Bankruptcy Rules (Amendment) (Cth)

Statutory Rules 1992

No. 194 1

__________________

Bankruptcy Rules 2(Amendment)

I, The Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council and under section 4 of the Acts Interpretation Act 1901, make the following Rules under the Bankruptcy Act 1966.

 Dated 23 June 1992.

 

 BILL HAYDEN

 Governor-General

 By His Excellency’s Command,

  

MICHAEL TATE

Minister of State for Justice

____________

1.    Commencement

1.1 These Rules commence on the date of commencement of Part 2 of the Bankruptcy Amendment Act 1991.

2.   Amendment

2.1   The Bankruptcy Rules are amended as set out in these Rules.

3.   Rule 27 (Notice of bankruptcy)

3.1   Subrule 27 (1):

Omit the subrule, substitute:

“(1)

For the purposes of paragraph 19 (1) (a) of the Act, the trustee of a person who becomes a bankrupt must give to the person:

• (a)

  in the case of a bankruptcy by sequestration order—a sealed copy of the order; or

• (b)

  in the case of acceptance by the Registrar, under a direction of the Court, of a debtor's petition relating to the person—a notice informing the person that the debtor’s petition has been accepted and that the person is therefore a bankrupt.

 “(1a) If the trustee is a registered trustee, he or she must give the Official Receiver a copy of the order or notice at the time when the trustee gives the order or notice to the bankrupt.”.

3.2   Paragraph 27 (3) (b):

Omit the paragraph.

3.3   Subrule 27 (4):

Omit “Official Receiver”, substitute “trustee”.

4.   Rule 30 (Affidavit verifying statement of affairs)

4.1   Omit the rule.

5.   Rule 30a (Form of statement of affairs)

5.1   Omit the rule.

6.   Rule 30b (Statement of affairs by joint debtor)

6.1   Omit the rule.

7.   Rule 35 (Application for approval of composition or scheme)

7.1   Omit the rule, substitute:

Modification of Division 5 of Part IV of the Act

“35.

For the purposes of section 76a of the Act, Division 5 of Part IV of the Act is modified as set out in Schedule 1a.”.

8.   Rule 36 (Notice of approval to be published in Gazette)

8.1   Omit the rule, substitute:

Notice of annulment of bankruptcy

“36.

(1) If a trustee files a certificate under subsection 74 (5a) of the Act, the trustee must give a copy of the certificate to the Official Receiver as soon as practicable after filing the certificate.

“(2)

If a trustee files a certificate under subsection 74 (5a) of the Act, the Registrar must publish a notice in the Gazette as soon as practicable after receiving the certificate, stating:

• (a)

  the fact that the bankruptcy has been annulled; and

• (b)

  the date on which it was annulled.”.

9.   Rule 41 (Special provision in relation to appropriation of income)

9.1   Omit the rule.

10.   New Divisions 4b, 4c and 4d of Part III

10.1   After rule 45a, insert:

“Division 4b — Collection of money payable by a bankrupt

under subsection 139p (1) or 139q (1) of the Act

Interpretation

 “45b. In this Division:

‘contribution’ means a contribution payable by a bankrupt under subsection 139p (1) or 139q (1) of the Act.

Payment of contribution in person

 “45c. (1) If the amount of a contribution is paid to the trustee in person, the trustee is not required to accept the payment unless it is made:

• (a)

  at the trustee’s place of business as a trustee; and

• (b)

  by cash or cheque.

“(2)

A payment by cheque is taken not to have been made until the trustee collects the amount for which the cheque is drawn.

Payment of contribution by mail

 “45d. (1) If an amount is sent to the trustee as payment of a contribution, the trustee is not required to accept the payment unless it is in the form of:

• (a)

  a bank draft payable to the trustee; or

• (b)

  a cheque payable to the trustee; or

• (c)

  a money order payable to the trustee; or

• (d)

  a postal order payable to the trustee.

“(2)

For the purposes of subrule (1), the payment is taken not to have been made until the trustee collects the amount.

