Insolvency Law Reform Act 2016
The Insolvency Law Reform Act 2016 amended the Bankruptcy Act 1966 and introduced reforms to the personal insolvency regime to align the administration of personal and corporate insolvencies. The Act commenced in two ‘tranches’, with the second tranche of reforms commencing on 1 September 2017.
The second tranche included measures dealing with remuneration and other benefits received by trustees, and rules concerning their handling of funds when administering personal insolvencies. The rights of creditors to obtain information from trustees were enhanced, and the rules around meetings of creditors streamlined.
Insolvency Practice Rules (Bankruptcy) 2016
The Insolvency Practice Rules (Bankruptcy) 2016 provide the details underpinning the reforms contained in the Insolvency Law Reform Act 2016. Those parts of the rules corresponding to the second tranche of reforms commenced on 1 September 2017.
Statute Update (Autumn 2018) Act 2018
The Statute Update (Autumn 2018) Act 2018 made a minor technical amendment to section 3 of the Bankruptcy (Estate Charges) Act 1997 to omit reference to Norfolk Island. The amendment commenced on 19 June 2018.
National Redress Scheme for Institutional Child Sexual Abuse (Consequential Amendments) Act 2018
The National Redress Scheme for Institutional Child Sexual Abuse (Consequential Amendments) Act 2018 amended the Bankruptcy Act 1966 to provide that redress payments made to a person under the scheme are not divisible property in the person’s bankruptcy, regardless of whether the payments were received before, on or after the date of bankruptcy. The amendment will commence on 1 July 2018.
Proposed changes to insolvency legislation
A number of proposed changes to insolvency legislation were before the parliament during 2017–18, as outlined below.
Bankruptcy Amendment (Enterprise Incentives) Bill 2017
The Bankruptcy Amendment (Enterprise Incentives) Bill 2017 was introduced into the Senate in October 2017. The Bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee on 30 November 2017. The committee reported in April 2018. As at 30 June 2018, the Bill was before the Senate.
The Bill includes reforms to the Bankruptcy Act 1966 that would shorten the default bankruptcy period from three years to one year.
Bankruptcy Amendment (Debt Agreement Reform) Bill 2018
The Bankruptcy Amendment (Debt Agreement Reform) Bill 2018 passed the House of Representatives on 28 February 2017. The Senate referred the Bill to the Legal and Constitutional Affairs Legislation Committee on 7 December 2017. The committee reported in April 2018. As at 30 June 2018, the Bill was before the Senate.
The Bill includes reforms to the Bankruptcy Act 1966 in relation to access to debt agreements and the regulation of debt agreement administrators.
Civil Law and Justice Legislation Amendment Bill 2017
The Civil Law and Justice Legislation Amendment Bill 2017 was introduced into the Senate in March 2017 and, as at 30 June 2018, was before the Senate.
The Bill proposes an amendment to the Bankruptcy Act 1966 to clarify that the Family Court of Australia has bankruptcy jurisdiction when a trustee applies to have a financial agreement set aside under the Family Law Act 1975.
Schedule 12 of the Regulatory Powers (Standardisation Reform) Act 2017 amended the Personal Property Securities Act 2009 (PPS Act), commencing on 31 March 2018. The changes replaced Part 6.3 of the PPS Act with new provisions that apply the Regulatory Powers (Standard Provisions) Act 2014 to contraventions of the PPS Act that occur after commencement.
The new provisions mean that the Registrar of Personal Property Securities now has access to standardised regulatory powers. However, the changes do not significantly alter the range of powers available to the Registrar.
Table 3 shows the number of registrations that were removed or otherwise amended by the Registrar of Personal Property Securities in 2017–18. The PPS Act provides the Registrar with the power to amend and/or remove data on the PPSR, including an entire registration. This may occur as a result of the administrative amendment demand process (Part 5.6); the exercise of the discretion under Part 5.7; or, with respect to migrated data, if the Registrar is satisfied that it was not in the determined class for migration (Part 9.4).
|Collateral class listed in registration||Section of PPS Act||Applications processed||Registrations amended|
|Part 5.6 – Amendment demands||Section 181||1,642||260|
|Part 5.7 – Removal of data and correction of errors||Section 184||48||21|
|Part 9.4 – Transitional application of the PPS Act||Section 334||N/A||2|
Table 4 provides the date, time and reason for refusal of access to, or suspension of, the PPSR.
In 2017–18, the Registrar decided, pursuant to subsection 147(5) of the PPS Act, to refuse access to or otherwise suspend the operation of the PPSR on seven occasions.
|07–08/10/2017||19:00–11:42||Deployment of code release|
|18/11/2017||19:00–02:00||Upgrade to Accounts Receivable Financial Management Information System (ARFMIS) module|
|01/04/2018||01:30–03:05||Daylight saving change|
|05/05/2018||19:00–23:00||Deployment of code release|
|09/06/2018||14:00–21:00||Network and database tests|
|10/06/2018||14:00–20:00||Network and database tests|
|16/06/2018||19:00–23:00||Deployment of code release|
In accordance with subsection 147(6) of the PPS Act and the associated regulations, the Registrar may also refuse access to, or otherwise suspend, the operation of the PPSR with notice for a period not longer than four hours. This power is generally used for scheduled maintenance of the PPSR.
From 1 July 2017 to 30 June 2018, the standing outage period for scheduled maintenance was 9.00 p.m. to 11.59 p.m. on Wednesdays (Canberra time). The scheduled maintenance period did not include Wednesdays falling on or between 21 December 2017 and 1 January 2018.