whom it is issued. (2) An infringement notice may be served on an individual: (a) personally or by post; or

(b) by leaving the notice: (i) at the last-known place of residence or business of the person; and (ii) with a person, apparently over the age of 16 years, who appears to live or work at the place. (3) An infringement notice may be served on a corporation: (a) by leaving it at, or by sending it by post to, the address of the head office, a registered office or a principal office, of the corporation; or (b) by giving it, at an office mentioned in paragraph (a), to someone who is, or who the person serving the notice reasonably believes is, an officer or employee of the corporation. (4) Subject to subregulation (5), an infringement notice may be served on a registered trustee or a registered debt agreement administrator by sending it by electronic communication to the trustee’s or administrator’s business email address. [page 861] (5) An infringement notice must not be sent by electronic communication unless the Inspector-General believes, on reasonable grounds, that the registered trustee or a registered debt agreement administrator will access the email account to which the notice is sent.

[89,265] Time for payment of infringement penalty 14.08 The penalty specified in an infringement notice must be paid: (a) within 28 days after the day the notice is served on the person to whom it is issued; or (b) if the person applies for an extension of time in which to pay the infringement penalty and that application is granted — within the extension period allowed; or (c) if the person applies for an extension of time in which to pay the infringement penalty and the application is refused — before the

end of the later of: (i) 7 days after day the notice of the refusal is served on the person; and (ii) 28 days after the day the infringement notice is served on the person; or (d) if the person applies for the notice to be withdrawn and the application is refused — within 28 days after the day the notice of the refusal is served on the person.

[89,270] Extension of time to pay infringement penalty 14.09 (1) A person served with an infringement notice may apply, in writing, to the Inspector-General for an extension of time of up to 28 days in which to pay the infringement penalty specified in the notice. (2) If the application is made after the end of the 28 day period specified in the notice for payment of the infringement penalty, the application must include a statement explaining why the person could not deal with the notice within that period. (3) Within 14 days after receiving the application, the Inspector-General must: (a) grant, or refuse to grant, an extension of time to pay the infringement penalty; and (b) notify the person in writing of the decision, and, if the decision is a refusal, the reasons for the decision. (4) Notice of the decision may be served on the person in any way in which the infringement notice could have been served on the person.

[89,275] Withdrawal of infringement notice 14.10 (1) Before the end of 28 days after receiving an infringement notice, a person may apply, in writing, to the Inspector-General for the infringement notice to be withdrawn. (2) Within 14 days after receiving the application, the Inspector-General must:

(a) withdraw, or refuse to withdraw, the notice; and (b) notify the person in writing of the decision, and, if the decision is a refusal, the reasons for the decision. (3) Before withdrawing, or refusing to withdraw, a notice, the InspectorGeneral must consider: (a) the circumstances of the offence stated in the notice; and (b) whether there are exceptional circumstances to justify the withdrawal; and (c) any other relevant matter. (4) The Inspector-General may also withdraw an infringement notice without an application having been made if he or she believes it is appropriate to do so in all the circumstances of the particular case. [page 862]

[89,280] Notice of withdrawal of infringement notices 14.11 (1) Notice of the withdrawal of an infringement notice may be served on a person in any way in which the infringement notice could have been served on the person. (2) A notice withdrawing an infringement notice served on a person for an offence: (a) must include the following information: (i) the name and address of the person; (ii) the number of the infringement notice; (iii) the date of issue of the infringement notice; and (b) must state that the notice is withdrawn; and (c) if it is proposed that a prosecution be brought against the person for the offence — must state that the person may be prosecuted in a court for the offence.

[89,285] Refund of infringement penalty

14.12 If an infringement notice is withdrawn after the infringement penalty specified in it has been paid, the Inspector-General must refund the amount of the penalty to the person who paid it.

[89,290] Effect of payment of infringement penalty 14.13 If a person served with an infringement notice pays the infringement penalty specified in the notice within the period specified in the notice (or any further period of time allowed under regulation 14.09): (a) any liability of the person for the offence is discharged; and (b) a prosecution of the offence may not be brought against the person for the offence; and (c) the person is not regarded as having admitted guilt or liability for the offence; and (d) the person is not regarded as having been convicted of the offence.

[89,295] Payment of infringement penalty — cheques 14.14 If a person pays an infringement penalty by cheque, payment is not taken to have been made until the cheque has been honoured on presentation.

[89,300] Evidentiary certificates 14.15 (1) The Inspector-General may sign a certificate that states any of the following in relation to an infringement notice served on a person: (a) that the infringement penalty specified in the infringement notice was not paid by the person within the time specified in the notice; (b) that the Inspector-General granted, or refused to grant, an extension of time to the person to pay the infringement penalty; (c) that the infringement penalty was not paid by the person within the period specified in the extension; (d) that the infringement notice was withdrawn under regulation 14.10 on a day specified in the certificate. (2) At a hearing of a prosecution for an offence mentioned in an infringement notice, a certificate signed by the Inspector-General in

accordance with subregulation (1) is evidence of the matters specified in the certificate. [page 863] (3) A certificate that purports to be signed by the Inspector-General is taken to have been signed by the Inspector-General unless the contrary is proved.

PART 15 — REGISTRATION OF REGISTERED TRUSTEES [Repealed] [Pt 15 rep SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

PART 15A — PROVISIONS RELATING TO THE BANKRUPTCY CHARGES ACTS

[89,680] Interpretation 15A.01 (1) In this Part: charge means an interest charge, a realisations charge or a registration charge; charge period has the same meaning as in the Estate Charges Act; penalty means a late payment penalty. trustee includes a debt agreement administrator. [def insrt SLI 138 of 2007 reg 3 and Sch 2[8], opn 1 July 2007]

(2) An expression defined for Part XV of the Act has the same meaning in this Part. [reg 15A.01 insrt SR 76 of 1997 reg 26]

[89,685] Mode of payment 15A.02 An amount of charge or penalty may be paid to the InspectorGeneral: (a) in cash; or

(b) by cheque; or (c) by any other means (for example, by direct debit or electronic transfer) that the Inspector-General approves in writing. [reg 15A.02 insrt SR 76 of 1997 reg 26]

[89,690] Overpayments to be refunded or offset 15A.03 The amount of an overpayment by a trustee of a charge or penalty may be: (a) refunded to the trustee; or (b) unless the trustee, by notice in writing to the Inspector-General, directs otherwise — offset against an amount of charge or penalty payable by the trustee. [reg 15A.03 insrt SR 76 of 1997 reg 26]

[89,695] Information to accompany payment of interest charge 15A.04 (1) A payment of interest charge by a trustee must have with it, in the approved form, any information required by the approved form. (2) Where a payment of interest charge is made by or on behalf of a trustee by non-physical means (for example, by direct debit or electronic transfer), the trustee must without delay give the Inspector-General that information. (3) This regulation does not aply to the Official Trustee. [reg 15A.04 insrt SR 76 of 1997 reg 26]

[89,700] Information to accompany payment of realisations charge 15A.05 (1) A payment of realisations charge by a trustee must have with it, in the approved form, any information required by the approved form. [page 864] (2) Where a payment of realisations charge is made by or on behalf of a

trustee by non-physical means (for example, by direct debit or electronic transfer), the trustee must without delay give the Inspector-General that information. (3) This regulation does not apply to the Official Trustee. [reg 15A.05 insrt SR 76 of 1997 reg 26]

[89,705] Information to accompany payment under regulation 16.14 15A.06 [reg 15A.06 rep SLI 137 of 2006 reg 3 and Sch 1[5], opn 1 July 2006]

[89,710] Lodgment of request for remission 15A.07 A request by a trustee for remission of a charge or penalty must be in writing and lodged with an Official Receiver. [reg 15A.07 insrt SR 76 of 1997 reg 26; am SLI 287 of 2010 reg 3 and Sch 1[11], opn 1 Dec 2010]

PART 16 — MISCELLANEOUS DIVISION 1 — PROVISIONS CONCERNING DOCUMENTS (INCLUDING INVENTORIES)

[89,760] Service of documents 16.01 (1) Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on, a person (other than a person mentioned in regulation 16.02), the document may be: (a) sent by post, or by a courier service, to the person at his or her lastknown address; or (b) left, in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility; or (c) left, in an envelope or similar packaging marked with the person’s name, at the last-known address of the person; or (d) personally delivered to the person; or (e) sent by facsimile transmission or another mode of electronic transmission: (i) to a facility maintained by the person for receipt of electronically transmitted documents; or (ii) in such a manner (for example, by electronic mail) that the document should, in the ordinary course of events, be received by the person. (2) A document given or sent to, or served on, a person in accordance with subregulation (1) is taken, in the absence of proof to the contrary, to have been received by, or served on, the person: (a) in the case of service in accordance with paragraph (1)(a) or (b) — when the document would, in the due course of post or business practice, as the case requires, be delivered to the person’s address or document exchange facility; and

in the case of service in accordance with paragraph (1)(c), (d) or (e) (b) — when the document is left, delivered or transmitted, as the case requires. REGULATION 16.01 GENERALLY [89,760.5] Service on Sunday The influence of legislation on the civil process of the courts is discussed in Report 37 (1983) Community Law Reform Program Third Report: Service of Civil Process on Sunday of the Law Reform Commission of New South Wales. It is available at [page 865] www.lawlink.nsw.gov.au/lrc.nsf/pages/R37CHP2. What, then, are the requirements, particularly in those jurisdictions in which the Sunday Observance Act 1677 (Imp) is in force in whole or in part? It is accepted that service on corporations is possible on Sunday, among other things, because a corporation has no soul to be imperilled (Rolloswin Investments v Chromolit Portugal Cutelarias E Produtos Metálicos SARL [1970] 2 All ER 673; [1970] 1 WLR 912 held that the Act did not apply to corporations because they were incapable of attending divine service, lacking a soul to be saved, and accordingly a corporation could be validly served with process on a Sunday). However, service of bankruptcy notices is invariably upon individuals, with, one presumes, souls, hence the need to consider the applicability of the legislation. The operative part of the 1677 Act is: Service of process on the Lords day (exception) void 6 Persons serving the same liable to action — Provided also that no person or persons upon the Lords day shall serve or execute or cause to be served or executed any writt, processes warrant, order judgment or decree (except in cases of treason felony or breach of the peace) but that the service of every such writt, processes warrant, order judgment or decree shall be void to all intents and purposes whatsoever and the person or persons soe serveing or executeing the same shall be as lyable to the suite of the partie grieved and to answere damages to him for doeing thereof as if he or they had done the same without any writt, processe warrant order judgment or decree at all.” McGregor J in Re Hopper; Ex parte Esanda Ltd (1980) 43 FLR 452 held that, first, the decision in Re Copley; Ex parte Sundell (1964) 20 ABC 229, which held that the Act did apply, was distinguishable, having dealt with repealed legislation; and second, that the present legislation, the Federal Court Rules, do not forbid the service of a bankruptcy notice on Sunday. The same argument is applicable to these Regulations and they are, to use his Honour’s words, “comprehensive, deal fully with service and do not admit, in the sense that the former rule 7 implied, that there has been any lack of provision on any subject which is then to be found elsewhere. The failure to reproduce rule 7 in the Bankruptcy Rules further assists the view that it was not intended that recourse should be had to other legislation in fixing procedures which might anyway vary from State to State”. [89,760.9] Sent by post, or by a courier service Hacker v The Owners – Strata Plan No 17572 [2005] FCA 1936; BC200511705 deals with the words of subsection 1(a) at [36] as it relates to “courier service”. [89,760.9A] “last known address” Magafas v Carantinos (2008) 222 FLR 185; [2008] FMCA 1654; BC200811160 is the first case to deal directly with the expression “last known address” as used in the Bankruptcy Regulations. At [15], Raphael FM stated:

The phrase ‘last known’ necessary implies a temporal constituent. But who is to be the recipient of this intelligence? It is to be the world at large or the creditor? I cannot see that it should be the creditor. There is no time limit upon when a bankruptcy notice may be taken out based upon a judgment other than that the judgment itself must not be stale. A debtor who has not heard from his creditor for several years is under no obligation to keep him appraised of his current address. It would hardly be good service to place a bankruptcy notice in an envelope addressed to an individual at a house which not only he has left but even the tenants or owners who came after him had left just because that particular house was the one last known to the creditor who had taken no further steps to discover if his debtor had since moved. Using the phrase ‘the last known address’ to the world at large would include the last known address that a debtor might reasonably discover. Another instance is DM Developments v Driscoll [2011] FMCA 464; BC201104633 where the court expressed itself as follows: [43] In this instance there was evidence demonstrating that there had been some intervening conduct. That is the redirection of the postal article which occurred on 22 December. Irrespective of whether the debtor knew the article awaiting collection was a bankruptcy notice or otherwise, [page 866] the fact remains that once he became aware that an article was awaiting his collection he would, in my view, ordinarily have been subject to the presumption that arises under regulation 16.01(2)(a). Returning to Magafas, the learned Magistrate applied many of the cases that are referred to in [89,760.10] and [89,760.15]. The learned Magistrate next considered whether there was “other sufficient cause” under s 52. At [25], Raphael FM made the following conclusions in relation to the undertaking given by a solicitor: In considering whether the undertaking was by the plaintiff’s solicitor personally or in his capacity as agent, it may be relevant to consider whether the recipient of the undertaking could reasonably construe the undertaking as having been given personally. I am of the view that this undertaking was requested of and given by the solicitor as agent for the client. As such I have already found it to be a gratuitous gesture of no significance. It cannot reach the height of an ‘other sufficient cause’ under s 52. Thus there is no impediment to my making the sequestration order. At [26], the learned Magistrate noted that the debtor had not alleged solvency and that the evidence in the case indicated that he was seriously indebted to the partnership whatever his other debts might be. He was satisfied that the debtor had committed the act of bankruptcy alleged in the petition and he was also satisfied with the proof of the other matters required by s 52. It should be noted that in Nunn v Citigroup Pty Ltd [2012] FCA 476; BC201202843 held that the correction of an affidavit of service did not necessitate reservice. [89,760.10] Left at place of business of debtor’s company See [84,730.10] above. Skalkos v T & S Recoveries Pty Ltd (2005) 213 ALR 311; [2004] FCAFC 321; BC200408717 dealt with an appeal where the court of first instance, in T & S Recoveries Pty Ltd v Skalkos [2004] FCA 816; BC200403848 at [35], had determined: “[Service] of the bankruptcy notice was effected in accordance with reg 16.01(1) of the Regulations. No evidence of non-receipt having been offered, it is appropriate to find, pursuant to reg 16.01(2), that the bankruptcy notice was served on the date upon which, in the due course of post, it would have been

delivered to the Alexandria address. If the document was posted on 4 April 2003, that date would be not later than 11 April 2003. As the stipulated time for compliance was 21 days after service of the bankruptcy notice, Mr Skalkos committed an act of bankruptcy on 3 May 2003 by failing to comply with the notice by that day.” Sundberg, Finkelstein and Hely JJ cited Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; 48 ALR 1 where, dealing with similar provisions in the Acts Interpretation Act 1954 (Qld), the court had said (CLR at 95; ALR at 7): “In the present case, the notices were not returned undelivered and there was no other circumstance which suggested that they did not reach their destination. Hence under s 39(1)(b) [of the Acts Interpretation Act 1954] service is deemed to have been effected at the time when the notices would have been delivered in the ordinary course of the post.” The Full Court in Skalkos v T & S Recoveries Pty Ltd, above also noticed a line of authority commencing with R v County of London Quarter Sessions Appeals Committee; Ex parte Rossi [1956] 1 QB 682; [1956] 1 All ER 670 which held that proof of non-delivery was as effective as proof of nonservice but that in the absence of either, service was established under similar statutory provisions. Similar principles were applied in Re Rustic Homes Pty Ltd (1988) 49 SASR 41; 13 ACLR 105; Re Ocean Distributors Pty Ltd (1990) 2 ACSR 486; 8 ACLC 953; Deputy Cmr of Taxation v Coco (2003) 52 ATR 700; 179 FLR 362; Deputy Cmr of Taxation v Gruber (1998) 43 NSWLR 271; 143 FLR 432; Repatriation Commission v Gordon (1990) 26 FCR 569; 100 ALR 255; Perpetual Nominees Ltd v Masri Apartments Pty Ltd (2004) 183 FLR 142; 49 ACSR 714 at 718 and Murphy v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 135 FCR 550; [2004] FCA 657; BC200402935. The effect of Fancourt and Skalkos is to permit service of a bankruptcy notice to be done by having it sent by post or by a courier service to the person at his or her last known address, and service is deemed to have occurred unless the person to whom it was sent can prove that it was not delivered. The test is not receipt but rather posting and delivery. In that [page 867] respect the respondent’s point is that because he had no mailbox, Australia Post would not have delivered the mail to him. See Mbuzi v Favell (No 2) [2012] FCA 311; BC201201685 at [11] per Collier J. The return of undelivered notices is referred to in Conrad v Owners of Strata Plan No 2795 [2011] FMCA 389; BC201103515 and De Robillard v Carver (2007) 159 FCR 38; 240 ALR 675; [2007] FCAFC 73; BC200704121 per Buchanan J (with Moore and Conti JJ agreeing) at [67]–[68]: [67] First, it is appropriate in principle to require strict proof. Before the introduction of reg 16.01 bankruptcy notices were required to be served personally unless an order for substituted service was made. The requirements for service were strictly enforced (Re Ditfort; Ex parte DCT (NSW) (1988) 19 FCR 347 per Gummow J at 358). For example, in Clyne v DCT (No 4) (1982) 42 ALR 703, Lockhart J set aside a bankruptcy notice served by post because, although by order of the court service was deemed effective 14 days after posting and compliance was required 28 days after due service, the alleged debtor could not know when posting had in fact occurred and therefore could not reliably calculate the time for compliance. Although the introduction of reg 16.01 has removed the need for personal or substituted service, a strict approach to satisfaction of the elements of service remains appropriate. [68] Secondly, although reg 16.01(2) casts upon the appellant the burden of displacing a presumption as to time of service, as I earlier pointed out that onus does not arise until, first, proof of delivery in the due course of business practice is available. If there is no proof of that fact then

proof of the chain of delivery simply breaks down inconclusively. [89,760.15] Left at last known address — reg 16.01(1)(c) Skalkos v T & S Recoveries Pty Ltd (2005) 213 ALR 311; [2004] FCAFC 321; BC200408717 is also authority for the construction of reg 16.01(1). A last-known address was not confined to a residential address, and the court came to that conclusion by applying Robertson v Banham & Co [1997] 1 All ER 79; [1997] 1 WLR 446; R v Braithwaite [1918] 2 KB 319; [1918–19] All ER Rep 1145; Morecombe and Heysham Borough v Warwick (1958) 9 P&CR 307; Stylo Shoes Ltd v Prices Tailors Ltd [1960] Ch 396; [1959] 3 All ER 901; Price v West London Investment Building Society [1964] 2 All ER 318; [1964] 1 WLR 616 and Drake v Stanton [1999] FCA 1635; BC9907684 at [5] where Tamberlin J in considering reg 16.01(1)(c) said: The references to “usual place of abode”, of course, and to “resides”, refer to the residential address of Mr Stanton. That is not the expression which is used in the relevant provision … The relevant expression is “the last-known address of the person” and it does not matter whether the debtor currently lives or resides there or not. Raphael FM, in Magafas v Carantinos (2008) 222 FLR 185; [2008] FMCA 1654; BC200811160 at [12], made the point that the regulation does not require that it is shown that the notice came into the hands of the debtor. He noted that it was held in CSR Limited trading as CSR Construction Materials v Antonio Barillaro (2001) 184 ALR 308; [2001] FMCA 23, approved in Skalkos v T & S Recoveries Pty Limited (2004) 141 FCR 107; 213 ALR 311; [2004] FCAFC 321; BC200408717, that this regulation applies to bankruptcy notices. Deputy Cmr of Taxation v Gadaleta (1999) 42 ATR 414; [1999] FCA 923; BC9905294 is a case where Einfeld J addressed what was by then the newly operating reg 16.01(1) in relation to a bankruptcy notice, where personal service has not been effected. His Honour emphasised the continuing need for close attention to the circumstances of any purported service of a bankruptcy notice, implicitly by the following findings which he made in that case: [5] There is other evidence that strongly supports a conclusion that he lives at that address or at least has extensive connections with it … [13] I am satisfied that Mr Gadaleta lives at or has a close connection with the address at Avalon at which, on 23 July 1998, the bankruptcy notice was left with a female person, and that that form of service complies with reg 16.01(1)(c) of the Bankruptcy Regulations … The judgment of Raphael FM in Magafas v Carantinos (2008) 222 FLR 185; [2008] FMCA 1654 provides a useful consolidation of the relevant cases and considers the phrase “last known address”. [page 868] His Honour noted at [14], referring to Skalkos, above, and its predecessors, that the phrase does not require residence, but rather a degree of connection with the premises. Nonetheless De Robillard v Carver (2007) 159 FCR 38; 240 ALR 675; [2007] FCAFC 73; BC200704121 per Buchanan J (with Moore and Conti JJ agreeing) at [67]–[68], points out: [67] First, it is appropriate in principle to require strict proof. Before the introduction of reg 16.01 bankruptcy notices were required to be served personally unless an order for substituted service was made. The requirements for service were strictly enforced (Re Ditfort; Ex parte DCT (NSW) (1988) 19 FCR 347 per Gummow J at 358). For example, in Clyne v DCT (No 4) (1982) 42 ALR 703, Lockhart J set aside a bankruptcy notice served by post because, although by order of the court service was deemed effective 14 days after posting and compliance was required 28 days

after due service, the alleged debtor could not know when posting had in fact occurred and therefore could not reliably calculate the time for compliance. Although the introduction of reg 16.01 has removed the need for personal or substituted service, a strict approach to satisfaction of the elements of service remains appropriate. [68] Secondly, although reg 16.01(2) casts upon the appellant the burden of displacing a presumption as to time of service, as I earlier pointed out that onus does not arise until, first, proof of delivery in the due course of business practice is available. If there is no proof of that fact then proof of the chain of delivery simply breaks down inconclusively. This line of authority is supported by the circumstances of Conrad v Owners of Strata Plan No 2795 [2011] FMCA 389; BC201103515. See also the decision of Mbuzi v Favell (No 2) [2012] FCA 311; BC201201685 otherwise set out at [80,970.10.5]. In fact in National Australia Bank Ltd v Elgammal [2014] FCCA 828 Judge Raphael held that Mulherin v Quinn Villages Pty Ltd (2012) 269 FLR 474; [2012] FMCA 1063; BC201209076 at [14] to the extent that that decision gave support to the proposition that, contrary to the proposition contained above that service by leaving a document at the last known address of a party might be effected without an order for substituted service as follows: The language of sub-regulation (e), paragraphs (i) and (ii), is difficult. The disjunctive “or” appears at two important parts of the regulation. The opening sentence of sub-regulation (e) is split by the insertion of the disjunctive “or” as are paragraphs (i) and (ii) of the sub-regulation. Arguably, the first part of the sentence could apply expressly to paragraph (i) and the second part of the sentence to the disjunctive paragraph (ii). Construing the regulation this way would in practical terms address the mischief of ensuring that when electronic means of service are used the mode of such transmission which most closely relates to the physical means by which such transmission will be received is engaged to infer service might come to the attention of the recipient. Was wrongfully decided in that the case “falls into the trap identified by the Full Bench in Sea Sherherd Australia Ltd v Cmr of Taxation (2013) 212 FCR 252; [2013] FCAFC 68; BC201310642 at [4]–[5] where Besanko J said: The applicant referred to examples 11.15, 11.16 and 11.17. The respondent referred to examples 11.14, 11.15 and 11.18. None of these examples provide any real assistance in relation to the ground upon which Gordon J decides this case, and with which I agree. In any event, in the circumstances they constitute a distraction from the task of construction which the Court must undertake. Unless the example matches exactly the facts before the Court (a circumstance which is likely to be very rare) examples should be approached with caution. I say that because of the temptation to reason by analogy from an example to the facts before the Court and in the process to bypass the actual words to be construed by the Court. To make this observation is perhaps to do no more than reiterate the point made generally about the use of extrinsic material by Heydon J in SAEED v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 at 277–278 [74].

____________________ [page 869]

[89,765] Documents for the Inspector-General, the Official Receiver or the Official Trustee 16.02 (1) Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or filed or lodged with, the Inspector-General, the Official Receiver or the Official Trustee, the document must: (a) be posted to, or delivered at: (i) in the case of a document for the Inspector-General — the office of the Inspector-General; or (ii) in the case of a document for the Official Receiver or the Official Trustee — the office of the Official Receiver; or (b) sent by facsimile transmission: (i) in the case of a document for the Inspector-General — to a facility maintained by the Inspector-General for receipt of facsimile transmissions; or (ii) in the case of a document for the Official Receiver or the Official Trustee — to a facility maintained by the Official Receiver for receipt of facsimile transmissions; or (c) sent by another mode of electronic transmission (for example, by electronic mail): (i) in the case of a document for the Inspector-General — to the office of the Inspector-General; or (ii) in the case of a document for the Official Receiver or the Official Trustee — to the office of the Official Receiver. [subreg (1) am SR 76 of 1997 reg 27]

(2) Where subregulation (1) applies, the document is taken to be received, filed or lodged only when the document (or, where applicable, a copy of it) is actually received by, or on behalf of, the Inspector-General or the Official Receiver (as the case requires).

[89,770] Inventory by trustee taking possession of, or attaching, property 16.03 Where, under the Act, a trustee takes possession of, or attaches, the

property of a bankrupt, debtor or deceased person, the trustee must, as soon as is reasonably practicable: (a) make, sign and date an inventory of the property; and (b) give a copy of the inventory to any person who has custody of the property or part of the property.

[89,775] Document filed by Inspector-General or Official Receiver — fee not payable 16.03A A fee is not payable by the Inspector-General or the Official Receiver in respect of an application to, or the filing of a document in, the Court. [reg 16.03A (formerly reg 16.05) renum SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

DIVISION 2 — MATTERS RELEVANT TO FEES [Div 2 am SLI 137 of 2006 reg 3 and Sch 1[6], opn 1 July 2006; SLI 195 of 2010 reg 3 and Sch 1[23], opn 1 Aug 2010] Note Divisions 2 and 3 of Part 16 of the Regulations formerly provided for the fees in relation to the Act (including remuneration of the Official Trustee). As a result of the amendment of the Act by the Bankruptcy Legislation Amendment (Fees and Charges) Act 2006, the remuneration of the Official Trustee and fees in relation to the Act are now set out in the Fees and Remuneration Determination.

[page 870]

[89,830] Payment of fees 16.06 (1) If a fee is payable in respect of: (a) the making of a request or an application to an Official Receiver; or (b) the presentation or lodgment of a document with an Official Receiver; the request, application or document must not be dealt with unless the fee has been paid. (2) If a fee is payable in respect of the doing of a matter or thing by an Official Receiver, the matter or thing must not be done unless the fee has been paid.

(3) However, prior payment of a fee is not required under subregulation (1) or (2) if the person has an alternative arrangement with the Inspector General about the method of payment. Example: An arrangement under which fees payable by a registered trustee are paid monthly in arrears. [reg 16.06 subst SLI 137 of 2006 reg 3 and Sch 1[7], opn 1 July 2006]

[89,835] Official Trustee’s entitlement to interim remuneration 16.07 (1) The Official Trustee’s entitlement to remuneration under the Fees and Remuneration Determination arises when the Official Trustee (a) performs work or first acts in accordance with clause 3.03, 3.04, 3.07 or 3.08 of the Fees and Remuneration Determination; or (b) is appointed as described in clause 3.06 of the Fees and Remuneration Determination; or (c) first acts in accordance with subclause 3.09(1) of the Fees and Remuneration Determination; or (d) performs work as described in subclause 3.09(2) or clause 3.10 of the Fees and Remuneration Determination. [subreg (1) am SLI 195 of 2010 reg 3 and Sch 1[24], opn 1 Aug 2010]

(2) For paragraph (1)(a), (b) or (d), remuneration is payable to the Official Trustee in respect of an amount received by the Official Trustee: (a) when the amount is received; and (b) at the rate applicable when the amount is received. (3) For paragraph (1)(c), remuneration is payable to the Official Trustee: (a) from time to time as the funds are realised; and (b) at the rate applicable when the funds are realised. [reg 16.07 subst SLI 137 of 2006 reg 3 and Sch 1[7], opn 1 July 2006]

[89,840] Reimbursement of Official Trustee for expenses 16.08 (1) An amount equal to the amount of expenses incurred by the Official Trustee, in performing work of a kind mentioned in clause 3.03,

3.04, 3.08 or 3.09 of the Fees and Remuneration Determination in relation to an estate or debtor, is payable to the Official Trustee: (a) for work under clause 3.03, 3.08 or 3.09 — out of the estate; or (b) for work under clause 3.04 — out of the composition or scheme of arrangement. [subreg (1) am SLI 195 of 2010 reg 3 and Sch 1[25], opn 1 Aug 2010]

(2) In this regulation: amount realised has the meaning given by clause 3.01 of the Fees and Remuneration Determination. [def am SLI 195 of 2010 reg 3 and Sch 1[25], opn 1 Aug 2010] [reg 16.08 subst SLI 137 of 2006 reg 3 and Sch 1[7], opn 1 July 2006]

[page 871]

[89,845] Fees — notes and transcript of evidence 16.09 For paragraph 81(17)(b) of the Act, the prescribed fee is $20. [reg 16.09 subst SLI 137 of 2006 reg 3 and Sch 1[7], opn 1 July 2006]

[89,880A] Waiver or remission of fees by InspectorGeneral 16.11 (1) Subject to subregulation (2), the Inspector-General may waive or remit the whole or part of any fee. (2) A fee may only be waived or remitted, whether wholly or in part, if the Inspector-General is reasonably satisfied that: (a) payment of the fee by the person liable to pay it has imposed, or would impose, undue hardship on the person; or (b) because of other exceptional circumstances, it is proper and reasonable to do so. (3) For paragraph (2)(a), undue hardship means hardship that is unusual and exceptional in comparison to the hardship arising in the normal course of bankruptcy. (4) A decision under subregulation (1) must be notified in writing to:

(a) the person concerned; and (b) except where the fee is payable to the Inspector-General — the officer to whom the fee is or, but for the waiver or remission, would be payable. (5) In this regulation: fee means a fee payable under: (a) regulation 16.09; or (b) item 1, 2, 3, 4, 9, 13, 14 or 15 of the table following clause 2.01 of the Fees and Remuneration Determination; or (c) clause 2.02, 2.08 or 2.09 of the Fees and Remuneration Determination. (d) [repealed] [def am SLI 195 of 2010 reg 3 and Sch 1[26], opn 1 Aug 2010] [subreg (5) subst SLI 137 of 2006 reg 3 and Sch 1[10], opn 1 July 2006; renum SLI 137 of 2006 reg 3 and Sch 1[9], opn 1 July 2006]

[89,880B] Review by AAT of decision of InspectorGeneral 16.12 Application may be made to the Administrative Appeals Tribunal for review of a decision of the Inspector General under subregulation 16.11(1) to refuse to waive or remit the whole or part of a fee that became payable under a provision or item mentioned in the definition of fee in regulation 16.11. Note: Under section 27A of the Administrative Appeals Tribunal Act 1975, the decision-maker must give any person whose interests are affected by the decision notice, in writing or otherwise, of the making of the decision and of the person’s right to have the decision reviewed. In giving that notice, the decision-maker must have regard to the Code of Practice determined under section 27B of that Act (Gazette No. S 432, 7 December 1994). [reg 16.13B subst SLI 137 of 2006 reg 3 and Sch 1[11], opn 1 July 2006]

Subdivision 2.1 — Fees payable to the Official Receiver [Repealed] [Subdiv 2.1 rep SLI 137 of 2006 reg 3 and Sch 1[7], opn 1 July 2006]

Subdivision 2.2 — Fees payable to the Official Trustee [Repealed]

[Subdiv 2.2 rep SLI 137 of 2006 reg 3 and Sch 1[7], opn 1 July 2006]

[page 872]

Subdivision 2.3 — Other fees [Repealed] [Subdiv 2.3 rep SLI 137 of 2006 reg 3 and Sch 1[7], opn 1 July 2006]

Subdivision 2.4 — Waiver and remission [Repealed] [Subdiv 2.4 am SLI 137 of 2006 reg 3 and Sch 1[8], opn 1 July 2006]

DIVISION 3 — TRANSITIONAL [Div 3 insrt SLI 195 of 2010 reg 3 and Sch 1[28], opn 1 Aug 2010]

[89,880C] Application of Same-Sex Relationships (Equal Treatment in Commonwealth Laws — General Law Reform) Act 2008 16.13 (1) The amendments made by items 20, 21, 22, 23, 29, 30 and 31 of Schedule 2 to the Same-Sex Relationships (Equal Treatment in Commonwealth Laws — General Law Reform) Act 2008 apply to a bankruptcy the date of which is on or after the commencement of those amendments. (2) The amendments made by items 25 to 28 of Schedule 2 to the SameSex Relationships (Equal Treatment in Commonwealth Laws — General Law Reform) Act 2008 apply to a transfer of property that is made on or after the commencement of those amendments. (3) The amendment made by item 16 of Schedule 2 to the Same-Sex Relationships (Equal Treatment in Commonwealth Laws — General Law Reform) Act 2008 applies to an examinable period, within the meaning of section 139CA of the Act, that begins on or after the commencement of that amendment.

(4) For sections 265 and 268 of the Act, the amendments made by items 11, 13, 18 and 19 of Schedule 2 to the Same-Sex Relationships (Equal Treatment in Commonwealth Laws — General Law Reform) Act 2008 applies to a disposition of property that is made on or after the commencement of those amendments.

[page 873]

[90,040]

SCHEDULE 1 — FORMS

Editor’s note: Schedule 1 — Forms is reproduced behind guide card “Bankruptcy Forms”.

[page 874]

[90,045]

SCHEDULE 2 — MODIFICATIONS UNDER SECTION 76A OF THE ACT — MEETINGS OF CREDITORS UNDER DIVISION 6 OF PART IV OF THE ACT (regulation 4.19) [Sch 2 am SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

Subsection 64A(2) 1AA

substitute

(2) Notice of a meeting: (a) for the first meeting of creditors — must be published in a manner approved by the Inspector-General; and (b) for any other meeting of creditors — must be given in a manner specified in the regulations. [cl 1AA insrt SLI 4 of 2006 reg 3 and Sch 1 [12], opn 17 Feb 2006]

After subsection 64A(2) 1AB

insert

(3) The notice of the first meeting of creditors must include any matter approved by the Inspector-General. (4) For the purposes of paragraph (2)(a) and without limiting the power of the Inspector-General under that paragraph, the Inspector-General may: (a) approve, as the manner of publication of the notice of the first meeting of creditors, publication on a website; and (b) specify in the approval: (i) the website where the notice must be published; and (ii) any conditions relating to the approval. Example: The Inspector-General may specify: (a) the format in which the notice is to be made available; and (b) the period of time for which the notice must remain on the website; and (c) whether related documents are to be made available for downloading from the website or in hard copy. (5) An approval made by the Inspector-General for the purposes of paragraph (2)(a) or subsection (3) must be published on the Insolvency and Trustee Service Australia’s website. [cl 1AB insrt SLI 4 of 2006 reg 3 and Sch 1 [12], opn 17 Feb 2006]

After section 64A

1AC

insert

Immunity from civil actions and proceedings 64AA (1) A civil action or proceeding does not lie against a person who operates a website, specified in an approval for the purposes of paragraph 64A(2)(a) or subsection 64A(3), in respect of a publication of a notice of the first meeting of creditors (or a notice that appears to be a notice of the first meeting of creditors) if the publication was made in good faith and without negligence. (2) Nothing in this section affects by implication any other ground of defence. [cl 1AC insrt SLI 4 of 2006 reg 3 and Sch 1 [12], opn 17 Feb 2006]

[page 875]

Section 64B (Certain matters to be included in notice of meeting) 1.1 Add at the end:

1

‘(6) The trustee must attach to the notice: (a) the documents referred to in subsection 73(2); and (b) if the meeting is the first meeting of creditors held during the administration of the estate — a copy of: (i) the bankrupt’s statement of affairs; or (ii) a summary of that statement.’.

After paragraph 64D(aa) 1B

insert

(ab) whether the creditor, in relation to the debtor, is a related entity; and [cl 1B insrt SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

Section 64E (Notice about voting by proxy) 2.1 Omit the section, substitute:

2

‘Notice — proxy voting and voting on bankrupt’s proposal 64E (1) The trustee must attach to the notice a form for use in: (a) appointing a proxy; and (b) expressing under subsection 73(5) the creditor’s assent to, or dissent from, the bankrupt’s proposal. ‘(2) The notice must tell the creditors that if a creditor wishes to appoint a person to represent the creditor at the meeting as the creditor’s proxy, the creditor must complete the form of appointment of proxy and either: (a) arrange for the proxy to give the completed form to the trustee before the meeting; or (b) send the completed form with the statement given by the creditor to the trustee in accordance with section 64D.

‘(3) The notice must tell creditors that if a creditor wishes to use the form to express his or her assent to or dissent from the bankrupt’s proposal, the creditor must arrange for the form to be given to the trustee before the meeting.’.

Section 64G (Agenda to be set out in notice of meeting) 3 3.1 Paragraph 64G(g): Omit the paragraph, substitute: ‘(g) consideration of the bankrupt’s proposals for a composition or scheme of arrangement;’.

3.2 Paragraph 64G(k): Omit the paragraph, substitute: ‘(k) proposal of: (i) a special resolution accepting the bankrupt’s proposal for a composition or a scheme of arrangement; or (ii) any other relevant motion;’.

Section 64R (Tabling of bankrupt’s statement of affairs) 4.1 Omit the section, substitute:

4

‘Provision of bankrupt’s statement of affairs, bankrupt’s proposal and trustee’s report 64R (1) The President must then ask whether each creditor, or representative of a creditor, at the meeting has with him or her a copy of: (a) the bankrupt’s proposal; and (b) the trustee’s report on the proposal.

[page 876] ‘(2) If the meeting is the first meeting of the creditors, the President must also ask each creditor or representative whether the creditor or representative has a copy of the bankrupt’s statement of affairs with him or her. ‘(3) If a creditor or representative indicates that he or she does not have a copy of the proposal, the report or the statement of affairs with him or her, the trustee must give the creditor or representative, as soon as practicable, a copy of the proposal, report or statement, as the case requires. ‘(4) If the trustee cannot give a creditor or representative a copy of the proposal, report or statement of affairs within a reasonable time, the meeting is to be adjourned to a time and place decided by the meeting. ‘(5) In this section, a reference to a statement of affairs is taken to include a reference to a summary of such a statement.’.

Section 64S (Statements and questions) 5

5.1 Subsection 64S(1)

Omit the subsection, substitute: ‘(1) The President must then invite the bankrupt to make a statement outlining his or her proposal to the meeting. ‘(1A) The President must then ask the trustee to comment on his or her report on the bankrupt’s proposal.’.

Section 64T (Motions) 6.1 Omit the section, substitute:

6

‘Motions 64T (1) The President must then call for a motion for a special resolution to approve the bankrupt’s proposal for a composition or scheme of arrangement. ‘(2) If a motion is: (a) not proposed; or (b) proposed but not passed; the President may close the meeting.’.

Section 64U (Remuneration of registered trustee) 7 7.1 Subsection 64U(1) Omit the subsection, substitute: ‘(1) If: (a) a special resolution, accepting the bankrupt’s proposal, has been passed at the meeting; and (b) a registered trustee has consented to be the trustee of the composition or scheme of arrangement; and (c) the President has told the creditors and representatives at the meeting that provision for remuneration of the trustee may be included in the instrument setting out the terms of the composition or scheme; the President must then ask the trustee of the composition or scheme of arrangement to state the basis on which the trustee wishes to be remunerated.’.

7.2 Subsection 64U(8): Omit the subsection, substitute: ‘(8) If: (a) a special resolution, accepting the bankrupt’s proposal, has been passed at the meeting; and (b) the trustee of the bankruptcy is a registered trustee;

[page 877] the President must ask the trustee to lay before the meeting a statement of the amount of remuneration drawn by the trustee from the funds of the bankrupt’s estate before the meeting was held.

‘(9) The trustee must comply with the President’s request.’.

Section 64V (Appointment of committee of inspection) 8.1 Omit the section.

8

Section 64W (Other business) 9.1 Omit the section.

9

Section 64X (Next meeting) 10

10.1 Omit the section.

Before subsection 64Y(1) 10A

insert

(1A) The trustee may adjourn a meeting to undertake further investigations, in relation to the proposal for the composition or scheme of arrangement, that the trustee considers necessary. (1B) The creditors attending the meeting may, by special resolution, revoke the trustee’s decision to adjourn the meeting. [cl 10A insrt SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

Section 64ZB (Manner of voting) 11

11.1 After subsection 64ZB(1), insert:

‘(1A) A creditor may, in a written vote given to the trustee at least 2 clear days (not including a Saturday, a Sunday or a public holiday) before the meeting is held, vote on a special resolution to accept a proposal by a bankrupt for a composition or scheme of arrangement.’.

After subsection 64ZC(5) 11A

insert

(5A) An instrument appointing a proxy must include: (a) a statement disclosing whether or not the creditor has received, or will receive, a financial incentive: (i) to appoint the proxy; or (ii) to direct the proxy as to the manner in which the proxy is to vote on a particular matter or matters that may arise, or on a particular motion or motions that may be proposed, at a meeting to which the proxy relates; and (b) if the proxy or creditor has received, or will receive, a financial incentive in relation to a matter mentioned in paragraph (a) — a statement specifying the amount of financial incentive paid or to be paid and the name of the person who paid, or is to pay, the financial incentive. [cl 11A subst SLI 137 of 2006 reg 3 and Sch 1[13], opn 1 July 2006]

Section 64ZE (Joint bankruptcies) 12

12.1 Omit the section.

[page 878]

[90,095]

SCHEDULE 3 — PARAGRAPH 109(1) (a) OF THE ACT — ORDER OF PAYMENT OF FIRST PRIORITY DEBTS

(regulation 6.01) 1 Realisations charges payable under an Act, and fees payable under the Bankruptcy (Estate Charges) Act 1997 [cl 1 am SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002; SLI 137 of 2006 reg 3 and Sch 1[14], opn 1 July 2006]

1A If the Official Trustee transfers the administration of the bankruptcy to a registered trustee: (a) the remuneration set out in Division 3.2 of the Fees and Remuneration Determination that is payable to the Official Trustee; and (b) the reimbursement set out in regulation 16.08 that is payable to the Official Trustee. [cl 1A subst SLI 137 of 2006 reg 3 and Sch 1[15], opn 1 July 2006; am SLI 195 of 2010 reg 3 and Sch 1[27], opn 1 Aug 2010]

2 Expenses reasonably incurred by or on behalf of the trustee: (a) in protecting all or part of the bankrupt’s assets; or (b) in carrying on, in accordance with the Act, a business of the bankrupt; or (c) by way of an advance made to the trustee of the bankrupt’s estate for payment of properly incurred expenses of the estate for any proper purpose (other than remuneration of the trustee) 3 Other fees, costs, charges and expenses payable by the trustee in administering the bankrupt’s estate 4 Where:

(a) a creditor has deposited an amount in accordance with an order made under section 50 of the Act; and (b) the amount, or part of the amount, has been used for meeting the expenses referred to in that regulation; the amount, or part of the amount, that has been so used 5 The taxed costs of the petitioning creditor, the administrator of the estate of a deceased person or the applicant under Part X of the Act for a sequestrian order and, if a petitioning creditor under Part X of the Act also applied for an order under Division 5 or 6 of Part IX of the Act, any taxed costs of the creditor in respect of the application Note: For the extended application of item 5, see subregulation 6.01(2). 6 The trustee’s lawful remuneration 7 Where the creditors, or a majority of them, have approved payment of out-of-pocket expenses incurred by a member of the committee of inspection — those expenses, to the extent that the trustee of the bankrupt’s estate allows them as being fair and reasonable 8 Costs of any audit carried out under section 175 of the Act

[page 879]

[90,145]

SCHEDULE 4 — MODIFICATIONS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986 (regulation 6.12)

[Sch 4 am SR 76 of 1997 reg 36]

Section 7 (Car benefits) 1 1.1 Subsections 7(1), (2), (3) and (4): Omit the subsections, substitute: “(1) Where, at any time on a day, a person: (a) applies a car held by the person; or (b) makes a car held by the person available; for the private use of a bankrupt, the car is taken, for the purposes of this Act, to constitute a benefit provided on that day by the first-mentioned person to the bankrupt.”.

Section 8 (Exempt car benefits) 2 2.1 Subsections 8(1) and (2): Omit the subsections.

Section 9 (Taxable value of car fringe benefits — statutory formula) 3 3.1 Subparagraphs 9(2)(c)(i) and (ii): Omit the subparagraphs, substitute: “(i) for the first contribution assessment period: (A) where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was more than 40,000 — 0.07; or (B) where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was not more than 40,000 and not less than 25,000 — 0.11; or (C) where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was less than 25,000 and not less than 15,000 — 0.20; or

(D) where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was less than 15,000 — 0.26; and (ii) for each subsequent contribution assessment period: (A) where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was more than 40,000 — 0.07; or (B) where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was not more than 40,000 and not less than 25,000 — 0.11; or (C) where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was less than 25,000 and not less than 15,000 — 0.20; or (D) where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was less than 15,000 — 0.26;”.

[page 880] 3.2 Paragraph 9(2)(d): Omit the paragraph, substitute: “(d) the annualised number of whole kilometres travelled by the car during a contribution assessment period is: (i) if records of the bankrupt show the number of kilometres travelled by the car during the year preceding that period — that number of kilometres; or (ii) in any other case — the number of kilometres worked out in accordance with the following formula: where: A is the number of whole kilometres travelled by the car during the period (in this subsection referred to as the holding period) constituting that part of the contribution assessment period during which the provider held the car; and B is the number of days in the contribution assessment period; and C is the number of days in the holding period; and”.

3.3 Sub-subparagraph 9(2)(e)(ia)(B): Omit the sub-subparagraph. 3.4 Subsection 9(2): Add at the end: “Examples: 1. Assessment in the first contribution assessment period A car is purchased in June 1994 for Christopher’s use. The purchase price of the car is $20,000. During the period up to till 30 June 1995, Christopher uses the car on 200 days and travels 10,000

kilometres in that period. Christopher is declared bankrupt on 1 July 1992. His contribution to expenses is $300. The annualised number of kilometres according to the formula

is:

The figures to be inserted in the formula for calculating the value of the car benefit are: A (base value): $20,000; B (statutory fraction [for 18,250 km]): 0.20; C (days when benefit provided): 365; D (days in contribution assessment period): 365; E (bankrupt’s contribution): $300. The value of the car benefit, according to the formula

is:

2. Assessment in the second contribution assessment period Suppose that the same car is provided in the second contribution assessment period for the use of the bankrupt, and that during the first contribution assessment period the car travelled 40,000 kilometres. The annualised number of kilometres for the second contribution assessment period is then 40,000 kilometres. Suppose also that the bankrupt’s contribution remains $300. All

[page 881] figures will remain the same except the statutory fraction, which will be 0.11. According to the formula, the value of the benefit in the second contribution assessment period is:

Section 10 (Taxable value of car fringe benefits — cost basis) 4

4.1 Omit the section.

Section 10A (No reduction of operating cost in a log book year of tax unless log book records and odometer records are maintained) 5

5.1 Omit the section.

Section 10B (No reduction of operating cost in a non-log book year of tax unless log book records and odometer records are maintained in log book year of tax)

6.1 Omit the section.

6

Section 10C (Nominated business percentage to be reduced if it exceeds business percentage established during applicable log book period or if it is unreasonable) 7.1 Omit the section.

7

Section 11 (Calculation of depreciation and interest) 8.1 Omit the section.

8

Section 12 (Depreciated value) 9.1 Omit the section.

9

Section 13 (Expenditure to be increased in certain circumstances) 10 10.1 Subsection 13(1): Omit all the words after “section 9”.

Section 22A (Taxable value of in-house expense payment fringe benefits) 11

11.1 Omit the section.

Section 23 (Taxable value of external expenses payment fringe benefits) 12

12.1 Omit “external”.

Section 26 (Taxable value of non-remote housing fringe benefits) 13

13.1 Omit the section, substitute:

Taxable value of housing fringe benefits “26 Subject to this Part, the value of a housing fringe benefit in relation to a contribution assessment period is the portion of the market value of the recipient’s current housing right that exceeds the recipient’s rent”.

Section 28 (Indexation factor for valuation purposes — nonremote housing) 14

14.1 Omit the section.

[page 882]

Section 29 (Taxable value of remote area accommodation) 15

15.1 Omit the section.

Section 29A (Indexation factor for valuation purposes — remote area accommodation) 16

16.1 Omit the section.

Section 31 (Taxable value of living-away-from-home allowance fringe benefits) 17

17.1 Add at the end:

“(2) For the purposes of this section, deducted home consumption expenditure referred to in the definition of exempt food component in section 136 to be taken to be: (a) in relation to a person of the age of 12 years or over — $42; and (b) in relation to a person under the age of 12 years — $21. Example: Calculation of the value of a living-away-from-home allowance. Assume that a bankrupt living away from his or her family is given a living-away-from-home allowance of $220 a week. Of this amount, $100 represents reasonable compensation for the costs of accommodation (ie the exempt accommodation component is $100), and $80 represents reasonable compensation for the cost of food. The remaining $40 is compensation for the disadvantage of living away from home in a town where facilities that would be available at home are not available. Under subsection 31(2), the exempt food component is $80 minus $42 (i.e. the compensation for increased food cost less the deducted home consumption expenditure). The value of the benefit is:

$220 − 100 − (80 − 42) = $82.”.

Section 32: (Airline transport benefits) 18 18.1 Sub-subparagraph 32(b)(ii)(B): Omit “and”. 18.2 Paragraph 32(c): Omit the paragraph.

Section 36 (Taxable value of board fringe benefits) 19

19.1 Omit the section, substitute:

Taxable value of board fringe benefits “36 Subject to this Part, the value of a board fringe benefit is: (a) in relation to a contribution assessment period beginning: (i) on 1 July 1992; or (ii) during the year beginning on 1 July 1992; $1; and (b) in relation to a later contribution assessment period — a sum worked out according to the formula: 1 × CPI where: CPI is the increase in the All Groups Consumer Price Index number that is the weighted average of the 8 capital cities published by the Australian Statistician in respect of the period that commences 1 July 1992 and ends immediately before the start of the financial year in which the contribution assessment period commences.”.

Section 37 (Reduction of taxable value — “otherwise deductible” rule) 20

20.1 Omit the section. [page 883]

Division 11 of Part III (Property fringe benefits) 21

21.1 Omit the Division.

Section 46 (Year of tax in which residual benefits taxed) 22

22.1 Omit the section, substitute:

Contribution assessment period in which residual fringe benefits are to be assessed “46 A residual benefit that is provided during a period which extends over two or more contribution assessment periods is subject to assessment for income contribution in each of those periods.”.

Section 48 (Taxable value of in-house non-period residual fringe benefits) 23

23.1 Omit the section.

Section 49 (Taxable value of in-house period residual fringe benefits) 24

24.1 Omit the section.

Section 50 (Taxable value of external non-period residual fringe benefits) 25

25.1 Omit the section, substitute:

Value of residual fringe benefits “50 Subject to this Part, the value of a residual fringe benefit in relation to a contribution assessment period is the cost to the provider of providing the benefit, reduced by the amount of the recipient’s contribution.”.

Section 51 (Taxable value of external period residual fringe benefits) 26

26.1 Omit the section.

Division 14 of Part III (Reduction of taxable value of miscellaneous fringe benefits) 27

27.1 Omit the Division.

Division 14A of Part III (Amortisation of taxable value of fringe benefits relating to remote area home ownership schemes) 28

28.1 Omit the Division.

Division 14B of Part III (Reducible fringe benefits relating to remote area home ownership repurchase schemes) 29

29.1 Omit the Division.

Section 136 (Interpretation) 30 30.1 Subsection 136(1): Insert the following definition: “contribution assessment period has the meaning given by section 139K of the Bankruptcy Act 1966 as in force from time to time.”.

30.2 Subsection 136(1) (definition of family member): Omit the definition, substitute: “family member, in relation to: (a) provided to a employee, or to an associate of a employee, means: (i) the employee; or

[page 884] (ii) the spouse of the employee; or (iii) a child of the employee; and (b) a benefit provided to a bankrupt, or to an associate of a bankrupt, means: (I) the bankrupt; or (ii) the spouse of the bankrupt; or (iii) a child of the bankrupt;”.

30.3 Subsection 136(1) (definition of fringe benefit): Omit the definition, substitute: “fringe benefit, in relation to a bankrupt, in relation to a contribution assessment period, means a benefit provided at any time during the period by any person to the bankrupt, other than: (a) a benefit provided to the bankrupt by his or her spouse under, or because of a genuine maintenance agreement between the spouses; or (i) domestic arrangement; or (ii) maintenance agreement; between the spouses; or (b) a benefit provided under a maintenance order, within the meaning of the Bankruptcy Act 1966 as in force from time to time; or (c) the benefit of an order by a court in favour of the bankrupt in respect of costs of litigation; or (d) educational expenses paid by any person in respect of a child of: (i) the bankrupt; or (ii) the bankrupt’s spouse; or (e) the amount of a refund, or part of a refund, due by the Commissioner to the bankrupt under a law of the Commonwealth, being an amount that the Commissioner has lawfully offset against a tax liability, within the meaning of the Taxation Administration Act 1953 as in force from time to time, of the bankrupt; or (f) subject to subsection (1A), a benefit of a kind referred to in paragraphs (f) to (p) (inclusive) of the definition of fringe benefit in this Act (in its unmodified form) as in force at the beginning of 1 July 1992; or (g) support by way of one or both of the following: (i) lodging (including any board); or (ii) occasional use of a motor vehicle used for domestic purposes; up to a value of $250 a week, if the support is provided by a person in the person’s principal place of residence, and the person is: (iii) a close relative; or (iv) a brother or sister (including a half-brother, half-sister, adoptive brother or adoptive sister); of the bankrupt. Note: Close relative, in relation to a person, is defined in section 136 of the Fringe Benefits Tax Assessment Act 1986 as:

(a) the spouse of the person; or (b) a child or parent of the person; or (c) a parent of the person’ s spouse.”. [subcl 30.3 am SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

30.4 After subsection 136(1), insert: “(1A) For the purposes of paragraph (f) of the definition of fringe benefit in subsection (1), paragraph (h) of the paragraphs referred to in that paragraph has effect as if “the employee, or by a relative of the employee,” were omitted and “the bankrupt” substituted.”.

[page 885]

[90,150]

SCHEDULE 4A — PERFORMANCE STANDARDS FOR TRUSTEES (INCLUDING CONTROLLING TRUSTEES) (regulation 8.34A)

[Sch 4A insrt SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

PART 1 — PRELIMINARY Purpose 1.1 (1) This Schedule sets out standards for the minimum level of acceptable conduct and performance of: (a) a registered trustee when exercising the powers, or carrying out the duties, of a registered trustee under the Act; and (b) a solicitor exercising the powers, or carrying out the duties, of a controlling trustee under the Act. Note 1: Subsection 155H(1) of the Act provides that the Inspector-General may ask a registered trustee to give the Inspector-General a written explanation why the trustee should continue to be registered, if the Inspector-General believes that the trustee has failed to comply with a standard prescribed in Schedule 4A. Under subsection 155H(2) of the Act, if the Inspector-General does not receive an explanation within a reasonable time, or is not satisfied by the explanation, the Inspector-General must convene a committee to consider whether the trustee should continue to be registered. Section 155I of the Act sets out the committee’s powers when considering whether a trustee should continue to be registered.

Matters that the Inspector-General or a committee might consider include: (a) the importance of a standard that has not been complied with; and (b) the seriousness of the effect of a failure to comply with a standard, including the impact the failure to comply has on a particular estate; and

(c) a trustee’s performance history and whether the trustee has previously failed to comply with a standard. Note 2: Under paragraph 8.35(2)(a), the Inspector-General may determine that a person who is or has been a controlling trustee is not eligible to act as a controlling trustee because the person has failed to meet a standard in this Schedule that applies to a controlling trustee.

(2) The purpose of these standards is to ensure: (a) that a person to whom these standards apply acts at all times in accordance with the person’s powers and duties under the Act and these Regulations and in relation to the practice of bankruptcy law generally; and (b) that an administration to which these standards apply is carried out consistently at a high level. CLAUSE 1.1 GENERALLY [90,150.5] Standards of conduct for trustees See Rambaldi (The Trustees of the Estate of John Edward Atkinson, a Bankrupt) v Woodward [2012] NSWSC 434; BC201203148 and [80,455.5].

____________________

Definitions 1.2 In this Schedule: administration means: (a) the administration of the estate of a bankrupt; or (b) the administration of a composition or scheme of arrangement under Division 6 of Part IV of the Act; or [page 886] (c) the administration of a personal insolvency agreement; or (d) the administration of a debtor’s property that has become subject to control under Division 2 of Part X of the Act; or (e) the administration of the estate of a deceased person under Part XI of the Act. contribution assessment period, in relation to a bankrupt, has the meaning given by section 139K of the Act.

contributions liability, in relation to a bankrupt, means the contribution that a bankrupt is liable to pay in respect of a contribution assessment period, calculated in accordance with section 139S of the Act. controlling trustee means a registered trustee or a solicitor who is controlling the property of a debtor under an authority given under section 188 of the Act. deceased person means a deceased person in respect of whose estate an order for administration under Part XI of the Act has been made. divisible property: (a) in relation to a bankrupt, means property divisible among his or her creditors within the meaning of section 116 of the Act; and (b) in relation to a debtor, means property divisible among his or her creditors within the meaning of section 187 of the Act; and (c) in relation to a deceased person, means the divisible property of that person’s estate as defined by subsection 249(6) of the Act.

PART 2 — GENERAL STANDARDS DIVISION 2.1 — APPLICATION Application of Part 2 2.1 This Part applies to: (a) the trustee of the estate of a bankrupt; and (b) the trustee of a composition or scheme of arrangement under Division 6 of Part IV of the Act; and (c) the trustee of a personal insolvency agreement; and (d) a controlling trustee; and (e) the trustee of the estate of a deceased person.

DIVISION 2.2 — GENERAL Duty to act honestly and impartially 2.2 (1) The trustee must act honestly and impartially in relation to each

administration, including not signing, or associating himself or herself with, a document that the trustee knows, or ought reasonably to know, is false or misleading. (2) The trustee must not include in any document prepared by the trustee a clause that disclaims the trustee’s responsibility for the document’s authenticity.

Conflict of interest 2.3 If, during an administration, it becomes apparent that the trustee has an actual or potential conflict of interest in relation to the administration, the trustee must, as soon as practicable after becoming aware of the conflict of interest: (a) notify the creditors, the person who appointed the trustee, a committee of inspection or the court, as appropriate, of the conflict of interest; and (b) take appropriate steps to avoid the conflict of interest. [page 887] Examples of conflicts of interest 1. The appointer or, in the case of a sequestration order, the bankrupt is or was a client of the trustee or the trustee’s firm in relation to a financial, trust or insolvency planning matter. 2. The trustee or a member of the trustee’s firm is a personal friend, relative or business associate of the debtor.

Use of information relating to an administration 2.4 The trustee must comply with section 16A of the Privacy Act 1988 when dealing with information relating to an administration. Note: Section 16A of the Privacy Act 1988 provides that an organisation must not do an act, or engage in a practice:

(a) that breaches an approved privacy code binding the organisation; or (b) to the extent (if any) that the organisation is not bound by an approved privacy code — that breaches a National Privacy Principle.

The National Privacy Principles are set out in Schedule 3 to the Privacy Act 1988.

Compliance with standards by trustee’s employees 2.5 The trustee must ensure that his or her employees comply with these standards.

Preliminary inquiries and actions 2.6 The trustee must undertake preliminary inquiries and actions at the start of each administration, including the following: (a) informing the bankrupt, debtor or legal personal representative of the deceased person of his or her obligations under the Act and the penalties for failing to comply with those obligations; (b) obtaining and reviewing the statement of affairs of the bankrupt, debtor or deceased person; (c) if necessary, interviewing the bankrupt, debtor or legal personal representative of the deceased person to clarify any matters in the statement of affairs; (d) identifying and making an assessment of realisable assets that could be expected to: (i) provide, on a cost-benefit basis, a return to creditors; or (ii) contribute to the payment of the costs and fees of the administration; (e) assessing a bankrupt’s contributions liability; (f) determining the likelihood of whether the estate of the bankrupt or deceased person, or the property of the debtor, includes property that can be realised to pay a dividend to creditors; (g) if the trustee has a genuine reason for believing that a bankrupt, debtor or legal personal representative of the deceased person may not have disclosed an interest in real or other registered property — conducting appropriate searches for such property; (h) if information obtained from a search mentioned in paragraph (g) shows that the bankrupt, debtor or legal representative of the deceased person has not made full and true disclosure of his or her interest in property:

(i)

(j)

(i) making inquiries of third parties about the information; or (ii) if further inquiries are not made, explaining to the creditors why further inquiries were considered unnecessary; if the trustee considers that there may have been antecedent transactions — making inquiries of third parties to identify those transactions; cooperating with the Inspector-General by, for example, responding to reasonable requests for information. [page 888]

Investigation of matters affecting administration 2.7 (1) The trustee must consider the views of creditors regarding the extent to which investigations are undertaken in an administration. (2) The trustee must inform creditors, as soon as practicable, of the outcomes of inquiries undertaken in the administration.

DIVISION 2.3 — ASSETS Realising assets 2.8 The trustee must realise only those assets: (a) that will give a cost-effective return to creditors; or (b) that contribute to the payment of the costs of the administration; or (c) that may be realised in accordance with a personal insolvency agreement.

Ownership or interests in assets 2.9 In determining the ownership of, or an interest in, an asset that is part of divisible property, the trustee must act reasonably and claim only the amount that fairly represents the interest in, or value of, the asset.

Obtaining advice about interest or value 2.10 If the value of divisible property is likely to have a material impact on the administration, the trustee must obtain advice from an independent expert

in assessing: (a) the extent of the trustee’s interest in any realisable asset; and (b) the value of the property or offers for the property.

Disposal of property 2.11 The trustee must act independently and impartially in undertaking transactions and dealings relating to the disposal of the property of a bankrupt, debtor or deceased person.

Records 2.12 If, in an administration, the trustee makes a decision about the identification, protection, realisation or write-off of a significant asset of a bankrupt, debtor or deceased person that may have a material impact on the administration, the trustee must: (a) record the decision in writing; and (b) keep the record on the trustee’s file for the administration.

DIVISION 2.4 — REMUNERATION AND COSTS Costs incurred to be necessary and reasonable 2.13 In conducting an administration, the trustee must: (a) incur only those costs that are necessary and reasonable; and (b) before deciding whether it is appropriate to incur a cost, compare the amount of the cost likely to be incurred with the value and complexity of the administration.

Receipt of moneys as trustee’s remuneration 2.14 (1) If the trustee receives moneys from a debtor, bankrupt, legal personal representative of a deceased person, creditor or third party that are intended to cover the trustee’s remuneration, the moneys must be: [page 889] (a) included in the trustee’s remuneration fixed in accordance with section 162 of the Act; and

(b) properly accounted for in accordance with sections 168 and 169 of the Act. (2) [subcl (2) rep SLI 287 of 2010 reg 3 and Sch 1[12], opn 1 Dec 2010]

Rate for tasks undertaken by trustee’s staff 2.15 The trustee must ensure that time billed for a task undertaken in conducting an administration is charged at the appropriate rate for the level of staff who would be reasonably expected to undertake the task.

Records 2.16 The trustee must ensure that proper records are kept that: (a) provide evidence of the time spent on work done in conducting an administration; and (b) adequately describe the nature of the work. (c) [repealed] [cl 2.16 am SLI 287 of 2010 reg 3 and Sch 1[13]–[14], opn 1 Dec 2010]

DIVISION 2.5 — FILES AND ACCESS TO INFORMATION File maintenance 2.17 (1) The trustee must keep separate files for each administration. (2) The trustee must keep a record of every material decision in an administration, and any supporting documentation relied on in relation to the decision, on the file for the administration.

