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

BANKRUPTCY AND FAMILY LAW LEGISLATION AMENDMENT BILL 2005

2004-2005
The Parliament of the
Commonwealth of Australia
THE SENATE
As read a third time
Bankruptcy and Family Law Legislation
Amendment Bill 2005
No. , 2005
A Bill for an Act to amend the Bankruptcy Act
1966, and for other purposes
i Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
Contents
1
Short title ......................................................................................1
2
Commencement .............................................................................1
3
Schedule(s)....................................................................................2
Schedule 1--Amendments relating to the interaction between
family law and bankruptcy law
3
Part 1--Amendments
3
Bankruptcy Act 1966
3
Family Law Act 1975
5
Part 2--Application provisions
23
Schedule 2--Amendments relating to income contributions
25
Bankruptcy Act 1966
25
Schedule 3--Amendment relating to maintenance agreements
46
Bankruptcy Act 1966
46
Schedule 4--Amendments relating to financial agreements
under the Family Law Act 1975
47
Bankruptcy Act 1966
47
Schedule 5--Additional amendments relating to the interaction
between family law and bankruptcy law
48
Family Law Act 1975
48
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 1
T
HIS
bill originated in the Senate; and,
1
having this day passed, is now ready for
2
presentation to the House of
3
Representatives for its concurrence.
4
HARRY EVANS
5
Clerk of the Senate
6
The Senate
7
9 February 2005
8
A Bill for an Act to amend the Bankruptcy Act
9
1966, and for other purposes
10
The Parliament of Australia enacts:
11
1 Short title
12
This Act may be cited as the Bankruptcy and Family Law
13
Legislation Amendment Act 2005.
14
2 Commencement
15
(1) Each provision of this Act specified in column 1 of the table
16
commences, or is taken to have commenced, in accordance with
17
column 2 of the table. Any other statement in column 2 has effect
18
according to its terms.
19
20
2 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
Commencement information
Column 1
Column 2
Column 3
Provision(s)
Commencement
Date/Details
1. Sections 1 to 3
and anything in
this Act not
elsewhere covered
by this table
The day on which this Act receives the
Royal Assent.
2. Schedule 1
A single day to be fixed by Proclamation.
However, if any of the provision(s) do not
commence within the period of 6 months
beginning on the day on which this Act
receives the Royal Assent, they commence
on the first day after the end of that period.
3. Schedule 2
The day on which this Act receives the
Royal Assent.
4. Schedules 3, 4
and 5
The 28th day after the day on which this
Act receives the Royal Assent.
Note:
This table relates only to the provisions of this Act as originally
1
passed by the Parliament and assented to. It will not be expanded to
2
deal with provisions inserted in this Act after assent.
3
(2) Column 3 of the table contains additional information that is not
4
part of this Act. Information in this column may be added to or
5
edited in any published version of this Act.
6
3 Schedule(s)
7
Each Act that is specified in a Schedule to this Act is amended or
8
repealed as set out in the applicable items in the Schedule
9
concerned, and any other item in a Schedule to this Act has effect
10
according to its terms.
11
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 3
1
Schedule 1--Amendments relating to the
2
interaction between family law and
3
bankruptcy law
4
Part 1--Amendments
5
Bankruptcy Act 1966
6
1 Section 27
7
Omit all the words after "all courts", substitute:
8
other than:
9
(a) the jurisdiction of the High Court under section 75 of the
10
Constitution; or
11
(b) the jurisdiction of the Family Court under section 35 or 35A
12
of this Act.
13
2 After section 34A
14
Insert:
15
35 Family Court's jurisdiction in bankruptcy where trustee is a
16
party to property settlement or spousal maintenance
17
proceedings etc.
18
(1) If, at a particular time:
19
(a) a party to a marriage is a bankrupt; and
20
(b) the trustee of the bankrupt's estate is:
21
(i) a party to property settlement proceedings in relation to
22
either or both of the parties to the marriage; or
23
(ii) an applicant under section 79A of the Family Law Act
24
1975 for the variation or setting aside of an order made
25
under section 79 of that Act in property settlement
26
proceedings in relation to either or both of the parties to
27
the marriage; or
28
(iii) a party to spousal maintenance proceedings in relation to
29
the maintenance of a party to the marriage;
30
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
4 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
then, at and after that time, the Family Court has jurisdiction in
1
bankruptcy in relation to any matter connected with, or arising out
2
of, the bankruptcy of the bankrupt.
3
(2) Subsection (1) does not limit the Family Court's jurisdiction under
4
section 35A.
5
(3) In this section:
6
property settlement proceedings has the same meaning as in the
7
Family Law Act 1975.
8
spousal maintenance proceedings means proceedings under the
9
Family Law Act 1975 with respect to the maintenance of a party to
10
a marriage.
11
3 After section 59
12
Insert:
13
59A Orders under Part VIII of the Family Law Act 1975
14
Sections 58 and 59 have effect subject to an order under Part VIII
15
of the Family Law Act 1975.
16
4 Paragraph 116(2)(n)
17
Omit "and".
18
5 Paragraph 116(2)(p)
19
Omit "(4).", substitute "(4);".
20
6 At the end of subsection 116(2)
21
Add:
22
(q) any property that, under an order under Part VIII of the
23
Family Law Act 1975, the trustee is required to transfer to the
24
spouse of the bankrupt.
25
6A After section 121
26
Insert:
27
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 5
121A Rebuttable presumptions of insolvency
1
(1) A rebuttable presumption that a person is deemed to be insolvent
2
arises for the purposes of sections 120 and 121 where it is
3
established that the person:
4
(a) has made a transfer of property; and
5
(b) had an outstanding tax return, or outstanding tax returns, at
6
the time the transfer of property was made.
7
(2) A rebuttable presumption that a person is deemed to be insolvent
8
arises for the purposes of sections 120 and 121 where it is
9
established that the person:
10
(a) has made a transfer of property; and
11
(b) has failed to keep adequate books, accounts and records in
12
accordance with section 270.
13
7 At the end of section 140
14
Add:
15
(11) This section has effect subject to an order under section 114 of the
16
Family Law Act 1975 (which deals with interlocutory injunctions).
17
8 At the end of section 161
18
Add:
19
(3) This section applies to proceedings under the Family Law Act 1975
20
in a corresponding way to the way in which it applies to a suit.
21
(4) If:
22
(a) a person (the first trustee) ceases to be the trustee of a
23
bankrupt's estate; and
24
(b) proceedings to which the first trustee was a party were
25
pending under the Family Law Act 1975 immediately before
26
the cessation; and
27
(c) another person (the second trustee) becomes the first trustee's
28
successor in office;
29
the second trustee is, by force of this subsection, substituted for the
30
first trustee as a party to the proceedings.
31
Family Law Act 1975
32
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
6 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
9 Subsection 4(1)
1
Insert:
2
bankruptcy trustee, in relation to a bankrupt, means the trustee of
3
the bankrupt's estate.
4
10 Subsection 4(1)
5
Insert:
6
debtor subject to a personal insolvency agreement has the
7
meaning given by section 5.
8
11 Subsection 4(1) (after paragraph (c) of the definition of
9
matrimonial cause)
10
Insert:
11
(caa) proceedings between:
12
(i) a party to a marriage; and
13
(ii) the bankruptcy trustee of a bankrupt party to the
14
marriage;
15
with respect to the maintenance of the first-mentioned party;
16
or
17
12 Subsection 4(1) (after paragraph (ca) of the definition of
18
matrimonial cause)
19
Insert:
20
(cb) proceedings between:
21
(i) a party to a marriage; and
22
(ii) the bankruptcy trustee of a bankrupt party to the
23
marriage;
24
with respect to any vested bankruptcy property in relation to
25
the bankrupt party, being proceedings:
26
(iii) arising out of the marital relationship; or
27
(iv) in relation to concurrent, pending or completed divorce
28
or validity of marriage proceedings between the parties
29
to the marriage; or
30
(v) in relation to the divorce of the parties to the marriage,
31
the annulment of the marriage or the legal separation of
32
the parties to the marriage, being a divorce, annulment or
33
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 7
legal separation effected in accordance with the law of an
1
overseas jurisdiction, where that divorce, annulment or
2
legal separation is recognised as valid in Australia under
3
section 104; or
4
13 Subsection 4(1)
5
Insert:
6
personal insolvency agreement has the same meaning as in the
7
Bankruptcy Act 1966.
