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27 1988

BANKRUPTCY ACT, 1988

PART III

Administration of Property

Effect of Adjudication on Bankrupt's Property

Vesting of property in Official Assignee.

(1857, ss. 267, 268, 273)

44. —(1) Where a person is adjudicated bankrupt, then, subject to the provisions of this Act, all property belonging to that person shall on the date of adjudication vest in the Official Assignee for the benefit of the creditors of the bankrupt.

(2) Subject to the provisions of this Act, the title of the Official Assignee to any property which vests in him by virtue of subsection (1) shall not commence at any date earlier than the date of adjudication.

(3) The property to which subsection (1) applies includes—

(a) all powers vested in the bankrupt which he might legally exercise in relation to any property immediately before the date of adjudication;

(b) all property which was the subject of any conveyance or transfer which sections 57 , 58 and 59 declare void as against the Official Assignee, subject to the rights of any persons which are preserved by those sections.

(4) The property to which subsection (1) applies does not include—

(a) property held by the bankrupt in trust for any other person, or

(b) any sum which vests in the Official Assignee under section 7 (1) (a) of the Auctioneers and House Agents Act, 1967 , or section 30 (i) of the Central Bank Act, 1971 .

(5) Without prejudice to any existing principle or rule of law or equity, established practice or procedure in relation to damages or compensation recovered or recoverable by a bankrupt for personal injury or loss suffered by him, property which is acquired by or devolves on a bankrupt before the discharge or annulment of the adjudication order (in this Act called “after-acquired property”) shall vest in the Official Assignee if and when he claims it.

Excepted articles.

(1857, ss. 298, 299)

45. —(1) A bankrupt shall be entitled to retain, as excepted articles, such articles of clothing, household furniture, bedding, tools or equipment of his trade or occupation or other like necessaries for himself, his wife, children and dependent relatives residing with him, as he may select, not exceeding in value £2,500 or such further amount as the Court on an application by the bankrupt may allow.

(2) Where a bankrupt, after selecting the items constituting the excepted articles, requests the Official Assignee, in writing, not to dispose of the remainder of any such articles as are referred to in subsection (1) the Official Assignee shall not dispose thereof except in accordance with an order of the Court.

(3) The Court may, on the application of the bankrupt or the Official Assignee, in relation to the remainder of such articles—

(a) postpone the removal and sale thereof;

(b) permit them to remain in the use of the bankrupt;

(c) at any time, order them to be taken by or on behalf of the Official Assignee and to be sold for the benefit of the creditors.

Certificate of vesting of property in Official Assignee.

(cf. 1857, s. 269)

46. —(1) Where, according to law, any conveyance of land is required to be registered and such land vests in the Official Assignee under this Part, a certificate under the seal of the Court shall be issued to him as evidence of the vesting and he shall cause the certificate to be registered as soon as may be as if it were a conveyance, and registration of the certificate shall have the like effect to all intents and purposes as registration of a conveyance would have had.

(2) The title of any purchaser of any such land for valuable consideration, in good faith and without notice of the adjudication, who had duly registered the conveyance before the registration of the certificate shall not be invalidated by reason of the adjudication unless the certificate is registered within two months after the date of the adjudication.

Vesting in Official Assignee of certain money and securities.

(New)

47. —Notwithstanding any provision in any other enactment—

(a) money in the Post Office Savings Bank or in a trustee savings bank to which a bankrupt is entitled, or

(b) securities issued through An Post by the Minister for Finance under his statutory borrowing powers and to which a bankrupt is entitled,

shall, on the adjudication of the bankrupt, vest in the Official Assignee in the same manner as any other property.

Limitation of Official Assignee's powers in relation to copyright.

(New)

48. —Where the property of a bankrupt comprises the copyright in any work or any interest in such copyright and he is liable to pay to the author royalties or a share of the profits in respect thereof—

(a) the Official Assignee shall not be entitled to sell or authorise the sale of any copies of the work, or to perform or authorise the performance of the work, except on the terms of paying to the author such sums by way of royalty or share of the profits as would have been payable by the bankrupt, and

(b) he shall not be entitled to assign the right or transfer the interest or to grant any interest in the right by licence, except with the consent of the author or of the Court and upon terms which will secure to the author payments by way of royalty or share of the profits at a rate not less than that which the bankrupt was liable to pay.

Restrictive clause in agreement or lease.

(New)

49. —(1) Every covenant or provision for forfeiture of a lease on the bankruptcy of the lessee shall be void as against the Official Assignee.

(2) A clause in a hire purchase agreement which purports to terminate the agreement on the bankruptcy of the hirer shall be void as against the Official Assignee.

Execution against debtor's property before adjudication.

(cf. 1872, s. 54)

50. —(1) Where goods or a leasehold interest in land belonging to a debtor have been seized under an execution order and sold, or where money has been paid in part or full satisfaction of the execution either to the sheriff or county registrar or to the execution creditor in order to avoid seizure or sale under such execution, the sheriff, county registrar or execution creditor shall retain the proceeds of sale or the money so paid, for a period of twenty-one days.

