Bankruptcy Rules (Amendment)
Statutory Rules No. 182 of 1989
Explanatory Statement
Outline of the rules
These amendments to the Bankruptcy Rules made under the Bankruptcy Act 1966 (the Act) pursuant to section 4 of the Acts Interpretation Act 1901, together with other rules under the Act made concurrently with these rules were made to enable the 34 provisions of the Bankruptcy Amendment Act 1987 (the Amendment Act) which remained to be brought into operation, to be proclaimed to commence from 31 July 1989. These rules will come into operation on the same day as the relevant provisions of the Amendment Act, that is, 31 July 1989.
Rules 1, 6, 8, 9, 12, 18 and 19 amend the Bankruptcy Rules to prescribe new procedures in relation to the examinations of bankrupts, persons related to bankrupts, trustees and others.
Rules 10, 13, 14 and 17 make changes to procedures regulating insolvency administrations under Part X of the Act which reflect the provisions of that Part as amended by the Amendment Act. A registered trustee or solicitor who consents to exercise powers under an authority given by a debtor under section 188 of the Act is required to prepare a statement containing prescribed information about matters that may reasonably be expected to be dealt with at a meeting under Part X, and these rules set out the prescribed information. These rules prescribe a form of certificate to be signed by the chairperson of a meeting of creditors where the meeting passes a resolution nominating a person or persons to be trustee or trustees of a deed of arrangement, a deed of assignment or a composition under Part X. Special provision is made for the preparation of joint statements of affairs by joint debtors and partners.
Rules 5, 11 and 15 make new provision relating to statements of affairs to be prepared by or in respect of debtors. The Bankruptcy Rules formerly prescribed forms of statement of
affairs. As amended by these rules, the Bankruptcy Rules will set out the information required to be included in statements of affairs in narrative form. This will enable the actual form to be revised administratively when the need arises, eliminating the requirement to make statutory rules on each occasion an amendment to the form is required. This change will bring the bankruptcy administration into line with the administrative practices of other agencies such as the Australian Taxation Office, which is able to issue income return forms without making subordinate legislation to do so.
Rules 2, 3, 4, 7, 16 and 18 correct various anomalies within the Bankruptcy Rules, and change references to provisions of the Act which have been renumbered or relocated by the Amendment Act.
The rules in detail
Rule 1
Rule 1 provides for the insertion of new rules 17A and 17B into the Bankruptcy Rules.
Section 50 of the Act provides that the Court may at any time, after it has directed the Official Trustee or a registered trustee to take control of property before sequestration, summon the debtor or an examinable person for examination. Subrule 17A(1) provides that an application for a summons under subsection 50(2) of the Act shall be in writing and specify the person whom it is sought to examine, and the person in relation to whose affairs it is sought to examine that person. If the summons applied for is to contain a requirement that the person who is to be summoned produce at the examination books that are in that person’s possession, the application must specify the books or classes of books that the person is to produce at the examination. The application must be supported by an affidavit setting out the enquiries that have been made concerning the subject matter of the proposed examination. If the application includes a requirement to produce books, the supporting affidavit must include the reason for requiring the production of any books
or classes of books. The affidavit must include details of any earlier requests made to the person to supply the information that it is intended to elicit at the examination, and any circumstances of refusal or failure by the person to cooperate in complying with the request. If an earlier request to provide information or produce books has not been made, the affidavit must include the reasons why a request has not been made.
Subrule 17A(2) provides that a summons under subsection 50(2) shall be in accordance with Form 7A, which is to be inserted into the Bankruptcy Rules by rule 20 of these rules.
Subrule 17A(3) provides that the Registrar shall cause the summons to be signed and sealed on behalf of the court.
Subsection 50(5) of the Bankruptcy Act provides a facility for prescribing modifications to subsections 81(2) to 81(17) of the Act as they apply to examinations under section 50 of the Act. Paragraph 17B(a) amends subsection 50(2) by making it subject to subsection 81(2A) which is to be inserted into section 81 for the purposes of its application to examinations under section 50 by paragraph 17B(b). Subsection 81(2A) provides that the Court, the Registrar or magistrate may direct that an examination, or part of an examination under section 50 may be held in private. Examinations under section 81 of the Act are ordinarily held in public. Examinations under section 50 are usually held before the date of bankruptcy in a situation where a debtor facing imminent bankruptcy is attempting to divest himself or herself of assets or otherwise embarking on a course of action designed to defeat or delay creditors. The examination procedure provides a means for the interim receiver to ascertain what steps the debtor may have taken to remove property, and to discover the extent of the debtor’s property. Because the procedure precedes bankruptcy and is usually resorted to only in circumstances of urgency, it is considered appropriate that it should be possible for the tribunal conducting the examination to conduct it in private, so as to be able to exclude from attendance persons who might attempt to interfere
with a future insolvency administration in concert with the debtor.
Paragraph 17B(c) modifies subsection 81(9) to more accurately reflect the position of the Official Trustee or the registered trustee who has been directed to take control of the property of the debtor by replacing the words ‘is the trustee’ with the words ‘has been directed to take control of the property of the debtor’. The word trustee is inapposite to describe the position because no part of the property of the debtor vests in the Official Trustee or the registered trustee pursuant to the order to take control of the debtor’s property, whereas in a true trust situation, property vests in the trustee in law and in equity for the distribution of the trust property to the beneficiaries.
Paragraph 17B(d) modifies section 81 of the Act in its application to examinations under section 50 by omitting subsection 81(10A), which subsection is irrelevant in the context of a section 50 examination because it relates to examinations under section 81 which take place after the end of the bankruptcy, that is, after the discharge of the bankrupt from bankruptcy. Examinations under section 50 take place before the date of bankruptcy. Paragraph 17B(e) modifies section 81 in its application to examinations held pursuant to section 50 of the Act by inserting subsection 81(14) which provides that an applicant for an examination must pay the costs incurred in connexion with the examination, except where the Court, the Registrar or the magistrate makes an order under subsection (14A). Subsection 81(14A) which is also inserted by paragraph 17B(e) provides that the Court, the Registrar or the magistrate may order that all or some of the costs shall be paid by the debtor.