“(3)

If the trustee pays a delivery charge or postage, or a postal surcharge, in relation to the payment of a contribution, the trustee may deduct from the amount of the contribution the amount of the payment that he or she has made.

Payment of contribution by bank deposit

 “45e. (1) The amount of a contribution may be paid by depositing the amount to the credit of the trustee’s trust account.

“(2)

The payment is taken not to have been made until the amount deposited is credited to the trustee.

Certificate that an amount is due as a contribution

 “45f. (1) The trustee may prepare a certificate in relation to a person who is a bankrupt:

• (a)

  stating that the person is bankrupt; and

• (b)

  stating that the trustee has made an assessment of the bankrupt’s income, under subsection 139w (1) or (2) of the Act, in respect of a period referred to in the certificate; and

• (c)

  setting out the findings of the assessment; and

• (d)

  stating that notice of the assessment was given to the bankrupt under subsection 139w (4) of the Act; and

• (e)

  stating that the amount set out in the certificate is the amount of contribution payable by the bankrupt.

“(2)

In proceedings against the bankrupt for recovery of the amount of a contribution, the certificate is evidence of the matters stated in the certificate.

Notice under section 139zl of the Act not to refer to money that is protected from garnishment or encumbrance

“45g. A notice by the Official Receiver under section 139zl of the Act must not refer to money that is protected, under a law of the Commonwealth, a State or a Territory, from garnishment or encumbrance.

Notice that the bankrupt is no longer employed by an employer

 “45h. (1) This rule applies if:

• (a)

  the Official Receiver gives a notice under section 139zl of the Act to an employer of a bankrupt (in this rule referred to as ‘the employer’); and

• (b)

  the bankrupt ceases to be employed by the employer while the notice is in force.

“(2)

The employer must give a notice to the bankrupt’s trustee, within 21 days after the bankrupt ceases the employment, stating:

• (a)

  that the bankrupt is no longer employed by the employer; and

• (b)

  the date on which the bankrupt ceased to be employed.

“(3)

If the bankrupt commences other employment after ceasing the employment referred to in subrule (1), the bankrupt must notify his or her trustee in writing, within 21 days after commencing the employment, of:

• (a)

  the name and address of the bankrupt’s new employer; and

• (b)

  the address of the place where the bankrupt is employed; and

• (c)

  the amount of the bankrupt’s gross weekly income from that employment.

“(4)

A person who fails, without reasonable excuse, to comply with subrule (2) or (3) commits an offence.

Penalty:  $200.

“Division 4c — Application for permission to travel outside

Australia by a bankrupt who is liable to pay a contribution

under subsection 139p (1) or 139q (1) of the Act

Procedure for hearing application for permission to leave Australia

 “45j. (1) An application under subsection 139zu (1) of the Act must give reasons why the application should be approved.

“(2)

In hearing the application, the Court:

• (a)

  is not bound to apply the rules of evidence; and

• (b)

  may determine the application without undue formality.

“(3)

If:

• (a)

  the hearing involves the participation of the bankrupt or the trustee by telephone; and

• (b)

  before the hearing commence, a party participating in the hearing wishes to raise a matter at the hearing;

the hearing must not proceed until that party has served a copy of his or her arguments in relation to the matter, in accordance with section 309 of the Act, on each party participating in the hearing.

“(4)

As soon as practicable after the Court grants permission for a bankrupt to leave Australia, the Registrar must inform the Secretary to the Department of Foreign Affairs and Trade that permission has been granted.

“Division 4d — Application of the

Fringe Benefits Tax Assessment Act 1986

Interpretation

 “45k. In this Division:

‘the FBT Act’ means the Fringe Benefits Tax Assessment Act 1986.

Modification of the Fringe Benefits Tax Assessment Act 1986

 “45l. (1)   For the purposes of paragraph (e) of the definition of ‘income’ in section 139l of the Act, the following modifications of the FBT Act apply:

• (a)

  references to a year of tax are taken to be references to a contribution assessment period;

• (b)

  references to the taxable value of a benefit are taken to be references to the value of that benefit for the purposes of the Act;

• (c)

  references to the declaration date are taken to be references to the date that occurs 21 days after the end of the contribution assessment period referred to in subsection 139u of the Act in relation to a bankrupt;

• (d)

  references to a declaration to be given to the employer are taken to be references to a declaration to be given to the trustee;

• (e)

  references to a form to be approved by the Commissioner are taken to be references to a form to be approved by the Inspector-General.

