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FEDERAL COURT (CORPORATIONS) AMENDMENT RULES 2008 (NO. 1) (SLI NO 61 OF 2008)
EXPLANATORY STATEMENT
Select Legislative Instrument 2008 No. 61
Federal Court (Corporations) Amendment Rules 2008 (No. 1)
Section 59 of the Federal Court of Australia Act 1976 permits the Judges of the Court or a majority of them, to make rules of Court not inconsistent with the Act. These rules may provide for the practice and procedure to be followed in the Court and in Registries of the Court. They may extend to all matters incidental to any such practice or procedure that are necessary or convenient to be prescribed for the conduct of any business of the Court.
Under sub-section 59 (4) of the Federal Court of Australia Act 1976, the Legislative Instruments Act 2003 (other than sections 5, 6, 7, 10, 11 and 16 of that Act) applies in relation to rules of court made by the Court under the Federal Court of Australia Act 1976 or another Act:
(a) as if a reference to a legislative instrument were a reference to a rule of court; and
(b) as if a reference to a rule-maker were a reference to the Chief Justice acting on behalf of the Judges of the Court; and
(c) subject to such further modifications or adaptations as are provided for in regulations made under section 59A of the Federal Court of Australia Act 1976.
The Federal Court (Corporations) Rules 2000 apply to a proceeding in the Court under the Corporations Act 2001 or the Australian Securities and Investments Commission Act 2001 commenced on or after 1 January 2000.
The Judges have agreed to amend the Federal Court (Corporations) Rules 2000 as follows:
1. amend Division 9 to reflect the new provisions of the Corporations Act in relation to the determination and review of the remuneration of administrators, provisional liquidators, liquidators and special managers;
2. insert a new Division 11A and Form 17A which prescribe the form of a warrant under subsection 486B(1) of the Corporations Act;
3. amend the disclosure requirements in Form 8 (the prescribed form of consent of a liquidator);
4. amend Schedule 2, which sets out the powers of the Court that a registrar may be directed to exercise, to reflect the changes to the Corporations Act and Division 9 of the Corporations Rules;
5. replace each reference to ‘Commission’ in the Corporations Rules with a reference to ‘ASIC’ to reflect the terminology used in the Corporations Act;
6. update a number of references to the provisions of the Corporations Act and Corporations Regulations.
The amendments have been the subject of consultation with the Insolvency Practitioners Association of Australia and give effect to recommendations by the Council of Chief Justices’ Harmonised Corporations Rules Monitoring Committee.
Details of the Rules are in the Attachment.
The Rules commence on the day after they are registered.
This rule provides that the Rules are to be cited as the Federal Court (Corporations) Amendment Rules 2008 (No. 1).
This rule provides that these Rules commence on the day after they are registered.
This rule provides that the Federal Court (Corporations) Rules 2000 are amended as set out in Schedule 1.
[1] Rule 1.4, note
[2] Rule 1.4, note, definition of Commission
The note to rule 1.4 sets out the expressions used in the Corporations Act 2001 that are used in the Corporations Rules.
The note to rule 1.4 is amended by:
· inserting a reference to ‘ASIC’; and
· omitting the expression ‘Commission’.
These amendments reflect the terminology used in the Corporations Act.
[3] Rule 2.15
Rule 2.15 provides that, subject to the Corporations Act, these Rules and any direction of the Court to the contrary, regulations 5.6.12 to 5.6.36A of the Corporations Regulations apply to meetings ordered by the Court.
This amendment replaces the reference to regulation 5.6.12 with a reference to regulation 5.6.11.
The amendment is consequential upon amendments made to the Corporations Regulations by the Corporations Amendment Regulations 2007 (No 13).
[4] Subrule 2.8 (3), table, item 2
Subrule 2.8 (3) lists the applications under the Corporations Act of which notice must be given to ASIC. Item 2 of the list refers to applications under subsection 482 (1) of the Corporations Act.
This amendment alters item 2 by replacing the phrase “of a compulsory” with “or termination of a” to reflect the provisions of subsection 482 (1) of the Corporations Act.
[5] Subrule 9.1 (1), note
Section 425 of the Corporations Act has been amended by the Corporations Amendment (Insolvency) Act 2007.
The amendment replaces the note after subrule 9.1 (1) with a new note that refers to paragraph 425 (2) (b) of the Corporations Act and to the amendments to section 425 made by the Corporations Amendment (Insolvency) Act 2007 which apply to receivers appointed on or after 31 December 2007.
