Bankruptcy Amendment Regulations 2004 (No. 1) (256 of 2004)

Schedule 1   Amendments (regulation 3)

20   Schedule 6

substitute

Schedule 6 Modifications in relation to Part X of the Act

(regulations 10.01, 10.05, 10.07, 10.08 and 10.13)

Part 1 Modifications of Part X of the Act  - joint debtors

1 Section 187A

omit

This Part

insert

(1) This Part

2 Section 187A

insert

(2) In the application of this Part (other than subsection 187 (1A)) to joint debtors, whether partners or not, an expression specified in one of the following rules of interpretation applies to the extent that the context reasonably permits:

(a) 'a debtor' is to be read as 'joint debtors';

(b) 'the debtor' is to be read as 'the joint debtors';

(c) 'the debtor's' is to be read as 'the joint debtors';

(d) if used in relation to a debtor:

(i) 'he or she' is to be read as 'they'; and

(ii) 'his or her' is to be read as 'their'; and

(iii) 'him or her' is to be read as 'them'; and

(iv) a noun or verb in the singular form is to be read as being in the plural form.

(3) Subsection (2) applies, subject to any specific modifications of this Part by the Bankruptcy Regulations 1996.

(4) To the extent that the context reasonably permits, a reference (by operation of subsection (2)) to joint debtors includes a reference to any of the joint debtors.

(5) A reference to the affairs, or examinable affairs, of a debtor includes a reference to the separate affairs, or separate examinable affairs, of a joint debtor.

3 Subsection 188 (1)

omit

A debtor

insert

If each joint debtor is a person

4 Subsection 188 (1)

before

may sign

insert

the joint debtors

5 Subsections 188 (2AA) and (2AB)

omit

the debtor

insert

each joint debtor

6 Subsection 188 (2C)

omit the second occurrence of

the debtor

insert

each joint debtor

7 Subsection 188 (2D)

omit the second occurrence of

the debtor

insert

each joint debtor

8 Subsection 188 (4)

before

debtor

insert

joint

9 Subsection 188 (5)

omit

the District in which the

insert

the District in which each joint

10 Paragraphs 188A (2) (a) and (c)

omit

the debtor's

insert

each joint debtor's

11 Paragraph 188A (2) (e)

omit

the debtor

insert

each joint debtor

12 Paragraph 188A (2) (l)

omit

the debtor

insert

each joint debtor

13 Subsection 189AB (1)

omit

(1) When the debtor's property becomes subject to control under this Division, the debtor's property is charged with:

insert

(1) When the property of joint debtors becomes charged under this Division, the charges specified in subsection (1A) are created with respect to:

14 After subsection 189AB (1)

insert

(1A) The charges are:

(a) a charge over the joint property of the joint debtors; and

(b) a separate charge over the separate property of each joint debtor.

15 Subsection 189AB (2)

omit

the charge is not affected

insert

none of the charges is affected

16 Subsections 189AB (3) and (4)

omit

The charge

insert

Each charge

17 Paragraph 189A (1) (a)

substitute

(a) summarising and commenting on the information about:

(i) the joint estates of the joint debtors; and

(ii) the separate estate of each joint debtor;

that is available to the controlling trustee; and

Part 2 Modifications of Division 5 of Part IV of the Act  - meetings called under authorities under section 188 of the Act

1 Subsection 63A (1), definition of joint bankruptcy , subparagraph (d) (ii)

omit

jointly.

insert

jointly; or

2 Subsection 63A (1), definition of joint bankruptcy , after paragraph (d)

insert

(e) the situation arising out of the signing, by joint debtors for the purposes of section 188, of a joint authority or separate authorities for the administration of their joint estate.

3 Subsection 64A (2)

substitute

(2) Notice of a meeting must:

(a) be given in a manner specified in the regulations; and

(b) be published in:

(i) a national daily newspaper that circulates throughout Australia; and

(ii) a regional daily newspaper of the State or Territory in which the debtor resides.

