EXPLANATORY STATEMENT
BANKRUPTCY ACT 1966
BANKRUPTCY RULES (AMENDMENT)
STATUTORY RULES NO. 19 OF 1988
Issued by the Authority of the Minister for Justice.
The Bankruptcy Rules (Amendment), Statutory Rules No of 1988 (the rules) amend the Bankruptcy Rules made under the Bankruptcy Act 1966 (the Act) to achieve 5 main objectives.
The rules will enhance the ability of Official Receivers in Bankruptcy to monitor the administration of bankrupt estates by registered trustees. Official Receivers are statutory office holders under the Bankruptcy Act with responsibility for supervising the activities of registered trustees in bankruptcy. The rules will facilitate the exercise of this responsibility by requiring registered trustees to give Official Receivers notice of various matters relating to insolvencies administered by registered trustees.
The rules make changes to procedures in bankruptcy proceedings. They provide for the making of consent orders by courts exercising jurisdiction in bankruptcy, and for the enforcement of judgments or orders in accordance with the rules of the particular court. The rules enable the Registrar in Bankruptcy to issue summonses to persons to produce books and documents, without having to attend and give evidence on oath at an examination.
The rules rationalise mandatory advertisement of various steps such as the holding of meetings of creditors which take place in the administration of bankruptcies.
The rules also revise upwards various money amounts provided for by the Act which are capable of variation by prescription to take account of erosion of money values by inflation.
Finally, the rules make some minor changes to eliminate incorrect references to statutory provisions and to correct anomalies.
Details of the provisions of the rules are as follows.
Rule 1
Rule 1 provides that the rules shall come into operation on 1 March 1988.
Rule 2
Rule 2 amends rule 26 of the Bankruptcy Rules. Formerly, subrule 26(2) of the Bankruptcy Rules provided that a person who furnished to the Registrar a form of sequestration order for signing and sealing shall furnish one in respect of each debtor, and one additional copy. Paragraph 2(a) of the rules as amended will alter subrule 26(2) to provide that 2 additional copies of a sequestration order shall be furnished to the Registrar. Paragraph 2(b) substitutes a new subrule 26(4) for existing subrule 26(4). New subrule 26(4) provides that in a case where the Official Trustee is not the trustee that the Registrar shall cause one copy of the sequestration order to be sent to the trustee, and one copy to the Official Receiver. Where the Official Trustee is trustee, a copy of the sequestration order shall be sent to the Official Receiver.
Rule 3
Rule 3 provides for the repeal of rule 28 of the Bankruptcy Rules. Former rule 28 required the Registrar to advertise a bankruptcy in newspapers, in addition to the requirement that bankruptcies be advertised in the Gazette.
Rule 4
Rule 4 inserts new “Division 8A - Report by Trustee” comprising rule 31A into the Bankruptcy Rules. Rule 31A provides that where a registered trustee files a report on the conduct, trade dealings, property and affairs of a bankrupt with the Registrar, the trustee shall send a copy of the report to the Official Receiver.
Rule 5
Rule 5 amends rule 32 of the Bankruptcy Rules. Paragraph 5(a) inserts subrule 5(1B) which provides that where a registered trustee applies for an examination of a bankrupt under subsection 69(1) of the Bankruptcy Act 1966 (the Act), the trustee shall send a copy of the summons to the Official Receiver. Paragraph 5(b) amends subrule 32(3) by repealing the requirement that the date, time and place fixed for the holding of the public examination be advertised in newspapers, as well as in the Gazette.
Rule 6
Rule 6 repeals rule 33 of the Bankruptcy Rules relating to the notification of the resumption of adjourned examinations under section 69 or section 81 of the Act, and inserts a new rule 33. This rule requires the applicant for the examination to give notice of the date, time and place fixed for the commencement of the examination of the bankrupt or the further hearing to be served on the bankrupt, the other person or where the examination had already commenced to give notice to anyone else who has taken part in the examination either personally or by an agent, counsel or a solicitor or by the Official Receiver.
