Bankruptcy Act 1927

Legislation au C1927A00003 Not in force Act

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BANKRUPTCY.

 

No. 3 of 1927.

An Act to amend the Bankruptcy Act 1924.

[Assented to 8th April, 1927.]

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 1927.

(2.) The Bankruptcy Act 1924 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 1924-1927.

Commencement.

2. This Act shall commence on the same date as the Principal Act.

District Registrars and Official Receivers.

3. Section twelve of the Principal Act is amended by inserting, after sub-section (4.), the following sub-section:—

“(4a.) Every official receiver who is remunerated by fees and commission only shall, upon his appointment, give security to the satisfaction of the Attorney-General in such sum and in such form as the Attorney-General determines.”.

Extent of jurisdiction of Court.

4. Section twenty of the Principal Act is amended by adding at the end thereof the following sub-section:—

“(4.) Every order decision or award of the Court made under this Act in any cause or matter may be enforced by the Court against all persons bound thereby in the same manner as a judgment of the High Court may be enforced by the High Court.”.

Jurisdiction in chambers

5. Section twenty-one of the Principal Act is amended by inserting before paragraph (a) the following paragraph:—

“(aa) Creditors’ petitions under this Act;”.


6. After section fifty-three of the Principal Act the following section is inserted in Division 1 of Part IV.:—

Acts of bankruptcy committed before commencement of Act.

“53a. Where, before the commencement of this Act, any act or thing is done or omitted to be done, whereby a creditor would but for this Act be entitled under any State Bankruptcy or Insolvency Act to present a petition against a debtor, and no proceedings have been taken, under any such State Act, against the debtor, the doing or omitting to do any such act or thing shall, for the purposes of this Act, be deemed to be an act of bankruptcy committed by the debtor.”.

Power to appoint special manager.

7. Section sixty-four of the Principal Act is amended by omitting from sub-section (3.) the words “is prescribed” and inserting in their stead the words “the official receiver fixes from time to time subject to the approval of the Court or the Registrar”.

Priorities.

8. Section eighty-four of the Principal Act is amended—

(a) by omitting from sub-section (1.) all words to the end of paragraph (c) and inserting in their stead the following words:—

“(1.) Subject to the provisions of this Act, the trustee shall apply the estate of the bankrupt in the following order of priority:—

(a) Firstly, in payment of the costs of administration in the order prescribed by the rules including—

(i) the taxed costs of the petitioning creditor; and

(ii) the remuneration of the trustee;”;

(b) by omitting from paragraph (d) of that sub-section the word “Fourthly” and inserting in its stead the word “Secondly”;

(c) by omitting from paragraph (e) of that sub-section the word “Fifthly” and inserting in its stead the word “Thirdly”;

(d) by omitting from paragraph (f) of that sub-section the word “Sixthly” and inserting in its stead the word “Fourthly”;

(e) by omitting from paragraph (g) of that sub-section the word “Seventhly” and inserting in its stead the word “Fifthly”;

(f) by omitting from paragraph (h) of that sub-section the word “Eighthly” and inserting in its stead the word “Sixthly”;

(g) by omitting from paragraph (i) of that sub-section the word “Ninthly” and inserting in its stead the word “Seventhly”; and

(h) by omitting from sub-section (4.) the words “Subject to sub-section (1.) of this section”.

Payment of expenses incurred by trustee under a deed of arrangement.

4 and 5 Geo. V. c. 47 s. 21.

cf. s. 100.

9. After section eighty-eight of the Principal Act the following section is inserted:—

“88a. Where a deed of assignment under Part XI. of this Act or a deed of arrangement under Part XII. of this Act is avoided by reason of the bankruptcy of the debtor, any expenses properly incurred by the


trustee under the deed in the performance of any of the duties imposed on him by this Act shall be allowed or paid him by the trustee in the bankruptcy as a first charge on the estate.”.

10. After section ninety-one of the Principal Act the following section is inserted in Division 3 of Part VI.:—

Protection of electrical apparatus.

