Insolvency Act 2006

1: Title
This Act is the Insolvency Act 2006.
2: Commencement
1: This Act comes into force on a date to be appointed by the Governor-General by Order in Council; and 1 or more orders may be made bringing different provisions into force on different dates.
2: An order under this section is secondary legislation ( see Part 3 OIC 2007/332 2007-12-03 Insolvency Act 2006 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 2(1) brought into force 3 December 2007 clause 2 Insolvency Act 2006 Commencement Order 2007 Section 2(2) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
1: Interpretation and scope
3: Interpretation
In this Part and Parts 2 to 7 Assignee Official Assignee audio link audiovisual link bankrupt see section 10 charge company Companies Act 1993
a: a building society within the meaning of the Building Societies Act 1965
b: a society incorporated under the Incorporated Societies Act 1908
c: a registered society within the meaning of the Industrial and Provident Societies Act 1908
d: a society incorporated or registered overseas that is similar to any society in paragraphs (a) to (c) Consumers Price Index court current debt repayment order section 355 document
a: any writing on any material; and
b: information recorded or stored by means of a tape recorder, computer, or other device; and material subsequently derived from information so recorded or stored; and
c: a book, graph, or drawing; and
d: a photograph, film, negative, tape, or other device in which 1 or more visual images are embodied so as to be capable (with or without the aid of equipment) of being reproduced excluded debt
a: any amount payable under a maintenance order under the Family Proceedings Act 1980
b: any amount payable under the Child Support Act 1991
c: any student loan balance goods section 16(1) Judge lawyer section 6 Ministry ordinary resolution section 92(1)﻿(a) overseas company prescribed property provable debt section 231(1) Registrar relative A
a: A's parent, spouse, child, brother, or sister; or
b: the parent, child, brother, or sister of A's spouse; or
c: a nominee or trustee for any of them rules secured creditor shares sheriff special resolution section 92(1)﻿(b) spouse A student loan balance section 4(1) supervisor section 345 1967 No 54 s 2 Section 3 audio link inserted 16 December 2017 section 70 Electronic Interactions Reform Act 2017 Section 3 audiovisual link inserted 16 December 2017 section 70 Electronic Interactions Reform Act 2017 Section 3 Consumers Price Index inserted 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 3 current debt repayment order inserted 13 January 2020 section 50(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 3 current summary instalment order repealed 13 January 2020 section 50(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 3 excluded debt inserted 13 January 2020 section 50(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 3 student loan balance replaced 1 April 2012 section 223 Student Loan Scheme Act 2011
3A: Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1AA Section 3A inserted 31 March 2017 section 108 Regulatory Systems (Commercial Matters) Amendment Act 2017
4: Rights and powers under other Acts not affected
This Act does not affect—
a: a local authority's rights under any statute relating to rates and recovery of rates—
i: to obtain a judgment of unpaid rates:
ii: to enforce payment of rates by selling or leasing the land for which the rates are payable:
b: the provisions of the Joint Family Homes Act 1964
c: except where this Act expressly provides, a secured creditor's power to realise or otherwise deal with the charge as if this Act had not been passed. 1967 No 54 s 3(1), (2), (3)
5: Act binds the Crown
This Act binds the Crown. 1967 No 54 s 4
6: Corporations and other entities not subject to Act
1: A corporation, association, or company incorporated or registered under any Act must not—
a: be adjudicated bankrupt:
b: make a proposal to its creditors:
c: be the subject of a debt repayment
d: be admitted to the no asset procedure.
2: However,—
a: Part 16 section 2(1)
b: other bodies corporate may be put into liquidation under or in accordance with the Acts under which they are incorporated or registered. 1967 No 54 s 168 Section 6(1)﻿(c) amended 13 January 2020 section 51 Regulatory Systems (Economic Development) Amendment Act 2019 Section 6(2) inserted 1 March 2017 section 4 Insolvency Amendment Act 2016
2: Nature of bankruptcy, and process of being made bankrupt
1: Bankruptcy and its alternatives
7: Nature of bankruptcy
1: Bankruptcy affects the legal status of a person and has important consequences. These include—
a: the bankrupt's property vests in the Official Assignee:
b: the bankrupt is limited in the business activities he or she can undertake:
c: the Official Assignee may be entitled to recover assets that the bankrupt has transferred before bankruptcy.
2: This section is intended only as a guide to the consequences of bankruptcy.
8: Alternatives to bankruptcy
1: A debtor who is insolvent may have an alternative to bankruptcy, such as—
a: making a proposal to creditors ( see subpart 2
b: paying creditors in instalments under a debt repayment see subpart 3
c: entry to the no asset procedure ( see subpart 4
2: This section is intended only as a guide to the alternatives to bankruptcy. Section 8(1)﻿(b) amended 13 January 2020 section 52 Regulatory Systems (Economic Development) Amendment Act 2019
2: Process of being made bankrupt
9: Introduction to subpart 2
1: This subpart describes how a person is adjudicated bankrupt.
2: In this subpart, the person who is adjudicated bankrupt is called the debtor Adjudication
10: Adjudication
1: Adjudication occurs when a debtor is adjudicated bankrupt.
2: A debtor is adjudicated bankrupt if either—
a: a creditor of the debtor applies to the court for an order of adjudication, and the court makes the order; or
b: the debtor files an application with the Assignee for adjudication.
11: Adjudication by court
1: A court may adjudicate the debtor bankrupt if—
a: a creditor of the debtor has applied under section 13
b: the debtor has committed an act of bankruptcy.
2: The court's options in dealing with a creditor's application are set out in sections 36 to 44
3: What is an act of bankruptcy sections 17 to 28
12: Adjudication on debtor's initiative
1: A debtor may be adjudicated bankrupt by filing an application for adjudication with the Assignee.
2: The requirements for a debtor's application are set out in sections 45 46
3: The procedure for filing a debtor's application is set out in section 49 Court adjudication on creditor's application
13: When creditor may apply for debtor's adjudication
A creditor may apply for a debtor to be adjudicated bankrupt if—
a: the debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and
b: the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and
c: the debt is a certain amount; and
d: the debt is payable either immediately or at a date in the future that is certain. 1967 No 54 s 23
14: Application by secured creditor
The court must not make an order of adjudication on the application of a secured creditor unless the creditor has established that the amount of the debt exceeds the value of the charge by at least $1,000. 1967 No 54 s 25
15: Court's permission required for withdrawal of application
A creditor may only withdraw an application for adjudication with the permission of the court. 1967 No 54 s 26(10) Acts of bankruptcy
16: Requirement of act of bankruptcy
1: A debtor must not be adjudicated bankrupt on a creditor's application unless the debtor has committed an act of bankruptcy within the period of 3 months before the creditor files the application.
2: The acts of bankruptcy are set out in sections 17 to 28
17: Failure to comply with bankruptcy notice
1: A debtor commits an act of bankruptcy if—
a: a creditor has obtained a final judgment or a final order against the debtor for any amount; and
b: execution of the judgment or order has not been halted by a court; and
c: the debtor has been served with a bankruptcy notice; and
d: the debtor has not, within the time limit specified in subsection (4),—
i: complied with the requirements of the notice; or
ii: satisfied the court that he or she has a cross claim against the creditor.
2: The form that the bankruptcy notice must take is set out in section 29
3: The debtor must have been served with the bankruptcy notice in New Zealand, unless the court gave permission for the service of the notice on the debtor outside New Zealand.
4: The time limit
a: if the debtor is served with the bankruptcy notice in New Zealand, 10 working days after service; or
b: if the debtor is served outside New Zealand, the time specified in the order of the court permitting service outside New Zealand.
5: In this section, a creditor who has obtained a final judgment or a final order includes a person who is for the time being entitled to enforce a final judgment or final order.
6: In this section, if a court has given permission for enforcing an arbitration award that the debtor pay money to the creditor,—
a: final order
b: proceedings
7: In subsection (1)﻿(d)﻿(ii), cross claim
a: is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and
b: the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was obtained. 1967 No 54 s 19(1)﻿(d), (2)
18: Disposition of property to trustee for benefit of creditors
1: A debtor commits an act of bankruptcy if, in New Zealand or elsewhere, the debtor disposes of all, or substantially all, of the debtor's property to a trustee for the benefit of all or any of the debtor's creditors.
2: This section is subject to section 41(3)﻿(a) 1967 No 54 s 19(1)﻿(a)
19: Fraud or intent to prefer a creditor
A debtor commits an act of bankruptcy if the debtor takes any of the following steps fraudulently or with an intent to give any creditor an advantage over other creditors:
a: disposes of his or her property, or part of it:
b: creates a charge on his or her property or gives any security in it:
c: makes any payment:
d: incurs any obligation. 1967 No 54 s 19(1)﻿(b)
20: Departure from New Zealand
A debtor commits an act of bankruptcy if the debtor takes any of the following steps with intent to defeat or delay his or her creditors:
a: departs, attempts to depart, or prepares to depart, from New Zealand:
b: if the debtor is already outside New Zealand, remains there. 1967 No 54 s 19(1)﻿(c)
21: Avoidance of creditors
A debtor commits an act of bankruptcy if the debtor, with intent to defeat or delay his or her creditors, avoids them by, for example, leaving or keeping away from the debtor's home, or by staying within that home. 1967 No 54 s 19(1)﻿(c)
22: Notice of suspension of debts
A debtor commits an act of bankruptcy if the debtor notifies any of the debtor's creditors that the debtor has suspended, or is about to suspend, payment of the debtor's debts. 1967 No 54 s 19(1)﻿(e)
23: Admission to creditors of insolvency
1: A debtor commits an act of bankruptcy if the debtor admits at a meeting of creditors that he or she is insolvent and—
a: a majority of the creditors present at the meeting requires the debtor to file an application for adjudication; or
b: the debtor agrees to file an application for adjudication and does not do so within 2 working days after the meeting.
2: In subsection (1)﻿(a), majority 1967 No 54 s 19(1)﻿(f)
24: Possession under execution process
1: A debtor commits an act of bankruptcy if—
a: an execution process has been issued against the debtor or property of the debtor; and
b: property of the debtor has been taken into possession under the execution process; and
c: the judgment or order for which the execution process has been issued is not satisfied within 5 working days after possession has been taken.
2: In this section, execution process
a: a writ of sale; or
b: a writ of possession; or
c: a writ of arrest; or
d: a writ of sequestration.
3: The period of 5 working days in subsection (1)﻿(c) is qualified if an interpleader application has been made in respect of the debtor's property that has been taken into possession. In that case the period of 5 working days does not include the days that elapse between—
a: the date when the application is made; and
b: the date when the application is finally determined, withdrawn, abandoned, or otherwise resolved. 1967 No 54 s 19(1)﻿(g)
25: Writ of sale
1: A debtor commits an act of bankruptcy if—
a: a writ of sale directed against any land of the debtor, or any interest in that land, has been delivered to a sheriff; and
b: as part of the execution process, the land or interest has been advertised for sale in at least 1 newspaper published or circulating in the town or district in which the land is situated.
2: However, subsection (1) does not apply, and an act of bankruptcy is not committed, if the judgment or the order under which the writ of sale has been issued is satisfied within 5 working days after the writ of sale has been both delivered to the sheriff and advertised. 1967 No 54 s 19(1)﻿(h)
26: Return that sufficient goods not found under execution process
A debtor commits an act of bankruptcy if, under an execution process issued against the debtor or the debtor's property, a return is made that sufficient goods and chattels of the debtor could not be found on which to levy the debt. 1967 No 54 s 19(1)﻿(i)
27: Removal or concealment of property
A debtor commits an act of bankruptcy if the debtor takes any of the following steps with intent to prejudice his or her creditors, or to give one creditor an advantage over another:
a: removes or attempts to remove any of the debtor's property from any place:
b: conceals or attempts to conceal any of his or her property. 1967 No 54 s 19(1)﻿(j)
28: Unsatisfied judgment for non-payment of trust money
A debtor commits an act of bankruptcy if—
a: the debtor is required by law to keep a trust account; and
b: judgment has been given against the debtor for nonpayment of trust money; and
c: the judgment is not satisfied within 5 working days after the date of the judgment. 1967 No 54 s 19(1)﻿(k) Bankruptcy notice
29: Form of bankruptcy notice
1: The bankruptcy notice must—
a: be in the prescribed form; and
b: require the debtor, in relation to the judgment debt or the sum ordered to be paid under a final order,—
i: to pay the amount owing, plus costs; or
ii: to give security for the amount owing that satisfies the court or the creditor; or
iii: to compromise the amount owing on terms that satisfy the court or the creditor; and
c: state what are the consequences if the debtor does not comply with the notice; and
d: be served on the debtor in the prescribed manner.
2: The bankruptcy notice may name an agent to act on behalf of the creditor in so far as the notice requires—
a: any payment to be made to the creditor; or
b: any other step to be taken that involves the creditor.
3: In this section,—
a: creditor
b: final order 1967 No 54 ss 19(2) 20(a)
30: Effect of overstatement of amount owing
1: Overstatement in a bankruptcy notice of the amount owing by the debtor does not invalidate the notice, unless—
a: the debtor notifies the creditor that the debtor disputes the validity of the notice because it overstates the amount owing; and
b: the debtor makes that notification within the time specified in the notice for the debtor to comply with the notice.
2: A debtor complies with a notice that overstates the amount owing by—
a: taking steps that would have been compliance with the notice had it stated the correct amount owing (for example, by paying the creditor the correct amount owing plus costs); and
b: taking those steps within the time specified in the notice for the debtor to comply. 1967 No 54 s 20(b) Effect on execution process of filing creditor's application
31: Creditor's execution process must not be issued or continued
1: A creditor who applies for a debtor to be adjudicated bankrupt must not issue an execution process against the debtor in respect of the debtor's property or person to recover a debt on which the application is based.
2: If the creditor has already issued the execution process, the creditor must not continue it.
3: However, the creditor may apply to the court for permission to issue or continue the execution process, as the case may be. 1967 No 54 s 24(1)
32: Execution processes by other creditors
1: After a creditor's application for adjudication has been filed, the debtor or any creditor may apply to the court for an order halting the issue or continuance of an execution process against the debtor in respect of the debtor's property or person by any other creditor.
2: On an application under subsection (1), the court may—
a: halt the execution process, on the terms and conditions (if any) that the court thinks appropriate; or
b: allow the execution process to continue, on the terms and conditions (if any) that the court thinks appropriate. 1967 No 54 s 24(2)
33: Execution process issued by another court
1: This section applies if an execution process has been issued out of a court ( Court 1 Court 2
2: If it is proved to Court 1 that an application for the adjudication of the debtor has been filed in Court 2, Court 1 may—
a: halt the execution process, subject to the terms and conditions (if any) that Court 1 thinks appropriate; or
b: allow the execution process to continue, but on the terms and conditions (if any) that Court 1 thinks appropriate. 1967 No 54 s 24(2)
34: No restriction on execution process if application for adjudication withdrawn or dismissed
The restrictions in sections 31 to 33 1967 No 54 s 24(5)
35: Meaning of execution process
In sections 31 to 34 execution process
a: issuing or proceeding with any of the following writs or warrants under a judgment or order obtained against the debtor in any court in its civil jurisdiction (except a judgment or order for possession of any land or building obtained on the ground that the debtor is a trespasser or that the debtor's tenancy has expired):
i: a writ or warrant for the possession, seizure, or sale of any property:
ii: a writ of attachment:
b: obtaining a garnishee order in favour of a judgment creditor under rule 19.78
c: obtaining an order that a judgment creditor may sue a subdebtor under rule 19.79(3)﻿(c)
d: having an interim charging order made final under rule 17.59 High Court Rules 2016
e: beginning or continuing proceedings in any court for the appointment of a receiver of any property, except an application for the appointment of the Assignee as receiver and manager under section 50
f: exercising any power of re-entry under a lease, or any power terminating a lease:
g: seizing or selling any property by way of distress for rent. 1967 No 54 s 24(4) Section 35(b) amended 1 March 2017 section 261 District Court Act 2016 Section 35(c) amended 1 March 2017 section 261 District Court Act 2016 Section 35(d) substituted 7 July 2010 section 4 Insolvency Amendment Act 2010 Section 35(d) amended 18 October 2016 section 183(c) Senior Courts Act 2016 Court's options when hearing creditor's application
36: Court may adjudicate debtor bankrupt
The court may, at its discretion, adjudicate the debtor bankrupt if the creditor has established the requirements set out in section 13 1967 No 54 s 26(1)
37: Court may refuse adjudication
The court may, at its discretion, refuse to adjudicate the debtor bankrupt if—
a: the applicant creditor has not established the requirements set out in section 13
b: the debtor is able to pay his or her debts; or
c: it is just and equitable that the court does not make an order of adjudication; or
d: for any other reason an order of adjudication should not be made. 1967 No 54 s 26(2)
38: Court may halt application
1: The court may at any time halt the creditor's application for adjudication.
2: The court may halt the application on the terms and conditions (if any), and for the period, that the court thinks appropriate. 1967 No 54 s 26(7)
39: Orders if more than 1 application
1: If there is more than 1 application for adjudication, and 1 application has been halted by a court order, the court may, if there is a good reason, make an order of adjudication on the application that has not been halted.
2: If the court makes an order of adjudication under subsection (1), the court must dismiss the application that has been halted, on the terms and conditions (if any) that the court thinks appropriate. 1967 No 54 s 26(6)
40: Orders if more than 1 debtor
If a creditor's application for adjudication relates to more than 1 debtor, the court may refuse adjudication of 1 or some of the debtors without affecting the application in relation to the remaining debtor or debtors. 1967 No 54 s 26(8)
41: Order that disposition or proposal not act of bankruptcy
1: This section applies if the debtor—
a: has made a disposition of all, or substantially all, of the debtor's property to a trustee for the benefit of all or any of the debtor's creditors; or
b: has made a proposal under Part 5
c: has applied for a debt repayment Part 5
2: The debtor or the trustee or any creditor may apply for an order under this section.
3: On the application, the court may make any of the following orders:
a: order that the disposition or proposal is not an act of bankruptcy:
b: halt or refuse the application for adjudication:
c: order that any other application for adjudication must not be filed:
d: make any order as to costs that the court thinks appropriate:
e: if it orders that costs must be paid to the creditor who has applied for adjudication, order that the costs must be paid out of the debtor's estate.
4: This section does not limit the powers of the court under section 37 1967 No 54 s 26(3) Section 41(1)﻿(c) amended 13 January 2020 section 53 Regulatory Systems (Economic Development) Amendment Act 2019
42: Halt or refusal of application when judgment under appeal
1: This section applies if the creditor's application for adjudication relies on one of the following acts of bankruptcy:
a: the debtor failed to comply with a bankruptcy notice ( see section 17
b: a judgment against the debtor for non-payment of trust money is not satisfied within 5 working days after the date of the judgment ( see section 28
2: If the debtor has appealed against the judgment or order underlying the bankruptcy notice or the judgment for nonpayment of trust money, as the case may be, and the appeal is still to be decided, then the court may—
a: halt the creditor's application for adjudication; or
b: refuse the application. 1967 No 54 s 26(4)
43: Court may halt application while underlying debt determined
1: This section applies if the debtor appears in opposition to a creditor's application and the debtor says either—
a: that he or she does not owe a debt to the creditor; or
b: that he or she does owe a debt to the creditor, but the debt is less than $1,000.
2: The court may, instead of refusing the application, halt the application so that the question of whether the debt is owed, or how much of the debt is owed, can be resolved at a trial.
3: As a condition of halting the application, the court may require the debtor to give security to the creditor for any debt that may be established as owing by the debtor to the creditor, and for the costs of establishing the debt. 1967 No 54 s 26(5)
44: Substitution of creditor
1: The court may substitute another creditor ( Creditor 2 Creditor 1
a: Creditor 1 has not proceeded with due diligence or at the hearing of the application offers no evidence; and
b: the debtor owes Creditor 2 $1,000 or more.
2: In that case, Creditor 2 must file another application for adjudication, but can rely on the act of bankruptcy to which Creditor 1's application related. 1967 No 54 s 26(9) Debtor's application
45: When debtor may file application
A debtor may file an application with the Assignee to have himself or herself adjudicated bankrupt if the debtor has combined debts of $1,000 or more.
46: Debtor must first file statement of affairs
1: A debtor may not file an application for adjudication unless the debtor has first filed with the Assignee a statement of the debtor's affairs in the prescribed form.
2: The Assignee may reject a statement of affairs that in the Assignee's opinion is incorrect or incomplete.
47: Debtor automatically adjudicated bankrupt
1: A debtor who files an application with the Assignee to have himself or herself adjudicated bankrupt is automatically adjudicated bankrupt when the application is filed.
2: That adjudication has the same consequences as if the debtor had been adjudicated bankrupt by the court. 1967 No 54 s 21
48: Debtors' joint application
1: Two or more debtors who are partners in a business partnership may file a joint application.
2: The debtors are automatically adjudicated bankrupt both separately and jointly when the application is filed. 1967 No 54 s 22
49: Steps for filing debtor's application
1: To file an application for adjudication, a debtor must—
a: complete the prescribed application form; and
b: lodge it with the Assignee in accordance with the prescribed procedure.
2: The debtor files the application when it is endorsed by the Assignee as having been received.
3: Appointment of receiver
Power of court to appoint Assignee as receiver
50: Application for appointment of Assignee as receiver
1: After a creditor's application for adjudication has been filed, a creditor of the debtor may apply to the court for an order appointing the Assignee as receiver and manager of all or part of the debtor's property.
2: The court may make the order at any time before it makes an order of adjudication.
3: As part of the order, the court may authorise the Assignee to take all or any of the following steps:
a: take possession of any property:
b: sell any perishable property or property that is likely to fall rapidly in value:
c: control the debtor's business or property as directed by the court.
4: An order for the Assignee's control of the debtor's business must be confined to what is necessary, in the court's opinion, for conserving the debtor's property. 1967 No 54 s 27
51: Additional orders after receiver's appointment
After the appointment of the Assignee as receiver and manager, the court may, on an application by a creditor or the Assignee, make additional orders under section 50 1967 No 54 s 27(2)
52: Appointment of Assignee as receiver and manager must be advertised
The appointment of the Assignee as receiver and manager of the debtor's property must be advertised in accordance with regulations made under this Act for that purpose.
53: Execution process halted
1: A creditor of the debtor must not issue an execution process of the kind referred to in section 35
2: A creditor must not continue an execution process already issued before the advertisement.
3: However, a creditor or any other person interested may apply to the court for an order allowing the issue or continuation of an execution process, and the court may make an order on the terms and conditions that it thinks appropriate. 1967 No 54 s 27(3)
54: Effect when execution process halted
If the execution process is halted under section 53 sections 77 108 to 112 115 1967 No 54 s 24(3)
4: Adjudication
Adjudication
55: Bankruptcy commences on adjudication
The bankruptcy commences on the date and at the time when the debtor is adjudicated bankrupt.
56: Date of adjudication
In this Act, date of adjudication
a: if the debtor is adjudicated bankrupt on a creditor's application, the date and time when the court made the order of adjudication; or
b: if the debtor is adjudicated bankrupt on the debtor's application, the date and time when the debtor filed the application ( see section 49(2) 1967 No 54 s 28
57: Date and time of adjudication must be recorded
1: If the debtor is adjudicated bankrupt on a creditor's application, the court must record the date and time when the order was made.
2: If the debtor is adjudicated bankrupt on the debtor's application, the Assignee must record on the application the date and time when the debtor filed the application. 1967 No 54 s 28A
58: Registrar must notify Assignee of adjudication by court
The Registrar must notify the Official Assignee as soon as possible after the court makes an order of adjudication.
59: Official Assignee must nominate Assignee
The Official Assignee must nominate an Assignee to be the Assignee of the debtor's property, and may at any time direct that another Assignee is the Assignee of the debtor's property.
60: Presumption that act or transaction entered into or effected after adjudication
1: This section applies if there is doubt whether an act was done, or a transaction entered into or effected, before or after the date of adjudication.
2: The presumption is that the act was done, or the transaction entered into or effected, after the date of adjudication, but the presumption does not apply if the contrary is proved.
61: Adjudication final and binding
Unless an adjudication is appealed under this Act,—
a: no one can later assert that the adjudication was not valid or that a prerequisite for adjudication was absent; and
b: the adjudication is binding on all persons. 1967 No 54 s 30
62: Public register of discharged and undischarged bankrupts
1: The Assignee must maintain a public register of discharged and undischarged bankrupts.
2: The register must be maintained in accordance with subpart 5
5: What happens on adjudication
63: Debtor adjudicated bankrupt called the bankrupt
In this Act, a debtor who has been adjudicated bankrupt is called the bankrupt
64: Outline of what happens on adjudication
1: On adjudication—
a: the Assignee must advertise the adjudication; and
b: the bankrupt must file with the Assignee a statement of his or her affairs, if the bankrupt has not already done so; and
c: the Assignee may call a meeting of the bankrupt's creditors; and
d: proceedings to recover certain debts must be halted; and
e: the property of the bankrupt vests in the Assignee.
2: This section is a guide only to the immediate consequences of adjudication. Assignee must advertise adjudication
65: Assignee must advertise adjudication
1: The Assignee must advertise the adjudication of the bankrupt as soon as practicable after it has occurred.
2: The Assignee must advertise the adjudication in the prescribed manner.
3: Subsection (1) is subject to section 66 1967 No 54 s 31
66: Order that Assignee must not advertise pending appeal or application for annulment
The court may order that the Assignee must not advertise the adjudication if the bankrupt has appealed against an order of adjudication or if the bankrupt has applied for an annulment of the adjudication. Bankrupt's statement of affairs
67: Bankrupt must file statement of affairs with Assignee
1: After adjudication, the bankrupt must file with the Assignee a statement of the bankrupt's affairs in the prescribed form, unless the bankrupt has already filed a statement under section 46
2: The Assignee may reject a statement of affairs that in the Assignee’s opinion is incorrect or incomplete. 1967 No 54 s 33 Section 67(2) inserted 13 January 2020 section 54 Regulatory Systems (Economic Development) Amendment Act 2019
68: Notice that bankrupt must file statement of affairs
1: As soon as practicable after adjudication, the Assignee must send the bankrupt a notice in the prescribed form stating—
a: that the bankrupt has been adjudicated bankrupt; and
b: that the bankrupt must file a statement of the bankrupt's affairs in the prescribed form; and
c: the time when the statement must be filed.
2: The Assignee must send the notice to the address of the bankrupt given in the application for adjudication or the bankrupt's last known address.
3: This section does not apply if the bankrupt has already filed a statement under section 46 1967 No 54 s 33(1)
69: Time for filing statement of affairs
The bankrupt must file a statement of the bankrupt's affairs in the prescribed form with the Assignee within 10 working days after receiving the Assignee's notice under section 68(1)
70: Bankrupt may file additional or amended statements or answers
At any time after filing a statement of affairs with the Assignee under section 46 67 Assignee must call meeting of creditors
71: Assignee must call meeting of creditors
1: After adjudication, the Assignee must call the first meeting of the bankrupt's creditors, unless the Assignee dispenses with the meeting under section 73
2: The Assignee may call the meeting by giving notice of the time and place of the meeting to—
a: the bankrupt; and
b: each creditor named in the bankrupt's statement of affairs; and
c: any other creditors known to the Assignee.
3: The Assignee must advertise the time and place of the meeting in the prescribed manner. 1967 No 54 s 34(1), (2)
72: Time when meeting must be held
1: The first creditors' meeting must be held—
a: within 25 working days after the bankrupt files the bankrupt's statement of affairs; or
b: if the bankrupt is late in filing the statement or does not file a statement at all, at the latest within 25 working days after adjudication.
2: However, the Assignee may delay calling the first creditors' meeting if the Assignee considers that there are special circumstances that justify the delay. 1967 No 54 s 34(1)
73: Assignee may dispense with first creditors' meeting
1: The Assignee need not call a first creditors' meeting if the Assignee—
a: decides that the meeting should not be called; and
b: sends each creditor named in the bankrupt's statement of affairs, and any other creditor known to the Assignee, a notice that complies with section 74
c: does not receive, within 10 working days after the Assignee's notice was sent, written notice from a creditor requiring the Assignee to call the meeting.
2: In deciding whether the meeting should not be called, the Assignee must consider—
a: the bankrupt's assets and liabilities; and
b: the likely result of the bankruptcy; and
c: any other relevant matters. 1967 No 54 s 34A
74: Notice that first creditors' meeting should not be called
The Assignee's notice to creditors under section 73(1)﻿(b)
a: state that the Assignee considers that the first creditors' meeting should not be called; and
b: give the reasons for not calling the meeting; and
c: state that the Assignee will not call the meeting unless a creditor gives the Assignee written notice, within 10 working days after the Assignee's notice was sent, requiring the Assignee to call the meeting. 1967 No 54 s 34A
75: Documents to be sent with notice of meeting
1: The Assignee must send the following documents with the notice of the first creditors' meeting:
a: a summary of the bankrupt's statement of assets and liabilities; and
b: extracts from, or a summary of, the bankrupt's explanation of the causes of the bankruptcy; and
c: any comments on the bankruptcy that the Assignee chooses to make.