Rule 2
Rule 2 amends rule 24 of the Bankruptcy Rules, which relates to the prescribed forms of debtor’s petitions. Paragraph 2(a) amends subrule 24(2) by substituting a reference to subsection 56(2) for the present reference to subsection 56(3). Paragraph
2(b) amends subrule 24(3) by substituting a reference to subsection 57(2) for the former reference to subsection 57(3). These amendments to rule 24 of the Bankruptcy Rules are consequential upon changes to the Act by the Amendment Act.
Rule 3
Rule 3 will amend rule 24A of the Bankruptcy Rules by substituting references to subsections 55(4A), 56(4) or 57(5) for the former reference to subsection 55(3). This rule makes a change consequent on the relocation, by the Amendment Act, of the provisions of section 55 relating to the form of a petition under that section from subsection 55(3) to 55(4A). The rule also corrects an anomaly in that the former rule did not refer to the endorsement by the Registrar of debtor’s petitions against a partnership or debtor’s petitions by joint debtors who are not partners, although the Act specifically provides for the endorsement by the Registrar of these types of debtor’s petitions.
Rule 4
Rule 25 of the Bankruptcy Rules provides a procedure for notification of debtors and their solicitors of a date for hearing by the court on whether the Registrar ought to accept a petition in a case where the Registrar has referred this question to the court. Paragraph 4(a) amends paragraph 25(1)(a) by substituting a reference to subsection 55(3) for the former reference to subsection 55(4). Paragraph 4(b) amends paragraph 25(1)(b) by substituting a reference to subsection 57(3) for the former reference to subsection 57(5). These amendments are consequential upon the relocation of provisions relating to the reference to the court by the Registrar of debtor’s petitions in the Act by the Amendment Act.
Rule 5
Rule 5 provides for the repeal of rule 30 and the insertion of new rules 30, 30A and 30B. The Amendment Act inserted new section 6A - Statement of Affairs into the Act. Section 6A
provides that a reference to a statement of affairs in the Act is a reference to a statement of affairs that contains such information as is prescribed for the purposes of a particular provision and is verified by affidavit. Rule 30 provides that an affidavit verifying a statement of affairs, other than a statement of affairs for the purposes of subsection 246(1) or 247(1) shall be in accordance with Form 10.
Rule 30A provides that for the purposes of paragraphs 54(1)(a), 55(2)(b), 56(2)(a), 56(13)(a) and (b) and 57(2)(a) of the Act, a statement of affairs shall be in the form provided by the Registrar for the purpose, and in respect of each of those provisions, which relate to the filing of statements of affairs by debtors who are presenting a debtor’s petition and by bankrupts against whose estate a sequestration order has been made, the rule prescribes certain information. The prescribed information is as follows:
(a) the name, address and date of birth of the debtor (subparagraph 30A(a)(i));
(b) the debts and liabilities, whether certain or contingent, owed by the debtor. Where the amount of the debt or liability is unknown and cannot be reasonably ascertained or quantifed, the statement of affairs should include a fair and reasonable estimate of the amount and a brief statement of the circumstances that prevent the amount being precisely stated (subparagraph 30A(a)(ii));
(c) full particulars of property in which the debtor has an interest either in law or equity including debts owed to the debtor, and trusts, mortgages or other charges over or affecting the property. Where the amount of the debtor’s interest is unknown and cannot be reasonably ascertained or quantified, the statement should include a fair and reasonable estimate of the amount and brief statement of the circumstances that prevent the amount being precisely stated (subparagraph 30A(a)(iii));
(d) particulars of any disposition of property made by the person, including the date of the making of the
disposition and the names of recipients, and any consideration paid or payable to the debtor made in the 5 years preceding the date of making of the statement or the date of the bankruptcy (whichever is the earlier) (subparagraph 30A(a)(iv));
(e) particulars of any litigation in which the debtor is involved or which is pending against the debtor. The debtor must specify the name of the court, the nature of the litigation, the capacity of the debtor in the litigation; the amount in issue in the case of a liquidated claim, and any right or claim of the debtor to a set-off or counter-claim or to relevant insurance or other indemnity (subparagraph 30A(a)(v));
(f) a description of any business in which the debtor is involved, or has been involved during the 5 years preceding the date of making the statement or the date of the bankruptcy (whichever is earlier) (subparagraph 30A(a)(vi));
(g) particulars of the amount and sources of all income received by the debtor in the 2 years prior to the date of making the statement (subparagraph 30A(a)(vii));
(h) the names and ages of all persons dependent (wholly or in part) on the debtor and the relationship of each dependant to the debtor (subparagraph 30A(a)(viii)); and
(i) a statement whether the person has ever previously been bankrupt or has ever entered into a deed of arrangement, deed of assignment or composition under Part X of the Act or under the Bankruptcy Act 1924 or any analogous overseas legislation (subparagraph 30A(a)(ix)).
There is additional information prescribed for the purposes of a statement of affairs by a debtor who during the 5 years preceding the date of the statement or the date of the bankruptcy (whichever is earlier), has been in business as a partner or sole proprietor, or has been a trustee of a trust that has carried on a business, or a director or other officer
of a company that has been involved directly or indirectly in the carrying on of a business. Paragraph 30A(b) provides that a statement of affairs by a debtor within any of those categories shall include the following information:
(a) a statement of the nature and type of business (subparagraph 30A(b)(i));
(b) the registered or principal office of the business and all other addresses or locations at which the business is conducted, or has been conducted during the preceding 5 years of the statement or the date of the bankruptcy (whichever is earlier) (subparagraph 30A(b)(ii));
(c) the location or locations of the books of account and records of the business and the name and address, or names and addresses of the person or persons having custody or control of those books and records (subparagraph 30A(b) (ii)); and
(d) the registered business name, if any (subparagraph 30A(b)(ii)).