Provision of information to creditors 2.18 (1) This clause applies to: (a) the trustee of a composition or scheme of arrangement under Division 6 of Part IV of the Act; and (b) the trustee of a personal insolvency agreement; and (c) the trustee of the estate of a deceased person. (2) The trustee and the trustee’s staff must give information about an administration to a creditor who reasonably requests it.

DIVISION 2.6 — MEETINGS OF CREDITORS

Need for meeting 2.19 The trustee must consider whether the matters sought to be addressed at a meeting of creditors: (a) require the holding of a meeting; or (b) could be addressed more cost effectively by another form of communication with creditors, for example, a creditors’ resolution without a meeting in accordance with section 64ZBA of the Act.

Matters to be considered when holding a meeting 2.20 In deciding whether the proposed time and place for a meeting of creditors is convenient for the creditors, the trustee must consider the following: (a) the requirements for meetings set out in the Act and these Regulations; (b) the location of creditors; [page 890] (c) the ability of creditors to return proxies and statements of debt; (d) the complexity of issues to be considered by creditors before the meeting.

Attendance at meeting 2.21 The trustee, or a person appointed under subsection 63B(1) of the Act to represent the trustee at a meeting of creditors, must attend the meeting.

President’s duties at creditors’ meeting 2.22 (1) This clause applies to the following persons: (a) a trustee who is elected to preside at a meeting of creditors; (b) a person appointed under subsection 63B(1) of the Act to represent the trustee at a meeting of creditors; (c) a controlling trustee presiding at a meeting of creditors. (2) The person must: (a) ensure that proper meeting procedures are followed; and

(b) ensure that the requirements relating to meetings set out in the Act and these Regulations are complied with; and (c) ensure that all persons attending the meeting who are entitled to ask questions of the trustee, the bankrupt, the debtor or the legal personal representative of the deceased person are given an opportunity to do so; and (d) ensure that the minutes secretary complies with the requirements of section 64Z of the Act; and (e) take reasonable steps to establish whether there is sufficient evidence to support a creditor’s statement under section 64D of the Act in relation to the amount of liability of the bankrupt, the debtor or the estate of the deceased person to the creditor.

Attendance of Inspector–General at meetings 2.23 The trustee must not prevent the Inspector-General from attending, or participating in, a meeting of creditors.

DIVISION 2.7 — TRUSTEE’S ACCOUNTS Records of accounts 2.24 (1) The trustee must maintain a separate record of receipts and payments for each administration. (2) If a single bank account is kept for 2 or more administrations, the trustee must collectively reconcile the records for the individual administrations with the bank records each month.

Verifying payments and transfers 2.25 The trustee must verify all payments from an administration, and transfers between estates, by reference to appropriate supporting vouchers and original documents kept on the administration file.

Cash book 2.26 The trustee must regularly reconcile the cash book for an administration with the bank records for the administration, in accordance with the amount of activity in relation to the administration.

[page 891]

PART 3 — STANDARDS FOR TRUSTEES OTHER THAN CONTROLLING TRUSTEES DIVISION 3.1 — APPLICATION Application of Part 3 3.1 This Part applies to: (a) the trustee of the estate of a bankrupt; and (b) the trustee of a personal insolvency agreement; and (c) the trustee of the estate of a deceased person.

DIVISION 3.2 — NOTIFICATION OF ADMINISTRATION Notification of administration 3.2 The notice given by the trustee to the creditors of a bankrupt, debtor or deceased person must include the following information: (a) the name, date of birth, address and occupation of the bankrupt, debtor or legal personal representative of the deceased person; (b) the business name or name of any associated entity or related entity of the bankrupt, debtor or deceased person; (c) the date and type of administration; (d) an outline of matters investigated by the trustee up to the date of the notification; (e) advice about any possible contributions liability of the bankrupt; (f) any matters the trustee has identified as needing further investigation.

DIVISION 3.3 — CREDITORS’ CLAIMS Provable debts in a joint administration 3.3 In conducting an administration in relation to joint bankrupts or debtors, the trustee must ensure that a debt is proved in the appropriate estate.

Evidence relating to proof of debt 3.4 The trustee must ensure that each creditor’s claim or proof of debt in relation to an administration bears evidence of: (a) its admission or rejection; and (b) the reason for its admission or rejection; and (c) the amount for which the claim or proof of debt has been admitted.

Evidence of liability for debt 3.5 (1) If necessary, the trustee must ask a creditor to give evidence in writing in relation to a debt claimed by the creditor: (a) to establish the liability of a bankrupt, a debtor or the estate of a deceased person for the debt; or (b) to identify the estate or property against which the claim should be admitted. (2) If the trustee considers that evidence given under subclause (1) is insufficient for the purposes of paragraph (1)(a) or (b), the trustee, before asking for further information, must have regard to the expected dividend rate and the materiality of the issue requiring clarification. (3) The trustee must keep a copy of any evidence or information relied on in deciding, for the purposes of voting or distributing dividends, whether to accept or reject the creditor’s claim. [page 892]

DIVISION 3.4 — DISTRIBUTION OF DIVIDENDS Creditors’ views to be considered 3.6 The trustee must consider the views of creditors in relation to whether moneys held by the trustee should be: (a) applied to conduct further investigations in relation to the administration; or (b) distributed as a dividend.

Distribution of estate funds

3.7 (1) The trustee must distribute estate funds in a timely manner, having regard to: (a) the complexity of the administration and the claims of creditors; and (b) the amount of funds available for distribution; and (c) the need to retain funds in the estate or property to meet existing or expected commitments. (2) The trustee must make an interim distribution of dividends to creditors unless an existing or expected commitment is likely to account for a significant level of the available funds from the estate or property.

Advice relating to dividends and administration 3.8 The trustee must, when distributing dividends to the creditors of a bankrupt, a debtor or the estate of a deceased person, advise creditors about whether: (a) further dividends are expected to be distributed; or (b) the administration is finalised.

Records 3.9 The trustee must keep a record of the following information for each administration: (a) the name of each creditor who received a dividend; (b) the amount of each admitted claim; (c) the amount of dividend paid to each creditor.

PART 4 — STANDARDS FOR TRUSTEES OF BANKRUPT ESTATES DIVISION 4.1 — APPLICATION Application of Part 4 4.1 This Part applies to: (a) the trustee of the estate of a bankrupt; and (b) the trustee of the estate of a deceased person.

DIVISION 4.2 — ASSETS Identifying assets for vesting 4.2 The trustee must take appropriate steps to identify the assets of the estate of a bankrupt or deceased person that will vest in the trustee, including the following: (a) obtaining and reviewing the statement of affairs of the bankrupt or deceased person; (b) considering the size of the deficiency in the estate for the purpose of finding possible assets or determining whether an issue needs to be investigated; (c) considering the activities and circumstances of the bankrupt or deceased person to decide whether assets disclosed by the bankrupt or the legal representative of [page 893] the deceased person are consistent with what would be expected of a bankrupt having a similar background or undertaking a similar activity; (d) if the bankrupt is or was, or the deceased person was, involved in significant corporate or trust activity — making inquiries of third parties (for example, solicitors, accountants, creditors, associated entities and financial institutions) to establish whether there is any divisible property or antecedent transactions.

Protecting certain assets 4.3 The trustee must take appropriate steps to protect assets with a commercial value that have vested in him or her, including doing any or all of the following: (a) ensuring that the assets are adequately insured; (b) taking possession of the assets; (c) perfecting legal ownership of the assets.

DIVISION 4.3 — CONTRIBUTIONS Application of Division 4.3 4.4 This Division applies to the trustee of the estate of a bankrupt.

Income and contribution assessment 4.5 (1) The trustee must, as soon as possible after all necessary information has been made available, make an assessment of: (a) the income of a bankrupt in respect of a contribution assessment period; and (b) the contribution that the bankrupt is liable to pay. (2) The trustee must: (a) act fairly and reasonably in determining the time for payment of contributions liability; and (b) if full payment within the contribution assessment period or before discharge would cause hardship to the bankrupt, consider giving the bankrupt an extension of the time for payment of contributions liability. (3) The trustee must give the bankrupt a copy of the assessment of income and contributions liability, setting out and explaining the basis on which the amount of any contributions liability has been calculated.

Monitoring payment of contributions 4.6 The trustee must: (a) monitor the payment of contributions by a bankrupt to ensure the contributions liability is discharged; and (b) if necessary, take appropriate steps to recover contributions that remain unpaid after the time for payment has passed.

PART 5 — STANDARDS FOR CONTROLLING TRUSTEES Application of Part 5 5.1 This Part applies to a controlling trustee.

Notification of administration 5.2 The notice given by the controlling trustee to the creditors of the debtor

must include the debtor’s name, date of birth, address and occupation. [page 894]

Investigating debtor’s property and income 5.3 (1) As soon as practicable after an authority under section 188 of the Act becomes effective, the controlling trustee must conduct appropriate investigations of the debtor’s property and income. (2) If the debtor’s property includes significant real estate, company structures or motor vehicles, the controlling trustee must: (a) search the appropriate registries for information about the property; and (b) obtain advice from an independent expert about the value of the property. (3) If the debtor was or is involved in significant corporate or trust activity, the controlling trustee must take appropriate steps to identify the assets of the debtor that will be subject to the personal insolvency agreement, including making inquiries of third parties (for example, solicitors, accountants, creditors, associated entities and financial institutions) to establish whether there is any divisible property or antecedent transactions.

Report to creditors 5.4 The controlling trustee’s report under section 189A of the Act must also include the following: (a) information about each matter mentioned in subsection 188A(2) of the Act; (b) the basis on which the debtor’s property has been valued; (c) the kind of investigations the controlling trustee has carried out and whether any other matters need to be investigated; (d) the reasons for the controlling trustee’s opinion about whether creditors’ interests would be better served by accepting the debtor’s proposal for dealing with the debtor’s affairs under Part X of the Act or by the bankruptcy of the debtor.

Records 5.5 The controlling trustee must ensure that: (a) bank accounts maintained in accordance with sections 168 and 169 of the Act; and (b) records maintained in accordance with section 173 of the Act in respect of all transactions relating to the debtor’s property; are kept separate from records relating to any later administration that takes place in relation to the debtor.

Voting at creditors’ meeting 5.6 In deciding whether a creditor is entitled to vote at a meeting of creditors, the controlling trustee must: (a) have regard to the merits of the creditor’s claim; and (b) act impartially and independently, without regard to the debtor’s wishes.

[page 895]

[90,195]

SCHEDULE 5 — MODIFICATIONS UNDER SECTION 185A OF THE ACT — MEETINGS TO CONSIDER PROPOSALS RELATING TO DEBT AGREEMENTS (regulation 9.01) [Sch 5 rep SLI 138 of 2007 reg 3 and Sch 2[9], opn 1 July 2007]

[page 896]

[90,245]

SCHEDULE 6 — MODIFICATIONS IN RELATION TO PART X OF THE ACT (regulations 10.01, 10.05, 10.07, 10.08 and 10.13) [Sch 6 subst SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004]

PART 1 — MODIFICATIONS OF PART X OF THE ACT — JOINT DEBTORS

Section 187A omit

1

This Part

insert (1) This Part

Section 187A insert

2

(2) In the application of this Part (other than subsection 187(1A)) to joint debtors, whether partners or not, an expression specified in one of the following rules of interpretation applies to the extent that the context reasonably permits: (a) ‘a debtor’ is to be read as ‘joint debtors’; (b) ‘the debtor’ is to be read as ‘the joint debtors’; (c) ‘the debtor’s’ is to be read as ‘the joint debtors’; (d) if used in relation to a debtor: (i) ‘he or she’ is to be read as ‘they’; and (ii) ‘his or her’ is to be read as ‘their’; and (iii) ‘him or her’ is to be read as ‘them’; and (iv) a noun or verb in the singular form is to be read as being in the plural form. (3) Subsection (2) applies, subject to any specific modifications of this Part by the Bankruptcy Regulations 1996. (4) To the extent that the context reasonably permits, a reference (by operation of subsection (2)) to joint debtors includes a reference to any of the joint debtors. (5) A reference to the affairs, or examinable affairs, of a debtor includes a reference to the separate affairs, or separate examinable affairs, of a joint debtor.

Subsection 188(1) omit

3

A debtor

insert If each joint debtor is a person

Subsection 188(1) before

4

may sign

insert the joint debtors

[page 897]

Subsections 188(2AA) and (2AB) 5

omit

the debtor

insert each joint debtor

Subsection 188(2C) omit the second occurrence of

6

the debtor

insert each joint debtor

Subsection 188(2D) omit the second occurrence of

7

the debtor

insert each joint debtor

Subsection 188(4) before

8

debtor

insert joint

Subsection 188(5) 9

[cl 9 rep SLI 287 of 2010 reg 3 and Sch 1[15], opn 1 Dec 2010]

Paragraphs 188A(2)(a) and (c) omit

10

the debtor’s

insert each joint debtor’s

Paragraph 188A(2)(e) omit

11

the debtor

insert each joint debtor

Paragraph 188A(2)(l) omit

12

the debtor

insert each joint debtor

[page 898]

Subsection 189AB(1) 13

omit

(1) When the debtor’s property becomes subject to control under this Division, the debtor’s property is charged with:

insert (1) When the property of joint debtors becomes charged under this Division, the charges specified in subsection (1A) are created with respect to:

After subsection 189AB(1) insert

14

(1A) The charges are: (a) a charge over the joint property of the joint debtors; and (b) a separate charge over the separate property of each joint debtor.

Subsection 189AB(2) omit

15

the charge is not affected

insert none of the charges is affected

Subsections 189AB(3) and (4) omit

16

The charge

insert Each charge

Paragraph 189A(1)(a) substitute

17

(a) summarising and commenting on the information about: (i) the joint estates of the joint debtors; and (ii) the separate estate of each joint debtor; that is available to the controlling trustee; and

PART 2 — MODIFICATIONS OF DIVISION 5 OF PART IV OF THE ACT — MEETINGS CALLED UNDER AUTHORITIES UNDER SECTION 188 OF THE ACT Subsection 63A(1), definition of “joint bankruptcy”, subparagraph (d)(ii) omit

1

jointly.

insert

jointly; or

Subsection 63A(1), definition of “joint bankruptcy”, after paragraph (d) 2

insert (e) the situation arising out of the signing, by joint debtors for the purposes of section 188, of a joint authority or separate authorities for the administration of their joint estate.

[page 899]

Subsection 64A(2) 3

substitute

(2) Notice of a meeting: (a) for the first meeting of creditors — must be published in a manner approved by the Inspector-General; and (b) for any other meeting of creditors — must be given in a manner specified in the regulations. [cl 3 subst SLI 4 of 2006 reg 3 and Sch 1 [14], opn 17 Feb 2006]

After subsection 64A(2) 3A

insert

(3) The notice of the first meeting of creditors must include any matter approved by the Inspector-General. (4) For the purposes of paragraph (2)(a) and without limiting the power of the Inspector-General under that paragraph, the Inspector-General may: (a) approve, as the manner of publication of the notice of the first meeting of creditors, publication on a website; and (b) specify in the approval: (i) the website where the notice must be published; and (ii) any conditions relating to the approval. Example: The Inspector-General may specify: (a) the format in which the notice is to be made available; and (b) the period of time for which the notice must remain on the website; and (c) whether related documents are to be made available for downloading from the website or in hard copy. (5) An approval made by the Inspector-General for the purposes of paragraph (2)(a) or subsection (3) must be published on the Insolvency and Trustee Service Australia’s website. [cl 3A insrt SLI 4 of 2006 reg 3 and Sch 1 [14], opn 17 Feb 2006]

After section 64A 3B

insert

Immunity from civil actions and proceedings 64AA (1) A civil action or proceeding does not lie against a person who operates a website, specified in an approval for the purposes of paragraph 64A(2)(a) or subsection 64A(3), in respect of a publication of a notice of the first meeting of creditors (or a notice that appears to be a notice of the first meeting of creditors) if the publication was made in good faith and without negligence. (2) Nothing in this section affects by implication any other ground of defence. [cl 3B insrt SLI 4 of 2006 reg 3 and Sch 1 [14], opn 17 Feb 2006]

After subsection 64B(5) insert

4

(6) If the meeting is the first meeting of creditors called under an authority given under section 188, the notice must state that an information sheet about Part X, dealing with the following matters, may be obtained from the Insolvency and Trustee Service Australia: (a) meetings under Part X; (b) controlling trustees; (c) the administration of an authority under section 188; (d) the application of Part X to an authority under section 188; (e) personal insolvency agreements; (f) the rights of creditors under Part X.

[page 900]

After paragraph 64D(aa) insert

5

(ab) whether the creditor, in relation to the debtor, is a related entity; and

Paragraph 64G(g) substitute

6

(g) if the meeting is the first meeting — tabling of the following documents: (i) the statement of affairs, and the proposal for dealing with them, required by subsection 188(2C) or (2D); (ii) the report by the controlling trustee required by section 189A; (iii) the written statement by the controlling trustee required by section 189B;

Section 64P, heading substitute

7

64P Controlling trustee to preside at meeting under section 188

Subsections 64P(1) and (2) substitute

8

(1) Subject to subsection (2), the controlling trustee must preside at a meeting called under an authority under section 188. (2) The creditors and their representatives may:

(a) vote to remove the controlling trustee as President; and (b) nominate another person to preside at the meeting.

Subsection 64P(6) omit each mention of

9

the trustee

insert the controlling trustee

Subsection 64P(7) omit

10

the trustee

insert the controlling trustee

Subsection 64R(1) substitute

11

(1) If the meeting is the first meeting, the President must then request the controlling trustee to lay before the meeting the documents specified in paragraph 64G(g), and the controlling trustee must comply with the request.

Subsection 64R(2) omit

12

the statement of affairs,

insert those documents,

[page 901]

Subsection 64U(1) 13

substitute

(1) At the first meeting called under an authority under section 188 that is attended by: (a) the controlling trustee; or (b) if the creditors have passed a special resolution under paragraph 204(1)(b) — the trustee of a personal insolvency agreement; the President must ask the trustee to state the basis on which he or she wishes to be remunerated.

Before subsection 64Y(1) 14

insert

(1A) The controlling trustee may adjourn a meeting to undertake further investigations, in relation to the controlling trusteeship, that the controlling trustee considers necessary. (1B) The creditors attending the meeting may, by special resolution, revoke the trustee’s decision to adjourn the meeting.

After subsection 64ZC(5) 15

insert

(5A) An instrument appointing a proxy must include: (a) a statement disclosing whether or not the creditor has received, or will receive, a financial incentive: (i) to appoint the proxy; or (ii) to direct the proxy as to the manner in which the proxy is to vote on a particular matter or matters that may arise, or on a particular motion or motions that may be proposed, at a meeting to which the proxy relates; and (b) if the proxy or creditor has received, or will receive, a financial incentive in relation to a matter mentioned in paragraph (a) — a statement specifying the amount of financial incentive paid or to be paid and the name of the person who paid, or is to pay, the financial incentive. [cl 15 subst SLI 137 of 2006 reg 3 and Sch 1[16], opn 1 July 2006]

After subsection 64ZE(2) 16

insert (3) This section applies in relation to a personal insolvency agreement only if: (a) a joint estate forms part of the property that is to be dealt with under the agreement; and (b) the agreement does not specifically provide for distribution of the joint estate.

PART 3 — MODIFICATIONS OF PART VIII OF THE ACT — CONTROLLING TRUSTEES AND TRUSTEES OF PERSONAL INSOLVENCY AGREEMENTS

Before Part VIII, Division 1 insert in Part VIII

1

DIVISION 1A — INTERPRETATION Interpretation 154AA In this Part, in its application to Part X, a reference to a registered trustee includes a reference to a controlling trustee and a trustee of a personal insolvency agreement.

[page 902]

Section 156A omit

2

Subsection 157(1) substitute

3

(1) If: (a) the Official Trustee is: (i) under section 188 or 192, the controlling trustee in relation to a debtor; or (ii) under Part X, the trustee of a personal insolvency agreement; and (b) the creditors wish to appoint, in place of the Official Trustee: (i) a registered trustee or a solicitor as the controlling trustee; or (ii) a registered trustee as the trustee of the personal insolvency agreement; the creditors may do so by resolution at a meeting of creditors.

Section 158 substitute

4

Appointment of more than 1 controlling trustee 158 The creditors may appoint 2 or more controlling trustees jointly, or jointly and severally.

Section 159 5

omit

Section 160 substitute

6

Vacancy in position of trustee — Official Trustee to act 160 If at any time there is no controlling trustee in relation to a debtor, or no trustee of a personal insolvency agreement under Part X, the Official Trustee is to act as the trustee.

After subsection 161(1) insert

7

(1A) This section does not apply in relation to a trustee of a personal insolvency agreement.

Subsection 173(1) substitute

8

(1) A controlling trustee who has consented to exercise powers given by an authority under section 188 must keep such accounts and records as are necessary to exhibit a full and correct account of the debtor’s affairs and must permit a creditor: (a) to inspect, at all reasonable times, either personally or by an agent, the accounts and records relating to the controlling trusteeship; and (b) to take a copy of those accounts and records. Penalty: 5 penalty units.

Section 180 omit

9

trustee of an estate.

insert trustee, other than controlling trustee, under Part X.

[page 903]

Section 181 10

substitute

Removal of trustee 181 The creditors may, by resolution, at a meeting of which at least 7 days notice has been given, remove a controlling trustee or the trustee of a personal insolvency agreement and may, at that meeting or a later meeting, appoint another trustee to replace the removed trustee.

Subsection 181A(1) 11

substitute

(1) The current controlling trustee or the current trustee of a personal insolvency agreement may, with the written consent of another trustee (either a registered trustee or the Official Trustee), nominate the other trustee as the new trustee.

Subsection 181A(4) 12

substitute

(4) If no creditor lodges a written notice of objection with the current trustee at least 2 days before the specified date, the new trustee replaces the current trustee on the date specified in the notice.

PART 4 — MODIFICATIONS OF DIVISION 1 OF PART V OF THE ACT — DEBTORS WHOSE PROPERTY IS SUBJECT TO CONTROL UNDER DIVISION 2 OF PART X OF THE ACT

Section 77F substitute

1

Allowances and expenses to be paid out of debtor’s property subject to control under Division 2 of Part X 77F If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the property of a debtor that is subject to control under Division 2 of Part X, any amount payable to the person under section 77D or 77E is to be paid out of that property.

Subsection 81(1) substitute

2

(1) Where a person (in this section called the relevant person) becomes a debtor whose property is subject to control under Division 2 of Part X, the Court or a Registrar may at any time (whether before or after control over that property has ended), on the application of: (a) a person (in this section called a creditor) who has or had a debt that would be provable if the debtor were a bankrupt; (b) the controlling trustee; or (c) the Official Receiver; summon the relevant person for examination in relation to the property that is subject to control under Division 2 of Part X.

[page 904]

PART 5 — MODIFICATION UNDER SUBSECTION 231(1) OF THE ACT — PERSONAL INSOLVENCY AGREEMENTS

Section 77F substitute

1

Allowances and expenses to be paid out of debtor’s property subject to personal insolvency agreement 77F If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the property of a debtor that is subject to a personal insolvency agreement, any amount payable to the person under section 77D or 77E is to be paid out of that property.

PART 6 — MODIFICATIONS UNDER SUBSECTION 231(3) OF THE ACT — PERSONAL INSOLVENCY AGREEMENTS Subsection 113(1) omit

1

presentation of a petition on which, or by virtue of the presentation of which, a person became a bankrupt,

insert making of a sequestration order,

Subsection 113(1) omit

2

or, in the case of a debtor’s petition, the presentation of the petition

After subsection 133(13) insert

3

(14) This section does not apply in relation to a personal insolvency agreement.

After paragraph 134(1)(b) insert

4

(ba) carry on a business of the debtor in accordance with an authorisation given under subsection (5);

After subsection 134(4) insert

5

(5) If a personal insolvency agreement provides for the business of the debtor to be assigned to the trustee, the agreement may: (a) authorise the trustee to carry on a business of a debtor; and (b) specify the period during which, and the conditions (if any) subject to which, the trustee may carry on the business. (6) The creditors may vary or terminate an authority under subsection (5) by passing a special resolution to that effect at a meeting called for the purpose. (7) This section extends only in relation to property of the debtor that is subject to the personal insolvency agreement.

[page 905]

Subsection 136(1) omit

6

Where any property of the bankrupt is subject to a mortgage,

insert Where any property of the debtor that is subject to the personal insolvency agreement is also subject to a mortgage,

Subsection 137(1) omit

7

Where goods of a bankrupt

insert Where goods of a debtor that are subject to a personal insolvency agreement

Paragraphs 138(1)(a) and (b) 8

substitute (a) the property of a debtor that is subject to a personal insolvency agreement includes rights in respect of industrial property; and (b) the debtor is liable to pay royalties or a share of profits to a person in respect of those rights;

Paragraph 138(1)(c)

omit

9

the bankrupt;

insert the debtor;

Paragraph 138(1)(d) 10

omit

the bankrupt

insert the debtor

Paragraphs 139(1)(a) and (b) 11

substitute (a) the trustee has seized or disposed of any goods in the possession or on the premises of a debtor that are subject to a personal insolvency agreement without notice of any claim by any person in respect of those goods; and (b) the goods were not, at the date of execution of the personal insolvency agreement, the property of the debtor;

Subsection 139(2) 12

omit everything after

in respect of property

insert that is subject to the personal insolvency agreement, being rates, land tax or municipal or other statutory charges that fall due on or after the date of execution of the personal

[page 906] insolvency agreement, except to the extent, if any, of the rents and profits received by the trustee in respect of that property on or after the date of execution of the personal insolvency agreement.

Subsection 139(3) 13

substitute

(3) Where the trustee of a personal insolvency agreement carries on a business previously carried on by the debtor, the trustee is not personally liable for any payment in respect of long service leave or extended leave: (a) for which the debtor was liable; or

(b)

to which a person employed by the trustee in his or her capacity as trustee of the personal insolvency agreement, or the legal personal representative of such a person, becomes entitled after the date of execution of the personal insolvency agreement.

Subsection 139(4) 14

omit

trustee of the estate of a bankrupt

insert trustee of a personal insolvency agreement

Section 139ZJ 15

omit

In this Subdivision:

insert (1) In this Subdivision:

Section 139ZJ 16

insert

(2) In sections 139ZK, 139ZL and 139ZP, a reference to a bankrupt is to be read as a reference to a debtor. (3) In subsection (2): debtor means a person who has executed a personal insolvency agreement.

Paragraphs 139ZK(1)(e) and (f) 17

omit

bankruptcy,

insert personal insolvency agreement,

Subsection 139ZL(1) 18

omit everything before paragraph (a), insert

(1) If a debtor is liable to pay a specified amount of his or her income to the trustee in accordance with a personal insolvency agreement, the Official Receiver:

[page 907]

Subsection 139ZL(1) 19

omit

make the contribution.

insert pay that amount.

Paragraphs 139ZL(3)(a) and (b) 20

omit

the contribution

insert the amount of income

Subsection 139ZQ(1)

21

omit

bankrupt under Division 3,

insert personal insolvency agreement because of the application of any of sections 120 to 125,

Subsection 139ZR(3) 22

omit

Division 3.

insert any of sections 120 to 125.

PART 7 — MODIFICATION UNDER SUBSECTION 231(5) OF THE ACT — TRUSTEES OF PERSONAL INSOLVENCY AGREEMENTS Subsection 173(1) substitute

1

(1) The trustee of a personal insolvency agreement must keep such accounts and records as are necessary to exhibit a full and correct account of the administration of the agreement and must permit a creditor of the debtor: (a) to inspect, at all reasonable times, either personally or by an agent, the accounts and records relating to the personal insolvency agreement; and (b) to take a copy of those accounts and records. Penalty: 5 penalty units.

[page 908]

[90,295]

SCHEDULE 7 — MODIFICATIONS UNDER PART XI OF THE ACT — ADMINISTRATION OF ESTATES OF DECEASED PERSONS (regulation 11.02)

Section 49 (Change of petitioners): 1

1.1 Omit “debtor”, substitute “deceased debtor’s estate”.

Section 50 (Taking control of debtor’s property before sequestration) 2 2.1 Subsection 50(1): Omit “debtor, but before the debtor becomes”, substitute “debtor who dies after presentation of a creditor’s petition but before becoming”. 2.2 Paragraph 50(1)(a): Omit “debtor’s property;”, substitute “deceased debtor’s estate;”. 2.3 Paragraph 50(1)(b): Omit “property.”, substitute “estate.”. 2.4 Paragraph 50(1A)(c): Omit “debtor”, substitute “deceased debtor’s legal personal representative”. 2.5 Subsection 50(1B): Omit “debtor’s property”, insert “deceased debtor’s estate”. 2.6 Subsection 50(2): Omit “debtor” (first occurring), substitute “legal personal representative of the deceased debtor”. 2.7 Subsection 50(2): Before “debtor” (second and third occurring), insert “deceased debtor”. 2.8 Subsection 50(3): Omit “debtor and the debtor’s”, substitute “deceased debtor and the debtor’s”. 2.9 Subsection 50(4):

Before “debtor” (twice occurring) and “debtor’s”, insert “deceased”. 2.10 Paragraph 50(5)(a): Omit “a sequestration order had been made against the debtor”, insert “an order had been made for the administration of the estate of the deceased debtor”. 2.11 Paragraph 50(5)(c): Omit “debtor’s bankruptcy if a sequestration”, substitute “administration of the deceased debtor’s estate if an”. 2.12 Section 50: Add at the end: “(6) In this section: “‘legal personal representative’, in relation to a deceased debtor, means: (a) the executor under the deceased debtor’s will; or (b) the administrator under letters of administration or court order; of the deceased debtor’s estate, or a part of that estate.”.

[page 909]

Section 63A (Definitions) 3 Insert the following definition: “legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate;”

Section 64A (Persons to whom notice of meeting to be given) 4 4.1 Paragraph 64A(1)(a): Omit “the bankrupt has told the trustee,”, substitute “before his or her death the deceased person had told the trustee,”.

Section 64B (Certain matters to be included in notice of meeting) 5 5.1 Subsection 64B(1): Before “place”, insert “former”.

Section 64G (Agenda to be set out in notice of meeting) 6 6.1 Paragraphs 64G(a) and (i): Omit “bankrupt;”, substitute “legal personal representative of the deceased person;”.

Section 64J (Preparation of attendance record) 7 7.1 Subsection 64J(3): Omit “bankrupt”, substitute “legal personal representative of the deceased person”.

Section 64K (Opening of meeting) 8 8.1 Subsection 64K(2): Omit “bankrupt” (first occurring), substitute “legal personal representative of the deceased person”. 8.2 Subsection 64K(2): Omit “the bankrupt.” (second occurring), substitute “the legal personal representative.”. 8.3 Subsections 64K(3) and (6): Omit “the bankrupt” (wherever occurring), substitute “the legal personal representative”.

Section 64L (Appointment of minutes secretary) 9 9.1 Subsection 64L(2): Omit “bankrupt”, substitute “legal personal representative of the deceased person”.

Section 64P (Election of person to preside at meeting) 10 10.1 Subsection 64P(2): Omit “bankrupt”, substitute “legal personal representative of the deceased person”.

Section 64S (Statements and questions) 11 11.1 Subsection 64S(2): Omit “bankrupt” (first occurring), substitute “legal personal representative of the deceased person”.

[page 910] 11.2 Subsection 64S(2): Omit “the bankrupt.” (second occurring), substitute “the legal personal representative.”. 11.3 Subsection 64S(3): Omit “bankrupt”, substitute “legal personal representative”.

Section 64Z (Duties of minutes secretary) 12 12.1 Paragraph 64Z(5)(d): Omit “bankrupt,”, substitute “legal personal representative of the deceased person,”.

Section 64ZC (Appointment of proxies) 13 13.1 Subsection 64ZC(6): Omit “bankrupt” (first occurring), substitute “legal personal representative of the deceased person”. 13.2 Subsection 64ZC(6): Omit “the bankrupt” (second occurring), substitute “the legal personal representative”.

Section 73 (Composition or arrangement) 14 14.1 Subsection 73(1): Omit “a bankrupt”, substitute “the legal personal representative of a deceased person”. 14.2 Subsection 73(1): Omit “his or her” (wherever occurring), substitute “the deceased person’s”. 14.3 Subsection 73(2A): Omit “bankrupt’s”, substitute “deceased person’s”. 14.4 Subsection 73(3): Omit “bankrupt”, substitute “legal person representative”. 14.5 Section 73: Add at the end: “(6) In this section:

legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

Section 74 (Annulment of bankruptcy) 15

15.1 Omit the section, substitute:

“Annulment of administration 74 (1) A special resolution under subsection 73(4) takes effect on the date on which it is passed to annul the administration of the estate to which it relates. “(2) As soon as practicable after that date the trustee of the estate must give to the Official Receiver a certificate, signed by the trustee, of the following matters: (a) the name of the estate; (b) the number of the administration; (c) the terms and date of the special resolution. “(3) The Official Receiver must enter those matters in the official records.”.

Section 75 (Effect of composition or scheme of arrangement) 16 16.1 Subsection 75(2): Omit the subsection. [page 911] 16.2 Subparagraphs 75(4)(b)(i), (ii), (iii) and (iv): Omit the subparagraphs, substitute: “(i) the creditors or the estate of the deceased person will suffer injustice or undue delay if the composition or scheme of arrangement proceeds; or (ii) the approval of the creditors resulted from a misrepresentation by the legal personal representative; or (iii) it is desirable that the deceased person’s: (A) affairs be investigated; or (B) estate be administered; under this Act; or (iv) it is likely that the creditors will receive a greater

dividend if the estate is again administered under this Act;”. 16.3 Subsection 75(4): Omit “trustee”, substitute “trustee, the legal personal representative”. 16.4 Subsection 75(6), (7) and (8): Omit the subsections, substitute: “(6) In this section: legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

Section 81 (Discovery of bankrupt’s property etc.) 17 17.1 Subsection 81(1): Omit the subsection, substitute: “(1) At any time during or after the administration under Part XI of the estate of a deceased person (in this section called ‘the relevant person’), the Court may, on the application of: (a) a person (in this section called a ‘creditor’) who has or had a debt provable in the administration; or (b) the trustee of the estate; or (c) the Official Receiver; summon an examinable person in relation to the estate for examination in relation to the administration. “(1AA) For the purposes of subsection (1): ‘examinable person’, in relation to an estate of the relevant person, means: (a) a person who is believed to be indebted to the estate; or (b) a person who may be able to give information the relevant person or the examinable affairs of the relevant person; or (c) a person who has possession of books that may relate to: (i) the relevant person; or (ii) the examinable affairs of the relevant person; or (iii) the estate; or (d) the executor under the relevant person’s will; or (e) the administrator under letters of administration or court order; of the relevant person’s estate, or a part of that estate.

17.2 Subsection 81(1B): Omit paragraph (b), substitute:

[page 912] “(b) relate to: (i) the relevant person; or (ii) the examinable affairs of the relevant person; or (iii) the estate.”.

17.3 Subsection 81(11AA): Omit the subsection. 17.4 Subsection 81(12): Before “relevant person” (first occurring), insert “estate of the”. 17.5 Subsection 81(14): Omit “person, other than the relevant person,”, substitute “person”.

Section 82 (Debts provable in bankruptcy) 18 18.1 Subsection 82(1): Omit all the words from and including “a bankrupt” to the end, substitute “the estate of a deceased person was subject at the date of the order for the administration of the estate, or to which the estate may become subject because of an obligation incurred before that date, are provable in the administration of the estate.”. 18.2 Subsection 82(1A): Omit “bankrupt under a maintenance agreement or maintenance order before the date of the bankruptcy.”, substitute “by the deceased person under a maintenance agreement or maintenance order during the person’s lifetime and before the date of the order for the administration of the person’s estate.”. 18.3 Paragraph 82(8)(b): Omit “discharge of the bankrupt;”, substitute “end of the administration of the deceased person’s estate;”.

Section 87 (Deduction of discounts) 19 19.1 Omit “debtor had not become a bankrupt.”, substitute “estate had not become subject to administration under Part XI.”.

Section 88 (Apportionment to principal and interest of payments made before bankruptcy)

20 20.1 Omit “by a debtor to a creditor before the debtor became a bankrupt”, substitute: “to a creditor by: (a) the deceased person before his or her death; or (b) the deceased person’s estate before the date of the order for the administration of the estate;”.

Section 95 (Proof in respect of distinct contracts) 21 21.1 Omit “person was, at the time when he or she became a bankrupt,”, substitute “deceased person whose estate is being administered under Part XI was, at the date of his or her death,”.

Section 104 (Appeal against decision of trustee in respect of proof) 22 22.1 Subsection 104(1): omit bankrupt

[page 913] insert legal personal representative of the bankrupt

22.2 After subsection 104(1): insert “(1A) An application may be made under subsection (1) on the grounds that the proof was wrongly admitted.”.

22.2 After subsection 104(3): insert “(4) In this section: legal personal representative, for a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”. [cl 22 subst SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

Section 109 (Priority payments) 23

23.1 Paragraph 109(1)(a):

After “petitioning creditor”, insert “or the trustee of the deceased person’s estate”. 23.2 Paragraph 109(1)(b): Omit the paragraph.

Section 109A (Debts due to employees) 24 24.1 Subsection 109A(1): Omit the subsection, substitute: “Where: (a) a contract of employment with a person who has since died and whose estate is being administered under Part XI was subsisting immediately before the date of the person’s death; or (b) a contract of employment with the trustee, in his or her capacity as trustee, of an estate that is being administered under Part XI was subsisting immediately before the date of the order for the administration; 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: (c) where paragraph (a) applies: (i) by the person; and (ii) on the date; mentioned in that paragraph; or (d) where paragraph (b) applies: (i) by the trustee; and (ii) on the date; mentioned in that paragraph.”.

24.2 Subsection 109A(2): After “trustee” (twice occurring), insert “or legal personal representative”. 24.3 After subsection 109A(2), insert: “(2A) In subsection (2): legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

[page 914]

Section 110 (Application of estates of joint debtors)

25

25.1 Omit the section.

Section 114 (Payment of liabilities etc. incurred under terminated deed etc) 26 26.1 Omit “becomes a bankrupt”, substitute “dies, and his or her estate becomes subject to administration under Part XI,”.

Section 116 (Property divisible among creditors) 27

27.1 After subsection 116(1), insert:

“(1A) In the application of this section to Part XI, a reference in subsection (1) to the discharge of a bankrupt is taken to be a reference to the termination of the administration, under that Part, of the estate of the deceased person.”.

27.2 Paragraphs 116(2)(c) and (ca): Omit the paragraph. 27.3 Paragraph 116(2)(g): Omit the paragraph, substitute: “(g) any right of the estate of the deceased person to recover damages or compensation: (i) for personal injury (including injury resulting in death) or wrong done to the deceased person in his or her lifetime; or (ii) for personal injury (including injury resulting in death) or wrong done to the spouse or a member of the family of the deceased person (whether the injury or wrong was done before or after the death of the deceased person); “(h) any damages or compensation recovered by the deceased person in his or her lifetime, or by the estate of the deceased person, in respect of an injury or wrong specified in subparagraph (g)(i) or (ii);”.

27.4 Subsection 116(2B): Omit “(c) or (ca),”. 27.5 Subsection 116(2C): Omit the subsection.

Section 117 (Policies of insurance against liabilities to third parties) 28 28.1 Paragraph 117(1)(b): Omit “(whether before or after he or she became a bankrupt);”, substitute “at any time;”.

Section 118 (Execution by creditor against property of debtor who becomes a bankrupt etc)

29 29.1 Paragraph 118(1)(a)(i): Omit “the presentation of a petition, or after the presentation of a petition, against a”, substitute “the making of an order under Part XI, or after the making of such an order, for the administration of the estate of a deceased”. 29.2 Subparagraph 118(1)(a)(ii): Omit “and”. 29.3 Paragraph 118(1)(b): Omit the paragraph. 29.4 Subsections 118(1), (3) and (4): Omit “bankrupt” (wherever occurring), substitute “debtor”. 29.5 Subsection 118(3): Omit “bankruptcy”, substitute “administration of the estate”. [page 915] 29.6 Paragraph 118(9)(a): Omit “the presentation of a petition, or after the presentation of a petition, against a”, substitute “the making of an order under Part XI, or after the making of such an order, for the administration of the estate of a deceased”. 29.7 Subsection 118(9): Omit “in the bankruptcy.”, substitute “of the estate.”. 29.8 Subsection 118(10): Omit “debtor,” (twice occurring), substitute “deceased person’s estate”. 29.9 Paragraphs 118(11)(a) and (b): Omit “who, after the sale, becomes a bankrupt;”, substitute “who dies and whose estate becomes, or of a deceased person’s estate that becomes, after the sale, subject to an administration order under Part XI;”. 29.10 Subsection 118(11): Omit “of the bankrupt”.

Section 119 (Duties of sheriff after receiving notice of presentation of petition etc)

30 30.1 Subsection 119(1): Omit “against a debtor”, substitute “for an order for the administration of a deceased person’s estate”. 30.2 Paragraphs 119(1)(a) and (b): Omit “debtor” (wherever occurring), substitute “estate”. 30.3 Subsection 119(2): Omit “the reference to the Court of a debtor’s petition against a debtor”, substitute “the presentation to the Court of a petition by a person administering the estate of a deceased person for an order for the administration of the estate”. 30.4 Paragraphs 119(2)(a) and (b): Omit “debtor” (wherever occurring), substitute “estate”. 30.5 Subsection 119(3): Omit “a creditor’s petition against a debtor has been given under subsection (1) to a sheriff or notice of the reference to the Court of a debtor’s petition against a debtor has been given under subsection”, substitute “a petition has been given under subsection (1) or”. 30.6 Subsection 119(3): Omit “the debtor” (wherever occurring), substitute “the estate”. 30.7 Subsection 119(4): Omit “against a debtor”, substitute “for an order for the administration of a deceased person’s estate”. 30.8 Paragraphs 119(4)(a) and (b): Omit “debtor” (wherever occurring), substitute “estate”. 30.9 Subsection 119(5): Omit “the reference to the Court of a debtor’s petition against a debtor”, substitute “the presentation to the Court of a petition by a person administering the estate of a deceased person for an order for the administration of the estate”. 30.10 Paragraphs 119(5)(a) and (b): Omit “debtor” (wherever occurring), substitute “estate”. 30.11 Subsection 119(6): Omit “against a debtor”, substitute “for an order for the administration of a

deceased person’s estate”. [page 916] 30.12 Subsection 119(6): Omit “the debtor” (wherever occurring), substitute “the estate”. 30.13 Subsection 119(7): Omit “a debtor”, substitute “a deceased person’s estate”. 30.14 Subsection 119(7): Omit “the debtor becomes a bankrupt”, substitute “the estate is administered under Part XI”.

Section 119A (Duties of sheriff after receiving notice of bankruptcy etc) 31 31.1 Subsection 119A(1): Omit “has become a bankrupt”, substitute “has died, and his or her estate has become subject to administration under Part XI,”. 31.2 Subparagraph 119A(1)(a)(i): Omit “bankrupt”, substitute “estate”. 31.3 Subparagraph 119A(1)(a)(ii): Omit “bankrupt” (first occurring), substitute “estate”. 31.4 Subparagraph 119A(1)(a)(ii): Omit “bankrupt became a bankrupt,” (twice occurring), substitute “debtor died,”. 31.5 Subparagraph 119A(1)(a)(ii): Omit “bankrupt” (third occurring), substitute “debtor or estate”. 31.6 Subparagraph 119A(1)(a)(iii): Omit “bankrupt;”, substitute “estate;”. 31.7 Subparagraph 119A(1)(b)(i): Omit “the bankrupt” (first and third occurring), substitute “the estate”. 31.8 Subparagraphs 119A(1)(b)(i) and (ii): Omit “bankrupt became a bankrupt,”, substitute “debtor died,”.

31.9 Subparagraph 119A(1)(b)(ii): Omit “to the bankrupt;”, substitute “to the estate;”. 31.10 Subsection 119A(5): Omit the subsection. 31.11 Paragraph 119A(6)(a): Omit “bankrupt”, substitute “deceased person”. 31.12 Paragraph 119A(6)(b): Omit “bankrupt”, substitute “estate”. 31.13 Subsection 119A(7): Omit “a bankrupt”, substitute “the estate of a deceased person”.

Section 122 (Avoidance of preferences) 32 32.1 Subsection 122(1): Omit “insolvent (the debtor)”, substitute “insolvent and who subsequently dies (the deceased debtor)”. 32.2 Subsection 122(1): Omit “in the debtor’s bankruptcy”, substitute “of the deceased debtor’s estate being administered under Part XI”. 32.3 Paragraph 122(1)(b): Omit the paragraph (including the table), substitute: [page 917] “(b) was made in the period beginning 6 months before the presentation of the petition for an order for the administration of the estate and ending immediately before the date of the order.”.

32.4 Subsection 122(1A): Omit “debtor”, substitute “deceased debtor before his or her death”. 32.5 Paragraphs 122(1A)(a) and (b): Before “debtor”, insert “deceased”. 32.6 Paragraph 122(1A)(b): Before “debtor’s”, insert “deceased”. 32.7 Paragraph 122(2)(b):

After “debtor”, insert “or the estate of the deceased debtor”. 32.8 Subsection 122(4A): After “debtor” (twice occurring), insert “or the estate of the deceased debtor”.

Section 123 (Protection of certain transfers of property against relation back etc) 33 33.1 Subsection 123(1): Omit “becomes a bankrupt:”, substitute “has died, and his or her estate has become subject to administration under Part XI:”. 33.2 Paragraphs 123(1)(a), (b) and (c): After “debtor” insert “before he or she died”. 33.3 Paragraph 123(1)(e): Omit “before the day on which the debtor became a bankrupt;”, substitute “on or before the day on which the debtor died;”. 33.4 Subsection 123(4): Before “debtor”, insert “deceased”. 33.5 Subsection 123(4): Omit “became a bankrupt,”, substitute “died,”. 33.6 Subsection 123(6): Omit “a debtor becomes”, substitute “a deceased debtor before his or her death became”. 33.7 Subsection 123(6): Before “debtor” (second and third occurring), insert “deceased”.

Section 124 (Protection of certain payments to bankrupt etc) 34 34.1 Subsection 124(1): Omit “becomes, or has become, a bankrupt”, substitute “has died, and his or her estate has become subject to administration under Part XI”. 34.2 Paragraph 124(1)(a): After “made”, insert “on or”. 34.3 Paragraph 124(1)(a): Omit “becomes a bankrupt”, substitute “dies”. 34.4 Paragraph 124(1)(b):

Omit “on or”. 34.5 Paragraph 124(1)(b): Omit “became a bankrupt”, substitute “died”. [page 918]

Section 125 (Certain accounts of undischarged bankrupt) 35 35.1 Subsection 125(1): Omit “an undischarged bankrupt”, substitute “deceased and that his or her estate is being administered under Part XI”.

Section 126 (Dealings with undischarged bankrupt in respect of after-acquired property) 36

36.1 Omit the section.

Section 127 (Limitation of time for making of claims by trustee etc) 37 37.1 After subsection 127(1), insert: “(A) In the application of Part XI to this section, the reference in subsection (1) to the date on which a person became bankrupt is taken to be a reference to the date on which administration of a deceased person’s estate commenced.”.

Section 134 (Powers exercisable at discretion of trustee) 38 38.1 Paragraph 134(1)(m): Omit “the bankrupt:” (first occurring), substitute “the legal personal representative of a deceased person:”. 38.2 paragraph 134(1)(m)(i): Omit “the bankrupt;”, substitute “the estate of the deceased person;”. 38.3 Subparagraph 134(1)(m)(ii): Omit “bankrupt’s” (twice occurring), substitute “estate’s”. 38.4 Subparagraph 134(1)(m)(iii): Omit “bankrupt;”, substitute “estate”.

38.5 Paragraph 134(1)(m): Omit “bankrupt’s services, make such allowance to the bankrupt”, substitute “services of the legal personal representative of the deceased person, pay such remuneration to him or her”. 38.6 Paragraphs 134(1)(n) and (o): Omit “the bankrupt”, substitute “the estate of the deceased person”. 38.7 After subsection 134 (1), insert: “(1AA) In subsection (1): legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

38.8 Subsection 134(1A) Omit “An allowance made to the bankrupt”, substitute “Remuneration paid to the legal personal representative of a deceased person”.

Section 134 (Powers exercisable at discretion of trustee) 39 39.1 Paragraphs 134(1)(b) and (c): Omit “the bankrupt;”, substitute “the estate of the deceased person;”. [subcl 39.1 am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

39.2 Paragraph 134(1)(ma): Omit the paragraph, substitute: [page 919] “(j) pay such remuneration out of the estate of the deceased person as he or she thinks fit to the legal personal representative of the deceased person.”. [subcl 39.2 am SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

39.3 Section 134: Add at the end: “(5) In this section: legal personal representative, for a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”. [subcl 39.3 subst SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003]

Section 138 (Limitation on trustee’s power in respect of copyright, patents etc) 40 40.1 Paragraph 138(1)(a): Omit “bankrupt”, substitute “estate of a deceased person”. 40.2 Paragraphs 138(1)(b), (c) and (d): Omit “bankrupt”, substitute “estate”.

Section 139ZL (Official Receiver may require persons to make payments) 41 41.1 Subsection 139ZL(6): Omit “bankrupt”, substitute “legal personal representative of the deceased person”. 41.2 After subsection 139ZL(6), insert: “(6A) In subsection (6): legal personal representative in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

Section 139ZQ (Official Receiver may require payment) 42 42.1 Subsection 139ZQ(5): Omit “bankrupt”, substitute “legal personal representative of the deceased person”. 42.2 After subsection 139ZQ(5), insert: “(5A) In subsection (5): legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

Section 143 (Provision to be made for creditors residing at a distance etc) 43 43.1 Paragraph 143(a): Omit “bankrupt’s statement of”, substitute “statement of a deceased person’s”.

Section 146 (Distribution of dividends where bankrupt fails to

file statement of affairs) 44 44.1 Omit “a bankrupt”, substitute “the legal personal representative of a deceased person”. 44.2 Omit “his or her affairs” (twice occurring), substitute “the deceased person’s affairs”. 44.3 Omit “bankrupt” (second occurring), substitute “legal personal representative”. [page 920]

Section 156A (Consent to act as trustee) 45 45.1 Paragraph 156A(1)(a): Before “debtor” (first occurring), insert “deceased”. 45.2 Paragraphs 156A(1)(a) and (3)(a): Omit “debtor becomes a bankrupt;”, substitute “deceased debtor’s estate is administered under Part XI;”. 45.3 Paragraph 156A(3)(a): Omit “estate of the bankrupt;”, substitute “estate;”.

Section 161B (Trustee’s remuneration — minimum entitlement) 46 46.1 Subsection 161B(2): Omit the subsection.

Section 162 (Trustee’s remuneration — general) 47 47.1 Subsection 162(3): Omit “bankrupt” (second occurring), representative of the deceased person”. 47.2 After subsection 162(3), insert:

substitute

“legal

“(3A) In subsection (3): legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

personal

Section 170 (Trustee to give Official Receiver and bankrupt information etc) 48 48.1 Subsection 170(2): Omit the subsection, substitute: “(2) At the request of the legal personal representative of the deceased person, the trustee must give to the legal personal representative information reasonably required by the legal personal representative concerning the affairs of the deceased person. “(3) In subsection (2): legal personal representative, in relation to a deceased person, means: (a) the executor under the deceased person’s will; or (b) the administrator under letters of administration or court order; of the deceased person’s estate, or a part of that estate.”.

[page 921]

[90,345]

SCHEDULE 8 — INFORMATION ON THE NATIONAL PERSONAL INSOLVENCY INDEX (regulation 13.03)

[Sch 8 am SR 76 of 1997 reg 37; SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002; SR 76 of 2003 reg 3 and Sch 1, opn 5 May 2003; SR 256 of 2004 reg 3 and Sch 1, opn 1 Dec 2004; SLI 4 of 2006 reg 3 and Sch 1 [16]–[28], opn 17 Feb 2006; SLI 138 of 2007 reg 3 and Sch 1[2], opn 14 June 2007; SLI 138 of 2007 reg 3 and Sch 2[10], opn 1 July 2007; SLI 51 of 2013 s 4 and Sch 1 item 10, opn 11 Apr 2013] Note: References in this Schedule to sections, subsections and paragraphs are references to those provisions of the Act. Item No

Provision of the Act

Document from which information may be entered in the Index

Person who must give the document to the Official Receiver

Period within which the document must be provided to the Official Receiver

Information to be entered in the Index

1

Section 50 trustee to take control of debtor’s property before sequestration

court order

applicant (creditor)

as soon as practicable

• date of order • particulars of debtor • date when trustee’s control ends (subsection 50(1B))

2

Sections 43 and 47 creditor’s petition petitioning creditor’s petition and verifying creditor affidavit (subsections 47(1) and (1A))

within 3 • date of petition working days • particulars of debtor • name of petitioning creditor • name and telephone number of petitioning creditor’s solicitors • date of court

hearing for sequestration order

[page 922] 3

Section 43 sequestration order

sequestration order (subsection 43(1), section 52)

Creditor who within 2 days obtained the order (subsection 52(1A))

4

Section 55 debtor’s petition

debtor’s petition debtor and statement of (subsection affairs (subsection 55(1)) 55(2))

not applicable

• date of order • particulars of bankrupt • name of petitioning creditor • name and telephone number of petitioning creditor’s solicitors • name of trustee • date of filing of Statement of Affairs • particulars of debtor • date of acceptance (or, if the Court orders the Official Receiver to accept the petition, the date of commencement of the bankruptcy (subsection 55(3B)) • name of trustee • date of filing of Statement of Affairs

[page 923] 5

Section 56B debtor’s petition

debtor’s petition and statements of

petitioning partners

not applicable

• particulars of each

against partnership affairs (section 56B)

(subsection 56A(1))

debtor/partner • date of acceptance (or, if the Court orders the Official Receiver to accept the petition, the date of commencement of the bankruptcy of each partner (section 56C) • name of trustee • date of filing of Statement of Affairs

6

Section 57 debtor’s petition by joint debtors who are not partners

debtor’s petition and statements of affairs (subsection 57(2))

2 or more petitioning debtors (subsection 57(1))

not applicable

• particulars of each debtor • date of acceptance (or, if the Court orders the Official Receiver to accept the petition, the date of commencement of the bankruptcy of each debtor (subsection 57(3B)) • name of trustee • date of filing of Statement of Affairs

7

Section 74 annulment of bankruptcy by special resolution of creditors

written notice (subsection 74(5A))

trustee (subsection 74(5A))

as soon as practicable after passage of special resolution (subsection 74(5A))

• date of annulment of the bankruptcy

[page 924] 7A

Section 76B record of the

copy of record

trustee

immediately

• date of termination or

termination or setting aside of a composition or scheme of arrangement

setting aside

8

Section 149 automatic discharge from bankruptcy

not applicable

not applicable

not applicable

• date of discharge

9

Sections 149B, 149C objection to discharge

Notice of objection (section 149B)

trustee (section 149B)

at any time before discharge

• date objection takes effect (ie day on which details of notice entered in the Index (section 149G) • grounds of objection • person lodging the notice (ie trustee)

10

Section 149H trustee ceasing to object on a particular ground

notice of ceasing to object (subsection 149H(1))

trustee (subsection 149H(1))

at any time before discharge (subsection 149H(1))

• date objection ceases to have effect (if at all) (ie day on which details of notice entered in the Index (subsection 149H(3)) • grounds of objection to which notice relates • person lodging the notice (ie trustee)

[page 925] 11

Section 149J trustee or Official Receiver withdrawing objection

notice of withdrawal (subsection 149J(1))

trustee (subsection 149J(1)) (see also subsection 149J(2) for Official Receiver

at any time before discharge (subsections 149J(1) and (2))

• date withdrawal of objection takes effect (ie day on which details of notice entered in the Index (subsection 149J(3))

• person lodging the notice (ie trustee or Official Receiver) 12

Section 149N InspectorGeneral’s review of decision to object (also: section 149Q — AAT review of decision)

if the InspectorGeneral cancels the objection — written notice that objection cancelled

trustee

as soon as practicable after objection cancelled

• date the cancellation takes effect (subsection 149N(2))

13

Sections 149S and 149ZF early discharge from bankruptcy

[application for early discharge (subsection 149S(2)] certificate of discharge (subsection 149ZF(3))

certificate — registered trustee (subsection 149ZF(3)) (see also Official Receiver: (subsection 149ZF(3); see also subsection 149ZK(2) for decision on review)

as soon as practicable after trustee signs certificate (subsection 149ZF(3))

• date on which bankruptcy is discharged (subsection 149ZF(1); see also subsection 149ZK(2))

14

Section 153A annulment of bankruptcy on payment of debts

certificate (subsection 153A(2))

trustee (subsection 153A(2))

as soon as practicable after debts paid in full (subsection 153A(2))

• date of annulment

15

Section 153B annulment of bankruptcy by Court

court order (section 153B)

applicant (Rule 7.05 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

2 days (Rule • date of 7.05 of FC annulment (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

[page 926] 16

Section 154A

application, and

applicant

not

• date of

application for information trustee registration prescribed by the regulations

trustee

17

Section 155C application, and trustee registration information prescribed by the regulations (subsection 155C(2))

applicant not trustee (Note: applicable InspectorGeneral to register trustee: sections 155B and 155C)

• details of trustee

18

Section 155G trustee voluntarily terminating registration

trustee

not applicable

• date trustee registration ceases (ie date of acceptance of request: subsection 155G(2))

19

Sections 155H and no document 155I involuntary specified termination of trustee registration

InspectorGeneral (see subsection 155I(6))

not applicable

• date trustee registration ceases (InspectorGeneral to give effect to decision to terminate registration: subsection 155I(6))

20

Sections 184 and 184A release of trustee by operation of law after 7 years

registered trustee

not applicable

• fact that the administration of an estate is finalised

written request (subsection 155G(1))

no document specified

applicable

application

[page 927] 21

Part IX debt agreement proposal

debt agreement proposal, explanatory statement and statement of affairs

debtor

not applicable

• date that acceptance of proposal for processing and name and address of debt agreement processor are entered in the Index

• particulars of debtor • particulars of whether proposal accepted or rejected following processing • date that a proposal lapses (if at all) • date of withdrawal or cancellation of proposal 22

Part IX debt agreements

debt agreement notification of completion or termination of the debt agreement notification of a designated 6month arrears default

notification of completion: the debt agreement administrator notification of 6-month arrears default: the debt agreement administrator

notification of completion: 5 working days after end of debt agreement notification of 6-month arrears default: 10 working days after occurrence of designated 6month arrears default

• particulars of debtor (if different from particulars in debt agreement proposal) • date that making of debt agreement entered in the Index • date at end or termination of debt agreement • particulars of reason for debt agreement termination or end

[page 928] 22A

Section 185N ending a debt agreement by discharging obligations

certificate given under subsection 185N(3)

not applicable

not applicable

• date of giving of certificate

22B

Section 185P terminating a debt agreement by proposal

Minutes of creditors meeting called under section 185A, or the record made by the Official

not applicable

not applicable

• date of acceptance of proposal

Receiver of acceptance of proposal under subsection 185B(3) 22C

Section 185Q terminating a debt agreement by court order

court order

applicant (Rule 9.05 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

2 days after • date order made order made (Rule 9.05 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

22D

Section 185QA terminating a debt agreement by special resolution of creditors

Minutes of meeting called under section 185QA

not applicable

not applicable

• date of passing of special resolution

23

Sections 185T and court order 185U voiding a (subsection debt agreement 185U(1))

applicant (Rule 9.05 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

2 days (Rule 9.05 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

• date of order • whether agreement is voided in whole or in part

23A

Section 186B Application for registration as a debt agreement administrator

InspectorGeneral

not applicable

• date of application • particulars of applicant

application

[page 929] 23B

Section 186D Registration as a debt agreement administrator

application Inspectorapproval or refusal General of registration application under section 186C (including any conditions specified for subsection 186C (9)).

not applicable

• particulars of applicant • details of the approval or refusal (including specified conditions applying to the debt agreement administrator on

registration) 23C

Section 186F Conditions of registration

notice of imposition of conditions

InspectorGeneral

not applicable

• particulars of conditions imposed on debt agreement administrator’s registration

23D

Sections 185ZCA 186J, 186K and 186L Debt agreement administrator registration ceases

approval of registration notice of request to accept surrender of registration (section 186J) notice of cancellation of registration (section 186K or 186L)

InspectorGeneral

not applicable

• date debt agreement administrator registration ceases • particulars of reason for end of registration

24

Section 188 and subsection 189(1B) authority to be controlling trustee (personal insolvency agreement);

authority (subsection 188(1))

registered trustee or solicitor (subsection 188(5); subsection 189(1B))

authority: 2 working days of consent to act;

• date of authority • date of filing of statement of affairs • name of controlling trustee • particulars of debtor

[page 930] notice of event causing end of control by trustee

notice (subsection 189(1B))

24A

Section 192 authority to be controlling trustee passing to Official Trustee

Evidence of event mentioned in subsection 192(1) (death, cessation, incapacity written request)

25

Section 204 and subsection 218(1) personal insolvency

copy of agreement trustee (paragraph 218(1) (paragraph (b)) 218(1)(b))

Official Trustee

notice: 7 days after becoming aware that control has ended

• date of termination of control

14 days of control passing

• particulars of debtor • date of passing of control

within 21 days after executing agreement

• date of execution of agreement • particulars of debtor (if different

agreement

from particulars in section 188 authority) • name of each nominated trustee of the agreement (subsection 204(3); see also section 215A) • date of filing of statement of affairs

[page 931] 26

Section 221 court order sequestration (subsection order for certain 221(1)) failures under Part X

applicant

2 days

27

Subsection 222(10) sequestration order against estate of debtor

sequestration order

applicant for 2 days sequestration (regulation order 10.11)

• date of order • particulars of debtor

28

Section 222A termination of personal insolvency agreement by trustee

copy of written notice of termination (regulation 10.12)

trustee of the immediately agreement (regulation 10.12)

• date of termination

28A

Subsection

sequestration

applicant for

• date of order

2 days

• date of order • particulars of bankrupt (if different from particulars in section 188 authority) • name of petitioning creditor (if any) • name and telephone number of petitioning creditor’s solicitors (if any) • name of trustee • date of filing of Statement of Affairs

28B

222C(5) sequestration order against estate of debtor

order

sequestration (regulation order 10.11)

• particulars of debtor

Subsections 224A(1) and (3) terminating personal insolvency agreement by creditors or event specified in agreement

copy of resolution or special resolution (subsection 224A(1)); written notice (subsection 224A(3))

trustee (subsections 224A(1) and (3))

• date of termination

immediately (subsections 224A(1) and (3))

[page 932] 28C

Subsection 224A(4) court order setting aside or terminating a personal insolvency agreement

written notice

28D

Section 232 certificate relating to discharge of obligations under personal insolvency agreement

29

Section 244 creditor’s petition for Part XI administration (deceased estates)

registered trustee

2 days (Rule 10.05 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

• date when agreement set aside or terminated

certificate given to trustee debtor under subsection 232(1)

not applicable

• date when trustee signed certificate

creditor’s petition and verifying affidavit (subsections 244(1) and (5))

not applicable

• date of petition • particulars of deceased • name of petitioning creditor • name and telephone number of petitioning creditor’s solicitors • date of hearing for administration order • date of filing of Statement of

petitioning creditor

Affairs 30

Section 244 and section 245 (death of debtor after creditor’s petition under section 47) Part XI administration (deceased estates)

court order (subsections 244(14); 245(3))

petitioning creditor (subsection 244(14); 245(3))

2 days (Rule 11.04 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

• date of order • particulars of deceased (if particulars different from particulars in relevant creditor’s petition) • name of trustee

[page 933] 31

Section 247 administrator’s petition for Part XI administration of deceased estate

petition and administrator not statement of (subsection applicable affairs (subsection 247(1)) 247(1))

• date of petition • particulars of deceased • name of administrator • name and telephone number of administrator’s solicitors • date of filing of Statement of Affairs

32

Section 247 court order for Part XI administration on administrator’s petition

court order (subsection 247(1A))

applicant (Rule 11.04 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

2 days (Rule 11.04 of FC (Bankruptcy) Rules and of FCC (Bankruptcy) Rules)

• date of order • the following particulars if different from those in administrator’s petition: • particulars of deceased • name of administrator • name and telephone number of administrator’s solicitors • name of trustee • date of filing of Statement of Affairs

33

Section 253E stay of proceedings in

court order (subsection

applicant

7 days

• date of order • period of stay

relation to farmers’ debts assistance

253E(1))

(subsection 253E(3))

[page 934]

[90,395]

SCHEDULE 9 — OFFICIAL RECEIVER’S FEES (regulation 16.04)

[Sch 9 rep SLI 137 of 2006 reg 3 and Sch 1[17], opn 1 July 2006]

[page 935]

[90,445]

SCHEDULE 10 — OFFICIAL TRUSTEE’S FEES

[Sch 10 rep SR 255 of 2002 reg 3 and Sch 1, opn 6 Nov 2002]

[page 937]

FEDERAL COURT (BANKRUPTCY) RULES 2005 TABLE OF PROVISIONS Section

1.01 1.02 1.03 1.04 1.05 1.06

2.01 2.02 2.03 2.04 2.05 2.06

Title

PART 1 — PRELIMINARY Name of Rules …. Commencement …. Application of these Rules and other rules of the Court …. Interpretation …. Expressions used in the Bankruptcy Act …. Forms …. PART 2 — GENERAL Originating application and interim application …. Exercise of powers by Registrars …. Review of exercise of powers by Registrars …. Leave to be heard …. Appearance at application or examination …. Opposition to application, interim application or petition ….

