Bankruptcy Act 2006 (NI)

NORFOLK ISLAND Bankruptcy Act 2006

No. 2, 2007

Compilation No. 4

Compilation date: 25 December 2020

Includes amendments up to: Norfolk Island Continued Laws Ordinance 2015 (No. 2, 2015) as amended up to Norfolk Island Continued Laws Amendment (Coronavirus Economic Response Measures) Rules (No. 3) 2020 (F2020L01708)

NORFOLK ISLAND

Bankruptcy Act 2006

Table of contents

Section Heading Page

PART 1 — PRELIMINARY...............................................2 1. Short title....................................................2 2. Commencement...............................................2 3. Interpretation.................................................2 4. Application...................................................3 5. Calculation of a majority of creditors...............................3 6. Property of bankrupt that is divisible among his or her creditors.........4 PART 2 — OFFICIAL TRUSTEE IN BANKRUPTCY..........................5 7. Appointment of official trustee...................................5 8. Security by official trustee.......................................5 9. Payments by official trustee to Public Account.......................5 10. Immediate functions of official trustee in relation to bankruptcy on debtor's petition 5 11. Immediate functions of official trustee in relation to bankruptcy on creditor's petition 5 12. Functions of official trustee in relation to trustees' accounts.............6 13. Oversight of elected trustees.....................................6 14. Functions of official trustee in relation to liquidations under Division 14.1.6 15. Oversight of bankruptcy officers, etc...............................6 16. Official trustee's records........................................6 PART 3.—DETERMINATION OF BANKRUPTCY............................7 Division 3.1 — Preliminary..............................................7 17. Determination by the Court......................................7 18. Institution of proceedings........................................7 19. Annulment of determination on application by person prejudicially affected 7 Division 3.2 — Debtors' Petitions.........................................7 20. Debtors' petitions generally......................................7 21. Debtors' petitions by partnerships.................................7 22. Determinations................................................7 Division 3.3—Creditors' Petitions.........................................7 Subdivision 3.3.1 — Acts of bankruptcy..................................7 23. Definition of acts of bankruptcy...................................7 24. Available acts of bankruptcy.....................................9 Subdivision 3.3.2 — Bankruptcy notices..................................9 25. Proceedings for bankruptcy notice.................................9 26. Application to dismiss notice.....................................9 Subdivision 3.3.3 — Creditors' Petitions Generally........................10 27. Right to present creditors' petitions...............................10 28. Form of petition..............................................10 29. Signature of petition...........................................11 30. Verification of petition.........................................11 31. Evidentiary effect of verifying affidavit............................11 32. Service of petition............................................11 33. Fee for entry of appearance.....................................12 34. Proceedings on failure to appear.................................12 35. Proceedings on appearance.....................................12 36. Affidavit by debtor showing cause against petition...................12 37. Proceedings on hearing generally.................................12 38. Proceedings where debt contested................................12 39. Costs.......................................................13 40. Effect of payment to petitioning creditor...........................13 Subdivision 3.3.4 — Petitions against Partnerships.........................13 41. Creditors' petitions against partnerships...........................13 Division 3.4.—Summoning of Witnesses, etc, prior to Determination............14 42. Summoning of witnesses, etc....................................14 43. Examination of witnesses.......................................14 44. Failure to appear for examination.................................14 Division 3.5 — Orders of Determination of bankruptcy.......................14 45. Publication of order of determination..............................14 46. Date of determination..........................................14 47. Commencement of bankruptcy..................................14 48. Effects of determination as to property distributable among creditors.....15 49. Effect of determination as to debts provable in the bankruptcy..........15 50. Discharge of bankrupt in custody.................................15 51. Contents of order.............................................15 PART 4 —ELECTION, ETC, OF TRUSTEES AND COMMITTEES OF INSPECTION16 Division 4.1 — Meetings of Creditors for Purpose of Elections.................16 52. Calling of meetings...........................................16 53. Holding of meetings...........................................16 54. Adjournment of meeting.......................................16 55. Voting at meetings............................................16 56. Election, etc, of trustees and committees of inspection................17 57. Election of new trustee in case of improper voting...................17 58. Court order for election of new trustee.............................18 59. Certificate of appointment of trustee..............................18 60. Lack of trustee...............................................18 61. Lack of committee of inspection.................................18 62. Filling up numbers of members of committee of inspection............18 63. Defect in election.............................................18 Division 4.2 — Retirement, Removal, Replacement, etc.......................18 64. Trustees....................................................18 65. Committees of inspection.......................................19 Division 4.3 — Miscellaneous...........................................19 Subdivision 4.3.1 — Trustees.........................................19 66. Status of trustees..............................................19 67. Compliance with directions of first meeting of creditors...............19 68. Requirement of consent of committee of inspection..................19 69. Indemnity to trustees..........................................20 70. Vesting of property in trustees on appointment......................20 Subdivision 4.3.2 — Committees of Inspection............................20 71. Quorum of committees.........................................20 72. Effect of vacancies in committees................................20 PART 5.