8
14 Subsection 4(1)
9
Insert:
10
property settlement proceedings means proceedings with respect
11
to:
12
(a) the property of the parties to a marriage or either of them; or
13
(b) the vested bankruptcy property in relation to a bankrupt party
14
to a marriage.
15
15 Subsection 4(1) (after paragraph (a) of the definition of
16
property settlement or spousal maintenance
17
proceedings)
18
Insert:
19
(aa) the vested bankruptcy property in relation to a bankrupt party
20
to a marriage; or
21
16 Subsection 4(1)
22
Insert:
23
trustee, in relation to a personal insolvency agreement, has the same
24
meaning as in the Bankruptcy Act 1966.
25
17 Subsection 4(1)
26
Insert:
27
vested bankruptcy property, in relation to a bankrupt, means
28
property of the bankrupt that has vested in the bankruptcy trustee
29
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
8 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
under the Bankruptcy Act 1966. For this purpose, property has the
1
same meaning as in the Bankruptcy Act 1966.
2
18 After section 4A
3
Insert:
4
5 Debtor subject to a personal insolvency agreement
5
For the purposes of this Act, if:
6
(a) a person who is a debtor (within the meaning of Part X of the
7
Bankruptcy Act 1966) executes a personal insolvency
8
agreement; and
9
(b) the agreement has not ended (within the meaning of the
10
Bankruptcy Act 1966);
11
the person is a debtor subject to the personal insolvency agreement.
12
19 Subsections 44(3), (3A) and (3B)
13
Omit "or (ca)", substitute ", (caa), (ca) or (cb)".
14
20 After subsection 45(1)
15
Insert:
16
(1A) For the purposes of subsection (1), if the bankruptcy trustee of a
17
bankrupt party to a marriage applies under section 139A of the
18
Bankruptcy Act 1966 for an order under Division 4A of Part VI of
19
that Act, proceedings relating to that application are taken to be
20
proceedings in relation to the marriage.
21
21 At the end of section 71A
22
Add:
23
(2) Subsection (1) does not apply in relation to proceedings of a kind
24
referred to in paragraph (caa) or (cb) of the definition of
25
matrimonial cause in subsection 4(1).
26
22 At the end of section 72
27
Add:
28
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 9
(2) The liability under subsection (1) of a bankrupt party to a marriage
1
to maintain the other party may be satisfied, in whole or in part, by
2
way of the transfer of vested bankruptcy property in relation to the
3
bankrupt party if the court makes an order under this Part for the
4
transfer.
5
23 At the end of section 74
6
Add:
7
(2) If:
8
(a) an application is made for an order under this section in
9
proceedings between the parties to a marriage with respect to
10
the maintenance of a party to the marriage; and
11
(b) either of the following subparagraphs apply to a party to the
12
marriage:
13
(i) when the application was made, the party was a
14
bankrupt;
15
(ii) after the application was made but before the
16
proceedings are finally determined, the party became a
17
bankrupt; and
18
(c) the bankruptcy trustee applies to the court to be joined as a
19
party to the proceedings; and
20
(d) the court is satisfied that the interests of the bankrupt's
21
creditors may be affected by the making of an order under this
22
section in the proceedings;
23
the court must join the bankruptcy trustee as a party to the
24
proceedings.
25
(3) If a bankruptcy trustee is a party to proceedings with respect to the
26
maintenance of a party to a marriage, then, except with the leave of
27
the court, the bankrupt party to the marriage is not entitled to make
28
a submission to the court in connection with any vested bankruptcy
29
property in relation to the bankrupt party.
30
(4) The court must not grant leave under subsection (3) unless the court
31
is satisfied that there are exceptional circumstances.
32
(5) If:
33
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
10 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(a) an application is made for an order under this section in
1
proceedings between the parties to a marriage with respect to
2
the maintenance of a party to the marriage; and
3
(b) either of the following subparagraphs apply to a party to the
4
marriage (the debtor party):
5
(i) when the application was made, the party was a debtor
6
subject to a personal insolvency agreement; or
7
(ii) after the application was made but before it is finally
8
determined, the party becomes a debtor subject to a
9
personal insolvency agreement; and
10
(c) the trustee of the agreement applies to the court to be joined as
11
a party to the proceedings; and
12
(d) the court is satisfied that the interests of the debtor party's
13
creditors may be affected by the making of an order under this
14
section in the proceedings;
15
the court must join the trustee of the agreement as a party to the
16
proceedings.
17
(6) If the trustee of a personal insolvency agreement is a party to
18
proceedings with respect to the maintenance of a party to a
19
marriage, then, except with the leave of the court, the party to the
20
marriage who is the debtor subject to the agreement is not entitled to
21
make a submission to the court in connection with any property
22
subject to the agreement.
23
(7) The court must not grant leave under subsection (6) unless the court
24
is satisfied that there are exceptional circumstances.
25
(8) For the purposes of subsections (2) and (5), an application for an
26
order under this section is taken to be finally determined when:
27
(a) the application is withdrawn or dismissed; or
28
(b) an order (other than an interim order) is made as a result of
29
the application.
30
24 After paragraph 75(2)(h)
31
Insert:
32
(ha) the effect of any proposed order on the ability of a creditor of
33
a party to recover the creditor's debt, so far as that effect is
34
relevant; and
35
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 11
25 At the end of paragraph 75(2)(n)
1
Omit all the words after "section 79", substitute:
2
in relation to:
3
(i) the property of the parties; or
4
(ii) vested bankruptcy property in relation to a bankrupt
5
party;
6
26 At the end of section 75
7
Add:
8
(4) In this section:
9
party means a party to the marriage concerned.
10
27 Subsection 79(1)
11
Repeal the subsection, substitute:
12
(1) In property settlement proceedings, the court may make such order
13
as it considers appropriate:
14
(a) in the case of proceedings with respect to the property of the
15
parties to the marriage or either of them--altering the interests
16
of the parties to the marriage in the property; or
17
(b) in the case of proceedings with respect to the vested
18
bankruptcy property in relation to a bankrupt party to the
19
marriage--altering the interests of the bankruptcy trustee in
20
the vested bankruptcy property;
21
including:
22
(c) an order for a settlement of property in substitution for any
23
interest in the property; and
24
(d) an order requiring:
25
(i) either or both of the parties to the marriage; or
26
(ii) the relevant bankruptcy trustee (if any);
27
to make, for the benefit of either or both of the parties to the
28
marriage or a child of the marriage, such settlement or
29
transfer of property as the court determines.
30
28 Subsection 79(1A)
31
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
12 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
Omit "proceedings with respect to the property of the parties to a
1
marriage or either of them", substitute "property settlement
2
proceedings".
3
29 Subsection 79(1A)
4
Omit "party to the proceedings", substitute "party to the marriage".
5
30 Subsection 79(1B)
6
Omit "proceedings with respect to the property of the parties to a
7
marriage or either of them", substitute "property settlement
8
proceedings".
9
31 Subsection 79(1B)
10
Omit "parties to the proceedings" (wherever occurring), substitute
11
"parties to the marriage".
12
32 Subsection 79(1C)
13
Omit "proceedings with respect to the property of the parties to a
14
marriage or either of them", substitute "property settlement
15
proceedings".
16
33 Paragraph 79(1C)(a)
17
Omit "those parties", substitute "the parties to the marriage".
18
34 Paragraph 79(1C)(c)
19
After "parties", insert "to the marriage".
20
35 Subsection 79(1C)
21
Omit "either party", substitute "a party".
22
36 Subsection 79(4)
23
Omit "proceedings with respect to any property of the parties to a
24
marriage or either of them", substitute "property settlement
25
proceedings".
26
37 At the end of paragraphs 79(4)(a), (b), (c), (d) and (e)
27
Add "and".
28
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 13
38 Subsection 79(5)
1
Omit "proceedings with respect to the property of the parties to a
2
marriage or either of them", substitute "property settlement
3
proceedings".
