General and Personal Insolvency Sub-area Practice Note (GPI-1)

D S Mortimer, Chief Justice 07 February 2025

National Practice Area Sub-area Practice Note

1. Introduction

1.1 This practice note sets out arrangements for the management of matters under the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) within the National Court Framework (NCF). It:

(a) is to be read together with:

(b) takes effect from the date it is issued and, to the extent practicable, applies to proceedings whether filed before, or after, the date of issuing; and

(c) is intended to set out guiding principles for the conduct of these proceedings and is not intended to be inflexibly applied.

2.Overview

2.1 The General and Personal Insolvency (GPI) Sub-area principally involves matters related to personal insolvency and proceedings brought under the Bankruptcy Act and does not include corporate insolvency.

2.2 Parties and their lawyers should be familiar with the:

(a) Bankruptcy Act;
(b) Bankruptcy Regulations 2021 (Cth);
(c) Federal Court Bankruptcy Rules; and
(d) Insolvency Practice Schedule (Bankruptcy) (being Sch 2 to the Bankruptcy Act).

2.3 Matters in this Sub-area commonly include:

(a) proceedings to set aside bankruptcy notices issued under s 41 of the Bankruptcy Act;

(b) proceedings in relation to creditors' petitions under Part IV Division 2 of the Bankruptcy Act;

(c) examinations of persons under s 81 of the Bankruptcy Act;

(d) applications by trustees in the management of bankrupt estates such as:

(i) disclaimer of contracts under s 133(5B) of the Bankruptcy Act;
(ii) applications under Part VI Division 4A of the Bankruptcy Act in respect of property of an entity controlled by the bankrupt; and
(iii) voidable transactions under ss 120-122 of the Bankruptcy Act;

(e) applications by bankrupts contesting decisions of a trustee;

(f) applications for annulment of bankruptcy under Part VIII Division 5 of the Bankruptcy Act;

(g) applications under the Cross Border Insolvency Act 2008 (Cth) and Part 14 of the Federal Court Bankruptcy Rules;[1] and

(h) oversight of trustees under s 45-1 of the Insolvency Practice Schedule (Bankruptcy).

3. Resources available to assist parties

3.1 The Court's website has a number of helpful guidelines which cover matters such as:

(a) how personal insolvency matters are listed before registrars;
(b) presenting a Creditor's Petition;
(c) opposing a Creditor's Petition;
(d) setting aside a Bankruptcy Notice; and
(e) substituted service applications.

4. Operation of the GPI Sub-area

4.1 The management of proceedings within the GPI Sub-area will, as far as practicable, be consistent across the Court nationally. This includes the following key features:

(a) a national allocations system, with a dedicated group of registrars and judges with expertise in the GPI Sub-area to whom GPI matters will be allocated;

(b) GPI matters that are to be allocated to a judge:

(i) in most cases, will be allocated initially to a GPI management judge who will hear the first case management hearing;

(ii) at the first case management hearing, which may be expedited, the GPI management judge will ask the parties to identify the issues and will make case managements orders to facilitate the hearing of the proceeding as efficiently and expeditiously as possible; and

(iii) at an appropriate time, the matter will be allocated to a docket judge; and

(c) a specialised "direct to chambers" duty mechanism for practitioners filing urgent GPI matters, with self-represented litigants assisted by skilled registry officers.

5. Commencing Proceedings Under the Bankruptcy Act

5.1 The manner in which proceedings are commenced under the Bankruptcy Act is dealt with under r 2.01 of the Federal Court Bankruptcy Rules.

5.2 With the exception of creditors' petitions, new proceedings (not being ones made in proceedings already before the Court) are commenced by filing an application in accordance with Form B2.

5.3 Interim applications in an existing action (for example to set aside an examination summons under s 81 of the Bankruptcy Act, or to seek orders for substituted service) are made by filing a Form B3.

5.4 Applications to set aside a bankruptcy notice and / or to extend time within which to comply with a bankruptcy notice are made by filing a Form B2, supported by an affidavit in compliance with r 3.02 and / or r 3.03.

5.5 Applications for a sequestration order are made by presenting a creditor's petition using Form B6, supported by affidavits in compliance with r 4.02, and in addition, r 4.03 (for petitions founded on issue of execution against the debtor) or r 4.04 (for petitions founded on failure to comply with a bankruptcy notice).

5.6 A person who intends to oppose an application must file a notice of appearance in accordance with Form B4 and a notice stating the grounds of opposition in accordance with Form B5 and comply with r 2.06.

6. The Role of Registrars

6.1 A significant proportion of GPI matters are case managed and determined by registrars of the Court. This includes creditors' petitions and applications to set aside a bankruptcy notice.[2]

6.2 For all matters listed before a Registrar, parties should be prepared to proceed at the first return date.

6.3 In appropriate cases, the Registrar may make case management orders.

6.4 If a party to proceedings is dissatisfied with a decision of a Registrar they may apply to the Court to review that decision under s 35A(5) of the Federal Court Act.

