Insolvency Act 1967

1: Short Title and commencement
1: This Act may be cited as the Insolvency Act 1967.
2: This Act shall come into force on a date to be appointed for the commencement thereof by the Governor-General by Order in Council.
2: Interpretation
In this Act, unless the context otherwise requires,— Adjudication order of adjudication Assignee Official Assignee Assignee or Official Assignee:this definition was amended 10 December 1976 Insolvency Amendment Act 1976 by substituting the words the Official Assignee for New Zealand and any other an Assignee or Official Assignee: this definition was substituted 11 June 1985 Insolvency Amendment Act 1985 Available act of bankruptcy Commonwealth country Company within the meaning of the Companies Act 1955 company overseas company Companies Act 1993 Building Societies Act 1965 Incorporated Societies Act 1908 Industrial and Provident Societies Act 1908 Company: this definition was amended 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994 by substituting the words within the meaning of the Companies Act 1955 Companies Act 1993 or overseas company within the meaning of the Companies Act 1955 The Court High Court The Court: the words High Court substituted Supreme Court 1 April 1980 12 Judicature Amendment Act 1979 Debt provable in bankruptcy provable debt Disposition
a: Any conveyance, transfer, assignment, settlement, delivery, payment, or other alienation of property, whether at law or in equity:
b: The creation of a trust:
c: The grant or creation of any lease, mortgage, charge, servitude, licence, power, or other right, estate, or interest in or over any property, whether at law or in equity:
d: The release, discharge, surrender, forfeiture, or abandonment, at law or in equity, of any debt, contract, or thing in action, or of any right, power, estate, or interest 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 become irrecoverable or unenforceable by action through the lapse of time:
e: The exercise of a general power of appointment in favour of any person other than the donee of the power:
f: Any transaction entered into by any person with intent thereby to diminish, directly or indirectly, the value of his own estate and to increase the value of the estate of any other person: Goods Judge High Court Judge: the words High Court substituted Supreme Court 1 April 1980 12 Judicature Amendment Act 1979 local authority sections 72(2)(e) 74(1)
a: means a local authority within the meaning of the Local Government Act 2002
b: includes any body that, immediately before the repeal of the Local Authorities Loans Act 1956 Part I of that Act section 2 of that Act local authority: this definition was inserted 1 July 2003 262 Local Government Act 2002 See sections 273 to 314 Ordinary resolution resolution section 40 Petition Prescribed Property Registrar Rules Secured creditor Securities Settlement Shares Sheriff Special resolution section 39 1908 No 12 s 2 Bankruptcy Act 1914 s 167 (UK)
3: Rights and powers under other Acts not affected
1: Nothing in this Act shall affect the right of any local authority to recover judgment for rates, and to enforce payment of any rates by selling or leasing the land in respect of which the rates are payable, in accordance with the provisions of any Act relating to rates and the recovery thereof.
2: Nothing in this Act shall affect the provisions of the Joint Family Homes Act 1964
3: Except as expressly provided in this Act, nothing in this Act shall affect the power of any secured creditor to realise or otherwise deal with his security in the same manner as he would have been entitled to realise and deal with it if this Act had not been passed.
4: Subject to the provisions of this Act, the Assignee shall be entitled to avail himself of all rights and remedies provided by any other Act or rule of law in addition to the rights and remedies provided by this Act. 1908 No 12 ss 53(5), 102(11) Bankruptcy Act 1949 s 41(6) (Canada)
4: Act to bind Crown
This Act shall bind the Crown. 1908 No 12 s 148 Bankruptcy Act 1949 s 172 (Canada)
1: The Court in bankruptcy
5: Jurisdiction and powers of Court
1: Every Judge may exercise, either in Chambers or in open Court, all the powers and jurisdiction given to the Court under this Act: Provided that the public examination of a bankrupt and an application for an order of discharge or annulment shall be heard and disposed of in open Court.
2: In considering any transaction, the Court shall be entitled to look at the real nature of the transaction, notwithstanding that the transaction is formally of another character or is described by the parties thereto as being of another character. 1908 No 12 s 7
6: Powers of Registrars and District Court Judges
1: The Registrar or any District Court Judge Provided that a Registrar or District Court Judge
a: To grant an order of discharge or annulment:
b: To commit for contempt of Court:
c: To exercise any of the jurisdiction conferred upon the Court by Part 13
d: To conduct any public examination under section 69
2: Where any application is made to the Registrar or District Court Judge
3: Any decision made by a Registrar or District Court Judge section 8
4: No appeal shall lie direct to the Court of Appeal from any decision of a Registrar or District Court Judge 1908 No 12 s 12 The words District Court Judge substituted Magistrate 1 April 1980 18(2) District Courts Amendment Act 1979
7: Questions of fact may be tried before jury
Where any question of fact arises before the Court in any proceedings under this Act, the Court may, if it thinks fit, direct the truth thereof to be determined by the verdict of a jury. 1908 No 12 s 14
8: Rehearings and appeals
1: The High Court
2: Except as provided in subsection (4) High Court 1908 No 12 ss 9, 16 UK Act s 108 The words High Court substituted Supreme Court 1 April 1980 12 Judicature Amendment Act 1979
9: Effect of appeal
1: Subject to the provisions of this section, a notice of appeal shall not stay proceedings under the decision appealed from unless the High Court
2: Where any person has been adjudged a bankrupt and an appeal is filed against the order of adjudication, the bankrupt, or any other interested person, may apply to the High Court
3: If the High Court subsection (2)
4: If an appeal is not allowed in any case where the order has been suspended, the High Court
5: In any case where the order has not been suspended and the appeal is allowed, the High Court The words High Court substituted Supreme Court 1 April 1980 12 Judicature Amendment Act 1979
10: Court may extend time
Where by this Act, or by the rules, or by any regulations made under this Act, the time for doing any act or thing is limited, the Court may extend the time, either before or after the expiration thereof, upon such terms (if any) as it thinks fit. 1908 No 12 s 18(2)
11: Proceedings not annulled by defects
Proceedings under this Act shall not be annulled or set aside by reason of any defect, misnomer, or inaccurate description, or of the omission, of anything required to be done in or concerning any such proceedings in any case where no person is injuriously affected thereby; and any Court having jurisdiction may, in any case where any such error or omission is made, direct the same to be rectified, and may order the proceedings to be continued upon such terms as it thinks best in the interests of all concerned. 1908 No 12 s 167
12: Solicitors' costs
Any money paid, either before or after adjudication, by a bankrupt to his solicitor for costs in procuring the order of adjudication, except for costs and expenses as prescribed, shall be recoverable by the Assignee. 1908 No 12 s 174(4)
13: Power to make rules
1: Rules may from time to time be made in the manner prescribed by the Judicature Act 1908 High Court
2: Without limiting the general power conferred by subsection (1)
a: The manner in which proceedings under this Act may be commenced, and transferred from one registry of the Court to another:
b: Where proceedings under this Act may be commenced:
c: The forms to be used in any proceedings under this Act:
d: The service of documents filed or issued in any proceedings under this Act:
e: The amendment of defects and errors in any proceedings under this Act:
f: The mode in which evidence may be given in any proceedings under this Act:
g: The attestation and verification of documents for use in proceedings under this Act:
h: The proof of the identity of persons who are parties to or involved in proceedings under this Act:
i: The summoning of witnesses and the discovery of documents in proceedings under this Act:
j: The appearance of creditors or other persons in proceedings under this Act, and the procedure in case of the absence of any creditor or other person:
k: The notices to be given in connection with any proceedings under this Act, and by and to whom the same shall be given; and the manner of advertising under this Act:
l: The consolidation of proceedings under this Act; and the substitution of parties to proceedings under this Act:
m: Authorising the continuation of proceedings under this Act after the death of the debtor to whom they relate:
n: Authorising proceedings under this Act to be commenced against one or more partners without including others; and providing for the disclosure of the names of other partners:
o: The scale of costs to be allowed to solicitors and others in respect of proceedings under this Act:
p: The granting of costs, and the cases in which security for costs must be given:
q: The execution of processes and the enforcement of orders under this Act:
r: The time within which and the manner in which appeals to the Court of Appeal may be brought:
s: Such matters as are contemplated by or necessary for giving full effect to the provisions of this Act and for the due administration thereof.
3: Provision may be made by any such rules for adopting in whole or in part the practice and procedure of the High Court
4: Nothing in this section shall authorise the making of rules for the purposes of Part 16 1908 No 12 ss 17, 18, 19, 27, 28, 29, 33, 36, 37, 38, 45, 46, 48, 49, and 174 1952 No 56 s 78 The words High Court substituted Supreme Court 1 April 1980 12 Judicature Amendment Act 1979
14: Regulations
The Governor-General may from time to time, by Order in Council, make regulations for all or any of the following purposes:
a:
b: Prescribing the times at which and the manner in which meetings of creditors may be held, and the right to vote thereat:
c: Prescribing the times within which and the manner in which debts and claims of creditors may be made and proved; and the allowance or disallowance of any such debt or claim:
d: Providing for the public examination of bankrupts:
e: Prescribing the expenses which may be paid to a bankrupt, or any other person, who is required to attend any examination by the Assignee:
f: Prescribing the steps to be taken by an undischarged bankrupt who seeks the consent of the Assignee to leaving New Zealand and the circumstances in which and the conditions on which any such consent may be granted:
g: Prescribing the accounts to be kept by the Assignee, the audit of those accounts, and the fees payable in respect of such audit:
h: Prescribing the manner of advertising under this Act:
i: Providing for the appointment, retirement, removal, discharge, and control of trustees under Part 15
j: Prescribing the scale of fees of the High Court
k: Providing for such matters as are contemplated by or necessary for giving full effect to the provisions of this Act and for the due administration thereof. Paragraph (a) repealed 1 July 1994 2 Insolvency Amendment Act 1994 Paragraph (g) substituted 11 June 1985 Insolvency Amendment Act 1985 See SR 1970/260 The words High Court substituted Supreme Court 1 April 1980 12 Judicature Amendment Act 1979
2: The Official Assignee
15: Appointment of Official Assignee for New Zealand, etc
1: There shall be appointed from time to time under the State Sector Act 1988
a: A suitable person to be the Official Assignee for New Zealand under this Act:
b: A suitable person to be the Deputy Official Assignee for New Zealand under this Act:
c: Such other suitable persons as may be required to be Official Assignees under this Act.
2: There shall be appointed from time to time under the State Sector Act 1988
3: Assignees and Deputy Assignees shall be officers of the Court.
4: The Deputy Official Assignee for New Zealand shall discharge his duties and exercise his powers subject to the control and direction of the Official Assignee for New Zealand.
5: Every Assignee appointed under subsection (1)(c) subsection (2)
6: Nothing in this section shall affect sections 18(2) 29 Subsection (1) substituted 10 December 1976 Insolvency Amendment Act 1976 Subsections (4) (5) inserted 10 December 1976 Insolvency Amendment Act 1976 Section 15 substituted 11 June 1985 Insolvency Amendment Act 1985 The references to the State Sector Act 1988, in subsection (1) (2) substituted 1 April 1988 88(2) State Sector Act 1988
16: Assignee may act on behalf of another Assignee
Any Assignee or Deputy Assignee may act on behalf of or in the place of any other Assignee or Deputy Assignee, and while so acting shall have all the authority and powers of the Assignee or Deputy Assignee for whom or in the place of whom he acts.
17: Office and name of Assignee
1: Every Assignee may sue and be sued in the name of The Official Assignee in Bankruptcy of the property of ( Inserting the name of the bankrupt
2: Every Assignee or Deputy Assignee may administer oaths and take statutory declarations, and may appear in Court and examine the bankrupt in any proceedings.
3: Every Assignee shall have a seal of office, which shall be kept and used by him, and shall be applicable to all estates of which he has charge.
4: Every Assignee may execute all documents by signing his private name over the official name, and it shall not be necessary to affix a seal to any document, but nothing in this subsection shall prevent the Assignee from affixing his seal to any document. 1908 No 12 s 25
18: Vacation of office
1: A person shall not act or continue to act as Assignee of any bankrupt estate of which he is a creditor (not being a creditor in the capacity of the Assignee of the property of any other bankrupt or the liquidator of any company or an appointee under Part 17
2: In any case where such a disqualification occurs, the chief executive of the department of State that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act may appoint some other Assignee to be the Assignee of that estate.
3: If an Assignee is adjudged bankrupt he shall vacate that office, but nothing in this subsection shall affect the question of his employment in any other position in the Public Service; and, subject to the provisions of the State Sector Act 1988 1908 No 12 s 24 Subsection (2) substituted 1 October 1995 10(3) Department of Justice (Restructuring) Act 1995 The reference to the State Sector Act 1988, in subsection (3) substituted 1 April 1988 88(2) State Sector Act 1988
3: Proceedings up to adjudication
19: Acts of bankruptcy
1: A debtor commits an act of bankruptcy in each of the following cases:
a: If, in New Zealand or elsewhere, he makes a disposition of all or substantially all of his property to a trustee for the benefit of all or any of his creditors:
b: If, in New Zealand or elsewhere, he fraudulently, or with intent to give any creditor a preference over other creditors,—
i: Makes any disposition of his property or any part thereof; or
ii: Creates any charge thereon or gives any security thereover; or
iii: Makes any payment; or
iv: Incurs any obligation:
c: If, with intent to defeat or delay his creditors, he departs, or attempts to depart, or is about to depart, out of New Zealand, or (being out of New Zealand) remains out of New Zealand, or departs from his dwellinghouse, or otherwise absents himself, or keeps to any premises or to part thereof to avoid his creditors:
d: If a creditor has obtained a final judgment or final order against the debtor for any amount, and, execution thereon not having been stayed, the debtor has served on him in New Zealand, or, by leave of the Court, elsewhere, a bankruptcy notice under this Act, and he does not, within 14 days after the service of the notice in a case where the service is effected in New Zealand, and in a case where the service is effected elsewhere then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice or satisfy the Court that he has a counterclaim, set-off, or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid, and which he could not set up in the action in which the judgment was obtained, or the proceedings in which the order was obtained:
e: If he gives notice to any of his creditors that he has suspended or is about to suspend payment of his debts:
f: If at any meeting of his creditors he admits that he is in insolvent circumstances, and if either:
i: A majority in number and value of the creditors present at the meeting by resolution at the meeting require him to file a debtor's petition; or
ii: He consents to file a debtor's petition and he does not within 48 hours (excluding any holiday) from the time of his consent file the petition:
g: If possession has been taken under execution issued against him or his property on any legal process and the judgment or order in respect of which the execution is issued is not satisfied within 7 days after possession has been taken: Provided that, where an interpleader summons has been taken out in regard to the property seized, the time elapsing between the taking out of the summons and the time when the proceedings on the summons are finally disposed of, settled, or abandoned shall not be taken into account in calculating the said period of 7 days:
h: If a writ of sale directed against any land of the debtor or any interest therein has been delivered to a Sheriff, and that land or interest has been advertised for sale, in at least one newspaper published or circulating in the town or district in which the land is situated, under that process: Provided that, if the judgment or order in pursuance of which the writ of sale issued is satisfied within 7 days after the said writ of sale has been both delivered to the Sheriff and advertised, no act of bankruptcy shall have been committed:
i: If a return of nulla bona
j: If, with intent to prejudice his creditors or to prefer one creditor above another, he removes or attempts to remove any of his property from any place, or conceals or attempts to conceal any of his property:
k: If he is required by law to keep a trust account and any Court has given judgment against him for non-payment of trust money and the judgment is unsatisfied for 7 days.
2: For the purposes of paragraph (d) section 20
a: Any person who is for the time being entitled to enforce a final judgment or final order shall be deemed to be a creditor who has obtained a final judgment or final order; and
b: Where leave is given by the Court to enforce an award made on a submission to arbitration, being an award under which money is payable by a debtor to another person,—
i: The award shall be deemed to be a final order obtained by that person against the debtor; and
ii: The arbitration proceedings shall be deemed to be proceedings in which the final order was made. 1908 No 12 s 26 1927 No 41 s 2(4)
20: Bankruptcy notice
A bankruptcy notice under paragraph (d) Provided that a bankruptcy notice under that paragraph—
a: May specify an agent to act on behalf of the creditor in respect of any payment or other thing required by the notice to be made to, or done to the satisfaction of, the creditor:
b: Shall not be invalidated by reason only that the sum specified in the notice as the amount due exceeds the amount actually due, unless the debtor within the time allowed for payment gives notice to the creditor that he disputes the validity of the notice on the ground of that misstatement; but if the debtor does not give any such notice he shall be deemed to have complied with the bankruptcy notice if within the time allowed he takes such steps as would have constituted a compliance with the notice had the actual amount due been correctly specified therein. 1927 No 41 s 2
21: Petition by debtor
A debtor may file a petition to have himself adjudged bankrupt, and on the filing of such a petition the debtor shall be deemed to be adjudged bankrupt, with the same consequences in all respects as if the Court had made an order adjudging him bankrupt. 1908 No 12 s 31
22: Debtors' joint petition
Any 2 or more persons, being partners, may file a debtors' joint petition, and it shall have the effect of an order of adjudication against them jointly and against each of them separately. 1908 No 12 s 32
23: Petition by creditor
A creditor may file a bankruptcy petition against a debtor, if—
a: The debt owing from the debtor to the petitioning creditor, or, if 2 or more creditors join in the petition, the aggregate amount of debts owing to the several petitioning creditors, amounts to a sum not less than $200; and
b: The debtor, whether before or after incurring the debt, has committed an act of bankruptcy within 3 months before the filing of the petition; and
c: The debt is a liquidated sum payable either immediately or at some certain future time. 1908 No 12 s 34
24: Restrictions on execution
1: Upon the filing of a petition by a creditor under the provisions of section 23
a: No execution shall be issued by that creditor against the debtor in respect of his property or person to recover any debt on which the petition is based; and
b: No such execution previously issued by that creditor shall be continued.
2: The Court may, at any time after the filing of a creditor's petition, stay any other execution against the debtor in respect of his property or person or may permit any other execution to issue on such terms, if any, as the Court thinks fit; and (except as provided in section 27
3: If execution is stayed under subsection (3) section 50
4: In this section the term execution
a: Issuing or proceeding with any writ or warrant for the possession, seizure, or sale of any property, or any writ of attachment, in pursuance of any judgment or order obtained against the debtor in any Court in its civil jurisdiction, other than a judgment or order for possession of any tenement obtained against the debtor on the ground that he is a trespasser or that his tenancy has expired:
b: Issuing or proceeding with a committal warrant under a judgment summons order under section 14 Imprisonment for Debt Limitation Act 1908
c: Obtaining in favour of a judgment creditor a garnishee order under rule 270 paragraph (c) of subclause (2) of rule 271, of the District Courts
d: Having a charging order nisi made absolute under rule 585 Judicature Act 1908
e: Commencing or continuing proceedings in any Court for the appointment of a receiver of any property: Provided that this paragraph shall not apply to anything done under section 27
f: Exercising any power of re-entry conferred by any lease, or any power of determining any lease, whether granted before or after the commencement of this Act:
g: Seizing or selling any property by way of distress for rent.
5: Upon the withdrawal or dismissal of the petition any execution may be issued or continued. 1908 No 12 s 44(2) Subsection (4)(d) amended substituting the words 585 of the High Court Rules rule 326 of the revoked Code of Civil Procedure
25: Where petitioner is a secured creditor
If the petitioning creditor is a secured creditor, the Court shall not make an order of adjudication unless the creditor satisfies the Court that the amount of the debt exceeds the value of the security by at least $200. 1908 No 12 s 35
26: Court's power on creditor's petition
1: The Court, on being satisfied that the allegations stated in a creditor's petition are true, may, in its discretion, adjudge the debtor bankrupt.
2: If the Court is not satisfied that the allegations stated in the creditor's petition have been proved, or is satisfied that the debtor is able to pay his debts or that it is just and equitable not to make an order of adjudication or that for other sufficient cause no order ought to be made, the Court may dismiss the petition.
3: Without limiting the provisions of subsection (2) section 140 section 146
4: When the act of bankruptcy relied on is that specified in paragraph (d) (k)
5: Where the debtor appears on the petition and denies that he is indebted to the petitioner or that he is indebted to such an amount as would justify the petitioner in presenting a petition against him, the Court, on such security (if any) being given as it requires for payment to the petitioner of any debt which may be established against the debtor and of the costs of establishing the debt, may, instead of dismissing the petition, stay all proceedings on the petition for such time as is required for the trial of the question relating to the debt.
6: Where proceedings on a creditor's petition have been stayed, the Court may, if by reason of that delay or for any other cause it thinks just, make an order of adjudication on the petition of some other creditor, and it shall thereupon dismiss on such terms as it thinks just the petition on which proceedings have been stayed.
7: The Court may at any time make an order staying the proceedings under a creditor's petition, for such time, on such terms, and subject to such conditions as the Court thinks fit.
8: Where a creditor's petition relates to more than one debtor, the Court may dismiss the petition as to one or more of them without prejudice to the effect of the petition in relation to the other or others of them.