2: However, subsection (1) does not apply if the Assignee has not received the bankrupt's statement of affairs when the notice is sent.
3: A failure in sending or receiving the documents in subsection (1) does not affect the validity of the proceedings at the meeting. 1967 No 54 s 35 Court proceedings are halted
76: Effect of adjudication on court proceedings
1: On adjudication, all proceedings to recover any debt provable in the bankruptcy are halted.
2: However, on the application by any creditor or other person interested in the bankruptcy, the court may allow proceedings that had already begun before the date of adjudication to continue on the terms and conditions that the court thinks appropriate. 1967 No 54 s 32 Execution process
77: Execution process must not be begun or continued after adjudication advertised
1: A creditor must not begin or continue an execution, attachment, or other process in respect of the bankrupt's property or person, for the recovery of a debt provable in the bankruptcy, after—
a: the Assignee has advertised the bankrupt's adjudication; or
b: the Assignee has given notice of the adjudication to the creditor.
2: After advertisement of the adjudication or notice by the Assignee to the creditor, a creditor must not seize or sell any property by way of distress for rent due and owing by the bankrupt, but the creditor may continue with the distress procedure if already begun. 1967 No 54 s 50(5) Bankrupt's death
78: Effect of bankrupt's death after adjudication
If the bankrupt dies after adjudication, the bankruptcy continues in all respects as if the bankrupt were alive. 1967 No 54 s 137
6: Role of creditors
79: Overview of creditors' role in bankruptcy
The role of the creditors in the bankruptcy is primarily to—
a: attend meetings of the creditors; and
b: submit proofs of the debts of the bankrupt. Creditors' meetings
80: Types of creditors' meetings
1: There are 2 types of creditors' meetings:
a: the first creditors' meeting; and
b: subsequent meetings.
2: The rules for calling the first creditors' meeting are set out in sections 71 to 75
81: Subsequent meetings
1: The Assignee may call subsequent meetings of creditors.
2: The Assignee must call a subsequent meeting if required to do so by one-quarter in number and value of the creditors who have proved their debts.
3: The Assignee must call the meeting by taking the steps set out in section 71(2) and (3) 1967 No 54 s 36
82: Meeting and resolution not defective for lack of notice
A creditors' meeting, and the resolutions passed at the meeting, are valid even if some creditors did not receive the notice of the meeting, unless a court orders otherwise. 1967 No 54 s 40(6) Conduct of creditors' meetings
83: Chairperson
1: The chairperson of a creditors' meeting is the Assignee or a person appointed by the Assignee to be the chairperson.
2: However, if neither the Assignee nor the person (if any) appointed by the Assignee to be the chairperson attends the meeting, the creditor or creditors may elect one of themselves to act as chairperson for the purpose of the meeting, but only if that person is entitled to vote at the meeting.
3: A person appointed by the Assignee or elected by the creditors to act as chairperson may administer any oath that the Assignee could have administered if the Assignee had attended the meeting. 1967 No 54 s 37(1)
84: Chairperson may adjourn meeting
The Assignee or the chairperson of a meeting may adjourn the meeting from time to time and place to place. 1967 No 54 s 37(3)
85: Assignee must report to meeting
If the Assignee attends a creditors' meeting or an adjournment of the meeting, the Assignee—
a: must report on the administration of the bankrupt's estate; and
b: must give any creditor any further information that the creditor may properly require; and
c: must, if reasonably required, produce for the meeting (or its adjournment) all accounting records, deeds, and papers in the Assignee's possession that relate to the bankrupt's property. 1967 No 54 s 37(4)
86: Attending creditors' meeting
1: A person may attend a creditors' meeting—
a: by being physically present at the time and place appointed for the meeting; or
b: if the Assignee makes it available, by means of an audio or audio-visual link, so that all those participating in the meeting can hear and be heard by each other.
2: A creditor may also attend by voting by postal or electronic vote under section 93
87: Bankrupt may be required to attend and be questioned
1: The bankrupt must, if required by the Assignee, attend all creditors' meetings by being physically present or present by an audio or audio-visual link.
2: The Assignee, the chairperson of a creditors' meeting, a creditor, or a representative of a creditor may question the bankrupt as to his or her property, conduct, or dealings. The chairperson of the meeting must allow only questions that relate to the bankrupt's property, conduct, or dealings.
3: The questioning may be on oath.
4: The bankrupt must sign a statement of the bankrupt's evidence given under the questioning, if required to do so by the Assignee or the chairperson of the meeting. 1967 No 54 s 37(2)
88: Attendance by non-creditors
A person who is not a creditor of the bankrupt may attend a creditors' meeting with the consent of—
a: the Assignee; or
b: the creditors attending the meeting, voting by ordinary resolution. 1967 No 54 s 37(5)
89: Minutes and record of meeting
1: The Assignee must ensure that minutes are kept of every creditors' meeting.
2: The Assignee or the chairperson must sign the minutes.
3: The Assignee may record the meeting, but only with the consent of each person attending the meeting. 1967 No 54 s 37(6)
90: Number of persons for valid meeting
1: For a valid creditors' meeting, at least the following persons must attend:
a: the Assignee or a person who represents the Assignee; and
b: a creditor or a person who represents a creditor.
2: The meeting lapses if those persons do not attend, and the Assignee may call another meeting. 1967 No 54 s 38
91: Who may represent creditor or bankrupt
1: At a creditors' meeting, any of the following persons may represent a creditor and, if the bankrupt attends, any of the following persons except the person in paragraph (d) may represent the bankrupt:
a: a lawyer:
b: an accountant:
c: a person who keeps the creditor's or bankrupt's accounts:
d: in the case of a creditor, a person who is the creditor's authorised agent under a power of attorney:
e: a person who satisfies the Assignee that he or she represents the creditor or bankrupt:
f: in the case of a partnership, a partner.
2: In addition to the persons listed in subsection (1), a creditor may be represented,—
a: in the case of the Crown, by any officer of the appropriate government department:
b: in the case of a public body, by an officer of that body:
c: in the case of a company, by a director, or its general manager or accountant, or by a person authorised in writing by one of those persons. 1967 No 54 s 39
92: Voting at meetings
1: For a creditors' meeting to pass—
a: an ordinary resolution, a majority in number and value of the creditors (or their representatives) who attend and who vote on the resolution must vote in favour of it:
b: a special resolution, three-quarters in number and value of the creditors (or their representatives) who attend and who vote on the resolution must vote in favour of it.
2: For the purposes only of determining whether the requisite majority by value has voted in favour of a resolution,—
a: the Assignee may admit or reject proofs of debt; and
b: the Assignee may adjourn the meeting in order to admit or reject proofs of debt; and
c: a person whose debt has been admitted is a creditor. 1967 No 54 s 40(1)
93: Postal and electronic votes
1: A creditor who is entitled to vote at a creditors' meeting may vote on a resolution to be put to the meeting—
a: by postal vote; or
b: by electronic vote, if the voting paper for the resolution allows it, in accordance with the procedure specified in the voting paper.
2: A postal or electronic vote must reach the Assignee at least 2 working days before the meeting begins if it is to be counted at the meeting.
3: A voting paper for each resolution to be put to a creditors' meeting must accompany the notice of the meeting, together with instructions for returning the voting paper or electronic vote (if allowed by the voting paper under section 93(1)﻿(b)
94: Who may vote at creditors' meeting
Creditors of the bankrupt who are entitled to vote, or their representatives, may vote at a creditors' meeting, but this rule is qualified by the provisions of sections 95 to 97
95: When secured creditor may vote
A debt that is secured does not entitle the creditor to vote unless the creditor has taken one of the following steps under this Act:
a: surrendered the charge; or
b: valued the charge; or
c: realised the charge. 1967 No 54 s 40(2)
96: When creditor under bill of exchange or promissory note may vote
1: A debt on, or secured by, a current bill of exchange or promissory note does not entitle the creditor to vote unless the creditor is willing to take the following steps:
a: treat a qualifying liability (which is defined in subsection (2)) as a charge in the creditor's hands; and
b: estimate the value of the charge; and
c: deduct the value of the charge from the creditor's claim for the purposes of voting (but not for the purposes of distribution under subpart 10
d: show the bill or note to the Assignee when the Assignee requires it.
2: In this section, qualifying liability
a: is liable on the bill or note antecedently to the debtor; and
b: is not a bankrupt. 1967 No 54 s 40(3)
97: Person disqualified from voting through preferential effect
1: A person ( A
2: The persons referred to in subsection (1) are—
a: A:
b: A's business partner, employer, or employee:
c: a creditor that A represents:
d: the business partner, employer, or employee of a creditor that A represents. 1967 No 54 s 40(4)
98: Creditor of partner
The adjudication of a partner in a firm who is indebted to a creditor jointly with 1 or more of his or her partners entitles the creditor to prove the debt for the purpose of voting at any creditors' meeting, and to vote. 1967 No 54 s 40(5)
99: Creditors may appoint expert or committee to assist Assignee
1: A creditors' meeting may pass an ordinary resolution—
a: appointing an expert to assist the Assignee in the administration of the bankrupt's estate; and
b: providing for the expert's remuneration out of the estate.
2: A creditors' meeting may pass an ordinary resolution appointing a committee of any persons to assist the Assignee in the administration of the bankrupt's estate, but in that case the court must approve any remuneration of the members of the committee out of the estate. 1967 No 54 s 41(1), (2) Documents
100: Creditor's right to inspect documents
A creditor, or a lawyer or accountant acting for that creditor, who has lodged a creditor's claim form may at any reasonable time inspect and take extracts or copies of—
a: the bankrupt's accounting records:
b: the bankrupt's answers to questions under section 87
c: the bankrupt's statement of affairs:
d: all proofs of debt:
e: the minutes of any creditors' meeting. 1967 No 54 s 131
3: Dealing with bankrupt and bankrupt's property
1: Status of bankrupt's property
General
101: Status of bankrupt's property on adjudication
1: On adjudication,—
a: all property (whether in or outside New Zealand) belonging to the bankrupt or vested in the bankrupt vests in the Assignee without the Assignee having to intervene or take any other step in relation to the property, and any rights of the bankrupt in the property are extinguished; and
b: the powers that the bankrupt could have exercised in, over, or in respect of any property (whether in or outside New Zealand) for the bankrupt's own benefit vest in the Assignee.
2: This section is subject to section 104 1967 No 54 s 42(1), (2)
102: Status of property acquired during bankruptcy
1: Between the commencement of bankruptcy and discharge of the bankrupt,—
a: all property (whether in or outside New Zealand) that the bankrupt acquires or that passes to the bankrupt vests in the Assignee without the Assignee having to intervene or take any other step in relation to the property, and any rights of the bankrupt in the property are extinguished; and
b: the powers that the bankrupt could have exercised in, over, or in respect of that property for the bankrupt's own benefit vest in the Assignee.
2: This section is subject to section 104 section 123
3: This section does not apply to property that is vested in the bankrupt under an order made under section 119(3) 1967 No 54 s 42(2)
103: Property vests in replacement Assignee
If the Assignee is replaced, the property and powers vested in the former Assignee under section 101 102 1967 No 54 s 42(1)
104: Property held in trust by bankrupt
Property held by the bankrupt in trust for another person does not vest in the Assignee. 1967 No 54 s 42(3)
105: Effect of other laws
1: Nothing in the Land Transfer Act 2017 sections 101 to 104
2: Sections 101 to 104 1967 No 54 s 42(5) Section 105(1) amended 12 November 2018 section 250 Land Transfer Act 2017
106: Court may order that money due to bankrupt is assigned to Assignee
1: The court may, on the application of the Assignee, order that any money due to the bankrupt, or any money to become due or payable to the bankrupt, is assigned or charged to, or in favour of, the Assignee.
2: The assignment or charge is a discharge to the person who pays the Assignee. 1967 No 54 s 45A
107: Application of section 274 to payments by bankrupt or assignments by court
The Assignee must apply the following payments in accordance with section 274
a: any amount paid by the bankrupt under section 147
b: any amount paid to the Assignee under an order made under section 106 1967 No 54 s 45B Bankrupt's property subject to execution process
108: When execution creditor may retain execution proceeds
1: This section applies to a creditor who has, before adjudication,—
a: issued execution against the bankrupt's property; or
b: attached a debt due by the bankrupt.
2: The creditor may retain the benefit of the execution or attachment (including the proceeds) only if the creditor completed the execution or attachment—
a: before adjudication; and
b: before the creditor had notice that an application for adjudication had been filed or that the bankrupt had committed an act of bankruptcy (other than an act of bankruptcy arising out of the creditor's execution or attachment).
3: The creditor may retain as against the Assignee a payment made by the bankrupt in the course of the execution or attachment to avoid the execution or attachment as if—
a: the payment was the proceeds of the execution or attachment; and
b: the execution or attachment was completed when the payment was made.
4: The right of a creditor under this section to retain the benefit of an execution or attachment is subject to sections 194 to 197 1967 No 54 s 50(1), (2), (6)
109: Effect of notice to sheriff of adjudication
1: This section applies if the sheriff has taken the property of a debtor in execution and is served with notice of the debtor's adjudication before the property is sold or before the execution is completed by the receipt or recovery of the full amount of the levy of execution.
2: If the Assignee requires it, the sheriff must deliver to the Assignee any goods and money seized or received in part satisfaction of the execution.
3: The costs of the execution are a first charge on the goods or money delivered to the Assignee, and the Assignee may sell the goods or part of the goods to satisfy the charge. 1967 No 54 s 50(3)
110: Sheriff must retain proceeds of execution for 10 working days
1: This section applies if, under execution of a judgment for a sum of more than $100, the sheriff sells property of the debtor or is paid money in order to avoid a sale.
2: The sheriff must deduct the costs of the execution from the proceeds of sale or the money paid and retain the balance for 10 working days (which in this section is called the 10-day period
3: If the sheriff is served with notice within the 10-day period that the debtor has filed an application for adjudication, the sheriff must pay the balance to the Assignee, who is entitled to retain it as against the execution creditor.
4: If the sheriff is served with notice within the 10-day period that a creditor has filed an application for the adjudication of the debtor, subject to subsection (3),—
a: the sheriff must retain the balance until the application (and any other application of which notice is served on the sheriff pending disposal of the first application) has been disposed of; and
b: the sheriff must,—
i: if adjudication results, pay the balance to the Assignee; or
ii: if adjudication does not result, pay the balance to the execution creditor, who is entitled to retain it as against the Assignee (subject to section 112
5: If the sheriff is not served with notice within the 10-day period that an application for the adjudication of the debtor has been filed, the sheriff must pay the balance to the execution creditor, who is entitled to retain it as against the Assignee. 1967 No 54 s 50(4)
111: Purchaser under sale by sheriff acquires good title
A purchaser in good faith of a debtor's property, on which execution has been levied and which is sold by the sheriff, acquires a good title to the property as against the Assignee. 1967 No 54 s 50(7)
112: Court may set aside rights conferred on Assignee
The court may set aside the rights conferred on the Assignee under sections 109 110 1967 No 54 s 50(8) Validity of property transactions with bankrupt
113: Transaction in good faith and for value after adjudication
1: This section applies to a transaction between a person ( A
2: The transaction is valid as against the Assignee if—
a: A deals with the bankrupt in good faith and for value; and
b: the transaction is completed without an intervention by the Assignee.
3: If A is the bankrupt's bank, a transaction by A dealing with the bankrupt for value includes—
a: the receipt by A of any money, charge, or negotiable instrument from the bankrupt or by the bankrupt's order or direction; and
b: a payment by A to the bankrupt or by the bankrupt's order or direction; and
c: the delivery by A of a charge or negotiable instrument to the bankrupt or by the bankrupt's order or direction.
4: A payment of money or delivery of property by a legal personal representative to, or by the direction of, the bankrupt is a transaction for value. 1967 No 54 s 49(1)﻿(a), (3), (4)
114: Executions and attachments in good faith
1: This section applies to property that the bankrupt has acquired, or that has passed to the bankrupt, after adjudication.
2: An execution or attachment against the property is valid as against the Assignee if it is—
a: in good faith; and
b: in respect of a debt or liability incurred by the bankrupt after adjudication; and
c: completed before an intervention by the Assignee. 1967 No 54 s 49(1)﻿(b)
115: When execution or attachment completed for purposes of section 108 or 114
For the purposes of section 108 114
a: an execution against goods is completed by seizure and sale:
b: an attachment of a debt is completed by receipt of the debt:
c: an execution against land is completed by sale or, in the case of an equitable interest, by the appointment of a receiver. 1967 No 54 s 50(2)
116: Assignee's interest in property passes
1: This section applies to the Assignee's interest in property that is acquired by or passes to the bankrupt after adjudication.
2: The Assignee's interest in property to which this section applies ends and passes in the manner and to the extent necessary to give effect to a transaction, execution, or attachment to which section 113 114 1967 No 54 s 49(2) Disclaimer of onerous property
117: Assignee may disclaim onerous property
1: Subject to section 120
2: Subsection (1) applies even if the Assignee has taken possession of the property, tried to sell it, or otherwise exercised rights of ownership in relation to it.
3: The Assignee must, within 10 working days after the disclaimer, send a written notice of the disclaimer to every person whose rights are, to the Assignee's knowledge, affected by it.
4: For the purposes of this section and section 120 onerous property
a: means—
i: an unprofitable contract; or
ii: property of the bankrupt that is unsaleable, or not readily saleable, or that may give rise to a liability to pay money or perform an onerous act; or
iii: a litigation right that, in the opinion of the Assignee, has no reasonable prospect of success or cannot reasonably be funded from the assets of the bankrupt's estate; but
b: does not include—
i: a netting agreement to which sections 255 to 263
ii: any contract of the bankrupt that constitutes a transaction under that netting agreement. 1993 No 105 s 269(1), (2), (4)
118: Effect of disclaimer
A disclaimer by the Assignee—
a: brings to an end, on and from the date of the disclaimer, the rights, interests, and liabilities of the Assignee and the bankrupt in relation to the property disclaimed:
b: does not affect the rights, interests, or liabilities of any other person, except in so far as is necessary to release the Assignee or the bankrupt from a liability. 1993 No 105 s 269(3)
119: Position of person who suffers loss as result of disclaimer
1: A person suffering loss or damage as a result of disclaimer by the Assignee may—
a: claim as a creditor in the bankruptcy for the amount of the loss or damage, taking account of the effect of an order made by the court under paragraph (b):
b: apply to the court for an order that the disclaimed property be delivered to, or vested in, that person.
2: The bankrupt may also apply for an order that the disclaimed property be delivered to, or vested in, the bankrupt.
3: The court may make an order under subsection (1)﻿(b) or (2) if it is satisfied that it is fair that the property should be delivered to, or vested in, the applicant. 1993 No 105 s 269(5), (6)
120: Assignee may be required to elect whether to disclaim
The Assignee loses the right to disclaim if—
a: a person whose rights would be affected by the disclaimer has sent the Assignee a written notice requiring the Assignee to elect whether to disclaim the onerous property in question; and
b: the notice specifies a date to disclaim that is not less than 20 working days after the Assignee has received the notice; and
c: the Assignee does not disclaim the onerous property before the close of that date. 1993 No 105 s 270
121: Liability for rentcharge on bankrupt's land after disclaimer
1: The vesting of land subject to a rentcharge after disclaimer by the Assignee in the Crown, any other person, or their successors in title does not make any of those persons personally liable for the rentcharge.
2: However, this section does not affect the liability of a person in subsection (1) for rentcharge accruing after that person has taken possession or control of the land or has entered into possession of it. 1967 No 54 s 79 Land subject to mortgage
122: Transmission of interest in land
1: This section applies to an interest in land that—
a: is owned by the bankrupt; and
b: is subject to a mortgage or a charge; and
c: is not disclaimed by the Assignee.
2: The Assignee must—
a: register, under the Land Transfer Act 2017
b: give notice to the mortgagee or other person entitled under the charge that the Assignee cannot, or does not intend to, register transmission of the interest in the land.
3: Notice under subsection (2)﻿(b) is notice that the interest has vested in the Assignee, and the mortgagee or person entitled under the charge is, in the event of entering into possession or selling, liable to account to the Assignee as if the Assignee were the registered owner 1967 No 54 s 80(1), (2) Section 122(2)﻿(a) amended 12 November 2018 section 250 Land Transfer Act 2017 Section 122(3) amended 12 November 2018 section 250 Land Transfer Act 2017
123: Assignee cannot claim interest in land if bankrupt remains in possession until discharge
1: The Assignee cannot, after the bankrupt's discharge, claim an interest in land to which section 122(1)
a: was in possession of the interest at the time of adjudication; and
b: remained in possession until discharge from bankruptcy.
2: Subsection (1) applies whether or not the Assignee gave a notice under section 122(2)﻿(b)
3: However, the Assignee may apply to the court for an order that the Assignee is entitled, after discharge, to claim the bankrupt's interest in the land, and the court must have regard to—
a: the good faith of the bankrupt; and
b: the time that has elapsed since adjudication; and
c: the value of any improvements made by the bankrupt; and
d: all other relevant matters. 1967 No 54 s 80(3) Shares and other securities
124: Assignee may transfer shares and other securities
1: The Assignee may transfer the following property belonging to the bankrupt in the same way as the bankrupt could have transferred it if the bankrupt had not been adjudicated bankrupt:
a: securities in a company:
b: securities of the New Zealand Government:
c: securities issued by a local authority:
d: shares in ships:
e: any other property transferable in the records of a company, office, or person.
2: A person whose act or consent is necessary for the transfer of the property must, on the Assignee's request, do whatever is necessary for the transfer to be completed.
3: In the case of the transfer by the Assignee of securities in a company, a shareholder to whom the securities must be offered for sale under the constitution and who agrees to purchase must pay a reasonable price for the securities, whether or not the constitution provides a procedure for fixing the price. 1967 No 54 s 74(1), (2), (3)
125: Assignee may disclaim liability under shares
The Assignee may disclaim any liability under shares owned by the bankrupt in any company by disclaiming the shares as onerous property under section 117 section 119 section 120 1967 No 54 s 78(1)
126: Assignee may be required to elect whether to disclaim liability under shares
The Assignee loses the right to disclaim liability under shares if—
a: the company or a person who has an interest in the shares has sent the Assignee a written notice requiring the Assignee to elect whether to disclaim liability under the shares; and
b: the notice specifies a date to disclaim that is not less than 20 working days after the Assignee has received the notice; and
c: the Assignee does not disclaim liability under the shares before the close of that date. 1967 No 54 s 78(3)
127: Transfer of shares after disclaimer
1: After disclaimer, the Assignee may, subject to the rules of any other Act and to the constitution of the company, transfer the shares in question to any person who has an interest in them.
2: If that person refuses to accept the transfer or if no person has an interest in them, the Assignee may transfer the shares to the bankrupt if the bankrupt consents, and in that case the bankrupt is entitled as against the Assignee to retain the shares and the proceeds if the bankrupt sells them.
3: If the Assignee does not transfer the shares to a person who has an interest in them or to the bankrupt, the board of the company may—
a: sell the shares; or
b: with the court's approval and whatever any other Act may say, cancel the shares as it thinks appropriate.
4: The Assignee is a director of the company for the purposes of transferring, selling, or cancelling the shares under this section if—
a: immediately before adjudication the bankrupt was a director of the company; and
b: the number of directors is less than the minimum number of directors required by law or the company's constitution as a result of the bankrupt's disqualification as a director. 1967 No 54 s 78(4), (5), (6)
128: Company may prove for unpaid calls
1: This section applies if the Assignee has disclaimed liability under shares and the company has not been put into liquidation.
2: The company may prove in the bankruptcy for—
a: the amount of unpaid calls made before adjudication in respect of the bankrupt's shares; and
b: the value of calls to be made in respect of the bankrupt's shares within 1 year after adjudication.
3: The court must determine the value of the calls to be made if the Assignee and the company cannot agree. 1967 No 54 s 78(7) Consumer goods on hire purchase
129: Meaning of hire purchase terms used in this subpart
In sections 130 to 133 cash price consumer goods creditor debtor post-repossession notice section 5 hire purchase agreement section 2(1) purchaser 1967 No 54 s 91(1) Section 129 cash price consumer goods creditor debtor post-repossession notice replaced 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014
130: Restrictions on creditor dealing with consumer goods
1: This section applies if—
a: the bankrupt purchased consumer goods under a hire purchase agreement before adjudication; and
b: the creditor either—
i: took possession of the goods within 21 days before adjudication, and after adjudication still possesses them; or
ii: takes possession of the goods after adjudication.
2: The creditor must not sell or dispose of the consumer goods or part with possession of them (except for storage or repair) until 1 month after the date when the creditor serves a post-repossession section 131 1-month period
3: However, subsection (2) does not apply if the Assignee consents in writing to the creditor selling or disposing of or parting with possession of the consumer goods before the expiry of the 1-month period. 1967 No 54 s 91(2), (3) Section 130(2) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014
131: Assignee's powers in relation to hire-purchase consumer goods
1: The Assignee may,—
a: within the 1-month period, exercise the right under section 83ZD
b: at any time before the creditor sells or agrees to sell consumer goods under section 83Y section 83ZE
2: This section applies no matter what Part 3A 1967 No 54 s 91(4) Section 131(1)﻿(a) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014 Section 131(1)﻿(b) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014 Section 131(2) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014
132: Creditor in possession of consumer goods may prove in bankruptcy if Assignee has not exercised powers
1: This section applies if—
a: a creditor has taken possession of consumer goods purchased under a hire purchase agreement, whether before or after the adjudication of the debtor; and
b: the Assignee has not acted under section 131
2: The creditor may prove in the bankruptcy for the amount (which is subject to the limit in section 83ZM
3: If the creditor does prove in the bankruptcy under subsection (2),—
a: the creditor must submit the following documents with the creditor's claim form:
i: the relevant post-repossession
ii: the statement of account mentioned in section 83ZI
b: the Assignee has the rights conferred on a debtor by subpart 5 1967 No 54 s 91(5) Section 132(2) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014 Section 132(3)﻿(a)﻿(i) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014 Section 132(3)﻿(a)﻿(ii) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014 Section 132(3)﻿(b) amended 6 June 2015 section 82 Credit Contracts and Consumer Finance Amendment Act 2014
133: Creditor may assign consumer goods to Assignee
1: This section applies if—
a: the bankrupt purchased consumer goods under a hire purchase agreement before adjudication; and
b: at the time of adjudication the creditor either—
i: has not taken possession of the goods; or
ii: has taken possession of them and has not sold or disposed of or parted with possession of them.
2: The creditor may assign the consumer goods to the Assignee, and, if the creditor does so, may prove in the bankruptcy for the net balance due to the creditor under the agreement. 1967 No 54 s 91(6) Second bankruptcy
134: Status of bankrupt's property on second bankruptcy
1: Notwithstanding section 102
2: Property that is acquired by, or has passed to, the bankrupt since the first adjudication, including property acquired or that has passed since the second adjudication, vests in the Assignee in the second bankruptcy.
3: However, the court may, if it thinks it appropriate, order that all or part of the following assets or their proceeds vest in the Assignee in the first bankruptcy:
a: assets in the second bankruptcy that, in the court's opinion, were acquired independently of the creditors in the second bankruptcy:
b: assets in the second bankruptcy that devolved upon the bankrupt.
4: A surplus in the second bankruptcy is an asset in the estate in the first bankruptcy, and must be paid to the Assignee in the first bankruptcy. 1967 No 54 s 59(1)﻿(a), (b), (2)
135: Effect of notice to Assignee of application for adjudication
1: This section applies if the Assignee in a bankruptcy receives notice that a creditor has filed an application for a second adjudication.
2: The Assignee must hold property in his or her possession that has been acquired by, or passed to, the bankrupt since the first adjudication until the application for a second adjudication has been dealt with.
3: The Assignee must transfer the property and its proceeds, less any deduction for the Assignee's costs and expenses, to the Assignee in second bankruptcy if the creditor's application results in a second adjudication, or if the bankrupt is automatically adjudicated bankrupt on his or her own application. 1967 No 54 s 59(1)﻿(c) Persons jointly adjudicated bankrupt
136: Separate accounts
In the case of the adjudication of 2 or more persons jointly, the Assignee must keep distinct accounts of—
a: the joint estate; and
b: the separate estate of each bankrupt. 1967 No 54 s 82(1)
137: How joint and separate estates must be applied
1: The joint estate must first be applied to the debts due by the bankrupts jointly.
2: The separate estate of each bankrupt must first be applied to the debts of that bankrupt.
3: Any surplus in the joint estate must be credited to the separate estate of each bankrupt in proportion to the right and interest of each bankrupt in the joint estate.
