Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698751337966.pdf (New Zealand)
Reprint as at 1 April 2010 Insolvency Act 2006 Public Act Date of assent Commencement 2006 No 55 7 November 2006 see section 2 Contents Title Commencement Part 1 Interpretation and scope Interpretation Rights and powers under other Acts not affected Act binds the Crown Corporations and other entities not subject to Act Part 2 Nature of bankruptcy, and process of being made bankrupt Subpart 1—Bankruptcy and its alternatives Nature of bankruptcy Alternatives to bankruptcy Page 20 20 20 22 22 23 23 23 Note Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.
A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This Act is administered by the Ministry of Economic Development.
1 Insolvency Act 2006 Reprinted as at 1 April 2010 Subpart 2—Process of being made bankrupt 9 Introduction to subpart 2 Adjudication Adjudication Adjudication by court Adjudication on debtor’s initiative Court adjudication on creditor’s application When creditor may apply for debtor’s adjudication Application by secured creditor Court’s permission required for withdrawal of application Acts of bankruptcy Requirement of act of bankruptcy Failure to comply with bankruptcy notice Disposition of property to trustee for benefit of creditors Fraud or intent to prefer a creditor Departure from New Zealand Avoidance of creditors Notice of suspension of debts Admission to creditors of insolvency Possession under execution process Writ of sale Return that sufficient goods not found under execution process Removal or concealment of property Unsatisfied judgment for non-payment of trust money Bankruptcy notice Form of bankruptcy notice Effect of overstatement of amount owing Effect on execution process of filing creditor’s application Creditor’s execution process must not be issued or continued Execution processes by other creditors Execution process issued by another court No restriction on execution process if application for adjudication withdrawn or dismissed Meaning of execution process Reprinted as at 1 April 2010 Insolvency Act 2006 Court’s options when hearing creditor’s application Court may adjudicate debtor bankrupt Court may refuse adjudication Court may halt application Orders if more than 1 application Orders if more than 1 debtor Order that disposition or proposal not act of bankruptcy Halt or refusal of application when judgment under appeal Court may halt application while underlying debt determined Substitution of creditor Debtor’s application When debtor may file application Debtor must first file statement of affairs Debtor automatically
 adjudicated bankrupt Debtors’ joint application Steps for filing debtor’s application Subpart 3—Appointment of receiver Power of court to appoint Assignee as receiver Application for appointment of Assignee as receiver Additional orders after receiver’s appointment Appointment of Assignee as receiver and manager must be advertised Execution process halted Effect when execution process halted Subpart 4—Adjudication Adjudication Bankruptcy commences on adjudication Date of adjudication Date and time of adjudication must be recorded Registrar must notify Assignee of adjudication by court Official Assignee must nominate Assignee Presumption that act or transaction entered into or effected after adjudication Adjudication final and binding Public register of discharged and undischarged bankrupts 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 Subpart 5—What happens on adjudication 63 Debtor adjudicated bankrupt called the bankrupt 33 33 34 34 34 34 35 35 36 36 36 36 37 37 37 38 38 38 38 39 39 39 39 39 40 40 40 40 3 Insolvency Act 2006 Reprinted as at 1 April 2010 64 Outline of what happens on adjudication Assignee must advertise adjudication Assignee must advertise adjudication Order that Assignee must not advertise pending appeal or application for annulment Bankrupt’s statement of affairs Bankrupt must file statement of affairs with Assignee Notice that bankrupt must file statement of affairs Time for filing statement of affairs Bankrupt may file additional or amended statements or answers Assignee must call meeting of creditors Assignee must call meeting of creditors Time when meeting must be held Assignee may dispense with first creditors’ meeting Notice that first creditors’ meeting should not be called Documents to be sent with notice of meeting 65 66 67 68 69 70 71 72 73 74 75 Court proceedings are halted 76 Effect of adjudication on court proceedings Execution process 77 Execution process must not be begun or continued after
 adjudication advertised Bankrupt’s death 78 Effect of bankrupt’s death after adjudication Subpart 6—Role of creditors 79 Overview of creditors’ role in bankruptcy Creditors’ meetings Types of creditors’ meetings Subsequent meetings Meeting and resolution not defective for lack of notice Conduct of creditors’ meetings Chairperson Chairperson may adjourn meeting Assignee must report to meeting Attending creditors’ meeting Reprinted as at 1 April 2010 Insolvency Act 2006 87 88 89 90 91 92 93 94 95 96 97 98 99 Bankrupt may be required to attend and be questioned Attendance by non-creditors Minutes and record of meeting Number of persons for valid meeting Who may represent creditor or bankrupt Voting at meetings Postal and electronic votes Who may vote at creditors’ meeting When secured creditor may vote When creditor under bill of exchange or promissory note may vote Person disqualified from voting through preferential effect Creditor of partner Creditors may appoint expert or committee to assist Assignee 100 Creditor’s right to inspect documents Documents Part 3 Dealing with bankrupt and bankrupt’s property Subpart 1—Status of bankrupt’s property General 101 102 103 104 105 106 107 Status of bankrupt’s property on adjudication Status of property acquired during bankruptcy Property vests in replacement Assignee Property held in trust by bankrupt Effect of other laws Court may order that money due to bankrupt is assigned to Assignee Application of section 274 to payments by bankrupt or assignments by court Bankrupt’s property subject to execution process 108 When execution creditor may retain execution proceeds 109 110 Effect of notice to sheriff of adjudication Sheriff must retain proceeds of execution for 10 working days Purchaser under sale by sheriff acquires good title Court may set aside rights conferred on Assignee 111 112 Validity of property transactions with bankrupt 113
 Transaction in good faith and for value after adjudication 47 47 47 48 48 49 49 49 50 50 50 51 51 51 52 52 53 53 53 53 53 54 54 55 56 56 56 5 Insolvency Act 2006 Reprinted as at 1 April 2010 Executions and attachments in good faith 114 115 When execution or attachment completed for purposes 116 117 118 119 120 121 122 123 124 125 126 127 128 of section 108 or 114 Assignee’s interest in property passes Disclaimer of onerous property Assignee may disclaim onerous property Effect of disclaimer Position of person who suffers loss as result of disclaimer Assignee may be required to elect whether to disclaim Liability for rentcharge on bankrupt’s land after disclaimer Land subject to mortgage Transmission of interest in land Assignee cannot claim interest in land if bankrupt remains in possession until discharge Shares and other securities Assignee may transfer shares and other securities Assignee may disclaim liability under shares Assignee may be required to elect whether to disclaim liability under shares Transfer of shares after disclaimer Company may prove for unpaid calls Consumer goods on hire purchase 129 Meaning of hire purchase terms used in this subpart 130 131 Restrictions on creditor dealing with consumer goods Assignee’s powers in relation to hire-purchase consumer goods Creditor in possession of consumer goods may prove in bankruptcy if Assignee has not exercised powers Creditor may assign consumer goods to Assignee Second bankruptcy Status of bankrupt’s property on second bankruptcy Effect of notice to Assignee of application for adjudication Persons jointly adjudicated bankrupt Separate accounts How joint and separate estates must be applied Subpart 2—Duties of bankrupt 132 133 134 135 136 137 138 General duty of bankrupt 6 57 57 57 57 58 58 59 59 60 60 61 61 62 62 63 63 63 64 64 65 65 66 66 67 67 Reprinted as at 1 April 2010 Insolvency Act 2006 139 140 141 142 143 144 145 146 Duties in relation to property Bankrupt must disclose property acquired before
 discharge Bankrupt must deliver property to Assignee on demand Bankrupt must take all steps required in relation to property and distribution of proceeds to creditors Duties to provide information Bankrupt must give Assignee accounting records and other documents Bankrupt must give Assignee information relating to property Bankrupt must give Assignee information relating to income and expenditure Bankrupt must notify Assignee of change in personal information Bankrupt must give Assignee financial information Subpart 3—Control over bankrupt during bankruptcy 147 Bankrupt may be required to contribute to payment of debts Onus of proof if bankrupt defaults in making payment 148 149 Prohibition of bankrupt entering business 150 Warrant to search for and seize bankrupt’s property 151 152 Seizure of bankrupt’s property Bankrupt must vacate land or buildings if required to do so Bankrupt’s right to inspect documents 153 154 155 156 157 158 159 Restrictions on bankrupt dealing with property No power to recover property or give release or discharge No steps to defeat beneficial interest Bankrupt’s bank accounts Bank must notify Assignee of bankrupt’s account Assignee may require bank to search account records Subpart 4—Provision for bankrupt during bankruptcy Provision for bankrupt Bankrupt may retain certain assets Bankrupt may retain certain assets with consent of creditors 67 67 68 68 69 69 69 69 70 71 71 71 72 73 73 74 74 74 75 75 76 7 Insolvency Act 2006 Reprinted as at 1 April 2010 160 161 162 163 164 165 166 167 168 169 170 171 172 Retention of assets does not affect rights under charge or hire purchase agreement Retention provisions do not confer rights to other assets Relative or dependant may exercise bankrupt’s right to retain assets Assignee may make allowance to bankrupt Assignee may allow bankrupt to retain money Subpart 5—Powers of Assignee and court to examine bankrupt and others Examination of persons summoned by Assignee Assignee may summon bankrupt and
 others to be examined Conduct of examination of person summoned by Assignee Expenses of person summoned by Assignee Creditor may inspect record of examination Report of examination must not be published unless court consents Examination provisions also apply when Assignee appointed receiver and manager of debtor’s property Assignee may obtain documents No lien over bankrupt’s documents and other records Bankrupt’s public examination 173 Court must hold public examination if Assignee or creditors require Notice of examination 174 Time for holding examination 175 Assignee must file report before examination 176 Conduct of examination 177 178 Record of examination 179 When examination ends 180 181 Bankrupt’s failure to attend examination Bankrupt’s expenses in attending examination Investigation of company controlled by bankrupt and associate 182 Assignee may examine company documents, personnel, and shareholders 183 Meaning of associate Privilege and representation of persons examined 184 No privilege against self-incrimination 8 76 76 76 77 77 77 78 78 79 79 79 79 80 80 80 81 81 81 82 82 82 82 83 83 84 Reprinted as at 1 April 2010 Insolvency Act 2006 185 186 187 188 189 Statement made by person examined or questioned not generally admissible in criminal proceedings against that person Representation Subpart 6—Status of bankrupt’s contracts Bankrupt’s contracts entered into before adjudication Assignee may continue or disclaim bankrupt’s contract Contract terminated by other contracting party Transaction with bankrupt in ignorance of adjudication Payment of money or delivery of property is good discharge 190 Bankrupt’s co-contractor may sue and be sued Joint contractual liability 191 Lawyers’ costs Lawyers’ costs Subpart 7—Irregular transactions before adjudication 192 193 Overview of subpart 7 Extension of 2 years and 6 months periods Insolvent transactions Insolvent transaction may be cancelled 194 195 Meaning of insolvent transaction 196 197 When series of
 transactions must be regarded as single Insolvent transaction presumed transaction Insolvent charges 198 199 200 201 202 203 Insolvent charge may be cancelled Charge for new consideration or charge in substitution not affected Presumption that bankrupt unable to pay due debts Charge for unpaid purchase price given after sale of property Appropriation of payments by bankrupt to secured creditor Charge agreed before specified period may not be cancelled 84 84 84 85 85 86 86 86 87 87 87 88 88 89 89 89 90 90 91 9 Insolvency Act 2006 Reprinted as at 1 April 2010 Insolvent gifts 204 205 206 207 208 209 210 Insolvent gift within 2 years may be cancelled Insolvent gift within 2 to 5 years may be cancelled if bankrupt unable to pay debts Procedure for cancelling irregular transactions Procedure for cancelling irregular transactions Court may order retransfer of property or payment of value Limits on recovery Recovery by appointee Land Transfer Act 1952 does not limit sections 206 to 209 Transactions at undervalue Assignee may recover difference in value 211 212 When Assignee may recover difference 213 214 215 216 217 218 219 220 221 222 Bankrupt’s contribution to another person’s property Court may order recipient to pay value to Assignee Court’s powers in relation to bankrupt’s contribution to recipient’s property How Assignee must use repayment of bankrupt’s contribution to property Land Transfer Act 1952 does not limit sections 213 to 215 Subpart 8—Role and powers of Assignee Powers of Assignee Assignee’s general powers Assignee must not sell bankrupt’s property before first creditors’ meeting Title of purchaser from Assignee Obligation to bank and power to invest money Assignee may assign right to sue under this Act Proceedings by Assignee when bankrupt is partner in business partnership 223 Means of giving notice to creditors Notice by Assignee Assignee’s decisions Assignee’s discretion Assignee may apply for directions by court Appeal from Assignee’s decision 224 225
 226 10 91 91 91 93 93 94 94 94 95 95 96 97 97 97 98 98 98 98 99 99 100 100 100 Reprinted as at 1 April 2010 Insolvency Act 2006 Assignee’s accounting records 227 228 229 230 Assignee must keep proper accounting records Assignee’s final statement of receipts and payments Auditor-General may audit Assignee’s accounts Assignee may return or destroy accounting records Subpart 9—Creditors’ claims Provable debts 231 Meaning of provable debt 232 What debts are provable debts Procedure for proving debt 233 Creditor must submit creditor’s claim form 234 235 236 237 238 239 240 Role of Assignee in examining creditor’s claim form Assignee must examine creditor’s claim form Assignee must give creditor notice of grounds of rejection Assignee’s power to obtain evidence of debt Notice to Assignee to admit or reject creditor’s claim Court may cancel creditor’s claim Court may reverse or modify Assignee’s decision rejecting creditor’s claim Parties to application to court in relation to creditor’s claim 101 101 102 102 102 102 103 104 104 104 105 105 105 106 241 Which court may hear application in relation to creditor’s 106 242 243 244 245 246 247 248 249 250 claim Court may make order as to costs Secured creditors Secured creditor’s options in relation to property subject to charge Assignee may require secured creditor to choose option Assignee not required to act in relation to certain property subject to charge Realisation of property subject to security Valuation of charge and proof for balance due False claim by secured creditor Assignee’s powers when secured creditor values property subject to charge and proves for balance Secured creditor who surrenders charge may withdraw surrender or submit new creditor’s claim 106 107 107 108 108 108 109 109 110 11 Insolvency Act 2006 Reprinted as at 1 April 2010 251 252 253 Creditors’ claims subject to uncertainty Assignee may estimate amount of uncertain creditor’s claim Application to court to determine amount of uncertain creditor’s
 claim Creditors’ claims payable after adjudication Creditor’s claim payable 6 months or more after adjudication 254 Mutual credit and set-off Set-off Set-off under netting agreement Definitions relating to set-off under netting agreement Application of set-off under netting agreement Calculation of netted balance 255 256 257 258 Mutuality required for transactions under bilateral netting agreements 110 110 111 111 112 113 114 114 259 When mutuality required for transactions under recognised 114 260 261 262 263 264 265 266 multilateral netting agreements Application of set-off under section 254 to transaction subject to netting agreements Transactions under netting agreement and insolvent transactions Set-off under netting agreement not affected by notice under section 206(2) Disclaimer of onerous property and termination of netting agreement not permitted Interest Pre-adjudication interest Post-adjudication interest at prescribed rate if surplus remains Additional post-adjudication interest on contract or judgment debt if surplus remains 267 Meaning of prescribed rate Miscellaneous provisions relating to creditors’ claims Creditor must deduct trade discounts Proof when charge void Judgment creditor may prove for costs Company may prove for unpaid calls 268 269 270 271 12 115 115 115 116 116 116 117 117 118 118 118 118 Reprinted as at 1 April 2010 Insolvency Act 2006 272 When guarantor for bankrupt may prove 119 Subpart 10—Distribution of assets 273 Priority of payments for distribution of bankrupt’s assets 119 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 Preferential claims Priority of payments to preferential creditors Conditions to priority of payments to preferential creditors Provisions concerning preferential payments to employees Subrogation of persons if payment has been made Priority given to person who distrains on goods Creditors to have priority over creditors of joint bankrupt Payments to general creditors and to bankrupt Payment of
 remaining money to general creditors Payment of surplus to bankrupt Undistributed money paid to Public Trust Definition of undistributed money Undistributed money to be paid to Public Trust Public Trust to hold undistributed money Public Trust to pay undistributed money to bankruptcy surplus account Application of undistributed money held in bankruptcy surplus account Requisition of Minister required for payment under section 286(c) Approval of Official Assignee required for payment under section 286(d) 289 Matters concerning bankruptcy surplus account Part 4 End of bankruptcy Subpart 1—Discharge from bankruptcy Automatic discharge from bankruptcy 290 291 292 293 Automatic discharge 3 years after bankrupt files statement of affairs Effect of automatic discharge Objection to automatic discharge Objection may be withdrawn Application for discharge from bankruptcy 294 Bankrupt may apply for discharge 120 123 124 125 126 126 126 127 127 127 127 128 128 129 129 129 130 130 130 131 131 13 Insolvency Act 2006 Reprinted as at 1 April 2010 Examination concerning discharge from bankruptcy Assignee’s report 295 When bankrupt must be examined concerning discharge 296 297 When creditor must give notice of opposition to discharge 298 299 Court may grant or refuse discharge Court may restrict bankrupt from engaging in business after discharge Court may reverse order of discharge Grounds for reversing discharge Effect of reversal of discharge Bankrupt may apply for absolute discharge if conditions of discharge too onerous Debts from which bankrupt is released on discharge Discharge conclusive evidence of bankruptcy Discharge does not release partners and others Discharged bankrupt must assist Assignee Information regarding bankrupt’s discharge must be contained in public register maintained under section 62 300 301 302 303 304 305 306 307 308 Subpart 2—Annulment Court may annul adjudication 309 310 When Assignee may annul adjudication 311 Effect of annulment Part 5 Compositions,
 proposals, summary instalment orders, and no asset procedure Subpart 1—Composition during bankruptcy Creditors may accept composition by passing preliminary resolution Confirming resolution Compositions with members of partnership Court must approve composition Procedure for court approval of composition Deed of composition Effect of deed Bankrupt remains liable for unpaid balances of certain debts Deadlines for steps to approve composition and execute deed Procedure following court approval of composition Enforcement of composition Reprinted as at 1 April 2010 Insolvency Act 2006 323 324 Court’s exclusive jurisdiction Law and practice in bankruptcy applies to deed Subpart 2—Proposals Insolvent may make proposal Form of proposal Proposal must be filed in court Provisional trustee Provisional trustee must call meeting of creditors Procedure at meeting of creditors 325 Meaning of debt, etc 326 327 328 329 330 331 332 Who may represent creditors Court must approve proposal 333 Effect of court approval 334 Creditor must not take enforcement steps without court’s 335 permission Duty of insolvent Duties of trustee Trustee must file 6-monthly summary of receipts and payments Cancellation or variation of proposal 336 337 338 339 Subpart 3—Summary instalment orders 340 Summary instalment order 341 Who may apply for order Form of application 342 Assignee may make summary instalment order 343 Additional orders 344 Appointment of supervisor 345 Role of supervisor 346 Assignee may require supervisor or past supervisor to 347 provide documents Termination of appointment for failure to supervise adequately Period of instalments Variation or discharge of order Effect of order Proceedings against debtor Supervisor must give notice of summary instalment order to creditors Public register of debtors subject to current summary
 instalment order 349 350 351 352 353 348 354 355 Meaning of current summary instalment order Insolvency Act 2006 Reprinted as at 1 April 2010 356 357 358 359 360 Creditor’s claim Payment of debtor’s earnings to supervisor Distribution of money paid by debtor Default by debtor Offence of obtaining credit Subpart 4—No asset procedure 361 Introduction to this subpart Entry to no asset procedure 362 363 364 365 366 Application for entry to no asset procedure Criteria for entry to no asset procedure Debtor disqualified from entry to no asset procedure in certain cases Assignee must notify creditors Restrictions on debtor obtaining credit after application made 367 When debtor admitted to no asset procedure 368 Public register of persons admitted to no asset procedure Effect of entry to no asset procedure 369 370 371 Creditors may not enforce debts Debtor’s duties after entry to no asset procedure Offence of obtaining credit Termination and discharge Termination 372 373 When Assignee may terminate Assignee may apply for preservation order 374 Effect of termination 375 Creditor may apply to Assignee for termination 376 377 Time of discharge 377A Effect of discharge 377B Discharge does not release partners and others Part 6 Insolvent deceased estates 378 Interpretation Application and order that estate be administered under this Part Court may order that estate be administered under this Part Application by administrator, etc Reprinted as at 1 April 2010 Insolvency Act 2006 381 Application by creditor or beneficiary for order under this Part Notice of application by creditor or beneficiary 382 383 When Registrar may hear application 384 385 Costs of application Court may order administration by Assignee or Public Trust
 Certificate filed by Public Trust or Māori Trustee has effect as application and order 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 Effect of order that estate be administered under this Part Estate vests in appointee Appointee must realise, administer, and distribute estate Entitlement of surviving spouse to household furniture and effects Appointee may make allowance to surviving spouse Administration of estate under this Part Sections 392 to 398 apply in respect of estate administered under this Part Appointee’s authority, powers, and functions Distribution of estate Payment of surplus Creditor’s notice to administrator Appointee may act in relation to deceased’s irregular transactions Appointee may cancel execution Administrator’s acts valid before notice Part 7 Offences and miscellaneous provisions Subpart 1—The Assignee Appointment of Official Assignee for New Zealand and others Assignee may act on behalf of another Assignee Assignee’s use of name, seal, etc Assignee’s additional rights and remedies Disqualification of Assignee Vacation of office by Assignee Protection of Assignee Assignee’s remuneration Rates of Assignee’s remuneration Assignee must apply for order of release 168 169 169 169 169 170 171 171 172 172 172 173 173 173 174 174 175 175 175 176 176 176 177 177 177 177 178 178 17 Insolvency Act 2006 Reprinted as at 1 April 2010 409 410 Effect of order Subsequent order of release Subpart 2—The court Jurisdiction and powers of court 411 412 Court may look at real nature of transaction 413 When Registrar or District Court Judge may exercise 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 powers and jurisdiction of court Rehearings and appeals Proceedings not halted pending appeal Suspension of adjudication pending appeal Court may extend time Defects in proceedings Subpart 3—Offences by bankrupt Indictable offences Offences in relation to debts Offences in relation to property Offence in
 relation to written statement to creditor, etc Offence in relation to documents, etc Offence in relation to fictitious losses or expenses Offences in relation to credit, etc Offences in relation to obtaining consent of creditors Offence in relation to leaving New Zealand Defence of absence of intent Penalties for indictable offences by bankrupt Offences in relation to record of transactions Failure to keep and preserve proper record of transactions Failure to keep proper records with intent to conceal Penalties for offences relating to records 429 430 431 432 When bankrupt deemed not to have kept or preserved proper record Summary offences Summary offences Defences to summary offences of obtaining credit Penalty for summary offences by bankrupt Offences in relation to management of companies Offence by bankrupt in relation to management of companies Reprinted as at 1 April 2010 Insolvency Act 2006 437 438 439 440 441 442 443 444 445 446 Penalties for offence in relation to management of companies Assignee’s discretion to prosecute Assignee may prosecute if reasonable grounds certified by Crown Solicitor Assignee has immunity for prosecution if certificate given by Crown Solicitor Subpart 4—Miscellaneous provisions False or misleading statements or refusal to answer questions Regulations Rules Repeal and revocation Transitional provisions Consequential amendments to other enactments Subpart 5—Public registers Subpart applies to public register maintained under section 62, 354 or 368 447 When public register must be accessible 448 449 449A Information kept indefinitely on public register after Purposes of public registers General information that must be held in public registers 450 multiple insolvency events Restricted information that may be held in public register maintained under section 62 451 When Assignee may omit, remove,
 restrict access to, or amend, information contained in public registers Search of public registers Search criteria Search purposes Information contained in public registers may be used for statistical or research purposes 452 453 454 455 456 When search breaches information privacy principle 457 Crown and Assignee not liable for act or omission Schedule 1 Assignee’s general powers Schedule 2 Consequential amendments to other enactments 189 190 190 190 190 192 194 194 194 195 195 195 196 198 198 199 199 199 200 201 201 201 202 205 19 Insolvency Act 2006 Reprinted as at 1 April 2010 Title This Act is the Insolvency Act 2006.
Commencement This Act comes into force on a date to be appointed by the Governor-General by Order in Council; and 1 or more orders may be made bringing different provisions into force on dif- ferent dates.

Section 2: Insolvency Act 2006 brought into force, on 3 December 2007, by the Insolvency Act 2006 Commencement Order 2007 (SR 2007/332).
Part 1 Interpretation and scope Interpretation In this Part and Parts 2 to 7, unless the context otherwise re- quires,— Assignee or Official Assignee means the Official Assignee for New Zealand, the Deputy Official Assignee for New Zealand, and any other Official Assignee or Deputy Assignee appointed under this Act bankrupt means a person who has been adjudicated bankrupt (see section 10) charge includes a right or interest in relation to property owned by a debtor, by virtue of which a creditor of the debtor is entitled to claim payment in priority to other creditors; but does not include a charge under a charging order issued by a court in favour of a judgment creditor company means any company within the meaning of the Companies Act 1993; and includes— (a) a building society within the meaning of the Building Societies Act 1965: a society incorporated under the Incorporated Societies Act 1908: a registered society within the meaning of the Industrial and Provident Societies Act 1908: a society incorporated or registered overseas that is sim- ilar to any society in paragraphs (a) to (c) (b) (c) (d) court means the High Court s 1 1 2 3 20 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 1 s 3 current summary instalment order has the meaning set out in section 355 document means a document in any form; and includes— (a) (b) any writing on any material; and information recorded or stored by means of a tape recorder, computer, or other device; and material sub- sequently derived from information so recorded or stored; and a book, graph, or drawing; and a photograph, film, negative, tape, or other device in which 1 or more visual images are embodied so as to be capable (with or without the aid of equipment) of being reproduced (c) (d) goods has the same meaning as in section 16(1) of the Personal Property Securities Act 1999 Judge means a Judge of the High Court lawyer has the same meaning as in section 6 of the Lawyers and Conveyancers Act 2006 Ministry means the department of State that, with the author- ity
 of the Prime Minister, is for the time being responsible for the administration of this Act ordinary resolution means a resolution of creditors passed in accordance with section 92(1)(a) overseas company means a company that is incorporated out- side New Zealand prescribed means prescribed by this Act or by regulations made under this Act or by rules property means property of every kind, whether tangible or intangible, real or personal, corporeal or incorporeal, and in- cludes rights, interests, and claims of every kind in relation to property however they arise provable debt has the meaning given to it in section 231(1) Registrar means a Registrar of the court; and includes a Deputy Registrar relative, in relation to any person (A), means— (a) (b) (c) A’s parent, spouse, child, brother, or sister; or the parent, child, brother, or sister of A’s spouse; or a nominee or trustee for any of them 21 Part 1 s 4 Insolvency Act 2006 Reprinted as at 1 April 2010 rules means rules for the time being in force under this Act; and includes forms prescribed by the rules secured creditor means a person entitled to a charge on or over property owned by a debtor shares includes stock sheriff includes any officer who undertakes the execution or process of any court special resolution means a resolution of creditors passed in accordance with section 92(1)(b) spouse, in relation to a person (A), includes a person with whom A has a de facto relationship (whether that person is of the same or a different sex as A) and a civil union partner student loan balance means a loan balance under the stu- dent loan scheme established by the Student Loan Scheme Act 1992 supervisor means a person who is appointed under sec- tion 345.
Compare: 1967 No 54 s 2 Rights and powers under other Acts not affected This Act does not affect— (a) a local authority’s rights under any statute relating to rates and recovery of rates— (i) (ii) to obtain a judgment of unpaid rates: to enforce payment of rates by selling or leasing the land for which the rates are payable: the provisions of the Joint Family Homes Act 1964: except where this Act expressly provides, a secured creditor’s power to realise or otherwise deal with the charge as if this Act had not been passed.
(b) (c) Compare: 1967 No 54 s 3(1), (2), (3) Act binds the Crown This Act binds the Crown.

Compare: 1967 No 54 s 4 4 5 22 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 8 6 7 (1) Corporations and other entities not subject to Act A corporation, association, or company incorporated or regis- tered under any Act must not— (a) be adjudicated bankrupt: (b) make a proposal to its creditors: (c) be the subject of a summary instalment order under this Act: be admitted to the no asset procedure.
(d) Compare: 1967 No 54 s 168 Part 2 Nature of bankruptcy, and process of being made bankrupt Subpart 1—Bankruptcy and its alternatives Nature of bankruptcy Bankruptcy affects the legal status of a person and has import- ant consequences.

These include— (a) (b) the bankrupt’s property vests in the Official Assignee: the bankrupt is limited in the business activities he or she can undertake: the Official Assignee may be entitled to recover assets that the bankrupt has transferred before bankruptcy.
(c) (2) This section is intended only as a guide to the consequences of bankruptcy.

Alternatives to bankruptcy 8 (1) A debtor who is insolvent may have an alternative to bankruptcy, such as— (a) making a proposal to creditors (see subpart 2 of Part 5); (b) or paying creditors in instalments under a summary instal- ment order (see subpart 3 of Part 5); or entry to the no asset procedure (see subpart 4 of Part 5).

(c) This section is intended only as a guide to the alternatives to bankruptcy.
(2) 23 Part 2 s 9 Insolvency Act 2006 Reprinted as at 1 April 2010 Subpart 2—Process of being made bankrupt 9 (1) (2) Introduction to subpart 2 This subpart describes how a person is adjudicated bankrupt.

In this subpart, the person who is adjudicated bankrupt is called the debtor.

Adjudication Adjudication 10 (1) Adjudication occurs when a debtor is adjudicated bankrupt.
(2) A debtor is adjudicated bankrupt if either— (a) (b) a creditor of the debtor applies to the court for an order of adjudication, and the court makes the order; or the debtor files an application with the Assignee for ad- judication.

Adjudication by court 11 (1) A court may adjudicate the debtor bankrupt if— (a) a creditor of the debtor has applied under section 13 for the debtor’s adjudication; and (b) the debtor has committed an act of bankruptcy.
The court’s options in dealing with a creditor’s application are set out in sections 36 to 44.

(2) (3) What is an act of bankruptcy is set out in sections 17 to 28.

Adjudication on debtor’s initiative 12 (1) A debtor may be adjudicated bankrupt by filing an application (2) (3) for adjudication with the Assignee.

The requirements for a debtor’s application are set out in sec- tions 45 and 46.

The procedure for filing a debtor’s application is set out in section 49.
Court adjudication on creditor’s application 13 When creditor may apply for debtor’s adjudication A creditor may apply for a debtor to be adjudicated bankrupt if— 24 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 17 (a) (b) (c) (d) the debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the applica- tion; and the debt is a certain amount; and the debt is payable either immediately or at a date in the future that is certain.
Compare: 1967 No 54 s 23 14 15 Application by secured creditor The court must not make an order of adjudication on the appli- cation of a secured creditor unless the creditor has established that the amount of the debt exceeds the value of the charge by at least $1,000.

Compare: 1967 No 54 s 25 Court’s permission required for withdrawal of application A creditor may only withdraw an application for adjudication with the permission of the court.
Compare: 1967 No 54 s 26(10) Acts of bankruptcy Requirement of act of bankruptcy 16 (1) A debtor must not be adjudicated bankrupt on a creditor’s ap- plication unless the debtor has committed an act of bankruptcy within the period of 3 months before the creditor files the ap- plication.

The acts of bankruptcy are set out in sections 17 to 28.
(2) Failure to comply with bankruptcy notice 17 (1) A debtor commits an act of bankruptcy if— (a) (b) a creditor has obtained a final judgment or a final order against the debtor for any amount; and execution of the judgment or order has not been halted by a court; and 25 Part 2 s 18 Insolvency Act 2006 Reprinted as at 1 April 2010 (c) (d) the debtor has been served with a bankruptcy notice; and the debtor has not, within the time limit specified in subsection (4),— (i) (ii) complied with the requirements of the notice; or satisfied the court that he or she has a cross claim against the creditor.
(2) (3) (4) (5) (6) (7) The form that the bankruptcy notice must take is set out in section 29.

The debtor must have been served with the bankruptcy notice in New Zealand, unless the court gave permission for the ser- vice of the notice on the debtor outside New Zealand.
The time limit referred to in subsection (1)(d) is,— (a) if the debtor is served with the bankruptcy notice in New Zealand, 10 working days after service; or if the debtor is served outside New Zealand, the time specified in the order of the court permitting service outside New Zealand.

(b) In this section, a creditor who has obtained a final judgment or a final order includes a person who is for the time being entitled to enforce a final judgment or final order.
In this section, if a court has given permission for enforcing an arbitration award that the debtor pay money to the creditor,— final order includes the arbitration award; and (a) proceedings includes the arbitration proceedings in (b) which the award was made.
In subsection (1)(d)(ii), cross claim means a counterclaim, set-off, or cross demand that— (a) is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was obtained.
(b) Compare: 1967 No 54 s 19(1)(d), (2) Disposition of property to trustee for benefit of creditors 18 (1) A debtor commits an act of bankruptcy if, in New Zealand or elsewhere, the debtor disposes of all, or substantially all, of 26 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 22 (2) 19 20 21 22 the debtor’s property to a trustee for the benefit of all or any of the debtor’s creditors.

This section is subject to section 41(3)(a).


Compare: 1967 No 54 s 19(1)(a) Fraud or intent to prefer a creditor A debtor commits an act of bankruptcy if the debtor takes any of the following steps fraudulently or with an intent to give any creditor an advantage over other creditors: (a) (b) disposes of his or her property, or part of it: creates a charge on his or her property or gives any se- curity in it: (c) makes any payment: (d) incurs any obligation.
Compare: 1967 No 54 s 19(1)(b) Departure from New Zealand A debtor commits an act of bankruptcy if the debtor takes any of the following steps with intent to defeat or delay his or her creditors: (a) departs, attempts to depart, or prepares to depart, from New Zealand: if the debtor is already outside New Zealand, remains there.
(b) Compare: 1967 No 54 s 19(1)(c) Avoidance of creditors A debtor commits an act of bankruptcy if the debtor, with in- tent to defeat or delay his or her creditors, avoids them by, for example, leaving or keeping away from the debtor’s home, or by staying within that home.
Compare: 1967 No 54 s 19(1)(c) Notice of suspension of debts A debtor commits an act of bankruptcy if the debtor notifies any of the debtor’s creditors that the debtor has suspended, or is about to suspend, payment of the debtor’s debts.
Compare: 1967 No 54 s 19(1)(e) 27 Part 2 s 23 Insolvency Act 2006 Reprinted as at 1 April 2010 Admission to creditors of insolvency 23 (1) A debtor commits an act of bankruptcy if the debtor admits at a meeting of creditors that he or she is insolvent and— (a) a majority of the creditors present at the meeting re- quires the debtor to file an application for adjudication; or the debtor agrees to file an application for adjudication and does not do so within 2 working days after the meet- ing.
(b) (2) In subsection (1)(a), majority means a majority by number of creditors present and the value of their combined debts.
Compare: 1967 No 54 s 19(1)(f) 24 Possession under execution process (1) A debtor commits an act of bankruptcy if— (2) (3) (a) (c) (b) an execution process has been issued against the debtor or property of the debtor; and property of the debtor has been taken into possession under the execution process; and the judgment or order for which the execution process has been issued is not satisfied within 5 working days after possession has been taken.
In this section, execution process means— (a) (b) (c) (d) The period of 5 working days in subsection (1)(c) is qualified if an interpleader application has been made in respect of the debtor’s property that has been taken into possession.

In that case the period of 5 working days does not include the days that elapse between— (a) (b) the date when the application is made; and the date when the application is finally determined, withdrawn, abandoned, or otherwise resolved.
a writ of sale; or a writ of possession; or a writ of arrest; or a writ of sequestration.
Compare: 1967 No 54 s 19(1)(g) 25 Writ of sale (1) A debtor commits an act of bankruptcy if— 28 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 28 (a) (b) a writ of sale directed against any land of the debtor, or any interest in that land, has been delivered to a sheriff; and as part of the execution process, the land or interest has been advertised for sale in at least 1 newspaper pub- lished or circulating in the town or district in which the land is situated.
(2) However, subsection (1) does not apply, and an act of bankruptcy is not committed, if the judgment or the order under which the writ of sale has been issued is satisfied within 5 working days after the writ of sale has been both delivered to the sheriff and advertised.
Compare: 1967 No 54 s 19(1)(h) 26 27 28 Return that sufficient goods not found under execution process A debtor commits an act of bankruptcy if, under an execution process issued against the debtor or the debtor’s property, a return is made that sufficient goods and chattels of the debtor could not be found on which to levy the debt.
Compare: 1967 No 54 s 19(1)(i) Removal or concealment of property A debtor commits an act of bankruptcy if the debtor takes any of the following steps with intent to prejudice his or her cred- itors, or to give one creditor an advantage over another: (a) removes or attempts to remove any of the debtor’s prop- erty from any place: conceals or attempts to conceal any of his or her prop- erty.
(b) Compare: 1967 No 54 s 19(1)(j) Unsatisfied judgment for non-payment of trust money A debtor commits an act of bankruptcy if— (a) (b) the debtor is required by law to keep a trust account; and judgment has been given against the debtor for nonpay- ment of trust money; and 29 Part 2 s 29 Insolvency Act 2006 Reprinted as at 1 April 2010 (c) the judgment is not satisfied within 5 working days after the date of the judgment.
Compare: 1967 No 54 s 19(1)(k) Bankruptcy notice 29 (1) (2) (3) Form of bankruptcy notice The bankruptcy notice must— (a) (b) be in the prescribed form; and require the debtor, in relation to the judgment debt or the sum ordered to be paid under a final order,— (i) (ii) to pay the amount owing, plus costs; or to give security for the amount owing that satis- fies the court or the creditor; or to compromise the amount owing on terms that satisfy the court or the creditor; and (iii) (c) state what are the consequences if the debtor does not comply with the notice; and (d) be served on the debtor in the prescribed manner.
The bankruptcy notice may name an agent to act on behalf of the creditor in so far as the notice requires— (a) (b) In this section,— (a) any payment to be made to the creditor; or any other step to be taken that involves the creditor.

creditor includes a person entitled to enforce a final judgment or final order; and final order includes an arbitration award that the debtor pay money to the creditor, if the court has given permis- sion to enforce the award.
(b) Compare: 1967 No 54 ss 19(2), 20(a) Effect of overstatement of amount owing 30 (1) Overstatement in a bankruptcy notice of the amount owing by the debtor does not invalidate the notice, unless— (a) the debtor notifies the creditor that the debtor disputes the validity of the notice because it overstates the amount owing; and 30 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 32 (b) the debtor makes that notification within the time spe- cified in the notice for the debtor to comply with the notice.
(2) A debtor complies with a notice that overstates the amount owing by— (a) taking steps that would have been compliance with the notice had it stated the correct amount owing (for ex- ample, by paying the creditor the correct amount owing plus costs); and taking those steps within the time specified in the notice for the debtor to comply.
(b) Compare: 1967 No 54 s 20(b) Effect on execution process of filing creditor’s application 31 Creditor’s execution process must not be issued or continued (1) A creditor who applies for a debtor to be adjudicated bankrupt must not issue an execution process against the debtor in re- spect of the debtor’s property or person to recover a debt on which the application is based.