4 After subsection 64B (5)

insert

(6) If the meeting is the first meeting of creditors called under an authority given under section 188, the notice must state that an information sheet about Part X, dealing with the following matters, may be obtained from the Insolvency and Trustee Service Australia:

(a) meetings under Part X;

(b) controlling trustees;

(c) the administration of an authority under section 188;

(d) the application of Part X to an authority under section 188;

(e) personal insolvency agreements;

(f) the rights of creditors under Part X.

5 After paragraph 64D (aa)

insert

(ab) whether the creditor, in relation to the debtor, is a related entity; and

6 Paragraph 64G (g)

substitute

(g) if the meeting is the first meeting  - tabling of the following documents:

(i) the statement of affairs, and the proposal for dealing with them, required by subsection 188 (2C) or (2D);

(ii) the report by the controlling trustee required by section 189A;

(iii) the written statement by the controlling trustee required by section 189B;

7 Section 64P, heading

substitute

64P Controlling trustee to preside at meeting under section 188

8 Subsections 64P (1) and (2)

substitute

(1) Subject to subsection (2), the controlling trustee must preside at a meeting called under an authority under section 188.

(2) The creditors and their representatives may:

(a) vote to remove the controlling trustee as President; and

(b) nominate another person to preside at the meeting.

9 Subsection 64P (6)

omit each mention of

the trustee

insert

the controlling trustee

10 Subsection 64P (7)

omit

the trustee

insert

the controlling trustee

11 Subsection 64R (1)

substitute

(1) If the meeting is the first meeting, the President must then request the controlling trustee to lay before the meeting the documents specified in paragraph 64G (g), and the controlling trustee must comply with the request.

12 Subsection 64R (2)

omit

the statement of affairs,

insert

those documents,

13 Subsection 64U (1)

substitute

(1) At the first meeting called under an authority under section 188 that is attended by:

(a) the controlling trustee; or

(b) if the creditors have passed a special resolution under paragraph 204 (1) (b)  - the trustee of a personal insolvency agreement;

the President must ask the trustee to state the basis on which he or she wishes to be remunerated.

14 Before subsection 64Y (1)

insert

(1A) The controlling trustee may adjourn a meeting to undertake further investigations, in relation to the controlling trusteeship, that the controlling trustee considers necessary.

(1B) The creditors attending the meeting may, by special resolution, revoke the trustee's decision to adjourn the meeting.

15 After subsection 64ZC (5)

insert

(5A) An instrument appointing a proxy must include a statement:

(a) disclosing whether or not the proxy has received a financial incentive to vote in a particular way:

(i) on a particular matter or matters that may arise at the meeting; or

(ii) on a particular motion or motions that may be proposed at the meeting; and

(b) including information to the effect that it is an offence, under subsection 263C (1), to give the trustee a voting document knowing or reckless that the document is false or misleading in a material particular.

16 After subsection 64ZE (2)

insert

(3) This section applies in relation to a personal insolvency agreement only if:

(a) a joint estate forms part of the property that is to be dealt with under the agreement; and

(b) the agreement does not specifically provide for distribution of the joint estate.

Part 3 Modifications of Part VIII of the Act   - controlling trustees and trustees of personal insolvency agreements

1 Before Part VIII, Division 1

insert in Part VIII

Division 1A Interpretation

154AA Interpretation

In this Part, in its application to Part X, a reference to a registered trustee includes a reference to a controlling trustee and a trustee of a personal insolvency agreement.

2 Section 156A

omit

3 Subsection 157 (1)

substitute

(1) If:

(a) the Official Trustee is:

(i) under section 188 or 192, the controlling trustee in relation to a debtor; or

(ii) under Part X, the trustee of a personal insolvency agreement; and

(b) the creditors wish to appoint, in place of the Official Trustee:

(i) a registered trustee or a solicitor as the controlling trustee; or

(ii) a registered trustee as the trustee of the personal insolvency agreement;

the creditors may do so by resolution at a meeting of creditors.