9: If the petitioner does not proceed with due diligence, or if at the hearing of the petition the petitioner offers no evidence, the Court may substitute as petitioner any other creditor to whom the debtor is indebted in the amount required by this Act in the case of a petitioning creditor. The petitioner so substituted shall file a fresh petition, but may rely upon the act of bankruptcy alleged in the original petition.
10: A creditor's petition shall not after filing be withdrawn without the leave of the Court. 1908 No 12 ss 30, 37(3), 39, 40, 41, 42, 43, 46, 47, 50 UK Act, s 5(4)
27: Court may appoint Assignee as receiver
1: The Court may if it thinks fit, on the application of a creditor, at any time after the filing of a creditor's petition against a debtor and before adjudication, appoint an Assignee as receiver and manager of the whole or any part of the debtor's property. In any such order the Court may authorise the Assignee so appointed to take possession of any property, to sell any property that is perishable or likely to depreciate rapidly in value, and to exercise such control over the debtor's business or property as the Court directs. No order shall be made for the exercise of control over a debtor's business except to the extent to which in the opinion of the Court it is necessary for the purpose of conserving the debtor's property.
2: At any time after the appointment of a receiver and manager under subsection (1)
3: Upon notice of the appointment of a receiver and manager being advertised in the prescribed manner, no execution within the meaning of subsection (4) Provided that the Court may, on the application of any creditor or other person interested, allow any such execution to be issued or (as the case may be) to be continued on such terms and conditions as the Court thinks fit. 1908 No 12 s 44(1)
28: Date of adjudication
The date of adjudication for the purposes of this Act is,—
a: If a person is adjudicated bankrupt on a debtor's petition, the date on which, and the time at which, the petition is filed; or
b: If a person is adjudicated bankrupt on a creditor's petition, the date on which, and the time at which, the Court order is made. 1908 No 12 s 51 Section 28 substituted 26 April 1999 2 Insolvency Amendment Act 1999
28A: Date of adjudication to be recorded
1: If—
a: A person is adjudicated bankrupt on a debtor's petition, the Registrar must record in the debtor's petition the date on which, and the time at which, the petition was filed; or
b: A person is adjudicated bankrupt on a creditor's petition, the Court must record in the order of adjudication the date on which, and the time at which, the order was made.
2: If any question arises as to whether an act was done or a transaction was entered into or effected before or after the date of adjudication, that act or transaction is, in the absence of proof to the contrary, deemed to have been done or entered into or effected, as the case may be, after that date. Section 28A inserted 26 April 1999 2 Insolvency Amendment Act 1999
29: Registrar to give notice of adjudication to Assignee
1: The Registrar must, forthwith after any adjudication, give notice of the adjudication to the Assignee the Registrar considers most appropriate to administer the estate, and that Assignee becomes the Assignee of the property of the bankrupt.
2: Despite subsection (1) The proviso to section 29 substituted 1 October 1995 10(3) Department of Justice (Restructuring) Act 1995 Section 29 substituted 3 June 1998 2 Insolvency Amendment Act 1998
30: Order of adjudication to be final
Subject to the provisions of this Act relating to appeals, an order of adjudication, or an adjudication arising from the filing of a debtor's petition, shall be final and conclusive with respect to the validity of the adjudication and to the existence of all requisites thereto; and shall be binding on all persons, whether parties to the proceedings or not. 1908 No 12 s 54
4: Proceedings consequent on adjudication
31: Assignee to advertise adjudication
As soon as practicable after the Assignee receives notice of any adjudication, he shall advertise the adjudication and the date of adjudication 1908 No 12 s 52(2) Section 31 amended 26 April 1999 3 Insolvency Amendment Act 1999 by substituting the words of adjudication thereof
32: Effect of adjudication on Court proceedings
Subject to section 55 of the Apprenticeship Act 1983 1908 No 12 s 53(2) Section 32 amended Apprenticeship Act 1983 by substituting the words Subject to section 55 of the Apprenticeship Act 1983 Upon
33: Assignee to send notice to bankrupt
1: Forthwith after he receives the notice of any adjudication, the Assignee shall send to the bankrupt, at the address given in the bankruptcy petition or at his last known address, a notice in the prescribed form requiring him to make out a statement in the prescribed form showing particulars of his assets, debts, and liabilities, the name, address, and occupation of every creditor, and the securities held by each creditor, and to file the same together with his answers to the prescribed questions within the time specified by the Assignee in the notice, and (if required by the Assignee) to attend at a place and time fixed by the Assignee and there to be examined by the Assignee or some other person as to his bankruptcy.
2: The bankrupt may from time to time file with the Assignee any further or amended statement or answers. 1908 No 12 s 58(1), (2) Meetings of creditors
34: First meeting of creditors
1: Except as otherwise provided in section 34A section 33
a: The bankrupt at his last known address; and
b: Each creditor named in the bankrupt's statement of affairs at the address given therein or such address as may be known to the Assignee; and
c: Such other creditors (if any) as are known to the Assignee.
2: The Assignee shall at the same time advertise in the prescribed manner notice of the time and place appointed for the meeting. 1908 No 12 s 94 Subsection (1) amended 2 Insolvency Amendment Act 1990 by substituting the words Except as otherwise provided in section 34A of this Act Except where the Assignee considers that special circumstances would justify the delay, he shall,
34A: Assignee may dispense with first meeting of creditors
The Assignee shall not be required to summon a first meeting of creditors under section 34
a: The Assignee considers, having regard to the assets and liabilities of the bankrupt, the likely result of the bankruptcy, and any other relevant matters, that no such meeting should be summoned; and
b: The Assignee gives notice in writing to each creditor named in the bankrupt's statement of affairs and to such other creditors (if any) as are known to the Assignee stating—
i: That the Assignee does not consider that the meeting should be held; and
ii: The reasons for the Assignee's view; and
iii: That no such meeting will be summoned unless a creditor gives notice in writing to the Assignee, within 14 days after receiving the notice, requiring the meeting to be summoned; and
c: No notice requiring the meeting to be summoned is received by the Assignee within that period. Section 34A inserted 19 March 1990 3 Insolvency Amendment Act 1990
35: Particulars to be supplied by Assignee
1: Except where he has called a meeting without the bankrupt having filed the statement of affairs, the Assignee shall send to each creditor, with the notice summoning the meeting,—
a: A summary of the bankrupt's statement of his assets and liabilities together with a list of his creditors as shown in his statement; and
b: Either extracts from, or a summary of, the bankrupt's explanation of the causes of his bankruptcy; and
c: Any observations on any aspect of the bankruptcy that the Assignee thinks fit to make.
2: The proceedings at the meeting shall not be invalidated by reason of any such notice or summary not having been sent or received before the meeting. 1908 No 12 s 94 clause 3 First Schedule UK Act
36: Further meetings
1: The Assignee may from time to time summon a further meeting of creditors, and shall call a further meeting of creditors when required by one-fourth in value of the creditors who have proved their debts.
2: The provisions of subsection (1) 1908 No 12 s 94(3), (4)
37: Conduct of meetings
1: The chairman of every meeting shall be the Assignee or some person appointed for the time being by him. If the Assignee or any person so appointed is not present at the meeting, the creditors may elect one of their number who is qualified to vote to act as chairman. Any person so appointed or elected shall have power to administer any oath which the Assignee could have administered if present.
2: The bankrupt shall, if required by the Assignee, attend all meetings of creditors and, if required by the Assignee or the chairman or any creditor or his representative, submit to an examination on oath or otherwise by the Assignee or chairman and any creditor or his representative, and he shall sign a statement of any evidence he gives under any such examination if required by the Assignee or chairman.
3: The Assignee or chairman may adjourn any meeting from time to time and place to place.
4: If he is present at any meeting or any adjournment thereof, the Assignee shall report on the administration of the estate and shall give any creditor such further information as he may properly require and shall, if required, produce to each meeting and to any adjournment thereof all books of account, deeds, and papers then in his possession relating to the property of the bankrupt.
5: The Assignee, or the creditors present at the meeting, by ordinary resolution, may consent to the presence of any other person at any meeting of creditors.
6: The Assignee shall cause to be kept minutes of the proceedings at every meeting. The minutes shall be signed by him or by the chairman. 1908 No 12 ss 60, 95
38: Quorum at meetings
A meeting may proceed if the Assignee (or some person appointed by him) and one creditor are present or represented. If the meeting is not adjourned and a quorum is not present, the meeting shall lapse, in which case the Assignee may summon another meeting of creditors. 1908 No 12 s 95
39: Representation at meetings
1: A creditor may be represented at any meeting by—
a: Any barrister or solicitor:
b: Any public accountant or any person who is keeping the creditor's books of account:
c: Any person who is an authorised agent of the creditor under a power of attorney:
d: Any other person who satisfies the Assignee that he represents the creditor.
2: Without restricting the generality of subsection (1)
a: In the case of the Crown, by any officer of the appropriate Government Department:
b: In the case of any public body, by any officer of that body:
c: In the case of any company, by any of its directors, or its general manager, secretary, or accountant, or any other person authorised in writing by any such director, or its general manager, secretary, or accountant:
d: In the case of a partnership, by any of the partners. 1908 No 12 s 96
40: Voting at meetings
1: An ordinary resolution shall be carried by a majority of those creditors or their representatives present and voting thereon: Provided that it shall be decided upon by a majority in value of those creditors or their representatives present and voting thereon if any creditor or his representative so demands, and in any such case, for the purpose of voting at the meeting, and not otherwise,—
a: The Assignee may admit or reject proofs of debt, and may for that purpose adjourn the meeting; and
b: Any person whose proof has been admitted shall be deemed to be a creditor.
2: A secured creditor may vote in respect of the debt due to him only after valuing, surrendering, or realising his security in accordance with the provisions hereafter appearing in this Act in respect of secured creditors.
3: A creditor shall not vote in respect of any debt on or secured by a current bill of exchange or promissory note unless he is willing to treat the liability to him thereon of every person who is liable thereon antecedently to the debtor, and who is not a bankrupt, as a security in his hands, and to estimate the value thereof, and, for the purposes of voting, but not for the purposes of dividend, to deduct it from his proof: Provided that the Assignee may at any time require the production of the bill or note.
4: No person shall vote in favour of any resolution which would directly or indirectly place him, or his partner or employer or employee, or the creditor whom he represents, or the creditor's partner or employer or employee, in a position to receive any remuneration out of the estate of the debtor otherwise than as a creditor rateably with the other creditors of the debtor.
5: If an order of adjudication is made against one partner of a firm, any creditor to whom that partner is indebted jointly with the other partners of the firm, or any of them, may prove his debt for the purpose of voting at any meeting of creditors, and shall be entitled to vote thereat.
6: Where a meeting of creditors is called by notice, the proceedings had and resolutions passed at the meeting shall, unless the Court otherwise orders, be valid notwithstanding that some creditors have not received notice of the meeting. 1908 No 12 ss 96, 97
41: Appointment of expert or committee to assist Assignee
1: At any meeting of creditors, the creditors may by resolution appoint any expert to assist the Assignee in the administration of the estate, and may by resolution provide for his remuneration out of the estate.
2: At any meeting of creditors, the creditors may by resolution appoint a committee of any persons to assist the Assignee in the administration of the estate, and may, with the approval of the Court, provide for their remuneration out of the estate.
3: Where any supervisors appointed under section 57 of the Bankruptcy Act 1908 1908 No 12 s 57
5: Property of bankrupt
42: Property passing to Assignee and commencement of bankruptcy
1: All the property and powers of the bankrupt specified in subsection (2) Provided that, upon any other Assignee becoming the Assignee of the property of the bankrupt the said property and powers are hereby vested, thereupon or as soon thereafter as this section becomes applicable thereto, in that other Assignee, but without prejudice to any disposition made by any former Assignee.
2: Subject to the provisions of subsection (3) sections 47 48 49 50 59
a: All property whatsoever and wheresoever situated belonging to or vested in the bankrupt at the commencement of the bankruptcy, or acquired by or devolving upon him before his discharge:
b: The capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of any property whatsoever and wheresoever situated as might have been exercised by the bankrupt for his own benefit at the commencement of the bankruptcy or before his discharge.
3:
4: The time of the commencement of the bankruptcy shall be calculated as follows:
a: If a debtor is adjudged bankrupt on a creditor's petition, the bankruptcy shall relate back to and commence at the time of the act of bankruptcy on which the order is made adjudging him a bankrupt or, if the bankrupt is proved to have committed more acts of bankruptcy than one, the bankruptcy shall relate back to and commence at the time of the first of the acts of bankruptcy proved to have been committed by the bankrupt within 3 months immediately preceding the filing of the petition:
b: Where a person is adjudged bankrupt on a debtor's petition, the bankruptcy shall commence at the time of the filing of the petition, or (where the debtor is proved to have committed an act or acts of bankruptcy) the bankruptcy shall relate back to and commence at the time of the first of the acts of bankruptcy proved to have been committed by the bankrupt within 3 months immediately preceding the filing of the debtor's petition, or (if at the time of the filing of the debtor's petition the hearing of a creditor's petition is pending or a creditor's petition is being heard) within 3 months immediately preceding the filing of the creditor's petition: Provided that the bankruptcy shall not relate back to any prior act of bankruptcy, unless at the time of committing the prior act the bankrupt was indebted to some creditor or creditors in a sum not less than $200.
5: Nothing in the Land Transfer Act 1952 1908 No 12 ss 53(1), 55, 61 Subsection (3) amended 1 February 2002 63(2) Property (Relationships) Amendment Act 2001 by omitting the expression Subject to section 43 of this Act See section 63(5) in any case where a person has been adjudged bankrupt, or there has been an order or election to administer an estate under Part 17 section 63
43: Loans by wife to husband, and by husband to wife
Section 43 repealed 1 February 2002 63(1) Property (Relationships) Amendment Act 2001 See section 63(5) in any case where a person has been adjudged bankrupt, or there has been or order or election to administer an estate under Part 17 section 63
44: Restrictions on bankrupt dealing with property
Subject to the provisions of section 49
a: Neither a bankrupt nor any person (other than the Assignee) claiming through or under him shall have power to recover any property forming part of the bankrupt's estate or to make any release or discharge thereof:
b: The bankrupt shall not execute, whether before or after he obtains his discharge, any power of appointment or any other power vested in him so as to defeat or destroy any contingent or other estate or interest in any property to which (in default of appointment or otherwise in case of non-execution of the power) he may be beneficially entitled at any time before his discharge. 1908 No 12 ss 67, 68
45: Assignee may require bankrupt to contribute towards payment of debts
1: A bankrupt must pay any amount, or make periodic payments, to the Assignee as required by the Assignee during the bankruptcy.
2: The Assignee may impose conditions in respect of those payments.
3: Before the Assignee may require the bankrupt to make those payments, the Assignee must—
a: have regard to all the circumstances of the bankruptcy and the bankrupt's conduct, earning power, responsibilities, and prospects; and
b: make reasonable allowance for the maintenance of the bankrupt, the bankrupt's spouse, and the bankrupt's family.
4: The Court may, on the application of the bankrupt or any creditor,—
a: vary, suspend, or cancel the bankrupt's obligation to make the payments under this section:
b: remit any arrears owing by the bankrupt. Section 45 substituted 3 May 2001 3 Insolvency Amendment Act 2001
45A: Court may order that money due to bankrupt be assigned to Assignee
1: The Court may, on the application of the Assignee, make an order assigning or charging to or in favour of the Assignee any money due to the bankrupt or to become due or payable to the bankrupt.
2: That assignment or charge operates as a discharge to the person who pays the Assignee. Sections 45A 45B inserted 3 May 2001 3 Insolvency Amendment Act 2001
45B: Application of
section 104 The Assignee must apply the following payments in accordance with section 104
a: any amount paid by the bankrupt under section 45
b: any amount paid to the Assignee under an order made under section 45A Sections 45A 45B inserted 3 May 2001 3 Insolvency Amendment Act 2001
46: Onus of proof in connection with default in payment
Where default has been made in complying with an order under section 45
47: Protection of certain transactions against relation back
1: Subject to the provisions of section 50 sections 54 to 57 section 42
a: Any payment by the bankrupt to any of his creditors; or
b: Any disposition by the bankrupt for valuable consideration; or
c: Any disposition of property made for valuable consideration by—
i: A person who became entitled to the property under a disposition made by the bankrupt; or
ii: A person who became entitled, whether before or after the adjudication of the bankrupt, to the property through a person to whom subparagraph (i)
d: Any contract, dealing, or transaction by or with the bankrupt for valuable consideration— if the following conditions are complied with, namely, that—
e: The person (other than the bankrupt) to, by, or with whom the payment, disposition, contract, dealing, or transaction was made, executed, or entered into, had not at the time of the payment, disposition, contract, dealing, or transaction notice of any available act of bankruptcy committed by the bankrupt before that time and otherwise acts in good faith; and
f: The payment, disposition, contract, dealing, or transaction takes place before the adjudication: Provided that this paragraph shall not apply to a disposition to which subparagraph (ii)
2: Any payment, disposition, contract, dealing, or transaction by or with a trustee or an agent of a bankrupt shall for the purposes of this section have the same effect as if made by or with the bankrupt himself. 1908 No 12 s 82
48: Validity of certain other transactions with bankrupt
A payment of money or delivery of property to or to the order of a person who has been or subsequently is adjudged bankrupt, or to or to the order of a person claiming by assignment from him, shall, notwithstanding anything in this Act, be a good discharge to the person paying the money or delivering the property if payment or delivery was made before the adjudication was advertised and the person making the payment or giving delivery satisfies the Court that he had no knowledge of the adjudication or the presentation of a bankruptcy petition and that the payment or delivery was either in the ordinary course of business or otherwise in good faith. 1908 No 12 s 82A 1956 No 60 s 6
49: Dealings with undischarged bankrupt: bank accounts
1: The following shall be valid against the Assignee if they are completed (within the meaning of subsection (2)
a: All transactions by a bankrupt with any person dealing with him in good faith and for value, in respect of property which is acquired by the bankrupt or devolves upon him after the adjudication:
b: All executions and attachments in good faith against the property acquired by the bankrupt or which devolves upon him after the adjudication, being executions and attachments in respect of debts or liabilities incurred by the bankrupt after the adjudication.
2: Any estate or interest in any property to which subsection (1)
3: For the purposes of subsection (1)
4: For the purposes of subsection (1)
5: Where a banker has ascertained that a person having an account with him is an undischarged bankrupt, then, unless the banker is satisfied that the account is on behalf of some other person, it shall be his duty forthwith to inform the Assignee of the existence of the account, and thereafter he shall not make any payments out of the account, except under an order of the Court, or in accordance with instructions from the Assignee, unless by the expiration of one month from the date of giving the information no instructions have been received from the Assignee. 1908 No 12 s 82B 1956 No 60 s 7
50: Rights of execution creditor and duties of Sheriff
1: Notwithstanding the provisions of section 42 subsections (3) (4) (8) section 56
2: For the purposes of subsection (1) subsection (1)
3: Subject to the provisions of subsection (8)
4: Subject to the provisions of subsection (8)
a: Where notice is so served on the Sheriff of the debtor having filed a bankruptcy petition, the Sheriff shall pay the balance to the Assignee, who shall be entitled to retain it as against the execution creditor:
b: Subject to the provisions of paragraph (a)
c: Where the debtor is adjudged a bankrupt on a petition of which notice has been so served on the Sheriff, he shall pay the balance to the Assignee, who shall be entitled to retain it as against the execution creditor:
d: In any other case, the Sheriff shall pay the balance to the execution creditor, who shall (subject to the provisions of section 56
5: No execution, attachment, or other process in respect of the debtor's property or person shall be commenced or continued after the bankruptcy is advertised, or notice is given to the creditor by the Assignee, in respect of any debt provable in the bankruptcy, and no distress for rent due by the bankrupt shall thereafter be levied, but if previously levied may be proceeded with.
6: Subsections (1) (2)
7: Any person who purchases in good faith under a sale by the Sheriff any property of a debtor on which an execution has been levied shall in all cases acquire a good title to it against the Assignee.
8: The rights conferred by this section on the Assignee may be set aside by the Court in favour of the creditor to such extent and subject to such terms as the Court thinks fit. 1908 No 12 ss 53(3), (4), 80, 81
51: Assignment of money payable to dairy farmer in respect of sales of milk
1: In this section, unless the context otherwise requires,— Dairy farmer Milk Purchaser
2: A contract in writing by a dairy farmer by the terms whereof a person who makes or has made advances to a dairy farmer becomes assignee of or is otherwise entitled to receive money which is then or thereafter becomes payable to the dairy farmer by a purchaser, or any part of that money, is valid in law.
3: Notice in writing to the purchaser of the contract shall be effectual to charge in the hands of the purchaser the money which the dairy farmer is entitled to receive from the purchaser at the time of the service of the notice, and also all other money which may thereafter from time to time become payable by the purchaser in respect of milk purchased or acquired by him from the dairy farmer.
4: The charge shall operate immediately upon receipt by the purchaser of the milk in respect whereof the money becomes payable, and shall further operate for the benefit of the person entitled under the contract to the extent provided by the contract, and the purchaser shall pay the money only to the person who under the terms of the contract is entitled to receive the same or to his duly authorised agent.