If the creditor has already issued the execution process, the creditor must not continue it.
(2) (3) However, the creditor may apply to the court for permission to issue or continue the execution process, as the case may be.

Compare: 1967 No 54 s 24(1) Execution processes by other creditors 32 (1) After a creditor’s application for adjudication has been filed, the debtor or any creditor may apply to the court for an order halting the issue or continuance of an execution process against the debtor in respect of the debtor’s property or person by any other creditor.
(2) On an application under subsection (1), the court may— (a) halt the execution process, on the terms and conditions (if any) that the court thinks appropriate; or 31 Part 2 s 33 Insolvency Act 2006 Reprinted as at 1 April 2010 (b) allow the execution process to continue, on the terms and conditions (if any) that the court thinks appropriate.
Compare: 1967 No 54 s 24(2) 33 (1) (2) 34 Execution process issued by another court This section applies if an execution process has been issued out of a court (Court 1) other than the court (Court 2) where the application for adjudication was filed.
If it is proved to Court 1 that an application for the adjudication of the debtor has been filed in Court 2, Court 1 may— (a) halt the execution process, subject to the terms and con- ditions (if any) that Court 1 thinks appropriate; or allow the execution process to continue, but on the terms and conditions (if any) that Court 1 thinks appro- priate.
(b) Compare: 1967 No 54 s 24(2) No restriction on execution process if application for adjudication withdrawn or dismissed The restrictions in sections 31 to 33 on issuing or continuing an execution process do not apply if the application for adju- dication is withdrawn or dismissed.
Compare: 1967 No 54 s 24(5) 35 Meaning of execution process In sections 31 to 34, execution process means any of the fol- lowing: (a) issuing or proceeding with any of the following writs or warrants under a judgment or order obtained against the debtor in any court in its civil jurisdiction (except a judgment or order for possession of any land or building obtained on the ground that the debtor is a trespasser or that the debtor’s tenancy has expired): (i) a writ or warrant for the possession, seizure, or sale of any property: a writ of attachment: (ii) obtaining a garnishee order in favour of a judgment creditor under rule 638 of the District Courts Rules 1992: (b) 32 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 37 (c) (d) (e) (f) (g) obtaining an order that a judgment creditor may sue a subdebtor under rule 639(2)(c) of the District Courts Rules 1992: having a charging order nisi made absolute under rule 585 of the High Court Rules: beginning or continuing proceedings in any court for the appointment of a receiver of any property, except an application for the appointment of the Assignee as receiver and manager under section 50: exercising any power of re-entry under a lease, or any power terminating a lease: seizing or selling any property by way of distress for rent.
Compare: 1967 No 54 s 24(4) Section 35(b): amended, on 3 December 2007, pursuant to rule 676 of the Dis- trict Courts Rules 1992 (SR 1992/109).

Section 35(c): amended, on 3 December 2007, pursuant to rule 676 of the Dis- trict Courts Rules 1992 (SR 1992/109).

Court’s options when hearing creditor’s application Court may adjudicate debtor bankrupt The court may, at its discretion, adjudicate the debtor bankrupt if the creditor has established the requirements set out in sec- tion 13.
Compare: 1967 No 54 s 26(1) Court may refuse adjudication The court may, at its discretion, refuse to adjudicate the debtor bankrupt if— (a) the applicant creditor has not established the require- ments set out in section 13; or the debtor is able to pay his or her debts; or it is just and equitable that the court does not make an order of adjudication; or for any other reason an order of adjudication should not be made.
Compare: 1967 No 54 s 26(2) (b) (c) (d) 33 36 37 Part 2 s 38 Insolvency Act 2006 Reprinted as at 1 April 2010 38 (1) (2) 39 (1) (2) 40 41 (1) Court may halt application The court may at any time halt the creditor’s application for adjudication.

The court may halt the application on the terms and conditions (if any), and for the period, that the court thinks appropriate.
Compare: 1967 No 54 s 26(7) Orders if more than 1 application If there is more than 1 application for adjudication, and 1 ap- plication has been halted by a court order, the court may, if there is a good reason, make an order of adjudication on the application that has not been halted.

If the court makes an order of adjudication under subsec- tion (1), the court must dismiss the application that has been halted, on the terms and conditions (if any) that the court thinks appropriate.
Compare: 1967 No 54 s 26(6) Orders if more than 1 debtor If a creditor’s application for adjudication relates to more than 1 debtor, the court may refuse adjudication of 1 or some of the debtors without affecting the application in relation to the remaining debtor or debtors.
Compare: 1967 No 54 s 26(8) Order that disposition or proposal not act of bankruptcy This section applies if the debtor— (a) has made a disposition of all, or substantially all, of the debtor’s property to a trustee for the benefit of all or any of the debtor’s creditors; or has made a proposal under Part 5; or has applied for a summary instalment order under Part 5.

(b) (c) (2) The debtor or the trustee or any creditor may apply for an order under this section.
(3) On the application, the court may make any of the following orders: 34 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 43 (a) (b) (c) order that the disposition or proposal is not an act of bankruptcy: halt or refuse the application for adjudication: order that any other application for adjudication must not be filed: (d) make any order as to costs that the court thinks appro- (e) priate: if it orders that costs must be paid to the creditor who has applied for adjudication, order that the costs must be paid out of the debtor’s estate.
This section does not limit the powers of the court under sec- tion 37.

Compare: 1967 No 54 s 26(3) Halt or refusal of application when judgment under appeal This section applies if the creditor’s application for adjudica- tion relies on one of the following acts of bankruptcy: (a) the debtor failed to comply with a bankruptcy notice (see section 17): a judgment against the debtor for non-payment of trust money is not satisfied within 5 working days after the date of the judgment (see section 28).
(b) If the debtor has appealed against the judgment or order under- lying the bankruptcy notice or the judgment for nonpayment of trust money, as the case may be, and the appeal is still to be decided, then the court may— (a) (b) Compare: 1967 No 54 s 26(4) halt the creditor’s application for adjudication; or refuse the application.
Court may halt application while underlying debt determined This section applies if the debtor appears in opposition to a creditor’s application and the debtor says either— (a) (b) that he or she does not owe a debt to the creditor; or that he or she does owe a debt to the creditor, but the debt is less than $1,000.
35 (4) 42 (1) (2) 43 (1) Part 2 s 44 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) The court may, instead of refusing the application, halt the application so that the question of whether the debt is owed, or how much of the debt is owed, can be resolved at a trial.

(3) As a condition of halting the application, the court may require the debtor to give security to the creditor for any debt that may be established as owing by the debtor to the creditor, and for the costs of establishing the debt.
Compare: 1967 No 54 s 26(5) 44 (1) (2) Substitution of creditor The court may substitute another creditor (Creditor 2) for the creditor making the application for adjudication (Creditor 1), if— (a) Creditor 1 has not proceeded with due diligence or at the hearing of the application offers no evidence; and the debtor owes Creditor 2 $1,000 or more.

(b) In that case, Creditor 2 must file another application for adju- dication, but can rely on the act of bankruptcy to which Cred- itor 1’s application related.
Compare: 1967 No 54 s 26(9) Debtor’s application 45 When debtor may file application A debtor may file an application with the Assignee to have himself or herself adjudicated bankrupt if the debtor has com- bined debts of $1,000 or more.

Debtor must first file statement of affairs 46 (1) A debtor may not file an application for adjudication unless the debtor has first filed with the Assignee a statement of the debtor’s affairs in the prescribed form.
The Assignee may reject a statement of affairs that in the As- signee’s opinion is incorrect or incomplete.

(2) Debtor automatically adjudicated bankrupt 47 (1) A debtor who files an application with the Assignee to have himself or herself adjudicated bankrupt is automatically adju- dicated bankrupt when the application is filed.
36 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 50 (2) 48 (1) (2) 49 (1) That adjudication has the same consequences as if the debtor had been adjudicated bankrupt by the court.

Compare: 1967 No 54 s 21 Debtors’ joint application Two or more debtors who are partners in a business partnership may file a joint application.

The debtors are automatically adjudicated bankrupt both sep- arately and jointly when the application is filed.
Compare: 1967 No 54 s 22 Steps for filing debtor’s application To file an application for adjudication, a debtor must— (a) (b) complete the prescribed application form; and lodge it with the Assignee in accordance with the pre- scribed procedure.

(2) The debtor files the application when it is endorsed by the As- signee as having been received.
Subpart 3—Appointment of receiver Power of court to appoint Assignee as receiver Application for appointment of Assignee as receiver 50 (1) After a creditor’s application for adjudication has been filed, a creditor of the debtor may apply to the court for an order appointing the Assignee as receiver and manager of all or part of the debtor’s property.

The court may make the order at any time before it makes an order of adjudication.
(2) (3) As part of the order, the court may authorise the Assignee to take all or any of the following steps: (a) (b) take possession of any property: sell any perishable property or property that is likely to fall rapidly in value: control the debtor’s business or property as directed by the court.
(c) 37 Part 2 s 51 Insolvency Act 2006 Reprinted as at 1 April 2010 (4) An order for the Assignee’s control of the debtor’s business must be confined to what is necessary, in the court’s opinion, for conserving the debtor’s property.

Compare: 1967 No 54 s 27 51 52 Additional orders after receiver’s appointment After the appointment of the Assignee as receiver and man- ager, the court may, on an application by a creditor or the As- signee, make additional orders under section 50.
Compare: 1967 No 54 s 27(2) Appointment of Assignee as receiver and manager must be advertised The appointment of the Assignee as receiver and manager of the debtor’s property must be advertised in accordance with regulations made under this Act for that purpose.

Execution process halted 53 (1) A creditor of the debtor must not issue an execution process of the kind referred to in section 35 after the appointment of the Assignee as receiver and manager has been advertised.
(2) A creditor must not continue an execution process already is- sued before the advertisement.

(3) However, a creditor or any other person interested may apply to the court for an order allowing the issue or continuation of an execution process, and the court may make an order on the terms and conditions that it thinks appropriate.
Compare: 1967 No 54 s 27(3) Effect when execution process halted If the execution process is halted under section 53, then sec- tions 77, 108 to 112, and 115 apply as if the order halting the execution process were an adjudication.
Compare: 1967 No 54 s 24(3) 54 38 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 59 55 56 57 (1) (2) 58 59 Subpart 4—Adjudication Adjudication Bankruptcy commences on adjudication The bankruptcy commences on the date and at the time when the debtor is adjudicated bankrupt.
Date of adjudication In this Act, date of adjudication means,— (a) if the debtor is adjudicated bankrupt on a creditor’s ap- plication, the date and time when the court made the order of adjudication; or if the debtor is adjudicated bankrupt on the debtor’s ap- plication, the date and time when the debtor filed the application (see section 49(2)).
(b) Compare: 1967 No 54 s 28 Date and time of adjudication must be recorded If the debtor is adjudicated bankrupt on a creditor’s applica- tion, the court must record the date and time when the order was made.

If the debtor is adjudicated bankrupt on the debtor’s applica- tion, the Assignee must record on the application the date and time when the debtor filed the application.
Compare: 1967 No 54 s 28A Registrar must notify Assignee of adjudication by court The Registrar must notify the Official Assignee as soon as pos- sible after the court makes an order of adjudication.

Official Assignee must nominate Assignee The Official Assignee must nominate an Assignee to be the Assignee of the debtor’s property, and may at any time direct that another Assignee is the Assignee of the debtor’s property.
39 Part 2 s 60 Insolvency Act 2006 Reprinted as at 1 April 2010 60 (1) (2) 61 62 (1) (2) 63 Presumption that act or transaction entered into or effected after adjudication This section applies if there is doubt whether an act was done, or a transaction entered into or effected, before or after the date of adjudication.

The presumption is that the act was done, or the transaction entered into or effected, after the date of adjudication, but the presumption does not apply if the contrary is proved.
Adjudication final and binding Unless an adjudication is appealed under this Act,— (a) no one can later assert that the adjudication was not valid or that a prerequisite for adjudication was absent; and the adjudication is binding on all persons.

(b) Compare: 1967 No 54 s 30 Public register of discharged and undischarged bankrupts The Assignee must maintain a public register of discharged and undischarged bankrupts.

The register must be maintained in accordance with subpart 5 of Part 7.
Subpart 5—What happens on adjudication Debtor adjudicated bankrupt called the bankrupt In this Act, a debtor who has been adjudicated bankrupt is called the bankrupt.
Outline of what happens on adjudication 64 (1) On adjudication— (a) (b) (c) (d) (e) the Assignee must advertise the adjudication; and the bankrupt must file with the Assignee a statement of his or her affairs, if the bankrupt has not already done so; and the Assignee may call a meeting of the bankrupt’s cred- itors; and proceedings to recover certain debts must be halted; and the property of the bankrupt vests in the Assignee.
40 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 68 (2) This section is a guide only to the immediate consequences of adjudication.

65 (1) (2) (3) 66 67 Assignee must advertise adjudication Assignee must advertise adjudication The Assignee must advertise the adjudication of the bankrupt as soon as practicable after it has occurred.

The Assignee must advertise the adjudication in the prescribed manner.

Subsection (1) is subject to section 66.


Compare: 1967 No 54 s 31 Order that Assignee must not advertise pending appeal or application for annulment The court may order that the Assignee must not advertise the adjudication if the bankrupt has appealed against an order of adjudication or if the bankrupt has applied for an annulment of the adjudication.
Bankrupt’s statement of affairs Bankrupt must file statement of affairs with Assignee After adjudication, the bankrupt must file with the Assignee a statement of the bankrupt’s affairs in the prescribed form, unless the bankrupt has already filed a statement under sec- tion 46.
Compare: 1967 No 54 s 33 68 Notice that bankrupt must file statement of affairs (1) As soon as practicable after adjudication, the Assignee must send the bankrupt a notice in the prescribed form stating— that the bankrupt has been adjudicated bankrupt; and (a) that the bankrupt must file a statement of the bankrupt’s (b) affairs in the prescribed form; and the time when the statement must be filed.
(c) The Assignee must send the notice to the address of the bankrupt given in the application for adjudication or the bankrupt’s last known address.

(2) 41 Part 2 s 69 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) 69 70 This section does not apply if the bankrupt has already filed a statement under section 46.
Compare: 1967 No 54 s 33(1) Time for filing statement of affairs The bankrupt must file a statement of the bankrupt’s affairs in the prescribed form with the Assignee within 10 working days after receiving the Assignee’s notice under section 68(1) that the statement must be filed.

Bankrupt may file additional or amended statements or answers At any time after filing a statement of affairs with the Assignee under section 46 or 67, the bankrupt may file additional or amended statements or answers.
Assignee must call meeting of creditors (2) Assignee must call meeting of creditors 71 (1) After adjudication, the Assignee must call the first meeting of the bankrupt’s creditors, unless the Assignee dispenses with the meeting under section 73.

The Assignee may call the meeting by giving notice of the time and place of the meeting to— the bankrupt; and (a) each creditor named in the bankrupt’s statement of af- (b) fairs; and any other creditors known to the Assignee.
(c) The Assignee must advertise the time and place of the meeting in the prescribed manner.

Compare: 1967 No 54 s 34(1), (2) Time when meeting must be held The first creditors’ meeting must be held— (a) (b) within 25 working days after the bankrupt files the bankrupt’s statement of affairs; or if the bankrupt is late in filing the statement or does not file a statement at all, at the latest within 25 working days after adjudication.
(3) 72 (1) 42 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 75 (2) However, the Assignee may delay calling the first creditors’ meeting if the Assignee considers that there are special cir- cumstances that justify the delay.
Compare: 1967 No 54 s 34(1) 73 (1) (2) 74 Assignee may dispense with first creditors’ meeting The Assignee need not call a first creditors’ meeting if the Assignee— (a) (b) decides that the meeting should not be called; and sends each creditor named in the bankrupt’s statement of affairs, and any other creditor known to the Assignee, a notice that complies with section 74; and does not receive, within 10 working days after the As- signee’s notice was sent, written notice from a creditor requiring the Assignee to call the meeting.
(c) In deciding whether the meeting should not be called, the As- signee must consider— (a) (b) (c) Compare: 1967 No 54 s 34A the bankrupt’s assets and liabilities; and the likely result of the bankruptcy; and any other relevant matters.
Notice that first creditors’ meeting should not be called The Assignee’s notice to creditors under section 73(1)(b) must— (a) state that the Assignee considers that the first creditors’ meeting should not be called; and give the reasons for not calling the meeting; and state that the Assignee will not call the meeting unless a creditor gives the Assignee written notice, within 10 working days after the Assignee’s notice was sent, re- quiring the Assignee to call the meeting.
(b) (c) Compare: 1967 No 54 s 34A 75 (1) Documents to be sent with notice of meeting The Assignee must send the following documents with the no- tice of the first creditors’ meeting: (a) a summary of the bankrupt’s statement of assets and liabilities; and 43 Part 2 s 76 Insolvency Act 2006 Reprinted as at 1 April 2010 (b) (c) extracts from, or a summary of, the bankrupt’s explan- ation of the causes of the bankruptcy; and any comments on the bankruptcy that the Assignee chooses to make.
(2) However, subsection (1) does not apply if the Assignee has not received the bankrupt’s statement of affairs when the notice is sent.

(3) A failure in sending or receiving the documents in subsec- tion (1) does not affect the validity of the proceedings at the meeting.

Compare: 1967 No 54 s 35 Court proceedings are halted Effect of adjudication on court proceedings 76 (1) On adjudication, all proceedings to recover any debt provable in the bankruptcy are halted.
(2) However, on the application by any creditor or other person interested in the bankruptcy, the court may allow proceedings that had already begun before the date of adjudication to con- tinue on the terms and conditions that the court thinks appro- priate.
Compare: 1967 No 54 s 32 Execution process 77 Execution process must not be begun or continued after adjudication advertised (1) A creditor must not begin or continue an execution, attach- ment, or other process in respect of the bankrupt’s property or person, for the recovery of a debt provable in the bankruptcy, after— (a) the Assignee has advertised the bankrupt’s adjudica- tion; or the Assignee has given notice of the adjudication to the creditor.
(b) (2) After advertisement of the adjudication or notice by the As- signee to the creditor, a creditor must not seize or sell any prop- erty by way of distress for rent due and owing by the bankrupt, 44 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 81 but the creditor may continue with the distress procedure if al- ready begun.
Compare: 1967 No 54 s 50(5) Bankrupt’s death Effect of bankrupt’s death after adjudication If the bankrupt dies after adjudication, the bankruptcy con- tinues in all respects as if the bankrupt were alive.

Compare: 1967 No 54 s 137 Subpart 6—Role of creditors Overview of creditors’ role in bankruptcy The role of the creditors in the bankruptcy is primarily to— (a) (b) attend meetings of the creditors; and submit proofs of the debts of the bankrupt.
Creditors’ meetings Types of creditors’ meetings There are 2 types of creditors’ meetings: (a) (b) The rules for calling the first creditors’ meeting are set out in sections 71 to 75. the first creditors’ meeting; and subsequent meetings.

Subsequent meetings The Assignee may call subsequent meetings of creditors.

The Assignee must call a subsequent meeting if required to do so by one-quarter in number and value of the creditors who have proved their debts.
The Assignee must call the meeting by taking the steps set out in section 71(2) and (3).

Compare: 1967 No 54 s 36 78 79 80 (1) (2) 81 (1) (2) (3) 45 Part 2 s 82 Insolvency Act 2006 Reprinted as at 1 April 2010 82 Meeting and resolution not defective for lack of notice A creditors’ meeting, and the resolutions passed at the meet- ing, are valid even if some creditors did not receive the notice of the meeting, unless a court orders otherwise.
Compare: 1967 No 54 s 40(6) Conduct of creditors’ meetings 83 (1) Chairperson The chairperson of a creditors’ meeting is the Assignee or a person appointed by the Assignee to be the chairperson.

(2) However, if neither the Assignee nor the person (if any) ap- pointed by the Assignee to be the chairperson attends the meet- ing, the creditor or creditors may elect one of themselves to act as chairperson for the purpose of the meeting, but only if that person is entitled to vote at the meeting.
(3) A person appointed by the Assignee or elected by the credit- ors to act as chairperson may administer any oath that the As- signee could have administered if the Assignee had attended the meeting.

Compare: 1967 No 54 s 37(1) Chairperson may adjourn meeting The Assignee or the chairperson of a meeting may adjourn the meeting from time to time and place to place.
Compare: 1967 No 54 s 37(3) Assignee must report to meeting If the Assignee attends a creditors’ meeting or an adjournment of the meeting, the Assignee— (a) must report on the administration of the bankrupt’s es- tate; and (b) must give any creditor any further information that the creditor may properly require; and (c) must, if reasonably required, produce for the meeting (or its adjournment) all accounting records, deeds, and papers in the Assignee’s possession that relate to the bankrupt’s property.
Compare: 1967 No 54 s 37(4) 84 85 46 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 89 Attending creditors’ meeting 86 (1) A person may attend a creditors’ meeting— (a) (b) by being physically present at the time and place ap- pointed for the meeting; or if the Assignee makes it available, by means of an audio or audio-visual link, so that all those participating in the meeting can hear and be heard by each other.
(2) A creditor may also attend by voting by postal or electronic vote under section 93 or by proxy on any resolution to be put to the meeting.

87 (1) (2) (3) (4) 88 Bankrupt may be required to attend and be questioned The bankrupt must, if required by the Assignee, attend all cred- itors’ meetings by being physically present or present by an audio or audio-visual link.
The Assignee, the chairperson of a creditors’ meeting, a cred- itor, or a representative of a creditor may question the bankrupt as to his or her property, conduct, or dealings.

The chairper- son of the meeting must allow only questions that relate to the bankrupt’s property, conduct, or dealings.

The questioning may be on oath.

The bankrupt must sign a statement of the bankrupt’s evidence given under the questioning, if required to do so by the As- signee or the chairperson of the meeting.
Compare: 1967 No 54 s 37(2) Attendance by non-creditors A person who is not a creditor of the bankrupt may attend a creditors’ meeting with the consent of— (a) (b) the Assignee; or the creditors attending the meeting, voting by ordinary resolution.

Compare: 1967 No 54 s 37(5) 89 Minutes and record of meeting (1) The Assignee must ensure that minutes are kept of every cred- itors’ meeting.

The Assignee or the chairperson must sign the minutes.
(2) 47 Part 2 s 90 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) 90 (1) (2) The Assignee may record the meeting, but only with the con- sent of each person attending the meeting.

Compare: 1967 No 54 s 37(6) Number of persons for valid meeting For a valid creditors’ meeting, at least the following persons must attend: (a) the Assignee or a person who represents the Assignee; and (b) a creditor or a person who represents a creditor.
The meeting lapses if those persons do not attend, and the As- signee may call another meeting.
Compare: 1967 No 54 s 38 91 Who may represent creditor or bankrupt (1) At a creditors’ meeting, any of the following persons may rep- resent a creditor and, if the bankrupt attends, any of the follow- ing persons except the person in paragraph (d) may represent the bankrupt: (a) (b) (c) a lawyer: an accountant: a person who keeps the creditor’s or bankrupt’s ac- counts: in the case of a creditor, a person who is the creditor’s authorised agent under a power of attorney: a person who satisfies the Assignee that he or she rep- resents the creditor or bankrupt: in the case of a partnership, a partner.
(f) In addition to the persons listed in subsection (1), a creditor may be represented,— (a) (d) (e) in the case of the Crown, by any officer of the appropri- ate government department: in the case of a public body, by an officer of that body: in the case of a company, by a director, or its general manager or accountant, or by a person authorised in writing by one of those persons.
(b) (c) Compare: 1967 No 54 s 39 (2) 48 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 94 92 (1) (2) Voting at meetings For a creditors’ meeting to pass— (a) an ordinary resolution, a majority in number and value of the creditors (or their representatives) who attend and who vote on the resolution must vote in favour of it: a special resolution, three-quarters in number and value of the creditors (or their representatives) who attend and who vote on the resolution must vote in favour of it.
(b) For the purposes only of determining whether the requisite majority by value has voted in favour of a resolution,— (a) (b) the Assignee may admit or reject proofs of debt; and the Assignee may adjourn the meeting in order to admit or reject proofs of debt; and a person whose debt has been admitted is a creditor.
(c) Compare: 1967 No 54 s 40(1) Postal and electronic votes 93 (1) A creditor who is entitled to vote at a creditors’ meeting may vote on a resolution to be put to the meeting— (a) (b) by postal vote; or by electronic vote, if the voting paper for the resolution allows it, in accordance with the procedure specified in the voting paper.

(2) A postal or electronic vote must reach the Assignee at least 2 working days before the meeting begins if it is to be counted at the meeting.
(3) A voting paper for each resolution to be put to a creditors’ meeting must accompany the notice of the meeting, together with instructions for returning the voting paper or electronic vote (if allowed by the voting paper under section 93(1)(b)) to the Assignee at least 2 working days before the meeting begins.
94 Who may vote at creditors’ meeting Creditors of the bankrupt who are entitled to vote, or their representatives, may vote at a creditors’ meeting, but this rule is qualified by the provisions of sections 95 to 97.
49 Part 2 s 95 Insolvency Act 2006 Reprinted as at 1 April 2010 95 When secured creditor may vote A debt that is secured does not entitle the creditor to vote un- less the creditor has taken one of the following steps under this Act: (a) (b) (c) Compare: 1967 No 54 s 40(2) surrendered the charge; or valued the charge; or realised the charge.
96 When creditor under bill of exchange or promissory note may vote (1) A debt on, or secured by, a current bill of exchange or promis- sory note does not entitle the creditor to vote unless the creditor is willing to take the following steps: (a) treat a qualifying liability (which is defined in subsec- tion (2)) as a charge in the creditor’s hands; and estimate the value of the charge; and deduct the value of the charge from the creditor’s claim for the purposes of voting (but not for the purposes of distribution under subpart 10 of Part 3); and show the bill or note to the Assignee when the Assignee requires it.
(b) (c) (d) (2) In this section, qualifying liability means the liability to the creditor on the bill or note of every person who— (a) is liable on the bill or note antecedently to the debtor; and is not a bankrupt.
(b) Compare: 1967 No 54 s 40(3) 97 Person disqualified from voting through preferential effect (1) A person (A) must not vote in favour of a resolution that would directly or indirectly enable any of the persons listed in sub- section (2) to receive any remuneration out of the bankrupt’s estate other than as a creditor sharing rateably with the other creditors.
The persons referred to in subsection (1) are— (a) (b) A’s business partner, employer, or employee: (2) A: 50 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 2 s 100 (c) (d) a creditor that A represents: the business partner, employer, or employee of a cred- itor that A represents.
Compare: 1967 No 54 s 40(4) 98 Creditor of partner The adjudication of a partner in a firm who is indebted to a creditor jointly with 1 or more of his or her partners entitles the creditor to prove the debt for the purpose of voting at any creditors’ meeting, and to vote.
Compare: 1967 No 54 s 40(5) 99 Creditors may appoint expert or committee to assist Assignee (1) A creditors’ meeting may pass an ordinary resolution— (a) (b) appointing an expert to assist the Assignee in the ad- ministration of the bankrupt’s estate; and providing for the expert’s remuneration out of the estate.
(2) A creditors’ meeting may pass an ordinary resolution appoint- ing a committee of any persons to assist the Assignee in the ad- ministration of the bankrupt’s estate, but in that case the court must approve any remuneration of the members of the com- mittee out of the estate.
Compare: 1967 No 54 s 41(1), (2) 100 Creditor’s right to inspect documents Documents A creditor, or a lawyer or accountant acting for that creditor, who has lodged a creditor’s claim form may at any reasonable time inspect and take extracts or copies of— (a) (b) (c) (d) (e) Compare: 1967 No 54 s 131 the bankrupt’s accounting records: the bankrupt’s answers to questions under section 87: the bankrupt’s statement of affairs: all proofs of debt: the minutes of any creditors’ meeting.
51 Part 3 s 101 Insolvency Act 2006 Reprinted as at 1 April 2010 Part 3 Dealing with bankrupt and bankrupt’s property Subpart 1—Status of bankrupt’s property General 101 Status of bankrupt’s property on adjudication (1) On adjudication,— (a) (b) all property (whether in or outside New Zealand) be- longing to the bankrupt or vested in the bankrupt vests in the Assignee without the Assignee having to inter- vene or take any other step in relation to the property, and any rights of the bankrupt in the property are extin- guished; and the powers that the bankrupt could have exercised in, over, or in respect of any property (whether in or outside New Zealand) for the bankrupt’s own benefit vest in the Assignee.
(2) This section is subject to section 104.
Compare: 1967 No 54 s 42(1), (2) 102 Status of property acquired during bankruptcy (1) Between the commencement of bankruptcy and discharge of the bankrupt,— (a) all property (whether in or outside New Zealand) that the bankrupt acquires or that passes to the bankrupt vests in the Assignee without the Assignee having to intervene or take any other step in relation to the prop- erty, and any rights of the bankrupt in the property are extinguished; and the powers that the bankrupt could have exercised in, over, or in respect of that property for the bankrupt’s own benefit vest in the Assignee.
(b) This section is subject to section 104 and section 123.

This section does not apply to property that is vested in the bankrupt under an order made under section 119(3).

Compare: 1967 No 54 s 42(2) (2) (3) 52 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 107 103 Property vests in replacement Assignee If the Assignee is replaced, the property and powers vested in the former Assignee under section 101 or 102 vest in the replacement Assignee.
Compare: 1967 No 54 s 42(1) 104 Property held in trust by bankrupt Property held by the bankrupt in trust for another person does not vest in the Assignee.

Compare: 1967 No 54 s 42(3) 105 Effect of other laws (1) Nothing in the Land Transfer Act 1952 restricts the operation (2) of sections 101 to 104.

Sections 101 to 104 do not affect the operation of any other law that prevents any property from vesting in the Assignee.
Compare: 1967 No 54 s 42(5) 106 Court may order that money due to bankrupt is assigned (1) (2) to Assignee The court may, on the application of the Assignee, order that any money due to the bankrupt, or any money to become due or payable to the bankrupt, is assigned or charged to, or in favour of, the Assignee.

The assignment or charge is a discharge to the person who pays the Assignee.
Compare: 1967 No 54 s 45A 107 Application of section 274 to payments by bankrupt or assignments by court The Assignee must apply the following payments in accord- ance with section 274: (a) (b) any amount paid by the bankrupt under section 147: any amount paid to the Assignee under an order made under section 106.
Compare: 1967 No 54 s 45B 53 Part 3 s 108 Insolvency Act 2006 Reprinted as at 1 April 2010 Bankrupt’s property subject to execution process 108 When execution creditor may retain execution proceeds (1) issued execution against the bankrupt’s property; or attached a debt due by the bankrupt.
This section applies to a creditor who has, before adjudica- tion,— (a) (b) The creditor may retain the benefit of the execution or attach- ment (including the proceeds) only if the creditor completed the execution or attachment— before adjudication; and (a) before the creditor had notice that an application for (b) adjudication had been filed or that the bankrupt had committed an act of bankruptcy (other than an act of bankruptcy arising out of the creditor’s execution or at- tachment).
The creditor may retain as against the Assignee a payment made by the bankrupt in the course of the execution or attach- ment to avoid the execution or attachment as if— (a) the payment was the proceeds of the execution or at- tachment; and the execution or attachment was completed when the payment was made.

(b) (2) (3) (4) The right of a creditor under this section to retain the benefit of an execution or attachment is subject to sections 194 to 197.
Compare: 1967 No 54 s 50(1), (2), (6) 109 Effect of notice to sheriff of adjudication (1) This section applies if the sheriff has taken the property of a debtor in execution and is served with notice of the debtor’s adjudication before the property is sold or before the execution is completed by the receipt or recovery of the full amount of the levy of execution.
If the Assignee requires it, the sheriff must deliver to the As- signee any goods and money seized or received in part satis- faction of the execution.

(2) 54 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 110 (3) 110 (1) (2) (3) (4) (5) The costs of the execution are a first charge on the goods or money delivered to the Assignee, and the Assignee may sell the goods or part of the goods to satisfy the charge.
Compare: 1967 No 54 s 50(3) Sheriff must retain proceeds of execution for 10 working days This section applies if, under execution of a judgment for a sum of more than $100, the sheriff sells property of the debtor or is paid money in order to avoid a sale.
The sheriff must deduct the costs of the execution from the proceeds of sale or the money paid and retain the balance for 10 working days (which in this section is called the 10-day period), to be applied in accordance with subsection (3) or subsection (4).

If the sheriff is served with notice within the 10-day period that the debtor has filed an application for adjudication, the sheriff must pay the balance to the Assignee, who is entitled to retain it as against the execution creditor.
If the sheriff is served with notice within the 10-day period that a creditor has filed an application for the adjudication of the debtor, subject to subsection (3),— (a) the sheriff must retain the balance until the application (and any other application of which notice is served on the sheriff pending disposal of the first application) has been disposed of; and the sheriff must,— (i) if adjudication results, pay the balance to the As- signee; or if adjudication does not result, pay the balance to the execution creditor, who is entitled to retain it as against the Assignee (subject to section 112).
If the sheriff is not served with notice within the 10-day period that an application for the adjudication of the debtor has been filed, the sheriff must pay the balance to the execution creditor, who is entitled to retain it as against the Assignee.
Compare: 1967 No 54 s 50(4) (ii) (b) 55 Part 3 s 111 Insolvency Act 2006 Reprinted as at 1 April 2010 111 Purchaser under sale by sheriff acquires good title A purchaser in good faith of a debtor’s property, on which execution has been levied and which is sold by the sheriff, acquires a good title to the property as against the Assignee.
Compare: 1967 No 54 s 50(7) 112 Court may set aside rights conferred on Assignee The court may set aside the rights conferred on the Assignee under sections 109 and 110 in favour of the execution creditor, to the extent and on the terms and conditions (if any) that the court thinks appropriate.
Compare: 1967 No 54 s 50(8) Validity of property transactions with bankrupt 113 Transaction in good faith and for value after adjudication This section applies to a transaction between a person (A) and (1) the bankrupt in relation to property that the bankrupt has ac- quired, or that has passed to the bankrupt, after adjudication.
The transaction is valid as against the Assignee if— (a) A deals with the bankrupt in good faith and for value; and the transaction is completed without an intervention by the Assignee.
(2) (b) (3) (b) If A is the bankrupt’s bank, a transaction by A dealing with the bankrupt for value includes— (a) the receipt by A of any money, charge, or negotiable instrument from the bankrupt or by the bankrupt’s order or direction; and a payment by A to the bankrupt or by the bankrupt’s order or direction; and the delivery by A of a charge or negotiable instrument to the bankrupt or by the bankrupt’s order or direction.
(4) A payment of money or delivery of property by a legal per- sonal representative to, or by the direction of, the bankrupt is a transaction for value.

Compare: 1967 No 54 s 49(1)(a), (3), (4) (c) 56 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 117 114 Executions and attachments in good faith (1) This section applies to property that the bankrupt has acquired, or that has passed to the bankrupt, after adjudication.
(2) An execution or attachment against the property is valid as against the Assignee if it is— in good faith; and (a) in respect of a debt or liability incurred by the bankrupt (b) after adjudication; and completed before an intervention by the Assignee.
(c) Compare: 1967 No 54 s 49(1)(b) 115 When execution or attachment completed for purposes of section 108 or 114 For the purposes of section 108 or 114— (a) (b) an execution against goods is completed by seizure and sale: an attachment of a debt is completed by receipt of the debt: an execution against land is completed by sale or, in the case of an equitable interest, by the appointment of a receiver.
Compare: 1967 No 54 s 50(2) (c) (2) 116 Assignee’s interest in property passes (1) This section applies to the Assignee’s interest in property that is acquired by or passes to the bankrupt after adjudication.

The Assignee’s interest in property to which this section ap- plies ends and passes in the manner and to the extent neces- sary to give effect to a transaction, execution, or attachment to which section 113 or 114 applies.
Compare: 1967 No 54 s 49(2) Disclaimer of onerous property 117 Assignee may disclaim onerous property (1) Subject to section 120, the Assignee may disclaim onerous property.

57 Part 3 s 118 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) (3) (4) Subsection (1) applies even if the Assignee has taken posses- sion of the property, tried to sell it, or otherwise exercised rights of ownership in relation to it.
The Assignee must, within 10 working days after the dis- claimer, send a written notice of the disclaimer to every person whose rights are, to the Assignee’s knowledge, affected by it.
For the purposes of this section and section 120, onerous property— (a) means— (i) (ii) an unprofitable contract; or property of the bankrupt that is unsaleable, or not readily saleable, or that may give rise to a liability to pay money or perform an onerous act; or a litigation right that, in the opinion of the As- signee, has no reasonable prospect of success or cannot reasonably be funded from the assets of the bankrupt’s estate; but (iii) (b) does not include— (i) a netting agreement to which sections 255 to 263 apply; or any contract of the bankrupt that constitutes a transaction under that netting agreement.
(ii) Compare: 1993 No 105 s 269(1), (2), (4) 118 Effect of disclaimer A disclaimer by the Assignee— (a) brings to an end, on and from the date of the disclaimer, the rights, interests, and liabilities of the Assignee and the bankrupt in relation to the property disclaimed: does not affect the rights, interests, or liabilities of any other person, except in so far as is necessary to release the Assignee or the bankrupt from a liability.
(b) Compare: 1993 No 105 s 269(3) 119 Position of person who suffers loss as result of disclaimer (1) A person suffering loss or damage as a result of disclaimer by the Assignee may— 58 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 121 (a) (b) claim as a creditor in the bankruptcy for the amount of the loss or damage, taking account of the effect of an order made by the court under paragraph (b): apply to the court for an order that the disclaimed prop- erty be delivered to, or vested in, that person.
The bankrupt may also apply for an order that the disclaimed property be delivered to, or vested in, the bankrupt.

