(1) Bankruptcy affects the legal status of a person and has important consequences. These include—

• (a) the bankrupt's property vests in the Official Assignee:

• (b) the bankrupt is limited in the business activities he or she can undertake:

• (c) the Official Assignee may be entitled to recover assets that the bankrupt has transferred before bankruptcy.

(2) This section is intended only as a guide to the consequences of bankruptcy.

(1) A debtor who is insolvent may have an alternative to bankruptcy, such as—

• (a) making a proposal to creditors (see subpart 2 of Part 5); or

• (b) paying creditors in instalments under a summary instalment order (see subpart 3 of Part 5); or

• (c) entry to the no asset procedure (see subpart 4 of Part 5).

(2) This section is intended only as a guide to the alternatives to bankruptcy.

(1) This subpart describes how a person is adjudicated bankrupt.

(2) In this subpart, the person who is adjudicated bankrupt is called the debtor.

(1) Adjudication occurs when a debtor is adjudicated bankrupt.

(2) A debtor is adjudicated bankrupt if either—

• (a) a creditor of the debtor applies to the court for an order of adjudication, and the court makes the order; or

• (b) the debtor files an application with the Assignee for adjudication.

(1) A court may adjudicate the debtor bankrupt if—

• (a) a creditor of the debtor has applied under section 13 for the debtor's adjudication; and

• (b) the debtor has committed an act of bankruptcy.

(2) The court's options in dealing with a creditor's application are set out in sections 36 to 44.

(3) What is an act of bankruptcy is set out in sections 17 to 28.

(1) A debtor may be adjudicated bankrupt by filing an application for adjudication with the Assignee.

(2) The requirements for a debtor's application are set out in sections 45 and 46.

(3) The procedure for filing a debtor's application is set out in section 49.

A creditor may apply for a debtor to be adjudicated bankrupt if—

• (a) the debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and

• (b) the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and

• (c) the debt is a certain amount; and

• (d) the debt is payable either immediately or at a date in the future that is certain.

The court must not make an order of adjudication on the application of a secured creditor unless the creditor has established that the amount of the debt exceeds the value of the charge by at least $1,000.

A creditor may only withdraw an application for adjudication with the permission of the court.

(1) A debtor must not be adjudicated bankrupt on a creditor's application unless the debtor has committed an act of bankruptcy within the period of 3 months before the creditor files the application.

(2) The acts of bankruptcy are set out in sections 17 to 28.

(1) A debtor commits an act of bankruptcy if—

• (a) a creditor has obtained a final judgment or a final order against the debtor for any amount; and

• (b) execution of the judgment or order has not been halted by a court; and

• (c) the debtor has been served with a bankruptcy notice; and

• (d) the debtor has not, within the time limit specified in subsection (4),—

  • (i) complied with the requirements of the notice; or

  • (ii) satisfied the court that he or she has a cross claim against the creditor.

(2) The form that the bankruptcy notice must take is set out in section 29.

(3) The debtor must have been served with the bankruptcy notice in New Zealand, unless the court gave permission for the service of the notice on the debtor outside New Zealand.

(4) The time limit referred to in subsection (1)(d) is,—

• (a) if the debtor is served with the bankruptcy notice in New Zealand, 10 working days after service; or

• (b) if the debtor is served outside New Zealand, the time specified in the order of the court permitting service outside New Zealand.

(5) In this section, a creditor who has obtained a final judgment or a final order includes a person who is for the time being entitled to enforce a final judgment or final order.

(6) In this section, if a court has given permission for enforcing an arbitration award that the debtor pay money to the creditor,—

• (a) final order includes the arbitration award; and

• (b) proceedings includes the arbitration proceedings in which the award was made.

(7) In subsection (1)(d)(ii), cross claim means a counterclaim, set-off, or cross demand that—

• (a) is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and

• (b) the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was obtained.

(1) A debtor commits an act of bankruptcy if, in New Zealand or elsewhere, the debtor disposes of all, or substantially all, of the debtor's property to a trustee for the benefit of all or any of the debtor's creditors.

(2) This section is subject to section 41(3)(a).

A debtor commits an act of bankruptcy if the debtor takes any of the following steps fraudulently or with an intent to give any creditor an advantage over other creditors:

• (a) disposes of his or her property, or part of it:

• (b) creates a charge on his or her property or gives any security in it:

• (c) makes any payment:

• (d) incurs any obligation.

A debtor commits an act of bankruptcy if the debtor takes any of the following steps with intent to defeat or delay his or her creditors:

• (a) departs, attempts to depart, or prepares to depart, from New Zealand:

• (b) if the debtor is already outside New Zealand, remains there.

A debtor commits an act of bankruptcy if the debtor, with intent to defeat or delay his or her creditors, avoids them by, for example, leaving or keeping away from the debtor's home, or by staying within that home.

A debtor commits an act of bankruptcy if the debtor notifies any of the debtor's creditors that the debtor has suspended, or is about to suspend, payment of the debtor's debts.

(1) A debtor commits an act of bankruptcy if the debtor admits at a meeting of creditors that he or she is insolvent and—

• (a) a majority of the creditors present at the meeting requires the debtor to file an application for adjudication; or

• (b) the debtor agrees to file an application for adjudication and does not do so within 2 working days after the meeting.

(2) In subsection (1)(a), majority means a majority by number of creditors present and the value of their combined debts.

(1) A debtor commits an act of bankruptcy if—

• (a) an execution process has been issued against the debtor or property of the debtor; and

• (b) property of the debtor has been taken into possession under the execution process; and

• (c) the judgment or order for which the execution process has been issued is not satisfied within 5 working days after possession has been taken.

(2) In this section, execution process means—

• (a) a writ of sale; or

• (b) a writ of possession; or

• (c) a writ of arrest; or

• (d) a writ of sequestration.

(3) The period of 5 working days in subsection (1)(c) is qualified if an interpleader application has been made in respect of the debtor's property that has been taken into possession. In that case the period of 5 working days does not include the days that elapse between—

• (a) the date when the application is made; and

• (b) the date when the application is finally determined, withdrawn, abandoned, or otherwise resolved.

(1) A debtor commits an act of bankruptcy if—

• (a) a writ of sale directed against any land of the debtor, or any interest in that land, has been delivered to a sheriff; and

• (b) as part of the execution process, the land or interest has been advertised for sale in at least 1 newspaper published or circulating in the town or district in which the land is situated.

(2) However, subsection (1) does not apply, and an act of bankruptcy is not committed, if the judgment or the order under which the writ of sale has been issued is satisfied within 5 working days after the writ of sale has been both delivered to the sheriff and advertised.

A debtor commits an act of bankruptcy if, under an execution process issued against the debtor or the debtor's property, a return is made that sufficient goods and chattels of the debtor could not be found on which to levy the debt.

A debtor commits an act of bankruptcy if the debtor takes any of the following steps with intent to prejudice his or her creditors, or to give one creditor an advantage over another:

• (a) removes or attempts to remove any of the debtor's property from any place:

• (b) conceals or attempts to conceal any of his or her property.

A debtor commits an act of bankruptcy if—

• (a) the debtor is required by law to keep a trust account; and

• (b) judgment has been given against the debtor for nonpayment of trust money; and

• (c) the judgment is not satisfied within 5 working days after the date of the judgment.

(1) The bankruptcy notice must—

• (a) be in the prescribed form; and

• (b) require the debtor, in relation to the judgment debt or the sum ordered to be paid under a final order,—

  • (i) to pay the amount owing, plus costs; or

  • (ii) to give security for the amount owing that satisfies the court or the creditor; or

  • (iii) to compromise the amount owing on terms that satisfy the court or the creditor; and

• (c) state what are the consequences if the debtor does not comply with the notice; and

• (d) be served on the debtor in the prescribed manner.

(2) The bankruptcy notice may name an agent to act on behalf of the creditor in so far as the notice requires—

• (a) any payment to be made to the creditor; or

• (b) any other step to be taken that involves the creditor.

(3) In this section,—

• (a) creditor includes a person entitled to enforce a final judgment or final order; and

• (b) final order includes an arbitration award that the debtor pay money to the creditor, if the court has given permission to enforce the award.

(1) Overstatement in a bankruptcy notice of the amount owing by the debtor does not invalidate the notice, unless—

• (a) the debtor notifies the creditor that the debtor disputes the validity of the notice because it overstates the amount owing; and

• (b) the debtor makes that notification within the time specified in the notice for the debtor to comply with the notice.

(2) A debtor complies with a notice that overstates the amount owing by—

• (a) taking steps that would have been compliance with the notice had it stated the correct amount owing (for example, by paying the creditor the correct amount owing plus costs); and

• (b) taking those steps within the time specified in the notice for the debtor to comply.

(1) A creditor who applies for a debtor to be adjudicated bankrupt must not issue an execution process against the debtor in respect of the debtor's property or person to recover a debt on which the application is based.

(2) If the creditor has already issued the execution process, the creditor must not continue it.

(3) However, the creditor may apply to the court for permission to issue or continue the execution process, as the case may be.

(1) After a creditor's application for adjudication has been filed, the debtor or any creditor may apply to the court for an order halting the issue or continuance of an execution process against the debtor in respect of the debtor's property or person by any other creditor.

(2) On an application under subsection (1), the court may—

• (a) halt the execution process, on the terms and conditions (if any) that the court thinks appropriate; or

• (b) allow the execution process to continue, on the terms and conditions (if any) that the court thinks appropriate.

(1) This section applies if an execution process has been issued out of a court (Court 1) other than the court (Court 2) where the application for adjudication was filed.