5: No such contract shall be liable to be impeached or set aside under any provisions of this Act relating to preference, except only (so far as those provisions are applicable) to the extent of advances made to the dairy farmer before the making of the contract.
6: Notice of an act of bankruptcy committed by the dairy farmer shall not affect the validity of the contract or of any advances made thereafter to the dairy farmer, or the right and security of the person who under the terms of the contract is entitled to receive money from the purchaser. The rights of the parties under the contract shall, unless earlier determined by agreement, continue until the actual date when the dairy farmer is adjudged a bankrupt, and shall not be affected by any relation back of the bankruptcy to an earlier date. 1927 No 41 s 12
52: Bankrupt allowed to retain furniture, tools of trade, etc
1: The bankrupt shall be entitled, within 7 days immediately after adjudication or within such further time as the Assignee allows, to select and retain as his own property his necessary tools of trade to the value in the opinion of the Assignee of $500 $2,000 Provided that this provision is without prejudice to any valid security or hire purchase agreement there may be over or in respect of the same, and shall not confer any rights upon the bankrupt to any other portion of his property, if—
a: His necessary tools of trade do not in the opinion of the Assignee amount in value to $500
b: His necessary household furniture and effects do not in the opinion of the Assignee amount in value to $2,000
2: The Assignee may allow the bankrupt to retain necessary tools of trade to a value in excess of $500 $2,000
3: The powers conferred on the bankrupt by this section in respect of furniture and household effects may be exercised in the event of his death by a member of his family approved for the purpose by the Assignee or the Court.
4: The Governor-General may from time to time, by Order in Council, amend subsection (1) (2) 1908 No 12 s 121 Subsection (1) proviso amended 6 November 1986 Insolvency Amendment Act 1986 by substituting the expressions $500 $2,000 $100 $300 Subsection (2) amended 6 November 1986 Insolvency Amendment Act 1986 by substituting the expressions $500 $2,000 $100 $300 Subsection (4) inserted 6 November 1986 Insolvency Amendment Act 1986
53: Assignee may make allowance to bankrupt
1: The Assignee may from time to time, subject to the consent of the creditors expressed by resolution, make such an allowance of money as he thinks just out of the property to the bankrupt or any member of his family for the support of the bankrupt and his family.
2: The Assignee may allow the bankrupt to retain any money the bankrupt has in his possession or in a bank account at the time of adjudication for the immediate maintenance of himself and his family up to a limit of $400
3: The Governor-General may from time to time, by Order in Council, amend subsection (2) 1908 No 12 s 71 Subsection (2) amended 6 November 1986 Insolvency Amendment Act 1986 by substituting the expression $400 $40 Subsection (3) inserted 6 November 1986 Insolvency Amendment Act 1986
54: Voidable gifts
1: Any gift of property shall be voidable as against the Assignee if the donor is adjudged bankrupt within 2 years after the making of the gift.
2: Any gift of property shall, if the donor is not adjudged bankrupt within 2 years after the making of the gift but is adjudged bankrupt within 5 years after the making of the gift, be voidable as against the Assignee, unless the party claiming under the gift proves that the donor was at the time of the making of the gift or at any time thereafter up to his adjudication able to pay all his debts without the aid of the property comprised in the gift, and that if the gift was a settlement, the interest of the settlor in the property passed to the trustees of the settlement on the execution thereof.
3: Whenever a disposition is made for valuable consideration but not for adequate consideration in money or money's worth and where, having regard to the difference between the value of the property disposed of and the value of the consideration and all other circumstances, the Court is satisfied that the intention of the debtor was to make a gift of the difference between the consideration and the value thereof and the gift would be voidable as against the Assignee under subsection (1) (2)
4: Any covenant or contract made by any person (hereafter in this section called the settlor) in consideration of his or her marriage, either for the future payment of money for the benefit of the settlor's wife or husband or children, or for the future settlement on or for the settlor's wife or husband or children of property wherein the settlor had not at the time of the marriage any estate or interest, whether vested or contingent, in possession or remainder, shall, if the settlor is adjudged bankrupt and the covenant or contract has not been executed at the commencement of his bankruptcy, be voidable as against the Assignee except so far as it enables the persons entitled under the covenant or contract to claim dividends in the settlor's bankruptcy under or in respect of the covenant or contract, but any such claim to dividends shall be a deferred debt payable in accordance with paragraph (i)
5: Any payment of money (not being a payment of premiums on a policy of life assurance), or any transfer of property made by the settlor in pursuance of a covenant or contract within the meaning of subsection (4)
a: That the payment or transfer was made more than 2 years before the date of the adjudication; or
b: That, at the time of the payment or transfer or at any time thereafter up to the adjudication the settlor was able to pay all his debts without the aid of the money so paid or the property so transferred; or
c: That the payment or transfer was made in pursuance of a covenant or contract to pay or transfer money or property expected to come to the settlor from or on the death of a particular person named in the covenant or contract and was made within 3 months after the time when the money or property came into the possession or under the control of the settlor; but, in the event of any such payment or transfer becoming void, the persons to whom it was made shall be entitled to claim dividends under or in respect of the covenant or contract in like manner as if it had not been executed at the commencement of the bankruptcy.
6: In this section gift
7: The Court may, if it thinks it just and equitable in all the circumstances, take into account past consideration and treat it as being valuable consideration. 1908 No 12 ss 75, 78 UK Act s 42(2), (3)
55: Proceedings where bankrupt has improved property of another person
1: Whenever a person has, without adequate consideration in money or money's worth, erected buildings upon or otherwise improved land or any other property of another person, or has purchased land or other property in another person's name, or has provided money to purchase land or other property in the name or on behalf of another person, or has paid instalments for the purchase or towards the purchase of any land or other property in the name or on behalf of another person, then, if the value of the assets of the first-mentioned person has been reduced thereby, and if—
a: The first-mentioned person is adjudged bankrupt within 2 years thereafter; or
b: The first-mentioned person is not adjudged bankrupt within the said period of 2 years thereafter but is adjudged bankrupt within 5 years thereafter and that other person cannot prove that the bankrupt was at the time of the act referred to or at any time thereafter up to the adjudication able to pay all his debts without the aid of money or other property comprised in the disposition, subject to the provisions of subsection (3) subsection (2)
2: The provisions which shall so apply are as follows:
a: The Court may, on the application of the Assignee, ascertain the value of the improvements, or the amount expended or paid upon or for the land or other property, by or on behalf of the bankrupt (including any payments of legal expenses, interest, rates, and other expenses or charges), and may order the other person to pay the amount so ascertained to the Assignee:
b: If the other person fails to comply with the order, the Court, by the same or a subsequent order, may (in addition to any other power it may have to enforce compliance with the order) direct the Assignee to sell the whole or a sufficient part of the land with improvements thereon or of other property, and to convey or transfer the same to the purchaser; and the Court may make all vesting or other orders necessary for that purpose:
c: The Assignee shall retain the whole or so much of the amount so ascertained as is necessary, along with all other assets in the estate, to pay the creditors in full (including the payment of interest under section 104
3: The Court may refuse to make an order for the payment of the amount calculated in accordance with paragraph (a)
a: The other person mentioned in that subsection acted in good faith and has altered his position in the reasonably held belief that the bankrupt's action was valid and would not be set aside; and
b: In the opinion of the Court it is inequitable to order payment of all or any part of the amount, as the case may be.
4: Nothing in the Land Transfer Act 1952 1908 No 12 ss 76, 77
56: Voidable preferences
1: Every conveyance or transfer of property, every charge made on any property, every obligation incurred, every execution under any judicial proceeding suffered, and every payment made (including any payment made in pursuance of a judgment or order of a Court), by any person unable to pay his debts as they become due from his own money, shall be voidable as against the Assignee, if—
a: It is in favour of any creditor or any person in trust for any creditor with a view to giving that creditor or any surety or guarantor for the debt due to that creditor a preference over the other creditors; and
b: The person making, suffering, paying, or incurring the same is adjudged bankrupt within 2 years after the making, suffering, paying, or incurring of the same.
2: Every conveyance or transfer of property, every charge made on any property, every obligation incurred, every execution under any judicial proceeding suffered, and every payment made (including any payment made in pursuance of a judgment or order of a Court), shall be voidable as against the Assignee, if—
a: It is made, paid, suffered, or incurred by any person unable to pay his debts as they become due from his own money in favour of any creditor or any person in trust for any creditor; and
b: It is made, paid, suffered, or incurred within the period specified in subsection (3) Provided that nothing in this subsection shall apply to any such transaction or any such payment in respect of any liability incurred, or accruing due, during or after the said period.
3: The period referred to in subsection (2) Provided that, if the adjudication is made on a creditor's petition, the period shall be the time between the service on the person of the bankruptcy petition and the adjudication in any case where that is more than one month: Provided also that, if the person is adjudged bankrupt on his own petition while a creditor's petition is pending being heard, the period shall be the time between the service on the debtor of the creditor's petition and the adjudication in any case where that is more than one month. 1908 No 12 s 79(1)
57: Voidable securities
1: Every security or charge over any property of a bankrupt shall be voidable as against the Assignee of the bankrupt's estate if it is executed or given by the debtor within the period commencing 12 months immediately before the filing of a creditor's petition and ending with the adjudication or, if the adjudication takes place on the grantor's own petition, within the period of 12 months immediately preceding the filing thereof: Provided that, if the grantor is adjudged bankrupt on his own petition when a creditor's petition is pending being heard, the period shall be the period commencing 12 months immediately before the filing of the creditor's petition and ending with the adjudication.
2: Subsection (1)
a: 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 grantee of the security or charge to the grantor at the time of or at any time after the execution thereof; or
b: The securing by the grantor of the security or charge of any unpaid purchase money owing by him to the grantee, whether for that property or not, if the instrument for securing the same is executed not later than 21 days after the date of the sale of the property.
3: For the purposes of subsection (2) subsection (1) Provided that nothing in this subsection shall apply to any payments received by any registered bank Reserve Bank of New Zealand Act 1989
4: Subsection (1)
a: Pursuant to an agreement to give the security or charge if the agreement was made before the commencement of the period specified in the said subsection (1)
b: In substitution for an existing security or charge executed or given before the commencement of the said period: Provided that, unless the existing security or charge is one to which subsection (2) subsection (1) 1908 No 12 s 79(2) The words registered bank (3) substituted 1 February 1990 trading bank 187 Reserve Bank of New Zealand Act 1989 The reference to the Reserve Bank of New Zealand Act 1989, in the proviso to subsection (3) substituted 1 February 1990 186(1) Reserve Bank of New Zealand Act 1989
58: Assignee may recover property or value thereof
1: In any case where, under any of the provisions of section 54 (3) sections 56 57 162 section 60 Property Law Act 1952 Part 17
2: Subject to the provisions of subsections (4) (5)
a: Order that the person to whom the disposition was made, or his personal representative, or any person claiming through him (not being a person claiming through him who received the property comprised in the disposition or any part of it or any interest in it, as the case may be, in good faith and for valuable consideration or who claims through such a person), shall transfer to the Assignee or appointee the property or any part of it or any interest in it retained by him:
b: Order that the person to whom the disposition was made, or his personal representative, or any person claiming through him (not being a person claiming through him who received the property comprised in the disposition or any part of it or any interest in it, as the case may be, in good faith and for valuable consideration or who claims through such a person), shall pay to the Assignee or appointee such sum, not exceeding the value of the property when the disposition was set aside, as the Court thinks proper.
3: For the purpose of giving effect to any order under subsection (2)
4: Subject to subsections (5) (6) subsections (2) (3) subsections (2) (3)
5: A disposition that has been made in favour of any person may be set aside pursuant to subsection (1)
6: Recovery by the Assignee or appointee of any property or the value thereof (whether under this section or under any other provision of this Act or under any other enactment or in equity or otherwise) may be denied wholly or in part if—
a: The person from whom recovery is sought received the property in good faith and has altered his position in the reasonably held belief that the transfer or payment of the property to him was validly made and would not be set aside; and
b: In the opinion of the Court it is inequitable to order recovery or recovery in full, as the case may be.
7: Nothing in the Land Transfer Act 1952 1908 No 12 s 79(3) 1963 No 71 s 81 Bankruptcy Act 1949 s 66 (Canada) Subsection (1) amended 1 February 2002 63(3) Property (Relationships) Amendment Act 2001 by omitting the expression section 43(3) of this Act See section 63(5) in any case where a person has been adjudged bankrupt, or there has been or order or election to administer an estate under Part 17 of the Insolvency Act 1967 section 63 Second bankruptcies
59: Procedure on second bankruptcy
1: Notwithstanding anything to the contrary in section 42
a: All the property that may have been acquired by or devolved on the bankrupt since the adjudication in respect of the former bankruptcy and all property that has been acquired by or devolved on the bankrupt since the later bankruptcy and before his discharge from that bankruptcy shall vest in the Assignee of the later bankruptcy: Provided that nothing in this paragraph shall upset any payment or disposition by or with the concurrence of the Assignee in the former bankruptcy:
b: The Assignee in the later bankruptcy shall pay any surplus to the Assignee in the former bankruptcy who shall treat it as an asset in the estate in the former bankruptcy:
c: Where the Assignee in any bankruptcy receives notice of a subsequent petition against the bankrupt, the Assignee shall hold any property then in his possession which has been acquired by or has devolved on the bankrupt since adjudication until the petition has been disposed of, and if on the petition an order of adjudication is made, or if he receives notice that the bankrupt has filed a debtor's petition, he shall transfer all such property or the proceeds thereof (deducting his costs and expenses) to the Assignee in the later bankruptcy.
2: Notwithstanding anything in subsection (1) UK Act s 39
6: Control over person and property of debtor
60: General duties of bankrupt
In addition to every other duty imposed on the bankrupt by this Act or any other enactment or by law, he shall, to the utmost of his power, aid in the realisation of his property and the distribution of the proceeds amongst his creditors; and, more particularly, shall from time to time—
a: Give a complete and accurate list of his property and of his creditors and debtors and such other information as to his property as the Assignee requires; and attend before the Assignee whenever called upon to do so; and, if required to do so by the Assignee, verify any statement by statutory declaration:
b: Disclose to the Assignee as soon as practicable any property which may be acquired by him before his discharge and would be divisible amongst his creditors:
c: Supply to the Assignee such information as he may require regarding his expenditure and sources of income after adjudication:
d: Execute such powers of attorney, conveyances, transfers, deeds, assurances, and instruments, and generally do all such acts and things in relation to his property (whether within or outside New Zealand) and the distribution of the proceeds amongst his creditors, as are required by the Assignee, or prescribed by any regulations or rules made under this Act, or directed by the Court by any order made in reference to any particular bankruptcy, or on any application by the Assignee or any creditor:
e: Deliver on demand all or any of his property that is divisible amongst his creditors and is under his possession or control to the Assignee or anyone authorised by him to take possession of it or any part thereof:
f: Deliver on demand to the Assignee or anyone authorised by him any property that is acquired by him before his discharge:
g: Notify the Assignee immediately in writing of any change of his address, and of any change of his employment and of any change of his name. 1908 No 12 ss 60, 86
61: Bankrupt to give up books, etc, to Assignee and to make out
statement of financial position
1: Immediately upon adjudication the bankrupt shall deliver up to the Assignee, at his office, all books of account, papers, deeds, instruments, and writings relating to his estate in his custody or power, and discover such as are in the custody or power of any other person; and shall furnish from time to time such information and particulars as are necessary to enable the Assignee or any person employed by him to prepare the bankrupt's statement of financial position
2: If so required by the Assignee, the bankrupt shall, within a reasonable time, prepare and deliver to the Assignee full, true, and particular accounts and statements of financial position 1908 No 12 s 59 Section 61 amended 1 October 1997 6(1) Financial Reporting Amendment Act 1997 by substituting the words statement of financial position balance sheet
62: 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:
b: be employed by a relative of the bankrupt or by any company, trust, trustee, or incorporated society, that is managed or controlled by a relative of the bankrupt.
2: Nothing in this section restricts section 151 Companies Act 1993 Subsection (1)(a) amended 1 July 1994 Insolvency Amendment Act 1993 by omitting the words , or become a director of Subsection (2) substituted 1 July 1994 Insolvency Amendment Act 1993 Section 62 substituted 3 May 2001 4 Insolvency Amendment Act 2001
63: Court may order debtor to be arrested
1: On the application of any creditor made at any time after the filing of a petition against a debtor and before adjudication, or on the application of the Assignee made at any time after he has been appointed an interim receiver or after the order of adjudication and before the discharge of the bankrupt, if it appears that there is probable ground for believing that the debtor is about to go abroad or quit his place of residence either temporarily or permanently
2: Any person so arrested may apply to the Court at any time for a summons against the Assignee or creditor to show cause why he should not be discharged from custody. 1908 No 12 s 88 Subsection (1) amended 3 May 2001 5 Insolvency Amendment Act 2001 by inserting the words either temporarily or permanently
64: Court may order debtor's property to be seized
1: On the application of any creditor made at any time after the filing of a petition against a debtor and before adjudication, or on the application of the Assignee made at any time after he has been appointed an interim receiver, if it appears that there is probable ground for believing—
a: That the debtor is about to remove any of his property with a view of preventing or delaying possession being taken of the property for the purposes of this Act, or that he has concealed or is about to conceal or destroy any of his property or any of his books, documents, or writings; or
b: That the debtor is about to go abroad or has gone abroad or quit his place of residence either temporarily or permanently the Court may order that any of the property of the debtor (wheresoever it may be found) shall be seized and kept until such time as the Court directs; and, upon the making of such an order, all the provisions of section 65
2: Any person whose property is seized under subsection (1) 1908 No 12 s 88 Subsection (1)(b) amended 3 May 2001 6 Insolvency Amendment Act 2001 by inserting the words either temporarily or permanently
65: Seizure of bankrupt's property
1: If authorised by a warrant issued by the Court, the Assignee or any other person, together with such assistants as may be necessary, may seize any part of the property of a bankrupt in the custody or possession of the bankrupt or of any other person, and, with a view to such seizure, break open any building or room of the bankrupt where the bankrupt is supposed to be, or any building or receptacle of the bankrupt where any of his property is supposed to be, and seize and take possession of his property therein.
2: Where there is reason to believe that any property of the bankrupt, or any book, paper, or document relating to the affairs or property of the bankrupt, is concealed in any building, aircraft, ship, carriage, vehicle, premises, or place, the Court may, if it thinks fit, grant a search warrant to the Assignee or any other person authorising the Assignee or other person named in the warrant, together with such assistants as may be necessary, to enter and search the building, aircraft, ship, carriage, vehicle, premises, or place and to seize and take possession of any such property or books, papers, or documents, and (if necessary) to use force for making entry, whether by breaking open doors or otherwise, and to break open any box or receptacle therein or thereon by force if necessary. 1908 No 12 s 89
66: Bankrupt refusing to quit tenement
Notwithstanding anything in the Land Transfer Act 1952 District Court 1908 No 12 s 90
67: Redirection to Assignee of letters of bankrupt
1: The Court, upon the application of the Assignee, may from time to time order that, for such time as it thinks fit, postal articles addressed to the bankrupt shall be redirected, sent, or delivered by the Postmaster-General to the Assignee, or otherwise as the Court directs. Any such articles may be opened by the Assignee, and any property therein belonging to the bankrupt may be retained by the Assignee and shall form part of the bankrupt's estate.
2: The Court, upon the application of an Assignee appointed receiver and manager of the property of a debtor under section 27 section 27 1908 No 12 s 91
68: Assignee may examine persons respecting bankrupt or his property
1: The Assignee may, at any time before or after the making of the order of discharge, summon to appear before him and examine on oath—
a: The bankrupt; or
b: The wife or husband of the bankrupt; or
c: Any other person known or suspected to have in his possession any of the property, or any book, paper, or document relating to the affairs or property, of the bankrupt, or supposed to be indebted to the bankrupt, or whom he thinks capable of giving any information respecting the bankrupt, his trade, dealings, or property, or concerning his income from any source, or his expenditure— and may require the person so summoned to produce and surrender to the Assignee any book, paper, or document in his custody or power relating to the dealings or property of the bankrupt.
2: The Assignee may, instead of summoning before himself and examining the bankrupt or such other person as aforesaid, summon him to appear before a District Court Judge District Court Judge
3: The examination of the bankrupt and every such person shall be committed to writing, and the bankrupt or other person, on being required to do so, shall sign the same.
4: If the bankrupt or any other person so summoned fails without reasonable excuse to come before the Assignee or District Court Judge District Court Judge
5: All expenses occasioned by such apprehension and examination before the Court may be ordered to be paid by the person apprehended and examined, if it appears to the Court that the evidence given by him was necessary for the purposes of the estate.
6: The bankrupt, and every other person attending on any such summons, may have such expenses allowed to him or them as may be prescribed by regulations made under this Act, and no person so summoned to attend shall be liable to any penalty or punishment for failing to obey the summons unless the prescribed expenses of his attendance are first paid or tendered to him.
