Inspector-General Practice Statement 18

IGPS 18 – Issuing of infringement notices
Date of release: 
December 2010
Last updated: 
April 2020

1. Introduction

The Bankruptcy Act 1966 (the Act) includes a range of offence provisions. Some of these are 'strict liability' offences1.

Division 2 of Part 14 of the Bankruptcy Regulations 1996 (the Regulations) includes an infringement notice regime (the regime). The regime applies to the strict liability offences, found in section 277B(2) of the Act. This practice statement relates only to those offences.

Under subsection 11(4) of the Act, the Australian Financial Security Authority (AFSA) is responsible for managing the regime on behalf of the Inspector-General in Bankruptcy.

Under the regime, AFSA can issue an infringement notice to an alleged offender to pay a penalty. This penalty payment would be applied instead of criminal prosecution. The regime allows AFSA to penalise behaviour which, while relatively minor in criminality, could still have serious consequences. This assists AFSA in:

  • ensuring effective bankruptcy administration;
  • regulating insolvency practitioners; and
  • preserving the integrity of the National Personal Insolvency Index (a public record of personal insolvencies in Australia).

2. Infringement notice offences

Offences under the regime are listed in Annexure A, including the:

  • statutory reference
  • offence description
  • court-imposed penalty
  • penalty imposed under the regime.

The penalty that applies varies depending on the offence. The amounts payable are linked to section 4AA of the Crimes Act 1914 (Cth). Currently, one penalty unit equals $210.

For an individual, the maximum amount payable under the regime is one-fifth of the maximum penalty that could be imposed by a Court.

For a corporation, the maximum penalty a court can impose is five times the maximum penalty that could be imposed if the offence was committed by an individual.2

Example 1: Under the Act, if a trustee receives a proposal for a composition or arrangement, they must give a copy to the Official Receiver within two working days. If the trustee fails to comply, they would be liable to pay an infringement notice of $210. That is one-fifth of the maximum court-imposed penalty of $1,050.

With the exception of subsections 73(1A) and 224A(5) of the Act, the time someone has to comply is calculated according to section 36 of the Acts Interpretation Act 1901 (Acts Interpretation Act).

The Acts Interpretation Act states that when an act (e.g. filing a document or making a payment) needs to be done by a certain date, that date will exclude the day of the event. If the act needs to be done on a Saturday, Sunday or public holiday, it can be done on the next working day.

Example 2: If a trustee has two days from Friday to file a document, the document would notionally have to be filed by Sunday. Under the Acts Interpretation Act, the document would need to be filed the following Monday (assuming it is not a public holiday).

3. Issuing an infringement notice

Annexure B provides a flow chart of the infringement notice process.

Under Regulation 14.05 of the Regulations, AFSA can issue an infringement notice if they have reasonable grounds to believe3someone has committed an offence. The notice must be issued within 12 months the offence being committed.

AFSA may consider these factors before issuing an infringement notice:

  • the nature of the alleged offence
  • the likelihood of an infringement notice being a successful deterrent
  • practical considerations, including whether or not the alleged offender has a history of non- compliance
  • previous warnings
  • whether the alleged offence is better dealt with by a Court
  • whether there is a more appropriate resolution or sanction
  • the possible defence of mistake of fact.4

The above factors are not weighted, and other factors may be considered.

Section 6.1 of the Criminal Code Act 1995 states:

(1) If a law that creates an offence provides that the offence is an offence of strict liability:

(a) there are no fault elements for any of the physical elements of the offence
(b) the defence of mistake of fact under section 9.2 is available.

Multiple infringement notices can be issued to someone for the same offence if they continue not to comply. AFSA can also refer these matters to the Commonwealth Director of Public Prosecutions to consider prosecution action if someone is continuously non-compliant.5

If there are two trustees appointed to an administration, the infringement notice will be issued in both trustees’ names.

AFSA must record all factors they considered when deciding whether or not to issue an infringement notice. It must be documented according to the Australian Government Investigation Standards and the APS Code of Conduct and Values. Information held by the AFSA is subject to the Freedom of Information Act 1982.

A template of an infringement notice is at Annexure C.

4. Serving an infringement notice

Regulation 14.07 of the Regulations outlines how infringement notices can be served.

An infringement notice can be served on an individual:

a. in person or by post
b. by leaving the notice:
i. at the person’s last-known place of residence or business
ii. with someone over 16 years old who lives or works at that place.