[6] Subrule 9.1 (6)
Subrule 9.1 (6) sets out the information to be included in an affidavit in support of an application by a receiver for an order under subsection 425 (1) of the Corporations Act fixing the receiver’s remuneration.
Subrule 9.1 (6) is amended by adding a requirement that the affidavit must include evidence of the matters mentioned in subsection 425 (8) of the Corporations Act. Subsection 425 (8) was inserted into the Corporations Act by the Corporations Amendment (Insolvency) Act 2007.
[7] Rule 9.2
Rule 9.2 deals with applications under subsection 449E (1) of the Corporations Act for an order fixing the remuneration of an administrator.
The amendment replaces rule 9.2 with new rules 9.2 and 9.2A which are consequential upon the amendments to the Corporations Act made by the Corporations Amendment (Insolvency) Act 2007. These amendments included replacing subsection 449E (1) with new subsections 449E (1)-(1D). The power of the Court to determine the remuneration of an administrator is set out in paragraphs 449E (1) (c) and 449E (1A) (c).
The new rule 9.2 deals with an application by the administrator of a company under administration or of a deed of company arrangement for an order under paragraph 449E (1) (c) or 449E (1A) (c) determining the remuneration of the administrator.
The new rule 9.2A deals with an application for review of the amount of the remuneration of an administrator under subsection 449E (2) of the Corporations Act.
Rule 9.3 deals with an application by a provisional liquidator of a company for an order under section 473 (2) of the Corporations Act determining the provisional liquidator’s remuneration.
Paragraph 9.3 (3) (b) is amended by replacing the reference to the ‘committee of creditors’ with ‘committee of inspection’ to reflect the provisions of subsection 473 (3) of the Corporations Act.
[9] Paragraph 9.3 (7) (a)
Subrule 9.3 (7) sets out the information that must be included in the affidavit supporting an application under subsection 473 (2).
Paragraph 9.3 (7) (a) is amended by replacing the words ‘carried out’ with ‘performed or likely to be performed’.
The amendment recognises that the supporting affidavit must include details of any future work to be performed by the provisional liquidator.
[10] Paragraph 9.3 (7) (c)
Paragraph 9.3 (7) (c) is amended by removing the words ‘for the period for which remuneration is claimed’.
[11] After subrule 9.3 (7)
This amendment inserts a new subrule 9.3 (8) which provides that the supporting affidavit must also include evidence of the matters mentioned in subsection 473 (10) of the Corporations Act to the extent that they may be relevant to a provisional liquidator, and as if the references in that subsection to ‘liquidator’ were references to ‘provisional liquidator’.
This amendment is consequential upon the changes to the Corporations Act made by the Corporations Amendment (Insolvency) Act 2007.
[12] Rule 9.4, heading
This amendment replaces the heading to rule 9.4 to make it clear that rule 9.4 deals with the determination by the Court of a liquidator’s remuneration under subparagraph 473 (3) (b) (ii) of the Corporations Act. The amendment is consequential upon the insertion of a new rule 9.4A (see item [19] below) which deals with a review of a liquidator’s remuneration.
[13] Subrule 9.4 (1)
Subrule 9.4 (1) is amended by replacing the reference to subsection 473 (3) with a reference to subparagraph 473 (3) (b) (ii). It is consequential upon the amendments to section 473 of the Corporations Act made by the Corporations Amendment (Insolvency) Act 2007.
[14] Rule 9.4 (1), at the foot
Rule 9.4 deals with applications by a liquidator of a company under subsection 473 (3) of the Corporations Act for an order determining the remuneration of a liquidator.
Section 473 of the Corporations Act has been amended by the Corporations Amendment (Insolvency) Act 2007.
The amendment replaces the note after subrule 9.4 (1) with a new note that refers to paragraph 473 (3) (b) of the Corporations Act and to the amendments to section 473 made by the Corporations Amendment (Insolvency) Act 2007 which apply to liquidators appointed on or after 31 December 2007.
[15] Paragraph 9.4 (3) (a)
Subrule 9.4 (3) sets out the persons on whom the liquidator must serve a notice, along with a copy of any affidavit, of the liquidator’s intention to apply for an order determining the liquidator’s remuneration.
Paragraph 9.4 (3) (a) is amended by replacing the phrase ‘the meeting of creditors’ with ‘any meeting of creditors at which the remuneration of the liquidator was considered’.
The amendment recognises that there will be cases where there was no meeting of creditors at which the liquidator’s remuneration was determined.
[16] Paragraph 9.4 (3) (b)
Paragraph 9.4 (3) (b) is amended by replacing the word ‘creditors’ with ‘inspection’ to reflect the provisions of subsection 473 (3) of the Corporations Act.