“(2)

For those purposes, the further modifications of the FBT Act set out in Schedule 1b apply.

Assessment of value of car benefits based on return made under the Fringe Benefits Tax Assessment Act 1986

 “45m. (1)   If:

• (a)

  a bankrupt who is an employee receives from his or her employer a benefit that is a car fringe benefit under the FBT Act in relation to the bankrupt in relation to the employer of the bankrupt; and

• (b)

  the employer of the bankrupt has made a return to the Commissioner of Taxation in relation to that benefit in relation to a year of tax;

the value of that benefit for the purposes of the Act in relation to a contribution assessment period that coincides with that year of tax is the taxable value of the benefit assessed by the Commissioner.

“(2)

If:

• (a)

  a bankrupt  is employed, and

• (b)

  the employer provides to the bankrupt or an associate of the bankrupt a benefit of the kind referred to in paragraph (1) (a); and

• (c)

  the employer of the bankrupt has not, in relation to that benefit, made a return to the Commissioner of Taxation;

the value of that benefit for the purposes of the Act is to be determined in accordance with section 9 of the FBT Act as modified by this Division.

“(3)

If a bankrupt is not employed, the value for the purposes of the Act of a benefit provided to the bankrupt or an associate of the bankrupt that would, if provided by an employer, be a car fringe benefit for the purposes of the FBT Act, is to be determined in accordance with section 9 of the FBT Act as modified by this Division.

“(4)

For the purposes of subrules (2) and (3), a reference in section 9 of the FBT Act to documentary evidence to be given to an employer is taken to be a reference to documentary evidence to be given to the trustee.

“(5)

In this rule, ‘associate’ has the same meaning in relation to a person who is a bankrupt as that expression has in subsection 26aab (14) of the Income Tax Assessment Act 1936 in relation to a person referred to in that definition as a taxpayer.

Assessment of value where the taxable value of a fringe benefit payment would be reduced by an ‘otherwise deductible’ rule

 “45n. (1)   This rule applies to the following kinds of benefits, being benefits forming part of the income of a bankrupt:

• (a)

  a benefit that:

  • (i)

    is a fringe benefit for the purposes of the FBT Act; and

  • (ii)

    has a taxable value that would be reduced under section 19, 24, 34 or 52 of the FBT Act;

• (b)

  a benefit that is not provided by an employer of the bankrupt, but would be a benefit of the kind referred to in paragraph (a) if it had been provided by an employer of the bankrupt.

“(2)

Subject to subrules (3) and (4), the value of a benefit to which this rule applies is to be reduced under section 19, 24, 34 or 52 of the FBT Act, as the case requires.

“(3)

The reduction in value of a benefit of the kind referred to in paragraph (1) (b) is to be worked out as if the benefit had been provided by an employer of the bankrupt.

“(4)

For the purposes of paragraph (e) of the definition of ‘income’ in section 139l of the Act, the following provisions of the FBT Act, in their application under subrules (2) and (3), are modified as follows:

• (a)

  sections 19, 24, 34 and 52—references to Division 14 of Part III of that Act are to be disregarded;

• (b)

  subsection 24 (1)—omit subparagraph (b) (i) and sub-subparagraphs (h) (ii) (a), (j) (v) (a), and (k) (iv) (a);

• (c)

  subparagraph 24 (1) (b) (ii) and sub-subparagraphs 24 (1) (h) (ii) (b), (j) (v) (b), (k) (iv) (b)—omit ‘ external’;

• (d)

  omit subsection 24 (6).”.