4 Section 158

substitute

158 Appointment of more than 1 controlling trustee

The creditors may appoint 2 or more controlling trustees jointly, or jointly and severally.

5 Section 159

omit

6 Section 160

substitute

160 Vacancy in position of trustee  - Official Trustee to act

If at any time there is no controlling trustee in relation to a debtor, or no trustee of a personal insolvency agreement under Part X, the Official Trustee is to act as the trustee.

7 After subsection 161 (1)

insert

(1A) This section does not apply in relation to a trustee of a personal insolvency agreement.

8 Subsection 173 (1)

substitute

(1) A controlling trustee who has consented to exercise powers given by an authority under section 188 must keep such accounts and records as are necessary to exhibit a full and correct account of the debtor's affairs and must permit a creditor:

(a) to inspect, at all reasonable times, either personally or by an agent, the accounts and records relating to the controlling trusteeship; and

(b) to take a copy of those accounts and records.

Penalty:   5 penalty units.

9 Section 180

omit

trustee of an estate.

insert

trustee, other than controlling trustee, under Part X.

10 Section 181

substitute

181 Removal of trustee

The creditors may, by resolution, at a meeting of which at least 7 days notice has been given, remove a controlling trustee or the trustee of a personal insolvency agreement and may, at that meeting or a later meeting, appoint another trustee to replace the removed trustee.

11 Subsection 181A (1)

substitute

(1) The current controlling trustee or the current trustee of a personal insolvency agreement may, with the written consent of another trustee (either a registered trustee or the Official Trustee), nominate the other trustee as the new trustee.

12 Subsection 181A (4)

substitute

(4) If no creditor lodges a written notice of objection with the current trustee at least 2 days before the specified date, the new trustee replaces the current trustee on the date specified in the notice.

Part 4 Modifications of Division 1 of Part V of the Act  - debtors whose property is subject to control under Division 2 of Part X of the Act

1 Section 77F

substitute

77F Allowances and expenses to be paid out of debtor's property subject to control under Division 2 of Part X

If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the property of a debtor that is subject to control under Division 2 of Part X, any amount payable to the person under section 77D or 77E is to be paid out of that property.

2 Subsection 81 (1)

substitute

(1) Where a person (in this section called the relevant person ) becomes a debtor whose property is subject to control under Division 2 of Part X, the Court or a Registrar may at any time (whether before or after control over that property has ended), on the application of:

(a) a person (in this section called a creditor ) who has or had a debt that would be provable if the debtor were a bankrupt;

(b) the controlling trustee; or

(c) the Official Receiver;

summon the relevant person for examination in relation to the property that is subject to control under Division 2 of Part X.

Part 5 Modification under subsection 231 (1) of the Act  - personal insolvency agreements

1 Section 77F

substitute

77F Allowances and expenses to be paid out of debtor's property subject to personal insolvency agreement

If the evidence that a person gives, or the books that a person produces, under section 77C, relate to matters concerning the property of a debtor that is subject to a personal insolvency agreement, any amount payable to the person under section 77D or 77E is to be paid out of that property.

Part 6 Modifications under subsection 231 (3) of the Act  - personal insolvency agreements

1 Subsection 113 (1)

omit

presentation of a petition on which, or by virtue of the presentation of which, a person became a bankrupt,

insert

making of a sequestration order,

2 Subsection 113 (1)

omit

or, in the case of a debtor's petition, the presentation of the petition

3 After subsection 133 (13)

insert

(14) This section does not apply in relation to a personal insolvency agreement.

4 After paragraph 134 (1) (b)

insert

(ba) carry on a business of the debtor in accordance with an authorisation given under subsection (5);

5 After subsection 134 (4)

insert

(5) If a personal insolvency agreement provides for the business of the debtor to be assigned to the trustee, the agreement may:

(a) authorise the trustee to carry on a business of a debtor; and

(b) specify the period during which, and the conditions (if any) subject to which, the trustee may carry on the business.

