Bankruptcy Rules (Amendment)

Legislation au C1976L00143 Rules Not in force Legislative Instrument

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Statutory Rules

1976 No. 143

RULES UNDER THE BANKRUPTCY ACT 1966.[*]

I, THE GOVERNOR-GENERAL of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Rules under the Bankruptcy Act 1966.

Dated this eighth day of July, 1976.

JOHN R. KERR

Governor-General.

By His Excellency’s Command,

JOHN HOWARD

Minister of State for Business and Consumer Affairs.

__________

Amendments of the Bankruptcy Rules[†]

Modification of provisions of Act applied by section 237.

1. Rule 83 of the Bankruptcy Rules is amended by inserting after paragraph (b) the following paragraph:—

“(ba) section 134 of the Act is modified—

(i) by inserting after paragraph (b) of sub-section (1) the following paragraph:—

‘(ba) carry on a business of the debtor pursuant to an authority conferred on the trustee under sub-section (5) for such period and on such conditions (if any), as are specified in the deed of arrangement (being a deed of arrangement by or under which the business of the debtor has been assigned to the trustee);’; and

(ii) by adding at the end thereof the following sub-sections:—

‘(5) A deed of arrangement may authorize the trustee to carry on a business of the debtor for such period and on such conditions (if any) as are specified in the deed.

‘(6) An authority conferred on a trustee under subsection (5) may be varied or terminated by the passing of a special resolution to that effect by a meeting of creditors called for that purpose.

‘(7) In this section, “deed of arrangement” means a deed of arrangement under Part X.’;”.


Address for service.

2. Rule 101 of the Bankruptcy Rules is amended by omitting from paragraph (a) of sub-rule (3) the words “fifteen miles” and substituting the figures and word “24 kilometres”.

3. Rule 185 of the Bankruptcy Rules is repealed and the following rule substituted:—

A person under 18 years may be represented by a next friend or guardian.

“185. (1) Where a person who has not attained the age of 18 years desires to institute a proceeding, a person may institute the proceeding as the next friend of the first-mentioned person.

“(2) Subject to sub-rule (3), before the name of a person is used as next friend of a person who has not attained the age of 18 years in connexion with a proceeding by the last-mentioned person, the first-mentioned person shall consent, in writing, to act as next friend of the person who has not attained the age of 18 years in the proceeding and the consent shall be filed in the office of the Registrar of the appropriate District.

“(3) Sub-rule (2) does not apply in a case where the Court has appointed a person to be the next friend of a person who has not attained the age of 18 years.

“(4) Where a person who has not attained the age of 18 years is a party to a proceeding, other than the party who instituted the proceeding, that person may take part in the proceeding by his guardian ad litem.”.

Service on person under 18 years.

4. Rule 186 of the Bankruptcy Rules is amended—

(a) by omitting sub-rule (1) and substituting the following sub-rule:—

“(1) Subject to sub-rule (2), where a document is required to be served on a person who has not attained the age of 18 years in connexion with a proceeding, due service of the document on that person shall be deemed not to have been effected unless—

(a) the document has been served on that person; and

(b) a copy of the document has been served on a parent or the guardian of that person or on a person over the age of 18 years with whom the person who has not attained the age of 18 years is residing or in whose care he is.”; and

(b) by omitting from sub-rule (2) the words “an infant” and substituting the words “a person who has not attained the age of 18 years”.

5. Rule 189 of the Bankruptcy Rules is repealed and the following rule substituted:—

Appointment of guardian ad litem of person under 18 years.

“189. (1) A person who has not attained the age of 18 years may consent, in writing, to the appointment of a person as his guardian ad litem for the purpose of a proceeding.

“(2) Where a person who has not attained the age of 18 years has given his consent under sub-rule (1), the person in respect of whom the consent has been given may apply to the Registrar to be appointed guardian ad litem of the first-mentioned person for the purpose of the proceeding.

