EXPLANATORY STATEMENT
Select Legislative Instrument 2009 No. 251
Issued by the authority of the
Judges of the Federal Court of Australia
Federal Court (Corporations) Amendment Rules 2009 (No. 1)
Section 59 of the Federal Court of Australia Act 1976 permits the Judges of the Court or a majority of them, to make rules of Court not inconsistent with the Act. These rules may provide for the practice and procedure to be followed in the Court and in Registries of the Court. They may extend to all matters incidental to any such practice or procedure that are necessary or convenient to be prescribed for the conduct of any business of the Court.
Under sub-section 59 (4) of the Federal Court of Australia Act 1976, the Legislative Instruments Act 2003 (other than sections 5, 6, 7, 10, 11 and 16 of that Act) applies in relation to rules of court made by the Court under the Federal Court of Australia Act 1976 or another Act:
(a) as if a reference to a legislative instrument were a reference to a rule of court; and
(b) as if a reference to a rule-maker were a reference to the Chief Justice acting on behalf of the Judges of the Court; and
(c) subject to such further modifications or adaptations as are provided for in regulations made under section 59A of the Federal Court of Australia Act 1976.
The Federal Court (Corporations) Rules 2000 apply to a proceeding in the Court under the Corporations Act 2001 or the Australian Securities and Investments Commission Act 2001 commenced on or after 1 January 2000.
The Judges have agreed to amend the Federal Court (Corporations) Rules 2000 to give effect to the recommendations of the Council of Chief Justices’ Harmonised Corporations Rules Monitoring Committee.
These Amendment Rules will amend the Federal Court (Corporations) Rules 2000 by amending rule 15A.5 so that it is consistent with the terms of articles 19 and 21 of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law which operates in Australia pursuant to the Cross-Border Insolvency Act 2009 (Cth).
The amendments have been the subject of consultation with the Insolvency Practitioners Association of Australia and the Law Council of Australia.
Details of the Rules are in the Attachment.
The Rules commence on the day after they are registered.
ATTACHMENT
Federal Court (Corporations) Amendment Rules 2009 (No. 1)
RULE 1 Name of rules
This rule provides that the Rules are to be cited as the Federal Court (Corporations) Amendment Rules 2009 (No. 1).
RULE 2 Commencement
This rule provides that these Rules commence on the day after they are registered.
RULE 3 Amendment of Federal Court (Corporations) Rules 2000
This rule provides that the Federal Court (Corporations) Rules 2000 are amended as set out in Schedule 1.
SCHEDULE 1
[1] Rule 15A.5
Rule 15A.5 currently provides that if the relief sought in an application under article 15 of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law which operates in Australia pursuant to the Cross-Border Insolvency Act 2009 (Cth) (the Model Law) includes an order under article 19 or 21 to entrust the distribution of the debtor’s assets to a person designated by the Court (other than the foreign representative), then that person must be an official liquidator and have filed a Consent to Act.
This amendment replaces rule 15A.5 with a new rule 15A.5. The effect of the amendment is to clarify the types of application under article 19 and 21 of the Model Law in relation to which the person designated by the Court to administer, realise or distribute all or part of the debtor’s assets must be an official liquidator and have filed a Consent to Act.
Overview
The Federal Court (Corporations) Amendment Rules 2009 (No. 1) were enacted to amend the Federal Court (Corporations) Rules 2000, specifically in relation to cross-border insolvency matters. These rules were issued under section 59 of the Federal Court of Australia Act 1976, which allows the Judges of the Federal Court to make rules governing the practice and procedure of the Court. The primary objective of these amendments is to align the Federal Court’s rules with the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law, ensuring consistency and effectiveness in cross-border insolvency proceedings. The changes were made following consultations with relevant stakeholders, including the Insolvency Practitioners Association of Australia and the Law Council of Australia. The Rules came into effect on the day after their registration.
Scope and Application
The Federal Court (Corporations) Amendment Rules 2009 (No. 1) are designed to modify the Federal Court (Corporations) Rules 2000, specifically targeting proceedings under the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001, which were commenced on or after 1 January 2000. These amendments are made to align with the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law, as it operates in Australia under the Cross-Border Insolvency Act 2009 (Cth). The amendments seek to clarify the criteria for the appointment of an official liquidator by the Court to administer, realise, or distribute a debtor's assets, ensuring compliance with articles 19 and 21 of the Model Law. This amendment follows consultation with relevant professional bodies such as the Insolvency Practitioners Association of Australia and the Law Council of Australia, and comes into effect on the day after the rules are registered. The Judges of the Federal Court of Australia have the authority to make these rules under Section 59 of the Federal Court of Australia Act 1976, subject to the constraints and procedural requirements outlined in the Legislative Instruments Act 2003.
Key Provisions
The Federal Court (Corporations) Amendment Rules 2009 (No. 1) primarily amend Rule 15A.5 of the Federal Court (Corporations) Rules 2000. This amendment is aimed at ensuring consistency with articles 19 and 21 of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law, which operates in Australia under the Cross-Border Insolvency Act 2009 (Cth). Specifically, Rule 15A.5 (as amended) now clarifies the types of applications under the Model Law where the person designated by the Court to administer, realise, or distribute the debtor’s assets must be an official liquidator and must have filed a Consent to Act.
These Amendment Rules impose certain obligations on the parties involved in proceedings under the Corporations Act 2001 or the Australian Securities and Investments Commission Act 2001. Notably, they require that in cases where an application under article 19 or 21 of the Model Law seeks an order entrusting the distribution of the debtor’s assets to a person designated by the Court, that person must be an official liquidator who has filed a Consent to Act. This ensures that the distribution process adheres to the stringent requirements set forth by the Model Law, thereby maintaining a standard of transparency and accountability in cross-border insolvency proceedings.
The Amendment Rules do not explicitly state any new offences, penalties, or consequences for non-compliance. However, any breach of the rules could potentially lead to the Court setting aside orders or taking other remedial actions deemed necessary under the Corporations Act 2001 or the Australian Securities and Investments Commission Act 2001. While the Amendment Rules themselves do not impose specific penalties, non-compliance with the broader legislative framework could result in substantial civil or criminal penalties as outlined in the respective Acts. For example, under the Corporations Act 2001, officers of a corporation found to be in breach of their duties may face fines and imprisonment, reflecting the seriousness with which such non-compliance is treated.