What is AFSA’s response to these matters raised by stakeholders?

  1. Practitioners have the ability to give notices to bankrupts and creditors by making the notices available online. How can practitioners satisfy Privacy Act requirements when making notices available in this way?

    Answer: This is ultimately a matter for practitioners to take advice on and decide for themselves. Practitioners may wish to contact the Privacy Commissioner to determine their obligations. If implementing the necessary ICT and security requirements for online lodgement is not feasible, practitioners may decide to maintain their current practices to correspond with bankrupts and creditors.
  2. Practitioners will be required to deposit money into an administration bank account within 5 days of receipt. If they do not, it will be a strict liability offence from 1 September 2017. How will AFSA handle these issues in practice?

    Answer: AFSA will take a pragmatic approach to this provision with a view to ensuring the level of investigation/penalty sought is commensurate with the materiality of the offence committed. These matters will be considered on a case by case basis.
  3. Electronic handling (e.g. video conferencing) is currently available for the conduct of creditors’ meetings. Does this also extend to voting at meetings?

    Answer: Voting at meetings by electronic means is acceptable, provided the creditor is in attendance or has validly appointed a proxy or attorney, and has also demonstrated their entitlement to vote by providing a statement of claim. Ultimately, the practitioner will need to be satisfied that a creditor (or proxy/attorney) who wishes to vote electronically is bona fide.
  4. From 1 September 2017, a new provision (s60-20) takes effect. It places an obligation on practitioners to seek creditors’ consent/approval prior to deriving a profit or advantage from administration of the estate.  It replaces s165(1)(c) of the current Act and extends to profits or advantages obtained by related entities of the trustee. Does s60-20 apply to administrations pre-1 September 2017?

    Answer: If an arrangement under which a profit or advantage is derived is in place before 1 September 2017, s60-20 does not apply.  However, if the basis of an arrangement under a pre-1 September 2017 administration changes post 1 September 2017, s60-20 will apply.
  5. If a creditor pays the cost for the provision of information or holding of a meeting, does this need to be approved by creditors under s60-20 before it is drawn, or can the practitioner pay it directly to the firm?

    Answer: If a creditor agrees to pay a practitioner to provide information or call a meeting, this is a separate arrangement between the relevant creditor and the practitioner and would not require approval by creditors, a committee of inspection or the Court, so long as the costs are 'pure' disbursements and have no element of profit that accrues to the practitioner or his/her staff.  If the practitioner (or a related entity) will directly or indirectly derive 'profit' or 'advantage' for the work, or if they are recovering an element of staff or practitioner costs, s60-20 would apply and creditor approval would be required.