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| Major changes to the Bankruptcy Act: an introduction |
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Contact: Frances Hannah
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INTRODUCTION
Changes to the law of bankruptcy occurred in 1996(1), and were proposed for 2001(2). The amendments made to the Bankruptcy Act 1966 (Cth) (the Act) in 1996 were substantial, whilst the amendments proposed for 2001 were refinements of issues originally dealt with in 1996. The 1996 amendments were a direct result of the activities of certain high-profile bankrupts of the early 1990s, who became well-known to all Australians through relentless media exposure. The purpose of the amendments was stated to be ‘to further the Government’s commitment to improving access to justice by modernising personal insolvency law’(3). The purpose could equally be expressed to be the amendment of bankruptcy procedure which had for too long allowed a minority of bankrupts to use bankruptcy as a means of ordering their affairs in ways which were morally reprehensible, and which had become totally unacceptable to the Australian public.
THE 1996 AMENDMENTS(4)
The 1996 amendments dealt with the following matters:- Conferral of exclusive jurisdiction in bankruptcy matters on the Federal Court(5);
- Streamlining of administrative dealings between the Insolvency and Trustee Service Australia (ITSA), the Official Trustee in Bankruptcy, and the general public;
- Abolition of the roles of Registrar and Deputy Registrar in Bankruptcy;
- Updating of matters relating to trustees in bankruptcy, including registration requirements, nature of powers exercised, and powers of investigation;
- Updating of forms used in bankruptcy, and the creation of ‘approved forms’ to replace ‘prescribed forms’ in relation to all forms except for the Bankruptcy Notice (Form 1);
- Creation of a National Personal Insolvency Index (NPII) as a register of matters relating to bankruptcy;
- Redrafting of the antecedent transaction provisions of the Act (sections 120-122);
- Refinement of the compulsory income contribution scheme in Division 4B of Part VI of the Act;
- Insertion of a new form of insolvency administration, debt agreements, in Part IX of the Act;
- Restructuring of Part X of the Act to align its procedures more closely with those in bankruptcy, especially as regards meeting procedure;
- Alteration of the power to make regulations under the Act.
Footnotes
1. Bankruptcy Legislation Amendment Act 1996 (Cth).
2. Bankruptcy Legislation Amendment Bill 2001 (Cth). The Bill passed the Senate on 27/9/01, but was subject to amendments in the Senate by the Opposition, which the Government did not approve. Thus, the Bill was not passed before the 2001 Federal election and has now lapsed. Its fate in 2002 is uncertain at the time of writing.
3. Explanatory memorandum, Bankruptcy Legislation Amendment Bill 1995, 1.
4. These amendments came into operation on 16 December 1996.
5. The Federal Court was given exclusive jurisdiction, except for the High Court, and subject to the cross-vesting scheme which then operated. This position has since been altered by the High Court’s declaration of the unconstitutionality of the cross-vesting scheme, and the introduction of the Federal Magistrates Service, on which see below.
This is the first article in a series from Frances Hannah, Senior Lecturer, QUT Law School.
Other Articles in this series:
1. Major Changes to the Bankruptcy Act: An Introduction
2. Changes to the Bankruptcy Act: Exclusive Federal Jurisdiction and Streamlining of Procedures
3. Changes to the Bankruptcy Act: Duties of a trustee in bankruptcy
4. Changes to the Bankruptcy Act: Forms; Regulations and NPII
5. Changes to the Bankruptcy Act: Antecedent transactions in the Bankruptcy Act
6. Changes to the Bankruptcy Act: Contributions by a bankrupt
7. Changes to the Bankruptcy Act: Debt agreements for bankrupts
8. Changes to the Bankruptcy Act: Insolvency administration outside bankruptcy
9. Changes to the Bankruptcy Act: The 2001 Proposals
February, 2002
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