Bills Digest 46 1996-97
Bankruptcy Amendment Bill 1996
WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments.
This Digest was available from 22 October 1996.
CONTENTS
Bankruptcy Amendment Bill 1996
Date Introduced: 9 October 1996
House: Representatives
Portfolio: Attorney-General
Commencement: On Royal Assent, but some schedules may coincide
with the commencement of related legislation (Bankruptcy (Estate Charges)
Act 1996 and Bankruptcy Legislation Amendment Act 1996).
To make consequential amendments to the Bankruptcy Act 1966 resulting
from the proposed enactment of the related Bankruptcy (Estate Charges)
Bill 1996, and the Bankruptcy (Registration Charges) Bill 1996.
This Bill is one of a package of 3 Bills which follow a separate major
Bill passed by the Parliament on 10 October 1996 dealing with reform in
the administration of bankruptcy in Australia.
On 26 June 1996, the Bankruptcy Legislation Amendment Bill 1996, was
introduced into the House of Representatives. The Bill passed both Houses
on 10 October 1996. The Bankruptcy Legislation Amendment Bill 1996 is
a significant piece of legislation which includes major changes to the
administration of bankruptcy, in that a number of functions now performed
by the Federal Court will become the responsibility of the Insolvency
and Trustee Service Australia (ITSA). ITSA is a Division of the Attorney-General's
Department and the aim of the major changes is to create a One Stop
Shop thus streamlining procedures and offering convenience for those
who have need of the bankruptcy process.
This current package of Bills comprises:
- Bankruptcy Amendment Bill 1996 (this Bill)
- Bankruptcy (Estate Charges) Bill 1996
- Bankruptcy (Registration Charges) Bill 1996
The related Bills (Charges Bills) in this package impose registration
charges for the registration of trustees in bankruptcy (invariably an
accountant), and a flat 8% charge on amounts realised by the trustee (or
Official Trustee) in a bankrupt estate. The 8% charge is paid to Consolidated
Revenue as a cost recovery for the running of ITSA. In addition, any interest
accrued on moneys held in the bankrupt estate will be paid to Consolidated
Revenue.
These charges are, in the main, already imposed under existing Bankruptcy
Rules. The major reforms to the administration of bankruptcy which are
contained in the separate Bankruptcy Legislation Amendment Bill 1996 (passed
by Parliament on 10 October 1996) will afford the opportunity to allow
the charges to be imposed by the Charges Bills in lieu of the Bankruptcy
Rules.
This Bill mainly provides consequential amendments to recognise the
provisions in Charges Bills.
[This Bill implements the proposed amendments by way of Schedules
to the Bill. Consequently, the Main Provisions will be referred
to as Items in the Schedule rather than as Clauses in a Bill]
Schedule 1 - Amendment of the Bankruptcy Act 1966
Item 3 refers to section 154A(3)(b) which is now set out at Item
283 of Schedule 1 in the separate Bankruptcy Legislation Amendment
Bill 1996 (as read a third time). Item 3 commences the consequential
reference to the imposition of registration charges on trustees in bankruptcy
by way of the proposed Bankruptcy (Registration Charges) Act 1996,
in lieu of the existing Bankruptcy Rules.
Likewise, Items 5 to 10 deal with amendments to proposed revised
sections 155 to 155E now found at Item 283 in Schedule 1 to the
Bankruptcy Legislation Amendment Bill 1996 (as read a third time).
The amendments proposed by Items 5 to 10 in this Bill are simple
consequential amendments concerning applications to register as a trustee
in bankruptcy and the obligation to pay a registration fee.
Item 13 changes the existing obligation upon a trustee in bankruptcy
to open individual bank accounts for each bankruptcy estate administered
by the trustee. A trustee must now pay all moneys received into a common
interest bearing bank account of a type which complies with that specified
in any Regulations made under the Bankruptcy Act 1966. Interest
accrued by that bank account (less bank charges) will be the entitlement
of the trustee who must, in turn, pay the interest to Consolidated Revenue
pursuant to the proposed Bankruptcy (Estate Charges) Act 1996.
Item 17 revises section 175 of the Bankruptcy Act 1966
to dispense with the obligation on trustees to furnish statements after
the finalisation of a bankruptcy estate to the Official Receiver (at present
this function is performed by the Registrar in the Federal Court - Bankruptcy
Division). Trustees will still be required to maintain financial records
and, as before, these records are subject to audit by the Inspector-General
in Bankruptcy. The section is being revised, as above, but will also
now include a penalty of $500 for failure, by a trustee, to produce
books required for audit (the reference to the penalty is in Item 18).
Item 20 inserts a new Part XV - Provisions relating to the
Bankruptcy Charges Act. This is a shortened title which covers both
the proposed Bankruptcy (Estate Charges) Act 1996 and the proposed
Bankruptcy (Registration Charges) Act 1996. These are simple procedural
provisions concerning the administration and payment of the charges.
Schedule 2 - Amendment of the Bankruptcy Legislation Amendment
Act 1996
Item 1 proposes the repeal of Items 309 and 310 in Schedule
1 to the Bankruptcy Legislation Amendment Bill 1996 (passed by Parliament
on 10 October 1996). This Bills Digest suggests that the repeal
is necessary to recognise that there is no longer the mandatory obligation
for trustees to file a formal statement on the finalisation of a bankruptcy
(see comments under Item 17, immediately above).
[Digest Comment: The Explanatory Memorandum to the Bankruptcy Amendment
Bill 1996 simply states, at paragraph 45, that Item 1 proposes
the repeal of Items 309 and 310 of the Bankruptcy Legislation
Amendment
Act 1996.]
Schedule 3 - Transitional provisions relating to amendment of the
Bankruptcy Act 1966
Items 1 and 2 are just transitional provisions to accommodate
the changes made in the administration of bankruptcy by the related legislation.
Brendan Bailey Ph. 06 277 2434
18 October 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
PRS staff are available to discuss the paper's contents with Senators
and Members and their staff but not with members of the public.
ISSN 1323-9031
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1996.
This page was prepared by the Parliamentary Library, Commonwealth of
Australia
Last updated: 22 October 1996
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