What to do when a client is bankrupt and you need authority to proceed with a transaction.

A bankrupt's property vests in the Official Assignee (OA) at the point of adjudication. That vesting for land is effected by registration of a Transmission to the OA from the bank.

A transfer cannot be made from the bankrupt directly to a third party purchaser, even if that transfer purports to be from the bankrupt but signed by the OA. There must be a Transmission to the OA first.

Bankrupt client

Once title is in the name of the OA, then an Authority and Instruction (A&I) may be used by the OA to effect a transfer to a third party. The Public Corporate A&I form should be used by the OA as the OA is acting as part of a government department.

Undischarged bankrupt client

You must deal with the OA – either getting your client to sign the A&I and modify the form to show that the client is an undischarged bankrupt, attaching consent from the official assignee, or getting the OA to sign the A&I form directly and attaching a copy of the appointment of the OA to the A&I form. 


The exception to this requirement is where the bankrupt is not the legal or beneficial owner of the property, but is holding title as a trustee or executor.

In such circumstances, the OA need not be involved (and in fact will decline jurisdiction to be involved). The client's self-certification contained in clause 4(c) should be modified by deleting 'not' and to note that the Client is holding title as trustee or executor as the case may be, for example:

"4(c) I am an undischarged bankrupt but hold title as trustee/executor"

Practice guidelines

Refer to the commentary in Guideline O of the PLS Guidelines below.

Last Updated: 1 September 2020