(2) If it is proved to Court 1 that an application for the adjudication of the debtor has been filed in Court 2, Court 1 may—

• (a) halt the execution process, subject to the terms and conditions (if any) that Court 1 thinks appropriate; or

• (b) allow the execution process to continue, but on the terms and conditions (if any) that Court 1 thinks appropriate.

The restrictions in sections 31 to 33 on issuing or continuing an execution process do not apply if the application for adjudication is withdrawn or dismissed.

In sections 31 to 34, execution process means any of the following:

• (a) issuing or proceeding with any of the following writs or warrants under a judgment or order obtained against the debtor in any court in its civil jurisdiction (except a judgment or order for possession of any land or building obtained on the ground that the debtor is a trespasser or that the debtor's tenancy has expired):

  • (i) a writ or warrant for the possession, seizure, or sale of any property:

  • (ii) a writ of attachment:

• (b) obtaining a garnishee order in favour of a judgment creditor under rule 638 of the District Courts Rules 1992:

• (c) obtaining an order that a judgment creditor may sue a subdebtor under rule 639(2)(c) of the District Courts Rules 1992:

• (d) having an interim charging order made final under rule 17.59 of the High Court Rules:

• (e) beginning or continuing proceedings in any court for the appointment of a receiver of any property, except an application for the appointment of the Assignee as receiver and manager under section 50:

• (f) exercising any power of re-entry under a lease, or any power terminating a lease:

• (g) seizing or selling any property by way of distress for rent.

The court may, at its discretion, adjudicate the debtor bankrupt if the creditor has established the requirements set out in section 13.

The court may, at its discretion, refuse to adjudicate the debtor bankrupt if—

• (a) the applicant creditor has not established the requirements set out in section 13; or

• (b) the debtor is able to pay his or her debts; or

• (c) it is just and equitable that the court does not make an order of adjudication; or

• (d) for any other reason an order of adjudication should not be made.

(1) The court may at any time halt the creditor's application for adjudication.

(2) The court may halt the application on the terms and conditions (if any), and for the period, that the court thinks appropriate.

(1) If there is more than 1 application for adjudication, and 1 application has been halted by a court order, the court may, if there is a good reason, make an order of adjudication on the application that has not been halted.

(2) If the court makes an order of adjudication under subsection (1), the court must dismiss the application that has been halted, on the terms and conditions (if any) that the court thinks appropriate.

If a creditor's application for adjudication relates to more than 1 debtor, the court may refuse adjudication of 1 or some of the debtors without affecting the application in relation to the remaining debtor or debtors.

(1) This section applies if the debtor—

• (a) has made a disposition of all, or substantially all, of the debtor's property to a trustee for the benefit of all or any of the debtor's creditors; or

• (b) has made a proposal under Part 5; or

• (c) has applied for a summary instalment order under Part 5.

(2) The debtor or the trustee or any creditor may apply for an order under this section.

(3) On the application, the court may make any of the following orders:

• (a) order that the disposition or proposal is not an act of bankruptcy:

• (b) halt or refuse the application for adjudication:

• (c) order that any other application for adjudication must not be filed:

• (d) make any order as to costs that the court thinks appropriate:

• (e) if it orders that costs must be paid to the creditor who has applied for adjudication, order that the costs must be paid out of the debtor's estate.

(4) This section does not limit the powers of the court under section 37.

(1) This section applies if the creditor's application for adjudication relies on one of the following acts of bankruptcy:

• (a) the debtor failed to comply with a bankruptcy notice (see section 17):

• (b) a judgment against the debtor for non-payment of trust money is not satisfied within 5 working days after the date of the judgment (see section 28).

(2) If the debtor has appealed against the judgment or order underlying the bankruptcy notice or the judgment for nonpayment of trust money, as the case may be, and the appeal is still to be decided, then the court may—

• (a) halt the creditor's application for adjudication; or

• (b) refuse the application.

(1) This section applies if the debtor appears in opposition to a creditor's application and the debtor says either—

• (a) that he or she does not owe a debt to the creditor; or

• (b) that he or she does owe a debt to the creditor, but the debt is less than $1,000.

(2) The court may, instead of refusing the application, halt the application so that the question of whether the debt is owed, or how much of the debt is owed, can be resolved at a trial.

(3) As a condition of halting the application, the court may require the debtor to give security to the creditor for any debt that may be established as owing by the debtor to the creditor, and for the costs of establishing the debt.

(1) The court may substitute another creditor (Creditor 2) for the creditor making the application for adjudication (Creditor 1), if—

• (a) Creditor 1 has not proceeded with due diligence or at the hearing of the application offers no evidence; and

• (b) the debtor owes Creditor 2 $1,000 or more.

(2) In that case, Creditor 2 must file another application for adjudication, but can rely on the act of bankruptcy to which Creditor 1's application related.

A debtor may file an application with the Assignee to have himself or herself adjudicated bankrupt if the debtor has combined debts of $1,000 or more.

(1) A debtor may not file an application for adjudication unless the debtor has first filed with the Assignee a statement of the debtor's affairs in the prescribed form.

(2) The Assignee may reject a statement of affairs that in the Assignee's opinion is incorrect or incomplete.

(1) A debtor who files an application with the Assignee to have himself or herself adjudicated bankrupt is automatically adjudicated bankrupt when the application is filed.

(2) That adjudication has the same consequences as if the debtor had been adjudicated bankrupt by the court.

(1) Two or more debtors who are partners in a business partnership may file a joint application.

(2) The debtors are automatically adjudicated bankrupt both separately and jointly when the application is filed.

(1) To file an application for adjudication, a debtor must—

• (a) complete the prescribed application form; and

• (b) lodge it with the Assignee in accordance with the prescribed procedure.

(2) The debtor files the application when it is endorsed by the Assignee as having been received.

(1) After a creditor's application for adjudication has been filed, a creditor of the debtor may apply to the court for an order appointing the Assignee as receiver and manager of all or part of the debtor's property.

(2) The court may make the order at any time before it makes an order of adjudication.

(3) As part of the order, the court may authorise the Assignee to take all or any of the following steps:

• (a) take possession of any property:

• (b) sell any perishable property or property that is likely to fall rapidly in value:

• (c) control the debtor's business or property as directed by the court.

(4) An order for the Assignee's control of the debtor's business must be confined to what is necessary, in the court's opinion, for conserving the debtor's property.

After the appointment of the Assignee as receiver and manager, the court may, on an application by a creditor or the Assignee, make additional orders under section 50.

The appointment of the Assignee as receiver and manager of the debtor's property must be advertised in accordance with regulations made under this Act for that purpose.

(1) A creditor of the debtor must not issue an execution process of the kind referred to in section 35 after the appointment of the Assignee as receiver and manager has been advertised.

(2) A creditor must not continue an execution process already issued before the advertisement.

(3) However, a creditor or any other person interested may apply to the court for an order allowing the issue or continuation of an execution process, and the court may make an order on the terms and conditions that it thinks appropriate.

If the execution process is halted under section 53, then sections 77, 108 to 112, and 115 apply as if the order halting the execution process were an adjudication.

The bankruptcy commences on the date and at the time when the debtor is adjudicated bankrupt.

In this Act, date of adjudication means,—

• (a) if the debtor is adjudicated bankrupt on a creditor's application, the date and time when the court made the order of adjudication; or

• (b) if the debtor is adjudicated bankrupt on the debtor's application, the date and time when the debtor filed the application (see section 49(2)).

(1) If the debtor is adjudicated bankrupt on a creditor's application, the court must record the date and time when the order was made.

(2) If the debtor is adjudicated bankrupt on the debtor's application, the Assignee must record on the application the date and time when the debtor filed the application.

The Registrar must notify the Official Assignee as soon as possible after the court makes an order of adjudication.

The Official Assignee must nominate an Assignee to be the Assignee of the debtor's property, and may at any time direct that another Assignee is the Assignee of the debtor's property.

(1) This section applies if there is doubt whether an act was done, or a transaction entered into or effected, before or after the date of adjudication.

(2) The presumption is that the act was done, or the transaction entered into or effected, after the date of adjudication, but the presumption does not apply if the contrary is proved.

Unless an adjudication is appealed under this Act,—

• (a) no one can later assert that the adjudication was not valid or that a prerequisite for adjudication was absent; and

• (b) the adjudication is binding on all persons.

(1) The Assignee must maintain a public register of discharged and undischarged bankrupts.

(2) The register must be maintained in accordance with subpart 5 of Part 7.

In this Act, a debtor who has been adjudicated bankrupt is called the bankrupt.

(1) On adjudication—

• (a) the Assignee must advertise the adjudication; and

• (b) the bankrupt must file with the Assignee a statement of his or her affairs, if the bankrupt has not already done so; and

• (c) the Assignee may call a meeting of the bankrupt's creditors; and

• (d) proceedings to recover certain debts must be halted; and

• (e) the property of the bankrupt vests in the Assignee.

(2) This section is a guide only to the immediate consequences of adjudication.

(1) The Assignee must advertise the adjudication of the bankrupt as soon as practicable after it has occurred.

(2) The Assignee must advertise the adjudication in the prescribed manner.

(3) Subsection (1) is subject to section 66.

The court may order that the Assignee must not advertise the adjudication if the bankrupt has appealed against an order of adjudication or if the bankrupt has applied for an annulment of the adjudication.

After adjudication, the bankrupt must file with the Assignee a statement of the bankrupt's affairs in the prescribed form, unless the bankrupt has already filed a statement under section 46.

(1) As soon as practicable after adjudication, the Assignee must send the bankrupt a notice in the prescribed form stating—

• (a) that the bankrupt has been adjudicated bankrupt; and

• (b) that the bankrupt must file a statement of the bankrupt's affairs in the prescribed form; and

• (c) the time when the statement must be filed.