[17] Paragraph 9.4 (3) (c)
This amendment inserts a new paragraph 9.4 (3) (c) which provides that, where there is no committee of inspection, and no meeting of creditors has been convened and held, the notice of intention must be served on each of the 5 largest creditors (measured by amount of debt) of the company. The previous paragraph 9.4 (3) (c) becomes paragraph 9.4 (3) (d).
[18] Subrule 9.4 (7)
Subrule 9.4 (7) sets out the information to be included in an affidavit in support of an application seeking an order for determination of the remuneration of a liquidator.
This amendment substitutes a new subrule 9.4 (7). The new paragraph 9.4 (7) (a) provides that an affidavit must include evidence of the matters mentioned in subsection 473 (10) of the Corporations Act, which was inserted into the Corporations Act by the Corporations Amendment (Insolvency) Act 2007. The previous paragraphs (a) to (e) are renumbered (b) to (f), with the expression ‘for the period for which the remuneration is claimed’ that appeared in the previous paragraph (c) being omitted from the new paragraph (d).
[19] After rule 9.4
This amendment inserts a new rule 9.4A, which deals with an application for the review of remuneration of a liquidator, under subsection 473 (5) or (6) or 504 (1) of the Corporations Act, as amended by the Corporations Amendment (Insolvency) Act 2007.
This new rule provides that:
· the application for review may only be made after remuneration has been determined or fixed;
· at least 21 days before filing for a review the plaintiff or applicant must serve a notice, in accordance with Form 16A, of intention to apply for the review on each member of the committee of inspection, if there is one, on each creditor who was present at the meeting of creditors at which the remuneration was determined or fixed, if the remuneration was so dealt with, each member of the company whose shareholding represents at least 10% of that issued capital of the company;
· within 21 days of the last service of the documents mentioned above, any person on whom the notice has been served may serve on the plaintiff or applicant a notice of intention to appear at the hearing of the application for review setting out the issues that the person seeks to raise before the Court;
· the person intending to appear is entitled to be heard, but only (unless the Court orders otherwise) if the person has served on the plaintiff or applicant the notice of intention to appear referred to above;
· the plaintiff or applicant, if served with a notice, must serve a copy of the originating or interlocutory process applying for the review on each person who has served such a notice;
· the liquidator must file an affidavit addressing the matters set out in subrule 9.4A (7);
· the affidavit must annex a copy of the report that the liquidator was required to prepare before remuneration was determined or fixed;
· the plaintiff or applicant must file an affidavit stating whether any notice or notices mentioned above has or have been served and annex or exhibit to the affidavit a copy of any such notice.
[20] Paragraph 9.5 (3) (b)
Rule 9.5 deals with an application by a special manager of the property or business of a company for an order fixing the remuneration of a special manager.
Subrule 9.5 (3) provides that the special manager must serve a notice of the special manager’s intention to apply for an order under subsection 484(2) of the Corporations Act on certain persons.
Paragraph 9.5 (3) (b) is amended by replacing each reference in it to the ‘committee of creditors’ with ‘committee of inspection’ to reflect the provisions of section 473 (3) of the Corporations Act.
[21] Paragraph 9.5 (7) (a)
Subrule 9.5 (7) sets out the information that must be included in the affidavit supporting an application under subsection 484 (2).
Paragraph 9.5 (7) (a) is amended by replacing the words ‘carried out’ with ‘performed or likely to be performed’.
The amendment recognises that the supporting affidavit must include details of any future work to be performed by the special manager.
[22] Paragraph 9.5 (7) (c)
Paragraph 9.5 (7) (c) is amended by removing the words ‘for the period for which remuneration is claimed’.
[23] After rule 11.11
This amendment inserts a new division, Division 11A, which provides for warrants issued under section 486B and Part 5.4B, Division 3, Subdivision B of the Corporations Act, as amended by the Corporations Amendment (Insolvency) Act 2007.
Subrules 11A.01 (1) and (2) provide, inter alia, that the application must state the grounds for the issue of the warrant and be accompanied by an affidavit stating the facts in support of the application.
Subrule 11A.01 (3) provides that the warrant must be in accordance with Form 17A. Subrule 11A.01 (4) provides that, if a person is arrested under the warrant, the person who carried out the arrest must immediately give notice of the arrest to the Registrar from which the warrant was issued.
A note at the foot of rule 11A.01 states that sections 489A to 489E of the Corporations Act, inserted by the Corporations Amendment (Insolvency) Act 2007, apply in relation to warrants issued on or after 31 December 2007.