4
39 Paragraph 79(5)(b)
5
Repeal the paragraph, substitute:
6
(b) that an order that the court could make with respect to:
7
(i) the property of the parties to the marriage or either of
8
them; or
9
(ii) the vested bankruptcy property in relation to a bankrupt
10
party to the marriage;
11
if that significant change in financial circumstances occurs is
12
more likely to do justice as between the parties to the marriage
13
than an order that the court could make immediately with
14
respect to:
15
(iii) the property of the parties to the marriage or either of
16
them; or
17
(iv) the vested bankruptcy property in relation to a bankrupt
18
party to the marriage;
19
40 Subsection 79(5)
20
After "requested by either party to the marriage", insert "or the relevant
21
bankruptcy trustee (if any)".
22
41 Subsection 79(5)
23
After "that party to the marriage", insert "or the relevant bankruptcy
24
trustee, as the case may be,".
25
42 Subsection 79(6)
26
Omit all the words after "appropriate with", substitute:
27
respect to:
28
(a) any of the property of the parties to the marriage or of either
29
of them; or
30
(b) any of the vested bankruptcy property in relation to a
31
bankrupt party to the marriage.
32
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
14 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
43 Subsection 79(8)
1
Omit "proceedings with respect to the property of the parties to a
2
marriage or either of them", substitute "property settlement
3
proceedings".
4
44 Subsection 79(8)
5
Omit "either party to the proceedings", substitute "a party to the
6
marriage".
7
45 Paragraph 79(8)(b)
8
Omit all the words after "appropriate with", substitute:
9
respect to:
10
(iii) any of the property of the parties to the marriage or
11
either of them; or
12
(iv) any of the vested bankruptcy property in relation to a
13
bankrupt party to the marriage; and
14
46 Subsection 79(9)
15
Omit "proceedings with respect to the property of the parties to a
16
marriage or either of them", substitute "property settlement
17
proceedings".
18
47 At the end of section 79
19
Add:
20
(11) If:
21
(a) an application is made for an order under this section in
22
proceedings between the parties to a marriage with respect to
23
the property of the parties to the marriage or either of them;
24
and
25
(b) either of the following subparagraphs apply to a party to the
26
marriage:
27
(i) when the application was made, the party was a
28
bankrupt;
29
(ii) after the application was made but before it is finally
30
determined, the party became a bankrupt; and
31
(c) the bankruptcy trustee applies to the court to be joined as a
32
party to the proceedings; and
33
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 15
(d) the court is satisfied that the interests of the bankrupt's
1
creditors may be affected by the making of an order under this
2
section in the proceedings;
3
the court must join the bankruptcy trustee as a party to the
4
proceedings.
5
(12) If a bankruptcy trustee is a party to property settlement
6
proceedings, then, except with the leave of the court, the bankrupt
7
party to the marriage is not entitled to make a submission to the
8
court in connection with any vested bankruptcy property in relation
9
to the bankrupt party.
10
(13) The court must not grant leave under subsection (12) unless the
11
court is satisfied that there are exceptional circumstances.
12
(14) If:
13
(a) an application is made for an order under this section in
14
proceedings between the parties to a marriage with respect to
15
the property of the parties to the marriage or either of them;
16
and
17
(b) either of the following subparagraphs apply to a party to the
18
marriage (the debtor party):
19
(i) when the application was made, the party was a debtor
20
subject to a personal insolvency agreement; or
21
(ii) after the application was made but before it is finally
22
determined, the party becomes a debtor subject to a
23
personal insolvency agreement; and
24
(c) the trustee of the agreement applies to the court to be joined as
25
a party to the proceedings; and
26
(d) the court is satisfied that the interests of the debtor party's
27
creditors may be affected by the making of an order under this
28
section in the proceedings;
29
the court must join the trustee of the agreement as a party to the
30
proceedings.
31
(15) If the trustee of a personal insolvency agreement is a party to
32
property settlement proceedings, then, except with the leave of the
33
court, the party to the marriage who is the debtor subject to the
34
agreement is not entitled to make a submission to the court in
35
connection with any property subject to the agreement.
36
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
16 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(16) The court must not grant leave under subsection (15) unless the
1
court is satisfied that there are exceptional circumstances.
2
(17) For the purposes of subsections (11) and (14), an application for an
3
order under this section is taken to be finally determined when:
4
(a) the application is withdrawn or dismissed; or
5
(b) an order (other than an interim order) is made as a result of
6
the application.
7
48 Subsections 79A(1) and (1A)
8
Omit "proceedings with respect to the property of the parties to a
9
marriage or either of them", substitute "property settlement
10
proceedings".
11
49 Subsection 79A(1B)
12
Omit "party to the proceedings", substitute "party to the marriage".
13
50 Subsection 79A(1C)
14
Omit "either party to the proceedings", substitute "a party to the
15
marriage".
16
51 At the end of section 79A
17
Add:
18
(5) For the purposes of this section, if:
19
(a) an order is made by a court under section 79 in proceedings
20
with respect to the property of the parties to a marriage or
21
either of them; and
22
(b) either of the following subparagraphs apply to a party to the
23
marriage:
24
(i) when the order was made, the party was a bankrupt;
25
(ii) after the order was made, the party became a bankrupt;
26
the bankruptcy trustee is taken to be a person whose interests are
27
affected by the order.
28
(6) For the purposes of this section, if:
29
(a) a party to a marriage is a bankrupt; and
30
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 17
(b) an order is made by a court under section 79 in proceedings
1
with respect to the vested bankruptcy property in relation to
2
the bankrupt party;
3
the bankruptcy trustee is taken to be a person whose interests are
4
affected by the order.
5
(7) For the purposes of this section, if:
6
(a) an order is made by a court under section 79 in proceedings
7
with respect to the property of the parties to a marriage or
8
either of them; and
9
(b) either of the following subparagraphs apply to a party to the
10
marriage:
11
(i) when the order was made, the party was a debtor subject
12
to a personal insolvency agreement;
13
(ii) after the order was made, the party became a debtor
14
subject to a personal insolvency agreement;
15
the trustee of the agreement is taken to be a person whose interests
16
are affected by the order.
17
52 Before section 80
18
Insert:
19
79G Notifying bankruptcy trustee etc. about application under
20
section 74, 78, 79 or 79A
21
(1) The applicable Rules of Court may make provision for a bankrupt
22
who becomes a party to a proceeding for an application under
23
section 74, 78, 79 or 79A to give notice of the application to the
24
bankruptcy trustee.
25
(2) The applicable Rules of Court may make provision for a debtor
26
subject to a personal insolvency agreement who becomes a party to
27
a proceeding for an application under section 74, 78, 79 or 79A to
28
give notice of the application to the trustee of the agreement.
29
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
18 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
79H Notifying court about bankruptcy etc.
1
Bankruptcy
2
(1) The applicable Rules of Court may make provision for a person
3
who:
4
(a) is a party to a marriage; and
5
(b) is a party to a proceeding for an application under section 74,
6
78, 79 or 79A; and
7
(c) before that application is finally determined, becomes a
8
bankrupt;
9
to notify a court exercising jurisdiction under this Act that the
10
person has become a bankrupt.
11
Debtor subject to a personal insolvency agreement
12
(2) The applicable Rules of Court may make provision for a person
13
who:
14
(a) is a party to a marriage; and
15
(b) is a party to a proceeding for an application under section 74,
16
78, 79 or 79A; and
17
(c) before that application is finally determined, becomes a debtor
18
subject to a personal insolvency agreement;
19
to notify a court exercising jurisdiction under this Act that the
20
person has become a debtor subject to a personal insolvency
21
agreement.
22
Institution of proceeding under the Bankruptcy Act 1966
23
(3) The applicable Rules of Court may make provision for a person
24
who:
25
(a) is a party to a marriage; and
26
(b) is a party to a proceeding for an application under section 74,
27
78, 79 or 79A; and
28
(c) before that application is finally determined, becomes a party
29
to a proceeding before the Federal Court or the Federal
30
Magistrates Court under the Bankruptcy Act 1966 that relates
31
to:
32
(i) the bankruptcy of the person; or
33
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 19
(ii) the person's capacity as a debtor subject to a personal
1
insolvency agreement;
2
to notify a court exercising jurisdiction under this Act of the
3
institution of the proceeding under the Bankruptcy Act 1966.