Paragraph

[91,005] [91,010] [91,015] [91,020] [91,025] [91,030]

[91,050] [91,055] [91,060] [91,065] [91,070] [91,075]

3.01 3.02 3.03

4.01 4.02

4.03

4.04

4.05 4.06 4.07

PART 3 — BANKRUPTCY NOTICES Substituted service …. Setting aside bankruptcy notice (Bankruptcy Act s 41(6A), (6C) and (7)) …. Extension of time for compliance with bankruptcy notice (Bankruptcy Act s 41(6A) and (6C)) …. PART 4 — CREDITOR’S PETITIONS Application of Part 4 …. Requirements for creditor’s petition and supporting affidavit (Bankruptcy Act s 47) …. Creditor’s petition founded on issue of execution against debtor (Bankruptcy Act s 40(1)(d)) …. Creditor’s petition founded on failure to comply with bankruptcy notice etc (Bankruptcy Act s 40(1)(g)) …. Documents to be served …. Additional affidavits to be filed before hearing …. Fax copy may be filed in certain cases ….

[91,100] [91,105]

[91,110]

[91,130]

[91,135]

[91,140]

[91,145] [91,150] [91,155] [91,160] [page 938]

4.08 4.09 4.10

Notification and entry of sequestration order …. Entry of order for dismissal etc of creditor’s petition …. Service of order ….

[91,165] [91,170] [91,175]

5.01

PART 5 — DEBTOR’S PETITIONS Referral of debtor’s petition ….

[91,200]

PART 6 — EXAMINATIONS

6.01

DIVISION 6.1 — INTERPRETATION Definition for Part 6 ….

[91,220]

DIVISION 6.2 — EXAMINATION OF DEBTOR OR EXAMINABLE PERSON 6.02 Application for summons (Bankruptcy Act s 50) …. [91,230] 6.03 Hearing of application …. [91,235] 6.04 Requirements for summons …. [91,240] 6.05 Service of summons …. [91,245] 6.06 Application for discharge of summons …. [91,250]

6.07 6.08 6.09 6.10 6.11 6.12

DIVISION 6.3 — EXAMINATION OF RELEVANT PERSON Application for summons (Bankruptcy Act s 81) …. [91,260] Hearing of application …. [91,265] Requirements for summons …. [91,270] Service of summons …. [91,275] Failure to attend examination …. [91,280] Application for discharge of summons …. [91,285]

DIVISION 6.4 — EXAMINATION OF EXAMINABLE PERSON 6.13 Application for summons (Bankruptcy Act s 81) …. [91,295] 6.14 Hearing of application …. [91,300] 6.15 Requirements for summons …. [91,305] 6.16 Service of summons …. [91,310]

6.17 6.18

Application for discharge of summons …. Conduct money and witnesses expenses ….

[91,315] [91,320]

PART 7 — ANNULMENT OR REVIEW OF BANKRUPTCY

7.01 7.02 7.03 7.04 7.05

7.06

DIVISION 7.1 — ANNULMENT OF BANKRUPTCY Application of Division 7.1 …. Requirements for application …. Notice to creditors …. Report by trustee …. Entry and service of annulment order ….

[91,340] [91,345] [91,350] [91,355] [91,360]

DIVISION 7.2 — REVIEW OF SEQUESTRATION ORDER Review of Registrar’s decision …. [91,370] [page 939]

8.01 8.02

9.01 9.02 9.03 9.04 9.05

PART 8 — TRUSTEES Objection to appointment of trustee (Bankruptcy Act s 157(6)) …. Resignation or release of trustee (Bankruptcy Act ss 180, 183) …. PART 9 — DEBT AGREEMENTS Application of Part 9 …. Requirements for application …. Service …. Notice to creditors …. Entry and service of order ….

[91,390] [91,395]

[91,420] [91,425] [91,430] [91,435] [91,440]

PART 10 — PERSONAL INSOLVENCY AGREEMENTS

10.01 10.02 10.03 10.04 10.05

Application of Part 10 …. Requirements for application …. Service …. Notice to creditors …. Entry of order ….

[91,460] [91,465] [91,470] [91,475] [91,480]

PART 11 — ADMINISTRATION OF ESTATES OF DECEASED PERSONS 11.01 Creditor’s petition (Bankruptcy Act s 244) …. [91,500] 11.02 Additional affidavits to be filed before hearing of creditor’s petition …. [91,505] 11.03 Administrator’s petition (Bankruptcy Act s 247) …. [91,510] 11.04 Entry of order …. [91,515]

12.01 12.02

PART 12 — WARRANTS Arrest of debtor or bankrupt (Bankruptcy Act s 78) …. Apprehension of person failing to attend Court (Bankruptcy Act s 264B(1)) ….

[91,530] [91,535]

PART 13 — COSTS

13.01

13.02 13.03 13.04 13.05

DIVISION 13.1 — ORDERS FOR COSTS Basis for costs …. DIVISION 13.2 — SHORT FORM BILLS OF COSTS Application of Division 13.2 …. Short form bill of costs …. Claim for costs …. Attendance at taxation hearing ….

[91,550]

[91,560] [91,565] [91,570] [91,575]

PART 14 — PROCEEDINGS UNDER CROSS-BORDER INSOLVENCY ACT 14.01 14.02

Application of this Part and other rules of the Court …. Expressions used in the Cross-Border Insolvency Act ….

[91,590] [91,595] [page 940]

14.03 14.04 14.05 14.06 14.07 14.08 14.09

Application for recognition …. Application for provisional relief under article 19 of the Model Law …. Registered trustee’s consent to act …. Notice of filing of application for recognition …. Notice of order for recognition, withdrawal etc …. Relief after recognition …. Application to modify or terminate an order for recognition or other relief …. SCHEDULE 1 — FORMS …. SCHEDULE 2 — POWERS OF THE COURT THAT MAY BE EXERCISED BY A REGISTRAR …. SCHEDULE 3 — NOTES TO THESE RULES ….

[91,600] [91,605] [91,610] [91,615] [91,620] [91,625] [91,630] [91,705]

[91,710] [91,800]

[page 941]

Federal Court (Bankruptcy) Rules 2005 TABLE OF AMENDMENTS The Federal Court (Bankruptcy) Rules 2005 commenced on 6 February 2006. Since that date the Rules have been amended by: Amending Legislation SLI 253 of 2006 SLI 18 of 2008 SLI 47 of 2009 SLI 162 of 2009 SLI 284 of 2011 SLI 230 of 2013

Date of Gazettal/Registration 18 September 2006 12 March 2008 23 March 2009 25 June 2009 20 December 2011 18 September 2013

Date of Commencement 8 October 2006 1 April 2008 30 March 2009 1 July 2009 1 January 2012 19 September 2013

[page 943]

PART 1 — PRELIMINARY

[91,005] Name of Rules 1.01 These Rules are the Federal Court (Bankruptcy) Rules 2005.

[91,010] Commencement 1.02 These Rules commence on 6 February 2006.

[91,015] Application of these Rules and other rules of the Court 1.03 (1) Unless the Court otherwise orders: (a) these Rules apply to a proceeding to which the Bankruptcy Act applies; and (b) Part 14 applies to a proceeding in the Court under the Cross-Border Insolvency Act. Note 1: The Federal Circuit Court does not have jurisdiction under the Cross-Border Insolvency Act. Note 2: For the definition of Federal Circuit Court, see section 4 of the Act. [subr (1) am SLI 230 of 2013 r 4 and Sch 1 item 1, opn 19 Sep 2013]

(2) The other rules of the Court apply, to the extent that they are relevant and not inconsistent with these Rules: (a) to a proceeding in the Court to which the Bankruptcy Act applies; and (b) to a proceeding in the Court under the Cross-Border Insolvency Act that is commenced after 29 March 2009. [r 1.03 subst SLI 47 of 2009 r 3 and Sch 1[1], opn 30 Mar 2009]

[91,020] Interpretation 1.04 (1) In these Rules, unless the contrary intention appears:

Act means the Federal Court of Australia Act 1976. Bankruptcy Act means the Bankruptcy Act 1966. bankruptcy notice means a bankruptcy notice issued by the Official Receiver under section 41 of the Bankruptcy Act. Bankruptcy Regulations means the Bankruptcy Regulations 1996. Cross-Border Insolvency Act means the Cross-Border Insolvency Act 2008 including, unless the contrary intention appears, the Model Law. [def insrt SLI 47 of 2009 r 3 and Sch 1[2], opn 30 Mar 2009]

Model Law means the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law, the English text of which is set out in Schedule 1 to the Cross-Border Insolvency Act, with the modifications set out in Part 2 of that Act. [def insrt SLI 47 of 2009 r 3 and Sch 1[2], opn 30 Mar 2009]

(2) Unless the contrary intention appears, an expression used in these Rules and in Schedule 1 to the Federal Court Rules 2011 has the same meaning in these Rules as it has in that Schedule. [subr (2) subst SLI 284 of 2011 r 3 and Sch 1[1], opn 1 Jan 2012]

(3) Subrule (2) has effect subject to rule 1.05. [page 944]

[91,025] Expressions used in the Bankruptcy Act 1.05 Unless the contrary intention appears, an expression used in these Rules and in the Bankruptcy Act has the same meaning in these Rules as it has in the Bankruptcy Act. Note The following expressions are defined in subsection 5(1) of the Bankruptcy Act:

bankrupt books creditor creditor’s petition debt agreement debtor’s petition examinable affairs

examinable person National Personal Insolvency Index Official Receiver Official Trustee personal insolvency agreement petition proclaimed law property the trustee. [r 1.05 am SLI 284 of 2011 r 3 and Sch 1[2], opn 1 Jan 2012]

[91,030] Forms 1.06 (1) In these Rules, a reference to a form followed by a number is a reference to the form so numbered in Schedule 1 to these Rules. (2) It is sufficient compliance with these Rules in relation to a document that is required to be in accordance with a form in Schedule 1 if the document is substantially in accordance with the form required or has only such variations as the nature of the case requires. (3) If these Rules do not prescribe a form for a particular purpose, a form prescribed in other rules of the Court for that purpose may be used, but the document must have a title in accordance with Form 1.

PART 2 — GENERAL

[91,050] Originating application and interim application 2.01 (1) Unless these Rules otherwise provide, a person must make an application required or permitted by the Bankruptcy Act to be made to the Court: (a) if the application is not made in a proceeding already commenced in the Court — by filing an application in accordance with Form 2; and (b) in any other case — by filing an interim application in accordance

with Form 3. (2) If final relief has been granted in relation to a proceeding, a person may make an application to the Court in relation to the proceeding by filing an interim application in accordance with Form 3 unless the Court otherwise directs. (3) An application must state: (a) each section of the Bankruptcy Act, each regulation of the Bankruptcy Regulations or each section of the Cross-Border Insolvency Act, under which the proceeding is brought; and (b) the relief sought. [subr (3) am SLI 47 of 2009 r 3 and Sch 1[3], opn 30 Mar 2009]

[page 945] (4) An interim application must state: (a) if appropriate, each section of the Bankruptcy Act, each regulation of the Bankruptcy Regulations or each section of the Cross-Border Insolvency Act, or each rule of Court under which the application is made; and (b) the relief sought. Note Each application and appeal mentioned below must be commenced by filing an application in accordance with Form 2. The list is not exhaustive.

(a) an application for an order for substituted service of a bankruptcy notice; (b) an application, under section 50 of the Bankruptcy Act, for the issue of a summons to a debtor, or an examinable person in relation to the debtor, about the debtor and the debtor’s examinable affairs; (c) an application, under section 78 of the Bankruptcy Act, for the issue of a warrant for the arrest of a debtor or bankrupt; (d) an appeal, under subsection 82(5) of the Bankruptcy Act, against an estimate by the trustee of the value of a debt or liability provable in a bankruptcy; (e) an application, under section 153B of the Bankruptcy Act, for the annulment of a bankruptcy;

(f) (g)

(h)

(i) (j) (k)

(l) (m)

(n) (o)

(p)

an application, under subsection 157(6) of the Bankruptcy Act, objecting to the appointment of a person as a trustee; an appeal from a decision of a taxing officer, appointed under subsection 167(8) of the Bankruptcy Act, allowing or disallowing a bill of costs or charges, or an item in such a bill. an application, under section 180 of the Bankruptcy Act, for acceptance of a trustee’s resignation from the office of trustee of an estate; an application, under section 185Q of the Bankruptcy Act, for an order terminating a debt agreement; an application, under section 185Q of the Bankruptcy Act, for an order terminating a debt agreement; an application, under section 185T of the Bankruptcy Act, for an order declaring that all, or a specified part, of a debt agreement is void; an application, under section 222 of the Bankruptcy Act, for an order setting aside a personal insolvency agreement; an application, under section 222 of the Bankruptcy Act (as applied by section 76B of that Act), for an order setting aside a composition or scheme of arrangement; an application, under section 222C of the Bankruptcy Act, for an order terminating a personal insolvency agreement; an application, under section 222C of the Bankruptcy Act (as applied by section 76B of that Act), for an order terminating a composition or scheme of arrangement; an application, under section 252B of the Bankruptcy Act, for the annulment of the administration of the estate of a deceased person.

[subr (4) am SLI 47 of 2009 r 3 and Sch 1[3], opn 30 Mar 2009]

[91,055] Exercise of powers by Registrars 2.02 For the purposes of paragraph 35A(1)(h) of the Act, if the Court so directs, a Registrar may exercise a power of the Court under a provision of the Bankruptcy Act mentioned in Schedule 2. [r 2.02 am SLI 284 of 2011 r 3 and Sch 1[3], opn 1 Jan 2012]

[91,060] Review of exercise of powers by Registrars 2.03 (1) Subject to any direction by the Court to the contrary, an application under subsection 35A(5) of the Act for review of the exercise of a power of the Court by a Registrar under subsection 35A(1) of the Act must be made by interlocutory application within 21 days after the day on which the power was exercised. [subr (1) am SLI 284 of 2011 r 3 and Sch 1[4] and [5], opn 1 Jan 2012]

[page 946] (2) An application under paragraph 35A(7)(b) of the Act may be made orally to the Registrar at the time that the Registrar is hearing the application for the exercise of a power mentioned in subsection 35A(1) of the Act.

[91,065] Leave to be heard 2.04 (1) The Court may grant leave to be heard in a proceeding to a person who is not a party to the proceeding. (2) The Court may grant the leave on conditions and may revoke the leave at any time. (3) The Court may order the person to pay costs if: (a) the granting of leave to the person causes additional costs for a party to the proceeding; and (b) the Court considers that the costs should be paid by the person. (4) The Court may also order that the person is not to be further heard in the proceeding until the costs are paid or secured to the Court’s satisfaction. (5) The Court may grant leave or make an order under this rule on the Court’s own initiative or on the application of a party or another person having an interest in the proceeding. (6) An application for leave or for an order must be made by filing an interim application in accordance with Form 3.

[91,070] Appearance at application or examination

2.05 (1) A person who intends to appear at the hearing of an application or petition, or take part in an examination, must file a notice of appearance in accordance with Form 4. (2) Rule 8.07 of the Federal Court Rules 2011 (changing a return date) does not apply to the return date fixed for a creditor’s petition. [subr (2) subst SLI 284 of 2011 r 3 and Sch 1[6], opn 1 Jan 2012]

[91,075] Opposition to application, interim application or petition 2.06 (1) In this rule: application includes an interim application. (2) A person who intends to oppose an application or petition must, at least 3 days before the date fixed for the hearing of the application or petition or, with the leave of the Court, at the hearing: (a) file a notice of appearance in accordance with Form 4; and (b) file a notice in accordance with Form 5 stating the grounds of opposition; and (c) file an affidavit in support of the grounds of opposition; and (d) serve the notices and supporting affidavit on the applicant.

PART 3 — BANKRUPTCY NOTICES

[91,100] Substituted service 3.01 An application for an order for substituted service of a bankruptcy notice must be accompanied by: (a) a copy of the bankruptcy notice; and (b) an affidavit stating the grounds in support of the application. [page 947]

[91,105] Setting aside bankruptcy notice

(Bankruptcy Act s 41(6A), (6C) and (7)) 3.02 (1) An application to set aside a bankruptcy notice must be accompanied by: (a) a copy of the bankruptcy notice; and (b) an affidavit stating: (i) the grounds in support of the application; and (ii) the date when the bankruptcy notice was served on the applicant; and (c) a copy of any application to set aside the judgment or order in relation to which the bankruptcy notice was issued and any material in support of that application. (2) If the application is based on the ground that the debtor has a counterclaim, set-off or cross demand mentioned in paragraph 40(1)(g) of the Bankruptcy Act, the affidavit must also state: (a) the full details of the counterclaim, set-off or cross demand; and (b) the amount of the counterclaim, set-off or cross demand and the amount by which it exceeds the amount claimed in the bankruptcy notice; and (c) why the counterclaim, set-off or cross demand was not raised in the proceeding that resulted in the judgment or order in relation to which the bankruptcy notice was issued. (3) The application and supporting documents must be served on the respondent creditor within 3 days after the application is filed. COMMENTARY ON RULE 3.02 [91,105.5] Mareva injunctions In Sourlos v Luv a Coffee Lismore Pty Ltd (No 2); [2008] FMCA 772; BC200804617, the applicant debtor sought to set aside a bankruptcy notice on the ground that a form of Mareva injunction known as an asset protection order operated over the assets. The nature of such an injunction was discussed by Madgwick J in National Australia Bank v Pollak (2001) 186 ALR 44; [2001] FCA 1408; BC200105965 at [41] et sec. The applicant sought to place the assets concerned in the class of cases considered by Jenkinson J in Boscolo v Botany Council [1996] FCA 897; BC9604945 where His Honour referred to the class of cases referred to by Lord Esher in Re Sedgwick; Ex parte Sedgwick (1888) 5 Morr 262 as being: No doubt, an ‘equity’ of the type envisaged by Lord Esher would disentitle a judgment creditor from proceeding to immediate execution but, in my view, this is not an exhaustive statement of the matters that may disqualify a judgment creditor from issuing a bankruptcy notice. There is no reason of logic or otherwise to limit the operation of s. 41(2)(b) to cases where the debtor can establish an “equity”. In my opinion, the existence of any relevant circumstances sufficient to

disentitle a judgment creditor from proceeding immediately to execution falls within the implied prohibition contained in s. 41(3)(b). In Sourlos, Raphael FM dismissed the application and gave the order a purposive construction, finding that “the injunction issued was in aid of execution and not to prevent it”.

____________________

[91,110] Extension of time for compliance with bankruptcy notice (Bankruptcy Act s 41(6A) and (6C)) 3.03 (1) An application for an extension of time for compliance with a bankruptcy notice must be accompanied by: (a) a copy of the bankruptcy notice; and (b) an affidavit stating: (i) the grounds in support of the application; and (ii) the date when the bankruptcy notice was served on the applicant; and [page 948] (c) a copy of any application to set aside the judgment or order in relation to which the bankruptcy notice was issued and any material in support of that application. (2) The application may be made in the absence of a party. (3) If an order extending the time for compliance with a bankruptcy notice is made, the following documents must be served on the respondent creditor within 3 days after the order is made: (a) the application; (b) the order; (c) the supporting documents. (4) The application need be heard in open court only if it is for an extension of time to a date after the first directions hearing.

PART 4 — CREDITOR’S PETITIONS

[91,130] Application of Part 4 4.01 This Part applies in relation to a creditor’s petition seeking a sequestration order against the estate of a debtor.

[91,135] Requirements for creditor’s petition and supporting affidavit (Bankruptcy Act s 47) 4.02 (1) A creditor’s petition must be in accordance with Form 6. (2) The affidavit verifying the petition required by subsection 47(1) of the Bankruptcy Act may be in accordance with the affidavit set out in Part 2 of Form 6. (3) The petition must be accompanied by: (a) sufficient copies of the petition for service and proof of service; and (b) if the affidavit verifying the petition is not included in the petition in accordance with Part 2 of Form 6 — an affidavit of a person who knows the relevant facts verifying the petition; and (c) if appropriate, the affidavits required by rule 4.04. (4) If the petition is accompanied by an affidavit of a person who knows the relevant facts verifying the petition in accordance with paragraph (3)(b), a copy of the petition must be attached to the affidavit.

[91,140] Creditor’s petition founded on issue of execution against debtor (Bankruptcy Act s 40(1) (d)) 4.03 (1) If a creditor’s petition is founded on an act of bankruptcy mentioned in paragraph 40(1)(d) of the Bankruptcy Act, the affidavit verifying the petition must state: (a) that, in consequence of the issue of execution against the debtor, property of the debtor has been sold by the sheriff or held by the sheriff for 21 days; or (b) that the writ or warrant of execution relating to the act of bankruptcy has been returned unsatisfied.

(2) If paragraph (1)(b) applies, the affidavit must have attached to it a sealed or certified copy of the writ or warrant of execution returned unsatisfied. [page 949]

[91,145] Creditor’s petition founded on failure to comply with bankruptcy notice etc (Bankruptcy Act s 40(1)(g)) 4.04 (1) If a creditor’s petition is founded on an act of bankruptcy mentioned in paragraph 40(1)(g) of the Bankruptcy Act, the petition must also be accompanied by: (a) an affidavit stating: (i) that the records of the Court and the records of the Federal Circuit Court have been searched and no application in relation to the bankruptcy notice has been made; or (ii) that an application was made in the Court or in the Federal Circuit Court, as applicable, for an order setting aside the relevant bankruptcy notice and the application has been finally decided; or (iii) that an application was made in the Court or in the Federal Circuit Court, as applicable, for an order extending the time for compliance with the bankruptcy notice and the application has been finally decided; and (b) an affidavit of service of the relevant bankruptcy notice. Note: For the definition of Federal Circuit Court, see section 4 of the Act. [subr (1) am SLI 230 of 2013 r 4 and Sch 1 items 2, 3, opn 19 Sep 2013]

(2) If an application mentioned in subparagraph (1)(a)(ii) or (iii) was made, a copy of the order finally deciding the application must be attached to the affidavit required by paragraph (1)(a).

[91,150] Documents to be served

4.05 Unless the Court otherwise orders, at least 5 days before the date fixed for the hearing of a creditor’s petition, the applicant creditor must serve on the respondent debtor: (a) the creditor’s petition; and (b) a copy of the affidavit, or affidavits, verifying the petition required by subsection 47(1) of the Bankruptcy Act; and (c) if applicable, a copy of the affidavit required by paragraph 4.04(1) (a); and (d) if applicable, a copy of the affidavit of service of the bankruptcy notice required by paragraph 4.04(1)(b); and (e) a copy of any consent to act as trustee filed under section 156A of the Bankruptcy Act. RULE 4.05 GENERALLY [91,150.5] Service to be proved In Gadelrabb v Liristis [2012] FMCA 318; BC201202312 Raphael FM emphasised the importance of proof of service of all the documents referred to in the rule. The identity of the debtor was in question as there were omissions which left unproven the service of certain of the documents in the rule. As a result, the magistrate exercised his discretion in this case to set aside the sequestration order but not to dismiss the petition.

____________________

[91,155] Additional affidavits to be filed before hearing 4.06 (1) Before the hearing of a creditor’s petition, the applicant creditor must file the affidavits required by this rule. (2) The applicant creditor must file an affidavit that: (a) states that the documents required to be served under rule 4.05 have been served and when and how they were served; and (b) has attached to it a copy of the documents that were served and proof of service in relation to the documents. [page 950]

(3) The applicant creditor must file an affidavit of a person who has searched, or caused a search to be made, in the National Personal Insolvency Index no earlier than the day before the hearing date for the petition that: (a) sets out the details of any references in the Index to the debtor; and (b) states that there were no details of a debt agreement, about the debt on which the applicant creditor relies, in the Index: (i) on the day when the petition was presented; and (ii) on the day when the search was made; and (c) has attached to it a copy of the relevant extract of the Index. [subr (3) am SLI 18 of 2008 r 3 and Sch 1[1], opn 1 Apr 2008]

(4) The applicant creditor must file an affidavit of a person who knows the relevant facts that: (a) was sworn as soon as practicable before the hearing date for the petition; and (b) states that each debt on which the applicant creditor relies is still owing. (5) The applicant creditor must file a search affidavit if the debt stated in the petition is an amount payable to the applicant creditor under a judgment of a court that ordered the amount to be paid into the court. (6) In subrule (5): search affidavit, in relation to a petition stating a debt ordered to be paid into a court, means an affidavit of a person who has searched in the proper office of the court, not earlier than the day before the hearing date for the petition, stating whether the amount of the debt, or part of that amount, has been paid as ordered.

[91,160] Fax copy may be filed in certain cases 4.07 If it is not practical for the applicant creditor to file the original of an affidavit mentioned in rule 4.06: (a) a fax copy of the affidavit may be filed; and (b) the applicant creditor must keep the original affidavit and produce it as directed by the Court. [r 4.07 am SLI 18 of 2008 r 3 and Sch 1[2], opn 1 Apr 2008]

[91,165] Notification and entry of sequestration order 4.08 (1) A sequestration order must be in accordance with Form 7. (2) If the Court makes a sequestration order against the estate of a debtor, the applicant creditor must: (a) on the same day as the order is made, notify the trustee, in writing, of his or her appointment; and (b) within 2 days after the order is made, give a copy of the sequestration order to any person who has consented to act as a trustee. (3) If the order is not entered at the time the order is made, the applicant creditor must, as soon as practicable, request entry of the order in accordance with Division 39.4 of the Federal Court Rules 2011. Note Subsection 52(1A) of the Bankruptcy Act provides that the creditor who obtained the sequestration order must give a copy of the order to the Official Receiver before the end of the period of 2 days beginning on the day the order was made. [r 4.08 subst SLI 284 of 2011 r 3 and Sch 1[7], opn 1 Jan 2012]

[91,170] Entry of order for dismissal etc of creditor’s petition 4.09 (1) This rule applies if the Court makes an order: (a) dismissing a creditor’s petition; or [page 951] (b) granting leave for a creditor’s petition to be withdrawn; or (c) under subsection 52 (5) of the Bankruptcy Act. (2) The applicant creditor must: (a) if the order is not entered at the time the order is made — request entry of the order in accordance with Division 39.4 of the Federal Court Rules 2011 as soon as practicable; an (b) within 2 days after the order is made, give a copy of the order to the

Official Receiver. [r 4.09 subst SLI 284 of 2011 r 3 and Sch 1[7], opn 1 Jan 2012]

[91,175] Service of order 4.10 (1) This rule applies to an order of the Court that is entered under rule 4.08 or 4.09. (2) Within 2 days after the entry is stamped, the applicant creditor must give a copy of the order to: (a) any person who has consented to act as the trustee of the debtor’s estate under section 156A of the Bankruptcy Act; and (b) the Official Receiver for the District in which the order was made.

PART 5 — DEBTOR’S PETITIONS

[91,200] Referral of debtor’s petition 5.01 (1) A referral to the Court by the Official Receiver of a debtor’s petition, for a direction to accept or reject the petition, must be in accordance with Form 8. Note For the circumstances in which the Official Receiver must refer a debtor’s petition to the Court for a direction to accept or reject the petition, see subsection 55(3B), section 56C and subsection 57(3B) of the Bankruptcy Act.

(2) On receiving a referral, the Registrar must fix a time, date and place for the hearing of the referral. (3) At least 3 days before the date fixed for the hearing, the Official Receiver must serve a sealed copy of the referral, and notice of the time, date and place fixed for the hearing, on: (a) each debtor who presented the petition; and (b) each debtor listed in any relevant creditor’s petition; and (c) each creditor listed in the petition; and (d) if subsection 56C(4) of the Bankruptcy Act applies, the person administering the relevant proclaimed law. (4) The notice required by subrule (3) must be in accordance with the notice set out in Form 8.

PART 6 — EXAMINATIONS DIVISION 6.1 — INTERPRETATION

[91,220] Definition for Part 6 6.01 In this Part: relevant person means a relevant person within the meaning of section 81 of the Bankruptcy Act. Note Examinable person is defined in subsection 5(1) of the Bankruptcy Act.

[page 952]

DIVISION 6.2 — EXAMINATION OF DEBTOR OR EXAMINABLE PERSON

[91,230] Application for summons (Bankruptcy Act s 50) 6.02 (1) An application to the Court for a debtor, or an examinable person in relation to the debtor, to be summoned for examination must be accompanied by an affidavit complying with this rule. (2) The affidavit must identify: (a) the person sought to be examined; and (b) if that person is an examinable person in relation to a debtor, the debtor in relation to whom the examination is to be conducted. (3) If the application is for a person to be summoned to produce books at the examination, the affidavit must: (a) identify the books that are to be produced; and (b) state the grounds on which the person is required to produce the books. (4) The affidavit must state whether the applicant has made any inquiries about the issues to be dealt with at the proposed examination and, if so, set out details of the inquiries, including: (a) any request to the person to be examined to provide information about the debtor’s affairs or produce books for inspection; and (b) if a request to provide information or produce books has been made

and complied with (including partly), details of the compliance; and (c) if a request to provide information or produce books has been made and not complied with, details of the failure to comply; and (d) if no request to provide information or produce books has been made, the reason.

[91,235] Hearing of application 6.03 The application may be heard in the absence of a party or in closed court.

[91,240] Requirements for summons 6.04 (1) A summons must be in accordance with Form 9. (2) A Registrar must: (a) sign and affix the stamp of the Court to the summons; and (b) give it to the applicant for service on the debtor or examinable person in relation to the debtor. (3) If the summons requires the debtor, or examinable person in relation to the debtor, to produce books at the examination, the summons must identify the books that are to be produced.

[91,245] Service of summons 6.05 At least 8 days before the date fixed for the examination, the applicant must: (a) serve the summons on the relevant person personally, or in another way directed by the Court or a Registrar; and (b) give written notice of the date, time and place fixed for the examination to each creditor of the relevant person of whom the applicant has knowledge. [page 953]

[91,250] Application for discharge of summons 6.06 (1) A debtor or an examinable person who is served with a summons and wishes to apply for an order to discharge the summons may do so by filing: (a) an interim application in accordance with Form 3 in the proceeding in which the summons was issued; and (b) an affidavit setting out the grounds in support of the application. (2) As soon as possible after filing the interim application and supporting affidavit, the debtor or examinable person must serve a copy of each document: (a) on the person who applied for the summons; and (b) if the person who applied for the summons is not the Official Receiver, on the Official Receiver.

DIVISION 6.3 — EXAMINATION OF RELEVANT PERSON

[91,260] Application for summons (Bankruptcy Act s 81) 6.07 (1) An application to the Court or a Registrar for a relevant person to be summoned for examination in relation to the person’s bankruptcy must be in accordance with Form 10. (2) The application must be accompanied by: (a) a draft of each summons applied for; and (b) an affidavit identifying: (i) each relevant person to be summoned; and (ii) if the summons is to require the relevant person to produce books at the examination, the books that are to be produced. Note A relevant person may be required to produce books at an examination that are in the possession of the person and relate to the person or to any of the person’s examinable affairs — see subsection 81(1B) of the Bankruptcy Act.

[91,265] Hearing of application 6.08 The application may be heard in the absence of a party or in closed

court.

[91,270] Requirements for summons 6.09 (1) A summons must be in accordance with Form 9. (2) A Registrar must: (a) sign and affix the stamp of the Court to the summons; and (b) give it to the applicant for service on the relevant person. (3) If the summons requires the relevant person to produce books at the examination, the summons must identify the books that are to be produced.

[91,275] Service of summons 6.10 At least 8 days before the date fixed for the examination, the applicant must: (a) serve the summons on the relevant person personally, or in another way directed by the Court or a Registrar; and (b) give written notice of the date, time and place fixed for the examination to each creditor of the relevant person of whom the applicant has knowledge. [page 954]

[91,280] Failure to attend examination 6.11 If the relevant person does not attend the examination in accordance with the summons, the Court or a Registrar may: (a) adjourn the examination generally or to another day, time or place; or (b) discharge the summons. Note For the power of the Court or a Registrar to issue a warrant for the arrest of a relevant person who does not attend an examination in accordance with a summons, see section 264B of the Bankruptcy Act.

[91,285] Application for discharge of summons

6.12 (1) A relevant person who is served with a summons and wishes to apply for an order to discharge the summons may do so by filing: (a) an interim application in accordance with Form 3 in the proceeding in which the summons was issued; and (b) an affidavit setting out the grounds in support of the application. (2) As soon as possible after filing the interim application and supporting affidavit, the relevant person must serve a copy of each document: (a) on the person who applied for the summons; and (b) if the person who applied for the summons is not the Official Receiver, on the Official Receiver.

DIVISION 6.4 — EXAMINATION OF EXAMINABLE PERSON

[91,295] Application for summons (Bankruptcy Act s 81) 6.13 (1) An application to the Court or a Registrar for an examinable person to be summoned for examination in relation to the bankruptcy of a relevant person must be in accordance with Form 10. (2) A single application may be made for the summons of 2 or more examinable persons in relation to a relevant person’s bankruptcy. (3) The application must be accompanied by: (a) a draft of each summons applied for; and (b) an affidavit that complies with subrule (4). (4) The supporting affidavit must: (a) state whether the applicant is: (i) a creditor who has a debt provable in the bankruptcy; or (ii) the trustee of the relevant person’s estate; or (iii) the Official Receiver; and (b) state the facts relied on by the applicant to establish that each person to be summoned is an examinable person; and (c) if the summons is to require an examinable person to produce books at the examination: (i) identify the books that are to be produced; and

(ii) give details of: (A) any inquiry by the applicant about the books to be produced; and (B) any refusal by the examinable person to cooperate with the inquiry. Note An examinable person may be required to produce books at an examination that are in the possession of the person and relate to the relevant person or to any of the relevant person’s examinable affairs — see subsection 81(1B) of the Bankruptcy Act.

[page 955] (5) The supporting affidavit may be filed in a sealed envelope marked ‘Affidavit supporting application for summons for examination under subsection 81(1) of the Bankruptcy Act 1966’. (6) If the supporting affidavit is filed in a sealed envelope in accordance with subrule (5), the Registrar must not make it available for public inspection.

[91,300] Hearing of application 6.14 The application may be heard in the absence of a party or in closed court.

[91,305] Requirements for summons 6.15 (1) A summons must be in accordance with Form 9. (2) A Registrar must: (a) sign and affix the stamp of the Court to the summons; and (b) send it to the applicant for service on each examinable person to be summoned for examination. (3) If the summons requires an examinable person to produce books at the examination, the summons must identify the books that are to be produced.

[91,310] Service of summons 6.16 At least 8 days before the date fixed for the examination, the applicant

must: (a) serve the summons on each examinable person personally, or in another way directed by the Court or a Registrar; and (b) give written notice of the date, time and place fixed for the examination to each creditor of the relevant person of whom the applicant has knowledge.

[91,315] Application for discharge of summons 6.17 (1) An examinable person who is served with a summons and wishes to apply for an order to discharge the summons may do so by filing: (a) an interim application in accordance with Form 3 in the proceeding in which the summons was issued; and (b) an affidavit setting out the grounds in support of the application. (2) As soon as possible after filing the interim application and supporting affidavit, the examinable person must serve a copy of each document: (a) on the person who applied for the summons; and (b) if the person who applied for the summons is not the Official Receiver, on the Official Receiver.

[91,320] Conduct money and witnesses expenses 6.18 (1) A person (other than a relevant person) who, in accordance with a summons, attends an examination to give evidence or produce documents is entitled to be paid: (a) enough conduct money to cover the reasonable expenses of travelling from and to the place where the person lives, and any reasonable accommodation expenses; and (b) reasonable expenses for the person’s attendance as a witness. (2) The expenses must be paid by the applicant for the summons. (3) The expenses mentioned in paragraph (1)(a) must be paid a reasonable time before the person is to attend the examination. [page 956]

(4) In this rule: conduct money means a sum of money or its equivalent, such as prepaid travel, sufficient to meet a person’s reasonable expenses of attending an examination and returning after so attending.

PART 7 — ANNULMENT OR REVIEW OF BANKRUPTCY DIVISION 7.1 — ANNULMENT OF BANKRUPTCY

[91,340] Application of Division 7.1 7.01 This Division applies to the following applications: (a) an application under section 153B of the Bankruptcy Act for the annulment of a bankruptcy; (b) an application under section 252B of the Bankruptcy Act for the annulment of the administration of the estate of a deceased person.

[91,345] Requirements for application 7.02 (1) The application must set out the grounds on which the annulment is sought. (2) The application must be served on the trustee at least 7 days before the hearing date fixed for the application. [subr (2) am SLI 18 of 2008 r 3 and Sch 1[3], opn 1 Apr 2008]

[91,350] Notice to creditors 7.03 (1) The applicant must give notice of the application to each person known to the applicant to be a creditor of the bankrupt or a creditor of the estate of the deceased person. (2) The notice must be in accordance with Form 11. (3) The applicant must serve the notice on each creditor at least 7 days before the hearing date fixed for the application. [subr (3) am SLI 18 of 2008 r 3 and Sch 1[4], opn 1 Apr 2008]

[91,355] Report by trustee

7.04 (1) If directed by the Court, the trustee must prepare a report for the periods before and after the bankruptcy or the administration of the estate of the deceased person. [subr (1) am SLI 18 of 2008 r 3 and Sch 1[5], opn 1 Apr 2008]

(2) If the report is in relation to a bankrupt, the report must include information about: (a) the bankrupt’s conduct; and (b) the bankrupt’s examinable affairs; and (c) the administration of the bankrupt’s estate. (3) If the report is in relation to the estate of a deceased person, the report must include information about the administration of the deceased person’s estate. (4) The report must: (a) be in the form of an affidavit; and (b) be filed at least 5 days before the date fixed for the hearing of the application. [subr (4) am SLI 18 of 2008 r 3 and Sch 1[6], opn 1 Apr 2008]

[page 957]

[91,360] Entry and service of annulment order 7.05 If the Court orders an annulment, the applicant must: (a) unless the order is entered in the Court at the time it is made, enter the order within 1 day after it is made; and (b) within 2 days after the entry is stamped, give a copy of the order to the trustee and to the Official Receiver. [r 7.05 am SLI 284 of 2011 r 3 and Sch 1[8], opn 1 Jan 2012]

DIVISION 7.2 — REVIEW OF SEQUESTRATION ORDER

[91,370] Review of Registrar’s decision 7.06 (1) This rule applies in relation to an application for review of a decision by a Registrar to make a sequestration order against the estate of a

debtor (the bankrupt). (2) The application must be served on the trustee at least 7 days before the hearing date fixed for the application. [subr (2) am SLI 18 of 2008 r 3 and Sch 1[7], opn 1 Apr 2008]

(3) The applicant must give notice of the application to each person known to the applicant to be a creditor of the bankrupt. (4) The notice must be in accordance with Form 12. (5) The applicant must serve the notice on each creditor at least 7 days before the hearing date fixed for the application. [subr (5) am SLI 18 of 2008 r 3 and Sch 1[8], opn 1 Apr 2008]

(6) If directed by the Court, the trustee must prepare a report in relation to the bankrupt in accordance with rule 7.04. RULE 7.06 GENERALLY [91,370.5] Principles Hartnett FM set these principles out in rejecting such an application in Brown v A Whistle & Co (1979) Pty Ltd [2011] FMCA 423; BC201104450 at [8]–[10]: [8] The person against whom a sequestration order is made can apply to the Court for review of the order pursuant to r 7.06 of the Federal Magistrates Court (Bankruptcy) Rules 2006. The review is by way of a hearing de novo (Federal Magistrates Court Rules 2001, r 20.03(a)). On the hearing of this application the petitioning creditor must prove, (a) the matters stated in the petition, (b) service of the petition, and (c) that the debt relied on is still owing. The Court has a discretion to make a sequestration order. [9] The petitioning creditor’s documents are in order and the Court is satisfied as to the matters stated in the petition and service of the petition. The Court is further satisfied, on the affidavit evidence filed by the petitioning creditor, that the debt is still owing. 10] No debt agreement has been ratified by the creditors of the respondent. Indeed no proposed debt agreement has been accepted by ITSA and distributed to creditors for consideration. The petitioning creditor has instructed its solicitors that it would not vote in favour of a debt agreement proposal and the petitioning creditor holds approximately 44 percent of the unsecured debt. The petitioning creditor seeks to have the sequestration order remain and the applicant’s application for review dismissed. The question arises whether the foreshadowing of the filing of a proposal by the respondent precludes the making of a sequestration order. Similarly in Khouri v Bayside Hire Pty Ltd [2012] FMCA 320; BC201202399 the Federal Magistrate was unable to determine that the applicant’s signature was on the guarantee document. He said in at [5]: The Applicant maintained that he was not liable for the debt, and sought leave to challenge the underlying debt. As there was no finding on the merits in the state court and the Applicant raised [page 958]

a serious prima facie case, the question of whether there was actually a debt owing to the Respondent was the subject of evidence: see Wren v Mahony [1972] HCA 5; (1972) 126 CLR 212; [1972] ALR 307; 46 ALJR 163; Corney v Brien [1951] HCA 31; (1951) 84 CLR 343; [1951] ALR 525; 15 ABC 154; Re Crum; Ex parte Noyes Bros (Sydney) Ltd (1937) 9 ABC 281. See [82,865F.10].

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PART 8 — TRUSTEES

[91,390] Objection to appointment of trustee (Bankruptcy Act s 157(6)) 8.01 (1) An application objecting to the appointment of a person as a trustee must be accompanied by an affidavit stating the grounds in support of the application. (2) At least 28 days before the hearing date fixed for the application, the application and supporting affidavit must be served on the trustee and any petitioning creditor. (3) At least 14 days before the hearing date fixed for the application, the application and supporting affidavit must be served on each other person known to the applicant to be a creditor of the bankrupt or a creditor of the estate of the deceased person. Note Subsection 157(7A) of the Bankruptcy Act provides that, if the Court cancels the appointment of a trustee and appoints another trustee, the creditor who filed the objection must give the Official Trustee written notice of the cancellation and appointment as soon as practicable.

[91,395] Resignation or release of trustee (Bankruptcy Act ss 180, 183) 8.02 (1) An application for acceptance of a trustee’s resignation from the office of trustee of an estate, or release of a trustee from the trusteeship of an estate, must be accompanied by: (a) an affidavit stating the grounds in support of the application; and (b) if the application is for release of a trustee from the trusteeship of an estate: (i) a statement giving details of the realisation of the bankrupt’s

property and the distribution of the estate by the trustee; and (ii) a copy of the most recent account required under subsection 173(1) of the Bankruptcy Act. (2) The application and supporting documents must be served on: (a) the Official Receiver; and (b) the bankrupt; and (c) anyone else (including a creditor) as ordered by the Court. (3) If the Court makes the order sought, the trustee must: (a) unless the order is entered in the Court at the time it is made, enter the order within 1 day after it is made; and (b) within 2 days after the entry is stamped, give a copy of the order to the Official Receiver. [subr (3) am SLI 284 of 2011 r 3 and Sch 1[9], opn 1 Jan 2012]

PART 9 — DEBT AGREEMENTS

[91,420] Application of Part 9 9.01 This Part applies to the following applications: (a) an application under section 185Q of the Bankruptcy Act for an order terminating a debt agreement; [page 959] (b) an application under section 185T of the Bankruptcy Act for an order declaring that all, or a specified part, of a debt agreement is void.

[91,425] Requirements for application 9.02 (1) If the application is made by a creditor who also seeks a sequestration order, that must be stated in the application. (2) The application must be accompanied by: (a) a copy of the debt agreement; and (b) if the application is for an order terminating a debt agreement — an affidavit stating the facts relied on to satisfy the relevant prerequisite for making the order; and (c) if the application is for an order declaring that all, or a specified part, of a debt agreement is void — an affidavit stating the facts relied on to establish the relevant ground for applying for the order. Note for paragraph (b) The prerequisites for making an order of the kind mentioned in paragraph (b) are set out in subsection 185Q(4) of the Bankruptcy Act. Note for paragraph (c) The grounds for applying for an order of the kind mentioned in paragraph (c) are stated in subsection 185T (2) of the Bankruptcy Act.

[91,430] Service 9.03 At least 5 days before the date fixed for the hearing of the application, the application and each supporting document must be served on: (a) the debtor; and (b) if the applicant is not the Official Trustee — the Official Receiver.

[r 9.03 am SLI 284 of 2011 r 3 and Sch 1[10], opn 1 Jan 2012]

[91,435] Notice to creditors 9.04 (1) At least 5 days before the date fixed for the hearing of the application, the applicant must serve a written notice of the time, date and place fixed for the hearing on each creditor known to the applicant. (2) The notice must be in accordance with Form 13.

[91,440] Entry and service of order 9.05 If the Court makes an order under this Part, the applicant must: (a) unless the order is entered in the Court at the time it is made, enter the order within 1 day after it is made; and (b) within 2 days after the entry is stamped, give a copy of the order to the Official Receiver. [r 9.05 am SLI 284 of 2011 r 3 and Sch 1[11], opn 1 Jan 2012]

PART 10 — PERSONAL INSOLVENCY AGREEMENTS

[91,460] Application of Part 10 10.01 This Part applies to the following applications: (a) an application under section 222 of the Bankruptcy Act for an order setting aside a personal insolvency agreement; (b) an application under section 222C of the Bankruptcy Act for an order terminating a personal insolvency agreement; [page 960] (c) an application under section 222 of the Bankruptcy Act (as applied by section 76B of that Act) for an order setting aside a composition or scheme of arrangement; (d) an application under section 222C of the Bankruptcy Act (as applied by section 76B of that Act) for an order terminating a composition or scheme of arrangement.

[91,465] Requirements for application 10.02 (1) If the application is made by a trustee or creditor who also seeks a sequestration order, that must be stated in the application. (2) The application must be accompanied by an affidavit stating: (a) the facts relied on to establish the relevant ground for making the order; and (b) if the application is for an order under subsection 222(2) or (5) — the facts relied on to satisfy the relevant prerequisite for making the order. Note for paragraph (a) The grounds for making an order to which this Part applies are stated in subsections 222(1), (2) and (5) and section 222C of the Bankruptcy Act. Note for paragraph (b) The prerequisites for making an order of the kind mentioned in paragraph (2)(b) are stated in subsections 222(4) and(7) of the Bankruptcy Act.

[91,470] Service 10.03 Unless the Court otherwise orders, at least 5 days before the date

fixed for the hearing of the application, the application and supporting affidavit must be served on: (a) the debtor; and (b) the trustee of the estate; and (c) the Official Receiver. Note The Court may dispense with service on the debtor of notice of an application: see subsection 222(12) of the Bankruptcy Act. [r 10.03 am SLI 284 of 2011 r 3 and Sch 1[12], opn 1 Jan 2012]

[91,475] Notice to creditors 10.04 (1) At least 5 days before the date fixed for the hearing of the application, the applicant must serve a written notice of the time, date and place fixed for the hearing on each creditor named in the debtor’s statement of affairs. (2) The notice must be in accordance with Form 13.

[91,480] Entry of order 10.05 If: (a) the Court makes an order under this Part; and (b) the order is not entered at the time the order is made; the applicant must, as soon as practicable, request entry of the order in accordance with Division 39.4 of the Federal Court Rules 2011. [r 10.05 subst SLI 284 of 2011 r 3 and Sch 1[13], opn 1 Jan 2012]

PART 11 — ADMINISTRATION OF ESTATES OF DECEASED PERSONS

[91,500] Creditor’s petition (Bankruptcy Act s 244) 11.01 A creditor’s petition for the making of an order for the administration of a deceased person’s estate must be: (a) in accordance with Form 14; and [page 961]

(b) accompanied by the affidavit verifying the petition required by subsection 244(5) of the Bankruptcy Act.

[91,505] Additional affidavits to be filed before hearing of creditor’s petition 11.02 (1) Before the hearing of a creditor’s petition, the applicant creditor must file the affidavits required by this rule. (2) The applicant must file an affidavit stating: (a) that the petition, the affidavit verifying the petition, and any consent to act as trustee filed under section 156A of the Bankruptcy Act, have been served on the legal personal representative of the deceased person or on someone else directed by the Court; and (b) how the documents were served. (3) The applicant must file an affidavit of a person who knows the relevant facts that: (a) was sworn not earlier than the day before the hearing date for the petition; and (b) states that each debt on which the applicant creditor relies is still owing. (4) The applicant must file an affidavit of a person who has searched in the National Personal Insolvency Index no earlier than the day before the hearing date for the petition that: (a) sets out the details of any references in the Index to the deceased person; and (b) states that there were no details of a debt agreement, in relation to the debt on which the applicant relies, in the Index on the day on which the petition was presented; and (c) has attached to it a copy of the relevant extract of the Index. (5) If a proceeding has been commenced in a court for the administration of the deceased person’s estate under a State or Territory law, the applicant creditor must file an affidavit of a person who knows the relevant facts setting out details of the proceeding.

[91,510] Administrator’s petition (Bankruptcy Act s

247) 11.03 A petition by a person administering the estate of a deceased person for an order for the administration of the estate must be in accordance with Form 15. Note Subsection 247(1) of the Bankruptcy Act provides that the petition must be accompanied by a statement, in duplicate, of the deceased person’s affairs and of the administrator’s administration of the deceased person’s estate. Regulation 11.01 of the Bankruptcy Regulations sets out the particulars that must be included in the statement.

[91,515] Entry of order 11.04 If: (a) the Court makes an order under this Part; and (b) the order is not entered at the time the order is made; the applicant must, as soon as practicable, request entry of the order in accordance with Division 39.4 of the Federal Court Rules 2011. Note Subsection 247(3) of the Bankruptcy Act provides that the person administering the estate of the deceased person must, before the end of the period of 2 days beginning on the day the order was made, give a copy of the order to the Official Receiver. [r 11.04 subst SLI 284 of 2011 r 3 and Sch 1[14], opn 1 Jan 2012]

[page 962]

PART 12 — WARRANTS

[91,530] Arrest of debtor or bankrupt (Bankruptcy Act s 78) 12.01 (1) An application for the issue of a warrant for the arrest of a debtor or bankrupt must state the grounds for the issue of the warrant. (2) The application must be accompanied by an affidavit stating the facts in support of the application. (3) The warrant must be in accordance with Form 16. (4) If a debtor or bankrupt is arrested under the warrant, the person who carried out the arrest must immediately give notice of the arrest to a Registrar

in the Registry from which the warrant was issued. Note See also subsection 130(2) of the Bankruptcy Act, which provides for the issue of a warrant for the seizure of property connected with a debtor or bankrupt. A suggested form for such a warrant is shown in Schedule 3 (Notes to these Rules).

[91,535] Apprehension of person failing to attend Court (Bankruptcy Act s 264B(1)) 12.02 (1) A warrant for the apprehension of a person who fails to comply with a summons must be in accordance with Form 17. (2) The Court or a Registrar may order that the warrant be kept in the Registry: (a) for a stated time; and (b) on any conditions that the Court or Registrar considers appropriate. (3) If a person is arrested under the warrant, the person who carried out the arrest must immediately give notice of the arrest to a Registrar in the Registry from which the warrant was issued. Note For the procedure to be followed if a person is apprehended under a warrant and it is not practicable to bring the person before the Court or a Registrar on the day the person is apprehended, see Part 14 of the Bankruptcy Regulations.

PART 13 — COSTS DIVISION 13.1 — ORDERS FOR COSTS

[91,550] Basis for costs 13.01 (1) Subject to Division 13.2, a person who is entitled to costs in a proceeding to which the Bankruptcy Act applies is entitled to costs in accordance with Part 40 of the Federal Court Rules 2011 unless the Court otherwise orders. [subr (1) am SLI 284 of 2011 r 3 and Sch 1[15], opn 1 Jan 2012]

(2) In making an order for costs, the Court may fix the amount of the costs. (3) If the Court fixes the amount of the costs, Part 40 of the Federal Court Rules 2011 does not apply to a bill of costs submitted for the costs, except for the issue of a certificate of taxation. [subr (3) am SLI 284 of 2011 r 3 and Sch 1[16], opn 1 Jan 2012]

COMMENTARY ON RULE 13.01 [91,550.5] Jurisdiction for costs Lloyd-Jones FM in Robins v Black [2009] FMCA 45; BC200900241 puts the matter succinctly as follows: [page 963] [9] Section 86(b) of the Federal Magistrates Act 1999 (Cth) provides that the Federal Magistrates Court Rules 2001 (Cth) may make provision for costs of proceedings in the Federal Magistrates court. Section 79(2) of the Federal Magistrates Act provides that in general federal law proceedings, the Court ‘has jurisdiction to award costs in all proceedings … other than proceedings in respect of which any other Act provides that costs must not be awarded’. Section 79(3) provides that costs are in the discretion of the Court, ‘(e)xcept as provided by the Rules of the court or other Act’. [10] Rule 13.01 of the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) provides that a person entitled to costs in a Bankruptcy Act proceeding ‘is entitled to costs in accordance with O 62 of the Federal Court Rules unless the court otherwise orders’. [11] Section 32 of the Bankruptcy Act provides that the court may ‘make orders as to costs as it thinks fit’. That section makes clear that costs in bankruptcy proceedings are entirely within the court’s discretion: Re Hardwick [1976] Qd R 264 per Dunn J at 266. [91,550.10] Ordering costs other than those on a party-party basis There must be special reasons for ordering costs other than those on a party-party basis: see Lloyd-Jones FM in Robins v Black [2009] FMCA 45; BC200900241 at [12]. See also Roberts-Smith J in Lee v Mavaddat [2005] WASC 68 (S); BC200505070 at [17]: [17] In Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, Sheppard J presented a useful distillation of principles (at 232–234) from his survey of the authorities in this area. It is clear from those that the ‘settled practice’ is for costs orders to be made on a party/party basis, and a different order usually ought not be made. It will be made only where justified by the circumstances. As Sheppard J pointed out, the tests have been variously put, but in essence all seem to come to the existence of some special or unusual feature of the particular case justifying such an order. Some examples of such circumstances given by his Honour include the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud; evidence of particular misconduct that causes loss of time to the court and to other parties; the fact that the proceedings were commenced or continued for some ulterior motive, or in wilful disregard of known facts or clearly established law; and the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions, amongst others. Indemnity costs and the principles upon which they are allowed have been usefully summarised by Lucev FM in Genovese v BGC Construction Pty Ltd (No 2) [2007] FMCA 601; BC200703687 at [47]– [48] [reproduced without footnotes]: [47] In determining whether to award indemnity costs the Court has a very wide discretion, to be exercised judicially. What is an appropriate costs or indemnity costs order depends on the circumstances of the case. The normal practice, not to be lightly departed from, is to provide for costs to be on a party-party basis. Nevertheless, there are certain issues to which the Court will give consideration, and have to weigh, when determining whether to make, and the extent of, an indemnity costs order, which should only be made where the issues establish special or unusual

circumstances warranting an indemnity costs order. Those issues include: a) whether a party should have known that there was no prospect of success in the case; b) where a party alleges fraud or forgery, knowing the accusation to be false, or irrelevant to the issues; c) where a party precipitately punctuates proceedings by resiling from a previously adhered to view; d) where a party acts in a high handed manner; e) whether the party against whom indemnity costs is sought is a self-represented litigant, and whether the self-represented litigant ought escape the consequences of indemnity costs; f) where a party proceeds ‘vexatiously’ that is ‘without sufficient grounds for the purpose of causing trouble or annoyance’; g) where a party proceeds for no good purpose at all due to inertia and carelessness; [page 964] h) i) j) k) l)

where a party persists in the making of allegations which ought not have been made, or in undue prolongation of groundless contentions; where a party’s conduct causes loss of time to the Court, and to other parties; where a party imprudently refuses an offer to compromise; whether the award of indemnity costs is sought against a contemnor; and having regard to the objects of: i) encouraging savings of private costs and avoidance of inherent risks, delays and uncertainties of litigation; ii) saving public cost necessarily incurred in litigation which events demonstrate to have been unnecessary; and iii) indemnifying one party where the real cause and occasion of the litigation is the attitude adopted by the other party.

[48] The discretion is not so circumscribed that an indemnity costs order ‘may only be made against an ethically or morally delinquent party’. The discretionary categories are not closed, and ‘other elements of litigatious of misconduct may be relevant’.

____________________

DIVISION 13.2 — SHORT FORM BILLS OF COSTS

[91,560] Application of Division 13.2 13.02 (1) This Division makes provision in relation to the costs that may be charged by a lawyer for a creditor for work done in relation to a petition against the estate of a debtor on the basis of an act of bankruptcy mentioned in paragraph 40(1)(g) of the Bankruptcy Act.

[subr (1) am SLI 284 of 2011 r 3 and Sch 1[27], opn 1 Jan 2012]

(2) This Division does not apply if the Court fixes the amount of the costs. Note A debtor commits an act of bankruptcy under paragraph 40(1)(g) of the Act if the debtor does not:

(a) comply with a bankruptcy notice issued on the application of a creditor who has obtained a final judgment or final order against the debtor; or (b) satisfy the Court that he or she has a counterclaim, set-off or cross demand equal to or more than the amount of the judgment debt that he or she could not have set up in the action or proceeding in which the judgment or order was obtained. COMMENTARY ON RULE 13.02 [91,560.5] Security for costs The basis for security for costs can be found in O 28 of the Federal Court Rules (see [43,740.5]). See also s 56 of the Federal Court of Australia Act 1976 (Cth). Although the bankruptcy legislation is not primarily concerned with procedure, the status of a party in bankruptcy raises a fundamental principal which is adverted to by Spender J in Tait v Bindal People [2002] FCA 322; BC200201020: [2] The position in relation to security for costs in the present matter is governed by s 56 of the Federal Court of Australia Act 1976 (Cth). Section 56 provides that security is to be of such amount and given at such time and in such manner and form as the Court or Judge directs. As to whether security for costs should be ordered, Cowell v Taylor (1885) 31 Ch D 34 at 38, a case of more than 100 years ago, sets out the fundamental principle: ‘The general rule is that poverty is no bar to a litigant, that, from time immemorial, has been the rule at common law. There is an exception in the case of appeals, but there the appellant has had the benefit of a decision by one of Her Majesty’s Courts, and so an insolvent party is not excluded from the Courts, but only prevented, if he cannot find security, from dragging his opponent from one Court to another’. [page 965] [3] What that passage demonstrates is that there is a difference in principle in relation to the ordering of security for costs in a first instance matter and the ordering, or the consideration of the ordering, of security for costs where one is at the appellate level. The difference is that, at the appellant level, there has already been a determination adverse to the person against whom security for costs is sought and, if it be shown that there is a substantial risk that even if successful the respondent to the application for leave to appeal, or to an appeal, will be deprived of his costs, such an outcome would clearly be unjust. [4] In a sense, it would be giving to a person who has been on the receiving end so to speak of a determination by the courts a free hit at great cost to the other party in the appeal proceedings. That consideration, it seems to me, is also reinforced by the judgment of Gummow J in Wiest v Director of Public Prosecutions and Anor [(1988) 23 FCR 472]. That case involved appeals against extradition with penal consequences. Such consequences were clearly very relevant

considerations, but discretionary reasons moved the Court not to order. Such discretionary considerations, which were particularly noted by Gummow J, included the delay between the filing of the papers and the bringing of the applications for security. His Honour referred to a particular circumstance which is relevant here, and that is that the applicant for security has a judgment in its favour. There was a reference by Gummow J to Bethune v Porteous (1892) 18 VLR 493, again an old case. In that case, Hood J said (at 494): ‘the reason underlying the numerous and varying cases in which appellants have been ordered to give security will be found in the injustice to a successful litigant that may be caused if he be compelled to contest the matter for a second time without a probability of obtaining his costs if ultimately successful.’ That really is the fundamental question of justice behind my decision to order security for costs. This reasoning has been applied in 33 South Pty Ltd v Fitzgerald [2008] FCA 1960; BC200811684.

____________________

[91,565] Short form bill of costs 13.03 (1) If the Court makes a sequestration order against the debtor’s estate, the lawyer may charge for costs the amount, applying on the date when the petition was presented, stated in item 14.1 of Schedule 3 to the Federal Court Rules 2011. [subr (1) am SLI 284 of 2011 r 3 and Sch 1[17] and [27], opn 1 Jan 2012]

(2) If the petition is dismissed, and the creditor obtains an order for costs, the lawyer may charge for costs the amount, applying on the date when the petition was presented, stated in item 14.2 of Schedule 3 to the Federal Court Rules 2011. [subr (2) am SLI 284 of 2011 r 3 and Sch 1[18] and [27], opn 1 Jan 2012]

(3) The lawyer may also charge: (a) if adjournment costs were reserved or awarded on a day — the appropriate amount stated in item 1 of Schedule 3 to the Federal Court Rules 2011; and (b) proper disbursements incurred for the petition. [subr (3) am SLI 284 of 2011 r 3 and Sch 1[19] and [27], opn 1 Jan 2012]

(4) If the lawyer charges an amount for costs under subrule (1) or (2), Part 40 of the Federal Court Rules 2011 does not apply to a bill of costs submitted for the costs, except for the issue of a certificate of taxation. [subr (4) am SLI 284 of 2011 r 3 and Sch 1[20] and [27], opn 1 Jan 2012]

[page 966]

[91,570] Claim for costs 13.04 (1) A lawyer who wishes to claim costs must serve the documents mentioned in subrule (2) on: (a) if the Court makes a sequestration order — the trustee; or (b) if the petition is dismissed — the debtor. [subr (1) am SLI 284 of 2011 r 3 and Sch 1[27], opn 1 Jan 2012]

(2) For subrule (1), the documents are: (a) a bill of costs and disbursements; and (b) a copy of any receipts, vouchers or journals in support of the disbursements claimed. (3) The bill need not include an itemised account of the work or services performed. (4) If the trustee or debtor disputes any of the costs or disbursements, the trustee or debtor must give to the creditor a written notice stating the costs or disbursements disputed. (5) The notice must be given within 14 days after the bill is served. (6) At least 14 days after the lawyer serves the documents on the trustee or debtor, the creditor may file in the Court: (a) a copy of each document; and (b) an affidavit of service of the bill of costs and disbursements on the trustee or debtor; and (c) a copy of any notice given by the trustee or debtor under subrule (4). [subr (6) am SLI 284 of 2011 r 3 and Sch 1[27], opn 1 Jan 2012]

[91,575] Attendance at taxation hearing 13.05 A creditor, the trustee, or a lawyer representing the creditor or the trustee, may attend a taxation of the bill of costs and disbursements only if a taxing officer directs the creditor, trustee or legal practitioner to attend. [r 13.05 am SLI 284 of 2011 r 3 and Sch 1[27], opn 1 Jan 2012]

PART 14 — PROCEEDINGS UNDER CROSS-BORDER INSOLVENCY ACT [Pt 14 insrt SLI 47 of 2009 r 3 and Sch 1[4], opn 30 Mar 2009]

[91,590] Application of this Part and other rules of the Court 14.01 Unless the Court otherwise orders: (a) this Part applies to a proceeding in the Court, under the CrossBorder Insolvency Act, involving a debtor who is an individual; and (b) the rules in the other Parts of these Rules, and the other rules of the Court, apply to a proceeding in the Court under the Cross-Border Insolvency Act if they are relevant and not inconsistent with this Part. Note See rule 1.04 for definitions of Cross-Border Insolvency Act and Model Law.