—PROPERTY OF BANKRUPTS DEVOLVING ON TRUSTEES.........21 Division 5.1 — Dealing with Proceeds of Sales under Execution................21 73. Holding of proceeds generally...................................21 74. Holding of proceeds where petition presented.......................21 75. Dealing with proceeds where no bankruptcy........................21 Division 5.2 — Salaries, Pensions, etc.....................................21 76. Payment to creditors of part of salary, etc...........................21 Division 5.3 — Avoidance, etc, of Certain Transactions.......................22 77. Transfers, etc, constituting acts of bankruptcy.......................22 78. Voluntary settlements..........................................22 79. Fraudulent preferences.........................................22 80. Other preferences to creditors...................................23 81. Other void transfers, etc........................................23 82. Saving of certain transactions....................................24 Division 5.4 — Transfer, etc, of Certain Property............................24 83. Property outside Norfolk Island..................................24 84. Property held by bankers, etc....................................25 Division 5.5 — Discovery of Assets......................................25 85. Order to attend for examination and produce documents...............25 86. Examinations................................................25 87. Incriminating questions........................................26 88. Order for payment of indebtedness to bankrupt found on examination....26 89. Reward for discovery of concealed property........................26 Division 5.6 — Seizure and Attachment...................................26 90. Seizure under order of Court....................................26 Division 5.7 — Miscellaneous...........................................27 91. Redirection of letters addressed to bankrupts........................27 PART 6 — ADMINISTRATION OF PROPERTY OF BANKRUPTS.............28 Division 6.1 — General................................................28 92. Duties of bankrupt............................................28 93. Trustees' discretion in administration..............................28 94. Directions to trustees by committees of inspection and meetings of creditors28 95. Meetings of committees of inspection.............................29 96. Meetings of creditors..........................................29 97. Applications by trustees to the Court for directions...................29 98. Trustee as receiver............................................29 99. Appeals.....................................................29 Division 6.2 — Dealings with Property of Bankrupts.........................30 100. Duty of trustees to take possession of books and other personal property..30 101. General powers of trustees......................................30 102. Compositions and schemes of settlement...........................31 103. Employment of lawyers and agents...............................31 104. Disclaimer of onerous property..................................32 105. Rights to transfer shares, etc.....................................33 106. Things in action..............................................33 107. Transfers subject to rights of redemption, mortgages, etc...............33 108. Payments into bank...........................................33 109. Trustees' books, etc............................................34 Division 6.3 — Payments to Bankrupts, Apprentices, etc......................34 110. Allowances in respect of maintenance of bankrupts, etc., and for services.34 111. Apprentices, etc...............................................34 Division 6.4 — Proof of Debt...........................................35 112. Debts provable in bankruptcy....................................35 113. Manner of proof..............................................35 114. Proof of future debts...........................................36 115. Proof of rents and other periodical payments........................36 116. Proof in respect of certain contracts...............................36 117. Secured creditors.............................................36 118. Allowance of interest..........................................37 119. Expunging, etc., of proofs......................................37 Division 6.5 — Set-offs................................................37 120. Claims to and payment of set-offs................................37 Division 6.6 — Ranking of Debts........................................37 121. Preferential debts.............................................37 122. Preference for certain rents......................................38 Division 6.7 — Dividends..............................................38 123. Declaration of dividend........................................38 124. Provision for distant creditors and for debts claimed but not yet proved...38 125. Late proofs of debt............................................38 126. Dividends in relation to future debts..............................39 127. Actions for dividends..........................................39 128. Forfeiture of unclaimed dividends................................39 Division 6.8 — Final Dividends and Distribution of Surplus...................39 129. Final dividends...............................................39 130. Distribution of net surplus......................................39 PART 7 — CLOSE OF BANKRUPTCY AND DISCHARGE OF BANKRUPT, ETC 40 Division 7.1 — Close of bankruptcy.......................................40 131. Last examination of bankrupt....................................40 132. Close of bankruptcy............................................40 Division 7.2 — Discharge of bankrupt.....................................41 133. Certificates of discharge........................................41 134. Discharge for absence of responsibility or full settlement..............41 135. Discharge after one year with consent of creditors, or after two years in any case. 41 136. Right to discharge after