The court may make an order under subsection (1)(b) or (2) if it is satisfied that it is fair that the property should be delivered to, or vested in, the applicant.
Compare: 1993 No 105 s 269(5), (6) (2) (3) 120 Assignee may be required to elect whether to disclaim The Assignee loses the right to disclaim if— (a) a person whose rights would be affected by the dis- claimer has sent the Assignee a written notice requiring the Assignee to elect whether to disclaim the onerous property in question; and the notice specifies a date to disclaim that is not less than 20 working days after the Assignee has received the notice; and the Assignee does not disclaim the onerous property before the close of that date.
(b) (c) Compare: 1993 No 105 s 270 121 Liability for rentcharge on bankrupt’s land after (1) disclaimer The vesting of land subject to a rentcharge after disclaimer by the Assignee in the Crown, any other person, or their suc- cessors in title does not make any of those persons personally liable for the rentcharge.
(2) However, this section does not affect the liability of a person in subsection (1) for rentcharge accruing after that person has taken possession or control of the land or has entered into pos- session of it.

Compare: 1967 No 54 s 79 59 Part 3 s 122 Insolvency Act 2006 Reprinted as at 1 April 2010 Land subject to mortgage 122 Transmission of interest in land (1) is owned by the bankrupt; and is subject to a mortgage or a charge; and is not disclaimed by the Assignee.
This section applies to an interest in land that— (a) (b) (c) The Assignee must— (a) (2) (b) register, under the Land Transfer Act 1952, the trans- mission of the interest in the land to the Assignee; or give notice to the mortgagee or other person entitled under the charge that the Assignee cannot, or does not intend to, register transmission of the interest in the land.
(3) Notice under subsection (2)(b) is notice that the interest has vested in the Assignee, and the mortgagee or person entitled under the charge is, in the event of entering into possession or selling, liable to account to the Assignee as if the Assignee were the registered proprietor of the interest.
Compare: 1967 No 54 s 80(1), (2) 123 Assignee cannot claim interest in land if bankrupt (1) remains in possession until discharge The Assignee cannot, after the bankrupt’s discharge, claim an interest in land to which section 122(1) applies and for which the Assignee has not registered a transmission if the bankrupt— (a) was in possession of the interest at the time of adjudi- cation; and remained bankruptcy.
possession discharge from until (b) in (2) Subsection (1) applies whether or not the Assignee gave a no- tice under section 122(2)(b).
(3) However, the Assignee may apply to the court for an order that the Assignee is entitled, after discharge, to claim the bankrupt’s interest in the land, and the court must have regard to— (a) (b) the good faith of the bankrupt; and the time that has elapsed since adjudication; and 60 Reprinted as at 1 April 2010 (c) Insolvency Act 2006 Part 3 s 125 the value of any improvements made by the bankrupt; and all other relevant matters.
(d) Compare: 1967 No 54 s 80(3) Shares and other securities 124 Assignee may transfer shares and other securities (1) The Assignee may transfer the following property belong- ing to the bankrupt in the same way as the bankrupt could have transferred it if the bankrupt had not been adjudicated bankrupt: (a) (b) (c) (d) (e) securities in a company: securities of the New Zealand Government: securities issued by a local authority: shares in ships: any other property transferable in the records of a com- pany, office, or person.
(3) (2) A person whose act or consent is necessary for the transfer of the property must, on the Assignee’s request, do whatever is necessary for the transfer to be completed.

In the case of the transfer by the Assignee of securities in a company, a shareholder to whom the securities must be of- fered for sale under the constitution and who agrees to pur- chase must pay a reasonable price for the securities, whether or not the constitution provides a procedure for fixing the price.
Compare: 1967 No 54 s 74(1), (2), (3) 125 Assignee may disclaim liability under shares The Assignee may disclaim any liability under shares owned by the bankrupt in any company by disclaiming the shares as onerous property under section 117, but section 119 (which relates to the position of a person who suffers loss as result of disclaimer) and section 120 (which provides that the Assignee may be required to elect whether to disclaim) do not apply to a disclaimer of liability under shares.
Compare: 1967 No 54 s 78(1) 61 Part 3 s 126 Insolvency Act 2006 Reprinted as at 1 April 2010 126 Assignee may be required to elect whether to disclaim liability under shares The Assignee loses the right to disclaim liability under shares if— (a) the company or a person who has an interest in the shares has sent the Assignee a written notice requiring the Assignee to elect whether to disclaim liability under the shares; and the notice specifies a date to disclaim that is not less than 20 working days after the Assignee has received the notice; and the Assignee does not disclaim liability under the shares before the close of that date.
(b) (c) Compare: 1967 No 54 s 78(3) (2) (3) 127 Transfer of shares after disclaimer (1) After disclaimer, the Assignee may, subject to the rules of any other Act and to the constitution of the company, transfer the shares in question to any person who has an interest in them.
If that person refuses to accept the transfer or if no person has an interest in them, the Assignee may transfer the shares to the bankrupt if the bankrupt consents, and in that case the bankrupt is entitled as against the Assignee to retain the shares and the proceeds if the bankrupt sells them.
If the Assignee does not transfer the shares to a person who has an interest in them or to the bankrupt, the board of the company may— (a) (b) with the court’s approval and whatever any other Act may say, cancel the shares as it thinks appropriate.
The Assignee is a director of the company for the purposes of transferring, selling, or cancelling the shares under this section if— (a) sell the shares; or immediately before adjudication the bankrupt was a dir- ector of the company; and the number of directors is less than the minimum num- ber of directors required by law or the company’s con- (4) (b) 62 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 130 stitution as a result of the bankrupt’s disqualification as a director.
Compare: 1967 No 54 s 78(4), (5), (6) 128 Company may prove for unpaid calls (1) This section applies if the Assignee has disclaimed liability under shares and the company has not been put into liquid- ation.

The company may prove in the bankruptcy for— (a) the amount of unpaid calls made before adjudication in respect of the bankrupt’s shares; and the value of calls to be made in respect of the bankrupt’s shares within 1 year after adjudication.
(b) The court must determine the value of the calls to be made if the Assignee and the company cannot agree.
Compare: 1967 No 54 s 78(7) (2) (3) Consumer goods on hire purchase 129 Meaning of hire purchase terms used in this subpart In sections 130 to 133,— cash price, consumer goods, creditor, debtor, and post-pos- session notice have the same meanings as in section 2(1) of the Credit (Repossession) Act 1997 hire purchase agreement has the same meaning as in sec- tion 2(1) of the Administration Act 1969 (except that an agree- ment made otherwise than at retail is not a hire purchase agree- ment for the purposes of this Act) purchaser means the person to whom consumer goods are disposed of under a hire purchase agreement, and, if the rights of that person are transferred by assignment or by operation of law, includes the person for the time being entitled to those rights.
Compare: 1967 No 54 s 91(1) 130 Restrictions on creditor dealing with consumer goods (1) This section applies if— (a) the bankrupt purchased consumer goods under a hire purchase agreement before adjudication; and 63 Part 3 s 131 Insolvency Act 2006 Reprinted as at 1 April 2010 (b) the creditor either— (i) (ii) took possession of the goods within 21 days be- fore adjudication, and after adjudication still pos- sesses them; or takes possession of the goods after adjudication.
The creditor must not sell or dispose of the consumer goods or part with possession of them (except for storage or repair) until 1 month after the date when the creditor serves a post- possession notice on the Assignee (which in this section and section 131 is called the 1-month period).

(2) (3) However, subsection (2) does not apply if the Assignee con- sents in writing to the creditor selling or disposing of or parting with possession of the consumer goods before the expiry of the 1-month period.
Compare: 1967 No 54 s 91(2), (3) 131 Assignee’s powers in relation to hire-purchase consumer (1) (2) goods The Assignee may,— (a) (b) within the 1-month period, exercise the right under sec- tion 30 of the Credit (Repossession) Act 1997 to intro- duce a buyer for consumer goods; or at any time before the creditor sells or agrees to sell consumer goods under section 25 of the Credit (Repos- session) Act 1997, settle the bankrupt’s obligations as debtor in accordance with section 31 of that Act.
This section applies no matter what the Credit (Repossession) Act 1997 says.

Compare: 1967 No 54 s 91(4) 132 Creditor in possession of consumer goods may prove in bankruptcy if Assignee has not exercised powers This section applies if— (a) (1) a creditor has taken possession of consumer goods pur- chased under a hire purchase agreement, whether before or after the adjudication of the debtor; and the Assignee has not acted under section 131 in relation to the goods.
(b) 64 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 134 (2) (3) The creditor may prove in the bankruptcy for the amount (which is subject to the limit in section 35 of the Credit (Repossession) Act 1997) that the creditor was entitled to recover from the bankrupt as debtor.
If the creditor does prove in the bankruptcy under subsec- tion (2),— (a) the creditor must submit the following documents with the creditor’s claim form: (i) (ii) the relevant post-possession notice; and the statement of account mentioned in section 33 of the Credit (Repossession) Act 1997; and the Assignee has the rights conferred on a debtor by sections 20 to 36 of the Credit (Repossession) Act 1997.
(b) Compare: 1967 No 54 s 91(5) 133 Creditor may assign consumer goods to Assignee (1) This section applies if— (a) (b) the bankrupt purchased consumer goods under a hire purchase agreement before adjudication; and at the time of adjudication the creditor either— has not taken possession of the goods; or (i) has taken possession of them and has not sold or (ii) disposed of or parted with possession of them.
(2) The creditor may assign the consumer goods to the Assignee, and, if the creditor does so, may prove in the bankruptcy for the net balance due to the creditor under the agreement.

Compare: 1967 No 54 s 91(6) Second bankruptcy 134 Status of bankrupt’s property on second bankruptcy (1) Notwithstanding section 102, the rules in subsections (2) to (4) apply if a bankrupt, before discharge, is adjudicated bankrupt for a second time.
Property that is acquired by, or has passed to, the bankrupt since the first adjudication, including property acquired or that has passed since the second adjudication, vests in the Assignee in the second bankruptcy.
(2) 65 Part 3 s 135 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) However, the court may, if it thinks it appropriate, order that all or part of the following assets or their proceeds vest in the Assignee in the first bankruptcy: (a) assets in the second bankruptcy that, in the court’s opin- ion, were acquired independently of the creditors in the second bankruptcy: assets in the second bankruptcy that devolved upon the bankrupt.
(b) (4) A surplus in the second bankruptcy is an asset in the estate in the first bankruptcy, and must be paid to the Assignee in the first bankruptcy.

Compare: 1967 No 54 s 59(1)(a), (b), (2) (2) 135 Effect of notice to Assignee of application for adjudication This section applies if the Assignee in a bankruptcy receives (1) notice that a creditor has filed an application for a second ad- judication.
The Assignee must hold property in his or her possession that has been acquired by, or passed to, the bankrupt since the first adjudication until the application for a second adjudication has been dealt with.
The Assignee must transfer the property and its proceeds, less any deduction for the Assignee’s costs and expenses, to the Assignee in second bankruptcy if the creditor’s application re- sults in a second adjudication, or if the bankrupt is automatic- ally adjudicated bankrupt on his or her own application.
Compare: 1967 No 54 s 59(1)(c) (3) Persons jointly adjudicated bankrupt 136 Separate accounts In the case of the adjudication of 2 or more persons jointly, the Assignee must keep distinct accounts of— (a) (b) Compare: 1967 No 54 s 82(1) the joint estate; and the separate estate of each bankrupt.

66 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 140 137 How joint and separate estates must be applied (1) The joint estate must first be applied to the debts due by the bankrupts jointly.
The separate estate of each bankrupt must first be applied to the debts of that bankrupt.

(2) (3) Any surplus in the joint estate must be credited to the separate estate of each bankrupt in proportion to the right and interest of each bankrupt in the joint estate.

(4) Any surplus in the separate estate of a bankrupt must be cred- ited to the joint estate.
Compare: 1967 No 54 s 82(1) Subpart 2—Duties of bankrupt 138 General duty of bankrupt (1) The bankrupt must, to the best of the bankrupt’s ability, assist in the realisation of the bankrupt’s property and the distribu- tion of the proceeds among the creditors.

This duty is in addition to any other duty imposed on the bankrupt by this Act or by any other enactment or law.
Compare: 1967 No 54 s 60 (2) Duties in relation to property 139 Bankrupt must disclose property acquired before discharge The bankrupt must as soon as practicable after acquisition no- tify the Assignee of any property that is— (a) acquired by, or passes to, the bankrupt before discharge; and divisible among the creditors.
(b) Compare: 1967 No 54 s 60(b) 140 Bankrupt must deliver property to Assignee on demand (1) On demand by the Assignee, the bankrupt must deliver all or any of the bankrupt’s property that is divisible among the cred- itors, and that is under the bankrupt’s possession or control, to the Assignee or a person authorised by the Assignee to receive it.
67 Part 3 s 141 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) On demand by the Assignee, the bankrupt must deliver to the Assignee, or a person authorised by the Assignee to receive it, any property that is acquired by, or passes to, the bankrupt before his or her discharge.
Compare: 1967 No 54 s 60(e), (f) 141 Bankrupt must take all steps required in relation to (1) property and distribution of proceeds to creditors The bankrupt must take all the steps (including the steps spe- cified in subsection (2)) in relation to the bankrupt’s property, and the distribution of the proceeds to the creditors, that are— (a) (b) required by the Assignee; or prescribed by rules or regulations made under this Act; or directed to be done by the court by an order made in reference to a particular bankruptcy; or directed to be done by the court on an application by the Assignee or a creditor.
(c) (d) (2) The steps referred to in subsection (1) include the execution by the bankrupt of powers of attorney, conveyances, transfers, deeds, assurances, and instruments.
Compare: 1967 No 54 s 60(d) Duties to provide information 142 Bankrupt must give Assignee accounting records and other documents (a) (1) As soon as practicable after adjudication, the bankrupt must— deliver to the Assignee, at the Assignee’s office, rele- vant documents that are in the bankrupt’s possession or control; and notify the Assignee of relevant documents that are in the possession or control of any other person.
(b) In subsection (1), relevant documents means all accounting records, papers, deeds, instruments, and other documents re- lating to the bankrupt’s estate.
Compare: 1967 No 54 s 61(1) (2) 68 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 146 143 Bankrupt must give Assignee information relating to property The bankrupt must,— (a) as soon as practicable after adjudication, give the As- signee a complete and accurate list of the bankrupt’s property and of the bankrupt’s creditors and debtors, and update the lists as necessary; and give the Assignee any other information relating to the bankrupt’s property that the Assignee requires; and attend before the Assignee when required by the As- signee; and verify any statement by statutory declaration when re- quired by the Assignee.
(b) (c) (d) Compare: 1967 No 54 s 60(a) 144 Bankrupt must give Assignee information relating to income and expenditure When the Assignee requires it, the bankrupt must provide the Assignee with details of his or her income and expenditure since adjudication.
Compare: 1967 No 54 s 60(c) 145 Bankrupt must notify Assignee of change in personal information The bankrupt must immediately notify the Assignee of any change in the bankrupt’s— (a) (b) (c) (d) Compare: 1967 No 54 s 60(g) address; or employment; or name; or income.
146 Bankrupt must give Assignee financial information (1) The bankrupt must give the Assignee (or any person employed by the Assignee) the information and details that are necessary to prepare a statement of financial position of the bankrupt’s estate.
If required by the Assignee, the bankrupt must, within a rea- sonable time of adjudication, prepare and deliver to the As- (2) 69 Part 3 s 147 Insolvency Act 2006 Reprinted as at 1 April 2010 signee full, true, and detailed accounts and statements of fi- nancial position that show— (a) (b) details of the bankrupt’s trading and stocktaking; and details of the bankrupt’s profit and losses during any period in the 3 years before the adjudication.
(3) For the bankrupt to prepare the accounts and statements of financial position referred to in subsection (2),— (a) the Assignee must give the bankrupt full access to the bankrupt’s books and papers in the Assignee’s posses- sion; and if the Assignee thinks it necessary, the bankrupt must be assisted by an accountant at the estate’s expense.
(b) Compare: 1967 No 54 s 61 Subpart 3—Control over bankrupt during bankruptcy 147 Bankrupt may be required to contribute to payment of debts If required by the Assignee, the bankrupt must pay an amount or periodic amounts during the bankruptcy as a contribution towards payment of the bankrupt’s debts.

The Assignee may impose conditions in respect of the pay- ments.
Before the Assignee may require the bankrupt to make the payment or payments, the Assignee must— (a) have regard to all the circumstances of the bankruptcy and the bankrupt’s conduct, earning power, responsibil- ities, and prospects; and (b) make reasonable allowance for the maintenance of the bankrupt and his or her relatives and dependants.

The court may, on the application of the Assignee, order the bankrupt to pay the amount or amounts required by the As- signee.
The court may, on the application of the Assignee, bankrupt, or any creditor,— (a) vary, suspend, or cancel the bankrupt’s obligations to make the payments under this section: the (1) (2) (3) (4) (5) 70 Reprinted as at 1 April 2010 (b) Insolvency Act 2006 Part 3 s 150 vary, suspend, or discharge any order made under sub- section (4): remit any arrears owing by the bankrupt.
(c) Compare: 1967 No 54 s 45 148 Onus of proof if bankrupt defaults in making payment If the bankrupt defaults in making a payment required under section 147, the onus is on the bankrupt in any proceedings arising out of the default to show that the default was not wil- ful.
Compare: 1967 No 54 s 46 149 Prohibition of bankrupt entering business (1) An undischarged bankrupt must not, without the consent of the Assignee or the court, either directly or indirectly,— (a) enter into, carry on, or take part in the management or control of any business: be employed by a relative of the bankrupt: be employed by a company, trust, trustee, or incorpor- ated society that is owned, managed, or controlled by a relative of the bankrupt.
(b) (c) (2) Nothing in this section restricts section 151 of the Companies Act 1993.

Compare: 1967 No 54 s 62 (2) 150 Warrant to search for and seize bankrupt’s property (1) The court may issue a search warrant to the Assignee or any other person if there is reason to believe that any relevant prop- erty is concealed in a locality.
The warrant may authorise the Assignee or other person named in the warrant, together with any assistants that may be necessary, to— (a) (b) (c) enter and search the locality; and seize and take possession of any relevant property; and if necessary, use force to enter the locality, whether by breaking open doors or otherwise; and break open any box or receptacle at the locality, by force if necessary.
(d) 71 Part 3 s 151 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) In this section and in section 151,— locality means any building, aircraft, ship, carriage, vehicle, premises, or place relevant property means— (a) (b) any property of the bankrupt; or any document relating to the bankrupt’s property, con- duct, or dealings.
Compare: 1967 No 54 s 65(2) 151 Seizure of bankrupt’s property (1) If authorised by a warrant issued by the court, the Assignee or any other person, together with any assistants that may be necessary,— (a) may seize any part of the bankrupt’s property in the custody or possession of the bankrupt or of any other person; and (i) (ii) (b) with a view to seizing the bankrupt’s property, may— break open any building or room of the bankrupt where the bankrupt is believed to be; and break open any building, room, or receptacle of the bankrupt where the bankrupt’s property is be- lieved to be; and seize and take possession of the bankrupt’s prop- erty found in the building, room, or receptacle.
(iii) For the purposes of this section and section 150, if the execu- tion of a warrant takes place without the bankrupt being pre- sent, the person executing the warrant must leave in a promi- nent place at the locality searched a notice that— (a) states the date and time when the warrant was executed; and (b) states the name of the person who executed it.
For the purposes of this section and section 150, the person executing the warrant must leave with the bankrupt, or leave in a prominent place at the locality searched if the bankrupt is not present, a list of any property seized during the course of the search.
(2) (3) 72 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 153 (4) (5) (6) Subsection (3) does not apply if it is impractical to leave a list of property seized or if the bankrupt consents to receiving a list sent in accordance with subsection (5).
If subsection (4) applies, the person executing the search must leave with the notice referred to in subsection (2), or with the bankrupt if the bankrupt is present, a notice stating that— (a) relevant property has been seized in the course of the search; and (b) within 5 working days after the execution of the war- rant, a list of the property seized will be delivered or sent to the bankrupt or left in a prominent position at the place searched.
If subsection (4) applies, the person executing the warrant must ensure that within 5 working days after the execution of the warrant there is delivered or sent to the bankrupt, or left in a prominent position at the place searched, a notice listing the property seized and identifying the place where the property was seized.
Compare: 1967 No 54 s 65(1) 152 Bankrupt must vacate land or buildings if required to (1) (2) do so The Assignee may require the bankrupt and any of his or her relatives to vacate any land or building that is part of the prop- erty vested in the Assignee under the bankruptcy.

If the Assignee’s demand is not complied with, the Assignee may apply to a District Court for an order for possession of the land or building.
Compare: 1967 No 54 s 66 153 Bankrupt’s right to inspect documents (1) The bankrupt may at any reasonable time inspect, and take extracts or copies of,— (a) (b) (c) (d) (e) (f) the bankrupt’s accounting records: the bankrupt’s answers to questions under section 87: the bankrupt’s statement of affairs: all proofs of debt: the minutes of any creditors’ meeting: the record of any examination of the bankrupt.
73 Part 3 s 154 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) The bankrupt’s right of inspection under subsection (1) is in addition to any rights that the bankrupt has under the Privacy Act 1993.
Compare: 1967 No 54 s 131 Restrictions on bankrupt dealing with property 154 No power to recover property or give release or discharge (1) After adjudication, the bankrupt, and any person (other than the Assignee) who claims through or under the bankrupt, has no power to— (a) recover any property that is part of the bankrupt’s estate; or (b) give a release or discharge in relation to that property.

Subsection (1) applies subject to the provisions of sections 113 and 114.
Subsection (1) applies whether or not the Assignee has inter- vened.

Compare: 1967 No 54 s 44(a) (2) (3) 155 No steps to defeat beneficial interest (1) After adjudication, the bankrupt must not execute a power of appointment, or any other power vested in the bankrupt, if the result is to defeat or destroy any contingent or other estate or interest in any property to which the bankrupt may otherwise be beneficially entitled at any time before his or her discharge.
The restriction on the bankrupt in subsection (1) applies— (a) both before and after the bankrupt obtains a discharge; and subject to the provisions of sections 113 and 114.
(2) (b) Compare: 1967 No 54 s 44(b) Bankrupt’s bank accounts 156 Bank must notify Assignee of bankrupt’s account (1) A bank that ascertains or has reason to believe that a customer of the bank is an undischarged bankrupt must,— (a) as soon as possible, notify the Assignee of any account that the customer holds with the bank; and 74 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 158 (b) not pay any money out of the account, unless subsec- tion (2) applies.
(2) The bank may pay money out of the account if— (a) the bank is authorised by an order of the court or in- structed by the Assignee to do so; or the bank has notified the Assignee of the account and has not, within 1 month of notification, received any instructions from the Assignee.

(b) (3) At the same time that the bank notifies the Assignee under subsection (1)(a), the bank must as soon as possible notify the customer that it has notified the Assignee.
Compare: 1967 No 54 s 49(5) 157 Assignee may require bank to search account records (1) The Assignee may, by written notice, require a bank to search its account records by comparing the names of its customers with the names (including any aliases) of undischarged bankrupts contained in or annexed to the notice.

The bank must search its account records within 5 working days after receipt of the notice.
(2) Subpart 4—Provision for bankrupt during bankruptcy Provision for bankrupt (2) (3) 158 Bankrupt may retain certain assets (1) The bankrupt may choose and retain as the bankrupt’s own property certain assets up to a maximum value.

In this section, and in section 159, maximum value means the maximum value of the assets specified in subsection (3) that the bankrupt may retain.
The assets and their maximum value are— (a) the bankrupt’s necessary tools of trade—the maximum value is fixed in the Assignee’s discretion: necessary household furniture and effects, including clothing, for the bankrupt and his or her relatives and dependants—the maximum value is fixed in the As- signee’s discretion: (b) 75 Part 3 s 159 Insolvency Act 2006 Reprinted as at 1 April 2010 (4) (5) (c) motor vehicle—$5,000.
For the purposes of this section, the value of an asset is the value that the Assignee in his or her discretion places on it.

The Governor-General may, by Order in Council, amend sub- section (3)(c) by increasing the maximum value, to take ac- count of any rise in the all groups index number of the Con- sumer Price Index.
Compare: 1967 No 54 s 52(1) 159 Bankrupt may retain certain assets with consent of creditors The bankrupt may retain necessary tools of trade and neces- sary household furniture and effects that are worth more than the maximum value, if the creditors consent by an ordinary resolution.
Compare: 1967 No 54 s 52(2) 160 Retention of assets does not affect rights under charge or hire purchase agreement The retention of an asset by the bankrupt under section 158 or 159 does not affect any rights under a valid charge or hire purchase agreement in respect of the asset.
Compare: 1967 No 54 s 52(1) 161 Retention provisions do not confer rights to other assets The fact that the net value of the assets that the bankrupt retains is less than the maximum values specified in section 158 does not give the bankrupt rights in relation to other assets in the bankrupt’s estate.
Compare: 1967 No 54 s 52(1) 162 Relative or dependant may exercise bankrupt’s right to retain assets If the bankrupt has died, a relative or dependant of the bankrupt, who has been approved by the Assignee or the court for this purpose, may exercise the right to retain assets under section 158 or 159 for the benefit of the bankrupt’s relatives and dependants.
Compare: 1967 No 54 s 52(3) 76 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 165 163 Assignee may make allowance to bankrupt The Assignee may make an allowance out of the property of the bankrupt to the bankrupt or any relative or dependant of the bankrupt for the support of the bankrupt and his or her relatives and dependants.
Compare: 1967 No 54 s 53(1) 164 Assignee may allow bankrupt to retain money (1) The Assignee may allow the bankrupt to retain, for the imme- diate maintenance of the bankrupt and his or her relatives and dependants, any money up to a maximum of $1,000 that the bankrupt has in the bankrupt’s possession or in a bank account at the time of adjudication.
The Governor-General may, by Order in Council, amend sub- section (1) by increasing the maximum amount that the As- signee may allow the bankrupt to retain, to take account of any rise in the Consumer Price Index.
Compare: 1967 No 54 s 53(2), (3) (2) Subpart 5—Powers of Assignee and court to examine bankrupt and others Examination of persons summoned by Assignee 165 Assignee may summon bankrupt and others to be (1) examined The Assignee may at any time, before or after a bankrupt’s discharge,— (a) summon any of the persons listed in subsection (2) to appear before the Assignee, another Assignee, or a Dis- trict Court Judge to be examined on oath in relation to the bankrupt’s property, conduct, or dealings; and require that person to produce and surrender to the As- signee or District Court Judge before whom that per- son appears any document in that person’s possession or control that relates to the bankrupt’s property, con- duct, or dealings.
(b) (2) The persons referred to in subsection (1) are— (a) (b) the bankrupt: the bankrupt’s spouse: 77 Part 3 s 166 Insolvency Act 2006 Reprinted as at 1 April 2010 (c) (d) (e) (f) a person known or suspected to possess any of the bankrupt’s property or any document relating to the bankrupt’s property, conduct, or dealings: a person believed to owe the bankrupt money: a person believed by the Assignee to be able to give information regarding— (i) (ii) a trustee of a trust of which the bankrupt is a settlor or of which the bankrupt is or has been a trustee.
the bankrupt; or the bankrupt’s property, conduct, or dealings: Compare: 1967 No 54 s 68(1), (2) 166 Conduct of examination of person summoned by Assignee The Assignee or District Court Judge before whom a person (1) (A) is summoned to appear under section 165 may examine A on oath.

The examination must be recorded in writing, and A must sign the written record if required to do so.
If A does not appear at the appointed time and has no reason- able excuse,— (a) (3) (2) the District Court Judge or the court may, on the As- signee’s application, by warrant, have A arrested and brought for examination by the court; and the court may order A to pay all the expenses arising out of A’s arrest and examination before the court, if the court thinks that A’s evidence was necessary for the purposes of the bankrupt’s estate.
(b) Compare: 1967 No 54 s 68(3)–(5) 167 Expenses of person summoned by Assignee A person who is summoned by the Assignee for examin- ation— (a) is entitled to be paid the prescribed expenses of attend- ing the examination; and does not default in attending if those expenses have not been paid or tendered to him or her before the examin- ation.
(b) Compare: 1967 No 54 s 68(6) 78 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 171 168 Creditor may inspect record of examination A creditor or his or her lawyer may at any reasonable time inspect the record of the examination of a person by a District Court Judge or by the court under section 166.
169 Report of examination must not be published unless court consents (1) A person must not, without the court’s permission under sub- section (2), publish a report of— (a) any examination of a person summoned by the As- signee; or any matter arising in the course of that examination.

(b) (2) On the Assignee’s application, the court may permit publica- tion of a report under the conditions that the court imposes.
(3) A person who contravenes subsection (1) commits an offence and is liable on summary conviction to imprisonment for a term not exceeding 12 months or a fine not exceeding $5,000 or both.
Compare: 1967 No 54 s 68(7) 170 Examination provisions also apply when Assignee appointed receiver and manager of debtor’s property Sections 165 to 169 also apply when the Assignee has been appointed a receiver and manager of all or part of a debtor’s property under section 50, and references in sections 165 to 169 to the bankrupt must be read with all necessary modifica- tions as if they were references to the debtor.
Compare: 1967 No 54 s 68(8) 171 Assignee may obtain documents In addition to the power contained in section 165(1)(b), the Assignee may, by notice in writing, require the bankrupt, the bankrupt’s spouse, or any other person to deliver to the As- signee any document relating to the bankrupt’s property, con- duct, or dealings in that person’s possession or under that per- son’s control.
Compare: 1967 No 54 s 68A 79 Part 3 s 172 Insolvency Act 2006 Reprinted as at 1 April 2010 172 No lien over bankrupt’s documents and other records (1) A person is not entitled as against the Assignee to withhold possession of, or claim a lien over,— (a) (b) a deed or instrument that belongs to the bankrupt; or business records (which include accounting records, ac- counts, receipts, bills, invoices, or any other documents relating to the bankrupt’s accounts, trade dealings, or business).
(2) However, a person (A) may claim as a preferential creditor under section 274(2)(f) if— (a) A has performed services in connection with the bankrupt’s business records or a deed or instrument belonging to the bankrupt; and (b) A has not been paid, or has not been paid in full, for (c) those services; and A would, but for subsection (1), ordinarily have had a lien over the business records, deed, or instrument, as the case may be.
(3) The limit to which A may claim as a preferential creditor under section 274(2)(f) is 10% of the total value of the services stated in subsection (2), up to a maximum amount of $2,000.
Compare: 1967 No 54 s 73 Bankrupt’s public examination 173 Court must hold public examination if Assignee or (1) (2) creditors require The court must hold a public examination of the bankrupt if, before an absolute order for the bankrupt’s discharge is made, there is filed with the court either a statement by the Assignee, or a copy of a creditors’ ordinary resolution, that the bankrupt should be publicly examined.
The copy of the resolution must be certified by the Assignee or the chairperson of the meeting at which it was passed.
Compare: 1967 No 54 s 69(1) 174 Notice of examination (1) If a public examination of the bankrupt is required, the As- signee must serve the bankrupt with a notice that states— 80 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 177 (a) (b) (c) that the Assignee’s statement or the creditors’ resolution has been filed with the court; and that the bankrupt is required to be publicly examined; and the time and place of the examination.
(2) At least 5 working days before the examination, the Assignee must— (a) (b) Compare: 1967 No 54 s 69(1), (2) advertise the examination in the prescribed manner; and send a notice of the examination to each creditor.

175 Time for holding examination The court must hold the public examination of the bankrupt as soon as practicable, but not before 5 working days have elapsed after the Assignee has sent the bankrupt a notice under section 174.
Compare: 1967 No 54 s 69(1) 176 Assignee must file report before examination Before the public examination of the bankrupt, the Assignee must file in the court a report on— (a) (b) (c) Compare: 1967 No 54 s 69(3) the bankrupt’s estate; and the bankrupt’s conduct; and all other matters of which the court should be informed.

177 Conduct of examination (1) (2) (3) The bankrupt must attend the examination, and may be exam- ined as to the bankrupt’s conduct, dealings, and property.
The bankrupt must be examined on oath and must answer all questions that the court asks the bankrupt, or allows the bankrupt to be asked.

The following persons may examine the bankrupt: (a) (b) the Assignee, or counsel for the Assignee: any creditor who has proved a claim, or counsel for that creditor.

81 Part 3 s 178 Insolvency Act 2006 Reprinted as at 1 April 2010 (4) The bankrupt is not entitled to notice beforehand of who will ask the questions or what the questions will be.
Compare: 1967 No 54 s 69(4), (5) (2) (2) 178 Record of examination (1) The examination must be recorded in writing as the court di- rects.

The record of the examination must be— (a) (b) read over to, and signed by, the bankrupt; and available for inspection by any creditor or that creditor’s lawyer at all reasonable times.

Compare: 1967 No 54 s 69(6) 179 When examination ends (1) The public examination of a bankrupt ends when the court makes an order that the examination is ended.
The court must not make an order that the examination is ended unless it is satisfied that the bankrupt’s conduct, deal- ings, and property have been sufficiently investigated and that the investigation is finished.
Compare: 1967 No 54 s 69(7) 180 Bankrupt’s failure to attend examination If the bankrupt does not appear for the examination at the ap- pointed time and has no reasonable excuse,— (a) a District Court Judge or the court may, on the As- signee’s application, by warrant, cause the bankrupt to be arrested and brought up for examination by the court; and the court may order the bankrupt to pay all the ex- penses arising out of the arrest and examination before the court, if the court thinks that the bankrupt’s evidence was necessary for the purposes of the bankrupt’s estate.
(b) Compare: 1967 No 54 ss 68(4), (5), 69(8) 181 Bankrupt’s expenses in attending examination (1) A bankrupt who attends a public examination is entitled to be paid the prescribed expenses of attending.

82 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 183 (2) A bankrupt does not default in attending a public examination if the prescribed expenses of attending have not been paid or tendered to him or her before the examination.
Compare: 1967 No 54 ss 68(6), 69(8) Investigation of company controlled by bankrupt and associate 182 Assignee may examine company documents, personnel, (1) (2) (3) and shareholders If authorised by the court, the assignee or a person appointed by the assignee may exercise the power set out in subsection (2) in relation to a company that is associated with the bankrupt under subpart YB of the Income Tax Act 2007.
The Assignee may— (a) (b) examine the documents of the company: examine any past or present director, employee, or shareholder of the company on oath about the com- pany’s affairs.

The examination of a person under subsection (2)(b) must be recorded in writing, and the person examined must sign the written record if required to do so by the Assignee.
Compare: 1967 No 54 s 74(4) Section 182(1): substituted, on 1 April 2010, by section 861 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

183 Meaning of associate In section 182, associate means any of the following: (a) (b) (c) the bankrupt’s spouse: a lineal ancestor or descendant of the bankrupt: the spouse of a lineal ancestor or descendant of the bankrupt: a brother or sister of the bankrupt: the spouse of a brother or sister of the bankrupt.
(d) (e) Compare: 1967 No 54 s 74(4) 83 Part 3 s 184 Insolvency Act 2006 Reprinted as at 1 April 2010 Privilege and representation of persons examined 184 No privilege against self-incrimination (1) A person who is examined or questioned under any power under this Act must answer all questions relating to the bankrupt’s conduct, dealings, and property.

(2) A person is not excused from answering a question because the question may incriminate or tend to incriminate that person.
Compare: 1967 No 54 s 70(1) 185 Statement made by person examined or questioned not generally admissible in criminal proceedings against that person (1) A statement made by a person examined or questioned under this Act in response to a question is not admissible in criminal proceedings against that person.
(2) However, the statement is admissible if— (a) (b) the person was examined or questioned under oath and is charged with perjury in relation to the statement; or in the case of the bankrupt, the bankrupt is charged with an offence under section 440(1)(b).

Compare: 1967 No 54 s 70(2) 186 Representation (1) A person who is examined under this Act may be represented (2) by a lawyer.

The person may be questioned by his or her lawyer, and any answers form part of the examination.
Compare: 1967 No 54 s 70(3) Subpart 6—Status of bankrupt’s contracts Bankrupt’s contracts entered into before adjudication 187 Assignee may continue or disclaim bankrupt’s contract If the bankrupt is a party to a contract, the Assignee may— (a) continue the contract, subject to the terms of the contract and all relevant rules of law; or 84 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 189 (b) if the contract is onerous property for the purposes of section 117, disclaim it under that section.
Compare: 1967 No 54 s 76 188 Contract terminated by other contracting party (1) This section applies if a contract to which the bankrupt is a party is terminated on the bankrupt’s adjudication by the other contracting party in accordance with the contract.

(2) Whatever the contract may say, the Assignee may recover an amount from the other contracting party that the court thinks is just and equitable in all the circumstances, but the amount must not be greater than the amount set out in subsection (3).
The amount that the Assignee may recover must not be greater than C under the formula A − B = C, where— (a) (3) A is the amount payable to the bankrupt under the con- tract; and B is the total of— (i) (ii) (iii) the amount paid to the bankrupt; and the cost to complete the contract; and a reasonable penalty for delay in completion of the contract.
(b) Compare: 1967 No 54 s 77 Transaction with bankrupt in ignorance of adjudication 189 Payment of money or delivery of property is good (1) (2) discharge This section applies if a person (A) pays money or delivers property— (a) (b) to a person who is a bankrupt (B); or to a person who is subsequently adjudicated bankrupt (C); or to the order of B or C; or (c) to an assignee from B or C; or (d) (e) to the order of an assignee from B or C. The payment or delivery is a good discharge to A if— (a) the payment or delivery was made before the adjudica- tion of B or C, as the case may be, was advertised; and 85 Part 3 s 190 Insolvency Act 2006 Reprinted as at 1 April 2010 (b) A satisfies the court that— (i) (ii) A had no knowledge of the adjudication or that an application for adjudication had been filed; and the payment or delivery was made in the ordin- ary course of business or was otherwise made in good faith.
Compare: 1967 No 54 s 48 Joint contractual liability 190 Bankrupt’s co-contractor may sue and be sued If the bankrupt is jointly liable under a contract with another person, that other person may sue and be sued on the contract without the bankrupt being joined as a party to the proceeding.
Compare: 1967 No 54 s 130 191 Lawyers’ costs Lawyers’ costs The Assignee may recover money paid by a bankrupt, whether before or after adjudication, to his or her lawyer for costs in obtaining an order of adjudication, except for prescribed costs and expenses.
Compare: 1967 No 54 s 12 Subpart 7—Irregular transactions before adjudication 192 Overview of subpart 7 (1) This subpart applies to the following irregular transactions by the bankrupt before adjudication: (a) (b) (c) (d) an insolvent transaction: an insolvent charge: an insolvent gift: a disposition of property to which subpart 6 of Part 6 (setting aside of dispositions that prejudice creditors) of the Property Law Act 2007 applies: a transaction at undervalue: a contribution by the bankrupt to the property of another person.
(e) (f) 86 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 195 (2) Broadly, the effect of this subpart is that the irregular transac- tions listed in subsection (1)(a) to (d) may be cancelled on the Assignee’s initiative, and that, in appropriate cases, the As- signee may recover property or money from a party to an ir- regular transaction with the bankrupt.