(6) The creditors may vary or terminate an authority under subsection (5) by passing a special resolution to that effect at a meeting called for the purpose.

(7) This section extends only in relation to property of the debtor that is subject to the personal insolvency agreement.

6 Subsection 136 (1)

omit

Where any property of the bankrupt is subject to a mortgage,

insert

Where any property of the debtor that is subject to the personal insolvency agreement is also subject to a mortgage,

7 Subsection 137 (1)

omit

Where goods of a bankrupt

insert

Where goods of a debtor that are subject to a personal insolvency agreement

8 Paragraphs 138 (1) (a) and (b)

substitute

(a) the property of a debtor that is subject to a personal insolvency agreement includes rights in respect of industrial property; and

(b) the debtor is liable to pay royalties or a share of profits to a person in respect of those rights;

9 Paragraph 138 (1) (c)

omit

the bankrupt;

insert

the debtor;

10 Paragraph 138 (1) (d)

omit

the bankrupt

insert

the debtor

11 Paragraphs 139 (1) (a) and (b)

substitute

(a) the trustee has seized or disposed of any goods in the possession or on the premises of a debtor that are subject to a personal insolvency agreement without notice of any claim by any person in respect of those goods; and

(b) the goods were not, at the date of execution of the personal insolvency agreement, the property of the debtor;

12 Subsection 139 (2)

omit everything after

in respect of property

insert

that is subject to the personal insolvency agreement, being rates, land tax or municipal or other statutory charges that fall due on or after the date of execution of the personal insolvency agreement, except to the extent, if any, of the rents and profits received by the trustee in respect of that property on or after the date of execution of the personal insolvency agreement.

13 Subsection 139 (3)

substitute

(3) Where the trustee of a personal insolvency agreement carries on a business previously carried on by the debtor, the trustee is not personally liable for any payment in respect of long service leave or extended leave:

(a) for which the debtor was liable; or

(b) to which a person employed by the trustee in his or her capacity as trustee of the personal insolvency agreement, or the legal personal representative of such a person, becomes entitled after the date of execution of the personal insolvency agreement.

14 Subsection 139 (4)

omit

trustee of the estate of a bankrupt

insert

trustee of a personal insolvency agreement

15 Section 139ZJ

omit

In this Subdivision:

insert

(1) In this Subdivision:

16 Section 139ZJ

insert

(2) In sections 139ZK, 139ZL and 139ZP, a reference to a bankrupt is to be read as a reference to a debtor.

(3) In subsection (2):

debtor means a person who has executed a personal insolvency agreement.

17 Paragraphs 139ZK (1) (e) and (f)

omit

bankruptcy,

insert

personal insolvency agreement,

18 Subsection 139ZL (1)

omit everything before paragraph (a), insert

(1) If a debtor is liable to pay a specified amount of his or her income to the trustee in accordance with a personal insolvency agreement, the Official Receiver:

19 Subsection 139ZL (1)

omit

make the contribution.

insert

pay that amount.

20 Paragraphs 139ZL (3) (a) and (b)

omit

the contribution

insert

the amount of income

21 Subsection 139ZQ (1)

omit

bankrupt under Division 3,

insert

personal insolvency agreement because of the application of any of sections 120 to 125,

22 Subsection 139ZR (3)

omit

Division 3.

insert

any of sections 120 to 125.

Part 7 Modification under subsection 231 (5) of the Act  - trustees of personal insolvency agreements

1 Subsection 173 (1)

substitute

(1) The trustee of a personal insolvency agreement must keep such accounts and records as are necessary to exhibit a full and correct account of the administration of the agreement and must permit a creditor of the debtor:

(a) to inspect, at all reasonable times, either personally or by an agent, the accounts and records relating to the personal insolvency agreement; and

(b) to take a copy of those accounts and records.

Penalty:   5 penalty units.