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Wednesday, 23 March 1966


Mr SNEDDEN (Bruce) (AttorneyGeneral) .- I move-

1.   In clause 82, after sub-clause (2.), insert the following sub-clause: - " (2a.) Penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy.".

2.   In clause 109, omit sub-clauses (1.) to (4.) inclusive, insert the following sub-clauses: - "(I.) Subject to this Act and to sections 22 lp and 221 yu of the Income Tax Assessment Act 1936-1965, the trustee shall, before applying the proceeds of the property of the bankrupt in making any other payments, apply those proceeds in the following order: -

(a)   first, in payment of an amount to the petitioning creditor equal to so much of the amount lodged by the creditor under section 48 of this Act as has been used for meeting the expenses referred to in that section;

(b)   second, in the order prescribed by the rules, in payment of the taxed costs of the petitioning creditor and the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the trustee;

(c)   third, in payment of liabilities incurred in good faith before the date of the bankruptcy by a controlling trustee in exercise of the powers conferred on him by Part X. and any remuneration due to that controlling trustee;

(d)   fourth, in payment of liabilities, commit ments, expenses or remuneration referred to in section 114 of this Act;

(e)   fifth, in the case of the estate of a de ceased debtor whose estate is being administered under Part XI., in payment of proper funeral and testamentary expenses;

(f)   sixth, in payment of amounts (including amounts payable by way of allowance or reimbursement under a contract of employment or under an award or agree ment regulating conditions of employment, but not including amounts iti respect of long service leave, annual leave, recreation leave or sick leave), not exceeding in the case of any one employee the sum of Six hundred dollars, due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of services rendered to or for the bankrupt before the date of the bankruptcy;

(g)   seventh, in payment of amounts, not ex ceeding in any individual case Two thousand dollars, in respect of compensation, being compensation the liability for which accrued before the date of the bankruptcy, under any Act or State Act or Ordinance of a Territory of the Commonwealth providing for compensation for personal injury by accident arising out of, or in the course of, employment;

(h)   eighth, all amounts due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of long service leave, annual leave, recreation leave or sick leave in respect of a period before the date of the bankruptcy;

(i)   ninth, in payment of any sum payable under section 113 of this Act;

(j)   tenth, in payment of assessed income tax or income tax and social services contribution, being tax or tax and contribution assessed under any Act or State Act or Ordinance of a Territory of the Commonwealth before the date of the bankruptcy, not exceeding in the whole one year's assessment; and

(k)   eleventh, in payment of -

(i)   such preferences, priorities or advantages in favour of any creditor or group of creditors as regards any other creditor or group of creditors; and

(ii)   such costs, charges and expenses incurred in the interests of creditors before the date of the bankruptcy, as a general meeting of creditors, by special resolution, resolves. " (2.) Paragraph (g) of the last preceding subsection does not apply to the extent to which the bankrupt is indemnified under a contract of insurance against the liability referred to in that paragraph. " (3.) A special resolution shall not be deemed to have been duly passed for the purposes of paragraph (k) of sub-section (1.) of this section unless the notice convening the meeting at which it was passed contained a copy of the proposed resolution. " (4.) A payment shall not be made under paragraph (k) of sub-section (1.) of this section until twenty-eight days after -

(a)   a certificate that the notice convening the meeting was duly forwarded to the bankrupt and to each person shown as a creditor in the statement of affairs; and

(b)   a copy of the special resolution, have beenfiled in the Court.".

The purpose of the amendment to clause 82 is to make it clear that fines and penalties imposed by a court in respect of offences are not debts provable in bankruptcy. Under the existing law, it is not clear whether the Crown may prove in bankruptcy in respect of a fine or a penalty imposed by a court. It is understood that in practice the Crown does not so prove.

As to the amendment to clause 109, apart from formal amendments - and there are a number of formal amendments in this particular amendment - it would make two changes. In the first place, it would establish a separate priority, the eighth priority, for all amounts due to an employee of the bankrupt in respect of long service leave, annual leave and sick leave without limitation as to amount. As the Bill stands, amounts due in respect of leave are lumped in with amounts due in respect of wages or salary, with a limitation of $600 to any one employee, in the sixth priority. This change would bring the Bill into line withthe uniform companies legislation in respect of the priority given to payments due in respect of leave.

Secondly, the amendment would make clear that amounts due in respect of reimbursement of expenses such as accommodation incurred by an employee in the performance of his duties are included in the sixth priority. I did not ever entertain any doubts that such amounts were included, but representations were made by, as I recall, the Commercial Travellers Association and I thought it was best to make explicit what I believed was implicit in any event.







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