Bankruptcy Legislation Amendment (Debt Agreements) Act 2007 (44 of 2007)

Schedule 2   Amendments commencing on 1 July 2007

Bankruptcy Act 1966

71   After section 186L

Insert:

186LA Inspector-General may obtain information about debt agreement administration trust accounts

Scope

(1) This section applies to a bank if:

(a) the Inspector-General believes on reasonable grounds that:

(i) a person who is or was an administrator of a debt agreement holds or held an account with the bank; and

(ii) the account was kept, or purportedly kept, in compliance with subsection 185LD(1); and

(b) the Inspector-General has asked the person:

(i) under subsection 186K(3) or 186L(3), to give the Inspector-General a written explanation why the person should continue to be registered as a debt agreement administrator; or

(ii) under subsection 155H(1), to give the Inspector-General a written explanation why the person should continue to be registered as a trustee; and

(c) if subparagraph (b)(ii) applies - the Inspector-General asked for the explanation on the basis of paragraph 155H(1)(fa).

Requirement

(2) The Inspector-General may, by written notice given to the bank, require the bank to give to the Inspector-General, within the period and in the manner specified in the notice, such information about the account as is specified in the notice.

Offence

(3) A person commits an offence if:

(a) the person has been given a notice under subsection (2); and

(b) the person omits to do an act; and

(c) the omission contravenes a requirement in the notice.

Penalty for contravention of this subsection: 60 penalty units.

186LB Account-freezing notices - debt agreement administration trust accounts

Scope

(1) This section applies to a bank if:

(a) the Inspector-General believes on reasonable grounds that:

(i) a person who is or was an administrator of a debt agreement holds or held an account with the bank; and

(ii) the account was kept, or purportedly kept, in compliance with subsection 185LD(1); and

(b) at a particular time (the show cause time ), the Inspector-General asked the person:

(i) under subsection 186K(3) or 186L(3), to give the Inspector-General a written explanation why the person should continue to be registered as a debt agreement administrator; or

(ii) under subsection 155H(1), to give the Inspector-General a written explanation why the person should continue to be registered as a trustee; and

(c) if subparagraph (b)(ii) applies - the Inspector-General asked for the explanation on the basis of paragraph 155H(1)(fa).

Giving of freezing notice

(2) The Inspector-General may, by written notice (an account-freezing notice ) given to the bank within 42 days after the show cause time, direct the bank not to:

(a) make a withdrawal from the account; or

(b) permit the making of a withdrawal from the account;

except:

(c) in accordance with the written consent of the Inspector-General; or

(d) to recover from the account-holder an amount equal to an amount of tax (however described) that the bank has paid or is liable to pay in connection to the operation of the account; or

(e) to discharge a liability of the account-holder to pay a fee or charge in relation to the operation of the account; or

(f) in such circumstances (if any) as are specified in the regulations.

Duration of freezing notice

(3) An account-freezing notice given to a bank:

(a) comes into force when the notice is given to the bank; and

(b) remains in force for:

(i) 42 days after the show cause time; or

(ii) if a shorter period is specified in the notice - that shorter period.

Extension of 42-day period

(4) The Court may, on application by the Inspector-General, extend, or further extend, the 42-day period referred to in subsection (2) or subparagraph (3)(b)(i).

Revocation of freezing notice

(5) If an account-freezing notice is in force in relation to a bank, the Inspector-General may, by written notice given to the bank, revoke the account-freezing notice.

Copy of account-freezing notice to be given to account-holder etc.

(6) If the Inspector-General gives or revokes an account-freezing notice that relates to an account, the Inspector-General must give a copy of the account-freezing notice or the revocation notice, as the case may be, to the holder of the account.

(7) A failure to comply with subsection (6) does not affect the validity of the account-freezing notice or the revocation notice, as the case may be.

Consent of Inspector-General

(8) A consent under paragraph (2)(c) may be:

(a) unconditional; or

(b) subject to such conditions (if any) as are specified in the notice of consent.

(9) If the Inspector-General decides to refuse to give a consent under paragraph (2)(c), an application may be made to the Administrative Appeals Tribunal for review of the decision.

186LC Power of court to set aside account-freezing notices

(1) If the Court, on application by:

(a) a bank to whom an account-freezing notice has been given; or

(b) the account-holder whose account is affected by an account-freezing notice; or

(c) any other interested person;

is satisfied that the Inspector-General was not authorised to give the notice, the Court may make an order setting aside the notice.

(2) An account-freezing notice that is set aside is taken not to have been given.

186LD Judicial enforcement of account-freezing notices

(1) If the Court is satisfied that a bank has breached, or is proposing to breach, an account-freezing notice, the Court may, on application of the Inspector-General, make any or all of the following orders:

(a) an order directing the bank to comply with that notice;

(b) any other order that the Court thinks appropriate.

(2) The Court may discharge or vary an order granted under this section.

186LE Protection of bank

No criminal or civil proceedings lie against a bank because of anything done (or not done) by the bank in good faith:

(a) in compliance with an account-freezing notice; or

(b) in connection with, or incidental to, the bank’s compliance with an account-freezing notice.