Subrule 30B(1) provides that joint debtors, whether partners or not shall file with the Registrar a statement of their joint affairs, in accordance with a form provided by the Registrar. Under subrule 30B(2), the form provided by the Registrar will require the joint debtors to state the matters specified in subrule 78(2), to be inserted in the Bankruptcy Rules by rule 11 of these rules.
Rule 6
Section 69 of the Act as amended by the Amendment Act provides that where a person becomes a bankrupt the Official Receiver or the trustee of the person’s estate may at any time (whether before or after the end of the bankruptcy) apply in writing to the Registrar to examine the person about his or her examinable affairs. Under section 69 as amended, it is possible to examine the person after he or she has been discharged from bankruptcy, although the examination may only relate to matters which occurred before the end of the bankruptcy, that is, before the bankrupt is discharged from
bankruptcy. Previously, the Act provided for the examination of the bankrupt about the bankrupt’s conduct, trade dealings, property and affairs. Further, once the bankrupt had been discharged, the opportunity to conduct an examination under section 69 was lost. Rule 32 of the Bankruptcy Rules provides a procedure for the issue and service of summonses under section 69 of the Act, and rule 6 amends rule 32 of the Bankruptcy Rules to reflect the changes made to the section by the Amendment Act.
Paragraph 6(a) amends subrule 32(1) by substituting a reference to the ‘examinee’ for the present reference to the ‘bankrupt’, in accordance with the change of terminology in section 69. Similarly, paragraphs 6(b), (c), (d), (e), (f) and (g) remove references in subrules 32(1), (1B), (2) and (3) to ‘the bankrupt’ and ‘the examination of the bankrupt’ and replace them with references to ‘the examinee’ and ‘the examination’, since the examination may be an examination of a person who has been discharged from bankruptcy, and is not therefore a bankrupt.
Paragraph 6(g) amends rule 32 by omitting subrule 32(5) and inserting new subrules 32(5), (6), (7), (8), (9) and (10). Subrule 32(5) provides that an applicant for an examination under section 69 may apply for a direction that the examinee produce specified books or classes of books. Whilst the Registrar has no discretion as to whether or not to issue a summons, there is a discretion as to whether the summons should contain a requirement that the person to be examined produce ‘books’, which under the definition in subsection 5(1) of the Act includes any ‘account, deed, paper, writing or document and any record of information however compiled, recorded or stored, whether in writing, on microfilm, by electronic process or otherwise’. These new subrules elaborate the procedure for applying for a direction to produce books, and specify criteria for the exercise of discretion in deciding whether to give such a direction. Under paragraph 32(5)(a), the applicant may apply in writing to the Registrar concurrently with an application for an examination under subsection 69(1) of the Act or by applying either orally
or in writing to the Court, the Registrar or a magistrate after the Registrar has fixed the day, time and place for the examination but before the examination is concluded. Subrule 32(6) provides that an application for a direction to produce books shall specify the books or classes of books that it is sought to have produced and be supported by an affidavit. The affidavit must include details of any earlier requests made to the examinee to produce the books, and the result of the request. It should also set out any circumstances of refusal or failure by the examinee to cooperate in complying with the request. If an earlier request to produce the books has not been made, the affidavit must include the reasons why a request has not been made. These changes are designed to ensure that trustees first seek to secure the voluntary compliance of the bankrupt with requests to produce books rather than resort in the first instance to the summons procedure. Trustees have considerable powers under the Act, and the Act imposes sanctions on persons such as bankrupts upon whom it casts a duty of cooperation. The use of the summons procedure should generally be unnecessary in the first instance, and be relied upon only where the person to whom the summons is directed has failed to cooperate with the trustee.
Paragraph 32(7)(a) provides that where an application for a direction to produce books is made to the Registrar concurrently with an application for a summons under subsection 69(1) of the Act, a copy of the application and the supporting affidavit shall be served on the examinee not less than 7 days before the date fixed for the commencement of the examination. Under paragraph 32(7)(b), the examinee may file a notice of intention to dispute the whole, or a specified part of the application within 2 days before the day fixed for the commencement of the examination.
Paragraph 32(8)(a) enables the Registrar, in a case where the application for a direction is made concurrently with the application for an examination, to make a direction for the production of books ex parte in the terms of the application if he or she is satisfied that the application and supporting affidavit have been served on the examinee in accordance with
paragraph 32(7)(a) and the examinee has not filed a notice of intention to dispute the application under paragraph 32(7)(b).
In a case where the application for a direction to produce books is made after the date for the commencement of the examination has been fixed, but before the conclusion of the examination, paragraph 32(8)(b) enables the Court, the Registrar or the magistrate to make an ex parte direction in terms of the application where the examinee has had reasonable notice of the application. Under paragraph 32(8)(c), the Court, the Registrar or the magistrate may make an ex parte direction in any case where the examinee has consented, orally or in writing, to the making of the direction.
Subrule 32(9) specifies the powers that the Court, the Registrar or the magistrate has when a direction is made. Under paragraph 32(9)(a), the Court, the Registrar or the magistrate may require the examinee to produce specified books, or classes of books to the Court, or a person on a day and at a time and place specified in the direction. Paragraph 32(9)(b) provides that the Court, the Registrar or the magistrate may adjourn the examination in order to give the examinee reasonable time to comply with the direction. Paragraph 32(9)(c) enables the Court, the Registrar or the magistrate to order that a specified person or persons be at liberty to inspect, copy or make extracts of all or any parts of the books produced in accordance with the direction. Paragraph 32(9)(d) provides that the Court, the Registrar or the magistrate may give directions concerning the marking for identification, and the retention or disposal of the books produced.
Subrule 32(10) provides that for the purposes of rule 32 ‘applicant’ means the trustee or in relation to an examination pursuant to an application under section 69 of the Act by the Official Receiver, the Official Receiver. This definition takes account of the fact that the Official Receiver may apply for the examination of a bankrupt, even though the Official Trustee has not been the trustee of the bankrupt’s estate. A ‘direction’ is defined to mean a direction under subsection
69(13) of the Act, being a direction that the examinee produce at the examination books that are in his or her possession and which are relevant to the matters about which the examinee is being, or is to be examined. The term ‘examinee’ has the same meaning as in section 69 of the Act. In that section, the examinee is the person who is or has been a bankrupt, and whose examination is sought to be conducted.