7: Save with the consent of the Court, on the application of the Assignee and subject to such conditions as the Court may prescribe, it shall not be lawful for any person to publish a report of any examination held before an Assignee or District Court Judge
8: A person in respect of whose property an Assignee has been appointed a receiver and manager under section 27 1908 No 12 s 92 The words District Court Judge substituted Magistrate 1 April 1980 18(2) District Courts Amendment Act 1979
68A: Assignee may obtain documents
The Assignee may, by notice in writing, require the bankrupt, the bankrupt's spouse, or any other person to deliver to the Assignee any book, paper, or document relating to the dealings or property of the bankrupt in that person's possession or under that person's control as the Assignee requires. Section 68A inserted 3 May 2001 7 Insolvency Amendment Act 2001
69: If Assignee or creditors desire it, bankrupt to be publicly examined
1: If the Assignee, at any time after adjudication and before the making of an absolute order of discharge, files in the Court a statement to the effect that it is desirable that the bankrupt should submit to a public examination, or if the creditors, at any meeting before the making of an absolute order of discharge, pass an ordinary resolution to the like effect, and a copy of the resolution certified by the Assignee or chairman is filed in the Court, the Court shall hold a public sitting for the examination of the bankrupt as soon as practicable after the expiration of 7 days after the date on which notice of the filing of the statement or certified resolution is served on the bankrupt; and the bankrupt shall attend thereat, and shall be examined as to his conduct, dealings, and property.
2: At least 7 days' notice of the intention to hold the examination shall be advertised in the prescribed manner by the Assignee and shall be sent to the creditors.
3: Before any such examination, the Assignee shall file in the Court a full report on the estate, and the conduct of the bankrupt, and on all other matters with which it is desirable for the purposes of this Act that the Court should be acquainted.
4: The Assignee, or any creditor who has proved his claim, or the counsel for the Assignee or for any creditor who has proved his claim, may, without any notice to the bankrupt, examine him.
5: The bankrupt shall be examined upon oath, and it shall be his duty to answer all such questions as the Court puts or allows to be put to him.
6: Such notes of the examination as the Court thinks proper shall be taken down in writing, and shall be read over to and signed by the bankrupt, and they shall be open to the inspection of any creditor or his solicitor at all reasonable times.
7: The bankrupt shall not be deemed to have passed his public examination until the Court, by order, declares that his affairs have been sufficiently investigated and that his examination is finished.
8: The provisions of subsections (4) (5) (6) 1908 No 12 s 124
70: Privilege and representation of witnesses
1: Any bankrupt or other person who is being examined by the Court, or by an Assignee or a District Court Judge
2: A statement made by any bankrupt or person in answer to any question put by or before the Court, or an Assignee or a District Court Judge paragraph (c)
3: Whenever a bankrupt or other person is examined by the Court, or by an Assignee or a District Court Judge 1908 No 12 s 93 The words District Court Judge substituted Magistrate 1 April 1980 18(2) District Courts Amendment Act 1979
7: Administration of bankrupt's estate
71: Assignee's general powers
Subject to the provisions of this Act, the Assignee may—
a: Hold property of every description:
b: Bring, institute, or defend any action or other legal proceedings relating to the property of the bankrupt, and also, with the leave of the Court in which any proceedings were commenced by the debtor before adjudication, continue the proceedings in his own name:
c: Refer any dispute to arbitration, compromise all debts, claims, and liabilities, whether present or future, certain or contingent, liquidated or unliquidated, subsisting or supposed to subsist between the bankrupt and any person who may have incurred any liability to the bankrupt, on the receipt of such sums, payable at such times, and generally on such terms as are agreed upon:
d: Make such compromise or other arrangements as are thought expedient with creditors, or persons claiming to be creditors, in respect of any debts provable under the bankruptcy:
e: Accept as the consideration for the sale of any property of the bankrupt a sum of money payable at a future time, subject to such conditions as to security and otherwise as the Assignee thinks fit:
f: Make such compromise or other arrangements as are thought expedient with respect to any claim arising out of or incidental to the property of the bankrupt, made or capable of being made on the Assignee by any person or by the Assignee on any person:
g: Carry on the business of the bankrupt as far as is necessary or expedient for the beneficial disposal of the same, and for that purpose may employ and pay the bankrupt or any other person:
h: Expend money of the bankrupt's estate for the repair, maintenance, upkeep, or renovation of the property of the bankrupt, whether or not the work is necessary for the purpose of the salvage of the property:
i: Borrow any money and mortgage any property of the bankrupt:
j: Employ any person to transact any business or do any act required to be transacted or done in the course of administration of a bankruptcy, including the receipt and payment of money:
k: Prove and draw a dividend in respect of any debt due to the bankrupt:
l: Divide in its existing form amongst the creditors according to its estimated value any property which from its peculiar nature or other special circumstances cannot readily or advantageously be sold:
m: Give receipts and execute discharges and releases for any money received by him, which receipts, discharges, or releases shall effectively discharge the person paying the money from all responsibility in respect of the application thereof, and execute any powers of attorney, deeds, and other instruments for the purpose of carrying into effect the provisions of this Act:
n: Exercise in relation to the bankrupt's property any power conferred on a trustee by the Trustee Act 1956
o: Exercise any authority or power or do any act in relation to the bankrupt's property which the bankrupt could have exercised or done if he were not bankrupt:
p: From time to time appoint an agent by power of attorney or otherwise to act for him, either in or out of New Zealand, in respect of any particular estate or estates, and delegate to any such agent all or any of the powers hereby conferred upon the Assignee in respect of the estate or of any bankrupt, and from time to time revoke any such appointment and fix the remuneration for any such agent, which shall be paid out of the estate: Provided that the powers conferred upon the Assignee by this section shall be in furtherance of and not in limitation of all other powers vested in him. 1908 No 12 ss 25, 63, 70
72: Power of Assignee to sell
1: Subject to the provisions of this Act, the Assignee may sell the whole or any part of the property of the bankrupt by public auction or public tender on such terms and conditions as he thinks fit, with power to buy in at any auction or to rescind or vary any contract for sale on such terms as he thinks fit, and with power also to sell the whole thereof to any person or to sell the same in parcels and in any order.
2: In addition to the powers given by subsection (1)
a: Any perishable property:
b: Any property offered for sale by public auction or public tender and not sold:
c: Any property which, by reason of its nature, situation, value, or other special circumstances, he considers it unnecessary or inadvisable to sell by public auction or public tender:
d: Any property for which authority has been given by a resolution of creditors to sell by private contract: Provided that the sale shall be in accordance with the terms of the authority so conferred:
e: Securities in any company, securities of the Government of New Zealand, and securities issued by any local authority person authorised to undertake trading activities on a registered exchange's securities market section 2(1) Securities Markets Act 1988
3: The Assignee may surrender to a building society in accordance with the rules of the society any shares of the bankrupt in the society.
4: Except in the case of perishable property or any property the sale of which might, in the opinion of the Assignee, be prejudiced from any cause by the delay, none of the property of the bankrupt shall be sold until after the date fixed for the first meeting of creditors: Provided that the Assignee may, after consulting with any creditor or creditors, sell any property before the date fixed for the first meeting if expenses will be incurred by the delay.
5: Where a document is made or executed in professed exercise of the power to sell conferred by this section, the title of any person acquiring title thereunder shall not be impeachable except on the ground of fraud, or be affected on the ground that no case has arisen to authorise the sale, or that the power was otherwise improperly or irregularly exercised. 1908 No 12 s 63(a) 1927 No 41 s 4 Section 72(2)(e) amended 24 November 2009 section 23(3) Securities Markets Amendment Act 2009 Subsection (2)(e) amended 1 December 2002 30 Securities Markets Amendment Act 2002 by substituting the words person authorised to undertake trading activities on a registered exchange's market (within the meaning of section 2(1) of the Securities Markets Act 1988 member of a registered stock exchange Subsection (2)(e) amended 1 July 2003 262 Local Government Act 2002 by omitting the words within the meaning of Part 1 of the Local Authorities Loans Act 1956 See sections 273 to 314
73: No lien over bankrupt's books, etc
1: No person shall be entitled as against the Assignee to withhold possession of any deed or instrument belonging to the bankrupt, or the books of account or any accounts, receipts, bills, invoices, or other papers of a like nature relating to the accounts or trade dealings or business of the bankrupt or to claim any lien thereon.
2: Any person (other than the wife or husband of the bankrupt) to whom a debt is owing in respect of services performed in connection with the books of account of the bankrupt or any deed or instrument over which that person would but for subsection (1) section 104(1)(d)(v) 1941 No 26 s 4 1908 No 12 s 174(5) Subsection (2) amended 29 May 2004 3 Insolvency Amendment Act 2004 by substituting the expression section 104(1)(d)(v) subparagraph (iii) of paragraph (d) of subsection (1) of section 104 of this Act
74: Assignee may exercise bankrupt's right to transfer stock, etc
1: When any part of the property of the bankrupt consists of securities in any company, securities of the Government of New Zealand, securities issued by any local authority
2: Where consent is required to the transfer of any such securities of a company, then, notwithstanding anything expressed to the contrary in the articles of association or the constitution
3: Where in accordance with the articles of association or the constitution of a company any such securities must be offered for sale to a member or shareholder of the company, the member or shareholder shall, if he or she agrees to purchase, pay a reasonable price therefor.
4: Where, in accordance with section OD 1 Income Tax Act 2004 or shareholder 1908 No 12 s 85 Subsection (1) amended 1 July 2003 262 Local Government Act 2002 by omitting the words within the meaning of Part 1 of the Local Authorities Loans Act 1956 See sections 273 to 314 Subsection (2) amended 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994 by inserting the words within the meaning of the Companies Act 1955 Companies Act 1993 Subsection (3) substituted 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994 Subsection (4) amended 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994 by inserting the words or shareholder Subsection (4) amended 1 April 1995 Income Tax Act 1994 by substituting the words section OD 1 of the Income Tax Act 1994 section 7 of the Income Tax Act 1976 replaced 1 April 1977 Subsection (4) amended 1 April 2005 YA 2 Income Tax Act 2004 by substituting the words Income Tax Act 2004 Income Tax Act 1994
75: Disclaimer of onerous property other than shares
1: Where any property of the bankrupt (excluding shares in a company), whether acquired before or after the adjudication, is unsaleable or not readily saleable, the Assignee, notwithstanding that he has endeavoured to sell or has taken possession of the property, or exercised any act of ownership in relation thereto, but subject to the provisions of this section, may, by writing signed by him and filed in the Court within 12 months after the adjudication or such extended period as may be allowed by the Court, disclaim the property: Provided that, where any such property has not come to the knowledge of the Assignee within one month after the adjudication, or was not acquired by the bankrupt until after adjudication, he may disclaim that property at any time within 12 months after he has become aware thereof or within such extended period as may be allowed by the Court.
2: The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests, and liabilities of the bankrupt and his property in or in respect of the property disclaimed, and shall also discharge the Assignee from all personal liability in respect of the property disclaimed as from the time when the property vested in him, but shall not, except so far as is necessary for the purpose of releasing the bankrupt and his property and the Assignee from liability, affect the rights or liabilities of any other person.
3: The Assignee shall not be entitled to disclaim any property in pursuance of this section in any case where an application in writing has been made to the Assignee by any person who has any interest in the property requiring him to decide whether he will disclaim or not, and the Assignee has, for a period of 28 days after the receipt of the application, or such extended period as may be allowed by the Court, failed to give notice whether he disclaims the property or not.
4: Subject to subsection (7)
a: The Assignee; or
b: Any person who claims any interest in any disclaimed property; or
c: Any person who is under any liability not discharged by this Act in respect of any disclaimed property— may, on hearing such persons as the Court thinks fit, make an order for the vesting of the property or the delivery thereof in or to any person entitled thereto, or in or to any person to whom it seems just that it should be delivered by way of compensation for any liability referred to in paragraph (c)
5: On any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance, transfer, or assignment for the purpose, subject and without prejudice to any underlease, subtenancy, or mortgage thereof, unless the underlessee, subtenant, or mortgagee consents to the vesting order.
6: The Court may, on any such application as aforesaid, make such orders with respect to fixtures, tenants' improvements, and other matters arising out of the tenancy of any property disclaimed as the Court thinks just.
7: Where the property disclaimed is a leasehold interest in any property, the Court shall not make a vesting order in favour of any person, except upon the terms of making the person subject to the same liabilities and obligations as the bankrupt was subject to under the lease in respect of the property at the date of adjudication.
8: The rights and powers of the lessor of any disclaimed land shall not be prejudiced or affected by the disclaimer or by any vesting order, or by anything contained in this section, except as expressly provided in this section.
9: Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the extent of the injury, and may accordingly prove the same as a debt under the bankruptcy. 1908 No 12 s 84
76: Termination of contracts
1: If the bankrupt is party to any contract, the Assignee may,—
a: Subject to the terms of the contract and to all relevant rules of law, continue the contract; or
b: Terminate the contract by giving notice of termination to the other party and filing a copy thereof in the Court.
2: If the Assignee terminates the contract he shall have the same rights as the bankrupt would have had if the bankrupt had then terminated the contract.
3: The Assignee shall not be entitled to terminate any contract in pursuance of this section in any case where application in writing has been made to the Assignee by any party to the contract requiring him to decide whether to terminate the contract or not, and the Assignee has, for a period of 28 days after the receipt of the application or such extended period as may be allowed by the Court, failed to give notice whether he is terminating the contract or not. If the Assignee, after any such application, does not within the said period or extended period terminate the contract he shall be deemed to have continued it.
4: The Court may, on the application of any person who is, as against the Assignee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order terminating the contract on such terms as to payment by or to either party of damages for the non-performance of the contract or otherwise as the Court considers equitable. Any damages payable under the order to any such person may be proved by him as a debt under the bankruptcy.
5: Any person injured by the termination of a contract under this section shall be deemed to be a creditor of the bankrupt to the extent of the injury, and may accordingly prove the same as a debt under the bankruptcy. 1908 No 12 s 84
77: Termination of a contract otherwise than by Assignee
Where a bankrupt is a party to a contract and that contract is on the adjudication terminated by the other party to the contract under the provisions of the contract, then, notwithstanding anything to the contrary in the contract, the Assignee shall be entitled to recover from the other party such sum as the Court thinks just and equitable in all the circumstances, not exceeding the amount by which the amount payable to the bankrupt under the contract exceeds the aggregate of the amount paid to the bankrupt plus the cost of completion of the contract and a reasonable penalty for delay in completion of the contract.
78: Disclaimer of liability under shares
1: The Assignee may, by serving notice of disclaimer on the company and filing a copy thereof in the Court, disclaim liability under any shares owned by the bankrupt in any company, whether the shares are acquired by the bankrupt before or after his adjudication.
2: The disclaimer shall operate to determine, as from the disclaimer, the liabilities of the bankrupt and his property in respect of the shares, and shall also discharge the Assignee from all personal liability in respect of the shares as from the time when the shares vested in him, but shall not, except so far as is necessary for the purpose of releasing the bankrupt and his estate and the Assignee from liability, affect the rights or liabilities of any other person.
3: The Assignee shall not be entitled to disclaim liability under any shares in pursuance of this section in any case where an application in writing has been made to the Assignee, by the company or any person having any interest in the shares, requiring him to decide whether he will disclaim or not, and the Assignee has, for a period of 28 days after the receipt of the application or such extended period as may be allowed by the Court, failed to give notice whether he disclaims liability under the shares or not.
4: Upon disclaimer the Assignee may, subject to the provisions of any other Act and to the rules of the company, transfer the shares—
a: To any person having an interest in them; or
b: To the bankrupt (with his consent), if no person has an interest in them or if the person having an interest in them declines to accept the transfer, and the bankrupt shall thereafter be entitled, as against the Assignee, to retain the shares and any money derived from the sale thereof.
5: If no transfer takes place pursuant to subsection (4)
6: In any case where, because the bankrupt has ceased to be a director of the company on adjudication, the number of the directors has fallen below the minimum required by law or by the company's articles of association or constitution subsection (4) subsection (5)
7: Where the Assignee has disclaimed liability under any shares in a company that has not been put into liquidation, the company may prove for the amount of calls made before adjudication in respect of the shares held by the bankrupt and not paid, and may also prove for the value, estimated as the Assignee and the company may agree or failing agreement as the Court directs, of the liability for calls to be made in respect of the shares within one year after the adjudication.
8: In estimating any such liability in the case of a mining company registered under the Companies Act 1955 1908 No 12 ss 84, 111 Subsection (6) amended 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994 by inserting the words or constitution Subsection (7) substituted (8) inserted 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994
79: Liability for rentcharge on bankrupt's land after disclaimer
1: Where, on a disclaimer under section 75 subsection (2)
2: This section shall not affect any liability in respect of sums accruing due after the Crown or the said other person, or some person claiming through or under the Crown or the said other person, has taken possession or control of the land or has entered into occupation thereof.
3: This section shall apply to land vesting and sums accruing due before, as well as after, the commencement of this Act. 1908 No 12 s 84A 1956 No 60 s 10
80: Assignee's duties in respect of land subject to a mortgage
1: Where any interest in land is owned by the bankrupt and is subject to a mortgage or charge, the Assignee, if he does not disclaim, shall either—
a: Register under the Land Transfer Act 1952
b: Give notice to the mortgagee or other person entitled under the charge that he does not intend so to register transmission or cannot register transmission.
2: Notice under paragraph (b)
3: In any case where the Assignee does not register transmission, whether or not notice has been given in accordance with paragraph (b) (1)
81: Banking and investment of money received by Assignee
1: The Assignee shall have a bank account into which he shall pay all money received by him in a manner prescribed by regulations made under this Act.
2: The Assignee may, with the approval of the Controller and Auditor-General, invest money not required for immediate disbursement in respect of a particular estate in any investments so approved. Any interest or dividends so accruing shall be credited to that estate. 1908 No 12 s 119 1931 No 5 18 1933 No 41 50
82: Bankruptcies involving partnerships
1: Under every adjudication made against 2 or more persons jointly, distinct accounts shall be kept by the Assignee of the joint estate and also of the separate estate of each bankrupt; and the joint estate shall be applied in the first place in satisfaction of the debts due by the bankrupts jointly, and the separate estate shall be applied in the first place in satisfaction of the debts of the separate creditors; and in case there is a surplus of the separate estate, that surplus shall be carried to the account of the joint estate; and in case there is a surplus of the joint estate, that surplus shall be carried to the account of the separate estate of each bankrupt in proportion to the right and interest of each bankrupt in the joint estate.
2: When a member of a partnership is adjudged bankrupt, the Court may authorise the Assignee to commence and prosecute any action in the names of the Assignee and of the bankrupt's partner; and any release by the partner of the debt or demand to which the action related shall be void; but notice of the application for authority to commence the action shall be given to him, and he may show cause against it, and on his application the Court may, if it thinks fit, direct that he shall receive his proper share of the proceeds of the action, and if he does not claim any benefit therefrom he shall be indemnified against costs in respect thereof as the Court directs. 1908 No 12 ss 72, 73
83: Bankruptcy discharges liability of bankrupt and certain employees
1: Subject to subsections (2) (3) Apprenticeship Act 1983
2: If the employee so requests, the bankrupt shall, at the cost of the employee, assign the employee to any person specified by the employee in that behalf; and any service of the employee with that person shall, to the extent of the time of that service, be deemed to have been good service under the contract between the bankrupt and the employee.
3: If, after the bankrupt has obtained a discharge, the Court is of the opinion that the bankrupt is in a position to accept the services of the employee for the remainder of the term of the contract between them, the Court may, on the application of the employee, order the term of the training to be completed from a date specified in the order, upon the same terms as originally provided. Section 83 substituted 1 November 1983 Apprenticeship Act 1983
84: Discretion of Assignee
1: Subject to the provisions of this Act, the Assignee shall, in the administration of the property of the bankrupt, have regard to any resolution of the creditors at any meeting.
2: In any case where the Assignee or any creditor is of the opinion that any such resolution conflicts with this Act or any rule of law or is unjust or is not fair or equitable, the Assignee or any creditor may, if he thinks fit, apply to the Court for directions in the matter.
3: Subject to the provisions of this Act, the Assignee shall use his own discretion in the management of the estate. 1908 No 12 s 64
85: Assignee may obtain directions of Court
1: The Assignee may apply to the Court for its opinion, advice, or direction on any question respecting the administration of the property of the bankrupt or its distribution among his creditors, or respecting the powers, duties, and discretions, of the Assignee.