4: Any surplus in the separate estate of a bankrupt must be credited to the joint estate. 1967 No 54 s 82(1)
2: Duties of bankrupt
138: General duty of bankrupt
1: The bankrupt must, to the best of the bankrupt's ability, assist in the realisation of the bankrupt's property and the distribution of the proceeds among the creditors.
2: This duty is in addition to any other duty imposed on the bankrupt by this Act or by any other enactment or law. 1967 No 54 s 60 Duties in relation to property
139: Bankrupt must disclose property acquired before discharge
The bankrupt must as soon as practicable after acquisition notify the Assignee of any property that is—
a: acquired by, or passes to, the bankrupt before discharge; and
b: divisible among the creditors. 1967 No 54 s 60(b)
140: Bankrupt must deliver property to Assignee on demand
1: On demand by the Assignee, the bankrupt must deliver all or any of the bankrupt's property that is divisible among the creditors, and that is under the bankrupt's possession or control, to the Assignee or a person authorised by the Assignee to receive it.
2: On demand by the Assignee, the bankrupt must deliver to the Assignee, or a person authorised by the Assignee to receive it, any property that is acquired by, or passes to, the bankrupt before his or her discharge. 1967 No 54 s 60(e), (f)
141: Bankrupt must take all steps required in relation to property and distribution of proceeds to creditors
1: The bankrupt must take all the steps (including the steps specified in subsection (2)) in relation to the bankrupt's property, and the distribution of the proceeds to the creditors, that are—
a: required by the Assignee; or
b: prescribed by rules or regulations made under this Act; or
c: directed to be done by the court by an order made in reference to a particular bankruptcy; or
d: directed to be done by the court on an application by the Assignee or a creditor.
2: The steps referred to in subsection (1) include the execution by the bankrupt of powers of attorney, conveyances, transfers, deeds, assurances, and instruments. 1967 No 54 s 60(d) Duties to provide information
142: Bankrupt must give Assignee accounting records and other documents
1: As soon as practicable after adjudication, the bankrupt must—
a: deliver to the Assignee, at the Assignee's office, relevant documents that are in the bankrupt's possession or control; and
b: notify the Assignee of relevant documents that are in the possession or control of any other person.
2: In subsection (1), relevant documents 1967 No 54 s 61(1)
143: Bankrupt must give Assignee information relating to property
1: The bankrupt must,—
a: as soon as practicable after adjudication, give the Assignee a complete and accurate list of the bankrupt's property and of the bankrupt's creditors and debtors, and update the lists as necessary; and
b: give the Assignee any other information relating to the bankrupt's property that the Assignee requires; and
c: attend before the Assignee when required by the Assignee; and
d: verify any statement by statutory declaration when required by the Assignee.
2: The bankrupt may attend before the Assignee for the purposes of subsection (1)﻿(c) by audio link or audiovisual link if the Assignee and the bankrupt agree. 1967 No 54 s 60(a) Section 143(2) inserted 16 December 2017 section 71 Electronic Interactions Reform Act 2017
144: Bankrupt must give Assignee information relating to income and expenditure
When the Assignee requires it, the bankrupt must provide the Assignee with details of his or her income and expenditure since adjudication. 1967 No 54 s 60(c)
145: Bankrupt must notify Assignee of change in personal information
The bankrupt must immediately notify the Assignee of any change in the bankrupt's—
a: address; or
b: employment; or
c: name; or
d: income. 1967 No 54 s 60(g)
146: Bankrupt must give Assignee financial information
1: The bankrupt must give the Assignee (or any person employed by the Assignee) the information and details that are necessary to prepare a statement of financial position of the bankrupt's estate.
2: If required by the Assignee, the bankrupt must, within a reasonable time of adjudication, prepare and deliver to the Assignee full, true, and detailed accounts and statements of financial position that show—
a: details of the bankrupt's trading and stocktaking; and
b: details of the bankrupt's profit and losses during any period in the 3 years before the adjudication.
3: For the bankrupt to prepare the accounts and statements of financial position referred to in subsection (2),—
a: the Assignee must give the bankrupt full access to the bankrupt's books and papers in the Assignee's possession; and
b: if the Assignee thinks it necessary, the bankrupt must be assisted by an accountant at the estate's expense. 1967 No 54 s 61
3: Control over bankrupt during bankruptcy
147: Bankrupt may be required to contribute to payment of debts
1: If required by the Assignee, the bankrupt must pay an amount or periodic amounts during the bankruptcy as a contribution towards payment of the bankrupt's debts.
2: The Assignee may impose conditions in respect of the payments.
3: Before the Assignee may require the bankrupt to make the payment or payments, the Assignee must—
a: have regard to all the circumstances of the bankruptcy and the bankrupt's conduct, earning power, responsibilities, and prospects; and
b: make reasonable allowance for the maintenance of the bankrupt and his or her relatives and dependants.
4: The court may, on the application of the Assignee, order the bankrupt to pay the amount or amounts required by the Assignee.
5: The court may, on the application of the Assignee, the bankrupt, or any creditor,—
a: vary, suspend, or cancel the bankrupt's obligations to make the payments under this section:
b: vary, suspend, or discharge any order made under subsection (4):
c: remit any arrears owing by the bankrupt. 1967 No 54 s 45
148: Onus of proof if bankrupt defaults in making payment
If the bankrupt defaults in making a payment required under section 147 1967 No 54 s 46
149: Prohibition of bankrupt entering business
1: An undischarged bankrupt must not, without the consent of the Assignee or the court, either directly or indirectly,—
a: enter into, carry on, or take part in the management or control of any business:
b: be employed by , or work without reward for,
c: be employed by , or work without reward for,
2: Nothing in this section restricts section 151 1967 No 54 s 62 Section 149(1)﻿(b) amended 13 January 2020 section 55(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 149(1)﻿(c) amended 13 January 2020 section 55(2) Regulatory Systems (Economic Development) Amendment Act 2019
150: Warrant to search for and seize bankrupt's property
1: The court may issue a search warrant to the Assignee or any other person if there is reason to believe that any relevant property is concealed in a locality.
2: The warrant may authorise the Assignee or other person named in the warrant, together with any assistants that may be necessary, to—
a: enter and search the locality; and
b: seize and take possession of any relevant property; and
c: if necessary, use force to enter the locality, whether by breaking open doors or otherwise; and
d: break open any box or receptacle at the locality, by force if necessary.
3: In this section and in section 151 locality relevant property
a: any property of the bankrupt; or
b: any document relating to the bankrupt's property, conduct, or dealings. 1967 No 54 s 65(2)
151: Seizure of bankrupt's property
1: If authorised by a warrant issued by the court, the Assignee or any other person, together with any assistants that may be necessary,—
a: may seize any part of the bankrupt's property in the custody or possession of the bankrupt or of any other person; and
b: with a view to seizing the bankrupt's property, may—
i: break open any building or room of the bankrupt where the bankrupt is believed to be; and
ii: break open any building, room, or receptacle of the bankrupt where the bankrupt's property is believed to be; and
iii: seize and take possession of the bankrupt's property found in the building, room, or receptacle.
2: For the purposes of this section and section 150
a: states the date and time when the warrant was executed; and
b: states the name of the person who executed it.
3: For the purposes of this section and section 150
4: Subsection (3) does not apply if it is impractical to leave a list of property seized or if the bankrupt consents to receiving a list sent in accordance with subsection (5).
5: If subsection (4) applies, the person executing the search must leave with the notice referred to in subsection (2), or with the bankrupt if the bankrupt is present, a notice stating that—
a: relevant property has been seized in the course of the search; and
b: within 5 working days after the execution of the warrant, a list of the property seized will be delivered or sent to the bankrupt or left in a prominent position at the place searched.
6: If subsection (4) applies, the person executing the warrant must ensure that within 5 working days after the execution of the warrant there is delivered or sent to the bankrupt, or left in a prominent position at the place searched, a notice listing the property seized and identifying the place where the property was seized. 1967 No 54 s 65(1)
152: Bankrupt must vacate land or buildings if required to do so
1: The Assignee may require the bankrupt and any of his or her relatives to vacate any land or building that is part of the property vested in the Assignee under the bankruptcy.
2: If the Assignee's demand is not complied with, the Assignee may apply to the District Court 1967 No 54 s 66 Section 152(2) amended 1 March 2017 section 261 District Court Act 2016
153: Bankrupt's right to inspect documents
1: The bankrupt may at any reasonable time inspect, and take extracts or copies of,—
a: the bankrupt's accounting records:
b: the bankrupt's answers to questions under section 87
c: the bankrupt's statement of affairs:
d: all proofs of debt:
e: the minutes of any creditors' meeting:
f: the record of any examination of the bankrupt.
2: The bankrupt's right of inspection under subsection (1) is in addition to any rights that the bankrupt has under the Privacy Act 2020 1967 No 54 s 131 Section 153(2) amended 1 December 2020 section 217 Privacy Act 2020 Restrictions on bankrupt dealing with property
154: No power to recover property or give release or discharge
1: After adjudication, the bankrupt, and any person (other than the Assignee) who claims through or under the bankrupt, has no power to—
a: recover any property that is part of the bankrupt's estate; or
b: give a release or discharge in relation to that property.
2: Subsection (1) applies subject to the provisions of sections 113 114
3: Subsection (1) applies whether or not the Assignee has intervened. 1967 No 54 s 44(a)
155: No steps to defeat beneficial interest
1: After adjudication, the bankrupt must not execute a power of appointment, or any other power vested in the bankrupt, if the result is to defeat or destroy any contingent or other estate or interest in any property to which the bankrupt may otherwise be beneficially entitled at any time before his or her discharge.
2: The restriction on the bankrupt in subsection (1) applies—
a: both before and after the bankrupt obtains a discharge; and
b: subject to the provisions of sections 113 114 1967 No 54 s 44(b) Bankrupt's bank accounts
156: Bank must notify Assignee of bankrupt's account
1: A bank that ascertains or has reason to believe that a customer of the bank is an undischarged bankrupt must,—
a: as soon as possible, notify the Assignee of any account that the customer holds with the bank; and
b: not pay any money out of the account, unless subsection (2) applies.
2: The bank may pay money out of the account if—
a: the bank is authorised by an order of the court or instructed by the Assignee to do so; or
b: the bank has notified the Assignee of the account and has not, within 1 month of notification, received any instructions from the Assignee.
3: At the same time that the bank notifies the Assignee under subsection (1)﻿(a), the bank must as soon as possible notify the customer that it has notified the Assignee. 1967 No 54 s 49(5)
157: Assignee may require bank to search account records
1: The Assignee may, by written notice, require a bank to search its account records by comparing the names of its customers with the names (including any aliases) of undischarged bankrupts contained in or annexed to the notice.
2: The bank must search its account records within 5 working days after receipt of the notice.
4: Provision for bankrupt during bankruptcy
Provision for bankrupt
158: Bankrupt may retain certain assets
1: The bankrupt may retain as the bankrupt’s own property the following assets:
a: the bankrupt’s necessary tools of trade:
b: necessary household furniture and effects, including clothing, for the bankrupt and the bankrupt’s relatives and dependants:
c: a motor vehicle (up to a maximum value of $6,500).
2: For the purposes of subsection (1)﻿(c), the value of a motor vehicle is the value that the Assignee in the Assignee’s discretion places on it.
3: The fact that the value of the motor vehicle is less than the maximum value specified in subsection (1)﻿(c) does not give the bankrupt rights in relation to other assets in the bankrupt’s estate.
4: The Governor-General may, by Order in Council, amend subsection (1)﻿(c) by increasing the maximum value to take account of any rise in the all groups index number of the Consumers
5: An order under this section is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 158 replaced 13 January 2020 section 56 Regulatory Systems (Economic Development) Amendment Act 2019 Section 158(4) amended 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 158(5) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
159: Bankrupt may retain certain assets with consent of creditors
Section 159 repealed 13 January 2020 section 56 Regulatory Systems (Economic Development) Amendment Act 2019
160: Retention of assets does not affect rights under charge or hire purchase agreement
The retention of an asset by the bankrupt under section 158 1967 No 54 s 52(1) Section 160 amended 13 January 2020 section 57 Regulatory Systems (Economic Development) Amendment Act 2019
161: Retention provisions do not confer rights to other assets
Section 161 repealed 13 January 2020 section 58 Regulatory Systems (Economic Development) Amendment Act 2019
162: Relative or dependant may exercise bankrupt's right to retain assets
If the bankrupt has died, a relative or dependant of the bankrupt, who has been approved by the Assignee or the court for this purpose, may exercise the right to retain assets under section 158 1967 No 54 s 52(3) Section 162 amended 13 January 2020 section 59 Regulatory Systems (Economic Development) Amendment Act 2019
163: Assignee may make allowance to bankrupt
The Assignee may make an allowance out of the property of the bankrupt to the bankrupt or any relative or dependant of the bankrupt for the support of the bankrupt and his or her relatives and dependants. 1967 No 54 s 53(1)
164: Assignee may allow bankrupt to retain money
1: The Assignee may allow the bankrupt to retain, for the immediate maintenance of the bankrupt and his or her relatives and dependants, any money up to a maximum of $1,300
2: The Governor-General may, by Order in Council, amend subsection (1) by increasing the maximum amount that the Assignee may allow the bankrupt to retain, to take account of any rise in the Consumers
3: An order under this section is secondary legislation ( see Part 3 1967 No 54 s 53(2), (3) The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 164(1) amended 13 January 2020 section 60 Regulatory Systems (Economic Development) Amendment Act 2019 Section 164(2) amended 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 164(3) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
5: Powers of Assignee and court to examine bankrupt and others
Examination of persons summoned by Assignee
165: Assignee may require bankrupt and others to be examined or provide information or assistance
1: The Assignee may at any time, before or after a bankrupt's discharge,—
a: summon any of the persons listed in subsection (2) to appear before the Assignee, another Assignee, or a District Court Judge to be examined on oath in relation to the bankrupt's property, conduct, or dealings; and
b: require that person to do any 1 or more of the following:
i: produce and surrender to the Assignee or District Court Judge before whom that person appears any document in that person’s possession or control that relates to the bankrupt’s property, conduct, or dealings:
ii: provide the Assignee with any information that the Assignee requests about the bankrupt’s property, conduct, or dealings:
iii: assist the Assignee, to the best of the person’s ability, to carry out the Assignee’s functions and duties under this Act in respect of the bankrupt.
1A: A person who is summoned by the Assignee for examination may appear before the Assignee by audio link or audiovisual link if the Assignee and the person agree.
2: The persons referred to in subsection (1) are—
a: the bankrupt:
b: the bankrupt's spouse:
c: a person known or suspected to possess any of the bankrupt's property or any document relating to the bankrupt's property, conduct, or dealings:
d: a person believed to owe the bankrupt money:
e: a person believed by the Assignee to be able to give information regarding—
i: the bankrupt; or
ii: the bankrupt's property, conduct, or dealings:
f: a trustee of a trust of which the bankrupt is a settlor or of which the bankrupt is or has been a trustee. 1967 No 54 s 68(1), (2) Section 165 heading replaced 13 January 2020 section 61(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 165(1)﻿(b) replaced 13 January 2020 section 61(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 165(1A) inserted 16 December 2017 section 72 Electronic Interactions Reform Act 2017
166: Conduct of examination of person summoned by Assignee
1: The Assignee or District Court Judge before whom a person ( A section 165
2: The examination must be recorded in writing, and A must sign the written record if required to do so.
3: If A does not appear at the appointed time and has no reasonable excuse,—
a: the District Court Judge or the court may, on the Assignee's application, by warrant, have A arrested and brought for examination by the court; and
b: the court may order A to pay all the expenses arising out of A's arrest and examination before the court, if the court thinks that A's evidence was necessary for the purposes of the bankrupt's estate. 1967 No 54 s 68(3)–(5)
167: Expenses of person summoned by Assignee
A person who is summoned by the Assignee for examination—
a: is entitled to be paid the prescribed expenses of attending the examination; and
b: does not default in attending if those expenses have not been paid or tendered to him or her before the examination. 1967 No 54 s 68(6)
168: Creditor may inspect record of examination
A creditor or his or her lawyer may at any reasonable time inspect the record of the examination of a person by a District Court Judge or by the court under section 166
169: Report of examination must not be published unless court consents
1: A person must not, without the court's permission under subsection (2), publish a report of—
a: any examination of a person summoned by the Assignee; or
b: any matter arising in the course of that examination.
2: On the Assignee's application, the court may permit publication of a report under the conditions that the court imposes.
3: A person who contravenes subsection (1) commits an offence and is liable on 1967 No 54 s 68(7) Section 169(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011
170: Examination provisions also apply when Assignee appointed receiver and manager of debtor's property
Sections 165 to 169 section 50 1967 No 54 s 68(8)
171: Assignee may obtain documents
In addition to the power contained in section 165(1)﻿(b)﻿(i) 1967 No 54 s 68A Section 171 amended 13 January 2020 section 62 Regulatory Systems (Economic Development) Amendment Act 2019
172: No lien over bankrupt's documents and other records
1: A person is not entitled as against the Assignee to withhold possession of, or claim a lien over,—
a: a deed or instrument that belongs to the bankrupt; or
b: business records (which include accounting records, accounts, receipts, bills, invoices, or any other documents relating to the bankrupt's accounts, trade dealings, or business).
2: However, a person ( A section 274(2)﻿(f)
a: A has performed services in connection with the bankrupt's business records or a deed or instrument belonging to the bankrupt; and
b: A has not been paid, or has not been paid in full, for those services; and
c: A would, but for subsection (1), ordinarily have had a lien over the business records, deed, or instrument, as the case may be.
3: The limit to which A may claim as a preferential creditor under section 274(2)﻿(f) 1967 No 54 s 73 Bankrupt's public examination
173: Court must hold public examination if Assignee or creditors require
1: The court must hold a public examination of the bankrupt if, before an absolute order for the bankrupt's discharge is made, there is filed with the court either a statement by the Assignee, or a copy of a creditors' ordinary resolution, that the bankrupt should be publicly examined.
2: The copy of the resolution must be certified by the Assignee or the chairperson of the meeting at which it was passed. 1967 No 54 s 69(1)
174: Notice of examination
1: If a public examination of the bankrupt is required, the Assignee must serve the bankrupt with a notice that states—
a: that the Assignee's statement or the creditors' resolution has been filed with the court; and
b: that the bankrupt is required to be publicly examined; and
c: the time and place of the examination.
2: At least 5 working days before the examination, the Assignee must—
a: advertise the examination in the prescribed manner; and
b: send a notice of the examination to each creditor. 1967 No 54 s 69(1), (2)
175: Time for holding examination
The court must hold the public examination of the bankrupt as soon as practicable, but not before 5 working days have elapsed after the Assignee has sent the bankrupt a notice under section 174 1967 No 54 s 69(1)
176: Assignee must file report before examination
Before the public examination of the bankrupt, the Assignee must file in the court a report on—
a: the bankrupt's estate; and
b: the bankrupt's conduct; and
c: all other matters of which the court should be informed. 1967 No 54 s 69(3)
177: Conduct of examination
1: The bankrupt must attend the examination, and may be examined as to the bankrupt's conduct, dealings, and property.
2: The bankrupt must be examined on oath and must answer all questions that the court asks the bankrupt, or allows the bankrupt to be asked.
3: The following persons may examine the bankrupt:
a: the Assignee, or counsel for the Assignee:
b: any creditor who has proved a claim, or counsel for that creditor.
4: The bankrupt is not entitled to notice beforehand of who will ask the questions or what the questions will be. 1967 No 54 s 69(4), (5)
178: Record of examination
1: The examination must be recorded in writing as the court directs.
2: The record of the examination must be—
a: signed by the bankrupt; and
b: available for inspection by any creditor or that creditor's lawyer at all reasonable times.
3: The court may, if the bankrupt requests, require that the record of the examination be read over to the bankrupt before the bankrupt signs it. 1967 No 54 s 69(6) Section 178(2)﻿(a) replaced 13 January 2020 section 63(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 178(3) inserted 13 January 2020 section 63(2) Regulatory Systems (Economic Development) Amendment Act 2019
179: When examination ends
1: The public examination of a bankrupt ends when the court makes an order that the examination is ended.
2: The court must not make an order that the examination is ended unless it is satisfied that the bankrupt's conduct, dealings, and property have been sufficiently investigated and that the investigation is finished. 1967 No 54 s 69(7)
180: Bankrupt's failure to attend examination
If the bankrupt does not appear for the examination at the appointed time and has no reasonable excuse,—
a: a District Court Judge or the court may, on the Assignee's application, by warrant, cause the bankrupt to be arrested and brought up for examination by the court; and
b: the court may order the bankrupt to pay all the expenses arising out of the arrest and examination before the court, if the court thinks that the bankrupt's evidence was necessary for the purposes of the bankrupt's estate. 1967 No 54 ss 68(4), (5) 69(8)
181: Bankrupt's expenses in attending examination
1: A bankrupt who attends a public examination is entitled to be paid the prescribed expenses of attending.
2: A bankrupt does not default in attending a public examination if the prescribed expenses of attending have not been paid or tendered to him or her before the examination. 1967 No 54 ss 68(6) 69(8) Investigation of company controlled by bankrupt and associate
182: Assignee may examine company documents, personnel, and shareholders
1: If authorised by the court, the assignee or a person appointed by the assignee may exercise the power set out in subsection (2) in relation to a company that is associated with the bankrupt under subpart YB
2: The Assignee may—
a: examine the documents of the company:
b: examine any past or present director, employee, or shareholder of the company on oath about the company's affairs.
3: The examination of a person under subsection (2)﻿(b) must be recorded in writing, and the person examined must sign the written record if required to do so by the Assignee. 1967 No 54 s 74(4) Section 182(1) substituted 1 April 2010 section 861 Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009
183: Meaning of associate
In section 182 associate
a: the bankrupt's spouse:
b: a lineal ancestor or descendant of the bankrupt:
c: the spouse of a lineal ancestor or descendant of the bankrupt:
d: a brother or sister of the bankrupt:
e: the spouse of a brother or sister of the bankrupt. 1967 No 54 s 74(4) Privilege and representation of persons examined
184: No privilege against self-incrimination
1: A person who is examined or questioned under any power under this Act must answer all questions relating to the bankrupt's conduct, dealings, and property.
2: A person is not excused from answering a question because the question may incriminate or tend to incriminate that person. 1967 No 54 s 70(1)
185: Statement made by person examined or questioned not generally admissible in criminal proceedings against that person
1: A statement made by a person examined or questioned under this Act in response to a question is not admissible in criminal proceedings against that person.
2: However, the statement is admissible if—
a: the person was examined or questioned under oath and is charged with perjury in relation to the statement; or
b: in the case of the bankrupt, the bankrupt is charged with an offence under section 440(1)﻿(b) 1967 No 54 s 70(2)
186: Representation
1: A person who is examined under this Act may be represented by a lawyer.
2: The person may be questioned by his or her lawyer, and any answers form part of the examination. 1967 No 54 s 70(3)
6: Status of bankrupt's contracts
Bankrupt's contracts entered into before adjudication
187: Assignee may continue or disclaim bankrupt's contract
If the bankrupt is a party to a contract, the Assignee may—
a: continue the contract, subject to the terms of the contract and all relevant rules of law; or
b: if the contract is onerous property for the purposes of section 117 1967 No 54 s 76
188: Contract terminated by other contracting party
1: This section applies if a contract to which the bankrupt is a party is terminated on the bankrupt's adjudication by the other contracting party in accordance with the contract.
2: Whatever the contract may say, the Assignee may recover an amount from the other contracting party that the court thinks is just and equitable in all the circumstances, but the amount must not be greater than the amount set out in subsection (3).
3: The amount that the Assignee may recover must not be greater than C under the formula A − B = C, where—
a: A is the amount payable to the bankrupt under the contract; and
b: B is the total of—
i: the amount paid to the bankrupt; and
ii: the cost to complete the contract; and
iii: a reasonable penalty for delay in completion of the contract. 1967 No 54 s 77 Transaction with bankrupt in ignorance of adjudication
189: Payment of money or delivery of property is good discharge
1: This section applies if a person ( A
a: to a person who is a bankrupt ( B
b: to a person who is subsequently adjudicated bankrupt ( C
c: to the order of B or C; or
d: to an assignee from B or C; or
e: to the order of an assignee from B or C.
2: The payment or delivery is a good discharge to A if—
a: the payment or delivery was made before the adjudication of B or C, as the case may be, was advertised; and
b: A satisfies the court that—
i: A had no knowledge of the adjudication or that an application for adjudication had been filed; and
ii: the payment or delivery was made in the ordinary course of business or was otherwise made in good faith. 1967 No 54 s 48 Joint contractual liability
190: Bankrupt's co-contractor may sue and be sued
If the bankrupt is jointly liable under a contract with another person, that other person may sue and be sued on the contract without the bankrupt being joined as a party to the proceeding. 1967 No 54 s 130 Lawyers' costs
191: Lawyers' costs
The Assignee may recover money paid by a bankrupt, whether before or after adjudication, to his or her lawyer for costs in obtaining an order of adjudication, except for prescribed costs and expenses. 1967 No 54 s 12
7: Irregular transactions before adjudication
192: Overview of subpart 7
1: This subpart applies to the following irregular transactions by the bankrupt before adjudication:
a: an insolvent transaction:
b: an insolvent charge:
c: an insolvent gift:
d: a disposition of property to which subpart 6
e: a transaction at undervalue:
f: a contribution by the bankrupt to the property of another person.
2: Broadly, the effect of this subpart is that the irregular transactions listed in subsection (1)﻿(a) to (d) may be cancelled on the Assignee's initiative, and that, in appropriate cases, the Assignee may recover property or money from a party to an irregular transaction with the bankrupt. Section 192(1)﻿(d) substituted 1 January 2008 section 364(1) Property Law Act 2007
193: Extension of
5 years, 2 years, A reference in this subpart to 5 years 2 years 6 months
a: in the case of adjudication on a creditor's application, extended by the period between the time when the application was served on the bankrupt and the time of adjudication:
b: in the case of adjudication on the bankrupt's own application, while a creditor's application is awaiting a hearing, extended by the period between the time when the creditor's application was served on the bankrupt and the time of adjudication. Section 193 heading amended 13 January 2020 section 64(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 193 amended 13 January 2020 section 64(2) Regulatory Systems (Economic Development) Amendment Act 2019
193A: Meaning of related party
1: In this subpart, a person is related A
a: A’s spouse:
b: A’s grandparent, parent, child, grandchild, brother, sister, nephew, niece, uncle, aunt, or first cousin, whether or not by a step relationship:
c: the spouse of a person who is related to A under paragraph (b):
d: a company of which A is a director or senior manager:
e: a company, if A has a direct or indirect interest in 5 percent or more of any class of the company’s shares:
f: a person with whom A is in partnership in a firm:
g: a close business associate of A:
h: the spouse of a person who is related to A under paragraphs (f) to (g):
i: a parent, child, brother, or sister (whether or not by a step relationship) of a person who is related to A under paragraphs (f) to (g):
j: a trustee of a trust under which A, or a person related to A (under paragraphs (a) to (i)), is a beneficiary who—
i: is presently entitled to a share of the trust estate or of the income of the trust estate; or
ii: is, individually or together with other beneficiaries, in a position to control the trustee:
k: a trustee of a trust if—
i: the trust is a family trust within the meaning of section 173M(5)
ii: a majority of the individuals who are beneficiaries under the trust are related to A (under paragraphs (a) to (i)):
l: a nominee of a person who is related to A under paragraphs (a) to (k).
2: In this subpart, a person is a related party
3: However, in the case of a transaction referred to in section 197(a) related party
4: In this section,— close business associate
a: assess the solvency of A; or
b: obtain information from A or any other person involved with A that will enable the person to assess the solvency of A company section 3 director section 126(1)﻿(a) to (c), (1A), and (4) limited partnership section 6 partnership firm section 7(1) senior manager section 6(1) Section 193A inserted 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020 Insolvent transactions
194: Insolvent transaction may be cancelled
1: A transaction by the bankrupt may be cancelled on the Assignee's initiative if it—
a: is an insolvent transaction; and
b: was made within 6 months
2: A transaction by the bankrupt may be cancelled on the Assignee’s initiative if it—
a: is an insolvent transaction; and
b: was made with a related party of the bankrupt within 2 years immediately before the bankrupt’s adjudication. Section 194(1)﻿(b) amended 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020 Section 194(2) inserted 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020
195: Meaning of insolvent transaction
1: An insolvent transaction
a: is entered into at a time when the bankrupt is unable to pay his or her due debts; and
b: enables a creditor to receive more towards satisfaction of a debt by the bankrupt than that person would receive, or would be likely to receive, in the bankruptcy.