An infringement notice can be served on a corporation:

a. by leaving it at, or sending it to, the corporation’s head office, a registered office or a principal office

b. by giving it to someone who is an officer or employee of the corporation.

An infringement notice can be served on a registered trustee or a registered debt agreement administrator via email. The email will be sent from InfringementNotice [at] afsa.gov.au.

An infringement notice that is posted will usually be sent by registered post with a delivery confirmation receipt.

5. Receiving an infringement notice

Someone who receives an infringement notice has four options:

  • pay the penalty within 28 days
  • request an extension of time to pay
  • request a review
  • choose not to pay the notice (the matter will then be referred for prosecution).

If the infringement penalty is paid by cheque, the payment is not considered received until the cheque has been honoured on presentation.6

5.1 Requesting an extension of time

The recipient can request an extension before the 28-day payment period ends. If an extension is requested after this, it must include a statement explaining why it could not be dealt with in that period.7 An extension of up to 28 days may be granted.

The recipient can request an extension via:

  • email: InfringementNotice [at] afsa.gov.au
  • post: c/- Assistant Director Enforcement, GPO Box 2851, Melbourne Vic 3001

AFSA will advise the recipient of the decision in writing within 14 days.

  • If an extension is granted, the recipient will have to make the payment within the new deadline. If the recipient fails to make the payment by the new deadline, the matter will be referred for prosecution.
  • If the extension is not granted, the recipient will be required to make payment within seven days of being notified of the decision, or before the end of the initial 28 day period, whichever is later.

5.2 If payment is received

If the recipient pays the penalty on time:

  • any liability for the offence is discharged
  • they cannot be prosecuted for the offence
  • they are not regarded as having admitted guilt or liability for the offence
  • they are not regarded as having been convicted of the offence.

5.3 Requesting a review

The recipient can request a review if they disagree with the infringement notice.8 The request for review must be submitted within the 28-day payment period. The recipient must outline the reasons for the review and provide any additional information for consideration.

The recipient can request a review via9:

  • email: InfringementNotice [at] afsa.gov.au
  • post: c/- Assistant Director Enforcement, GPO Box 2851, Melbourne Vic 3001

AFSA must consider the following factors before withdrawing, or refusing to withdraw, a notice:

  • the circumstances of the offence;
  • whether there are exceptional circumstances to justify the withdrawal; and
  • any other relevant matter.

AFSA will advise the recipient of the decision in writing within 14 days.

  • If the infringement notice is not withdrawn, the recipient will have to make payment within 28 days of being notified of the decision. If the recipient fails to pay, the matter may be referred for prosecution.
  • If AFSA reviews the evidence and decides the infringement notice should not have been issued, the notice can be withdrawn on a without prejudice basis. If a notice is withdrawn after the penalty has been paid, AFSA will refund it.

6. If payment is not received

AFSA will contact the recipient if payment is not received on time. If necessary, they will ask the recipient to attend an interview to explain the reason/s for non-payment.10

If the person or representative from the corporation claims they did not receive the infringement notice, AFSA will consider the circumstances and, if necessary, re-issue the notice.

6.1 Prosecution

There is no provision in the Act that requires an infringement notice to be issued. The decision-maker has the power to refer the alleged offence for prosecution in the first instance (or following non-payment of an infringement notice).

Subsection 4K(1) of the Crimes Act 1914 states that when an act needs to be done by a particular time, then “the obligation to do that act or thing continues, notwithstanding that the period has expired or the time has passed, until the act or thing is done.”

This means the requirement to comply with the notice is ongoing, even after the due date has passed. A person may be found guilty of an offence each day they refuse or fail to comply with their obligations.

It should be noted that infringement notice regimes will only be effective if they are appropriately enforced. A scheme is not likely to be effective if persons who do not pay the penalty specified in the notice are routinely not prosecuted.11

Annexure A – offences of strict liability

The table below sets out the relevant offences of strict liability in subsection 277B(2) of the Bankruptcy Act 1966, their penalties and the infringement notice penalty.

PROVISION

OFFENCE

RELEVANT
TIME LIMIT 12

COURT
PENALTY

INFRINGEMENT
NOTICE PENALTY

s52(1A)

If the court makes a sequestration order, the creditor who obtained the order must, within two days of the making of the order, give a copy to the Official Receiver.