11.   Rule 47 (Statement of realisation and distribution of estate)

11.1   Subrule 47 (2):

Omit “If the trustee sends a notice under subsection 140 (3) or (5) of the Act, he or she must”, substitute “If the trustee sends cheques to creditors under subsection 140 (8) of the Act, the trustee must, when the trustee sends the last of the cheques,”.

12.   Rule 49 (Objection to discharge)

12.1   Omit the rule, substitute:

Trustee to inform the Registrar of return of bankrupt to Australia

“49.

(1) This rule applies to the trustee of the estate of a bankrupt if:

• (a)

  an objection to the discharge of a 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; and

• (b)

  the bankrupt returns to Australia; and

• (c)

  the trustee becomes aware that the bankrupt has returned to Australia.

“(2)

As soon as practicable after becoming aware that the bankrupt has returned to Australia, the trustee must give a written notice to the Registrar that states:

• (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.”.

13.   Rule 50 (Withdrawal of objection)

13.1   Omit the rule, substitute:

Trustee to inform the Registrar of cancellation of objection

“50.

If an objection to the discharge of a bankrupt is cancelled:

• (a)

  by the Inspector-General under subsection 149n (1) of the Act; or

• (b)

  by the Administrative Appeals Tribunal on an application under section 149q of the Act;

the trustee must give, as soon as practicable after the objection has been cancelled, a written notice to the Registrar that states that the objection has been cancelled.”.

14.   Rule 51 (Certificate of discharge)

14.1   Omit the rule.

15.   Rule 51a (Matters prescribed for the purposes of subsections 149 (10) and (13) of the Act)

15.1   Omit the rule.

16.   Rule 52 (Application for discharge)

16.1   Omit the rule.

17.   Rule 53 (Report under subsection 150 (3) of the Act)

17.1   Omit the rule.

18.   Rule 54 (Notice of intention to dispute report)

18.1   Omit the rule.

19.   Rule 55 (Opposition to application for discharge)

19.1   Omit the rule.

20.   Rule 56 (Variation of order of discharge)

20.1   Omit the rule.

21.   Rule 57 (Application for annulment under section 153b or 252b of the Act)

21.1   Subrule 57 (1):

Omit “section 154 or 252a”, substitute “section 153b or 252b”.

22.   New rule 78a

22.1   After rule 78, insert:

Proxies

 “78a (1) An instrument of appointment of a proxy to vote at a meeting held under Part X of the Act must be in accordance with:

• (a)

  if the proxy is appointed to vote on a special resolution under section 204 of the Act—Form 44; and

• (b)

  in any other case—Form 43.

“(2)

If a meeting of creditors is held under Part X of the Act to consider matters relating to the estate of a debtor, an appointment of the debtor as a proxy in relation to that meeting has no effect.”.

23.   New rule 85a

23.1   After rule 85, insert in Part VII:

Application of Division 5 of Part IV of the Act to a meeting under Part X of the Act

 “85a. The provisions of Division 5 of Part IV of the Act with respect to the holding and conduct of a meeting held under section 64 of the Act apply, so far as they are capable of being applied, to the holding or conduct of a meeting held under Division 2 or Division 3 of Part X of the Act.”.

24.   Rule 90 (Modification of provisions of Act applied by section 248)

24.1   Paragraph 90 (a):

Omit the paragraph.

24.2   Paragraph 90 (c):

Omit the paragraph, substitute:

• “(c)

  section 74 is omitted and the following section substituted:

    ‘74.  (1)   The order for administration of the estate being administered under Part XI is annulled on the day on which a special resolution is passed under subsection 73 (4).

 

     ‘(2)   The trustee of the estate must give to the Registrar, as soon as practicable after that day, a certificate setting out:

• (a)

  the name of the estate; and

• (b)

  the number of the administration; and

• (c)

  the date of the annulment of the order for administration of the estate.

    ‘(3)   The Registrar must enter in his or her records:

• (a)

  the fact that the order for administration of the estate has been annulled; and

• (b)

  the date of the annulment.’;”.

