BANKRUPTCY AMENDMENT BILL 1996

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This is a Bill, not an Act. For current law, see the Acts databases.

BANKRUPTCY AMENDMENT BILL 1996

1996

The Parliament of the
Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Bankruptcy Amendment Bill 1996

No. , 1996

(Attorney-General)

A Bill for an Act to amend the law relating to bankruptcy, and for related purposes

9613120—975/8.10.1996—(131/96) Cat. No. 96 5231 0 ISBN 0644 477318

Contents

1 Short title 1

2 Commencement 1

3 Schedule(s) 2

Schedule 1—Amendment of the Bankruptcy Act 1966 3

Schedule 2—Amendment of the Bankruptcy Legislation Amendment Act 1996 12

Schedule 3—Transitional provisions relating to amendment of the Bankruptcy Act 1966 13

A Bill for an Act to amend the law relating to bankruptcy, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Bankruptcy Amendment Act 1996.

2 Commencement

(1) Subject to subsections (2), (3) and (4), this Act commences on the day on which it receives the Royal Assent.

(2) Subject to subsection (3), Schedules 1 and 3 commence on the commencement of the Bankruptcy (Estate Charges) Act 1996.

(3) If the Bankruptcy (Estate Charges) Act 1996 commences on the same day as Schedules 1 and 2 to the Bankruptcy Legislation Amendment Act 1996, Schedule 1 to this Act commences on that day immediately after those Schedules to the Bankruptcy Legislation Amendment Act 1996 have commenced.

Note: This means that the amendments of the Bankruptcy Act 1966 in Schedule 1 to this Act have effect as amendments of that Act as amended by Schedules 1 and 2 to the Bankruptcy Legislation Amendment Act 1996.

(4) Schedule 2 commences, or is taken to have commenced, immediately after the Bankruptcy Legislation Amendment Act 1996 receives or received the Royal Assent.

3 Schedule(s)
Subject to section 2, each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendment of the Bankruptcy Act 1966

1 At the end of paragraphs 20D(1)(a) and (b)

Add “or”.

2 At the end of subsection 20D(1)

Add:

; or (e) in bank bills accepted or endorsed by an approved bank.

3 Paragraph 154A(3)(b)

Repeal the paragraph, substitute:

(b) the charge imposed by section 4 of the Bankruptcy (Registration Charges) Act 1996.

4 At the end of section 154A

Add:

(4) The application is properly made if subsections (2) and (3) are complied with.

5 Subsection 155(1)

Omit “an application”, substitute “a properly made application”.

6 Paragraph 155C(1)(b)

Repeal the paragraph, substitute:

(b) the applicant has paid the charge imposed by section 5 of the Bankruptcy (Registration Charges) Act 1996.

7 Paragraph 155D(b)

Repeal the paragraph, substitute:

(b) the person has paid the charge imposed by section 6 of the Bankruptcy (Registration Charges) Act 1996.

8 Paragraph 155E(3)(b)

Repeal the paragraph, substitute:

(b) the charge imposed by section 7 of the Bankruptcy (Registration Charges) Act 1996.

9 After subsection 155E(3)

Insert:

(3A) The application is properly made if subsections (2) and (3) are complied with.

10 Subsection 155E(4)

Omit “an application”, substitute “a properly made application”.

11 Subsection 163(1)

Omit all the words up to and including “shall be”, substitute “The Official Trustee is to be”.

12 At the end of section 163

Add:

Note: The prescribed remuneration may be in respect of work the Official Trustee does as trustee of the estate of a bankrupt or in respect of work done in any other situation under this Act (such as where the Official Trustee acts as a trustee as a result of a deed of arrangement).

13 Subsection 169(1)

Repeal the subsection, substitute:

(1) A trustee of the estate of a bankrupt must pay all money received by him or her on account of the estate to the credit of a single interest bearing bank account that complies with the requirements (if any) specified in the regulations.

(1A) The trustee must only pay into the account money received by the trustee on account of the estate of a bankrupt, but he or she may pay in money received on account of more than one estate.

(1B) The trustee is entitled, in his or her personal capacity, to each payment of interest on the account, less an amount equal to the bank fees or charges (if any) paid or payable on the account during the period to which the interest relates.

(1C) If, under subsection (1B), the trustee is only entitled to part of a payment of interest, the rest of that payment:

(a) if the account contains money from only one estate—forms part of that estate; or

(b) if the account contains money from more than one estate—forms part of those estates in proportion to the respective amounts of money held in the account on account of each of those estates.

(1D) Interest on money in the bank account is not subject to taxation under a law of the Commonwealth, a State or a Territory except as provided in Part 2 of the Bankruptcy (Estate Charges) Act 1996.

