Div 60Remuneration and other benefits received by the trustee

Division 60—Remuneration and other benefits received by the trustee 60‑1  Simplified outline of this Division Remuneration The trustee of a regulated debtor’s estate is entitled to receive remuneration for necessary work properly performed by the trustee in relation to the administration. The amount of remuneration will usually be set under a remuneration determination. Remuneration determinations are made in most cases by the creditors or the committee of inspection (if there is one). However, if there is no remuneration determination, the trustee will be entitled to receive a reasonable amount for the work. The maximum amount that the trustee may receive in this way is $5,000 (exclusive of GST and indexed). The Court may review the remuneration of the trustee of a regulated debtor’s estate and may also make orders under Division 90 about remuneration (including ordering repayment of remuneration). Other benefits The trustee of a regulated debtor’s estate must not:  (a) employ a related entity, unless certain requirements are met; or  (b) purchase any assets of the estate; or  (c) get any other benefits or profits from the administration of the estate. Subdivision B—Remuneration of trustees 60‑5  Trustee’s remuneration Remuneration in accordance with remuneration determinations  (1) The trustee of a regulated debtor’s estate is entitled to receive remuneration for necessary work properly performed by the trustee in relation to the administration of the regulated debtor’s estate, in accordance with the remuneration determinations (if any) for the trustee (see sections 60‑10 and 60‑11). Remuneration for trustees if no remuneration determination made  (2) If no remuneration determination is made in relation to necessary work properly performed by a trustee in relation to the administration of the regulated debtor’s estate, the trustee is entitled to receive reasonable remuneration for the work. However, that remuneration must not exceed the maximum default amount. Remuneration to be paid from the funds in the estate  (3) The remuneration is to be paid from the funds in the regulated debtor’s estate. 60‑10  Remuneration determinations—creditors or committee of inspection   A determination, specifying remuneration that a trustee of a regulated debtor’s estate is entitled to receive for necessary work properly performed by the trustee in relation to the administration of the estate, may be made:  (a) by resolution of the creditors; or  (b) if there is a committee of inspection and a determination is not made under paragraph (a)—by the committee of inspection. 60‑11  Remuneration determinations—Inspector‑General  (1) The Inspector‑General may, in prescribed circumstances, make a determination specifying remuneration that a trustee of a regulated debtor’s estate is entitled to receive for necessary work properly performed by the trustee in relation to the administration of the estate.  (2) The Inspector‑General must have regard to any matter prescribed in making a determination under subsection (1).  (3) Insolvency Practice Rules made for the purposes of subsection (2) may provide for and in relation to:  (a) a matter referred to in section 60‑12; or  (b) any other matter. 60‑12  Remuneration determinations—general rules Manner in which remuneration may be specified  (1) A determination under section 60‑10 or 60‑11 may specify remuneration that the trustee is entitled to receive in either or both of the following ways:  (a) by specifying an amount of remuneration;  (b) by specifying a method for working out an amount of remuneration. Remuneration on a time‑cost basis  (2) If a determination under section 60‑10 or 60‑11 specifies that the trustee is entitled to receive remuneration worked out wholly or partly on a time‑cost basis, the determination must include a cap on the amount of remuneration worked out on a time‑cost basis that the trustee is entitled to receive. Remuneration on a percentage basis  (3) If a determination under section 60‑10 or 60‑11 specifies that the trustee is entitled to receive remuneration worked out wholly or partly on the basis of a specified percentage of money received by the trustee in respect of the regulated debtor’s estate:  (a) the determination must specify the money to which the specified percentage applies; and  (b) the specified percentage must not be greater than the percentage prescribed for the purposes of this paragraph. More than one remuneration determination may be made  (4) To avoid doubt, more than one determination under section 60‑10 or 60‑11 may be made in relation to a particular trustee and a particular regulated debtor’s estate. 