2: Any Assignee acting under any opinion, advice, or direction of the Court shall be deemed to have discharged his duty as Assignee in the subject-matter of the application, notwithstanding that the order giving the opinion, advice, or direction is subsequently invalidated, overruled, set aside, or otherwise rendered of no effect: Provided that this subsection shall not extend to indemnify any Assignee in respect of any act done in accordance with any such opinion, advice, or direction if he has been guilty of any fraud or wilful concealment or misrepresentation in obtaining the opinion, advice, or direction or in acquiescing in the Court making the order giving the opinion, advice, or direction. 1908 No 12 s 65 1956 No 61 69
86: Appeal from decision of Assignee
If the bankrupt or any creditor or any other person is aggrieved by an act or decision of the Assignee, he may, within 21 days from the date of that act or decision or within such further period as the Court allows, apply to the Court, and the Court may confirm, reverse, or modify the act or decision complained of, and make such order as it thinks fit. 1908 No 12 s 66
8: Proofs of debt
87: Provable debts
1: Except as provided in subsections (2) (3)
2: Any fine or penalty imposed or order for the payment of money made pursuant to any conviction or under section 42 of the Criminal Justice Act 1954 or section 19 Criminal Justice Act 1985 or section 106 Sentencing Act 2002
3: Where a person has been adjudged a bankrupt before the commencement of this Act, no debt or liability which would not have been provable in the bankruptcy if this Act had not been passed shall be provable in the bankruptcy. 1908 No 12 s 98 Subsection (2) amended Criminal Justice Act 1985 by inserting the words or section 19 of the Criminal Justice Act 1985 Subsection (2) amended 30 June 2002 186 Sentencing Act 2002 by inserting the words or section 106 of the Sentencing Act 2002 Criminal Justice Act 1985 See sections 148 to 160 clause 2 Sentencing Act Commencement Order 2002
88: Creditors to prove upon adjudication
1: Every creditor shall prove his debt, whether a preferential claim or not, as soon as may be after the making of the order of adjudication.
2: A debt may be proved in such manner as may be prescribed by regulations made under this Act.
3: Subject to section 89
4: Every creditor who has lodged a proof shall be entitled to see and examine the proofs of other creditors before the first meeting and at all reasonable times.
5: A creditor may from time to time amend or withdraw his proof. Every such amendment shall be subject to the same formalities as the original proof. 1908 No 12 s 100
89: Assignee to examine proofs and admit or reject
1: The Assignee shall have power to admit or reject proofs either wholly or in part, and he shall examine every proof and the grounds of the debt and, as soon as is convenient, admit it or reject it in whole or in part, or require further evidence in support of it.
2: The Assignee shall have power to summon before him, and to examine on oath or otherwise, any person who has tendered or made a proof, or who has made a declaration or statement, and may also summon before him any such person or any person capable of giving evidence concerning any such proof or the debt sought to be proved; and, if any person so summoned fails to attend, or refuses to be sworn or to give evidence, subsections (4) (5)
3: If the Assignee rejects a proof, he shall forthwith serve notice on the creditor of the grounds of the rejection.
4: Within 21 days, or within such further time as the Court allows, after the Assignee has served notice on any creditor of the rejection of his proof, that creditor may apply to the Court to reverse or modify the decision, and the Court, on the hearing of the application, may reverse or modify the decision in whole or in part or uphold it. If no application is made under this subsection, the creditor shall have no right to prove for the debt or claim in respect of which the proof has been disallowed.
5: The Court may, if it thinks that a proof has been improperly admitted, on the application of the Assignee or the bankrupt or any creditor, after notice to the creditor who made the proof, expunge the proof or reduce its amount.
6: If the Assignee fails to decide upon the admission or rejection of a proof for 14 days after notice to decide upon it has been given to him by the bankrupt or any creditor, the Court may, on the application of the bankrupt or that creditor, admit or reject the proof or make such other order as it thinks fit.
7: The Assignee shall be a party to any application under any of the provisions of subsections (4) to (6)
8: If a proof is for a sum of not more than $200,000, an application under any of subsections (4) to (6)
a: the High Court Rules sections 71 to 78 District Courts Act 1947 subsection (1)
b: the provisions of the District Courts Act 1947
c: with the leave of the High Court, any party may appeal to the Court of Appeal from a decision of the High Court under this subsection.
9: Where the application is transferred to or heard by the High Court subsection (2)
10: In any proceedings in a Court under this section, the Court before which the proceedings are heard may, if it thinks fit,—
a: Allow any costs of any creditor to be added to his proof of debt:
b: Allow any costs of any party to be paid out of the bankrupt's estate:
c: Order any costs to be paid by any party to the proceedings other than the Official Assignee. 1908 No 12 s 101 Subsection (8) amended 16(1) District Courts Amendment Act 1979 by substituting the expression $12,000 $2,000 increased 1 July 1992 District Courts Amendment Act 1989 19(1) District Courts Amendment Act 1991 In subsection (8) District Court substituted Magistrate's Court 1 April 1980 18(2) District Courts Amendment Act 1979 In subsections (8) (9) High Court substituted Supreme Court 1 April 1980 12 Judicature Amendment Act 1979 Subsection (8) substituted 24 November 2003 4 District Courts Amendment Act 2002 See section 5 clause 2 District Courts Amendment Act Commencement Order 2003
90: Proof by secured creditors
1: If a secured creditor realises his security, he may prove for the balance due to him, after deducting the net amount realised.
2: If a secured creditor surrenders his security to the Assignee for the general benefit of the creditors, he may prove for his whole debt.
3: A secured creditor who has so surrendered his security may, with the leave of the Court or Assignee and subject to such terms and conditions as to costs or otherwise as the Court or Assignee thinks fit, at any time before the Assignee has realised the property secured—
a: Withdraw the surrender and rely on his security; or
b: Submit a fresh proof of debt.
4: If a secured creditor does not either realise or surrender his security, he shall, before ranking for dividend, state in his proof the particulars of his security, the date when it was given, and the value at which he assesses it, and shall be entitled to receive a dividend only in respect of the balance due to him after deducting the value so assessed.
5: Where a security is so valued—
a: The Assignee may at any time redeem it on payment to the creditor of the assessed value:
b: If the Assignee is dissatisfied with the value at which a security is assessed, he may require that the property comprised in any security so valued be offered for sale at such time and on such terms and conditions as may be agreed on between the creditor and the Assignee or, in default of agreement, as the Court may direct; and if the sale be by public auction the creditor, or the Assignee on behalf of the estate, may bid or purchase: Provided that the creditor may at any time, by notice in writing, require the Assignee to elect whether he will or will not exercise his power of redeeming the security or requiring it to be realised, and if the Assignee does not, within 6 months after he receives the notice, signify in writing to the creditor his election to exercise the power, he shall not be entitled to exercise it; and the interest in the property comprised in the security which is vested in the Assignee shall vest in the creditor, and the amount of his debt shall be reduced by the amount at which the security has been valued.
6: Where a creditor has so valued his security, he may at any time amend the valuation and proof on showing to the satisfaction of the Assignee, or the Court, that the valuation and proof were made in good faith on a mistaken estimate or that the security has diminished or increased in value since its previous valuation; but every such amendment shall be made at the cost of the creditor, and upon such terms as the Court shall order, unless the Assignee shall allow the amendment without application to the Court.
7: Where a valuation has been amended in accordance with subsection (6)
8: If a creditor after having valued his security subsequently realises it, or if it is realised under the provisions of subsection (5)
9: If a secured creditor does not comply with the foregoing provisions of this section he shall be excluded from all share in any dividend.
10: Subject to the provisions of subsection (5) UK Act Second Schedule rules 10–18 1908 No 12 s 102
91: Goods on hire purchase
1: In this section,—
a: cash price creditor debtor goods section 2 Credit (Repossession) Act 1997
b: hire purchase agreement section 2(1) Administration Act 1969
c: purchaser
2: Subsection (3)
3: The creditor must not, without the consent in writing of the Assignee, sell or dispose of the goods or part with possession of the goods (except for the purposes of storage or repair) until after the expiration of 1 month from the date on which the creditor serves on the Assignee the notice required to be served on debtors under section 20 Credit (Repossession Act) 1997
4: Notwithstanding anything in the Credit (Repossession) Act 1997
a: At any time within 1 month from the date of the service on the Assignee of the notice mentioned in subsection (3) section 30
b: At any time before the creditor sells or agrees to sell the goods pursuant to section 25 section 31
5: If a creditor has, either before or after the adjudication of the debtor, taken possession of any goods comprised in a hire purchase agreement and the Assignee has not exercised, in relation to the goods, the powers conferred on the Assignee by subsection (4) section 35 Credit (Repossession) Act 1997 section 20 section 33 sections 20 to 36
6: The creditor may assign the goods to the Assignee if, at the time of the adjudication of a debtor who is the purchaser of any goods comprised in a hire purchase agreement, the creditor has not taken possession of the goods, or has taken possession of the goods and not sold or disposed of or parted with possession of them, and in that event the creditor is entitled to prove for the net balance due to the creditor under the agreement. Section 91 substituted 1 August 1972 Hire Purchase Act 1971 Section 91 substituted 1 July 1998 46 Credit (Repossession) Act 1997 Subsection (1) substituted 1 April 2005 139 Credit Contracts and Consumer Finance Act 2003 See sections 141 to 143
92: Trade discounts
A creditor proving his debt shall deduct therefrom all trade discounts which he would otherwise have given if the debtor had not become bankrupt. 1908 No 12 s 103
93: Set-off
Where mutual credit has been given by the bankrupt and any other person, or where there are mutual debts between the bankrupt and any other person, or where any person entitled to prove in respect of any debt or demand is indebted or liable to the bankrupt in respect of any debt or demand, the account between the bankrupt and that person shall be stated, and one debt or demand may be set against another, and no more than appears due on either side on the balance of account shall be claimed or paid on either side: Provided that a person shall not be entitled under this section to claim the benefit of any set-off against the property of a bankrupt where he had, at the time of giving credit to the bankrupt, notice of an available act of bankruptcy committed by the bankrupt; and a creditor claiming the benefit of a set-off shall, in his proof, declare that he had at the time of giving credit no notice of such an act of bankruptcy. 1908 No 12 s 104
93A: Definitions relating to set-off under netting agreement
In this Act, unless the context otherwise requires,— Bank Bilateral netting agreement
a: That on the occurrence of an event specified in the agreement, all or any of those transactions must (or may, at the option of a party) be terminated and—
i: An account taken of all money due between the parties in respect of the terminated transactions; and
ii: All obligations in respect of that money 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
b: 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 prior to 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
c: 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 debit to the party having a net credit;— but does not include any bilateral netting agreement that is part of a multilateral netting agreement Clearing house Multilateral netting agreement
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
b: 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: Netted balance Netting agreement Recognised clearing house section 310K Companies Act 1993 Recognised multilateral netting agreement Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93B: Application of set-off under netting agreement
1: Sections 93A to 93I
a: To a netting agreement—
i: Made in or evidenced by writing; and
ii: In respect of which the application of sections 93A to 93I 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 93A to 93I
a: Any disposal of rights under a transaction that is subject to a netting agreement in contravention of a prohibition in the netting agreement; or
b: The creation of a charge or other interest in respect of the rights referred to in paragraph (a) Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93C: Calculation of netted balance
If a person who is a party to a netting agreement is bankrupt,—
a: Any netted balance payable by or to the bankrupt must be calculated in accordance with the netting agreement; and
b: 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. Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93D: Mutuality required for transactions under bilateral netting agreements
Sections 93A to 93I Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93E: When mutuality required for transactions under recognised multilateral netting agreements
1: Sections 93A to 93I
2: Despite subsection (1) sections 93A to 93I
a: Those transactions do not constitute mutual credits or mutual debts; and
b: A party to any of those transactions is acting as a trustee for another person; and
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. Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93F: Application of set-off under
section 93
1: Section 93 sections 93A to 93I
2: However, a netted balance is to be treated as an amount to which section 93 Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93G: Transactions under netting agreement and voidable preferences
1: Nothing in sections 93A to 93I section 56
2: For the purposes of section 56
a: 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:
b: A netting agreement entered into by a bankrupt to the extent that the effect of entering into the netting agreement is to reduce any amount that was owing by or to the bankrupt at the time the bankrupt entered into the agreement. Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93H: Set-off under netting agreement not affected by notice under
section 58 The filing of a notice under section 58 section 93C section 58 Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999
93I: Disclaimer of onerous property and termination of netting agreement not permitted
1: The Assignee must not—
a: disclaim, under section 75 78
b: terminate, under section 76
c: if the bankrupt is a participant in a designated payment system, disclaim or terminate a payment instruction or a settlement except in accordance with the rules of the designated payment system.
2: In this section,—
a: participant section 2(1) Reserve Bank of New Zealand Act 1989
b: designated payment system payment instruction rules settlement section 156L Sections 93A 93I inserted 26 April 1999 4 Insolvency Amendment Act 1999 Section 93I substituted 21 August 2003 48(1) Reserve Bank of New Zealand Amendment Act 2003
94: Interest
1: Unless authorised by any enactment or rule of law, no interest shall be included in any proof of debt unless—
a: It has been allowed by a Court in entering judgment; or
b: The claim is based on an agreement which provided for the paying of interest.
2: Where interest may be so included, it shall be calculated only up to the date of adjudication. 1908 No 12 s 105
95: Debt payable at future time
Any creditor in respect of a debt not payable at the time of the adjudication may prove the debt as if it were payable presently, deducting therefrom any interest charged or allowed in the transaction between the date of the adjudication and the date on which the money is payable or if no interest was charged allowing thereout discount at the rate relating to interest on judgment debts in the High Court Provided that no discount shall be made from a debt payable within 3 months of the adjudication. 1908 No 12 s 106
96: Debt owing on invalid security
A creditor whose debt is secured by a security which, by or under the provisions of this or any other Act, is declared wholly or in part void against the Assignee in the bankruptcy shall be entitled to prove for so much of the money which is owing to him as is not admitted to be secured under the said security. 1908 No 12 s 107
97: Bankrupt liable as a member of several firms
1: Subject to the provisions of section 82
2: Subject to the provisions of section 82 1908 No 12 s 108
98: Assignee to estimate value of contingent debt
An estimate may be made by the Assignee of the value of any debt or liability proved under the bankruptcy which, by reason of its being subject to any contingency or contingencies or for any other reason, does not bear a certain value but which the Assignee considers may be fairly estimated. If the Assignee considers that the value cannot be fairly estimated he shall reject the proof. 1908 No 12 s 109(1)
99: Appeal against estimate of value
1: Any person who is aggrieved by any estimate made by the Assignee under section 98
2: If, in the opinion of the Court, the value of the debt or liability cannot be fairly estimated, the Court may make an order to that effect, and thereupon the debt or liability shall, for the purposes of this Act, be deemed to be a debt not provable in the bankruptcy.
3: If, in the opinion of the Court, the value of the debt or liability can be fairly estimated, the Court may assess the value, and may give all necessary directions for this purpose, and the amount of the value when assessed shall be deemed to be a debt provable in the bankruptcy. 1908 No 12 s 109
100: Right of judgment creditor to prove for costs
Every person who, under a verdict, judgment, decree, order, or rule in or of any Court obtained before the adjudication, would have been entitled to recover costs from the bankrupt if he had not become bankrupt may prove for the amount of those costs when taxed, although the taxation is not had before the adjudication. 1908 No 12 s 115
101: When company may prove for unpaid calls
1: Where the bankrupt is at the time of the adjudication a member or shareholder of a company that has not been put into liquidation, the company may prove for the amount of calls made before the adjudication in respect of the shares held by the bankrupt and not paid, and may claim for the value, estimated as the Assignee and the company may agree or failing agreement as the Court directs, of the liability to calls to be made in respect of the shares within one year after the date of the adjudication.
2: In estimating any such liability in the case of a mining company registered under the Companies Act 1955 1908 No 12 s 111 Section 101 substituted 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994
102: Saving of provisions of Companies Acts
Nothing in section 101 section 226 of the Companies Act 1955 sections 103 268 Companies Act 1993 Section 102 substituted 1 July 1994 2 Company Law Reform (Transitional Provisions) Act 1994
103: When a surety for bankrupt may prove
Where any person is at the time of the adjudication surety or liable for any debt or liability of the bankrupt, and pays or satisfies the debt or liability, or any part of it in discharge of the whole, although he does so after the adjudication, the following provisions shall have effect:
a: If the creditor has proved, the surety or person liable may stand in his place in respect of the proof:
b: If the creditor has not proved, the surety or person liable may prove for the payment made by him as a debt, not disturbing former dividends, and may receive dividends. 1908 No 12 s 114
9: Distribution of assets
104: Priorities
1: Subject to the provisions of this section and to any other enactment, the money received by the Assignee by the realisation of the property of a bankrupt shall be applied by him as follows:
a: First, in payment of 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:
b: Secondly, in payment of the costs and expenses incurred by the creditor in procuring the order of adjudication, inclusive of and subsequent to the preparation and filing of the petition, or (as the case may be) the costs and expenses incurred by the debtor's solicitor on the debtor's behalf in procuring the order of adjudication in accordance with the prescribed scale:
c:
d: fourthly, in payment rateably of,—
i: subject to subsection (1A)
ii: subject to subsection (1A)
iii: subject to subsection (1A)
iv: subject to subsection (1A) section 123(b) 128 Employment Relations Act 2000 section 123(c) Employment Relations Act 2000
v: all sums payable under section 73(2)
vi: subject to subsection (1A) section 163(1) Child Support Act 1991
via: all amounts payable to the Commissioner of Inland Revenue in accordance with section 167(2) Tax Administration Act 1994 section 67 KiwiSaver Act 2006
vii: subject to subsection (1A) section 167(2) Tax Administration Act 1994 section 25 Student Loan Scheme Act 1992
e: Fifthly, in payment rateably of—
i: All amounts payable to the Commissioner of Inland Revenue in accordance with section 167(2) Tax Administration Act 1994
ii:
iii: all amounts payable to the Accident Compensation Corporation in accordance with section 115(17) of the Accident Rehabilitation and Compensation Insurance Act 1992 clause 4 of Schedule 5 of the Accident Insurance Act 1998 clause 4 Injury Prevention, Rehabilitation, and Compensation Act 2001
iv: Duty payable within the meaning of section 2(1) Customs and Excise Act 1996
f: Sixthly, in payment of all debts admitted in the bankruptcy, including any amount for salary or wages that is not a preferred claim, but excluding any debts specified in paragraph (g) (i)
g: Seventhly, in payment rateably (unless otherwise provided in any other enactment) of the following debts:
i: Any unpaid wages owing to the bankrupt's wife or husband (as the case may be) where the wife or husband is or was employed by the bankrupt in the bankrupt's trade or business:
ii: Any other deferred debts, except the debts mentioned in section 54
h: Eighthly, in payment of interest from the date of the adjudication on all debts admitted in the bankruptcy (except those mentioned in section 54 High Court
i: Ninthly, in payment rateably of section 54 paragraph (h)
j: Tenthly, subject to the provisions of paragraph (c)
1A: The total sum to which priority is to be given under any, or all, of subparagraphs (1)(d)(i) to (iv) (vi) (vii) subsection (1B)
1B: The sum stated in subsection (1A)
a: subject to paragraph (d) adjustment period
b: subject to paragraph (d)
c: each adjustment must reflect any overall percentage increase, over the relevant adjustment period, in average 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 Government Statistician as an equivalent to that survey) within the relevant adjustment period:
d: if, in an adjustment period, there is no change, or an overall decrease, in the percentage movement in average weekly earnings (total, private sector), as so calculated, no adjustment may be made for that adjustment period:
e: if, in accordance with paragraph (d)
f: all adjustments are cumulative and must be rounded to the nearest $20:
g: any correction to a Quarterly Employment Survey upon which an adjustment is based must be disregarded until the adjustment that takes effect in the following adjustment period which must reflect the corrected information in the calculation of that adjustment and must otherwise be made in accordance with this section.
2: Subject to the provisions of this section, where any payment has been made—
a: To any employee
b: To any such employee out of money advanced by some person for that purpose, the person by whom the money was advanced shall in a bankruptcy have a right of priority in respect of the money so advanced and paid up to the amount by which the sum in respect of which the employee Provided that the person shall be entitled to priority only to the extent that the total advances made within the period of 4 months immediately preceding the adjudication exceed the payments received from the bankrupt during that period, but nothing in this proviso shall apply to any advance made or any payment received by any registered bank Reserve Bank of New Zealand Act 1989
3: In this section
aa: employee section 5 Employment Relations Act 2000
a: The expression holiday pay Holidays Act 2003
b: Any remuneration in respect of a period of holiday or of absence from work through sickness or other good cause shall be deemed to be wages in respect of services rendered to the bankrupt during that period.