14 Section 171

Repeal the section, substitute:

171 Trustee to give and obtain receipts

(1) The trustee of the estate of a bankrupt must issue a receipt in respect of a payment into the estate if asked to do so by the person making the payment.

(2) The trustee must, wherever practicable, obtain a receipt for a payment made out of the estate.

15 Section 172

Repeal the section.

16 At the end of section 173

Add:

Penalty: 5 penalty units.

17 Subsections 175(1) and (2)

Repeal the subsections, substitute:

(1) The Inspector-General may, on his or her own initiative or at the request of a creditor or the bankrupt, audit an account referred to in section 173 or cause it to be audited by an appropriate person.

Note: The heading to section 175 is replaced by the heading “Audit of trustee’s accounts”.

18 At the end of subsection 175(5)

Add:

Penalty: 5 penalty units.

19 Subsection 175(7)

Repeal the subsection.

20 After Part XIV

Insert:
Part XV—Provisions relating to the Bankruptcy Charges Acts

278 Interpretation

In this Part:

Estate Charges Act means the Bankruptcy (Estate Charges) Act 1996.

interest charge means charge imposed by Part 2 of the Estate Charges Act.

late payment penalty means penalty payable under subsection 281(1).

realisations charge means charge imposed by Part 3 of the Estate Charges Act.

registration charge means charge imposed by the Registration Charges Act.

Registration Charges Act means the Bankruptcy (Registration Charges) Act 1996.

279 Administration of, and powers and functions in relation to, the Charges Acts

(1) The Inspector-General has the general administration of the Estate Charges Act and the Registration Charges Act.

(2) A reference to “this Act” in section 12 or 77AA of this Act is taken to include a reference to the Estate Charges Act and the Registration Charges Act.

280 Deferred payment of interest charge or realisations charge

(1) A person may defer the payment of an amount of interest charge relating to a particular trustee account if:

(a) the total amount of interest charge that the person is liable to pay in respect of the account is less than $50; and

(b) the account has not been closed; and

(2) A person may defer the payment of an amount of realisations charge relating to a particular bankrupt’s estate, deceased person’s estate or debtor’s property, as the case may be, if:

(a) the total amount of realisations charge that the person is liable to pay in respect of the estate or property is less than $50; and

(b) the trustee account in relation to the estate or property has not been closed; and

(3) If a person intends to defer paying an amount of interest charge or realisations charge, he or she must notify the Inspector-General in writing of that fact before the time by which the amount is otherwise required to be paid.

(4) If a person defers payment of an amount of interest charge or realisations charge in accordance with this section, the amount is still payable to the Commonwealth, but the person does not have to pay it until 21 days after whichever of the following happens first:

(a) at the end of a charge period:

(i) if the deferral is of interest charge—the total amount of interest charge that the person is liable to pay in respect of the relevant trustee account is $50 or more; or

(ii) if the deferral is of realisations charge—the total amount of realisations charge that the person is liable to pay in respect of the relevant estate or property is $50 or more;

(b) the relevant trustee account is closed.

Note: As a deferred amount is still payable to the Commonwealth, it must be taken into account in working out the total amounts referred to in paragraphs (1)(a), (2)(a) and (4)(a).

(5) In this section:

trustee account means an account under section 169, or under that section as applied by any of the following provisions:

(a) section 210 (which applies section 169 to a controlling trustee under Division 2 of Part X);

(b) subsection 231(4) (which applies section 169 to a deed of assignment);

(d) subsection 243(3) (which applies section 169 to a composition);

(e) subsection 248(1) (which applies section 169 to administration of estates under Part XI).

281 Late payment penalty—interest charge and realisations charge

(1) If any interest charge or realisations charge remains unpaid after the time for payment of the charge, the person liable to pay the charge is liable to pay to the Commonwealth a late payment penalty calculated from that time at the rate of 20% per year on the amount unpaid.

(2) The person liable to pay late payment penalty is personally liable to pay the penalty and is not entitled to be reimbursed in respect of the penalty out of the bankrupt’s estate, the deceased person’s estate or the debtor’s property, as the case may be.

282 Extension of time for payment—interest charge and realisations charge

(1) The Inspector-General may, in a particular case, extend the time for payment of interest charge or realisations charge.

(2) The following provisions apply in relation to extensions of time under subsection (1):

(a) the person liable to pay the charge may apply for an extension;

(b) an application is to be in writing, setting out the reasons for the application, and is to be made to the Inspector-General;

(d) application may be made to the Administrative Appeals Tribunal for review of a decision to refuse an application, or to grant a lesser extension than was applied for.

Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

283 Remission of interest charge, realisations charge and late payment penalty

(1) The Inspector-General may remit an amount of interest charge, realisations charge or late payment penalty that is payable but has not been paid if the Inspector-General thinks that:

(a) failure to remit the amount would cause a person hardship; and

(b) it is appropriate to remit the amount.