6.5An application for review of an order made by a Registrar must be made by filing an interim application in Form B3 within 21 days after the day on which the decision was made.[3]

6.6 A review by the Court of a Registrar's decision is by way of a hearing de novo meaning the review takes the form of a fresh hearing by the Court of the application heard by the Registrar. This means, for example, that new evidence or additional grounds can be relied upon at the review hearing.[4]

6.7 It is however important to note that the party originally seeking the orders made by the Registrar continues to bear the onus at the hearing of the review before the Court.[5] For example, if a Registrar makes an order setting aside a bankruptcy notice on the application of the debtor, and the creditor who issued the notice seeks to have that decision reviewed, the debtor still bears the onus of convincing the Court that the bankruptcy notice should be set aside at the hearing of the review.

6.8 For an application to review a sequestration order made by a Registrar:

(a) the application must be served on the trustee and notice in a Form B12 given to each person known to the applicant to be a creditor of the bankrupt at least 7 days before the hearing date;[6] and

(b) the petitioning creditor bears the onus of showing an entitlement to a sequestration order under ss 43(1) and 52(1) of the Bankruptcy Act and must comply with the requirements of the Federal Court Bankruptcy Rules as at the day of the review hearing.[7]

6.9 An application for a review, especially of a sequestration order made by a Registrar, should be brought promptly. If the creditor's petition is dismissed, the Court undertaking the review has a discretion to order that the remuneration, costs and expenses of the trustee appointed by the order of the Registrar may be payable by one or both of the parties to the application.[8]

7. Urgent Applications

7.1 All urgent (duty) applications in the General and Personal Insolvency sub-area are made to the docket judge in the first instance and where there is not a docket judge, to the General Duty Judge identified on the Daily Court List.

7.2 Practitioners should liaise with General Duty Judges’ chambers directly in accordance with the procedures set out in the Duty (Urgent) Applications Interim Practice Note during 3 Region Trial (GPN-DUTY).

7.3  Litigants in person will be supported by the Duty Registrar, rather than dealing directly with the General Duty Judge’s chambers, in order to assist them through the application process efficiently. For urgent applications made during business hours, litigants in person must contact the Registry via the contact details published on the Daily Court Lists.  For urgent applications made after hours, litigants in person must contact the After Hours Duty Registrar via the contact details published on the Daily Court Lists.

8.Case Management

8.1 Parties and their representatives should familiarise themselves with the guiding case management information set out in Part 8 of the Central Practice Note. This Practice Note should be read with the Central Practice Note.

8.2 Case management will have a strong emphasis on the quick, efficient and as inexpensive as practicable disposition of each matter (see Parts 7 and 8 of the Central Practice Note).The key objectives of case management are to reduce costs and delay so that:

  • the issues in contest are reduced;
  • in relation to those issues, there is no greater factual investigation than the justice of the case requires; and
  • the number of interlocutory applications and attendances is the minimum necessary for the just and efficient disposition of the action.

8.3 The Court recognises that proceedings in this Sub-area will vary in complexity and that different approaches to case management and alternative dispute resolution may be appropriate from time to time.

9. Alternative Dispute Resolution

9.1 Parties and their representatives should familiarise themselves with the guiding ADR information set out in Part 9 of the Central Practice Note.

9.2 In contested matters allocated to a judge, the Court may refer the matter to mediation (including to a Registrar with specialist skills) at an appropriate, and preferably early, stage in the proceeding.

9.3 The Court expects the parties to be prepared to address the referral of the proceeding to mediation, and the manner of the mediation at the first case management hearing. The parties should also consider what is necessary to facilitate the mediation.

10. Enquiries and Contact Information

10.1 General queries concerning practice arrangements in the GPI Sub-area should be raised, at first instance, with your local registry. Contact details for your local registry are available on the Court's website.

D S Mortimer
Chief Justice

7 February 2025


[1] Refer to Cross-Border Insolvency Practice Note: Cooperation with Foreign Courts or Foreign Representatives (GPN-XBDR) and Part 14 of the Federal Court Bankruptcy Rules.

[2] Registrars of the court have delegated powers as prescribed under s 35A of the Federal Court Act and Rule 2.02 and Schedule 1 of the Federal Court Bankruptcy Rules.

[3]See r 2.02(3) of the Federal Court Bankruptcy Rules

[4] See Bechara v Bates [2021] FCAFC 34 at [17]

[5] See Bechara v Bates [2021] FCAFC 34 at [20].

[6] See r 7.05 of the Federal Court Bankruptcy Rules

[7] See Bechara at [27]

[8] See Robson v Body Corporate for Sanderling at Kings Beach [2021] FCAFC 43 at [30] and [239].

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