24.3   Paragraph 90 (d):

Omit the paragraph, substitute:

“(c) section 75 of the Act is modified by:

(i)

omitting subsections (2), (6), (7) and (8); and

(ii)

omitting paragraph (4) (b) and substituting:

‘(b)

it is made to appear to the Court that:

(i)

the creditors; or

(ii)

the legal personal representative; or

• (iii)

  the beneficiary who proposed the composition or scheme of arrangement;

 will suffer injustice or undue delay if the composition or scheme of arrangement proceeds; or

• (c)

  it is made to appear to the Court that the approval of the creditors was obtained by a misrepresentation by the legal personal representative; or

• (d)

  it is made to appear to the Court that it is desirable that the deceased debtor’s:

(i)

affairs be investigated; or

(ii)

estate be administered;

 under this Act; or

• (e)

  it is likely that the creditors will receive a greater dividend if the estate is again administered under this Act;’;”.

25.   Part IX (Meeting of creditors)

25.1   Omit the Part, substitute:

“PART IX — MEETINGS OF CREDITORS OF A

DECEASED DEBTOR

Application

“93.

This Part applies in relation to a meeting of creditors of the estate of a deceased debtor.

Procedure for holding meeting of creditors of a deceased debtor

“94.

The following modifications of Division 5 of Part IV of the Act apply to a meeting to which this Part applies:

• (a)

  subject to paragraphs (c) and (d), references in that Division to a bankrupt are taken to be references to the deceased debtor;

• (b)

  references in that Division to a joint bankruptcy are taken to be omitted;

• (c)

  the first reference in paragraph 64a (1) (a) of the Act to the bankrupt is taken to be a reference to the legal personal representative of the deceased debtor;

• (d)

  references in paragraphs 64g (a) and (i) and subsections 64j (3), 64k (2), (3) and (6), 64l (2), 64p (2), 64s (2) and (3) and 64zc (6) of the Act to the bankrupt are taken to be references to the legal personal representative of the deceased debtor;

• (e)

  section 64ze of the Act is omitted.”.

26.   Part IXa (Special provisions relating to joint debtors)

26.1   Omit the Part.

27.   Rule 119a (Prescribed time—subsection 31a (6) of the Act)

27.1   After subrule 119a (1), insert:

 “(1a) For the purposes of subsection 31a (6) of the Act, the prescribed time in relation to the Registrar’s power under paragraph 31a (1) (o) of the Act is 24 hours after the day on which the Registrar exercises that power.”.

28.   Rule 127 (Conduct money and witnesses’ allowances)

28.1   Subrule 127 (1):

After “a person”, insert “who is not a debtor or a bankrupt”.

29.   Rule 129 (Application for summons under subsection 81 (1) of the Act)

29.1   Subrule 129 (2):

Omit the subrule, substitute:

“(2)

If the application is of a kind referred to in paragraph (1) (c), the Registrar must serve on the person to be examined:

• (a)

  a copy of the application; and

• (b)

  a copy of the affidavit in support of the application; and

• (c)

  a notice setting out the effect of subrule (2a).

 “(2a) The person to be examined may file with the Registrar, within 7 days of being served with the documents referred to in subrule (2):

• (a)

  a notice objecting to the production of:

  • (i)

    the books or classes of books referred to in the application for a summons; or

  • (ii)

    any of the books or classes of books that are referred to in the notice; and

• (b)

  an affidavit that states the grounds of the objection.”.

29.2   Subrule 129 (3):

Omit “paragraphs 2 (a) and (b)”, substitute “subrule (2a)”.

30.   Rule 129aa (Summons to relevant person under subsection 81 (1) of the Act)

30.1   Subparagraph 129aa (5) (c) (i):

After “relevant person”, insert “by personal service or”.

31.   Rule 129b (Application during examination for production of books)

31.1   Omit “for a direction that the person being examined produce specified books, or classes of books, at the examination”, substitute “under subsection 81 (1) of the Act for a summons in relation to the person being examined”.