Rule 7
Rule 7 amends rule 40 of the Bankruptcy Rules which prescribes an order of priority of payments in the distribution of moneys realized by a trustee. Paragraph 40(d) confers a priority in respect of the taxed costs of a petitioning creditor or the taxed costs of an applicant for a sequestration order under Part X of the Act. As amended, rule 7 will extend the priority under paragraph 40(d) to the taxed costs of the person administering the estate of a deceased person, who petitions for the administration of the estate in bankruptcy.
Rule 8
Rule 8 amends rule 46 of the Bankruptcy Rules by repealing the requirement that the trustee publish notice of his or her intention to declare a dividend in newspapers. The requirement to publish intention in the Gazette will remain.
Rule 9
Rule 9 amends rule 49 of the Bankruptcy Rules to substitute a requirement that a person who enters an objection to the discharge of a bankrupt shall serve a copy of the notice of objection on the Official Receiver in place of the requirement that a copy of the notice be served on the Inspector-General.
Rule 10
Rule 10 amends rule 50 of the Bankruptcy Rules to substitute a requirement that a person who withdraws an objection to the discharge of a bankrupt shall serve a copy of the notice of withdrawal on the Official Receiver, in place of the requirement that a copy of the notice be served on the Inspector-General.
Rule 11
Rule 11 amends rule 52 of the Bankruptcy Rules. Subrule 52(1) provided that a bankrupt shall attach to an application for discharge under section 150 of the Act a list certified by the trustee setting out the names and addresses of the bankrupt’s creditors. Rule 11(a) inserts a requirement that the bankrupt file an affidavit in support of his or her application for discharge into subrule 52(1). Rule 11(b) inserts subrule 52(3A) which requires that not later than 14 days before the hearing of an application for discharge, the Registrar shall serve on the Official Receiver a copy of the bankrupt’s application and notice of the date, time and place fixed for the hearing of the application.
Rule 12
Rule 12 substitutes subrule 53(2) of the Bankruptcy Rules. The new subrule provides that where a trustee files a report on the conduct, trade dealings, property and affairs of a bankrupt in connexion with the bankrupt’s application for
discharge the trustee shall serve a copy of the report on the bankrupt and the Official Receiver, except where the trustee is the Official Trustee.
Rule 13
Rule 13 amends rule 54 of the Bankruptcy Rules to provide that a bankrupt who intends to dispute matters raised by the trustee in his or her report about the bankrupt’s application for discharge shall serve on the Official Receiver as well as the trustee notice in writing of that intention together with particulars of the statements in the report that the bankrupt intends to dispute, in cases where the trustee is a registered trustee.
Rule 14
Rule 14 amends rule 55 of the Bankruptcy Rules by substituting paragraph (6). Rule 55 required a creditor who intended to oppose a bankrupt’s application for discharge to file a notice setting out his or her grounds of opposition and to serve a copy of that notice on the bankrupt and the trustee. The amendment will require the creditor to serve the notice on the Official Receiver, as well as the bankrupt and the trustee, where the trustee of the estate is a registered trustee.
Rule 15
Rule 15 amends rule 56 of the Bankruptcy Rules to insert a requirement that a bankrupt who applies to the Court to vary an order of discharge will serve a copy of the application on the Official Receiver, as well as the trustee and each creditor whose debt had been proved before the order was made, in cases where a registered trustee is trustee of the estate.
Rule 16
Rule 16 amends rule 57 of the Bankruptcy Rules to provide that an applicant for an order annulling a bankruptcy or annulling an order for the administration of the estate of a deceased person in bankruptcy shall serve a copy of the application on the Official Receiver as well as the trustee, where the trustee is a registered trustee.
Rule 17
Rule 17 corrects an erroneous reference to subsection 155(2) of the Act in paragraph 60(1)(b) of the Bankruptcy Rules. Registered trustees are required to enter into bonds under subsection 155(3A) of the Act, not subsection 155(2) as referred to in paragraph 60(1)(b).