2 days

5 penalty units

1 penalty unit

s73(1A)

The trustee must, within two working days after receiving the proposal for a composition or arrangement, give a copy of the proposal to the Official Receiver.

2 working days

5 penalty units

1 penalty unit

s74(5A)

The trustee must, before the end of the period of two days from the passing of a special resolution that annulled the bankruptcy, give the Official Receiver a written notice setting out the name and the bankruptcy number of the former bankrupt, and the date of annulment.

2 days

5 penalty units

1 penalty unit

s153A(2)

The trustee must, before the end of the period of two days from the date the bankruptcy is annulled pursuant to section 153A, give the Official Receiver a written notice setting out the name and the bankruptcy number of the former bankrupt, and the date of annulment.

2 days

5 penalty units

1 penalty unit

s153B(3)

The trustee must, before the end of the period of two days beginning on the day the trustee becomes aware of the order, give to the Official Receiver a written certificate setting out the former bankrupt's name and bankruptcy number and the date of annulment.

2 days

5 penalty units

1 penalty unit

S185C(4D)

A person commits an offence of strict liability if (a) the person gives a certificate under para (4C)(b); and (b) before giving the certificate, the person did not (i) make reasonable enquiries about the debtor’s financial situation; or (ii) take reasonable steps to verify the debtor’s financial situation.

N/A

60 penalty units

12 penalty units

S185LE(1A)

A person commits an offence of strict liability if the person is subject to a requirement under (1)(a) keep such accounts, books and records as are necessary to give a full and correct account of the administration of the debt agreement; and (1)(b) if required to do so by the Inspector-General – make those accounts and records available for inspection by the Inspector-General; and fails to comply with the requirement.

N/A

5 penalty units

1 penalty unit

s185LEA(1)

If, during a financial year, the DAA administered a debt agreement, the administrator must within the period of 35 days after the end of that year give the Inspector-General a return, in the approved form, in relation to the administration of that agreement.

35 days

5 penalty units

1 penalty unit

s185ZA(1)

The person administering the deceased estate of a debt agreement administrator must, within 28 days of becoming aware of the death, notify, in writing, the Official Receiver of the administrator’s death.

28 days

5 penalty units

1 penalty unit

s186N(1)

A person who surrenders their registration as a debt agreement administrator must, within seven days of surrendering the registration, return the certificate of registration to the Inspector-General

7 days

5 penalty units

1 penalty unit

s186N(3)

A person whose registration as a debt agreement administrator is cancelled by the Inspector-General must, within seven days of being notified of the cancellation, give their certificate of registration to the Inspector- General.

7 days

5 penalty units

1 penalty unit

s186N(5)

A company, whose registration as a debt agreement administrator is cancelled by the Inspector-General must, within seven days of being notified of the cancellation, give their certificate of registration to the Inspector-General.

7 days

5 penalty units

1 penalty unit

s186N(6A)

A person whose registration as a debt agreement administrator is cancelled by a court order must, within seven days of the cancellation, give their certificate of registration to the Inspector-General.

7 days

5 penalty units

1 penalty unit

s218(2)

The trustee of a personal insolvency agreement (PIA) must, within two days after the execution of the agreement by the debtor and the trustee, file a copy of the agreement with the Official Receiver.

2 days

5 penalty units

1 penalty unit

s224A(1)

The trustee must, before the end of the period of two days beginning on the day of the termination or variation, file a copy of the resolution or special resolution in relation to termination or variation of the PIA with the Official Receiver.

2 days

5 penalty units

1 penalty unit

s224A(2)

If a PIA is varied in accordance with subsection 221A(5), the trustee of the agreement must, before the end of the period of two days beginning on the day of the variation, file a copy of the variation with the Official Receiver.

2 days

5 penalty units

1 penalty unit

s224A(3)

If a PIA is terminated by any event or occurrence of which the deed provides that it is to terminate, the trustee must before the end of the period of two days beginning on the day of the termination notify the Official Receiver in writing of the termination of PIA.

2 days

5 penalty units

1 penalty unit

s224A(4)

If the court makes an order setting aside or terminating a PIA the registered trustee must give written notice of the order to the Official Receiver before the end of the period of two days beginning on the day the trustee becomes aware of the order.

2 days

5 penalty units

1 penalty unit

s224A(5)

If the court makes an order setting aside or terminating a PIA, or a PIA is terminated otherwise than because of an order of the court, the trustee of the PIA must give written notice of the order or the termination to each of the creditors within two working days of the making of the order or the termination, as the case may be.

