General Powers: The Court’s Superpower under section 30 of the Bankruptcy Act 1966 (Cth)

Section 30 of the Bankruptcy Act 1966 (Cth) is a provision of wide import and broad application.  It permits the Court to make such orders as the Court considers necessary for the purposes of carrying out or giving of effect to the Bankruptcy Act 1966 (Cth).   Declaratory orders, injunctions and other equitable remedies are expressly identified.  It has been held that section 30 should not be construed narrowly and can extend to orders against a non-bankrupt person if that person has failed to comply with an obligation under the Bankruptcy Act 1966 (Cth) (for example, an accountant refusing to provide books of account under section 129(3) might be compelled to do so under section 30 of the Bankruptcy Act 1966 (Cth)).

While it is not itself a source of power, section 30 is to facilitate the exercise of powers which are already vested in the Court.  It provides an avenue for bankruptcy trustees to approach the Court for assistance in relation to matters concerning their appointment or the conduct of the bankruptcy.  Its wide ambit provides plenty of scope for the Court to fashion an appropriate remedy.

MPH Lawyers recently acted for a trustee in bankruptcy (Trustee) securing orders for a bankrupt to deliver up vacant possession of real property owned by the bankrupt (and which formed part of the bankrupt estate) to the Trustee.  While:

• title in the subject property vested in the Trustee at the time of bankruptcy (by force of section 58(1)(a) of the Bankruptcy Act 1966 (Cth)); and
• the Trustee became the registered proprietor of the property following an application under section 234 of the Transfer of Land Act 1893 (WA),

the bankrupt had not delivered up vacant possession of the property to the Trustee.

In applying to the Court for orders for possession, the Trustee argued that section 30 could be used to better enforce the duties imposed on the bankrupt under section 77 of the Bankruptcy Act 1966 (Cth) (and give effect to those provisions).  His Honour Justice Feutrill observed that the bankrupt had failed to discharge several duties imposed under section 77 of the Bankruptcy Act 1966 (Cth) including failing to:

(a)              file a statement of affairs within 14 days of the bankruptcy (or at all); and

(b)             deliver all books relating to the bankrupt’s financial affairs to the Trustee,

and found that the bankrupt had failed to cooperate with reasonable requests from the Trustee.

Although the bankrupt had not specifically refused to provide possession of the premises to the Trustee (and therefore the invocation of section 30 was not in aid to cure a specific default), the Court was satisfied that granting possession of the premises to the Trustee would “better facilitate sale of the property” and would likely “increase the sale price that can be achieved”.

The case serves as a useful reminder of the Court’s willingness, in appropriate circumstances, to make such orders as are necessary to further the proper discharge of the Trustee’s duties and to give effect to the provisions and objects of the Bankruptcy Act 1966 (Cth).

The Court’s reasons can be accessed here.