Div 90Review of the administration of a regulated debtor’s estate

Division 90—Review of the administration of a regulated debtor’s estate 90‑1  Simplified outline of this Division Review by the Court The Court may inquire into the administration of a regulated debtor’s estate either on its own initiative or on the application of the Inspector‑General or a person with a financial interest in the administration of the regulated debtor’s estate. The Court has wide powers to make orders, including orders replacing the trustee or dealing with losses resulting from a breach of duty by the trustee. Review by the Inspector‑General The Inspector‑General may review a decision of the trustee of a regulated debtor’s estate to withdraw funds from the estate for payment for the trustee’s remuneration. The Insolvency Practice Rules may set the powers and duties of the Inspector‑General in conducting such a review and may deal with issues relating to the review process. Removal of trustee by creditors The creditors of a regulated debtor’s estate may remove the trustee of the estate and appoint another. However, the trustee may apply to the Court to be reappointed. Subdivision B—Court powers to inquire and make orders 90‑2  Subdivision applies to the Official Trustee   This Subdivision applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate. 90‑5  Court may inquire on own initiative  (1) The Court may, on its own initiative during proceedings before the Court, inquire into the administration of a regulated debtor’s estate.  (2) The Court may, for the purposes of such an inquiry, require a person who is or has at any time been the trustee of the regulated debtor’s estate to: to the Court in relation to the administration of the estate. 90‑10  Court may inquire on application of creditors etc.  (1) The Court may, on the application of a person mentioned in subsection (2), inquire into the administration of a regulated debtor’s estate.  (2) Each of the following persons may make an application for an inquiry:  (a) a person with a financial interest in the administration of the regulated debtor’s estate;  (c) the Inspector‑General.  (3) The Court may, for the purposes of such an inquiry, require a person who is or has at any time been the trustee of the regulated debtor’s estate to: to the Court in relation to the administration of the estate.  (4) If an application is made by a person referred to in paragraph (2)(b), the reasonable expenses associated with the application are to be taken to be expenses of the administration of the estate unless otherwise ordered by the Court. 90‑15  Court may make orders in relation to estate administration  (1) The Court may make such orders as it thinks fit in relation to the administration of a regulated debtor’s estate. Orders on own initiative or on application  (b) on application under section 90‑20. Examples of orders that may be made  (3) Without limiting subsection (1), those orders may include any one or more of the following:  (a) an order determining any question arising in the administration of the estate;  (b) an order that a person cease to be the trustee of the estate;  (c) an order that another person be appointed as the trustee of the estate;  (d) an order in relation to the costs of an action (including court action) taken by the trustee of the estate or another person in relation to the administration of the estate;  (e) an order in relation to any loss that the estate has sustained because of a breach of duty by the trustee;  (f) an order in relation to remuneration, including an order requiring a person to repay to the estate of a regulated debtor, or the creditors of a regulated debtor, remuneration paid to the person as trustee. Matters that may be taken into account  (4) Without limiting the matters which the Court may take into account when making orders, the Court may take into account:  (a) whether the trustee has faithfully performed, or is faithfully performing, the trustee’s duties; and  (b) whether an action or failure to act by the trustee is in compliance with this Act and the Insolvency Practice Rules; and  (c) whether an action or failure to act by the trustee is in compliance with an order of the Court; and  (d) whether the regulated debtor’s estate or any person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the trustee; and  (e) the seriousness of the consequences of any action or failure to act by the trustee, including the effect of that action or failure to act on public confidence in registered trustees as a group. Costs orders  (5) Without limiting subsection (1), an order mentioned in paragraph (3)(d) in relation to the costs of an action may include an order that:  (a) the trustee or another person is personally liable for some or all of those costs; and  (b) the trustee or another person is not entitled to be reimbursed by the regulated debtor’s estate or creditors in relation to some or all of those costs. Orders to make good loss sustained because of a breach of duty  (6) Without limiting subsection (1), an order mentioned in paragraph (3)(e) in relation to a loss may include an order that:  (a) the trustee is personally liable to make good some or all of the loss; and  (b) the trustee is not entitled to be reimbursed by the regulated debtor’s estate or creditors in relation to the amount made good. Section does not limit Court’s powers  (7) This section does not limit the Court’s powers under any other provision of this Act, or under any other law. 90‑20  Application for Court order  (1) Each of the following persons may apply for an order under section 90‑15:  (a) a person with a financial interest in the administration of the regulated debtor’s estate;  (c) the Inspector‑General.  (2) If an application is made by a person referred to in paragraph (1)(b), the reasonable expenses associated with the application are to be taken to be expenses of the administration of the estate. Subdivision C—Review by Inspector‑General 90‑21  Review by Inspector‑General  (1) The Inspector‑General may carry out a review of the remuneration received by the trustee of a regulated debtor’s estate for services performed by the trustee in relation to the administration of the estate.  (2) The Inspector‑General may carry out a review under this Subdivision:  (a) on his or her own initiative; or  (b) on application by the regulated debtor or a creditor.  (3) The trustee, the regulated debtor or a creditor of the regulated debtor may apply to the Court for an order in relation to a decision of the Inspector‑General in relation to the review.  (4) In making an order under subsection (3), the Court must have regard to whether the remuneration received by the trustee is reasonable, taking into account any or all of the following matters:  (a) the extent to which the work by the trustee was necessary and properly performed;  (b) the extent to which the work likely to be performed by the trustee is likely to be necessary and properly performed;  (c) the period during which the work was, or is likely to be, performed by the trustee;  (d) the quality of the work performed, or likely to be performed, by the trustee;  (e) the complexity (or otherwise) of the work performed, or likely to be performed, by the trustee;  (f) the extent (if any) to which the trustee was, or is likely to be, required to deal with extraordinary issues;  (g) the extent (if any) to which the trustee was, or is likely to be, required to accept a higher level of risk or responsibility than is usually the case;  (h) the value and nature of any property dealt with, or likely to be dealt with, by the trustee;  (i) the number, attributes and conduct, or the likely number, attributes and conduct, of the creditors;  (j) if the remuneration is worked out wholly or partly on a time‑cost basis—the time properly taken, or likely to be properly taken, by the trustee in performing the work;  (k) any other relevant matters. 90‑22  Rules about reviews  (1) The Insolvency Practice Rules may provide for and in relation to reviews under this Subdivision.  (2) Without limiting subsection (1), the Insolvency Practice Rules may provide for and in relation to any or all of the following matters:  (a) the giving of notice to the trustee before beginning a review, or making an application for a review, under this Subdivision;  (b) the powers and duties of the Inspector‑General in carrying out a review;  (c) the decisions that may be made by the Inspector‑General in relation to the review;  (d) the repayment of remuneration by the trustee as a consequence of a review under this Subdivision. Subdivision D—Removal by creditors 90‑30  Subdivision applies to the Official Trustee   This Subdivision applies to the Official Trustee in the same way as it applies to the trustee of a regulated debtor’s estate. 90‑35  Removal by creditors Creditors may remove trustee and appoint another  (1) The creditors may:  (a) by resolution at a meeting, remove the trustee of a regulated debtor’s estate; and  (b) by resolution at the same or a subsequent meeting, appoint another person as trustee of the regulated debtor’s estate. Note: For the general rules relating to meetings, see Division 75.  (2) However, the creditors may not do so unless at least 5 business days’ notice of the meeting is given to all persons who are entitled to receive notice of creditors’ meetings. Former trustee may apply to Court to be reappointed  (3) A person (the former trustee) who has been removed as trustee of the regulated debtor’s estate by resolution of the creditors may apply to the Court to be reappointed as trustee of the regulated debtor’s estate.  (4) If the former trustee makes such an application, the former trustee must:  (a) record all costs incurred by the former trustee and the debtor’s estate in relation to the application; and  (b) do so in a way that separates those costs from the costs incurred by the former trustee and the regulated debtor’s estate in relation to other matters.  (5) The Court may order that the former trustee be reappointed as trustee of the regulated debtor’s estate if the Court is satisfied that the removal of the former trustee was an improper use of the powers of one or more creditors.  (6) The Court may make such other orders in relation to the application as it thinks fit, including orders in relation to:  (a) the costs of the application; and  (b) the remuneration of the former trustee.