three years................................42 137. Conditional grant of certificate...................................42 138. Form, etc., of certificate........................................42 139. Effect of certificate of discharge..................................42 140. Evidence of discharge.........................................43 141. Payments, etc., to influence creditors..............................43 Division 7.3 — Undischarged Bankrupts...................................43 142. Position of undischarged bankrupts................................43 Division 7.4 — Annulment of Determination...............................44 143. Annulment on payment in full...................................44 144. Consequences of annulment.....................................44 PART 8 — RELEASE OF TRUSTEES......................................45 145. Application for release.........................................45 146. Effect of release...............................................45 147. Disposal of unclaimed dividends and outstanding property.............45 PART 9 — PARTNERSHIP BANKRUPTCIES, JOINT AND SEPARATE ESTATES, ETC.......46 148. Amalgamation of proceedings against partners.......................46 149. Proof, etc, by creditors of partnerships.............................46 150. Joint and separate dividends.....................................46 PART 10 — PROCEEDINGS IN BANKRUPTCY.............................47 Division 10.1 — General Powers and Practice of the Court.....................47 151. Dealing with matters in Chambers................................47 152. Power of review...............................................47 153. Cases stated..................................................47 154. Costs.......................................................47 155. General powers of the Court.....................................47 156. Staying of proceedings.........................................47 157. Committal to prison............................................47 Division 10.2 — Supplemental Procedural Provisions.........................48 158. Consolidation of proceedings....................................48 159. Failure to proceed.............................................48 160. Proceedings by corporations.....................................48 161. Proceedings by creditors who are partners..........................48 162. Appointment of agents by creditors...............................48 163. Death of bankrupt.............................................48 Division 10.3 — Evidentiary Provisions....................................48 164. Form of evidence..............................................48 165. Evidence of proceedings at meetings of creditors.....................48 166. Evidence of proceedings in bankruptcy............................49 167. Depositions, etc...............................................49 168. Transcripts of oral testimony.....................................49 169. Death of witness..............................................50 PART 11 — PROCEEDINGS BY AND AGAINST DEBTORS..................51 170. Continuance of certain actions by bankrupts.........................51 171. Actions against bankrupts.......................................51 172. Rights, etc, under third party insurance.............................51 173. Proceedings by trustees and partners of bankrupts....................52 PART 12 — ABSCONDING DEBTORS....................................53 174. Absconding, etc., after granting of bankruptcy notice and before determination of bankruptcy. 53 175. Absconding, etc., after petition...................................53 PART 13 — MISCELLANEOUS..........................................55 176. Expenses of registry...........................................55 177. Assignees of things in action.....................................55 178. Contracts with bankrupts and other persons jointly...................55 179. Exemptions from duty.........................................55 180. Proceedings in respect of things done under this Act..................55 181. Order for prosecution..........................................55 182. Expenses of prosecution........................................56 PART 14 — ARRANGEMENTS AND COMPOSITIONS.......................57 Division 14.1 — Liquidations by Arrangements.............................57 183. Resolution for liquidation by arrangement..........................57 184. Registration of resolution.......................................57 185. Meetings of creditors...........................................57 186. Certificate of appointment of trustee................................58 187. Property of debtor divisible among creditors.........................58 188. Powers of trustee and distribution of property........................58 189. Accounting for moneys, etc., by trustees............................58 190. Close of liquidation, discharge of debtor and release of trustee...........58 191. Application of bankruptcy provisions..............................59 192. Determination of bankruptcy.....................................59 Division 14.2 — Compositions with Creditors..............................59 193. Calculation of a majority of creditors for purposes of Division 14.2......59 194. Resolution for composition.....................................59 195. Registration of resolution.......................................60 196. Variation of composition........................................60 197. Effect and enforcement of compositions...........................61 198. Statements concerning bills of exchange and promissory notes.........61 199. Determination of bankruptcy....................................61 Division 14.3 — General................................................61 200. Debts incurred by fraud........................................61 201. Form of Gazette notice..........................................61 PART 15 — ASSISTANCE BY THE COURT TO A COURT HAVING JURISDICTION IN BANKRUPTCY MATTERS IN AUSTRALIA OR A FOREIGN COUNTRY.......62 202. Application of this Part..........................................62 203. Minister may declare foreign countries, etc..........................62 204. Assistance by the Court to Courts of a foreign country.................62 205. Request for assistance to be made in writing.........................62 PART 16 - REGULATIONS...............................................63 206. Rules and regulations...........................................63 SCHEDULE....................................................64