2: Transaction insolvent transaction
a: conveying or transferring the bankrupt's property:
b: giving a charge over the bankrupt's property:
c: incurring an obligation:
d: undergoing an execution process:
e: paying money (including money paid in accordance with a judgment or an order of a court):
f: anything done or omitted to be done for the purpose of entering into the transaction or giving effect to it. 1967 No 54 s 56(1), (2)
196: Insolvent transaction presumed
For the purposes of section 194
197: When series of transactions must be regarded as single transaction
Where—
a: a transaction is, for commercial purposes, an integral part of a continuing business relationship (for example, a running account) between the bankrupt and a creditor (including a relationship to which other persons are parties); and
b: in the course of the relationship, the level of the bankrupt's net indebtedness to the creditor is increased and reduced from time to time as the result of a series of transactions forming part of the relationship; then—
c: section 194
d: the transaction referred to in paragraph (a) may only be taken to be an insolvent transaction that may be cancelled by the Assignee if the effect of applying section 194 Insolvent charges
198: Insolvent charge may be cancelled
1: A charge over any property of a bankrupt may be cancelled on the Assignee's initiative if—
a: the charge was given within 6 months
b: immediately after the charge was given, the bankrupt was unable to pay his or her due debts.
2: A charge over any property of a bankrupt may be cancelled on the Assignee’s initiative if—
a: the charge was given to a related party of the bankrupt within 2 years immediately before the bankrupt’s adjudication; and
b: immediately after the charge was given, the bankrupt was unable to pay his or her due debts. 1967 No 54 s 57(1) Section 198(1)﻿(a) amended 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020 Section 198(2) inserted 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020
199: Charge for new consideration or charge in substitution not affected
1: A charge may not be cancelled under section 198
2: A charge may not be cancelled under section 198(1) 6 months
a: the amount secured by the substituted charge is greater than the amount that was secured by the existing charge; or
b: the value of the property subject to the substituted charge at the date of substitution was greater than the value of the property subject to the existing charge at that date.
3: A charge may not be cancelled under section 198(2)
a: the amount secured by the substituted charge is greater than the amount that was secured by the existing charge; or
b: the value of the property subject to the substituted charge at the date of substitution was greater than the value of the property subject to the existing charge at that date. 1967 No 54 s 57(2)﻿(a) Section 199(2) amended 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020 Section 199(3) inserted 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020
200: Presumption that bankrupt unable to pay due debts
A bankrupt who gives a charge within 6 months immediately before adjudication is presumed, unless the contrary is proved, to have been unable to pay his or her due debts immediately after giving the charge.
201: Charge for unpaid purchase price given after sale of property
1: This section applies—
a: if the bankrupt, after purchasing property, has within 2 years immediately before adjudication given the seller a charge over the property; and
b: to the extent that section 198
2: Section 198 1967 No 54 s 57(2)﻿(b) Section 201(1) replaced 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020
202: Appropriation of payments by bankrupt to secured creditor
1: This section applies if the bankrupt has made a payment or payments to a secured creditor after the bankrupt has given a charge to which section 199 201
2: The bankrupt's payment or payments must be credited (as far as is necessary) towards—
a: repayment of the money actually advanced or paid by the secured creditor to the bankrupt when or after the bankrupt gave the charge; or
b: payment of the actual price or value of property sold or supplied by the secured creditor to the bankrupt when or after the bankrupt gave the charge; or
c: payment of any other liability of the bankrupt to the secured creditor in respect of any other valuable consideration given in good faith when or after the bankrupt gave the charge.
3: Nothing in this section applies to any payments received by any registered bank within the meaning of the Banking (Prudential Supervision) Act 1989 1967 No 54 s 57(3) Section 202(3) amended 1 July 2022 section 300(1) Reserve Bank of New Zealand Act 2021
203: Charge agreed before specified period may not be cancelled
A charge given by the bankrupt under an agreement to give the charge—
a: may not be cancelled under section 198(1)
b: may not be cancelled under section 198(2) Section 203 replaced 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020 Insolvent gifts
204: Insolvent gift within 2 years may be cancelled
A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if the bankrupt made the gift within 2 years immediately before adjudication. Section 204 substituted 17 November 2009 section 4 Insolvency Amendment Act 2009
205: Insolvent gift within 2 to 5 years may be cancelled if bankrupt unable to pay debts
1: A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if—
a: the bankrupt made the gift within the period beginning 2 years immediately before adjudication and ending 5 years immediately before adjudication; and
b: the bankrupt was unable to pay his or her debts.
2: A bankrupt is presumed to have been unable to pay his or her debts for the purpose of subsection (1)﻿(b) Section 205 substituted 17 November 2009 section 4 Insolvency Amendment Act 2009 Procedure for cancelling irregular transactions
206: Procedure for cancelling irregular transactions
1: The procedure set out in this section applies to the following irregular transactions:
a: an insolvent transaction:
b: an insolvent charge:
c: an insolvent gift:
d: a disposition of property to which subpart 6
2: The Assignee who wishes to cancel an irregular transaction to which this section applies must—
a: file a notice with the court that meets the requirements set out in subsection (3); and
b: serve the notice on—
i: the other party to the transaction; and
ii: any other party from whom the Assignee intends to recover.
3: The notice must—
a: be in writing; and
b: state the Assignee's postal, email, and street addresses; and
c: specify the irregular transaction to be cancelled; and
d: describe the property or state the amount that the Assignee wishes to recover; and
e: state that the person named in the notice may object to the cancellation of the transaction by sending to the Assignee a written notice of objection that is received by the Assignee at his or her postal, email, or street address within 20 working days after the Assignee's notice has been served on that person; and
f: state that the written notice of objection must contain the reasons for objecting; and
g: state that the transaction will be cancelled as against the person named in the notice if that person does not object; and
h: state that if the person named in the notice does object, the Assignee may apply to the court for the transaction to be cancelled.
4: The irregular transaction is automatically cancelled as against the person on whom the Assignee has served the Assignee's notice, if that person has not objected by sending to the Assignee a written notice of objection that is received by the Assignee at his or her postal, email, or street address within 20 working days after the Assignee's notice has been served on that person.
5: The notice of objection must state the reasons for objecting.
6: An irregular transaction that is not automatically cancelled may still be cancelled by the court on the Assignee's application. 1967 No 54 s 58(1) Section 206(1)﻿(d) substituted 1 January 2008 section 364(1) Property Law Act 2007
207: Court may order retransfer of property or payment of value
1: On the cancellation of an irregular transaction under which property of the bankrupt, or an interest in property of the bankrupt, was transferred the court may make an order for—
a: the retransfer to the Assignee of the property or interest in the property; or
b: payment to the Assignee of a sum of money that the court thinks appropriate, but the sum must not be greater than the value of the property or interest in the property when the transaction was cancelled.
2: The court may make any other order for the purpose of giving effect to an order under subsection (1).
3: An order under subsection (1) is in addition to any other rights and remedies available to the Assignee, and this section does not restrict those rights. 1967 No 54 s 58(2)–(4)
208: Limits on recovery
The court must not make an order under section 207 A
a: A acted in good faith; and
b: a reasonable person in A's position would not have suspected, and A did not have reasonable grounds for suspecting, that,—
i: in the case of an insolvent gift, the bankrupt was, or would become, unable to pay his or her debts without the aid of the property that the gift is composed of; or
ii: in the case of any other irregular transaction referred to in section 206(1)
c: A gave value for the property or interest in the property or altered A's position in the reasonably held belief that the transfer of the property or interest in the property to A was valid and would not be cancelled. 1967 No 54 s 58(6) Section 208(b) substituted 17 November 2009 section 5 Insolvency Amendment Act 2009
209: Recovery by appointee
The provisions of sections 206 to 208 Part 6
210: Land Transfer Act 2017 The Land Transfer Act 2017 sections 206 to 209 1967 No 54 s 58(7) Section 210 heading amended 12 November 2018 section 250 Land Transfer Act 2017 Section 210 amended 12 November 2018 section 250 Land Transfer Act 2017 Transactions at undervalue
211: Assignee may recover difference in value
1: Under section 212 X
a: A is the value that X received from the bankrupt under the transaction; and
b: B is the value (if any) that the bankrupt received from X under the transaction.
2: In this section and in section 212 transaction 1993 No 105 s 297(1)
212: When Assignee may recover difference
The Assignee may recover the difference in value (that is, C in the formula in section 211(1)
a: the bankrupt entered into the transaction with X within 2 years immediately before adjudication; and
b: either—
i: the bankrupt was unable to pay his or her
ii: the bankrupt became unable to pay his or her 1993 No 105 s 297(1) Section 212(b)﻿(i) amended 17 November 2009 section 6 Insolvency Amendment Act 2009 Section 212(b)﻿(ii) amended 17 November 2009 section 6 Insolvency Amendment Act 2009 Bankrupt's contribution to another person's property
213: Court may order recipient to pay value to Assignee
1: On the application of the Assignee, the court may order the recipient of a contribution by the bankrupt to the recipient's property to pay the value of the contribution to the Assignee.
2: The court may make the order if—
a: the bankrupt was not paid an adequate amount in money or money's worth for the contribution; and
b: the value of the bankrupt's assets was reduced by the contribution; and
c: the bankrupt made the contribution—
i: within 2 years immediately before adjudication; or
ii: within 5 years immediately before adjudication, and the recipient is not able to prove that the bankrupt, either at the time of the contribution or at any later time before adjudication, was able to pay the bankrupt's debts without the aid of the contribution.
3: For the purposes of this section and section 214
a: erected buildings on, or otherwise improved, land or any other property of the recipient; or
b: bought land or any other property in the recipient's name; or
c: provided money to buy land or any other property in the recipient's name or on the recipient's behalf; or
d: paid instalments for the purchase of, or towards the purchase of, land or any other property in the recipient's name or on the recipient's behalf. 1967 No 54 s 55(1), (2)
214: Court's powers in relation to bankrupt's contribution to recipient's property
1: The court may ascertain the value of the bankrupt's contribution (including any payments of legal expenses, interest, rates, and other expenses or charges) for the purposes of section 213
2: The court may order the recipient to pay less than the value of the contribution, or refuse to order the recipient to pay anything, if—
a: the recipient acted in good faith and has altered the recipient's position in the reasonably held belief that the bankrupt's contribution was valid and that the recipient would not be liable to repay it in full or in part; or
b: in the court's opinion, it is unfair that the recipient should repay all or part of the contribution.
3: If the court orders that the recipient must repay the bankrupt's contribution, the court may also (in the same or a subsequent order)—
a: direct the Assignee to sell the whole or part of the relevant property, and to convey or transfer it to the buyer; and
b: make vesting and other orders that are necessary for the sale and conveyance or transfer of the property. 1967 No 54 s 55(2)﻿(a), (b)
215: How Assignee must use repayment of bankrupt's contribution to property
The Assignee must use the money repaid under section 213
a: first, the Assignee must keep as much of the proceeds as the Assignee needs, when added to the other assets in the bankrupt's estate, to pay the creditors in full (including interest) under section 274 Step 1
b: secondly, if there is a surplus after the creditors have been paid in full, the Assignee must pay as much of the surplus to the recipient of the property to which the bankrupt has contributed as was repaid under section 213 Step 2
c: thirdly, the Assignee must not pay anything to the bankrupt before the Assignee has taken Step 1 and Step 2. 1967 No 54 s 55(2)﻿(c)
216: Land Transfer Act 2017 The Land Transfer Act 2017 sections 213 to 215 1967 No 54 s 55(4) Section 216 heading amended 12 November 2018 section 250 Land Transfer Act 2017 Section 216 amended 12 November 2018 section 250 Land Transfer Act 2017
8: Role and powers of Assignee
Powers of Assignee
217: Assignee's general powers
1: The Assignee has the powers—
a: necessary to carry out the functions and duties of the Assignee under this Act; and
b: conferred on the Assignee by this Act.
2: In particular, the Assignee has the powers set out in Schedule 1 1967 No 54 s 71
218: Assignee must not sell bankrupt's property before first creditors' meeting
The Assignee must not sell any of the bankrupt's property before the first creditors' meeting, unless—
a: the property is perishable property or is likely to fall rapidly in value; or
b: in the Assignee's opinion, the sale of the property might be prejudiced by delay; or
c: expenses will be incurred by the delay, and before selling the Assignee consults a creditor or creditors. 1967 No 54 s 72(4)
219: Title of purchaser from Assignee
The title of a purchaser of the bankrupt's property from the Assignee under a document that is made in the exercise of the Assignee's power of sale in Schedule 1
a: cannot be challenged except on the ground of fraud; and
b: is not affected by an absence of authority to sell, or the improper or irregular exercise of the power of sale. 1967 No 54 s 72(5)
220: Obligation to bank and power to invest money
1: The Assignee must have a bank account and, as may be prescribed by regulations made under this Act, must pay into that account all money that the Assignee receives in that capacity.
2: The Assignee may invest money that is not immediately required to be paid out in the administration of a particular estate in an investment of a type approved by the Auditor-General, and must credit to that estate the interest or dividends that accrue on the investment. 1967 No 54 s 81
221: Assignee may assign right to sue under this Act
1: The Assignee may, if the court has first approved it, assign any right to sue that is conferred on the Assignee by this Act.
2: The application for approval may be—
a: made by the Assignee or the person to whom it is proposed to assign the right to sue; and
b: opposed by a person who is a defendant to the Assignee's action, if already begun, or a proposed defendant.
222: Proceedings by Assignee when bankrupt is partner in business partnership
1: If a member of a business partnership is adjudicated bankrupt, the court may authorise the Assignee to bring a proceeding in the names of the Assignee and the bankrupt's partner ( P
2: The Assignee must serve notice on P of the application for authority to bring the proceeding, and P may oppose the application.
3: P may apply to the court for a direction that—
a: P must be paid P's proper share of the proceeds of the proceeding; or
b: P must be indemnified by the Assignee against any costs incurred in the proceeding, on the condition that P does not claim any benefit from the proceeding.
4: Any release by P of the debt or demand to which the proceeding relates is void. 1967 No 54 s 82(2) Notice by Assignee
223: Means of giving notice to creditors
1: Any requirement under this Act that the Assignee give notice to a creditor is satisfied,—
a: in the case of a natural person, if the notice is—
i: delivered to that person; or
ii: posted to that person's address or delivered to a box at a document exchange that that person is using at the time; or
iii: sent by facsimile machine to a telephone number used by that person for the transmission of documents by facsimile ; or
iv: emailed to the person at an email address that is used by that person:
b: in the case of a company, if the notice is sent in accordance with section 388
c: in the case of an overseas company, if the notice is sent in accordance with section 390
d: in the case of a body corporate that is not a company or an overseas company, if the notice is sent in accordance with section 391(3)
2: In the absence of proof to the contrary, a notice that is emailed to a person must be treated as received by the person on the second working day after the date on which it is emailed, and, in proving that the notice was emailed, it is sufficient to prove that the notice was properly addressed and sent to the email address. Section 223(1)﻿(a)﻿(iii) amended 16 December 2017 section 73(1) Electronic Interactions Reform Act 2017 Section 223(1)﻿(a)﻿(iv) inserted 16 December 2017 section 73(2) Electronic Interactions Reform Act 2017 Section 223(2) inserted 16 December 2017 section 73(3) Electronic Interactions Reform Act 2017 Assignee's decisions
224: Assignee's discretion
1: The Assignee may use his or her own discretion in the administration of the bankrupt's property, but must have regard to the resolutions of the creditors at creditors' meetings.
2: The Assignee or a creditor may apply to the court for directions if the Assignee or creditor believes that a resolution of the creditors—
a: conflicts with this Act or any legal rule; or
b: is unjust or unfair. 1967 No 54 s 84
225: Assignee may apply for directions by court
1: The Assignee may apply to the court for directions on any question concerning the operation of this Act.
2: An Assignee who acts under a direction of the court discharges his or her duty in relation to the question for which a direction was sought, and it does not matter that subsequently the direction is invalidated, overruled, or set aside or becomes ineffective.
3: However, the Assignee is not protected by subsection (2) if, in obtaining or following the court's direction, the Assignee was guilty of—
a: fraud; or
b: deliberate concealment or misrepresentation. 1967 No 54 s 85
226: Appeal from Assignee's decision
1: A person (including the bankrupt or a creditor) whose interests, monetary or otherwise, are detrimentally affected by an act or decision to which this section applies may apply to the court to reverse or modify the act or decision.
2: This section applies to—
a: an act or decision of the Assignee; or
b: a decision of a District Court Judge in carrying out an examination under section 165
3: The application must be made—
a: within 15 working days of the act or decision; or
b: within the additional time that the court allows.
4: The court may confirm, reverse, or modify the act or decision.
5: A creditor who is aggrieved by a decision of the Assignee rejecting the creditor's claim may make an application under section 239 1967 No 54 s 86 Assignee's accounting records
227: Assignee must keep proper accounting records
1: Every Assignee must—
a: keep proper accounting records for each bankruptcy, in the prescribed form; and
b: verify those records by statutory declaration, when required by the court.
2: A creditor or any person who has an interest may inspect the Assignee's accounting records for a particular bankruptcy. 1967 No 54 s 132(1), (2)
228: Assignee's final statement of receipts and payments
1: The Assignee must prepare a final statement of receipts and payments—
a: as soon as practicable after the distribution of the final dividend has been determined; or
b: when the whole of the bankrupt's property has been realised, if there are insufficient assets to pay all the proofs of debt.
2: The final statement of receipts and payments must show in detail the receipts and payments in respect of the bankrupt’s estate.
3: The Assignee must provide a copy of the final statement of receipts and payments to any creditor, or other person who has an interest, if the creditor or other person requests a copy.
4: The copy must be provided within 20 working days after the Assignee receives the request. 1967 No 54 s 132(2)–(5) Section 228(2) replaced 30 May 2017 section 109 Regulatory Systems (Commercial Matters) Amendment Act 2017 Section 228(3) replaced 30 May 2017 section 109 Regulatory Systems (Commercial Matters) Amendment Act 2017 Section 228(4) inserted 30 May 2017 section 109 Regulatory Systems (Commercial Matters) Amendment Act 2017
229: Auditor-General may audit Assignee's accounts
The Auditor-General may, at the Auditor-General's discretion, audit—
a: the Assignee's accounting records for any bankruptcy:
b: any statement of accounts and statement of financial position prepared by the Assignee under section 228
c: any account maintained by the Assignee for the purposes of this Act. 1967 No 54 s 132A
230: Assignee may return or destroy accounting records
After 1 year after the discharge of the bankrupt, the Assignee may dispose of the accounting records deposited with the Assignee for the purposes of the bankruptcy by—
a: delivering them to the bankrupt or the bankrupt's personal representative, if requested; or
b: destroying or otherwise disposing of them. 1967 No 54 s 136
9: Creditors' claims
Provable debts
231: Meaning of provable debt
1: A provable debt
2: A creditor's claim form
3: A debt is proved when it is admitted by the Assignee.
232: What debts are provable debts
1: A provable debt is a debt or liability that the bankrupt owes—
a: at the time of adjudication; or
b: after adjudication but before discharge, by reason of an obligation incurred by the bankrupt before adjudication.
2: A fine, penalty, sentence of reparation, or other order for the payment of money that has been made following any conviction or order made under section 106
a: is not a provable debt; and
b: is not discharged when the bankrupt is discharged from bankruptcy. 1967 No 54 s 87 Procedure for proving debt
233: Creditor must submit creditor's claim form
1: A creditor, including a creditor who has a preferential claim, who wishes to claim in the bankruptcy must submit a creditor's claim form to the Assignee within the specified time.
2: In subsection (1), specified time
3: The claim form must comply with the prescribed formalities.
4: A creditor must submit the claim form in accordance with the prescribed procedure.
5: The creditor must bear the costs of proving the debt, unless the court makes an order as to the creditor's costs under section 242
6: The creditor may amend or withdraw the claim form, but an amended form must comply with the formalities prescribed for the original claim form. 1967 No 54 s 88(1), (2), (3), (5) Role of Assignee in examining creditor's claim form
234: Assignee must examine creditor's claim form
1: The Assignee must examine each creditor's claim form and the grounds of the debt, unless the Assignee considers it likely that no dividend will be paid to creditors.
2: After examining the claim form, the Assignee must, as soon as practicable, do 1 or more of the following:
a: admit the claim, in whole or in part:
b: reject the claim, in whole or in part:
c: require further evidence in support of the claim. 1967 No 54 s 89(1)
235: Assignee must give creditor notice of grounds of rejection
If the Assignee rejects a creditor's claim, or part of it, the Assignee must, as soon as practicable, give the creditor notice of the Assignee's grounds for rejecting the claim. 1967 No 54 s 89(3)
236: Assignee's power to obtain evidence of debt
1: The Assignee may summon for examination, and examine (on oath or otherwise), any of the following persons:
a: a person who has submitted a creditor's claim:
b: a person who has made a declaration or statement as part of a creditor's claim:
c: a person who is capable of giving evidence concerning a creditor's claim or the debt to which the claim relates.
2: If a person ( A
a: on the Assignee's application, by warrant have A arrested and brought for examination by the court; and
b: order A to pay all the expenses arising out of A's arrest and examination, if the court thinks that A's evidence was necessary for deciding whether the creditor's claim in question should be admitted or rejected. 1967 No 54 s 89(2)
237: Notice to Assignee to admit or reject creditor's claim
1: The bankrupt or any creditor may give the Assignee notice to admit or reject a creditor's claim.
2: If, after 10 working days after receiving the notice, the Assignee has not made a decision admitting or rejecting the creditor's claim, on the application of the bankrupt or the creditor the court may—
a: admit or reject the claim; or
b: make any other order that it thinks appropriate. 1967 No 54 s 89(6)
238: Court may cancel creditor's claim
1: The court may make an order cancelling an admitted creditor's claim or reducing the amount claimed, if it considers that the claim was improperly admitted.
2: The court may make the order on the application of the Assignee, the bankrupt, or any creditor.
3: The court must not make an order under subsection (1) unless the creditor who submitted the claim has been served with the application. 1967 No 54 s 89(5)
239: Court may reverse or modify Assignee's decision rejecting creditor's claim
1: A creditor whose claim has been rejected by the Assignee may apply to the court for an order modifying or reversing the Assignee's decision.
2: The creditor must apply within 15 working days after the creditor receives the Assignee's notice of rejection of the claim, or within the additional time that the court allows.
3: The court may—
a: reverse or modify the Assignee's decision in whole or in part; or
b: confirm it.
4: A creditor has no right to prove for a debt or liability that has been rejected by the Assignee, unless the creditor has made an application under this section. 1967 No 54 s 89(4)
240: Parties to application to court in relation to creditor's claim
1: This section applies to an application that is made under section 237 238 section 239
2: If the applicant is not the Assignee, the applicant must name and serve the Assignee as a party to the proceeding.
3: The bankrupt and any creditor may give notice to the court hearing the application, and, on doing so, become parties to the proceeding. 1967 No 54 s 89(7)
241: Which court may hear application in relation to creditor's claim
1: If the creditor's claim is for a sum of not more than $ 350,000 section 237 238 239
2: In that case, the provisions of the District Court Act 2016
3: If the creditor's claim is for a sum of more than $ 350,000 section 237 238 239
4: In that case, the decision of the High Court may be taken on appeal to the Court of Appeal by—
a: any party to the proceeding, if the High Court gives that party leave to appeal:
b: any aggrieved person. 1967 No 54 s 89(8), (9) Section 241(1) amended 1 March 2017 section 261 District Court Act 2016 Section 241(2) amended 1 March 2017 section 261 District Court Act 2016 Section 241(3) amended 1 March 2017 section 261 District Court Act 2016
242: Court may make order as to costs
On an application under section 237 238 239
a: any costs of a creditor be added to the creditor's claim:
b: any costs of any party to the proceeding be paid out of the bankrupt's estate:
c: any costs be paid by any party to the proceedings, except the Assignee. 1967 No 54 s 89(10) Secured creditors
243: Secured creditor's options in relation to property subject to charge
1: A secured creditor may—
a: realise property subject to a charge, if entitled to do so ( Option 1
b: value the property subject to the charge and prove in the bankruptcy as an unsecured creditor for the balance due (if any) after deducting the amount of the valuation ( Option 2
c: surrender the charge to the Assignee for the general benefit of the creditors and prove in the bankruptcy as an unsecured creditor for the whole debt ( Option 3
2: Despite subsection (1), a secured creditor may exercise Option 1 whether or not the creditor has exercised Option 2. 1993 No 105 s 305(1), (2)
244: Assignee may require secured creditor to choose option
1: The Assignee may at any time, by notice in writing, require a secured creditor, within 20 working days after receipt of the notice, to—
a: choose one of the options in section 243(1)
b: if the creditor chooses Option 2 or Option 3, exercise that option within the 20-working day period.
2: A secured creditor who has been served with a notice under subsection (1) and fails to comply—
a: is treated as having surrendered the charge to the Assignee under Option 3 in section 243(1)
b: may prove as an unsecured creditor for the whole debt. 1993 No 105 s 305(8), (9)
245: Assignee not required to act in relation to certain property subject to charge
The Assignee may, but is not required to, carry out any duty or exercise any power in relation to property that is subject to a charge, except property subject to a charge that has been surrendered under section 243(1)﻿(c) 244(2)﻿(a) 1993 No 105 s 254(a)
246: Realisation of property subject to security
1: A secured creditor who realises property subject to a charge may prove as an unsecured creditor for any balance due after deducting the net amount realised.
2: However, subsection (1) does not apply if the Assignee has accepted a valuation and creditor's claim under section 249
3: A secured creditor who realises property subject to a charge must account to the Assignee for any surplus remaining after the following amounts have been paid:
a: the amount of the debt:
b: interest payable on the debt up to the time when it is paid:
c: any proper payments to the holder of any other charge over the property. 1993 No 105 s 305(3)
247: Valuation of charge and proof for balance due
1: This section applies if a secured creditor values the property subject to the charge and seeks to prove as an unsecured creditor for the balance due after deducting the amount of the valuation.
2: The valuation and the claim for the balance must—
a: be made in the prescribed creditor's claim form; and
b: contain full particulars of the valuation and the debt; and
c: contain full particulars of the charge, including the date when it was given; and
d: identify any documents that substantiate the debt and the charge.
3: The creditor must produce any document identified under subsection (2)﻿(d) if required by the Assignee. 1993 No 105 s 305(4), (5)
248: False claim by secured creditor
1: A person commits an offence if that person—
a: makes, or authorises the making of, a claim under section 247(1)
b: omits, or authorises the omission of, any matter from a claim under section 247(1)
2: A person who commits an offence under this section is liable on conviction 1993 No 105 s 305(11) Section 248(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
249: Assignee's powers when secured creditor values property subject to charge and proves for balance
1: If a secured creditor values the property subject to the charge and seeks to prove for the balance due, the Assignee must—
a: accept the valuation and the creditor's claim; or
b: reject the valuation and creditor's claim in whole or in part.
2: If the Assignee rejects the valuation and creditor's claim, the creditor may submit a revised valuation and creditor's claim form within 10 working days after receiving notice of the rejection.
3: The Assignee may revoke or amend a decision rejecting a valuation and creditor's claim, if the Assignee subsequently thinks that the decision was wrong.
4: If the Assignee accepts the valuation and creditor's claim, the Assignee may, at any time before the creditor realises the property, redeem the charge by paying the amount of the valuation to the creditor.
5: In subsection (4), the Assignee accepts the valuation and creditor's claim if the Assignee—
a: accepts the original or an amended valuation and creditor's claim:
b: accepts a valuation and creditor's claim after amending or revoking a decision to reject a valuation and creditor's claim. 1993 No 105 s 305(6), (7)
250: Secured creditor who surrenders charge may withdraw surrender or submit new creditor's claim
1: This section applies to a secured creditor who has surrendered a charge under Option 3 in section 243(1)﻿(c) section 244(2)
2: The creditor may, with the leave of the court or the Assignee and subject to the terms and conditions that the court or the Assignee imposes,—
a: withdraw the surrender and rely on the charge; or
b: submit a new creditor's claim under section 243(1)﻿(c) 244(2)﻿(b)
3: Subsection (2) does not apply if the Assignee has already realised the property subject to the charge. 1993 No 105 s 305(10) Creditors' claims subject to uncertainty
251: Assignee may estimate amount of uncertain creditor's claim
If a creditor's claim is subject to a contingency or is for damages, or if, for some other reason, the amount of the claim is uncertain, the Assignee may estimate the amount of the claim. 1967 No 54 s 98 1993 No 105 s 307(1)
252: Application to court to determine amount of uncertain creditor's claim
The court must determine the amount of an uncertain creditor's claim on the application of—
a: the Assignee, if the Assignee chooses not to estimate the amount:
b: a creditor, if the Assignee has estimated the amount and the creditor is aggrieved by the estimate. 1967 No 54 s 99 1993 No 105 s 307(2) Creditors' claims payable after adjudication
253: Creditor's claim payable 6 months or more after adjudication
1: A creditor's claim that would, but for the bankruptcy, be payable 6 months or more after the date of adjudication is treated as a claim for the present value of the debt.