Rule 18
Subsection 155(5B) of the Act provides that the Registrar or any other person may apply to the Court for an order cancelling or suspending for a period the registration of a
person as a trustee. Rule 18 inserts new rule 61B, which provides that where an application is made to the Court under subsection 155(5B) of the Act one copy of the application shall be served on each of the respondent trustee and the Official Receiver.
Rule 19
Rule 19 amends rule 62 of the Bankruptcy Rules to provide that where a registered trustee accepts office as trustee of an insolvency administration under subsection 157(3) of the Act, the trustee who is already trustee will be required to notify the Official Receiver, as well as the Registrar, of the acceptance by the successor trustee of office. Rule 62 formerly provided only for notification of the Registrar.
Rule 20
Rule 20 provides for the insertion of a new rule 66A. Section 180 of the Act provides that the Court may accept the resignation of a registered trustee from the office of trustee of an estate. The new subrule 66A(1) provides that where a registered trustee makes an application to resign under section 180, he or she shall serve a copy of the application on the Official Receiver the bankrupt and any creditor whose name and address is known to the trustee. New Subrule 66A(2) provides that a statement of realisations and distributions in accordance with Form 21 shall be lodged with the Court together with the application to resign.
Rule 21
Rule 21 substitutes a new rule 69 for former rule 69 of the Bankruptcy Rules. The former rule required the Registrar to notify the Official Trustee and to publish in the Gazette the fact that a trustee had been removed from office. The new rule 69 requires the Registrar to notify the Official Receiver of the removal from office of a trustee, but does not require publication of a notice in the Gazette.
Rule 22
Rule 22 amends rule 70A to enable the Inspector-General in Bankruptcy to be represented by the Official Receiver at the hearing of any application on which the Inspector-General is entitled to be heard. Rule 70A formerly referred to specific provisions of the Act which conferred a right of appearance on the Inspector-General.
Rule 23
Rule 82 of the Bankruptcy Rules modifies general provisions of the Act applied to deeds of assignment by section 231 of the Act. Rule 23 amends rule 82 by the insertion of paragraph (aa) which provides that section 112 of the Act will not apply to deeds of assignment.
Rule 24
Rule 83 of the Bankruptcy Rules modifies general provisions of the Act applied to deeds of arrangements by section 237 of the Act. Rule 24 amends rule 83 by the insertion of paragraph (aa) which provides that section 112 of the Act will not apply to deeds of arrangement.
Rule 25
Rule 90 of the Bankruptcy Rules modifies general provisions of the Act applied to the administration of the estates of deceased persons by section 248 of the Act. Paragraph 25(a) inserts a new paragraph 90(fa) modifying section 109 in its application to administrations under Part XI of the Act. The effect of the modification is to confer priority for the payment of realisations in respect of the taxed costs of a person administering the estate of a deceased person. Paragraph 25(b) inserts paragraph 90(ga) which provides that section 112 of the Act will not apply to the administration under Part XI of the Act of the estates of deceased persons in bankruptcy.
Rule 26
Rule 92 of the Bankruptcy Rules provides for the notification of the convening of the first meeting of creditors of a bankrupt. Paragraph 92(1)(a) required the trustee to cause notice of the date, time and place of the first meeting of creditors to be published in the Gazette and in newspapers. Rule 26 provides for the omission of paragraph 92(1)(a) from rule 92.
Rule 27
Rule 93 of the Bankruptcy Rules requires the trustee to convene meetings other than the first meeting of creditors by notice in accordance with Form 42. Rule 27 amends rule 93 to require the trustee to give notice of the time, date and place fixed for the holding of the meeting and of the business proposed to be conducted at the meeting to each creditor of the bankrupt whose name and address is known to the trustee. The amendment dispenses with the requirement that the notice of meeting be in accordance with the prescribed form.
