Section 186LB — Bankruptcy Act 1966: Account-freezing notices—debt agreement administration trust accounts

Scope (1) This section applies to a bank if: (a) the Inspector-General believes on reasonable grounds that: (i) a person who is or was an administrator of a debt agreement holds or held an account with the bank; and (ii) the account was kept, or purportedly kept, in compliance with subsection 185LD(1); and (b) at a particular time (the show cause time), the Inspector-General asked the person: (i) under subsection 186K(3) or 186L(3), to give the Inspector-General a written explanation why the person should continue to be registered as a debt agreement administrator; or (ii) under subsection 40-40(1) of Schedule 2, to give the Inspector-General a written explanation why the person should continue to be registered as a trustee; and (c) if subparagraph (b)(ii) applies—the Inspector-General asked for the explanation on the basis of paragraph 40-40(1)(m) of Schedule 2. Giving of freezing notice (2) The Inspector-General may, by written notice (an account-freezing notice) given to the bank within 42 days after the show cause time, direct the bank not to: (a) make a withdrawal from the account; or (b) permit the making of a withdrawal from the account; except: (c) in accordance with the written consent of the Inspector-General; or (d) to recover from the account-holder an amount equal to an amount of tax (however described) that the bank has paid or is liable to pay in connection to the operation of the account; or (e) to discharge a liability of the account-holder to pay a fee or charge in relation to the operation of the account; or (f) in such circumstances (if any) as are specified in the regulations. Duration of freezing notice (3) An account-freezing notice given to a bank: (a) comes into force when the notice is given to the bank; and (b) remains in force for: (i) 42 days after the show cause time; or (ii) if a shorter period is specified in the notice—that shorter period. Extension of 42-day period (4) The Court may, on application by the Inspector-General, extend, or further extend, the 42-day period referred to in subsection (2) or subparagraph (3)(b)(i). Revocation of freezing notice (5) If an account-freezing notice is in force in relation to a bank, the Inspector-General may, by written notice given to the bank, revoke the account-freezing notice. Copy of account-freezing notice to be given to account-holder etc. (6) If the Inspector-General gives or revokes an account-freezing notice that relates to an account, the Inspector-General must give a copy of the account-freezing notice or the revocation notice, as the case may be, to the holder of the account. (7) A failure to comply with subsection (6) does not affect the validity of the account-freezing notice or the revocation notice, as the case may be. Consent of Inspector-General (8) A consent under paragraph (2)(c) may be: (a) unconditional; or (b) subject to such conditions (if any) as are specified in the notice of consent. (9) If the Inspector-General decides to refuse to give a consent under paragraph (2)(c), an application may be made to the Administrative Review Tribunal for review of the decision.