(2) The Assignee must send the notice to the address of the bankrupt given in the application for adjudication or the bankrupt's last known address.

(3) This section does not apply if the bankrupt has already filed a statement under section 46.

The bankrupt must file a statement of the bankrupt's affairs in the prescribed form with the Assignee within 10 working days after receiving the Assignee's notice under section 68(1) that the statement must be filed.

At any time after filing a statement of affairs with the Assignee under section 46 or 67, the bankrupt may file additional or amended statements or answers.

(1) After adjudication, the Assignee must call the first meeting of the bankrupt's creditors, unless the Assignee dispenses with the meeting under section 73.

(2) The Assignee may call the meeting by giving notice of the time and place of the meeting to—

• (a) the bankrupt; and

• (b) each creditor named in the bankrupt's statement of affairs; and

• (c) any other creditors known to the Assignee.

(3) The Assignee must advertise the time and place of the meeting in the prescribed manner.

(1) The first creditors' meeting must be held—

• (a) within 25 working days after the bankrupt files the bankrupt's statement of affairs; or

• (b) if the bankrupt is late in filing the statement or does not file a statement at all, at the latest within 25 working days after adjudication.

(2) However, the Assignee may delay calling the first creditors' meeting if the Assignee considers that there are special circumstances that justify the delay.

(1) The Assignee need not call a first creditors' meeting if the Assignee—

• (a) decides that the meeting should not be called; and

• (b) sends each creditor named in the bankrupt's statement of affairs, and any other creditor known to the Assignee, a notice that complies with section 74; and

• (c) does not receive, within 10 working days after the Assignee's notice was sent, written notice from a creditor requiring the Assignee to call the meeting.

(2) In deciding whether the meeting should not be called, the Assignee must consider—

• (a) the bankrupt's assets and liabilities; and

• (b) the likely result of the bankruptcy; and

• (c) any other relevant matters.

The Assignee's notice to creditors under section 73(1)(b) must—

• (a) state that the Assignee considers that the first creditors' meeting should not be called; and

• (b) give the reasons for not calling the meeting; and

• (c) state that the Assignee will not call the meeting unless a creditor gives the Assignee written notice, within 10 working days after the Assignee's notice was sent, requiring the Assignee to call the meeting.

(1) The Assignee must send the following documents with the notice of the first creditors' meeting:

• (a) a summary of the bankrupt's statement of assets and liabilities; and

• (b) extracts from, or a summary of, the bankrupt's explanation of the causes of the bankruptcy; and

• (c) any comments on the bankruptcy that the Assignee chooses to make.

(2) However, subsection (1) does not apply if the Assignee has not received the bankrupt's statement of affairs when the notice is sent.

(3) A failure in sending or receiving the documents in subsection (1) does not affect the validity of the proceedings at the meeting.

(1) On adjudication, all proceedings to recover any debt provable in the bankruptcy are halted.

(2) However, on the application by any creditor or other person interested in the bankruptcy, the court may allow proceedings that had already begun before the date of adjudication to continue on the terms and conditions that the court thinks appropriate.

(1) A creditor must not begin or continue an execution, attachment, or other process in respect of the bankrupt's property or person, for the recovery of a debt provable in the bankruptcy, after—

• (a) the Assignee has advertised the bankrupt's adjudication; or

• (b) the Assignee has given notice of the adjudication to the creditor.

(2) After advertisement of the adjudication or notice by the Assignee to the creditor, a creditor must not seize or sell any property by way of distress for rent due and owing by the bankrupt, but the creditor may continue with the distress procedure if already begun.

If the bankrupt dies after adjudication, the bankruptcy continues in all respects as if the bankrupt were alive.

The role of the creditors in the bankruptcy is primarily to—

• (a) attend meetings of the creditors; and

• (b) submit proofs of the debts of the bankrupt.

(1) There are 2 types of creditors' meetings:

• (a) the first creditors' meeting; and

• (b) subsequent meetings.

(2) The rules for calling the first creditors' meeting are set out in sections 71 to 75.

(1) The Assignee may call subsequent meetings of creditors.

(2) The Assignee must call a subsequent meeting if required to do so by one-quarter in number and value of the creditors who have proved their debts.

(3) The Assignee must call the meeting by taking the steps set out in section 71(2) and (3).

A creditors' meeting, and the resolutions passed at the meeting, are valid even if some creditors did not receive the notice of the meeting, unless a court orders otherwise.

(1) The chairperson of a creditors' meeting is the Assignee or a person appointed by the Assignee to be the chairperson.

(2) However, if neither the Assignee nor the person (if any) appointed by the Assignee to be the chairperson attends the meeting, the creditor or creditors may elect one of themselves to act as chairperson for the purpose of the meeting, but only if that person is entitled to vote at the meeting.

(3) A person appointed by the Assignee or elected by the creditors to act as chairperson may administer any oath that the Assignee could have administered if the Assignee had attended the meeting.

The Assignee or the chairperson of a meeting may adjourn the meeting from time to time and place to place.

If the Assignee attends a creditors' meeting or an adjournment of the meeting, the Assignee—

• (a) must report on the administration of the bankrupt's estate; and

• (b) must give any creditor any further information that the creditor may properly require; and

• (c) must, if reasonably required, produce for the meeting (or its adjournment) all accounting records, deeds, and papers in the Assignee's possession that relate to the bankrupt's property.

(1) A person may attend a creditors' meeting—

• (a) by being physically present at the time and place appointed for the meeting; or

• (b) if the Assignee makes it available, by means of an audio or audio-visual link, so that all those participating in the meeting can hear and be heard by each other.

(2) A creditor may also attend by voting by postal or electronic vote under section 93 or by proxy on any resolution to be put to the meeting.

(1) The bankrupt must, if required by the Assignee, attend all creditors' meetings by being physically present or present by an audio or audio-visual link.

(2) The Assignee, the chairperson of a creditors' meeting, a creditor, or a representative of a creditor may question the bankrupt as to his or her property, conduct, or dealings. The chairperson of the meeting must allow only questions that relate to the bankrupt's property, conduct, or dealings.

(3) The questioning may be on oath.

(4) The bankrupt must sign a statement of the bankrupt's evidence given under the questioning, if required to do so by the Assignee or the chairperson of the meeting.

A person who is not a creditor of the bankrupt may attend a creditors' meeting with the consent of—

• (a) the Assignee; or

• (b) the creditors attending the meeting, voting by ordinary resolution.

(1) The Assignee must ensure that minutes are kept of every creditors' meeting.

(2) The Assignee or the chairperson must sign the minutes.

(3) The Assignee may record the meeting, but only with the consent of each person attending the meeting.

(1) For a valid creditors' meeting, at least the following persons must attend:

• (a) the Assignee or a person who represents the Assignee; and

• (b) a creditor or a person who represents a creditor.

(2) The meeting lapses if those persons do not attend, and the Assignee may call another meeting.

(1) At a creditors' meeting, any of the following persons may represent a creditor and, if the bankrupt attends, any of the following persons except the person in paragraph (d) may represent the bankrupt:

• (a) a lawyer:

• (b) an accountant:

• (c) a person who keeps the creditor's or bankrupt's accounts:

• (d) in the case of a creditor, a person who is the creditor's authorised agent under a power of attorney:

• (e) a person who satisfies the Assignee that he or she represents the creditor or bankrupt:

• (f) in the case of a partnership, a partner.

(2) In addition to the persons listed in subsection (1), a creditor may be represented,—

• (a) in the case of the Crown, by any officer of the appropriate government department:

• (b) in the case of a public body, by an officer of that body:

• (c) in the case of a company, by a director, or its general manager or accountant, or by a person authorised in writing by one of those persons.

(1) For a creditors' meeting to pass—

• (a) an ordinary resolution, a majority in number and value of the creditors (or their representatives) who attend and who vote on the resolution must vote in favour of it:

• (b) a special resolution, three-quarters in number and value of the creditors (or their representatives) who attend and who vote on the resolution must vote in favour of it.

(2) For the purposes only of determining whether the requisite majority by value has voted in favour of a resolution,—

• (a) the Assignee may admit or reject proofs of debt; and

• (b) the Assignee may adjourn the meeting in order to admit or reject proofs of debt; and

• (c) a person whose debt has been admitted is a creditor.

(1) A creditor who is entitled to vote at a creditors' meeting may vote on a resolution to be put to the meeting—

• (a) by postal vote; or

• (b) by electronic vote, if the voting paper for the resolution allows it, in accordance with the procedure specified in the voting paper.

(2) A postal or electronic vote must reach the Assignee at least 2 working days before the meeting begins if it is to be counted at the meeting.

(3) A voting paper for each resolution to be put to a creditors' meeting must accompany the notice of the meeting, together with instructions for returning the voting paper or electronic vote (if allowed by the voting paper under section 93(1)(b)) to the Assignee at least 2 working days before the meeting begins.

Creditors of the bankrupt who are entitled to vote, or their representatives, may vote at a creditors' meeting, but this rule is qualified by the provisions of sections 95 to 97.

A debt that is secured does not entitle the creditor to vote unless the creditor has taken one of the following steps under this Act:

• (a) surrendered the charge; or

• (b) valued the charge; or

• (c) realised the charge.

(1) A debt on, or secured by, a current bill of exchange or promissory note does not entitle the creditor to vote unless the creditor is willing to take the following steps:

• (a) treat a qualifying liability (which is defined in subsection (2)) as a charge in the creditor's hands; and

• (b) estimate the value of the charge; and

• (c) deduct the value of the charge from the creditor's claim for the purposes of voting (but not for the purposes of distribution under subpart 10 of Part 3); and

• (d) show the bill or note to the Assignee when the Assignee requires it.