Section 192(1)(d): substituted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).
193 Extension of 2 years and 6 months periods A reference in this subpart to 2 years or to 6 months means 2 years or 6 months (as the case may be) extended as follows: (a) in the case of adjudication on a creditor’s application, extended by the period between the time when the ap- plication was served on the bankrupt and the time of adjudication: in the case of adjudication on the bankrupt’s own appli- cation, while a creditor’s application is awaiting a hear- ing, extended by the period between the time when the creditor’s application was served on the bankrupt and the time of adjudication.
(b) Insolvent transactions 194 Insolvent transaction may be cancelled A transaction by the bankrupt may be cancelled on the As- signee’s initiative if it— (a) (b) was made within 2 years immediately before the is an insolvent transaction; and bankrupt’s adjudication.
195 Meaning of insolvent transaction (1) An insolvent transaction is a transaction by the bankrupt that— (a) (b) is entered into at a time when the bankrupt is unable to pay his or her due debts; and enables a creditor to receive more towards satisfaction of a debt by the bankrupt than that person would receive, or would be likely to receive, in the bankruptcy.
87 Part 3 s 196 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) Transaction, as used in the term insolvent transaction, means any of the following steps by the bankrupt: (a) (b) (c) (d) (e) conveying or transferring the bankrupt’s property: giving a charge over the bankrupt’s property: incurring an obligation: undergoing an execution process: paying money (including money paid in accordance with a judgment or an order of a court): anything done or omitted to be done for the purpose of entering into the transaction or giving effect to it.
(f) Compare: 1967 No 54 s 56(1), (2) 196 Insolvent transaction presumed For the purposes of section 194, a transaction that is made within 6 months immediately before the bankrupt’s adjudica- tion is presumed, unless the contrary is proved, to be made at a time when the bankrupt is unable to pay his or her due debts.
197 When series of transactions must be regarded as single transaction Where— (a) (b) then— (c) a transaction is, for commercial purposes, an integral part of a continuing business relationship (for example, a running account) between the bankrupt and a creditor (including a relationship to which other persons are par- ties); and the level of the in the course of the relationship, bankrupt’s net indebtedness to the creditor is increased and reduced from time to time as the result of a series of transactions forming part of the relationship; section 194 applies in relation to all the transactions forming part of the relationship as if they together con- stituted a single transaction; and the transaction referred to in paragraph (a) may only be taken to be an insolvent transaction that may be can- celled by the Assignee if the effect of applying sec- tion 194 in accordance with paragraph (c) is that the single transaction referred to in paragraph (c) is taken (d) 88 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 200 to be an insolvent transaction that may be cancelled by the Assignee.
Insolvent charges 198 Insolvent charge may be cancelled A charge over any property of a bankrupt may be cancelled on the Assignee’s initiative if— (a) the charge was given within 2 years immediately before the bankrupt’s adjudication; and immediately after the charge was given, the bankrupt was unable to pay his or her due debts.
(b) Compare: 1967 No 54 s 57(1) 199 Charge for new consideration or charge in substitution not affected (1) A charge may not be cancelled under section 198 if the charge secures money actually advanced or paid, or the actual price or value of property sold or supplied, or any other valuable consideration given in good faith, by the secured creditor to the bankrupt at the time when, or at any time after, the bankrupt gave the charge.
(2) A charge may not be cancelled under section 198 if the charge is a substitute for an existing charge that was given by the bankrupt more than 2 years before adjudication, except to the extent that— (a) the amount secured by the substituted charge is greater than the amount that was secured by the existing charge; or the value of the property subject to the substituted charge at the date of substitution was greater than the value of the property subject to the existing charge at that date.
(b) Compare: 1967 No 54 s 57(2)(a) 200 Presumption that bankrupt unable to pay due debts A bankrupt who gives a charge within 6 months immediately before adjudication is presumed, unless the contrary is proved, 89 Part 3 s 201 Insolvency Act 2006 Reprinted as at 1 April 2010 to have been unable to pay his or her due debts immediately after giving the charge.
201 Charge for unpaid purchase price given after sale of (1) (2) property This section applies if the bankrupt, after purchasing property, has within 2 years immediately before adjudication given the seller a charge over the property.
Section 198 does not affect the charge to the extent that it se- cures unpaid purchase money, whether it is unpaid in relation to the property over which the charge is given or some other property, if the charge was given not more than 15 working days after the date of the sale of the property to the bankrupt.
Compare: 1967 No 54 s 57(2)(b) 202 Appropriation of payments by bankrupt to secured (1) (2) creditor This section applies if the bankrupt has made a payment or payments to a secured creditor after the bankrupt has given a charge to which section 199 or 201 applies.
The bankrupt’s payment or payments must be credited (as far as is necessary) towards— (a) repayment of the money actually advanced or paid by the secured creditor to the bankrupt when or after the bankrupt gave the charge; or payment of the actual price or value of property sold or supplied by the secured creditor to the bankrupt when or after the bankrupt gave the charge; or payment of any other liability of the bankrupt to the se- cured creditor in respect of any other valuable consid- eration given in good faith when or after the bankrupt gave the charge.
(b) (c) (3) Nothing in this section applies to any payments received by any registered bank within the meaning of the Reserve Bank of New Zealand Act 1989 in good faith in the ordinary course of business and without negligence.
Compare: 1967 No 54 s 57(3) 90 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 206 203 Charge agreed before specified period may not be cancelled A charge given by the bankrupt under an agreement to give the charge that was made before the period of 2 years immediately before adjudication may not be cancelled under section 198.
Compare: 1967 No 54 s 57(4)(a) Insolvent gifts 204 Insolvent gift within 2 years may be cancelled A gift by a bankrupt to another person may be cancelled on the Assignee’s initiative if the bankrupt made the gift within 2 years immediately before adjudication.

Section 204: substituted, on 17 November 2009, by section 4 of the Insolvency Amendment Act 2009 (2009 No 52).
205 Insolvent gift within 2 to 5 years may be cancelled if bankrupt unable to pay debts (1) A gift by a bankrupt to another person may be cancelled on the Assignee’s initiative if— (a) the bankrupt made the gift within the period begin- ning 2 years immediately before adjudication and end- ing 5 years immediately before adjudication; and the bankrupt was unable to pay his or her debts.
(b) (2) A bankrupt is presumed to have been unable to pay his or her debts for the purpose of subsection (1)(b) unless the party claiming under the gift proves that the bankrupt was immedi- ately after the making of the gift, or at any time after that up to his or her adjudication, able to pay his or her debts without the aid of the property that the gift is composed of.

Section 205: substituted, on 17 November 2009, by section 4 of the Insolvency Amendment Act 2009 (2009 No 52).
Procedure for cancelling irregular transactions 206 Procedure for cancelling irregular transactions (1) The procedure set out in this section applies to the following irregular transactions: (a) (b) an insolvent transaction: an insolvent charge: 91 Part 3 s 206 Insolvency Act 2006 Reprinted as at 1 April 2010 (c) (d) an insolvent gift: a disposition of property to which subpart 6 of Part 6 (setting aside of dispositions that prejudice creditors) of the Property Law Act 2007 applies.
The Assignee who wishes to cancel an irregular transaction to which this section applies must— (a) file a notice with the court that meets the requirements set out in subsection (3); and serve the notice on— (i) (ii) the other party to the transaction; and any other party from whom the Assignee intends to recover.
(b) The notice must— (a) (b) be in writing; and state the Assignee’s postal, email, and street addresses; and specify the irregular transaction to be cancelled; and describe the property or state the amount that the As- signee wishes to recover; and state that the person named in the notice may object to the cancellation of the transaction by sending to the As- signee a written notice of objection that is received by the Assignee at his or her postal, email, or street address within 20 working days after the Assignee’s notice has been served on that person; and state that the written notice of objection must contain the reasons for objecting; and state that the transaction will be cancelled as against the person named in the notice if that person does not object; and state that if the person named in the notice does object, the Assignee may apply to the court for the transaction to be cancelled.
(c) (d) (e) (f) (g) (h) The irregular transaction is automatically cancelled as against the person on whom the Assignee has served the Assignee’s notice, if that person has not objected by sending to the As- signee a written notice of objection that is received by the As- signee at his or her postal, email, or street address within 20 (2) (3) (4) 92 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 208 working days after the Assignee’s notice has been served on that person.
The notice of objection must state the reasons for objecting.

(5) (6) An irregular transaction that is not automatically cancelled may still be cancelled by the court on the Assignee’s appli- cation.

Compare: 1967 No 54 s 58(1) Section 206(1)(d): substituted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).
207 Court may order retransfer of property or payment of value (1) On the cancellation of an irregular transaction under which property of the bankrupt, or an interest in property of the bankrupt, was transferred the court may make an order for— the retransfer to the Assignee of the property or interest (a) in the property; or payment to the Assignee of a sum of money that the court thinks appropriate, but the sum must not be greater than the value of the property or interest in the property when the transaction was cancelled.
(b) (2) The court may make any other order for the purpose of giving effect to an order under subsection (1).

(3) An order under subsection (1) is in addition to any other rights and remedies available to the Assignee, and this section does not restrict those rights.
Compare: 1967 No 54 s 58(2)–(4) 208 Limits on recovery The court must not make an order under section 207 against a person (A) if A proves that when A received the property or interest in the property— (a) (b) A acted in good faith; and a reasonable person in A’s position would not have sus- pected, and A did not have reasonable grounds for sus- pecting, that,— (i) in the case of an insolvent gift, the bankrupt was, or would become, unable to pay his or her debts 93 Part 3 s 209 Insolvency Act 2006 Reprinted as at 1 April 2010 (ii) without the aid of the property that the gift is composed of; or in the case of any other irregular transaction re- ferred to in section 206(1), the bankrupt was, or would become, unable to pay his or her due debts; and (c) A gave value for the property or interest in the property or altered A’s position in the reasonably held belief that the transfer of the property or interest in the property to A was valid and would not be cancelled.
Compare: 1967 No 54 s 58(6) Section 208(b): substituted, on 17 November 2009, by section 5 of the Insol- vency Amendment Act 2009 (2009 No 52).

209 Recovery by appointee The provisions of sections 206 to 208 apply to the recovery of property or its value by an appointee under Part 6 as if each reference to the Assignee were a reference to the appointee acting under Part 6.

210 Land Transfer Act 1952 does not limit sections 206 to 209 The Land Transfer Act 1952 does not limit sections 206 to 209.
Compare: 1967 No 54 s 58(7) Transactions at undervalue 211 Assignee may recover difference in value (1) Under section 212, the Assignee may recover from a person (X), who is a party to a transaction with the bankrupt, the amount C in the formula A − B = C, where— (a) A is the value that X received from the bankrupt under the transaction; and B is the value (if any) that the bankrupt received from X under the transaction.
(b) (2) In this section and in section 212, transaction includes the giving of a guarantee by the bankrupt.
Compare: 1993 No 105 s 297(1) 94 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 213 212 When Assignee may recover difference The Assignee may recover the difference in value (that is, C in the formula in section 211(1)) from X if— (a) the bankrupt entered into the transaction with X within 2 years immediately before adjudication; and either— (i) (b) the bankrupt was unable to pay his or her debts when the bankrupt entered into the transaction; or the bankrupt became unable to pay his or her debts as a result of entering into the transaction.
(ii) Compare: 1993 No 105 s 297(1) Section 212(b)(i): amended, on 17 November 2009, by section 6 of the Insol- vency Amendment Act 2009 (2009 No 52).

Section 212(b)(ii): amended, on 17 November 2009, by section 6 of the Insol- vency Amendment Act 2009 (2009 No 52).
Bankrupt’s contribution to another person’s property 213 Court may order recipient to pay value to Assignee (1) On the application of the Assignee, the court may order the recipient of a contribution by the bankrupt to the recipient’s property to pay the value of the contribution to the Assignee.
The court may make the order if— (a) (2) (b) (c) the bankrupt was not paid an adequate amount in money or money’s worth for the contribution; and the value of the bankrupt’s assets was reduced by the contribution; and the bankrupt made the contribution— (i) within 2 years immediately before adjudication; or (ii) within 5 years immediately before adjudication, and the recipient is not able to prove that the bankrupt, either at the time of the contribution or at any later time before adjudication, was able to pay the bankrupt’s debts without the aid of the contribution.
95 Part 3 s 214 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) For the purposes of this section and section 214, a bankrupt has made a contribution to the recipient’s property if the bankrupt has— (a) erected buildings on, or otherwise improved, land or any other property of the recipient; or bought land or any other property in the recipient’s name; or provided money to buy land or any other property in the recipient’s name or on the recipient’s behalf; or paid instalments for the purchase of, or towards the pur- chase of, land or any other property in the recipient’s name or on the recipient’s behalf.
(b) (c) (d) Compare: 1967 No 54 s 55(1), (2) 214 Court’s powers in relation to bankrupt’s contribution to recipient’s property The court may ascertain the value of the bankrupt’s contribu- tion (including any payments of legal expenses, interest, rates, and other expenses or charges) for the purposes of section 213, and order the recipient to pay it to the Assignee.
The court may order the recipient to pay less than the value of the contribution, or refuse to order the recipient to pay any- thing, if— (a) the recipient acted in good faith and has altered the re- cipient’s position in the reasonably held belief that the bankrupt’s contribution was valid and that the recipient would not be liable to repay it in full or in part; or in the court’s opinion, it is unfair that the recipient should repay all or part of the contribution.
(b) If the court orders that the recipient must repay the bankrupt’s contribution, the court may also (in the same or a subsequent order)— (a) direct the Assignee to sell the whole or part of the rele- vant property, and to convey or transfer it to the buyer; and (b) make vesting and other orders that are necessary for the sale and conveyance or transfer of the property.
Compare: 1967 No 54 s 55(2)(a), (b) (1) (2) (3) 96 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 217 215 How Assignee must use repayment of bankrupt’s contribution to property The Assignee must use the money repaid under section 213 by the recipient of a contribution by the bankrupt to property, or the proceeds of the sale of the property, as the case may be, by taking the following steps in order: (a) first, the Assignee must keep as much of the proceeds as the Assignee needs, when added to the other assets in the bankrupt’s estate, to pay the creditors in full (in- cluding interest) under section 274 (Step 1); and secondly, if there is a surplus after the creditors have been paid in full, the Assignee must pay as much of the surplus to the recipient of the property to which the bankrupt has contributed as was repaid under sec- tion 213 (Step 2); and the Assignee must not pay anything to the thirdly, bankrupt before the Assignee has taken Step 1 and Step 2.
(b) (c) Compare: 1967 No 54 s 55(2)(c) 216 Land Transfer Act 1952 does not limit sections 213 to 215 The Land Transfer Act 1952 does not limit sections 213 to 215.

Compare: 1967 No 54 s 55(4) Subpart 8—Role and powers of Assignee Powers of Assignee 217 Assignee’s general powers (1) The Assignee has the powers— (a) necessary to carry out the functions and duties of the Assignee under this Act; and conferred on the Assignee by this Act.

(b) In particular, the Assignee has the powers set out in Sched- ule 1.
Compare: 1967 No 54 s 71 (2) 97 Part 3 s 218 Insolvency Act 2006 Reprinted as at 1 April 2010 218 Assignee must not sell bankrupt’s property before first creditors’ meeting The Assignee must not sell any of the bankrupt’s property be- fore the first creditors’ meeting, unless— (a) the property is perishable property or is likely to fall rapidly in value; or in the Assignee’s opinion, the sale of the property might be prejudiced by delay; or expenses will be incurred by the delay, and before sell- ing the Assignee consults a creditor or creditors.
(b) (c) Compare: 1967 No 54 s 72(4) 219 Title of purchaser from Assignee The title of a purchaser of the bankrupt’s property from the Assignee under a document that is made in the exercise of the Assignee’s power of sale in Schedule 1— (a) (b) cannot be challenged except on the ground of fraud; and is not affected by an absence of authority to sell, or the improper or irregular exercise of the power of sale.
Compare: 1967 No 54 s 72(5) (2) 220 Obligation to bank and power to invest money (1) The Assignee must have a bank account and, as may be pre- scribed by regulations made under this Act, must pay into that account all money that the Assignee receives in that capacity.
The Assignee may invest money that is not immediately re- quired to be paid out in the administration of a particular estate in an investment of a type approved by the Auditor-General, and must credit to that estate the interest or dividends that ac- crue on the investment.

Compare: 1967 No 54 s 81 221 Assignee may assign right to sue under this Act (1) The Assignee may, if the court has first approved it, assign any right to sue that is conferred on the Assignee by this Act.
The application for approval may be— (a) made by the Assignee or the person to whom it is pro- posed to assign the right to sue; and (2) 98 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 223 (b) opposed by a person who is a defendant to the As- signee’s action, if already begun, or a proposed defen- dant.
222 Proceedings by Assignee when bankrupt is partner in (1) (2) (3) business partnership If a member of a business partnership is adjudicated bankrupt, the court may authorise the Assignee to bring a proceeding in the names of the Assignee and the bankrupt’s partner (P).

The Assignee must serve notice on P of the application for authority to bring the proceeding, and P may oppose the ap- plication.
P may apply to the court for a direction that— (a) (b) P must be paid P’s proper share of the proceeds of the proceeding; or P must be indemnified by the Assignee against any costs incurred in the proceeding, on the condition that P does not claim any benefit from the proceeding.

(4) Any release by P of the debt or demand to which the proceed- ing relates is void.
Compare: 1967 No 54 s 82(2) Notice by Assignee 223 Means of giving notice to creditors Any requirement under this Act that the Assignee give notice to a creditor is satisfied,— (a) in the case of a natural person, if the notice is— (i) (ii) delivered to that person; or posted to that person’s address or delivered to a box at a document exchange that that person is using at the time; or sent by facsimile machine to a telephone number used by that person for the transmission of docu- ments by facsimile: (iii) (b) in the case of a company, if the notice is sent in accord- ance with section 388 of the Companies Act 1993: 99 Part 3 s 224 Insolvency Act 2006 Reprinted as at 1 April 2010 (c) (d) in the case of an overseas company, if the notice is sent in accordance with section 390 of the Companies Act 1993: in the case of a body corporate that is not a company or an overseas company, if the notice is sent in accordance with section 391(3) of the Companies Act 1993.
Assignee’s decisions 224 Assignee’s discretion (1) (2) The Assignee may use his or her own discretion in the admin- istration of the bankrupt’s property, but must have regard to the resolutions of the creditors at creditors’ meetings.

The Assignee or a creditor may apply to the court for directions if the Assignee or creditor believes that a resolution of the creditors— (a) (b) Compare: 1967 No 54 s 84 conflicts with this Act or any legal rule; or is unjust or unfair.
225 Assignee may apply for directions by court (1) The Assignee may apply to the court for directions on any question concerning the operation of this Act.

(2) An Assignee who acts under a direction of the court discharges his or her duty in relation to the question for which a direction was sought, and it does not matter that subsequently the direc- tion is invalidated, overruled, or set aside or becomes ineffec- tive.
(3) However, the Assignee is not protected by subsection (2) if, in obtaining or following the court’s direction, the Assignee was guilty of— (a) (b) Compare: 1967 No 54 s 85 fraud; or deliberate concealment or misrepresentation.
226 Appeal from Assignee’s decision (1) A person (including the bankrupt or a creditor) whose inter- ests, monetary or otherwise, are detrimentally affected by an 100 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 228 (2) act or decision to which this section applies may apply to the court to reverse or modify the act or decision.

This section applies to— (a) (b) an act or decision of the Assignee; or a decision of a District Court Judge in carrying out an examination under section 165.
(3) within 15 working days of the act or decision; or The application must be made— (a) (b) within the additional time that the court allows.

(4) The court may confirm, reverse, or modify the act or decision.

(5) A creditor who is aggrieved by a decision of the Assignee re- jecting the creditor’s claim may make an application under section 239.
Compare: 1967 No 54 s 86 Assignee’s accounting records 227 Assignee must keep proper accounting records (1) Every Assignee must— (a) keep proper accounting records for each bankruptcy, in the prescribed form; and verify those records by statutory declaration, when re- quired by the court.

(b) (2) A creditor or any person who has an interest may inspect the Assignee’s accounting records for a particular bankruptcy.
Compare: 1967 No 54 s 132(1), (2) 228 Assignee’s final statement of receipts and payments (1) The Assignee must prepare a final statement of receipts and payments— (a) as soon as practicable after the distribution of the final dividend has been determined; or (b) when the whole of the bankrupt’s property has been re- alised, if there are insufficient assets to pay all the proofs of debt.
(2) The final statement of receipts and payments must— (a) show in detail the receipts and payments in respect of the bankrupt’s estate; and 101 Part 3 s 229 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) (b) be able to be inspected without fee by any creditor or other person who has an interest.

The Assignee must publish the final statement of receipts and payments in the prescribed manner, and advertise in the pre- scribed manner that it has been published.
Compare: 1967 No 54 s 132(2)–(5) 229 Auditor-General may audit Assignee’s accounts The Auditor-General may, at the Auditor-General’s discretion, audit— (a) (b) the Assignee’s accounting records for any bankruptcy: any statement of accounts and statement of financial position prepared by the Assignee under section 228: any account maintained by the Assignee for the pur- poses of this Act.
Compare: 1967 No 54 s 132A (c) 230 Assignee may return or destroy accounting records After 1 year after the discharge of the bankrupt, the Assignee may dispose of the accounting records deposited with the As- signee for the purposes of the bankruptcy by— (a) delivering them to the bankrupt or the bankrupt’s per- sonal representative, if requested; or destroying or otherwise disposing of them.
(b) Compare: 1967 No 54 s 136 Subpart 9—Creditors’ claims Provable debts 231 Meaning of provable debt (1) A provable debt is a debt or liability that a creditor of the bankrupt may prove in the bankruptcy.

(2) A creditor’s claim form is the document that a creditor sub- mits to the Assignee for the purpose of proving the debt.

(3) A debt is proved when it is admitted by the Assignee.
232 What debts are provable debts (1) A provable debt is a debt or liability that the bankrupt owes— 102 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 233 (a) (b) at the time of adjudication; or after adjudication but before discharge, by reason of an obligation incurred by the bankrupt before adjudication.
(2) A fine, penalty, sentence of reparation, or other order for the payment of money that has been made following any convic- tion or order made under section 106 of the Sentencing Act 2002— (a) (b) is not a provable debt; and is not discharged when the bankrupt is discharged from bankruptcy.
Compare: 1967 No 54 s 87 Procedure for proving debt (2) 233 Creditor must submit creditor’s claim form (1) A creditor, including a creditor who has a preferential claim, who wishes to claim in the bankruptcy must submit a creditor’s claim form to the Assignee within the specified time.

In subsection (1), specified time means the time for submitting the claim form that is specified by the Assignee by notice to the creditor or that is specified by the Assignee by advertisement in the prescribed manner.
The claim form must comply with the prescribed formalities.

(3) (4) A creditor must submit the claim form in accordance with the (5) (6) prescribed procedure.

The creditor must bear the costs of proving the debt, unless the court makes an order as to the creditor’s costs under sec- tion 242.

The creditor may amend or withdraw the claim form, but an amended form must comply with the formalities prescribed for the original claim form.
Compare: 1967 No 54 s 88(1), (2), (3), (5) 103 Part 3 s 234 Insolvency Act 2006 Reprinted as at 1 April 2010 Role of Assignee in examining creditor’s claim form 234 Assignee must examine creditor’s claim form (1) The Assignee must examine each creditor’s claim form and the grounds of the debt, unless the Assignee considers it likely that no dividend will be paid to creditors.
(2) After examining the claim form, the Assignee must, as soon as practicable, do 1 or more of the following: (a) (b) (c) Compare: 1967 No 54 s 89(1) admit the claim, in whole or in part: reject the claim, in whole or in part: require further evidence in support of the claim.
235 Assignee must give creditor notice of grounds of rejection If the Assignee rejects a creditor’s claim, or part of it, the As- signee must as soon as practicable give the creditor notice of the Assignee’s grounds for rejecting the claim.
Compare: 1967 No 54 s 89(3) 236 Assignee’s power to obtain evidence of debt (1) (c) The Assignee may summon for examination, and examine (on oath or otherwise), any of the following persons: (a) (b) a person who has submitted a creditor’s claim: a person who has made a declaration or statement as part of a creditor’s claim: a person who is capable of giving evidence concerning a creditor’s claim or the debt to which the claim relates.
If a person (A) who has been summoned under this section fails to attend, or attends but refuses to be sworn or give evi- dence, and has no reasonable excuse, the court may— (a) on the Assignee’s application, by warrant have A ar- rested and brought for examination by the court; and order A to pay all the expenses arising out of A’s arrest and examination, if the court thinks that A’s evidence was necessary for deciding whether the creditor’s claim in question should be admitted or rejected.
(b) Compare: 1967 No 54 s 89(2) (2) 104 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 239 (2) 237 Notice to Assignee to admit or reject creditor’s claim (1) The bankrupt or any creditor may give the Assignee notice to admit or reject a creditor’s claim.
If, after 10 working days after receiving the notice, the As- signee has not made a decision admitting or rejecting the cred- itor’s claim, on the application of the bankrupt or the creditor the court may— (a) (b) make any other order that it thinks appropriate.
Compare: 1967 No 54 s 89(6) admit or reject the claim; or 238 Court may cancel creditor’s claim (1) The court may make an order cancelling an admitted creditor’s claim or reducing the amount claimed, if it considers that the claim was improperly admitted.

The court may make the order on the application of the As- signee, the bankrupt, or any creditor.

The court must not make an order under subsection (1) unless the creditor who submitted the claim has been served with the application.
Compare: 1967 No 54 s 89(5) (2) (3) 239 Court may reverse or modify Assignee’s decision rejecting creditor’s claim (2) (1) A creditor whose claim has been rejected by the Assignee may apply to the court for an order modifying or reversing the As- signee’s decision.

The creditor must apply within 15 working days after the cred- itor receives the Assignee’s notice of rejection of the claim, or within the additional time that the court allows.
The court may— (a) reverse or modify the Assignee’s decision in whole or in part; or confirm it.

(3) (b) (4) A creditor has no right to prove for a debt or liability that has been rejected by the Assignee, unless the creditor has made an application under this section.
Compare: 1967 No 54 s 89(4) 105 Part 3 s 240 Insolvency Act 2006 Reprinted as at 1 April 2010 240 Parties to application to court in relation to creditor’s (1) (2) (3) claim This section applies to an application that is made under sec- tion 237, 238, or section 239.

If the applicant is not the Assignee, the applicant must name and serve the Assignee as a party to the proceeding.
The bankrupt and any creditor may give notice to the court hearing the application, and, on doing so, become parties to the proceeding.

Compare: 1967 No 54 s 89(7) 241 Which court may hear application in relation to creditor’s (1) (2) (3) (4) claim If the creditor’s claim is for a sum of not more than $200,000, an application under section 237, 238, or 239 may be made to the District Court.
In that case, the provisions of the District Courts Act 1947 as to appeals and the transfer of proceedings to the High Court apply as if the application were an action and the amount of the creditor’s claim in dispute were the amount of a claim in the action.

If the creditor’s claim is for a sum of more than $200,000, an application under section 237, 238, or 239 may be made to the High Court.
In that case, the decision of the High Court may be taken on appeal to the Court of Appeal by— (a) any party to the proceeding, if the High Court gives that party leave to appeal: any aggrieved person.
(b) Compare: 1967 No 54 s 89(8), (9) 242 Court may make order as to costs On an application under section 237, 238, or 239, the court hearing the application may, if it thinks it appropriate, order that— (a) (b) any costs of a creditor be added to the creditor’s claim: any costs of any party to the proceeding be paid out of the bankrupt’s estate: 106 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 244 (c) any costs be paid by any party to the proceedings, except the Assignee.
Compare: 1967 No 54 s 89(10) Secured creditors 243 Secured creditor’s options in relation to property subject to charge (1) A secured creditor may— (a) (b) (c) realise property subject to a charge, if entitled to do so (Option 1); or value the property subject to the charge and prove in the bankruptcy as an unsecured creditor for the balance due (if any) after deducting the amount of the valuation (Option 2); or surrender the charge to the Assignee for the general benefit of the creditors and prove in the bankruptcy as an unsecured creditor for the whole debt (Option 3).
(2) Despite subsection (1), a secured creditor may exercise Op- tion 1 whether or not the creditor has exercised Option 2.
Compare: 1993 No 105 s 305(1), (2) 244 Assignee may require secured creditor to choose option (1) The Assignee may at any time, by notice in writing, require a secured creditor, within 20 working days after receipt of the notice, to— (a) (b) choose one of the options in section 243(1); and if the creditor chooses Option 2 or Option 3, exercise that option within the 20-working day period.
(2) A secured creditor who has been served with a notice under subsection (1) and fails to comply— (a) is treated as having surrendered the charge to the As- signee under Option 3 in section 243(1) for the general benefit of the creditors; and (b) may prove as an unsecured creditor for the whole debt.
Compare: 1993 No 105 s 305(8), (9) 107 Part 3 s 245 Insolvency Act 2006 Reprinted as at 1 April 2010 245 Assignee not required to act in relation to certain property subject to charge The Assignee may, but is not required to, carry out any duty or exercise any power in relation to property that is subject to a charge, except property subject to a charge that has been surrendered under section 243(1)(c) or 244(2)(a).
Compare: 1993 No 105 s 254(a) 246 Realisation of property subject to security (1) A secured creditor who realises property subject to a charge may prove as an unsecured creditor for any balance due after deducting the net amount realised.

(2) However, subsection (1) does not apply if the Assignee has accepted a valuation and creditor’s claim under section 249.
(3) A secured creditor who realises property subject to a charge must account to the Assignee for any surplus remaining after the following amounts have been paid: (a) (b) the amount of the debt: interest payable on the debt up to the time when it is paid: any proper payments to the holder of any other charge over the property.
(c) Compare: 1993 No 105 s 305(3) 247 Valuation of charge and proof for balance due (1) This section applies if a secured creditor values the property subject to the charge and seeks to prove as an unsecured cred- itor for the balance due after deducting the amount of the valu- ation.
The valuation and the claim for the balance must— (a) (b) (c) be made in the prescribed creditor’s claim form; and contain full particulars of the valuation and the debt; and contain full particulars of the charge, including the date when it was given; and identify any documents that substantiate the debt and the charge.

(d) The creditor must produce any document identified under sub- section (2)(d) if required by the Assignee.
Compare: 1993 No 105 s 305(4), (5) (2) (3) 108 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 249 248 False claim by secured creditor (1) A person commits an offence if that person— (a) makes, or authorises the making of, a claim under sec- tion 247(1) that is false or misleading in a material par- ticular knowing that it is false or misleading; or omits, or authorises the omission of, any matter from a claim under section 247(1) knowing that the omission makes the claim false or misleading.
(b) (2) A person who commits an offence under this section is liable on conviction on indictment to imprisonment for a term not exceeding 5 years or to a fine not exceeding $200,000 or both.
Compare: 1993 No 105 s 305(11) 249 Assignee’s powers when secured creditor values property (1) (2) (3) (4) (5) subject to charge and proves for balance If a secured creditor values the property subject to the charge and seeks to prove for the balance due, the Assignee must— accept the valuation and the creditor’s claim; or (a) reject the valuation and creditor’s claim in whole or in (b) part.
If the Assignee rejects the valuation and creditor’s claim, the creditor may submit a revised valuation and creditor’s claim form within 10 working days after receiving notice of the re- jection.

The Assignee may revoke or amend a decision rejecting a valuation and creditor’s claim, if the Assignee subsequently thinks that the decision was wrong.
If the Assignee accepts the valuation and creditor’s claim, the Assignee may, at any time before the creditor realises the prop- erty, redeem the charge by paying the amount of the valuation to the creditor.

In subsection (4), the Assignee accepts the valuation and cred- itor’s claim if the Assignee— (a) accepts the original or an amended valuation and cred- itor’s claim: accepts a valuation and creditor’s claim after amending or revoking a decision to reject a valuation and cred- itor’s claim.
(b) Compare: 1993 No 105 s 305(6), (7) 109 Part 3 s 250 Insolvency Act 2006 Reprinted as at 1 April 2010 250 Secured creditor who surrenders charge may withdraw (1) (2) (3) surrender or submit new creditor’s claim This section applies to a secured creditor who has surrendered a charge under Option 3 in section 243(1)(c) or under sec- tion 244(2).
The creditor may, with the leave of the court or the Assignee and subject to the terms and conditions that the court or the Assignee imposes,— (a) (b) withdraw the surrender and rely on the charge; or submit a new creditor’s claim under section 243(1)(c) or 244(2)(b).

Subsection (2) does not apply if the Assignee has already re- alised the property subject to the charge.
Compare: 1993 No 105 s 305(10) Creditors’ claims subject to uncertainty 251 Assignee may estimate amount of uncertain creditor’s claim If a creditor’s claim is subject to a contingency or is for dam- ages, or if, for some other reason, the amount of the claim is uncertain, the Assignee may estimate the amount of the claim.
Compare: 1967 No 54 s 98; 1993 No 105 s 307(1) 252 Application to court to determine amount of uncertain creditor’s claim The court must determine the amount of an uncertain creditor’s claim on the application of— (a) the Assignee, if the Assignee chooses not to estimate the amount: a creditor, if the Assignee has estimated the amount and the creditor is aggrieved by the estimate.
(b) Compare: 1967 No 54 s 99; 1993 No 105 s 307(2) 110 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 254 Creditors’ claims payable after adjudication 253 Creditor’s claim payable 6 months or more after adjudication (2) (1) A creditor’s claim that would, but for the bankruptcy, be payable 6 months or more after the date of adjudication is treated as a claim for the present value of the debt.
The present value of the debt is calculated by deducting inter- est at the rate prescribed under section 87(3) of the Judicature Act 1908 for the period from the date of adjudication to the date when the debt would be payable.
Compare: 1967 No 54 s 95; 1993 No 105 s 309 Set-off 254 Mutual credit and set-off (1) If there have been mutual credits, mutual debts, or other mu- tual dealings between a bankrupt and another person,— (a) an account must be taken of what is due from the one party to the other in respect of those credits, debts, or dealings; and an amount due from one party to the other must be set off against an amount due from the other party; and only the balance of the account may be proved in the bankruptcy, or is payable to the Assignee, as the case may be.
(b) (c) (2) However, a person (A) may not claim the benefit of any set-off against an amount due by the bankrupt if, when A gave credit to the bankrupt, A had notice of an available act of bankruptcy by the bankrupt.

(3) A creditor of the bankrupt who claims a set-off must declare in that person’s creditor’s claim form that, when the creditor gave the bankrupt credit, the creditor did not have notice of an available act of bankruptcy by the bankrupt.
Compare: 1967 No 54 s 93; 1993 No 105 s 310(1) 111 Part 3 s 255 Insolvency Act 2006 Reprinted as at 1 April 2010 Set-off under netting agreement 255 Definitions relating to set-off under netting agreement (b) (ii) In this section and in sections 256 to 263, unless the context otherwise requires,— Bank means the Reserve Bank of New Zealand bilateral netting agreement means an agreement that pro- vides in respect of 2 transactions between 2 persons to which the agreement applies— (a) that on the occurrence of an event specified in the agree- ment, all or any of those transactions must (or may, at the option of a party) be terminated and— (i) an account must be taken of all money due be- tween the parties in respect of the terminated transactions; and all obligations in respect of that money must be satisfied by payment of the net amount due from or on behalf of the party having a net debit to or on behalf of the party having a net credit; or that each transaction is to be debited or credited to an account with the effect that the rights and obligations of each party that existed in respect of the relevant account before the transaction are extinguished and replaced by rights and obligations in respect of the net debit due on the relevant account after taking into account that transaction; or that amounts payable by each party to the other party are to be paid or satisfied by payment of the net amount of those obligations by the party having a net credit,— but does not include any bilateral netting agreement that is part of a multilateral netting agreement clearing house means a person that provides clearing or settle- ment services in respect of financial transactions between par- ties to a multilateral netting agreement multilateral netting agreement means an agreement that pro- vides for the settlement between more than 2 persons of pay- ment obligations arising under transactions that are subject to the agreement, and that provides, in respect of transactions to which it relates, that debits and credits arising
 between the par- (c) 112 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 256 ties are to be brought into account so that amounts payable to each party are satisfied by— (a) payment by or on behalf of each party having a net debit to or on behalf of a clearing house (whether as agent or as principal) or a party having a net credit; and receipt by or on behalf of each party having a net credit from or on behalf of a clearing house (whether as agent or as principal) or a party having a net debit (b) netted balance means any amount calculated under a netting agreement as the net debit payable by or on behalf of a party to the agreement to or on behalf of another party to the agreement in respect of all transactions or any transaction to which the netting agreement applies netting agreement means a bilateral netting agreement or a recognised multilateral netting agreement recognised clearing house means a clearing house declared under section 310K of the Companies Act 1993 to be a recog- nised clearing house recognised multilateral netting agreement means a multi- lateral netting agreement that is contained in, or is subject to, the rules of a recognised clearing house.
Compare: 1967 No 54 s 93A 256 Application of set-off under netting agreement (1) Sections 255 to 263 apply— (a) to a netting agreement— (i) (ii) made in or evidenced by writing; and in respect of which the application of sec- tions 255 to 263 has not been expressly excluded; and (iii) whether made before or after the commencement of this section; and (b) to all obligations under a netting agreement (whether those obligations are payable in New Zealand currency or in some other currency).
(2) Sections 255 to 263 apply despite— 113 Part 3 s 257 Insolvency Act 2006 Reprinted as at 1 April 2010 (a) (b) any disposal of rights under a transaction that is subject to a netting agreement in contravention of a prohibition in the netting agreement; or the creation of a charge or other interest in respect of the rights referred to in paragraph (a) in contravention of a prohibition in the netting agreement.
Compare: 1967 No 54 s 93B 257 Calculation of netted balance If a person who is a party to a netting agreement is bankrupt,— any netted balance payable by or to the bankrupt must (a) be calculated in accordance with the netting agreement; and that netted balance constitutes the amount that may be claimed in the bankruptcy or is payable to the bankrupt, as the case may be, in respect of the transactions that are included in the calculation.
(b) Compare: 1967 No 54 s 93C 258 Mutuality required for transactions under bilateral netting agreements Sections 255 to 263 apply to transactions that are subject to a bilateral netting agreement only if those transactions constitute mutual credits or mutual debts.
Compare: 1967 No 54 s 93D (1) 259 When mutuality required for transactions under recognised multilateral netting agreements Sections 255 to 263 apply to transactions that are subject to a recognised multilateral netting agreement, whether or not those transactions constitute mutual credits or mutual debts.
(2) Despite subsection (1), sections 255 to 263 do not apply to transactions that are subject to a recognised multilateral net- ting agreement if— (a) those transactions do not constitute mutual credits or mutual debts; and a party to any of those transactions is acting as a trustee for another person; and (b) 114 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 262 (c) the party acting as trustee is not authorised by the terms of the trust of which the party is a trustee to enter into the transaction.
Compare: 1967 No 54 s 93E 260 Application of set-off under section 254 to transaction (1) subject to netting agreements Section 254 does not apply to transactions that are subject to a netting agreement to which sections 255 to 263 apply.