(2) If within that period the sheriff, county registrar or execution creditor receives notice of the adjudication of the debtor, he shall surrender the property, or pay over the proceeds of sale thereof or any money paid in satisfaction of the execution, to the Official Assignee who shall be entitled to retain the property, proceeds or money, as the case may be, as against the execution creditor.

(3) An execution levied by seizure of any such property belonging to the debtor shall not be invalid by reason only of its being an act of bankruptcy and a person who purchases the property in good faith under a sale by the sheriff or county registrar shall, as against the Official Assignee, acquire a good title thereto.

(4) Where a sheriff or county registrar, without notice of the adjudication of the debtor, pays the proceeds of sale or other money retained by him pursuant to subsection (1) to the execution creditor after the expiration of twenty-one days, he shall not be liable to the Official Assignee in respect of the payment.

(5) Where property is surrendered or proceeds of sale or other money paid over to the Official Assignee, the costs of the execution shall be a first charge thereon and the Official Assignee may sell the whole or part of the property for the purpose of satisfying the charge.

Priority of judgment mortgage.

(1857, s. 331)

51. —(1) A judgment creditor who registers an affidavit of his judgment in accordance with sections 6 and 7 of the Judgment Mortgage (Ireland) Act, 1850, shall not, by reason of such registration, be entitled to any priority or preference over simple contract creditors in the event of the person against whom such affidavit is registered being adjudicated bankrupt, unless the affidavit is registered at least three months before the date of the adjudication.

(2) The reference in section 284 (2) of the Companies Act, 1963, to section 331 of the Irish Bankrupt and Insolvent Act, 1857 (repealed by this Act) shall be construed as a reference to subsection (1) and accordingly the reference in the said section 284 (2) to the filing of the petition shall be read as a reference to the date of the adjudication.

Order to put purchaser in possession.

(1872, s. 75)

52. —Where land belonging to a bankrupt or arranging debtor has been sold under the provisions of this Act or by or under the direction of the Court, the Court may, on the application of the purchaser, issue an order directing the appropriate sheriff or county registrar to put the purchaser into possession of all the land not in the occupation of lessees, under-lessees or tenants, subject to whose interests the sale has been made and who have attorned to the purchaser within a time to be limited in the order, and the order shall be executed in like manner as an order for the delivery of possession.

Permission to mortgagee to bid at sale.

(1857, s. 316)

53. —The mortgagee of any property of a bankrupt or arranging debtor may, with the leave of the Court, bid and purchase at the sale of the property.

Discharge of persons delivering property, etc., to Official Assignee.

(cf. 1857, s.281)

54. —A person—

(a) from whom the Official Assignee recovers any property of a bankrupt, or

(b) who, without legal proceedings, in good faith delivers up to the Official Assignee possession of any such property, or

(c) who pays any debt owed to a bankrupt and claimed by the Official Assignee,

shall, notwithstanding that the adjudication is subsequently annulled or discharged, be released from all claims by the bankrupt in respect of such property or debt.

Title to property sold not to be invalidated.

(1857, s. 323)

55. —The title to any property sold in bankruptcy shall not be invalidated by the bankrupt or any person claiming under him by reason only of any defect in any proceedings under this Act.

Disclaimer of onerous property.

(1872, ss. 97 and 98; 33/1963, s. 290)

56. —(1) Subject to subsections (2) and (5), where any of the property (other than after-acquired property) of a bankrupt consists of land of any tenure burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts, or of any other property which is unsaleable or not readily saleable by reason of its binding the possessor thereof to the performance of any onerous act or to the payment of any sum of money, the Official Assignee, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, with the leave of the Court and subject to the provisions of this section, by writing signed by him, at any time within twelve months after the date of adjudication or such extended period as may be allowed by the Court, disclaim the property.

(2) Where any such property as aforesaid has not come to the knowledge of the Official Assignee within one month after the date of the adjudication, the power under this section of disclaiming the property may be exercised at any time within twelve months after he has become aware thereof or such extended period as may be allowed by the Court.

(3) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests and liabilities of the bankrupt and his property in or in respect of the property disclaimed, and shall also discharge the Official Assignee from all personal liability in respect of the property disclaimed as from the date when the property vested in him, but shall not, except so far as is necessary for the purpose of releasing the bankrupt and his property and the Official Assignee from liability, affect the rights or liabilities of any other person.

(4) The Court, before or on granting leave to disclaim, may require the Official Assignee to give such notices to persons interested and impose such terms as a condition of granting leave, and make such other order in the matter as the Court thinks just.

