1.1 The purpose of this Practice Direction is to outline the Inspector-General in Bankruptcy’s regulatory role in regard to the obligation on trustees and controlling trustees to publish notice of the first meeting of creditors convened pursuant to section 73 and section 188 of the Bankruptcy Act 1966 (the Act).
2.1 Section 76A of the Act provides that the general provisions contained in Division 5 of Part IV of the Act relating to meetings of creditors apply, with such modifications as are prescribed by the Bankruptcy Regulations 1996 (the Regulations), to meetings of creditors under Division 6 of Part IV of the Act (the division that deals with proposals for compositions/schemes of arrangement).
2.2 Section 196 of the Act provides that Division 5 of Part IV of the Act applies, with such modifications as are prescribed by the Regulations, to meetings of creditors called under an authority under section 188 of the Act.
2.3 Schedule 2 and Part 2, Schedule 6 of the Regulations respectively prescribe modifications to Division 5 of Part IV of the Act as it applies to the first meeting of creditors called under Division 6, Part IV and under an authority under section 188 of the Act.
2.4 In particular, section 64A in Division 5 of Part IV of the Act is modified by the addition of:
- paragraph 64A(2)(a) - which provides that the notice of the first meeting of creditors must be published in a manner approved by the Inspector-General;
- subsection 64A(3) - which provides that the notice of the first meeting of creditors must include any matter approved by the Inspector-General; and
- subsection 64A(4) - which states:
"For the purposes of paragraph (2) (a) and without limiting the power of the Inspector-General under that paragraph, the Inspector-General may:
- approve, as the manner of publication of the notice of the first meeting of creditors, publication on a website; and
- specify in the approval:
- the website where the notice must be published; and
- any conditions relating to the approval.”
3.1 The method approved by the Inspector-General for notice given on or after 1 July 2011 of the first meeting of creditors convened under Division 6, Part IV and under an authority under section 188 of the Act is described below.
Publishing notice of the meeting
3.2 The notice must be given on the website of the Australian Financial Security Authority (AFSA) with domain name www.afsa.gov.au or published in both a national daily newspaper that circulates throughout Australia and a regional daily newspaper of the state or territory in which the debtor resides.
Contents of the notice
3.3 The following matters must, as a minimum, be included:
- whether the meeting is called under section 73 or pursuant to an authority under section 188 of the Act
- administration number
- bankrupt's or debtor's name(s), residential address, occupation(s), business name(s)
- trustee's or controlling trustee's name and address
- time and date of the meeting
- place and address of the meeting
- contact name in the trustee's or controlling trustee's office, their phone number
- facsimile number and email address.
3.4 The approved method can be found on the AFSA website under about meetings of creditors.
4.1 The advertising of creditors’ meetings is a cost recovered fee service consistent with the Australian Government Cost Recovery Guidelines (the Guidelines), which require agencies to set charges to recover the costs of products or services where it is efficient to do so. The policy outlined in the Guidelines applies to all Public Governance, Performance and Accountability Act 2013 (PGPA Act) agencies (including AFSA).
4.2 The fee according to these Guidelines will apply to advertising the relevant creditors’ meeting on AFSA's dedicated webpage. This will see the advertisement processed and placed on AFSA's website at least five (5) business days before the proposed meeting; maintained and displayed in a user-friendly environment; and removed five business days after the meeting has passed. All Section 73, Section 64 and Part X meetings of creditors incur a flat fee (inclusive of GST) to advertise each creditor meeting on AFSA's dedicated web page.
4.3 The fee for advertising creditor meetings may be paid by way of a cheque, credit card or EFT at the time the request to advertise a meeting is lodged, or 'on account' if the trustee has made prior arrangements with the Inspector-General to be billed on account.
4.4 For trustees who choose to use website advertising rather than newspaper advertising the procedure will be as follows:
- Requests to advertise a creditors meeting need to be made at least 10 days prior to the proposed creditors meeting using the interactive template Form 14 - Request to advertise meetings of creditors [PDF 225KB]
- The fee will see the advert processed and placed on AFSA's website at least 5 business days before the proposed meeting, it will be maintained and displayed in a user-friendly environment, and it will be removed 5 business days after the meeting has passed.
- Payment of Part X creditors meetings is not required at the time the filing fee is paid for the Section 188 authority. Should you wish to pay for both the filing fee and creditors meeting at the same time, you must ensure payment is made separately. For example, should you wish to pay by cheque, please send two separate cheques (Part X filing fee and creditor meeting advertising fee).
- Payment of advertising fee as follows:
- For creditor meeting payments made by credit card, it’s a single step process of completing and signing the request form including credit card details and emailing or faxing it to the email address or fax number at the top of the form.
- If payment is being made by cheque, the preferred option is to send the cheque together with the form. Should you wish to send the cheque and form separately; the meeting will only be displayed once the cheque is received. Cheques for creditor meeting advertisements are to be sent to the Melbourne office at the following address: GPO Box 2851, Melbourne VIC 3001.
- If you have made previous arrangements and are an 'on account' client, AFSA will invoice you at the time the creditor meeting is advertised, not at the end of the month like other AFSA 'on account' processes. Individual invoices will be created for each advertisement to account cliental.
- If payment is being made by Direct Credit, please ensure you enter the unique identifier and submit to both email addresses as stated on the form.
4.5 AFSA displays the Meetings of Creditors advertisement link under Quick Links Menu on the home page www.afsa.gov.au.
5.1 AFSA recommends trustees and controlling trustees amend their initial ‘notification to creditors’ correspondence by adding a simple sentence and website link into their existing letters to advise of the above changes. An example would be:
“For information about creditors’ meetings that may be called in relation to this administration, please refer to AFSA's website www.afsa.gov.au under the Quick Links Menu."
Regulation and Enforcement (R&E)
6.1 Section 12 of the Act provides R&E with the power to investigate where there are issues of concern either with the advertisement submitted for publishing, during the annual inspection program, or through a complaint being received. R&E will examine the level of trustees’ compliance with the obligations set out in this practice direction and the legislative framework outlined in paragraphs 2.1 to 2.4 above. Advertisements will not be accepted for publication on AFSA's website if they do not comply with these obligations.
6.2 Where breaches of these obligations or a lack of record-keeping are identified a trustee will be asked to take appropriate remedial action, including a change in practice.
7.1 This practice direction outlines the Inspector-General’s procedure relating to a trustee’s or controlling trustee’s obligations in relation to publishing notice of the first meeting of creditors pursuant to section 73 and section 188 of the Act. It will be against the procedure set out in this practice direction and the legislative framework that a trustee’s performance of these obligations will be assessed by R&E.