Rule 28
Former rule 97 of the Bankruptcy Rules required the person by whom a meeting of creditors was convened to give written notice of the adjournment to all the creditors, and notice in accordance with the prescribed form of the date, time and place fixed for the resumption of the meeting. Rule 28 repeals the former rule.
Rule 29
Subrule 98(3) of the Bankruptcy Rules provided that where creditors passed a special resolution under section 181 of the
Act removing a registered trustee from the office of trustee the chairman was to cause a copy of the certificate of special resolution to be served on the trustee who had been removed from office and on the trustee who had been appointed to the vacancy. Rule 29 provides for the extension of the requirement on the chairman to give notice so that the Official Receiver will receive notice of the passing of a special resolution.
Rule 30
Rule 101 of the Bankruptcy Rules makes provision in relation to the address of persons for the purpose of service of documents. Paragraph 101(3)(a) formerly provided that where a person is represented by a solicitor, the address given as the address for service shall be not more than 24 kilometres from the office of the Registrar. Rule 30 replaces this requirement with a requirement that the address for service be within the bankruptcy district in which the document stating the address is filed.
Rule 31
Rule 31 provides for the insertion of a new rules 114A and 114B into the Bankruptcy Rules.
Subrule 114A(1) provides that parties to a proceeding or their solicitors may file a consent in writing to the making of an order at the place where the proceedings were commenced or if the proceeding has been transferred under section 35 of the Act, at the place to which it was transferred. Subrule 114A(2) requires the Registrar to bring the consent before a Judge, and empowers a Judge to direct the Registrar to draw up, sign and seal an order of the Court in accordance with the terms of the consent, without the need for any further application. Subrule 114A(3) provides that the order made shall state that it was made by consent and shall be of the same force and validity as if it had been made after a hearing in Court.
Subrule 114B(1) provides that for the purposes of enforcing a judgment or order of the Court under the Act the Court may make any order, issue any writ or take any step that could be made, issued or taken by the Court in the exercise of its general jurisdiction. Subrule 114B(2) requires the Court to use the procedures and forms of process of the Court in its general jurisdiction and empowers officers of the Court to exercise the powers and perform the functions of an officer of that Court in its general jurisdiction. Subrule 114B(3) enables an application to be made to the Court for directions in relation to the enforcement of judgments and orders. Subrule 114B(4) preserves the operation of other provisions of the Bankruptcy Rules relating to the enforcement of judgments and orders.
Rule 32
Subrule 125(1) of the Bankruptcy Rules empowers the Registrar to summon a person to attend before the Court to give evidence or to give evidence and produce any document in the person’s custody or control. Rule 32 amends subrule 125(1) so to empower the Registrar to issue a summons to a person to produce documents, as well as to give evidence and to give evidence and produce documents.
Rule 33
Rule 33 inserts rule 141A into the Bankruptcy Rules. New rule 141A will enable a Court to admit into evidence a statement made in an affidavit which is based on the deponent’s information or belief, where the deponent sets out the source of his or her information or the grounds for his or her belief.
Rule 34
Subrule 156(1) of the Bankruptcy Rules provides that where the Court directs that inquiries be made or accounts be taken, the Registrar may summon a person to attend before the Registrar or the person at whose request the summons was issued to give evidence, and to produce any books or documents in his or her custody and control. New rule 34 will amend subrule 156(1) to provide that the summons may require a person to give evidence and to produce books and documents, or simply to produce books and documents on a specified date and at a specified time and place.
Rule 35
Section 167 of the Act provides for the taxing of accounts rendered to the trustee of a bankrupt estate in respect of services performed in relation to an estate. Paragraph 167(2)(a) of the Act provides that bills of costs of less than $300 or a greater prescribed amount need not be submitted for taxation before they are paid. Rule 161A of the Bankruptcy Rules prescribed the amount of $1000 so that bills of costs of less than $1000 need not be submitted for taxation. Rule 35 substitutes $2000 for $1000 as the prescribed amount for the purposes of paragraph 167(2)(a) of the Act.