“(3) There shall be filed in support of an application under sub-rule (2) an affidavit by a credible person deposing to the fitness of the applicant to act as guardian ad litem of the person who has not attained the age of 18 years.

“(4) An application under this rule may be made ex parte.”.

Order appointing guardian ad litem.

6. Rule 191 of the Bankruptcy Rules is amended by omitting the words “the infant or” and substituting the words “the person who has not attained the age of 18 years or the”.


Appointment of guardian in other circumstances.

7. Rule 192 of the Bankruptcy Rules is amended by omitting from sub-rule (1) the words “an infant or” and substituting the words “a person who has not attained the age of 18 years or a”.

Removal of guardian ad litem.

8. Rule 193 of the Bankruptcy Rules is amended by omitting the words “an infant” and substituting the words “a person who has not attained the age of 18 years”.

[*] Notified in the Australian Government Gazette on 13 July 1976.

[†] Statutory Rules 1968, No. 2, as amended by Statutory Rules 1975, No. 52; and 1976, No. 105.

Overview

The Statutory Rules 1976 No. 143, made under the Bankruptcy Act 1966, were enacted to address various administrative and procedural gaps in the Bankruptcy Rules. These amendments were introduced by the Governor-General of the Commonwealth of Australia, acting on the advice of the Federal Executive Council, and aimed to improve the efficiency and clarity of the Bankruptcy Rules, particularly in relation to the administration of estates, the representation and service of minors, and the appointment of guardians ad litem for minors involved in bankruptcy proceedings. The policy objective behind these amendments was to ensure that the Bankruptcy Rules remain relevant and effective in managing the complexities of bankruptcy cases, while also providing protections and appropriate representation for minors.

Scope and Application

These rules apply to individuals, entities, and trustees involved in bankruptcy proceedings under the Bankruptcy Act 1966. They outline procedures and requirements for carrying on a debtor's business under a deed of arrangement, which is a legal agreement that allows a debtor to continue operating their business while repaying their debts. These rules also cover the representation of minors in bankruptcy proceedings, including the appointment of next friends or guardians to represent minors. The rules have a national reach as they apply throughout Australia. There are no exclusions, exemptions, or thresholds specified in these rules. The rules may be further extended or restricted through subordinate instruments, such as regulations or orders made under the Bankruptcy Act 1966.

Key Provisions

The key operative sections of the Bankruptcy Rules 1976 (Statutory Rules 1976 No. 143) include modifications to existing rules concerning the authority of trustees, distance requirements for service, and provisions relating to minors in bankruptcy proceedings. For instance, Rule 83 has been amended to allow a trustee to carry on the debtor's business under specific conditions outlined in a deed of arrangement (Rule 83(ba)(i)). Additionally, Rule 83 now includes new sub-sections (5) to (7) that clarify the authority of trustees and the process for varying or terminating such authority (Rule 83(5)-(7)). Furthermore, Rule 101 has been updated to replace the distance requirement of "fifteen miles" with "24 kilometres" (Rule 101(1)). The obligations imposed by these rules are primarily on trustees and the minors involved in bankruptcy proceedings. Trustees are required to adhere to the conditions specified in any deed of arrangement when carrying on a debtor's business and must comply with any variations or terminations of their authority as decided by creditors (Rule 83(5)-(7)). Minors, or individuals under the age of 18, must have a next friend or guardian to institute or participate in bankruptcy proceedings on their behalf, and proper service of documents must be made to both the minor and their parent, guardian, or another appropriate adult (Rule 185 and Rule 186(1)). There are no explicit offences or penalties mentioned in the rules themselves; however, breaches of the Bankruptcy Act 1966, which these rules implement, can lead to various consequences. For example, a trustee who fails to act within the scope of their authority or mismanages the debtor's business could face civil or criminal liability. While the specific penalties for such breaches are not detailed in these rules, the Act provides a framework for potential enforcement actions, including fines and imprisonment, depending on the severity of the breach.

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