(2) However, a netted balance is to be treated as an amount to which section 254 applies if the bankrupt and the other party to the netting agreement have mutual credits or mutual debts between them that are not subject to the netting agreement.
Compare: 1967 No 54 s 93F 261 Transactions under netting agreement and insolvent transactions (1) Nothing in sections 255 to 263 prevents the operation of sec- tion 194 in relation to any transaction to which a netting agree- ment applies.
For the purposes of section 194, the following are obligations incurred: (a) (2) (b) a transaction entered into by a bankrupt under a netting agreement if the effect of the transaction is to reduce any netted balance payable by or to the bankrupt: a netting agreement entered into by a bankrupt to the extent that the effect of entering into the netting agree- ment is to reduce any amount that was owing by or to the bankrupt at the time the bankrupt entered into the agreement.
Compare: 1967 No 54 s 93G 262 Set-off under netting agreement not affected by notice under section 206(2) The filing of a notice under section 206(2) in respect of a trans- action that is subject to a netting agreement does not affect the operation of section 257 in respect of the transaction, and that 115 Part 3 s 263 Insolvency Act 2006 Reprinted as at 1 April 2010 section continues to apply to the transaction until the transac- tion is cancelled under section 206.
Compare: 1967 No 54 s 93H 263 Disclaimer of onerous property and termination of netting agreement not permitted The Assignee must not— (a) disclaim, under section 117 or 125, any property of a bankrupt that relates to a transaction under a netting agreement: terminate, under section 187, a netting agreement or any contract of a bankrupt that constitutes a transaction under a netting agreement.
(b) Compare: 1967 No 54 s 93I 264 Pre-adjudication interest Interest A creditor may claim interest up to the date of adjudication,— in the case of contract debt interest, at the rate specified (a) in the contract that provides for interest on the debt; or in the case of judgment debt interest, at the rate payable on the debt.
Compare: 1993 No 105 s 311(1) (b) 265 Post-adjudication interest at prescribed rate if surplus remains The Assignee must pay interest on all admitted creditors’ claims at the prescribed rate if there are surplus assets left after the Assignee has paid the claims.

The Assignee must pay interest from the date of adjudication to the date when each debt is paid.

If the surplus is not enough to pay interest in full on all debts, payment of interest must abate rateably among them all.
Example A and B are the only creditors of the bankrupt, C. A’s contract with C provided for interest of 20%, but B’s contract did not provide for interest.

C’s bankruptcy commenced on 1 April 2002.

At that date—(1) C owed A $1,000 plus $100 contractual debt interest; (1) (2) (3) 116 Reprinted as at 1 April 2010 Example—continued Insolvency Act 2006 Part 3 s 267 and (2) C owed B $2,000 but no interest.

A can prove in the bankruptcy for $1,100 and B for $2,000.
The Assignee pays their claims in full on 1 April 2003, 1 year after the commencement of the bankruptcy.

If there are surplus assets after the Assignee has paid the claims of A and B in full, the Assignee must use the surplus to pay interest on both debts for the period from 1 April 2002 to 1 April 2003.

If there is enough, and assuming that the prescribed rate is 10%, the Assignee must pay A $110 and B $200 in post-adjudication interest.

Assume that the Assignee has a surplus of only $155.
In that case A and B share pro rata, so that A is paid $55 in post-adjudication interest, and B is paid $100.
Compare: 1993 No 105 s 311(2) 266 Additional post-adjudication interest on contract or (1) (2) (3) judgment debt if surplus remains If there is a surplus after the Assignee has paid post-adjudica- tion interest at the prescribed rate under section 265, the As- signee must pay additional post-adjudication interest on ad- mitted proofs for a contract debt or judgment debt, by making up,— (a) in the case of a contract debt, the difference between the prescribed rate and the rate specified in the contract: in the case of a judgment debt, the difference between the prescribed rate and the rate payable on the debt.
(b) The Assignee must pay interest from the date of adjudication to the date when each creditor’s claim is paid.

If the surplus is not enough to pay additional post-adjudication interest in full on the creditors’ claims eligible for that interest, payment of interest must abate rateably among them all.
Compare: 1967 No 54 s 94; 1993 No 105 s 311(3) 267 Meaning of prescribed rate In sections 265 and 266, prescribed rate means the rate of interest prescribed from time to time under section 87(3) of the Judicature Act 1908.
Compare: 1993 No 105 s 311(4) 117 Part 3 s 268 Insolvency Act 2006 Reprinted as at 1 April 2010 Miscellaneous provisions relating to creditors’ claims 268 Creditor must deduct trade discounts A creditor must deduct from the creditor’s claim any trade dis- count that the creditor would have given a debtor if the debtor had not become bankrupt.
Compare: 1967 No 54 s 92 269 Proof when charge void If a creditor’s charge is wholly or partly void under the pro- visions of this or any other Act, the creditor may prove as an unsecured creditor,— (a) if the charge is wholly void, for the whole of the debt; or if the charge is partly void, to the extent that the debt is unsecured.
Compare: 1967 No 54 s 96 (b) 270 Judgment creditor may prove for costs A person who obtained an order for costs against the bankrupt before adjudication may prove for the amount of the costs when the costs are fixed, even if the amount is fixed only after adjudication.

Compare: 1967 No 54 s 100 271 Company may prove for unpaid calls (1) This section applies if the bankrupt, at the time of adjudica- tion, is a shareholder of a company that has not been put into liquidation.
The company may prove for— (a) the amount of unpaid calls on the bankrupt made before adjudication in respect of the bankrupt’s shares; and the value of the liability to calls to be made in the period of 1 year after adjudication.

(b) The value referred to in subsection (2)(b) must be estimated— as agreed by the Assignee and the company; or (a) if the Assignee and the company cannot agree, as di- (b) rected by the court.
(2) (3) 118 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 273 (4) This section does not affect the provisions of sections 103 and 268 of the Companies Act 1993 in the event that the company is put into liquidation.

Compare: 1967 No 54 ss 101(1), 102 272 When guarantor for bankrupt may prove This section applies if a person (A)— (1) (a) is, at the time of adjudication, guarantor of, or liable for a debt or liability of, the bankrupt; and discharges the debt or liability, even after adjudication.
(b) (4) (2) A has the benefit of the rules in subsections (3) and (4).

(3) If the creditor in question has submitted a creditor’s claim form for the debt or liability, A may stand in the creditor’s place in respect of the claim.
If the creditor in question has not submitted a creditor’s claim form for the debt or liability, A may— (a) prove for the payment that A has made as if the payment were a debt, without disturbing dividends already paid to the creditor in the bankruptcy; and receive dividends paid subsequently.
(b) Compare: 1967 No 54 s 103 Subpart 10—Distribution of assets 273 Priority of payments for distribution of bankrupt’s assets The Assignee must pay, out of the money received by him (1) or her by the realisation of the property of the bankrupt, the preferential claims set out in section 274 to the extent and in the order of priority specified in that section and sections 275 to 279.
(2) After paying the preferential claims in accordance with sub- section (1), the Assignee must pay any remaining money to the general creditors in accordance with section 280.

(3) After paying the general creditors in accordance with subsec- tion (2), the Assignee must pay any remaining money to the bankrupt in accordance with section 281.
(4) Any money received by the Assignee by the realisation of the property of the bankrupt that is not able to be paid in accord- 119 Part 3 s 274 Insolvency Act 2006 Reprinted as at 1 April 2010 ance with subsections (1) to (3), must be paid to Public Trust in accordance with section 283.

(5) Other than as set out in section 275(1)(b) and (3), subsec- tion (1) is subject to— (a) the powers of secured creditors referred to in sec- tion 4(c); and (b) any other enactment.
Compare: 1993 No 105 ss 312, 313 Preferential claims 274 Priority of payments to preferential creditors (1) The Assignee must first pay, in the order of priority in which they are listed,— (a) (b) (c) the fees and expenses properly incurred by the Assignee in carrying out the duties and exercising the powers of the Assignee, and the remuneration of the Assignee; and the reasonable costs of a creditor in procuring the order of adjudication, including the reasonable costs incurred between lawyer and client in procuring the order, inclu- sive of and subsequent to the preparation and filing of the creditor’s application for adjudication; and to any creditor who protects, preserves the value of, or recovers property of the bankrupt for the benefit of the bankrupt’s creditors by the payment of money or the giving of an indemnity,— (i) the amount received by the Assignee by the real- isation of that property, up to the value of that creditor’s unsecured debt; and the amount of the costs incurred by that creditor in protecting, preserving the value of, or recov- ering that property.
(ii) (2) After paying the claims referred to in subsection (1), the As- signee must next pay, to the extent that they remain unpaid, the following claims: (a) subject to section 276(1), all wages or salary of any employee, whether or not earned wholly or in part by way of commission, and whether payable for time or for piece work, in respect of services provided to the bankrupt during the 4 months before the adjudication: 120 Reprinted as at 1 April 2010 (aa) (b) (c) (d) (e) (f) (g) (h) Insolvency Act 2006 Part 3 s 274 subject to section 276(1), all untransferred amounts of an employee’s payroll donations by an employer or PAYE intermediary under section 24Q of the Tax Administration Act 1994 during the 4 months before the adjudication: subject to section 276(1), any holiday pay payable to an employee on the termination of his or her employment before, or because of, the adjudication: subject to section 276(1), any compensation for redun- dancy owed to an employee that accrues before, or be- cause of, the adjudication: subject to section 276(1), amounts deducted by the bankrupt from the wages or salary of an employee in order to satisfy obligations of the employee (including amounts payable to the Commissioner of Inland Rev- enue in accordance with section 163(1) of the Child Support Act 1991 and section 167(2) of the Tax Ad- ministration Act 1994 as applied by section 25 of the Student Loan Scheme Act 1992): subject to section 276(1), any reimbursement or pay- ment provided for, or ordered by, the Employment Re- lations Authority, the Employment Court, or the Court of Appeal under section 123(1)(b) or section 128 of the Employment Relations Act 2000, to the extent that the reimbursement or payment does not relate to any mat- ter set out in section 123(1)(c) of the Employment Re- lations Act 2000, in respect of wages or other money or remuneration lost during the 4 months before the adju- dication: amounts tion 172(2) and (3): all amounts payable to the Commissioner of Inland Revenue in accordance with section
 167(2) of the Tax Administration Act 1994 as applied by section 67 of the KiwiSaver Act 2006: all sums that, by any other enactment, are required to be paid in accordance with the priority established by this subsection.
that are preferential claims under sec- 121 Part 3 s 274 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) After paying the claims referred to in subsection (2), the As- signee must next pay all sums, for which a buyer is a cred- itor in the bankruptcy under section 11 of the Layby Sales Act 1971,— (a) paid by the buyer to a seller on account of the purchase price of goods; or to which the buyer is or becomes entitled to receive from a seller under section 9 of the Layby Sales Act 1971.
(b) (4) After paying the claims referred to in subsection (3), the As- signee must next pay the amount of any costs referred to in section 333(4)(c).
(5) After paying the claims referred to in subsection (4), the As- signee must next pay, to the extent that it remains unpaid to the Commissioner of Inland Revenue or to the Collector of Cus- toms, as the case may require, the amount of— (a) tax payable by the bankrupt in the manner required by Part 3 of the Goods and Services Tax Act 1985; and tax deductions made by the bankrupt under the PAYE rules of the Income Tax Act 2007; and non-resident withholding tax deducted by the bankrupt under the NRWT rules of the Income Tax Act 2007; and resident withholding tax deducted by the bankrupt under the RWT rules of the Income Tax Act 2007; and duty payable within the meaning of section 2(1) of the Customs and Excise Act 1996.
(b) (c) (d) (e) Compare: 1967 No 54 s 104(1); 1993 No 105 Schedule 7 cls 1–5 Section 274(2)(aa): inserted, on 7 January 2010, by section 863 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section 274(5)(b): amended, on 1 April 2008, by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

Section 274(5)(c): amended, on 1 April 2008, by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
Section 274(5)(d): amended, on 1 April 2008, by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
122 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 275 275 Conditions to priority of payments to preferential (1) creditors The claims listed in each of subsections (2), (3), (4), and (5) of section 274— (a) (b) (B) rank equally among themselves and, subject to any maximum payment level specified in any Act or regu- lations, must be paid in full, unless the property of the bankrupt is insufficient to meet them, in which case they abate in equal proportions; and in so far as the property of the bankrupt available for payment of those claims is insufficient to meet them,— have priority over the claims of any person under (i) a security interest to the extent that the security interest— (A) is over all or any part of the bankrupt’s accounts receivable and inventory or all or any part of either of them; and is not a purchase money security interest that has been perfected at the time speci- fied in section 74 of the Personal Property Securities Act 1999; and is not a security interest that has been the Personal Property perfected under Securities Act 1999 at the date of adju- dication and that arises from the transfer of an account receivable for which new value is provided by the transferee for the acquisition of that account receivable (whether or not the transfer of the account receivable secures payment or perform- ance of an obligation); and (ii) must be paid accordingly out of any accounts re- ceivable or inventory subject to that security in- terest (or their proceeds).
(C) (2) For the purposes of subsection (1)(b), the terms account re- ceivable, inventory, new value, proceeds, purchase money security interest, and security interest have the same mean- ings as in the Personal Property Securities Act 1999.
123 Part 3 s 276 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) To the extent that the claims to which subsection (1) applies are paid out of property referred to in paragraph (b) of that subsection, the amount so paid is an unsecured debt due by the bankrupt to the secured party.
Compare: 1993 No 105 Schedule 7 cls 9, 10 (c) (2) (b) 276 Provisions concerning preferential payments to employees The total sum to which priority is to be given under any, or all, (1) of paragraphs (a) to (e) of section 274(2) must not, in the case of any one employee, exceed $18,700 or any greater amount that is prescribed under subsection (2) at the date of adjudica- tion.
The sum stated in subsection (1) must be adjusted as follows: subject to paragraph (d), an adjustment must be made, (a) by the Governor-General by Order in Council, after the 3-year period starting on 1 July 2006 and ending on 30 June 2009 and after every 3-year period following that (an adjustment period): subject to paragraph (d), the Order in Council must be made within 3 months of the end of an adjustment period: each adjustment must reflect any overall percentage in- crease, over the relevant adjustment period, in aver- age weekly earnings (total, private sector), calculated by reference to the last Quarterly Employment Survey published by Statistics New Zealand (or, if that survey ceases to be published, a survey certified by the Govern- ment Statistician as an equivalent to that survey) within the relevant adjustment period: if, in an adjustment period, there is no change, or an overall decrease, in the percentage movement in aver- age weekly earnings (total, private sector), as so calcu- lated, no adjustment may be made for that adjustment period: if, in accordance with paragraph (d), no adjustment is made, the next adjustment made for any succeeding ad- justment period must reflect any overall percentage in- crease in average weekly earnings (total, private sector) between the date of the last adjustment and the end of (d) (e) 124 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 277 (3) (4) (f) (g) the relevant adjustment period for which the adjustment is to be made: all adjustments are cumulative and must be rounded to the nearest $20: any correction to the Quarterly Employment Survey on which an adjustment is based must be disregarded until the adjustment that takes effect in the following adjust- ment period, which must reflect the corrected informa- tion in the calculation of that adjustment and must other- wise be made in accordance with this subsection.
The sum stated in subsection (1), or any greater amount prescribed under subsection (2) that applies on the date on which a debtor is adjudicated bankrupt, continues to apply to that bankruptcy regardless of any change to that sum that is prescribed after the date on which the debtor is adjudicated bankrupt.
For the purposes of this section and section 274,— (a) remuneration in respect of a period of holiday or of ab- sence from work through sickness or other good cause is to be treated as wages in respect of services rendered to the bankrupt during that period: employee means any person of any age employed by an employer to do any work for hire or reward under a contract of service (including a homeworker as defined in section 5 of the Employment Relations Act 2000): holiday pay, in relation to a person, means all sums payable to that person by the bankrupt under subpart 1 of Part 2 of the Holidays Act 2003, and includes all sums that by or under any other enactment or any award, agreement, or contract of service are payable to that person by the bankrupt as holiday pay.
(b) (c) Compare: 1967 No 54 s 104(1A), (1B), (3); 1993 No 105 Schedule 7 cls 6, 6A, 12 Section 276(1): amended, on 30 September 2009, pursuant to clause 3 of the Insolvency (Maximum Priority Amount) Order 2009 (SR 2009/228).
277 Subrogation of persons if payment has been made If a payment has been made to a person (A) on account of any preferential claim set out in section 274 out of money ad- 125 Part 3 s 278 Insolvency Act 2006 Reprinted as at 1 April 2010 vanced by another person (B) for that purpose, then B has, in the bankruptcy, the same right of priority in respect of the money so advanced as A would have if the payment had not been made.
Compare: 1993 No 105 Schedule 7 cl 7 278 Priority given to person who distrains on goods If a landlord or other person has distrained on goods or effects of the bankrupt during the 20 working days before the adjudi- cation, the preferential claims set out in section 274 are a first charge on the goods or effects so distrained, or the proceeds from their sale; but if any money is paid to a claimant under that charge, the landlord or other person has the same rights of priority as that claimant.
Compare: 1993 No 105 Schedule 7 cl 11 279 Creditors to have priority over creditors of joint bankrupt If a person (A) is a partner of a firm and is adjudicated bankrupt, any creditors to whom A is indebted jointly with the other partners of the firm must not receive any money obtained from the realisation of the separate property of A until all the separate creditors have had their claims paid in full.
Compare: 1967 No 54 s 106 Payments to general creditors and to bankrupt (2) 280 Payment of remaining money to general creditors (1) After paying preferential claims in accordance with sec- tions 274 to 279, the Assignee must apply the money received by him or her by the realisation of the property of the bankrupt in satisfaction of all other claims.
The claims referred to in subsection (1) rank equally among themselves and must be paid in full, unless the money is in- sufficient to meet them, in which case they abate in equal pro- portions.

If, before the date of adjudication, a creditor agrees to accept a lower priority in respect of a debt than it would otherwise (3) 126 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 284 have under this section, nothing in this section prevents the agreement from having effect according to its terms.
Compare: 1993 No 105 s 313(1)–(3) 281 Payment of surplus to bankrupt (1) After paying interest under section 265 and the claims referred to in section 280, the Assignee must pay any surplus to the bankrupt.

This section is subject to section 215.
Compare: 1993 No 105 s 313(4) (2) Undistributed money paid to Public Trust 282 Definition of undistributed money In sections 283 to 289, undistributed money means any money that— (a) was received by the Assignee by the realisation of the property of the bankrupt; and remains after the Assignee deducts the costs of obtain- ing his or her release under sections 408 to 410, if ap- plicable; and is required to be paid to any person under sections 274 to 281, but is not able to be distributed for any reason.
(b) (c) Compare: 1967 No 54 s 134(1) 283 Undistributed money to be paid to Public Trust The Assignee must pay any undistributed money to Public Trust.

Compare: 1967 No 54 s 134(1) 284 Public Trust to hold undistributed money (1) Public Trust must hold any undistributed money paid to it sub- ject to the claim of any person who appears to be entitled to that money.
(2) Undistributed money paid to Public Trust is held by Public Trust subject to— (a) (b) (c) this Act; and the Public Trust Act 2001; and any other enactment relating to Public Trust.

127 Part 3 s 285 Insolvency Act 2006 Reprinted as at 1 April 2010 (3) If there is any inconsistency between the provisions of this Act and any provisions of the Public Trust Act 2001 or any other enactment relating to Public Trust, this Act prevails.
Compare: 1967 No 54 s 134(1), (2), (7) 285 Public Trust to pay undistributed money to bankruptcy surplus account (1) After the expiry of 12 months from the date on which undis- tributed money is paid to Public Trust, Public Trust must trans- fer any undistributed money that has not been claimed by a person into a bankruptcy surplus account.
(2) Undistributed money transferred into a bankruptcy surplus ac- count— (a) (b) may be applied without discrimination in accordance is deemed to be one common and general fund; and with section 286.
Compare: 1967 No 54 s 134(3) 286 Application of undistributed money held in bankruptcy surplus account Undistributed money held in the bankruptcy surplus account may be used as follows: (a) (b) (c) (d) in relation to the bankruptcy from for distribution, which the undistributed money came, to any person who remains to be paid as set out in section 282(c); and for the purposes of this Act, to the extent and in the manner allowed by this Act; and subject to section 287, to replace, to the extent of the deficiency, any money misappropriated by an Assignee or any person employed under the provisions of this Act (other than under sections 325 to 360); and subject to section 288, to meet the costs of court pro- ceedings, obtaining legal advice, or employing an ac- countant or other experts in circumstances where the creditors of a bankrupt are unable to pay those costs, or it would be unfair or inequitable that they should do so.
Compare: 1967 No 54 s 134(4)–(6) 128 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 3 s 289 287 Requisition of Minister required for payment under section 286(c) Public Trust may pay undistributed money out of the bankruptcy surplus account under section 286(c) only on the requisition of the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administra- tion of this Act.
Compare: 1967 No 54 s 134(5) 288 Approval of Official Assignee required for payment under section 286(d) Public Trust may pay undistributed money out of the bankruptcy surplus account under section 286(d) only with the approval of the Official Assignee and subject to any conditions he or she may impose.
Compare: 1967 No 54 s 134(6) (3) 289 Matters concerning bankruptcy surplus account (1) Subject to sections 285 to 288, the investment, realisation, and disposition of undistributed money held in the bankruptcy sur- plus account, and any profits accruing from that money, are subject to the provisions of the Public Trust Act 2001.

(2) Undistributed money may be paid out of the bankruptcy sur- plus account under section 286(c) or (d) without further appro- priation than this Act.
Public Trust may make a payment out of the bankruptcy surplus account without being concerned to see or inquire whether Public Trust received any undistributed money or sufficient undistributed money on account of the bankrupt in respect of whom the application for payment relates whenever an application for a payment out of that account is made to Public Trust under section 286— (a) by requisition of the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administration of this Act; or (b) with the approval of the chief executive of the depart- ment of State that, with the authority of the Prime Min- 129 Part 4 s 290 Insolvency Act 2006 Reprinted as at 1 April 2010 ister, is for the time being responsible for the adminis- tration of this Act; or by an Official Assignee.
(c) Compare: 1967 No 54 s 134(7), (8) Part 4 End of bankruptcy Subpart 1—Discharge from bankruptcy Automatic discharge from bankruptcy 290 Automatic discharge 3 years after bankrupt files statement of affairs (1) A bankrupt is automatically discharged from bankruptcy 3 years after the bankrupt files a statement of affairs under section 46 or section 67, but may apply to be discharged earlier.
(2) However, a bankrupt is not automatically discharged if— (a) (b) (c) the Assignee or a creditor has objected under sec- tion 292 and the objection has not been withdrawn by the end of the 3-year period referred to in subsection (1); or the bankrupt has to be publicly examined under sec- tion 173 and has not completed that examination; or the bankrupt bankruptcy.
is undischarged from an earlier Compare: 1967 No 54 s 107(1), (2), (6) 291 Effect of automatic discharge The automatic discharge of the bankrupt has the same effect as if the court made an order for the bankrupt’s discharge.

Compare: 1967 No 54 s 107(7) 292 Objection to automatic discharge (1) The Assignee or, with the permission of the court, a creditor may object to the bankrupt’s automatic discharge.

The objection must be made in the prescribed manner.
Compare: 1967 No 54 s 107(3) (2) 130 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 4 s 295 293 Objection may be withdrawn (1) An objection to the automatic discharge of the bankrupt may (2) be withdrawn in the prescribed manner.

The bankrupt is automatically discharged on the withdrawal of the objection if— (a) the 3-year period referred to in section 290(1) has elapsed; and there is no other objection to the discharge that has not been withdrawn; and neither section 290(2)(b) nor (c) applies.
(b) (c) Compare: 1967 No 54 s 107(4), (5) Application for discharge from bankruptcy 294 Bankrupt may apply for discharge (1) The bankrupt may at any time apply to the court for an order of discharge from bankruptcy.

(2) However, if the court has previously refused an application by the bankrupt for a discharge, and has specified the earliest date when the bankrupt may again apply, the bankrupt must not apply before that date.

The hearing of the application must be in accordance with sec- tion 177.
Compare: 1967 No 54 s 108 (3) Examination concerning discharge from bankruptcy 295 When bankrupt must be examined concerning discharge The Assignee must summon the bankrupt to be publicly exam- (1) ined by the court concerning his or her discharge, and the court must conduct the examination, if— (a) the Assignee or a creditor has objected to the bankrupt’s automatic discharge and the objection has not been withdrawn; or the bankrupt is due for automatic discharge but is still undischarged from an earlier bankruptcy; or the bankrupt has been required to be publicly examined under section 173 and has not completed that examin- ation.
(b) (c) 131 Part 4 s 296 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) (3) The Assignee must summon the bankrupt as soon as practic- able after the expiry of the 3-year period referred to in sec- tion 290(1).

Sections 173 to 181, so far as they are applicable and with the necessary modifications, apply to a public examination under this section.
Compare: 1967 No 54 s 109(1), (3) 296 Assignee’s report (1) The Assignee must prepare a report and file it in the court when— (a) the bankrupt has applied under section 294 for a dis- charge; or the Assignee has summoned the bankrupt to be exam- ined under section 295.
(b) (2) (d) The Assignee must report as to— the bankrupt’s affairs; and (a) the causes of the bankruptcy; and (b) the bankrupt’s performance of his or her duties under (c) this Act; and the manner in which the bankrupt has obeyed orders of the court; and the bankrupt’s conduct before and after adjudication; and any other matter that would assist the court in making a decision as to the bankrupt’s discharge.
(e) (f) Compare: 1967 No 54 s 109(2) 297 When creditor must give notice of opposition to discharge (1) A creditor must give notice to the Assignee and the bankrupt if the creditor intends to oppose the bankrupt’s discharge on a ground that is not mentioned in the Assignee’s report.

The notice must— (a) set out the ground or grounds for opposing the dis- charge; and be given within the prescribed time.
(2) (b) Compare: 1967 No 54 s 109(4) 132 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 4 s 299 298 Court may grant or refuse discharge (1) When the court hears an application under section 294 for dis- charge, or conducts the examination of the bankrupt under sec- tion 295, the court may, having regard to all the circumstances of the case,— (a) (b) immediately discharge the bankrupt; or discharge the bankrupt on conditions (which may in- clude a condition that the bankrupt consents to any judg- ment or order for the payment of any sum of money); or discharge the bankrupt but suspend the order for a period; or discharge the bankrupt, with or without conditions, at a specified future date; or refuse an order of discharge, in which case the court may specify the earliest date when the bankrupt may apply again for discharge.
(c) (d) (e) (2) If the court discharges the bankrupt on the condition that the bankrupt consents to any judgment, and the bankrupt does con- sent, the court may vary the judgment as it thinks appropriate.
Compare: 1967 No 54 s 110(1), (3) 299 Court may restrict bankrupt from engaging in business (1) (2) after discharge The court, when it makes an order of discharge or at any earlier time, may prohibit the bankrupt after discharge from doing any or all of the following things without the court’s permission: entering into, carrying on, or taking part in the manage- (a) ment or control of any business or class of business: being a director of any company: directly or indirectly being concerned, or taking part, in the management of any company: being employed by a relative of the bankrupt: being employed by a company, trust, trustee, or incorp- orated society that is managed or controlled by a relative of the bankrupt.
(d) (e) (b) (c) The court may— (a) prohibit the bankrupt for a specified period, or without a time limit: 133 Part 4 s 300 Insolvency Act 2006 Reprinted as at 1 April 2010 at any time vary or cancel the prohibition.
(b) Compare: 1967 No 54 s 111 300 Court may reverse order of discharge (1) The court may, on the application of the Assignee or a creditor, reverse the discharge of a bankrupt at any time before— (a) 2 years after the discharge, in the case of an absolute discharge; or 2 years after the discharge takes effect, in the case of a discharge that is conditional or suspended.
(2) When the court reverses a discharge, the court may then, or at any time after, make a new order of discharge, whether abso- lute, suspended, or conditional.
Compare: 1967 No 54 s 112(1), (4) (b) 301 Grounds for reversing discharge (1) The court may reverse a discharge if— (a) (b) the bankrupt has been given notice of the application (including the grounds relied on by the applicant); and the court is satisfied that facts have been established that— (i) were not known to the court when it made the order of discharge; and had the court known of them, would have justi- fied the court in refusing a discharge or discharg- ing the bankrupt on conditions.
(ii) (2) The court must not reverse a discharge if the facts relied on by the applicant, at the time when the court made an order discharging the bankrupt,— (a) (b) were known to the applicant; or could have been known if the applicant had inquired with reasonable diligence.
Compare: 1967 No 54 s 112(1), (2) 302 Effect of reversal of discharge (1) The reversal of a discharge does not prejudice or affect the rights or remedies that any person other than the bankrupt would have had if the discharge had not been reversed.
134 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 4 s 305 (2) Property that has been acquired by the bankrupt after discharge and that is vested in the bankrupt at the date of the reversal— (a) vests in the Assignee subject to any encumbrances; and (b) must be applied by the Assignee to pay debts that the bankrupt has incurred since the date of discharge.
Compare: 1967 No 54 s 112(3) 303 Bankrupt may apply for absolute discharge if conditions of discharge too onerous (2) (1) A bankrupt who cannot comply with any or all of the con- ditions of his or her discharge may apply to the court for an absolute discharge.

The court may discharge the bankrupt absolutely if the court is satisfied that the bankrupt’s inability is due to circumstances for which the bankrupt should not reasonably be held respon- sible.
Compare: 1967 No 54 s 113 304 Debts from which bankrupt is released on discharge (1) On discharge, the bankrupt is released from all debts provable in the bankruptcy except those listed in subsection (2).
The bankrupt is not released from the following debts: (a) (2) (b) (c) (d) any debt or liability incurred by fraud or fraudulent breach of trust to which the bankrupt was a party: any debt or liability for which the bankrupt has obtained forbearance through fraud to which the bankrupt was a party: any judgment debt or amount payable under any order for which the bankrupt is liable under section 147 or section 298: any amount payable under a maintenance order under the Family Proceedings Act 1980: any amount payable under the Child Support Act 1991.
(e) Compare: 1967 No 54 s 114 305 Discharge conclusive evidence of bankruptcy A discharge is conclusive evidence of the bankruptcy and of the validity of the proceedings in the bankruptcy.
Compare: 1967 No 54 s 115 135 Part 4 s 306 Insolvency Act 2006 Reprinted as at 1 April 2010 306 Discharge does not release partners and others A discharge does not release any person who, at the date of adjudication, was— (a) (b) (c) a business partner of the bankrupt; or a co-trustee with the bankrupt; or jointly bound or had made any contract with the bankrupt; or a guarantor or in the nature of a guarantor of the bankrupt.
Compare: 1967 No 54 s 116 (d) 307 Discharged bankrupt must assist Assignee A discharged bankrupt must assist the Assignee, as required by the court or the Assignee, in the realisation and distribution of the bankrupt’s property that is vested in the Assignee.
Compare: 1967 No 54 s 117 308 Information regarding bankrupt’s discharge must be contained in public register maintained under section 62 If the court has refused a bankrupt a discharge or discharged the bankrupt but suspended the discharge, that information must be contained in the public register maintained under sec- tion 62.
Compare: 1967 No 54 s 118 Subpart 2—Annulment 309 Court may annul adjudication (1) The court may, on the application of the Assignee or any per- son interested, annul the adjudication if— (a) the court considers that the bankrupt should not have been adjudicated bankrupt; or the court is satisfied that the bankrupt’s debts have been fully paid or satisfied and that the Assignee’s fees and costs incurred in the bankruptcy have been paid; or the court considers that the liability of the bankrupt to pay his or her debts should be revived because there has been a substantial change in the bankrupt’s financial circumstances since the date of adjudication; or (b) (c) 136 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 4 s 310 (d) the court has approved a composition under subpart 1 of Part 5.
(2) (3) (4) (5) In the case of an application on one of the grounds specified in subsection (1)(a) to (c) by an applicant who is not the As- signee,— (a) a copy of the application must be served on the Assignee in the manner and within the time that the court directs; and the Assignee may appear on the hearing of the applica- tion as if the Assignee were a party to the proceeding.
(b) The adjudication is annulled— (a) (b) from the date of adjudication, in the case of an applica- tion on the ground specified in subsection (1)(a): from the date of the court’s order of annulment, in the case of an application on one of the grounds specified in subsection (1)(b) to (d).
In the case of an application for annulment on the ground that the adjudication should not have been made because of a de- fect in form or procedure, the court may, in addition to an- nulling the adjudication, exercise its powers under section 418 to correct the defect and order that the application for adjudi- cation be reheard as if no adjudication had been made.
If the court annuls the adjudication on one of the grounds spe- cified in subsection (1)(a) to (c),— (a) the court may, on the Assignee’s application, fix an amount as reasonable remuneration for the Assignee’s services and order that it be paid, in addition to any costs that may be awarded: that amount must be paid into a Crown Bank Account: the Assignee is not entitled to remuneration under sec- tion 406 for those services.
(b) (c) Compare: 1967 No 54 s 119 310 When Assignee may annul adjudication (1) The Assignee may annul an adjudication on any of the grounds specified in subsection (2) if the adjudication was made on a debtor’s application.
The grounds for annulment by the Assignee are— (2) 137 Part 4 s 311 Insolvency Act 2006 Reprinted as at 1 April 2010 (a) (b) (c) (d) the Assignee considers that the bankrupt should not have been adjudicated bankrupt; or the Assignee is satisfied that the bankrupt’s debts have been fully paid or satisfied and that the Assignee’s fees and costs incurred in the bankruptcy have been paid; or the Assignee considers that the liability of the bankrupt to pay his or her debts should be revived because there has been a substantial change in the bankrupt’s financial circumstances since the date of adjudication; or the court has approved a composition under subpart 1 of Part 5.
(3) (4) The Assignee may annul the adjudication on the application of any person interested or on the Assignee’s own initiative.

The adjudication is annulled— (a) from the date of adjudication, in the case of an applica- tion on the ground specified in subsection (2)(a): from the date of the Assignee’s order of annulment, in the case of an application on one of the grounds speci- fied in subsection (2)(b) to (d).
(b) 311 Effect of annulment (1) On annulment of the adjudication, all property of the bankrupt vested in the Assignee on bankruptcy and not sold or disposed of by the Assignee revests in the bankrupt without the neces- sity for any conveyance, transfer, or assignment.
(2) Any contract, sale, disposition, or payment duly made or any- thing duly done by the Assignee before the annulment— (a) is not prejudiced or affected as to validity by the annul- ment; and has effect as if it had been made or done by the bankrupt while no adjudication was in force.
(b) Compare: 1967 No 54 s 120 138 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 313 Part 5 Compositions, proposals, summary instalment orders, and no asset procedure Subpart 1—Composition during bankruptcy 312 Creditors may accept composition by passing preliminary (1) (2) resolution The creditors of a bankrupt may accept a composition in satis- faction of the debts due to them from the bankrupt by passing a special resolution (the preliminary resolution) that contains the terms of the composition.
If there is more than 1 class of creditor, the delay of one class in accepting, or the failure of one class to accept, does not prevent any other of the classes from accepting the composition.

Compare: 1967 No 54 ss 121(1), 125(3) 313 Confirming resolution (1) (2) (3) (4) The composition is ineffective unless the creditors confirm the composition by passing a special resolution (the confirming resolution).
The creditors may confirm in the composition on terms that vary from the terms contained in the preliminary resolution, if the final terms are at least as favourable to the creditors as the terms set out in the preliminary resolution.

The notice of the meeting to pass the confirming resolution must— (a) state generally the terms of the proposal for composi- tion; and be accompanied by a report by the Assignee on the pro- posal.
(b) If the proposal for composition provides for the payment in full of all creditors whose respective debts do not exceed a certain amount, that class of creditors must not be counted either in number or value for the purpose of counting the requisite ma- jority of creditors for passing the confirming resolution.
Compare: 1967 No 54 s 121(2), (3), (4) 139 Part 5 s 314 Insolvency Act 2006 Reprinted as at 1 April 2010 314 Compositions with members of partnership (1) If the members of a partnership have been adjudicated bankrupt, the joint creditors and each class of separate credit- ors may make separate compositions.
In that case, the majorities of creditors required for passing the confirming resolution are the separate majorities of each class, but otherwise the joint and separate creditors must be counted as one body for voting.

Compare: 1967 No 54 s 125(2) (2) 315 Court must approve composition (1) (2) The court must approve the composition if it is to be binding.

The composition approved by the court binds all the creditors in respect of provable debts due to them by the bankrupt.
The court may refuse to approve the composition if it considers that— (a) (b) section 312 or 313 has not been complied with; or the terms of the composition are not reasonable or are not calculated to benefit the general body of creditors; or the bankrupt justifies is guilty of misconduct the court in refusing, qualifying, or suspending the bankrupt’s discharge; or for any other reason it should not approve the composi- tion.
(c) (d) that The court must not approve the composition if the composition does not provide for the payment, before any other debts are paid, of those debts that have priority under subpart 10 of Part 3.

