Bankruptcy Rules (Amendment)

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Bankruptcy Rules (Amendment) 1992 No. 261

EXPLANATORY STATEMENT

Statutory Rules 1992 No. 261

Issued by the authority of the Minister for Justice

Bankruptcy Act 1966

Bankruptcy Rules (Amendment)

The Bankruptcy Rules (Amendment) made amendments to the Bankruptcy Rules consequential upon the making of Bankruptcy Rules No.194 of 1992.

Details of rules Commencement

These Rules commenced on gazettal.

Rule 1 - Amendment

Rule 1 provided that the Bankruptcy Rules have been amended as set out in these rules.

Rule 2 - Rule 27 (Notice of bankruptcy)

Under the Act, the trustee is required, within 28 days of the date of the bankruptcy, or within such further period as the Registrar allows on application by the trustee, to give notice of the bankruptcy to each creditor of the bankrupt whose address is known to the trustee, and to forward to each such creditor a summary of the bankrupt's statement of affairs if the trustee has received it.

Section 64B of the Act sets out certain matters that are to be included in a notice of a meeting of creditors. Item 1.1 of Schedule 1A to the Act modifies paragraph 64B(6)(b) to provide that where creditors are attending a first meeting of creditors, the notice of the meeting must include a copy of the bankrupt's statement of affairs. With the insertion of item 1.1 of Schedule 1A, paragraph 27(3)(b), which requires the trustee to send a summary of the bankrupt's statement of affairs to the creditors when it has been filed, became unnecessary and was omitted by Bankruptcy Rules No. 194 of 1992.

Paragraph 2.1 provided for the omission of subrule 27(3) of the Bankruptcy Rules and the insertion of a new subrule 27(3) to omit the phrase "; and" which concluded subrule 27(3)(a) after the omission of subrule 27(3)(b).

Rule 3 - Rule 90 (Modification of provisions of Act applied by section 248)

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. With the repeal of section 66 and subsection 74(1) by the Bankruptcy Amendment Act 1991, the modification of these sections as prescribed in paragraphs 90(a) and 90(c) became unnecessary.

Paragraph 90(d) as amended by Bankruptcy Rules No. 194 of 1992 modified section 75 of the Act which relates to new and additional grounds on which the Court can annul a bankrupt's compositions and schemes.

Paragraph 3.1 corrected an erroneous reference to paragraph 90(c) (second occurring) in rule 90 of the Bankruptcy Rules.

Rule 4 - Rule 129 (Application for summons under subsection 81 (1) of the Act)

Section 81 of the Act provides that the bankrupt (or relevant person) or persons other than the bankrupt (the examinable person in relation to the relevant person) may be summonsed to a public examination to give evidence concerning the bankrupt. Rule 129 provides for the issue of summonses under section 81 of the Act.

Paragraph 4.1 amended subrule 129(2) of the Bankruptcy Rules to substitute a requirement that the applicant shall serve on the person to be examined a copy of the application for a summons, the affidavit in support of the application and a notice setting out the effect of subrule 129(2A) in place of the requirement that the Registrar serve the documents.

Rule 5 - Rule 161B (Official Receiver's charges and fees)

Section 163A of the Act provides that the costs of performing additional functions by Official Receivers at the request of a trustee in bankruptcy are to be borne by the bankrupt estate in relation to which the functions are performed.

Subrule 161B(2) of the Bankruptcy Rules prescribed fees for the exercise of a power under the Act, the Rules or regulations by an officer assisting the Official Receiver for the purposes of subsection 15(1) of the Act, at the request of the trustee in bankruptcy. Paragraphs (a), (b) and (c) of subrule 161B(2) of the Bankruptcy Rules set out the hourly rate of the officer assisting the Official Receiver for the purposes of subsections 163A(2) of the Act.

Rule 5 corrected erroneous references to the classification of the officer assisting the Official Receiver in paragraphs 161B(1)(b) by omitting the words "Insolvency and Trustee Officer Grade 1" and substituting the words "Insolvency and Trustee Officer Grade 2". Paragraph 5.3 substituted the words "Insolvency and Trustee Officer Grade 2" in place of the incorrect reference in paragraph 161B(2)(c) to "Insolvency and Trustee Officer Grade 1".

Rule 6 - Rule 162 (Scale of costs)

Rule 162 of the Bankruptcy Rules provides that for taxation purposes solicitors must prepare their bills of costs on the basis of the scale of costs set out in Schedule 3

unless the solicitor wishes to avail himself or herself of the exception found in subrules 162(2) or (2A). The scale of costs is reviewed regularly by the Federal Costs Advisory Committee.

New rule 162(2) clarified the costs and provided that if the proceedings involved the obtaining of a sequestration order where the act of bankruptcy relied upon was the noncompliance with the terms of a bankruptcy notice, the solicitor for the petitioning creditor shall be allowed costs, in addition to his or her proper disbursements, in the amount of $1091. If costs were awarded for attendances other than obtaining the sequestration order, paragraphs 6.2 and 6.3 provided that $97 may be claimed for an attendance where counsel appeared and $109 when counsel did not appear.

If a creditor's petition is dismissed and costs were awarded to the petitioner, paragraph

6.4 provided that his or her solicitor may submit a bill of $939 pursuant to subrule 162(2A) when the circumstances set out in subrule 162(2) apply. As with subrule 162(2), extra costs may be claimed with respect to additional attendances at court and paragraphs 6.5 and 6.6 provided that $97 may be claimed for an attendance where counsel appeared and $109 when counsel did not appear.

With the insertion of new amounts in subrules 162(2) and 162(2)(A), subrule 162(2B) became unnecessary and paragraph 6.7 omitted it.