4
(4) The applicable Rules of Court may make provision for a person
5
who:
6
(a) is the bankruptcy trustee of a bankrupt party to a marriage;
7
and
8
(b) applies under section 139A of the Bankruptcy Act 1966 for an
9
order under Division 4A of Part VI of that Act;
10
to notify a court exercising jurisdiction under this Act of the making
11
of the application.
12
When application finally determined
13
(5) For the purposes of this section, an application for an order under
14
section 74, 79 or 79A is taken to be finally determined when:
15
(a) the application is withdrawn or dismissed; or
16
(b) an order (other than an interim order) is made as a result of
17
the application.
18
(6) For the purposes of this section, an application for a declaration
19
under section 78 is taken to be finally determined when:
20
(a) the application is withdrawn or dismissed; or
21
(b) a declaration is made as a result of the application.
22
79J Notifying non-bankrupt spouse about application under
23
section 139A of the Bankruptcy Act 1966
24
The applicable Rules of Court may make provision for a person
25
who:
26
(a) is the bankruptcy trustee of a bankrupt party to a marriage;
27
and
28
(b) applies under section 139A of the Bankruptcy Act 1966 for an
29
order under Division 4A of Part VI of that Act in relation to
30
an entity (other than the other party to the marriage);
31
to notify the other party to the marriage of the making of the
32
application.
33
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
20 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
53 At the end of section 80
1
Add:
2
(4) If a bankruptcy trustee is a party to a proceeding before the court,
3
the court may make an order under paragraph (1)(d) directed to the
4
bankrupt.
5
(5) If the trustee of a personal insolvency agreement is a party to a
6
proceeding before the court, the court may make an order under
7
paragraph (1)(d) directed to the debtor subject to the agreement.
8
(6) Subsections (4) and (5) do not limit paragraph (1)(d).
9
54 Subsection 83(1)
10
Omit "In proceedings with respect to the maintenance of a party to a
11
marriage, if there is in force an order (whether made before or after the
12
commencement of this Act) with respect to the maintenance of that party
13
by the other party to the marriage:", substitute "If there is in force an
14
order (whether made before or after the commencement of this Act) with
15
respect to the maintenance of a party to a marriage:".
16
55 After subsection 83(1)
17
Insert:
18
(1A) The court's jurisdiction under subsection (1) may be exercised:
19
(a) in any case--in proceedings with respect to the maintenance
20
of a party to the marriage; or
21
(b) if there is a bankrupt party to the marriage--on the
22
application of the bankruptcy trustee; or
23
(c) if a party to the marriage is a debtor subject to a personal
24
insolvency agreement--on the application of the trustee of the
25
agreement.
26
56 Subsection 83(5A)
27
After "by a party to the marriage", insert ", or by the bankruptcy trustee
28
of a party to the marriage,".
29
57 After subsection 106B(1)
30
Insert:
31
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Amendments Part 1
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 21
(1A) If:
1
(a) a party to a marriage is a bankrupt; and
2
(b) the bankruptcy trustee is a party to proceedings under this
3
Act;
4
the court may set aside or restrain the making of an instrument or
5
disposition:
6
(c) which is made or proposed to be made by or on behalf of, or
7
by direction or in the interest of, the bankrupt; and
8
(d) which is made or proposed to be made to defeat an existing or
9
anticipated order in those proceedings or which, irrespective
10
of intention, is likely to defeat any such order.
11
(1B) If:
12
(a) a party to a marriage is a debtor subject to a personal
13
insolvency agreement; and
14
(b) the trustee of the agreement is a party to proceedings under
15
this Act;
16
the court may set aside or restrain the making of an instrument or
17
disposition:
18
(c) which is made or proposed to be made by or on behalf of, or
19
by direction or in the interest of, the debtor; and
20
(d) which is made or proposed to be made to defeat an existing or
21
anticipated order in those proceedings or which, irrespective
22
of intention, is likely to defeat any such order.
23
58 Subsection 106B(2)
24
Omit "such instrument or disposition", substitute "instrument or
25
disposition referred to in subsection (1), (1A) or (1B)".
26
59 At the end of section 114
27
Add:
28
(4) If a party to a marriage is a bankrupt, a court may, on the
29
application of the other party to the marriage, by interlocutory
30
order, grant an injunction under subsection (3) restraining the
31
bankruptcy trustee from declaring and distributing dividends
32
amongst the bankrupt's creditors.
33
(5) Subsection (4) does not limit subsection (3).
34
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 1 Amendments
22 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(6) If a party to a marriage is a debtor subject to a personal insolvency
1
agreement, a court may, on the application of the other party to the
2
marriage, by interlocutory order, grant an injunction under
3
subsection (3) restraining the trustee of the agreement from
4
disposing of (whether by sale, gift or otherwise) property subject to
5
the agreement.
6
(7) Subsection (6) does not limit subsection (3).
7
Amendments relating to the interaction between family law and bankruptcy law
Schedule 1
Application provisions Part 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 23
1
Part 2--Application provisions
2
60 Application of amendments
3
(1)
Subject to subitems (2) and (3), the amendments of the Family Law Act
4
1975 made by this Schedule, to the extent to which they relate to
5
bankruptcies or personal insolvency agreements, apply in relation to:
6
(a) bankruptcies for which the date of the bankruptcy is after the
7
commencement of this item; and
8
(b) personal insolvency agreements executed before, at or after
9
the commencement of this item.
10
(2)
The following provisions:
11
(a) subsections 74(2), (3) and (4) of the Family Law Act 1975 as
12
amended by this Schedule;
13
(b) subsection 74(8) of the Family Law Act 1975 as amended by
14
this Schedule, to the extent to which that subsection relates to
15
subsection 74(2) of the Family Law Act 1975 as amended by
16
this Schedule;
17
(c) the definitions inserted in subsection 4(1) of the Family Law
18
Act 1975 by this Schedule, to the extent to which those
19
definitions relate to subsections 74(2), (3) and (4) of the
20
Family Law Act 1975 as amended by this Schedule;
21
apply to proceedings instituted after the commencement of this item,
22
whether the date of the bankruptcy is before, on or after the date of
23
commencement of this item.
24
(3)
The following provisions:
25
(a) subsections 79(11), (12) and (13) of the Family Law Act 1975
26
as amended by this Schedule;
27
(b) subsection 79(17) of the Family Law Act 1975 as amended by
28
this Schedule, to the extent to which that subsection relates to
29
subsection 79(11) of the Family Law Act 1975 as amended by
30
this Schedule;
31
(c) the definitions inserted in subsection 4(1) of the Family Law
32
Act 1975 by this Schedule, to the extent to which those
33
definitions relate to subsections 79(11), (12) and (13) of the
34
Family Law Act 1975 as amended by this Schedule;
35
Schedule 1 Amendments relating to the interaction between family law and
bankruptcy law
Part 2 Application provisions
24 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
apply to proceedings instituted after the commencement of this item,
1
whether the date of the bankruptcy is before, on or after the date of
2
commencement of this item.
3
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 25
1
Schedule 2--Amendments relating to income
2
contributions
3
4
Bankruptcy Act 1966
5
1 After subsection 125(2)
6
Insert:
7
(2A) This section does not apply in relation to an account held by a
8
bankrupt if the account is a supervised account in relation to the
9
bankrupt.
10
2 Subsection 125(3)
11
Insert:
12
supervised account has the meaning given by section 139ZIB.
13
3 At the end of section 139L
14
Add:
15
(2) For the purposes of the application of the definition of income in
16
subsection (1) to Subdivision HA, a reference in that definition to a
17
bankrupt includes a reference to a person who has been discharged
18
from bankruptcy.
19
Note:
Subdivision HA deals with the supervised account regime.
20
4 After section 139ZI
21
Insert:
22
Subdivision HA--Supervised account regime
23
139ZIA Objects
24
The objects of this Subdivision are:
25
(a) to improve the likelihood that a bankrupt will have sufficient
26
money to pay contributions or instalments of contributions;
27
and
28
Schedule 2 Amendments relating to income contributions
26 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(b) to ensure that all monetary income received by the bankrupt is
1
deposited to a single account (the supervised account); and
2
(c) to enable the trustee to supervise withdrawals from the
3
account.
4
139ZIB Definitions
5
In this Subdivision:
6
bankrupt includes a person who has been discharged from
7
bankruptcy.