Rule 7
Rule 7 amends rule 55 of the Bankruptcy Rules by substituting a reference to a creditor who ‘has a provable debt’ for the present reference to a creditor whose ‘debt has been proved’. This amendment will bring the Bankruptcy Rules into line with the Act as amended by the Amendment Act permitting a creditor who has a provable debt but whose proof of debt has not been admitted to oppose an application by the bankrupt for discharge from bankruptcy under section 150 of the Act.
Rule 8
Rule 8 provides for the repeal of rule 66, which sets out procedure in relation to the examination of trustees before the court, and the insertion of new rules 66, 66AA and 66AB which specify procedures appropriate for the new provisions of the Act which relate to the examination of trustees.
The Amendment Act inserted into Part VIII of the Act a new Division 4A entitled ‘Examination of Trustees and Other Persons’. Section 179A of the Act enables the Inspector-General in Bankruptcy, a person authorised by the Inspector-General in Bankruptcy or a creditor to apply to the Registrar for the examination on oath of ‘relevant trustees’ in relation to ‘examinable matters’, being broadly the administration by the relevant trustee of one or more bankrupt estates, and the doing of any act or thing in connection with the administration.
Rule 66 sets out the procedure for an application under section 179A of the Act. Paragraphs 66(1)(a) and (b) require that the application be in writing and identify the person
whom it is sought to examine and the bankruptcy or bankruptcies in relation to which it is sought to examine the person. If the summons applied for is to contain a requirement under subsection 179C(2) of the Act for the production of books, then under paragraph 66(1)(c) the application must specify the books or classes of books that the person is to produce at the examination. Paragraph 66(1)(d) requires that the application be supported by an affidavit setting out the enquiries that have been made concerning the subject matter of the proposed examination. If the application includes a requirement to produce books, the supporting affidavit must include the reason for requiring the production of any books or classes of books. The affidavit should set out the details of any earlier requests made to the person to supply the information that it is intended to elicit at the examination, and any earlier requests made to the person to produce books, if it is intended that the summons should include a requirement to the person to produce books, and the affidavit should set out the results of the earlier requests. The affidavit should also state the circumstances of any refusal or failure by the person to cooperate in complying with such requests. If an earlier request to provide information or produce books has not been made, the affidavit should state the reasons why a request has not been made.
Subrule 66(2) provides that if the application for a summons under section 179A of the Act seeks a requirement that the person being examined produce books, a copy of the application and the supporting affidavit must be served on the person whom it is sought to examine. That person may within 7 days of being served file with the Registrar a notice of objection to producing the books and an affidavit setting out the grounds of the objection.
Subrule 66(3) provides that the Registrar shall consider any notice of objection and the affidavit in support of the notice. If the Registrar issues a summons, he or she shall either grant or dismiss the application for a requirement to produce documents and shall record and file a statement of reasons for his or her decision.
Subrule 66(4) provides that when the Registrar has issued, or refused to issue, a summons under subsection 179B(1) of the Act, the Registrar shall upon request by either the applicant or the person whose examination was requested provide a copy of the statement of reasons for the decision.
Subrule 66AA(1) provides that a summons issued under subsection 179B(1) of the Act shall be in accordance with form 32A. The summons shall be signed and stamped by the Registrar and be served personally on the person to be examined.
Paragraph 66AA(2)(a) provides that where the summons contains a requirement for the person to be examined to produce books, the Registrar may require the person to produce books or a specified class of books to the Court, or a person on a day and at a time and place specified in the direction. Under paragraph 66AA(2)(b), the Registrar may order that a specified person, or specified persons be at liberty to inspect, and copy or make extracts of all or any part of the books produced. Paragraph 66AA(2)(c) empowers the Registrar to give directions concerning the marking for identification, and the retention or disposal of the books produced.
Subrule 66AA(3) requires the Registrar not to commence an examination under Division 4A of Part VIII of the Act unless he or she is satisfied by evidence that the summons was served personally on the person to be examined or the summons came to the notice of the person and that person is not likely to be prejudiced by the absence of due service or the person to be examined does not object to being examined.
Subrule 66AA(4) provides that where the person sought to be examined fails to appear in accordance with the summons the Registrar may hear submissions by or on behalf of any person entitled to appear or to be represented at the examination. The Registrar may either adjourn the examination to a fixed day and time or generally or discharge the summons. If the Registrar does not discharge the summons and the Registrar is satisfied that the summons was personally served on the person
to be examined, the Registrar may issue a warrant for the arrest of the person.
Subrule 66AB(1) provides that the applicant for the examination, and any person who is represented or is participating personally in the examination may, during the examination, apply orally or in writing to the Registrar for a direction that the person being examined produce at the examination specified books or classes of books that are in the person’s possession and that relate to examinable matters in relation to the relevant trustee, that is, the trustee in relation to whose insolvency administrations the examination is being conducted.
Subrule 66AB(2) empowers the Registrar to hear submissions on an application for the production of books from the applicant for the examination, the person who applied for the direction to produce the books and the person who is being examined. The Registrar may require the person being examined to produce specified books or classes of books to the Court or to a person on a day and at a time and place specified in the direction. The Registrar may adjourn the examination in order to give the person being examined a reasonable period of time to comply with the direction to produce books. The Registrar may order that a specified person or specified persons be at liberty to inspect, and copy or make extracts of all or any part of the books that are produced, and may give directions concerning the marking for identification, and the retention or disposal of the books produced.
Subrule 66AC provides that where an examination under Division 4A of Part VIII of the Act is adjourned otherwise than to the next sitting day the applicant shall as soon as practicable give written notice of the place, date and time fixed for the resumption of the examination to the person being examined and to any person who has been represented or who has participated in person at the examination.
