Federal Court of Australia, Family Court of Australia, and
Federal Magistrates Court of Australia

Harmonised Bankruptcy Rules Monitoring Committee

Recommended Amendments to the Harmonised Bankruptcy Rules

October 2007

1.       Time for service of annulment applications and applications to review a Registrar’s decision to make a sequestration order

The Committee has decided to recommend that:

1. subrule 7.02(2) be amended by replacing ‘28 days’ with ‘7 days’;
2. subrule 7.03(3) be amended by replacing ‘14 days’ with ‘7 days’;
3. subrule 7.04(1) be amended by replacing ‘The trustee’ with ‘If directed by the Court, the trustee’;
4. subrule 7.06(2) be amended by replacing ‘28 days’ with ‘7 days’;
5. subrule 7.06(5) be amended by replacing ‘14 days’ with ‘7 days’.

The Committee was asked to consider whether subrules 7.06(2) and (5) should be amended to shorten the time for service and notification. There are concerns that these provisions, while consistent with the time prescribed for the service of annulment applications, may cause undue delay in the hearing and determination of review applications. Such delays can lead to administration and other costs being incurred unnecessarily.

The Committee considered that the time for service should be shortened and, if this left the trustee or a creditor insufficient time to properly prepare for the hearing of the application, the relevant Court could give appropriate directions for the further conduct of the proceeding (including the need for a trustee report pursuant to a direction under rule 7.04).

The Committee also considered that, to maintain consistency with the time in which annulment applications must be served or notified, similar amendments should be made to rules 7.02 and 7.03.

The Committee considered that, if the service period on the trustee is shortened it may not be reasonable (or practical) to retain subrule 7.04(1) which requires the trustee to prepare a report before the hearing. The subrule could be amended to provide that a trustee report need only be prepared pursuant to a direction of the Court. This means the need for a report would be left for determination at the first hearing (ie first court date or first directions hearing).

2.       Content of affidavit under rule 4.06

The Committee had decided to recommend that subrule 4.06(3) be amended to include a new paragraph (ba) in the following terms:

(ba)   states that there were no details of a debt agreement, in relation to the debt on which the applicant creditor relies, in the Index on the day on which the search was made; and

The amendment will mean subrule 4.06(3) is consistent with the requirements of paragraph 185K(1)(b) of the Bankruptcy Act 1966 (Cth).

3.       Filing of affidavit under rule 4.07

The Committee had decided to recommend that paragraph 4.07(b) be replaced with a new paragraph (b) in the following terms:

(b)     the applicant creditor must:

(i)      keep the original affidavit; and
(ii)     produce the original affidavit as directed by the Court.

The effect of this amendment is to remove the requirement that the original affidavit referred to in rule 4.06 must be filed notwithstanding that a fax copy of it has been filed.

There does not appear to be any compelling reason for the original of the affidavit required by rule 4.06 to be filed if a fax copy is on the file. It should be sufficient that the Bankruptcy Rules provide that a person who files a fax copy of an affidavit must produce the original if directed by the Court.

4.       Forms 2 and 3 – requirement to state relevant provision of the Bankruptcy Act

The Committee decided to recommend that Form 2 and Form 3 in Schedule 1 to the Bankruptcy Rules be amended to refer to the requirement under subrules 2.01(3) and (4) respectively that the application include a statement of the relevant section of the Bankruptcy Act or Bankruptcy Regulation.

5.       Form 6 – Notice that petition must be served on Official Receiver

The Committee decided to recommend that Form 6 in Schedule 1 to the Bankruptcy Rules be amended by inserting at the foot of the form a note in the following terms:

A creditor is required to give a copy of this petition to the Official Receiver within 3 working days of presentation:  see subregulation 4.05(1) of the Bankruptcy Regulations 1996.

The amendment will help ensure compliance with regulation 4.05 of the Bankruptcy Regulations 1996.

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