8
bankrupt to whom the supervised account regime applies means a
9
bankrupt in respect of whom a determination under subsection
10
139ZIC(1) is in force.
11
constructive income receipt arrangement means an arrangement
12
the effect of which is that income derived by a bankrupt is not
13
actually received by the bankrupt because it is:
14
(a) reinvested, accumulated or capitalised; or
15
(b) dealt with on behalf of the bankrupt or as the bankrupt
16
directs.
17
contribution means a contribution that a bankrupt is liable to pay
18
under subsection 139P(1) or 139Q(1).
19
engage in conduct means:
20
(a) do an act; or
21
(b) omit to perform an act.
22
non-monetary income receipt arrangement means an arrangement
23
the effect of which is that income derived by a bankrupt is not
24
actually received by the bankrupt in monetary form because it is
25
derived in a non-monetary form.
26
reviewable decision means a decision of the trustee of a bankrupt's
27
estate:
28
(a) to make a subsection 139ZIC(1) determination; or
29
(b) to refuse to revoke a subsection 139ZIC(1) determination; or
30
(c) to specify a period in a supervised account notice for the
31
purposes of subparagraph 139ZIE(1)(a)(ii); or
32
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 27
(d) to refuse to specify a period in a supervised account notice for
1
the purposes of subparagraph 139ZIE(1)(a)(ii); or
2
(e) to specify requirements in a supervised account notice for the
3
purposes of subparagraph 139ZIE(1)(a)(ix); or
4
(f) to refuse to exercise the powers conferred by subsection
5
139ZIEA(1); or
6
(g) to refuse to give a consent under subsection 139ZIG(3),
7
139ZIH(5), 139ZIHA(5) or 139ZII(3); or
8
(h) to vary a consent given under subsection 139ZIG(3),
9
139ZIH(5), 139ZIHA(5) or 139ZII(3); or
10
(i) to refuse to vary a consent given under subsection 139ZIG(3),
11
139ZIH(5), 139ZIHA(5) or 139ZII(3); or
12
(j) to revoke a consent given under subsection 139ZIG(3),
13
139ZIH(5), 139ZIHA(5) or 139ZII(3).
14
supervised account, in relation to a bankrupt to whom the
15
supervised account regime applies, means an account maintained by
16
the bankrupt in accordance with a supervised account notice that is
17
in force in relation to the bankrupt.
18
supervised account notice has the meaning given by subsection
19
139ZIE(1).
20
withdraw, in relation to an account, includes:
21
(a) transfer out of; and
22
(b) draw a cheque on; and
23
(c) do any other thing that results in a debit from.
24
working day, in relation to a bankrupt, means a day that is not a
25
Saturday, Sunday or a public holiday in the place where the
26
bankrupt resides.
27
139ZIC Trustee may determine that the supervised account regime
28
applies to the bankrupt
29
(1) The trustee of a bankrupt's estate may, by written notice given to
30
the bankrupt, determine that the supervised account regime applies
31
to the bankrupt.
32
Schedule 2 Amendments relating to income contributions
28 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(2) The trustee must not make a determination under subsection (1) in
1
relation to the bankrupt unless, at the time the determination is
2
made:
3
(a) the bankrupt is liable to pay a contribution; and
4
(b) either:
5
(i) if the trustee has made a determination under
6
section 139ZG permitting the contribution to be paid by
7
instalments--the bankrupt has not paid the whole of an
8
instalment at or before the time when it became payable;
9
or
10
(ii) if the trustee has made a determination under
11
section 139ZG requiring the bankrupt to pay the
12
contribution at a specified time--the bankrupt has not
13
paid the whole of the contribution at or before the time
14
when it became payable.
15
(3) A notice under subsection (1) must be in the approved form.
16
(4) A notice under subsection (1) must be accompanied by:
17
(a) a supervised account notice relating to the bankrupt
18
concerned; and
19
(b) a statement setting out:
20
(i) the effect of sections 139ZIE to 139ZIT; and
21
(ii) such other information (if any) as is specified in the
22
regulations.
23
139ZID Revocation of determination
24
(1) If a determination is in force under subsection 139ZIC(1) in relation
25
to a bankrupt, the trustee may, by written notice given to the
26
bankrupt, revoke the determination.
27
(2) The trustee must not revoke the determination unless the trustee is
28
satisfied, having regard to:
29
(a) the past payment record of the bankrupt; and
30
(b) any other relevant matters;
31
that the bankrupt will pay the whole of any current or future
32
contributions or instalments of contributions at or before the time
33
when they become payable.
34
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 29
(3) The power conferred on the trustee by subsection (1) may be
1
exercised:
2
(a) on his or her own initiative; or
3
(b) on the application of the bankrupt.
4
(4) If, following the bankrupt's application, the trustee refuses to
5
revoke the determination, the trustee must give the bankrupt written
6
notice of the refusal.
7
(5) A notice under subsection (1) must be in the approved form.
8
139ZIDA When determination ceases to be in force
9
Annulment
10
(1) If:
11
(a) a determination is in force under subsection 139ZIC(1) in
12
relation to a bankrupt; and
13
(b) the bankruptcy is annulled;
14
the determination ceases to be in force on the date of the annulment.
15
Discharge--no liability to pay contributions
16
(2) If:
17
(a) a determination is in force under subsection 139ZIC(1) in
18
relation to a bankrupt; and
19
(b) the bankrupt is discharged from the bankruptcy; and
20
(c) at the time of the discharge, the bankrupt is not liable to pay a
21
contribution;
22
the determination ceases to be in force at the time of the discharge.
23
Discharge--continuing liability to pay contributions
24
(3) If:
25
(a) a determination is in force under subsection 139ZIC(1) in
26
relation to a bankrupt; and
27
(b) the bankrupt is discharged from the bankruptcy; and
28
(c) at the time of the discharge, the bankrupt is liable to pay a
29
contribution;
30
Schedule 2 Amendments relating to income contributions
30 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
the determination ceases to be in force when the bankrupt is no
1
longer liable to pay a contribution.
2
139ZIE Bankrupt must open and maintain supervised account
3
Supervised account notice
4
(1) For the purposes of this Subdivision, a supervised account notice
5
is a written notice that is issued by the trustee of a bankrupt's estate
6
and that:
7
(a) requires the bankrupt, within:
8
(i) 10 working days after the notice is given to the bankrupt;
9
or
10
(ii) such longer period (if any) as is specified in the notice;
11
to open an account (a supervised account) that complies with
12
the following requirements:
13
(iii) the account is kept with an ADI;
14
(iv) the account is kept in Australia;
15
(v) the account is denominated in Australian currency;
16
(vi) the account is held solely in the name of the bankrupt;
17
(vii) deposits may be made to, and withdrawals may be made
18
from, the account;
19
(viii) the account is designed not to have a debit balance;
20
(ix) such other requirements (if any) as are specified in the
21
notice; and
22
(b) requires the bankrupt to inform the ADI, when opening the
23
account, that the account is a supervised account; and
24
(c) requires the bankrupt, after the account is opened, to maintain
25
the account for so long as the notice is in force.
26
(2) A supervised account notice must be in the approved form.
27
Compliance with supervised account notice
28
(3) A bankrupt to whom the supervised account regime applies must
29
comply with a supervised account notice in force in relation to the
30
bankrupt.
31
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 31
When supervised account notice ceases to be in force
1
(4) A supervised account notice relating to a bankrupt ceases to be in
2
force if the bankrupt ceases to be a bankrupt to whom the
3
supervised account regime applies.
4
Note:
A supervised account notice may be revoked under subsection
5
139ZIEA(1).
6
Trustee to be notified of account details
7
(5) A bankrupt to whom the supervised account regime applies must,
8
within 2 working days after opening a supervised account, give a
9
written notice to the trustee setting out the following information
10
about the supervised account:
11
(a) the name of the ADI concerned;
12
(b) the name in which the account is held;
13
(c) the account number;
14
(d) the BSB number concerned.
15
Offence
16
(6) A person is guilty of an offence if:
17
(a) the person is subject to a requirement under subsection (3) or
18
(5); and
19
(b) the person engages in conduct; and
20
(c) the person's conduct breaches the requirement.
21
Penalty for contravention of this subsection: Imprisonment for 6
22
months.