(2) In this section, qualifying liability means the liability to the creditor on the bill or note of every person who—

• (a) is liable on the bill or note antecedently to the debtor; and

• (b) is not a bankrupt.

(1) A person (A) must not vote in favour of a resolution that would directly or indirectly enable any of the persons listed in subsection (2) to receive any remuneration out of the bankrupt's estate other than as a creditor sharing rateably with the other creditors.

(2) The persons referred to in subsection (1) are—

• (a) A:

• (b) A's business partner, employer, or employee:

• (c) a creditor that A represents:

• (d) the business partner, employer, or employee of a creditor that A represents.

The adjudication of a partner in a firm who is indebted to a creditor jointly with 1 or more of his or her partners entitles the creditor to prove the debt for the purpose of voting at any creditors' meeting, and to vote.

(1) A creditors' meeting may pass an ordinary resolution—

• (a) appointing an expert to assist the Assignee in the administration of the bankrupt's estate; and

• (b) providing for the expert's remuneration out of the estate.

(2) A creditors' meeting may pass an ordinary resolution appointing a committee of any persons to assist the Assignee in the administration of the bankrupt's estate, but in that case the court must approve any remuneration of the members of the committee out of the estate.

A creditor, or a lawyer or accountant acting for that creditor, who has lodged a creditor's claim form may at any reasonable time inspect and take extracts or copies of—

• (a) the bankrupt's accounting records:

• (b) the bankrupt's answers to questions under section 87:

• (c) the bankrupt's statement of affairs:

• (d) all proofs of debt:

• (e) the minutes of any creditors' meeting.

(1) On adjudication,—

• (a) all property (whether in or outside New Zealand) belonging to the bankrupt or vested in the bankrupt vests in the Assignee without the Assignee having to intervene or take any other step in relation to the property, and any rights of the bankrupt in the property are extinguished; and

• (b) the powers that the bankrupt could have exercised in, over, or in respect of any property (whether in or outside New Zealand) for the bankrupt's own benefit vest in the Assignee.

(2) This section is subject to section 104.

(1) Between the commencement of bankruptcy and discharge of the bankrupt,—

• (a) all property (whether in or outside New Zealand) that the bankrupt acquires or that passes to the bankrupt vests in the Assignee without the Assignee having to intervene or take any other step in relation to the property, and any rights of the bankrupt in the property are extinguished; and

• (b) the powers that the bankrupt could have exercised in, over, or in respect of that property for the bankrupt's own benefit vest in the Assignee.

(2) This section is subject to section 104 and section 123.

(3) This section does not apply to property that is vested in the bankrupt under an order made under section 119(3).

If the Assignee is replaced, the property and powers vested in the former Assignee under section 101 or 102 vest in the replacement Assignee.

Property held by the bankrupt in trust for another person does not vest in the Assignee.

(1) Nothing in the Land Transfer Act 1952 restricts the operation of sections 101 to 104.

(2) Sections 101 to 104 do not affect the operation of any other law that prevents any property from vesting in the Assignee.

(1) The court may, on the application of the Assignee, order that any money due to the bankrupt, or any money to become due or payable to the bankrupt, is assigned or charged to, or in favour of, the Assignee.

(2) The assignment or charge is a discharge to the person who pays the Assignee.

The Assignee must apply the following payments in accordance with section 274:

• (a) any amount paid by the bankrupt under section 147:

• (b) any amount paid to the Assignee under an order made under section 106.

(1) This section applies to a creditor who has, before adjudication,—

• (a) issued execution against the bankrupt's property; or

• (b) attached a debt due by the bankrupt.

(2) The creditor may retain the benefit of the execution or attachment (including the proceeds) only if the creditor completed the execution or attachment—

• (a) before adjudication; and

• (b) before the creditor had notice that an application for adjudication had been filed or that the bankrupt had committed an act of bankruptcy (other than an act of bankruptcy arising out of the creditor's execution or attachment).

(3) The creditor may retain as against the Assignee a payment made by the bankrupt in the course of the execution or attachment to avoid the execution or attachment as if—

• (a) the payment was the proceeds of the execution or attachment; and

• (b) the execution or attachment was completed when the payment was made.

(4) The right of a creditor under this section to retain the benefit of an execution or attachment is subject to sections 194 to 197.

(1) This section applies if the sheriff has taken the property of a debtor in execution and is served with notice of the debtor's adjudication before the property is sold or before the execution is completed by the receipt or recovery of the full amount of the levy of execution.

(2) If the Assignee requires it, the sheriff must deliver to the Assignee any goods and money seized or received in part satisfaction of the execution.

(3) The costs of the execution are a first charge on the goods or money delivered to the Assignee, and the Assignee may sell the goods or part of the goods to satisfy the charge.

(1) This section applies if, under execution of a judgment for a sum of more than $100, the sheriff sells property of the debtor or is paid money in order to avoid a sale.

(2) The sheriff must deduct the costs of the execution from the proceeds of sale or the money paid and retain the balance for 10 working days (which in this section is called the 10-day period), to be applied in accordance with subsection (3) or subsection (4).

(3) If the sheriff is served with notice within the 10-day period that the debtor has filed an application for adjudication, the sheriff must pay the balance to the Assignee, who is entitled to retain it as against the execution creditor.

(4) If the sheriff is served with notice within the 10-day period that a creditor has filed an application for the adjudication of the debtor, subject to subsection (3),—

• (a) the sheriff must retain the balance until the application (and any other application of which notice is served on the sheriff pending disposal of the first application) has been disposed of; and

• (b) the sheriff must,—

  • (i) if adjudication results, pay the balance to the Assignee; or

  • (ii) if adjudication does not result, pay the balance to the execution creditor, who is entitled to retain it as against the Assignee (subject to section 112).

(5) If the sheriff is not served with notice within the 10-day period that an application for the adjudication of the debtor has been filed, the sheriff must pay the balance to the execution creditor, who is entitled to retain it as against the Assignee.

A purchaser in good faith of a debtor's property, on which execution has been levied and which is sold by the sheriff, acquires a good title to the property as against the Assignee.

The court may set aside the rights conferred on the Assignee under sections 109 and 110 in favour of the execution creditor, to the extent and on the terms and conditions (if any) that the court thinks appropriate.

(1) This section applies to a transaction between a person (A) and the bankrupt in relation to property that the bankrupt has acquired, or that has passed to the bankrupt, after adjudication.

(2) The transaction is valid as against the Assignee if—

• (a) A deals with the bankrupt in good faith and for value; and

• (b) the transaction is completed without an intervention by the Assignee.

(3) If A is the bankrupt's bank, a transaction by A dealing with the bankrupt for value includes—

• (a) the receipt by A of any money, charge, or negotiable instrument from the bankrupt or by the bankrupt's order or direction; and

• (b) a payment by A to the bankrupt or by the bankrupt's order or direction; and

• (c) the delivery by A of a charge or negotiable instrument to the bankrupt or by the bankrupt's order or direction.

(4) A payment of money or delivery of property by a legal personal representative to, or by the direction of, the bankrupt is a transaction for value.

(1) This section applies to property that the bankrupt has acquired, or that has passed to the bankrupt, after adjudication.

(2) An execution or attachment against the property is valid as against the Assignee if it is—

• (a) in good faith; and

• (b) in respect of a debt or liability incurred by the bankrupt after adjudication; and

• (c) completed before an intervention by the Assignee.

For the purposes of section 108 or 114—

• (a) an execution against goods is completed by seizure and sale:

• (b) an attachment of a debt is completed by receipt of the debt:

• (c) an execution against land is completed by sale or, in the case of an equitable interest, by the appointment of a receiver.

(1) This section applies to the Assignee's interest in property that is acquired by or passes to the bankrupt after adjudication.

(2) The Assignee's interest in property to which this section applies ends and passes in the manner and to the extent necessary to give effect to a transaction, execution, or attachment to which section 113 or 114 applies.

(1) Subject to section 120, the Assignee may disclaim onerous property.

(2) Subsection (1) applies even if the Assignee has taken possession of the property, tried to sell it, or otherwise exercised rights of ownership in relation to it.

(3) The Assignee must, within 10 working days after the disclaimer, send a written notice of the disclaimer to every person whose rights are, to the Assignee's knowledge, affected by it.

(4) For the purposes of this section and section 120, onerous property—

• (a) means—

  • (i) an unprofitable contract; or

  • (ii) property of the bankrupt that is unsaleable, or not readily saleable, or that may give rise to a liability to pay money or perform an onerous act; or

  • (iii) a litigation right that, in the opinion of the Assignee, has no reasonable prospect of success or cannot reasonably be funded from the assets of the bankrupt's estate; but

• (b) does not include—

  • (i) a netting agreement to which sections 255 to 263 apply; or

  • (ii) any contract of the bankrupt that constitutes a transaction under that netting agreement.

A disclaimer by the Assignee—

• (a) brings to an end, on and from the date of the disclaimer, the rights, interests, and liabilities of the Assignee and the bankrupt in relation to the property disclaimed:

• (b) does not affect the rights, interests, or liabilities of any other person, except in so far as is necessary to release the Assignee or the bankrupt from a liability.

(1) A person suffering loss or damage as a result of disclaimer by the Assignee may—

• (a) claim as a creditor in the bankruptcy for the amount of the loss or damage, taking account of the effect of an order made by the court under paragraph (b):

• (b) apply to the court for an order that the disclaimed property be delivered to, or vested in, that person.