Rule 9
Rule 70A provides that where the Inspector-General in Bankruptcy is entitled to be heard on the hearing of an application under the Act or present evidence or examine or cross-examine witnesses during the hearing, and is for any reason unable to be present in person at the hearing, the Court may permit the Official Receiver to appear on behalf of the Inspector-General and take such part in the hearing as the Inspector-General could have taken if he or she had been present in person at the hearing. Rule 9 renumbers rule 70A as subrule 70A(1) and inserts a subrule 70A(2) providing that where, at an examination under Division 4A of Part VIII or Division 2A of Part X of the Act, the relevant trustee is the Official Trustee, then the Inspector-General may not be represented at the examination by the Official Receiver, This rule is necessary because where it is the Official Trustee who is the relevant trustee for the purposes of an examination under those two divisions of the Act, it is the Official Receiver who is the examinee.
Rule 10
Section 189B of the Act requires a trustee or a solicitor, who convenes a meeting of creditors pursuant to an authority under section 188 to prepare a statement in writing containing prescribed information about each matter that may reasonably be expected to be dealt with at the meeting by way of resolution under section 204 of the Act. Rule 10 inserts a new rule 75 which specifies the information which should be included in a statement that a solicitor or trustee is required under section 189B of the Act to prepare. The information that will be required by rule 75 to be included in a statement is as follows:
(a) the requirement to elect a chairman or chairwoman to preside at the meeting of creditors and the manner of voting at the election, including voting by proxy or by attorney;
(b) the power of the meeting to pass a resolution adjourning the meeting and fixing a date, time and
place for the resumption of the meeting and nominating a registered trustee to act as the trustee of a deed of assignment or a deed of arrangement, or of a composition;
(c) the power of the meeting to pass a special resolution releasing the debtor’s property from control, requiring the debtor to execute a deed of assignment or a deed of arrangement, accepting a compositon or requiring the debtor to present a debtor’s petition;
(d) the power to specify, in a special resolution that requires the debtor to execute a deed of arrangement, provisions to be included in the deed; and
(e) the requirement that a special resolution accepting a composition specify the terms of the composition.
Rule 11
Rule 11 repeals rule 78 and a new rule is substituted. Subrule 78(1) provides that a debtor’s statement of affairs under subparagraph 188(2)(c)(i) of the Act shall be in the form provided by the Registrar and verified by an affidavit in accordance with Form 10. Under subrule 78(2), the form provided by the Registrar shall require the debtor to state the following:
(a) in relation to the unsecured debts of the debtor, the name and address of each creditor and the amount if any owed by the creditor to the debtor, the amount of each debt, the year when the debt was contracted and the nature of the debt;
(b) in relation to secured debts owed by the debtor, the statement should show the name and address of each creditor and the amount (if any) owed by the creditor to the debtor, the amount of each debt and particulars of the security relating to it, the date when the security was given and the estimated present value of the security, and the estimated deficiency or surplus if the security were to be realised; and
(c) in relation to hire purchase agreements, the name and address of the finance company, the date of the agreement, particulars of the goods to which the
agreement relates, any arrears of payment under the agreement, the amount required to complete the agreement and the present value of the goods and the estimated deficiency or surplus if the goods were to be realised.
In relation to the debtor’s assets, subrule 78(2) requires the statement to particularise:
(a) cash on deposit with banks, building societies, credit or friendly societies and other financial organisations including the name and address of each organisation;
(b) cash in hand;
(c) stock in trade, including its value and location;
(d) the value and location of trade fittings, fixtures, utensils, farming stock, growing crops, household furniture and effects, motor vehicles, leasehold property and other non-freehold property and, in relation to any mortgage charge or lien secured over the property, the name and address of the owner of the security;
(e) freehold property, including its value and location and, in relation to any mortgage or charge secured over the property, the amount of the security and the name and address of the owner of the security;
(f) any interest vested or contingent under a will, trust or deed of settlement;
(g) any securities held by way of mortgage, bill of sale or the like, including details of the value of the security and the property secured; and
(h) any other property or assets.
Paragraph 78(2)(e) requires the statement to include particulars of contingent assets and contingent or other liabilities not otherwise stated.
Under paragraph 78(2)(f), the debtor is required to indicate whether he or she is an undischarged bankrupt or insolvent under Commonwealth or state legislation, whether the debtor has or has not previously been a bankrupt, and whether or not
the debtor has previously entered into an assignment, an arrangement or a composition with his or her creditors. Paragraph 78(2)(g) requires that the form include a summary of the information required by the form to be provided by the debtor, and paragraph 78(2)(h) allows for the inclusion in the form of other matters that the Registrar considers should be stated.
Rule 12
Rule 12 provides for the insertion of new rules 80AA, 80AB, 80AC and 80AD into the Bankruptcy Rules. The Amendment Act inserted Division 2A - Examination of Controlling Trustees and Other Persons into Part X of the Act. Rules 80AA to 80AD (inclusive) prescribe the procedures for the examination of the controlling trustees and the other persons, and are mirror provisions of rules 66 to 66AC (inclusive) to be inserted into the Bankruptcy Rules by rule 8 of these rules.
Rule 80AA sets out the procedure for an application under section 212C of the Act. Paragraphs 80AA(1)(a) and (b) require that the application be in writing and identify the person whom it is sought to examine and the controlling trusteeship or trusteeships in relation to which it is sought to examine the person. If the summons applied for is to contain a requirement under subsection 212E(2) of the Act for the production of books, then under paragraph 80AA(1)(c) the application must specify the books or classes of books that the person is to produce at the examination. Paragraph 80AA(1)(d) requires that the application be supported by an affidavit setting out the enquiries that have been made concerning the subject matter of the proposed examination. If the application includes a requirement to produce books, the supporting affidavit must include the reason for requiring the production of any books or classes of books. The affidavit should set out the details of any earlier requests made to the person to supply the information that it is intended to elicit at the examination, and any earlier requests made to the person to produce books, if it is intended that the summons should include a requirement to the person to produce books,
and the affidavit should set out the results of the earlier requests. The affidavit should also state the circumstances of any refusal or failure by the person to cooperate in complying with such requests. If an earlier request to provide information or produce books has not been made, the affidavit should state the reasons why a request has not been made.