4: Notwithstanding anything to the contrary in this Act, where before the commencement of this Act a person has been adjudged bankrupt or there has been an order or election to administer his estate under Part 4 of the Administration Act 1952
5: This section, as in force on the date on which a person is adjudicated bankrupt, continues to apply to that bankruptcy regardless of any amendment to this section that comes into force after the date on which the person is adjudicated bankrupt. 1908 No 12 ss 112, 120 Subsection (1)(a) substituted 1 July 1994 3(1) Insolvency Amendment Act 1994 Subsection (1)(c) substituted 19 March 1990 5(3) Insolvency Amendment Act 1990 Subsection (1)(c) repealed 1 July 1994 3(2) Insolvency Amendment Act 1994 Subsection (1)(d)(i) amended 19 October 1978 Insolvency Amendment Act 1978 by substituting the words $1,500, or such greater amount as is from time to time prescribed by the Governor-General by Order in Council, four hundred dollars Subsection (1)(d)(iv) inserted 1 July 1992 251 Child Support Act 1991 Subsection (1)(d) substituted 29 May 2004 4(1) Insolvency Amendment Act 2004 Subsection (1)(d)(via) inserted 1 December 2006 231 KiwiSaver Act 2006 See section 232 See clause 2(2) KiwiSaver Act Commencement Order 2006 Subsection (1)(e) substituted 1 April 1992 90 Student Loan Scheme Act 1992 Subsection (1)(e) substituted 1 April 1993 Student Loan Schemes Amendment Act 1993 Subsection (1)(e)(i) (ii) amended 1 April 1995 Income Tax Act 1994 by substituting the words section 167(2) of the Tax Administration Act 1994 section 365(2) of the Income Tax Act 1976 Subsection (1)(e)(ii) repealed 29 May 2004 4(2) Insolvency Amendment Act 2004 Subsection (1)(e)(iii) substituted 1 July 1999 Accident Insurance Act 1998 Subsection (1)(e)(iii) substituted 1 April 2002 337(1) Injury Prevention, Rehabilatation, and Compensation Act 2001 See Part 10 See 11 Subsection (1)(e)(iv) inserted 30 March 1995 Customs Amendment Act 1995 Subsection (1)(e)(iv) substituted 1 October 1996 289(1) Customs and Excise Act 1996 Subsection (1)(g)(ii) amended 1 February 2002 63(4)(a) Property (Relationships) Amendment Act 2001 by substituting the expression section 54 sections 43 and 54 See section 63(5) in any case where a person has been adjudged bankrupt, or there has been or order or election to administer an estate under Part 17 section 63 Subsection (1)(h) amended 1 February 2002 63(4)(b) Property (Relationships) Amendment Act 2001 by substituting the expression section 54 sections 43 and 54 See section 63(5) in any case where a person has been adjudged bankrupt, or there has been or order or election to administer an estate under Part 17 section 63 Subsection (1)(i) amended 1 February 2002 63(4)(c) Property (Relationships) Amendment Act 2001 by omitting the expression the debts referred to in section 43 See section 63(5) in any case where a person has been adjudged bankrupt, or there has been or order or election to administer an estate under Part 17 section 63 Subsections (1A) (1B) inserted 29 May 2004 4(3) Insolvency Amendment Act 2004 Subsection (2) amended 1 February 1990 187 Reserve Bank of New Zealand Act 1989 by substituting the words registered bank trading bank Subsection (2) amended 1 February 1990 186(1) Reserve Bank of New Zealand Act 1989 by substituting a reference to the Reserve Bank of New Zealand Act 1989 Reserve Bank of New Zealand Act 1964 Subsections (2) amended 29 May 2004 4(4) Insolvency Amendment Act 2004 by substituting the word employee servant or worker Subsection (3) amended 29 May 2004 4(5)(a) Insolvency Amendment Act 2004 by substituting the words In this section For the purpose of paragraph (d) of subsection (1) of this section Subsection (3)(aa) inserted 29 May 2004 4(5)(b) Insolvency Amendment Act 2004 Subsection (3)(a) amended Holidays Act 1981 by substituting a reference to the Holidays Act 1981 Annual Holidays Act 1944 Subsection (3)(a) amended 1 April 2004 91(2) Holidays Act 2003 by substituting the words Holidays Act 2003 Holidays Act 1981 Subsection (5) inserted 29 May 2004 4(6) Insolvency Amendment Act 2004
105: Assignee to declare dividends as soon as possible
1: Subject to the retention of such sums as may be necessary for the costs of administration or otherwise, the Assignee shall, with all convenient speed, declare and distribute dividends among the creditors whose debts have been admitted in the bankruptcy: Provided that no dividend shall be distributed until 2 months have elapsed from the date of adjudication.
2: Notice of the time when and place where any dividend will be paid shall be sent to every creditor whose debt has been admitted in the bankruptcy, and shall be advertised.
3: Any creditor whose debt has been admitted in the bankruptcy may at any time after 2 months from the date of adjudication apply to the Court for an order requiring the Assignee to proceed with the distribution of the assets of the estate forthwith, in such manner as the Court directs, having regard to the circumstances of the case.
4: In any such case the Court may make such order as it thinks fit, or may refuse to make any such order.
5: In the calculation and distribution of a dividend the Assignee shall make provision:
a: For debts provable appearing from the bankrupt's statements or otherwise to be due or owing to persons—
i: Who are resident in places so distant from the place where the Assignee is acting that in the ordinary course of communication they have not had sufficient time to tender their proofs or to establish them if disputed; or
ii: Whose address is not known to the Assignee; or
iii: Who, the Assignee has reason to believe, have not had notice of the bankruptcy:
b: For debts provable in respect of claims not yet determined.
6: In the case of a dividend declared after the expiration of 4 months after the date of adjudication, it shall not be obligatory on the Assignee to make provision for debts of the nature of those referred to in subsection (5)
7: Any creditor who has not proved his debt before the declaration of any dividend shall be entitled to be paid a dividend out of any money for the time being remaining in the hands of the Assignee available for future distribution amongst the creditors, but he shall not be entitled to disturb the distribution of any dividend declared before he proved his debt.
8: Any creditor who has duly amended his proof after the declaration of a dividend shall, if his claim is increased by the amendment, be entitled to be paid a further dividend in respect of the increase out of any money for the time being remaining in the hands of the Assignee available for future distribution among the creditors; but he shall not be entitled to disturb the distribution of any dividend declared before the said proof was amended.
9: Any creditor who has duly amended his proof so as to reduce his claim after receiving a dividend shall refund to the Assignee the dividend received on the amount by which his claim is thus reduced.
10: The creditors of 2 or more bankrupts jointly shall not receive any dividend out of the separate property of any one of those bankrupts until his separate creditors have received the full amount of their respective debts (including interest), nor shall any separate creditor receive a dividend out of the joint property until the creditors of the bankrupts jointly have received the full amount of their respective debts (including interest).
11: When the Assignee has converted into money all the property of the bankrupt, or so much thereof as can in his opinion be realised without needlessly protracting the bankruptcy, he shall declare a final dividend. 1908 No 12 s 123
106: Rights of creditors of joint debtor
If one partner of a firm is adjudged bankrupt, any creditor to whom the bankrupt is indebted jointly with the other partners of the firm or any of them shall not receive any dividend out of the separate property of the bankrupt until all the separate creditors have received the full amount of their debts. UK Act s 63(1)
10: Discharge
107: Discharge of bankrupt
1: Subject to the provisions of this section, a person who is adjudged a bankrupt after the commencement of this Act is hereby discharged from the bankruptcy upon the expiration of 3 years from the date of adjudication, unless he is sooner discharged in accordance with section 110
2: Subject to the provisions of this section, a person who was an undischarged bankrupt immediately before the commencement of this Act is hereby discharged from bankruptcy upon the expiration of 3 years from the date of the commencement of this Act, unless he is sooner discharged in accordance with section 110
3: Subsections (1) (2)
4: An objection entered under subsection (3)
5: Where an objection is withdrawn after the time when the bankrupt would have been discharged under subsection (1) (2) subsection (3)
6: This section does not operate to discharge a bankrupt from a bankruptcy, if—
a: At the time when he would have been so discharged but for this subsection, he is still undischarged from an earlier bankruptcy; or
b: In any case where the bankrupt has to be publicly examined under section 69
7: Any discharge of a bankrupt under the foregoing provisions of this section shall have the same consequences in all respects as if the Court had granted an order of discharge of the bankrupt.
108: Bankrupt may apply for discharge
Subject to the provisions of paragraph (d) section 109 1908 No 12 ss 125, 130
109: Examination of bankrupt concerning his discharge
1: If any objection has been entered in accordance with subsection (3) subsection (6)
2: Where the Assignee has so called on the bankrupt to appear before the Court to be examined concerning his discharge, or where the bankrupt has made an application for his discharge under section 108
3: Subsections (2) (4) (5) (8)
4: A creditor who intends to oppose the discharge of a bankrupt on grounds other than those mentioned in the Assignee's report shall give notice of his intended opposition, setting out the grounds thereof, to the Assignee and to the bankrupt within the time prescribed by the rules. 1908 No 12 s 126 Bankruptcy Act 1949 s 128 (Canada)
110: Court may grant or refuse discharge
1: At the hearing of any application for an order of discharge under section 108 section 109
a: Grant an immediate order of discharge:
b: Grant an order of discharge subject to such conditions (including consenting to any judgment or order for the payment of any sum of money) as it thinks fit, or suspend an order for discharge for such time as it thinks fit:
c: Grant an order of discharge with or without such conditions as it thinks fit to take effect at a specified future date:
d: Refuse an order of discharge, in which case the Court may specify the earliest date on which the bankrupt may apply again to the Court for an order of discharge.
2: Section 107
3: Where the Court has granted an order of discharge subject to the bankrupt consenting to any judgment and the bankrupt consents, the Court may from time to time vary the judgment as it thinks fit. 1908 No 12 s 127
111: Court may order bankrupt not to engage in business after discharge
1: Without restricting the provisions of section 110
a: Entering into or carrying on any business or class of business either alone or in partnership with any person:
b: Being engaged in the management or control of any business carried on by or on behalf of, or being in the employ of, any of the following persons, namely, the bankrupt's wife or husband, a lineal ancestor or descendant of the bankrupt, the wife or husband of such an ancestor or descendant, a brother of the bankrupt, the wife of such a brother, a sister of the bankrupt, and the husband of such a sister:
c: Acting as a director or taking part directly or indirectly in the management of any company or class of company.
d:
2: Any such prohibition may be for a specified period or without any time limit.
3: The Court may at any time cancel or vary any such order. Subsection (1)(d) inserted 1 January 1974 Syndicates Act 1973 Subsection (1)(d) repealed 1 September 1983 75(1) Securities Act 1978
112: Court may reverse order of discharge
1: At any time within 2 years after the grant of an absolute order of discharge, or after the taking effect of a suspended or conditional order of discharge, the Court may, on the application of the Assignee or of any creditor, reverse that order of discharge if, after notice to the bankrupt, any facts are established to the satisfaction of the Court which, had they been known to the Court at the time of granting the order, would have justified the Court in refusing to grant the order or in imposing any conditions precedent to its taking effect.
2: No such application for a reversal of the order of discharge shall be entertained if the facts upon which it is intended to be based were known to or could by the exercise of reasonable diligence have been ascertained by the Assignee or the creditor making the application at the time of the granting of the order of discharge.
3: The reversal of any order of discharge shall not prejudice or affect the rights or remedies which any other person would have had in case the reversal had not been made, and any property acquired by the bankrupt since the granting of the order which is reversed, and vested in him at the date of the reversal, shall vest in the Assignee subject to any encumbrances thereon, and shall, in the first instance, be applied by the Assignee in satisfaction of debts incurred by the bankrupt since the date of the order so reversed.
4: Upon the Court reversing any such order of discharge, the Court may then, or at any subsequent time, grant a new order of discharge, either absolute, suspended, or conditional. 1908 No 12 s 129
113: Absolute discharge where failure to comply with conditions
In case of the failure to comply with all or any of the conditions fixed by a conditional order of discharge, the Court may at any time grant an absolute order of discharge to the bankrupt on his application, if the Court is satisfied that the failure to comply with the conditions arises from circumstances for which the bankrupt cannot justly be held responsible. 1908 No 12 s 131
114: Debts from which discharge releases bankrupt
A discharge shall release the bankrupt from all debts provable in the bankruptcy except the following:
a: Any debt or liability incurred by means of any fraud or fraudulent breach of trust to which he was a party:
b: Any debt or liability whereof he has obtained forbearance by any fraud to which he was a party:
c: Any judgment debt or any amount payable under any order for which he is liable under section 45 110
d: Any amount payable under a maintenance order under the Family Proceedings Act 1980
e: Any amount payable under the Child Support Act 1991 1908 No 12 s 132 Paragraph (d) amended 1 January 1970 Domestic Proceedings Act 1968 by substituting the words Domestic Proceedings Act 1968 Destitute Persons Act 1910 Paragraph (d) substituted 1 October 1981 189(1) Family Proceedings Act 1980 Paragraph (d) substituted (e) inserted 1 July 1992 252 Child Support Act 1991
115: Discharge conclusive evidence of bankruptcy
A discharge shall be conclusive evidence of the bankruptcy and of the validity of the proceedings therein; and in any proceedings instituted against a bankrupt who has obtained an order of discharge in respect of any debt from which he is released by the order, the bankrupt may plead that the cause of action occurred before his discharge. 1908 No 12 s 133
116: Discharge not to release partners, co-trustees, etc
A discharge shall not release any person who at the date of adjudication was a partner or co-trustee with the bankrupt, or was jointly bound or had made any joint contract with him, or any person who was surety or in the nature of a surety for him. 1908 No 12 s 134
117: Discharged bankrupt to assist Assignee
A discharged bankrupt shall, notwithstanding his discharge, give such assistance as the Assignee or the Court requires in the realisation and distribution of such of his property as is vested in the Assignee. 1908 No 12 s 135
118: Publication of information regarding bankrupt's discharge
1: In any case where the Court refuses to grant a discharge or suspends the order of discharge, the fact thereof may be published in the prescribed manner.
2: The chief executive of the department of State that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act may from time to time, as that chief executive thinks fit, publish a list of undischarged bankrupts.
3: No action shall lie against the Crown or the chief executive of that department of State in respect of any publication made under this section in good faith and with reasonable care. 1927 No 41 s 14 Subsection (2) substituted 1 October 1995 10(3) Department of Justice (Restructuring) Act 1995 Subsection (3) substituted 1 October 1995 10(3) Department of Justice (Restructuring) Act 1995
11: Annulment
119: When Court may annul adjudication
1: In any of the following cases the Court may by order, on the application of the Assignee or any person interested, annul the adjudication—
a: Where the Court is of the opinion that the order of adjudication should not have been made:
b: Where the Court is satisfied that the debts of the bankrupt have been fully paid or satisfied:
c: Where the Court is of the opinion that the liability of the bankrupt to pay his or her debts should be revived because since the date of adjudication there has been a substantial change in the financial circumstances of the bankrupt:
d: Where the Court has approved a composition under Part 12
2: If an application is made on any ground specified in paragraphs (a) (c)
3: The Assignee may appear on the hearing of any application made on any ground specified in paragraphs (a) (c)
4: If the order of annulment is made on the ground specified in paragraph (a)
5: If the order of annulment is made on any ground specified in paragraphs (b) (d)
6: Where application is made to the Court to annul any order of adjudication on the ground that the order ought not to have been made by reason of a defect in form or procedure, subject to section 11
7: Where an order of annulment is made on any ground specified in paragraphs (a) (c)
a: The Court may, on the application of the Assignee, order, in addition to any costs that may be awarded, the payment of such fee by way of remuneration for the Assignee's services as the Court considers reasonable:
b: Any such fee shall be paid into the Crown Bank Account:
c: No commission shall be payable under section 166 Section 119 substituted 19 March 1990 4 Insolvency Amendment Act 1990
120: Effect of annulment
1: Where an order annulling an adjudication has been made, all property of the bankrupt vested in the Assignee under the bankruptcy, and not sold or disposed of under any contract of sale or disposition entered into by the Assignee while it was so vested is hereby revested in the bankrupt without the necessity of any conveyance, transfer, or assignment of any kind.
2: An order annulling an adjudication shall not prejudice or affect the validity of any contract, sale, disposition, or payment duly made or anything duly done by the Assignee before the making of that order; and every such contract, sale, disposition, and payment shall have effect as if it had been made by the bankrupt while no order of adjudication was in force. 1908 No 12 s 137
12: Composition during bankruptcy
121: Composition with creditors
1: Where a person has been adjudged bankrupt, his creditors may, by special resolution embodying the terms of the composition, accept a composition in satisfaction of the debts due to them from the bankrupt.
2: The confirming resolution may vary the preliminary resolution so that the terms of the composition assented to by the confirming resolution are not more unfavourable to the creditors than those specified in the preliminary resolution.
3: The notice of the meeting to pass the confirming resolution shall state generally the terms of the proposal for composition, and shall be accompanied by a report of the Assignee thereon.
4: For computing the requisite majority of creditors for the passing of the confirming resolution as aforesaid, 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 shall not be reckoned either in number or value. 1908 No 12 s 118(1)-(4)
122: Approval of compositions by Court
1: When the confirming resolution has been passed, either the bankrupt or the Assignee may apply to the Court to approve the composition, and notice of the application shall be given to each creditor.
2: The Court shall, before approving a composition, hear a report of the Assignee as to the terms of the composition and as to the conduct of the bankrupt, and any objection which may be made by or on behalf of any creditor.
3: The Court may refuse to approve the composition if it is of opinion:
a: That the provisions of section 121
b: That the terms of the composition are not reasonable or not calculated to benefit the general body of creditors; or
c: That the bankrupt has committed any such misconduct as would justify the Court in refusing, qualifying, or suspending his discharge; or
d: That for any reason it is not expedient that the composition should be approved.
4: No composition shall be approved by the Court which does not provide for the payment in priority to other debts of all debts directed to be so paid in the distribution of the property of a bankrupt.
5: A composition so approved by the Court shall be binding on all the creditors, so far as relates to any debts due to them and provable under the bankruptcy.
6: At the time when a composition is approved, the Court may correct or supply any accidental or formal error or omission therein, but no alteration in the substance of the composition shall be made.
7: The approval of the Court shall be conclusive as to the validity of the composition. 1908 No 12 s 118(5)-(12)
123: Deed of composition
1: Forthwith after the Court has approved a composition, the bankrupt and the Assignee shall execute a deed of composition for carrying the proposal into effect, and the deed shall be produced to the Court by the Assignee, who shall forthwith apply to the Court to confirm the said deed.
2: The Court, if satisfied that the deed is in conformity with the composition as approved, shall direct the deed to be entered and filed in the Court, and shall annul the adjudication of bankruptcy, but without revesting the bankrupt's property to which the deed relates in him in accordance with section 120 Land Transfer Act 1952
3: When any such deed of composition has been entered by the Registrar, he shall endorse thereon the fact of the entry and filing in the Court, and shall, if so requested by the Assignee, deliver the deed to the Assignee, who shall forthwith take all steps necessary to have any vesting provided for in the deed registered or recorded in the appropriate registry or office, and (on this being done) shall return the deed to the file of the Court.
4: When any such deed of composition is entered by the Registrar, the Assignee shall forthwith, subject to the provisions of the deed, put the bankrupt (or, as the case may be, the trustee under the composition) into possession of the bankrupt's property, or such of it as is in possession of the Assignee and as is intended by the composition to revest in the bankrupt or trustee. 1908 No 12 s 118(13)-(17)
124: Enforcement of composition
1: When default is made in payment of any composition approved by the Court as aforesaid, either by the debtor or the trustee, any person aggrieved may apply to the Court for an order that the default be remedied.
2: The provisions of any such composition may be enforced by the Court on a motion made in a summary manner by any person interested.
3: Notwithstanding the approval of a composition and whether the adjudication of bankruptcy is annulled or not, the Court, from and after the passing of the preliminary resolution, shall continue to have exclusive jurisdiction in the following matters, namely:
a: The enforcement in any respect of the execution of the trusts, powers, covenants, or other provisions of the deed of composition:
b: The hearing of any application of the bankrupt or of any trustee acting under the deed, or of any creditor or person claiming to be a creditor respecting the custody, distribution, inspection, management, or winding up of the bankrupt's property or affairs, or any act or thing relating thereto done or happening after the execution of the deed by the bankrupt:
c: The claim of any person to be a creditor:
d: The audit or examination of the accounts of a trustee:
e: The taxation or examination of the costs or charges of a solicitor, accountant, auctioneer, broker, or other person acting or employed under the deed:
f: Any matter for the submission whereof to the Court provision is made by the deed.
4: On any application under subsection (3)
5: The Court shall determine all questions arising under the deed of composition according to the law and practice in bankruptcy, so far as the same are applicable. 1908 No 12 s 118(18)-(22)
125: General provisions affecting compositions
1: If the confirming resolution is not passed within one month after the passing of the preliminary resolution, or if the composition is not approved by the Court within one month after the passing of the confirming resolution, or if the deed of composition is not executed by the bankrupt within 7 days after the approval of the composition by the Court or within such further time as the Court may allow, the proceedings in bankruptcy shall, immediately on the expiration of any such period, go on as if there had been no resolution, and that period shall not be reckoned in the calculation of time for any of the purposes of this Act.
2: Where the adjudication is against members of a partnership, the joint creditors and each class of separate creditors may make distinct compositions, and, if so made, the majorities of creditors required for passing the confirming resolution aforesaid shall be distinct majorities of each such class, but otherwise the joint and separate creditors shall have votes as one body.
3: The delay of any one of the classes of creditors in accepting, or their failure to accept, a composition shall not prevent any other of the classes from accepting the composition.
4: Where a bankrupt makes any composition with his creditors, he shall remain liable for the unpaid balances of any debts which he incurred or increased, or whereof, on or before the date of the composition, he obtained forbearance by any fraud in any case where the defrauded creditor has not assented to the composition otherwise than by proving his debt and accepting dividends.