(5) The Official Assignee shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any persons interested in the property requiring him to decide whether he will or will not disclaim, and the Official Assignee has not, within a period of twenty-eight days after the receipt of the application or such further period as may be allowed by the Court, given notice to the applicant that he intends to apply to the Court for leave to disclaim; and, in the case of a contract, if the Official Assignee, after such application as aforesaid, does not within the said period or extended period disclaim the contract, he shall be deemed to have adopted it.

(6) The Court may, on the application of any person who is, as against the Official Assignee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise as the Court thinks just, and any damages payable under the order to any such person shall be deemed to be a debt proved and admitted in the bankruptcy.

(7) Subject to subsection (8), the Court may, on an application by any person who either claims any interest in any disclaimed property or is under any liability not discharged by this Act in respect of any disclaimed property and on hearing any such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to any person entitled thereto, or to whom it may seem just that the property should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the Court may think just, and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose.

(8) Where the property disclaimed is of a leasehold nature, the Court shall not make a vesting order in favour of any person claiming under the bankrupt, whether as under-lessee or as mortgagee by demise, except upon the terms of making that person—

(a) subject to the same liabilities and obligations as those to which the bankrupt was subject under the lease in respect of the property at the date of the adjudication; or

(b) if the Court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date;

and in either event (if the case so requires), as if the lease had comprised only the property comprised in the vesting order, and any mortgagee or under-lessee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property and, if there is no person claiming under the bankrupt who is willing to accept an order upon such terms, the Court shall have power to vest the estate and interest of the bankrupt in the property in any person liable either personally or in a representative character, and either alone or jointly with the bankrupt, to perform the lessee's covenants in the lease, freed and discharged from all estates, encumbrances and interests created therein by the bankrupt.

(9) Any person damaged by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the amount of the damages, and may accordingly prove the amount as a debt in the bankruptcy.

Fraudulent and Voluntary Conveyances

Avoidance of fraudulent preferences.

(1872, s. 53; 33/1963, sch. 11, para. 1.)

57. —(1) Every conveyance or transfer of property or charge made thereon, every payment made, every obligation incurred and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor or of any person in trust for any creditor, with a view to giving such creditor, or any surety or guarantor for the debt due to such creditor, a preference over the other creditors, shall, if the person making, incurring, taking or suffering the same is adjudicated bankrupt within six months after the date of making, incurring, taking or suffering the same, be deemed fraudulent and void as against the Official Assignee; but this section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the bankrupt.

(2) (a) Where a person is adjudicated bankrupt and anything made or done is void under subsection (1) or was void under the corresponding provisions of the law in force immediately before the commencement of this Act as a fraudulent preference of a person interested in property mortgaged or charged to secure the bankrupt's debt, then (without prejudice to any rights or liabilities arising apart from this section) the person preferred shall be subject to the same liabilities and shall have the same rights as if he had undertaken to be personally liable as surety for the debt to the extent of the charge on the property or the value of his interest, whichever is the less.

(b) The value of the said person's interest shall be determined as at the date of the transaction constituting the fraudulent preference, and shall be determined as if the interest were free of all encumbrances other than those to which the charge for the bankrupt's debt was then subject.

(c) On any application made to the Court in relation to any payment on the ground that the payment was a fraudulent preference of a surety or guarantor, the Court shall have jurisdiction to determine any questions relating to the payment arising between the person to whom the payment was made and the surety or guarantor, and to grant relief in respect thereof notwithstanding that it is not necessary so to do for the purposes of the bankruptcy, and for that purpose may give leave to bring in the surety or guarantor as a third party as in the case of an action for the recovery of the sum paid.

(d) Paragraph (c) shall apply, with the necessary modifications, in relation to transactions other than the payment of money as it applies to payments.

Avoidance of certain transactions.

(New)

58. —(1) If within three months before he is adjudicated bankrupt a debtor commits an act of bankruptcy and thereafter either sells any of his property at a price which, in the opinion of the Court, is substantially below its market value or enters into or is a party to any other transaction which, in the opinion of the Court, has the effect of substantially reducing the sum available for distribution to the creditors, such transaction shall be void as against the Official Assignee, unless the transaction was bona fide entered into and the other party had not at the time of the transaction notice of any prior act of bankruptcy committed by the bankrupt.

(2) Subsection (1) shall not affect the rights of any person making title in good faith and for valuable consideration through or under a person (other than the bankrupt) who is party to a transaction mentioned therein.

(3) Subsection (1) shall not apply to any transaction mentioned in section 57 (1) or 59 .

Avoidance of certain settlements.

(1857, s. 314; 1872, s. 52)

59. —(1) Any settlement of property, not being a settlement made before and in consideration of marriage, or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, shall—

(a) if the settlor is adjudicated bankrupt within two years after the date of the settlement, be void as against the Official Assignee, and

(b) if the settlor is adjudicated bankrupt at any subsequent time within five years after the date of the settlement, be void as against the Official Assignee unless the parties claiming under the settlement prove that the settlor was, at the time of making the settlement, able to pay all his debts without the aid of the property comprised in the settlement and that the interest of the settlor in such property passed to the trustee of such settlement on the execution thereof.