[91,595] Expressions used in the Cross-Border Insolvency Act 14.02 (1) Unless the contrary intention appears, an expression used in this Part and in the Cross-Border Insolvency Act, whether or not a particular meaning is given to the expression by the Cross-Border Insolvency Act, has the same meaning in this Part as it has in the Cross-Border Insolvency Act. Note The following expressions used in this Part (including in the notes to this Part) are defined in the Model Law as having the following meanings:

establishment means any place of operations where the debtor carries out a non-transitory economic activity with human means and goods or services. [page 967] foreign court means a judicial or other authority competent to control or supervise a foreign proceeding. foreign main proceeding means a foreign proceeding taking place in the State where the debtor has the centre of its main interests. foreign non-main proceeding means a foreign proceeding, other than a foreign main proceeding, taking place in a State where the debtor has

an establishment as defined in the Model Law. foreign proceeding means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation. foreign representative means a person or body, including one appointed on an interim basis, authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding. (2) This Part is to be interpreted in a manner that gives effect to the CrossBorder Insolvency Act.

[91,600] Application for recognition 14.03 (1) An application by a foreign representative for recognition of a foreign proceeding under article 15 of the Model Law must be made by filing an application in accordance with Form 2. (2) The application must: (a) be accompanied by the statements mentioned in article 15 of the Model Law and in section 13 of the Cross-Border Insolvency Act; and (b) name the foreign representative as the applicant and the debtor as the respondent; and (c) be accompanied by an affidavit verifying the matters mentioned in paragraphs 2 and 3 of article 15 of the Model Law and in section 13 of the Cross-Border Insolvency Act. (3) When filing the application, the foreign representative must file, but need not serve, an interim application seeking directions as to service, and the Court may give any directions about service, and make any incidental orders, that it thinks just. (4) The applicant must serve a copy of the application and the other documents mentioned in subrule (2): (a) unless the Court otherwise orders — on each respondent (if any) to the proceeding as soon as practicable after filing an application and, in any case, at least 5 days before the date fixed for hearing; and

(b) on any other persons the Court may direct at the hearing of the interim application. (5) A person who intends to appear before the Court at the hearing of an application for recognition must file and serve the documents mentioned in rule 2.05.

[91,605] Application for provisional relief under article 19 of the Model Law 14.04 (1) Any application by the applicant for provisional relief under article 19 of the Model Law must be made by filing an interim application in accordance with Form 3. [page 968] (2) Unless the Court otherwise orders, the interim application and any supporting affidavit must be served on each respondent at least 3 days before the date fixed for the hearing of the interim application.

[91,610] Registered trustee’s consent to act 14.05 If an application is made for an order: (a) under article 19 or 21 of the Model Law to entrust the administration or realisation of all or part of the debtor’s assets to a person designated by the Court (other than the foreign representative); or (b) under article 21 to entrust the distribution of all or part of the debtor’s assets to a person designated by the Court (other than the foreign representative); then, unless the Court otherwise orders, the person must: (c) be a registered trustee; and (d) have filed a Consent to Act, in accordance with Form 18, that specifies an address for service for the person within Australia. Note registered trustee is defined in subsection 5(1) of the Bankruptcy Act.

[91,615] Notice of filing of application for recognition 14.06 (1) Unless the Court otherwise orders, the applicant in a proceeding mentioned in rule 14.03 must: (a) send a notice of the filing of the application in accordance with Form 19 to each person whose claim to be a creditor of the respondent is known to the applicant; and (b) publish a notice of the filing of the application: (i) in accordance with Form 19; and (ii) once in a daily newspaper circulating generally in the State or Territory where the respondent has his or her principal, or last known, place of residence. (2) The Court may direct the applicant to publish a notice in accordance with Form 19 in a daily newspaper circulating generally in any State or Territory not described in subparagraph (1)(b)(ii).

[91,620] Notice of order for recognition, withdrawal etc 14.07 (1) If the Court makes an order for recognition of a foreign proceeding under article 17 of the Model Law, or makes any order under article 19 or 21 of the Model Law, the applicant must, as soon as practicable after the order is made, do all of the following: (a) have the order entered; (b) serve a copy of the entered order on the respondent; (c) send a notice of the making of the order in accordance with Form 20 to each person whose claim to be a creditor of the respondent is known to the applicant; (d) publish a notice of the making of the order in accordance with Form 20, in accordance with subparagraph 14.06(1)(b)(ii). (2) The Court may direct the applicant to publish the notice in accordance with Form 20 in a daily newspaper circulating generally in any State or Territory not described in subparagraph 14.06(1)(b)(ii). (3) If the application for recognition is withdrawn or dismissed, the

applicant must, as soon as practicable, do all of the following: (a) for a dismissal — have the order of dismissal entered; (b) serve a copy of the entered order of dismissal or notice of the withdrawal, on the respondent; [page 969] (c) send a notice of the dismissal or withdrawal in accordance with Form 21 to each person whose claim to be a creditor of the respondent is known to the applicant; (d) publish a notice of the dismissal or withdrawal in accordance with Form 21, in accordance with subparagraph 14.06(1)(b)(ii). (4) The Court may direct the applicant to publish the notice in accordance with Form 21 in a daily newspaper circulating generally in any State or Territory not described in subparagraph 14.06(1)(b)(ii).

[91,625] Relief after recognition 14.08 (1) If the Court has made an order for recognition of a foreign proceeding, any application by the applicant for relief under paragraph 1 of article 21 of the Model Law must be made by filing an interim application, and any supporting affidavit, in accordance with Form 3. (2) Unless the Court otherwise orders, an interim application under subrule (1) and any supporting affidavit must be served at least 3 days before the date fixed for the hearing of the interim application on the following persons: (a) the respondent; (b) any person that the Court directed be served with the originating process by which the application for recognition was made; (c) any other person that the Court directs. (3) A person who intends to appear before the Court at the hearing of an application under subrule (1) must file and serve the documents mentioned in rule 2.05.

[91,630] Application to modify or terminate an

order for recognition or other relief 14.09 (1) This rule applies to: (a) an application under paragraph 4 of article 17 of the Model Law for an order modifying or terminating an order for recognition of a foreign proceeding; and (b) an application under paragraph 3 of article 22 of the Model Law for an order modifying or terminating relief granted under article 19 or 21 of the Model Law. (2) The application must be made by filing an interim application in accordance with Form 3. (3) An interim application and any supporting affidavit must be served on: (a) for an application under paragraph (1)(a) — the respondent and other persons who were served with, or filed a notice of appearance in relation to, the application for recognition; and (b) for an application under paragraph (1)(b) — the respondent and other persons who were served with, or filed a notice of appearance in relation to, the application for relief under article 19 or 21. (4) Unless the Court otherwise orders, the applicant must: (a) send a notice of the filing of the application in accordance with Form 22 to each person whose claim to be a creditor of the respondent is known to the applicant; and (b) publish a notice of the filing of the application in accordance with Form 22, in accordance with subparagraph 14.06(1)(b)(ii). (5) The Court may direct the applicant to publish the notice in accordance with Form 22 in a daily newspaper circulating generally in any State or Territory not described in subparagraph 14.06(1)(b)(ii). (6) A person who intends to appear before the Court at the hearing of the application must file and serve the documents mentioned in rule 2.05.

[page 970]

[91,705]

SCHEDULE 1 — FORMS

Editor’s Note: Schedule 1 — Forms is reproduced behind guide card “Bankruptcy Forms” at [94,005] et seq.

[page 971]

[91,710]

SCHEDULE 2 — POWERS OF THE COURT THAT MAY BE EXERCISED BY A REGISTRAR r 2.02

Item

2

Provision of the Bankruptcy Act 1966 subsection 30(1) (only for an application to set aside a bankruptcy notice) section 33

3

paragraph 40(1)(g)

4

subsection 41(6A)

5 6

subsection 43(1) subsection 46(2)

7

subsection 47(2)

8

section 49

1

Description(for information only)

Power to set aside a bankruptcy notice

Adjournment, amendment of process and extension and abridgment of time Power to grant leave to serve a bankruptcy notice outside Australia Extension of time for compliance with a bankruptcy notice Power to make a sequestration order Power to make a sequestration order against 2 or more debtors Power to give leave to withdraw a creditor’s petition after presentation Power to permit the substitution of another creditor as petitioner

9

subsection 52(1)

10 11

subsection 52(2) subsection 52(3)

12

subsection 52(5)

13 14

section 81 subsection 206(1)

15

subsection 244(9)

16

subsection 244(10)

17

subsection 244(11)

18

subsection 244(12)

19

subsection 244(13)

20

subsection 247(1A)

21 22

section 264B subsection 309(2)

Power to make a sequestration order against the estate of a debtor Power to dismiss a creditor’s petition Power to stay all proceedings under a sequestration order for a period not exceeding 21 days Power to extend a period at the expiration of which a creditor’s petition lapses Powers in relation to examinations Power to adjourn a creditor’s petition if creditors have passed a resolution for a deed and to subsequently dismiss the petition Power to direct service of a creditor’s petition on a person under Part XI Power to dispense with service of a creditor’s petition under Part XI Power to make an order for the administration of an estate under Part XI Power to dismiss a creditor’s petition under Part XI Power to give leave to present petition under Part XI Power to make an order for the administration of the estate of a deceased person on the petition of a person administering the estate Power to issue a warrant Power to order substituted service

[page 972]

[91,800]

SCHEDULE 3 — NOTES TO THESE RULES

Editor’s Note: Schedule 3 — Notes to these rules is reproduced behind guide card “Bankruptcy Forms”

[page 973]

BANKRUPTCY REGULATIONS 1996 — FORMS NUMERICAL TABLE OF FORMS — BANKRUPTCY REGULATIONS SCHEDULE 1 Form

1 2

Title

Authority

Bankruptcy Notice …. reg 4.02 Trustee’s account of receipts and reg 16.17 payments [repealed] ….

Paragraph

[92,940] [92,945]

Alphabetical Table of Forms — Bankruptcy Regulations Schedule 1 Title

Form

Bankruptcy Notice …. Trustee’s account of receipts and payments [repealed] ….

1 2

Authority

reg 4.02 reg 16.17

Paragraph

[92,940] [92,945]

[page 974]

BANKRUPTCY REGULATIONS 1996 TABLE OF AMENDMENTS The Bankruptcy Forms (Sch 1 of the Bankruptcy Regulations 1996) have been amended as follows: Amending Legislation SR 76 of 1997

Date of Gazette 14 April 1997

SR 220 of 2000

17 August 2000

SR 76 of 2003 SLI 195 of 2010

2 May 2003 9 July 2010

Date of Commencement reg 35 and Sch 1 on 14 April 1997 Taken to have commenced on 1 July 2000 5 May 2003 1 August 2010

[page 975]

SCHEDULE 1 — FORMS

[92,940] FORM 1 — BANKRUPTCY NOTICE Editor’s Note: The Bankruptcy Notice Form is now only available via online services through the Australian Financial Security Authority website www.afsa.gov.au.

[92,945] FORM 2 — TRUSTEE’S ACCOUNT OF RECEIPTS AND PAYMENTS (reg 16.17) [Form 2 rep SR 76 of 1997 reg 35]

[page 977]

INSOLVENCY AND TRUSTEE SERVICE APPROVED FORMS NUMERICAL TABLE OF FORMS — INSOLVENCY AND TRUSTEE SERVICE Form Title 1 Bankruptcy Notice ….

2 3 4 5 6

7

8 9 10

Authority Paragraph Refer to Bankruptcy Regulations Sch 1 Form 1 at [92,940] s 140(8) [93,395] [93,400]

Trustee’s account of receipts and payments …. Statement of affairs …. Administration of a deceased person’s estate [Statement of Affairs under Part XI] …. Declaration of intention to present a debtor’s s 54A petition …. Debtor’s petition …. ss 55(2), 56B(2), 57(2) Statement of claim and proxy …. ss 64D, 64E, 64ZC Proof of debt …. ss 84(2), 85(2) Notice of demand …. s 129(4B) Application for registration as a trustee …. s 154A(2)

[93,405] [93,410]

[93,415]

[93,420] [93,425] [93,430] [93,435]

11 12 13 14 15 16 17 18 19 20 21 22 23

Application for change of conditions on practising as a registered trustee …. Trustee consent to act declaration …. Controlling trustee authority …. Request to advertise meeting of creditors …. Interest charge payment …. Realisations charge payment …. Debt agreement statement of affairs …. Notice of special resolution ….

s 155E(2) s 156A s 188 s 214(2)

s 204, reg 10.05 s 224A

Notice of completion, variation, termination or setting aside …. Supervised account notice determination …. s 139ZIC Supervised account notice …. s 139ZIE Revocation of supervised account notice …. s 139ZID Request for refund of realisations or interest charge ….

[93,440] [93,445] [93,450] [93,455] [93,460] [93,465] [93,470] [93,475] [93,480] [93,485] [93,490] [93,495] [93,500] [page 978]

24A

24B 25

26

Application for registration as a debt agreement administrator (individual or person with overall management responsibility) …. Application for registration as a debt agreement administrator (company) …. Application to change or remove conditions imposed on the registration of a Debt Agreement Administrator …. Application for surrender of registration as a Registered Debt Agreement Administrator

s 186B(2) (a) [93,505] s 186B(2) (a) s 186H(2) (a)

[93,510]

[93,520] s 186L(2) (a)

27 28 29 30

…. Application for the issue of a 77CA notice …. Application for review of trustee remuneration …. Application for approval of trustee remuneration …. Payment of debt agreement proposal lodgement fee ….

[93,525] s 77CA [93,530] [93,535] [93,540] [93,545]

Editor’s note: Reproduced with permission from Australian Financial Security Authority. Copyright Commonwealth of Australia. These forms are published as they appear on the Australian Financial Security Authority website www.afsa.gov.au in Microsoft Word and Adobe PDF format, without alteration or amendment.

Alphabetical Table of Forms — Insolvency And Trustee Service Title Administration of a deceased person’s estate [Statement of Affairs under Part XI] …. Application for approval of trustee remuneration …. Application for change of conditions on practising as a registered trustee …. Application for registration as a debt agreement administrator (company) …. Application for registration as a debt agreement administrator (individual or person with overall management responsibility) …. Application for registration as a

Form 4

Authority

Paragraph

[93,405] 29 [93,540] 11

s 155E(2) [93,440]

24B s 186B(2)(a) [93,510] 24A s 186B(2)(a)

[93,505] 10

s 154A(2)

trustee …. Application for review of trustee remuneration …. Application for surrender of registration as a Registered Debt Agreement Administrator …. Application for the issue of a 77CA notice Application to change or remove conditions imposed on the registration of a Debt Agreement Administrator …. Bankruptcy Notice ….

Controlling trustee authority …. Debt agreement statement of affairs …. Debtor’s petition ….

[93,435] 28 [93,535] 26

s 186L(2)(a) [93,525]

27

s 77CA [93,530]

25

s 186H(2)(a)

[93,520] 1

13 17

Refer to Bankruptcy Regulations Sch 1 Form 1 at [92,940] s 188 [93,450] [93,470]

6

ss 55(2), 56B(2), 57(2)

[93,415] [page 979]

Declaration of intention to present a debtor’s petition …. Interest charge payment …. Notice of completion, variation, termination or setting aside …. Notice of demand …. Notice of special resolution …. Payment of debt agreement proposal

5 15 19 9 18 30

s 54A [93,410] [93,460] s 224A s 129(4B) s 204, reg 10.05

[93,480] [93,430] [93,475]

lodgement fee …. Proof of debt …. Realisations charge payment …. Request for refund of realisations or interest charge …. Request to advertise meeting of creditors …. Revocation of supervised account notice …. Statement of affairs …. Statement of claim and proxy …. Supervised account notice determination …. Supervised account notice …. Trustee’s account of receipts and payments …. Trustee consent to act declaration ….

[93,545] 8

ss 84(2), 85(2)

16 23

[93,425] [93,465] [93,500]

14

s 214(2) [93,455]

22 3 7 20 21 2 12

s 139ZID [93,495] [93,400] ss 64D, 64E, 64ZC s 139ZIC s 139ZIE s 140(8)

[93,420] [93,485] [93,490] [93,395] [93,445]

Editor’s note: Reproduced with permission from Australian Financial Security Authority. Copyright Commonwealth of Australia. These forms are published as they appear on the Australian Financial Security Authority website www.afsa.gov.au in Microsoft Word and Adobe PDF format, without alteration or amendment.

[page 980]

[93,395] FORM 2† — TRUSTEE’S ACCOUNT OF RECEIPTS AND PAYMENTS (section 140(8)) Form 2 (1/7/1997) Bankruptcy Act 1966

TRUSTEE’S ACCOUNT OF RECEIPTS AND PAYMENTS ....................................................................... (Show name of bankrupt estate here) Particulars of the receipts and payments for the period commencing on (date), and ending on (date), are as follows: Receipts

Particulars

Payments Estimated value in Total bankrupt’s receipts Statement to date of Affairs $

Receipts in respect of assets shown in the bankrupt’s Statement of Affairs: Other receipts: (show details)

Particulars

$

Total payments to date $

Realisations charge Legal expenses Trustee’s remuneration (specify basis of calculation) Fees paid under the Bankruptcy Act 1966, or to the Registrar of the Federal Court Costs of securing and protecting assets Charges of auctioneers, estate agents, etc. Postage and stationery Printing and copying Advertising Allowance to debtor

Trading payments Amounts paid to secured creditors Amounts paid to creditors entitled to priority in payment of their debts Other (specify)

[page 981] $

$

$ Dividend/s previously declared of ____ in the $ on __________ Dividend now declared of ____ in the $ on ________

Total

Dated: ......................................... (date)

Total

Signed: ........................................ (Signature of Trustee)

†Editor’s note: To obtain a form for lodgment, contact Australian Financial Security Authority or visit the website at www.afsa.gov.au. For Form 1 — Bankruptcy Notice, refer to Sch 1 Form 1 of the Bankruptcy Regulations at [92,940].

[page 982]

[93,400] FORM 3 — STATEMENT OF AFFAIRS

[page 983]

[page 984]

[page 985]

[page 986]

[page 987]

[page 988]

[page 989]

[page 990]

[page 991]

[page 992]

[page 993]

[page 994]

[page 995]

[page 996]

[page 997]

[page 998]

[page 999]

[page 1000]

[page 1001]

[page 1002]

[page 1003]

[page 1004]

[page 1005]

[page 1006]

[page 1007]

[93,405] FORM 4 — ADMINISTRATION OF A DECEASED PERSON’S ESTATE

[page 1008]

[page 1009]

[page 1010]

[page 1011]

[page 1012]

[page 1013]

[page 1014]

[page 1015]

[page 1016]

[page 1017]

[page 1018]

[page 1019]

[page 1020]

[page 1021]

[page 1022]

[page 1023]

[page 1024]

[page 1025]

[page 1026]

[page 1027]

[page 1028]

[page 1029]

[page 1030]

[93,410] FORM 5 — DECLARATION OF INTENTION TO PRESENT A DEBTOR’S PETITION (section 54A)

[page 1031]

[page 1032]

[page 1033]

[page 1034]

[page 1035]

[page 1036]

[93,415] FORM 6 — DEBTOR’S PETITION (sections 55(2), 56B(2), 57(2))

[page 1037]

[page 1038]

[page 1039]

[93,420] FORM 7 — STATEMENT OF CLAIM AND PROXY (sections 64D, 64E, 64ZC)

[page 1040]

[page 1041]

[page 1042]

[page 1043]

[93,425] FORM 8 — PROOF OF DEBT (sections 84(2), 85(2))

[page 1044]

[page 1045]

[page 1046]

[page 1047]

[93,430] FORM 9 — NOTICE OF DEMAND (section 129(4B))

[page 1048]

[page 1049]

[93,435] FORM 10 — APPLICATION FOR REGISTRATION AS A TRUSTEE (section 154A(2))

[page 1050]

[page 1051]

[93,440] FORM 11 — APPLICATION FOR CHANGE OF CONDITIONS ON PRACTISING AS A REGISTERED TRUSTEE (section 155E(2))

[page 1052]

[page 1053]

[page 1054]

[93,445] FORM 12 — TRUSTEE CONSENT TO ACT DECLARATION (section 156A)

[page 1055]

[page 1056]

[93,450] FORM 13 — CONTROLLING TRUSTEE AUTHORITY (sections 188, 189A(2), reg 10.02(3))

[page 1057]

[page 1058]

[page 1059]

[page 1060]

[93,455] FORM 14 — REQUEST TO ADVERTISE MEETING OF CREDITORS (section 214(2))

[page 1061]

[page 1062]

[93,460] FORM 15 — INTEREST CHARGE PAYMENT

[page 1063]

[page 1064]

[93,465] FORM 16 — REALISATIONS CHARGE PAYMENT

[page 1065]

[page 1066]

[page 1067]

[93,470] FORM 17 — DEBT AGREEMENT STATEMENT OF AFFAIRS

[page 1068]

[page 1069]

[page 1070]

[page 1071]

[page 1072]

[93,475] FORM 18 — NOTICE OF SPECIAL RESOLUTION

[page 1073]

[page 1074]

[93,480] FORM 19 — NOTICE OF COMPLETION, VARIATION, TERMINATION OR SETTING ASIDE

[page 1075]

[page 1076]

[93,485] FORM 20 — SUPERVISED ACCOUNT NOTICE DETERMINATION

[page 1077]

[93,490] FORM 21 — SUPERVISED ACCOUNT NOTICE

[page 1078]

[page 1079]

[93,495] FORM 22 — REVOCATION OF SUPERVISED ACCOUNT NOTICE

[page 1080]

[93,500] FORM 23 — REQUEST FOR REFUND OF REALISATIONS OR INTEREST CHARGE

[page 1081]

[page 1082]

[93,505] FORM 24A — APPLICATION FOR REGISTRATION AS A DEBT AGREEMENT ADMINISTRATOR (INDIVIDUAL OR PERSON WITH OVERALL MANAGEMENT RESPONSIBILITY)

[page 1083]

[page 1084]

[page 1085]

[page 1086]

[93,510] FORM 24B — APPLICATION FOR REGISTRATION AS A DEBT AGREEMENT ADMINISTRATOR (COMPANY)

[page 1087]

[page 1088]

[page 1089]

[page 1090]

[page 1091]

[93,520] FORM 25 — APPLICATION TO CHANGE OR REMOVE CONDITIONS IMPOSED ON THE REGISTRATION OF A DEBT AGREEMENT ADMINISTRATOR

[page 1092]

[93,525] FORM 26 — APPLICATION FOR SURRENDER OF REGISTRATION AS A REGISTERED DEBT AGREEMENT ADMINISTRATOR

[page 1093]

[page 1094]

[93,530] FORM 27 — APPLICATION FOR THE ISSUE OF A 77CA NOTICE

[page 1095]

[page 1096]

[93,535] FORM 28 — APPLICATION FOR REVIEW OF TRUSTEE REMUNERATION

[page 1097]

[page 1098]

[page 1099]

[93,540] FORM 29 — APPLICATION FOR APPROVAL OF TRUSTEE REMUNERATION

[page 1100]

[page 1101]

[93,545] FORM 30 — PAYMENT OF DEBT AGREEMENT PROPOSAL LODGEMENT FEE

[page 1103]

FEDERAL COURT (BANKRUPTCY) RULES 2005 — FORMS NUMERICAL TABLE OF FORMS — BANKRUPTCY REGULATIONS SCHEDULE 1 Form Title 1 Title …. 2 Application …. 3 Interim application ….

4 5

6 7 8 9 10

11

Notice of Appearance …. Notice stating grounds of opposition to application, interim application or petition …. Creditor’s petition …. Sequestration order …. Referral of debtor’s petition …. Summons for examination ….

Authority subr 1.06(3) rr 2.01, 14.03 rr 2.01, 2.04, 6.06, 6.12, 6.17, 14.04, 14.08, 14.09 rr 2.05, 2.06 r 2.06

r 4.02 r 4.08 r 5.01 rr 6.04, 6.09, 6.15 Application for summons to examine rr 6.07, 6.13 relevant person or examinable person …. Notice to creditors of annulment r 7.03

Paragraph [94,005] [94,010]

[94,015] [94,020]

[94,025] [94,030] [94,035] [94,040] [94,045]

[94,050]

12

13 14

15 16 17 18 19 20

application …. Notice to creditors of application for review of Registrar’s decision to make sequestration order …. Notice to creditors …. Applicant creditor’s petition for administration of deceased person’s estate …. Administrator’s petition …. Arrest warrant …. Apprehension warrant …. Consent to act as designated person …. Notice of filing of application for recognition of foreign proceeding …. Notice of making an order under Cross-Border Insolvency Act 2008 ….

[94,055] r 7.06

rr 9.04, 10.04 r 11.01

r 11.03 r 12.01 r 12.02 r 14.05

[94,060] [94,065]

[94,070] [94,075] [94,080] [94,085] [94,090]

r 14.06 [94,095] r 14.07 [94,100] [page 1104]

21

22

Notice of dismissal or withdrawal of r 14.07 application for recognition of foreign proceeding …. Notice of filing of application to r 14.09 modify or terminate an order for recognition or other relief ….

[94,105]

[94,110]

Alphabetical Table of Forms — Federal Court (Bankruptcy) Rules Schedule 1 Title Administrator’s petition ….

Form Authority 15 r 11.03

Paragraph [94,075]

Application …. Applicant creditor’s petition for administration of deceased person’s estate …. Application for summons to examine relevant person or examinable person …. Apprehension warrant …. Arrest warrant …. Consent to act as designated person …. Creditor’s petition …. Interim application ….

Notice of Appearance …. Notice of dismissal or withdrawal of application for recognition of foreign proceeding …. Notice of filing of application for recognition of foreign proceeding …. Notice of filing of application to modify or terminate an order for recognition or other relief …. Notice of making an order under Cross-Border Insolvency Act 2008 …. Notice stating grounds of opposition to application, interim application or petition …. Notice to creditors …. Notice to creditors of annulment

2 14

rr 2.01, 14.03 r 11.01

[94,010]

[94,070] 10

17 16 18 6 3

4 21

rr 6.07, 6.13

r 12.02 r 12.01 r 14.05 r 4.02 rr 2.01, 2.04, 6.06, 6.12, 6.17, 14.04, 14.08, 14.09 rr 2.05, 2.06 r 14.07

[94,050] [94,085] [94,080] [94,090] [94,030]

[94,015] [94,020]

[94,105] 19

r 14.06 [94,095]

22

r 14.09 [94,110]

20

r 14.07 [94,100]

5

13 11

r 2.06

rr 9.04, 10.04 r 7.03

[94,025] [94,065]

application …. Notice to creditors of application for review of Registrar’s decision to make sequestration order …. Referral of debtor’s petition ….

[94,055] 12

8

r 7.06

r 5.01

[94,060] [94,040] [page 1105]

Sequestration order …. Summons for examination …. Document Title ….

7 9 1

r 4.08 rr 6.04, 6.09, 6.15 subrule 1.06(3)

[94,035] [94,045] [94,005]

[page 1106]

FEDERAL COURT (BANKRUPTCY) RULES 2005 TABLE OF AMENDMENTS The Federal Court Bankruptcy Forms (Sch 1 and Sch 3 of the Federal Court (Bankruptcy) Rules 2005) have been amended as follows: Amending Legislation SLI 253 of 2006 SLI 18 of 2008 SLI 47 of 2009 SLI 162 of 2009 SLI 284 of 2011

Date of Gazette 18 September 2006 12 March 2008 23 March 2009 25 June 2009 20 December 2011

Date of Commencement 8 October 2006 1 April 2008 30 March 2009 1 July 2009 1 January 2012

[page 1107]

SCHEDULE 1 — FORMS

[94,005] FORM 1 — DOCUMENT TITLE subrule 1.06(3) No. IN THE [name of Court] District Registry: [State] Division: General IN THE MATTER OF: [Name of debtor or bankrupt estate]

[Name of Applicant(s)] Applicant[s] [Name of Respondent(s)] Respondent[s] [Form 1 subst SLI 284 of 2011 r 3 and Sch 1[21], effective 1 Jan 2012]

of 20

Filed on behalf of (name and _________________________________________

role

Prepared by (name of _________________________________________

of

party)

person/lawyer)

Law firm (if applicable) _________________________________________ Tel _________________________ Fax ___________________________ Email _________________________________________ Address for service (include State and _________________________________________

postcode)

[page 1108]

[94,010] FORM 2 — APPLICATION rr 2.01, 14.03 APPLICATION† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) NOTICE TO RESPONDENT [Complete this section if there is a respondent] TO the respondent of [address]: This application has been set down for the time and place stated below. If you or your legal representative do not attend the Court at that time, the application may be dealt with and judgment may be given, or an order made, in your absence. As soon after the time mentioned as the business of the

Court will allow, any of the following may happen: (a) the application may be heard; (b) directions may be given for the further conduct of the proceeding; (c) any application for interim orders may be heard. Before any attendance at Court, you must file a notice of appearance in the Registry. Time and date for hearing: [to be entered by Registry unless fixed by Court] Place: [address of Court] Date: [signed, District Registrar/Deputy District Registrar/Authorised Officer] †

The following information must appear at the foot of the first page of this application.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ [page 1109]

*Registrar/*Deputy District Registrar/*Authorised Officer A. FINAL ORDERS SOUGHT BY APPLICANT On the grounds stated in the supporting affidavit or statement of claim, the applicant seeks the following orders: [Specify in numbered paragraphs all the final orders sought] 1. 2. 3. B. INTERIM ORDERS SOUGHT BY APPLICANT [Complete this section if you also seek interim orders] The applicant seeks the following interim orders: [Specify in numbered paragraphs all the interim orders sought] 1. 2. 3. Date: [signed, applicant or applicant’s lawyer] *Applicant/*Applicant’s lawyer C. ABRIDGMENT OF SERVICE [Complete this section if the time for service has been abridged] The time by which this application is to be served has been abridged by order made on [date] to [time and date].

D. SERVICE It is not intended to serve this application on any person OR It is intended to serve this application on each person listed below: [name of each person on whom application is to be served] [Form 2 am SLI 18 of 2008 reg 3 and Sch 1[9], effective 1 Apr 2008; SLI 47 of 2009 r 3 and Sch 1[5] and [6], effective 30 Mar 2009; SLI 162 of 2009 r 3 and Sch 1[1], effective 2 July 2009; SLI 284 of 2011 r 3 and Sch 1[22], effective 1 Jan 2012]

Note An application must state each section of the Bankruptcy Act, regulation of the Bankruptcy Regulations or section of the Cross-Border Insolvency Act under which the proceeding is brought — see paragraph 2.01(3)(a). * Omit if inapplicable Note An application must state each section of the Bankruptcy Act or the Bankruptcy Regulations under which the proceeding is brought — see paragraph 2.01(3)(a). *Omit if inapplicable

[page 1110]

[94,015] FORM 3 — INTERIM APPLICATION rr 2.01, 2.04, 6.06, 6.12, 6.17, 14.04, 14.08, 14.09 INTERIM APPLICATION† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s) for interim order] Applicant(s) for interim order [name of respondent(s) for interim order] Respondent(s) for interim order NOTICE This interim application has been set down for the time and place stated below. If you or your legal representative do not attend the Court at that time, the interim application may be dealt with and an order made in your absence. Time and date for hearing: [to be entered by Registry unless fixed by Court] Place: [address of Court] DETAILS OF INTERIM ORDERS On the grounds stated in the supporting affidavit, the applicant [name], seeks the following interim orders: [Specify in numbered paragraphs all the interim orders sought] 1. 2. 3. Date: [signed by the applicant making this application or the applicant’s lawyer] [page 1111] *Applicant/*Applicant’s lawyer

[Form 3 subst SLI 253 of 2006 s 3 and Sch 1[1], effective 8 Oct 2006; am SLI 18 of 2008 reg 3 and Sch 1[10], effective 1 Apr 2008; SLI 47 of 2009 r 3 and Sch 1[7] and [8], effective 30 Mar 2009; SLI 162 of 2009 r 3 and Sch 1[2], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[23], effective 1 Jan 2012] †

The following information must appear at the foot of the first page of this application.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ Note An interim application must state each section of the Bankruptcy Act, regulation of the Bankruptcy Regulations or section of the Cross-Border Insolvency Act under which the proceeding is brought — see paragraph 2.01(4)(a). * Omit if inapplicable

[page 1112]

[94,020] FORM 4 — NOTICE OF APPEARANCE rr 2.05, 2.06 NOTICE OF APPEARANCE† IN THE [name of Court]

REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) [Name] of [address], [occupation], appears. Solicitor [name] Address: Telephone:

Fax number:

E-mail address: Solicitor’s agent [name] Address: Telephone:

Fax number:

E-mail address: Address for service: Date: [signed, respondent/respondent’s lawyer or supporting creditor/supporting creditor’s lawyer]

[page 1113] *Respondent/*Respondent’s lawyer/*Supporting creditor/*Supporting creditor’s lawyer [Form 4 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[23], effective 1 Jan 2012]

†

The following information must appear at the foot of the first page of this notice.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ * Omit if inapplicable

[page 1114]

[94,025] FORM 5 — NOTICE STATING GROUNDS OF OPPOSITION TO APPLICATION, INTERIM APPLICATION OR PETITION r 2.06 NOTICE STATING GROUNDS OF OPPOSITION TO † APPLICATION, INTERIM APPLICATION OR PETITION IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) [Name of opponent], [specify capacity of opponent, eg creditor, trustee], intends to oppose the *application/*interim application/*petition on the following grounds: 1.

}

[set out grounds of opposition]

2.

}

3.

}

An affidavit supporting the grounds of opposition is filed with this notice. This notice is filed by [name of lawyer for opponent] for [name of opponent]. The opponent’s address for service is: [address for service]. Date: [signed, opponent or opponent’s lawyer] *Opponent/*Opponent’s lawyer [Form 5 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[23], effective 1 Jan 2012] †

The following information must appear at the foot of the first page of this notice.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ * Omit if inapplicable

[page 1115]

[94,030] FORM 6 — CREDITOR’S PETITION r 4.02 CREDITOR’S PETITION† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) NOTICE TO RESPONDENT TO the respondent of [address]: This petition has been set down for hearing by the Court at the time, date and place stated below. If you or your legal representative do not attend the Court at that time, the petition may be dealt with in your absence and a sequestration order making you bankrupt may be made. If you wish to appear at the hearing, you must file and serve a notice of appearance. If you wish to appear at the hearing and oppose this petition, you must: (a) enter an appearance in accordance with Form 4, and file a notice stating grounds of opposition to the petition in accordance with

Form 5 and an affidavit supporting the grounds; and (b) serve a copy of each document on the creditor at the address for service stated below not less than 3 days before the date for the hearing of this petition stated below; and (c) attend at the Court on the date for the hearing stated below. Time and date for hearing: [to be entered by Registry] Place: [address of Court] [page 1116] Date: [signed, Registrar] Registrar †

The following information must appear at the foot of the first page of this petition.

Filed on behalf of (name and role _______________________________________________

of

party)

Prepared by (name of person/lawyer) _______________________________________________ Law firm (if _______________________________________________

applicable)

Tel _______________________________ _________________________________

Fax

Email _______________________________________________ Address for service (include State and _______________________________________________

postcode)

PART 1 PETITION The applicant creditor [name and address of applicant creditor] applies to the Court for a sequestration order under section 43 of the Bankruptcy Act 1966 against the estate of [name, address and occupation of respondent debtor]. 1. The respondent debtor owes the applicant creditor the amount of [$ amount] for [statement of reason for, and details of, the debt, including details of any judgment debt]. 2. The applicant creditor does not hold security over the property of the respondent debtor. OR The applicant creditor holds security over the property of the respondent debtor to the value of [$ amount] and consisting of [statement of particulars of security], and: (a) is willing to surrender this security for the benefit of creditors generally if a sequestration order is made against the respondent debtor; OR (b) the value of the property is [$ amount], which leaves an unsecured debt of [$ amount]. Note If there is more than 1 applicant creditor, the form may be appropriately amended.

3.

At the time when the act of bankruptcy was committed, the respondent debtor: *(a) was personally present in Australia; *(b) was ordinarily resident in Australia; *(c) had a dwelling house or place of business in Australia; *(d) was a member of a firm or partnership carrying on business in Australia by means of partners or agent or manager.

4.

The following act of bankruptcy was committed by the respondent debtor within 6 months before presentation of this petition: [Include the following paragraph if the act of bankruptcy is failure to comply with a bankruptcy notice] The respondent debtor failed to comply on or before [date of act of

5.

bankruptcy] with the requirements of a bankruptcy notice served on *him/*her on [date of service of bankruptcy notice] or to satisfy the Court that *he/*she had a counterclaim, set–off or cross demand equal to or more than the sum claimed in the bankruptcy notice, being a counterclaim, set–off or cross demand that *he/*she could not have set up in the action in which the judgment referred to in the bankruptcy notice was obtained. [If the act of bankruptcy is an act of bankruptcy mentioned in section 40 of the Bankruptcy Act 1966 (other than a failure to comply with a bankruptcy notice), give full details of the act of bankruptcy including details of any judgment.] The applicant creditor provides the following information, to the extent it is known to the applicant creditor, for use by the Insolvency and Trustee Service Australia: (a) any alias used by the respondent debtor; (b) the date of birth of the respondent debtor; (c) the business name of the respondent debtor; [page 1117] (d) the business address of the respondent debtor.

Note Completion of paragraph 5 is optional.

Date: [signed, applicant or applicant’s lawyer] *Applicant/*Applicant’s lawyer This petition is filed by [name of lawyer for petitioner] for [name of petitioner]. The petitioner’s address for service is: [address for service]. * Omit if inapplicable

PART 2 AFFIDAVIT VERIFYING CREDITOR’S PETITION On [date], I, [name, address and occupation of deponent], *say on oath/*affirm: 1. I am the applicant [or I am a director of the applicant or I am a [occupation] of the applicant and, as such, have access to the books and records of the applicant and am authorised to make this affidavit on the applicant’s behalf]. 2. The statements made in paragraphs 1, 2 and 3 of the creditor’s petition are within my own knowledge true. 3. In respect of the statements made in paragraph 4 of the creditor’s petition, I say the respondent failed, within 21 days after service of the bankruptcy notice, to pay the debt or make an arrangement to *my/*the applicant’s satisfaction for payment of the debt *Sworn/*affirmed at [place] Before me: [signed, person before whom deponent swears or affirms affidavit] Note 1 If necessary, this affidavit, and any other affidavit verifying the petition, may be filed as a separate document in accordance with Form 59 of the Federal Court Rules 2011 with the heading prescribed by subrule 1.06(3) of these Rules. If this affidavit is filed as a separate document, a copy of the petition must be attached to it. Note 2 If the petition is founded on an act of bankruptcy mentioned in paragraph 40(1)(d) of the Bankruptcy Act, the information required by rule 4.03 may be included in this affidavit (or, if an affidavit of the kind mentioned in Note 1 is filed, in that affidavit). Note 3 If the petition is founded on an act of bankruptcy mentioned in paragraph 40(1)(g) of the Bankruptcy Act, the information required by rule 4.04 may be included in this affidavit (or, if an affidavit of the kind mentioned in Note 1 is filed, in that affidavit). Note 4 A creditor must give a copy of this petition to the Official Receiver within 3 working days after presentation — see subregulation 4.05(1) of the Bankruptcy Regulations. [Form 6 am SLI 18 of 2008 reg 3 and Sch 1[11], effective 1 Apr 2008; SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[23] and [24], effective 1 Jan 2012]

* Omit if inapplicable

[page 1118]

[94,035] FORM 7 — SEQUESTRATION ORDER r 4.08 SEQUESTRATION ORDER† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) *JUDGE/*REGISTRAR: DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: 1. A sequestration order be made against the estate of [name of debtor]. 2. The applicant creditor’s costs be taxed and paid from the estate of

the respondent debtor in accordance with the Bankruptcy Act 1966. The Court notes that the date of the act of bankruptcy is [date]. Date entry stamped: [signed, Registrar] Registrar ‡NOTE

Subsection 35A(5) of the Act provides that a party to proceedings in which a Registrar has exercised any of the powers of the Court under subsection 35A(1) of the Act may, within the time prescribed by the Rules of Court, or within any further time allowed in accordance with the Rules of Court, apply to the Court to review that exercise of power.

[page 1119] Rule 2.03 provides that, subject to any direction by the Court to the contrary, an application under subsection 35A(5) of the Act for review of the exercise of a power of the Court by a Registrar under subsection 35A(1) of the Act must be made by interlocutory application within 21 days after the day on which the power was exercised. An applicant seeking a review can apply to a Judge to waive the requirement that the application for review be made by interlocutory application (see rule 1.34 of the Federal Court Rules 2011). [Form 7 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[25], effective 1 Jan 2012; SLI 230 of 2013 r 4 and Sch 1 item 4, effective 19 Sep 2013] †

The following information must appear at the foot of the first page of this order.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________ Email ____________________________________

Fax

Address for service (include State and postcode) ____________________________________ *Omit if inapplicable ‡ Omit this note if the orders have not been made by a Registrar.

[page 1120]

[94,040] FORM 8 — REFERRAL OF DEBTOR’S PETITION r 5.01 REFERRAL OF DEBTOR’S PETITION† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) The debtor [name of debtor] has presented a debtor’s petition to the Official Receiver. Creditor’s petition No. [number] of [year] is pending against a number of debtors or a partnership and includes this debtor. A copy of the debtor’s petition and statement of affairs is filed with this referral.

The Court is asked to give a direction to accept or reject the petition. Date: [signed, Official Receiver] Official Receiver NOTICE TO OFFICIAL RECEIVER, DEBTORS AND APPLICANT CREDITOR This referral has been set down for hearing by the Court at: Time and date: [to be entered by Registry] Place: [address of Court] Date: [page 1121] [signed, Registrar] Registrar [Form 8 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012] †

The following information must appear at the foot of the first page of this referral.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________

[page 1122]

[94,045] FORM 9 — SUMMONS FOR EXAMINATION rr 6.04, 6.09, 6.15 SUMMONS FOR EXAMINATION† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) Time and date for examination: [to be inserted by Registry] Place: [address of Court] TO: [name and address of person summoned] 1.

You are required to attend before *the Court/*a Registrar/*a magistrate at the time, date and place stated above to be examined on oath under *section 50/*section 81 of the Bankruptcy Act 1966

and to give evidence in relation to the examinable affairs of [name of bankrupt or debtor]. 2.

You are also required to attend at any time, date and place to which the examination is adjourned if you have been given written notice of that time, date and place.

3.

You are also required to bring the following books with you and produce them at the examination: [list books required]

Date: [signed, Registrar] [page 1123] Registrar This summons was issued on the application of [name of applicant], [specify the capacity of the applicant under subsection 81(1) of the Bankruptcy Act 1966, eg creditor, trustee], whose address for service is [address]. Note 1 Note 1 Subsection 5(1) of the Bankruptcy Act 1966 defines examinable affairs, in relation to a person, to mean: (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 bankrupt or to any of his or her conduct, dealings, transactions, property and affairs.

[Use the following note for a summons addressed to the bankrupt. Otherwise omit it.] Note 2 If you do not comply with this summons, a warrant for your apprehension (arrest) may be issued under section 264B of the Bankruptcy Act 1966.

[Use the following notes for a summons addressed to a person who is not the bankrupt. Otherwise omit them.] Note 2 If you do not comply with this summons, a warrant for your apprehension (arrest) may be

issued under section 264B of the Bankruptcy Act 1966. However, a warrant will not be issued if you were not given a reasonable amount for expenses. Note 3 You may apply to have this summons discharged by filing an interim application and supporting affidavit. [Form 9 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012] †

The following information must appear at the foot of the first page of this summons.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ * Omit if inapplicable

[page 1124]

[94,050] FORM 10 — APPLICATION FOR SUMMONS TO EXAMINE RELEVANT PERSON OR EXAMINABLE PERSON rr 6.07, 6.13 APPLICATION FOR SUMMONS TO EXAMINE RELEVANT PERSON OR EXAMINABLE PERSON† Bankruptcy Act 1966, section 81 IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) On the grounds set out in the supporting affidavit, the applicant requests the *Court/*Registrar to issue a summons under section 81 of the Bankruptcy Act 1966 in accordance with the accompanying draft summons(es) to the following: A. Relevant person(s)

*to give evidence: OR *to give evidence and produce documents:

B.

[set out the name and address of each relevant person and, if appropriate, the details of the documents to be produced] Examinable persons *to give evidence: OR [page 1125] *to give evidence and produce documents: [set out the name and address of each examinable person and, if appropriate, the details of the documents to be produced]

Date: [signed, applicant or applicant’s lawyer] *Applicant/*Applicant’s lawyer [Form 10 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012] †

The following information must appear at the foot of the first page of this application.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel

__________________________

Fax

_____________________________ Email ____________________________________ Address for service (include State and postcode) ____________________________________ *Omit if inapplicable

[page 1126]

[94,055] FORM 11 — NOTICE TO CREDITORS OF ANNULMENT APPLICATION r 7.03 NOTICE TO CREDITORS OF ANNULMENT APPLICATION† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) I, [name], *applicant/*applicant’s lawyer, give notice that [name of debtor or person administering estate of deceased debtor] will be applying for the annulment of the bankruptcy. The application is to be heard at: Time and date: [to be inserted by Registry] Place: [address of court]

If a creditor wishes to take part in the hearing, the creditor must file and serve a notice of appearance at least 3 days before the hearing date stated above. [Form 11 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012]

†

The following information must appear at the foot of the first page of this notice.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ *Omit if inapplicable

[page 1127]

[94,060] FORM 12 — NOTICE TO CREDITORS OF APPLICATION FOR REVIEW OF REGISTRAR’S DECISION TO MAKE SEQUESTRATION ORDER r 7.06 NOTICE TO CREDITORS OF APPLICATION FOR REVIEW OF REGISTRAR’S DECISION TO MAKE SEQUESTRATION ORDER† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) I, [name], *applicant/*applicant’s lawyer, give notice that [name of debtor or person administering estate of deceased debtor] will be applying for review of the decision by Registrar [name] on [date of decision] to make a sequestration order against the estate of [name of debtor].

The application is to be heard at: Time and date: [to be inserted by Registry] Place: [address of court] If a creditor wishes to take part in the hearing, the creditor must file and serve a notice of appearance at least 3 days before the hearing date stated above. [Form 12 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012]

†

The following information must appear at the foot of the first page of this notice. Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ * Omit if inapplicable

[page 1128]

[94,065] FORM 13 — NOTICE TO CREDITORS rr 9.04, 10.04 NOTICE TO CREDITORS† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) I, [name], *applicant/*applicant’s lawyer, give notice that an application for [state nature of application, including any application for sequestration order] has been made to the Court by [name of applicant], [state the capacity of the applicant, eg creditor, debtor or trustee, and relevant section of the Bankruptcy Act 1966]. The application is to be heard at: Time and date: [to be inserted by Registry] Place: [address of court]

Copies of the application and affidavits in support are available from the applicant at the address stated below. If you wish to take part in the proceeding, a notice of appearance must be filed and served 3 days before the hearing. [Form 13 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012]

†

The following information must appear at the foot of the first page of this notice. Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ * Omit if inapplicable

[page 1129]

[94,070] FORM 14 — APPLICANT CREDITOR’S PETITION FOR ADMINISTRATION OF DECEASED PERSON’S ESTATE r 11.01 APPLICANT CREDITOR’S PETITION FOR ADMINISTRATION OF DECEASED PERSON’S ESTATE† Bankruptcy Act 1966, section 244 IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant creditor(s)] Applicant creditor(s) [name of respondent debtor(s)] Respondent debtor(s) NOTICE TO RESPONDENT TO: [legal personal representative of the deceased respondent debtor or other person as directed by the Court under subsection 244(9) of the Bankruptcy Act 1966]

[address] This petition has been set down for hearing by the Court at the time, date and place stated below. If you or your legal representative do not attend the Court at that time, the petition may be dealt with in your absence and an order made for the administration of the estate of the deceased respondent debtor. If you wish to appear at the hearing, you must file and serve a notice of appearance. If you wish to appear at the hearing and oppose this petition, you must: (a) enter an appearance in accordance with Form 4, and file a notice stating grounds of opposition to the petition in accordance with Form 5 and an affidavit supporting the grounds; and [page 1130] (b) serve a copy of each document on the applicant creditor at the address for service stated below not less than 3 days before the date for the hearing of this petition stated below; and (c) attend at the Court on the date for the hearing stated below. Time and date: [to be inserted by Registry] Place: [address of court] Date: [signed, Registrar] Registrar PETITION The applicant creditor, [name and address of creditor], applies to the Court for an order of administration in bankruptcy of the estate of the late [name of deceased respondent debtor] who died on [date of death].

1.

2.

The estate of the deceased respondent debtor owes the applicant creditor the amount of [$ amount] for [statement of reason for the debt]. This debt is a liquidated sum payable immediately or at a certain future time. The applicant creditor does not hold security over the property of the deceased respondent debtor. OR The applicant creditor holds security over the property of the deceased respondent debtor to the value of [$ amount] and consisting of [statement of particulars of security], and: (a) is willing to surrender this security for the benefit of creditors generally if a sequestration order for administration of the estate in bankruptcy is made; OR (b) the value of the property is [$ amount], which leaves an unsecured debt of [$ amount].

Note If there is more than 1 creditor, this form may be appropriately amended.

3.

4.

At the time of the respondent debtor’s death, the respondent debtor: *(a) was personally present in Australia; *(b) was ordinarily resident in Australia; *(c) had a dwelling house or place of business in Australia; *(d) was carrying on business in Australia either personally or by an agent or manager; *(e) was a member of a firm or partnership carrying on business in Australia by means of partners or agent or manager. [Also state any details of the status of any authorisation to administer the deceased person’s estate.]

Date: [signed, petitioner or lawyer for petitioner] *Petitioner/*Petitioner’s lawyer [Form 14 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012]

†

The following information must appear at the foot of the first page of this petition.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________ Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ * Omit if inapplicable

[page 1131]

[94,075] FORM 15 — ADMINISTRATOR’S PETITION r 11.03 ADMINISTRATOR’S PETITION† IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) NOTICE TO RESPONDENT TO: [legal personal representative of the deceased respondent debtor] [address] This petition has been set down for hearing by the Court at the time, date and place stated below. If you or your legal representative do not attend the Court at that time, the petition may be dealt with in your absence and an order made

for the administration of the estate of the deceased respondent debtor. If you wish to appear at the hearing, you must file and serve a notice of appearance. If you wish to appear at the hearing and oppose this petition, you must: (a) enter an appearance in accordance with Form 4, and file a notice stating grounds of opposition to the petition in accordance with Form 5 and an affidavit supporting the grounds; and (b) serve a copy of each document on the applicant creditor at the address for service stated below not less than 3 days before the date for the hearing of this petition stated below; and (c) attend at the Court on the date for the hearing stated below. Time and date for hearing: [to be entered by Registry] Place: [address of Court] [page 1132] Date: [signed, Registrar] Registrar PETITION The applicant, [name and address of administrator], applies to the Court for an order of administration in bankruptcy of the estate of the late [name of the deceased person] who died on [date of death]. 1. The applicant is the administrator of the deceased debtor’s estate. 2. The affairs of the deceased debtor and of my administration of the estate are set out in the documents accompanying this petition. To the best of my belief, it is a true and complete statement.

Note If there is more than 1 administrator, the form may be appropriately amended.

3.

At the time of the debtor’s death, the debtor: *(a) was personally present in Australia; *(b) was ordinarily resident in Australia; *(c) had a dwelling house or place of business in Australia; *(d) was carrying on business in Australia either personally or by an agent or manager; *(e) was a member of a firm or partnership carrying on business in Australia by means of partners or agent or manager.

Date: [signed, petitioner] Petitioner Before: [signature, name, address and occupation of witness] [Form 15 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009; SLI 284 of 2011 r 3 and Sch 1[26], effective 1 Jan 2012]

†

The following information must appear at the foot of the first page of this petition.

Filed on behalf of (name and ____________________________________ Prepared by (name ____________________________________

of

role

of

party)

person/lawyer)

Law firm (if applicable) ____________________________________

Tel __________________________ _____________________________

Fax

Email ____________________________________ Address for service (include State and postcode) ____________________________________ * Omit if inapplicable

[page 1133]

[94,080] FORM 16 — ARREST WARRANT r 12.01 ARREST WARRANT IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) TO: [name of officer], a member/*special member of the Australian Federal Police and to all other members and special members of the Australian Federal Police and to all constables of police throughout the Commonwealth and to the Governor or Keeper of Her Majesty’s Gaol at [place] and to the Governor or Keeper of any of Her Majesty’s Gaols within the Commonwealth. BECAUSE of evidence taken on oath, the Court has reason to believe that [name of debtor or bankrupt], against whom a bankruptcy notice has been issued, has absconded with a view to avoiding payment of *his/*her debts [or otherwise as the case may be in accordance with the wording of section 78 of

the Bankruptcy Act 1966]. THIS warrant therefore requires and authorises you, [name of officer], and all other constables to whom this warrant is addressed, to take [name of debtor or bankrupt] and to deliver *him/*her to the Governor or Keeper of Her Majesty’s Gaol at [place], and you the Governor or Keeper are to receive [name of debtor or bankrupt] and keep *him/*her safely in the gaol and in your custody until the Court otherwise orders. THIS warrant also requires and authorises you, [name of officer], and all other constables to whom this warrant is addressed, to seize any property, books, documents, papers and writings in the possession of the *debtor/*bankrupt, and to deliver them into the custody of [full name and address of person named in Court’s order] to be kept by that person until the Court makes an order for their disposal. Dated: [signed, Registrar] Registrar [Form 16 am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009]

* Omit if inapplicable

[page 1134]

[94,085] FORM 17 — APPREHENSION WARRANT r 12.02 APPREHENSION WARRANT Bankruptcy Act 1966, section 264B IN THE [name of Court] REGISTRY: [name of Registry] GENERAL DIVISION No.

of [year]

IN THE MATTER OF [name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s) TO: [name of officer], a *member/*special member of the Australian Federal Police and to all other members and special members of the Australian Federal Police and to all constables of police throughout the Commonwealth and to the Governor or Keeper of Her Majesty’s Gaol at [place], and to the Governor or Keeper of any of Her Majesty’s Gaols within the Commonwealth.

BY summons dated [date], and directed to [full name and address of person named in summons], [person named in summons] was required to appear personally before *the Court/*a Registrar/*a Magistrate at [time] at [address at which examination or other proceeding was to have been held], AND which summons was, as has been proved on oath, served on [name of person] on [date]. ‡AND

a reasonable amount was tendered to [name of person] for expenses, AND, without reasonable excuse, the person failed to appear as required by the summons. THIS warrant therefore requires and authorises you, [name of officer], and all other constables to whom this warrant is addressed, to take [name of person] and bring *him/*her up for examination to the Court [address] or a registry of the Court that is convenient. THIS warrant also requires and authorises you, if [name of person] cannot immediately be brought before *the Court/*a Registrar/*a Magistrate, to deliver *him/*her to the Governor or Keeper of Her Majesty’s Gaol at a convenient place and you the Governor or Keeper are to receive [name of person] and keep *him/*her safely in the gaol and in your custody until *the Court/*a Registrar/*a Magistrate otherwise orders, and you are to produce *him/*her before *the Court/*a Registrar/*a Magistrate as *the Court/*a Registrar/*a Magistrate directs. THIS warrant also informs you, [name of officer], and all other constables to whom this warrant is addressed, that subsection 264B(4) of the Bankruptcy Act 1966 empowers you to break and enter any place or building for the purpose of executing this warrant. Dated: [signed, Registrar] [page 1135]

Registrar [Form 17 subst SLI 253 of 2006 s 3 and Sch 1[2], effective 8 Oct 2006; am SLI 162 of 2009 r 3 and Sch 1[1], effective 1 July 2009] * Omit if inapplicable ‡ Omit if the summons is to a relevant person under section 81 of the Bankruptcy Act 1966

[page 1136]

[94,090] FORM 18 — CONSENT TO ACT AS DESIGNATED PERSON r 14.05 [Title] I, [name], of [address], a registered trustee, consent to be appointed by the Court and to act as the person designated by the Court under *article 19/*article 21 of the Model Law to administer or realise all or part of the assets of [name of debtor or bankrupt estate] or under article 21 to distribute all or part of the assets of [name of debtor or bankrupt estate]. I am not aware of any conflict of interest or duty that would make it improper for me to act as the person designated by the Court. The hourly rates currently charged in respect of work done as the person designated by the Court by me, and by my partners and employees who may perform work in this administration, are set out below or in the Schedule which is attached to this Consent. I acknowledge that my appointment by the Court does not constitute an express or implied approval by the Court of these hourly rates. Dated: [signed, registered trustee]

registered trustee Schedule [description of hourly rate(s)] [Form 18 insrt SLI 47 of 2009 r 3 and Sch 1[9], effective 30 Mar 2009]

* Omit if inapplicable

[page 1137]

[94,095] FORM 19 — NOTICE OF FILING OF APPLICATION FOR RECOGNITION OF FOREIGN PROCEEDING r 14.06 IN THE FEDERAL COURT OF AUSTRALIA

No of [year]

[Name of debtor or bankrupt estate] TO all the creditors of [name of respondent debtor] TAKE NOTICE that: 1.

An application under the Cross-Border Insolvency Act 2008 for recognition of a foreign proceeding in relation to [name of debtor or bankrupt estate] was commenced by the applicant, [name of applicant], on [date of filing of application] and will be heard by the Court at [address of Court] at [time] on [date]. Copies of documents filed may be obtained from the applicant’s address for service.

2.

The applicant’s address for service is [name and address of applicant’s lawyer or, if there is no lawyer, address of the applicant].

3.

Any person intending to appear at the hearing must file a notice of appearance, in accordance with the prescribed form, together with any affidavit on which the person intends to rely, and serve a copy of the notice and any affidavit on the applicant at the applicant’s address for service at least 3 days before the date fixed for the

hearing. 4.

If you are a foreign creditor you must file in the registry of the Court at the address mentioned in paragraph 1 an affidavit setting out the details of any claim, secured or unsecured, that you may have against the debtor or bankrupt estate above at least 3 days before the date fixed for the hearing.

Date: Name of applicant or applicant’s lawyer: [name] [Form 19 insrt SLI 47 of 2009 r 3 and Sch 1[9], effective 30 Mar 2009; am SLI 284 of 2011 r 3 and Sch 1[27], effective 1 Jan 2012]

[page 1138]

[94,100] FORM 20 — NOTICE OF MAKING OF ORDER UNDER CROSS-BORDER INSOLVENCY ACT 2008 r 14.07 IN THE FEDERAL COURT OF AUSTRALIA

No of [year]

[Name of debtor or bankrupt estate] TO all the creditors of [name of debtor or bankrupt estate] TAKE NOTICE that: 1. On [date], the [name of Court] in Proceeding No of [year], commenced by the applicant [name of applicant], made the following orders under the Cross-Border Insolvency Act 2008 in relation to [name of debtor or bankrupt estate]: [insert details of order]. 2. The applicant’s address for service is [name and address of applicant’s lawyer or, if there is no lawyer, address of the applicant]. 3. The name and address of the foreign representative is [insert name and address]. *4. The name and address of the person entrusted with distribution of the assets is [insert name and address]. Date: Name of applicant or applicant’s lawyer: [name] [Form 20 insrt SLI 47 of 2009 r 3 and Sch 1[9], effective 30 Mar 2009; am SLI 284 of 2011 r 3 and Sch

1[27], effective 1 Jan 2012]

* Omit if inapplicable

[page 1139]

[94,105] FORM 21 — NOTICE OF DISMISSAL OR WITHDRAWAL OF APPLICATION FOR RECOGNITION OF FOREIGN PROCEEDING r 14.07 IN THE FEDERAL COURT OF AUSTRALIA

No of [year]

[Name of debtor or bankrupt estate] TO all the creditors of [name of debtor or bankrupt estate] TAKE NOTICE that the application under the Cross-Border Insolvency Act 2008 for recognition of a foreign proceeding in relation to [name of debtor or bankrupt estate] commenced by the applicant, [name of applicant], on [date of filing of application] was *dismissed/*withdrawn on [date of dismissal/withdrawal] Date: Name of person giving notice or of person’s lawyer: [name] [Form 21 insrt SLI 47 of 2009 r 3 and Sch 1[9], effective 30 Mar 2009; am SLI 284 of 2011 r 3 and Sch 1[27], effective 1 Jan 2012]

* Omit if inapplicable

[page 1140]

[94,110] FORM 22 — NOTICE OF FILING OF APPLICATION TO MODIFY OR TERMINATE AN ORDER FOR RECOGNITION OR OTHER RELIEF r 14.09 IN THE FEDERAL COURT OF AUSTRALIA

No of [year]

[Name of debtor or bankrupt estate] TO all the creditors of [name of debtor or bankrupt estate] TAKE NOTICE that: *1. An application under the Cross-Border Insolvency Act 2008 for an order *modifying/*terminating an order for recognition of a foreign proceeding in relation to [name of debtor or bankrupt estate] was filed by the applicant, [name of applicant], on [date of filing of interim application] and will be heard by …. at [address of Court] at [time] on [date]. Copies of documents filed may be obtained from the applicant’s address for service. *1. An application under the Cross-Border Insolvency Act 2008 for an order *modifying/*terminating relief granted under article 19/*article 21 of the Model Law in relation to [name of debtor or bankrupt estate] was filed by the applicant, [name of applicant], on [date of filing of interim application] and will be heard by …. at [address of Court] at [time] on [date]. Copies of documents filed may be obtained from the applicant’s address for service. 2.

The applicant’s address for service is [name and address of

applicant’s lawyer or, if there is no lawyer, address of the applicant]. 3.

Any person intending to appear at the hearing must file a notice of appearance (if the person has not already done so), in accordance with the prescribed form, together with any affidavit on which the person intends to rely, and serve a copy of the notice (if applicable) and any affidavit on the applicant at the applicant’s address for service at least 3 days before the date fixed for the hearing.

Date: Name of applicant or applicant’s lawyer: [name] [Form 22 insrt SLI 47 of 2009 r 3 and Sch 1[9], effective 30 Mar 2009; am SLI 284 of 2011 r 3 and Sch 1[27], effective 1 Jan 2012]

* Omit if inapplicable

[page 1141]

SCHEDULE 3 — NOTES TO THESE RULES r 12.01 [Sch 3 am SLI 230 of 2013 r 4 and Sch 1 items 5, 6, effective 19 Sep 2013]

[94,115] Note 1 — see rule 12.01 SEARCH WARRANT Bankruptcy Act 1966, section 130 IN THE [name of Court] REGISTRY: [name of Registry] No. IN THE MATTER OF

of [year]

[name of debtor or bankrupt estate] [name of applicant(s)] Applicant(s) [name of respondent(s)] Respondent(s)

TO: [name of officer], a *member/*special member of the Australian Federal Police and to all other members and special members of the Australian Federal Police and to all constables of police throughout the Commonwealth and to any other person specified in Schedule 1. ON the basis of: (a) an application made by the trustee of the estate of [name of bankrupt] under subsection 130(1) of the Bankruptcy Act 1966 for

the issue of a warrant under subsection 130(2) of the Act in relation to premises situated [at address of premises], including any garage or storage area within the boundaries of the premises; and (b) information given to me by affidavit that there are reasonable grounds for suspecting that there is on or in the premises the following property (relevant property): (i) property of the bankrupt (including but not limited to furniture, paintings, prints, collectables, porcelain, silver, gold, jewellery, etchings, keys, safes, computers, message taking machines, the contents of any safe, vehicles, plant and equipment, computer tapes, message banks and electronic storage machines); (ii) property that may be connected with, or related to, the bankrupt’s examinable affairs (including but not limited to furniture, painting, prints, collectables, porcelain, silver, gold, jewellery, etchings, keys, safes, computers, message taking machines, the contents of any safe, vehicles, plant and equipment, computer tapes, message banks and electronic storage machines); (iii) books of the bankrupt or an associated entity of the bankrupt relevant to any of the bankrupt’s examinable affairs (including but not limited to policies of insurance, storage receipts or other documents or instruments of storage, journals, correspondence and documents); and (c) any further information given to me, either orally or by affidavit, about the grounds on which the issue of this warrant has been sought; I, [full name], issue this warrant authorising you, [name of officer], together with any other person to whom this warrant is addressed: (d) *at any time of the day or night/*between the hours of [hour] and [hour] to enter on or into the premises, using such force as is necessary for the purpose and is reasonable in the circumstances; and

[page 1142] (e) to search the premises for relevant property; and (f) to break open, and search for relevant property, any cupboard, drawer, chest, trunk, box, package or other receptacle, whether a fixture or not, on or in the premises; and (g) to take possession of, or secure against interference, any relevant property found on or in the premises; and (h) to deliver to the trustee, or to a person authorised in writing by the trustee for the purpose, any property of which possession is taken under the warrant. THIS warrant ceases to have effect at the end of [day that is not later than 7 days after the day of issue of the warrant]. Dated: [signed, Judge] Judge Schedule 1 [name of any other person to whom the warrant is addressed] * Omit if inapplicable

[page 1143]

Costs • Fees • Other CONTENTS Bankruptcy Act — Table …. Paragraph

Bankruptcy Rules Notes to the Application of Schedule 3 — 20 August 1992 to 30 July 1997 …. Schedule 3 — Scale of Solicitors’ Costs — 20 August 1992 to 30 July 1997 …. Schedule 3 — Scale of Solicitors’ Costs — 12 October 1987 to 19 August 1992 …. Notes to the Application of Schedule 3 — 1 November 1988 to 19 August 1992 …. Schedule 3 — Scale of Solicitors’ Costs — 6 March 1984 to 11 October 1987 ….

