Corporations and Cross-Border Insolvency

Corporations

Subject to some limitations, each of the Federal Court, Federal Circuit and Family Court of Australia, and the Supreme Courts of the States and Territories have concurrent jurisdiction under the Corporations Act 2001 (Cth) and Australian Securities and Investments Commission Act 2001 (Cth) to deal with a range of civil proceedings and matters.

In 1999, the Council of Chief Justices of Australia and New Zealand (Council) adopted, on the recommendation of the Harmonisation of Rules Committee (Committee), harmonised corporations rules and forms.  These rules were initially made as the Corporations Law Rules 2000 but later renamed the Federal Court (Corporations) Rules 2000 (Cth) (Model Corporations Rules) and took effect on 1 January 2000.  

The harmonised rules cover the following topic areas:

• Proceedings generally 
• Compromises and arrangements in relation to Part 5.1 bodies 
• Process for seeking an inquiry or order in relation to controller, registered liquidator or external administration 
• Winding up proceedings 
• Provisional liquidators 
• Liquidators 
• Special managers 
• Remuneration of office-holders 
• Winding up generally 
• Inquiries, examinations, investigations, and orders against person concerned with corporation 
• Warrants 
• Takeovers, acquisitions of shares etc. and securities 
• Appeals authorised by the Corporations Act 
• Proceedings under the ASIC Act 
• Proceedings under the Cross-Border Insolvency Act 
• Powers of Registrars/Associate Judges/Masters

Harmonised rules, including the Model Corporations Rules, have been adopted by the following jurisdictions:

The Council has since adopted, on the recommendations of the Committee, amendments to those harmonised rules consequential to the amendment to the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and legislative instruments made under those Acts. Additional amendments have also been adopted by the Council as a result of developments in case law as well as practice and procedure more generally. 

Cross-Border Insolvency

The Federal Court and the Supreme Courts of the States and Territories also have concurrent jurisdiction under the Cross-Border Insolvency Act 2008 (Cth) (Cross-Border Insolvency Act). The Cross-Border Insolvency Act gives force of law in Australia to the United National Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency (1997) (Model Law). The Cross-Border Insolvency Act applies to foreign proceedings, proceedings under the Bankruptcy Act 1966 (Cth), and Chapter 5 (other than Parts 5.2 and 5.4A), section 601CL and Schedule 2 of the Corporations Act 2001 (Cth). The Model Law is set out in Schedule 1 to the Cross-Border Insolvency Act. 

In relation to proceedings involving a debtor who is an individual, the Cross-Border Insolvency Act specifies that only the Federal Court of Australia has jurisdiction to perform functions referred to in the Model Law. In relation to proceedings involving a debtor other than an individual, the Cross-Border Insolvency Act stipulates that the Federal Court of Australia and the Supreme Courts of States and Territories have jurisdiction to perform functions referred to in the Model Law.

In 2008, the Council adopted, on the recommendation of the Committee, the addition of Division 15A to the Model Corporations Rules, and the addition of Part 14 to the Federal Court (Bankruptcy) Rules 2005 (Cth). The Federal Court (Bankruptcy) Rules 2005 have since been replaced by the Federal Court (Bankruptcy) Rules 2016 (Cth), but Part 14 continues to apply to proceedings in the Federal Court under the Cross-Border Insolvency Act involving a debtor who is an individual.  

In relation to proceedings involving a debtor other than an individual, States and Territories have adopted harmonised rules that cover the following topic areas:

• Expressions used in the Cross-Border Insolvency Act
• Application for recognition
• Application for provision relief under Article 19 of the Model Law
• Registered liquidator’s consent to act
• Notice of filing of application for recognition
• Notice of order for recognition, withdrawal etc.
• Relief after recognition
• Application to modify or terminate an order for recognition or other relief

Harmonised rules on cross-border insolvency have been adopted in States and Territories as follows:

Whilst New Zealand has enacted the Model Law into domestic legislation in the form of the Insolvency (Cross-border) Act 2006 with certain changes made for its application to New Zealand, it has not adopted harmonised rules.