Rule 7 - Schedule 3 (Scale of solicitors costs)

Rule 7 inserted a new Schedule 3 to the Bankruptcy Rules. Schedule 3 prescribes the scale of costs upon which solicitors prepare their bills of costs to facilitate taxing.

Rule 6 amended rule 162 to introduce new gross sums for the procedure in rule 162 which provides an alternative to filing an itemised bill. The scale of costs is reviewed regularly by the Federal Costs Advisory Committee. The revised scale clarifies the changes made to the scale since 1988.

Overview

The Bankruptcy Rules (Amendment) 1992 No. 261 was enacted to make amendments to the Bankruptcy Rules in response to the changes introduced by Bankruptcy Rules No. 194 of 1992. These amendments were issued under the authority of the Minister for Justice and are consequential to the earlier rules. The primary objective of these amendments is to ensure that the Bankruptcy Rules remain aligned with the current legislative framework, particularly in light of recent amendments to the Bankruptcy Act 1966. The rules address various technical and administrative adjustments, including modifications to notices of bankruptcy, the administration of estates of deceased persons, the application for summons, official receiver's charges and fees, and the scale of costs for solicitors. These changes aim to streamline the processes and ensure consistency and accuracy in the application of the Bankruptcy Act.

Scope and Application

The Bankruptcy Rules (Amendment) 1992 No. 261 applies to the trustees in bankruptcy, Official Receivers, creditors, and other relevant parties involved in the administration of bankrupt estates in Australia. The scope of the amendments made by these rules is directly connected to the existing Bankruptcy Act 1966 and the Bankruptcy Rules, ensuring consistency and alignment with the legislative framework governing bankruptcy proceedings. The amendments are designed to reflect changes in the law, including the repeal of certain sections and the introduction of new provisions, which impact the procedural aspects of bankruptcy administration. The rules are applicable nationally across Australia as they pertain to the federal legislative framework. There are no explicit exclusions or exemptions detailed within these amendments, but the application of the rules is contingent upon the specific provisions of the Bankruptcy Act and the existing Bankruptcy Rules. The scope of the amendments can be extended or restricted through subordinate instruments, such as further statutory rules or regulations that may be issued under the authority of the Bankruptcy Act.

Key Provisions

The Bankruptcy Rules (Amendment) 1992 No. 261, issued under the authority of the Minister for Justice, brings about several amendments to the existing Bankruptcy Rules to align with the Bankruptcy Rules No. 194 of 1992. The primary changes are outlined in Rules 2, 3, 4, 5, and 6, which modify the procedures and requirements related to notices of bankruptcy, modifications of provisions of the Act, applications for summonses, and fees and costs. Rule 1 simply states that the Bankruptcy Rules have been amended according to the provisions of these rules. Rule 2 addresses Rule 27, which pertains to the notice of bankruptcy. According to section 64B of the Bankruptcy Act 1966, the trustee is mandated to inform each creditor of the bankruptcy within 28 days of the bankruptcy date or within any additional period permitted by the Registrar. Rule 2 further specifies that the notice must include a copy of the bankrupt's statement of affairs when creditors are attending a first meeting of creditors, as per the modifications in Schedule 1A. Additionally, Rule 2 streamlines the process by omitting the requirement to send a summary of the statement of affairs to creditors, as it is now included in the notice itself. Rule 3 modifies Rule 90, which pertains to the modification of provisions of the Act applied by section 248. This rule was updated to remove outdated references to repealed sections and to correct an erroneous reference, ensuring that the rules remain aligned with the current legislative framework. Rule 4 updates Rule 129, which involves applications for summonses under subsection 81(1) of the Act. This rule now requires the applicant, rather than the Registrar, to serve the relevant documents to the person to be examined. This change ensures that the applicant is directly involved in the service process, enhancing the efficiency of the summons procedure. Rule 5 addresses Rule 161B, which pertains to the Official Receiver's charges and fees. The rule corrects erroneous references to the classification of the officer assisting the Official Receiver, ensuring that the correct fees are charged and recorded for services rendered under section 163A of the Act. Rule 6 introduces new provisions regarding the scale of costs for solicitors. It sets out specific amounts for costs in certain proceedings and clarifies the costs that may be claimed in cases where a creditor's petition is dismissed. This rule ensures transparency and consistency in the billing practices of solicitors involved in bankruptcy proceedings. Under the Bankruptcy Rules (Amendment) 1992 No. 261, the obligations imposed on trustees, applicants, and solicitors primarily revolve around timely and accurate communication, correct classification of officers, and adherence to the updated scale of costs. Trustees must ensure that creditors are notified of the bankruptcy within the stipulated timeframe and include the relevant information in the notice. Applicants for summonses must serve the necessary documents to the person to be examined. Solicitors must prepare their bills of costs based on the revised scale to ensure that they are fairly compensated for their services. Breaches of these obligations may lead to various consequences. While the Explanatory Statement does not explicitly outline specific offences or penalties, any failure to comply with the updated rules could potentially result in legal challenges, disputes over costs, or other administrative issues. For instance, a trustee's failure to properly notify creditors could lead to complications in the administration of the bankruptcy estate, and an applicant's failure to serve the required documents could result in the invalidity of the summons. Solicitors who do not adhere to the new scale of costs might face disputes over the reasonableness of their fees. The precise consequences would depend on the nature and severity of the breach, as well as the specific provisions of the Bankruptcy Act 1966 and other relevant laws.

Area of Law: Insolvency Law
Instrument: Regulation
Concepts: Commencement Provisions; Regulatory Standards; Enforcement Powers; Licensing & Registration

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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.

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