5: No deed shall be entered and filed in the Court unless the prescribed commission is paid to the Assignee. 1908 No 12 s 118(23)-(27)
13: Offences
126: Crimes by bankrupt
1: Every person who is adjudged bankrupt commits a crime and is liable on conviction on indictment to imprisonment for a term not exceeding 3 years who—
a: Did not, at the time when any of his debts were contracted, expect to be able to pay the debt when it fell due for payment, as well as all his other debts including future and contingent debts; or
b: Has concealed or removed any part of his property within 2 months before the time of any unsatisfied judgment or order for payment of money obtained against him or at any time thereafter, unless he proves that he had no intent to defraud any of his creditors; or
c: Has materially contributed to or increased the extent of his insolvency by gambling, or by rash and hazardous speculations or unjustifiable spending or extravagance in living; or
d: Has, with intent to defraud his creditors or any of them, made or caused to be made any gift, delivery, or transfer of or any charge on his property; or
e: Within 3 years immediately before his adjudication has made or produced any written statement relating to his affairs to any person who is then his creditor, or to any person who became his creditor on the faith of such a statement, which statement does not set out the true and fair statement of his affairs, unless he proves he had no intention to deceive; or
f: After the presentation of a bankruptcy petition by or against him, or within 2 years next before such a presentation:
i: Conceals, destroys, mutilates, or falsifies, or is a party to the concealment, destruction, mutilation, or falsification of, any book or document affecting or relating to his property or affairs, unless it is proved that he had no intent to conceal the state of his affairs or to defeat the law; or
ii: Makes or is a party to the making of any false entry in any book or document affecting or relating to his property or affairs, unless it is proved that he had no intent to conceal the state of his affairs or to defeat the law; or
iii: Fraudulently parts with, alters, or makes any omission, or is a party to fraudulently parting with, altering, or making any omission in, any document affecting or relating to his property or affairs; or
iv: Prevents the production of any book, document, paper, or writing affecting or relating to his property or affairs to any person to whom he has an obligation under the Act to produce it, unless it is proved that he had no intent to conceal the state of his affairs or to defeat the law; or
g: After the presentation of a bankruptcy petition by or against him or within 2 years next before such a presentation:
i: Conceals any part of his property to the value of $50 or upwards, or conceals any debt due to or from him, unless it is proved that he had no intent to defraud; or
ii: Fraudulently removes any part of his property of the value of $50 or upwards; or
h: After the presentation of a bankruptcy petition by or against him or at any meeting of his creditors within 12 months next before such a presentation, attempts to account for any part of his property by fictitious losses or expenses; or
i: Within 3 years before the presentation of a bankruptcy petition by or against him or at any time after the presentation of the petition,—
i: By any false representation or other fraud, or by any false statement of financial position
ii: Pawns, mortgages, pledges, or disposes of, otherwise than in the ordinary way of trade, any property which he has obtained on credit and has not paid for, unless it is proved that he had no intent to defraud; or
j: Makes any false representation or is guilty of any other fraud for the purpose of obtaining the consent of his creditors or any of them to any agreement with reference to his affairs or his bankruptcy; or
k: After presentation of a bankruptcy petition by or against him, or within 12 months before such a presentation, quits New Zealand either temporarily or permanently either temporarily or permanently
2: For the purposes of paragraph (a) 1908 No 12 s 138 Subsection (1)(i)(i) amended 1 October 1997 6(1) Financial Reporting Amendment Act 1997 by substituting the words statement of financial position balance sheet Subsection (1)(k) amended 3 May 2001 8 Insolvency Amendment Act 2001 by inserting the words either temporarily or permanently
127: Failure to keep proper books of account
1: A bankrupt commits an offence and is liable on summary conviction to imprisonment for a term not exceeding 3 months if, for any period which commenced during the 3 years immediately before the date of his adjudication (being a period which commenced after the date of the commencement of this Act), his occupation or transactions were such that he might reasonably be expected to keep a record of his transactions for the period, and he has failed to keep and preserve a proper record. Notwithstanding anything to the contrary in the Summary Proceedings Act 1957
2: A bankrupt commits a crime and is liable on conviction on indictment to imprisonment for a term not exceeding 3 years if, with intent to conceal the true state of his affairs, he has failed to keep and preserve a proper record of his transactions.
3: For the purpose of this section a bankrupt shall be deemed not to have kept a proper record of his transactions if, being engaged in any trade or business, he has not kept such books and accounts as are necessary to exhibit or explain his transactions and financial position in his trade or business, including a book or books containing entries from day to day in sufficient detail of all cash received and cash paid, and (where the trade or business has involved dealing in goods) also 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 (where the trade or business has involved the services of the bankrupt) details of those services.
4: For the purpose of this section a bankrupt shall be deemed not to have preserved a proper record of his transactions, if (in addition to the records mentioned in subsection (3)
a: A record of all goods purchased in the course of business, duly supported by the original invoices; and
b: A daily record of all goods sold on credit. 1908 No 12 s 138(c), (d) Bankruptcy Act 1949 s 158 (Canada)
128: Summary offences
1: Every person who is adjudged bankrupt commits an offence and is liable on summary conviction to imprisonment for a term not exceeding 12 months
a: Fails without reasonable cause to do any of the things required of him by sections 33 37 60 61 sections 111 117
b: Refuses or neglects to answer fully and truthfully all proper questions put to him at any examination held pursuant to this Act; or
c: Wilfully misleads the Assignee in any statement made to him in the course of the administration of his affairs, whether orally or in writing or in answer to any question put to him; or
d: In any case where any person has to his knowledge filed a false proof in the bankruptcy, failed to disclose that fact immediately to the Assignee; or
e: Has within 2 years before his adjudication, when unable to pay his debts as they became due, given, with intent to defraud his creditors, an undue preference to any of his creditors; or
f: Quits New Zealand either temporarily or permanently section 107 either temporarily or permanently either temporarily or permanently
g: Before he obtains his final order of discharge, or before a suspended or conditional order of discharge takes effect under this Act,—
i: Alone or jointly with another person, obtains credit to the extent for the time being of $100 or more, unless he proves that, before obtaining credit to that extent, he informed the person giving the credit that he was an undischarged bankrupt; or
ii: Incurs liability to any person to the extent for the time being of $100 or more for the purpose of obtaining credit for another person, unless he proves that, before he incurred liability to that extent to the person who gave the credit, that person was informed that the person incurring the liability was an undischarged bankrupt.
2: Despite anything in section 14 Summary Proceedings Act 1957 paragraphs (a) (g)
3: 1908 No 12 s 138(i), (j), (k), (l), (m), (n), (w) Subsection (1) amended 3 May 2001 9(1)(a) Insolvency Amendment Act 2001 by substituting the expression 12 months 3 months Subsection (1)(a) amended 1 July 1994 Insolvency Amendment Act 1993 by substituting the expression 111 62, 111, Subsection (1)(f) amended 3 May 2001 9(1)(b) Insolvency Amendment Act 2001 by inserting the words either temporarily or permanently Subsection (2) substituted 3 May 2001 9(2) Insolvency Amendment Act 2001 Subsection (3) inserted Insolvency Amendment Act 1972 Subsection (3)(a) amended 1 July 1994 Insolvency Amendment Act 1993 by omitting the expression or section 62 Subsection (3) repealed 3 May 2001 9(2) Insolvency Amendment Act 2001
128A: Offences by undischarged bankrupts in relation to management of companies
1: Every person who is adjudged bankrupt and who—
a: Acts as a director of a company; or
b: Fails without reasonable cause to comply with section 62 commits an offence and is liable on conviction on indictment to imprisonment for a term not exceeding 2 years or on summary conviction to imprisonment for a term not exceeding 12 months $5,000
2: Notwithstanding anything in section 14 Summary Proceedings Act 1957 paragraph (a) (b) Section 128A inserted 1 July 1994 Insolvency Amendment Act 1993 Subsection (1) amended 3 May 2001 10(a) Insolvency Amendment Act 2001 by substituting the expression 12 months 6 months Subsection (1) amended 3 May 2001 10(b) Insolvency Amendment Act 2001 by substituting the expression $5,000 $1,000
129: When Assignee's duty to prosecute
1: It shall be the duty of the Assignee, when he has reason to suspect that any person has committed an offence under this Act, to lay the facts of the case, so far as he is acquainted with them, before the appropriate Crown Solicitor, and if that Crown Solicitor certifies that there are reasonable grounds for a prosecution, then the Assignee shall lay an information against that person.
2: No action shall lie against an Assignee for malicious prosecution by reason of any proceedings under this Act if taken upon the certificate of the Crown Solicitor under this section. 1908 No 12 ss 144, 169(1)
14: Miscellaneous provisions affecting bankruptcy
130: Bankrupt a contractor jointly with other persons
When a bankrupt is a contractor in respect of any contract jointly with any person, that person may sue or be sued in respect of the contract without the joinder of the bankrupt. 1908 No 12 s 74
131: Right to inspect documents
The bankrupt, or any person who has lodged a proof of debt, or any solicitor or accountant acting for any such person, may, at any convenient time inspect and take extracts or copies of—
a: The bankrupt's books of account:
b: The bankrupt's answers to the prescribed questions and the bankrupt's statement of his affairs:
c: All proofs of debt:
d: The minutes of any creditors' meeting, and the record of any examination of the bankrupt. Section 131 substituted 1 April 1987 25(1) Official Information Amendment Act 1987
132: Assignees to keep proper books of account
1: Every Assignee under this Act shall keep proper books of account, in the prescribed form, and shall, whenever required by the Court, verify the same by statutory declaration.
2: The accounts of the Assignee in respect of any bankruptcy shall be open to the inspection of any creditor or of any person who has an interest in the bankruptcy.
3: As soon as practicable after the notice of the distribution of a final dividend in any estate is advertised, or when the whole of the estate is realised if it is insufficient to pay a dividend, the Assignee shall prepare a statement of accounts and statement of financial position statement of financial position
4: Every statement of accounts and statement of financial position
5: Notice of the filing of every such statement of accounts and statement of financial position Section 132 substituted 19 March 1990 5(1) Insolvency Amendment Act 1990 The words statement of financial position (3) to (5) substituted 1 October 1997 balance sheet 6(1) Financial Reporting Amendment Act 1997
132A: Auditor-General may audit Assignee's accounts
1: The Auditor-General may, at the Auditor-General's discretion, audit—
a: the books of account of the Assignee in respect of any bankruptcy:
b: any statement of accounts and statement of financial position prepared by the Assignee under section 132(3)
c: any account maintained by the Assignee for the purposes of this Act.
2: For the purposes of this section, the Auditor-General has the same powers as the Auditor-General has under the Public Audit Act 2001 Section 132A inserted 19 March 1990 5(1) Insolvency Amendment Act 1990 Subsection (1)(b) amended 1 October 1997 6(1) Financial Reporting Amendment Act 1997 by substituting the words statement of financial position balance sheet Section 132A substituted 1 July 2001 53 Public Audit Act 2001
133: Assignee to apply for order of release
1: After the requirements of section 132 section 132
2: The hearing of the application shall be on a day not less than 14 days and not exceeding 30 days after the date of the advertisement of the intention to apply.
3: On the hearing, the Court shall take into consideration
4: Where the release of an Assignee is withheld, the Court may, on the application of any creditor or person interested, make such order as it thinks just, charging the Assignee with the consequences of any act or default he may have done or made contrary to his duty.
5: An order of the Court releasing the Assignee of a bankruptcy shall, from the date of the pronouncing of the order, discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the bankrupt, or otherwise in relation to his conduct as Assignee of the bankrupt up to the date of the order.
6: Any such order may be revoked only on proof that it was obtained by fraud.
7: If any further property of the bankrupt comes to the hands of the Assignee after the date of an order of release, he shall, after realising or otherwise dealing with that property, apply for and obtain, in the same manner and subject to the same conditions as before-mentioned in respect of the first order of release, a further order of release in respect of his administration of that further property. 1908 No 12 s 150 Subsection (1) amended 5(4)(a) Insolvency Amendment Act 1990 by omitting the words and report Subsection (3) amended 5(4)(b) Insolvency Amendment Act 1990 by omitting the words the Auditor's report, and
134: Surplus to be paid to
Public Trust
1: The Assignee, after deducting where necessary the costs of his release, shall pay any undistributed surplus belonging to the estate then standing to his credit to Public Trust Public Trust
2: Any such surplus placed with Public Trust Public Trust
3: All unclaimed dividends and any other undistributed surplus or other money unclaimed, being the surplus of any bankrupt's estate, shall, after the expiration of 12 months from the date on which it is paid to Public Trust
4: Money for the time being standing to the credit of the Bankruptcy Surplus Account may be used for the payment thereout of any dividend or for the distribution of any money in the matter to which any part thereof originally belonged, or for the payment thereout of any money required for the purposes of this Act and authorised to be so applied.
5: In case of any defalcation by an Assignee or any person employed under any provision of this Act except Parts 15 16 Public Trust 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,
6: Where the creditors of an estate are unable to pay the costs of Court proceedings or legal advice, or the cost of employing an accountant or other expert, or it would be unfair or inequitable that they should do so, the costs or cost may, with the approval of the Official Assignee for New Zealand
7: Subject as aforesaid, the investment, realisation, and disposition of all or any money standing to the credit of the Bankruptcy Surplus Account, and of any profits accruing therefrom, shall be subject to the Acts for the time being in force relating to Public Trust
8: Whenever an application is made to Public Trust Public Trust Public Trust 1908 No 12 s 151 The heading to section 134 amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust Public Trustee See clause 2 Public Trust Act Commencement Order 2002 Subsection (1) amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words to Public Trust into the Public Trust Office amended by substituting the words Public Trust the Public Trustee See clause 2 Public Trust Act Commencement Order 2002 Subsection (2) amended 1 March 2002 170(1) Public Trust Act 2001 substituting the words with Public Trust in the Public Trust Office amended substituting the words Public Trust that Office See clause 2 Public Trust Act Commencement Order 2002 Subsection (3) amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words to Public Trust into the Public Trust Office See clause 2 Public Trust Act Commencement Order 2002 Subsection (5) amended 1 October 1995 10(3) Department of Justice (Restructuring) Act 1995 by substituting the words 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 Minister of Justice Subsection (5) amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust the Public Trustee See clause 2 Public Trust Act Commencement Order Subsection (6) amended 1 October 1995 10(3) Department of Justice (Restructuring) Act 1995 by substituting the words chief executive of the department of State that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act Secretary for Justice Subsection (6) amended 3 June 1998 3(1) Insolvency Amendment Act 1998 substituting Official Assignee for New Zealand chief executive of the department of State that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act Subsection (7) amended 1 March 2002 170(1) Public Trust Act 2001 substituting Public Trust the Public Trust Office See clause 2 Public Trust Act Commencement Order Subsection (8) substituted 1 October 1995 10(3) Department of Justice (Restructuring) Act 1995 Subsection (8) amended 1 March 2002 170(1) Public Trust Act 2001 substituting Public Trust the Public Trustee See clause 2 Public Trust Act Commencement Order
135: High Court to act in aid of overseas Courts
1: The High Court High Court High Court
2: The Court may, if it thinks fit, exercise the powers specified in subsection (1) UK Act, s 122
136: Power of Assignee to return or destroy books
The Assignee may, after 2 years from the date of the order of release in each case of bankruptcy, deliver up to the bankrupt, or his personal representative, at his request all books of accounts deposited with him as Assignee, or destroy or otherwise dispose of them. 1908 No 12 s 166
137: Where bankrupt dies after adjudication
If any bankrupt dies after adjudication, the proceedings in the bankruptcy shall be carried on and continued in all respects as if the bankrupt were living. 1908 No 12 s 168
138: Protection of Assignee
Subject to section 9 1908 No 12 s 169(7)
15: Proposals
139: Interpretation
In this Part of this Act, unless the context otherwise requires, the terms insolvent insolvent person
140: Proposals
1: An insolvent person may, pursuant to this Part of this Act, make a proposal to his creditors in regard to the payment or satisfaction of his debts.
2: A proposal may include all or any of the following:
a: An offer to assign all or any of his property to a trustee for the benefit of his creditors:
b: An offer to pay his debts by instalments:
c: An offer to compromise his debts at less than 100 cents in the dollar:
d: An offer to pay his debts at some time in the future:
e: Any other offer for an arrangement for the satisfaction of his debts.
3: A proposal may include any other conditions for the benefit of the creditors and may be accompanied by a security or guarantee.
4: A proposal shall be in the form prescribed, and shall be accompanied by a statement of affairs in the form prescribed verified by affidavit showing particulars of the insolvent's assets, debts, and liabilities, the name, address, and occupation of every creditor of the insolvent, and the securities (if any) held by each creditor.
5: A proposal shall be signed by the insolvent, and shall have endorsed upon it the name of some person willing to act as trustee for the creditors, and a statement signed by the proposed trustee that he is willing to act.
6: A proposal shall be filed in the office of the Court nearest to where the insolvent resides, and neither the proposal nor any security or guarantee tendered therewith may, without the leave of the Court, be withdrawn pending the decision of the creditors and the Court.
7: The time of the filing of a proposal in the Court shall constitute the time for the determination of claims of the creditors and for all other purposes of this Act.
8: If the creditors at a meeting held pursuant to section 142 not accepted by creditors
141: Provisional trustee
1: Upon the filing of the proposal, the trustee named in the proposal shall become the provisional trustee.
2: The provisional trustee shall forthwith call a meeting of creditors by posting to every known creditor at his last known address—
a: A notice of the date, time, and place of the meeting:
b: A condensed statement of the assets and liabilities of the insolvent:
c: A copy of the proposal and particulars of any security or guarantee:
d: A form of proof of debt:
e: A voting letter in the prescribed form.
3: Any creditor who has proved his claim in the prescribed manner may, at the meeting so called, assent or dissent from the proposal by voting letter addressed to the provisional trustee; and, if it is received by the provisional trustee at or before the meeting of creditors, any such voting letter shall have effect as if the creditor had been present and had voted at the meeting.
142: Meeting of creditors
1: At the meeting of creditors the provisional trustee shall be chairman unless the creditors elect their own chairman.
2: The creditors may examine the insolvent, and may accept the proposal as made or as altered or modified by resolution embodying the terms of the proposal as made, altered, or modified, and may confirm the trustee nominated by the insolvent or appoint some other person willing to act as trustee, and thereupon that person shall become the trustee.
3: A resolution under subsection (2) section 39
4: At a meeting to consider a proposal, the creditors, with the consent of the insolvent, may include such provisions or terms in the proposal with respect to the supervision of the affairs of the insolvent as they deem advisable.
143: Approval of proposal by Court
1: Upon acceptance of the proposal by the creditors, the trustee shall forthwith apply to the Court for its approval, and shall, not less than 10 days before the date of the hearing, send notice of the hearing of the application in the prescribed form to the insolvent and to every known creditor.
2: The Court shall, before approving a proposal, hear any objection which may be made by or on behalf of any creditor.
3: The Court may refuse to approve the proposal if it is of the opinion—
a: That the provisions of this Part of this Act have not been complied with; or
b: That the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors; or
c: That for any reason it is not expedient that the proposal should be approved.
4: No proposal shall be approved by the Court if it does not provide for the payment in priority to other claims of all claims directed to be so paid in the distribution of the property of a bankrupt and for the payment of all proper fees and expenses of the trustee of and incidental to the proceedings arising out of the proposal.
5: A proposal approved by the Court shall be binding on all the creditors whose debts are provable under this Part of this Act and are affected by the terms of the proposal.
6: At the time a proposal is approved, the Court may correct or supply any accidental or formal error or omission therein but no alteration in the substance of the proposal shall be made.
7: The approval of the Court shall be conclusive as to the validity of the proposal.
8: Upon approval of the proposal by the Court it shall be the duty of the insolvent to do all acts and things necessary to put the proposal into effect.
144: Effect of approval by Court and duty of trustee
1: After the approval of the proposal by the Court, no creditor whose debt is provable under this Part of this Act shall, in respect of that debt and while the proposal remains in force,—
a: Except with the leave of the Court given on such terms as the Court thinks fit, file a creditor's petition against the insolvent or proceed with such a petition filed before the filing of the proposal; or
b: Except with the leave of the Court given on such terms as the Court thinks fit,—
i: Enforce any civil remedy against the property or person of the insolvent; or
ii: Commence any legal proceeding in respect of the debt.
2: After the approval of the proposal by the Court, the trustee shall be responsible to get in and take control of any property of the insolvent that is the subject of the proposal, and to administer and distribute all such property in accordance with the terms of the proposal, and generally to give effect to the terms of the proposal, and may sell the same in accordance with the provisions of the proposal, but if there is no provision in the proposal directing the method of sale then he shall sell in accordance with the provisions of section 72
3: The trustee shall, within one month (or such longer period as the Registrar may allow) after the expiration of a period of 6 months from the approval of the proposal by the Court and of every subsequent period of 6 months, and within one month after he ceases to act as trustee, file with the Registrar an abstract in the prescribed form showing his receipts and payments during that period of 6 months, or (where he ceases to act as aforesaid) during the period from the end of the period to which the last preceding abstract related up to the time of his so ceasing, and the aggregate amount of his receipts and of his payments during all preceding periods since his appointment.