32.   New rule 161b

32.1   After rule 161a, insert:

Official Receiver’s charges and fees

 “161b. (1) For the purposes of subsection 163a (2) of the Act, the following fees are prescribed for the exercise of a power under the Act, these Rules or regulations made under the Act (other than a power referred to in subrule (4) or (5)) by the Official Receiver personally, at the request of the trustee of the estate of a bankrupt:

• (a)

  if the Official Receiver is a Level 1 officer in the Senior Executive Service of the Australian Public Service, or an officer of a higher classification—$150 for each hour, or part of an hour, during which the power is exercised;

• (b)

  if the Official Receiver is an Insolvency and Trustee Officer Grade 1 in the Australian Public Service, or an officer of an equivalent or higher classification who is not referred to in paragraph (a)—$100 for each hour, or part of an hour, during which the power is exercised.

“(2)

For the purposes of subsection 163a (2) of the Act, the following fees are prescribed for the exercise of a power under the Act, these Rules or regulations made under the Act (other than a power referred to in subrule (4) or (5)) by an officer assisting the Official Receiver for the purposes of subsection 15 (1) of the Act, at the request of the trustee of the estate of a bankrupt:

• (a)

  if the officer is a Level 1 officer in the Senior Executive Service of the Australian Public Service, or an officer of a higher classification—$150 for each hour, or part of an hour, during which the power is exercised;

• (b)

  if the officer is an Insolvency and Trustee Officer Grade 1 in the Australian Public Service, or an officer of an equivalent or higher classification who is not referred to in paragraph (a)—$100 for each hour, or part of an hour, during which the power is exercised;

• (c)

  if the officer is an Insolvency and Trustee Officer Grade 2 in the Australian Public Service, or an officer of an equivalent or lower classification—$75 for each hour, or part of an hour, during which the power is exercised.

“(3)

For the purposes of subrule (1), a person who for the time being performs the duties of an office of a particular classification in the Australian Public Service while acting as Official Receiver is taken to be an officer of that classification.

“(4)

For the purposes of subsection 163a (2) of the Act, a fee of $100 is prescribed for:

• (a)

  the issue of an offshore information notice under subsection 81a (1) of the Act at the request of a trustee; or

• (b)

  the variation of an offshore information notice under subsection 81c (2) of the Act at the request of a trustee.

“(5)

For the purposes of subsection 163a (2) of the Act, a fee of $100 is prescribed for the issue of a notice under paragraph 139zl (1) (b) or 139zq (1) (b) of the Act requiring a person to make a payment or payments to a trustee.”.

33.   Rule 162 (Scale of costs)

33.1   Subrule 162 (2b):

Omit “22 June 1991”, substitute “1 July 1992”.

33.2   Subrule 162 (2b):

Omit “13.56%”, substitute “2.92%”.

34.   Rule 182 (Fees or percentages payable to the Official Trustee)

34.1   Subrule 182 (4):

Omit the subrule, substitute:

“(4)

For the purposes of subrule (2), the prescribed amount in respect of an estate or a debtor is determined using the formula:

amount realised — (surplus + securities + business costs)

where:

‘amount realised’ means the total amount realised or brought to credit by the Official Trustee in the estate or in relation to the debtor, as the case may be;

‘surplus’ means the amount to which the bankrupt is entitled under section 154 of the Act;

‘securities’ means the amount paid to secured creditors in respect of their securities;

‘business costs’ means the amount paid by the Official Trustee in carrying on the business of the bankrupt, deceased person or debtor.”.

35.   Schedule 1

35.1   Form 10:

Omit “Rules 30 and”, substitute “Rule”.

35.2   Forms 14, 23, 24 and 25:

Omit the Forms

35.3   Form 36:

Omit “Rules 79 and 98”, substitute “Rule 79”.

36.   New Schedules 1a and 1b

36.1   After Schedule 1, insert:

SCHEDULE 1a Rule 35

MODIFICATIONS OF DIVISION 5 OF PART IV OF THE ACT

IN ITS APPLICATION TO MEETINGS OF CREDITORS

UNDER DIVISION 6 OF PART IV OF THE ACT

1.    Section 64b (Certain matters to be included in notice of meeting)

1.1   Add at the end:

“(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 the bankrupt’s statement of affairs.”.

