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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