The court’s approval is conclusive as to the validity of the com- position.

Compare: 1967 No 54 s 122(3), (4), (5), (7) (3) (4) (5) 316 Procedure for court approval of composition (1) The bankrupt or the Assignee may apply to the court to ap- prove the composition.
(2) Notice of the application must be given to each creditor.

(3) Before approving the composition, the court must— 140 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 318 (a) (b) receive a report by the Assignee as to the terms of the composition and the bankrupt’s conduct; and hear any objection by or on behalf of a creditor.

(4) When it approves the composition, the court may correct any formal or accidental error or omission, but must not alter the substance of the composition.
Compare: 1967 No 54 s 122(1), (2), (6) 317 Deed of composition (1) As soon as practicable after the court has approved a compo- sition,— (a) (b) the bankrupt and the Assignee must execute a deed of composition for putting the proposal into effect; and the Assignee must apply to the court for confirmation of the deed.

(2) (3) (4) direct that the deed is entered and filed in the court; and annul the adjudication.
If it is satisfied that the deed conforms with the composition that it has earlier approved, the court must— (a) (b) The deed must not be entered and filed in the court unless the prescribed commission has been paid to the Assignee.

The annulment under subsection (2) does not revest the bankrupt’s property in the bankrupt in accordance with section 311(1).
Compare: 1967 No 54 ss 123(1), (2), 125(5) 318 Effect of deed When the court has confirmed the deed and annulled the adju- dication,— (a) the deed binds all the creditors in all respects as if they had each executed the deed; and subject to the provisions of the Land Transfer Act 1952, the bankrupt’s property to which the deed relates vests and must be dealt with as provided in the deed.
(b) Compare: 1967 No 54 s 123(2) 141 Part 5 s 319 Insolvency Act 2006 Reprinted as at 1 April 2010 319 Bankrupt remains liable for unpaid balances of certain debts (1) A bankrupt who makes a composition with his or her creditors remains liable for the unpaid balance of a debt if— (a) the bankrupt, by means of fraud,— (i) (ii) incurred or increased the debt; or on or before the date of the composition, obtained forbearance on the debt; and (2) (b) the creditor who has been defrauded has not agreed to the composition.
For the purposes of subsection (1)(b) a creditor does not agree to the composition merely by proving the debt and accepting payment of a distribution of the assets in the estate.
Compare: 1967 No 54 s 125(4) 320 Deadlines for steps to approve composition and execute (1) (2) deed The deadlines for steps to approve the composition and exe- cute the deed are— (a) the confirming resolution must be passed within 1 month after the preliminary resolution is passed; and the court must approve the composition within 1 month after the confirming resolution is passed; and the bankrupt must execute the deed of composition within 5 working days after the court approves the composition or, if the court allows the bankrupt addi- tional time, within that time.
(b) (c) If any of the deadlines is not kept,— (a) immediately on the expiry of the deadline, the proceed- ings in the bankruptcy resume as if there had been no confirming resolution; and none of the periods specified in subsection (1) counts in the calculation of a period of time for any purpose of this Act.
(b) Compare: 1967 No 54 s 125(1) 321 Procedure following court approval of composition (1) The Registrar of the court must, after entering the deed of com- position,— 142 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 323 (2) (a) (b) endorse on the deed that it has been entered and filed in the court; and if requested by the Assignee, deliver the deed to the Assignee.
The Assignee, as soon as practicable after the deed has been entered,— (a) must take all steps necessary to have any vesting pro- vided for in the deed registered or recorded in the appro- priate registry or office, and must then return the deed to the file of the court; and (b) must, subject to the provisions of the deed, give posses- sion to the bankrupt or the trustee under the composi- tion, as the case may be, of— (i) (ii) the bankrupt’s property; or so much of the bankrupt’s property as the As- signee possesses and that under the composition revests in the bankrupt or the trustee.
Compare: 1967 No 54 s 123(3), (4) 322 Enforcement of composition The court may,— (a) on the application of an aggrieved person, order that any default in payment of any composition approved by the court be remedied: on the application of a person interested, enforce the provisions of any composition approved by the court.
(b) Compare: 1967 No 54 s 124(1), (2) 323 Court’s exclusive jurisdiction (1) After the preliminary resolution has been passed, the court continues to have exclusive jurisdiction in relation to the com- position and the deed of composition, and their administration.
(2) On an application in relation to the composition, the deed of composition, or their administration, the court may,— (a) for the purpose of summoning and examining the bankrupt and witnesses, direct the proceeding as if it were a proceeding under subpart 5 of Part 3: 143 Part 5 s 324 Insolvency Act 2006 Reprinted as at 1 April 2010 (b) make the order or orders that it thinks appropriate, in- cluding an order as to the costs of the application.
Compare: 1967 No 54 s 124(3), (4) 324 Law and practice in bankruptcy applies to deed The court must decide a question arising under the deed of composition according to the law and practice of bankruptcy, if the law and practice of bankruptcy is relevant.
Compare: 1967 No 54 s 124(5) Subpart 2—Proposals 325 Meaning of debt, etc (1) In this subpart, unless the context otherwise requires,— debt means a debt that would be provable in the insolvent’s bankruptcy insolvent means a person who is not a bankrupt, but who is unable to pay his or her debts as they become due.

The debt of an insolvent is provable under this subpart.
Compare: 1967 No 54 s 139 Insolvent may make proposal 326 (1) An insolvent may make a proposal to creditors for the payment or satisfaction of the insolvent’s debts.
The proposal may include all or any of the following: (a) an offer to assign all or any of the insolvent’s property to a trustee for the benefit of the creditors: an offer to pay the insolvent’s debts by instalments: an offer to compromise the insolvent’s debts at less than 100 cents in the dollar: an offer to pay the insolvent’s debts at some time in the future: any other offer for an arrangement for the satisfaction of the insolvent’s debts.
(b) (c) (d) (e) The proposal may include any other conditions for the benefit of the creditors and may be accompanied by a charge or guar- antee.

Compare: 1967 No 54 s 140(1), (2), (3) (2) (2) (3) 144 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 328 327 Form of proposal (1) The proposal must be— (a) (b) in the prescribed form; and accompanied by a statement of affairs that is in the pre- scribed form and verified by affidavit.
The statement of affairs must set out the following informa- tion: (a) (b) the insolvent’s assets, debts, and liabilities: the name, address, and occupation of each of the insol- vent’s creditors: the securities (if any) held by each creditor.

(c) The proposal must— (a) (b) be signed by the insolvent; and have endorsed on it the name of a person (A) who is willing to act as a trustee for the creditors; and include a statement by A that A is willing to act.
(c) Compare: 1967 No 54 s 140(4), (5) 328 Proposal must be filed in court (1) The proposal must be filed in the office of the court nearest to where the insolvent lives.

The insolvent may not, while waiting for the decision of the creditors and the court, withdraw the proposal or any charge or guarantee tendered with it, unless the insolvent obtains the permission of the court.

The time when the proposal is filed in court is the time when the claims of creditors are determined.
If the creditors at a meeting under section 331 do not accept the proposal,— (a) the chairperson of the meeting must return the proposal to the court with his or her signed endorsement “Not accepted by creditors”; and the Registrar must cancel the proposal.

(b) Compare: 1967 No 54 s 140(5)–(8) (2) (3) (2) (3) (4) 145 Part 5 s 329 Insolvency Act 2006 Reprinted as at 1 April 2010 329 Provisional trustee The trustee named in the proposal becomes the provisional trustee when the proposal is filed.
Compare: 1967 No 54 s 141(1) 330 Provisional trustee must call meeting of creditors (1) The provisional trustee must, as soon as practicable after the proposal is filed, call a meeting of creditors by posting to every known creditor at the creditor’s last known address— (a) (b) (c) a notice of the date, time, and place of the meeting: a summary of the insolvent’s assets and liabilities: a copy of the proposal and particulars of any charge or guarantee: a creditor’s claim form: a postal vote in the prescribed form.
(d) (e) (2) A creditor who has proved a claim in the prescribed manner may vote on the proposal by sending a postal vote that reaches the provisional trustee before or at the meeting.

If the provisional trustee receives a postal vote before or at the meeting, the postal vote has effect as if the creditor had been present and voted at the meeting.
Compare: 1967 No 54 s 141(2), (3) (3) 331 Procedure at meeting of creditors (1) The provisional trustee is the chairperson of the meeting of creditors, unless the creditors elect their own chairperson.
The creditors may— (a) (b) examine the insolvent: accept the proposal with or without amendments or modification, by passing a resolution that sets out the proposal in its final form: confirm the provisional trustee as trustee, or appoint an- other person who is willing to act as trustee, in which case that person becomes the trustee.
(c) The resolution accepting the proposal must be decided by a majority in number and three-quarters in value of the creditors who— (a) vote; and (2) (3) 146 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 333 (b) are personally present or are represented at the meeting by a person specified in section 332 or have voted by postal vote.

(4) If the insolvent consents, the creditors may include in the pro- posal terms for the supervision of the insolvent’s affairs.
Compare: 1967 No 54 s 142 332 Who may represent creditors A person who may represent a creditor under section 91 may represent a creditor at a meeting to consider a proposal.

333 Court must approve proposal (1) After the proposal has been accepted by the creditors, the trustee must, as soon as practicable,— (a) (b) apply to the court for approval of the proposal; and send notice of the hearing of the application in the pre- scribed form to the insolvent and to each known cred- itor.
(2) (3) (4) The court must, before approving a proposal, hear any objec- tion that is made by or on behalf of a creditor.

The court may refuse to approve the proposal if it considers that— (a) the provisions of this subpart have not been complied with; or the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors; or for any reason it is not expedient that the proposal be approved.
(b) (c) The court must not approve a proposal if it does not provide for the payment, before any other debts are paid, of— (a) those debts that would have priority under this Act if the insolvent was adjudicated bankrupt; and the trustee’s fees and expenses that are properly in- curred by the trustee in respect of the proposal; and costs incurred by a person other than the insolvent in organising and conducting a meeting of creditors for the purpose of voting on a proposal.
(b) (c) 147 Part 5 s 334 Insolvency Act 2006 Reprinted as at 1 April 2010 (5) Subsection (4)(a) does not apply to the extent that a creditor waives the priority that the debt of that person would otherwise have had.

(6) When it approves the proposal, the court may correct any for- mal or accidental error or omission, but must not alter the sub- stance of the proposal.
Compare: 1967 No 54 s 143(1)–(4), (6); 1993 No 105 s 234(c) 334 Effect of court approval (1) A proposal that is approved by the court is binding on all the creditors whose debts are provable under this subpart and are affected by the terms of the proposal.

The court’s approval is conclusive as to the validity of the pro- posal.
Compare: 1967 No 54 s 143(5), (7) (2) 335 Creditor must not take enforcement steps without court’s permission (2) (b) after the court has approved the proposal; and (1) A creditor whose debt is provable under this subpart must not take any of the steps listed in subsection (2) in respect of the debt— (a) (b) while the proposal remains in force.
The steps referred to in subsection (1) are— (a) filing a creditor’s application for the insolvent’s adjudi- cation: proceeding with a creditor’s application for the insol- vent’s adjudication that was filed before the proposal was filed: enforcing any civil remedy against the insolvent’s per- son or property: beginning any legal proceedings in respect of the debt.
(3) However, a creditor may take any of the steps listed in sub- section (2) with the permission of the court given on the terms that the court thinks appropriate.

Compare: 1967 No 54 s 144(1) (d) (c) 148 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 338 336 Duty of insolvent After the court has approved the proposal, the insolvent must do everything that is necessary to put the proposal into effect.
Compare: 1967 No 54 s 143(8) (a) 337 Duties of trustee (1) After the court has approved the proposal, the trustee must— take control of the property that is the subject of the proposal; and administer and distribute that property according to the terms of the proposal; and generally give effect to the proposal.
(b) (2) (c) The trustee may sell the property— (a) according to the terms of the proposal, if it specifies the method of sale; or in accordance with Schedule 1, if the proposal does not specify the method of sale.

(b) Compare: 1967 No 54 s 144(2) 338 Trustee must file 6-monthly summary of receipts and (1) (2) (3) (b) payments The trustee must file with the Registrar a summary of receipts and payments.
The trustee must file the summary,— (a) for each 6-month period following court approval of the proposal, within 1 month after the end of the period; and for the period between the end of the last 6-month period and the date when the trustee stops acting as trustee, within 1 month after the trustee has stopped acting.
The summary must— (a) (b) be in the prescribed form; and show the trustee’s receipts and payments during the period to which it relates; and show the total amount of the trustee’s receipts and pay- ments for all the preceding 6-month periods after the trustee’s appointment.
(c) Compare: 1967 No 54 s 144(3) 149 Part 5 s 339 Insolvency Act 2006 Reprinted as at 1 April 2010 339 Cancellation or variation of proposal (1) At any time after it has approved the proposal, the court may, if it is satisfied that 1 or more of the grounds listed in subsec- tion (2) apply,— (a) on the application of the trustee or any creditor, vary or cancel the proposal: if asked to do so by the applicant or any other creditor, adjudicate the insolvent bankrupt.
The grounds referred to in subsection (1) are— (a) (b) (2) the insolvent’s statement of affairs accompanying the proposal did not substantially set out the true position or the insolvent gave wrong or misleading replies at his or her examination, and it was unlikely that the proposal would have been accepted if the insolvent had disclosed the true facts: the insolvent has failed to carry out or comply with the terms of the proposal: the creditors generally will suffer injustice or undue delay if the proposal proceeds: for any other reason the proposal ought to be varied or cancelled.
(b) (c) (d) (3) On cancellation of the proposal, unless the court orders other- wise, all property of the insolvent vested in the trustee and not sold or disposed of by the trustee vests, without the necessity for any conveyance, transfer, or assignment,— (a) (b) in the insolvent; or if the court cancels the proposal and adjudicates the in- solvent bankrupt, in the Assignee.
(4) An order cancelling the proposal, or cancelling the proposal and adjudicating the insolvent bankrupt, does not prejudice or affect the validity of any contract, sale, disposition, or payment duly made or anything duly done under the proposal while it was in force.

If the insolvent files an application for his or her own adjudi- cation, the proposal is cancelled as if it was cancelled by the court.
Compare: 1967 No 54 s 145 (5) 150 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 342 Subpart 3—Summary instalment orders 340 Summary instalment order A summary instalment order is an order by the Assignee that the debtor pay his or her debts— (a) (b) in instalments or otherwise; and in full or to the extent that the Assignee considers prac- ticable in the circumstances of the case.
Compare: 1967 No 54 s 146(4) 341 Who may apply for order The Assignee may make a summary instalment order on the application of— (a) (b) Compare: 1967 No 54 s 146(1) the debtor; or a creditor, with the debtor’s consent.

342 Form of application (1) An application for a summary instalment order must be in the prescribed form.
(2) An application by the debtor— (a) must state— (i) (ii) that the debtor proposes to pay the creditors in full; or the amount in the dollar that the debtor proposes to pay; and (b) must state the total amount of the weekly or other in- stalments that the debtor proposes to pay; and (c) must— (i) state the name and address of the debtor’s pro- posed supervisor and annex the written consent of that person to be supervisor; or if the debtor considers that a supervisor is not necessary, state the debtor’s reasons; and (ii) (d) must contain the following information: (i) (ii) (iii) (iv) the debtor’s full name and address: details of the debtor’s property: the names and addresses of each creditor: the amount and nature of each of the creditors’ debts: 151 Part 5 s 343 Insolvency Act 2006 Reprinted as at 1 April 2010 (v) whether any of the debts are secured and the value of the charge: (vi) whether any of the debts are guaranteed by any person: the amount of the debtor’s earnings: (vii) (viii) the name and address of the debtor’s employer, if any: any other matter that may be prescribed.
(ix) Compare: 1967 No 54 s 146(2) 343 Assignee may make summary instalment order (1) The Assignee may make a summary instalment order if the Assignee is satisfied that— (a) the debtor’s total unsecured debts (excluding any student loan balance) that would be provable in the debtor’s bankruptcy are not more than $40,000; and the debtor is unable immediately to pay those debts.
(b) Before making the order, the Assignee must allow the debtor or a creditor to make representations, if the debtor or creditor wants to do so.

(2) (3) A summary instalment order is not invalid if the total amount of the debts proved is more than the amount specified in sub- section (1)(a), but in that case— (a) the supervisor appointed under section 345 may refer the matter to the Assignee; and the Assignee may, if the Assignee thinks appropriate, cancel the order.
(b) (4) The amount in subsection (1)(a) may be varied by the Gov- ernor-General by Order in Council to take account of increases in the all groups index number of the Consumer Price Index.
Compare: 1967 No 54 s 146(4), (13) 344 Additional orders In addition to an order for the payment of the debts in instal- ments, the Assignee may make orders— (a) (b) regarding the debtor’s future earnings or income: regarding the disposal of goods that the debtor owns or possesses: 152 Reprinted as at 1 April 2010 (c) Insolvency Act 2006 Part 5 s 346 giving the supervisor appointed under section 345 power to— (i) direct the debtor’s employer to pay all or part of the debtor’s earnings to the supervisor; and supervise payment, out of the debtor’s earnings or income, of the reasonable living expenses of the debtor and his or her relatives and depend- ants.
Compare: 1967 No 54 s 146(8), (9) (ii) (2) 345 Appointment of supervisor (1) A summary instalment order must appoint a suitable and will- ing person to supervise compliance by the debtor with the terms of the order.

The Assignee may dispense with the appointment of a super- visor if the Assignee thinks it appropriate, and in that case— the provisions of this subpart apply as if the debtor was (a) the supervisor, except for section 346; and section 346 applies as if the Assignee was the super- visor.
(b) (3) The Assignee may, if the Assignee thinks appropriate, require the supervisor to provide a bond to secure the supervisor’s performance of his or her obligations under the Act, and must specify the amount of the bond and the person to whom it must be given.

Compare: 1967 No 54 s 146(5)–(7) 346 Role of supervisor (1) The supervisor must supervise the debtor’s compliance with the term’s of the summary instalment order and any other orders made under section 344.
The supervisor may charge the debtor remuneration for carry- ing out his or her duties as supervisor at the amount or rates fixed or prescribed under subsection (3).

The Governor-General may, by Order in Council, make regu- lations that fix or prescribe the amount or rates of remuneration chargeable under subsection (2).
(2) (3) 153 Part 5 s 347 Insolvency Act 2006 Reprinted as at 1 April 2010 347 Assignee may require supervisor or past supervisor to provide documents The Assignee may, by written notice, require the supervisor or a past supervisor to provide the Assignee within a reasonable period with any document relating to the debtor’s property, conduct, or dealings in the supervisor’s or past supervisor’s possession or under his or her control.
348 Termination of appointment for failure to supervise adequately The Assignee may terminate the supervisor’s appointment if the Assignee considers that the supervisor has failed to super- vise the debtor’s compliance adequately, and may appoint a replacement supervisor.

349 Period of instalments The payment of instalments under a summary instalment order may be spread over a period of— (a) (b) Compare: 1967 No 54 s 146(12) up to 3 years; or up to 5 years, if justified by special circumstances.
350 Variation or discharge of order The debtor or any creditor or the supervisor may at any time apply to the Assignee to vary or discharge a summary instal- ment order, and the Assignee may make an order as the As- signee thinks appropriate.

Compare: 1967 No 54 s 146(14) 351 Effect of order All instalments payable under a summary instalment order must be paid in the prescribed manner.
Compare: 1967 No 54 s 146(11) 352 Proceedings against debtor (1) In this section, proceeding means any proceeding against the person or property of the debtor in respect of a debt that has been— 154 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 354 (a) (b) (c) shown in the debtor’s application for the summary in- stalment order; or included in the summary instalment order; or notified to the supervisor.
(2) After the summary instalment order has been made, a person must not begin or continue a proceeding unless— (a) the Assignee gives permission for a creditor to begin or continue the proceeding (in which case the Assignee may impose any conditions that the Assignee thinks ap- propriate); or the debtor is in default under the order.
(b) In the case of a proceeding in a District Court, unless subsec- tion (2) applies, the court— (a) must halt the proceeding on receiving notice of the (3) order; and (b) may award all or part of the creditor’s costs incurred up to the time of the court’s notification, and may certify accordingly for the purpose of the creditor proving the debt under this subpart.
Compare: 1967 No 54 s 148 353 Supervisor must give notice of summary instalment order to creditors The supervisor must send a notice of the summary instalment order to every creditor— (a) (b) whose name is shown on the debtor’s application for the known to the supervisor; or order; or who has proved a debt under section 356.
(c) Compare: 1967 No 54 s 147(a) 354 Public register of debtors subject to current summary (1) (2) instalment order The Assignee must maintain a public register of persons who are subject to a current summary instalment order.

The register must be maintained in accordance with subpart 5 of Part 7.
155 Part 5 s 355 Insolvency Act 2006 Reprinted as at 1 April 2010 355 Meaning of current summary instalment order A summary instalment order is not current if it has been dis- charged or all the instalments required to be paid under the order have been paid in accordance with the order.
356 Creditor’s claim (1) A creditor who has proved his or her debt to the satisfaction of the supervisor is entitled to be included as a creditor in the administration of the debtor’s estate under the summary instal- ment order for the amount of the debt.

(2) A creditor may object to the supervisor’s acceptance or rejec- tion of any creditor’s claim by applying to the Assignee.
If a creditor objects under subsection (2), the Assignee may give any directions the Assignee thinks appropriate as to the acceptance or rejection of the claim.
(3) (4) A person who becomes a creditor of the debtor after the order has been made, and who proves a debt before the supervisor,— (a) may elect to be included in the administration of the (b) debtor’s estate; and in that case, may be paid a dividend under the order only after creditors who became creditors of the debtor before the order was made and who have been included as a creditor in the administration have been paid under the order.
Compare: 1967 No 54 s 147(b)–(d) 357 Payment of debtor’s earnings to supervisor (1) This section applies if the supervisor, under a power given by a summary instalment order made by the Assignee, directs the debtor’s employer to pay the debtor’s earnings, or part of them, to the supervisor.

The amounts that the employer must pay to the supervisor are recoverable as a debt from the employer, and the supervisor’s receipt is a complete discharge to the employer for the debt.
Payment by the employer in contravention of the supervisor’s direction to pay the supervisor discharges the liability of the employer to the supervisor for the amount of the payment only if it is made— (2) (3) 156 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 359 (a) (b) with the consent of the supervisor or the Assignee; or to a person who is not the debtor and who has a better legal claim to it than the debtor.
Compare: 1967 No 54 s 146(10) 358 Distribution of money paid by debtor (1) (b) (c) The supervisor must distribute the money paid by the debtor under the summary instalment order in the following order: (a) first, payment of the costs of administration (including the supervisor’s remuneration) in accordance with the prescribed scale: secondly, the Assignee’s costs and fees: thirdly, payment of the debts in accordance with the order: fourthly, payment of any surplus to the debtor.
(d) The debtor is discharged from the unsecured debts to which the order relates if the supervisor pays, from the money received under the order, the amounts in subsection (1)(a) to (d) in full.
Compare: 1967 No 54 s 149 (2) 359 Default by debtor (1) A debtor who defaults in paying any sum due under a summary instalment order is presumed, unless the contrary is proved, to have— (a) (b) If the debtor defaults in making payment in accordance with the order, unless a District Court orders otherwise,— (a) been able to pay the sum from the date of the order; and refused or neglected to pay it.
(2) a proceeding that has been halted under section 352 may begin or continue: any period during which a proceeding was halted under section 352 must be added to any period of limitation that applies to the proceeding.

(b) (3) The supervisor must notify the Assignee as soon as practicable of a default by the debtor in making payment in accordance with the order.
Compare: 1967 No 54 s 150 157 Part 5 s 360 Insolvency Act 2006 Reprinted as at 1 April 2010 360 Offence of obtaining credit (1) A person (A) commits an offence if— (a) (b) A is a debtor in respect of whom a summary instalment order has been made; and before all creditors have been paid all amounts to which they are entitled under the order, A,— (i) alone or jointly with another person, obtains for the time being credit of $1,000 or more; or incurs liability for the time being to any person of $1,000 or more for the purpose of obtaining credit for another person; or enters into a hire purchase agreement under which A is liable to pay $1,000 or more.
(ii) (iii) (2) It is a defence if A proves,— (a) in a case to which subsection (1)(b)(i) applies, that be- fore obtaining the credit of $1,000 A informed the per- son giving the credit that A was affected by a summary instalment order: in a case to which subsection (1)(b)(ii) applies, that be- fore A incurred the liability of $1,000 the person giving the credit was informed that A was affected by a sum- mary instalment order.
(b) (3) A person who commits an offence under this section is liable on summary conviction to imprisonment for a term not ex- ceeding 1 year or a fine not exceeding $5,000 or both.

(4) No matter what section 14 of the Summary Proceedings Act 1957 says, an information for an offence under this section may be laid at any time within 2 years after the time when the matter of the information arose.
Compare: 1967 No 54 s 151 Subpart 4—No asset procedure 361 Introduction to this subpart This subpart sets out a procedure for dealing with a debtor who has no realisable assets.

158 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 363 Entry to no asset procedure 362 Application for entry to no asset procedure (1) A debtor who meets the criteria set out in section 363 may apply to the Assignee for entry to the no asset procedure.
(2) A debtor applies for entry to the no asset procedure by com- pleting and filing with the Assignee the following documents: (a) an application in the prescribed form; and a statement in the prescribed form of the debtor’s affairs.

(b) The Assignee may reject the debtor’s application if the appli- cation or statement of the debtor’s affairs is, in the Assignee’s opinion, incorrect or incomplete.
(3) 363 Criteria for entry to no asset procedure (1) (e) (c) (d) The Assignee may admit a debtor to the no asset procedure if the Assignee is satisfied on reasonable grounds that— the debtor has no realisable assets; and (a) the debtor has not previously been admitted to the no (b) asset procedure; and the debtor has not previously been adjudicated bankrupt; and the debtor has total debts (excluding any student loan balance) that are not less than $1,000 and not more than $40,000; and under a prescribed means test, the debtor does not have the means of repaying any amount towards those debts.
In this section, realisable assets does not include the assets that a bankrupt is allowed to retain under section 158, but does include any assets (for example, gifted assets) that might be recoverable by the Assignee if the debtor were adjudicated bankrupt on the date of application for entry to the no asset procedure and if the irregular transaction provisions in subpart 7 of Part 3 applied.
The amounts in subsection (1)(d) may be varied by the Gov- ernor-General by Order in Council to take account of increases in the all groups index number of the Consumer Price Index.

Section 363(2): amended, on 17 November 2009, by section 7 of the Insolvency Amendment Act 2009 (2009 No 52).
(2) (3) 159 Part 5 s 364 Insolvency Act 2006 Reprinted as at 1 April 2010 364 Debtor disqualified from entry to no asset procedure in certain cases The Assignee must not admit a debtor to the no asset procedure if the Assignee is satisfied, on reasonable grounds, that— (a) the debtor has concealed assets with the intention of de- frauding his or her creditors, for example, by transfer- ring property to a trust; or the debtor has engaged in conduct that would, if the bankrupt were adjudicated bankrupt, constitute an of- fence under this Act; or the debtor has incurred a debt or debts knowing that the debtor does not have the means to repay them; or a creditor intends applying for the debtor’s adjudication as a bankrupt and it is likely that the outcome for the creditor if the debtor is adjudicated bankrupt will be materially better than if the debtor is admitted to the no asset procedure.
(b) (c) (d) 365 Assignee must notify creditors If a debtor has applied to the Assignee for entry to the no asset procedure, the Assignee must as soon as practicable send a summary of the debtor’s assets and liabilities to each known creditor of the debtor.
366 Restrictions on debtor obtaining credit after application made A debtor who has applied for entry to the no asset procedure must not obtain credit (including hire purchase credit), either alone or jointly with another person, of more than $100 with- out first informing the credit provider that the debtor has ap- plied for entry to the no asset procedure.
367 When debtor admitted to no asset procedure (1) A debtor is admitted to the no asset procedure when the As- signee sends the debtor a written notice in the prescribed form.

The Assignee must as soon as practicable notify creditors and advertise in the prescribed manner that the debtor has been admitted to the no asset procedure.
(2) 160 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 370 368 Public register of persons admitted to no asset procedure The Assignee must maintain a public register of persons ad- (1) mitted to the no asset procedure and persons discharged from that procedure under section 377.

The register must be maintained in accordance with subpart 5 of Part 7.

Section 368(1): amended, on 17 November 2009, by section 13(6) of the Insol- vency Amendment Act 2009 (2009 No 52).
(2) Effect of entry to no asset procedure 369 Creditors may not enforce debts (1) A creditor (C) of a debtor (D) must not, after D has been ad- mitted to the no asset procedure, begin or continue any step to recover or enforce a debt— (a) that D owes C at the time when D applies for entry to the no asset procedure; and that would be provable in D’s bankruptcy if D were adjudicated bankrupt.
(b) (2) However, subsection (1) does not apply to the following debts, which remain enforceable: (a) any amount payable under a maintenance order under the Family Proceedings Act 1980: any amount payable under the Child Support Act 1991: a student loan balance.
(b) (c) 370 Debtor’s duties after entry to no asset procedure (1) The Assignee may require the debtor, and the debtor must comply with any reasonable request, to provide assistance, documents, and information necessary for applying the no as- set procedure to the debtor.

The debtor must notify the Assignee as soon as practicable of any change in the debtor’s circumstances that would allow the debtor to repay an amount towards the debts referred to in section 369(1).
The debtor must not obtain credit (including hire purchase credit), either alone or jointly with another person, of more than $1,000 without first informing the credit provider that the debtor is subject to the no asset procedure.
(2) (3) 161 Part 5 s 371 Insolvency Act 2006 Reprinted as at 1 April 2010 371 Offence of obtaining credit (1) A person (A) commits an offence if A, while admitted to the no asset procedure,— (a) alone or jointly with another person, obtains for the time being credit of $1,000 or more; or incurs liability for the time being to any person of $1,000 or more for the purpose of obtaining credit for another person; or enters into a hire purchase agreement under which A is liable to pay $1,000 or more.
(2) It is a defence if A proves,— (a) in a case to which subsection (1)(a) applies, that before obtaining the credit of $1,000 A informed the person giving the credit that A was admitted to the no asset procedure: in a case to which subsection (1)(b) applies, that before A incurred the liability of $1,000 the person giving the credit was informed that A was admitted to the no asset procedure.
(b) (c) (b) (3) A person who commits an offence under this section is liable on summary conviction to imprisonment for a term not ex- ceeding 1 year or a fine not exceeding $5,000 or both.

(4) Despite anything that section 14 of the Summary Proceedings Act 1957 says, an information for an offence under this section may be laid at any time within 2 years after the date of the offence.
Compare: 1967 No 54 s 151 Termination and discharge 372 Termination A debtor’s participation in the no asset procedure terminates when— (a) the Assignee terminates the debtor’s participation under section 373; or the debtor is discharged under section 377; or the debtor applies for his or her own adjudication; or a creditor who is entitled to do so (for example, because the creditor’s debt is enforceable as a debt specified in (b) (c) (d) 162 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 5 s 375 section 369(2)) applies for the debtor’s adjudication and the debtor is adjudicated bankrupt.
373 When Assignee may terminate (1) The Assignee may terminate a debtor’s participation in the no asset procedure if— (a) the debtor was wrongly admitted to the no asset proced- ure, for example, because the debtor concealed assets or misled the Assignee; or the Assignee is satisfied that the debtor’s financial cir- cumstances have changed, enabling the debtor to repay an amount towards his or her debts.
(b) (2) (3) The Assignee terminates a debtor’s participation in the no as- set procedure by sending the debtor a written notice in the pre- scribed form to the debtor’s last known address, and the ter- mination is effective when the notice is sent, whether or not the debtor receives it.

The Assignee must as soon as practicable send a written notice of the termination to each creditor of the debtor known to the Assignee.
374 Assignee may apply for preservation order (1) If the Assignee terminates a debtor’s participation in the no asset procedure on the ground that the debtor has concealed assets or misled the Assignee, the court on the application of the Assignee may make an order for the preservation of the debtor’s assets pending an application for the debtor’s adjudi- cation.

The court may make an order under subsection (1) on the terms and conditions that it sees fit.
(2) 375 Effect of termination Except in the case of termination by discharge under sec- tion 377, the debtor’s debts that became unenforceable on the debtor’s entry to the no asset procedure become again enforceable on termination of the debtor’s participation in the no asset procedure, and the debtor is liable to pay any penalties and interest that may have accrued.
163 Part 5 s 376 Insolvency Act 2006 Reprinted as at 1 April 2010 Section 375: amended, on 17 November 2009, by section 8 of the Insolvency Amendment Act 2009 (2009 No 52).

376 Creditor may apply to Assignee for termination (1) A creditor who objects on a ground set out in subsection (2) to the admission of the debtor to the no asset procedure may apply to the Assignee for termination.
The grounds for objection are— (a) the debtor did not meet the criteria for entry to the no asset procedure; or there are reasonable grounds for the Assignee to con- clude that the debtor was disqualified under section 364.

(2) (b) 377 Time of discharge (1) The debtor is automatically discharged from the no asset pro- cedure 12 months after the date when the debtor was admitted to it.
(2) However, a debtor is not automatically discharged if the As- signee— (a) (b) is satisfied that the 12-month period should be extended for the purpose of properly considering whether the debtor’s participation in the no asset procedure should be terminated; and sends a written deferral notice to the debtor’s last known address before the expiry of the 12-month period.
The deferral notice must state an alternative date for automatic discharge, which must be no later than 25 working days after the expiry of the 12-month period.

The deferral notice is effective whether or not the debtor re- ceives it.

The Assignee must, as soon as practicable, send a written no- tice of the deferral to each creditor of the debtor known to the Assignee.

The debtor is automatically discharged from the no asset pro- cedure on the date stated in the deferral notice.
The Assignee may revoke a deferral notice in the same way in which it was sent, in which case, the debtor is automatically discharged from the no asset procedure on— (3) (4) (5) (6) (7) 164 Reprinted as at 1 April 2010 (a) Insolvency Act 2006 Part 5 s 377B the expiry of the 12-month period in subsection (1), if the notice is revoked before that date; or in other cases, the date of revocation.
(b) Section 377 heading: substituted, on 17 November 2009, by section 9(1) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 377(2): substituted, on 17 November 2009, by section 9(2) of the In- solvency Amendment Act 2009 (2009 No 52).

Section 377(3): added, on 17 November 2009, by section 9(2) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 377(4): added, on 17 November 2009, by section 9(2) of the Insolvency Amendment Act 2009 (2009 No 52).
Section 377(5): added, on 17 November 2009, by section 9(2) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 377(6): added, on 17 November 2009, by section 9(2) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 377(7): added, on 17 November 2009, by section 9(2) of the Insolvency Amendment Act 2009 (2009 No 52).
377A Effect of discharge (1) On discharge under section 377, the debtor’s debts that became unenforceable on the debtor’s entry to the no asset procedure are cancelled, and the debtor is not liable to pay any part of the debts, including any penalties and interest that may have accrued.
(2) However, subsection (1) does not apply to— (3) (a) (b) any debt or liability incurred by fraud or fraudulent breach of trust to which the debtor was a party: any debt or liability for which the debtor has obtained forbearance through fraud to which the debtor was a party.

The debts and liabilities referred to in subsection (2) become again enforceable on discharge under section 377, and the debtor is liable to pay any penalties and interest that may have accrued.
Section 377A: inserted (with effect on 10 March 2009), on 17 November 2009, by section 10(2) of the Insolvency Amendment Act 2009 (2009 No 52).
377B Discharge does not release partners and others A discharge under section 377 does not release any person who, at the date of discharge, was— 165 Part 6 s 378 Insolvency Act 2006 Reprinted as at 1 April 2010 (a) (b) (c) (d) a business partner of the discharged debtor; or a co-trustee with the discharged debtor; or jointly bound or had made any contract with the dis- charged debtor; or a guarantor or in the nature of a guarantor of the dis- charged debtor.
Section 377B: inserted, on 17 November 2009, by section 11 of the Insolvency Amendment Act 2009 (2009 No 52).
Part 6 Insolvent deceased estates Interpretation In this Part, unless the context otherwise requires,— administration, in relation to the will or estate of a deceased person, has the same meaning as in the Administration Act 1969 administrator means an administrator within the meaning of the Administration Act 1969 appointee means an appointee under section 387(2) beneficiary means a person who is beneficially interested in the deceased’s estate estate, in relation to a deceased debtor, means that part of the debtor’s estate that is available for distribution under sec- tion 393.
This subpart does not affect— (a) any property of a deceased person that does not form part of his or her estate as defined in subsection (1); or the administration of that property.
(b) The administrator of the property of a deceased person (D) that does not form part of D’s estate as defined in subsection (1) is, and (whether or not there is an administrator) the appointee is not,— (a) D’s executor or administrator for the purposes of sec- tion 6 of the Deaths by Accidents Compensation Act 1952: (b) D’s personal representative for the purposes of sec- tion 48 of the Trustee Act 1956.
Compare: 1967 No 54 s 153 378 (1) (2) (3) 166 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 6 s 380 Application and order that estate be administered under this Part 379 Court may order that estate be administered under this (1) (2) Part The court may order that the estate of a deceased debtor be administered under this Part on the application,— (a) under section 380, of the administrator or a person who is applying to the court for a grant of administration: under section 381, of— (i) a creditor who has produced evidence establish- ing a debt due to the creditor; or a beneficiary.
(ii) (b) The court may refuse to make the order if it is satisfied that— there is a reasonable probability that the estate will be (a) enough for payment of the deceased’s debts; and the creditors will not be prejudiced by the estate being administered in the normal way.
(b) 380 Application by administrator, etc (1) The administrator, or a person who is applying to the court for a grant of administration, may apply to the court for an order that the estate be administered under this Part if the administra- tor or person applying ascertains that the money in the estate, together with the proceeds of any assets in the estate that can conveniently be converted into money, will not be, or is not likely to be, enough to meet the several claims on the estate.
The application may be— (a) joined with an application for a grant of administration in respect of the deceased’s will or of the deceased’s property that does not form part of his or her estate; or (2) (b) made at any time after that grant of administration.