(2) The following provisions apply in relation to remissions under subsection (1):

(a) the person liable to pay the charge or penalty may apply for a remission;

(b) an application is to be in writing, setting out the reasons for the application, and is to be made to the Inspector-General;

(d) application may be made to the Administrative Appeals Tribunal for review of a decision to refuse an application, or to remit a lesser amount than was applied for.

Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable.

284 Recovery of interest charge, realisations charge and late payment penalty

Interest charge, realisations charge or late payment penalty that is due and payable may be recovered by the Commonwealth as a debt due to the Commonwealth.

285 Payments by cheque or payment order

(1) If a person gives the Commonwealth a cheque or payment order in payment of an amount of interest charge, realisations charge, registration charge or late payment penalty, the amount is taken not to be paid until the cheque or payment order is paid by the bank or other person on which it is drawn.

(2) If:

(a) a person gives the Commonwealth a cheque or payment order in payment of an amount of interest charge or realisations charge; and

(b) the cheque or payment order is paid by the bank or building society on which it is drawn;

then, for the purposes of working out if there is a liability to late payment penalty, the amount of charge is taken to have been paid when the person gave the cheque to the Commonwealth.

286 Regulations may deal with other matters

(1) The regulations may include other provisions dealing with the collection and recovery of interest charge, realisations charge or late payment penalty, including (but not limited to) provisions dealing with the following:

(a) the methods by which charge and late payment penalty may be paid;

(b) refunds of, or overpayments of, charge or late payment penalty;

(c) as an alternative to the refund of the whole or a part of an amount to a person, crediting the amount or part of the amount against a liability of the person to pay charge or late payment penalty;

(d) forms to be used, and information to be provided, in relation to the payment of charge and late payment penalty.

(2) The matters that may be covered in regulations made for the purposes of paragraph (1)(a) include, but are not limited to, the making of payments using:

(a) electronic funds transfer systems; or

(b) credit cards; or

(3) A refund of an amount in accordance with the regulations is to be paid out of the Consolidated Revenue Fund, which is appropriated accordingly.

21 At the end of paragraph 315(2)(j)

Add:
(v) the making of other requests or applications under this Act or the presentation or lodgment of other documents under this Act; and

Schedule 2—Amendment of the Bankruptcy Legislation Amendment Act 1996

1 Items 309 and 310
Repeal the items.

Schedule 3—Transitional provisions relating to amendment of the Bankruptcy Act 1966

1 Bank accounts and investments under sections 169, 172 and 210

(1) If:

(a) immediately before the commencement of this Schedule, a trustee was maintaining an account under:

(i) section 169 or 172 of the Bankruptcy Act 1966 as then in force; or

(ii) section 210 of the Bankruptcy Act 1966 as in force immediately before the commencement of Schedule 1 to the Bankruptcy Legislation Amendment Act 1996; and

(b) the account does not comply with section 169 of the Bankruptcy Act 1966 as amended by Schedule 1 to this Act;

the trustee must pay the money into an account that complies with that section as so amended as soon as reasonably practicable after the commencement of this Schedule.

(2) If, immediately before the commencement of this Schedule, a trustee held public securities as an investment under section 172 of the Bankruptcy Act 1966 as then in force, the trustee must, as soon as reasonably practicable after that commencement:

(a) convert the securities into money; and

(b) pay the money into an account that complies with section 169 of the Bankruptcy Act 1966 as amended by Schedule 1 to this Act.

(3) This item does not require a trustee to close a fixed term deposit, or to convert fixed term securities into money, before the term ends.

(4) In this item, a reference to section 169 or 172 of the Bankruptcy Act 1966 as in force at a particular time includes a reference to that section as applied by other provisions of that Act as then in force.

2 Transition to realisations charge

(1) The Governor-General may make regulations dealing with the transition from the fees imposed by old rule 179 to the realisations charge imposed by Part 3 of the Bankruptcy (Estate Charges) Act 1996.

(2) For example, the regulations may provide for:

(a) the continued application, with specified modifications, of old rule 179 in relation to amounts received or paid by a trustee before the commencement of this Schedule, including, in particular, amounts received or paid before 1 November 1996 (the start of the first charge period); and

(b) the crediting or waiver of fees paid or payable under that rule, or that rule as it continues to apply, to the extent that the fees are attributable to amounts received by a trustee on or after 1 November 1996.

(3) In this item:

crediting means crediting against a liability to pay realisations charge.

old rule 179 means rule 179 of the Bankruptcy Rules as in force immediately before the commencement of Schedule 1 to the Bankruptcy Legislation Amendment Act 1996.

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