Rule 36
This rule inserts a new subrule 162(2A) into the Bankruptcy Rules. New subrule 162(2A) provides that where a creditor’s petition founded upon noncompliance by a debtor with a bankruptcy notice is dismissed by the Court, the solicitor for the petitioning creditor shall be allowed costs, in addition to his or her proper disbursements, in the amount $750. Paragraph 36(b) amends subrule 162(3) to provide that where a solicitor brings in a bill of costs under new subrule 162(2A), the solicitor will not be required to itemize details of the work involved or services performed, nor to attend or be represented on the taxing of the bill.
Rule 37
Rule 179 of the Bankruptcy Rules prescribes certain fees and percentages payable to the Registrar in Bankruptcy. Rule 37 revises upwards certain monetary amounts specified in rule 179. Subrules 179(2) and (3) make fees payable in respect of the furnishing of accounts by a trustee. The fees payable are percentages of prescribed amounts, and the prescribed amounts are amounts received by the trustee during the accounting period for distribution to proved creditors.
Paragraph 179 (4)(a) formerly prescribed a fee equal to 3% of the prescribed amount where the prescribed amount is less than $20,000. New paragraph 37(a) substitutes the amount of $50,000 for the amount of $20,000.
Paragraph 179(4)(b) formerly prescribed a fee equal to $600 and an additional amount equal to 2-1/2% per annum of the prescribed amount where the prescribed amount is greater than $20,000 but less than $50,000. New paragraph 37(d) substitutes the sum of $1,500 for $600. New paragraph 31(b) and (c) amend paragraph 179(4)(b) to change the prescribed amount to a sum greater than $50,000 but less than $100,000.
Paragraph 179(4)(c) formerly prescribed fees in other cases, those being a fee of $1,100 and an additional amount equal to 1-1/4% per annum of the prescribed amount where the prescribed amount exceeds $40,000. New paragraph 37(e) substitutes the amount of $2,750 for $1,100. New paragraph 37(f) substitutes the amount of $100,000 for $40,000.
Paragraph 37(g) amends subrule 179(5) which defined the prescribed amount as being the sum of the total amounts received by the trustee. The effect of the amendment is that the prescribed amount will be defined to mean the total amount received by the trustee for distribution to creditors, thus preventing the taking of a fee on a surplus payable to the bankrupt.
Rule 38
Section 20J of the Act enables interest at the prescribed rate on moneys held in the Common Investment Fund maintained by the Official Trustee to be credited to estates or funds being administered by the Official Trustee in certain circumstances. Rule 195A of the Bankruptcy Rules formerly prescribed 10% per annum as the rate of interest. Rule 38 amends rule 195A to prescribe a new rate of interest of 8% per annum.
Rule 39
Schedule 1 to the Bankruptcy Rules prescribes a number of forms, and rule 39 will amend Forms 26 and 27, will omit Form 42 and will substitute a new Form 48 for the existing Form 48.
Paragraph 39(a) amends Form 26, Application for Order of Discharge, by inserting provision for an affidavit setting out the facts upon which the applicant bankrupt relies in seeking an order for discharge.
Paragraph 39(b) amends Form 27, Notice of Application for Discharge, by omitting an incorrect reference to the notice being “filed” on behalf of a person. The notice is in fact issued by the Registrar.
Paragraph 39(c) provides for the repeal of Form 42, Notice of Meeting. Rule 93 of the Bankruptcy Rules, as amended by these rules will no longer require a prescribed form of notice for a meeting.
Paragraph 39(d) provides for the omission of Form 48 and the insertion of new Form 48, Summons to Witness. The new Form reflects the provisions of the Bankruptcy Rules relating to the issue of summonses to persons, as amended by these rules that a person may be summoned to give evidence, or both to give evidence and produce books and documents, or to produce books and documents.
Rule 40
Rule 40 sets out transitional and application provisions in respect of provisions of the Bankruptcy Rules being amended by these Rules.