[24] Schedule 1, Form 8
Form 8 is the prescribed form for Consent of a liquidator or provisional liquidator.
This amendment inserts a requirement that the liquidator or provisional liquidator must state whether he or she is not aware of any relevant relationship or has, or has had within the preceding 24 months, any of the relevant relationships mentioned in subsection 60 (2) of the Corporations Act. If the liquidator or provisional liquidator has, or has had, such a relationship then details of each relevant relationship must be provided.
This amendment is consequential upon the amendments to the Corporations Act made by the Corporations Amendment (Insolvency) Act 2007.
[25] Schedule 1, Form 8
Form 8 is amended with the insertion of a note concerning the hourly rates of remuneration. The note indicates that the requirement to disclose hourly rates does not imply that remuneration on an hourly rate basis is the most desirable or appropriate arrangement in every case.
[26] Schedule 1, after Form 16
This amendment inserts a new form 16A ‘Notice of intention to apply for review of remuneration’.
This amendment is consequential upon the insertion of the new Rules 9.2A and 9.4A referred to in items [7] and [19] above.
[27] Schedule 1, after Form 17
This amendment inserts a new form 17A ‘Arrest Warrant’.
This amendment is consequential upon the insertion of Division 11A referred to in item [23] above.
[28] Schedule 2, Part 1, item 9B
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
The description of the power under section 283EC of the Corporations Act in item 9B of Part 1 is amended to state that it is the power to make an order for a meeting of all or any of the debenture holders to be held to give directions to the trustee.
[29] Schedule 2, Part 1, item 9C
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
Item 9C of Part 1 is amended to describe the power in section 274 of the Corporations Act as the power to give directions or determine any questions of applications of trustee for debenture holders.
[30] Schedule 2, Part 1, item 46
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
Item 46 of Part 1 is replaced with a new item 46 and inserts item 46A.
The new item 46 refers to the power under paragraphs 449E (1) (c) and (1A) (c) of the Corporations Act and rule 9.2 to determine the remuneration of an administrator.
The item 46A refers to the power under subsection 449E (2) of the Corporations Act and rule 9.2A to review the remuneration of an administrator.
[31] Schedule 2, Part 1, item 48
Item 48 of Part 1 is amended by replacing each reference to section 246AA with a reference to Part 2F.1. The amendment is consequential upon the changes to the Corporations Act whereby section 246AA has been replaced with Part 2F.1.
[32] Schedule 2, Part 1, item 49
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
This amendment inserts a new item 49A of Part 1 which refers to the power under section 468A of the Corporations Act in relation to authorisation of the transfer of shares.
[33] Schedule 2, Part 1, item 54
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
This amendment replaces item 54 of Part 1 with a new item 54 and inserts item 54A.
The new item 54 refers to the power under subsection 473 (3) of the Corporations Act and rule 9.4 to determine the remuneration of a liquidator.
The item 54A refers to the power under subsections 473 (5) and (6) of the Corporations Act and rule 9.4A to review the remuneration of a liquidator.
The amendments are consequential upon the amendments made by the Corporations Amendment (Insolvency) Act 2007.
[34] Schedule 2, Part 1, item 62
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
This amendment inserts a new item 62A of Part 1 which refers to the power under subsection 483 (2) to make an order directing any contributory for the time being on the list of contributories to pay to the company in the manner directed by the order any money due from the contributory or from the estate of the person whom the contributory represents.
[35] Schedule 2, Part 1, item 63
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
This amendment inserts a new item 63A of Part 1 which refers to the power under subsection 483 (4) to order any contributory, purchaser or other person from whom money is due to the company to pay the amount due into a bank named in the order to the account of the liquidator instead of to the liquidator.
[36] Schedule 2, Part 1, item 71
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
This amendment deletes item 71 of Part 1.
[37] Schedule 2, Part 1, item 75, column 3
Schedule 2, Part 1 sets out the powers of the Court under the Corporations Act that may be exercised by a registrar pursuant to a direction by the Court or a Judge under section 35A of the Federal Court of Australia Act 1976 (Cth).
The amendment inserts into column 3 of item 75 of Part 1 a reference to the new rule 9.4A inserted by item [19] above.
[38] Further amendments – ASIC
This amendment amends the Corporations Rules by replacing each reference to ‘the Commission’ with a reference to ‘ASIC’ so as to reflect the terminology used in the Corporations Act.
[39] Further amendments – ASIC
This amendment amends the Corporations Rules by replacing each reference to ‘Commission’ with a reference to ‘ASIC’ so as to reflect the terminology used in the Corporations Act.