[120,050] [120,100] [120,150] [120,200] [120,250]

Federal Court Rules Schedule 2 — Costs Allowable for Work Done and Services Performed — 8 November 1983 to 7 May 1987 …. Schedule 2 — Costs Allowable for Work Done and Services Performed — 8 May 1987 to 16 April 1989 ….

[121,000] [121,005]

Schedule 2 — Costs Allowable for Work Done and Services Performed — 17 April 1989 to 18 April 1993 …. Schedule 2 — Costs Allowable for Work Done and Services Performed — 19 April 1993 to 14 July 1988 …. Schedule 2 — Costs Allowable for Work Done and Services Performed — 15 July 1988 to 13 November 2001 …. Schedule 2 — Costs Allowable for Work Done and Services Performed — 14 November 2001 to 31 July 2006 …. Schedule 2 — Costs Allowable for Work Done and Services Performed — 1 January 2011 to 1 August 2011 …. Performed — 1 August 2011 to 31 December 2013 …. Performed — 1 January 2014 to date ….

[121,010] [121,015] [121,020] [121,025] [121,030] [121,035] [121,040]

[page 1145]

Bankruptcy Act — Table

[120,005] Bankruptcy Act 1966 — sections relevant to costs The table below indicates those sections of the Bankruptcy Act 1966 relevant to the question of costs and the point at which they can be located. Section s 32 s 51 s 61 s 100 s 105 s 109 s 167 s 255 s 305 s 315

Title of Section

Cross-Reference Costs …. [80,765] Costs of prosecuting creditor’s petition …. [81,010] Actions by bankrupt partner’s trustee …. [81,255] Costs of proving debts etc …. [81,740] Costs of appeal …. [81,765] Priority payments …. [81,785] Taxation of costs …. [82,495] Record of proceedings or evidence …. [84,140] Payment of expenses by Commonwealth …. [84,725] Regulations …. [84,790]

[page 1147]

Bankruptcy Rules [120,050] Notes to the application of Schedule 3 — 20 August 1992 to 30 July 1997 Schedule 3 — Scale of Solicitors’ Costs was substituted to increase item amounts by SR 261 of 1992, effective from 20 August 1992 to 30 July 1997. From 20 August 1992 to 30 July 1997, the amounts which solicitors were entitled to charge and be allowed were varied twice. The variations were effected by the insertion and subsequent substitution of r 162(2B) in the Bankruptcy Rules, which rule operated to allow a percentage increase in the costs specified in Sch 3. On its insertion by SR 90 of 1993, effective from 1 June 1993 to 30 July 1997, r 162(2B) read as follows: “(2B) The costs: (a) specified in this rule and in Schedule 3; and (b) incurred on or after the commencement of this rule; are increased by 2.92%.”

On its substitution by SR 251 of 1995, effective from 29 August 1995 to 30 July 1997, r 162(2B) read as follows: “(2B) The costs specified in this rule and the costs specified in Schedule 3 being costs incurred on or after the commencement of this subrule, are increased by 9.01%.”

For costs on and from 20 August 1992 to 30 July 1997, refer to the following table: TABLE Period 20 August 1992 to 31 May 1993

Amounts Amounts listed in Column 1 at [120,100]

1 June 1993 to 28 August 1995 29 August 1995 to 30 July 1997

Amounts listed in Column 1 at [120,100] increased by 2.92% Amounts listed in Column 1 at [120,100] increased by 9.01%

[120,100] Schedule 3 — 20 August 1992 to 30 July 1997* (r 162) [Sch 3 subst SR 261 of 1992, opn 20 Aug 1992]

For scale of costs from 20 August 1992 to 30 July 1997, see Column 1 and [120,050]. For scale of costs applicable prior to 20 August 1992, see [120,150] and [120,200]. *Editor’s note: While Sch 3 has not been altered since 20 August 1992, the amounts which solicitors were entitled to charge and be allowed were varied twice from that date. Please refer to [120,050] for an explanation of the variations.

[page 1148] SCALE OF SOLICITORS’ COSTS Item

Matters in connection with which costs are payable

Amount Col 1 20.8.92 to 30.7.97 $

1 2

INSTRUCTIONS For bankruptcy notice, including application for issue of the notice …. For petition, including affidavit verifying petition, or

49.00

3 4 5 6 7 8 9

10 11 12

13 14

15

to oppose petition (not including, where applicable, any special affidavit in support) …. To make or oppose an application to the Court …. To make or oppose an application in Chambers or for an examination before the Registrar …. For special affidavit …. For case for opinion of counsel or for counsel to advise on evidence …. For brief for counsel …. For statement of affairs, including affidavit verifying …. For a necessary document not otherwise provided for …. DRAWING A necessary document (other than a document specified in item 11 or 12) — per folio …. A necessary document comprising a printed form — per folio not printed …. Those parts of a statement of affairs not printed: (a) if 6 folios or fewer or if more than 6 folios — for first 6 folios …. (b) if more than 6 folios — for each folio or part of a folio in excess of 6 folios ….

85.00 49.00 49.00 29.00 61.00 85.00 109.00 29.00

5.00 5.00

32.00 5.00

COPIES Carbon copy — per folio …. Photographic or machine-made copy — per page ….

1.00 1.00

ENGROSSING Of necessary documents for which no other provision is made — per folio ….

3.00

16

17

PERUSALS Petitions, affidavits, notices to produce or admit, applications to the Court or the Registrar, statements of facts, counsel’s opinion or advice or printed forms: (a) if 7 folios or less …. (b) if more than 7 folios — per folio …. Depositions, reports, exhibits, accounts, bills of costs, deeds or documents not otherwise provided for: (a) if 15 folios or fewer …. (b) if more than 15 folios — per folio ….

19.00 3.00

$ 19.00 1.00 [page 1149]

18

19 20

SERVICE Personal service of any document of which personal service is required …. or If serviced by a solicitor at a distance of more than 5 kilometres from the nearest place of business or office of the solicitor serving the document, such sum as is reasonable having regard to the time occupied, distance travelled and other relevant circumstances. Service on a solicitor for a party …. Service by post …. ATTENDANCES

21

On counsel: (a) with a brief or other papers or to appoint

29.00

12.00 12.00

22

23

24 25

26 27

consultation or conference or to mark refresher …. (b) on consultation or conference with counsel: (i) if half an hour or less …. (ii) if over half an hour — per hour or part of an hour …. In Court or Chambers or before the Registrar for a hearing without counsel: (a) for each hour or part of an hour of the hearing …. (b) for each hour or part of an hour when likely to be heard but not heard …. In a Court or Chambers or before the Registrar for a hearing with counsel: (a) for each hour or part of an hour of the attendance during the hearing …. (b) for each hour or part of an hour of the attendance when likely to be heard but not heard …. If a person other than a solicitor attends in place of a solicitor, the allowance shall not exceed two-thirds of the allowance of an attendance by a solicitor. To hear reserved judgement …. On taxation of costs: (a) if a solicitor attends — per hour or part of an hour …. (b) if a clerk attends — per hour or part of an hour …. At meeting of creditors or committee of creditors — per hour or part of an hour …. To file or deliver any documents or papers, to obtain

19.00

49.00 72.00

109.00 109.00

97.00

97.00

25.00

72.00 19.00 97.00

28 29 30

an appointment, to insert advertisements, or other attendance of a similar nature that does not involve the exercise of skill or legal knowledge and is not otherwise provided for …. To swear an affidavit or on deponent to be sworn …. Telephone attendance not exceeding 5 minutes …. Attendance not otherwise provided for: (a) by a solicitor involving skill or legal knowledge — per quarter-hour or part of a quarter-hour …. (b) by a solicitor not involving skill or legal knowledge or by a clerk — per quarterhour or part of a quarter-hour ….

19.00 19.00 8.00

25.00

11.00 [page 1150]

31 32 33 34 35

LETTERS, CIRCULARS AND TELEGRAMS Special letter …. Ordinary letter (including letters between principal and agent) …. Letter — formal acknowledgement …. Circular letter, after the first …. Telegram, including attendance to lodge ….

26.00 14.00 8.00 5.00 14.00

[120,150] Schedule 3 — 12 October 1987 to 19 August 1992* (r 162) For scale of costs applicable prior to 12 October 1987, see [120,250]. For scale of costs applicable from 12 October 1987 to 31 October 1988, see Column 1.

For scale of costs from 1 November 1988 to 19 August 1992, see Column 2 and [120,200]. For scale of costs applicable from 20 August 1992 to 30 July 1997, see [120,100]. SCALE OF SOLICITORS’ COSTS Item

1 2

3 4

5 6 7 8

Matters in connection with which costs are payable

INSTRUCTIONS For bankruptcy notice, including application for issue of the notice …. For petition, including affidavit verifying petition, or to oppose petition (not including, where applicable, any special affidavit in support) …. To make or oppose an application to the Court …. To make or oppose an application in Chambers or for an examination before the Registrar …. For special affidavit …. For case for opinion of counsel or for counsel to advise on evidence …. For brief for counsel …. For statement of affairs, including affidavit verifying ….

Amount Col 1 12.10.87 to 31.10.88 $

Col 2 1.11.88 to 19.8.92 $

38.70

40.00

67.60

70.00

38.70

40.00

38.70 23.10

40.00 24.00

48.30 67.60

50.00 70.00

87.00

90.00

9

For a necessary document not otherwise provided for ….

23.10

24.00

[page 1151] DRAWING 10 A necessary document (other than a document specified in item 11 or 12) — per folio …. 11 A necessary document comprising a printed form — per folio not printed …. 12 Those parts of a statement of affairs not printed: (a) if 6 folios or less or, if more than 6 folios, for first 6 folios …. (b) if more than 6 folios — for each folio or part of a folio in excess of 6 folios …. COPIES 13 Carbon copy — per folio …. 14 Photographic or machine-made copy — per page …. ENGROSSING 15 Of necessary documents for which no other provision is made — per folio …. PERUSALS 16 Petitions, affidavits, notices to produce or admit, applications to the Court or the Registrar, statements of facts, counsel’s

3.80

4.00

3.80

4.00

25.10

26.00

3.80

4.00

1.00

1.00

0.70

1.00

2.10

3.00

opinion or advice or printed forms: (a) if 7 folios or less …. (b) if more than 7 folios — per folio …. 17 Depositions, reports, exhibits, accounts, bills of costs, deeds or documents not otherwise provided for: (a) if 15 folios or less …. (b) if more than 15 folios — per folio …. SERVICE 18 Personal service of any document of which personal service is required …. or If serviced by a solicitor at a distance of more than 5 kilometres from the nearest place of business or office of the solicitor serving the document, such sum as is reasonable having regard to the time occupied, distance travelled and other relevant circumstances. 19 Service on a solicitor for a party …. 20 Service by post ….

14.80

15.00

2.10

3.00

14.80

15.00

1.00

1.00

23.10

24.00

10.70 10.70

11.00 11.00 [page 1152]

21

ATTENDANCES On counsel: (a) with a brief or other papers or to appoint consultation

22

23

24 25

or conference or to mark refresher …. (b) on consultation or conference with counsel: (i) if half an hour or less …. (ii) if over half an hour — per hour or part of an hour …. In Court or Chambers or before the Registrar for a hearing without counsel: (a) for each hour or part of an hour of the hearing …. (b) for each hour or part of an hour when likely to be heard but not heard …. In a Court or Chambers or before the Registrar for a hearing with counsel: (a) for each hour or part of an hour of the attendance during the hearing …. (b) for each hour or part of an hour of the attendance when likely to be heard but not heard …. If a person other than a solicitor attends in place of a solicitor, the allowance shall not exceed two-thirds of the allowance of an attendance by a solicitor. To hear reserved judgment …. On taxation of costs:

14.80

15.00

38.70

40.00

58.00

60.00

87.00

90.00

87.00

90.00

77.50

80.00

77.50

80.00

19.30

20.00

26

27

28 29 30

31 32

(a) if a solicitor attends — per hour or part of an hour …. (b) if a clerk attends — per hour or part of an hour …. At meeting of creditors or committee of creditors — per hour or part of an hour …. To file or deliver any documents or papers, to obtain an appointment, to insert advertisements, or other attendance of a similar nature that does not involve the exercise of skill or legal knowledge and is not otherwise provided for …. To swear an affidavit or on deponent to be sworn …. Telephone attendance not exceeding 5 minutes …. Attendance not otherwise provided for: (a) by a solicitor involving skill or legal knowledge — per quarter-hour or part of a quarter-hour …. (b) by a solicitor not involving skill or legal knowledge or by a clerk — per quarterhour or part of a quarterhour …. LETTERS, CIRCULARS AND TELEGRAMS Special letter …. Ordinary letter (including letters

58.00

60.00

14.80

15.00

77.50

80.00

14.80

15.00

14.80

15.00

6.90

7.00

19.30

20.00

9.70

10.00

20.30

21.00

33 34

between principal and agent) …. Letter — formal acknowledgement …. Circular letter, after the first ….

11.60

12.00

6.90 3.80

7.00 4.00 [page 1153]

35

Telegram, including attendance to lodge ….

11.60

12.00

[Sch 3 subst SR 261 of 1988 effective 1 November 1988] *Editor’s note: While Sch 3 was unaltered between 1 November 1988 and 19 August 1992, the amounts which solicitors were entitled to charge and be allowed were varied three times in that period. Refer to [120,200] for an explanation of the variations.

[120,200] Notes to the application of Schedule 3 — 1 November 1988 to 19 August 1992 Schedule 3 — Scale of Solicitors’ Costs was substituted to increase item amounts by SR 261 of 1988, effective from 1 November 1988. That Schedule remained unaltered until its amendment by SR 261 of 1992 which effected an increase in item amounts from 20 August 1992: see [120,100]. However, between 1 November 1988 and 19 August 1992, the amounts which solicitors were entitled to charge and be allowed were varied three times. The variations were effected by the insertion of r 162(2B) in the Bankruptcy Rules, which operated to allow a percentage increase in the costs specified in Sch 3. On its insertion by SR 376 of 1989, effective from 21 December 1989, r 162(2B) read as follows: “(2B) The costs: (a) specified in this rule and in Schedule 3; and (b) incurred on or after the commencement of this rule; are increased by 3.8%.”

On its amendment by SR 117 of 1991, effective from 22 June 1991, r 162(2B) read as follows: “(2B) The costs: (a) specified in this rule and in Schedule 3; and (b) incurred on or after 22 June 1991; are increased by 13.56%.”

On its amendment by SR 194 of 1992, effective from 1 July 1992, r 162(2B) read as follows: “(2B) The costs: (a) specified in this rule and in Schedule 3; and (b) incurred on or after 1 July 1992; are increased by 2.92%.”

Rule 162(2B) was repealed by SR 261 of 1992 r 6, effective from 20 August 1992 and Sch 3 was amended to increase item amounts. For costs from 1 November 1988 to 19 August 1992, refer to the following table: TABLE Period 1 November 1988 to 20 December 1989 21 December 1989 to 21 June 1991

Amounts Amounts listed in Column 2 at [120,150] Amounts listed in Column 2 at [120,150] increased by 3.8% [page 1154]

22 June 1991 to 30 June 1992 1 July 1992 to 19 August 1992

Amounts listed in Column 2 at [120,150] increased by 13.56% Amounts listed in Column 2 at [120,150] increased by 2.92%

[120,250] Schedule 3 — 6 March 1984 to 11 October

1987* r 162 For scale of costs applicable from 6 March 1984 to 30 April 1986, see Column 1. For scale of costs applicable from 1 May 1986 to 30 October 1986, see Column 2. For scale of costs applicable from 31 October 1986 to 12 April 1987, see Column 3. For scale of costs applicable from 13 April 1987 to 11 October 1987, see Column 4. For scale of costs applicable from 12 October 1987 to 19 August 1992, see [120,150]. SCALE OF SOLICITORS’ COSTS

Item

1

2

Matters in connection with which costs are payable

INSTRUCTIONS For bankruptcy notice, including application for issue of the notice …. For petition, including affidavit verifying petition, or to oppose petition (not including, where

Amount Col 1 6.3.84 to 30.4.86 $

Amount Col 2 1.5.86 to 30.10.86 $

Amount Col 3 31.10.86 to 12.4.87 $

Amount Col 4 13.4.87 to 11.10.87 $

30.00

32.50

36.70

37.70

3

4

5 6

7

applicable, any special affidavit in support) …. To make or oppose an application to the Court …. To make or oppose an application in Chambers or for an examination before the Registrar …. For special affidavit …. For case for opinion of counsel or for counsel to advise on evidence …. For brief for counsel ….

52.50

62.00

64.10

65.90

30.00

35.50

36.70

37.70

30.00

35.50

36.70

37.70

18.00

21.20

21.90

22.50

37.50

44.30

45.80

47.10

52.50

62.00

64.10

65.90 [page 1155]

8

9

10

For statement of affairs, including affidavit verifying …. For a necessary document not otherwise provided for …. DRAWING A necessary document (other than a document specified

67.50

79.80

82.50

84.80

18.00

21.20

21.90

22.50

11

12

13 14

15

16

in item 11 or 12) — per folio …. A necessary document comprising a printed form — per folio not printed …. Those parts of a statement of affairs not printed— If 6 folios or less or, if more than 6 folios, for first 6 folios …. If more than 6 folios — for each folio or part of a folio in excess of 6 folios …. COPIES Carbon copy — per folio …. Photographic or machine made copy — per page …. ENGROSSING Of necessary documents for which no other provision is made — per folio …. PERUSALS Petitions, affidavits, notices to produce or

3.00

3.50

3.60

3.70

3.00

3.50

3.60

3.70

19.50

23.00

23.80

24.50

3.00

3.50

3.60

3.70

0.80

1.00

1.00

1.00

0.60

0.70

0.70

0.70

1.50

1.80

1.90

2.00

17

18

admit, applications to the Court or the Registrar, statements of facts, counsel’s opinion or advice or printed forms— If 7 folios or less …. If more than 7 folios — per folio …. Depositions, reports, exhibits, accounts, bills of costs, deeds or documents not otherwise provided for— If 15 folios or less …. If more than 15 folios — per folio …. SERVICE Personal service of any document of which personal service is required ….

11.30

13.50

14.00

14.40

1.50

1.80

1.90

2.00

11.30

13.50

14.00

14.40

0.80

1.00

1.00

1.00

18.00

21.20

21.90

22.50 [page 1156]

** or if served by a solicitor at a distance of more than 5 kilometres from the nearest

19 20

21

place of business or office of the solicitor serving the document, such sum as is reasonable having regard to the time occupied, distance travelled and other relevant circumstances. Service on a solicitor for a party …. Service by post …. ATTENDANCES On counsel— (a) with a brief or other papers or to appoint consultation or conference or to mark refresher …. (b) on consultation or conference with counsel— (a) if half an

8.30 8.30

9.80 9.80

10.10 10.10

10.40 10.40

11.30

13.50

14.00

14.40

hour or less ….

22

23

(b) if over half an hour — per hour or part of an hour …. In Court or Chambers or before the Register for a hearing without counsel— (a) each hour or part of an hour of the hearing …. (b) each hour or part of an hour when likely to be heard but not heard …. In Court or Chambers or before the Registrar for a hearing with counsel — (a) each hour or part of an hour of the attendance during the hearing …. (b) each hour

30.00

35.50

36.70

37.70

45.00

53.20

55.00

56.50

67.50

79.80

82.50

84.80

67.50

79.80

82.50

84.80

60.00

71.00

73.40

75.50

24 25

or part of an hour of the attendance when likely to be heard but not heard …. If a person other than a solicitor attends in place of a solicitor, the allowance shall not exceed twothirds of the allowance for an attendance by a solicitor. To hear reserved judgment …. On taxation of costs (a) if a solicitor attends — per hour or part of an hour …. (b) if a clerk attends — per hour or part of an hour ….

60.00

71.00

73.40

75.50

15.00

17.70

18.30

18.80

45.00

53.20

55.00

56.50

11.30

13.50

14.00

14.40

[page 1157] 26

27

28

29

30

At meeting of creditors or committee of creditors — per hour or part of an hour …. To file or deliver any documents or papers, to obtain an appointment, to insert advertisements, or other attendance of a similar nature that does not involve the exercise of skill or legal knowledge and is not otherwise provided for …. To swear an affidavit or on deponent to be sworn …. Telephone attendance not exceeding 5 minutes …. Attendance not otherwise provided for (a) by a solicitor involving skill or legal

60.00

71.00

73.40

75.50

11.30

13.50

14.00

14.40

11.30

13.50

14.00

14.40

5.30

6.30

6.50

6.70

knowledge — per quarterhour or part of a quarterhour …. (b) by a solicitor not involving skill or legal knowledge or by a clerk — per quarterhour or part of a quarterhour ….

31 32

33 34

35

LETTERS, CIRCULARS AND TELEGRAMS Special letter …. Ordinary letter (including letters between principal and agent) …. Letter, formal acknowledgement …. Circular letter, after the first …. Telegram including attendance to lodge

15.00

17.70

18.30

18.80

7.50

8.90

9.20

9.50

15.80

18.70

19.30

19.80

9.00

10.60

11.00

11.30

5.30

6.30

6.50

6.70

3.00

3.50

3.60

3.70

….

9.00

10.60

11.00

11.30

[Sch 3 subst SR 54 of 1987 effective 13 April 1987] *Editor’s note: For work done prior to 21 February 1978 being work in respect of which solicitors are entitled to charge and be allowed costs for the purposes of the Bankruptcy Act 1966, the old Sch 2 applies: see SR 19 of 1978 r 15. For work done after 21 February 1978 and prior to 2 August 1979 being work in respect of which solicitors are entitled to charge and be allowed costs for the purposes of the Bankruptcy Act 1966, the amounts previously detailed in Sch 3 apply: see SR 157 of 1979 r 3(2)(3). For work done after 2 August 1979 and prior to 6 March 1984 being work in respect of which solicitors are entitled to charge and be allowed costs for the purposes of the Bankrupcty Act 1966, the amounts previously detailed in Sch 3 apply: see SR 23 of 1984 r 5(3).

[page 1158]

FEDERAL COURT RULES [121,000]

SECOND SCHEDULE — COSTS ALLOWABLE FOR WORK DONE AND SERVICES PERFORMED — 8 November 1983 to 7 May 1987

For scale of costs from 8 November 1983 to 28 February 1985, see Column 1. For scale of costs from 1 March 1985 to 30 April 1986, see Column 2. For scale of costs from 1 May 1986 to 31 October 1986, see Column 3. For scale of costs from 1 November 1986 to 7 May 1987, see Column 4. For scale of costs after 7 May 1987, see [121,005] et seq.

Item

1

2

INSTRUCTIONS To sue or defend or to appeal or oppose an appeal or for any other originating proceeding …. To make or oppose an

Col 1 8.11.83 to 28.2.85 $

Col 2 1.3.85 to 30.4.86 $

Col 3 1.5.86 to 31.10.86 $

Col 4 1.11.86 to 7.5.87 $

84.00

88.00

90.00

93.00

interlocutory application or motion to the Court or a Judge or an officer of the Court …. 3 For a case for opinion of Counsel or for Counsel to advise (including attendance on Counsel with brief) …. 4 For interrogatories, answers to interrogatories or an affidavit (not being a formal affidavit), admissions or a list of documents, and affidavit verifying …. 5 For brief for Counsel on application in Chambers or brief notes for solicitor (where necessary) …. (or, in respect of items 1 to 5 of this Scale, such other sums may be allowed as the taxing officer thinks fit, having regard to all the circumstances of the case) 6 For brief for Counsel or brief notes for solicitor (where necessary); such fee may be allowed as the taxing officer thinks fit having regard to all the circumstances of the case

37.00

39.00

40.00

41.00

36.00

38.00

39.00

40.00

50.00

53.00

54.00

56.00

47.00

49.00

50.00

52.00

7

8

9

For a necessary document not otherwise provided for; such fee may be allowed as the taxing officer thinks fit, having regard to all the circumstances of the case DOCUMENTS Any notice of appearance including copies, filing and service by respondent …. Any application, or notice of motion including fixing return day, copies to file and serve and attendance to file ….

48.00

50.00

51.00

53.00

37.00

39.00

40.00

41.00 [page 1159]

—

if more than 3 folios — add per folio …. 10 Any simple notice or memorandum such as a Notice for Discovery, including copies, filing (where necessary) and service …. 11 Notice to produce, notice to admit or any like

3.00

3.00

3.00

3.00

30.00

32.00

33.00

34.00

notice including copies, filing (when necessary) and service …. — if more than 3 folios — add per folio …. 12 A brief to Counsel (including a brief to hear judgment) and attending Counsel therewith …. — if more than 3 folios — add per folio …. — for copy documents to accompany brief; such other charges in this scale as are appropriate 13 Any necessary subpoena including issuing, one copy to serve and arranging for service ….

37.00

39.00

40.00

41.00

3.00

3.00

3.00

3.00

32.00

34.00

35.00

36.00

4.00

4.00

4.00

4.00

25.00

26.00

27.00

28.00

DRAWING 14 Any necessary document — per folio ….

5.00

5.00

5.00

5.00

ENGROSSING OR TYPING 15 Any necessary document — per folio ….

2.00

2.00

2.00

2.00

COPIES 16 Of any document including carbon, photographic or machine

made copy — per page ….

1.00

1.00

1.00

1.00

10.00 2.00

10.00 2.00

10.00 2.00

10.00 2.00

3.00

3.00

3.00

3.00

except that where the allowance for 10 or more pages is claimed, in respect of any document or documents, costs allowed for such copies shall be at the discretion of the taxing officer PERUSAL 17 Of any document (when necessary) including special letter, telegram or telex — if 3 folios or less …. — or per folio …. except that where allowance for 30 or more folios is claimed, in respect of any document or documents, costs allowed for perusal shall be at the discretion of the taxing officer 18 Where it is not necessary to peruse but it is necessary to scan, a document — per page ….

[page 1160]

except that where allowance for 10 or more pages is claimed, in respect of any document or documents, costs allowed for scanning shall be at the discretion of the taxing officer EXAMINATION 19 Where it is neither necessary to peruse nor scan a document, such as, examination of an appeal book — for examination — per half hour — Solicitor …. — Clerk ….

20

21

22 23

LETTERS Short letter — simple form of letter e.g. formal acknowledgment …. Ordinary letter — including letters between principal and agent …. Circular letter (after the first) — each …. Special letter or letter including opinion …. — or such fee may be allowed as is reasonable having regard to the length of the letter, the

30.00 10.00

32.00 10.00

33.00 10.00

34.00 10.00

8.00

8.00

8.00

8.00

11.00

12.00

12.00

12.00

4.00

4.00

4.00

4.00

20.00

21.00

22.00

23.00

questions involved and appropriate items and charges in this scale 24 Telegram, facsimile copy, or telex including attendance to dispatch …. — or such fee may be allowed as is reasonable in the circumstances 25 Receiving and filing any incoming letter …. (Postage and transmission fees may be claimed as a disbursement properly incurred) SERVICE 26 Personal service (other than where service is claimable under other items in this scale) of any document of which personal service is required …. — or such fee may be allowed as is reasonable having regard to time occupied, distance travelled and other relevant circumstances 27 Service of any document

25.00

26.00

27.00

28.00

4.00

4.00

4.00

4.00

25.00

26.00

27.00

28.00

at the office of the address for service either by delivery or by post ….

10.00

10.00

10.00

10.00

PREPARATION OF APPEAL BOOKS 28 Preparation of appeal books including collating, all necessary material, attendances on the printer, general oversight of their preparation in cases where the taxing officer is satisfied it has been done efficiently — per hour — Solicitor …. — Clerk ….

56.00 14.00

59.00 15.00

60.00 15.00

62.00 16.00 [page 1161]

29 Where appeal books are prepared in a solicitor’s office, the taxing officer may in his discretion allow such sum as he thinks just and reasonable having regard to work and labour properly performed and charges for material used. In exercising his discretion the taxing officer shall have regard to

commercial rates for copying and binding and is not obliged to apply the photographic or machine made copy costs otherwise allowable in this Schedule

30

31

32

33

34

ATTENDANCES An attendance which is capable of being made by a Clerk, such as at the Court Registry …. An attendance which requires the attendance of the solicitor or his managing clerk and involves the exercise of skill or legal knowledge (including an attendance to inspect or negotiate — per quarter hour) — Solicitor …. — Managing Clerk …. An attendance for which no other provision is made herein …. An attendance by telephone which does not involve the exercise of skill or legal knowledge …. An attendance on Counsel — with brief or papers

14.00

15.00

15.00

16.00

23.00 9.00

24.00 9.00

25.00 9.00

26.00 9.00

20.00

21.00

22.00

23.00

7.00

7.00

7.00

7.00

(where not otherwise provided for) …. — to appoint a conference or consultation …. — where appointment made by telephone …. 35 A necessary conference or consultation with Counsel — if half an hour or less …. — if over half an hour — per hour or part thereof …. 36 In Court or Chambers or before the Registrar — for a hearing without Counsel — for each hour or part of an hour of the hearing …. — for each hour or part of an hour when likely to be heard but not heard …. not to exceed per day …. 37 In Court or Chambers or before the Registrar — for a hearing with Counsel

14.00

15.00

15.00

16.00

14.00

15.00

15.00

16.00

7.00

7.00

7.00

7.00

37.00

39.00

40.00

41.00

56.00

59.00

60.00

62.00

110.00

116.00

119.00

123.00

110.00

116.00

119.00

123.00

495.00

522.00

536.00

554.00

—

—

—

for each hour or part of an hour of the attendance during the hearing …. for each hour or part of an hour of the attendance when likely to be heard but not heard …. not to exceed per day …. if a person other than a solicitor attends in place of a solicitor, for each hour

90.00

95.00

97.00

100.00

90.00

95.00

97.00

100.00

405.00

428.00

437.00

450.00

[page 1162] (a) Managing Clerk …. not to exceed per day …. (b) any other Clerk …. not to exceed per day …. 38 To hear judgment …. 39 On taxation of costs — if a solicitor attends — per hour or part of an hour …. — if a clerk attends —

37.00

39.00

40.00

41.00

166.00

176.00

180.00

185.00

20.00

21.00

21.00

21.00

90.00 24.00

95.00 25.00

95.00 26.00

99.00 27.00

56.00

59.00

60.00

62.00

per hour or part of an hour …. 40 Where the solicitor attends at Court or Chambers for the hearing of an application or appeal, or on conference with Counsel, at a distance of more than fifty kilometres from his place of business when it is neither appropriate nor proper for an agent to attend, the taxing officer may allow for each day of absence from place of business, not being a Saturday, Sunday or public holiday such amount as the taxing officer thinks reasonable not exceeding …. [Editor’s note: See item 49 re travelling expenses] GENERAL CARE AND CONDUCT 41 Where the case or circumstances warrant it, an allowance may be claimed under this item, in addition to any item which appears in this scale, for general care and conduct (where appropriate) including:

14.00

15.00

15.00

16.00

125.00

131.00

134.00

139.00

the complexity of (a) the matter and the difficulty and novelty of the questions raised or any of them (b) the importance of the matter to the party and the amount involved (c) the skill, labour, specialised knowledge and responsibility involved therein on the part of the solicitor (d) the number and importance of the documents prepared or perused without regard to length (e) the time expended by the solicitor (f) research and consideration of questions of law and fact COUNSEL’S FEES 42 It shall be proper for a solicitor to incur such Counsel’s fees as appear to be fair and reasonable according to the circumstances of the case and the seniority of

Counsel and such Counsel’s fees may be claimed as a disbursement [page 1163] 43 Where a solicitor briefs another solicitor as Counsel, when it would be appropriate to brief Counsel, the taxing officer may allow such sum as a Counsel’s fee as the taxing officer thinks just and reasonable having regard to the practice of allowing such fees as are permitted by the Supreme Court Rules of the State or Territory concerned (Order 62, rule 35) WITNESSES’ EXPENSES 44 Witnesses called because of their professional, scientific or other special skill or knowledge per day …. 45 Witnesses called, other than those covered in item 44, per day …. 46 Witnesses remunerated in

65.00 to 324.00 36.00 to 60.00

68.00 to 340.00 38.00 to 63.00

70.00 to 348.00 39.00 to 65.00

72.00 to 360.00 40.00 to 67.00

their occupation by wages, salary or fees: the amount lost by attendance at Court provided that the amount recoverable under this item does not exceed the maximum figure prescribed under item 44 47 Where the witness resides more than fifty kilometres from the Court, such sum as the taxing officer thinks reasonable for the actual cost of conveyance, together with a reasonable amount of sustenance or maintenance DISBURSEMENTS 48 All Court fees and other fees and payments to the extent to which they have been properly and reasonably incurred and paid shall be allowed 49 Where a Solicitor attends at Court or Chambers, or on conference with Counsel, in the circumstances outlined in item 40, the taxing officer may allow reasonable travelling expenses to the

extent to which they have been reasonably incurred and paid MISCELLANEOUS 50 Matters not included in this scale to the extent they are covered by Order 62, rule 21 — bills of costs prepared in accordance with Order 62, rule 40shall identify costs and disbursements claimed with an item number — a folio comprises 72 words; there are generally 3 folios to each page **Editor’s note: Prior to 31 October 1986 item 18 read as follows: “… if served by a solicitor at a distance of more than 5 kilometres from the nearest place of business or office of the solicitor serving the document, according to the time occupied and the fares paid.”

[page 1164]

[121,005]

SECOND SCHEDULE — COSTS ALLOWABLE FOR WORK DONE AND SERVICES PERFORMED — 8 May 1987 to 16 April 1989

For scale of costs from 8 May 1987 to 20 September 1987, see Column 1. For scale of costs from 21 September 1987 to 21 February 1988, see Column 2. For scale of costs from 22 February 1988 to 4 September 1988, see Column 3. For scale of costs from 5 September 1988 to 16 April 1989, see Column 4. For scale of costs after 16 April 1989, see [121,010] et seq.

Item

1

2

INSTRUCTIONS To sue or defend or to appeal or oppose an appeal or for any other originating proceeding …. To make or oppose an

Col 1 8.5.87 to 20.9.87 $

Col 2 21.9.87 to 21.2.88 $

Col 3 22.2.88 to 4.9.88 $

Col 4 5.9.88 to 16.4.89 $

96.00

99.00

102.00

104.00

3

4

5

6

interlocutory application or motion to the Court or a Judge or an officer of the Court …. For a case for opinion of Counsel or for Counsel to advise (including attendance on Counsel with brief) …. For interrogatories, answers to interrogatories or an affidavit (not being a formal affidavit), admissions or a list of documents, and affidavit verifying …. For brief for Counsel on application in Chambers or brief notes for solicitor (where necessary) …. (or, in respect of items 1 to 5 of this Scale, such other sums may be allowed as the taxing officer thinks fit, having regard to all the circumstances of the case) For brief for Counsel or brief notes for solicitor (where necessary); such fee may be allowed as the taxing officer thinks fit having regard to all

42.00

43.00

44.00

45.00

41.00

42.00

43.00

44.00

58.00

60.00

62.00

63.00

53.00

54.00

56.00

57.00

the circumstances of the case 7

For a necessary document not otherwise provided for; such fee may be allowed as the taxing officer thinks fit, having regard to all the circumstances of the case DOCUMENTS 8 Any notice of appearance including copies, filing and service by respondent …. 9 Any application, or notice of motion including fixing return day, copies to file and serve and attendance to file …. if more than 3 folios — add — per folio …. 10 Any simple notice or memorandum such as a Notice for Discovery, including copies, filing (where necessary) and service ….

54.00

55.00

57.00

58.00

42.00

43.00

44.00

45.00

3.00

3.00

3.00

3.00

35.00

36.00

37.00

38.00 [page 1165]

11 Notice to produce, notice

to admit or any like notice including copies, filing (when necessary) and service …. if more than 3 folios — add — per folio …. 12 A brief to Counsel (including a brief to hear judgment) and attending Counsel therewith …. if more than 3 folios — add — per folio …. for copy documents to accompany brief; such — other charges in this scale as are appropriate 13 Any necessary subpoena including issuing, one copy to serve and arranging for service ….

42.00

43.00

44.00

45.00

3.00

3.00

3.00

3.00

37.00

38.00

39.00

40.00

4.00

4.00

4.00

4.00

29.00

30.00

31.00

32.00

DRAWING 14 Any necessary document — per folio ….

5.00

5.00

5.00

5.00

ENGROSSING OR TYPING 15 Any necessary document — per folio ….

2.00

2.00

2.00

2.00

COPIES 16 Of any document including carbon,

photographic or machine made copy — per page …. except that where the allowance for 10 or more pages is claimed, in respect of any document or documents, costs allowed for such copies shall be at the discretion of the taxing officer PERUSAL 17 Of any document (when necessary) including special letter, telegram or telex — if 3 folios or less …. — or per folio …. except that where allowance for 30 or more folios is claimed, in respect of any document or documents, costs allowed for perusal shall be at the discretion of the taxing officer 18 Where it is not necessary to peruse but it is necessary to scan, a document — per page …. except that where allowance for 10 or more pages is claimed, in

1.00

1.00

1.00

1.00

10.00 2.00

10.00 2.00

10.00 2.00

10.00 2.00

3.00

3.00

3.00

3.00

respect of any document or documents, costs allowed for scanning shall be at the discretion of the taxing officer EXAMINATION [page 1166] 19 Where it is neither necessary to peruse nor scan a document, such as, examination of an appeal book — for examination — per half hour — Solicitor …. — Clerk ….

20

21

22 23

LETTERS Short letter — simple form of letter eg formal acknowledgment …. Ordinary letter — including letters between principal and agent …. Circular letter (after the first) — each …. Special letter or letter including opinion …. — or such fee may be allowed as is

35.00 10.00

36.00 10.00

37.00 10.00

38.00 10.00

8.00

8.00

8.00

8.00

12.00

12.00

12.00

12.00

4.00

4.00

4.00

4.00

24.00

25.00

26.00

27.00

reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale 24 Telegram, facsimile copy, or telex including attendance to dispatch …. — or such fee may be allowed as is reasonable in the circumstances 25 Receiving and filing any incoming letter …. (Postage and transmission fees may be claimed as a disbursement properly incurred) SERVICE 26 Personal service (other than where service is claimable under other items in this scale) of any document of which personal services is required …. — or such fee may be allowed as is reasonable having regard to time occupied, distance travelled and other relevant

29.00

30.00

31.00

32.00

4.00

4.00

4.00

4.00

29.00

30.00

31.00

32.00

circumstances 27 Service of any document at the office of the address for service either by delivery or by post ….

10.00

10.00

10.00

10.00

PREPARATION OF APPEAL BOOKS 28 Preparation of appeal books including collating, all necessary material, attendances on the printer, general oversight of their preparation in cases where the taxing officer is satisfied it has been done efficiently — per hour — Solicitor …. — Clerk ….

64.00 16.00

66.00 16.00

68.00 16.00

69.00 16.00 [page 1167]

29 Where appeal books are prepared in a solicitor’s office, the taxing officer may in his or her discretion allow such sum as he or she thinks just and reasonable having regard to work and labour properly performed and charges for material used. In exercising his or her

discretion the taxing officer shall have regard to commercial rates for copying and binding and is not obliged to apply the photographic or machine made copy costs otherwise allowable in this Schedule

30

31

32

33

34

ATTENDANCES An attendance which is capable of being made by a Clerk, such as at the Court Registry …. An attendance which requires the attendance of the solicitor or his managing clerk and involves the exercise of skill or legal knowledge (including an attendance to inspect or negotiate — per quarter hour) — Solicitor …. — Managing Clerk …. An attendance for which no other provision is made herein …. An attendance by telephone which does not involve the exercise of skill or legal knowledge …. An attendance on

16.00

16.00

16.00

16.00

27.00 9.00

28.00 9.00

29.00 9.00

30.00 9.00

24.00

25.00

26.00

27.00

7.00

7.00

7.00

7.00

Counsel — with brief or papers (where not otherwise provided for) …. — to appoint a conference or consultation …. — where appointment made by telephone …. 35 A necessary conference or consultation with Counsel — if half an hour or less …. — if over half an hour — per hour or part thereof …. 36 In Court or Chambers or before the Registrar — for a hearing without Counsel — for each hour or part of an hour of the hearing …. — for each hour or part of an hour when likely to be heard but not heard …. not to exceed per day …. 37 In Court or Chambers or before the Registrar —

for hearing with

16.00

16.00

16.00

16.00

16.00

16.00

16.00

16.00

7.00

7.00

7.00

7.00

42.00

43.00

44.00

45.00

64.00

66.00

68.00

69.00

126.00

129.00

133.00

136.00

126.00 567.00

129.00 581.00

133.00 599.00

136.00 612.00

Counsel — for each hour or part of an hour of the attendance during the hearing …. — for each hour or part of an hour of the attendance when likely to be heard but not heard …. not to exceed per day …. — if a person other than a solicitor attends in place of a solicitor, for each hour

103.00

106.00

109.00

111.00

103.00 464.00

106.00 477.00

109.00 492.00

111.00 502.00

[page 1168] (a) Managing Clerk …. not to exceed per day …. (b) any other Clerk …. not to exceed per day …. 38 To hear judgment …. 39 On taxation of costs — if a solicitor attends — per hour or part of an hour …. — if a clerk attends — per hour or part of an hour …. 40 Where the solicitor

42.00 189.00 22.00 99.00 28.00

43.00 195.00 23.00 104.00 29.00

44.00 201.00 24.00 107.00 30.00

45.00 205.00 25.00 109.00 31.00

64.00

66.00

68.00

69.00

16.00

16.00

16.00

16.00

attends at Court or Chambers for the hearing of an application or appeal, or on conference with Counsel, at a distance of more than fifty kilometres from his or her place of business when it is neither appropriate nor proper for an agent to attend, the taxing officer may allow for each day of absence from place of business, not being a Saturday, Sunday or public holiday such amount as the taxing officer thinks reasonable not exceeding …. [Editor’s note: See item 49 re travelling expenses] GENERAL CARE AND CONDUCT 41 Where the case or circumstances warrant it, an allowance may be claimed under this item, in addition to any item which appears in this scale, for general care and conduct (where appropriate) including:— (a) the complexity of the matter and the difficulty and novelty of the

143.00

147.00

152.00

155.00

(b)

(c)

(d)

(e) (f)

questions raised or any of them the importance of the matter to the party and the amount involved the skill, labour, specialised knowledge and responsibility involved therein on the part of the solicitor the number and importance of the documents prepared or perused without regard to length the time expended by the solicitor research and consideration of questions of law and fact

42 It shall be proper for a solicitor to incur such Counsel’s fees as appear to be fair and reasonable according to the circumstances of the case and the seniority of Counsel and such Counsel’s fees may be claimed as a disbursement 43 Where a solicitor briefs

another solicitor as Counsel, when it would be appropriate to brief Counsel, the taxing officer may allow such sum as a Counsel’s fee as the taxing officer thinks

[page 1169] just and reasonable having regard to the practice of allowing such fees as are permitted by the Supreme Court Rules of the State or Territory concerned (Order 62, rule 35) WITNESSES’ EXPENSES 44 Witnesses called because of their professional, scientific or other …. special skill or knowledge …. per day …. 45 Witnesses called, other than those covered in item 44, per day …. 46 Witnesses remunerated in their occupation by wages, salary or fees; the amount lost by

74.00

76.00

78.00

80.00

to 370.00 42.00 to 69.00

to 380.00 43.00 to 71.00

to 392.00 44.00 to 73.00

to 400.00 45.00 to 75.00

attendance at Court 47 Where the witness resides more than 50 kilometres from the Court, such sum as the taxing officer thinks reasonable for the actual cost of conveyance, together with a reasonable amount for sustenance or maintenance DISBURSEMENTS 48 All Court fees and other fees and payments to the extent to which they have been properly and reasonably incurred and paid shall be allowed 49 Where a Solicitor attends at Court or Chambers, or on conference with Counsel, in the circumstances outlined in item 40, the taxing officer may allow reasonable travelling expenses to the extent to which they have been reasonably incurred and paid MISCELLANEOUS 50 Matters not included in this scale to the extent they are covered by Order 62, rule 21

—

—

bills of costs prepared in accordance with Order 62, rule 40 shall identify costs and disbursements claimed with an item number a folio comprises 72 words; there are generally 3 folios to each page

[page 1170]

[121,010]

SECOND SCHEDULE — COSTS ALLOWABLE IN RESPECT OF WORK DONE AND SERVICES PERFORMED — 17 April 1989 to 18 April 1993

For scale of costs from 17 April 1989 to 31 December 1989, see Column 1. For scale of costs from 1 January 1991 to 12 April 1992, see Column 2. For scale of costs from 13 April 1992 to 18 April 1993, see Column 3. For scale of costs after 18 April 1993, see [121,015] et seq.

Item

1

2

3

INSTRUCTIONS to sue or defend or to appeal or oppose an appeal or for any other originating proceeding …. to make or oppose an interlocutory application or motion to the Court of a Judge or an officer of the Court …. for a case for opinion of counsel or for counsel to advise (including

Col 1 17.4.89 to 31.12.90 $

Col 2 1.1.95 to 12.4.92 $

Col 3 13.4.92 to 18.4.93 $

106.00

120.00

124.00

46.00

52.00

54.00

4

5

6

7

8

9

attendance on counsel with brief). for interrogatories, answers to interrogatories or an affidavit (not being a formal affidavit), admissions or a list of documents, and affidavit verifying …. for brief for counsel on application in chambers or brief notes for solicitor (where necessary) …. OR in respect of items 1 to 5 of this scale, any other amounts that may be allowed by the taxing officer, having regard to all the circumstances of the case for brief for counsel or brief notes for solicitor (where necessary) — the fee to be allowed is to be a sum that the taxing officer thinks fit, having regard to all the circumstances of the case for a necessary document not otherwise provided for — the fee to be allowed is to be a sum that the taxing officer thinks fit, having regard to all the circumstances of the case DOCUMENTS any notice of appearance including copies, filing and service by respondent …. any application or notice of motion including fixing return day, copies to file and serve and attendance to

45.00

51.00

52.00

64.00

73.00

75.00

58.00

66.00

68.00

59.00

67.00

69.00

file …. if more than 3 folios — add per folio ….

46.00

52.00

54.00

3.00

3.00

3.00 [page 1171]

10 any simple notice or memorandum such as a notice for discovery, including copies, filing (where necessary) and service …. 11 notice to produce, notice to admit or any like notice including copies, filing (when necessary) and service …. if more than 3 folios — add per folio …. 12 a brief to counsel (including a brief to hear judgment) and attending counsel with the brief …. if more than 3 folios — add per folio …. for copy documents to accompany brief; the other charges in this scale that are appropriate 13 any necessary subpoena including issuing, 1 copy to serve and arranging for service ….

39.00

44.00

45.00

46.00

52.00

54.00

3.00

3.00

3.00

41.00

47.00

48.00

4.00

5.00

5.00

33.00

37.00

38.00

DRAWING 14 any necessary document per folio ….

5.00

6.00

6.00

ENGROSSING OR TYPING 15 any necessary document per folio ….

2.00

2.00

2.00

COPIES 16 of any document including carbon, photographic or machine made copy — per page …. except that, if allowance for 10 or more pages is claimed in respect of any document or documents, the costs to be allowed for the copies are at the discretion of the taxing officer PERUSAL 17 of any document (when necessary) including special letter, telegram or telex if 3 folios or less …. or per folio …. except that, if allowance for 30 or more folios is claimed in respect of any document or documents, the costs to be allowed for perusal are at the discretion of the taxing officer 18 if it is not necessary to peruse but it is necessary to scan a document — per page …. except that, if allowance for 10 or more pages is claimed in respect of any document or documents, the costs to be allowed for scanning are at the discretion of the taxing officer

1.00

1.00

1.00

10.00 2.00

11.00 2.00

11.00 2.00

3.00

3.00

3.00

EXAMINATION [page 1172]

19 if it is neither necessary to peruse nor scan a document, for example, an examination of an appeal book: for examination — per half hour solicitor …. clerk ….

20 21 22 23

24

25

LETTERS short letter — simple form of letter eg formal acknowledgment …. ordinary letter including letters between principal and agent …. circular letter (after the first) each …. special letter or letter including opinion …. OR the fee to be allowed is an amount that is reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale telegram, facsimile copy, or telex including attendance to dispatch …. OR the fee to be allowed is an amount that is reasonable in the circumstances receiving and filing any incoming letter …. (Postage and transmission fees may be claimed as a disbursement properly incurred) SERVICE

39.00 10.00

44.00 11.00

45.00 11.00

8.00

9.00

9.00

12.00 4.00

14.00 5.00

14.00 5.00

27.00

31.00

32.00

33.00

37.00

38.00

4.00

5.00

5.00

26 personal service (except where service is claimable under other items in this scale) of any document of which personal service is required …. OR the fee is to be an amount that is reasonable having regard to time occupied, distance travelled and other relevant circumstances 27 service of any document at the office of the address for service either by delivery or by post …. PREPARATION OF APPEAL BOOKS 28 preparation of appeal books including collating all necessary material, attendances on the printer, general oversight of their preparation in cases where the taxing officer is satisfied it has been done efficiently — per hour solicitor ….

33.00

37.00

37.00

10.00

11.00

11.00

70.00

79.00

81.00 [page 1173]

clerk …. 29 where appeal books are prepared in a solicitor’s office, the taxing officer may in his or her discretion allow a sum that he or she thinks just and reasonable having regard to work and labour properly performed and

16.00

18.00

19.00

charges for material used. In exercising his or her discretion the taxing officer must have regard to commercial rates for copying and binding and is not obliged to apply the photographic or machine made copy costs otherwise allowable in this Schedule

30

31

32 33

34

35

ATTENDANCES an attendance which is capable of being made by a clerk, such as at the court registry …. an attendance which requires the attendance of the solicitor or managing clerk and involves the exercise of skill or legal knowledge (including an attendance to inspect or negotiate) — per quarter hour: solicitor …. managing clerk …. an attendance for which no other provision is made in this scale …. an attendance by telephone which does not involve the exercise of skill or legal knowledge …. an attendance on counsel: with brief or papers (where not otherwise provided for) to appoint a conference or consultation …. if appointment made by telephone …. a necessary conference or

16.00

18.00

19.00

31.00 9.00

35.00 10.00

36.00 10.00

27.00

31.00

32.00

7.00

8.00

8.00

16.00

18.00

19.00

16.00

18.00

19.00

7.00

8.00

8.00

consultation with counsel: if half an hour or less …. if over half an hour — for each hour or part of an hour …. 36 in court or chambers or before the Registrar for hearing without counsel: for each hour or part of an hour of the hearing …. for each hour or part of an hour when likely to be heard but not heard …. not to exceed per day …. 37 in court or chambers or before the Registrar for hearing with counsel: for each hour or part of an hour of the attendance during the hearing ….

46.00

52.00

54.00

70.00

79.00

81.00

138.00

157.00

162.00

138.00 622.00

157.00 706.00

162.00 727.00

113.00

128.00

132.00 [page 1174]

for each hour or part of an hour of the attendance when likely to be heard but not heard …. not to exceed per day …. if a person other than a solicitor attends in place of a solicitor — for each hour: (a) managing clerk …. not to exceed per day …. (b) any other clerk ….

113.00 511.00

128.00 580.00

132.00 597.00

46.00 208.00 25.00

52.00 236.00 28.00

54.00 243.00 29.00

not to exceed per day …. 38 to hear judgment …. 39 on taxation of costs: if a solicitor attends — per hour or part of an hour …. if a clerk attends — per hour or part of an hour …. 40 if the solicitor attends at court or chambers for the hearing of an application or appeal, or on conference with counsel, at a distance of more than 50 kilometres from his or her place of business when it is neither appropriate nor proper for an agent to attend, the taxing officer may allow for each day of absence from place of business, not being a Saturday, Sunday or public holiday, an amount that the taxing officer thinks reasonable — not exceeding …. [Editor’s note: See item 49 re travelling expenses] GENERAL CARE AND CONDUCT 41 if the case or circumstances warrant it, an allowance may be claimed under this item, in addition to any item which appears in this scale, for general care and conduct (where appropriate) including the following: (a) the complexity of the matter and the difficulty and novelty of the questions raised or any of them; (b) the importance of the matter to

111.00 32.00

126.00 36.00

130.00 37.00

70.00

79.00

81.00

16.00

18.00

19.00

158.00

179.00

184.00

the party and the amount involved; (c) the skill, labour, specialised knowledge and responsibility involved in the matter on the part of the solicitor; (d) the number and importance of the documents prepared or perused without regard to length; (e) the time expended by the solicitor; (f) research and consideration of questions of law and fact. [page 1175] COUNSEL’S FEES 42 it is proper for a solicitor to incur an amount for counsel’s fees that appears to be fair and reasonable according to the circumstances of the case and the seniority of counsel and the fees incurred may be claimed as a disbursement 43 where a solicitor briefs another solicitor as counsel, when it would be appropriate to brief counsel, the taxing officer may allow a sum as a counsel’s fee that the taxing officer thinks just and reasonable having regard to the practice of allowing these fees that are permitted by the Supreme Court Rules of the State or Territory concerned (Order 62, rule

35) WITNESSES’ EXPENSES 44 witnesses called because of their professional, scientific or other special skill or knowledge — per day …. 45 witnesses called, other than those covered in item 44 — per day …. 46 witnesses remunerated in their occupation by wages, salary or fees — the amount lost by attendance at Court 47 if the witness resides more than 50 kilometres from the Court — a sum that the taxing officer thinks reasonable for the actual cost of conveyance, together with a reasonable amount for sustenance or maintenance DISBURSEMENTS 48 all court fees and other fees and payments to the extent to which they have been properly and reasonably incurred and paid must be allowed 49 if a solicitor attends at court or chambers, or on conference with counsel, in the circumstances outlined in Item 40, the taxing officer may allow reasonable travelling expenses to the extent to which they have been reasonably incurred and paid

81.00 to 407.00 46.00 to 76.00

92.00 to 462.00 52.00 to 86.00

95.00 to 475.00 54.00 to 89.00

MISCELLANEOUS 50 matters not included in this scale to the extent they are covered by Order 62, rule 21 bills of costs prepared in accordance with Order 62, rule 40 must identify costs and disbursements claimed with an item number a folio comprises 72 words; there are generally 3 folios to each page

[page 1176]

[121,015]

[121,015] SECOND SCHEDULE — COSTS ALLOWABLE IN RESPECT OF WORK DONE AND SERVICES PERFORMED — 19 April 1993 to 14 July 1998

For scale of costs from 19 April 1993 to 31 July 1995, see Column 1. For scale of costs from 1 August 1995 to 14 July 1998, see Column 2. For scale of costs after 14 July 1998, see [121,020] et seq.

Item

1

2

3

4

INSTRUCTIONS to sue or defend or to appeal or oppose an appeal or for any other originating proceeding …. to make or oppose an interlocutory application or motion to the Court or a Judge or an officer of the Court …. for a case for opinion of counsel or for counsel to advise (including attendance on counsel with brief) …. for interrogatories, answers to

Col 1 19.4.93 to 31.7.95 $

Col 2 1.8.95 to 14.7.98 $

128.00

136.00

56.00

60.00

54.00

58.00

5

6

7

interrogatories or an affidavit (not being a formal affidavit), admissions or a list of documents, and affidavit verifying …. for brief for counsel on application in chambers or brief notes for solicitor (where necessary) …. OR in respect of items 1 to 5 of this scale, any other amounts that may be allowed by the taxing officer, having regard to all the circumstances of the case for brief for counsel or brief notes for solicitor (where necessary) — the fee to be allowed is to be a sum that the taxing officer thinks fit, having regard to all the circumstances of the case for a necessary document not otherwise provided for — the fee to be allowed is to be a sum that the taxing officer thinks fit, having regard to all the circumstances of the case

DOCUMENTS 8 any notice of appearance including copies, filing and service by respondent …. 9 any application or notice of motion including fixing return day, copies to file and serve and attendance to file …. if more than 3 folios — add per folio …. 10 any simple notice or memorandum such as a notice for discovery, including copies, filing (where necessary) and

77.00

81.00

70.00

74.00

71.00

75.00

56.00

60.00

3.00

3.00

service …. 11 notice to produce, notice to admit or any like notice including copies, filing (when necessary) and service …. if more than 3 folios — add per folio

46.00

48.00

56.00 3.00

60.00 3.00 [page 1177]

12 a brief to counsel (including a brief to hear judgment) and attending counsel with the brief …. if more than 3 folios — add per folio …. for copy documents to accompany brief — the other charges in this scale that are appropriate 13 any necessary subpoena including issuing, one copy to serve and arranging for service ….

49.00 5.00

52.00 5.00

39.00

41.00

DRAWING 14 any necessary document …. per folio ….

6.00

6.00

ENGROSSING OR TYPING 15 any necessary document …. per folio ….

2.00

2.00

1.00

1.00

COPIES of any document including carbon, photographic or machine made copy — per page …. 16 except that, if allowance for 10 or more

pages is claimed in respect of any document or documents, the costs to be allowed for the copies are at the discretion of the taxing officer PERUSAL of any document (when necessary) including special letter, telegram or telex if 3 folios or less …. or per folio …. 17 except that, if allowance for 30 or more folios is claimed in respect of any document or documents, the costs to be allowed for perusal are at the discretion of the taxing officer if it is not necessary to peruse but it is necessary to scan a document — per page …. 18 except that, if allowance for 10 or more pages is claimed in respect of any document or documents, the costs to be allowed for scanning are at the discretion of the taxing officer EXAMINATION 19 if it is necessary to neither peruse nor scan a document, for example, an examination of an appeal book: for examination — per half hour solicitor …. clerk ….

11.00 2.00

11.00 2.00

3.00

3.00

46.00 11.00

48.00 11.00 [page 1178]

20 21 22 23

24

25

LETTERS short letter — simple form of letter eg formal acknowledgment …. ordinary letter including letters between principal and agent …. circular letter (after the first) each …. special letter or letter including opinion …. OR the fee to be allowed is an amount that is reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale telegram, facsimile copy, or telex including attendance to dispatch. OR the fee to be allowed is an amount that is reasonable in the circumstances receiving and filing any incoming letter …. (Postage and transmission fees may be claimed as a disbursement properly incurred)

SERVICE 26 personal service (except where service is claimable under other items in this scale) of any document of which personal service is required …. OR the fee is to be an amount that is reasonable having regard to time occupied, distance travelled and other

9.00

9.00

14.00 5.00

14.00 5.00

33.00

35.00

39.00

41.00

5.00

5.00

38.00

40.00

relevant circumstances 27 service of any document at the office of the address for service either by delivery or by post …. 28 preparation of appeal books including collating all necessary material, attendances on the printer, general oversight of their preparation in cases where the taxing officer is satisfied it has been done efficiently — per hour solicitor …. clerk …. 29 where appeal books are prepared in a solicitor’s office, the taxing officer may in his or her discretion allow a sum that he or she thinks just and reasonable having regard to work and labour properly performed and charges for material used. In exercising his or her discretion the taxing officer must have regard to commercial rates for copying and binding and is not obliged to apply the photographic or machine made copy costs otherwise allowable in this Schedule ATTENDANCES 30 an attendance which is capable of being made by a clerk, such as at the court registry ….

11.00

11.00

83.00 20.00

88.00 22.00

20.00

22.00

[page 1182]

[121,020]

SCHEDULE 2 — COSTS ALLOWABLE FOR WORK DONE AND SERVICES PERFORMED — 15 July 1998 to 13 November 2001

(Order 62, rule 12) For scale of costs from 15 July 1998 to 2 December 1999, see Column 3. For scale of costs from 3 December 1999 to 9 November 2000, see Column 4. For scale of costs from 10 November 2000 to 13 November 2001, see Column 5. For scale of costs after 13 November 2001, see [121,025] et seq.

Item

Col 3 15.7.98 to 2.12.99 $

Col 4 3.12.99 to 9.11.00 $

Col 5 10.11.00 to 13.11.01 $

To sue or defend, to appeal or oppose an appeal or for any other originating proceeding ….

152.00

158.00

178.00

To make or oppose an interlocutory application or motion to the Court or a Judge or an officer of the Court ….

67.00

70.00

79.00

For a case for opinion of counsel or for counsel to advise (including attendance on counsel with brief) ….

65.00

68.00

77.00

For an interrogatory, answer to an interrogatory or an affidavit (except a formal affidavit), an admission or a list of documents (and affidavit verifying) ….

90.00

94.00

106.00

Matter for which charge may be made INSTRUCTIONS

1

2

3

4

5

For brief for counsel on application in chambers or brief notes for solicitor (if necessary) ….

83.00

86.00

97.00

or in respect of items 1 to 5 of this scale, having regard to all the circumstances of the case ….

any other amounts that may be allowed by the taxing officer

any other amounts that may be allowed by the taxing officer

any other amounts that may be allowed by the taxing officer

6

For brief for counsel or brief notes for solicitor (if necessary), having regard to all the circumstances of the case ….

a sum that the a sum that taxing officer the taxing thinks fit officer thinks fit

a sum that the taxing officer thinks fit

7

For a necessary document not otherwise provided for, having regard to all the circumstances of the case ….

a sum that the a sum that taxing officer the taxing thinks fit officer thinks fit

a sum that the taxing officer thinks fit

DOCUMENTS 8

Any notice of appearance, including copies, filing and service by respondent ….

84.00

87.00

98.00

[page 1183] 9

10

11

12

Any application or notice of motion, including fixing return day, copies to file and serve, and attendance to file ….

67.00

70.00

79.00

if more than 3 folios — add for each folio ….

3.00

3.00

3.00

Any simple notice or memorandum such as a notice for discovery, including copies, filing (if necessary) and service ….

54.00

56.00

64.00

Notice to produce, notice to admit or any similar notice, including copies, filing (if necessary) and service ….

67.00

70.00

79.00

if more than 3 folios — add for each folio ….

3.00

3.00

3.00

A brief to counsel (including a brief to hear judgment) and attending counsel with the brief ….

58.00

60.00

68.00

if more than 3 folios — add for each folio ….

6.00

6.00

7.00

the other

the other

the other

For copy documents to accompany brief ….

13

charges in this scale that are appropriate

charges in this scale that are appropriate

charges in this scale that are appropriate

46.00

48.00

54.00

7.00

7.00

8.00

2.00

2.00

2.00

1.00

1.00

1.00

the costs to be allowed for the copies are at the discretion of the taxing officer

at the discretion of the taxing officer

at the discretion of the taxing officer

Of any document (if necessary) including special letter, telegram or telex, up to 3 folios ….

12.00

12.00

14.00

or per folio ….

2.00

2.00

2.00

Any necessary subpoena, including issuing one copy to serve and arranging for service …. DRAWING

14

Any necessary document — for each folio …. ENGROSSING OR TYPING

15

Any necessary document — for each folio …. COPIES

16

Of any document, including carbon, photographic or machine-made copy — for each page …. except if allowance for 10 or more pages is claimed in respect of any document or documents ….

PERUSAL 17

[page 1184] except that, if allowance for 30 or more folios is claimed in respect of any document or documents ….