(2) A covenant or contract made by any person (in this section called the settlor) in consideration of his or her marriage, either for the future payment of money for the benefit of the settlor's spouse or children, or for the future settlement, on or for the settlor's spouse or children, of property wherein the settlor had not at the date of the marriage any estate or interest, whether vested or contingent, in possession or remainder, shall, if the settlor is adjudicated bankrupt and the covenant or contract has not been executed at the date of the adjudication, be void as against the Official Assignee, except so far as it enables the persons entitled under the covenant or contract to claim for dividend in the settlor's bankruptcy under or in respect of the covenant or contract, but any such claim to dividend shall be postponed until all the claims of the other creditors for valuable consideration in money or money's worth have been satisfied.

(3) Any payment of money (not being payment of premiums on a policy of life assurance) or any transfer of property made by the settlor in pursuance of a covenant or contract to which subsection (2) applies shall be void as against the Official Assignee in the settlor's bankruptcy, unless the persons to whom the payment or transfer was made prove that:

(a) the payment or transfer was made more than two years before the date of the adjudication of the settlor, or

(b) at the date of the payment or transfer, the settlor was able to pay all his debts without the aid of the money so paid or the property so transferred, or

(c) the payment or transfer was made in pursuance of a covenant or contract to pay or transfer money or property expected to come to the settlor from or on the death of a particular person named in the covenant or contract, and was made within three months after the money or property came into the possession or under the control of the settlor;

but, in the event of any such payment or transfer being declared void, the persons to whom it was made shall be entitled to claim for dividend under or in respect of the covenant or contract in like manner as if it had not been executed at the date of the adjudication.

(4) In this section “settlement” includes any conveyance or transfer of property.

Management Provisions

Office of the Official Assignee.

60. —(1) The Official Assignee shall have and exercise such powers and authorities and perform such duties and functions as are from time to time conferred on or assigned to him by statute (including this Act) or rules of court.

(2) There shall be employed in the Office of the Official Assignee an inspector (in this Act referred to as “the Bankruptcy Inspector”) and paragraph 22 of the Eighth Schedule to the Courts (Supplemental Provisions) Act, 1961 , shall apply accordingly.

(3) The person who, immediately before the commencement of this Act, held office as Messenger of the Court shall, on such commencement, become and be the Bankruptcy Inspector.

Functions of Official Assignee in bankruptcy and vesting arrangements.

(New)

61. —(1) This section applies to every bankruptcy matter and vesting arrangement.

(2) The functions of the Official Assignee are to get in and realise the property, to ascertain the debts and liabilities and to distribute the assets in accordance with the provisions of this Act.

(3) In the performance of his functions the Official Assignee shall, in particular, have power—

(a) to sell the property by public auction or private contract, with power to transfer the whole thereof to any person or to sell the same in lots and for the purpose of selling land to carry out such sale by fee farm grant, sub fee farm grant, lease, sub-lease or otherwise and to sell any rent reserved on any such grant or any reversion expectant upon the determination of any such lease,

(b) to make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging themselves to have any claim present or future, certain or contingent, ascertained or sounding only in damages whereby the bankrupt or arranging debtor may be rendered liable,

(c) to compromise all debts and liabilities capable of resulting in debts and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the bankrupt or arranging debtor and any debtor and all questions in any way relating to or affecting the assets or the proceedings on such terms as may be agreed and take any security for the discharge of any debt, liability or claim, and give a complete discharge in respect thereof,

(d) to institute, continue or defend any proceedings relating to the property,

(e) to refer any dispute concerning the property to arbitration under the terms of section 11 of the Arbitration Act, 1954 ,

(f) to mortgage or pledge any property to raise any money requisite,

(g) to take out in his official name without being required to give security, letters of administration to any estate on the administration of which the bankrupt or arranging debtor would benefit,

(h) to agree a sum for costs where the Court so directs or where he considers that the amount which would be allowed on taxation would not exceed £1,000,

(i) to agree the charges of accountants, auctioneers, brokers and other persons,

(j) to ascertain and certify to the Court the amount due in respect of a mortgage debt and the due priority thereof with power to the Court to vary such certificate,

(k) to draw out of the account referred to in section 84 (1) any sum not exceeding £100 by way of indemnity in respect of costs incurred by him.

(4) Notwithstanding any provision to the contrary contained in subsection (3), no disposition of property of a bankrupt, arranging debtor or person dying insolvent, which comprises a family home within the meaning of the Family Home Protection Act, 1976, shall be made without the prior sanction of the Court, and any disposition made without such sanction shall be void.

(5) On an application by the Official Assignee under this section for an order for the sale of a family home, the Court, notwithstanding anything contained in this or any other enactment, shall have power to order postponement of the sale of the family home having regard to the interests of the creditors and of the spouse and dependants of the bankrupt as well as to all the circumstances of the case.

