Bankruptcy Act 1966

SCHEDULE 2 - INSOLVENCY PRACTICE SCHEDULE (BANKRUPTCY)  

Note: See section 4A .

PART 3 - GENERAL RULES RELATING TO ESTATE ADMINISTRATIONS  

Division 60 - Remuneration and other benefits received by the trustee  

Subdivision E - Duties of trustees relating to remuneration and benefits etc.  

SECTION 60-20   TRUSTEE MUST NOT DERIVE PROFIT OR ADVANTAGE FROM THE ADMINISTRATION OF THE ESTATE  
Deriving profit or advantage from the estate

60-20(1)    
A trustee of a regulated debtor ' s estate must not directly or indirectly derive any profit or advantage from the administration of the estate.

Circumstances in which profit or advantage is taken to be derived

60-20(2)    
To avoid doubt, a trustee of a regulated debtor ' s estate is taken to derive a profit or advantage from the administration of the estate if:

(a)    the trustee directly or indirectly derives a profit or advantage from a transaction (including a sale or purchase) entered into for or on account of the estate; or

(b)    the trustee directly or indirectly derives a profit or advantage from a creditor of the estate; or

(c)    a related entity of the trustee directly or indirectly derives a profit or advantage from the administration of the estate.

Exceptions

60-20(3)    
Subsection (1) does not apply to the extent that:

(a)    another provision of this Act, or of another law, requires or permits the trustee to derive the profit or advantage; or

(b)    the Court gives leave to the trustee to derive the profit or advantage.

Note:

Subsection (1) would not, for example, prevent the trustee from recovering remuneration for necessary work properly performed by the trustee in relation to the administration of the estate, as the trustee is permitted to do so under other provisions of this Act.

60-20(4)    
Despite paragraph (2)(c) , subsection (1) does not apply to the extent that:

(a)    

the trustee employs or engages a person to provide services in connection with the administration of the estate; and

(b)    

a related entity of the trustee directly or indirectly derives a profit or advantage as a result of that employment or engagement; and

(c)    

one of the following is satisfied:

(i) the trustee does not know, and could not reasonably be expected to know, that the related entity would derive that profit or advantage;

(ii) the creditors, by resolution, agree to the related entity deriving the profit or advantage;

(iii) it is not reasonably practicable in all the circumstances to obtain the agreement, by resolution, of the creditors to the related entity deriving the profit or advantage and the cost of employing or engaging the person to provide the services is reasonable in all the circumstances.

60-20(4A)    

Despite paragraph (2)(c) , subsection (1) does not apply to the extent that a related entity of the trustee directly or indirectly derives a profit or advantage:

(a)    from remuneration paid to the trustee in accordance with section 60-5 of this Schedule; or

(b)    from a profit or advantage covered by subsection (4) .

60-20(5)    
Subsection (1) does not apply to the extent that the profit or advantage is a payment that:

(a)    is made to the trustee by or on behalf of the Commonwealth or an agency or authority of the Commonwealth; and

(b)    is of a kind prescribed.

Offence

60-20(6)    
A person commits an offence of strict liability if:

(a)    the person is subject to a requirement under subsection (1) ; and

(b)    the person fails to comply with the requirement.

Penalty: 50 penalty units.

Note:

A defendant bears an evidential burden in relation to the matters in subsections (3) , (4) and (5) (see subsection 13.3(3) of the Criminal Code ).

Effect of contravention of this section

60-20(7)    
A transaction or any other arrangement entered into in contravention of this section may be set aside by the Court.