Subrule 80AA(2) provides that if the application for a summons under section 212D of the Act seeks a requirement that the person being examined produce books, a copy of the application and the supporting affidavit must be served on the person whom it is sought to examine. That person may within 7 days of being served file with the Registrar a notice of objection to producing the books and an affidavit setting out the grounds of the objection.
Subrule 80AA(3) provides that the Registrar shall consider any notice of objection and the affidavit in support of the notice and if the Registrar issues a summons, he or she shall either grant or dismiss the application for a requirement to produce documents and shall record and file a statement of reasons for his or her decision.
Subrule 80AA(4) provides that when the Registrar has issued, or refused to issue, a summons under subsection 212D(1) of the Act, the Registrar shall upon request by either the applicant or the person whose examination was requested provide a copy of the statement of reasons for the decision.
Subrule 80AB(1) provides that a summons issued under subsection 212D(1) of the Act shall be in accordance with Form 32A. The summons shall be signed and stamped by the Registrar and be served personally on the person to be examined.
Paragraph 80AB(2)(a) provides that where the summons contains a requirement for the person to be examined to produce books, the Registrar may require the person to produce books or a specified class of books to the Court, or a person on a day and at a time and place specified in the direction. Under paragraph 80AB(2)(b), the Registrar may order that a specified person, or specified persons be at liberty to inspect, and
copy or make extracts of all or any part of the books produced. Paragraph 80AB(2)(c) empowers the Registrar to give directions concerning the marking for identification, and the retention or disposal of the books produced.
Subrule 80AB(3) requires the Registrar not to commence an examination under Division 2A of Part X of the Act unless he or she is satisfied by evidence that the summons was served personally on the person to be examined or the summons came to the notice of the person and that person is not likely to be prejudiced by the absence of due service or the person to be examined does not object to being examined.
Subrule 80AB(4) provides that where the person sought to be examined fails to appear in accordance with the summons the Registrar may hear submissions by or on behalf of any person entitled to appear or to be represented at the examination. The Registrar may either adjourn the examination to a fixed day and time or generally or discharge the summons. If the Registrar does not discharge the summons and the Registrar is satisfied that the summons was personally served on the person to be examined, the Registrar may issue a warrant for the arrest of the person.
Subrule 80AC(1) provides that the applicant for the examination, and any person who is represented or is participating personally in the examination may, during the examination, apply orally or in writing to the Registrar for a direction that the person being examined produce at the examination specified books or classes of books that are in the person’s possession and that relate to examinable matters in relation to the relevant trustee, that is, the contolling trustee in relation to whose insolvency administrations the examination is being conducted.
Subrule 80AC(2) empowers the Registrar to hear submissions on an application for a direction for the production of books from the applicant for the examination, the person who applied for the direction to produce the books and the person who is being examined. The Registrar may require the person being
examined to produce specified books or classes of books to the Court or to a person on a day and at a time and place specified in the direction. The Registrar may adjourn the examination in order to give the person being examined a reasonable period of time to comply with the direction to produce books. The Registrar may order that a specified person or specified persons be at liberty to inspect, and copy or make extracts of all or any part of the books that are produced, and may give directions concerning the marking for identification, and the retention or disposal of the books produced.
Subrule 80AD provides that where an examination under Division 2A of Part X of the Act is adjourned otherwise than to the next sitting day the applicant shall as soon as practicable give written notice of the place, date and time fixed for the resumption of the examination to the person being examined and to any person who has been represented or who has participated in person at the examination.
Rule 13
Rule 13 inserts rules 80B and 80C into the Bankruptcy Rules. Subparagraph 215A(1)(c)(i) of the Act provides that a person or persons who are nominated to act as trustee or trustees of a deed or composition under Part X should execute a consent to act as trustee in the prescribed form. Under subrule 80B(1) the prescribed form of consent to act as trustee for the purposes of subparagraph 215A(1)(c)(i) of the Act is Form 36AA, which form is included in Schedule 1 of the Bankruptcy Rules by rule 20 of these rules.
Subparagraph 215A(1)(c)(ii) of the Act requires a trustee to make a declaration in writing containing prescribed information about his or her professional, business and personal relationships and connexions, if any, with the debtor or the creditors proposing the resolution. Subrule 80B(2) has the effect that in making the declaration, the person to be nominated as trustee must declare to the best of his or her knowledge, information and belief whether:
(a) he or she has acted as an accountant, or other professional adviser, to the debtor or to a creditor;
(b) whether he or she has been associated with the debtor or a creditor in a business capacity or as a co-director of a company;
(c) whether he or she has been the trustee or the beneficiary under a trust in which the debtor or creditor is or has been interested;
(d) whether he or she has been a partner of the debtor or of a creditor;
(e) whether he or she has been an employer or an employee of the debtor or of a creditor;
(f) whether he or she is a close relative of, or is the spouse of a close relative of the debtor or of a creditor.
Subrule 80B(3) defines the expression ‘creditor’ for the purposes of subrule 80B(2) as a person who is to the knowledge or in the belief of the person who is to be nominated as trustee of the deed or composition, a creditor of the debtor who is to execute the deed.
Paragraph 215B(1)(a) of the Act requires the chairman or chairwoman of a meeting of creditors to sign a certificate setting out the terms of a resolution passed by the meeting nominating a person or persons to be trustee of a deed of assignment or of arrangement or of a composition. Paragraph 215(2)(a) of the Act provides that a creditor who was present at the meeting may sign such a certificate where the chairperson fails to do so because he or she has died before doing so or for some other reason. Rule 80C provides that the certificate shall be in accordance with Form 36AB which is inserted into Schedule 1 of the Bankruptcy Rules by rule 20 of these rules.
