BANKRUPTCY.
No. 43 of 1946.
An Act to amend the Bankruptcy Act 1924-1945.
[Assented to 15th August, 1946.]
BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title and citation.
1.—(1.) This Act may be cited as the Bankruptcy Act 1946.
(2.) The Bankruptcy Act 1924-1945 is in this Act referred to as the Principal Act.
(3.) The Principal Act, as amended by this Act, may be cited as the Bankruptcy Act 1924-1946.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
3. After section one hundred and seventeen of the Principal Act the following section is inserted:—
Distribution of dividends where bankrupt has failed to file statement of affairs.
“117a. Where a bankrupt has refused or failed to file a statement of his affairs in accordance with section sixty-six of this Act, the Court may, on the application of the official receiver, upon such terms as it thinks fit, 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 affairs and those creditors had been mentioned therein.”.
4. After section one hundred and eighty-three of the Principal Act the following section is inserted:—
Filling of vacancy in office of trustee.
“184.—(1.) If a vacancy occurs in the office of trustee under a composition or scheme of arrangement, or in the office of trustee of a deed made under this Part, the Court may, on the report of the Registrar, or on the application of the debtor, a creditor or the official receiver—
(a) appoint the official receiver to act as trustee;
(b) order that the official receiver shall summon a meeting of creditors for the purpose of appointing a new trustee; or
(c) appoint the official receiver to act as trustee pending the appointment of a new trustee by the meeting mentioned in the last preceding paragraph of this sub-section,
either solely or jointly with any continuing trustee, as the case requires.
“(2.) A meeting of creditors summoned in accordance with the last preceding sub-section may appoint a person registered under Part VIII. of this Act as qualified to act as a trustee to fill the vacancy.
“(3.) An appointment of the official receiver to act as trustee shall be deemed to have taken effect as from the date upon which the vacancy in the office of trustee occurred.
“(4.) An appointment of a new trustee by a meeting of creditors shall be deemed to have taken effect as from the date upon which the vacancy in the office of trustee occurred, unless the official receiver has been appointed to act as specified in paragraph (c) of sub-section (1.) of this section, in which case…
Overview
The Bankruptcy Act 1946 (C1946A00043) was enacted to amend the Bankruptcy Act 1924-1945 and address certain procedural gaps and issues within the existing legislation. This Act was passed by the Parliament of Australia and received Royal Assent on 15th August, 1946. The primary objective of this Act is to provide greater flexibility and efficiency in the management of bankruptcies, particularly concerning the handling of trustee vacancies and the distribution of dividends in cases where a bankrupt fails to file a statement of their affairs. By introducing these amendments, the Act aims to ensure that the administration of bankruptcies proceeds smoothly and effectively, protecting the interests of both creditors and the bankrupt.
Scope and Application
The Bankruptcy Act 1946 amends the Bankruptcy Act 1924-1945 to enhance the administration of bankruptcy proceedings in Australia. It applies to individuals who are declared bankrupt and to entities involved in the bankruptcy process, including creditors, debtors, and trustees. The Act operates on a national level, applying across the Commonwealth of Australia. It specifies the procedures for the distribution of dividends in cases where a bankrupt fails to file a statement of affairs and provides mechanisms for filling vacancies in the office of a trustee, whether in a composition, scheme of arrangement, or deed of arrangement. The Act's provisions are enforceable through the courts, which have the authority to order the distribution of dividends and to appoint trustees. Importantly, the Act validates certain transactions conducted by an official receiver prior to the Act's commencement, ensuring that these actions remain legally binding. The Act does not specify any exclusions, exemptions, or thresholds, nor does it extend or restrict its application through subordinate instruments.
Key Provisions
- The Bankruptcy Act 1946 introduces several amendments to the Bankruptcy Act 1924-1945. The primary operative sections of this Act include the insertion of new sections 117a, 184, 203a, and 6. Section 117a allows the Court to order the distribution of dividends among creditors even if the bankrupt has failed to file a statement of their affairs, as long as the creditors have proved their debts. Sections 184 and 203a both address the filling of vacancies in the office of trustee, enabling the Court to appoint the official receiver as a trustee, summon a meeting of creditors to appoint a new trustee, or appoint the official receiver to act as trustee pending the appointment of a new trustee. These sections ensure that the property subject to the composition, scheme of arrangement, deed, or deed of arrangement vests in the official receiver or new trustee, who then assumes the same rights, powers, duties, and liabilities as an original trustee. Additionally, section 6 validates certain transactions made by an official receiver purporting to act as trustee prior to the commencement of this Act.
- The Act imposes various obligations and requirements on parties and entities it governs. Trustees, including the official receiver, must ensure that they have the necessary qualifications and registrations as stipulated under Part VIII of the Act. The Court is mandated to act upon applications or reports from the debtor, creditors, or the official receiver to fill vacancies in the office of trustee. Creditors must prove their debts to be eligible for distribution of dividends. The official receiver must adhere to the terms and conditions specified in sections 184 and 203a when appointed as a trustee.
- The Act also delineates offences, penalties, and consequences for breaches. While the Act does not explicitly state maximum penalties, breaches of the trustee duties or failure to comply with the requirements set forth in the Act could potentially lead to civil or criminal liabilities. The Court retains the discretion to impose appropriate sanctions, which could include fines, disqualification from acting as a trustee, or other penalties deemed necessary to enforce compliance with the Act’s provisions.
- Area of Law
- Insolvency Law
- Instrument
- Act
- Concepts
- Commencement Provisions
- Regulatory Standards
- Licensing & Registration
- Enforcement Powers
- Delegated & Subordinate Legislation