4: Every trustee who makes default in complying with the provisions of subsection (3)
145: Cancellation or variation of proposal
1: On the application of any creditor or of the trustee, at any time after the Court has approved the proposal, if the Court is satisfied—
a: That the facts disclosed in the affidavit of the insolvent accompanying the proposal did not substantially set out the true position or that the insolvent gave wrong or misleading replies at his examination and that it was unlikely that the proposal would have been accepted had the true facts been disclosed; or
b: That the insolvent has failed to carry out or comply with the terms of the proposal; or
c: That the proposal cannot be proceeded with without injustice or undue delay to the creditors generally; or
d: That for any other reason the proposal ought to be varied or terminated— the Court may vary or cancel the proposal, and may (if asked to do so by the applicant or any other creditor) adjudge the insolvent bankrupt.
2: Where an order has been made cancelling a proposal, unless the Court otherwise orders, all property of the insolvent vested in the trustee and not sold or otherwise disposed of under any contract for sale or disposition entered into by the trustee while it was vested in him is hereby vested (subject to section 42
3: Any order made by the Court pursuant to subsection (1)
4: Upon the filing of a petition by the insolvent under section 21
16: Summary instalment orders
146: Power to make summary instalment orders
1: Where—
a: A debtor, or a creditor with the consent of the debtor, alleges that the debtor is unable to pay forthwith his debts that would be provable in his bankruptcy and that his total unsecured debts that would be provable in his bankruptcy are not more than $12,000
b: A creditor alleges that a debtor against whom a judgment for the payment of a sum of money has been obtained is unable to pay forthwith his debts that would be provable in his bankruptcy and that his total unsecured debts that would be provable in his bankruptcy are not more than $12,000 the debtor or the creditor may apply to a District Court for a summary instalment order in respect of the debtor's debts.
2: The application for a summary instalment order shall be in the prescribed form and, where the applicant is the debtor, shall—
a: State whether the debtor proposes to pay his creditors in full, and if not shall state the amount in the dollar which he proposes to pay and in every case shall state the amount of the weekly or other instalments by which he proposes to pay; and
b: Show the property of the debtor, the names and addresses of his creditors, and the amounts of their respective debts and the nature of each, whether any of the debts are secured and (if so) the value of the security, whether any of the debts are guaranteed by any person, the amount of the earnings of the debtor and the name and address of his employer, if any, and such other matters as may be prescribed.
3: The application for a summary instalment order shall be made to the District Court
4: The District Court $12,000
5: Except as provided in subsection (7)
6: The District Court
7: The District Court Provided that paragraphs (b) (c) (d) District Court
8: The District Court
a: Touching the debtor's future earnings or income:
b: Touching the disposal of goods owned or possessed by the debtor.
9: Upon the making of a summary instalment order it shall be the duty of the supervisor to supervise the compliance by the debtor with the terms of the order. The Court may by the order give the supervisor power to direct the debtor's employer to pay the debtor's wages or salary or any part thereof to the supervisor and to supervise the payment out of the wages or income of the reasonable living expenses of the debtor and his family.
10: Where under subsection (9) District Court
11: All instalments and amounts payable under a summary instalment order shall be paid in the prescribed manner.
12: No summary instalment order shall be made under which the payment of instalments if kept up without default would extend over a period of more than 3 years from the date of the order.
13: A summary instalment order shall not be invalid by reason only that the total amount of the debts proved exceeds $12,000 District Court
14: The debtor or any creditor or the supervisor or the Registrar may at any time apply to a District Court Subsection (1) amended 10 December 1976 Insolvency Amendment Act 1976 by substituting the expression $2,000 one thousand dollars Subsection (1) substituted 1 January 1982 Insolvency Amendment Act 1981 Subsection (1)(a) (b) amended 19 March 1990 6(1) Insolvency Amendment Act 1990 by substituting the expression $12,000 $4,000 Subsection (4) amended 10 December 1976 Insolvency Amendment Act 1976 by substituting the expression $2,000 one thousand dollars Subsection (4) amended 1 January 1982 Insolvency Amendment Act 1981 by substituting the expression $4,000 $2,000 Subsection (4) amended 19 March 1990 6(2) Insolvency Amendment Act 1990 by substituting the expression $12,000 $4,000 Subsection (13) amended 10 December 1976 Insolvency Amendment Act 1976 by substituting the expression $2,000 one thousand dollars Subsection (13) amended 1 January 1982 Insolvency Amendment Act 1981 by substituting the expression $4,000 $2,000 Subsection (13) amended 19 March 1990 6(3) Insolvency Amendment Act 1990 by substituting the expression $12,000 $4,000 The words District Court substituted 1 April 1980 Magistrate's Court 18 (2) District Courts Amendment Act 1979
147: Notice of order and proof of debt
Where a summary instalment order has been made, the following provisions shall apply:
a: Notice of the order shall be sent by the supervisor to every creditor of whom he has notice or whose name is shown on the application by the debtor or who has proved:
b: Subject to the provisions of this section, any creditor of the debtor, on proof of his debt before the supervisor, shall be entitled to be included as a creditor in the administration of the estate of the debtor under the order to the amount of his proof:
c: Any creditor may, by application to the District Court
d: Any person who, after the making of a summary instalment order, becomes a creditor of the debtor may, if he elects to do so on proof of his debt before the supervisor, be included as a creditor in the administration of the estate of the debtor, but shall not be entitled to any dividend under the order until the creditors included in the administration as having been creditors before the making of the order have been paid in accordance with the provisions of the order. County Courts Act 1959 s 149 (UK) The words District Court substituted 1 April 1980 Magistrate's Court 18 (2) District Courts Amendment Act 1979
148: Effect of summary instalment order
1: Subject to the provisions of section 150 District Court
2: Any proceedings against the debtor in any District Court County Courts Act 1959 s 150 (UK) The words District Court substituted 1 April 1980 Magistrate's Court 18 (2) District Courts Amendment Act 1979
149: Disbursement of money paid by debtor
1: Money paid under a summary instalment order shall be distributed by the supervisor in the following order:
a: First in satisfaction of the costs of administration in accordance with the prescribed scale; and
b: Then, when applicable, in satisfaction of the taxed costs of the creditor making the application; and
c: Then in liquidation of the debts in accordance with the order:
d: Then in payment to the debtor of any surplus.
2: When the amount received under a summary instalment order is sufficient to meet all amounts payable under paragraphs (a) (b) (c) County Courts Act 1959 s 153 (UK)
150: Default under summary instalment order
1: If the debtor makes default in the payment of any sum due under a summary instalment order, he shall, unless the contrary is proved, be deemed to have had sufficient means to pay that sum from the date of the order and to have refused or neglected to pay that sum.
2: Upon the failure of a debtor to make payment in accordance with the terms of a summary instalment order, unless a District Court section 148 Imprisonment for Debt Limitation Act 1908 County Courts Act 1959 s 154 (UK) The words District Court substituted 1 April 1980 Magistrate's Court 18 (2) District Courts Amendment Act 1979
151: Offence in respect of obtaining credit
1: Every debtor in respect of whom a summary instalment order has been made commits an offence and is liable on summary conviction to a fine not exceeding $200 or imprisonment for a term not exceeding 3 months if, before all creditors in the administration of the estate under the order have been paid all amounts to which they are entitled under the order, he—
a: Alone or jointly with another person, obtains credit to the extent for the time being of $100
b: Incurs liability to any person to the extent for the time being of $100
2: Notwithstanding anything in section 14 Summary Proceedings Act 1957 1908 No 12 s 138(1)(v) Subsection (1)(a) (b) amended Insolvency Amendment Act 1981 by substituting the expression $100 $40 Subsection (2) inserted Insolvency Amendment Act 1972
152: Rules
In addition to all other powers conferred by the District Courts Act 1947 Section 152 amended 2(3) District Courts Amendment Act 1979 by substituting the word District Magistrates
17: Administration of insolvent deceased estates
153: Interpretation
1: In this Part of this Act, unless the context otherwise requires,— Administration the Administration Act 1969 Administrator the Administration Act 1969 Appointee section 159 Estate paragraph (b)
2: Nothing in this Part of this Act shall affect any property of a deceased person that does not form part of his estate within the meaning of this Part of this Act or the administration of any such property.
3: The administrator of the property of the deceased that does not form part of his estate within the meaning of this Part of this Act shall be deemed to be, and (whether or not there is an administrator) the appointee as such shall be deemed not to be,—
a: His executor or administrator for the purposes of section 6 Deaths by Accidents Compensation Act 1952
b: His personal representative for the purposes of section 43 Trustee Act 1956
c: His representative for the purposes of section 48 of the Workers Compensation Act 1956 The reference in subsection (1) to the Administration Act 1969 replaces
154: Applications to administer under this Part
1: Where an administrator or a person who is applying to the Court for a grant of administration has ascertained that the money forming part of the estate of the deceased, together with the proceeds of the realisation of any assets forming part of that estate which can conveniently be converted into money, will not be, or are not likely to be, sufficient to meet the several claims on that estate, he may apply to the Court to have the estate of the deceased administered under this Part of this Act.
2: An application under this section may be joined with an application for a grant of administration in respect of the will of the deceased or of his property that does not form part of his estate or may be made at any time after such a grant.
3: Either at the time of the filing of the application under this section, or within the prescribed time thereafter, or such further time as the Court on application allows, the applicant for the order shall also file in the Court an account verified by affidavit showing the assets, debts, and liabilities of the deceased so far as they are known to him, which account he may from time to time amend. 1952 No 56 ss 64, 65
155: Application by creditor or beneficiary
Any creditor of the estate of the deceased whose debt would be sufficient to support a bankruptcy petition had the debtor been alive, or any person beneficially interested in the estate of the deceased, may apply to the Court for an order under this Part of this Act, if—
a: The administrator has failed or neglected to make application under this Part of this Act and, on being requested in writing to make such application, fails so to do within 21 days after the date on which he is requested to do so:
b: For a period of 4 months from the date of the death of the debtor no administrator has been appointed and no application has been filed in the Court under section 154 Provided that, if the Court is satisfied that the deceased committed some act of bankruptcy within 3 months before his death or that the estate of the deceased which should have been available for his creditors is diminishing, it may allow an application under this paragraph to be filed within the said period of 4 months. 1952 No 56 ss 66, 67
156: Notice of application under
section 155 When an application has been filed under section 155
157: Jurisdiction of Court
1: On the hearing of an application under this Part of this Act and, in the case of an application by a creditor, upon proof of the debt, the Court, unless it is satisfied that there is a reasonable probability that the estate will be sufficient for the payment of the debts of the deceased and that the creditors will not be prejudiced by the estate being administered in the usual way, may order that the estate be administered under this Part of this Act or (upon cause being shown) may dismiss the application with or without costs, and in either case may order costs to be paid by either party to the other, or out of the estate: Provided that, on an application under paragraph (a)
2: When any application for administration of the estate of a deceased person under this Part of this Act is joined with an application for a grant of administration in respect of the estate or will of the deceased, any Registrar having jurisdiction to grant administration of the estate of any deceased person may hear and determine the application, notwithstanding that a Judge is available to hear the application. 1952 No 56 ss 68, 69
158: Court may order estate to be administered by Official Assignee or
Public Trust If the Court is of the opinion that any estate in respect of which an application for an order to administer under this Part of this Act has been filed is likely to be better administered by the Official Assignee, or by Public Trust Public Trust 1952 No 56 s 70 The heading to section 158 amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust Public Trustee See clause 2 Public Trust Act Commencement Order 2002 Section 158 amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust the Public Trustee See clause 2 Public Trust Act Commencement Order 2002
159: Effect of such an order
1: Upon an order being made to administer an estate under this Part of this Act, the whole of the estate, at the date of the presentation of the application upon which the order is made, is hereby vested in the administrator, or the Official Assignee, or Public Trust
2: If the estate that is so vested in the appointee includes any of the deceased's necessary household furniture and effects which would have passed to the deceased's widow or widower if the estate had not been insolvent, the widow or widower shall, within such time as the appointee allows, be entitled to select and receive as her or his own property necessary household furniture and effects to which he or she would have been entitled if the estate had not been insolvent to the value in the opinion of the appointee of $300: Provided that this provision is without prejudice to any valid security or hire purchase agreement there may be over or in respect of the same and shall not confer any rights upon the widow or widower to any other portion of the deceased's property if the necessary household furniture and effects available for selection do not in the opinion of the appointee amount in value to $300 or are subject to any security or hire purchase agreement.
3: The appointee may allow the widow or widower to receive necessary household furniture and effects to a value in excess of $300, subject to the consent of the creditors expressed by resolution.
4: The appointee may from time to time, subject to the consent of the creditors expressed by resolution, make such allowance of money as he thinks just out of the estate to the widow or widower of the deceased or any member of his or her family for the support of the widow or widower or family. 1952 No 56 s 71 Subsection (1) amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust the Public Trustee See clause 2 Public Trust Act Commencement Order 2002
160: Power of
Public Trust
1: Where an estate of which Public Trust Public Trust Public Trust Public Trust Part 4 of the Public Trust Office Act 1957 or Part 6 Public Trust Act 2001 section 12A 12B Maori Trustee Act 1953 section 148 of the Maori Affairs Amendment Act 1967 Public Trust
2: An election to administer an estate under this Part of this Act may be combined with an election to administer the estate under Part 6 Public Trust Act 2001 section 12A 12B Maori Trustee Act 1953
3:
4: All powers conferred on Public Trust 1952 No 56 s 72 The heading to section 160 amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust Public Trustee See clause 2 Public Trust Act Commencement Order 2002 Subsection (1) amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust the Public Trustee by inserting, before the words the Public Trustee Public Trust or Subsection (1) amended 1 March 2002 170(1) Public Trust Act 2001 by inserting, after the words Part 4 of the Public Trust Office Act 1957 or Part 6 of the Public Trust Act 2001 See clause 2 Public Trust Act Commencement Order 2002 (SR 2002/11) Subsection (2) amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Part 6 of the Public Trust Act 2001 Part 4 of the Public Trust Office Act 1957 See clause 2 Public Trust Act Commencement Order 2002 Subsection (3) repealed 1 March 2002 170(1) Public Trust Act 2001 See clause 2 Public Trust Act Commencement Order 2002 Subsection (4) amended 1 March 2002 170(1) Public Trust Act 2001 by substituting the words Public Trust the Public Trustee See clause 2 Public Trust Act Commencement Order 2002
161: Court to have jurisdiction of Court in bankruptcy
With respect to every estate as to which an application under this Part of this Act is pending and every estate ordered to be administered under this Part of this Act, the Court shall have the same jurisdiction, authority, powers, and functions as for the time being belong to the Court in its bankruptcy jurisdiction and are necessary for the purposes of this Part of this Act. 1952 No 56 s 73
162: Provisions as to administration of estates
1: With respect to every estate as to which an order to administer under this Part of this Act is made, the following provisions shall apply:
a: The appointee shall have the same authorities, powers, and functions as the Official Assignee has under the law for the time being in force relating to bankruptcy with respect to the property of a person adjudged a bankrupt:
b: The deceased debtor's estate shall be distributed in accordance with the following priorities:
i: Payment shall first be made of all proper costs, charges, debts, and expenses attending the due administration of the estate, whether incurred before or after the making of the order:
ii: Payment shall then be made of the reasonable funeral expenses of the deceased:
iii: Payment must then be made of medical expenses and (so far as they are lawfully recoverable) of reasonable expenses for hospital care within the meaning of the Health and Disability Services (Safety) Act 2001, provided for the deceased, being medical or hospital care expenses incurred during the 3 months immediately before the deceased's death:
iv: Payment shall then be made of other claims and interest in accordance with the priorities prescribed by section 104
c: If any surplus remains in the hands of the appointee after payment in full of all the debts due by the deceased debtor, together with the costs of the administration under this Part of this Act and any other money that would be payable in case of bankruptcy, that surplus shall be paid over to or retained by the administrator of the property of the deceased that does not form part of his estate within the meaning of this Part of this Act (if there is such an administrator) or if there is no such administrator shall be applied as may be approved by the Court, having regard to the interests of the persons entitled thereto:
d: Notice to the administrator of a deceased debtor of the presentation by a creditor of an application under this Part of this Act shall, in the event of an order to administer being made thereon, be deemed to be equivalent to notice of an act of bankruptcy, and after that notice no payment or disposition of property made by the administrator, except in pursuance of the order, shall operate as a discharge to him:
e: Every conveyance, transfer, charge, settlement, gift, bill of sale, payment, obligation, proceeding, act, and thing made, incurred, taken, done, or suffered by the deceased in his lifetime which would, if he had become bankrupt at the time of his death, have been voidable as against the Official Assignee or the creditors of the deceased shall be liable to be treated as void or voidable or to be set aside by the appointee as if the deceased had been alive:
f: Notwithstanding anything in this Act, proceedings to avoid or set aside any gift or voluntary settlement, and any proceedings under section 55 section 55
g: Notwithstanding the provisions of section 50
2: For the purposes of paragraph (b) section 104 paragraphs (d) (i)
3: For the purposes of paragraph (c) 1952 No 56 s 75 Subsection (1)(b)(iii) substituted 1 October 2002 58(1) Health and Disability Services (Safety) Act 2001 See
163: Saving of acts done, etc, before order made
Nothing in this Act shall invalidate any payment made or any act or thing done in good faith by the administrator before the time when notice was given to him of an intention to apply for an order to administer under this Part of this Act. 1952 No 56 s 76
18: Miscellaneous provisions affecting insolvency
164: False or misleading statements and refusal to answer questions
Every person commits an offence and is liable on summary conviction to a fine not exceeding $200 or to imprisonment for a term not exceeding 3 months who makes to any Assignee or person concerned in the administration of this Act any statement knowing it to be false in any material particular, or who wilfully misleads or attempts to mislead any such Assignee or person, or who (without lawful justification) fails or refuses to answer any question put to him by the Assignee.
165: Documents exempt from duty
Section 165 repealed 1 January 1972 101(1) Stamp and Cheque Duties Act 1971
166: Remuneration of Assignees
1: Every Assignee is entitled to charge remuneration for carrying out his or her duties and exercising his or her powers as Assignee either—
a: Of an amount equal to the amount fixed under section 166A
b: At, or in accordance with, such rate or rates as may be prescribed under that section.
2: All such remuneration that is paid to the Assignee shall be paid into a Departmental Bank Account. Subsection (2) amended 1 April 1978 Public Finance Act 1977 by substituting a reference to the Consolidated Account Consolidated Revenue Account Section 166 substituted 1 July 1994 4 Insolvency Amendment Act 1994
166A: Rates of remuneration
1: The Governor-General may from time to time, by Order in Council, for the purposes of section 166
2: Without limiting subsection (1)
a: Prescribe an hourly or other rate or rates of remuneration, and different rates may be prescribed in respect of work undertaken in the bankruptcy by different classes of persons:
b: Prescribe a rate or rates by reference to the net value of the assets realised by the Assignee together with such other amounts as may be specified:
c: Prescribe a rate or rates in respect of the exercise of a particular function or power:
d: Prescribe a rate or rates by reference to such other criteria as may be specified. Section 166A inserted 1 July 1994 4 Insolvency Amendment Act 1994
167: Payment of disbursements relating to certain advertisements and postages
The cost of advertising notices of adjudication, of examination of the bankrupt, of annulment, of the time and place of any meeting of creditors, of the filing of accounts, and of the intention to apply for an order of release, and also the cost of all postages and other communications incurred by the Assignee in respect of any estate shall be paid—
a: From any money received by the Assignee by the realisation of the property of the bankrupt, in accordance with section 104(1)(a)
b: Where no such money has been received, or where any such money is insufficient to cover all such costs, from money in the Crown Bank Account appropriated by Parliament for the purpose. Section 167 amended 1 April 1978 Public Finance Act 1977 by substituting a reference to the Consolidated Account Consolidated Revenue Account Section 167 substituted 19 March 1990 7 Insolvency Amendment Act 1990
168: Corporation, etc, not subject to Act
No corporation, association, or company incorporated or registered under any Act in force for the time being relating to the incorporation or registration of corporations, associations, or companies shall be adjudged bankrupt, or make a proposal to its creditors, or be the subject of a summary instalment order under the provisions of this Act. 1908 No 12 s 175
169: Transitional provision
Nothing in this Act shall make void or voidable any gift, conveyance, transfer, security, charge, or other transaction which was made or given or occurred before the commencement of this Act and would not have been void or voidable if this Act had not come into force.
170: Consequential amendments
1: This subsection amended Part 2 Summary Proceedings Act 1957
2: Subsection (2) repealed 23 October 1969 Extradition Amendment Act 1969
171: Repeals and saving
1: The enactments specified in the Schedule to this Act are hereby consequentially repealed.
2: All matters and proceedings commenced under any such enactment, and pending or in progress at the commencement of this Act may be continued, completed, and enforced under this Act.