Rule 15
Rule 15 repealed rule 87 of the Bankruptcy Rules and substituted a new rule 87 which provides that a statement of affairs required under paragraph 246(1)(a) or subsection
247(1) of the Act, relating to the administration in bankruptcy of deceased estates shall be in a form provided by the Registrar and verified by affidavit in accordance with Form 38.
Subrule 87(2) provides that the form provided by the Registrar shall require the person making the statement to state information which was formerly contained in Form 39 in Schedule 1 of the Bankruptcy Rules. That information is set out in narrative form in subrule 87(2) and is as follows:
(a) in relation to the corpus account of the deceased person’s estate: particulars of each amount received, including the name of the payer, the date received and the bank account into which the amount was paid; and particulars of each amount paid, including the name of the payee, the date of payment and the bank account from which the amount paid was drawn;
(b) in relation to the assets of the deceased person transferred to beneficiaries: the particulars of each of the assets transferred, the date of transfer and the name and address of the relevant beneficiary;
(c) in relation to the income account of the deceased person: particulars of each amount received, including the name of the payer, the date received and the bank account into which the amount was paid; and particulars of each amount paid, including the name of the payee, the date of the payment and the bank account from which the amount was drawn;
(d) in relation to unsecured debts owed by the deceased person: the name and address of each creditor and the amount (if any) owed by the creditor to the deceased person; the amount of each debt; the year when the debt was contracted; and the nature of the debt;
(e) in relation to the secured debts owed by the deceased person: the name and address of each creditor and the amount (if any) owed by the creditor to the deceased person; the amount of each debt and the particulars of the security relating to it; the date when the security was given; the estimated present value of the
security; and the estimated deficiency or surplus if the security were to be realised;
(f) in relation to current hire purchase agreements: the name and address of the finance company; the date of the agreement; particulars of the goods to which the agreement relates; any arrears of payment under the agreement; the amount required to complete the agreement; and the estimated deficiency or surplus if the goods were to be realised;
(g) a statement of any other assets and liabilities, including contingent assets and liabilities, of the deceased person’s estate.
Rule 16
Rule 16 inserts rules 90A and 90B into the Bankruptcy Rules.
Rule 90A provides that where an application is made to the Court for an extension of the time specified in subsection 246(1) of the Act for a person to file a statement of a deceased person’s affairs, a copy of the application and of any affidavit in support of the application shall be served on the trustee two clear days before the hearing of the application.
Rule 90B (1) provides that an ex parte application may be made to the Registrar for an extension of time for a person to file a statement of a deceased person’s affairs.
Subrule 90B(2) provides that an ex parte application for an extension of the time to file a statement of a deceased person’s affairs shall be made by filing a request for the extension of time setting out the matters in support of the request.
Subrule 90B(3) provides that a person shall before making an ex parte application for an extension of time submit the request to the trustee and afford the trustee an opportunity to endores on, or attach to the request a note of any matter that the trustee wishes the Registrar to take into account before determining the application.
Subrule 90B(4) provides that where a trustee has received a request for an extension of time, he or she shall within 7 days return the request with any note that he or she wishes to make. If the trustee omits to return the request to the person making the request within 7 days the person may endorse the fact of that omission on the request and file the request with the Registrar.
Rule 17
Section 187A of the Act provides that Part X applies to joint debtors and partners, with the prescribed modifications, if any. Rule 100E of the Bankruptcy Rules modifies Part X in its application to joint debtors and partners. Paragragh 17(a) and (b) are purely drafting amendments to rule 100E. Paragragh 17(c) modifies section 188 of the Act in its application to joint debtors and partners by the insertion of a new subsection 188(6). This subsection (6) requires joint debtors and partners who execute an authority under section 188 to give to the trustee or solicitor who has consented to exercise the powers under the authority a statement of their joint affairs, in addition to separate statements by each of the joint debtors. This change is consequential to an amendment to the Act by the Amendment Act that removed the requirement for debtors to present a statement of affairs to a meeting of creditors under section 195, and substituted a requirement that the debtor make out a statement of affairs at or before the time of the execution of a section 188 authority, which requirement is contained in section 188 itself. Paragraph 17(d) omits paragraph 100E(b) of the Bankruptcy Rules. That paragraph modified section 195 of the Act in its application to joint debtors and partners by adding a requirement into section 195 that joint debtors and partners submit statements of their joint affairs to a meeting of creditors. This provision is now unnecessary because the requirement to make out a statement of affairs has been relocated into section 188.
Rule 18
Rule 127 of the Bankruptcy Rules provides that a witness who is summoned to attend for an examination under sections 50 or 81 of the Act is entitled to be paid conduct money and accomodation expenses. Rule 18 will extend this entitlement to persons who are summoned to attend for examination under sections 179B and 212D. The Amendment Act provides that a Registrar may summon a trustee, a controlling trustee or another person for, examination in relation to the administration by a trustee of a bankruptcy or controlling trusteeship under Part X of the Act. The amendment to rule 127 is consequential upon this change to the Act. It is appropriate and reasonable that an examinee should be tendered travelling and accomodation costs when required to attend for such an examination.
Rule 19
Rule 129 of the Bankruptcy Rules provides for the issue of summonses under sections 50 and 81 of the Act. In relation to examinations under section 50 of the Act, this procedure is replaced by the procedure under rules 17A and 17B inserted into the Bankruptcy Rules by rule 1 of these rules. Rule 19 provides for the repeal of rule 129 and the insertion of new rules 129, 129A, 129B and 129C, which revise the procedure relating to the conduct of examinations under section 81, and make this procedure consistent with the procedure which will apply in relation to examinations under Division 4A of Part VIII and Division 2A of Part X of the Act provided for in these rules.