(6) The Official Assignee may in case of doubt or difficulty seek the directions of the Court in connection with the affairs of any bankrupt or arranging debtor.

(7) The exercise by the Official Assignee of the powers conferred by this section shall be subject to the control of the Court, and any creditor or other person who in the opinion of the Court has an interest may apply to the Court in relation to the exercise or proposed exercise of those powers.

(8) The powers and functions conferred on the Official Assignee by this section may be exercised and performed—

(a) in the case of an adjudication founded on a petition of a debtor, on adjudication,

(b) in the case of an adjudication founded on a petition by a creditor, on the expiration of the time for showing cause,

(c) in the case of a vesting arrangement, on approval of the proposal by the Court.

Bankruptcy Inspector and assistants.

(1857, s. 62)

62. —(1) The Bankruptcy Inspector and his assistants shall follow the instructions of the Official Assignee, subject to the directions and control of the Court.

(2) Subject to the provisions of this Act, it shall be the duty of the Bankruptcy Inspector or his assistants—

(a) to seize the property of the bankrupt pursuant to a warrant issued by the Court under section 27 ,

(b) to take an inventory of and report on the bankrupt's property,

(c) to take possession of the property of an arranging debtor pursuant to section 100 , and to take an inventory of and report on the property,

(d) to do such other things as may be directed by the Court or the Official Assignee.

Protection of Official Assignee.

(1857, s. 65)

63. —The Official Assignee shall not be liable—

(a) by reason of any of the matters on which an adjudication was grounded being insufficient to support the adjudication,

(b) in respect of his receipt of any property, provided he has not dealt with the property otherwise than as directed by the Court or as required by this Act or by rules of court.

Power of Official Assignee to bar entail.

(1857, s. 340; 1872, s. 50)

64. —The Official Assignee may, with the sanction of the Court, deal with any land to which the bankrupt is beneficially entitled as tenant in tail in the same manner as the bankrupt might have dealt with it had he not been adjudicated; and sections 49 to 61 of the Fines and Recoveries (Ireland) Act, 1834 (so far as they are applicable) shall extend and apply to proceedings in bankruptcy under this Act as if those sections were herein re-enacted and in terms made applicable to those proceedings.

Power of Official Assignee to appropriate part of bankrupt's income.

(New: cf. 1857, s. 319; 1872, s. 51)

65. —(1) Notwithstanding any provision to the contrary in any other enactment, whenever a bankrupt, whether self-employed or not, is in receipt of or is entitled to receive any salary, income, emolument or pension, the Court may, from time to time, on the application of the Official Assignee, make such order directed to the bankrupt and any person from whom the bankrupt is entitled to receive any such salary, income, emolument or pension for the payment to the Official Assignee of all or part of such salary, income, emolument or pension, subject to such conditions as to payment as the Court may specify in the order having regard to the family responsibilities and personal situation of the bankrupt.

(2) The Court may at any time, on the application of any interested person, vary an order under subsection (1), having regard to any changes in the family responsibilities or personal situation of the bankrupt.

Delivery of property to Official Assignee.

(cf. 1857, s. 324)

66. —Every person shall, on request, deliver up to the Official Assignee all money or securities for money in such person's possession or control which he is not by law entitled to retain as against the bankrupt or the Official Assignee.

Right of Official Assignee to transfer stocks or shares.

(cf. 1857, s. 320)

67. —Where any part of the property of a bankrupt, or of an arranging debtor under a vesting arrangement, consists of stocks or shares, the Official Assignee may exercise the right to transfer them to the same extent as the bankrupt or arranging debtor could have exercised it but for the adjudication or vesting arrangement.

Right of Official Assignee to inspect goods pawned or pledged.

(New)

68. —Where any goods of a bankrupt are held by any person by way of pledge, pawn or other security, the Official Assignee may give notice in writing to the holder of his intention to inspect the goods and, where such notice has been given, the holder shall not be entitled to realise his security until he has given the Official Assignee a reasonable opportunity of inspecting the goods and of exercising his right of redemption if he thinks fit to do so.

Receipt of property of bankrupt.

(cf. 1857, ss. 60, 61)

69. —(1) The Official Assignee shall be assignee of each bankrupt's estate and act with the creditors' assignee, if any.

(2) Except where otherwise directed by the Court, the property of every bankrupt, and the income and proceeds thereof, shall be possessed and received by the Official Assignee.

(3) All money and securities received by the Official Assignee, being part of a bankrupt's estate, shall be forthwith lodged by him in the Central Bank of Ireland and shall be kept there to the credit of the Official Assignee subject to the provisions of this Act and rules of court and to the directions of the Court.

(4) Subject to section 84 , all money and securities which, immediately before the commencement of this Act, stood to the credit of bank accounts in bankruptcy or arrangement matters shall be dealt with pursuant to rules of court.