(3) An applicant under this section, in addition to the application, must file in the court an account that shows the assets, debts, and liabilities of the deceased, to the extent that the applicant knows what they are.
The account— (a) must be verified by affidavit; and (b) may be amended from time to time; and (4) 167 Part 6 s 381 Insolvency Act 2006 Reprinted as at 1 April 2010 (c) must be filed— when the application is filed; or (i) (ii) within the prescribed time after the application is filed; or (iii) within the additional time that the court allows.
Compare: 1967 No 54 s 154 381 Application by creditor or beneficiary for order under (1) this Part The following persons may also apply to the court for an order under this Part: (a) a creditor of the deceased’s estate, if the creditor’s debt has reached the threshold for a creditor’s application for adjudication: a beneficiary.
(b) (2) A creditor or beneficiary may apply for an order if— (a) (b) the administrator has not applied under this Part, and after being requested in writing to apply, fails to apply within 15 working days after receiving the request; or after 4 months from the date of the debtor’s death, no administrator has been appointed and no application has been filed in the court under section 380.
In the case of an application under subsection (2)(a) for an order that the estate be administered under this Part, the court must not make the order before 2 months have expired after the date when the administration was granted, but this restriction does not apply if— (a) (b) the administrator has consented; or the applicant proves that— (i) the deceased committed an act of bankruptcy within 3 months before his or her death; or the administrator has favoured or is about to favour any creditor; or (ii) (c) in the court’s opinion the administrator is not properly administering the estate.
The court may allow an application under subsection (2)(b) to be filed before 4 months after the date of the debtor’s death have expired if the court is satisfied that— (3) (4) 168 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 6 s 385 (a) (b) the deceased committed an act of bankruptcy within 3 months before his or her death; or the estate that should have been available for the de- ceased’s creditors is reducing.
Compare: 1967 No 54 s 155 382 Notice of application by creditor or beneficiary If an application has been filed by a creditor or beneficiary under section 381, the applicant must give notice of the appli- cation in the prescribed manner to— (a) (b) the administrator; or if there is no administrator, to the person specified by the court.
Compare: 1967 No 54 s 156 383 When Registrar may hear application (1) A Registrar may hear an application for administration of the estate of a deceased person under this Part if— (a) the Registrar has jurisdiction to grant administration of the estate of any deceased person; and the application is joined with an application for a grant of administration in respect of the estate or will of the deceased.

(b) (2) A Registrar may hear the application even if a Judge is avail- able to hear it.
Compare: 1967 No 54 s 157(2) 384 Costs of application The court, on hearing an application under this Part, may— (a) make the order or refuse the application with or without (b) costs; and in either case, order costs to be paid by one party to another, or out of the estate.
Compare: 1967 No 54 s 157(1) 385 Court may order administration by Assignee or Public (1) Trust This section applies if an application has been filed for an order to administer an estate under this Part, and the court thinks 169 Part 6 s 386 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) that the estate is likely to be better administered by one of the persons mentioned in subsection (2)(b) than by the person who is or may become the administrator.
The court may, as part of its original order on the application or by any subsequent order, order that— (a) the administrator (if there is one) must no longer admin- ister the estate; and the Assignee, Public Trust, or some other person, as the court thinks appropriate, must administer the estate.
(b) Compare: 1967 No 54 s 158 386 Certificate filed by Public Trust or Māori Trustee has (1) (2) (3) effect as application and order Public Trust or the Māori Trustee may file a certificate under this section if Public Trust or the Māori Trustee (as the case may be) is the administrator of, or would be entitled to obtain a grant of administration for, an apparently insolvent estate.
The filing of the certificate in the prescribed form has the effect both of an application and an order that the estate be adminis- tered under this Part.
The certificate must be filed in the registry of— (a) the court out of which the grant of administration is- sued; or the court in which Public Trust or the Māori Trustee has filed an election to administer under— (i) (b) Part 4 of the Public Trust Office Act 1957 or Part 6 of the Public Trust Act 2001, in the case of Public Trust; or section 12A or section 12B of the Maori Trustee Act 1953, in the case of the Māori Trustee; or (ii) (c) if no grant of administration has been issued or no elec- tion to administer has been filed, the court that Public Trust or the Māori Trustee thinks appropriate.
(4) An election to administer an estate under this Part may be com- bined with an election to administer the estate under Part 6 of the Public Trust Act 2001 or section 12A or section 12B of the Maori Trustee Act 1953.

170 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 6 s 388 (5) Powers conferred on Public Trust or the Māori Trustee under this Part are in addition to the powers conferred on either of them by any other enactment or law.
Compare: 1967 No 54 s 160 Section 386 heading: amended, on 1 July 2009, by section 30(1) of the Māori Trustee Amendment Act 2009 (2009 No 12).

Section 386(1): amended, on 1 July 2009, by section 30(1) of the Māori Trustee Amendment Act 2009 (2009 No 12).

Section 386(3)(b): amended, on 1 July 2009, by section 30(1) of the Māori Trustee Amendment Act 2009 (2009 No 12).

Section 386(3)(b)(ii): amended, on 1 July 2009, by section 30(1) of the Māori Trustee Amendment Act 2009 (2009 No 12).
Section 386(3)(c): amended, on 1 July 2009, by section 30(1) of the Māori Trustee Amendment Act 2009 (2009 No 12).

Section 386(5): amended, on 1 July 2009, by section 30(1) of the Māori Trustee Amendment Act 2009 (2009 No 12).

Effect of order that estate be administered under this Part 387 Estate vests in appointee (1) (2) The whole of the estate at the date when the application for the order under this Part was filed vests in the person appointed by the court to administer it (the appointee).
The court, in its order that the estate be administered under this Part or in a subsequent order, may appoint as appointee— the administrator; or (a) the Assignee; or (b) Public Trust; or (c) (d) any other person.
Compare: 1967 No 54 s 159(1) 388 Appointee must realise, administer, and distribute estate The appointee must, as soon as practicable after the estate vests in the appointee, realise, administer, and distribute the assets in accordance with the law and practice of bankruptcy, subject to any modifications in this Part.
Compare: 1967 No 54 s 159(1) 171 Part 6 s 389 Insolvency Act 2006 Reprinted as at 1 April 2010 389 Entitlement of surviving spouse to household furniture (1) (2) (3) (4) (5) and effects This section applies if the estate that vests in the appointee includes any of the deceased’s necessary household furniture and effects that would have passed to the deceased’s surviving spouse (S) if the estate had not been insolvent.
S may select and retain as his or her own property so much of the furniture and effects referred to in subsection (1) that the appointee determines.

S must make the selection within the time that the appointee allows.

S’s selection does not affect any rights under a valid charge or hire purchase agreement in respect of the goods selected.
The fact that the goods available for selection are subject to a charge or hire purchase agreement does not give S any rights to any other part of the deceased’s property.

Compare: 1967 No 54 s 159(2) 390 Appointee may make allowance to surviving spouse (1) The appointee may make an allowance out of the estate to the surviving spouse or to any of the relatives or dependants of the deceased or the surviving spouse for the support of any of them.
(2) However, the appointee must first obtain the consent of the creditors, which must be expressed in the form of an ordinary resolution.

Compare: 1967 No 54 s 159(4) Administration of estate under this Part 391 Sections 392 to 398 apply in respect of estate administered under this Part Sections 392 to 398 apply when an order has been made that the estate be administered under this Part.
Compare: 1967 No 54 s 162(1) 172 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 6 s 394 392 Appointee’s authority, powers, and functions The appointee has, in relation to the estate, the same authority, powers, and functions as the Assignee has in relation to the property of a bankrupt.
Compare: 1967 No 54 s 162(1) 393 Distribution of estate (1) The estate must be distributed in the following order: (a) (b) (c) first, payment of all proper costs, charges, debts, and ex- penses of the due administration of the estate, whether incurred before or after the order is made: secondly, payment of the deceased’s reasonable funeral expenses: thirdly, payment of the following expenses of the de- ceased incurred during the 3 months immediately be- fore the deceased’s death: medical expenses: (i) reasonable expenses for hospital care (as defined (ii) in section 4(1) of the Health and Disability Ser- vices (Safety) Act 2001) provided for the de- ceased, so far as those expenses are lawfully re- coverable: (e) (d) fourthly, payment of other claims and interest in accord- ance with section 274: all other claims, which rank equally and abate in pro- portion if there is insufficient to pay them in full.
For the purposes of subsection (1)(d), a reference in sec- tion 274 to the date of adjudication must be read as a reference to the date of the deceased’s death.
Compare: 1967 No 54 s 162(1)(b), (2) (2) 394 Payment of surplus (1) In this section, surplus means the surplus of assets that re- mains with the appointee after the appointee has paid in full— (a) (b) (c) the debts due by the deceased debtor; and the costs of the administration under this Part; and any other money that would be payable in a case of bankruptcy.
The surplus must be— (2) 173 Part 6 s 395 Insolvency Act 2006 Reprinted as at 1 April 2010 (a) (b) paid to, or retained by, the administrator of the de- ceased’s property that does not form part of the de- ceased’s estate under this Part, if there is one; or if there is no administrator of the deceased’s property that does not form part of the deceased’s estate under this Part, distributed as approved by the court, having regard to the persons who are entitled to it.
The court may make an order approving the distribution of the surplus as part of the order that the estate be administered under this Part, or at any time after, and the order may be varied in respect of the surplus that remains in the appointee’s hands at the date of each variation.
Compare: 1967 No 54 s 162(1)(c), (3) (3) 395 Creditor’s notice to administrator (1) If a creditor applies for an order that the deceased’s estate be administered under this Part, and the order is made, notice to the deceased’s administrator that the application has been filed is treated as an act of bankruptcy.

(2) After receipt of the notice, the administrator does not obtain a discharge for any payment of money or disposition of property by the administrator, unless it is done pursuant to the order.
Compare: 1967 No 54 s 162(1)(d) 396 Appointee may act in relation to deceased’s irregular transactions (1) An appointee may take a step that the Assignee could have taken under subpart 7 of Part 3 (for example, the cancella- tion of an irregular transaction) as if the deceased had been bankrupt at the time of death.
(2) However, there are 2 additional restrictions when an appointee takes a step under subpart 7 of Part 3: (a) the appointee must not issue a notice cancelling a gift or voluntary settlement without first obtaining the permis- sion of the court; and the court must not give permission unless it appears that recovery of the gift or settlement is necessary to pay the debts of the estate in full (includ- ing interest); and 174 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 399 (b) the court must not make an order under section 213 un- less it is satisfied that recovery of the deceased’s contri- bution to the property of another is necessary to pay the debts of the estate in full (including interest).
Compare: 1967 No 54 s 162(1)(e), (f) 397 Appointee may cancel execution The appointee may cancel an execution against the deceased debtor’s estate unless it was completed more than 3 months before the date of the order that the estate be administered under this Part.
Compare: 1967 No 54 s 162(1)(g) 398 Administrator’s acts valid before notice Nothing in this Act invalidates any payment made, or any act or thing done, in good faith by the administrator before the administrator had notice of an intention to apply for an order that the estate be administered under this Part.
Compare: 1967 No 54 s 163 Part 7 Offences and miscellaneous provisions Subpart 1—The Assignee 399 Appointment of Official Assignee for New Zealand and (1) others Suitable persons must be appointed under the State Sector Act 1988 to the following positions under this Act: the Official Assignee for New Zealand: (a) the Deputy Official Assignee for New Zealand: (b) Official Assignees: (c) as required, Deputy Assignees to help in the adminis- (d) tration of estates.
(2) Assignees and Deputy Assignees are officers of the court.

(3) The Deputy Official Assignee must discharge his or her duties and exercise his or her powers under the control and direction of the Official Assignee for New Zealand.

175 Part 7 s 400 Insolvency Act 2006 Reprinted as at 1 April 2010 (4) Assignees and Deputy Assignees must discharge their duties under the control and direction of the Official Assignee for New Zealand and the Deputy Official Assignee for New Zealand.
(5) Nothing in this section affects section 59 or section 404(3).

Compare: 1967 No 54 s 15 400 Assignee may act on behalf of another Assignee An Assignee or Deputy Assignee may act for, or in the place of, another Assignee or Deputy Assignee, and in that capacity has all the authority and powers of the Assignee or Deputy Assignee for whom, or in whose place, he or she acts.
Compare: 1967 No 54 s 16 401 Assignee’s use of name, seal, etc (1) An Assignee may sue and be sued in the name of “The Official Assignee in Bankruptcy of the property of [bankrupt’s name inserted]”, and in that name may do anything that must be done or should be done as part of his or her functions as Assignee.

(2) An Assignee may— (a) (b) administer oaths and take statutory declarations; and appear in court and examine the bankrupt in any pro- ceedings.
(3) An Assignee must have a seal of office, which the Assignee must keep and use when required in the administration of the estates in the Assignee’s charge.

(4) An Assignee may execute all documents by signing the As- signee’s own name over the official name, and need not affix a seal to any document, although he or she may do so.
Compare: 1967 No 54 s 17 402 Assignee’s additional rights and remedies The Assignee, in addition to rights and remedies under this Act, has the rights and remedies provided by any other Act or rule of law.

176 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 406 (2) 403 Disqualification of Assignee (1) An Assignee (A) is disqualified from acting in a bankrupt es- tate if A is a creditor of the estate and the creditors resolve that A must not act as Assignee.
Subsection (1) does not apply if A is a creditor of the estate only in the capacity of— (a) (b) (c) Compare: 1967 No 54 s 18(1) the Assignee of the property of another bankrupt; or the liquidator of a company; or an appointee under Part 6.

404 Vacation of office by Assignee (1) An Assignee must vacate his or her office if he or she is adju- dicated bankrupt.

(2) An Assignee is eligible, subject to the provisions of the State Sector Act 1988, to be reappointed an Assignee when dis- charged from bankruptcy.
This section does not affect the question of the employment of an Assignee who is adjudicated bankrupt whilst in any other position in the Public Service.

Compare: 1967 No 54 s 18(3) (3) 405 Protection of Assignee An Assignee is not liable in any action or proceeding for any thing the Assignee may have done or omitted to do by reason only that the bankrupt is discharged or the bankruptcy is an- nulled.
Compare: 1967 No 54 s 138 406 Assignee’s remuneration (1) The Assignee may charge remuneration for carrying out his or her duties and exercising his or her powers as Assignee at the amount or rates fixed or prescribed under section 407 or charged according to rates prescribed under that section.

Remuneration that has been charged under subsection (1) and paid to the Assignee must be paid into a Crown Bank Account.
Compare: 1967 No 54 s 166 (2) 177 Part 7 s 407 Insolvency Act 2006 Reprinted as at 1 April 2010 (2) 407 Rates of Assignee’s remuneration (1) The Governor-General may, by Order in Council, make regu- lations that fix or prescribe the amount or rates of remuneration chargeable under section 406.
The regulations may, for example, prescribe— (a) (b) hourly or other rates: different rates for work done in the bankruptcy by dif- ferent classes of persons: rates by reference to the net value of the assets realised by the Assignee together with other amounts as may be specified: rates for the exercise of particular functions or powers: rates by reference to any other criteria that may be spe- cified.
(c) (d) (e) Compare: 1967 No 54 s 166A 408 Assignee must apply for order of release (1) After advertising the filing of the final statement of accounts and statement of financial position for the estate of a bankrupt (see section 228), the Assignee must apply to the court for an order releasing the Assignee from the administration of that estate.

The Assignee must advertise his or her intention to apply for an order of release, and the time when the application will be heard.
The court must hear the application not earlier than 10 work- ing days before, and not later than 20 working days after, the Assignee advertises the application under subsection (2).
(2) (3) (4) On hearing the application, the court— (a) must take into account any objection to the Assignee’s release by any creditor or other person interested in the bankruptcy; and if the court refuses the order, may, on the applica- tion of any creditor or other person interested in the bankruptcy, make any order it thinks fit to remedy any breach of duty by the Assignee.
(b) Compare: 1967 No 54 s 133 178 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 412 409 Effect of order (1) An order of release made under section 408 discharges the Assignee, from the date of the order, from all liability for any act or omission by the Assignee— (a) (b) in the administration of the bankrupt’s affairs: in relation to the Assignee’s conduct as Assignee of the bankrupt up to the date of the order.

(2) The order must not be revoked except if it was obtained by fraud.
Compare: 1967 No 54 s 133(5), (6) 410 Subsequent order of release (1) (2) (3) This section applies if the Assignee receives further property of the bankrupt after the date of an order of release.

The Assignee must, after realising or otherwise dealing with that property, apply for an order of release in respect of the Assignee’s administration of it.

Sections 408 and 409 apply to an application for a subsequent order of release.
Compare: 1967 No 54 s 133(7) Subpart 2—The court Jurisdiction and powers of court 411 (1) A Judge may exercise all the powers and jurisdiction given to the court under this Act.

(2) A Judge may hear a proceeding under this Act, or any aspect of it, in Chambers or in open court, except that the following must be heard and dealt with in open court: the public examination of a bankrupt: (a) an application for annulment of a bankruptcy or the dis- (b) charge of a bankrupt.
Compare: 1967 No 54 s 5(1) 412 Court may look at real nature of transaction In considering a transaction, the court may look at its real na- ture, and it does not matter that the transaction appears to be, 179 Part 7 s 413 Insolvency Act 2006 Reprinted as at 1 April 2010 or is described by the parties to it as being, something differ- ent.
Compare: 1967 No 54 s 5(2) 413 When Registrar or District Court Judge may exercise powers and jurisdiction of court (1) A Registrar or a District Court Judge has, with the exception of the powers listed in subsection (2), all the powers and jur- isdiction of the court under this Act during— (a) (b) (c) a court vacation; or the illness of a Judge; or any period when there is no Judge at the place where the office of the court is situated.
(2) A Registrar or a District Court Judge does not have the power under subsection (1) to— (a) make an order of discharge or annulment; or (b) (c) commit for contempt of court; or exercise any jurisdiction conferred by subpart 3 of Part 7; or conduct a public examination under subpart 5 of Part 3.
(3) A Registrar or a District Court Judge may, if in doubt as to the proper order to be made on an application, refer it to a Judge at the next convenient opportunity, and a Judge may hear and decide the application.

(d) (4) A Judge may vary or discharge any decision by a Registrar or District Court Judge, and the decision of the Judge under this subsection can be reviewed, rescinded, or varied by the court under section 414.
There is no appeal directly to the Court of Appeal from the decision of a Registrar or a District Court Judge.

(5) (6) Nothing in this section affects the specific powers of a District Court Judge under this Act, for example, in section 165.

Compare: 1967 No 54 s 6 414 Rehearings and appeals (1) The court may review, rescind, or vary any decision of the court or a Judge under this Act.
180 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 417 (2) An aggrieved person may appeal to the Court of Appeal from a decision of the court or a Judge under this Act.

Compare: 1967 No 54 s 8 415 Proceedings not halted pending appeal A notice of appeal does not halt proceedings under the decision under appeal unless the court or the Court of Appeal makes an order halting the proceedings.
Compare: 1967 No 54 s 9(1) 416 Suspension of adjudication pending appeal (1) If an appeal has been filed against an order of adjudication, the bankrupt or any other interested person may apply to the court or the Court of Appeal for an order suspending the adjudica- tion until the appeal is decided.
The court or Court of Appeal may suspend the adjudication on the conditions that it thinks appropriate, including conditions as to anything done or decided, or that ought to have been done or decided, by any person in the period between the adjudica- tion and the order suspending adjudication.
The court or the Court of Appeal may at any time make an order as it thinks appropriate as to anything done or decided, or that ought to have been done or decided, by any person in the period between the adjudication and the date when the appeal is decided if— (a) the adjudication has been suspended and the appeal fails; or the adjudication has not been suspended and the appeal succeeds.
(b) Compare: 1967 No 54 s 9(2)–(4) 417 Court may extend time (1) The court may extend any time limit imposed by this Act, or by rules or regulations made under this Act, for doing any act or thing.

The court may extend the time limit— (a) (b) Compare: 1967 No 54 s 10 before or after the time limit has expired: on the conditions it thinks appropriate.
(2) (3) (2) 181 Part 7 s 418 Insolvency Act 2006 Reprinted as at 1 April 2010 418 Defects in proceedings (1) A proceeding under this Act must not be invalidated or set aside for a defect (which includes misdescription, misnomer, or omission) in a step that must be taken as part of, or in con- nection with, the proceeding, unless a person is prejudiced by the defect.
The court may order the defect to be corrected, and may order the proceeding to continue, on the conditions that the court thinks appropriate in the interests of everyone who has an in- terest in the proceeding.
Compare: 1967 No 54 s 11 (2) Subpart 3—Offences by bankrupt Indictable offences 419 Offences in relation to debts (1) A bankrupt (B) commits an offence if B did not, when con- tracting a debt, expect to be able to pay the debt when it fell due for payment, as well as pay all B’s other debts (including future and contingent debts).
(3) (2) A bankrupt (B) commits an offence if B has materially con- tributed to, or increased the extent of, B’s insolvency by gam- bling or by rash and hazardous speculations or by unjustifiable spending or by extravagance in living.
For the purposes of subsection (1), B is rebuttably presumed to have committed the offence if B, when contracting the debt, had no reasonable ground for expecting that B would be able to pay the debt when it fell due for payment as well as pay all B’s other debts (including future and contingent debts).
Compare: 1967 No 54 s 126(1)(a), (c) 420 Offences in relation to property (1) A bankrupt (B) commits an offence if B— (a) conceals or removes any part of B’s property— (i) within 2 months immediately before any unsatis- fied judgment or order for payment of money is obtained against B; or at any time after an unsatisfied judgment or order for payment of money is obtained against B; or (ii) 182 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 422 (b) with intent to defraud B’s creditors or any of them, makes, or causes to be made, any gift, delivery, or trans- fer of, or charge over, B’s property.
(2) A bankrupt (B) commits an offence if, after an application for B’s adjudication has been filed, or within 2 years immediately before the application is filed, B— (a) conceals any part of B’s property to the value of $500 or more; or conceals any debt due to B or due from B; or fraudulently removes any part of B’s property to the value of $500 or more.
Compare: 1967 No 54 s 126(1)(b), (g) (b) (c) 421 Offence in relation to written statement to creditor, etc A bankrupt (B) commits an offence if, within 3 years immedi- ately before B’s adjudication,— (a) B makes or produces any written statement to a person who— (i) (ii) is at the time B’s creditor; or becomes B’s creditor as a result of the statement being made or produced to that person; and the statement is not a true and fair statement of B’s af- fairs.
(b) Compare: 1967 No 54 s 126(1)(e) 422 Offence in relation to documents, etc A bankrupt (B) commits an offence if, after an application for B’s adjudication has been filed, or within 2 years immediately before the application is filed, B— (a) conceals, destroys, mutilates, or falsifies, or is a party to the concealment, destruction, mutilation, or falsifica- tion of, any document affecting, or relating to, B’s prop- erty, conduct, or dealings; or (b) makes, or is a party to the making of, any false entry in any document affecting, or relating to, B’s property, conduct, or dealings; or fraudulently parts with, alters, or makes any omission in, or is a party to fraudulently parting with, altering, (c) 183 Part 7 s 423 Insolvency Act 2006 Reprinted as at 1 April 2010 (d) or making any omission in, any document affecting, or relating to, B’s property, conduct, or dealings; or prevents the production of any document affecting, or relating to, B’s property, conduct, or dealings to any person to whom B has an obligation under this Act to produce it.
Compare: 1967 No 54 s 126(1)(f)(i)–(iv) 423 Offence in relation to fictitious losses or expenses A bankrupt (B) commits an offence if, after an application for B’s adjudication has been filed, or within 12 months immedi- ately before the application is filed, B attempts to account for any part of B’s property by fictitious losses or expenses.
Compare: 1967 No 54 s 126(1)(h) 424 Offences in relation to credit, etc (1) A bankrupt (B) commits an offence if, within 3 years before an application for B’s adjudication has been filed or at any time after the application is filed,— (a) B obtains property on credit and has not paid for the property; and B obtains the property on credit— (i) (ii) by a false representation or other fraud; or by a false statement of financial position or other false statement of B’s affairs; or under the false pretence of carrying on business and dealing in the ordinary course of trade.
(iii) (b) (2) A bankrupt (B) commits an offence if, within 3 years before an application for B’s adjudication has been filed or at any time after the application is filed, B pawns, mortgages, pledges, or disposes of, otherwise than in the ordinary course of trade, any property that B has obtained and has not paid for.
Compare: 1967 No 54 s 126(1)(i) 425 Offences in relation to obtaining consent of creditors A bankrupt (B) commits an offence if B makes a false repre- sentation for, or is guilty of any other fraud for, the purpose of 184 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 427 obtaining the consent of any 1 or more of B’s creditors to any agreement with reference to B’s affairs or B’s bankruptcy.
Compare: 1967 No 54 s 126(1)(j) 426 Offence in relation to leaving New Zealand A bankrupt (B) commits an offence if, after an application for B’s adjudication has been filed or within 12 months immedi- ately before the application is filed, B— (a) leaves New Zealand (either temporarily or perman- ently) and takes with him or her any part of any property to the value of $1,000 or more that ought, by law, to be divided among B’s creditors; or attempts to leave New Zealand (either temporarily or permanently), taking with him or her any part of that property; or prepares to leave New Zealand (either temporarily or permanently), taking with him or her any part of that property.
(b) (c) Compare: 1967 No 54 s 126(1)(k) 427 Defence of absence of intent (1) A bankrupt (B) does not commit an offence under sec- tion 420(1)(a) if B proves that at the material time he or she had no intent to defraud any of B’s creditors.

(2) A bankrupt (B) does not commit an offence under any of the following provisions if B proves that at the material time B had no intent to defraud: (a) (b) (c) (d) section 420(2)(a) or (b): section 424(1): section 424(2): section 426.
(3) A bankrupt (B) does not commit an offence under section 421 if B proves that at the material time B had no intention to de- ceive.

(4) A bankrupt (B) does not commit an offence under sec- tion 422(a), (b), or (d) if B proves that at the material time B had no intent to conceal the state of his or her affairs or to defeat the law.
185 Part 7 s 428 Insolvency Act 2006 Reprinted as at 1 April 2010 428 Penalties for indictable offences by bankrupt A bankrupt who commits an offence under any of sections 419 to 426 is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or to a fine not exceeding $10,000 or both.
Offences in relation to record of transactions 429 Failure to keep and preserve proper record of transactions (1) A bankrupt (B) commits an offence if, for any period during the 3 years immediately before B’s adjudication,— (a) B might reasonably be expected, because of B’s occu- pation or transactions for the period, to keep a record of those transactions; and B failed to keep and preserve a proper record of the transactions.
(b) (2) Despite anything that the Summary Proceedings Act 1957 says, an information for an offence under this section may be laid against a bankrupt at any time within 2 years after the date of his or her adjudication.

Compare: 1967 No 54 s 127(1) 430 Failure to keep proper records with intent to conceal A bankrupt (B) commits an offence if, with intent to conceal the true state of his or her affairs, B has failed to keep and preserve a proper record of B’s transactions.
Compare: 1967 No 54 s 127(2) 431 Penalties for offences relating to records (1) A person who commits an offence under section 429 is liable on summary conviction to imprisonment for a term not ex- ceeding 12 months or to a fine not exceeding $5,000 or both.

(2) A person who commits an offence under section 430 is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or to a fine not exceeding $10,000 or both.
186 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 433 432 When bankrupt deemed not to have kept or preserved (1) (2) (3) proper record For the purposes of sections 429 and 430, a bankrupt (B) is deemed not to have kept a proper record of his or her transac- tions if, being engaged in any trade or business, B has not kept the necessary books and accounts.
In subsection (1), necessary books and accounts means the books and accounts that are necessary to explain B’s transac- tions and financial position in B’s trade or business, and in- cludes— (a) a book or books containing entries from day to day in sufficient detail of all cash received and cash paid; and if B’s trade or business has involved dealing in goods,— (i) (ii) a record of all goods sold and purchased; and detailed stock sheets of annual and other stock takings showing the quantity and the valuation made of each item of stock on hand; and if B’s trade or business has involved B’s services, details of those services.
(b) (c) For the purposes of sections 429 and 430, B is deemed not to have preserved a proper record of his or her transactions if B has not preserved— (a) (b) the records listed in subsection (2), if applicable: a record of all goods purchased in the course of B’s business, with the original invoices: a daily record of all goods sold on credit.
(c) Compare: 1967 No 54 s 127(3), (4) Summary offences 433 Summary offences (1) A bankrupt (B) commits an offence if B— (a) (b) fails without reasonable excuse to do any of the things required of B by section 67 or 87 or subpart 2 of Part 3 or subpart 5 of Part 3 or to comply with any of the pro- visions of section 299 or 307; or refuses or neglects to answer fully and truthfully all proper questions put to B at any examination held under this Act; or 187 Part 7 s 434 Insolvency Act 2006 Reprinted as at 1 April 2010 (c) (d) (e) (f) (g) wilfully misleads the Assignee in any statement made to him or her in the course of the administration of B’s affairs, whether orally or in writing or in any answer to any question put to B; or after becoming aware that any person has filed a false proof in the bankruptcy, failed to disclose that fact im- mediately to the Assignee; or has within 2 years before B’s adjudication, at a time when B was unable to pay B’s debts as they became due, given, with intent to defraud B’s creditors, any undue preference to any of B’s creditors; or while a bankrupt and without having first obtained the consent of the Assignee,— (i) leaves, or attempts to leave, New Zealand, tem- porarily or permanently; or (ii) makes preparations for leaving New Zealand, temporarily or permanently; or before B obtains a final order or discharge, or before a suspended order of discharge takes effect under this Act,— (i) alone, or jointly with another person, obtains credit of $1,000 or more; or incurs liability to any person of $1,000 or more for the purpose of obtaining credit for another person.
(ii) (2) Despite anything that section 14 of the Summary Proceedings Act 1957 says, an information for any of the offences in sub- section (1) may be laid against a bankrupt at any time within 2 years after the date of the offence.
Compare: 1967 No 54 s 128(1), (2) 434 Defences to summary offences of obtaining credit (1) A bankrupt (B) does not commit an offence under sec- tion 433(1)(g)(i) if B proves that, before obtaining the credit of $1,000 or more, B informed the person giving the credit that B was an undischarged bankrupt.
(2) A bankrupt (B) does not commit an offence under sec- tion 433(1)(g)(ii) if B proves that, before incurring the liability of $1,000 or more, the person giving the credit was informed 188 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 437 that the person incurring the liability was an undischarged bankrupt.
Compare: 1967 No 54 s 128(1)(g) 435 Penalty for summary offences by bankrupt A person who commits an offence under section 433(1) is li- able on summary conviction to imprisonment for a term not exceeding 12 months or a fine not exceeding $5,000 or both.
Compare: 1967 No 54 s 128(1) Offences in relation to management of companies 436 Offence by bankrupt in relation to management of companies (1) A bankrupt commits an offence if he or she— (a) (b) acts as a director of a company; or fails without reasonable excuse to comply with sec- tion 149.

(2) Despite anything that section 14 of the Summary Proceedings Act 1957 says, an information in respect of an offence under subsection (1) may be laid at any time within 2 years after the date of the offence.
Compare: 1967 No 54 s 128A 437 Penalties for offence in relation to management of companies A person who commits an offence under section 436 is li- able,— (a) on conviction on indictment, to imprisonment for a term not exceeding 2 years: on summary conviction, to imprisonment for a term not exceeding 12 months or to a fine not exceeding $5,000 or both.
(b) 189 Part 7 s 438 Insolvency Act 2006 Reprinted as at 1 April 2010 Assignee’s discretion to prosecute 438 Assignee may prosecute if reasonable grounds certified by (1) (2) Crown Solicitor If the Assignee has reason to suspect that a person (X) has committed an offence under this Act, the Assignee may refer the case to the appropriate Crown Solicitor.

The Assignee may lay an information against X if the Crown Solicitor certifies that there are reasonable grounds for pros- ecuting X.
Compare: 1967 No 54 s 129 439 Assignee has immunity for prosecution if certificate given by Crown Solicitor No action may be taken against the Assignee for malicious prosecution in relation to a prosecution under this Act if the Crown Solicitor certified that there were reasonable grounds for bringing the prosecution.
Compare: 1967 No 54 s 129(2) Subpart 4—Miscellaneous provisions 440 False or misleading statements or refusal to answer questions (1) A person commits an offence if he or she— (a) makes a statement to any Assignee or person concerned in the administration of this Act, knowing that the state- ment is false in a material particular; or (b) wilfully misleads, or attempts to mislead, any Assignee or person concerned in the administration of this Act; or without reasonable excuse, fails or refuses to answer any question put to him or her by the Assignee.
(c) (2) A person who commits an offence under this section is liable on summary conviction to imprisonment for a term not ex- ceeding 12 months or to a fine not exceeding $5,000 or both.
Compare: 1967 No 54 s 164 441 Regulations (1) The Governor-General may, by Order in Council, make regu- lations for all or any of the following purposes: 190 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 441 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) prescribing fees to be paid under this Act or regulations made under this Act: prescribing the procedure for lodging a debtor’s appli- cation for adjudication with the Assignee: prescribing how and when the debts and claims of cred- itors must be made and proved, and when a debt or claim may be allowed or disallowed: providing for the public examination of bankrupts: prescribing the expenses that may be paid to a bankrupt, or any other person, who is required to attend any exam- ination by the Assignee: prescribing the steps an undischarged bankrupt must take to obtain the Assignee’s consent to leaving New Zealand and the circumstances in which, and the condi- tions on which, the Assignee may consent: prescribing the steps an undischarged bankrupt must take to obtain the Assignee’s consent for the purposes of section 149 (which concerns the prohibition of a bankrupt entering business) and the circumstances in which, and the conditions on which, the Assignee may consent: prescribing the accounts that must be kept by the As- signee, the audit of those accounts, and the fees payable for the audit: prescribing the manner of publication of the Assignee’s final statement of receipts and payments: prescribing the manner of advertising under this Act: providing for the appointment, retirement, removal, dis- charge, and control of trustees under subpart 2 of Part 5, and for the accounts that must be kept by them, and for the audit of those accounts: providing for any matters contemplated by subpart 3 of Part 5, necessary for its administration, or necessary for giving it full effect: prescribing the scale of fees of the court and the Court of Appeal for proceedings under this Act: prescribing the form of— (i) a statement of affairs that is filed under
 sec- tion 46, 67, or 362: 191 Part 7 s 442 Insolvency Act 2006 Reprinted as at 1 April 2010 (ii) an application that is made under section 49, 342, or 362: a notice under section 367 or 373: (iii) prescribing the steps that must be taken by the bankrupt under section 141 in relation to the bankrupt’s property and the distribution of the proceeds to the creditors: regulating the payment by the Assignee of money into the Assignee’s bank account under section 220(1): prescribing the time for giving a notice of opposition under section 297: prescribing how instalments under a summary instal- ment order must be paid: providing for the conduct of creditors’ meetings under subparts 1 and 2 of Part 5: prescribing the criteria for the means test under sec- tion 363(1)(e): prescribing reasons for refusal by the Assignee under section 447(2) of access to a public register: information or documents prescribing any further that must be held under a public register under sec- tion 449(1): regulating the search of public registers (see sec- tion 452): prescribing any further search criteria under sec- tion 453(1): providing for any other matters contemplated by this Act, necessary for its administration, or necessary for giving it full effect.
(o) (p) (q) (r) (s) (t) (u) (v) (w) (x) (y) (2) In subsection (1)(n), prescribing the form includes specify- ing the content, means of communication, or any other require- ment of a statement of affairs, application, or notice without necessarily specifying the use of a particular form.
Compare: 1967 No 54 s 14 442 Rules (1) Rules may be made from time to time under the Judicature Act 1908— (a) (b) relating to the procedure of the court under this Act: relating to appeals to the Court of Appeal under this Act: 192 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 442 (c) to give effect to this Act.
(2) Matters that may be dealt with by the rules include the follow- ing: (a) how proceedings are started and transferred from one registry of the court to another: (b) where proceedings may be started: (c) (d) (e) (f) (g) the forms to be used in proceedings: the service of documents filed or issued in proceedings: the amendment of defects and errors in proceedings: how evidence may be given: how the identity of persons who are parties to, or in- volved in, proceedings must be proved: how witnesses are summoned and documents are dis- covered: the right of creditors and other persons to appear in pro- ceedings, and the procedure to be followed in the ab- sence of creditors or other persons: the notices that must be given in connection with pro- ceedings, and who must give them and to whom: the manner of advertising: the consolidation of proceedings: the substitution of parties to proceedings: authorising the continuation of proceedings after the death of the debtor in question: authorising proceedings to be begun against 1 or more partners of a business partnership without including the others, and providing for the disclosure of the other part- ners: the scale of costs of lawyers and others in proceedings: the award of costs and when security for costs must be given: the execution of processes and the enforcement of orders under this Act: the time limit for appealing to the Court of Appeal and how the appeal must be brought: matters necessary for the administration of this Act or necessary for giving it full effect.
(h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) (s) (t) Compare: 1967 No 54 s 13 193 Part 7 s 443 Insolvency Act 2006 Reprinted as at 1 April 2010 443 Repeal and revocation (1) (2) The Insolvency Act 1967 is repealed.

The Insolvency Regulations 1970, the Insolvency (Priorities) Order 1988, and the Summary Instalment Orders (District Court) Rules 1970 are revoked.
444 Transitional provisions In this section,— (1) 1967 Act means the Insolvency Act 1967 as if it had not been repealed by this Act, and any rules or regulations made under that Act commencement means the commencement of Parts 1 to 7 of this Act past event means any of the following that has occurred before commencement: (a) (b) (c) (d) (e) (f) issuing a bankruptcy notice: filing a petition for adjudication: filing an application for a summary instalment order: the making of a proposal: the making of a compromise: filing an application for an order for the administration of an insolvent deceased estate.
(2) (3) The 1967 Act continues to apply, to the exclusion of this Act, to any past event and to any step or proceeding preceding, following, or relating to that past event, even if it is a step or proceeding that is taken after commencement.

For the avoidance of doubt, nothing in subpart 7 of Part 3 per- mits the cancellation of an irregular transaction that was com- pleted before this section came into force, if that transaction could not have been cancelled if this section had not come into force.
445 Consequential amendments to other enactments The enactments specified in Schedule 2 are amended in the manner indicated in that schedule.