Rule 129 sets out the procedure for an application under subsection 81(1) of the Act. Paragraphs 129(1) (a) and (b) require that the application be in writing and identify the person whom it is sought to examine and the bankruptcy in relation to which it is sought to examine the person. If the summons applied for is to contain a requirement under subsection 81(1B) of the Act for the production of books, then under paragraph 129(1)(c) the application must specify the
books or classes of books that the person is to produce at the examination. Paragraph 129(1)(d) requires that the application be supported by an affidavit setting out the enquiries that have been made concerning the subject matter of the proposed examination. If the application includes a requirement to produce books, the supporting affidavit must include the reason for requiring the production of any books or classes of books. The affidavit should set out the details of any earlier requests made to the person to supply the information that it is intended to elicit at the examination, and any earlier requests made to the person to produce books, if it is intended that the summons should include a requirement to the person to produce books, and the affidavit should set out the results of the earlier requests. The affidavit should also state the circumstances of any refusal or failure by the person to cooperate in complying with such requests. If an earlier request to provide information or produce books has not been made, the affidavit should state the reasons why a request has not been made.
Subrule 129(2) provides that if the application for a summons under section 81 of the Act seeks a requirement that the person being examined produce books, a copy of the application and the supporting affidavit must be served on the person whom it is sought to examine. That person may within 7 days of being served file with the Registrar a notice of objection to producing the books and an affidavit setting out the grounds of the objection.
Subrule 129(3) provides that the Registrar shall consider any notice of objection and the affidavit in support of the notice. If the Registrar issues a summons, he or she shall either grant or dismiss the application for a direction to produce documents and shall record and file a statement of reasons for his or her decision.
Subrule 129(4) provides that when the Registrar has issued, or refused to issue, a summons under subsection 81(1) of the Act, the Registrar shall upon request by either the applicant or
the person whose examination was requested provide a copy of the statement of reasons for the decision.
Subrule 129A(1) provides that a summons issued under subsection 81(1) of the Act shall be in accordance with Form 49. The summons shall be signed and stamped by the Registrar and be served personally on the person to be examined.
Paragraph 129A(2)(a) provides that where the summons contains a requirement for the person to be examined to produce books, the Registrar may ‘require the person to produce books or a specified class of books to the Court, or a person on a day and at a time and place specified in the direction. Under paragraph 129A(2)(b), the Registrar may order that a specified person, or specified persons be at liberty to inspect, and copy or make extracts of all or any part of the books produced. Paragraph 129A(2)(c) empowers the Registrar to give directions concerning the marking for identification, and the retention or disposal of the books produced.
Subrule 129A(3) requires the Court, the Registrar or the magistrate not to commence an examination under section 81 of the Act unless he or she is satisfied by evidence that the summons was served personally on the person to be examined or the summons came to the notice of the person and that person is not likely to be prejudiced by the absence of due service or the person to be examined does not object to being examined.
Subrule 129A(4) provides that where the person sought to be examined fails to appear in accordance with the summons the Court, the Registrar or the magistrate may hear submissions by or on behalf of any person entitled to appear or to be represented at the examination. The examination may either be adjourned to a fixed day and time or generally or the summons may be discharged. If the summons is not discharged and the Court, the Registrar or the magistrate is satisfied that the summons was personally served on the person to be examined, a warrant for the arrest of the person may be issued.
Subrule 129B(1) provides that the applicant for the examination, and any person who is represented or is participating personally in the examination may, during the examination, apply orally or in writing to the Court, the Registrar or the magistrate for a direction that the person being examined produce at the examination specified books or classes of books that are in the person’s possession.
Subrule 80AC(2) enables the applicant for the examination, the applicant for the direction and the person being examined to make submissions on an application for a direction for the production of books. The Court, the Registrar or the magistrate may require the person being examined to produce specified books or classes of books to the Court or to a person on a day and at a time and place specified in the direction. The examination may be adjourned in order to give the person being examined a reasonable period of time to comply with the direction to produce books. Orders may be made that a specified person or specified persons be at liberty to inspect, and copy or make extracts of all or any part of the books that are produced, and directions may be given concerning the marking for identification, and the retention or disposal of the books produced.
Rule 129C provides that where an examination under section 81 of the Act is adjourned otherwise than to the next sitting day the applicant shall as soon as practicable give written notice of the place, date and time fixed for the resumption of the examination to the person being examined and to any person who has been represented or who has participated in person at the examination.
Rule 20
Rule 20 provides for the insertion into its proper numerical position in Schedule 1 of the Bankruptcy Rules the forms set out in the Schedule to these rules. This rule will insert forms 7A, 32A, 36AA, 36AB and 49 into Schedule 1 of the Bankruptcy Rules.
Rule 21
Rule 21 sets out transitional and application provisions in respect of provisions of the Bankruptcy Rules amended by these rules. The Bankruptcy Rules, as amended by rules 5, 6, 7, 11, 14, 15 and 16 will apply:
(a) in relation to a bankruptcy if the date of bankruptcy occurs after the date of the commencement of these rules;
(b) in relation to a debtor’s statement of affairs made out under Part X of the Act where the authority signed by the debtor under section 188 of the Act is signed on or after the date of commencement of these rules;
(c) in relation to the publishing of an advertisement concerning the acceptance by the creditors of a debtor of a composition, where the authority under section 188 which preceded the meeting at which the composition was accepted was signed by the debtor on or after the day on which these rules commence; and
(d) in relation to orders for the administration of the estates of deceased persons in bankruptcy, where the order is made on or after the day these rules commence.
The Schedule
The Schedule to the rules provides for the following forms to be inserted into Schedule 1 to the Bankruptcy Rules:
(a) Form 7A - this is the form of summons to a person to attend for examination under section 50 of the Act;
(b) Form 32A - this is the form of summons to a person to attend for examination under subsection 179B(1) or 212D(1) of the Act;
(c) Form 36AA - this is the form of consent by a trustee to act as trustee of a deed of assignment, deed of arrangement or composition under Part X of the Act;
(d) Form 36AB - this is the form of certificate as to the terms of a resolution to be signed by the chairperson, or in the event that the chairperson fails to do so, by a creditor who was present at a meeting of
creditors under Part X of the Act where a resolution was passed nominating a person or persons to be trustee or trustees of a deed of assignment or of arrangement, or of a composition; and
(e) Form 49 - this is the form of summons to a person to attend for examination under section 81 of the Act.