23
139ZIEA New supervised account
24
(1) If a bankrupt is a bankrupt to whom the supervised account regime
25
applies, the trustee may:
26
(a) by written notice given to the bankrupt, revoke a supervised
27
account notice relating to the bankrupt; and
28
(b) issue a fresh supervised account notice relating to the
29
bankrupt, and give the fresh notice to the bankrupt; and
30
Schedule 2 Amendments relating to income contributions
32 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(c) by written notice given to the bankrupt, require the bankrupt,
1
immediately after the account is opened in accordance with
2
the fresh notice, to transfer:
3
(i) the balance (if any) of the account maintained in
4
accordance with the revoked notice;
5
to:
6
(ii) the account opened in accordance with the fresh notice.
7
(2) The revocation under paragraph (1)(a) of the supervised account
8
notice takes effect when the bankrupt opens the account in
9
accordance with the fresh supervised account notice.
10
(3) Notices under paragraphs (1)(a) and (c) may be set out in the same
11
document.
12
(4) The powers conferred on the trustee by subsection (1) may be
13
exercised:
14
(a) on his or her own initiative; or
15
(b) on the application of the bankrupt.
16
(5) If, following the bankrupt's application, the trustee refuses to
17
exercise the powers conferred by subsection (1), the trustee must
18
give the bankrupt written notice of the refusal.
19
Offence
20
(6) A person is guilty of an offence if:
21
(a) the person is subject to a requirement under paragraph (1)(c);
22
and
23
(b) the person engages in conduct; and
24
(c) the person's conduct breaches the requirement.
25
Penalty for contravention of this subsection: Imprisonment for 6
26
months.
27
139ZIF Bankrupt's monetary income to be deposited to supervised
28
account
29
(1) A bankrupt to whom the supervised account regime applies must
30
ensure that all monetary income actually received by the bankrupt
31
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 33
after the opening of the supervised account is deposited to the
1
account:
2
(a) if the income is received in the form of cash or cheque--
3
within 5 working days of its receipt; or
4
(b) in any other case--upon its receipt.
5
Cash refunds
6
(2) For the purposes of subsection (1), if:
7
(a) the bankrupt receives an amount of income in the form of
8
cash; and
9
(b) before the paragraph (a) amount is deposited to the supervised
10
account, the bankrupt uses a part of that amount to make a
11
refund;
12
the amount that the bankrupt must deposit to the supervised account
13
is the paragraph (a) amount reduced by the part used as mentioned
14
in paragraph (b).
15
(3) For the purposes of subsection (1), if:
16
(a) the bankrupt receives an amount of income in the form of
17
cash; and
18
(b) before the paragraph (a) amount is deposited to the supervised
19
account, the bankrupt uses the whole of that amount to make
20
a refund;
21
the bankrupt is taken not to have received the paragraph (a) amount.
22
Offence
23
(4) A person is guilty of an offence if:
24
(a) the person is subject to a requirement under subsection (1);
25
and
26
(b) the person engages in conduct; and
27
(c) the person's conduct breaches the requirement.
28
Penalty for contravention of this subsection: Imprisonment for 12
29
months.
30
Schedule 2 Amendments relating to income contributions
34 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
139ZIG Trustee to supervise withdrawals from supervised account
1
General prohibition on withdrawals
2
(1) A bankrupt to whom the supervised account regime applies must
3
not:
4
(a) make a withdrawal from the supervised account; or
5
(b) authorise the making of a withdrawal from the supervised
6
account.
7
Exceptions
8
(2) Subsection (1) does not apply if the withdrawal is made:
9
(a) in accordance with the consent of the trustee under
10
subsection (3); or
11
(b) to pay a contribution or an instalment of a contribution; or
12
(c) to transfer an amount as required by a notice under paragraph
13
139ZIEA(1)(c); or
14
(d) to make a refund; or
15
(e) to reverse a credit previously made to the account where the
16
credit arose from an error or the dishonour of a cheque; or
17
(f) to discharge any of the bankrupt's tax liabilities (within the
18
meaning of the Taxation Administration Act 1953); or
19
(g) to discharge the bankrupt's liability to pay a tax (however
20
described) imposed by or under a law of the Commonwealth,
21
a State or a Territory; or
22
(h) to recover from the bankrupt an amount equal to an amount of
23
tax (however described) that the ADI concerned has paid or is
24
liable to pay in connection with the operation of the account;
25
or
26
(i) to discharge a liability of the bankrupt to pay a fee or charge
27
in connection with the operation of the account.
28
Trustee may consent to withdrawals
29
(3) The trustee may, by written notice given to the bankrupt, consent to
30
any of the following withdrawals from the supervised account:
31
(a) a specified withdrawal;
32
(b) withdrawals included in a specified class of withdrawals;
33
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 35
(c) withdrawals up to a daily, weekly, fortnightly or monthly limit
1
ascertained in accordance with the notice.
2
(4) The trustee may, by written notice given to the bankrupt, vary or
3
revoke a consent.
4
(5) The powers conferred on the trustee by subsections (3) and (4) may
5
be exercised:
6
(a) on his or her own initiative; or
7
(b) on the application of the bankrupt.
8
(6) If, following the bankrupt's application, the trustee refuses to
9
exercise a power conferred by subsection (3) or (4), the trustee must
10
give the bankrupt written notice of the refusal.
11
Offence
12
(7) A person is guilty of an offence if:
13
(a) the person is subject to a requirement under subsection (1);
14
and
15
(b) the person engages in conduct; and
16
(c) the person's conduct breaches the requirement.
17
Penalty: Imprisonment for 12 months.
18
Garnishee powers not affected
19
(8) This section does not affect the exercise of powers conferred by:
20
(a) section 139ZL of this Act; or
21
(b) section 260-5 in Schedule 1 to the Taxation Administration
22
Act 1953; or
23
(c) a similar provision in:
24
(i) any other law of the Commonwealth; or
25
(ii) a law of a State or a Territory.
26
139ZIH Constructive income receipt arrangements
27
Bankrupt not to enter into new arrangements
28
(1) A bankrupt to whom the supervised account regime applies must
29
not enter into a constructive income receipt arrangement.
30
Schedule 2 Amendments relating to income contributions
36 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(2) Subsection (1) does not apply if the bankrupt enters into the
1
constructive income receipt arrangement in accordance with the
2
consent of the trustee under subsection (5).
3
Bankrupt not to participate in existing arrangements
4
(3) If a bankrupt was participating in a constructive income receipt
5
arrangement immediately before becoming a bankrupt to whom the
6
supervised account regime applies, the bankrupt must, as soon as
7
practicable after becoming such a bankrupt, cease to participate in
8
the arrangement.
9
(4) Subsection (3) does not apply if the bankrupt continues to
10
participate in the constructive income receipt arrangement in
11
accordance with the consent of the trustee under subsection (5).
12
Consent
13
(5) The trustee may, by written notice given to the bankrupt:
14
(a) consent to the bankrupt entering into:
15
(i) a specified constructive income receipt arrangement; or
16
(ii) constructive income receipt arrangements included in a
17
specified class of constructive income receipt
18
arrangements; or
19
(b) consent to the bankrupt continuing to participate in:
20
(i) a specified constructive income receipt arrangement; or
21
(ii) constructive income receipt arrangements included in a
22
specified class of constructive income receipt
23
arrangements.
24
(6) The trustee may, by written notice given to the bankrupt, vary or
25
revoke a consent.
26
(7) The powers conferred on the trustee by subsections (5) and (6) may
27
be exercised:
28
(a) on his or her own initiative; or
29
(b) on the application of the bankrupt.
30
(8) If, following the bankrupt's application, the trustee refuses to
31
exercise a power conferred by subsection (5) or (6), the trustee must
32
give the bankrupt written notice of the refusal.
33
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 37
Offence
1
(9) A person is guilty of an offence if:
2
(a) the person is subject to a requirement under subsection (1) or
3
(3); and
4
(b) the person engages in conduct; and
5
(c) the person's conduct breaches the requirement.
6
Penalty for contravention of this subsection: Imprisonment for 12
7
months.
8
139ZIHA Non-monetary income receipt arrangements
9
Bankrupt not to enter into new arrangements
10
(1) A bankrupt to whom the supervised account regime applies must
11
not enter into a non-monetary income receipt arrangement.