(2) The bankrupt may also apply for an order that the disclaimed property be delivered to, or vested in, the bankrupt.

(3) The court may make an order under subsection (1)(b) or (2) if it is satisfied that it is fair that the property should be delivered to, or vested in, the applicant.

The Assignee loses the right to disclaim if—

• (a) a person whose rights would be affected by the disclaimer has sent the Assignee a written notice requiring the Assignee to elect whether to disclaim the onerous property in question; and

• (b) the notice specifies a date to disclaim that is not less than 20 working days after the Assignee has received the notice; and

• (c) the Assignee does not disclaim the onerous property before the close of that date.

(1) The vesting of land subject to a rentcharge after disclaimer by the Assignee in the Crown, any other person, or their successors in title does not make any of those persons personally liable for the rentcharge.

(2) However, this section does not affect the liability of a person in subsection (1) for rentcharge accruing after that person has taken possession or control of the land or has entered into possession of it.

(1) This section applies to an interest in land that—

• (a) is owned by the bankrupt; and

• (b) is subject to a mortgage or a charge; and

• (c) is not disclaimed by the Assignee.

(2) The Assignee must—

• (a) register, under the Land Transfer Act 1952, the transmission of the interest in the land to the Assignee; or

• (b) give notice to the mortgagee or other person entitled under the charge that the Assignee cannot, or does not intend to, register transmission of the interest in the land.

(3) Notice under subsection (2)(b) is notice that the interest has vested in the Assignee, and the mortgagee or person entitled under the charge is, in the event of entering into possession or selling, liable to account to the Assignee as if the Assignee were the registered proprietor of the interest.

(1) The Assignee cannot, after the bankrupt's discharge, claim an interest in land to which section 122(1) applies and for which the Assignee has not registered a transmission if the bankrupt—

• (a) was in possession of the interest at the time of adjudication; and

• (b) remained in possession until discharge from bankruptcy.

(2) Subsection (1) applies whether or not the Assignee gave a notice under section 122(2)(b).

(3) However, the Assignee may apply to the court for an order that the Assignee is entitled, after discharge, to claim the bankrupt's interest in the land, and the court must have regard to—

• (a) the good faith of the bankrupt; and

• (b) the time that has elapsed since adjudication; and

• (c) the value of any improvements made by the bankrupt; and

• (d) all other relevant matters.

(1) The Assignee may transfer the following property belonging to the bankrupt in the same way as the bankrupt could have transferred it if the bankrupt had not been adjudicated bankrupt:

• (a) securities in a company:

• (b) securities of the New Zealand Government:

• (c) securities issued by a local authority:

• (d) shares in ships:

• (e) any other property transferable in the records of a company, office, or person.

(2) A person whose act or consent is necessary for the transfer of the property must, on the Assignee's request, do whatever is necessary for the transfer to be completed.

(3) In the case of the transfer by the Assignee of securities in a company, a shareholder to whom the securities must be offered for sale under the constitution and who agrees to purchase must pay a reasonable price for the securities, whether or not the constitution provides a procedure for fixing the price.

The Assignee may disclaim any liability under shares owned by the bankrupt in any company by disclaiming the shares as onerous property under section 117, but section 119 (which relates to the position of a person who suffers loss as result of disclaimer) and section 120 (which provides that the Assignee may be required to elect whether to disclaim) do not apply to a disclaimer of liability under shares.

The Assignee loses the right to disclaim liability under shares if—

• (a) the company or a person who has an interest in the shares has sent the Assignee a written notice requiring the Assignee to elect whether to disclaim liability under the shares; and

• (b) the notice specifies a date to disclaim that is not less than 20 working days after the Assignee has received the notice; and

• (c) the Assignee does not disclaim liability under the shares before the close of that date.

(1) After disclaimer, the Assignee may, subject to the rules of any other Act and to the constitution of the company, transfer the shares in question to any person who has an interest in them.

(2) If that person refuses to accept the transfer or if no person has an interest in them, the Assignee may transfer the shares to the bankrupt if the bankrupt consents, and in that case the bankrupt is entitled as against the Assignee to retain the shares and the proceeds if the bankrupt sells them.

(3) If the Assignee does not transfer the shares to a person who has an interest in them or to the bankrupt, the board of the company may—

• (a) sell the shares; or

• (b) with the court's approval and whatever any other Act may say, cancel the shares as it thinks appropriate.

(4) The Assignee is a director of the company for the purposes of transferring, selling, or cancelling the shares under this section if—

• (a) immediately before adjudication the bankrupt was a director of the company; and

• (b) the number of directors is less than the minimum number of directors required by law or the company's constitution as a result of the bankrupt's disqualification as a director.

(1) This section applies if the Assignee has disclaimed liability under shares and the company has not been put into liquidation.

(2) The company may prove in the bankruptcy for—

• (a) the amount of unpaid calls made before adjudication in respect of the bankrupt's shares; and

• (b) the value of calls to be made in respect of the bankrupt's shares within 1 year after adjudication.

(3) The court must determine the value of the calls to be made if the Assignee and the company cannot agree.

In sections 130 to 133,—

(1) This section applies if—

• (a) the bankrupt purchased consumer goods under a hire purchase agreement before adjudication; and

• (b) the creditor either—

  • (i) took possession of the goods within 21 days before adjudication, and after adjudication still possesses them; or

  • (ii) takes possession of the goods after adjudication.

(2) The creditor must not sell or dispose of the consumer goods or part with possession of them (except for storage or repair) until 1 month after the date when the creditor serves a postpossession notice on the Assignee (which in this section and section 131 is called the 1-month period).

(3) However, subsection (2) does not apply if the Assignee consents in writing to the creditor selling or disposing of or parting with possession of the consumer goods before the expiry of the 1-month period.

(1) The Assignee may,—

• (a) within the 1-month period, exercise the right under section 30 of the Credit (Repossession) Act 1997 to introduce a buyer for consumer goods; or

• (b) at any time before the creditor sells or agrees to sell consumer goods under section 25 of the Credit (Repossession) Act 1997, settle the bankrupt's obligations as debtor in accordance with section 31 of that Act.

(2) This section applies no matter what the Credit (Repossession) Act 1997 says.

(1) This section applies if—

• (a) a creditor has taken possession of consumer goods purchased under a hire purchase agreement, whether before or after the adjudication of the debtor; and

• (b) the Assignee has not acted under section 131 in relation to the goods.

(2) The creditor may prove in the bankruptcy for the amount (which is subject to the limit in section 35 of the Credit (Repossession) Act 1997) that the creditor was entitled to recover from the bankrupt as debtor.

(3) If the creditor does prove in the bankruptcy under subsection (2),—

• (a) the creditor must submit the following documents with the creditor's claim form:

  • (i) the relevant post-possession notice; and

  • (ii) the statement of account mentioned in section 33 of the Credit (Repossession) Act 1997; and

• (b) the Assignee has the rights conferred on a debtor by sections 20 to 36 of the Credit (Repossession) Act 1997.

(1) This section applies if—

• (a) the bankrupt purchased consumer goods under a hire purchase agreement before adjudication; and

• (b) at the time of adjudication the creditor either—

  • (i) has not taken possession of the goods; or

  • (ii) has taken possession of them and has not sold or disposed of or parted with possession of them.

(2) The creditor may assign the consumer goods to the Assignee, and, if the creditor does so, may prove in the bankruptcy for the net balance due to the creditor under the agreement.

(1) Notwithstanding section 102, the rules in subsections (2) to (4) apply if a bankrupt, before discharge, is adjudicated bankrupt for a second time.

(2) Property that is acquired by, or has passed to, the bankrupt since the first adjudication, including property acquired or that has passed since the second adjudication, vests in the Assignee in the second bankruptcy.

(3) However, the court may, if it thinks it appropriate, order that all or part of the following assets or their proceeds vest in the Assignee in the first bankruptcy:

• (a) assets in the second bankruptcy that, in the court's opinion, were acquired independently of the creditors in the second bankruptcy:

• (b) assets in the second bankruptcy that devolved upon the bankrupt.

(4) A surplus in the second bankruptcy is an asset in the estate in the first bankruptcy, and must be paid to the Assignee in the first bankruptcy.

(1) This section applies if the Assignee in a bankruptcy receives notice that a creditor has filed an application for a second adjudication.

(2) The Assignee must hold property in his or her possession that has been acquired by, or passed to, the bankrupt since the first adjudication until the application for a second adjudication has been dealt with.

(3) The Assignee must transfer the property and its proceeds, less any deduction for the Assignee's costs and expenses, to the Assignee in second bankruptcy if the creditor's application results in a second adjudication, or if the bankrupt is automatically adjudicated bankrupt on his or her own application.

In the case of the adjudication of 2 or more persons jointly, the Assignee must keep distinct accounts of—

• (a) the joint estate; and

• (b) the separate estate of each bankrupt.

(1) The joint estate must first be applied to the debts due by the bankrupts jointly.

(2) The separate estate of each bankrupt must first be applied to the debts of that bankrupt.

(3) Any surplus in the joint estate must be credited to the separate estate of each bankrupt in proportion to the right and interest of each bankrupt in the joint estate.

(4) Any surplus in the separate estate of a bankrupt must be credited to the joint estate.

(1) The bankrupt must, to the best of the bankrupt's ability, assist in the realisation of the bankrupt's property and the distribution of the proceeds among the creditors.

(2) This duty is in addition to any other duty imposed on the bankrupt by this Act or by any other enactment or law.

The bankrupt must as soon as practicable after acquisition notify the Assignee of any property that is—

• (a) acquired by, or passes to, the bankrupt before discharge; and

• (b) divisible among the creditors.