60‑15  Maximum default amount Maximum default amount  (1) The maximum default amount for a trustee is an amount (exclusive of GST) worked out as follows:  (a) if the trustee is appointed as the trustee of the regulated debtor’s estate during the financial year beginning on 1 July 2016—$5,000;  (b) if the trustee is appointed as the trustee of the regulated debtor’s estate during a financial year beginning on or after 1 July 2017—the greater of:  (i) the amount worked out by multiplying the indexation factor for the financial year (worked out under subsections (3) and (4)) by the maximum default amount for a trustee appointed as the trustee of a regulated debtor’s estate during the previous financial year; and  (ii) the amount (if any) prescribed for the purposes of this subparagraph. Rounding  (2) Amounts worked out under subsection (1) must be rounded to the nearest whole dollar (rounding 50 cents upwards). Indexation factor  (3) Subject to subsection (4), the indexation factor for a financial year is the number worked out by dividing the index number for the March quarter immediately preceding that financial year by the index number for the March quarter immediately preceding that first‑mentioned March quarter.  (4) If an indexation factor worked out under subsection (3) would be less than 1, the indexation factor is to be increased to 1. Changes to CPI index reference period and publication of substituted index numbers  (5) In working out the indexation factor:  (a) use only the index numbers published in terms of the most recently published index reference period for the Consumer Price Index; and  (b) disregard index numbers published in substitution for previously published index numbers (except where the substituted numbers are published to take account of changes in the index reference period). Definition—index number  (6) In this section: index number, in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter. Subdivision E—Duties of trustees relating to remuneration and benefits etc. 60‑20  Trustee must not derive profit or advantage from the administration of the estate Deriving profit or advantage from the estate  (1) A trustee of a regulated debtor’s estate must not directly or indirectly derive any profit or advantage from the administration of the estate.  (2) To avoid doubt, a trustee of a regulated debtor’s estate is taken to derive a profit or advantage from the administration of the estate if:  (a) the trustee directly or indirectly derives a profit or advantage from a transaction (including a sale or purchase) entered into for or on account of the estate; or  (b) the trustee directly or indirectly derives a profit or advantage from a creditor of the estate; or  (c) a related entity of the trustee directly or indirectly derives a profit or advantage from the administration of the estate.  (3) Subsection (1) does not apply to the extent that:  (a) another provision of this Act, or of another law, requires or permits the trustee to derive the profit or advantage; or  (b) the Court gives leave to the trustee to derive the profit or advantage. Note: Subsection (1) would not, for example, prevent the trustee from recovering remuneration for necessary work properly performed by the trustee in relation to the administration of the estate, as the trustee is permitted to do so under other provisions of this Act.  (4) Despite paragraph (2)(c), subsection (1) does not apply to the extent that:  (a) the profit or advantage arises because the trustee employs or engages a person to provide services in connection with the administration of the regulated debtor’s estate; and  (b) the person is a related entity of the trustee; and  (c) one of the following is satisfied:  (i) the trustee does not know, and could not reasonably be expected to know, that the person employed or engaged is a related entity of the trustee;  (ii) the creditors, by resolution, agree to the related entity being employed or engaged;  (iii) it is not reasonably practicable in all the circumstances to obtain the agreement, by resolution, of the creditors to the related entity being employed or engaged and the cost of employing the related entity is reasonable in all the circumstances.  (5) Subsection (1) does not apply to the extent that the profit or advantage is a payment that:  (a) is made to the trustee by or on behalf of the Commonwealth or an agency or authority of the Commonwealth; and  (b) is of a kind prescribed. Note: A defendant bears an evidential burden in relation to the matters in subsections (3), (4) and (5) (see subsection 13.3(3) of the Criminal Code). 60‑21  Inducements to be appointed as trustee  (1) A person must not give, or agree or offer to give, to another person any valuable consideration with a view to:  (a) securing the first person’s appointment or nomination as a trustee of a regulated debtor’s estate; or  (b) securing or preventing the appointment or nomination of a third person as a trustee of a regulated debtor’s estate. Strict liability offence  (2) A person commits an offence of strict liability if a person contravenes subsection (1). Penalty: 50 penalty units or imprisonment for 3 months, or both. 60‑26  Payments in respect of performance by third parties No payments for performance of trustee’s ordinary duties by another person  (1) If a trustee of a regulated debtor’s estate receives remuneration for his or her services, a payment in respect of the performance by another person of the ordinary duties that are required by this Act to be performed by the trustee is not allowed in the trustee’s accounts.  (2) Subsection (1) does not apply to a payment if the payment was authorised by resolution of:  (a) the creditors; or  (b) the committee of inspection (if any). Note: A defendant bears an evidential burden in relation to the matter in subsection (2) (see subsection 13.3(3) of the Criminal Code).