2.   Section 64e (Notice about voting by proxy)

2.1   Omit the section, substitute:

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.”.

3.   Section 64g (Agenda to be set out in notice of meeting)

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;”.

4.   Section 64r (Tabling of bankrupt’s statement of affairs)

4.1   Omit the section, substitute:

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.

“(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.   Section 64s (Statements and questions)

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.”.

6.   Section 64t (Motions)

6.1   Omit the section, substitute:

Motions

 “64t. (1) The President must then call for a motion for a special resolution to approve the bankrupt’s proposal for a compromise or scheme of arrangement.

“(2)

If a motion is:

• (a)

  not proposed; or

• (b)

  proposed but not passed;

the President may close the meeting.”.

7.   Section 64u (Remuneration of registered trustee)

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;

the President must ask the trustee to lay before the meeting a statement of the amount of remuneration drawn by the trustee form the funds of the bankrupt’s estate before the meeting was held.

“(9)

The trustee must comply with the President’s request.”.

8.   Section 64v (Appointment of committee of inspection)

8.1   Omit the section.

9.   Section 64w (Other business)

9.1   Omit the section.

10.   Section 64x (Next meeting)

10.1   Omit the section.

11.   Section 64zb (Manner of voting)

11.1   After subsection 64zb (1), insert:

 “(1a) A creditor may, in a written vote given to the trustee at least 2 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.”.

12.   Section 64ze (Joint bankruptcies)

12.1   Omit the section.

SCHEDULE 1b Subrule 45l (2)

MODIFICATIONS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

1.   Section 9 (Taxable value of car fringe benefits—statutory formula)

1.1   Paragraph 9 (2) (c):

Omit the paragraph, substitute:

• “(c)

  the statutory fraction is:

  • (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—0.06;

     (b) where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was not less than 25,000 and not more than 40,000—0.1;

     (c) where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was not less than 15,000 and not more than 24,999—0.18; or

     (d) in any other case—0.24;

  • (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—0.06;

     (b) where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was not less than 25,000 and not more than 40,000—0.1;

     (c) where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was not less than 15,000 and not more than 24,999—0.18; or

     (d) in any other case—0.24;”.

1.2   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 the bankrupt holds records showing the number of kilometres travelled by the car during the previous year—that number of kilometres; or

  • (ii)

    if the bankrupt does not hold records of that kind—the number calculated in accordance with the formula

   where:

   A is the number of whole kilometres travelled by the car during that part of the contribution assessment period for which the car was held by the provider (in this subsection referred to as the ‘holding period’);

   B is the number of days in the contribution assessment period; and

   C is the number of days in the holding period; and”.

[NOTE:  The reference to a car “held by the provider” is to a car held by the provider of the benefit but made available to the bankrupt. See subsection 9 (1) of the FBT Act, from which the usage is derived.]

1.3.   Sub-subparagraph 9 (2) (e) (ia) (b):

Omit the sub-subparagraph.

[Example 9.1.   Assessment in the first contribution assessment period.

A car is purchased in June 1990 for the use of a bankrupt.

 The purchase price of the car is $20,000. During the period up till 30 June 1991, the bankrupt uses the car on 200 days and travels 10,000 kilometres in that period. The Bankruptcy Amendment Act 1991 and Division 4b of Part III of the Bankruptcy Rules commence on 1 July 1992. Since the Bankrupt was already a bankrupt on 1 July 1992, the first contribution assessment period commences on that date During the first contribution assessment period, the bankrupt’s contribution to expenses is $300.

The annualised number of kilometres according to the formula is:

= 18250 kilometres.

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): 0.18;

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 - E is:

- 300 = $3,300.

Example 9.2.   Assessment in the second contribution assessment period.

Suppose 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 the bankrupt’s contribution remains $300. All figures will remain the same except the statutory fraction, which will be 0.1.

According to the formula, the value of the benefit in the second contribution assessment period is:

- 300 = $1,700.]