194 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 448 Subpart 5—Public registers 446 Subpart applies to public register maintained under section 62, 354 or 368 This subpart applies to a public register maintained under sec- tion 62 or 354 or 368.
447 When public register must be accessible (1) A public register must be available for access and searching by members of the public during business hours on a working day.

(2) However, the Assignee may refuse access to a public register or suspend the operation of a public register, in whole or in part,— (a) if the Assignee considers that it is not practical to pro- vide access to the register; or for any other reason that is prescribed by regulations made under this Act.
(b) 448 Purposes of public registers (1) A public register maintained under section 62 has— (a) (b) the purpose of providing information about bankrupts and discharged bankrupts; and the further purposes set out in subsection (4).

(2) A public register maintained under section 354 has— (a) (b) the purpose of providing information about persons subject to a current summary instalment order; and the further purposes set out in subsection (4).
(3) A public register maintained under section 368 has— (4) (a) the purpose of providing information about persons cur- rently admitted to the no asset procedure and persons discharged from that procedure under section 377; and (b) the further purposes set out in subsection (4).
The further purposes of the public registers are to— (a) facilitate the compliance, audit, and other supporting and administrative functions of the Assignee, Ministry, the courts, or any other person under this Act or any other enactment; and 195 Part 7 s 449 Insolvency Act 2006 Reprinted as at 1 April 2010 (b) (c) facilitate the enforcement functions and the exercise of the powers of the Assignee, Ministry, the courts, or any other person under this Act or any other enactment; and provide statistical information and information for re- search purposes in relation to bankruptcy, summary in- stalment orders, and the no asset procedure.
Section 448(3)(a): amended, on 17 November 2009, by section 12 of the Insol- vency Amendment Act 2009 (2009 No 52).
(c) (d) P’s full name: 449 General information that must be held in public registers The public registers must contain the following information in (1) respect of a person (P) who is or has been bankrupt, or who is subject to a current summary instalment order, or who is currently admitted to the no asset procedure, or who has been discharged from that procedure under section 377: (a) (b) whether P is currently bankrupt, or has been discharged from bankruptcy, or is subject to a current summary instalment order, or is currently admitted to the no asset procedure, or has been discharged from the no asset procedure under section 377, as the case may be: the bankruptcy, summary instalment order, or no asset procedure number, as the case may be: P’s address as contained in P’s statement of affairs, or application for adjudication, or application for a sum- mary instalment order, or application for admission to the no asset procedure or, if P has notified the Assignee of a change of address, that address, or in the case of ad- judication on a creditor’s application, P’s address con- tained in that application: P’s occupation and current employment status, known: in the case of an adjudication by the court, which court, and the time and date of the adjudication: in the case of an automatic adjudication, a statement that P was automatically adjudicated bankrupt under sec- tion 47, and the time and date of the adjudication: if P is admitted to the no asset procedure, the date of admission: (g) (h) (e) (f) if 196 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 449 (j) (l) (i) (k) (m) (ha) the court has suspended P’s discharge from if P is discharged from the no asset procedure under section 377, the date when P was so discharged: if P is a discharged bankrupt, the date, type, and condi- tions (if any) of discharge: if the bankruptcy was annulled under section 309(1)(b) or (c) or section 310(2)(b) or (c), under which of those provisions it was annulled: if the court has refused to discharge P from bankruptcy,
 that information: if bankruptcy, that information: the place of the office of the Assignee dealing with P’s bankruptcy or admission to the no asset procedure and that office’s contact number for enquiries: in the case of a person subject to a current summary instalment order, the full name and business postal ad- dress of the supervisor: (o) any other prescribed information or documents.
Subject to sections 447(2) and 451(1), the information listed in subsection (1) must be available to any member of the public.

(3) A public register must not contain any information in rela- tion to a person whose bankruptcy was annulled under sec- tion 309(1)(a) or 310(2)(a), and the bankruptcy that was so annulled does not count for the purposes of section 449A.
(2) (n) (4) All information relating to a person who has been adjudicated bankrupt and discharged from bankruptcy must be removed from the public register maintained under section 62— (a) (b) 4 years after the date of discharge; but in the case of a conditional discharge, 4 years after the discharge becomes unconditional.
(4A) All information relating to a person who has been admitted to the no asset procedure must be removed from the public register maintained under section 368— (a) (b) 4 years after the date of discharge under section 377; or as soon as practicable after a termination under section 372(a), (c), or (d).
(5) All information relating to a person who has been adjudicated bankrupt but whose bankruptcy has been annulled under sec- tion 309(1)(b) or (c) or section 310(2)(b) or (c) must be re- 197 Part 7 s 449A Insolvency Act 2006 Reprinted as at 1 April 2010 moved 7 years after the date of adjudication from the public register maintained under section 62.

Section 449(1): amended, on 17 November 2009, by section 13(1) of the Insol- vency Amendment Act 2009 (2009 No 52).
Section 449(1)(b): amended, on 17 November 2009, by section 13(2) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 449(1)(ha): inserted, on 17 November 2009, by section 13(3) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 449(3): amended, on 17 November 2009, by section 13(4) of the Insol- vency Amendment Act 2009 (2009 No 52).

Section 449(4A): inserted, on 17 November 2009, by section 13(5) of the In- solvency Amendment Act 2009 (2009 No 52).
449A Information kept indefinitely on public register after (1) (2) (3) (4) multiple insolvency events This section applies in the case of a person who— (a) (b) is or has been bankrupt on 2 or more occasions; or is or has been both bankrupt and discharged from the no asset procedure under section 377.

Information about the person must not be removed from the public register under this Act and, in particular, section 449(4), (4A), and (5) do not apply to the person.
The Assignee must ensure that the public register contains all of the information required by this Act about the person and each insolvency event.

Bankruptcies under the Insolvency Act 1967 count for the pur- poses of subsections (1) and (3), but bankruptcies under the Bankruptcy Act 1908 do not count for either purpose.

Section 449A: inserted, on 17 November 2009, by section 14 of the Insolvency Amendment Act 2009 (2009 No 52).
450 Restricted information that may be held in public register (1) maintained under section 62 The public register maintained under section 62 may contain any or all of the documents set out in section 100 in respect of a person (B) who is or has been bankrupt.

(2) A member of the public must not have access to the documents contained in the public register under subsection (1) in respect of B unless that person is entitled to inspect those documents under section 100.
198 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 453 (1) 451 When Assignee may omit, remove, restrict access to, or amend, information contained in public registers The Assignee may omit, remove, or restrict access to infor- mation contained in a public register in respect of a person (P) if the Assignee considers, in his or her discretion, that the disclosure of the information via the public register would be prejudicial to P’s safety or the safety of P’s family.
The Assignee may amend the information contained in a pub- lic register in order to update the information or correct any error in, or omission from, the information.

The Assignee may refuse to provide access to any information in a public register if, in the Assignee’s opinion, it is imprac- tical to provide the volume of information requested.

(3) (2) 452 Search of public registers A person may only search the public registers in accordance with this Act or regulations made under this Act.
453 Search criteria (1) (b) (c) (d) (e) The public registers may be searched only by reference to the following criteria: (a) the bankruptcy number, summary instalment order, or no asset procedure number: the name, or any part of the name of a person: the name of a court: insolvency status: the date of adjudication, summary instalment order, ad- mission to the no asset procedure, or discharge, by ref- erence to a range of dates: any combination of the criteria in paragraphs (a) to (e): any other prescribed criteria.
(f) (g) In subsection (1)(d), insolvency status means that a person (P)— (a) (b) (c) (d) (da) is currently bankrupt; or is subject to a current summary instalment order; or is currently admitted to the no asset procedure; or is a discharged bankrupt; or is discharged from the no asset procedure under section 377; or 199 (2) Part 7 s 454 Insolvency Act 2006 Reprinted as at 1 April 2010 (f) (e) is a discharged bankrupt subject to conditions of dis- charge; or was adjudicated bankrupt but the adjudication was an- nulled under section 309(1)(b) or section 310(2)(b); or (g) was adjudicated bankrupt but the adjudication was an- nulled under section 309(1)(c) or section 310(2)(c); or is subject to section 449A (which relates to permanent retention of information on the register after multiple insolvency events).
(h) Section 453(2)(da): inserted, on 17 November 2009, by section 15(1) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 453(2)(g): amended, on 17 November 2009, by section 15(2) of the Insolvency Amendment Act 2009 (2009 No 52).

Section 453(2)(h): added, on 17 November 2009, by section 15(2) of the Insol- vency Amendment Act 2009 (2009 No 52).
454 Search purposes The public registers may be searched— (a) by any individual, or by any person with the consent of that individual, for the purpose of searching for infor- mation about that individual: by any person for the purpose of ascertaining whether another person is bankrupt, is a discharged bankrupt, is subject to a current summary instalment order, is cur- rently admitted to the no asset procedure, or is dis- charged from that procedure under section 377: by any person for any purpose related to the bankruptcy of a person, the making of a current summary instalment order in respect of a person, or the admission of a person to the no asset procedure: by any person for any of the purposes set out in sec- tion 448(4)(a) or (b): by any person for the purpose of ascertaining whether section 449A applies to another person.
(b) (c) (d) (e) Section 454(b): amended, on 17 November 2009, by section 16(1) of the Insol- vency Amendment Act 2009 (2009 No 52).

Section 454(e): added, on 17 November 2009, by section 16(2) of the Insol- vency Amendment Act 2009 (2009 No 52).
200 Reprinted as at 1 April 2010 Insolvency Act 2006 Part 7 s 457 455 Information contained in public registers may be used for statistical or research purposes Nothing in this subpart prevents the use of information con- tained in the public registers for statistical or research purposes if the information— (a) (b) does not identify any person; and is not published in any form that could reasonably be expected to identify any person.
456 When search breaches information privacy principle A person who searches a public register for a purpose that is not a purpose set out in section 454 must be treated, for the purposes of Part 8 of the Privacy Act 1993, as if that per- son has breached an information privacy principle under sec- tion 66(1)(a)(i) of that Act.
457 Crown and Assignee not liable for act or omission The Crown and the Assignee cannot be sued for any act or omission in relation to the maintenance of a public register under this subpart done or omitted to be done in good faith and with reasonable care.
201 Schedule 1 Insolvency Act 2006 Schedule 1 Assignee’s general powers Reprinted as at 1 April 2010 s 217(2) The Assignee has the power to— (a) (b) hold property: begin, continue, discontinue, and defend legal proceedings re- lating to the property of the bankrupt: with the leave of the court, continue in the Assignee’s name legal proceedings begun by the bankrupt before adjudication: refer a dispute to arbitration: compromise debts, claims, and liabilities, present or future, ac- tual or contingent, or ascertained or not, subsisting or believed to subsist between the bankrupt and any person, on whatever terms are agreed: make a compromise or an arrangement with creditors, or per- sons claiming to be creditors, in respect of debts provable in the bankruptcy: accept as consideration for the sale of any of the bankrupt’s property money to be paid in the future, on terms (including terms as to security) that the Assignee thinks appropriate: (c) (d) (e) (f) (g) (j) (i) (h) make a compromise or an arrangement in respect of a claim that arises out of, or is incidental to, the bankrupt’s property, whether it is a claim by the Assignee, or a claim by a person against the Assignee: carry on the bankrupt’s business, if it is necessary or advanta- geous in order to dispose of it, and for that purpose may em- ploy and pay any person, including the bankrupt: use money in the bankrupt’s estate for the repair, maintenance, upkeep, or renovation of the bankrupt’s property, whether or not the work is necessary to salvage the property: borrow money: mortgage any of the bankrupt’s property: employ any person to do anything that must be done in the course of the administration of the bankruptcy, including the receipt and payment of money: prove and draw a dividend in respect of any debt due to the bankrupt: if any of the bankrupt’s property cannot be readily or advan- tageously sold because of its peculiar nature or other special (k) (l) (m) (o) (n) 202 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 1 (p) (q) (r) (s) (t)
 (u) (v) (w) circumstances, divide it in its existing form among the credit- ors according to its estimated value: give receipts and sign discharges and releases for any money that the Assignee receives, so that the person who pays the money is effectively discharged from any responsibility for how the money is used: execute a power of attorney, deed, or any other document for the purpose of carrying into effect the provisions of this Act: exercise, in relation to the bankrupt’s property, any power con- ferred on a trustee under the Trustee Act 1956 or by the court under that Act; and for the purposes of those powers the As- signee is a trustee of the bankrupt’s property: exercise any authority or power or do any act in relation to the bankrupt’s property that the bankrupt could have exercised or done if he or she was not bankrupt: in respect of any particular estate or estates,— appoint an agent to act for the Assignee: (i) delegate to that agent any or all of the powers conferred (ii) by this schedule: revoke the agent’s appointment: set the agent’s remuneration, which must be paid out of the estate: (iii) (iv) exercise, on the terms the Assignee thinks appropriate, the fol- lowing powers in relation to the sale of the bankrupt’s prop- erty: (i) sell the whole or a part of the bankrupt’s property by public auction or public tender: buy in at an auction of the bankrupt’s property: rescind or vary a contract for the sale of the bankrupt’s property: (ii) (iii) surrender any shares of the bankrupt in a building society in accordance with the rules of the society: sell the following property of the bankrupt by private contract: perishable property or property that is likely to fall (i) rapidly in value: property that is unsold after being offered for sale by public auction or public tender: property that the Assignee considers unnecessary or in- advisable to sell by public auction or public tender be- (iii) (ii) 203 Schedule 1 Insolvency Act 2006 Reprinted as at 1 April 2010
 (iv) (v) cause of its nature, situation, value, or other special cir- cumstance: property authorised by a resolution of creditors to be sold by private contract, but in that case the Assignee must sell the property in accordance with the authority given by the creditors: company securities, New Zealand Government secur- ities, and local authority securities, if sold on a secur- ities market operated by a registered exchange regis- tered under the Securities Markets Act 1988.
Compare: 1967 No 54 s 71 204 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 2 Schedule 2 Consequential amendments to other enactments Part 1 Amendments to Acts s 445 Administration Act 1969 (1969 No 52) Section 31: omit “Part 17 of the Insolvency Act 1967” and substitute “Part 6 of the Insolvency Act 2006”.

Section 32(1): omit “Part 17 of the Insolvency Act 1967” and sub- stitute “Part 6 of the Insolvency Act 2006”.
Section 82(1): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Carriage of Goods Act 1979 (1979 No 43) Section 11(4): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Companies Act 1993 (1993 No 105) Section 103(2): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Definition of Official Assignee in section 240(1): omit “Insolvency Act 1967” and substitute “Insolvency Act 2006”.
Section 280(1)(l): omit “section 111(1)(c) of the Insolvency Act 1967” and substitute “section 299(1)(c) of the Insolvency Act 2006”.

Section 300(5): omit “section 19(d) of the Insolvency Act 1967” and substitute “section 17(1)(a) of the Insolvency Act 2006”.

Section 301(3): omit “section 19(d) of the Insolvency Act 1967” and substitute “section 17(1)(a) of the Insolvency Act 2006”.

Section 302(2): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
Construction Contracts Act 2002 (2002 No 46) Section 71(2)(a): omit “section 32 of the Insolvency Act 1967” and substitute “section 76 of the Insolvency Act 2006”.
205 Schedule 2 Insolvency Act 2006 Reprinted as at 1 April 2010 Part 1—continued Contractual Mistakes Act 1977 (1977 No 54) Definition of disposition in section 8(3): omit and substitute: “disposition means— “(a) “(b) “(c) “(d) “(e) “(f) any conveyance, transfer, assignment, settlement, de- livery, payment, or other alienation of property, whether at law or in equity: the creation of a trust: the grant or creation of any lease, mortgage, charge, servitude, licence, power, or other right, estate, or inter- est in or over any property, whether at law or in equity: the release, discharge, surrender, forfeiture, or aban- donment, at law or in equity, of any debt, contract, or thing in action, or of any right, power, estate, or inter- est in or over any property; and for this purpose a debt, or any other right, estate, or interest, shall be deemed to have been released or surrendered when it has be- come irrecoverable or unenforceable by action through the lapse of time: the exercise of a general power of appointment in favour of any person other than the donee of the power: any transaction entered into by any person with intent thereby to diminish, directly or indirectly, the value of that person’s own estate and to increase the value of the estate of any other person.” Copyright Act 1994 (1994 No 143) Section 208(2): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
Corporations (Investigation and Management) Act 1989 (1989 No 11) Section 42(7): omit “sections 93A to 93I of the Insolvency Act 1967” and substitute “sections 255 to 263 of the Insolvency Act 2006”.

Section 44(4): omit “section 93C of the Insolvency Act 1967” and substitute “section 257 of the Insolvency Act 2006”.
206 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 2 Part 1—continued Corporations (Investigation and Management) Act 1989 (1989 No 11)—continued Section 51(2)(b)(i) and (ii): repeal and substitute: “(i) “(B) proceeds of an account receivable that is subject to a security interest that— “(A) is not a purchase money security interest that has been perfected at the time speci- fied in section 74 of the Personal Property Securities Act 1999; and is not a security interest that has been per- fected under the Personal Property Secur- ities Act 1999 at the time the corporation was declared to be subject to statutory management and that arises from the trans- fer of the account receivable for which new value is provided by the transferee for the acquisition of that account receiv- able (whether or not the transfer of the ac- count receivable secures payment or per- formance of an obligation); or “(ii) proceeds of inventory that are subject to a secur- ity interest that is not a purchase money security interest that has been perfected at the time speci- fied in section 74 of the Personal Property Secur- ities Act 1999.” Section 51(6): omit “section” and substitute “subsection.” Section 51(6)(b): insert “that has been perfected at the time specified in section 74 of the Personal Property Securities Act 1999” after “in- terest”.
Section 51(6)(c): omit “does not arise” and substitute “is not a se- curity interest that has been perfected under the Personal Property Securities Act 1999 at the time the corporation was declared to be subject to statutory management and that arises”.

Corrections Act 2004 (2004 No 50) Section 19(7)(c): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
207 Schedule 2 Insolvency Act 2006 Reprinted as at 1 April 2010 Part 1—continued Customs and Excise Act 1996 (1996 No 27) Section 98(2): omit “section 90 of the Insolvency Act 1967” and substitute “sections 243, 244, and 246 to 250 of the Insolvency Act 2006”.

Section 101(2): omit “section 104 of the Insolvency Act 1967” and substitute “section 274(5) of the Insolvency Act 2006”.
District Courts Act 1947 (1947 No 16) Section 90(3): omit “section 50 of the Insolvency Act 1967” and substitute “sections 108 to 112 of the Insolvency Act 2006”.

Employment Relations Act 2000 (2000 No 24) Section 170(2): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Energy Companies Act 1992 (1992 No 52) Section 6(1)(c): omit “section 111 of the Insolvency Act 1967” and substitute “section 299 of the Insolvency Act 2006”.

Fisheries Act 1996 (1996 No 88) Section 270: repeal.
Forest and Rural Fires Act 1977 (1977 No 52) Section 64(4)(a): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Goods and Services Tax Act 1985 (1985 No 141) Section 42(2)(c)(ii)(B): insert “that has been perfected at the time specified in section 74 of the Personal Property Securities Act 1999” after “interest”.
Section 42(2)(c)(ii)(C): omit “does not arise” and substitute “is not a security interest that has been perfected under the Personal Property Securities Act 1999 at the time of the receiver’s appointment and that arises”.

208 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 2 Part 1—continued Health and Disability Services (Safety) Act 2001 (2001 No 93) Section 48(1)(b)(iii): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.
Section 49(1)(c)(iii): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.

Health Practitioners Competence Assurance Act 2003 (2003 No 48) Section 55(3)(c): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 87(4)(b): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 122(2)(b): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.

Clause 3(2)(b) of Schedule 1: omit “Insolvency Act 1967” and sub- stitute “Insolvency Act 2006”.
Human Rights Act 1993 (1993 No 82) Section 20G(c): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 101(3)(a): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.

Section 103(2): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
Illegal Contracts Act 1970 (1970 No 129) Section 6(2): omit and substitute: “(2) In this section, disposition means— “(a) any conveyance, transfer, assignment, settlement, de- livery, payment, or other alienation of property, whether at law or in equity: the creation of a trust: the grant or creation of any lease, mortgage, charge, servitude, licence, power, or other right, estate, or inter- est in or over any property, whether at law or in equity: “(b) “(c) 209 Schedule 2 Insolvency Act 2006 Reprinted as at 1 April 2010 Illegal Contracts Act 1970 (1970 No 129)—continued Part 1—continued “(d) “(e) “(f) the release, discharge, surrender, forfeiture, or aban- donment, at law or in equity, of any debt, contract, or thing in action, or of any right, power, estate, or inter- est in or over any property; and for this purpose a debt, or any other right, estate, or interest, shall be deemed to have been released or surrendered when it has be- come irrecoverable or unenforceable by action through the lapse of time: the exercise of a general power of appointment in favour of any person other than the donee of the power: any transaction entered into by any person with intent thereby to diminish, directly or indirectly, the value of that person’s own estate and to increase the value of the estate of any other person.” Income Tax Act 2004 (2004 No 35) Section CG 2(4)(b): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.
Section EW 29(10): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.

Section EW 47(1)(b)(i): omit “114 of the Insolvency Act 1967” and substitute “304 of the Insolvency Act 2006”.

Section EZ 35(6)(a)(i): omit “114 of the Insolvency Act 1967” and substitute “304 of the Insolvency Act 2006”.

Section EZ 35(8)(d)(ii): omit “Insolvency Act 1967” and substitute “Insolvency Act 2006”.

Industry Training Act 1992 (1992 No 55) Section 16: omit “, 23,” and “, and section 23,”.
Insurance Intermediaries Act 1994 (1994 No 41) Section 17(1)(c): omit “Part 17 of the Insolvency Act 1967” and substitute “Part 6 of the Insolvency Act 2006”.

Section 17(2): insert “or the Insolvency Act 2006” after “Insolvency Act 1967”.

210 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 2 Part 1—continued Joint Family Homes Act 1964 (1964 No 45) Section 9(2)(d): omit “Insolvency Act 1967” wherever it appears and in each case substitute “Insolvency Act 2006”.
Section 12A(6): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Judicature Act 1908 (1908 No 89) Section 26I(2)(e): repeal and substitute: “(e) Sections 123, 154, 165 to 168, 173, 179, 232 to 234, 236 to 238, Part 15A, and Part 16 of the Companies Act 1993:”.

Section 26I(2): insert after paragraph (h): “(ha) the Insolvency Act 2006 (except sections 150, 166(3), 180, and 236(2)): “(hb) any regulations or rules made under the Insolvency Act 2006:”.
Section 448(1)(g): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.

Section 651(1)(b): omit “section 154(3) of the Insolvency Act 1967” and substitute “section 380(4)(c)(iii) of the Insolvency Act 2006”.

Section 819(1): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 824(b): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Rule 458D(1)(a)(vi) of Schedule 2: omit “294(2)” and substitute “296(5)”.
Rule 458EA(1)(b) of Schedule 2: omit “294(2)” and substitute “296(5)”.

Rule 458EA(2)(b) of Schedule 2: omit “294(2)” and substitute “296(5)”.

Rule 458H(3)(b) of Schedule 2: omit “294(2)” and substitute “296(5)”.

Rule 458I(1)(a)(ii)(B) of Schedule 2: omit “294(2)” and substitute “296(5)”.

211 Schedule 2 Insolvency Act 2006 Reprinted as at 1 April 2010 Part 1—continued Lawyers and Conveyancers Act 2006 (2006 No 1) Section 284(2): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
Clause 2(2) of Schedule 3: omit “Insolvency Act 1967” and substi- tute “Insolvency Act 2006”.

Clause 3(3) of Schedule 4: omit “Insolvency Act 1967” and substi- tute “Insolvency Act 2006”.

Layby Sales Act 1971 (1971 No 80) Section 11(1A)(b): insert “that has been perfected at the time speci- fied in section 74 of the Personal Property Securities Act 1999” after “interest”.
Section 11(1A)(c): omit “does not arise” and substitute “is not a se- curity interest that has been perfected under the Personal Property Securities Act 1999 at the commencement of the liquidation, or at the time of the receiver’s appointment, or at the date of adjudication, as the case may be, and that arises”.
Section 11(2): repeal and substitute: “(2) Debts to which priority is given by subsection (1) must be paid in accordance with section 312 and Schedule 7 of the Companies Act 1993, or section 30 of the Receiverships Act 1993, or section 274(3) of the Insolvency Act 2006, as the case may be.” Medicines Act 1981 (1981 No 118) Section 55D(4): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
Paragraph (b) of the definition of pharmacist in section 55E(3): omit “Insolvency Act 1967” and substitute “Insolvency Act 2006”.

Motor Vehicle Sales Act 2003 (2003 No 12) Section 85(1): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 88(4)(a): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
212 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 2 Part 1—continued Personal Property Securities Act 1999 (1999 No 126) Section 17A(a): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Plumbers, Gasfitters, and Drainlayers Act 1976 (1976 No 69) Section 6B(2)(b): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
Privacy Act 1993 (1993 No 28) Item relating to the Insolvency Act 1967 in Part 1 of Schedule 2: omit and substitute: Insolvency Act 2006 Sections 62, 368 Proceeds of Crime Act 1991 (1991 No 120) Section 27(4): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 60(1): omit “section 23 of the Insolvency Act 1967” and substitute “section 13 of the Insolvency Act 2006”.

Section 60(2): omit “section 42 of the Insolvency Act 1967” and substitute “section 101 of the Insolvency Act 2006”.
Section 60(3): omit “section 87(2) of the Insolvency Act 1967” and substitute “section 232(2) of the Insolvency Act 2006”.

Property Law Act 1952 (1952 No 51) Items repealed.
Property (Relationships) Act 1976 (1976 No 166) Section 58(1): repeal and substitute: “(1) If, had this Act not been passed, any property would have become vested in an appointee (within the meaning of sec- tion 378(1) of the Insolvency Act 2006) on an order being made under section 379 of that Act to administer the estate of a deceased spouse or partner under Part 6 of that Act, then 213 Schedule 2 Insolvency Act 2006 Reprinted as at 1 April 2010 Property (Relationships) Act 1976 (1976 No 166)—continued Part 1—continued that property (and no other property) becomes vested in an ap- pointee as if this Act had not been passed.” Section 59(1)(a): repeal and substitute: “(a) if, after the death of a spouse or partner, the family home (including a homestead) or, if section 11A applies, the proceeds of the sale of the family home vest in an ap- pointee (within the meaning of section 378(1) of the In- solvency Act 2006) on an order being made under sec- tion 379 of that Act to administer the estate of a de- ceased spouse or partner under Part 6 of that Act:”.
Section 88(3)(c): repeal and substitute: “(c) an appointee (within the meaning of section 378(1) of the Insolvency Act 2006) in whom the estate of a de- ceased spouse or partner vests on an order being made under section 379 of that Act.” Protection of Personal and Property Rights Act 1988 (1988 No 4) Clause 1(a)(ii) of Schedule 1: omit “Part 16 of the Insolvency Act 1967” and substitute “subpart 3 of Part 5 of the Insolvency Act 2006”.
Radiocommunications Act 1989 (1989 No 148) Section 183(3): omit “Subject to subsection (4) of this section, the” and substitute “The”.

Section 183(4) to (6): repeal.

Receiverships Act 1993 (1993 No 122) Definition of Official Assignee in section 2(1): omit “Insolvency Act 1967” and substitute “Insolvency Act 2006”.

Section 5(1)(l): omit “section 111(1)(c) of the Insolvency Act 1967” and substitute “section 299(1)(b) of the Insolvency Act 2006”.
Section 31(1)(b): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

214 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 2 Part 1—continued Reserve Bank of New Zealand Act 1989 (1989 No 157) Section 122(7): omit “sections 93A to 93I of the Insolvency Act 1967” and substitute “sections 255 to 263 of the Insolvency Act 2006”.

Section 127(4): omit “section 93C of the Insolvency Act 1967” and substitute “section 257 of the Insolvency Act 2006”.
Section 134(6)(b): insert “that has been perfected at the time speci- fied in section 74 of the Personal Property Securities Act 1999” after “interest”.

Section 134(6)(c): omit “does not arise” and substitute “is not a se- curity interest that has been perfected under the Personal Property Securities Act 1999 at the time the registered bank was declared to be subject to statutory management and that arises”.

Section 136(1)(b): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.
Paragraph (b) of the definition of insolvency in section 156L: omit “Insolvency Act 1967” and substitute “Insolvency Act 2006” .

Heading to section 156S: omit “Insolvency Act 1967” and substitute “Insolvency Act 2006”.

Section 156S(b): repeal and substitute: “(b) sections 255 to 262 of the Insolvency Act 2006.” Section 156T(1)(a): omit “section 56 of the Insolvency Act 1967” and substitute “section 194 of the Insolvency Act 2006”.
Section 156T(2): omit “section 56 of the Insolvency Act 1967” and substitute “section 194 of the Insolvency Act 2006”.

Retirement Villages Act 2003 (2003 No 112) Section 22(1)(b): omit “section 75 of the Insolvency Act 1967” and substitute “section 117 of the Insolvency Act 2006”.

Ship Registration Act 1992 (1992 No 89) Section 51(6)(c): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
215 Schedule 2 Insolvency Act 2006 Reprinted as at 1 April 2010 Part 1—continued Social Workers Registration Act 2003 (2003 No 17) Section 118(1)(a): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.

Clause 3(2)(a) of Schedule 2: omit “Insolvency Act 1967” and sub- stitute “Insolvency Act 2006”.
Summary Proceedings Act 1957 (1957 No 87) Part 2 of Schedule 1: omit the item relating to the Insolvency Act 1967 and substitute: Insolvency Act 2006 419 to 428, 430 Offences by bankrupt Te Ture Whenua Maori Act 1993 (1993 No 4) Section 343(4): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 343(5): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.
Trans-Tasman Mutual Recognition Act 1997 (1997 No 60) Section 48(4)(a): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Section 50(2): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Treaty of Waitangi Act 1975 (1975 No 114) Clause 2(2) of Schedule 2: omit “Insolvency Act 1967” and substi- tute “Insolvency Act 2006”.
Trustee Companies Act 1967 (1967 No 35) Section 7(2)(t): omit “Part 15 of the Insolvency Act 1967” and sub- stitute “subpart 2 of Part 5 of the Insolvency Act 2006”.

216 Reprinted as at 1 April 2010 Insolvency Act 2006 Schedule 2 Part 1—continued Unit Trusts Act 1960 (1960 No 99) Section 27(3): omit “paragraph (d) of subsection (1) of section 19 of the Insolvency Act 1967” and substitute “section 17(1)(a) of the Insolvency Act 2006”.
Volunteers Employment Protection Act 1973 (1973 No 25) Section 15: repeal.

Weathertight Homes Resolution Services Act 2006 (2006 No 84) Section 63(a): omit “section 32 of the Insolvency Act 1967” and substitute “section 76 of the Insolvency Act 2006”.

Clause 5(2) of Schedule 3: omit “Insolvency Act 1967” and substi- tute “Insolvency Act 2006”.

Schedule 2 Part 1 Property Law Act 1952: section 364(1) of the Property Law Act 2007 (2007 No 91).
items repealed, on 1 January 2008, by Schedule 2 Part 1 Weathertight Homes Resolution Services Act 2006 heading: amended, on 1 April 2007, by section 127(3)(a) of the Weathertight Homes Resolution Services Act 2006 (2006 No 84).

Schedule 2 Part 1 Weathertight Homes Resolution Services Act 2006: amended, on 1 April 2007, by section 127(3)(b) of the Weathertight Homes Resolution Services Act 2006 (2006 No 84).
Schedule 2 Part 1 Weathertight Homes Resolution Services Act 2006: amended, on 1 April 2007, by section 127(3)(c) of the Weathertight Homes Resolution Services Act 2006 (2006 No 84).

Schedule 2 Part 1 Weathertight Homes Resolution Services Act 2006: amended, on 1 April 2007, by section 127(3)(d) of the Weathertight Homes Resolution Services Act 2006 (2006 No 84).
Schedule 2 Part 1 Weathertight Homes Resolution Services Act 2006: amended, on 1 April 2007, by section 127(3)(e) of the Weathertight Homes Resolution Services Act 2006 (2006 No 84).
217 Schedule 2 Insolvency Act 2006 Reprinted as at 1 April 2010 Part 2 Amendments to Regulations Domestic Violence (Public Registers) Regulations 1998 (SR 1998/342) Schedule 1: omit the item relating to the Insolvency Act 1967 and substitute: Insolvency Act 2006 Section 62 Education (Early Childhood Centres) Regulations 1998 (SR 1998/85) Regulation 3(4)(c): omit “Insolvency Act 1967” and substitute “In- solvency Act 2006”.
Education (Hostels) Regulations 2005 (SR 2005/332) Regulation 13(d): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Regulation 38(d): omit “Insolvency Act 1967” and substitute “Insol- vency Act 2006”.

Futures Industry (Client Funds) Regulations 1990 (SR 1990/227) Regulation 21(1)(c): omit “Part 17 of the Insolvency Act 1967” and substitute “Part 6 of the Insolvency Act 2006”.
Weights and Measures Regulations 1999 (SR 1999/373) Regulation 17(1)(b)(ii): omit “section 111 of the Insolvency Act 1967” and substitute “section 299 of the Insolvency Act 2006”.

218 Reprinted as at 1 April 2010 Insolvency Act 2006 Insolvency Amendment Act 2009 Public Act 2009 No 52 Date of assent 16 November 2009 Commencement see section 2 1 2 (1) (2) 17 Title This Act is the Insolvency Amendment Act 2009.

Commencement Section 10 is deemed to have come into force on 10 March 2009.
The rest of this Act comes into force on the day after the date on which it receives the Royal assent.

Part 2 Transitional provisions and amendment to Privacy Act 1993 Insolvent gifts Amendments relating to insolvent gifts apply only to bankruptcies commenced after Act comes into force The principal Act applies to any bankruptcy that is com- menced before the day after the date on which this Act receives the Royal assent as if sections 4 to 6 of this Act had not been enacted.
Which debts are cancelled on discharge from no asset procedure 18 Amendments relating to cancellation of fraudulent debts under no asset procedure (1) Any debt that is cancelled under section 377(2) of the principal Act in the period before the enactment of section 377A of the principal Act by section 10 of this Act, but that is later revived by the enactment of section 377A(2), must be treated as if the debt had not been cancelled.
In particular, the debtor is liable to repay any part of the debt, including any penalties and interest that may have accrued dur- ing the period when the debt was cancelled.

(2) 219 Insolvency Act 2006 Reprinted as at 1 April 2010 Subsection (2) does not limit subsection (1).

(3) (4) Any proceedings for enforcement of the debt may be com- menced or continued after the enactment of section 377A as if the debt had never been cancelled.
19 20 (1) Public registers Amendments relating to 4-year period for public registers apply to all debtors admitted to no asset procedure after Act comes into force The principal Act applies to any debtor who is admitted to the no asset procedure before the day after the date on which this Act receives the Royal assent as if sections 12, 13, 15, and 16 of this Act had not been enacted.
Amendments relating to retention of records if multiple insolvency events Section 449A of the principal Act (as enacted by section 14 of this Act) applies to any person regardless of whether any of the insolvency events referred to in section 449A(1) occurred before or after the enactment of that section.
(2) As soon as practicable after this section comes into force, the Assignee must ensure that the public register contains all of the information required by the principal Act (as amended by this Act) about any person to whom section 449A applies.

To avoid doubt, the requirement in subsection (2) includes a requirement to ensure that the public register contains infor- mation about bankruptcies under the Insolvency Act 1967 in respect of any person to whom section 449A applies.
(3) 220 Reprinted as at 1 April 2010 Insolvency Act 2006 Notes Contents 1 2 3 4 General Status of reprints How reprints are prepared Changes made under section 17C of the Acts and Regulations Publication Act 1989 List of amendments incorporated in this reprint (most recent first) 5 Notes 1 2 3 General This is a reprint of the Insolvency Act 2006.

The reprint incorporates all the amendments to the Act as at 1 April 2010, as specified in the list of amendments at the end of these notes.
Relevant provisions of any amending enactments that have yet to come into force or that contain relevant transitional or savings provisions are also included, after the principal enactment, in chronological order.

Status of reprints Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment.
This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

of How reprints are prepared A number editorial in the preparation of enacting words provisions For a detailed list of are that are repealed or conventions reprints.
not included followed are the For example, and in Acts, revoked are omitted.

see the editorial conventions, 221 Notes Insolvency Act 2006 Reprinted as at 1 April 2010 http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.
4 Changes made under section 17C of the Acts and Regulations Publication Act 1989 Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice.

Changes that would alter the effect of the legislation are not permitted.
A new format of legislation was introduced on 1 January 2000.

Changes to legislative drafting style have also been made since 1997, and are ongoing.

To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.
In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint: • omission of unnecessary referential words (such as “of this section” and “of this Act”) typeface and type size (Times Roman, generally in 11.5 point) layout of provisions, including: • • indentation position of section headings (eg, the number and heading now appear above the section) format of definitions (eg, the defined term now appears in bold type, without quotation marks) format of dates (eg, a date formerly expressed as “the 1st day of January 1999” is now expressed as “1 January 1999”) position of the date of assent (it now appears on the front page of each Act) • • • • • 222 Reprinted as at 1 April 2010 Insolvency Act 2006 Notes • • • • • • punctuation (eg, colons are not used after definitions) Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly case and appearance of letters and words, including: • followed by small capital format of headings (eg, headings where each word formerly appeared with an initial capital letters are letter amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter) small capital letters in section and subsection references are now capital letters • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly running heads (the information that appears at the top of each page) format of amendments, and schedules of are rearranged into alphabetical order, chronological).
two-column schedules of consequential they rather than repeals (eg, 5 List of amendments incorporated in this reprint (most recent first) Insolvency Amendment Act 2009 (2009 No 52) Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34): sections 861, 863 Insolvency (Maximum Priority Amount) Order 2009 (SR 2009/228): clause 3 Māori Trustee Amendment Act 2009 (2009 No 12): section 30(1) Income Tax Act 2007 (2007 No 97): section ZA 2(1) Property Law Act 2007 (2007 No 91): section 364(1) Insolvency Act 2006 Commencement Order 2007 (SR 2007/332) Weathertight Homes Resolution Services Act 2006 (2006 No 84): section 127(3) District Courts Rules 1992 (SR 1992/109): rule 676 223 Insolvency Act 2006 Reprinted as at 1 April 2010 Notes 12 Wellington, New Zealand: Published under the authority of the New Zealand Government—2010 224