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1.1 The purpose of this practice direction is to outline the regulatory role of the Inspector-General in Bankruptcy (‘the Inspector-General') in regard to the obligation on trustees and controlling trustees to lodge notice of the first meeting of creditors convened pursuant to section 73 or Part X of the Bankruptcy Act 1966 (‘the Act’).
2.1 Section 75-50 of the Insolvency Practice Schedule (Bankruptcy) to the Act enables the Insolvency Practice Rules (Bankruptcy) 2016 (‘the Rules’) to provide for and in relation to meetings of creditors, including:
- notice for convening meetings;
- information to be given to creditors;
- proxies and attorneys; and
- facilities (including electronic communication facilities) to be available at the meeting.
2.2 Section 75-40 of the Rules provides for meetings of creditors called under section 73 or an authority under Part X of the Act.
2.3 Subsection 75-40(2) of the Rules require the trustee of a debtor’s regulated estate to lodge notice of the first meeting called under section 73 or Part X of the Act with the Inspector-General in accordance with the approved form.
2.4 Subsection 75-40(3) of the Rules requires the notice to state at least the following information:
- the name of the regulated debtor;
- the purpose for which the meeting is called;
- the time, date and place for the meeting;
- the time and date by which particulars of the creditor’s debt or claim, and proxies for the meeting, are to be submitted;
- the name and contact details of the trustee.
2.5 Subsection 75-40(4) of the Rules provides that details of a notice of meeting lodged with the Inspector-General under subsection (2) must be published on a website maintained by the Inspector-General.
3.1 The form approved by the Inspector-General for notice given on or after 1 September 2017 of the first meeting of creditors convened under section 73 or Part X of the Act (Notice of meeting of creditors (Form 38) can be found on the AFSA website under About meetings of creditors.
3.2 The details from the notice must be published on a website maintained by the Inspector-General. This website forms part of the Australian Financial Security Authority (AFSA) with domain name www.afsa.gov.au.
4.1 Publishing details of a 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 under these Guidelines applies to publishing details of a notice of creditors’ meeting on AFSA's dedicated webpage. All Section 73 and Part X publication of creditors’ meeting incur a flat fee (inclusive of GST) to publish on AFSA's dedicated webpage.
4.3 From 1 October 2020, the fee for advertising creditor meetings can only be paid using ’on account' method. Monthly invoice will be issued to practitioner for all publishing requests received in the month.
4.4 The process for notices of section 73 or Part X meetings of creditors lodged with the Inspector-General will be as follows:
- Notice of the creditors’ meeting should be lodged at least 10 business days before the proposed creditors’ meeting using the approved form.
- Details of the notice will be published on AFSA's website at least 5 business days before (and removed 5 business days after) the meeting has passed.
- Payment for publication of the details of a notice of Part X creditors’ meetings is separate to the filing fee that is paid for the section 188 authority.
- AFSA will invoice you at the end of the month for all requests lodged in the month
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."
Regulation and Enforcement (R&E)
6.1 Section 12 of the Act provides R&E with the power to investigate issues of concern either with notices of creditors’ meetings lodged for publication during the annual inspection programme or through a complaint being received. R&E will examine the level of registered trustees’ compliance with the obligations set out in this practice direction and the legislative framework outlined in paragraphs 2.1 to 2.5 above.
6.2 Notices lodged with the Inspector-General that are not in the approved form will be returned to the trustee or controlling trustee to be corrected and resubmitted.
6.3 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 role and obligation of trustees and controlling trustees relating to lodging notice for the first meeting of creditors under section 73 and Part X of the Act. R&E will monitor and assess compliance by trustees and controlling trustees according to the procedure set out in this document.