2 working days

5 penalty units

1 penalty unit

s244(14)

If the court makes an order that the estate be administered under Part XI, the creditor who obtained the order must, before the end of the period of two days beginning on the day the order was made, give a copy of the order to the Official Receiver.

2 days

5 penalty units

1 penalty unit

s245(3)

If the court makes an order that the deceased estate be administered under Part XI, the creditor who obtained the order must, before the end of the period of two days beginning on the day the order was made, give a copy to the Official Receiver.

2 days

5 penalty units

1 penalty unit

s246(1)

The legal personal representative of a deceased person in bankruptcy shall, within 28 days from the day on which he or she is notified of the making of the sequestration order, make out and file with the Official Receiver a statement of affairs form.

28 days

25 penalty units

5 penalty units

s247(3)

If the court makes an order upon hearing the petition, the person administering the estate of the deceased person must, before the end of the period of two days beginning on the day the order was made, give a copy of the order to the Official Receiver.

2 days

5 penalty units

1 penalty unit

s252A(2)

The trustee must, before the end of the period of two days beginning on the date of annulment give the Official Receiver a written certificate setting out the name and the administration number of the deceased estate and the date of annulment.

2 days

5 penalty units

1 penalty unit

s30-1(5)

A person who is a registered trustee during all or part of a trustee return year for the person must, within 1 month after the end of that year, lodge with the Inspector-General a return that conforms with subsection (3).

1 month

5 penalty units

1 penalty unit

s35-5(2)

A registered trustee must lodge with the Inspector-General a notice, in the approved form, if any of the following events occur:

(a) information included in an annual trustee return, or in an annual administration return, prepared by or on behalf of the trustee is or becomes inaccurate in a material particular;

(b) any other event prescribed.

The notice must be lodged within 10 business days after the registered trustee could reasonably be expected to be aware that the event has occurred.

10 days

5 penalty units

1 penalty unit

s65-40(3)

The trustee of a regulated debtor’s estate must deposit in a bank:

(a) the bills of exchange; and

(b) the promissory notes; and

(c) any other negotiable instrument or security;

payable to the regulated debtor or the trustee as soon as practicable after they are received by the trustee.

As soon as practicable

5 penalty units

1 penalty unit

s70-10(4)

The trustee of a regulated debtor’s estate must keep proper books in which the trustee must cause to be made:

(a) entries or minutes of proceedings at meetings relating to the administration of the estate; and

(b) such other entries as are necessary to give a complete and correct record of the trustee’s administration of the estate.

The trustee must:

(a) ensure that the books are available at the trustee’s office for inspection; and

(b) permit a creditor, or another person acting on the creditor’s behalf, to inspect the books at all reasonable times.

N/A

5 penalty units

1 penalty unit

s70-11(2)

If the trustee of a regulated debtor’s estate carries on a business previously carried on by the regulated debtor, the trustee must:

(a) keep such books as are usually kept in relation to the carrying on of a business of that kind; and

(b) permit a creditor, or another person acting on the creditor’s behalf, to inspect the books at all reasonable times.

N/A

5 penalty units

1 penalty unit

s70-25(4)

The trustee of the estate must give to the person carrying out the audit such books, information and assistance as the person reasonably requires.

N/A

5 penalty units

1 penalty unit

Annexure B – infringement notice process

IN - Infringement notice
IG - Inspector-General
NFA - No further action
CDPP - Commonwealth Director of Public Prosecutions

Annexure C – sample infringement notice

Sample infringement notice - page 1

Sample infringement notice - page 2

Footnotes

[1] See Section 6.1 of the Criminal Code Act 1995.
[2] See section 4B(3) of the Crimes Act 1914.
[3]Reasonable grounds to believe require a higher standard of knowledge than reasonable grounds to suspect.
[4]See section 9.2 of the Criminal Code Act 1995. 
[5] See Regulation 14.03(2).
[6] See Regulation 14.14.
[7] See Regulation 14.09(2).
[8] See Regulation 14.10
[9] Section 9 of the Electronic Transactions Act 1966 (Cth) provides that where a law of the Commonwealth requires information to be given in writing, electronic communications (ie email) is deemed to comply.
[10] See Division 3 of Part 1C of the Crimes Act 1914.
[11] Attorney-General’s Department, “A guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers”, December 2007.
[12] See section 2: Infringement notice offences