12
(2) Subsection (1) does not apply if the bankrupt enters into the
13
non-monetary income receipt arrangement in accordance with the
14
consent of the trustee under subsection (5).
15
Bankrupt not to participate in existing arrangements
16
(3) If a bankrupt was participating in a non-monetary income receipt
17
arrangement immediately before becoming a bankrupt to whom the
18
supervised account regime applies, the bankrupt must, as soon as
19
practicable after becoming such a bankrupt, cease to participate in
20
the arrangement.
21
(4) Subsection (3) does not apply if the bankrupt continues to
22
participate in the non-monetary income receipt arrangement in
23
accordance with the consent of the trustee under subsection (5).
24
Consent
25
(5) The trustee may, by written notice given to the bankrupt:
26
(a) consent to the bankrupt entering into:
27
(i) a specified non-monetary income receipt arrangement; or
28
(ii) non-monetary income receipt arrangements included in a
29
specified class of non-monetary income receipt
30
arrangements; or
31
Schedule 2 Amendments relating to income contributions
38 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(b) consent to the bankrupt continuing to participate in:
1
(i) a specified non-monetary income receipt arrangement; or
2
(ii) non-monetary income receipt arrangements included in a
3
specified class of non-monetary income receipt
4
arrangements.
5
(6) The trustee may, by written notice given to the bankrupt, vary or
6
revoke a consent.
7
(7) The powers conferred on the trustee by subsections (5) and (6) may
8
be exercised:
9
(a) on his or her own initiative; or
10
(b) on the application of the bankrupt.
11
(8) If, following the bankrupt's application, the trustee refuses to
12
exercise a power conferred by subsection (5) or (6), the trustee must
13
give the bankrupt written notice of the refusal.
14
Offence
15
(9) A person is guilty of an offence if:
16
(a) the person is subject to a requirement under subsection (1) or
17
(3); and
18
(b) the person engages in conduct; and
19
(c) the person's conduct breaches the requirement.
20
Penalty for contravention of this subsection: Imprisonment for 12
21
months.
22
139ZII Cash income
23
(1) A bankrupt to whom the supervised account regime applies must
24
not receive income in the form of cash.
25
(2) Subsection (1) does not apply if the income was received in
26
accordance with the consent of the trustee under subsection (3).
27
Consent
28
(3) The trustee may, by written notice given to the bankrupt, consent to
29
the bankrupt receiving in the form of cash:
30
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 39
(a) a specified item of income; or
1
(b) items of income included in a specified class of items of
2
income.
3
(4) The trustee may, by written notice given to the bankrupt, vary or
4
revoke a consent.
5
(5) The powers conferred on the trustee by subsections (3) and (4) may
6
be exercised:
7
(a) on his or her own initiative; or
8
(b) on the application of the bankrupt.
9
(6) If, following the bankrupt's application, the trustee refuses to
10
exercise a power conferred by subsection (3) or (4), the trustee must
11
give the bankrupt written notice of the refusal.
12
Offence
13
(7) A person is guilty of an offence if:
14
(a) the person is subject to a requirement under subsection (1);
15
and
16
(b) the person engages in conduct; and
17
(c) the person's conduct breaches the requirement.
18
Penalty for contravention of this subsection: Imprisonment for 12
19
months.
20
139ZIIA Keeping of books
21
If:
22
(a) a person is a bankrupt to whom the supervised account regime
23
applies; and
24
(b) the person has been discharged from the bankruptcy;
25
section 277A applies in relation to the person as if:
26
(c) the person were a bankrupt within the meaning of that section;
27
and
28
(d) the person had been discharged from the bankruptcy when the
29
person ceases to be a bankrupt to whom the supervised
30
account regime applies.
31
Schedule 2 Amendments relating to income contributions
40 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
139ZIJ Injunctions
1
Restraining injunctions
2
(1) If a bankrupt has engaged, is engaging or is proposing to engage, in
3
any conduct in contravention of this Subdivision, the Court may, on
4
the application of the trustee, grant an injunction:
5
(a) restraining the bankrupt from engaging in the conduct; and
6
(b) if, in the Court's opinion, it is desirable to do so--requiring
7
the bankrupt to do something.
8
Performance injunctions
9
(2) If:
10
(a) a bankrupt has refused or failed, or is refusing or failing, or is
11
proposing to refuse or fail, to do an act or thing; and
12
(b) the refusal or failure was, is or would be a contravention of
13
this Subdivision;
14
the Court may, on the application of the trustee, grant an injunction
15
requiring the bankrupt to do that act or thing.
16
139ZIK Interim injunctions
17
Grant of interim injunction
18
(1) If an application is made to the Court for an injunction under
19
section 139ZIJ, the Court may, before considering the application,
20
grant an interim injunction restraining a bankrupt from engaging in
21
conduct of a kind referred to in that section.
22
No undertakings as to damages
23
(2) The Court is not to require an applicant for an injunction under
24
section 139ZIJ, as a condition of granting an interim injunction, to
25
give any undertakings as to damages.
26
139ZIL Discharge etc. of injunctions
27
The Court may discharge or vary an injunction granted under this
28
Subdivision.
29
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 41
139ZIM Certain limits on granting injunctions not to apply
1
Restraining injunctions
2
(1) The power of the Court under this Subdivision to grant an
3
injunction restraining a bankrupt from engaging in conduct of a
4
particular kind may be exercised:
5
(a) if the Court is satisfied that the bankrupt has engaged in
6
conduct of that kind--whether or not it appears to the Court
7
that the bankrupt intends to engage again, or to continue to
8
engage, in conduct of that kind; or
9
(b) if it appears to the Court that, if an injunction is not granted, it
10
is likely that the bankrupt will engage in conduct of that
11
kind--whether or not the bankrupt has previously engaged in
12
conduct of that kind and whether or not there is an imminent
13
danger of substantial damage to any person if the bankrupt
14
engages in conduct of that kind.
15
Performance injunctions
16
(2) The power of the Court to grant an injunction requiring a bankrupt
17
to do an act or thing may be exercised:
18
(a) if the Court is satisfied that the bankrupt has refused or failed
19
to do that act or thing--whether or not it appears to the Court
20
that the bankrupt intends to refuse or fail again, or to continue
21
to refuse or fail, to do that act or thing; or
22
(b) if it appears to the Court that, if an injunction is not granted, it
23
is likely that the bankrupt will refuse or fail to do that act or
24
thing--whether or not the bankrupt has previously refused or
25
failed to do that act or thing and whether or not there is an
26
imminent danger of substantial damage to any person if the
27
bankrupt refuses or fails to do that act or thing.
28
139ZIN Other powers of the Court unaffected
29
The powers conferred on the Court under this Subdivision are in
30
addition to, and not instead of, any other powers of the Court,
31
whether conferred by this Act or otherwise.
32
Schedule 2 Amendments relating to income contributions
42 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
139ZIO Inspector-General may review trustee's decision
1
Reviewable decisions
2
(1) The Inspector-General may review a reviewable decision:
3
(a) on the Inspector-General's own initiative; or
4
(b) if requested to do so by the bankrupt for reasons that appear
5
to the Inspector-General to be sufficient to justify doing so.
6
(2) The Inspector-General must review a reviewable decision if
7
requested to do so by the Ombudsman.
8
Request by bankrupt
9
(3) A request by the bankrupt to the Inspector-General for the review of
10
a reviewable decision must:
11
(a) be in writing and lodged with the Official Receiver's office not
12
later than 60 days after the day on which the decision first
13
came to the notice of the bankrupt; and
14
(b) be accompanied by:
15
(i) a copy of any relevant documents issued or given by the
16
trustee under this Subdivision; and
17
(ii) any other documents on which the bankrupt relies in
18
support of the request.
19
(4) The Official Receiver must:
20
(a) endorse on the request the date when it was lodged; and
21
(b) send the request and the accompanying documents to the
22
Inspector-General as soon as practicable after they are
23
received.
24
Time limit for review
25
(5) Within 60 days after the request is lodged, the Inspector-General
26
must:
27
(a) decide whether to review the decision; and
28
(b) if the Inspector-General decides to review the decision--make
29
his or her decision on the review.