18

If it is not necessary to peruse but it is

the costs to be allowed for perusal are at the discretion of the taxing officer

at the discretion of the taxing officer

at the discretion of the taxing officer

necessary to scan a document — for each page …. except that, if allowance for 10 or more pages is claimed in respect of any document or documents ….

3.00

3.00

3.00

the costs to be allowed for scanning are at the discretion of the taxing officer

at the discretion of the taxing officer

at the discretion of the taxing officer

EXAMINATION 19

If it is necessary to neither peruse nor scan a document, eg an examination of an appeal book: for examination — for each half hour: •

solicitor ….

54.00

56.00

64.00

•

clerk ….

12.00

12.00

14.00

Short letter — simple form of letter, eg formal acknowledgment ….

10.00

10.00

11.00

Ordinary letter, including letter between principal and agent ….

16.00

17.00

20.00

Circular letter (after the first) — for each letter ….

6.00

6.00

7.00

39.00 or an amount that is reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale

41.00 or an amount that is reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale

43.00 or an amount that is reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale

LETTERS 20 21 22 23

Special letter or letter including opinion ….

[page 1185] 24

Telegram, facsimile copy, or telex including 46.00 or attendance to dispatch …. an amount that is

48.00 or an amount that is

54.00 or an amount that is

reasonable in reasonable in reasonable in the the the circumstances circumstances circumstances 25

Receiving and filing any incoming letter ….

6.00

6.00

7.00

45.00 or an amount that is reasonable, having regard to time occupied, distance travelled and other relevant circumstances

47.00 or an amount that is reasonable, having regard to time occupied, distance travelled and other relevant circumstances

53.00 or an amount that is reasonable, having regard to time occupied, distance travelled and other relevant circumstances

12.00

12.00

14.00

Note Postage and transmission fees may be claimed as a disbursement properly incurred SERVICE 26

Personal service (except if service is able to be claimed under another item of this scale) of any document of which personal service is required

27

Service of any document at the office of the address for service, either by delivery or by post PREPARATION OF APPEAL BOOKS

28

29

Preparation of appeal books, including collating all necessary material, attendances on the printer, general oversight of their preparation in cases where the taxing officer is satisfied it has been done efficiently — for each hour: •

solicitor ….

98.00

102.00

115.00

•

clerk ….

25.00

26.00

29.00

If appeal books are prepared in a solicitor’s office, the taxing officer may in his or her discretion allow a sum that he or she thinks is just and reasonable, having regard to work and labour properly performed and charges for material used. In exercising his or her discretion the taxing officer must have regard to commercial rates for copying and binding and is not obliged to apply the photographic or machine-made copy costs otherwise allowable in this Schedule

[page 1186]

ATTENDANCES 30 31

32 33

34

An attendance that is capable of being made by a clerk, such as at the court registry ….

solicitor ….

43.00

45.00

51.00

•

managing clerk ….

11.00

11.00

12.00

An attendance for which no other provision is made in this scale ….

39.00

41.00

47.00

An attendance by telephone that does not involve the exercise of skill or legal knowledge ….

9.00

9.00

10.00

with brief or papers (if not otherwise provided for) ….

25.00

26.00

30.00

to appoint a conference or consultation ….

25.00

26.00

30.00

if appointment made by telephone ….

9.00

9.00

10.00

An attendance on counsel:

•

A necessary conference or consultation with counsel: •

if half an hour or less ….

67.00

70.00

79.00

•

if over half an hour — for each hour or part of an hour ….

98.00

102.00

115.00

for each hour or part of an hour of the hearing ….

197.00

205.00

231.00

for each hour or part of an hour when likely to be heard, but not heard ….

197.00

205.00

231.00

not to exceed per day ….

883.00

918.00

1036.00

for each hour or part of an hour of the attendance during the hearing ….

161.00

167.00

188.00

for each hour or part of an hour of the attendance when likely to be heard, but not heard ….

161.00

167.00

188.00

not to exceed per day ….

725.00

754.00

851.00

In court or chambers or before the Registrar for hearing without counsel: • • •

37

29.00

•

•

36

26.00

An attendance that requires the attendance of a solicitor or managing clerk and involves the exercise of skill or legal knowledge (including an attendance to inspect or negotiate) — for each quarter hour:

•

35

25.00

In court or chambers or before the Registrar for hearing with counsel: • •

•

If a person other than a solicitor attends in place of a solicitor: (a) attendance by a managing clerk: •

for each hour ….

67.00

70.00

79.00

•

not to exceed per day ….

296.00

308.00

347.00

36.00

37.00

42.00

(b) attendance by any other clerk: •

for each hour ….

[page 1187] •

not to exceed per day ….

158.00

164.00

185.00

45.00

47.00

53.00

if a solicitor attends — for each hour or part of an hour ….

98.00

102.00

115.00

if a clerk attends — for each hour or part of an hour ….

25.00

26.00

29.00

If a solicitor attends at court or chambers for the hearing of an application or appeal, or on conference with counsel, at a distance of more than 50 kilometres from his or her place of business, and it is neither appropriate nor proper for an agent to attend, the taxing officer may allow for each day of absence from the place of business (except a Saturday, Sunday or public holiday) an amount that the taxing officer thinks reasonable — not exceeding ….

223.00

232.00

262.00

38

To hear judgment ….

39

On taxation of costs: • •

40

GENERAL CARE AND CONDUCT 41

If the case or circumstances warrant it, an allowance may be claimed under this item, in addition to any other item that appears in this scale, for general care and conduct (if appropriate) including the following: (a) the complexity of the matter and the difficulty and novelty of questions raised; (b) the importance of the matter to the party and the amount involved; (c) the skill, labour, specialised knowledge and responsibility involved in the matter on the part of the solicitor;

the number and importance of the documents prepared or perused, without regard to length; (e) the time taken by the solicitor; (f) research and consideration of questions of law and fact (d)

COUNSEL’S FEES 42

It is proper for a solicitor to incur an amount for counsel’s fees that appears to be fair and reasonable according to the circumstances of the case and the seniority of counsel. The fees incurred may be claimed as a disbursement

[page 1188] 43

If a solicitor briefs another solicitor as counsel, when it would be appropriate to brief counsel ….

CORPORATIONS ACT 2001 — SHORT FORM BILL 43A

The amount as to the costs of obtaining a winding-up order, up to and including entry and service of the order under section 470 of

the taxing officer may allow a sum as a counsel’s fee that the taxing officer thinks just and reasonable having regard to the practice of allowing these fees that is permitted by the Supreme Court Rules of the State of Territory concerned (Order 62, rule 35)

a sum as a counsel’s fee that the taxing officer thinks just and reasonable having regard to the practice of allowing these fees that is permitted by the Supreme Court Rules of the State of Territory concerned (Order 62, rule 35)

a sum as a counsel’s fee that the taxing officer thinks just and reasonable having regard to the practice of allowing these fees that is permitted by the Supreme Court Rules of the State of Territory concerned (Order 62, rule 35)

the Corporations Act 2001 and the obtaining of a certificate of taxation ….

2068.00

2151.00

2426.00

Short form amount that may be claimed by an applicant on the making of a sequestration order ….

1326.00

1379.00

1555.00

Short form amount that may be claimed by an applicant on the dismissal of a petition ….

1142.00

1188.00

1340.00

116.00 to 578.00

121.00 to 601.00

137.00 to 678.00

Additional costs are allowable for any adjournment in which costs have been reserved by the Court in accordance with item 36 or item 37, as the case may be BANKRUPTCY ACT 1966 — SHORT FORM BILLS 43B

43C

WITNESSES’ EXPENSES 44

Witnesses called because of their professional, scientific or other special skill or knowledge — for each day ….

[page 1189] 45

Witnesses called, other than those covered in item 44 — for each day ….

67.00 to 109.00

70.00 to 113.00

79.00 to 127.00

46

Witnesses remunerated in their occupation by wages, salary or fees ….

the amount lost the amount lost the amount lost by attendance by attendance by attendance at Court at Court at Court

47

If a witness lives more than 50 kilometres from the Court ….

a sum that the taxing officer thinks reasonable for the actual cost of travel, together with a reasonable amount for meals and accommodation

a sum that the taxing officer thinks reasonable for the actual cost of travel, together with a reasonable amount for meals and accommodation

a sum that the taxing officer thinks reasonable for the actual cost of travel, together with a reasonable amount for meals and accommodation

to the extent to which they

to the extent to which they

to the extent to which they

DISBURSEMENTS 48

All court fees and other fees and payments ….

49

If a solicitor attends at court or chambers, or on conference with counsel, in the circumstances outlined in item 40 ….

have been properly and reasonably incurred and paid

have been properly and reasonably incurred and paid

have been properly and reasonably incurred and paid

the taxing officer may allow reasonable travelling expenses to the extent to which they have been reasonably incurred and paid

reasonable travelling expenses to the extent to which they have been reasonably incurred and paid

reasonable travelling expenses to the extent to which they have been reasonably incurred and paid

MISCELLANEOUS 50

Matters not included in this scale may be allowed to the extent they are covered by Order 62, rule 21 Note 1 Bills of costs prepared in accordance with Order 62, rule 40 must identify costs and disbursements claimed with an item number.

[page 1190] Note 2 A folio comprises 72 words (there are generally 3 folios to each page).

[page 1191]

[121,025]

SCHEDULE 2 — SCALE OF COSTS FOR WORK DONE AND SERVICES PERFORMED — 14 November 2001 to 31 July 2006 (Order 62, rule 12)

[Sch 2 subst SR 407 of 2004 r 3 and Sch 1, opn 23 Dec 2004; am SLI 183 of 2005 r 3 and Sch 1, opn 9 Aug 2005; SLI 230 of 2006 r 3 and Sch 1[21], opn 1 Aug 2006]

Item

[14.11.01 to 25.11.02 unless otherwise indicated] $

[26.11.02 to 29.08.04 unless otherwise indicated] $

[30.08.04 to 22.12.04 unless otherwise indicated] Charge ($)

[23.12.04 to 31.07.06 unless otherwise indicated] Charge ($)

To sue or defend, to appeal or oppose an appeal or for any other originating proceeding ….

185

191

201

210

To make or oppose an interlocutory application or motion to the Court or a Judge or an officer of the Court ….

82

85

89

94

For a case for opinion of counsel or for counsel to advise (including attendance on counsel with brief) ….

80

83

87

91

For an interrogatory, answer to an interrogatory or an affidavit (except a formal affidavit), an admission or a list of documents (and affidavit verifying) ….

110

114

120

126

Matter for which charge may be made INSTRUCTIONS

1

2

3

4

5

For brief for counsel on

6

7

application in chambers or brief notes for solicitor (if necessary) ….

101

or in respect of items 1 to 5 of this scale, having regard to all the circumstances of the case ….

any other amounts that the taxing officer considers appropriate

For brief for counsel or brief notes for solicitor (if necessary), having regard to all the circumstances of the case ….

a sum that the taxing officer considers appropriate

For a necessary document not otherwise provided for, having regard to all the circumstances of the case ….

a sum that the taxing officer considers appropriate

104

109

115

a sum that the taxing officer thinks fit

a sum that the taxing officer thinks fit

DOCUMENTS 8

9

10

Any notice of appearance, including copies, filing and service by respondent ….

102

105

110

116

Any application or notice of motion, including fixing return day, copies to file and serve, and attendance to file ….

82

85

89

94

if more than 3 folios — add for each folio.

6

6

6

7

Any simple notice or memorandum such as a notice for discovery, including copies, filing (if necessary) and service ….

66

68

71

75

[page 1192] 11

12

Notice to produce, notice to admit or any similar notice, including copies, filing (if necessary) and service ….

82

85

89

94

if more than 3 folios — add for each folio.

6

6

6

7

A brief to counsel (including

13

a brief to hear judgment) and attending counsel with the brief ….

71

73

77

80

if more than 3 folios — add for each folio.

7

7

7

8

For copy documents to accompany brief ….

the other charges in this scale that are appropriate

Any necessary subpoena, including issuing 1 copy to serve and arranging for service ….

56

58

61

64

8

8

8

9

4

4

4

4

2

2

2

2

DRAWING 14

Any necessary document — for each folio. ENGROSSING OR TYPING

15

Any necessary document — for each folio. COPIES

16

Of any document, including carbon, photographic or machine-made copy — for each page …. except if allowance for 10 or more pages is claimed in respect of any document or documents ….

at the discretion of the taxing officer

PERUSAL 17

Of any document (if necessary) including special letter, telegram or telex, up to 3 folios ….

15

15

16

17

or per folio ….

4

4

4

4

except if allowance for 30 or more folios is claimed in respect of any document or documents …. 18

If it is not necessary to peruse but it is necessary to scan a document — for each page …. except if allowance for 10 or

at the discretion of the taxing officer

6

6

6

7

more pages is claimed in respect of any document or documents ….

at the discretion of the taxing officer

EXAMINATION 19

If it is necessary to neither peruse nor scan a document, eg an examination of an appeal book: for examination — for each half hour •

solicitor ….

66

68

71

75

•

clerk ….

15

15

16

17

[page 1193]

LETTERS 20

21

22 23

Short letter — simple form of letter, eg formal acknowledgment ….

11

11

12

12

Ordinary letter, including letter between principal and agent ….

21

22

23

24

Circular letter (after the first) — for each letter ….

7

7

7

8

45 or

46 or

48 or

51 or

Special letter or letter including opinion ….

an amount that is reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale [14.11.01 to 8.8.05] 24

Telegram, facsimile copy, or telex including attendance to dispatch ….

56 or

58 or

61 or

84 or

an amount that is reasonable in the circumstances [9.8.05 to date] 24

Telegram, facsimile copy, or telex including attendance to dispatch ….

64 or an amount that is reasonable in the circumstances

[item 24 subst SLI 183 of 2005 r 3 and Sch 1, opn 9 Aug 2005] 25

Receiving and filing any incoming letter ….

7

7

7

8

55 or

57 or

60 or

63 or

Note Postage and transmission fees may be claimed as a disbursement properly incurred SERVICE 26

Personal service (except if service is able to be claimed under another item of this scale) of any document of which personal service is required ….

an amount that is reasonable, having regard to time occupied, distance travelled and other relevant circumstances 27

Service of any document at the office of the address for service, either by delivery or by post ….

15

15

16

17

PREPARATION OF APPEAL BOOKS 28

Preparation of appeal books, including collating all necessary material, attendances on the printer, general oversight of their preparation in cases where the taxing officer is satisfied it has been done efficiently — for each hour: •

solicitor ….

119

123

129

136

•

clerk ….

30

31

33

34

[page 1194] 29

If appeal books are prepared in a solicitor’s office, a sum that the taxing officer

considers is just and reasonable, having regard to work and labour properly performed and charges for material used. In exercising his or her discretion, the taxing officer must have regard to commercial rates for copying and binding and is not obliged to apply the photographic or machinemade copy costs otherwise allowable in this scale ATTENDANCES 30

31

32

33

34

An attendance that is capable of being made by a clerk, such as at the court registry ….

31

33

34

An attendance that requires the attendance of a solicitor or managing clerk and involves the exercise of skill or legal knowledge (including an attendance to inspect or negotiate) — for each quarter hour: •

solicitor ….

53

55

58

61

•

managing clerk ….

12

12

13

13

An attendance for which no other provision is made in this scale ….

49

51

54

56

An attendance by telephone that does not involve the exercise of skill or legal knowledge ….

10

10

11

11

with brief or papers (if not otherwise provided for) ….

31

32

34

35

to appoint a conference or consultation ….

31

32

34

35

if appointment made by telephone ….

10

10

11

11

An attendance on counsel: •

• • 35

30

A necessary conference or consultation with counsel:

• •

36

82

85

89

94

119

123

129

136

for each hour or part of an hour of the hearing ….

240

248

260

273

for each hour or part of an hour when likely to be heard, but not heard ….

240

248

260

273

not to exceed per day ….

1076

1110

1166

1223

195

201

211

222

if over half an hour — for each hour or part of an hour ….

In court or chambers or before the Registrar for hearing without counsel: •

•

• 37

if half an hour or less ….

In court or chambers or before the Registrar for hearing with counsel: •

for each hour or part of an hour of the attendance during the hearing ….

[page 1195] •

•

for each hour or part of an hour of the attendance when likely to be heard, but not heard ….

195

201

211

222

not to exceed per day ….

884

912

958

1005

If a person other than a solicitor attends in place of a solicitor: (a) attendance by a managing clerk: •

for each hour ….

82

85

89

94

•

not to exceed per day ….

360

372

391

410

(b) attendance by any other clerk: •

for each hour ….

44

45

47

50

•

not to exceed per day ….

192

198

208

218

55

57

60

63

if a solicitor attends — for each hour or part of an hour ….

119

123

129

136

if a clerk attends — for each hour or part of an hour ….

30

31

33

34

272

281

295

310

38

To hear judgment ….

39

On taxation of costs: •

•

40

If a solicitor attends at court or chambers for the hearing of an application or appeal, or on conference with counsel, at a distance of more than 50 kilometres from his or her place of business, and it is neither appropriate nor proper for an agent to attend, the taxing officer may allow for each day of absence from the place of business (except a Saturday, Sunday or public holiday) an amount that the taxing officer considers reasonable — not exceeding …. GENERAL CARE AND CONDUCT

41

If the case or circumstances warrant it, an allowance may be claimed under this item, in addition to any other item that appears in this scale, for general care and conduct (if appropriate) including the a percentage of the total amount of the allowed costs following: excluding disbursements (a) the complexity of the matter and the difficulty and novelty of questions raised; (b) the importance of the

matter to the party and the amount involved; (c) the skill, labour, specialised knowledge and responsibility involved in the matter on the part of the solicitor; (d) the number and importance of the documents prepared or perused, without regard to length; (e) the time taken by the solicitor; (f) research and consideration of questions of law and fact

[page 1196]

COUNSEL’S FEES 42

It is proper for a solicitor to incur an amount for counsel’s fees that appears to be fair and reasonable according to the circumstances of the case and the seniority of counsel. The fees incurred may be claimed as a disbursement

43

If a solicitor briefs another solicitor as counsel, when it would be appropriate to brief counsel …. CORPORATIONS ACT 2001 — SHORT FORM BILL

43A

The amount as to the costs of obtaining a winding-up order, up to and including entry and service of the order under section 470 of the

a sum as a counsel’s fee that the taxing officer considers just and reasonable having regard to the practice of allowing these fees that is permitted by the Supreme Court Rules of the State or Territory concerned (Order 62, rule 35)

Corporations Act 2001 and the obtaining of a certificate of taxation ….

2521

2602

2732

2867

Short form amount that may be claimed by an applicant on the making of a sequestration order ….

1616

1668

1751

1838

Short form amount that may be claimed by an applicant on the dismissal of a petition ….

1392

1437

1509

1584

Short form amount, including costs and disbursements, that may be claimed by a party in a standard migration case ….

4250

4463

4684

Short form amount, including costs and disbursements, that may be claimed by the respondent in a migration case on dismissal or discontinuance of the case ….

1500

1575

1653

Additional costs are allowable for any adjournment in which costs have been reserved by the Court in accordance with item 36 or item 37, as the case may be BANKRUPTCY ACT 1966 — SHORT FORM BILLS 43B

43C

MIGRATION ACT 1958 — SHORT FORM BILLS 43D

43E

WITNESSES’ EXPENSES 44

Witnesses called because of their professional, scientific or other special skill or knowledge — for each day ….

142 to 704

147 to 727

154 to 763

162 to 801

45

Witnesses called, other than those covered in item 44 — for each day ….

82 to 132

85 to 136

89 to 143

94 to 150

46

Witnesses remunerated in

their occupation by wages, salary or fees ….

the amount lost by attendance at Court

[page 1197] 47

If a witness lives more than a sum that the taxing officer considers reasonable for the 50 kilometres from the Court actual cost of travel, together with a reasonable amount for …. meals and accommodation DISBURSEMENTS

48

All court fees and other fees and payments.

49

If a solicitor attends at court or chambers, or on conference with counsel, in the circumstances outlined in reasonable travelling expenses to the extent to which they item 40 …. have been reasonably incurred and paid MISCELLANEOUS

50

Matters not included in this scale may be allowed to the extent they are covered by Order 62, rule 21 Note 1 Bills of costs prepared in accordance with Order 62, rule 40 must identify costs and disbursements claimed with an item number. Note 2 A folio comprises 72 words (there are generally 3 folios to each page).

to the extent to which they have been properly and reasonably incurred and paid

[page 1198]

[121,030]

SCHEDULE 2 — (OF THE FEDERAL COURT RULES) SCALE OF COSTS FOR WORK DONE AND SERVICES PERFORMED — 1 January 2011 to 1 August 2011 (Order 62, rule 12)

[Sch 2 subst SLI 230 of 2006 r 3 and Sch 1[21], opn 1 Aug 2006; am SLI 229 of 2007 r 3 and Sch 1[28], [29], opn 25 July 2007; SLI 244 of 2008 r 3 and Sch 2[1], opn 1 Jan 2009; SLI 340 of 2009 r 3 and Sch 2[1], opn 4 Jan 2010; SLI 338 of 2010 r 3 and Sch 1[18], opn 1 Jan 2011]

Item

1

2

1.08.06 to 31.12.08 Matter for which Charge charge may be made ($) INSTRUCTIONS To sue or defend, to appeal or oppose an appeal or for any other originating proceeding …. To make or oppose an interlocutory application or motion to the Court or a Judge or an officer of the Court ….

1.01.09 to 3.01.10 Charge ($)

4.01.10 to 31.12.10 Charge ($)

1.01.11 to 1.08.11 Charge ($)

223

246

254

262

100

110

114

118

3

4

5

6

7

For a case for opinion of counsel or for counsel to advise (including attendance on counsel with brief) …. For an interrogatory, answer to an interrogatory or an affidavit (except a formal affidavit), an admission or a list of documents (and affidavit verifying) …. For brief for counsel on application in chambers or brief notes for solicitor (if necessary) …. or in respect of items 1 to 5 of this scale, having regard to all the circumstances of the case …. For brief for counsel or brief notes for solicitor (if necessary), having regard to all the circumstances of the case …. For a necessary document not otherwise provided

96

107

110

113

1134

148

153

158

122

135

139

143

any other amounts that the taxing officer considers appropriate

a sum that the taxing officer thinks fit

for, having regard to all the circumstances of the case ….

8

9

10

11

DOCUMENTS Any notice of appearance, including copies, filing and service by respondent …. Any application or notice of motion, including fixing return day, copies to file and serve, and attendance to file …. if more than 3 folios — add for each folio. Any simple notice or memorandum such as a notice for discovery, including copies, filing (if necessary) and service …. Notice to produce, notice to admit or any similar notice, including copies, filing (if necessary) and service ….

a sum that the taxing officer thinks fit

123

136

140

144

100

110

114

118

7

8

8

8

80

88

91

94

100

110

114

118 [page 1199]

12

13

14

15

16

if more than 3 folios — add for each folio. A brief to counsel (including a brief to hear judgment) and attending counsel with the brief …. if more than 3 folios — add for each folio. For copy documents to accompany brief …. Any necessary subpoena, including issuing 1 copy to serve and arranging for service ….

7

8

8

8

85

94

97

100

8

9

9

9

the other charges in this scale that are appropriate

68

75

77

79

DRAWING Any necessary document — for each folio.

10

11

11

12

ENGROSSING OR TYPING Any necessary document — for each folio.

4

5

5

5

COPIES Of any document, including carbon, photographic or machine-made copy — for each page ….

2

2

2

2

except if allowance for 10 or more pages is claimed in respect of any document or documents ….

17

18

19

PERUSAL Of any document (if necessary) including special letter, telegram or telex, up to 3 folios …. or per folio …. except if allowance for 30 or more folios is claimed in respect of any document or documents …. If it is not necessary to peruse but it is necessary to scan a document — for each page …. except if allowance for 10 or more pages is claimed in respect of any document or documents …. EXAMINATION If it is necessary to neither peruse nor scan a document, eg an examination of an appeal book:

at the discretion of the taxing officer

18 4

20 5

21 5

21 5

at the discretion of the taxing officer

7

8

8

8

at the discretion of the taxing officer

for examination — for each half hour • •

20

21

solicitor …. clerk ….

80 18

88 20

91 21

94 21

LETTERS Short letter — simple form of letter, eg formal acknowledgment …. Ordinary letter, including letter between principal and agent ….

13

14

14

15

25

29

30

30 [page 1200]

22

23

24

25

Circular letter (after the first) — for each letter …. Special letter or letter including opinion ….

Telegram, facsimile copy, or telex including attendance to dispatch ….

Receiving and filing

8

9

9

9

54 or 60 or 62 or 64 or an amount that is reasonable having regard to the length of the letter, the questions involved and appropriate items and charges in this scale

68 or 75 or 77 or 79 or an amount that is reasonable in the circumstances

any incoming letter …. Note Postage and transmission expenses may be claimed as a disbursement properly incurred.

26

27

28

SERVICE Personal service (except if service is able to be claimed under another item of this scale) of any document of which personal service is required ….

Service of any document at the office of the address for service, either by delivery or by post …. PREPARATION OF APPEAL BOOKS Preparation of appeal books, including collating all necessary material, attendances on the printer, general oversight of their

8

9

9

9

67 or 74 or 76 or 78 or an amount that is reasonable, having regard to time occupied, distance travelled and other relevant circumstances

18

20

21

21

preparation in cases where the taxing officer is satisfied it has been done efficiently — for each hour:

29

30

• solicitor …. • clerk …. If appeal books are prepared in a solicitor’s office, a sum that the taxing officer considers is just and reasonable, having regard to work and labour properly performed and charges for material used. In exercising his or her discretion, the taxing officer must have regard to commercial rates for copying and binding and is not obliged to apply the photographic or machine-made copy costs otherwise allowable in this scale ATTENDANCES An attendance that is capable of being made by a clerk, such as at the court registry

144 36

160 40

166 41

171 42

….

36

40

41

42 [page 1201]

31

32

33

34

An attendance that requires the attendance of a solicitor or managing clerk and involves the exercise of skill or legal knowledge (including an attendance to inspect or negotiate) — for each quarter hour: • solicitor …. • managing clerk …. An attendance for which no other provision is made in this scale …. An attendance by telephone that does not involve the exercise of skill or legal knowledge …. An attendance on counsel: • with brief or papers (if not otherwise provided for) ….

65

72

74

76

14

15

15

16

59

66

68

70

12

13

13

14

37

41

42

43

to appoint a conference or consultation …. • if appointment made by telephone …. A necessary conference or consultation with counsel: • if half an hour or less …. • if over half an hour — for each hour or part of an hour …. In court or chambers or before the Registrar for hearing without counsel: • for each hour or part of an hour of the hearing …. • for each hour or part of an hour when likely to be heard, but not heard …. • not to exceed per day …. In court or chambers or before the Registrar for hearing with counsel: •

35

36

37

37

41

42

43

12

13

13

14

100

110

114

118

144

160

165

170

289

320

330

340

289

320

330

340

1296

1435

1481

1530

•

38 39

for each hour or part of an hour of the attendance during the hearing …. • for each hour or part of an hour of the attendance when likely to be heard, but not heard …. • not to exceed per day …. If a person other than a solicitor attends in place of a solicitor: (a) attendance by a managing clerk: • for each hour …. • not to exceed per day …. (b) attendance by any other clerk: • for each hour …. • not to exceed per day …. To hear judgment …. On taxation of costs: • if a solicitor

235

260

268

276

235

260

268

276

1065

1179

1217

1242

100

110

114

118

435

481

496

511

53

59

61

63

231 67

256 74

264 76

272 78

attends — for each hour or part of an hour ….

144

160

165

170

[page 1202] •

40

if a clerk attends — for each hour or part of an hour … If a solicitor attends at court or chambers for the hearing of an application or appeal, or on conference with counsel, at a distance of more than 50 kilometres from his or her place of business, and it is neither appropriate nor proper for an agent to attend, the taxing officer may allow for each day of absence from the place of business (except a Saturday, Sunday or public holiday) an amount that the taxing officer considers reasonable — not exceeding … GENERAL CARE

36

40

41

43

329

364

376

388

41

AND CONDUCT If the case or circumstances warrant it, an allowance may be claimed under this item, in addition to any other item that appears in this scale, for general care and conduct (if appropriate) including the a percentage of the total amount of the following: allowed costs excluding disbursements (a) the complexity of the matter and the difficulty and novelty of questions raised; (b) the importance of the matter to the party and the amount involved; (c) the skill, labour, specialised knowledge and responsibility involved in the matter on the part of the solicitor; (d) the number and importance of the documents prepared or

perused, without regard to length; (e) the time taken by the solicitor; (f) research and consideration of questions of law and fact

42

43

43A

COUNSEL’S FEES It is proper for a solicitor to incur an amount for counsel’s fees that appears to be fair and reasonable according to the circumstances of the case and the seniority of counsel. The fees incurred may be claimed as a disbursement If a solicitor briefs another solicitor as counsel, when it would be appropriate to brief counsel …

CORPORATIONS ACT 2001 — SHORT FORM BILL The amount as to the costs of obtaining a winding-up order, up

a sum as a counsel’s fee that the taxing officer considers just and reasonable having regard to the practice of allowing these fees that is permitted by the Supreme Court Rules of the State or Territory concerned (Order 62, rule 35)

to and including entry and service of the order under section 470 of the Corporations Act 2001 and the obtaining of a certificate of taxation …

3039

3363

3471

3579

[page 1203] Additional costs are allowable for any adjournment in which costs have been reserved by the Court in accordance with item 36 or 37, as the case may be

43B

43C

BANKRUPTCY ACT 1966 — SHORT FORM BILLS Short form amount that may be claimed by an applicant on the making of a sequestration order …. Short form amount that may be claimed by an applicant on the dismissal of a petition

1948

2156

2225

2294

….

43D

43E

43F

43G

43H

44

MIGRATION ACT 1958 — SHORT FORM BILLS Short form amount, including costs and disbursements, that may be claimed by a party in a standard migration case …. Short form amount, including costs and disbursements, that may be claimed by the respondent in a migration case on dismissal or discontinuance of the case …. Application for leave to appeal or extension of time Migration appeal case finalised before a final hearing Migration appeal case finalised after a final hearing WITNESSES’ EXPENSES Witnesses called because of their professional, scientific or other

1679

1858

1917

1976

4965

5494

5670

5846

1752

1939

2001

2063

1500

1564

1614

1664

3500

3650

3767

3885

5500

5736

5920

6104

special skill or knowledge — for each day …. 45

46

47

48

49

50

Witnesses called, other than those covered in item 44 — for each day …. Witnesses remunerated in their occupation by wages, salary or fees …. If a witness lives more than 50 kilometres from the Court …. DISBURSEMENTS All court fees and other fees and payments. If a solicitor attends at court or chambers, or on conference with counsel, in the circumstances outlined in item 40 …. MISCELLANEOUS Matters not included in this scale may be allowed to the extent they are covered by Order 62, rule 21

172 to 849

190 to 940

196 to 970

202 to 1000

100 to 159

110 to 176

114 to 182

118 to 188

the amount lost by attendance at Court a sum that the taxing officer considers reasonable for the actual cost of travel, together with a reasonable amount for meals and accommodation

to the extent to which they have been properly and reasonably incurred and paid

reasonable travelling expenses to the extent to which they have been reasonably incurred and paid

[page 1204] Note 1 Bills of costs prepared in accordance with Order 62, rule 40 must identify costs and disbursements claimed with an item number. Note 2 A folio comprises 72 words (there are generally 3 folios to each page).

[page 1205]

Cost Schedule of the Federal Court Rules 2011 [121,035] Federal Court Rules 2011 Part 40 of the Federal Court Rules 2011 concern Costs. Since 1 August 2011 the costs allowable for work done and services performed have appeared in Schedule 3.

[121,035.10]

SCHEDULE 3 — COSTS ALLOWABLE FOR WORK DONE AND SERVICES PERFORMED — 1 August 2011 to 31 December 2013 (rules 40.29, 40.41, 40.42, 40.43 and 40.44)

[Sch 3 am SLI 65 of 2013 r 4 and Sch 1 item 45, opn 9 May 2013] Attendances 1 1.1 Attendances by a lawyer requiring the skill of a lawyer (including attendances in conference, by telephone, on counsel, appearing in court, instructing in court and travelling), for each unit of 6 minutes a sum in all circumstances not exceeding $56: (a) having regard to the lawyer’s skill and experience; and (b) having regard to the complexity of the matter or the difficulty or novelty of the questions involved. [subcl 1.1 am SLI 65 of 2013 r 4 and Sch 1 item 46, opn 9 May 2013] 1.2 Where any attendance referred to in item 1.1 is capable of performance by a law graduate or articled clerk for each unit of 6 minutes: $21. [subcl 1.2 am SLI 65 of 2013 r 4 and Sch 1 item 47, opn 9 May 2013] 1.3 Attendances capable of performance by a clerk or paralegal — for each unit of 6 minutes: $10. Preparing documents 2 2.1 All documents, whether in printed form or otherwise (but excluding correspondence) — for each 100 words: $51.

[subcl 2.1 am SLI 65 of 2013 r 4 and Sch 1 item 48, opn 9 May 2013] 2.2 Correspondence (including letters, emails, text messages and instant messaging) — up to 50 words: $21. [subcl 2.2 am SLI 65 of 2013 r 4 and Sch 1 item 49, opn 9 May 2013] 2.3 Correspondence (including letters, emails, text messages and instant messaging)—up to 100 words: $41. [subcl 2.3 am SLI 65 of 2013 r 4 and Sch 1 item 50, opn 9 May 2013] 2.4 Correspondence (including letters, emails, text messages and instant messaging) — over 100 words: in accordance with item 2.1. 2.5 Bill of costs — at the discretion of the taxing officer. [subcl 2.5 insrt SLI 65 of 2013 r 4 and Sch 1 item 51, opn 9 May 2013] Reading 3 3.1 All documents, whether in printed form or otherwise (but excluding correspondence falling within item 3.2 or 3.3): in accordance with item 1, or at the discretion of the taxing officer, having regard to the number of pages read. 3.2 Correspondence (including letters, emails, text messages and instant messaging)—up to 50 words: $15.

[page 1206] 3.3 Correspondence (including letters, emails, text messages and instant messaging) — up to 100 words: $31. [subcl 3.3 am SLI 65 of 2013 r 4 and Sch 1 item 52, opn 9 May 2013] Delegation and supervision 4 4.1 Where it is appropriate for more than one lawyer to be involved in the conduct of the matter, allowance may be made for attendances to delegate or supervise: in accordance with item 1. Research 5 5.1 Where it is appropriate to research a legal question of some complexity that is not procedural in nature: in accordance with item 1. Electronic document management 6 6.1 Database creation, database administration (including establishing design and agreement of protocols), database design and implementation: in accordance with item 1.2. 6.2 Document preparation and document description (including necessary redaction and duplication), in compliance with the Federal Court Practice Note dealing with the use of technology in the management of discovery and conduct of litigation: in accordance with item 1, having regard to the complexity of the issues involved. 6.3 Imaging of documents to searchable format including rendering to PDF and scanning where necessary: in accordance with item 1.3. 6.4 Publishing including: (a) electronic exchange and discovery; and (b) write-to CD/CD ROM/USB or other agreed media: in accordance with item 1.3.

Masking 7 7.1 Masking documents: (a) if the taxing officer is satisfied that the masking required the skill of a lawyer — in accordance with item 1.1; (b) otherwise — in accordance with item 1.3. Collation, pagination and indexing 8 8.1 Collation (including collation for the purposes of copying), pagination and indexing of documents for the purposes of discovery, inspection, briefs to counsel, instruction to expert witnesses, court books, appeal books, exhibits or annexures to court documents or similar (but excluding maintaining files) — in accordance with item 1.3, or at the discretion of the taxing officer, having regard to the number of pages and the number of documents collated, paginated or indexed Copying 9 9.1 Copying documents: at the discretion of the taxing officer. Personal service 10 10.1 Personal service, inclusive of all attempts (where required): $103. [subcl 10.1 am SLI 65 of 2013 r 4 and Sch 1 item 53, opn 9 May 2013] Skill care and responsibility 11 11.1 An additional amount may be allowed, having regard to all the circumstances of the case, including the following: (a) the complexity of the matter; (b) the difficulty or novelty of the questions involved in the matter; (c) the skill, specialised knowledge and responsibility involved and the time and labour expended by the lawyer; (d) the number and importance of the documents prepared and read, regardless of their length; (e) the amount or value of money or property involved; (f) research and consideration of questions of law and fact;

[page 1207] (g) the general care and conduct of the lawyer, having regard to the lawyer’s instructions and all relevant circumstances; (h) the time within which the work was required to be done; (i) allowances otherwise made in accordance with this scale (including any allowances for attendances in accordance with item 1.1); and (j) any other relevant matter. Where client not charged on a time costing basis 12 12.1 In matters where the lawyer has not charged the client on a time costing basis, items 1 to 11 above do not apply and a fair and reasonable amount will be allowed, having regard to: (a) the complexity of the matter;

(b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)

the difficulty or novelty of the questions involved; the skill, specialised knowledge and responsibility involved; the work actually done by the lawyer; the extent to which the work was reasonably necessary; the period during which the work was done; the time spent on performing the work; the quality of the work; the number and importance of the documents prepared and read, regardless of length; the amount or value of money or property involved; the terms of the costs agreement between the lawyer and client; and any other relevant matter.

Corporations Act 2001 — short form bills 13 13.1 Short form amount that may be claimed by a plaintiff on the making of a winding-up order or on the dismissal of such an application, up to and including entry and service of the order under section 470 of the Corporations Act 2001 and the obtaining of a certificate of taxation: $3,677. Additional costs are allowable for any adjournment in which costs have been reserved by the Court in accordance with this scale. [subcl 13.1 am SLI 65 of 2013 r 4 and Sch 1 item 54, opn 9 May 2013] Bankruptcy Act 1966 — short form bills 14 14.1 Short form amount that may be claimed by an applicant on the making of a sequestration order: $2,362. Additional costs are allowable for any adjournment for which costs have been reserved by the Court in accordance with this scale. [subcl 14.1 am SLI 65 of 2013 r 4 and Sch 1 item 55, opn 9 May 2013] 14.2 Short form amount that may be claimed by an applicant on the dismissal of a petition: $2,033. Additional costs are allowable for any adjournment for which costs have been reserved by the Court, in accordance with this scale. [subcl 14.2 am SLI 65 of 2013 r 4 and Sch 1 item 56, opn 9 May 2013] Migration Act 1958 — short form bills 15 15.1 Short form amount, including costs and disbursements, that may be claimed by: (a) a respondent in a migration case on dismissal or discontinuance of the case: $2,121; or (b) a party in an application for leave to file a migration appeal or extension of time within which to file a migration appeal: $1,710; or (c) a party in a migration appeal case finalised before a final hearing: $3,990; or (d) a party in a migration appeal case finalised after a final hearing: $6,270. (e) [repealed] [subcl 15.1 am SLI 65 of 2013 r 4 and Sch 1 item 57, opn 9 May 2013] [page 1208] Counsel’s fees

16 16.1 An amount may be allowed for counsel’s fees according to the circumstances of the case. That amount may be assessed by reference to the National Guide to Counsel Fees. The fees are to be claimed as a disbursement. 16.2 If a lawyer briefs another lawyer as counsel, the fees of the lawyer acting as counsel are to be assessed in accordance with item 16.1. Witnesses’ expenses 17 17.1 Any witness (other than a party or an expert retained in accordance with Practice Note CM 7) may be allowed an amount equal to: (a) if the witness is paid by way of wages, any wages actually lost by reason of the witness’ attendance at court to give evidence; and (b) if the witness is paid by way of fees, any fees actually lost by reason of the witness’ attendance at court to give evidence, less a deduction in relation to discretionary overheads, but not to exceed: $513 per day [subcl 17.1 am SLI 65 of 2013 r 4 and Sch 1 item 58, opn 9 May 2013] 17.2 An expert may be allowed an amount equal to the expert’s actual fees for preparing to give evidence and of attending to give evidence. Disbursements 18 18.1 All court fees and other fees and payments may be allowed in the amounts actually incurred. Fees not here provided for 19 19.1 An amount may be allowed for work not otherwise contemplated by this Schedule. Notes 20 20.1 Lawyer is defined in section 4 of the Federal Court of Australia Act 1976. 20.2 The rates specified at item 1.1 should not exceed the rates actually charged by the lawyer to the client. Accordingly, bills of costs should set out the hourly rate (or rates) actually charged by the lawyer. 20.3 The charge for preparing documents (item 2) is inclusive of typing, printing, posting, faxing and emailing, and any other administrative task relating to the preparation or transmission of a document, by whatever means. There is to be no charge for such administrative tasks. 20.4 There is no scale item for printing documents. Accordingly, litigants should not expect to recover the cost of this task. 20.5 The word count for correspondence in items 2.2, 2.3, 3.2 and 3.3 excludes any signature block, disclaimer or similar wording.

[121,035.15] Costs prior to the Federal Court Rules 1979 Part 2 O 4A r 8 of SR 20 and 220 of 1977 (repealed) stated that “on the directions hearing the Court or a Judge shall give such directions with respect to the conduct of the proceedings as the Court or Judge thinks proper”. Without prejudice to the generality of that rule the court or judge may make orders with respect to costs. The court or judge also has power to revoke or

vary any such order. The Federal Court of Australia Act s 43 provides: “(1) … the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs shall not be awarded. (1A) … (2) Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.”

[page 1209] The provisions of the repealed 1977 Federal Court Rules (SR 20 and 220 of 1977) continue to apply to proceedings commenced prior to 1 August 1979 “subject to any order or direction of the Court or a Judge”: see Federal Court Rules 1979 O 64 r 1 at [50,785]. See also Federal Court Rules 1979 O 64 r 2 which deals with moneys paid into court for or on behalf of litigants prior to the commencement of the Federal Court Rules 1979.

[121,040]

SCHEDULE 3 — COSTS ALLOWABLE FOR WORK DONE AND SERVICES PERFORMED — 1 January 2014 to date (rules 40.29, 40.41, 40.42, 40.43 and 40.44)

[Sch 3 am SLI 65 of 2013 r 4 and Sch 1 item 45, opn 9 May 2013]

Application of this Schedule 1A 1A.1 This Schedule, as amended by the Federal Court Amendment (Costs and Other Measures) Rules 2013, applies to work done or services performed on or after 1 January 2014. [cl 1A insrt SLI 283 of 2013 r 4 and Sch 1 item 6, opn 1 Jan 2014]

Attendances 1 1.1 Attendances by a lawyer requiring the skill of a lawyer (including attendances in conference, by telephone, on counsel, appearing in court,

instructing in court and travelling), for each unit of 6 minutes a sum in all circumstances not exceeding $58: (a) having regard to the lawyer’s skill and experience; and (b) having regard to the complexity of the matter or the difficulty or novelty of the questions involved. [subcl 1.1 am SLI 65 of 2013 r 4 and Sch 1 item 46, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

1.2 Where any attendance referred to in item 1.1 is capable of performance by a law graduate or articled clerk for each unit of 6 minutes: $22. [subcl 1.2 am SLI 65 of 2013 r 4 and Sch 1 item 47, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

1.3 Attendances capable of performance by a clerk or paralegal — for each unit of 6 minutes: $11. [subcl 1.3 am SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

Preparing documents 2 2.1 All documents, whether in printed form or otherwise (but excluding correspondence) — for each 100 words: $52. [subcl 2.1 am SLI 65 of 2013 r 4 and Sch 1 item 48, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

2.2 Correspondence (including letters, emails, text messages and instant messaging)—up to 50 words: $22. [subcl 2.2 am SLI 65 of 2013 r 4 and Sch 1 item 49, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

2.3 Correspondence (including letters, emails, text messages and instant messaging)—up to 100 words: $42. [subcl 2.3 am SLI 65 of 2013 r 4 and Sch 1 item 50, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

[page 1210] 2.4 Correspondence (including letters, emails, text messages and instant messaging)—over 100 words: in accordance with item 2.1. 2.5 Bill of costs — at the discretion of the taxing officer. [subcl 2.5 insrt SLI 65 of 2013 r 4 and Sch 1 item 51, opn 9 May 2013]

Reading 3 3.1 All documents, whether in printed form or otherwise (but excluding correspondence falling within item 3.2 or 3.3): in accordance with item 1, or at the discretion of the taxing officer, having regard to the number of pages read. 3.2 Correspondence (including letters, emails, text messages and instant messaging)—up to 50 words: $16. [subcl 3.2 am SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

3.3 Correspondence (including letters, emails, text messages and instant messaging)—up to 100 words: $32. [subcl 3.3 am SLI 65 of 2013 r 4 and Sch 1 item 52, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

Delegation and supervision 4 4.1 Where it is appropriate for more than one lawyer to be involved in the conduct of the matter, allowance may be made for attendances to delegate or supervise: in accordance with item 1. Research 5 5.1 Where it is appropriate to research a legal question of some complexity that is not procedural in nature: in accordance with item 1. Electronic document management 6 6.1 Database creation, database administration (including establishing design and agreement of protocols), database design and implementation: in accordance with item 1.2. 6.2 Document preparation and document description (including necessary redaction and duplication), in compliance with the Federal Court Practice Note dealing with the use of technology in the management of discovery and conduct of litigation: in accordance with item 1, having regard to the complexity of the issues involved. 6.3 Imaging of documents to searchable format including rendering to PDF and scanning where necessary: in accordance with item 1.3. 6.4 Publishing including: (a) electronic exchange and discovery; and (b) write-to CD/CD ROM/USB or other agreed media: in accordance

with item 1.3. Masking 7 7.1 Masking documents: (a) if the taxing officer is satisfied that the masking required the skill of a lawyer — in accordance with item 1.1; (b) otherwise — in accordance with item 1.3. Collation, pagination and indexing 8 8.1 Collation (including collation for the purposes of copying), pagination and indexing of documents for the purposes of discovery, inspection, briefs to counsel, [page 1211] instruction to expert witnesses, court books, appeal books, exhibits or annexures to court documents or similar (but excluding maintaining files) — in accordance with item 1.3, or at the discretion of the taxing officer, having regard to the number of pages and the number of documents collated, paginated or indexed Copying 9 9.1 Copying documents: at the discretion of the taxing officer. Personal service 10 10.1 Personal service, inclusive of all attempts (where required): $106. [subcl 10.1 am SLI 65 of 2013 r 4 and Sch 1 item 53, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

Skill care and responsibility 11 11.1 An additional amount may be allowed, having regard to all the circumstances of the case, including the following: (a) the complexity of the matter; (b) the difficulty or novelty of the questions involved in the matter; (c) the skill, specialised knowledge and responsibility involved and the

(d) (e) (f) (g) (h) (i) (j)

time and labour expended by the lawyer; the number and importance of the documents prepared and read, regardless of their length; the amount or value of money or property involved; research and consideration of questions of law and fact; the general care and conduct of the lawyer, having regard to the lawyer’s instructions and all relevant circumstances; the time within which the work was required to be done; allowances otherwise made in accordance with this scale (including any allowances for attendances in accordance with item 1.1); and any other relevant matter.

Where client not charged on a time costing basis 12 12.1 In matters where the lawyer has not charged the client on a time costing basis, items 1 to 11 above do not apply and a fair and reasonable amount will be allowed, having regard to: (a) the complexity of the matter; (b) the difficulty or novelty of the questions involved; (c) the skill, specialised knowledge and responsibility involved; (d) the work actually done by the lawyer; (e) the extent to which the work was reasonably necessary; (f) the period during which the work was done; (g) the time spent on performing the work; (h) the quality of the work; (i) the number and importance of the documents prepared and read, regardless of length; (j) the amount or value of money or property involved; (k) the terms of the costs agreement between the lawyer and client; and (l) any other relevant matter. [page 1212]

Corporations Act 2001 — short form bills 13 13.1 Short form amount that may be claimed by a plaintiff on the making of a winding-up order or on the dismissal of such an application, up to and including entry and service of the order under section 470 of the Corporations Act 2001 and the obtaining of a certificate of taxation: $3,776. Additional costs are allowable for any adjournment in which costs have been reserved by the Court in accordance with this scale. [subcl 13.1 am SLI 65 of 2013 r 4 and Sch 1 item 54, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

Bankruptcy Act 1966 — short form bills 14 14.1 Short form amount that may be claimed by an applicant on the making of a sequestration order: $2,426. Additional costs are allowable for any adjournment for which costs have been reserved by the Court in accordance with this scale. [subcl 14.1 am SLI 65 of 2013 r 4 and Sch 1 item 55, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

14.2 Short form amount that may be claimed by an applicant on the dismissal of a petition: $2,088. Additional costs are allowable for any adjournment for which costs have been reserved by the Court, in accordance with this scale. [subcl 14.2 am SLI 65 of 2013 r 4 and Sch 1 item 56, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

Migration Act 1958 — short form bills 15 15.1 Short form amount, including costs and disbursements, that may be claimed by: (a) a respondent in a migration case on dismissal or discontinuance of the case: $2,178; or (b) a party in an application for leave to file a migration appeal or extension of time within which to file a migration appeal: $1,756; or (c) a party in a migration appeal case finalised before a final hearing: $4,098; or (d) a party in a migration appeal case finalised after a final hearing: $6,439.

(e) [repealed] [subcl 15.1 am SLI 65 of 2013 r 4 and Sch 1 item 57, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

Counsel’s fees 16 16.1 An amount may be allowed for counsel’s fees according to the circumstances of the case. That amount may be assessed by reference to the National Guide to Counsel Fees. The fees are to be claimed as a disbursement. 16.2 If a lawyer briefs another lawyer as counsel, the fees of the lawyer acting as counsel are to be assessed in accordance with item 16.1. Witnesses’ expenses 17 17.1 Any witness (other than a party or an expert retained in accordance with Practice Note CM 7) may be allowed an amount equal to: (a) if the witness is paid by way of wages, any wages actually lost by reason of the witness’ attendance at court to give evidence; and [page 1213] (b) if the witness is paid by way of fees, any fees actually lost by reason of the witness’ attendance at court to give evidence, less a deduction in relation to discretionary overheads, but not to exceed: $527 per day. [subcl 17.1 am SLI 65 of 2013 r 4 and Sch 1 item 58, opn 9 May 2013; SLI 283 of 2013 r 4 and Sch 1 item 7, opn 1 Jan 2014]

17.2 An expert may be allowed an amount equal to the expert’s actual fees for preparing to give evidence and of attending to give evidence. Disbursements 18 18.1 All court fees and other fees and payments may be allowed in the amounts actually incurred. Fees not here provided for 19 19.1 An amount may be allowed for work not otherwise contemplated

by this Schedule. Notes 20 20.1 Lawyer is defined in section 4 of the Federal Court of Australia Act 1976. 20.2 The rates specified at item 1.1 should not exceed the rates actually charged by the lawyer to the client. Accordingly, bills of costs should set out the hourly rate (or rates) actually charged by the lawyer. 20.3 The charge for preparing documents (item 2) is inclusive of typing, printing, posting, faxing and emailing, and any other administrative task relating to the preparation or transmission of a document, by whatever means. There is to be no charge for such administrative tasks. 20.4 There is no scale item for printing documents. Accordingly, litigants should not expect to recover the cost of this task. 20.5 The word count for correspondence in items 2.2, 2.3, 3.2 and 3.3 excludes any signature block, disclaimer or similar wording.

Index References are to paragraph numbers Abuse of process annulment of bankruptcy …. [82,310.5] bankruptcy notice …. [80,915.172] creditors’ petition …. [81,015.125] debtor’s petition …. [81,080.5], [81,175.50] examinations …. [81,005.45] matrimonial cases, in …. [82,310.7] Accounts ADIs — Common Investment Fund …. [80,530] failure to keep proper books …. [84,360], [84,360.5] — defence …. [84,360.10] retirement see Retirement savings accounts (RSA) superannuation see Superannuation supervised account see Supervised account regime trustees’ obligations …. [82,545], [82,550], [82,570], [84,775] — trading …. [82,575] undischarged bankrupts …. [81,910] Acts of bankruptcy acts potentially void against trustee …. [80,910] acts with intent to defeat or delay creditors …. [80,910], [80,910.20] bankruptcy notice …. [80,910] — arbitral award deemed final offer …. [80,910] arrangement for settlement of debt …. [80,910.110] — “counterclaim, set-off or cross-demand”, meaning …. [80,910.125] claim in principal proceedings as …. [80,910.140] mutual and due in same right …. [80,910.130]

proper or reasonable to litigate …. [80,915.200] “satisfy the court”, meaning …. [80,910.145] unqualified amount …. [80,910.135] Western Australia …. [80,910.125] — discretionary aspects …. [80,910.35] — maintenance …. [80,910], [80,910.5] — non-compliance …. [80,910], [80,910.40] “comply with requirements”, meaning …. [80,910.100] execution of judgment not to be stayed …. [80,910.90] “final judgment or order”, meaning …. [80,910.60]-[80,910.75], [80,910.175]-[80,910.190] instalment order …. [80,910.95] time act of bankruptcy committed …. [80,910.30] time for compliance …. [80,910.45] — tender of amount claimed …. [80,910.105] commencement of bankruptcy — relation back …. [80,910.10], [81,855], [81,855.10], [83,770], [83,770.10] compositions with creditors — set aside or terminated …. [80,910] conveyance or assignment for benefit of creditors …. [80,910], [80,910.15] debt agreement proposals …. [80,910] debt agreements — breaches and termination …. [80,910] debtor’s petition — declaration of intention to present …. [80,910] — failure to present in time …. [80,910], [83,165.30] execution issued against debtor …. [80,910], [80,910.25] meeting of creditors, at …. [80,910] Pt X authority …. [80,910.170], [80,910.171] personal insolvency agreements …. [80,910]

suspension of payment of debts …. [80,910], [80,910.160]-[80,910.169] Address bankrupt’s — notification of changed details …. [81,545] bankruptcy notices, for — creditor …. [80,915.100] — Federal Court …. [80,915.135] — reasonable practical to make payment …. [80,915.105] Adjournments abuse of process as basis for …. [81,240.16] creditors’ petition, hearing …. [81,015.170], [83,080AAA], [83,180], [83,180.5] — appeal pending …. [80,770.10] — bad petition …. [80,770.15] — Pt X meeting pending …. [80,770.5] — personal insolvency agreement resolution, where …. [83,080AAA], [83,180], [83,180.5] examinations …. [80,770.20], [81,550.20] meeting of creditors …. [81,315Y], [83,130] — inconvenience …. [81,315Q] — quorum not met …. [81,315N] — resolution, by …. [83,130.5] Administration of deceased estates in bankruptcy annulment of order — application of Div 7.1 Bankruptcy Rules …. [91,340] — application requirements …. [91,345] — court order, by …. [83,812] — effect …. [83,814] — entry and service of annulment order …. [91,360] — notice to creditors of application …. [91,350], [94,055] — payment of debts, on …. [83,810] — report by trustee …. [91,355]

Bankruptcy Act application as modified by Rules …. [83,775], [88,645], [90,295] charge over property under joint tenancy …. [83,790], [83,790.5] commencement …. [83,770] consolidation of proceedings …. [83,780] death of debtor after creditors’ petition …. [83,755] deceased, where bankrupt — effect of order …. [83,795] divisible property …. [83,785.10] — realty vesting directly in devisee …. [83,800] end of administration …. [84,775] examination …. [81,550], [83,775], [88,645], [90,295] improvements to property …. [83,790.5] leave to commence proceedings …. [83,780.5] legal personal representative, liability …. [83,805] meeting of creditors …. [83,775], [88,645], [90,295] notice …. [83,760] payment of expenses by Commonwealth …. [84,725] Pt VI application …. [83,775], [88,645] Pt VIII application …. [83,775], [88,645] Pt XI application …. [83,775], [90,295] petition by administrator …. [83,765], [83,765.5], [88,640] — copy to Official Receiver …. [83,770], [88,640A] — debtor unable to pay debts when due …. [83,770.15] — entry of order …. [91,515] — form …. [91,510], [94,075] — procedure …. [83,765.5] petition by creditor …. [83,750] — additional affidavits …. [91,505] — affidavit in support …. [91,500] — copy to Official Receiver …. [88,640A] — court’s powers …. [83,750.70]

— entry of order …. [91,515] — equivalent provisions …. [83,750.5] — form …. [83,750.10], [91,500], [94,070] — leave of court …. [83,750.90] relation back …. [83,770], [83,770.10] rescission or suspension of order …. [80,800] right to administer as chose in action …. [81,860.5] statement of affairs …. [83,760], [83,760.5], [88,640] — false, misleading or omitted particulars …. [80,180] — form …. [93,405] — proof …. [88,645] stay of proceedings — farmers’ debt assistance …. [83,935] vesting of property on making order …. [83,785] — equivalent provisions …. [83,785.5] Administrative Appeals Tribunal (AAT) review by — application for registration as trustee, committee’s decision on …. [82,382] — automatic discharge objection review …. [82,187.5]-[82,200] — contribution assessment review …. [82,113ZF] — controlling trustee eligibility …. [88,210] — debt agreement proposals decisions on acceptance for processing …. [82,865E] — eligibility of controlling trustee …. [88,210] — information included on NPII …. [89,010] — registration and cancellation of registration as trustee …. [82,383I.5] — rejection of debtor’s petition …. [81,175] joint debtors …. [81,185] — supervised account regime decisions …. [82,113ZIT] — waiver or remission of fees …. [88,880B] Affidavits

bankruptcy notice — extension of time for compliance …. [91,110] — filing of supplementary affidavit …. [80,915.212] — setting aside …. [91,105], [91,105.5] — substituted service …. [91,100] compositions with creditors — setting aside or terminating …. [91,465] creditors’ petition — additional before hearing …. [91,155] faxed copies …. [91,160] — non-compliance with bankruptcy notice as basis …. [91,145] — verification …. [80,990], [80,990.20], [91,135], [94,030] issue of execution against debtor …. [91,140] non-compliance with bankruptcy notice …. [91,145] debt agreements — terminating or voiding …. [91,425] deceased estates, administration in bankruptcy — additional affidavits …. [91,505] — creditors’ petition, for …. [83,750], [91,500] examinations — bankrupt …. [91,260] discharge of summons …. [91,285] — debtor …. [91,230] discharge of summons …. [91,250] false …. [84,280] personal insolvency agreements — setting aside or terminating …. [91,465] proof of debts …. [81,770] search affidavits …. [91,155] swearing …. [84,175] trustee — acceptance of resignation …. [91,395]

— objection to appointment …. [91,390] — order for release …. [91,395] After-acquired property deceased estates, administration in bankruptcy — vesting in trustee …. [83,785] definition …. [81,240], [83,785], [83,795] disclosure to trustee …. [81,520], [81,520.5] personal insolvency agreement — excluded from …. [83,165.5] transactions by bankrupt …. [81,915] vesting of property on bankruptcy …. [81,240], [81,350.10] Agents representation by …. [84,755], [84,755.1] Allowances and expenses investigation by Official Receiver …. [81,532] — advance on payment …. [81,533], [81,533.10] — payment out of bankrupt’s estate …. [81,534] payment by Commonwealth …. [84,725] Annulment administration of deceased estate in bankruptcy — application …. [91,345] — court order, by …. [83,812] — effect …. [83,814] — entry and service of order …. [91,360] — notice to creditors …. [91,350], [94,055] — payment of debts …. [83,810] — report by trustee …. [91,355] bankruptcy …. [82,305] — certificate …. [82,305] — composition or scheme, following …. [81,410], [81,410.5]-[81,410.15] — confiscation of criminal proceeds …. [82,315] — costs of administration, liability unaffected …. [82,315.20]

— court order, by …. [82,310] abuse of process …. [82,310.5] application of Div 7.1 Bankruptcy Rules …. [91,340] application requirements …. [91,345] discretion of court …. [82,310.25] entry and service of annulment order …. [91,360] failure to prove service …. [82,310.45] notice to creditors of application …. [91,350], [94,055] report by trustee …. [91,355] sequestration order ought not been made, when …. [82,310.15][82,310.30] time for making application …. [82,310.10] — effect …. [82,315], [82,315.10] — grounds …. [82,305], [82,310] invalid service of bankruptcy notice …. [82,315.15] offences, effect on …. [84,385] payment of debts, on …. [82,305] — security provided for trustee’s remuneration …. [81,410.15] Appeals Federal Court, from — registrars, from …. [80,760.10] magistrates, from …. [83,390.10] “proceedings to set aside judgment or order”, as …. [80,915.195] trustee’s decision, from …. [82,640], [82,640.2]-[82,640.35] Appearance notice of appearance …. [91,070], [94,020] Applications annulment of administration of deceased estate in bankruptcy …. [91,345] annulment of bankruptcy …. [82,310]-[82,310.30], [91,345] appeal to court against trustee …. [82,640], [82,640.5]-[82,640.35] bankruptcy notices …. [86,465] — extension of time for compliance …. [80,915.19], [80,915.23], [91,110]

— setting aside …. [91,105], [91,105.5] — substituted service …. [91,100] debt agreement administrators — registration …. [82,885B] approval or refusal by Inspector-General …. [82,885C] change or removal of conditions …. [82,885H] debt agreements — directions …. [82,865W] — termination …. [82,865Q], [82,865Q.5], [91,425] — voiding …. [82,865T], [82,865T.5], [91,425] enforcement of trustee’s possession of bankrupt’s property …. [81,975] examinations — bankrupt …. [81,550.10], [91,260], [94,050] discharge of summons …. [91,285] — debtor or examinable person, summons for …. [81,550.10], [91,230] discharge of summons …. [91,250] form …. [94,010] interim application …. [91,050], [94,015] leave to be heard …. [91,065] locus standi …. [84,715], [84,715.5] notice of appearance …. [91,070], [94,020] NPII — inspection …. [89,060] — non-inclusion of certain information …. [89,005] opposition …. [81,015.70], [91,075] — notice stating grounds …. [94,025] orders regarding entities controlled by bankrupt …. [82,070]-[82,080] originating application …. [91,050], [94,010], [94,015] overseas travel permission …. [81,520.15], [82,640.35], [84,114.1], [84,370.15] — request, fee for …. [86,800] personal insolvency agreements

— control of debtor’s property …. [83,095] — order setting aside …. [83,390] — order terminating …. [83,390C] — setting aside or terminating …. [91,465] recognition of foreign proceedings …. [91,600], [94,010] registration as trustee …. [82,375], [82,375.5]-[82,375.40], [82,380], [87,805] release of trustee …. [82,805] resignation of trustee …. [91,395] review of sequestration order …. [91,370], [91,370.5], [94,060] scheme of arrangement — setting aside or terminating …. [91,465] sequestration order following default under Pt X …. [83,385], [83,390], [83,390C] trustee, order for release …. [91,395] Apprentices application for transfer of indenture …. [81,810] indenture fees — priority payment …. [81,785] sequestration order as discharge …. [81,810] Approved deposit funds property divisible among creditors …. [81,860.14] void provisions in governing rules …. [84,713], [84,713.5] Arrest bankrupt …. [81,535], [81,535.2], [81,535.5], [86,795] — application …. [91,530] — warrant …. [81,550.25], [91,530], [94,080] debtor …. [81,535], [81,535.2], [81,535.5], [86,795] — application …. [91,530] — warrant …. [81,550.25], [91,530], [94,080] non-compliance with notice to provide information and evidence …. [81,531.25], [84,342]

non-compliance with summons …. [81,550.25], [84,305], [89,230], [89,235], [91,535] — form of warrant …. [94,085] — power to issue warrant …. [81,550.25], [84,305.10] Articled clerks application for transfer of indenture …. [81,810] sequestration order as discharge …. [81,810] Associated entities books of — production at investigation …. [81,525], [81,525.5]-[81,525.20] — trustee, to …. [81,520], [81,520.10] — warrant for seizure …. [84,330], [84,330.5], [94,105] companies …. [80,130] definition …. [80,120] natural persons …. [80,135] partnerships …. [80,140] trusts …. [80,145] Associations, registered debtor’s petition presented by …. [80,275] sequestration order against …. [80,275] Attachment debts due to bankrupt or debtor — action stopped on notice of petition …. [81,870] second or subsequent bankruptcy …. [81,245], [81,247] — property available for payment of debt …. [81,870] costs …. [81,880.5] s 218 Income Tax Act notice, effect …. [81,870.10] second or subsequent bankruptcy …. [81,245], [81,247] meaning …. [81,870.10] Attorneys meeting of creditors — announcement …. [81,315M], [86,630]