2: The present value of the debt is calculated by deducting interest at the interest rate as defined in section 12(3) 1967 No 54 s 95 1993 No 105 s 309 Section 253(2) amended 1 January 2018 section 29 Interest on Money Claims Act 2016 Set-off
254: Mutual credit and set-off
1: If there have been mutual credits, mutual debts, or other mutual dealings between a bankrupt and another person,—
a: an account must be taken of what is due from the one party to the other in respect of those credits, debts, or dealings; and
b: an amount due from one party to the other must be set off against an amount due from the other party; and
c: only the balance of the account may be proved in the bankruptcy, or is payable to the Assignee, as the case may be.
2: However, a person ( A
3: A creditor of the bankrupt who claims a set-off must declare in that person's creditor's claim form that, when the creditor gave the bankrupt credit, the creditor did not have notice of an available act of bankruptcy by the bankrupt. 1967 No 54 s 93 1993 No 105 s 310(1) Set-off under netting agreement
255: Definitions relating to set-off under netting agreement
In this section and in sections 256 to 263 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 must be taken of all money due between the parties in respect of the terminated transactions; and
ii: all obligations in respect of that money must be satisfied by payment of the net amount due from or on behalf of the party having a net debit to or on behalf of the party having a net credit; or
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 before the transaction are extinguished and replaced by rights and obligations in respect of the net debit due on the relevant account after taking into account that transaction; or
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 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 recognised multilateral netting agreement 1967 No 54 s 93A
256: Application of set-off under netting agreement
1: Sections 255 to 263
a: to a netting agreement—
i: made in or evidenced by writing; and
ii: in respect of which the application of sections 255 to 263
iii: whether made before or after the commencement of this section; and
b: to all obligations under a netting agreement (whether those obligations are payable in New Zealand currency or in some other currency).
2: Sections 255 to 263
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) in contravention of a prohibition in the netting agreement. 1967 No 54 s 93B
257: 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. 1967 No 54 s 93C
258: Mutuality required for transactions under bilateral netting agreements
1: Sections 255 to 263
2: Subsection (3) applies for the purpose of determining under this section whether there are mutual credits or mutual debts.
3: A debt or other liability incurred by a person ( T 1967 No 54 s 93D Section 258(2) inserted 31 March 2017 section 110 Regulatory Systems (Commercial Matters) Amendment Act 2017 Section 258(3) inserted 31 March 2017 section 110 Regulatory Systems (Commercial Matters) Amendment Act 2017
259: When mutuality required for transactions under recognised multilateral netting agreements
1: Sections 255 to 263
2: Despite subsection (1), sections 255 to 263
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. 1967 No 54 s 93E
260: Application of set-off under section 254 to transaction subject to netting agreements
1: Section 254 sections 255 to 263
2: However, a netted balance is to be treated as an amount to which section 254 1967 No 54 s 93F
261: Transactions under netting agreement and insolvent transactions
1: Nothing in sections 255 to 263 section 194
2: For the purposes of section 194
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. 1967 No 54 s 93G
262: Set-off under netting agreement not affected by notice under section 206(2)
The filing of a notice under section 206(2) section 257 1967 No 54 s 93H
263: Disclaimer of onerous property and termination of netting agreement not permitted
The Assignee must not—
a: disclaim, under section 117 125
b: terminate, under section 187 1967 No 54 s 93I Interest
264: Pre-adjudication interest
A creditor may claim interest up to the date of adjudication,—
a: in the case of contract debt interest, at the rate specified in the contract that provides for interest on the debt; or
b: in the case of judgment debt interest, at the rate payable on the debt. 1993 No 105 s 311(1)
265: Post-adjudication interest at prescribed rate if surplus remains
1: The Assignee must pay interest on all admitted creditors' claims at the prescribed rate if there are surplus assets left after the Assignee has paid the claims.
2: The Assignee must pay interest from the date of adjudication to the date when each debt is paid.
3: If the surplus is not enough to pay interest in full on all debts, payment of interest must abate rateably among them all. Example
A and B are the only creditors of the bankrupt, C. A's contract with C provided for interest of 20%, but B's contract did not provide for interest. C's bankruptcy commenced on 1 April 2002. At that date—(1) C owed A $1,000 plus $100 contractual debt interest; and (2) C owed B $2,000 but no interest. A can prove in the bankruptcy for $1,100 and B for $2,000. The Assignee pays their claims in full on 1 April 2003, 1 year after the commencement of the bankruptcy. If there are surplus assets after the Assignee has paid the claims of A and B in full, the Assignee must use the surplus to pay interest on both debts for the period from 1 April 2002 to 1 April 2003. If there is enough, and assuming that the prescribed rate is 10%, the Assignee must pay A $110 and B $200 in post-adjudication interest. Assume that the Assignee has a surplus of only $155. In that case A and B share pro rata, so that A is paid $55 in post-adjudication interest, and B is paid $100. 1993 No 105 s 311(2)
266: Additional post-adjudication interest on contract or judgment debt if surplus remains
1: If there is a surplus after the Assignee has paid post-adjudication interest at the prescribed rate under section 265
a: in the case of a contract debt, the difference between the prescribed rate and the rate specified in the contract:
b: in the case of a judgment debt, the difference between the prescribed rate and the rate payable on the debt.
2: The Assignee must pay interest from the date of adjudication to the date when each creditor's claim is paid.
3: If the surplus is not enough to pay additional post-adjudication interest in full on the creditors' claims eligible for that interest, payment of interest must abate rateably among them all. 1967 No 54 s 94 1993 No 105 s 311(3)
267: Meaning of prescribed rate
In sections 265 266 prescribed rate interest rate as defined in section 12(3) 1993 No 105 s 311(4) Section 267 amended 1 January 2018 section 29 Interest on Money Claims Act 2016 Miscellaneous provisions relating to creditors' claims
268: Creditor must deduct trade discounts
A creditor must deduct from the creditor's claim any trade discount that the creditor would have given a debtor if the debtor had not become bankrupt. 1967 No 54 s 92
269: Proof when charge void
If a creditor's charge is wholly or partly void under the provisions of this or any other Act, the creditor may prove as an unsecured creditor,—
a: if the charge is wholly void, for the whole of the debt; or
b: if the charge is partly void, to the extent that the debt is unsecured. 1967 No 54 s 96
270: Judgment creditor may prove for costs
A person who obtained an order for costs against the bankrupt before adjudication may prove for the amount of the costs when the costs are fixed, even if the amount is fixed only after adjudication. 1967 No 54 s 100
271: Company may prove for unpaid calls
1: This section applies if the bankrupt, at the time of adjudication, is a shareholder of a company that has not been put into liquidation.
2: The company may prove for—
a: the amount of unpaid calls on the bankrupt made before adjudication in respect of the bankrupt's shares; and
b: the value of the liability to calls to be made in the period of 1 year after adjudication.
3: The value referred to in subsection (2)﻿(b) must be estimated—
a: as agreed by the Assignee and the company; or
b: if the Assignee and the company cannot agree, as directed by the court.
4: This section does not affect the provisions of sections 103 268 1967 No 54 ss 101(1) 102
272: When guarantor for bankrupt may prove
1: This section applies if a person ( A
a: is, at the time of adjudication, guarantor of, or liable for a debt or liability of, the bankrupt; and
b: discharges the debt or liability, even after adjudication.
2: A has the benefit of the rules in subsections (3) and (4).
3: If the creditor in question has submitted a creditor's claim form for the debt or liability, A may stand in the creditor's place in respect of the claim.
4: If the creditor in question has not submitted a creditor's claim form for the debt or liability, A may—
a: prove for the payment that A has made as if the payment were a debt, without disturbing dividends already paid to the creditor in the bankruptcy; and
b: receive dividends paid subsequently. 1967 No 54 s 103
10: Distribution of assets
273: Priority of payments for distribution of bankrupt's assets
1: The Assignee must pay, out of the money received by him or her by the realisation of the property of the bankrupt, the preferential claims set out in section 274 sections 275 to 279
2: After paying the preferential claims in accordance with subsection (1), the Assignee must pay any remaining money to the general creditors in accordance with section 280
3: After paying the general creditors in accordance with subsection (2), the Assignee must pay any remaining money to the bankrupt in accordance with section 281
4: Any money received by the Assignee by the realisation of the property of the bankrupt that is not able to be paid in accordance with subsections (1) to (3), must be paid to Public Trust in accordance with section 283
5: Other than as set out in section 275(1)﻿(b) and (3)
a: the powers of secured creditors referred to in section 4(c)
b: any other enactment. 1993 No 105 ss 312 313 Preferential claims
274: Priority of payments to preferential creditors
1: The Assignee must first pay, in the order of priority in which they are listed,—
a: the fees and expenses properly incurred by the Assignee in carrying out the duties and exercising the powers of the Assignee, and the remuneration of the Assignee; and
b: the reasonable costs of a creditor in procuring the order of adjudication, including the reasonable costs incurred between lawyer and client in procuring the order, inclusive of and subsequent to the preparation and filing of the creditor's application for adjudication; and
c: to any creditor who protects, preserves the value of, or recovers property of the bankrupt for the benefit of the bankrupt's creditors by the payment of money or the giving of an indemnity,—
i: the amount received by the Assignee by the realisation of that property, up to the value of that creditor's unsecured debt; and
ii: the amount of the costs incurred by that creditor in protecting, preserving the value of, or recovering that property.
2: After paying the claims referred to in subsection (1), the Assignee must next pay, to the extent that they remain unpaid, the following claims:
a: subject to section 276(1)
aa: subject to section 276(1) section 169B
b: subject to section 276(1)
c: subject to section 276(1)
d: subject to section 276(1) section 163(1) section 167(2) section 70
e: subject to section 276(1) section 123(1)﻿(b) section 128
f: amounts that are preferential claims under section 172(2) and (3)
g: all amounts payable to the Commissioner of Inland Revenue in accordance with section 167(2) section 67
ga: all employer contributions payable to the Commissioner of Inland Revenue under Part 3, subpart 3 section 141(5)
h: all sums that, by any other enactment, are required to be paid in accordance with the priority established by this subsection.
3: After paying the claims referred to in subsection (2), the Assignee must next pay all sums, for which a buyer is a creditor in the bankruptcy under section 36J
a: paid by the buyer to a seller on account of the purchase price of goods; or
b: to which the buyer is or becomes entitled to receive from a seller under section 36H
4: After paying the claims referred to in subsection (3), the Assignee must next pay the amount of any costs referred to in section 333(4)﻿(c)
5: After paying the claims referred to in subsection (4) Comptroller of Customs
a: tax payable by the bankrupt in the manner required by Part 3
b: tax deductions made by the bankrupt under the PAYE rules of the Income Tax Act 2007
c: non-resident withholding tax deducted by the bankrupt under the NRWT rules of the Income Tax Act 2007
d: resident withholding tax deducted by the bankrupt under the RWT rules of the Income Tax Act 2007
e: duty payable within the meaning of section 5(1) 1967 No 54 s 104(1) 1993 No 105 Schedule 7 cls 1–5 Section 274(2)﻿(aa) inserted 7 January 2010 section 863 Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 Section 274(2)﻿(aa) amended 1 April 2019 section 259 Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 Section 274(2)﻿(d) amended 1 April 2012 section 223 Student Loan Scheme Act 2011 Section 274(2)﻿(ga) inserted 1 April 2023 section 223(2) Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 Section 274(3) amended 17 June 2014 section 41(2) Fair Trading Amendment Act 2013 Section 274(3)﻿(b) amended 17 June 2014 section 41(2) Fair Trading Amendment Act 2013 Section 274(5) amended 1 October 2018 section 443(3) Customs and Excise Act 2018 Section 274(5)﻿(b) amended 1 April 2008 section ZA 2(1) Income Tax Act 2007 Section 274(5)﻿(c) amended 1 April 2008 section ZA 2(1) Income Tax Act 2007 Section 274(5)﻿(d) amended 1 April 2008 section ZA 2(1) Income Tax Act 2007 Section 274(5)﻿(e) amended 1 October 2018 section 443(3) Customs and Excise Act 2018
275: Conditions to priority of payments to preferential creditors
1: The claims listed in each of subsections (2), (3), (4), and (5) of section 274
a: rank equally among themselves and, subject to any maximum payment level specified in any legislation
b: in so far as the property of the bankrupt available for payment of those claims is insufficient to meet them,—
i: have priority over the claims of any person under a security interest to the extent that the security interest—
A: is over all or any part of the bankrupt's accounts receivable and inventory or all or any part of either of them; and
B: is not a purchase money security interest that has been perfected at the time specified in section 74
C: is not a security interest that has been perfected under the Personal Property Securities Act 1999
ii: must be paid accordingly out of any accounts receivable or inventory subject to that security interest (or their proceeds).
2: For the purposes of subsection (1)﻿(b), the terms account receivable inventory new value proceeds purchase money security interest security interest Personal Property Securities Act 1999
3: To the extent that the claims to which subsection (1) applies are paid out of property referred to in paragraph (b) of that subsection, the amount so paid is an unsecured debt due by the bankrupt to the secured party. 1993 No 105 Schedule 7 cls 9, 10 Section 275(1)﻿(a) amended 28 October 2021 section 3 Secondary Legislation Act 2021
276: Provisions concerning preferential payments to employees
1: The total sum to which priority is to be given under any, or all, of paragraphs (a) to (e) of section 274(2) $25,480
2: The sum stated in subsection (1) must be adjusted as follows:
a: subject to paragraph (d), an adjustment must be made, by the Governor-General by Order in Council, after the 3-year period starting on 1 July 2006 and ending on 30 June 2009 and after every 3-year period following that (an adjustment period
b: subject to paragraph (d), the Order in Council must be made within 3 months of the end of an adjustment period:
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 QES
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), no adjustment is made, the next adjustment made for any succeeding adjustment period must reflect any overall percentage increase in average weekly earnings (total, private sector) between the date of the last adjustment and the end of the relevant adjustment period for which the adjustment is to be made:
f: all adjustments are cumulative and must be rounded to the nearest $20:
g: any correction to the QES
3: The sum stated in subsection (1), or any greater amount prescribed under subsection (2) that applies on the date on which a debtor is adjudicated bankrupt, continues to apply to that bankruptcy regardless of any change to that sum that is prescribed after the date on which the debtor is adjudicated bankrupt.
4: For the purposes of this section and section 274
a: remuneration in respect of a period of holiday or of absence from work through sickness or other good cause is to be treated as wages in respect of services rendered to the bankrupt during that period:
b: employee section 5
c: holiday pay subpart 1
d: QES
5: An order under subsection (2)﻿(a) is secondary legislation ( see Part 3 1967 No 54 s 104(1A), (1B), (3) 1993 No 105 Schedule 7 cls 6 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 276(1) $25,480 is the maximum priority amount 30 September 2021 clause 3 Insolvency (Maximum Priority Amount) Order 2021 Section 276(2)﻿(c) amended 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 276(2)﻿(g) amended 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 276(4)﻿(d) inserted 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 276(5) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
277: Subrogation of persons if payment has been made
If a payment has been made to a person ( A section 274 B 1993 No 105 Schedule 7 cl 7
278: Priority given to person who distrains on goods
If a landlord or other person has distrained on goods or effects of the bankrupt during the 20 working days before the adjudication, the preferential claims set out in section 274 1993 No 105 Schedule 7 cl 11
279: Creditors to have priority over creditors of joint bankrupt
If a person ( A 1967 No 54 s 106 Payments to general creditors and to bankrupt
280: Payment of remaining money to general creditors
1: After paying preferential claims in accordance with sections 274 to 279
2: The claims referred to in subsection (1) rank equally among themselves and must be paid in full, unless the money is insufficient to meet them, in which case they abate in equal proportions.
3: If, before the date of adjudication, a creditor agrees to accept a lower priority in respect of a debt than it would otherwise have under this section, nothing in this section prevents the agreement from having effect according to its terms. 1993 No 105 s 313(1)–(3)
281: Payment of surplus to bankrupt
1: After paying interest under section 265 section 280
2: This section is subject to section 215 1993 No 105 s 313(4) Undistributed money paid to Public Trust
282: Definition of undistributed money
In sections 283 to 289 undistributed money
a: any money that—
i: was received by the Assignee by the realisation of the property of the bankrupt; and
ii: remains after the Assignee deducts the costs of obtaining the Assignee’s release under sections 408 to 410
iii: is required to be paid to any person under sections 274 to 281
b: any money that is required to be distributed under section 358(1) Section 282 replaced 13 January 2020 section 65 Regulatory Systems (Economic Development) Amendment Act 2019
283: Undistributed money to be paid to Public Trust
The Assignee must pay any undistributed money to Public Trust. 1967 No 54 s 134(1)
284: Public Trust to hold undistributed money
1: Public Trust must hold any undistributed money paid to it subject to the claim of any person who appears to be entitled to that money.
2: Undistributed money paid to Public Trust is held by Public Trust subject to—
a: this Act; and
b: the Public Trust Act 2001
c: any other enactment relating to Public Trust.
3: If there is any inconsistency between the provisions of this Act and any provisions of the Public Trust Act 2001 1967 No 54 s 134(1), (2), (7)
285: Public Trust to pay undistributed money to bankruptcy surplus account
1: After the expiry of 12 months from the date on which undistributed money is paid to Public Trust, Public Trust must transfer any undistributed money that has not been claimed by a person into a bankruptcy surplus account.
2: Undistributed money transferred into a bankruptcy surplus account—
a: is deemed to be one common and general fund; and
b: may be applied without discrimination in accordance with section 286 1967 No 54 s 134(3)
286: Application of undistributed money held in bankruptcy surplus account
Undistributed money held in the bankruptcy surplus account may be used as follows:
a: for distribution to any person who remains to be paid,—
i: in the case of a bankruptcy, as set out in section 282(a)﻿(iii)
ii: in the case of a debt repayment order, as set out in section 358(1)
b: for the purposes of this Act, to the extent and in the manner allowed by this Act; and
c: subject to section 287 subpart 2
d: subject to section 288 Section 286 replaced 13 January 2020 section 66 Regulatory Systems (Economic Development) Amendment Act 2019
287: Requisition of Minister required for payment under section 286(c)
Public Trust may pay undistributed money out of the bankruptcy surplus account under section 286(c) 1967 No 54 s 134(5)
288: Approval of Official Assignee required for payment under section 286(d)
Public Trust may pay undistributed money out of the bankruptcy surplus account under section 286(d) 1967 No 54 s 134(6)
289: Matters concerning bankruptcy surplus account
1: Subject to sections 285 to 288 Public Trust Act 2001
2: Undistributed money may be paid out of the bankruptcy surplus account under section 286(c) or (d)
3: Public Trust may make a payment out of the bankruptcy surplus account without being concerned to see or inquire whether Public Trust received any undistributed money or sufficient undistributed money on account of the bankrupt in respect of whom the application for payment relates whenever an application for a payment out of that account is made to Public Trust under section 286
a: by requisition of the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administration of this Act; or
b: with the approval of the chief executive of the department of State that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act; or
c: by an Official Assignee. 1967 No 54 s 134(7), (8)
4: End of bankruptcy
1: Discharge from bankruptcy
Automatic discharge from bankruptcy
290: Automatic discharge 3 years after bankrupt files statement of affairs
1: A bankrupt is automatically discharged from bankruptcy 3 years after the bankrupt files a statement of affairs under section 46 section 67
2: However, a bankrupt is not automatically discharged if—
a: the Assignee or a creditor has objected under section 292
b: the bankrupt has to be publicly examined under section 173
c: the bankrupt is undischarged from an earlier bankruptcy. 1967 No 54 s 107(1), (2), (6)
290A: Automatic discharge of bankrupts who die before filing statement of affairs
If a bankrupt dies before filing a statement of affairs, the bankrupt is automatically discharged from bankruptcy 3 years after the bankrupt’s death. Section 290A inserted 13 January 2020 section 67 Regulatory Systems (Economic Development) Amendment Act 2019
291: Effect of automatic discharge
The automatic discharge of the bankrupt has the same effect as if the court made an order for the bankrupt's discharge. 1967 No 54 s 107(7)
292: Objection to automatic discharge
1: The Assignee or, with the permission of the court, a creditor may object to the bankrupt's automatic discharge.
2: The objection must be made in the prescribed manner. 1967 No 54 s 107(3)
293: Objection may be withdrawn
1: An objection to the automatic discharge of the bankrupt may be withdrawn in the prescribed manner.
2: The bankrupt is automatically discharged on the withdrawal of the objection if—
a: the 3-year period referred to in section 290(1)
b: there is no other objection to the discharge that has not been withdrawn; and
c: neither section 290(2)﻿(b) nor (c) 1967 No 54 s 107(4), (5) Application for discharge from bankruptcy
294: Bankrupt may apply for discharge
1: The bankrupt may at any time apply to the court for an order of discharge from bankruptcy.
2: However, if the court has previously refused an application by the bankrupt for a discharge, and has specified the earliest date when the bankrupt may again apply, the bankrupt must not apply before that date.
3: The hearing of the application must be in accordance with section 177 1967 No 54 s 108 Examination concerning discharge from bankruptcy
295: When bankrupt must be examined concerning discharge
1: The Assignee must summon the bankrupt to be publicly examined by the court concerning his or her discharge, and the court must conduct the examination, if—
a: the Assignee or a creditor has objected to the bankrupt's automatic discharge and the objection has not been withdrawn; or
b: the bankrupt is due for automatic discharge but is still undischarged from an earlier bankruptcy; or
c: the bankrupt has been required to be publicly examined under section 173
2: The Assignee must summon the bankrupt as soon as practicable after the expiry of the 3-year period referred to in section 290(1)
3: Sections 173 to 181 1967 No 54 s 109(1), (3)
296: Assignee's report
1: The Assignee must prepare a report and file it in the court when—
a: the bankrupt has applied under section 294
b: the Assignee has summoned the bankrupt to be examined under section 295
2: The Assignee must report as to—
a: the bankrupt's affairs; and
b: the causes of the bankruptcy; and
c: the bankrupt's performance of his or her duties under this Act; and
d: the manner in which the bankrupt has obeyed orders of the court; and
e: the bankrupt's conduct before and after adjudication; and
f: any other matter that would assist the court in making a decision as to the bankrupt's discharge. 1967 No 54 s 109(2)
297: When creditor must give notice of opposition to discharge
1: A creditor must give notice to the Assignee and the bankrupt if the creditor intends to oppose the bankrupt's discharge on a ground that is not mentioned in the Assignee's report.
2: The notice must—
a: set out the ground or grounds for opposing the discharge; and
b: be given within the prescribed time. 1967 No 54 s 109(4)
298: Court may grant or refuse discharge
1: When the court hears an application under section 294 section 295
a: immediately discharge the bankrupt; or
b: discharge the bankrupt on conditions (which may include a condition that the bankrupt consents to any judgment or order for the payment of any sum of money); or
c: discharge the bankrupt but suspend the order for a period; or
d: discharge the bankrupt, with or without conditions, at a specified future date; or
e: refuse an order of discharge, in which case the court may specify the earliest date when the bankrupt may apply again for discharge.
2: If the court discharges the bankrupt on the condition that the bankrupt consents to any judgment, and the bankrupt does consent, the court may vary the judgment as it thinks appropriate. 1967 No 54 s 110(1), (3)
299: Court may restrict bankrupt from engaging in business after discharge
1: The court, when it makes an order of discharge or at any earlier time, may prohibit the bankrupt after discharge from doing any or all of the following things without the court's permission:
a: entering into, carrying on, or taking part in the management or control of any business or class of business:
b: being a director of any company:
c: directly or indirectly being concerned, or taking part, in the management of any company:
d: being employed by a relative of the bankrupt:
e: being employed by a company, trust, trustee, or incorporated society that is managed or controlled by a relative of the bankrupt.
2: The court may—
a: prohibit the bankrupt for a specified period, or without a time limit:
b: at any time vary or cancel the prohibition. 1967 No 54 s 111
300: Court may reverse order of discharge
1: The court may, on the application of the Assignee or a creditor, reverse the discharge of a bankrupt at any time before—
a: 2 years after the discharge, in the case of an absolute discharge; or
b: 2 years after the discharge takes effect, in the case of a discharge that is conditional or suspended.
2: When the court reverses a discharge, the court may then, or at any time after, make a new order of discharge, whether absolute, suspended, or conditional. 1967 No 54 s 112(1), (4)
301: Grounds for reversing discharge
1: The court may reverse a discharge if—
a: the bankrupt has been given notice of the application (including the grounds relied on by the applicant); and
b: the court is satisfied that facts have been established that—
i: were not known to the court when it made the order of discharge; and
ii: had the court known of them, would have justified the court in refusing a discharge or discharging the bankrupt on conditions.
2: The court must not reverse a discharge if the facts relied on by the applicant, at the time when the court made an order discharging the bankrupt,—
a: were known to the applicant; or
b: could have been known if the applicant had inquired with reasonable diligence. 1967 No 54 s 112(1), (2)
302: Effect of reversal of discharge
1: The reversal of a discharge does not prejudice or affect the rights or remedies that any person other than the bankrupt would have had if the discharge had not been reversed.
2: Property that has been acquired by the bankrupt after discharge and that is vested in the bankrupt at the date of the reversal—
a: vests in the Assignee subject to any encumbrances; and
b: must be applied by the Assignee to pay debts that the bankrupt has incurred since the date of discharge. 1967 No 54 s 112(3)
303: Bankrupt may apply for absolute discharge if conditions of discharge too onerous
1: A bankrupt who cannot comply with any or all of the conditions of his or her discharge may apply to the court for an absolute discharge.
2: The court may discharge the bankrupt absolutely if the court is satisfied that the bankrupt's inability is due to circumstances for which the bankrupt should not reasonably be held responsible. 1967 No 54 s 113
304: Debts from which bankrupt is released on discharge
1: On discharge, the bankrupt is released from all debts provable in the bankruptcy except those listed in subsection (2).
2: The bankrupt is not released from the following debts:
a: any debt or liability incurred by fraud or fraudulent breach of trust to which the bankrupt was a party:
b: any debt or liability for which the bankrupt has obtained forbearance through fraud to which the bankrupt was a party:
c: any judgment debt or amount payable under any order for which the bankrupt is liable under section 147 section 298
d: any amount payable under a maintenance order under the Family Proceedings Act 1980
e: any amount payable under the Child Support Act 1991 1967 No 54 s 114
305: Discharge conclusive evidence of bankruptcy
A discharge is conclusive evidence of the bankruptcy and of the validity of the proceedings in the bankruptcy. 1967 No 54 s 115
306: Discharge does not release partners and others
A discharge does not release any person who, at the date of adjudication, was—
a: a business partner of the bankrupt; or
b: a co-trustee with the bankrupt; or
c: jointly bound or had made any contract with the bankrupt; or
d: a guarantor or in the nature of a guarantor of the bankrupt. 1967 No 54 s 116
307: Discharged bankrupt must assist Assignee
A discharged bankrupt must assist the Assignee, as required by the court or the Assignee, in the realisation and distribution of the bankrupt's property that is vested in the Assignee. 1967 No 54 s 117
308: Information regarding bankrupt's discharge must be contained in public register maintained under section 62
If the court has refused a bankrupt a discharge or discharged the bankrupt but suspended the discharge, that information must be contained in the public register maintained under section 62 1967 No 54 s 118
2: Annulment
309: Court may annul adjudication
1: The court may, on the application of the Assignee or any person interested, annul the adjudication if—
a: the court considers that the bankrupt should not have been adjudicated bankrupt; or
b: the court is satisfied that the bankrupt's debts have been fully paid or satisfied and that the Assignee's fees and costs incurred in the bankruptcy have been paid; or
c: the court considers that the liability of the bankrupt to pay his or her debts should be revived because there has been a substantial change in the bankrupt's financial circumstances since the date of adjudication; or
d: the court has approved a composition under subpart 1
2: In the case of an application on one of the grounds specified in subsection (1)﻿(a) to (c) by an applicant who is not the Assignee,—
a: a copy of the application must be served on the Assignee in the manner and within the time that the court directs; and
b: the Assignee may appear on the hearing of the application as if the Assignee were a party to the proceeding.
3: The adjudication is annulled—
a: from the date of adjudication, in the case of an application on the ground specified in subsection (1)﻿(a):
b: from the date of the court's order of annulment, in the case of an application on one of the grounds specified in subsection (1)﻿(b) to (d).