9 Edw. 7 c. 34. s. 16.

“91a. Where any electric lines, meters, accumulators, fittings, works, apparatus or appliances let on hire by or belonging to any local authority, company or person who by or under any Act or State Act or law of a Territory is authorized to supply electricity within any area (in this section referred to as ‘the undertakers’), are placed in or upon any premises, not being in the possession of the undertakers, they shall not be subject to any proceedings in bankruptcy against the person in whose possession the premises may be.”.

Restriction of rights of creditor under execution or attachment.

11. Section ninety-two of the Principal Act is amended by omitting from paragraph (b) of sub-section (2.) the words “seizure and”.

12. After section ninety-six of the Principal Act the following section is inserted:—

Validity of certain payments to bankrupt and transferee.

E.B.A. s. 46.

“96a. A payment of money or delivery of property to a person against whom a sequestration order is subsequently made or to a person claiming by assignment from him, shall, notwithstanding anything in this Act, be a good discharge to the person paying the money or .delivering the property, if the payment or delivery is made before the actual date on which the sequestration order is made and without notice of the presentation of a bankruptcy petition, and is either pursuant to the ordinary course of business or otherwise bona fide.”.

Discharge of bankrupt.

13. Section one hundred and nineteen of the Principal Act is amended—

(a) by omitting from paragraph (a) of sub-section (5.) the word “trustee” and inserting in its stead the words “official receiver”;

(b) by omitting paragraph (b) of sub-section (6.) (including the proviso to that paragraph), and inserting in its stead the following paragraph:—

“(b) suspend the discharge for a specified period; or”; and

(c) by inserting in sub-section (8.), before the words “the trustee”, the words “the official receiver or”.

Effect of order of discharge.

14. Section one hundred and twenty-one of the Principal Act is amended by inserting in paragraph (c) of sub-section (1.) after the word “seduction” the words “or for breach of promise of marriage”.

15. Section one hundred and twenty-three of the Principal Act is repealed and the following section inserted in its stead:—

Notice of order of discharge.

“123. Notice of all orders of discharge granted under section one hundred and nineteen of this Act shall be published in the Gazette,


and in such other manner as is prescribed, and shall be lodged in the office of the Registrar of Titles or Registrar-General or other proper officer of each State and in such other places as are prescribed.”.

Power to annul sequestration order.

16. Section one hundred and twenty-four of the Principal Act is amended by adding at the end of paragraph (b) of sub-section (1.) the words “or that he has obtained a legal acquittance of his debts,”.

17. Section one hundred and eighty-four of the Principal Act is repealed and the following section inserted in its stead:—

Remuneration of trustee.

“184.—(1.) The trustee of a deed may retain out of the estate, as a remuneration for his care and trouble in and about the execution of the trusts thereof, such a sum of money or such commission as is fixed by the creditors, the commission not to exceed Five pounds per centum on the amount realized by the trustee after the deduction of the expenses of realization, subject to the creditors, by resolution, fixing a higher commission on the collection of book debts.

“(2.) Where the trustee pursuant to resolution of the creditors carries on the business of the debtor, he may retain out of the estate, in addition to any remuneration under the last preceding sub-section, such commission, not exceeding One pound ten shillings per centum on the turnover or sales made in the ordinary course of carrying on the business, as the creditors fix by resolution.”.

18. Section two hundred and three of the Principal Act is repealed and the following section inserted in its stead

Trustee’s remuneration.

“203.—(1.) The remuneration of a trustee of a deed of arrangement shall from time to time be fixed as determined by the creditors, and shall be such a sum of money as is fixed by the creditors or shall be in the nature of a commission, the commission not to exceed Five pounds per centum on the amount realized by the trustee after the deduction of the expenses of realization, subject to the creditors, by resolution, fixing a higher commission on the collection of book debts.

“(2.) Where the trustee pursuant to resolution of the creditors carries on the business of the debtor, he may retain out of the estate, in addition to any remuneration under the last preceding sub-section, such commission, not exceeding One pound ten shillings per centum on the turnover or sales made in the ordinary course of carrying on the business, as the creditors fix by resolution.”.