(1) On demand by the Assignee, the bankrupt must deliver all or any of the bankrupt's property that is divisible among the creditors, and that is under the bankrupt's possession or control, to the Assignee or a person authorised by the Assignee to receive it.

(2) On demand by the Assignee, the bankrupt must deliver to the Assignee, or a person authorised by the Assignee to receive it, any property that is acquired by, or passes to, the bankrupt before his or her discharge.

(1) The bankrupt must take all the steps (including the steps specified in subsection (2)) in relation to the bankrupt's property, and the distribution of the proceeds to the creditors, that are—

• (a) required by the Assignee; or

• (b) prescribed by rules or regulations made under this Act; or

• (c) directed to be done by the court by an order made in reference to a particular bankruptcy; or

• (d) directed to be done by the court on an application by the Assignee or a creditor.

(2) The steps referred to in subsection (1) include the execution by the bankrupt of powers of attorney, conveyances, transfers, deeds, assurances, and instruments.

(1) As soon as practicable after adjudication, the bankrupt must—

• (a) deliver to the Assignee, at the Assignee's office, relevant documents that are in the bankrupt's possession or control; and

• (b) notify the Assignee of relevant documents that are in the possession or control of any other person.

(2) In subsection (1), relevant documents means all accounting records, papers, deeds, instruments, and other documents relating to the bankrupt's estate.

The bankrupt must,—

• (a) as soon as practicable after adjudication, give the Assignee a complete and accurate list of the bankrupt's property and of the bankrupt's creditors and debtors, and update the lists as necessary; and

• (b) give the Assignee any other information relating to the bankrupt's property that the Assignee requires; and

• (c) attend before the Assignee when required by the Assignee; and

• (d) verify any statement by statutory declaration when required by the Assignee.

When the Assignee requires it, the bankrupt must provide the Assignee with details of his or her income and expenditure since adjudication.

The bankrupt must immediately notify the Assignee of any change in the bankrupt's—

• (a) address; or

• (b) employment; or

• (c) name; or

• (d) income.

(1) The bankrupt must give the Assignee (or any person employed by the Assignee) the information and details that are necessary to prepare a statement of financial position of the bankrupt's estate.

(2) If required by the Assignee, the bankrupt must, within a reasonable time of adjudication, prepare and deliver to the Assignee full, true, and detailed accounts and statements of financial position that show—

• (a) details of the bankrupt's trading and stocktaking; and

• (b) details of the bankrupt's profit and losses during any period in the 3 years before the adjudication.

(3) For the bankrupt to prepare the accounts and statements of financial position referred to in subsection (2),—

• (a) the Assignee must give the bankrupt full access to the bankrupt's books and papers in the Assignee's possession; and

• (b) if the Assignee thinks it necessary, the bankrupt must be assisted by an accountant at the estate's expense.

(1) If required by the Assignee, the bankrupt must pay an amount or periodic amounts during the bankruptcy as a contribution towards payment of the bankrupt's debts.

(2) The Assignee may impose conditions in respect of the payments.

(3) Before the Assignee may require the bankrupt to make the payment or payments, the Assignee must—

• (a) have regard to all the circumstances of the bankruptcy and the bankrupt's conduct, earning power, responsibilities, and prospects; and

• (b) make reasonable allowance for the maintenance of the bankrupt and his or her relatives and dependants.

(4) The court may, on the application of the Assignee, order the bankrupt to pay the amount or amounts required by the Assignee.

(5) The court may, on the application of the Assignee, the bankrupt, or any creditor,—

• (a) vary, suspend, or cancel the bankrupt's obligations to make the payments under this section:

• (b) vary, suspend, or discharge any order made under subsection (4):

• (c) remit any arrears owing by the bankrupt.

If the bankrupt defaults in making a payment required under section 147, the onus is on the bankrupt in any proceedings arising out of the default to show that the default was not wilful.

(1) An undischarged bankrupt must not, without the consent of the Assignee or the court, either directly or indirectly,—

• (a) enter into, carry on, or take part in the management or control of any business:

• (b) be employed by a relative of the bankrupt:

• (c) be employed by a company, trust, trustee, or incorporated society that is owned, managed, or controlled by a relative of the bankrupt.

(2) Nothing in this section restricts section 151 of the Companies Act 1993.

(1) The court may issue a search warrant to the Assignee or any other person if there is reason to believe that any relevant property is concealed in a locality.

(2) The warrant may authorise the Assignee or other person named in the warrant, together with any assistants that may be necessary, to—

• (a) enter and search the locality; and

• (b) seize and take possession of any relevant property; and

• (c) if necessary, use force to enter the locality, whether by breaking open doors or otherwise; and

• (d) break open any box or receptacle at the locality, by force if necessary.

(3) In this section and in section 151,—

(1) If authorised by a warrant issued by the court, the Assignee or any other person, together with any assistants that may be necessary,—

• (a) may seize any part of the bankrupt's property in the custody or possession of the bankrupt or of any other person; and

• (b) with a view to seizing the bankrupt's property, may—

  • (i) break open any building or room of the bankrupt where the bankrupt is believed to be; and

  • (ii) break open any building, room, or receptacle of the bankrupt where the bankrupt's property is believed to be; and

  • (iii) seize and take possession of the bankrupt's property found in the building, room, or receptacle.

(2) For the purposes of this section and section 150, if the execution of a warrant takes place without the bankrupt being present, the person executing the warrant must leave in a prominent place at the locality searched a notice that—

• (a) states the date and time when the warrant was executed; and

• (b) states the name of the person who executed it.

(3) For the purposes of this section and section 150, the person executing the warrant must leave with the bankrupt, or leave in a prominent place at the locality searched if the bankrupt is not present, a list of any property seized during the course of the search.

(4) Subsection (3) does not apply if it is impractical to leave a list of property seized or if the bankrupt consents to receiving a list sent in accordance with subsection (5).

(5) If subsection (4) applies, the person executing the search must leave with the notice referred to in subsection (2), or with the bankrupt if the bankrupt is present, a notice stating that—

• (a) relevant property has been seized in the course of the search; and

• (b) within 5 working days after the execution of the warrant, a list of the property seized will be delivered or sent to the bankrupt or left in a prominent position at the place searched.

(6) If subsection (4) applies, the person executing the warrant must ensure that within 5 working days after the execution of the warrant there is delivered or sent to the bankrupt, or left in a prominent position at the place searched, a notice listing the property seized and identifying the place where the property was seized.

(1) The Assignee may require the bankrupt and any of his or her relatives to vacate any land or building that is part of the property vested in the Assignee under the bankruptcy.

(2) If the Assignee's demand is not complied with, the Assignee may apply to a District Court for an order for possession of the land or building.

(1) The bankrupt may at any reasonable time inspect, and take extracts or copies of,—

• (a) the bankrupt's accounting records:

• (b) the bankrupt's answers to questions under section 87:

• (c) the bankrupt's statement of affairs:

• (d) all proofs of debt:

• (e) the minutes of any creditors' meeting:

• (f) the record of any examination of the bankrupt.

(2) The bankrupt's right of inspection under subsection (1) is in addition to any rights that the bankrupt has under the Privacy Act 1993.

(1) After adjudication, the bankrupt, and any person (other than the Assignee) who claims through or under the bankrupt, has no power to—

• (a) recover any property that is part of the bankrupt's estate; or

• (b) give a release or discharge in relation to that property.

(2) Subsection (1) applies subject to the provisions of sections 113 and 114.

(3) Subsection (1) applies whether or not the Assignee has intervened.

(1) After adjudication, the bankrupt must not execute a power of appointment, or any other power vested in the bankrupt, if the result is to defeat or destroy any contingent or other estate or interest in any property to which the bankrupt may otherwise be beneficially entitled at any time before his or her discharge.

(2) The restriction on the bankrupt in subsection (1) applies—

• (a) both before and after the bankrupt obtains a discharge; and

• (b) subject to the provisions of sections 113 and 114.

(1) A bank that ascertains or has reason to believe that a customer of the bank is an undischarged bankrupt must,—

• (a) as soon as possible, notify the Assignee of any account that the customer holds with the bank; and

• (b) not pay any money out of the account, unless subsection (2) applies.

(2) The bank may pay money out of the account if—

• (a) the bank is authorised by an order of the court or instructed by the Assignee to do so; or

• (b) the bank has notified the Assignee of the account and has not, within 1 month of notification, received any instructions from the Assignee.

(3) At the same time that the bank notifies the Assignee under subsection (1)(a), the bank must as soon as possible notify the customer that it has notified the Assignee.

(1) The Assignee may, by written notice, require a bank to search its account records by comparing the names of its customers with the names (including any aliases) of undischarged bankrupts contained in or annexed to the notice.

(2) The bank must search its account records within 5 working days after receipt of the notice.

(1) The bankrupt may choose and retain as the bankrupt's own property certain assets up to a maximum value.

(2) In this section, and in section 159, maximum value means the maximum value of the assets specified in subsection (3) that the bankrupt may retain.

(3) The assets and their maximum value are—

• (a) the bankrupt's necessary tools of trade—the maximum value is fixed in the Assignee's discretion:

• (b) necessary household furniture and effects, including clothing, for the bankrupt and his or her relatives and dependants—the maximum value is fixed in the Assignee's discretion:

• (c) motor vehicle—$5,000.

(4) For the purposes of this section, the value of an asset is the value that the Assignee in his or her discretion places on it.

(5) The Governor-General may, by Order in Council, amend subsection (3)(c) by increasing the maximum value, to take account of any rise in the all groups index number of the Consumer Price Index.