4: In the case of an application for annulment on the ground that the adjudication should not have been made because of a defect in form or procedure, the court may, in addition to annulling the adjudication, exercise its powers under section 418
5: If the court annuls the adjudication on one of the grounds specified in subsection (1)﻿(a) to (c),—
a: the court may, on the Assignee's application, fix an amount as reasonable remuneration for the Assignee's services and order that it be paid, in addition to any costs that may be awarded:
b: that amount must be paid into a Crown Bank Account:
c: the Assignee is not entitled to remuneration under section 406 1967 No 54 s 119
310: When Assignee may annul adjudication
1: The Assignee may annul an adjudication on any of the grounds specified in subsection (2) if the adjudication was made on a debtor's application.
2: The grounds for annulment by the Assignee are—
a: the Assignee considers that the bankrupt should not have been adjudicated bankrupt; or
b: the Assignee is satisfied that the bankrupt's debts have been fully paid or satisfied and that the Assignee's fees and costs incurred in the bankruptcy have been paid; or
c: the Assignee considers that the liability of the bankrupt to pay his or her debts should be revived because there has been a substantial change in the bankrupt's financial circumstances since the date of adjudication; or
d: the court has approved a composition under subpart 1
3: The Assignee may annul the adjudication on the application of any person interested or on the Assignee's own initiative.
4: The adjudication is annulled—
a: from the date of adjudication, in the case of an application on the ground specified in subsection (2)﻿(a):
b: from the date of the Assignee's order of annulment, in the case of an application on one of the grounds specified in subsection (2)﻿(b) to (d).
311: Effect of annulment
1: On annulment of the adjudication, all property of the bankrupt vested in the Assignee on bankruptcy and not sold or disposed of by the Assignee revests in the bankrupt without the necessity for any conveyance, transfer, or assignment.
2: Any contract, sale, disposition, or payment duly made or anything duly done by the Assignee before the annulment—
a: is not prejudiced or affected as to validity by the annulment; and
b: has effect as if it had been made or done by the bankrupt while no adjudication was in force. 1967 No 54 s 120
5: Compositions, proposals,
debt repayment Part 5 heading amended 13 January 2020 section 68 Regulatory Systems (Economic Development) Amendment Act 2019
1: Composition during bankruptcy
312: Creditors may accept composition by passing preliminary resolution
1: The creditors of a bankrupt may accept a composition in satisfaction of the debts due to them from the bankrupt by passing a special resolution (the preliminary resolution
2: If there is more than 1 class of creditor, the delay of one class in accepting, or the failure of one class to accept, does not prevent any other of the classes from accepting the composition. 1967 No 54 ss 121(1) 125(3)
313: Confirming resolution
1: The composition is ineffective unless the creditors confirm the composition by passing a special resolution (the confirming resolution
2: The creditors may confirm in the composition on terms that vary from the terms contained in the preliminary resolution, if the final terms are at least as favourable to the creditors as the terms set out in the preliminary resolution.
3: The notice of the meeting to pass the confirming resolution must—
a: state generally the terms of the proposal for composition; and
b: be accompanied by a report by the Assignee on the proposal.
4: If the proposal for composition provides for the payment in full of all creditors whose respective debts do not exceed a certain amount, that class of creditors must not be counted either in number or value for the purpose of counting the requisite majority of creditors for passing the confirming resolution. 1967 No 54 s 121(2), (3), (4)
314: Compositions with members of partnership
1: If the members of a partnership have been adjudicated bankrupt, the joint creditors and each class of separate creditors may make separate compositions.
2: In that case, the majorities of creditors required for passing the confirming resolution are the separate majorities of each class, but otherwise the joint and separate creditors must be counted as one body for voting. 1967 No 54 s 125(2)
315: Court must approve composition
1: The court must approve the composition if it is to be binding.
2: The composition approved by the court binds all the creditors in respect of provable debts due to them by the bankrupt.
3: The court may refuse to approve the composition if it considers that—
a: section 312 313
b: the terms of the composition are not reasonable or are not calculated to benefit the general body of creditors; or
c: the bankrupt is guilty of misconduct that justifies the court in refusing, qualifying, or suspending the bankrupt's discharge; or
d: for any other reason it should not approve the composition.
4: The court must not approve the composition if the composition does not provide for the payment, before any other debts are paid, of those debts that have priority under subpart 10
5: The court's approval is conclusive as to the validity of the composition. 1967 No 54 s 122(3), (4), (5), (7)
316: Procedure for court approval of composition
1: The bankrupt or the Assignee may apply to the court to approve the composition.
2: Notice of the application must be given to each creditor.
3: Before approving the composition, the court must—
a: receive a report by the Assignee as to the terms of the composition and the bankrupt's conduct; and
b: hear any objection by or on behalf of a creditor.
4: When it approves the composition, the court may correct any formal or accidental error or omission, but must not alter the substance of the composition. 1967 No 54 s 122(1), (2), (6)
317: Deed of composition
1: As soon as practicable after the court has approved a composition,—
a: the bankrupt and the Assignee must execute a deed of composition for putting the proposal into effect; and
b: the Assignee must apply to the court for confirmation of the deed.
2: If it is satisfied that the deed conforms with the composition that it has earlier approved, the court must—
a: direct that the deed is entered and filed in the court; and
b: annul the adjudication.
3: The deed must not be entered and filed in the court unless the prescribed commission has been paid to the Assignee.
4: The annulment under subsection (2) does not revest the bankrupt's property in the bankrupt in accordance with section 311(1) 1967 No 54 ss 123(1), (2) 125(5)
318: Effect of deed
When the court has confirmed the deed and annulled the adjudication,—
a: the deed binds all the creditors in all respects as if they had each executed the deed; and
b: subject to the provisions of the Land Transfer Act 2017 1967 No 54 s 123(2) Section 318(b) amended 12 November 2018 section 250 Land Transfer Act 2017
319: Bankrupt remains liable for unpaid balances of certain debts
1: A bankrupt who makes a composition with his or her creditors remains liable for the unpaid balance of a debt if—
a: the bankrupt, by means of fraud,—
i: incurred or increased the debt; or
ii: on or before the date of the composition, obtained forbearance on the debt; and
b: the creditor who has been defrauded has not agreed to the composition.
2: For the purposes of subsection (1)﻿(b) a creditor does not agree to the composition merely by proving the debt and accepting payment of a distribution of the assets in the estate. 1967 No 54 s 125(4)
320: Deadlines for steps to approve composition and execute deed
1: The deadlines for steps to approve the composition and execute the deed are—
a: the confirming resolution must be passed within 1 month after the preliminary resolution is passed; and
b: the court must approve the composition within 1 month after the confirming resolution is passed; and
c: the bankrupt must execute the deed of composition within 5 working days after the court approves the composition or, if the court allows the bankrupt additional time, within that time.
2: If any of the deadlines is not kept,—
a: immediately on the expiry of the deadline, the proceedings in the bankruptcy resume as if there had been no confirming resolution; and
b: none of the periods specified in subsection (1) counts in the calculation of a period of time for any purpose of this Act. 1967 No 54 s 125(1)
321: Procedure following court approval of composition
1: The Registrar of the court must, after entering the deed of composition,—
a: endorse on the deed that it has been entered and filed in the court; and
b: if requested by the Assignee, deliver the deed to the Assignee.
2: The Assignee, as soon as practicable after the deed has been entered,—
a: must take all steps necessary to have any vesting provided for in the deed registered or recorded in the appropriate registry or office, and must then return the deed to the file of the court; and
b: must, subject to the provisions of the deed, give possession to the bankrupt or the trustee under the composition, as the case may be, of—
i: the bankrupt's property; or
ii: so much of the bankrupt's property as the Assignee possesses and that under the composition revests in the bankrupt or the trustee. 1967 No 54 s 123(3), (4)
322: Enforcement of composition
The court may,—
a: on the application of an aggrieved person, order that any default in payment of any composition approved by the court be remedied:
b: on the application of a person interested, enforce the provisions of any composition approved by the court. 1967 No 54 s 124(1), (2)
323: Court's exclusive jurisdiction
1: After the preliminary resolution has been passed, the court continues to have exclusive jurisdiction in relation to the composition and the deed of composition, and their administration.
2: On an application in relation to the composition, the deed of composition, or their administration, the court may,—
a: for the purpose of summoning and examining the bankrupt and witnesses, direct the proceeding as if it were a proceeding under subpart 5
b: make the order or orders that it thinks appropriate, including an order as to the costs of the application. 1967 No 54 s 124(3), (4)
324: Law and practice in bankruptcy applies to deed
The court must decide a question arising under the deed of composition according to the law and practice of bankruptcy, if the law and practice of bankruptcy is relevant. 1967 No 54 s 124(5)
2: Proposals
325: Meaning of debt, etc
1: In this subpart, unless the context otherwise requires,— debt insolvent
2: The debt of an insolvent is provable under this subpart. 1967 No 54 s 139
326: Insolvent may make proposal
1: An insolvent may make a proposal to creditors for the payment or satisfaction of the insolvent's debts.
2: The proposal may include all or any of the following:
a: an offer to assign all or any of the insolvent's property to a trustee for the benefit of the creditors:
b: an offer to pay the insolvent's debts by instalments:
c: an offer to compromise the insolvent's debts at less than 100 cents in the dollar:
d: an offer to pay the insolvent's debts at some time in the future:
e: any other offer for an arrangement for the satisfaction of the insolvent's debts.
3: The proposal may include any other conditions for the benefit of the creditors and may be accompanied by a charge or guarantee. 1967 No 54 s 140(1), (2), (3)
327: Form of proposal
1: The proposal must be—
a: in the prescribed form; and
b: accompanied by a statement of affairs that is in the prescribed form and verified by affidavit.
2: The statement of affairs must set out the following information:
a: the insolvent's assets, debts, and liabilities:
b: the name, address, and occupation of each of the insolvent's creditors:
c: the securities (if any) held by each creditor.
3: The proposal must—
a: be signed by the insolvent; and
b: have endorsed on it the name of a person ( A
c: include a statement by A that A is willing to act. 1967 No 54 s 140(4), (5)
328: Proposal must be filed in court
1: The proposal must be filed in the office of the court nearest to where the insolvent lives.
2: The insolvent may not, while waiting for the decision of the creditors and the court, withdraw the proposal or any charge or guarantee tendered with it, unless the insolvent obtains the permission of the court.
3: The time when the proposal is filed in court is the time when the claims of creditors are determined.
4: If the creditors at a meeting under section 331
a: the chairperson of the meeting must return the proposal to the court with his or her signed endorsement Not accepted by creditors
b: the Registrar must cancel the proposal. 1967 No 54 s 140(5)–(8)
329: Provisional trustee
The trustee named in the proposal becomes the provisional trustee when the proposal is filed. 1967 No 54 s 141(1)
330: Provisional trustee must call meeting of creditors
1: The provisional trustee must, as soon as practicable after the proposal is filed, call a meeting of creditors by posting to every known creditor at the creditor's last known address—
a: a notice of the date, time, and place of the meeting:
b: a summary of the insolvent's assets and liabilities:
c: a copy of the proposal and particulars of any charge or guarantee:
d: a creditor's claim form:
e: a postal vote in the prescribed form.
2: A creditor who has proved a claim in the prescribed manner may vote on the proposal by sending a postal vote that reaches the provisional trustee before or at the meeting.
3: If the provisional trustee receives a postal vote before or at the meeting, the postal vote has effect as if the creditor had been present and voted at the meeting. 1967 No 54 s 141(2), (3)
331: Procedure at meeting of creditors
1: The provisional trustee is the chairperson of the meeting of creditors, unless the creditors elect their own chairperson.
2: The creditors may—
a: examine the insolvent:
b: accept the proposal with or without amendments or modification, by passing a resolution that sets out the proposal in its final form:
c: confirm the provisional trustee as trustee, or appoint another person who is willing to act as trustee, in which case that person becomes the trustee.
3: The resolution accepting the proposal must be decided by a majority in number and three-quarters in value of the creditors who—
a: vote; and
b: are personally present or are represented at the meeting by a person specified in section 332
4: If the insolvent consents, the creditors may include in the proposal terms for the supervision of the insolvent's affairs. 1967 No 54 s 142
332: Who may represent creditors
A person who may represent a creditor under section 91
333: Court must approve proposal
1: After the proposal has been accepted by the creditors, the trustee must, as soon as practicable,—
a: apply to the court for approval of the proposal; and
b: send notice of the hearing of the application in the prescribed form to the insolvent and to each known creditor.
2: The court must, before approving a proposal, hear any objection that is made by or on behalf of a creditor.
3: The court may refuse to approve the proposal if it considers that—
a: the provisions of this subpart have not been complied with; or
b: the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors; or
c: for any reason it is not expedient that the proposal be approved.
4: The court must not approve a proposal if it does not provide for the payment, before any other debts are paid, of—
a: those debts that would have priority under this Act if the insolvent was adjudicated bankrupt; and
b: the trustee's fees and expenses that are properly incurred by the trustee in respect of the proposal; and
c: costs incurred by a person other than the insolvent in organising and conducting a meeting of creditors for the purpose of voting on a proposal.
5: Subsection (4)﻿(a) does not apply to the extent that a creditor waives the priority that the debt of that person would otherwise have had.
6: When it approves the proposal, the court may correct any formal or accidental error or omission, but must not alter the substance of the proposal. 1967 No 54 s 143(1)–(4), (6) 1993 No 105 s 234(c)
334: Effect of court approval
1: A proposal that is approved by the court is binding on all the creditors whose debts are provable under this subpart and are affected by the terms of the proposal.
2: The court's approval is conclusive as to the validity of the proposal. 1967 No 54 s 143(5), (7)
335: Creditor must not take enforcement steps without court's permission
1: A creditor whose debt is provable under this subpart must not take any of the steps listed in subsection (2) in respect of the debt—
a: after the court has approved the proposal; and
b: while the proposal remains in force.
2: The steps referred to in subsection (1) are—
a: filing a creditor's application for the insolvent's adjudication:
b: proceeding with a creditor's application for the insolvent's adjudication that was filed before the proposal was filed:
c: enforcing any civil remedy against the insolvent's person or property:
d: beginning any legal proceedings in respect of the debt.
3: However, a creditor may take any of the steps listed in subsection (2) with the permission of the court given on the terms that the court thinks appropriate. 1967 No 54 s 144(1)
336: Duty of insolvent
After the court has approved the proposal, the insolvent must do everything that is necessary to put the proposal into effect. 1967 No 54 s 143(8)
337: Duties of trustee
1: After the court has approved the proposal, the trustee must—
a: take control of the property that is the subject of the proposal; and
b: administer and distribute that property according to the terms of the proposal; and
c: generally give effect to the proposal.
2: The trustee may sell the property—
a: according to the terms of the proposal, if it specifies the method of sale; or
b: in accordance with Schedule 1 1967 No 54 s 144(2)
338: Trustee must file 6-monthly summary of receipts and payments
1: The trustee must file with the Registrar a summary of receipts and payments.
2: The trustee must file the summary,—
a: for each 6-month period following court approval of the proposal, within 1 month after the end of the period; and
b: for the period between the end of the last 6-month period and the date when the trustee stops acting as trustee, within 1 month after the trustee has stopped acting.
3: The summary must—
a: be in the prescribed form; and
b: show the trustee's receipts and payments during the period to which it relates; and
c: show the total amount of the trustee's receipts and payments for all the preceding 6-month periods after the trustee's appointment. 1967 No 54 s 144(3)
339: Cancellation or variation of proposal
1: At any time after it has approved the proposal, the court may, if it is satisfied that 1 or more of the grounds listed in subsection (2) apply,—
a: on the application of the trustee or any creditor, vary or cancel the proposal:
b: if asked to do so by the applicant or any other creditor, adjudicate the insolvent bankrupt.
2: The grounds referred to in subsection (1) are—
a: the insolvent's statement of affairs accompanying the proposal did not substantially set out the true position or the insolvent gave wrong or misleading replies at his or her examination, and it was unlikely that the proposal would have been accepted if the insolvent had disclosed the true facts:
b: the insolvent has failed to carry out or comply with the terms of the proposal:
c: the creditors generally will suffer injustice or undue delay if the proposal proceeds:
d: for any other reason the proposal ought to be varied or cancelled.
3: On cancellation of the proposal, unless the court orders otherwise, all property of the insolvent vested in the trustee and not sold or disposed of by the trustee vests, without the necessity for any conveyance, transfer, or assignment,—
a: in the insolvent; or
b: if the court cancels the proposal and adjudicates the insolvent bankrupt, in the Assignee.
4: An order cancelling the proposal, or cancelling the proposal and adjudicating the insolvent bankrupt, does not prejudice or affect the validity of any contract, sale, disposition, or payment duly made or anything duly done under the proposal while it was in force.
5: If the insolvent files an application for his or her own adjudication, the proposal is cancelled as if it was cancelled by the court. 1967 No 54 s 145
3: Debt repayment orders
Subpart 3 heading replaced 13 January 2020 section 69 Regulatory Systems (Economic Development) Amendment Act 2019
340: Debt repayment order
A debt repayment order is an order by the Assignee that the debtor pay their debts—
a: in instalments or otherwise; and
b: in full or to the extent that the Assignee considers practicable in the circumstances of the case. Section 340 replaced 13 January 2020 section 70 Regulatory Systems (Economic Development) Amendment Act 2019
341: Who may apply for order
The Assignee may make a debt repayment
a: the debtor; or
b: a creditor, with the debtor's consent. 1967 No 54 s 146(1) Section 341 amended 13 January 2020 section 71 Regulatory Systems (Economic Development) Amendment Act 2019
342: Form of application
1: An application for a debt repayment
2: An application by the debtor—
a: must state—
i: that the debtor proposes to pay the creditors in full; or
ii: the amount in the dollar that the debtor proposes to pay; and
b: must state the total amount of the weekly or other instalments that the debtor proposes to pay; and
c: must—
i: state the name and address of the debtor's proposed supervisor and annex the written consent of that person to be supervisor; or
ii: if the debtor considers that a supervisor is not necessary, state the debtor's reasons; and
d: must contain the following information:
i: the debtor's full name and address:
ii: details of the debtor's property:
iii: the names and addresses of each creditor:
iv: the amount and nature of each of the creditors' debts:
v: whether any of the debts are secured and the value of the charge:
vi: whether any of the debts are guaranteed by any person:
vii: the amount of the debtor's earnings:
viii: the name and address of the debtor's employer, if any:
ix: any other matter that may be prescribed. 1967 No 54 s 146(2) Section 342(1) amended 13 January 2020 section 72 Regulatory Systems (Economic Development) Amendment Act 2019
343: Assignee may make debt repayment order
1: The Assignee may make a debt repayment order if the Assignee is satisfied that—
a: the debtor’s total unsecured debts (apart from any excluded debt) that would be provable in the debtor’s bankruptcy are not more than $50,000; and
b: the debtor is unable immediately to pay those debts; and
c: the order relates only to those debts.
2: Before making the order, the Assignee must allow the debtor or a creditor to make representations, if the debtor or creditor wants to do so.
3: A debt repayment order is not invalid if the total amount of the debts proved is more than the amount specified in subsection (1)﻿(a), but in that case—
a: the supervisor appointed under section 345
b: the Assignee may, if the Assignee thinks appropriate, cancel the order.
4: The amount in subsection (1)﻿(a) may be varied by the Governor-General by Order in Council to take account of increases in the all groups index number of the Consumers
5: An order under subsection (4) is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 343 replaced 13 January 2020 section 73 Regulatory Systems (Economic Development) Amendment Act 2019 Section 343(4) amended 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 343(5) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
344: Additional orders
In addition to an order for the payment of the debts in instalments, the Assignee may make orders—
a: regarding the debtor's future earnings or income:
b: regarding the disposal of goods that the debtor owns or possesses:
c: giving the supervisor appointed under section 345
i: direct the debtor's employer to pay all or part of the debtor's earnings to the supervisor; and
ii: supervise payment, out of the debtor's earnings or income, of the reasonable living expenses of the debtor and his or her relatives and dependants. 1967 No 54 s 146(8), (9)
345: Appointment of supervisor
1: A debt repayment
2: The Assignee may dispense with the appointment of a supervisor if the Assignee thinks it appropriate, and in that case—
a: the provisions of this subpart apply as if the debtor was the supervisor, except for section 346
b: section 346
3: The Assignee may, if the Assignee thinks appropriate, require the supervisor to provide a bond to secure the supervisor's performance of his or her obligations under the Act, and must specify the amount of the bond and the person to whom it must be given. 1967 No 54 s 146(5)–(7) Section 345(1) amended 13 January 2020 section 74 Regulatory Systems (Economic Development) Amendment Act 2019
346: Role of supervisor
1: The supervisor must supervise the debtor's compliance with the terms of the debt repayment section 344
2: The supervisor may charge the debtor remuneration for carrying out his or her duties as supervisor at the amount or rates fixed or prescribed under subsection (3).
3: The Governor-General may, by Order in Council, make regulations that fix or prescribe the amount or rates of remuneration chargeable under subsection (2).
4: Regulations under this section are secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 346(1) amended 13 January 2020 section 75 Regulatory Systems (Economic Development) Amendment Act 2019 Section 346(4) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
347: Assignee may require supervisor or past supervisor to provide documents
The Assignee may, by written notice, require the supervisor or a past supervisor to provide the Assignee within a reasonable period with any document relating to the debtor's property, conduct, or dealings in the supervisor's or past supervisor's possession or under his or her control.
348: Termination of supervisor’s appointment
The Assignee may—
a: terminate the supervisor’s appointment if the Assignee considers—
i: that the supervisor has failed to supervise the debtor’s compliance adequately; or
ii: that, after being appointed, the supervisor has been convicted of an offence involving dishonesty; and
b: appoint a replacement supervisor accordingly. Section 348 replaced 30 May 2017 section 111 Regulatory Systems (Commercial Matters) Amendment Act 2017
349: Period of instalments
The payment of instalments under a debt repayment
a: up to 3 years; or
b: up to 5 years, if justified by special circumstances. 1967 No 54 s 146(12) Section 349 amended 13 January 2020 section 76 Regulatory Systems (Economic Development) Amendment Act 2019
350: Variation or
cancellation of order by Assignee on application from debtor, creditor, or supervisor The debtor or any creditor or the supervisor may at any time apply to the Assignee to vary or cancel debt repayment 1967 No 54 s 146(14) Section 350 heading amended 30 May 2017 section 112(1) Regulatory Systems (Commercial Matters) Amendment Act 2017 Section 350 amended 13 January 2020 section 77 Regulatory Systems (Economic Development) Amendment Act 2019 Section 350 amended 30 May 2017 section 112(2) Regulatory Systems (Commercial Matters) Amendment Act 2017
350A: Cancellation of order by Assignee without application
The Assignee may (without an application from any person) cancel a debt repayment order if satisfied that the debtor—
a: is in default under the order; or
b: is able immediately to pay the debtor’s unsecured debts (apart from any excluded debt); or
c: cannot be located. Section 350A replaced 13 January 2020 section 78 Regulatory Systems (Economic Development) Amendment Act 2019
351: Effect of order
All instalments payable under a debt repayment 1967 No 54 s 146(11) Section 351 amended 13 January 2020 section 79 Regulatory Systems (Economic Development) Amendment Act 2019
352: Proceedings against debtor
1: In this section, proceeding (other than an excluded debt)
a: shown in the debtor's application for the debt repayment
b: included in the debt repayment
c: notified to the supervisor.
2: After the debt repayment
a: the Assignee gives permission for a creditor to begin or continue the proceeding (in which case the Assignee may impose any conditions that the Assignee thinks appropriate); or
b: the debtor is in default under the order or the order has been cancelled
3: In the case of a proceeding in the District Court
a: must halt the proceeding on receiving notice of the order; and
b: may award all or part of the creditor's costs incurred up to the time of the court's notification, and may certify accordingly for the purpose of the creditor proving the debt under this subpart. 1967 No 54 s 148 Section 352(1) amended 13 January 2020 section 80(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 352(1)﻿(a) amended 13 January 2020 section 80(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 352(1)﻿(b) amended 13 January 2020 section 80(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 352(2) amended 13 January 2020 section 80(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 352(2)﻿(b) amended 30 May 2017 section 114 Regulatory Systems (Commercial Matters) Amendment Act 2017 Section 352(3) amended 1 March 2017 section 261 District Court Act 2016
353: Supervisor must give notice of
debt repayment The supervisor must send a notice of the debt repayment
a: known to the supervisor; or
b: whose name is shown on the debtor's application for the order; or
c: who has proved a debt under section 356 1967 No 54 s 147(a) Section 353 heading amended 13 January 2020 section 81(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 353 amended 13 January 2020 section 81(2) Regulatory Systems (Economic Development) Amendment Act 2019
354: Public register of debtors subject to current
debt repayment
1: The Assignee must maintain a public register of persons who are subject to a current debt repayment
2: The register must be maintained in accordance with subpart 5 Section 354 heading amended 13 January 2020 section 82(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 354(1) amended 13 January 2020 section 82(2) Regulatory Systems (Economic Development) Amendment Act 2019
355: Meaning of current
debt repayment A debt repayment cancelled Section 355 heading amended 13 January 2020 section 83(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 355 amended 13 January 2020 section 83(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 355 amended 30 May 2017 section 115 Regulatory Systems (Commercial Matters) Amendment Act 2017
356: Creditor's claim
1: A creditor who has proved his or her debt to the satisfaction of the supervisor is entitled to be included as a creditor in the administration of the debtor's estate under the debt repayment
2: A creditor may object to the supervisor's acceptance or rejection of any creditor's claim by applying to the Assignee.
3: If a creditor objects under subsection (2), the Assignee may give any directions the Assignee thinks appropriate as to the acceptance or rejection of the claim.
4: A person who becomes a creditor of the debtor after the order has been made, and who proves a debt before the supervisor,—
a: may elect to be included in the administration of the debtor's estate; and
b: in that case, may be paid a dividend under the order only after creditors who became creditors of the debtor before the order was made and who have been included as a creditor in the administration have been paid under the order. 1967 No 54 s 147(b)–(d) Section 356(1) amended 13 January 2020 section 84 Regulatory Systems (Economic Development) Amendment Act 2019
357: Payment of debtor's earnings to supervisor
1: This section applies if the supervisor, under a power given by a debt repayment
2: The amounts that the employer must pay to the supervisor are recoverable as a debt from the employer, and the supervisor's receipt is a complete discharge to the employer for the debt.
3: Payment by the employer in contravention of the supervisor's direction to pay the supervisor discharges the liability of the employer to the supervisor for the amount of the payment only if it is made—
a: with the consent of the supervisor or the Assignee; or
b: to a person who is not the debtor and who has a better legal claim to it than the debtor. 1967 No 54 s 146(10) Section 357(1) amended 13 January 2020 section 85 Regulatory Systems (Economic Development) Amendment Act 2019
358: Distribution of money paid by debtor
1: The supervisor must distribute the money paid by the debtor under the debt repayment order in the following order:
a: first, payment of the costs of administration (including the supervisor’s remuneration) in accordance with the prescribed scale:
b: secondly, the Assignee’s costs and fees:
c: thirdly, payment of the debts in accordance with the order:
d: fourthly, payment of any surplus to the debtor.
2: For the treatment of money that is not able to be distributed, see sections 282 to 289 Section 358 replaced 13 January 2020 section 86 Regulatory Systems (Economic Development) Amendment Act 2019
358A: Discharge of debtor after distribution made
The debtor is discharged from the unsecured debts to which the debt repayment order relates if the supervisor pays in full, from the money received under the order, the amounts in section 358(1)﻿(a) to (d) Section 358A inserted 13 January 2020 section 86 Regulatory Systems (Economic Development) Amendment Act 2019
358B: Effect of discharge
1: On discharge under section 358A
2: However, subsection (1) does not apply to—
a: any debt or liability incurred by fraud or fraudulent breach of trust to which the debtor was a party:
b: any debt or liability for which the debtor has obtained forbearance through fraud to which the debtor was a party.
3: The debts and liabilities referred to in subsection (2) become again enforceable on discharge under section 358A Section 358B inserted 13 January 2020 section 86 Regulatory Systems (Economic Development) Amendment Act 2019
358C: Discharge does not release partners and others
A discharge under section 358A
a: a business partner of the discharged debtor; or
b: a co-trustee with the discharged debtor; or
c: jointly bound or had made any contract with the discharged debtor; or
d: a guarantor or in the nature of a guarantor of the discharged debtor. Section 358C inserted 13 January 2020 section 86 Regulatory Systems (Economic Development) Amendment Act 2019
359: Default by debtor
1: A debtor who defaults in paying any sum due under a debt repayment
a: been able to pay the sum from the date of the order; and
b: refused or neglected to pay it.