Failure to make full discovery.

19. Section two hundred and ten of the Principal Act is amended by omitting from sub-section (6.) the word “of” (second occurring) and inserting in its stead the word “or”.

Criminal liability after discharge, composition, &c.

20. Section two hundred and eighteen is amended by inserting, after the word “arrangement” (first occurring), the words “or deed of assignment”.

Overview

The Bankruptcy Act 1927 was enacted to amend the Bankruptcy Act 1924. This Act was introduced to address several issues and gaps within the existing framework of bankruptcy law. The Bankruptcy Act 1927 was enacted by the King's Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, and its primary objective is to refine and update the legal processes associated with bankruptcy. This includes adjustments to the roles of District Registrars and Official Receivers, the extent of the Court's jurisdiction, and the enforcement of Court orders. Additionally, the Act seeks to clarify the circumstances under which certain actions can be deemed acts of bankruptcy and to establish the procedures for the appointment of special managers. The policy objective is to ensure that the bankruptcy process is fair, efficient, and aligned with contemporary legal standards.

Scope and Application

The Bankruptcy Act 1927, as amended, applies to individuals and entities involved in insolvency proceedings within the Commonwealth of Australia. The Act pertains to individuals and entities deemed bankrupt, their creditors, trustees, and other parties involved in the administration of bankruptcy proceedings. It governs the conduct and transactions of these parties, including the enforcement of orders and decisions made under the Act. The geographic and jurisdictional reach of the Act is national, applying uniformly across Australia. There are no specific exclusions or exemptions mentioned in the text, although the Act may be subject to interpretation and application through subordinate instruments or regulations. The Act extends its application to include acts committed prior to its commencement and protects electrical apparatus from bankruptcy proceedings when in the possession of third parties. The Act also sets out provisions for the remuneration of trustees and the discharge of bankrupts.

Key Provisions

The Bankruptcy Act 1927 (Act) makes several significant amendments to the Bankruptcy Act 1924 (Principal Act). Firstly, it introduces new requirements for official receivers. According to section 3(4a), every official receiver remunerated by fees and commission must provide security to the satisfaction of the Attorney-General upon appointment, with the sum and form determined by the Attorney-General. This amendment ensures that official receivers are held accountable and provide an additional layer of security for the creditors. The Act also expands the jurisdiction of the Court under section 4(4), allowing any order, decision, or award made by the Court to be enforced in the same manner as a High Court judgment. This provision ensures that the Court’s decisions carry significant weight and can be effectively enforced. Furthermore, section 5(aa) adds creditors’ petitions to the list of matters within the Court’s jurisdiction in chambers, thereby enabling the Court to handle such petitions more efficiently. Section 53a addresses acts of bankruptcy committed before the Act’s commencement, deeming them as acts of bankruptcy for the purposes of the Act if no State proceedings have been initiated. The Act imposes several obligations on parties and entities it governs. For example, section 7 amends the remuneration of the official receiver, allowing the official receiver to fix remuneration subject to the approval of the Court or the Registrar. This change provides flexibility in setting remuneration while maintaining oversight. Additionally, section 8(1) modifies the priority order in which the trustee must apply the estate of the bankrupt, ensuring that costs of administration and trustee remuneration are paid first. This amendment helps in safeguarding the interests of the creditors by ensuring that administrative and trustee expenses are covered promptly. The Act also outlines several offences, penalties, and consequences for breach. For instance, section 19 imposes penalties for failure to make full discovery, although the specific penalties are not detailed in the provided text. Generally, such breaches may lead to legal repercussions, including fines or other penalties as determined by the Court. In summary, the Bankruptcy Act 1927 introduces various amendments to the Principal Act, focusing on the roles and responsibilities of official receivers, the enforcement of Court orders, and the priority of payments from the bankrupt’s estate. It also imposes specific obligations on parties and entities and outlines potential consequences for non-compliance.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.