30
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 43
139ZIP Inspector-General may request further information
1
(1) For the purposes of the exercise of powers in relation to a review, or
2
a request for a review, of a reviewable decision, the
3
Inspector-General may:
4
(a) ask the bankrupt to provide such further relevant information,
5
either orally or in writing, as the Inspector-General specifies;
6
and
7
(b) ask the trustee to provide such information, either orally or in
8
writing, about the decision and the reasons for the decision as
9
the Inspector-General specifies.
10
(2) If any information is provided orally, the Inspector-General must
11
record it in writing.
12
139ZIR Inspector-General's decision on review
13
(1) On a review of a reviewable decision, the Inspector-General has all
14
the powers of the trustee and may:
15
(a) confirm the decision; or
16
(b) vary the decision; or
17
(c) set aside the decision; or
18
(d) set aside the decision and make a decision in substitution for
19
the decision so set aside.
20
Application of this Subdivision to Inspector-General's decision
21
(2) This Subdivision (apart from sections 139ZIO to 139ZIT), applies
22
to a decision made by the Inspector-General as if it had been made
23
by the trustee under this Subdivision.
24
139ZIS Inspector-General to notify bankrupt and trustee of decision
25
(1) If the Inspector-General:
26
(a) reviews a reviewable decision; or
27
(b) refuses a request by a bankrupt for a review of a reviewable
28
decision;
29
the Inspector-General must give written notice to:
30
(c) the bankrupt; and
31
(d) the trustee; and
32
Schedule 2 Amendments relating to income contributions
44 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
(e) the Official Receiver;
1
of the Inspector-General's decision on the review or on the request,
2
as the case may be.
3
(2) The notice must:
4
(a) set out the decision; and
5
(b) give the reasons for the decision.
6
Notification of right of review by AAT
7
(3) In the case of a decision on the review of a reviewable decision, the
8
notice must also include a statement to the effect that, if the
9
bankrupt or the trustee is dissatisfied with the Inspector-General's
10
decision, application may, subject to the Administrative Appeals
11
Tribunal Act 1975, be made to the Administrative Appeals Tribunal
12
for review of the decision.
13
(4) In the case of a decision refusing a request to review a reviewable
14
decision, the notice to the bankrupt must also include a statement to
15
the effect that, if the bankrupt is dissatisfied with the
16
Inspector-General's decision, application may, subject to the
17
Administrative Appeals Tribunal Act 1975, be made to the
18
Administrative Appeals Tribunal for a review of the decision.
19
(5) A breach of subsection (3) or (4) in relation to a decision does not
20
affect the validity of the decision.
21
Inspector-General taken to have reviewed and confirmed decision
22
(6) If, within 60 days after lodgment of a request by a bankrupt for the
23
review of a reviewable decision, the Inspector-General has not given
24
written notice to the bankrupt of his or her decision in accordance
25
with subsection (1), the Inspector-General is taken to have reviewed
26
the trustee's decision and confirmed it under paragraph
27
139ZIR(1)(a).
28
139ZIT AAT review of decisions
29
An application may be made to the Administrative Appeals
30
Tribunal for the review of:
31
Amendments relating to income contributions Schedule 2
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 45
(a) a decision of the Inspector-General on the review of a
1
reviewable decision; or
2
(b) a decision by the Inspector-General refusing a request to
3
review a reviewable decision.
4
5 Application
5
Paragraph 139ZIC(2)(a) of the Bankruptcy Act 1966 as amended by this
6
Schedule applies in relation to a bankrupt who is liable to pay a
7
contribution, whether the liability arose before, at or after the
8
commencement of this item.
9
Schedule 3 Amendment relating to maintenance agreements
46 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
1
Schedule 3--Amendment relating to
2
maintenance agreements
3
4
Bankruptcy Act 1966
5
1 Subsection 5(1) (definition of maintenance agreement)
6
Repeal the definition, substitute:
7
maintenance agreement means:
8
(a) a maintenance agreement (within the meaning of the Family
9
Law Act 1975) that has been registered in, or approved by, a
10
court in Australia or an external Territory; or
11
(b) any other agreement with respect to the maintenance of a
12
person that has been registered in, or approved by, a court in
13
Australia or an external Territory;
14
but does not include a financial agreement within the meaning of the
15
Family Law Act 1975.
16
2 Application of amendment
17
The amendment made by item 1 applies to all bankruptcies current on or
18
after the commencement of this item.
19
Amendments relating to financial agreements under the Family Law Act 1975
Schedule 4
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 47
1
Schedule 4--Amendments relating to financial
2
agreements under the Family Law Act
3
1975
4
5
Bankruptcy Act 1966
6
1 At the end of subsection 40(1)
7
Add:
8
; (o) if the debtor becomes insolvent as a result of one or more
9
transfers of property in accordance with a financial agreement
10
(within the meaning of the Family Law Act 1975) to which the
11
debtor is a party.
12
2 After subsection 40(7)
13
Insert:
14
(7A) For the purposes of paragraph (1)(o):
15
(a) transfer of property includes a payment of money; and
16
(b) a person who does something that results in another person
17
becoming the owner of property that did not previously exist
18
is taken to have transferred the property to the other person.
19
3 Application of amendments
20
The amendments made by this Schedule apply in relation to financial
21
agreements (within the meaning of the Family Law Act 1975) entered
22
into after the commencement of this item.
23
Schedule 5 Additional amendments relating to the interaction between family law and
bankruptcy law
48 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
1
Schedule 5--Additional amendments relating
2
to the interaction between family law
3
and bankruptcy law
4
5
Family Law Act 1975
6
1 At the end of section 79
7
Add:
8
(10) The following are entitled to become a party to proceedings in
9
which an application is made for an order under this section:
10
(a) a creditor of a party to the proceedings if the creditor may not
11
be able to recover his or her debt if the order were made;
12
(b) any other person whose interests would be affected by the
13
making of the order.
14
2 At the end of section 79A
15
Add:
16
(4) For the purposes of this section, a creditor of a party to the
17
proceedings in which the order under section 79 was made is taken
18
to be a person whose interests are affected by the order if the
19
creditor may not be able to recover his or her debt because the order
20
has been made.
21
3 After section 79E
22
Insert:
23
79F Notifying third parties about application
24
The applicable Rules of Court may specify the circumstances in
25
which a person who:
26
(a) applies for an order under this Part; or
27
(b) is a party to proceedings for an order under this Part;
28
Additional amendments relating to the interaction between family law and bankruptcy
law Schedule 5
Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005 49
is to give notice of the application to a person who is not a party to
1
the proceedings.
2
4 After section 90D
3
Insert:
4
90DA Need for separation declaration for certain provisions of
5
financial agreement to take effect
6
(1) A financial agreement between 2 people, to the extent to which it
7
deals with:
8
(a) how, in the event of the breakdown of the marriage, all or any
9
of the property or financial resources of either or both of them
10
at the time when the agreement is made, or at a later time and
11
before the termination of the marriage by divorce, is to be
12
dealt with; or
13
(b) the maintenance of either of them after the termination of the
14
marriage by divorce;
15
is of no force or effect until a separation declaration is made.
16
(2) A separation declaration is a written declaration that complies with
17
subsections (3) and (4).
18
(3) The declaration must be signed by at least one of the parties to the
19
financial agreement.
20
(4) The declaration must state that:
21
(a) the parties have separated and are living separately and apart
22
at the declaration time; and
23
(b) in the opinion of the parties making the declaration, there is no
24
reasonable likelihood of cohabitation being resumed.
25
(5) In this section:
26
declaration time means the time when the declaration was signed
27
by a party to the financial agreement (or last signed by a party to
28
the agreement, if both parties to the agreement have signed).
29
separated has the same meaning as in section 48 (as affected by
30
section 49).
31
Schedule 5 Additional amendments relating to the interaction between family law and
bankruptcy law
50 Bankruptcy and Family Law Legislation Amendment Bill 2005 No. , 2005
5 After subsection 106B(4)
1
Insert:
2
(4AA) An application may be made to the court for an order under this
3
section by:
4
(a) a party to the proceedings; or
5
(b) a creditor of a party to the proceedings if the creditor may not
6
be able to recover his or her debt if the instrument or
7
disposition were made; or
8
(c) any other person whose interests would be affected by the
9
making of the instrument or disposition.
10

 

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