Michael.1
An independent WebsiTE

Michael Murray is an Australian author and commentator on corporate and personal insolvency law and related policy and law reform, in Australia and internationally. No legal advice is offered or given.

Cross-border proof of an Australian bankruptcy

A certificate of appointment under Bankruptcy Regulation 8.02 in relation to a voluntary bankruptcy should generally be sufficient to support a trustee’s proposed application overseas for recognition of their Australian bankruptcy under Article 15 and related articles of the UNCITRAL Model Law on Cross-Border Insolvency. 

Nevertheless, in the voluntary Australian bankruptcy of Mr Moltoni, the trustee applied to the Federal Court of Australia that he be “certified as the trustee in bankruptcy of Peter Moltoni for the purposes of art 15(2) of Schedule 1 to the … the Model Law”: Macks (Trustee), in the matter of the Bankrupt Estate of Moltoni [2020] FCA 1052.

The trustee said the application was made to facilitate the recognition of the administration of the bankruptcy in foreign courts, initially in the United Kingdom. It was made despite the trustee having had issued, on 11 October 2018, by the Official Receiver, a Certificate of Appointment under reg 8.02. In the case of non-court proceedings, this should qualify under Article 15(2)(c), which allows, in the absence of evidence from a court, “any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative”.

Given (c) was not relied upon, the Justice Jagot went through the process of noting the debtor’s petition of 11 October 2018, and the Official Receiver’s subsequent acceptance of the petition and  certified as to the

“appointment of the applicant as the trustee in bankruptcy of Peter Moltoni and the consequential existence of bankruptcy proceedings for the purposes of Article 15(2) of … the Model Law”.

In Downey v Holland [2015] NZHC 595, the NZ High Court was content to rely upon a certificate issued by the Australian Official Receiver as to the appointment of a controlling trustee under the Part X of the Bankruptcy Act in satisfaction of Art 15(2). In contrast, a ‘bankruptcy’ would be more recognisable to any foreign court than a ‘controlling trusteeship’. Courts have also readily recognised US Ch 11 debtor in possession and other such insolvencies.

Reform?

Given the range of approaches to the making of a formal bankruptcy order across jurisdictions, an order of a superior Australian court may prove to be a safe option in the case in hand. But compared with the simple issue of a certificate by the Official Receiver, it is an expensive option and some more economical but authoritative option should be available.

 

 

Share on facebook
Share on google
Share on twitter
Share on linkedin

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest

Popular

Featured

Stay Up To Date With Murrays Legal Commentary

Subscribe now