2: If the debtor defaults in making payment in accordance with the order, unless the District Court
a: a proceeding that has been halted under section 352
b: any period during which a proceeding was halted under section 352
3: The supervisor must notify the Assignee as soon as practicable of a default by the debtor in making payment in accordance with the order. 1967 No 54 s 150 Section 359(1) amended 13 January 2020 section 87 Regulatory Systems (Economic Development) Amendment Act 2019 Section 359(2) amended 1 March 2017 section 261 District Court Act 2016
360: Offence of obtaining credit
1: A person ( A
a: A is a debtor in respect of whom a debt repayment
b: before all creditors have been paid all amounts to which they are entitled under the order, A,—
i: alone or jointly with another person, obtains for the time being credit of $1,000 or more; or
ii: incurs liability for the time being to any person of $1,000 or more for the purpose of obtaining credit for another person; or
iii: enters into a hire purchase agreement under which A is liable to pay $1,000 or more.
2: It is a defence if A proves,—
a: in a case to which subsection (1)﻿(b)﻿(i) applies, that before obtaining the credit of $1,000 A informed the person giving the credit that A was affected by a debt repayment
b: in a case to which subsection (1)﻿(b)﻿(ii) applies, that before A incurred the liability of $1,000 the person giving the credit was informed that A was affected by a debt repayment
3: A person who commits an offence under this section is liable on
4: 1967 No 54 s 151 Section 360(1)﻿(a) amended 13 January 2020 section 88 Regulatory Systems (Economic Development) Amendment Act 2019 Section 360(2)﻿(a) amended 13 January 2020 section 88 Regulatory Systems (Economic Development) Amendment Act 2019 Section 360(2)﻿(b) amended 13 January 2020 section 88 Regulatory Systems (Economic Development) Amendment Act 2019 Section 360(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 360(4) repealed 1 July 2013 section 413 Criminal Procedure Act 2011
4: No asset procedure
361: Introduction to this subpart
This subpart sets out a procedure for dealing with a debtor who has no realisable assets. Entry to no asset procedure
362: Application for entry to no asset procedure
1: A debtor who meets the criteria set out in section 363
2: A debtor applies for entry to the no asset procedure by completing and filing with the Assignee the following documents:
a: an application in the prescribed form; and
b: a statement in the prescribed form of the debtor's affairs.
3: The Assignee may reject the debtor's application if the application or statement of the debtor's affairs is, in the Assignee's opinion, incorrect or incomplete.
363: Criteria for entry to no asset procedure
1: The Assignee may admit a debtor to the no asset procedure if the Assignee is satisfied on reasonable grounds that—
a: the debtor has no realisable assets; and
b: the debtor has not previously been admitted to the no asset procedure; and
c: the debtor has not previously been adjudicated bankrupt; and
d: the debtor has total debts (apart from any excluded debt) that are not less than $1,000 and not more than $50,000; and
e: under a prescribed means test, the debtor does not have the means of repaying any amount towards those debts ; and
f: the outcome for any creditor would not be materially better if the debtor were adjudicated bankrupt.
2: In this section, realisable assets
a: excludes the assets that a bankrupt is allowed to retain under section 158
b: includes any assets (for example, gifted assets) that might be recoverable by the Assignee if the debtor were adjudicated bankrupt on the date of application for entry to the no asset procedure and if the irregular transaction provisions in subpart 7
3: The amounts in subsection (1)﻿(d) may be varied by the Governor-General by Order in Council to take account of increases in the all groups index number of the Consumers
4: An order under this section is secondary legislation ( see Part 3 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 363(1)﻿(d) replaced 13 January 2020 section 89(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 363(1)﻿(e) amended 13 January 2020 section 89(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 363(1)﻿(f) inserted 13 January 2020 section 89(3) Regulatory Systems (Economic Development) Amendment Act 2019 Section 363(2) replaced 13 January 2020 section 89(4) Regulatory Systems (Economic Development) Amendment Act 2019 Section 363(3) amended 1 September 2022 section 107(1) Data and Statistics Act 2022 Section 363(4) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
364: Debtor disqualified from entry to no asset procedure in certain cases
The Assignee must not admit a debtor to the no asset procedure if the Assignee is satisfied, on reasonable grounds, that—
a: the debtor has concealed assets with the intention of defrauding his or her creditors, for example, by transferring property to a trust; or
b: the debtor has engaged in conduct that would, if he or she
c: the debtor has incurred a debt or debts knowing that the debtor does not have the means to repay them; or
d: a creditor intends applying for the debtor's adjudication as a bankrupt and it is likely that the outcome for the creditor if the debtor is adjudicated bankrupt will be materially better than if the debtor is admitted to the no asset procedure. Section 364(b) amended 5 December 2013 section 4 Insolvency Amendment Act 2013
365: Assignee must notify creditors
Section 365 repealed 30 May 2017 section 116 Regulatory Systems (Commercial Matters) Amendment Act 2017
366: Restrictions on debtor obtaining credit after application made
A debtor who has applied for entry to the no asset procedure must not obtain credit (including hire purchase credit), either alone or jointly with another person, of more than $100 without first informing the credit provider that the debtor has applied for entry to the no asset procedure.
367: When debtor admitted to no asset procedure
1: A debtor is admitted to the no asset procedure when the Assignee sends the debtor a written notice in the prescribed form.
2: The Assignee must, as soon as practicable,—
a: notify each known creditor of the debtor that the debtor has been admitted to the no asset procedure and send each of them a summary of the debtor’s assets and liabilities; and
b: advertise in the prescribed manner that the debtor has been admitted to the no asset procedure. Section 367(2) replaced 30 May 2017 section 117 Regulatory Systems (Commercial Matters) Amendment Act 2017
368: Public register of persons admitted to no asset procedure
1: The Assignee must maintain a public register of persons admitted to the no asset procedure and persons discharged from that procedure under section 377
2: The register must be maintained in accordance with subpart 5 Section 368(1) amended 17 November 2009 section 13(6) Insolvency Amendment Act 2009 Effect of entry to no asset procedure
369: Creditors may not enforce debts
1: A creditor ( C D
a: that D owes C at the time when D applies for entry to the no asset procedure; and
b: that would be provable in D's bankruptcy if D were adjudicated bankrupt.
2: However, subsection (1) does not apply to the following debts, which remain enforceable:
a: any amount payable under a maintenance order under the Family Proceedings Act 1980
b: any amount payable under the Child Support Act 1991
c: a student loan balance.
370: Debtor's duties after entry to no asset procedure
1: The Assignee may require the debtor, and the debtor must comply with any reasonable request, to provide assistance, documents, and information necessary for applying the no asset procedure to the debtor.
2: The debtor must notify the Assignee as soon as practicable of any change in the debtor's circumstances that would allow the debtor to repay an amount towards the debts referred to in section 369(1)
3: The debtor must not obtain credit (including hire purchase credit), either alone or jointly with another person, of more than $1,000 without first informing the credit provider that the debtor is subject to the no asset procedure.
371: Offence of obtaining credit
1: A person ( A
a: alone or jointly with another person, obtains for the time being credit of $1,000 or more; or
b: incurs liability for the time being to any person of $1,000 or more for the purpose of obtaining credit for another person; or
c: enters into a hire purchase agreement under which A is liable to pay $1,000 or more.
2: It is a defence if A proves,—
a: in a case to which subsection (1)﻿(a) applies, that before obtaining the credit of $1,000 A informed the person giving the credit that A was admitted to the no asset procedure:
b: in a case to which subsection (1)﻿(b) applies, that before A incurred the liability of $1,000 the person giving the credit was informed that A was admitted to the no asset procedure.
3: A person who commits an offence under this section is liable on
4: 1967 No 54 s 151 Section 371(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 371(4) repealed 1 July 2013 section 413 Criminal Procedure Act 2011 Termination and discharge
372: Termination
A debtor's participation in the no asset procedure terminates when—
a: the Assignee terminates the debtor's participation under section 373
b: the debtor is discharged under section 377
c: the debtor applies for his or her own adjudication; or
d: a creditor who is entitled to do so (for example, because the creditor's debt is enforceable as a debt specified in section 369(2)
373: When Assignee may terminate
1: The Assignee may terminate a debtor's participation in the no asset procedure if—
a: the debtor was wrongly admitted to the no asset procedure, for example, because the debtor concealed assets or misled the Assignee; or
b: the Assignee is satisfied that the debtor's financial circumstances have changed, enabling the debtor to repay an amount towards his or her debts.
2: The Assignee terminates a debtor's participation in the no asset procedure by sending the debtor a written notice in the prescribed form to the debtor's last known address, and the termination is effective when the notice is sent, whether or not the debtor receives it.
3: The Assignee must as soon as practicable send a written notice of the termination to each creditor of the debtor known to the Assignee.
374: Assignee may apply for preservation order
1: This section applies if—
a: the Assignee intends to terminate, or has terminated, a debtor’s participation in the no asset procedure on the ground that the debtor concealed assets or misled the Assignee; or
b: the Assignee or a creditor intends, under section 377C
2: The court may, on the application of the Assignee, make an order for the preservation of the debtor’s assets pending an application for the debtor’s adjudication.
3: The order—
a: may be on the terms and conditions that the court thinks fit; and
b: is effective, unless the court states otherwise, from the time that the order is made. Section 374 replaced 13 January 2020 section 90 Regulatory Systems (Economic Development) Amendment Act 2019
375: Effect of termination
Except in the case of termination by discharge under section 377 , and the debtor is liable to pay any penalties and interest that may have accrued Section 375 amended 17 November 2009 section 8 Insolvency Amendment Act 2009
376: Creditor may apply to Assignee for termination
1: A creditor who objects on a ground set out in subsection (2) to the admission of the debtor to the no asset procedure may apply to the Assignee for termination.
2: The grounds for objection are—
a: the debtor did not meet the criteria for entry to the no asset procedure; or
b: there are reasonable grounds for the Assignee to conclude that the debtor was disqualified under section 364
377: Time of discharge
1: The debtor is automatically discharged from the no asset procedure 12 months after the date when the debtor was admitted to it.
2: However, a debtor is not automatically discharged if the Assignee—
a: is satisfied that the 12-month period should be extended for the purpose of properly considering whether the debtor's participation in the no asset procedure should be terminated; and
b: sends a written deferral notice to the debtor's last known address before the expiry of the 12-month period.
3: The deferral notice must state an alternative date for automatic discharge, which must be no later than 25 working days after the expiry of the 12-month period.
4: The deferral notice is effective whether or not the debtor receives it.
5: The Assignee must, as soon as practicable, send a written notice of the deferral to each creditor of the debtor known to the Assignee.
6: The debtor is automatically discharged from the no asset procedure on the date stated in the deferral notice.
7: The Assignee may revoke a deferral notice in the same way in which it was sent, in which case, the debtor is automatically discharged from the no asset procedure on—
a: the expiry of the 12-month period in subsection (1), if the notice is revoked before that date; or
b: in other cases, the date of revocation. Section 377 heading substituted 17 November 2009 section 9(1) Insolvency Amendment Act 2009 Section 377(2) substituted 17 November 2009 section 9(2) Insolvency Amendment Act 2009 Section 377(3) added 17 November 2009 section 9(2) Insolvency Amendment Act 2009 Section 377(4) added 17 November 2009 section 9(2) Insolvency Amendment Act 2009 Section 377(5) added 17 November 2009 section 9(2) Insolvency Amendment Act 2009 Section 377(6) added 17 November 2009 section 9(2) Insolvency Amendment Act 2009 Section 377(7) added 17 November 2009 section 9(2) Insolvency Amendment Act 2009
377A: Effect of discharge
1: On discharge under section 377
2: However, subsection (1)
a: any debt or liability incurred by fraud or fraudulent breach of trust to which the debtor was a party:
b: any debt or liability for which the debtor has obtained forbearance through fraud to which the debtor was a party.
3: The debts and liabilities referred to in subsection (2) section 377 Section 377A inserted 17 November 2009 section 10(2) Insolvency Amendment Act 2009
377B: Discharge does not release partners and others
A discharge under section 377
a: a business partner of the discharged debtor; or
b: a co-trustee with the discharged debtor; or
c: jointly bound or had made any contract with the discharged debtor; or
d: a guarantor or in the nature of a guarantor of the discharged debtor. Section 377B inserted 17 November 2009 section 11 Insolvency Amendment Act 2009
377C: Court may reverse cancellation of debtor’s debts
1: The court may, on the application of the Assignee or a creditor, reverse the cancellation under section 377A
2: The cancellation of debts may be reversed at any time before 2 years after the date of the cancellation. Section 377C inserted 13 January 2020 section 91 Regulatory Systems (Economic Development) Amendment Act 2019
377D: Grounds for reversing cancellation of debts
1: The court may reverse a cancellation under section 377A
a: the debtor has been given notice of the application for cancellation (including the grounds relied on by the applicant); and
b: the court is satisfied that facts have been established that—
i: were not known to the Assignee before the debtor was discharged from the no asset procedure; and
ii: had the Assignee known of them, would have justified the Assignee in terminating the debtor’s participation in the no asset procedure under section 373(1)﻿(a)
2: The court must not reverse the cancellation of debts if the applicant is a creditor and the facts relied on by the applicant were known to the applicant at the time the debtor was discharged. Section 377D inserted 13 January 2020 section 91 Regulatory Systems (Economic Development) Amendment Act 2019
377E: Effect of reversal of cancellation of debts
1: If the court reverses a cancellation under section 377A
2: However, the reversal does not prejudice or affect the validity of any contract, sale, disposition, or payment made or anything done by the debtor before the cancellation was reversed. Section 377E inserted 13 January 2020 section 91 Regulatory Systems (Economic Development) Amendment Act 2019
6: Insolvent deceased estates
378: Interpretation
1: In this Part, unless the context otherwise requires,— administration Administration Act 1969 administrator Administration Act 1969 appointee section 387(2) beneficiary estate section 393
2: This subpart does not affect—
a: any property of a deceased person that does not form part of his or her estate as defined in subsection (1); or
b: the administration of that property.
3: The administrator of the property of a deceased person ( D
a: D's executor or administrator for the purposes of section 6
b: D’s executor or administrator for the purposes of section 92(2)﻿(c)﻿(iii) 1967 No 54 s 153 Section 378(3)﻿(b) replaced 30 January 2021 section 161 Trusts Act 2019 Application and order that estate be administered under this Part
379: Court may order that estate be administered under this Part
1: The court may order that the estate of a deceased debtor be administered under this Part on the application,—
a: under section 380
b: under section 381
i: a creditor who has produced evidence establishing a debt due to the creditor; or
ii: a beneficiary.
2: The court may refuse to make the order if it is satisfied that—
a: there is a reasonable probability that the estate will be enough for payment of the deceased's debts; and
b: the creditors will not be prejudiced by the estate being administered in the normal way.
380: Application by administrator, etc
1: The administrator, or a person who is applying to the court for a grant of administration, may apply to the court for an order that the estate be administered under this Part if the administrator or person applying ascertains that the money in the estate, together with the proceeds of any assets in the estate that can conveniently be converted into money, will not be, or is not likely to be, enough to meet the several claims on the estate.
2: The application may be—
a: joined with an application for a grant of administration in respect of the deceased's will or of the deceased's property that does not form part of his or her estate; or
b: made at any time after that grant of administration.
3: An applicant under this section, in addition to the application, must file in the court an account that shows the assets, debts, and liabilities of the deceased, to the extent that the applicant knows what they are.
4: The account—
a: must be verified by affidavit; and
b: may be amended from time to time; and
c: must be filed—
i: when the application is filed; or
ii: within the prescribed time after the application is filed; or
iii: within the additional time that the court allows. 1967 No 54 s 154
381: Application by creditor or beneficiary for order under this Part
1: The following persons may also apply to the court for an order under this Part:
a: a creditor of the deceased's estate, if the creditor's debt has reached the threshold for a creditor's application for adjudication:
b: a beneficiary.
2: A creditor or beneficiary may apply for an order if—
a: the administrator has not applied under this Part, and after being requested in writing to apply, fails to apply within 15 working days after receiving the request; or
b: after 4 months from the date of the debtor's death, no administrator has been appointed and no application has been filed in the court under section 380
3: In the case of an application under subsection (2)﻿(a) for an order that the estate be administered under this Part, the court must not make the order before 2 months have expired after the date when the administration was granted, but this restriction does not apply if—
a: the administrator has consented; or
b: the applicant proves that—
i: the deceased committed an act of bankruptcy within 3 months before his or her death; or
ii: the administrator has favoured or is about to favour any creditor; or
c: in the court's opinion the administrator is not properly administering the estate.
4: The court may allow an application under subsection (2)﻿(b) to be filed before 4 months after the date of the debtor's death have expired if the court is satisfied that—
a: the deceased committed an act of bankruptcy within 3 months before his or her death; or
b: the estate that should have been available for the deceased's creditors is reducing. 1967 No 54 s 155
382: Notice of application by creditor or beneficiary
If an application has been filed by a creditor or beneficiary under section 381
a: the administrator; or
b: if there is no administrator, to the person specified by the court. 1967 No 54 s 156
383: When Registrar may hear application
1: A Registrar may hear an application for administration of the estate of a deceased person under this Part if—
a: the Registrar has jurisdiction to grant administration of the estate of any deceased person; and
b: the application is joined with an application for a grant of administration in respect of the estate or will of the deceased.
2: A Registrar may hear the application even if a Judge is available to hear it. 1967 No 54 s 157(2)
384: Costs of application
The court, on hearing an application under this Part, may—
a: make the order or refuse the application with or without costs; and
b: in either case, order costs to be paid by one party to another, or out of the estate. 1967 No 54 s 157(1)
385: Court may order administration by Assignee or Public Trust
1: This section applies if an application has been filed for an order to administer an estate under this Part, and the court thinks that the estate is likely to be better administered by one of the persons mentioned in subsection (2)﻿(b) than by the person who is or may become the administrator.
2: The court may, as part of its original order on the application or by any subsequent order, order that—
a: the administrator (if there is one) must no longer administer the estate; and
b: the Assignee, Public Trust, or some other person, as the court thinks appropriate, must administer the estate. 1967 No 54 s 158
386: Certificate filed by Public Trust or
Māori
1: Public Trust or the Māori Trustee Māori Trustee
2: The filing of the certificate in the prescribed form has the effect both of an application and an order that the estate be administered under this Part.
3: The certificate must be filed in the registry of—
a: the court out of which the grant of administration issued; or
b: the court in which Public Trust or the Māori Trustee
i: Part 4 of the Public Trust Office Act 1957 or Part 6
ii: section 12A section 12B Māori Trustee
c: if no grant of administration has been issued or no election to administer has been filed, the court that Public Trust or the Māori Trustee
4: An election to administer an estate under this Part may be combined with an election to administer the estate under Part 6 section 12A section 12B
5: Powers conferred on Public Trust or the Māori Trustee 1967 No 54 s 160 Section 386 heading amended 1 July 2009 section 30(1) Māori Trustee Amendment Act 2009 Section 386(1) amended 1 July 2009 section 30(1) Māori Trustee Amendment Act 2009 Section 386(3)﻿(b) amended 1 July 2009 section 30(1) Māori Trustee Amendment Act 2009 Section 386(3)﻿(b)﻿(ii) amended 1 July 2009 section 30(1) Māori Trustee Amendment Act 2009 Section 386(3)﻿(c) amended 1 July 2009 section 30(1) Māori Trustee Amendment Act 2009 Section 386(5) amended 1 July 2009 section 30(1) Māori Trustee Amendment Act 2009 Effect of order that estate be administered under this Part
387: Estate vests in appointee
1: The whole of the estate at the date when the application for the order under this Part was filed vests in the person appointed by the court to administer it (the appointee
2: The court, in its order that the estate be administered under this Part or in a subsequent order, may appoint as appointee—
a: the administrator; or
b: the Assignee; or
c: Public Trust; or
d: any other person. 1967 No 54 s 159(1)
388: Appointee must realise, administer, and distribute estate
The appointee must, as soon as practicable after the estate vests in the appointee, realise, administer, and distribute the assets in accordance with the law and practice of bankruptcy, subject to any modifications in this Part. 1967 No 54 s 159(1)
389: Entitlement of surviving spouse to household furniture and effects
1: This section applies if the estate that vests in the appointee includes any of the deceased's necessary household furniture and effects that would have passed to the deceased's surviving spouse ( S
2: S may select and retain as his or her own property so much of the furniture and effects referred to in subsection (1) that the appointee determines.
3: S must make the selection within the time that the appointee allows.
4: S's selection does not affect any rights under a valid charge or hire purchase agreement in respect of the goods selected.
5: The fact that the goods available for selection are subject to a charge or hire purchase agreement does not give S any rights to any other part of the deceased's property. 1967 No 54 s 159(2)
390: Appointee may make allowance to surviving spouse
1: The appointee may make an allowance out of the estate to the surviving spouse or to any of the relatives or dependants of the deceased or the surviving spouse for the support of any of them.
2: However, the appointee must first obtain the consent of the creditors, which must be expressed in the form of an ordinary resolution. 1967 No 54 s 159(4) Administration of estate under this Part
391: Sections 392 to 398 apply in respect of estate administered under this Part
Sections 392 to 398 1967 No 54 s 162(1)
392: Appointee's authority, powers, and functions
The appointee has, in relation to the estate, the same authority, powers, and functions as the Assignee has in relation to the property of a bankrupt. 1967 No 54 s 162(1)
393: Distribution of estate
1: The estate must be distributed in the following order:
a: first, payment of all proper costs, charges, debts, and expenses of the due administration of the estate, whether incurred before or after the order is made:
b: secondly, payment of the deceased's reasonable funeral expenses:
c: thirdly, payment of the following expenses of the deceased incurred during the 3 months immediately before the deceased's death:
i: medical expenses:
ii: reasonable expenses for hospital care (as defined in section 4(1)
d: fourthly, payment of other claims and interest in accordance with section 274
e: all other claims, which rank equally and abate in proportion if there is insufficient to pay them in full.
2: For the purposes of subsection (1)﻿(d), a reference in section 274 1967 No 54 s 162(1)﻿(b), (2)
394: Payment of surplus
1: In this section, surplus
a: the debts due by the deceased debtor; and
b: the costs of the administration under this Part; and
c: any other money that would be payable in a case of bankruptcy.
2: The surplus must be—
a: paid to, or retained by, the administrator of the deceased's property that does not form part of the deceased's estate under this Part, if there is one; or
b: if there is no administrator of the deceased's property that does not form part of the deceased's estate under this Part, distributed as approved by the court, having regard to the persons who are entitled to it.
3: The court may make an order approving the distribution of the surplus as part of the order that the estate be administered under this Part, or at any time after, and the order may be varied in respect of the surplus that remains in the appointee's hands at the date of each variation. 1967 No 54 s 162(1)﻿(c), (3)
395: Creditor's notice to administrator
1: If a creditor applies for an order that the deceased's estate be administered under this Part, and the order is made, notice to the deceased's administrator that the application has been filed is treated as an act of bankruptcy.
2: After receipt of the notice, the administrator does not obtain a discharge for any payment of money or disposition of property by the administrator, unless it is done pursuant to the order. 1967 No 54 s 162(1)﻿(d)
396: Appointee may act in relation to deceased's irregular transactions
1: An appointee may take a step that the Assignee could have taken under subpart 7
2: However, there are 2 additional restrictions when an appointee takes a step under subpart 7
a: the appointee must not issue a notice cancelling a gift or voluntary settlement without first obtaining the permission of the court; and the court must not give permission unless it appears that recovery of the gift or settlement is necessary to pay the debts of the estate in full (including interest); and
b: the court must not make an order under section 213 1967 No 54 s 162(1)﻿(e), (f)
397: Appointee may cancel execution
The appointee may cancel an execution against the deceased debtor's estate unless it was completed more than 3 months before the date of the order that the estate be administered under this Part. 1967 No 54 s 162(1)﻿(g)
398: Administrator's acts valid before notice
Nothing in this Act invalidates any payment made, or any act or thing done, in good faith by the administrator before the administrator had notice of an intention to apply for an order that the estate be administered under this Part. 1967 No 54 s 163
7: Offences and miscellaneous provisions
1: The Assignee
399: Appointment of Official Assignee for New Zealand and others
1: Suitable persons must be appointed under the Public Service Act 2020
a: the Official Assignee for New Zealand:
b: the Deputy Official Assignee for New Zealand:
c: Official Assignees:
d: as required, Deputy Assignees to help in the administration of estates.
2: Assignees and Deputy Assignees are officers of the court.
3: The Deputy Official Assignee must discharge his or her duties and exercise his or her powers under the control and direction of the Official Assignee for New Zealand.
4: Assignees and Deputy Assignees must discharge their duties under the control and direction of the Official Assignee for New Zealand and the Deputy Official Assignee for New Zealand.
5: Nothing in this section affects section 59 section 404(3) 1967 No 54 s 15 Section 399(1) amended 7 August 2020 section 135 Public Service Act 2020
400: Assignee may act on behalf of another Assignee
An Assignee or Deputy Assignee may act for, or in the place of, another Assignee or Deputy Assignee, and in that capacity has all the authority and powers of the Assignee or Deputy Assignee for whom, or in whose place, he or she acts. 1967 No 54 s 16
401: Assignee's use of name, seal, etc
1: An Assignee may sue and be sued in the name of The Official Assignee in Bankruptcy of the property of [ bankrupt's name inserted
2: An Assignee may—
a: administer oaths and take statutory declarations; and
b: appear in court and examine the bankrupt in any proceedings.
3: An Assignee must have a seal of office, which the Assignee must keep and use when required in the administration of the estates in the Assignee's charge.
4: An Assignee may execute all documents by signing the Assignee's own name over the official name, and need not affix a seal to any document, although he or she may do so. 1967 No 54 s 17
402: Assignee's additional rights and remedies
The Assignee, in addition to rights and remedies under this Act, has the rights and remedies provided by any other Act or rule of law.
403: Disqualification of Assignee
1: An Assignee ( A
2: Subsection (1) does not apply if A is a creditor of the estate only in the capacity of—
a: the Assignee of the property of another bankrupt; or
b: the liquidator of a company; or
c: an appointee under Part 6 1967 No 54 s 18(1)
404: Vacation of office by Assignee
1: An Assignee must vacate his or her office if he or she is adjudicated bankrupt.
2: An Assignee is eligible, subject to the provisions of the Public Service Act 2020
3: This section does not affect the question of the employment of an Assignee who is adjudicated bankrupt whilst in any other position in the public service 1967 No 54 s 18(3) Section 404(2) amended 7 August 2020 section 135 Public Service Act 2020 Section 404(3) amended 7 August 2020 section 135 Public Service Act 2020
405: Protection of Assignee
An Assignee is not liable in any action or proceeding for any thing the Assignee may have done or omitted to do by reason only that the bankrupt is discharged or the bankruptcy is annulled. 1967 No 54 s 138
406: Assignee's remuneration
1: The Assignee may charge remuneration for carrying out his or her duties and exercising his or her powers as Assignee at the amount or rates fixed or prescribed under section 407
2: Remuneration that has been charged under subsection (1) and paid to the Assignee must be paid into a Crown Bank Account. 1967 No 54 s 166
407: Rates of Assignee's remuneration
1: The Governor-General may, by Order in Council, make regulations that fix or prescribe the amount or rates of remuneration chargeable under section 406
2: The regulations may, for example, prescribe—
a: hourly or other rates:
b: different rates for work done in the bankruptcy by different classes of persons:
c: rates by reference to the net value of the assets realised by the Assignee together with other amounts as may be specified:
d: rates for the exercise of particular functions or powers:
e: rates by reference to any other criteria that may be specified.
3: Regulations under this section are secondary legislation ( see Part 3 1967 No 54 s 166A The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 407(3) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
408: Assignee
may
1: After preparing the final statement of receipts and payments in relation to the estate of a bankrupt ( see section 228
2: The Assignee must advertise his or her intention to apply for an order of release, and the time when the application will be heard.
3: The court must hear the application not earlier than 10 working days before, and not later than 20 working days after, the Assignee advertises the application under subsection (2).
4: On hearing the application, the court—
a: must take into account any objection to the Assignee's release by any creditor or other person interested in the bankruptcy; and
b: if the court refuses the order, may, on the application of any creditor or other person interested in the bankruptcy, make any order it thinks fit to remedy any breach of duty by the Assignee. 1967 No 54 s 133 Section 408 heading amended 30 May 2017 section 118(1) Regulatory Systems (Commercial Matters) Amendment Act 2017 Section 408(1) replaced 30 May 2017 section 118(2) Regulatory Systems (Commercial Matters) Amendment Act 2017
409: Effect of order
1: An order of release made under section 408
a: in the administration of the bankrupt's affairs:
b: in relation to the Assignee's conduct as Assignee of the bankrupt up to the date of the order.
2: The order must not be revoked except if it was obtained by fraud. 1967 No 54 s 133(5), (6)
410: Subsequent order of release
1: This section applies if the Assignee receives further property of the bankrupt after the date of an order of release.
2: The Assignee must, after realising or otherwise dealing with that property, apply for an order of release in respect of the Assignee's administration of it.
3: Sections 408 409 1967 No 54 s 133(7)
2: The court
411: Jurisdiction and powers of court
1: A Judge may exercise all the powers and jurisdiction given to the court under this Act.
