Bankruptcy Rules (Amendment) 1992 No. 400
EXPLANATORY STATEMENT
Statutory Rules 1992 No. 400
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)
Rule 27 of the Bankruptcy Rules provides a procedure for trustees to notify the fact of bankruptcy by posting a copy of the sequestration order or a notice stating the fact of bankruptcy by virtue of the acceptance of a debtor's petition to the bankrupt.
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.
Paragraph 2.1 provided for the omission of paragraph 27(3)(b) of the Bankruptcy Rules and the insertion of a new paragraph 27(3)(b) to require trustees to give a notice to creditors stating the fact of bankruptcy and to give the creditors a summary of the statement of affairs lodged by the bankrupt.
Rule 3 - Rule 45J (Procedure for hearing application for permission to leave Australia)
Rule 45J of the Bankruptcy Rules sets out the procedure for the hearing of an application by a bankrupt for permission to travel outside Australia where the
bankrupt is liable to pay a contribution under subsections 139P(1) or 139Q(1) of the Act.
Rule 3 repealed subrule 45J(4) to omit the requirement that a copy of permission orders obtained under section 139ZU of the Act be sent to the Secretary of the Department of Foreign Affairs and Trade.
Rule 4 - Rule 57 (Application for annulment under section 153B or 252B of the Act)
Rule 57 of the Bankruptcy Rules provides the procedural requirements for applications for annulment of a bankruptcy under sections 153B or 252C of the Act.
Rule 4 amended rule 57 of the Bankruptcy Rules to set out the matters required to be dealt with by the trustee in his or her written report concerning the bankrupt where the bankrupt has applied to the Court for an annulment of the bankruptcy, and to require the trustee, having prepared such a report, to serve a copy of it on the bankrupt at the same time as the report is filed.
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 prescribes 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 16M(1)(a) and paragraphs 161B(2)(a) of the Bankruptcy Rules by omitting the reference to 'Level 1' officers in the Senior Executive Service substituting the words 'Band 1'.
Rule 6 - Schedule 1B (Modifications of the Fringe Benefits Tax Assessment Act 1986)
Schedule 1B to the Bankruptcy Rules modifies provisions of the Fringe Benefits Tax Assessment Act 1986 to enable the calculation of the value of noncash benefits assessed as forming part of the income of a bankrupt during a contribution assessment period.
Rule 6 amended Schedule 1B of the Bankruptcy Rules to substitute a new value of a board meal in subitem 15.1, and a new formula for calculating the value of a board fringe benefit in the bankruptcy context.
Overview
The Bankruptcy Rules (Amendment) 1992 No. 400 were enacted to address various issues and gaps within the existing Bankruptcy Rules, which are subsidiary legislation under the Bankruptcy Act 1966. These amendments were issued by the authority of the Minister for Justice to bring the Bankruptcy Rules up to date and to correct certain errors and omissions. The Bankruptcy Act 1966 established the framework for the administration of bankruptcy in Australia, and the Bankruptcy Rules provide detailed procedural and administrative guidelines for the operation of the Act. The policy objective behind these amendments was to ensure that the Bankruptcy Rules accurately reflect the current legislative framework, improve the administration of bankruptcy, and enhance the efficiency and fairness of the bankruptcy process. The amendments made to the Bankruptcy Rules include changes to the notification procedure for creditors, adjustments to the procedure for hearings on applications for permission to leave Australia, clarification of the requirements for applications for annulment of bankruptcy, corrections to the classification of officers assisting the Official Receiver, and modifications to the Fringe Benefits Tax Assessment Act 1986 to facilitate the calculation of noncash benefits in the context of bankruptcy.
Scope and Application
The Bankruptcy Rules (Amendment) 1992 No. 400 applies to trustees, bankrupts, creditors, and the Official Receiver, as well as to the broader administration of bankruptcy under the Bankruptcy Act 1966. The amendments primarily concern procedural aspects of bankruptcy administration, including notification of bankruptcy, hearings for travel permissions, reports for annulment applications, and the fees associated with Official Receivers' functions. These rules apply nationally, as they pertain to the administration of bankruptcy throughout Australia, aligning with the Commonwealth jurisdiction under the Bankruptcy Act 1966. The amendments clarify and modify existing procedures, such as updating the process for trustees to notify creditors of bankruptcy and correcting fee classifications for officers assisting the Official Receiver. There are no stated exclusions or thresholds in the amendment; however, it is noted that certain provisions, like the omission of sending permission orders to the Department of Foreign Affairs and Trade, may have broader implications on the administration of bankruptcy. The application and scope of these rules can be further extended or refined through subordinate instruments, which are not explicitly detailed in the explanatory statement.
Key Provisions
The Bankruptcy Rules (Amendment) 1992 No. 400 introduces several key amendments to the Bankruptcy Rules that are consequential to the Bankruptcy Rules No. 194 of 1992. These amendments aim to refine and update various procedures and requirements under the Bankruptcy Act 1966. Firstly, Rule 2 modifies Rule 27, which governs the notice of bankruptcy. Under this rule, trustees must notify creditors of the bankruptcy within 28 days from the date of the bankruptcy, or within any additional period allowed by the Registrar upon application by the trustee. Trustees must also provide creditors with a summary of the bankrupt's statement of affairs if such a summary has been received.
The Bankruptcy Rules (Amendment) 1992 No. 400 imposes certain obligations on trustees and other parties involved in the bankruptcy process. Trustees are required to promptly notify creditors of the bankruptcy and furnish them with relevant information about the bankrupt's financial situation. This includes posting a copy of the sequestration order or a notice of bankruptcy, as well as providing a summary of the statement of affairs if available. Trustees must also prepare and file written reports when a bankrupt applies for an annulment of their bankruptcy, and serve copies of these reports to the bankrupt as per Rule 4. Furthermore, Rule 5 corrects references to the classification of officers assisting the Official Receiver, ensuring accurate fee and charge structures.
Under these amendments, there are potential consequences for non-compliance. Trustees who fail to notify creditors within the required timeframes or provide necessary documentation may face scrutiny from the Registrar and potentially face disciplinary action. Additionally, incorrect classifications of officers assisting the Official Receiver, if not corrected, could lead to improper fee structures and financial discrepancies within the bankruptcy estate. While specific penalties are not detailed in the explanatory statement, non-compliance with these rules could lead to civil or administrative consequences as prescribed by the relevant sections of the Bankruptcy Act.
The amendments also touch upon the calculation of non-cash benefits for fringe benefits tax purposes, as modified by Schedule 1B. This ensures that the value of non-cash benefits, such as board meals, are accurately assessed and included in the income of a bankrupt during a contribution assessment period. These modifications are critical for ensuring that all relevant income is appropriately considered in bankruptcy proceedings. Failure to comply with these provisions could result in inaccurate assessments, potentially affecting the bankrupt's liability and the distribution of assets among creditors.
Overall, the Bankruptcy Rules (Amendment) 1992 No. 400 seeks to enhance the efficiency and accuracy of the bankruptcy process by updating procedural requirements and clarifying the roles and responsibilities of trustees and other involved parties. Compliance with these rules is essential to maintain the integrity of bankruptcy proceedings and to ensure that all relevant financial information is accurately assessed and communicated to creditors.