Explanatory Statement
Bankruptcy Rules Amendment
Statutory Rules 1988 No. 342
The Bankruptcy Rules Amendment Statutory Rules No. of 1988 amend the Bankruptcy Rules to provide a procedure for a debtor who is contemplating voluntary bankruptcy to avail himself or herself of the optional seven day pre-bankruptcy moratorium period inserted into the Bankruptcy Act 1966 (the Act) by the Bankruptcy Amendment Act 1987 (the Amendment Act). The Amendment Act inserted Division 2A into Part IV of the Act. Division 2A of Part IV is entitled ‘Declaration of Intention to present Debtor’s Petition’. A debtor is able to present a declaration to a Registrar in Bankruptcy, and if the Registrar accepts the declaration, the debtor’s creditors are stayed from enforcement action for 7 days, and the debtor is accorded the opportunity to consider possible alternatives to bankruptcy such as an arrangement without sequestration under Part X of the Act. These rules prescribe the form of declaration of intention, and the form of seal to be used by the Registrar in Bankruptcy in endorsing the declaration.
The Amendment Act inserted into the Act a new section 19AA defining the investigatory powers of trustees and Official Receivers in relation to bankrupts. The investigatory powers were formerly set out in section 19 of the Act. These rules make a consequential amendment to rule 31A of the Bankruptcy Rules, substituting a reference to subsection 19AA(2) for the reference in that rule to paragraph 19(1)(c) of the Act.
These rules are made pursuant to subsection 4(1) of the Acts Interpretation Act 1901 and come into operation on the same day that the relevant provisions of the Amendment Act are proclaimed to commence, which is 3 January 1989.
Details of the rules are as follows.
Rule 1
Rule 1 inserts a new Division 4A into Part II of the Bankruptcy Rules. Division 4A is entitled ‘Declaration of Intention to Present Debtor’s Petition’ and comprises rules 19A and 19B.
Section 54A of the Act provides that a debtor may present to the Registrar in Bankruptcy a declaration of his or her intention to present a debtor’s petition, the declaration being in accordance with the prescribed form. Rule 19A prescribes Form 7B as the form of declaration.
Subrule 19B(1) provides that where the Registrar accepts a declaration of intention to present a debtor’s petition from a debtor, the Registrar shall give a signed and sealed copy of the declaration to the debtor. Under the pre-bankruptcy moratorium in the Act, the debtor must produce the signed and sealed copy of the declaration to a creditor in order to obtain the benefit of the limited stay on enforcement action. Subparagraph 54C(a)(ii) of the Act requires the Registrar to sign and seal a declaration which he or she accepts. Subrule 19B(2) prescribes the form of seal to be used by the Registrar in sealing copies of declarations. The seal is in the form of 2 concentric circles with the words ‘Commonwealth of Australia - Registrar in Bankruptcy’ inscribed in the inner circle.
Rule 2
Rule 31A of the Bankruptcy Rules requires a registered trustee who has prepared and filed with the Registrar a report on an investigation of a bankrupt’s affairs to send a copy of the report to the Official Receiver. The obligation to prepare and file the report was contained in paragraph 19(1)(c) of the Act. After the commencement of the Amendment Act, the reporting requirement will be set out in subsection 19AA(2) of the Act. The amendment to rule 31A made by rule 2 is consequential upon this amendment to the Act.
Rule 3
Rule 3 amends Schedule 1 of the Bankruptcy Rules by inserting Form 7B which is the prescribed form of declaration of intention by a debtor to present a debtor’s petition under rule 19A of the Bankruptcy Rules as inserted by rule 1 of these rules.
Rule 4
Section 19 of the Act as in force immediately before the commencement of the Amendment Act will continue to apply in relation to bankruptcies in respect of which the date of bankruptcy occurred before the date of that commencement. The new section 19AA applies only in relation to bankruptcies occurring after the date of its commencement. Rule 4 mirrors this arrangement in relation to the amendment to rule 31A of the Bankruptcy Rules made by rule 3 of these rules, so that rule 31A as in force immediately before the commencement of these rules will continue to apply in relation to bankruptcies in respect of which the date of bankruptcy occurred before that commencement.
Schedule
The Schedule to the rules contains Form 7B, the form of declaration of intention to present a debtor’s petition, inserted into Schedule 1 of the Bankruptcy Rules by rule 3 of these rules.
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