Explanatory Statement
Bankruptcy Rules Amendment
Statutory Rules 1988 No. 343
The Bankruptcy Rules Amendment Statutory Rules No. of 1988 amend the Bankruptcy Rules to provide new procedures for the convening and conduct of meetings of creditors of bankrupts which accord with the provisions of the Bankruptcy Act 1966 (the Act) as amended by the Bankruptcy Amendment Act 1987 (the Amendment Act). The Amendment Act abolished the traditional distinction between the ‘first meeting of creditors’ and subsequent meetings of creditors of a bankrupt person. The amending rules make necessary consequential amendments to the Bankruptcy Rules.
The Amendment Act inserted into the Act a comprehensive new provision governing the application for and issue and contents of search warrants in bankruptcy proceedings. The Act previously required that a search warrant be in accordance with a prescribed form. Under the new search warrant provision, applicants for a warrant will draft their own form of warrant, suitable for the circumstances of a particular case, and the draft form of warrant will be settled by the Judge or magistrate to whom application has been made for the issue of the warrant. These rules provide for the repeal of the existing prescribed form of warrant.
Details of the rules are as follows.
Rule 1
Rule 1 provides that the rules commence on 3 January 1989. The relevant sections of the Amendment Act have been proclaimed to commence from that date.
Rule 2
Rule 71 of the Bankruptcy Rules enables the trustee of a bankrupt estate who has been appointed proxy of a creditor at the first meeting of creditors to appoint, by writing, another person to act as proxy of that creditor. Rule 2 amends rule 71 by omitting the word ‘first’ so that the rule will apply of its own force to all meetings of creditors, not just the first meeting of creditors.
Rule 3
Rule 92 of the Bankruptcy Rules provides a procedure for convening the first meeting of creditors and requiring the trustee to give notice to creditors of his or her intention not to convene a first meeting of creditors in a case where the trustee is of opinion that it is not desirable to hold such a meeting. The Amendment Act abolishes the statutory first meeting of creditors, and whether or not a meeting is convened is within the discretion of the trustee, unless the trustee has been requisitioned to convene a meeting of creditors by the creditors. Rule 92 is unnecessary, since the procedures for calling meetings other than the statutory first meeting of creditors will be able to be used in relation to any meeting. Accordingly, rule 3 repeals rule 92.
Rule 4
Rule 93 of the Bankruptcy Rules provides a procedure for convening meetings other than the first meeting of creditors in a bankruptcy. Paragraph 4(a) provides for the omission of the words ‘not being the first meeting of creditors’ from rule 93 so that it will apply to all meetings of creditors. Paragraph 4(b) inserts the words ‘or she’ into rule 93, in reference to the trustee, so that the language of rule 93 is gender neutral.
Rule 5
Rule 94 of the Bankruptcy Rules applies the provisions of sections 65, 66, 67 and 68 of the Act, and rule 71 of the
Bankruptcy Rules to meetings of creditors other than the first meeting. After the commencement of the Amendment Act, those provisions of the Act will apply of their own force to all meetings of creditors, and the amendment of rule 71 made by rule 2 of these rules, makes that rule applicable of its own force to all meetings of creditors. Accordingly, there is no need for a rule specifically applying the quoted provisions to meetings of creditors other than the first meeting, and rule 5 repeals rule 94.
Rule 177 of the Bankruptcy Rules provided that for the purposes of section 130 of the Act, a search warrant should be in accordance with Form 56 in Schedule 1 to the Bankruptcy Rules. The Amendment Act inserted a new section 130 into the Act, and the new section 130 makes quite elaborate provision for the terms and conditions of issue and execution of search warrants. Under the new section, applicants for a search warrant will draft their own form of warrant, applicable to the facts and circumstances of the particular case in which the issue of a warrant is sought, and the form of warrant will be settled by the Judge or magistrate to whom the application for the issue of the warrant has been made. The prescribed form of warrant is inconsistent with, and inappropriate for use in connection with the new section 130 of the Act. Accordingly, rule 5 also repeals rule 177 of the Bankruptcy Rules.
Rule 6
Rule 6 amends Schedule 1 to the Bankruptcy Rules by omitting Form 56, the prescribed form of warrant. This amendment is consequential to the repeal of rule 177 of the Bankruptcy Rules by rule 5 of these rules.
Rule 7
The amendments to the relevant provisions of the Act made by the Amendment Act apply in relation to bankruptcies in respect of which the date of bankruptcy occurs after the commencement of those provisions of the Amendment Act. In relation to bankruptcies in respect of which the date of bankruptcy
occurred before the commencement of the relevant provisions of the Amendment Act, the Act as in force before the commencement of the amendments continues to apply. Rule 7 mirrors the application provisions in the Amendment Act. The provisions of rules 71, 92 to 94 and 177 of, and Schedule 1 to, the Bankruptcy Rules as in force prior to 3 January 1989, the date of commencement of these Rules and of the relevant provisions of the Amendment Act, will continue to apply to bankruptcies in respect of which the date of bankruptcy occurred before 3 January 1989.
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