The bankrupt may retain necessary tools of trade and necessary household furniture and effects that are worth more than the maximum value, if the creditors consent by an ordinary resolution.

The retention of an asset by the bankrupt under section 158 or 159 does not affect any rights under a valid charge or hire purchase agreement in respect of the asset.

The fact that the net value of the assets that the bankrupt retains is less than the maximum values specified in section 158 does not give the bankrupt rights in relation to other assets in the bankrupt's estate.

If the bankrupt has died, a relative or dependant of the bankrupt, who has been approved by the Assignee or the court for this purpose, may exercise the right to retain assets under section 158 or 159 for the benefit of the bankrupt's relatives and dependants.

The Assignee may make an allowance out of the property of the bankrupt to the bankrupt or any relative or dependant of the bankrupt for the support of the bankrupt and his or her relatives and dependants.

(1) The Assignee may allow the bankrupt to retain, for the immediate maintenance of the bankrupt and his or her relatives and dependants, any money up to a maximum of $1,000 that the bankrupt has in the bankrupt's possession or in a bank account at the time of adjudication.

(2) The Governor-General may, by Order in Council, amend subsection (1) by increasing the maximum amount that the Assignee may allow the bankrupt to retain, to take account of any rise in the Consumer Price Index.

(1) The Assignee may at any time, before or after a bankrupt's discharge,—

• (a) summon any of the persons listed in subsection (2) to appear before the Assignee, another Assignee, or a District Court Judge to be examined on oath in relation to the bankrupt's property, conduct, or dealings; and

• (b) require that person to produce and surrender to the Assignee or District Court Judge before whom that person appears any document in that person's possession or control that relates to the bankrupt's property, conduct, or dealings.

(2) The persons referred to in subsection (1) are—

• (a) the bankrupt:

• (b) the bankrupt's spouse:

• (c) a person known or suspected to possess any of the bankrupt's property or any document relating to the bankrupt's property, conduct, or dealings:

• (d) a person believed to owe the bankrupt money:

• (e) a person believed by the Assignee to be able to give information regarding—

  • (i) the bankrupt; or

  • (ii) the bankrupt's property, conduct, or dealings:

• (f) a trustee of a trust of which the bankrupt is a settlor or of which the bankrupt is or has been a trustee.

(1) The Assignee or District Court Judge before whom a person (A) is summoned to appear under section 165 may examine A on oath.

(2) The examination must be recorded in writing, and A must sign the written record if required to do so.

(3) If A does not appear at the appointed time and has no reasonable excuse,—

• (a) the District Court Judge or the court may, on the Assignee's application, by warrant, have A arrested and brought for examination by the court; and

• (b) the court may order A to pay all the expenses arising out of A's arrest and examination before the court, if the court thinks that A's evidence was necessary for the purposes of the bankrupt's estate.

A person who is summoned by the Assignee for examination—

• (a) is entitled to be paid the prescribed expenses of attending the examination; and

• (b) does not default in attending if those expenses have not been paid or tendered to him or her before the examination.

A creditor or his or her lawyer may at any reasonable time inspect the record of the examination of a person by a District Court Judge or by the court under section 166.

(1) A person must not, without the court's permission under subsection (2), publish a report of—

• (a) any examination of a person summoned by the Assignee; or

• (b) any matter arising in the course of that examination.

(2) On the Assignee's application, the court may permit publication of a report under the conditions that the court imposes.

(3) A person who contravenes subsection (1) commits an offence and is liable on summary conviction to imprisonment for a term not exceeding 12 months or a fine not exceeding $5,000 or both.

Sections 165 to 169 also apply when the Assignee has been appointed a receiver and manager of all or part of a debtor's property under section 50, and references in sections 165 to 169 to the bankrupt must be read with all necessary modifications as if they were references to the debtor.

In addition to the power contained in section 165(1)(b), the Assignee may, by notice in writing, require the bankrupt, the bankrupt's spouse, or any other person to deliver to the Assignee any document relating to the bankrupt's property, conduct, or dealings in that person's possession or under that person's control.

(1) A person is not entitled as against the Assignee to withhold possession of, or claim a lien over,—

• (a) a deed or instrument that belongs to the bankrupt; or

• (b) business records (which include accounting records, accounts, receipts, bills, invoices, or any other documents relating to the bankrupt's accounts, trade dealings, or business).

(2) However, a person (A) may claim as a preferential creditor under section 274(2)(f) if—

• (a) A has performed services in connection with the bankrupt's business records or a deed or instrument belonging to the bankrupt; and

• (b) A has not been paid, or has not been paid in full, for those services; and

• (c) A would, but for subsection (1), ordinarily have had a lien over the business records, deed, or instrument, as the case may be.

(3) The limit to which A may claim as a preferential creditor under section 274(2)(f) is 10% of the total value of the services stated in subsection (2), up to a maximum amount of $2,000.

(1) The court must hold a public examination of the bankrupt if, before an absolute order for the bankrupt's discharge is made, there is filed with the court either a statement by the Assignee, or a copy of a creditors' ordinary resolution, that the bankrupt should be publicly examined.

(2) The copy of the resolution must be certified by the Assignee or the chairperson of the meeting at which it was passed.

(1) If a public examination of the bankrupt is required, the Assignee must serve the bankrupt with a notice that states—

• (a) that the Assignee's statement or the creditors' resolution has been filed with the court; and

• (b) that the bankrupt is required to be publicly examined; and

• (c) the time and place of the examination.

(2) At least 5 working days before the examination, the Assignee must—

• (a) advertise the examination in the prescribed manner; and

• (b) send a notice of the examination to each creditor.

The court must hold the public examination of the bankrupt as soon as practicable, but not before 5 working days have elapsed after the Assignee has sent the bankrupt a notice under section 174.

Before the public examination of the bankrupt, the Assignee must file in the court a report on—

• (a) the bankrupt's estate; and

• (b) the bankrupt's conduct; and

• (c) all other matters of which the court should be informed.

(1) The bankrupt must attend the examination, and may be examined as to the bankrupt's conduct, dealings, and property.

(2) The bankrupt must be examined on oath and must answer all questions that the court asks the bankrupt, or allows the bankrupt to be asked.

(3) The following persons may examine the bankrupt:

• (a) the Assignee, or counsel for the Assignee:

• (b) any creditor who has proved a claim, or counsel for that creditor.

(4) The bankrupt is not entitled to notice beforehand of who will ask the questions or what the questions will be.

(1) The examination must be recorded in writing as the court directs.

(2) The record of the examination must be—

• (a) read over to, and signed by, the bankrupt; and

• (b) available for inspection by any creditor or that creditor's lawyer at all reasonable times.

(1) The public examination of a bankrupt ends when the court makes an order that the examination is ended.

(2) The court must not make an order that the examination is ended unless it is satisfied that the bankrupt's conduct, dealings, and property have been sufficiently investigated and that the investigation is finished.

If the bankrupt does not appear for the examination at the appointed time and has no reasonable excuse,—

• (a) a District Court Judge or the court may, on the Assignee's application, by warrant, cause the bankrupt to be arrested and brought up for examination by the court; and

• (b) the court may order the bankrupt to pay all the expenses arising out of the arrest and examination before the court, if the court thinks that the bankrupt's evidence was necessary for the purposes of the bankrupt's estate.

(1) A bankrupt who attends a public examination is entitled to be paid the prescribed expenses of attending.

(2) A bankrupt does not default in attending a public examination if the prescribed expenses of attending have not been paid or tendered to him or her before the examination.

(1) If authorised by the court, the assignee or a person appointed by the assignee may exercise the power set out in subsection (2) in relation to a company that is associated with the bankrupt under subpart YB of the Income Tax Act 2007.

(2) The Assignee may—

• (a) examine the documents of the company:

• (b) examine any past or present director, employee, or shareholder of the company on oath about the company's affairs.

(3) The examination of a person under subsection (2)(b) must be recorded in writing, and the person examined must sign the written record if required to do so by the Assignee.

In section 182, associate means any of the following:

• (a) the bankrupt's spouse:

• (b) a lineal ancestor or descendant of the bankrupt:

• (c) the spouse of a lineal ancestor or descendant of the bankrupt:

• (d) a brother or sister of the bankrupt:

• (e) the spouse of a brother or sister of the bankrupt.

(1) A person who is examined or questioned under any power under this Act must answer all questions relating to the bankrupt's conduct, dealings, and property.

(2) A person is not excused from answering a question because the question may incriminate or tend to incriminate that person.

(1) A statement made by a person examined or questioned under this Act in response to a question is not admissible in criminal proceedings against that person.

(2) However, the statement is admissible if—

• (a) the person was examined or questioned under oath and is charged with perjury in relation to the statement; or

• (b) in the case of the bankrupt, the bankrupt is charged with an offence under section 440(1)(b).

(1) A person who is examined under this Act may be represented by a lawyer.

(2) The person may be questioned by his or her lawyer, and any answers form part of the examination.

If the bankrupt is a party to a contract, the Assignee may—

• (a) continue the contract, subject to the terms of the contract and all relevant rules of law; or

• (b) if the contract is onerous property for the purposes of section 117, disclaim it under that section.

(1) This section applies if a contract to which the bankrupt is a party is terminated on the bankrupt's adjudication by the other contracting party in accordance with the contract.

(2) Whatever the contract may say, the Assignee may recover an amount from the other contracting party that the court thinks is just and equitable in all the circumstances, but the amount must not be greater than the amount set out in subsection (3).

(3) The amount that the Assignee may recover must not be greater than C under the formula A − B = C, where—

• (a) A is the amount payable to the bankrupt under the contract; and

• (b) B is the total of—

  • (i) the amount paid to the bankrupt; and

  • (ii) the cost to complete the contract; and

  • (iii) a reasonable penalty for delay in completion of the contract.