(5) The Official Assignee, with the leave of the Court, may from time to time invest the whole or any part of any money referred to in this section, and any interest thereon shall be paid into the appropriate bank accounts.

Claim to property in possession of bankrupt.

(New)

70. —(1) Where a person claims any property which is in the possession of the bankrupt at the date of adjudication he shall file with the Official Assignee a claim verified by affidavit.

(2) The Official Assignee may give notice in writing to any person to prove his claim to property which is in the possession of the bankrupt at the date of adjudication and, unless within one month after the service of the notice that person files with the Official Assignee a claim verified by affidavit, the Official Assignee may, with the sanction of the Court, sell or dispose of the property free of any right or interest therein of that person.

Allowances to bankrupt.

(cf. 1857, s. 301)

71. —The Court may make to the bankrupt out of his estate such allowances as the Court thinks proper in the special circumstances of the case.

Redirection of letters, etc., addressed to bankrupt.

(1857, s. 312)

72. —Where a debtor is adjudicated bankrupt the Court, on the application of the Official Assignee, may from time to time order that for such time, not exceeding three months, as the Court thinks fit letters, telegrams and postal packets addressed to the bankrupt at any place mentioned in the order shall, on such terms and subject to such conditions as the Court thinks fit, be redirected, sent or delivered to the Official Assignee as the Court directs.

Appointment of receivers and managers.

(1872, s. 68)

73. —The Court may, at any time after adjudication or after the granting of an order for protection, appoint a receiver or manager of the whole or part of the property of the bankrupt or arranging debtor and may direct that the receiver or manager take immediate possession of such property or any part thereof.

Joint and separate dividends.

(cf. 1857, s. 266)

74. —If one or more of the partners of a firm is a bankrupt, any creditor of the firm shall be entitled to prove his debt or be admitted as a creditor for the purpose of voting in the choice and appointment of a creditors' assignee but such creditor shall not receive any dividend out of the separate estate of the bankrupt until all the separate creditors shall have received the full amount of their respective debts.

Debts provable in bankruptcy and arrangements.

(cf. 1857, ss. 247, 249, 252 to 258; 1872, ss. 45-47)

75. —(1) Debts and liabilities, present or future, certain or contingent, by reason of any obligation incurred by the bankrupt or arranging debtor before the date of adjudication or order for protection and claims in the nature of unliquidated damages for which the bankrupt or arranging debtor is liable at that date by reason of a wrong within the meaning of the Civil Liability Act, 1961 , shall be provable in the bankruptcy or arrangement.

(2) Where interest or any pecuniary consideration in lieu of interest is reserved or agreed for on a debt which is overdue at the date of adjudication, the creditor shall be entitled to prove or be admitted as a creditor for such interest or consideration up to the date of adjudication.

(3) Where all necessary parties agree, an order for assessment of damages or contribution under section 61 (2) of the Civil Liability Act, 1961 , may be made by the Court, notwithstanding that it may not be the court by or before which the claim for damages or contribution falls to be determined.

(4) An estimate may be made by the Court of the value of any debt which, by reason of it being subject to any contingency or for any other reason, does not bear a certain value and the amount of the estimate shall be proved as a debt.

Proof of debts.

(cf. 1857, s. 246 in pt.)

76. —The provisions of the First Schedule shall apply in relation to the proof of debts.

Bankruptcy of mercantile agent.

(New)

77. —Section 12 (2) of the Factors Act, 1889 (which regulates the rights of an owner of goods in the case of the bankruptcy of a mercantile agent to whom they have been entrusted) shall have effect with the substitution for the reference to a trustee in bankruptcy of a reference to the Official Assignee.

Proof for costs of judgment.

(1857, s. 261)

78. —Where a party to any cause or matter has obtained a judgment or order against a person who is afterwards adjudicated bankrupt or is granted an order for protection for any debt for which he proves or is admitted a creditor, he shall also be entitled to prove or be admitted a creditor for the costs of the judgment or order, whether or not the costs have been taxed or ascertained at the date of the adjudication or order for protection.

Disallowance of debts already proved.

(1857, s. 263)

79. —The Court may, on the application of the Official Assignee or any creditor or the bankrupt or arranging debtor, disallow, in whole or in part, any debt already proved or admitted.

Distribution of Estate

Priority of expenses, etc.

(New)

80. —The expenses, fees and costs of the bankruptcy shall be payable in priority to the liabilities of the bankrupt in such order as may be prescribed.

Preferential payments.