— notice of meeting …. [81,315F] Audit accounts and records …. [84,780] priority payments …. [81,785] trustee’s accounts …. [82,580] Australian Financial Security Authority accountable authority …. [80,400] listed entity …. [80,400] officials of …. [80,400] Authorised deposit-taking institutions (ADIs) Common Investment Fund role …. [80,530] definition …. [80,120] Bankruptcy annulment of see Annulment commencement …. [80,910.10], [81,855], [81,855.5], [81,855.10] — Income Tax Act notice …. [81,855.25] — transactions in good faith and ordinary course of business maintenance agreements or orders …. [81,900.30], [81,900.30] protection …. [81,900], [81,900.5] date …. [80,120] definition …. [80,120] discharge of see Discharge of bankruptcy end of administration …. [84,775] extension when objection made …. [82,165] — notice …. [82,165.5] — withdrawn or cancelled objection …. [82,165.10] family law, interaction with …. [80,785.5] gambling as evidence …. [84,365.5] joint bankruptcy …. [81,305] relationship between bankrupt and trustee …. [80,455.5] trustee …. [82,800] — notice to Inspector-General …. [82,420]

Bankruptcy Act 1966 (Cth) application …. [80,275] commencement …. [80,010] costs, sections relevant to …. [120,005] Crown bound by …. [80,280], [80,280.5] interpretation …. [80,120] purpose …. [80,275.5] repeal of former legislation …. [80,017], [84,890] short title …. [80,005] state and territory laws unaffected …. [80,285] Bankruptcy courts see also Federal Court; Federal Magistrates Court; Legal proceedings adjournment of proceedings …. [80,770], [80,770.5]-[80,770.20] amendment of process …. [80,770], [80,770.25] applications to …. [84,715], [84,715.5] assistance from other courts …. [80,745], [80,745.5] — letter of request from external territories …. [80,745.10] — prescribed countries …. [86,315] charges, payment …. [80,750.5] committal power …. [80,750] control and supervision of trustee …. [82,640.20], [82,645], [82,645.5][82,645.20] declarations …. [80,750.2] delegation to Registrars …. [80,750.5] extension and abridgement of times …. [80,770], [80,770.30]-[80,770.75] fees, payment of …. [80,750.5] hearings …. [80,755], [81,550.30] injunctions, power to grant …. [80,750], [80,750.10] jurisdiction …. [80,735], [80,735.5], [80,735.10] — general outline …. [80,735.2], [80,755.5] — legal practice …. [80,755.3] powers …. [80,750], [80,750.5]

questions of law …. [80,750.6] state courts …. [80,735.7] Bankruptcy (Estate Charges) Act 1997 (Cth) commencement …. [85,145] Crown bound by …. [85,150] Inspector-General to administer …. [84,505] interpretation …. [85,155] regulations, power to make …. [85,370] short title …. [85,140] transitional provisions …. [85,123]-[85,127] Bankruptcy (Estate Charges) Amendment Act 1997 (Cth) application of amendments …. [85,127] Bankruptcy Index Online System (BIOS) definition …. [88,945] Bankruptcy Legislation Amendment (Fees and Charges) Act 2006 (Cth) application and transitional provisions …. [85,123] Bankruptcy notices abuse of process …. [80,916.172] addresses — creditor’s …. [80,915.100] — Federal Court …. [80,915.135] — reasonably practical to make payment, where …. [80,915.105] amendment …. [80,915.20] attachment of documents …. [80,915.10] — copy of judgment or order …. [80,910.63], [80,915.140], [80,915.145] — interest calculation …. [80,915.147] authorisation for issue …. [80,915.17] authority for discharge of debt …. [80,915.110] bargaining debt repayment …. [80,915.55] “channelling” multiple costs orders …. [80,915.95] Commonwealth, debt due to …. [80,920] costs …. [80,915.80]

“counter-claim, set-off or cross demand” …. [80,915.200]-[80,915.210] debt as at date of issue …. [80,915.51] defective or irregular …. [80,915.30], [80,915.35], [80,915.40], [84,730][84,730.15] — compliance with prescribed form …. [80,915.45] — interest calculation schedule …. [80,915.46] — internal inconsistency …. [80,915.49] — printed form …. [80,915.47] “execution”, meaning …. [80,910.87] extension of time for compliance …. [80,915.19], [80,915.23], [80,915.85], [80,915.180]-[80,915.190], [91,110] — discretion …. [80,915.85] — failure to satisfy requirements …. [80,915.19] — procedure …. [80,915.190] — prohibition …. [80,915.86] — supporting affidavit …. [91,110] foreign creditor …. [80,915.125] foreign currency amounts …. [80,915.18B], [80,915.130], [86,480] form …. [80,915.16], [86,470] format …. [80,915.50] identity of judgment creditor …. [80,915.18] inspection …. [86,475] interest claims …. [80,915.75] issue …. [80,915], [80,915.10] — authorisation …. [80,915.17] — creditors, request by …. [80,910.50] multiple creditors …. [80,915.11] — documents to accompany application …. [80,915.10], [86,465] — interest as component …. [80,915.13] — misdescription …. [80,915.12] — Official Receiver, by …. [80,915] — timing …. [80,915.14]

joint debtors …. [80,915.120] lifespan …. [80,915.215] misdescription of creditor or debtor …. [80,915.48] misleading to debtor …. [84,730.15] multiple judgments or orders …. [80,915.90] non-compliance with see Acts of bankruptcy overstatement of debt …. [80,915.18A], [80,915.55] — notice …. [80,915.55] effect …. [80,915.67] form …. [80,915.60] time extension …. [80,770.60], [80,915.65] payment to specified person or place …. [80,915.115] “reasonably mislead a debtor”, meaning …. [80,915.40] reduction in debt, effect …. [81,015.55] “requirement made essential by the Act”, meaning …. [80,915.35] service …. [80,915.25], [86,472] — extension of time …. [86,472.10] — invalid, annulment of bankruptcy …. [82,315.15] — out of jurisdiction …. [80,970.35] — substituted …. [91,100] — Sundays …. [86,472.5] setting aside …. [80,915.172]-[80,915.175], [84,730.15] — affidavit in support …. [91,105] — application …. [91,105] — “counter-claim, set-off or cross demand”, on basis of …. [80,915.200][80,915.210] — discretion to extend time …. [80,915.197], [80,915.203] — expiration of time for compliance …. [80,750.7] — Mareva injunctions …. [91,105.5] — natural justice requirements …. [80,915.204] — procedure …. [80,915.175] State, debt due to …. [80,920]

successive notices …. [80,915.220] time for compliance …. [80,910.45] understatement of debt …. [80,915.70] — estoppel …. [81,015.150] — formal defect or irregularity …. [90,815.30] — misstatement of amount due …. [80,915] validity …. [80,915.30], [81,015.140] Bankruptcy (Registration Charges) Act 1997 (Cth) commencement …. [85,570] interpretation …. [85,575] short title …. [85,565] Bankruptcy Regulations 1996 commencement …. [86,010] Criminal Code application …. [86,020] forms see Forms interpretation …. [86,015] schedules …. [90,040]-[90,345] title …. [86,005] transitional provisions …. [89,880C] Bankrupts accounts of see Accounts address change, notification …. [81,545], [81,545.5]-[81,545.20] after-acquired property of see After-acquired property appeal against trustee’s decision …. [82,640], [82,640.5]-[82,640.35] arrest …. [81,535], [81,535.2], [81,535.5], [86,795] — application …. [91,530] — warrant …. [81,531.25], [81,550.25], [91,530], [94,080] books, access to …. [81,520], [81,520.10] charging of property with intent to defraud creditors …. [84,335], [84,335.5] concealment of property with intent to defraud creditors …. [84,275] contact details, notification of change …. [81,545], [81,545.5]-[81,545.20]

contributions see Contributions by bankrupt death …. [81,265], [81,265.5] default by …. [84,325], [84,325.5]-[84,325.15] dependant of …. [82,113K] disposing of property with intent to defraud creditors …. [84,335], [84,335.5] duties to trustee …. [81,520], [81,520.5], [82,270], [82,270.5] — aid in administration of estate …. [81,520.50] — attend meetings …. [81,520.35] — delivery of books …. [81,520.10] — delivery of passport …. [81,520.15] — disclosure of property …. [81,520] failure to disclose …. [84,325], [84,325.5]-[84,325.15] — non-compliance as offence …. [81,520.60] examination of see Examinations failure to keep proper books of account …. [84,360], [84,360.5] — defence …. [84,360.10] false declarations …. [84,337] gambling or hazardous speculation …. [84,365], [84,365.5] income …. [81,985.10] — second or subsequent bankruptcy …. [81,245], [81,247] investigation of see Investigations of bankrupt leaving Australia with intent to defeat creditors …. [84,370] — consent of multiple trustees …. [84,370.10] — decision of trustee as to consent …. [84,370.5] — permission to leave …. [81,520.15], [82,640.35], [84,370.15] request, fee for …. [86,800] material change in statement of affairs …. [81,520] meetings with creditors …. [81,520] meetings with trustee …. [81,520] name change, notification …. [81,545], [81,545.5]-[81,545.20] overseas travel restrictions …. [81,520.15], [81,520.20], [82,640.35],

[84,114.1], [84,370.15] — request, fee for …. [86,800] passport, surrender …. [81,520], [81,520.15] privilege against self-incrimination …. [81,520.55], [81,531.35], [81,550.45] statement of affairs — false declarations …. [84,337], [83,337.5] telephone number, notification of change …. [81,545], [81,545.5][81,545.20] transactions by — without disclosure of debt agreement …. [84,355], [84,355.5] indexation of amount …. [84,723] undischarged bankrupt …. [84,355.10] Bills of exchange proof of debts …. [81,725] Bills of sale void provisions …. [84,710], [84,710.5] Books associated entities …. [81,525] definition …. [84,360.5] examinable affairs, relating to — trustee, for …. [81,520], [81,520.10], [81,525], [81,525.5]-[81,525.20] failure to keep and preserve …. [84,360], [84,360.5] — defence …. [84,360.10] — period of bankruptcy, for …. [84,400] production of — examinations, for …. [81,550.35] — investigation of bankrupt …. [81,523], [81,525] failure to comply with request …. [84,330], [84,330.5] return or destruction by trustee …. [84,775] supervised accounts regime, under …. [82,113ZIIA] trustee’s obligations …. [82,570], [82,575]

Caveats effect of …. [81,870.30] Certificates annulment of administration of deceased estate in bankruptcy …. [83,810] annulment of bankruptcy …. [82,305] appointment of trustee …. [82,390], [87,930] contributions by bankrupt — non-payment …. [82,113ZG] — outstanding amounts …. [87,295] costs, for …. [80,765.75], [80,765.80] infringement notices …. [89,300] personal insolvency agreements — discharge of obligations under …. [83,495] — non-availability of dividend …. [88,470] registration as trustee …. [82,383C], [87,815] resolutions of meeting of creditors — evidence, as …. [83,415], [83,415.5], [83,415.10] Charges see also Charging orders personal insolvency agreements — control over debtor’s property …. [83,083] void provisions …. [84,710], [84,710.5] Charges (Pecuniary) see also Fees interest charge …. [85,255] — deferred payment …. [84,510] — extension of time for payment …. [84,520] — information to accompany …. [89,695] — late payment penalty …. [84,515] — lodgment of request for remission …. [89,710] — mode of payment …. [89,685] — overpayments …. [89,690]

— payment by cheque or payment order …. [84,535] — payment form …. [93,460] — recovery by Commonwealth …. [84,530] — regulations for other matters …. [84,540] — remission …. [84,525] late payment penalty …. [84,515] — lodgment of request for remission …. [89,710] — mode of payment …. [89,685] — overpayments …. [89,690] — payment by cheque or payment order …. [84,535] — recovery by Commonwealth …. [84,530] — regulations for other matters …. [84,540] — remission …. [84,525] realization charge …. [85,355] — amount payable …. [85,360] — calculation …. [85,365] — certain amounts treated as received …. [85,363] — deferred payment …. [84,510] — estate surplus excluded …. [85,357] — extension of time for payment …. [84,520] — information to accompany …. [89,700] — late payment penalty …. [84,515] — lodgment of request for remission …. [89,710] — mode of payment …. [89,685] — overpayments …. [89,690] — payment by cheque or payment order …. [84,535] — payment form …. [93,465] — recovery by Commonwealth …. [84,530] — refund request form …. [93,500] — regulations for other matters …. [84,540] — remission …. [84,525] registration as trustee …. [85,585]

— application charge …. [85,580] — change of conditions …. [85,595] — extension of term …. [85,590] Charging orders void against trustee, when …. [81,870] — caveats …. [81,870.30] — interim and final orders …. [81,870.25] — limitation period …. [81,920] — second or subsequent bankruptcy …. [81,245], [81,247] Child support payments see also Family Law discharge of debt …. [82,275.40] priority payment …. [81,785], [81,785.20] variation of bankrupt’s income …. [82,113N] Commissioner of Taxation secured creditor, as …. [80,975.130] Commissions examination of witnesses …. [80,775] Committees of inspection see also Meetings of creditors appointment …. [81,315V], [81,345] composition …. [81,345] meetings …. [31,345] — minutes as evidence …. [84,150] — presumption of due process …. [84,155] members — eligibility …. [81,345] — fiduciaries, as …. [81,355.5] — purchase property of bankrupt …. [81,355] — remuneration …. [81,355.10] — resignation …. [81,350] — vacation of office …. [81,350]

personal insolvency agreement, following …. [81,345]-[81,355], [83,490], [88,465], [90,245] purpose …. [81,345] trustees, relationship with …. [81,345.5] Common Investment Fund see also Official Trustee in Bankruptcy ADIs, role …. [80,530] borrowing for …. [80,543] contents …. [80,530] Equalization Account …. [80,550] — credits to and debits from …. [80,555] establishment by Official Trustee …. [80,530] interest on money in …. [80,540], [80,560.5] — discretion of Inspector-General …. [80,560.20] — payable when …. [80,560] — payment to Commonwealth …. [80,555] — prescribed rate …. [80,560.10], [86,165] investment of money …. [80,540] — capital appreciation or depreciation …. [80,545] — capital profits or losses …. [80,545] money not held for particular account …. [80,545] payments from and to …. [80,530] taxation …. [80,540] Commonwealth debts due to — bankruptcy notice, sufficient compliance …. [80,920] — recovery of charges …. [84,530] — right to present petition …. [80,280.5] indemnity — Inspector-General …. [80,465] — officers …. [80,465] — Official Receiver …. [80,465]

— Official Trustee …. [80,450] payment of expenses …. [84,725] unclaimed moneys or dividends — statement for payment …. [84,040], [88,795] Commonwealth Authorities and Companies Act 1997 (Cth) Official Trustee, whether applicable …. [80,447] Companies see Corporations Company officers definition …. [80,120] receivers, as …. [80,120.37] Compensation action by debtor following personal insolvency agreement …. [81,250], [83,490], [88,465], [90,245] action by subsequently bankrupt debtor …. [81,250] damages — property divisible among creditors …. [81,860.9], [81,860.14.5] Compositions with creditors see also Schemes of arrangement annulment of bankruptcy …. [81,410], [81,410.5]-[81,410.15] application to declare void …. [81,875.15] approval by court …. [81,415] copies for creditors …. [86,625] date for payment …. [83,165.40] declaration of relationships by proposed trustee …. [81,405B] — tabling at meeting …. [81,405C] default …. [81,415] — remedy …. [81,415.5] effect …. [81,415] enforcement …. [81,415] inspection …. [86,625] joint …. [81,405.10] meetings with creditors …. [81,405.20], [81,425], [81,425.5]-[81,425.15],

[86,640], [86,645], [90,045] — surety for cost …. [81,405A] overview …. [81,405.5] Pt VIII, application to trustee …. [81,420] proposal …. [81,405] — contents …. [81,405.10] — procedure …. [81,405.5] — time for sending …. [86,640] report — time for sending …. [86,640] setting aside by court …. [81,425B] — act of bankruptcy, as …. [80,910] — application of Pt 10 Bankruptcy Rules …. [91,460] — application requirements …. [91,465] — entry of order …. [91,480] — expenses as provable debts …. [81,815], [81,815.5]-[81,815.15] — notice to creditors …. [91,475], [94,065] — service …. [91,470] statement of affairs, tabling of …. [81,405C] termination …. [81,425B] — act of bankruptcy, as …. [80,910] — application of Pt 10 Bankruptcy Rules …. [91,460] — application requirements …. [91,465] — entry of order …. [91,480] — expenses as provable debts …. [81,815], [81,815.5]-[81,815.15] — notice to creditors …. [91,475], [94,065] — proof of debts …. [81,185], [81,185.5], [81,185.10] — service …. [91,470] validity …. [81,415.5], [83,165.35] variation …. [81,410A] Conduct money examination, attendance at …. [81,550.65]

Consolidation of proceedings deceased estates, administration in bankruptcy …. [81,020], [83,780] overview …. [81,020], [81,020.10] Conspiracy damages claim — provable in bankruptcy …. [81,650.20], [82,275.15] Contempt of court civil and criminal distinguished …. [83,750.35] deceased estates, administration in bankruptcy — failure to surrender security …. [83,750] punishment …. [84,395] Contingent liabilities debts provable in bankruptcy …. [81,650.5], [81,650.65] Contracts disclaimer where onerous …. [80,770.50] — equitable rights of purchaser …. [81,995.15] — vesting in entitled person …. [81,995.20] order …. [81,995.25] joint contracts, actions involving — administration of deceased estate in bankruptcy …. [81,260], [83,775], [88,845], [90,295] — party bankrupt …. [81,260] — party subject to personal insolvency agreement …. [81,260], [83,490], [88,465], [90,245] rescission where onerous …. [80,770.50], [81,995], [87,170] void provisions …. [84,705] Contributions by bankrupt actual income threshold amount …. [82,13K] assessment of income and contribution …. [82,113K], [82,113W] — basis …. [82,113X] — denial of income receipt …. [82,113Z], [82,113Z.5] — “derived from the bankrupt” …. [82,113Y.10]

— formula …. [82,113S] — internal review by Inspector-General …. [82,113ZA]-[82,113ZF] decision on review …. [82,113ZD], [82,113ZD.5] review of decision …. [82,113ZF] — notice of assessment …. [82,113W.5] — reasonable expectation …. [82,113Y.5] — reasonable remuneration …. [82,113Y], [82,113Y.5] — review by court …. [82,113Z.10] — time limit …. [82,113WA] — timing …. [82,113ZA.5] base income threshold amount …. [82,113K] certificates — outstanding contribution …. [87,295] “contributing bankrupt”, definition …. [87,275] contribution assessment period …. [82,113K], [82,113K.5] “contributions”, definition …. [87,275] death of bankrupt …. [87,285] definitions …. [82,113K] discharge of bankruptcy, effect …. [82,275], [87,300] hardship, effect of …. [82,113T] income …. [81,985.10] — cash …. [82,113ZII] — child support payments, effect …. [82,113N] — deposit into supervised account …. [82,113ZIF] — derivation …. [82,113M] — evidence …. [82,113U], [82,113V] false, misleading or omitted particulars [82,113U.5], [82,173.8], [84,339], [84,339.5] — family assistance payments …. [87,260] — fringe benefits …. [82,113L.20], [87,220], [87,225], [90,145] — meaning …. [82,113L], [82,113L.5], [87,260], [87,260D], [87,285A] — “ordinary usages and concepts” …. [82,113L.15]

— primary industry rural support scheme payments …. [87,260D] — restart scheme payments …. [87,250] — social security payments …. [87,260] — superannuation contributions …. [87,255] — tax payments and refunds, varied by …. [82,113N], [82,113N.5] liability to pay …. [82,113P], [82,113P.5] — change in …. [82,113Q] — income in excess of contribution …. [82,113P.5] — permission to leave Australia …. [82,114.1], [83,470.15] — subsequent discharge, effect of …. [82,113R] modes of payment …. [87,280] notice of determination …. [82,113ZI] object of Div 4B …. [82,113J] payments …. [82,113ZG] — excess …. [82,113ZH] — supervised account, from see Supervised account regime pension …. [82,113K] statement of income particulars …. [82,113U], [82,113V] Controlling trustees see also Personal insolvency agreements; Trustees acts to bind subsequent trustees …. [83,195] alternative nomination …. [83,105] authority to call meeting of creditors …. [83,075] — copy of consent to Official Receiver …. [88,415] — form of consent …. [88,415], [93,450] — information to debtor before consent …. [88,410] authority to control debtor’s property …. [83,075] — copy of consent to Official Receiver …. [83,350], [88,415] — form of consent …. [93,450] — information to debtor before consent …. [88,410] declaration as to debtor’s relationships …. [83,085] — tabling at meeting of creditors …. [83,115A]

definition …. [83,020] duties — additional …. [83,095A] — calling meeting of creditors …. [83,095] eligibility …. [83,345], [88,205] — review of determination …. [88,210] indemnity …. [83,083AC] modification of Pt VIII provisions …. [83,200], [88,435], [90,245] Official Trustee, performance of duties by …. [88,215] payment to protect property …. [83,100] performance standards …. [88,200A], [90,150] powers …. [83,095] report as to debtor’s affairs …. [83,085], [83,085.5] — tabling at meeting of creditors …. [83,115A] — trustee’s opinion …. [83,085.10] statement as to resolution …. [83,090] substituted …. [83,105] Copyright trustee’s powers, limitations on …. [82,020] Corporations administrator of debt agreement, as — cancellation of application …. [82,885L] — cancellation of registration …. [82,885N] — conditions of registration …. [82,885G] — eligibility test …. [82,885A] associated entities …. [80,130] creditors’ petition …. [80,975.35] debtor’s petition presented by …. [80,275] director — definition …. [80,120] financial affairs …. [80,155] representation …. [84,755]

sequestration order against …. [80,275] winding-up — priority payment …. [81,795.5] Costs see also Fees administration of bankruptcy — annulment or termination, effect on liability …. [82,315.20] — priority payment …. [81,785] amendment of proof of debts …. [81,740] attachment or execution …. [81,880.5] authority to hold meeting of creditors — priority payment …. [81,785] Bankruptcy Act, relevant sections in …. [120,005] bankruptcy notices …. [80,915.80] basis for …. [91,550] bills of costs — application for review of third party …. [88,027] — form …. [82,495.10], [87,990], [91,560]-[91,575] — review …. [82,495], [88,024], [88,030]-[88,033] certificates …. [80,765.75] — Uniform Civil Procedure Rules (NSW), under …. [80,765.80] claim …. [91,570] creditors’ petitions …. [81,010] — deceased estates, administration in bankruptcy …. [91,560] — intervening Pt X …. [80,765.25] — intervening voluntary bankruptcy …. [80,765.20] — priority payment …. [81,785] — unaware of bankruptcy, where …. [80,765.20] — withdrawal or dismissal …. [80,765.15] examination of bankrupt …. [80,765.60], [81,550.60] examination of debtor following personal insolvency agreement …. [80,765.60], [81,550.60]

examination of examinable person …. [80,765.60], [81,550.60] examination of examinable person following personal insolvency agreement …. [80,765.60], [81,550.60] extension of time for successful appeal …. [80,765.53] indemnity costs …. [91,55.10] jurisdiction …. [80,765], [91,550.5] Official Receiver …. [82,478] orders …. [80,765] — final orders, as …. [80,910.177] parties and non-parties, contribution by …. [80,765.65], [82,470.45], [91,550.10] payment by Commonwealth …. [84,725] principles …. [80,765.10] proof of debts …. [81,650.3], [81,740] — review by court …. [80,765.55], [81,765], [81,765.5] records of proceedings …. [84,140] security for costs …. [80,765.70], [91,560.5] solicitors’ costs — scale of 20/08/1992 - 30/07/1997 …. [120,050], [120,100] 12/10/1987 - 19/08/1992 …. [120,150], [120,200] 06/03/1984 - 11/10/1987 …. [120,250] — work done and services performed, allowable for 01/01/2014 - present …. [121,040] 01/08/2011 - 31/12/2013 …. [121,035] 01/08/2006 - 31/07/2011 …. [121,030] 14/11/2001 - 31/07/2006 …. [121,025] 15/07/1998 - 13/11/2001 …. [121,020] 19/04/1993 - 14/07/1998 …. [121,015] 17/04/1989 - 18/04/1993 …. [121,010] 08/05/1987 - 16/04/1989 …. [121,005] 08/11/1983 - 07/05/1987 …. [121,000]

supporting creditor …. [80,765.30] taxation …. [87,985]-[87,995.10] — attendance at hearing …. [91,575] — procedure …. [80,765.35] transcripts of evidence …. [84,140] trustee, against …. [80,765.50] Creditors see also Secured creditors appeal against trustee’s decision …. [82,640], [82,640.5]-[82,640.35] application for sequestration order following default under Pt X …. [81,875.15], [83,385], [83,390], [83,390.5]-[83,390.20], [83,390C], [91,425] bankruptcy notice — address for payment …. [80,915.100] — application to issue …. [80,910.50] — assignee, by …. [80,910.180] — identification in …. [80,915.18] — misdescription in …. [80,915.48] charging of property with intent to defraud creditors …. [84,335], [84,335.5] charging orders against property of debtor before bankruptcy …. [81,870], [81,870.5]-[81,870.30] composition or arrangement with see Compositions with creditors; Schemes of arrangement concealment of property from, with intent to defraud …. [84,275] control over trustee …. [82,635] debt agreement proposals — communication from Official Receiver …. [82,865EA] — inspection of statement …. [82,865EB] disposing of property with intent to defraud creditors …. [84,335], [84,335.5] foreign …. [80,915.125] identification of judgment creditor …. [80,915.18]

inspection of debtor’s statement of affairs …. [83,077B] “intent to defraud”, meaning …. [80,170], [84,335.5] notice of bankruptcy …. [80,455], [86,620] notice to — annulment application …. [91,350], [94,055] — application to review Registrar’s decision to make sequestration order …. [94,060] — debt agreements, termination or voiding …. [91,435], [94,065] — form …. [94,065] personal insolvency agreements — bound by …. [83,480] — inspection …. [83,420], [89,880] — termination …. [83,390B] application to court …. [83,390C] — variation …. [83,385A] notice …. [83,410] Creditors’ meetings see Meetings of creditors Creditors’ petitions affidavit in support …. [91,135], [94,030] — issue of execution against debtor …. [91,140] — non-compliance with bankruptcy notice …. [91,145] application of Pt 4 Bankruptcy Rules …. [91,130] Commonwealth, presentation by …. [80,280.5] control of debtor’s property before sequestration …. [81,005], [81,005.10] — constitutional validity of s 50 …. [81,005.40] — damages for debtor on dismissal …. [86,545], [86,545.5] — distribution after petition dismissed …. [81,005.35] — duration of orders …. [81,005.25] — examinations, abuse of process …. [81,005.45] — execution against property …. [81,005.30] — procedure …. [81,005.12] copy to Official Receiver …. [86,530]

costs …. [80,765.25], [81,010], [91,560] — intervening voluntary bankruptcy …. [80,765.20] — priority payment …. [81,785] — unaware of bankruptcy, where …. [80,765.20] — withdrawal or dismissal …. [80,765.15] debt, nature of …. [80,975.60] debtor dying after presentation …. [83,755] deceased estates, administration in bankruptcy …. [83,750] — additional affidavits …. [91,505] — affidavit in support …. [91,500] — copy to Official Receiver …. [88,640A] — costs …. [91,560] — court’s powers …. [83,750.70] — entry of order …. [91,515] — equivalent provisions …. [83,750.5] — form …. [83,750.10], [91,500], [94,070] — leave of court …. [83,750.90] dismissal …. [81,015] — ability to pay debts …. [81,015.80] — costs …. [80,765.15] — damages …. [86,545], [86,545.5] — entry of order …. [91,170] — service of order …. [91,175] — sufficiency of assets, onus of establishing …. [81,015.80] execution …. [80,990.40] extensions …. [80,770.70], [81,015.230] — entry of order …. [91,170] — service of order …. [91,175] firm name, in …. [80,975.35], [80,980.20] form …. [91,135], [94,030] grounds …. [80,975], [80,975.10] — accrued debt …. [80,970.40]

accrual of debt before bankruptcy …. [80,975.40] — act of bankruptcy within 6 months …. [80,975.80] — judgment not prerequisite …. [80,975.60] — one act of bankruptcy …. [80,975.90] — stay of execution of judgment, effect …. [80,915.17], [80,970.50] hearing …. [81,015], [81,015.5] — additional affidavits to be filed before …. [91,155] fax copies …. [91,160] — adjournment …. [80,770.5]-[80,770.15], [81,015.170], [83,080AAA], [83,180], [83,180.5] — documents to be served before …. [91,150] proof of service …. [91,150.5] — judgment debt, assessment of …. [81,015.60], [81,015.65], [81,250.60] — open court …. [80,755] — proof of debt …. [81,015], [81,015.50] — proof of service …. [81,015], [81,015.30] — verification of petition …. [81,015.20] improper purpose …. [81,015.125], [81,015.160] income tax liability …. [80,975.10] joint creditors …. [80,975.30] joint debtors, against …. [80,980], [80,980.5] lapse …. [81,015.220] limitation of actions …. [80,970.11] misleading petition …. [80,970.12], [81,015.56] notice of appearance …. [91,070], [94,020] opposition to …. [81,015.70], [91,075] — notice stating grounds …. [94,025] outstanding in relation to debtor’s petition …. [81,175], [81,175.45] partnership, against …. [80,980], [80,980.5] — presentation of petition …. [80,980.7] — proceedings in firm name …. [80,980.20] — several partners, against …. [80,980.15]

pending proceedings …. [81,015.95] personal insolvency agreement, resolution of — adjournment of hearing …. [83,080AAA], [83,180], [83,180.5] presentation …. [80,970.20] procedural errors …. [80,970.10], [80,970.10.10] property transfers, where void …. [81,895] secured creditor …. [80,120], [80,975], [80,975.100] — Commissioner of Taxation …. [80,975.130] — estimate of value of security …. [80,975.110] — failure to value security …. [80,975.140] — Family Court orders, under …. [80,975.120] — undervalue of security …. [80,975.140] service …. [81,015.30] service generally …. [80,970.10.5] — accompanying documents …. [91,150] proof of service …. [91,150.5] — out of jurisdiction …. [81,015.40] standing …. [80,970.25] substituted petitioners …. [81,000], [81,000.5], [81,000.20] — existence of debt as precondition …. [81,000.15] — procedure …. [81,000.10] substituted service …. [81,015.30] test …. [81,015.55] transfer to Federal Court …. [80,970.27] verification by affidavit …. [80,990], [80,990.20], [81,015.20], [91,135], [91,500], [94,030] withdrawal …. [80,990], [80,990.80] — costs …. [80,765.15] — entry of order …. [91,170] — service of order …. [91,175] Criminal Code application to offences …. [80,278]

Cross-Border Insolvency Act 2008 (Cth) application …. [91,590] definitions …. [91,595] proceedings under — provisional relief, application for …. [91,605], [94,015] — recognition application …. [91,600], [94,010], [94,015] notice of filing application …. [91,615], [94,095] notice of order …. [91,620], [94,100] order for, application to modify or terminate …. [91,630], [94,110] relief after …. [91,625] — registered trustee’s consent to act …. [91,610], [94,090] — withdrawal notice of order for …. [91,620], [94,105] vesting of property on bankruptcy …. [81,240.45] Crown Bankruptcy Act, bound by …. [80,280], [80,280.5] Bankruptcy (Estate Charges) Act, bound by …. [85,150] Damages conspiracy, for — provable in bankruptcy, whether …. [81,650.20], [82,275.15] debtor, for — dismissal of creditors’ petition …. [86,545], [86,545.5] property divisible among creditors …. [81,860.9], [81,860.14.5] right to recover …. [81,860.9] unliquidated damages — provable in bankruptcy, whether …. [81,650], [81,650.10] De facto spouse definition …. [80,120.15], [82,113K] Death bankrupt, of …. [81,265], [81,265.5] Death claims

action by debtor following personal insolvency agreement …. [81,250], [83,490], [88,465], [90,245] action by debtor subsequently bankrupt …. [81,250] life insurance policies …. [81,860.13] property divisible amongst creditors …. [81,860] Debt agreement proposals acceptance …. [82,865EC] — cancellation …. [82,865ED] act of bankruptcy, as …. [80,910] applicable deadline …. [82,865] conditional …. [82,865H] form …. [93,470] giving …. [82,865C] inclusions …. [82,865C] inquiries and investigations by Inspector-General …. [80,395] lapsing …. [82,865G] processing by Official Receiver …. [82,865EA] — acceptance for …. [82,865E] effect …. [82,865F], [82,865F.5], [82,865F.10] remuneration of administrator …. [82,865Z] requirements …. [82,865C] statement of affairs …. [82,865D] — false, misleading or omitted particulars …. [80,175] unconditional …. [82,865H] writing to creditors …. [82,865E], [82,865EA] — inspection of statement …. [82,865EB] Debt agreements act of bankruptcy, as …. [80,910] administration trust accounts — account-freezing notices …. [82,885LB] judicial enforcement …. [82,885LD] power of court to set aside …. [82,885LC]

protection of bank …. [82,885LE] — information for Inspector-General …. [82,885LA] administrators — accounts to be kept …. [82,865LE] — annual return …. [82,865LEA] — applicants’ qualifications …. [88,260] — bank accounts, separation of …. [82,865LD] — control of, by court …. [82,865ZCB] — death of appointment by Official Receiver …. [82,865ZC] notification …. [82,865ZA] Official Trustee as replacement …. [82,865ZB] remuneration of appointee …. [82,865ZD] — definition …. [80,120] — duties …. [82,865LA]-[82,865LG] extended meaning …. [82,865LG] notification of 3-month arrears default …. [82,865LB] notification of 6-month arrears default …. [82,865LC] — guidelines for Inspector-General’s powers …. [82,885Q] — ineligibility declarations …. [82,885M] — loss caused by breach of duty, order rectify …. [82,865ZCA] — money received by, held on trust …. [82,865Y] — offences …. [82,885N] — registration …. [82,885D] application …. [82,885B] application to change or remove conditions …. [82,885H], [93,520] cancellation …. [82,885K] conditions …. [82,885C], [82,885F], [82,885G] duration …. [82,885E] eligibility test …. [82,885A] fee refund on cessation …. [82,885P] Inspector-General, approval or refusal by …. [82,885C]

surrender …. [82,885J], [82,885N], [93,525] — remuneration …. [82,865Z] — return of certificate …. [82,885N] — succession …. [82,865LF] application of Pt 9 Bankruptcy Rules …. [91,420] directions to Official Receiver …. [82,865W] failure to disclose during transactions …. [84,355], [84,355.5] — indexation of amount …. [84,723] information for debtor …. [88,255] making on acceptance of proposal …. [82,865H] offences …. [84,355], [84,355.5]-[84,355.10] parties …. [82,856I] prevention of proceedings over debts …. [82,865K] provable debt …. [82,865] secured creditors …. [82,865XA] stamp duty …. [82,865X] statement of affairs — form …. [93,470] termination — acceptance of proposal, by …. [82,865P], [82,865PC] inspection of creditor’s statement …. [82,865PB] — application requirements …. [91,425] — bankruptcy of debtor, by …. [82,865R] — court order, by …. [82,865Q], [82,865Q.5] — designated 6-month arrears default …. [82,865QA], [82,865QA.1] — discharge of obligations …. [82,865N] — entry and service of order …. [91,440] — notice to creditors …. [91,435], [94,065] — Pt 9 Bankruptcy Rules, application …. [91,420] — release of debtor from debts …. [82,865NA] — service …. [91,430] — validity of acts preceding …. [82,865S]

— withdrawal of proposal …. [82,865PD] variation …. [82,865M] — acceptance of proposal …. [82,865MC] — inspection of creditor’s statement …. [82,865MB] — procedures for proposals …. [82,865MA] — withdrawal of proposal …. [82,865MD] voiding — application for order …. [82,865T], [82,865T.5] — application requirements …. [91,425] — entry and service of order …. [91,440] — making of order …. [82,865U], [82,865U.5] — notice to creditors …. [91,435], [94,065] — Pt 9 Bankruptcy Rules, application …. [91,420] — service …. [91,430] — validity of acts done …. [82,865V] Debtors see also Joint debtors; Partnerships application of Bankruptcy Act …. [80,275] arrest …. [81,535], [81,535.2], [81,535.5], [86,795] — application …. [91,530] — warrant …. [81,531.25], [81,550.25], [91,530], [94,080] concealment of property with intent to defraud creditors …. [84,275] death of — after presentation of creditors’ petition …. [83,755] default by …. [84,345] definition …. [83,020], [83,020.15] examination of see Examinations false declarations …. [84,337] meeting of creditors — duty to attend …. [83,120] — failure to attend, effect …. [83,385] misled by bankruptcy notice …. [84,725.15]

personal insolvency agreements of see Personal insolvency agreements statement of affairs …. [83,075] — false declarations …. [84,337], [83,337.5] — inspection …. [83,077B] — tabling at meeting of creditors …. [83,115A] transactions by, prior to bankruptcy — without disclosure of debt agreement …. [84,355], [84,355.5] indexation of amount …. [84,723] Debtors’ petitions abuse of process, as …. [81,080.5], [81,175.50] acceptance or rejection by Official Receiver …. [81,175], [81,175.10] act of bankruptcy, as …. [80,910] — failure to present in time …. [80,910], [83,165.30] commencement of bankruptcy …. [81,175.40], [81,190] corporations, of — restrictions under Bankruptcy Act …. [80,275] creditors’ petition outstanding …. [81,175], [81,175.45] declaration of intention to present …. [80,910], [81,075], [81,075.5] — acceptance or rejection by Official Receiver …. [81,085] copy to debtor …. [86,555] — disqualification from presenting …. [81,080], [81,080.5] — extension or abridgment of time …. [81,120] — form …. [93,410] — information to debtor …. [81,090], [86,560] — secured creditors’ rights unaffected …. [81,125] — stay period following endorsement court registrar’s duties …. [81,105] effect …. [81,110.5] enforcement of debt suspended …. [81,095], [81,095.5] extension of time for other purposes …. [81,115] persons entitled to deduct money …. [81,110], [81,110.5] sheriff’s duties …. [81,100]

farmers’ debt assistance — intervention by relevant authority …. [83,940] — stay of proceedings …. [83,935] form …. [81,175.15], [93,415] joint debtors, by …. [81,185] — false declarations …. [84,337], [84,337.5] — farmers’ debt assistance intervention by relevant authority …. [83,940] — filing of trustee’s consent …. [86,565] — information to petitioning debtors …. [81,185], [86,560] — persons entitled to present …. [81,185] — presentation to Official Receiver …. [81,185] — statement of affairs …. [81,185] notice of appearance …. [91,070], [94,020] opposition …. [91,075] — notice of grounds …. [94,025] partnership, against …. [81,180B] — acceptance by Official Receiver …. [81,180D] — bankruptcy on acceptance …. [81,180E] — false declarations …. [84,337], [84,337.5] — farmers’ debt assistance intervention by relevant authority …. [83,940] — information to petitioning partners …. [86,570] — non-petitioning partners, duties …. [81,180F] — persons entitled to present …. [81,180A] — presentation to Official Receiver …. [81,180B] — reference to court …. [81,180C], [91,200] form …. [94,040] notice of hearing …. [86,570] — restrictions …. [80,275] — statement of affairs to accompany …. [81,180B] inspection …. [81,180G]

personal insolvency agreement, after — leave required …. [81,175] powers of attorney …. [81,175.55] presentation, fee for …. [86,557] property transfers, where void …. [81,895] reference to court …. [81,175] relation back …. [81,175.5], [81,855] review of rejection decision …. [81,175] sequestration order, whether necessary …. [81,175.5] statement of affairs to accompany …. [81,175] — false declarations …. [84,337], [84,337.5] — inspection and copies …. [81,175] trustee’s consent — filing …. [86,565] Debts see also Order of payment of debts contingent …. [83,135.5] due date, relevance …. [80,120.55] frozen …. [80,120], [81,095.5], [82,865] part of dollar value disregarded …. [84,720] Deceased estates see Administration of deceased estates in bankruptcy Declaration trustee, by …. [93,445], [93,450] Defamation immunity from — publication of material on NPII …. [89,070] qualified privilege for reports …. [84,740.5] Discharge of bankruptcy automatic …. [82,163] — date …. [80,770.40], [80,770.75], [82,163.5] — extension of time …. [80,770.40] — objections

bankrupt returning to Australia …. [82,173.5], [87,650] cancellation …. [82,165.10], [87,655] effective date …. [82,168.10], [82,180] extension of bankruptcy following …. [82,165], [82,165.5], [82,165.10] failure to comply with request regarding property or income …. [82,173.7], [87,653], [87,653.5] failure to disclose liability …. [82,173.15] failure to disclose particulars of income …. [82,113U.5], [82,173.8] failure to explain adequately …. [82,173.10], [87,653.5] failure to file statement of affairs …. [82,163.10] failure to notify of address or name changes …. [81,545.10] filing of notice …. [82,168] form of notice …. [82,170], [82,170.5]-[82,170.20] grounds …. [82,160], [82,160.5], [82,173] notice to bankrupt …. [82,165.5], [82,178], [82,178.5] provision of incomplete or inaccurate information …. [82,173.10] — review …. [82,187.5], [82,187.10] internal review …. [82,188]-[82,200] withdrawal …. [82,165.10], [82,185], [82,185.5] withdrawal, partial …. [82,183] discharged bankrupt — continuance of proceedings abandoned during bankruptcy …. [82,275.25] — duty to assist trustee …. [82,270], [82,270.5] effect …. [82,275], [82,275.5]-[82,275.35] — contributions, effect on …. [82,113R], [82,275], [87,300] misleading conduct …. [82,160], [82,160.5] offences, effect on …. [84,385] Disclaimer of onerous property see also Realization of property equitable rights of purchaser …. [81,995.15] extension of time …. [80,770.50] land rates and taxes …. [81,995.10]

leases …. [81,995], [87,170] — notice requirements …. [81,995], [87,170] “onerous covenants” …. [81,995.10] vesting in entitled person …. [81,995.20] — order …. [81,995.25] Distribution of property actions for dividends …. [82,150] declaration and distribution of dividends …. [82,115] final dividend …. [82,140] — declaration …. [87,500] joint and separate dividends …. [82,120] — apportionment of administration expenses …. [82,125] minimum amount of dividend …. [87,450] small dividends, payment of …. [82,115], [82,115.1], [87,450] statement of affairs, failure to file …. [82,145], [82,145.5] trustee’s account of receipt and payments …. [82,115], [93,395] unclaimed dividends, payment …. [84,040], [88,795] unproved creditors’ rights after dividend …. [82,135] unproved debts, provision for …. [82,130] Employees debts owing to — priority payments …. [81,785], [81,790], [86,950] Entities see Associated entities; Entities controlled by bankrupt Entities controlled by bankrupt application by trustee for orders …. [82,075] — appearance at hearing …. [82,085] — available orders …. [82,090] increase in property value of natural person …. [82,098] net worth of entity other than natural person …. [82,095] property of natural person …. [82,093] — costs …. [82,090.15] — enforcement of orders …. [82,105]

— entity entitled to claim in bankruptcy …. [82,110] — injunctions …. [82,090.10] — interests of other persons …. [82,100] — service …. [82,080] control, meaning …. [80,150] Div 4A provisions — commencement …. [82,070] — intention and rationale …. [82,070.5] examinable period, definition …. [82,088] Evidence see also Witnesses committee of inspection meetings — minutes …. [84,150] — presumption of due process …. [84,155] investigations of bankrupt — prevarication or evasion …. [84,344], [84,344.5] — refusal to give evidence …. [84,343] meeting of creditors — minutes …. [84,150] — presumption of due process …. [84,155] notices in Gazette …. [84,145] NPII — copy of extract …. [89,065] — information from …. [89,080] personal insolvency agreements …. [83,415], [83,415.5], [83,415.10] record of proceedings …. [84,140], [84,140.10] refusal to give …. [84,310] standard of proof …. [80,780] transcripts — admissibility …. [84,140], [84,140.10] — fees …. [89,845] Examinations

abuse of process, as …. [81,005.45] adjournments …. [80,770.20], [81,550.20] answering questions …. [81,550.40] bankrupt …. [81,550] — affidavit in support …. [91,260] — application for summons …. [81,550.10], [91,260] discharge …. [91,285] form …. [91,260], [94,050] hearing …. [91,265] — failure to attend …. [81,550.25], [81,550.75], [91,280] — form of summons …. [91,270], [94,045] — service of summons …. [81,550.15], [91,275] — setting aside, discharge or adjournment …. [81,550.20] books, production of …. [81,550.35] conduct money …. [81,550.65] control of debtor’s property before sequestration — abuse of process, as …. [81,005.45] — affidavit in support …. [91,230] — application for summons …. [91,230] discharge …. [91,250] hearing …. [91,235] — form of summons …. [91,240], [94,045] — service of summons …. [81,550.15], [91,245] — trustee’s expenses …. [86,540] costs …. [80,765.60], [81,550.60] debtor following personal insolvency agreement …. [81,550], [81,550.5], [83,490], [90,245] — application for summons …. [81,550.10] — costs …. [80,765.60] — service of summons …. [81,550.15] — setting aside, discharge or adjournment …. [81,550.20] evasion …. [84,315], [84,315.10]

evidence …. [81,550.55], [81,550.70] examinable persons, of — application for summons …. [81,550.10] — setting aside, discharge or adjournment …. [81,550.20] examinable persons following personal insolvency agreement …. [81,550], [81,550.5], [83,490], [90,245] — application for summons …. [81,550], [91,295] discharge …. [91,315] form …. [91,295], [94,050] hearing …. [91,300] — conduct money …. [91,320] — definition …. [80,120] — form of summons …. [91,305], [94,045] — service of summons …. [91,550.15], [91,310] — setting aside, discharge or adjournment …. [81,550.20] — witness expenses …. [91,320] failure to attend …. [81,550.25], [84,300], [84,300.5], [84,300.10], [84,305], [91,280] — power to issue warrant …. [81,531.25], [81,550.25], [84,305.10], [94,085] hearing …. [80,755], [81,550.30] magistrates — conducted by …. [81,550.30] offences in relation to …. [84,320] — protections and immunities …. [84,735] notice of appearance …. [91,070], [94,020] offences …. [81,550.75] prevarication …. [84,315] privilege — legal professional …. [81,550.50] — self-incrimination, against …. [81,531.35], [81,550.45] refusal to be sworn …. [84,310]

refusal to give evidence …. [84,310] registrars — conducted by …. [81,550.30] offences in relation to …. [84,320] — protections and immunities …. [84,735] transcripts, admissibility of …. [84,140], [84,140.10] witnesses …. [80,775] Family assistance payments income, whether …. [87,260D] Family Court bankruptcy jurisdiction …. [80,735], [80,785] definition …. [80,120] transfer of proceedings from Federal Court …. [80,790] Family Court of Western Australia bankruptcy jurisdiction …. [80,785], [80,793] transfer of proceedings from Federal Court …. [80,793] Family law see also Child support payments; Marriage settlements; Matrimonial property; Spousal maintenance Bankruptcy and Family Law Legislation Amendment Act, effect …. [80,785.5] bankruptcy law, interaction with …. [80,785.5], [81,900.30] creditors’ petitions — secured creditors, by …. [80,975.120] maintenance agreements and orders — avoidance of preferences …. [81,895] second or subsequent bankruptcy …. [81,245], [81,247] — bankruptcy notice …. [80,910] — debts provable in bankruptcy …. [81,650] — final order, as …. [80,910.75] — notice to sheriff or registrar by creditor …. [81,875.20] — payment before commencement of bankruptcy …. [81,900],

[81,900.20] — personal insolvency agreements, effect …. [83,170], [83,170.5] — property available for payment of debts …. [81,870], [81,870.15] property divisible among creditors — declaration and adjustment of property rights on insolvent spouse …. [81,860.11] — subsequent orders, effect …. [81,860.10] — substantive rights of third party …. [81,860.11] transfers to defeat creditors …. [81,890.37] Farmers’ debt assistance administration of deceased estate in bankruptcy …. [83,935] — intervention by relevant authority …. [83,940] debtor’s petition against partnership — intervention by relevant authority …. [83,940] proclamation of law of state or territory …. [83,920] — notice of application to stay provisions …. [83,925] stay of bankruptcy proceedings …. [83,935] Federal Court address …. [80,915.135] associated jurisdiction …. [82,310.4] bankruptcy jurisdiction …. [80,735], [80,735.5], [80,735.10] definition …. [80,120] locus standi …. [84,715], [84,715.5] Registrars — appeals from …. [80,760.10] — powers …. [80,760.5], [91,055], [91,710] transfer of proceedings to Family Court …. [80,790] — Western Australia …. [80,793] Federal Court (Bankruptcy) Rules 2005 application …. [91,015] commencement …. [91,010] expressions used in Bankruptcy Act …. [91,025]

forms …. [91,030] — see also Forms interpretation …. [91,020] notes …. [91,800] schedules …. [91,705]-[91,800] title …. [91,005] Federal Magistrates Court bankruptcy jurisdiction …. [80,735], [80,735.5], [80,735.10] Fees see also Charges (Pecuniary) application for registration as trustee …. [82,375.8], [82,383K], [89,932] debt agreement administrator — refund on cessation of registration …. [82,885P] documents filed by Inspector-General or Official Receiver …. [89,775] legislative instruments, determination under …. [84,795] notes and transcripts of evidence …. [84,140], [89,845] payment …. [89,830] remission by Inspector-General …. [89,880A], [89,880B] review by AAT …. [89,880B] waiver by Inspector-General …. [89,880A], [89,880B] Fiduciary duties breach — claim provable in bankruptcy …. [81,650.25] committee of inspection …. [81,355.5] trustee — realization of property …. [82,000.20] Financial affairs companies …. [80,155] natural persons …. [80,157] partnerships …. [80,160] trusts …. [80,165] Fines

see also Penalties debts provable in bankruptcy …. [81,650.6], [81,650.75] vesting of property on bankruptcy …. [81,240] Foreign proceedings Cross-Border Insolvency Act, under see Cross-Border Insolvency Act (2008) (Cth) definition …. [91,595] Foreign representative application for recognition of proceedings …. [91,600], [94,010], [94,015] definition …. [91,595] Forms Bankruptcy Rules …. [91,030] — administrator’s petition …. [94,075] — application …. [94,010] — apprehension warrant …. [94,085] — arrest warrant …. [94,080] — consent to act as designated person …. [94,090] — creditors’ petition …. [94,030] administration of deceased person’s estate …. [94,070] — interim application …. [94,015] — notice of appearance …. [94,020] — notice of dismissal or withdrawal of application for recognition of foreign proceeding …. [94,105] — notice of filing of application for recognition of foreign proceeding …. [94,095] — notice of filing of application to modify or terminate order for recognition or other relief …. [94,110] — notice of making order under Cross-Border Insolvency Act …. [94,100] — notice stating grounds of opposition to application, interim application or petition …. [94,025] — notice to creditors …. [94,065] annulment application, for …. [94,055]

application to review Registrar’s decision for sequestration order, for …. [94,070] — referral to debtor’s petition …. [94,040] — sequestration order …. [94,035] — summons for examination …. [94,045] application to examine relevant person or examinable person …. [94,050] Insolvency and Trustee Service — application for change of conditions as practising registered trustee …. [93,440] — application for registration as trustee …. [93,435] — application for surrender of registration as a Registered Debt Agreement Administrator …. [93,525] — application to change or remove conditions on registration of Debt Agreement Administrator …. [93,520] — consent to act and trustee declaration …. [93,445] — controlling trustee authority and trustee declaration …. [93,450] — debt agreement statement of affairs and proposal …. [93,470] — debtor’s petition …. [93,415] — declaration of intention to present debtor’s petition …. [93,410] — interest charge payment …. [93,460] — notice of completion, termination or variation …. [93,480] — notice of demand …. [93,430] — notice of special resolution …. [93,475] — proof of debt …. [93,425] — realization charge payment …. [93,465] request for refund …. [93,500] — statement of affairs …. [93,400] administration of deceased person’s estate …. [93,405] — statement of claim and proxy for meeting of creditors …. [93,420] — supervised account notice …. [93,490] revocation …. [93,495]

— supervised account notice determination …. [93,485] — trustee’s account of receipts and payments …. [93,395] Fraud meaning …. [82,275.10] Fraudulent dispositions see Transfers to defeat creditors Fringe benefits tax contributions by bankrupt …. [82,113L.20], [87,225], [90,145] Fringe Benefits Tax Assessment Act 1986 (Cth) modifications …. [87,225], [90,145] Frozen debt definition …. [80,120], [81,095.5], [82,865] Gambling bankrupt, by …. [84,365] cause of bankruptcy, whether …. [84,365.5] Goods and Services Tax (GST) remuneration of trustee …. [82,465] Governor-General arrangements concerning magistrates …. [80,440] regulations — power to make …. [84,790], [85,370] Hire-purchase agreements void provisions …. [84,705] Income of bankrupt see Contributions by bankrupt Indemnities Commonwealth officers …. [80,465] controlling trustee over debtor’s property …. [83,083AC] Inspector-General …. [80,465] Official Receiver …. [80,465] Official Trustee …. [80,450.5] Registrar …. [80,465] trustees …. [80,450.5], [82,025] Indexation

overview …. [84,723] Infringement notices certificates as evidence …. [89,300] contents …. [89,255] definition …. [89,245] effect of payment …. [89,290] issue …. [89,250] payment …. [89,265] — cheque, by …. [89,285] — extension of time …. [89,270] — table of amounts …. [84,403] refund of penalty …. [89,285] scheme under Bankruptcy Act …. [89,240] service …. [89,260] withdrawal …. [89,275] — notice …. [89,280] Injunctions see also Mareva injunctions power to grant …. [80,750], [80,750.10] supervised account regime, under — discharge …. [82,113ZIL] — interim injunctions …. [82,113ZIK] — limits on grants …. [82,113ZIM] — restraining injunctions …. [82,113ZIJ] Inquiries see also Investigations; Investigations of bankrupt Inspector-General, by …. [80,395] Insolvency admission …. [80,910.165] definition …. [80,120.50], [81,895.30] Insolvency and Trustee Service forms see Forms

Insolvency Practitioners Association of Australia (IPAA) registration of trustees — role …. [87,875B], [88,120] Inspection of documents certificate of resolution at meeting of creditors …. [81,315Z] certificates for infringement notices …. [89,300] compositions with creditors …. [86,635] deceased estates, administration in bankruptcy — statement of affairs …. [83,760], [88,640], [89,880] examination of bankrupt and examinable person [81,550], [81,550.50], [83,565.5], [90,245] fees …. [89,880] NPII records …. [89,060] personal insolvency agreements …. [83,420], [89,880] schemes of arrangement …. [86,635] statement of affairs — creditors’ petition …. [81,025] — debtor’s petition …. [81,175], [83,077B] joint debtors, by …. [81,185] partnership, against …. [81,180G] Inspector-General in Bankruptcy administration of Charges Acts …. [84,505] administrators of debt agreements — approval or refusal of registration …. [82,885C] — guidelines on powers relating to …. [82,885Q] — ineligibility declarations …. [82,885M] appointment …. [80,420] — acting appointment …. [80,425] Australian Financial Security Authority, accountable authority of …. [80,400] bills of costs, review …. [82,495], [88,024], [88,030]-[88,033] Common Investment Fund, Equalization Account

— duties regarding …. [80,555], [80,560.10] contributions by bankrupt — review of assessment …. [82,113ZA] decision …. [82,113ZD], [82,113ZD.5] duty to notify bankrupt and trustee …. [82,113ZE] further information …. [82,113ZC] review by AAT …. [82,113ZF] timing …. [82,113ZA.5] debt agreement administration trust account — information about …. [82,885LA] delegation by …. [80,390] directions — non-compliance with …. [88,039] documents to, methods …. [89,765] establishment of office …. [80,390] fees — filing, for …. [89,775] — remission or waiver …. [89,880A], [89,880B] indemnity by Commonwealth …. [80,465] liability …. [80,465] meeting of creditors, attendance …. [80,395] notification of certain events by trustee …. [82,420] NPII — access control …. [89,075] — entry of trustee’s particulars …. [82,383C] — immunity from defamation …. [89,070] — operation …. [88,950] objections to automatic discharge — review …. [82,187.5]-[82,187.10] AAT, referral to …. [82,200] decision …. [82,195], [82,195.5] notification of decision …. [82,198]

request for information …. [82,193] powers and functions …. [80,390], [80,395], [88,036] — Official Trustee’s, exercise …. [80,445] reports by, protection …. [84,740] supervised account regime — review …. [82,113ZIO] decision …. [82,113ZIR] duty to notify bankrupt and trustee …. [82,113ZIS] further information …. [82,113ZIP] trustees, functions in relation to — registration …. [82,383C] change in particulars …. [87,850] return of on termination …. [83,383J] — remuneration …. [82,495], [87,985]-[87,995] repayments of excess …. [88,045] Insurance property divisible among creditors, whether — life or endowment policies …. [81,860.13] third party liability …. [81,865], [81,865.3] — declaratory relief …. [81,865.5] trustees, of …. [87,820] Interest accruing after bankruptcy notice — provable in bankruptcy …. [81,650], [81,650.45], [81,680.5], [81,685.5], [81,775.10] apportionment of periodic payments — accruing before date of bankruptcy …. [81,680] — security realised before or after bankruptcy …. [81,685] bankruptcy notices …. [80,915.46], [80,915.75], [80,915.147] Common Investment Fund …. [80,543], [80,555] — payable, when …. [80,560] — prescribed rate …. [86,165]

— taxation …. [80,540] post-judgment calculation …. [80,915.147] Interest charges see Charges (Pecuniary) Interim applications opposition notice …. [81,015.70], [91,075], [94,025] Inventory trustee, of …. [89,770] Investigations see also Inquiries Inspector-General, by …. [80,395] Investigations of bankrupt see also Inquiries access to premises and books by Official Receiver …. [81,523], [81,523.10] notice to obtain information and evidence …. [81,531] — allowances and expenses …. [81,532]-[81,534] advance on payment …. [81,533], [81,533.10] indexation …. [84,723] payment out of bankrupt’s estate …. [81,534] — application to set aside …. [81,531.20] — arrest for non-attendance …. [84,342] — attendance …. [81,531.25] — failure to attend …. [81,531.25], [81,531.40], [84,341], [84,341.5] — false, misleading or omitted particulars …. [84,339], [83,339.5] — form and content …. [81,531.10] — privilege against self-incrimination …. [81,531.35] — procedure for examination …. [81,531.30] — service …. [81,531.15] prevarication or evasion in evidence …. [84,344], [84,344.5] production of books of associated entity …. [81,525], [81,525.20] — non-compliance …. [84,330], [84,330.5] refusal to be sworn or give evidence …. [84,343]

trustee, by …. [80,460] Joint bankruptcy definition …. [81,305] meeting of creditors …. [81,315ZE] Joint debtors actions by trustee of personal insolvency agreement …. [83,490], [88,465], [90,245] bankruptcy notice to …. [80,915.120] bankruptcy of partnership …. [81,795.10], [81,795.15] consolidation of proceedings against …. [81,020], [81,020.10] creditor’s petition against …. [80,985], [80,985.5] debtor’s petition by …. [81,185], [86,560] misnomer …. [80,910.147] personal insolvency agreements …. [83,025] — modification of Pt X …. [88,405], [90,245] statement of affairs …. [81,025] Joint tenancy charge over property in deceased estate …. [83,790], [83,790.5] severance on bankruptcy …. [81,240.40], [81,795.25] Judges eligible judges — declaration as …. [81,978] — definition …. [80,120] — protection and immunity …. [81,978] — warrants for seizure of property …. [81,980], [84,330], [94,105] Judgments accompanying bankruptcy notice …. [80,910.63], [80,915.140], [80,915.145] appeals against …. [80,915.195] creditors’ petition, whether prerequisite for …. [80,975.60] “final judgment or order”, meaning …. [80,910.60]-[80,910.75], [80,910.175]-[80,910.190]

stay …. [80,910.90], [81,250.60] Landlord and tenant agreements for lease — void provisions …. [84,705] leases — disclaimer of onerous lease …. [81,995], [87,170] — void provisions …. [84,705] Leases see Landlord and tenant Leave to be heard non-party, by …. [91,065], [94,015] Legal personal representatives deceased estates, administration in bankruptcy — liability …. [83,805] — notice …. [83,760] — service of creditors’ petition …. [83,750] — statement of affairs …. [83,760], [83,760.5] Legal practitioners controlling trustee, as …. [83,075] costs — claim …. [91,570] — scale of 20/08/1992 - 30/07/1997 …. [120,050], [120,100] 12/10/1987 - 19/08/1992 …. [120,150], [120,200] 06/03/1984 - 11/10/1987 …. [120,250] — short bill …. [91,565] — work done and services performed, allowable for 01/01/2014 - present …. [121,040] 01/08/2011 - 31/12/2013 …. [121,035] 01/08/2006 - 31/07/2011 …. [121,030] 14/11/2001 - 31/07/2006 …. [121,025] 15/07/1998 - 13/11/2001 …. [121,020] 19/04/1993 - 14/07/1998 …. [121,015]

17/04/1989 - 18/04/1993 …. [121,010] 08/05/1987 - 16/04/1989 …. [121,005] 08/11/1983 - 07/05/1987 …. [121,000] personal insolvency agreements — authority to call meeting of creditors …. [83,075] — authority to control debtor’s property …. [83,075] protections and immunities …. [84,735] Legal proceedings see also Bankruptcy courts court of competent jurisdiction, in …. [84,375.10] court of summary jurisdiction, in …. [84,375.5] firm name, under …. [84,750] stay see Stay of legal proceedings trial of offences …. [84,375] trustees of personal insolvency agreements — proceedings bought by or against …. [83,375] Licences void provisions …. [84,705] Liens controlling trustee over debtor’s property …. [83,083AC] void provisions …. [84,710], [84,710.5] Limitation period creditors’ petition …. [80,970.11] debts provable in bankruptcy …. [81,650.50] property available for payment of debts — claims by trustees …. [81,895.140], [81,920] Locus standi applications …. [84,715], [84,715.5] Magistrates appeals from, nature of …. [83,390.10] examinations held before …. [81,550.30] — offences in relation to …. [84,320]

protections and immunities …. [84,735] State and Territory — exercise of functions …. [80,440] Mareva injunctions see also Injunctions asset protection order, nature of …. [91,105.5] Marriage settlements see also Family Law; Matrimonial property abuse of process in …. [82,310.7] avoidance …. [81,885], [81,885.30] — recovery of bankrupt’s contribution …. [82,113ZQ]-[82,113ZT] — second or subsequent bankruptcy …. [81,245], [81,247] Matrimonial proceedings see also Family Law abuse of process …. [82,310.7] Bankruptcy and Family Law Legislation Amendment Act, effect …. [80,785.5] bankruptcy jurisdiction, under …. [80,785] Matrimonial property see also Family Law property divisible among creditors — declaration and adjustment of insolvent spouse’s rights …. [81,860.11] — subsequent orders, effect …. [81,860.10] — third party, substantive rights of …. [81,860.11] Meetings of creditors see also Committees of inspection act of bankruptcy at …. [80,910] adjournment …. [81,315Y], [83,130] — inconvenience …. [81,315Q] — quorum not met …. [81,315N] agenda — notice of meeting …. [81,315G], [90,045]

attendance record …. [81,315J], [81,315K] attorneys — announcement …. [81,315M], [86,630] — notice of meeting …. [81,315F] bankrupt’s duty to attend …. [81,520], [81,520.30] business relevant to bankruptcy …. [81,315W] committee of inspection — appointment …. [81,315V] compositions with creditors …. [81,405.20], [81,425], [81,425.5][81,425.15], [86,640], [86,645], [90,045] convenience motion …. [81,315Q] convening …. [81,315] — act of bankruptcy, whether …. [80,910.166] Inspector-General, attendance by …. [80,395] joint bankruptcy …. [81,315ZE] — definition …. [81,305] meeting, definition …. [81,305] minutes — evidence of proceedings, as …. [84,150] minutes secretary — appointment …. [81,315L] — definition …. [81,305] — duties …. [81,315Z] modifications under s 76A …. [90,045] motions …. [81,315T], [81,315ZD], [90,045] next meeting …. [81,315X] notice …. [90,045] — agenda …. [81,315G], [90,045] — attorney, voting by …. [81,315F] — contents …. [81,315B], [90,045] — creditors, to …. [81,315A] — proxy, voting by …. [81,315E], [90,045]