2: A Judge may hear a proceeding under this Act, or any aspect of it, in Chambers or in open court, except that the following must be heard and dealt with in open court:
a: the public examination of a bankrupt:
b: an application for annulment of a bankruptcy or the discharge of a bankrupt. 1967 No 54 s 5(1)
412: Court may look at real nature of transaction
In considering a transaction, the court may look at its real nature, and it does not matter that the transaction appears to be, or is described by the parties to it as being, something different. 1967 No 54 s 5(2)
413: When Registrar or District Court Judge may exercise powers and jurisdiction of court
1: A Registrar or a District Court Judge has, with the exception of the powers listed in subsection (2), all the powers and jurisdiction of the court under this Act during—
a: a court vacation; or
b: the illness of a Judge; or
c: any period when there is no Judge at the place where the office of the court is situated.
2: A Registrar or a District Court Judge does not have the power under subsection (1) to—
a: make an order of discharge or annulment; or
b: commit for contempt of court; or
c: exercise any jurisdiction conferred by subpart 3
d: conduct a public examination under subpart 5
3: A Registrar or a District Court Judge may, if in doubt as to the proper order to be made on an application, refer it to a Judge at the next convenient opportunity, and a Judge may hear and decide the application.
4: A Judge may vary or discharge any decision by a Registrar or District Court Judge, and the decision of the Judge under this subsection can be reviewed, rescinded, or varied by the court under section 414
5: There is no appeal directly to the Court of Appeal from the decision of a Registrar or a District Court Judge.
6: Nothing in this section affects the specific powers of a District Court Judge under this Act, for example, in section 165 1967 No 54 s 6
414: Rehearings and appeals
1: The court may review, rescind, or vary any decision of the court or a Judge under this Act.
2: An aggrieved person may appeal to the Court of Appeal from a decision of the court or a Judge under this Act. 1967 No 54 s 8
415: Proceedings not halted pending appeal
A notice of appeal does not halt proceedings under the decision under appeal unless the court or the Court of Appeal makes an order halting the proceedings. 1967 No 54 s 9(1)
416: Suspension of adjudication pending appeal
1: If an appeal has been filed against an order of adjudication, the bankrupt or any other interested person may apply to the court or the Court of Appeal for an order suspending the adjudication until the appeal is decided.
2: The court or Court of Appeal may suspend the adjudication on the conditions that it thinks appropriate, including conditions as to anything done or decided, or that ought to have been done or decided, by any person in the period between the adjudication and the order suspending adjudication.
3: The court or the Court of Appeal may at any time make an order as it thinks appropriate as to anything done or decided, or that ought to have been done or decided, by any person in the period between the adjudication and the date when the appeal is decided if—
a: the adjudication has been suspended and the appeal fails; or
b: the adjudication has not been suspended and the appeal succeeds. 1967 No 54 s 9(2)–(4)
417: Court may extend time
1: The court may extend any time limit imposed by this Act, or by rules or regulations made under this Act, for doing any act or thing.
2: The court may extend the time limit—
a: before or after the time limit has expired:
b: on the conditions it thinks appropriate. 1967 No 54 s 10
418: Defects in proceedings
1: A proceeding under this Act must not be invalidated or set aside for a defect (which includes misdescription, misnomer, or omission) in a step that must be taken as part of, or in connection with, the proceeding, unless a person is prejudiced by the defect.
2: The court may order the defect to be corrected, and may order the proceeding to continue, on the conditions that the court thinks appropriate in the interests of everyone who has an interest in the proceeding. 1967 No 54 s 11
3: Offences by bankrupt
419: Offences in relation to debts
1: A bankrupt ( B
2: A bankrupt ( B
3: For the purposes of subsection (1), B is rebuttably presumed to have committed the offence if B, when contracting the debt, had no reasonable ground for expecting that B would be able to pay the debt when it fell due for payment as well as pay all B's other debts (including future and contingent debts). 1967 No 54 s 126(1)﻿(a), (c)
420: Offences in relation to property
1: A bankrupt ( B
a: conceals or removes any part of B's property—
i: within 2 months immediately before any unsatisfied judgment or order for payment of money is obtained against B; or
ii: at any time after an unsatisfied judgment or order for payment of money is obtained against B; or
b: with intent to defraud B's creditors or any of them, makes, or causes to be made, any gift, delivery, or transfer of, or charge over, B's property.
2: A bankrupt ( B
a: conceals any part of B's property to the value of $500 or more; or
b: conceals any debt due to B or due from B; or
c: fraudulently removes any part of B's property to the value of $500 or more. 1967 No 54 s 126(1)﻿(b), (g)
421: Offence in relation to written statement to creditor, etc
A bankrupt ( B
a: B makes or produces any written statement to a person who—
i: is at the time B's creditor; or
ii: becomes B's creditor as a result of the statement being made or produced to that person; and
b: the statement is not a true and fair statement of B's affairs. 1967 No 54 s 126(1)﻿(e)
422: Offence in relation to documents, etc
A bankrupt ( B
a: conceals, destroys, mutilates, or falsifies, or is a party to the concealment, destruction, mutilation, or falsification of, any document affecting, or relating to, B's property, conduct, or dealings; or
b: makes, or is a party to the making of, any false entry in any document affecting, or relating to, B's property, conduct, or dealings; or
c: fraudulently parts with, alters, or makes any omission in, or is a party to fraudulently parting with, altering, or making any omission in, any document affecting, or relating to, B's property, conduct, or dealings; or
d: prevents the production of any document affecting, or relating to, B's property, conduct, or dealings to any person to whom B has an obligation under this Act to produce it. 1967 No 54 s 126(1)﻿(f)﻿(i)–(iv)
423: Offence in relation to fictitious losses or expenses
A bankrupt ( B 1967 No 54 s 126(1)﻿(h)
424: Offences in relation to credit, etc
1: A bankrupt ( B
a: B obtains property on credit and has not paid for the property; and
b: B obtains the property on credit—
i: by a false representation or other fraud; or
ii: by a false statement of financial position or other false statement of B's affairs; or
iii: under the false pretence of carrying on business and dealing in the ordinary course of trade.
2: A bankrupt ( B 1967 No 54 s 126(1)﻿(i)
425: Offences in relation to obtaining consent of creditors
A bankrupt ( B 1967 No 54 s 126(1)﻿(j)
426: Offence in relation to leaving New Zealand
A bankrupt ( B
a: leaves New Zealand (either temporarily or permanently) and takes with him or her any part of any property to the value of $1,000 or more that ought, by law, to be divided among B's creditors; or
b: attempts to leave New Zealand (either temporarily or permanently), taking with him or her any part of that property; or
c: prepares to leave New Zealand (either temporarily or permanently), taking with him or her any part of that property. 1967 No 54 s 126(1)﻿(k)
427: Defence of absence of intent
1: A bankrupt ( B section 420(1)﻿(a)
2: A bankrupt ( B
a: section 420(2)﻿(a) or (b)
b: section 424(1)
c: section 424(2)
d: section 426
3: A bankrupt ( B section 421
4: A bankrupt ( B section 422(a), (b), or (d)
428: Penalties for
offences under sections 419 to 426 by bankrupt
1: A bankrupt who commits an offence under any of sections 419 to 426
2: Despite anything to the contrary in section 25 sections 419 to 426 Section 428 heading amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 428(1) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 428(2) inserted 1 July 2013 section 413 Criminal Procedure Act 2011 Offences in relation to record of transactions
429: Failure to keep and preserve proper record of transactions
1: A bankrupt ( B
a: B might reasonably be expected, because of B's occupation or transactions for the period, to keep a record of those transactions; and
b: B failed to keep and preserve a proper record of the transactions.
2: Despite anything to the contrary in section 25 1967 No 54 s 127(1) Section 429(2) replaced 1 July 2013 section 413 Criminal Procedure Act 2011
430: Failure to keep proper records with intent to conceal
1: A bankrupt ( B
2: Despite anything to the contrary in section 25 1967 No 54 s 127(2) Section 430(2) inserted 1 July 2013 section 413 Criminal Procedure Act 2011
431: Penalties for offences relating to records
1: A person who commits an offence under section 429
2: A person who commits an offence under section 430 Section 431(1) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 431(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
432: When bankrupt deemed not to have kept or preserved proper record
1: For the purposes of sections 429 430 B
2: In subsection (1), necessary books and accounts
a: a book or books containing entries from day to day in sufficient detail of all cash received and cash paid; and
b: if B's trade or business has involved dealing in goods,—
i: a record of all goods sold and purchased; and
ii: detailed stock sheets of annual and other stock takings showing the quantity and the valuation made of each item of stock on hand; and
c: if B's trade or business has involved B's services, details of those services.
3: For the purposes of sections 429 430
a: the records listed in subsection (2), if applicable:
b: a record of all goods purchased in the course of B's business, with the original invoices:
c: a daily record of all goods sold on credit. 1967 No 54 s 127(3), (4) Offences in relation to Assignee Heading replaced 1 July 2013 section 413 Criminal Procedure Act 2011
433: Offences in relation to Assignee
1: A bankrupt ( B
a: fails without reasonable excuse to do any of the things required of B by section 67 87 subpart 2 subpart 5 section 299 307
b: refuses or neglects to answer fully and truthfully all proper questions put to B at any examination held under this Act; or
c: wilfully misleads the Assignee in any statement made to him or her in the course of the administration of B's affairs, whether orally or in writing or in any answer to any question put to B; or
d: after becoming aware that any person has filed a false proof in the bankruptcy, failed to disclose that fact immediately to the Assignee; or
e: has within 2 years before B's adjudication, at a time when B was unable to pay B's debts as they became due, given, with intent to defraud B's creditors, any undue preference to any of B's creditors; or
f: while a bankrupt and without having first obtained the consent of the Assignee,—
i: leaves, or attempts to leave, New Zealand, temporarily or permanently; or
ii: makes preparations for leaving New Zealand, temporarily or permanently
g:
2: 1967 No 54 s 128(1), (2) Section 433 heading replaced 1 July 2013 section 413 Criminal Procedure Act 2011 Section 433(1)﻿(f)﻿(ii) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 433(1)﻿(g) repealed 1 July 2013 section 413 Criminal Procedure Act 2011 Section 433(2) repealed 1 July 2013 section 413 Criminal Procedure Act 2011
433A: Offence in relation to obtaining credit
A bankrupt ( B
a: alone, or jointly with another person, obtains credit of $1,000 or more; or
b: incurs liability to any person of $1,000 or more for the purpose of obtaining credit for another person. Section 433A inserted 1 July 2013 section 413 Criminal Procedure Act 2011
434: Defences to
offence
1: A bankrupt ( B section 433A(a)
2: A bankrupt ( B section 433A(b) 1967 No 54 s 128(1)﻿(g) Section 434 heading amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 434(1) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 434(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
434A: Limitation period for offences against section 433 or 433A
Despite anything to the contrary in section 25 section 433 433A Section 434A inserted 1 July 2013 section 413 Criminal Procedure Act 2011
435: Penalty for offences under sections 433 and 433A
A person who commits an offence under section 433 433A Section 435 replaced 1 July 2013 section 413 Criminal Procedure Act 2011 Offences in relation to management of companies
436: Offence by bankrupt in relation to management of companies
1: A bankrupt commits an offence if he or she—
a: acts as a director of a company; or
b: fails without reasonable excuse to comply with section 149
2: Despite anything to the contrary in section 25 1967 No 54 s 128A Section 436(2) replaced 1 July 2013 section 413 Criminal Procedure Act 2011
437: Penalties for offence in relation to management of companies
A person who commits an offence under section 436 Section 437 replaced 1 July 2013 section 413 Criminal Procedure Act 2011 Assignee's discretion to prosecute
438: Assignee may prosecute if reasonable grounds certified by Crown Solicitor
1: If the Assignee has reason to suspect that a person ( X
2: The Assignee may file a charging document 1967 No 54 s 129 Section 438(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
439: Assignee has immunity for prosecution if certificate given by Crown Solicitor
No action may be taken against the Assignee for malicious prosecution in relation to a prosecution under this Act if the Crown Solicitor certified that there were reasonable grounds for bringing the prosecution. 1967 No 54 s 129(2)
4: Miscellaneous provisions
440: False or misleading statements or refusal to answer questions
1: A person commits an offence if he or she—
a: makes a statement to any Assignee or person concerned in the administration of this Act, knowing that the statement is false in a material particular; or
b: wilfully misleads, or attempts to mislead, any Assignee or person concerned in the administration of this Act; or
c: without reasonable excuse, fails or refuses to answer any question put to him or her by the Assignee.
2: A person who commits an offence under this section is liable on 1967 No 54 s 164 Section 440(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
441: Regulations
1: The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:
a: prescribing fees to be paid under this Act or regulations made under this Act:
b: prescribing the procedure for lodging a debtor's application for adjudication with the Assignee:
c: prescribing how and when the debts and claims of creditors must be made and proved, and when a debt or claim may be allowed or disallowed:
d: providing for the public examination of bankrupts:
e: prescribing the expenses that may be paid to a bankrupt, or any other person, who is required to attend any examination by the Assignee:
f: prescribing the steps an undischarged bankrupt must take to obtain the Assignee's consent to leaving New Zealand and the circumstances in which, and the conditions on which, the Assignee may consent:
g: prescribing the steps an undischarged bankrupt must take to obtain the Assignee's consent for the purposes of section 149
h: prescribing the accounts that must be kept by the Assignee, the audit of those accounts, and the fees payable for the audit:
i:
j: prescribing the manner of advertising under this Act:
k: providing for the appointment, retirement, removal, discharge, and control of trustees under subpart 2
l: providing for any matters contemplated by subpart 3
m: prescribing the scale of fees of the court and the Court of Appeal for proceedings under this Act:
n: prescribing the form of—
i: a statement of affairs that is filed under section 46 67 362
ii: an application that is made under section 49 342 362
iii: a notice under section 367 373
o: prescribing the steps that must be taken by the bankrupt under section 141
p: regulating the payment by the Assignee of money into the Assignee's bank account under section 220(1)
q: prescribing the time for giving a notice of opposition under section 297
r: prescribing how instalments under a debt repayment
s: providing for the conduct of creditors' meetings under subparts 1 2
t: prescribing the criteria for the means test under section 363(1)﻿(e)
u: prescribing reasons for refusal by the Assignee under section 447(2)
v: prescribing any further information or documents that must be held under a public register under section 449(1)
w: regulating the search of public registers ( see section 452
x: prescribing any further search criteria under section 453(1)
y: providing for any other matters contemplated by this Act, necessary for its administration, or necessary for giving it full effect.
2: In subsection (1)﻿(n), prescribing the form
3: Regulations under this section are secondary legislation ( see Part 3 1967 No 54 s 14 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 441(1)﻿(i) repealed 30 May 2017 section 119 Regulatory Systems (Commercial Matters) Amendment Act 2017 Section 441(1)﻿(r) amended 13 January 2020 section 92 Regulatory Systems (Economic Development) Amendment Act 2019 Section 441(3) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
442: Rules
1: Rules may be made from time to time under the Senior Courts Act 2016
a: relating to the procedure of the court under this Act:
b: relating to appeals to the Court of Appeal under this Act:
c: to give effect to this Act.
2: Matters that may be dealt with by the rules include the following:
a: how proceedings are started and transferred from one registry of the court to another:
b: where proceedings may be started:
c: the forms to be used in proceedings:
d: the service of documents filed or issued in proceedings:
e: the amendment of defects and errors in proceedings:
f: how evidence may be given:
g: how the identity of persons who are parties to, or involved in, proceedings must be proved:
h: how witnesses are summoned and documents are discovered:
i: the right of creditors and other persons to appear in proceedings, and the procedure to be followed in the absence of creditors or other persons:
j: the notices that must be given in connection with proceedings, and who must give them and to whom:
k: the manner of advertising:
l: the consolidation of proceedings:
m: the substitution of parties to proceedings:
n: authorising the continuation of proceedings after the death of the debtor in question:
o: authorising proceedings to be begun against 1 or more partners of a business partnership without including the others, and providing for the disclosure of the other partners:
p: the scale of costs of lawyers and others in proceedings:
q: the award of costs and when security for costs must be given:
r: the execution of processes and the enforcement of orders under this Act:
s: the time limit for appealing to the Court of Appeal and how the appeal must be brought:
t: matters necessary for the administration of this Act or necessary for giving it full effect. 1967 No 54 s 13 Section 442(1) amended 1 March 2017 section 183(b) Senior Courts Act 2016
443: Repeal and revocation
1: The Insolvency Act 1967 OIC 2007/332 2007-12-03 Insolvency Act 1967
2: The Insolvency Regulations 1970 Insolvency (Priorities) Order 1988 Summary Instalment Orders (District Court) Rules 1970 OIC 2007/332 2007-12-03 Insolvency Regulations 1970 Insolvency (Priorities) Order 1988 Summary Instalment Orders (District Courts) Rules 1970
444: Transitional provisions
1: In this section,— 1967 Act Insolvency Act 1967 commencement Parts 1 to 7 past event
a: issuing a bankruptcy notice:
b: filing a petition for adjudication:
c: filing an application for a summary instalment order:
d: the making of a proposal:
e: the making of a compromise:
f: filing an application for an order for the administration of an insolvent deceased estate.
2: The 1967 Act continues to apply, to the exclusion of this Act, to any past event and to any step or proceeding preceding, following, or relating to that past event, even if it is a step or proceeding that is taken after commencement.
3: For the avoidance of doubt, nothing in subpart 7
445: Consequential amendments to other enactments
The enactments specified in Schedule 2 OIC SR 2007/332 2007-12-03 Section 31 Section 11(4) Section 103 Section 71(2)﻿(a) Section 8(3) Section 208(2) Section 42(7) Section 19(7)﻿(c) Section 98(2) Section 90(3) Section 170(2) Section 6(1)﻿(c) Section 270 Section 64(4)﻿(a) Section 42(2)﻿(c)﻿(ii)﻿(B) Section 48(1)﻿(b)﻿(iii) Section 55(3)﻿(c) Section 20G(c) Section 6(2) Section CG 2(4)﻿(b) Section 16 Section 17(1)﻿(c) Section 9(2)﻿(d) Section 26I(2)﻿(e) Section 284 Section 11(1A)﻿(b) Section 55D(4) Section 85(1) Section 17A(a) Section 6B(2)﻿(b) Schedule 2 Part 1 Section 27(4) Section 104PPA(1)﻿(c) Section 58(1) Schedule 1 clause 1(a)﻿(ii) Section 183(3) Section 31(1)﻿(b) Section 122(7) Section 22(1)﻿(b) Section 51(6)﻿(c) Schedule 2 clause 3(2)﻿(a) Schedule 1 Part 2 Section 343(4) Section 48(4)﻿(a) Schedule 2 clause 2(2) Section 7(2)﻿(t) Section 27(3) Section 15 Section 63(a) Schedule 1 Regulation 3(4)﻿(c) Regulation 13(d) Regulation 21(1)﻿(c) Regulation 17(1)﻿(b)﻿(ii)
445A: Act subject to application of Cape Town Convention and Aircraft Protocol
1: Part 3 section 106 Part 12
2: In this section,— Aircraft Protocol section 104(1) Cape Town Convention section 104(1) Section 445A inserted 1 November 2010 section 14(1) Civil Aviation (Cape Town Convention and Other Matters) Amendment Act 2010
5: Public registers
446: Subpart applies to public register maintained under section 62, 354 or 368
This subpart applies to a public register maintained under section 62 354 368
447: When public register must be accessible
1: A public register must be available for access and searching by members of the public during business hours on a working day.
2: However, the Assignee may refuse access to a public register or suspend the operation of a public register, in whole or in part,—
a: if the Assignee considers that it is not practical to provide access to the register; or
b: for any other reason that is prescribed by regulations made under this Act.
448: Purposes of public registers
1: A public register maintained under section 62
a: the purpose of providing information about bankrupts and discharged bankrupts; and
b: the further purposes set out in subsection (4).
2: A public register maintained under section 354
a: the purpose of providing information about persons subject to a current debt repayment
b: the further purposes set out in subsection (4).
3: A public register maintained under section 368
a: the purpose of providing information about persons currently admitted to the no asset procedure and persons discharged from that procedure under section 377
b: the further purposes set out in subsection (4).
4: The further purposes of the public registers are to—
a: facilitate the compliance, audit, and other supporting and administrative functions of the Assignee, Ministry, the courts, or any other person under this Act or any other enactment; and
b: facilitate the enforcement functions and the exercise of the powers of the Assignee, Ministry, the courts, or any other person under this Act or any other enactment; and
c: provide statistical information and information for research purposes in relation to bankruptcy, debt repayment Section 448(2)﻿(a) amended 13 January 2020 section 93 Regulatory Systems (Economic Development) Amendment Act 2019 Section 448(3)﻿(a) amended 17 November 2009 section 12 Insolvency Amendment Act 2009 Section 448(4)﻿(c) amended 13 January 2020 section 93 Regulatory Systems (Economic Development) Amendment Act 2019
449: General information that must be held in public registers
1: The public registers must contain the following information in respect of a person ( P debt repayment section 377
a: P's full name:
ab: any other name (including any alias or trading name) used by P and known to the Assignee:
b: whether P is currently bankrupt, or has been discharged from bankruptcy, or is subject to a current debt repayment is currently admitted to the no asset procedure, or has been discharged from the no asset procedure under section 377
c: the bankruptcy, debt repayment
d: P's address as contained in P's statement of affairs, or application for adjudication, or application for a debt repayment
e: P's occupation and current employment status, if known:
f: in the case of an adjudication by the court, which court, and the time and date of the adjudication:
g: in the case of an automatic adjudication, a statement that P was automatically adjudicated bankrupt under section 47
ga: if a debt repayment order is made in respect of P, the date of the debt repayment order:
h: if P is admitted to the no asset procedure, the date of admission:
ha: if P is discharged from the no asset procedure under section 377
i: if P is a discharged bankrupt, the date, type, and conditions (if any) of discharge:
j: if the bankruptcy was annulled under section 309(1)﻿(b) or (c) section 310(2)﻿(b) or (c)
k: if the court has refused to discharge P from bankruptcy, that information:
l: if the court has suspended P's discharge from bankruptcy, that information:
m: the place of the office of the Assignee dealing with P's bankruptcy or admission to the no asset procedure and that office's contact number for enquiries:
n: in the case of a person subject to a current debt repayment electronic address
o: any other prescribed information or documents.
2: Subject to sections 447(2) 451(1)
3: A public register must not contain any information in relation to a person whose bankruptcy was annulled under section 309(1)﻿(a) 310(2)﻿(a) , and the bankruptcy that was so annulled does not count for the purposes of section 449A
4: All information relating to a person who has been adjudicated bankrupt and discharged from bankruptcy must be removed from the public register maintained under section 62
a: 4 years after the date of discharge; but
b: in the case of a conditional discharge, 4 years after the discharge becomes unconditional.
4A: All information relating to a person who has been admitted to the no asset procedure must be removed from the public register maintained under section 368
a: 4 years after the date of discharge under section 377
b: as soon as practicable after a termination under section 372(a), (c), or (d)
5: All information relating to a person who has been adjudicated bankrupt but whose bankruptcy has been annulled under section 309(1)﻿(b) or (c) section 310(2)﻿(b) or (c) section 62 Section 449(1) amended 13 January 2020 section 94(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(1) amended 17 November 2009 section 13(1) Insolvency Amendment Act 2009 Section 449(1)﻿(ab) inserted 13 January 2020 section 94(2) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(1)﻿(b) amended 13 January 2020 section 94(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(1)﻿(b) amended 17 November 2009 section 13(2) Insolvency Amendment Act 2009 Section 449(1)﻿(c) amended 13 January 2020 section 94(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(1)﻿(d) amended 13 January 2020 section 94(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(1)﻿(ga) inserted 13 January 2020 section 94(3) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(1)﻿(ha) inserted 17 November 2009 section 13(3) Insolvency Amendment Act 2009 Section 449(1)﻿(n) amended 13 January 2020 section 94(1) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(1)﻿(n) amended 13 January 2020 section 94(4) Regulatory Systems (Economic Development) Amendment Act 2019 Section 449(3) amended 17 November 2009 section 13(4) Insolvency Amendment Act 2009 Section 449(4A) inserted 17 November 2009 section 13(5) Insolvency Amendment Act 2009
449A: Information kept indefinitely on public register after multiple insolvency events
1: This section applies in the case of a person who—
a: is or has been bankrupt on 2 or more occasions; or
b: is or has been both bankrupt and discharged from the no asset procedure under section 377
2: Information about the person must not be removed from the public register under this Act and, in particular, section 449(4), (4A), and (5)
3: The Assignee must ensure that the public register contains all of the information required by this Act about the person and each insolvency event.
4: Bankruptcies under the Insolvency Act 1967 Bankruptcy Act 1908 Section 449A inserted 17 November 2009 section 14 Insolvency Amendment Act 2009
450: Restricted information that may be held in public register maintained under section 62
1: The public register maintained under section 62 section 100 B
2: A member of the public must not have access to the documents contained in the public register under subsection (1) in respect of B unless that person is entitled to inspect those documents under section 100
451: When Assignee may omit, remove, restrict access to, or amend, information contained in public registers
1: The Assignee may omit, remove, or restrict access to information contained in a public register in respect of a person ( P
2: The Assignee may amend the information contained in a public register in order to update the information or correct any error in, or omission from, the information.
3: The Assignee may refuse to provide access to any information in a public register if, in the Assignee's opinion, it is impractical to provide the volume of information requested.
452: Search of public registers
A person may only search the public registers in accordance with this Act or regulations made under this Act.
453: Search criteria
1: The public registers may be searched only by reference to the following criteria:
a: the bankruptcy number, debt repayment
b: the name, or any part of the name of a person:
c: the name of a court:
d: insolvency status:
e: the date of adjudication, debt repayment
f: any combination of the criteria in paragraphs (a) to (e):
g: any other prescribed criteria.
2: In subsection (1)﻿(d), insolvency status P
a: is currently bankrupt; or
b: is subject to a current debt repayment
c: is currently admitted to the no asset procedure; or
d: is a discharged bankrupt; or
da: is discharged from the no asset procedure under section 377
e: is a discharged bankrupt subject to conditions of discharge; or
f: was adjudicated bankrupt but the adjudication was annulled under section 309(1)﻿(b) section 310(2)﻿(b)
g: was adjudicated bankrupt but the adjudication was annulled under section 309(1)﻿(c) section 310(2)﻿(c) ; or
h: is subject to section 449A Section 453(1)﻿(a) amended 13 January 2020 section 95 Regulatory Systems (Economic Development) Amendment Act 2019 Section 453(1)﻿(e) amended 13 January 2020 section 95 Regulatory Systems (Economic Development) Amendment Act 2019 Section 453(2)﻿(b) amended 13 January 2020 section 95 Regulatory Systems (Economic Development) Amendment Act 2019 Section 453(2)﻿(da) inserted 17 November 2009 section 15(1) Insolvency Amendment Act 2009 Section 453(2)﻿(g) amended 17 November 2009 section 15(2) Insolvency Amendment Act 2009 Section 453(2)﻿(h) added 17 November 2009 section 15(2) Insolvency Amendment Act 2009
454: Search purposes
The public registers may be searched—
a: by any individual, or by any person with the consent of that individual, for the purpose of searching for information about that individual:
b: by any person for the purpose of ascertaining whether another person is bankrupt, is a discharged bankrupt, is subject to a current debt repayment is currently admitted to the no asset procedure, or is discharged from that procedure under section 377
c: by any person for any purpose related to the bankruptcy of a person, the making of a current debt repayment
d: by any person for any of the purposes set out in section 448(4)﻿(a) or (b)
e: by any person for the purpose of ascertaining whether section 449A Section 454(b) amended 13 January 2020 section 96 Regulatory Systems (Economic Development) Amendment Act 2019 Section 454(b) amended 17 November 2009 section 16(1) Insolvency Amendment Act 2009 Section 454(c) amended 13 January 2020 section 96 Regulatory Systems (Economic Development) Amendment Act 2019 Section 454(e) added 17 November 2009 section 16(2) Insolvency Amendment Act 2009
455: Information contained in public registers may be used for statistical or research purposes
Nothing in this subpart prevents the use of information contained in the public registers for statistical or research purposes if the information—
a: does not identify any person; and
b: is not published in any form that could reasonably be expected to identify any person.
456: When search breaches information privacy principle
A person who searches a public register for a purpose that is not a purpose set out in section 454 Parts 5 6 section 69(2)﻿(a)﻿(i) Section 456 replaced 1 December 2020 section 217 Privacy Act 2020
457: Crown and Assignee not liable for act or omission
The Crown and the Assignee cannot be sued for any act or omission in relation to the maintenance of a public register under this subpart done or omitted to be done in good faith and with reasonable care.