Bankruptcy Act 1966

SCHEDULE 2 - INSOLVENCY PRACTICE SCHEDULE (BANKRUPTCY)  

Note: See section 4A .

PART 3 - GENERAL RULES RELATING TO ESTATE ADMINISTRATIONS  

Division 80 - Committees of inspection  

SECTION 80-55   OBLIGATIONS OF MEMBERS OF COMMITTEE OF INSPECTION  
Deriving profit or advantage from the estate

80-55(1)    
A member of a committee of inspection must not directly or indirectly derive any profit or advantage from the administration of the regulated debtor ' s estate.

Circumstances in which profit or advantage is taken to be derived

80-55(2)    
To avoid doubt, a member of a committee of inspection is taken to derive a profit or advantage from the administration of the regulated debtor ' s estate if:

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

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

Exceptions

80-55(3)    
Subsection (1) does not apply if the creditors resolve otherwise.

80-55(4)    
The member of the committee is not entitled to vote on the resolution referred to in subsection (3) .

80-55(5)    
Subsection (1) does not apply to the extent that:

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

(b)    the Court gives leave to the member of the committee to derive the profit or advantage.

Note:

Subsection (1) would not, for example, prevent a creditor from recovering debts proved in the bankruptcy, as this is permitted under Division 2 of Part VI .

80-55(6)    
Despite paragraph (2)(c) , subsection (1) does not apply to the extent that:

(a)    the profit or advantage arises because the trustee employs or engages a person to provide services in connection with the administration of the regulated debtor ' s estate; and

(b)    the person is a related entity of a member of the committee of inspection; and

(c)    one of the following applies:

(i) the member does not know, and could not reasonably be expected to know, that the trustee has employed or engaged a related entity of the member;

(ii) the creditors, by resolution, agree to the related entity being employed or engaged.

Offence

80-55(7)    
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) , (5) and (6) (see subsection 13.3(3) of the Criminal Code ).

Effect of contravention of this section

80-55(8)    
A transaction or any other arrangement entered into in contravention of this section may be set aside by the Court.