(1889, ss. 4,6; 33/1963, s. 285)

81. —(1) In the distribution of the property of a bankrupt there shall be paid in priority to all other debts—

(a) all local rates due from the bankrupt at the date of the order of adjudication, and having become due and payable within twelve months next before that date, and all property or income tax assessed on the bankrupt up to the 5th day of April next before the date of the order of adjudication, and not exceeding in the whole one year's assessment;

(b) all wages or salary (whether or not earned wholly or in part by way of commission) of any clerk or servant in respect of services rendered to the bankrupt during the four months next before the date of the order of adjudication not exceeding £2,500;

(c) all wages not exceeding £2,500 of any labourer or workman (whether payable for time or for piece work) in respect of services rendered to the bankrupt during the four months next before the date of the order of adjudication: provided that, where any farm labourer has entered into a contract for the payment of a portion of his wages in a lump sum at the end of the year or other shorter term of hiring, the priority under this section shall extend to the whole of such sum, or a part thereof, as the Court may decide to be due under the contract proportionate to the time of service up to the date of the order of adjudication;

(d) all accrued holiday remuneration becoming payable to any clerk, servant, workman or labourer (or in the case of his death to any other person in his right) on the termination of his employment before or by the effect of the adjudication order;

(e) all sums due to any employee pursuant to any scheme or arrangement for the provision of payments to the employee while he is absent from employment owing to ill health;

(f) any payments due by the bankrupt pursuant to any scheme or arrangement for the provision of superannuation benefits to or in respect of employees of the bankrupt whether such payments are due in respect of the bankrupt's contribution to that scheme or under that arrangement or in respect of such contributions payable by the employees to the bankrupt under any such scheme or arrangement which have been deducted from the wages or salaries of employees;

(g) any debt, payment or contribution which by virtue of any provision in any enactment in operation before the commencement of this Act was included in the debts to which section 4 of the Preferential Payments in Bankruptcy (Ireland) Act, 1889, gave priority; and any reference to the said section 4 in any such enactment shall be construed as a reference to this subsection.

(2) The foregoing debts shall rank equally between themselves and be paid in full unless the property of the bankrupt is insufficient to meet them, in which case they shall abate in equal proportions between themselves.

(3) Subject to the retention of such sums as may be necessary for the costs and expenses of administration or otherwise, the foregoing debts shall be discharged forthwith so far as the property of the bankrupt is sufficient to meet them.

(4) In the event of a landlord or other person distraining or having distrained on any goods or effects of the bankrupt within three months next before the date of the order of adjudication, the debts to which priority is given by this section shall be a first charge on the goods or effects so distrained on, or the proceeds of sale thereof; provided that in respect of any money paid under any such charge the landlord or other person shall have the same rights of priority as the person to whom the payment is made.

(5) Any remuneration in respect of a period of holiday or absence from work through good cause shall be deemed to be wages in respect of services rendered to the bankrupt during that period.

(6) Notwithstanding section 4 , this section shall not apply where the order of adjudication was made before the commencement of this Act, and in such a case, the provisions relating to preferential payments which would have applied if this Act had not been passed shall be deemed to remain in full force.

(7) Subsections (1), (2), (3), (5) and (6) shall apply in the case of an arranging debtor under the provisions of this Act as if he were a bankrupt, and as if the date of the filing of the petition for arrangement were substituted for the date of the order of adjudication.

(8) Any creditor who, in the case of an arrangement, votes in respect of any debt to which priority is given by this section for or against the acceptance of the debtor's proposal or any modification thereof or, in the case of a composition after bankruptcy, votes in respect of any such debt for or against the acceptance of the bankrupt's offer of composition or any modification thereof shall by so voting be deemed to have abandoned any rights under subsection (1) and shall be remitted to such rights (if any) in respect of any of the debts therein mentioned as such creditor would have had apart from that subsection.

(9) This section shall apply in the case of a deceased person who dies insolvent as if he were a bankrupt and as if the date of his death were substituted for the date of the order of adjudication.

(10) Nothing in this section shall alter the effect of section 3 of the Partnership Act, 1890, or shall prejudice the provisions of section 14 of the Trustee Savings Banks Act, 1863, or the provisions of the Friendly Societies Act, 1896.

Distribution of estate.

(cf. 1857, ss. 286, 288, 289, 290, 292, 293)

82. —(1) As soon as convenient after the receipt by him of sufficient funds to meet expenses, fees, costs and preferential payments and to pay a dividend to creditors in any bankrupt's estate the Official Assignee shall place on the Court file a list of creditors admitted by him or by the Court, a copy of the relevant account of the bankrupt in his books, particulars of expenses, fees, costs, preferential payments and dividend payable to creditors and his report on the realisation of the estate.

(2) The Official Assignee shall present the documents and the report filed in accordance with subsection (1) to the Court at a sitting to be held not less than twenty-one days after notice of the filing and of the sitting has been given in the prescribed manner.

(3) At the sitting the Court may make such order as it thinks fit for distribution of the estate or any part thereof by payment of the expenses, fees, costs and preferential payments as well as the relevant dividend.

(4) The file referred to in subsection (1) shall be open to public inspection on payment of a prescribed fee but no fee shall be charged to creditors inspecting the file.