— publication …. [90,045] — statement as to amount of debt …. [81,315D] — telephone conferencing …. [81,315C] opening of meeting …. [81,315K] personal insolvency agreements — adjournment …. [83,130], [83,130.5] — authority to call …. [83,075], [83,075.5]-[83,075.30] — calling of subsequent …. [83,395], [83,400] — chairperson challenge to decision …. [83,150.5] duty …. [83,125.5] election …. [83,125] — controlling trustees and trustees modification of Pt VIII …. [83,200], [88,435] — debtor to attend …. [83,120] — debtor’s petition required …. [83,165], [83,165.30] — debtor’s statement of affairs …. [83,075] false, misleading or omitted particulars …. [83,175], [84,337] — documents …. [88,420] — evidentiary provisions …. [83,415], [83,415.5], [83,415.10] — information regarding special resolutions and NPII …. [88,430] — “meeting”, meaning …. [83,125.15] — meeting place, convenience …. [83,125.30] — minutes …. [83,160] — procedure for calling and holding …. [83,122], [83,122.5], [88,425], [90,245] — quorum …. [83,155], [83,155.10] — release of debtor’s property …. [83,165], [83,165.5] — resolutions …. [83,165], [83,165.5]-[83.165.40] — tabling of statement of affairs and declaration of relationships …. [83,115A] — termination …. [83,390B], [83,390B.5]

— time for holding …. [83,115] extension …. [80,770.55], [83,115.10] — variation …. [83,385A] — voting disputed claim …. [83,150], [83,150.5] disputed debt …. [83,150.10] entitlement …. [83,135], [83,135.5]-[83,135.20] manner …. [83,140], [83,140.5], [83,145], [83,145.5]-[83,145.35] particulars of debt required …. [83,135.10] proxy, by …. [83,140], [83,140.5]-[83,140.10] President — definition …. [81,305] — election of …. [81,315P] presumption of due process …. [84,155] procedure …. [81,315K]-[81,315X] — substantial compliance …. [81,315ZF] quorum …. [81,315N] resolutions — special resolutions …. [80,120], [83,415.5] — without meeting …. [81,315ZBA] statement of affairs, tabling …. [81,315R], [90,045] statements and questions …. [81,315S], [90,045] telephone conferencing …. [81,315C], [81,315H] trustee — appointment in place of Official Trustee …. [82,395] — remuneration …. [81,315U], [90,045] — representative …. [81,310] voting — entitlement …. [81,315ZA], [81,315ZA.5] — false claims about …. [84,290] — manner …. [81,315ZB], [90,045] — proxy, by see Proxies

Minister appointment of Inspector-General …. [80,420] — acting appointment …. [80,425] appointment of Official Receiver …. [80,420] — acting appointment …. [80,425] approval for Commonwealth to pay allowances and expenses …. [84,725] delegation …. [80,390] legislative instruments for fees, power to make …. [84,795] Minors Bankruptcy Act, application of …. [80,275] Misleading conduct bankrupt, by …. [82,160], [82,160.5] ground of objection to discharge, as …. [82,160], [82,160.5] Mortgages discharge by trustee …. [82,010] holders as secured creditors …. [80,120.25] void provisions …. [84,710], [84,710.5] Motor vehicles property divisible among creditors …. [81,860], [87,005] Name notification of changes …. [81,545], [81,545.5]-[81,545.20] National Personal Insolvency Index (NPII) access control …. [89,075] application for exclusion of information …. [89,005] — AAT review …. [89,010] contents …. [89,000], [90,345] copy of extract as evidence …. [89,065] establishment …. [88,950] finalisation of estate administration …. [88,055] immunity from defamation …. [89,070] information from, as evidence …. [89,080] inspection …. [89,060]

maintenance …. [88,950] registration of trustees …. [82,383C] Natural persons associated entities …. [80,120], [80,135] financial affairs …. [80,157] order relating to property …. [82,093] — increase in value …. [82,098] related entities …. [80,120] Notice of appearance form …. [94,020] Notice of demand form …. [93,430] Notice of special resolution form …. [93,475] Notices annulment of administration of deceased estate in bankruptcy …. [91,350], [94,055] annulment of bankruptcy …. [91,350], [94,055] appointment of trustee on sequestration order …. [91,165] bankruptcy see Bankruptcy notices compositions with creditors — setting aside or terminating …. [91,475], [94,065] contributions by bankrupt — particulars …. [82,113W] debt agreements — account-freezing notices …. [82,885LB] judicial enforcement …. [82,885LD] protection of bank actions …. [82,885LE] setting aside by court …. [82,885LC] — terminating or voiding …. [91,435], [94,065] discharge of bankruptcy …. [82,168] — objections …. [82,165.5], [82,168]

effective date …. [82,168.10] form …. [82,170], [82,170.5]-[82,170.20] disclaimer of onerous property …. [87,170] employment — cessation of employment …. [87,400] — new employment …. [87,400] Gazette publication — evidence …. [84,145] grounds for opposition of application, interim application or petition …. [81,015.70], [91,075], [94,025] infringement see Infringement notices investigation by Official Receiver …. [81,531], [81,531.5] — application to set aside …. [81,531.20] — examination procedure …. [81,531.30] — failure to attend …. [81,531.25], [81,531.40], [84,341], [84,341.5] — failure to provide information …. [84,339], [84,339.5] — form and content …. [81,531.10] — privilege against self-incrimination …. [81,531.35] — service …. [81,531.15] meeting of creditors see Meetings of creditors offshore information see Offshore information notices personal insolvency agreements — execution …. [83,370] — set aside, terminated or varied …. [83,410], [91,475], [94,065] recognition of foreign proceedings, application for …. [91,615], [94,095] recovery from third parties …. [82,113ZL], [87,350] — cessation of employment …. [87,400] — commencement of new employment …. [87,400] remuneration of trustees …. [88,000] — approval notice …. [88,006] — claim notice …. [88,009] — initial remuneration notice …. [88,003]

review of sequestration order, application for …. [91,370], [94,060] scheme of arrangement — setting aside or terminating …. [91,475], [94,065] service …. [84,760], [84,760.5] — out of jurisdiction …. [84,760.20] — personal service …. [84,760.6] — substituted service …. [84,760.10], [84,760.15] superannuation accounts, freezing of see Superannuation accountfreezing notices Oaths proof of debts — trustee’s powers …. [81,770] Offences administrators of debt agreements …. [82,885N] bankrupt’s failure to assist trustee …. [81,520.60] books of account, failure to keep …. [84,360], [84,360.5] — defence …. [84,360.10] — period of bankruptcy, for …. [84,400] charging of property with intent to defraud creditors …. [84,335], [84,335.5] — “intent to defraud creditors”, meaning …. [84,335.5] concealment of property with intent to defraud creditors …. [84,275] — “property”, meaning …. [84,275.15] — “property of the bankrupt”, meaning …. [84,275.10] contributions by bankrupt — false, misleading or omitted particulars on income …. [84,339], [84,339.5] Criminal Code, application of …. [80,278] dealing with seized property …. [84,275] — “property”, meaning …. [84,275.15] debt agreement, non-disclosure …. [84,355] default by bankrupts …. [84,325], [84,325.5]-[84,325.15]

default by debtor …. [84,345], [84,345.5] discharge, effect …. [84,385] disposing of property with intent to defraud creditors …. [84,335], [84,335.5] examinations — conducted by Magistrates or Registrars, in relation to …. [84,320] — failure to attend …. [81,550.75], [84,300], [84,300.5], [84,300.10] power to issue warrant …. [81,531.25], [84,305.10], [91,535], [94,085] — prevarication orevasion …. [84,315], [84,315.10] — refusal to be sworn …. [84,310] — refusal to give evidence …. [84,310] failure to comply with notice …. [81,550.75], [84,339], [84,339.5] failure to provide information …. [84,339], [84,339.5] false affidavits …. [84,280] false claims about creditor’s voting entitlement …. [84,290] false declarations …. [84,337] fraud or dishonesty by trustee — notification to Inspector-General …. [82,420] gambling or hazardous speculations …. [84,365], [84,365.5] investigation of bankrupt — default in production of books for associated entity …. [84,330] — false, misleading or omitted particulars …. [84,339] — notice to obtain information and evidence failure to attend …. [81,531.25], [81,531.40], [84,341], [84,341.5] prevarication or evasion during evidence …. [84,344], [84,344.5] — refusal to be sworn or give evidence …. [84,343] leaving Australia with intent to defeat creditors …. [84,370] — consent of trustee …. [84,370.5], [84,370.10] — request, fee for …. [86,800] misleading proof of debts …. [84,285.5] name and contact details, failure to notify of change …. [81,545] personal insolvency agreements …. [84,345], [84,345.5]

— failure by trustee to execute …. [83,370] — knowingly acting under set aside agreement …. [84,390] — statement of affairs, false declarations …. [84,337] receiving property with intent to defraud creditors …. [84,275] refusal to be sworn …. [84,310] refusal to give evidence …. [84,310] statement of affairs — false declarations …. [84,337], [83,337.5] transactions by undischarged bankrupts without disclosure …. [84,355], [84,355.5] trial …. [84,375] — court of competent jurisdiction, in …. [84,375.10] — court of summary jurisdiction …. [84,375.5] warrant for seizure of connected property — hindrance …. [84,330], [84.330.5] Official Receiver in Bankruptcy application for directions on debt agreement …. [82,865W] appointment …. [80,420] — acting …. [80,425] — new administrator of debt agreement …. [82,865ZC] audit of accounts and records …. [84,780] costs and expenses …. [82,478] debt agreement proposals, processing …. [82,865EA] — acceptance for …. [82,865E] cancellation …. [82,865ED] — termination proposal …. [82,865NA] debtor’s petition — acceptance or rejection …. [81,175], [81,175.10] declaration to present …. [81,085] information to debtor …. [81,090] referral to court …. [91,200] — joint debtors, by …. [81,185]

— partnerships, by …. [81,180D] deceased estates, administration in bankruptcy — copies of petitions …. [83,770], [88,640A] documents filed by, fee …. [89,775] documents to, methods …. [89,765] establishment of office …. [80,415] indemnity by Commonwealth …. [80,465] information from trustee …. [82,555] investigation of bankrupt — access to books and premises …. [81,523] legal professional privilege, effect on …. [81,523.10] liability …. [80,465] NPII — application for inspection …. [89,060] — operation …. [88,950] personal insolvency agreements — notification of termination …. [88,455] powers and functions …. [20,415] — officers’ distinct from …. [80,415.5] recovery from party to transaction void against trustee …. [82,113ZQ][82,113ZT] recovery from third parties …. [82,113ZJ.5]-[82,113ZP] reports by, protection …. [84,740] request for information and evidence by …. [81,531], [81,531.5][81,531.40], [84,341] — arrest for non-compliance …. [81,531.25], [84,342] statement of affairs, power to obtain …. [81,025.20], [81,531A] superannuation account, consent for transactions …. [81,925H] superannuation account-freezing notice, duties as to — copy to trustee …. [81,925G] — issue …. [81,925E] — revocation …. [81,925F]

Official Trustee in Bankruptcy see also Common Investment Fund appointment …. [80,445.5] — registered trustee in place of …. [82,395] objection to …. [82,395.5], [91,390] order, no requirement for …. [82,410.5] vacancy filled by …. [82,410] vacancy in office …. [82,405.5] audit of accounts and records …. [84,780] Common Investment Fund, role in …. [80,530], [80,540] Commonwealth Authorities and Companies Act 1997, whether applicable …. [80,447] continuance of former body …. [80,445] control of debtor’s property before sequestration — expenses …. [86,540] controlling trustee’s duties after ineligibility …. [88,215] documents to, methods …. [89,765] duties …. [80,450.5], [80,455] fees payable to …. [88,000] indemnity by Commonwealth …. [80,450] interim appointment as trustee of personal insolvency agreement …. [83,380], [83,380.5] liability …. [80,450] powers and functions — Inspector-General may exercise …. [80,445] Public Governance, Performance and Accountability Act 2013 not applicable to …. [80,447] reimbursement for expenses …. [89,840] release …. [82,815] remuneration …. [82,475], [88,000] — calculation …. [82,475.5] — interim …. [89,935]

replacement of debt agreement administrator …. [82,865ZB] seals …. [80,445] unclaimed dividends or money …. [84,040], [88,795] Offshore information notices extension of notice period …. [81,585] issue …. [81,580] local investigative notice, combined with …. [81,600] local investigative powers under s 77C, relationship with …. [81,605] non-compliance …. [81,630] variation …. [81,590] withdrawal …. [81,595] Order of payment of debts employee of bankrupt — maximum amount …. [86,950] equal ranking …. [81,780], [81,780.5] — priority classes …. [81,785] first priority debts …. [90,095] indemnity for costs …. [81,785], [81,785.15] joint estates …. [81,795], [81,795.5] — joint tenancy …. [81,795.25] — partnerships …. [81,795.10]-[81,795.15] priority payments …. [81,785], [81,785.5], [86,945], [90,095] — child support payments …. [81,875], [81,785.20] proceeds of crime orders, effect …. [81,820]-[81,830] winding-up of corporations …. [81,795.5] Orders annulment of bankruptcy — entry and service …. [91,360] charging see Charging orders discharge …. [80,800] discretion of court …. [80,800.10] enforcement …. [80,795]

“final”, meaning …. [80,910.60] forfeiture orders …. [80,185] instalment, effect …. [80,910.95] pecuniary penalty order — definition …. [80,120] — satisfaction …. [80,185] proceeds of crime, for see Proceeds of crime orders property of entity controlled by bankrupt, for see Entities controlled by bankrupt recovery from third parties, for see Recovery from third parties rescission …. [80,800] restraining orders …. [80,185] sequestration, for see Sequestration orders stay pending appeal …. [80,800.12] suspension …. [80,800] Overseas travel restrictions court permission required …. [81,520.15], [81,520.20], [82,640.35], [84,114.1], [84,370.15] — request, fee for …. [86,800] Partnerships actions by bankrupt’s partners …. [81,255] actions by debtor partner’s trustee of personal insolvency agreement …. [81,255], [83,490], [88,465], [90,245] assignment of bankrupt partner’s shares to trustee …. [81,795.20] associated entities …. [80,140] bankruptcy of joint debtors, as …. [81,795.10] consolidation of proceedings against …. [81,020], [81,020.10] creditors’ petition against …. [80,980], [80,980.5]-[80,980.20] debtor’s petition against — acceptance by Official Receiver …. [81,180D] — bankruptcy on acceptance …. [81,180E] — details from petitioning partner …. [88,160]

— farmers’ debt assistance, intervention by relevant authority …. [83,940] — filing of trustee’s consent …. [86,565] — information to petitioning partners …. [81,180B], [86,560] — persons entitled to present …. [81,180A] — presentation to Official Receiver …. [81,180B] — reference to court …. [81,180C], [91,200] form …. [94,040] notice of hearing …. [86,570] — statement of affairs …. [81,180B] inspection …. [81,180G] debtor’s petition presented by …. [80,275] financial affairs …. [80,160] limited partnerships — application of Bankruptcy Act …. [80,275] registered partnerships — sequestration order against …. [80,275] representation …. [84,755], [84,755.1] Patents trustee’s powers, limitations on …. [82,020] Penalties amounts under infringement notices …. [84,403] breach of conditions regarding consent to leave Australia …. [84,370] compositions with creditors, approval …. [84,385] concealment of property with intent to defraud creditors …. [84,275] contributions by bankrupt — false, misleading or omitted particulars …. [84,339] — unpaid, discharged bankrupt to notify where …. [87,300] dealings with seized property …. [84,275] debts provable in bankruptcy …. [81,650.6], [81,650.75] deceased estates, administration in bankruptcy — failure to make statement of affairs …. [83,760] default by bankrupt …. [84,325]

default by debtor …. [84,325] disposing of property with intent to defraud creditors …. [84,335] examinations — failure to attend …. [84,300], [84,305] power to issue warrant …. [81,531.25], [94,085] — prevarication or evasion during …. [84,315] failure to keep proper books of account …. [84,360] failure to notify of change or cessation of employment …. [87,400] false affidavits …. [84,280] false claims about creditor’s voting entitlement …. [84,290] false declarations …. [84,275] gambling or hazardous speculation …. [84,365] infringement notices, under …. [84,403], [89,245] investigations of bankrupt — default in production of books of associated entity …. [84,330] — false, misleading or omitted particulars …. [84,339] — notice to obtain information or evidence failure to attend …. [84,341] prevarication or evasion in evidence …. [84,344] refusal to give evidence …. [84,343] receiving property with intent to defraud creditors …. [84,275] refusal to be sworn …. [84,310] refusal to produce documents …. [84,310] statement of affairs — false declarations …. [84,337] — false, misleading or omitted particulars …. [84,339] transaction by undischarged bankrupt without disclosure …. [84,355] warrant for seizure of connected property — hindrance …. [84,330] Personal injuries action by debtor following personal insolvency agreement …. [81,250], [83,490], [88,465], [90,245]

action by debtor subsequently bankrupt …. [81,250], [81,250.25] damages — property divisible among creditors …. [81,860.15] Personal insolvency agreements actions regarding joint contracts …. [83,490], [88,465] acts of bankruptcy — failure to execute …. [80,910] administration of property provisions, modifications to …. [83,490], [88,465] after-acquired property, exclusion …. [83,165.5] application to declare void …. [81,875.15] authority to control property …. [83,075] — documents …. [88,415] — invalid authority …. [83,075.25] binding on creditors …. [83,480] certificates — discharge of obligations …. [83,495] — realization of divisible property and non-availability of dividend …. [88,470] committee of inspection …. [81,345]-[81,355], [83,490], [88,465], [90,245] completion notice …. [93,480] consent from trustee or solicitor …. [88,415] control of debtor’s property — acts to bind subsequent trustees …. [83,195] — charge over controlled property …. [83,083] — court orders …. [83,082] — duties of debtor …. [83,080] — Pt V provisions apply as modified …. [83,205], [90,245] — release by court …. [83,190], [83,190.5] controlling trustee — authority to call meeting of creditors …. [83,075], [83,075.5]-

[83,075.30] — changing …. [83,105] — duties and powers …. [83,095] — eligibility …. [83,345] — filling vacancy after execution of agreement …. [83,380], [83,380.5] — indemnity …. [83,083AC] — modification of Pt VIII …. [83,200], [88,435] — nomination or appointment where office vacant …. [83,350] — report and declaration …. [83,085], [83,085.10] — statement about possible resolutions …. [83,090] creditors’ petitions — adjournment of hearing …. [83,080AAA], [83,180], [83,180.5] debtor’s duties and obligations, provisions as modified …. [83,205] debtor’s statement of affairs …. [83,075] — false, misleading or omitting particulars …. [80,175] — inspection by creditors …. [83,077B] — prerequisite to authority …. [83,075] — tabling …. [83,115A] declaration as to debtor’s relationships …. [83,085] — tabling …. [83,115A] definition …. [80,120] discovery of bankrupt’s property — modifications to provisions …. [83,205], [90,245] distress for rent …. [83,490], [88,465] divisible property, definition …. [83,020], [83,165.5] end of administration …. [84,775] evidentiary provisions …. [83,415], [83,415.5], [83,415.10] examination of debtor …. [83,490], [88,465] execution …. [83,360] — failure, effect …. [80,910], [83,365] notice of meeting …. [88,445] — filing of copy after …. [83,370]

— filling vacant office of trustee …. [83,380], [83,380.5] — notification …. [83,370], [88,450] — time for attestation …. [83,360.10] — witnesses …. [83,360.5] fraudulent concealment of property …. [84,275] identification of property …. [83,077A], [83,077A.5] information to debtor …. [88,410] inquiries and investigations by Inspector-General …. [80,395] inspection of documents by creditors …. [83,420], [89,880] joint debtors …. [83,025] — modification of Pt X …. [88,405], [90,245] maintenance agreements and orders, effect on …. [83,170.5] meeting of creditors — adjournment …. [83,130], [83,130.5] — appointment of registered trustee where office vacant …. [83,380] — authority to call …. [83,075], [83,075.5]-[83,075.30] invalid authority …. [83,075.25] — calling of subsequent meetings …. [83,395], [83,400] — chairman challenge to decision …. [83,150.5] duty …. [83,125.5] election …. [83,125] — debtor to attend …. [83,120] failure, effect …. [83,385] — documents …. [88,420] — evidentiary provisions …. [83,415], [83,415.5], [83,415.10] — false or misleading answers …. [84,345], [84,345.5] — information regarding special resolution and NPII …. [88,430] — “meeting”, meaning …. [83,125.15] — meeting place, convenience …. [83,125.30] — minutes …. [83,160] — offences …. [84,345], [84,345.5]

— Pt V provisions applied as modified …. [83,490] — procedure for calling and holding …. [83,122], [83,122.5], [88,425], [90,245] — quorum …. [83,155], [83,155.10] — release of debtor’s property …. [83,165], [83,165.5] — resolutions …. [83,165], [83,165.5]-[83.165.40] special resolution …. [83,165.25], [83,385A], [83,415.5] — resolutions, statement as to possible …. [83,090] — stay of proceedings pending …. [83,080AAA], [83,180], [83,180.5] — tabling of statement of affairs and declaration of relationships …. [83,115A] — termination of agreement …. [83,390B], [83,390B.5] — time for holding …. [83,115] extension …. [80,770.55], [83,115.10] — voting disputed claim …. [83,150], [83,150.5] disputed debt …. [83,150.10] entitlement …. [83,135], [83,135.5]-[83,135.20] manner …. [83,140], [83,140.5], [83,145], [83,145.5]-[83,145.35] particulars of debt required …. [83,135.10] proxy, by …. [83,140], [83,140.5]-[83,140.10] offences …. [84,345], [84,345.5] payment of expenses by Commonwealth …. [84,725] payments to protect property …. [83,100] proceedings by or against trustee in official name …. [83,375], [83,375.5] release of provable debts …. [83,485] remaining property, debtor’s right to …. [83,493] report as to debtor’s affairs …. [83,085], [83,085.5] — trustee’s opinion …. [83,085.10] requirements …. [83,077A], [83,077A.5] secured creditors — surrender of security …. [83,185], [83,185.5], [83,185.10]

— voting entitlement …. [83,135], [83,135.5]-[83,135.20] sequestration order following debtor’s default …. [83,385] — notice to Official Receiver …. [88,455] setting aside by court …. [83,390], [83,390.5]-[83,390.20] — act of bankruptcy, as …. [80,910] — application of Pt 10 Bankruptcy Rules …. [91,460] — application requirements …. [91,465] — creditors’ standing …. [83,390.14] — entry of order …. [91,480] — expenses as provable debts …. [81,815], [81,815.5]-[81,815.15] — notice to creditors …. [83,410], [91,475], [94,065] — notice to Official Receiver …. [88,455] — service …. [91,470] — validity of prior acts and transactions …. [83,405] sheriff, duties …. [83,170] — execution of agreement, after …. [83,175] stamp duty …. [83,425] stay of legal proceedings …. [83,490], [88,465], [90,245] termination — act of bankruptcy, as …. [80,910] — court, by …. [83,390C] application of Pt 10 Bankruptcy Rules …. [91,460] application requirements …. [91,465] entry of order …. [91,480] notice to creditors …. [83,410], [91,475], [94,065] notice to Official Receiver …. [88,455] service …. [91,470] — creditors, by …. [83,390B], [83,390B.5] — expenses as provable debts …. [81,815], [81,815.5]-[81,815.15] — notice …. [83,410] — terminating event, by …. [83,390D] — trustee, by …. [83,390A], [88,460]

notice to Official Receiver …. [88,455] — validity of prior acts and transactions …. [83,405] trustee knowingly acting under set aside agreement …. [84,390] validity …. [83,165.35] variation …. [83,385A] — notice …. [83,410], [93,480] void arrangements with creditors …. [81,875.15], [83,335], [83,335.1], [83,375.5] Power of attorney debtor’s petition …. [81,175.55] PPSA security agreements definition …. [80,120] void provisions — bills of sale, in …. [84,710], [84,710.5] — contract, in …. [84,705] PPSA security interest definition …. [80,120] Primary industry rural support scheme payments, whether income …. [87,260D] Privilege legal professional — access to bankrupt’s premises and books …. [81,523.10] — bankrupt’s duty to trustee …. [81,520.55] — examinations of examinable person …. [81,550.50] — investigation of books of associated entity …. [81,525.20] parliamentary — application of Bankruptcy Act …. [80,275] qualified — reports, for …. [84,740.5] self-incrimination — bankrupt’s duty to trustee …. [81,520.55] — examination …. [81,531.35], [81,550.45]

Proceeds of crime orders applications, effect of …. [81,825] debts provable in bankruptcy …. [81,650] definition …. [80,120] effect …. [81,820] interpretative provisions …. [80,185] notification of trustee …. [81,830] order of payment of debts …. [81,820]-[81,830] vesting of property on bankruptcy …. [81,243] Promissory notes proof of debts …. [81,725] Proof of debts admission or rejection …. [81,750], [81,750.5] — appeal against decision of trustee …. [81,760], [81,760.5], [81,760.10] costs …. [81,765], [81,765.5] — costs of review …. [80,765.55] — grounds of rejection …. [81,750.10] amendment …. [81,730], [81,730.5] apportionment to principal and interest — payments before bankruptcy …. [81,680], [81,680.5] — security realised before or after bankruptcy …. [81,685], [81,685.5] bills of exchange, production of …. [81,725] composition with creditors — expenses where terminated …. [81,815], [81,815.5]-[81,815.15] contracts, distinct …. [81,715], [81,715.5] — joint and several estates …. [81,715.10] costs …. [81,740], [81,740.5] creditor limited to amount of debt …. [81,775] — entitlement to interest …. [81,775.10] debts provable in bankruptcy …. [81,650], [81,650.1], [81,650.2] — claim for breach of fiduciary duty …. [81,650.25] — claim for damages in conspiracy …. [81,650.20], [82,275.15]

— claim otherwise than for breach of contract, promise or trust …. [81,650.33] — costs …. [81,650.3] costs orders …. [81,650.2.3] — insolvent trading claims …. [81,650.70] — interest …. [81,650], [81,650.45], [81,680.5], [81,685.5] post-bankruptcy …. [81,650.77] — judgment debts …. [81,650.55] subsequent reduction …. [81,015.55] — liability …. [81,650.2.5] contingent liability …. [81,650.5], [81,650.65] — limitation of actions …. [81,650.50] — penalties and fines …. [81,650.6] — sureties …. [81,650.60] deduction of discounts …. [81,675] demands — nature …. [81,650.10] — unliquidated damages …. [81,650.7] employees, by …. [81,665] estimate of value by trustee …. [61,650] — appeal against …. [81,650.80] form …. [93,425] inspection by creditors …. [81,745] lodgment …. [81,650.15] manner of proving …. [81,660] misleading …. [84,285.5] mutual credit and set-off …. [81,670], [81,670.5] — claims after sequestration …. [81,670.65] — composition with creditors …. [81,670.60] — contingent liabilities …. [81,670.10] — “dealings”, meaning …. [81,670.40] — “mutual”, meaning …. [81,670.20]

— mutual dealings …. [81,670.45] — object of set-off …. [81,670.25] — “person claiming to prove a debt”, meaning …. [81,670.50] — protection against abuse …. [81,670.70] — relevant date …. [81,670.30] — sequestration …. [81,670.55] — statutory code …. [81,670.15] — void preferences …. [81,670.7] oaths administered by trustee …. [81,770] periodic payments, proportionate part of …. [81,720] personal insolvency agreement — expenses where terminated …. [81,815], [81,815.5]-[81,815.15] present value to be specified …. [81,650.15] promissory notes, production of …. [81,725] proof on admission …. [81,655], [81,655.5]-[81,655.7] rounding down …. [81,755] scheme of arrangement — expenses where terminated …. [81,815], [81,815.5]-[81,815.15] secured creditor, by …. [81,690], [81,690.5] — amendment of estimated value …. [81,690.10], [81,700], [81,700.5] cost …. [81,740] repayment of excess …. [81,705], [81,705.5] — property held by trustee …. [81,690.15] — redemption of security by trustee …. [81,695], [81,695.5], [81,695.10] — subsequent realization of security …. [81,710], [81,710.5] statement of details of proof …. [81,745] statutory declaration, verification by …. [81,660] Property see also Disclaimer of onerous property; Real property; Realization of property bankrupt, of …. [80,120], [80,120.27], [84,275.10] charging with intent to defraud creditors …. [84,335], [84,335.5]

concealment of with intent to defraud creditors …. [84,275] definition …. [80,120], [84,275.15] disposing with intent to defraud creditors …. [84,335], [84,335.5] distribution of see Distribution of property divisible amongst creditors — causes of action …. [81,860.35] — doctrine of exoneration …. [81,240.23] identity of person on title with bankrupt, doubt as to …. [81,925] joint property …. [80,120.30] net value — definition …. [80,120] property divisible among creditors see Property available for debt payment settlements of see Property settlements vesting of — Cross-Border Insolvency Act, under …. [81,240.45] — matrimonial causes …. [81,240.50] vesting of, on bankruptcy …. [81,240], [81,247], [81,990] — after-acquired property …. [81,240], [81,350.10] second or subsequent bankruptcy …. [81,245] transactions by bankrupt …. [81,915] — distress for rent …. [81,240] — doctrine of exoneration …. [81,240.23] — fines …. [81,240] — joint tenancy, effect on …. [81,240.40] — leave to commence or conduct proceedings …. [81,240.35] — maintenance …. [81,240], [81,247] — orders under Pt VIII or VIIIAB Family Law Act …. [81,247] — proceeds of crime laws, under …. [81,243] — “property of the bankrupt”, meaning …. [81,240], [81,240.5] choses in action …. [81,240.7] interest after bankruptcy …. [81,240.20]

remedies …. [81,240.25] right of appeal against provable debt judgment …. [81,240.12] right under sale of land contract …. [81,240.15] second or subsequent bankruptcy …. [81,245] — secured creditors’ rights regarding security …. [81,240], [81,240.30] — stay or adjournment of bankruptcy proceedings …. [81,240.16] — title of trustee …. [81,240.10], [81,240.20], [81,860.30] estoppel …. [81,240.11] vesting of, under Pt XI …. [83,785] — “divisible property”, meaning …. [83,785.10] — equivalent provisions …. [83,785.5] Property available for debt payment attachment of debts by creditor …. [81,870] — “attachment”, meaning …. [81,870.10] — s 218 Income Tax Act notice, effect of …. [81,870.10] avoidance of preferences …. [81,895], [81,895.5] — “good faith”, meaning …. [81,895.100] deemed lack of …. [81,895.110] — “in favour of creditor”, meaning …. [81,895.40] — limitation period …. [81,895.140] — market value of property …. [81,895.120] — onus of proof …. [81,895.10] — “ordinary course of business”, meaning …. [81,895.90] — “person who is insolvent”, meaning …. [81,895.30] — “preference, priority or advantage”, meaning …. [81,895.70] — running accounts …. [81,895.80] — secured creditor …. [81,895.50] — “transfer of property”, meaning …. [81,895.20] — “void against the trustee”, meaning …. [81,895.60] charge or charging order by creditor …. [81,870] — caveat …. [81,87030] — limitation period …. [81,920]

— s 218 Income Tax Act notice, effect of …. [81,870.35] divisible among creditors …. [81,860], [81,860.12.5] — approved deposit funds …. [81,860.14] — awards made to bankrupt …. [81,860], [87,000A] — causes of action …. [81,860.35] — chose of action for administration of deceased estate …. [81,860.5] — compensation …. [81,860.14.5] — damages …. [81,860.9] personal injury …. [81,860.15] right to recover …. [81,860.9] — exclusions …. [81,860], [81,860.13] — exoneration doctrine …. [81,240.23] — household property …. [81,860.12], [87,000] — interest forfeited in bankruptcy …. [81,860.20] — motor vehicles …. [81,860], [87,005] — “paid for the purchase” …. [81,860.40] — personal property with sentimental value …. [81,860], [87,000A] — “powers in, over or in respect of property” …. [81,860.12.5] — prescribed amounts …. [87,005] — property used for income by personal exertion …. [87,005] — retirement savings accounts …. [81,860] — rural support schemes …. [81,860], [87,025], [87,030] — subject to equities …. [81,860.8] — subsequent family law orders, effect …. [81,860.10] — superannuation …. [81,860.14] — third parties, rights of …. [81,860.11] — trustee’s title, nature of …. [81,860.30] — “used in acquisition” …. [81,240.40] execution by creditor …. [81,870] — second or subsequent bankruptcy …. [81,245], [81,247] inventory by trustee …. [89,770] limitation period for claims …. [81,920]

payments before commencement of bankruptcy — protection against relation back …. [81,900], [81,900.5] Bankruptcy Act and Family Law Act, interaction …. [81,900.30] discretion of court …. [81,900.5] maintenance agreements and orders …. [81,900.20] payments to bankrupt or debtor …. [81,905], [81,905.5] sheriff’s duties — notice of petition, following …. [81,875], [81,875.5]-[81,875.20] notice of maintenance …. [81,875.20] third party liability insurance …. [81,865], [81,865.3] — declaratory relief …. [81,865.5] transfers to defeat creditors see Transfers to defeat creditors undervalued transactions see Undervalued transactions void transfers …. [81,895] Property settlements see also Matrimonial property Family Court — jurisdiction …. [80,785] Protected money contributions by bankrupt — notice requirements …. [82,113ZL], [87,350] life insurance and endowment insurance …. [81,860.13] property divisible among creditors …. [81,860] Provable debt definition …. [82,865] Proxies meeting of creditors — announcement …. [81,315M], [86,630] — appointment …. [81,315ZC] — form …. [93,420] — lodgment by fax …. [86,630] — notice of meeting …. [81,315E], [90,045]

— trustee’s representative …. [86,625] meeting of creditors without sequestration — faxed submission …. [83,145.35] — restrictions …. [83,140], [83,140.5]-[83,140.10] — undated forms …. [83,145.25] — validity …. [83,145.20] — witness requirement …. [83,145.30] Real property deceased estates, administration in bankruptcy — vesting directly in devisee …. [83,800] identity of person on title with bankrupt, doubt as to …. [81,925] sale of, void provisions …. [84,705] Realization charges see Charges (pecuniary) Realization of property see also Disclaimer of onerous property application for directions …. [82,000.25] assistance from bankrupt …. [81,975.5] copyright and patents — limitation of trustee’s powers …. [82,020] discharge of mortgage …. [82,010] duties of trustee …. [82,000.10] — fiduciary, as …. [82,000.20] entities controlled by bankrupt …. [82,070], [82,070.5] income of bankrupt — second or subsequent bankruptcy …. [81,245], [81,247] inspection of goods held as security …. [82,015] money owing to bankrupt — payment to trustee on demand …. [81,975] notice of demand …. [93,430] personal liability of trustee …. [80,450.5], [82,025] possession of bankrupt’s property by trustee …. [81,975] — discharge, effect of …. [81,975.5]

powers exercisable at trustee’s discretion …. [82,000] — carrying on of business …. [82,000.25] — court intervention …. [82,000.30] — sale …. [82,000], [82,000.15] purchase by trustee …. [82,000.20] time limit …. [81,976] warrant for seizure of connected property …. [81,980], [94,105] — hindrance of …. [84,330], [84,330.5] withholding of possession from trustee …. [81,975] Receivers company officers, as …. [80,120.37] Records old — destruction or return by trustee …. [84,775] proceedings …. [84,140], [84,140.5] Recovery from third parties charge over property …. [82,113ZN] dismissal or prejudice by employer …. [82,113ZP] liability to pay on notice …. [82,113ZL], [82,113ZL.5] — non-compliance …. [82,113ZO] — setting aside by court …. [82,113ZM], [82,113ZM.5], [82,113ZM.10] notice by bankrupt of new employment …. [87,400] notice by employer of cessation of employment …. [87,400] persons subject to recovery …. [82,113ZK], [82,113ZK.5] transactions void as against trustee — administration of estate in bankruptcy …. [83,775], [88,645], [90,295] — charge over property …. [82,113ZR], [82,113ZR.5] — charges and valuations …. [82,113ZQ.10] — liability to pay on notice …. [82,113ZQ], [82,113ZQ.5], [82,113ZQ.25] non-compliance …. [82,113ZT] setting aside by court …. [82,113ZS], [82,113ZS.5], [82,113ZS.10]

— value of property received …. [82,113ZQ.20] trustee of superannuation plan — definitions …. [82,113ZW] — rolled-over superannuation interests, order for …. [82,113ZU] enforcement …. [82,113ZV] Registrars (court) appeals from …. [80,760.10] declaration of intention to present debtor’s petition — duties during stay period …. [81,100] examinations held before …. [81,550.30] powers …. [91,055], [91,710] — delegated …. [80,750.5] — review …. [91,060] protections and immunities …. [84,735] warrant, execution of — direction …. [89,235] — notification …. [89,230] Registrars in Bankruptcy BIOS, maintenance of …. [88,945] examinations by — offences in relation to …. [84,320] Regulations charges or penalty payments …. [84,540] Governor-General may make …. [84,790], [85,370] Relation back commencement of bankruptcy — act of bankruptcy within 6 months …. [80,910.10], [81,855], [81,855.5], [81,855.10] debtor’s petition …. [81,175.40] deceased estates, administration in bankruptcy — commencement of administration …. [83,770], [83,770.10] Income Tax Act notice …. [81,855.25]

payments or deliveries to debtor or bankrupt — discharge, as …. [81,905], [81,905.5] transactions in good faith and ordinary course of business — protection …. [81,900], [81,900.5], [81,900.10] maintenance agreements or orders …. [81,900.20], [81,900.30] Reports application for annulment of administration of deceased estate in bankruptcy …. [91,355] application for annulment of bankruptcy …. [82,310.30], [91,355] application for approval of composition or scheme of arrangement …. [81,140], [86,640] application for review of sequestration order …. [91,370] inquiries and investigations by Inspector-General …. [80,395] personal insolvency agreements …. [83,085], [83,085.5] — trustee’s opinion …. [83,085.10] protection in respect …. [84,740], [84,740.5] registration of trustees …. [82,382], [87,875N] Representation agent, by …. [84,755] corporation, of …. [84,755] examinations — debtor, of …. [83,490], [88,465], [90,245] — examinable persons …. [83,490], [88,465], [90,245] legal personal representative, by see Legal personal representatives legal professional, by see Legal professionals partnership, of …. [84,755], [84,755.1] persons of unsound mind …. [84,755] Retirement savings accounts (RSA) certificate as evidence of amount …. [81,860] property divisible among creditors …. [81,860] void provisions — governing rules, in …. [84,713], [84,713.5]

— terms and conditions, in …. [84,713A] Rural adjustment grant schemes 1985 …. [86,015] 1988 …. [86,015] definition …. [86,015] Rural adjustment scheme payments property divisible among creditors …. [81,860] — prescribed rural support schemes …. [87,025], [87,030], [87,260D] Rural reconstruction grant scheme definition …. [86,015] Rural support scheme definition …. [80,120] Same-Sex Relationships (Equal Treatment in Commonwealth Laws General Law Reform) Act 2008 (Cth) application …. [89,880C] Schemes of arrangement see also Compositions with creditors acceptance by creditors …. [81,405] approval by court …. [81,415] copies for creditors …. [86,635] declaration of relationships by proposed trustee …. [81,405B] — tabling at meeting …. [81,405C] default …. [81,415] — remedy …. [81,415.5] effect …. [81,415] enforcement …. [81,415] inquiries and investigations by Inspector-General …. [80,395] inspection …. [86,635] joint schemes …. [81,405.10] meetings with creditors …. [81,405.20], [81,425], [81,425.5]-[81,425.15], [86,640], [86,645], [90,045] — surety for cost …. [81,405A]

overview …. [81,405.5] proposal …. [81,405.5] — contents …. [81,405.15] — time for sending …. [86,640] report — time for sending …. [86,640] setting aside by court …. [81,425B] — act of bankruptcy, as …. [80,910] — application of Pt 10 Bankruptcy Rules …. [91,460] — application requirements …. [91,465] — entry of order …. [91,480] — expenses as provable debts …. [81,815], [81,815.5]-[81,815.15] — notice to creditors …. [91,475], [94,065] — service …. [91,470] stamp duty on cheques and receipts …. [84,770] statement of affairs, tabling of …. [81,405C] termination …. [81,425B] — act of bankruptcy, as …. [80,910] — application of Pt 10 Bankruptcy Rules …. [91,460] — application requirements …. [91,465] — entry of order …. [91,480] — expenses as provable debts …. [81,815], [81,815.5]-[81,815.15] — notice to creditors …. [91,475], [94,065] — service …. [91,470] trustees — Pt VIII, application of …. [81,420] variation …. [81,410A] Seals Official Trustee …. [80,445] Search warrants see also Warrants seizure of connected property, for …. [81,980.5]

Secretary delegation by …. [80,390] Secured creditors creditors’ petitions by …. [80,975], [80,975.100] — Commissioner of Taxation …. [80,975.130] — estimate of value of security …. [80,975.110] — failure to value security …. [80,975.140] — Family Court orders, under …. [80,975.120] — undervalue of security …. [80,975.140] deceased estates, administration in bankruptcy …. [83,750], [83,785] declaration of intention to present debtor’s petition — rights, effect on …. [81,125] definition …. [80,120], [80,975.100], [81,690.5] execution against property of bankrupt or debtor …. [81,870], [81,870.5] — preferences …. [81,870.8], [81,895.50] mortgage holders as …. [80,120.25] personal insolvency agreements — surrender of security …. [83,185], [83,185.5], [83,185.10] — voting entitlement …. [83,135], [83,135.5]-[83,135.20] proof of debts …. [81,690], [81,690.5] — amendment of estimated value …. [81,690.10], [81,700], [81,700.5] cost …. [81,740] repayment of excess …. [81,705], [81,705.5] — property held by trustee …. [81,690.15] — redemption of security by trustee …. [81,695], [81,695.5], [81,695.10] — subsequent realization of security …. [81,710], [81,710.5] vesting of property on bankruptcy, rights under …. [81,240], [81,240.30] Sequestration see also Personal insolvency agreements control of debtor’s property before — damages for debtor on dismissal …. [86,545], [86,545.5] — documents to be served after order …. [86,535]

— examinations …. [86,550] affidavit in support …. [91,230] application for discharge of summons …. [91,250] application for summons …. [91,230] form …. [91,240], [94,045] hearing of application …. [91,235] service of summons …. [91,245] — expenses of trustee …. [86,540] Sequestration orders act of bankruptcy as precondition …. [80,970] apprenticeship, effect on …. [81,810] articled clerkship, effect on …. [81,810] associations, registered …. [80,275] “carrying on business in Australia”, meaning …. [80,970.60] copy for Official Receiver …. [81,015] corporations …. [80,275] creditors’ petition …. [80,970], [81,175.45] debt agreements, simultaneous — termination …. [82,865Q], [82,865Q.5] — voiding …. [82,865T], [82,865T.5] debtor’s petition, unnecessary where …. [81,175.5] default under Pt X, following …. [83,385], [83,390.5]-[83,390.20], [88,455] discretion of court …. [81,015.130], [81,015.135] “dwelling house”, meaning …. [80,970.50] effective time for operation …. [82,390.25] entry …. [91,165] form …. [91,165], [94,035] grounds — discretion to grant …. [81,015.93] — “other sufficient cause”, meaning …. [81,015.97] bias …. [81,015.105]

cross-claim against creditor …. [81,015.100] frustration of pending appeal …. [81,015.115] futility of bankruptcy …. [81,015.110] refusal to accept tender of debt …. [81,015.120] solicitor’s undertaking regarding payment …. [81,015.121] — solvent debtor’s refusal to pay debts …. [81,015.90] jurisdiction to make …. [80,970], [80,970.10] — “ordinarily resident in Australia”, meaning …. [80,970.40] — “personally present”, meaning …. [80,970.30] notification …. [91,165] operative date …. [80,970.70] ought not have been made, where …. [82,310.15]-[82,310.30] — discretion to annul …. [82,310.25] partnerships, registered …. [80,275] personal insolvency agreements — termination …. [83,390C] notice to Official Receiver …. [88,455] rescission …. [80,800], [80,800.20] review …. [91,370], [94,060] service …. [91,175] setting aside by court — alternative to …. [82,310.30] stay …. [80,800.20], [81,015], [81,015.210], [81,240.16] — appeal against order …. [80,800.30] suspension …. [80,800.20] transfer to Federal Court …. [80,970.27] Service application for annulment of bankruptcy …. [82,310], [82,310.3] — notice to creditors …. [91,350] application for orders for entities controlled by bankrupt …. [82,080] bankruptcy notices …. [80,915.25], [86,472]-[84,472.10] — defective service …. [84,730.10]

— extension of time …. [86,472.10] — invalid, annulment of bankruptcy …. [82,315.15] — out of jurisdiction …. [80,970.35] — substituted …. [91,100] — Sundays …. [86,472.5] compositions with creditors — application to set aside or terminate …. [91,470] courier, by …. [89,760.9] creditors’ petitions …. [81,015.30] — order dismissing …. [91,175] — order extending …. [91,175] — out of jurisdiction …. [81,015.40] debts agreements — application to terminate or void …. [91,430] — order for termination or voiding …. [91,440] deceased estate in bankruptcy — application for annulment — notice to creditors …. [91,350] definition …. [84,760.5] discharge of summons — examination of bankrupt …. [91,285] — examination of debtor or examinable person …. [91,250] — examination of examinable person …. [91,315] documents, of …. [89,760] infringement notices …. [89,260] “last known address”, meaning …. [89,760.9A], [89,760.15] notices, of …. [84,760], [84,760.5] out of jurisdiction …. [84,760.20] personal insolvency agreements — application to set aside or terminate …. [91,470] personal service …. [84,760.6] place of business of debtor’s company …. [89,760.10]

release of trustee, application for …. [91,395] resignation of trustee, application of acceptance …. [91,395] scheme of arrangement — application to set aside or terminate …. [91,470] sequestration order …. [91,175] — application for review …. [91,370] substituted service …. [84,760.10] — discretion …. [84,760.15] Sundays …. [89,760.5] Set-off see Proof of debts Sheriff declaration of intention to present debtor’s petition — duties during stay period …. [81,100] execution and attachment — notice of bankruptcy, following …. [81,880] — notice of petition, following …. [81,885] authority to receive writ amount …. [81,875.10] notice of maintenance …. [81,875.20] personal insolvency agreements — delivery of debtor’s property …. [83,175] — execution and attachment …. [83,170] Social security payments, whether income …. [87,260D] Solicitors see Legal practitioners Spousal maintenance Family Court bankruptcy jurisdiction …. [80,785] Stamp duty debt agreements …. [82,865X] personal insolvency agreements …. [83,425] trustee’s cheques and receipts …. [84,770] Statement of affairs bankrupt, of

— failure to file …. [81,025.30], [82,163.10] — false, misleading or omitted particulars …. [80,175] — form …. [93,400] — inspection and copies …. [81,025], [81,025.10] — material change in …. [81,520] — obligation to make …. [81,025], [81,025.10]-[81,025.30] debt agreement …. [93,470] debt agreement proposals …. [82,865D] debtor’s petition, accompanying …. [81,175] — false declarations …. [84,337], [84,337.5] — false, misleading or omitted particulars …. [80,175], [84,339], [84,339.5] — inspection and copies …. [81,175] debtor’s petition against partnership — false declarations …. [84,337], [84,337.5] — false, misleading or omitted particulars …. [80,175], [84,339], [84,339.5] — inspection and copies …. [81,180G] — non-petitioning partners …. [81,180F] debtor’s petition by joint debtors …. [81,185] — false declarations …. [84,337], [84,337.5] — false, misleading or omitted particulars …. [80,175], [84,339], [84,339.5] — inspection and copies …. [81,185] deceased estates, administration in bankruptcy …. [83,750.5], [83,760], [83,760.5] — copy to Official Receiver …. [88,640] — false, misleading or omitted particulars …. [80,180] — form …. [93,405] — proof …. [88,640B] filing — alteration of date …. [80,770A], [80,770A.5]

— failure to file …. [81,025.30], [82,163.10] distribution of property …. [82,145], [82,145.5] meeting of creditors, copies and tabling …. [81,315R], [90,045] Official Receiver’s power to obtain …. [81,025.20], [81,531A] personal insolvency agreements — false, misleading or omitted particulars …. [80,175], [84,337] — inspection by creditors …. [83,077B] — prerequisite to effective authority …. [83,075] — tabling at meeting of creditors …. [81,315R], [90,045] transitional provisions …. [80,175] Stay of legal proceedings abuse of process as basis for …. [81,240.16] “action”, meaning …. [81,250.45] application …. [81,250.55] — affidavit in support …. [81,250.55] — form …. [81,250.55] automatic stay …. [81,250.13] constitutional validity of s 60(1) …. [81,250.2] creditors’ petition pending meeting of creditors …. [83,080AAA], [83,180], [83,180.5] “debtor”, meaning …. [81,250.50] debtor following personal insolvency agreement, by …. [81,250], [83,490], [88,465], [90,245] debtor or property, against — creditors’ petition, after …. [81,250], [81,250.10], [81,250.35][81,250.40] debtor subsequently bankrupt, by …. [81,250], [81,250.12], [81,250.43] — “personal injury”, meaning …. [81,250.25] — professional negligence …. [81,250.25] — “wrong done to the bankrupt”, meaning …. [81,250.25] discontinuance and reinstatement …. [81,250.17] election to continue action …. [81,250.15], [81,250.20]

farmers’ debt assistance …. [83,935] instalment order acting as …. [80,910.17] judgment debt, assessment …. [81,250.60] jurisdiction …. [81,250.6] stay of judgment …. [80,910.17] workers compensation judgment …. [81,250.4] Summons control of debtor’s property before sequestration — affidavit in support …. [91,230] — application …. [91,230] discharge, for …. [91,250] hearing …. [91,235] — form …. [91,240], [94,045] — service …. [91,245] Evidence Act 1995 provisions …. [81,550.55] examination of bankrupt — affidavit in support …. [91,260] — application …. [81,550.10], [91,260] discharge, for …. [91,285] form …. [91,260], [91,050] hearing …. [91,265] — form …. [91,270], [91,045] — service …. [81,550.15], [91,275] — setting aside, discharge or adjournment …. [81,550.20] examination of debtor following personal insolvency agreement …. [81,550.10], [83,490], [88,465], [90,245] examination of examinable person following personal insolvency agreement …. [81,550.10], [83,490], [88,465], [90,245] — application for summons …. [81,550.10], [91,295] discharge …. [91,315] form …. [91,295], [94,050] hearing …. [91,300]

— conduct money …. [91,320] — form of summons …. [91,305], [94,045] — service of summons …. [81,550.15], [91,550.15], [91,310] — setting aside, discharge or adjournment …. [81,550.20] witnesses, to — non-compliance …. [84,300], [84,305], [89,230], [89,235], [91,535], [94,085] Superannuation consent for transactions from Official Receiver …. [81,925H] contributions, recovery of …. [81,925A] — income, whether …. [87,255] — person who becomes bankrupt, contributions by …. [81,925B] — third party for benefit of person who becomes bankrupt, contributions by …. [81,925C] — time for claims by trustee …. [81,925D] definitions …. [81,925N] priority payment …. [81,785] property divisible among creditors …. [81,860.14] protection of plan trustee …. [81,925L] recovery from trustee — definitions …. [82,113ZW] — rolled-over superannuation interests, order for …. [82,113ZU] enforcement …. [82,113ZV] reference to members of plan …. [81,925M] void provisions in governing rules …. [84,713], [84,713.5] Superannuation account-freezing notices — copy to trustee …. [81,925G] — enforcement …. [81,925K] — issue …. [81,925E] — revocation …. [81,925F] — setting aside …. [81,925J] Supervised account regime

books to be kept …. [82,113ZIIA] cash income …. [82,113ZII] constructive income receipt arrangement …. [82,113ZIB], [82,113ZIH] definitions …. [82,113ZIB] determination by trustee …. [82,113ZIC] — expiration …. [82,113ZIDA] — forms …. [93,485], [93,490], [93,500] — revocation …. [82,113ZID] injunctions …. [82,113ZIJ] — discharge …. [82,113ZIL] — interim …. [82,113ZIK] — limits on grant …. [82,113ZIM] non-monetary income receipt arrangement …. [82,113ZIB], [82,113ZIHA] object of Subdiv HA …. [82,113ZIA] powers of court …. [82,113ZIN] review by Inspector-General …. [82,113ZIO] — decision on review …. [82,113ZIR] notification …. [82,113ZIS] review by AAT …. [82,113ZIT] — further information …. [82,113ZIP] supervised account — bankrupt to open and maintain …. [82,113ZIE] — definition …. [82,113ZIB] — deposit of bankrupt’s income …. [82,113ZIF] — notice for new account …. [82,113ZIEA] — withdrawals …. [82,113ZIG] Taxation avoidance of preferences …. [81,895] Common Investment Fund monies and interest …. [80,540] costs, of see Costs creditors’ petition

— Commissioner as secured creditor …. [80,975.130] — outstanding assessment as “debt” …. [81,975.70] disbursements of trustee …. [87,985.5] GST see Goods and Services Tax (GST) persons required to make deductions — payments before commencement of bankruptcy …. [81,900] s 218 Income Tax Act notice — attachment of debts by creditor …. [81,870.10], [81,870.35] — charges or charging order, whether …. [81,870.35] — relation back …. [81,855.25] unremitted deductions — priority payment …. [81,785] variation of bankrupt’s income …. [82,113N], [82,113N.5] Transcripts proceedings, of …. [84,140], [84,140.5] Transfers to defeat creditors avoidance of …. [81,889] — bankruptcy “covering the field” …. [81,889.7] — equitable interest in bankrupt estate …. [81,889.5] — extraterritorial effect …. [81,889.3] — inference of intent to defraud …. [81,889.10] — “market value”, meaning …. [81,889.25] — powers of court …. [81,889.26] costs …. [81,889.30] — repealed provision …. [81,890]-[81,890.50] — s 30, effect of …. [81,884.21] — s 121(5), effect of …. [81,889.26.1] void transfers …. [81,889] Trustees see also Controlling trustees access to premises and books …. [81,523], [81,523.10] accounts

— audit …. [82,580] — bank accounts …. [82,550] — old, destruction or return …. [84,775] — private account payments …. [82,545] — undischarged bankrupt, notification of …. [81,910] actions commenced by debtors subsequently bankrupt — election to continue …. [80,770.45], [81,250], [81,250.15], [81,250.20] agent of employers, whether …. [82,375.25] annual return …. [82,557] appeal to court against …. [82,640], [82,640.5]-[82,640.35] application for directions for administration …. [82,000], [82,000.35] application for enforcement of possession of bankrupt’s property …. [81,975] application for examination of bankrupt or examinable person …. [81,550] application for orders regarding property of entity controlled by bankrupt …. [82,075] application for registration …. [82,375], [87,805], [89,932] — fees …. [82,383K] — form …. [93,435] — procedure …. [82,380.5] appointment …. [82,395] — joint appointments …. [82,400] authority under …. [82,790.11] — notice to, on sequestration …. [91,165] — objection to …. [82,395.5], [91,390] — vacancy in office …. [82,405], [82,405.5] automatic release …. [82,810] bankruptcy …. [82,800] — notification …. [82,420] benefits, acceptance of …. [82,485], [82,485.5]-[86,485.10] bills of costs …. [82,490] — review …. [82,495], [88,024], [88,030]-[88,033]

books — access and information to Official Receiver …. [82,555] — maintenance …. [82,570] — trading, when …. [82,575] breach of duty …. [82,585] change of conditions on practising …. [82,383E] — application form …. [93,440] — decision …. [83,383F] consent for bankrupt to leave Australia — discretion …. [84,370.5], [84,370.10] — request, fee for …. [86,800] consent to act …. [82,390], [82,390.5]-[82,390.25], [87,925] — bankruptcy of debtor, effect …. [82,390.25] — certificate of trusteeship …. [87,930] — Cross-Border Insolvency Act proceedings …. [91,610] — filing …. [86,565] — form …. [93,445] — removal of trustee …. [82,390.12] — substitution of trustee …. [82,390] notice of removal …. [88,050] controlling trustee, as …. [83,075] copyright and patents, limits on power regarding …. [82,020] costs order against …. [80,765.50] court’s control and supervision …. [82,640.20], [82,645], [82,645.20] creditors’ control over …. [82,635] declaration — form …. [93,445] definition …. [80,120] duties of bankrupt to …. [81,520], [81,520.5]-[81,520.50] duties on bankruptcy …. [80,450.5], [80,455], [82,375.10] — breach …. [82,585] employees as …. [82,375.20]

ethical standards …. [82,375.40] finalisation of administration of estate — notice to Official Receiver …. [88,055] fraud or dishonesty by, notification …. [82,420] indemnity …. [80,450.5] independence …. [82,375.40] information, provision of — Official Receiver, to …. [82,173], [87,650] inquiry into conduct by court — notice of removal …. [88,050] inspection of goods held as security …. [82,015] insurance, proof of …. [87,820] inventory of property …. [89,770] investigation of bankrupt …. [80,460] — production of books of associated entity …. [81,525], [81,525.5][81,525.20] privilege …. [81,525.20] meeting of creditors — announcement of proxies and attorneys …. [81,315M], [86,630] — appointment of minutes secretary …. [81,315L] — attendance record …. [81,315J], [81,315K] — convening …. [81,315] — notice of adjournment …. [81,315Y] — notice of meeting …. [81,315A] — opening …. [81,315K] — President election …. [81,315P] voting entitlement …. [81,315ZA], [81,315ZB] — quorum …. [81,315N] — representative at …. [81,310], [86,625] mortgages, discharge of …. [82,010] negligence …. [80,450.5]

notice of bankrupt’s return to Australia …. [82,173.5], [87,650] notice of bankruptcy to creditors …. [80,455], [86,620] notice of cancellation of objection to automatic discharge …. [82,200], [87,655] objection to automatic discharge …. [82,168] — partial withdrawal …. [82,183] — withdrawal …. [82,185], [82,185.5] officer of the court …. [82,375.30] official name, proceedings in …. [82,415], [83,375], [83,375.5] performance standards …. [88,200A], [90,150] personal insolvency agreements — actions by …. [81,255], [83,490], [88,465], [90,245] — application for examination of debtor following personal insolvency agreement …. [81,550], [83,490], [88,465], [90,245] — application for examination of examinable person …. [81,550], [83,490], [88,465], [90,245] — application for order to set aside …. [83,390], [83,390.5]-[83,390.15] — application for sequestration order following default under Pt X …. [83,390C] — appointment where office vacant …. [83,350], [83,380], [83,380.5] — consent to act as …. [83,350] — eligibility …. [83,345] — failure to execute …. [83,365] — knowingly acting set aside agreement …. [84,390] — nomination …. [83,165] — notice of execution, duties as to …. [83,370] — official name, proceedings bought by or against …. [83,375], [83,375.5] — Pt VIII applies …. [90,245] — registered trustee, as …. [83,345] — stamp duty on cheques and receipts …. [84,770] — termination …. [83,390A], [88,460]

— variation of agreement …. [83,385A] notice …. [83,410] personal liability …. [80,450.5] — protection …. [82,025] proceeds of crime orders, notification of …. [81,830] proof of debts — admission or rejection costs of review by court …. [80,765.55], [81,765], [81,765.5] oaths and affidavits …. [81,770] — statement of details …. [81,745] realization of bankrupt’s property see Realization of property receipts and payments …. [82,560] — forms …. [93,935] registration …. [82,383C], [87,815], [87,850] — application …. [82,375], [87,805] — cancellation …. [82,383I.10] AAT review of decision …. [83,383I.5] — certificate …. [82,383C] — change in particulars …. [87,850] — charges …. [82,383C], [85,580], [85,585] refund …. [82,383J] — committee for registration of applicants AAT review of decision …. [82,382] applicant interview …. [87,875M] assessment of applicants …. [82,382] chairperson …. [87,875A] confidentiality …. [87,875O] convening of replacement committee …. [87,875G] disclosure of interests …. [87,875E] discretion …. [82,382] effect of decision …. [82,383] evidence of proceedings …. [87,875P]

inquiries …. [87,875K] interview of applicant …. [82,380], [82,380.5] IPAA role …. [87,875B] mandatory decision against …. [82,382] mandatory decision in favour …. [82,382] meetings …. [87,875I] notice of interview …. [87,875L] procedures …. [87,875H], [87,875I] removal of members …. [87,875F] report of decision …. [87,875N] resignation of chairperson …. [87,875C] resignation of members …. [87,875D] resolutions without meetings …. [87,875J] time for decision …. [82,382] — conditional …. [82,382] application for change or removal …. [82,383E], [82,383F], [88,110] charge on change …. [85,595] committee …. [88,105]-[88,200] — definitions …. [87,875] — extension of term …. [82,383D], [82,383K], [87,820] charge …. [85,590] — fees …. [82,383K] — particulars of applicant for NPII …. [82,383C], [87,815] — qualifications, experience and ability of applicants …. [87,810] — termination committee …. [82,383H], [82,383I], [88,150]-[88,200] involuntary …. [82,383H], [82,383I], [88,200A] registration certificate to Inspector-General …. [82,383J] voluntary …. [82,383G] reimbursement …. [80,450.10] relationship between bankrupt and trustee …. [80,455.5] release …. [91,395]

— court, by …. [82,805] — operation of law after 7 years …. [82,810] removal …. [82,390.12], [82,645], [82,645.5]-[82,645.12], [82,795], [82,795.5] — notice …. [88,050] — replacement on nomination of current trustee …. [82,795A], [82,795A.5] remuneration …. [82,470] — apportionment between successive trustees …. [82,480], [82,480.1] — costs ordered …. [82,470.45] — disbursements …. [87,985.5] — GST component …. [82,465] — Inspector-General’s decision …. [87,985]-[87,995] — meeting of creditors …. [81,315U], [90,045] — minimum entitlement …. [82,465] — notification requirements …. [82,470], [88,000] approval notice …. [88,006] claim notice …. [88,009] initial remuneration notice …. [88,003] — prescribed rate …. [87,975], [87,980] — priority payment …. [81,785] — review …. [82,495], [88,012] application …. [88,015] notification of decision …. [88,021] threshold …. [88,018] — taxation …. [87,985]-[87,990.5] reports see Reports resignation …. [82,790], [91,395] — court’s implied power …. [82,790.10] — ill health …. [82,790.10] — joint appointment, where …. [82,790.11] return or destruction of old accounts and records …. [84,775]

stamp duty on cheques and receipts …. [84,770] statutory powers, termination …. [83,375] substitution …. [82,795], [82,795.1], [82,795.5] — replacement on nomination by current trustee …. [82,795A], [82,795A.5] termination …. [83,375.5] unclaimed dividends or money …. [84,040], [88,795] unlawful receipt of money …. [82,485], [82,485.5] vesting of property in …. [81,240], [81,243], [81,247], [81,990], [81,990.5] — registration of interest …. [81,990.5] — title to property …. [81,240.10], [81,240.20], [81,860.30] estoppel …. [81,240.11] Trusts associated entities …. [80,145] constructive trusts …. [80,750.6], [81,884.12] deeds — void provisions …. [84,714] financial affairs …. [80,165] resulting trusts …. [80,750.6] Unclaimed moneys or dividends payment …. [84,040], [88,795] Undervalued transactions avoidance of …. [81,884], [81,884.1], [87,120] — consideration given to third party …. [81,893] — constructive trust …. [81,884.12] — equitable interest in bankrupt estate …. [81,884.5] — limitation period …. [81,920] — onus of proof …. [81,884.8] — repealed provision …. [81,885]-[81,885.65] — s 30, effect of …. [81,884.21] — s 139ZQ, effect of …. [81,884.35]

Unliquidated damages provable in bankruptcy, whether …. [81,650], [81,650.10] Warrants arrest of bankrupt or debtor …. [81,531.25], [81,550.25], [84,135], [91,530] — form …. [94,080] issue — failure to attend examination …. [80,795], [81,531.25], [81,550.25], [84,305.10], [89,230], [89,235], [91,535], [94,085] search warrants …. [81,980.5] seizure of connected property …. [81,980] — administrative law considerations …. [81,980.10] — hindrance …. [84,330], [84,330.5] Witnesses conduct money …. [91,320] examination …. [80,775] expenses …. [91,320] summons to see Summons warrant for apprehension …. [91,535], [94,085]