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| Changes to the Bankruptcy Act: Exclusive Federal Jurisdiction and streamlining of procedures |
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Contact: Frances Hannah
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A. Conferral of exclusive jurisdiction on the Federal Court
Prior to the 1996 amendments, jurisdiction in bankruptcy was exercised by both the Federal Court and State and Territory Supreme Courts. The alteration to the jurisdiction relating to bankruptcy reflected the reality that most matters in bankruptcy were dealt with by the Federal Court even prior to 16 December 1996. This was due to the fact that the Federal Court registrars and deputy-registrars were also the Registrars in Bankruptcy. Section 27(1) of the Act now provides that the jurisdiction of the Federal Court is ‘exclusive of the jurisdiction of all courts other than…the High Court.’
The Federal Magistrates Act 1999 (Cth) has altered this position. This Act established the Federal Magistrates Service (FMS), which commenced operation on 23 June 2000(1). The jurisdiction of this new Court embraces various federal matters, including family law matters to $300,000, trade practices matters to $200,000 and bankruptcy matters, for which there is no upper monetary limit. All jurisdiction is concurrent with the Federal Court, but the FMS has its own Rules(2). Recent case law suggests an increasing usage of the FMS for routine bankruptcy matters, as there is a financial advantage in using the FMS in terms of fees payable(3).
B. Streamlining of administrative procedures and abolition of the role of Registrar
The 1996 amendments proposed the creation of a ‘one stop service’(4) for bankrupts and insolvent debtors by abolishing the roles of the Registrars and Deputy Registrars in Bankruptcy, and recombining their functions into the roles of the Official Receivers in each bankruptcy district(5). Whether this initiative has recommended itself to debtors and bankrupts using the services of ITSA is unknown, but the respective roles of the Inspector-General in Bankruptcy, the Official Receivers, and the private trustees certainly have been clarified since these amendments. The Inspector-General in Bankruptcy is the administrative head of ITSA, which is itself an executive agency in the Attorney-General’s portfolio under the Public Service Act 1999 (Cth)(6). Official Receivers now exercise many of the functions of the Registrars prior to the amendments, including the issuing of bankruptcy notices, the acceptance of debtors’ petitions, the acceptance of authorities under s 188 (Part X), and the maintenance of bankruptcy records on the NPII.
Footnotes
1. The first hearings were held on 3 July 2000.
2. The relevant Rules for bankruptcy are contained in chapter 4 of the Rules. These Rules commenced operation on 30 July 2001.
3. The filing fee for a creditor’s petition is $250 ($500 for corporations), as opposed to $526 ($1262 for corporations) in the Federal Court, and this fee may be waived. In addition, there are no daily hearing fees.
4. The ‘one stop service initiative’ is referred to in the Explanatory Memorandum to the Bankruptcy Legislation Amendment Bill, Commonwealth of Australia, 1995, 1, 4.
5. There are eight bankruptcy districts in Australia, one for each State (some of these districts embrace the smaller territories), the Australian Capital Territory and the Northern Territory - see s 13 of the Act.
6. Commencement date as an executive agency was 3 July 2000. The creation of ITSA as an executive agency permits ITSA to report directly to Parliament rather than as a mere function of the Attorney-General’s Department.
This is the second 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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