(1) This section applies if a person (A) pays money or delivers property—

• (a) to a person who is a bankrupt (B); or

• (b) to a person who is subsequently adjudicated bankrupt (C); or

• (c) to the order of B or C; or

• (d) to an assignee from B or C; or

• (e) to the order of an assignee from B or C.

(2) The payment or delivery is a good discharge to A if—

• (a) the payment or delivery was made before the adjudication of B or C, as the case may be, was advertised; and

• (b) A satisfies the court that—

  • (i) A had no knowledge of the adjudication or that an application for adjudication had been filed; and

  • (ii) the payment or delivery was made in the ordinary course of business or was otherwise made in good faith.

If the bankrupt is jointly liable under a contract with another person, that other person may sue and be sued on the contract without the bankrupt being joined as a party to the proceeding.

The Assignee may recover money paid by a bankrupt, whether before or after adjudication, to his or her lawyer for costs in obtaining an order of adjudication, except for prescribed costs and expenses.

(1) This subpart applies to the following irregular transactions by the bankrupt before adjudication:

• (a) an insolvent transaction:

• (b) an insolvent charge:

• (c) an insolvent gift:

• (d) a disposition of property to which subpart 6 of Part 6 (setting aside of dispositions that prejudice creditors) of the Property Law Act 2007 applies:

• (e) a transaction at undervalue:

• (f) a contribution by the bankrupt to the property of another person.

(2) Broadly, the effect of this subpart is that the irregular transactions listed in subsection (1)(a) to (d) may be cancelled on the Assignee's initiative, and that, in appropriate cases, the Assignee may recover property or money from a party to an irregular transaction with the bankrupt.

A reference in this subpart to 2 years or to 6 months means 2 years or 6 months (as the case may be) extended as follows:

• (a) in the case of adjudication on a creditor's application, extended by the period between the time when the application was served on the bankrupt and the time of adjudication:

• (b) in the case of adjudication on the bankrupt's own application, while a creditor's application is awaiting a hearing, extended by the period between the time when the creditor's application was served on the bankrupt and the time of adjudication.

A transaction by the bankrupt may be cancelled on the Assignee's initiative if it—

• (a) is an insolvent transaction; and

• (b) was made within 2 years immediately before the bankrupt's adjudication.

(1) An insolvent transaction is a transaction by the bankrupt that—

• (a) is entered into at a time when the bankrupt is unable to pay his or her due debts; and

• (b) enables a creditor to receive more towards satisfaction of a debt by the bankrupt than that person would receive, or would be likely to receive, in the bankruptcy.

(2) Transaction, as used in the term insolvent transaction, means any of the following steps by the bankrupt:

• (a) conveying or transferring the bankrupt's property:

• (b) giving a charge over the bankrupt's property:

• (c) incurring an obligation:

• (d) undergoing an execution process:

• (e) paying money (including money paid in accordance with a judgment or an order of a court):

• (f) anything done or omitted to be done for the purpose of entering into the transaction or giving effect to it.

For the purposes of section 194, a transaction that is made within 6 months immediately before the bankrupt's adjudication is presumed, unless the contrary is proved, to be made at a time when the bankrupt is unable to pay his or her due debts.

Where—

• (a) a transaction is, for commercial purposes, an integral part of a continuing business relationship (for example, a running account) between the bankrupt and a creditor (including a relationship to which other persons are parties); and

• (b) in the course of the relationship, the level of the bankrupt's net indebtedness to the creditor is increased and reduced from time to time as the result of a series of transactions forming part of the relationship;

then—

• (c) section 194 applies in relation to all the transactions forming part of the relationship as if they together constituted a single transaction; and

• (d) the transaction referred to in paragraph (a) may only be taken to be an insolvent transaction that may be cancelled by the Assignee if the effect of applying section 194 in accordance with paragraph (c) is that the single transaction referred to in paragraph (c) is taken to be an insolvent transaction that may be cancelled by the Assignee.

A charge over any property of a bankrupt may be cancelled on the Assignee's initiative if—

• (a) the charge was given within 2 years immediately before the bankrupt's adjudication; and

• (b) immediately after the charge was given, the bankrupt was unable to pay his or her due debts.

(1) A charge may not be cancelled under section 198 if the charge secures money actually advanced or paid, or the actual price or value of property sold or supplied, or any other valuable consideration given in good faith, by the secured creditor to the bankrupt at the time when, or at any time after, the bankrupt gave the charge.

(2) A charge may not be cancelled under section 198 if the charge is a substitute for an existing charge that was given by the bankrupt more than 2 years before adjudication, except to the extent that—

• (a) the amount secured by the substituted charge is greater than the amount that was secured by the existing charge; or

• (b) the value of the property subject to the substituted charge at the date of substitution was greater than the value of the property subject to the existing charge at that date.

A bankrupt who gives a charge within 6 months immediately before adjudication is presumed, unless the contrary is proved, to have been unable to pay his or her due debts immediately after giving the charge.

(1) This section applies if the bankrupt, after purchasing property, has within 2 years immediately before adjudication given the seller a charge over the property.

(2) Section 198 does not affect the charge to the extent that it secures unpaid purchase money, whether it is unpaid in relation to the property over which the charge is given or some other property, if the charge was given not more than 15 working days after the date of the sale of the property to the bankrupt.

(1) This section applies if the bankrupt has made a payment or payments to a secured creditor after the bankrupt has given a charge to which section 199 or 201 applies.

(2) The bankrupt's payment or payments must be credited (as far as is necessary) towards—

• (a) repayment of the money actually advanced or paid by the secured creditor to the bankrupt when or after the bankrupt gave the charge; or

• (b) payment of the actual price or value of property sold or supplied by the secured creditor to the bankrupt when or after the bankrupt gave the charge; or

• (c) payment of any other liability of the bankrupt to the secured creditor in respect of any other valuable consideration given in good faith when or after the bankrupt gave the charge.

(3) Nothing in this section applies to any payments received by any registered bank within the meaning of the Reserve Bank of New Zealand Act 1989 in good faith in the ordinary course of business and without negligence.

A charge given by the bankrupt under an agreement to give the charge that was made before the period of 2 years immediately before adjudication may not be cancelled under section 198.

A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if the bankrupt made the gift within 2 years immediately before adjudication.

(1) A gift by a bankrupt to another person may be cancelled on the Assignee's initiative if—

• (a) the bankrupt made the gift within the period beginning 2 years immediately before adjudication and ending 5 years immediately before adjudication; and

• (b) the bankrupt was unable to pay his or her debts.

(2) A bankrupt is presumed to have been unable to pay his or her debts for the purpose of subsection (1)(b) unless the party claiming under the gift proves that the bankrupt was immediately after the making of the gift, or at any time after that up to his or her adjudication, able to pay his or her debts without the aid of the property that the gift is composed of.

(1) The procedure set out in this section applies to the following irregular transactions:

• (a) an insolvent transaction:

• (b) an insolvent charge:

• (c) an insolvent gift:

• (d) a disposition of property to which subpart 6 of Part 6 (setting aside of dispositions that prejudice creditors) of the Property Law Act 2007 applies.

(2) The Assignee who wishes to cancel an irregular transaction to which this section applies must—

• (a) file a notice with the court that meets the requirements set out in subsection (3); and

• (b) serve the notice on—

  • (i) the other party to the transaction; and

  • (ii) any other party from whom the Assignee intends to recover.

(3) The notice must—

• (a) be in writing; and

• (b) state the Assignee's postal, email, and street addresses; and

• (c) specify the irregular transaction to be cancelled; and

• (d) describe the property or state the amount that the Assignee wishes to recover; and

• (e) state that the person named in the notice may object to the cancellation of the transaction by sending to the Assignee a written notice of objection that is received by the Assignee at his or her postal, email, or street address within 20 working days after the Assignee's notice has been served on that person; and

• (f) state that the written notice of objection must contain the reasons for objecting; and

• (g) state that the transaction will be cancelled as against the person named in the notice if that person does not object; and

• (h) state that if the person named in the notice does object, the Assignee may apply to the court for the transaction to be cancelled.

(4) The irregular transaction is automatically cancelled as against the person on whom the Assignee has served the Assignee's notice, if that person has not objected by sending to the Assignee a written notice of objection that is received by the Assignee at his or her postal, email, or street address within 20 working days after the Assignee's notice has been served on that person.

(5) The notice of objection must state the reasons for objecting.

(6) An irregular transaction that is not automatically cancelled may still be cancelled by the court on the Assignee's application.

(1) On the cancellation of an irregular transaction under which property of the bankrupt, or an interest in property of the bankrupt, was transferred the court may make an order for—

• (a) the retransfer to the Assignee of the property or interest in the property; or

• (b) payment to the Assignee of a sum of money that the court thinks appropriate, but the sum must not be greater than the value of the property or interest in the property when the transaction was cancelled.

(2) The court may make any other order for the purpose of giving effect to an order under subsection (1).

(3) An order under subsection (1) is in addition to any other rights and remedies available to the Assignee, and this section does not restrict those rights.

The court must not make an order under section 207 against a person (A) if A proves that when A received the property or interest in the property—

• (a) A acted in good faith; and

• (b) a reasonable person in A's position would not have suspected, and A did not have reasonable grounds for suspecting, that,—

  • (i) in the case of an insolvent gift, the bankrupt was, or would become, unable to pay his or her debts without the aid of the property that the gift is composed of; or

  • (ii) in the case of any other irregular transaction referred to in section 206(1), the bankrupt was, or would become, unable to pay his or her due debts; and