EXPLANATORY STATEMENT
BANKRUPTCY ACT 1966
BANKRUPTCY RULES (AMENDMENT)
STATUTORY RULES 1984 No. 155
The purpose of the proposed amendment to the Bankruptcy Rules is to prescribe 10 per cent per annum as the rate of interest for the purposes of section 20J of the Bankruptcy Act 1966 (“the Act)
Section 20J is one of a group of sections dealing with the Common Investment Fund (“the Fund”). This fund is established by sub-section 20B(2) of the Act. Into the fund are deposited all moneys (subject to some exceptions set forth in sub-section 20B(8) which are received by the Official Trustee in Bankruptcy.
Moneys held in the fund may be invested in the manner provided for by section 20D. Interest derived from such investment is paid into the Common Investment Fund Equalization Account (“the Equalization Account”) which is established by section 20G.
The Equalization Account is essentially a conduit for the interest derived from the investment of moneys in the Fund. The moneys held in the Equalization Account may be paid either to Consolidated Revenue (pursuant to sub-section 20H(4)) or back to the Fund (pursuant to sub-section 20H(3)).
Moneys are payable back into the Fund, firstly, in the event of a capital loss being incurred upon the realization of an investment made from moneys in the Fund, or, secondly, in the event that interest is payable to the estate of the bankrupt or deceased debtor or to the person entitled to the moneys held in the Fund, pursuant to sub-sections 20J(2) and 20J(4) of the Act.
Sub-section 20J(2) provides that interest is payable to the estate of the bankrupt or deceased debtor where distribution of the funds held to the credit of the estate, by declaring a dividend amongst the creditors, is unusually delayed because of one or more of the reasons mentioned in sub-section 20J(5).
Sub-section 20J(4) provides for the payment of interest to a person where it is ascertained that moneys held in the Fund properly belong to that person, and do not form part of the estate.
Interest is payable, pursuant to sub-sections 20J(2) and 20J(4), at the rate prescribed for the purposes of the section. No rate has yet been prescribed. The proposed amendment will prescribe 10 per cent per annum as the rate for the purposes of section 20J.
Authorised by the Attorney-General