(5) If for any reason the estate of the bankrupt is not fully distributed at such sitting, second and subsequent distributions shall be made as soon as convenient after the realisation of the residual estate. The procedure shall be the same as for the first distribution.

(6) In any case where there are no funds, or in the opinion of the Official Assignee insufficient funds, available for distribution to the creditors the Court may order the payment of expenses, fees and costs in that order so far as the funds extend. Where a balance remains, it shall be transferred to the account referred to in section 84 (1).

Accounts and audit.

(New)

83. —Rules of court shall provide for the keeping of accounts by the Official Assignee and for the audit of these accounts.

Official Assignee—Unclaimed Dividend Account.

(1857, ss. 61, 295, 296; 1872, s. 77; 1888, c. 44; LCR, 1888, r. 125)

84. —(1) The Official Assignee shall cause to be opened in the Central Bank of Ireland an account, to be called the “Official Assignee—Unclaimed Dividend Account”, and all money and securities which, immediately before the commencement of this Act, stood to the credit of The Unclaimed Dividend Account or The Unclaimed Dividend Account, Cork, shall be carried into that Account.

(2) The Official Assignee shall pay into that Account all unclaimed dividends and all money unclaimed, being part of any bankrupt's estate.

(3) (a) The Official Assignee shall be entitled to pay out of that Account all dividends lawfully claimed as well as the sums provided for by section 61 (3) (k).

(b) In order to provide temporarily for payments for which no funds are immediately available in the particular estate against which they are chargeable, there may be paid out of that Account to the credit of the Official Assignee in a separate account in the said bank such sums, subject to such conditions, as may be prescribed.

(4) The Official Assignee, with the leave of the Court, may from time to time invest the whole or any part of the money standing to the credit of the Account, and the interest on the investments shall be paid into it.

(5) The Court may order that the Official Assignee shall be paid out of the Account such sum by way of indemnity in respect of any damages, costs or expenses payable or incurred or to be payable or incurred by him for or by reason of any act or matter done by him while acting in his official capacity as the Court thinks just, including the costs of any proceedings taken by the Official Assignee with the leave of the Court where there are insufficient funds in the matter.

(New)

(6) The Account shall not be available for any purpose other than the purposes of this section.

Discharge and annulment.

(New)

85. —(1) Any bankruptcy subsisting at the commencement of this Act where the order of adjudication in respect thereof was made before 1st January, 1960, is hereby discharged.

(2) Where an adjudication order is discharged by virtue of the provisions of subsection (1) any property of the bankrupt which remains vested in the Official Assignee shall after provision has been made for the payment of the expenses, fees, costs and preferential payments be returned to the bankrupt and shall be deemed to be revested in him as and from the commencement of this Act.

(3) A bankrupt shall be entitled to a discharge from bankruptcy—

(a) when provision has been made for payment of the expenses, fees and costs due in the bankruptcy, as well as the preferential payments, and

(i) he has paid one pound in the pound, with such interest as the Court may allow, or

(ii) he has obtained the consent of all his creditors; or

(1857, s. 149)

(b) in a case to which section 41 applies.

(cf. 1872, s. 56)

(4) A bankrupt whose estate has, in the opinion of the Court, been fully realised shall be entitled to a discharge from bankruptcy when provision has been made for payment of the expenses, fees and costs due in the bankruptcy, as well as the preferential payments, and—

(a) his creditors have received fifty pence or more in the pound, or

(b) he or his friends have paid to his creditors such additional sums as will together with the dividend paid make up fifty pence in the pound, or

(c) the bankruptcy has subsisted for twelve years:

provided that in any application under paragraph (c) the Court shall be satisfied that all after-acquired property has been disclosed and that it is reasonable and proper to grant the application.

(5) A person shall be entitled to an annulment of his adjudication—

(1857, s. 129)

(a) where he has shown cause pursuant to section 16 , or

(b) in any other case where, in the opinion of the Court, he ought not to have been adjudicated bankrupt.

(New)

(6) An order of discharge or annulment shall provide that any property of the bankrupt then vested in the Official Assignee shall be revested in or returned to the bankrupt, and that order shall for all purposes be deemed to be a conveyance, assignment or transfer of that property to the bankrupt and, where appropriate, may be registered accordingly.

(cf. 1872, s. 56)

(7) A person who is entitled to a discharge or annulment may apply to the Court to obtain a certificate of discharge or annulment, as the case may require, under the seal of the Court.

(8) In this section “bankrupt” includes personal representatives and assigns.

Surplus.

(1857, s. 304)

86. —(1) If the estate of any bankrupt is sufficient to pay one pound in the pound, with interest at the rate currently payable on judgment debts, and to leave a surplus the Court shall order such surplus to be paid or delivered to or vested in the bankrupt, his personal representatives or assigns.

(2) The order shall for all purposes be deemed to be a conveyance, assignment or transfer of property and, where appropriate, may be registered accordingly.