2.   Section 10 (Taxable value of car fringe benefits—cost basis)

2.1   Omit the section.

3.   Section 10a (No reduction of operating cost in a log book year of tax unless log book records and odometer records are maintained)

3.1   Omit the section.

4.   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)

4.1   Omit the section.

5.   Section 10c (Nominated business percentage to be reduced if it exceeds business percentage established during applicable log book period or if it is unreasonable)

5.1   Omit the section.

6.   Section 12 (Depreciated value)

6.1   Omit the section.

7.   Section 22a (Taxable value of in-house expense payment fringe benefits)

7.1   Omit the section.

8.   Section 23 (Taxable value of external expense payment fringe benefits)

8.1   Omit “external”.

9.   Section 26 (Taxable value of non-remote housing fringe benefits)

9.1   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.”.

10.   Section 28 (Indexation factor for valuation purposes—non-remote housing)

10.1   Omit the section.

11.   Section 29 (Taxable value of remote area accommodation)

11.1   Omit the section.

12.   Section 29a (Indexation factor for remote area accommodation)

12.1   Omit the section.

13.   Section 31 (Taxable value of living-away-from-home allowance fringe benefits)

13.1   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 is 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 31.1   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 cost of accommodation (i.e. 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) of the FBT Act as modified, 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.]

14.   Section 32: (Airline transport benefits)

14.1   Sub-subparagraph 32 (b) (ii) (b):

Omit “and”.

14.2   Paragraph 32 (c):

Omit the paragraph.

15.   Section 36 (Taxable value of board fringe benefits)

15.1   Omit the section, substitute:

“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;

 $35; or

• (b)

  in relation to a later contribution assessment period—a sum worked out according to the formula:

35 ¥ 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 on 1 July 1992 and ends immediately before the start of the financial year in which the contribution assessment period commences.”.

16.   Section 37 (Reduction of taxable value—“otherwise deductible” rule)

16.1   Omit the section.

17.   Division 11 of Part III (Property fringe benefits)

17.1   Omit the Division.

18.   Section 46 (Year of tax in which residual benefits taxed)

18.1   Omit the section, substitute:

Contribution assessment period in which residual fringe benefits are to be assessed

“46.

A residual fringe 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.”.

19.   Section 48 (Taxable value of in-house non-period residual fringe benefits)

19.1   Omit the section.

20.   Section 49 (Taxable value of in-house period residual fringe benefits)

20.1   Omit the section.

21.   Section 50 (Taxable value of external non-period residual fringe benefits)

21.1   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.”.

22.   Section 51 (Taxable value of external period residual fringe benefits)

22.1   Omit the section.

23.   Division 14 (Reduction of taxable value of miscellaneous fringe benefits)

23.1   Omit the Division.

24.   Division 14a (Amortisation of taxable value of fringe benefits relating to remote area home ownership schemes)

24.1   Omit the Division.

25.   Division 14b (Reducible fringe benefits relating to remote area home ownership repurchase schemes)

25.1   Omit the Division.

26.   Section 136 (Interpretation)

26.1   Subsection 136 (1):

Insert the following definition:

“ ‘contribution assessment period’ has the same meaning as in the Bankruptcy Act 1966;”.

26.2   Subsection 136 (1) (definition of “family member”):

Omit the definition, substitute:

“ ‘family member’, in relation to:

• (a)

  a benefit provided to a employee, or to an associate of a employee, means:

  • (i)

    the employee; or

  • (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.”.

____________________________________________________________

NOTES

1. Notified in the Commonwealth of Australia Gazette on 30 June 1992.

2. Statutory Rules 1968 No. 2 as amended by 1975 No. 52; 1976 Nos. 105, 143 and 235; 1977 Nos. 32 and 136; 1978 No. 19; 1979 Nos. 157 and 243; 1980 Nos. 385 and 386; 1981 Nos. 40, 304 and 305; 1982 No. 247; 1984 Nos. 23 and 155; 1986 Nos. 84, 95, 96 and 323; 1987 Nos. 21, 51, 54 and 223; 1988 Nos. 19, 261, 342 and 343; 1989 Nos. 176, 182, 183, 245 and 376; 1991 No. 117.